Still nothing from Royal Host.
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nationalpost.com
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Monday, June 14, 1999 Royal Host Real Estate to update forecast David Steinhart Financial Post
Royal Host Real Estate Investment Trust, owner of the Travelodge master franchise, will own 72 hotels and 25,000 rooms if it successfully completes a deal with Canadian Hotel Income Properties REIT.
Royal Host Real Estate Investment Trust has had a change of heart. Late Friday, Calgary-based Royal Host -- owner of the Travelodge master franchise -- informed Canadian Hotel Income Properties REIT that it intended to provide a revised forecast and corrected information regarding its takeover offer for all of the units of CHIP REIT. "There were a couple of small, insignificant aspects they wanted changed and we're prepared to do that," said Randy Royer, Royal Host's president and chief executive, in an interview yesterday. "But we do still stand by our proposal." CHIP's reaction to the proposal was mixed. "We are pleased our unitholders will be provided with corrected and up-to-date information about Royal Host, but are con-cerned that this information is being made available only 10 days before the current expiry date of the offer," Rhys Eyton, chairman, president and chief executive of CHIP, said in a statement. Royal's offer expires June 24. The new developments came only a few days after Mr. Royer said Royal Host would not budge on its original offer and after CHIP made submissions to securities commissions in Ontario, Alberta, B.C. and Quebec, stating the offer contained outdated, incorrect and misleading information. CHIP also told its unitholders they should reject Royal Host's offer outright, based on advice from an independent financial advisor. On May 19, Royal Host said it wanted to take over CHIP REIT in a $339-million bid for all units of CHIP. The REIT adopted a poison pill a few days after the offer. Two weeks ago, Royal Host applied to regulators asking that the shareholders' rights plan be killed. Royal Host has said all along that the unit-swap deal places an 11% premium on the recent trading price of units in CHIP and that it is a great deal for CHIP unitholders. However, those same unitholders were perplexed by what they called inaccurate information. CHIP had wanted Royal to amend its circular to correct its calculation of 1998 pro forma distributable cash per unit. Mr. Royer said the company will now do that, but he did not give the exact number per unit. CHIP was Canada's first hotel real estate investment trust. It owns and operates 36 hotels with close to 8,000 rooms across Canada. A deal would mean Royal Host would own 72 hotels and 25,000 rooms. |
