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Gold/Mining/Energy : Canadian REITS, Trusts & Dividend Stocks
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To: Kitskid who wrote (243)7/2/1999 4:14:00 PM
From: Kitskid  Read Replies (1) of 11633
 
newswire.ca
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CHIP REIT continues to recommend rejection of Royal Host offer
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VANCOUVER, July 2 /CNW/
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Canadian Hotel Income Properties
Real Estate Investment Trust - HOT.un
-

Canadian Hotel Income Properties Real Estate Investment Trust (''CHIP
REIT'') announced today that it has waived the application of its unitholder
rights plan with respect to the Royal Host offer for CHIP REIT but continues
to recommend that unitholders reject the offer. The waiver of the rights plan
is in response to Royal Host's announcement that it has extended the expiry of
its offer to 8:00 p.m. (PDT) on July 6, 1999.
CHIP REIT's Board of Trustees believes the Royal Host offer is
inadequate, and continues to pursue alternative transactions to maximize
unitholder value. CHIP REIT's Trustees recommend that unitholders not tender
their units to the Royal Host offer for a number of reasons:

- CHIP REIT's financial advisor has concluded that the Royal Host offer
of 1.19 Royal Host units for each CHIP REIT unit is inadequate from a
financial point of view.

- The offer provides no discernable value with a negligible premium
(2.4%) to CHIP REIT's pre-announcement trading price and no material
increase in recurring distributable cash to CHIP REIT unitholders.

- Combining with Royal Host would weaken the balance sheet, raising the
cost of debt and reducing access to capital.

- Combining with Royal Host would weaken CHIP REIT's hotel portfolio,
dramatically increasing exposure to the less attractive
limited-service hotel segment, which is more susceptible to new
competition.

CHIP REIT was Canada's first hotel real estate investment trust and has a
focus on mid-market and upscale full-service hotels. Through upgrades,
repositioning and franchising, CHIP REIT and its wholly owned hotel manager,
CHIP Hospitality, improve the operating performance of the properties within
the portfolio to create value for investors. CHIP REIT currently owns and
operates 36 hotels with close to 8,000 rooms across Canada. CHIP REIT units
trade on The Toronto Stock Exchange under the symbol HOT.un.
%SEDAR: 00005031E

-30-
For further information: Kevin Grayston, Executive Vice President &
Chief Financial Officer (604) 685-0011, fax (604) 685-0019, www.chipreit.com <http://www.chipreit.com>
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