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To: Kitskid who wrote (243)	6/17/1999 10:04:00 PM
From: Kitskid	Read Replies (2) \| Respond to of 11633

- nationalpost.com - Thursday, June 17, 1999 - CHIP in talks with new suitors Moves under way to fend off Royal Host takeover bid - David Steinhart Financial Post Shannon Oatway, Calgary Herald - Randy Royer, Royal Host's president, isn't surprised by CHIP's talks. Canadian Hotel Income Properties REIT said yesterday it is in discussions with a number of firms about a potential deal that could replace the current hostile takeover offer from Royal Host REIT. "We're talking to a number of parties," said Kevin Grayston, CHIP's chief financial officer, who refused to name them. "At the time of the Royal Host offer, we were already in discussions with a third party." Sources close to the Royal Host-CHIP proposal said yesterday Westmont Corp., a large, private hotelier based both in Toronto and New York may be interested in making a deal with CHIP. Earlier this year, Westmont paid $7 a share for 37.9 million shares of UniHost Corp., a Mississauga, Ont.-based firm known for its Quality and Comfort inns. Officials with Westmont had no comment on the likelihood of a deal with CHIP. Randy Royer, president and chief executive at Calgary-based Royal, said he's not surprised CHIP would be talking to other parties. In fact, he said Royal would not be dissatisfied if the deal fell through. "We don't need to do it . . . we have a nice solid company," he said. "If they get a better offer, they should consider it." David Vanderwood, an analyst with Odlum Brown Ltd. in Vancouver, said CHIP is talking to a few other parties. "CHIP wants to get into the upscale hotel business and Royal Host is headed the other way," he said. "I don't think Royal Host would be their first choice." On May 19, Royal Host said it wanted to take over CHIP REIT in a $339-million bid for all units of CHIP, which adopted a poison pill a few days later. 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. The deadline for the transaction is June 25. Mr. Vanderwood said Royal Host is desperate to do the deal because it would run the risk of becoming an orphan in the Canadian hotel business if it didn't go through, which he said will likely be the outcome. "I don't think it's going to fly in its present form, but it could go down to the wire before we find out," he said. "The CHIP board has a duty to its unitholders, but something else [another deal] could happen before the deadline." One Toronto analyst, who requested anonymity, said he wouldn't be a surprised if CHIP was trying to make another deal. "There are a number of names being talked about . . . mostly U.S. companies," the analyst said. "But as a private company, I don't think Westmont would put up the money needed." The analyst also said the deal with Royal Host does have an upside for CHIP. "Combined, both the portfolios are complementary, but that's not to suggest Royal's financial offer is that good." Earlier this week, Royal sent out a notice of change and extension to CHIP unitholders containing a revised forecast and corrected information regarding the takeover. Royal's updated financial forecast shows improved distributable cash of $1.24 per unit, compared with $1.23 in the earlier forecast. Royal believes the synergies and operational savings and other benefits from the combination of itself and CHIP are substantial and will be shared equitably between all unitholders, with CHIP unitholders receiving a disproportionate share. This, the company said, represents a clear enhancement of value to CHIP unitholders.

To: Kitskid who wrote (243)	7/2/1999 4:14:00 PM
From: Kitskid	Read Replies (1) \| Respond to of 11633

newswire.ca - CHIP REIT continues to recommend rejection of Royal Host offer - VANCOUVER, July 2 /CNW/ - 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>