Kingsett & OPB/Primaris

Offeror

The Offeror is an Ontario LP whose LP units are owned equally by an affiliate of KingSett Capital, and OPB Trust, an associate of OPB. A majority of the shares of the GP of the Offeror are owned by KingSett Capital, with the balance by OPB Trust.

Offer

Unsolicited offer of 100% cash consideration for the units of Primaris ($26.00 per unit representing a 12.8% premium), conditional on 66 2/3% of the fully diluted Primaris units being tendered. Convertible securities must first convert before tendering. Unitholders who have deposited their Units will be deemed to have deposited the associated Unitholder Rights Plan rights.

Subsequent acquisition transaction

In order to effect a compulsory acquisition or subsequent acquisition transaction, the Offeror intends to amend the Primaris Declaration of Trust in order to (i) provide that a compulsory acquisition of the remaining units (at the same consideration per unit) may occur if the Offeror, and its affiliates, hold more than 66 2/3% of the units after the take-up and payment for units under the offer, or (ii) or to reclassify the units not held by the Offeror and its affiliates as Special Units so that immediately after the issuance of the Special Units, their holders are deemed to have transferred their units to the Offeror for the same cash consideration.. The execution of the letters of transmittal for tendering to the bid in respect of 66 2/3% of the outstanding units constitutes approval of the related special resolution. As the consideration offered for the remaining units under a Compulsory Acquisition or Subsequent Acquisition Transaction would be identical to that under the Offer, the Offeror intends to treat the units acquired under the Offer as "minority" units for purposes of the majority-of-minority approval requirement in MI 61-101.

Subsequent sale transactions

The Offeror and RioCan REIT have agreed for the sale of specified assets of Primaris for a purchase price of $1.133 billion. RioCan will advance a short-term loan of $635M to the Offeror at the time of take-up. The Offeror also has entered into an agreement with certain members of the KingSett/OPB group to sell Primaris assets for $1.49 billion.

Canadian tax consequnces

An acquisition of the Primaris units of a Canadian resident by the Offeror (including under a Compulsory Acquisition or Subsequent Acquisition Transaction) generally will give rise to capital gains or loss treatment. If a Subsequent Acquisition Transaction entails a redemption of the remaining units, the redeemed unitholder will be required to include an allocated portion of Primaris' income for the year, including any designated net taxable capital gains. In the case of a non-resident, it would be subject to withholding tax on the full amount of any ordinary income or the full amount of capital gains paid out of the TCP Gains Balance of Primaris, and generally would be subject to Part XIII.2 tax on any capital payments made by Primaris.

US tax consequences

If Primaris has made an election to be classified as a partnership for Code purposes, non-resident holders receving distributions from Primaris that are subject to Canadian withholding tax may be denied the benefit of reduced rates under the Canada-US Convention as a result of Art. IV(7)(b) of the Convention.

Subject to the PFIC rules, a US unitholder will realized a capital gain or loss on a disposition of units pursuant to the Offer based on the difference the US-dollar value of the Canadian dollars received pursuant to the Offer and the adjusted tax basis of the units. The consequences of a Subsequent Acquisition Transaction will depend on the manner in which it is carried out.