Huntingdon/KEYreit

Documents
(SEDAR filing: 31 January 2013) Offer of Huntingdon Capital Corporation (the "Offeror") for units of KEYreit (333 K). Farris, Vaughan
Summaries
Summary Under
Tax Topics - Public Transactions - Mergers & Acquisitions - REIT/Income Fund/LP Acquisitions - Trust Acquisitions by Corporations
Huntingdon unsolicited partial cash bid for KEYreit
Offeror

The Offeror is a real estate operating company which is listed on the TSX, was incorporated in B.C. and owns a portfolio of 36 industrial, office, retail and aviation-related properties in Canada, and a 30% interest in FAM REIT, whose portfolio it manages. It is a successor to Huntingdon REIT as a result of the conversion of Huntingdon REIT from an income fund to a corporation by way of a B.C. plan of arrangement which was effective December 31, 2012.

KEYreit

KEYreit is listed on the TSX, and was formerly Scott's REIT. It has stated that it believes it will continue to qualify as a REIT for Canadian income tax purposes.

Offer

Unsolicited offer for up to 6,628,940 units of KEYreit for cash consideration of $7.00 per unit (representing a 13.3% premium), conditional on KEYreit units being tendered which, together with any KEYreit units owned directly or indirectly by the Offeror, represent at least 50% of the units then outstanding. Convertible securities must first convert before tendering.

Purpose of Offer

The Offeror currently owns 5.4% of the KEYreit units. The purpose of the offer is to acquire approximately 45% of the outstanding units with a view to restructuring the investment.

Canadian tax consequnces

An acquisition of the KEYreit units of a Canadian resident by the Offeror generally will give rise to capital gains or loss treatment. Standard taxable Canadian property disclosure for non-residents.