Brookfield Property Partners’ offer for Brookfield Office Properties shares includes an exchangeable LP unit option

Brookfield Property Partners ("BPY") which, along with some other Brookfield entities, indirectly holds approximately 49% of the common shares of Brookfield Office Properties Inc. ("BPO"), is offering to buy the balance of the common shares for cash or BPY units (with the aggregate consideration fixed at approximately 67% units and 33% cash.)

However, Canadian-resident BPO shareholders can choose to receive exchangeable units of an indirect subsidiary Ontario LP ("Exchange LP") of BPY in order to elect under s. 97(2).  Similarly to Slate, the exchangeable units are only retractable against Exchange LP for BPY units, with no direct exchange right with BPY – although on retraction BPY has an overriding call right to acquire the exchangeable units.  (This is analogous to the exchangeable share structure blessed in the Explanatory Notes on derivative forward agreements.)

Exchange LP, with individual partners, will not be an "excluded subsidiary entity" (cf. BLF).  This doesn't matter as its BPO shares will be its only asset.  It also will qualify as a Canadian partnership (as required under s. 97(2)) as there is a "blocker" Canadian subsidiary between it and BPY.

Neal Armstrong.  Summary of Offer of Brookfield Property Partners under Mergers & Acquisitions - REIT/Income Fund/LP Acquisitions - LP Acquisitions of Corporations.