HOMEQ shareholders approve the Arrangement with Birch Hill

TORONTO, May 28, 2012 /CNW/ - HOMEQ Corporation ("HOMEQ" or the "Company") (TSX: HEQ), today announced that holders of HOMEQ common shares have voted in favour of the Arrangement under which Birch Hill Equity Partners ("Birch Hill") will indirectly acquire all of the outstanding common shares of HOMEQ (the "Arrangement") for cash at a price of $9.50 per common share. The vote took place at the annual and special meeting of shareholders on May 28, 2012 in Toronto.

"We thank shareholders for supporting the transaction with Birch Hill," said Gary Samuel, Chairman of the HOMEQ Board of Directors. "Shareholder approval represents an important milestone in the process of completing the Arrangement."

The application to the Ontario Superior Court to obtain the final order approving the Arrangement is scheduled for May 30, 2012. If court approval and approval under the Bank Act are obtained and the other conditions to the completion of the Arrangement are satisfied or waived, HOMEQ expects that the Arrangement will be completed in the third quarter of 2012. Birch Hill has waived a closing condition that holders of not more than 10% of outstanding shares exercise dissent rights.

Steven Ranson, HOMEQ's President and Chief Executive Officer, said, "We believe that Birch Hill is an excellent fit for HOMEQ, enabling us to address our expanding liquidity and capital needs. We want to thank all of our shareholders for their support in favour of this transaction and of course for their support over the years."

Vote Results

Over 75% of HOMEQ's total outstanding shares were voted at the annual and special meeting, of which 80% of shares were voted in support of the Arrangement. Excluding shares voted by Maxam Opportunities Fund Limited Partnership and Maxam Opportunities Fund (International) Limited Partnership, the Arrangement was supported by 97% of the shares voted at the meeting, showing overwhelming support from the Company's shareholders.

At the meeting, shareholders also elected the incumbent directors to the Board, re-appointed Ernst and Young LLP as auditors of the Company and passed a resolution approving the HOMEQ shareholder rights plan.

About HOMEQ

HOMEQ's wholly-owned subsidiary HomEquity Bank is the only national provider of reverse mortgages to homeowners aged 55 and over, Canada's fastest growing demographic segment. HomEquity Bank originates and administers Canada's largest portfolio of reverse mortgages under the CHIP Home Income Plan brand. As of March 31, 2012, the mortgage portfolio comprised approximately 9,100 reverse mortgages with an accrued value of $1.2 billion, secured by residential properties across Canada worth approximately $3.3 billion.  HomEquity Bank has been the main underwriter of reverse mortgages in Canada since its predecessor, Canadian Home Income Plan, pioneered the concept in 1986.

HOMEQ's shares trade on the Toronto Stock Exchange under the symbol HEQ.  Additional information on HOMEQ, including annual and quarterly reports can be viewed at www.homeq.ca.

About Birch Hill

With $2 billion in capital under management, Birch Hill has invested in more than 50 investments since 1994. Birch Hill is the leader in long-term value creation in the Canadian mid market. For more information about Birch Hill Equity Partners, please visit www.birchhillequity.com.

Forward-Looking Information

Certain statements included herein constitute "forward-looking statements". All statements, other than statements of historical fact, included in this release that address future activities, events, developments or financial performance are forward-looking statements. These forward-looking statements can be identified by the use of forward-looking words such as "may", "should", "will", "could", "expect", "intend", "plan", "estimate", "anticipate", "believe", "future" or "continue" or the negative thereof or similar variations. In particular, statements about the proposed Arrangement between Birch Hill and HOMEQ, including the expected timetable for completing the Transaction, the receipt of regulatory approvals and any other statements regarding HOMEQ's future expectations, beliefs, goals or prospects are or involve forward-looking information. These forward-looking statements are based on certain assumptions and analyses made by HOMEQ and its management, in light of their experiences and their perception of historical trends, current conditions and expected future developments, as well as other factors they believe are appropriate in the circumstances. Shareholders are cautioned not to put undue reliance on such forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties, assumptions and other factors, many of which are outside the control of Birch Hill and HOMEQ, that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, among other things, the parties' ability to consummate the Arrangement; the parties' ability to satisfy the conditions to the completion of the Arrangement, court approval, or regulatory approval for the Arrangement may not be obtained, or may not be obtained on the terms expected or on the anticipated schedule; general economic and market factors (including changes in global, national or regional financial, credit, currency or securities markets), changes or developments in global, national or regional political conditions (including any act of terrorism or war), changes in government laws or regulations (including tax laws) and changes in GAAP or regulatory accounting requirements. Readers are cautioned that the foregoing lists are not exhaustive.

Such forward-looking statements should, therefore, be construed in light of such factors. If any of these risks or uncertainties were to materialize, or if the factors and assumptions underlying the forward-looking information were to prove incorrect, actual results could vary materially from those that are expressed or implied by the forward-looking information contained herein. All forward-looking statements attributable to HOMEQ, or persons acting on its behalf, are expressly qualified in their entirety by the cautionary statements set forth above. Readers are cautioned not to place undue reliance on forward-looking statements contained herein, which reflect the analyses of the management of HOMEQ only as of the date of this release.

For more information regarding these and other risks, readers should consult HOMEQ's reports on file with applicable securities regulatory authorities accessible online by going to SEDAR at www.sedar.com or by going to the HOMEQ website at www.homeq.ca. HOMEQ is under no obligation, and HOMEQ expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Steven K. Ranson, President and Chief Executive Officer
[phone]

Gary Krikler, Senior Vice President and Chief Financial Officer
[phone]