ISS Recommends HOMEQ Shareholders Vote for the Birch Hill Arrangement Agreement

TORONTO, May 10, 2012 /CNW/ - HOMEQ Corporation ("HOMEQ" or the "Company") (TSX: HEQ), announced today that Institutional Shareholder Services Inc. ("ISS") has recommended that its clients vote FOR the Arrangement Agreement, under which Birch Hill Equity Partners ("Birch Hill") will indirectly acquire all of the outstanding common shares of HOMEQ for cash at a price of $9.50 per share. The Arrangement Agreement will be voted on by HOMEQ Shareholders at the Company's Annual and Special Meeting of Shareholders on May 28, 2012.

ISS is a leading independent corporate governance analysis and proxy voting firm. Its recommendations assist shareholders in making choices regarding proxy voting and transaction decisions. In recommending that its clients vote FOR the Birch Hill Arrangement Agreement, ISS stated:

"Based on a review of the terms of the transaction and, in particular, the reasonable strategic rationale, cash consideration, satisfactory premium and absence of superior offers at this time, a vote FOR is warranted."

"We are pleased that after careful analysis ISS, in making its recommendation, has confirmed our view that the Birch Hill transaction represents the best alternative for our shareholders," said Gary Samuel, Chairman of the HOMEQ Board of Directors. "The transaction is designed to provide shareholders with significant and immediate value for their shares. It is also expected to eliminate the risk and uncertainty associated with attempting to secure affordable, non-dilutive capital to fund the Company's future growth."

The basis for the HOMEQ Board of Directors' unanimous recommendation (with the interested directors abstaining) to vote FOR the Arrangement Agreement is contained in the Management Information Circular filed with Canadian securities regulators on May 1, 2012. A copy of the Circular is available online at www.homeq.ca or www.sedar.com. The Circular has also been mailed to HOMEQ shareholders.

The potential transaction is subject to the receipt of applicable regulatory approvals, including approval under the Bank Act.

How to Vote Shares FOR the Arrangement Agreement

To ensure that your vote is recorded, please complete the voting instruction form sent to you by Broadridge Communications Solutions, Canada or Computershare Trust Company of Canada and return it in accordance with the specified instructions on or before the date and time noted therein, whether or not you plan to attend the Meeting.

If you have any questions or require more information with regard to voting your HOMEQ shares, please contact the Company's proxy solicitation agent, Georgeson Shareholder Communications Canada Inc., at its toll-free number: 1-866-656-4104 or by email at [email protected].

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 December 31, 2011, the mortgage portfolio comprised approximately 9,000 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, 20 partner companies and 30 fully realized 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 Shareholder and 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, including that the receipt of Shareholder approval, 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 Birch Hill or HOMEQ, as appropriate, 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.

Shareholders 

Georgeson Shareholder Communications Canada Inc.
1-866-656-4104
[email protected]

Media 

Longview Communications

Joel Shaffer
416-649-8006

David Ryan
416-649-8007