OSC Denies Huntingdon's Request, Permits KEYreit's Rights Plan To Remain In Effect

TORONTO, March 15, 2013 /CNW/ - KEYreit (TSX: KRE.UN) announced today that the Ontario Securities Commission ("OSC") has issued an order that will permit KEYreit's Unitholder Rights Plan (the "Rights Plan") to remain in effect until April 1, 2013 unless KEYreit's value maximization process ends earlier.

The Rights Plan will remain in effect until the earlier of April 1, 2013 or two business days following the public announcement of any competing offer or transaction for KEYreit, or upon the abandonment by KEYreit of the current value maximization process.

As a result of the OSC's order, Huntingdon Capital Corp. ("Huntingdon") will not be able to take up any units of KEYreit under Huntingdon's inadequate $7.00 per unit take-over bid offer (the "Inadequate Offer").

"We believe that KEYreit unitholders deserve the opportunity to make an informed decision after the Board has had sufficient time to fully explore all available alternatives to the Inadequate Offer, which does not even start to compensate unitholders for the value of their ownership in KEYreit," said Donald Biback, Chairman of the board of trustees (the "Board"). "The OSC's decision enables us to continue our value maximizing process and we look forward to updating unitholders on the results of the process as soon as we can."

The OSC's decision followed a hearing yesterday to consider the request of Huntingdon to cease trade the Rights Plan prior to the expiry of the Inadequate Offer on March 18, 2013. The OSC denied Huntingdon's request. The OSC's order may be found at the OSC's website at www.osc.gov.on.ca/en/Proceedings_rad_20130314_keyreit-huntingdon.htm.

Update on KEYreit's value maximization process

KEYreit's Board is continuing to strongly pursue its process to maximize value for unitholders. The Board remains confident that given the additional time granted by the OSC, it will be able to present unitholders with a superior alternative to the Inadequate Offer.

BMO Capital Markets has advised KEYreit that the due diligence process for potential bidders requires sufficient time to achieve successful results, given that KEYreit's assets are comprised of 226 properties across nine provinces. A serious bidder will need to review the properties, relevant local real estate markets, the leases, third party reports in respect of the properties (such as environmental site assessments), related mortgage debt and all relevant corporate financial information to prepare a binding offer.

Unitholders urged to read key documents

KEYreit urges unitholders to read three key documents that have been posted to its website at www.keyreittruevalue.com. The three documents are:

• A Notice of Change to Trustees Circular dated March 9, 2013 recommending that unitholders REJECT the Inadequate Offer;
• A presentation to unitholders dated March 2013 explaining how the Inadequate Offer undervalues KEYreit; and
• A Management Information Circular dated February 25, 2013 recommending that unitholders VOTE FOR the Unitholder Rights Plan.

The Notice of Change and the Management Information Circular have been mailed to unitholders and are also available at www.sedar.com.

If you have tendered your units, you should withdraw them immediately

Unitholders who have tendered units and who wish to obtain advice or assistance in withdrawing their units are urged to contact their broker or Kingsdale Shareholder Services Inc., the information agent retained by KEYreit, at 1-888-518-1562.

About KEYreit

KEYreit (TSX: KRE.UN) is Canada's premier small-box retail property owner with 226 properties in nine provinces across Canada. KEYreit's properties are well located and geographically diverse across Canada with the majority of all properties containing long-term quadruple net leases.

To find out more about KEYreit (TSX: KRE.UN), visit our website at www.keyreit.com.

Forward-Looking Statements

This press release contains certain information or statements that may constitute forward-looking information within the meaning of securities laws, which reflect the current view of KEYreit with respect to KEYreit's objectives, plans, goals, strategies, future growth, results of financial and operating performance and business prospects and opportunities. In some cases, forward-looking information can be identified by the use of terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "forecast", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. In particular, forward-looking information included in this press release includes, but is not limited to, statements with respect to KEYreit's value maximizing process, KEYreit's turnaround including its ability to lease vacant property units, execute planned acquisitions, collect minimum rents, diversify its tenant base, undertake land intensification projects, refinance loans and mortgages at their maturity, complete accretive acquisitions, and maintain or grow monthly cash distribution levels, and also with respect to the timing of such events. Forward-looking information should not be read as guarantees of future events, performance or results, and will not necessarily be accurate indications of whether, or the times at which, such events, performance or results will be achieved. All of the statements and information in this press release containing forward-looking information are qualified by these cautionary statements.

Forward-looking statements are based on information available at the time they are made, underlying estimates and assumptions made by management and management's good faith belief with respect to future events, performance and results, and are subject to inherent risks and uncertainties surrounding future expectations generally which could cause actual results to differ materially from what is currently expected. Such risks and uncertainties include, but are not limited to KEYreit's reliance on key tenants, risks associated with investment in real property, competition, reliance on key personnel, financing and refinancing risks, distributions, environmental matters, tenant risks, risks related to current economic conditions and other risk factors more particularly described in KEYreit's most recent Annual Information Form available on SEDAR at www.sedar.com. Additional risks and uncertainties not presently known to KEYreit or that KEYreit currently believes to be less significant may also adversely affect KEYreit.

KEYreit cautions readers that the list of factors is not exhaustive and that should certain risks or uncertainties materialize, or should underlying estimates or assumptions prove incorrect, actual events, performance and results may vary significantly from those expected. There can be no assurance that the actual results, performance, events or activities anticipated by KEYreit will be realized or, even if substantially realized, that they will have the expected consequences to, or effect on, KEYreit. The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date.

KEYreit disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required under applicable securities laws.

SOURCE: KEYreit

KEYreit unitholders, please contact:
Kingsdale Shareholder Services Inc.
1-888-518-1562 toll-free in North America
1-416-867-2272 outside of North America (collect calls accepted)
[email protected] 

Media, please contact: 
Longview Communications Inc.
Alan Bayless 604-694-6035, [email protected]
Olena Lobach 416-649-8009, [email protected]