Polar Securities Makes Public Statement to Fellow Transglobe Debentureholders and Announces Invitation to Acquire for Cash Any and All Outstanding Transglobe Debentures from Eligible Debentureholders

Highlights the Significant Discount to the Fair Value of the Debentures under TransGlobe's Consent Solicitation and Strongly Urges Fellow Debentureholders NOT to Consent to the Proposed Amendments

Invites Eligible Debentureholders to Contact Their Brokers to Discuss a Potential Sale of Debentures to Polar at a Premium to the Value Associated with the Consent Solicitation

// NOT FOR DISTRIBUTION TO THE UNITED STATES OR OVER UNITED STATES NEWSWIRE SERVICES //

TORONTO, May 23, 2012 /CNW/ - Polar Securities Inc. ("Polar"), as investment manager of an investment fund holding approximately 29.5% of the principal amount of the outstanding 5.40% extendible convertible unsecured subordinated debentures (the "Debentures") of TransGlobe Apartment Real Estate Investment Trust ("TransGlobe") (TSX:TGA.UN, TGA.DB), issued today a public statement to fellow Debentureholders setting out Polar's intention not to consent to TransGlobe's consent solicitation to obtain approval for certain proposed amendments to the indenture dated July 29, 2011 governing the Debentures and explaining the reasons for its decision.

Polar also announced today that it is currently interested in acquiring, from the holders of Debentures as of the record date of the consent solicitation (5:00 pm (Eastern time) on May 14, 2012), any and all of such Debentures not already under the ownership, control or direction of Polar for $106.00 in cash per Debenture plus accrued and unpaid interest. The price proposed by Polar is significantly higher than the price available to Debentureholders under the consent solicitation. Polar invites Debentureholders who may be interested in selling Debentures to Polar at this price and who have not delivered a consent to TransGlobe in respect of the consent solicitation or assigned their right to do so to any other person, to contact their broker. Any purchase of Debentures by Polar in connection with this invitation will be conditional upon, among other things, the Debentureholder (i) confirming, to Polar's satisfaction, that the Debentureholder owned the Debentures as of 5:00 pm (Eastern time) on May 14, 2012, (ii) representing and warranting to Polar that the Debentureholder has not delivered a consent to TransGlobe in respect of the consent solicitation and has not assigned their right to do so to any other person, and (iii) irrevocably appointing Polar as their attorney for the purposes of consenting to the consent solicitation or otherwise exercising the voting rights attached to their Debentures in respect of the proposed amendments to the Debenture indenture and irrevocably assigning all such voting and consent rights to Polar. Polar reserves the right to amend or retract, at any time and in its sole discretion, its interest in acquiring Debentures as described above. This press release does not constitute a binding offer by Polar to purchase any Debentures.

Paul Sabourin, Chairman & Chief Investment Officer of Polar commented on Polar's decision, "As investment manager of the largest holder of TransGlobe debentures, we do not support the consent solicitation, which would allow TransGlobe to redeem the debentures at a significant discount to their fair value. In light of these circumstances, we wish to make public our intention not to consent to the proposed amendments. We strongly urge our fellow debentureholders to do the same."

Established in 1991, Polar is registered as an investment dealer in Canada. Polar acts as investment manager of certain investment funds and other accounts. As of the date hereof, an investment fund managed by Polar owns approximately $14.3 million principal amount of the Debentures, representing approximately 29.5% of the outstanding Debentures.

The text of the public statement to TransGlobe debentureholders is as follows:

Dear Fellow TransGlobe Debentureholders:

An investment fund managed by Polar Securities Inc. holding approximately 29.5% of the principal amount of the outstanding 5.40% extendible convertible unsecured subordinated debentures (the "Debentures") of TransGlobe Apartment Real Estate Investment Trust ("TransGlobe") is, to our knowledge, the largest holder of the Debentures. We do not believe TransGlobe's offer to acquire all outstanding Debentures under the related consent solicitation commenced by TransGlobe on May 18, 2012 (the "Consent Solicitation") to obtain approval for certain proposed amendments (the "Proposed Amendments") to the trust indenture dated July 29, 2011 governing the Debentures (the "Indenture") is in the best interests of Debentureholders. Accordingly, we do not intend to consent to the Proposed Amendments in respect of any of the Debentures under our ownership, control or direction.

The redemption price payable to Debentureholders if the Proposed Amendments are approved is significantly lower than the fair value to holders if TransGlobe is required to defease the Debentures in accordance with the existing terms of the Indenture. We have set out below in greater detail some of the reasons why we do not intend to consent to the Proposed Amendments:

• The Indenture does not currently allow TransGlobe to unilaterally redeem the Debentures.
• The Proposed Amendments, if they become effective, would permit TransGlobe to redeem any outstanding Debentures for cash at a redemption price equal to 101% of the aggregate principal amount of the Debentures being redeemed, plus accrued interest to, but excluding, the date of redemption, upon the occurrence of a change of control (which will occur coincident with the closing of the privatization transaction). However, if the Proposed Amendments are not approved, the only way that TransGlobe can satisfy Starlight's requirement that the Debentures be eliminated as part of the privatization transaction is to "defease" them.
• Defeasance involves TransGlobe depositing with the trustee for the Debentures funds that are sufficient to pay all of the interest and principal on the Debentures in accordance with their terms until October 1, 2016 (the first date that they may be redeemed under the current terms of the Indenture). In other words, Debentureholders would continue to enjoy the current yield they are enjoying on their investment, on a risk free basis, until October 1, 2016. If the Debentures were to be defeased rather than redeemed, we calculate that the current value of each Debenture would be significantly higher than the price offered by the Consent Solicitation or the current market value.

We strongly believe the value of the Debentures if defeased in accordance with the existing terms of the Indenture is significantly higher than the value being offered by TransGlobe as part of the Consent Solicitation.

For the reasons set out above, we do not intend to consent to the Proposed Amendments and we strongly urge our fellow Debentureholders to do the same.

Yours truly,

Polar Securities Inc.

Paul Sabourin

Chairman and Chief Investment Officer

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Certain information in this press release may constitute "forward-looking information", as such term is defined in applicable Canadian securities legislation, about the objectives of Polar as they relate to TransGlobe, the 5.40% extendible convertible unsecured subordinated debentures of TransGlobe (the "Debentures"), Polar's intentions regarding the Consent Solicitation, Polar's interest in purchasing additional Debentures from the holders thereof and the terms on which it might be prepared to do so, Polar's views and calculations regarding the value of the Debentures, the benefits to Debentureholders if the Debentures are defeased, the potential consequences if the proposed amendments (the "Proposed Amendments") to the trust indenture dated July 29, 2011 governing the Debentures (the "Indenture") are approved, the potential impact of certain initiatives on the value of the Debentures, Polar's intentions with respect to the its invitation to purchase Debentures from eligible Debentureholders, and other matters. All statements other than statements of historical fact may be forward-looking information. Forward-looking information is often, but not always, identified by words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "would", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions.

Material factors or assumptions that were applied in providing forward-looking information, include, but are not limited to, TransGlobe's future growth potential, its results of operations, future cash flows, the future performance and business prospects and opportunities of TransGlobe as a public or private entity, TransGlobe's continued ability to pay interest and principal on the Debentures as they become due under the Indenture, the completion of the proposed transaction to privatize TransGlobe, the commencement and completion of Polar's invitation to purchase Debentures from eligible Debentureholders, the accuracy of Polar's assessment of potential purchases of Debentures from eligible Debentureholders, satisfaction of the conditions to its invitation to purchase Debentures from eligible Debentureholders, and the current general regulatory environment and economic conditions remaining unchanged.

Forward-looking information contained in this press release reflect current expectations of Polar regarding future events and operating performance of TransGlobe as a public or private entity, the Debentures or other matters and speak only as of the date of this press release. Such forward-looking information is based on currently available competitive, financial and economic data and operating plans and are subject to known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of TransGlobe, or general industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Recent events in global financial and credit markets have resulted in abnormally high market volatility and a level of uncertainty not seen in decades. Such uncertainty may continue to impact the global, North American and Canadian economies in unpredictable ways and may impact the results of TransGlobe in a manner which is currently impossible to ascertain. Many other factors could also cause TransGlobe's actual results, performance or achievements or the value of the Debentures and calculations thereof or the benefits and consequences of various alternative treatment of the Debentures to vary from those expressed or inferred herein, including without limitation, the possibility that the anticipated benefits from the transaction to privatize TransGlobe cannot be fully realized or may take longer to realize than expected; that the Debentureholders will consent to the Proposed Amendments; uncertainty as to the commencement and completion of the purchase of the Debentures in accordance with the terms of the Offer; the accuracy of Polar's assessment of the effects of the successful commencement and completion of the Offer; the timing and prospects for Debentureholder acceptance of Polar's invitation to purchase Debentures from eligible Debentureholders and the implementation thereof; the satisfaction of any conditions to Polar's interest in purchasing Debentures from eligible Debentureholders; the ability of TransGlobe to retain and hire key personnel and maintain relationships with customers, suppliers or other business partners; the impact of legislative, regulatory, competitive and technological changes; the state of the economy; credit and equity markets; availability of credit and other financing; and the financial markets in general. Many of these risks and uncertainties could affect TransGlobe's actual results or the value of the Debentures and could cause actual results to differ materially from those expressed or implied in any forward-looking information provided by Polar. The impact of any one factor on a particular piece of forward-looking information is not determinable with certainty as such factors are interdependent upon other factors, and Polar's course of action would depend upon its assessment of the future considering all information then available.

Should any factor affect TransGlobe, the Debentures, Polar's interest in purchasing Debentures from eligible Debentureholders or any other matter in an unexpected manner, or should assumptions underlying the forward-looking information prove incorrect, the actual results or events may differ materially from the results or events predicted. All of the forward-looking information reflected in this press release is qualified by these cautionary statements. There can be no assurance that the results or developments anticipated by Polar will be realized or, even if substantially realized, that they will have the expected consequences. Forward-looking information is provided and forward-looking statements are made as of the date of this press release and except as may be required by applicable law, Polar disclaims any intention and assumes no obligation to publicly update or revise such forward-looking information or forward-looking statements whether as a result of new information, future events or otherwise.

Polar Securities Inc.

Paul Sabourin

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