Melcor Actual Property Funding Belief Declares Submitting of Administration Info Round for Particular Assembly of Unitholders to Approve Association

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• Melcor REIT Unitholders will obtain $4.95 per unit, representing an unaffected premium of 46.0% and a 61.3% premium on the 30-day VWAP
• Consideration supported by an impartial formal valuation and equity opinions
• Round particulars the strong course of, together with arm’s size negotiations by Unbiased Committee and Go-Store Provision
• Voting Unitholders who’ve questions or want help in voting ought to contact Laurel Hill Advisory Group by phone at 1-877-452-7184 (North American Toll Free) or 1-416- 304-0211 (Outdoors North America), or by e mail at help@laurelhill.com

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EDMONTON, Alberta, Oct. 29, 2024 (GLOBE NEWSWIRE) — Melcor Actual Property Funding Belief (“Melcor REIT” or the “REIT”) is happy to announce the submitting of its administration info round (the “Round”) and associated paperwork for the particular assembly (“Assembly”) of the holders of models (“Models”) and particular voting models (“SVUs” and along with Models, the “Voting
Models”) of the REIT (collectively, “Voting
Unitholders”) to think about a particular decision approving the previously-announced plan of association (the “Association”) beneath the Enterprise Firms Act (Alberta) involving the REIT, Melcor REIT GP Inc. (the “GP”) and Melcor Developments Ltd. (“Purchaser” or “MRD”). The Assembly will likely be held on the Windsor Room, Third Ground, Manulife Place, 10180 one hundred and first Road, Edmonton, Alberta,T5J 3V5 on November 26, 2024 at 9:30 a.m. (Edmonton time). The supplies might be discovered beneath the REIT’s profile on SEDAR+ (www.sedarplus.ca) in addition to on Melcor REIT’s web site at http://melcorreit.ca/special-meeting. The REIT has additionally commenced the method of mailing the Round and associated paperwork to ‎Unitholders. ‎

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Beneath the phrases of the Association, Voting Unitholders will obtain money consideration of $4.95 per Unit (the “Consideration”) representing a premium of 46.0% to the REIT’s closing Unit worth of $3.39 on September 12, 2024, the final buying and selling day previous to the announcement of the Association, and a 61.3% premium to the 30-day quantity weighted common Unit worth ending September 12, 2024. Moreover, on or in regards to the closing of the Association, the REIT will trigger the redemption of, and the Purchaser can pay out in money, all principal quantity of the $46.0 million of the REIT’s 5.10% convertible unsecured subordinated debentures having a maturity date of December 31, 2024 (the “Debentures”), with the REIT paying any accrued however unpaid curiosity on the Debentures.

The particular decision approving the Association (the “Association Decision”) have to be authorized by: (i) not lower than 66 2/3% of the votes solid by Voting Unitholders, voting as a single class, ‎current ‎in individual or represented by proxy and entitled to vote on the Assembly; and (ii) a easy majority of ‎the votes solid by Voting Unitholders current in individual or represented by ‎proxy and entitled to vote on the Assembly, ‎excluding for this function votes connected to 100% of ‎the SVUs and Models held by Unitholders who’re ‎excluded pursuant to Multilateral Instrument 61-101 – Safety of Minority Safety Holders in Particular Transactions.

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REASONS TO SUPPORT THE ARRANGEMENT

The REIT’s board of trustees (the “REIT
Board”) fashioned a committee of impartial trustees (the “Unbiased
Committee”) to, amongst different ‎issues, consider the proposal acquired from the Purchaser and different alternate options out there to the REIT, in addition to ‎direct and supervise the negotiations of the Association with the advantage of monetary and authorized recommendation. The REIT Board, after cautious consideration and appearing on the unanimous advice of the Unbiased Committee after receiving authorized and ‎monetary recommendation, the equity opinion from BMO Nesbitt Burns Inc. (“BMO”) and the formal valuation and equity opinion from Ventum Monetary Corp. (“Ventum”), has unanimously (apart from Mr. Andrew Melton, Ms. Naomi Stefura and Mr. Ralph Younger, every of whom declared their curiosity in, or place as a director and/or officer of, the Purchaser and abstained from voting in respect thereof) decided that the Association is in one of the best pursuits of the REIT and its stakeholders, and is recommending that Voting Unitholders vote FOR the Association on the Assembly for the next causes, amongst others:‎

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• Greatest Present Prospect for Maximizing Unitholder Worth. The Unbiased Committee and the REIT Board decided that the Association was one of the best present prospect for maximizing Unitholder worth based mostly on numerous concerns.
• Vital Premium to Market Worth. The Association ‎values the Models at $4.95 per Unit, which represents a ‎premium of 46.0% to the Models’ September 12, 2024 closing worth on the TSX and a premium of 61.3% to the 30-day VWAP ending ‎September 12, 2024.‎
• Certainty of Worth and Fast Liquidity. The Consideration will likely be payable ‎completely in money and gives Unitholders with certainty of worth and fast liquidity and ‎removes the dangers related to the REIT remaining an impartial public entity. These dangers embrace operational challenges for Canadian workplace actual property property and sure exterior elements which are past the management of the REIT, the REIT Board and its administration workforce.
• Strategic Course of and Assessment of Strategic Alternate options. Previous to executing the Association Settlement dated September 12, 2024 among the many REIT, the Purchaser and Melcor REIT GP Inc. (the “Association Settlement”), the ‎Unbiased Committee, with the help of its authorized and monetary advisors, undertook a complete strategic evaluation course of to evaluate the advantages, dangers and potential timelines of alternate options ‎moderately out there to the REIT. The ‎Unbiased Committee concluded that: (i) the Consideration to be acquired by Unitholders represents compelling worth relative to the continued execution of the REIT’s ‎strategic marketing strategy; and (ii) it was unlikely that another occasion would purchase the REIT on extra favorable phrases to ‎Unitholders‎, from a monetary perspective, than the Association. The Unbiased Committee concluded that the Association Settlement was probably the most beneficial different moderately out there.‎
• Viability, Liquidity and Capital Constraints. Previous to executing the Association Settlement, ‎the ‎Unbiased Committee, with the help of its authorized and monetary advisors, fastidiously reviewed ‎the REIT’s potential to stay a viable publicly traded actual property funding belief and the potential dangers and affect on ‎Unitholders associated thereto, together with, amongst others, the REIT’s important workplace portfolio, the REIT’s present liquidity profile, maturity of the REIT’s convertible debentures, headwinds related to accessing capital, and the REIT’s restricted success in its efforts to promote properties publicly listed on the market in 2023 and 2024. The REIT is presently beneath contract on two potential asset gross sales (with one such contract nonetheless topic to a due diligence situation), and continues its regular course efforts to safe acceptable asset divestiture transactions on this difficult market.
• No Prospects of Reinstituting the REIT’s Distribution within the Foreseeable Future. On account of the continuing liquidity and capital constraints, the Unbiased Committee concluded that it was unlikely that ‎the REIT might reinstitute distributions within the close to to medium time period.‎
• Go-Store Provision. The Association Settlement incorporates a “go-shop” provision, which allowed the REIT to solicit potential acquisition proposals for a 30-day interval. The go-shop interval expired on October 15, 2024 with no proposals acquired.
• Arm’s Size Negotiation and Function of the Unbiased Committee. The Association is the results of a rigorous arm’s size negotiation course of that was undertaken between the Unbiased Committee and its monetary and authorized advisors, on the one hand, and the Purchaser and its advisors, however. The Unbiased Committee was and consists completely of impartial trustees of the REIT Board who’re free from any battle of curiosity with respect to the Purchaser.
• The Consideration is Supported by an Unbiased Valuation and Equity Opinions. The Consideration of $4.95 per Unit is properly above the midpoint of the vary for the truthful market worth of the Models contained within the formal valuation delivered to the Unbiased Committee by Ventum dated September 12, 2024. The Ventum formal valuation units a variety of $3.50 to $5.00 for the truthful market worth per Unit. Ventum was paid a hard and fast charge for the supply of the Ventum formal valuation and equity opinion‎, and no ‎portion of the charges payable to Ventum are contingent upon the conclusions reached within the formal valuation or completion of the Association. The Unbiased Committee additionally acquired a equity opinion from every of BMO and Ventum that, as of September 12, 2024, and topic to the assumptions, limitations and {qualifications} set out therein, the Consideration of $4.95 per Unit was truthful, from a monetary perspective, to Unitholders (aside from the Purchaser and its associates).

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A complete dialogue of the explanations for the Unbiased Committee’s and the REIT Board’s suggestions to vote FOR the Association ‎might be discovered beneath “The Association — Causes for the Suggestions” within the Round.

INDEPENDENT VALUATION & RESEARCH CONSENSUS NET ASSET VALUE

Ventum delivered its formal valuation to the Unbiased Committee on September 12, 2024, the date the Association Settlement was entered into, which displays Ventum’s dedication that, as of such date, and based mostly upon and topic to the assumptions, limitations, {qualifications} and different issues set forth therein, the truthful market worth of the Models was within the vary of $3.50 and $5.00 per Unit.

The fairness analysts that cowl the REIT present their very own internet asset worth per unit estimates (“Estimated NAV”) and they’re materially decrease than the REIT’s IFRS internet asset worth (“NAV”). RBC Capital Markets and CIBC Capital Markets, the 2 companies with fairness analysts protecting the REIT, had estimated NAVs of $6.00 and $4.50, respectively, as of their most up-to-date fairness notes, or a consensus Estimated NAV (“Consensus NAV”) of $5.25. CIBC Capital Markets’ July 31, 2024 analysis notice highlighted that the REIT had traded beneath Consensus NAV in any respect intervals since 2015, at a median low cost of roughly 19% to Consensus NAV, and at a reduction to Consensus NAV of 43% as of the date of the notice. The Consideration beneath the Association closes the low cost to Consensus NAV to roughly 5.7%. Additional, the Consideration gives Unitholders with a premium to the analysts’ consensus 12-month worth goal ($3.25) of 52.3%, whereas additionally eradicating execution threat.

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THE REIT BOARD (WITH CERTAIN TRUSTEES ABSTAINING) UNANIMOUSLY RECOMMENDS THAT UNITHOLDERS VOTE FOR THE ARRANGEMENT RESOLUTION.

Voting Unitholders are inspired to vote upfront of the Assembly, in accordance with the directions accompanying the type of proxy or voting instruction kind being mailed to Voting Unitholders along with the Round. Additional particulars and voting directions might be discovered within the Round beneath the part entitled “Voting Info”.

The shut of enterprise on October 22, 2024 is the file date for the dedication of Voting Unitholders who will likely be entitled to obtain discover of and vote on the Assembly and at any adjournment or postponement of the Assembly.

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The deadline for Voting Unitholders to submit their vote is Friday, November 22, 2024 at 9:30 a.m. (Mountain time), or ‎not lower than 48 hours (excluding Saturdays, Sundays and holidays) earlier than ‎the time set for the holding of the Assembly or any adjournment thereof.

QUESTIONS AND VOTING ASSISTANCE

Voting Unitholders who’ve questions or want help in voting ought to contact Melcor REIT’s strategic unitholder advisor and ‎proxy solicitation agent, Laurel Hill Advisory Group, by phone at 1-877-452-7184 (North American Toll Free) or 1-416- 304-0211 (Outdoors North America), or by e mail at help@laurelhill.com.

RECEIPT OF INTERIM COURT ORDER

The REIT can be saying that on October 24, 2024, it was granted an interim order (the “Interim
Order”) by the Court docket of King’s Bench of Alberta (the “Court docket”). The Interim Order authorizes Melcor REIT to proceed with numerous issues, together with the holding of the Assembly to think about the vote on the proposed Association.

ADDITIONAL DETAILS

Along with satisfying the situations set forth within the Association Settlement and described within the Round, the implementation of the Association is topic to acquiring the ultimate order of the Court docket, approval of the Association from Voting Unitholders on the Assembly and satisfaction of sure different situations to implementing the Association, as set forth within the Association Settlement, a duplicate of which is out there on the REIT’s ‎profile on SEDAR+ at www.sedarplus.ca‎.‎

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For a extra detailed description of the Association and the Association Decision to be voted upon on the Assembly, Voting Unitholders are urged to evaluation and punctiliously take into account the Round and assembly supplies, as they comprise essential info in regards to the Association and the rights and entitlements of the Voting Unitholders in relation thereto and seek the advice of with their monetary, tax, authorized and different skilled advisors.

Voting Unitholders are strongly inspired to learn the Round earlier than exercising their vote.

About Melcor REIT

Melcor REIT is an unincorporated, open-ended actual property funding belief. Melcor REIT owns, acquires, manages and leases high quality retail, workplace and industrial income-generating properties in western Canadian markets. Its portfolio is presently made up of pursuits in 36 properties representing roughly 3.072 million sq. ft of gross leasable space positioned throughout Alberta and in Regina, Saskatchewan; and Kelowna, British Columbia.

For additional info, please contact:

Investor Relations:
Tel: 1.780-945-4795
ir@melcor.ca

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Voting Unitholders:
Laurel Hill Advisory Group
North America (toll-free): 1-877-452-7184
Outdoors North America: 1-416-304-0211
Electronic mail: help@laurelhill.com.

Ahead Trying Assertion Cautions:

This information launch consists of forward-looking info throughout the which means of relevant Canadian securities legal guidelines. In some circumstances, forward-looking info might be recognized by means of phrases equivalent to “could”, “will”, “ought to”, “anticipate”, “intend”, “plan”, “anticipate”, “imagine”, “estimate”, “predict”, “potential”, “proceed”, and by discussions of methods that contain dangers and uncertainties, sure of that are past the Purchaser’s and the REIT’s management. On this information launch, forward-looking info consists of, amongst different issues, statements referring to the Assembly continuing as ‎described herein or in any respect, expectations with respect to the timing and end result of the Association and the anticipated advantages of the Association to the events and their respective safety holders, the timing of the Assembly and the outcomes thereof. The forward-looking info relies on sure key expectations and assumptions made by every of the Purchaser and the REIT, together with with respect to the construction of the Association and all different statements that aren’t historic info. The timing and completion of the Association is topic to customary closing situations, termination rights and different dangers and uncertainties together with, with out limitation, required regulatory, court docket, and unitholder approvals. Though administration of every of the Purchaser and the REIT imagine that the expectations mirrored within the forward-looking info are cheap, there might be no assurance that any transaction, together with the Association, will happen or that it’ll happen on the timetable or on the phrases and situations contemplated on this information launch. The Association may very well be modified, restructured or terminated. Readers are cautioned to not place undue reliance on forward-looking info. Further info on these and different elements that might have an effect on the Purchaser and the REIT are included in stories on file with Canadian securities regulatory authorities and could also be accessed by way of the SEDAR+ web site (www.sedarplus.ca).

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By its nature, such forward-looking info essentially includes recognized and unknown dangers and uncertainties that will trigger precise outcomes, efficiency, prospects and alternatives in future intervals of the Purchaser and the REIT to vary materially from these expressed or implied by such forward-looking statements. Moreover, the forward-looking statements contained on this information launch are made as of the date of this information launch and neither the Purchaser, nor the REIT nor another individual assumes accountability for the accuracy and completeness of any forward-looking info, and nobody has any obligation to replace or revise any forward-looking info, whether or not because of new info, future occasions or such different elements which have an effect on this info, besides as required by legislation.

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