Primaris REIT with H&R REIT and KingSett Capital Led Consortium Announces Amended Transaction Offering Superior Value to

Primaris REIT with H&R REIT and KingSett Capital Led Consortium Announces 
Amended Transaction Offering Superior Value to Primaris Unitholders 
New Offer Made by H&R REIT and KingSett Capital Led Consortium 
Highlights of the Amended Transaction 

    --  An increase in aggregate consideration to Primaris unitholders
        comprised of a cash election of $28.00 per Primaris unit (total
        cash consideration of $1.28 billion increased from $700 million
        in the previous H&R/Primaris transaction); or a unit election
        of 1.166 H&R Units per Primaris unit (increased from 1.13 in
        the previous H&R/Primaris transaction)
    --  The value of total consideration received (assuming full
        proration) will be $27.98 per Primaris unit, consisting of
        $12.58 in cash and 0.642 H&R Units (valued at $15.40 based on
        H&R's 20-day VWAP ended January 15, 2013, the last trading day
        prior to the previously announced H&R/Primaris transaction)
    --  An increase in cash consideration, facilitated by the inclusion
        of the KingSett Capital led consortium, represents
        approximately 45 percent of total consideration and provides
        additional liquidity for Primaris unitholders
    --  H&R is acquiring Primaris' operating platform together with 25
        shopping centres (including Primaris' Alberta acquisitions
        announced on February 1, 2013) valued in the aggregate at
        approximately $3.1 billion, at an overall 5.6 percent
        capitalization rate. A complete list of the asset allocation
        for the transaction is included as appendix to this news
    --  KingSett Capital led consortium will acquire the remaining 18
        properties in the Primaris portfolio valued at approximately
        $1.9 billion
    --  The Amended and Restated Arrangement has received unanimous
        approval by the Boards of Trustees of both H&R and Primaris
    --  The previously announced offer by KS Acquisition II LP has been
        withdrawn and affiliates of KingSett Capital owning
        approximately 7 percent of Primaris units outstanding have
        agreed to support the amended transaction
    --  There will be no acquisition, disposition or property
        management fees payable to H&R's property manager in connection
        with this transaction

Investor presentation is available at and

TORONTO, Feb. 5, 2013 /CNW/ - H&R Real Estate Investment Trust and H&R Finance 
Trust (collectively "H&R") (TSX: HR.UN) and Primaris Retail Real Estate 
Investment Trust ("Primaris") (TSX: PMZ.UN) and the KingSett Capital led 
consortium today announced that H&R and Primaris, together with PRR 
Investments Inc., have amended their previously announced arrangement 
agreement (dated January 16, 2013). Under the amended agreement (the "Amended 
Agreement") the KingSett Capital led consortium will participate in the 
transaction by acquiring certain properties from Primaris. The KingSett 
Capital led consortium, which consists of certain KingSett Capital managed 
funds, Ontario Pension Board and RioCan REIT, will acquire 18 Primaris 
properties pursuant to separate purchase agreements between Primaris and the 
consortium members.

Tom Hofstedter, CEO of H&R said, "We have created a stronger transaction for 
both H&R and Primaris unitholders. With this transaction, H&R will become 
Canada's largest and leading diversified real estate investment trust, 
emulating the preferred real estate investment model adopted by large pension 
plans worldwide. The revised transaction will be accretive to H&R's funds from 
operations, reduce its overall leverage ratio and increase market 
capitalization and liquidity, while allowing H&R to acquire a portfolio of 
high quality Canadian shopping centres and a valuable management platform. 
Overall, this is a transformational transaction for H&R that provides 
considerable benefits for our unitholders."

John Morrison, CEO of Primaris said, "From the onset of our process we set out 
to deliver superior value for our unitholders. The result of the two bidders 
for Primaris joining in this amended transaction has created an opportunity 
that provides a higher price than what was previously agreed upon. For the 
benefit of our unitholders, our process has clearly maximized value. The 
higher cash consideration in the amended transaction provides increased 
liquidity, meanwhile for those unitholders electing H&R Units, the transaction 
allows them the ability to maintain their investment in the REIT sector in a 
tax efficient manner. We are pleased with the Amended Agreement and the 
value delivered through the process for our unitholders and other 

Jon Love, Managing Partner of KingSett Capital said, "We are pleased to be 
partnering with H&R and working with Primaris on this amended transaction. We 
believe this is a very good outcome for all involved."

KingSett Capital led consortium members Ontario Pension Board and RioCan also 
commented on the amended transaction:

Mark Fuller, CEO of Ontario Pension Board said, "The amended transaction 
agreement continues to meet our deal objectives of acquiring high quality real 
estate assets in support of our long-term investment strategyto increase our 
exposure to private market investments."

Ed Sonshine, CEO of RioCan REIT added: "We are pleased to be participating in 
the amended transaction and the acquisition of interests in two prominent 
regional malls within the GTA. The properties we have committed to purchase 
are fully aligned with our strategy and will further strengthen RioCan's 
portfolio of enclosed malls."

Transaction Details

Pursuant to the Amended Agreement, unitholders of Primaris will be entitled to 
elect to receive $28.00 in cash, subject to an aggregate cash consideration of 
approximately $1.28 billion or 1.166 stapled units of H&R ("H&R Units"), with 
approximately 65.2 million H&R Units to be issued in aggregate.
    --  In the event that Primaris unitholders elect either more or
        less cash or H&R Units than are available, the total
        consideration shall be prorated, with the actual consideration
        mix to be received by each unitholder adjusted to reflect the
        total elections
    --  Assuming full proration (all Primaris unitholders elect cash or
        all Primaris unitholders elect H&R Units), Primaris unitholders
        will receive $12.58 in cash and 0.642 H&R Units for each
        Primaris unit
    --  Based on H&R's 20-day VWAP ended January 15, 2013 (the last
        trading day prior to the announcement of the prior H&R/Primaris
        transaction) of $23.99, the value of the fully prorated
        consideration received under the Amended Agreement will be
        $27.98 per Primaris unit, which represents a premium of
        approximately 21.4 percent to Primaris' closing price of $23.04
        on December 4, 2012 (the last trading day before KS Acquisition
        II LP announced its intention to make an offer for Primaris).
        Upon completion of the amended transaction, Primaris
        unitholders will own approximately 25 percent of H&R
    --  The amended transaction is structured so holders of Primaris
        units who are resident in Canada and who hold their Primaris
        units as capital property will receive their H&R Units on a
        substantially tax-deferred rollover (the receipt of H&R Finance
        Trust units, expected to be less than 4 percent of the total
        unit consideration, will be taxable)

H&R will acquire a $2.7 billion portfolio of 17 of Primaris' existing shopping 
centres along with a further 9 properties valued at approximately $377 million 
that Primaris intends to acquire in advance of the close of the H&R and 
KingSett transaction. The remaining properties in Primaris' existing portfolio 
will be acquired by members of the KingSett Capital led consortium and are 
valued at approximately $1.9 billion, including assumed debt.

The previously announced KingSett Capital led consortium offer has been 
withdrawn in accordance with its terms and affiliates of KingSett Capital that 
own approximately 7 percent of Primaris units have agreed to support the 
Amended Agreement.

The Board of Trustees of Primaris and H&R have unanimously agreed to vote 
their units in favour of the Amended Agreement and to recommend that their 
respective unitholders vote in favour of the transaction.

Benefits to Primaris
    --  The amended transaction is financially superior for Primaris
        unitholders with the value of the consideration (assuming full
        proration) to be received per Primaris unit increased to
        $27.98, compared to $27.33 under the prior agreement (based on
        H&R's 20-day ended January 15, 2013)
    --  Provides Primaris unitholders with an option to retain
        ownership in the Canadian enclosed shopping centre asset class
        or to elect to receive an immediate cash payment, subject to
        proration, described above
    --  The increase in aggregate cash consideration of approximately
        $578 million provides additional liquidity for those Primaris
        unitholders that elect to receive cash consideration
    --  Improves distributions by 24 percent from the current
        annualized rate of $1.27 to $1.57 for those Primaris units that
        are exchanged for H&R Units
    --  Substantially preserves the value of the professional
        management platform developed over the last 10 years

Benefits to H&R
    --  Unique opportunity to acquire a portfolio of 25 high quality
        Canadian shopping centres along with a strong professional
        management platform
    --  Financially attractive transaction that is expected to be
        approximately $0.02 accretive to Funds From Operations per unit
        and results in a deleveraging of H&R's balance sheet from 52.1
        percent to approximately 51.1 percent Debt to Fair Value
    --  Maintains H&R's liquidity with cash available from undrawn bank
        facilities of approximately $550 million
    --  Broader portfolio diversification by geographic region, asset
        class and tenant base
    --  Increased market capitalization will result in substantially
        enhanced liquidity for unitholders
    --  Combines two businesses having similar philosophies with
        respect to asset and tenant qualities and a disciplined
        approach to real estate investing

Additional Details
    --  The transaction continues to be structured as a Plan of
        Arrangement and is subject to the approval of 66 ⅔
        percent of Primaris units voted at a special meeting of
        Primaris unitholders and a majority of H&R Units voted at a
        special meeting of H&R unitholders
    --  Primaris to pay cash proceeds to its unitholders by way of a
        redemption of units using the proceeds from the KingSett asset
        sale transactions
    --  Special unitholder meetings of Primaris and H&R expected to be
        held in late March
    --  The transaction is subject to regulatory approvals (including
        under the Competition Act (Canada)), court approvals, required
        consents and other customary closing conditions. Assuming the
        requisite approvals are received and other conditions are met
        or waived, the transaction is expected to be completed in early
    --  H&R and KingSett are entitled to an aggregate all-cash break
        fee of $100 million in certain circumstances, including the
        acceptance by Primaris of an unsolicited superior proposal from
        a third party
    --  H&R is entitled to receive customary deal protection provisions
        including a right to match any superior proposal that is
        received by Primaris on an unsolicited basis
    --  No acquisition, disposition or property management fees shall
        be payable to H&R's property manager with respect to this
        transaction or for any future acquisition of enclosed shopping
        centres in Canada
    --  Holders of Primaris convertible debentures, prior to closing,
        will be entitled to convert their debentures in accordance with
        their terms and participate in the arrangement on the same
        basis as other unitholders and following closing, will be
        entitled to receive H&R Units upon conversion based on the
        exchange ratio contemplated by the transaction
    --  The circular to be mailed to Primaris unitholders will describe
        the material Canadian federal income tax considerations
        associated with the transaction.  Primaris unitholders are
        urged to carefully review these tax considerations and to
        consult their own tax advisors to determine the particular tax
        effects to them of the transaction, having regard to their own
        particular circumstances

Primaris Independent Committee

Canaccord Genuity, a financial advisor to the Primaris Independent Committee, 
has provided the Board of Trustees of Primaris with an opinion to the effect 
that, as of the date of the opinion and based upon and subject to the 
limitations and qualifications therein, the consideration to be received under 
the Amended Agreement is fair, from a financial point of view, to Primaris 

The Independent Committee carefully considered a number of factors, including 
the terms of the transaction, the assets and business of H&R, the outcome of 
the global search process conducted, including the Independent Committee's 
belief that it is very unlikely that a superior offer will emerge for all the 
outstanding units of Primaris, and the opinion of Canaccord Genuity in 
recommending the transaction to the Board of Trustees of Primaris.

Based in part on the recommendation of the Independent Committee and the other 
factors noted herein, the Board of Trustees of Primaris determined that the 
consideration to be received by Primaris unitholders under the Amended 
Agreement is fair, from a financial point of view, and it would be in the best 
interests of Primaris to enter into the Amended Agreement.


Canaccord Genuity and Evercore Partners were engaged by the Primaris 
Independent Committee as its financial advisors. McCarthy Tétrault LLP was 
engaged as counsel to the Independent Committee and to Primaris, and Cassels 
Brock & Blackwell LLP was retained as counsel to Primaris.

Blake, Cassels & Graydon LLP was retained by H&R as its legal counsel.

TD Securities Inc. and CIBC World Markets were engaged by KingSett Capital as 
its financial advisors. Osler, Hoskin & Harcourt LLP and Bennett Jones LLP 
were retained as its legal advisors.

Stikeman Elliott LLP and Fogler, Rubinoff LLP were retained by RioCan REIT as 
legal advisors.

About H&R

H&R REIT is an open-ended real estate investment trust, which owns a North 
American portfolio of 42 office, 115 industrial and 138 retail properties 
comprising over 45 million square feet and 2 development projects, with a fair 
value of approximately $10 billion. The foundation of H&R's REIT success since 
inception in 1996 has been a disciplined strategy that leads to consistent and 
profitable growth. H&R REIT leases its properties long term to creditworthy 
tenants and strives to match those leases with primarily long-term, fixed-rate 

H&R Finance Trust is an unincorporated investment trust, which primarily 
invests in notes issued by a U.S. corporation, which is a subsidiary of H&R 
REIT. The current note receivable is U.S. $162.5 million. In 2008, H&R REIT 
completed an internal reorganization, which resulted in each issued and 
outstanding H&R unit trading together with a unit of H&R Finance Trust as a 
"Stapled Unit" on the Toronto Stock Exchange.

About Primaris

Primaris is a TSX listed real estate investment trust that specializes in 
owning and operating Canadian enclosed shopping centres that are dominant in 
their local trade areas. Merchandising for each property is dynamic in order 
to meet the unique needs of its local customers and the community. Primaris 
maintains a high occupancy rate at its shopping centres and has retail tenants 
that offer new and exciting brands. Primaris owns 35 income-producing 
properties comprising approximately 14.7 million square feet located in 
Canada. As of December 31, 2012, Primaris had 100,346,768 units issued and 
outstanding (including exchangeable units for which units have yet to be 

About KingSett Capital

KingSett Capital is Canada's leading private equity real estate investment 
business, co-investing with pension fund and high net worth individual 
clients. KingSett Capital invests through a series of growth funds, mortgage 
funds and a core investment income fund, each with its own risk/return 
strategy. KingSett Capital has executed transactions valued at over $12.5 
billion in the past 10 years.

About Ontario Pension Board

Ontario Pension Board administers Ontario's Public Service Pension Plan, a 
defined benefit pension plan serving more than 42,000 members and their 
employers as well as more than 40,000 pensioners and deferred members. With 
more than $17 billion in assets, it is one of Canada's largest pension plans. 
Over the last 20 years, Ontario Pension Board has become one of Canada's 
leading direct owners of high quality shopping centres.

About RioCan

RioCan is Canada's largest real estate investment trust with a total 
capitalization of approximately $13.9 billion as at September 30, 2012. It 
owns and manages Canada's largest portfolio of shopping centres with ownership 
interests in a portfolio of 338 retail properties containing more than 80 
million square feet, including 49 grocery anchored and new format retail 
centres containing 12.4 million square feet in the United States through 
various joint venture arrangements as at September 30, 2012. RioCan's 
portfolio also includes 10 properties under development in Canada. For further 
information, please refer to RioCan's website at


This press release contains forward looking statements that reflect current 
expectations of each of Primaris, H&R and KingSett Capital about their future 
results, performance, prospects and opportunities, including with respect to 
the closing, costs and benefits of the proposed transaction and all other 
statements that are not historical facts. The timing and completion of the 
proposed transaction is subject to customary closing conditions, termination 
rights and other risks and uncertainties including, without limitation, 
required regulatory, court, and unitholder approvals. Accordingly, there can 
be no assurance that the proposed transaction will occur, or that it will 
occur on the timetable or on the terms and conditions contemplated in this 
news release. The proposed transaction could be modified, restructured or 
terminated. Readers are cautioned not to place undue reliance on forward 
looking information. Each of Primaris, H&R and KingSett Capital has tried to 
identify these forward looking statements by using words such as "may", 
"will", "should" "expect", "anticipate", "believe", "intend", "plan", 
"estimate", "potentially" and similar expressions. By its nature, such forward 
looking information necessarily involves known and unknown risks and 
uncertainties that may cause actual results, performance, prospects and 
opportunities in future periods of Primaris, H&R or KingSett Capital to differ 
materially from those expressed or implied by such forward looking statements.

Non-GAAP Measures

The foregoing includes a reference to a non-Generally Accepted Accounting 
Principles ("GAAP") measure that should not be construed as an alternative to 
comprehensive income (loss) or cash provided by operations and may not be 
comparable to similar measures presented by other issuers as there is no 
standardized meaning of "funds from operations" under GAAP. Management of H&R 
believes that funds from operations is a meaningful measure of operating 
performance. Readers are encouraged to refer to H&R's combined MD&A for 
further discussion of this non-GAAP measure."

Appendix: Asset Allocation Under the Amended Agreement

Properties                                       Location

H&R REIT                                          

Dufferin Mall                                    Toronto, ON

Stone Road Mall                                  Guelph, ON

Cataraqui Centre                                 Kingston, ON

Edinburgh Market Place                           Guelph, ON

Place d'Orleans                                  Orleans, ON

South Cambridge Centre                           Cambridge, ON

Northland Professional Centre                    Calgary, AB

Northland Shoppes                                Calgary, AB

Northland Village Mall                           Calgary, AB

Park Place Shopping Centre                       Lethbridge, AB

Sunridge Mall                                    Calgary, AB

Orchard Park Shopping Centre                     Kelowna, BC

Garden City                                      Winnipeg, MB

Grant Park                                       Winnipeg, MB

McAllister Place                                 Saint John, NB

Regent Mall                                      Fredericton, NB

Place du Royaume                                 Saguenay, QC

NOTE: The 9 properties to be acquired by Primaris as announced on
February 1, 2013 will be assumed by H&R

KingSett CREIF and OPB (50/50 Joint Venture)      

Midtown Plaza Shopping Centre                    Saskatoon, SK

Cornwall Centre                                  Regina, SK

KingSett CREIF and RioCan REIT (50/50 Joint       

Burlington Mall                                  Burlington, ON

OPB (50% Interest)                                

Woodgrove Centre                                 Nanaimo, BC

RioCan REIT                                       

Oakville Place                                   Oakville, ON

KS Acquisition II LP (a 50/50 Joint Venture of KingSett Growth LP
No 5 and OPB)

Sugarloaf Mall                                   Atholville, NB

Place Vertu                                      Montreal, QC

Place Fleur de Lys                               Quebec City, QC

Eglinton Square                                  Toronto, ON

Yonge Street Properties                          Toronto, ON

Lambton Mall                                     Sarnia, ON

Tecumseh Mall                                    Windsor, ON

Heritage Place Shopping Centre                   Owen Sound, ON

Alliston Mills                                   New Tecumseth, ON

St. Albert Centre                                St. Albert, AB

Driftwood Mall                                   Courtenay, BC

Aberdeen Mall                                    Kamloops, BC

Westbank Shopping Centre                         Kelowna, BC

Primaris Unitholders Kingsdale Shareholder Services Inc. 1 (866) 581-1571 
(English and Français) toll-free in North America (416) 867-2272 outside of 
North America (collect calls accepted)

H&R Tom Hofstedter President & Chief Executive Officer (416) 635-7520 Larry 
Froom Chief Financial Officer (416) 635-7520

Media Contact for H&R REIT and KingSett Capital Longview Communications 
Louise Kozier (604) 644 6090

Primaris John Morrison President & Chief Executive Officer (416) 642-7860 
Louis Forbes Executive Vice President & Chief Financial Officer (416) 642-7810

Media Contact for Primaris Retail REIT NATIONAL Public Relations Peter Block 
(416) 848-1431 Jennifer Lee (416) 848-1383

SOURCE: KingSett Capital

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CO: Primaris Retail Real Estate Investment Trust
ST: Ontario

-0- Feb/05/2013 12:30 GMT

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