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Board approves proposal to reorganize Boardwalk into a REIT
Boardwalk Equities Inc. (BEI- TSX; NYSE)
CALGARY, Jan. 9 /PRNewswire-FirstCall/ -- The Board of Directors of Boardwalk
Equities Inc. is pleased to announce that the Special Committee of the Board of
Directors formed on November 5, 2003 has recommended approval of management's
proposal to reorganize the business of the Corporation into a real estate
investment trust to be called Boardwalk REIT. The Special Committee's
recommendation is based on a number of factors including the advice of its
financial advisor, RBC Capital Markets. At a meeting held on January 8, 2004,
the Board accepted this recommendation and voted in favour of the
reorganization. In order to achieve various structural efficiencies the
reorganization will be completed through the acquisition of the Corporation by
Boardwalk Properties Company Limited, a private holding company indirectly owned
by Messrs. Sam and Van Kolias. This acquisition will occur following the
transfer of the assets and business of the Corporation to Boardwalk REIT. The
business formerly conducted by the Corporation would then be conducted by
Boardwalk REIT and public Shareholders would receive one unit of Boardwalk REIT
for each common share of the Corporation. Shareholders will now be given the
opportunity to consider the reorganization proposal at a special meeting called
for this purpose. An Information Circular for the shareholder's meeting has been
prepared, however, as the transaction is a "going private" transaction for the
purpose of US law, the Circular is subject to review by the SEC and will be
filed with the SEC on EDGAR. Upon completion of such review, the meeting date
will be set and the Circular will be mailed to all shareholders. At the meeting
shareholders will be asked to vote on the reorganization and other related
matters. In connection with the reorganization the Board of Directors has also
resolved to effectively waive the application of the Shareholder Rights Plan
adopted by the shareholders in 2001.
The Board of Directors, at the January 8, 2004 meeting, has also resolved to
apply to de-list the common shares from the New York Stock Exchange. Recent
regulatory changes in the United States will significantly increase the cost of
complying with US securities laws. Although the directors believe that benefits
are derived from the Corporation's listing on the prestigious NYSE, the Board
feels that these benefits are outweighed by the significantly increased
compliance costs of such listing. It should also be noted that the majority of
the trades in the Corporation's shares are completed through the facilities of
the Toronto Stock Exchange ("TSX") and accordingly a liquid market for the
shares of the Corporation will continue to exist. In light of the significant
savings realized by the Corporation in taking this step, the application to
de-list will be filed regardless of whether the shareholders vote in favour of
the reorganization or reject the REIT proposal.
Corporate Profile
Boardwalk Equities Inc. is Canada's largest owner/operator of multi-family
rental communities. Boardwalk currently owns and operates in excess of 250
properties with over 31,200 units totaling approximately 26 million net rentable
square feet. The Company's portfolio is concentrated in the provinces of
Alberta, Saskatchewan, Ontario and Quebec. Boardwalk is headquartered in Calgary
and its shares are listed on both the Toronto Stock Exchange and the New York
Stock Exchange and trade under the symbol BEI. The Company has a total market
capitalization of approximately $2.3 billion.
DATASOURCE: Boardwalk Equities Inc.
CONTACT: Boardwalk Equities Inc., Sam Kolias, President and CEO,
(403) 531-9255; Roberto Geremia, Senior Vice President, Finance and
Chief Financial Officer, (403) 531-9255; Mike Hough, Senior Vice President,
(416) 364-0849; Paul Moon, Director of Corporate Communications,
(403) 531-9255