Lakeview Hotel REIT Announces Plan to Convert to a Corporation

    




 /NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S  NEWS WIRE SERVICES/ 

 WINNIPEG, Oct. 11, 2012 /CNW/ - Lakeview Hotel Real Estate Investment  Trust  (the "REIT") today announced that the REIT and its affiliated entities, Lakeview  Hotel REIT Operating Trust, Lakeview Flag Operating LP General Partner  Inc., Lakeview Management G.P. I Inc., Lakeview Flag Operating Limited  Partnership, Lakeview Management Inc., as well as a newly incorporated  corporation named "Lakeview Hotel Investment Corp." have entered into  an agreement (the "Arrangement Agreement") relating to a proposed conversion of the REIT from a trust to a  corporation (the "Conversion") pursuant to a statutory plan of arrangement (the "Plan of Arrangement") under the Canada Business Corporations Act (the "CBCA"). The Conversion will be presented to holders ("Unitholders") of trust units ("Units") of the REIT for approval at a special meeting (the "Meeting ") of the Unitholders at a date and time to be determined. If approved,  the Conversion will result in the reorganization of the REIT into a new  corporation called Lakeview Hotel Investment Corp. ("LHIC"). 

 Based on their review of the REIT's current income trust structure, the  Board of Trustees of the REIT and management noted that there is  diminishing value to remaining as an income trust as it no longer  provides any meaningful benefits to the REIT or its Unitholders.  The  proposed corporate structure would eliminate the risks and uncertainty  facing the REIT as a result of the tax legislation relating to income  trusts and will be better suited to the REIT's growth strategy. 

 The board of trustees of the REIT believes that the Conversion is in the  best interests of the REIT and has unanimously determined that the  Conversion is fair to Unitholders and in the best interests of the REIT  and unanimously recommends that Unitholders vote in favour of the  Conversion at the Meeting. 

 Pursuant to the Conversion: 

  





    (i)       Unitholders will receive one common share in LHIC for each
              Unit held on a one for one basis; and

               

    (ii)      Holders of options to acquire Units will receive options to
              acquire common shares of LHIC which provide for the same
              vesting provisions, exercise prices and expiry dates;






  

 As a condition of the completion of the Conversion, the obligations of  the REIT under its Class C Redeemable Subordinated Debentures, its  Class D Redeemable Subordinated Debentures and its warrants outstanding  immediately prior to the Conversion will be assumed by LHIC pursuant to  the successor provisions of the trust indentures governing such  debentures and the successor provisions of the warrant indenture  governing such warrants, respectively.  In addition, holders of the  REIT's warrants will be entitled to exercise such warrants for the same  number of common shares of LHIC on the same terms and conditions as  they can currently exercise such warrants into Units of the REIT. 

 The board of directors of LHIC will be comprised of the current trustees  of the REIT.  The services agreement entered into by Lakeview  Management Inc. and the REIT whereby certain management individuals  provided by Lakeview Management Inc. serve as management of the REIT  will be assigned by the REIT to LHIC.  Such senior management of LHIC  include Mr. Keith Levit as President and Chief Executive Officer, Mr.  Rudy Beyer as Chief Financial Officer and Avrum Senensky as Executive  Vice-President. The hotel properties of LHIC will continue to be  managed by Lakeview Management Inc. 

 Completion of the Conversion is subject to a number of conditions,  including the approval of Unitholders, the TSX Venture Exchange and the  Manitoba Court of Queen's Bench, as well as receipt of all required  consents, orders, approvals, authorizations and releases, if any, from  third parties. Full details of the proposed Conversion will be  contained in a management information circular anticipated to be mailed  to Unitholders in November, 2012 in connection with the Meeting. Among  other items of business, Unitholders will be asked to consider, and if  thought advisable approve, the Conversion at the Meeting. There can be  no assurance at this time that all approvals, consents and conditions  required to effect the Conversion will be obtained or satisfied, as  applicable, within that timeframe or at all. Accordingly, there can be  no assurance that the Conversion will be completed on the terms  described in this news release or at all. 

 Notice to Readers 

 Included in this Press Release, are "forward-looking statements" as  defined under applicable Canadian securities legislation. These  forward-looking statements typically, but not always, contain words  such as "anticipate", "does not anticipate", "believe", "estimate",  "forecast", "intend", "expect", "does not expect", "may", "will",  "should", "plan" or other similar terms that are predictive in nature.  These statements are not historical facts, but instead only represent  management's expectations, estimates, assumptions, plans, and  projections concerning the outcome of future events. Forward-looking  statements rely on certain underlying assumptions that, if not  realized, can result in such forward-looking statements not being  achieved. Forward-looking statements involve known and unknown risks,  uncertainties and other factors that could cause the actual results of  the REIT to be materially different from the historical results or from  any future results expressed or implied by such forward-looking  statements. Readers are therefore cautioned that management's  expectations, estimates and assumptions, although considered  reasonable, may prove to be incorrect and readers should not place  undue reliance on forward-looking statements. 

 Forward-looking statements, by their nature, are based on assumptions  and are subject to important risks and uncertainties. Any forecasts or  forward-looking predictions or statements cannot be relied upon due to,  amongst other things, changing external events and general  uncertainties of the business and its corporate structure. Results  indicated in forward-looking statements may differ materially from  actual results for a number of reasons, including without limitation,  competitive conditions, whether related to new competitors or current  competitors; general economic conditions, levels of travel in the  REIT's key market areas, political conditions and events, competitive  pressures; changes in demographic trends; changes in consumer  preferences and discretionary spending patterns; changes in national  and local business and economic conditions; changes in legislation and  governmental regulation; changes in accounting policies and practices;  the results of operations and financial condition of LHIC; the delay of  or the inability to complete the proposed Arrangement on the  contemplated terms; and the challenges related to the re-integration of  the combined businesses' operations. The forward-looking statements  contained herein represent the expectations of management as of the  date of this Press Release, and are subject to change after such date.  However, the REIT disclaims any intention or obligation to update or  revise any forward-looking statements whether as a result of new  information, future events or otherwise, except as required under  applicable securities laws. 

 About the REIT 

 Lakeview REIT is a real estate investment trust, which is listed on the  TSX Venture Exchange under the symbol "LHR.UN".  Lakeview REIT receives  income from ownership, management and licensing of hotel properties.   For further information on Lakeview REIT please visit our website www.lakeviewreit.com. 

 Neither TSX Venture Exchange nor its Regulation Services Provider (as  that term is defined in the policies of the TSX Venture Exchange)  accepts responsibility for the adequacy or accuracy of this release. 

Lakeview Hotel Real Estate Investment Trust


CONTACT:  Keith Levit, President, or Avrum Senensky, Executive VicePresidentTel: [phone], Fax: [phone],Email [e-mail] 


    

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