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Orange Capital Responds To Partners REIT Strategic Review Announcement

TORONTO, May 9, 2014 /CNW/ - Orange Capital, LLC ("Orange Capital" or "We"), a concerned unitholder of Partners Real Estate Investment Trust (TSX: PAR.UN) ("Partners REIT" or the "REIT"), today issued the following statement regarding the REIT's announcement of a strategic alternatives process designed to maximize value for unitholders ("Strategic Review"):

Notwithstanding that this is the REIT's second such Strategic Review in less than six months, Orange Capital welcomes the Trustees' decision to conduct a process where the sole objective is to maximize unitholder value.  We believe there are added benefits to the Strategic Review such that prospective buyers will require a "data room" to conduct due diligence, adding much needed transparency and discovery with respect to the REIT's:

  • Valuation and quality of assets along with the liabilities to be assumed, including the three (3) Ontario properties acquired from Holyrood Holdings Limited ("Holyrood") in April 2014 ("Ontario Property Acquisition");
  • Internal controls and information systems;
  • Past and existing arrangements with employees; and
  • Financial projections, assumptions, and forecasts.

On May 1, 2014, Orange Capital publicly raised very serious concerns regarding Partners REIT's recently closed Ontario Property Acquisition and requested an immediate independent forensic investigation. Within days of Orange Capital's public statements, the REIT announced it had obtained material "new" information with respect to the Ontario Property Acquisition that persuaded the Trustees to believe that Mr. Ron McCowan and Ms. Laura Philp, the owner of Holyrood, do indeed have a "close business relationship" and "should be considered to be acting together under applicable regulation." Meanwhile, Orange Capital believes the material "new" information that the Trustees obtained: (a) was at all times, readily accessible in the public domain; (b) was the subject matter of discussion in the press and by analysts; and (c) should have been considered before the transaction was concluded, had there been any reasonable due diligence."

Subsequent to this admission by the REIT, Orange Capital requested the Trustees immediately resign, deeming them unfit to serve on behalf of unitholders.  Orange Capital has received numerous expressions of support from other unitholders who are dismayed by the actions of Partners REIT's Trustees, including their failure to negotiate constructively with Orange Capital.

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