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Partners REIT Announces Complaint to the Ontario Securities Commission Regarding Orange Capital and Reminds Unitholders to Take No Action in Regards to the Orange Capital Offer

BARRIE, ONTARIO -- (Marketwired) -- 06/05/14 -- Partners Real Estate Investment Trust (the "REIT" or "Partners") (TSX:PAR.UN) announced today that has filed a complaint with the Ontario Securities Commission (the "OSC") regarding US hedge fund Orange Capital LLC's ("Orange Capital") highly coercive offer filed on June 3, 2014. The Board of Trustees continues to recommend that unitholders not tender to the offer.

Complaint to the Ontario Securities Commission Regarding Orange Capital

The REIT has written a letter to the OSC regarding a number of serious concerns that it has with Orange Capital's highly coercive offer. In its letter, the REIT highlights a number of terms of Orange Capital's offer that the REIT believes are outrageous and abusive to the capital markets and the REIT's investors:

--  No Real Offer: Orange Capital has not made any real offer to
    unitholders. The "offer" can be withdrawn, varied or extended by Orange
    Capital for any reason and at any time. Orange Capital's proposal is
    simply a free option for Orange Capital to acquire the units that are

--  Transfers Control of the REIT to one Small Minority Unitholder for no
    Compensation: Orange Capital's offer is designed to allow it to acquire
    all of the voting rights of unitholders who accept the offer, even if it
    purchases only 10% (or none) of the REIT's units. This would allow
    Orange Capital to exercise control of the REIT at the upcoming Annual
    and General Meeting, even though it is only one small minority
    unitholder with no mandate from other unitholders. Orange Capital does
    not propose to make any payment to the REIT's unitholders to acquire
    this control over the REIT.

--  Massive Pro-Ration: Even if Orange Capital elects to purchase units,
    unitholders are likely to face massive pro-ration. If 100% of
    outstanding units are tendered, each unitholder would be able to sell
    only 10% of their tendered units. In this scenario, Orange Capital would
    still be of the view that it could vote all 100% of the units.

--  Offer is made to Some, Not All, Unitholders: Orange Capital indicates
    that its offer is made to all unitholders of the REIT. In fact, the
    proposal is made only to unitholders who held units on May 16, 2014, the
    record date for the REIT's upcoming AGM.

--  Non Compliance with Proxy Solicitation Requirements: Canadian securities
    laws require that Orange Capital file a proxy circular before it
    solicits proxies unless an exemption applies. Even though Orange Capital
    appears to be in direct communications with unitholders to obtain their
    proxies, Orange Capital has not filed a circular and has not provided
    any information regarding its proposed slate of nominees.

--  Coercive Time Frame: The offer was filed on June 3, 2014 and runs to
    June 12, 2014, just seven business days. Orange Capital is aware that
    the AGM is July 15 so one might assume that this extraordinarily short
    timeframe is designed to coerce unitholders to tender and deliver their
    proxies quickly and before they have any real information on Orange
    Capital's proposed intentions for the REIT.

--  Irrevocability: Orange Capital appears to be of the view that once a
    unitholder has tendered its units it will have irrevocably appointed
    Orange Capital to exercise all voting and other rights attached to those
    units - even if Orange Capital withdraws its offer or the unitholder
    withdraws its units.

In the letter to the OSC, the REIT also explains that it has informed Orange Capital's lawyers that the REIT's Declaration of Trust provides that for a unitholder to nominate trustees at the AGM, notice must be provided to the REIT at least 30 days in advance of the meeting. The REIT's AGM was originally scheduled for June 26, 2014 and the notice had to be provided 30 days before then. After talking with the Toronto Stock Exchange, the REIT postponed its AGM from June 26 to July 15 to finalize the wind-up agreement prior to mailing its proxy materials. The Declaration of Trust specifically provides that a postponement of the meeting does not start the dates running again for purposes of notice to the trust. Accordingly, given that Orange Capital has not delivered the requisite notice, they are not entitled to propose a slate of trustees at the AGM.

It is not clear to the REIT why Orange Capital would proceed with its offer when it is not entitled to nominate Trustees at the meeting.

Board Reminds Unitholders to Take No Action Regarding the Orange Offer

The Board reaffirms its initial recommendation, announced on May 29, 2014, that unitholders not tender into the Orange Capital offer at $5.00 per unit:

--  As noted above, the offer requires that unitholders who tender to the
    bid appoint Orange Capital as their nominee and proxy for all deposited
    units, even though Orange Capital may not ultimately purchase all of the
    units tendered to its offer. This is a "bait and switch" tactic aimed at
    securing control of the REIT without paying for it. Unitholders should
    not put themselves in a position where they could lose their voting
    rights without receiving anything in return. If Orange Capital wants
    control of the REIT, they should make a fair offer to buy it. 
--  Unitholders who desire liquidity should consider simply selling in the
    market in the ordinary course rather than depositing all of their units
    into an offer where the result of pro-ration may be that they succeed in
    selling only a small fraction of the number of units tendered.  
--  In December 2013, Orange Capital offered $6.00 to buy 15% of the REIT.
    Currently, estimates of the net asset value of the REIT's units, by both
    management and independent professional analysts that follow the REIT,
    are well above $6.00 per unit. 
--  Partners recently announced that it had retained National Bank Financial
    to conduct a review of alternatives available to the REIT. That process
    is in its early stages but National Bank has received expressions of
    interest from a number of parties that could be interested in various
    transactions with the REIT. There are many potential outcomes of the
    strategic review process and there can be no guarantee that a
    transaction will take place. The objective of the strategic review
    process is to review strategic alternatives to maximize value for all
    unitholders. Orange Capital's latest announcements may be viewed as an
    effort to derail that process. 

There is significant confusion and uncertainty surrounding the Orange offer. If a unitholder tenders units to the offer and there is subsequent litigation, a cease trade order, or any number of other scenarios, it is unclear if and when a unitholder could expect to receive payment for tendered shares or when a unitholder could expect to receive their units and/or right to vote back if they are not paid for.

About Partners REIT

Partners REIT is a growth-oriented real estate investment trust, which currently owns (directly or indirectly) 42 retail properties, well located in British Columbia, Alberta, Manitoba, Ontario, and Quebec, aggregating approximately 3.2 million square feet of leasable space. Partners REIT focuses on expanding and managing a portfolio of retail and mixed-use community and neighbourhood shopping centres located in both primary and secondary markets across Canada.


Certain statements included in this press release constitute forward-looking statements. The forward- looking statements are not historical facts but reflect Partners REIT's current expectations regarding future results or events. These forward looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Although Partners REIT believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein.

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