/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES./
VANCOUVER, May 16, 2014 /CNW/ - American Hotel Income Properties REIT LP ("AHIP") (TSX: HOT.UN; OTCQX: AHOTF) announced today that it has agreed to
increase the size of its previously announced offering of limited
partnership units ("Units"). Pursuant to a revised agreement with a syndicate of underwriters
co-led by Canaccord Genuity Corp. and National Bank Financial Inc., and
including CIBC World Markets Inc., TD Securities Inc., Haywood
Securities Inc., Scotia Capital Inc. and Dundee Securities Ltd.
(together, the "Underwriters"), the Underwriters have now agreed to purchase, on a bought deal
basis, 4,348,000 Units priced at Cdn$10.35 per Unit for total gross
proceeds of Cdn$45.0 million (the "Offering").
AHIP has granted to the Underwriters an over-allotment option to
purchase up to an additional 652,200 Units, representing 15% of the
size of the Offering. The over-allotment option may be exercised in
whole or in part at any time for a period of up to 30 days following
closing of the Offering, to cover over-allotments.
The closing of the Offering is expected to occur on or about June 4,
2014. The Offering is subject to customary regulatory approvals,
including the Toronto Stock Exchange ("TSX"). The Units will be offered in each of the provinces and territories
of Canada pursuant to National Instrument 44-101 - Short Form Prospectus Distributions.
AHIP intends to use the net proceeds from the Offering to: (i) acquire
from SunOne Developments Inc., upon completion of construction, three
previously announced hotel developments located in Brunswick, Maryland;
Wellington, Kansas; and Glendive, Montana (the "New Oak Tree Inns") which are scheduled to open between September and December 2014; (ii)
partially fund the acquisition of two additional railway lodging
facilities which require renovations to meet Oak Tree Inn quality
standards (the "Additional Railway Hotels"); (iii) partially fund the potential acquisition of two high-quality
nationally-branded hotel portfolios (the "Other Branded Hotel Portfolios"); and (iv) fund working capital and general corporate purposes. See
AHIP's news release of May 15, 2014 for more detail.
This news release shall not constitute an offer to sell or a
solicitation of any offer to buy nor shall there be any sale of the
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful. The securities being offered have not been, nor
will they be, registered under the United States Securities Act of
1933, as amended (the "U.S. Securities Act"), and such securities may not be offered or sold within the United
States absent registration under the U.S. Securities Act or an
applicable exemption from the registration requirements thereunder.
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking information within the
meaning of applicable securities legislation, which reflects AHIP's
current expectations regarding future events. Forward-looking
information is identified by the use of terms and phrases such as
"anticipate", "believe", "budget", "could", "estimate", "expect",
"going-in", "intend", "may", "plan", "predict", "project", "will",
"would" and similar terms and phrases, including references to
assumptions. Such information includes, but is not limited to:
statements with respect to the closing of the Offering or the
over-allotment option and the use of proceeds therefrom, including the
potential acquisition, renovation, opening and operation, as
applicable, of the New Oak Tree Inns, the Additional Railway Hotels
and/or the Other Branded Hotel Portfolios; the cost of brand-mandated
property improvement plans; AHIP's leverage and payout ratios after
giving effect to any such acquisitions; and the accretive nature of
such acquisitions. Actual events or results may differ materially.
Forward-looking information contained in this news release is based on
certain key expectations and assumptions made by AHIP, including,
without limitation: the acquisition, renovation, opening and successful
integration, as applicable, of the New Oak Tree Inns, the Additional
Railway Hotels and/or the Other Branded Hotel Portfolios;
capitalization rates; fees and reserves; targeted opening dates;
locations; appraised values; replacement costs; pro forma leverage; and
payout ratios. Although the forward-looking information contained in
this news release is based upon what AHIP's management believes to be
reasonable assumptions, AHIP cannot assure investors that actual events
or results will be consistent with such information. Forward-looking
information reflects current expectations of management regarding
future events and operating performance as of the date of this news
release. Such information involves significant risks and uncertainties,
should not be read as guarantees of future performance or results, and
will not necessarily be accurate indications of whether or not such
results will be achieved. A number of factors could cause actual
results to differ materially from the results discussed in the
forward-looking information, and a description of these factors can be
found under "Risk Factors" in AHIP's Annual Information Form dated
March 26, 2014 and under "Risks and Uncertainties" in AHIP's
Management's Discussion and Analysis dated May 9, 2014, both of which
are available on SEDAR at www.sedar.com.
The forward-looking information contained herein is expressly qualified
in its entirety by this cautionary statement. The forward-looking
information is made as of the date of this news release and AHIP
assumes no obligation to update or revise such information to reflect
new events or circumstances, except as may be required by applicable
law.
The potential acquisitions described in this news release are indicative
only, as these potential transactions are being evaluated and
negotiated with the applicable sellers. In addition, each acquisition,
if it proceeds, would subject to conditions, including satisfactory
completion of AHIP's due diligence and negotiation of formal legal
documents. For example, AHIP cautions that there can be no assurance
that any transaction will result from the conditional PSA and
non-binding LOI described herein, or what the terms of such a
transaction, if any, may be. AHIP undertakes no obligation to update
investors on the status of any potential acquisitions described in this
news release unless and until its acquisition due diligence is complete
and the Board of Directors has approved the transaction, in each case.
ABOUT AMERICAN HOTEL INCOME PROPERTIES REIT LP
AHIP is a limited partnership formed under the Limited Partnerships Act (Ontario) to invest in hotel real estate properties located
substantially in the United States and engaged primarily in the
railroad employee accommodation, transportation, and contract-focused
lodging sectors. AHIP's long-term objectives are to: (i) generate
stable and growing cash distributions from hotel properties
substantially in the U.S.; (ii) enhance the value of its assets and
maximize the long-term value of the hotel properties through active
management; and (iii) expand its asset base and increase its AFFO per
Unit through an accretive acquisition program, participation in
strategic development opportunities and improvements to its properties
through targeted value-added capital expenditure programs.
ADDITIONAL INFORMATION
Additional information relating to AHIP, including its other public
filings, is available on SEDAR at www.sedar.com and on AHIP's website at www.ahipreit.com.
THE TSX HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE
ADEQUACY OR THE ACCURACY OF THIS NEWS RELEASE.
SOURCE American Hotel Income Properties REIT LP
