Melcor REIT Reaffirms Support for Strategic Unit Arrangement

Melcor REIT Advocates for Arrangement Approval

In an assertive move, Melcor Real Estate Investment Trust (“Melcor REIT”) is vocalizing its commitment to the proposed plan of arrangement, emphasizing the numerous benefits it offers to unitholders. This arrangement entails redeeming trust units at a compelling cash price of $4.95 per unit, providing stakeholders with significant immediate liquidity and reducing investment risks.

Timely Voting Encouraged for Unitholders

Unitholders are urged to exercise their voting rights that will play a pivotal role in securing their financial future. All votes are crucial, regardless of the number of units owned. Specifically, the Independent Committee and other governing bodies strongly recommend voting FOR the arrangement to ensure a favorable outcome. Every vote is paramount, and unitholders can update their decisions should they need to change their previous votes.

Importance of ISS and Glass Lewis Recommendations

The backing from prominent independent proxy advisory firms like Institutional Shareholder Services Inc. (ISS) and Glass Lewis has bolstered confidence in the proposed arrangement. These firms have independently evaluated the situation and suggested that unitholders vote FOR this strategic initiative. With their input, the Independent Committee reassures unitholders that this plan prioritizes their best interests.

Risks of Non-Approval Highlighted

If the arrangement is not sanctioned, the Independent Committee warns of several potential repercussions. Unitholders may face uncertainty surrounding the REIT’s unit trading prices, which could revert to lower levels seen prior to the announcement. Furthermore, without the completion of this arrangement, the REIT’s viability as a public entity could dwindle owing to numerous financial strains including rising tenant inducement costs and capital expenditure loads.

Unitholders Should Prepare for Meeting

The upcoming special meeting is set to empower unitholders with the opportunity to either affirm or reject this arrangement. Scheduled to occur shortly, unitholders should be ready to cast their votes, recognizing the meeting's critical nature. Voting ahead of the cut-off time will ensure every voice is heard. The Independent Committee emphasizes the necessity for unitholders to process their votes swiftly and without delay.

A Closer Look at Asset Liquidation Risks

Some dissenting voices suggest that a strategy involving the sale of assets piece by piece might yield higher returns for unitholders. However, this idea was carefully scrutinized and deemed impractical. The Independent Committee, along with financial advisors, found that liquidating assets would not necessarily guarantee better financial outcomes due to the inherent market volatility and linked tax implications.

Indeed, the future of the REIT hangs in the balance, and unitholders must weigh their options seriously. Should the arrangement fail to progress, many aspects of the REIT, including its distribution capabilities, could shatter, leading to long-term instability.

Final Thoughts on Voting for the Arrangement

The independent committee stresses the value of participating in this voting process, reinforcing the idea that the arrangement is built on solid foundations to deliver wealth certainty alongside minimal risk. Unitholders are encouraged to vote FOR the arrangement, a decision framed by factors such as expected cash returns and lower volatility risks.

Frequently Asked Questions

What is the Melcor REIT Arrangement?

The Melcor REIT Arrangement involves redeeming outstanding trust units at $4.95 each, aimed at providing liquidity and reducing future investment risks.

Why should unitholders vote for the arrangement?

Voting for the arrangement provides unitholders with immediate cash returns and mitigates investment uncertainties associated with remaining public.

What are the risks of not approving the arrangement?

If unitholders reject the arrangement, they could face diminished trading prices, potential non-viability as a public REIT, and limited chances for future distributions.

What recommendations have been made regarding the vote?

The Independent Committee, together with ISS and Glass Lewis, recommends unitholders vote FOR the arrangement, based on extensive evaluations.

How can unitholders get assistance in voting?

Unitholders needing assistance can reach out to Laurel Hill Advisory Group by phone or email for guidance on the voting process.

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