Adventus Announces Court Approval of the Plan of Arrangement for its Merger and Management Internalization

July 19, 2019

Adventus Realty Services Inc. is pleased to announce that the Supreme Court of British Columbia today approved the plan of arrangement (the "Plan of Arrangement") that will result in the merger of Adventus Realty Trust ("ART") and Adventus Opportunity Fund ("AOF") and the internalization of management. Details of the transactions are contained in the Information Circular and Information Memorandum dated June 20, 2019, provided to investors in the various Adventus Group entities.

The Merger of ART and AOF was the subject of Fairness Opinions for each fund, separate legal advice to each fund and unanimous approvals of the Boards of Directors of each fund.

The Management Internalization of ART was also transacted under the same Plan of Arrangement, for which the approval of a 2/3 vote of Adventus Capital Partners Ltd. ("ACP") shareholders and Adventus Realty Limited Partnership ("ARLP") unitholders was required. The specific votes obtained counted over 99% in favour, as follows:

  • A total of 334,280 ACP Shares were cast, representing 41.65% of the total and outstanding ACP Shares. Of those votes cast, 333,754 ACP Shares, representing 99.84%, were voted in favour of the Plan of Arrangement.
  • A total of 350,795 ARLP Units were cast, representing 43.70% of the total and outstanding ARLP Units. Of those votes cast, 350,269 ARLP Units, representing 99.85%, were voted in favour of the Plan of Arrangement.

Pursuant to the Plan of Arrangement, holders of ACP Shares will receive one ART Unit for each ACP Share and holders of units of ARLP will receive $0.01 in cash for each ARLP Unit, each on a taxable basis.

Also pursuant to the Plan of Arrangement, ART will complete the merger transaction with AOF. Holders of units of AOF will receive, for each AOF Unit held, 0.6651 of an ART Unit. The Plan of Arrangement has been structured to allow holders of units of AOF resident in Canada to receive units of ART in exchange for their units of AOF on a tax-deferred basis and without a requirement to report the transaction to the Internal Revenue Service of the United States under the US Income Tax Code. For purposes of the transaction, the units of ART have been valued at US$18.16 per unit and the units of AOF have been valued at US$12.08 per unit.

AOF unitholders may make an election under Section 85 of the Income Tax Act (Canada) to deem the proceeds of disposition of their AOF Units to be equal to their adjusted cost base to allow the taxation of the disposition of the AOF Units to be deferred to a future disposition. The Section 85 Election can be made by completing prescribed Canadian Revenue Agency Form T2057 ‘Election on Disposition of Property By a Taxpayer to a Taxable Canadian Corporation’. Drafts of these T2057 election forms will be prepared by ACP Management with the assistance of BDO Canada LLP ("BDO"). Access to these draft forms, including detailed instructions on how to review and file those forms, will be available on a web portal hosted by BDO. Log in access to the web portal will be provided by September 30, 2019.

Following customary closing considerations, the transactions are expected to be completed with an effective date of August 1, 2019.

We believe that the merged entity with a simplified management structure will provide the platform for growth of our portfolio of office buildings in the United States and an investment vehicle that will allow attractive liquidity alternatives.

We would like to thank our Adventus investors for their continuing support through this complex process.

About Adventus Realty Trust

Adventus Realty Trust is a Canadian based private Real Estate Investment Trust (REIT) and is focused on US income producing commercial real estate, in the suburban office markets of Chicago, Illinois and Atlanta, Georgia. For more information on Adventus Realty Trust, including our team, corporate strategy, photo gallery, details of our portfolio and press releases, we invite you to visit our website at www.adventusrealty.com.

Cautionary Statements Regarding Forward-Looking Statements

This press release may contain forward-looking statements with respect to the REIT and its operations, strategy, financial performance and financial condition, as well as with respect to the previously disclosed acquisitions and future acquisitions of properties. These statements generally can be identified by the use of forward-looking terminology such as "anticipate", "believe", "plan", "forecast", "expect", "intend", "would", "could", "if", "may" and similar expressions. The actual results and performance of the REIT and the acquisitions discussed herein could differ materially from those expressed or implied by such statements. Accordingly, readers should not place undue reliance on forward-looking statements. These cautionary statements qualify all forward-looking statements attributable to the REIT and persons acting on its behalf. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Some important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, changes in interest rates, competition and changes in securities or other laws or regulations or the application thereof. The cautionary statements qualify all forward-looking statements attributable to the REIT and persons acting on its behalf.

Unless otherwise stated, all forward-looking statements speak only as of the date of this press release. Except as required by applicable law, the REIT specifically disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

ADVENTUS REALTY TRUST
By its Trustee: ADVENTUS REALTY SERVICES INC.
Per: Rodney B. Johnston, FCPA, FCA President and CEO

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