European Residential Real Estate Investment Trust Announces Going-Private Transaction with Canadian Apartment Properties Real Estate Investment Trust

Executive Summary

• CAPREIT will acquire 100% of the issued and outstanding units of European Residential Real Estate Investment Trust (ERES) for an all‑cash price of $1.19 per ERES Unit.
• The transaction values ERES at approximately $441 million (including debt and Class B Limited Partnership Units).
• Combined with prior special distributions, unitholders will receive a total cash return of roughly $4.15 per unit, about 32% above the November 6 2024 closing price.

Key Details

• Consideration: $1.19 cash per ERES Unit (no financing condition).
• Valuation: Formal valuation by Haywood ranges $1.05‑$1.25 per unit; fairness opinions from BMO Capital Markets and Haywood deem the consideration fair.
• Approval Process: Requires two‑thirds vote of all ERES Unitholders (including Special Voting Units) and a simple majority of minority unitholders; special meeting scheduled for April 2026.
• Closing Timeline: Expected in Q2 2026, subject to court approval and customary closing conditions.
• Termination Fee: Approx. €5.2 million payable by ERES to CAPREIT if the arrangement is terminated under specified circumstances.
• Strategic Rationale: Provides immediate liquidity and certainty of value for unitholders; completes ERES’s multi‑year value‑enhancement and wind‑down strategy.
• Post‑Transaction Effects: ERES Units will be delisted from the TSX; ERES will cease to be a reporting issuer in Canada. CAPREIT will own 100% of ERES after closing (currently ~65% effective interest).
• Governance: Special Committee and Board (conflicted trustees abstaining) unanimously recommend approval; all ERES trustees and executive officers have entered voting agreements to support the transaction.
• Advisors: BMO Capital Markets (financial advisor to ERES), Haywood (independent financial advisor/valuator), Miller Thomson LLP (Special Committee counsel), Stikeman Elliott LLP (ERES counsel), Torys LLP (CAPREIT counsel).

Notable Quotes

“We are pleased with the outcome of ERES’s final strategic review… this all‑cash Transaction enables the efficient return of remaining capital to Public ERES Unitholders, and brings our mandate to an orderly and definitive close.” – Jenny Chou, CFO, ERES

“By taking ERES private, CAPREIT can determine the future of the remaining assets in alignment with its long‑term objectives… we believe this outcome delivers an ideal resolution for both ERES and CAPREIT unitholders alike.” – Stephen Co, CFO, CAPREIT