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 publicly‑held units of European Residential Real Estate Investment Trust (ERES) for an all‑cash price of $1.19 per ERES Unit, valuing ERES at approximately $441 million (including debt).
• The transaction follows a multi‑year strategic review; the Special Committee and Board have issued unanimous fairness opinions and recommend that public ERES unitholders vote in favour.
• Combined with prior special distributions of €1.90 per unit (~US$2.96), total cash returned to unitholders will be about $4.15 per unit, roughly 32 % above the November 6 2024 closing price of $3.15.

Key Details

• Consideration: $1.19 cash per ERES Unit (all‑cash, no financing condition).
• Valuation: Transaction value ≈ $441 M (including debt and Class B Limited Partnership units).
• Fairness Opinions & Valuation: BMO Capital Markets and Haywood provided fairness opinions; Haywood’s formal valuation places fair market value at $1.05‑$1.25 per unit.
• Approval Process: Requires two‑thirds vote of ERES unitholders (including special voting units) plus a simple majority of minority unitholders; CAPREIT shareholders not required to approve.
• Timeline: Special meeting of ERES unitholders scheduled for April 2026; expected closing in Q2 2026, subject to court approval and customary conditions.
• Termination Fee: Approx. €5.2 M payable by ERES to CAPREIT if the arrangement is terminated under specified circumstances.
• Post‑Closing Effects: ERES Units will be delisted from the TSX; ERES will cease to be a reporting issuer in Canada.
• Strategic Rationale: Provides immediate liquidity and certainty of value to unitholders; allows CAPREIT to fully integrate remaining assets into its portfolio and pursue long‑term objectives.
• Advisors:
• Financial – BMO Capital Markets (ERES), Haywood Securities (Special Committee).
• Legal – Miller Thomson LLP (Special Committee), Stikeman Elliott LLP (ERES), Torys LLP (CAPREIT).

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…” – Jenny Chou, CFO, ERES

“By taking ERES private, CAPREIT can determine the future of the remaining assets in alignment with its long‑term objectives, while providing Public ERES Unitholders with a timely and certain all‑cash exit.” – Stephen Co, CFO, CAPREIT

Materiality: Material – Positive (significant cash consideration and premium to market price; impacts both companies’ shareholder value).