Pure Multi-Family Announces Termination of Sale Process

VANCOUVER, Aug. 24, 2018 /CNW/ - Pure Multi-Family REIT LP ("Pure Multi-Family" or the "REIT") (TSXV: RUF.U, RUF.UN, RUF.DB.U; OTCQX: PMULF) announced today that the special committee of independent directors (the "Special Committee"), appointed to run a strategic process including the potential sale of the REIT, has terminated the formal process to explore the potential sale of the REIT announced on April 5, 2018.

The sale process was commenced following the issuance of a news release by Electra America ("Electra") on April 3, 2018 announcing that it had made a proposal to the Board to acquire all of the Class A Units of the REIT for US$7.59 per Unit. The news release stated that Electra's proposal was not conditional on financing and that Electra would be able to move quickly and effectively to close the transaction upon completion of due diligence.

As disclosed by the REIT in its own news release on April 3, 2018, the REIT initially received a conditional proposal from Electra on December 12, 2017 to acquire all of the Class A Units for US$7.54 per Unit. The Board, on the recommendation of the Special Committee following its receipt of financial and legal advice, rejected that proposal on January 17, 2018 as inadequate. On March 26, 2018, the REIT received a marginally more favourable proposal from Electra, pursuant to which it agreed to pay an additional US$0.05 per Unit, for a total of US$7.59 per Unit. Following the receipt of financial and legal advice, the REIT concluded that the revised proposal remained inadequate.

On April 5, 2018, the REIT announced that, as part of a strategic review, it would commence a formal process to explore the potential sale of the REIT. The REIT also noted that Electra's proposals were highly conditional, required a 30-day exclusivity period and would be withdrawn if their existence was publicly disclosed.

The sale process was conducted by the REIT over several months with the assistance of Scotiabank. 86 parties were contacted out of which 24 parties executed non-disclosure agreements and were provided access to Pure Multi-Family's data room. During phase one of the process, the REIT received feedback from potential buyers as to likely ranges of values that they would be prepared to pay, including comments that, despite their overall positive views on the quality of the REIT's portfolio: (i) the price that had been publicly disclosed by Electra effectively established a "floor" and (ii) several multi-family real estate portfolios in excess of $1 billion were being concurrently marketed. Additionally, there were media articles and unitholder activity relating to the REIT's annual meeting that may have created some uncertainty for potential bidders. Potential bidders were asked to submit phase one non-binding proposals by June 6, 2018.

Two potential bidders submitted proposals at the end of phase one, the highest of which was US$7.71 per Unit and not conditional on financing. Both interested parties were selected to participate in phase two and were provided with further due diligence materials and an offer of access to the REIT's properties in order to conduct site visits. A form of arrangement agreement was provided to the interested parties by the REIT. The bid deadline for phase two final binding bids was July 30, 2018. Despite extensive site visits, requests for additional site visits for third party reports and active negotiation of the arrangement agreement, no bids were received on that date.

One of the bidders advised that, while it would not be submitting a bid, it would like to meet to discuss the possibility of reaching an agreement outside the formal process. On August 7, 2018, Robert King, Chair of the Special Committee, travelled to join Scotiabank at a meeting with that bidder's advisors to discuss terms of a potential deal. The bidder advised that it was prepared to make an offer of US$7.64 per Unit, although its proposal in phase one was US$7.71. The bidder also asked for an exclusivity period in order to explore financing options, to complete confirmatory due diligence and to settle on a form of arrangement agreement. Over the course of the following two weeks, the Special Committee sought to resolve all key deal terms with a view to bringing a transaction to unitholders for approval. On August 23, 2018, the bidder advised that it was no longer pursuing a potential transaction with the REIT.

A significant amount of the REIT's time and resources have been committed to the sale process. From the beginning of the process through the subsequent negotiations with the one bidder, the Special Committee and the Board held over 50 meetings with its financial and/or legal advisors so the REIT could respond in a timely fashion during every step of the process. Given the outcome of the process, the Board and management will re-focus their efforts on existing operations and will consider potential future strategic opportunities that may become available to the REIT to maximize unitholder value.

About Pure Multi-Family REIT LP

Pure Multi-Family is a Canadian based, publically traded vehicle which offers investors exclusive exposure to attractive, institutional quality U.S. multi-family real estate assets.

Additional information about Pure Multi-Family is available at puremultifamily.com and sedar.com.

Forward-Looking Information:

Certain statements in this news release may constitute "forward-looking information" within the meaning of applicable securities laws. Forward-looking information involves known and unknown risks, uncertainties and other factors, and it may cause actual results, performance or achievements or industry results, to be materially different from any future results, performance or achievements or industry results expressed or implied by such forward-looking information. Forward-looking information generally can be identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "feel", "intend", "may", "plan", "predict", "project", "subject to", "will", "would", and similar terms and phrases, including references to assumptions. Some of the specific forward-looking information referred to in this news release includes, but is not limited to, a statement that the REIT will re-focus on its operations and will consider future opportunities to maximize unitholder value.

The forward-looking information contained in this news release are based on certain key expectations and assumptions made by Pure Multi-Family in light of current conditions and expected future developments, as well as other factors Pure Multi-Family believes are appropriate in the circumstances.

Although Pure Multi-Family believes that the expectations and assumptions on which the forward-looking information are based are reasonable, undue reliance should not be placed on the forward-looking information because Pure Multi-Family can give no assurance that they will prove to be correct. Since forward-looking information addresses future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, without limitation, the risk that the strategic review process may not result in a transaction and those factors that can be found under "Risk Factors" in Pure Multi-Family's Annual Information Form dated March 21, 2018 and under "Risks and Uncertainties" in Pure Multi-Family's Management's Discussion and Analysis dated August 8, 2018, both of which are available on SEDAR at sedar.com.

The forward-looking information contained in this news release represent Pure Multi-Family's expectations as of the date hereof, and are subject to change after such date. Pure Multi-Family disclaims any intention or obligation to update or revise any forward-looking information except as required by law.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (as that term is defined in policies of the TSX Venture Exchange) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS RELEASE.

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