Brookfield consortium acquires O&Y Properties and O&Y REIT

Date Closed: 10/21/2005

Value: C$2.1 billion

On October 21, 2005, a consortium led by Brookfield Properties Corp. (Brookfield) and consisting of Brookfield’s Canadian-based subsidiary, BPO Properties Ltd. (BPO Properties) together with CPP Investment Board and Arca Investments Inc. (the Brookfield Consortium) completed a combined acquisition, valued at over $2.1 billion, of O&Y Properties Corp. (O&Y Properties) and O&Y Real Estate Investment Trust (O&Y REIT). Completion of the acquisition brought to a close the largest real estate auction in Canadian history. The acquisition was effected by way of concurrent and cross-conditional transactions pursuant to which the Brookfield Consortium: (i) acquired all of the outstanding common shares of O&Y Properties (Common Shares) by way of a court approved plan of arrangement and (ii) acquired 86.6 per cent of the outstanding limited voting units of O&Y REIT (Units), not including those already owned by O&Y Properties, by way of a takeover bid. On November 29, 2005, the Brookfield Consortium announced that it had completed the acquisition of the remaining outstanding units pursuant to a second-step transaction approved at a special meeting of unitholders of O&Y REIT held on November 28, 2005. The Brookfield Consortium entered into a lock-up agreement with a number of institutional holders of units, who collectively held approximately 36 per cent of the units (other than those held by O&Y Properties), pursuant to which they agreed to tender all units held by them to the takeover bid.

Frank Allen and Paul Findlay from the Toronto office of BLG assisted Sentry Select Capital Corp., one of the institutional holders.