Mr. David Goodman of Dundee reports

DUNDEE ACQUISITION LTD. AND CHC STUDENT HOUSING CORP. ANNOUNCE PROPOSED BUSINESS COMBINATION AND SERIES OF STUDENT HOUSING PROPERTY ACQUISITIONS TO CREATE CANADIAN STUDENT LIVING GROUP INC.

Dundee Acquisition Ltd. and CHC Student Housing Corp. have entered into an arrangement agreement dated Aug. 25, 2016, to effect a business combination by way of a court-approved plan of arrangement and Dundee Acquisition has concurrently entered into a series of agreements to acquire additional student housing properties from various third party vendors.

The pro forma company would own an interest in up to 20 properties comprising 4,700 student housing beds located in strategic markets across Canada. The resulting issuer is expected to be renamed Canadian Student Living Group Inc. (CSL) and will continue to be led by CHC's chief executive officer, Mark Hansen, and the current CHC management team.

Management believes CSL will provide investors with an attractive investment opportunity characterized by the following:

• Stable asset class with compelling market fundamentals;
• Significant growth opportunities through market expansion and consolidation;
• Premier company with best-in-class portfolio of assets;
• Experienced management team;
• Long-term value creation strategy;
• Optimal capital structure to support growth;
• Attractive valuation metrics.

Dundee Acquisition and CHC believe that student housing is a very attractive asset class and that the market is underdeveloped in Canada. Dundee Acquisition and CHC estimate that only 3 per cent of Canadian postsecondary students live in purpose-built student housing, which is substantially below more developed markets such as the United States (12 per cent) and the United Kingdom (23 per cent). Dundee Acquisition and CHC management believe that the Canadian market is in the early stages of growth and that CSL will be well positioned as the market leader to consolidate the sector and work with local developers to expand the country's supply of purpose-built student housing to support its growing local and international student population.

"Dundee Acquisition was created to leverage our team's ability to identify and source a unique investment opportunity and to negotiate a complex transaction to create an investment opportunity that is expected to generate superior long-term returns for our shareholders," said David Goodman, chairman of Dundee Acquisition.

The aggregate transaction value of up to $420-million for the entire portfolio of assets will create one of the largest pure-play student housing owner/operators in Canada. CSL is expected to own an interest in and manage up to 20 properties comprising 4,700 student housing beds in 13 Canadian markets from Fredericton, N.B., to Windsor, Ont. The CHC management team already manages approximately 60 per cent of the pro forma total beds while the remaining assets to be acquired are well known to management.

Dundee Acquisition and CHC management believe that the price/expected 2017 adjusted funds from operations (AFFO) multiple of CSL (assuming a price of $10.08 per share at the time of the arrangement) will be at a discount to its Canadian and global peers.

The properties proposed to be owned and managed by CSL offer an attractive, diversified portfolio of assets for investors with very strong operating metrics. The portfolio has a weighted average occupancy of over 96 per cent and consists primarily of newly constructed, purpose-built student housing with an average age of 7.2 years and an average distance to campus of 0.7 kilometre.

"We are extremely excited about this transaction and believe it creates a strong platform going forward for the benefit of all current CHC stakeholders," said Mark Hansen, chief executive officer of CHC. "The DAQ team has done a great deal to help create CSL, and position it to be a market leader in Canadian student housing with a world-class portfolio of high-quality operating assets. The current assets, their reputation in the student community, our management team, our capital structure and access to additional capital have positioned CSL to succeed in the long term."

Summary of the transactions

Dundee Acquisition and CHC have entered into the arrangement agreement pursuant to which Dundee Acquisition and CHC have agreed to complete the arrangement under which it is expected that: (i) the shareholders of Dundee Acquisition will exchange their shares of Dundee Acquisition for common shares of CHC at a ratio of 1.75304 CHC shares for every one share of Dundee Acquisition; (ii) Dundee Acquisition will thereupon become a wholly owned subsidiary of CHC and will then be amalgamated with CHC and a newly incorporated subsidiary of CHC to form an amalgamated corporation to be named Canadian Student Living Group Inc.; (iii) the outstanding common shares of CSL will then be consolidated on the basis of 0.57044 postconsolidation share for each one preconsolidation share.

A summary of the contemplated transactions is as follows:

• The merger between Dundee Acquisition and CHC, which will provide CSL with four student housing properties;
• The purchase by CSL of four additional properties currently owned by CHC Student Housing LP (a private partnership) and managed by the CHC management team;
• The purchase by CSL of up to 12 additional student housing properties, seven of which are subject to binding purchase agreements, two of which are subject to letters of intent and three of which are subject to agreements in principle.

The above transactions are subject to the satisfaction of certain conditions including the execution of definitive documentation and, in the case of certain acquisition properties, finalizing due diligence and financing.

To complete the arrangement, the acquisition of the CHC LP properties and the acquisition properties, Dundee Acquisition intends to use some of its cash held in escrow, newly issued shares of CSL, mortgage financing and other potential sources of capital.

Assuming that all of the transactions are completed, CSL expects to have 100-per-cent ownership of 11 properties (comprising 3,100 beds) and a 50-per-cent interest in nine co-owned properties (comprising 1,600 total beds). The remaining 50-per-cent interest in the nine co-owned properties is anticipated to be held by an arm's-length institutional private real estate investment firm focused on residential rental projects. Collectively, CSL would own an interest in up to 20 properties comprising 4,700 student housing beds (3,900 student housing beds on a pro rata basis).

In an effort to seek to ensure that CSL is positioned to take advantage of the long-term growth opportunity that Dundee Acquisition and CHC believe uniquely exists in the Canadian student housing sector, the leverage at CSL is expected to be conservative, and CSL is planning on adopting a 50-per-cent distribution strategy, the lowest payout ratio of its peers, to seek to ensure that resources are available to CSL for additional acquisitions and development investments. CSL is planning to commence a monthly dividend to its shareholders after the arrangement is completed.

Management has targeted long-term AFFO growth for its business of 10 per cent (1) per annum, which is to come from: (i) same-store revenue growth; (ii) expense management and the realization of economies of scale across the company; (iii) balance sheet management; and (iv) postdistribution free cash flow investment in acquisitions and/or development opportunities. CSL management has targeted multiple possible future acquisitions and targets owning/operating at least 10,000 beds financed with available cash flow and/or in value accretive transactions to the company's shareholders and anticipated co-ownership partner.

All of the directors and senior officers of both Dundee Acquisition and CHC, along with Dundee Corp., Dundee Acquisition's sponsor, have agreed to support the arrangement.

The boards of directors of each of Dundee Acquisition and CHC have unanimously approved the transactions and determined that they are fair and in the companies' respective best interests. Completion of the arrangement, which is currently expected to close in November, 2016, is subject to approval by Dundee Acquisition shareholders, CHC shareholders (if required by the TSX Venture Exchange) and certain other closing conditions.

Note

(1) AFFO references are calculated in the same manner as CHC in its public disclosures. Please refer to CHC's management's discussion and analysis of financial position and results of operations for the three months ended March 31, 2016, and 2015, filed on SEDAR, to see how AFFO is reconciled. As there is currently no standard industry-defined measure of AFFO, the method used for calculating AFFO may differ from that of other real estate entities, and accordingly, may not be comparable with such amounts reported by other issuers.

Conference call information

Senior management of Dundee Acquisition and CHC will be hosting an investor conference call to allow shareholders an opportunity to hear from and ask questions of management.

Please call in at least 10 minutes prior to the call to register.

Date:   Thursday, Aug. 25, 2016, at 11 a.m. Eastern Daylight Time

Dial-in number for North America:  1-800-698-5954

Dundee Acquisition's qualifying acquisition

The arrangement constitutes Dundee Acquisition's qualifying acquisition and must be approved by Dundee Acquisition shareholders at a special meeting of shareholders.

The founders of Dundee Acquisition have agreed to make the transaction more attractive to shareholders by reducing the value of their founders' shares by 25 per cent of what they currently own, by giving up their forfeitable shares.

The founders of Dundee Acquisition previously agreed to vote their Class B shares of Dundee Acquisition and any Class A restricted voting shares of Dundee Acquisition they have acquired in favour of the arrangement. In addition to Dundee Acquisition shareholder approvals, completion of the arrangement will be subject to the approval of the Ontario Court of Justice and applicable regulatory approvals, including the Ontario Securities Commission, the Toronto Stock Exchange and, if applicable, the TSX Venture Exchange.

The arrangement will be implemented by way of a statutory plan of arrangement under the Business Corporations Act (Ontario). As set out above, CHC will acquire all of the outstanding shares of Dundee Acquisition in exchange for common shares of CHC pursuant to the terms of the arrangement agreement.

Pursuant to the arrangement agreement, Dundee Acquisition and CHC have agreed to use commercially reasonable efforts to complete the arrangement. The parties have agreed, among other things, to take certain steps to implement the arrangement, to file and to seek to obtain a receipt for a final prospectus and to seek to obtain all other approvals required in connection with the arrangement. CHC also agreed to operate its business in the ordinary course pending completion of the arrangement.

Existing Dundee Acquisition and CHC warrants and other convertible securities will, subsequent to the completion of the arrangement, become exercisable for common shares of CSL.

Timing and additional information

Pursuant to applicable rules, Dundee Acquisition will file with the Canadian securities regulatory authorities in each of the provinces and territories of Canada a non-offering prospectus containing disclosure regarding the transactions and the resulting issuer that assumes completion of the arrangement. The preliminary prospectus is expected to be filed with Canadian securities regulatory authorities in September, 2016. Following the issuance of a receipt for the final prospectus, Dundee Acquisition will file an information circular in connection with the meeting that will contain prospectus level disclosure of the transactions and the resulting issuer assuming completion of the arrangement. The arrangement remains subject to TSX approval.

Subject to the required approvals, Dundee Acquisition intends to mail the information circular to its shareholders by early October and it is anticipated that the meeting will take place by mid-November. Closing of the arrangement is expected to occur shortly after the meeting, subject to satisfaction of the conditions in the arrangement agreement, including approval of the court.

Holders of Dundee Acquisition Class A shares will have a right to redeem all or a portion of their Class A shares, provided that they deposit their shares for redemption prior to the second business day before the meeting with the redemption being effective, subject to applicable law, immediately prior to the closing of the arrangement. Holders of Class A shares may elect to redeem their shares, whether they vote for, or against, or do not vote on, the arrangement.

The prospectus and information circular will also be available on SEDAR under Dundee Acquisition's profile and the arrangement agreement and an investor presentation will be available under both SEDAR profiles of Dundee Acquisition and CHC.

Dundee Acquisition has been advised on financial matters by TD Securities Inc. and has received an opinion from National Bank Financial Inc. that, based upon and subject to the assumptions, limitations, qualifications (including that the transactions will be completed on the terms provided herein) and such other matters that NBF considered relevant, NBF is of the opinion that the transaction consideration, is fair from a financial point of view to the Dundee Acquisition Class A shareholders, other than directors and officers of Dundee Corp.

Origin Merchant Partners has advised Dundee Acquisition with respect to certain financial and other matters relating to the anticipated co-ownership of certain acquisition properties. Stikeman Elliott LLP has advised Dundee Acquisition on legal matters.

CHC has been advised on financial matters by Raymond James Ltd. and in respect of legal matters by DLA Piper (Canada) LLP and Wildeboer Dellelce LLP.

We seek Safe Harbor.