HALIFAX, NOVA SCOTIA--(Marketwire - Oct. 13, 2011) - Royal Host Inc. ("Royal Host" or the "Corporation") (TSX:RYL) (TSX:RYL.DB.B) (TSX:RYL.DB.C) (TSX:RYL.DB.D) announced today two substantial issuer bids (the "Offers" and each, individually an "Offer") pursuant to which the Corporation will offer to purchase for cancellation up to $15,000,000 aggregate principal amount of the issued and outstanding Series B 6.00% convertible unsecured subordinated debentures of the Corporation due October 31, 2015 (the "Series B Debentures") from holders of the Series B Debentures (the "Series B Debentureholders") and up to $10,000,000 aggregate principal amount of the issued and outstanding Series D 5.90% convertible unsecured subordinated debentures of the Corporation due June 30, 2014 (the "Series D Debentures" and, together with the Series B Debentures, the "Debentures") from holders of the Series D Debentures (the "Series D Debentureholders" and, together with the Series B Debentureholders, the "Debentureholders").

The Offers are subject to various conditions typical of transactions of this nature. It is anticipated that the offers to purchase, issuer bid circulars and other related documents containing the terms of the Offers and the instructions for tendering the Debentures (the "Offer Documents") will be mailed to the registered Debentureholders and filed with applicable securities regulators on or about October 14, 2011 (the "Commencement Date"). The Offers will remain open for acceptance until at least November 25, 2011 (the "Expiration Date"), being 42 days from the Commencement Date, unless withdrawn or extended by the Corporation.

Series B Debentures

The Series B Debentures, issued under and pursuant to the provisions of a trust indenture dated February 21, 2002 (the "Indenture") between Royal Host Real Estate Investment Trust (the "Trust") and Computershare Trust Company of Canada (the "Debenture Trustee"), as trustee, and a supplemental trust indenture thereto between the Trust and the Debenture Trustee dated October 20, 2005, which obligations were assumed by the Corporation pursuant to a fifth supplemental indenture dated January 1, 2011 (the "Fifth Supplemental Indenture"), will be purchased at the price of $720 per $1,000 principal amount of Series B Debenture (the "Series B Purchase Price"). In addition, Series B Debentureholders who tender their Series B Debentures to the Offer will receive a payment in respect of all accrued and unpaid interest outstanding on such Series B Debentures as of the date they are taken up by the Corporation pursuant to the Offer.

If more than $15,000,000 aggregate principal amount of Series B Debentures (or such greater aggregate principal amount of Series B Debentures as the Corporation may determine it is willing to take-up and pay for) are properly tendered to the Offer, the Corporation will take-up and pay for the deposited Series B Debentures on a pro-rata basis according to the number of Series B Debentures deposited or deemed to be deposited by the Series B Debentureholders, with adjustments to avoid fractional purchases, at the Series B Purchase Price.

As of October 12, 2011, there were $45,576,000 principal amount of Series B Debentures issued and outstanding, and accordingly, the Offer is for up to approximately 32.9% of the total number of issued and outstanding Series B Debentures.

Stonecap Securities Inc. ("Stonecap") was engaged by the Board of Directors of Royal Host to prepare a valuation report with respect to the Series B Debentures and the Series D Debentures (the "Valuation"), as prescribed under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-10"). A copy of the Valuation will be attached to the Offer Documents.

The Valuation contains Stonecap's opinion that, based on the scope of its review and subject to the assumptions, restrictions and limitations provided therein, the fair market value of the Series B Debentures, as of October 13, 2011, falls within the range (per $1,000 principal amount) of $630 to $730.

Series D Debentures

The Series D Debentures, issued under and pursuant to the provisions of the Indenture and a supplemental trust indenture thereto between the Corporation and the Debenture Trustee dated June 26, 2007, which obligations were assumed by the Corporation pursuant to the Fifth Supplemental Indenture, will be purchased at the price of $770 per $1,000 principal amount of Series D Debenture (the "Series D Purchase Price").

If more than $10,000,000 aggregate principal amount of Series D Debentures (or such greater aggregate principal amount of Series D Debentures as the Corporation may determine it is willing to take-up and pay for) are properly tendered to the Offer, the Corporation will take-up and pay for the deposited Series D Debentures on a pro-rata basis according to the number of Series D Debentures deposited or deemed to be deposited by the Series D Debentureholders, with adjustments to avoid fractional purchases, at the Series D Purchase Price.

As of October 12, 2011, there were $49,724,000 principal amount of Series D Debentures issued and outstanding, and accordingly, the Offer is for up to approximately 20.1% of the total number of issued and outstanding Series D Debentures.

A copy of the Valuation will be attached to the Offer Documents. The Valuation contains Stonecap's opinion that, based on the scope of its review and subject to the assumptions, restrictions and limitations provided therein, the fair market value of the Series D Debentures, as of October 13, 2011, falls within the range (per $1,000 principal amount) of $690 to $790.

General

The Corporation has reserved the right to amend its offer to increase or decrease the maximum number of Debentures it may purchase pursuant to the Offer, at any time and from time to time. The Offers are not conditional on any minimum number of Debentures being deposited. The Corporation will fund any purchases of Debentures pursuant to the Offers from cash available on hand and available credit facilities.

The directors of the Corporation believe that the purchase of the Debentures under the Offers represents an effective use of the Corporation's financial resources and is in the best interests of the Corporation. The Offers are not expected to preclude the Corporation from pursuing its foreseeable business opportunities.

In accordance with applicable Canadian securities laws, Royal Host will suspend purchases under three of its four normal course issuers bids ("NCIBs" and each an "NCIB") until after the Expiration Date, the particulars of which are as follows as of October 12, 2011:

• the NCIB for its Series B Debentures announced on September 8, 2011 pursuant to which Royal Host has purchased an aggregate principal amount of $253,000 at an average price of $690.51 per $1000 of Series B Debentures;

• the NCIB for its Series D Debentures announced on September 8, 2011 pursuant to which Royal Host has purchased an aggregate principal amount of $3,539,000 of the Series D Debentures at an average price of $717.05 per $1000 of Series D Debentures; and

• the NCIB for its common shares (the "Common Shares") announced on January 8, 2011 pursuant to which Royal Host acquired 204,100 Common Shares at an average price of $2.01 per Common Share as of March 31, 2011.

Royal Host will continue its NCIB, announced on September 8, 2011, to purchase up to $4,892,000 principal amount of its Series C 6.25% convertible unsecured subordinated debentures ("Series C Debentures"), representing approximately 10% of its then outstanding public float of Series C Debentures, through the facilities of the TSX over the following 12 months. As of the date hereof, Royal Host has purchased an aggregate principal amount of $1,016,000 at an average price of $809.63 per $1,000 of Series C Debentures.

Neither the Corporation nor its Board of Directors makes any recommendation to Debentureholders as to whether to tender or refrain from tendering their Debentures to the Offers. Debentureholders are strongly encouraged to review the Offer Documents carefully and to consult with their financial and tax advisors prior to making any decision with respect to the Offers.

About Royal Host

Royal Host is a diversified hospitality company that delivers shareholder value through hotel ownership, investment and franchising. The Company's hotels, which contain 3,417 rooms, are located in four Provinces and Territories across Canada. Twenty-five of the Company's hotels operate under internationally recognized brands such as Travelodge®, Super 8®, Holiday Inn®, Hilton®, Ramada®, Best Western®, Country Inns & Suites® and Thriftlodge®. Two of the Company's hotels are unbranded. In addition to its real estate holdings, the Company owns and operates the Travelodge Canada franchise business which is currently comprised of over 90 hotels across nine Provinces and Territories.

Royal Host's common shares and convertible debentures are traded on the Toronto Stock Exchange under the trading symbols "RYL", "RYL.DB.B", "RYL.DB.C" and "RYL.DB.D" respectively.

This press release contains registered trademarks that are the exclusive property of their respective owners. None of the owners of these trademarks has any responsibility or liability for any information contained in this press release.

Forward-Looking Statements

This press release may contain or refer to certain forward-looking statements relating, but not limited to, Royal Host's expectations, intentions, plans and beliefs with respect to Royal Host. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "does not expect", "is expected", "budget", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or equivalents or variations, including negative variations, of such words and phrases, or state that certain actions, events or results, "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved.

Forward-looking statements rely on certain underlying assumptions that, if not realized, can result in such forward-looking statements not being achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of Royal Host to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. Although Royal Host has attempted to identify important factors that could cause actual actions, events or results or cause actions, events or results not to be estimated or intended, there can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Other than as required by applicable Canadian securities laws, Royal Host does not update or revise any such forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. Accordingly, readers should not place undue reliance on forward-looking statements.

Contributing Sources

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