CALGARY, Oct. 19 /CNW/ -- Continuum Health Care Inc. (TSXV-CCF) ("Continuum") announces today that it has executed an acquisition agreement (the "Agreement") with Hallmark Properties Ltd. ("Acquisitionco"), a recently formed company which is currently wholly-owned by Patrick Hovan, President, Chief Executive Officer and Director of Continuum. Under the terms of the Agreement, Acquisitionco will amalgamate with Continuum (the "Amalgamation") to form Amalco and the shareholders of Continuum, other than the Acquiring Shareholders, will receive, upon completion of the Amalgamation, $0.29 in cash for each Continuum common share held, representing a 81.3% premium over the average trading price over the five most recent days on which Continuum's common shares traded, which covers a period from June 11, 2009 to present. The Continuum shareholders who are the "Acquiring Shareholders", a group comprised of, among others, Patrick Hovan, Peter H. Allan, Evan Wellbourn, Tracy Wayne, Mushtaq Thobani and Marjorie Hovan, will receive, upon completion of the Amalgamation, one common share of Amalco for every common share of Continuum held and one series 1 preferred share of Amalco for every series 1 preferred share of Continuum held.

The Acquiring Shareholders and their families collectively own, or exercise control or direction over, directly and indirectly 14,321,659 common shares and 2,333,333 series 1 preferred shares in the capital of Continuum representing 75.4% of issued and outstanding common shares and 100% of the issued and outstanding series 1 preferred shares. Certain of the Acquiring Shareholders are insiders of Continuum (the "Insider Group"). The Insider Group is comprised of: Patrick Hovan, President, Chief Executive Officer and Director; Peter Allan, Chief Financial Officer and Director; Evan Welbourn, Director; and Tracy Wayne, Executive Vice President. The Insider Group and their families collectively own or exercise control or direction over, directly or indirectly, 9,292,563 common shares and 1,994,443 series 1 preferred shares in the capital of Continuum representing 49.0% of the issued and outstanding common shares and 83% of the issued and outstanding series 1 preferred shares.

On August 7, 2009, the Board of Directors of Continuum established a Special Committee of independent directors, namely Ian McAuley and Steven McDonnell, to consider the fairness of the proposed going private transaction. The Special Committee retained an independent valuator to consider the fairness of the proposed transaction, from a financial point of view, to the shareholders of Continuum (other than the Acquiring Shareholders). The acquisition price of $0.29 is within the valuation range established by the independent valuator.