TORONTO, May 10, 2012 /CNW/ – HOMEQ Corporation (“HOMEQ” or the
“Company”) (TSX: HEQ), announced today that Institutional Shareholder
Services Inc. (“ISS”) has recommended that its clients vote FOR the
Arrangement Agreement, under which Birch Hill Equity Partners (“Birch
Hill”) will indirectly acquire all of the outstanding common shares of
HOMEQ for cash at a price of $9.50 per share. The Arrangement Agreement
will be voted on by HOMEQ Shareholders at the Company’s Annual and
Special Meeting of Shareholders on May 28, 2012.

ISS is a leading independent corporate governance analysis and proxy
voting firm. Its recommendations assist shareholders in making choices
regarding proxy voting and transaction decisions. In recommending that
its clients vote FOR the Birch Hill Arrangement Agreement, ISS stated:

“Based on a review of the terms of the transaction and, in particular,
the reasonable strategic rationale, cash consideration, satisfactory
premium and absence of superior offers at this time, a vote FOR is
warranted.”

“We are pleased that after careful analysis ISS, in making its
recommendation, has confirmed our view that the Birch Hill transaction
represents the best alternative for our shareholders,” said Gary
Samuel, Chairman of the HOMEQ Board of Directors. “The transaction is
designed to provide shareholders with significant and immediate value
for their shares. It is also expected to eliminate the risk and
uncertainty associated with attempting to secure affordable,
non-dilutive capital to fund the Company’s future growth.”

The basis for the HOMEQ Board of Directors’ unanimous recommendation
(with the interested directors abstaining) to vote FOR the Arrangement
Agreement is contained in the Management Information Circular filed
with Canadian securities regulators on May 1, 2012. A copy of the
Circular is available online at www.homeq.ca or www.sedar.com. The Circular has also been mailed to HOMEQ shareholders.

The potential transaction is subject to the receipt of applicable
regulatory approvals, including approval under the Bank Act.

How to Vote Shares FOR the Arrangement Agreement

To ensure that your vote is recorded, please complete the voting
instruction form sent to you by Broadridge Communications Solutions,
Canada or Computershare Trust Company of Canada and return it in
accordance with the specified instructions on or before the date and
time noted therein, whether or not you plan to attend the Meeting.

If you have any questions or require more information with regard to
voting your HOMEQ shares, please contact the Company’s proxy
solicitation agent, Georgeson Shareholder Communications Canada Inc.,
at its toll-free number: 1-866-656-4104 or by email at askus@georgeson.com.

About HOMEQ

HOMEQ’s wholly owned subsidiary HomEquity Bank is the only national
provider of reverse mortgages to homeowners aged 55 and over, Canada’s
fastest growing demographic segment. HomEquity Bank originates and
administers Canada’s largest portfolio of reverse mortgages under the
CHIP Home Income Plan brand. As of December 31, 2011, the mortgage
portfolio comprised approximately 9,000 reverse mortgages with an
accrued value of $1.2 billion, secured by residential properties across
Canada worth approximately $3.3 billion. HomEquity Bank has been the
main underwriter of reverse mortgages in Canada since its predecessor,
Canadian Home Income Plan, pioneered the concept in 1986.

HOMEQ’s shares trade on the Toronto Stock Exchange under the symbol
HEQ. Additional information on HOMEQ, including annual and quarterly
reports can be viewed at www.homeq.ca.

About Birch Hill

With $2 billion in capital under management, 20 partner companies and 30
fully realized investments since 1994; Birch Hill is the leader in
long-term value creation in the Canadian mid market. For more
information about Birch Hill Equity Partners, please visit www.birchhillequity.com.

Forward-Looking Information

Certain statements included herein constitute “forward-looking
statements”. All statements, other than statements of historical fact,
included in this release that address future activities, events,
developments or financial performance are forward-looking statements.
These forward-looking statements can be identified by the use of
forward-looking words such as “may”, “should”, “will”, “could”,
“expect”, “intend”, “plan”, “estimate”, “anticipate”, “believe”,
“future” or “continue” or the negative thereof or similar variations.
In particular, statements about the proposed Arrangement between Birch
Hill and HOMEQ, including the expected timetable for completing the
Transaction, the receipt of Shareholder and regulatory approvals and
any other statements regarding HOMEQ’s future expectations, beliefs,
goals or prospects are or involve forward-looking information. These
forward-looking statements are based on certain assumptions and
analyses made by HOMEQ and its management, in light of their
experiences and their perception of historical trends, current
conditions and expected future developments, as well as other factors
they believe are appropriate in the circumstances. Shareholders are
cautioned not to put undue reliance on such forward-looking statements,
which are not a guarantee of performance and are subject to a number of
uncertainties, assumptions and other factors, many of which are outside
the control of Birch Hill and HOMEQ, that could cause actual results to
differ materially from those expressed or implied by such
forward-looking statements. Important factors that could cause actual
results to differ materially from those expressed or implied by such
forward-looking statements include, among other things, the parties’
ability to consummate the Arrangement, the parties’ ability to satisfy
the conditions to the completion of the Arrangement, including that the
receipt of Shareholder approval, court approval, or regulatory approval
for the Arrangement may not be obtained, or may not be obtained on the
terms expected or on the anticipated schedule, general economic and
market factors (including changes in global, national or regional
financial, credit, currency or securities markets), changes or
developments in global, national or regional political conditions
(including any act of terrorism or war), changes in government laws or
regulations (including tax laws) and changes in GAAP or regulatory
accounting requirements. Readers are cautioned that the foregoing lists
are not exhaustive.

Such forward-looking statements should, therefore, be construed in light
of such factors. If any of these risks or uncertainties were to
materialize, or if the factors and assumptions underlying the
forward-looking information were to prove incorrect, actual results
could vary materially from those that are expressed or implied by the
forward-looking information contained herein. All forward-looking
statements attributable to HOMEQ, or persons acting on its behalf, are
expressly qualified in their entirety by the cautionary statements set
forth above. Readers are cautioned not to place undue reliance on
forward-looking statements contained herein, which reflect the analyses
of the management of Birch Hill or HOMEQ, as appropriate, only as of
the date of this release.

For more information regarding these and other risks, readers should
consult HOMEQ’s reports on file with applicable securities regulatory
authorities accessible online by going to SEDAR at www.sedar.com or by going to the HOMEQ website at www.homeq.ca. HOMEQ is under no obligation, and HOMEQ expressly disclaims any
intention or obligation, to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise, except as required by applicable law.

SOURCE HOMEQ Corporation