Gamehost Income Fund (TSX:GH.UN) has withdrawn from a deal to acquire a Toronto Stock Exchange-listed company as part of its conversion into a corporation.
The Red Deer-based income trust, which operates casinos and other holdings in Fort McMurray, Grande Prairie and Calgary, announced last month that it had entered into an agreement with Oncothyreon Inc. to facilitate the conversion. But newly proposed changes to the Income Tax Act will adversely affect the proposed transaction, said Gamehost in a news release, so it has decided not to proceed.
Gamehost added that unitholder approval for its conversion into a corporation will likely still be sought and the change completed by January 2011.
A number of income trusts have or plan to convert into corporations following the federal government’s announcement in 2006 that income trusts would be taxed the same as corporations. In the case of existing income trusts, the change takes effect next year.