Andlauer Management Group Inc.

November 21, 2008 09:24 ET

Andlauer Management Group Inc. Announces Adjustment to Offer for ATS Andlauer Income Fund; Unitholders Representing 57.9% of the Outstanding Units Support the Revised Offer

TORONTO, ONTARIO--(Marketwire - Nov. 21, 2008) -

Attention Business Editors:

2186940 Ontario Inc. (the "Offeror"), a wholly-owned subsidiary of Andlauer Management Group Inc. ("AMG"), announced today that it is reducing the price of its previously announced offer (the "Offer") to acquire all of the units (the "Units") of ATS Andlauer Income Fund ("ATS" or the "Fund") (TSX:ATS.UN) not owned by the Offeror and its affiliates and is extending the expiry time of the Offer.

As a result of deterioration in economic and financial market conditions and increases in capital costs, the Offer price is being reduced from $11.75 per Unit to $10.75 per Unit in cash. The Offer is being extended to 10:00 a.m. (Toronto time) on December 5, 2008, unless withdrawn or further extended by the Offeror. All other terms and conditions of the Offer described in the take-over bid circular dated October 20, 2008 and related documents (collectively, the "Offer Documentation") remain unchanged. The Offeror will mail a formal notice of extension and variation (the "Notice of Variation") to holders of Units ("Unitholders") shortly. Unitholders are urged to read the Notice of Variation and the Offer Documentation.

As previously announced, the Offeror has entered into lock-up agreements (the "Lock-up Agreements") whereby certain institutional investors, certain members of senior management of ATS and other unitholders (the "Lock-up Unitholders") agreed to tender the Units held by them (or over which they exercise control and direction) to the Offer, subject to certain conditions.

Each of the Lock-up Unitholders has in accordance with the terms of the Lock-up Agreements consented to the Offeror amending the Offer by reducing the Offer price to $10.75 per Unit in cash. In addition, 2 additional Unitholders ("Additional Lock-up Unitholders"), being a member of senior management of ATS and a former trustee of ATS respectively, have entered into Lock-up Agreements whereby they have irrevocably and unconditionally agreed to deposit all of their Units under the revised Offer as soon as practicable. The Lock-up Agreements entered into by the Additional Lock-up Unitholders are otherwise substantially on the same terms as the other Lock-up Agreements (which are described in the Offer Documentation). All of the Lock-up Agreements provide that the Lock-up Unitholders (including the Additional Lock-up Unitholders) have the right to support or tender their Units to another transaction which exceeds the price or value under the Offer, subject to the right of the Offeror to match such transaction in accordance with the terms of such agreements. The Lock-up Agreements constitute "Permitted Lock-up Agreements" within the meaning of the Unitholder Rights Plan put in place by the Board of Trustees of ATS. Copies of the Lock-up Agreements are available for review on www.sedar.com.

The Additional Lock-Up Unitholders own, or exercise control or direction over, an aggregate of 215,797 Units representing approximately 1.9% of the Units on a fully-diluted basis. The Lock-up Unitholders (including the Additional Lock-up Unitholders) own, or exercise control or direction over, an aggregate of 3,724,885 Units, representing approximately 32.6% of the Units on a fully-diluted basis. AMG directly or indirectly holds Units which represent approximately 25.3% of the outstanding Units (on a fully diluted basis). Accordingly, the Units covered by the Lock-up Agreements and the Units or securities convertible into Units held directly or indirectly by AMG represent approximately 57.9% of the outstanding Units (on a fully diluted basis).

Since the Offer was made by the Offeror on October 20, 2008, there has been material deterioration of economic conditions and credit markets in Canada as the global crisis deepens. Among other indicators, the S&P/TSX Composite Index has declined by approximately 24.6% and the S&P/TSX Income Trust Index has declined by approximately 25.2% from October 20, 2008 (the date of the Offer) to November 20, 2008. Weakening economic conditions and tight credit markets have, among other things, increased capital costs to the Offeror.

The Offer is subject to a number of conditions, including the condition contained in Section 4(j) of the Offer which provides:

there shall not have occurred, developed or come into effect or existence: (i) any event, action, state, condition or financial occurrence of national or international consequence;...(iii) any other calamity or crisis;...which, in the sole judgment of the Offeror, adversely affects or involves, or could reasonably be expected to adversely affect, the financial or banking markets in Canada, the United States or internationally generally, or the financial condition, business, operations, assets, affairs or prospects of the Offeror or AMG or the Fund or any of their respective subsidiaries, in each case unless the same is acceptable to the Offeror (the "Market Condition")

After consulting its legal and financial advisors, the Offeror has determined that the Market Condition would not be satisfied. While the failure to satisfy the Market Condition would have entitled the Offeror to terminate the Offer in accordance with its terms, the Offeror has instead decided to amend the Offer (as it is permitted to do under the terms of the Offer) by reducing the Offer price by approximately 8.5% to $10.75 per Unit. The Offeror believes the revised Offer price represents an attractive opportunity for Unitholders.

Pursuant to the Offer, holders of Units who have tendered to the Offer are entitled to withdraw any Units they have tendered to the Offer and should refer to the Offer Documentation and the Notice of Variation if they wish to do so. Under the Offer, there is no need for a holder of Units who has tendered Units to take any action if they wish to continue to have their Units tendered to the Offer as amended. Unitholders who have tendered or wish to tender to the amended Offer should confirm with their broker or financial advisor that they have or wish to tender their Units even if they have not instructed their broker to withdraw their Units previously deposited to the Offer.

AMG is a company controlled by Michael Andlauer, the President and Chief Executive Officer of the General Partner of ATS Andlauer Transportation Services Limited Partnership ("ATS Andlauer LP"). AMG's office is located at Suite 630, 190 Attwell Drive, Etobicoke, Ontario, M9W 6H8. AMG directly or indirectly holds 568,506 Units and 2,316,442 securities exchangeable for Units. ATS is an open-ended trust that holds, indirectly, securities of ATS Andlauer LP.

Questions regarding the Offer, requests for copies of the Offer Documentation or the Notice of Variation, or requests for assistance in depositing Units pursuant to the Offer should be directed to Kingsdale Shareholder Services Inc., the information agent and depositary for the Offer at The Exchange Tower, 130 King Street West, Suite 2950, P.O. Box 361, Toronto, Ontario M5X 1E2, North American Toll-Free Phone Number 1-800-749-9197 or at contactus@kingsdaleshareholder.com. Copies of the Lock-up Agreements executed by the Additional Lock-up Unitholders and the report filed with the Canadian securities regulatory authorities in connection with this press release can be obtained from Andrea Brewer at (416) 216-1917.

This announcement is for informational purposes only and does not constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell, otherwise dispose of or issue, or any solicitation of any offer to sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for, any security. The Offer (as the same may be varied or extended in accordance with applicable law) is being made exclusively by means of, and subject to the terms and conditions set out in, the Offer Documentation and the Notice of Variation. ATS unitholders should read these materials carefully because they contain important information, including the terms and conditions of the Offer, as amended.

Certain statements contained in this press release concerning AMG's and the Offeror's objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates, and the business, operations, financial performance and condition of ATS and its subsidiaries are forward-looking statements. The words "believe", "expect", "intend", "may", "anticipate", "will", "would" and similar expressions and the negative of such expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

These forward-looking statements are not based on historical facts, but rather on current expectations, assumptions and projections about future events including interest rates, expected growth, market conditions, business prospects and opportunities. While AMG and the Offeror consider these factors and assumptions to be reasonable based on information currently available, they may be proven to be incorrect.

Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to, failure to satisfy the terms and conditions of the Offer; risks related to the structure of ATS and tax related risks; general economic conditions and changes thereto; the competitive environment; reliance on major customers and contract renewals; dependence on personnel; labour relations; insurance matters; reliance on information technology; reliance on third party transportation providers; exposure to litigation; weather conditions; the regulatory environment; environmental considerations; potential unknown liabilities; capital expenditures; leverage and restrictive covenants; availability of future financing; ability to sustain and manage growth; dependence on external funding sources and the cost thereof; and liability and other claims asserted against ATS. A number of these risks, and additional risks, are described in ATS's Annual Information Form dated March 28, 2008 for the year-ended December 31, 2007, which is available for review at www.sedar.com. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

All of the forward-looking statements made in this press release are qualified by these cautionary statements, and there can be no assurance that the actual results or developments will be realized. Forward-looking statements are given only as at the date hereof and AMG and the Offeror disclaim any obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Contact Information

  • Kingsdale Shareholder Services Inc.
    Carol Dixon
    Director, Operations & Client Management
    (416) 867-2333
    (416) 867-2271 (FAX)
    Email: cdixon@kingsdaleshareholder.com