YELLOW PAGES INCOME FUND
TSX : YLO.UN

YELLOW PAGES INCOME FUND

November 04, 2009 07:00 ET

Yellow Pages Income Fund Announces Offer by YPG Holdings Inc. to Purchase All of Its Outstanding 5.50% Exchangeable Unsecured Subordinated Debentures

MONTREAL, QUEBEC--(Marketwire - Nov. 4, 2009) - THIS MEDIA RELEASE IS NOT FOR DISTRIBUTION IN THE UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Yellow Pages Income Fund (TSX:YLO.UN) (the "Fund") announced today that its subsidiary, YPG Holdings Inc. (the "YPG Holdings") has authorized a substantial issuer bid (the "Offer") to purchase for cancellation all of its outstanding 5.50% Exchangeable Unsecured Subordinated Debentures due 2011 (the "Debentures") at a purchase price of Cdn$1,020 in cash for each Cdn$1,000 principal amount of Debentures. In addition, holders of Debentures who deposit their Debentures under the Offer will receive a payment in respect of all accrued and unpaid interest outstanding on such Debentures up to, and including, the date they are taken up by YPG Holdings pursuant to the Offer (which, assuming the Debentures are taken up by YPG Holdings on the expiration of the Offer on December 14, 2009, would be equal to Cdn$20.4932 per Cdn$1,000 principal amount of Debentures). The Offer will expire at 5:00 p.m. (Montreal time) on December 14, 2009, unless withdrawn or extended by YPG Holdings. The Offer is financed through a Cdn$300 million special-purpose committed credit facility as well as YPG Holdings' existing commercial paper program.

The Debentures trade on the Toronto Stock Exchange under the symbol "YPG.DB". On November 3, 2009, the closing price of the Debentures on the Toronto Stock Exchange was Cdn$98.90 per Cdn$100 principal amount of Debentures. On November 4, 2009, there were outstanding Debentures in the aggregate principal amount of Cdn$300 million.

The Offer is conditional upon a minimum of Cdn$120 million principal amount of Debentures being deposited and not withdrawn at the expiration date of the Offer, representing 40% of the Debentures issued and outstanding on the date hereof. The Offer is also subject to certain other conditions, including regulatory approval. Full particulars of the terms and conditions of the Offer will be contained in the Offer to Purchase and Issuer Bid Circular and related documents which will be filed with applicable securities regulatory authorities in Canada and mailed to holders of Debentures on or about November 6, 2009.

The Offer includes the independent formal valuation of Cole & Partners Limited, which based on the scope of their review and subject to the qualifications, assumptions and restrictions provided therein, concludes that the fair market value of the Debentures, exclusive of accrued interest, per Cdn$1,000 principal amount, at October 15, 2009 ranges from approximately Cdn$985.20 to Cdn$1,009.70, with a mid-point of Cdn$997.45.

About Yellow Pages Income Fund

Yellow Pages Income Fund indirectly holds an approximate 98% ownership interest in Yellow Pages Group and Trader Corporation. Yellow Pages Group is Canada's leading local commercial search provider. It publishes annually more than 340 Yellow Pages™ and residential directories. The Company owns and manages Canada's most visited online directories, YellowPages.ca™ and Canada411.ca™, as well as CanadaPlus.ca™, a network of seven local city sites. Trader Corporation is a Canadian leader in print and online vertical media with over 160 publications and 20 web sites covering four product verticals: automotive, real estate, generalist, as well as employment and other. Its main print brands include Auto Trader™, Auto Hebdo™, The Bargain Finder™, Buy& Sell™, Renters News™ and Home Renters' Guide™, and its online destinations, AutoTrader.ca™, HomeTrader.ca™, and LesPAC.com. For more information about the Fund, visit www.ypg.com.

Press release is for informational purposes only

This press release is for informational purposes only and does not constitute an offer to buy or the solicitation of an offer to sell Debentures. Securityholders are advised to review any relevant documents that may be filed with securities regulatory authorities by YPG Holdings because they will contain important information, including full details of the proposed transactions and their terms and conditions.

The solicitation and the offer to buy Debentures will be made only pursuant to the separate Offer to Purchase and Issuer Bid Circular, and related documents. YPG Holdings will file the Offer to Purchase, Issuer Bid Circular and related documents with Canadian securities regulatory authorities. Holders of Debentures should carefully read the Offer to Purchase, Issuer Bid Circular, the related letter of transmittal and other related documents, because they contain important information, including the various terms and conditions of the Offer. The Offer to Purchase and Issuer Bid Circular, the related letter of transmittal and certain other documents will be delivered without charge to all holders of Debentures, as applicable.

Offer documents required to be filed in Canada will also be available without charge at www.sedar.com or by calling the Secretary office of YPG Holdings at (514) 934-2611.

Caution Concerning Forward-Looking Statements

This press release contains forward-looking statements about the objectives, business and affairs of the Fund and YPG Holdings. These statements are forward-looking as they are based on our current expectations, as at November 4, 2009, about our business and the markets we operate in, and on various estimates and assumptions. Our actual results could materially differ from our expectations if known or unknown risks affect our business, if our estimates or assumptions turn out to be inaccurate or, as a result of volatility in the market price of the securities of YPG Holdings and the Fund, satisfaction of the Offer conditions, the extent to which holders of Debentures determine to tender their Debentures to the Offer, as well as the factors identified throughout YPG Holdings' and the Fund's filings with securities regulators in Canada and, in particular, those identified in the Risks and Uncertainties section of the Fund's 2008 MD&A dated February 12, 2009 and in Section 7 of the Fund's Third Quarter 2009 MD&A dated November 4, 2009 . As a result, there is no assurance that any forward-looking statements will materialize. We disclaim any intention or obligation to update any forward-looking statements, except as required by law, even if new information becomes available, as a result of future events or for any other reason.

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