Associated Brands Income Fund
TSX : ABF.UN

Associated Brands Income Fund

May 04, 2007 16:56 ET

Associated Brands Announces Unitholder Approval of TorQuest's Acquisition of Operating Business of Associated Brands Income Fund

TORONTO, ONTARIO--(CCNMatthews - May 4, 2007) - Associated Brands Income Fund (the "Fund") (TSX:ABF.UN) announced today that unitholders of the Fund ("Unitholders"), at a special meeting of Unitholders held today (the "Meeting"), approved the previously announced proposed sale of the Fund's operating subsidiaries to a wholly-owned subsidiary of a fund managed by an affiliate of TorQuest Partners Inc. ("TorQuest").

At the Meeting, Unitholders approved amendments to both of the amended and restated declarations of trust of the Fund and its wholly-owned subsidiary, Associated Brands Operating Trust ("ABOT") to provide for the redemption of units of the Fund and ABOT and for the termination of the Fund and ABOT. The proceeds of the sale will be paid to Unitholders by way of the redemption of the outstanding Fund units at a cash redemption price between $0.80 and $0.82 per unit. In connection with the sale transaction, TorQuest agreed to fund up to $1,925,000 of the Fund's transaction expenses. If the Fund's transaction expenses do not exceed this amount, the redemption price per unit will be $0.82. If the Fund's transaction expenses exceed $1,925,000, any excess expenses (to a maximum amount equal to $0.02 multiplied by the number of Fund units outstanding at closing) will be paid by the Fund from the proceeds of the sale, with a corresponding reduction in the per unit redemption price of up to $0.02 per unit. Management of the Fund estimates that the Fund's transaction expenses will be approximately $1,925,000.

The sale transaction, which is subject to closing conditions, is expected to be completed on or about May 8, 2007. The redemption of the Fund's units is expected to occur on or about May 10, 2007.

The transaction and related arrangements received the approval of more than 66 2/3% of the votes cast by or on behalf of all Unitholders at the meeting, as well as the approval of the majority of votes cast by or on behalf of "minority" Unitholders for purposes of Ontario Securities Commission Rule 61-501 and Regulation Q-27 of the Autorite des marches financiers du Quebec.

About Associated Brands Income Fund

Associated Brands Income Fund (TSX:ABF.UN), through its operating subsidiaries, is a leading North American manufacturer and supplier of private-label dry-blend food products and household products. Since beginning operations in 1985, Associated Brands has grown to become one of the three largest suppliers of a diverse range of private-label dry-blend food products in North America, producing over eleven million cases annually across multiple product categories currently sold to 45 of the 50 largest North American food retailers. Associated Brands plans to build unitholder value by leveraging its solid presence in the U.S. private-label market, expanding its product offerings to current and new customers and adding additional contract manufacturing business, and through accretive acquisitions that meet its strict operating and strategic criteria. More information can be obtained at www.associatedbrands.com.

This press release contains certain forward-looking information and statements. Forward-looking information typically contains statements with words such as "consider", "anticipate", "believe", "expect", "plan", "intend", "may", "likely" or similar words suggesting future outcomes or statements regarding an outlook for, or future changes in, the proposed sale of the operating subsidiaries of the Fund and related arrangements, the Fund's financial performance, results of operations or distributions or other expectations, future events or performance. Readers should not place undue reliance on forward-looking information and should be aware that forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the completion of the proposed sale of the operating subsidiaries of the Fund or actual results, performance or achievements of the Fund to differ materially from those suggested by the forward-looking statements. These factors include, but are not limited to, the possibility that any conditions to closing under the agreement relating to the proposed sale of the operating subsidiaries of the Fund and related arrangements may not be satisfied or waived, the possible failure to successfully plan and execute business improvement strategies; restrictions and covenants contained in the Fund's credit agreement and under the terms of its exchangeable debentures and the existence of defaults under such covenants; the absence of long term sales contracts; possible failure to develop new product offerings; operating hazards; sensitivity of sales to weather conditions; product liability; compliance with or changes in environmental, health and safety and other regulations and guidelines; changes to income tax legislation; possible declines in vertical industry markets (grocery, foodservice, industrial and contract manufacturing); competition; reliance on key personnel; possible labour action; volatility in commodity prices and other input materials; prices; foreign exchange exposure; exposure to floating interest rates; exposures under derivative financial instruments; the possible failure to expand into the United States; changes in consumer preferences; and capital expenditures.

The above list of important factors affecting forward-looking information is not exhaustive, and reference should be made to the other risks discussed in the Fund's filings with Canadian securities regulatory authorities. The Fund undertakes no obligation, except as required by law, to update publicly or otherwise any forward-looking information, whether as a result of new information, future events or otherwise, or the above list of factors affecting this information.

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