Stephenson's Rental Services Income Fund
TSX : RNT.UN

Stephenson's Rental Services Income Fund

January 05, 2007 08:35 ET

Stephenson's Rental Services Income Fund Announces Strategic Review Process

MISSISSAUGA, ONTARIO--(CCNMatthews - Jan. 5, 2007) - Stephenson's Rental Services Income Fund ("Stephenson's" or the "Fund")(TSX:RNT.UN) today announced that the Board of Trustees has initiated a process to identify and evaluate strategic alternatives available to Stephenson's to maximize unitholder value. The strategic review process is being undertaken in response to the recent announcements by the Department of Finance to impose a tax on income trusts, and the resulting new challenges facing the income trust sector as a result of these proposed changes. The Board has engaged Scotia Capital Inc. as its financial advisor to assist it with this ongoing process.

Stephenson's emphasized there can be no assurance that the evaluation process will result in any transaction.

"Stephenson's has grown significantly since our IPO on July 28, 2005, completing and integrating the acquisition of our largest independent competitor during this time while maintaining our distributions of $1.10 per annum, without interruption. However, in light of the recent announcements by the Federal Government, the Board of Trustees has concluded that it is the best interest of unitholders to review all potential strategic and financial options to determine the best method to maximize unitholder value" said Willie Swisher, President and CEO.

Stephenson's also announced that the Board has implemented a Unitholder Rights Plan. The purpose of the rights plan is to provide the Board sufficient time to develop and implement alternatives intended to maximize value for all unitholders in the event of an unsolicited bid for Stephenson's, and to enhance Stephenson's ability to prevent any unfair acquisition tactics. The Board's actions are not related to any specific acquisition proposal. Stephenson's is unaware of any take-over bid activity currently underway or contemplated. The rights plan is also not intended to, and would not, hinder full and fair offers for Stephenson's that are made to all unitholders; in particular, the rights plan contains a standard "permitted bid" exclusion that makes it inapplicable to a take-over bid made to all unitholders that is open for acceptance for at least 60 days and otherwise complies with customary "permitted bid" requirements.

The adoption of the rights plan is subject to acceptance by the TSX.

About Stephenson's:

Stephenson's is the leading equipment and tool rental company in Toronto and the surrounding areas. Over the past 50 years, the Company has grown from a single location into one of the top ten equipment rental businesses in Canada.

Through its 19 branches, Stephenson's provides rental equipment and sells consumables to a diverse base of over 30,000 customers, divided into three primary categories: (i) residential new construction; (ii) non-residential new construction; and (iii) renovations.

Further information can be found on the Fund's web site at www.stephensons.ca and in the disclosure documents filed with securities regulatory authorities available at www.sedar.com

Forward Looking Statements

Certain statements in this press release may constitute "forward-looking" statements that involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Fund and its subsidiary entities, or the industry, to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. These forward-looking statements are made as of the date of the press release, and the Fund assumes no obligations to update or revise them to reflect new events or circumstances.

Contact Information

  • Stephenson's Rental Services Income Fund
    William D. Swisher
    Chief Executive Officer
    (905) 507-3650
    Website: www.stephensons.ca