Centre and Connor Bros Ammend Agreement

Centre Partners has amended its acquisition agreement with Canadian food-maker Connors Bros. Income Fund, in order to increase the certainty of close. 



Connors Bros. Income Fund (TSX: CBF.UN) (the “Fund”), whose subsidiaries market consumer food products under brands such as Bumble Bee(R), Clover Leaf(R), Brunswick(R), and Sweet Sue(R), today announced that it has amended the transaction agreement (the “Amendment”) to sell its operating businesses (the “Transaction”) to an affiliate of Centre Partners Management LLC (“Centre Partners”). The Amendment seeks to increase the certainty of completing the Transaction by providing for increased expense reimbursement in certain circumstances, which will allow Centre Partners to improve the dependability of its financing arrangements. In addition, the Fund gave permission for Centre Partners to contact certain of the Fund’s unitholders in order to determine their support of the Transaction.




On September 25th, 2008 the Fund announced that it had entered into a transaction agreement (the “Agreement”) to sell its operating businesses to Centre Partners. Under the terms of the Agreement, Centre Partners will acquire the operating subsidiaries controlled by the Fund, which will result in the Fund’s unitholders receiving C$8.50 per unit in cash. The C$8.50 per unit price will be paid to the Fund’s unitholders by way of a distribution on and redemption of the Fund’s outstanding units. The Agreement includes a 45-day go-shop provision pursuant to which the Fund has the right to solicit and engage in discussions and negotiations with respect to potential competing proposals, until a date no later than November 9, 2008 (referred to as the “go shop period”). The Fund’s financial advisor, Genuity Capital Markets, provided a fairness opinion that as of September 25th, 2008 the consideration to be received by the unitholders in connection with the Transaction is fair, from a financial point of view, to the unitholders.


The Amended Agreement


The Fund has been advised that certain unitholders have been contacted by Centre Partners in order to determine their support of the Transaction. In addition, Centre Partners anticipates entering into Canada/US currency hedge agreements as a way to provide greater certainty with respect to the purchase price and closing of the Transaction in light of recent volatility in the financial markets.


Under the terms of the Amendment, which only become operative should Centre Partners enter into one or more currency hedge agreements, if the Fund terminates the Agreement in order to accept a superior proposal during the go-shop period, it must pay fees and expenses of up to C$15.5 million plus Centre Partners’ cost to enter into currency hedge agreements of up to US$7.5 million. Also, if Centre Partners terminates the agreement due to a breach by the Fund of its representations, warranties or covenants in the Agreement, it must pay Centre Partners’ expenses of up to C$2.5 million plus the cost of any currency hedge agreements up to US$7.5 million. The fees and expenses payable under these circumstances prior to the Amendment did not include the cost of any currency hedge.


All other terms and conditions of the Agreement remain in full force and effect. The Fund has scheduled the special meeting of the unit holders for November 10, 2008 and a circular and proxy for the meeting have been mailed to unitholders. The transaction is anticipated to close in mid-November.


Forward Looking Statements


Certain statements contained or incorporated by reference in this news release constitute forward-looking statements. The use of any of the words “anticipate,” “continue,” “estimate,” “expect,” “may,” “will,” “project,” “should,” “believe” and similar expressions are intended to identify forward-looking statements. These statements are based on, but not limited to, management’s assessment of such factors as expected consumer demand, resource supply, and competitive environment. These statements involve known and unknown risks, uncertainties and other factors, including those described in the Annual Information Form of the Fund under “Risk Factors” that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Fund believes the expectations reflected in the forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in, or incorporated by reference into, this news release should not be unduly relied upon. These statements speak only as of the date of this news release. The Fund does not undertake any obligation to publicly update or revise any forward-looking statements, except as required by securities laws.


About Connors Bros. Income Fund


Connors Bros. Income Fund indirectly owns, through its subsidiaries, a 100% interest in Clover Leaf Seafoods, L.P. and Bumble Bee Foods, LLC. Together, these two operating companies comprise North America’s largest branded seafood company, offering a full line of canned tuna, salmon, sardine and specialty seafood products, marketed under leading brands including Clover Leaf(R), Bumble Bee(R), Brunswick(R), Snow’s(R) and Beach Cliff(R), as well as a full-line of canned chicken products in the U.S. under the Sweet Sue(R) brand names. For further information, please visit the Fund’s website at www.connors.ca.


About Centre Partners


Centre Partners, founded in 1986, is a leading private equity firm with a middle market focus. Centre Partners’ Managing Directors have invested over $3 billion in more than 90 companies. With offices in New York City and Los Angeles, the firm is currently investing through its fifth fund, which has approximately $880 million of committed capital. Centre Partners has deep investment expertise covering consumer, healthcare, industrial products and services, financial services, energy, media, restaurants, retail, and aviation services. Additional information is available at www.centrepartners.com.