Labatt Brewing Company Limited acquires Lakeport Brewing Income Fund for cash offer of $28.00 per unit



    Hamilton, ON, Feb. 1 /CNW/ - The Board of Trustees of Lakeport Brewing
Income Fund (the "Fund") (TSX: TFR.UN), an Ontario-based brewer of
value-priced quality beer, announced today that the Fund has entered into a
support agreement (the "Agreement") with Labatt Brewing Company Limited
("Labatt") to acquire all of outstanding units of the Fund at a purchase price
of C$28.00 per unit in cash for an aggregate price of just over $201.4 million
(the "Offer").
    Under the Agreement, the Board of Trustees unanimously recommends that
unitholders accept the Offer, which represents a premium of 36% based on the
$20.57 closing price for the Fund units on the Toronto Stock Exchange on
January 31, 2007.
    The Board has unanimously determined that the Offer is fair to
unitholders and in the best interests of the Fund and its unitholders and
unanimously recommends that unitholders accept the Offer. In addition, the
Fund's financial advisor, RBC Capital Markets, has provided the Board of
Trustees with an opinion that the consideration to be received under the Offer
is fair, from a financial point of view, to unitholders of the Fund.
    Roseto Inc., which is wholly-owned by Teresa Cascioli, the Chair and
Chief Executive Officer of the Fund, has agreed to tender all of its units to
the Offer.
    "Labatt's offer represents exceptional value for unitholders and a
substantial premium to the recent trading price of our units. Further, we are
pleased to have a company of Labatt's global stature and experience recognize
the quality and value of Lakeport. We are confident that Labatt has the
financial resources to continue to grow the Lakeport brands. The Board and I,
as a significant unitholder, believe this is in the best interests of our
investors, employees and customers," said Teresa Cascioli.
    Completion of the Offer is subject to certain customary conditions,
including, among other things, there being validly deposited under the Offer
and not withdrawn that number of units that constitutes at least 66 2/3% of
the issued and outstanding units of the Fund (calculated on a fully diluted
basis). If a sufficient number of units to meet the minimum tender condition
are tendered to the Offer, Labatt has agreed to pursue lawful means of
acquiring the remaining units, including, without limitation, through a
subsequent acquisition transaction. The parties will make a pre-merger filing
under the Competition Act as is customary for transactions of this size. The
parties will endeavour to close the transaction at the earliest possible date,
while allowing the Competition Bureau to review the transaction in the
ordinary course.
    The take-over bid circular, containing the full terms of the Offer, will
be mailed to the Fund's unitholders together with the Board of Trustee's
circular and other related documents in connection with the Offer ("Offering
Documents"). The Offering Documents are expected to be mailed by the third
week of February. The proposed transaction is expected to close some time this
spring.
    The Agreement also provides for, among other things, a non-solicitation
covenant on the part of the Fund. In certain circumstances, the Fund may
terminate the Agreement or withdraw its recommendation to unitholders to
accept the Offer. In such events, the Fund would be required to pay a
$5 million termination fee to Labatt. The parties have agreed to close into a
hold separate arrangement, if need be, whereby the business operations of the
Fund would be held separate from Labatt's business following take up to allow
the Commissioner of Competition to review the transaction on an orderly basis.
While the parties anticipate that the transaction will be completed in
accordance with its terms, in the event the Agreement is terminated by the
Fund due to the failure of Labatt to satisfy Competition Act conditions to
taking up and paying for tendered units, Labatt would be required to pay a
$5 million termination fee to the Fund. The Agreement also provides that
Labatt has the right to match any offer made by another bidder.
    Further, the Agreement allows the Fund to declare and pay its regular
monthly distribution of up to $0.14 per month as well as any special
distributions necessary to ensure that the Fund is not subject to tax in
respect of the fiscal 2006 period.
    Roseto Inc. and Teresa Cascioli have entered into a lock-up agreement
which provides that, subject to certain terms and conditions, they will
conditionally exercise all exchange rights and convert all Class B LP units in
Lakeport Brewing Limited Partnership for Fund units and will deposit all of
their Fund units (including any Fund units to be received pursuant to the
Fund's LTIP and the redemption of Class D LP units) to the Offer. In certain
circumstances, including where the Board of Trustees terminates the Agreement,
Roseto Inc. and Ms. Cascioli may withdraw the units tendered to the Offer. The
units subject to the lock-up agreement represent approximately 1,553,894 Fund
units, which represent approximately 21.6% of the fully diluted units of the
Fund.

    Investor Call

    A conference call with Teresa Cascioli for the investment community has
been scheduled for Thursday, February 1, 2007 at 8:30 a.m. EST. This call will
be for analysts and investors, however, members of the media are welcome to
listen in.
    The dial-in numbers are 416-641-6105 or 866-542-4239 and ask for the
Lakeport Brewing conference call.

    About Lakeport

    Lakeport is an Ontario-based brewery focused on producing value-priced
quality beer in Ontario. Lakeport produces nine proprietary beer brands.
Lakeport has more than 200 employees at its production facility in Hamilton,
Ontario.

    Certain statements in this press release may constitute "forward-looking"
statements that involve known and unknown risks, uncertainties and other
factors which may cause actual results, performance or achievements of the
Fund to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. When
used in this press release, such statements use such words as "may", "will",
"expect", "anticipate", "project", "believe", "plan", and other similar
terminology. The risks and uncertainties are detailed from time to time in
reports filed by the Fund with the securities regulatory authorities in all of
the provinces and territories of Canada to which recipients of this press
release are referred for additional information concerning the Fund, its
prospects and the risks and uncertainties relating to the Fund and its
prospects. New risk factors may arise from time to time and it is not possible
for management to predict all of those risk factors or the extent to which any
factor or combination of factors may cause actual results, performance and
achievements of the Fund to be materially different from those contained in
forward-looking statements. The forward-looking information contained in this
press release is current only as of the date of this press release. There
should not be an expectation that such information will in all circumstances
be updated, supplemented or revised whether as a result of new information,
changing circumstances, future events or otherwise.




For further information:

For further information: Teresa Cascioli, Chair and Chief Executive
Officer, Lakeport Brewing, investor.relations@lakeportbrewing.ca,
http://www.lakeportbrewing.ca/

Organization Profile

LAKEPORT BREWING INCOME FUND

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