Clearwater Seafoods Income Fund Announces Going Private Transaction with Partnership Consortium Led by Clearwater Fine Foods Inc.


    HALIFAX, Aug. 14 /CNW/ - Clearwater Seafoods Income Fund (the "Fund")
(TSX: CLR.UN) announced today that it has entered into a transaction agreement
(the "Agreement") with CS Acquisition Limited Partnership ("CS LP"), a
partnership owned by a consortium (the "Consortium") led by Clearwater Fine
Foods Inc. ("CFFI"). Under the terms of the Agreement, CS LP will acquire all
of the partnership units (other than those units now held by CFFI, other
members of the Consortium and certain other interested and/or related parties
(collectively the "Interested Unitholders")) of Clearwater Seafoods Limited
Partnership ("Clearwater LP"), a subsidiary of the Fund, which will result in
the Fund's unitholders receiving $4.50 per unit in cash (the "Consideration").
The $4.50 per unit purchase price will be paid to the Fund's unitholders
(other than members of the Consortium) by way of a redemption of the Fund's
outstanding units.
    This transaction is the outcome of a comprehensive review of strategic
alternatives conducted by a Special Committee of the Board of Trustees of the
Fund, whose members are independent of CFFI. The price of $4.50 per unit
represents a 32% premium over the volume weighted average trading price for
the Fund's units on the Toronto Stock Exchange for the previous 20 trading
days, and is within the valuation range established by BMO Capital Markets,
the independent valuator retained by the Special Committee. BMO Capital
Markets has provided an oral opinion to the Board of Trustees that the
Consideration is fair, from a financial point of view to the Fund's
unitholders, other than the Interested Unitholders. Based on the
recommendation of its Special Committee, the Board of Trustees has unanimously
resolved to recommend that unitholders approve the transaction. The Fund will
issue a management information circular, which will contain its recommendation
to unitholders together with a copy of the formal valuation and fairness
    "This all cash transaction represents an excellent opportunity for the
Fund's unitholders to realize a significant premium on their units, given the
challenging conditions facing the Fund and the changes in the Canadian public
markets related to income trusts," commented Tom Traves, Chairman of the Fund.
Mr. Traves continued, "The Special Committee and the full Board of the Fund
unanimously support the transaction".
    The completion of the transaction is subject to the approval of the
Fund's unitholders at a special meeting which is expected to be held on or
about September 22, 2008. The transaction must be approved by the holders of
units representing two thirds or more of the units represented at the meeting
and by the holders of 50% or more of the units represented at the meeting not
held by the Interested Unitholders. Members of the Consortium currently own
securities representing an approximate 68% interest in Clearwater LP. Each of
the members of the Consortium has signed an undertaking in favour of the Fund,
pursuant to which it has agreed to vote its units and special trust units in
favour of the transaction, subject to the terms and conditions thereof. The
completion of the transaction is also subject to the approval of the
redemption right in respect of the convertible debentures by two thirds or
more of the holders of the convertible debentures (the "Debentureholders") of
each series of debentures represented at a meeting, which is also expected to
be held on or about September 22, 2008. The redemption right will provide the
Fund with a right to redeem all of the outstanding 7% convertible unsecured
debentures and 2007 7.25% convertible unsecured debentures for 101% of their
respective face amounts, which will be paid to Debentureholders on closing.
    CS LP has represented to the Fund that it has obtained equity and debt
financing commitments for the transaction contemplated by the Agreement, the
aggregate proceeds of which will be sufficient to pay the aggregate
Consideration and related fees and expenses. Completion of the transaction is
subject to various conditions precedent set out in the Agreement including the
approval of the transaction by the Fund's unitholders and the approval of the
redemption right by the Debentureholders. Subject to the satisfaction or
waiver to such conditions of closing, the Fund and CS LP expect to close the
transaction in early October, 2008.
    Glitnir Capital Corporation (New York) and TD Securities Inc. are acting
as financial advisors to CFFI in connection with this transaction and Glitnir
Banki hf is participating in the debt financing.

    Commentary regarding forward looking statements

    This news release may contain forward-looking statements, including in
connection with the transactions contemplated by the Agreement. Such
statements involve known and unknown risks, uncertainties, and other factors
outside management's control including, but not limited to, total allowable
catch levels, selling prices, weather, exchange rates, fuel and other input
costs and the completion of the transactions contemplated in the Agreement,
that could cause actual results to differ materially from those expressed in
the forward-looking statements. The Fund does not assume responsibility for
the accuracy and completeness of the forward-looking statements and does not
undertake any obligation to publicly revise these forward-looking statements
to reflect subsequent events or circumstances.

    About Clearwater

    Clearwater is recognized for its consistent quality, wide diversity and
reliable delivery of premium seafood, including scallops, lobster, clams,
coldwater shrimp, crab and ground fish.
    Since its founding in 1976, Clearwater has invested in science, people,
technology, resource ownership and resource management to preserve and grow
its seafood resource. This commitment has allowed it to remain a leader in the
global seafood market.
    %SEDAR: 00018023E

For further information:

For further information: Robert Wight, Chief Financial Officer,
Clearwater, (902) 457-2369; Tyrone Cotie, Director of Corporate Finance and
Investor Relations, Clearwater, (902) 457-8181

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