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Tuckamore Shareholders-It's About Value

TORONTO, ONTARIO -- (Marketwired) -- 07/07/14 -- Tuckamore Capital Management Inc. (TSX: TX)(TSX.DB.B) ("Tuckamore" or the "Company") released a letter to shareholders today in relation with the Company's previously announced special meeting of shareholders to be held on July 15, 2014. Shareholders will be asked to vote on a proposal pursuant to which Birch Hill Equity Partners ("Birch Hill"), together with certain members of Tuckamore's management, have agreed to acquire all of the issued and outstanding common shares of the Company (each a "share") for cash consideration at a price of $0.75 per share.

The full text of the Board's letter to Shareholders follows:

Dear Fellow Shareholders,

Much has been written in the press and by other market participants about the $0.75 offer in front of Tuckamore shareholders. We want to refocus the discussion on what really matters to shareholders. We understand that first and foremost you are interested in maximizing the value of your shares. Your Board shares that objective.

The $0.75 cash offer we have presented to you, represents the culmination of a comprehensive process to preserve and surface value for all shareholders. As shareholders are aware, the Board engaged in a comprehensive value maximization process that began in late 2012. The Board, assisted by its highly-qualified legal and financial advisors, carefully considered a variety of proposals, examining the opportunities and risks of each one. After considering several alternatives, the Board had a duty to consider and recommend the Birch Hill offer to shareholders.

For years, Tuckamore struggled with a stretched balance sheet and a lack of trading liquidity, which depressed the value of our shares. Our shares traded at $0.11 a year ago, and have averaged approximately $0.31 for the past 5 years (as at March 25, 2014). When current management took over in December 2008, substantial portions of our debt was in default and due on demand.

Many companies in a similar position would have resorted to financing alternatives that would have dramatically diluted or destroyed equity value. Your Board and management team did not pursue those paths and instead chose to preserve equity value for shareholders at every turn.

Management's successful efforts to stabilize the balance sheet and our underlying businesses, included asset sales and operational and managerial improvements. The Board and management's next balance sheet priority is to address the repayment of $85.2 million of debt due in March 2015, and the pending maturity of our debentures in the amount of $176.2 million in March 2016.

Tuckamore requires a long term solution that provides the capital resources required to de-risk the balance sheet and surface value for shareholders.

Birch Hill, a well known and highly regarded private equity investor, has the resources to fund Tuckamore's capital intensive businesses. The $0.75 offer, provides shareholders with an opportunity to receive cash for their shares, while leaving the purchaser to assume approximately $280 million in debt and capital leases. Shareholders of Tuckamore will also be freed of the operational risks associated with our underlying businesses.

Fellow shareholders you have an important decision to make.

Our duty as a Board was to properly consider and recommend an offer that we believe provides you with liquidity, full and immediate value today and eliminates ongoing exposure to operational and financing risk. We have done that, and now the decision is yours to make.

Whether shareholders choose to accept or reject the $0.75 cash offer on July 15th, the Board and management of Tuckamore remain deeply committed to preserving and surfacing value - as we have always done. The Board will continue to seek opportunities to strengthen the balance sheet and reduce debt, improve operational efficiencies and grow our business.

Your vote is important regardless of how many shares you own and we encourage you to exercise your rights as shareholders.

We look forward to seeing you at the meeting.

Yours very truly,

Douglas Brown, Chairman of the Board of Directors

If you have any questions or need assistance in voting your proxy, please contact our proxy solicitor Kingsdale Shareholder Services at 1-888-518-1561 (toll free within North America) or 416-867-2272 (collect calls accepted), or by email at [email protected].

About the Company

Tuckamore has investments in 7 businesses representing a diverse cross-section of the Canadian economy.

About Birch Hill's Investment

The investment will be part of Birch Hill Fund IV with over $1 billion in committed capital.

SOURCE: Tuckamore Capital Management Inc.

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