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Press release from CNW Group

Brick Buys Maximum Shares and Warrants under Normal Course Issuer Bid

Thursday, May 26, 2011

Brick Buys Maximum Shares and Warrants under Normal Course Issuer Bid08:45 EDT Thursday, May 26, 2011NOT FOR DISTRIBUTION THROUGH U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE U.S.Proposed cashless exercise of warrants continues the Brick's drive to reduce dilutionEDMONTON, May 26, 2011 /CNW/ - The Brick Ltd. (TSX: BRK) (the "Brick Group") today announced that it has repurchased for cancellation the maximum number of shares and warrants authorized by the Toronto Stock Exchange ("TSX") under its normal course issuer bid which commenced August 10, 2010.The TSX approved the repurchase and cancellation of up to 2,763,066 of The Brick's Class A Trust Units ("Units") representing 5% of the 55,261,333 outstanding Units as at August 3, 2010 and up to 5,945,490 of its outstanding warrants (the "Warrants") representing 5% of the 118,909,800 outstanding Warrants as at August 3, 2010 through the facilities of the TSX from August 10, 2010 to August 9, 2011. At the commencement of the normal course issuer bid, 179,488,233 Units were outstanding on a fully diluted basis including 5,317,100 Warrants (the "Fairfax Warrants") that were issued to Fairfax Financial outside of the TSX and not subject to the normal course issuer bid.The repurchase of 5% was completed for a total of approximately $16 million, at an average price of $2.62 for the Units/shares and $1.47 for the Warrants.As of May 23, 2011, with the completion of the normal course issuer bid, the Brick Group had a total of 54,463,867 Shares and 116,315,810 Warrants outstanding or 170,779,677 shares and warrants on a fully diluted basis, including the Fairfax Warrants.Bill Gregson, President and CEO of The Brick Group, commented "The normal course issuer bid was our first step in a plan to reduce the dilution of Brick stock resulting from the May 2009 refinancing.  We accomplished this Unit and Warrant buy-back while at the same time strengthening our cash position and without any borrowings under our credit facility with GE"."In addition to the Unit and Warrant buy-back, yesterday's announcement of the cashless warrant exercise represents our second major step to reduce shareholder dilution. Assuming that the $2.80 weighted average share price threshold outlined in the offer letter is met, and by way of example the preceding 5 day volume weighted average trading price (VWAP) is $2.80, under the cashless exercise, warrants would, on June 29, 2011 be exchanged at a ratio of $1.80 over $2.80 or for approximately 64% of a Share. With 100% support from Warrant holders, this fully diluted position would be reduced to 129,238,316 Shares, with no remaining Warrants", continued Mr. Gregson.As at May 23, 2011, The Brick had in excess of $106 million of cash and no borrowings under its asset-backed credit facility with GE.Mr. Gregson concluded "With the continued strengthening of our cash position, we have the flexibility to take additional steps, beyond the normal course issuer bid and the cashless exercise, to address the dilutive effect from the May 2009 refinancing. The Brick Group's Board of Directors is considering alternatives for the use of cash, in excess of the minimum reserve".About the Brick GroupThe Brick Group, together with its subsidiaries, is one of Canada's largest volume retailers of household furniture, mattresses, appliances and home electronics, operating under five banners: The Brick, United Furniture Warehouse, The Brick Superstore, The Brick Mattress Store, and Urban Brick. In addition, through its corporate sales division, the Brick Group services the subdivision, condominium, hospitality and high-rise builder market. The Brick Group's retail operations are located in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Prince Edward Island, Nova Scotia, New Brunswick, the Northwest Territories and the Yukon.Forward-Looking Statements This news release contains "forward-looking statements" within the meaning of applicable Canadian securities laws, including (but not limited to) statements about the Brick's consolidated sales and operating revenue, consolidated EBITDA, consolidated net loss, sales and operating revenue in the financial services and retail segments, same store sales growth and goodwill and indefinite life intangible asset impairment charges, the financial flexibility and capital resources necessary to manage the business in the current economic environment, and similar statements concerning anticipated future events, results, circumstances, performance or expectations, that reflect management's current expectations and are based on information currently available to management of the Brick and its subsidiaries. The words "may", "will", "should", "believe", "expect", "plan", "anticipate", "intend", "estimate", "predict", "potential", "continue" or the negative of these terms, or other expressions which are predictions of or indicate future events and trends and which do not relate to historical matters, identify forward-looking matters. Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Brick to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements. The Brick undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable law.For further information: Bill Gregson              Greg Nakonechny President and CEO        Vice President, Legal and Corporate Secretary The Brick Group             The Brick Group (780) 930-6300              (780) 930-6300