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Press release from CNW Group

MEGA Brands provides update regarding cashless exercise of warrants

Monday, May 06, 2013

MEGA Brands provides update regarding cashless exercise of warrants

10:20 EDT Monday, May 06, 2013

MONTREAL, May 6, 2013 /CNW Telbec/ -MEGA Brands Inc. (TSX: MB) (the "Corporation") announced today that as of the close of business on May 3, 2013, 23,142,800 common share purchase warrants (the "Warrants") issued under a warrant indenture dated January 28, 2010 (the "Warrant Indenture") have been exercised on a cashless basis pursuant to the previously announced cashless exercise offer,on the terms and conditions set forth in an offer letter to warrantholders (the "Offer Letter") and in the cashless exercise election form (such exercise, a "Cashless Exercise" and such offer, the "Offer") sent to warrantholders on April 5, 2013. The 23,142,800 Warrants submitted for Cashless Exercise as of the close of business on May 3, 2013 represent 17.5% of the number of Warrants outstanding as of April 5, 2013.

In addition, prior to the launch of the Offer, Fairfax Financial Holdings Ltd. ("Fairfax") and Victor J. Bertrand, Sr. ("Mr. Bertrand") exercised the full amount of the Warrants they held and Trimark Investments ("Trimark", together with Fairfax and Mr. Bertrand, the "Supporting Holders") exercised 33,978,000 of the Warrants it held. When the number of Warrants exercised by the Supporting Holders is added to the number of Warrants submitted for Cashless Exercise pursuant to the Offer as of the close of business on May 3, 2013, the total number of Warrants exercised as of such date is 131,472,800, which represents 54.8% of the total number of Warrants outstanding as of March 26, 2013.

The Corporation wishes to remind warrantholders that the Offer will expire at 5:00 p.m. (Eastern Time) on May 10, 2013 (the "Expiration Time"). Warrants may not be submitted for Cashless Exercise pursuant to the Offer after the Expiration Time.

For more information on the terms and conditions of the Offer and the five-day volume weighted average trading price ("VWAP") of the common shares on the Toronto Stock Exchange, warrantholders may access the "Warrantholder Information" section of the Corporation's website at the following address: http://www.megabrands.com/sites/all/themes/mega/pdf/WARRANTHOLDER_INFORMATION.pdf. The VWAP for the purpose of a Cashless Exercise on May 6, 2013 is $15.15.

Registered holders of Warrants that wish to submit their Warrants for Cashless Exercise pursuant to the Offer must ensure that all requirements for such submission have been satisfied on or prior to the Expiration Time.

Beneficial owners of Warrants, whose Warrants are registered in the name of a brokerage firm, bank or trust company or other intermediary, should promptly contact their intermediaries and obtain and follow their intermediaries' instructions with respect to the applicable submission procedures and deadlines, which may be earlier than the deadlines that are described above and set out in the Offer Letter.

If you have any questions or require assistance with the Cashless Exercise of your Warrants, or if you wish to obtain a copy of the Offer Letter and the cashless exercise election form transmitted therewith, please contact:

CST Phoenix Advisors
North American Toll Free Phone: 1-800-398-1272
Banks, Brokers and collect calls: 201-806-2222
Toll Free Facsimile: 1-888-509-5907
Email: inquiries@phoenixadvisorscst.com

The preceding statements are only a summary of certain provisions of the Offer Letter, cashless exercise election form transmitted therewith, Warrant Indenture and related amendments, and are qualified in their entirety by the full text of each, copies of which will be made available electronically under the System for Electronic Document Analysis and Retrieval (SEDAR) System (www.sedar.com).

The Offer will not be made to, and cashless exercise election forms will not be accepted from or on behalf of, warrantholders in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction.

About MEGA Brands Inc.

MEGA Brands Inc. is a trusted family of leading global brands in construction toys, games & puzzles, arts & crafts and stationery. They offer engaging creative experiences for children and families through innovative, well-designed, affordable and high-quality products. Visit http://www.megabrands.com for more information.

The MEGA logo, Mega Bloks, Rose Art, MEGA Puzzles, MEGA Games and Board Dudes are trademarks of MEGA Brands Inc. or its affiliates.

Forward-Looking Statements

All statements in this press release that do not directly and exclusively relate to historical facts constitute "forward-looking information" within the meaning of applicable Canadian securities laws These statements represent the Corporation's intentions, plans, expectations and beliefs. Readers are cautioned not to place undue reliance on these forward-looking statements. Forward-looking information and statements are based on a number of assumptions and involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by them, including, but not limited to risks, assumptions and uncertainties described in the Corporation's MD&A for the year ended December 31, 2012, which are available at www.sedar.com and on the Corporation's Web site. The Corporation disclaims any intention or obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by applicable law.

SOURCE: MEGA BRANDS INC.

For further information:

Financial Analysts:

Peter Ferrante
Vice-President and Chief Financial Officer
Tel: (514) 333-5555 ext. 2283

Media: 

Mark Girgis
Vice-President, General Counsel and Corporate Secretary
Tel: (514) 333-5555 ext. 2897

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