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Press release from CNW Group

Empire Closes Subscription Receipts Offering

Wednesday, July 31, 2013

Empire Closes Subscription Receipts Offering

08:25 EDT Wednesday, July 31, 2013

NOT FOR DISTRIBUTION IN THE U.S.

STELLARTON, NS, July 31, 2013 /CNW/ - Empire Company Limited ("Empire" or the "Company") (TSX: EMP.A) is pleased to announce today that it has closed its previously announced offering (the "Offering") of 21,100,000 subscription receipts (the "Subscription Receipts") at a price of $76.00 per Subscription Receipt. The syndicate of underwriters, co-led by Scotiabank and BMO Capital Markets and including CIBC, National Bank Financial Inc., RBC Capital Markets, TD Securities Inc., Desjardins Securities Inc. and Barclays Capital Canada Inc. (the "Underwriters") elected to exercise their over-allotment option in full at closing, resulting in a total of 24,265,000 Subscription Receipts being issued today by Empire for gross proceeds of $1,844,140,000.

Paul D. Sobey, President and CEO of Empire stated, "We are very pleased to have successfully completed the closing of the Subscription Receipts Offering.  This equity financing is an important component of the overall acquisition financing for Canada Safeway Limited."

The net proceeds from the sale of the Subscription Receipts will be held in trust by a subscription receipt agent pending the satisfaction of the conditions to closing (the "Escrow Release Condition") in connection with Sobeys Inc.'s ("Sobeys") acquisition of substantially all of the assets and select liabilities of Canada Safeway Limited (the "Acquisition"). If the Escrow Release Condition is satisfied on or before 5:00 p.m. (Eastern Standard Time) on March 31, 2014 (the "Escrow Release Deadline"), Empire will use the net proceeds from the Offering to (i) partially fund its expected $1.65 billion equity investment in Sobeys and (ii) purchase $150 million of Crombie Class B Limited Partnership units (as announced on July 24, 2013), with any remaining funds to be used by Empire to repay debt and for general corporate purposes. Sobeys will in turn use the proceeds from such equity investment by Empire to partially fund the Acquisition.

Each Subscription Receipt will entitle the holder thereof to receive, on satisfaction of the Escrow Release Condition, and without payment of additional consideration or further action, one Non-Voting Class A share of Empire and, if applicable, a payment equal to any cash dividends declared by Empire for which record dates have occurred during the period from the date hereof to and including the date immediately preceding the date on which the Non-Voting Class A shares are issued.

If the Escrow Release Condition is not satisfied on or before the Escrow Release Deadline or if Empire delivers to the Underwriters and the subscription receipt agent a notice that the Acquisition has been terminated, holders of Subscription Receipts shall be entitled to receive for each Subscription Receipt an amount equal to the full subscription price plus their pro rata entitlements to the interest earned therein.

FORWARD-LOOKING INFORMATION AND OTHER MATTERS

This news release contains forward-looking information about the Offering, the expected use of proceeds from the Offering and the Acquisition. The forward-looking statements in this news release are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from current expectations, including those related to the business generally, which are set out in materials filed with the securities regulatory authorities in Canada from time to time, including the risk section of the annual Management's Discussion and Analysis report, Annual Information Form and the short form prospectus.  No assurance can be given that the Offering or the Acquisition will be completed or the timing of same.  Some of the factors that could affect the closing of the Offering and the Acquisition include the need to obtain applicable regulatory approvals and the requirement to satisfy other closing conditions.

The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company other than as required by applicable securities laws.

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any offer, solicitation or sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

ABOUT EMPIRE

Empire Company Limited (TSX: EMP.A) is a Canadian company headquartered in Stellarton, Nova Scotia.  Empire's key businesses include food retailing and related real estate.  With over $17 billion in annual sales and approximately $7.1 billion in assets, Empire and its subsidiaries directly employ approximately 47,000 people.

Additional financial information relating to Empire, including the Company's Annual Information Form, can be found on the Company's website at www.empireco.ca or at www.sedar.com.

SOURCE: EMPIRE COMPANY LIMITED

For further information:

Paul V. Beesley
Executive Vice President & Chief Financial Officer
Empire Company Limited
(902) 755-4440

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