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Press release from PR Newswire

MEGA Brands Announces Expiry and Results of Cashless Exercise Offer in Respect of Warrants

Monday, May 13, 2013

MEGA Brands Announces Expiry and Results of Cashless Exercise Offer in Respect of Warrants

19:36 EDT Monday, May 13, 2013

MONTREAL, May 13, 2013 /PRNewswire/ - MEGA Brands Inc. (TSX: MB) (the "Corporation") announced today the expiry of its cashless exercise offer in respect of its common share purchase warrants (the "Warrants") which commenced on April 5, 2013 with the mailing of an offer letter and a cashless exercise election form to warrantholders (the "Offer"). The Offer expired at 5:00 p.m. (EST) on May 10, 2013. A total of 46,832,264 Warrants were exercised on a cashless basis pursuant to the Offer, representing 35.6% 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. As of May 13, 2013, a total number of 108,310,000 Warrants were exercised on a cash basis since the Offer was first announced, including the number of Warrants exercised by the Supporting Holders. When the number of Warrants exercised on a cash basis is added to the total number of Warrants submitted for Cashless Exercise pursuant to the Offer, the aggregate number of Warrants exercised is 155,142,264, which represents 64.7% of the total number of 239,844,000 Warrants outstanding as of March 26, 2013, the date the Offer was first announced. Consequently, there are 84,701,736 Warrants outstanding as of May 13, 2013.

The Corporation used proceeds from the above-mentioned exercise of Warrants together with a scheduled repayment to reduce the outstanding principal amount of its debentures by CA$60.9 million. As a result, going forward, the Corporation's pre-tax cash interest expense will be reduced by approximately CA$6.2 million annually, representing CA$0.22 per diluted common share on a pre-tax basis. The principal amount of debentures outstanding has been reduced to CA$53.7 million as at April 15, 2013, compared to CA$141.7 million as at March 30, 2010 when they were issued.

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 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 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.


For further information: <p> </p> <p> <b>Financial Analysts</b>: </p> <p> Peter Ferrante<br/> Vice-President and Chief Financial Officer<br/> Tel: (514) 333-5555 ext. 2283 </p> <p> <b>Media:</b> </p> <p> Mark Girgis<br/> Vice-President, General Counsel and Corporate Secretary<br/> Tel: (514) 333-5555 ext. 2897 </p>

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