MONTREAL, May 25, 2011 /CNW Telbec/ - MEGA Brands Inc. (TSX: MB) announced today that its Board of Directors has approved a consolidation of its issued and outstanding common shares on the basis of one (1) new common share for every twenty (20) common shares issued and outstanding. The number of warrants issued and outstanding will remain the same following the consolidation; however, both the share exchange rate and exercise price will change.

The share consolidation is expected to be completed by June 10, 2011 at the latest and is subject to the approval of the Toronto Stock Exchange. The precise effective date of the consolidation and the date upon which common shares will begin trading on a consolidation-adjusted basis will be announced at a later date.

At the Corporation's annual and special meeting held on June 10, 2010, the Corporation's shareholders voted to authorize the Board of Directors to proceed, at its discretion, with a share consolidation. The Board of Directors believes the share consolidation has the potential to improve the trading liquidity of the Corporation's common shares and their attractiveness as an investment.

''In recent months, we have reported improved financial results, transitioned to International Financial Reporting Standards, successfully completed a substantial debt buyback which reduced our long-term debt by CA$20.0 million and obtained amendments to our debenture terms which improve our financial flexibility,'' said Peter Ferrante, Chief Financial Officer of MEGA Brands. ''With these significant milestones behind us, this is an appropriate time to complete the share consolidation which our shareholders and the market have been expecting since last June.''

Following the consolidation, each shareholder will hold one (1) common share for every 20  pre-consolidation shares. No fractional shares will be issued. Any fractional shares resulting from the consolidation will be rounded down to the nearest whole number. Giving effect to the consolidation, the Corporation will have approximately 16,363,661 issued and outstanding common shares.

Information for Warrant Holders
The number of warrants issued and outstanding will remain unchanged at 243,844,000. Following the consolidation, warrant holders will be able to acquire one (1) common share in exchange for every twenty (20) warrants at an exercise price of $9.94 per common share at any time until March 30, 2015. The adjustment to the exercise price of the warrants reflects the terms of the warrant indenture.

Full exercise of the issued and outstanding warrants will result in the issuance of 12,192,200 common shares for gross proceeds of approximately CA$121.2 million. Under the terms of the warrant indenture, such proceeds will be used to purchase the Corporation's debentures, of which the principal amount currently outstanding is approximately CA$121.7 million.

Additional information
The Corporation's Transfer Agent, CIBC Mellon Trust Company, will mail letters of transmittal to registered shareholders following the effective date indicating the procedure to follow in order to exchange their current share certificates for new post-consolidation share certificates. Shareholders who hold their shares in ''street name'' will be contacted by their banks or brokers with any instructions.

The Corporation does not intend to seek new trading symbols for its common shares or warrants from the Toronto Stock Exchange in connection with this consolidation. Further information on the consolidation is contained in the Corporation's information circular dated May 13, 2010, a copy of which is available electronically at

About MEGA Brands
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.


For further information:

Investor Contact:

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

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