Empire Company and Sobeys announce going private transaction

    - Empire agrees to pay $58.00 cash per Sobeys share to minority
    - Price represents a premium of 53.4 percent to the last closing price of
      Sobeys' shares
    - Transaction has the unanimous support of Sobeys' Board of Directors

    STELLARTON, NS, April 26 /CNW/ - Empire Company Limited ("Empire") and
Sobeys Inc. ("Sobeys") jointly announced today that they have entered into an
arrangement agreement pursuant to which Empire will acquire all of the
outstanding common shares of Sobeys that it does not currently own at a price
of $58.00 per share. Empire currently owns 72.1 percent of the issued and
outstanding shares of Sobeys. The transaction values the shares not currently
owned by Empire at approximately $1.06 billion.
    The Board of Directors of Sobeys has received and accepted the
recommendation from an independent committee of its directors, formed for the
purposes of evaluating a potential going private transaction, to enter into
the arrangement agreement and recommend that shareholders of Sobeys accept the
proposed arrangement. In making its recommendation, the independent committee
considered, among other things, the opinion of its independent valuator,
RBC Capital Markets. As part of the process and in accordance with applicable
regulatory requirements, RBC Capital Markets has delivered a formal valuation
to the independent committee that determined the fair market value of the
shares of Sobeys, as at April 26, 2007, to be in the range of $56 to
$64 per share. RBC Capital Markets has also provided its opinion that, as at
April 26, 2007, the consideration to be paid to Sobeys' shareholders, other
than Empire and its affiliates, is fair from a financial point of view.
    "We believe that Empire's shareholders will be best served by 100 percent
ownership of Sobeys," commented Paul D. Sobey, President and Chief Executive
Officer of Empire. "Considering the very challenging Canadian retail
landscape, this all cash transaction represents an excellent opportunity for
Sobeys' shareholders to realize a significant premium on their shares. For
shareholders of Empire, the transaction will be immediately accretive. As we
proudly mark our 100th year in the retail food business, this transaction
underscores our clear and unwavering focus on our core retail food and related
real estate development."
    Peter C. Godsoe, Chairman of Sobeys remarked: "The independent committee
and the full Board of Sobeys Inc. are unanimously supportive of the Empire
arrangement. This transaction represents excellent value for our
    Bill McEwan, President and Chief Executive Officer of Sobeys, commented:
"Since Sobeys' initial public offering in December 1998, Empire has been a
very supportive and committed shareholder. We are pleased with Empire's
proposal to acquire the remaining common shares of Sobeys and look forward to
continuing with our focus to grow a healthy and sustainable retail food
    The transaction, if approved, will proceed by way of a court approved
plan of arrangement pursuant to the Nova Scotia Companies Act. The Empire plan
will be subject to customary conditions for approval of a plan of arrangement,
including the favourable vote of a majority of Sobeys' shareholders, other
than Empire and related parties, represented at a meeting of Sobeys'
shareholders called to consider the transaction. The Arrangement Agreement may
be terminated by Empire at any time before or after the holding of the
shareholder vote and before the filing of the final Court order. In accordance
with applicable corporate and securities regulatory requirements, the terms
and conditions of the plan of arrangement will be disclosed in an information
circular which Empire expects will be reviewed by the Supreme Court of Nova
Scotia next week and mailed to all registered shareholders of Sobeys shortly
thereafter. The information circular will contain the recommendation of
Sobeys' Board of Directors that the shareholders approve the transaction and
will also include the formal valuation prepared by RBC Capital Markets.
    Scotia Capital Inc. is acting as financial advisor to Empire.

    About Empire

    Empire Company Limited (TSX: EMP.A) is a diversified Canadian company
headquartered in Stellarton, Nova Scotia. Empire's key businesses include food
retailing, real estate, and corporate investment activities. With
approximately $13.2 billion in annual revenue and $5.1 billion in assets,
Empire employs approximately 37,000 people directly and through its
subsidiaries. More information about Empire Company can be found at

    About Sobeys

    Sobeys Inc., (TSX: SBY) headquartered in Stellarton, Nova Scotia, is a
leading national grocery retailer and food distributor. Sobeys owns or
franchises more than 1,300 stores in all 10 provinces under retail banners
that include Sobeys, IGA, Foodland, Price Chopper food stores and Lawton's
Drug Stores. The Company is committed to providing the most worthwhile
experience for its customers, employees, franchises, suppliers and
shareholders. More information on Sobeys can be found at www.sobeys.com.

    Conference Call Invitation

    Empire Company will hold a conference call on Thursday, April 26, 2007
beginning at 4:30 p.m. Eastern Daylight Time (5:30 p.m. Atlantic Daylight
Time). To join this conference call dial 1-800-591-7539 or 1-416-644-3423. You
may also listen to a live audio web cast of the conference call by visiting
either Empire's web site located at www.empireco.ca or Sobeys' web site
located at www.sobeys.com. Replay will be available by dialing 1-877-289-8525
or 1-416-640-1917 and entering passcode 21228683# until midnight May 3, 2007,
or on Empire's or Sobeys' respective web sites.

    Forward-looking Statements

    This news release contains "forward-looking statements" regarding a
potential going private transaction. Readers are cautioned not to place undue
reliance on such forward-looking statements. Actual results and developments
may differ materially from those contemplated by these statements depending
on, among others, the risks that Empire's proposal will be unsuccessful for
any reason and it will not be able to obtain the required approvals or
clearance from regulatory authorities.
    The forward-looking statements contained in this document are made as of
the date of this document and neither Empire nor Sobeys undertake any
obligation to update publicly or revise any of the forward-looking statements
contained in this news release, except as required by law.

    Legal Notice

    This news release does not constitute an offer to purchase or a
solicitation of an offer to sell securities. Shareholders are advised to
review any relevant documents that may be filed with securities regulatory
authorities by Empire and Sobeys as they will contain important information,
including full details of the proposed transaction and its terms and

For further information:

For further information: Stewart H. Mahoney, Vice President Treasury &
Investor Relations, Empire Company Limited, (902) 928-1725; Andrew Walker,
Vice President, Communications & Corporate Affairs, Sobeys Inc., (902)
752-8371 ext. 2138

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