Neo Material Technologies responds to Amended Pala Offer and waives proxy deposit deadline for meeting

    TORONTO, April 22 /CNW/ - Neo Material Technologies Inc. ("Neo" or the
"Company") (TSX: NEM) announced today that its Special Committee, in
consultation with its independent financial and legal advisors, will consider
and evaluate the amended terms of the unsolicited partial offer (the "Amended
Pala Offer") by Pala Investments Holdings Limited ("Pala"), and will make a
recommendation to the Board of Directors that is in the best interests of the
Company and its shareholders.
    Pala's increased offer price of Cdn.$1.70 per share represents a mere
1.8% premium to the closing price of Cdn.$1.67 per Neo share on the Toronto
Stock Exchange ("TSX") on April 21, 2009, the date Pala announced its amended
offer. Today's closing price was Cdn.$1.68 per Neo share.
    The Special Committee believes that the Amended Pala Offer, pursuant to
which Pala is seeking a 29.9% interest, effectively constitutes an acquisition
for control of Neo given historical shareholder voting levels. The Special
Committee, in consultation with its financial advisors, also continues to
believe that there is sufficient liquidity in the trading of Neo's shares.
Since Pala first announced its intention to make a partial offer, in excess of
12 million Neo shares have traded on the TSX.
    The expiry date of the Amended Pala Offer is May 15, 2009. Shareholders
are advised not to take any action until the Special Committee has fully
reviewed the amended offer and the Board of Directors has issued a formal
recommendation to shareholders.
    As the Amended Pala Offer was announced less than 24 hours prior to the
proxy deposit deadline in respect of the annual and special meeting of
shareholders which will take place this Friday, April 24, 2009, the Company
has confirmed that the proxy deposit deadline has been waived to permit
shareholders to deposit proxies until the commencement of the meeting.
    The Board of Directors continues to recommend that shareholders vote FOR
the new shareholders rights plan (the "New Rights Plan"), which would prevent
Pala's attempt to acquire effective control of Neo through a partial bid. If
approved, the New Rights Plan will only remain in effect until the 2010 annual
meeting of shareholders.

    About Neo Material Technologies

    Neo Material Technologies is a producer, processor and developer of
neodymium-iron-boron magnetic powders ("Neo Powders"), rare earths and
zirconium based engineered materials and applications through its Magnequench
and AMR Performance Materials business divisions. These innovative products
are essential in many of today's high technology products. Magnequench's Neo
Powders are used in the production of bonded magnets for micro motors,
precision motors, sensors and other applications requiring high levels of
magnetic strength, flexibility, small size and reduced weight. Rare earth and
zirconium applications include catalytic converters, computers, television
display panels, optical lenses, mobile phones and electronic chips. The
Company is headquartered in Toronto, Canada and has approximately 1,300
employees in 15 locations, across 10 countries.

    %SEDAR: 00002061E

For further information:

For further information: Questions may be directed to Neo's information
agent, Laurel Hill Advisory Group, toll-free at 1-888-812-9183

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Neo Material Technologies Inc.

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