Newco Bancorp Inc. Announces Going-Private Transaction

TORONTO, ONTARIO--(Marketwired - March 28, 2016) - Newco Bancorp Inc. (the "Company") announced on March 18, 2016 that it has entered into an Amalgamation Agreement (the "Agreement") with Munbancorp Realty Inc. ("Munbancorp"), pursuant to which the Company will be taken private by way of an amalgamation (the "Amalgamation") between Munbancorp and the Company.

Munbancorp is a corporation controlled by the Rotstein family, who are the controlling shareholders of the Company. As at March 17, 2016, the Company had outstanding 611,904 common shares and 3,357,871 Class A non-voting shares (collectively, the "Shares"). Together, the Rotstein family controls a total of 443,504 of the Company's common shares (representing 72.48% of the issued and outstanding common shares) and a total of 2,583,000 of the Company's Class A non-voting shares (representing approximately 76.92% of the issued and outstanding Class A non-voting shares).

Pursuant to the Amalgamation, holders of all of the issued and outstanding Shares (other than Munbancorp and any shareholders who dissent from the Amalgamation) will receive one redeemable preferred share of the amalgamated company for each Share held immediately prior to the Amalgamation. Following completion of the Amalgamation, each redeemable preferred share will be redeemed for a price of Cdn$0.39 per Share. The redemption price per Share was calculated on the basis of the anticipated net asset value per Share on the effective date of the Amalgamation.

The Amalgamation, if consummated, will constitute a "business combination" for the purposes of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Pursuant to MI 61-101, the Amalgamation is subject to the approval of the "majority of the minority" shareholders. For this purpose, the votes of the Rotstein family and any other interested parties will be excluded. The Amalgamation will be exempt from the formal valuation requirements of MI 61-101 on the basis that the Shares are not listed on any senior stock exchange.

The independent directors on the Company's board evaluated and approved the Amalgamation and the Agreement (with the Rotsteins abstaining). In determining that the terms of the proposed transaction are in the best interests of Newco and fair to the minority shareholders and in recommending that the Shareholders vote in favour of the Amalgamation, the independent directors considered, among other things, that the Shares are very illiquid and that the transaction will result in an immediate cash payment to Shareholders without brokerage costs.

The Company has convened a special meeting of shareholders (the "Meeting") which will take place on April 15, 2016 for shareholders to consider and, if thought appropriate, to approve the Amalgamation. The completion of the Amalgamation is subject to a number of conditions precedent that are customary for this type of transaction, including, but not limited to, that (i) the Amalgamation be approved by not less than 66 2/3% of the votes cast in person or by proxy by each class of shareholders, (ii) the Amalgamation be approved in accordance with MI 61-101 as described above, and (iii) dissent rights in respect of the Amalgamation shall not have been exercised by shareholders holding more than 3% of the issued and outstanding Shares.

Assuming the satisfaction of all conditions, the proposed transaction is expected to close as soon as practicable following the meeting. However, there can be no assurances that the Amalgamation will be completed.

Details of the terms and conditions of the Amalgamation have been mailed to the shareholders and are available for download at www.sedar.com.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

Forward-looking statements or information are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements or information, including, without limitation, risks and uncertainties relating to the consummation of the definitive agreements with respect to the Amalgamation and the completion of the Amalgamation or related transactions. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements or information. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information. The Company disclaims any intent or obligation to update forward-looking statements or information except as required by law, and the reader is referred to the full discussion of the Company's business contained in the Company's reports filed with the securities regulatory authorities in Canada at www.sedar.com.