Russell Breweries Inc.

Russell Breweries Inc.

June 08, 2007 08:00 ET

Russell Breweries Inc. Secures Lock Up Agreement With Major Shareholder of Fort Garry Brewery Ltd. in Favour of Amalgamation Offer

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 8, 2007) - Russell Breweries Inc. ("the Company" or "Russell") (TSX VENTURE:RB) announced on May 28, 2007 that it entered into a Letter of Intent with Fort Garry Brewing Company Ltd. ("Fort Garry") to acquire all of the preferred and common shares of Fort Garry through a Plan of Amalgamation.

Further to the announcement of May 28, 2007, the Company is pleased to announce that it has since entered into a lock-up agreement with ENSIS Growth Fund Inc. ("ENSIS"). Under the lock-up agreement, ENSIS has agreed to vote all of its common shares of Fort Garry in favour of the transaction. ENSIS currently owns 1,071,675 common shares of Fort Garry, representing approximately 21.5% of the outstanding common shares.

Terms of the Letter of Intent include the purchase of all outstanding common shares and preferred shares of Fort Garry. Common shareholders of Fort Garry will have the option to receive for each Fort Garry common share, either; (a) one common share of Russell; or (b) one half of one common share of Russell plus $0.20 cash; or (c) $0.40 cash. The preferred shareholders will be offered cash for the par value of their shares plus any accrued redemption premium and dividends. Russell and Fort Garry have agreed to complete due diligence and negotiate toward the signing of a Definitive Agreement within thirty days. Subject to the signing of the Definitive Agreement, the transaction is subject to Fort Garry shareholder approval and regulatory approval of the TSX Venture Exchange.

Brian Harris, Chief Executive Officer of Russell, commented, "It is encouraging to have secured the support of Fort Garry's largest shareholder, ENSIS, for our proposed transaction. ENSIS sees a compelling commercial logic in combining the two operating businesses to create a single strong, Western Canadian, brewery."

Russell Brewing Company produces premium draught beer for fine pubs and eateries located in British Columbia. In 2006, Russell was recognized as BC's fastest growing brewery. Using all natural ingredients and traditional beer-making techniques, Russell beer is brewed for people who love beer. Products include: Russell Cream Ale, Russell Pale Ale, Russell Honey Blonde Ale, Russell Extra Special Lager plus two seasonal brews, Russell Lemon Ale and Russell Winter Porter. Russell Brewing Company is a wholly owned subsidiary of Russell Breweries Inc. (TSX VENTURE:RB).

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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