K-Bro Linen Inc. Adopts Shareholder Rights Plan

/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES/

(TSX: KBL)

EDMONTON, April 23, 2019 /CNW/ - K-Bro Linen Inc. ("K-Bro" or the "Corporation") announces that the Board of Directors of the Corporation has approved the adoption of a shareholder rights plan (the "Rights Plan") pursuant to a shareholder rights plan agreement entered into with AST Trust Company (Canada), as Rights Agent, dated April 23, 2019 (the "Effective Date"). The Rights Plan is similar to shareholder rights plans adopted by other public companies. 

The Rights Plan has been conditionally accepted by the Toronto Stock Exchange (the "TSX"). While the Rights Plan is effective as of the Effective Date, it is subject to shareholder ratification within six months of its adoption. The Rights Plan will be submitted for ratification by the Corporation's shareholders at the upcoming 2019 annual and special meeting of the Corporation's shareholders (the "Meeting"). If the Rights Plan is not ratified by the Corporation's shareholders, it will automatically terminate. If ratified by shareholders, the Rights Plan will remain in effect until the close of the third annual meeting of shareholders following the Meeting.

The Rights Plan has been adopted to ensure, to the extent possible, that all shareholders of the Corporation are treated fairly in connection with any unsolicited take-over bid or other acquisition of control of the Corporation. The Rights Plan is not being adopted in response to any specific proposal to acquire control of the Corporation, and the Board is not aware of any pending or threatened take-over bid for the Corporation.

At the close of business on the Effective Date, one right (a "Right") will be issued and attached to each Common Share outstanding at that time. A Right will also be attached to each Common Share issued after the Effective Date. The issuance of the Rights will not change the manner in which shareholders trade their Common Shares. Subject to the terms of the Rights Plan, the Rights issued under the Rights Plan become exercisable only if a person (the "Acquiring Person"), together with certain related persons, acquires or announces its intention to acquire 20% or more of the Common Shares without complying with the "Permitted Bid" provisions of the Rights Plan. Upon the acquisition by an Acquiring Person of 20% or more of the Common Shares, each Right would, upon exercise, entitle a Rights holder, other than the Acquiring Person and certain related persons, to purchase common shares of the Corporation at a 50% discount to the market price at the time. At any time prior to the rights becoming exercisable, the Board may waive the operation of the Rights Plan with respect to certain events before they occur.

Under the Rights Plan, a "Permitted Bid" is a take-over bid made in compliance with the Canadian take-over bid regime. Specifically, a Permitted Bid is a take-over bid that is made to all shareholders, that is open for 105 days (or such shorter period as is permitted under the bid regime) and that contains certain conditions, including that no shares will be taken up and paid for unless 50% of the shares that are held by independent shareholders are tendered to the take-over bid.

The description of the Rights Plan in this press release is qualified in its entirety by the full text of the Rights Plan, which will be made available shortly under the Corporation's profile on SEDAR at www.sedar.com.

CORPORATE PROFILE

K-Bro is the largest owner and operator of laundry and linen processing facilities in Canada. K-Bro provides a comprehensive range of general linen and operating room linen processing, management and distribution services to healthcare institutions, hotels and other commercial accounts.  K-Bro currently operates nine processing facilities under three distinctive brands, including K-Bro Linen Systems Inc., Buanderie HMR and Les Buanderies Dextraze, in eight Canadian cities: Québec City, Montréal, Toronto, Regina, Edmonton, Calgary, Vancouver and Victoria.

Fishers, a wholly owned subsidiary of K-Bro, was established in 1900 and is an operator of laundry and linen processing facilities in Scotland, providing linen rental, workwear hire and cleanroom garment services to the hospitality, healthcare, manufacturing and pharmaceutical sectors. Fishers' client base includes major hotel chains and prestigious venues across Scotland and the North East of England. Fishers operates seven sites, including one depot, in Scotland and the North East of England with facilities in Cupar, Perth, Newcastle, Livingston, Inverness and Coatbridge.

Additional information regarding the Corporation including required securities filings are available on our website at www.k-brolinen.com and on the Canadian Securities Administrators' website at www.sedar.com; the System for Electronic Document Analysis and Retrieval ("SEDAR").

FORWARD LOOKING STATEMENTS 

This press release contains forward-looking information that represents internal expectations, estimates or beliefs concerning, among other things, future activities or future operating results and various components thereof. The use of any of the words "anticipate", "continue", "expect", "may", "will", "project", "should", "believe", and similar expressions suggesting future outcomes or events are intended to identify forward-looking information.  Statements regarding such forward-looking information reflect management's current beliefs and are based on information currently available to management.

All forward-looking information in this press release is qualified by these cautionary statements.  Forward-looking information in this press release is presented only as of the date made. Except as required by law, K-Bro disclaims any intention or obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances.

SOURCE K-Bro Linen Inc.

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