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Canada's Couche-Tard to Acquire Dairy Mart Stores

HUDSON, Ohio - Dairy Mart Convenience Stores Inc. on Thursday said it has executed an asset purchase agreement through which, subject to bankruptcy court approval and potential other bids, Alimentation Couche-Tard Inc., the ninth largest convenience retailer in North America, would acquire a substantial majority of Dairy Mart's stores.

Under the terms of the asset purchase agreement, Couche-Tard would acquire the majority of Dairy Mart's stores for approximately $80 million in cash (subject to adjustments) and the assumption of certain liabilities. Couche-Tard will also manage any stores that it does not acquire, with the intention of eventually selling or closing those stores on behalf of Dairy Mart. Couche-Tard has indicated it intends to hire all of Dairy Mart's store-level employees and a majority of non-store level employees.

"Couche-Tard is a strategic, well-capitalized, growth-oriented operator of convenience stores. Once final, this agreement can accelerate the progress already made by the hardworking people of Dairy Mart. This agreement speaks to the success of our employees' efforts, and to the essential viability and value of our business and the Dairy Mart brand name," said Gregory G. Landry, president and CEO of Dairy Mart.

The execution of this agreement commences the auction process required under Section 363 of the U.S. Bankruptcy Code, in which other interested parties may submit bids for Dairy Mart. Under the proposed bidding procedures, other interested parties may submit competing bids through Dairy Mart's investment banker, Houlihan, Lokey, Howard & Zukin. Although bidding procedures and deadlines have not yet been established by the court, Dairy Mart anticipates that an auction will be held for qualified bidders sometime in late July or early August, with a closing soon thereafter.

Landry said that the purchase agreement with Couche-Tard has received the approval of Dairy Mart's Board of Directors and support from Dairy Mart's Official Committee of Unsecured Creditors.

Dairy Mart and substantially all of its subsidiaries filed voluntary petitions for protection under chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York on September 24, 2001. During the chapter 11 process, Dairy Mart and its stores continue to operate normally.
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