Contrans Proposes Conversion To Single Share Class

 (TSX:CSS)

WOODSTOCK, ON, April 4, 2012 /PRNewswire/ - Contrans Group Inc. (the "Company") announced today that it will present at an annual and special meeting (the "meeting") to be held in Toronto, Canada on May 14, 2012, a proposal to reorganize its dual class share structure into one class of common shares, each carrying a single vote (the "Reorganization Proposal"). In connection with, and conditional upon the shareholders of the Company voting for the Reorganization Proposal, at the meeting shareholders will also be asked to approve the adoption of a shareholder rights plan (the "Rights Plan"), subject to acceptance by the Toronto Stock Exchange.

Reorganization Proposal

Under the terms of the Reorganization Proposal, each Class B Multiple Voting Share of the Company would be converted into 1.727 Class A Subordinate Voting Shares, and following this conversion, all Class A Subordinate Voting Shares would be reclassified as common shares. The Reorganization Proposal would result in a dilution of approximately 3.17% to the current holders of Class A Subordinate Voting Shares of the Company.

To become effective, the Reorganization Proposal must be approved by holders of shares of the Company entitled to at least 66 2/3% of the votes attached to both classes of shares which are voted at the meeting and, in separate class votes, the holders of Class A Subordinate Voting Shares and Class B Multiple Voting Shares entitled to at least 66 2/3% of the votes attached to each class of such shares which are voted at the meeting. Although the Reorganization Proposal is not required by law to be approved by the holders of a majority of the independent holders of Class A Subordinate Voting Shares of the Company, this approval will be sought at the meeting and the transaction will not proceed without receipt of this approval.

The Class B Multiple Voting Shares of the Company are held by Stan Dunford, the Chairman and Chief Executive Officer of the Company, and Robert Burgess, a director of the Company, together with certain persons associated with them (the "Class B Shareholders"). The Class B Shareholders have agreed to approve the terms of the Proposed Reorganization, including voting both classes of shares held by them in favour of the transaction. The Class B Shareholders were advised by legal counsel independent of those of the Company.

There are 1,467,724 Class B Multiple Voting Shares and 32,226,135 Class A Subordinate Voting Shares outstanding. In the event the Reorganization Proposal is approved and implemented, an aggregate of 34,761,250 common shares of the Company will be issued and outstanding, 6,206,866 or approximately 17.86% of which will be held by Mr. Dunford and persons associated with him and 237,892 or approximately 0.68% of which will be held by Mr. Burgess and persons associated with him.

The Reorganization Proposal was initiated by independent directors of the Company together with certain executive officers of the Company other than Stan Dunford (the "Independent Management Group") who determined that it was worth exploring the feasibility of a conversion of the Class B Multiple Voting Shares.  Both the directors and the Independent Management Group were of the view that a restructuring of the capital of Contrans of the nature proposed would provide it with an enhanced ability to pursue its growth strategy and to issue equity from time to time on more favourable terms. More particularly, they were of the view that the implementation of the Reorganization Proposal would enhance the market acceptance and liquidity of the Company's shares, particularly among institutional shareholders which have periodically expressed concern with its dual class share structure.  In addition, the Independent Management Group noted that the North American trucking industry is consolidating, thereby creating attractive growth opportunities in the next few years. As part of this consolidation, the Company expects to be presented with interesting acquisition opportunities which may require it to issue equity either directly in connection with any acquisitions it undertakes or to raise the capital to do so. Implementation of the Reorganization Proposal is expected to allow the Company to pursue certain acquisition opportunities that might not otherwise be available to it due to its current share structure.

The Board of Directors of the Company, other than Messrs. Dunford and Burgess (the "Independent Board") engaged Crosbie & Company Inc. ("Crosbie") to review the matter and have been advised by Crosbie that in its opinion the Reorganization Proposal would be fair, from a financial point of view, to the holders of Class A Subordinate Voting Shares. The Independent Board also reviewed the record of negotiations conducted by the Independent Management Group with the Class B Shareholders and were satisfied that the Reorganization Proposal reasonably reflected the best available conversion rate for the holders of Class A Subordinate Voting Shares. As a result of these deliberations, taking into account the opinion of Crosbie, the Independent Board has concluded that the Reorganization Proposal is in the best interests of the Company and its holders of Class A Subordinate Voting Shares and recommends its approval.

In commenting on the Proposed Reorganization, Mr. Dunford stated that "I am of the view that the reorganization of the share capital will be of benefit to the Company and its shareholders in that it will unlock further share value and create the potential for accelerated growth." In commenting on his personal commitment to the Company, he indicated that "I plan to remain the Chairman and Chief Executive Officer, have agreed to extend my employment agreement for a term of five years from the date of the implementation of the Reorganization Proposal and intend to continue to maintain my significant investment in the Company."

Shareholder Rights Plan

The Company also proposes to establish the Rights Plan in order to address the possibility of an unsolicited take-over bid for the common shares of the Company (a "Bid") following the implementation of the Reorganization Proposal. In the context of the elimination of the Company's dual class share structure, the Independent Board believes that it is in the best interest of the Company and its shareholders for the Company to adopt the Rights Plan. The fundamental objectives of the proposed Rights Plan are to provide adequate time for the Board of Directors and the Company's shareholders to assess a Bid, provide the Board of Directors of the Company with sufficient time to explore and develop alternatives for maximizing shareholder value, provide the Company's shareholders with an equal opportunity to participate in the Bid and protect shareholders from unfair, abusive or coercive take-over tactics. Current securities legislation only requires a take-over offer to remain open for 35 days and the Independent Board believes that this period may be insufficient for shareholders to evaluate a Bid or for the Board of Directors to pursue alternatives which could maximize shareholder value and make informed recommendations to shareholders. The Rights Plan is similar to shareholder rights plans adopted by other Canadian companies.

In order to become effective, the Rights Plan must be approved by the Toronto Stock Exchange and a majority of the shares represented and voted at the meeting (prior to the implementation of the Proposed Reorganization). The Rights Plan will only be considered if the Proposed Reorganization is approved by shareholders and the Proposed Reorganization will not be implemented unless the Rights Plan is also approved.

Further information regarding the Proposed Reorganization and the Rights Plan, including the proposed text of the Rights Plan, will be provided in the Management Information Circular which will be mailed to holders of Class A Subordinate Voting Shares of the Company in connection with the meeting. In particular, the Management Information Circular will outline in greater detail the reasons for the recommendation of the Independent Board and the basis on which it determined that the Reorganization Proposal is in the best interests of the Company and its holders of Class A Subordinate Voting Shares.

Contrans Group Inc. is one of Canada's leading providers of freight transportation services to shippers located in Canada as well as in the eastern, mid-western and southern United States.

FORWARD-LOOKING STATEMENTS

The press release contains certain forward-looking statements that involve a number of risks and uncertainties. Forward-looking statements relate to future events or future performance and include, but are not limited to, changes in government regulations regarding weights and dimensions of highway equipment, the age and condition of the transportation fleet and the growth of Contrans' business. Often, but not always, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue" or the negative of these terms or other comparable terminology. Such statements reflect the current views and estimates of management of Contrans with respect to future events, as of the date such statements are made, and they involve known and unknown risks and uncertainties which may cause actual events or results to differ materially from those expressed or implied by forward-looking statements. In evaluating these statements, readers should specifically consider factors such as the risks outlined under "Risk Factors" in Contrans' Annual Information Form, which is available at www.sedar.com. Although Contrans has attempted to identify important factors that could cause actual events, actions or results to differ materially from those described in the forward-looking statements, there may be other factors that cause such events, actions or results to differ. Contrans is under no obligation (and expressly disclaims any such obligation) to update forward-looking statements if circumstances or management's views or estimates change. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements.

SOURCE Contrans Group Inc.