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Cossette issues shareholder rights plan in response to Cosmos bid.

Cossette of Quebec City has enacted a shareholder rights plan designed to prevent what it describes as "a creeping takeover of the company." The plan is in response to the recent stock purchase offer from Cosmos Group. The rights included this plan come into effect when a party attempts to acquire 20% or more of the company's shares without meeting certain provisions. These provisions include a bid duration of at least 60 days, that the bid be made to all shareholders, that the bid be for all the shares a shareholder may own, and that the bid may only proceed if at least 50% of the company's shares are tendered. If these provisions are not met, shareholders can purchase subordinate voting shares of the company at half the market price. Members of the Cosmos Group, as well as some members and former members of Cossette's management, are considered grandfathered-in and excluded from this plan, as they already collectively own more than 20% of the shares. These include Claude Lessard, Pierre Delagrave, François Duffar and Georges Morin.

In related news, Cossette has retained BMO Capital Markets as its financial advisor on the Cosmos bid. Ogilvy Renault has been retained as legal advisor to the special committee that is evaluating the offer. Fasken Martineau is acting as legal advisor to the company. The committee and the agency's board of directors have recommended that shareholders defer any action until their evaluation is complete.

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