Shoppers Closes Secondary Offering

Certain institutional and other shareholders of Shoppers Drug Mart Corporation, Canada’s largest drug store group, completed a secondary offering of its common shares on June 12, 2002. The offering was for 28 million common shares for gross proceeds of $644 million. On June 19, 2002, the underwriters exercised their “green shoe” option in full, bringing the total offering size to 32.2 million common shares for gross proceeds of $740.6 million. The shares were also sold on a private placement basis to certain qualified U.S. investors. CIBC World Markets Inc. and Merrill Lynch Canada Inc. co-led the syndicate of underwriters, which included Scotia Capital Inc., RBC Dominion Securities Inc., Credit Suisse First Boston Securities Canada Inc., TD Securities Inc. and National Bank Financial Inc. Shoppers did not receive any of the proceeds from the secondary offering. This offering followed the initial public offering of Shoppers, which was completed in November 2001 and raised gross proceeds of $540 million. Combined with this secondary offering, the aggregate share sales of Shoppers in the past seven months have exceeded $1.28 billion.

Shoppers was represented in-house by Bryna Goldberg, executive vice-president and general counsel, and Richard Alderson, vice-president, legal affairs, and by Osler, Hoskin & Harcourt LLP in Toronto and Montreal, with a team comprised of Mark DesLauriers, Sivan Fox, Dana Easthope and Phil Lefko, assisted by Firoz Ahmed (tax) and Dominique Têtu. Gary Horowitz, Marisa Van Dongen and Simone Bono of Simpson Thacher & Bartlett in New York acted as U.S. counsel to the company.

The underwriters were represented by Kevin Gormely, in-house counsel, CIBC World Markets; and Marcelo Cosma, chief legal counsel, Merrill Lynch Canada; and by Torys LLP with a team that included Jamie Scarlett, Kevin Morris, Adam Armstrong and Tom Zverina, and Corrado Cardarelli and Ann Marie McGovern (tax) in Toronto, and Andy Beck and Geoff Gilbert in New York.

Lawyer(s)

Geoffrey G. Gilbert Philip R. Lefko Adam S. Armstrong Dominique Têtu Firoz Ahmed Ann Marie McGovern J. Mark DesLauriers Simone E. Bono Sivan A. Fox Tom Zverina Marisa D. Stavenas Dana Easthope Gary I. Horowitz Corrado Cardarelli James D. Scarlett Kevin M. Morris