Algonquin's Subsidiary, Pharmx Rexall Drug Stores Ltd. - Agreement for the Purchase of Three Drug Stores.

TORONTO--(BUSINESS WIRE)--March 1, 1996--ALGONQUIN MERCANTILE(TSE: AM ) Algonquin Mercantile Corporation ("Algonquin") announces that its subsidiary Pharmx Rexall Drug Stores Ltd. ("Rexall") has entered into an agreement for the purchase of three drug stores in Sault Ste. Marie representing annual sales of approximately $4.5 million. These profitable stores, which will be purchased March 29, 1996, bring Rexall's annual sales to more than $50 million, and continue an expansion of the chain into a new market area.

To finance the purchase, Algonquin and the other shareholders of Rexall have agreed to a $2 million rights issue in Rexall, to be funded pro rata and to be completed prior to the closing of the above mentioned store acquisition.

Separately, Algonquin announces that it has received an unsolicited expression of interest from a third party wishing to purchase Rexall, and has entered into discussions to explore further this interest. The Algonquin board has authorized Michael F. Blair, president of Algonquin, to negotiate with the third party within certain parameters which, if met, would result in the sale of Rexall on terms satisfactory to Algonquin. An essential element of any such sale would be the purchasers commitment to the retail drug industry and the continued employment of the managers and employees whose efforts have made Rexall a growing, profitable drug chain.

Algonquin is a public company listed on the Toronto Stock Exchange and trading under the stock symbol AM.

CONTACT: Algonquin Mercantile Corporation

Winston R. Ash, 905/660-7688