Dairy Mart Accepts Purchase Offer From Canadian Retailer Couche-Tard; Agreement To be Filed With Court Initiates Auction Process; Other Bids are Possible.

Business Editors

HUDSON, Ohio--(BUSINESS WIRE)--June 6, 2002

Dairy Mart Convenience Stores, Inc. (Dairy Mart) today announced that it has executed an asset purchase agreement through which, subject to bankruptcy court approval and potential other bids, Alimentation Couche-Tard Inc. (Couche-Tard), 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.

Gregory G. Landry, president and chief executive officer of Dairy Mart, said, "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."

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.

Upon closing of the sale, a portion of the proceeds will be used to retire the company's debtor-in-possession (DIP) loan facility and the remaining proceeds will be used to fund other creditor and administrative claims. The company expects that recoveries associated with this transaction will not result in any recoveries to shareholders.

As previously announced, 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. Since that time, Dairy Mart and its advisors have continued to pursue strategic alternatives with which to maximize value in the company. During the chapter 11 process, Dairy Mart and its stores continue to operate normally.

Alimentation Couche-Tard Inc. is the leader in the Canadian convenience-store industry and the ninth-largest convenience retailer in North America. The Montreal-based company operates a network of 1,955 convenience stores in Canada and the Midwestern United States. Some 750 of these stores include gasoline dispensing. Currently 13,100 people work at Couche-Tard's head office and throughout the store network.

Dairy Mart Convenience Stores, Inc. owns or operates approximately 450 retail stores in five states located in the Midwest and Southeast. For more information, visit Dairy Mart's web site at www.dairymart.com.

NOTE: Statements contained in this release that are not historical facts, including those relating to Dairy Mart's ongoing operations and financing during the reorganization process, plans to build and maximize the company's value, and ability to complete the sale process may constitute forward-looking statements. Factors that could cause actual results to differ materially from those stated or implied in the forward-looking statements include failure to adequately finance and improve its current operations, the failure to promptly complete and receive court approval for the sale, adverse rulings by the bankruptcy court and other factors disclosed in Dairy Mart's periodic filings with the Securities and Exchange Commission. Dairy Mart assumes no obligation to update the information contained in this news release.