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MEI DIVERSIFIED ANNOUNCES LETTER OF INTENT TO SELL UNITED STATES AND CANADIAN SALON OPERATIONS

 MINNEAPOLIS, Nov. 2 /PRNewswire/ -- MEI Diversified Inc., which is currently operating under protection of Chapter 11 of the Bankruptcy Code, today announced that is has executed a letter of intent to sell its United States and Canadian Salon operations to an investor group led by salon operator Magicuts, Inc., of Toronto, Canada. The letter of intent is subject to the mutual execution of a definitive agreement and bankruptcy court approval. The transaction is scheduled to close at the end of November or early December. The letter of intent provides for a purchase price of approximately $30 million, comprised of approximately $10 million in cash and securities, and the balance in the assumption of certain liabilities.
 Brian Luborsky, chief executive officer of Magicuts remarked, "We intend to take immediate action to improve the MEI Salon business, quickly close the transaction, and make these salons the very best in the industry."
 James A Cesario, vice president-controller, of MEI Diversified Inc., commented, "We are committed to proceed as quickly as possible to get this transaction closed."
 Magicuts, Inc., a private corporation, is the second largest operator of hair care salons within department stores in North America.
 -0- 11/2/93
 /CONTACT: Robert P. King, 612-936-4301; or James A. Cesario, 612-339-8853, both for MEI Diversified/


CO: MEI Diversified Inc.; Magicuts, Inc. ST: Minnesota, Ontario IN: REA SU:

DB-DS -- MN004 -- 9537 11/02/93 09:29 EST
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Publication:PR Newswire
Date:Nov 2, 1993
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