Westaim Files Management Proxy Circular for Special Shareholder Meeting to be Held on June 28, 2012

BOARD UNANIMOUSLY RECOMMENDS SALE OF JEVCO INSURANCE COMPANY TO INTACT FINANCIAL CORPORATION

TORONTO, May 30, 2012 /CNW/ - The Westaim Corporation ("Westaim" or the "Company") today announced that the Company has filed its management proxy circular with the Canadian securities commissions in preparation for the special shareholder meeting to be held on June 28, 2012 in Toronto (the "Meeting"). The circular is available at www.westaim.com, as well as on SEDAR at www.sedar.com.

The proxy circular contains a unanimous recommendation from Westaim's Board of Directors (the "Board") that Westaim's shareholders approve the sale of all of the shares of JEVCO Insurance Company ("Jevco") owned by Westaim to 8181047 Canada Inc. (the "Buyer"), a wholly-owned subsidiary of Intact Financial Corporation ("Intact"), for a cash purchase price of $530 million (the "Transaction") pursuant to a share purchase agreement dated May 1, 2012 among Westaim, the Buyer and Intact (the "Share Purchase Agreement").  The Transaction is subject to certain closing conditions, including, without limitation, the approval of holders of not less than 66⅔% of the votes cast by Westaim's common shares ("Common Shares") and Series 1 Class A non-voting, participating, convertible, preferred shares ("Non-Voting Shares"), in person or represented by proxy at the Meeting, voting as a single class.  The Transaction is expected to be completed no later than August 30, 2012 (subject to the Buyer's right to postpone the closing on no more than two occasions for a period of 30 days each in accordance with the terms and conditions of the Share Purchase Agreement).

Holders of Common Shares and Non-Voting Shares registered at the close of business on May 22, 2012, will be entitled to receive notice of, and vote at, the Meeting in respect of the Transaction. The proxy circular, which shareholders are expected to receive in the coming days, provides important information on the Transaction, including voting procedures.

Following the completion of the Transaction, Westaim is proposing to distribute substantially all of the net proceeds received from the Transaction to holders of the Common Shares (on a date to be determined by the Board) by way of a return of capital (the "Cash Distribution") and a corresponding reduction of the stated capital (the "Stated Capital Reduction") of the Common Shares.  The Cash Distribution will be in an amount to be determined by the Board in its sole discretion based on the present and contingent liabilities of Westaim, as well as its future business objectives, as at the date on which the Board determines such amount.  The Cash Distribution is currently expected to be approximately $0.75 per Common Share.

In order to enable the holders of the Non-Voting Shares to participate in the Cash Distribution on the same basis as the holders of Common Shares, Westaim is proposing to amend its Articles to modify the rights, privileges, conditions and restrictions attaching to the Non-Voting Shares by removing the restriction on the conversion of the Non-Voting Shares into Common Shares (the "Conversion "Restrictions") which currently prevents the Non-Voting Shareholders from effecting such conversion in certain circumstances (the "Non-Voting Share Amendment").

Therefore, at the Meeting, holders of Common Shares will also be asked to approve special resolutions authorizing the Stated Capital Reduction and the Non-Voting Share Amendment.  Completion of the Transaction is not conditional on receipt of shareholder approval of such resolutions.  In connection with the Non-Voting Share Amendment, Westaim, 1523488 Alberta Ltd. (as sole owner of the Non-Voting Shares) ("Holdco") and Alberta Investment Management Corporation ("AIMCo"), the investment manager of the investment portfolio of Holdco, have entered into a voting agreement (the "Holdco Voting Agreement") for the purpose of providing comparable protection for the holders of Common Shares as is currently provided by the Conversion Restrictions.  The Holdco Voting Agreement will not become effective until after the completion of the Transaction and will apply to any Common Shares beneficially owned by Holdco and/or over which AIMCo exercises control or direction, which represent in excess of 40% of the issued and outstanding Common Shares (the "Subject Shares").  Provided that the Transaction is completed, Holdco and AIMCo agree to vote the Subject Shares in such manner as the Board specifies in the management proxy circular prepared, filed and delivered to Westaim shareholders in respect of each such meeting of shareholders or as otherwise directed by the Board until the Holdco Voting Agreement is terminated in accordance with its terms.

About The Westaim Corporation

Westaim is a financial holding company focused on the property and casualty insurance industry. Westaim's Common Shares are listed on The Toronto Stock Exchange under the trading symbol WED.  Further information can be found in the disclosure documents filed by the Company with the securities regulatory authorities, available at www.sedar.com.

Certain portions of this press release as well as other public statements by Westaim contain forward-looking statements. Such forward-looking statements include but are not limited to statements concerning the proposed Transaction, Jevco's business and the industry in which it operates; investment strategies and expected rates of return; and strategic alternatives to maximize value for shareholder. These statements are based on current expectations that are subject to risks, uncertainties and assumptions and Westaim can give no assurance that these expectations are correct. Westaim's actual results could differ materially from those anticipated by forward-looking statements for various reasons generally beyond our control, including but not limited to: (i) the inability on the part of Westaim to complete the Transaction, Cash Distribution, Stated Capital Reduction or Non-Voting Share Amendment on the terms contemplated or at all, (ii) changes in market conditions or deterioration in underlying investments; (iii) general economic, market, financing, regulatory and industry developments and conditions; (iv) the risks relating to Jevco's business; and (iv) other risk factors set forth in Westaim's Annual Report, Quarterly Reports or Annual Information Form. Westaim disclaims any intention or obligation to revise forward-looking statements whether as a result of new information, future developments or otherwise except as required by law. All forward-looking statements are expressly qualified in their entirety by this cautionary statement.

Jeff Sarfin, Chief Financial Officer
The Westaim Corporation
[email protected]
416-203-2253