Acquisition

15th Jun 2006 08:56

Greene King PLC15 June 2006 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR PART, IN, INTO OR FROMTHE UNITED STATES, CANADA, AUSTRALIA OR JAPAN. For immediate release 15 June 2006 RECOMMENDED PROPOSALS for the acquisition of HARDYS & HANSONS p.l.c. by Greene King Acquisitions (No. 3) Limited, a wholly-owned subsidiary of GREENE KING plc to be effected by means of Schemes of Arrangement under section 425 of the Companies Act 1985 Summary The boards of Hardys & Hansons p.l.c. and Greene King plc announce that theyhave reached agreement on the terms of proposals (the "Hardys & HansonsProposals") under which Greene King Acquisitions (No. 3) Limited (the "Offeror"), a wholly-owned subsidiary of Greene King plc, will acquire theissued and to be issued ordinary share capital of Hardys & Hansons (excludingthe issued deferred ordinary share capital of Hardys & Hansons). In addition, the boards of Hardy Hanson Holdings Limited ("HHHL"), which ownsthe whole of the issued deferred ordinary share capital of Hardys & Hansons, andGreene King plc have reached agreement on the terms of proposals (the "HHHLProposals") under which the Offeror will acquire the issued share capital ofHHHL. These Proposals, if implemented, will result in the Offeror acquiring control ofall of the voting share capital of Hardys & Hansons. The Hardys & Hansons Proposals and the HHHL Proposals (together the "Proposals")are to be implemented by means of two Court sanctioned schemes of arrangementunder section 425 of the Companies Act. None of the Proposals will becomeeffective unless both the Hardys & Hansons Scheme and the HHHL Scheme areapproved by the relevant Hardys & Hansons Shareholders and HHHL Shareholdersrespectively and the Schemes are sanctioned by the Court. Under the terms of the Proposals: • Hardys & Hansons Scheme Shareholders will be entitled to receive £10.59 in cash for each ordinary Hardys & Hansons Share held. In addition, Hardys & Hansons Shareholders will receive in cash the declared interim dividend of 7.6 pence per Hardys & Hansons Share; • HHHL Scheme Shareholders will be entitled to receive £194.17 in cash for each HHHL A Share or HHHL B Share held, which is equivalent to £11.65 in cash for each deferred ordinary share. HHHL Shareholders will incur transaction costs currently not expected to exceed 70 pence for each HHHL A Share or HHHL B Share held relating to the assessment of the HHHL Proposals and the implementation of the HHHL Scheme. These transaction costs are equivalent to approximately 4 pence per ordinary deferred share. In addition, HHHL Shareholders will receive in cash an interim dividend of 122.5 pence for each HHHL A Share or HHHL B Share held in respect of the interim dividend of 7.35 pence declared for the deferred ordinary shares which are wholly-owned by HHHL. The HHHL Proposals value the deferred ordinary shares at a 10 per cent. premiumto the value at which the Hardys & Hansons Proposals value the ordinary shares. A Loan Note Alternative will be made available to both Hardys & Hansons SchemeShareholders and HHHL Scheme Shareholders. The Hardys & Hansons Proposals value the issued ordinary share capital of Hardys& Hansons at approximately £212 million and the HHHL Proposals value the issuedshare capital of HHHL at approximately £58 million. The Proposals value theentire issued share capital of Hardys & Hansons at approximately £270 million(excluding the interim dividend worth approximately £2 million in total) whichrepresents: • a premium of approximately 48.0 per cent. to the average Closing Price for the six month period ending 9 June 2006 (the last business day prior to the commencement of the Offer Period); • a premium of approximately 44.5 per cent. to the Closing Price on 9 June 2006, the last business day prior to the commencement of the Offer Period; and • taken together with the net debt position of Hardys & Hansons (as at 31 March 2006), an enterprise value of approximately £271 million, implying a multiple of approximately 10.0x 2005 EBITDA pre-central overheads. The Greene King Directors believe that the acquisition will continue GreeneKing's strategy of focused acquisitions complementing strong organic growth.The Greene King Directors believe the Hardys & Hansons estate to be of highquality, but with further untapped opportunities for value-creating investment.There are also a number of significant synergies to be realised, which theGreene King Directors believe will total £3 million in the first full yearfollowing acquisition, and will rise to £5 million. These synergies includemargin improvements from moving Hardys & Hansons outlets to purchasing termsavailable to Greene King, and from deploying systems and processes used in theGreene King estate. The Hardys & Hansons Directors, who have been so advised by Hawkpoint, considerthe terms of the Hardys & Hansons Proposals to be fair and reasonable. Inproviding its advice, Hawkpoint has taken into account the commercialassessments of the Hardys & Hansons Directors. Accordingly, the Hardys & HansonsDirectors intend unanimously to recommend that Hardys & Hansons Shareholdersvote in favour of the Hardys & Hansons Proposals, as they have irrevocablyundertaken to do in respect of their own beneficial holdings of in aggregate622,731 Hardys & Hansons Shares representing approximately 3.1 per cent. of theexisting issued Hardys & Hansons Shares. Irrevocable undertakings and a letter of intent to vote in favour of the Hardys& Hansons Proposals have been received by the Offeror in respect of Hardys &Hansons Shares representing approximately 14.6 per cent. of Hardys & Hansons'existing issued Hardys & Hansons Shares. These include the irrevocableundertakings from the Directors of Hardys & Hansons referred to above. Furthermore, the Directors of HHHL, who have been so advised by Hawkpoint,consider the terms of the HHHL Proposals to be fair and reasonable. In providingits advice, Hawkpoint has taken into account the commercial assessments of theHHHL Directors. Accordingly, the HHHL Directors intend unanimously to recommendthat HHHL Shareholders vote in favour of the HHHL Proposals, as they haveirrevocably undertaken to do in respect of their own beneficial holdings of38,683 HHHL A Shares and 6,289 HHHL B Shares representing approximately 25.8 percent. of the A ordinary share capital of HHHL and 4.2 per cent. of the Bordinary share capital of HHHL, respectively. Irrevocable undertakings to vote in favour of the HHHL Proposals have beenreceived by the Offeror in respect of HHHL A Shares and HHHL B sharesrepresenting approximately 82.3 per cent. of the existing issued HHHL A Sharesand 28.1 per cent. of the existing issued HHHL B Shares, respectively. Theseinclude the irrevocable undertakings from the Directors of HHHL referred toabove. The HHHL Proposals are being made by the Offeror directly to the shareholders ofHHHL and therefore a proposal will not be made in relation to deferred ordinaryshares of Hardys & Hansons which are wholly owned by HHHL. The Panel hasgranted Greene King a waiver from making such Proposals to the deferred ordinaryshareholders of Hardys & Hansons. In addition, no proposals are being made forthe 5 per cent. First Cumulative Preference shares and 6 per cent. SecondCumulative Preference shares of Hardys & Hansons at this stage. Citigroup and PricewaterhouseCoopers are acting as joint financial advisers toGreene King and the Offeror. Hawkpoint is acting as financial adviser to Hardys& Hansons and HHHL. Commenting on the Proposals, Rooney Anand, Chief Executive of Greene King, said: "We believe this is a fair offer for Hardys & Hansons, a company we have longadmired for its high quality estate, strong management team, dedicated staff andrich heritage. It represents a unique opportunity for us to achieve presenceand scale in the East Midlands market, where we have been under-represented todate. The offer is consistent with our strategy to deliver shareholder value byaugmenting our organic growth with selective acquisitions that improve theoverall quality of the group. We are confident we can achieve good levels ofsynergies from the acquisition. Both Greene King and Hardys & Hansons are integrated operators with proudhistories and similar cultures. Not only does Hardys & Hansons' businesscomplement ours; we understand and value its heritage. We look forward tocontinuing to grow Hardys & Hansons' pub estate and develop relationships withmanagement and staff, tenants, suppliers and customers." Commenting on the Proposals, James Kerr-Muir, Chairman of Hardys & Hansons,said: "Hardys & Hansons and Greene King are two businesses which complement oneanother operationally, geographically and culturally. Hardys & Hansons' highquality pub estate is a natural fit with that of Greene King. Our regional alebrands will add to Greene King's strong portfolio of brands and there will beattractive new opportunities for our tenants and employees. The Offer represents excellent value for Hardys & Hansons' shareholders andGreene King represents an excellent home for the business where both Hardys &Hansons and its people will be able to continue to develop and expand." Commenting on the Proposals, Patrick Helps, Chairman of HHHL said: "This is an extremely attractive offer for shareholders reflecting the valueinherent in the current Hardys & Hansons business and its foreseeable prospects. It is a watershed in the company's 174 year history. However, we could not havewished for a better owner than Greene King to continue Hardys & Hansons'heritage, culture and successful business model. I have every confidence thatGreene King's scale, investment, and acknowledged management expertise andbrewing capabilities will bring benefit to Hardys & Hansons, and that GreeneKing will show sensitivity as they integrate the two businesses." This summary should be read in conjunction with the full text of the attachedannouncement. The Proposals will be subject to the conditions set out inAppendix I and II and to the full terms and conditions set out in the Hardys &Hansons Scheme Document and the HHHL Scheme Document. There will be a conference call for analysts and investors today at 10.00 a.m.(UK time). Please contact Helen Lutman on 020 7269 7153 for further details. Enquiries Greene King 01284 763 222 Rooney Anand Citigroup 020 7986 4000 David Wormsley Anthony Gutman PricewaterhouseCoopers 020 7583 5000 Simon Boadle Sean Williams Financial Dynamics 020 7831 3113 Charles Watenphul Ben Foster Hardys & Hansons 0115 938 3611 Jonathan Webster Hawkpoint 020 7665 4500 Patrick Wilson Joseph Ayala College Hill 020 7457 2020 Justine Warren Matthew Smallwood Citigroup, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting for the Offeror and no one else inconnection with the Proposals and will not be responsible to anyone other thanthe Offeror for providing the protections afforded to clients of Citigroup orfor providing advice in relation to the Proposals or any other matters referredto in this announcement. PricewaterhouseCoopers, which is authorised and regulated in the United Kingdomby the Financial Services Authority for designated investment business, isacting for the Offeror and for no one else in relation to the Proposals and willnot be responsible to anyone other than the Offeror for providing theprotections afforded to clients of PricewaterhouseCoopers or for giving advicein relation to the Proposals or any other matters referred to in thisannouncement. Hawkpoint, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting for Hardys & Hansons and HHHL and no oneelse in connection with the Proposals and will not be responsible to anyoneother than Hardys & Hansons and HHHL for providing the protections afforded toclients of Hawkpoint or for providing advice in relation to the Proposals or anyother matter referred to in this announcement. This announcement does not constitute an offer to sell or an invitation topurchase or subscribe for any securities. Any response in relation to theProposals should be made only on the basis of the information contained in theScheme Document or any document by which the Offer is made. Hardys & Hansons will prepare the Scheme Documents to be distributed to Hardys &Hansons Shareholders and HHHL Shareholders. Hardys & Hansons and Greene Kingurge Hardys & Hansons Shareholders and HHHL Shareholders to read the SchemeDocuments when they become available because they will contain importantinformation relating to the Proposals. The availability of the Loan Notes under the terms of the Schemes to persons whoare not resident in the United Kingdom may be affected by the laws of therelevant jurisdictions in which they are located. Persons who are not residentin the United Kingdom should inform themselves of, and observe, any applicablerequirements. The Loan Notes to be issued to Hardys & Hansons Shareholders and HHHLShareholders under the Proposals have not been, and will not be listed on anystock exchange and have not been and will not be registered under the USSecurities Act of 1933, as amended, or under the applicable securities laws ofany state, district or other jurisdiction of the United States, or of Canada,Australia, Japan or any other jurisdication, and no regulatory clearances inrespect of the Loan Notes have been, or will be, applied for in any suchjurisdiction. Accordingly, unless an exemption under such relevant securitieslaws is applicable, the Loan Notes are not being, and may not be, offered, sold,resold, delivered or distributed, directly or indirectly, in or into the UnitedStates, Canada, Australia, Japan, or any other jurisdication in which an offerof Loan Notes would result in the violation of relevant laws, or requireregistration of the Loan Notes, or to, or for the account or benefit of, any USperson or resident of Canada, Australia, Japan or any other such jurisdication. The availability of the Proposals to persons not resident in the United Kingdommay be affected by the laws of the relevant jurisdictions. Such persons shouldinform themselves about and observe any applicable requirements of thosejurisdictions. Under the provisions of Rule 8.3 of the Takeover Code (the "Code"), if anyperson is, or becomes, "interested" (directly or indirectly) in 1% or more ofany class of "relevant securities" of Hardys & Hansons, all "dealings" in any "relevant securities" of that company (including by means of an option in respectof, or a derivative referenced to, any such "relevant securities") must bepublicly disclosed by no later than 3.30 pm (London time) on the London businessday following the date of the relevant transaction. This requirement willcontinue until the Effective Date or the date on which the Hardys & HansonsScheme is withdrawn. If two or more persons act together pursuant to anagreement or understanding, whether formal or informal, to acquire an "interest"in "relevant securities" of Hardys & Hansons, they will be deemed to be a singleperson for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevantsecurities" of Hardys & Hansons by the Offeror or Hardys & Hansons, or by any oftheir respective "associates", must be disclosed by no later than 12.00 noon(London time) on the London business day following the date of the relevanttransaction. A disclosure table, giving details of the companies in whose "relevant"securities "dealings" should be disclosed and the number of such securities inissue, can be found on the Takeover Panel's website atwww.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the prices ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership of control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation markets are defined in the Code, which can also be found onthe Panel's website. If you are in any doubt as to whether or not you arerequired to disclose a "dealing" under Rule 8, you should consult the Panel. This summary should be read in conjunction with the full text of thisannouncement. Appendix I and II to this announcement contains the conditions toand certain further terms of the Proposals. Appendix III to this announcementcontains further details of the sources of information and bases of calculationsset out in this announcement and Appendix IV to this announcement containsdefinitions of certain expressions used in this summary and in thisannouncement. NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR PART, IN, INTO OR FROMTHE UNITED STATES, CANADA, AUSTRALIA OR JAPAN. For immediate release 15 June 2006 RECOMMENDED PROPOSALS for the acquisition of HARDYS & HANSONS p.l.c. by Greene King Acquisitions (No. 3) Limited, a wholly-owned subsidiary of GREENE KING plc to be effected by means of Schemes of Arrangement under section 425 of the Companies Act 1985 1. Introduction The boards of Hardys & Hansons p.l.c. and Greene King plc announce that theyhave reached agreement on the terms of proposals (the "Hardys & HansonsProposals") under which Greene King Acquisitions (No. 3) Limited (the "Offeror"), a wholly-owned subsidiary of Greene King plc, will acquire the issued and tobe issued ordinary share capital of Hardys & Hansons (excluding the issueddeferred ordinary share capital of Hardys & Hansons). In addition, the boards of Hardy Hanson Holdings Limited ("HHHL"), which ownsthe whole of the issued deferred ordinary share capital of Hardys & Hansons, andGreene King plc have reached agreement on the terms of proposals (the "HHHLProposals") under which the Offeror will acquire the issued share capital ofHHHL. These Proposals, if implemented, will result in the Offeror acquiring control ofall of the voting share capital of Hardys & Hansons. The Hardys & Hansons Proposals and the HHHL Proposals (together the "Proposals")are to be implemented by means of two Court sanctioned schemes of arrangementunder section 425 of the Companies Act. None of the Proposals will becomeeffective unless both the Hardys & Hansons Scheme and the HHHL Scheme areapproved by the Hardys & Hansons Shareholders and HHHL Shareholders respectivelyand the Schemes are sanctioned by the Court. 2. The Proposals Under the terms of the Proposals: • Hardys & Hansons Scheme Shareholders will be entitled to receive £10.59in cash for each Hardys & Hansons Share held. In addition, Hardys & HansonsShareholders will receive in cash the declared interim dividend of 7.6 pence perHardys & Hansons Share; • HHHL Scheme Shareholders will be entitled to receive £194.17 in cashfor each HHHL A Share or HHHL B Share held, which is equivalent to £11.65 incash for each deferred ordinary share. HHHL Shareholders will incur transactioncosts currently not expected to exceed 70 pence for each HHHL A Share or HHHL BShare held relating to the assessment of the HHHL Proposals and theimplementation of the HHHL Scheme. These transaction costs are equivalent toapproximately 4 pence per ordinary deferred share. In addition, HHHLShareholders will receive in cash an interim dividend of 122.5 pence for eachHHHL A Share or HHHL B Share held in respect of the interim dividend of 7.35pence declared for the deferred ordinary shares all of which are owned by HHHL. The HHHL Proposals value the deferred ordinary shares at a 10 per cent. premiumto the value at which the Hardys & Hansons Proposals value the Hardys & HansonsShares. A Loan Note Alternative will be made available to both Hardys & Hansons SchemeShareholders and HHHL Scheme Shareholders. The Hardys & Hansons Proposals value the issued ordinary share capital of Hardys& Hansons at approximately £212 million and the HHHL Proposals value the issuedshare capital of HHHL at approximately £58 million. The Proposals value theentire issued share capital of Hardys & Hansons at approximately £270 million(excluding the interim dividend worth approximately £2 million in total) whichrepresents: • a premium of approximately 48.0 per cent. to the average Closing Price for the six month period ending 9 June 2006 (the last business day prior to the commencement of the Offer Period); • a premium of approximately 44.5 per cent. to the Closing Price on 9 June 2006, the last business day prior to the commencement of the Offer Period; and • taken together with the existing net debt position of Hardys & Hansons (as at 31 March 2006), an enterprise value of approximately £271 million, implying a multiple of approximately 10.0x 2005 EBITDA pre-central overheads. The HHHL Proposals are being made by the Offeror directly to the shareholders ofHHHL and therefore a proposal will not be made in relation to deferred ordinaryshares of Hardys & Hansons which are wholly-owned by HHHL. The Panel has grantedGreene King a waiver from making such proposals in relation to the deferredordinary shareholders of Hardys & Hansons. In addition, no proposals are beingmade for the 5 per cent. First Cumulative Preference shares and 6 per cent.Second Cumulative Preference shares of Hardys & Hansons at this stage. Citigroup and PricewaterhouseCoopers are acting as joint financial advisers toGreene King and the Offeror. Hawkpoint is acting as financial adviser to Hardys& Hansons and HHHL. 3. The Loan Note Alternatives The Hardys & Hansons Scheme Shareholders and the HHHL Scheme Shareholders (otherthan Restricted Overseas Persons) will be entitled to elect to receive LoanNotes issued by the Offeror instead of some or all of the cash consideration towhich they would otherwise be entitled under the relevant Schemes on thefollowing basis: for each £1 of cash consideration £1 nominal value of Loan Notes No Loan Notes will be issued unless on or before the date on which the Schemesbecome effective in accordance with their terms, valid elections have beenreceived in respect of at least £5,000,000 (in aggregate) nominal value of LoanNotes. If insufficient elections are received, Hardys & Hansons Shareholders andHHHL Shareholders who validly elect for the Loan Note Alternative will insteadreceive cash in accordance with the terms of the Proposals. The Loan Notes, which will be governed by English law, will be unsecuredobligations of the Offeror and will be guaranteed by Greene King. The Loan Noteswill be issued, credited as fully paid, in amounts and multiples of 100 pencenominal value. Entitlements, in aggregate, to Loan Notes will be rounded down tothe nearest 100 pence and the balance of any consideration will be disregardedand will not be paid. The Loan Notes will bear interest (from the date of issue to the relevant holderof Loan Notes) payable half-yearly in arrears (less any tax required by law tobe deducted therefrom) on 30 June and 31 December in each year, at the rate perannum calculated to be 0.5 per cent. below LIBOR for six month sterling depositsas determined on the first business day of each such interest period. The firstinterest payment date will be 31 December 2006 in respect of the period from(and including) the date of first issue of any Loan Note up to (but excluding)that date. Holders of Loan Notes will have the right to redeem all or part oftheir Loan Notes for cash at par (plus accrued interest) on 30 June 2007 and onany subsequent interest payment dates. The Offeror will have the right to redeemall (but not part only) of the Loan Notes in question for cash at par (plusaccrued interest) on 30 June 2007 and on any subsequent interest payment datesif the aggregate amount of Loan Notes outstanding is less than £1,000,000 innominal value. Unless previously redeemed or repurchased by 30 June 2011, theLoan Notes will be redeemed at par (together with accrued interest) on thatdate. The Loan Notes will only be transferable in limited circumstances and noapplication will be made for the Loan Notes to be listed or dealt in on anystock exchange. The Loan Note Alternatives are conditional on both of the Schemes becomingeffective in accordance with their terms. The Loan Notes will not be offered inAustralia, Canada, Japan, the United States or in any other jurisdiction whereit would be unlawful to do so. Further details of the Loan Notes and the conditions of their issuance will becontained in each Scheme Document. 4. Recommendation The Hardys & Hansons Directors, who have been so advised by Hawkpoint, considerthe terms of the Hardys & Hansons Proposals to be fair and reasonable. Inproviding its advice, Hawkpoint has taken into account the commercialassessments of the Hardys & Hansons Directors. Accordingly, the Hardys & HansonsDirectors intend unanimously to recommend that Hardys & Hansons Shareholdersvote in favour of the Hardys & Hansons Proposals, as they have irrevocablyundertaken to do in respect of their own beneficial holdings of, in aggregate622,731 Hardys & Hansons Shares representing approximately 3.1 per cent. ofHardys & Hansons Shares. Furthermore, the Directors of HHHL, who have been so advised by Hawkpoint,consider the terms of the HHHL Proposals to be fair and reasonable. In providingits advice, Hawkpoint has taken into account the commercial assessments of theHHHL Directors. Accordingly, the HHHL Directors intend unanimously to recommendthat HHHL Shareholders vote in favour of the HHHL Proposals, as they haveirrevocably undertaken to do in respect of their own beneficial holdings of, inaggregate 38,683 HHHL A Shares representing approximately 25.8 per cent. of theA ordinary share capital of HHHL, and 6,289 HHHL B Shares representingapproximately 4.2 per cent. of the B ordinary share capital of HHHL. 5. Background to and reasons for recommending the Proposals The Hardys & Hansons Directors have a clear strategy to grow the Hardys &Hansons business which is successfully delivering superior performance andreturns to Hardys & Hansons' shareholders in challenging markets. However, in recent months there has been an unprecedented level of corporateactivity in the pub sector and pub businesses have attracted very attractivevaluations. Following a number of unsolicited approaches and in closeconsultation with the board of HHHL, the Hardys & Hansons Directors appointedHawkpoint to advise on the assessment of and responses to potential purchasersattracted by the high quality of Hardys & Hansons' pub estate and its highlycash generative business model. In close consultation with the HHHL Directors, the Hardys & Hansons Directorsconcluded that the approach from Greene King offered the optimal way ofachieving the twin objectives of maximising shareholder value and finding anexcellent cultural fit for the Hardys & Hansons business. From the point of view of valuation, the offer from Greene King amounts to anenterprise valuation of the Hardys & Hansons business of approximately £271million, including net debt as at 31 March 2006. The Hardys & Hansons Directorsbelieve that the offer from Greene King represents very attractive value for theHardys & Hansons business in its present form as well as for its foreseeableprospects. Furthermore, the Hardys & Hansons Directors and HHHL Directors believe GreeneKing is an excellent fit for the Hardys & Hansons business. The pub estates ofthe two businesses are highly complementary, with significant economies of scaledeliverable by the enlarged business. Critically, the Greene King and Hardys &Hansons businesses share the same values, in particular with respect to thesignificant contribution to the success of the respective businesses made bytheir people - employees, business partners and customers. The Hardys & HansonsDirectors and HHHL Directors have derived a very significant amount of comfortfrom Greene King's successful track record of integrating family-ownedbusinesses and anticipate that there will be new attractive opportunities forHardys & Hansons' tenants and employees. Following detailed negotiations, the Hardys & Hansons Directors and HHHLDirectors have reached agreement on the relative consideration payable to Hardys& Hansons Shareholders and HHHL Shareholders. The Hardys & Hansons Directorswere advised by Hawkpoint, and the HHHL Directors were advised by MacArthur &Co. The Hardys & Hansons Directors and HHHL Directors believe that the agreedrelative terms of the consideration payable translates into a premium for theimplicit value of the issued deferred ordinary shares of Hardys & Hansons ofapproximately 10 per cent. relative to the value of the ordinary Hardys &Hansons Shares, which fairly reflects relative voting and dividend rights aswell as the respective size of each class of equity share capital. Accordingly, the Hardys & Hansons Directors and HHHL Directors will unanimouslyrecommend that Hardys & Hansons Shareholders and HHHL Shareholders vote infavour of the Hardys & Hansons Proposals and HHHL Proposals respectively. 6. Reasons for the Proposals and future plans for Hardys & Hansons Greene King's consistent record of enhancing shareholder value has been derivedfrom a clear strategy built on a blend of strong asset management, like-for-likesales growth and margin growth, augmented by a focused programme ofacquisitions. The Greene King Directors believe that the composition of Hardys & Hansons'business is complementary to Greene King's integrated business model, in whicheach element of the business complements and reinforces the others, namely: • a quality estate of predominantly freehold pubs; • a diversified range of pubs enabling the estate to be operated optimally through transfers between tenanted and managed models; • leading beer brands; • efficient brewing and distribution; and • strong sales networks and relationships with the free trade. The Proposals value Hardys & Hansons at a multiple of approximately 10.0x Hardys& Hansons' historic pre-overhead EBITDA. There are additional areas of value,including the benefits of some of Hardys & Hansons' recent acquisitions andinvestments; and cost and revenue synergies which Greene King Directors believewill total £3 million in the first full year following acquisition, and willrise to £5 million. The Greene King Directors also see potential for furthervalue-creating investment in the estate. Hardys & Hansons has invested significantly in its estate in recent years,presenting an excellent opportunity for Greene King to acquire an extensive andwell maintained pub estate. Geographically, Hardys & Hansons' estate and salestrading area complement Greene King's. The Greene King Directors foresee noconflicts from a regulatory perspective. Greene King has considerable experience of integrating companies. Its approachis not only to apply its systems and processes, but also to take the best pointsfrom the new part of the business, for the benefit of the entire estate. GreeneKing will of course honour the provisions of existing employment, tenant,customer and business partner contracts; and plans to continue to brew keyHardys & Hansons brands. The transaction will be debt-financed and after completion Greene King's fixedcharge cover will remain comfortable; the Greene King Directors believe this torepresent a prudent but efficient use of the Group's strong freeholdasset-backed balance sheet. Greene King's ten transactions since 1996 have broadened the Group's productoffering and their success illustrates a proven track record of successfulacquisition integration. To date, each of Greene King's major acquisitions hasgenerated returns in excess of Greene King's weighted average cost of capital,extended its geographical coverage across Britain, and driven further economiesof scale. The Directors of Greene King expect the Proposals, on implementation, to beearnings enhancing for Greene King (before exceptional items and goodwillamortisation), and to achieve a return on investment ahead of the weightedaverage cost of capital, in the first financial year following completion. Nothing in this announcement should be construed as a profit forecast or beinterpreted to mean that the future earnings per share or profits of Greene Kingwill necessarily be greater than the historic published earnings per share. 7. Irrevocable undertakings to accept the Proposals and letter of intent The Offeror has received irrevocable undertakings and a letter of intent to votein favour of the resolutions to be proposed at (i) the Hardys & Hansons CourtMeeting and the Hardys & Hansons Extraordinary General Meeting in respect of atotal of 2,914,599 Hardys & Hansons Shares and (ii) the HHHL Court Meetings andthe HHHL Extraordinary General Meeting in respect of 123,434 HHHL A Shares and42,105 HHHL B Shares. Details of these irrevocable undertakings and letter ofintent are as follows: (a) The Directors of Hardys & Hansons have irrevocably undertaken to vote infavour of the resolutions to be proposed at the Hardys & Hansons Court Meetingand the Hardys & Hansons Extraordinary General Meeting in respect of a total of622,731 Hardys & Hansons Shares, representing approximately 3.1 per cent. of theexisting ordinary share capital of Hardys & Hansons. Their obligations underthis undertaking will only cease to be binding if the Hardys & Hansons SchemeDocument is not posted within 28 days of the date hereof (or such later date asthe Offeror and Hardys & Hansons may agree and the Panel may permit) or if theHardys & Hansons Scheme does not take effect, lapses or is withdrawn. (b) Certain family members, connected companies and related trusts of Hardys &Hansons Directors have irrevocably undertaken to vote in favour of theresolutions to be proposed at the Hardys & Hansons Court Meeting and the Hardys& Hansons Extraordinary General Meeting in respect of a total of 1,569,545Hardys & Hansons Shares, representing approximately 7.8 per cent. of theexisting ordinary share capital of Hardys & Hansons. Their obligations underthis undertaking would lapse if (a) the Hardys & Hansons Scheme Document is notposted within 28 days of the date hereof (or such later date as the Offeror andHardys & Hansons may agree and the Panel may permit), (b) the Hardys & HansonsScheme does not take effect, lapses or is withdrawn or (c) a third partyannounces an offer to acquire (whether directly or indirectly) all of theordinary and or/deferred shares in the capital of Hardys & Hansons, the value ofthe consideration available under such offer exceeds 10 per cent. or more ofthat available under the Proposals and the Offeror has not within 14 days of theday on which such offer is made announced a revision of the terms of the Hardys& Hansons Scheme or elected to make a general offer in each case under which thevalue of the consideration available is greater than or equal to the value ofthe consideration available under such other offer. (c) The Directors of HHHL have irrevocably undertaken to vote in favour of theresolutions to be proposed at the HHHL Court Meetings and the HHHL ExtraordinaryGeneral Meeting in respect of a total of 38,683 HHHL A Shares and 6,289 HHHL BShares, representing approximately 25.8 per cent. of the A ordinary sharecapital of HHHL and 4.2 per cent. of the B ordinary share capital of HHHL,respectively. Their obligations under these undertakings will only cease to bebinding if the HHHL Scheme Document is not posted within 28 days of the datehereof (or such later date as the Offeror and HHHL may agree and the Panel maypermit) or if the HHHL Scheme does not take effect, lapses or is withdrawn. (d) Certain family members of the HHHL Directors have irrevocably undertakento vote in favour of the resolutions to be proposed at the HHHL Court Meetingsand the HHHL Extraordinary General Meeting in respect of a total of 7,945 HHHL BShares, representing approximately 5.3 per cent. of the existing B ordinaryshare capital of HHHL. Their obligations under these undertakings will onlycease to be binding if the Hardys & Hansons Scheme Document is not posted within28 days of the date hereof (or such later date as the Offeror and HHHL may agreeand the Panel may permit) or if the Hardys & Hansons Scheme does not takeeffect, lapses or is withdrawn. (e) A related trust of the HHHL Directors has irrevocably undertaken to votein favour of the resolutions to be proposed at the HHHL Court Meetings and theHHHL Extraordinary General Meeting in respect of a total of 84,751 HHHL AShares, representing approximately 56.5 per cent. of the existing A ordinaryshare capital of HHHL. Its obligations under this undertaking would lapse if (a)the HHHL Scheme Document is not posted within 28 days of the date hereof (orsuch later date as the Offeror and HHHL may agree and the Panel may permit), (b)the HHHL Scheme does not take effect, lapses or is withdrawn or (c) a thirdparty announces an offer to acquire (whether directly or indirectly) all of theissued HHHL A Shares and HHHL B Shares, the value of the consideration availableunder such offer exceeds that available under the Proposals by 10 per cent. ormore and the Offeror has not within 14 days of the day on which such offer ismade announced a revision of the terms of the HHHL Scheme or elected to make ageneral offer in each case under which the value of the consideration availableis greater than or equal to the value of the consideration available under suchother offer. (f) Certain family members and related trusts of the HHHL Directors haveirrevocably undertaken to vote in favour of the resolutions to be proposed atthe HHHL Court Meetings and the HHHL Extraordinary General Meeting in respect ofa total of 27,871 HHHL B Shares, representing approximately 18.6 per cent. ofthe existing B ordinary share capital of HHHL. Their obligations under theseundertakings would lapse if (a) the HHHL Scheme Document is not posted within 28days of the date hereof (or such later date as the Offeror and HHHL may agreeand the Panel may permit), (b) the HHHL Scheme does not take effect, lapses oris withdrawn or (c) a third party announces an offer to acquire (whetherdirectly or indirectly) all of the issued HHHL A Shares and HHHL B Shares, thevalue of the consideration available under such offer exceeds that availableunder the Proposals by 10 per cent. or more and the Offeror has not within 14days of the day on which such offer is made announced a revision of the terms ofthe HHHL Scheme or elected to make a general offer in each case under which thevalue of the consideration available is greater than or equal to the value ofthe consideration available under such other offer. (g) In addition, AEGON Asset Management UK plc, on behalf of the AEGON UK plcGroup of Companies, has provided a letter of intent to the Offeror stating thatits current intention is to vote in favour of the resolutions at the Hardys &Hansons Court Meeting and the Hardys & Hansons Extraordinary General Meeting inrespect of their entire holding of 722,323 Hardys & Hansons Shares, representingapproximately 3.6% of the ordinary share capital of Hardys & Hansons. In total therefore the Offeror has received irrevocable undertakings and aletter of intent to vote in favour of the Schemes in respect of an aggregate of2,914,599 Hardys & Hansons Shares representing approximately 14.6 per cent ofthe ordinary share capital of Hardys & Hansons, 123,434 HHHL A Sharesrepresenting approximately 82.3 per cent of the A ordinary share capital of HHHLand 42,105 HHHL B Shares representing approximately 28.1 per cent of the Bordinary share capital of HHHL. 8. Directors, management and employees The board of Greene King has given assurances to the Directors of Hardys &Hansons and of HHHL that, following the acceptance of the Proposals, theexisting employment rights of all employees of Hardys & Hansons will be fullysafeguarded. The Directors of Hardys & Hansons and the Directors of HHHL intend to resignfrom the boards of Hardys & Hansons and HHHL, respectively, following theSchemes becoming effective and their expectation is that they will have nofurther continuing business involvement with Hardys & Hansons and HHHL. Thefuture roles of Jonathan Webster and David Smith will be determined in duecourse. Jonathan Webster and David Smith will be entitled to a bonus on theSchemes becoming effective. Other senior management will also share in atransaction bonus. 9. Information on Hardys & Hansons and update on current trading Founded in 1832, Hardys & Hansons is the East Midlands' leading independentregional brewer and pub operator. Its high quality and well invested pub estateconsists of 268 sites located throughout the East Midlands which arepredominantly large food-led operations and local community pubs. The companybrews and supplies its own ales to the free trade in addition to its own estate. Overall, the company has a progressive business which generates strong cash flowfrom a quality freehold estate and this has enabled Hardys & Hansons to deliversteady and consistent growth. Managed houses Hardys & Hansons' 83 managed houses have a strong food offering. The vastmajority of managed houses have undergone significant refurbishment oralteration in the past 5 years. Hardys & Hansons has also recently entered intothe lodge market through the acquisition of 5 pub restaurants together withassociated lodge bedrooms operating under the Premier Travel Inn franchise. The strong food element within the managed estate and the availability ofoutside areas within the vast majority of the estate should place the company ina good position to continue to fulfil all customers' needs when the smoking bancomes into effect in England in the summer of 2007. Tenanted houses Hardys & Hansons' tenanted operations consist of 185 primarily local communitypubs. The company continues to build on the strength of the tenanted estatethrough selective acquisitions and by operating an efficient support packagedesigned to attract high quality entrepreneurs. Hardys & Hansons hashistorically experienced a low level of tenancy movement reflecting its wellestablished relationships with tenants. Brands and brewing A number of respected beers are brewed by Hardys & Hansons, including Olde Trip,Cool, Dark, Best Bitter and Mild, as well as a variety of guest ales. Thecompany has recently invested in an eight lane keg line and, following a reviewin 2005, has withdrawn from a number of contract brewing contracts whereprofitability was inadequate. Financials For the year ended 30 September 2005, Hardys & Hansons reported turnover of£75.2 million, profit before tax of £18.4 million and operating profit beforedepreciation, amortisation and exceptionals of £17.6 million. On a pre-overheadbasis, Hardys & Hansons EBITDA was £27.2 million for the year ended 30 September2005. At 30 September 2005, Hardys & Hansons had gross assets of £147.4million. For the 26 weeks ended 31 March 2006, Hardys & Hansons reported turnover of£38.2 million, profit before tax of £6.9 million and operating profit beforedepreciation, amortisation and exceptionals of £9.1 million. At 31 March 2006,Hardys & Hansons had gross assets of £149.8 million. Current trading On 19 May 2006, Hardys & Hansons announced that "the directors remain positiveon the outlook for the company... (they) continue to see improving trends, andtrading in the initial weeks of the second half is in line with expectations". Since 19 May 2006, current trading has continued in line with the Hardys &Hansons Directors' expectations. 10. Information on Greene King and update on current trading Since its foundation in 1799, Greene King has grown steadily from its base inBury St Edmunds, Suffolk, to become a leading pub retailer and ale brewer acrossthe United Kingdom. Greene King has grown both organically and through value-enhancing acquisitions,resulting in a high quality estate comprising some 2,412 pubs as at October2005. Greene King's pubs are typically well presented with a strong individuallocal identity, supported where necessary by quality branding and appealing to abroad range of customers at different times of the week. Greene King is currently structured into four businesses: Pub Company operatingmanaged pubs; Pub Partners operating tenanted and leased pubs; Brewing Companyrunning the brewing and distribution business in England; and Belhaven, whichperforms all of these functions in Scotland. Pub Company As the managed house division of Greene King, Pub Company comprised 783 pubs asat October 2005 and has four operating divisions: • Real Pubs (349 pubs): community pubs with a regular local customer baseand an emphasis on sporting events rather than food; • Town Local (156 pubs): town centre and traditional town local pubs; • Inns (152 pubs): pubs which are characterised by attractive locations,traditional furnishings and individual pub names. This division includes the OldEnglish Inns business and the Wayside Inns acquired as part of Laurel in 2004;and • Hungry Horse (126 pubs): the only overtly branded outlets, focusing onurban community sites. Pub Company recorded trading profits of £50.3 million for the 24 weeks ended 16October 2005. In Greene King's latest trading statement, total like-for-likesales in Pub Company were +1.8% for the 51 weeks ended 23 April 2006. Pub Partners Pub Partners is the tenanted and leased pub business of the Greene King Groupand comprised 1,346 pubs as at October 2005. Historically strengthened by theacquisitions of Morland, Marstons, Morrells and Ridley's, Pub Partners has astrong, effective policy of working to attract the most suitable licensees andproviding them with a market leading support package. Pub Partners recordedtrading profits of £29.0 million for the 24 weeks ended 16 October 2005. InGreene King's latest trading statement, total like-for-like sales in PubPartners were +2.1% for the 51 weeks ended 23 April 2006. Brewing Company Greene King has an established reputation as one of the United Kingdom's leadingbreweries; its products have wide appeal both within and outside Greene King'sown pub estate. This is demonstrated by the fact that 79% of the beer brewed issold through external channels, comprising the independent free trade, on-tradenational accounts, take home trade and export markets. Amongst Greene King's own brands are Greene King IPA, Abbot Ale, Old SpeckledHen and Ruddles. In addition to these core brands, Greene King brews over 15repertoire brands, both real ales and keg ales. In the 51 weeks ended 23 April2006, total beer sales by volume were up 7% on the prior year. This growth hasbeen achieved by continued focus and investment in its beer brands, supported byregular advertising, promotions and marketing. These factors continue to beunderpinned by its commitment to producing quality beer products. Tradingprofits were £9.9 million for the 24 weeks ended 16 October 2005. Belhaven Belhaven was acquired by Greene King in October 2005, expanding the Group'spresence in the important Scottish market. As at October 2005, the divisionoperated 283 pubs split between 97 managed and 186 tenanted or leased. Over 90%of the estate is freehold. The division also brews Scotland's Number 1 draughtale brand, Belhaven Best, as well as a number of other quality cask keg, bottledand canned products. In the 26 weeks ended 2 October 2005 (unaudited) tradingprofits were £11.3 million. For the year ended 1 May 2005, the Greene King Group recorded total sales of£707.5 million, trading profits before exceptional items of £158.3 million andprofit before tax and exceptional items of £95.7 million. As at 1 May 2005, theGreene King Group had net assets of £651.9 million. For the 24 weeks ended 16 October 2005, the Greene King Group recorded totalsales of £359.9 million, trading profit before exceptional items of £86.2million and profit before tax and exceptional items of £55.8 million. Theseresults included 2 weeks' contribution from Belhaven. As at 16 October 2005,the Greene King Group had net assets of £702.4 million. 11. Financing of the Proposals The Proposals will be financed from new banking facilities arranged by BarclaysBank plc under the Facility Agreement. The maximum cash consideration payable bythe Offeror under the terms of the Proposals (assuming all outstanding optionswith an exercise price at or below the price being offered for Hardys & HansonsShares are capable of being, and are, exercised) will be approximately £273million, including the declared interim dividend. Citigroup and PricewaterhouseCoopers have confirmed that they are satisfied thatsufficient resources are available to the Offeror to satisfy in full the cashconsideration payable under the terms of the Proposals. 12. Implementation Agreements and Inducement Fee Hardys & Hansons, Greene King and the Offeror have entered into the Hardys &Hansons Implementation Agreement which provides, inter alia, for theimplementation of the Hardys & Hansons Scheme and contains assurances andconfirmations between the parties, including provisions to implement the Hardys& Hansons Scheme on a timely basis and governing the conduct of the business ofHardys & Hansons. In the Hardys & Hansons Implementation Agreement, Hardys & Hansons has agreed tocertain non-solicitation commitments with Greene King and the Offeror bindingupon Hardys & Hansons and the Hardys & Hansons Group. The Hardys & Hansons Implementation Agreement shall, save in respect of itsinducement fee provisions and any other accrued rights thereunder, terminate incertain circumstances, including: • by notice from Greene King and the Offeror following a material breachby Hardys & Hansons of any of its obligations as to the conduct of Hardys &Hansons' business and non-solicitation commitments referred to above; • by notice from Greene King and the Offeror if a Third Party Transactionbecomes or is declared wholly unconditional or is completed; • if the Hardys & Hansons Scheme is not sanctioned by Hardys & HansonsScheme Shareholders at the Hardys & Hansons Court Meeting or the Hardys &Hansons EGM Resolutions are not approved at the Hardys & Hansons ExtraordinaryGeneral Meeting or the Hardys & Hansons Class Meeting Resolutions are notapproved at the Hardys & Hansons Class Meeting; • if the Hardys & Hansons Court Order is not granted or (save as agreedby Hardys & Hansons, Greene King and the Offeror) the Hardys & Hansons Schemehas not become effective on or before the date six months after the date of thisannouncement; or • by notice from one party to the other parties if the Hardys & HansonsDirectors withdraw, modify or qualify their recommendation at any time prior tothe Hardys & Hansons Court Meeting or at any time after the approval of theHardys & Hansons Scheme by the Hardys & Hansons Scheme Shareholders at theHardys & Hansons Court Meeting but before the grant of the Hardys & HansonsCourt Order, the Hardys & Hansons Directors decide not to proceed with theHardys & Hansons Scheme. Hardys & Hansons has agreed to pay Greene King an inducement fee of one percent. of (i) the value of the existing issued ordinary share capital of Hardys &Hansons and (ii) the existing issued share capital of HHHL in each casecalculated by reference to the applicable offer price for such shares, if: • the Hardys & Hansons Directors or the HHHL Directors withdraw or adversely modify their recommendation or recommend a Third Party Transaction (other than by reason of a failure by Greene King or any of its subsidiaries to comply with its obligations under the Code or by reason of Greene King or the Offeror not having all authorisations required under applicable law or regulation to implement the Schemes) and thereafter either (a) the Hardys & Hansons Scheme Document or the HHHL Scheme Document is not issued (with the consent of the Panel) or (b) the Hardys & Hansons Proposals lapse or is withdrawn; or • a Third Party Announcement is made and the Third Party Transaction referred to in such announcement, or any other Third Party Transaction announced after the Proposals have been announced, subsequently becomes or is declared unconditional in all respects or is completed or becomes effective, provided that Greene King and the Offeror (i) have not released the persons giving irrevocable undertakings from their obligations under such undertakings or otherwise waived their rights under such undertakings and (ii) have taken all reasonable steps to enforce such undertakings (including by seeking orders for their specific performance). HHHL, Greene King and the Offeror have entered into the HHHL ImplementationAgreement which provides, inter alia, for the implementation of the HHHL Schemeand contains assurances and confirmations between the parties, includingprovisions to implement the HHHL Scheme on a timely basis and governing theconduct of the business of HHHL. In the HHHL Implementation Agreement, HHHL has agreed to certainnon-solicitation commitments with Greene King and the Offeror. The HHHL Implementation Agreement shall terminate in certain circumstances,including: • by notice from Greene King and the Offeror following a material breachby HHHL of any of its obligations as to the conduct of HHHL's business andnon-solicitation commitments referred to above; • by notice from Greene King and the Offeror if a Third Party Transactionbecomes or is declared wholly unconditional or is completed; • if the HHHL Scheme is not sanctioned by shareholders of HHHL at theHHHL Court Meetings or the HHHL EGM Resolutions are not approved at the HHHLExtraordinary General Meeting or the HHHL Class Meeting Resolutions are notapproved at the HHHL Class Meetings; • if the HHHL Court Order is not granted or (save as agreed by HHHL,Greene King and the Offeror) the HHHL Scheme has not become effective on orbefore the date six months after the date of this announcement; or • by notice from one party to the other parties if the HHHL Directorswithdraw, modify or qualify their recommendation at any time prior to the HHHL ACourt Meeting or at any time after the approval of the HHHL Scheme by the HHHLShareholders at the HHHL Court Meetings but before the grant of the HHHL CourtOrder, the HHHL Directors decide not to proceed with the HHHL Scheme. 13. Hardys & Hansons Share Schemes Participants in the Hardys & Hansons Share Schemes will be contacted regardingthe effect of the Proposals on their rights under those schemes and appropriateproposals will be made to such participants in due course. 14. Structure of the Proposals The Proposals are to be effected by means of two schemes of arrangement undersection 425 of the Companies Act. The Hardys & Hansons Proposals will beimplemented by means of the Hardys & Hansons Scheme and the HHHL Proposals willbe implemented by means of the HHHL Scheme. Hardys & Hansons and HHHL willapply to the Court to sanction the Hardys & Hansons Scheme and the HHHL Schemerespectively and to confirm the cancellation or transfer of the relevant SchemeShares, in consideration for which the Scheme Shareholders on the register atthe Scheme Record Time will receive cash (or Loan Notes) on the basis describedin paragraphs 2 and 3 above. The transfer of or cancellation and the subsequentissue of new shares in Hardys & Hansons and HHHL to the Offeror provided for inthe relevant Schemes will result in Hardys & Hansons and HHHL becomingwholly-owned subsidiaries of the Offeror. To become effective, the Hardys & Hansons Scheme requires, amongst other things,the approval by a majority in number of the Hardys & Hansons Scheme Shareholdersrepresenting at least three-fourths in value of the Hardys & Hansons SchemeShares voted, either in person or by proxy, at the Hardys & Hansons CourtMeeting, together with the sanction of the Court, the passing of the Hardys &Hansons Class Meeting Resolutions at the Hardys & Hansons Class Meeting and thepassing of the Hardys & Hansons EGM Resolutions at the Hardys & HansonsExtraordinary General Meeting. Upon the Hardys & Hansons Scheme becomingeffective, it will be binding on all Hardys & Hansons Shareholders, irrespectiveof whether or not they attended or voted at the Hardys & Hansons Court Meeting,the Hardys & Hansons Class Meeting or the Hardys & Hansons Extraordinary GeneralMeeting. To become effective, the HHHL Scheme requires, amongst other things, theapproval by a majority in number representing at least three-fourths in value ofeach of the HHHL A Shareholders and the HHHL B Shareholders (either in person orby proxy) voting separately at the HHHL A Court Meeting and the HHHL B CourtMeeting, together with the sanction of the Court, the passing of the HHHL ClassMeeting Resolutions at the HHHL Class Meetings and the passing of the HHHL EGMResolutions at the HHHL Extraordinary General Meeting. Upon the HHHL Schemebecoming effective, it will be binding on all HHHL Shareholders, irrespective ofwhether or not they attended or voted at the HHHL Court Meetings, the HHHL ClassMeetings or the HHHL Extraordinary General Meeting. None of the Proposals will become effective unless all of the relevant approvalsand sanctions are obtained. The Proposals are expected to be effective on oraround 5 September 2006. The conditions to the Proposals are set out in full in Appendix I and II to thisannouncement. The Hardys & Hansons Scheme is conditional, inter alia, upon: • the Hardys & Hansons Scheme becoming effective by not later than sixmonths from the date of this announcement or such later date (if any) as(subject to the Code) the Offeror and Hardys & Hansons may agree and (ifrequired) the Court may allow; • the approval by a majority in number representing three-fourths or morein value of the Hardys & Hansons Shareholders present and voting, either inperson or by proxy, at the Hardys & Hansons Court Meeting; • the approval of the variation or abrogation or certain rights attachingto the Hardys & Hansons Shares by the Hardys & Hansons Shareholders at theHardys & Hansons Class Meeting; • the passing of the special resolution required to implement the Hardys& Hansons Scheme at the Hardys & Hansons Extraordinary General Meeting; • the sanction of the Hardys & Hansons Scheme (with or withoutmodification, on terms acceptable to Hardys & Hansons and the Offeror) andconfirmation of the reduction of share capital provided for by the Hardys &Hansons Scheme by the Court and the delivery of an office copy of the Hardys &Hansons Court Order to the Registrar of Companies; • the sanction of the HHHL Scheme (with or without modification, on termsacceptable to Hardys & Hansons and the Offeror) and confirmation of thereduction of share capital provided for by the HHHL Scheme by the Court; and • the conditions which are not otherwise identified above being satisfiedor waived. The HHHL Scheme is conditional, inter alia, upon: • the approval by a majority in number representing three-fourths or morein value of the HHHL A Shareholders present and voting, either in person or byproxy, at the HHHL A Court Meeting; • the approval by a majority in number representing three-fourths or morein value of the HHHL B Shareholders present and voting, either in person or byproxy, at the HHHL B Court Meeting; • the passing of the special resolution required to implement the HHHLScheme at the HHHL Extraordinary General Meeting; • the approval of the variation or abrogation or certain rights attachingto the HHHL A Shares by the HHHL A Shareholders at the HHHL A Class Meeting; • the approval of the variation or abrogation or certain rights attachingto the HHHL B Shares by the HHHL B Shareholders at the HHHL B Class Meeting; • the sanction of the HHHL Scheme (with or without modification, on termsacceptable to HHHL and the Offeror) and confirmation of the reduction of sharecapital provided for by the HHHL Scheme by the Court and the delivery of anoffice copy of the HHHL Court Order to the Registrar of Companies; and • the sanction of the Hardys & Hansons Scheme (with or withoutmodification, on terms acceptable to HHHL and the Offeror) and confirmation ofthe reduction of share capital provided for by the HHHL Scheme by the Court. It is intended that, prior to the Schemes becoming effective, and subject toapplicable requirements of the London Stock Exchange, the Offeror will procurethat Hardys & Hansons will apply to the London Stock Exchange for the Hardys &Hansons Shares to cease trading on AIM to take effect on the Effective Date. Subject to the Proposals becoming effective, share certificates in respect ofHardys & Hansons Shares and the HHHL Shares will cease to be valid on theEffective Date and should be destroyed. In addition, on the Effective Date,entitlements to Hardys & Hansons Shares held within the CREST system will becancelled. Further details of the Schemes will be contained in the Scheme Document. Expected timetable of principal events: Event Posting of Scheme Document 20 July 2006 Court Meeting, Class Meeting, Extraordinary General Meeting 14 August 2006 Court hearing to sanction the Scheme and confirm reduction of share capital (if the Scheme is 4 September 2006approved by Shareholders) Effective Date of the Scheme (if sanction and confirmation of the Court is received) 5 September 2006 Latest date for consideration to be posted to Shareholders (if Scheme becomes effective on 5 19 September 2006September 2006) A more detailed timetable will be included in the Scheme Document. 15. Disclosure of interests in Hardys & Hansons Shares and HHHL Shares Other than as set out in this announcement, neither the Offeror nor any of thedirectors of the Offeror, nor, so far as the Offeror is aware, any person actingin concert with the Offeror, owns or controls any shares in Hardys & Hansons orHHHL or has an interest in or right to subscribe for shares in Hardys & Hansonsor HHHL or has any short position in relation to shares in Hardys & Hansons orHHHL (whether conditional or absolute, including any short position under aderivative, any agreement to sell or any delivery obligation or right to requireanother person to purchase or take delivery of any shares in Hardys & Hansons orHHHL). 16. General The Proposals will be made on the terms and subject to the conditions set out infull in Appendix I and II and to be set out in each Scheme Document, the Formsof Proxy and the Loan Note Forms of Election. Each Scheme Document will includefull details of the relevant Scheme, together with notices of the Court Meeting,the Class Meeting and the Extraordinary General Meeting and the expectedtimetable of the Proposals. The Scheme Document, the Forms of Proxy and the LoanNote Forms of Election will be dispatched to Shareholders in due course. TheProposals will be subject to the applicable requirements of the Code, the Paneland the London Stock Exchange. The bases and sources of certain financialinformation contained in this announcement are set out in Appendix III. Certainterms used in this announcement are defined in Appendix IV. Save as disclosed above, neither the Offeror nor, so far as the Offeror isaware, any person acting in concert with the Offeror, owns or controls anyHardys & Hansons Shares or any securities convertible or exchangeable intoHardys & Hansons Shares or any rights to subscribe for or purchase the same, orholds any options (including traded options) in respect of, or has any option toacquire, any Hardys & Hansons Shares or has entered into any derivativesreferenced to Hardys & Hansons Shares ("Relevant Hardys & Hansons Securities")which remain outstanding, nor does any such person have any arrangement inrelation to Relevant Hardys & Hansons Securities. For these purposes, "arrangement" includes any indemnity or option arrangement, any agreement orunderstanding, formal or informal, or whatever nature, relating to RelevantHardys & Hansons Securities which may be an inducement to deal or refrain fromdealing in such securities. In the interests of secrecy prior to thisannouncement, the Offeror has not made any enquires in this respect of certainparties who may be deemed by the Panel to be acting in concert with it for thepurposes of the Proposals. Enquiries of such parties will be made as soon aspracticable following the date of this announcement and any material disclosurein respect of such parties will be included in the Scheme Document. Enquiries Greene King 01284 763 222 Rooney Anand Citigroup 020 7986 4000 David Wormsley Anthony Gutman PricewaterhouseCoopers 020 7583 5000 Simon Boadle Sean Williams Financial Dynamics 020 7831 3113 Charles Watenphul Ben Foster Hardys & Hansons 0115 938 3611 Jonathan Webster Hawkpoint 020 7665 4500 Patrick Wilson Joseph Ayala College Hill 020 7457 2020 Justine Warren Matthew Smallwood Citigroup, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting for the Offeror and no one else inconnection with the Proposals and will not be responsible to anyone other thanthe Offeror for providing the protections afforded to clients of Citigroup orfor providing advice in relation to the Proposals or any other matters referredto in this announcement. PricewaterhouseCoopers, which is authorised and regulated in the United Kingdomby the Financial Services Authority for designated investment business, isacting for the Offeror and for no one else in relation to the Proposals and willnot be responsible to anyone other than the Offeror for providing theprotections afforded to clients of PricewaterhouseCoopers or for giving advicein relation to the Proposals or any other matters referred to in thisannouncement. Hawkpoint, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting for Hardys & Hansons and HHHL and no oneelse in connection with the Proposals and will not be responsible to anyoneother than Hardys & Hansons and HHHL for providing the protections afforded toclients of Hawkpoint or for providing advice in relation to the Proposals or anyother matter referred to in this announcement. This announcement does not constitute an offer to sell or an invitation topurchase or subscribe for any securities. Any response in relation to theProposals should be made only on the basis of the information contained in theScheme Document or any document by which the Offer is made. Hardys & Hansons will prepare the Scheme Documents to be distributed to Hardys &Hansons Shareholders and HHHL Shareholders. Hardys & Hansons and Greene Kingurge Hardys & Hansons Shareholders and HHHL Shareholders to read the SchemeDocuments when they become available because they will contain importantinformation relating to the Proposals. The availability of the Loan Notes under the terms of the Schemes to persons whoare not resident in the United Kingdom may be affected by the laws of therelevant jurisdictions in which they are located. Persons who are not residentin the United Kingdom should inform themselves of, and observe, any applicablerequirements. The Loan Notes to be issued to Hardys & Hansons Shareholders and HHHLShareholders under the Proposals have not been, and will not be listed on anystock exchange and have not been and will not be registered under the USSecurities Act of 1933, as amended, or under the applicable securities laws ofany state, district or other jurisdiction of the United States, or of Canada,Australia, Japan or any other jurisdication, and no regulatory clearances inrespect of the Loan Notes have been, or will be, applied for in any suchjurisdiction. Accordingly, unless an exemption under such relevant securitieslaws is applicable, the Loan Notes are not being, and may not be, offered, sold,resold, delivered or distributed, directly or indirectly, in or into the UnitedStates, Canada, Australia, Japan, or any other jurisdication in which an offerof Loan Notes would result in the violation of relevant laws, or requireregistration of the Loan Notes, or to, or for the account or benefit of, any USperson or resident of Canada, Australia, Japan or any other such jurisdication. The availability of the Proposals to persons not resident in the United Kingdommay be affected by the laws of the relevant jurisdictions. Such persons shouldinform themselves about and observe any applicable requirements of thosejurisdictions. Under the provisions of Rule 8.3 of the Takeover Code (the "Code"), if anyperson is, or becomes, "interested" (directly or indirectly) in 1% or more ofany class of "relevant securities" of Hardys & Hansons, all "dealings" in any "relevant securities" of that company (including by means of an option in respectof, or a derivative referenced to, any such "relevant securities") must bepublicly disclosed by no later than 3.30 pm (London time) on the London businessday following the date of the relevant transaction. This requirement willcontinue until the Effective Date or the date on which the Hardys & HansonsScheme is withdrawn. If two or more persons act together pursuant to anagreement or understanding, whether formal or informal, to acquire an "interest"in "relevant securities" of Hardys & Hansons, they will be deemed to be a singleperson for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevantsecurities" of Hardys & Hansons by the offeror or Hardys & Hansons, or by any oftheir respective "associates", must be disclosed by no later than 12.00 noon(London time) on the London business day following the date of the relevanttransaction. A disclosure table, giving details of the companies in whose "relevant"securities "dealings" should be disclosed and the number of such securities inissue, can be found on the Takeover Panel's website atwww.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the prices ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership of control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation markets are defined in the Code, which can also be found onthe Panel's website. If you are in any doubt as to whether or not you arerequired to disclose a "dealing" under Rule 8, you should consult the Panel. APPENDIX I Conditions to the implementation of the Hardys & Hansons Scheme and the Hardys &Hansons Acquisition 1 Conditions of the Hardys & Hansons Scheme The Hardys & Hansons Acquisition will be conditional upon the Hardys & HansonsScheme becoming unconditional and becoming effective by not later than sixmonths from the date of this announcement or such later date (if any) as(subject to the Code) the Offeror and Hardys & Hansons may agree and (ifrequired) the Court may allow. The Hardys & Hansons Scheme will be conditional upon: 1.1 the approval of the Hardys & Hansons Scheme by a majority innumber representing three-fourths or more in value of the Hardys & HansonsShareholders present and voting, either in person or by proxy, at the CompanyCourt Meeting, or at any adjournment thereof; 1.2 the approval of the variation or abrogation of certain rightsattaching to the Hardys & Hansons Shares by the Hardys & Hansons Shareholders atthe Hardys & Hansons Class Meeting; 1.3 the resolution(s) in connection with or required to approve andimplement the Hardys & Hansons Scheme being duly passed by the requisitemajority at the Hardys & Hansons Extraordinary General Meeting, or at anyadjournment thereof; 1.4 the sanction (with or without modification, on terms acceptableto the Offeror and the Company) of the Hardys & Hansons Scheme and confirmationof the reduction of capital involved therein by the Court and an office copy ofthe Hardys & Hansons Court Order and the minute of such reduction attachedthereto being delivered for registration to the Registrar of Companies inEngland and Wales and, in relation to the reduction of capital, beingregistered; and 1.5 the sanction (with or without modification, on terms acceptableto the Offeror and the Company) of the HHHL Scheme and confirmation of thereduction of capital involved therein by the Court. 2 Conditions of the Hardys & Hansons Acquisition Hardys & Hansons and the Offeror have agreed that, subject as stated inparagraph 3 below, application to the Court to sanction the Hardys & HansonsScheme and to confirm the capital reduction will not be made unless conditions1.1, 1.2, and 1.3 above have been fulfilled and unless immediately prior to thehearing of the petition to sanction the Hardys & Hansons Scheme the followingconditions are satisfied or waived as referred to below: 2.1 no central bank, government or governmental, quasi-governmental,supranational, statutory or investigative body, trade agency, court,professional association, or any other such body or person in any jurisdiction(each a "Third Party") having given notice of a decision to take, institute orthreaten any action, proceeding, suit, investigation, enquiry or reference, orhaving required any action to be taken, or having enacted, made or proposed anystatute, regulation, decision or order which would: 2.1.1 make the Hardys & Hansons Acquisition, its implementation or theacquisition or proposed acquisition of any Hardys & Hansons Shares by theOfferor or any member of the Wider Offeror Group void, unenforceable or illegal,or restrict, prohibit or delay to a material extent or otherwise materiallyinterfere with the implementation of, or impose material additional conditionsor obligations with respect to, or otherwise materially challenge or requirematerial amendment of, the Hardys & Hansons Acquisition or the acquisition ofany Hardys & Hansons Shares by the Offeror: 2.1.2 result in a material delay in the ability of the Offeror, or renderthe Offeror unable, to acquire some or all of the Hardys & Hansons Shares orrequire a divestiture by the Offeror or any member of the Wider Offeror Group ofany Hardys & Hansons Shares; 2.1.3 require, prevent or delay the divestiture, or alter the termsenvisaged for any proposed divestiture, by the Offeror or any member of theWider Offeror Group or by any member of the Wider Hardys & Hansons Group of allor any part of their respective businesses, assets or properties, or impose anylimitation on their ability to conduct their respective businesses (or any ofthem) or to own their respective assets or properties or any part of them; 2.1.4 impose any limitation on, or result in a material delay in, theability of the Offeror or any member of the Wider Offeror Group to acquire or tohold or to exercise effectively, directly or indirectly, all rights of ownershipof shares, loans or other securities (or the equivalent) in Hardys & Hansons orthe ability of any member of the Wider Hardys & Hansons Group or the Offeror tohold or exercise effectively any rights of ownership of shares, loans or othersecurities in or in any respect which is material in the context of the WiderHardys & Hansons Group to exercise management control over any member of theWider Hardys & Hansons Group; 2.1.5 require any member of the Wider Offeror Group or of the WiderHardys & Hansons Group to acquire or to offer to acquire any shares or othersecurities (or the equivalent) in any member of the Wider Hardys & Hansons Groupowned by any third party; 2.1.6 result in any member of the Wider Hardys & Hansons Group ceasing tobe able to carry on business under any name which it presently does so, theconsequences of which would be material in the context of the Wider Hardys &Hansons Group; 2.1.7 impose any limitation that is material in the context of thebusiness of the Wider Hardys & Hansons Group on the ability of any member of theWider Offeror Group or the Wider Hardys & Hansons Group to integrate orco-ordinate the business of any member of the Wider Hardys & Hansons Group, orany part of it, with that of any member(s) of the Wider Offeror Group, or anypart of it, with that of any member(s) of the Wider Offeror Group and/or anyother member of the Hardys & Hansons Group; 2.1.8 otherwise adversely affect the business, assets, liabilities, orprofits or prospects of any member of the Wider Offeror Group or of the WiderHardys & Hansons Group; in each case to an extent which is material in the context of the Wider Hardys &Hansons Group taken as a whole; and all applicable waiting and other time periods during which any such ThirdParty could take, institute or threaten any such action, proceeding, suit,investigation, enquiry or reference or otherwise so intervene having expired,lapsed or been terminated; 2.2 all necessary notifications and filings having been made inconnection with the Hardys & Hansons Acquisition and all statutory andregulatory obligations in connection with the Hardys & Hansons Acquisition inany jurisdiction having been complied with and all material authorisations,orders, recognitions, grants, consents, clearances, confirmations, certificates,licences, permissions and approvals ("Authorisations") deemed reasonablynecessary or appropriate by the Offeror in any jurisdiction for, or in respectof, the Hardys & Hansons Acquisition and the acquisition or the proposedacquisition of the Hardys & Hansons Shares by the Offeror or any member of theWider Offeror Group having been obtained in terms reasonably satisfactory to theOfferor from all appropriate Third Parties, all or any applicable waiting andother time periods have expired, lapsed or been terminated (as appropriate) andall such Authorisations (together with all material Authorisations deemedreasonably necessary or appropriate to carry on the business of any member ofthe Wider Hardys & Hansons Group) remaining in full force and effect at the timeat which the Hardys & Hansons Scheme becomes effective and there being nowritten notice of any intention to revoke, suspend, restrict, amend or not torenew any such Authorisations; 2.3 save as (i) disclosed in writing to any member of the WiderOfferor Group or any of its advisers or (ii) disclosed in the Annual Report or(iii) publicly announced through a Regulatory Information Service, in each caseprior to the date of this announcement, there being no provision of anyarrangement, agreement, lease, licence, permit or other instrument to which anymember of the Wider Hardys & Hansons Group is a party or by or to which any suchmember or any of its assets is or may be bound or be subject, which as aconsequence of the Hardys & Hansons Acquisition or the acquisition or theproposed acquisition by the Offeror or any member of the Wider Offeror Group ofany shares or other securities (or the equivalent) in Hardys & Hansons orbecause of a change in the control or management of any member of the WiderHardys & Hansons Group or otherwise, would result in: 2.3.1 any monies borrowed by, or any other indebtedness, actual orcontingent, of, any member of the Wider Hardys & Hansons Group being or becomingrepayable, or being capable of being declared repayable immediately or prior totheir or its stated maturity, or the ability of any such member to borrow moniesor incur any indebtedness being withdrawn or inhibited; 2.3.2 the creation or enforcement of any mortgage, charge or othersecurity interest, over the whole or any part of the business, property orassets of any member of the Wider Hardys & Hansons Group or any such mortgage,charge or other security interest (whenever arising or having arisen) becomingenforceable; 2.3.3 any such arrangement, agreement, lease, licence, permit or otherinstrument being terminated or adversely modified or affected or any onerousobligation or liability arising or any adverse action being taken thereunder; 2.3.4 (other than in the ordinary course of business) any assets orinterests of any member of the Wider Hardys & Hansons Group being or falling tobe disposed of or any right arising under which any such asset or interest couldbe required to be disposed of; 2.3.5 any such member of the Wider Hardys & Hansons Group ceasing to beable to carry on business under any name under which it presently does so; 2.3.6 the value of, or financial or trading position of, Hardys & Hansonsor any member of the Wider Hardys & Hansons Group being prejudiced or adverselyaffected; or 2.3.7 (other than in the ordinary course of business) the creation of anyliability (actual or contingent) by any member of the Wider Hardys & HansonsGroup; in each case to an extent which is material in the context of the Wider Hardys &Hansons Group taken as a whole; 2.4 save as (i) disclosed in writing to any member of the WiderOfferor Group or any of its advisers or (ii) disclosed in the Annual Report or(iii) publicly announced through Regulatory Information Service, in each caseprior to the date of this announcement, no member of the Wider Hardys & HansonsGroup having, since 30 September 2005: 2.4.1 issued or agreed to issue or authorised or announced its intentionto authorise the issue of additional shares of any class, or securitiesconvertible into, or exchangeable for, or rights, warrants or options tosubscribe for or acquire, any such shares or convertible securities (save asbetween Hardys & Hansons and members of the Hardys & Hansons Group and save forthe issue of Hardys & Hansons Shares to employees on the exercise or vesting ofoptions or awards granted under, or the grant of options or awards under, theHardys & Hansons Employee Share Schemes); 2.4.2 recommended, declared, paid or made or proposed to recommend,declare, pay or make any bonus issue, dividend or other distribution whetherpayable in cash or otherwise other than dividends (or other distributionswhether payable in cash or otherwise) lawfully paid or made to another member ofthe Hardys & Hansons Group; 2.4.3 implemented, effected, authorised, proposed or announced itsintention to implement, effect or authorise any merger, demerger,reconstruction, amalgamation, scheme, commitment or acquisition or disposal ofassets or shares (or the equivalent thereof) in any undertaking or undertakings(save as between Hardys & Hansons and members of the Hardys & Hansons Group)that are material in the context of the Hardys & Hansons Group taken as a wholeor any change in its share or loan capital; 2.4.4 (save as between Hardys & Hansons and members of the Hardys &Hansons Group and other than in the ordinary course of business) disposed of, ortransferred, mortgaged or created any security interest over any asset or anyright, title or interest in any asset that is material in the context of theHardys & Hansons Group taken as a whole or authorised or announced any intentionto do so; 2.4.5 issued, authorised or proposed, or announced an intention toauthorise or propose the issue of any debentures or (save for intra-Hardys &Hansons Group transactions or transactions under existing credit arrangements)incurred any indebtedness or contingent liability which is material in thecontext of the Hardys & Hansons Group as a whole; 2.4.6 entered into or varied or authorised or announced its intention toenter into or vary any contract, arrangement, agreement, transaction orcommitment (whether in respect of capital expenditure or otherwise) which is ofa long term, unusual or onerous nature or magnitude or which involves or isreasonably likely to involve an obligation of such nature or magnitude which is,in any case, or which is or is likely be restrictive on the business of anymember of the Wider Hardys & Hansons Group, which is, in any such case, materialin the context of the Hardys & Hansons Group; 2.4.7 entered into or varied to a material extent or authorised, proposedor announced its intention to enter into or vary to a material extent the termsof, or make any offer (which remains open for acceptance) to enter into or varyto a material extent the terms of, any service agreement with any director or,save for salary increases, bonuses or variations of terms in the ordinarycourse, senior executive of Hardys & Hansons; 2.4.8 purchased, redeemed or repaid or announced a proposal to purchase,redeem or repay any of its own shares or other securities (or the equivalent) orreduced or made any other change to any part of its share capital, save for anyshares allotted upon the exercise or vesting of options or awards granted underthe Hardys & Hansons Employee Share Schemes or as between Hardys & Hansons andmembers of the Hardys & Hansons Group; 2.4.9 waived, compromised or settled any claim which is material in thecontext of the Hardys & Hansons Group as a whole; 2.4.10 terminated or varied the terms of any agreement or arrangementbetween any member of the Hardys & Hansons Group and any other person in amanner which would or might reasonably be expected to have a material adverseeffect on the financial position or prospects of the Hardys & Hansons Grouptaken as a whole; 2.4.11 (save as disclosed on publicly available registers) made anyalteration to its memorandum or articles of association; 2.4.12 made or agreed or consented to any significant change to the terms ofthe trust deeds constituting the pension schemes established for its directorsand/or employees and/or their dependants or to the benefits which accrue, or tothe pensions which are payable, thereunder, or to the basis on whichqualification for or accrual or entitlement to such benefits or pensions arecalculated or determined or to the basis under which the liabilities (includingpensions) of such pension schemes are funded or made, or agreed or consented toany change to the trustees involving the appointment of a trust corporation; 2.4.13 been unable, or admitted in writing that it is unable, to pay itsdebts or having stopped or suspended (or threatened to stop or suspend) paymentof its debts generally or ceased or threatened to cease carrying on all or asubstantial part of any business which is material in the context of the Hardys& Hansons Group as a whole; 2.4.14 (other than in respect of a member which is dormant and was solventat the relevant time) taken any corporate action or had any action orproceedings or other steps instituted against it for its winding-up (voluntaryor otherwise), dissolution or reorganisation or of the appointment of areceiver, administrator, administrative receiver, trustee or similar officer ofall or any material part of its assets or revenues or any analogous proceedingsin any jurisdiction or appointed any analogous person in any jurisdiction; or 2.4.15 entered into any agreement, arrangement or commitment or passed anyresolution or made any proposal or announcement with respect to, or to effect,any of the transactions, matters or events referred to in this condition 2.4; 2.5 since 30 September 2005, save as (i) disclosed in writing to anymember of the Wider Offeror Group or any of its advisers or (ii) disclosed inthe Annual Report or (iii) publicly announced through a Regulatory InformationService, in each case prior to the date of this announcement, there having been: 2.5.1 no adverse change in the business, assets, financial or tradingposition or profits or prospects of any member of the Wider Hardys & HansonsGroup which is material in the context of the Wider Hardys & Hansons Group takenas a whole; or 2.5.2 no litigation, arbitration proceedings, prosecution or other legalproceedings having been announced or instituted by or against or remainingoutstanding against or in respect of any member of the Wider Hardys & HansonsGroup and no enquiry or investigation by or complaint or reference to any ThirdParty against or in respect of any member of the Wider Hardys & Hansons Grouphaving been threatened, announced or instituted or remaining outstanding,against or in respect of any member of the Wider Hardys & Hansons Group andwhich in any such case might reasonably be expected to have a material adverseeffect on the Wider Hardys & Hansons Group taken as a whole; 2.6 save as (i) disclosed in writing to any member of the WiderOfferor Group or any of its advisers or (ii) disclosed in the Annual Report or(iii) publicly announced through a Regulatory Information Service, in each caseprior to the date of this announcement, the Offeror not having discovered: 2.6.1 that the financial, business or other information concerning theWider Hardys & Hansons Group publicly announced or disclosed at any time by oron behalf of any member of the Wider Hardys & Hansons Group is misleading,contains a misrepresentation of fact or omits to state a fact necessary to makethe information contained therein not misleading and which is, in any case,material in the context of the Wider Hardys & Hansons Group; or 2.6.2 that any member of the Wider Hardys & Hansons Group is subject toany liability, contingent or otherwise, which is material in the context of theWider Hardys & Hansons Group taken as a whole; and 2.7 in relation to any release, emission, discharge, disposal orother fact or circumstance which causes or might reasonably be expected to causepollution of the environment or harm to human health, no past or present memberof the Wider Hardys & Hansons Group having, in any manner or to an extent whichis material in the context of the Wider Hardys & Hansons Group (i) committed anyviolation of any laws, statutes, ordinances or regulations of any Third Partyand/or (ii) incurred any liability (whether actual or contingent) with respectthereto. For the purposes of these conditions the "Wider Hardys & Hansons Group" meansHardys & Hansons and its subsidiary undertakings, associated undertakings andany other undertaking in which Hardys & Hansons and/or such undertakings(aggregating their interests) have a significant interest and the "Wider OfferorGroup" means the Offeror and its subsidiary undertakings, associatedundertakings and any other undertaking in which the Offeror and/or suchundertakings (aggregating their interests) have a significant interest and forthese purposes "subsidiary undertaking", "associated undertaking" and"undertaking" have the meanings given by the Companies Act, other than paragraph20(1)(b) of Schedule 4A to that Act which shall be excluded for this purpose,and "significant interest" means a direct or indirect interest in 10 per cent ormore of the equity share capital (as defined in the Act). 3 The Offeror reserves the right to waive, in whole or in part,all or any of the above conditions 2.1 to 2.7. 4 The Offeror will not invoke any Condition so as to cause theHardys & Hansons Acquisition not to proceed, to lapse or to be withdrawn unlessthe circumstances which give rise to the right to invoke the Condition are ofmaterial significance to the Offeror in the context of the Hardys & HansonsAcquisition. 5 If the Offeror is required by the Panel to make an offer forHardys & Hansons Shares under the provisions of Rule 9 of the Code, the Offerormay make such alterations to any of the above conditions as are necessary tocomply with the provision of that Rule. 6 The Hardys & Hansons Scheme will not proceed if the Hardys &Hansons Acquisition is referred to the Competition Commission before the date ofthe Hardys & Hansons Court Meeting. 7 The Hardys & Hansons Scheme is governed by English law andwill be subject to the jurisdiction of the English courts, to the conditions setout in this document, in the Forms of Proxy and in the Loan Note Form ofElection. APPENDIX II Conditions to the implementation of the HHHL Scheme 1 The HHHL Scheme will be conditional upon: 1.1 the approval of the HHHL Scheme by a majority in numberrepresenting three-fourths or more in value of the HHHL A Shareholders presentand voting, either in person or by proxy, at the HHHL A Court Meeting, or at anyadjournment thereof; 1.2 the approval of the HHHL Scheme by a majority in numberrepresenting three-fourths or more in value of the HHHL B Shareholders presentand voting, either in person or by proxy, at the HHHL B Court Meeting, or at anyadjournment thereof; 1.3 the resolution(s) in connection with or required to approve andimplement the HHHL Scheme being duly passed by the requisite majority at theHHHL Extraordinary General Meeting, or at any adjournment thereof; 1.4 the approval of the variation or abrogation of certain rightsattaching to the HHHL A Shares by HHHL A Shareholders at the HHHL A ClassMeeting; 1.5 the approval of the variation or abrogation of certain rightsattaching to the HHHL B Shares by HHHL B Shareholders at the HHHL B ClassMeeting; 1.6 the sanction (with or without modification, on terms acceptableto the Offeror and HHHL) of the HHHL Scheme and confirmation of the reduction ofcapital involved therein by the Court and an office copy of the HHHL Court Orderand the minute of such reduction attached thereto being delivered forregistration to the Registrar of Companies in England and Wales and, in relationto the reduction of capital, being registered; and 1.7 the sanction (with or without modification, on terms acceptableto the Offeror and HHHL) of the Hardys & Hansons Scheme and confirmation of thereduction of capital involved therein by the Court. 2 If the Offeror is required by the Panel to make an offer forthe HHHL A Shares and the HHHL B Shares and/or the deferred shares in Hardys &Hansons under the provisions of Rule 9 of the Code, the Offeror may make suchalterations to any of the above conditions as are necessary to comply with theprovision of that Rule. 3 The HHHL Scheme will not proceed if the HHHL Offer is referredto the Competition Commission before the date of the HHHL Court Meetings. 4 The HHHL Scheme is governed by English law and will be subjectto the jurisdiction of the English courts, to the conditions set out in thisdocument, in the Forms of Proxy and in the Loan Note Form of Election. APPENDIX III Bases and Sources of Information (a) The value placed by the Proposals on the existing issued share capital ofHardys & Hansons (approximately £212 million excluding the existing issuedHardys & Hansons deferred ordinary share capital) is based on 20 million Hardys& Hansons Shares in issue on 14 June 2006, the last business day prior to thedate of this announcement. (b) The value placed by the Proposals on the existing issued share capital ofHHHL (approximately £58 million) is based on 150,000 HHHL A Shares and 150,000HHHL B Shares in issue on 14 June 2006, the last business day prior to the dateof this announcement. (c) The equivalent value of the HHHL Proposals placed on the issued ordinaryshares of HHHL is based on 5 million deferred ordinary shares of Hardys &Hansons in issue on 14 June 2006, the last business day prior to the date ofthis announcement. (d) The Closing Prices of the Hardys & Hansons Shares referred to in thisdocument are derived from AIM. (e) Unless otherwise stated, the financial information relating to Hardys &Hansons is extracted from the consolidated financial statements or managementaccounts of Hardys & Hansons for the relevant period. (f) Unless otherwise stated, the financial information relating to the GreeneKing Group is extracted from the consolidated financial statements of the GreeneKing Group for the relevant period. APPENDIX IV Definitions The following definitions apply throughout this announcement unless the context otherwise requires: "Act" or "Companies Act" the Companies Act 1985 (as amended);"AIM" Alternative Investment Market, a market operated by the London Stock Exchange;"Annual Report" the 2005 Hardys & Hansons Annual Report and Accounts;"Australia" the Commonwealth of Australia, its states, territories and possessions and all areas subject to its jurisdiction or any subdivision thereof;"business day" a day on which the London Stock Exchange is open for the transaction of business;"Canada" Canada, its provinces, territories and all areas subject to its jurisdiction and any political sub-division thereof;"Citigroup" Citigroup Global Markets Limited;"Code" the City Code on Takeovers and Mergers;"Class Meeting" the Hardys & Hansons Class Meeting and/or the HHHL A Class Meeting and/or the HHHL B Class Meeting, as the context requires;"Closing Price" the closing middle-market quotation of a Hardys & Hansons Share as derived from AIM;"Competition Commission" the United Kingdom competition authority;"Court" the High Court of Justice in England and Wales;"Court Meeting" the Hardys & Hansons Court Meeting and/or the HHHL A Court Meeting and/or the HHHL B Court Meeting, as the context requires;"CREST" the system for the paperless settlement of trades in securities operated by CREST Co Limited in accordance with the Uncertificated Securities Regulations 2001 (SI 2001 No 3755);"Effective Date" the Hardys & Hansons Scheme Effective Date or the HHHL Scheme Effective Date or each of them, as the context requires;"Extraordinary General Meeting" the Hardys & Hansons Extraordinary General Meeting and/or the HHHL Extraordinary General Meeting, as the context requires;"Facility Agreement" the facility agreement between Greene King, the Offeror, Greene King Brewing and Retailing Limited, Greene King Acquisitions Limited, Greene King Acquisitions No.2 Limited, Greene King Neighbourhood Pub Holdings Limited, Greene King Neighbourhood Estate Pubs Limited, Barclays Capital and Barclays Bank plc dated 15 June 2006;"Financial Services Authority" the Financial Services Authority in its capacity as the competent authority for the purposes of Part VI of the Financial Services and Markets Act 2000;"Forms of Proxy" the forms of proxy for use at the Court Meeting, the Class Meeting and the Extraordinary General Meeting;"Greene King" Greene King plc;"Greene King Directors" the board of directors of Greene King;"Greene King Group" Greene King and its subsidiary undertakings and, where the context permits, each of them;"Hardys & Hansons" Hardys & Hansons p.l.c.;"Hardys & Hansons Acquisition" or "Hardys & the proposed acquisition by the Offeror of the Hardys & HansonsHansons Proposals" Scheme Shares to be effected by means of the Hardys & Hansons Scheme;"Hardys & Hansons Class Meeting" the separate class meeting of Hardys & Hansons Shareholders (and any adjournment thereof) convened in connection with the Hardys & Hansons Proposals;"Hardys & Hansons Class Meeting Resolutions" the resolutions to be proposed at the Hardys & Hansons Class Meeting to approve the variation and abrogation of certain rights attaching to the Hardys & Hansons Shares;"Hardys & Hansons Court Meeting" the meeting of Hardys & Hansons Scheme Shareholders (and any adjournment thereof) to be convened pursuant to an order of the Court under section 425 of the Companies Act for the purposes of considering and, if thought fit, approving the Hardys & Hansons Scheme (with or without amendment);"Hardys & Hansons Court Order" the orders of the Court sanctioning the Hardys & Hansons Scheme under section 425 of the Companies Act and confirming the reduction of share capital provided for by the Hardys & Hansons Scheme under section 137 of the Companies Act;"Hardys & Hansons Directors" the board of directors of Hardys & Hansons;"Hardys & Hansons Extraordinary General Meeting" the extraordinary general meeting of Hardys & Hansons Shareholders (and any adjournment thereof) convened in connection with the Hardys & Hansons Proposals;"Hardys & Hansons EGM Resolutions" the resolutions to be proposed at the Hardys & Hansons Extraordinary General Meeting in connection with the Hardys & Hansons Scheme to approve implementation of the Hardys & Hansons Scheme, certain amendments to the articles of association of Hardys & Hansons for the purposes of approving and implementing the Hardys & Hansons Scheme, any reduction of capital involved in the Hardys & Hansons Scheme and such other matters as may be agreed between Hardys & Hansons, the Offeror and Greene King as necessary or desirable for the purposes of implementing the Hardys & Hansons Scheme;"Hardys & Hansons Group" Hardys & Hansons and its subsidiary undertakings and, where the context permits, each of them;"Hardys & Hansons Implementation Agreement" the agreement between Hardys & Hansons, Greene King and the Offeror, dated 15 June 2006, inter alia, to agree the implementation of the Hardys & Hansons Scheme;"Hardys & Hansons Scheme" the proposed scheme of arrangement under section 425 of the Companies Act between Hardys & Hansons and the Hardys & Hansons Scheme Shareholders, the full terms of which will be set out in the Hardys & Hansons Scheme Document;"Hardys & Hansons Scheme Document" the document to be sent to Hardys & Hansons Shareholders containing and setting out the Hardys & Hansons Scheme and the notices convening the Hardys & Hansons Court Meeting, the Hardys & Hansons Class Meeting and the Hardys & Hansons Extraordinary General Meeting;"Hardys & Hansons Scheme Effective Date" the date on which the Hardys & Hansons Scheme becomes effective in accordance with its terms;"Hardys & Hansons Scheme Shares" (i) the Hardys & Hansons Shares in issue at the date of the Hardys & Hansons Scheme Document (ii) any Hardys & Hansons Shares issued after the date of the Hardys & Hansons Scheme Documents and before the Voting Record Time, and (iii) any Hardys & Hansons shares issued at or after the Voting Record Time and before the Scheme Record Time in respect of which the original or any subsequent holders thereof are, or shall have agreed in writing to be, bound by the Hardys & Hansons Scheme in each case other than any Hardys & Hansons Shares registered in the name of the Offeror or beneficially owned by the Greene King Group;"Hardys & Hansons Scheme Shareholders" holders of Hardys & Hansons Scheme Shares;"Hardys & Hansons Share Schemes" any employees' share scheme operated by Hardys & Hansons or any member of the Hardys & Hansons Group;"Hardys & Hansons Shareholders" holders of Hardys & Hansons Shares;"Hardys & Hansons Shares" the ordinary shares of 5 pence each in the capital of Hardys & Hansons excluding the deferred ordinary shares of 5 pence each in the capital of Hardys & Hansons;"HHHL" Hardy Hanson Holdings Limited;"HHHL A Class Meeting" the separate class meeting of HHHL A Shareholders (and any adjournment thereof) convened in connection with the HHHL Proposals;"HHHL B Class Meeting" the separate class meeting of HHHL B Shareholders (and any adjournment thereof) convened in connection with the HHHL Proposals;"HHHL A Class Meeting Resolutions" the resolutions to be proposed at the HHHL A Class Meeting to approve the variation and abrogation of certain rights attaching to the HHHL A Shares;"HHHL B Class Meeting Resolutions" the resolutions to be proposed at the HHHL B Class Meeting to approve the variation and abrogation of certain rights attaching to the HHHL B Shares;"HHHL Class Meetings" the HHHL A Class Meeting and the HHHL B Class Meeting;"HHHL Class Meeting Resolutions" the HHHL A Class Meeting Resolutions and the HHHL B Class Meeting Resolutions;"HHHL A Court Meeting" the meeting of HHHL A Shareholders (and any adjournment thereof) to be convened pursuant to an order of the Court under section 425 of the Companies Act for the purposes of considering and, if thought fit, approving the HHHL Scheme (with or without amendment);"HHHL B Court Meeting" the meeting of HHHL B Shareholders (and any adjournment thereof) to be convened pursuant to an order of the Court under section 425 of the Companies Act for the purposes of considering and, if thought fit, approving the HHHL Scheme (with or without amendment);"HHHL Court Meetings" the HHHL A Court Meeting and the HHHL B Court Meeting;"HHHL Court Order" the orders of the Court sanctioning the HHHL Scheme under section 425 of the Companies Act and confirming the reduction of capital provided for by the HHHL Scheme under section 137 of the Companies Act;"HHHL Directors" the board of directors of HHHL;"HHHL Extraordinary General Meeting" the extraordinary general meeting of HHHL Shareholders (and any adjournment thereof) convened in connection with the Hardys & Hansons Proposals;"HHHL EGM Resolutions" the resolutions to be proposed at the HHHL Extraordinary General Meeting in connection with the HHHL Scheme to approve the implementation of HHHL Scheme, certain amendments to the articles of association of HHHL for the purposes of approving and implementing the HHHL Scheme, any reduction of capital involved in the HHHL Scheme and such other matters as may be agreed between HHHL, the Offeror and Greene King as necessary or desirable for the purposes of implementing the HHHL Scheme;"HHHL Implementation Agreement" the implementation agreement between HHHL, Greene King, and the Offeror dated 15 June 2006, inter alia, to agree the implementation of the HHHL Scheme;"HHHL Proposals" the proposed acquisition by the Offeror of the HHHL Scheme Shares to be effected by means of the HHHL Scheme;"HHHL Scheme" the proposed scheme of arrangement under section 425 of the Companies Act between HHHL and the HHHL Scheme Shareholders, the full terms of which will be set out in the HHHL Scheme Document;"HHHL Scheme Document" the document to be sent to HHHL Shareholders containing and setting out the HHHL Scheme and the notices convening the HHHL Court Meeting, the HHHL Class Meeting and the HHHL Extraordinary General Meeting;"HHHL Scheme Effective Date" the date on which the HHHL Scheme becomes effective in accordance with its terms;"HHHL Scheme Shares" (i) the HHHL Shares in issue at the date of the HHHL Scheme Document (ii) any HHHL Shares issued after the date of the HHHL Scheme Documents and before the Voting Record Time, and (iii) any HHHL A Shares issued at or after the Voting Record Time and before the Scheme Record Time in respect of which the original or any subsequent holders thereof are, or shall have agreed in writing to be, bound by the HHHL Scheme. in each case other than any HHHL Shares registered in the name of the Offeror or beneficially owned by the Greene King Group;"HHHL Scheme Shareholders" holders of HHHL Scheme Shares;"HHHL Shareholders" HHHL A Shareholders and HHHL B Shareholders;"HHHL A Shareholders" holders of HHHL A Shares;"HHHL B Shareholders" holders of HHHL B Shares;"HHHL A Shares" the A shares of 5 pence each in the capital of HHHL;"HHHL B Shares" the B shares of 5 pence each in the capital of HHHL;"HHHL Shares" the HHHL A Shares and/or the HHHL B Shares as the context requires;"Japan" Japan, its cities, prefectures, territories and possessions and all areas subject to its jurisdiction or any subdivision thereof;"LIBOR" the London Interbank Offered Rate;"Loan Note Alternatives" the alternatives under which Scheme Shareholders (other than Restricted Overseas Persons) may elect to receive Loan Notes instead of some or all of the cash consideration to which they would otherwise be entitled;"Loan Note Forms of Election" the forms of election for use by Scheme Shareholders (other than Restricted Overseas Persons) in connection with the Loan Note Alternatives;"Loan Notes" the loan notes of the Offeror to be issued pursuant to the Loan Note Alternatives;"London Stock Exchange" London Stock Exchange plc;"Offer Period" the period commencing on 12 June, being the date of the announcement by Hardys & Hansons that it had received a number of preliminary approaches which may or may not lead to an offer for Hardys & Hansons;"Offeror" Greene King Acquisitions (No. 3) Limited, a wholly-owned subsidiary of Greene King;"Panel" the Panel on Takeovers and Mergers;"pence" or "£" the lawful currency of the United Kingdom;"PricewaterhouseCoopers" PricewaterhouseCoopers LLP, a limited liability partnership registered in England with registered number OC30325;"Proposals" the Hardys & Hansons Proposals and the HHHL Proposals; "Registrar of Companies" the Registrar of Companies in England and Wales;"Regulatory Information Service" any of the services approved by the London Stock Exchange for the distribution to the public of AIM announcements and included within the list maintained on the London Stock Exchange's website, www.londonstockexchange.com;"Restricted Overseas Person" a person (including an individual, partnership, unincorporated syndicate or organisation, incorporated association, trust, trustee, executor, administrator or other legal representative) in or resident in the United States, Canada, Australia, Japan or any other jurisdiction or a US Person (as defined in Regulation S under the US Securities Act);"Scheme" Hardys & Hansons Scheme and/or HHHL Scheme as the context requires;"Scheme Document" Hardys & Hansons Scheme Document and/or HHHL Scheme Document as the context requires;"Scheme Record Time" 6.00 p.m. on the business day immediately preceding the Effective Date;"Scheme Shareholders" holders of Hardys & Hansons Scheme Shares and/or HHHL Scheme Shares as the context requires;"Scheme Shares" Hardys & Hansons Scheme Shares and/or HHHL Scheme Shares as the context requires;"Shareholders" Hardys & Hansons Shareholders and/or HHHL Shareholders as the context requires;"subsidiary", "subsidiary undertaking", " have the meanings given by the Companies Act, other than paragraphundertaking", "associated undertaking" and " 20(1)(b) of Schedule 4A to that Act which shall be excluded for thissubstantial interest" purpose, and substantial interest means a direct or indirect interest in 20 per cent. or more of the equity share capital (as defined in that Act) of any undertaking;"Third Party Announcement" means an announcement made by a third party, which is not acting in concert with Greene King, of a firm intention to make an offer (whether by way of general offer or scheme of arrangement or otherwise and whether or not subject to pre-conditions) for the ordinary share capital and / or the deferred ordinary share capital of the Company and / or the share capital of HHHL, pursuant to Rule 2.5 of the Code;"Third Party Transaction" the offer referred to in a Third Party Announcement;"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland;"United States" or "US" the United States of America, its possessions and territories, all areas subject to its jurisdiction or any subdivision thereof, any state of the United States and the District of Columbia;"US Securities Act" the United States Securities Act of 1933, as amended;"Voting Record Time" 6.00 p.m. on the day which is two days before the date of the Court Meeting, or, if such Court Meeting is adjourned, 6.00 p.m. on the day which is two days before the date of such adjourned meeting. All times referred to are London times unless otherwise stated. This information is provided by RNS The company news service from the London Stock Exchange

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