9th May 2007 07:02
Blueheath Holdings PLC09 May 2007 9 May 2007 Blueheath Holdings PLC ("Blueheath" or the "Company") Proposed Acquisition of Giant Topco Limited Admission of the Enlarged Share Capital to trading on AIM Change of name to Booker Group plc Approval of waiver of Rule 9 of the Takeover Code Change of Nominated Adviser and Broker The board of Blueheath today announces that it has conditionally agreed toacquire the entire issued share capital of Giant Topco Limited, the ultimateholding company of the Booker Group, through the issue of 1,344,910,958 newOrdinary Shares in Blueheath. The new company will be called Booker Group plc and will be one of the UK'sleading food wholesalers with annual sales of more than £3 billion. Booker isthe largest operator of cash and carry outlets in the UK, while Blueheathfocuses on the delivered grocery wholesale market. The combination of the twowill create an operation with the ability to serve retailers, caterers and smallbusinesses, independents and multiple accounts - as well as providing both local"top-up" and national delivery services. The Acquisition will be treated as a reverse takeover under the AIM Rules. Uponcompletion of the Acquisition, the current shareholders of Giant Topco Limitedwill be interested in 90.01 per cent. of the Fully Diluted Enlarged ShareCapital of Blueheath, with the existing Blueheath shareholders holding theremaining 9.99 per cent.. Richard Rose, Executive Chairman of Blueheath, will be the Non-ExecutiveChairman of the Enlarged Group while Charles Wilson, Chief Executive Officer ofBooker, will be Chief Executive Officer and Jonathan Prentis, finance directorof Booker, will be Chief Financial Officer. The Board also announces the appointment of Investec as Nominated Adviser andBroker to the Company with immediate effect. Richard Rose said: "We are very excited by this chance to create a dynamic newforce in the UK wholesale market. This transaction will form the UK's largestfood wholesaler, by combining Booker's scale, customer base, catering expertise,coverage and brands with Blueheath's technology and delivery expertise." Charles Wilson said: "Booker has made great progress in the last 18 months andthis transaction gives us the opportunity to take the group to the next level. Acombined Booker/Blueheath will be able to offer retailers and caterers anunrivalled service of national delivery, "top-up" delivery and Cash and Carry." For further information contact: Tulchan Communications (PR Adviser to Booker) 020-7353-4200Susanna VoyleCelia Gordon Shute Investec (Nominated Adviser & Broker to Blueheath) 020-7597-5970James GraceKeith AndersonMartin SmithTom Levin There will be a call for analysts at 9.30am. For details please call LauraPearson at Tulchan on 020-7353-4200. This summary should be read in conjunction with the full text of the AdmissionDocument which is expected to be sent to shareholders today. The Acquisitionwill be subject to certain conditions including but not limited to approval ofShareholders at an EGM which is expected to be convened for this purpose on 1June 2007. Notice of this meeting is set out in the Admission Document. Certaindefinitions and terms used in this Announcement are set out at the end of thisannouncement. Investec, which is authorised and regulated by the Financial Services Authorityin the United Kingdom, is acting exclusively as Nominated Adviser and Broker toBlueheath in connection with Admission and the Acquisition and is not acting forany other person and will not be responsible to any other person for providingthe protections afforded to customers of Investec or for advising on thetransaction and arrangements proposed in the Admission Document. This announcement does not constitute, or form part of, an offer or invitationto purchase or subscribe for any securities in any jurisdiction. The AdmissionDocument is expected to be published by the Company on the date of thisannouncement and any acquisition of New Ordinary Shares in the Company should bemade only by reference to such Admission Document. This announcement contains statements about members of the Booker and Blueheaththat are or may be forward-looking statements. All statements other thanstatements of historical facts included in this announcement may beforward-looking statements. Any statements preceded or followed by or thatinclude the words "targets", "plans", "believes", "expects", "aims", "intends","will", "may", "anticipates" or similar expressions or the negative thereof areforward-looking statements. Forward-looking statements include statementsrelating to the following: (i) future capital expenditures, expenses, revenues,economic performance, financial condition, dividend policy, losses and futureprospects; (ii) business and management strategies and the expansion and growthof the Booker or Blueheath; and (iii) the effects of government regulation onBooker's or Blueheath's business. These forward-looking statements involve knownand unknown risk, uncertainties and other factors which may cause the actualresults, performance or achievements of any such entity, or industry results, tobe materially different from any results, performance or achievements expressedor implied by such forward-looking statements. These forward-looking statementsare based on numerous assumptions regarding the present and future businessstrategies of such entity and the environment in which each will operate in thefuture. Except as required by law, neither Blueheath nor any other party intendsto update these forward-looking statements, even though the affairs of Blueheathand Booker will change from time to time. Notes to editors: Booker is the UK's largest cash and carry operator, offering branded andprivate-label goods to more than 400,000 customers, including independentconvenience stores, grocers, pubs and restaurants. In the year to 31 March 2006,Booker made an operating profit before goodwill amortisation and exceptionalitems of approximately £22 million on turnover of approximately £3 billion. TheProposed Directors estimate that Giant Topco Limited will report turnover of notless than £3 billion and operating profit before goodwill and exceptional itemsof not less than £39 million for the year ended 30 March 2007. Since 2005,Booker Group has been owned by a consortium led by the Baugur Group hf. Booker Holdings' improving trend in sales EBITDA, EBIT and net debt compared tothe same period in the prior financial period for the two periods ended 30 March2007 is set out below: Period Ended 16 September 31 March 2006 15 September 30 March 2007*** 2005 2006 Turnover £m 1,467 1,570 1,430 1,579 Turnover % Change (5.9%) (5.9%) (2.5%) 0.6% EBITDA £m * 22 18 30 27 EBITDA % Change (41%) (33%) 37% 50% EBIT £m ** 13 9 22 17 EBIT % Change (54%) (44%) 69% 89% Net debt £m 361 125 70 77 Notes: * Before exceptional items. ** Before goodwill amortisation, goodwill impairment and exceptional items. *** Results are estimates and are not expected to be less than the numberspresented above. The actual results reported may be affected by revisions whichcould cause the actual results to differ to those estimated above. Blueheath, established in 2000, is a wholesaler offering added value softwaresolutions to its customers. The Company offers both branded and private-labelgoods to more than 1,200 customers. The Company, which was admitted to tradingon AIM in July 2004, operates from two UK national distribution centres inThurrock and Wrexham. In the year to 4 March 2006, Blueheath made a pre-tax lossof approximately £4.9m on turnover of approximately £132.3m. The Acquisition is subject to approval of Blueheath's shareholders at anextraordinary general meeting, which is expected to be held on 1 June 2007.Application will be made for the Enlarged Share Capital to be admitted totrading on AIM, which is expected to become effective on 4 June 2007.Immediately prior to Admission, the Enlarged Group will bere-named Booker Group plc. Immediately following Admission shareholdings in theEnlarged Group will include: Shareholder Interest in Enlarged Share Capital immediately following Admission % Milton ehf * 35.2Bank of Scotland 12.0Charles Wilson ** 8.1Kaupthing Bank hf 8.2TBH Trading Limited 7.4Kevin Stanford 5.0Other Booker employee shareholders (including Booker 14.4EBT) Notes: * Milton ehf is a Company owned by BG Holding ehf (a wholly owned subsidiary ofBaugur Group hf) and Fons Eignarhaldsfelag hf ** CEO of the Enlarged Group Blueheath Holdings PLC Proposed Acquisition of Giant Topco Limited Admission of the Enlarged Share Capital to trading on AIM Change of name to Booker Group plc Approval of waiver of Rule 9 of the Takeover Code Change of Nominated Adviser and Broker The board of Blueheath announces today that Blueheath has conditionally agreedto acquire the entire issued share capital of Giant Topco Limited ("BookerHoldings") in consideration for the issue of 1,344,910,958 new Ordinary Sharesin Blueheath. Upon completion of the Acquisition the shareholders of BookerHoldings will be interested in 90.01 per cent. of the Fully Diluted EnlargedShare Capital of Blueheath, with the existing Blueheath shareholders andoptionholders holding the remaining 9.99 per cent.. Booker Holdings is the ultimate holding company within the Booker Group. Theprincipal trading subsidiary of the Booker Group is Booker. Booker is the UK'slargest cash and carry operator, offering branded and private-label goods whichare sold to over 400,000 customers including independent convenience stores,grocers, pubs and restaurants. The Enlarged Group will be one of the UK's leading food wholesalers. TheDirectors and the Proposed Directors believe that it will be unique in providingboth national delivery and local "top-up" services in the UK, serving bothsingle site and multi-site customers. The Directors and the Proposed Directorsbelieve that the Enlarged Group will be able to enhance customer service throughan increased choice of both product and delivery format. Following Admission, the Enlarged Group intends to change its year end toconform with that of Booker Holdings. The Acquisition will be treated as a reverse takeover under the AIM Rules and,as such, requires the prior approval of Blueheath shareholders at theextraordinary general meeting which is expected to be convened for 11.00 a.m. on1 June 2007 at the offices of Taylor Wessing LLP, Carmelite, 50 VictoriaEmbankment, Blackfriars, London, EC4Y 0DX. Irrevocable undertakings to vote infavour of the Resolutions have been received from holders of approximately 60.8per cent. of the existing issued ordinary share capital of the Company. ShouldShareholder approval be obtained, trading in the Existing Ordinary Shares willbe cancelled and the Enlarged Share Capital will be admitted to trading on AIM. Application will be made for the Enlarged Share Capital to be admitted totrading on AIM, which is expected to become effective on 4 June 2007.Immediately prior to Admission, Blueheath will be renamed Booker Group plc. BG Holding ehf (a wholly owned subsidiary of Baugur Group hf), FonsEignarhaldsfelag hf, Milton ehf, Kevin Stanford and TBH Trading Limited aredeemed to be acting in concert in relation to Blueheath for the purposes of theTakeover Code. On completion of the Acquisition, the Concert Party Members willbetween them be interested in 707,844,210 Ordinary Shares, representingapproximately 47.6 per cent. of the Company's enlarged voting share capital. TheTakeover Panel has agreed, however, to waive the obligation to make a generaloffer that would arise on the part of the Concert Party Members, eitherindividually or collectively, as a result of the Acquisition, subject to aResolution being passed on a poll by Shareholders. The Board also announces the appointment of Investec as Nominated Adviser andBroker to the Company with immediate effect. Information on Blueheath Blueheath is a wholesaler of groceries to independent and multiple retail andleisure outlets within the UK. Established in 2000, Blueheath was the UK's firstinternet based delivered grocery wholesaler. The Blueheath offering includesboth branded and private-label goods which are sold to over 1,200 customers.Blueheath's innovative IT capability enables it to offer an enhanced valueservice proposition to its customers and gives it an efficient, low costdelivery platform with increased stock availability whilst keeping its inventorylevels low. This superior technological base enables Blueheath to differentiateitself in the marketplace. Blueheath was admitted to trading on AIM in July 2004 and trades under the RICcode "BLH". In the year ended 4 March 2006, Blueheath acquired two wholesalers,CTM Wholesale Limited and AC Ward & Son Limited for £5.7 million and £3.3million respectively. Blueheath operates from two UK national distribution centres in Thurrock andWrexham which, between them, have a combined area of approximately 100,000 sqft. The Blueheath Group employed approximately 250 employees as at 4 March 2006, 68employees as at 26 February 2005 and 63 employees as at 28 February 2004. Richard Rose and Mark Aylwin were appointed as Executive Chairman and ChiefExecutive Officer of Blueheath in September 2006. A strategic review ofBlueheath's business followed these appointments. The results of this review,which were announced in November 2006, were that Blueheath had an inappropriatecost structure, a number of large unprofitable customers and areas of operatinginefficiencies. On 26 January 2007 Blueheath announced an equity fundraising to raise £3.575million via a placing which was supported by its largest shareholders, SchroderInvestment Management Limited and Peder Smedvig Capital AS in order tostrengthen its balance sheet and provide the necessary financial resources toallow the new management team to address the issues raised by the strategicreview. Financial summary of Blueheath for the financial years ended 28 February 2004,26 February 2005 and 4 March 2006 and for the 26 weeks ended 2 September 2006 The table below summarises the financial results of Blueheath and itssubsidiaries for each of the financial years ended 28 February 2004, 26 February2005 and 4 March 2006 and for the 26 weeks ended 2 September 2006 and the netassets of Blueheath as at each of those dates. Period ended 28 26 February 4 March 26 weeks February 2005 2006 ended 2 2004 September 2006 £m £m £m £mGroup Turnover 62.7 70.2 132.3 77.2Loss on ordinary (7.5) (5.8)* (4.9) (2.8)activities beforetaxation and exceptionalitemsNet (liabilities)/assets (7.0) 11.6 12.5 13.7 Note * as restated The information above has been extracted without material adjustment from thepublished audited consolidated accounts of the Blueheath Group for the financialyears ended 28 February 2004, 26 February 2005 and 4 March 2006 and from thepublished unaudited interim results for the 26 weeks ended 2 September 2006. Inorder to make a proper assessment of the financial position of Blueheath, youshould not rely solely on the summary information set out above but should referto the published annual results of Blueheath for each of the financial yearsended 28 February 2004, 26 February 2005 and 4 March 2006 and the publishedinterim results of Blueheath for the 26 weeks ended 2 September 2006. Information on the Booker Group Background and history Booker Holdings is the ultimate holding company within the Booker Group. Theprincipal trading subsidiary of the Booker Group is Booker. Booker plc entered the UK food wholesaling market in 1957 when it acquiredAlfred Button Limited. Booker expanded via organic growth and acquisition until1997 when it reported sales of approximately £3.9 billion for the year ended 27December 1997. In 2000 Booker plc was acquired by Iceland Group plc which wasthen renamed The Big Food Group plc. The Big Food Group plc was subsequentlyacquired by Booker Holdings in February 2005. Following the acquisition of TheBig Food Group plc by Booker Holdings all the activities of The Big Food Groupplc other than the cash and carry business of Booker (including the food retailbusiness Iceland Foods Limited, Woodwards Foodservice Limited and Expert) weresold to other companies owned or controlled by certain of the Key Vendors. The results for Booker Holdings in the six months to 16 September 2005 showed afall in sales of approximately 5.9 per cent., a fall in EBITDA of approximately41.0 per cent. and a fall in operating profit before goodwill amortisation,goodwill impairment and exceptional items of 54.0 per cent. as compared to thesame period for the prior year. On 1 November 2005 Charles Wilson joined Bookeras Chief Executive Officer. In November 2005 a new senior management team wasintroduced and the "Booker Recovery Plan" was announced. The first phase of the plan between November 2005 and March 2006 comprisedfocussing the business on improving cash management and on the customer. Throughtight cash control and a re-financing net debt was reduced. Head office costswere substantially reduced and supply chain costs were cut by approximately 20per cent.. The business was simplified and the buying and selling activitieswere brought closer together. Stock availability was improved significantly anda new range of customer promotions introduced. By March 2006 the "focus" phasewas complete with net debt reduced to approximately £125 million and the rate ofprofit decline was arrested. The second phase of the recovery plan between April 2006 and March 2007 involved"driving" the business through increased responsiveness to customers. Customerswanted "Choice Up, Prices Down, Better Service". Customer choice has beenimproved through a combination of extended ranges; more emphasis on fruit andvegetables; targeting the on-trade; improved events; and a range of "MustStocks". Prices down has involved reducing the prices of 600 lines, improvingpromotions and launching "Booker Basics", a range of basic lines with an entryprice ticket. Initiatives designed to improve service have focused onavailability, the speed of service and the role of the branch manager. TheProposed Directors believe that these actions are working. Like for like salesto caterers declined by 5.8 per cent. in the six months to 16 September 2005 andhas since then shown a consistent improvement on a half year by half year basis.Like for like sales to caterers showed an estimated increase of 3.9 per cent.for the second half of the year ended 30 March 2007. Like for like sales toretailers declined by 5.6 per cent. for the six months to 16 September 2005.Sales to retailers have also shown a consistent improvement on a half year byhalf year basis. Like for like sales to retailers reduced by an estimated 0.1per cent. for the second half of the year ended 30 March 2007. As a result, theoperating profit before goodwill amortisation, goodwill impairment andexceptional items for the year ended 30 March 2007 is expected to be not lessthan £39 million (compared to £22 million for the year ended 31 March 2006). The final phase of the recovery plan (which is ongoing) is to "Broaden" thebusiness and is aimed at making Booker the UK's biggest and best supplier tosmall business. "Choice Up, Prices Down, Better Service" remains the long-termplan and there are significant opportunities for Booker to expand its existingactivities. The Proposed Directors believe that growth in the Booker businesswill come predominantly from the following areas: * increasing sales to caterers; * the conversion of branches to the new format, "Booker Extra"; * expanding local delivery (currently approximately £489 million of sales); * continuing to expand the Premier brand and Retail Club; and * harnessing the internet as a sales and distribution channel. Current position Booker Holdings is the ultimate holding company of Booker, its principal tradingsubsidiary. Booker is the UK's largest cash and carry operator, offering branded andprivate-label goods which are sold to over 400,000 customers includingindependent convenience stores, grocers, pubs and restaurants. For the year to30 March 2007, Booker Holdings had estimated sales of approximately £3.0billion, of which approximately £2.1 billion were to retailers; £0.8 billion tocaterers; and £0.1 billion to other customers (comprising schools, churches, andprofessional business users amongst others). Booker currently lists over 20,000 lines of product, comprising a fullycomprehensive range of branded and own label grocery, fresh & frozen food,beers, wines, spirits, tobacco and non-food items. For the year ended 30 March2007, the split of estimated sales by product category to retailers, caterersand other customers is shown below: Retailers Caterers Others Total £bn £bn £bn £bn Tobacco 1.2 0.1 - 1.3Food and Drink 0.9 0.7 0.1 1.7Non Food - 0.1 - 0.1 2.1 0.8 0.1 3.0 Note: Totals do not add up exactly due to rounding of numbers While tobacco accounted for approximately 42 per cent. of Booker's estimatedturnover for the year ended 30 March 2007, it should be noted that the margin ontobacco sales is much lower than for other product categories. The Proposed Directors have been encouraged by the performance in the cateringcategory which is the most profitable part of the business. In the year ended 30 March 2007, Booker delivered approximately £489 million ofgoods from the cash and carry branches with approximately £2.5 billion of salesmade on a customer collect basis. An estimated 69 per cent. of Booker's sales inthe year ended 30 March 2007 were paid for in cash at the time of purchase. Cash and Carry branches Booker currently trades from 172 branches in the UK. The average size of thesebranches is approximately 47,000 sq ft, although Booker has four branches over100,000 sq ft and 12 branches under 20,000 sq ft. The Proposed Directors believethat Booker's branch portfolio is appropriate for its present requirements andis capable of handling a considerably increased level of activity. Booker hascommenced a programme of refurbishment and has to date converted 8 branches intothe "Extra" format. These are brighter stores with improved lighting and layoutand a range that increases choice whilst avoiding unnecessary duplication. EachExtra branch has an increased proportion of non-food lines which tend to commanda higher margin. Overall, the Extra stores have recorded an increase in salesand profits as compared to the non-converted portfolio. The Proposed Directorsexpect that a further 24 branches will be converted to the Extra format in theyear ending 28 March 2008. Distribution Centres Booker operates three regional distribution centres, Hatfield and Haydock inEngland and Livingston in Scotland, and has a national distribution centre inWellingborough. These distribution centres supply the cash and carry branchesand have the capacity to handle retail delivery. Retailers As at 30 March 2007 Booker had approximately 74,000 retail customers. Booker offers its independent retail customers the opportunity to trade underits Premier brand which provides the benefits of a national symbol group whilstretaining the personality and entrepreneurial spirit of the independentretailer. Premier was voted symbol group of the year at the Retail IndustryAwards 2006. Booker will typically subsidise the fit out of the store's fascia,signage and other imagery in return for certain minimum spend contracts andexclusive own-label supply arrangements. At 30 March 2007 there were over 2,000Premier branded stores in the UK. Estimated sales to Premier branded stores forthe year ended 30 March 2007 were approximately £470 million, an increase ofapproximately 10 per cent. on the prior year. Booker also offers customers thealternative of becoming a member of its Retail Club. Approximately 1,850customers are currently Retail Club members which enables them to participate inspecial promotions. Estimated sales to Retail Club members for the year ended 30March 2007 were approximately £261 million, an increase of approximately 6 percent. on the prior year. Caterers At 30 March 2007, Booker had approximately 259,000 catering customers. This is akey area of growth as the Proposed Directors believe that the outlook for thecatering market is favourable and the profitability is attractive. Brands Booker owns a number of "own label" brands including: * Chef's Larder - a leading catering brand with wholesale sales of over £120million for the year ended 30 March 2007; * Malt House Vintners - leading wine and spirit brands with wholesale sales ofover £125 million for the year ended 30 March 2007; and * Happy Shopper - a retail own label range with wholesale sales of over £50million for the year ended 30 March 2007. Internet In the year to 30 March 2007 Booker reported estimated internet sales ofapproximately £48 million. Booker has recently upgraded its internetcapabilities making its web site easier to use with a more efficient searchcapability. Employees The Booker Group employed approximately 8,431 employees as at 31 March 2006 and8,748 employees as at 1 April 2005. Pensions The Booker Group operates a number of pension schemes. There are two definedbenefit schemes, the rest are defined contribution schemes. Of the definedbenefit schemes one has no present or deferred members and is in surplus, theother is the Booker Pension Scheme. This is a defined benefit scheme which isclosed to new entrants and ceased to accrue benefits in respect of service after31 July 2002. The Booker Pension Scheme had a deficit on an FRS 17 basis of£84.6 million (before taking into account any deferred tax credit) as at 31March 2006. Since 31 March 2006, the directors of Booker have taken a number of actions toreduce the FRS 17 deficit including two offers to members of the Booker PensionScheme to vary or buy out the rights of those members. As a result of theseactions, investment returns made by the assets of the Booker Pension Scheme andcontributions made by Booker, the Proposed Directors believe that the auditedaccounts for Booker Holdings for the year ended 30 March 2007 will show asubstantially reduced FRS 17 deficit. On 24 February 2005, an agreement was made with the trustee of the BookerPension Scheme whereby a capital payment of £35 million was made in March 2005,followed by agreed annual payments of £11.5 million in the year ended March2006, £12.5 million in the year ended March 2007 and £14.5 million in the yearending March 2008. The next triennial valuation is due as at 31 March 2007, theresults of which are expected in early 2008, following which a new funding ratewill need to be agreed with the trustees. Property Booker has a total of 202 properties under lease. Of these, 172 are branchpremises, 4 distribution centres and 2 office buildings. Of the remaining 24properties, 5 are vacant and 19 are sub-let by Booker to third parties. Of the172 "Cash and Carry" branches, 52 are properties which were part of a sale andlease back transaction concluded in February 2005 (the "2005 Properties") and 12are properties which were part of a sale and lease back transaction concludedwith AXA (the "AXA Properties"). Total current annual rent in respect of tradingbranches is £33,765,880 of which £10,309,766 (30.53 per cent.) was paid inrespect of the 2005 Properties and £5,283,138 (15.65 per cent.) was paid inrespect of the AXA Properties. The leases of the 2005 Properties are on substantially similar terms. Inparticular, the leases expire on the same date, 27 February 2030, and aresubject to rent reviews every five years, the next rent review for each propertybeing on 28 February 2010. Rent is reviewed on an upwards only basis at a rateequal to the higher of 2.5 per cent. of current rent compounded annually andopen market rent. The leases of the AXA Properties are also on similar termssave that the rent reviews occur annually, the minimum rented increase is 3 percent. and the leases expire on various dates between 2012 and 2037. Theremaining trading branches are leased on differing terms from a number oflandlords. In relation to the vacant and sub-let properties Booker has made provisionswhere appropriate to cover the present value of the expected costs that mayarise in relation to those properties over the remaining life of the leases. Tax The Booker Group used to have operations in the United States. Those operationswere disposed of during the 1990's. The United States tax position associatedwith the companies which carried out those operations is in the process of beingresolved. The directors of Booker Holdings will make a provision of £9 millionin the accounts for the year ended 30 March 2007 to cover the possible liabilityto taxation in the United States and/or United Kingdom. Financial summary of Booker Holdings for the two periods ended 31 March 2006 andestimate for the period ended 30 March 2007 The table below summarises the financial results of Booker Holdings for each ofthe two periods ended 31 March 2006 and the net assets of Booker Holdings as ateach of those dates, with an estimate for group turnover, EBITDA and operatingprofit before goodwill amortisation and exceptional items for the period ended30 March 2007 and an estimate of net debt as at 30 March 2007. Booker Holdings 44 week period Year Year Ended* Ended Ended*** 1 April 31 March 30 March 2005 2006 2007 Audited Audited Unaudited estimate £m £m £m Group Turnover 467.8 3,037.4 3,000.0EBITDA (before exceptional 10.5 40.3 57.0items)Operating profit before 7.8 21.7 39.0goodwill amortisation,goodwill impairment andexceptional itemsNet debt** (401.0) (124.8) (77.0)Net assets 22.7 182.5 Notes * Booker Holdings traded for only 7 weeks in the period ended 1 April 2005. ** Net debt includes senior term loans and amounts drawn under a rolling creditfacility offset by cash in transit together with loan notes and amounts payableunder finance lease creditors less unamortised debt finance costs. ***Results are estimates. The actual results reported may be affected byrevisions which could cause the actual results to differ to those estimatedabove. In order to make a proper assessment of the financial position of BookerHoldings, you should not rely solely on the summary information set out abovebut should read the whole of the Admission Document. The improving trend for turnover, EBITDA, EBIT and net debt compared to the sameperiod in the prior financial period for the two periods ended 30 March 2007 isset out below: Period EndedHalf Year 16 September 31 March 15 September 30 March 2005 2006 2006 2007*** £m £m £m £m Turnover £m 1,467 1,570 1,430 1,579Turnover % Change (5.9%) (5.9%) (2.5%) 0.6%EBITDA* £m 22 18 30 27EBITDA % Change (41%) (33%) 37% 50%EBIT** £m 13 9 22 17EBIT % Change (54%) (44%) 69% 89%Net Debt £m 361 125 70 77 Notes * Before exceptional items ** Before goodwill amortisation, goodwill impairment and exceptional items *** Results or estimates. The actual results reported may be affected byrevisions which could cause those the actual results to differ to thoseestimated above. Background to the Market Both Blueheath and Booker compete in the UK food supply market which includesfood retailing, wholesaleing and catering. The wholesale sector can be splitinto Cash and Carry, Delivered Grocery and Foodservice/Catering segments. Whilstthe availability of data relating to these segments is limited, the table belowsets out the estimated total market size for the years ended 31 December 2004,2005 and 2006. Year ended 31 December 2004 2005 2006 £bn £bn £bn Cash and Carry 9.5 9.3 9.4Delivered Grocery 7.2 7.6 8.1Food Service/Catering na 6.5 6.6 _____ _____ _____ na 23.4 24.1 Source: IGD, ACNeilsen Key Competitors The food wholesale sector is highly fragmented and the Directors and theProposed Directors are of the opinion that the Enlarged Group will experiencecompetition in the following areas: Cash and Carry As at the date of this document, Booker is the largest cash and carry businessin the UK by sales and faces competition from three other major national brands.These are Bestway Cash & Carry, Makro and Costco. There are also a large numberof regional competitors. Delivered Grocery The Delivered Grocery segment has a small number of national competitorsincluding Palmer & Harvey, Spar and Musgrave Budgens Londis. Currently, Bookeroffers "top-up" delivery supplied from local cash and carry branches. Food Service / Catering Booker also competes with Brake Brothers Limited and 3663 Foodservice, MatthewClark, Waverley TBS and a multitude of catering suppliers. Currently, Bookeroffers "top-up" delivery to caterers and other food service customers from localcash and carry branches. Background to and reasons for the Acquisition The Directors and Proposed Directors believe that the acquisition by Blueheathof Booker Holdings will form one of the UK's leading food wholesalers bycombining Booker's scale, customer base, catering expertise, coverage and brandswith Blueheath's technology and delivery expertise. The Directors and Proposed Directors expect that the Enlarged Group will benefitfrom improved cash management and from cost synergies. Cost synergies areexpected from, inter alia, improved buying power and logistics efficiency andfrom central and financing costs. The Enlarged Group will serve retailers,caterers and small business and will supply single and multi-site customers. Itwill be the only food wholesale provider of national delivery to retailcustomers and local "top-up" of fresh, frozen and ambient foods, alcohol andnon-foods. The Directors and Proposed Directors believe that this combination will allowthe Enlarged Group to enhance customer service through a larger choice ofproducts and delivery methods, whilst improving efficiency with the aim ofbecoming the UK's leading wholesaler. Principal terms of the Acquisition Blueheath will acquire the entire issued share capital of Booker Holdings inconsideration for the allotment and issue of 1,344,910,958 new Ordinary Shares. The Acquisition will be effected by means of the acquisition of shares in BookerHoldings from the Key Vendors, Charles Wilson, Jonathan Prentis and the BookerEBT pursuant to a sale and purchase agreement entered into with Blueheath. Thedrag-along provisions in Booker Holdings' articles of association will beinvoked to acquire the remaining shares in Booker Holdings on the terms set outin the Share Purchase Agreement. The Acquisition is conditional upon, inter alia, the issue of an AdmissionDocument and notice of EGM, Shareholder approval at the EGM and Admission. Prior to Completion neither the Company nor Booker Holdings may, withoutconsent, do anything outside the ordinary course of business, declare anydividends or other distributions or issue any shares or rights to subscribe forshares. The Key Vendors, Charles Wilson, Jonathan Prentis and the Booker EBThave also agreed not to acquire any shares in the Company. Breach of theseobligations may result in termination of the Share Purchase Agreement. All the parties to the Share Purchase Agreement have given limited warranties inrelation to capacity and authority. The Key Vendors, Charles Wilson, JonathanPrentis and the Booker EBT have given warranties in relation to title to theshares being sold by them. The Board and key employees With effect from Admission: Charles Wilson and Jonathan Prentis will becomeChief Executive Officer and Chief Financial Officer of the Enlarged Group; MarkAylwin (Chief Executive Officer of Blueheath), Simon Mindham (Chief FinancialOfficer of Blueheath) John Hewett (Non-Executive Director of Blueheath) and MarkNaughton-Rumbo (Non-Executive Director of Blueheath) will step down from theBoard; Kevin Lyon, Hans Kristian Hustad and Jim McMahon will be appointedNon-Executive Directors of the Enlarged Group; and Richard Rose will remain onthe Board and will become Non-Executive Chairman. With effect from Admission,Simon Mindham will step down as Company Secretary of Blueheath and Mark Chiltonwill become Company Secretary of the Enlarged Group. Mark Aylwin and Simon Mindham will respectively become the Managing Director andthe Finance Director of the delivered wholesale business. The details of the Proposed Directors and key employees of the Enlarged Groupare set out below. Proposed Directors Richard Rose, Non-Executive Chairman (Age: 51) Richard joined Blueheath as deputy chairman in May 2006 and was appointedExecutive Chairman in September 2006. It is proposed that on Completion Richardbecomes Non-Executive Chairman. Richard was formerly Chief Executive Officer ofWhittard of Chelsea plc, a multi site retailer of tea and coffee which was soldto an investee company of Baugur Group hf in 2006. Previously he was a Directorof Hagemeyer (UK) Ltd, a distributor of professional products and services, witha UK turnover approaching £1 billion through 360 outlets. Prior to that he hadbeen Chief Executive Officer of WF Electrical plc, a fully listed electricaldistributor, where he created a substantial improvement in shareholder value.Hagemeyer purchased WF Electrical plc in 2000. He was also Non-ExecutiveChairman of AC Electrical Wholesale Limited where he led a very successfulgrowth strategy resulting in a very substantial increase in shareholder value.The business was sold to Wolseley in 2006. He is Chairman of KiotechInternational plc, Non-Executive Chairman of Nanoscience Inc. and Non-ExecutiveChairman of Felix Group plc. Charles Wilson, Chief Executive Officer (Age: 41) Charles started his career in 1986 with Procter and Gamble following which hewas a consultant with OC&C Strategy Consultants and a Director of AbbertonAssociates. In 1998 he became an Executive Director of Booker Plc which mergedwith Iceland plc in 2000. In 2001 he became an Executive Director of ArcadiaGroup plc and in 2004 he became an Executive Director at Marks and Spencer Plc.In 2005 he was appointed as Chief Executive Officer of Booker. Jonathan Prentis, Chief Financial Officer (Age: 45) Jonathan qualified as a chartered accountant in 1987 with Deloitte & Touche.Jonathan was appointed as finance director of Booker in 2005 after theacquisition of The Big Food Group by Booker Holdings. Prior to this appointment,Jonathan was finance director of Woodward Foodservice Limited and then financedirector of Group Logistics within The Big Food Group plc. Prior to 2003,Jonathan was with TDG plc. Kevin Lyon, Non-Executive Director (Age: 45) Kevin qualified as a chartered accountant in 1985. After two years in merchantbanking Kevin joined the private equity and venture capital business, 3i plc.While with 3i, he built and developed several successful investment teams acrossthe UK and led many transactions in a wide range of sectors. Kevin also held anumber of leadership and management positions including Managing Director, UKPrivate Equity. Kevin left 3i plc in 2004 to build a portfolio of non-executiveinterests. Kevin is currently Chairman of a number of UK companies. Hans Kristian Hustad, Non-Executive Director (Age: 57) Hans Kristian started his career in the Norwegian food and beverage industry inthe 1970's. In 1996, he started to work for one of the largest food retailers inNorway, Reitan Group Ltd., and was responsible for the launch of Rema 1000International Ltd. on the Oslo Stock Exchange through a merger with the listedNarvesen Plc. He became a Non-Executive Director of Baugur Group when thecompany was launched on the Icelandic Stock Exchange in 1999. When Baugur Grouphf headed the consortium which bought The Big Food Group plc in February 2005,he became Chairman and Chief Executive Officer of Booker Holdings. When CharlesWilson became Chief Executive Officer of Booker Holdings from November 2005, hecontinued as Non-Executive Chairman. He is a Non-Executive Director of Hamleysand Wyevale. Jim McMahon, Non-Executive Director (Age: 58) Jim is a founding partner, with Sir Tom Hunter, of West Coast Capital and hasbeen involved in approximately £5 billion of West Coast Capital led deals sinceMarch 2001. Jim sits on a number of retail boards, including House of Fraser andWyevale, providing strategic and financial advice. Jim was a Senior Inspector ofTaxes and then spent sixteen years with PricewaterhouseCoopers where he was aTax Partner, a member of the PwC Supervisory Board and, prior to joining WestCoast Capital, headed a national team advising some of the UK's leadingentrepreneurs and their businesses. Operational Management In addition to the Proposed Directors, the key personnel within the EnlargedGroup that will be responsible for the operation and development of the businessare: Mark Chilton Mark will be appointed as Company Secretary to the Enlarged Group followingAdmission. Mark qualified as a solicitor in 1987. Mark was appointed as CompanySecretary of Booker Holdings in May 2006. Previously, he was head of legal atThe Big Food Group plc. Prior to that, he was at The Greenalls Group Plc. Mark Aylwin Mark will be Managing Director for the delivered wholesale business of theEnlarged Group. Mark was previously supply chain and IT director atMusgrave-Budgens-Londis, a leading wholesaler to independent retailers in theUK. He has over twenty years trading, supply chain and logistics experience inthe food industry, principally at Safeway where he was Commercial Director fornon--foods and then Supply Chain Director. Bryan Drew Bryan will be Group Commercial Director, responsible for all buying and brandsof the Enlarged Group. Bryan was at Booker plc from 1989 to 2003 when he left toco-found Hub Wholesale Ltd. He returned to Booker plc in November 2005 asCommercial Director. Simon Mindham Simon is currently Finance Director of Blueheath and will be Finance Directorfor the delivered wholesale business of the Enlarged Group. He qualified as aChartered Accountant in 1990 with RSM Robson Rhodes and subsequently worked forTDG plc and the Cert Group where he held a number of finance roles includingacting as Finance Director for Cert Distributors, a wholesaler of products tothe independent sector. Bryn Satherley Bryn Satherley will be Group Operations Director responsible for property, IT,logistics and supply chain of the Enlarged Group. He was at Booker plc between1999 and 2001 and rejoined in 2005. Prior to that he was at Exel plc and was onthe board of Alldays Limited. Tony Overton Tony Overton will be Director for the Extra format. Tony rejoined Booker plc in2005 having co--founded Hub Wholesale Ltd. Previously he was Managing Directorof BWG Wholesale UK, a division of BWG Holdings Limited and was at Booker plcfrom 1992 to 2001. Warren Thomson Warren is responsible for branch operations, sales and marketing. He has workedfor Booker plc for over thirty two years holding a variety of positions frombranch through to Board level. Current Trading and Prospects of the Enlarged Group Blueheath On 26 January 2007 the Company announced that excellent progress had been madein remedying the areas identified in the strategic review and that theannualised level of cost savings achieved by that date amounted to approximately£3.1 million. Since that date the Company has continued to trade in line withmanagement expectations. Booker Holdings The Directors and the Proposed Directors estimate that Booker Holdings willreport sales of not less than £3 billion and operating profit, before goodwillamortisation and exceptional items of not less than £39 million for thefinancial year ended 30 March 2007. Sales levels in the first period of thecurrent financial year were ahead of the same period in the prior year, whilstinventory levels and costs were in line with management expectations. Overall,Booker is currently trading in accordance with management expectations. Enlarged Group The Directors and the Proposed Directors view the Enlarged Group's trading andfinancial prospects with confidence. Both Blueheath and Booker Holdings intend to announce their annual results forthe years ended 3 March 2007 and 30 March 2007 respectively in the two weeksfollowing Admission. Irrevocable Undertakings Schroder Investment Management Limited, Smedvig Capital and RIT Capital Partnersplc who are interested in 38,905,078 Ordinary Shares, 39,569,600 Ordinary Sharesand 8,707,600 Ordinary Shares have irrevocably undertaken to the Company to votein favour of all the Resolutions. Accordingly, irrevocable undertakings havebeen received from Shareholders holding approximately 60.8 per cent. in total ofthe Existing Ordinary Shares to vote in favour of the Resolutions. Dealing Restrictions The Key Vendors have entered into an orderly market agreement whereby theyundertake to the Company and Investec not to sell or otherwise dispose of anyinterest in New Ordinary Shares during the Orderly Market Period, subject tocertain exceptions. The Proposed Directors have agreed to the dealing restrictions described above.The Company has undertaken to Investec not to waive or vary any of those dealingrestrictions prior to 1 June 2009. The Company and Investec have agreed that, if, in the four weeks followingAdmission, there is sufficient demand from institutional and other investorsidentified by Investec at a price acceptable to the Key Vendors, then the KeyVendors may dispose of approximately 225 million of the New Ordinary Shares toinvestors identified by Investec, however they are under no obligation to do so. Charles Wilson, Jonathan Prentis and those Booker other employees of the BookerGroup who will acquire New Ordinary Shares as part of the terms of theAcquisition will be prohibited, subject to certain limited exceptions, fromdisposing of the New Ordinary Shares that they receive at Admission prior to 1June 2009. In addition, and subject to certain limited exceptions, if any suchperson ceases to be employed by the Enlarged Group (or gives or receives notice)on or prior to 31 May 2008 his shares will be transferred to the Booker EBT atcost. Richard Rose, Mark Aylwin and Simon Mindham have also given similar undertakingsthat they will not prior to 1 June 2009, subject to certain limited exceptions,dispose of Ordinary Shares which they will receive following an exercise ofOptions under the Blueheath Senior Management Incentive Scheme. IFRS adjustments In accordance with the AIM Rules for Companies, Blueheath is required to reportits results under IFRS for the accounting period commencing 4 March 2007.Following Admission, Blueheath intends to change its year end to conform withthat of Booker Holdings. The Directors and the Proposed Directors believe the change from reportingresults under GAAP to reporting results under IFRS may result in materialchanges to reported profit in the following areas: Goodwill amortisation Under IFRS goodwill is not amortised. An impairment review is performed annuallyto review the carrying value of the asset. The value of goodwill on the balancesheet of Booker Holdings at 31 March 2006 was £410.1 million and the value ofgoodwill on the Blueheath balance sheet at 2 September 2006 was £5.1 million.The amortisation charge reported in Booker Holding's consolidated financialstatements for the year to 31 March 2006 was £26.8 million (excluding animpairment charge of £102.6 million). The amortisation charge reported inBlueheath's financial statements for the year to 4 March 2006 was £0.1 million. Lease incentives Under IFRS lease incentives are required to be recognised in the income andexpenditure account spread throughout the period of the lease. Booker Holdingsentered into a 25 year sale and leaseback transaction in February 2005. Under UKGAAP, approximately £20 million of lease incentives were being recognised overthe five year period to the first rent review in February 2010. A benefit ofapproximately £4.0 million was therefore reported per annum under UK GAAP to theyear ending March 2010. Under IFRS the benefit will be approximately £0.8million per annum throughout the 25 year of the lease. Takeover Code Following Admission, the Concert Party will own Ordinary Shares in aggregaterepresenting approximately 47.6 per cent. of the Enlarged Share Capital. The terms of the Acquisition give rise to certain considerations under theTakeover Code. The Takeover Code is issued and administered by the TakeoverPanel. The Takeover Code is designed principally to ensure fair and equaltreatment of all shareholders in relation to UK takeovers. Under Rule 9 of the Takeover Code, any person who acquires an interest (asdefined in the Takeover Code) in shares which, taken together with shares inwhich he is already interested and in which persons acting in concert with himare interested, carry 30 per cent. or more of the voting rights of a companywhich is subject to the Takeover Code is normally required to make a generaloffer to all the remaining shareholders to acquire their shares. Similarly, whenany person, together with persons acting in concert with him, is interested inshares which in the aggregate carry not less than 30 per cent. of the votingrights of such a company but not more than 50 per cent. of such voting rights, ageneral offer will normally be required if any further interests in shares areacquired by any such person. An offer under Rule 9 must be made in cash and at the highest price paid by theperson required to make the offer, or any person acting in concert with him, forany interest in shares of the company during the 12 months prior to theannouncement of the offer. BG Holding ehf, Fons Eignarhaldsfelag hf, Milton ehf, Kevin Stanford and TBHTrading Limited are deemed to be acting in concert in relation to Blueheath forthe purposes of the Takeover Code. On completion of the Acquisition, the ConcertParty Members will between them be interested in 707,844,210 Ordinary Shares,representing approximately 47.6 per cent. of the Company's enlarged voting sharecapital. As a result of the Acquisition, the Concert Party Members will betweenthem hold interests in New Ordinary Shares carrying not less than 30 per cent.of the voting rights in the Company. The Takeover Panel has agreed, however, to waive the obligation to make ageneral offer that would otherwise arise on the part of the Concert PartyMembers as a result of the issue of Ordinary Shares to Concert Party Members,subject to the approval of Shareholders. Accordingly, Resolution 2 is beingproposed at the EGM and will be taken on a poll. To be passed, Resolution 2 willrequire a simple majority of the votes cast. Following completion of the Acquisition the Concert Party Members will betweenthem be interested in Ordinary Shares carrying more than 30 per cent. of theCompany's voting share capital but will not hold shares carrying more than 50per cent. of such voting rights and, for as long as they continue to be treatedfor the purposes of the Takeover Code as acting in concert, any further increasein that aggregate interest in shares will be subject to the provisions of Rule 9of the Takeover Code. Dividend Policy The Proposed Directors intend to adopt a dividend policy which will reflect thelong-term earnings and cashflow potential of the Enlarged Group, whilstmaintaining an appropriate level of dividend cover. It is envisaged that theEnlarged Group will pay an interim and a final dividend in respect of each year. The payment of a dividend in respect of the current financial year is dependenton a number of factors including the availability of distributablereserves within the Company and finalisation of the level of contributions tothe Enlarged Group's pension schemes. Corporate Governance The Proposed Directors recognise the importance of sound corporate governance.Although the Company, as a company admitted to AIM, will not be required tocomply with the Combined Code, the Proposed Directors recognise that it is inthe best interests of the Company and its Shareholders for the Company to complywith those principles of corporate governance in the Combined Code which areappropriate for a company of its size and nature. The Proposed Directors consider that Richard Rose, the proposed Non-ExecutiveChairman, is independent for the purposes of the Combined Code. Although uponAdmission the Company will not comply with the Combined Code requirementsregarding the number of independent directors and committee composition, it isthe intention of the Proposed Directors to appoint two independent non executivedirectors to join the Board in due course following Admission. The Board has established with effect from Admission audit, remuneration andnomination committees comprising of Richard Rose and Kevin Lyon. Following theappointment of the two additional independent non-executive directors, the Boardwill review the composition of the committees. The committees have duties and responsibilities formally delegated to them bythe Board. The audit committee will meet at least three times each year. The auditcommittee is primarily responsible for: (i) ensuring that the financialperformance of the Enlarged Group is properly monitored and reported on; (ii)meeting with the auditors and reviewing reports from the auditors relating tothe Enlarged Group's accounting and internal controls; (iii) reviewing theeffectiveness of the Enlarged Group's systems of internal control; and (iv)agreeing the terms of appointment and remuneration of the auditors. The remuneration committee will meet at least twice a year. The remunerationcommittee is responsible for setting the remuneration and other terms ofemployment of the Company's executive officers and management and determiningand reviewing any share incentive plans. The nomination committee will meet at least twice a year. The nominationcommittee is responsible for making recommendations on the appointment ofadditional directors and for reviewing the size, structure and composition ofthe Board and the membership of Board committees. The Proposed Directors will, following Admission, adopt a share dealing code forthe Directors and the Enlarged Group's employees who have access to pricesensitive information, which is appropriate for a company whose shares areadmitted to trading on AIM (in order to, amongst other things, ensure compliancewith Rule 21 of the AIM Rules). The Proposed Directors intend to take allreasonable steps to ensure compliance with the share dealing code by theDirectors and relevant employees. Relationship Agreement The Concert Party Members have entered into a relationship agreement with theCompany to regulate certain aspects of the continuing relationship between theCompany and them, whereby they undertake to the Company to exercise their powersof control and voting rights in relation to the Company in accordance with theprovisions of the relationship agreement, for as long as they constitute aConcert Party and together hold ordinary shares in Blueheath carrying not lessthan 30 per cent. of the voting rights. Admission to AIM and Dealings The Acquisition will constitute a reverse take-over under the AIM Rules and istherefore conditional upon the approval of Shareholders being given at theExtraordinary General Meeting, details of which are set out below. Application will be made for the Enlarged Share Capital to be admitted totrading on AIM and it is anticipated that Admission will become effective andthat trading in the Ordinary Shares on AIM will commence on 4 June 2007. The Proposed Directors intend that, if and when appropriate, they will apply forthe Company's ordinary shares to be admitted to the Official List of the UKListing Authority and to trading on the London Stock Exchange's main market forlisted securities. Extraordinary General Meeting It is anticipated that the Extraordinary General Meeting, to be held at theoffices of Taylor Wessing LLP, Carmelite, 50 Victoria Embankment, Blackfriars,London EC4Y 0DX will be convened at 11.00 am on 1 June 2007, at which, thefollowing Resolutions will be proposed: * Resolution 1 is an ordinary resolution: (a) to approve the Acquisition for the purposes of the AIM Rules; (b) to increase the authorised share capital of the Company from £2,000,000 to£20,000,000 in order to permit the issue of the New Ordinary Shares and to givethe Company headroom for the future; (c) authorising the Directors under section 80 of the Act to allot: (i) the New Ordinary Shares pursuant to the terms of the Acquisition; and (ii) further new Ordinary Shares up to a nominal amount of £5,019,134, being theequivalent of approximately one-third of the Enlarged Share Capital and anamount necessary to meet the exercise of options under the Company's shareincentive schemes, in accordance with industry guidelines. This authorityreplaces the authority given at the last Annual General Meeting of the Companyand will expire on the date of the next Annual General Meeting of the Company or15 months after the date of the passing of Resolution 1, whichever is earlier; * Resolution 2 is an ordinary resolution (which will be held on a poll) toapprove the waiver by the Takeover Panel of the requirement under Rule 9 of theTakeover Code of the Concert Party to make a general offer for Blueheath; * Resolution 3 is an ordinary resolution to amend the Blueheath's SeniorManagement Incentive Scheme so that a reverse takeover of the Company willresult in the options vesting in full in the same way as on a takeover. * Resolution 4 is a special resolution to disapply statutory pre-emption rightsfor: (a) any issue of new Ordinary Shares to existing Shareholders and other personsmade pro rata to existing holdings and the deemed holdings of other personsentitled to participate in any such issue. Typically, this would involve arights issue. This means that, although an issue of Ordinary Shares will be madeto Blueheath shareholders and such other persons in accordance with theirexisting holdings (and will therefore have no dilutive effect), the directors donot have to comply with the procedural requirements of the Act; and (b) allotments for cash of Ordinary Shares up to a nominal amount of £744,200,which is equivalent to approximately 5 per cent. of the Enlarged Share Capital.Again, it is typical for an AIM quoted company to empower its directors todisapply statutory pre-emption rights in respect of a proportion of its issuedshare capital on an annual basis. Industry guidelines suggest that a companylimit such disapplication to 5 per cent. of its issued share capital. This authority replaces the authority given at the last Annual General Meetingof the Company and will expire on the date of the next Annual General Meeting ofthe Company or 15 months after the date of the passing of Resolution 4,whichever is earlier; * Resolution 5 is a special resolution to adopt new Articles of Association ofBlueheath, to bring them into line with current practice for a public companywhere shares are admitted to trading on AIM.; and * Resolution 6 is a special resolution to change the name of the Company toBooker Group plc. The Acquisition is conditional on Resolutions 1 and 2 being passed. If any ofthe other Resolutions are not passed, the Acquisition will proceed nevertheless. The Admission Document incorporating the notice of EGM is expected to be postedto Shareholders today. The definitions set out below have the following meanings, unless the contextrequires otherwise. "Act" The Companies Act 1985 (as amended) "Acquisition" The proposed acquisition by Blueheath of the entire issued share capital of Booker Holdings "Admission" The re-admission of the Existing Ordinary Shares and the admission of the New Ordinary Shares to trading on AIM becoming effective in accordance with the AIM Rules Admission Document" The Admission Document dated 9 May 2007, prepared in connection with the Flotation "AIM" The AIM market operated by the London Stock Exchange "AIM Rules" The rules published by the London Stock Exchange governing admission to, trading on and regulation and operation of AIM "Blueheath" or the "Company" Blueheath Holdings PLC, a company incorporated and registered in England and Wales with registered number 05145685 "Blueheath Group" Blueheath and its subsidiary undertakings as at the date of this document "Board" or "Directors" The board of directors of the Company "Booker" Booker Limited, a company incorporated and registered in England and Wales with registered number 00197380 and indirectly, a wholly owned subsidiary of Booker Holdings "Booker EBT" The employee benefit trust established on 25 April 2006 for the benefit of employees of the Booker Group "Booker Group" Booker Holdings and its subsidiary undertakings as at date of this announcement or any one or more of them as the context may require "Booker Holdings" Giant Topco, indirectly, the owner of 100 per cent. of the issued share capital of Booker, and the ultimate holding company of the Booker Group "Booker Pension Scheme" the Booker defined benefit pension scheme which came into operation on 1 January 1949 "Combined Code" The Combined Code on Corporate Governance appended to but not forming part of the FSA's Listing Rules published in June 2006 by the Financial Reporting Council "Completion" Completion of the Share Purchase Agreement in accordance with its terms "Concert Party" BG Holding ehf, Fons Eignarhaldsfelag hf, Milton ehf, Kevin Stanford and TBH Trading Limited (each a ''Concert Party Member'') "Enlarged Group" Blueheath and its subsidiary undertakings, including the Booker Group, following Completion or any one or more of them as the context may require "Enlarged Ordinary Share capital" or The Existing Ordinary Shares and the"Enlarged Share Capital" New Ordinary Shares immediately following Admission "Existing Ordinary Shares" The 143,488,122 Ordinary Shares in the capital of the Company in issue as at today's date "Extraordinary General Meeting" or The extraordinary general meeting of"EGM" Blueheath which is expected to be convened for 11.00 a.m. on 1 June 2007 at which the Resolutions will be proposed and any adjournment thereof "Flotation" The admission to trading of the Company's Ordinary Shares on AIM which is expected to be 4 June 2007 "FRS" The Financial Reporting Standards as issued by the Accounting Standards Boards from time to time "Fully Diluted Enlarged Share The Enlarged Share Capital plus allCapital" outstanding Options "IFRS" The International Financial Reporting standards as issued by the Board of International Standards Committee from time to time "Investec" Investec Investment Banking, a division of Investec Bank (UK) Limited "Key Vendors" Milton ehf, Kevin Stanford, TBH Trading Limited, Kaupthing Bank hf, The Governor and Company of the Bank of Scotland and Uberior Investments plc "London Stock Exchange" London Stock Exchange plc "New Ordinary Shares" The 1,344,910,958 new Ordinary Shares to be issued to shareholders of Booker Holdings pursuant to the terms of the Acquisition "Official List" The Official List of the United Kingdom Listing Authority "Options" Options over Ordinary Shares "Orderly Market Period" The period commencing on the date of Admission and ending twelve months from the date of Admission "Ordinary Shares" Ordinary shares of 1p each in the share capital of Blueheath "Pensions Regulator" The Pensions Regulator established by the Pensions Act 2004 "Proposed Directors" The proposed directors of Blueheath with effect from Admission "Resolutions" The resolutions to be proposed at the EGM (and set out in the notice of EGM) "Share Purchase Agreement"" The share purchase agreement dated 9 May 2007 between Blueheath, the Key Vendors, Charles Wilson, Jonathan Prentis and the Booker EBT pursuant to which, conditionally, inter alia, upon Admission and the passing of Resolutions 1 and 2, Blueheath has agreed to acquire the entire issued share capital of Booker Holdings "Shareholder" or "Ordinary Holder of Ordinary SharesShareholder" ""Takeover Code" The City Code on Takeovers and Mergers "Takeover Panel" The Panel on Takeovers and Mergers "UK" or "United Kingdom" The United Kingdom of Great Britain and Northern Ireland "UK GAAP" United Kingdom Generally Accepted Accounting Principles This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Booker Group