Debt tender offer and intention to issue New Notes

10 September 2012

THESE MATERIALS DO NOT CONSTITUTE OR FORM A PART OF ANY OFFER OR SOLICITATION TO PURCHASE OR SUBSCRIBE FOR SECURITIES IN THE UNITED STATES. THE NOTES MENTIONED HEREIN HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT").

THE NOTES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, US PERSONS (AS SUCH TERM IS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THERE WILL BE NO PUBLIC OFFER OF SECURITIES IN THE UNITED STATES.

NOT FOR DISTRIBUTION IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS (See "Offer and Distribution Restrictions" below).

Dixons Retail plcDebt tender offer and intention to issue New Notes

Dixons Retail plc (the "Company"), one of Europe's leading specialist electrical retailers, announces today an invitation to holders to repurchase for cash up to £80,000,000 of its outstanding £300,000,000 6.125 per cent. Guaranteed Bonds due 2012 (the "Existing 2012 Notes") and up to £50,000,000 of its outstanding £150,000,000 8.75 per cent. Guaranteed Notes due 2015 (the "Existing 2015 Notes" and together with the Existing 2012 Notes, the "Existing Notes"), the details of which are set out below (the "Invitation").

The Company also announces today its intention to issue new sterling-denominated fixed rate guaranteed notes of the Company with an expected maturity in 2017 (the "New Notes"), subject to market conditions, to institutional investors.

The Existing 2012 Notes, of which £160,000,000 are currently outstanding, will be purchased pursuant to the Invitation using the Company's existing cash resources, whereas the Existing 2015 Notes will be purchased using the proceeds of the issue of the New Notes.

The Invitation

The Invitation is made on the terms and subject to the conditions contained in the Tender Offer Memorandum dated 10 September 2012 (the "Tender Offer Memorandum") including the offer and distribution restrictions contained therein and this announcement should be read in conjunction with the Tender Offer Memorandum. Capitalised terms used but not otherwise defined in this announcement shall have the meaning given to them in the Tender Offer Memorandum.

* Subject to a minimum of £50,000 being tendered

Rationale for Issue of the New Notes and the Invitation

The purpose of the issue of the New Notes and the Invitation in respect of the Existing 2015 Notes is to extend the Company's debt maturity profile and to increase overall Group liquidity. Separately, the primary purpose of the Invitation in respect of the Existing 2012 Notes, is to utilise existing cash balances efficiently.

Whether the Company will accept for repurchase any Existing 2015 Notes validly tendered in the Invitation is subject, at the option of the Company, to the successful completion (in the determination of the Company) of the issue of the New Notes, on terms satisfactory to the Company (in its sole discretion), in order to enable it to finance, in whole or in part, the Existing 2015 Notes Repurchase Price and Accrued Interest for the Existing 2015 Notes validly tendered and accepted pursuant to the Invitation.

For the avoidance of doubt, the repurchase of any Existing 2012 Notes validly tendered in the Invitation will not be conditional on the successful completion of the issue of the New Notes.

Pro Ration

The Company proposes to accept up to the relevant Maximum Acceptance Amount for each Series of Existing Notes for repurchase pursuant to the Invitation (although the Company reserves the right, in its sole discretion, to accept more or less than the relevant Maximum Acceptance Amount for repurchase). If the aggregate principal amount of Existing Notes of either Series validly tendered for repurchase pursuant to the Invitation is greater than the relevant Maximum Acceptance Amount, the Company intends to accept such validly tendered Existing Notes on a pro rata basis such that the aggregate principal amount of such Existing Notes accepted for repurchase is no greater than the relevant Maximum Acceptance Amount.

Repurchase Price and Accrued Interest

If Existing Notes validly tendered in the Invitation are accepted for repurchase by the Company, the total amount the Company will pay Noteholders on the Settlement Date for each £1,000 in principal amount of Existing Notes accepted for repurchase pursuant to the Invitation will be an amount (rounded to the nearest £0.01) equal to:

(a) (i) in respect of the Existing 2012 Notes, the Existing 2012 Notes Repurchase Price (£1,004 per £1,000 principal amount of Existing Notes) or, (ii) in respect of the Existing 2015 Notes, the Existing 2015 Notes Repurchase Price (£1,050 per £1,000 principal amount of Existing Notes); plus

(b) Accrued Interest on such £1,000 in principal amount.

Indicative Timetable

In order to be eligible to receive the relevant Repurchase Price and Accrued Interest, Noteholders must validly tender their Existing Notes by 4.00 p.m. (London time) on 17 September 2012, by delivering, or arranging to have delivered on their behalf, a valid Tender Instruction that is received by the Tender Agent by the Expiration Deadline. The deadlines set by any intermediary or clearing system may be earlier than the deadline specified above.

Tenders of Existing Notes in the Invitation will be irrevocable except in the limited circumstances described in the Tender Offer Memorandum under the heading "Amendment and Termination".

Subject to applicable law and as provided in the Tender Offer Memorandum, the Company may, in its sole discretion, extend, re-open, amend, waive any condition of or terminate the Invitation at any time.

The anticipated transaction timetable is summarised below:

The Company

Investor Contacts

David Lloyd-Seed IR & Corporate Affairs Director, Dixons Retail 01727 205065

Ian Ladd Group Treasurer, Dixons Retail 01727 204526

Media Contacts

Mark Webb Head of Media Relations, Dixons Retail 01727 205019

Tom Burns, Zoe Bird Brunswick 020 7404 5959

Information on the Company is available at http://www.dixonsretail.com

The Royal Bank of Scotland plc, HSBC Bank plc, Citigroup Global Markets Limited, BNP Paribas and Barclays Bank PLC are acting as Dealer Managers for the Invitation. The Royal Bank of Scotland plc, HSBC Bank plc, Citigroup Global Markets Limited, BNP Paribas and Barclays Bank PLC are acting as Bookrunners for the offering of the New Notes. Lucid Issuer Services Limited is acting as Tender Agent. For detailed terms of the Invitation please refer to the Tender Offer Memorandum which (subject to offer and distribution restrictions) can be obtained from the Dealer Managers and the Tender Agent referred to below:

Dealer Manager Contacts:

The Royal Bank of Scotland plc135 BishopsgateLondon EC2M 3UR

Telephone: +44 20 7085 4634

Attention: Liability Management Group

Email: [email protected]

HSBC Bank plc8 Canada SquareLondon E14 5HQ

Telephone: +44 20 7992 6237

Attention: Liability Management Group

Email: [email protected]

Citigroup Global Markets LimitedCitigroup CentreCanada SquareCanary WharfLondon E14 5LBTelephone: +44 20 7986 8969

Attention: Liability Management Group

Email: [email protected]

BNP Paribas10 Harewood AvenueLondon NW1 6AA

Telephone: +44 20 7595 8668

Attention: Liability Management Group

Email: [email protected]

Barclays Bank PLC5 The North ColonnadeCanary WharfLondon E14 4BB

Telephone: +44 20 7773 8990

Attention: Liability Management Group

Email: [email protected]

Tender Agent:

Lucid Issuer Services LimitedLeroy House436 Essex RoadLondon N1 3QP

Telephone: +44 20 7704 0880

Attention: Paul Kamminga/David Shilson

Email: [email protected]

Disclaimer

This announcement must be read in conjunction with the Tender Offer Memorandum. This announcement and the Tender Offer Memorandum contain important information which should be read carefully before any decision is made with the respect to the Invitation. If you are in any doubt as to the action you should take, you are recommended to seek your own financial and legal advice, including as to any tax consequences, from your stockbroker, bank manager, legal counsel, accountant or other independent financial adviser. Any individual or company whose Existing Notes are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee must contact such entity if it wishes to tender Existing Notes in the Invitation. None of the Company, the Dealer Managers or the Tender Agent makes any recommendation whether Noteholders should tender Existing Notes in the Invitation.

No action has been taken or will be taken in any jurisdiction in relation to the New Notes that would permit a public offering of securities and the minimum denomination of the New Notes will be £100,000.

Offer and Distribution Restrictions

The distribution of this announcement and the Tender Offer Memorandum in certain jurisdictions may be restricted by law.

Persons into whose possession this announcement and/or the Tender Offer Memorandum comes are required by the Company, the Dealer Managers and the Tender Agent to inform themselves about and to observe any such restrictions. Neither this announcement nor the Tender Offer Memorandum constitutes an offer to buy or a solicitation of an offer to sell the Existing Notes, and tenders of Existing Notes in the Invitation will not be accepted from Noteholders in any circumstances in which such invitation or solicitation is unlawful. In those jurisdictions where the securities, blue sky or other laws require the Invitation to be made by a licensed broker or dealer and either Dealer Manager or any of their respective affiliates is such a licensed broker or dealer in such jurisdictions, the Invitation shall be deemed to be made by such Dealer Manager or affiliate (as the case may be) on behalf of the Company in such jurisdictions.

United States. This Invitation is not being made and will not be made directly or indirectly in or into, or by use of the mails of, or by any means or instrumentality (including, without limitation, facsimile transmission, telex, telephone, email and other forms of electronic transmission) of interstate or foreign commerce of, or any facility of a national securities exchange of, or to beneficial owners of Existing Notes who are located in the United States or to U.S. Persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended (each a "U.S. Person") and the Invitation is not capable of acceptance by any such use, means, instrumentality or facility from or within the United States or by persons located or resident in the United States or by U.S. Persons. Accordingly, this announcement and copies of the Tender Offer Memorandum and any documents or materials related to this Invitation are not being, and must not be, directly or indirectly, mailed or otherwise transmitted, distributed, forwarded or sent in or into or from the United States or to any such person, and persons receiving this announcement or the Tender Offer Memorandum (including, without limitation, custodians, nominees and trustees) must not mail or otherwise transmit, distribute, forward or send such document into or from the United States. Any purported offer to sell in response to this Invitation resulting directly or indirectly from a violation of these restrictions will be invalid, and offers to sell made by a person located in the United States or any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States or any U.S. Person will not be accepted.

Each holder of Existing Notes participating in the Invitation will represent that it is not located in the United States and is not participating in such Invitation from the United States and it is not acting on a non-discretionary basis for a principal, unless the principal has given any and all instructions with respect to such Invitation from outside the United States. For the purposes of this and the above paragraph, "United States" means United States of America, its territories and possessions, any state of the United States of America and the District of Columbia.

Italy. None of this announcement, the Invitation, the Tender Offer Memorandum or any other documents or materials relating to the Invitation have been or will be submitted to the clearance procedure of the Commissione Nazionale per le Società e la Borsa (CONSOB) pursuant to Italian laws and regulations, and therefore the Invitation may only be made or promoted, directly or indirectly, in or into the Republic of Italy pursuant to an exemption from the rules governing public purchases or exchange offers (offerte pubbliche di acquisto o scambio) as defined in article 1, paragraph 1, letter v of the Italian Legislative Decree no. 58 of February 24, 1998, as amended (the "Financial Services Act").

Accordingly, the Invitation is not addressed to, and neither this announcement, the Tender Offer Memorandum nor any other documents, materials or information relating, directly or indirectly, to the Invitation can be distributed or otherwise made available (either directly or indirectly) to any person in Italy other than:

(i) to qualified investors (investitori qualificati) as defined pursuant to article 100 of the Financial Services Act and article 34-ter, paragraph 1, letter (b), of CONSOB Regulation No. 11971 of 14 May 1999, as amended from time to time (the "CONSOB Regulation") acting on their account; or

(ii) in any other circumstances where an express exemption from compliance with the restrictions on public purchases or exchange offers applies pursuant to the Financial Services Act or the CONSOB Regulation.

United Kingdom. The communication of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Invitation is not being made, and such documents and/or materials have not been approved, by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000 (the "FSMA"). Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials is exempt from the restriction on financial promotions under section 21 of the FSMA on the basis that it is only directed at and may be communicated to (1) those persons who are existing members or creditors of the Company or other persons within Article 43 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, and (2) to any other persons to whom these documents and/or materials may lawfully be communicated.

Belgium. None of this announcement, the Tender Offer Memorandum or any other documents or materials relating to the Invitation has been submitted to or will be submitted for approval or recognition to the Belgian Financial Services and Markets Authority (Autorité des services et marchés financiers/Autoriteit voor financiële diensten en markten) and, accordingly, the Invitation may not be made in Belgium by way of a public offering, as defined in Article 3 of the Belgian Law of 1 April 2007 on public takeover bids or as defined in Article 3 of the Belgian Law of 16 June 2006 on the public offer of placement instruments and the admission to trading of placement instruments on regulated markets (the "Belgian Public Offer Law") (each as amended or replaced from time to time). Accordingly, the Invitation may not be advertised and the Invitation will not be extended, and none of this announcement, the Tender Offer Memorandum or any other documents or materials relating to the Invitation (including any memorandum, information circular, brochure or any similar documents) has been or shall be distributed or made available, directly or indirectly, to any person in Belgium other than "qualified investors" in the sense of Article 10 of the Belgian Public Offer Law, acting on their own account. Insofar as Belgium is concerned, this announcement and/or the Tender Offer Memorandum has been issued only for the personal use of the above qualified investors and exclusively for the purpose of the Invitation. Accordingly, the information contained in this announcement and/or the Tender Offer Memorandum may not be used for any other purpose or disclosed to any other person in Belgium.

France. The Invitation is not being made, directly or indirectly, to the public in the Republic of France. This announcement, the Tender Offer Memorandum and any other offering material relating to the Invitation may not be distributed to the public in the Republic of France and only (i) providers of investment services relating to portfolio management for the account of third parties (personnes fournissant le service d'investissement de gestion de portefeuille pour compte de tiers); and/or (ii) qualified investors (investisseurs qualifiés) with the exception of individuals, acting for their own account, all as defined in and in accordance with Articles L.411-1, L.411-2 and D.411-1 to D.411-3, D-744-1, D-754-1 and D-764-1 of the French Code monétaire et financier, are eligible to participate in the Invitation. None of this announcement, the Tender Offer Memorandum, or any other such offering material has been submitted for clearance to or approval by the Autorité des Marchés Financiers.