Offer Update - Pension Scheme Trustees Statement

UPDATE FROM THE TRUSTEES OF THE MORRISONS RETIREMENT SAVER PLAN AND THE SAFEWAY PENSION SCHEME (TOGETHER, THE "TRUSTEES" AND THE "SCHEMES") IN THE CONTEXT OF THE MORRISONS BID SITUATION

In issuing this update on their statement issued on 24th August 2021, neither the Trustees nor their advisers are providing, nor do they intend to provide, any financial, legal, tax, investment, or any other advice. This update does not constitute a recommendation as to the merits of the CD&R Offer and any acceptance of the CD&R Offer or decision to vote in favour of the Scheme should be based on an assessment of the CD&R Offer as a whole and Morrisons Shareholders should undertake their own analysis of the CD&R Offer and seek independent advice as appropriate.

Morrisons has agreed to include the full text of the update, as set out below.

On 24th August 2021, the Trustees announced that, following Clayton, Dubilier and Rice, LLC as manager of Clayton Dubilier & Rice Funds XI ("CD&R") announcing the terms of an offer (the "CD&R Offer") to be made for Wm Morrison Supermarkets plc ("Morrisons") on 19th August 2021, discussions regarding an appropriate mitigation package for the Schemes were at an early stage.

Whilst the Schemes are currently in surplus on an ongoing funding basis and benefit from security in the form of properties held within a pension funding partnership structure, the Schemes currently do not have sufficient resources (inclusive of the current security) to secure, or "buy out", Scheme benefits with an insurance company. The Schemes' long-term objective in each case is to reach full funding on a "buy out" basis in less than 10 years, which the Trustees currently believe is possible without requiring cash contributions from the Morrisons group beyond those already agreed In light of the covenant impact for the Schemes arising from, inter alia, the additional debt secured with a priority claim ahead of the Schemes on the majority of the Morrisons' group assets should the CD&R Offer complete, the Trustees have therefore been focussed on agreeing additional security with CD&R to provide covenant support for the Schemes on their journey to "buy out".

The Trustees are pleased to confirm that they have reached an agreement in principle with CD&R in relation to a package of measures to support the Schemes' journey to "buy out" should the CD&R Offer complete. This package includes additional security to be contributed to the existing pension funding partnership structure in the form of further properties with an appropriate release mechanism to allow for a gradual release of that additional security as the Schemes progress towards "buy out", together with enhanced governance provisions in respect of the Schemes.

The Trustees welcome CD&R's constructive engagement and are pleased with the progress made to date. They look forward to finalising the contractual details with CD&R ahead of the shareholder meeting in order to secure additional protection for members' benefits under the Schemes. The Trustees also look forward, should the CD&R Offer complete, to continuing to work with CD&R and Morrisons in the future to ensure Scheme benefits remain protected.

Having received professional advice, and having regard to the potential impact of the CD&R Offer and their respective fiduciary obligations to the beneficiaries of each of the Schemes, the Trustees consider that the package of mitigation measures, once contractual details are finalised, will provide sufficient and appropriate support for the Schemes.

Commenting on the agreement, Andrew Higginson, Chair of Morrisons, said:

"The Morrisons Board is pleased that the Trustees and CD&R have engaged constructively and have now reached an agreement, which safeguards the interests of the members of Morrisons' pension schemes."

Media Contact for the Trustees:

Edelman Smithfield

Ged Brumby 07540 412301

John Kiely 07785 275665

Further information

This announcement is for information purposes only and is not intended to and does not constitute, or form part of an offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the CD&R Offer or otherwise, nor shall there be any sale, issuance or transfer of securities of Morrisons in any jurisdiction in contravention of applicable law. To the maximum extent permitted by applicable law, Morrisons disclaims any liability in respect of the contents of the statement from the Trustees of The Morrisons Retirement Saver Plan and The Safeway Pension Scheme set out above.

Publication on a website

In accordance with Rule 26.1 of the Takeover Code, a copy of this announcement will be made available, subject to certain restrictions relating to persons resident in restricted jurisdictions, on Morrisons' website at www.morrisons-corporate.com/investor-centre/offer-from-cdr and www.morrisons-corporate.com/investor-centre/offer-from-fortress by no later than 12 noon (London time) on the first business day following the date of this announcement. For the avoidance of doubt, neither the contents of Morrisons' website nor the contents of any websites accessible from any hyperlinks is incorporated into or forms part of this announcement.