Recommended offer for Spirit Pub Company plc

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT AND INVESTORS SHOULD NOT MAKE ANY INVESTMENT DECISION IN RELATION TO THE NEW GREENE KING SHARES EXCEPT ON THE BASIS OF INFORMATION IN THE PROSPECTUS AND THE SCHEME DOCUMENT WHICH ARE PROPOSED TO BE PUBLISHED IN DUE COURSE

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

4 November 2014

RECOMMENDED OFFER

for

Spirit Pub Company plc ("Spirit")byGreene King plc ("Greene King")

Summary

· The Boards of Greene King and Spirit are pleased to announce that they have reached agreement on the terms of a recommended offer pursuant to which Greene King, or a wholly-owned subsidiary of Greene King, will acquire the entire issued and to be issued ordinary share capital of Spirit (the "Offer"). It is proposed that the Offer will be effected by means of a scheme of arrangement under Part 26 of the Companies Act (the "Scheme").

· Spirit Shareholders will receive:

for each Spirit Share 0.1322 New Greene King Shares and

8 pence in cash (payable by Spirit as dividends)

· The cash payment of 8 pence per Spirit Share will comprise the proposed 2014 final dividend of 1.5 pence per Spirit Share payable on 10 February 2015 to Spirit Shareholders on the register on 16 January 2015 and a special interim dividend of 6.5 pence per Spirit Share payable to Spirit Shareholders on the register on the Effective Date. 

· The Offer (including the cash payment) values each Spirit Share at 115 pence based on the closing price of a Greene King Share on 3 November 2014 of 808.5 pence. The Offer (including the cash payment) values the entire issued and to be issued ordinary share capital of Spirit at approximately £773.6 million and represents a premium of approximately:

· 52.2 per cent. to the undisturbed closing price of 75.5 pence per Spirit Share on 22 September 2014 (being the last Business Day prior to the start of the Offer Period); and

· 53.0 per cent. to the volume weighted average closing price of approximately 75 pence per Spirit Share for the three-month period to 22 September 2014.

· In addition, the Offer (including the cash payment) implies an enterprise value multiple of approximately 10.2 times Spirit's EBITDA for the 52 weeks ended 16 August 2014.

· Following completion of the Offer, Spirit Shareholders will hold approximately 28.9 per cent. of the Combined Group and Greene King Shareholders will hold approximately 71.1 per cent. of the Combined Group.

· The Board of Greene King believes that the Combined Group can be expected to achieve cost synergies of at least £30 million per annum. The one-off costs of delivering these savings are expected to total approximately £25 million.1 Approximately 40 per cent. of synergies are expected to be realised in 2015/16, rising to 80 per cent. in 2016/17, and 98 per cent. in 2017/18. The expected synergies will accrue as a direct result of the success of the Offer and would not be achieved on a standalone basis.

· The Offer is conditional on, among other things:

· the approval of Greene King Shareholders and Spirit Shareholders; and

· the Competition and Markets Authority indicating, on terms reasonably satisfactory to Greene King and Spirit, that it does not intend to make a CMA Phase 2 Reference of the Offer.

· The Scheme will be put to Spirit Shareholders at the Court Meeting and at the Spirit General Meeting. In order to become effective, the Scheme must be approved by a majority in number of the Spirit Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Spirit Shares voted. In addition, special resolutions implementing the Scheme and approving the related Capital Reduction must be passed by Spirit Shareholders representing at least 75 per cent. of votes cast at the Spirit General Meeting.

· The Spirit Directors, who have been so advised by Goldman Sachs International, consider the terms of the Offer to be fair and reasonable. In providing its advice to the Spirit Directors, Goldman Sachs International has taken into account the commercial assessments of the Spirit Directors. Accordingly, the Spirit Directors intend unanimously to recommend that Spirit Shareholders vote in favour of the Scheme at the Court Meeting and in favour of the resolutions to be proposed at the Spirit General Meeting as the Spirit Directors have irrevocably undertaken to do in respect of their own beneficial holdings of 2,017,166 Spirit Shares, representing, in aggregate, approximately 0.31 per cent. of the ordinary share capital of Spirit in issue on 3 November 2014 (being the latest practicable date prior to this Announcement).

· The Offer will be put to Greene King Shareholders at the Greene King General Meeting. Resolutions to approve the Offer and to authorise the creation and allotment of the New Greene King Shares, and any other resolutions required to implement the Offer, must be passed by the requisite majority of Greene King Shareholders.

· The Greene King Directors intend unanimously to recommend that Greene King Shareholders vote in favour of the resolutions to be proposed at the Greene King General Meeting, as the Greene King Directors have irrevocably undertaken to do in respect of their own beneficial holdings of 1,971,483 Greene King Shares, representing, in aggregate, approximately 0.90 per cent. of the ordinary share capital of Greene King in issue on 3 November 2014 (being the latest practicable date prior to this Announcement).

· Greene King plc, incorporated on 1 June 1887, operates over 1,900 managed, tenanted, leased and franchised pubs, restaurants and hotels and has been brewing award-winning ales for more than 200 years. Greene King's three main business sectors are "Retail", a managed pubs business with over 1,000 pubs, "Pub Partners", a leased pubs business with just under 900 pubs, and "Brewing & Brands", which sells and distributes a wide range of award-winning craft ales to both the on-trade and off‑trade.

· For the 53 week financial period ended 4 May 2014, Greene King reported like-for-like sales growth (on a 52 week basis) of 4.1 per cent. in Retail and core like-for-like net income growth of 2.2 per cent. in Pub Partners. Revenue in Brewing & Brands increased by 4.5 per cent. Over the 2014 financial year, Greene King generated revenue of £1,301.6 million and EBITDA of £329.7 million. For the 24 weeks to 19 October 2014, like-for-like "Retail" sales increased by 0.8 per cent., like-for-like "Pub Partners" net income increased by 3.7 per cent. and "Brewing & Brands" own-brewed volume increased by 5.9 per cent.

· Spirit is one of the UK's leading pub companies, with 1,227 pubs across the UK with a particular focus on London and the South East. Spirit's business is divided into two main divisions: a managed pub business of 794 pubs and a leased pub business of 433 pubs2. Spirit is headquartered in Burton upon Trent, Staffordshire, UK and has 17,136 employees3. For the 53 week financial period ended 23 August 2014,Spirit reported like-for-like sales growth (on a 52 week basis) of 4.4 per cent. in the managed pub business and like-for-like sales and net income growth of 2.8 per cent. and 4.2 per cent. respectively in the leased pub business. In the 53 week period ended 23 August 2014, Spirit generated revenue of £800.9 million and EBITDA of £159.4 million, before exceptional items.

· The Scheme Document, containing further information about the Offer and notices of the Court Meeting and the Spirit General Meeting, will be published by Spirit as soon as practicable. The Scheme Document will be made available by Greene King on its website at www.greeneking.co.uk and by Spirit on its website at www.spiritpubcompany.com.

· It is expected that the Circular and Prospectus containing information about the New Greene King Shares and the Combined Group (and, in the case of the Circular, including a notice convening the Greene King General Meeting), will be published by Greene King at the same time as the Scheme Document is sent to Spirit Shareholders. The Circular and Prospectus will each be made available by Greene King on its website at www.greeneking.co.uk and by Spirit on its website at www.spiritpubcompany.com.

· It is expected that the Scheme will become effective in the first half of 2015, subject to the satisfaction or waiver of the Conditions and certain further terms set out in Appendix I to this Announcement.

Commenting on the Offer, Walker Boyd, Chairman of Spirit, said:

"Over the last several years Spirit's team, under Mike Tye, has delivered a turnaround of the business and put it firmly on the growth path. Since the demerger we have pursued a successful strategy of investing in brands, people, infrastructure and property which, when combined with our strong balance sheet, positions the business well for future growth. The combination with Greene King will take this to the next level, creating the UK's leading pub group with further opportunities for growth and accelerating progress towards our objectives of delivering attractive returns for investors, flawless operational execution for guests and compelling development opportunities for our people."

Commenting on the Offer, Rooney Anand, CEO of Greene King, said:

"The proposed acquisition represents a key step towards our objective of building the best pubs and beer business in the UK. This exciting combination of the Spirit business with Greene King accelerates our momentum and is in line with our stated strategy of further improving the quality of our pub estate and increasing exposure to the growing eating-out sector.

This offer represents a fair price for Spirit's high quality estate that fits well within the Greene King portfolio on both a brand and geographic basis, expanding our presence in the attractive London and South East area. The combined business will deliver the best pub portfolio in the UK as we combine high quality pub assets, industry-leading brands and talented hospitality teams. We believe this acquisition will drive attractive long term returns for both sets of shareholders, with the combined business benefitting from significant operational efficiencies and cost savings."

Greene King will host a presentation for analysts and investors at Lazard, 50 Stratton Street, London, W1J 8LL with a conference call facility which will start promptly at 9:30 a.m. (London time) on 4 November 2014. The dial-in numbers are: +44 (0) 20 3003 2666 for those calling from the UK and 0808 109 0700 for standard international access. The password is "Greene King". For a replay (which will be available for seven days) the dial-in will be: +44 (0) 20 8196 1998, followed by the Access PIN: 2392153.

The analyst presentation slides will be available on Greene King's website at www.greeneking.co.uk and on Spirit's website at www.spiritpubcompany.com.

The above summary should be read in conjunction with, and is subject to, the full text of this Announcement (including its appendices). The Offer will be subject to the Conditions and further terms set out in Appendix I to this Announcement and to the full terms and conditions which will be set out in the Scheme Document. Appendix II to this Announcement contains the sources of information and bases of calculations of certain information contained in this Announcement. Appendix III to this Announcement contains details of the irrevocable undertakings received in relation to the Offer. Appendix IV contains details of and bases of calculation of the anticipated financial benefits of the Offer. Appendix IV also contains reports from Ernst & Young LLP and Lazard & Co., Limited and Citigroup Global Capital Markets Limited in connection with the anticipated financial benefits of the Offer, as required pursuant to Rule 28.1 of the Code. Each of Ernst & Young LLP, Lazard & Co., Limited and Citigroup Global Capital Markets Limited has given and not withdrawn its consent to the publication of its report in the form and context in which it is included. Appendix V to this Announcement contains definitions of certain expressions used in the above summary and in this Announcement.

Important Notices

Lazard & Co., Limited is authorised and regulated by the Financial Conduct Authority. Lazard & Co., Limited is acting exclusively as financial adviser to Greene King and no one else in connection with the Offer and shall not be responsible to anyone other than Greene King for providing the protections afforded to clients of Lazard & Co., Limited nor for providing advice in connection with the Offer or any matter referred to herein. Neither Lazard & Co., Limited nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Lazard & Co., Limited in connection with this announcement, any statement contained herein or otherwise.

Citigroup Global Markets Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the UK. Citigroup Global Markets Limited is acting exclusively as financial adviser and corporate broker to Greene King and no one else in connection with the Offer and shall not be responsible to anyone other than Greene King for providing the protections afforded to clients of Citigroup Global Markets Limited nor for providing advice in connection with the Offer or any matter referred to herein.

Deutsche Bank AG is authorised under German Banking Law (competent authority: BaFIN - Federal Financial Supervisory Authority). Deutsche Bank AG, London Branch is further authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the UK. Deutsche Bank AG is acting exclusively as corporate broker to Greene King and no one else in connection with the Offer and shall not be responsible to anyone other than Greene King for providing the protections afforded to clients of Deutsche Bank AG, London Branch nor for providing advice in connection with the Offer or any matter referred to herein.

Goldman Sachs International, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the UK, is acting for Spirit and no one else in connection with the Offer and will not be responsible to anyone other than Spirit for providing the protections afforded to clients of Goldman Sachs International nor for providing advice in connection with the Offer or any matter referred to herein.

Numis Securities Limited, which is authorised and regulated by the Financial Conduct Authority in the UK, is acting as broker for Spirit and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Spirit for providing the protections afforded to clients of Numis Securities Limited, or for providing advice in connection with the matters referred to in this announcement.

This Announcement is for information purposes only. It 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 Offer or otherwise nor will there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law.

The Offer will be made solely by means of the Scheme Document which, together with the Forms of Proxy, will contain the full terms and conditions of the Offer including details of how Spirit Shareholders may vote in respect of the Offer.

This Announcement has been prepared for the purpose of complying with English law and the Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws and regulations of jurisdictions outside the UK.

The Offer will be subject to the applicable requirements of the Code, the Panel, the London Stock Exchange and the Financial Conduct Authority.

Spirit will prepare the Scheme Document to be distributed to Spirit Shareholders and Greene King will prepare the Circular and Prospectus to be distributed to Greene King Shareholders and (in the case of the Prospectus) made available to Spirit Shareholders containing information about the New Greene King Shares and the Combined Group. Spirit urges Spirit Shareholders to read the Scheme Document and the Prospectus when they become available because they will contain important information in relation to the Offer, the New Greene King Shares and the Combined Group. Greene King urges Greene King Shareholders to read the Circular and Prospectus when they become available because they will contain important information in relation to the Offer, the New Greene King Shares and the Combined Group. Any vote in respect of the Scheme or other response in relation to the Offer should be made only on the basis of the information contained in the Scheme Document and the Prospectus (in the case of Spirit Shareholders), or the Circular and Prospectus (in the case of Greene King Shareholders).

This Announcement does not constitute a prospectus or prospectus equivalent document.

Overseas Shareholders

The release, publication or distribution of this Announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the UK or who are subject to the laws of other jurisdictions should inform themselves of, and observe, any applicable requirements. Any failure to comply with the applicable requirements may constitute a violation of the laws of any such jurisdiction.

The Offer relates to shares of a UK company and is proposed to be effected by means of a scheme of arrangement under the laws of England and Wales. A transaction effected by means of a scheme of arrangement is not subject to proxy solicitation or tender offer rules under the US Exchange Act of 1934 (as amended). Accordingly, the Scheme is subject to the disclosure requirements, rules and practices applicable in the UK to schemes of arrangement, which differ from US disclosure requirements and the requirements of US proxy solicitation or tender offer rules. However, if Greene King were permitted and did elect to implement the Offer by means of a takeover offer, such takeover offer will be made in compliance with all applicable laws and regulations, including Section 14(e) of the US Exchange Act and Regulation 14E thereunder. Such a takeover would be made in the United States by Greene King and no one else. In addition to any such takeover offer, Greene King, certain affiliated companies and the nominees or brokers (acting as agents) may make certain purchases of, or arrangements to purchase, shares in Spirit outside such takeover offer, such as in open market or privately negotiated purchases, during the period in which such takeover offer would remain open for acceptance. If such purchases or arrangements to purchase were to be made they would be made outside the United States and would comply with applicable law, including the US Exchange Act of 1934 (as amended). Any information about such purchases will be disclosed as required in the UK, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website: www.londonstockexchange.com.

Unless otherwise determined by Greene King or required by the Code, and permitted by applicable law and regulation, the Offer will not be made, directly or indirectly, in, into or from any jurisdiction where to do so would violate the laws in that jurisdiction, and the Offer will not be capable of acceptance from or within such jurisdiction where such acceptance would violate the laws of that jurisdiction. Accordingly, copies of this Announcement and all documents relating to the Offer are not being, and must not be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent in, into or from any jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this Announcement and all documents relating to the Offer (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions where to do so would violate the laws in that jurisdiction. The Offer will not be made into, or be capable of acceptance from or within, any US state or jurisdiction that would require the registration or qualification of the Offer.

The availability of the Offer to Spirit Shareholders who are not resident in the UK may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the UK should inform themselves of, and observe, any applicable requirements.

The New Greene King Shares may not be offered, sold or delivered, directly or indirectly, in, into or from any Restricted Jurisdiction or to, or for the account or benefit of, any Restricted Overseas Persons except, in each case, pursuant to an applicable exemption from, or in a transaction not subject to, applicable securities laws of those jurisdictions.

This Announcement is not an offer for sale of, or solicitation of an offer to buy, securities in the United States and the New Greene King Shares, which will be issued in connection with the Offer, have not been, and will not be, registered under the US Securities Act of 1933 (as amended) (the "US Securities Act") or under the securities law of any state, district or other jurisdiction of the United States or any other Restricted Jurisdiction, and no regulatory clearance in respect of the New Greene King Shares has been, or will be, applied for in any jurisdiction other than the UK.

None of the securities referred to in this Announcement have been approved or disapproved by the SEC, any state securities commission in the United States or any other US regulatory authority, nor have such authorities passed upon or determined the adequacy or accuracy of the information contained in this Announcement. Any representation to the contrary is a criminal offence in the United States.

It is expected that the securities referred to in this Announcement will be issued as part of the Offer in reliance upon the exemption from the registration requirements of the US Securities Act provided by Section 3(a)(10) of that Act. Such securities may not be offered, sold, re-offered, resold or delivered, directly or indirectly, in or into the United States or any state, district or other jurisdiction of the United States, except pursuant to exemptions from the applicable registration requirements of such jurisdictions. Spirit Shareholders who will be affiliates of Greene King after the Effective Date will be subject to certain US transfer restrictions relating to the New Greene King Shares received pursuant to the Scheme.

Spirit is an English company that is a foreign private issuer (as defined under Rule 3b-4 under the US Securities Exchange Act of 1934). Financial information included in, or incorporated by reference into, this Announcement has been prepared in accordance with foreign accounting standards that may not be comparable to the accounting standards applicable to financial statements of United States companies.

Forward Looking Statements

This Announcement contains statements about Greene King and Spirit that are or may be forward looking statements. All statements other than statements of historical facts included in this Announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "estimates", "projects" or words or terms of similar substance or the negative thereof, are forward looking statements. Forward looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Greene King's or Spirit's operations and potential synergies resulting from the Offer; and (iii) the effects of government regulation on Greene King's or Spirit's business.

Such forward looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results, performance or achievements to differ materially from those projected or implied in any forward looking statements. The important factors that could cause Greene King's or Spirit's actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, economic and business cycles, the terms and conditions of Greene King's or Spirit's financing arrangements, foreign currency rate fluctuations, competition in Greene King's or Spirit's principal markets, acquisitions or disposals of businesses or assets and trends in Greene King's and/or Spirit's principal industries. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof. Each of Greene King and Spirit and each of their respective members, directors, officers, employees, advisers and any other persons acting on their behalf disclaims any obligation to update any forward looking or other statements contained herein, except as required by applicable law.

No profit forecasts or estimates

No statement in this Announcement is intended as a profit forecast or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share for Greene King or Spirit, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Greene King or Spirit, as appropriate.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3:30 p.m. (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3:30 p.m. (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3:30 p.m. (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at http://www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.

Electronic Communications

Please be aware that addresses, electronic addresses and certain information provided by Spirit Shareholders, persons with information rights and other relevant persons for the receipt of communications from Spirit may be provided to Greene King during the Offer Period as requested under Section 4 of Appendix 4 of the Code in order to comply with Rule 2.12(c) of the Code.

Publication on Website and Availability of Hard Copies

A copy of this Announcement will be made available (subject to certain restrictions relating to persons resident in Restricted Jurisdictions) on Greene King's and Spirit's websites at www.greeneking.co.uk and www.spiritpubcompany.com respectively by no later than 12:00 p.m. (London time) on 5 November 2014. For the avoidance of doubt, the contents of those websites are not incorporated into, and do not form part of, this Announcement.

You may request a hard copy of this Announcement by contacting the Company Secretary, Greene King plc, Westgate Brewery, Bury St Edmunds, Suffolk IP33 1QT, tel: +44 (0)1284 763 222 or the Company Secretary, Spirit Pub Company plc, Sunrise House, Ninth Avenue, Burton upon Trent, Staffordshire, DE14 3JZ, tel: +44 (0)1283 498 400. You may also request that all future documents, announcements and information to be sent to you in relation to the Offer should be in hard copy form.

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT AND INVESTORS SHOULD NOT MAKE ANY INVESTMENT DECISION IN RELATION TO ANY GREENE KING PLC SHARES EXCEPT ON THE BASIS OF INFORMATION IN THE PROSPECTUS AND THE SCHEME DOCUMENT WHICH ARE PROPOSED TO BE PUBLISHED IN DUE COURSE

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

4 November 2014

RECOMMENDED OFFER

for

Spirit Pub Company plc ("Spirit")byGreene King plc ("Greene King")

1 Introduction

The Boards of Greene King and Spirit are pleased to announce that they have reached agreement on the terms of a recommended offer pursuant to which Greene King, or a wholly-owned subsidiary of Greene King, will acquire the entire issued and to be issued ordinary share capital of Spirit (the "Offer"). It is proposed that the Offer will be effected by means of a scheme of arrangement under Part 26 of the Companies Act (the "Scheme").

2 The Offer

· The Offer will be subject to the Conditions and further terms set out below and in Appendix I to this Announcement and the full terms and conditions which will be set out in the Scheme Document.

· Spirit Shareholders will receive:

for each Spirit Share 0.1322 New Greene King Shares and

8 pence in cash (payable by Spirit as dividends)

· The cash payment of 8 pence per Spirit Share will comprise the proposed 2014 final dividend of 1.5 pence per Spirit Share (subject to shareholder approval at Spirit's annual general meeting on 13 January 2015) and a special interim dividend of 6.5 pence per Spirit Share. The 2014 final dividend will be payable on 10 February 2015 to Spirit Shareholders on the register of members as at 16 January 2015 (unless the Effective Date of the Scheme is prior to 10 February 2015, in which case the final dividend will be paid on the Effective Date). The special interim dividend, which will be conditional upon completion of the Offer, will be paid after the Effective Date to Spirit Shareholders on the register of members at the Effective Date.

· The Offer (including the cash payment) values each Spirit Share at 115 pence based on the closing price of a Greene King Share on 3 November 2014 of 808.5 pence. The Offer (including the cash payment) values the entire issued and to be issued ordinary share capital of Spirit at approximately £773.6 million and represents a premium of approximately:

· 52.2 per cent. to the undisturbed closing price of 75.5 pence per Spirit Share on 22 September 2014 (being the last Business Day prior to the start of the Offer Period); and

· 53.0 per cent. to the volume weighted average closing price of approximately 75 pence per Spirit Share for the three-month period to 22 September 2014.

· In addition, the Offer (including the cash payment) implies an enterprise value multiple of approximately 10.2 times Spirit's EBITDA for the 52 weeks ended 16 August 2014.

· Following completion of the Offer, Spirit Shareholders will hold approximately 28.9 per cent. of the Combined Group and Greene King Shareholders holding approximately 71.1 per cent. of the Combined Group.

· The Board of Greene King believes that the Combined Group can be expected to achieve cost synergies of at least £30 million per annum. The one-off costs of delivering these savings are expected to total approximately £25 million.4 Approximately 40 per cent. of synergies are expected to be realised in 2015/16, rising to 80 per cent. in 2016/17, and 98 per cent. in 2017/18. The expected synergies will accrue as a direct result of the success of the Offer and would not be achieved on a standalone basis.

· Aside from the one-off costs referred to above, the directors of Greene King are confident there are no dis-synergies to arise in connection with the acquisition of Spirit that will impact the planned benefits.

· It is expected that the Scheme Document and the Circular and Prospectus will be published as soon as reasonably practicable and that the Scheme will become effective in the first half of 2015 subject to the satisfaction or waiver of the Conditions and certain further terms set out in Appendix 1 to this Announcement.

3 Background to and reasons for the Offer

Greene King has made significant progress and created strong shareholder value over the last four years through pursuing a focused strategy of strengthening its competitive position within what remains a highly fragmented eating and drinking out market in the UK. In particular, Greene King has expanded its Retail business from 888 to 1,032 sites and improved the overall estate quality through selective acquisitions, new-builds and transfers from Pub Partners. Alongside the focus on Retail, Greene King has improved the quality of its Pub Partners estate through management initiatives and selective exits and maintained industry-leading brand investment in its brewing activities, again strengthening its overall leadership position.

Looking ahead, Greene King has identified a number of consumer trends that are likely to shape behaviour over the next decade. As outlined in Greene King's 2014 annual report, the implications of the expected trends for the industry and the Greene King business are significant and include the need to: 

· develop sites and offers that cater for different generations at the same occasions;

· continue investing in digital platforms and colleague training programmes to meet the challenges of a more demanding consumer, providing instant feedback to other customers;

· maintain focus on delivering great value for customers, even as the economy improves; and

· make Greene King's sites more convenient for customers by increasing the occasions they use the pubs by expanding the daytime offer and becoming less reliant on 'traditional' pub eating and drinking occasions.

As a consequence of these current and future consumer trends, Greene King is focused on evolving its existing strategy to accelerate its Retail expansion and ultimately to explore the opportunity to move beyond conventional pub offers.

The Board of Greene King believes that the proposed acquisition of Spirit it is announcing today represents a compelling opportunity to accelerate the realisation of this strategy by creating the UK's leading managed pub operator with significantly enhanced quality and scale through a combined managed portfolio of approximately 1,830 pubs. The combined managed business will operate a well-balanced, high-quality pub portfolio with industry leading brands and extensive national coverage, including a significant presence in the attractive London and South East market. In addition, the tenanted business will materially benefit from the contribution of Spirit's high-quality leased pubs and Greene King's beer business will benefit from additional routes to market for its industry-leading ale brands.

Greene King has a strong track record of acquiring businesses and successfully delivering returns from careful integration into the Group and fully expects the proposed transaction to add to that record.

In particular, the Board of Greene King believes the transaction will deliver enhanced, long-term shareholder value by:

· creating a leading integrated pub operator in the UK with:

· pro forma revenues in excess of £2.1 billion and EBITDA of approximately £490 million;

· superior scale and geographical spread with 1,110 pubs in the attractive London and South East market;

· a portfolio of leading brands with stronger and broader customer appeal and:

· an opportunity to simplify the brand portfolio across the enlarged estate; and

· a broader platform across which to explore options to diversify the retail offer;

· delivering significant operational efficiencies and cost savings from the combination:

· recurring annual synergies of at least £305 million per annum expected to arise as a direct result of the transaction from reducing central overheads and consolidation of overlapping functions, procurement and distribution savings;

· additional potential revenue synergies from rationalisation and optimisation of the combined estate and from sharing best practice across the wider estate; and

· estimated one-off cash costs for integration of approximately £25 million are expected to be incurred to achieve these synergies;

· creating a stronger combined business with an enhanced financial profile and capital structure:

· accelerated growth prospects from revenue and cost efficiencies;

· increased balance sheet flexibility to support growth ambitions; and 

· commitment to Greene King's progressive dividend policy going forward.

The transaction is expected to be accretive to Greene King's earnings per share from the 2016 financial year and strongly accretive thereafter as the cost efficiencies are achieved and the other synergies are realised.5 The return on capital that results from the transaction is also expected to exceed Greene King's weighted average cost of capital in the 2017 financial year.

4 Background to and reasons for the recommendation

Since the demerger from Punch Taverns plc in 2011, Spirit has pursued a successful strategy of delivering growth through investment in brands, people, infrastructure and property. This strategy has enabled Spirit to deliver a strong financial performance over this period, in particular in 2014, reflecting robust organic growth, rigorous cost control and productivity improvements, further development of the brand portfolio, as well as the disciplined use of cash and pragmatic realisation of assets. Spirit is now in a position with a stronger balance sheet to capitalise on the progress made to date and continue to grow the business both organically and through acquisitions. 

Spirit has completed the refurbishment of approximately 90 per cent. of its managed estate generating average returns on investment in excess of 25 per cent. and an improvement in like-for-like sales of 10.8 per cent. over the last three years. This level of successful investment in the estate, combined with the strength of the brand portfolio and positive momentum in delivering organic growth, continues to offer opportunities to optimise assets and grow returns as well as providing a platform to drive new growth through acquisitions.

Over this period Spirit has also successfully turned around the performance of its leased estate through improving the quality of the estate through investment, innovation and performance management. The leased estate is now firmly in growth and well positioned to benefit from providing targeted support to licensees that enables them to grow their business as they benefit from Spirit's skills, experience and insight that the managed estate provides.

The Board of Spirit is fully confident in the ongoing execution of its strategy across its Managed and Leased estates as an independent company and that its successful delivery and strong balance sheet will deliver long-term growth and create significant value for shareholders. However, the Board of Spirit believes that the Offer will create a leading pub company with the strongest brand portfolio in the sector and attractive positions in a number of the growing segments of the pub and casual dining market. The Combined Group's scale and financial resources will also allow Spirit to accelerate the expected growth from both investment in its existing estate and the development of its pipeline of pub acquisition opportunities.

The Board of Spirit believes that the terms of the Offer recognise Spirit's growth potential and its longer term prospects. In reaching its conclusion, the Board of Spirit considered the terms of the Offer in relation to the value and prospects of the underlying business, the potential benefits which Greene King expects to achieve from combining its operations with those of Spirit and the potential medium term standalone value of Spirit Shares.

Following careful consideration of the above factors, the Spirit Directors intend unanimously to recommend that Spirit Shareholders vote in favour of the Offer, as they have each irrevocably undertaken to do in respect of their entire respective beneficial holdings of Spirit Shares. The decision to recommend the Offer was reached after taking into account the proposals it had received to date from other parties.

5 Recommendations

The Spirit Directors, who have been so advised by Goldman Sachs International, consider the terms of the Offer to be fair and reasonable. In providing advice to the Spirit Directors, Goldman Sachs International has taken into account the commercial assessments of the Spirit Directors.

Accordingly, the Spirit Directors intend unanimously to recommend that Spirit Shareholders vote in favour of the Scheme at the Court Meeting and in favour of the resolutions to be proposed at the Spirit General Meeting, as the Spirit Directors have irrevocably undertaken to do in respect of their own beneficial holdings of 2,017,166 Spirit Shares, in aggregate, representing approximately 0.31 per cent. of the issued ordinary share capital of Spirit in issue on 3 November 2014 (being the latest practicable date prior to this Announcement).

The Greene King Directors intend unanimously to recommend that Greene King Shareholders vote in favour of the special resolutions to be proposed at the Greene King General Meeting, as the Greene King Directors have irrevocably undertaken to do in respect of their own beneficial holdings of 1,971,483 Greene King Shares, in aggregate, representing approximately 0.90 per cent. of Greene King's ordinary share capital in issue on 3 November 2014 (being the latest practicable date prior to this Announcement).

6 Irrevocable undertakings

Greene King has received irrevocable undertakings from each of the Spirit Directors to vote in favour of the Scheme at the Court Meeting and in favour of the resolutions to be proposed at the Spirit General Meeting in respect of 2,017,166 Spirit Shares, representing, in aggregate, approximately 0.31 per cent. of the ordinary share capital of Spirit in issue on 3 November 2014 (being the latest practicable date prior to this Announcement). Further details of these irrevocable undertakings (including the circumstances in which they will fall away) are set out in Appendix III to this Announcement.

Spirit has received irrevocable undertakings to vote in favour of the resolutions to be proposed at the Greene King General Meeting from the Greene King Directors who hold or are beneficially entitled to Greene King Shares in respect of 1,971,483 Greene King Shares, representing, in aggregate, approximately 0.90 per cent. of the ordinary share capital of Greene King in issue on 3 November 2014 (being the latest practicable date prior to this Announcement). Further details of these irrevocable undertakings (including the circumstances in which they will fall away) are set out in Appendix III to this Announcement.

7 Dividend policy for the Combined Group

Following completion of the Offer, Greene King intends to maintain its existing attractive dividend policy for the Combined Group, targeting dividend cover of around two times underlying earnings.

8 Information on Greene King

Greene King's three main business sectors are "Retail", "Pub Partners" and "Brewing & Brands". Greene King runs over 1,900 managed, tenanted, leased and franchised pubs, restaurants and hotels and has a proud history of brewing award-winning ales for more than 200 years.

Greene King's "Retail" business comprises the pubs, restaurants and hotels that it manages in England, Scotland and Wales. There are currently over 1,000 sites in Greene King's Retail estate, which are split roughly equally between Greene King's Local Pubs division and Greene King's Destination Pubs and Restaurants division. Greene King's primary sales categories are food, drink and accommodation. Food, the fastest growing category in Retail, comprises over 40 per cent. of sales.

Greene King's pubs, restaurants and hotels are operated under brands and formats such as Hungry Horse, Old English Inns, Loch Fyne Seafood & Grill, Farmhouse Inns and Metropolitan, its premium London estate.

Greene King's "Pub Partners" business offers people the opportunity to run Greene King's pubs in England, Scotland and Wales on a tenanted, leased or franchised basis. There are currently just under 900 sites in Greene King's Pub Partners estate, of which around two-thirds are run under traditional, brewery-tied tenancy agreements.

Greene King's "Brewing & Brands" business sells and distributes a wide range of award-winning craft ales to both the on- and off‑trade. These are brewed in one of Greene King's two breweries, in Bury St Edmunds and Dunbar. The strategy is focused on Greene King's core brands: Old Speckled Hen, the UK's no.1 premium ale brand, Greene King IPA, Abbot Ale, the UK's no.1 premium cask ale brand, and Belhaven Best, the no. 1 ale brand in Scotland.

The total number of Greene King employees as at July 2014 was 23,541.

In the 2013/14 financial year (a 53 week year), Greene King's revenue was £1,301.6 million and its operating profit before exceptional items was £265.6 million. Profit before tax and exceptional items was £173.1 million, while adjusted earnings per share were 61.4 pence.

Overall, trading trends for the 24 weeks to 19 October 2014 are broadly similar to those reported at the AGM covering the first 18 weeks of the financial year.

Like-for-like sales in Retail were up 0.8 per cent., following slightly improved trading in September. Like-for-like sales over the last six weeks were up 2.2 per cent. Trading in London and the South East continued to outpace the rest of the UK across the Retail estate.

With real income still in decline, customers continue to remain cautious about spending on eating and drinking out and the Board of Greene King does not expect a material improvement in spending during the rest of this financial year. 

Momentum has been maintained in both Pub Partners and Brewing & Brands. Pub Partners total like-for-like net income was up 3.7 per cent. while in Brewing & Brands, own-brewed volume was up 5.9 per cent.

Further information about Greene King will be contained in the Scheme Document, the Circular and the Prospectus.

9 Information on Spirit

Spirit is one of the UK's leading pub companies, with 1,227 pubs across the UK with a particular focus on London and the South East. Spirit's business is divided into two main divisions: a managed pub business of 794 pubs and a leased pub business of 4336 pubs. 

Spirit's managed division operates 794 high quality pubs under five core brands - Chef & Brewer, Fayre & Square (also incorporating Wacky Warehouse), John Barras, Flaming Grill, and Taylor Walker. The estate benefits from a significant exposure to the economically stronger London and South East region, with 35 per cent. of its portfolio located in this region. The managed division's award winning brand portfolio covers a wide variety of occasions in the mass market and has evolved to reflect the increasing polarisation of consumer tastes towards both value and premium, a trend that is expected to continue.

Spirit has completed the refurbishment of approximately 90 per cent. of its Managed estate generating average returns on investment in excess of 25 per cent. and an improvement in like-for-like sales of 10.8 per cent. over the past three years.

Spirit's leased division includes 433 pubs and represents one of the highest quality estates in the sector, with like-for-like beer volumes in growth and consistently ahead of the market through the last financial year. Like-for-like rent is also growing and 96 per cent. of the estate was on substantive leases at the end of the 2014 financial year. Spirit has sought to improve its leased estate through the innovation of new agreement types and active management of the portfolio. Licensees can benefit from best in class levels of support through training, investment, product range and infrastructure. Since 4 August 2011 Spirit has successfully disposed or converted to managed over 120 pubs and has invested over £24 million in refurbishing 46 per cent. of the leased estate. 

Spirit is headquartered in Burton upon Trent, Staffordshire, UK and has 17,136 employees. For the 53 week financial period ended 23 August 2014, Spirit reported like for like sales growth (on a 52 week basis) of 4.4 per cent. in Managed and like for like sales and net income growth of 2.8 per cent. and 4.2 per cent. respectively in Leased. Over the 2014 financial year, Spirit generated revenue of £800.9 million, EBITDA of £159.4 million before exceptional items and operating profit of £121.2 million before exceptional items. As at 23 August 2014, Spirit had net assets of £726.2 million.

Further information on Spirit will be contained in the Scheme Document, the Circular and the Prospectus.

10 Management, employees and locations

Both Greene King and Spirit have large numbers of committed and talented employees who work hard to ensure that customers receive the best possible levels of service and quality. Both the Greene King Board and the Spirit Board recognise how important such employees are to the success of the Combined Group. 

However, in order to achieve some of the expected benefits of the combination of the Greene King Group and the Spirit Group, it will be necessary to perform a detailed review of how best to combine the two groups.

The synergy work carried out to date has confirmed the potential to generate cost savings for the Combined Group in areas such as overlapping corporate and support functions where there may be duplication, which the Greene King Board anticipates will involve headcount reductions of less than 1% of the workforce of the Combined Group. However, at this stage Greene King has not yet fully developed proposals as to how such headcount reductions will be implemented.

Going forward, the Greene King Board anticipates that the investment required to optimise brands and formats across the combined retail pub estate will lead to additional employment opportunities on a pub by pub basis.

Greene King has given assurances to the Board of Spirit that the existing contractual and statutory employment rights, including pension rights, of all retained management and employees of Spirit will be fully respected following completion of the Offer.

The Spirit non-executive Directors have confirmed that they intend to resign as directors of Spirit on the completion of the Offer. It is anticipated that the Spirit executive Directors will remain in the business for a short period following completion of the Offer to effect an orderly handover.

No proposals have yet been made on the terms of any incentivisation arrangements for relevant employees or managers.

11 Spirit Share Schemes

Participants in Spirit's Share Schemes will be contacted regarding the effect of the Offer on their rights under the Spirit Share Schemes. The Offer will extend to any Spirit Shares which are unconditionally allotted or issued as a result of the exercise of existing options and vesting of awards under the Spirit Share Schemes before the date on which the Scheme becomes fully effective (or the Offer closes), including any outstanding options or awards that Spirit's remuneration committee determine will vest or become exercisable as a result of Offer in accordance with the rules of the Spirit Share Schemes.

12 New Greene King Shares

The New Greene King Shares will, when issued, be ordinary shares in the capital of Greene King with a nominal value of 12.5 pence each, will be fully paid and rank pari passu in all respects with the Greene King shares in issue at the date of this document, save that they will not participate in any dividend payable by Greene King by reference to a record date prior to the Effective Date.

The aggregate number of New Greene King Shares to which a Spirit Shareholder will be entitled shall, in each case, be rounded down to the nearest whole number of New Greene King Shares.

Fractions of New Greene King Shares will not be allotted to any Spirit Shareholder, but all fractions of New Greene King Shares to which Spirit Shareholders would otherwise have been entitled will be aggregated, allotted, issued and sold in the market after the Effective Date and the net proceeds (after dealing costs) of such sale will be paid in cash to the Spirit Shareholders entitled thereto in accordance with what would otherwise have been their respective fractional entitlements.

13 Structure of the Offer

It is intended that the Offer will be effected by means of a court-sanctioned scheme of arrangement between Spirit and the Spirit Shareholders under Part 26 of the Companies Act 2006.

The purpose of the Scheme is to provide for Greene King to become the holder of the entire issued and to be issued ordinary share capital of Spirit. This is to be achieved by the cancellation of the ordinary shares of Spirit and the application of the reserve arising from such cancellation in paying up in full a number of new Spirit Shares (which is equal to the number of ordinary shares cancelled), and issuing the same to Greene King. In consideration for this, the Spirit Shareholders will receive the New Greene King Shares and the cash dividend on the basis set out in paragraph 2 of this Announcement.

To become effective, the Scheme must be approved by a majority in number of the Spirit Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Spirit Shares voted. The Scheme also requires the passing at the Spirit General Meeting of a special resolution necessary to implement the Scheme and approve the related Capital Reduction, and the approval of the Court.

The Offer is also subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Scheme Document, including, among other things:

· the Scheme becoming unconditional and effective and being sanctioned by the Court;

· the approval of Greene King Shareholders;

· the approval of Spirit Shareholders;

· the Competition and Markets Authority indicating, on terms satisfactory to Greene King and Spirit that it does not intend to make a CMA Phase 2 Reference; and

· Admission of the New Greene King Shares.

Once the necessary approvals from Spirit Shareholders have been obtained and the other Conditions have been satisfied or (where applicable) waived, the Scheme must be approved by the Court. The Scheme will then become effective upon delivery of the Court Order(s) to the Registrar of Companies. Subject to satisfaction (or waiver) of the Conditions, the Scheme is expected to become effective in the first half of 2015.

The Scheme will lapse if:

· the Court Meeting and the Spirit General Meeting are not held by the 22nd day after 13 January 2015 or the expected date of such meetings as set out in the Scheme Document (or such later date as may be agreed between Greene King and Spirit);

· the Court hearing to approve the Scheme is not held by the 22nd day after the expected date of such hearing as set out in the Scheme Document (or such later date as may be agreed between Greene King and Spirit and announced by Spirit); or

· the Scheme does not become effective by a long stop date of 31 May 2015,

provided however that the deadlines for the timing of the Court Meeting, the Spirit General Meeting and the Court hearing to approve the Scheme as set out above may be waived by Greene King, and the deadline for the Scheme to become effective may be extended by agreement between Spirit and Greene King. Greene King has agreed with Spirit that the Greene King General Meeting will be scheduled so as to be held on the same date as the Spirit General Meeting.

Upon the Scheme becoming effective, it will be binding on all Spirit Shareholders, irrespective of whether or not they attended or voted at the Court Meeting or the Spirit General Meeting.

Further details of the Scheme, including an indicative timetable for its implementation and notices of the Court Meeting and Spirit General Meeting, will be set out in the Scheme Document, which will also specify the action to be taken by Spirit Shareholders.

14 Scheme Document

It is expected that the Scheme Document and the Forms of Proxy accompanying the Scheme Document will be published by Spirit on or about the same date as the Circular and Prospectus are published by Greene King. The Scheme Document and Forms of Proxy will be made available to all Spirit Shareholders (other than Restricted Overseas Persons) at no charge to them.

Spirit Shareholders are urged to read the Scheme Document and the accompanying Forms of Proxy because they will contain important information.

15 Conditions to the Offer

The Offer will be subject to the Conditions and further terms set out below and in Appendix I to this Announcement and to be set out in the Scheme Document.

The Offer is conditional on, among other things:

· the approval of Spirit Shareholders at the Court Meeting and the Spirit General Meeting and the Scheme becoming unconditional and effective and being sanctioned by the Court;

· the approval of Greene King Shareholders at the Greene King General Meeting;

· the Competition and Markets Authority indicating, on terms reasonably satisfactory to Greene King and Spirit that it does not intend to make a CMA Phase 2 Reference; and

· Admission of the New Greene King Shares.

In view of the size of the transaction, the Offer constitutes a "Class 1" transaction (as defined in the Listing Rules) for Greene King, and Greene King is accordingly required to seek the approval of Greene King Shareholders for the Offer at the Greene King General Meeting.

Greene King Directors also do not currently have the authority to issue and allot the New Greene King Shares in accordance with section 551 of the Companies Act and, accordingly, the approval of Greene King Shareholders is required to grant the Greene King Directors this authority.

The Offer is therefore conditional on, among other things, the requisite resolutions being passed by Greene King Shareholders at the Greene King General Meeting.

The Circular and Prospectus containing information about the New Greene King Shares and the Combined Group as well as details of the Offer will be sent to Greene King Shareholders in due course and will be made available on Greene King's website at www.greeneking.co.uk as soon as possible thereafter. The Circular will include notice of the Greene King General Meeting.

16 Greene King Circular and Prospectus, listing of New Greene King Shares and de-listing of Spirit Shares

It is intended that the Circular and the Prospectus will be published by Greene King on or about the date on which the Circular and Scheme Document are published.

Application will be made to the FCA and to the London Stock Exchange respectively for the New Greene King Shares to be admitted to the Official List with a premium listing and to trading on the London Stock Exchange's main market for listed securities ("Admission").

It is expected that Admission will become effective and dealings for normal settlement in the New Greene King Shares will commence at or shortly after 8:00 a.m. on the Effective Date.

Prior to the Scheme becoming effective, Spirit will make an application for the cancellation of the listing of Spirit Shares on the Official List and for the cancellation of trading of the Spirit Shares on the London Stock Exchange's main market for listed securities in each case to take effect from or shortly after the Effective Date. The last day of dealings in Spirit Shares on the main market of the London Stock Exchange is expected to be the Business Day immediately prior to the Effective Date and no transfers will be registered after 6:00 p.m. on that date.

17 Opening Position Disclosures and interests

Greene King confirms that it has made an Opening Position Disclosure, setting out the details required to be disclosed by it under Rule 8.1(a) of the Code.

18 Offer-related arrangements

Confidentiality and Standstill Agreement

Greene King and Spirit entered into a confidentiality and standstill agreement on 22 October 2014 (the "Confidentiality and Standstill Agreement") pursuant to which each of Greene King and Spirit has undertaken to keep confidential information relating to the other party and not to disclose it to third parties (other than to permitted disclosees) unless required by law or regulation. These confidentiality obligations will remain in force for a period of three years from the date of the Confidentiality and Standstill Agreement.

The Confidentiality and Standstill Agreement also contains undertakings from both Spirit and Greene King that, for a period of 12 months, neither will solicit each other's senior employees.

Certain standstill provisions, preventing Greene King from acquiring shares in Spirit, apply to Greene King until the later of: (i) 22 October 2015; and (ii) the date on which all confidential information provided to Greene King ceases to become price sensitive information, subject to customary exceptions.

A copy of the Confidentiality and Standstill Agreement will be available on Greene King's website at www.greeneking.co.uk and on Spirit's website at www.spiritpubcompany.com from today until the Effective Date.

Co-operation Agreement

Pursuant to a co-operation agreement dated 4 November 2014 (the "Co-operation Agreement"), among other things:

· Spirit has agreed to co-operate with Greene King to assist it to obtain clearance from the Competition and Markets Authority;

· Greene King has agreed to provide Spirit with certain information and assistance in the preparation of the Scheme Document;

· Greene King has agreed to convene the Greene King General Meeting so that it is held on the same date as the Spirit General Meeting, and not to adjourn or postpone the Greene King General Meeting without the consent of Spirit;

· Greene King has agreed to certain customary restrictions on the conduct of its business during the period pending completion of the acquisition, and which prohibit, among other things: (a) the payment by Greene King of extraordinary dividends, (b) the allotment of further shares (or rights or options in respect of shares) (other than pursuant to its existing share incentive schemes or in order to settle options or awards vesting under its existing incentive schemes), (c) the entry into any transaction which would constitute a class 1 transaction; or (d) amend its constitutional documents in any manner than would have a material and adverse impact on the value of, or rights attaching to, the New Greene King Shares; and

· each of Spirit and Greene King has agreed to take any action necessary to implement certain proposals in relation to the Spirit Share Schemes.

A copy of the Co-operation Agreement will be available on Greene King's website at www.greeneking.co.uk and on Spirit's website at www.spiritpubcompany.com from today until the Effective Date.

19 General

The Offer will be made on the terms and subject to the Conditions and further terms set out in Appendix I to this Announcement. The sources of information and bases of calculations contained in this Announcement are set out in Appendix II to this Announcement. A summary of the irrevocable undertakings is contained in Appendix III to this Announcement. Appendix IV contains details of and bases of calculation of the anticipated financial benefits of the Offer. Certain terms used in this Announcement are defined in Appendix V to this Announcement.

If Spirit agrees or if (i) the Spirit Board withdraws or adversely modifies its recommendation that Spirit Shareholders vote in favour of the resolutions necessary to enable Spirit to implement the Scheme; (ii) a third party announces a firm intention to make an offer for Spirit which is recommended by the Spirit Board; or (iii) the Court hearing to approve the Scheme is not held by the 22nd day after the expected date of such hearing as set out in the Scheme Document (or such later date as may be agreed between Greene King and Spirit and announced by Spirit), then Greene King may (with the consent of the Panel) elect to implement the acquisition of the Spirit Shares by way of a takeover offer as an alternative to the Scheme. In such event, the acquisition will be implemented on the same terms and conditions as those set out in this Announcement (subject to any modification or amendment to such terms and conditions as may be agreed with the Panel or which is necessary as a result of the switch from the Scheme to a takeover offer).

20 Documents available on website

Copies of the following documents will be made available on Greene King's and Spirit's websites at www.greeneking.co.uk and www.spiritpubcompany.com respectively until the Effective Date:

· the irrevocable undertakings referred to in paragraph 6 above and summarised in Appendix III to this Announcement;

· the Confidentiality and Standstill Agreement; and

· the Co-operation Agreement.

Important Notices

Lazard & Co., Limited is authorised and regulated by the Financial Conduct Authority. Lazard & Co., Limited is acting exclusively as financial adviser to Greene King and no one else in connection with the Offer and shall not be responsible to anyone other than Greene King for providing the protections afforded to clients of Lazard & Co., Limited nor for providing advice in connection with the Offer or any matter referred to herein. Neither Lazard & Co., Limited nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of & Co., Limited in connection with this announcement, any statement contained herein or otherwise.

Citigroup Global Markets Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the UK. Citigroup Global Markets Limited is acting exclusively as financial adviser and corporate broker to Greene King and no one else in connection with the Offer and shall not be responsible to anyone other than Greene King for providing the protections afforded to clients of Citigroup Global Markets Limited nor for providing advice in connection with the Offer or any matter referred to herein.

Deutsche Bank AG is authorised under German Banking Law (competent authority: BaFIN - Federal Financial Supervisory Authority). Deutsche Bank AG, London Branch is further authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the UK. Deutsche Bank AG is acting exclusively as corporate broker to Greene King and no one else in connection with the Offer and shall not be responsible to anyone other than Greene King for providing the protections afforded to clients of Deutsche Bank AG, London Branch nor for providing advice in connection with the Offer or any matter referred to herein.

Goldman Sachs International, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the UK, is acting for Spirit and no one else in connection with the Offer and will not be responsible to anyone other than Spirit for providing the protections afforded to clients of Goldman Sachs International or for providing advice in connection with the Offer or any matter referred to herein.

Numis Securities Limited, which is authorised and regulated by the Financial Conduct Authority in the UK, is acting as broker for Spirit and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Spirit for providing the protections afforded to clients of Numis Securities Limited, or for providing advice in connection with the matters referred to in this announcement.

This Announcement is for information purposes only. It 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 Offer or otherwise nor will there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law.

The Offer will be made solely by means of the Scheme Document which, together with the Forms of Proxy, will contain the full terms and conditions of the Offer including details of how to vote in respect of the Offer.

This Announcement has been prepared for the purpose of complying with English law and the Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws and regulations of jurisdictions outside the UK.

The Offer will be subject to the applicable requirements of the Code, the Panel, the London Stock Exchange and the Financial Conduct Authority.

Spirit will prepare the Scheme Document to be distributed to Spirit Shareholders and Greene King will prepare the Circular and Prospectus to be distributed to Greene King Shareholders and made available to Spirit Shareholders containing information about the New Greene King Shares and the Combined Group. Spirit urges Spirit Shareholders to read the Scheme Document and the Prospectus when they become available because they will contain important information in relation to the Offer, the New Greene King Shares and the Combined Group. Greene King urges Greene King Shareholders to read the Circular and Prospectus when they become available because they will contain important information in relation to the Offer, the New Greene King Shares and the Combined Group. Any vote in respect of the Scheme or other response in relation to the Offer should be made only on the basis of the information contained in the Scheme Document and the Prospectus (in the case of Spirit Shareholders), or the Circular and Prospectus (in the case of Greene King Shareholders).

This Announcement does not constitute a prospectus or prospectus equivalent document.

Overseas Shareholders

The release, publication or distribution of this Announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the UK or who are subject to the laws of other jurisdictions should inform themselves of, and observe, any applicable requirements. Any failure to comply with the applicable requirements may constitute a violation of the laws of any such jurisdiction.

The Offer relates to shares of a UK company and is proposed to be effected by means of a scheme of arrangement under the laws of England and Wales. A transaction effected by means of a scheme of arrangement is not subject to proxy solicitation or tender offer rules under the US Exchange Act 1934. Accordingly, the Scheme is subject to the disclosure requirements, rules and practices applicable in the UK to schemes of arrangement, which differ from US disclosure requirements and the requirements of US proxy solicitation or tender offer rules. However, if Greene King were permitted and did elect to implement the Offer by means of a takeover offer, such takeover offer will be made in compliance with all applicable laws and regulations, including Section 14(e) of the US Exchange Act and Regulation 14E thereunder. Such a takeover would be made in the United States by Greene King and no one else. In addition to any such takeover offer, Greene King, certain affiliated companies and the nominees or brokers (acting as agents) may make certain purchases of, or arrangements to purchase, shares in Spirit outside such takeover offer, such as in open market or privately negotiated purchases, during the period in which such takeover offer would remain open for acceptance. If such purchases or arrangements to purchase were to be made they would be made outside the United States and would comply with applicable law, including the US Exchange Act. Any information about such purchases will be disclosed as required in the UK, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website: www.londonstockexchange.com.

Unless otherwise determined by Greene King or required by the Code, and permitted by applicable law and regulation, the Offer will not be made, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and the Offer will not be capable of acceptance from or within such jurisdiction where such acceptance would violate the laws of that jurisdiction. Accordingly, copies of this Announcement and all documents relating to the Offer are not being, and must not be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction or any jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this Announcement and all documents relating to the Offer (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions where to do so would violate the laws in that jurisdiction. The Offer will not be made into, or be capable of acceptance from or within, any US state or jurisdiction that would require the registration or qualification of the Offer.

The availability of the Offer to Spirit Shareholders who are not resident in the UK may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the UK should inform themselves of, and observe, any applicable requirements.

The New Greene King Shares may not be offered, sold or delivered, directly or indirectly, in, into or from any Restricted Jurisdiction or to, or for the account or benefit of, any Restricted Overseas Persons except, in each case, pursuant to an applicable exemption from, or in a transaction not subject to, applicable securities laws of those jurisdictions.

This Announcement is not an offer for sale of, or solicitation of an offer to buy, securities in the United States and the New Greene King Shares, which will be issued in connection with the Offer, have not been, and will not be, registered under the US Securities Act 1933 (as amended) (the "US Securities Act") or under the securities law of any state, district or other jurisdiction of the United States or any other Restricted Jurisdiction, and no regulatory clearance in respect of the New Greene King Shares has been, or will be, applied for in any jurisdiction other than the UK.

None of the securities referred to in this Announcement have been approved or disapproved by the SEC, any state securities commission in the United States or any other US regulatory authority, nor have such authorities passed upon or determined the adequacy or accuracy of the information contained in this Announcement. Any representation to the contrary is a criminal offence in the United States.

It is expected that the securities referred to in this Announcement will be issued as part of the Offer in reliance upon the exemption from the registration requirements of the US Securities Act provided by Section 3(a)(10) of that Act. Such securities may not be offered, sold, re-offered, resold or delivered, directly or indirectly, in or into the United States or any state, district or other jurisdiction of the United States, except pursuant to exemptions from the applicable registration requirements of such jurisdictions. Spirit Shareholders who will be affiliates of Greene King after the Effective Date will be subject to certain US transfer restrictions relating to the New Greene King Shares received pursuant to the Scheme.

Spirit is an English company that is a foreign private issuer (as defined under Rule 3b-4 under the US Securities Exchange Act of 1934). Financial information included in, or incorporated by reference into, this Announcement has been prepared in accordance with foreign accounting standards that may not be comparable to the accounting standards applicable to financial statements of United States companies.

Forward Looking Statements

This Announcement contains statements about Greene King and Spirit that are or may be forward looking statements. All statements other than statements of historical facts included in this Announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "estimates", "projects" or words or terms of similar substance or the negative thereof, are forward looking statements. Forward looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Greene King's or Spirit's operations and potential synergies resulting from the Offer; and (iii) the effects of government regulation on Greene King's or Spirit's business.

Such forward looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results, performance or achievements to differ materially from those projected or implied in any forward looking statements. The important factors that could cause Greene King's or Spirit's actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, economic and business cycles, the terms and conditions of Greene King's or Spirit's financing arrangements, foreign currency rate fluctuations, competition in Greene King's or Spirit's principal markets, acquisitions or disposals of businesses or assets and trends in Greene King's and/or Spirit's principal industries. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof. Each of Greene King and Spirit and each of their respective members, directors, officers, employees, advisers and any other persons acting on their behalf disclaims any obligation to update any forward looking or other statements contained herein, except as required by applicable law.

No profit forecasts or estimates

No statement in this Announcement is intended as a profit forecast or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share for Greene King or Spirit, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Greene King or Spirit, as appropriate.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3:30 p.m. (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3:30 p.m. (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3:30 p.m. (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at http://www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.

Electronic Communications

Please be aware that addresses, electronic addresses and certain information provided by Spirit Shareholders, persons with information rights and other relevant persons for the receipt of communications from Spirit may be provided to Greene King during the Offer Period as requested under Section 4 of Appendix 4 of the Code in order to comply with Rule 2.12(c) of the Code.

Publication on Website and Availability of Hard Copies

A copy of this Announcement will be made available (subject to certain restrictions relating to persons resident in Restricted Jurisdictions) on Greene King's and Spirit's websites at www.greeneking.co.uk and www.spiritpubcompany.com respectively by no later than 12:00 p.m. (London time) on 5 November 2014. For the avoidance of doubt, the contents of those websites are not incorporated into, and do not form part of, this Announcement.

You may request a hard copy of this Announcement by contacting Company Secretary, Greene King plc, Westgate Brewery, Bury St Edmunds, Suffolk IP33 1QT, tel: +44 (0) 1284 763 222 or Company Secretary, Spirit Pub Company plc, Sunrise House, Ninth Avenue, Burton upon Trent, Staffordshire, DE14 3JZ, tel: +44 (0) 1283 498 400. You may also request that all future documents, announcements and information to be sent to you in relation to the Offer should be in hard copy form.

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

APPENDIX ICONDITIONS AND FURTHER TERMS OF THE OFFER

Part A: Conditions of the Scheme and the Offer

1 The Offer is conditional upon the Scheme becoming unconditional and effective in all respects, subject to the Code, by not later than 31 May 2015 or such later date (if any) as Greene King and Spirit may agree (if required) and the Panel and the Court may allow.

2 The Scheme will be subject to the following conditions:

2.1

(i) its approval by a majority in number representing not less than 75 per cent in value of the Scheme Shareholders who are present and voting, whether in person or by proxy, at the Court Meeting; and

(ii) such Court Meeting being held on or before the 22nd day after 13 January 2015 or the expected date of the Court Meeting as set out in the Scheme Document (or such later date as may be agreed by Greene King and Spirit and the Court may allow);

2.2

(i) all resolution(s) required to approve and implement the Scheme and the Capital Reduction being duly passed by the requisite majority of Spirit Shareholders at the Spirit General Meeting; and

(ii) such Spirit General Meeting being held on or before the 22nd day after 13 January 2015 or the expected date of the Spirit General Meeting as set out in the Scheme Document (or such later date as may be agreed by Greene King and Spirit and the Court may allow);

2.3

(i) the sanction of the Scheme by the Court (with or without modification but subject to any modification being on terms acceptable to Spirit and Greene King) and confirmation of the Capital Reduction by the Court and:

(a) the delivery of a copy of the Court Order(s) and the attached statement of capital to the Registrar of Companies; and

(b) if so ordered by the Court, the registration of the Court Order effecting the Capital Reduction and the attached statement of capital by the Registrar of Companies; and

(ii) the Court hearing to sanction the Scheme being held on or before the 22nd day after the expected date of the Court sanction hearing as set out in the Scheme Document (or such later date as may be agreed by Greene King and Spirit and the Court may allow and announced by Spirit).

3 In addition, subject as stated in Part B below and to the requirements of the Panel, the Offer will be conditional upon the following Conditions and, accordingly, the Court Order(s) will not be delivered to the Registrar of Companies unless such Conditions (as amended if appropriate) have been satisfied or, where relevant, waived:

Greene King Shareholder approval

(a) the passing at the Greene King General Meeting of such resolution or resolutions as are necessary to approve, implement and effect the Offer including a resolution to approve the Offer and to authorise the creation and allotment of New Greene King Shares;

Admission of the New Greene King Shares

(b)

(i) the UKLA having acknowledged to Greene King or its agent (and such acknowledgement not having been withdrawn) that the application for the admission of the New Greene King Shares to the Official List with a premium listing has been approved and (after satisfaction of any conditions to which such approval is expressed to be subject ("listing conditions")) will become effective as soon as a dealing notice has been issued by the FCA and any listing conditions having been satisfied; and

(ii) the London Stock Exchange having acknowledged to Greene King or its agent (and such acknowledgement not having been withdrawn) that the New Greene King Shares will be admitted to trading on the London Stock Exchange's Main Market for listed securities;

Competition and Markets Authority clearance

(c) in so far as the Offer creates a relevant merger situation within the meaning of Section 23 of the Enterprise Act 2002, the Competition and Markets Authority indicating, on terms reasonably satisfactory to Greene King and Spirit, that it does not intend to make a CMA Phase 2 Reference of the Offer or of any matter arising from or relating to the Offer;

Notifications, waiting periods and Authorisations

(d) other than in relation to the matters referred to in Conditions 1, 2 and 3(a) to (c), all material notifications, filings or applications which are necessary under any applicable legislation or regulation of any relevant jurisdiction in connection with the Offer having been made and all necessary waiting periods (including any extensions thereof) under any applicable legislation or regulation of any jurisdiction having expired, lapsed or been terminated (as appropriate), and all statutory and regulatory obligations in any jurisdiction having been complied with in each case in respect of the Offer and all Authorisations necessary in any jurisdiction for or in respect of the Offer and, except pursuant to Chapter 3 of Part 28 of the Companies Act, the acquisition or the proposed acquisition of any shares or other securities in, or control or management of, Spirit or any other member of the Wider Spirit Group by any member of the Wider Greene King Group having been obtained in terms and in a form reasonably satisfactory to Greene King from all appropriate Third Parties or (without prejudice to the generality of the foregoing) from any person or bodies with whom any member of the Wider Spirit Group or the Wider Greene King Group has entered into contractual arrangements and all such Authorisations necessary to carry on the business of any member of the Wider Spirit Group in any relevant jurisdiction which is material in the context of the Wider Spirit Group taken as a whole having been obtained and all such Authorisations remaining in full force and effect at the time at which the Offer becomes otherwise effective and there being no notice or intimation of an intention to revoke, suspend, restrict, modify or not to renew such Authorisations;

General antitrust and regulatory

(e) other than in relation to the matters referred to in Conditions 1, 2 and 3(a) to (c), no antitrust regulator or Third Party having given notice of a decision to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference (and in each case, not having withdrawn the same), or having required any action to be taken or otherwise having done anything, or having enacted, made or proposed any statute, regulation, decision, order or change to published practice (and in each case, not having withdrawn the same) which would or might reasonably be expected to:

(i) require, prevent or materially delay the divestiture or alter the terms envisaged for such divestiture by any member of the Wider Greene King Group or by any member of the Wider Spirit Group of all or any part of its businesses, assets or property or impose any limitation on the ability of all or any of them to conduct their businesses (or any part thereof) or to own, control or manage any of their assets or properties (or any part thereof);

(ii) except pursuant to Chapter 3 of Part 28 of the Companies Act, require any member of the Wider Greene King Group or the Wider Spirit Group to acquire or offer to acquire a material number of shares, other securities (or the equivalent) or interest in any member of the Wider Spirit Group or any asset owned by any Third Party (other than in the implementation of the Offer);

(iii) impose any material limitation on, or result in a material delay in, the ability of any member of the Wider Greene King Group directly or indirectly to acquire, hold or to exercise effectively all or any rights of ownership in respect of shares or other securities in Spirit or on the ability of any member of the Wider Spirit Group or any member of the Wider Greene King Group directly or indirectly to hold or exercise effectively all or any rights of ownership in respect of shares or other securities (or the equivalent) in, or to exercise voting or management control over, any member of the Wider Spirit Group;

(iv) otherwise materially adversely affect any or all of the business, assets, profits or prospects of any member of the Wider Spirit Group or any member of the Wider Greene King Group;

(v) result in any member of the Wider Spirit Group or any member of the Wider Greene King Group ceasing to be able to carry on business under any name under which it presently carries on business;

(vi) make the Offer, its implementation or the acquisition or proposed acquisition of any shares or other securities in, or control or management of, Spirit by any member of the Wider Greene King Group void, unenforceable and/or illegal under the laws of any relevant jurisdiction, or otherwise prevent or prohibit, restrict, restrain, or delay or otherwise interfere with the implementation of, or impose additional conditions or obligations with respect to, or otherwise challenge, impede, interfere with the Offer or the acquisition or proposed acquisition of any shares or other securities in, or control or management of, Spirit by any member of the Wider Greene King Group;

(vii) require, prevent or materially delay a divestiture by any member of the Wider Greene King Group of any shares or other securities (or the equivalent) in any member of the Wider Spirit Group or any member of the Wider Greene King Group; or

(viii) impose any material limitation on the ability of any member of the Wider Greene King Group of any member of the Wider Spirit Group to conduct, integrate or co-ordinate all or any part of its business with all or any part of the business of any other member of the Wider Greene King Group and/or the Wider Spirit Group,

and all applicable waiting and other time periods (including any extensions thereof) during which any such antitrust regulator or Third Party could decide to take, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference or take any other step under the laws of any jurisdiction in respect of the Offer or the acquisition or proposed acquisition of any Spirit Shares or otherwise intervene having expired, lapsed or been terminated;

Certain matters arising as a result of any arrangement, agreement, etc.

(f) except as Disclosed, there being no provision of any arrangement, agreement, lease, licence, franchise, permit or other instrument to which any member of the Wider Spirit Group is a party or by or to which any such member or any of its assets is or may be bound, entitled or be subject or any event or circumstance which, as a consequence of the Offer or the acquisition or the proposed acquisition by any member of the Wider Greene King Group of any shares or other securities (or the equivalent) in Spirit or because of a change in the control or management of any member of the Wider Spirit Group or otherwise, could or might reasonably be expect to, to an extent which is material in the context of the Wider Target Group as a whole or material in the context of the Offer, result in:

(i) any monies borrowed by, or any other indebtedness, actual or contingent, of, or any grant available to, any member of the Wider Spirit Group being or becoming repayable, or capable of being declared repayable, immediately or prior to its or their stated maturity date or repayment date, or the ability of any such member to borrow monies or incur any indebtedness being withdrawn or inhibited or being capable of becoming or being withdrawn or inhibited;

(ii) the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of any member of the Wider Spirit Group or any such mortgage, charge or other security interest (whenever created, arising or having arisen) becoming enforceable;

(iii) any such arrangement, agreement, lease, licence, franchise, permit or other instrument being terminated or the rights, liabilities, obligations or interests of any member of the Wider Spirit Group being adversely modified or adversely affected or any obligation or liability arising or any adverse action being taken or arising thereunder;

(iv) any liability of any member of the Wider Spirit Group to make any severance, termination, bonus or other payment to any of its directors, or other officers;

(v) the rights, liabilities, obligations or interests of any member of the Wider Spirit Group in or the business of any such member under any such arrangement, agreement, licence, permit, lease or instrument with any other person or body or firm or company (or any arrangement or arrangement relating to any such interests or business) being terminated, or adversely modified or affected;

(vi) any member of the Wider Spirit Group ceasing to be able to carry on business under any name under which it presently carries on business;

(vii) the value of, or the financial or trading position or prospects of, any member of the Wider Spirit Group being prejudiced or adversely affected; or

(viii) the creation or acceleration of any liability (actual or contingent) by any member of the Wider Spirit Group other than trade creditors or other liabilities incurred in the ordinary course of business,

and no event having occurred which, under any provision of any arrangement, agreement, licence, permit, franchise, lease or other instrument to which any member of the Wider Spirit Group is a party or by or to which any such member or any of its assets are bound, entitled or subject, would or could result in any of the events or circumstances as are referred to in Conditions (f)(i) to (vii);

Spirit Shareholder resolution

(g) no resolution of Spirit Shareholders in relation to any acquisition or disposal of assets or shares (or the equivalent thereof) in any undertaking or undertakings (or in relation to any merger, demerger, reconstruction, amalgamation or scheme) being passed at a meeting of Spirit Shareholders;

Certain events occurring since 23 August 2014

(h) except as Disclosed, no member of the Wider Spirit Group having since 23 August 2014:

(i) issued or agreed to issue or authorised or proposed or announced its intention to authorise or propose the issue, of additional shares of any class, or securities or securities convertible into, or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares, securities or convertible securities or transferred or sold or agreed to transfer or sell or authorised or proposed the transfer or sale of Spirit Shares out of treasury (except, where relevant, as between Spirit and wholly owned subsidiaries of Spirit or between the wholly owned subsidiaries of Spirit and except for the issue or transfer out of treasury of Spirit Shares on the exercise of employee share options or vesting of employee share awards in the ordinary course under the Spirit Share Schemes);

(ii) recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus issue of shares, dividend or other distribution (whether payable in cash or otherwise) other than dividends (or other distributions whether payable in cash or otherwise) lawfully paid or made by any wholly owned subsidiary of Spirit to Spirit or any of its wholly owned subsidiaries;

(iii) other than pursuant to the Offer (and except for transactions between Spirit and its wholly owned subsidiaries or between the wholly owned subsidiaries of Spirit and transactions in the ordinary course of business) implemented, effected, authorised or proposed or announced its intention to implement, effect, authorise or propose any merger, demerger, reconstruction, amalgamation, scheme, commitment or acquisition or disposal of assets or shares or loan capital (or the equivalent thereof) in any undertaking or undertakings;

(iv) (except for transactions between Spirit and its wholly owned subsidiaries or between the wholly owned subsidiaries of Spirit) disposed of, or transferred, mortgaged or created any security interest over any material asset or any right, title or interest in any material asset or authorised, proposed or announced any intention to do so, in each case other than in the ordinary course of business and to an extent which is material in the context of the Wider Spirit Group taken as a whole;

(v) (except for transactions between Spirit and its wholly owned subsidiaries or between the wholly owned subsidiaries of Spirit) issued, authorised or proposed or announced an intention to authorise or propose, the issue of or made any change in or to the terms of any debentures or become subject to any contingent liability or incurred or increased any indebtedness;

(vi) entered into or varied or authorised, proposed or announced its intention, other than in the ordinary course of business, to enter into or vary any material contract, arrangement, agreement, transaction or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, unusual or onerous nature or magnitude or which is or which involves an obligation of a nature or magnitude which is reasonably likely to be restrictive on the business of any member of the Wider Spirit Group, in each case to an extent which is material in the context of the Wider Spirit Group taken as a whole;

(vii) entered into or varied the terms of, or made any offer (which remains open for acceptance) to enter into or vary the terms of any contract, service agreement, commitment or arrangement with any director or senior executive of any member of the Wider Spirit Group, other than in the ordinary course of business;

(viii) proposed, agreed to provide or modified the terms of any share option scheme, incentive scheme or other benefit relating to the employment or termination of employment of any employee of the Wider Spirit Group;

(ix) purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares or other securities or reduced or, except in respect of the matters mentioned in sub-paragraph (i) above, made any other change to any part of its share capital;

(x) waived, compromised or settled any claim, other than in the ordinary course of business, which is material in the context of the Wider Spirit Group as a whole;

(xi) terminated or varied the terms of any agreement or arrangement between any member of the Wider Spirit Group and any other person in a manner which would or could have a material adverse effect on the financial position of the Wider Spirit Group taken as a whole;

(xii) made any alteration to its memorandum or articles of association or other incorporation documents;

(xiii) made or agreed or consented to any change to:

(a) the terms of the trust deeds and rules constituting the pension scheme(s) established by any member of the Wider Spirit Group for its directors, employees or their dependants;

(b) the contributions payable to any such scheme(s) or to the benefits which accrue, or to the pensions which are payable, thereunder;

(c) the basis on which qualification for, or accrual or entitlement to, such benefits or pensions are calculated or determined; or

(d) the basis upon which the liabilities (including pensions) of such pension schemes are funded, valued, made, agreed or consented to;

(xiv) been unable, or admitted in writing that it is unable, to pay its debts or commenced negotiations with one or more of its creditors with a view to rescheduling or restructuring any of its indebtedness, or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business;

(xv) (other than in respect of a member of the Wider Spirit Group which is dormant and was solvent at the relevant time) taken or proposed any steps, corporate action or had any legal proceedings instituted or threatened against it in relation to the suspension of payments, a moratorium of any indebtedness, its winding-up (voluntary or otherwise), dissolution, reorganisation or for the appointment of a receiver, administrator, manager, administrative receiver, trustee or similar officer of all or any material part of its assets or revenues or any analogous or equivalent steps or proceedings in any jurisdiction or appointed any analogous person in any jurisdiction or had any such person appointed;

(xvi) (other than for transactions between Spirit and its wholly-owned subsidiaries) made, authorised, proposed or announced an intention to propose any change in its loan capital;

(xvii) entered into, implemented or authorised the entry into, any joint venture, asset or profit sharing arrangement, partnership or merger of business or corporate entities, in each case other than in the ordinary course of business; or

(xviii) entered into any agreement, arrangement, commitment or contract or passed any resolution or made any offer (which remains open for acceptance) with respect to or announced an intention to, or to propose to, effect any of the transactions, matters or events referred to in this Condition (h);

No adverse change, litigation, regulatory enquiry or similar

(i) except as Disclosed, since 23 August 2014 there having been:

(i) no adverse change in the business, assets, financial or trading position or profits or prospects or operational performance of any member of the Wider Spirit Group to an extent which is material in the context of the Wider Spirit Group taken as a whole;

(ii) no litigation, arbitration proceedings, prosecution or other legal proceedings having been threatened, announced or instituted by or against or remaining outstanding against or in respect of, any member of the Wider Spirit Group or to which any member of the Wider Spirit Group is or may become a party (whether as claimant, defendant or otherwise) having been threatened, announced, instituted or remaining outstanding by, against or in respect of, any member of the Wider Spirit Group, in each case to an extent which is material in the context of the Wider Spirit Group taken as a whole;

(iii) no enquiry, review or investigation by, or complaint or reference to, any Third Party against or in respect of any member of the Wider Spirit Group having been threatened, announced or instituted or remaining outstanding by, against or in respect of any member of the Wider Spirit Group, in each case to an extent which is material in the context of the Wider Spirit Group taken as a whole;

(iv) no contingent or other liability having arisen or become apparent to Greene King or increased other than in the ordinary course of business which is reasonably likely to affect adversely the business, assets, financial or trading position or profits or prospects of any member of the Wider Spirit Group, in each case to an extent which is material in the context of the Wider Spirit Group taken as a whole; and

(v) no steps having been taken and no omissions having been made which are reasonably likely to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the Wider Spirit Group which is necessary for the proper carrying on of its business and the withdrawal, cancellation, termination or modification of which might reasonably be expected to have a material adverse effect on the Wider Spirit Group taken as a whole;

Anti-corruption

(j) Greene King not having discovered any member of the Wider Spirit Group or any person that performs or has performed services for or on behalf of any such company is or has engaged in any activity, practice or conduct which would constitute an offence under the Bribery Act 2010 or any other applicable anti-corruption legislation; or

No criminal property

(k) Greene King not having discovered that any asset of any member of the Wider Spirit Group constitutes criminal property as defined by section 340(3) of the Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that definition).

Part B: Certain further terms of the Offer

1 Subject to the requirements of the Panel, Greene King reserves the right to waive:

(i) any of the Conditions set out in the above Condition 2 for the timing of the Court Meeting, Spirit General Meeting, and the Court hearing to sanction the Scheme. If any such deadline is not met, Greene King will make an announcement by 8:00 a.m. on the Business Day following such deadline confirming whether it has invoked or waived the relevant Condition or agreed with Spirit to extend the deadline in relation to the relevant Condition; and

(ii) in whole or in part, but subject to the provisions of the Code, all or any of the above Conditions 3(c) to (k) (inclusive).

2 If Greene King is required by the Panel to make an offer for Spirit Shares under the provisions of Rule 9 of the Code, Greene King may make such alterations to any of the above Conditions and terms of the Offer as are necessary to comply with the provisions of that Rule.

3 The Offer will lapse if:

(i) in so far as the Offer or any matter arising from or relating to the Scheme or Offer constitutes a concentration with a Community dimension within the scope of the Regulation, the European Commission either initiates proceedings under Article 6(1)(c) of the Regulation or makes a referral to a competent authority in the UK under Article 9(1) of the Regulation and there is then a CMA Phase 2 Reference; or

(ii) in so far as the Offer or any matter arising from the Scheme or Offer does not constitute a concentration with a Community dimension within the scope of the Regulation, the Scheme or Offer or any matter arising from or relating to the Offer becomes subject to a CMA Phase 2 Reference,

in each case, before the date of the Court Meeting.

4 In the event that the Offer is implemented by way of a takeover offer, the Spirit Shares acquired under the Offer shall be acquired fully paid and free from all liens, equities, charges, encumbrances, options, rights of pre-emption and any other third party rights and interests of any nature and together with all rights attaching or accruing to them, including voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid on or after the date of this announcement (save for the final dividend of 1.5 pence per share in respect of the 53 weeks to 23 August 2014 which the Spirit Directors have recommended be paid on 10 February 2015 and the special interim dividend of 6.5 pence per share that is proposed to be paid to Spirit Shareholders on the register on the Effective Date).

5 Greene King will be under no obligation to waive (if capable of waiver), to determine to be or remain satisfied or to treat as fulfilled any of Conditions 3(c) to (k) (inclusive) by a date earlier than the latest date for the fulfilment of that Condition notwithstanding that the other Conditions of the Offer may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such Conditions may not be capable of fulfilment.

6 If, after the date of this announcement but prior to the Effective Date, any dividend or other distribution is declared, paid or made or payable by Spirit, save for the final dividend of 1.5 pence per share in respect of the 53 weeks ended 23 August 2014 which the Spirit Directors have recommended be paid on 10 February 2015 and the special interim dividend of 6.5 pence per share that is proposed to be paid to Spirit Shareholders on the register on the Effective Date (a "relevant distribution"), Greene King reserves the right (without prejudice to any right of Greene King, with the consent of the Panel, to invoke Condition 3(h)(ii) above) to reduce the consideration payable under the Offer in respect of a Spirit Share (the "Offer Price") by the aggregate amount of such dividend or distribution. If such reduction occurs, any reference in this Announcement to the Offer Price will be deemed to be a reference to the Offer Price as so reduced and, notwithstanding the terms on which the Spirit Shares are expressed to be acquired by Greene King pursuant to the Offer in Appendix I, the Spirit Shares will be acquired by or on behalf of Greene King pursuant to the Offer together with all rights now and hereafter attaching to such shares including the right to receive in full all dividends and other distributions (if any) declared, paid or made on or after the date of this announcement, other than save for the final dividend of 1.5 pence per share in respect of the 53 weeks ended 23 August 2014 which the Spirit Directors have recommended be paid on 10 February 2015 and the special interim dividend of 6.5 pence per share that is proposed to be paid to Spirit Shareholders on the register on the Effective Date. To the extent that such a dividend or distribution has been declared, paid, made or is payable is or will be: (i) transferred pursuant to the Offer on a basis which entitles Greene King to receive the dividend or distribution and to retain it; or (ii) cancelled, the Offer Price will not be subject to change in accordance with this paragraph. Any exercise by Greene King of its rights referred to in this paragraph will be the subject of an announcement and, for the avoidance of doubt, will not be regarded as constituting any revision or variation of the Offer.

7 Greene King reserves the right to elect (subject to the consent of the Panel and to the provisions of the Co-operation Agreement) to implement the acquisition of the Spirit Shares not already directly or indirectly owned by it by way of a takeover offer as an alternative to the Scheme. In such event, the acquisition will be implemented on substantially the same terms as those which would apply to the Scheme, subject (with the consent of the Panel) to appropriate amendments, including:

7.1 an acceptance condition set at 90 per cent. of the shares to which such offer relates or such lesser percentage, being more than 50 per cent., as Greene King may decide); and

7.2 that condition 3(a) shall be amended such that the indication of the Competition and Markets Authority that it does not intend to make a CMA Phase 2 Reference of the Offer shall be on terms reasonably satisfactory to Greene King only.

8 The availability of the Offer to persons not resident in the UK may be affected by the laws of the relevant jurisdictions. Persons who are not resident in the UK should inform themselves about and observe any applicable requirements. The New Greene King Shares to be issued pursuant to the Offer have not been and will not be registered under the US Securities Act nor under any of the relevant securities laws of any other Restricted Jurisdiction. Accordingly, the New Greene King Shares may not be offered, sold or delivered, directly or indirectly, in any Restricted Jurisdiction, except pursuant to exemptions from applicable requirements of any such jurisdiction.

9 The Offer is not being made, directly or indirectly, in, into or from, or by use of the mails of, or by any means of instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of, any jurisdiction where to do so would violate the laws of that jurisdiction.

10 The Offer is governed by the law of England and Wales and is subject to the jurisdiction of the English courts and to the Conditions and further terms set out in this Appendix I and to be set out in the Scheme Document. The Scheme will be subject to the applicable requirements of the Code, the Panel, the London Stock Exchange, the FCA and the UKLA.

11 The New Greene King Shares will be issued credited as fully paid and will rank pari passu in all respects with the existing Greene King Shares, save that they will not participate in any dividend payable by Greene King with reference to a record date prior to the Effective Date.

12 Each of the Conditions will be regarded as a separate Condition and will not be limited by reference to any other Condition.

13 Under Rule 13.5 of the Code, Greene King may not invoke a condition to the Offer so as to cause the Offer not to proceed, to lapse or to be withdrawn unless the circumstances which give rise to the right to invoke the condition are of material significance to Greene King in the context of the Offer. Conditions 1, 2, 3(a), 3(b) and 3(c) and are not subject to this provision of the Code.

APPENDIX IISOURCES OF INFORMATION AND BASES OF CALCULATION

(i) The aggregate Offer value of approximately £773.6 million is based on:

(a) a value of 808.5 pence per Greene King Share, being the closing price on the London Stock Exchange on 3 November 2014 (being the last dealing day prior to the date of this Announcement); and

(b) the fully-diluted number of Spirit Shares referred to in paragraph (iv) below.

(ii) Unless otherwise stated all prices and closing prices for Spirit and Greene King Shares are closing middle market quotations derived from the London Stock Exchange Daily Official List.

(iii) Volume weighted average closing prices are derived from Bloomberg data.

(iv) 673,362,012 fully-diluted Spirit Shares on the basis of 660,560,744 Spirit Shares in issue on 3 November 2014 (being the last dealing day prior to the date of this Announcement); and on the basis of 12,801,268 Spirit Shares in respect of options and shares awarded which will become exercisable over new Spirit Shares as a result of the Offer.

(v) 219,014,026 Greene King Shares in issue on 3 November 2014 (being the last dealing day prior to the date of this Announcement).

(vi) Unless otherwise stated, the financial information relating to Spirit is extracted or derived (without any adjustment) from the audited consolidated financial statements of Spirit for the financial year to 23 August 2014, prepared in accordance with IFRS.

(vii) The financial information relating to Greene King is extracted or derived (without any adjustment) from the audited consolidated financial statements of the Greene King for the 53 weeks ended 4 May 2014, prepared in accordance with IFRS.

(viii) The synergy numbers are unaudited and are based on analysis by Greene King's management and on Greene King's and Spirit's internal records.

(ix) The implied enterprise value of Spirit is based on the value of Spirit's fully diluted share capital (as calculated in note (iv) above) assuming 115 pence per Spirit Share plus net debt of £823.8 million as at 23 August 2014 divided by EBITDA of £155.9 million for the 52 weeks ended 16 August 2014.

APPENDIX IIIIRREVOCABLE UNDERTAKINGS

Spirit Directors' Irrevocable Undertakings

These irrevocable undertakings cease to be binding:

§ if the Scheme Document has not been posted within 28 days from the date of this Announcement (or within such longer period as Greene King, with the consent of the Panel, determines); or

§ on the earlier of: (i) the long stop date of 31 May 2015; or the date on which the Scheme is withdrawn or lapses in accordance with its terms.

Greene King Directors' Irrevocable Undertakings

These irrevocable undertakings cease to be binding if:

§ the Scheme Document has not been posted within 28 days from the date of this Announcement (or such later date as the Panel may agree); or

§ the Scheme is withdrawn or lapses in accordance with its terms; or

§ Spirit announces that it will recommend a competing offer for Spirit; or

§ Spirit announces, with the consent of the Panel, that it does not intend to proceed with the Offer, the Scheme is withdrawn or any competing offer for Spirit is made which is declared wholly unconditional or otherwise becomes effective.

APPENDIX IVSTATEMENT ON QUANTIFIED FINANCIAL BENEFITS

Greene King has made the following quantified financial benefits statement in paragraph 2 of the Announcement (the "Quantified Financial Benefits Statement"):

"The Board of Greene King believes that the Combined Group can be expected to achieve cost synergies of at least £30 million per annum. The one-off costs of delivering these savings are expected to total approximately £25 million.7 Approximately 40 per cent. of synergies are expected to be realised in 2015/16, rising to 80 per cent. in 2016/17, and 98 per cent. in 2017/18. The expected synergies will accrue as a direct result of the success of the Offer and would not be achieved on a standalone basis."

Reports

The Greene King Board believes that the Combined Group should be able to achieve the synergies set out in the Quantified Financial Benefits Statement.

Ernst & Young LLP, as reporting accountants to Greene King has provided a report under Rule 28.1(a) of the Code stating that, in their opinion, the Quantified Financial Benefits Statement has been properly compiled on the basis stated.

Lazard & Co., Limited and Citigroup Global Markets Limited, as financial advisers to Greene King, have provided a report for the purposes of the Code stating that, in their opinion and subject to the terms of the report, the Quantified Financial Benefits Statement, for which the Greene King Directors are responsible, has been prepared with due care and consideration.

Copies of these reports are appended to this Appendix IV.

Each of Ernst & Young LLP, Lazard & Co., Limited and Citigroup Global Markets Limited has given and not withdrawn its consent to the publication of its report in the form and context in which it is included.

Bases of calculation of the Quantified Financial Benefits Statement

Baseline cost numbers were agreed based on the underlying business plan of Greene King and, for the synergies arising from the combination of group functions, organisation information was reviewed.

Cost saving assumptions were based on a detailed, bottom-up evaluation of the benefits available from elimination of overlapping corporate and support functions. Procurement spend cost savings were identified by producing estimates of Spirit's spend by category and of the likely additional savings to be achieved through scale benefits, access to improved pricing across all categories, distribution consolidation and additional sales of Greene King cask ales in Spirit pubs. In determining the estimate of costs savings achievable through the combination of Greene King and Spirit, no savings relating to operations have been included where no overlap exists.

Where appropriate, assumptions were used to estimate the costs of implementing the new structures, systems and processes required to realise the synergies.

Important Notes

1. The statements of estimated cost savings and synergies relate to future actions and circumstances which, by their nature, involve risks, uncertainties and contingencies. As a result, the cost savings and synergies referred to may not be achieved, or those achieved could be materially different from those estimated. No statement in the Quantified Financial Benefits Statement, or this announcement generally, should be construed as a profit forecast or interpreted to mean that Greene King's earnings in the full first full year following the Offer, or in any subsequent period, would necessarily match or be greater than or be less than those of Greene King and/or Spirit for the relevant preceding financial period or any other period.

2. Due to the scale of the Combined Group, there may be additional changes to the Combined Group's operations. As a result, and given the fact that the changes relate to the future, the resulting cost savings may be materially greater or less than those estimated.

3. The expected synergies will accrue as a direct result of the success of the Offer and would not be achieved on a standalone basis.

4. In arriving at the Quantified Financial Benefits Statement, the Board of Greene King has assumed that:

(a) there will be no significant impact on the underlying operations of either business; and

(b) there will be no material change to macroeconomic, political or legal conditions in the UK which will materially impact on the implementation of or costs to achieve the proposed cost savings.

Report from EY

Dear Sirs

Recommended offer for Spirit Pub Company plc by Greene King plc

We refer to the statement on quantified financial benefits ("the Statement") made by Greene King plc ("the Company"). The Statement, including the relevant bases of belief (including sources of information) is set out on page 12 of the Rule 2.7 announcement (the "Announcement") issued by the Company dated 4 November 2014. This report is required by Rule 28.1(a)(i) of The City Code on Takeovers and Mergers (the "City Code") and is given for the purpose of complying with that rule and for no other purpose.

Save for any responsibility that we may have to those persons to whom this report is expressly addressed, and for any responsibility arising under Rule 28.1(a)(i) of the City Code to any person as and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with, this report or our statement, required by and given solely for the purposes of complying with Rule 23.3(b) of the City Code consenting to its inclusion in the Announcement

Responsibility

It is the responsibility of the directors of the Company ("the Directors") to prepare the Statement in accordance with the requirements of the City Code.

It is our responsibility to form an opinion as required by the Code as to the proper compilation of the Statement and to report that opinion to you.

It is the responsibility of Lazard & Co., Limited and Citigroup Global Markets Limited to form an opinion as required by the City Code as to whether the Statement has been prepared with due care and consideration.

Basis of opinion

We conducted our work in accordance with Standards for Investment Reporting 1000 (Investment Reporting Standards applicable to all engagements in connection with an investment circular) issued by the Auditing Practices Board in the United Kingdom. We have discussed the Statement together with the relevant bases of belief (including sources of information and assumptions) with the Directors and with Lazard & Co., Limited and Citigroup Global Markets Limited. Our work did not involve any independent examination of any of the financial or other information underlying the Statement.

Since the Statement and the assumptions on which it is based relate to the future and may therefore be affected by unforeseen events, we can express no opinion as to whether the actual results reported will correspond to those shown in the Statement and differences may be material.

Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in other jurisdictions and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices.

Opinion

In our opinion, the Statement has been properly compiled on the basis stated.

Yours faithfully

Ernst & Young LLPReport from Citi and Lazard

4 November 2014

The Directors

Greene King plc

Westgate Brewery

Bury St. Edmunds

Suffolk

IP33 1QT

Dear Sirs

Recommended offer for Spirit Pub Company plc by Greene King plc ("Greene King")

We refer to the Quantified Financial Benefits Statement, the bases of belief thereof and the notes thereto (together, the "Statement") as set out on page 12 of this Announcement, for which the Directors of Greene King are solely responsible under Rule 28 of the City Code on Takeovers and Mergers (the "Code").

We have discussed the Statement (including the assumptions and sources of information referred to therein), with the Directors of Greene King and those officers and employees of Greene King who developed the underlying plans. The Statement is subject to uncertainty as described in this announcement and our work did not involve an independent examination of any of the financial or other information underlying the Statement.

We have relied upon the accuracy and completeness of all the financial and other information provided to us by Greene King, or otherwise discussed with us, and we have assumed such accuracy and completeness for the purposes of providing this letter.

We do not express any opinion as to the achievability of the quantified financial benefits identified by the Directors of Greene King.

We have also reviewed the work carried out by Ernst & Young LLP and have discussed with them the opinion set out in Appendix IV of this Announcement addressed to yourselves and ourselves on this matter.

This letter is provided to you solely in connection with Rule 28.1(a) (ii) of the Code and for no other purpose. We accept no responsibility to Greene King or its shareholders or any other person other than the Directors of Greene King in respect of the contents of this letter; no person other than the Directors of Greene King can rely on the contents of this letter and, to the fullest extent permitted by law, we exclude all liability to any other person, in respect of this letter or the work undertaken in connection with this letter.

On the basis of the foregoing, we consider that the Statement, for which you as Directors of Greene King are solely responsible, has been prepared with due care and consideration.

Yours faithfully,

CITIGROUP GLOBAL MARKETS LIMITED LAZARD & CO., LIMITED

APPENDIX VDEFINITIONS

The following definitions apply throughout this Announcement unless the context requires otherwise:

For the purposes of this Announcement, "subsidiary", "subsidiary undertaking", "undertaking" and "associated undertaking" have the respective meanings given thereto by the Companies Act.

All references to "pounds", "pounds Sterling", "Sterling", "£", "pence", "penny" and "p" are to the lawful currency of the UK.

All the times referred to in this Announcement are London times unless otherwise stated.

References to the singular include the plural and vice versa.