BAE.L Regulatory News (BAE)

PART I NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO ORFROM ANY RESTRICTED JURISDICTION OR OTHER JURISDICTION WHERE TO DO SO WOULDCONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION EMBARGOED FOR RELEASE AT 9.30 AM 19 January 2015 RECOMMENDED CASH OFFER FOR BEALE PLC ("Beales" or the "Company") BY ENGLISH ROSE ENTERPRISES LIMITED ("English Rose") Summary The boards of Beales and English Rose, a company controlled by Andrew Perloff,announce that they have reached agreement on the terms of a recommended cashoffer by English Rose for the entire issued and to be issued ordinary sharecapital of Beales (the "Offer"). Under the terms of the Offer, Beales Shareholders who accept the Offer will beentitled to receive 6p in cash for each Beales Share. The Offer values the entire issued ordinary share capital of Beales atapproximately £1.23 million. The Offer Price represents a discount ofapproximately 48 per cent. to the Closing Price of 11.5p per Beales Share on 16January 2015, being the last business day prior to the date of thisannouncement. The Board of Beales believes that the Offer Price is disappointing and that indifferent circumstances it could have achieved a price that would value thebusiness and assets of Beales more fully. However, the complex capitalstructure inherited by the current Beales Board imposes a number ofrestrictions on Beales' ability to fund its activities, including therequirement for the Concert Party to agree to any of the alternative fundingoptions the Beales Board has identified. As a result, Beales may be unable togenerate sufficient cash flows to meet its financial commitments in thefuture. Accordingly, the Beales Board believes that Beales Shareholders shouldcarefully consider the future risks facing the Beales Group and may wish toaccept the Offer, depending on their own individual circumstances and appetitefor risk. The Beales Board has sought to summarise the risks associated withdeclining the Offer and retaining Beales Shares in paragraph 3 of Part II ofthis announcement. In addition, if the Offer becomes or is declared wholly unconditional, Portnardhas committed to support the Beales business with additional capital which isexpected to improve the future security of the business, its employees and theBeales pension schemes Therefore the Board of Beales, which has been so advised by Smith SquarePartners, considers the terms of the Offer to be fair and reasonable takingaccount of the circumstances (which are set out in more detail in Part II ofthis announcement), and intends to unanimously recommend that BealesShareholders accept the Offer, as the Beales Directors have irrevocablyundertaken to do in respect of their entire legal and beneficial holdings,which, in aggregate, amount to 20,000 Beales Shares, representing approximately0.10 per cent. of the issued ordinary share capital of Beales. In providingadvice to the Board of Beales, Smith Square Partners has taken into account thecommercial assessments of the Beales Directors. English Rose, which is incorporated in England and Wales, is a companywholly-owned by Portnard, which is owned by Andrew Perloff and family trusts ofAndrew and Harold Perloff, Andrew Perloff's brother. English Rose does nothold any Beales Shares at the date of this announcement. Panther, which iscontrolled by Andrew Perloff and members of his family, holds approximately19.85 per cent. of Beales' issued ordinary share capital. Andrew Perloff isalso the sole beneficiary of the Maland Pension Fund, which holds approximately8.71 per cent. of Beales' issued ordinary share capital. Andrew Perloff andhis wife hold approximately 1.16 per cent. of Beales' issued ordinary sharecapital. The Concert Party is therefore interested in 6,100,000 Beales Shares,representing approximately 29.72 per cent. of the issued ordinary share capitalof Beales. In addition to the irrevocable undertakings to accept the Offer received fromthe Beales Directors, English Rose has also received irrevocable undertakingsto accept the Offer from all the members of the Concert Party, in respect of,in aggregate, 6,100,000 Beales Shares. Accordingly, English Rose has receivedirrevocable undertakings to accept the Offer in respect of, in aggregate,6,120,000 Beales Shares, representing approximately 29.82 per cent. of theissued ordinary share capital of Beales. The Offer is conditional, inter alia, upon valid acceptances being received(and not, where permitted, withdrawn) by not later than 1.00 pm on the datewhich is 21 days after the date on which the Offer Document is circulated toBeales Shareholders (or such later times and/or dates as English Rose may,subject to the rules of the Code or with the consent of the Panel, decide) inrespect of not less than 75 per cent. (or such lower percentage as English Rosemay decide in its absolute discretion) in nominal value of the Beales Shares,as further detailed in paragraph 1 of Appendix I. The Offer will also besubject, inter alia, to the satisfaction or waiver (if permitted) of theConditions and certain further terms set out in Appendix I to this announcementand to be set out in the Offer Document and, in respect of Beales Shares heldin certificated form, the Form of Acceptance. Commenting on the Offer, William Tuffy, Chairman of Beales, said: "English Rose's proposal offers the certainty of a cash exit for shareholderstoday and improves the medium term financial security of the Beales business.Despite the significant progress made by the current management team in firststabilising and then greatly improving operating performance, the businesscontinues to face significant challenges and financial constraints. The Boardof Beales has explored all other realistic alternatives to raise additionalcapital to address these challenges and constraints but none could be deliveredwithout the Concert Party's agreement and consequently, we believe that thisproposal represents a better alternative for all stakeholders than the businesscontinuing with its current capital structure, given the level of risk thiswould entail." Terms used in this summary but not defined herein shall have the meaning givento them in the full text of the announcement. This summary should be read in conjunction with, and is subject to, the fulltext of the following announcement (including the Appendices). The Offer willbe subject to the conditions and the further terms set out in Appendix I of thefollowing announcement, the full conditions and further terms which will be setout in the Offer Document being issued shortly and, in respect of Beales Sharesheld in certificated form, the Form of Acceptance. Any response in respect ofthe Offer or other response in relation to the Offer should be made only on thebasis of the information contained in the forthcoming Offer Document, documentsincorporated into it by reference and, in respect of Beales Shares held incertificated form, the accompanying Form of Acceptance. Appendix II contains the sources and bases of certain information used in thissummary and in the following announcement. Appendix III contains definitionsof certain terms used in this summary and the following announcement. A copy of this announcement will be available, subject to certain restrictionsin relation to persons resident in Restricted Jurisdictions, on English Rose'sparent company's website at www.portnard.co.uk and on Beales' website atwww.beales.co.uk until the end of the Offer Period. In accordance with Rule 2.10 of the Code, Beales confirms that as at the dateof this announcement, it has in issue 20,524,797 ordinary shares of 5p each. The International Securities Identification Number (ISIN) of the ordinaryshares is GB0002559291. Enquiries English Rose Enterprises LimitedAndrew Perloff/Simon Peters Tel. no.: 01707 667 300 Sanlam Securities UK Limited (Financialadviser to English Rose)David Worlidge/Simon Clements Tel. no.: 020 7628 2200 Beale PLCMichael Hitchcock Tel. no.: 01202 203 462 Smith Square Partners LLP (Financial adviser to Beales)John Craven/Jade Jack Tel. no.: 020 3696 7260 Buchanan Communications Ltd (PR adviser to Beales)Charles Ryland/Sophie McNulty Tel. no.: 020 7466 5000 This announcement does not constitute or form part of any offer or invitationto sell or purchase any securities or the solicitation of an offer to purchase,otherwise acquire, subscribe for, sell or otherwise dispose of any securities,pursuant to the Offer or otherwise, nor shall there be any sale, issue ortransfer of the securities referred to in this announcement in or into anyjurisdiction in contravention of any applicable law. The Offer will be madesolely by the Offer Document (together with, in the case of Beales Shares incertificated form, the Form of Acceptance), which will contain the full termsand conditions of the Offer, including details of how the Offer may beaccepted. Beales Shareholders should carefully read the Offer Document (and,if they hold their Beales Shares in certificated form, the Form of Acceptance)in its entirety before making a decision with respect to the Offer. Sanlam Securities, which is authorised and regulated in the United Kingdom bythe FCA, is acting exclusively for English Rose and no-one else in relation tothe Offer and will not be responsible to anyone other than English Rose forproviding the protections afforded to the customers of Sanlam Securities or forproviding advice in relation to the Offer or in relation to the contents ofthis announcement or any transaction or arrangement referred to herein, save asimposed by the Financial Services and Markets Act 2000 or the regulatory regimeestablished thereunder. Smith Square Partners, which is authorised and regulated in the United Kingdomby the FCA, is acting exclusively for Beales and no-one else in relation to theOffer and will not be responsible to anyone other than Beales for providing theprotections afforded to the customers of Smith Square Partners or for providingadvice in relation to the Offer or in relation to the contents of thisannouncement or any transaction or arrangement referred to herein. Smith Square Partners has given and not withdrawn its consent to thepublication of this announcement with the inclusion of the recommendation andopinions provided by Smith Square Partners in the form and context in whichthey are included. The Offer shall be made solely by English Rose and neither Sanlam Securitiesnor any of its affiliates are making the Offer. To the extent permitted by applicable law, in accordance with, and to theextent permitted by, the Code and normal UK market practice, English Rose orits nominees or brokers (acting as agents) or their respective affiliates mayfrom time to time make certain purchases of, or arrangements to purchase,Beales Shares, other than pursuant to the Offer, before or during the period inwhich the Offer remains open for acceptance. These purchases may occur eitherin the open market at prevailing prices or in private transactions atnegotiated prices. Such purchases, or arrangements to purchase, will complywith all applicable UK rules, including the Code and the rules of the LondonStock Exchange to the extent applicable. In addition, in accordance with, andto the extent permitted by, the Code and normal UK market practice, SanlamSecurities and its affiliates may engage in purchasing activities consistentwith their respective normal and usual practice and applicable law. Anyinformation about such purchases will be disclosed on a next day basis to thePanel and will be available from any Regulatory Information Service, includingthe Regulatory News Service on the London Stock Exchange website,www.londonstockexchange.com. The distribution of this announcement in jurisdictions other than the UnitedKingdom may be restricted by the laws of those jurisdictions and thereforepersons into whose possession this announcement comes should inform themselvesabout and observe any such restrictions. Failure to comply with any suchrestrictions may constitute a violation of the securities laws of any suchjurisdiction. The availability of the Offer to Beales Shareholders who are not resident inthe United Kingdom may be affected by the laws of the relevant jurisdictions inwhich they are located or of which they are citizens. Such persons shouldinform themselves of, and observe, any applicable legal or regulatoryrequirements of those jurisdictions. The Offer is not intended to be made, directly or indirectly, in, into or fromany Restricted Jurisdiction and the Offer will not be capable of acceptancefrom or within any Restricted Jurisdiction. Accordingly, copies of thisannouncement are not being, and must not be, directly or indirectly, mailed orotherwise forwarded, distributed or sent in, into or from any RestrictedJurisdiction and persons receiving this announcement (including custodians,nominees and trustees) must not mail or otherwise distribute or send it in,into or from any Restricted Jurisdiction, as doing so may invalidate anypurported acceptance of the Offer. Further details in relation to overseasBeales Shareholders will be contained in the Offer Document. This announcement has been prepared for the purpose of complying with Englishlaw and the Code and the information disclosed may not be the same as thatwhich would have been disclosed if this announcement had been prepared inaccordance with the laws of jurisdictions outside the UK. Forward-looking statements This announcement, including information included in this announcement,contains "forward-looking statements" concerning English Rose and Beales andthe Beales Group that are subject to risks and uncertainties. Certaininformation in this announcement relating to Beales has been compiled frompublished sources. Generally, the words "will", "may", "should", "continue","believes", "expects", "intends", "anticipates" or similar expressions identifyforward-looking statements. These forward-looking statements involve risks anduncertainties that could cause actual results to differ materially from thoseexpressed in the forward-looking statements. Many of these risks anduncertainties relate to factors that are beyond English Rose's ability tocontrol or estimate precisely, such as future market conditions, changes inregulatory environment and the behaviour of other market participants. EnglishRose cannot give any assurance that such forward-looking statements will proveto have been correct. The reader is cautioned not to place undue reliance onthese forward-looking statements, which speak only as of the date of thisannouncement. English Rose does not undertake any obligation to update orrevise publicly any of the forward-looking statements set out herein, whetheras a result of new information, future events or otherwise, except to theextent legally required. Nothing contained herein shall be deemed to be a forecast, projection orestimate of the future financial performance of English Rose or any member ofthe Beales Group following completion of the Offer unless otherwise stated. No profit forecast No statement in this announcement is intended as a profit forecast or a profitestimate, and no statement in this announcement should be interpreted to meanthat the future earnings per Beales Share for current or future financial yearswill necessarily match or exceed the historical or published earnings perBeales Share. Disclosure requirements under the Code Under Rule 8.3(a) of the Code, any person who is interested in 1% or more ofany class of relevant securities of an offeree company or of any securitiesexchange offeror (being any offeror other than an offeror in respect of whichit 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 theoffer period and, if later, following the announcement in which any securitiesexchange offeror is first identified. An Opening Position Disclosure mustcontain details of the person's interests and short positions in, and rights tosubscribe for, any relevant securities of each of (i) the offeree company and(ii) any securities exchange offeror(s). An Opening Position Disclosure by aperson to whom Rule 8.3(a) applies must be made by no later than 3.30 pm(London time) on the 10th business day following the commencement of the offerperiod and, if appropriate, by no later than 3.30 pm (London time) on the 10thbusiness day following the announcement in which any securities exchangeofferor is first identified. Relevant persons who deal in the relevantsecurities of the offeree company or of a securities exchange offeror prior tothe deadline for making an Opening Position Disclosure must instead make aDealing Disclosure. Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1%or more of any class of relevant securities of the offeree company or of anysecurities exchange offeror must make a Dealing Disclosure if the person dealsin any relevant securities of the offeree company or of any securities exchangeofferor. A Dealing Disclosure must contain details of the dealing concernedand of the person's interests and short positions in, and rights to subscribefor, any relevant securities of each of (i) the offeree company and (ii) anysecurities exchange offeror, save to the extent that these details havepreviously been disclosed under Rule 8. A Dealing Disclosure by a person towhom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) onthe 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 relevantsecurities of an offeree company or a securities exchange offeror, they will bedeemed to be a single person for the purpose of Rule 8.3. Opening Position Disclosures must also be made by the offeree company and byany 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 Rules8.1, 8.2 and 8.4 of the Code). Details of the offeree and offeror companies in respect of whose relevantsecurities Opening Position Disclosures and Dealing Disclosures must be madecan be found in the Disclosure Table on the Takeover Panel's website atwww.thetakeoverpanel.org.uk, including details of the number of relevantsecurities in issue, when the offer period commenced and when any offeror wasfirst identified. You should contact the Panel's Market Surveillance Unit on+44 (0)20 7638 0129 if you are in any doubt as to whether you are required tomake an Opening Position Disclosure or a Dealing Disclosure. You should note that, for the purposes of the above summary of Rule 8 of theCode, English Rose is not treated as a securities exchange offeror andtherefore there is no requirement to disclose interests or dealings in sharesof English Rose or any other members of the Concert Party under Rule 8 of theCode. English Rose will be disclosing later today the details required to bedisclosed by it under Rules 8.1(a) and 8.3(a) and any further disclosure inrespect of all persons acting in concert with English Rose in accordance withRules 8.1(a) and 8.3(a) and Notes 2(a)(i) and 2(b)(i) on Rule 8 will be made assoon as possible thereafter. Information relating to Beales Shareholders Addresses, electronicaddresses and certain information provided by BealesShareholders, persons with information rights and other relevant persons forthe receipt of communications from Beales may be provided to English Roseduring the Offer Period as requested under Section 4 of Appendix 4 of the Code. Publication on websites In accordance with Rule 26.1 of the Code, a copy of this announcement will bemade available, subject to certain restrictions relating to persons resident ina Restricted Jurisdiction, free of charge, on English Rose's parent company'swebsite at www.portnard.co.uk and on Beales' website at www.beales.co.uk by nolater than 12 noon (London time) on 20 January 2015. For the avoidance of doubt, neither the content of the websites referred toabove nor the contents of any website accessible from hyperlinks on any suchwebsite (or any other website) is incorporated into, or forms part of, thisannouncement nor, unless previously published by means of a RegulatoryInformation Service, should any such content be relied upon in reaching adecision regarding the matters referred to in this announcement. In accordance with Rule 30.2, a person may request a copy of the announcementin hard copy form. A person may also request that all future documents,announcements and information in relation to the Offer should be in hard copyform. A hard copy of the announcement will not be sent unless so requested. A hardcopy may be obtained by sending a request to Sanlam Securities, 10 King WilliamStreet, London EC4N 7TW or by contacting Sanlam Securities on +44 (0)20 76282200. PART II NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO ORFROM ANY RESTRICTED JURISDICTION OR OTHER JURISDICTION WHERE TO DO SO WOULDCONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION EMBARGOED FOR RELEASE AT 9.30 AM 19 January 2015 RECOMMENDED CASH OFFER FOR BEALE PLC ("Beales" or the "Company") BY ENGLISH ROSE LIMITED ("English Rose") 1. Introduction The boards of Beales and English Rose, a company controlled by Andrew Perloff,announce that they have reached agreement on the terms of a recommended cashoffer by English Rose for the entire issued and to be issued ordinary sharecapital of Beales (the "Offer"). 2. Terms of the Offer Under the terms of the Offer, which will be subject to the conditions andfurther terms set out below and in Appendix I and the full terms and conditionswhich will be set out in the Offer Documentand, in respect of Beales Sharesheld in certificated form, the Form of Acceptance, Beales Shareholders whoaccept the Offer will be entitled to receive: for each Beales Share 6p in cash The Offer values the entire issued ordinary share capital of Beales atapproximately £1.23 million. The Offer Price represents a discount of approximately 48 per cent. to theClosing Price of a Beales Share of 11.5p on 16 January 2015, the business dayimmediately preceding the date of this announcement. The Beales Shares will beacquired pursuant to the Offer fully paid and free from all liens, charges,equitable interests, encumbrances, rights of pre-emption and any other rightsand interests of any nature whatsoever and together with all rights now andhereafter attaching thereto, including voting rights and the right to receiveand retain in full all dividends and other distributions (if any) declared,made or paid on or after the date of this announcement. The Offer Document and (in the case of Beales Shareholders who hold theirBeales Shares in certificated form) the Form of Acceptance containing the fullterms and conditions of the Offer will be posted to Beales Shareholders (otherthan Beales Shareholders in a Restricted Jurisdiction) in due course. 3. Background to the Recommendation The Board of Beales has carefully considered the terms of the Offer. Under theCode, the Beales Directors are required to obtain independent advice on theOffer and to make the substance of such advice and its own views known toBeales Shareholders. The Offer Price represents a discount of approximately 48 per cent. to theClosing Price of 11.5p per Beales Share on 16 January 2015, being the lastbusiness day prior to the date of this announcement. The Board of Bealesbelieves that the Offer Price is disappointing and that in differentcircumstances it could have achieved a price that would value the business andassets of Beales more fully. However, the complex capital structure inheritedby the current Beales Board imposes a number of restrictions on Beales' abilityto fund its activities, including the requirement for the Concert Party toagree to any of the alternative funding options the Beales Board hasidentified. As a result, Beales may be unable to generate sufficient cashflows to meet its financial commitments in the future. Accordingly, the BealesBoard believes that Beales Shareholders should carefully consider the futurerisks facing the Beales Group and may wish to accept the Offer, depending ontheir own individual circumstances and appetite for risk. The Beales Board hassummarised below what it believes are the risks associated with declining theOffer and retaining Beales Shares. The Beales Board believes that theprincipal factors underlying these risks have been publicly disclosed by Bealesover the course of the last few years. Balance sheet issues In May 2011, prior to the current Beales Directors' involvement in thebusiness, Beales acquired 19 stores from ARCS, now known as CEC. To enable itto satisfy part of the consideration owing in respect of these stores, Bealesissued 8,500,000 Preference Shares, of which 7,983,953 remain unredeemedtoday. The Preference Shares will start to accrue dividends from May 2016 at arate of 8 per cent. per annum, increasing to 9 per cent. per annum from May2020. The Preference Shares are due for redemption in instalments of £500,000made at six monthly intervals commencing on 31 May 2017. As part of that transaction, J E Beale Plc, a wholly owned subsidiary ofBeales, also entered into a £2.5 million term loan facility with ARCS, of which£1.0 million remains outstanding. A capital repayment of £125,000 was due on31 October 2014, the payment of which has been delayed with the agreement ofthe lenders (see below). Further capital repayments of £125,000 are due inApril and October each year until the whole loan is repaid. On 30 April 2013, the benefit of the outstanding Term Loan was assigned toMaland Pension Fund, a pension fund established for the sole benefit of AndrewPerloff, and Harold Perloff, Andrew Perloff's brother, by CEC in an independenttransaction. In addition, on that date, Portnard agreed to purchase 8,193,388Preference Shares from CEC. Portnard completed the purchase of 7,000,000 ofthose shares in July 2014 and is due to complete the purchase of any unredeemedbalance of those Preference Shares held by CEC on 30 April 2016. Based on forecast trading, and in the absence of additional capital investment,Beales may experience difficulty in generating sufficient cash flows to meetits obligations to pay interest and principal owing in respect of the Term Loanand to pay dividends on, and redeem the Preference Shares, as they fall due,which could lead to additional interest charges owing on the Term Loan and theaccrued dividend on the Preference Shares increasing by an additional 4 percent. per annum. In addition, the Beales Group has an outstanding asset-based lending facilityof £12.0 million with Wells Fargo Capital Finance. As at 16 January 2015,approximately £1.5 million was drawn against the Facility, but the BealesGroup's borrowings were at that date close to their annual low point and willincrease significantly over the next few months as deliveries of Spring/Summerstock are made in the normal course of business and consistent with prioryears. The Facility, Preference Shares and the Term Loan all contain change of controlclauses which means that the Beales Group could (in the case of the PreferenceShares, subject to the requirements of the Companies Act) be required to repayall of the outstanding amounts due on a change of control of Beales or on asale of all, or substantially all, of the assets of the Beales Group. Suchpayments would need to be made prior to any future distribution to BealesShareholders. The Concert Party The Concert Party holds, in aggregate, approximately 29.72 per cent. of theissued ordinary share capital of Beales. In addition, Portnard holds7,000,000 of the 7,983,953 of outstanding Preference Shares with an agreementto purchase the balance; Maland Pension Fund and Harold Perloff hold thebenefit of the £1.0 million Term Loan; and Panther is the landlord of 10 ofBeales' 29 stores, some of which have landlord break options, with an option toacquire one other store from its current third party owner. Given the size of the Concert Party's interests in the ordinary share capitalof Beales, the Concert Party has the ability to block any special resolutionproposed by the Board of Beales. In addition, any alternative offeror would berequired to redeem the Preference Shares (subject to the requirements of theCompanies Act) and repay the Term Loan in full on a change of control. Thisseverely restricts the ability of the Beales Board to deliver any alternativeoffer from a third party which provides any additional value for BealesShareholders. It should also be noted that, upon the Offer becoming or being declaredunconditional in all respects, Portnard may exercise its right under the BealesArticles to convert some or all of the Preference Shares held by it into amaximum of 9.99 per cent. of the fully-diluted issued ordinary share capital ofBeales, increasing the Concert Party's holding accordingly. Capital requirement and review of alternatives As was seen in early Autumn/Winter 2014 when the UK retail sector suffered aperiod of weak trading given the unseasonably warm weather, the Beales Group'strading remains volatile and difficult to predict. Importantly, the Board ofBeales, giving consideration to its statutory and regulatory obligations toconsider the medium to long term prospects of the Beales Group, believes thatthe business requires additional capital to maintain and accelerate the pace ofthe turnaround of the business, so as to ensure that it is robust in the eventof further negative market dynamics and/or future balance sheet commitmentswhich could otherwise have a significantly detrimental impact on the BealesGroup. In this context, the Board of Beales appointed PwC in October 2014 to reviewthe Beales Group's financial position and to consider options to raiseadditional capital. As part of this exercise, Beales and PwC held discussionswith the two largest shareholders of Beales and with Wells Fargo CapitalFinance. A number of options were considered, but the Beales Board believedthat none could realistically deliver greater value to Beales Shareholderswithout the agreement of the Concert Party. As an alternative, English Rosehas put forward the Offer. Employees and the ongoing business If the Offer becomes or is declared wholly unconditional, the Concert Party hascommitted to support the Beales business with additional capital which isexpected to improve the future security of the business, its employees and theBeales pension schemes. Conditional upon the Offer becoming or being declared unconditional in allrespects and on no event of default having arisen (save where such event ofdefault has been waived by Wells Fargo Capital Finance) under the Facility,Portnard has agreed that it will procure the lodging of a £2.0 million depositwith Wells Fargo Capital Finance. On receipt of such deposit, under the termsof the Collateralised Term Loan Facility, Wells Fargo Capital Finance will make£1.0 million available for immediate use by Beales (subject to the Facilitycontinuing to be available for drawdown at that time and in addition to anycurrent ability to draw down on the Facility), with a further amount up to amaximum of £1.0 million potentially being made available to Beales by WellsFargo Capital Finance (through the Collateralised Term Loan Facility) subjectto the re-registration of Beales as a private company and to further conditionswhich may be agreed and which may include recommendations arising from EnglishRose's detailed operational and strategic review with Beales' management. As set out in more detail in paragraph 12 below, English Rose has indicated itsintention to work closely with management to assess the options available toBeales to protect, promote and develop its business. English Rose hasconfirmed that, following completion of the Offer, the existing employmentrights of all Beales employees will be honoured, that no changes are proposedwith regard to the accrual of pension benefits for existing members or theadmission of new members, and that no changes to the terms and conditions ofemployment of any Beales' employees or to pension contributions are currentlyenvisaged. Trading and outlook Since the current CEO, Michael Hitchcock, joined the business in May 2012 asinterim CFO, considerable progress has been made to generate and secure valuefor Beales Shareholders during a period of uncertainty for secondary andtertiary high street retailers and at a time when material risks have faced thebusiness. In particular, initiatives were put in place to refinance thebusiness and to rebuild and refocus the brand with material consequentialimprovements to gross margin and operating performance. Beales expects to publish its preliminary results for the year ended 1 November2014 on 27 February 2015. Total Beales Group sales including concessions and VAT were 1.1% lower for the26 weeks to 1 November 2014 and 3.7% lower for the 52 weeks to 1 November 2014,compared to the same periods in the prior year. These sales decreases include the impact of the decision taken by the Board ofBeales to close certain loss making stores on cessation of leases and theforced exit from stores by landlords on cessation of leases due to siteredevelopment. Like-for-like sales including concessions and VAT were 1.0% higher for the 26weeks to 1 November 2014 and 1.1% lower for the 52 weeks to 1 November 2014,compared to the same periods in the prior year. The cessation of 'mega' promotions which, in the prior year, generatedincreased sales at little or no margin, the exit from the loss-making TV/Audiocategory and the slow start to the current financial year on the back of lowerreal disposable incomes, all had a depressive effect on sales. In common with most general retailers selling seasonal products across variouscategories, trading over the 9 weeks to 3 January 2015 has proven to be bothchallenging and variable, with a weak Autumn followed by a strong Christmas andNew Year period. However, the underlying net positive momentum generatedthrough the mildly improving macro-economic environment, more positive consumersentiment and operational improvements, continues. Tactical store closures meant that total Beales Group sales includingconcessions and VAT were 1.1% lower for the 9 weeks to 3 January 2015 comparedto the same period in the prior year. However, like-for-like sales includingconcessions and VAT were 1.5% higher for the 9 weeks to 3 January 2015 comparedto the same period in the prior year, on an improved margin. Intention to de-list Beales Shareholders should note that English Rose has stated its intention tocancel the standard listing of Beales Shares on the Official List and thetrading of Beales Shares on the London Stock Exchange's main market for listedsecurities (which will only require a board resolution rather than a specialresolution of Beales Shareholders) and to re-register Beales as a privatelimited company (which requires the approval of a special resolution at ageneral meeting of Beales), should the Offer be successful. If Beales isde-listed and re-registered as a private company, this will significantlyreduce the liquidity and marketability of any Beales Shares not assented to theOffer at that time and the value of any such shares may be affected as aconsequence. Beales Shareholders should note that, as minority shareholders of a private andunlisted company, they would not be afforded the same level of protection anddisclosure as was afforded to them whilst Beales was a listed public company. The Board of Beales believes that these factors should be taken intoconsideration by Beales Shareholders when deciding whether or not to accept theOffer. However, there may also be other factors relevant to BealesShareholders' personal circumstances which will need to be considered. If you are in any doubt about the Offer or the action you should take withregard to the Offer, you should consult with your own appropriate independentprofessional adviser. 4. Recommendation Taking all of the factors set out above into account, in particular the complexcapital structure inherited by the current Beales Board and the restrictionsthis imposes on Beales' ability to fund its activities, including therequirement for the Concert Party to agree to any of the alternative fundingoptions the Beales Board has identified (which means that Beales may be unableto generate sufficient cash flows to meet its financial commitments in thefuture), the Board of Beales, which has been so advised by Smith SquarePartners, considers the terms of the Offer to be fair and reasonable.Accordingly, the Beales Board intends to unanimously recommend that BealesShareholders accept the Offer, as the Beales Directors have irrevocablyundertaken to do in respect of their entire legal and beneficial holdings,which, in aggregate, amount to 20,000 Beales Shares, representing approximately0.1 per cent. of the issued ordinary share capital of Beales. In providingadvice to the Board of Beales, Smith Square Partners has taken into account thecommercial assessments of the Beales Directors. 5. Background to the Offer As set out above, the Beales Board approached the Concert Party in lateNovember 2014, in light of its significant interests in Beales, and both soughtand made proposals seeking the Concert Party's support and assistance to helpthe Beales Group move forward, particularly with regard to the PreferenceShares and Term Loan. In order to protect its investment, the Concert Partyinstead made a proposal to the Board of Beales broadly on similar terms tothose represented by the Offer. Conditional upon the Offer becoming or being declared unconditional in allrespects and on no event of default having arisen (save where such event ofdefault has been waived by Wells Fargo Capital Finance) under the Facility,Portnard has committed to Beales to procure the lodging of a £2.0 milliondeposit with Wells Fargo Capital Finance to provide additional collateralsecurity in respect of the Facility. On receipt of such deposit, Wells FargoCapital Finance will make £1.0 million available for immediate use by Beales(subject to the Facility continuing to be available for drawdown at that timeand in addition to any current ability to draw down on the Facility), with afurther amount up to a maximum of £1.0 million potentially being made availableto Beales by Wells Fargo Capital Finance subject to the re-registration ofBeales as a private company and to further conditions which may be agreed andwhich may include recommendations arising from English Rose's detailedoperational and strategic review with Beales' management. It is intended thatsuch review will be completed within four months of the Offer becoming or beingdeclared unconditional in all respects. The commitment to provide the £2.0 million deposit described above is set outin a deed signed by Portnard and English Rose and addressed to Beales and istherefore not deemed to be a post-offer undertaking for the purposes of Rule19.7 of the Code. 6. Intentions of English Rose with regard to Beales The Concert Party has had access to extensive information on the operationaland strategic decision making of Beales historically through Panther'srepresentation on the Board of Beales up until 21 July 2014. The Concert Partyhas received further information on the Beales Group since late November 2014through discussions with Beales' management. However, in light of theimportant Christmas trading period the Concert Party has not had sufficienttime to conduct a detailed review of the Beales management's operational andstrategic plans. Accordingly, in view of the proposal to introduce furtherfinancial support to the Beales Group, the English Rose Directors consider itappropriate to satisfy themselves that the operational and strategic decisionsfacing the Beales Group in the near to medium term will be addressed in anoptimal manner. The English Rose Directors therefore intend to work with Beales' management inundertaking a thorough review of the operational and strategic optionsavailable to the Beales Group. The Concert Party has structured its proposedprovision of additional capital backing for the benefit of the business in away which reflects this requirement. Accordingly, Portnard has committed toBeales that it will procure the lodging of a £2.0 million deposit with WellsFargo Capital Finance immediately upon the Offer becoming or being declaredunconditional in all respects whereupon Beales will have the ability to drawdown £1.0 million under the Collateralised Term Loan Facility (subject to theFacility continuing to be available for drawdown at that time and in additionto any current ability it may have to draw down funds under the Facility), witha further amount up to a maximum of £1.0 million potentially being madeavailable to Beales by Wells Fargo Capital Finance subject to there-registration of Beales as a private company and further conditions which maybe agreed which may include recommendations arising from English Rose'sdetailed operational and strategic review with Beales' management. The English Rose Directors and Beales' management are in broad alignment on anumber of matters relating to the future of the business, including: - the need for investment in selective store refurbishments; - the availability of additional working capital to reinforce the Beales Group's trading position and to help insulate it against further market volatility; - the need to review and address the operation of certain loss-making stores; and - the requirement to safeguard the interests of pension scheme members. The review will focus on these matters and on agreeing the details of how thesegoals should be addressed. Given that the review is yet to take place, EnglishRose cannot rule out the possibility of exiting stores that are notcommercially or economically viable (in line with management's own ongoingstrategic review, as set out in the 2013 Annual Report and Accounts). 7. Financing of the Offer English Rose is providing the cash consideration payable under the Offer fromfacilities made available to it by Portnard. Sanlam Securities, financial adviser to English Rose, is satisfied thatsufficient resources are available to satisfy in full the cash considerationpayable to Beales Shareholders under the terms of the Offer. 8. The Concert Party's holding of Beales Shares Panther currently owns 4,074,493 Beales Shares, representing approximately19.85 per cent. of the issued ordinary share capital of Beales. Maland PensionFund owns 1,788,000 Beales Shares, representing approximately 8.71 per cent. ofthe issued ordinary share capital of Beales. Andrew Perloff and his wife havea beneficial interest in a further 237,507 Beales Shares, representingapproximately 1.16 per cent. of the issued ordinary share capital of Beales.Therefore, in aggregate, the Concert Party holds approximately 29.72 per cent.of the issued ordinary share capital of Beales which it intends to assent tothe Offer. Upon the Offer becoming or being declared unconditional in all respects,English Rose will make an appropriate proposal to the holders of the PreferenceShares. Under the terms of the Beales Articles, all the Preference Sharesoutstanding are redeemed upon such an event. However, as Beales is unable toeffect the redemption of all the Preference Shares outstanding, the holders ofthe Preference Shares have the right, under the terms of the Beales Articles,to convert some or all of the Preference Shares into Beales Shares at the thenexisting market price (averaged over the prior ten dealing days) into a maximumof 9.99 per cent. of the fully-diluted issued ordinary share capital ofBeales. Portnard, which holds 7,000,000 Preference Shares, has indicated thatit may exercise its conversion rights under the Beales Articles to the extentnecessary to hold an additional 9.99 per cent. of the fully-diluted issuedordinary share capital of Beales. 9. Irrevocable undertakings English Rose has received binding irrevocable undertakings from the members ofthe Concert Party to accept the Offer in respect of a total of 6,100,000 BealesShares, representing, in aggregate, approximately 29.72 per cent. of Beales'issued ordinary share capital. Percentage of Number of Beales Beales SharesName Shares in issue Panther 4,074,493 19.85 Maland Pension Fund 1,788,000 8.71 Andrew Perloff 212,507 1.04 Kimberley Perloff 25,000 0.12 Total 6,100,000 29.72 In addition, English Rose has received binding irrevocable undertakings fromthe Beales Directors to accept the Offer in respect of a total of 20,000 BealesShares, representing, in aggregate, approximately 0.10 per cent. of Beales'issued ordinary share capital. Percentage of Number of Beales Beales Shares inName Shares issue William Tuffy 10,000 0.05 Tony Richards 10,000 0.05 Total 20,000 0.10 These undertakings will continue to be binding even in the event of a higheroffer for Beales. 10. Information relating to the Concert Party a. English Rose English Rose is a company registered in England and Wales with number 9327747.Its registered office is at Deneway House, 88-94 Darkes Lane, Potters Bar,Hertfordshire EN6 1AQ. English Rose is a wholly-owned subsidiary of Portnard,which is owned by Andrew Perloff and family trusts of Andrew and HaroldPerloff, Andrew Perloff's brother and is incorporated in Jersey but which haselected to be UK resident for tax purposes. b. Panther Panther, which is quoted on AIM, is controlled by Andrew Perloff and members ofhis family. c. Maland Pension Fund Maland Pension Fund is a pension fund established for the sole benefit ofAndrew Perloff. d. Andrew Perloff Andrew Perloff is Executive Chairman of Panther. He has over 50 years'experience in the property sector, including 40 years' experience of being adirector of a public listed company, primarily as Panther's Chairman. He hassignificant experience of corporate activity including several takeovertransactions and has also served on the board of directors of six other publiclisted companies. 11. Information on Beales Beales operates 29 department stores across the United Kingdom. The BealesGroup was founded in 1881 and has its flagship store and corporate headquartersin Bournemouth, UK. The Beales Group has been listed on the main market of theLondon Stock Exchange since 1995. 12. Management, employees and intentions regarding Beales English Rose values the capabilities, skills and experience of Beales'management team and the work undertaken in the last two years to generate andsecure value for the Beales Shareholders. English Rose also attaches greatimportance to the continued participation and continued commitment of Beales'employees. Accordingly, English Rose confirms that, following completion of the Offer, theexisting contractual and statutory employment rights, including in relation topensions, of all Beales employees will be fully safeguarded. In addition,except for any potential redundancies that may arise from the operational andstrategic review to be undertaken with Beales' management or as a result ofexiting stores that are not commercially or economically viable (as set out inparagraph 6 above), English Rose intends to maintain the Beales head office andmost of its store locations and to continue to employ its employees on theterms and conditions currently in place. William Tuffy and Catherine Norgate-Hart have indicated their intention toresign as non-executive directors of the Beales Board conditionally upon theOffer becoming or being declared wholly unconditional and with effect fromcompletion of the Offer. Michael Hitchcock and Tony Richards will remain onthe Beales Board upon completion of the Offer. English Rose intends, upon theOffer becoming or being declared wholly unconditional, to appoint Stuart Lyonsas non-executive Chairman and Andrew Perloff and Simon Peters as non-executivedirectors of Beales. 13. Conditions of the Offer The Offer is conditional, inter alia, upon valid acceptances being received(and not, where permitted, withdrawn) by not later than 1.00 pm on the datewhich is 21 days after the date on which the Offer Document is circulated toBeales Shareholders (or such later times and/or dates as English Rose may,subject to the rules of the Code or with the consent of the Panel, decide) inrespect of not less than 75 per cent. (or such lower percentage as English Rosemay decide in its absolute discretion) in nominal value of the Beales Shares,as further detailed in paragraph 1 of Appendix I. The Offer will also besubject, inter alia, to the satisfaction or waiver (if permitted) of theConditions and certain further terms and conditions set out in Appendix I tothis announcement and to be set out in the Offer Document and, in respect ofBeales Shares held in certificated form, the Form of Acceptance. 14. Expected timetable The Offer Document containing further details and the terms and conditions ofthe Offer will be despatched to Beales Shareholders shortly and, in any event,within 28 days of this announcement pursuant to Rule 24.1(a) of the Code. 15. Compulsory acquisition, cancellation of trading and re-registration If English Rose receives acceptances of the Offer in respect of, and/orotherwise acquires or contracts to acquire, 90 per cent. in nominal value ofthe Beales Shares to which the Offer relates and assuming that all of the otherConditions have been satisfied or waived (if capable of being waived), EnglishRose intends to exercise its rights pursuant to the provisions of Part 28 ofthe Companies Act, as applicable, to acquire compulsorily any remaining BealesShares to which the Offer relates on the same terms as the Offer. Following the Offer becoming, or being declared, unconditional in all respectsand subject to any applicable requirements of the Listing Rules, English Roseintends to procure that Beales applies to the UK Listing Authority and to theLondon Stock Exchange for the cancellation of the admission of the BealesShares to listing on the Official List and to trading on the London StockExchange's main market for listed securities. It is anticipated that suchcancellation will take effect no earlier than 20 business days after the Offerbecomes, or is declared, unconditional in all respects, subject to compliancewith the applicable requirements of the Listing Rules. English Rose willnotify Beales Shareholders of the anticipated date of cancellation. The cancellation of the listing of the Beales Shares will significantly reducethe liquidity and marketability of any Beales Shares not acquired by EnglishRose and their value may be affected as a consequence. Any remaining BealesShareholders would become minority shareholders in a majority controlled publiclimited company and may be unable to sell their Beales Shares and there can beno certainty that any dividends or other distributions would be made by Bealesor that Beales Shareholders would again be offered an opportunity of sellingtheir Beales Shares on terms which are equivalent to or no less advantageousthan those available under the Offer. It is also intended that, following the Offer becoming, or being declared,unconditional in all respects and, assuming the cancellation of the listing ofthe Beales Shares occurs, Beales will be re-registered as a private companyunder the relevant provisions of the Companies Act. 16. Preference Shares and the Beales Performance Share Plan Upon the Offer becoming or being declared unconditional in all respects,English Rose will make an appropriate proposal to the holders of the PreferenceShares. Beales operates a Performance Share Plan. On the basis that all of thePerformance Share Plan awards have expired or been forfeited, with the consentof the Panel, English Rose does not intend to make any offer or proposal toparticipants in the Performance Share Plan. 17. Disclosure of interests in Beales Shares English Rose confirms that it is making, on the date of this announcment, anOpening Position Disclosure, which discloses the details required to bedisclosed by it under Rule 8.1(a) of the Code. 18. Offer Document It is expected that the Offer Document and, in respect of Beales Shares held incertificated form, Forms of Acceptance will be posted as soon as practicableand, in any event, (save with the consent of the Panel) within 28 days of thisannouncement. The Offer Document and Forms of Acceptance will be madeavailable to all Beales Shareholders from the offices of Sanlam Securities, 10King William Street, London EC4N 7TW at no charge to them. Beales Shareholders are urged to read the Offer Document and, in respect ofBeales Shares held in certificated form, the accompanying Form of Acceptancewhen they are sent to them because they will contain important informationabout the Offer. 19. Overseas Beales Shareholders This announcement is for informational purposes only and does not constitute anoffer to sell or an invitation to purchase any securities, or the solicitationof an offer to buy any securities, pursuant to the Offer or otherwise. TheOffer will be made solely by means of the Offer Document and, in respect ofBeales Shares held in certificated form, the Form of Acceptance, which willcontain the full terms and conditions of the Offer, including details of howthe Offer may be accepted. This announcement has been prepared for the purpose of complying with Englishlaw and the Code and the information disclosed may not be the same as thatwhich would have been disclosed if this announcement had been prepared inaccordance with the laws of jurisdictions outside the United Kingdom. The release, publication or distribution of this announcement in certainjurisdictions may be restricted by law. Persons who are not resident in theUnited Kingdom or who are subject to other jurisdictions should informthemselves of, and observe, any applicable requirements. Unless otherwise determined by English Rose or required by the Code, andpermitted by applicable law and regulation, the Offer will not be made,directly or indirectly, in, into or from a Restricted Jurisdiction where to doso would violate the laws in that jurisdiction, and the Offer will not becapable of acceptance from or within a Restricted Jurisdiction. Accordingly,copies of this announcement and all documents relating to the Offer are notbeing, and must not be, directly or indirectly, mailed or otherwise forwarded,distributed or sent in, into or from a Restricted Jurisdiction where to do sowould violate the laws in that jurisdiction, and persons receiving thisannouncement 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 as doing so may invalidate any purportedacceptance of the Offer. The availability of the Offer to Beales Shareholders who are not resident inthe United Kingdom may be affected by the laws of the relevant jurisdictions inwhich they are resident. Persons who are not resident in the United Kingdomshould inform themselves of, and observe, any applicable requirements andconsult an appropriate independent professional adviser in their relevantjurisdiction without delay. 20. Offer-related arrangements The following contracts are disclosed as offer-related arrangements for thepurposes of Rule 21.2 of the Code: (a) a non-disclosure agreement between Beales and Panther, dated 26 November 2014, pursuant to which Panther has undertaken, subject to certain exceptions, to keep information relating to Beales confidential and not to disclose it to third parties; and (b) a commitment by Portnard to Beales, dated 17 January 2015, that it will procure the lodging of a £2.0 million deposit with Wells Fargo Capital Finance conditional upon the Offer becoming or being declared unconditional in all respects and on no event of default having arisen (save where such event of default has been waived by Wells Fargo Capital Finance) under the Facility, whereupon Beales will have the ability to draw down £1.0 million under the Collateralised Term Loan Facility (subject to the Facility continuing to be available for drawdown at that time and in addition to any current ability it may have to draw down funds under the Facility), with a further amount up to a maximum of £1.0 million potentially being made available to Beales by Wells Fargo Capital Finance subject to the re-registration of Beales as a private company and further conditions which may be agreed and which may include recommendations arising from English Rose's detailed operational and strategic review with Beales' management. These agreements are available for inspection as referred to in paragraph 21below. 21. Documents to be published on a website Copies of the following documents will be available by no later than 12 noon onthe business day immediately following the date of this announcement on EnglishRose's parent company's website at www.portnard.co.uk and on Beales' website atwww.beales.co.uk until the end of the Offer Period. (a) this announcement; (b) the irrevocable undertakings referred to in paragraph 9 above; and (c) the agreements referred to in paragraph 20 above. 22. General The Offer will be made on the terms and subject to the conditions and furtherterms set out herein and in Appendix I to this announcement. The bases andsources of certain financial information contained in this announcement are setout in Appendix II to this announcement. Certain terms used in thisannouncement are defined in Appendix III to this announcement. Sanlam Securities, which is authorised and regulated in the United Kingdom bythe FCA, is acting exclusively for English Rose and no one else in relation tothe Offer and will not be responsible to anyone other than English Rose forproviding the protections afforded to the customers of Sanlam Securities, orfor providing advice in relation to the Offer or in relation to the contents ofthis announcement or any transaction or arrangement referred to herein, save asimposed by the Financial Services and Markets Act 2000 or the regulatory regimeestablished thereunder. Smith Square Partners, which is authorised and regulated in the United Kingdomby the FCA, is acting exclusively for Beales and no one else in relation to theOffer and will not be responsible to anyone other than Beales for providing theprotections afforded to the customers of Smith Square Partners, or forproviding advice in relation to the Offer or in relation to the contents ofthis announcement or any transaction or arrangement referred to herein. Enquiries English Rose Enterprises LimitedAndrew Perloff/Simon Peters Tel. no.: 01707 667 300 Sanlam Securities UK Limited (Financialadviser to English Rose)David Worlidge/Simon Clements Tel. no.: 020 7628 2200 Beale PLCMichael Hitchcock Tel. no.: 01202 203 462 Smith Square Partners LLP (Financial adviser to Beales)John Craven/Jade Jack Tel. no.: 020 3696 7260 Buchanan Communications Ltd (PR adviser to Beales)Charles Ryland/Sophie McNulty Tel. no.: 020 7466 5000 Forward-looking statements This announcement, including information included in this announcement,contains "forward-looking statements" concerning English Rose and Beales andthe Beales Group that are subject to risks and uncertainties. Certaininformation in this announcement relating to Beales has been compiled frompublished sources. Generally, the words "will", "may", "should", "continue","believes", "expects", "intends", "anticipates" or similar expressions identifyforward-looking statements. These forward-looking statements involve risks anduncertainties that could cause actual results to differ materially from thoseexpressed in the forward-looking statements. Many of these risks anduncertainties relate to factors that are beyond English Rose's ability tocontrol or estimate precisely, such as future market conditions, changes inregulatory environment and the behaviour of other market participants. EnglishRose cannot give any assurance that such forward-looking statements will proveto have been correct. The reader is cautioned not to place undue reliance onthese forward-looking statements, which speak only as of the date of thisannouncement. English Rose does not undertake any obligation to update orrevise publicly any of the forward-looking statements set out herein, whetheras a result of new information, future events or otherwise, except to theextent legally required. Nothing contained herein shall be deemed to be a forecast, projection orestimate of the future financial performance of English Rose or any member ofthe Beales Group following completion of the Offer unless otherwise stated. No profit forecast No statement in this announcement is intended as a profit forecast or a profitestimate, and no statement in this announcement should be interpreted to meanthat the future earnings per Beales Share for current or future financial yearswill necessarily match or exceed the historical or published earnings perBeales Share. Disclosure requirements under the Code Under Rule 8.3(a) of the Code, any person who is interested in 1% or more ofany class of relevant securities of an offeree company or of any securitiesexchange offeror (being any offeror other than an offeror in respect of whichit 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 theoffer period and, if later, following the announcement in which any securitiesexchange offeror is first identified. An Opening Position Disclosure mustcontain details of the person's interests and short positions in, and rights tosubscribe for, any relevant securities of each of (i) the offeree company and(ii) any securities exchange offeror(s). An Opening Position Disclosure by aperson to whom Rule 8.3(a) applies must be made by no later than 3.30 pm(London time) on the 10th business day following the commencement of the offerperiod and, if appropriate, by no later than 3.30 pm (London time) on the 10thbusiness day following the announcement in which any securities exchangeofferor is first identified. Relevant persons who deal in the relevantsecurities of the offeree company or of a securities exchange offeror prior tothe deadline for making an Opening Position Disclosure must instead make aDealing Disclosure. Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1%or more of any class of relevant securities of the offeree company or of anysecurities exchange offeror must make a Dealing Disclosure if the person dealsin any relevant securities of the offeree company or of any securities exchangeofferor. A Dealing Disclosure must contain details of the dealing concernedand of the person's interests and short positions in, and rights to subscribefor, any relevant securities of each of (i) the offeree company and (ii) anysecurities exchange offeror, save to the extent that these details havepreviously been disclosed under Rule 8. A Dealing Disclosure by a person towhom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) onthe 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 relevantsecurities of an offeree company or a securities exchange offeror, they will bedeemed to be a single person for the purpose of Rule 8.3. Opening Position Disclosures must also be made by the offeree company and byany 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 Rules8.1, 8.2 and 8.4 of the Code). Details of the offeree and offeror companies in respect of whose relevantsecurities Opening Position Disclosures and Dealing Disclosures must be madecan be found in the Disclosure Table on the Takeover Panel's website atwww.thetakeoverpanel.org.uk, including details of the number of relevantsecurities in issue, when the offer period commenced and when any offeror wasfirst identified. You should contact the Panel's Market Surveillance Unit on+44 (0)20 7638 0129 if you are in any doubt as to whether you are required tomake an Opening Position Disclosure or a Dealing Disclosure. You should note that, for the purposes of the above summary of Rule 8 of theCode, English Rose is not treated as a securities exchange offeror andtherefore there is no requirement to disclose interests or dealings in sharesof English Rose or any other members of the Concert Party under Rule 8 of theCode. English Rose will be disclosing later today the details required to bedisclosed by it under Rules 8.1(a) and 8.3(a) and any further disclosure inrespect of all persons acting in concert with English Rose in accordance withRules 8.1(a) and 8.3(a) and Notes 2(a)(i) and 2(b)(i) on Rule 8 will be made assoon as possible thereafter. Information relating to Beales Shareholders Addresses, electronicaddresses and certain information provided by BealesShareholders, persons with information rights and other relevant persons forthe receipt of communications from Beales may be provided to English Roseduring the Offer Period as requested under Section 4 of Appendix 4 of the Code. Publication on websites In accordance with Rule 26.1 of the Code, a copy of this announcement will bemade available, subject to certain restrictions relating to persons resident ina Restricted Jurisdiction, free of charge, on English Rose's parent company'swebsite at www.portnard.co.uk and on Beales' website at www.beales.co.uk by nolater than 12 noon (London time) on 20 January 2015. For the avoidance of doubt, neither the content of the websites referred toabove nor the contents of any website accessible from hyperlinks on any suchwebsite (or any other website) is incorporated into, or forms part of, thisannouncement nor, unless previously published by means of a RegulatoryInformation Service, should any such content be relied upon in reaching adecision regarding the matters referred to in this announcement. In accordance with Rule 30.2, a person may request a copy of the announcementin hard copy form. A person may also request that all future documents,announcements and information in relation to the Offer should be in hard copyform. A hard copy of the announcement will not be sent unless so requested. A hardcopy may be obtained by sending a request to Sanlam Securities, 10 King WilliamStreet, London EC4N 7TW or by contacting Sanlam Securities on +44 (0)20 76282200. APPENDIX I CONDITIONS AND FURTHER TERMS OF THE OFFER The Offer and any acceptances thereunder will be subject to the provisions ofthe Code and any other applicable legal or regulatory requirements and theconditions to be set out in the Offer Document and related Form of Acceptance. Part A - Conditions of the Offer 1. Acceptance condition The Offer will be conditional upon: valid acceptances being received (and not,where permitted, withdrawn) by not later than 1.00 pm (London time) on theFirst Closing Date (or such later time(s) and/or date(s) as English Rose may,subject to the rules of the Code or with the consent of the Panel, decide) inrespect of not less than 75 per cent. in nominal value of the Beales Shares (orsuch lower percentage as English Rose may decide). However, this Conditionwill not be satisfied unless English Rose has acquired, or agreed to acquire,Beales Shares carrying, in aggregate, over 50 per cent. of the voting rightsthen normally exercisable at general meetings of Beales. For the purposes ofthis Condition: (i) Beales Shares which have been unconditionally allotted butnot issued before the Offer becomes, or is declared, unconditional, whetherpursuant to the exercise of any outstanding subscription or conversion rightsor otherwise, shall be deemed to carry the voting rights they will carry onissue; and (ii) valid acceptances shall be treated as having been received inrespect of any Beales Shares that English Rose shall have acquired, orunconditionally contracted to acquire, pursuant to section 979(8) and, ifapplicable, section 979(9) of the Companies Act. 2. Further conditions: In addition, subject as stated in Part B below and to the requirements of thePanel, the Offer will be conditional upon the following Conditions beingsatisfied or, where relevant, waived: Notifications, waiting periods and authorisations (a) all necessary notifications, filings or applications in connection with theOffer having been made and all necessary waiting periods (including anyextensions thereof) under any applicable legislation or regulation of anyjurisdiction having expired, lapsed or been terminated (as appropriate) and allstatutory and regulatory obligations in any jurisdiction having been compliedwith in each case in respect of the Offer and its implementation and allauthorisations, orders, recognitions, grants, consents, clearances,confirmations, certificates, licences, permissions and approvals ("Authorisations") reasonably deemed necessary or appropriate by English Rose inany jurisdiction for, or in respect of, the Offer and, except pursuant toChapter 3 of Part 28 of the Companies Act, the acquisition or the proposedacquisition of any shares or other securities in, or control or management of,Beales having been obtained in terms and in a form reasonably satisfactory toEnglish Rose from any appropriate central bank, government or governmental,quasi-governmental, supranational, statutory, regulatory, environmental orinvestigative body or authority, court, trade agency, professional association,institution, employee representative body or any other body or personwhatsoever in any jurisdiction (a "Third Party") or (without prejudice to thegenerality of the foregoing) from any person or bodies with whom any member ofthe Beales Group has entered into contractual arrangements and all suchAuthorisations necessary or reasonably appropriate to carry on the business ofany member of the Beales Group in any jurisdiction having been obtained and allsuch Authorisations remaining in full force and effect at the time at which theOffer becomes or is declared otherwise wholly unconditional, all filingsnecessary for such purpose having been made and there being no written noticeor written intimation of an intention to revoke, suspend, restrict, modify ornot to renew such Authorisations; General antitrust and regulatory (b) the Competition and Markets Authority indicating in terms satisfactory toEnglish Rose that it does not intend to make a CMA Phase 2 reference of theproposed acquisition of Beales by English Rose; (c) no material complaint or reference to any Third Party against or in respect ofany member of the Beales Group having been threatened in writing, announced orinstituted or remaining outstanding and no Third Party having given notice inwriting of a decision to take, institute, implement or threaten any action,proceeding, suit, investigation, inquiry or reference (and in each case, nothaving withdrawn the same), or having required any action to be taken orotherwise having done anything, or having enacted, made or proposed anystatute, regulation, decision, order or change to published practice (and ineach case, not having withdrawn the same) and there not continuing to beoutstanding any statute, regulation, decision or order which would or mightreasonably be expected in the context of the Offer to: (i) require, prevent or materially delay or affect the divestiture ormaterially prejudice the terms envisaged for such divestiture by any member ofthe Beales Group or English Rose of all or any material part of theirrespective businesses, assets or property or of any Beales Shares or othersecurities in Beales or impose any limitation on the ability of all or any ofthem to conduct their businesses (or any material 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, requireEnglish Rose to acquire, redeem or repay or offer to acquire, redeem or repayany shares, other securities (or the equivalent) or interest in and/or repayany material indebtedness of any member of the Beales Group or any materialasset owned by any Third Party (other than in connection with theimplementation of the Offer); (iii) impose any limitation on, or result in a delay in, the ability ofEnglish Rose, directly or indirectly, to acquire, hold or to exerciseeffectively all or any rights of ownership in respect of shares or othersecurities in Beales or on the ability of any member of the Beales Group,directly or indirectly, to hold or exercise effectively all or any rights ofownership in respect of shares or other securities (or the equivalent) in, orto exercise voting or management control over, any member of the Beales Group,in each case, to an extent which is material in the context of the BealesGroup, taken as a whole; (iv) otherwise adversely affect any or all of the business, assets,financial or trading position, profits or prospects of any member of the BealesGroup or English Rose to an extent which is material in the context of theBeales Group, taken as a whole, or English Rose and the Concert Party, taken asa whole (as the case may be); (v) result in any member of the Beales Group or English Rose ceasing to beable to carry on business to the extent conducted at the date of thisannouncement under any name under which it presently carries on business to anextent which is material in the context of the Beales Group, taken as a whole,or English Rose and the Concert Party, taken as a whole (as the case may be); (vi) make the Offer or its implementation, or the acquisition or proposedacquisition of any shares or other securities in, or control of, Beales byEnglish Rose, void, unenforceable and/or illegal under the laws of any relevantjurisdiction, or otherwise, directly or indirectly, materially prevent orprohibit, restrict, restrain or delay the same or otherwise interfere with theOffer or its implementation, or impose material additional conditions orobligations with respect to, or otherwise materially impede, interfere orrequire amendment of the Offer or the acquisition, or proposed acquisition, ofany shares or other securities in, or control of, Beales by English Rose to anextent which is material in the context of the Offer; (vii) require, prevent or materially delay a divestiture by English Rose ofany shares or other securities (or the equivalent) in any member of the BealesGroup to an extent which is material in the context of the Beales Group, takenas a whole, or English Rose and the Concert Party, taken as a whole (as thecase may be); or (vii) impose any limitation on the ability of English Rose to conduct orintegrate all or any part of its business with all or any part of the businessof the Beales Group to an extent which is material in the context of the BealesGroup, taken as a whole, or English Rose and the Concert Party, taken as awhole (as the case may be), and all applicable waiting and other time periods (including any extensionsthereof) during which any such Third Party could decide to take, institute,implement or threaten any such action, proceeding, suit, investigation, enquiryor reference or take any other step under the laws of any jurisdiction inrespect of the Offer having expired, lapsed or been terminated; Certain matters arising as a result of any arrangement, agreement, etc. (d) except as publicly announced by Beales prior to 16 January 2015 through aRegulatory Information Service or disclosed in writing to English Rose or itsprofessional advisers or as disclosed in the annual report and accounts ofBeales for the year ended 2 November 2013 there being no provision of anymaterial arrangement, agreement, lease, licence, franchise, permit or otherinstrument to which any member of the Beales Group is a party or by or to whichany such member or any of its assets is, or may be, bound, entitled or subject,or any event or circumstance which, as a consequence of the Offer or because ofthe change in the control of Beales or any other member of the Beales Grouprepresented by the Offer, would, or might reasonably be expected to, result in: (i) any monies borrowed by, or any other indebtedness, whether actual orcontingent, of, or any grant available to, any member of the Beales Group beingor becoming repayable, or capable of being declared repayable, immediately orprior to its or their stated maturity date or repayment date, or the ability ofany such member to borrow monies or incur any indebtedness being withdrawn orinhibited or being capable of becoming or being withdrawn or inhibited; (ii) the creation or enforcement of any mortgage, charge or other securityinterest over the whole, or any material part, of the business, property orassets of any member of the Beales Group or any such mortgage, charge or othersecurity interest (whenever created, arising or having arisen) becomingenforceable; (iii) any such arrangement, agreement, lease, licence, franchise, permit orother instrument being terminated or the rights, liabilities, obligations orinterests of any member of the Beales Group therein being adversely modified oradversely affected, or any material obligation or liability arising or anyadverse action being taken or arising thereunder; (iv) any liability of any member of the Beales Group to make any materialseverance, termination, bonus or other payment to any of its directors or otherofficers; (v) the rights, liabilities, obligations, interests or business of anymember of the Beales Group under any such arrangement, agreement, lease,licence, franchise, permit or other instrument, or the interests or business ofany member of the Beales Group in or with any other person, body, firm orcompany (or any agreement or arrangement relating to any such interests orbusiness) being, or becoming capable of being, terminated, or materially andadversely modified or affected or any onerous obligation or liability arisingor any materially adverse action being taken thereunder; (vi) any member of the Beales Group ceasing to be able to carry onbusiness 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 Beales Group being materially prejudiced or adverselyaffected; (viii) any material asset or interest of any member of the Beales Groupbeing or falling to be capable of being disposed of or charged (otherwise thanin the ordinary course of business) or ceasing to be available to any member ofthe Beales Group or any right arising under which any such asset or interestcould be required to be disposed of or charged or could cease to be availableto any member of the Beales Group; (ix) the creation or acceleration of any material liability (actual orcontingent) by any member of the Beales Group other than trade creditors orother liabilities incurred in the ordinary course of business; or (x) any material adverse change in the ownership or use of anyintellectual property rights owned or used by any member of the Beales Group, and no event having occurred which, under any provision of any arrangement,agreement, lease, licence, franchise, permit or other instrument to which anymember of the Beales Group is a party or by or to which any such member or anyof its assets are bound, entitled or subject, would be expected to result inany of the events or circumstances as are referred to in Conditions (d)(i) to(x) (in each case, to an extent which is material in the context of the BealesGroup, taken as a whole). Certain events occurring since 2 November 2013 except as disclosed in Beales' annual report and accounts for the year ended 2November 2013, or as otherwise publicly announced by Beales on or prior to 16January 2015 through a Regulatory Information Service or as disclosed inwriting to English Rose or its professional advisers, no member of the BealesGroup having since 2 November 2013: (i) issued or agreed to issue, or authorised or proposed or announced itsintention to authorise or propose the issue of, additional shares of any classor securities or securities convertible into, or exchangeable for, or rights,warrants or options to subscribe for or acquire, any such shares, securities orconvertible securities or transferred or sold, or agreed to transfer or sell,or authorised or proposed the transfer or sale of Beales Shares out of treasury(except, where relevant, as between Beales and wholly owned subsidiaries ofBeales or between the wholly owned subsidiaries of Beales); (ii) recommended, declared, paid or made or proposed to recommend,declare, pay or make any bonus, dividend or other distribution (whether payablein cash or otherwise) or dividends (or other distributions whether payable incash or otherwise) lawfully paid or made by any wholly owned subsidiary ofBeales to Beales or any of its wholly owned subsidiaries; (iii) other than pursuant to the Offer (and except for transactions betweenBeales and its wholly owned subsidiaries or between the wholly ownedsubsidiaries of Beales and transactions in the ordinary course of business)implemented, effected, authorised or proposed or announced its intention toimplement, effect, authorise or propose any merger, demerger, reconstruction,amalgamation, scheme, commitment, acquisition or disposal of assets or sharesor loan capital (or the equivalent thereof) in any undertaking or undertakings; (iv) (except for transactions between Beales and its wholly ownedsubsidiaries or between the wholly owned subsidiaries of Beales or otherwise inthe ordinary course of business) disposed of, or transferred, mortgaged orcreated any security interest over any material asset or any right, title orinterest in any material asset or authorised, proposed or announced anyintention to do so; (v) (except for transactions between Beales and its wholly ownedsubsidiaries or between the wholly owned subsidiaries of Beales) issued,authorised or proposed or announced an intention to authorise or propose theissue of, or made any change in or to the terms of, any debentures or, exceptin the ordinary course of business, become subject to any contingent liabilityor incurred or increased any indebtedness which, in any case, is material inthe context of the Beales Group, taken as a whole; (vi) entered into or varied or authorised, proposed or announced itsintention to enter into or vary any material contract, arrangement, agreement,transaction or commitment (whether in respect of capital expenditure orotherwise) except in the ordinary course of business which is of a long term(which shall mean for a fixed term in excess of 12 months and/or not terminableby the giving of 12 months' notice or less), unusual or onerous nature ormagnitude or which involves an obligation of a nature or magnitude which islikely to be restrictive on the business of any member of the Beales Group andwhich, in any case, is material in the context of the Beales Group, taken as awhole; (vii) entered into or varied the terms of, or made any offer (which remainsopen for acceptance) to enter into or vary to a material extent the terms of,any contract, service agreement, commitment or arrangement with any director ofany member of the Beales Group, save as agreed by English Rose; (viii) proposed, agreed to provide or modified to a material extent theterms of any share option scheme, incentive scheme or other benefit relating tothe employment, or termination of employment, of any employee of the BealesGroup save as agreed by English Rose or which is required pursuant to theimplementation of the Offer; (ix) made, or announced any proposal to make, any change or addition to anyretirement, death or disability benefit or any other employment-related benefitof or in respect of any of its directors, employees, former directors or formeremployees; (x) except in relation to changes made or agreed as a result of, orarising from, changes to legislation, made or agreed or consented to: (A) any significant change to: (aa) the terms of the trust deeds (or any othercontractual documentation) or rules constituting the pension scheme(s)established for its directors, employees or their dependants; or (bb) thebenefits which accrue or to the pensions which are payable thereunder; or (cc)the basis on which qualification for, or accrual or entitlement to suchbenefits or pensions are calculated or determined; or (dd) the basis upon whichthe liabilities (including pensions) of such pension schemes are funded ormade; or (B) any change to the trustees including the appointment of a trustcorporation; (xi) purchased, redeemed or repaid or announced any proposal to purchase,redeem or repay any of its own shares or other securities or reduced or, exceptin respect of the matters mentioned in sub-paragraph (i) above, made any otherchange to any part of its share capital, save as agreed by English Rose orwhich is required pursuant to the implementation of the Offer; (xii) waived, compromised or settled any claim (other than in the ordinarycourse of business or between Beales and its wholly owned subsidiaries orbetween the wholly owned subsidiaries of Beales) which is material in thecontext of the Beales Group, taken as a whole; (xiii) terminated, or varied the terms of, any agreement or arrangementbetween any member of the Beales Group and any other person in a manner whichwould have a material adverse effect on the financial position of the BealesGroup, taken as a whole; (xiv) other than pursuant to the Offer and as envisaged in accordance withthe terms of the Offer, made any alteration to its memorandum or articles ofassociation or other incorporation documents, in each case, which is materialin the context of the Offer; (xv) been unable, or admitted in writing that it is unable, to pay itsdebts or commenced negotiations with one or more of its creditors with a viewto rescheduling or restructuring any of its indebtedness or having stopped orsuspended (or threatened to stop or suspend) payment of its debts generally orceased, or threatened to cease, carrying on all, or a substantial part of, itsbusiness, in each case, to an extent which is material in the context of theBeales Group, taken as a whole; (xvi) (other than in respect of a member of the Beales Group which isdormant and was solvent at the relevant time) taken or proposed any steps,corporate action or had any material legal proceedings instituted or threatenedagainst it in relation to the suspension of payments, a moratorium of anyindebtedness, its winding-up (voluntary or otherwise), dissolution,striking-off, reorganisation or for the appointment of a receiver,administrator, manager, administrative receiver, trustee or similar officer ofall, or any material part of, its assets or revenues or any analogous orequivalent steps or proceedings in any jurisdiction or appointed any analogousperson in any jurisdiction or had any such person appointed; (xvii) (except for transactions between Beales and its wholly ownedsubsidiaries or between the wholly owned subsidiaries of Beales) made,authorised, proposed or announced an intention to propose any change in itsloan capital; (xviii) entered into, implemented or authorised the entry into, any jointventure, asset or profit sharing arrangement, partnership or merger of businessor corporate entities, in each case, which is material in the context of theBeales Group, taken as a whole; (xix) save as between Beales and its wholly-owned subsidiaries, granted anylease or material third party rights in respect of any of the leasehold orfreehold property owned or occupied by it or transferred or otherwise disposedof any such property; (xx) entered into any licence or other disposal of intellectual propertyrights of any member of the Beales Group which is material in the context ofthe Beales Group, taken as a whole, and outside the normal course of business; (xxi) taken (or agreed or proposed to take) any action which requires, orwould require, the consent of the Panel or the approval of Beales Shareholdersin general meeting in accordance with, or as contemplated by, Rule 21.1 of theCode; or (xxii) entered into any agreement, arrangement, commitment or contract orpassed 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 ofthe transactions, matters or events referred to in this Condition (e); No adverse change, litigation, regulatory enquiry or similar except as disclosed in Beales' annual report and accounts for the year ended 2November 2013, or as otherwise publicly announced by Beales on or prior to 16January 2015 through a Regulatory Information Service or as disclosed inwriting to English Rose or to its professional advisers, since 2 November 2013there having been: (i) no adverse change, and no circumstance having arisen which would ormight be reasonably expected to result in any adverse change, in the business,assets, financial or trading position or profits or prospects or operationalperformance of any member of the Beales Group which, in any case, is materialin the context of the Beales Group, taken as a whole; (ii) no litigation, arbitration proceedings, prosecution or other legalproceedings (including, without limitation, with regard to intellectualproperty rights owned or used by the Beales Group) having been threatened inwriting, announced or instituted by or against or remaining outstanding againstor in respect of, any member of the Beales Group or to which any member of theBeales Group is, or could reasonably be expected to become, a party (whether asclaimant, defendant or otherwise), in each case, which might reasonably beexpected to have a material adverse effect on the Beales Group, taken as awhole, or in the context of the Offer; (iii) no contingent or other liability having arisen or become apparent toEnglish Rose or increased other than in the ordinary course of business whichwould, or might reasonably be expected to, adversely affect the business,assets, financial or trading position or profits or prospects of any member ofthe Beales Group to an extent which is material in the context of the BealesGroup, taken as a whole, or in the context of the Offer; and (iv) no steps having been taken and no omissions having been made whichare likely to result in the withdrawal, cancellation, termination ormodification of any supplier contract or customer contract or any licence heldby any member of the Beales Group which is necessary for the proper carrying onof its business and the withdrawal, cancellation, termination or modificationof which might reasonably be expected to have a material adverse effect on theBeales Group, taken as a whole, or in the context of the Offer; and 9. No discovery of certain matters regarding information, liabilities andenvironmental issues except as publicly announced by Beales prior to 16 January 2015 through aRegulatory Information Service or disclosed in writing to English Rose or itsprofessional advisers and save as disclosed in the annual report and accountsof Beales for the financial year ended 2 November 2013, English Rose not havingdiscovered: that any financial, business or other information concerning the Beales Grouppublicly announced prior to the date of this announcement or disclosed at anytime in writing to English Rose or to any of its professional advisers by or onbehalf of any member of the Beales Group prior to the date of this announcementis misleading, contains a misrepresentation of any fact or omits to state afact necessary to make that information not misleading, to an extent which, inany such case, is material in the context of the Beales Group, taken as awhole; any information which in the context of the Offer materially affects the importof any such information as is mentioned in Condition (g)(i) which is materialin the context of the Beales Group taken as a whole; that any member of the Beales Group or any partnership, company or other entityin which any member of the Beales Group has a significant economic interest andwhich is not a subsidiary undertaking of Beales is, otherwise than in theordinary course of business, subject to any liability, contingent or otherwise,which is material in the context of the Beales Group, taken as a whole, or inthe context of the Offer; (iv) that any past or present member of the Beales Group has not compliedin any material respect with all applicable legislation, regulations or otherrequirements of any jurisdiction or any authorisations relating to the use,treatment, storage, carriage, disposal, discharge, spillage, release, leak oremission of any waste or hazardous substance or any substance likely to impairthe environment (including any property) or harm human or animal health orotherwise relating to environmental matters or the health and safety of humans,which non-compliance would be likely to give rise to any material liabilityincluding any penalty for non-compliance (whether actual or contingent) on thepart of any member of the Beales Group which, in any case, is material in thecontext of the Beales Group, taken as a whole; (v) that there has been a disposal, discharge, spillage, accumulation,release, leak, emission or the migration, production, supply, treatment,storage, transport or use of any waste or hazardous substance or any substancelikely to impair the environment (including any property) or harm human oranimal health from, any land or other asset now or previously owned, occupiedor made use of by any past or present member of the Beales Group which (whetheror not giving rise to non-compliance with any law or regulation), would belikely to give rise to any material liability (whether actual or contingent,civil or criminal) or cost on the part of any member of the Beales Group whichin any case is material in the context of the Beales Group, taken as a whole; (vi) that there is, or is reasonably likely to be, any material obligationor liability (whether actual or contingent) or requirement to make good,remediate, repair, reinstate or clean up any property or asset currently orpreviously owned, occupied, operated or made use of or controlled by any pastor present member of the Beales Group (or on its behalf), or in which any suchmember may have, or previously have had or be deemed to have had, an interest,under any environmental legislation, common law, regulation, notice, circular,Authorisation or order of any Third Party in any jurisdiction or to contributeto the cost thereof or associated therewith or indemnify any person in relationthereto, which, in any case, is material in the context of the Beales Group,taken as a whole; (vii) that circumstances exist (whether as a result of the making of theOffer or otherwise) which would be reasonably likely to lead to any Third Partyinstituting (or whereby any member of the Beales Group would be likely to berequired to institute) an environmental audit or take any steps which would inany such case be reasonably likely to result in any actual or contingentliability to improve or install new plant or equipment or to make good, repair,reinstate or clean up any property of any description or any asset now orpreviously owned, occupied or made use of by any past or present member of theBeales Group (or on its behalf) or by any person for which a member of theBeales Group is or has been responsible, or in which any such member may have,or previously have had or be deemed to have had, an interest, which, in anycase, is material in the context of the Beales Group, taken as a whole; (viii) that circumstances exist whereby a person has, or class of personshave, or are reasonably likely to have, any legitimate claim or claims againstany member of the Beales Group in respect of any product or process, ormaterials, now or previously manufactured, sold, supplied or carried out by anypast or present member of the Beales Group, which, in each case, is material inthe context of the Beales Group, taken as a whole; or (ix) any member of the Beales Group or any person that performs or hasperformed services for or on behalf of any such company is or has at any timeengaged in any activity, practice or conduct which would constitute an offenceunder the Bribery Act 2010 or any other applicable anti-corruption legislationwhich is material in the context of the Beales Group, taken as a whole. Part B: Certain further terms of the Offer Subject to the requirements of the Panel, English Rose reserves the right towaive, in whole or in part, all or any of the above Conditions 2(a) to (g)(inclusive). Each of Conditions 2(a) to (g) (inclusive) shall be regarded as aseparate Condition and shall not be limited by reference to any othercondition. English Rose shall be under no obligation to waive (if capable of waiver), todetermine to be or remain satisfied or to treat as fulfilled any of Conditions2(a) to (g) (inclusive) by a date earlier than the latest date for thefulfilment of that Condition notwithstanding that the other Conditions may atsuch earlier date have been waived or fulfilled and that there are at suchearlier date no circumstances indicating that any of such Conditions may not becapable of fulfilment. If English Rose is required by the Panel to make an offer for Beales Sharesunder the provisions of Rule 9 of the Code, English Rose may make suchalterations to any of the above Conditions and terms of the Offer as arenecessary to comply with the provisions of that Rule. The Offer will lapse, and will not proceed, if there is a Phase 2 CMA referenceor if Phase 2 European Commission proceedings are initiated or if, following areferral of the Offer by the European Commission under Article 9(1) of theEuropean Council Merger Regulation to a competent authority in the UnitedKingdom, there is a Phase 2 CMA reference, in any such case before 1.00 pm(London time) on the First Closing Date or the time and date on which the Offerbecomes, or is declared, unconditional as to acceptances (whichever is thelater). The availability of the Offer to persons not resident in the United Kingdom maybe affected by the laws of the relevant jurisdictions. Persons who are notresident in the United Kingdom should inform themselves about and observe anyapplicable requirements. The Offer will not be made, directly or indirectly, in or into, or by use ofthe mails of, or by any means or instrumentality (including, withoutlimitation, facsimile transmission, telex, telephone, internet or e-mail) ofinterstate or foreign commerce of, or of any facility of a national securitiesexchange of, any Restricted Jurisdiction and the Offer will not be capable ofacceptance by any such use, means, instrumentality or facility or from withinany Restricted Jurisdiction. Beales Shares which will be acquired under the Offer will be acquired fullypaid and free from all liens, equities, charges, encumbrances, options, rightsof pre-emption and any other third party rights and interests of any nature andtogether with all rights now or hereafter attaching or accruing to them,including voting rights and the right to receive and retain in full alldividends and other distributions (if any) declared, made or paid on or afterthe date of this announcement. Under Rule 13.5 of the Code, English Rose may not invoke a condition to theOffer so as to cause the Offer not to proceed, to lapse or to be withdrawnunless the circumstances which give rise to the right to invoke the conditionare of material significance to English Rose and the Concert Party, taken as awhole in the context of the Offer. The conditions contained in paragraph 1 ofPart A and the fourth paragraph of this Part B are not subject to thisprovision of the Code. The Offer and any acceptances under the Offer and any dispute or claim arisingout of or in connection with them or their subject matter, whether of acontractual or non-contractual nature, will be governed by and construed inaccordance with the laws of England and Wales and will be subject to theexclusive jurisdiction of the English courts and to the Conditions and furtherterms set out in this Appendix I and to be set out in the Offer Document. TheOffer will be subject to the applicable requirements of the Code, the Panel,the London Stock Exchange, the FCA and the Listing Rules. APPENDIX II SOURCES OF INFORMATION AND BASES OF CALCULATION Certain information about the Beales Group has been compiled from publishedsources. Unless otherwise stated: (a) financial information relating to Beales has been extracted or derived without material adjustment from the relevant audited annual accounts and, for the period ended 1 November 2014, from the unaudited year end accounts; (b) references to the value of the Offer are based on there being 20,524,797 Beales Shares in issue; and (c) historical share prices are sourced from the London Stock Exchange website and represent Closing Prices for Beales Shares on the relevant dates. APPENDIX III DEFINITIONS The following definitions apply throughout this announcement unless the contextrequires otherwise. "AIM " the AIM market, a market operated by the London Stock Exchange "ARCS" Anglia Regional Co-Operative Society Limited "Beales" or the Beale PLC, a company registered in England and Wales under"Company" company number 2755125 "Beales Articles" the Articles of Association of Beales "Beales the directors of BealesDirectors" or"Beales Board"or "Board ofBeales" "Beales Group" collectively, Beales and its subsidiaries from time to time "Beales holders of Beales SharesShareholders" "Beales Shares" ordinary shares of 5p each in the capital of Beales "business day" a day (excluding Saturdays, Sundays and public holidays) on which banks are open for business in the City of London "CEC" Central England Co-operative Limited "certificated" or where a share or other security is not in uncertificated form"in certificated (that is, not held in CREST)form" "Closing Price" the closing middle-market price of a Beales Share on a particular day as derived from the Daily Official List "Code" the City Code on Takeovers and Mergers issued by the Panel, as amended from time to time "Collateralised an additional facility to be provided by Wells Fargo CapitalTerm Loan Finance to Beales, on financial terms similar to theFacility" Facility, following the procurement by Portnard of a security deposit of £2.0 million provided as collateral for the Facility "Companies Act" the Companies Act 2006, as amended "Concert Party" English Rose, Portnard, Panther, Maland Pension Fund and Andrew Perloff "Conditions" the conditions of the Offer set out in Part A of Appendix I to this announcement "CREST" the relevant system (as defined in the CREST Regulations) of which Euroclear UK & Ireland Limited is the Operator (as defined in the CREST Regulations) "CREST the Uncertificated Securities Regulations 2001 (SI 2001 No.Regulations" 3755), as amended "Daily Official the Daily Official List of the London Stock ExchangeList" "English Rose" English Rose Enterprises Limited, a company incorporated in England and Wales, with registered number 9327747 "English Rose the directors of English Rose, being Andrew Perloff and SimonDirectors" Peters "Facility" the asset-based lending facility of £12.0 million between Wells Fargo Capital Finance and Beales dated 1 February 2013 "FCA" the UK Financial Conduct Authority "First Closing the date which falls 21 days after the posting of the OfferDate" Document "Form of the form of acceptance and authority relating to the OfferAcceptance" which will, in the case of Beales Shareholders who hold their Beales Shares in certificated form (other than in respect of Beales Shareholders in a Restricted Jurisdiction), accompany the Offer Document "Listing Rules" the rules and regulations made by the UK Listing Authority pursuant to Part IV of the Financial Services and Markets Act 2000, as amended from time to time "London Stock London Stock Exchange plcExchange" "Maland Pension Maland Pension Fund, a pension fund for the sole benefit ofFund" Andrew Perloff "Offer" the recommended cash offer to be made by English Rose at the Offer Price in accordance with Part 28 of the Companies Act to acquire the entire issued and to be issued ordinary share capital of Beales on the terms and subject to the conditions set out in this announcement and to be set out in the Offer Document and, in the case of Beales Shares held in certificated form, the Form of Acceptance and, where the context admits, any subsequent revision, variation, extension or renewal of such offer "Offer Document" the formal offer document to be sent to Beales Shareholders (other than Beales Shareholders in a Restricted Jurisdiction) which will contain, amongst other things, the full terms and conditions of the Offer "Offer Period" the period commencing on 19 January 2015 and ending on the earlier of the date on which the Offer becomes or is declared unconditional as to acceptances and/or the date on which the Offer lapses or is withdrawn (or such other date as the Panel may decide) "Offer Price" 6p per Beales Share "Official List" the daily official list maintained by the UK Listing Authority "Opening Position an announcement containing details of interests or shortDisclosure" positions in, or rights to subscribe for, any relevant securities of a party to the Offer if the person concerned has such a position as is described in Rule 8 of the Code "Panel" or the Panel on Takeovers and Mergers"Takeover Panel" "Panther" Panther Securities plc, a company whose shares are quoted on AIM "Portnard" Portnard Limited, a company which is owned by Andrew Perloff and family trusts of Andrew and Harold Perloff, Andrew Perloff's brother "Pounds Sterling" UK pounds sterling (and references to "p" shall be construedor "£" accordingly) "Preference the 8,500,000 redeemable preference shares of £1 each issuedShares" by Beales in May 2011 of which 7,983,953 remain unredeemed at the date of this announcement "PwC" PricewaterhouseCoopers LLP "Regulatory a regulatory information service approved by the FCA and thatInformation is on the list of regulatory information service providersService" maintained by it "Restricted any jurisdiction where local laws or regulations may resultJurisdiction" in a significant risk of civil, regulatory or criminal exposure for English Rose, any parties acting in concert with it, any of their respective directors or Beales if information or documentation concerning the Offer is sent or made available to Beales Shareholders in that jurisdiction "Sanlam Sanlam Securities UK Limited, financial adviser to EnglishSecurities" Rose "Smith Square Smith Square Partners LLP, financial adviser to BealesPartners" "Term Loan" the £2.5 million loan facility between J E Beale Plc and ARCS, of which £1.0 million remains outstanding at the date of this announcement "United Kingdom" the United Kingdom of Great Britain and Northern Irelandor "UK" "UK Listing the FCA acting in its capacity as the competent authority forAuthority" listing in the United Kingdom "Wells Fargo Wells Fargo Capital Finance, a trading name of BurdaleCapital Finance" Financial Limited For the purposes of this announcement, "subsidiary", "subsidiary undertaking","undertaking" and "associated undertaking" have the respective meanings giventhereto by the Companies Act. All the times referred to in this announcement are London times unlessotherwise stated. All references to legislation in this announcement are to English legislationunless the contrary is indicated. Any reference to any provision of anylegislation shall include any amendment, modification, re-enactment orextension thereof, save to the extent that any such amendment, modification,re-enactment or extension imposes any new or extended liability or restrictionon a party.

References to the singular include the plural and vice versa.