Grainger plc Regulatory News (GRI)

THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

27 May 2011

Grainger plc ("Grainger"/ the "Company")

Proposed purchase of 1 in every 238 ordinary shares of 5 pence each in the Company (the "Ordinary Shares") at 149 pence per share by way of a tender offer (the "Tender Offer") and Notice of General Meeting

On 19 May 2011, the Board of Grainger announced in its interim results for the six months ended 31 March 2011, that the Company intended to offer to purchase 1 in every 238 Ordinary Shares by way of a Tender Offer at a price of 149 pence per share.

Grainger has today posted a circular dated 27 May 2011 (the "Circular") to Qualifying Shareholders (as defined below) in relation to the Tender Offer on the terms set out above. If the maximum number of 1,749,331 Ordinary Shares under the Tender Offer is acquired, this will result in an amount of £2.6 million being paid by the Company to Qualifying Shareholders.

Shareholder approval to the Tender Offer is required and accordingly a general meeting is being convened at the Company's offices at 161 Brompton Road, London SW3 1QP at 12.00 p.m. on 13 June 2011 (the "General Meeting"). The Notice of General Meeting is set out at the end of the Circular.

The Tender Offer is open to all shareholders on the Company's register of members at 6.00 p.m. on 10 June 2011 (the "Record Date"), who hold at least 238 Ordinary Shares and who do not have a registered address in Canada, Australia, Japan or the Republic of South Africa ("Qualifying Shareholders"). Each Qualifying Shareholder will be entitled to sell under the Tender Offer, a maximum of 1 Ordinary Share for every 238 Ordinary Shares registered in his/her name on the Record Date, rounded down to the nearest whole number of Ordinary Shares ("Tender Offer Entitlement"). Qualifying Shareholders may participate in the Tender Offer by tendering either all or a proportion of their Tender Offer Entitlement. If the aggregate number of Ordinary Shares validly tendered is less than 1,749,331 Ordinary Shares the difference between the amount paid out by the Company under the Tender Offer in respect of those Ordinary Shares validly tendered and £2.6 million will be used by the Company to make market purchases (within the meaning of section 693(4) of the Companies Act 2006) pursuant to the existing authority granted at the Annual General Meeting of the Company held on 9 February 2011. The Ordinary Shares purchased under the Tender Offer will be held in treasury.

A copy of the Circular has been submitted to the UK Listing Authority's National Storage Mechanism and will shortly be available at www.hemscott.com/nsm.do.

Full details of the Tender Offer are contained in the Circular which will shortly be available on the Company's website at www.graingerplc.co.uk in the Investor Relations section.

For further information:

J.P. Morgan Securities Limited and Brewin Dolphin Ltd are jointly acting for Grainger in relation to the Tender Offer and no one else and will not be responsible to anyone other than Grainger for providing the protections afforded to the customers of J.P. Morgan Securities Limited and Brewin Dolphin Ltd (as applicable) nor for providing any advice in relation to the Tender Offer.

This announcement, which has been issued by the Company and is the sole responsibility of the Company, has been approved for the purposes of Section 21 of the Financial Services and Markets Act 2000 of the United Kingdom by J.P. Morgan Securities Limited, 10 Aldermanbury, London EC2V 7RF and Brewin Dolphin Ltd, 12 Smithfield Street, London, EC1A 9BD, who are authorised and regulated in the United Kingdom by the Financial Services Authority.

This Announcement does not constitute, or form part of, any offer for or invitation to sell or purchase any securities, or any solicitation of any offer for, securities in any jurisdiction. Any acceptance or other response to the Tender Offer should be made only on the basis of information contained in or referred to in the Circular which will shortly be available on the Company's website at www.graingerplc.co.uk in the Investor Relations section. The Circular will contain important information, including the full terms and conditions of the Tender Offer and how it may be accepted, which shareholders are urged to read carefully.

The Tender Offer is not being made in or into, and is not capable of acceptance in or from, Canada, Australia, Japan or the Republic of South Africa. Custodians, nominees and trustees should observe these restrictions and should not send or distribute documents in or into Canada, Australia, Japan or the Republic of South Africa.

Notice to US Shareholders

The Tender Offer is being made for the securities of a UK company and is subject to UK disclosure requirements, which are different from those of the United States. The settlement procedure with respect to the Tender Offer will be consistent with UK practice, which differs from US domestic tender offer procedures in certain material respects, particularly with regard to date of payment. The Tender Offer will be made in the United States pursuant to Section 14(e) and Regulation 14E under the US Exchange Act and otherwise in accordance with the requirements of the Act. Accordingly, the Tender Offer will be subject to disclosure and other procedural requirements, including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments that are different from those applicable under US domestic tender offer procedures and law.

The receipt of cash pursuant to the Tender Offer by a US Shareholder may be a taxable transaction for US federal income tax purposes and under applicable US state and local, as well as foreign and other tax laws. Each Shareholder is urged to consult his independent professional adviser immediately regarding the tax consequences of acceptance of the Tender Offer.

It may be difficult for US Shareholders to enforce their rights and any claim arising out of the US federal securities laws, since the Company is located in a foreign country, and all of its officers and directors are residents of a foreign country. US Shareholders may not be able to sue a foreign company or its officers or directors in a foreign court for violations of the US securities laws. Further, it may be difficult to compel a foreign company and its affiliates to subject themselves to a US court's judgement. Whether located in the US or elsewhere, Shareholders will receive their cash consideration in pounds sterling.

In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act, the Company or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, Ordinary Shares outside the United States, other than pursuant to the Tender Offer, before or during the period in which the Tender Offer remains open for acceptance. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will only be disclosed as required in the UK, will be reported to a Regulatory Information Service of the UK Listing Authority and will be available on the London Stock Exchange website, www.londonstockexchange.com.

The Tender Offer in the United States is made solely by the Company. While the Tender Offer is being made available to Shareholders in the United States, the right to tender Ordinary Shares is not being made available in any jurisdiction in the United States in which the making of the Tender Offer or the right to tender Ordinary Shares would not be in compliance with the laws of such jurisdiction.

Words capitalised herein but not defined shall have the meaning given to them in the Circular.

Notes to Editors

Grainger plc is the largest residential property owner and manager traded on the London Stock Exchange. Our business activities in the UK and Germany cover ownership, trading, fund management, property management and development of residential property. Grainger is also a leading provider of retirement housing solutions, including home reversion products through Bridgewater Equity Release. We have approximately £2.1 billion of wholly-owned property assets and £2.8 billion of assets under management.