Victoria Regulatory News (VCP)

"International designers and manufacturers of innovative quality floorcoverings"

Issued by Citigate Dewe Rogerson

Date: Friday 17 February 2012

Immediate Release

Initial Response relating to the announcement released by New Fortress Finance Holdings Limited and Ian Alexander Anton

on 14 February 2012 

The Board of Victoria PLC (the "Company" or "Victoria") notes the RNS announcement made by Ian Alexander Anton and New Fortress Finance Holdings Limited on 14 February 2012 containing their statement (the "Requisitioners' Statement"), which was posted to the Company's shareholders the same day, setting out the Requisitioners' detailed response to the Company's circular to shareholders dated 7 February 2012.

The Board of Victoria will be writing to all shareholders shortly with its detailed comments upon the Requisitioners' Statement. However, for the time being, the Board would like to place on record that it strongly refutes much of the content of both the Requisitioners' RNS announcement and the Requisitioners' Statement, which both contain statements that are misleading. The Board notes that the Requisitioners continue to suggest that they only seek to replace the two Non-executive Directors of the Board with their four proposed Directors to give themselves Board control. However, the Board considers the hostile conduct of the Consortium generally, combined with their aggressive statements about the Board as a whole, to be irreconcilable with their suggestion that the proposed directors can work together harmoniously with the Executive Directors. The Requisitioners are also repeatedly threatening Directors via legal letters of the actions that they may take against them personally.

Since the time of the initial announcement made by the Company on 21 December 2011 providing details of the demands of the Requisitioners for the changes to the composition of the Board, the Board has been made aware by various stakeholders, including employees, suppliers and customers, that they have concerns regarding the proposed changes. The Board has a duty under the Companies Act 2006 to act in a way that it considers in good faith would be most likely to promote the success of the Company for the benefit of its shareholders as a whole and not just the Requisitioners and the other minority shareholders who may currently be supporting them (the "Consortium"). It must also take into account the interests of other stakeholders, including employees, customers and suppliers and the likely consequences of the passing of the Resolutions in the long term.

Certain shareholders would prefer the option of realising their investment in the Company in the short term. In line with its duty to act in a way which it considers would be most likely to promote the success of the Company for the benefit of shareholders as a whole, the Board placed the Company and its operating businesses into the formal sales process announced on 13 January 2012 so that shareholders would have a real choice. Shareholders will either be offered financial value for passing control of the business through the formal sales process or the opportunity of supporting the Board's current transformational strategy. Of course, the Company can only be sold by shareholders agreeing to accept an offer for their shares but the Board has a duty to consider the wishes of shareholders who would like that choice.

The Board has submitted in writing to the Consortium and its advisers a number of concerns and questions which are required to be addressed by the Consortium and wholly necessary to enable the Board to responsibly and professionally address all shareholders in light of the dual actions currently underway.  

Shareholders are respectfully urged to support the current Board.

Shareholders should also seek independent financial and legal advice which the Board considers will support the Board's stance.

Shareholders are advised by the Board NOT to undertake to support the Requisitioners' resolutions, and vote against the resolutions.

Do not abstain - shareholders are urged to vote against the resolutions by Friday 2 March, the final date by which to lodge proxy votes, or to attend the general meeting and vote in person.