REG - Sainsbury(J) PLC Home Retail Grp Plc - Recommended Offer for Home Retail Group PLC <Origin Href="QuoteRef">HOME.L</Origin> <Origin Href="QuoteRef">SBRY.L</Origin> - Part 3

J SainsburyAnnouncement

01/04/2016 07:06

- Part 3: For the preceding part double click  ID:nRSA8096Tb 

This announcement (including information incorporated by reference in this
announcement), oral statements made regarding the Acquisition, and other
information published by Sainsbury's and Home Retail Group plc contain
statements which are, or may be deemed to be, "forward-looking statements".
All statements, other than statements of historical fact are, or may be deemed
to be, forward-looking statements. Forward-looking statements are prospective
in nature and are not based on historical facts, but rather on current
expectations and projections of the management of Sainsbury's and Home Retail
Group plc about future events, and are therefore subject to risks and
uncertainties which could cause actual results, performance or events to
differ materially from those expressed or implied by the forward-looking
statements. The forward-looking statements contained in this announcement
include statements relating to the expected effects of the Acquisition on the
Sainsbury's Group, the Home Retail Group and the Combined Group, the expected
timing and scope of the Acquisition and other statements other than historical
facts. Often, but not always, forward-looking statements can be identified by
the use of forward-looking words such as "plan", "expect", "budget", "target",
"aim", "scheduled", "estimate", "forecast", "intend", "anticipate", "assume"
or "believe", or variations of such words and phrases or statements that
certain actions, events or results "may", "could", "should", "would", "might"
or "will" be taken, occur or be achieved. Although Sainsbury's and Home Retail
Group plc believe that the expectations reflected in such forward-looking
statements are reasonable, Sainsbury's and Home Retail Group plc can give no
assurance that such expectations will prove to be correct. By their nature,
forward-looking statements involve risks (known and unknown) and uncertainties
(and other factors that are in many cases beyond the control of Sainsbury's
and/or Home Retail Group plc) because they relate to events and depend on
circumstances that may or may not occur in the future. 
 
There are a number of factors that could affect the future operations of the
Sainsbury's Group, the Home Retail Group and/or the Combined Group and that
could cause actual results and developments to differ materially from those
expressed or implied by such forward-looking statements. These factors include
the satisfaction of the Conditions, as well as additional factors, such as:
domestic and global business and economic conditions; asset prices; market
related risks such as fluctuations in interest rates and exchange rates,
industry trends, competition, changes in government and regulation, changes in
the policies and actions of governments and/or regulatory authorities
(including changes related to capital and tax), changes in political and
economic stability, disruption in business operations due to reorganisation
activities, interest rate, inflation and currency fluctuations, the timing
impact and other uncertainties of future or planned acquisitions or disposals
or combinations, the inability of the Combined Group to realise successfully
any anticipated synergy benefits when the Acquisition is implemented, the
inability of the Sainsbury's Group to integrate successfully the Home Retail
Group's operations and programmes when the Acquisition is implemented, the
Combined Group incurring and/or experiencing unanticipated costs and/or
delays, or difficulties relating to the Acquisition when the Acquisition is
implemented. Other unknown or unpredictable factors could affect future
operations and/or cause actual results to differ materially from those in the
forward-looking statements. Such forward-looking statements should therefore
be construed in the light of such factors. 
 
Each forward-looking statement speaks only as of the date of this
announcement. Neither Sainsbury's nor Home Retail Group plc, nor any of their
respective associates or directors, officers or advisers, provides any
representation, assurance or guarantee that the occurrence of the events
expressed or implied in any forward-looking statements in this announcement
will actually occur. All forward-looking statements contained in this
announcement are expressly qualified in their entirety by the cautionary
statements contained or referred to in this section. Readers are cautioned not
to place undue reliance on these forward-looking statements. Other than in
accordance with their legal or regulatory obligations (including under the
Takeover Code, the Listing Rules and the Disclosure and Transparency Rules of
the FCA), neither the Sainsbury's Group nor the Home Retail Group is under or
undertakes any obligation, and each of the foregoing expressly disclaims any
intention or obligation, to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise. 
 
No profit forecasts or estimates 
 
Unless expressly stated otherwise, no statement in this announcement
(including any statement of estimated synergies) is intended as a profit
forecast or a profit estimate and no statement in this announcement should be
interpreted to mean that earnings per Sainsbury's Share or Home Retail Group
Share for the current or future financial years would necessarily match or
exceed the historical published earnings per Sainsbury's Share or Home Retail
Group Share. 
 
Disclosure requirements of the Takeover Code 
 
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per
cent. or more of any class of relevant securities of an offeree company or of
any securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the Offer Period and, if later, following the announcement in
which any securities exchange offeror is first identified. 
 
An Opening Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant securities
of each of (i) the offeree company and (ii) any securities exchange
offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a)
applies must be made by no later than 3.30 pm (London time) on the 10th
Business Day following the commencement of the Offer Period and, if
appropriate, by no later than 3.30 pm (London time) on the 10th Business Day
following the announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of the
offeree company or of a securities exchange offeror prior to the deadline for
making an Opening Position Disclosure must instead make a Dealing Disclosure. 
 
Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a Dealing
Disclosure if the person deals in any relevant securities of the offeree
company or of any securities exchange offeror. A Dealing Disclosure must
contain details of the dealing concerned and of the person's interests and
short positions in, and rights to subscribe for, any relevant securities of
each of (i) the offeree company and (ii) any securities exchange offeror(s),
save to the extent that these details have previously been disclosed under
Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be
made by no later than 3.30 pm (London time) on the Business Day following the
date of the relevant dealing. 
 
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3. 
 
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4). 
 
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Takeover Panel's website
atwww.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the Offer Period commenced and when any offeror was
first identified. 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 to
make an Opening Position Disclosure or a Dealing Disclosure. 
 
Publication on website and availability of hard copies 
 
A copy of this announcement will be made available, subject to certain
restrictions relating to persons resident in or subject to laws and/or
regulations of Restricted Jurisdictions, on the Sainsbury's Group's website
athttp://www.j-sainsbury.co.uk/investor-centre/disclaimer/and the Home Retail
Group's website
athttps://www.homeretailgroup.com/investor-centre/sainsburys-offer/by no later
than 12 noon (London time) on the Business Day following this announcement.
For the avoidance of doubt, neither the contents of those websites nor the
contents of any website accessible from hyperlinks on those websites (or any
other websites referred to in this announcement) are incorporated into, or
form part of, this announcement. 
 
Sainsbury's Shareholders and Home Retail Group Shareholders may request a hard
copy of this announcement by email atShareholder.Services@sainsburys.co.ukor
in writing at Shareholder Services, 3rd Floor, J Sainsbury plc, 33 Holborn,
London EC1N 2HT (in the case of Sainsbury's Shareholders) or the Company
Secretary of Home Retail Group plc in writing at 489-499 Avebury Boulevard,
Milton Keynes MK9 2NWor Capita Asset Services in writing at 40 Dukes Place,
London EC3A 7NH (in the case of Home Retail Group Shareholders), in each case
during business hours. Sainsbury's Shareholders and Home Retail Group
Shareholders may also request that all future documents, announcements and
information sent to them in relation to the Acquisition be in hard copy form.
A hard copy of such document, announcement (including this announcement) or
information will not be sent unless so requested. 
 
Information relating to Home Retail Group Shareholders 
 
Please be aware that addresses, electronic addresses and certain other
information provided by Home Retail Group Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Home Retail Group plc may be provided to Sainsbury's
during the Offer Period as required under Section 4 of Appendix 4 of the
Takeover Code. 
 
Rounding 
 
Certain figures included in this announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of the figures that precede them. 
 
Appendix 1
CONDITIONS AND FURTHER TERMS OF THE PROPOSED ACQUISITION 
 
The Acquisition will be subject to the applicable requirements of the Takeover
Code, the Panel, the London Stock Exchange and the FCA. The Scheme will be
governed by English law and will be subject to the exclusive jurisdiction of
the English courts.  In addition the Acquisition will be subject to the terms
and Conditions set out below and to the full terms and conditions which will
be set out in the Scheme Document. 
 
Each Condition shall be regarded as a separate Condition (as the case may be)
and shall not be limited by reference to any other Condition. 
 
1.         Conditions of the Acquisition 
 
(a)        The Acquisition will be conditional upon the Scheme and the New
TopCo Capital Reduction becoming unconditional and Effective, and all other
Conditions being fulfilled or (if capable of waiver) waived, subject to the
Takeover Code, by no later than 11.59 p.m. on the Long Stop Date or such later
date as Sainsbury's and Home Retail Group plc may agree and (if required) the
Panel and the Court allow; 
 
Scheme approval 
 
(b)        The Scheme will be conditional upon: 
 
(i)         (I) the approval by a majority in number of Home Retail Group
Shareholders who are on the register of members of Home Retail Group plc at
the Voting Record Time, present and voting, whether in person or by proxy, at
the Court Meeting and at any separate class meeting which may be required (or
any adjournment thereof), and who represent not less than 75 per cent. in
value of the Home Retail Group Shares voted by such Home Retail Group
Shareholders and (II) such Court Meeting (or any adjournment thereof) being
held on or before the 22nd day after the expected date of the Court Meeting to
be set out in the Scheme Document in due course (or such later date as
Sainsbury's and Home Retail Group plc may agree and the Court may allow); 
 
(ii)        (I) all resolutions required to approve and implement the Scheme
and the Acquisition and to approve certain related matters being duly passed
by the requisite majorities at the Home Retail Group General Meeting (or any
adjournment thereof), and (II) the Home Retail Group General Meeting (or any
adjournment thereof) being held on or before the 22nd day after the expected
date of the Home Retail Group General Meeting to be set out in the Scheme
Document in due course (or such later date as Sainsbury's and Home Retail
Group plc may agree); and 
 
(iii)       (I) the sanction of the Scheme by the Court (with or without
modification (but subject to such modification being acceptable to Sainsbury's
and Home Retail Group plc)) and the delivery of the office copy of the Scheme
Court Order to the Registrar of Companies, and (II) the Court hearing to
sanction the Scheme being held on or before the 22nd day after the expected
date of the Court sanction to be set out in the Scheme Document in due course
(or such later date as Sainsbury's and Home Retail Group plc may agree and the
Court may allow). 
 
New TopCo Capital Reduction 
 
(c)        (I) the confirmation of the New TopCo Capital Reduction by the
Court and the office copy of the Reduction Court Order having been delivered
to and registered by the Registrar of Companies, and (II) the Court hearing to
confirm the New TopCo Capital Reduction being held on or before the 22nd day
after the expected date of such Court hearing to be set out in the Scheme
Document in due course (or such later date as Sainsbury's and Home Retail
Group plc may agree and the Court may allow); 
 
In addition, Home Retail Group plc and Sainsbury's have agreed that, subject
to the requirements of the Panel in accordance with the Takeover Code, the
Acquisition will also be conditional upon, and accordingly the necessary
actions to make the Scheme Effective will only be taken on, the satisfaction
or, where relevant, waiver of the following Conditions: 
 
Admission of New Sainsbury's Shares 
 
(d)        (I) the FCA having acknowledged to Sainsbury's or its agent (and
such acknowledgement not having been withdrawn) that the application for the
admission of the New Sainsbury's Shares to the Official List with a premium
listing has been approved and (after satisfaction of any conditions to which
such approval is expressed to be subject ("listing conditions")) admission
will become effective as soon as a dealing notice has been issued by the FCA
and any listing conditions having been satisfied; and (II) the London Stock
Exchange having acknowledged to Sainsbury's or its agent (and such
acknowledgement not having been withdrawn) that the New Sainsbury's Shares
will be admitted to trading; 
 
Regulatory conditions 
 
(e)        the FCA giving notice in writing pursuant to section 189(4)(a) of
FSMA, in terms reasonably satisfactory to Sainsbury's, of its approval (or
being treated as having given such approval under section 189(6) of FSMA) in
respect of each person (whether or not a member of the Wider Sainsbury's
Group) who will acquire control or (if applicable) increase control over (as
defined in sections 181 and 182 of FSMA) any member of the Wider Home Retail
Control Group which is (or shall be as at Completion) a UK authorised person
(as defined in section 191G(1) of FSMA), and which in either case would result
from or in connection with or is contemplated by the implementation of the
Scheme or the Acquisition and the FCA not having cancelled or varied, and not
having notified (or intimated that it may notify) any proposal to cancel or
vary, any permission (within the meaning of FSMA) held by any such authorised
person at the date of the Original Announcement; 
 
(f)         the GFSC either giving notice in writing pursuant to The Insurance
Business (Bailiwick of Guernsey) Law, 2002 (the "Insurance Law"), in terms
reasonably satisfactory to Sainsbury's, of no objection or being deemed to
have given such no objection pursuant to the Insurance Law, as a result of or
in connection with or is contemplated by the implementation of the Scheme or
the Acquisition in respect of any member of the Wider Home Retail Control
Group which is (or shall be as at Completion) a GFSC licensed entity, and the
GFSC not having cancelled, varied or imposed conditions on, and not having
notified (or intimated that it may notify) any proposal to cancel, vary or
impose conditions on, the terms of any licence held by any such GFSC licensed
entity at the date of the Original Announcement; 
 
Merger control 
 
(g)        the CMA deciding not to make a Phase 2 CMA Reference in respect of
the Acquisition; 
 
Other Third Party clearances 
 
(h)        other than in respect of Conditions 1(e) to 1(g), no central bank,
government or governmental, quasi-governmental, supranational, statutory,
regulatory, environmental, administrative, fiscal or investigative body,
court, trade agency, association, institution, environmental body, employee
representative body or any other body or person whatsoever in any jurisdiction
(each a "Third Party") having given notice of a decision to take, institute,
implement or threaten any action, proceeding, suit, investigation, enquiry or
reference, or having required any action to be taken or otherwise having done
anything or having enacted, made or proposed any statute, regulation,
decision, order or change to published practice and there not continuing to be
outstanding any statute, regulation, decision or order which would or might
reasonably be expected to: 
 
(i)         make the Acquisition, its implementation or the acquisition or
proposed acquisition of any shares or other securities in, or control or
management of, any member of the Wider Home Retail Group by any member of the
Wider Sainsbury's Group void, illegal and/or unenforceable under the laws of
any relevant jurisdiction, or otherwise directly or indirectly prevent,
prohibit, or materially restrain, restrict, impede, challenge, delay or
otherwise interfere with the implementation of, or impose additional material
conditions or obligations with respect to, the Acquisition or the acquisition
of any shares or other securities in, or control or management of, any member
of the Wider Home Retail Group by any member of the Wider Sainsbury's Group or
require amendment of the Acquisition; 
 
(ii)        require, prevent or delay the divestiture or alter the terms
envisaged for such divestiture by any member of the Wider Sainsbury's Group or
by any member of the Wider Home Retail Group of all or any part of their
businesses, assets or property or impose any limitation on the ability of all
or any of them to conduct their businesses (or any part thereof) or to own,
control or manage any of their assets or properties (or any part thereof) in
each case to an extent which is material in the context of the Wider Home
Retail Group taken as a whole or the Wider Sainsbury's Group taken as a whole
or in the context of the Acquisition (as the case may be); 
 
(iii)       impose any material limitation on, or result in a material delay
in, the ability of any member of the Wider Sainsbury's Group directly or
indirectly to acquire or hold or to exercise effectively all or any rights of
ownership in respect of shares or other securities in Home Retail Group plc
(or any member of the Wider Home Retail Group) or on the ability of any member
of the Wider Home Retail Group or any member of the Wider Sainsbury's Group
directly or indirectly to hold or exercise effectively any rights of ownership
in respect of shares or other securities (or the equivalent) in, or to
exercise management control over, any member of the Wider Home Retail Group in
each case to an extent which is material in the context of the Wider Home
Retail Group taken as a whole or the Wider Sainsbury's Group taken as a whole
or in the context of the Acquisition (as the case may be); 
 
(iv)       other than pursuant to the implementation of the Acquisition,
require any member of the Wider Sainsbury's Group or the Wider Home Retail
Group to acquire or offer to acquire any shares, other securities (or the
equivalent) or interest in any member of the Wider Home Retail Group or any
asset owned by any third party which is material in the context of the Wider
Home Retail Group or the Wider Sainsbury's Group, in either case taken as a
whole or in the context of the Acquisition; 
 
(v)        require, prevent or delay a divestiture by any member of the Wider
Sainsbury's Group of any shares or other securities (or the equivalent) in any
member of the Wider Home Retail Group to an extent which is material in the
context of the Wider Home Retail Group or the Wider Sainsbury's Group, in
either case taken as a whole or in the context of the Acquisition; 
 
(vi)       result in any member of the Wider Home Retail Group ceasing to be
able to carry on business under any name under which it presently carries on
business to an extent which is material in the context of the Wider Home
Retail Group taken as a whole or in the context of the Acquisition; 
 
(vii)      impose any limitation on the ability of any member of the Wider
Sainsbury's Group or any member of the Wider Home Retail Group to conduct,
integrate or co-ordinate all or any part of their respective businesses with
all or any part of the business of any other member of the Wider Sainsbury's
Group and/or the Wider Home Retail Group in each case in a manner which is
materially adverse to the Wider Sainsbury's Group  taken as a whole and/or the
Wider Home Retail Group, taken as a whole or in the context of the
Acquisition; or 
 
(viii)      except as Fairly Disclosed, otherwise affect the business, assets,
value, profits, prospects or operational performance of any member of the
Wider Home Retail Group or any member of the Wider Sainsbury's Group in each
case in a manner which is adverse to and material in the context of the Wider
Home Retail Group taken as a whole or of the obligations of any member of the
Wider Sainsbury's Group in connection with the financing of the Acquisition or
in the context of the Acquisition; 
 
and all applicable waiting and other time periods (including any extensions
thereof) during which any such Third Party could decide to take, institute,
implement or threaten any such action, proceeding, suit, investigation,
enquiry or reference or take any other step under the laws of any jurisdiction
in respect of the Acquisition or proposed acquisition of any Home Retail Group
Shares or otherwise intervene having expired, lapsed, or been terminated; 
 
(i)         no material undertakings or assurances being sought from any
member of the Wider Sainsbury's Group or any member of the Wider Home Retail
Group by the Secretary of State or any other Third Party, except on terms
reasonably satisfactory to Sainsbury's; 
 
(j)         other than in respect of Conditions 1(e) to 1(g), all material
notifications, filings or applications which are necessary or appropriate
having been made in connection with the Acquisition and all necessary waiting
and other time periods (including any extensions thereof) under any applicable
legislation or regulation of any jurisdiction having expired, lapsed or been
terminated (as appropriate) and all statutory and regulatory obligations in
any jurisdiction having been complied with and all Authorisations which are
necessary or appropriate in any jurisdiction for or in respect of the
Acquisition or the proposed acquisition of any shares or other securities in,
or control of, Home Retail Group plc by any member of the Wider Sainsbury's
Group having been obtained in terms and in a form reasonably satisfactory to
Sainsbury's from all appropriate Third Parties or (without prejudice to the
generality of the foregoing) from any person or bodies with whom any member of
the Wider Home Retail Group or the Wider Sainsbury's Group has entered into
contractual arrangements and all such Authorisations which are necessary or
appropriate to carry on the business of any member of the Wider Home Retail
Group in any jurisdiction having been obtained in each case where the direct
consequence of a failure to make such notification or filing or to wait for
the expiry, lapse or termination of any such waiting or other time period or
to comply with such obligation or obtain such Authorisation would be unlawful
in any relevant jurisdiction or have a material adverse effect on the Wider
Home Retail Group or the Wider Sainsbury's Group in each case taken as a whole
or the ability of Sainsbury's to implement the Acquisition and all such
Authorisations remaining in full force and effect at the time at which the
Acquisition becomes otherwise unconditional in all respects and there being no
notice or intimation of an intention to revoke, suspend, restrict, modify or
not to renew such Authorisations; 
 
(k)        no temporary restraining order, preliminary or permanent
injunction, preliminary or permanent enjoinment, or other order threatened or
issued and being in effect by a court or other Third Party which has the
effect of making the Acquisition or any acquisition or proposed acquisition of
any shares or other securities or control or management of, any member of the
Wider Home Retail Group by any member of the Wider Sainsbury's Group, or the
implementation of either of them, void, voidable, illegal and/or unenforceable
under the laws of any relevant jurisdiction, or otherwise directly or
indirectly prohibiting, preventing, restraining, restricting, delaying or
otherwise interfering with the consummation or the approval of the Acquisition
or any matter arising from the proposed acquisition of any shares or other
securities in, or control or management of, any member of the Wider Home
Retail Group by any member of the Wider Sainsbury's Group, in each case in a
manner which is adverse to and material in the context of the Acquisition; 
 
Confirmation of absence of adverse circumstances 
 
(l)         except as Fairly Disclosed, there being no provision of any
arrangement, agreement, licence, permit, franchise, lease or other instrument
to which any member of the Wider Home Retail Group is a party or by or to
which any such member or any of its assets is or may be bound, entitled or be
subject or any event or circumstance which, as a consequence of the
Acquisition or the proposed acquisition by any member of the Wider Sainsbury's
Group of any shares or other securities in Home Retail Group plc or because of
a change in the control or management of any member of the Wider Home Retail
Group or otherwise, would or might reasonably be expected to result in, in
each case to an extent which is material in the context of the Wider Home
Retail Group taken as a whole or in the context of the Acquisition or to the
obligations of any member of the Wider Sainsbury's Group in connection with
the financing of the Acquisition: 
 
(i)         any monies borrowed by, or any other indebtedness, actual or
contingent of, or any grant available to, any member of the Wider Home Retail
Group being or becoming repayable, or capable of being declared repayable,
immediately or prior to its or their stated maturity date or repayment date,
or the ability of any such member to borrow monies or incur any indebtedness
being withdrawn or inhibited or being capable of becoming or being withdrawn
or inhibited; 
 
(ii)        the rights, liabilities, obligations, interests or business of any
member of the Wider Home Retail Group or any member of the Wider Sainsbury's
Group under any such arrangement, agreement, licence, permit, lease or
instrument or the interests or business of any member of the Wider Home Retail
Group or any member of the Wider Sainsbury's Group in or with any other firm
or company or body or person (or any agreement or arrangement relating to any
such business or interests) being or likely to become terminated or adversely
modified or affected or any onerous obligation or liability arising or any
adverse action being taken or arising thereunder; 
 
(iii)       any member of the Wider Home Retail Group ceasing to be able to
carry on business under any name under which it presently carries on
business; 
 
(iv)       any assets or interests of, or any asset the use of which is
enjoyed by, any member of the Wider Home Retail Group being or falling to be
disposed of or charged or any right arising under which any such asset or
interest could be required to be disposed of or charged or could cease to be
available to any member of the Wider Home Retail Group otherwise than in the
ordinary course of business; 
 
(v)        the creation or enforcement of any mortgage, charge or other
security interest over the whole or any part of the business, property or
assets of any member of the Wider Home Retail Group or any such mortgage,
charge or other security interest (whenever created, arising or having
arisen), becoming enforceable; 
 
(vi)       the business, assets, value, financial or trading position,
profits, prospects or operational performance of any member of the Wider Home
Retail Group being prejudiced or adversely affected; 
 
(vii)      the creation or acceleration of any liability (actual or
contingent) by any member of the Wider Home Retail Group; or 
 
(viii)      any liability of any member of the Wider Home Retail Group to make
any severance, termination, bonus or other payment to any of its directors or
other officers; 
 
No material transactions, claims or changes in the conduct of the business of
the Home Retail Group 
 
(m)       since 28 February 2015 and except as Fairly Disclosed, no member of
the Wider Home Retail Group having: 
 
(i)         save as pursuant to the Scheme or between Home Retail Group plc
and its wholly-owned subsidiaries or between such wholly-owned subsidiaries
and save for the issue or transfer out of treasury of Home Retail Group Shares
or New TopCo Shares on the exercise of options or vesting of awards granted
before the date of the Original Announcement in the ordinary course, issued or
agreed to issue or authorised or proposed or announced its intention to
authorise or propose the issue of additional shares of any class, or
securities or securities convertible into, or exchangeable for, or rights,
warrants or options to subscribe for or acquire, any such shares or
convertible securities or transferred or sold or agreed to transfer or sell or
authorised or proposed the transfer or sale of Home Retail Group Shares or New
TopCo Shares out of treasury; 
 
(ii)        recommended, declared, paid or made or proposed to recommend,
declare, pay or make any bonus issue, dividend or other distribution (whether
payable in cash or otherwise) other than to Home Retail Group plc (and with
effect from the Scheme becoming Effective, New TopCo) or one of its
wholly-owned subsidiaries; 
 
(iii)       save as pursuant to the Scheme or between Home Retail Group plc
and its wholly-owned subsidiaries or between such wholly-owned subsidiaries,
merged with (by statutory merger or otherwise) or demerged from or acquired
any body corporate, partnership or business or acquired or disposed of, or,
other than in the ordinary course of business, transferred, mortgaged or
charged or created any security interest over, any assets or any right, title
or interest in any asset (including shares and trade investments) or
authorised, proposed or announced any intention to do so; 
 
(iv)       save as between Home Retail Group plc and its wholly-owned
subsidiaries or between such wholly-owned subsidiaries, made, authorised,
proposed or announced an intention to propose any change in its loan capital; 
 
(v)        issued, authorised or proposed or announced an intention to
authorise or propose the issue of, or made any change in or to the terms of,
any debentures or (save in the ordinary course of business and save as between
Home Retail Group plc and its wholly-owned subsidiaries or between such
wholly-owned subsidiaries) incurred or increased any indebtedness or become
subject to any contingent liability to an extent which is material in the
context of the Wider Home Retail Group or in the context of the Acquisition; 
 
(vi)       entered into, varied, authorised or proposed entry into or
variation of, or announced its intention to enter into or vary, any material
contract, transaction, arrangement or commitment (whether in respect of
capital expenditure or otherwise) (otherwise than in the ordinary course of
business) which is of a long term, unusual or onerous nature, or which
involves or could reasonably be expected to involve an obligation of a nature
or magnitude which is, in any such case, material in the context of the Wider
Home Retail Group or in the context of the Acquisition, or which is or is
reasonably likely to be restrictive on the business of any member of the Wider
Home Retail Group or the Wider Sainsbury's Group to an extent which is or is
likely to be material to the Wider Home Retail Group or the Wider Sainsbury's
Group in each case taken as a whole or in the context of the Acquisition; 
 
(vii)      entered into any licence or other disposal of intellectual property
rights of any member of the Wider Home Retail Group which are material in the
context of the Wider Home Retail Group and outside the normal course of
business; 
 
(viii)      entered into, varied, authorised or proposed entry into or
variation of, or announced its intention to enter into or vary the terms of or
made any offer (which remains open for acceptance) to enter into or vary the
terms of, any contract, commitment, arrangement or any service agreement with
any director or senior executive of the Wider Home Retail Group to an extent
which is material in the context of the Wider Home Retail Group or in the
context of the Acquisition save for salary increases, bonuses or variations of
terms in the ordinary course; 
 
(ix)       proposed, agreed to provide or modified the terms of any share
option scheme, incentive scheme, or other benefit relating to the employment
or termination of employment of any employee of the Wider Home Retail Group
which, taken as a whole, are material in the context of the Wider Home Retail
Group taken as a whole or in the context of the Acquisition; 
 
(x)        other than as provided for in the agreement entered into on 17
March 2016 by the trustee of the Home Retail Group Pension Scheme and
Sainsbury's in relation to the future funding of that scheme following
Completion, taken or having procured the trustees of the relevant pension
scheme to take, or any such trustees having taken any action, to (I) propose,
make or agree to any significant change to: (a) the terms of the trust deeds,
rules, policy or other governing documents constituting any pension scheme or
other retirement or death benefit arrangement established for the directors,
former directors, employees or former employees of any entity in the Wider
Home Retail Group or their dependants (a "Relevant Pension Plan"); (b) the
basis on which benefits accrue, pensions which are payable or the persons
entitled to accrue or be paid benefits, under any Relevant Pension Plan; (c)
the basis on which the liabilities of any Relevant Pension Plan are funded or
valued; (d) the manner in which the assets of any Relevant Pension Plan are
invested; (e) the basis or rate of employer contribution to a Relevant Pension
Plan; or (II) enter into or propose to enter into one or more bulk annuity
contracts in relation to any Relevant Pension Plan; or (III) carry out any
act: (a) which would or could reasonably be expected to lead to the
commencement of the winding up of any Relevant Pension Plan; (b) which would
or might create a material debt owed by an employer to any Relevant Pension
Plan; (c) which would or might accelerate any obligation on any employer to
fund or pay additional contributions to any Relevant Pension Plan; or (d)
which would or might give rise directly or indirectly to a liability in
respect of a Relevant Pension Plan arising out of the operation of sections 38
to 56 inclusive of the Pensions Act 2004 in relation to the scheme; 
 
(xi)       changed the trustee or trustee directors or other fiduciary of any
Relevant Pension Plan; 
 
(xii)      entered into, implemented or effected, or authorised, proposed or
announced its intention to implement or effect, any joint venture, asset or
profit sharing arrangement, partnership, composition, assignment,
reconstruction, amalgamation, commitment, scheme or other transaction or
arrangement (other than the Acquisition) which is material in the context of
the Wider Home Retail Group taken as a whole or in the context of the
Acquisition; 
 
(xiii)      purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities or reduced
or, save in respect of the matters mentioned in sub-paragraph (i) above, made
any other change to any part of its share capital; 
 
(xiv)     waived, compromised or settled any claim otherwise than in the
ordinary course of business which is material in the context of the Wider Home
Retail Group taken as a whole or in the context of the Acquisition; 
 
(xv)      other than pursuant to the Scheme, made any material alteration to
its articles of association or other constitutional documents; 
 
(xvi)     taken or proposed any steps, corporate action or had any legal
proceedings instituted or threatened against it in relation to the suspension
of payments, a moratorium of any indebtedness, its winding-up (voluntary or
otherwise), dissolution, reorganisation or for the appointment of any
administrator, receiver, manager, administrative receiver, trustee or similar
officer of all or any of its assets or revenues or any analogous proceedings
in any jurisdiction or appointed any analogous person in any jurisdiction or
had any such person appointed; 
 
(xvii)     been unable, or admitted in writing that it is unable, to pay its
debts or commenced negotiations with one or more of its creditors with a view
to rescheduling or restructuring any of its indebtedness, or having stopped or
suspended (or threatened to stop or suspend) payment of its debts generally or
ceased or threatened to cease carrying on all or a substantial part of its
business; 
 
(xviii)    entered into any contract, commitment, agreement or arrangement
otherwise than in the ordinary course of business or passed any resolution or
made any offer (which remains open for acceptance) with respect to or
announced an intention to, or to propose to, effect any of the transactions,
matters or events referred to in this Condition; 
 
(xix)     terminated or varied the terms of any agreement or arrangement
between any member of the Wider Home Retail Group and any other person in a
manner which would or might be expected to have a material adverse effect on
the financial position of the Wider Home Retail Group taken as a whole; or 
 
(xx)      having taken (or agreed or proposed to take) any action which
requires, or would require, the consent of the Panel or the approval of Home
Retail Group Shareholders in general meeting in accordance with, or as
contemplated by, Rule 21.1 of the Takeover Code; 
 
No material adverse change 
 
(n)        since 28 February 2015 and except as Fairly Disclosed: 
 
(i)         there having been no adverse change and no circumstance having
arisen which would be expected to result in any adverse change or
deterioration in the business, assets, value, financial or trading position,
profits, prospects or operational performance of any member of the Wider Home
Retail Group to an extent which is material to the Wider Home Retail Group
taken as a whole or in the context of the Acquisition or in the context of the
obligations of any member of the Wider Sainsbury's Group in connection with
the financing of the Acquisition; 
 
(ii)        no litigation, arbitration proceedings, prosecution or other legal
proceedings including, without limitation, with regard to intellectual
property rights used by the Wider Home Retail Group having been threatened,
announced or instituted by or against or remaining outstanding against any
member of the Wider Home Retail Group or to which any member of the Wider Home
Retail Group is or may become a party (whether as claimant or defendant or
otherwise) and no enquiry, review, investigation or enforcement proceedings
by, or complaint or reference to, any Third Party against or in respect of any
member of the Wider Home Retail Group having been threatened, announced or
instituted by or against, or remaining outstanding in respect of, any member
of the Wider Home Retail Group which, in any such case, might reasonably be
expected to have a material adverse effect on the Wider Home Retail Group
taken as a whole or in the context of the Acquisition; 
 
(iii)       no contingent or other liability having arisen, increased or
become apparent which might be likely adversely to affect the business,
assets, financial or trading position, profits, prospects or operational
performance of any member of the Wider Home Retail Group to an extent which is
material to the Wider Home Retail Group taken as a whole or in the context of
the Acquisition; and 
 
(iv)       no steps having been taken and no omissions having been made which
are likely to result in the withdrawal, cancellation, termination or
modification of any licence held by any member of the Wider Home Retail Group,
which is necessary for the proper carrying on of its business and the
withdrawal, cancellation, termination or modification of which is material and
likely to have a material adverse effect on the Wider Home Retail Group taken
as a whole or in the context of the Acquisition; 
 
(o)        since 28 February 2015 and except as Fairly Disclosed, Sainsbury's
not having discovered: 
 
(i)         that any financial, business or other information concerning the
Wider Home Retail Group publicly announced or disclosed to any member of the
Wider Sainsbury's Group at any time by or on behalf of any member of the Wider
Home Retail Group or to any of their advisers is misleading, contains a
misrepresentation of fact or omits to state a fact necessary to make that
information not misleading and which is, in any case, adverse to and material
in the context of the Wider Home Retail Group taken as a whole or the
Acquisition; or 
 
(ii)        that any member of the Wider Home Retail Group is subject to any
liability, contingent or otherwise, and which is adverse to and material in
the context of the Wider Home Retail Group or the Acquisition; or 
 
(iii)       any information which affects the import of any information
disclosed to Sainsbury's at any time by or on behalf of any member of the
Wider Home Retail Group which is material in the context of the Wider Home
Retail Group or in the context of the Acquisition; 
 
Environmental liabilities 
 
(p)        except as Fairly Disclosed, Sainsbury's not having discovered
that: 
 
(i)         any past or present member of the Wider Home Retail Group has not
complied with any applicable legislation or regulations, notices or other
requirements of any jurisdiction or any Third Party or any Authorisations
relating to the use, treatment, storage, carriage, disposal, discharge,
spillage, release, leak or emission of any waste or hazardous substance or
greenhouse gas, or any substance likely to impair the environment (including
property) or harm the health of humans, animals or other living organisms or
eco-systems or otherwise relating to environmental matters or the health and
safety of humans, which non-compliance would be likely to give rise to any
liability including any penalty for non-compliance (whether actual or
contingent) on the part of any member of the Wider Home Retail Group in each
case which is material in the context of the Wider Home Retail Group taken as
a whole or in the context of the Acquisition; or 
 
(ii)        there has been a disposal, discharge, spillage, accumulation,
leak, emission, release or the migration, production, supply, treatment,
storage, transport or use of any waste or hazardous substance or greenhouse
gas or any substance likely to impair the environment (including any property)
or harm human health which (whether or not giving rise to non-compliance with
any law or regulation) would be likely to give rise to any liability (whether
actual or contingent) on the part of any member of the Wider Home Retail Group
in each case which is material in the context of the Wider Home Retail Group
taken as a whole or in the context of the Acquisition; or 
 
(iii)       there is or is likely to be any obligation or liability (whether
actual or contingent) or requirement to make good, remediate, repair,
re-instate or clean up any property, asset currently or previously owned,
occupied or made use of by any past or present member of the Wider Home Retail
Group (or on its behalf), or in which any such member may have or previously
have had or be deemed to have had an interest, or other elements of the
environment (including any controlled waters) under any environmental
legislation, common law, regulation, notice, circular, Authorisation, other
legally binding requirement or order of any Third Party or to contribute to
the cost thereof or associated therewith or indemnify any person in relation
thereto in any such case to an extent which is material in the context of the
Wider Home Retail Group taken as a whole or in the context of the Acquisition;
or 
 
(iv)       circumstances exist (whether as a result of the Acquisition or
otherwise): 
 
(A)       which would be likely to lead to any Third Party instituting; or 
 
(B)       whereby any member of the Wider Sainsbury's Group or any present or
past member of the Wider Home Retail Group would be likely to be required to
institute, 
 
an environmental audit or take any other steps which would in any such case be
likely to result in any liability (whether actual or contingent) to improve,
modify existing or install new plant, machinery or equipment or carry out
changes in the processes currently carried out or make good, remediate,
repair, re-instate or clean up any land or other asset currently or previously
owned, occupied or made use of by any past or present member of the Wider Home
Retail Group (or on its behalf) or by any person for which a member of the
Wider Home Retail 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 any case is material in the context of the Wider Home Retail Group
taken as a whole or in the context of the Acquisition; or 
 
(v)        circumstances exist whereby a person or class of persons would be
likely to have any claim or claims in respect of any product or process of
manufacture or materials used therein currently or previously manufactured,
sold or carried out by any past or present member of the Wider Home Retail
Group which claim or claims would be likely, adversely to affect any member of
the Wider Home Retail Group and which is material in the context of the Wider
Home Retail Group taken as a whole or in the context of the Acquisition; 
 
Intellectual Property 
 
(q)        no circumstance having arisen or event having occurred in relation
to any intellectual property owned or used by any member of the Wider Home
Retail Group which would have a material adverse effect on the Wider Home
Retail Group taken as a whole or is otherwise material in the context of the
Acquisition, including: 
 
(i)         any member of the Wider Home Retail Group losing its title to any
intellectual property, or any intellectual property owned by the Wider Home
Retail Group and being revoked, cancelled or declared invalid; 
 
(ii)        any claim being asserted in writing or threatened in writing by
any person challenging the ownership of any member of the Wider Home Retail
Group to, or the validity or effectiveness of, any of its intellectual
property; or 
 
(iii)       any agreement regarding the use of any intellectual property
licensed to or by any member of the Wider Home Retail Group being terminated
or varied; 
 
Anti-corruption and sanctions 
 
(r)        except as Fairly Disclosed, Sainsbury's not having discovered
that: 
 
(i)         any past or present member, director, officer or employee of the
Wider Home Retail Group or any person that performs or has performed services
for or on behalf of any such company is or has at any time engaged in any
activity, practice or conduct (or omitted to take any action) in contravention
of the UK Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977, as
amended or any other applicable anti-corruption legislation; 
 
(ii)        any past or present member, director, officer or employee of the
Wider Home Retail Group or any person that performs or has performed services
for or on behalf of any such company for whom the Wider Home Retail Group may
be liable or responsible has engaged in any activity or business with, or made
any investments in, or made any funds or assets available to, or received any
funds or assets from any government, entity or individual covered by any of
the economic sanctions administered by the United Nations or the European
Union (or any of their respective member states) or the United States Office
of Foreign Assets Control or any other governmental or supranational body or
authority in any jurisdiction; and 
 
No criminal property 
 
(s)        except as Fairly Disclosed, Sainsbury's not having discovered that
any asset of any member of the Wider Home Retail Group constitutes criminal
property as defined by section 340(3) of the Proceeds of Crime Act 2002 (but
disregarding paragraph (b) of that definition). 
 
2.         Waiver and invocation of the Conditions 
 
Subject to the requirements of the Panel, Sainsbury's reserves the right to
waive, in whole or in part, all or any of the Conditions except for Conditions
1(b) to 1(d) inclusive, which cannot be waived. Conditions 1(b)(i) and
1(b)(ii) inclusive must be fulfilled by, and Conditions 1(e) to 1(s) inclusive
must be fulfilled or (if capable of waiver) waived by, no later than 11.59
p.m. on the date immediately preceding the date of the Court hearing to
sanction the Scheme. The Acquisition will lapse unless the Scheme and the New
TopCo Capital Reduction become unconditional and Effective and all other
Conditions are fulfilled or (if capable of waiver) waived by 11.59 p.m. on the
Long Stop Date or such later date as Sainsbury's and Home Retail Group plc may
agree and (if required) the Panel and the Court allow. 
 
Sainsbury's shall be under no obligation to waive (if capable of waiver) or
treat as fulfilled any of the Conditions by a date earlier than the latest
date specified above for the fulfilment or waiver thereof, notwithstanding
that any other Conditions may at any earlier date have been waived or
fulfilled and that there are at such earlier date no circumstances indicating
that any of such Conditions may not be capable of fulfilment. 
 
If Sainsbury's is required by the Panel to make an offer for Home Retail Group
Shares under the provisions of Rule 9 of the Takeover Code, Sainsbury's may
make such alterations to the Conditions and further terms of the Acquisition
as are necessary to comply with the provisions of that Rule. 
 
3.         Implementation by way of a Takeover Offer 
 
Sainsbury's may implement the Acquisition by making, directly or indirectly
through a subsidiary or nominee of Sainsbury's, or any member of the
Sainsbury's Group, a Takeover Offer for the entire issued and to be issued
share capital of Home Retail Group plc not already held by Sainsbury's as an
alternative to the Scheme (with the consent of the Panel and subject to the
Co-operation Agreement). In such an event, the Takeover Offer will be
implemented on substantially the same terms as set out in the Original
Announcement, including an acceptance condition of 90 per cent. of the shares
to which such Takeover Offer relates (or such lesser percentage (being more
than 50 per cent.) as Sainsbury's may decide with the consent of the Panel),
and the Proposed Capital Returns being structured as a Special Dividend. 
 
4.         Further terms of the Acquisition 
 
The Acquisition will lapse if there is a Phase 2 CMA Reference before the
later of the date of the Court Meeting and the date of the Home Retail Group
General Meeting. In such event, Home Retail Group plc will not be bound by the
terms of the Scheme. 
 
If any dividend or other distribution is announced, declared, made, paid or
becomes payable by Home Retail Group plc or New TopCo in respect of the Home
Retail Group Shares or New TopCo Shares on or after the date of the Original
Announcement and prior to the Completion Date, other than or in excess of the
Permitted Home Retail Group Payments, Sainsbury's reserves the right to reduce
the value of the Offer Consideration (including, for the avoidance of doubt,
by reducing the cash element of the Offer Consideration and/or adjusting the
Exchange Ratio) by the amount of all or part of the dividend or other
distribution, or all or part of the amount in excess of the Permitted Home
Retail Group Payments, that has been announced, declared, made, paid or become
payable. In calculating the amount of any such reduction, the value of New
Sainsbury's Shares will be calculated by reference to the Closing Price of
Sainsbury's Shares on the last trading day before Sainsbury's announcement of
a reduction in the Offer Consideration. 
 
The Home Retail Group Shares and the New TopCo Shares will be acquired
pursuant to the Acquisition with full title guarantee, fully paid and free
from all liens, charges, equities, encumbrances, rights of pre-emption and any
other interests of any nature whatsoever and together with all rights now or
hereafter attaching thereto, including without limitation voting rights and
the right to receive and retain in full all dividends and other distributions
(if any) declared, made or paid on or after the date of the Original
Announcement, other than, in the case of New TopCo Shares, the Proposed
Capital Returns. 
 
The New Sainsbury's Shares will be issued credited as fully paid and will rank
pari passu in all respects with the Existing Sainsbury's Shares from the date
of issue, save that they will not participate in any dividend payable by
Sainsbury's with reference to a record date prior to the Completion Date. 
 
Fractions of New Sainsbury's Shares will not be allotted or issued to Home
Retail Group Shareholders and entitlements will be rounded down to the nearest
whole number of New Sainsbury's Shares and all fractions of New Sainsbury's
Shares will be aggregated and sold in the market as soon as practicable after
the Completion Date. The net proceeds of such sale (after deduction of all
expenses and commissions incurred in connection with the sale) will be
distributed in due proportions to Home Retail Group Shareholders who would
otherwise have been entitled to such fractions, save that individual
entitlements to amounts of less than £5 will be retained for the benefit of
the Combined Group. 
 
The availability of the Acquisition to Home Retail Group Shareholders who are
not resident in the UK or who are subject to the laws and/or regulations of
another jurisdiction (including the ability of such Home Retail Group
Shareholders to vote their Home Retail Group Shares with respect to the
Acquisition at the Home Retail Group Meetings, or to execute and deliver Forms
of Proxy appointing another to vote at the Home Retail Group Meetings on their
behalf) may be restricted by the laws and/or regulations of those
jurisdictions. Therefore any persons who are not resident in the UK or who are
subject to the laws and/or regulations of any jurisdiction other than the UK
should inform themselves about, and observe, any applicable legal or
regulatory requirements. 
 
The New Sainsbury's Shares to be issued pursuant to the Acquisition have not
been, and will not be, listed on any stock exchange other than the London
Stock Exchange and have not been, and will not be, registered under the US
Securities Act or under any laws or with any securities regulatory authority
of any state, district or other jurisdiction, of the United States, nor have
clearances been, nor will they be, obtained from the securities commission or
similar authority of any province or territory of Canada and no prospectus has
been, or will be, filed, or registration made, under any securities law of any
province or territory of Canada, nor has a prospectus in relation to the New
Sainsbury's Shares been, nor will one be, lodged with, or registered by, the
Australian Securities and Investments Commission, nor have any steps been
taken, nor will any steps be taken, to enable the New Sainsbury's Shares to be
offered in compliance with applicable securities laws of Japan and no
regulatory clearances in respect of the New Sainsbury's Shares have been, or
will be, applied for in any other jurisdiction. Accordingly, unless an
exemption under relevant securities laws is available, the New Sainsbury's
Shares are not being, and may not be, offered, sold, resold, delivered or
distributed, directly or indirectly, in, into or from the United States or any
Restricted Jurisdiction or any resident of any Restricted Jurisdiction. The
New Sainsbury's Shares to be issued pursuant to the Acquisition are expected
to be issued pursuant to the exemption from registration provided by Section
3(a)(10) under the US Securities Act. Neither the SEC nor any US state
securities commission has approved or disapproved of the New Sainsbury's
Shares, or determined if this announcement is accurate or complete. Any
representation to the contrary is a criminal offence. 
 
Appendix 2
SOURCES AND BASES OF INFORMATION 
 
Unless otherwise stated in this announcement: 
 
1.         the value attributed to Home Retail Group plc's issued ordinary
share capital is based on 813,445,001 Home Retail Group Shares in issue as at
the Last Practicable Date; 
 
2.         any references to the existing issued share capital of Sainsbury's
are based on 1,924,490,892 Sainsbury's Shares in issue as at the Last
Practicable Date; 
 
3.         the market capitalisation for Sainsbury's is based on 1,924,490,892
Sainsbury's Shares in issue and the Closing Price of 276.3 pence per
Sainsbury's Share on the Last Practicable Date; 
 
4.         the 

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