Re Agreement

Carphone Warehouse Group PLC
08 May 2008


8 May 2008



For immediate release


      Best Buy, a world-leading consumer electronics retailer, and 
  The Carphone Warehouse, a world-leading independent mobile phone retailer, 
                     to create a new company



  New venture to accelerate the development of The Carphone Warehouse's retail
         proposition and to introduce Best Buy stores across Europe



  Best Buy to acquire 50% of The Carphone Warehouse's European and US retail
       interests for a cash consideration of £1.1 billion or $2.1 billion



  The Carphone Warehouse to use proceeds to pay down debt, invest in broadband
customer growth and infrastructure, and invest in new areas of growth presented
                               by the transaction



The Carphone Warehouse Group PLC ('The Carphone Warehouse') (LSE: CPW) and Best
Buy Co., Inc. ('Best Buy') (NYSE: BBY) have agreed to form a new venture to
accelerate their growth by capitalising on the European consumer's evolving
appetite for consumer electronics.  The assets of the newly-formed company will
comprise The Carphone Warehouse's existing retail business, operating from more
than 2,400 stores in nine European countries under the Carphone Warehouse and
Phone House brands; and The Carphone Warehouse's share of its existing
relationships with Best Buy.

Best Buy is a world-leading consumer electronics retailer, with fiscal 2008
revenues of $40 billion, operating income of $2.2 billion, 150,000 employees and
1,314 stores providing over 48 million square feet of sales space in the United
States, Canada and China.  Best Buy plans to acquire a 50% stake in the new
company for a cash consideration of £1.1 billion, or $2.1 billion.

Consumer electronics has been the fastest-growing category in European retail
over the past five years and represents an estimated market of approximately £89
billion ($175 billion). The two companies expect growth in consumer electronics
to be led by the convergence in entertainment, computing and communications.

Best Buy and The Carphone Warehouse expect wireless information provision,
mobility and broadband to create significant new consumer and business
opportunities.  Demonstrating, advising on, configuring and connecting these
services will be key to success in this new market.  The two companies believe
that the customer focus and passion for impartial advice that they share will be
crucial elements of the new venture, and give it the potential to build a
substantial presence in European larger format consumer electronics retailing.

On completion of the transaction, The Carphone Warehouse and Best Buy will each
own 50% of the retail business, comprising all the 2,400 stores, the web and
direct businesses, the insurance operations, and its airtime reselling
businesses. The Carphone Warehouse continues to own 100% of its fixed line
telecoms business in the U.K., comprising TalkTalk, AOL Broadband and Opal; and
its share of the Virgin Mobile France joint venture.  Best Buy continues to hold
its 2.9% stake in The Carphone Warehouse.

The Carphone Warehouse plans to use the proceeds of the transaction to repay
existing debt, to invest in broadband customer growth and infrastructure, and to
invest in new areas of growth presented by the transaction.

The transaction is subject to the approval of The Carphone Warehouse's
shareholders.  The directors of The Carphone Warehouse have unanimously agreed
to vote in favour of the resolution to approve the transaction at the
extraordinary general meeting scheduled to take place by early August.

The purpose of the new venture is three-fold. Specifically, the new company
plans:

  • To continue to grow The Carphone Warehouse's existing retail business
    through further physical expansion in its existing European markets, the
    acceleration of the current evolution towards mobile and fixed line
    connectivity, growth in private-label products, and the realisation of
    benefits from joint purchasing, joint sourcing and merchandising
    optimization;

  • To build a significant market share in consumer electronics retailing in
    Europe, through the roll-out of Best Buy stores, services and websites in
    selected markets, beginning in calendar 2009; and

  • To bring to Best Buy's core North American operations The Carphone
    Warehouse's expertise in sourcing mobility products, bundling services and
    operating smaller stores, thereby enhancing and diversifying Best Buy's
    skill set for improving its customer experience.

The new venture would also benefit from a long-term commercial agreement with
The Carphone Warehouse's fixed line division in the U.K., enabling it to create
attractive offerings through the extension of the subsidised hardware model from
mobile to fixed line.

Charles Dunstone, CEO of The Carphone Warehouse, said, 'Today's announcement
marks the next big step in The Carphone Warehouse's growth story.  We have built
The Carphone Warehouse by anticipating consumers' changing needs and adapting in
advance to meet them.  Our core principles of full range, impartial advice and
best value have underpinned the creation of our leading position in mobile
retailing.  Our approach to fixed line telecoms and our subsequent launch of
free broadband followed these principles by championing choice and value for
customers in a traditionally uncompetitive marketplace.  Each of these
businesses in its own way has changed the market it serves, and each has
benefited shareholders as well as customers.

'We have been working closely with Best Buy for nearly two years,' Dunstone
continued, 'and it is clear that we have very complementary cultures, skills and
assets - it's a perfect match. It is also clear that we have a significant
opportunity for incremental growth in our retail business which we can best
realise with Best Buy on board.  Best Buy brings demonstrable expertise in
merchandising, sourcing and customer service: that should help us accelerate the
evolution of our business towards the broader connectivity market.  We bring
local knowledge, infrastructure and the expertise in linking services to
product: that should help them push into larger format consumer electronics
retailing in Europe.'

Roger Taylor, CFO of The Carphone Warehouse, said, 'We are joining forces with a
leader in consumer electronics retailing to enter a major new market together.
Best Buy's track record of value creation speaks for itself.  In addition, the
proceeds from the transaction give us the power and flexibility to maximise the
value of our fixed line business and enhance its scale and profitability.  Our
employees, customers and suppliers all stand to benefit from the increased
opportunities that the venture brings - as do our shareholders.  We welcome our
expanded relationship and are very excited about its future growth prospects.'

'Both companies could have pursued their goals individually,' said Brad
Anderson, Vice Chairman and CEO of Best Buy. 'However, we believe that we can
collapse time, increase our success with consumers and create more shareholder
value for both companies by pursuing our goals together. The Carphone Warehouse
offers complementary capabilities as well as local customer insights, and has a
similar passion for the customer and employee experience.'

Bob Willett, CEO - Best Buy International and Chief Information Officer, said, 
'We've been successful with our business model and aspire to apply that model to
one of the largest markets in the world. Yet we must do so carefully and with
humility. We have seen great companies fail because they thought they could
simply export their current business model to new geographies. We intend to plan
our European entry strategy carefully, focused on customer needs, and with
on-the-ground help from our trusted partner, The Carphone Warehouse.'

'We have been sharing experiences with The Carphone Warehouse for four years and
working closely with them for the last two,' said Brian Dunn, President and
Chief Operating Officer of Best Buy. 'Both companies focus on anticipating and
meeting the changing needs of customers.  Our cultures are similar, and we share
a mutual trust and common values. We believe our combined expertise has
potential to result in significant financial upside as we together attempt to
transform retail in Europe through the Carphone Warehouse, Phone House and Best
Buy brands. Consumers' needs, both explicit and latent, are dramatically
changing, and we want to capitalize on those.  We also intend to make the
substantial capabilities of Best Buy fully available to the new venture to
ensure its successful growth.'

Best Buy Mobile, which Best Buy developed through its relationship with The
Carphone Warehouse, offers its U.S. customers twice the assortment of mobile
phones previously offered in Best Buy stores, and has been producing higher
customer satisfaction scores (as compared with stores without the Best Buy
Mobile experience). The new concept is being introduced into all of Best Buy's
stores in the United States during calendar 2008.  The two companies also have
been collaborating to bring Geek Squad, a 24-hour computer support task force,
to European markets.


Details of the Transaction

The Carphone Warehouse is proposing to contribute its retail business (which
includes all retail stores, its mobile airtime reselling operations, and its
insurance operations) into the new venture in return for a 50% stake in the new
company and total cash consideration of £1.088 billion ($2.142 billion), payable
by Best Buy on completion.  The transaction includes The Carphone Warehouse's
economic interests in Best Buy Mobile in the United States, as well as the Geek
Squad in the U.K. and Spain. The transaction excludes The Carphone Warehouse's
U.K. fixed line operations, its share in Virgin Mobile France and its major
freehold properties.

The Carphone Warehouse's retail business generated EBITDA of £263 million ($518
million) and an operating profit of £177 million ($349 million) on revenues of
£2.9 billion ($5.7 billion) in the year ended March 2007, as reported under
International Financial Reporting Standards.  Details of the gross assets that
are the subject of the transaction, and the audited financial results for the
year to March 2008, will be included in the circular to be sent to shareholders
in due course.

It is proposed that The Carphone Warehouse's existing European retail management
team will remain responsible for the day-to-day management of the new venture.
In due course, the team will be supplemented by additional personnel from Best
Buy as the development of the Best Buy stores and websites gathers pace.  Bob
Willett is expected to be chairman of the new venture, and Roger Taylor, The
Carphone Warehouse's Group CFO, is anticipated to be CEO in addition to
retaining his existing duties.  The business is to be overseen by a board
comprising equal numbers of Best Buy and The Carphone Warehouse executives,
including Charles Dunstone, Group CEO of The Carphone Warehouse.

In summary, both companies believe that the transaction provides the right
platform for The Carphone Warehouse to expand its business model into new areas
outside its current expertise, and for Best Buy to launch consumer electronics
stores in Europe. The companies estimate the size of the European market for
consumer electronics at £89 billion ($175 billion), and believe that no other
European retailer offers the type of shopping experience the new venture intends
to provide for consumers. While The Carphone Warehouse could continue to expand
and evolve its core proposition on a standalone basis, and similarly Best Buy
could make a 'greenfield' entry on its own into the European consumer
electronics market, both parties believe that the opportunities presented by the
changing marketplace can be taken more quickly, more successfully and more
cost-effectively by combining their diverse skills and resources.

The transaction is conditional on the passing of an ordinary resolution
approving the transaction by The Carphone Warehouse shareholders at its
extraordinary general meeting, which is expected to take place by early August
2008.  It is also conditional on receipt of approval of the change in corporate
controller from the Financial Services Authority, and on The Carphone Warehouse
completing the reorganisation of its corporate structure to create a new holding
company for its retail assets.

The transaction is expected to close during Best Buy's fiscal second quarter,
which concludes on 30 August 2008.



Financial Effects on The Carphone Warehouse

Gross cash consideration of approximately £1.1 billion ($2.1 billion) is payable
by Best Buy to The Carphone Warehouse on completion of the transaction.
Although on a standalone basis the transaction will be dilutive to The Carphone
Warehouse's earnings per share by approximately 10-15% in the year to March
2009, The Carphone Warehouse board believes that the incremental opportunities
for growth and value creation resulting from the transaction significantly
enhance the long-term prospects for the distribution business and the group as a
whole.


The Carphone Warehouse expects to use the consideration received from Best Buy
as follows:

  • To repay debt at the Group level;

  • To invest further in its next generation telecoms network in the UK, to
    widen its physical footprint and build additional capacity and resilience;

  • To continue to grow its fixed line customer base, both organically and
    through acquisition, should appropriate opportunities arise; and

  • To invest in new growth opportunities presented by the transaction.


Financial Effects on Best Buy

Best Buy's £1.1 billion ($2.1 billion) acquisition of a 50% share in the new
venture is expected to be funded through a combination of cash on hand, existing
bank lines and other new borrowing. At the end of its fiscal 2008, Best Buy had
cash and cash equivalents and short-term investments of $1.5 billion. As a
result of this investment, Best Buy does not expect to repurchase shares under
its existing share repurchase program in fiscal 2009. Best Buy previously had
disclosed that its fiscal 2009 earnings guidance included an assumption of $800
million in share repurchases.

Best Buy is expected to consolidate the financials of the new venture following
the close of the transaction. For Best Buy, this transaction is expected to add
approximately $5 billion to fiscal 2009 revenue.  In combination with the
negative impact of the reduction in its share repurchases, the transaction is
expected to be accretive by $0.05 to $0.07 to its fiscal 2009 diluted earnings
per share.

Best Buy anticipates that this venture will provide another significant profit
growth opportunity, enhancing its innovation capabilities, and further
diversifying its business.  Other key benefits of the investment for Best Buy
include the addition of a well respected management team with a successful track
record; and purchasing synergies.

Anderson added, 'We believe that successful companies create partnerships and
networks to maximize growth. This is a great addition to each of our networks of
skills and capabilities.'


Shareholder Approval

A circular setting out full terms of the transaction is expected to be posted to
The Carphone Warehouse shareholders by 13 June 2008, together with a notice
convening an extraordinary general meeting to approve the transaction.

This transaction does not require the approval of Best Buy's shareholders.


Investor Presentation

An overview of the transaction and key strategic highlights will be presented to
investors and analysts at 2.30 p.m. London time or 9:30 a.m. eastern time today
at Altitude, 29th Floor, Millbank Tower, 21-24 Millbank, London SW1P 4QP.  The
slides and an interactive webcast will be available at www.cpwplc.com and
www.bestbuy.com at the same time.  Dial-in numbers are as follows:


UK                  0800 279 4053
United States       1 866 928 6048
Other               [phone]


Further details of the new company's future growth plans will be presented to
investors and analysts after the transaction has completed.  The Carphone
Warehouse's preliminary results announcement is being postponed from 3 June 2008
to 12 June 2008 to tie in with the anticipated posting of the shareholder
circular on that date.



Contact Details


The Carphone Warehouse Public Relations:
Mark Schmid                             [phone]
Shane Conway                            [phone]
Anthony Carlisle                        [phone] or [phone]
(Citigate Dewe Rogerson)



The Carphone Warehouse Investor Relations:
Peregrine Riviere                       [phone]
Carla Bloom                             [phone]


Best Buy Public Relations:
Sue Busch                               [phone] or [phone]
Kelly Groehler                          [phone]
Paula Baldwin                           [phone]


Best Buy Investor Relations:
Jennifer Driscoll                       [phone] or [phone]
Charles Marentette                      [phone]



Best Buy's Forward-Looking and Cautionary Statements:

This news release contains forward-looking statements within the meaning of the
U.S. Private Securities Litigation Reform Act of 1995 as contained in Section
27A of the U.S. Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 that reflect Best Buy management's current views and
estimates regarding future market conditions, company performance and financial
results, business prospects, new strategies, the competitive environment and
other events. You can identify these statements by the fact that they use words
such as 'anticipate,' 'believe,' 'estimate,' 'expect,' 'intend,' 'project,' 
'plan,' 'outlook,' and other words and terms of similar meaning. These
statements involve a number of risks and uncertainties that could cause actual
results to differ materially from the potential results discussed in the
forward-looking statements. Among the factors that could cause actual results
and outcomes to differ materially from those contained in such forward-looking
statements are the following: failure to receive necessary approvals for the
transaction; failure to achieve anticipated benefits of the transaction; and
integration challenges relating to the new venture.  Other factors include the
following: general economic conditions, acquisitions and development of new
businesses, divestitures, product availability, sales volumes, pricing actions
and promotional activities of competitors, profit margins, weather, changes in
law or regulations, foreign currency fluctuation, availability of suitable real
estate locations, Best Buy's ability to react to a disaster recovery situation,
and the impact of labor markets and new product introductions on overall
profitability. A further list and description of risks, uncertainties and other
matters can be found in Best Buy's annual report and other reports filed from
time to time with the U.S. Securities and Exchange Commission ('SEC'),
including, but not limited to, Best Buy's Annual Report on Form 10-K filed with
the SEC on 30 April 2008. Best Buy cautions that the foregoing list of important
factors is not complete and assumes no obligation to update any forward-looking
statement that it may make.



About The Carphone Warehouse Group PLC


The Carphone Warehouse is Europe's largest independent retailer of mobile phones
and related services, with over 2,400 stores across nine countries.  Our
proposition is to offer customers impartial advice across the widest range of
handsets, networks and tariffs in the market.  We trade as The Carphone
Warehouse in the U.K. and Ireland, and as Phone House in our other European
markets.  In addition, under the TalkTalk and AOL brands we are a leading
provider of residential telecoms services in the U.K., with over 2.7 million
broadband customers and 2.7 million voice customers. The business was founded in
1989 by CEO Charles Dunstone.



About Best Buy Co., Inc.

Best Buy Co., Inc. (NYSE: BBY) operates an international portfolio of brands
with a commitment to growth and innovation.  Our employees strive to provide
customers around the world with superior experiences by responding to their
unique needs and aspirations.  We sell consumer electronics, home-office
products, entertainment software, appliances and related services through
approximately 1,300 retail stores across the United States, throughout Canada
and in China. Our multi-channel operations include: Best Buy (BestBuy.com,
BestBuy.ca, BestBuy.com.cn and Best BuyMobile.com), Future Shop (FutureShop.ca),
Geek Squad (GeekSquad.com and GeekSquad.ca), Pacific Sales Kitchen and Bath
Centers (PacificSales.com), Magnolia Audio Video (Magnoliaav.com), Jiangsu Five
Star Appliance Co. (Five-Star.cn) and Speakeasy (Speakeasy.net). Best Buy
supports the communities in which its employees work and live through
volunteerism and grants that benefit children and education.



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