Disposal

Boot(Henry) PLC
03 December 2002



        Proposed disposal ('Disposal') of Henry Boot Management Limited


Introduction

The Board of Henry Boot PLC ('Henry Boot' or the 'Group') today announces that
Henry Boot has agreed to sell the entire issued share capital of Henry Boot
Management Limited ('HBM') to Hedehjem Limited ('Hedehjem').


The total consideration payable by Hedehjem is £5 million in cash of which £3
million is payable in cash on completion and the balance will be paid on a
deferred basis in two cash payments of £1,050,000 due on 5 January 2004 and of
£950,000 due on 5 January 2005 respectively.


Peter Elston, the current Managing Director of HBM will own more than 30 per
cent. of the issued share capital of Hedehjem. Consequently, the Disposal will
be a related party transaction under the Listing Rules of the UK Listing
Authority and as such will require the prior approval of Henry Boot Ordinary
Shareholders at an Extraordinary General Meeting ('EGM') of Henry Boot to be
held on 19 December 2002.


A circular (the 'Circular') containing further details on the Disposal and
convening an EGM will be sent to Shareholders today. Words and expressions
defined in the Circular shall, unless otherwise defined or where the context
otherwise requires, have the same meaning in this announcement.


Background to and reasons for the Disposal


Henry Boot is a diversified group operating in the fields of housebuilding,
property development, land management, building and civil engineering, railtrack
engineering, facilities management, plant hire and training.  Following a review
of business strategy, the Board has concluded that Shareholders' interests would
be best served by concentrating management and financial resources on a more
focussed portfolio of Group activities. HBM operates in a number of relatively
small and diverse areas of activity that are non-core in relation to the Group
as a whole.  The Board envisages that the Disposal will reduce the risk profile
of the Group and allow it to focus on its core activities.


The Board has considered a variety of options for HBM and has concluded that the
interests of Shareholders will be best served by disposing of HBM to the HBM
Management Team at a price significantly in excess of its net assets given the
HBM Management Team's intimate knowledge of and enthusiasm for the business, and
reportedly low market appetite for acquisitions of this nature.


Information on HBM


HBM is a specialist construction business which undertakes design-build and fee
contracting assignments in both the public and private sectors throughout the
UK.  In addition, the company also undertakes fitting out and refurbishment
contracts for retail and commercial premises, and operates a facilities
management business. HBM provides maintenance services to manufacturing
businesses through Banner Total Maintenance Limited a wholly owned subsidiary of
HBM.


HBM also has a 50 per cent. shareholding in Henry Boot Railtech Limited, a small
business which provides trackwork services and project management to the rail
sector, and supplies synthetic sports surfaces under the name of Henry Boot
Du-Mury Sport.


Principal terms of the Disposal


The total cash consideration payable is £5 million. £3 million of this is
payable in cash on Completion and the balance will be paid on a deferred basis
in two cash payments of £1,050,000 due on 5 January 2004 and of £950,000 due on
5 January 2005, respectively.  Payments of both tranches of deferred
consideration are to be secured by way of bank guarantee.


HBM will also pay Henry Boot a special dividend of £245,000 immediately prior to
Completion.


The Disposal is conditional upon the passing of the Resolution at the EGM.


A summary of the principal terms of the Disposal Agreement are set out in the
Circular.


Financial effects of the Disposal


HBM had net assets of £2.6 million at 31 December 2001. In the year ended 31
December 2001, HBM reported turnover of £43.1 million and profit before tax of
£967,000.


HBM had a net debtor balance receivable from the Group of £11.8 million at 31
December 2001, the balance of which will be repaid at Completion to HBM by the
Group.  As a result of the repayment of this balance, the Disposal is expected
to reduce the cash position of the Group in the short term, but will release the
Group from HBM's obligations under sub-contract liabilities and contract
retentions to which the amount due from the Group largely relates.


Extraordinary General Meeting


The Disposal is subject to the prior approval of Ordinary Shareholders at an EGM
to be held at the offices of DLA in Sheffield at 12 noon on 19 December 2002,
notice of which is in the Circular. A Form of Proxy for use in connection with
the EGM is enclosed with the Circular. The Resolution will be proposed as an
ordinary resolution to approve the Disposal and any non-material variations to
the draft Disposal Agreement.


Conclusion


The Directors of the Group, who have been so advised by KPMG Corporate Finance,
consider that the terms of the Disposal are fair and reasonable so far as the
Shareholders of Henry Boot are concerned. In providing financial advice in
relation to the Disposal, KPMG Corporate Finance has taken into account the
Directors' commercial assessment of the Disposal.


Recommendation


The Directors believe that the Disposal is in the best interests of the Company
and of Shareholders as a whole and accordingly unanimously recommend Ordinary
Shareholders to vote in favour of the Resolution, as they intend to do in
respect of their own personal beneficial holdings amounting to 2,043,133
Ordinary Shares, representing approximately 7.9 per cent. of the issued ordinary
share capital of Henry Boot.


Peter Elston who has a personal beneficial shareholding of 59,902 Ordinary
Shares is unable to vote as a related party and will therefore abstain from
voting upon the Resolution at the EGM in respect of those Ordinary Shares, and
has undertaken to take all reasonable steps to ensure that his associates
abstain from voting upon the Resolution at the EGM, should they have the right
to do so.




Enquiries:



Henry Boot                                 Tel: [phone]

John S Reis, Chairman
Jamie Boot, Chief Executive

KPMG Corporate Finance                     Tel: [phone]
Bob Bigley






KPMG Corporate Finance, a division of KPMG LLP which is authorised by the
Financial Services Authority for investment business activities, is acting for
the Company as financial adviser in relation to the Disposal and is not acting
for any other person in relation to such Disposal. KPMG Corporate Finance will
not be responsible to anyone other than the Company for providing the
protections afforded to its clients or for providing advice in relation to the
Disposal.


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