Castorama Offer/Rights Issue

Kingfisher PLC
8 July 2002


For Immediate Release
8 July 2002

Not for release, distribution or publication in whole or part into or in the
United States, Canada, Australia, Ireland, Japan or South Africa.


KINGFISHER'S €67 OFFER FOR CASTORAMA MINORITIES DECLARED FAIR AND £2 BILLION 
RIGHTS ISSUE TO GO AHEAD

•      Rothschild et Cie. has confirmed €67 as a fair price for the Castorama 
       minorities

•      Kingfisher to proceed with cash offer of €67 per Castorama share, or a 
       total consideration of €5.1 billion (£3.3 billion), for the minority 
       interests following necessary clearances from competition authorities, 
       expected in August 2002

•      Fully underwritten rights issue to raise £2.0 billion to proceed 
       immediately, offering Kingfisher shareholders 1 new share for each 
       existing share held, at a price of 155 pence per new Kingfisher share

•      Targeted performance improvements across the group leading to the Offer 
       being modestly enhancing to Kingfisher's earnings per share in the second 
       full year

Kingfisher's Chairman, Francis Mackay, said:

'We are obviously pleased that Rothschild has confirmed that our offer is fair
and we will be proceeding as planned. Our overall strategic transformation is
very much on track and I confirm that we intend to pursue the separation of
Kingfisher's Electricals business as previously announced.  We look forward to
working closely with all the teams in Castorama to realise the undoubted
potential in the brands across the world.'

Kingfisher's Chief Executive, Sir Geoffrey Mulcahy, added:

'Now we have certainty regarding the Offer, we look forward to furthering our
vision of a pan-European Home Improvement business with a unified management
structure, and creating additional value for shareholders and enhanced
opportunities for employees. Kingfisher has a clear strategic agenda.  First, we
will continue to invest in our existing, winning brands B&Q, Brico Depot,
Castorama Poland and Screwfix.  Second, we must revitalise Castorama in its
domestic market so that the business is once again the leader in French home
improvement.  Third, we will focus our international efforts on markets where we
are convinced that an opportunity exists to build local market leaders.'


Company profile


Kingfisher is Europe's leading home improvement retailer, and is ranked number
three in the world. The company operates more than 580 home improvement stores
in 11 countries, and enjoys market-leading positions in the UK, France and
Taiwan. Sales for the Home Improvement sector for the year to 2 February 2002
were more than £5.8 billion, with retail profit in excess of £430 million.


Kingfisher Electrical & Furniture operates more than 820 stores in nine
countries. It is Europe's third largest electricals retailing business by sales
and number two by retail profit. As well as holding the leading position in
France and the number two position in the UK, Kingfisher also enjoys leading
positions in Belgium and in the Czech and Slovak Republics.  Sales for the year
to 2 February 2002 were more than £3.7 billion, with retail profit of £184
million.



Further Enquiries:

Broker and Institutional Enquiries:
Ian Harding, Director of Investor Relations                 [phone]


Media Enquiries:
Andrew Mills, Director of Corporate Affairs                 [phone]
Jonathan Miller, Head of Corporate Comms, UK                [phone]

France
Graham Fairbank, Head of Corporate Comms.                  [phone]

The Maitland Consultancy:                                   [phone]
Angus Maitland
Duncan Campbell-Smith

Euro RSCG C&O:
Laurent Wormser                                            [phone]
Marie-Noelle Brouaux                                       [phone]


Goldman Sachs International:                                [phone]
Yoel Zaoui
Robin Bishop

BNP Paribas:
Thierry Varene                                             [phone]





For Immediate Release
8 July 2002


Not for release, distribution or publication in whole or part into or in the
United States, Canada, Australia, Ireland, Japan or South Africa.


KINGFISHER'S €67 OFFER FOR CASTORAMA MINORITIES DECLARED FAIR AND £2 BILLION 
RIGHTS ISSUE TO GO AHEAD


Introduction

On 15 May 2002, Kingfisher announced plans for a strategic transformation.  It
announced that it had initiated the process of acquiring the outstanding
minority interests in Castorama Dubois Investissements SCA ('Castorama'), a
proposed £2.0 billion rights issue to fund partially the proposed offer and its
intention to separate its Home Improvement and Electricals businesses.

On 22 May 2002, a Circular was sent to Kingfisher's shareholders convening an
Extraordinary General Meeting, which was held on 7 June 2002.  At that Meeting,
both the proposed offer and the related rights issue were approved by an
overwhelming majority of shareholders.

Kingfisher remains convinced that proceeding to buy the minorities of Castorama
is appropriate and in the best interests of its business, shareholders and
employees. This is notwithstanding the significant decline in global equity
markets and the extended time taken to complete the process, which is likely to
have delayed the delivery of the identified performance improvements.

Offer for Castorama Minorities

Kingfisher is proposing to make a cash offer of €67 per Castorama Share, or a
total consideration of €5.1 billion (£3.3 billion) for the 45.4% interest in the
fully diluted share capital of Castorama that the Kingfisher Group does not
already own.  The articles of Castorama lay down a process to enable Kingfisher
to exercise full control over Castorama by making a cash offer for the minority
interests.  This requires an independent bank to provide an opinion on whether
Kingfisher's proposed Offer price of €67 per Castorama Share is fair.

On 10 June 2002, Rothschild et Cie. was appointed as the independent bank for
this purpose and, on 7 July 2002, certified that Kingfisher's proposed Offer
price of €67 per Castorama Share is fair.   Accordingly, Kingfisher will,
subject to receiving the necessary clearances from competition authorities,
proceed to make a formal offer to the minority shareholders of Castorama in
accordance with French takeover offer rules, which Kingfisher expects to make in
August 2002.  Under Castorama's articles, the Kingfisher Group will acquire a
casting vote at meetings of the governing boards of Castorama (Assemblee des
Commandites and Conseil de Gerance) giving it effective control from the time
the French stock market regulator (Conseil des marches financiers) approves this
cash offer.

Funding of the Offer

In connection with the Offer, Kingfisher announces that it is proposing to raise
approximately £2.0 billion by the issue of new Kingfisher shares at a price of
155 pence per new Kingfisher share.  The issue price reflects a discount of 50%
to the middle market price of 310 pence per Kingfisher share on 5 July 2002, the
last business day prior to the date of this announcement.

The issue is being made by way of a rights issue to shareholders on the register
at the close of business on 8 July 2002 on the basis of

         1 new Kingfisher Share for every 1 existing Kingfisher Share held.

The rights issue has been fully underwritten by UBS Warburg, CSFB and Goldman
Sachs International.  The remainder of the financing of the Offer will be
through a new debt facility of up to €2.4 billion.

Background and Rationale

Home Improvement Business

Kingfisher's vision is to create an integrated pan-European Home Improvement
business that combines global scale with local marketing skills.  It will focus
on markets where it can establish leading market positions. Kingfisher believes
this will create enhanced opportunities for employees, deliver superior returns
on invested capital and so create additional value for shareholders.  Kingfisher
will create a unified Group with a clear and accountable management structure
and unified employee and shareholder bases.  The removal of the existing co-
control arrangements will allow Kingfisher to further this vision.  The Group
will have a clear strategic agenda to deliver value, with three objectives:

•        Backing the established winners - B&Q, Brico Depot, Castorama Poland 
         and Screwfix

•        Reinvigorating Castorama France

•        Focusing on selected international markets to build leaders

It is critical that the Group drives further growth in value from continuing to
invest in B&Q, Brico Depot, Castorama Poland and Screwfix.  Since 1999, B&Q and
Screwfix together have contributed 122 per cent. of Castorama's retail profit
growth, with Brico Depot and Castorama Poland contributing 11 per cent. and 22
per cent., respectively.  These gains offset the declines in retail profit
growth elsewhere in the Castorama group.  These engines of growth must be
continuously reinvigorated and extended to stay ahead of local competition.  In
the medium term, they will also benefit from using Group advantages of buying
scale and shared retail expertise to help them serve their customers even
better.

Castorama in France has a strong brand but has under-performed, relative to its
local competition, due to a lack of investment and innovation in development.
Kingfisher will work with the local management teams to address two key
priorities:

•        Achieving sales growth in the business

•        Improving profitability

In the first instance, the Home Improvement business will work on improving its
consumer offer, by adopting common core ranges, addressing the poor pricing
perception and undertaking a widespread low cost renewal programme, together
with selective full store transformations.  This will be done in line with a new
vision for the brand, where much research has recently been done.  The scope of
likely benefits from this programme has been estimated to be in the order of £6
million in the first full year rising to £12 million in 2004/5.  Based on almost
a decade of experience of working in the French market, Kingfisher will develop
detailed plans with local management, starting once the Offer is made, when
greater access to the necessary operating details will be possible.

In addition to improving the consumer offering, Kingfisher will also seek to
reduce product costs by working constructively with suppliers, using the
techniques already successfully applied at B&Q, which generated a saving in 2001
of £48m.  The initial scoping of this programme indicates a possible benefit of
£22 million in 2003/4 in Castorama France rising to a target of £40 million in
the following year, if applied also to Brico Depot and Castorama Poland. These
benefits reflect estimated costs of implementation based on the experience in
B&Q, but do not account for any significant unanticipated issues that may arise
once Kingfisher has full access to operational details. George Adams, B &Q's
Managing Director - Commercial, will be responsible for this programme.

In relation to the international businesses, Kingfisher will review with local
management the appropriate path to local market leadership.  If it cannot be
seen how to achieve this, Kingfisher, together with local management, will
institute a plan for exiting those markets in the most appropriate manner. 
Kingfisher will focus on creating a limited number of long term leading
businesses that will add significant value in the medium and long term. Ian
Cheshire, Executive Director, will be responsible for this process.

Kingfisher will continue to be headquartered and publicly quoted in London.  In
accordance with its current practice, Kingfisher expects each of its operating
businesses to retain their own management structures and cultures. The
headquarters for Castorama France will, naturally, continue to be in Lille, that
for B&Q in Southampton and for Brico Depot in Paris.

The corporate centre for the newly unified group will have group functions in
both London and Lille, using the best people for each role from the existing
corporate teams, regardless of nationality or current working location.
Kingfisher has already given an undertaking that, in the creation of the new
integrated corporate centre, there will be no compulsory redundancies.  In
2003/4 the savings from combining the Castorama group head office functions with
Kingfisher's is targeted to be £5 million per annum.

Kingfisher believes that these programmes, together with other initiatives in
the Home Improvement business, will generate overall benefits from the Offer of
between £30 million and £40 million in the first full year.  These are targeted
to rise to at least £55 million in the following year.  The time it will take to
achieve these benefits depends on quickly developing positive and constructive
working relationships across the Group.

Finally, Kingfisher will be in a position to move ahead with its plans to
separate its Electricals business, enabling it to simplify the Group head office
structure further and to realise other benefits such as being able to integrate
various existing Home Improvement interests in Kingfisher, including Nomi and
the property holdings, as well as to strengthen the strategic alliance with
Hornbach.  These moves enable Kingfisher to target the generation of benefits of
up to £20 million in 2004/5, creating total targeted benefits from this
transformation of up to £80 million in 2004/5.

Financial Effects

Based on Kingfisher's closing share price on 5 July 2002 of 310 pence, it is
expected that these performance improvements and other planned initiatives will
lead to the Offer being modestly enhancing to Kingfisher's earnings per share,
after adjusting for the rights issue, in the second full trading year after
implementation of the Offer.  Based on Kingfisher's share price prior to
announcement of the initiation of the offer process, on 15 May 2002, of 385.5
pence, the Offer would have been modestly enhancing to earnings per share in the
first full trading year.

Separation of Kingfisher's Electricals Business

Kingfisher intends to explore all possible options for the separation of its
Electricals business to create additional value for shareholders, including a
separate listing for the Electricals business that might result in a fuller
valuation by the market.  Following the completion of the Offer for the minority
interests of Castorama, it is anticipated that the separation will be undertaken
within the timeframe previously announced.  The separation would be subject to
prior shareholder approval.

Overseeing the Transformation

Upon the Offer being approved by the French stock market regulator, a joint
Anglo-French management team, led by Kingfisher's Chairman, Francis Mackay, and
Kingfisher's Chief Executive, Sir Geoffrey Mulcahy, will take on management
responsibility for Castorama.  The process of seeking a successor to Sir
Geoffrey is proceeding as planned and the outcome will be announced in the next
four months.  The existing operating management will remain in place.

Current Trading and Prospects

On 30 May 2002, Kingfisher announced trading results for the first quarter to 4
May 2002. Retail sales were up 6.6 per cent. to £2.4 billion.  On a like-for-
like basis, sales grew by 1.4 per cent.  With a firm focus remaining on margin
and cost management, retail profit grew by 25.2 per cent.

The Group's Home Improvement business delivered a strong performance, boosted
primarily by UK market leader B&Q.  Total UK sales were up 18.9 per cent., with
like-for-like sales ahead by 5.9 per cent. In France, total sales grew by 5.6
per cent., with a 2.1 per cent. like-for-like increase, helped by Castorama's
decision to bring forward its Spring sales promotion.  Home Improvement retail
profit was strongly ahead at £101.3 million.

The first quarter is less significant for Kingfisher's Electricals business,
accounting for around 5.0 per cent. of annual retail profit.  Sales declined by
5.0 per cent. on a like-for-like basis, with market conditions in continental
Europe continuing to be particularly challenging. Retail profit of £13.3 million
was 23.1 per cent. higher.  However, after adjusting for the additional month of
sales and losses in last year's German result, total Electrical & Furniture
sales declined by 1.7 per cent. and there was a slight fall in retail profit.

During the period, while results for individual businesses have varied, the
Group made a good start to the year. Although economic conditions remained
difficult, especially in continental Europe, Kingfisher considered that the
prospects for the Group as a whole for the current financial year are
satisfactory.  This view has not changed since the end of the first quarter.




Principal Terms of Rights Issue

In connection with the Offer, Kingfisher is proposing to raise approximately
£2.0 billion by the issue of new Kingfisher Shares at a price of 155 pence per
new Kingfisher Share.  The Issue Price reflects a discount of 50% to the middle
market price of 310 pence per Kingfisher Share on 5 July 2002, the last business
day prior to the date of this announcement.

The issue is being made by way of a Rights Issue to Qualifying Shareholders on 
the register at the close of business on 8 July 2002 on the basis of

             1 new Kingfisher Share for every 1 existing Kingfisher Share

held at the close of business on 8 July 2002.

The Rights Issue is conditional upon:

(i)                admission of the new Kingfisher Shares to the Official List
of the UK Listing Authority and to trading on the London Stock Exchange's market
for listed securities taking place by not later than 8:00 a.m. on 31 July 2002
(or such later time on 31 July 2002 as the Underwriters and Kingfisher may
agree); and

(ii)             the Underwriting Agreement otherwise having become
unconditional in all respects and not having been terminated in accordance with
its terms prior to commencement of dealings in the new Kingfisher Shares, nil
paid. Kingfisher will use the net funds raised by the rights issue, expected to
be some £2 billion, towards payment for the acquisition of the 45.4 per cent. of
the issued share capital of Castorama that the Kingfisher Group does not already
own.  The remainder of the financing of the Offer will be through the new debt
facility of up to €2.4 billion.

Although the rights issue is not conditional on the Offer being made, Kingfisher
believes that, in so far as the EC merger regulatory pre-condition to the making
of the Offer is concerned, the Offer is not foreseen to give rise to substantive
competition concerns.  Furthermore, Kingfisher believes that, in view of the
Rothschild et Cie. fairness opinion, once the Offer is made, the Company will
acquire all or a substantial part of the capital of Castorama that it does not
already own.

The full terms and conditions of the Rights Issue will be detailed in a
Prospectus which is expected to be posted to Kingfisher shareholders on 10 July
2002.

It is intended that Provisional Allotment Letters in respect of the new
Kingfisher Shares will be despatched on 10 July 2002 to Qualifying non-CREST
Shareholders (other than certain overseas shareholders) at their own risk.  Its
is expected that Nil Paid Rights of Qualifying CREST Shareholders (other than
certain overseas shareholders) will be credited to their appropriate stock
accounts and enabled for trading on 11 July 2002.

It is expected that admission of the new Kingfisher Shares to the Official List
of the UK Listing Authority and to trading on the London Stock Exchange's market
for listed securities will become effective on 11 July 2002 and that dealings in
the new Kingfisher Shares, nil paid, will commence at 8.00am on that day.

The Rights Issue is fully underwritten by UBS Warburg, CSFB and Goldman Sachs
International.





EXPECTED TIMETABLE OF PRINCIPAL EVENTS



Record Date for the Rights Issue                                                  Close of business 8 July 2002
Nil Paid Rights in CREST enabled (Qualifying CREST Shareholders only)                              11 July 2002
Dealings in new Kingfisher Shares, nil paid, commence on the London                   8.00 a.m. on 11 July 2002
Stock Exchange

Kingfisher Shares trade ex-rights                                                                  11 July 2002
Recommended latest time for requesting withdrawal of Nil Paid Rights                  9.30 a.m. on 26 July 2002
or Fully Paid Rights from CREST (i.e. if your Nil Paid Rights or Fully
Paid Rights are in CREST and you wish to convert them into
certificated form)

Latest time and date for depositing renounced Provisional Allotment                   3.00 p.m. on 30 July 2002
Letters, nil or fully paid, into CREST or for dematerialising Nil Paid
Rights or Fully Paid Rights into a CREST stock account

Latest time and date for splitting Provisional Allotment Letters, nil                 3.00 p.m. on 31 July 2002
or fully paid

Latest time and date for acceptance and payment in full                              9.30 a.m. on 2 August 2002

New Kingfisher Shares credited to CREST stock accounts                                            5 August 2002

Despatch of definitive share certificates for new Kingfisher Shares in                            9 August 2002
certificated form


Notes:

(i)    The dates set out in the expected timetable of principal events above may
be adjusted by Kingfisher, in which event details of the new dates will be
notified to the UK Listing Authority, the London Stock Exchange, the Commission
des operations de bourse and Euronext Paris SA and, where appropriate, to
Kingfisher shareholders.

(ii) References to times are to London time unless otherwise stated.

                                                       - ends -





IMPORTANT NOTICE

This document does not constitute, or form part of, an offer, or solicitation of
an offer, to purchase or subscribe for any rights, shares or other securities. 
These may only be made on the basis of information that will be contained in the
prospectus to be published in connection with the proposed transaction.

This announcement does not constitute an offer of securities for sale in the
United States.  The information contained herein is not for publication or
distribution to persons in the United States.  The new Kingfisher shares have
not been and will not be registered under the U.S. Securities Act of 1933 (the
'Securities Act') and may not be offered or sold in the United States unless
they are registered with the U.S. Securities and Exchange Commission or they are
exempt from the registration requirements of the Securities Act.  There will be
no public offering of securities in the United States.

Certain statements made in this announcement are forward looking statements. 
Such statements, including those regarding the expected effect on earnings of
the proposed integration programme and our objectives regarding earnings growth,
are based on current expectations and are subject to a number of risks and
uncertainties that could cause actual results and performance to differ
materially from any expected future results or performance, express or implied,
by the forward looking statements.  Factors that might cause forward looking
statements to differ materially from actual results include, among other things,
legal, transactional, regulatory and economic factors, as well as our ability to
implement cost savings and revenue-enhancing measures in Castorama.  Other
factors include our ability to successfully add new and planned store space and
to continue to implement cost and cash controls, and to turn around the German
electricals business.  Kingfisher assumes no responsibility to update any of the
forward-looking statements contained herein.

Prices and values of, and income from, shares may go down as well as up and an
investor may not get back the amount invested.  It should be noted that past
performance is no guide to future performance.  Persons needing advice should
consult an independent adviser.

Each of Goldman Sachs International, UBS Warburg and CSFB is acting for
Kingfisher and no one else in connection with the rights issue and will not be
responsible to any other person for providing the protections afforded to their
respective clients or for providing advice in relation to the transaction.


Analysts and Press Briefings

An analysts' meeting will be held today at 10.00 am and a press conference will
take place at 11.30 am at the Brewery, Chiswell Street, London EC1Y 4SD.

In Paris, a press and analysts' meeting will be held at 11.00 am (Paris time) on
Tuesday, 9 July at Hotel Four Seasons George V, 31 avenue George V, 75008 Paris.





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