Proposed enfranchisement

PZ CUSSONS PLC
02 June 2005



                                                                     2 June 2005

                                 PZ Cussons Plc
 Proposed enfranchisement of the 'A' (Non-Voting) Ordinary Shares, Compensatory
  Bonus Issue to Ordinary Shareholders and cancellation and repayment of both
                          classes of Preference Shares

1. Introduction

The Board of PZ Cussons Plc announces proposals to simplify the capital
structure of the Company involving the enfranchisement of the 'A' (Non-Voting)
Ordinary Shares ('the Enfranchisement Proposals') and the cancellation and
repayment of both classes of Preference Shares ('Preference Shares Proposal').

The effect of the Enfranchisement Proposals is to convert the 'A' (Non-Voting)
Ordinary Shares into Ordinary Shares with full voting rights. In compensation
for the dilution of their voting rights on the conversion of 'A' (Non-Voting)
Ordinary Shares into Ordinary Shares, it is proposed that existing Ordinary
Shareholders should receive additional Ordinary Shares through a Compensatory
Bonus Issue of 1 New Ordinary Share for every 10 Ordinary Shares held ('New
Ordinary Shares'). The Enfranchisement Proposals require the consent of the 'A'
(Non-Voting) Ordinary Shareholders in a Separate Class Meeting and the approval
of the Ordinary Shareholders at an Extraordinary General Meeting.

A circular will be sent to all Shareholders shortly giving further information
on the proposals and convening the necessary Extraordinary General Meeting and
Separate Class Meetings for the proposals to be implemented.

2. The Enfranchisement Proposals

(a) Background to and reasons for the Enfranchisement Proposals

For some time, the Board has been assessing the appropriateness of the Company's
capital structure, in particular, against the backdrop of the Group's strategy
for growing the business. The Board concluded, in the first instance, that the
two classes of Preference Shares, being the 71/2 per cent. Cumulative Preference
Shares of £1 each and the 10 per cent. Cumulative Preference Shares of £1 each,
now represent relatively small, inflexible and expensive forms of capital and
therefore should be cancelled and repaid.

The Board also concluded that it is appropriate to take steps to enfranchise the
'A' (Non-Voting) Ordinary Shares.

The two tier ordinary share structure has existed since 1969, when it was not
uncommon for companies with significant family interests to have a class of
ordinary share capital with preferential voting rights. At present, the rights
which attach to the 'A' (Non-Voting) Ordinary Shares are identical to those
attaching to the Ordinary Shares except that 'A' (Non-Voting) Ordinary
Shareholders are not entitled to vote at general meetings of the Company.

The Board considers that the enfranchisement of the 'A' (Non-Voting) Ordinary
Shares is desirable for the following reasons:

(a) the Directors wish to ensure that the Company has a capital structure
which is simple and has maximum flexibility;

(b) the 'A' (Non-Voting) Ordinary Shares have, historically, been very
thinly traded and, in recent years, have become close to being removed from the
FTSE UK Index series under their liquidity rules;

(c) the Board is aware that some institutional investors have a policy of
not investing in companies with non-voting ordinary shares; accordingly, the
consolidation of the equity shares into a single class through the
Enfranchisement is expected to increase the range of potential investors in the
Company which, the Directors believe, should enhance the marketability and
liquidity of the Company's shares;

(d) the 'A' (Non-Voting) Ordinary Shares represent approximately 47 per
cent. of the total issued ordinary share capital of the Company; the 'A'
(Non-Voting) Ordinary Shareholders are, however, unable to influence and
participate in the Company's decision-making despite sharing the same risks and
rewards as the Ordinary Shareholders; and

(e) by having a single class of Ordinary Shares, the share based incentive
schemes offered to employees of the Group will be simplified.

(b) Compensatory Bonus Issue

To compensate Ordinary Shareholders for the dilution of their voting rights
through the 'A' (Non-Voting) Ordinary Shares being converted into Ordinary
Shares, it is proposed that holders of existing Ordinary Shares should receive
New Ordinary Shares by way of a bonus issue on the following basis:

1 New Ordinary Share for every 10 Ordinary Shares held on the record date

The Compensatory Bonus Issue will result in the issue of approximately 2.1
million New Ordinary Shares, representing approximately 4.9 per cent. of the
enlarged issued ordinary share capital of the Company. The expected record date
for the Compensatory Bonus Issue is expected to be the close of business on 28
June 2005. The Directors are announcing today that, in the absence of unforeseen
circumstances, they intend to recommend a final dividend of 26.6p per share for
the period ended 31 May 2005.

The New Ordinary Shares will rank pari passu with the existing Ordinary Shares
including the right to receive the recommended final dividend of 26.6p.

In considering an appropriate level for the Compensatory Bonus Issue to holders
of Ordinary Shares, the Directors have considered a number of factors including:

(a) the percentage that the existing Ordinary Shares represent of the total
    current issued ordinary share capital;

(b) the extent of the additional value the market has historically placed on
    the Ordinary Shares by virtue of their voting rights. Over the last two 
    years, the average premium attaching to the Ordinary Shares is 13.8 per 
    cent. with the high being 26.8 per cent. and the low 2.9 per cent.. Over the 
    last twelve months, the average premium is 15.3 per cent. with the high 
    being 26.8 per cent. and the low 2.9 per cent.. As at the close of business 
    on 1 June 2005, the last business day prior to this announcement, the 
    premium was 20.5 per cent.;

(c) the effect which the Compensatory Bonus Issue will have in diluting the
    earnings and dividend entitlement of the 'A' (Non-Voting) Ordinary 
    Shareholders; and

(d) the fact that the New Ordinary Shares will rank for the recommended
    final dividend for the period ended 31 May 2005.

The Directors believe that the Compensatory Bonus Issue will not have any
material effect on the financial position of the 'A' (Non-Voting) Ordinary
Shareholders and that, in the future, the dividend paid per share is unlikely to
be affected.

Usually, no UK tax charge will arise in respect of a bonus issue. However,
special rules apply where a bonus issue is preceded or followed by a repayment
or redemption of share capital. In these circumstances the bonus issue is
treated as giving rise to a distribution for tax purposes. The Company has in
the past made market purchases of its owns shares and, accordingly, these
special rules apply. Thus, an Ordinary Shareholder receiving New Ordinary Shares
pursuant to the Compensatory Bonus Issue will be treated for tax purposes as
receiving a distribution equal to the nominal value of 10p per New Ordinary
Shares so received.

(c) Further details regarding the Enfranchisement Proposals

Implementation of the Enfranchisement Proposals will result in all of the 'A'
(Non-Voting) Ordinary Shares being re-designated as Ordinary Shares which will
rank pari passu in all respects with existing Ordinary Shares, including the
right to receive the recommended final dividend, but they will not rank for the
Compensatory Bonus Issue.

Application will be made to the UKLA and the London Stock Exchange for the
current listing of the 'A' (Non-Voting) Ordinary Shares to be carried over to
those shares after their re-designation as Ordinary Shares and for the New
Ordinary Shares arising under the Compensatory Bonus Issue to be admitted to the
Official List and to trading on the London Stock Exchange's market for listed
securities (together 'Admission').

(d) Evaluation of the Enfranchisement Proposals

For the reasons mentioned above, the Board believes that the Enfranchisement
Proposals, if adopted, are in the interests of both the Ordinary Shareholders
and the 'A' (Non-Voting) Ordinary Shareholders, will provide benefits for the
future development of the Company and will provide a basis on which to improve
shareholder value in the long term.

JPMorgan Cazenove Limited has evaluated the Enfranchisement Proposals from the
point of view of the 'A' (Non-Voting) Ordinary Shareholders as a class and has
confirmed to the Company that, in its opinion, the terms are fair and reasonable
insofar as they affect the 'A' (Non-Voting) Ordinary Shareholders.

NM Rothschild & Sons Limited has evaluated the Enfranchisement Proposals from
the point of view of the Ordinary Shareholders as a class and has confirmed to
the Company that, in its opinion, the terms are fair and reasonable and provide
Ordinary Shareholders with an appropriate level of compensation for the
Enfranchisement.

3. The Concert Party

Following discussions with the Panel, it has been deemed that, for the purposes
of the Code, a group of Shareholders are acting in concert as defined in the
Code. These Shareholders collectively control 70.7 per cent. of the existing
Ordinary Shares and 42.6 per cent. of the existing 'A' (Non-Voting) Ordinary
Shares in issue. Assuming implementation of the Enfranchisement Proposals, they
will control 58.0 per cent. of the enlarged issued ordinary share capital.

The members of the Concert Party comprise members of the Zochonis family (being
descendants of the founder of the Company) together with various family and
related trusts, the Executive Directors of the Company, the trustees of the
Company's pension schemes and the trustee of the Paterson Zochonis Employee
Trust. In addition, a group of approximately 100 Shareholders, being certain
members of the wider Zochonis family and their associates and certain current
and former employees and former directors of the Company and its subsidiaries
and their associates, normally notify and consult with the Chairman or another
Director of the Company before dealing in any Ordinary Shares or 'A'
(Non-Voting) Ordinary Shares. Members of this group have, in the past, also
acted in accordance with the views expressed by members of the Concert Party.
The Panel has therefore deemed that the members of this group are acting in
concert with the Concert Party.

Further details of the members of the Concert Party, together with their
respective shareholdings as they are currently and as they will be following
implementation of the Enfranchisement Proposals, will be provided in the
circular to be sent to shareholders.

4. Current trading and future prospects

Overall, the underlying performance of the Group for the full year just ended is
expected to be broadly in line with that indicated by the Board at the interim
stage.

The challenging conditions that we reported in the first six months of the year
have continued into the second half with, in particular, the weak US dollar and
high oil prices impacting all our businesses globally.

During the second half:

   •Nigeria has performed strongly with improved sales and margins;
   •Asia has continued to experience pressure on sales growth;
   •in Europe, the UK has suffered a difficult few months reflecting poor
    consumer demand; Greece has experienced continued pressure on margins and,
    in Eastern Europe, Poland has performed largely as forecast and Russian exit
    costs have been in line with expectations; and
   •the investment portfolio has risen strongly and some gains have been
    realised.

We also indicated in the interim report that considerable action is being taken
to continue with our growth strategy and our margin improvement programme.
Further progress has been made including:

   •the milk factory in Nigeria is now in production;
   •our Chinese subsidiary has been sold;
   •the new soap bar factory project in Thailand is on target; and
   •the restructuring of our Eastern European business is progressing
    satisfactorily.

Whilst the pressures of certain raw materials costs and currency weakness will
continue this year, your Board believes that the Group is well placed to achieve
its objectives of continuing growth in the business and has the balance sheet
strength to sustain this growth.

In the absence of unforeseen circumstances, the Directors intend to recommend a
final dividend of 26.6p per share for the period ended 31 May 2005. The final
dividend together with the interim dividend of 8.65p per share will amount to
35.25p per share, an increase of 10.2 per cent. compared to the total dividend
paid per share for the period ended 31 May 2004.

5. Cancellation and repayment of the Preference Shares

The Board is proposing that each Preference Share should be cancelled in return
for a payment of £1.43 per 71/2 per cent. Cumulative Preference Share and £1.91
per 10 per cent. Cumulative Preference Share, together in each case with
dividends accrued to the repayment date. The total amount payable for the
repayment of the Preference Shares, before taking into account any accrued
dividend, is £14.7 million being £1.1million for the 71/2 per cent. Cumulative
Preference Shares and £13.6 million for the 10 per cent. Cumulative Preference
Shares.

The amount payable for the repayment of each 71/2 per cent. Cumulative
Preference Share and 10 per cent. Cumulative Preference Share is made up of the
repayment of their par value of £1 per share and a premium of 43 pence and 91
pence respectively. In each case the premium is designed to compensate
Preference Shareholders for the loss of income they will experience from the
cancellation and repayment of their Preference Shares based upon interest rates
currently prevailing in the UK.


6. Shareholder Meetings

The Enfranchisement Proposals and the Preference Shares Proposal are dependent
upon:

   •Ordinary Shareholders passing the resolutions relating to the
    Enfranchisement Proposals and Ordinary Shareholders and Preference
    Shareholders passing the resolutions relating to the cancellation and
    repayment of the Preference Shares at an Extraordinary General Meeting;
   •Ordinary Shareholders passing the necessary resolutions to approve the
    Preference Shares Proposals at a separate class meeting of the Ordinary
    Shareholders;
   •'A' (Non-Voting) Ordinary Shareholders passing the necessary resolution
    to approve the Enfranchisement Proposals and the Preference Shares Proposals
    at a separate class meeting of the 'A' (Non-Voting) Ordinary Shareholders;
    and
   •Preference Shareholders passing the necessary resolutions to approve the
    Preference Shares Proposals at separate class meetings of the Preference
    Shareholders.

The cancellation and repayment of the Preference Shares is conditional upon
confirmation by the Court.

The Enfranchisement Proposals are conditional on Admission but not conditional
on the Preference Shares Proposals.

7. Other Information

JPMorgan Cazenove Limited is acting as financial adviser to the Company and has
separately provided an opinion to the Company on the terms of the
Enfranchisement Proposals insofar as they affect the 'A' (Non-Voting) Ordinary
Shareholders. NM Rothschild & Sons Limited has provided an opinion to the
Company on the terms of the Enfranchisement Proposals insofar as they affect the
Ordinary Shareholders.


Contacts

Graham Calder, PZ Cussons                                          0161 491 8000

Malcolm Moir, JPMorgan Cazenove                                    020 7588 2828
Dermot McKechnie, JPMorgan Cazenove                                020 7588 2828


Richard Bailey, NM Rothschild & Sons Ltd                           0161 827 3800
Greg Cant, NM Rothschild & Sons


Terry Garrett, Weber Shandwick Square Mile                         020 7067 0736
John Moriarty, Weber Shandwick Square Mile




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