Centrica plc Launches Cash Tender Offers

Centrica plc Launches Cash Tender Offers

Centrica PLC

NOT FOR DISTRIBUTION IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS (INCLUDING PUERTO RICO, THE U.S. VIRGIN ISLANDS, GUAM, AMERICAN SAMOA, WAKE ISLAND AND THE NORTHERN MARIANA ISLANDS), ANY STATE OF THE UNITED STATES OF AMERICA OR THE DISTRICT OF COLUMBIA (the United States) OR IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN THE REPUBLIC OF ITALY (Italy).

23 November 2010

CENTRICA PLC (the Company)

LAUNCHES CASH TENDER OFFERS

The Company announces that it is inviting holders of its outstanding £400,000,000 5.875 per cent. Notes due 2012 (ISIN: XS0137672381) (the Sterling 2012 Notes), €750,000,000 7.125 per cent. Notes due 2013 (ISIN: XS0402535131) (the Euro Notes) and £350,000,000 5.125 per cent. Notes due 2014 (ISIN: XS0416397098) (the Sterling 2014 Notes and, together with the Sterling 2012 Notes, the Sterling Notes and, altogether with the Euro Notes, the Notes and each a Series, and all holders of such Notes the Noteholders) to tender their Notes for purchase by the Company, for cash (each such invitation, an Offer and together, the Offers).

The Company is seeking to repurchase some of its debt with the aim of reducing the amount of debt maturing in the period up until 2014 and efficiently managing its debt maturity profile.

The Offers are made on the terms and subject to the conditions contained in the tender offer memorandum dated 23 November 2010 (the Tender Offer Memorandum) prepared by the Company in connection with the Offers, and are subject to the offer and distribution restrictions set out below and as more fully described in the Tender Offer Memorandum. Capitalised terms used but not otherwise defined in this announcement shall have the meanings given to them in the Tender Offer Memorandum.

Noteholders are advised to read carefully the Tender Offer Memorandum for full details of, and information on, the procedures for participating in, the Offers.

The Company will pay for Notes validly tendered and accepted by it for purchase pursuant to the relevant Offer a cash purchase price (each a Purchase Price) expressed as a percentage and determined by reference to the sum (each sum, a Purchase Yield) of the relevant Purchase Spread, as determined pursuant to the Modified Dutch Auction Procedure, and (A) in the case of the Sterling Notes, the relevant Benchmark Security Rate and (B) in the case of the Euro Notes, the Interpolated Mid-Swap Rate. The Company will also pay an Accrued Interest Payment in respect of Notes accepted for purchase pursuant to the Offers, all as further described in the Tender Offer Memorandum.

The final determination of the Purchase Prices for the Notes will be made in accordance with market convention at or around noon (London time) on the Business Day following the Expiration Deadline (expected to be Wednesday, 1 December 2010) (the Pricing Time) and is intended to reflect a yield to maturity of the relevant Notes on the Settlement Date based on the relevant Purchase Yield.

The Company proposes to accept for purchase pursuant to the Offers up to £400,000,000 (or the equivalent amount in euro) in aggregate nominal amount of the Notes validly tendered for purchase pursuant to the Offers (the Maximum Acceptance Amount), subject to the right of the Company, in its sole discretion, to accept a greater amount of Notes for purchase pursuant to any or all of the Offers or none of such Notes. Accordingly, this could result in the Company accepting for purchase more or less (or none) of the Notes of one Series as compared to the other Series.

A summary of the terms appears below:

	Â	ISIN / Common Code	Â	Outstanding nominal amount	Â	Benchmark	Â	Maximum Purchase Spread	Â	Maximum Acceptance Amount
The Sterling 2012 Notes		XS0137672381 / 013767238		£400,000,000		5 per cent. U.K. Treasury Gilt due 2012 (ISIN: GB0030468747)		+115 bps		Up to £400,000,000 (or the equivalent amount in euro) (subject to the right of the Company to amend such amount as provided in the Tender Offer Memorandum)
The Euro Notes		XS0402535131 / 040253513		€750,000,000		Interpolated Mid-Swap Rate		+15 bps
The Sterling 2014 Notes		XS0416397098 / 041639709		£350,000,000		5 per cent. UK Treasury Gilt due 2014 (ISIN: GB0031829509)		+100 bps

In order to participate in an Offer, Noteholders must validly tender their Notes for purchase by delivering, or arranging to have delivered on their behalf, a valid Tender Instruction that is received by the Tender Agent by 3.00 p.m. (London time) on Tuesday, 30 November 2010, unless extended, re-opened, amended and/or terminated as provided in the Tender Offer Memorandum (the Expiration Deadline). The deadlines set by any intermediary or clearing system will be earlier than the deadlines specified in the Tender Offer Memorandum. Tender Instructions will be irrevocable except in the limited circumstances described in the Tender Offer Memorandum.

The Company may, in its sole discretion, extend, re-open, amend, waive any condition of, and/or terminate the Offers at any time (subject to applicable law), all as further described in the Tender Offer Memorandum.

Unless stated otherwise, announcements in connection with the Offers will be made through RNS and/or the issue of a press release to a Notifying News Service and may also be found on the relevant Reuters International Insider Screen and be made by the delivery of notices to the Clearing Systems for communication to Direct Participants. Copies of all such announcements, press releases and notices can also be obtained from the Tender Agent, the contact details for which can be found below. Significant delays may be experienced where notices are delivered to the Clearing Systems and Noteholders are urged to contact the Tender Agent for the relevant announcements during the course of the Offers. In addition, holders of Notes may contact the Dealer Managers for information, the contact details for which can be found below.

The anticipated transaction timetable is summarised below:

Events	Â	Times and Dates
Commencement of the Offers		Tuesday, 23 November 2010
Expiration Deadline		3.00 p.m. (London time) on Tuesday, 30 November 2010
Announcement of Offer Results Announcement of whether the Company will accept valid tenders of Notes for purchase pursuant to the Offers and, if accepted, (i) the Purchase Spreads, (ii) the Series Acceptance Amounts and (iii) any Scaling Factors.		At or around 9.00 a.m. (London time) before the Pricing Time on the Business Day following the above Expiration Deadline.
Pricing Time Determination of the relevant Benchmark Security Rates and the Interpolated Mid-Swap Rate and calculation of the relevant Purchase Prices for the Notes.		At or around noon (London time) on the Business Day following the above Expiration Deadline.
Announcement of Pricing of Notes Announcement of (i) the Interpolated Mid-Swap Rate, (ii) the relevant Benchmark Security Rate, (iii) the Purchase Prices for Notes accepted by the Company for purchase pursuant to the Offers, and (iv) the Accrued Interest Payment for the Notes.		As soon as reasonably practicable after the Pricing Time.
Expected Settlement Date		Monday, 6 December 2010

This is an indicative timetable and may be subject to change. Noteholders are advised to check with any bank, securities broker or other intermediary through which they hold Notes when such intermediary needs to receive instructions from a Noteholder in order for that Noteholder to be able to participate in, or (in the limited circumstances in which revocation is permitted) revoke their instruction to participate in, the Offers by the deadlines set out above.

HSBC Bank plc and The Royal Bank of Scotland plc are acting as Dealer Managers for the Offers. Lucid Issuer Services Limited is acting as Tender Agent. For detailed terms of the Offers please refer to the Tender Offer Memorandum which (subject to distribution restrictions) can be obtained from the Dealer Managers and the Tender Agent referred to below.

DEALER MANAGERS
HSBC Bank plc 8 Canada Square London E14 5HQ United Kingdom Telephone: [phone] / 1444 Attention: Liability Management Group Email: [e-mail]	Â	The Royal Bank of Scotland plc 135 Bishopsgate London EC2M 3UR United Kingdom Telephone: [phone] / 5991 Attention: Gianmarco Deiana / Ally Richardson Email: [e-mail]
TENDER AGENT
Lucid Issuer Services Limited Leroy House 436 Essex Road London N1 3QP United Kingdom Telephone: [phone] Fax: [phone] Attention: Lee Pellicci / Thomas Choquet Email: [e-mail]

Journalists and news organisations with enquiries in respect of the Company should contact the Company's Media Relations Team on [phone].

DISCLAIMER

This announcement must be read in conjunction with the Tender Offer Memorandum. This announcement and the Tender Offer Memorandum contain important information which should be read carefully before any decision is made with respect to the Offers. If any Noteholder is in any doubt as to the action it should take, it is recommended to seek its own financial advice, including as to any tax consequences, from its stockbroker, bank manager, solicitor, accountant or other independent financial adviser. Any individual or company whose Notes are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee must contact such entity if it wishes to tender Notes in the Offers. None of the Company, the Dealer Managers or the Tender Agent nor any of their respective directors, employees or affiliates makes any recommendation whether Noteholders should tender Notes in the Offers.

OFFER AND DISTRIBUTION RESTRICTIONS

Neither this announcement nor the Tender Offer Memorandum constitutes an invitation to participate in the Offers in any jurisdiction in which, or to any person to or from whom, it is unlawful to make such invitation or for there to be such participation under applicable securities laws. The distribution of this announcement and the Tender Offer Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession this announcement and/or the Tender Offer Memorandum comes are required by each of the Company, the Dealer Managers and the Tender Agent to inform themselves about, and to observe, any such restrictions.

United States

The Offers are not being made, and will not be made, directly or indirectly in or into, or by use of the mail of, or by any means or instrumentality of interstate or foreign commerce of, or of any facilities of a national securities exchange of, the United States. This includes, but is not limited to, facsimile transmission, electronic mail, telex, telephone, the internet and other forms of electronic communication. Accordingly, copies of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offers are not being, and must not be, directly or indirectly mailed or otherwise transmitted, distributed or forwarded (including, without limitation, by custodians, nominees or trustees) in or into the United States or to any person located or resident in the United States and the Notes cannot be tendered in the Offers by any such use, means, instrumentality or facility or from within the United States or by any person located or resident in the United States. Any purported tender of Notes resulting directly or indirectly from a violation of these restrictions will be invalid and any purported tender of Notes made by any person located in the United States or any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States will be invalid and will not be accepted.

Each holder of Notes participating in an Offer will represent that it is not located in the United States and is not participating in such Offer from the United States or it is acting on a non-discretionary basis for a principal located outside the United States that is not giving an order to participate in such Offer from the United States. For the purposes of this and the above paragraph, United States means United States of America, its territories and possessions (including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands), any state of the United States of America and the District of Columbia.

Italy

The Offers are not being made, directly or indirectly, in the Republic of Italy (Italy). The Offers, this announcement and the Tender Offer Memorandum have not been submitted to the clearance procedures of the Commissione Nazionale per le Società e la Borsa (CONSOB) pursuant to Italian laws and regulations. Accordingly, holders of Notes are notified that, to the extent such holders are located or resident in Italy, the Offers are not available to them and they may not tender Notes for purchase pursuant to the Offers and, as such, any Tender Instructions received from or on behalf of such persons shall be ineffective and void, and neither this announcement, the Tender Offer Memorandum nor any other documents or materials relating to the Offers or the Notes may be distributed or made available in Italy as part of a public purchase or exchange offer (offerta pubblica di acquisto o di scambio) (as defined in Article 1, paragraph 1(v) of Italian Legislative Decree No. 58 of 24 February 1998, as amended) from which no applicable exemption is available.

United Kingdom

The communication of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offers is not being made and such documents and/or materials have not been approved by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000. Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial promotion is only being made to those persons in the United Kingdom falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Financial Promotion Order)) or persons who are within Article 43 of the Financial Promotion Order or any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order.

Insofar as the communication of this announcement, the Tender Offer Memorandum and any other documents or materials relating to the Offers is made to or directed at investment professionals (as defined in Article 19(5) of the Financial Promotion Order), it is made to or directed at persons having professional experience in matters relating to investments, and any investment or investment activity to which it relates is available only to such persons or will be engaged in only with such persons, and persons who do not have professional experience in matters relating to investments should not rely upon it.

Belgium

Neither this announcement, the Tender Offer Memorandum nor any other documents or materials relating to the Offers have been submitted to or will be submitted for approval or recognition to the Belgian Banking, Finance and Insurance Commission (Commission bancaire, financière et des assurances/Commissie voor het Bank-, Financie- en Assurantiewezen) and, accordingly, the Offers may not be made in Belgium by way of a public offering, as defined in Article 3 of the Belgian Law of 1 April 2007 on public takeover bids or as defined in Article 3 of the Belgian Law of 16 June 2006 on the public offer of placement instruments and the admission to trading of placement instruments on regulated markets (together, the Belgian Public Offer Law), each as amended or replaced from time to time. Accordingly, the Offers may not be advertised and the Offers will not be extended, and neither this announcement, the Tender Offer Memorandum nor any other documents or materials relating to the Offers (including any memorandum, information circular, brochure or any similar documents) has been or shall be distributed or made available, directly or indirectly, to any person in Belgium other than "qualified investors" in the sense of Article 10 of the Belgian Public Offer Law (as amended from time to time), acting on their own account. Insofar as Belgium is concerned, this announcement and the Tender Offer Memorandum have been issued only for the personal use of the above qualified investors and exclusively for the purpose of the Offers. Accordingly, the information contained in this announcement and the Tender Offer Memorandum may not be used for any other purpose or disclosed to any other person in Belgium.

France

The Offers are not being made, directly or indirectly, to the public in the Republic of France (France). Neither this announcement, the Tender Offer Memorandum nor any other document or materials relating to the Offers have been or shall be distributed to the public in France and only (i) providers of investment services relating to portfolio management for the account of third parties (personnes fournissant le service d'investissement de gestion de portefeuille pour compte de tiers) and/or (ii) qualified investors (investisseurs qualifiés), in each case, other than individuals acting for their own account, all as defined in, and in accordance with, Articles L.411-1, L.411-2 and D.411-1 to D.411-3 of the French Code monétaire et financier, are eligible to participate in the Offers. Neither this announcement nor the Tender Offer Memorandum have been, or will be, submitted for clearance to or approved by the Autorité des Marchés Financiers.