Disposal

Boot(Henry) PLC
01 April 2003

Proposed disposal ('Disposal') of Henry Boot Homes 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
Homes Limited ('Henry Boot Homes') to David Wilson Homes Limited ('David Wilson
Homes').

The total amount expected to be received in respect of the Disposal and the
Dividend is approximately £47.8 million. The purchase price payable for the
entire issued share capital of Henry Boot Homes will be approximately £29.1
million. In addition, approximately £5.4 million will be paid to Henry Boot in
satisfaction of the Dividend declared by Henry Boot Homes on or before 1 April
2003 and Henry Boot will be paid approximately £13.4 million as repayment of
intra-group indebtedness due to Henry Boot and other members of the Continuing
Group. The precise figure payable for the entire issued share capital of Henry
Boot Homes will be calculated in accordance with a completion accounts exercise.

Of the total amount payable, approximately £15.9 million will be paid on
completion and the remainder of approximately £31.9 million in two equal
deferred instalments on 1 January 2004 and 1 September 2004. The deferred
instalments will be secured by way of a bank guarantee.

Commenting on the Disposal, Jamie Boot, Group Managing Director, said:

'We have reviewed the opportunities to realise value from Henry Boot Homes with
regard to its competitive position in a consolidating house building market and
concluded that on the right financial terms, the greatest value for Henry Boot
shareholders could be achieved from a disposal that will provide the Group with
the resources to invest in its core activities.'

In view of its size, the Disposal is conditional upon the approval of Henry
Boot's Ordinary Shareholders, which is to be sought at an Extraordinary General
Meeting of the Company to be held on 17 April 2003 (the 'EGM').

A circular (the 'Circular') containing further details on the Disposal and
convening an EGM will be sent to Shareholders later 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

Following a review of business strategy, the Board announced, in December 2002,
that it had disposed of Henry Boot Management Limited, its specialist
construction activities, to concentrate on a more focused portfolio of
activities. This review further concluded that shareholders' interests would be
best served by disposing of Henry Boot Homes and concentrating the Group's
activities principally on property development, land management and building and
civil engineering.

Housebuilding is a highly capital-intensive activity that requires substantial
continued investment, particularly in respect of the acquisition of land. In
addition, the housebuilding industry is undergoing a period of consolidation in
which there has been a move away from regional players such as Henry Boot Homes,
towards national players, such as David Wilson Homes. The disposal of Henry Boot
Homes will free up significant capital for the Group and reduce the Group's
exposure to the risks inherent in the housebuilding industry. The Board
considers that, given Henry Boot Homes's requirement for significant levels of
investment to sustain future growth and the consolidation in the sector, this is
an appropriate time to realise its investment in Henry Boot Homes.  The Disposal
will release resources to Henry Boot to invest in its core activities.

Information on Henry Boot Homes

Henry Boot Homes is a regional builder of houses which are sold under the Henry
Boot Homes brand.

In the year ended 31 December 2002, Henry Boot Homes completed 694 house sales
with an average selling price of £124,000. Henry Boot Homes generated turnover
of £88.7 million. Operating profit before interest and tax for the period was
£9.5 million and the net assets of Henry Boot Homes at 31 December 2002 were
£16.4 million, after taking into account net intra-group indebtedness of £9.1
million.

Principal terms of the Disposal

The consideration expected to be received in respect of the Disposal is
approximately £47.8 million which will be payable in accordance with the
following payment schedule:

•       the payment of £15.9 million (a net amount of £14.2 million after the
deduction of Henry Boot's transaction costs) on completion; and

•       two further equal instalments of approximately £15.9 million each on 1
January 2004 and 1 September 2004. These two deferred instalments will be
secured by way of a bank guarantee.

The total consideration will be adjusted through a completion accounts process.

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

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

Financial effects of the Disposal

Following the Disposal, the pro forma net assets of the Continuing Group, being
the net assets of the Continuing Group as at 31 December 2002 had the Disposal
been undertaken on 31 December 2002, would be £115.3 million including cash of
£28.1 million, a debtor in respect of the Disposal of £32.4 million (collectable
in cash by way of the two deferred consideration instalments) and a creditor in
respect of bank and other loans of £10.0 million.

The net cash receivable by the Group as consideration for Henry Boot Homes under
the terms of the Disposal will be invested in the Group's property development,
land management and building and civil engineering activities.

Current trading and prospects

Henry Boot has announced today its unaudited preliminary results for the year
ended 31 December 2002, reporting turnover of £217.3 million (2001: £231.5
million) and profit before tax of £17.1 million (2001: £13.4 million). Net
assets as at 31 December 2002 were £93.9 million (2001: £81.6 million).

The Board believes that the financial and trading prospects of the Continuing
Group (excluding Henry Boot Homes) for the current financial year are
encouraging and that the Group's core activities will benefit from investment as
a result of capital realised from the Disposal.

Further information on the performance of Henry Boot is set out in the
preliminary statement of results for the year ended 31 December 2002, announced
today.

Irrevocable undertakings

Irrevocable undertakings to vote in favour of the Resolution have been received
from the Directors and certain other Shareholders in respect of, in aggregate,
10,244,572 Ordinary Shares, which represents approximately 39.6 per cent. of the
existing issued ordinary share capital of Henry Boot.

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 at Fountain Precinct, Balm Green, Sheffield S1
1RZ at 10.30 am on 17 April 2003, notice of which is set out in the Circular.
The Resolution will be proposed as an ordinary resolution to approve the
Disposal and any non-material variations to the Disposal Agreement.

Other information

Two copies of the Circular will shortly be submitted to the UK Listing Authority
and will be available for inspection at the UK Listing Authority's Document
Viewing Facility which is situated at:

Financial Services Authority
25 The North Colonnade
Canary Wharf
London E14 5HS



Enquiries

Henry Boot                                           0114 255 5444
John S Reis, Chairman
Jamie Boot, Group Managing Director

KPMG Corporate Finance                               0113 231 3000
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.


                      This information is provided by RNS
            The company news service from the London Stock Exchange