A.S. Watson

Offer Document Posted

A.S. Watson
02 June 2005


Embargoed until 7.00 a.m. (London time) on 2 June 2005

                                                                     2 June 2005

                                A.S. WATSON GROUP
                             RECOMMENDED CASH OFFER of
                 197 pence in cash for each Merchant Retail Share
                              UBS INVESTMENT BANK
                                  on behalf of
                             A.S. WATSON (P&C UK) LTD.
                          a wholly-owned subsidiary of 
                           HUTCHISON WHAMPOA LIMITED
                  and (in the United States) by the Offeror
                           MERCHANT RETAIL GROUP PLC
                             Offer Document Posted

Further to the announcement of the Offer, made on 24 May 2005, the Offeror is
pleased to announce that the Offer Document containing the full terms and
conditions of the Offer has been posted to Merchant Retail Shareholders and, for
information only, to participants in the Merchant Retail Share Schemes (other
than to persons with addresses in Restricted Jurisdictions) on 1 June 2005,
together with the Form of Acceptance.

The first closing date of the Offer is 3.00 p.m. (London time) on 22 June 2005.

Terms used in this announcement shall have the meaning given to them in the
Offer Document.

A.S. Watson
Malina Ngai (Tel: +852 2608 8408)

UBS Investment Bank (financial adviser to A.S. Watson)
Emma Goodrick (Tel: +44 (0) 207 568 0000)
Seamus Moorhead (Tel: +44 (0) 207 568 0000)
Jackie Arnott-Smith (Tel: +44 (0) 207 568 0000)

Brunswick (PR adviser to A.S. Watson)
Andrew Fenwick (Tel: +44 (0) 207 404 5959)

This announcement does not constitute an offer to sell or the solicitation of an
offer to subscribe for or buy any security, nor is it a solicitation of any vote
or approval in any jurisdiction, nor shall there be any sale, issuance or
transfer of the securities referred to in this announcement in any jurisdiction
in contravention of applicable law. The Offer will be made solely by the Offer
Document and the Form of Acceptance accompanying the Offer Document, which will
contain the full terms and conditions of the Offer, including details of how the
Offer may be accepted.

UBS Investment Bank is acting exclusively for A.S. Watson and the Offeror in
connection with the Offer and no one else and will not be responsible to anyone
other than A.S. Watson and the Offeror for providing the protections afforded to
clients of UBS Investment Bank or for providing advice in relation to the Offer.

The release, publication or distribution of this announcement in certain
jurisdictions may be restricted by law and therefore persons in any such
jurisdictions into which this announcement is released, published or distributed
should inform themselves about and observe such restrictions.

Copies of this announcement and any formal documentation relating to the Offer
are not being, and must not be, directly or indirectly, mailed or otherwise
forwarded, distributed or sent in or into or from any Restricted Jurisdiction
and persons seeking such documents (including custodians, nominees and trustees)
must not mail or otherwise forward, distribute or send it in or into or from a
Restricted Jurisdiction. The Offer (unless otherwise determined by the Offeror
and permitted by applicable law and regulation), will not be made, directly or
indirectly, in or into, or by the use of mails or any means of instrumentality
(including, without limitation, telephonically or electronically) of interstate
or foreign commerce of, or any facility of a national, state or other securities
exchange of a Restricted Jurisdiction and the Offer will not be capable of
acceptance by any such use, means, instrumentality or facilities.

The ability of Merchant Retail Shareholders who are not resident in the United
Kingdom to accept the Offer may be affected by the laws of the relevant
jurisdictions in which they are located. Persons who are not resident in the
United Kingdom should inform themselves of, and observe, any applicable

In accordance with normal UK market practice, the Offeror, Hutchison Whampoa,
A.S. Watson or their nominees or brokers (acting as agents) may from time to
time make certain purchases of, or arrangements to purchase, Merchant Retail
Shares outside the United States, other than pursuant to the Offer, before or
during the period in which the Offer remains open for acceptance. These
purchases may occur either in the open market at prevailing prices or in private
transactions at negotiated prices. Any information about such purchases will be
disclosed as required in the UK and communicated in the US by way of an
announcement by or on behalf of the Offeror.

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