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Homestyle Group PLC (HME)

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Friday 17 November, 2006

Homestyle Group PLC

Update: re possible offer

Homestyle Group PLC
17 November 2006



                                                              17th November 2006


               HOMESTYLE GROUP PLC ('Homestyle' or 'the Company')


  PROPOSAL TO MINORITY SHAREHOLDERS BY STEINHOFF INTERNATIONAL HOLDINGS LIMITED
                     ('SIL') AND STEINHOFF EUROPE AG ('SE')


Following the recapitalization of Homestyle concluded in July 2005 ('the
recapitalization'), Steinhoff Europe AG, a wholly owned subsidiary of Steinhoff
International Holdings Limited, acquired a 61% interest in Homestyle.  SIL is
listed in Johannesburg on the JSE Limited.



Recent purchases of Homestyle shares by large shareholders have led to the
combined shareholding of the Company's top three shareholders, together with the
holding of the Employee Benefit Trust, exceeding 75%, bringing the free-float of
Homestyle, as defined and prescribed by the rules and requirements of the UK
Listing Authority, to below 25%. This will result in the Company being requested
to restore its free-float, failing which within a period of time, its listing
may be suspended.  Consequently, SIL and SE have approached the Homestyle Board
with a proposal to acquire all those Homestyle shares SE does not already own.
Discussions are at an advanced stage.



The offer, were it to be made, would comprise a cash offer of 100 pence per
Homestyle Ordinary Share.  The offer would also include a SIL share alternative
whereby Homestyle shareholders would be able to elect to receive a minimum of
0.736 SIL ordinary shares for each of their Homestyle Ordinary Shares.  At last
night's closing market price of a SIL ordinary share of 23.82 ZAR, and based
upon the prevailing exchange rate, the share alternative values each Homestyle
Ordinary Share at approximately 128 pence.



The share alternative is considered appropriate for the purposes of availing
those minority shareholders who followed their rights pursuant to the
recapitalization and /or remained invested as shareholders in Homestyle, with an
opportunity to continue to participate in the recovery of Homestyle (indirectly
through SIL) and the global, vertically integrated business model and strategy
of SIL.



At the time of the announcement of its unaudited preliminary results for the 61
weeks ended 1 July 2006, made on 30 August 2006, Homestyle indicated that
trading conditions within the markets in which it operates were testing for its
businesses, but that decisive actions were contributing to improvements in the
business and better positioned trading operations.



Despite an increasingly competitive market, the Beds division has been
rejuvenated by the appointment of new management over the last year and is back
on an expansion track following the loss of some major concession partnerships
in 2005/6.  From September '06 to December '06 23 new stores will have opened.
The stores that have already opened are currently trading in line with plan.



The Harveys furniture division continues to face challenging conditions.  The
organisation has been restructured in recent months and distribution systems
have been improved.  Additional marketing and product support has been given by
the Group's majority shareholder, SE, to assist in realising the longer term
ambitions for the business.  In particular, we have already made progress in
improving elements of our product offer for the important post Christmas trading
period.  Six smaller stores have been closed as the most appropriate store model
to generate success is refined.  However, as we have consistently indicated, the
recovery is of a long-term nature.



The Group is about to enter its key trading period for the financial year, which
will determine the outcome for the year, and is making early progress in
addressing the historic weaknesses in the business.



A further announcement will be made in due course.  Meanwhile, given the
likelihood of the offer being made by SIL, shareholders are advised to exercise
caution in dealing in their Homestyle shares until further information is
forthcoming.



This announcement has been made with the consent of SIL and SE.



In accordance with Rule 2.10 of the City Code on Takeovers and Mergers ('the
Code'): Homestyle confirms that it has 259 075 848 ordinary shares of 25 pence
each in issue and admitted to trading on the London Stock Exchange under the LSE
code: 'HME' and UK ISIN code GB0007501348.





ENQUIRIES



Hudson Sandler

Jessica Rouleau/Kate Hough

Tel : 0207 796 4133



Dealing disclosure requirements



Under the provisions of Rule 8.3 of the Code, if any person is, or becomes, '
interested' (directly or indirectly) in 1% or more of any class of 'relevant
securities' of Homestyle or SIL, all 'dealings' in any 'relevant securities' of
Homestyle or SIL (including by means of an option in respect of, or a derivative
referenced to, any such 'relevant securities') must be publicly disclosed by no
later than 3.30 pm (London time) on the London business day following the date
of the relevant transaction. This requirement will continue until the date on
which the offer becomes, or is declared, unconditional as to acceptances, lapses
or is otherwise withdrawn or on which the 'offer period' otherwise ends. If two
or more persons act together pursuant to an agreement or understanding, whether
formal or informal, to acquire an 'interest' in 'relevant securities' of
Homestyle or SIL they will be deemed to be a single person for the purpose of
Rule 8.3.



Under the provisions of Rule 8.1 of the Code, all 'dealings' in 'relevant
securities' of Homestyle or SIL by the potential offeror or Homestyle, or by any
of their respective 'associates', must be disclosed by no later than 12.00 noon
(London time) on the London business day following the date of the relevant
transaction.



A disclosure table, giving details of the companies in whose 'relevant
securities' 'dealings' should be disclosed, and the number of such securities in
issue, can be found on the Takeover Panel's website at
www.thetakeoverpanel.org.uk.



'Interests in securities' arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an 'interest' by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities. Terms in quotation marks
are defined in the Code, which can also be found on the Takeover Panel's
website. If you are in any doubt as to whether or not you are required to
disclose a 'dealing' under Rule 8, you should consult the Takeover Panel.






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

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