20 Oct 2006


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Nisa-Today's proposed merger with Costcutter - FULL STATEMENT


independent

The following statement was released by Nisa-Today's today on behalf of Dudley Ramsden, founder & executive chairman, Neil Turton, chief operating officer and John Schofield, chief financial officer:

"It has previously been announced that Nisa-Today's and Costcutter were in discussions relating to a proposed merger of the two companies.

Nisa-Today's has set up a committee (the "Merger Committee") to negotiate the detailed terms of the merger prior to those terms being put to the Board of Nisa-Today's and subsequently, the shareholders of Nisa-Today's for their approval.

This Merger Committee was yesterday, informed that the package of banking facilities being put together by the funding banks would be available only if substantial changes were made to the terms of the deal, which would involve conditions being attached to payments being made to the members and further costs being incurred by the newly merged company.

The principal cause of those changes was the uncertainty created by the cartel allegations made against the company, which have received wide publicity. Nisa-Today's set up an independent committee of non-executive directors, who have investigated these allegations in conjunction with leading competition lawyers. Having sought advice from leading competition lawyers the independent committee's interim conclusions published on 17th October 2006 were that Nisa-Today's was not party to a cartel. A further report is expected to be presented to the Board of Nisa-Today's (Holdings) on the 23rd October.

The Merger Committee has considered the request for material changes to be made to the terms proposed and, in light of its firm belief that it is not party to a market sharing cartel, has concluded that it cannot recommend the revised proposals, since it does not consider that they are in the best interests of Nisa-Today's member shareholders.

There is a full board meeting of Nisa-Today's scheduled for Monday 23rd October 2006, which was due to consider the final offer. Having rejected these late and material changes, it is unlikely that the Merger Committee will have a proposal to take for consideration to the Board on Monday.

Costcutter remains an important and valuable member of Nisa-Today's and has a long term supply agreement with the company. Nisa-Today's remains committed to working with all of its members to continue delivering best value in the future.

No further statement will be made until after the meeting of the Nisa-Today's (Holdings) Board Limited on Monday 23rd October."

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