BAE.L Regulatory News (BAE)

BEALE PLC

("Beale" or the "Company")

Posting of Prospectus in connection with the proposed acquisition of 19 department stores from Anglia Regional Co-operative Society Limited ("ARCS")

Proposed readmission of the Ordinary Shares to listing on the Official List of the UK Listing Authority and to trading on the London Stock Exchange

Proposed subscription by ARCS for new redeemable preference shares

and

Notice of Extraordinary General Meeting

Introduction

The Company announced on 6 April 2011 that it had entered into a conditional agreement to acquire the trade and assets of 19 department stores currently owned and operated by ARCS, a UK regional department store operator and co-operative society, for a total initial consideration of £7.5 million payable wholly in cash on completion of the Acquisition Agreement.

The Board is pleased to announce that the combined circular and prospectus containing information on the Proposed Acquisition has been posted to Shareholders.

The Proposed Acquisition and financing

The consideration payable in respect of the Proposed Acquisition will be financed entirely by ARCS through the provision by it to JEB of a £2.5 million unsecured term loan and its subscription for £8.5 million principal of redeemable preference shares to be issued by the Company. The Board believes that the financing structure agreed with ARCS provides an attractive form of long-term debt for the Enlarged Group, particularly given the current financing environment. It is the Board's view that the Group would not have been able to obtain equivalent funds from alternative sources on better terms.

On Completion, ARCS will also pay a cash contribution to JEB of £2.3 million, £1.2 million of which must, within 12 months of Completion, be spent or be contractually committed to be spent on improvements to some or all of the Target Stores. Further financial contributions to support the viability of certain stores and to enable them to integrate into the Beale format, amounting in aggregate in the first year following Completion to approximately £2.4 million, will also be made by ARCS. These payments will be made provided JEB continues to trade the relevant stores. Following Completion, ARCS will continue to own and operate various in-store concessions relating to the sale of furniture, beds and floor coverings and the provision of travel agency, optician and hairdressing services at certain of the Target Stores.

Suspension

Due to its size in relation to Beale, the Proposed Acquisition constitutes a reverse takeover under the Listing Rules. At the request of the Company, trading in the Ordinary Shares on the Main Market of the London Stock Exchange was suspended on 6 April 2011 pending Shareholder approval of the Proposed Acquisition and Completion.

Further proposals

New Articles

Given the need for Shareholder approval of the Proposed Acquisition and the related allotment and issue of the Preference Shares to ARCS, it is proposed that the approval of Shareholders also be sought at the Extraordinary General Meeting for the adoption of the New Articles in order to reflect the rights which will attach to the Preference Shares but also to update the Company's existing articles generally and to reflect various changes in company law which have become effective on full implementation of the Companies Act 2006 and other related legislation in the UK.

Performance Share Plan

The Company also proposes to introduce the Performance Share Plan to enable the granting of long-term equity-based awards to Company executives and employees which are aligned to the interests of Shareholders. The Remuneration Committee will supervise the operation of the Performance Share Plan. The Listing Rules require that Shareholder approval be sought for the adoption of any long-term incentive scheme. A full summary of the principal terms of the Performance Share Plan is set out in the Prospectus.

Extraordinary General Meeting and irrevocable commitments

An Extraordinary General Meeting of the Company is to be held at 11.00a.m. on 17 May 2011 at the Norfolk Royale Hotel, Richmond Hill, Bournemouth, BH2 6EN for the purpose of considering and, if thought fit, approving the Proposed Acquisition, the allotment and issue of the Preference Shares and the adoption by the Company of the New Articles and the Performance Share Plan. The notice convening the Extraordinary General Meeting is set out in the Prospectus.

The Company has obtained irrevocable undertakings to vote in favour of the Resolutions at the Extraordinary General Meeting from Shareholders (including each of the Directors and/or their relevant connected parties) holding 7,036,540 Ordinary Shares in aggregate, representing approximately 34.3 per cent. of the Company's existing issued share capital.

Importance of the Vote

The Resolutions relating to approval of the Acquisition Agreement, the issue of the Preference Shares on a non pre-emptive basis and adoption of the New Articles must be passed by Shareholders at the Extraordinary General Meeting in order for the Proposed Acquisition to proceed. If these Resolutions are not passed and the Proposed Acquisition does not take effect, there would be serious adverse consequences for the Group. The Company would be required to pay professional fees and expenses associated with the Proposed Acquisition of approximately £1.1 million (plus VAT) (which otherwise would have been payable out of the one-off cash contribution payment to be made by ARCS on Completion) out of its existing cash resources. The Company would not be able to operate within the borrowing limits available under its existing revolving credit loan facility, would breach its revised banking covenants and have insufficient working capital for the following 12 months. Furthermore, the net proceeds of the Term Loan and Preference Share subscription proposed to be made by ARCS, which would have been available for use in all of the Enlarged Group's businesses after satisfaction by JEB of the initial consideration payable under the Acquisition Agreement, would not be received. The consequences of this would (as described in the Prospectus) be materially detrimental to the interests of Shareholders.

Accordingly, the Directors believe it is important that Shareholders vote in favour of the relevant Resolutions in order that the Proposed Acquisition can proceed.

Proposed readmission of the Ordinary Shares to listing on the Official List of the UK Listing Authority and to trading on the London Stock Exchange

As the Proposed Acquisition is classed as a reverse takeover under the Listing Rules, upon the Effective Date the UK Listing Authority will cancel the listing of the Ordinary Shares. Applications will be made by the Company to the UK Listing Authority and the London Stock Exchange for the Ordinary Shares to be readmitted to listing on the Official List and to trading on the London Stock Exchange's Main Market for listed securities. Subject to the conditions of the Proposed Acquisition and the Introduction Agreement being satisfied or, where permitted, waived and subject also to the timing of the satisfaction or, where permitted, waiver of suchconditions,it is expected that Readmission will become effective and that dealings in the Ordinary Shares will recommence on the London Stock Exchange at 8.00 a.m. on 24 May 2011.

Expected timetable of principal events

Availability of prospectus

Copies of the Prospectus will be available for inspection during normal business hours on any weekday (Saturday, Sunday and public holidays excepted) at the registered office of the Company, which is located at The Granville Chambers, 21 Richmond Hill, Bournemouth, Dorset BH2 6BJ and on the Company's website www.beales.co.uk 

Further information

Beale PLC

Tony Brown, Chief Executive

Ken Owst, Finance Director

Tel: 01202 552022

Shore Capital (Sponsor and Financial Adviser)

Andrew Raca

Anita Ghanekar

Edward Mansfield

Tel 0207 408 4090

DEFINITIONS

The following definitions apply throughout this announcement unless the context requires otherwise: