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Rugby Estates plc ("Rugby Estates" or the "Company")

Proposed Return of Cash to Shareholders of 45 pence per Existing Ordinary Share by way of either a Redemption Payment or a Special Dividend and Notice of General Meeting

1. Introduction

Earlier this year, and following a strategic review of its business, the Company returned 50 pence per share to Shareholders by way of a B and C Share scheme. As announced on 4 November 2009, the Company recently sold two industrial properties for an aggregate consideration of £5.01 million pursuant to the Company's strategy to concentrate on its asset management business and to return capital realised on the disposal of its property portfolio to Shareholders. Accordingly, the Company intends to make a further return of cash of 45 pence per share to Shareholders pursuant to the Proposals. Full details of the Proposals are set out in a Circular which is expected to be posted to Shareholders today and are summarised below. Terms used in this announcement have the meaning set out in Appendix 1.

The Proposals involve the issue to Shareholders of B Shares and/or C Shares which is intended to give Shareholders, where eligible under their prevailing tax regime (such as in the UK), the flexibility to receive a return of cash from the Company as capital or income for tax purposes, or a combination of the two. The Directors believe the Proposals represent the most efficient and effective way to return cash to Shareholders.

The Proposals require the approval of Shareholders, which will be sought at a General Meeting to be held at 4 Farm Street, Mayfair, London W1J 5RD at 10.00 a.m. on 12 January 2010. The notice of the General Meeting is set out in the Circular being sent to Shareholders.

It is intended that the market price of the Company's ordinary shares should remain approximately equal before and after the return of cash, subject to market movements, and consequently the

Proposals (through the Share Capital Consolidation) will reduce the number of such ordinary shares in issue to reflect the return of cash to Shareholders. For every 6 Existing Ordinary Shares held at the Record Time (expected to be at 5.00 p.m. on 12 January 2010), Shareholders will receive 5 New Ordinary Shares. The New Ordinary Shares will be traded on AIM in the same way as Existing Ordinary Shares and will be equivalent in all material respects to the Existing Ordinary Shares, including as to their dividend and voting rights.

At the General Meeting approval will also be sought for resolutions, among other things, to renew the Company's authority to make market purchases of shares and to renew the Directors' authority to allot shares pursuant to section 551 of the 2006 Act and to disapply section 561 of the 2006 Act, in each case to take account of the Share Capital Consolidation.

2. Summary of the Proposals

The implementation of the Proposals involves a number of steps, which are all subject to approval of Shareholders at the General Meeting.

  -  Each Shareholder will be given the option to receive either a B Share or a C Share in respect of each Existing Ordinary Share held by them on the Record Date. The B Shares will entitle their holders to receive the Redemption Payment of 45 pence per B Share and the C Shares will entitle their holders to receive the Special Dividend of 45 pence per C Share.

  -  Shareholders will receive C Shares unless they elect for B Shares.

  -  Following the General Meeting and the issue of the B Shares and C Shares, the B Shares will be redeemed by the Company in return for payment of 45 pence per B Share to the holders of such

B Shares and a special dividend of 45 pence per C Share will be paid to the holders of the C Shares.

  -  Following the Special Dividend becoming payable, the C Shares will be reclassified as Deferred Shares of negligible value which the Company will be entitled to repurchase for an aggregate consideration of one pence.

  -  Following the allotment of the B Shares and C Shares, the ordinary share capital will be subdivided and consolidated on the basis of 5 New Ordinary Shares for every 6 Existing

Ordinary Shares held. Under the Share Capital Consolidation shareholders will, therefore, receive

5 New Ordinary Shares for every 6 Existing Ordinary Shares held by them at the Record Time.

The Share Capital Consolidation is intended to maintain comparability of the Company's future and historic share price.

  -  New Ordinary Shares will be traded on AIM in the same way as Existing Ordinary Shares and will be equivalent in all other respects to the Existing Ordinary Shares, with the exception of the difference in nominal value and subject to the rights of the B Shares and the C Shares.

Further details of the steps required to implement the Proposals are set out in the Circular to Shareholders.

3. The Return of Cash

The Proposals will return 45 pence per Existing Ordinary Share to Shareholders. Under the Proposals, Shareholders will receive, in respect of their holding of Existing Ordinary Shares at the Record Time:

  -  1 B Share or 1 C Share (as they may elect) for every 1 Existing Ordinary Share; and

  -  5 New Ordinary Shares for every 6 Existing Ordinary Shares.

Shareholders will be able to elect between the following Alternatives as to how they receive their cash:

  -  the Capital Alternative in respect of the B Shares (cash expected to be sent on or around

22 January 2010); and/or

  -  the Dividend Alternative in respect of the C Shares (cash expected to be sent on or around

22 January 2010).

4. The Alternatives

The Alternatives available to Shareholders are summarised below and explained in further detail in Part 5 of the Circular. Shareholders may split the aggregate amount to be returned to them between the Alternatives.

Shareholders who do not make a valid election will be deemed to have elected for the Dividend Alternative in respect of ALL of their Share Entitlement.

The general guidance on the UK tax treatment included below is only a summary, is based on current UK law and practice as at the date of the Circular and applies only to Shareholders who are resident and, if they are individuals, ordinarily resident in the UK for tax purposes and who hold their Existing Ordinary Shares, B Shares and/or C Shares beneficially as investments and not on trading account. UK tax resident Shareholders should read Part 7 of the Circular as the Alternatives will have different UK tax consequences.

Shareholders who are in any doubt as to their tax position, or are subject to tax in a jurisdiction other than the United Kingdom, should consult an appropriate professional adviser without delay.

  -  Alternative 1 - Capital Alternative (B Shares)

Shareholders who elect for the Capital Alternative in respect of some or all of their Share Entitlement will receive one B Share for each corresponding Existing Ordinary Share they hold at the Record Time. It is expected that each B Share will subsequently be redeemed by the Company for 45 pence by 19 January 2010 and that the redemption proceeds will be sent to Shareholders on or around 22 January 2010.

The amounts received under the Capital Alternative should generally be taxed as capital for UK tax purposes. UK tax resident Shareholders should read Part 7 of the Circular for further information. The attention of Non-United Kingdom Shareholders is drawn to paragraph 6 of Part 5 of the Circular.

  -  Alternative 2 - Dividend Alternative (C Shares)

Shareholders who elect or are deemed to have elected for the Dividend Alternative in respect of some or all of their Share Entitlement will receive one C Share for each corresponding Existing Ordinary Share they hold at the Record Time. A Special Dividend of 45 pence will become payable on each such C Share by 19 January 2010 and we expect to send the Special Dividend to such Shareholders on or around 22 January 2010. Following declaration of the Special Dividend each C Share will be reclassified as a Deferred Share of negligible value and the Company will be entitled to purchase and then cancel such Deferred Shares for an aggregate consideration of one pence.

The amounts received under the Dividend Alternative should be taxed as income for UK tax purposes. UK tax resident Shareholders should read Part 7 of the Circular for further information. The attention of Non-United Kingdom Shareholders is drawn to paragraph 6 of Part 5 of the Circular.

Details of how to complete and return an Election Form are set out in Part 4 of the Circular. Shareholders electing through CREST should refer to paragraph 2 of Part 4 of the Circular for further information.

Shareholders wishing to receive the Special Dividend in respect of all of their Share Entitlement need NOT complete or return the Election Form or make an election through CREST as C Shares will be issued and the Special Dividend paid automatically in respect of all of the Share Entitlement in relation to which a Shareholder has not elected for either of the Alternatives.

5. The Share Capital Consolidation

The return of cash proposed to be made pursuant to the Proposals represents approximately 17.31 per cent. of the Company's market capitalisation as at 10 December 2009, based on the Closing Price of 260 pence per Existing Ordinary Share on that date. The Share Capital Consolidation will reduce the number of the Company's ordinary shares in issue by approximately the same percentage as the return of cash bears to the market capitalisation of the Company.

For every 6 Existing Ordinary Shares held at the Record Time, Shareholders will receive 5 New Ordinary Shares. The intention is that, subject to market movements, the market price per New Ordinary Share immediately after Admission should be approximately equal to the market price per Existing Ordinary Share immediately prior to the Proposals whilst the market capitalisation will reflect the return of cash pursuant to the Proposals.

The New Ordinary Shares will be traded on the London Stock Exchange in the same way as the

Existing Ordinary Shares and will be equivalent in all material respects to the Existing Ordinary Shares, including as to their dividend rights. Admission is expected to take effect at 8.00 a.m. on

13 January 2010. It is expected that share certificates representing the New Ordinary Shares will be sent to Shareholders who hold their Existing Ordinary Shares in certificated form on or around

26 January 2010. The CREST accounts of Shareholders who hold their Existing Ordinary Shares in CREST are expected to be credited with New Ordinary Shares at approximately 8.00 a.m. on 13

January 2010.

Further information on the Share Capital Consolidation, and any fractional entitlements to New

Ordinary Shares that may result, is set out in paragraph 3 of Part 5 of the Circular.

6. Rugby Estates Share Schemes

Separate letters are being sent to participants in the Rugby Estates Share Schemes in respect of the

Proposals. The intention is broadly to preserve, subject to market fluctuations, the value of each option and award under the Rugby Estates Share Schemes through the Share Capital Consolidation. Therefore, the current intention is that no adjustments to share entitlements will be made under the Rugby Estates Share Schemes where holders of options and awards will not participate in the return of cash pursuant to the Proposals with respect to such entitlement. Accordingly, entitlements will relate to the same number of New Ordinary Shares as they currently do to Existing Ordinary Shares. Participants in the Rugby Estates Share Schemes will be able, subject to the terms of the Rugby Estates Share Schemes, to exercise options between the date of this letter and the Record Time.

The trustees of the All Employee Share Plan will send letters to participants in that plan asking them how they wish the trustees to act in relation to Existing Ordinary Shares held on their behalf under the plan in respect of the Proposals.

7. Proposed amendments to the Articles of Association

A number of amendments to the Articles of Association are required to implement the Proposals and require approval at the General Meeting. The proposed amendments relate to the rights and restrictions attaching to the B Shares, C Shares and Deferred Shares, certain consequential amendments to the Articles and certain other amendments as a consequence of the full implementation of the 2006 Act. The changes are summarised in paragraph 7 of Part 5 and Part 6 of the Circular.

8. Action to be taken

A Form of Proxy for use in connection with the General Meeting will be sent to Shareholders with the Circular. Whether or not Shareholders intend to be present at the General Meeting, they are requested to complete and sign the accompanying Form of Proxy and return it, in accordance with the instructions printed on it, by post or (during normal business hours) by hand to Equiniti, Aspect House, Spencer Road, Lancing, West Sussex BN99 6ZL to arrive as soon as possible and, in any event, by no later than 10.00 a.m. on 10 January 2010. Shareholders who hold their Existing Ordinary Shares in CREST may appoint a proxy by completing and transmitting a CREST Proxy Instruction to Equiniti so that it is received by no later than 10.00 a.m. on 10 January 2010. 

The return of a completed Form of Proxy or the transmission of an electronic proxy or CREST Proxy Instruction will not prevent a Shareholder from attending the General Meeting and voting in person (in substitution for their proxy vote) should they wish to do so and are so entitled.

An Election Form for use by Shareholders (with the exception of Shareholders who hold their Existing Ordinary Shares in CREST) in connection with the Alternatives is enclosed with the Circular. To be valid, Election Forms must be validly completed and returned in the prepaid envelope provided so as to be received by Equiniti by no later than 11.00 a.m. on 12 January 2010. If Shareholders do not use the envelope provided, the Election Form should be sent by post to Equiniti, Aspect House, Spencer Road, Lancing,West Sussex BN99 6DA and postage will (where applicable) be payable or delivered by hand only (during normal business hours) to Equiniti, Holm Oak, Holm Oak Business Park, Woods Way, Goring-by-Sea, Worthing, West Sussex BN12 4FE. Shareholders who hold their Existing Ordinary Shares in CREST will not be sent Election Forms and may only elect in respect of the Alternatives through CREST. 

9. Recommendation

The Board believes the Proposals to be in the best interests of Shareholders as a whole. Accordingly, the Board unanimously recommends that Shareholders vote in favour of the Resolutions, as the Directors intend to do in respect of their own beneficial holdings, amounting in aggregate to 1,865,359 Existing Ordinary Shares representing approximately 13.61 per cent. of the current issued share capital of Rugby Estates Plc. In addition, the executive Directors have been advised that Rugby Estates Plc Retirement Benefits Scheme will vote a minimum of 435,334 Existing Ordinary Shares, representing approximately 3.18 per cent. of the current issued share capital of Rugby Estates Plc, in favour of the Resolutions.

10. Expected timetable of key events

Latest time and date for receipt of the Form of Proxy or CREST Proxy Instruction for the General Meeting	10.00 a.m. on 10 January 2010
General Meeting	10.00 a.m. on 12 January 2010
Latest time and date for receipt of Election Forms or TTE Instructions from CREST holders in relation to the Alternatives	11.00 a.m. on 12 January 2010
Latest time and date for dealings in Existing Ordinary Shares	4.30 p.m. on 12 January 2010
Record Time (for consolidation of Existing Ordinary Shares and entitlement to B Shares and/or C Shares), Existing Ordinary Share Register closed and Existing Ordinary Shares disabled in CREST	5.00 p.m. on 12 January 2010
Cancellation of trading of Existing Ordinary Shares	8.00 a.m. on 13 January 2010
New Ordinary Shares admitted to trading on AIM and dealings in the New Ordinary Shares commence	8.00 a.m. on 13 January 2010
CREST accounts credited with New Ordinary Shares	Approximately 8.00 a.m. on 13 January 2010
Redemption of B Shares under the Capital Alternative	By 19 January 2010
Special Dividend becomes payable and C Shares in respect of which the Special Dividend is payable automatically reclassify as Deferred Shares	By 19 January 2010
CREST accounts credited with or cheques despatched in respect of the Redemption Payment on the B Shares	On or around 22 January 2010
BACS payments made to mandated accounts or cheques despatched in respect of the Special Dividend on the C Shares	On or around 22 January 2010
Despatch of share certificates in respect of New Ordinary Shares	On or around 26 January 2010

Notes:

1. References to times in this announcement are to London times. If any of the above times or dates should change, the revised times and/or dates will be notified to Shareholders by an announcement on a Regulatory Information Service.

2. All events in the above timetable following the holding of the General Meeting are conditional on the passing of Resolution 1 and Admission.

11. Circular to shareholders

The Circular to shareholders is expected to be posted to Shareholders today and further copies will be available later today on the Company's website, www.rugbyestates.plc.uk.

Enquiries:

David Tye, Chairman	Rugby Estates Plc	020 7016 0050
Andrew Wilson, Chief Executive	Rugby Estates Plc	www.rugbyestates.plc.uk
Jeremy Porter / Simon Bennett / Laura Littley	Fairfax I.S. PLC	020 7598 5368
Stephanie Highett / Dido Laurimore / Rachel Drysdale	Financial Dynamics	020 7831 3113

Appendix 1

Definitions

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

"2006 Act"	the Companies Act 2006, as amended
"Admission"	admission of the New Ordinary Shares to trading on AIM becoming effective in accordance with the AIM Rules
"AIM"	a market operated by the London Stock Exchange
"AIM Rules"	the AIM rules for companies issued by the London Stock Exchange, as amended from time to time
"Alternatives"	the Dividend Alternative and the Capital Alternative, or either of them as the context may require
"Articles" or "Articles of Association"	the articles of association of the Company from time to time
"B Shares"	the redeemable preference shares of 45 pence each in the capital of the Company carrying the rights and restrictions summarized in Part 6 of the Circular
"BACS"	the Bankers Automated Clearing System
"Board" or "Directors"	the board of directors of the Company or a duly appointed committee of the board
"Business Day"	a day (other than a Saturday, Sunday or public holiday) on which sterling deposits may be dealt in on the London inter-bank market and commercial banks are open for general business in London
"C Shares"	the non-cumulative irredeemable preference shares of 0.001 pence each in the capital of the Company carrying the rights and restrictions summarised in Part 6 of the Circular
"Capital Alternative"	the election for B Shares to be redeemed pursuant to the Proposals and conferring a right to the Redemption Payment as more fully described in Parts 1 and 5 of the Circular
"Capital Reorganisation"	the reorganisation of the Company's share capital comprising the Share Capital Consolidation and the allotment and issue of B Shares and/or C Shares
"Closing Price"	the closing middle-market quotations as derived from the Daily Official List on a particular day
"Company" or "Rugby Estates Plc"	Rugby Estates Plc, incorporated in England and Wales with company number 2548935
"CREST"	the relevant system (as defined in the Uncertificated Securities Regulations 2001) in respect of which Euroclear is the Operator (as defined in such regulations)
"CREST Proxy Instruction"	a properly authenticated CREST message appointing and instructing a proxy to attend and vote in place of a Shareholder at the General Meeting and containing the information required to be contained in the manual published by Euroclear
"Daily Official List"	the daily record setting out the prices of all trades in shares and other securities conducted on the London Stock Exchange
"Deferred Shares"	the deferred shares of 0.001 pence each in the capital of the Company carrying the rights and restrictions summarised in Part 6 of the Circular
"Directors"	the directors of the Company from time to time
"Dividend Alternative"	the election (or deemed election) for C Shares conferring a right to a special dividend as more fully described in Parts 1 and 5 of the Circular
"Election Deadline"	11.00 a.m. on 12 January 2010 (or such later time and/or date as the Directors in their absolute discretion may determine)
"Election Form"	the election form enclosed with the Circular, where the Circular is sent to Shareholders who hold their Existing Ordinary Shares in certificated form
"Equiniti"	the Company's registrars, Equiniti Financial Services Limited and Equiniti Limited (together or separately "Equiniti") of Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA
"Euroclear"	Euroclear UK & Ireland Limited, the operator of CREST (formerly known as CRESTCo Limited)
"Existing Ordinary Shares"	the existing ordinary shares of 12.5 pence each in the capital of the Company
"Form of Proxy"	the form of proxy enclosed with the Circular for use by Shareholders in connection with the General Meeting
"FSA"	Financial Services Authority
"General Meeting"	the General Meeting of the Company (or any adjournment thereof) to be held at 4 Farm Street, Mayfair, London W1J 5RD at 10.00 a.m. on 12 January 2010
"Group"	the Company and its subsidiaries from time to time
"London Stock Exchange"	London Stock Exchange plc
"New Ordinary Shares"	following the Capital Reorganisation, the new ordinary shares of 15 pence each in the capital of the Company
"Non-United Kingdom Shareholder"	a Shareholder who is not resident in the United Kingdom or who is a citizen, resident or national of a country other than the United Kingdom. For the avoidance of doubt, a Shareholder who is not resident in the United Kingdom includes a Shareholder who is resident in the Channel Islands or the Isle of Man
"Rugby Estates Share Schemes"	the 1994 Approved Executive Scheme, the All Employee Share Ownership Plan and the Long Term Incentive Plan, in each case of the Company
"Proposals"	the Redemption Payment, the Special Dividend and the Capital Reorganisation
"Record Time"	5.00 p.m. on 12 January 2010 (or such later time and/or date as the Directors in their absolute discretion may determine)
"Redemption Payment"	the payment of 45 pence per B Share to be paid on redemption of the B Shares
"Regulatory Information Service"	a Regulatory Information Service on the list of Regulatory Information Services maintained by the FSA
"Resolutions"	the resolutions set out in the notice of the General Meeting contained in Part 9 of the Circular to (i) implement the Proposals and (ii) in order to take account of the Share Capital Consolidation comprised in the Proposals, to renew the Company's authority to make market purchases of shares and to renew the Directors' authority to allot shares pursuant to section 551 of the 2006 Act and to disapply section 561 of the 2006 Act
"Share Capital Consolidation"	the consolidation and division of the Existing Ordinary Shares in the manner set out in Resolution 1
"Share Entitlement"	the entitlement of each Shareholder to be allotted one B Share or one C Share for each Existing Ordinary Share held at the Record Time
"Shareholders"	holders of Existing Ordinary Shares, New Ordinary Shares, B Shares, C Shares or Deferred Shares, as the context may require
"Special Dividend"	a special dividend of 45 pence per C Share to be declared and paid in accordance with the Dividend Alternative
"TTE Instruction"	transfer to escrow instruction
"United Kingdom" or "UK"	the United Kingdom of Great Britain and Northern Ireland

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