31 May 2023 

John Lewis of Hungerford plc

("John Lewis of Hungerford " or the "Company ")

Proposed cancellation of admission to trading on AIM of ordinary shares, re-registration as a private limited company, adoption of new articles of association and

notice of general meeting

John Lewis of Hungerford (AIM: JLH), the specialist manufacturer and retailer of kitchens, bedrooms and freestanding furniture, announces the proposed cancellation of admission to trading on AIM of its ordinary shares (the "Cancellation"), re-registration as a private limited company (the "Re-registration") and adoption of new articles of association (the "New Articles") (together, the "Proposals").

The Directors have undertaken a review to evaluate the benefits and drawbacks to the Company and its Shareholders of retaining the admission to trading on AIM of the Ordinary Shares. This review has included, amongst other matters, the limited trading in the Ordinary Shares, the considerable cost associated with maintaining the Company's admission to trading on AIM, the management time and the legal and regulatory burden associated with being a quoted company. For these reasons, the Directors have concluded that the Proposals are in the best interests of the Company and its Shareholders as a whole. Further details of the background to and reasons for the Proposals are set out in Appendix I to this announcement.

The Proposals are subject to Shareholder approval and accordingly, a circular will be sent to Shareholders today setting out the background to and reasons for the Proposals (the "Circular") and which will contain a notice convening a general meeting (the "General Meeting") at which Shareholders will be invited to consider and, if thought fit, approve the resolutions to implement the Proposals. Extracts of the Circular can be found in Appendix I to this announcement.

To be passed, the Cancellation Resolution requires, pursuant to Rule 41 of the AIM Rules, the approval of not less than 75 per cent. of the votes cast by Shareholders at the General Meeting. The resolution to approve the Re-registration and the adoption of the New Articles also requires the approval of not less than 75 per cent. of the votes cast by Shareholders at the General Meeting.

The General Meeting will be held at the Company's offices at Unit B5, Grove Business Park, Downsview Road, Wantage, Oxfordshire OX12 9FA on Friday, 16 June 2023 at 11am.

A copy of the Circular and the New Articles will be made available later today on the Company's website at www.john-lewis.co.uk/investors/.

Expected timetable of principal events

Appendices

Please refer to Appendix I to this announcement which sets out further details of the Proposals, as extracted from the Circular.

Unless otherwise stated, capitalised terms in this announcement have the meanings ascribed to them in Appendix II to this announcement.

Enquiries:

APPENDIX I - EXTRACTS FROM THE CIRCULAR TO SHAREHOLDERS

LETTER FROM THE ACTING CHAIRMAN

1.   Introduction

On 11 May 2023, the Company announced the exchange of contracts for a sale and leaseback transaction (the "Announcement)" in respect of the Property for cash consideration of £3.0 million (the "Sale and Lease Back Transaction"). Alongside the announcement of the Sale and Leaseback Transaction, the Company also announced the intended cancellation of admission to trading on AIM of the Ordinary Shares, together with its proposed re-registration as a private limited company, which will be accompanied by the adoption of the New Articles.

The Cancellation Resolution is conditional, pursuant to Rule 41 of the AIM Rules, upon the approval of not less than 75 per cent. of the votes cast by Shareholders (whether present in person or by proxy) at the General Meeting, notice of which is set out at the end of this Document.

The Company is seeking Shareholders' approval of the Resolutions, including the Cancellation Resolution, at the General Meeting, which has been convened for 11 am on Friday, 16 June 2023 at the Company's offices at Unit B5, Grove Business Park, Downsview Road, Wantage, Oxfordshire OX12 9FA. If the Cancellation Resolution is passed at the General Meeting, it is anticipated that the Cancellation will become effective at 7.00 a.m. on 29 June 2023.

The purpose of this Document is to seek Shareholders' approval for the Resolutions, to provide information on the background and reasons for, and consequences of, the Cancellation, the Re-registration and the adoption of the New Articles and to set out why the Directors unanimously consider the Cancellation, the Re- registration and the adoption of the New Articles to be in the best interests of the Company and its Shareholders as a whole.

Shareholders should note that the Directors intend to offer Shareholders the opportunity to sell their Ordinary Shares through the Buy Back Offer later in the year, following completion of the Capital Reorganisation and the Company's audit for the year ending 30 June 2023.  Several large Shareholders have informally indicated to the Board that they do not intend to sell any of their Ordinary Shares should the Buy Back Offer be implemented. In addition, the Directors do not intend to sell any of their Ordinary Shares should the Buy Back Offer be implemented. Further details about the Buy Back Offer will be sent to Shareholders later this year.

The Notice convening the General Meeting is set out at the end of this Document.

2.   Reasons for the Cancellation

The Directors have conducted a review of the benefits and drawbacks to the Company and its Shareholders in retaining its quotation on AIM and maintaining its existing corporate structure. The Board believes that the Cancellation is in the best interests of the Company and its Shareholders as a whole. In reaching this conclusion, the Directors have considered the following key factors, amongst others:

·    in light of the limited trading in the Ordinary Shares, the considerable cost associated with maintaining the Company's admission to trading on AIM of the Ordinary Shares (such as nominated adviser and broker fees, London Stock Exchange fees and the costs associated with being a quoted company in having a higher level corporate governance and audit scope, which the Directors estimate in aggregate amount to circa. £250,000 per annum) are, in the Directors' opinion, disproportionately high, when compared to the benefits, and the Board believes that these funds could be better utilised;

·    the Board believes, with a lack of liquidity, the current share price of the Ordinary Shares, and therefore the market capitalisation of the Company, does not accurately reflect the Company's value and adversely affects the ability of the Board to pursue certain strategic objectives;

·    the management time and the legal and regulatory burden associated with maintaining the Company's admission to trading on AIM of the Ordinary Shares is, in the Directors' opinion, disproportionate to the benefits to the Company;

·    the visibility afforded to competitors of the Company, by virtue of the regular market updates is, in the Directors' opinion, excessive and reduces the Company's ability to develop and promote the business with the privacy and confidentiality that competitors of the Company are able to do as private businesses; and

·    decision making can be geared towards stock-market updates and can therefore be short term in its focus. The Board believes that improvements in the operational management of the Company following the Cancellation would contribute to the improved performance of the Company.

Following careful consideration, the Directors believe that it is in the best interests of the Company and Shareholders to seek the proposed Cancellation at the earliest opportunity.

3.   Principal effects of the Cancellation

The Directors are aware that certain Shareholders may be unable or unwilling to hold Ordinary Shares in the event that the Cancellation is approved and becomes effective. Such Shareholders should consider selling their Ordinary Shares in the market prior to the Cancellation becoming effective.

Under the AIM Rules, the Company is required to give at least 20 clear Business Days' notice of the Cancellation. Additionally, the Cancellation will not take effect until at least 5 clear Business Days have passed following the passing of the Cancellation Resolution. If the Cancellation Resolution is passed at the General Meeting, it is proposed that the last day of trading in the Ordinary Shares on AIM will be 28 June 2023 and that the Cancellation will take effect at 7.00 a.m. on 29 June 2023.

The principal effects of the Cancellation will be that:

·    there will be no formal market mechanism enabling Shareholders to trade their Ordinary Shares on AIM or any other recognised market or trading facility;

·    whilst the Ordinary Shares will remain freely transferrable, it is possible that the liquidity and marketability of the Ordinary Shares will, in the future, be even more constrained than at present and that the value of such shares may be adversely affected as a consequence;

·    in the absence of a formal market and quote, it may be more difficult for Shareholders to determine the market value of their investment in the Company at any given time;

·    the regulatory and financial reporting regime applicable to companies whose shares are admitted to trading on AIM will no longer apply;

·    Shareholders will no longer be afforded the protections given by the AIM Rules, such as the requirement to be notified of certain events and the requirement that the Company seek shareholder approval for certain corporate actions, where applicable, including substantial transactions, financing transactions, reverse takeovers, related party transactions and fundamental changes in the Company's business, including certain acquisitions and disposals;

·    the Company will cease to have an independent nominated adviser and broker;

·    whilst the Company's CREST facility will remain in place post the Cancellation, the Company's CREST facility may be cancelled in the future and, although the Ordinary Shares will remain transferable, they may cease to be transferable through CREST. In this instance, Shareholders who hold Ordinary Shares in CREST will receive share certificates; and

·    the Cancellation may have personal taxation consequences for Shareholders. Shareholders who are in any doubt about their tax position should consult their own professional independent tax adviser.

The Company will remain registered with the Registrar of Companies in England and Wales in accordance with and subject to the Companies Act 2006, notwithstanding the Cancellation. Shareholders should also note that the Takeover Code will continue to apply to the Company following the Cancellation for the period of 10 years from the date of the Cancellation.

The Resolutions to be proposed at the General Meeting include the adoption of the New Articles with effect from completion of the Cancellation. A summary of the principal changes being made by the adoption of the New Articles is included in Part II of this Document.

The above considerations are not exhaustive, and Shareholders should seek their own independent advice when assessing the likely impact of the Cancellation on them.

4.   Transactions in Ordinary Shares prior to and post the proposed Cancellation

Prior to Cancellation

Shareholders should note that they will be able to continue trading in the Ordinary Shares on AIM prior to the date of the Cancellation. If Shareholders approve the Cancellation, it is anticipated that the last day of dealings in the Ordinary Shares on AIM will be 28 June 2023.

Post Cancellation

Proposed Buy Back Offer

Once the Cancellation and Re-registration are completed, the Company intends to undertake a share buyback transaction. It is intended that this buyback transaction will be through the implementation of a buyback offer through which the Company will offer to purchase a certain maximum number of the Ordinary Shares so as to provide those Shareholders who wish to sell their Ordinary Shares with the opportunity to do so, subject to such transaction complying with the Companies Act and possible scaling back of applications should there be excess demand (the "Buy Back Offer"). Any Ordinary Shares successfully bought back by the Company, pursuant to the Buy Back Offer, would subsequently be cancelled.  It is intended that if the Buy Back Offer is implemented it would be conditional on, amongst other things, approval by Shareholders of a capital reorganisation, which would involve the reduction of the share premium account of the Company in order to create sufficient distributable reserves (the "Capital Reorganisation"), and the approval by Shareholders of the Buy Back Offer and its contractual terms in accordance with the Companies Act.  The Company expects to commence the Buy Back Offer once its year-end audit for the year ending 30 June 2023 has been completed.  Whilst it is the Directors intention to implement the Buy Back Offer, Shareholders will be updated after the audit for the year ending 30 June 2023 has taken place and Shareholders should note that there is no certainty that the Buy Back Offer will be implemented.

The Directors currently anticipate that the Buy Back Offer, if implemented, would be at a buy back price of approximately 1.5 pence per Ordinary Share, reflecting the average traded price of the Ordinary Shares over the 4-week period prior to 11 May 2023 (being the date of the Announcement).  Several large Shareholders have informally indicated to the Board that they do not intend to sell any of their Ordinary Shares should the Buy Back Offer be implemented. In addition, the Directors do not intend to sell any of their Ordinary Shares should the Buy Back Offer be implemented.

The Board will write to Shareholders in due course should they implement the Buy Back Offer with further details of its terms and conditions.

With the Board focused on returning the Company to sustained profitability, it expects the Company to improve this further through the cost savings made from the Cancellation, together with a materially improved balance sheet, subject to completion of the Capital Reorganisation. It is the intention of the Board following the intended Capital Reorganisation to thereafter distribute a proportion of any profits on an ongoing basis in future years through a combination of further share buybacks and/or dividend payments.

Trading in Ordinary Shares post Cancellation

Following the Cancellation, the Company intends to consider the alternative arrangements available to provide a mechanism to assist Shareholders to sell Ordinary Shares should they so wish (including the Company using its reasonable endeavours to facilitate introductions and communication among Shareholders who wish to sell their Ordinary Shares and those persons who wish to purchase Ordinary Shares).  However, there can be no certainty that any such arrangements will be put in place and it is likely that it will be much harder to sell Ordinary Shares following the Cancellation.

If Shareholders wish to buy or sell Ordinary Shares on AIM they must do so prior to the Cancellation becoming effective. As noted above, in the event that Shareholders approve the Cancellation, it is anticipated that the last day of dealings in the Ordinary Shares on AIM will be 28 June 2023.

5.   Re-registration

Following the Cancellation, the Board believes that the requirements and associated costs of the Company maintaining its public limited company status will be difficult to justify and that the Company will benefit from the more flexible requirements and lower costs associated with private limited company status. It is therefore proposed to re-register the Company as a private limited company. In connection with the Re-registration, it is proposed that the New Articles be adopted to reflect the change in the Company's status to a private limited company. The principal effects of the Re-registration and the adoption of the New Articles on the rights and obligations of Shareholders and the Company are summarised in Part II of this Document.

Application will be made to the Registrar of Companies for the Company to be re-registered as a private limited company. Re-registration will take effect when the Registrar of Companies issues a certificate of incorporation on re-registration. The Registrar of Companies will not issue the certificate of incorporation on re-registration until the Registrar of Companies is satisfied that no valid application can be made to cancel the resolution to re-register the Company as a private limited company.

6.   Takeover Code

The Takeover Code applies to all offers for companies which have their registered offices in the United Kingdom, the Channel Islands or the Isle of Man if any of their equity share capital or other transferable securities carrying voting rights are admitted to trading on a regulated market or a multilateral trading facility in the United Kingdom or on any stock exchange in the Channel Islands or the Isle of Man.

The Takeover Code also applies to all offers for companies (both public and private) which have their registered offices in the United Kingdom, the Channel Islands or the Isle of Man and which are considered by the Takeover Panel to have their place of central management and control in the United Kingdom, the Channel Islands or the Isle of Man, but in relation to private companies only if one of a number of conditions are met, including that any of the company's equity share capital or other transferable securities carrying voting rights have been admitted to trading on a regulated market or a multilateral trading facility in the United Kingdom or on any stock exchange in the Channel Islands or the Isle of Man at any time in the preceding 10 years.

Following the Cancellation and the Re-registration, the Takeover Code will continue to apply to the Company for a period of ten years from the Cancellation provided that the Company is considered by the Takeover Panel to have its place of central management and control in the United Kingdom, or the Channel Islands or the Isle of Man. This is known as the "residency test". The way in which the test for central management and control is applied for the purposes of the Takeover Code may be different from the way in which it is applied by the United Kingdom tax authorities, HMRC. Under the Takeover Code, the Takeover Panel looks to where the majority of the Directors are resident, amongst other factors, for the purposes of determining where the Company has its place of central management and control.

Based on the current composition of the Board, the residency test will be satisfied and the Takeover Code will continue to apply to the Company following the Cancellation and the Re-registration. However, the Takeover Code could cease to apply to the Company in the future if any changes to the composition of the Board result in the majority of the Directors not being resident in the United Kingdom, the Channel Islands and Isle of Man.

When the Takeover Code ceases to apply to the Company in the future, Shareholders will not receive the protections afforded by the Takeover Code in the event that there is a subsequent offer to acquire their Ordinary Shares. This includes the requirement for a mandatory cash offer to be made if either:

·    a person acquires an interest in shares which, when taken together with the shares in which persons acting in concert with it are interested, increases the percentage of shares carrying voting rights in which it is interested to 30 per cent. or more; or

·    a person, together with persons acting in concert with it, is interested in shares which in the aggregate carry not less than 30 per cent. of the voting rights of a company but does not hold shares carrying more than 50 per cent. of such voting rights and such person, or any person acting in concert with it, acquires an interest in any other shares which increases the percentage of shares carrying voting rights in which it is interested.

Brief details of the Takeover Panel, the Takeover Code and the protections given by the Takeover Code are described below.

Before giving your approval to the Cancellation and the Re-registration, Shareholders may want to take independent professional advice from an appropriate independent financial adviser.

The Takeover Code is issued and administered by the Takeover Panel. The Company is a company to which the Takeover Code applies and its Shareholders are accordingly entitled to the protections afforded by the Takeover Code.

The Takeover Code and the Takeover Panel operate principally to ensure that shareholders are treated fairly and are not denied an opportunity to decide on the merits of a takeover and that shareholders of the same class are afforded equivalent treatment by an offeror. The Takeover Code also provides an orderly framework within which takeovers are conducted. In addition, it is designed to promote, in conjunction with other regulatory regimes, the integrity of the financial markets.

The General Principles and Rules of the Takeover Code

The Takeover Code is based upon a number of General Principles which are essentially statements of standards of commercial behaviour. For Shareholders information, these General Principles are set out in Part I of Appendix A. The General Principles apply to all transactions with which the Takeover Code is concerned. They are expressed in broad general terms and the Takeover Code does not define the precise extent of, or the limitations on, their application. They are applied by the Takeover Panel in accordance with their spirit to achieve their underlying purpose.

In addition to the General Principles, the Takeover Code contains a series of Rules, of which some are effectively expansions of the General Principles and examples of their application and others are provisions governing specific aspects of takeover procedure. Although most of the Rules are expressed in more detailed language than the General Principles, they are not framed in technical language and, like the General Principles, are to be interpreted to achieve their underlying purpose. Therefore, their spirit must be observed as well as their letter. The Takeover Panel may derogate or grant a waiver to a person from the application of a Rule in certain circumstances.

Giving up the protection of the Takeover Code

A summary of key points regarding the application of the Takeover Code to takeovers generally is set out in Part III of this Circular. Shareholders are encouraged to read this information carefully as it outlines certain important protections which Shareholders will be giving up in the future if they agree to the Cancellation and the Re-registration and the Company subsequently ceases to be subject to the Takeover Code in the future.

7.   Process for the AIM Cancellation

Under Rule 41 of the AIM Rules, it is a requirement that the AIM Cancellation must be approved by not less than 75 per cent. of votes cast by Shareholders at a general meeting of the Company. In addition, any AIM quoted company that wishes for the London Stock Exchange to cancel the admission of its shares to trading on AIM is required to notify shareholders and to separately inform the London Stock Exchange of its preferred cancellation date at least 20 Business Days prior to such date.

Accordingly, the Board is hereby convening the General Meeting to vote on the Cancellation Resolution and has notied the London Stock Exchange of the Company's intention, subject to the Cancellation Resolution being passed at the General Meeting, to cancel the Company's admission of the Ordinary Shares to trading on AIM on 29 June 2023. The AIM Cancellation will not take effect until at least ve clear Business Days have passed following the passing of the Cancellation Resolution and a dealing notice has been issued by the London Stock Exchange.

If the Cancellation Resolution is passed at the General Meeting, it is expected that the last day of trading in Ordinary Shares on AIM will be 28 June 2023 and that the AIM Cancellation will take effect at 7.00 a.m. on 29 June 2023.

8.   General Meeting action to be taken

The Cancellation requires the passing of the Cancellation Resolution and the Re-registration and the adoption of the New Articles require the passing of the Re-registration Resolution at the General Meeting. Accordingly, a Notice convening the General Meeting, to be held at the Company's offices at Unit B5, Grove Business Park, Downsview Road, Wantage, Oxfordshire OX12 9FA at 11 am on Friday, 16 June 2023 is set out at the end of this Circular.

Whether or not you propose to attend the General Meeting, you are requested to complete the Form of Proxy in accordance with the instructions printed thereon and return it, duly signed, together with any power of attorney under which it is executed, as soon as possible but in any event so as to arrive not later than 11 am on 14 June 2023. Alternatively, proxies may be submitted electronically using the Registrar's online portal at www.shareregistrars.uk.com by no later than 11 am on 14 June 2023.  The electronic submission of a proxy using the Registrar's online portal or the completion and return of a Form of Proxy will not preclude a Shareholder from attending and voting at the General Meeting should they so wish.

9.   Recommendation

The Directors consider that the Cancellation, the Re-registration and the adoption of the New Articles are in the best interests of the Company and its Shareholders as a whole and, therefore, unanimously recommend that Shareholders vote in favour of the Resolutions at the General Meeting, as they intend to do, or procure to be done, in respect of, in aggregate, 19,623,178 Ordinary Shares (representing approximately 10.12 per cent of the Issued Share Capital) to which they are beneficially entitled.

APPENDIX II - DEFINITIONS

The following denitions and technical terms apply throughout this announcement, unless the context otherwise requires: