Dairy Farm Launches Tender Offer to Repurchase Shares

Tenders will be invited in the range of US$0.96 to US$1.10 per Share. The price range represents a premium of between 12.3 per cent. and 28.7 per cent. over the closing price of the Shares on the Singapore Stock Exchange on 24th February 2003 and a premium of between 16.7 per cent. and 33.7 per cent. over the average closing price of the Shares on the Singapore Stock Exchange for the 30 market days immediately prior to this announcement. The Tender Offer will be for up to 170 million Shares (representing approximately 11 per cent. of the Company's issued share capital). If fully subscribed, this will result in the Company returning between US$163 million and US$187 million to shareholders.

Background

In mid 2002, Dairy Farm sold its profitable Woolworths New Zealand operation at a significant profit, with net proceeds of US$285 million.

Underlying earnings per Share for 2002 rose from US¢2.02 to US¢6.66. Including the profit on sale of Woolworths New Zealand, the basic earnings per Share were US¢22.43 compared to US¢1.82 per Share in 2001.

Dairy Farm resumed dividend payments in 2002 by declaring an interim dividend, which was paid in October. The Board is recommending a final dividend of US¢2.00 per Share, payable on 14th May 2003, resulting in a total dividend of US¢3.00 per Share in respect of 2002.Shares successfully tendered will not be entitled to participate in this final dividend.

In February 2002, Dairy Farm undertook a tender offer which resulted in the Company returning US$127.5 million to shareholders by purchasing 170 million Shares (representing approximately 10 per cent. of Dairy Farm's then issued share capital) at a strike price of US$0.75 per Share. The tender offer was oversubscribed and tendered Shares were scaled back under the terms of the tender offer.

The Dairy Farm Group has a substantial net cash position, mainly due to the proceeds from the disposal of Woolworths New Zealand. After taking account of the Company's investment requirements, the Directors consider it appropriate to make another tender offer to shareholders.

Benefits of the Tender Offer

The benefits of the Tender Offer to shareholders are that:

€¢ it will offer shareholders a return of capital whilst leaving Dairy Farm soundly financed;

€¢ to the extent subscribed, it will enhance earnings per Share; and

€¢ it will give shareholders the choice between selling Shares at a significant premium to the recent market price and increasing their proportionate stake in the Company by retaining their holdings.

Dairy Farm has no intention of making any further premium tender offer to shareholders in the year ahead.

Further Terms

The Tender Offer will close on 28th March 2003.

Full details of the Tender Offer, including the terms and conditions on which it is being made, are set out in a circular which will be posted to shareholders on 27th February 2003.

The Tender Offer is available to all Registered Shareholders with registered addresses outside Canada, Japan, Malaysia and South Africa. In addition, the Tender Offer will also be available to depositors holding Shares through the CDP scripless system in Singapore. Holders of American Depositary Shares will be required to withdraw the relevant Shares from the US Depositary in order to participate in the Tender Offer.

Jardine Strategic Group

The Directors have been informed that the Jardine Strategic Group has no present intention of tendering its Shares under the Tender Offer in respect of its holding of approximately 1,029 million Shares representing approximately 67.1 per cent. of the currently issued share capital of Dairy Farm.

If 170 million Shares are repurchased, Jardine Strategic Group's shareholding in Dairy Farm would increase to approximately 75.5 per cent. of the issued share capital of the Company.

Preliminary Results

The announcement of Dairy Farm's preliminary results for the year ended 31st December 2002, which contains an operational review of the Dairy Farm Group businesses for the year 2002 and discusses the outlook for the year 2003, is set out in the circular which will be posted to shareholders on 27th February 2003.

The Dairy Farm Group

Dairy Farm is a leading pan-Asian retailer. At 31st December 2002, the Dairy Farm Group and its associates operated 2,300 outlets - including supermarkets, hypermarkets, health and beauty stores, convenience stores, home furnishings stores and restaurants; employed 52,500 people in the region; and had 2002 total sales from continuing operations of US$4.0 billion.

Dairy Farm is a member of the Jardine Matheson Group.