Announcement re: change in recommendation

ANNOUNCEMENT

BRUMBY’S BAKERIES HOLDINGS LIMITED (BSX:BBH)

Last Friday 2 March the non-conflicted directors of the board of Brumby's announced their change in recommendation in favour of the BBS offer over the RFG Scheme.

The non-conflicted directors of the board wish to publicly confirm that none of the members of the syndicate of director, Marcus Barlow, CEO and managing director, Michael Sherlock, or general manager and company secretary Steve Brown have been present at, or a party to, any board deliberations on the RFG Scheme, the BBS offer or the change in recommendation made by the board sub-committee last Friday.

As a result of the change in recommendation in favour of the BBS offer, Brumby's has received a written demand from Retail Food Group Limited (RFG) for payment of a Reimbursement Fee of $360,000. Brumby's has advised RFG that it will pay the Reimbursement Fee to RFG by close of business tomorrow in accordance with its obligations under the merger implementation agreement (MIA) with RFG.

RFG, although entitled to immediately terminate the MIA on the change in recommendation, has not elected to do so. Brumby's may terminate the MIA if after 7 days it can not agree with RFG to reinstate its recommendation of the RFG proposed scheme and it has paid the reimbursement fee.

Brumby's acknowledges that RFG is considering its position in relation to the recommendation and awaits further discussions with RFG.

The non-conflicted directors of Brumby's wish to reiterate their commitment to achieving the best result for shareholders, and to make it clear that Michael Sherlock and Marcus Barlow were in no way involved in the non-conflicted directors' decision to change their recommendation. The nonconflicted directors changed their recommendation on the basis that the offer made by BBS was for a higher cash price than that offered by RFG by in excess of 11 cents per share. The nonconflicted directors of Brumby's do not endorse in any way or take responsibility for any statements made by Mr Sherlock in the media, in particular, in relation to any potential impact on franchisees relating to either offer. It is the board sub-committee's view that RFG has great capacity to operate well with franchisees as demonstrated by RFG's successful operation of its Donut King and bb's café franchise systems.

The non conflicted directors acknowledge the importance of their independent role in securing the best outcome for Brumby’s shareholders. At no time will Michael Sherlock, Marcus Barlow or Steve Brown be involved in any Board deliberations on the offers for Brumby’s shares”.

The non-conflicted members of the board will continue to keep shareholders updated on developments.

ENDS

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