Increased Offer For Brumby’s Bakeries

23 March, 2007

ANNOUNCEMENT

Increased Offer For Brumby’s Bakeries Holdings Ltd (Bsx:Bbh)

BBS, a company backed by the syndicate of Brumby’s Bakeries Holdings Ltd CEO and managing director, Michael Sherlock, director Marcus Barlow and general manager and company secretary Steve Brown today increased its offer for Brumby’s (BBH).

Mr Sherlock said that while the non-conflicted members of the Brumby’s Board had on March 2 recommended BBS’s previous offer, today’s increased offer and amendments to the Implementation Agreement strengthened BBS’s position with regards to any potential rival offer in the future.

BBS’s previous offer was for the acquisition of 78.98 per cent of the company held in non-associated shareholders hands for $2.80 cash for each BBH share by way of scheme of arrangement under Chapter 5.1 of the Corporations Act. BBS also proposed the Company pay a fully-franked dividend of 10.883 cents per share.

BBS’s increased offer is for:

(a) an amount comprising of $2.87 cash per share and a special fully franked dividend of $0.30 per share payable by BBH. The total consideration is therefore $3.17 per share in cash plus the value of the franking credit of $0.13 (rounded). The aggregate value of the offer is therefore $3.30 (rounded); and

(b) $1.62 cash per Class A Option (as defined in the Implementation Agreement).

The offer is subject to the following amendments being made to the Implementation Agreement:

(a) BBH to pay a break fee of $200,000 for expenses incurred by BBS where any offer or proposal is made by any third party, including Retail Food Group Ltd or its associates (“RFG”), to acquire some or all of the issued capital in, or business and assets of, BBH. Clause 15 of the Implementation Agreement will be amended to reflect this.

(b) If BBH or its directors receive an offer or any proposal by a third party (including RFG) in relation to acquiring securities in or business assets of BBH, including any option, it must immediately inform BBS of the details of the offer or proposal, including the identity of the offeror, and the nature and terms of the offer or proposal and BBS will have 3 business days to respond during which time BBH and its directors will not enter into any agreement. Clause 10 of the Implementation Agreement will be amended accordingly.

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