Re Posting of Document

Macfarlane Group PLC 2 November 2000 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC OF IRELAND OR JAPAN 2 NOVEMBER 2000 MACFARLANE GROUP PLC ('MACFARLANE') CASH OFFER FOR BRITISH POLYTHENE INDUSTRIES PLC ('BPI') MACFARLANE RESPONDS TO BPI CLAIMS AND DEFENCE Macfarlane is today posting a document to the shareholders of BPI which not only responds to the document which BPI sent to its shareholders on 23 October 2000 ('the defence document') but also questions claims made by BPI's management in recent years, contrasting them with the reality of BPI's financial record. Macfarlane's document sets out four key questions for BPI shareholders and, with quotes from BPI itself, provides compelling evidence of a lack of credibility. * How credible are BPI's claims on future performance? - BPI has made many claims in the past about the future prospects for its business. Can shareholders believe the board of BPI can accurately predict BPI's future prospects and deliver increased profits when it has consistently failed to deliver improved performance? * How credible are BPI's restructuring plans? - In recent years BPI has claimed repeatedly that reorganisation will lead to profit improvement but again has failed to deliver. * How credible is BPI's acquisition record and strategy? - Over the last three and a half years, BPI has spent an amount equivalent to more than 250 pence per share on acquisitions and capital expenditure and has made many predictions of increasing growth and profits . but profits have continued to decline. * Is it credible for BPI to blame external factors for poor results? - External factors that have been blamed include the strength of sterling, raw material prices, the Government recycling policy, the climate control levy . and even the weather. In the defence document the board of BPI has made a number of claims which Macfarlane believes are both wrong and clearly demonstrate that BPI's board fails to recognise the difficult position in which BPI is now placed. * Claim BPI claims that Macfarlane's cash offer of 250 pence per share 'fundamentally undervalues BPI'. Fact In fact, on 5 September 2000, the day prior to BPI announcing that it had received approaches, its share price was 178.5 pence. Earlier this year its shares traded as low as 137.25 pence (as disclosed in the Daily Official List on 11 May 2000). Macfarlane's offer of 250 pence represents a premium of 40 per cent to the stock market price of BPI's shares the day before BPI announced it had received approaches and a premium of 82 per cent to the lowest trade earlier this year. * Claim BPI claims that Macfarlane's offer 'discounts BPI's scale and market-leading positions'. Fact In fact, the Offer does take account of these factors. Size alone does not produce profits. We believe one of the BPI board's key failings is that it has not grasped the opportunity to deliver the value which BPI's scale and market leading position should have allowed. * Claim BPI claims that Macfarlane's offer is 'highly opportunistic'. Fact The reality is that Macfarlane and BPI had intermittent contact regarding a possible combination of the two companies over a lengthy period and the industrial logic for combining the two companies was never questioned. Macfarlane launched its cash offer when it became clear, in the opinion of its directors, that the board of BPI had a wholly unrealistic view of BPI's value and prospects. * Claim BPI claims that Macfarlane's offer 'ignores the benefits of actions already taken to eliminate loss making businesses' and 'ignores the benefits of actions already taken to reduce costs'. Fact In 1996, BPI's board claimed that it was confident that BPI shareholders could look forward to increasing rewards in years to come and they have made similar claims in subsequent years. Macfarlane believes that BPI's latest restructuring plan, which is claimed in the defence document to be well advanced, will once again fail to deliver value. Macfarlane believes that the BPI defence document shows indignant complacency and repeats tired old themes and claims which shareholders have heard before. In Macfarlane's opinion, the defence document fails to demonstrate how BPI's board will deliver shareholder value approaching 250 pence per share. John Ward, Chairman of Macfarlane, said: 'The key issue facing BPI shareholders is do they accept cash of 250 pence per BPI share now or risk sticking with BPI in the hope that its management will eventually deliver the improvement in profitability it has been promising for years? BPI shareholders should accept Macfarlane's generous offer now.' Enquiries: Macfarlane Group PLC Iain Duffin 0141 333 9666 Noble Grossart Limited Sir Angus Grossart 0131 226 7011 Todd Nugent HSBC John Hannaford 020 7336 9000 Beattie Media Gordon Beattie 01698 787878 Bell Pottinger Kate Power 020 7353 9203 Copies of the document posted today by Macfarlane as well as the offer document and the form of acceptance are available free of charge from Lloyds TSB Registrars, Antholin House, 71 Queen Street, London EC4N 1SL (telephone 0870 600 2027). The directors of Macfarlane (whose names are set out in paragraph 2 of Part 7 of the Offer Document) accept responsibility for the information contained in this announcement save that the only responsibility accepted by them in respect of the information contained in this announcement relating to BPI, the BPI group and the directors of BPI other than the statements made about BPI above in relation to the previous contact between Macfarlane and BPI, which has been compiled from publicly available sources, has been to ensure that such information has been correctly and fairly reproduced and presented. Save as aforesaid, to the best of the knowledge and belief of the directors of Macfarlane (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. Noble Grossart Limited, which is regulated in the UK by The Securities and Futures Authority Limited, is acting exclusively for Macfarlane and no one else in relation to the Offer and will not be responsible to any person other than Macfarlane for providing the protections afforded to customers of Noble Grossart Limited or for giving advice in relation to the Offer. Nothing in this announcement should be construed as a profit forecast or be interpreted to mean that the future earnings per share of the enlarged group will necessarily be greater than the historic published earnings per share of the Macfarlane group.
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