Dobbies Option Announcement

Tesco PLC
17 August 2007


  Not for release, publication or distribution in or into Canada, Australia or  
  Japan or any jurisdiction where to do so would constitute a violation of the  
                       relevant laws of such jurisdiction                       


                                                                  17 August 2007

                             Tesco Holdings Limited                             

                                                                                

             Recommended cash Offer for Dobbies Garden Centres plc              

                                                                                

                    Termination of Irrevocable Undertakings                     


Tesco Holdings' announcement of 8 June 2007 of its firm intention to make an
offer for Dobbies, and the document posted to Dobbies Shareholders on 20 June
2007 setting out the full terms of the Offer (the 'Offer Document'), contained
details of call options which had been granted to Tesco Holdings by the Dobbies
Directors and certain of their connected persons in respect of Dobbies Shares
amounting, in aggregate, to 1,648,966 Dobbies Shares (representing approximately
16.4 per cent. of the existing issued share capital of Dobbies) (the 'Call
Options'). Tesco Holdings announced on 6 August 2007 that the Call Options were
being exercised on that day. Completion of the exercise of the Call Options took
place on 7 August 2007.

The terms of the Call Options were included in the irrevocable undertakings
entered into by the Dobbies Directors and certain of their connected persons
(the 'Irrevocable Undertakings') dated 7 June 2007.

Prior to the exercise by James Barnes and Johnny Trotter of options under the
Dobbies 2001 Executive Option Scheme in respect, in aggregate, of 125,000
Dobbies Shares (representing approximately 1.24 per cent. of the existing issued
share capital of Dobbies) (the 'Executive Option Shares'), which was announced
earlier today by Dobbies, James Barnes, Johnny Trotter and Sharon Brown entered
into termination agreements with Tesco Holdings (the 'Termination Agreements')
pursuant to which the Irrevocable Undertakings entered into by such Dobbies
Directors and Tesco Holdings were terminated.

Copies of the Irrevocable Undertakings and the Termination Agreements will be
available for inspection during normal business hours on any weekday (Saturdays,
Sundays and public holidays excepted) at the offices of Freshfields Bruckhaus
Deringer, 65 Fleet Street, London, EC4Y 1HS, until the end of the Offer Period.

Terms defined in the Offer Document have the same meanings in this announcement.


Enquiries

Tesco                                                                           
Chris Griffith, Investor Relations                     Tel: [phone]    
Trevor Datson, Media                                   Tel: [phone]    
                                                                                
Greenhill (financial adviser to Tesco)                 Tel: [phone]    
Simon Borrows                                                                   
David Wyles                                                                     
                                                                                
JPMorgan Cazenove (broker to Tesco)                    Tel: [phone]    
John Paynter                                                                    
Luke Bordewich                                                                  
                                                                                
Maitland (PR adviser to Tesco)                         Tel: [phone]    
Angus Maitland                                                                  
                                                                                


This announcement does not constitute an offer or invitation to purchase any
securities. The Offer is being made solely by means of the Offer Document and
the accompanying Form of Acceptance, which contain the full terms and conditions
of the Offer, including details of how it may be accepted.

Greenhill & Co. International LLP, which is authorised and regulated in the
United Kingdom by the Financial Services Authority, is acting exclusively for
Tesco Holdings and Tesco and no-one else in connection with the Offer and will
not be responsible to anyone other than Tesco Holdings and Tesco for providing
the protections afforded to clients of Greenhill & Co. International LLP nor for
providing advice in relation to the Offer.

This announcement has been prepared for the purpose of complying with English
law and the City Code and the information disclosed may not be the same as that
which would have been disclosed if this announcement had been prepared in
accordance with the laws of jurisdictions outside the United Kingdom.

The availability of the Offer to persons who are not resident in the United
Kingdom may be affected by the laws of the relevant jurisdictions. Persons who
are not so resident should inform themselves about and observe any applicable
requirements. Further details in relation to Overseas Shareholders are contained
in the Offer Document.

The Offer (including the Loan Note Alternative) is not being made, directly or
indirectly, in or into and is not capable of acceptance in or from Canada,
Australia or Japan. Accordingly, copies of this announcement are not being, and
must not be, mailed or otherwise forwarded, distributed or sent in or into or
from Canada, Australia or Japan. Custodians, nominees and trustees should
observe these restrictions and should not send or distribute copies of this
announcement in or into Canada, Australia or Japan.

The Loan Notes to be issued in connection with the Offer have not been, nor will
they be, registered under the US Securities Act nor under any laws of any
jurisdiction of the United States, the relevant clearances have not been, and
will not be, obtained from the securities commission of any province of Canada
and no prospectus has been lodged with, or registered by, the Australian
Securities and Investments Commission or the Japanese Ministry of Finance.
Accordingly, the Loan Notes may not (unless an exemption under the relevant
securities laws is applicable) be offered, sold, resold, delivered or
transferred, directly or indirectly, in or into the United States, Canada,
Australia or Japan or any other jurisdiction if to do so would constitute a
violation of the relevant laws of, or require registration thereof in, such
jurisdiction or to, or for the account or benefit of, a person located in the
United States, Canada, Australia or Japan.

The Offer is being made in the United States pursuant to an exemption from the
US tender offer rules provided by Rule 14d-1(c) under the US Exchange Act.

Notice to US holders of Dobbies Shares:

The Offer is being made for the securities of a UK company and is subject to UK
disclosure requirements, which are different from those of the United States.
The financial information included in the Offer Document has been prepared in
accordance with generally accepted accounting principles of the United Kingdom
and thus may not be comparable to financial information of US companies or
companies whose financial statements are prepared in accordance with generally
accepted accounting principles in the United States. The Offer is being made in
the United States pursuant to applicable US tender offer rules and otherwise in
accordance with the requirements of the City Code. Accordingly, the Offer is
subject to disclosure and other procedural requirements, including with respect
to withdrawal rights, offer timetable, settlement procedures and timing of
payments that are different from those applicable under US domestic tender offer
procedures and law.

The receipt of cash pursuant to the Offer by a US holder of Dobbies Shares may
be a taxable transaction for US federal income tax purposes and under applicable
US state and local, as well as foreign and other tax laws. Each holder of
Dobbies Shares is urged to consult his independent professional adviser
immediately regarding the tax consequences of acceptance of the Offer.

It may be difficult for US holders of Dobbies Shares to enforce their rights and
any claim arising out of the US federal securities laws, since Tesco and Dobbies
are located in a non-US country, and some or all of their officers and directors
may be residents of a non-US country. US holders of Dobbies Shares may not be
able to sue a non-US company or its officers or directors in a non-US court for
violations of the US securities laws. Further, it may be difficult to compel a
non-US company and its affiliates to subject themselves to a US court's
judgement.

In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US
Exchange Act, Tesco or its nominees, or its brokers (acting as agents), may from
time to time make certain purchases of, or arrangements to purchase, Dobbies
Shares outside the United States, other than pursuant to the Offer, during the
period in which the Offer remains open for acceptance. These purchases may occur
either in the open market at prevailing prices or in private transactions at
negotiated prices. Any information about such purchases will be disclosed as
required in the UK, will be reported to a Regulatory Information Service and
will be available on the London Stock Exchange website,
www.londonstockexchange.com.





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