Waterford Wedgwood plc Announces Possible Cash Offer for Royal Doulton plc

Proposed Fully Underwritten EURO100 million Rights Issue; New Banking Facilities Secured; Trading Update

DUBLIN, Ireland, Oct. 22, 2004 (PRIMEZONE) --


 For Immediate Release
 21 October 2004

             Possible Cash Offer for Royal Doulton plc
     Proposed Fully Underwritten EURO100 million Rights Issue
                 New Banking Facilities Secured
                          Trading Update

 Waterford Wedgwood plc, ("the Group" or "Waterford Wedgwood") the
 luxury lifestyle group, today announces that it is in advanced
 discussions about a possible cash offer for Royal Doulton plc
 ("Royal Doulton"), one of the world's leading chinaware
 manufacturers and owner of the Royal Doulton, Minton and Royal
 Albert brands.

 The Group also announces a proposed fully underwritten rights
 issue of approximately EURO100 million, and that it has secured
 new banking facilities and repaid its existing senior facilities
 in theirentirety.

 Offer for Royal Doulton Under Discussion

 The Boards of Waterford Wedgwood and Royal Doulton are in
 advanced discussions regarding a possible recommended offer for
 Royal Doulton by Waterford Wedgwood. Due diligence has been
 completed to the satisfaction of Waterford Wedgwood, but certain
 other matters remain to be resolved and consequently there can
 be no certainty that a formal offer will be made. Any formal
 offer is expected to be 12 pence in cash per Royal Doulton share
 and, subject to the resolution of these matters, the Board of
 Royal Doulton intends to recommend such an offer.

 Waterford Wedgwood currently holds 21.16% of Royal Doulton shares
 and these would not be the subject of the possible offer. Sir
 Anthony O'Reilly, Chairman of Waterford Wedgwood, and Mr Peter
 John Goulandris, Deputy Chairman of Waterford Wedgwood, between
 them own a further 3.99% of Royal Doulton shares; these would be
 the subject of the possible offer.

 A further announcement will be made in due course.

 Fully Underwritten EURO100 million Rights Issue

 - Proposed Rights Issue on the basis of 5 New Stock Units for
   every 3 Stock Units held by qualifying stockholders (on a
   record date to be determined) at EURO0.06 per New Stock Unit
   (approximately 1.66 billion New Stock Units). Rights Issue is
   fully underwritten by a company controlled by Sir Anthony
   O'Reilly and Mr Peter John Goulandris (70% of the Rights
   Issue), and by Davy (30% of the Rights Issue)

 - Rights Issue price represents a discount of 53.8% to the
   closing price of EURO0.13 per Stock Unit on 20 October, 2004

 - O'Reilly and Goulandris families have confirmed their
   intention to take up their full rights entitlements

 - Rights Issue fully covers the cost of the equity component of
   the possible Royal Doulton acquisition

 - Rights Issue is conditional on an announcement by the Group
   of a firm intention to make an offer for Royal Doulton but
   is not conditional on completion of the Royal Doulton

 - Rights Issue is also conditional on, inter alia, the grant
   by the Irish Takeover Panel of a waiver under Rule 9 of the
   Irish Takeover Rules and on independent shareholder
   approval, each in respect of the underwriting arrangements.
   It is also conditional on shareholders approving an increase
   in the authorised share capital of the Group and the renewal
   of various allotment authorities.

 New Banking Arrangements Secured

 A new facility led by Burdale Financial Limited, a subsidiary
 of Wachovia Corporation, replaces in full the previous bank
 syndicate. The new facility is secured on the assets of the
 Group and has a term  of up to four years. With less
 restrictive covenants, the new facility offers greater
 flexibility and scope. It has also facilitated the repayment
 of existing senior facilities.

 Strategic and Trading Update

 Our Plan for Growth, announced earlier this year, is underway.
 Our working capital programme will be completed by December
 2005 with major advances expected to be made by March 2005. The
 capacity utilisation of our Wedgwood factories will be
 transformed with concomitant efficiencies by the acquisition of
 Royal Doulton, should that take place. Focused marketing
 initiatives have been introduced to drive revenue growth over
 the next few years.

 However, sales for the six months to 30 September 2004 were
 disappointing at EURO356 million. On a like-for-like basis
 (excluding exchange and All-Clad), sales were 5% below the
 corresponding period last year and, as a consequence, the
 pre-tax result for the six months is likely to be
 significantly below consensus market expectations. Some of
 the reduction in sales is because we have refocused our
 retail distribution in the United States.

 At Waterford Wedgwood's Annual General Meeting held today
 in Dublin, the following comments were made:

 Sir Anthony O'Reilly, Chairman of Waterford Wedgwood, said:

 "The past three years have been turbulent and we would not
 deny that the financial performance of the company continues
 to disappoint us all.

 "Although the current environment remains challenging, in
 the past six months we have made many changes and put in
 place some important foundations for future growth. Today
 is an important day in the history of Waterford Wedgwood.

 "The possible acquisition of Royal Doulton would transform
 Wedgwood. The benefits of such a deal are immediately
 apparent. With Royal Doulton's restructuring largely
 completed, we could add Royal Doulton's revenues to our
 top-line sales without greatly increasing our costs. This
 would increase the profitability of the combined

 "The fact that the O'Reilly and Goulandris families are
 underwriting most of the Rights Issue is proof positive of
 our belief in Waterford Wedgwood and its world-class
 portfolio of products."

 Redmond O'Donoghue, Group Chief Executive, said:

 "Today's announcements are very significant. If the
 acquisition of Royal Doulton takes place, the very
 material investment that we have made in recent years in
 our manufacturing facilities will enable us to integrate
 Royal Doulton with minimal disruption and lay down the
 foundation for improved profitability.

 "Our new bank facility provides us with a greater
 degree of flexibility, enhances our liquidity and allows
 us the freedom to operate our business, focusing on cash
 generation in the short-term. While trading performance
 in the six months to 30 September wasbehind last year,
 we are confident that planned marketing initiatives
 and the previously announced cost saving measures will
 lead to a reversal of this trend."

 The contents of this announcement have been prepared by
 and are the sole responsibility of Waterford Wedgwood,
 and have been approved by J&E Davy ("Davy") for the
 purposes of section 21(2)(b) of the Financial Services
 and Markets Act 2000 of the United Kingdom. Davy
 is acting for Waterford Wedgwood and no one else in
 connection with the Rights Issue and will not be
 responsible to anyone other than Waterford Wedgwood
 for providing the protections afforded to the clients
 of Davy or for providing advice in connection with
 the Rights Issue.

 Lazard & Co., Limited, is acting for Waterford Wedgwood
 in connection with the possible offer and no-one else,
 and will not be responsible to anyone other than
 Waterford Wedgwood for providing the protections
 afforded to clients of Lazard & Co., Limited or for
 providing advice in relation to the possible offer.

 This announcement shall not constitute, or form part of,
 an offer of,or the solicitation of any offer, to subscribe
 for or buy any of the Rights Issue Stock Units to be
 issued or sold in connection with the Rights Issue.
 Offers should only be made on the basis of the information
 contained in the Prospectus to be issued in due course in
 connection with the Rights Issue and any supplements
 thereto. The Prospectus will contain detailed information
 about the Rights Issue, Waterford Wedgwood and its
 management, as well as financial information.

 The offer of the Rights Issue Stock Units in certain
 jurisdictions may be restricted by law and therefore
 potential investors should inform themselves about and
 observe any such restrictions. This announcement does
 not contain or constitute an offer of securities for
 sale in the United States. The securities referred to
 herein have not been and will not be registered under
 the US Securities Act of 1933, as amended (the "US
 Securities Act") and may not be offered or sold in the
 United States absent registration or an exemption from
 registration under the US Securities Act. This
 announcement and the information contained herein is
 not for release, publication or distribution in or
 into the United States, Canada, Australia or Japan.

                This information is provided by RNS
       The company news service from the London Stock Exchange


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