Response to Tender Offer

28 May 2010

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The Directors of Petards ("Directors" or the "Board") have noted the announcement of a tender offer ("Tender Offer") by Religare Capital Markets (UK) Limited on behalf of Water Hall Group plc ("Water Hall") to acquire up to 104,511,925 ordinary shares of 1p each in the Company ("Petards Shares").

The Tender Offer at a price of 0.70 pence represents a premium of 27.27 per cent. over the closing mid-market price of 0.55 pence per Petards Share on 26 May 2010, the day before the announcement of the Tender Offer.

If Water Hall were to acquire all of the Petards Shares it is tendering for its shareholding would represent approximately 29.99 per cent. of the issued ordinary share capital of Petards. This level of shareholding would allow it to veto any special resolutions proposed by the Board.

Although it recognises that the Tender Offer price represents a premium to the market price of a Petards Share on 26 May 2010, the Board does not consider that the Tender Offer fully reflects the underlying value of the Company.

However the Directors recognise that shareholders whose holdings of Petards Shares are currently worth less than £3 will (assuming the Tender Offer becomes unconditional) be better off accepting the Tender Offer than they will be under the terms of the Company's proposed share re-organisation, details of which were announced on 19 May 2010 and were set out in a circular to shareholders dated 19 May 2010, copies of which are available from the company's website ( A general meeting to approve the share re-organisation has been convened for 24 June.

Shareholders who are in any doubt about the Tender Offer or what action to take are recommended to consult a person authorised under the Financial Services and Markets Act 2000 who specialises in advising on the acquisition of shares and other securities before taking any action.

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