Pilkington has been informed that the Bavarian Supreme Court has issued its decision in the appeal brought by both Pilkington Holding GmbH and certain minority shareholders in that company relating to the valuation of the minority shareholdings. In 1989, Pilkington Holding GmbH (then Pilkington Deutschland GmbH) made an offer to acquire the minority interests in Pilkington Deutschland AG (then Flachglas AG) and Dahlbusch AG. As previously disclosed, certain minority shareholders challenged the offers made as insufficient.

The Supreme Court has decided that, in the case of Pilkington Holding GmbH, the price payable per share should be reduced from EUR350 per share (as determined by the court of first instance) to EUR344 per share and, as requested by Pilkington Holding GmbH, the decision of the court of first instance should be upheld in all other material respects.

As anticipated, the cash settlement payable, all of which will be capitalised as Goodwill, will be in the region of £40 million, with payment being made around the end of the current financial year. Around half of this amount is already included in the Group's balance sheet as 'Non-equity Minority Interest' (debt under IFRS). The balance of the payment is in respect of additional interest accrued since 1989, as noted under 'Contingent Liabilities' in the Group's Report and Accounts for the year ended 31st March 2005.

In the related Dahlbusch AG case, the court dealing with that case has indicated that it would await the above decision and is unlikely to issue its decision before the beginning of 2006.