J Sainsbury : Convertible Bond Offering

NOT FOR DISTRIBUTION IN OR INTO THE U.S. (OR TO U.S. PERSONS), CANADA, AUSTRALIA, OR JAPAN, OR IN ANY OTHER JURISDICTION IN WHICH SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW

J Sainsbury plc ("Sainsbury's" or the "Company") today announces the launch of an offering of c. £400 million convertible bonds due 2019 (the "Bonds"). The proceeds will be used to refinance Sainsbury's £190 million convertible bonds redeemed in July 2014 and part refinance the £248 million acquisition of the remaining 50% of Sainsbury's Bank not already owned, which completed in January 2014.

The Bonds will be convertible into fully paid new and/or existing ordinary shares of Sainsbury's ("Ordinary Shares") and are expected to have a coupon in the range of 1.00-1.75% per annum payable semi-annually in equal instalments in arrear and an expected initial conversion price at a premium of 30-35% to the volume weighted average price of the Ordinary Shares on the London Stock Exchange between launch and pricing. The Bonds will be issued at 100% of their principal amount and, unless previously redeemed, converted or purchased and cancelled, will be redeemed at par on the fifth anniversary of the issue of the Bonds in 2019. The Company will have the option to call the Bonds on or after the date falling three years and 21 days after the Closing Date (as defined below), should the then volume weighted average price of the Ordinary Shares be at least 130% of the then prevailing conversion price over a specified period. The final terms of the Bonds are expected to be announced today.

Settlement and delivery of the Bonds is expected to take place on 21 November 2014 (the "Closing Date").

It is intended that application will be made for the Bonds to be listed on a recognised stock exchange prior to the first interest payment date.

UBS Limited ("UBS") is acting as Sole Global Coordinator and UBS and BNP Paribas are Joint Bookrunners.

For further information, please contact:

Media Enquiries:

Trevor Datson

+44 (0)20 7695 7295

Investor Relations:

Duncan Cooper

+44 (0)20 7695 0080

IMPORTANT NOTICE

The information contained in this announcement is for background purposes only and does not purport to be full or complete.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States or to U.S. Persons (each as defined in Regulation S under the U.S. Securities Act of 1933, as amended (the "Securities Act")). The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes, should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement does not constitute or form part of an offer to sell securities or the solicitation of any offer to subscribe for or otherwise buy any securities to any person in the United States, Australia, Canada, Japan or in any other jurisdiction to whom or in which offers or sales is unlawful. The securities referred to in this announcement have not been and will not be registered in the United States under the Securities Act and may not be offered or sold in the United States unless registered under the Securities Act or offered in a transaction exempt from, or not subject to, the registration requirements of the Securities Act. Subject to certain exceptions, the securities referred to herein may not be offered or sold in Australia, Canada or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada or Japan. There will be no public offer of the securities in the United States, Australia, Canada or Japan.

The offering of the Bonds is addressed to, and directed in member states of the European Economic Area which have implemented the Prospectus Directive (the "Prospectus Directive") at, persons who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive (directive 2003/71/EC, as amended) ("qualified investors"). In addition, in the United Kingdom, the offering of the Bonds is directed only at qualified investors (i) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") and qualified investors falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"), and (ii) to whom it may otherwise lawfully be communicated under the Order. This announcement must not be acted on or relied on by persons who are not relevant persons in the United Kingdom or qualified investors as the case may be. Any investment or investment activity to which this announcement relates is available only to relevant persons and will be engaged in only with relevant persons or qualified investors as the case may be.

Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. Persons considering making such investments should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning the Bonds. The value of the Bonds can decrease as well as increase. Potential investors should consult a professional adviser as to the suitability of the Bonds for the person concerned.

Each of the Joint Bookrunners, each of which is authorised and supervised by the Prudential Regulation Authority and is subject to regulation by the Financial Conduct Authority, is acting exclusively for the Company and no one else in connection with the offering of the Bonds and will not be responsible to any other person for providing the protections afforded to clients of such Joint Bookrunner, respectively, or for providing advice in relation to the offering of the Bonds, the Bonds or any other transaction, matter or arrangement referred to in this announcement.

Each of the Company, the Joint Bookrunners and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any statement contained in this announcement whether as a result of new information, future developments or otherwise.

In connection with the offering of the Bonds, the Joint Bookrunners and any of their respective affiliates, acting as investors for their own accounts, may subscribe for or purchase securities and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such securities and any other securities of the Company or related investments in connection with the Bonds, the Company or otherwise. Accordingly, references to the securities being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, the Joint Bookrunners and any of their respective affiliates acting as investors for their own accounts. None of the Joint Bookrunners intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

None of the Joint Bookrunners or any of their respective directors, officers, employees, affiliates, advisers or agents accepts any responsibility, duty or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its other subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.