Name of party notifying Baugur Group Address of the party notifing Túngötu 6, 101 Reykjavík Date of transaction 5.1.2007 Number of shares in transaction 528.620.326 Number of shares before the transaction 679.587.238 Number of shares after the transaction 150.966.912 Holdings of total nominal value before the transaction % 8,55% Holdings of total nominal value after the transaction % 1,90% Notification is based on Art. 33 (1) of the Act no. 33/2003 point(s) no.3. Additional information The transaction relates to closure of derivative contract and transfer by Baugur Group hf of its holding in FL Group hf. to a subsidiary, BG Capital ehf. which is 100% owned and controled by Baugur Group hf. The transaction will not change Baugur Group hf. risk related to the shares of FL Group hf. Baugur Group's holdings in FL Group are held in a few companies, including BG Capital and Baugur Group. Total number of shares held by Baugur Group are 1,441,934,845 which equals to 18.2% holding.