Blue Square-Israel Sells Its Stake in Home Center to Bilu.

Business Editors

ROSH HA'AYIN, Israel--(BUSINESS WIRE)--March 14, 2000

Blue Square-Israel Ltd. (NYSE: BSI) announced today that it has sold its 38% holding of Home Center (Do It Yourself) Ltd. ("Home Center") to Bilu Enterprsie (H.C.) Ltd. ("Bilu") for approximately $24.7 million. As a result of the sale, the Company will record a capital gain of approximately $8.4 million before tax.

Commenting on the news, Yoram Dar, President and CEO, said, "This sale is another step in our strategy of divesting all non-food interests to focus on our core supermarket business. We are currently pursuing a comprehensive work plan with the goal of significantly improving our financial results during the current year."

Blue Square is a leading retailer in Israel. A pioneer of modern food retailing in the region, Blue Square currently operates 165 supermarkets under different formats, each offering varying levels of service and pricing.

The statements contained in this release which are not historical facts contain forward-looking information with respect to plans, projections, or future performance of the Company, the occurrence of which involve certain risks and uncertainties, including risk of market acceptance, the effect of economic conditions, the impact of competitive pricing, supply constraints, the effect of the Company's accounting policies, as well as certain other risks and uncertainties which are detailed in the Company's filings with the Security and Exchange Commission, particularly the prospectus with respect to its public offering in July, 1996.