Steel Partners Japan Welcomes Sapporo Openness to Negotiate

Wednesday March 26 5:36 PM

On March 10, 2008, SPJSF delivered a letter to the Company requesting negotiations with the Board regarding its revised proposal (the "Proposal") whereby SPJSF would seek an ownership position of 33.3% of the Company's outstanding voting rights, at an increased offer price of Yen 875 per common share. On March 14, 2008, SPJSF received a letter from the Company stating its willingness to enter discussions on the Proposal.

"We were pleased to read that the Company's Board of Directors is finally ready to enter discussions regarding a negotiated transaction," Warren Lichtenstein of SPJSF stated in the letter. "We believe that these negotiations will benefit all stakeholders and represent a meaningful step towards increasing corporate value."

SPJSF said it was surprised that the Company continues to believe that necessary information regarding the Proposal was still outstanding. SPJSF requested that the Company provide a written list of all relevant information that it still believes SPJSF should provide prior to any meeting, so that SPJSF may provide all relevant information at that time.

SPJSF proposed that a meeting to discuss the Proposal take place at a mutually convenient time after the 84th Ordinary General Meeting of Shareholders scheduled for March 28, 2008.

In order to minimize ambiguity and misunderstanding, SPJSF said it would withhold additional explanations and details of the Proposal until such a meeting can be held.

SPJSF has been a long-term, supportive shareholder of Sapporo Holdings since 2004 and is currently the largest shareholder holding, together with its related parties, 73,400,000 shares, or approximately 18.6% of the Company's outstanding shares.

Full text of the letter:

              STEEL PARTNERS JAPAN ASSET MANAGEMENT, LP
                          24 FEDERAL STREET
                           BOSTON, MA 02110

March 26, 2008

Sapporo Holdings Limited (the "Company")
20-1, Ebisu 4-chome, Shibuya-ku, Tokyo 150-8522
Attention: Mr. Takao Murakami, Representative Director and President

        Steel Partners Japan Strategic Fund (Offshore), L.P. ("SPJSF")
                             P.O. Box 2681 GT, Century Yard, 4th Floor
                                        Cricket Square, Hutchins Drive
                                             George Town, Grand Cayman
                                   Cayman Islands, British West Indies

Re: Negotiated Transaction

We acknowledge receipt of the Company's letter, dated March 14, 2008
 (the "March 14 Letter"). We were pleased to read that the Company's
 Board of Directors (the "Board") is finally ready to enter
 discussions regarding a negotiated transaction. We believe that these
 negotiations will benefit all stakeholders and represent a meaningful
 step towards increasing corporate value. We hope that the Board feels
 the same way.

Based on the Board's November 22, 2007 letter to SPJSF, the stated
 purpose of which was to clarify ambiguities or otherwise confirm
 information that we had previously provided to the Board, we believed
 that we had satisfactorily provided all Necessary Information when we
 responded to the Board's November 22 letter. As we also responded to
 all other questions presented to us by the Board and the Board's
 Special Committee during our in-person meetings on January 23, 2008,
 we were surprised that the Board and Special Committee opinions, as
 well as the March 14 Letter, stated that Necessary Information was
 still outstanding. If there are any requests for relevant Necessary
 Information that we have not yet responded to, or if any relevant
 information is still outstanding, we respectfully request that you
 present us with the information or reconfirmation you require in
 writing prior to our entering into discussions. We will gladly
 provide you with any appropriate relevant information you need to
 evaluate our revised proposal, the basic terms of which were set
 forth in our March 10th letter (the "Proposal"), as we are committed
 to improving the Company's corporate value.

With regard to the Proposal, we propose to provide additional
 explanations and details of the Proposal, including changes made to
 what you refer to as the "core elements" of our February 15, 2007
 proposal, in a meeting in order to minimize ambiguity and
 misunderstanding. We propose further that our meeting to discuss the
 Proposal take place at a mutually convenient time after the 84th
 Ordinary General Meeting of Shareholders scheduled for March 28,
 2008, in order to minimize Proposal-related interference at that
 meeting.

I look forward to our meeting to discuss the Proposal and working to
 increase corporate value.

Respectfully,

Warren G. Lichtenstein

Copy to: Thomas J. Niedermeyer, Jr., managing partner
Yusuke Nishi, representative director, Steel Partners Japan K.K.

Full text of SPJSF's letter can be found at www.spjsf.jp.

About SPJSF

Steel Partners Japan Strategic Fund (Offshore), L.P. is a long-term relationship/active value investor that seeks to work with the management of its portfolio companies to increase corporate value for all stakeholders and shareholders.

Contact:

Japan Media Contact:
PRAP JAPAN
Ian Messer
TEL: 813-3486-2931
Email address: financial@prap.co.jp
or
US Media Contacts
Steel Partners Japan
Jason Booth
(310) 941-3616
or
Sitrick And Company
Tom Becker
(212) 573-6100

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