Offer Update

Babcock International Group PLC
15 June 2004


Not for release or publication in or into the United States, Canada, Japan or 
Australia.


15 June 2004


 RECOMMENDED OFFER BY CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED ON BEHALF OF
            BABCOCK INTERNATIONAL GROUP PLC FOR PETERHOUSE GROUP PLC

               Offer Update - Offer Unconditional In All Respects

On 22 March 2004 the Board of Babcock and the Peterhouse Directors (other than
David Jackson and Simon Foster) announced that agreement had been reached on the
terms of a recommended cash and shares offer, to be made by Credit Suisse First
Boston (Europe) Limited on behalf of Babcock, for the entire issued and to be
issued share capital of Peterhouse.

Today, the Board of Babcock is pleased to announce that the condition relating
to Admission has been satisfied and that all the conditions to the Offer have
now been satisfied or waived.  The Offer is unconditional in all respects.  The
Offer will be extended until further notice, but no later than 15 August 2004
and the Mix and Match Facility will be extended until 22 June 2004.

Now that the Offer is unconditional in all respects, all members of the
Peterhouse board are now recommending Peterhouse Shareholders to accept the
Offer if they have not already done so.

Application has been made to the UK Listing Authority and the London Stock
Exchange for the issue of up to 57,052,346 New Babcock Shares, and these have
been admitted to the Official List and have been admitted to trading on the
London Stock Exchange.  The New Babcock Shares rank pari passu with the existing
issued shares of Babcock.  Dealings in the New Babcock Shares started at 8.00
a.m. on 15 June 2004.

As stated in the Offer Document and in the announcement of 8 June 2004, Babcock
intends to procure the making of an application by Peterhouse to the UK Listing
Authority for the cancellation of the listing of Peterhouse Shares on the
Official List and to the London Stock Exchange for the cancellation of trading
of Peterhouse Shares on its market for listed securities.  It is anticipated
that cancellation of listing and trading will take effect at 8.00 a.m. on 14
July 2004, after twenty business days notice following the date of this
announcement.  Peterhouse Shareholders are reminded that such cancellation would
significantly reduce the liquidity and marketability of any Peterhouse Shares
not assented to the Offer.

Settlement of the consideration due to accepting Peterhouse Shareholders will be
despatched within 14 days of today's date in respect of Peterhouse Shares for
which valid acceptances of the Offer are received by 11.59 p.m. today.
Settlement of consideration in respect of acceptances which are received after
11.59 p.m. today and which are valid in all respects will be despatched within
14 days of receipt of such acceptances.

Peterhouse Shareholders who have not yet accepted the Offer are encouraged to
return the Form of Acceptance, whether or not their Peterhouse Shares are held
in CREST, duly completed, signed and witnessed, and accompanied by their share
certificate(s) and / or other document(s) of title (if their shares are held in
certificated form) by hand or by post to Computershare Investor Services PLC, PO
Box No 859, The Pavillions, Bridgwater Road, Bristol BS99 1XZ or by hand only to
Computershare Investor Services PLC, 7th Floor Jupiter House, Triton Court, 14
Finsbury Square, London EC2A 1BR.  This must be done by no later than 1.00 p.m.
on 22 June 2004 to be eligible for the Mix and Match Facility.

Save as disclosed above, neither Babcock nor any person deemed to be acting in
concert with Babcock held any Peterhouse Shares or rights over any Peterhouse
Shares prior to the commencement of the Offer Period on 2 February 2004, or has
either acquired or agreed to acquire any Peterhouse Shares or rights over any
Peterhouse Shares since then.

All terms defined in the Offer Document dated 15 April 2004 have the same
meaning in this announcement, unless the context requires otherwise.

ENQUIRIES

Babcock International Group PLC                             [phone]
Gordon Campbell, Chairman
Peter Rogers, Chief Executive
Bill Tame, Finance Director

Peterhouse Group Plc                                        [phone]
David Jackson, Executive Chairman
Ted Adams, Deputy Chairman
Alan Robertson, Chief Executive
John O'Kane, Finance Director

Credit Suisse First Boston (Financial Adviser to Babcock)   [phone]
Andrew Christie
Richard Probert

Cazenove (Broker to Babcock)                                [phone]
Malcolm Moir
Dermot McKechnie

Close Brothers (Financial Adviser to Peterhouse)            [phone]
Peter Alcaraz
Gareth Davies

Financial Dynamics (Public Relations Adviser to 
Babcock)                                                    [phone]
Andrew Lorenz
Richard Mountain

Buchanan Communications (Public Relations Adviser to 
Peterhouse)                                                 [phone]
Tim Anderson
Isabel Podda
James Strong


Credit Suisse First Boston, which is regulated in the United Kingdom by the
Financial Services Authority, is acting only for Babcock and no-one else in
connection with the Offer and will not regard any other person as its client or
be responsible to anyone other than to Babcock for providing the protections
afforded to clients of Credit Suisse First Boston, nor for giving advice in
relation to the Offer or any other matter referred to in this announcement.

Cazenove, which is regulated in the United Kingdom by the Financial Services
Authority, is acting only for Babcock and no-one else in connection with the
Offer and will not regard any other person as its client or be responsible to
anyone other than to Babcock for providing the protections afforded to clients
of Cazenove, nor for giving advice in relation to the Offer or any other matter
referred to in this announcement.

Close Brothers, which is regulated in the United Kingdom by the Financial
Services Authority, is acting only for Peterhouse and no-one else in connection
with the Offer and will not regard any other person as its client or be
responsible to anyone other than to Peterhouse for providing the protections
afforded to clients of Close Brothers, nor for giving advice in relation to the
Offer or any other matter referred to in this announcement.

The Offer is not being made directly or indirectly in or into the United States,
Canada, Australia or Japan or to any US person or resident of Canada, Australia
or Japan.  This announcement may not be distributed or sent in, into or from the
United States, Canada, Australia or Japan or to any US person or resident of
Canada, Australia or Japan and doing so may render invalid any purported
acceptance.

The New Babcock Shares have not been, and will be not be, registered under the
US Securities Act of 1933.  Accordingly, the New Babcock Shares may not be
offered, sold or delivered in the United States or to US persons, unless an
exemption from the registration requirements of the US Securities Act 1933 (as
amended) is available.  Also, the relevant clearances have not been, and will
not be, obtained from the securities commission of any province of Canada.  No
prospectus in relation to the New Babcock Shares has been, or will be, lodged or
registered by the Australian Securities Commission, nor have any steps been
taken or will any steps be taken to enable the New Babcock Shares to be offered
in Japan in compliance with applicable securities laws in Japan.  Accordingly,
the New Babcock Shares may not be offered, sold, re-sold or delivered, directly
or indirectly, in or into the United States, Canada, Australia or Japan.

This announcement does not constitute an offer to sell or invitation to purchase
any securities or the solicitation of any vote or approval in any jurisdiction.

The release, publication or distribution of this announcement in certain
jurisdictions may be restricted by law and therefore persons in such
jurisdictions into which this announcement is released, published or distributed
should inform themselves about and observe such restrictions.



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