Tender Offer

Capital & Regional PLC
22 March 2002



Capital & Regional plc
22 March 2002



CAPITAL & REGIONAL PLC TENDER OFFER



•         The board of Capital & Regional plc ("Capital & Regional" or the "
Company") announces a return of capital to Shareholders of up to £50 million by
way of a tender offer (the "Tender Offer")



•        The Company intends, through the Tender Offer, to buy back 22.2% of
the Ordinary Shares of Capital & Regional at a price of 285 pence per Ordinary
Share



•        In addition, Capital & Regional Shareholders on the register at
close of business on 5 April 2002 will be entitled to receive and retain the
final dividend of 3.5p per Ordinary Share declared on 19 March 2002 regardless
of whether or not they participate in the Tender Offer



•         On a pro forma basis, fully diluted net assets per share, as if the
transaction had occurred on 25 December 2001, and including the effect of
transactions completed since the year end, would have increased from 343.3 pence
to 349.5 pence



•         On the same basis the Group's "triple net" assets per share would
have increased from 328.9 pence to 335.0 pence



Martin Barber, Chief Executive of Capital & Regional, said:

"Following the completion of the Mall Fund, we are pleased to announce the
intended return of capital by way of a Tender Offer.  The Board believes that a
Tender Offer is the most appropriate means of returning funds to Shareholders as
it gives Shareholders the option of whether to participate or not"


Introduction

Capital & Regional announced on 25 January 2002 that, following the completion
of the Mall Fund, a £670 million shopping centre fund with clients of Morley
Fund Management Limited, it intended to return £50 million of capital to
Shareholders. The formation of the Mall Fund was approved by Shareholders on 18
February 2002 and completed on 28 February 2002.

The Board proposes to achieve this return of capital to Shareholders through a
tender offer to buy back 22.2 per cent. of the Company's Ordinary Shares at a
price of 285 pence per Ordinary Share. This Tender Offer will be financed by
revolving secured banking facilities available to the Group and requires
Shareholder approval.

The following is a summary of the background to and reasons for the Tender
Offer, including the the principal terms and conditions on which it will be
made.  Full details of the Tender will be set out in the circular (the "Circular
") that will be posted to all Shareholders as soon as practicable.

Set out at the end of this announcement is an expected timetable for the Tender
Offer.  Please note that this timetable, and the times and dates relating to the
Tender Offer (including for the extraordinary general meeting) set out in the
text below are provisional and may be subject to change.  The definitive
timetable for the Tender Offer will be set out in the Circular.



Background to and reasons for the Tender Offer

The Board was pleased to announce on 25 January 2002 the launch of the Mall Fund
with clients of Morley Fund Management Limited. The formation of the Mall Fund,
together with the formation of the Junction Fund (which was completed on 3
January 2002) also with clients of Morley Fund Management Limited, marks a
significant step in the Company's stated strategy of changing from a property
investment company to a very focused owner and manager of specific property
types.

The Chairman stated in the Company's circular to Shareholders dated 1 February
2002 that the Group intended to return £50 million of capital to Shareholders
following completion of the Mall Fund, subject to any necessary Shareholder
approvals. £50 million is an amount which the Board believes can prudently be
returned and still leave the Group in a position to implement the Board's
strategy for growth.

Following the sale of its shopping centre and retail park portfolios to the Mall
and Junction Funds respectively, the Group is now in a position to return funds
to Shareholders.

The Board now proposes to return up to £50 million to Shareholders pursuant to
the Tender Offer. The Board believes that a tender offer is an appropriate means
of returning funds to Shareholders as it (subject to the provisions relating to
certain overseas shareholders which will be set out in the Circular) gives all
Shareholders the choice of whether or not to participate in the return of
capital. Shareholders may opt to tender some or all of their Ordinary Shares in
return for cash, or they may choose to retain their Ordinary Shares and, in the
event that the Tender Offer is completed successfully, thereby increase their
pro rata shareholding in the Company.



The Tender Offer

The Tender Offer will be conditional on the passing of the Resolution which will
be set out in the notice of the Extraordinary General Meeting at the end of the
Circular. The Tender Offer will only be available to Shareholders on the
register of members of Capital & Regional at close of business on 19 April 2002
and in respect of Ordinary Shares held by them on that date. The Tender Offer
will be terminable on or before the date it closes if the Directors conclude
that the Tender Offer and subsequent purchase of Ordinary Shares by the Company
from Credit Suisse First Boston Equities Limited would no longer be in the
interests of the Company and/or Shareholders, in which case the Tender Offer
would lapse.

The terms and conditions of the Tender Offer will be set out in detail in the
Circular.  There follows a summary:

• Credit Suisse First Boston Equities Limited will purchase as principal up to
17,543,859 existing issued Ordinary Shares for a total consideration of up to
£50 million and then sell such Ordinary Shares as are purchased pursuant to the
Tender Offer to Capital & Regional for cancellation.

• All Shareholders (other than certain overseas shareholders) will be given the
opportunity to participate in the Tender Offer.

• The Tender Offer will be void if less than one per cent. of Ordinary Shares in
issue are tendered by Shareholders.

• Ordinary Shares will be purchased from Shareholders by Credit Suisse First
Boston Equities Limited at the Tender Price of 285 pence per Ordinary Share and
then sold to Capital & Regional by Credit Suisse First Boston Equities Limited
at the same price.

• Shareholders who wish to participate in the Tender Offer will have to return a
completed Tender Form to be received by Lloyds TSB Registrars by no later than 3
pm on 19 April 2002.

• Shareholders will not have to tender any Ordinary Shares if they do not wish
to.

• Subject to the Tender Offer becoming unconditional, subject to the provisions
relating to certain overseas shareholders and subject to share options not being
exercised, tenders will be accepted on the following basis :

- If a Shareholder (other than certain overseas shareholders) validly tenders
22.2 per cent. or less of his Ordinary Shares, his tender will be accepted in
full.

- If a Shareholder (other than certain overseas shareholders) validly tenders in
excess of 22.2 per cent. of his Ordinary Shares, his tender will be accepted for
22.2 per cent. of his Ordinary Shares and the excess will be satisfied on a
pro-rata basis, to the extent that other Shareholders tender less than 22.2 per
cent. of their Ordinary Shares.

• All Ordinary Shares purchased pursuant to the Tender Offer will be purchased
free of commission and dealing charges.

• Ordinary Shares will be purchased by Credit Suisse First Boston Equities
Limited "ex" dividend.  The dividend record date for the final dividend of 3.5p
per Ordinary Share declared on 19 March 2002 is 5 April 2002 and therefore a
person who is a registered holder of Ordinary Shares at the close of business on
that date, will in respect of their Ordinary Shares, be entitled to receive the
final dividend regardless of whether or not they successfully tender those
Ordinary Shares.

• The Tender Offer is expected to open on 22 March 2002 and to close at 3pm on
19 April 2002.

• Tender Forms will become irrevocable at the time of receipt by the Receiving
Agent.



United States Shareholders

The Circular will explain how the Tender Offer is being made to US Shareholders
and how they may participate in it.



Convertible Unsecured Loan Stock ("CULS")

A holder of CULS is currently entitled (at the times and in the manner set out
in the Stock Trust Deed) to convert his Stock into fully paid Ordinary Shares at
a rate of £5.037 nominal amount of ordinary share capital per £100 nominal
amount of Stock. Under the terms of the Stock Trust Deed, the Tender Offer will
result in an adjustment to such conversion rate. The Trustee has agreed that
Credit Suisse First Boston (Europe) Limited be appointed by the Company to
determine the adjustment in accordance with a formula set out in the Stock Trust
Deed.



Financial Effects of the Tender Offer and Transactions Completed Since the Year
End

An unaudited pro forma statement of consolidated net assets, for illustrative
purposes only, has been prepared to reflect the Tender Offer as if it had
occurred on 25 December 2001 and including the effect of transactions completed
since the year end, and will be set out in the Circular.  On this pro forma
basis, the Group's fully diluted net assets per share would have increased from
343.3 pence to 349.5 pence.  On the same basis, the Group's triple net assets
per share would have increased from 328.9 pence to 335.0 pence.

A note to the pro forma statement of consolidated net assets shows that,
reflecting the Tender Offer and including the effect of transactions completed
since the year end, the Group's pro forma gearing would, assuming the conversion
of all CULS to equity (based on the exercise of CULS before any adjustment to
the CULS holders' entitlement following the buyback), have fallen from 138.2 per
cent. to 44.1 per cent.



Current Trading and Prospects

As announced in the Preliminary Results on 19 March 2002, for the year ended 25
December 2001 the Company's pre tax profits were £11.4 million (2000: £14.2
million).

The Board is optimistic about the prospects of Capital & Regional in light of
its recent transactions which the Board believes will have a beneficial impact
on the Group's performance.



Extraordinary General Meeting

The Tender Offer is subject to the approval of Shareholders at the Extraordinary
General Meeting.  Accordingly, a notice convening an Extraordinary General
Meeting of the Company to be held at 10 am on 18 April 2002 at 10 Lower
Grosvenor Place, London SW1W 0EN will be set out at the end of the Circular.  At
this meeting, the Resolution will be proposed as a special resolution to seek
authority to make on market purchases of Ordinary Shares as will be described in
the Circular.

The maximum number of Ordinary Shares which may be purchased pursuant to the
proposed purchase authority is 17,543,859 Ordinary Shares, representing
approximately 22.2 per cent. of Capital & Regional's issued ordinary share
capital at 21 March 2002. This authority will expire at the conclusion of the
next annual general meeting of the Company or 15 months after the date on which
the resolution is passed (whichever is earlier).

The Company retains its existing authority to repurchase up to 11,254,568
Ordinary Shares (representing as at the date of this document up to 14.3 per
cent.) of its issued share capital as authorised at an extraordinary general
meeting of the Company held on 10 July 2002 and intends to replace this
authority at the next annual general meeting.



Recommendation

Your Directors, who have received financial advice from Credit Suisse First
Boston (Europe) Limited and UBS Warburg Ltd., consider that the Tender Offer is
in the best interests of Shareholders as a whole.  In providing their advice to
the Directors, Credit Suisse First Boston (Europe) Limited and UBS Warburg Ltd.
have relied upon the Director's commercial assessment of the Tender Offer.

Accordingly, your Directors unanimously recommend all Shareholders to vote in
favour of the Resolution to be proposed at the EGM to be held on 10 am on 18
April 2002, as they intend to do so in respect of their own shareholdings which
amount to 4,112,644 Ordinary Shares, representing in aggregate approximately 5.2
per cent. of the issued ordinary share capital of Capital & Regional.

Your Directors are making no recommendation to Shareholders in relation to
participation in the Tender Offer itself. Whether or not Shareholders decide to
tender their Ordinary Shares will depend, amongst other things, on their view of
Capital & Regional's prospects and their own individual circumstances, including
their tax position. Shareholders are recommended to consult their own duly
authorised independent advisers and make their own decision.



Expected Timetable        2002

Tender Offer opens         22 March

Record Date for the Tender Offer 19 April

Latest time and date for receipt of Forms of Proxy     10am on 16 April

Extraordinary General Meeting      18 April

Latest time and date for receipt of Tender Forms 3pm on 19 April

Announcement of take-up level under the Tender Offer and related details
22 April

Settlement date: cheques dispatched and assured payments through CREST 26 April





ENQUIRIES


Capital & Regional     Telephone: [phone]
Martin Barber

Hudson Sandler     Telephone: [phone]
Michael Sandler / Andrew Hayes / Wendy Baker

Credit Suisse First Boston (Europe) Limited     Telephone: [phone]
Mark Seligman

UBS Warburg Ltd.     Telephone: [phone]
Tim Guest


Credit Suisse First Boston (Europe) Limited and Credit Suisse First Boston
Equities Limited, which are regulated in the United Kingdom by The Financial
Services Authority, are acting for Capital & Regional and for no one else in
connection with the matters referred to herein and will not be responsible to
anyone other than Capital & Regional for providing the protections afforded to
customers of Credit Suisse First Boston (Europe) Limited and Credit Suisse First
Boston Equities Limited nor for providing advice in relation to the matters
referred to herein.

UBS Warburg Ltd., a wholly owned subsidiary of UBS AG, which is regulated in the
United Kingdom by The Financial Services Authority, is acting for Capital &
Regional and for no one else in connection with the matters referred to herein
and will not be responsible to anyone other than Capital & Regional for
providing the protections afforded to customers of UBS Warburg Ltd. nor for
providing advice in relation to the matters referred to herein.



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