Acquisition

Milestone Group PLC
15 January 2008


                              Milestone Group PLC

                          MILESTONE ACQUIRES THE FLEX



AIM listed Milestone Group PLC ('Milestone', the 'Group' or the 'Company') 
announces the conclusion to its current review of strategy with the Group 
focusing on exploiting opportunities in the converging broadcasting and digital 
media sectors.

Milestone has acquired 80 per cent of the issued share capital of The Flex 
(International) Limited ('The Flex') from Jamie Bloom for a nominal 
consideration of £100. Two of the directors of The Flex, Jamie Bloom and 
Deborah White, are being appointed to the Board of Milestone as non-executive 
directors with immediate effect.

The Flex is an early-stage 'web TV' business in which Laurence Bloom, a 
significant shareholder in Milestone and the brother of Jamie Bloom, is a 
founder shareholder. Ryan Bloom, the son of Laurence Bloom, is the co-founder 
and managing director of The Flex.

Milestone further announces it has entered into an 'arms length' loan 
arrangement with Jamie Bloom in order to provide a facility of £500,000 for 
the newly enlarged Group on normal commercial terms.

The Flex was established in late 2006 with a view to sourcing original 
specialist video and audio content which it intends to distribute direct to 
consumers via the internet. It has spent much of the past year developing a 
web TV platform, to be branded 'The Flex', which is due to launch beta trials 
in early 2008.

Milestone's independent Non-executive Chairman, John Sanderson, said:

'Milestone's original intention was always to become a supplier of media to 
whichever platforms emerge from the convergence of broadcasting and 
communications technologies. In my annual report statement last year, 
I explained that the Board was exploring opportunities to position the 
Company as a dedicated digital media group, in line with its decision to move 
away from its exposure to traditional media platforms. This process has taken 
longer than originally anticipated involving the examination of a number of 
proposals. Ultimately, the Board unanimously agreed that The Flex offered the 
mixture of potential risk and reward which we were looking for from an 
investment in a digital platform.

'This deal has been made possible thanks to Jamie Bloom agreeing to make a 
majority shareholding in The Flex available to the Company for a nominal 
consideration. This is a good deal for Milestone shareholders. The Flex is a 
most interesting opportunity, led by visionary management, in a high growth 
sector.

'Milestone now enters a new phase in its development as a broadcast service 
provider. Whilst the internet is now an established and popular platform for 
the distribution of both video and audio the key focus for The Flex will be to 
generate user demand for its own creative content and to monetise this for the 
benefit of the Group. The key selling point of The Flex is that it will be 
able to offer new talent the benefit of professional production, management 
support, event services and promotion as well as an internet distribution 
platform.

'I would particularly like to take this opportunity to welcome our two new 
Board members, Jamie Bloom and Deborah White. Both Jamie and Deborah each bring 
a wealth of business development and corporate finance experience to the 
Company and I am very much looking forward to working alongside them.

'This acquisition brings to a conclusion the Board's current review of strategy.
The Board will continue to explore appropriate opportunities in the future to 
develop the Group by organic growth and targeted acquisition.'

The Flex initially intends to offer programming which targets a core youth 
audience such as lifestyle, football, extreme sports, fashion, talent and new 
music. One of the aims of the platform will be to provide a social 'marketplace'
enabling upcoming musicians, actors, models, fashion designers and film makers 
to 'showpiece' and 'trade' their creative abilities. Content produced for The 
Flex will be available to anyone in the world with a suitable internet 
connection. Although currently UK based and particularly targeted at a UK 
audience, The Flex ultimately aims to expand to provide a global platform.

* FINANCIAL SUMMARY *

The Flex management team have been primarily focused in 2007 on developing the
business plan and working towards launch. To date, The Flex has incurred costs
of approximately £150,000 associated with the development of the platform. This
has been funded by capital injections by The Flex shareholders and is treated as
a loss in the (unaudited) management accounts. The Flex currently has net assets
due to capital injections although it is anticipated further funding support
will be required in 2008. The Flex gross assets, in the unaudited management
accounts at 20 December 2007, were approximately £190,000.


The Board intends to make further notifications to the London Stock Exchange as
The Flex progresses during the course of the coming year.


* TERMS OF TRANSACTION *

The Company has entered into an agreement dated 15 January 2008 to acquire
6,400,000 A ordinary shares of £0.01 each in  The Flex from Jamie Bloom for the
nominal consideration of £100. This holding represents 80 per cent of the total 
issued share capital of The Flex. The nominal consideration of £100 reflects the
current concept (pre-revenue) status  of The Flex and Jamie Bloom's view that
the new business will benefit going forward from being part of a listed entity.

* LOAN ARRANGEMENT *

The Company has entered into a loan arrangement with Jamie Bloom dated 15
January 2008 in order to enable The Flex to launch its new platform and to
provide working capital for the enlarged Group. The facility of £500,000 is
unsecured and can be drawn down by request of the Company over the coming 18
months. Any use of the facility will bear interest at a rate of 3 per cent per
annum above the Bank of England base rate. No other charges are payable in
connection with the facility including no penalties for early repayment. All
loans and interest accrued under the facility become repayable in full in
December 2010.

* RELATED PARTY TRANSACTION *

Laurence Bloom, the brother of Jamie Bloom, is currently the largest single 
shareholder in Milestone with a beneficial interest in 28.06 per cent of the 
Company's total issued share capital.

Laurence Bloom and Jamie Bloom, their family and associates are minority 
shareholders in The Flex, a company in which Milestone has acquired a majority 
shareholding as set out above. The Flex employs Ryan Bloom, the son of Laurence 
Bloom, as its managing director and also currently rents office space in 
London's Victoria ultimately owned by Laurence Bloom.

In addition Jamie Bloom has entered into a loan arrangement with Milestone, the 
details of which are set out above.

The Directors believe that the acquisition of the majority shareholding in The
Flex and the terms of the loan facility to the Company from Jamie Bloom have
been made at arms' length and on normal commercial terms. Having consulted with
the Company's nominated adviser, Arden Partners PLC, the Directors consider that
all of these arrangements are fair and reasonable so far as shareholders in
Milestone are concerned.


* JAMIE BLOOM *

Jamie Bloom has 30 years experience in the leisure and entertainment industry. 
From 1999 to 2002 Jamie served as Managing Director of the Bellhaven Group, 
where he was responsible for the launch of its hotel and conference centre. 
Jamie's previous experience spans the successful launch of Soho's Cafe de Paris 
nightclub (sold for £4m in 2002) to the establishment of a chain of American 
themed restaurants. Jamie started his entrepreneurial career at the Downtown 
Group in 1965 which he developed into a chain of 40 retail outlets including 
Kensington and Carnaby indoor markets.


* DEBORAH WHITE *

Deborah White is an independent financial adviser with significant experience in
capital raising, new launches and business development. Deborah is currently an
executive director of Silver Planet Life Investment Taxation Solutions, a
specialised financial advisory group dealing with high level investment advice
and capital raising. From 1999 to 2006 Deborah was responsible for building
Inter-Alliance City Limited from scratch to an annual turnover in excess of £3m
ultimately leading to the creation of the major Millfield Group advisory
practice. Deborah has spent the past year engaged as a financial consultant to
The Flex in which she is also a director and shareholder.


* MANAGEMENT *

In addition to Jamie Bloom and Deborah White, the Board of Milestone continues
to comprise of John Sanderson, Non-executive Chairman; Brian Chester, part time
Finance Director and Andy Craig, Non-executive Director. The current
arrangements are designed to ensure continuity of management. The Board intends
to review its structure and corporate governance as The Flex continues to
develop.


* ONGOING LOCAL TV BUSINESS *

Milestone continues to operate its ongoing local television division. Milestone
recently joined forces with other interested groups to launch 'United for Local
Television', a new campaign group which is lobbying for local television
channels to be granted guaranteed access to the Freeview platform, rather than
having to bid for terrestrial carriage against other services as is currently
proposed by Ofcom (the UK communications regulator).

Ofcom has recently announced that existing analogue local television operators,
such as Milestone, may be able to vary their licences to provide digital
terrestrial transmissions on a trial basis in the run up to digital switchover.
Whilst awaiting further details, Milestone cautiously welcomes this
announcement. In the meantime, the Company is operating its existing local
television channels in Oxford and Southampton on a skeleton staffing and low
turnover.

It is intended in the coming months to exploit synergies between The Flex and
Milestone's existing television operation with The Flex utilising the Company's
Oxford based production facilities and supplying some new broadcast content.


* MARKET BACKGROUND *

Research published by Ofcom in December 2007 suggests the UK now has a higher 
share of internet advertising spend than any of the eight major countries it 
has surveyed, standing at 14.4 per cent of total advertising. In addition, a 
greater proportion of UK internet users (39 per cent) visit social networking 
sites than in any other key European country surveyed.


* OUTLOOK *

The Board prudently anticipates modest revenues following the beta launch of 
The Flex in the first quarter of 2008. The main sources of revenue in the medium
term are anticipated to be site advertising, sales of audio and video files, 
merchandising and the licensing of content to third party distributors. The 
Board will continuously review the progress of The Flex and to what extent any 
additional fundraising may enhance value for the Company's shareholders by 
enabling a faster roll-out of the new platform.


FOR FURTHER INFORMATION:

Milestone Group PLC
Brian Chester                                                 Tel: [phone]

Arden Partners PLC                                            Tel: [phone]
Richard Day / Adrian Trimmings


* REGULATORY INFORMATION *

This announcement contains certain information required to be disclosed in 
respect of Jamie Bloom and Deborah White's appointments in accordance with 
Rule 17 and Schedule Two paragraph (g) of the AIM Rules.

*Full name*
James Howard Bloom

*Date of birth*
1 March 1950

*Current interest in shares in the Company*
None but 7,746,698 (28.06 per cent) held by Laurence Bloom (the brother of 
James Bloom) through J M Finn Nominees Limited

*Current directorships / partnerships*
Mainline Properties Limited, Varmeer Properties Limited, Millennium 
Merchandising Limited, The Flex (International) Limited

*Past directorships / partnerships (in the previous 5 years)*
Bellhaven Limited, Dunraven Limited, Digiworx Entertainment Limited, Network 
Corporate Holdings PLC, Network Directors Limited

Save as disclosed in this announcement, Jamie Bloom has confirmed that there 
are no other disclosures required pursuant to Schedule Two paragraph (g) of the 
AIM Rules.

*Full name*
Deborah Jane White

*Date of birth*
17 July 1965

*Current interest in shares in the Company*
None

*Current directorships / partnerships*
Silver Planet Life Investment Taxation Solutions Limited, Silver Planet (City of
London) Limited, The Flex (International) Limited

*Past directorships / partnerships (in the previous 5 years)*
Inter-Alliance City Limited

Save as disclosed in this announcement, Deborah White has confirmed that there 
are no other disclosures required pursuant to Schedule Two paragraph (g) of the 
AIM Rules.




                      This information is provided by RNS
            The company news service from the London Stock Exchange