Merger Talks

Compass Group PLC
15 May 2000


                                      
                        Granada Group PLC ('Granada')
                     Compass Group PLC ('Compass Group')
                                      
                          Merger talks in progress

Following  press speculation today, the Boards of Granada and  Compass  Group
confirm  that  they  are in discussions regarding a potential  merger  to  be
followed by a demerger within twelve months to create two new groups:

*    a  hospitality  business comprising Compass Group's existing  businesses
     and Granada's hospitality division; and

*    an independent media group based upon Granada's existing media division.

Any  such  merger will be on terms broadly reflecting recent  average  market
capitalisations of the two groups.

Gerry  Robinson  will be chairman of the combined group  until  the  intended
demerger,  following  which  he will retire  as  chairman  but  remain  as  a
consultant  to  the hospitality company and a non-executive director  of  the
media  company.   On  demerger, the hospitality company will  be  chaired  by
Francis Mackay and the media company by Charles Allen.

Granada  is  being  advised by Lazard and Compass Group is being  advised  by
Schroder Salomon Smith Barney.

No  further  announcement will be made by either side until  the  talks  have
reached a conclusion.

Enquiries


Citigate Dewe Rogerson                                  Hudson Sandler
Jonathan Clare                                          Michael Sandler
020 7638 9571                                           020 7796 4133



Lazard  Brothers & Co., Limited ('Lazard'), which is regulated in the  United
Kingdom by The Securities and Futures Authority, is acting for Granada and no
one  else  in  connection  with  the proposed transaction  and  will  not  be
responsible  to  anyone  other  than Granada for  providing  the  protections
afforded to customers of Lazard, or for providing advice in relation  to  the
proposed  transaction.   Salomon  Brothers International  Limited  ('Schroder
Salomon  Smith  Barney'), which is regulated in the  United  Kingdom  by  The
Securities and Futures Authority, is acting for Compass Group and no one else
in  connection  with the proposed transaction and will not be responsible  to
anyone  other  than Compass Group for providing the protections  afforded  to
customers  of  Schroder  Salomon Smith Barney, or  for  providing  advice  in
relation to the proposed transaction.