Offer Update and new equity

Falkland Islands Holdings PLC
07 January 2005



                          Falkland Islands Holdings plc

                             Recommended Offer for
                    The Portsmouth Harbour Ferry Company PLC

                  Full Cash and Part Cash Alternatives closed

For immediate release                                           7 January 2005

The Offer by Dawnay, Day Corporate Finance Limited on behalf of Falkland Islands
Holdings plc ('FIH') for the whole of the issued share capital of The Portsmouth
Harbour Ferry Company PLC ('PHFC') provided three alternative forms of
consideration:

   •The Share Offer, which comprises 7 New FIH Shares for every PHFC Share,
    remains open for acceptance until further notice;

   •The Part Cash Alternative, which closed at 1pm yesterday; and

   •The Full Cash Alternative, which also closed at 1pm yesterday.

Prior to the announcement of the Offer, FIH held 61,149 PHFC Shares (26.59% of
its issued share capital). Since the announcement of the Offer, FIH has
purchased 74,345 PHFC Shares (32.32% of its issued share capital).

As at 1.00pm on 6 January 2005 valid acceptances of the Offer had been received
(and not withdrawn) in respect of 76,905 PHFC Shares (33.43% of PHFC's issued
share capital) as follows:

    Share Offer              29,717 (12.92%)

    Part Cash Alternative     8,748  (3.80%)

    Full Cash Alternative    38,440 (16.71%)

FIH now holds 212,399 PHFC Shares representing 92.34% of its issued share
capital.

In addition to the above, valid acceptances and elections in respect of 2,293
PHFC Shares were received prior to 1pm yesterday, which lacked certain
supporting documents (e.g. a power of attorney, grant of probate or share
certificate). No New FIH Shares will be issued nor will any other consideration
be paid to such accepting PHFC Shareholders until the relevant supporting
documents have been received.

Application has been made to The London Stock Exchange for the admission of
56,917 New FIH Shares, which are being issued to PHFC Shareholders who accepted
the Share Offer, to trading on AIM and dealings are expected to commence in New
FIH Shares on 12 January 2005. Following the issue of the aforementioned shares
FIH has 8,333,861 shares in issue.

As stated in the Offer Document, FIH intends to apply the provisions of Sections
428-430F (inclusive) of the Companies Act 1985 ('the Act') to acquire
compulsorily any remaining PHFC Shares if FIH acquires 90 per cent. or more of
the PHFC Shares to which the Offer relates. In those circumstances any remaining
PHFC Shareholders will be offered the choice of consideration equivalent to the
Share Offer, the Part Cash Alternative and the Full Cash Alternative as required
by Section 430 of the Act.



Enquiries

Falkland Islands Holdings plc

David Hudd, Chairman            Tel: [phone]

Dawnay, Day Corporate Finance Ltd

David Floyd, Director           Tel: [phone]

College Hill Associates Ltd

Ben Brewerton                   Tel: [phone]


The issue of this announcement has been approved by the board of FIH. The
Directors of FIH are the persons responsible for the information contained in
this announcement. To the best of their knowledge and belief (having taken all
reasonable care to ensure that such is the case) the information for which they
are responsible contained in this announcement is in accordance with the facts
and does not omit anything likely to affect the import of such information. Each
of the directors of FIH accepts responsibility accordingly.

This announcement has been approved for the purposes of section 21 of the
Financial Services and Markets Act 2000 by Dawnay, Day Corporate Finance Limited
('Dawnay Day'). Dawnay Day, which is regulated by the Financial Services
Authority, is acting for FIH and no one else and will not be responsible to
anyone other than FIH for providing the protections afforded to customers of
Dawnay Day or for providing advice in relation to the Offer.

This announcement is not for distribution in the United States.



                      This information is provided by RNS
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