Tender Offer, etc.

Investment Company PLC
20 March 2000


PART 1

THE INVESTMENT COMPANY PLC  ('the Company') is making a tender offer ('the
Tender Offer') to purchase up to 5,135,079 of its Participating Preference
Shares at the fixed price of 100p per share ex-dividend. Shareholders gave
approval for the making of such an offer at the Annual General Meeting held
last July. The number of shares for which the Tender Offer is made is limited
by the amount of the Company's distributable reserves at 31 March 1999. New
Centurion Trust Limited, which is the Company's ultimate holding company, has
indicated its present intention to accept the offer in respect of the
3,857,144 Participating Preference Shares it holds. At the close of business
on Friday 17 March the middle market price of the Participating Preference
Shares was 115.75p cum the half-yearly dividend of 3.5p payable on 1 April.
The offer is made to shareholders on the register on 17 March and remains open
until 10 April 2000.


PART 2

In a circular being posted to holders of the Participating Preference Shares
(and, for information only, to holders of Ordinary Shares), Mr Paul Simms,
Chairman of The Investment Company plc, states:

'By special resolution passed on 19th August 1996, as part of your Company's  
reorganisation of its share capital, 12,700,000 Participating Preference
Shares of 50p each ('Participating Preference Shares') were created in the
Company of which 11,050,407 were issued. By virtue of the rights attaching to
the Participating Preference Shares under the Articles of Association of the
Company, the holders of the Participating Preference Shares are entitled to an
increased return on their shares depending upon the increase in the ordinary
share dividend. The fixed net cash cumulative dividend on the Participating
Preference Shares was set at 7p per share and such fixed dividend falls to be
increased by 25% of any dividend paid on each Ordinary Share of the Company in
excess of 2p net per Ordinary Share, subject to a maximum of 3p net per each
Participating Preference Share in respect of any financial year of the
Company.  In the financial year 1998/99 the total dividend payable on
Participating Preference Shares was 7.625p per share and in the current year
the amount payable has increased to 7.875p. As noted in the Unaudited Interim
Report sent to you last November, in consequence of the increased interim
ordinary dividend (and assuming no change in the final ordinary dividend) a
further 0.125p per share will become payable in respect of  the Participating
Preference Shares on 1st October 2000, making a total annual payment in the
year ending 31st March 2001 of 8.0p.  

150,000 of the Participating Preference Shares were purchased by the Company
at 97.75p ex-dividend for cancellation in September 1997. No further purchases
have since been made by the Company and as at this time there remain10,900,407
allotted, issued and fully paid up Participating Preference Shares. The total
of dividends payable on the Participating Preference Shares in  the year ended
31 March 1999 was £831,156 which will increase to £858,407 in the current year
and (on the basis stated in the Unaudited Interim Report and on the assumption
that no Participating Preference Shares are purchased for cancellation under
this Tender Offer or otherwise) will increase to £872,032 in the year ending
31st March 2001  . 

Assuming an annual dividend payment of 8.0p in the year ending 31st March
2001, if holders of Participating Preference Shares to the maximum of
5,135,079 shares, as described below, accept this Tender Offer, the effect on
the Company will be to reduce the cost to the Company of paying dividends in
respect of the Participating Preference Shares in that and subsequent years by
£410,806 per annum. Acceptance of this Tender Offer by shareholders of
Participating Preference Shares will therefore give the Company greater scope
for increasing the dividends payable on Ordinary Shares.

As I stated in last year's Annual Report, the Company has substantial liquid
balances and the area of the market in which it has specialised for many years
has shrunk dramatically. In consequence,  this Tender Offer is being made with
the purpose of using  the Company's cash to reduce the outstanding capital.
The amount which can be applied for this purpose is however limited to the
amount of the Company's distributable reserves at 31st March 1999.

By a resolution passed as special business at the Annual General Meeting of
the Company on 30th July 1999, the Board was empowered to make this Tender
Offer to all holders of Participating Preference Shares such power to expire
on the conclusion of the Annual General Meeting of the Company to be held in
2000. The Tender Offer is an offer to purchase all the Participating
Preference Shares of 50p each up to a maximum of 5,135,079 shares at 100p per
share ('the Tender Offer Price') 'ex' the half-yearly preference dividend
payment of 3.5p due on 1st April next .  The Tender Offer Price will be paid
on or before Tuesday, 25th April 2000   to all such holders who accept the
Tender Offer, subject to scaling down of acceptances if the maximum is
exceeded.'

'The bid and offer market price of the Participating Preference Shares
appearing in the Daily Official List of the London Stock Exchange of Friday,
17th March 2000 (being the most recent practicable date prior to posting of
this Circular) is 112.75p to 118.75p giving a middle price of 115.75p (these
prices being 'cum' the 3.5p dividend payable on 1st April). The range of the
middle market price over the last 12 months has been between a low of 115.75p
and a high of 121.75p. 

The Directors make no recommendation as to acceptance of this tender Offer and
holders of Participating Preference Shares should take their own advice as to
whether or not, considering their individual circumstances, it is appropriate
for them to accept.

The Directors do not intend to accept this Tender Offer in respect of their
personal holdings. However, New Centurion Trust Limited, which is the
Company's ultimate holding company and in which I hold a non-beneficial share
interest and Miss Joan Webb holds a non-beneficial and a beneficial share
interest and of which we are both directors, has indicated to your Board its
present intention to accept this Tender Offer in respect of the 3,857,144
Participating Preference Shares held by it.'