Circ re. Share Buy Back

Lok'n Store Group PLC
13 August 2003


              Lok'nStore Group PLC ('Lok'nStore' or the 'Company')

                     Cancellation of share premium account

            Proposed tender offer of up to 9,265,848 Ordinary Shares

   Proposed approval of waiver of mandatory offer provisions in the City Code



On 30 July 2003 Lok'nStore announced its intention to seek authority from its
shareholders to purchase and cancel ordinary shares in the Company.


In order to create the necessary distributable reserves, the Company proposes to
cancel its share premium account, a process which requires both shareholder
approval and confirmation from the Court. Lok'nStore has today posted a circular
to shareholders, the principal features of which are as follows:


1. Introduction


Lok'nStore intends to seek authority from its shareholders to purchase and
cancel Ordinary Shares with a value of up to £6.0 million. As the Company does
not currently have sufficient distributable reserves to effect a repurchase of
its shares it proposes to create the necessary reserves by cancelling its share
premium account. This requires both Shareholder approval and confirmation by the
Court.

2. Reduction of capital and Tender Offer


In order to return capital to Shareholders, the Board intends to implement a
Tender Offer to purchase Ordinary Shares for a total value of up to £6.0
million, financed through existing cash resources and bank debt.


Further details of the Tender Offer will be set out in a separate document to be
posted to Shareholders as described below.


Cancellation of share premium account


The Company can only purchase its own shares out of distributable profits or the
proceeds of a fresh issue of shares made for the purpose of the purchase. The
Company is not proposing to issue new shares and does not have any distributable
reserves. The cancellation of share premium account will provide the Company
with distributable reserves with which to purchase the Company's own shares.


The cancellation of its share premium account will require the approval by
special resolution of its shareholders in general meeting and the sanction of
the Court.


It is intended that up to £6.0 million of the new special reserve created upon
the cancellation of the share premium account be applied in implementing the
Tender Offer. The amount of the excess would be available for further share
repurchases (subject to the requisite authorities being obtained from
Shareholders and subject to the City Code) or for dividend payments.


Tender Offer


The Tender Offer will be conditional on (i) the passing of the resolutions to be
proposed at the EGM and (ii) confirmation by the Court of the cancellation of
the Company's share premium account and the creation of a new special reserve
becoming effective.


By implementing the return of capital by way of a tender offer, the Directors
believe that this will offer Shareholders the choice of whether or not to
participate, whilst treating all Shareholders equitably. Shareholders may sell
some or all of their Ordinary Shares in return for cash, or they may choose to
retain their Ordinary Shares and, on the assumption that the Tender Offer is
completed, thereby increase the proportion of Ordinary Shares they hold.


A special resolution is therefore being proposed to authorise the Company to
purchase its own Ordinary Shares pursuant to the Tender Offer.


The principal features of the Tender Offer (which will be set out in more detail
in a separate document to be sent to Shareholders shortly after 24 September
2003) are expected to be as follows:


  • Panmure will invite Shareholders to tender Ordinary Shares (subject to the
    maximum total number indicated below) at a tender price. Panmure will
    purchase existing issued Ordinary Shares and then sell such shares at the
    tender price through the facilities of the London Stock Exchange to the
    Company for cancellation. The new special reserve created upon the
    cancellation of the share premium account will provide distributable
    reserves sufficient to implement the purchase of shares by the Company.


  • All Shareholders on the register on a specified date (other than certain
    overseas Shareholders) will be given the opportunity to participate in the
    Tender Offer.


  • The maximum number of Ordinary Shares to be purchased will be 9,265,848.


  • The tender price will fall within minimum and maximum limits to be
    determined by the Board and Panmure.


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


3. City Code on Takeovers and Mergers


Rule 9 of the City Code is designed to prevent the acquisition of control of a
company without a general offer being made to all shareholders. Under Rule 9 of
the City Code, when any person (or group of persons acting in concert) holds not
less than 30 per cent. but not more than 50 per cent. of the voting rights of a
company and acquires additional shares carrying voting rights of that company,
that person or group of persons is normally required by the Panel to make a
general offer for the balance of the issued equity share capital. Under Rule 37
of the City Code, when a company purchases its own voting shares, a resulting
increase in the percentage of voting rights carried by the shareholdings of any
person or group of persons acting in concert will be treated as an acquisition
for the purposes of Rule 9.


Three of the Directors, Andrew Jacobs, Colin Jacobs and Simon Thomas, together
with their concert parties, currently hold or are beneficially interested in
8,716,496 Ordinary Shares, representing 30.6 per cent. of the current issued
share capital of the Company. In accordance with Rule 9 of the City Code, if
their aggregate percentage shareholding were to increase as a result of the
Tender Offer, they could be required to make an offer for the entire issued
share capital of the Company.


The Board is therefore seeking Shareholder approval for a waiver of the
obligations that would otherwise apply to the Major Shareholders under Rule 9 of
the City Code. Andrew Jacobs, Colin Jacobs and Simon Thomas have not taken part
in the decision to seek a waiver from the Panel nor in the recommendation given
in relation to these resolutions.


The Board has accordingly consulted the Panel which has agreed that, subject to
the approval of independent Shareholders on a poll at the EGM, the Panel will
waive any obligation that would otherwise arise under Rule 9 for the Major
Shareholders, as a result of the Tender Offer, to make a general offer for the
Ordinary Shares which they do not already hold. The maximum aggregate
shareholding of the Major Shareholders immediately following the Tender Offer
and exercise of options held by them will not under any circumstances exceed
49.9 per cent. of the Company's issued share capital.


As at 12 August 2003, the interests of the Directors and their immediate
families in the share capital of the Company which (i) have been notified to the
Company pursuant to section 324 or 328 of the Act, or which (ii) are required to
be entered in the register maintained under section 325 of the Act, or which
(iii) are interests of a person connected (within the meaning of section 346 of
the Act) with a Director which would, if the connected person were a Director,
be required to be disclosed under (i) or (ii) above, and the existence of which
is known to or could with reasonable diligence be ascertained by that Director,
were as follows:

                                 Number of Ordinary Shares   Number of Ordinary Shares             Percentage held
                                                Beneficial              Non beneficial
A Jacobs (Notes 1 and 3)                         5,379,000                      60,000                        19.1
S G Thomas (Notes 1 and 3)                       2,500,000                           -                         8.8
C J R Stevens                                       10,000                           -                         0.0
C M Jacobs (Note 2)                                                             12,496                         0.0
R J Holmes                                          95,000                           -                         0.3
M J G Stanton                                       27,000                           -                         0.1

Note 1 Andrew Jacobs, Simon Thomas and Rhys Warren-Thomas (Simon Thomas'
brother) are the three beneficiaries of a pension fund which holds 460,425
Ordinary Shares in Lok'nStore. The above figures do not include the shares held
by such pension fund.

Note 2 Colin Jacobs, Bernard Jacobs and Hazel Jacobs (Andrew Jacobs' and Colin
Jacobs' father and mother respectively), are the three beneficiaries of a
pension fund which holds 289,575 Ordinary Shares in Lok'nStore. The above
figures do not include the shares held by such pension fund.

Note 3 Andrew Jacobs and Simon Thomas have granted a fixed charge over an
aggregate of 3,759,398 Ordinary Shares in favour of The Royal Bank of Scotland
plc securing an overdraft facility not relating to Lok'nStore.


4. Background


Following the announcement on 12 July 2002 that Lok'nStore had raised new equity
funding to accelerate its acquisition of new sites, Lok'nStore announced on 25
April 2003 that it continued to find high quality potential self-storage sites
but that it remained prudent about the commercial property market and expected
that prices would decline further. This has led to protracted negotiations with
vendors.


Whilst the Directors believe that the South and South East of England present
the greatest opportunity for the Group due to the ever-increasing population and
continued pressure on the utilisation of space, they believe that it is in the
Company's best interests to return capital to Shareholders so as to make more
efficient use of the Company's funding structure, whilst also preserving
Lok'nStore's ability to continue to grow organically and by acquiring new sites.


The Directors also believe that certain Shareholders would welcome the
opportunity to tender all or part of their shareholding.


The circular contains a notice of EGM to be held at 10.00 a.m. on 5 September
2003, at which the necessary resolutions will be proposed.


Definitions


The following definitions apply throughout this announcement, unless the context
requires otherwise:

'Act'                                          the Companies Act 1985, as amended
'Board' or 'Directors'                         the board of directors of the Company
'City Code'                                    the City Code on Takeovers and Mergers
'Court'                                        The High Court of Justice in England and Wales
'Extraordinary General Meeting' or 'EGM'       the extraordinary general meeting of the Company convened for 10.00
                                               a.m. on 5 September 2003 (and any adjournment thereof)
'Group'                                        Lok'nStore and its subsidiary undertakings
'Lok'nStore' or the 'Company'                  Lok'nStore Group PLC
'Major Shareholders'                           Andrew Jacobs and Simon Thomas (and their concert parties)
'Ordinary Shares'                              ordinary shares of 1 pence each in the capital of the Company
'Panel'                                        The Panel on Takeovers and Mergers
'Panmure'                                      WestLB Panmure Limited
'Shareholders'                                 holders of Ordinary Shares
'Tender Offer'                                 the proposed invitation to be made to Shareholders by Panmure to
                                               tender Ordinary Shares


Enquiries


Lok'nStore Group PLC 020 8547 2288

Andrew Jacobs

Simon Thomas

Chris Stevens


Panmure 020 7020 4000

Dominic Morley


College Hill 020 7457 2020

James Henderson / Justine Warren




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