Merger Update

Elderstreet VCT PLC
19 January 2007


Not for release, distribution or publication, in whole or in part, in or into
the United States, Canada, Australia or Japan

19 January 2007

                                     Merger

                         by way of recommended offer by

              Elderstreet VCT plc ('Elderstreet' or the 'Company')

                                      for

        Elderstreet Millennium Venture Capital Trust plc ('Millennium')


                    OFFER UNCONDITIONAL SUBJECT TO ADMISSION

Elderstreet announces that all of the conditions to the Offer (other than the
condition as to Admission of the New Elderstreet Shares) have now been satisfied
or waived and that the Offer is unconditional in all respects save for Admission
of the New Elderstreet Shares. It is expected that Admission will become 
effective on 22 January 2007.

As at 11.00 am today, valid acceptances had been received in respect of
12,286,424 Millennium Shares (representing 76.1 per cent. of Millennium's issued
ordinary share capital). The Offer is now unconditional as to acceptances and
will remain open for acceptance until further notice.

Prior to making the Offer, Elderstreet had received irrevocable undertakings to
accept the Offer from Millennium Shareholders in respect of 278,000 Millennium
Shares (representing approximately 1.7 per cent. of Millennium's issued ordinary
share capital). Valid acceptances have been received in respect of 238,000 of
such shares (representing approximately 1.5 per cent. of Millennium's issued
ordinary share capital) and these acceptances have been included in the
acceptances referred to above (acceptances have not yet been received in respect
of 40,000 Millennium Shares (representing approximately 0.2 per cent. of
Millennium's issued ordinary share capital) which are subject to an irrevocable
undertaking to accept the Offer from Michael Stoddart). Prior to the Offer,
89,000 Millennium Shares (representing approximately 0.8 per cent. of
Millennium's issued ordinary share capital) were held by a nominee company owned
by Smith & Williamson Holdings Limited on behalf of discretionary fund
management clients: a valid acceptance has been received in respect of all of
such shares and this acceptance has been included in the acceptances referred to
above.

Save as set out herein, neither Elderstreet nor any person acting in concert
with Elderstreet held any Millennium Shares (or rights over Millennium Shares)
prior to the commencement of the offer period on 29 November 2006 and neither
Elderstreet nor, so far as Elderstreet is aware, any person acting in concert
with Elderstreet has acquired or agreed to acquire any Millennium Shares since
that date.

Enquiries:

Smith & Williamson
Tel: [phone]
Dr A Basirov
David Jones


Terms used in this announcement shall have the same meaning as those in the
offer document and prospectus equivalent published by Elderstreet VCT plc on 1
December 2006.

This announcement does not constitute an offer or an invitation to purchase or
subscribe for any securities. The Offer is being made solely by the Offer
Document and the Form of Acceptance, which contain the full terms and conditions
of the Offer, including details of how the Offer may be accepted.

Smith & Williamson Corporate Finance Limited, which is authorised and regulated
in the United Kingdom by the Financial Services Authority, is acting exclusively
for Elderstreet VCT plc and no one else in connection with the Offer and will
not be responsible to anyone other than Elderstreet VCT plc for providing the
protections afforded to customers of Smith & Williamson Corporate Finance
Limited nor for providing advice in relation to the Offer or any other matter
referred to herein.

The Offer is not being made, directly or indirectly, in or into the United
States, Canada, Australia or Japan and the Offer Document and the Form of
Acceptance are not being, and should not be, mailed or otherwise distributed or
sent in or into the United States, Canada, Australia or Japan or any other
jurisdiction if, in the latter case, to do so would constitute a violation of
the relevant laws in such jurisdiction.

The New Elderstreet Shares have not been, and will not be, registered under the
United States Securities Act of 1933 (as amended) or under any relevant
securities laws of any state or jurisdiction of the United States, Canada,
Australia or Japan and no regulatory clearances in respect of the New
Elderstreet Shares have been, or will be, applied for in any jurisdiction.
Accordingly, unless an exemption under the United States Securities Act of 1933
(as amended) or other relevant securities laws is applicable, the New
Elderstreet Shares will not be, and may not be, offered, sold, resold, delivered
or distributed, directly or indirectly, in or into the United States, Canada,
Australia or Japan or to, or for the account or benefit of, any United States
person or person resident in Canada, Australia or Japan.



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