Disposal

Teather & Greenwood Holdings PLC
15 January 2003

TEATHER & GREENWOOD HOLDINGS PLC ('TEATHER & GREENWOOD')
15 JANUARY 2003

PROPOSED DISPOSAL OF PART OF TEATHER & GREENWOOD INVESTMENT MANAGEMENT

KEY POINTS

-      Teather & Greenwood Holdings plc, a fully listed independent stockbroker,
announces the proposed disposal to Prudential-Bache Limited ('PBL'), a
subsidiary of Prudential Financial, Inc. (USA), of part of Teather & Greenwood
Investment Management ('TGIM') for an aggregate consideration of up to
£3,650,000.



-     TGIM, the investment management division of the Teather & Greenwood group,
provides investment advisory and stockbroking services to private clients.



-     That part of TGIM proposed to be sold (the 'Transferring Part') consists
of that part of the business carried on by 13 employees (the 'Transferring
Employees') (out of a total of 36 within TGIM as at 31 December 2002).  For the
12 month period to 30 April 2002 revenues relating to the Transferring Part were
approximately £3.9 million, representing approximately 11.4 per cent of the
revenues of Teather & Greenwood for that period.



-      Following completion of the disposal Teather & Greenwood will continue to
provide individual and IFA clients with a tax efficient investment service;
including an EIS portfolio service, film funds and EIS companies, AIM and VCT
funds, open-ended investment companies, management for PEPs and ISAs, on-line
trading and client trading (including derivative products).



-     Ken Ford, Chief Executive Officer of Teather & Greenwood, said:



'TGIM operates in an increasingly competitive market following stock market
falls.  The disposal provides Teather & Greenwood with cash, firstly, to reduce
borrowings and, secondly, to invest in other areas of the Teather & Greenwood
group which we believe could produce superior returns in the future.  In
particular, we have given strategic priority to the business relating to smaller
companies (comprised of agency sales, research, corporate finance and market
making), closed-end funds, fixed income and convertible securities, derivatives
products (and, in particular, contracts for difference) and large and mid cap
agency sales.'



Enquiries:



Teather & Greenwood Holdings plc      Ken Ford, Chief Executive Officer
020 7426 9000                         Nick Stagg, Chief Operating Officer

Hawkpoint Partners Limited            Hugh Elwes
020 7665 4500                         Mark Olivier

College Hill                          Richard Pearson
020 7457 2020



INTRODUCTION



Teather & Greenwood announces that it has today conditionally agreed through
Teather & Greenwood Limited ('TGL') to dispose ('the Disposal') of the
Transferring Part to PBL for up to £3.65 million.  The Disposal is conditional,
inter alia, upon the approval of shareholders (because of the size of the
Disposal relative to Teather & Greenwood) as well as regulatory clearances.  A
circular to shareholders ('Circular') will be posted shortly convening an
extraordinary general meeting to seek shareholder approval.



Prudential Financial, Inc. and PBL are not affiliated with Prudential plc (UK).



Teather & Greenwood has been advised on the Disposal by Hawkpoint Partners
Limited and, in respect of the recommendation to shareholders by the directors
of Teather & Greenwood (the 'Directors'), by Smith & Williamson Corporate
Finance Limited.



Reasons for the Disposal and Information on the Transferring Part



The principal activities of TGIM are the provision of execution-only
stockbroking services, investment advisory services and discretionary investment
management services to private clients, charities, pension funds, trustees,
local authorities and other government bodies.  In addition, TGIM operates three
open-ended investment companies, a specialist tax-efficient advisory service to
clients and an on-line dealing service.  The Transferring Part forms part of
TGIM, the investment management division of TGL.



Following the Disposal and the recent restructuring of loss making elements of
TGIM, the Directors believe the cost base of the continuing business within TGIM
will be in line with revenues.  The continuing business within TGIM consists of
activities carried on by nine individuals who will be integrated into the rest
of the Teather & Greenwood Group and who will continue to provide individual and
IFA clients with an EIS portfolio, film financing partnerships, AIM and VCT
funds advice, three open-ended investment companies, management for PEPs and
ISAs, on-line trading and client trading (including access to derivative
products).



As can be seen from the table below, the revenues of the Transferring Part in
the year to 30 April 2002 were £3,931,000 which represented 11.4 per cent. of
the revenues of the Teather & Greenwood Group in that period.  The Transferring
Part operates in an increasingly competitive market following stock market
falls.  Accordingly, the Directors resolved to sell the Transferring Part in
order, firstly, to realise cash to decrease borrowings and, secondly, to invest
in other business areas of the Teather & Greenwood Group which they believe
could produce superior returns in the future.  In particular, the Directors have
given strategic priority to the business relating to smaller companies
(comprised of agency sales, research, corporate finance, sales trading, dealing
and market making), closed end funds, fixed income and convertible securities,
derivative products (in particular, contracts for difference) and large and mid
cap agency sales.



The Transferring Employees number 13 out of a total of 36 within TGIM as at 31
December 2002.  The Transferring Employees provide the majority of the
discretionary, managed advisory and advisory services of TGIM.  The principal
assets which are the subject of the Disposal constitute certain client
contracts, the records that relate to these clients, certain additional assets
and goodwill associated with the Transferring Part and the Transferring
Employees.  TGL will be writing to each of the clients of the Transferring Part
in due course.





The Transferring Part is a distinguishable part of TGIM's business but has never
been managed or accounted for as a business unit.  As such, no financial
information on the Transferring Part as a business is available including
attributable costs.  Therefore, while it has been possible to extract revenues
generated by the Transferring Part, it is not possible to calculate the profits
of the Transferring Part.  Illustrative operational information on the
Transferring Part is set out in the table below for each of the three previous
financial years of TGL ended 30 April 2002, 2001 and 2000.




                                                                Years ended 30 April
                                                                         2002         2001            2000
                                           Notes

Transferring Employees                              (i)                    13            9               7

Transferring Client Accounts                       (ii)                 4,164        3,941           3,279

Revenues generated by Transferring Client                     £'000     3,931        3,691           3,695
Accounts

Assets under management ('AUM')                   (iii)         £'m       679          741             677

Employment costs of                                (iv)       £'000     1,293        1,128             598

Transferring Employees




Notes:



(i)   the number of the Transferring Employees who were employed by TGL at the
specified dates.



(ii)  the number of client accounts of the Transferring Part at the specified
dates.



(iii) the value of AUM is the value of the Transferring Client Accounts at the
specified dates.



(iv)  the aggregate costs of salary, employer's national insurance
contributions, signing-on bonuses (but excluding discretionary bonuses) and
benefits of the Transferring Employees for that part of the specified period for
which they were employed by TGIM.



Principal terms and conditions of the Disposal



The consideration (before expenses) for the Disposal is up to a maximum of
£3,650,000 payable as to:



(i)            £2,000,000 on completion, subject to the AUM at completion being
not less than 75 per cent. of the value of AUM at 30 November 2002 and subject
to possible retentions by PBL.  In the event that the value of AUM are less than
75 per cent. of the value of AUM at 30 November 2002 the amount payable on
completion will be reduced;



(ii)        £250,000 to be held in escrow from completion and payable four
months from completion, provided that not less than 75 per cent. of a certain
pool of clients has transferred to PBL, failing which no payment would be made
to Teather & Greenwood but the amount referred to in (iv) below would be
increased to £900,000;



(iii)    a further £750,000 to be held in escrow from completion and payable
four months from completion, subject to possible retentions by PBL; and



(iv)        up to an additional £650,000 (or £900,000 - see (ii) above) payable
after the 12 month anniversary of completion, depending upon minimum levels of
revenues generated from the client accounts which have transferred to PBL being
met, subject to possible retentions by PBL.



The Sale Agreement excludes the debtors and creditors of the Transferring Part
as at completion, which will be collected or paid by the Teather & Greenwood
Group.  The Sale Agreement contains certain warranties and indemnities given by
TGL to PBL and its affiliates.



TGL is to pay a break fee of £200,000 (exclusive of VAT) to PBL in the event
that both (i) the Directors withdraw or adversely alter their recommendation to
shareholders of the Disposal and (ii) shareholders do not approve the Disposal
at the extraordinary general meeting.



It is a term of the Sale Agreement that TGL and PBL enter into the Transition
Services Agreement under which TGL will provide dealing and back office support
to PBL for a minimum period of three months following Completion for £270,000 in
total for the first three months and thereafter for a monthly fee of £90,000 and
will assist with data migration for a further £40,000.



Further details of each of the Sale Agreement and Transition Services Agreement
will be set out in the Circular.



The Disposal is conditional, inter alia, upon Teather & Greenwood obtaining the
approval of its shareholders.  The Disposal is also conditional upon certain
regulatory clearances.  As such, completion is expected to take place not later
than 31 May 2003.



FINANCIAL EFFECTS OF THE DISPOSAL AND USE OF PROCEEDS



The net initial proceeds of the Disposal (after expenses) receivable on
Completion are expected to be £1,090,000 and will be used to repay existing
borrowings and to invest in other business areas of the Teather & Greenwood
Group.  The net deferred and contingent elements of the consideration of up to
£1,650,000 are also expected to be used similarly in due course.



Due to their nature, the assets being transferred under the Disposal had
negligible book value in Teather & Greenwood's consolidated accounts as at 31
October 2002.



Hawkpoint Partners Limited, which is regulated in the United Kingdom by The
Financial Services Authority, is acting exclusively for Teather & Greenwood and
no one else and will not be responsible to anyone other than Teather & Greenwood
for providing the protections afforded to clients of Hawkpoint Partners Limited
or for giving advice in relation to the contents of this announcement or any
transaction or arrangement referred to herein.



END
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