Acquisition etc

CLOSE BROTHERS GROUP PLC
20 September 1999



Close Brothers Announces Acquisition of Warrior Group Limited
Continuing Partnership with the NAAFI


*    Close Brothers Group plc has acquired a majority holding in Warrior, a
specialist financial service company providing loans and other financial
facilities to members of the British Armed Forces, for £20.5m - £15.25m to be
paid in cash to the vendors and £5.25m subscribed in cash for new shares in
Warrior.

*    The acquisition of Warrior will complement and significantly extend the
franchise of Close Brothers' existing business in this area, Armed Services
Finance, part of Close Consumer Finance Limited.

*    Warrior acquired the financial services arm of the NAAFI in 1997.  Under
a trading agreement with and license from the NAAFI, Warrior is uniquely
placed to access Service personnel from within military bases.

*    Close Brothers believes that there are significant opportunities for
growth in the provision of financial services to the British Armed Forces,
through developing the product range and accessing a wider customer base.

Commenting on the transaction, Rod Kent, managing director of Close Brothers,
said:

'We are delighted to be able to combine the existing activities of ASF with
those of Warrior to create a strong, specialist business providing a
comprehensive range of financial services products to British Service
personnel. We look forward to developing this business further in conjunction
with the NAAFI.'

Geoffrey Dart, chief executive of the NAAFI, said:

'Our new partnership with Close Brothers continues our policy of working in
conjunction with first class commercial organisations to serve the needs of
the British Armed Forces and their families throughout the world.  As part of
the banking division of Close Brothers, Warrior will have access to the
resources it needs to provide a high quality service to our customers.'

Further details on the transaction and a background note on Close Brothers and
NAAFI are attached.


For further information, contact:

Close Brothers Group plc
Rod Kent                0171-426-4000
Peter Winkworth

NAAFI
Geoffrey Dart           01980-627300

Brunswick
Katie Hall              0171 404 5959


Notes to Editors

1. The NAAFI

The NAAFI (the Navy, Army and Air Force Institutes), established in 1921, is
HM forces official trading organisation.

Its core activity is the provision of retail and leisure facilities to the
British Armed Forces at home, at permanent bases abroad and to those on
operational deployments in other parts of the world.  Those range from fast
food facilities, convenience stores and sports bars to amusement arcades and
community pubs.  In addition, the NAAFI provides financial services overseas.
It also won in 1998 the contract for support services to the British Army in
Germany.

The NAAFI works in partnership with leading businesses in many of these areas
to ensure that its customers benefit from excellent facilities and first class
services and products.

2. Warrior

Warrior was incorporated in 1997 with finance provided by HSBC Private Equity,
the NAAFI and Warrior management.  Under a trading agreement with and licence
from the NAAFI, Warrior acquired the long established business of the NAAFI's
financial services division within the UK and also provided a wide range of
Warrior products and services to the NAAFI's financial services businesses
overseas, particularly in Germany and Cyprus.

The principal services offered by Warrior are the provision of personal loans,
the operation of the NAAFI charge card, assistance with the procurement of
cars for Service personnel, a range of insurance products and other banking
and financial services.

3. Close Brothers

Close Brothers Group plc is an independent merchant banking group founded in
the City of London in 1878.  It is listed on the London Stock Exchange and,
with a market capitalisation of £1,058 million, is within the top 200 largest
quoted companies in the UK.  Last year Close Brothers Group plc reported
pre-tax profits of £69.6 million, which represented its 23rd year of unbroken
increase in profits.

Close Brothers' main activities comprise six related specialist merchant
banking services - merchant banking, investment management, credit management,
market-making, asset finance and insurance premium financing.

CLOSE BROTHERS GROUP PLC

ACQUISITION OF WARRIOR GROUP LIMITED ('WARRIOR')
CONTINUED PARTNERING WITH THE NAAFI

Close Brothers Group plc ('Close Brothers') announces that it has acquired a
majority shareholding in Warrior, a specialist financial services company
providing loans and other financial facilities to members of the British Armed
Forces.  Close Brothers is already represented in this market through the
operations of its subsidiary, Armed Services Finance Limited ('ASF'), which
provides hire purchase loans to Service personnel buying cars, mainly in
Germany.

Warrior was incorporated in 1997 with finance provided by HSBC Private Equity,
the NAAFI (the Navy, Army and Air Force Institutes) and Warrior management.
Under a trading agreement with, and licence from the NAAFI, Warrior acquired
the long established business of the NAAFI's financial services division
within the UK and also provided a wide range of Warrior products and services
to the NAAFI's financial services businesses overseas, particularly in Germany
and Cyprus.

The principal services provided by Warrior are the provision of personal loans
(often for the purchase of cars), the operation of the NAAFI charge card,
assistance with the procurement of cars for Service personnel based in
Germany, a comprehensive range of customised insurance products delivered in
partnership with Norwich Union and sundry other banking and financial services
provided in conjunction with appropriate counterparties.  At 1 May 1999,
Warrior had outstanding loans of some £60 million to over 40,000 Service
personnel and ex-service personnel and other personnel associated with the
British Armed Forces. In the financial year ended on that date, Warrior earned
an operating profit of £1.8 million before interest on shareholder loans. 
Shareholders' funds at 1 May 1999 were £8.5 million inclusive of shareholders'
unsecured loan notes.

Under an agreement between Close Brothers and the shareholders of Warrior,
Close Brothers has acquired all the ordinary shares, preference shares and
loan notes held by HSBC Private Equity, substantially all the ordinary shares
held by the management and a portion of the preference shares and loan notes
held by the NAAFI.  The total consideration for these amounts to £15.25
million paid in cash at completion.  Close Brothers has also subscribed a
further £5.25 million for new shares in Warrior and has transferred ASF into
Warrior in exchange for new ordinary shares.  Following the conversion of all
preference shares and loan notes to new ordinary shares by both Close Brothers
and the NAAFI, Close Brothers now owns 80% of Warrior as enlarged by ASF and
the NAAFI owns 20%.

In addition to its cash outlay of £20.5 million for the existing and new
securities of Warrior, Close Brothers has procured the repayment to the NAAFI
of a vendor loan of £4.0 million outstanding since the setting up of Warrior
plus accrued interest thereon and has refinanced some £47.5 million of bank
facilities.  The acquisition and refinancing has been funded by Close Brothers
from part of the proceeds of its recent £45 million share placing in July and
through  its own banking facilities.

Warrior will form a major component of Close Brothers' consumer finance
operations under the umbrella of Close Consumer Finance Limited, Close
Brothers' existing HP car financing subsidiary.  Alignment of the accounting
policies of Warrior with those of the group will reduce the enlarged Warrior's
net assets by some £6.2 million to approximately £10 million; the combined
loan books of Warrior and ASF will amount to over £70 million.

Commenting on the transaction, Rod Kent, managing director of Close Brothers,
said:

'We are delighted to be able to combine the existing activities of ASF with
those of Warrior to create a strong, specialist business providing a
comprehensive range of financial services products to British Service
personnel. We look forward to developing this business further in conjunction
with the NAAFI.'

Geoffrey Dart, chief executive of the NAAFI, said:

'Our new partnership with Close Brothers continues our policy of working in
conjunction with first class commercial organisations to serve the needs of
the British Armed Forces and their families throughout the world.  As part of
the banking division of Close Brothers, Warrior will have access to the
resources it needs to provide a high quality service to our customers.'