Response to Tender Offer

LPA Group PLC
09 November 2006


Response to Tender Offer
9 November 2006


LPA Group Plc has today written to shareholders with regard to the Tender Offer.

'Dear Shareholder,

THE BOARD, WHICH HAS BEEN ADVISED BY TEATHER & GREENWOOD, UNANIMOUSLY RECOMMENDS
THAT YOU REJECT THE TENDER OFFER

Introduction

In my letter to Shareholders of 31 October 2006, I advised you that on Thursday
26 October 2006 the Board received notice of the Tender Offer from Andrew
Perloff for up to 3,095,968 Ordinary Shares at 25 pence per Ordinary Share. If
the Tender Offer is accepted by the maximum number of Shareholders, Andrew
Perloff will in aggregate control 29.9 per cent. of the Ordinary Shares, the
maximum shareholding allowable under the City Code without making an offer for
the whole of the issued share capital of the Company.

The Board believes that the Tender Offer is an opportunistic attempt to acquire
a large shareholding in the Company at too low a price. The Directors believe
the Tender Offer substantially undervalues the Group's net assets as well as its
trading prospects.

Net assets

Shareholders should be aware that in the interim statement published on 22 June
2006, the Group's unaudited balance sheet as at 31 March 2006 showed net assets
of £6.02 million, equating to 55.2 pence per Ordinary Share in issue at that
date (1).

The Group's net assets were made up of tangible assets (£2.74 million, equating
to 25.2 pence per Ordinary Share), goodwill (£1.28 million, equating to 11.7
pence per Ordinary Share) and a pension fund surplus (£2.00 million, equating to
18.3 pence per Ordinary Share).

Property valuation

The Board has commissioned an independent valuation of the Group's freehold
properties as at 30 September 2006 which shows an increase in net book value, on
an existing use basis, of £1.05 million, equivalent to an additional 9.6 pence
per Ordinary Share. This valuation will be incorporated into the Group's balance
sheet as at 30 September 2006 (2).

This independent valuation does not include any potential uplift arising from
the redevelopment of the Saffron Walden site for residential use. The Directors'
believe this uplift could be substantial. The Board intends to maximise this
value over the next three years by continuing to migrate current activities away
from the site and resolve site issues to enable it to be redeveloped.

Trading update

The Group's financial year closed on 30 September and I undertook in my letter
to Shareholders of 31 October 2006 to provide an update on the Group's current
trading and to provide further details of the Group's forward order book.

Having suffered a loss in the first half of the last financial year, the Group
returned to trading profitability in the second half, but expects to report a
small loss for the year as a whole.

The current year has started strongly with sales and orders substantially ahead
of the corresponding period last year. As previously reported the Group is
highly operationally geared and therefore a modest increase in sales can have a
significant effect on profits. The Group continues to have a number of exciting
sales opportunities especially for its LED lighting technology. The order book
currently stands in excess of £9 million, its highest level since 2001.

The Group has made a strong recovery from the extremely difficult situation
which arose when Alstom, the Group's largest customer at the time, ceased
manufacture of new trains in the UK in 2002. The Group has enjoyed orders in
excess of sales for four successive years.  The Directors believe the Group can
look forward to progress this year and strong growth over the next three years.

The Group's strategy is to concentrate on the development of proprietary
products using its know-how and reduce its dependence on rail vehicle projects.
The Group is introducing a number of new products, to both existing and
potential customers, including LED lighting and aircraft and infrastructure
connectors.

Recommendation

The Board believes that the Tender Offer is an opportunistic attempt to acquire
a large shareholding in the Company at too low a price. The Directors believe
the Tender Offer substantially undervalues the Group's net assets as well as its
trading prospects.

The Board, which has been advised by Teather & Greenwood, unanimously recommends
that you do not accept the Tender Offer. In providing its advice to the Board,
Teather & Greenwood has taken into account the commercial assessments of the
Directors.

Accordingly, the Directors unanimously recommend that all Shareholders reject
the Tender Offer, as they have done in respect of their entire holdings of
1,169,540 Ordinary Shares (representing approximately 10.7 per cent. of the
issued share capital of the Company) and strongly urges you to do the same.



                                Yours sincerely,

                                 Michael Rusch
                                    Chairman
 

Enquiries:

Peter Pollock      Chief Executive                          01799 512844
Stephen Brett      Finance Director                         01799 512860

James Glancy       Teather & Greenwood Limited              020 7426 9000
Robert Naylor      Teather & Greenwood Limited              020 7426 9000

Gareth David       College Hill                             020 7457 2020



Notes
     
(1)  As at the date of this document the issued share capital of the Company was 
     10,953,229 Ordinary Shares. The issued share capital of the Company as at 
     31 March 2006 was 10,903,229 Ordinary Shares which has been used in the
     calculations in the paragraph titled 'Net assets' above.

(2)  The freehold interests in the property holdings of LPA were valued as at 30 
     September 2006 by N S Booton MA MRICS of King Sturge LLP, acting as an
     External Valuer. This is the first time that either King Sturge LLP or N S
     Booton MA MRICS have valued these properties for the company.  The 
     valuation was carried out in accordance with the requirements of the 
     Appraisal and Valuation Standards published by the Royal Institution of 
     Chartered Surveyors.  The valuation was prepared in accordance with the 
     requirements of Financial Reporting Standard 15 (Tangible Fixed Assets).

     The three properties valued are all held freehold and valued using the
     Existing Use Value basis of valuation, assuming that the property would be 
     sold as part of the business for continued use.

     The Valuer's opinion of Existing Use Value was primarily derived using
     comparable recent market transactions on arms length terms.



Definitions

'City Code'                            the City Code on Takeovers and Mergers

'Directors' or the 'Board'             the directors of LPA as set our at the 
                                       head of this letter

'LED'                                  light emitting diode

'LPA', the Company' or the 'Group'     LPA Group PLC

'Ordinary Shares'                      issued ordinary shares of 10 pence each 
                                       in the capital of the Company

'Shareholders'                         holders of Ordinary Shares

'Teather & Greenwood'                  Teather & Greenwood Limited

'Tender offer'                         the tender offer by John East & Partners 
                                       on behalf of Andrew Perloff for up to 
                                       3,095,968 Ordinary Shares, which was 
                                       posted to Shareholders on 26 October 2006

'John East & Partners'                 John East & Partners Limited





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