Further re Acquisition

Mercury Group PLC
09 January 2008


                                                                  9 January 2008

                               Mercury Group Plc

                                (the 'Company')


        Further re: Acquisition of Smith Melzack Pepper Angliss Limited


The Company announces that it has entered into a Settlement Agreement with the
vendors of Smith Melzack Pepper Angliss Limited ('SMPA') ('the Vendors'), which
was acquired by the Company on 28 February 2005.


Under the terms of the original sale and purchase agreement, the Vendors were
entitled to receive, under certain circumstances, deferred consideration and
further deferred consideration.


In November 2006, the Company notified the Vendors of certain claims for breach
of warranty relating to PAYE claims ('the PAYE Claim').


The Company and the Vendors have agreed that in settlement of the PAYE Claim and
any other warranty claims whether now or in the future, certain of the
entitlement of the Vendors to the deferred consideration and the further
deferred consideration shall be set-off against the PAYE Claim, and the final
amount of the deferred consideration and further deferred consideration is
£182,000 to be satisfied as follows:


(a) as to 50 per cent. of such sum by the issue and allotment to the Vendors of,
in aggregate, 4,550,000 ordinary shares in the issued share capital of the
Company ('Deferred Consideration Shares'); and


(b) as to the remaining 50 per cent. by the issue of £91,000 in nominal amount
of convertible unsecured loan stock ('Loan Stock').


The Loan Stock is convertible into ordinary shares in the Company at any time up
to the first anniversary of issue at the rate of 50 ordinary shares for every £1
nominal of Loan Stock. If the Loan Stock is not converted by such time, it shall
be repaid on the first anniversary of issue, together with interest accrued. The
Loan Stock will carry interest of 1.5 per cent. over three month LIBOR payable
quarterly in arrears.


The number of Deferred Consideration Shares and the nominal amount of the Loan
Stock shall be increased in equal proportions if and to the extent that the
amount paid by the Company in full and final settlement of the PAYE Claim is
less than £110,560. Any further ordinary shares will be issued at a price of 2p
per share and any Loan Stock will be issued at par.


Ronnie Franks, Stuart Sandler, Clive Orman, Alan Kleinman, Paul Vernon-Smith and
Colin Povey, who are directors of the Company and/or SMPA, comprise the Vendors.
Accordingly, the Settlement Agreement is classified as a related party
transaction under the AIM Rules. The independent directors consider, having
consulted with John East & Partners Limited, that the terms of the transaction
are fair and reasonable insofar as the shareholders of Mercury are concerned.


Application will be made for 4,550,000 ordinary shares to be admitted to trading
on the AIM Market and dealings are expected to commence on 14 January 2008.



Enquiries:


Mercury Group Plc

George Kynoch - Chairman 020 7343 4000



John East & Partners Limited

David Worlidge 020 7628 2200



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