Proposed Aquistion

Melrose PLC
21 April 2005


The following replaces the Acquisition announcement released today at 07:29 
under RNS number 3346L. The announcement has been reformatted, and reproduced 
in full below.



                      Acquisitions, Placing and Open Offer

Melrose PLC
21 April 2005

Not for release, publication or distribution, in whole or in part, in, into or
from the United States, Canada, Japan, Australia or any other jurisdiction where
it would be unlawful to do so.

For immediate release:

                                  Melrose PLC

Proposed Acquisitions of the Dynacast Group and the McKechnie Group, Placing,
Open Offer and Extraordinary General Meeting

Summary:

• The Melrose Board is pleased to announce that the Company has today
conditionally agreed to acquire the Dynacast Group and the McKechnie Group
from Cinven and others.

• The businesses will be acquired for an enterprise value of £429
million. The aggregate consideration is to be satisfied by the issue of
approximately 42 million Consideration Shares to certain of the Vendors
with the balance to be satisfied in cash.

• Placing, fully underwritten by Investec, to raise approximately
£200 million (before expenses) to partly finance the cash
consideration payable in respect of the Acquisitions.

• Open Offer to raise up to approximately £2.2 million, on the
basis of 1 Open Offer Share for every 6 Existing Ordinary
Shares, to allow shareholders with relatively small holdings to
participate in the fundraising.

• The principal activity of Dynacast is the manufacture of
precision diecast zinc, aluminium and magnesium alloy
components.

• The principal activity of McKechnie is the supply of
specialist engineering products. Principal division is
Aerospace OEM, which supplies safety critical aerospace
components to the global aerospace industry.

Christopher Miller, Chairman of Melrose, commented:

"We are delighted to announce the acquisition of
Dynacast and McKechnie. This transaction fulfils our
strategy of acquiring industrial manufacturing
businesses and creating a group with good underlying
assets and excellent growth prospects. We are very
pleased with the significant support which we have
received for the placing and look forward to working
with the management of Dynacast and McKechnie to create
value for our shareholders."

Richard Munton, partner of Cinven, added:

"McKechnie and Dynacast have proved to be remarkably
resilient businesses over five or so years of ownership.
Trading has firmed based on solid fundamentals and the
Melrose deal provides us with an exit through a "hybrid"
reverse structure. We know the Melrose management team
and they have a strong track record in running public
companies. Now is the right time to undertake this
transaction given the age of the investment, but Cinven
has retained a significant stake in order to benefit
from the upside we expect the improving aerospace market
to deliver."

N M Rothschild acted as financial advisor to Melrose and
Robert W Baird and Morgan Stanley acted as financial
advisor to Cinven. Investec acted as broker and
Nominated Adviser to Melrose.

The Company has today published a Prospectus in
connection with the above proposals which is being sent
to Melrose Shareholders together with a Form of Proxy
for use at an EGM and an Application Form for use in
connection with the Open Offer. A copy of the Prospectus
will be available from the Company's registered office.
An Extraordinary General Meeting has been convened for
these purposes to be held at the offices of Investec at
2 Gresham Street, London EC2V 7QP at 11.30 a.m. on 16
May 2005.

Certain definitions apply throughout the following
announcement and your attention is drawn to the table at
the end of this announcement where these definitions are
set out in full.

21 April 2005

Enquiries:

Melrose:

N M Rothschild & Sons Limited:
Philip Swatman              Tel: [phone]
Meyrick Cox                 Tel: [phone]
Ravi Gupta                  Tel: [phone]

Investec:
Keith Anderson              Tel: [phone]
Rupert Krefting             Tel: [phone]

M Communications:
Nick Miles                  Tel: [phone]
Nick Fox                    Tel: [phone]
Tom Hampson                 Tel: [phone]

Cinven:

Financial Dynamics:
Edward Bridges              Tel: [phone]

The above summary should be read in conjunction with the
full text of this announcement set out below.

This announcement does not constitute an offer to sell or an
invitation to subscribe for, or the solicitation of an offer
to buy or subscribe for, New Ordinary Shares in any
jurisdiction where such an offer or solicitation is
unlawful. The New Ordinary Shares have not been, and will
not be, registered under the US Securities Act or under the
securities laws of any state, district or other jurisdiction
of the United States, or of Canada, Japan, Australia, or any
other jurisdiction and no regulatory clearances in respect
of the New Ordinary Shares have been, or will be, applied
for in any jurisdiction other than the UK. Accordingly,
subject to certain exceptions, the New Ordinary Shares are
not being, and may not be, offered for sale or subscription,
or sold or subscribed, directly or indirectly, within the
United States, Canada, Japan or Australia or any
jurisdiction where it would be unlawful to do so or to or by
any national, resident or citizen of such countries.

Investec, which is regulated and authorised in the United
Kingdom by the Financial Services Authority, is acting only for
Melrose and no-one else in connection with the Acquisitions,
Admission, the Placing and the Open Offer and will not regard
any other person as its client or be responsible to any person
other than Melrose for providing the protections afforded to
clients of Investec, or for providing advice in relation to the
Acquisitions, Admission the Placing or the Open Offer or the
contents of this announcement.

Rothschild, which is regulated and authorised in the United Kingdom
by the Financial Services Authority, is acting only for Melrose and
no-one else in connection with the Acquisitions and will not regard
any other person as its client or be responsible to any person other
than Melrose for providing the protections afforded to clients of
Rothschild, or for providing advice in relation to the Acquisitions
or the contents of this announcement.

This announcement does not constitute, or form part of, an offer or
invitation to purchase or subscribe for any securities in any
jurisdiction. The Prospectus is expected to be published by the Company
on the date of this announcement and any acquisition of New Ordinary
Shares in the Company should be made only by reference to such
Prospectus.

This announcement contains statements about members of the Dynacast Group,
the McKechnie Group and Melrose that are or may be forward-looking
statements. All statements other than statements of historical facts
included in this announcement may be forward-looking statements. Any
statements preceded or followed by or that include the words ''targets'',
''plans'', ''believes'', ''expects'', ''aims'', ''intends'', ''will'',
''may'', ''anticipates'' or similar expressions or the negative thereof are
forward-looking statements. Forward-looking statements include statements
relating to the following: (i) future capital expenditures, expenses,
revenues, economic performance, financial condition, dividend policy, losses
and future prospects; (ii) business and management strategies and the
expansion and growth of Dynacast's, McKechnie's or Melrose's operations; and
(iii) the effects of government regulation on Dynacast's, McKechnie's or
Melrose's business. These forward-looking statements involve known and
unknown risk, uncertainties and other factors which may cause the actual
results, performance or achievements of any such entity, or industry
results, to be materially different from any results, performance or
achievements expressed or implied by such forward-looking statements. These
forward-looking statements are based on numerous assumptions regarding the
present and future business strategies of such entity and the environment in
which each will operate in the future. All subsequent oral or written
forward-looking statements attributable to Melrose or any persons acting on
its behalf are expressly qualified in their entirety by the cautionary
statement above. Except as required by law, neither Melrose nor any other
party intends to update these forward-looking statements, even though the
affairs of Melrose, Dynacast and McKechnie will change from time to time.



FOR IMMEDIATE RELEASE:
                                 
                                   MELROSE PLC

      Proposed Acquisitions of the Dynacast Group and the McKechnie Group

Proposed Placing of 199,807,334 Ordinary Shares and proposed Open Offer of up to
           2,186,666 Ordinary Shares, both at 100 pence per share and
           Admission of the Enlarged Share Capital to trading on AIM

1. Introduction

The Melrose Board is pleased to announce that the Company has conditionally
agreed to acquire the Dynacast Group and the McKechnie Group for an enterprise
value of £429 million. The aggregate consideration is to be satisfied by the
issue of 42,006,000 Consideration Shares to certain of the Vendors with the
balance to be satisfied in cash.

The Company is also pleased to announce a fully underwritten Placing with
institutional and certain other investors to raise £199,807,334 and an Open
Offer to Qualifying Shareholders which, if taken up in full, will raise up to
£2,186,666.

The net proceeds of the Placing will be used to satisfy part of the cash
consideration payable to the Vendors in respect of the Acquisitions. The balance
of the cash consideration payable in respect of the Acquisitions will be
financed by way of new debt facilities, further details of which are set out
below.

The Open Offer will allow all Qualifying Shareholders to subscribe for New
Ordinary Shares pro rata to their current holdings at the Placing Price of 100
pence per share. The Open Offer is intended to allow Shareholders with
relatively small holdings to participate in the fundraising. Subject to certain
restrictions outlined below, Qualifying Shareholders may also apply for
additional Open Offer Shares using the Excess Application Facility. The net
proceeds of the Open Offer will be used for general corporate purposes of the
Enlarged Group and will not be required to fund the Acquisitions. The Open Offer
is therefore not being underwritten. The Placing and the Open Offer are
conditional, inter alia, on completion of the Acquisitions.

The Acquisitions will be treated as a reverse takeover under the AIM Rules. This
requires both cancellation of Melrose's existing trading facility on AIM and a
new application to be made for the Enlarged Share Capital to be admitted to
trading on AIM. It is expected that this will become effective and that dealings
will commence on the first dealing day following the date on which the Placing
Agreement becomes unconditional (subject only to Admission), which is expected
to occur around the end of May 2005. In addition, the Acquisitions require the
prior approval of Melrose Shareholders at an Extraordinary General Meeting which
has been convened for 11.30 a.m. on 16 May 2005. Following Completion, the
Melrose Directors intend to apply for admission of the Enlarged Share Capital to
the Official List as soon as reasonably practicable, which the Melrose Directors
expect to be within six months of Completion.

2. Background to the Acquisitions

Melrose was floated on AIM on 28 October 2003 with the stated strategy of
acquiring companies and businesses whose performance the Melrose Directors
believe can be improved to create shareholder value.

Dynacast and McKechnie represent a strong fit with Melrose's strategy of
focusing on mid-cap industrial manufacturing businesses. Both businesses have
cash generative characteristics, strong market share and a global footprint. The
Melrose Board believes it can create substantial shareholder value from the
acquisition of these businesses.

Further information on Dynacast and McKechnie can be found in paragraphs 5 and 6
below.

3. Financing the Acquisitions
The consideration to be paid to the Vendors in connection with the Acquisitions
is to be financed through both equity and debt.

Equity

The cash consideration payable under the terms of the Acquisitions is being
financed in part from the proceeds of the Placing, which has been fully
underwritten by Investec. Investec, as agent for Melrose, has conditionally
placed the Placing Shares with institutional and certain other investors at the
Placing Price. The Placing will raise £199,807,334 (before expenses). The
Placing Price reflects the price per Ordinary Share paid by founder shareholders
at the time of the Company's admission to AIM in October 2003. Further details
of the Placing are set out in paragraph 4 below.

In addition, Melrose will issue 42,006,000 Consideration Shares to certain of
the Vendors as part of the consideration for the Acquisitions.

Debt

Melrose has entered into a £230 million multicurrency term and revolving
facilities agreement with Barclays Capital and Lloyds TSB Bank plc as mandated
lead arrangers. Of this facility, £200 million will be used to finance part of
the cash consideration for the Acquisitions and the remaining £30 million will
be available for general corporate purposes. The existing debt of the McKechnie
Group and the Dynacast Group will be repaid on Completion.

4. Details of the Open Offer and the Placing

Open Offer

The Company intends to raise up to £2,186,666 (before expenses) by way of the
Open Offer to Qualifying Shareholders. The Open Offer is an opportunity for all
Shareholders to subscribe for New Ordinary Shares pro rata to their current
holdings and is intended to allow Shareholders with relatively small holdings to
participate in the fundraising. The Open Offer is not being underwritten.
Investec will invite Qualifying Shareholders to subscribe for Open Offer Shares
at the Placing Price of 100 pence per share on the basis of:

            1 Open Offer Share for every 6 Existing Ordinary Shares
held by them and registered in their name on the Record Date. Subject to certain
restrictions outlined below, Qualifying Shareholders may also apply for
additional Open Offer Shares using the Excess Application Facility. Entitlements
of Qualifying Shareholders will be rounded down to the nearest whole number of
Open Offer Shares and will not be allocated. Fractional entitlements to Open
Offer Shares will be aggregated and made available to Qualifying Shareholders
under the Excess Application Facility. The Open Offer Shares are to be paid for
in full on application.

The Open Offer Shares will, when issued and fully paid, rank pari passu in all
respects with the Existing Ordinary Shares and will rank in full for all
dividends and other distributions declared, made or paid thereafter on the
issued ordinary share capital of the Company.

Qualifying Shareholders may apply for more or less than their Basic Entitlement.
However, the aggregate entitlement of each applicant will be subject to a
maximum of the greater of the applicant's Basic Entitlement and 100,000 Open
Offer Shares. Excess applications may be scaled down in such manner as the
Melrose Directors determine, in their absolute discretion. It is intended that
excess applications will be satisfied pro rata (or as nearly as practicable) to
the relevant holder's Basic Entitlement. The aggregate number of New Ordinary
Shares available for subscription under the Open Offer will not exceed
2,186,666.

Placing

In order to finance part of the cash consideration due under the Acquisitions,
Investec, on behalf of the Company, has conditionally placed a total of
199,807,334 Placing Shares with institutional and certain other investors at the
Placing Price to raise £199,807,334 (before expenses). The Placing Shares will
represent approximately 78 per cent. of the Enlarged Share Capital. The Placing
is fully underwritten by Investec.

The Placing Shares will, when issued and fully paid, rank pari passu in all
respects with the Existing Ordinary Shares and will rank in full for all
dividends and other distributions declared, made or paid thereafter on the
issued share capital of the Company.

The Melrose Directors (and certain of their connected persons and companies)
have agreed to subscribe for an aggregate of 2,699,588 Placing Shares,
representing approximately one per cent. of the Enlarged Share Capital, assuming
full subscription under the Open Offer. Further information on the Melrose
Directors' participation in the Placing is provided in paragraph 15 below.

Conditions to the Placing and Open Offer

The Open Offer and the Placing are conditional upon, inter alia, the passing of
the Resolution, each of the Placing Agreement and the Share Purchase Agreement
becoming unconditional (save for Admission) and Admission. It is expected that
Admission will become effective and that dealings in the Enlarged Share Capital
will commence on the first dealing day following the date on which the Placing
Agreement becomes unconditional (subject only to Admission), which is expected
to occur around the end of May 2005. If the conditions of the Placing and Open
Offer are not fulfilled on or before 15 June 2005, neither the Placing nor the
Open Offer will complete and application monies received from Shareholders
making applications under the Open Offer will be returned to applicants without
interest as soon as practicable thereafter.

5. Information on Dynacast

Dynacast is a leading global manufacturer of precision engineered diecast zinc,
aluminium and magnesium alloy components, which are generally smaller than 25cm
in size. The products are manufactured using proprietary multi-slide diecasting
technology, which is important to the Dynacast Group, and traditional hot and
cold chamber technology. The products of the Dynacast Group include precision
engineered components supplied to a variety of end markets, including the
automotive, healthcare, telecommunications and consumer electronics industries.
Dynacast's largest customers include major international companies, with no one
customer accounting for more than approximately 8 per cent. of sales of the
Dynacast Group. Dynacast is a market leader in its product market in the US and
Europe, where the markets for small sized components are fragmented.

The Dynacast Group has over 2,200 employees operating in 17 countries within the
Americas (accounting for approximately 43 per cent. of the Dynacast Group sales
in 2004), Europe (accounting for approximately 43 per cent. of the Dynacast
Group sales in 2004) and Asia (accounting for approximately 14 per cent. of the
Dynacast Group sales in 2004).

Summary financial information of the Dynacast Group is set out below:

Year ended 31 December                       2002 (£m)    2003 (£m)    2004 (£m)

Sales                                         172.2        183.7        172.4

EBITA before operating exceptional items       11.9         19.7         23.7

6. Information on McKechnie

McKechnie is a leading supplier of specialist engineering products with five
divisions: Aerospace OEM, Aerospace Aftermarket, Vehicle Components, Plastic
Components and Industrial Fasteners. Aerospace OEM is the principal division of
the McKechnie Group.

• Aerospace OEM supplies safety critical aerospace components and
sub-components to the global aerospace industry. The products of this
division include latching systems, rods, struts, motors, blowers and
actuators, speciality engine fasteners and airframe bolts. This division is
located in the US and Europe and represents approximately 39 per cent. of
the McKechnie Group by sales and approximately 51 per cent. of the McKechnie
Group by EBITDA for the financial year ended 31 July 2004.

• Aerospace Aftermarket provides a 24 hour-a-day, 7 days-a-week
distribution service, offering a range of components, related systems
and engineering services to the aerospace aftermarket. Product
categories include airframe, engine, ground support equipment and
battery support equipment.

• Vehicle Components manufactures decorative trim products for the
US automotive industry. The products can be split into two general
categories: metal products (including wheel covers and cladding,
trim rings and aluminium wheel ornaments) and plastic products
(including wheel covers, centre ornaments, grilles and decorative
trim).

• Plastic Components is a UK producer of engineered plastic
and plastic injection moulded components for products in a
variety of industries including power tools, IT hardware, food
packaging, personal care and the automotive industry.

• Industrial Fasteners manufactures and distributes
specialised fasteners and joining systems.

McKechnie has over 2,900 employees operating within Europe,
the United States and the Pacific region.

Summary financial information of the continuing operations of the 
McKechnie Group is set out below: 

Year ended 31 July                 2002     2003     2004
                                   (£m)     (£m)     (£m)

Sales                              314.8    280.8    252.5

EBITA before operating              38.0     30.8     21.6
exceptional items 1


1 including share of profit from joint ventures

Following Completion, Melrose intends to maintain a 31
December year end in respect of the Enlarged Group.

7. Details of the Acquisitions

Under the terms of the Share Purchase Agreement, the Company
has conditionally agreed to acquire the entire issued share
capitals of Dynacast and McKechnie. The aggregate
consideration for the Acquisitions will be satisfied in cash
and by the issue of the Consideration Shares. The Share
Purchase Agreement is conditional upon, inter alia, (i) the
passing of the Resolution; (ii) the Placing Agreement
becoming unconditional in all respects (save for any
condition relating to Admission); (iii) the receipt of any
relevant regulatory clearances; and (iv) Admission. The
Melrose Board does not anticipate any substantial issues
arising in connection with the receipt of any regulatory
clearances.

The Consideration Shares to be issued to certain of the
Vendors will represent approximately 16 per cent. of the
Enlarged Share Capital and, upon their allotment, will rank
pari passu in all respects with the Existing Ordinary
Shares, the Placing Shares and the Open Offer Shares.

8. Lock-in Arrangements

The Restricted Vendors have entered into agreements with
Melrose and Investec not to dispose of the Consideration
Shares they will receive pursuant to the Acquisitions
(except with the prior written consent of Melrose and
Investec and subject to certain limited exceptions) for a
period of 12 months following Admission, except as follows:

a) up to one-third of any Restricted Vendor's holding
of Consideration Shares between the date which is six months
after the Completion Date and the date which is nine months
after the Completion Date; and

b) up to one-third of any Restricted Vendor's holding
of Consideration Shares between the date which is nine
months after the Completion Date and the first anniversary
of the Completion Date.

9. Dividend policy

Melrose intends, in the absence of unforeseen circumstances,
to pay a dividend equivalent to 5 pence per Ordinary Share
on an annualised basis in respect of the financial year
ended 31 December 2005, and a dividend of at least 5 pence
per Ordinary Share for the first full financial year of
ownership. This is equivalent to a dividend yield of 5 per
cent. at the Placing Price. It is the intention of the
Melrose Board to maintain a progressive dividend policy
after that.

10. Pensions
Due to the capital structure of the Enlarged Group, the
trustees of the McKechnie Pension Plan have agreed,
conditional on Completion, to make certain amendments to the
McKechnie Pension Plan, details of which are set out in the
Prospectus.

11. Current trading and prospects of the Enlarged Group

Melrose has not traded since incorporation and has to date
been seeking potential acquisition opportunities. Melrose
has today announced its preliminary results for the year
ended 31 December 2004.

Since the end of the last financial year (being 31 December
2004), trading for the Dynacast Group has been in line with
expectations. The level of new tooling sales in the first
quarter has been strong, a good indicator of new business
levels. The Dynacast Group remains well positioned to
achieve growth in both new and existing market sectors.

Since 31 July 2004, the McKechnie aerospace businesses have
benefited from the upturn in the aerospace cycle with
improved order levels and business activity. This is
expected to continue for the medium term. The other
McKechnie businesses are performing in line with
expectations although recovery of raw material price
increases remains a challenge.

Following Completion, the Melrose Directors are confident
that they can create value for shareholders of the Enlarged
Group.

12. Summary pro forma financial information
The following is summary pro forma financial information for
the Enlarged Group which has been extracted from the
financial information on both the Dynacast and McKechnie
Groups in the Prospectus and prepared on the basis of the
assumptions below. This has been prepared for illustrative
purposes only to show the summary pro forma financial
information of the Enlarged Group had Melrose owned the two
businesses from the beginning of the most recent financial
periods for which audited accounts have been prepared (in
the case of Dynacast, from 1 January 2004 and, in the case
of McKechnie, from 3 August 2003).

In 2004, pro forma turnover for continuing businesses would
have been £424.9 million (being £172.4 million for the
Dynacast Group and £252.5 million for the McKechnie Group),
pro forma profit after taxation before goodwill amortisation
and exceptional items (after allowing for Melrose Group
adjustments, an appropriate interest charge and a 30 per
cent. tax charge) would have been £23.6 million and pro
forma earnings per share (before goodwill amortisation and
exceptional items) of 9.2 pence, valuing the Enlarged Group
at the Placing Price on a pro forma price earnings multiple
of 10.9 times (the earnings per share assumes that the
maximum number of shares had been issued under the Open
Offer).

13. Admission to AIM and Dealings
The proposed Acquisitions will constitute a reverse
take-over under the AIM Rules and are therefore conditional
upon the approval of Shareholders being given at the
Extraordinary General Meeting, details of which are set out
below. Application will be made for the Enlarged Share
Capital to be admitted to trading on AIM and it is
anticipated that Admission will become effective and that
trading in the Ordinary Shares on AIM will commence on the
first dealing day following the date on which the Placing
Agreement becomes unconditional (subject only to Admission),
which is expected to occur around the end of May 2005.

14. Extraordinary General Meeting

In view of the size of the Acquisitions and in order to
implement the Placing and the Open Offer and the issue of
the Consideration Shares, it will be necessary for the
Shareholders of Melrose to approve: the Acquisitions, an
increase in the share capital of Melrose, the allotment of
the New Ordinary Shares and to disapply statutory
pre-emption rights in respect of the allotment of the
Placing Shares, the Open Offer Shares and the Consideration
Shares.

An Extraordinary General Meeting, notice of which is set out
in the Prospectus, is being convened for 11.30 a.m. on 16
May 2005 for this purpose. At the Extraordinary General
Meeting, a special resolution will be proposed to:

a) approve the Acquisitions on the terms and conditions
set out in the Share Purchase Agreement;

b) increase the authorised share capital of the Company
from £76,170 to £402,000 by the creation of 325,830,000 New
Ordinary Shares;

c) authorise the Melrose Directors to allot relevant
securities, pursuant to section 80 of the Act, up to an
aggregate nominal amount of £325,830. This authority will be
in addition to the Melrose Directors' existing authorities
to allot relevant securities and will expire on the earlier
of the conclusion of the next annual general meeting of
Melrose and 15 months after the passing of the Resolution;
and

d) empower the Melrose Directors to allot equity
securities for cash as if section 89(1) of the Act did not
apply to the allotment. This power is limited to the
allotment of equity securities pursuant to the Placing and
the Open Offer and in respect of the Consideration Shares
and will expire on the earlier of the conclusion of the next
annual general meeting of Melrose and 15 months after the
passing of the Resolution.

The items set out in paragraphs (b), (c) and (d) above will
be conditional on the Placing Agreement becoming
unconditional (save for Admission).

15. Related party transaction
The Melrose Directors and Harris & Sheldon Investments
Limited (a company which is connected with Christopher
Miller within the meaning of the Act) will be subscribing
for an aggregate of 2,699,588 Placing Shares pursuant to the
Placing. The Placing will therefore constitute a related
party transaction for the purposes of the AIM Rules.

Investec considers that the terms of the participation of
the Melrose Directors and Harris & Sheldon Investments
Limited in the Placing is fair and reasonable.

16. Prospectus

The Prospectus, accompanied by a Form of Proxy for use in
connection with the EGM and an Application Form for use in
connection with the Open Offer, setting out details of the
Acquisitions, the Placing and the Open Offer and including a
notice of the EGM, will be posted to Shareholders today. A
copy of the Prospectus is available today at the offices of
Clifford Chance LLP, 10 Upper Bank Street, London E14 5JJ.

21 April 2005

Enquiries:

Melrose:

N M Rothschild & Sons Limited:
Philip Swatman             Tel: [phone]
Meyrick Cox                Tel: [phone]
Ravi Gupta                 Tel: [phone]

Investec:
Keith Anderson             Tel: [phone]
Rupert Krefting            Tel: [phone]

M Communications:
Nick Miles                 Tel: [phone]
Nick Fox                   Tel: [phone]
Tom Hampson                Tel: [phone]

Cinven:

Financial Dynamics:
Edward Bridges             Tel: [phone]

This announcement does not constitute an offer to sell or an
invitation to subscribe for, or the solicitation of an offer
to buy or subscribe for, New Ordinary Shares in any
jurisdiction where such an offer or solicitation is
unlawful. The New Ordinary Shares have not been, and will
not be, registered under the US Securities Act or under the
securities laws of any state, district or other jurisdiction
of the United States, or of Canada, Japan, Australia, or any
other jurisdiction and no regulatory clearances in respect
of the New Ordinary Shares have been, or will be, applied
for in any jurisdiction other than the UK. Accordingly,
subject to certain exceptions, the New Ordinary Shares are
not being, and may not be, offered for sale or subscription,
or sold or subscribed, directly or indirectly, within the
United States, Canada, Japan or Australia or any
jurisdiction where it would be unlawful to do so or to or by
any national, resident or citizen of such countries.

Investec, which is regulated and authorised in the United
Kingdom by the Financial Services Authority, is acting only
for Melrose and no-one else in connection with the
Acquisitions, Admission, the Placing and the Open Offer and
will not regard any other person as its client or be
responsible to any person other than Melrose for providing
the protections afforded to clients of Investec, or for
providing advice in relation to the Acquisitions, Admission
the Placing or the Open Offer or the contents of this
announcement.

Rothschild, which is regulated and authorised in the United
Kingdom by the Financial Services Authority, is acting only
for Melrose and no-one else in connection with the
Acquisitions and will not regard any other person as its
client or be responsible to any person other than Melrose
for providing the protections afforded to clients of
Rothschild, or for providing advice in relation to the
Acquisitions or the contents of this announcement.

This announcement does not constitute, or form part of, an
offer or invitation to purchase or subscribe for any
securities in any jurisdiction. The Prospectus is expected
to be published by the Company on the date of this
announcement and any acquisition of New Ordinary Shares in
the Company should be made only by reference to such
Prospectus.

This announcement contains statements about members of the
Dynacast Group, the McKechnie Group and Melrose that are or
may be forward-looking statements. All statements other than
statements of historical facts included in this announcement
may be forward-looking statements. Any statements preceded
or followed by or that include the words ''targets'',
''plans'', ''believes'', ''expects'', ''aims'', ''intends'',
''will'', ''may'', ''anticipates'' or similar expressions or
the negative thereof are forward-looking statements.
Forward-looking statements include statements relating to
the following: (i) future capital expenditures, expenses,
revenues, economic performance, financial condition,
dividend policy, losses and future prospects; (ii) business
and management strategies and the expansion and growth of
Dynacast's, McKechnie's or Melrose's operations; and (iii)
the effects of government regulation on Dynacast's,
McKechnie's or Melrose's business. These forward-looking
statements involve known and unknown risk, uncertainties and
other factors which may cause the actual results,
performance or achievements of any such entity, or industry
results, to be materially different from any results,
performance or achievements expressed or implied by such
forward-looking statements. These forward-looking statements
are based on numerous assumptions regarding the present and
future business strategies of such entity and the
environment in which each will operate in the future. All
subsequent oral or written forward-looking statements
attributable to Melrose or any persons acting on its behalf
are expressly qualified in their entirety by the cautionary
statement above. Except as required by law, neither Melrose
nor any other party intends to update these forward-looking
statements, even though the affairs of Melrose, Dynacast and
McKechnie will change from time to time.

                                  Definitions

The following definitions apply throughout this announcement
unless the context requires otherwise:

''Acquisitions''   the proposed acquisitions by Melrose of
                   the Dynacast Group and the McKechnie Group

''Admission''      the re-admission of the Existing Ordinary
                   Shares and the admission of the Placing
                   Shares, the Consideration Shares and/or
                   the Open Offer Shares to trading on AIM
                   becoming effective in accordance with the 
                   AIM Rules

''AIM''            AIM, a market of the London Stock Exchange

''AIM Rules''      the rules applicable to companies whose
                   shares are traded on AIM published by the
                   London Stock Exchange

''Application      the application form relating to the Open
Form''             Offer being sent to Qualifying Shareholders 
                   with the Prospectus

"Banks"            Barclays Capital and Lloyds TSB Bank plc

"Basic             the basic pro rata entitlement of 
Entitlement"       Qualifying Shareholders to subscribe 1
                   Open Offer Share for every 6 Existing
                   Ordinary Shares held on the Record Date

"Board" or         the existing directors of the Company at
"Directors"        the date of the Prospectus whose names
                   are set out on page 4 of the Prospectus

''Completion''     completion of the Share Purchase
                   Agreement in accordance with its terms

''Completion       the date on which Completion occurs
Date"

                   
''Consideration    42,006,000 new Ordinary Shares to be
Shares''           issued to certain of the Vendors pursuant
                   to the Share Purchase Agreement at the
                   Placing Price

''Dynacast''       Dynacast International Limited

"Dynacast Group"   Dynacast and its subsidiaries

"EBITDA"           earnings before interest, tax,
                   depreciation and amortisation

''Enlarged         Melrose and its subsidiaries following
Group''            completion of the Acquisitions
''Enlarged         the issued ordinary share capital of
Ordinary Share     Melrose as it will be following the issue
Capital'' or       of the New Ordinary Shares
''Enlarged Share
Capital''

''Existing         the existing Ordinary Shares
Ordinary Share(s)"

''Extraordinary    the extraordinary general meeting of
General Meeting''  Melrose convened for 11.30 a.m. on 16 May
or ''EGM''         2005 to vote on the Resolution and any
                   adjournment thereof

''Form of          the form of proxy for use by Shareholders
Proxy''            in connection with the EGM

"Institutional     Railway Pension Venture Capital Limited,
Vendors"           Coal Pension Venture Limited Partnership,
                   Barclays UK Retirement Fund Venture
                   Limited Partnership, Second Cinven Fund
                   No. 1 Limited Partnership, Second Cinven
                   Fund No. 2 Limited Partnership, Second
                   Cinven Fund Dutch No. 1 Limited
                   Partnership, Second Cinven Fund Dutch No.
                   2 Limited Partnership, Second Cinven Fund
                   Dutch No. 3 Limited Partnership, Second
                   Cinven Fund Dutch No. 4 Limited
                   Partnership, Second Cinven Fund US No. 1
                   Limited Partnership, Second Cinven Fund
                   US No. 2 Limited Partnership, Second
                   Cinven Fund US No. 3 Limited Partnership,
                   Cinven Nominees Limited Accounts 1 to 21,
                   Ogier Employee Benefit Trustee Limited
                   (as trustee of the Employee Benefit
                   Trust), Mozart Jersey Holdings No. 1
                   Limited, Mozart Jersey Holdings No. 2
                   Limited, Cinven Nominees Limited
                   (Accounts Nos 1-11 and 13-25), Second
                   Cinven Fund US No. 1 Co-Investment
                   Limited Partnership, UBS Jersey Nominees
                   Limited, Squam Lake Investors V, L.P.,
                   Waban Investors I, L. P., Bain & Company, Inc

''Investec''       Investec Investment Banking, a division
                   of Investec Bank (UK) Limited

"Management        Stuart Greville Moberley, Ross Edward
Vendors"           McDonald, Peter David Shepherd, Raymond
                   Stark, Tariq Jesrai, William George White
                   Jr., Andrew Charles Walden Wright,
                   Michael Albert Stacey, Robert Morgan

''McKechnie''      Mozart Jersey Holdings No.1 Limited and
                   Mozart Jersey Holdings No. 2 Limited

"McKechnie         McKechnie and their subsidiaries
Group"
''Melrose'' or the Melrose PLC
''Company''
''Melrose Board''  the board of directors of Melrose
or ''Melrose
Directors''

''Melrose          holders of Ordinary Shares
Shareholders'' or
''Shareholders''

''New Ordinary     the Consideration Shares, the Placing
Shares''           Shares and/or the Open Offer Shares

''Open Offer''     the conditional invitation by Investec on
                   behalf of the Company to Qualifying
                   Shareholders to apply for Open Offer
                   Shares on the terms and conditions set
                   out in the Prospectus and the Application
                   Form

''Open Offer       up to 2,186,666 new Ordinary Shares to be
Shares''           issued to Qualifying Shareholders
                   pursuant to the Open Offer

''Ordinary Share'' ordinary shares of 0.1 pence each in the
or ''Ordinary      capital of Melrose
Shares''
''Overseas         Shareholders on the register of members
Shareholders''     of the Company on the Record Date who are
                   not resident in the UK

''Placing''        the placing by Investec of the Placing
                   Shares at the Placing Price on the terms
                   set out in the Placing Agreement

''Placing          the agreement dated 21 April 2005 entered
Agreement''        into between Melrose and Investec in
                   relation to the Placing and the Open
                   Offer, details of which are set out in
                   paragraph 8.1 of Part VIII of the
                   Prospectus

''Placing          100 pence per Ordinary Share
Price''

''Placing          199,807,334 new Ordinary Shares which are
Shares''           to be issued pursuant to the Placing

"POS               the Public Offers of Securities
Regulations"       Regulations 1995 (as amended)

"Prospectus"       the prospectus relating to Melrose to be
                   posted to Shareholders today setting out
                   details of the Acquisitions, the Placing,
                   the Open Offer and including a notice of EGM

''Qualifying       the Melrose Shareholders (other than
Shareholders''     certain Overseas Shareholders who are
                   excluded, as set out in Part II of the
                   Prospectus) on the register of members at
                   the Record Date

''Record Date''    the close of business on 19 April May
                   2005

''Resolution''     the special resolution to be proposed at
                   the EGM (and set out in the notice of EGM
                   at the end of the Prospectus) to inter
                   alia, approve the Acquisitions, increase
                   the share capital of Melrose, authorise
                   the Melrose Directors to allot the New
                   Ordinary Shares and dis-apply pre-emption
                   rights in relation to the allotment of
                   the New Ordinary Shares

"Restricted        Railway Pension Venture Capital Limited,
Vendors"           Coal Pension Venture Limited Partnership,
                   Barclays UK Retirement Fund Venture
                   Limited Partnership, Second Cinven Fund
                   No. 1 Limited Partnership, Second Cinven
                   Fund No. 2 Limited Partnership, Second
                   Cinven Fund Dutch No. 1 Limited
                   Partnership, Second Cinven Fund Dutch No.
                   2 Limited Partnership, Second Cinven Fund
                   Dutch No. 3 Limited Partnership, Second
                   Cinven Fund Dutch No. 4 Limited
                   Partnership, Second Cinven Fund US No. 1
                   Limited Partnership, Second Cinven Fund
                   US No. 2 Limited Partnership, Second
                   Cinven Fund US No. 3 Limited Partnership,
                   Cinven Nominees Limited Accounts 1 to 21,
                   Cinven Nominees Limited (Accounts Nos
                   1-11 and 13-25), Second Cinven Fund US
                   No. 1 Co-Investment Limited Partnership,
                   UBS Jersey Nominees Limited

''Rothschild''     N M Rothschild & Sons Limited

"Share Purchase    the share purchase agreement dated 21
Agreement"         April 2005 between the Company and the
                   Vendors pursuant to which, conditional,
                   inter alia, upon the passing of the
                   Resolution, Melrose has agreed to acquire
                   and the Vendors have agreed to sell the
                   entire issued share capital of Dynacast
                   and McKechnie to the Company, details of
                   which are set out in paragraph 8.1 of
                   Part VIII of the Prospectus

''subsidiary'',    shall, unless otherwise stated, be
''subsidiary       construed in accordance with the Act (but
undertaking'',     for these purposes ignoring paragraph 20
''parent           (1)(b) of Schedule 4A to the Act)
undertaking'',
''associated
undertaking'' and
''undertaking''

''United Kingdom'' the United Kingdom of Great Britain and
or ''UK''          Northern Ireland

''US'' or ''United the United States of America (including
States''           the states of the United States and the
                   District of Colombia), its possessions
                   and territories and all areas subject to
                   its jurisdiction

''US Person''      a US Person as defined in Regulation S
                   under the US Securities Act

''US Securities    the US Securities Act of 1933, as
Act''              amended, and the rules and regulations
                   promulgated thereunder

''Vendors''        the Institutional Vendors and the
                   Management Vendors

''Wassall''        Wassall PLC
                  
 All times referred to are London time unless otherwise stated.




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