Acquisition

Pathfinder Properties PLC
9 April 2001

9 April 2001



Pathfinder Properties PLC



Recommended Offer for:

Pathfinder Recovery 1 PLC

and Pathfinder Recovery 2 PLC



The Board of Pathfinder Properties PLC ('Properties or 'Pathfinder Properties
') and the Boards of Pathfinder Recovery 1 PLC ('Recovery 1') and Pathfinder
Recovery 2 PLC ('Recovery 2') have reached an agreement on the terms of a
recommended offer being made by Nabarro Wells & Co Ltd ('Nabarro Wells') on
behalf of Pathfinder Properties to acquire the whole of the issued ordinary
share capital of Recovery 1 and Recovery 2 ('Recoveries' when the text applies
to both companies ). The Offers are not interconditional. The Offer documents
are being posted today to shareholders of Recoveries.



The independent Recoveries director, who has been so advised by Beaumont
Cornish, considers the terms of the Offers to be fair and reasonable and
recommends Recoveries shareholders to accept the respective Offers.



The Offers are ,inter alia , conditional on the passing of a resolution of the
shareholders of Properties increasing its share capital. A circular convening
an extraordinary general meeting of Properties is being posted today.



The Offer for Recovery 1

The Share Offer

The offer by Nabarro Wells on behalf of Properties is to acquire, on the terms
in the formal offer document , all the Recovery 1 Shares on the following
basis:



Thirty-three Properties New Shares for every four Recovery 1 Shares



And so in proportion for any other number of Recovery 1 shares held.
Fractional entitlements to Properties New Shares will be rounded down. The
Offer extends to all Recovery 1 Shares it does not already hold in issue or
allotted on the date of the Offer or which are allotted during the course of
the Offer.



Based on the middle market price of Properties Existing Shares as at the close
of business on 5 April 2001, the latest practicable date prior to the
publication of the offer document, and on the basis that no further shares in
the capital of Recovery 1 are allotted or issued while the Offer remains open
for acceptance, the Share Offer values each Recovery 1 share at 117.56p. The
middle market price of a Recovery 1 Share on OFEX as at 5 April 2001, the
latest practicable date prior to publication of this document was 130p.
However, Shareholders should note that the Share Offer has not been based on
the market price of either Properties Existing Shares or Recovery 1 Shares but
on the respective net asset values of the two companies. Shareholders who
accept the Share Offer will receive Properties New Shares with an underlying
net asset value equivalent to the net asset value of the Recovery 1 Shares in
respect of which they accept the Share Offer. That underlying net asset value
as reported in the audited financial statements of Recovery 1 for the year
ended 31 December 2000 was 174p per share.



The total dividend for each Recovery 1 Share for the year ended 31 December
2000 was 4.70p compared to a total dividend for the equivalent number of
Properties Shares which would be received under the Offer of 5.36p assuming
that there is no election for the Limited Cash Alternative and that the entire
share capital of both Recovery 1 and Recovery 2 are acquired.



Once the Offer becomes or has been declared unconditional in all respects
Pathfinder Properties will apply for Properties New Shares to be admitted to
trading on AIM within 14 days of the date on which the Offer becomes or is
declared unconditional in all respects.



The Limited Cash Alternative

In order that Recovery 1 shareholders are provided with the opportunity to
receive some or possibly all of their consideration in cash, Nabarro Wells on
behalf of Properties, is offering subject to the terms of the formal offer
document a Limited Cash Alternative.



Under the Limited Cash Alternative, accepting shareholders may elect to
receive their consideration on the following basis:



                   148p in cash for every Recovery 1 Share



and so in proportion for any other number of Recovery 1 Shares held, subject
always to the Limited Cash Alternative being limited by the aggregate maximum
amount of £1,026,021.18. Shareholders' elections under the Limited Cash
Alternative in respect of Recovery 1 Shares will be scaled back pro rata to
their holdings of Recovery 1 Shares in respect of which they have made the
election where the aggregate elections for the Limited Cash Alternative exceed
or may exceed this limit. Where elections under the Limited Cash Alternative
are so scaled back, the balance of the consideration receivable by an
accepting Recovery 1 Shareholder will be met under the terms of the Share
Offer. If all Shareholders were to accept the Limited Cash Alternative, the
minimum amount of cash received by shareholders under the Limited Cash
Alternative would be 22.20p per share. The Limited Cash Alternative represents
a discount of 14.9 per cent to the net asset value per share of Recovery 1.



The Offer for Recovery 2

The Share Offer

The offer by Nabarro Wells on behalf of Properties is to acquire, on the terms
of the formal offer document, all the Recovery 2 Shares on the following
basis:



Nine Properties New Shares for every one Recovery 2 Share



and so in proportion for any other number of Recovery 2 shares held.
Fractional entitlements to Properties New Shares will be rounded down. The
Offer extends to all Recovery 2 Shares it does not already hold in issue or
allotted on the date of the Offer or which are allotted during the course of
the Offer.



Based on the middle market price of Properties Existing Shares as at the close
of business on 5 April 2001, the latest practicable date prior to the
publication of this document, and on the basis that no further shares in the
capital of Recovery 2 are allotted or issued while the Offer remains open for
acceptance, the Share Offer values each Recovery 2 share at 128.25p. The
middle market price of a Recovery 2 Share on OFEX as at 5 April 2001, the
latest practicable date prior to publication of this document was 125p.
However, Shareholders should note that the Share Offer has not been based on
the market price of either Properties Existing Shares or Recovery 2 Shares but
on the respective net asset values of the two companies. Shareholders who
accept the Share Offer will receive Properties New Shares with an underlying
net asset value equivalent to the net asset value of the Recovery 2 Shares in
respect of which they accept the Share Offer. That underlying net asset value
as reported in the audited financial statements of the Recovery 2 for the year
ended 31 December 2000 was 190p per share.



The total dividend for each Recovery 2 Share for the year ended 31 December
2000 was 5.10p compared to a total dividend for the equivalent number of
Properties Shares which would be received under the Offer of 5.85p assuming
that there is no election for the Limited Cash Alternative and that the entire
share capital of both Recovery 1 and Recovery 2 are acquired.



Once the Offer becomes or has been declared unconditional in all respects
Pathfinder Properties will apply for Properties New Shares to be admitted to
trading on AIM within 14 days of the date on which the Offer becomes or is
declared unconditional in all respects.



The Limited Cash Alternative

In order that Shareholders are provided with the opportunity to receive some
or possibly all of their consideration in cash, Nabarro Wells , on behalf of
Properties , is offering subject to thye terms in the formal offer document, a
Limited Cash Alternative on behalf of Pathfinder Properties.



Under the Limited Cash Alternative, accepting Shareholders may elect to
receive their consideration on the following basis:



                   162p in cash for every Recovery 2 Share



and so in proportion for any other number of Recovery 2 Shares held, subject
always to the Limited Cash Alternative being limited by the aggregate maximum
amount of £1,171,320.03. Shareholders' elections under the Limited Cash
Alternative in respect of Recovery 2 Shares will be scaled back pro rata to
their holdings of Recovery 2 Shares in respect of which they have made the
election where the aggregate elections for the Limited Cash Alternative exceed
or may exceed this limit. Where elections under the Limited Cash Alternative
are so scaled back, the balance of the consideration receivable by an
accepting Recovery 2 Shareholder will be met under the terms of the Share
Offer. If all shareholders were to accept the Limited Cash Alternative, the
minimum amount of cash received by shareholders under the Limited Cash
Alternative would be 24.30p per share. The Limited Cash Alternative represents
a discount of 14.7 per cent to the net asset value per share of Recovery 2.



The Limited Cash Alternative for Recovery 1 and Recover 2 is conditional on
the Offer becoming or being declared unconditional in all respects. If the
Offer is, or is capable of being declared, unconditional as to acceptances on
the first closing date, the Limited Cash Alternative will remain open for
acceptance for a further 14 days thereafter. If the Offer is not then, and is
not capable of being declared, unconditional as to acceptances, the Limited
Cash Alternative will remain open for acceptances in accordance with the City
Code. The right is reserved to close or extend or to reintroduce the Limited
Cash Alternative as permitted by the City Code.



Nabarro Wells is satisfied that the necessary financial resources are
available to Pathfinder Properties for it to implement the Limited Cash
Alternative.



Conditions and further Terms of the Offer

The Recoveries Shares will be acquired fully paid and free from all liens,
equities, charges, encumbrances and pre-emption rights and together with all
rights attaching thereto, including the right to receive all dividend and
other distributions (if any) declared, made or paid in respect of any period
after 31 December 2000. Accordingly, Shareholders will be entitled to receive
the dividend to be declared by Recoveries in respect of the year ended 31
December 2000.



Properties New Shares to be issued pursuant to the Offers will be issued
credited as fully paid and free from all liens, charges, encumbrances, rights
of pre-emption, other third party rights or interests of any nature whatsoever
and will rank pari passu in all respects with Properties Existing Shares, save
that Shareholders receiving Properties New Shares will not be entitled to
receive the dividend to be declared by Pathfinder Properties in respect of the
year ended 31 December 2000.



The Offers are subject to the Conditions set out below.



Information on Pathfinder Properties

Pathfinder Properties was established under the BES in 1991 with its principal
business being ownership and letting of residential properties. Pathfinder
Properties initiated a programme of disposal of its property portfolio in
Spring 1996. In March 1997, Pathfinder Properties was admitted to AIM and
extended its business to include property development. Subsequently,
Pathfinder Properties expanded by the acquisitions of Pathfinder Repossessions
PLC and Pathfinder Repossessions II PLC.



Pathfinder Properties' principal assets are The Merchant Village, Glasgow;
River Quay, Castlefield, Manchester which are mixed use development sites and
Loch Lomond Retail Park, Alexandria.



Information on Recovery 1

Recovery 1 was incorporated on 13 July 1993 as a BES company, raising
approximately £4.64 million. The business of Recovery 1 was the acquisition,
refurbishment and letting of London residential property on assured tenancies.



In the Spring of 1997 the Recovery 1 Board initiated a programme to dispose of
the company's 192 unit property investment portfolio in order to provide an
exit route for the Recovery 1 shareholders.



Following an extraordinary general meeting of the company in November 1999 the
principal activities of the company were extended to include property
development and property trading and the company started to identify new
trading, investment and development opportunities. As part of this process the
company acquired 15 per cent interests in two joint venture property
development companies - Pathfinder (Scotland) Limited and Pathfinder (River
Quay) Limited. Properties and Recovery 2 are both parties to these joint
venture arrangements. The extraordinary general meeting also authorised the
company to buy back its own shares and subsequently 815,633 shares were
purchased and cancelled pursuant to this authority.



Recovery 1 also has a 50 per cent joint venture interest in mixed use
development sites at Tib Street, Manchester and Clyde Street, Glasgow, its
joint venture partner in these sites being Recovery 2. During 2001, Recovery 1
acquired a 25 per cent interest in the Loch Lomond factory outlets, in which
Properties is a joint venture partner.



In June 2000 Recovery 1 was admitted to OFEX.



Information on Recovery 2

Recovery 2 was incorporated on 13 July 1993 as a BES company, raising
approximately £4.64 million. The business of Recovery 2 was the acquisition,
refurbishment and letting of London residential property on assured tenancies.



In the Spring of 1997 the Recovery 2 Board initiated a programme to dispose of
the company's 192 unit property investment portfolio in order to provide an
exit route for the Recovery 2 shareholders.



Following an extraordinary general meeting of the company in November 1999 the
principal activities of Recovery 2 were extended to include property
development and property trading and the company started to identify new
trading, investment and development opportunities. As part of this process the
Recovery 2 acquired 15 per cent interests in two joint venture property
development companies - Pathfinder (Scotland) Limited and Pathfinder (River
Quay) Limited. Properties and Recovery 1 are both parties to these joint
venture arrangements. The extraordinary general meeting also authorised
Recovery 2 to buy back its own shares and subsequently 850,632 shares were
purchased and cancelled pursuant to this authority.



Recovery 2 also has a 50 per cent joint venture interest in mixed use
development sites at Tib Street, Manchester and Clyde Street, Glasgow, its
joint venture partner in these sites being Recovery 1. Recovery 2 acquired a
25 per cent interest in the Loch Lomond factory outlets, in which Properties
is a joint venture partner.



Background to and Reasons for the Offer

The directors of Pathfinder Properties consider that the acquisition of
Recoveries fits well with their stated strategy of acquiring other BES
property companies, including other Pathfinder companies. Furthermore,
Pathfinder Properties and Recoveries have the same management team and
executive directors and are involved as joint venture partners in a number of
common developments. Pathfinder Properties has previously acquired Pathfinder
Repossessions and Pathfinder Repossessions II. Recovery 1 and Recovery 2 were
the next (and last) Pathfinder companies to be launched  under the BES after
Pathfinder Repossessions II. The acquisition of  Recovery 1 and Recovery 2
would significantly increase the asset base of Pathfinder Properties.



Recovery 1, as a shareholder in Recovery 2  in respect of 132,500 Recovery 2
Shares (representing 2.75 per cent of the issued share capital of that
company), has undertaken to Pathfinder Properties to accept the Share Offer
and not to accept the election for the Limited Cash Alternative if required to
do so by Properties and Recovery 2 has given an equivalent undertaking in
respect of 220,000 shares held in Recovery 1 in respect of the offer for
Recovery 1.





CONDITIONS OF THE OFFER



Each of the Share Offers and Limited Cash Alternatives are subject to the
following conditions:

 1. valid acceptances being received (and not , where permitted, withdrawn) by
    3pm on 30 April 2001 (or such later time(s) and/or date(s) as Pathfinder
    Properties and Nabarro Wells may, subject to the City Code, agree) in
    respect of not less than 90 per cent (or such lower percentage as
    Pathfinder Properties and Nabarro Wells may agree) of Recoveries Shares to
    which the Offer relates, provided that this condition shall not be
    satisfied unless Pathfinder Properties shall have acquired or agreed to
    acquire, whether or not subject to conditions and whether pursuant to the
    Offer or otherwise, Recoveries Shares carrying, in aggregate, more than 50
    per cent of the voting rights then normally exercisable at general
    meetings of Recoveries attributable to Recoveries Shares, including for
    this purpose (except to the extent otherwise agreed with the Panel) any
    such voting rights attaching to any Recoveries Shares unconditionally
    allotted or issued before the Offer becomes or is declared unconditional
    as to acceptances, whether pursuant to the exercise of any outstanding
    conversions or subscriptions rights or otherwise, and for this purpose,
    (i) the expression Recoveries Shares to which the Offer relates shall be
    construed in accordance with sections 428 - 430F of the Act and (ii)
    shares which have been unconditionally allotted shall be deemed to carry
    the voting rights which they carry upon issue;
 2. the passing by the shareholders of Pathfinder Properties of the resolution,
    inter alia, increasing the authorised share capital at the extraordinary
    general meeting of Pathfinder Properties to be held on 26 April 2001;
 3. neither Recoveries nor the Recoveries Directors nor any relevant authority
    having intervened or acted or omitted or declined to act in any way which
    might or would:
     a. make the Offer, its implementation or the acquisition or proposed
        acquisition of any Recoveries Shares by Pathfinder Properties void,
        unenforceable or illegal or otherwise directly or indirectly restrain,
        prohibit, restrict, delay, frustrate or otherwise interfere with the
        implementation of, or impose additional constraints or obligations
        with respect to, or otherwise challenge, the Offer or the acquisition
        of any shares in, or control of, Recoveries by Pathfinder Properties
        including, without limitation, taking any steps which would entitle
        Recoveries or the Recoveries Directors to require Pathfinder
        Properties to dispose of some or all of its Recoveries shares; or
     b. result in a material delay in the ability of Pathfinder Properties, or
        render Pathfinder Properties unable, to acquire some or all of the
        Recoveries Shares; or
     c. require or prevent the divestiture by Recoveries or Pathfinder
        Properties of all or any material part of their respective businesses,
        assets or property, or impose any limitation on the ability of any of
        them to conduct their respective businesses or to own all or a
        material part of their respective assets or property; or
     d. impose any limitation on the ability of Pathfinder Properties or of
        Recoveries to acquire or to hold or to exercise effectively, directly
        or indirectly, any rights of ownership of Recoveries Shares or
        management control of Recoveries; or
     e. otherwise materially adversely affect the business, profits or
        prospects of Recoveries or of Pathfinder Properties;

and all applicable waiting and other time periods during which any relevant
authority could intervene having expired, lapsed or terminated;



 4. all authorisations necessary or appropriate for, or in respect of, the
    Offer or its implementation or the proposed acquisition of any Recoveries
    Shares or control of Recoveries by Pathfinder Properties having been
    obtained in terms and in a form reasonably satisfactory to Pathfinder
    Properties from all relevant authorities and from any person or body with
    whom Recoveries has entered into contractual arrangements and such
    authorisations, together with all authorisations necessary or appropriate
    to carry on any material part of the business of Recoveries remaining in
    full force and effect, and all filings necessary for such purpose having
    been made and all appropriate waiting periods under any applicable
    legislation or regulations having expired or been terminated, and there
    being no notice or intimation of any intention to revoke, or not to renew,
    any of the same and all necessary statutory or regulatory obligation in
    any relevant jurisdiction having been complied with;
 5. there being no provision of any arrangement, agreement, licence or other
    instrument to which Recoveries is a party or by or to which Recoveries or
    any of its assets may be bound, entitled or subject which, in consequence
    of making the Offer or the proposed acquisition by Pathfinder Properties
    of any Recoveries Shares, would or might, to an extent which is material
    to Recoveries, result in:
     a. any monies borrowed by, or other indebtedness (actual or contingent)
        of, Recoveries being or becoming repayable or capable of being
        repayable immediately prior to its stated maturity or the ability of
        Recoveries to borrow monies or incur any indebtedness being withdrawn
        or inhibited; or
     b. the creation of any security interest over the whole or any part of the
        business, property or assets of Recoveries or any such security
        interest (whenever arising or having arisen) becoming enforceable; or
     c. any such arrangement, agreement, licence or instrument being terminated
        or modified, or any action being taken or any obligation arising
        thereunder; or
     d. any interests or business of Recoveries in or with any firm or body or
        person, or any arrangements relating to such interest or business,
        being terminated, modified or affected; or
     e. Recoveries ceasing to be able to carry on business under any name which
        presently does so; or
     f. Any assets of Recoveries being or failing to be disposed of or charged
        or any right arising under which any such asset could be required to
        be disposed of or charged. In any case otherwise than in the ordinary
        course of business; or
     g. The value of Recoveries or its financial or trading position or
        prospects being prejudiced or otherwise modified or adversely affected
        in each case to any material extent:

And no event having occurred which, under the provisions of any arrangements,
agreement, licence, or other instrument to which Recoveries is a party or to
which any of its assets are bound or subject, could result in any of the
circumstances referred to in (a) to (g) of this paragraph 5;



 6. other than as disclosed in this document, Recoveries not having since 31
    December 2000:
     a. issued or authorised or proposed the issue of additional shares of any
        class, or of securities convertible into, or rights, warrants or
        options to subscribe for or acquire, any such shares or convertible
        securities; or
     b. declared, paid, made or proposed to declare, pay or make, any bonus,
        dividend, or other distribution; or
     c. redeemed or purchased any of its own shares or made any change in its
        share capital; or
     d. issued, agreed or proposed the issue of any debentures or made any
        change in its loan capital or incurred any indebtedness or become
        subject to any contingent liability; or
     e. entered into any contract, transaction, arrangement or commitment
        (whether in respect of capital expenditure or otherwise) which is of a
        long term, onerous or unusual nature or which involves or could
        involve an obligation of a nature or magnitude which is material; or
     f. entered into any agreement which consents to the material restriction
        of the scope of the business of Recoveies; or
     g. other than in the ordinary course of business, acquired or disposed of
        any interest in any undertaking or implemented any merger, demerger,
        reconstruction or amalgamation or acquired any material assets or
        undertaken any liability; or
     h. other than in the ordinary course of business, disposed of or
        transferred or created any security interest over any material assets
        or any right, title or interest in any such assets; or
     i. other than in the ordinary course of business, waived or compromised
        any claim which is material; or
     j. entered into or varied any service agreement with any of the Recoveries
        Directors ; or
     k. entered into any agreement or commitment or passed any resolution with
        respect to, or announced an intention to, or a proposal to, effect any
        of the transactions or events referred to in this paragraph 6;
 7. since 31 December 2000:
     a. other than in the ordinary course of business there having been no
        material adverse change or deterioration in the business, financial or
        trading position or profits or prospects of Recoveries;
     b. no litigation, arbitration proceedings, prosecution or other legal
        proceedings or investigations having been instituted or threatened by
        or against or remaining outstanding in respect of Recoveries or to
        which Recoveries is a party (whether as plaintiff or defendant or
        otherwise) and which in any such case is material; and
     c. no contingent or actual liability having arisen or accrued which might
        be likely material or adversely affect Recoveries;
 8. Pathfinder Properties not having discovered that:
     a. Any financial or business information concerning Recoveries contained
        in information publicly disclosed at any time by Recoveries either
        contains a misrepresentation of fact or omits to state a fact
        necessary to make the information contained therein not misleading; or
     b. Recoveries is subject to any liability, contingent or otherwise, which
        is not disclosed in the report and accounts of Recoveries for the 12
        month period ended 31 December 2000

And which is material; and

 9. it being established in terms satisfactory to Pathfinder Properties that
    the Office of Fair Trading or any relevant institute in the United Kingdom
    has not indicated that it is the intention of the Secretary of State for
    Trade and Industry to refer the proposed acquisition of Recoveries by
    Pathfinder Properties or any matter arising therefrom to the Competition
    Commission.



Pathfinder Properties reserves the right to waive, in whole or in part, all or
any of conditions 3 to 9 inclusive, subject to the provisions of the City
Code. If Pathfinder Properties is required by the Panel to make an offer or
offers for Recoveries Shares under Rule 9 of the City Code, Pathfinder
Properties may make such alterations to any of the conditions, including
condition 1, as it may wish or as are necessary to comply with that Rule. The
Offer will lapse unless conditions 2 to 9 inclusive have been fulfilled or (if
capable of waiver) waived by midnight on the 21st day after whichever is the
latter of (a) 30 April 2001 and (b) the date on which condition 1 is fulfilled
(or such later date as Pathfinder Properties may, with the consent of the
Panel, decide). Pathfinder Properties shall be under no obligation to waive or
treat as fulfilled any of the conditions 3 to 9 inclusive by a date earlier
than the date specified above for fulfilment notwithstanding that the other
conditions of the Offer may at such earlier date have been fulfilled or that
there are at such earlier date no circumstances indicating that any such
conditions may not be capable of fulfilment.







For information, contact:

Malcolm Bacchus, Joint CEO, Pathfinder Properties PLC  Tel: [phone]

Robert Lo, Nabarro Wells & Co Ltd   Tel: [phone]

Roland Cornish, Beaumont Cornish Ltd
Tel: [phone]

Issued by:

Andrew Marshall, Marshall Robinson Roe  Tel: [phone]