Acquisition

TBI PLC
27 October 2004




                                       TBI PLC


                    Proposed Acquisition of Alterra Interests
                                         in
                                    London Luton

TBI is one of the UK's leading airport operators.  It owns and/or operates
London Luton, Belfast International and Cardiff International airports.  TBI
also owns and/or operates a number of overseas airports and airport-related
businesses.  London Luton is operated, managed, and developed under a concession
agreement with Luton Borough Council


                                     HIGHLIGHTS

-    Proposed acquisition of the remaining 28.6% Alterra Interests in London 
     Luton's share capital not already owned by TBI for approximately 
     £67.3 million in cash, net of approximately £2.7 million in Loan Notes to 
     be acquired by TBI, and 14,925,372 new TBI Shares valued at approximately 
     £10.7 million

-    Completion of the transaction is subject to Shareholder approval and
     certain financing conditions

-    Acquisition is in line with the Board's stated strategy of acquiring
     and operating regional airports where it can add value for Shareholders

-    Full control of London Luton will enable TBI to adopt a broader range of 
     strategies for its key asset, as well as giving it full access to London
     Luton's cash flows for the first time.  This should also allow TBI to 
     improve the enlarged group's overall financing structure

-    London Luton is well placed to continue to capitalise on the rise in
     low-cost travel and a shortage of runway capacity in the South East of 
     England.  Since TBI acquired its initial stake in London Luton, passenger 
     numbers at London Luton have grown from approximately 4.4 million in the 
     year to 31 March 1999 to approximately 6.9 million in the year to 31 March 
     2004.  The Government's recent White Paper provides planning guidance for 
     London Luton to expand to up to 30 million passengers per year using its 
     existing runway

-    In the year to 31 March 2004, London Luton generated EBITDA of £22.1 
     million* on turnover of £68.7 million and handled approximately 6.9 million
     passengers.  Based on new route announcements made by airlines, although 
     not yet flying, passenger numbers should increase significantly over the 
     next year


*    After payment by London Luton of £1.4 million to TBI under a technical 
     services agreement



Keith Brooks, Chief Executive, comments:

'This is an important transaction for TBI which will allow us to realise fully
London Luton's potential as London's fourth airport, to capitalise on the
growing demand for air travel and low cost travel in particular.  It will also
provide us for the first time with greater financial flexibility.  The
Acquisition firmly underpins the Board's stated strategy and focus on maximising
Shareholder value from the group's unique portfolio of airport assets.'

                                                                 27 October 2004



ENQUIRIES:


TBI                                                  Tel:  [phone]
Keith Brooks, Chief Executive
Caroline Price, Finance Director

Dresdner Kleinwort Wasserstein                       Tel: [phone]
Charlie Batten
Michael Covington

College Hill                                         Tel: [phone]
Justine Warren






Dresdner Kleinwort Wasserstein Limited ('Dresdner Kleinwort Wasserstein'), which
is authorised and regulated by the Financial Services Authority, is acting for
TBI and for no-one else in connection with the contents of this announcement and
will not be responsible to anyone other than TBI for providing the protections
afforded to customers of Dresdner Kleinwort Wasserstein, or for affording advice
in relation to the contents of this announcement or any matters referred to
herein.




                    PROPOSED ACQUISITION OF ALTERRA INTERESTS
                                       IN
                                  LONDON LUTON


INTRODUCTION

TBI is pleased to announce that it has reached agreement with Alterra to acquire
Alterra (UK), the company holding the Alterra Interests of 28.6% in the share
capital of London Luton, which TBI does not already own. Pursuant to the
Acquisition, TBI will also acquire the Loan Notes for a consideration equal to
their par value plus accrued interest.  Alterra Partners, the ultimate parent
company of Alterra, is a 50:50 joint venture between Bechtel and Singapore
Changi Airport Group.

The consideration comprises cash of approximately £67.3 million and the issue to
Alterra of 14,925,372 new TBI Shares valued at £10.7 million, based on the
closing mid-market price of TBI Shares on the business day prior to this
announcement.  In addition TBI will pay approximately £2.7 million to acquire
the Loan Notes.  TBI expects to finance these amounts from a mixture of its
existing resources and new bank facilities.  Further details of the other terms
of the Acquisition are set out below.

As LLAG is a subsidiary of TBI and due to the size of the Alterra Interests, the
Acquisition is a related party transaction under the Listing Rules of the UKLA.
Completion is therefore subject to the approval of Shareholders in general
meeting, as well as no material adverse change in TBI, as contemplated by the
financing arrangements to be put in place in respect of the Acquisition, having
occurred.

A circular convening the relevant shareholder meeting, providing further details
of the Acquisition, explaining why the Board considers the Acquisition to be in
the best interests of Shareholders as a whole and recommending that Shareholders
vote in favour of the Acquisition will be despatched to Shareholders shortly.


Benefits of the Acquisition

The Board's strategy has long included the goal of achieving, wherever
desirable, full ownership and operational control of the airports in which TBI
is involved as this enables the Company, in the Board's view, to maximise value
for its Shareholders.  In particular, it allows the Board most effectively to
plan investment in, divestment of and financing of TBI's assets.

Following the acquisition of AGI (and, with it, TBI's initial 25% interest in
London Luton) in 1999, it has been the Board's aim to acquire full ownership of
London Luton and full control of the airport's cash flows.

Since TBI took operational control of London Luton in 2001, its performance has
demonstrated the benefits of TBI's development strategy for London's fourth
airport.  The Board believes that London Luton has excellent potential to
deliver enhanced profits in future years from its existing low-cost routes and
from new traffic, driven by the structural shortage of runway capacity in the
South East of England, and from an increasing propensity to travel by air.

Significantly in this regard, the Government has recently confirmed in its White
Paper 'The Future of Air Transport' that its first priority is to make best use
of the existing runways, including the remaining capacity at London Luton and
London Stansted specifically.  The paper noted that London Luton currently
handles about seven million passengers per annum.  The Government's forecasts
suggest that there would be sufficient demand to justify expansion of London
Luton to the full potential of its single runway - around 30 million passengers
per annum and 240,000 air traffic movements - in the period up to 2030, even
with two new runways under consideration at other South East airports.

London Luton is the principal base for easyJet, one of Europe's leading low-cost
airlines.  As announced by TBI on 22 July 2004, easyJet confirmed further
significant expansion at the airport which will involve an increase in its
capacity of 25% by adding three new aircraft. London Luton has also been
successful in attracting other low-cost traffic to the airport as well as
maintaining a strong schedule of charter traffic, despite the structural changes
to the holiday travel markets.  On 22 July 2004, Ryanair announced that it was
to base four additional aircraft at the airport.  This very substantial increase
in traffic from easyJet and Ryanair has not yet commenced service and
accordingly the benefit of any extra revenue is not expected to impact the
current financial year.  London Luton should also benefit from yield enhancement
as new routes, subject to incentivisation deals, mature over the next few years
onto higher aeronautical tariffs.

The Board believes the key driver of London Luton's performance will continue to
be the increase in low-cost passenger numbers.  The Board sees the planning
limit of 30 million passengers per annum recommended in the White Paper as an
excellent opportunity for London Luton to continue to grow strongly.  London
Luton already plans to invest £30 million in the next few years to accommodate
up to 12 million passengers.


In summary, the Acquisition will:

>     remove any third party shareholder rights over London Luton thereby
      increasing TBI's flexibility with regards to future investment in London 
      Luton;

>     allow the TBI group as a whole to be financed more efficiently;

>     permit Shareholders to benefit fully from the strategies the Board may
      implement for London Luton, such as seeking an extension to the concession
      agreement as a pre-condition to making significant capital investments;

>     provide Shareholders with the full financial benefit of any increases in
      passenger numbers particularly as route development incentives expire;

>     enable TBI to pursue procurement and other commercial deals across all
      its UK airport portfolio without constraint; and

>     bring LLAG into TBI's UK tax group as ownership is increased beyond 75%.



FURTHER INFORMATION ON LONDON LUTON

London Luton is located approximately 30 miles from Central London and is one of
the four principal commercial airports serving London and the South East of
England.  London Luton serves a catchment area of 13.2 million people within 50
miles of the airport and, according to CAA statistics, is presently the eighth
largest airport in the United Kingdom, measured by passenger flow numbers.
LLAO, a wholly-owned subsidiary of LLAG, operates the airport under a concession
agreement through to 2028 with Luton Borough Council for which it pays a
concession fee based on the throughput of passengers and cargo.

In the year to 31 March 2004, the LLAG Group generated turnover of £68.7
million, EBITDA of  £22.1 million (after payment of £1.4 million to TBI under a
technical services agreement) and profit before tax of £7.5 million, after
exceptional costs of £2.0 million.  The net liabilities of LLAG Group as at 31
March 2004 were £8.4 million. These amounts differ slightly from the
consolidated figures reported by TBI due to allocation of overheads and similar
items.


FINANCIAL EFFECTS OF THE ACQUISITION

At Completion TBI will pay cash of £70 million to acquire the Alterra Interests
and the Loan Notes and will issue 14,925,372 new TBI Shares to Alterra
representing approximately 2.6% of the enlarged share capital.  TBI expects to
finance the cash element from its existing cash resources and new bank
facilities.

On Completion, TBI will capitalise the goodwill arising from the Acquisition
which is expected to be in the region of £82.3 million depending on the LLAG
Group's net assets at Completion.  TBI has fully consolidated the results of the
LLAG Group in its financial statements since 1 April 2001, recognising the
Alterra Interests as a deduction from its profit after tax (£1.5 million in the
year ended 31 March 2004); and its balance sheet reserves (£17.3 million as at
31 March 2004).  On Completion TBI will eliminate the Alterra Interests in its
reserves and take into account the cash and equity consideration paid to
Alterra.  TBI currently accounts for the Loan Notes as third party indebtedness
in its consolidated accounts and this amount will be cancelled on consolidation
following Completion.  This will result in an annual reduction of approximately
£0.3 million in TBI's consolidated interest expense.

The Board expects the Acquisition to be dilutive to earnings per share in the
near term.  However, as referred to earlier, it believes that there will be
significant strategic and financing benefits in the future from obtaining full
control of London Luton.  In particular, TBI will also be able to access fully
London Luton's cash flows for the first time.

References to the anticipated effect of the Acquisition on TBI's future earnings
per share should not be interpreted as a profit forecast nor should this
statement be interpreted to mean that the future earnings per share of TBI
following the Acquisition will necessarily be more or less than the historical
published earnings per share.


OTHER TERMS OF THE ACQUISITION

TBI will pay accrued interest on the Loan Notes up to Completion, which
currently stands at some £0.4 million and accrues at the rate of £822 per day.
If Completion does not occur for any reason other than for any failure to
complete on the part of the Seller, TBI will be required to pay a fee of some
£0.3 million to the Seller.  Alterra has agreed not to dispose of the TBI Shares
received as consideration for a period of three months from Completion.

Certain of the Shareholders in TBI have irrevocably undertaken to vote in favour
of the resolution to approve the Acquisition to be proposed at the extraordinary
general meeting of the Company in respect of TBI Shares representing
approximately 19.2% of the Company's issued share capital.



CURRENT TRADING

In the Company's pre-close trading update announced on 7 October 2004, the Board
confirmed that trading for the first half was in line with its expectations.
Since this time, the growth in passenger traffic to both domestic and European
destinations, which characterised the initial weeks of the period, has
continued.  Whilst low-cost travel remained the driver of volume growth, TBI has
continued to see passenger traffic increase across all types of passenger
traffic at its four European airports, which is encouraging in what remains a
competitive industry environment generally.

Earlier in the year the Board highlighted its intention to dispose of TBI's
non-core assets in Bolivia and its airport services business in the US.  The
disposal process for the airports in Bolivia continues to progress well.  The
Board hopes to be able to announce the disposal of its airport services business
in the near future.



ENQUIRIES:

TBI                                                   Tel:  [phone]
Keith Brooks, Chief Executive
Caroline Price, Finance Director

Dresdner Kleinwort Wasserstein                        Tel:  [phone]
Charlie Batten
Michael Covington

College Hill                                          Tel:  [phone]
Justine Warren




Dresdner Kleinwort Wasserstein, which is authorised and regulated by the
Financial Services Authority, is acting for TBI and for no-one else in
connection with the contents of this announcement and will not be responsible to
anyone other than TBI for providing the protections afforded to customers of
Dresdner Kleinwort Wasserstein, or for affording advice in relation to the
contents of this announcement or any matters referred to herein.


                                           DEFINITIONS


'Acquisition'                              the proposed acquisition by TBI of Alterra (UK) pursuant to  a
                                           conditional agreement dated 27 October 2004 between the Seller
                                           and TBI


'AGI'                                      Airport Group International Holdings, LLC


'Alterra' or 'Seller'                      Alterra Luton Holdings Limited, which is ultimately owned by
                                           Alterra Partners, a 50:50 joint venture between Bechtel and
                                           Singapore Changi Airport Group


'Alterra Interests'                        the 28,571 ordinary shares of £1 each and the 1,478,286
                                           redeemable shares of £1 each in LLAG, which represent
                                           respectively 28.6% of the ordinary shares and redeemable shares
                                           in issue currently held by Alterra (UK)


'Alterra (UK)'                             Alterra Luton (U.K.) Limited, a wholly-owned subsidiary of
                                           Alterra and holder of the Alterra Interests and Loan Notes


'Bechtel'                                  Bechtel Enterprises Holdings, Inc.


'Completion'                               completion of the Acquisition


'Directors' or 'Board'                     the board of directors of the Company


'Dresdner Kleinwort Wasserstein'           Dresdner Kleinwort Wasserstein Limited


'EBITDA'                                   operating profit before goodwill amortisation, depreciation and
                                           exceptional items


'Listing Rules'                            the rules and regulations made by the UK Listing Authority
                                           under Part VI of the Financial Services and Markets Act 2000 as
                                           amended from time to time


'LLAG Group'                               LLAG and its subsidiaries from time to time


'LLAO'                                     London Luton Airport Operations Limited, a wholly-owned
                                           subsidiary of LLAG and the company to which the concession to
                                           operate London Luton was granted


'Loan Notes'                               £2,729,142 in nominal value of the secured loan notes 2016 of
                                           LLAG constituted by a deed poll dated 20 August 1998, as
                                           amended by supplemental deeds dated 18 August 2000 and 30
                                           September 2002 currently held by Alterra (UK)


'London Luton' or 'LLAG'                   London Luton Airport or, as the context requires its holding
                                           company, London Luton Airport Group Limited


'Luton Borough Council'                    The Council of the Borough of Luton


'Shareholders'                             holders of TBI Shares


'Singapore Changi Airport Group'           Singapore Changi Airport Enterprise Pte Limited


'TBI' or the 'Company'                     TBI plc


'TBI Shares'                               ordinary shares of 10p each in the capital of the Company


'UKLA'                                     the Financial Services Authority acting in its capacity as the
                                           competent authority for the purposes of Part VI of the
                                           Financial Services and Markets Act 2000 as amended from time to
                                           time








                      This information is provided by RNS
            The company news service from the London Stock Exchange