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Johnson Fry Holdings (JFH)

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Monday 18 October, 1999

Johnson Fry Holdings

Offer Terms for Johnson Fry

JOHNSON FRY HOLDINGS PLC
18 October 1999


Part 2


NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN
OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN


                         Recommended Cash Offer
                                   by
                       Merrill Lynch International
                              on behalf of
                      Legg Mason (UK) Holdings Plc
              a wholly owned subsidiary of Legg Mason, Inc.
                                   for
                        Johnson Fry Holdings PLC

1.   Introduction

The  boards of Legg Mason, Inc. ('Legg Mason') and Johnson Fry  Holdings
PLC  ('Johnson Fry') announce the terms of a recommended cash offer  for
the whole of the issued share capital of Johnson Fry. The Offer will  be
made  by  Merrill  Lynch  International on behalf  of  Legg  Mason  (UK)
Holdings Plc ('Legg Mason UK'), a wholly owned subsidiary of Legg Mason.

The Offer is 275p in cash for each Johnson Fry Share and includes a Loan
Note  Alternative. It values the whole of the issued  share  capital  of
Johnson  Fry  at approximately #41.9 million.  Assuming the exercise  of
all  outstanding options under the Johnson Fry Share Option Schemes, the
Offer  values  Johnson  Fry at approximately #43.3  million.  The  Offer
represents a premium of 47.5 per cent. over the middle market  price  of
186.5p per Johnson Fry Share at the close of business on 26 August 1999,
the day prior to the commencement of the offer period.

2.   Recommendation and Irrevocable Undertakings

The board of Johnson Fry, which has been advised by Donaldson, Lufkin  &
Jenrette International, considers the terms of the Offer to be fair  and
reasonable  and  the  board  of Johnson Fry will  unanimously  recommend
Johnson  Fry Shareholders to accept the Offer.  In providing  advice  to
the board of Johnson Fry, Donaldson, Lufkin & Jenrette International has
taken  into  account  the commercial assessments  of  the  directors  of
Johnson Fry.

The  directors of Johnson Fry have irrevocably undertaken to accept  the
Offer  in respect of their own beneficial holdings of a total of 465,422
Johnson  Fry  Shares, representing approximately 3.1 per  cent.  of  the
issued share capital of Johnson Fry, and a further 1,176,969 Johnson Fry
Shares  over  which they have options, subject to exercise, representing
approximately 7.7 per cent. of the issued share capital of Johnson  Fry.
In  addition, these undertakings also cover an aggregate of 306,564  new
Johnson  Fry  Shares  which may be acquired  by  the  directors  on  the
exercise  of options while the Offer remains open for acceptance.  These
irrevocable undertakings will continue to be binding in the event  of  a
higher offer being made for the Johnson Fry Shares by a competing  third
party.  The  directors  of Johnson Fry hold an  aggregate  of  1,483,533
options,  of  which 1,176,969 are over Johnson Fry Shares  currently  in
issue and are held by the trustee of the Jersey ESOP and the trustee  of
the Gibraltar ESOP, and of which 306,564 are over Johnson Fry Shares yet
to be issued.

In  addition,  Legg  Mason UK has received irrevocable  undertakings  to
accept the Offer in respect of a further:

- 5,400,398 Johnson Fry Shares, representing approximately 35.5  per
  cent.  of  the  issued share capital of Johnson Fry, and,  subject  to
  exercise, over a further 480,930 Johnson Fry Shares held under option,
  representing approximately 3.2 per cent. of the issued share capital of
  Johnson  Fry.  In addition, these undertakings also cover  54,000  new
  Johnson  Fry Shares which may be acquired on the exercise  of  options
  while the Offer remains open for acceptance. The irrevocable undertaking
  to  accept the Offer received in respect of 1,500,000 of the 5,400,398
  Johnson  Fry  Shares  referred to in this sub-paragraph,  representing
  approximately 9.8 per cent. of the issued share capital of Johnson Fry,
  will  cease  to be binding in the event that Legg Mason or any  person
  acting on their behalf makes any market purchases of Johnson Fry Shares,
  unless  such  purchases  take place after  the  seventh  business  day
  following  the despatch of the Offer Document, or, if applicable,  the
  seventh day following the announcement of a revision of the Offer.

- 579,190  Johnson  Fry Shares, representing approximately  3.8  per
  cent.  of  the  issued share capital of Johnson Fry. This  irrevocable
  undertaking  is  subject to the rights of certain  third  parties  and
  accordingly  acceptance of the Offer in respect of these  Johnson  Fry
  Shares  is subject to obtaining the required consents from such  third
  parties.

The  irrevocable  undertakings referred to in  the  preceding  two  sub-
paragraphs will cease to be binding in the event of a higher offer by  a
third  party under which the value of the consideration per Johnson  Fry
Share exceeds the value of the consideration per Johnson Fry Share under
the  Offer  by  a  sum  equal to or greater than 10 per  cent.  ('Higher
Competing Offer') unless, prior to midnight on the fourteenth day  after
the  day  on  which the Higher Competing Offer is made (or, if  earlier,
publicly  announced) a revision of the Offer is announced the  terms  of
which  are  such  that,  if the Higher Competing  Offer  had  been  made
immediately  after  the announcement of the revision,  the  third  party
offer would not have been a Higher Competing Offer.

Accordingly,  and subject to the terms summarised above, Legg  Mason  UK
has received irrevocable undertakings to accept the Offer in respect  of
a  total  of 8,102,909 Johnson Fry Shares (including Johnson Fry  Shares
currently  in  issue but held under option in the Jersey  ESOP  and  the
Gibraltar ESOP), representing in aggregate approximately 53.2 per  cent.
of  the  issued  share capital of Johnson Fry. These  undertakings  also
cover  an  aggregate  of 360,564 new Johnson Fry  Shares  which  may  be
acquired  on  the exercise of options while the Offer remains  open  for
acceptance.

Save  as described above, neither Legg Mason nor any of its subsidiaries
nor,  so  far  as Legg Mason is aware, any party acting in concert  with
Legg  Mason  owns, controls or has options to acquire  any  Johnson  Fry
Shares.

3.   The Offer

The Offer, which will be subject to the conditions and further terms set
out  in  Appendix I to this announcement and to be set out in the  Offer
Document  and  the  Form of Acceptance, will be made  on  the  following
basis:

         for each Johnson Fry Share               275p in cash
                                

The  Offer of 275p per Johnson Fry Share values the issued share capital
of  Johnson  Fry at approximately 3.4 per cent. of Johnson  Fry's  funds
under  management of #1,240 million as at 30 June 1999, or 3.9 per cent.
if EZPUTs of #173 million are excluded.

The board of Johnson Fry does not intend to declare a final dividend  in
respect   of   1999   if  the  Offer  becomes  or  is  declared   wholly
unconditional, although Johnson Fry Shareholders on the register  on  20
August 1999, excluding the trustee of the Jersey ESOP and the trustee of
the Gibraltar ESOP which hold 1,666,039 and 1,057,407 Johnson Fry Shares
respectively  and  which are the subject of dividend  waivers,  will  be
entitled  to  receive the interim dividend of 2p per Johnson  Fry  Share
announced on 5 August 1999 which will be paid on 26 November 1999.

4.   Loan Note Alternative

As  an  alternative  to all or part of the cash consideration  available
under  the Offer, accepting Johnson Fry Shareholders, other than certain
overseas  shareholders, will be entitled to elect to receive Loan  Notes
to be issued by Legg Mason UK on the following basis:

     for each #1 of cash consideration         #1 nominal of Loan
     under the Offer                           Notes

The  Loan Notes, which will be fully guaranteed by Legg Mason,  will  be
issued, credited as fully paid, in amounts and integral multiples of  #1
nominal  value. All fractional entitlements will be disregarded and  not
paid.

The  payment of principal and interest in respect of the Loan Notes will
be guaranteed by Legg Mason. The Loan Notes will bear interest (from the
date  14  days after the date on which the Offer becomes or is  declared
wholly unconditional or if later the date of issue of the relevant  Loan
Notes)  payable semi-annually in arrears on 30 June and 31  December  in
each  year (or, if not a business day in any year, on the first business
day  thereafter) at the rate of 1.0 per cent. per annum  below  the  six
month  London Inter-Bank Offer Rate as determined on the first  business
day  of each interest period.  The first payment will be made on 30 June
2000  in respect of the period from and including the date 14 days after
the  Offer  becomes or is declared wholly unconditional or if later  the
date of issue of the relevant Loan Notes.

Holders  of  the  Loan  Notes will have the right  (subject  to  certain
restrictions) to redeem them for cash at par on 31 December 2000  or  on
any  subsequent interest payment dates.  The Loan Notes may be  redeemed
by  Legg Mason UK on or after 30 June 2001, if more than 75 per cent. of
the  nominal  amount of all of the Loan Notes has been redeemed  or  the
aggregate  nominal  amount of the Loan Notes outstanding  is  less  than
#250,000.   Unless previously redeemed or repurchased,  the  Loan  Notes
will  be  repaid  at par on 31 December 2006.  The Loan  Notes  will  be
transferable  (subject to certain restrictions) but no application  will
be made for them to be listed or dealt in on any stock exchange.

No Loan Notes will be issued unless, at the time the Offer becomes or is
declared  wholly  unconditional,  valid  elections  for  the  Loan  Note
Alternative  will result in the issue of at least #250,000 in  aggregate
nominal  value of Loan Notes, or such smaller amount as Legg  Mason  may
decide. If insufficient elections are received, Johnson Fry Shareholders
who validly elect to receive Loan Notes will instead receive the cash to
which  they would otherwise be entitled in accordance with the terms  of
the Offer.

Further details of the Loan Notes will be set out in the Offer Document.

5.   Background to and Reasons for the Offer

The  acquisition of Johnson Fry by Legg Mason will be a significant step
in  Legg Mason's strategic goal of providing fund management services to
support the long-term savings needs of individual investors outside  the
United  States.   Legg  Mason aims to enhance the  growth  prospects  of
Johnson  Fry's retail focused, high performing fund range by  preserving
its  existing  investment management and business teams while  providing
the company with additional product and service capabilities.

As  a  result of the Offer, Johnson Fry's existing and potential clients
will benefit from:

- continuity of the senior management team which has been responsible
  for the company's growth since it decided to focus on the provision of
  retail fund management services

- continuity  of the investment management team and preservation  of
  the  independence of the investment process, which among other  things
  helped the company be named the 'S&P Micropal Unit Trust Manager of the
  Year, Smaller Groups', based on its 1998 performance

- a common culture with the intertwined goals of consistently high-
  level performance and user-friendly client service.

Legg Mason believes that there are considerable growth opportunities  in
the  UK  retail  fund management sector as a result of  changes  in  the
pattern  of  savings, demographic shifts and changing working practices.
Legg Mason also believes that Johnson Fry is well placed to benefit from
the  UK  government's  planned initiatives in the UK  long-term  savings
market.

6.   Reasons for the board of Johnson Fry recommending the Offer

Over  the  last  three  years Johnson Fry has  undergone  a  significant
restructuring  programme. This involved the disposal or closure  of  all
non-fund management activities and the repositioning of Johnson  Fry  to
focus  on  retail fund management.  During this period the  company  has
achieved  rapid  growth in funds under management  and  recurring  asset
management  revenues while reducing the fixed cost base.  The  board  of
Johnson Fry believes that the business now benefits from:

-    strong and consistent investment performance

-    multi-channel distribution capabilities

-    effective customer service

-    efficient administration.

Johnson Fry considers these to be some of the key attributes required to
ensure  its  future  success  in  the  retail  fund  management  sector.
However,  it  believes that in order to maximise the  potential  of  the
platform that has been created it now needs to be part of a larger group
to  ensure  that  it  is  able  to take full  advantage  of  the  growth
opportunities in the UK retail fund management sector.

After conducting an extensive review of the company's strategic options,
the  board  of  Johnson  Fry  believes that  the  Offer  by  Legg  Mason
represents the best value for Johnson Fry Shareholders. In addition, the
proposed  combination  would benefit the development  of  Johnson  Fry's
business, both from a customer and employee perspective.

As  an  inducement to Legg Mason UK to make the Offer, Johnson  Fry  has
agreed  to pay Legg Mason an inducement fee, subject to applicable  law,
of 1 per cent. of the total value of the Offer in certain circumstances.
The inducement fee is payable if:

- the  formal Offer Document is posted on or before 1 November  1999
  and a third party announces an offer for Johnson Fry which becomes or is
  declared wholly unconditional at any time prior to 8 April 2000; or

- the board of Johnson Fry withdraws or modifies in an adverse manner
  its approval or recommendation of the Offer at any time before the Offer
  either lapses or becomes or is declared unconditional as to acceptances,
  other than in circumstances where Legg Mason makes an offer on or before
  1 November 1999 at a price that is less than 275p per Johnson Fry Share.

Johnson  Fry has also undertaken not to solicit other offers and  if  it
were  to do so it would have to pay damages to Legg Mason. However,  the
amount  of  these  damages  will  be reduced  to  the  extent  that  any
inducement fee is payable by Johnson Fry.

7.   Information on Johnson Fry

Johnson  Fry, which was founded in 1969, is a London-based  retail  fund
management   business  providing  investment  management  services   and
products  to around 83,000 customers. Its products include unit  trusts,
investment  trusts, ISAs, PEPs, private client asset  management  and  a
managed  portfolio  service. The fund management business  has  achieved
impressive  growth since its decision to focus on the retail  market  in
1995.  Total funds under management (excluding EZPUTs) have  risen  from
#412  million at 31 December 1995 to #1,067 million at 30 June 1999,  an
increase  of #655 million or approximately 159 per cent. This represents
a compound annual growth rate of some 31 per cent.

Johnson Fry has demonstrated excellent investment performance across its
range  of  unit  trusts  and  other  retail  investment  products.  This
outstanding performance record has been recognised by industry awards at
both the company and individual fund level. Johnson Fry's New Japan Unit
Trust  is currently the number one-ranked unit trust in its sector since
launch,  and  five of the seven other Johnson Fry unit  trusts  are  top
quartile performers since launch (source: Reuters Hindsight).

Johnson  Fry  distributes its products through IFAs and  direct  to  the
public.  It  also  has its own dedicated Web-site  for  IFA  and  client
servicing  and  sales. Approximately 75 per cent. of Johnson  Fry's  new
business is currently derived from IFAs.

For  the financial year to 31 December 1998, Johnson Fry reported a loss
after  tax  of #1.0 million on revenue of #19.4 million.   Total  equity
shareholders'  funds, at 31 December 1998, were #10.3 million.   At  the
interim  stage,  for  the  six months ended 30 June  1999,  Johnson  Fry
reported  a  loss  after tax of #1.5 million on total  revenue  of  #9.1
million.  Total equity shareholders' funds, at 30 June 1999,  were  #8.5
million.

8.   Information on Legg Mason

Legg  Mason,  whose  headquarters  are  in  Baltimore,  Maryland,  U.S.,
provides investment management, securities brokerage, investment banking
and   related   financial   services   to   individuals,   institutions,
corporations  and  municipalities.  Outside the U.S.,  it  has  existing
operations in London and Geneva.

Legg Mason operates within three main business segments:

- Investment Management: Management of assets for institutional  and
  individual  clients and provision of investment advisory  services  to
  company-sponsored mutual funds

- Securities  Brokerage:  A  wide range of  financial  products  and
  services, including equity and fixed income securities, proprietary and
  non-affiliated  mutual  funds and annuities, distributed  through  its
  branch network

- Investment  Banking:  Equity  and  fixed  income  capital  markets
  businesses, including origination, institutional sales and trading

Legg Mason's investment management activities, and their contribution to
operating results have grown significantly, principally through  organic
growth but also through selective acquisitions, over the past ten years.
Since  its  acquisition of Western Asset Management in 1986, Legg  Mason
has  successfully completed the acquisition of six investment management
companies.

Total  assets under management were $89 billion at 31 March 1999, up  25
per  cent. from $71 billion a year earlier.  Total revenues for the year
ended  31  March  1999  were $1,046 million and net  earnings  were  $89
million. Total stockholders' equity was $554 million at 31 March 1999.

9.   Management and Employees

Legg  Mason  believes  that its acquisition of Johnson  Fry  will  offer
enhanced  career opportunities for Johnson Fry's management  and  staff.
Legg  Mason attaches great importance to the retention of Johnson  Fry's
existing management team, which has been primarily responsible  for  the
implementation of the retail fund management strategy and Johnson  Fry's
superior  investment performance.  Consequently, certain  key  directors
have  signed service contracts, conditional on the Offer being  declared
wholly unconditional, to ensure that they remain with the business after
its acquisition by Legg Mason.

Legg  Mason  has  given assurances to Johnson Fry  that  the  employment
rights of Johnson Fry's employees, including their pension entitlements,
will be fully safeguarded.

10.  Johnson Fry Share Option Schemes

The   Offer   will   extend  to  any  Johnson  Fry  Shares   which   are
unconditionally allotted or issued on or before the date  on  which  the
Offer closes (or such earlier date as Legg Mason UK may, subject to  the
Code,  determine)  including those issued or allotted  pursuant  to  the
exercise  of  options, or other rights granted, under  the  Johnson  Fry
Share Option Schemes prior to the date on which the Offer closes. If the
Offer  becomes or is declared wholly unconditional prior to the date  on
which  the  Offer  closes,  Legg Mason UK intends  to  make  appropriate
proposals to participants in the Johnson Fry Share Option Schemes to the
extent that such options are not exercised.

11.  General

The Johnson Fry Shares will be acquired pursuant to the Offer fully paid
and  free  from  all liens, equitable interests, charges,  encumbrances,
rights  of pre-emption and other interests of any nature whatsoever  and
together  with all rights now or hereafter attaching thereto, including,
without  limitation, the right to receive and retain all  dividends  and
other  distributions (if any) declared, made or payable hereafter,  save
for  the  interim dividend of 2p per Johnson Fry Share  announced  on  5
August  1999  and  payable  on 26 November 1999  to  those  Johnson  Fry
Shareholders  on the register on 20 August 1999, excluding  the  Johnson
Fry Shares held by the trustee of the Jersey ESOP and the trustee of the
Gibraltar  ESOP  which hold 1,666,039 and 1,057,407 Johnson  Fry  Shares
respectively and which are the subject of dividend waivers.

The  availability  of the Offer to persons not resident  in  the  United
Kingdom  may  be  affected  by the laws of the  relevant  jurisdictions.
Persons  who  are  not  resident  in the United  Kingdom  should  inform
themselves about and observe any applicable requirements.

The  Offer  will  be  funded from Legg Mason's  own  internal  financial
resources.  The formal Offer Document setting out details of  the  Offer
will   be  dispatched  to  Johnson  Fry  Shareholders  as  soon  as   is
practicable.  The Offer will be subject to the terms and conditions  set
out  in Appendix I and to the terms and conditions to be set out in  the
Offer Document and the Form of Acceptance.

Enquiries:                             
                                       
LEGG MASON                             JOHNSON FRY
Raymond Mason, Chairman & Chief        David Backhouse, Chairman
Executive Officer                      Rebecca Thomas, Chief Executive
Elisabeth Spector, Senior Vice         Telephone: 0171 451 1180
President
Telephone: 00 1 410 539 0000           
                                       
MERRILL LYNCH INTERNATIONAL            DONALDSON,   LUFKIN  &   JENRETTE
                                       INTERNATIONAL
Richard Slimmon                        Charles Outhwaite
Telephone: 0171 628 1000               Telephone: 0171 655 7539
                                       
                                       BRUNSWICK
                                       Alison Hogan
                                       Telephone: 0171 404 5959

Merrill  Lynch  International, which is  regulated  in  the  UK  by  The
Securities and Futures Authority Limited, is acting exclusively for Legg
Mason and Legg Mason UK and for no one else in connection with the Offer
and  will  not be responsible to anyone other than Legg Mason  and  Legg
Mason  UK  for giving the protections afforded to customers  of  Merrill
Lynch International or for providing advice in relation to the Offer.

Donaldson, Lufkin & Jenrette International, which is regulated in the UK
by  The  Securities and Futures Authority Limited, is acting exclusively
for  Johnson  Fry and for no one else in connection with the  Offer  and
will  not  be responsible to anyone other than Johnson Fry for providing
the  protections afforded to customers of Donaldson, Lufkin  &  Jenrette
International or for giving advice in relation to the Offer.

The Offer will not be made, directly or indirectly, in or into or by the
use  of  the  mails  of, or by any means or instrumentality  (including,
without  limitation, telephonically or electronically) of interstate  or
foreign  commerce of, or through any facilities of a national securities
exchange of, the United States, Canada, Australia or Japan and the Offer
will   not   be   capable  of  acceptance  by  any  such   use,   means,
instrumentality  or  facilities or from or  within  the  United  States,
Canada,  Australia  or Japan.  Accordingly, copies of this  announcement
are  not  being,  and  must  not  be,  mailed  or  otherwise  forwarded,
distributed  or  sent  in,  into  or from  the  United  States,  Canada,
Australia   or   Japan  and  all  persons  receiving  this  announcement
(including nominees, trustees and custodians) must not mail or otherwise
forward,  distribute  or  send it in, into or from  the  United  States,
Canada, Australia or Japan.

This  announcement  does not constitute an offer  or  an  invitation  to
purchase any securities.

Appendix II to this announcement contains the definitions of terms  used
in this announcement.

                                    
                               Appendix I
                Conditions and Further Terms of the Offer
                                    



Part A - Conditions of the Offer

The  Offer, which will be made by Merrill Lynch International on  behalf
of  Legg Mason UK, will comply with the applicable rules and regulations
of  the  London  Stock  Exchange and the Code and will  be  governed  by
English  law.  It will be subject to the jurisdiction of the  Courts  of
England  and Wales and to the terms and conditions set out in the  Offer
Document and related Form of Acceptance.

The Offer is subject to the following conditions:

(a) valid  acceptances  being  received  (and  not,  where  permitted,
    withdrawn) by 3.00 p.m. (London time) on the first closing date of the
    Offer (or such later time(s) and/or date(s) as Legg Mason UK may, with
    the consent of the Panel or in accordance with the Code, decide)  in
    respect of not less than 90 per cent. (or such lesser percentage as Legg
    Mason  UK  may decide) of the Johnson Fry Shares to which the  Offer
    relates, provided that this condition shall not be satisfied unless Legg
    Mason UK and/or any of its wholly-owned subsidiaries shall have acquired
    or  agreed  to acquire, whether pursuant to the Offer or  otherwise,
    Johnson Fry Shares carrying in aggregate more than 50 per cent. of the
    voting rights then normally exercisable at general meetings of Johnson
    Fry.  For the purposes of this condition:
    
    (i)  the  expression 'Johnson Fry Shares to which the Offer relates'
         shall be construed in accordance with sections 428 to 430F of the
         Companies Act; and
         
    (ii) Johnson Fry Shares which have been unconditionally allotted but not
         issued shall be deemed to carry the voting rights which they will    
         carry upon their being issued;
         
(b) the  Office  of Fair Trading in the United Kingdom indicating,  in
    terms satisfactory to Legg Mason UK, that it is not the intention of the
    Secretary  of  State  for Trade and Industry to refer  the  proposed
    acquisition  of Johnson Fry by Legg Mason UK, or any matter  arising
    therefrom or related thereto, to the Competition Commission;
    
(c) to the extent necessary, each of the Personal Investment Authority
    Limited ('PIA'), Investment Management Regulatory Organisation ('IMRO')
    and  The  Securities  and Futures Authority Limited  ('SFA')  having
    confirmed in terms reasonably satisfactory to Legg Mason UK that it has
    no objection to the change of control of each relevant company within
    the Johnson Fry Group or all applicable waiting periods during which the
    PIA, IMRO or the SFA (as the case may be) could raise enquiries and/or
    objections to the proposed change of control having expired;
    
(d) except as disclosed in writing by or on behalf of Johnson  Fry  to
    Legg Mason, Legg Mason UK or its advisers or publicly announced by or on
    behalf of Johnson Fry in any such case prior to 17 October 1999,  no
    government   or   governmental,  quasi-governmental,  supranational,
    statutory, regulatory, environmental or investigative body, court, trade
    agency, association, institution or any other body or person whatsoever
    in  any jurisdiction (each a 'Third Party') having taken, decided to
    take,  instituted, implemented or threatened in writing any  action,
    proceeding, suit, investigation, enquiry or reference, or enacted, made
    or  proposed any statute, regulation, decision or order which  could
    reasonably be expected to:
    
    (i)  require,  prevent or delay the divestiture, or alter the  terms
         envisaged for any proposed divestiture, by any member of the Wider   
         Legg Mason Group or by Johnson Fry or any of its respective          
         subsidiaries or subsidiary undertakings of all or any material       
         portion of their respective businesses, assets or property or impose 
         any material limitation on the ability of any of them to conduct     
         their respective businesses (or any of them) or to own all or any    
         material portion of their respective assets or properties;
         
    (ii) require, prevent or delay the divestiture by any member of  the
         Wider Legg Mason Group of any Johnson Fry Shares;
         
    (iii)impose any material limitation on, or result in a significant
         delay in, the ability of any member of the Wider Legg Mason Group
         directly or indirectly to acquire or to hold or to exercise          
         effectively any rights of ownership in respect of shares or loans or 
         securities convertible into shares or any other securities (or the   
         equivalent) in any member of the Wider Johnson Fry Group or to       
         exercise management control over any such member;
         
    (iv) otherwise  materially adversely affect the business, assets  or
         profits of the Wider Johnson Fry Group;
         
    (v)  make the Offer or its implementation or the acquisition or proposed
         acquisition of any Johnson Fry Shares or other securities in, or     
         control of, Johnson Fry by any member of the Wider Legg Mason Group  
         void, illegal,  and/or unenforceable under the laws of  any  relevant
         jurisdiction, or otherwise, materially directly or indirectly,       
         restrain,restrict, prohibit, delay or otherwise adversely interfere  
         with the same, or impose additional material conditions or           
         obligations with respect thereto, or otherwise materially challenge  
         or require amendment to the terms of the Offer or any such           
         acquisition;
         
    (vi) require  any member of the Wider Legg Mason Group or the  Wider
         Johnson Fry Group to acquire or offer to acquire any shares or other
         securities (or the equivalent) or any interest in any member of the
         Wider Johnson Fry Group or the Wider Legg Mason Group owned by any   
         third party;
         
    (vii)result in any member of the Wider Johnson Fry Group ceasing to
         be able to carry on business under any name under which it presently
         does so to an extent which is material to that member
         
    and  all applicable waiting and other time periods during which  any
    such  Third  Party could take, decide to take, institute,  implement
    or  threaten any action, proceeding, suit, investigation, enquiry or
    reference  or  any  other  step  under  the  laws  of  any  relevant
    jurisdiction in respect of the Offer having expired, lapsed or  been
    terminated;
    
(e) all  necessary  filings  or  applications  having  been  made  in
    connection  with  the  Offer,  and all appropriate  waiting  periods
    (including  extensions  thereof) in respect  of  the  Offer  or  its
    implementation under any applicable legislation or regulations of any
    relevant jurisdiction (including, if applicable, under the United States
    Hart-Scott-Rodino  Anti  Trust Improvements  Act  of  1976  and  the
    regulations thereunder) having expired, lapsed or been terminated (as
    appropriate) and all statutory or regulatory obligations in any relevant
    jurisdiction having been complied with in connection with the Offer or
    the  acquisition by any member of the Wider Legg Mason Group of  any
    shares  or other securities in, or control of, Johnson Fry  and  all
    authorisations,  orders, recognitions, grants,  consents,  licences,
    confirmations, clearances, permissions and approvals ('Authorisations')
    deemed by Legg Mason UK necessary or appropriate for or in response to
    the Offer or the proposed acquisition of any Johnson Fry Shares or other
    securities in, or control of, Johnson Fry by any member of the Wider
    Legg  Mason  Group  having been obtained in  terms  and  in  a  form
    satisfactory to Legg Mason UK (acting reasonably) for all appropriate
    Third Parties or persons with whom any member of the Wider Johnson Fry
    Group  has  entered  into  contractual  arrangements  and  all  such
    Authorisations,  together  with  all  Authorisations  necessary   or
    appropriate to carry on the business of any member of the Wider Johnson
    Fry Group remaining in full force and effect and all appropriate waiting
    periods (including extensions thereof) under any applicable legislation
    and  regulations of any jurisdiction having expired, lapsed or  been
    terminated and all filings necessary for such purpose having been made
    and there being no written notice of any intention to revoke or not to
    renew any of the same at the time at which the Offer becomes otherwise
    unconditional and all necessary statutory or regulatory obligations in
    any jurisdiction having been complied with;
    
(f) except as disclosed in writing by or on behalf of Johnson  Fry  to
    Legg Mason, Legg Mason UK or its advisers or publicly announced by or on
    behalf of Johnson Fry in any such case prior to 17 October 1999, there
    being no provision of any agreement, arrangement, licence, permit or
    other instrument to which any member of the Wider Johnson Fry Group is a
    party or by or to which any such member or any of its assets may  be
    bound, entitled or subject, which in consequence of the Offer or the
    proposed acquisition of any Johnson Fry Shares or other securities in
    Johnson  Fry or because of a change in the control or management  of
    Johnson Fry, could be expected to result in:
    
    (i)  any  monies  borrowed by or any other indebtedness  (actual  or
         contingent) of, or grant available to any such member, being or      
         becoming repayable or capable of being declared repayable immediately
         or earlier than their or its stated maturity date or repayment date  
         or the ability of any such member to borrow moneys or incur any      
         indebtedness being withdrawn or inhibited which is material in the   
         context of the Johnson Fry Group taken as a whole;
         
    (ii) any such agreement, arrangement, licence, permit or instrument or
         the rights, liabilities, obligations or interests of any such member
         thereunder being terminated or adversely modified or affected or any
         onerous obligation or liability arising or any adverse action being
         taken or arising thereunder which is material in the context of the
         Johnson Fry Group taken as a whole;
         
(iii)     any assets or interests of any such member being or falling to
          be disposed of or charged or any right arising under which any such
          asset or interest could be required to be disposed of or charged
          otherwise than, in any such case, in the ordinary course of trade on
          arm's length terms which is material in the context of the Johnson  
          Fry Group taken as a whole;
(iv)      the creation or enforcement of any mortgage, charge or other
          security interest over the whole or any material part of the        
          business, property or assets of any such member, or any such        
          security (whether arising or having arisen) becoming enforceable    
          which is material in the context of the Johnson Fry Group taken as a
          whole;
(v)       the rights, liabilities, obligations or interests of any such
          member in, or the business of any such member with, any person,     
          company, firm or body (or any agreements relating to any such       
          interest or
          business) being terminated, or adversely modified or affected;
(vi)      the value of any such member or its financial or trading position
          being materially prejudiced or materially adversely affected;
(vii)     any such member ceasing to be able to carry on business under
          any name under which it presently does so; or
(viii)    the creation of any material liability, actual or contingent,
          by any such member and  no  event  having occurred which, under any 
          provision  of  any agreement,  arrangement,  licence, permit  or    
          other  instrument  to which any member of the Wider Johnson Fry     
          Group is a party or by  or to  which  any  such  member  or any of  
          its  assets  may  be  bound, entitled  or subject, could result in  
          any of the events referred  to in sub-paragraph (i) to (viii) of    
          this paragraph (f);
    
(g)   except  as disclosed in the annual report and accounts of  Johnson
      Fry  for  the year ended 31 December 1998, or as otherwise  publicly
      announced by Johnson Fry in accordance with the Listing Rules on  or
      prior to 17 October 1999 or as otherwise disclosed to Legg Mason, Legg
      Mason UK or its advisers by or on behalf of Johnson Fry prior to  17
      October 1999, no member of the Wider Johnson Fry Group having, since 31
      December 1998.
    
    (i)  save for Johnson Fry Shares issued pursuant to the exercise  of
         options granted under the Johnson Fry Share Option Schemes, issued,
         authorised or proposed the issue of additional shares of any class;
         
    (ii) save for the grant of options under the Johnson Fry Share Option
         Schemes, issued or agreed to issue, authorised or proposed the issue 
         of securities convertible into shares of any class or rights,        
         warrants or options to subscribe for, or acquire, any such shares or 
         convertible securities;
         
    (iii)recommended, declared, paid or made or proposed to recommend,
         declare, pay or make any bonus, dividend or other distribution       
         whether payable in cash or otherwise;
         
    (iv) save for intra-Johnson Fry Group transactions, merged or demerged
         with or from any body corporate or, to an extent which is material in
         the context of the Wider Johnson Fry Group, acquired or disposed of  
         or transferred, mortgaged or charged or created any security interest
         over any assets or any right, title or interest in any asset         
         (including shares and trade investments) or authorised or proposed or
         announced any intention to propose any merger, demerger, acquisition 
         or any such disposal, transfer, mortgage, charge or security         
         interest;
         
    (v)  save as between Johnson Fry and its wholly-owned subsidiaries, made
         or authorised or proposed or announced an intention to propose any
         material change in its loan capital;
         
    (vi) issued, authorised, or proposed the issue of any debentures  or
         become subject to any material contingent liability or, save for     
         intra-Johnson Fry Group transactions in the ordinary course of       
         business,incurred or increased any material indebtedness;
         
    (vii) save for intra-Johnson Fry Group transactions, purchased,
         redeemed or repaid or announced any proposal to purchase, redeem or
         repay any of its own shares or other securities or reduced or, save  
         as in respect to the matters mentioned in sub-paragraph (i) above,   
         made any other change to any part of its share capital;
         
    (viii)implemented,  or authorised, proposed  or  announced  its
         intention to implement, any material reconstruction, amalgamation,
         scheme, commitment or other transaction or arrangement or entered    
         into or changed the terms of any material contract with any director 
         or senior executive of the Wider Johnson Fry Group otherwise than in 
         the ordinary course of business;
         
    (ix) entered into or varied or authorised, proposed or announced its
         intention to enter into or vary any material contract, transaction or
         commitment (whether in respect of capital expenditure or otherwise)
         which is of a long term, onerous or unusual nature or magnitude or   
         which is or is likely to be materially restrictive on the businesses 
         of any member of the Wider Johnson Fry Group or the Wider Legg Mason 
         Group or which involves or is likely to involve an obligation of such
         a nature or magnitude or which is other than in the ordinary courses 
         of business;
         
    (x)  taken any corporate action or had any legal proceedings started or
         threatened against it for its winding-up, dissolution or             
         reorganisation or  for the appointment of a receiver, administrative 
         receiver, administrator, trustee or similar officer of all or any    
         material part of its assets or revenues or any analogous proceedings 
         in any jurisdiction or had any such person appointed;
         
    (xi) entered into any contract, transaction or arrangement which is or
         would be materially restrictive on the business of any member of the
         Wider Johnson Fry Group;
         
    (xii)waived or compromised any material claim otherwise than in the
         ordinary course of business;
         
    (xiii)entered  into  any contract or agreement  or  passed  any
         resolution or made any offer (which remains open for acceptance) with
         respect to or announced any intention to, or to propose to, effect   
         any of the transactions, matters or events referred to in this       
         condition; or
         
    (xiv)made any material alteration to its memorandum or articles of
         association or other incorporation documents.
         
(h) since 31 December 1998 and save as disclosed in the accounts  for
    the year then ended and save as publicly announced in accordance with
    the  Listing  Rules by Johnson Fry prior to 17 October  1999  or  as
    otherwise disclosed to Legg Mason, Legg Mason UK or its advisers by or
    on behalf of Johnson Fry prior to 17 October 1999:
    
    (i)  no material adverse change or deterioration having occurred in the
         business, assets, financial or trading position or profits which is
         material in the context of the Wider Johnson Fry Group taken as a    
         whole;
         
    (ii) no material litigation, arbitration proceedings, prosecution or
         other legal proceedings to which any member of the Wider Johnson Fry
         Group is a party (whether as a plaintiff, defendant or otherwise) and
         no investigation by any Third Party against or in respect of any     
         member of the Wider Johnson Fry Group having been commenced,         
         announced or threatened in writing by or against or remaining        
         outstanding in respect of any member of the Wider Johnson Fry Group  
         in each case which is
         material in the context of the Wider Johnson Fry Group taken as a    
         whole;
         
    (iii) no material contingent or other liability having arisen or
         become apparent to Legg Mason, Legg Mason UK or its advisers which   
         would reasonably be expected to adversely affect any member of the   
         Wider Johnson Fry Group to an extent which is material in the context
         of the Wider Johnson Fry Group taken as a whole; and
         
    (iv) no  steps having been taken which are likely to result  in  the
         withdrawal, cancellation, termination or material modification of any
         material licence, authorisations and/or approvals held by any member 
         of the Wider Johnson Fry Group;
         
(i)  Save  as disclosed in writing to Legg Mason, Legg Mason UK or  its
    advisers by or on behalf of Johnson Fry, prior to 17 October 1999, Legg
    Mason, Legg Mason UK or its advisers not having discovered:
    
    (i)  that  any  material  financial, business or  other  information
         concerning the Wider Johnson Fry Group as contained in the           
         information publicly disclosed at any time by any member of the Wider
         Johnson Fry Group or its advisers is materially misleading, contains 
         a material misrepresentation of fact or omits to state a fact        
         necessary to make that information not materially misleading in the  
         context of the Wider Johnson Fry Group taken as a whole; or
         
(ii)     any fact or circumstance which materially and adversely affects the
         import of any information material to the Offer in the context of the
         Wider Johnson Fry Group taken as a whole disclosed at any time by or 
        on behalf of any member of the Wider Johnson Fry Group to Legg Mason, 
        Legg Mason UK or its advisers.

For the purposes of these conditions the 'Wider Johnson Fry Group' means
Johnson Fry and its subsidiary undertakings, associated undertakings and
any  other  undertaking  in which Johnson Fry and/or  such  undertakings
(aggregating their interests) have a significant interest and the 'Wider
Legg  Mason  Group'  means  Legg Mason and its subsidiary  undertakings,
associated  undertakings and any other undertaking in which  Legg  Mason
and/or   such   undertakings  (aggregating  their  interests)   have   a
significant  interest  and for these purposes 'subsidiary  undertaking',
'associated  undertaking' and 'undertaking' have the meanings  given  by
the  Companies Act, other than paragraph 20(1)(b) of Schedule 4A to that
Act which shall be excluded for this purpose, and 'significant interest'
means a direct or indirect interest in more than twenty per cent. of the
equity share capital (as defined in that Act).

Legg  Mason UK reserves the right to waive, in whole or in part, all  or
any of the  above conditions, except condition (a).  If Legg Mason UK or
Legg  Mason  is required by the Panel to make an offer for  Johnson  Fry
Shares  under  the provisions of Rule 9 of the Code, Legg Mason  UK  may
make  such  alterations to the above conditions of the Offer,  including
condition  (a), as are necessary to comply with the provisions  of  that
Rule.

The  Offer  will  lapse if it is referred to the Competition  Commission
before 3.00 p.m. (London time) on the first closing date or the time and
date  on  which  the  Offer becomes or is declared unconditional  as  to
acceptances,  whichever is the later. In such circumstances,  the  Offer
will cease to be capable of further acceptance and persons accepting the
Offer and Legg Mason UK shall thereupon cease to be bound by acceptances
delivered on or before the date on which the Offer so lapses.

The Offer will lapse unless all the above conditions have been fulfilled
or (if capable of being waived) waived by 3.00 p.m. (London time) on the
day  falling 21 days after the later of the first closing date  and  the
date  on  which  the  Offer becomes or is declared unconditional  as  to
acceptances  or  such later date as the Panel may agree,  provided  that
Legg  Mason  UK  shall  be under no obligation  to  waive  or  treat  as
fulfilled any of conditions (b) to (i) inclusive by a date earlier  than
the   latest   date   specified  above  for   the   fulfilment   thereof
notwithstanding  that  the other conditions of the  Offer  may  at  such
earlier date have been fulfilled and that there are at such earlier date
no circumstances indicating that any of such conditions may be incapable
of fulfilment.

If  the  Offer  lapses, the Offer will cease to be  capable  of  further
acceptance  and persons accepting the Offer, Merrill Lynch International
and  Legg  Mason  UK  shall thereupon cease to be bound  by  acceptances
delivered on or before the date on which the Offer so lapses.

APPENDIX II


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

'Code'                   The   City   Code   on  Takeovers   and
                         Mergers;
'Companies Act'          The Companies Act 1985, as amended;
'Donaldson, Lufkin &     Donaldson,     Lufkin    &     Jenrette
Jenrette International'  International,  financial  adviser   to
                         Johnson Fry;
'EZPUTs'                 Enterprise Zone Property Unit Trusts;
'Form of Acceptance'     The  form of acceptance relating to the
                         Offer;
'Gibraltar ESOP'         The   Employee  Share  Ownership   Plan
                         Trust  established by Johnson Fry,  the
                         trustee   of  which  is  Valmet   Trust
                         Company  which holds 1,057,407  Johnson
                         Fry   Shares   which  are  subject   to
                         options  granted under the Johnson  Fry
                         No. 2 Executive Share Option Scheme;
'Jersey ESOP'            The   Employee  Share  Ownership   Plan
                         Trust  established by Johnson Fry,  the
                         trustee  of  which  is  Mourant  &   Co
                         Trustees    Limited,    which     holds
                         1,666,039 Johnson Fry Shares which  are
                         principally subject to options  granted
                         under  the  Johnson Fry  1998  Approved
                         Share  Option  Scheme and  the  Johnson
                         Fry   1998   Unapproved  Share   Option
                         Scheme;
'Johnson Fry'            Johnson Fry Holdings PLC;
'Johnson Fry Group'      Johnson   Fry  Holdings  PLC  and   its
                         subsidiaries       and       subsidiary
                         undertakings;
'Johnson Fry             Holders of Johnson Fry Shares;
Shareholders'
'Johnson Fry Shares'     The  existing issued or unconditionally
                         allotted   and   fully  paid   ordinary
                         shares  of 10p each in Johnson Fry  and
                         any   further  such  shares  which  are
                         unconditionally allotted or issued  and
                         fully  paid  up  or credited  as  fully
                         paid  up  (including  pursuant  to  the
                         Johnson  Fry  Share Option Schemes)  on
                         or  before the time at which the  Offer
                         ceases  to  be open for acceptance  (or
                         such  earlier  time, as Legg  Mason  UK
                         may,  with  the Panel's consent  or  in
                         accordance with the Code, decide);
'Johnson Fry Share       The  Johnson Fry Executive Share Option
Option Schemes'          Scheme,   the  Johnson  Fry  Unapproved
                         Executive  Share  Option  Scheme,   the
                         Johnson Fry 1998 Approved Share  Option
                         Scheme,    the   Johnson    Fry    1998
                         Unapproved  Share  Option  Scheme,  the
                         Johnson  Fry  (No. 2)  Executive  Share
                         Option  Scheme  and  the  Johnson   Fry
                         Sharesave Scheme;
'Legg Mason'             Legg Mason, Inc.
'Legg Mason Group'       Legg  Mason  and  its subsidiaries  and
                         subsidiary undertakings;
'Legg Mason UK'          Legg  Mason (UK) Holdings Plc, a public
                         company      limited     by     shares,
                         incorporated in England and  Wales  and
                         a   wholly  owned  subsidiary  of  Legg
                         Mason;
'London Stock Exchange'  The London Stock Exchange Limited;
'Loan Notes'             The  variable rate guaranteed unsecured
                         loan notes 2006 of Legg Mason UK to  be
                         issued   pursuant  to  the  Loan   Note
                         Alternative;
'Loan Note Alternative'  The  alternative  whereby  Johnson  Fry
                         Shareholders   (other   than    certain
                         overseas     shareholders)      validly
                         accepting  the Offer may  exchange  all
                         or  part  of  their holding in  Johnson
                         Fry Shares for Loan Notes;
'Merrill Lynch           Merrill    Lynch   International,    an
International'           unlimited   company   incorporated   in
                         England  and  Wales, financial  adviser
                         and  broker  to  Legg  Mason  and  Legg
                         Mason UK;
' Offer'                 The  recommended offer of 275 pence  in
                         cash  per Johnson Fry  Share to be made
                         by   Merrill  Lynch  International   on
                         behalf of Legg Mason UK to acquire  all
                         of  the  Johnson Fry  Shares  (together
                         with the Loan Note Alternative) on  the
                         terms  and  subject to  the  conditions
                         set  out  in this announcement and  the
                         Form  of  Acceptance  and,  where   the
                         context     admits,    any    revision,
                         variation,    extension   or    renewal
                         thereof;
'Offer Document'         The  document to be sent to Johnson Fry
                         Shareholders containing details of  the
                         Offer;
'the Panel'              The Panel on Takeovers and Mergers;
'United Kingdom' or      The  United  Kingdom of  Great  Britain
'UK'                     and Northern Ireland;
'United States' or       The   United  States  of  America,  its
'U.S.'                   territories and possessions, any  state
                         of  the  United States and the District
                         of   Colombia   and  all  other   areas
                         subject to its jurisdiction;
'#'                      Pound sterling, the lawful currency  of
                         the United Kingdom;
'$'                      United   States  dollar,   the   lawful
                         currency of the United States.

                                                                                                                                                                                                       

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