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Peterhouse Group PLC (PHS)

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Friday 28 May, 2004

Peterhouse Group PLC

Jackson/Foster Statement

Peterhouse Group PLC
28 May 2004


Immediate Release                                               28 May 2004




                      Peterhouse Group Plc ('Peterhouse')

             Statement by David Jackson and Simon Foster regarding

               the Offer by Babcock International PLC ('Babcock')



David Jackson and Simon Foster note today's announcement by Babcock that it has
received only 47.2 per cent. acceptances of the existing issued share capital of
Peterhouse since it announced the Offer on 22 March 2004.



Since the Offer was announced the Babcock share price has fallen more than 12.5
per cent. resulting in a significant fall in the current value of the Offer.
The current value is 201.6p per Peterhouse share (including the right to receive
the Peterhouse final dividend of 4.0p) which only represents a 15.5 per cent.
premium to the Peterhouse share price of 174.5p immediately prior to
commencement of the Offer period.



Babcock has chosen not to revise its Offer to a level that in our opinion would
recognise the ongoing value of the Peterhouse businesses and their prospects.
In particular, in our view it fails to fully value the benefit of the
anticipated cash settlement for the transfer of the Group's rail maintenance
contracts.  We recommend that Peterhouse shareholders await the announcement of
the outcome of these negotiations which the Peterhouse Board confirmed on 21 May
2004 were at an advanced stage.  We anticipate this settlement and the transfer
of the relevant contracts, people and assets to Network Rail will have a
material benefit on the cash flow and indebtedness of the Group during 2004.
Babcock has today made a binding commitment (in the absence of a competitive
situation arising) not to increase the Offer.



We strongly urge rejection of the Offer as it continues to undervalue
Peterhouse.



Shareholders are reminded that since the Offer has failed to become
unconditional as of 27 May 2004, any Peterhouse shareholder who has already
accepted is entitled to withdraw his/her acceptance by writing to Computershare
Investor Services PLC, PO Box 859, The Pavilions, Bridgewater Road, Bristol BS99
1XZ.





Enquiries:


David Jackson, Executive Chairman                            Tel:  01422 374757
Simon Foster, Director



David Jackson and Simon Foster accept responsibility for the information
contained in this announcement.  To the best of the knowledge and belief of
David Jackson and Simon Foster (who have taken all reasonable care to ensure
that such is the case), the information contained in this announcement for which
they accept responsibility is in accordance with the facts and does not omit
anything likely to affect the import of such information.


                      This information is provided by RNS
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