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Rea Brothers Group (RBG)

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Wednesday 21 July, 1999

Rea Brothers Group

Rec. Offer by Close Bros -Pt2

REA BROTHERS GROUP PLC
21 July 1999


Part 2

                                 APPENDIX I

              Conditions and certain further terms of the Offer

The  Offer, which will be made by Schroders on behalf of Close Brothers, will
comply  with  the  City Code, will be governed by English  law  and  will  be
subject  to  the jurisdiction of the courts of England and on the  terms  and
subject  to the conditions set out below and as set out in the Offer Document
and Form of Acceptance.

                       Part A: Conditions of the Offer

The Offer will be subject to the following conditions:

(a)  valid  acceptances being received (and not, where permitted,  withdrawn)
     by  not later than 3.00pm (London time) on the first closing date of the
     Offer  (or  such  later time(s) and/or date(s) as  Close  Brothers  may,
     subject  to the rules of the City Code, decide) in respect of  not  less
     than  90  per  cent.  (or such lesser percentage as Close  Brothers  may
     decide)  in  nominal  value of Rea Brothers Shares to  which  the  Offer
     relates, provided that this condition will not be satisfied unless Close
     Brothers (together with any other member of Close Brothers Group)  shall
     have  acquired or agreed to acquire (pursuant to the Offer or otherwise)
     Rea  Brothers Shares carrying in aggregate more than 50 per cent. of the
     voting  rights  then normally exercisable at a general  meeting  of  Rea
     Brothers, including for this purpose (to the extent, if any, required by
     the  Panel) any such voting rights attributable to or attaching  to  any
     Rea  Brothers Shares which have been unconditionally allotted or  issued
     before  the date on which the Offer becomes or is declared unconditional
     as  to  acceptances, whether pursuant to the exercise of  conversion  or
     subscription rights or otherwise, and for the purpose of this condition:

    (i)  the  expression  'Rea  Brothers Shares to which the  Offer  relates'
         shall  be construed in accordance with sections 428 to 430F of  the
         Companies Act; and
    (ii) Rea  Brothers Shares which have been unconditionally allotted  shall
         be  deemed  to carry the voting rights which they will  carry  upon
         issue;

(b)  the London Stock Exchange agreeing to admit to the Official List the New
     Close  Brothers  Offer Shares and (unless and to the  extent  the  Panel
     agrees  otherwise) such admission becoming effective in accordance  with
     paragraph  7.1 of the Listing Rules or (if determined by Close  Brothers
     and  subject to the consent of the Panel) agreeing to admit such  shares
     to  the  Official List subject only to (i) the allotment of such  shares
     and/or  (ii) the Offer becoming or being declared unconditional  in  all
     respects;

(c)  the  FSA  having notified its agreement in writing on terms satisfactory
     to Close Brothers that it does not object to any person who will,
     pursuant to the Offer and/or pursuant to the acquisition or proposed
     acquisition of any shares in, or control of, Rea Brothers Limited or any
     other member of the Rea Brothers Group or (where the effect could
     reasonably be material in  the context of the Wider Rea Brothers Group)
     any other member of the Wider Rea Brothers Group regulated under the
     Banking Act 1987 by Close Brothers, become a parent controller of Rea
     Brothers Limited for the purposes of the Banking Act 1987, or the
     period allowed under such Act for the FSA to notify any objections to any
     such person becoming a parent controller having expired without
     notification of such objection;

(d)  the FSA on behalf of the SFA having notified its agreement in writing on
     terms satisfactory to Close Brothers to the acquisition of any shares in
     or  proposed acquisition of any shares in, or change of controller  (for
     the  purpose  of the Rules of the SFA) of Rea Brothers Limited  and  any
     other  member  of  the  Rea Brothers Group or (where  the  effect  could
     reasonably  be material in the context of the Wider Rea Brothers  Group)
     any  other member of the Wider Rea Brothers Group regulated by the  SFA,
     or  the  relevant period allowed under the Rules of the SFA for  SFA  to
     notify  any  objections to any such person becoming a controller  having
     expired without notification of such objection;
     
(e)  the  FSA  on behalf of IMRO having notified its agreement in writing  on
     terms satisfactory to Close Brothers to the acquisition of any shares in
     or  proposed acquisition of any shares in, or change of controller  (for
     the   purpose  of  the  Rules  of  IMRO)  of  Rea  Brothers  (Investment
     Management)  Limited and any other member of the Rea Brothers  Group  or
     (where  the  effect could reasonably be material in the context  of  the
     Wider  Rea  Brothers Group) any other member of the Wider  Rea  Brothers
     Group  regulated by IMRO, or the relevant period allowed under the Rules
     of IMRO for IMRO to notify any objections to any such person becoming  a
     controller having expired without notification of such objection;
     
(f)  the FSA on behalf of the PIA having notified its agreement in writing on
     terms satisfactory to Close Brothers to the acquisition of any shares in
     or  proposed acquisition of any shares in, or change of controller  (for
     the  purpose of the Rules of the PIA) of Rea Brothers Financial Services
     Limited  or  any other member of the Rea Brothers Group  or  (where  the
     effect  could  reasonably be material in the context of  the  Wider  Rea
     Brothers  Group)  any  other  member of the  Wider  Rea  Brothers  Group
     regulated by PIA, or the relevant period allowed under the Rules of  the
     PIA  for  PIA  to  notify any objections to any such person  becoming  a
     controller having expired without notification of such objection;
     
(g)  the  Isle  of  Man Financial Supervision Commission having notified  its
     agreement  in  writing on terms satisfactory to Close  Brothers  to  the
     acquisition of any shares in or proposed acquisition of any  shares  in,
     or  change of control of Rea Brothers (Isle of Man) Limited or any other
     member  of  the Rea Brothers Group or (where the effect could reasonably
     be  material in the context of the Wider Rea Brothers Group)  any  other
     member  of  the Wider Rea Brothers Group regulated by the  Isle  of  Man
     Financial Supervision Commission, or the relevant period allowed for the
     Isle of Man Financial Supervision Commission to notify any objections to
     any   such   person   becoming  a  controller  having  expired   without
     notification of such objection;
     
(h)  the  Cayman Monetary Authority having notified its agreement in  writing
     on terms satisfactory to Close Brothers to the acquisition of any shares
     in  or  proposed acquisition of any shares in, or change of  control  of
     Rea  Brothers  (Cayman) Limited or any other member of the Rea  Brothers
     Group  or (where the effect could reasonably be material in the  context
     of  the  Wider  Rea Brothers Group) any other member of  the  Wider  Rea
     Brothers  Group  regulated  by the Cayman  Monetary  Authority,  or  the
     relevant period allowed for the Cayman Monetary Authority to notify  any
     objections  to  any  such  person becoming a controller  having  expired
     without notification of such objection;
     
(i)  the Guernsey Financial Services Commission having notified its agreement
     in writing on terms satisfactory to Close Brothers to the acquisition of
     any  shares  in or proposed acquisition of any shares in, or  change  of
     control  of  (i)  Rea  Brothers (Guernsey)  Limited  (ii)  Rea  Brothers
     (Guernsey)   Fund   Managers  Limited  (iii)  Rea  Brothers   (Guernsey)
     Investment  Management  Limited and (iv) any other  member  of  the  Rea
     Brothers Group or (where the effect could reasonably be material in  the
     context  of the Wider Rea Brothers Group) any other member of the  Wider
     Rea   Brothers  Group  regulated  by  the  Guernsey  Financial  Services
     Commission,  or  the relevant period allowed for the Guernsey  Financial
     Services Commission to notify any objections to any such person becoming
     a controller having expired without notification of such objection;
     
(j)  all  other  relevant  regulators (as defined in  Regulation  46  of  the
     Investment Services Regulations 1995) having notified their agreement in
     writing  on  terms  satisfactory to Close Brothers in  respect  of  each
     person  who  will,  pursuant  to  the  Offer  and/or  pursuant  to   the
     acquisition  or proposed acquisition of  any shares in, or  control  of,
     Rea  Brothers  or  any  other member of the  Wider  Rea  Brothers  Group
     regulated by such regulator(s) by Close Brothers, become a controller of
     Rea Brothers or any other member of the Rea Brothers Group or (where the
     effect  could  reasonably be material in the context of  the  Wider  Rea
     Brothers Group) any other member of the Wider Rea Brothers Group for the
     purposes  of  those  Regulations,  or the  period  allowed  under  those
     Regulations for such relevant regulator to notify any objections to  any
     such person becoming a controller having expired without notification of
     such objection;
     
(k)  no   government   or  governmental,  quasi-governmental,  supranational,
     statutory,  regulatory, administrative or investigative body,  authority
     (including any anti-trust or merger control authorities), trade  agency,
     association,  institution,  court, professional  or  environmental  body
     whatsoever in any jurisdiction (each a 'Third Party') having instituted,
     implemented  or threatened, any action, proceeding, suit, investigation,
     enquiry  or  reference or having made, proposed or enacted any  statute,
     regulation,  decision or order or taken any other steps or required  any
     action to be taken which would or might reasonably be expected to:

     (i)  make the Offer or its implementation or the acquisition or proposed
          acquisition by any member of Close Brothers Group of any or all  of
          the Rea Brothers Shares, or the proposed acquisition of control  of
          Rea  Brothers  or  any other member of the Rea  Brothers  Group  or
          (where  the  effect could reasonably be material in the context  of
          the  Wider  Rea  Brothers Group) or any member  of  the  Wider  Rea
          Brothers  Group  by any member of the Close Brothers  Group,  void,
          illegal  or  unenforceable,  or materially  restrict,  prohibit  or
          otherwise,  directly or indirectly, delay, challenge  or  otherwise
          interfere with the implementation of, or impose additional material
          conditions  or obligations with respect to, or otherwise  challenge
          or  require amendment to the Offer or the acquisition of any or all
          of  the Rea Brothers Shares or control of Rea Brothers or any other
          member  of  the  Rea  Brothers Group or  (where  the  effect  could
          reasonably  be  material in the context of the Wider  Rea  Brothers
          Group)  or any member of the Wider Rea Brothers Group by any member
          of Close Brothers Group;
    
    (ii)  require,  materially delay or prevent the divestiture or  materially
          alter  the  terms  envisaged for such proposed divestiture  by  any
          member  of  the Close Brothers Group or by any member  of  the  Rea
          Brothers Group or (where the effect could reasonably be material in
          the  context of the Wider Rea Brothers Group) or any member of  the
          Wider  Rea Brothers Group 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 any portion  of
          their  respective  businesses  or  to  own  any  portion  of  their
          respective assets or property or any material part of them;

    (iii) impose  any  material limitation on, or result in a  material  delay
          in,  the  ability  of  any member of the Close  Brothers  Group  to
          acquire, directly or indirectly, or to hold or exercise effectively
          all or any rights of ownership in respect of Rea Brothers Shares or
          other  shares or securities in any member of the Rea Brothers Group
          or (where the effect could reasonably be material in the context of
          the  Wider  Rea  Brothers Group) or any member  of  the  Wider  Rea
          Brothers  Group  or to exercise management control  over  any  such
          member;

    (iv)  save  pursuant  to  the Offer or Part XIIIA of  the  Companies  Act,
          require  any member of the Close Brothers Group or the Rea Brothers
          Group to acquire or offer to acquire any shares or other securities
          in  any member of the Rea Brothers Group or (where the effect could
          reasonably  be  material in the context of the Wider  Rea  Brothers
          Group)  or any member of the Wider Rea Brothers Group owned by  any
          third party;

    (v)   result,  directly or indirectly, in a material delay in the  ability
          of  any  member  of Close Brothers Group, or render any  member  of
          Close  Brothers  Group unable, to acquire some or all  of  the  Rea
          Brothers Shares;

    (vi)  result  in any member of the Rea Brothers Group or (where the effect
          could  reasonably  be  material in the context  of  the  Wider  Rea
          Brothers  Group) or any member of the Wider Rea Brothers  Group  or
          the  Wider  Close  Brothers Group ceasing to be able  to  carry  on
          business under any name under which it presently does so; or

    (vii) otherwise  materially and adversely affect the business,  assets  or
          profits of any member of the Wider Close Brothers Group or  of  the
          Rea  Brothers  Group  or  (where the  effect  could  reasonably  be
          material  in  the context of the Wider Rea Brothers Group)  or  any
          member of the Wider Rea Brothers Group; and
    
    all  applicable  waiting and other time periods during which  any  Third
    Party  could  decide  to  institute, implement or  threaten  any  action,
    proceeding,  suit,  investigation, enquiry or reference  having  expired,
    lapsed or been terminated;

(l)  all  necessary  notifications  or  filings  having  been  made  and  all
     appropriate  waiting periods (including any extension(s) thereof)  under
     any  applicable  legislation or regulation in  any  jurisdiction  having
     expired,  lapsed or terminated and all necessary statutory or regulatory
     obligations  in  respect  of the Offer in any jurisdiction  having  been
     complied  with  and  all material authorisations, orders,  recognitions,
     grants,  consents, clearances, confirmations, licences, permissions  and
     approvals necessary or appropriate in any jurisdiction for or in respect
     of the Offer or the proposed acquisition by any member of Close Brothers
     Group  of  any  or  all  of  the Rea Brothers Shares,  or  the  proposed
     acquisition of control of any member of the Rea Brothers Group or (where
     the  effect could reasonably be material in the context of the Wider Rea
     Brothers  Group) any member of the Wider Rea Brothers Group having  been
     obtained  in  terms  and  in  a form reasonably  satisfactory  to  Close
     Brothers from all appropriate Third Parties and all such authorisations,
     orders,   recognitions,  grants,  consents,  clearances,  confirmations,
     licences,  permissions and approvals remaining in all material  respects
     in  full force and effect and there being no intimation of any intention
     to revoke or amend or not to renew the same;

(m)  save as disclosed in writing to Close Brothers or its advisers prior  to
     21  July 1999 or as disclosed in the Annual Report and Accounts  of  Rea
     Brothers  for  the  year ended 31 December 1998 or  exceptions  publicly
     announced  by  delivery of an announcement to the Company  Announcements
     Office  of the London Stock Exchange prior to 21 July 1999, there  being
     no  provision of any arrangement, agreement, lease, licence,  permit  or
     other instrument to which any member of the Rea Brothers Group or (where
     the  effect could reasonably be material in the context of the Wider Rea
     Brothers Group) any member of the Wider Rea Brothers Group is a party or
     by  or to which any such member or any of their respective assets may be
     bound  or be subject which could reasonably be likely to, in each  case,
     in  consequence of the Offer or the acquisition or proposed  acquisition
     of  Rea Brothers Shares by Close Brothers or because of a change in  the
     control or management of Rea Brothers, result in:

     (i)  any indebtedness, actual or contingent, of any such member being or
          becoming   repayable   or  capable  of  being  declared   repayable
          immediately  or  prior  to  the  stated  repayment  date  in   such
          arrangement,  agreement,  licence,  permit  or  instrument  or  the
          ability of such member to incur any indebtedness being withdrawn or
          prohibited or being capable of being withdrawn or prohibited;
     
     (ii) the  creation  or  enforcement of any  mortgage,  charge  or  other
          security  interest  over the whole or any  part  of  the  business,
          property or assets of any such member or any such security interest
          (whenever arising or having arisen) becoming enforceable;

     (iii)any  such  arrangement, agreement, lease, licence, permit or  other
          instrument  or  the rights, liabilities, obligations  or  interests
          thereunder  which  is  material in the context  of  the  Wider  Rea
          Brothers  Group  as  a  whole being or becoming  capable  of  being
          terminated or adversely and materially modified or affected;

     (iv) other  than  in  the  ordinary course of business,  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;

     (v)  the  financial  or  trading  position, profits,  assets,  value  or
          prospects  of  any  such  member  being  materially  and  adversely
          affected to an extent which is material in the context of the Wider
          Rea Brothers Group;

     (vi) the creation of material liabilities (actual or contingent) by any  
           such member;

     (vii)any material interest or business of any such member in or with any
          other person, firm or company (or any arrangements relating to such
          interest  or business) being terminated or materially and adversely
          modified or affected; or

     (viii)any such member ceasing to be able to carry on business under  any
          name  under  which it at present does so which is material  in  the
          context of the Wider Rea Brothers Group as a whole;
     
(n)  save as disclosed in writing to Close Brothers or its advisers prior  to
     21  July 1999 or as disclosed in the Annual Report and Accounts  of  Rea
     Brothers  for  the  year ended 31 December 1998 or  except  as  publicly
     announced  by  delivery of an announcement to the Company  Announcements
     Office of the London Stock Exchange prior to 21 July 1999, no member  of
     the Rea Brothers Group or (where the effect could reasonably be material
     in  the context of the Wider Rea Brothers Group) any member of the Wider
     Rea Brothers Group having since 31 December 1998:

     (i)  save  for  transactions solely with members of Rea Brothers  Group,
          issued  or  agreed  to or authorised or proposed or  announced  its
          intention to authorise or propose the issue of additional shares of
          any  class, or securities convertible into, or rights, warrants  or
          options to subscribe for or acquire, any such shares or convertible
          securities (save for the grant of Rea Brothers Options and for  the
          issue of Rea Brothers Shares in the ordinary course pursuant to the
          exercise of Rea Brothers Options);
     
     (ii) save for the final dividend paid by Rea Brothers in respect of  the
          period to 31 December 1998, 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,  other
          than to a member of Rea Brothers Group;

     (iii)save  for  transactions solely with members of Rea Brothers  Group,
          merged with any body corporate or authorised, proposed or announced
          an  intention  to  authorise or propose  any  merger,  acquisition,
          demerger,  or  any  disposal or transfer  of  any  asset  which  is
          material in the context of the Wider Rea Brothers Group as a whole,
          or  granted  or  created any mortgage, charge,  security  or  other
          encumbrance   over   any  assets  (including   shares   and   trade
          investments)  which are material in the context of  the  Wider  Rea
          Brothers  Group as a whole or over any right, title or interest  in
          any  asset  the effect of which is material in the context  of  the
          Wider Rea Brothers Group as a whole;

     (iv) save  for  transactions solely with members of Rea Brothers  Group,
          authorised,  proposed or announced its intention  to  authorise  or
          propose any material change to any loan capital;

     (v)  issued,  authorised  or proposed the issue  of  any  debentures  or
          incurred  any indebtedness or contingent or actual liability  which
          is  material in the context of the Wider Rea Brothers  Group  as  a
          whole;

     (vi) entered  into or varied any arrangement, agreement, transaction  or
          commitment  (whether  in  respect of capital  expenditure,  trading
          obligations  or otherwise), which is of a loss making,  long  term,
          onerous  or  unusual nature or which involves or could  involve  an
          obligation  of such nature or magnitude or which is other  than  in
          the  ordinary  course  of  business or which  would  be  materially
          restrictive on the business of any member of the Wider Rea Brothers
          Group, in each case, the effect of which is material in the context
          of the Wider Rea Brothers Group as a whole;

    (vii) entered  into  or  varied the terms of, or made  any  offer  (which
          remains  open for acceptance) to enter into or vary the  terms  of,
          any  service agreement or agreement for services with any  director
          of Rea Brothers;

    (viii) announced  a proposal to purchase, redeem or repay, or  purchased,
           redeemed  or  repaid, any of its own shares or other securities  or
           made any other change to any part of its share capital;
     
     (ix) proposed any voluntary winding-up which is material in the  context
          of the Wider Rea Brothers Group as a whole;

     (x)  other  than  in  the  ordinary  course  of  business,  implemented,
          authorised,  proposed  or  announced its  intention  to  implement,
          authorise  or  propose  any reconstruction,  amalgamation,  scheme,
          commitment,  acquisition or other transaction or arrangement  which
          is  material in the context of the Wider Rea Brothers  Group  as  a
          whole;

     (xi) waived  or compromised any claim which individually or in aggregate
          is/are material in the context of the Wider Rea Brothers Group as a
          whole;

    (xii) terminated  or  varied  the terms of any agreement  or  arrangement
          between  any member of the Rea Brothers Group or (where the  effect
          could  reasonably  be  material in the context  of  the  Wider  Rea
          Brothers Group) any member of the Wider Rea Brothers Group and  any
          other person in a manner which would or might be expected to have a
          material  adverse effect on the financial position or prospects  of
          the Wider Rea Brothers Group as a whole;

   (xiii) been  unable or admitted in writing that it is unable to  pay  its
          debts or (in a manner which is material in the context of the Wider
          Rea  Brothers  Group taken as a whole) having stopped or  suspended
          (or  threatened to stop or suspend) payment of its debts  generally
          or  ceased  or threatened to cease carrying on all or a substantial
          part of its business;

   (xiv)  made any alteration to its memorandum or articles of association,
          or other incorporation documents;

     (xv) 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
          of  its  assets  or  revenues or any analogous proceedings  in  any
          jurisdiction or had any such person appointed; or

   (xvi)  entered  into or made an offer (which remains open for  acceptance)
          to  enter  into any arrangement, agreement or commitment or  passed
          any  resolution with respect to any of the transactions  or  events
          referred to in this paragraph (m) which is material in the  context
          of the Wider Rea Brothers Group as a whole;
     
(o)  since  31  December 1998, save as disclosed in writing to Close Brothers
     or its advisers prior to 21 July 1999 or except as publicly announced to
     the  Company Announcements Office of the London Stock Exchange prior  to
     21  July 1999 or as disclosed in the Annual Report and Accounts  of  Rea
     Brothers for the year ended 31 December 1998;

     (i)  there  having  been  no material adverse change  in  the  business,
          assets, financial or trading position or profits or assets  of  any
          member  of  the Wider Rea Brothers Group which is material  in  the
          context of the Wider Rea Brothers Group as a whole;
     
     (ii) no  litigation, arbitration proceedings, prosecution or other legal
          proceedings   having  been  threatened,  announced,  intimated   or
          instituted  by or remaining outstanding against any member  of  the
          Rea  Brothers  Group  or  (where the  effect  could  reasonably  be
          material in the context of the Wider Rea Brothers Group) any member
          of  the Wider Rea Brothers Group (whether as plaintiff or defendant
          or  otherwise) and no investigation by a Third Party against or  in
          respect  of  any  member of the Rea Brothers Group  or  (where  the
          effect could reasonably be material in the context of the Wider Rea
          Brothers  Group) any member of the Wider Rea Brothers Group  having
          been instituted, threatened or announced by or against or remaining
          outstanding  in  respect of any member of the  Wider  Rea  Brothers
          Group  which,  in  any such case, might have a  materially  adverse
          effect on the Wider Rea Brothers Group as a whole;

   (iii)  there having been no enquiry or investigation by, or complaint  or,
          reference to, any Third Party in respect of any member of  the  Rea
          Brothers Group or (where the effect could reasonably be material in
          the  context  of the Wider Rea Brothers Group) any  member  of  the
          Wider  Rea  Brothers  Group  and  no such  enquiry,  investigation,
          complaint   or   reference   having  been  threatened,   announced,
          implemented, instituted or remaining outstanding which, in any such
          case,  might  have a materially adverse effect upon the  Wider  Rea
          Brothers Group as a whole; or

     (iv) no  contingent or other liability having arisen or become  apparent
          or increased which would or could reasonably be expected to have  a
          materially  adverse effect on any member of the Wider Rea  Brothers
          Group;
     
     
(p)  Close Brothers not having discovered that:

     (i)  any  financial  or business or other information disclosed  at  any
          time  by  or on behalf of any member of the Rea Brothers  Group  or
          (where  the  effect could reasonably be material in the context  of
          the  Wider Rea Brothers Group) any member of the Wider Rea Brothers
          Group  publicly  or  to  any  member of  Close  Brothers  Group  is
          misleading  in  the  context of the Wider  Rea  Brothers  Group  or
          contains a material misrepresentation of fact which is material  in
          the  context of the Wider Rea Brothers Group or omits  to  state  a
          fact  necessary  to  make  any information  contained  therein  not
          misleading in a way which is material in the context of  the  Wider
          Rea  Brothers  Group  in any case which has not  subsequently  been
          corrected in all material respects by such a disclosure;
     
     (ii) save  as disclosed in writing to Close Brothers or its advisers  or
          except as publicly announced by delivery of an announcement to  the
          Company Announcements Office of the London Stock Exchange prior  to
          21  July  1999, any member of the Rea Brothers Group or (where  the
          effect could reasonably be material in the context of the Wider Rea
          Brothers  Group)  any  member of the Wider Rea  Brothers  Group  is
          subject  to  any liability (contingent or otherwise) which  is  not
          disclosed  in  Rea  Brothers' annual report and  accounts  for  the
          financial year ended 31 December 1999 and which is material in  the
          context of the Wider Rea Brothers Group;

   (iii)  there  is,  or  is likely to be, any liability (whether  actual  or
          contingent)  on the part of a member of the Rea Brothers  Group  or
          (where  the  effect could reasonably be material in the context  of
          the  Wider Rea Brothers Group) any member of the Wider Rea Brothers
          Group to make good, repair, reinstate or clean up any property  now
          or previously owned, occupied or made use of by any past or present
          member  of  the  Rea  Brothers Group or  (where  the  effect  could
          reasonably  be  material in the context of the Wider  Rea  Brothers
          Group) any member of the Wider Rea Brothers Group or any controlled
          waters  under  any  environmental legislation, regulation,  notice,
          circular  or  order  of any relevant authority or  third  party  or
          otherwise;

(q)  no  receiver, administrative receiver or other encumbrancer having  been
     appointed over any of the assets of any member of the Rea Brothers Group
     or  (where  the effect could reasonably be expected to have a materially
     adverse  effect on any member of the Rea Brothers Group) any  member  of
     the Wider Rea Brothers Group.

Subject  to the requirements of the Panel, Close Brothers reserves the  right
to  waive  all  or any of the above conditions, in whole or  in  part  except
conditions (a) and (b).

Conditions  (b) to (q) inclusive must be satisfied as at, or (if  capable  of
waiver) waived on or before, midnight on the 21st day after the later of  the
first  closing  date  of  the Offer and the date on which  condition  (a)  is
satisfied  or declared satisfied (or, in each case, such later  date  as  the
Panel  may agree) or the Offer will lapse. Close Brothers shall be  under  no
obligation  to  waive  or treat as satisfied any of  conditions  (b)  to  (p)
inclusive  by  a date earlier than the latest date specified  above  for  the
satisfaction thereof notwithstanding that the other conditions of  the  Offer
may,  at such earlier date, have been waived or satisfied and that there  are
at  such earlier date no circumstances indicating that the relevant condition
may not be capable of satisfaction.

If  Close Brothers is required by the Panel to make an offer for Rea Brothers
Shares  under the provisions of Rule 9 of the Code, Close Brothers  may  make
such alterations to the terms and conditions of the Offer, including that  in
condition (a) above, as are necessary to comply with the provisions  of  that
Rule.

                        Part B: Certain Further Terms

The Offer will lapse (unless otherwise agreed with the Panel) if the proposed
acquisition of Rea Brothers is referred to the Competition Commission  before
3.00pm (London time) on the first closing date of the Offer or on the date on
which  the  Offer  becomes or is declared unconditional  as  to  acceptances,
whichever is the later.

If the Offer lapses, the Offer will cease to be capable of further acceptance
and  accepting Rea Brothers Shareholders and Close Brothers will cease to  be
bound by any Forms of Acceptance submitted before the time when the Offer  so
lapses.

The  Offer  and any acceptances and elections thereunder will be governed  by
English law.

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 of  and  observe
any applicable requirements.

                                 APPENDIX II
                                      
      Bases and assumptions and letters relating to the profit forecast

 Part A: Profit forecast by Close Brothers for the year ending 31 July 1999

The  Directors forecast that, in the absence of unforeseen circumstances  and
on  the  bases and assumptions set out below, profit before taxation for  the
year  ending  31  July  1999 will be not less than  £75.0  million  and  that
earnings per share will be not less than 41.5 pence per share.

Bases
The forecast has been prepared using the accounting policies normally adopted
by Close Brothers.  The forecast is based upon:

(a)  the unaudited interim accounts of the Group for the six months ended  31
     January 1999;

(b)  the  results shown by the unaudited management accounts of the Group for
     the five months ended 30 June 1999; and

(c)  management  estimates  and forecasts for the  balance  of  the  forecast
     period ending 31 July 1999.

No  account has been taken of the expenses to be incurred in relation to  the
Offer.

Assumptions
The principal assumptions on which the forecast is based are:

(a)  there  will be no material change in the present management, control  or
     accounting policies of the Group;

(b)  there  will  be no downturn in economic activity in the UK  which  would
     materially affect the Group's business;

(c)  there  will  be  no  significant change in  interest  rates  or  foreign
     currency exchange rates from those currently prevailing;

(d)  there  will be no circumstances which give the Directors cause  to  make
     further provisions against the Group's loans;

(e)  there will be no significant change in legislation affecting the Group's
     operations;

(f)  there will be no material change in the rates or bases of taxation, both
     direct   and   indirect,  affecting  the  Group  from  those   currently
     prevailing;

(g)  there  will  be  no  material changes in general  trading  and  economic
     conditions in the countries in which the Group operates or trades; and

(h)  there  will  be no major disruptions to the business of the  Group,  its
     suppliers  or  customers  by  reason  of  industrial  disruption,  civil
     disturbance or government action.

The  full text of this announcement, in particular paragraph 8 which provides
information on the Group, should be read together with this Appendix II.
     
              Part B: Letters relating to the profit forecast
                                      
The  following are the texts of letters from Deloitte & Touche and  Schroders
relating to the profit forecast:


(i)  From Deloitte & Touche
                                                            Deloitte & Touche
                                                                   Hill House
                                                          1 Little New Street
                                                             London  EC4A 3TR
20 July 1999

The Directors
Close Brothers Group plc
12 Appold Street
London
EC2A 2AW


Dear Sirs,

The Directors
J. Henry Schroder & Co. Limited
120 Cheapside
London EC2V 6DS

We  have  reviewed the accounting policies and calculations used in preparing
the  profit forecast for Close Brothers Group plc ('Close Brothers') and  its
subsidiaries ('Close Brothers Group') for the year ending 31 July  1999,  for
which  the  Directors of Close Brothers are solely responsible,  set  out  in
paragraph  6  and  in Appendix II Part A of this press release.   The  profit
forecast takes account of the results shown by the unaudited interim accounts
for  the six months ended 31 January 1999, and the results shown by unaudited
management accounts of Close Brothers Group for the five months ended 30 June
1999.

In  our  opinion, the profit forecast, so far as the accounting policies  and
calculations  are  concerned, has been properly compiled  on  the  bases  and
assumptions adopted by the directors of Close Brothers set out in Appendix II
Part  A of this press release and the basis of accounting is consistent  with
the accounting policies of Close Brothers Group.

                              Yours faithfully
                                      
                                      
                                      
                              Deloitte & Touche

(ii) From Schroders

                                              J. Henry Schroder & Co. Limited
                                                                120 Cheapside
                                                                       London
                                                                     EC2V 6DS
20 July 1999

The Directors
Close Brothers Group plc
12 Appold Street
London
EC2A 2AW


Dear Sirs,

We  refer  to  the  profit  forecast  of Close  Brothers  Group  plc  ('Close
Brothers') and its subsidiaries for the year ended 31 July 1999 which is  set
out in paragraph 6 and in Appendix II Part A of this document.

We  have  discussed the profit forecast and the basis on which  it  has  been
prepared with you as directors of Close Brothers.  We have also discussed the
accounting policies and calculations for the profit forecast with Deloitte  &
Touche,  Close  Brothers' auditors, and we have considered  their  letter  of
today's date addressed to yourselves and ourselves on this matter.

On  the basis of the foregoing, we consider that the profit forecast referred
to  above,  for which you as directors are solely responsible, has been  made
with due care and consideration.


                              Yours faithfully,
                     for J. Henry Schroder & Co. Limited
                                      
                                      
                                      
                                 Mark Warham
                                  Director
                                APPENDIX III
                                      
                                 Definitions

The  following  definitions apply throughout this  press  release  unless  the
context requires otherwise.


'Close Brothers' or 'Company'      Close Brothers Group plc
                                   
'Close Brothers Group' or          Close Brothers and its subsidiaries
'Group'                            

'Close Brothers Shareholders'      holders of Close Brothers Shares
                                   
'Close Brothers Shares'            existing  shares  of  25  pence  each  in
                                   Close Brothers
                                   
'City Code'                        The City Code on Takeovers and Mergers
                                   
'Companies Act'                    the Companies Act 1985 (as amended)
                                   
'Directors' or 'Board'             the directors of Close Brothers
                                   
'Form of Acceptance'               the  form of acceptance relating  to  the
                                   Offer
                                   
'FSA'                              The Financial Services Authority
                                   
'IMRO'                             Investment      Management     Regulatory
                                   Organisation Limited
                                   
'Lazard Brothers'                  Lazard Brothers & Co., Limited

'London Stock Exchange'            London Stock Exchange Limited
                                   
'New Close Brothers Offer          new  shares  of  25 pence each  in  Close
Shares'                            Brothers  to be issued credited as  fully
                                   paid in connection with the Offer
                                   
'New Close Brothers Placing        new  shares  of  25 pence each  in  Close
Shares'                            Brothers  to be issued as fully  paid  in
                                   connection with the Share Placing
                                   
'Offer Document'                   the  offer  document to be  addressed  to
                                   Rea  Brothers Shareholders in  connection
                                   with the Offer
                                   
'Offer'                            the  recommended  offer by  Schroders  on
                                   behalf  of Close Brothers to acquire  all
                                   the  Rea Brothers Shares subject  to  the
                                   terms  and conditions to be set  out  and
                                   in  the  Offer  Document and,  where  the
                                   context  admits, any subsequent revision,
                                   variation, extension or renewal thereof
                                   
'Official List'                    the  Official  List of the  London  Stock
                                   Exchange
                                   
'Panel'                            The Panel on Takeovers and Mergers
                                   
'PIA'                              Personal Investment Authority Limited
                                   
'Rea Brothers'                     Rea Brothers Group plc
                                   
'Rea Brothers Directors' or 'Rea   the directors of Rea Brothers
Brothers Board'                    

'Rea Brothers Group'               Rea Brothers and its subsidiaries
                                   
'Rea Brothers Options'             options granted over Rea Brothers  Shares
                                   pursuant  to Rea Brothers Group plc  1989
                                   UK  Executive  Share Option  Scheme,  Rea
                                   Brothers    Group   plc   1989   Offshore
                                   Executive  Share Option  Scheme  and  Rea
                                   Brothers  Group plc 1998 Executive  Share
                                   Option Scheme
                                   
'Rea Brothers Shareholders'        holders of Rea Brothers Shares
                                   
'Rea Brothers Shares'              the existing unconditionally allotted  or
                                   issued and fully paid ordinary shares  of
                                   25  pence  each in Rea Brothers  and  any
                                   further    such    shares    which    are
                                   unconditionally allotted or issued  prior
                                   to  the  date  on which the Offer  closes
                                   (or  such earlier date, not being earlier
                                   than  the date on which the Offer becomes
                                   unconditional   as  to  acceptances,   as
                                   Close  Brothers may, subject to the rules
                                   of  the City Code, determine) as a result
                                   of  the  exercise of Rea Brothers Options
                                   or otherwise
                                   
'Schroders'                        J. Henry Schroder & Co. Limited
                                   
'SFA'                              The   Securities  and  Futures  Authority
                                   Limited
                                   
'Share Placing'                    the  underwritten  placing  for  cash  of
                                   6,000,000  New  Close  Brothers   Placing
                                   Shares
                                   
'UK'                               the United Kingdom
                                   
'USA'                              the   United   States  of  America,   its
                                   possessions or territories or  any  state
                                   of  the United States and the district of
                                   Columbia
                                   
'Warburg Dillon Read'              UBS   AG,  acting  through  its  division
                                   Warburg Dillon Read
'Wider Close Brothers Group'       Close  Brothers  and its  subsidiary  and
                                   associated  undertakings,  including  any
                                   company,   firm,  partnership  or   joint
                                   venture  in  which any  member  of  Close
                                   Brothers Group has an interest
                                   
'Wider Rea Brothers Group'         Rea   Brothers  and  its  subsidiary  and
                                   associated  undertakings,  including  any
                                   company,   firm,  partnership  or   joint
                                   venture  in  which  any  member  of   Rea
                                   Brothers Group has an interest
                                   

                                                                                                                                                                  

a d v e r t i s e m e n t