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Themis FTSE Fldg Idx (TFF)


Wednesday 24 November, 1999

Themis FTSE Fldg Idx

Response to Offer From Gartmore Fledgling Index

Themis FTSE Fledgling Index Tst PLC
24 November 1999

Themis FTSE Fledgling Index Trust PLC
Response to unsolicited offer from Gartmore Fledgling Index
Trust plc

The Board of Themis FTSE Fledgling Index Trust PLC
despatched a circular to its shareholders today in response
to the unsolicited offer for the Company by Gartmore
Fledgling Index Trust plc. The text of the Chairman's letter
contained in the circular is set out below:


Shareholders should have received a formal Offer Document
setting out the terms of an unsolicited Offer by GFIT for
the entire issued share capital of the Company.

British Empire Securities and General Trust p.l.c., the
Company's largest Shareholder, has irrevocably undertaken to
accept the GFIT Offer in respect of its holding of
10,585,000 Shares, representing 21.06 per cent. of the
issued share capital of the Company.  In addition, letters
of intent to accept the GFIT Offer have been given by
Shareholders holding an aggregate of 13,582,951 Shares
(representing 27.02 per cent. of the Company's issued share
capital). On 22 November 1999, it was announced that
acceptances in respect of 7,466,772 of the Company's Shares
(representing 14.9 per cent.) had been received and that
such Shares were not the subject of that undertaking or
those letters of intent.

British Empire Securities and General Trust p.l.c. has
further undertaken not to exercise the voting rights in
respect of its shareholding of 21.06 per cent. of the
Company in a manner which may frustrate the Offer and to
vote against any resolution for the winding-up of the
Company or a reduction of its share capital or a merger
under Section 425 of the Companies Act 1985. This
undertaking will continue until the GFIT Offer becomes
unconditional or is withdrawn or lapses.

Since the announcement of the Offer, your Board has
consulted with the Company's major Shareholders
representing, in aggregate, over 70 per cent. of the issued
share capital and has noted their views. A number of those
major Shareholders indicated that they did not want to
receive cash but wished to retain an exposure to the
Fledgling Index as part of a larger trust.

In addition, the Board has received approaches from a number
of parties who have expressed an interest in making an offer
or putting forward alternative proposals for the Company
subject, among other things, to obtaining the Board's
recommendation of the relevant proposal. In your Board's
view, each of those outline approaches has certain potential
advantages in comparison with the Offer and each of them has
the potential to offer greater shareholder value than the
Offer. However, your Board has made it clear to each of
those third parties that it is not prepared to
expend further significant time and expense considering any
of them, unless they are able to demonstrate significant
Shareholder support for their proposal such that there is a
reasonable prospect of a majority of Shareholders supporting
that proposal in preference to the Offer.

Your  Directors  have  also  met  with representatives of
GFIT to  seek  an improvement in the terms of the Offer.
However, no improvement of the existing Offer terms has been

While the Directors believe that the Offer does not fully
value the Company, the Board's response has been dictated by
the level of Shareholder support already shown for the
Offer. Although the Board could incur additional expense in
exploring alternative proposals, the effect would inevitably
be to reduce the Company's Formula Asset Value and hence the
value of the Offer to Shareholders.  Until such time as it
is demonstrated to the Board that sufficient Shareholders
will support an alternative proposal in preference to the
Offer, your Board does not believe it is in the best
interests of Shareholders to incur such expense.

The Offer is due to close at 3.00pm on Thursday, 2 December
1999 but may be extended at that time if GFIT so chooses.
If at that time the level of acceptances received by GFIT
indicates that a majority of Shareholders have not accepted
the Offer, the Board will commence exploring alternative
proposals in greater detail.

Accordingly, your Directors, who have been so advised by
Hoare Govett Limited, recommend that:

(a)  Shareholders who do not wish alternative proposals to
be considered by your Directors and who wish to retain a
shareholding in an investment trust with the aim of broadly
matching the performance of the Fledgling Index and with the
prospect of realising part of their investment for cash
during the first half of next year should accept the Offer.
Details of how to accept the Offer are set out in the Offer
Document and the Form of Acceptance.  The attention of
Shareholders with registered addresses outside the United
Kingdom is drawn to the relevant provisions of paragraph
(vi) of Part B of appendix II to the Offer Document; and

(b)  Shareholders who wish the Board to consider alternative
proposals should not accept the Offer.
If, by 3.00pm on Thursday, 2 December 1999 a majority of
Shareholders have not accepted the Offer, the Board will
consider which alternative proposals should be explored in
greater detail and, if appropriate, recommended to

In providing advice to the Directors, Hoare Govett Limited
has placed reliance upon the Directors' commercial
assessment of the transaction.

Shareholders should be aware that GFIT may choose not to
extend the Offer should insufficient acceptances have been
received by 3.00pm on Thursday, 2 December
1999 and there is no certainty that any alternative
proposals will result in another offer or scheme being
presented to Shareholders.

If Shareholders are in any doubt about the action they
should take, they should consult an independent financial
adviser authorised under the Financial Services Act 1986
without delay.'


Bob Cowdell
Hoare Govett Limited                         0207 678 8000

Hoare Govett Limited, which is regulated in the United
Kingdom by The Securities and Futures Authority Limited, is
acting for Themis FTSE Fledgling Index Trust PLC and no-one
else in connection with the Offer and will not be
responsible to anyone other than Themis FTSE Fledgling Index
Trust PLC for providing the protections afforded to
customers of Hoare Govett Limited, nor for providing advice
in connection with the contents of this announcement.

This announcement, which has been issued by the Company, has
been approved by Hoare Govett Limited, which is regulated by
The Securities and Futures Authority Limited, for the
purposes of section 57 of the Financial Services Act 1986.


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