RNS Number:5360S
Swan Hill Group PLC
26 November 2003


Not for release, publication or distribution in or into the United States,
Canada, Australia or Japan


For immediate release                                           26 November 2003

               Swan Hill Group plc ("Swan Hill" or the "Company")
                                        
      Document posted to shareholders in relation to the Raven Mount Offer


The Offer Document containing the terms of the Offer made by WestLB on behalf of
Raven Mount was posted to Swan Hill Shareholders on 12 November 2003. Ian
Maclellan, Chairman of Swan Hill, has today written to shareholders detailing
the Swan Hill Board's advice as to the action shareholders should take in
relation to the Offer (the "Circular"). A text of the letter to shareholders is
set out below.

On 13 November 2003, the Offer was declared unconditional as to acceptances
having secured valid acceptances from four institutional Swan Hill Shareholders
in respect of 51.6 per cent. of Swan Hill's issued share capital.

By immediately accepting the Offer irrevocably, these four Swan Hill
Shareholders have denied the Board the opportunity to solicit competing offers
during the Offer Period from third parties, which might have led to offers
either in cash or shares in excess of Swan Hill's then prevailing share price.
At the instigation of certain Swan Hill Shareholders and on behalf of all Swan
Hill Shareholders, the Board had, within the previous twelve months, been
seeking offers for the Company at around net asset value. The Board therefore
regrets the loss of an opportunity to seek offers at levels lower than net asset
value which might have allowed all Swan Hill Shareholders to participate
immediately in 100 per cent. of the potential sale proceeds.

Raven Mount

Raven Mount is a newly formed public company that has not commenced trading and
was established solely for the purposes of making the Offer. Raven Mount has
applied to have the Raven Mount Shares admitted to trading on AIM
(''Admission'') and the Offer is conditional inter alia upon Admission.

Raven Mount's strategy for Swan Hill

The Board of Raven Mount has stated in its Offer Document that its primary
objective will be to maximise value for its shareholders, either by adding value
to existing assets or through disposals, following a review of the businesses
and assets owned by Swan Hill. The Board is unable to comment upon Raven Mount's
strategy given its generality. In any event, Swan Hill Shareholders will suffer
the diminution in value from the costs of Raven Mount and Swan Hill in respect
of this Offer and will only accrue 85 per cent. of any value achieved in excess
of 80 pence per Raven Mount Share.

Management and employees

The Board further notes that Raven Mount states in its Offer Document that the
existing employment rights, including pension rights, of the employees of Swan
Hill will be safeguarded.

The Offer terms

The terms and conditions of the Offer are set out in the Offer Document and the
Form of Acceptance. WestLB is offering, on behalf of Raven Mount, to acquire
each Swan Hill Share in exchange for one new Raven Mount share, subject to the
terms and conditions set out in the aforementioned documents.

Full acceptance of the Offer (excluding Swan Hill Shares issued pursuant to the
exercise of outstanding options under the Swan Hill Share Option Schemes) would
involve the issue of 59,676,972 Raven Mount Shares. The directors of Raven Mount
have agreed to subscribe for and have been allotted, conditional upon Admission,
approximately 2,500,000 Raven Mount Shares at 80 pence per Raven Mount Share. On
the above basis, existing Swan Hill Shareholders would own approximately 96 per
cent. of the then issued ordinary share capital of Raven Mount.

In addition, 6,000 convertible ordinary Raven Mount Shares have been allotted at
#1 per share to the Raven Mount Employee Benefit Trust, in which the three
executive directors of Raven Mount are interested. Such shares are convertible
into Raven Mount Shares at a conversion rate which is determined from a formula
set out in the Raven Mount articles of association. The conversion rate is based
on 15 per cent. of the difference between the aggregate of the market
capitalisation of Raven Mount plus any distributions made by Raven Mount, and a
notional market capitalisation of such shares based on a share price of 80 pence
per Raven Mount Share. Raven Mount has also granted, conditional upon Admission,
the three non-executive directors options to subscribe for, in aggregate,
525,000 Raven Mount Shares at an exercise price of 80 pence per Raven Mount
Share.

The implications of the Offer being declared unconditional as to acceptances

As set out above, as of 13 November 2003, four Swan Hill Shareholders had
accepted the Offer in respect of a majority of the Swan Hill Shares and the
Offer was declared unconditional as to acceptances. Swan Hill Shareholders who
have validly accepted the Offer are now not able to withdraw their acceptances
unless the Offer were to be withdrawn or lapse. The Offer would not proceed only
in the event that one of the remaining conditions were not waived or satisfied
and Raven Mount caused the Offer to lapse. This would require the consent of the
Panel on Takeovers and Mergers.

The implications of the Offer being declared wholly unconditional

If Swan Hill Shareholders were not to accept the Offer from Raven Mount and the
Offer were declared wholly unconditional, they would be exposed to certain
risks:

* Firstly, Swan Hill Shareholders would hold securities in a subsidiary of
  Raven Mount.
* Secondly, to the extent that other Swan Hill Shareholders have accepted
  the Offer, there would be a reduction in the number of Swan Hill Shares held
  by the remaining minority. This would be likely to result in the market in
  Swan Hill Shares becoming more limited, which could adversely affect the
  price of Swan Hill Shares.
* Lastly, Raven Mount has stated in the Offer Document that it intends to
  apply to delist the Swan Hill Shares from the London Stock Exchange. In that
  event, Swan Hill Shareholders might well find it difficult to sell their
  Swan Hill Shares, or might only be able to do so on unfavourable terms.

Raven Mount has stated that should it receive sufficient acceptances it intends
to use the procedures in the Companies Act to acquire compulsorily (on the same
terms as the Offer) any remaining Swan Hill Shares. However, it may not be able
to reach sufficient acceptances, which means that a Swan Hill Shareholder who
does not accept the Offer is not guaranteed to receive Raven Mount Shares.

Lost opportunity to pursue options

As the Board announced on 14 November 2003, it is disappointed that four Swan
Hill Shareholders, holding Swan Hill Shares representing 51.6 per cent. of Swan
Hill's issued ordinary share capital, accepted the Offer on the day following
its announcement before the Board and management of Swan Hill had an opportunity
to explore alternative routes, including seeking other offers, which may have
delivered greater value and certainty to all Swan Hill Shareholders. Now that
the Offer has been declared unconditional as to acceptances, it is, in the view
of the Board, unlikely that a competing offer will emerge.

The Board notes that in the period immediately following the announcement of the
Offer, Swan Hill and its financial adviser, Citigroup, were approached by a
number of parties with a view to those parties considering making a competing
offer. There can be no certainty that any of these enquiries would ultimately
have led to a competing offer being made. However, given the level of interest
shown in the Company and the discount at which the Swan Hill Shares were trading
immediately prior to the Offer being announced relative to the last published
net asset value per share, the directors of Swan Hill believe that there was a
realistic prospect of securing a cash offer for the Company at a level in excess
of the Swan Hill Share price immediately prior to announcement of the Offer.

Trading update

In Swan Hill's interim statement for the six months ended 30 June 2003, it was
stated that profits for the full year are expected to be significantly below
2002 results, not least because the second half will not benefit from a further
land sale. Since this statement was made, the premium housing market has
remained difficult in Swan Hill's areas of operation with sales and trading
falling below the Board's earlier expectations.

The results for this financial year will depend on the precise exchanges
achieved on certain key sites between now and the year-end. In the meantime,
progress continues to be made with the disposal of the business and retail park
in the south of France, as well as the sale of the retail development at
Stockton-on-Tees.

Recommendation

As the Offer has been declared unconditional as to acceptances, following the
irrevocable acceptance of four Swan Hill Shareholders, the Board believes that
there is little prospect of a competing offer emerging and, even if it were to
do so, it could only be successful if Raven Mount were to assist in the process.
The Board therefore considers that the options available to Swan Hill
Shareholders comprise:
* not accepting the Offer and continuing to be a shareholder in Swan Hill;
* accepting the Offer, thereby exchanging their Swan Hill Shares for Raven
  Mount Shares, assuming that the Offer is declared wholly unconditional; and/or
* selling their Swan Hill Shares in the market (whilst Swan Hill remains a
  listed company) for cash.

As stated above, the Board considers that there are potentially adverse
implications for Swan Hill Shareholders of becoming minority shareholders in
what (assuming that the Offer is declared wholly unconditional) would be a
subsidiary of Raven Mount, particularly if, as Raven Mount has indicated, it
cancels the listing of Swan Hill Shares on the London Stock Exchange.
Consequently, the directors of Swan Hill, who have been so advised by Citigroup,
recommend that shareholders do not continue to hold their Swan Hill Shares.

The directors are of the view that a sale of the Company to a trade party should
be achievable at a value in excess of the Swan Hill Share price immediately
prior to announcement of the Offer, provided that the uncertainty caused by the
offer process and the uncertainty surrounding Raven Mount's strategy for the
Company does not have an adverse effect upon it. However, on the basis of the
limited information provided by Raven Mount on its strategy to realise value
from Swan Hill's assets, the directors are unable to express a view on the
merits of accepting the Offer relative to selling Swan Hill Shares in the market
and consider that the choice will largely be driven by each shareholder's
individual circumstances and attitude to risk. In providing advice to the Board,
Citigroup has taken into account the directors' commercial assessments.

The directors will be accepting the Offer in respect of their own shareholdings,
amounting, in aggregate, to 65,469 Swan Hill Shares, representing 0.11 per cent.
of the issued share capital of the Company.

To the extent that Mr Archer and Mr Theakston receive Swan Hill Shares under the
Restricted Share Scheme, each of them intends to sell a sufficient number of
such shares to enable them to meet the tax liabilities associated with the
vesting thereof and intends to accept the Offer in relation to the remainder.

Press enquiries:

Citigroup                                                         020 7986 4000
Sam Small
Dimitrios Georgiou

Weber Shandwick Square Mile                                       020 7067 0700
Terry Garrett
Nick Dibden

Sources and Bases of Information

In this announcement:

* unless otherwise stated, all information relating to Swan Hill has been
  extracted from the annual report and accounts of Swan Hill for the year
  ended 31 December 2002 and the interim report for the 6 months ended 30 June
  2003.
* all information relating to Raven Mount and the terms of the Offer is
  extracted from the Offer Document and Raven Mount's AIM Admission Document
  dated 12 November 2003, with the exception of the description of the Raven
  Mount convertible shares which has been derived from the Raven Mount
  articles of association which are on display.
* the pre-offer price for the Swan Hill Shares refers to the closing share
  price on 11 November 2003 of 78.5 pence per share.

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

Citigroup Global Markets Limited ("Citigroup") is acting for Swan Hill and no
one else in connection with the Offer and will not be responsible to anyone
other than Swan Hill for providing the protections offered to clients of
Citigroup nor for providing advice in relation to the Offer.

Words and expressions in this announcement shall bear the same meanings as the
definitions used in the Circular.



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

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