Ashquay Group PLC - Acquisition

RNS No 5694d
ASHQUAY GROUP PLC
17th July 1997


ACQUISITION OF A PROPERTY PORTFOLIO FROM WARNER ESTATE HOLDINGS PLC
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Ashquay Group PLC ("Ashquay"), the property investment and development
company, has today announced that it has conditionally agreed to purchase a
property portfolio from Warner Estate Holdings PLC ("Warner") for a
consideration of #12,250,000.

The portfolio, which is predominantly freehold, is made up of 21 retail
properties in high street locations throughout England and Wales and has been
valued by Chesterton, Chartered Surveyors, on an open market basis at
#12,745,000.  Substantially all of the current income from the portfolio is
derived from national covenants, with tenants including banks and major food
and non-food retailers.  The majority of current income is from leases with
unexpired terms of 15 years or more.  The current annual income from the
portfolio is #1,160,637, representing an initial net yield based on the
purchase price of 9.5 per cent.

Reasons for the Acquisition
---------------------------

Ashquay's stated objective is to build a balanced portfolio of properties
providing long-term capital and income growth within the United Kingdom.  It
is the Board's strategy to enhance the value and quality of its property
portfolio through a combination of growth in rental income and an improvement
in tenant covenants.  Having regard particularly to the quality of tenants in
the Warner Portfolio, the Board believe that the Acquisition fulfils this
strategy very well.

On a pro-forma basis, the Acquisition will have the effect of increasing the
Group's gross property assets by approximately 57 per cent. to #35.1 million
whilst being broadly neutral in terms of net asset value per Ordinary Share. 
Moreover, Ashquay's net rental income will rise, on an annualised basis, from
approximately #1.9 million to #3.1 million, of which approximately 70 per
cent. will derive from retail sector tenants.

The debt finance for the Acquisition takes the form of a secured 20-year term
loan at a rate of interest which will be fixed immediately prior to completion
by reference to the prevailing yield on UK government securities.

Consideration
-------------

Under the terms of the acquisition, the consideration payable by Ashquay will
be satisfied as at #10,750,000 in cash, of which #9,750,000 will be paid on
completion from the new Group borrowing facilities.  A further payment of
#1,000,000 will be deferred until the second anniversary of completion.  The
deferred payment may be settled by Ashquay at any time, without penalty, prior
to such anniversary.  It will be interest free until 31st December 1997 and
will thereafter bear interest.

The remaining balance of #1,500,000 will be satisfied by the issue to Warner
of 5,357,143 new Ordinary Shares of Ashquay at 28p per share.  This will
increase Warner's existing issued share capital in Ashquay from 11.75 per
cent. to 24.72 per cent.

The Directors believe that the Acquisition of the Warner Portfolio, together
with its targeted development programme, will enable the enlarged Group's
investment and trading properties to make good progress and enhance
shareholder value in the future.

Derek Tughan, Chairman of Ashquay, commented:

"This Acquisition is in line with our stated objectives of building a balanced
portfolio of properties providing long-term capital and income growth within
the United Kingdom.  It is the Board's strategy to enhance the value and
quality of its property portfolio through a combination of growth in rental
income and an improvement in tenant covenants."

"Having regard particularly to the quality of tenants in the Warner Portfolio,
the Board believe that the Acquisition fulfils this strategy very well."

The Acquisition of the property portfolio from Warner Estate Holdings PLC is
conditional on the approval of Ashquay's shareholders.  A circular contains
full details of the offer and a notice convening an Extraordinary General
Meeting will be sent to shareholders shortly.


For further information please contact:

Harry Sproule        Ashquay Group PLC (until 12 pm)     0171-628 2030
                                       (after 12 pm)     0171-408 0501
Paul Newman          Sutherlands Limited                 0171-628 2030
Jonathan Gillen      Focus Financial Communications      0171-929 6111


END
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