Tender Offer

Tender Offer 

    LONDON--(BUSINESS WIRE)--May 8, 2003--

     ARC INTERNATIONAL PLC ("ARC INTERNATIONAL" OR THE "COMPANY")

                             TENDER OFFER

The Board of ARC International announces that it is today posting a
circular ("Circular") to Shareholders (other than certain Overseas
Shareholders) setting out the terms of and condition to the Tender
Offer to be made by WestLB Panmure Limited ("Panmure"), as principal,
to purchase up to 181,153,846 Ordinary Shares at a price of between 26
pence and 34 pence per Ordinary Share.

Words and expressions defined in the Circular shall have the same
respective meanings in this announcement.

The Board is proposing to return £48.5 million of surplus capital
through the purchase by the Company for cancellation of existing
issued Ordinary Shares. This return of capital is to be effected by
Panmure purchasing, as principal, existing Ordinary Shares for up to a
total purchase price of £48.5 million (less the costs of the Tender
Offer) from Shareholders and then selling such Ordinary Shares through
the facilities of the London Stock Exchange to the Company for
cancellation. In addition, the Company will lend a further £1.5
million to the EBT Trustee to fund proposed market purchases of
Ordinary Shares by the EBT Trustee.

Full details of the Tender Offer, including the terms on which it is
made and condition to which it is subject, are set out in the
Circular, which will be posted to Shareholders today.

The principal terms of the Tender Offer are as follows:

-   Panmure is inviting Shareholders to tender Ordinary Shares
    (subject to the maximum number indicated below) at any price, in
    increments of 1 pence, within the Price Range of 26 pence to 34
    pence;

-   Panmure will purchase, as principal, existing issued Ordinary
    Shares for up to a total purchase price of £48.5 million (less the
    costs of the Tender Offer) and then sell such Ordinary Shares
    through the facilities of the London Stock Exchange to the Company
    for cancellation;

-   all Shareholders (other than certain Overseas Shareholders) on the
    Register on the Record Date are being given the opportunity to
    participate in the Tender Offer. The Tender Offer is, however,
    being made to Shareholders resident in the United States and
    Canada pursuant to applicable exemptions and exemptive reliefs;

-   all Ordinary Shares which are successfully tendered will be
    purchased at the same price ("the Strike Price"), which will be
    determined at the conclusion of the Tender Offer on the basis of
    the prices at which Ordinary Shares have been tendered. The Strike
    Price will be the lowest price per Ordinary Share (within the
    Price Range) which will allow Panmure to purchase Ordinary Shares
    with an aggregate purchase value not exceeding £48.5 million (less
    the costs of the Tender Offer) in accordance with the order of
    priority detailed below;

-   Shareholders are entitled to tender Ordinary Shares for sale at
    different prices within the Price Range but all Ordinary Shares
    purchased by Panmure will be purchased at the Strike Price and
    Ordinary Shares tendered at a price or prices above the Strike
    Price will not be purchased under the Tender Offer;

-   all or part of a registered holding of Ordinary Shares may be
    tendered, but only one tender may be made in respect of any single
    share;

-   Shareholders may tender any number of Ordinary Shares that are
    registered in their names on the Record Date in two ways:

(i) tenders may be made at fixed prices, in which case they will only
be accepted if the price at which the tender is made is at or below
the Strike Price; or

(ii) tenders may be expressed to be made at the Strike Price, in which
case the Shareholder will be treated as having tendered at the price
at which the Strike Price is ultimately set;

-   subject to the Tender Offer becoming unconditional and not
    lapsing, tenders from Shareholders will be accepted in the
    following order of priority:

(i) first, tenders by Shareholders holding 1,000 Ordinary Shares or
fewer at or below the Strike Price will be accepted in full;

(ii) second, tenders of over 1,000 Ordinary Shares below the Strike
Price will be accepted, and may be scaled back pro rata to ensure that
the consideration paid to Shareholders does not exceed £48.5
million (less the costs of the Tender Offer); and

(iii) thirdly, tenders of over 1,000 Ordinary Shares at the Strike
Price or at a fixed price equal to the Strike Price will be accepted,
and may be scaled-back pro rata to ensure that the consideration paid
to Shareholders does not exceed £48.5 million (less the costs of
the Tender Offer).

If the Strike Price were to be 26 pence, being the bottom end of the
Price Range, the Company would repurchase up to 181,153,846 Ordinary
Shares, equating to approximately 59.6 per cent of the existing issued
share capital of ARC International. If the Strike Price were to be 34
pence, being the top end of the Price Range, the Company would
repurchase up to 138,529,411 Ordinary Shares, equating to
approximately 45.6 per cent of the existing issued share capital of
ARC International.

Expected Timetable
                                                                        2003
Tender Offer commences                                                  8.00 a.m. on Friday, 9 May

Latest time and date for receipt of Tender Forms                        3.00 p.m. on Friday, 23 May

Record Date for Tender Offer                                            5.00 p.m. on Friday, 23 May

Tender Offer trade date                                                 Tuesday, 27 May

Announcement of take-up level under the Tender Offer                    By 8.00 a.m. on Tuesday, 27 May

CREST accounts credited with Tender Offer proceeds and revised
holdings of Ordinary Shares                                             Thursday, 29 May 

Despatch cheques for Tender Offer proceeds in respect of certificated   Thursday, 29 May 
Ordinary Shares

Despatch of balance share certificates in respect of any unsold         
Ordinary Shares and share certificates in respect of unsuccessful
tenders                                                                 Thursday, 29 May

Enquiries:

ARC International plc                                                   001 408 437 3400

Mike Gulett, Chief Executive Officer
Monica Johnson, Chief Financial Officer

Panmure                                                                 [phone]

Andrew Godber
Mark Lander

Tulchan Communications                                                  [phone]

Julie Foster
Tim Lynch


Ends.

   Short Name: Arc Intl PLC
   Category Code: TEN
   Sequence Number: 00004614
   Time of Receipt (offset from UTC): 20030507T201944+0100