Increased Offer

Guinness Peat Group PLC
23 January 2008

 
                                                          
                                   Cash Offer

                                       By

                            Strand Partners Limited

                                  on behalf of

                         GPG Acquisitions No. 5 Limited

             (a wholly owned subsidiary of Guinness Peat Group plc)

                                      for

          the entire issued and to be issued ordinary share capital of

                             NEWBURY RACECOURSE PLC

                          Further re: Increased Offer


On 22 January 2008 the document setting out the terms of an Increased Offer for
the issued and to be issued Ordinary Share capital of Newbury Racecourse was
posted to Newbury Racecourse Shareholders.

1. Letter from the Chairman of Acquisitions

The text of the letter from the Chairman of GPG Acquisitions contained in the
Increased Offer document is set out below:

"Dear Shareholder

Introduction

Since GPG announced its Original Offer, Shareholders have received two circulars
from the Company containing the response from the Newbury Board and, in
particular, a plethora of figures in respect of the Company and its assets. I
write to provide clarification for fellow Shareholders in respect of the most
fundamental of these figures and to reiterate the reasons why, for at least part
of their holding, they should accept GPG's premium offer, which was today
increased to £11.50 per Share.

Background

The Newbury Board is poised to enter into a contract under which the Company,
notwithstanding its paucity of relevant management experience, will be locked
into a development partnership with David Wilson Homes Limited (''DWH'') lasting
for some 10 years. GPG believes the proposed project would prove disastrous for
shareholder value. It was in consequence that GPG indicated to the Newbury Board
it could not support the project unless it could meet the criterion of
generating a minimum return, in today's monetary terms, of at least £7 per Share
(approximately £21.31 million in aggregate). The Newbury Board has been unable
to confirm that such a minimum net inflow would be achieved. In light of this,
GPG felt obliged to act to protect its investment by making the Original Offer.

Realistic Net Asset Value

In the Second Defence Document, dated 15 January 2008, the Newbury Board claimed
that the Original Offer of £11.00 per Share significantly undervalued the
Company. In making this claim it selectively chose, from among some five bases
described therein, the two most favourable scenarios to derive potential net
asset figures for Newbury Racecourse, in both cases assuming planning consent
would be forthcoming and making favourable assumptions regarding taxation on
proceeds of the sale of the surplus land. Shareholders should be aware that the
assumptions of gaining planning consent and favourable taxation treatment are
both inherently speculative. Taking a less rose-tinted view on planning by using
the current market value of Newbury Racecourse's surplus land, and making a more
realistic adjustment for the Company's existing tax position, produces a net
asset value of £10.55 per Newbury Racecourse Share, a discount of some 9.0 per
cent. discount to the Increased Offer price.

The Perils for Shareholders of the DWH Contract

Of more significance though, the Newbury Board has indicated that it will enter
into the DWH contract as soon as the offer timetable has run its course. Given
this, the Newbury Board's highlighted net asset value of £12.84 per Share, which
is based on a straightforward disposal of the surplus land having first obtained
planning permission, is in any event an invalid comparator. The Second Defence
Document, in connection with the putative DWH contract, points to ''Illustrative
Net Assets of £13.27 per Share''. This figure is also based on quite some number
of optimistically chosen assumptions. The most fundamental is that the valuation
is ''subject to satisfactory planning consent''. Moreover, even assuming
planning permission is obtained, if house sales under the development are lower
than forecast in the Company's projections (or costs are higher) the payments to
be made by DWH will be less valuable.

Of critical importance, Shareholders need to take heed of the fact that, were
there to be a significant downturn in the property market, such as is being
forecast by a number of commentators, DWH would only be obliged to make the
minimum payments due under the contract by no later than 9.5 years from the date
of sale of the surplus land. In this scenario Newbury Racecourse's position
under the joint venture would amount to little more than having an unsecured,
non interest-bearing, deposit with DWH for that sum. Even using the Company's
own optimistic assumptions, in particular that planning permission was obtained
and that Shareholders required a return on such funds of no more than 6 per
cent. per annum, the Company's total net asset value if there were such a
property downturn would only amount to £10.37 per Share.

The Newbury Board's proposals would put DWH in control of Shareholders' destiny,
leaving the Company exposed to significant downside risks over a 10 year period.

''Missing Expenditure''

Even this, however, would only be the thin end of the wedge. The Newbury Board
has stated that its full development project has an estimated cost of £45
million whereas only some £33 million of expenditure is accounted for in the
Second Defence Document. Whilst a certain portion of the remaining £12 million
may be in respect of racecourse infrastructure which the Newbury Board
conceivably might decide to defer, it is highly probable that this figure would
include a substantial level of fees and costs, in respect of the DWH project,
which would be payable in any event but would generate no ongoing value for
Shareholders. Shareholders should ask themselves why the Newbury Board has
neglected to mention this £12 million of missing expenditure.

Is it any wonder that, notwithstanding its optimistic pronouncements regarding
net asset value, the Newbury Board has, nonetheless, been unable to confirm that
the DWH project would generate returns of at least £7 per Share?

The upshot of all this is GPG's conclusion that, were the DWH contract to be
entered into, a substantial reduction in the Newbury share price would be the
result. Further detail regarding these important issues is contained in the
section entitled ''Further

Analysis'' (set out in the Increased Offer document).

Increased Offer

GPG has today increased its Offer to £11.50 per Share. The Increased Offer is
final and is in excess of Newbury Racecourse's estimated net assets per Share of
£11.45 based on the Company's own valuation of its surplus land assuming
planning permission were obtained, but after deducting its disclosed estimate of
£2 million, or £0.66 per Share, for additional investment in racecourse
enhancements.

The Increased Offer represents a premium of 16.8 per cent. to the Newbury
Racecourse Share price of £9.85 on the last day before the Original Offer was
announced, since when the FTSE All-Share Index has fallen by 12.8 per cent..

Conclusion

As we have stated previously, Newbury Racecourse is at the crossroads.
Shareholders have to weigh the certainty of £11.50 in cash per Share under the
Increased Offer against the risk of retaining their Shares with no guarantee
that the Newbury Board will not enter into the DWH contract, in which case,
despite the Newbury Board's promises of ''jam tomorrow'', the Company's net
assets could turn out to be no more than £10.37 per Share, before any account is
taken of the £12 million in missing expenditure. Furthermore, given the very low
rate of return implied by this figure, it is GPG's view that Newbury Racecourse
Shares would trade at a substantial discount to this level.

The Increased Offer also provides Shareholders with the alternative of accepting
the Offer for part of their shareholding - thereby assisting GPG to gain control
of the business with a view to maximising the value of the racecourse and
surplus land for the benefit of all remaining Shareholders.

Given the dubious economics of the DWH deal, our fellow Shareholders are
strongly urged to support the Increased Offer and prevent the Newbury Board from
shortchanging us all.

Action to be taken to accept the Increased Offer

The procedure for acceptance of the Increased Offer is set out on pages 16 to 18
of this document and in the accompanying New Form of Acceptance.

Yours sincerely

Blake Nixon
Chairman
GPG Acquisitions No. 5 Limited"


2. Further information

On 14 November 2007 the terms of the Original Offer, to be made by Strand
Partners on behalf of GPG Acquisitions, were announced for the entire issued and
to be issued share capital of Newbury Racecourse. The Original Offer Document
was posted to Shareholders on 7 December 2007.

As at 1.00 p.m. on 28 December 2007, being the first closing date of the
Original Offer, valid acceptances of the Original Offer had been received in
respect of a total of 124,019 Newbury Racecourse Shares, representing
approximately 4.07 per cent. of the issued share capital of Newbury Racecourse.

On 2 January 2008 the Original Offer was extended so as to remain open for
acceptances until 1.00 p.m. on 14 January 2008. The Original Offer was further
extended on 15 January 2008 so as to remain open for acceptances until 1.00 p.m.
on 21 January 2008. On 14 January 2008 the acceptance condition of the Original
Offer was lowered from 75 per cent. to more than 50 per cent..

As at 1.00 p.m. on 21 January 2008, being the third closing date of the Offer,
valid acceptances of the Original Offer had been received in respect of a total
of 191,969 Newbury Racecourse Shares, representing approximately 6.30 per cent.
of the issued share capital of Newbury Racecourse.

3. GPG's shareholding in Newbury Racecourse

Following the purchase on 22 January 2008 of 8,300 Newbury Racecourse Shares,
GPG holds 637,318 Newbury Racecourse Shares, representing approximately 20.93
per cent. of the Company's issued share capital. Other than the Newbury
Racecourse Shares acquired on 22 January 2008, neither GPG nor any person acting
or deemed to be acting in concert with GPG has acquired or agreed to acquired
any Newbury Racecourse Shares or rights over Newbury Racecourse Shares since the
commencement of the Offer Period.

4. The Increased Offer

The Increased Offer is being made on the following basis:

for each Newbury Racecourse Share £11.50 in cash

The Increased Offer price exceeds the highest Closing Price of Newbury
Racecourse Shares since dealings in the Company's ordinary shares commenced on
the PLUS market in 1995 and represents:

   • a premium of approximately 16.75 per cent. to the Closing Price of £9.85
    per Newbury Racecourse Share on 13 November 2007, being the last Business
    Day prior to the announcement of the Original Offer; and
   • premium of approximately 11.11 per cent. to the Closing Price of £10.35
    per Newbury Racecourse Share on 21 January 2008, being the last practicable
    Business Day prior to the date of the Increased Offer Document.

The Increased Offer values the existing issued ordinary share capital of Newbury
Racecourse at approximately £35 million. The Increased Offer is final and, under
the rules of the City Code, cannot be increased or amended, except that GPG
Acquisitions reserves the right to increase or otherwise amend the Increased
Offer in the event that a competing offer for the Company is made by any other
person.

The Newbury Racecourse Shares to which the Increased Offer relates will be
acquired by GPG Acquisitions fully paid, or credited as fully paid, and free
from all liens, equitable interests, mortgages, charges, encumbrances, rights of
pre-emption and other third party rights or interests of any nature whatsoever
and together with all rights now or hereafter attaching to them, including all
voting rights and the right to receive and retain all dividends and other
distributions (if any) declared, made or paid on or after the date of the
Increased Offer document. The Increased Offer extends to any Newbury Racecourse
Shares in issue or unconditionally allotted and fully paid (or credited as fully
paid) on the date of the Increased Offer document and to any further Newbury
Racecourse Shares unconditionally allotted or issued fully paid (or credited as
fully paid) while the Increased Offer remains open for acceptance (or by such
earlier date as GPG Acquisitions may, subject to the city Code or with the
consent of the Panel, determine).

The Increased Offer is conditional on valid acceptances having been received in
respect of such number of Newbury Racecourse Shares which, together with the
Newbury Racecourse Shares held by GPG, carry 50 per cent. or more of the voting
rights normally exercisable at general meetings of Newbury Racecourse.

Newbury Racecourse Shareholders should note that the Increased Offer is also
conditional on no agreement, arrangement or commitment, or amendment to any
existing agreement, having been entered into for the sale or development of any
material real estate asset owned by any member of the Newbury Racecourse Group.
See the paragraph entitled ''Background to, and reasons for, the Offer'' in the
letter

from the Chairman of GPG Acquisitions in Part I of the Original Offer Document
for more information on the reasons behind this condition.

Save for the revised offer price and the revised acceptance condition, the
Increased Offer is being made on the same terms and subject to the same
conditions as set out in the Original Offer Document and the Increased Offer
document, as appropriate.


Enquiries:

GPG Acquisitions No. 5 Limited         Tel: [phone]
Blake Nixon, Director

Strand Partners Limited                Tel: [phone]
Simon Raggett

Citigate Dewe Rogerson                 Tel: [phone]
Kevin Smith

Strand Partners Limited, which is authorised and regulated in the United Kingdom
by the Financial Services Authority, is acting exclusively for GPG Acquisitions
and no one else in connection with the Increased Offer and will not be
responsible to anyone other than GPG Acquisitions for providing the protections
afforded to customers of Strand Partners, or for providing advice in relation to
the Increased Offer or in relation to the contents of this announcement or any
transaction or arrangement referred to herein.

The availability of the Increased Offer to persons not resident in and citizens
of the United Kingdom may be affected by laws of the relevant jurisdictions in
which they are citizens or in which they are resident. Such Overseas
Shareholders should inform themselves about, and observe, any applicable legal
or regulatory requirements of any such relevant jurisdiction. Further details in
relation to Overseas Shareholders are contained in the Original Offer Document.
If you remain in any doubt, you should consult your professional adviser in the
relevant jurisdiction without delay.

In particular, the Increased Offer is not being made, directly or indirectly,
in, into or from or by the use of the mails of or any means or instrumentality
(including, without limitation, by means of facsimile transmission, telex,
telephone, internet or other forms of electronic communication) of interstate or
foreign commerce of, or by any facility of a national, state or other securities
exchange of, the United States, or in, into or from Canada or Australia or any
other jurisdiction if to do so would constitute a violation of the relevant laws
of such jurisdiction, and the Increased Offer will not be capable of acceptance
by any such use, means, instrumentality or facility from or within the United
States, Canada or Australia or any other jurisdiction where to do so would
constitute a breach of any relevant securities laws of that jurisdiction.
Accordingly, copies of this announcement, the Original Offer Document and the
Increased Offer Document are not being, and must not be, mailed or otherwise
distributed or sent in or into or from the United States, Canada or Australia.

This announcement does not constitute, or form part of, an offer to sell or
purchase or an invitation to purchase or subscribe for any securities or the
solicitation of an offer to sell, purchase or subscribe for any securities,
pursuant to the Increased Offer or otherwise. The Increased Offer is being made
solely by way of the Increased Offer document and the related New Form of
Acceptance, which contain the full terms and conditions of the Increased Offer.



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