Open Letter to Chairman

Guinness Peat Group PLC
23 March 2001


The Chairman
PERRY GROUP PLC
Cambridge House
Bluecoats Avenue
Hertford
Hertfordshire
SG14 1PB


Dear Sir

SALE  FOR  £100,000  OF OPTION OVER £33.9m MOTOR  DIVISION  ('THE
OPTION')

Guinness  Peat  Group plc ('GPG') is the largest  shareholder  in
Perry  Group  plc  ('Perry'), with 4.4m shares, which  represents
some 16.7% of its issued capital.

We  have  considered the transaction proposed in the Circular  to
Shareholders  and  thank you for giving  us  the  opportunity  of
discussing it with you.

We  now write to set out the reasons why IT IS INCONCEIVABLE THAT
THE   PROPOSED   TRANSACTION  IS  IN  THE   BEST   INTERESTS   OF
SHAREHOLDERS.

1.   Transaction in effect an Option

     You  have  described the proposed transaction as a 'Disposal
     of the Motor Division'.  THIS IS NOT THE ECONOMIC SUBSTANCE.
     In reality, it amounts to the sale for £100,000 of an option
     over  Perry's £33.9m Motor Division.  This is a miserly  sum
     since the Option is, undoubtedly, worth a multiple of this.

2.   Not a Clean Exit

     Despite  your  statement  that you have  taken  a  strategic
     decision  to exit Motors, the proposed transaction does  not
     provide  a clean exit and instead leaves Perry with exposure
     of  at least £4.5m, (over and above its equity investment of
     £6m) to the future performance of the Motor Division.

3.   Risk substantially Retained

     Notwithstanding  your  assertions  to  the   contrary,   the
     structure  of  the  transaction is such that  Perry  retains
     substantially all the equity risk and a considerable  amount
     of  financing risk but, in direct contrast, has  a  derisory
     level of upside.
     
4.   Inappropriate Timing

     Due  to  publicity associated with 'rip-off' Britain, delays
     in  the  impact of recent government initiatives being  felt
     and  the  difficulties experienced in the Motor Industry  in
     the  last year, we cannot conceive of a worse time  to  have
     attempted the sale of the Motor Division.  The result  is  a
     transaction which destroys millions of pounds in shareholder
     value.

5.   Manageable Debt Position

     You  state  that,  if  the transaction is  not  approved  by
     Shareholders,  'the  Group  may  be  required  to  seek  the
     renegotiation  of  its banking covenants  ..'.   We  do  not
     dispute  that  Perry's  debt  requires  careful  management.
     However, the covenant position seems to us to be largely  of
     Perry's own creation - in particular due to its decision  to
     sell the Motor Division at the bottom of the market.
     
     Perversely  a  non-recourse financial  structure  along  the
     lines  of  the  proposed transaction  would  be  an  elegant
     solution,  retaining all the upside inherent  in  the  Motor
     Division and refinancing Perry's debt facilities at the same
     time.
     
6.   Future Management of Motor Division

     Since  the  proposed  managers of  the  option  vehicle  are
     already  employed  by Perry, the future  management  of  the
     Motor Division is not at issue.

PUT  SIMPLY, THE PROPOSED OPTION IS AN EXCEPTIONAL DEAL  FOR  THE
MANAGERS - IT IS A HEADS THEY WIN, TAILS PERRY LOSES SITUATION.

Remedies

If  the  Board remains determined to pursue an urgent restructure
of Perry's exposure to the Motor Division, there seem to us to be
two  obvious  remedies  for  the  inadequacies  of  the  proposed
transaction:

a)   Restructure  the transaction into a funding  which  is  non-
     recourse  to  Perry,  but using a similar  structure.   This
     would  retain  the  upside of the Motor Division  for  Perry
     whilst involving no greater risk than the proposed option.

b)   Renegotiate the option being granted to the two managers  so
     that  shareholders  are  offered a pro  rata  participation.
     Under  this alternative shareholders would benefit  directly
     from the upside whilst Perry would retain the same risk  and
     return from the deal.

Conclusion

Both  the suggested remedies will require an adjournment  of  the
EGM   on  Monday.   IN  THE  ABSENCE  OF  THIS,  OR  SOME   OTHER
SATISFACTORY  PROPOSAL,  GPG WILL HAVE NO  HESITATION  IN  VOTING
AGAINST THE RESOLUTION TO BE PROPOSED.

Yours faithfully
Guinness Peat Group plc

Blake A Nixon
Executive Director