Merger Offer - Part 1

Evolution Group PLC
30 May 2002

The Evolution Group PLC


30 May 2002





Part 1



This announcement is not for release, publication or distribution in or into the
United States, Canada, Australia or Japan





  RECOMMENDED MERGER OF THE EVOLUTION GROUP PLC WITH BEESON GREGORY GROUP PLC







The Boards of Evolution and Beeson Gregory today announce that they have agreed
terms for a recommended merger of their businesses.



Transaction Highlights



Details of the Merger Offer:



•          The Merger will be achieved through a recommended all share offer to
be made by Altium Capital Limited, on behalf of Evolution, for all of the issued
and to be issued share capital of Beeson Gregory not already owned by Evolution.



•          The Merger Offer will be made on the basis of 1.77 New Evolution
Shares for every 1 Beeson Gregory Share.



•          The Merger Offer values each Beeson Gregory Share at approximately
124 pence and the entire issued and to be issued share capital of Beeson Gregory
(assuming full exercise of the options granted under the Beeson Gregory Share
Option Schemes) at £92.1 million, based on the Closing Price of 70 pence per
Evolution Share on 29 May 2002, the business day immediately prior to the date
of this announcement.



•          The Merger Offer represents a premium of 12.6 per cent. to the
Closing Price of 110 pence per Beeson Gregory Share on 29 May 2002, the business
day immediately prior to the date of this announcement and a premium of 41.6 per
cent. to the Closing Price of 87.5 pence per Beeson Gregory Share on 25 April
2002, the business day before Beeson Gregory announced it had received an
approach which may lead to discussions concerning a potential offer for Beeson
Gregory.



•        As at the date of this announcement, Evolution owns or has received
irrevocable commitments to accept the Merger Offer in respect of 32,265,147
Beeson Gregory Shares (representing approximately 46.7 per cent. of the existing
issued share capital of Beeson Gregory).





Rationale for, and benefits of, the Merger:



•        The boards of Evolution and Beeson Gregory believe there is a
compelling strategic, commercial and financial logic in combining the investment
banking operations of Evolution and Beeson Gregory.



•        The Boards of Evolution and Beeson Gregory believe that the current
polarisation of investment banking activities within the United Kingdom, with
larger banks primarily servicing larger companies, provides an opportunity for
the Enlarged Group to become a leading integrated investment bank servicing
small and mid cap companies.



•        Beeson Gregory's corporate finance capability will facilitate the
generation of additional transaction and advice related revenue from companies
with whom Evolution has relationships through its research activities.



•        The institutional sales operations of Evolution and Beeson Gregory each
have extensive client bases which provide an opportunity to increase combined
revenues through improved distribution channels and increased primary and
secondary commissions.



•        Beeson Gregory operates a market making function which will enhance the
Enlarged Group's trading and execution abilities.



•        Evolution's successful and profitable retail stockbroking and asset
management subsidiary, Christows, will be the Enlarged Group's platform for
developing its retail asset management operations which should provide the
Enlarged Group with a more predictable revenue stream.



•        Both Evolution and Beeson Gregory are committed to IP2IPO and its
strategy of exploiting intellectual property created by academic institutions.
The Enlarged Group will control approximately 84 per cent. of the issued share
capital of IP2IPO and will seek to establish further university partnerships to
create additional value for shareholders.



•        The Enlarged Group will seek to reduce combined overheads through the
elimination of duplicate costs.



•        The Enlarged Group will be well capitalised with combined cash balances
of approximately £37 million (net of debt and before taking into account any
merger costs) as at 30 April 2002.



The Enlarged Group intends to move to the Official List at the first appropriate
opportunity.  It also intends to restructure its share capital as soon as is
practicable to enable it to pay dividends out of future profits.





Management



Following the Merger Offer becoming or being declared unconditional in all
respects, the directors of the Enlarged Group will be:


Name                        Position

Andrew Beeson*              Chairman
Alex Snow                   Chief Executive Officer
Graeme Dell                 Group Finance Director
Richard Griffiths           Director
David Norwood*              Director
Oliver Vaughan              Non Executive Director
Sir Malcolm Field*          Non Executive Director
George Loudon*              Non Executive Director



* Proposed Directors who will join the Evolution Board from Beeson Gregory upon
the Merger Offer becoming or being declared unconditional in all respects.



Conditionally upon the Merger Offer becoming or being declared unconditional in
all respects, James Chilcott will step down as a director of Evolution but will
remain with the Enlarged Group as an integral part of the research department,
leading the IP exploitation franchise.



Commenting on the Merger, Alex Snow, Chairman and Chief Executive Officer of
Evolution Group, said:



'The merger of our two businesses will create a leading, independent and fully
integrated investment bank with a strong retail asset management business.  The
Enlarged Group will be able to offer a full range of investment banking services
to our corporate and institutional client base from an enlarged platform.  I am
confident of the Enlarged Group's ability to capitalise on the numerous
opportunities within the small to mid cap space and look forward to leading a
management team which is dedicated to the maximisation of shareholder value.'



Andrew Beeson, Chairman of Beeson Gregory, commented:



'The combination of the two businesses' relative strengths and expertise,
together with our joint commitment to IP2IPO, will provide a powerful investment
banking force within the small to mid cap arena.  While the Enlarged Group's
client base will benefit from the additional services provided, shareholders
should see this merger as excellent positioning for enhanced financial returns.'





THIS SUMMARY SHOULD BE READ IN CONJUNCTION WITH THE FULL TEXT OF THE FOLLOWING
ANNOUNCEMENT ABOUT THE MERGER OFFER WHICH SETS OUT FURTHER DETAILS OF THE MERGER
OFFER.


Enquiries:

The Evolution Group PLC                              Tel: [phone]
Alex Snow
Richard Griffiths
Graeme Dell

Altium Capital Limited                               Tel: [phone]
Garry Levin
Ben Bailey
Sam Fuller

Hogarth Partnership Limited                          Tel: [phone]
Andrew Jaques
Georgina Briscoe

Beeson Gregory Group PLC                             Tel: [phone]
Andrew Beeson
Charles Byford

UBS Warburg                                          Tel: [phone]
Michael Del Mar
Christopher Fox
Rachael Young

Buchanan Communications                              Tel: [phone]
Richard Oldworth
Nicola Cronk



Altium Capital Limited is acting for Evolution and no one else in connection
with the Merger Offer and will not be responsible to anyone other than Evolution
for providing the protections afforded to clients of Altium Capital, nor for
providing advice in relation to the Merger Offer or the New Evolution Shares.



UBS Warburg is acting for Beeson Gregory and no one else in connection with the
Merger Offer and will not be responsible to anyone other than Beeson Gregory for
providing the protections afforded to clients of UBS Warburg, nor for providing
advice in relation to the Merger Offer.



The availability of the Merger Offer to persons who are not resident in the
United Kingdom may be affected by the laws of the relevant jurisdiction. Persons
who are not resident in the United Kingdom should inform themselves about and
observe any applicable requirements of the relevant jurisdictions.



This announcement does not constitute an offer of securities for sale in the
United States and the New Evolution Shares have not been, and will not be,
registered under the United States Securities Act of 1933, as amended, nor under
any laws of any state of the United States, and the relevant clearances have not
been and will not be obtained from the relevant authorities in Canada, Australia
or Japan.  Accordingly, New Evolution Shares may not be offered, sold or
delivered, directly or indirectly, in or into the United States, Canada,
Australia or Japan except pursuant to exemptions from applicable requirements of
such jurisdictions.



The Merger Offer will not be made, directly or indirectly, in or into, by use of
mails or any means of instrumentality (including, without limitation, facsimile
transmissions, telex, telephone or email) or interstate or foreign commerce of,
or any facilities of a securities exchange of, the United States nor is it being
made in or into Canada, Australia or Japan and the Merger Offer will not be
capable of acceptance by any such use, means, instrumentality or facilities or
from or within the United States, Canada, Australia or Japan.  Accordingly,
copies of this press announcement are not being, and must not be, mailed or
otherwise distributed or sent in, into or from the United States, Canada,
Australia or Japan and persons receiving this press announcement (including
custodians, nominees and trustees) must not distribute or send it in, into or
from the United States, Canada, Australia or Japan.



Appendix IV contains the definitions used in this announcement.



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







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

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