Offer for Kensington Group

Investec PLC
30 May 2007


Not for release, publication or distribution, in whole or part, in, into or from
any jurisdiction where to do so would constitute a violation of the relevant
laws of such jurisdiction.





For immediate release


30 May 2007


                            RECOMMENDED SHARE OFFER

                             for the acquisition of

                              KENSINGTON GROUP PLC

                                       by

                                  INVESTEC PLC

               to be effected by means of a Scheme of Arrangement
                   under section 425 of the Companies Act 1985


Summary


   • The combined boards of Investec plc ('Investec') and Investec Limited
    and the board of Kensington Group plc ('Kensington') are pleased to announce
    that they have reached agreement on the terms of the recommended acquisition
    of the entire issued and to be issued share capital of Kensington by
    Investec (the 'Offer'). It is intended that the Offer be implemented by way
    of a scheme of arrangement under section 425 of the Companies Act.


   • Under the terms of the Offer, each Kensington Shareholder will receive
    0.7 Investec Share plus a special dividend of 26 pence (payable by
    Kensington) for each Kensington Share, valuing each Kensington Share at
    519.5 pence per share based on an Investec Share price of 705 pence per
    share on 29 May 2007, being the last Business Day prior to the making of
    this announcement, and the entire issued and to be issued share capital of
    Kensington at approximately £283 million. The new Investec Shares will not
    qualify for the final dividend of 13p per Investec Share that the combined
    boards of Investec and Investec Limited have proposed for the financial year
    ended 31 March 2007.


   • The new Investec Shares to be issued as part of the Offer are expected
    to represent approximately 5.8 per cent. of the aggregate issued share
    capital of Investec and Investec Limited as enlarged by the acquisition of
    Kensington.


   • Investec's stronger balance sheet, access to lower cost of funding, and
    capital markets expertise, together with Kensington's recognised brand,
    established distribution, innovative product range, prudent risk management
    and track record for service excellence, create a strong combination for the
    growing non-standard mortgage marketplace.


   • The Investec Group is an international specialist banking group that
    provides a diverse range of financial products and services to niche clients
    in three principal markets, the United Kingdom, Australia and South Africa,
    as well as certain other geographies. The Investec Group has five core
    business divisions: Investment Banking, Capital Markets, Private Client
    Activities, Asset Management and Property Activities. Upon completion of the
    Offer, Kensington will become part of Investec's Capital Markets division,
    which reported strong growth in operating profit before goodwill and
    non-operating items of 75.3 per cent to £117.3 million in the financial year
    ended 31 March 2007.


   • Founded in 1995, Kensington is a specialist lender offering first and
    second charge mortgages. Kensington specialises in lending to people who do
    not conform to the rigid criteria of traditional lenders, such as the
    self-employed, contractors, older borrowers, temporary employees and those
    with an adverse credit history. The Kensington Group includes two
    wholly-owned subsidiaries which trade as Kensington Mortgages and Kensington
    Secured Loans and its Money Partners joint venture; in addition, Kensington
    also operates in Ireland through its subsidiary Start Mortgages Holding
    Limited and in Sweden through its associate BlueStep Bostadslan AB.


   • The combined boards of Investec and Investec Limited expect the
    acquisition of Kensington to be earnings enhancing before synergies in the
    first full year after completion. This statement should not be interpreted
    to mean that per share earnings of the Investec Group for the current or
    future financial years, or those of the combined group, will necessarily
    match or exceed the historical published per share earnings of the Investec
    Group.


   • The Kensington Directors, who have been so advised by Rothschild,
    consider the terms of the Offer to be fair and reasonable. In providing its
    advice to the Kensington Directors, Rothschild has taken into account the
    commercial assessments of the Kensington Directors. Accordingly, the board
    of Kensington has unanimously agreed to recommend Kensington Shareholders to
    vote in favour of the resolutions to be proposed at the Court Meeting and
    the Extraordinary General Meeting, as they have irrevocably undertaken to do
    in respect of their own registered shareholdings, and to direct, where
    possible, or otherwise use their reasonable endeavours to arrange, that the
    registered holder should vote in favour in relation to their other
    beneficial shareholdings. The aggregate beneficial holdings of the
    Kensington Directors amount to 199,566 Kensington Shares, representing
    approximately 0.4 per cent. of Kensington's entire issued share capital.


   • Subject to the satisfaction or, where relevant, waiver of the Conditions
    set out in Appendix I, the Scheme is expected to become Effective by the end
    of August 2007.


Stephen Koseff, Chief Executive of Investec, commented:


'The proposed acquisition of Kensington is in line with our stated objectives
and reinforces our successful Capital Markets business. We are confident that
under our ownership, the Kensington franchise will be reinvigorated and that our
combined businesses will be well placed to benefit from the growth of the
non-standard mortgage market.'


Bernard Kantor, Managing Director of Investec, commented:


'We look forward to welcoming Kensington, and its employees led by Alison
Hutchinson, to the Investec group. We have been impressed by the enthusiasm of
Kensington's management and staff, who share our vision of creating a
distinctive, specialist banking group delivering superior service and products
to our customers.'


Peter Birch, Chairman of Kensington, commented:


'This offer secures the future of Kensington within a stronger group with
complementary capabilities and at a fair price, and enables shareholders to
share in the value to be created by the combination.


The Investec Group is a strong specialist lender and will be bringing its
entrepreneurial culture, robust risk management discipline and competitive
funding to boost Kensington's acceleration into new products, channels and
markets. I am confident that Kensington's attractive franchise will prosper
under Investec's ownership, and that it will be well placed to capture the
considerable opportunities in the specialist lending arena.'


Citi is acting as sole financial adviser to Investec. Rothschild is acting as
sole financial adviser to Kensington. Merrill Lynch is acting as broker to
Investec. Panmure Gordon is acting as broker to Kensington.


This summary should be read in conjunction with the full text of the attached
announcement. Appendix I to the announcement contains the conditions to the
Offer. Appendix II contains details of the sources of information and basis of
certain information set out in the announcement. Appendix III details those
Kensington Directors giving irrevocable undertakings and Appendix IV contains
definitions of certain expressions used in this summary and in the announcement.



Enquiries:


Investec                                                  Tel: [phone]
Stephen Koseff, Chief Executive Officer
Bernard Kantor, Managing Director
Bradley Fried, Chief Executive Officer, Investec Bank (UK) Limited

Citi (financial adviser to Investec)                           [phone]
Christopher Williams
Andrew Reiniger
David Plowman

Merrill Lynch (corporate broker to Investec)                   [phone]
Andrew Fairclough
Will Smith

Citigate (public relations adviser to Investec)                [phone]
Jonathan Clare
Tom Baldock

Kensington [phone]
Alison Hutchinson, Group Chief Executive
Roger Blundell, Group Finance Director

Rothschild (financial adviser to Kensington)                   [phone]
Robert Leitao
Stuart Vincent

Panmure Gordon (corporate broker to Kensington)                [phone]
Tim Linacre

Financial Dynamics (public relations adviser to Kensington)    [phone]
Geoffrey Pelham-Lane
Charles Gorman


Citigroup Global Markets Limited ('Citi'), which is authorised and regulated in
the UK by the Financial Services Authority, is acting exclusively as financial
adviser for Investec and no one else in connection with the Offer and will not
be responsible to anyone other than Investec for providing the protections
afforded to clients of Citigroup Global Markets Limited or for providing advice
in relation to the Offer or any other matters referred to in this announcement.


Merrill Lynch International ('Merrill Lynch'), which is authorised and regulated
in the UK by the Financial Services Authority, is acting exclusively as
corporate broker for Investec and no one else in connection with the Offer and
will not be responsible to anyone other than Investec for providing the
protections afforded to clients of Merrill Lynch International or for providing
advice in relation to the Offer or any other matters referred to in this
announcement.


N M Rothschild & Sons Limited ('Rothschild'), which is authorised and regulated
in the UK by the Financial Services Authority, is acting exclusively as
financial adviser for Kensington and no one else in connection with the Offer
and will not be responsible to anyone other than Kensington for providing the
protections afforded to clients of Rothschild or for providing advice in
relation to the Offer or any other matters referred to in this announcement.


Panmure Gordon (UK) Limited ('Panmure Gordon'), which is authorised and
regulated in the UK by the Financial Services Authority, is acting exclusively
as corporate broker for Kensington and no one else in connection with the Offer
and will not be responsible to anyone other than Investec for providing the
protections afforded to clients of Panmure Gordon or for providing advice in
relation to the Offer or any other matters referred to in this announcement.


Further information on the Offer


This announcement is not intended to and does not constitute an offer or
invitation to purchase, sell or exchange any securities or the solicitation of
any vote or approval in any jurisdiction pursuant to the Offer or otherwise, nor
shall there be any purchase, sale or exchange of securities or such solicitation
in any jurisdiction in which such offer, solicitation or sale or exchange would
be unlawful prior to registration or qualification under the laws of such
jurisdiction.


This announcement does not constitute a prospectus or prospectus equivalent
document.


The Offer will be made solely through the Scheme Document, which will contain
the full terms and conditions of the Scheme, including details of how to vote in
favour of the Scheme. Kensington will prepare the Scheme Document to be
distributed to Kensington Shareholders. Kensington and Investec urge Kensington
Shareholders to read the Scheme Document when it becomes available because it
will contain important information relating to the Offer.


The availability of the Offer to Kensington Shareholders who are not resident in
the United Kingdom may be affected by the laws of the relevant jurisdictions in
which they are located. Persons who are not resident in the United Kingdom
should inform themselves of, and observe, any applicable requirements. Further
details in relation to overseas persons who are Kensington Shareholders will be
contained in the Scheme Document.


Any securities to be offered pursuant to the Offer as described in this
announcement have not been and will not be registered under the US Securities
Act, or under the securities laws of any state, district or other jurisdiction
of the United States, or of Canada, Japan and Australia. Accordingly, such
securities may not be offered, sold or delivered, directly or indirectly, in or
into such jurisdictions except pursuant to exemptions from applicable
requirements of such jurisdictions.


The release, publication or distribution of this announcement in jurisdictions
other than the UK may be restricted by law and therefore any persons who are
subject to the laws of any jurisdiction other than the UK should inform
themselves about, and observe, any applicable requirements. Any failure to
comply with the applicable restrictions may constitute a violation of the
securities laws of any such jurisdiction. To the fullest extent permitted by
applicable law, the companies involved in the proposed Offer disclaim any
responsibility or liability for the violation of such restrictions by any
person.


This announcement has been prepared for the purpose of complying with English
law and the applicable rules and regulations of the Financial Services
Authority, the London Stock Exchange and the Panel and the information disclosed
may not be the same as that which would have been disclosed if this announcement
had been prepared in accordance with the laws of jurisdictions outside the UK.


US Kensington Shareholders should note that the Scheme will relate to the shares
of a UK company that is a 'foreign private issuer' as defined under the Rule
3b-4 under the US Securities Exchange Act 1934, as amended (the 'Exchange Act'),
and will be governed by English law. Accordingly, neither the proxy solicitation
nor the tender offer rules under the Exchange Act will apply to the Scheme.
Moreover, the Scheme will be subject to the disclosure requirements and
practices applicable in the UK to schemes of arrangement, which differ from the
disclosure requirements of the US proxy solicitation rules and tender offer
rules. Financial information included in the Scheme documentation will have been
prepared in accordance with accounting standards applicable in the UK that may
not be comparable to the accounting standards applicable to financial statements
of US companies. If Investec exercises its right to elect to effect the Offer by
way of a Takeover Offer, the Offer will be made in compliance with applicable US
securities laws and regulations.


Persons receiving copies of this announcement and all other documents relating
to the Offer (including, without limitation, nominees, trustees and custodians)
should observe the above restrictions and must not mail, or otherwise forward,
distribute or send such documents in, into or from any such jurisdiction in
violation of these restrictions and applicable laws. Any person (including,
without limitation, any custodian, nominee and trustee) who would, or otherwise
intends to, or who may have a contractual or legal obligation to, forward this
announcement and/or the Scheme Document and/or any other related document to any
jurisdiction outside the United Kingdom should inform themselves of, and
observe, any applicable legal or regulatory requirements of their jurisdiction.


Forward-looking statements


This announcement, including information included or incorporated by reference
in this announcement, may contain 'forward-looking statements', including for
the purposes of the US Private Securities Litigation Reform Act of 1995,
concerning the Investec Group and the Kensington Group. All statements other
than statements of historical fact included in this announcement may be forward
looking statements. Without limitation, any statements preceded or followed by
or that include the words 'will', 'may', 'should', 'continue', 'believes',
'expects', 'intends', 'anticipates' or words of similar substance or the
negative thereof, are forward-looking statements.


The forward-looking statements are not guarantees of future performance and
involve known and unknown risks and uncertainties and other factors which could
cause them to differ materially from the actual results, performance or
achievements expressed or implied by such forward-looking statements. Many of
these risks and uncertainties relate to factors that are beyond the companies'
abilities to control or estimate precisely, such as future market conditions and
the behaviours of other market participants, and therefore undue reliance should
not be placed on such statements. Investec and Kensington assume no obligation
and do not intend to update these forward-looking statements, except as required
pursuant to applicable law.


Dealing disclosure requirements


Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes,
'interested' (directly or indirectly) in 1 per cent. or more of any class of
'relevant securities' of Investec or Kensington, all 'dealings' in any 'relevant
securities' of that company (including by means of an option in respect of, or a
derivative referenced to, any such 'relevant securities') must be publicly
disclosed by no later than 3.30 pm (London time) on the Business Day following
the date of the relevant transaction. This requirement will continue until the
Effective Date or the date on which the Scheme is withdrawn. If two or more
persons act together pursuant to an agreement or understanding, whether formal
or informal, to acquire an 'interest' in 'relevant securities' of Investec or
Kensington, they will be deemed to be a single person for the purpose of Rule
8.3.


Under the provisions of Rule 8.1 of the City Code, all 'dealings' in 'relevant
securities' of Investec or Kensington by Investec or Kensington, or by any of
their respective 'associates', must be disclosed by no later than 12.00 noon
(London time) on the Business Day following the date of the relevant
transaction.


A disclosure table, giving details of the companies in whose 'relevant'
securities 'dealings' should be disclosed and the number of such securities in
issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.


'Interests in securities' arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the prices of
securities. In particular, a person will be treated as having an 'interest' by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.


Terms in quotation marks are defined in the City Code, which can also be found
on the Panel's website. If you are in any doubt as to whether or not you are
required to disclose a 'dealing' under Rule 8, you should consult the Panel.



Not for release, publication or distribution, in whole or part, in, into or from
any jurisdiction where to do so would constitute a violation of the relevant
laws of such jurisdiction.


For immediate release


30 May 2007


                            RECOMMENDED SHARE OFFER

                             for the acquisition of

                              KENSINGTON GROUP PLC

                                       by

                                  INVESTEC PLC

               to be effected by means of a Scheme of Arrangement
                  under section 425 of the Companies Act 1985



1.        Introduction


The combined boards of Investec plc ('Investec') and Investec Limited and the
board of Kensington Group plc ('Kensington') are pleased to announce that they
have reached agreement on the terms of the recommended acquisition of the entire
issued and to be issued share capital of Kensington by Investec (the 'Offer').


The Investec Group is an international, specialist banking group that provides a
diverse range of financial products and services to niche clients in three
principal markets, the United Kingdom, Australia and South Africa, as well as
certain other geographies.


Founded in 1995, Kensington is a specialist lender offering first and second
charge mortgages. Kensington specialises in lending to people who do not conform
to the rigid criteria of traditional lenders, such as the self-employed,
contractors, older borrowers, temporary employees and those with an adverse
credit history. The Kensington Group includes two wholly-owned subsidiaries
which trade as Kensington Mortgages and Kensington Secured Loans and its Money
Partners joint venture; in addition, Kensington also operates in Ireland through
its subsidiary Start Mortgages Holding Limited and in Sweden through its
associate BlueStep Bostadslan AB.


Further information on the Investec Group is set out in paragraph 8 to this
announcement and further information on the Kensington Group is set out in
paragraph 9.


2.        Summary of the Offer


It is intended that the Offer be implemented by way of a scheme of arrangement
under section 425 of the Companies Act.


Under the Offer, which will be subject to the Conditions set out in Appendix I
to this announcement and to the further terms and conditions to be set out in
the Scheme Document, Kensington Shareholders will receive:


For each Kensington Share:     0.7 Investec Share plus a special dividend of 26
                               pence payable by Kensington


The terms of the Offer value each Kensington Share at 519.5 pence and the entire
issued and to be issued share capital of Kensington at approximately £283
million, based on the closing share price of Investec of 705 pence per share on
29 May 2007, being the last Business Day prior to the making of this
announcement.


The value of 519.5 pence for each Kensington Share represents a premium of
approximately 6.0 per cent. over the closing price of 490 pence per Kensington
Share on 29 May 2007, being the last Business Day prior to the making of this
announcement.


The new Investec Shares to be issued under the Scheme are expected to represent
approximately 5.8 per cent. of the aggregate issued share capital of Investec
and Investec Limited as enlarged by the acquisition of Kensington.


The new Investec Shares will be issued credited as fully paid and will rank pari
passu in all respects with existing Investec Shares and will be entitled to all
dividends and other distributions declared, made or paid by Investec by
reference to a record date on or after the Effective Date, provided that the new
Investec Shares will not qualify for the final dividend of 13p per Investec
Share that the combined boards of Investec and Investec Limited have proposed
for the financial year ended 31 March 2007. The new Investec Shares will be
issued on the Scheme becoming effective to Kensington Shareholders on the
register at the close of business on the day prior to the Effective Date.
Kensington Shareholders will receive the special dividend of 26 pence per
Kensington Share payable by Kensington subject to the Scheme becoming effective.
The special dividend will be paid within 14 days of the Effective Date to
Kensington Shareholders on the register at the close of business on the day
prior to the Effective Date.


Fractions of new Investec Shares will not be allotted or issued pursuant to the
Offer and will be disregarded.



3.        Recommendation


The Kensington Directors, who have been so advised by Rothschild, consider the
terms of the Offer to be fair and reasonable. In providing its advice to the
Kensington Directors, Rothschild has taken into account the commercial
assessments of the Kensington Directors.

Accordingly, the board of Kensington has unanimously agreed to recommend that
Kensington Shareholders vote in favour of the resolutions to be proposed at the
Court Meeting and the Extraordinary General Meeting, as they have irrevocably
undertaken to do in respect of their own registered shareholdings, and to
direct, where possible, or otherwise use their reasonable endeavours to arrange,
that the registered holder should vote in favour in relation to their other
beneficial shareholdings. The aggregate beneficial holdings of the Kensington
Directors amount to 199,566 Kensington Shares, representing approximately 0.4
per cent. of Kensington's entire issued share capital.


4.        Background to and reasons for the Offer


The Investec Group's mission is to be a distinctive specialist banking group.
The Investec Group does not seek to be all things to all people and aims to
build well-defined, value-added businesses that serve the needs of select market
niches where it can compete effectively. This distinction is embodied in the
Investec Group's entrepreneurial culture, which is balanced by a strong risk
management discipline, client-centric approach and ability to be nimble,
flexible and innovative.


The Investec Group aims to pursue a long-term sustainable growth strategy. The
Investec Group aims to deliver on its stated financial targets, through a focus
on organically enhancing and expanding its position where it has significant
scale within its five core areas of activity and three core geographic areas of
operation. In addition the Investec Group has continued to evaluate and consider
'bolt-on' acquisition opportunities that deliver competitive advantages quickly
and efficiently..


In this regard, a core area of focus for the Investec Group has been the
development of specialist principal finance and securitisation activities in the
UK, Europe and South Africa. These activities are conducted by Investec's
Capital Markets (formerly known as Treasury and Specialised Finance) division,
and have primarily focused on:


   •the securitisation of assets originated by Investec's Private Banking and
    Capital Markets division;
   •structuring, advising on and implementing third party securitisations;
    and
   •the development of relationships with third party originators in order to
    facilitate the warehousing and subsequent securitisation of third party
    assets.


Investec has built its principal finance and securitisation activities over the
past two years through the recruitment of a dedicated team and the establishment
of exclusive relationships with two non-conforming mortgage originators,
Infinity Mortgages and Unity Homeloans Group Limited. Investec has a holding of
25 per cent in the latter and has provided these lenders with access to
warehouse funding. In addition to mortgages originated through Infinity and
Unity, Investec has also acquired mortgage portfolios from Amber Homeloans in
order to facilitate the securitisation of these assets. Investec has securitised
mortgages worth £550 million since the launch of the franchise. To date Investec
has completed £3 billion of securitisations in its UK principal finance business
across the entire range of activities.


The Capital Markets division has successfully leveraged its platforms and
enhanced its capabilities through the introduction of a number of new
initiatives, such as its principal finance and securitisation activities, and
achieved a 55 per cent compound annual growth rate in operating profit before
tax over the past four financial years. In the financial year ended 31 March
2007, the Capital Markets division posted a significant increase in operating
profit before goodwill and non-operating items of 75.3 per cent to £117.3
million (2006: £66.9 million). Growth was underpinned by a solid performance
from the division's advisory, structuring, asset creation, trading and
distribution activities, with average advances increasing by 22.2 per cent to
£3.0 billion (2006: £2.5 billion). A number of the businesses that have been
established over the past two years have generated substantial revenue and have
increased the scale of the franchise..


The combined boards of Investec and Investec Limited believe that the Offer
offers Investec an attractive bolt-on acquisition that, based on the last
reported full year financial results of both companies, would have represented
9 per cent. of the Investec Group's total assets (excluding loans subject to
securitisation). In addition, Kensington adds a strong mortgage origination
platform and a significantly enhanced presence in the non-standard mortgage
market in the UK, Ireland and Sweden, and will provide Investec's principal
finance and securitisation activities with a number of attractive opportunities.


Investec has a high regard for the Kensington franchise, in particular:


   • Kensington's strong market position, established distribution capability
    and innovative product range has enabled it to complete new advances in
    excess of £4 billion in the financial year ended 30 November 2006;
   • Kensington's recognised brand and market presence, coupled with its
    prudent risk management; and
   • Kensington's track record for service excellence, which has been
    re-confirmed by Fitch at the highest residential mortgage special servicer
    rating in Europe granted to date.


Investec believes that the transaction represents a compelling strategic fit. It
is a bolt-on acquisition, delivering increased scale in a market in which it is
already present.


Investec has undertaken an extensive due diligence of Kensington's existing
mortgage book, and operations, and is confident of Kensington's future prospects
under its ownership. Investec will provide Kensington with access to a stronger
balance sheet, subject to strict allocation criteria, access to lower funding
costs and capital markets expertise.


Investec has identified tangible opportunities for value creation, including the
elimination of head office costs and duplicated functions,, in addition to the
initiatives announced by Kensington today, as well as funding cost benefits. In
addition, leveraging Investec's stronger balance sheet will provide the option
to write higher quality business and to reduce the proportion of whole loan
sales. Investec believes that integration will be a straightforward process,
leveraging Investec's extensive integration experience.


The combined boards of Investec and Investec Limited expect the acquisition of
Kensington to be earnings enhancing before synergies in the first full year
following completion. This statement should not be interpreted to mean that per
share earnings of the Investec Group for the current or future financial years,
or those of the combined group, will necessarily match or exceed the historical
published per share earnings of the Investec Group. There will be no changes to
the Investec Group's financial objectives as a result of this transaction.


5.        Background to and reasons for the recommendation


On 19 February 2007, Kensington announced that it was continuing its review of
the group considering the best options to maximise shareholder value and on 23
March 2007 it confirmed that it was continuing in discussions with a number of
parties who had approached it. The Kensington Directors believe that Investec's
offer secures Kensington's future as part of a stronger group with complementary
capabilities at a fair price.


The specialist mortgage market has become increasingly competitive, particularly
from providers with access to lower cost funding Together with the high level of
'teaser' discounts in the UK market - which reduce the margins paid by customers
in the initial lending period - this has put significant downward pressure on
new business margins, whilst at the same time, customer behaviour has changed
with more borrowers waiting until the end of the initial lending period before
switching to another product or lender. This has reduced Kensington's income
from early redemption charges which has historically been a significant part of
Kensington's income. Kensington expects that there will be continued pressure on
the Kensington Group's net interest margin as existing higher margin mortgages
redeem and are replaced by the lower margin loans currently being written.


Details on Kensington's trading for the five months ended 30 April 2007 were
released separately by Kensington today. In that announcement, Kensington stated
that 'the board is cautious about the short-term prospects for the Group and
expects 2007 total revenue to be significantly below 2006.'


As mentioned in that release, the board of Kensington believes that Kensington's
cost base is too high as a percentage of income. In addition, restrictions under
Kensington's warehouse funding arrangements have limited Kensington's ability to
develop new product lines. As a result, Kensington has announced today a number
of immediate important initiatives:


   • a cost reduction programme targeting annualised savings in the region of
    £8 million to be delivered by the end of two years, including the
    elimination of certain duplicated functions across the Kensington Group and
    the automation of certain business processes;
   • a £9 million capital investment in information technology to increase
    automation, enhance efficiency and improve competitiveness at the point of
    sale; and
   • entry into a number of market segments where, subject to making
    appropriate funding arrangements, Kensington will be able to leverage its
    existing distribution platform and underwriting skills.


Kensington's principal funding source of working capital has been to raise debt
secured against the Kensington Group's retained interests in its securitised
mortgage book. This funding has been used to support writing new business,
contribute to Kensington overheads and finance investments in new initiatives.
Historically, on completion of a securitisation Kensington was able to raise
debt to cover all of the origination costs of the mortgages and the
securitisation costs including a contribution of collateral to the
securitisation vehicles. As the value of new business has reduced, Kensington is
no longer able to raise sufficient debt to cover all of these initial costs and
therefore requires working capital to be found from other sources. As a result
of this financing constraint, Kensington has increased the proportion of whole
loan sales which generate cash on disposal. The Kensington Directors expect that
in the region of 60 per cent. of Kensington's lending in 2007 (approximately 25
per cent. in 2006) will be sold.


One consequence of the business review is that the board of Kensington has come
to the view that as an independent entity, the Kensington Group may not be able
to raise sufficient capital in the debt markets to support significant growth in
the size of the managed loan book.


The Kensington Directors believe that the combination of Investec's stronger
balance sheet, access to lower cost of funding and capital markets expertise,
together with Kensington's recognised brand, established distribution,
innovative product range, prudent risk management and track record for excellent
service will create a strong combination for the growing non-standard mortgage
marketplace.


As the consideration for Kensington is primarily in the form of shares,
Kensington Shareholders will have an opportunity to share in value created from
the combination and will also benefit from Investec's broader franchise across a
range of markets and geographies.

6.        Directors' irrevocable undertakings


Each of Peter Birch, Alison Hutchinson and Gareth Jones, who are the only
Kensington Directors holding Kensington Shares, has irrevocably undertaken to
vote in favour of the resolutions to be proposed at the Court Meeting and the
Extraordinary General Meeting in respect of their registered holdings of
Kensington Shares, and to direct, where possible, or otherwise use their
reasonable endeavours to arrange, that the registered holder should vote in
favour in relation to their other beneficial shareholdings. Further details are
set out in Appendix III to this announcement.


7.        Implementation Agreement


Kensington and Investec have today entered into the Implementation Agreement
which provides, among other things, for the implementation of the Scheme and
contains assurances and confirmations between the parties, including provisions
to implement the Scheme on a timely basis and governing the conduct of the
business of Kensington. In particular, the Implementation Agreement contains the
following principal provisions:


Termination provisions


The Implementation Agreement may, subject to compliance with the City Code and
the requirements of the Panel, terminate in certain circumstances, including:

(a)                in the event such termination is agreed in writing between
Kensington and Investec at any time before the Effective Date;

(b)                upon service of a written notice by one party to the other
party in the event of a material breach by the other party of any of the
obligations set out in the Implementation Agreement which, if capable of remedy,
it has failed to remedy within seven Business Days of a written notice from the
other party requesting the same;

(c)                upon the delivery of a notice in writing from one party to
the other if it is announced by or on behalf of Kensington that the Kensington
Directors have determined not to give, or to withdraw, modify or qualify its
recommendation of the Offer;

(d)                upon the Offer lapsing;

(e)                if an Alternative Proposal (or any amendment, variation or
revision of such Alternative Proposal) becomes or is declared wholly
unconditional or is completed or a scheme in connection with such Alternative
Proposal becomes Effective;

(f)                 if the Kensington Shareholders do not vote to approve the
Acquisition at the Court Meeting or the EGM Resolution is not approved at the
Extraordinary General Meeting;

(g)                if the Court Order(s) are not granted or (save as the parties
may otherwise agree in writing) the Effective Date has not occurred on or before
28 September 2007; and

(h)                if Investec elects, in accordance with the provisions of the
Implementation Agreement, to implement the Offer by way of Takeover Offer, if
the Takeover Offer, once announced under Rule 2.5 of the City Code, lapses in
accordance with its terms or is withdrawn or not made.


Break fee arrangements

In the event that the Implementation Agreement terminates after the release of
this announcement as a result of (a) a material beach by Kensington of any of
the obligations set out in the Implementation Agreement which, if capable of
remedy, it has failed to remedy within seven Business Days of a written notice
from Investec requesting the same; or (b) the occurrence of any of the events
contemplated by (i) paragraph (c) or (e) above; or (ii) paragraph (f) or (g)
above arising as a result of a material breach by Kensington falling within (a),
then Kensington shall pay to Investec a break fee of 1 per cent of the value of
the Offer.


Further information regarding the Implementation Agreement will be set out in
the Scheme Document.

8.        Information on the Investec Group


The Investec Group is an international, specialist banking group that provides a
diverse range of financial products and services to niche clients in three
principal markets, the UK, Australia and South Africa, as well as certain other
geographies. The Investec Group comprises the following business divisions:


   • Investment Banking
   • Capital Markets
   • Private Client Activities
   • Asset Management
   • Property Activities


Since the Investec Group was founded in South Africa in 1974, it has expanded
through a combination of substantial organic growth and a series of strategic
acquisitions in South Africa, the UK and Australia, and other geographies in
which the Investec Group operates. The Investec Group's strategic goals and
objectives are motivated by the desire to develop an efficient and integrated
business on an international scale through the active pursuit of clearly
established core competencies in the group's principal business areas. The
Investec Group's philosophy has been to build well-defined, value-added
businesses focusing on serving the needs of select market niches where the group
can compete effectively. The Investec Group employs approximately 5,400 people
world-wide.


In July 2002, the Investec Group implemented a dual listed company structure
with listings on the London and Johannesburg Stock Exchanges. The combined
group's current market capitalisation is approximately £4.3 billion.


For the year ended 31 March 2007, the Investec Group reported total profit
before tax (before goodwill and exceptional items) of £466.6 million, assets of
£26.3 billion and total capital resources of £2.7 billion.


9.        Information on the Kensington Group


Founded in 1995, Kensington is a specialist lender offering first and second
charge mortgages. Kensington specialises in lending to people who do not conform
to the rigid criteria of traditional lenders, such as the self-employed,
contractors, older borrowers, temporary employees and those with adverse credit
history.

The Kensington Group includes two wholly-owned subsidiaries which trade as
Kensington Mortgages and Kensington Secured Loans and its Money Partners joint
venture; its subsidiary Start Mortgages in Ireland; and its associate Bluestep
in Sweden.

Kensington completed £4,066 million of loans in 2006 and has completed over
150,000 loans and advanced more than £14 billion of mortgages since 1995. As at
30 April, 2007, Kensington had mortgage assets under management of £7.1 billion.

For the financial year ended 30 November 2006, Kensington reported total revenue
of £202.0 million and generated group profit before tax and goodwill impairment
of £65.2 million and earnings per share (excluding tax adjustments in respect of
prior periods and goodwill impairment) of 86.6 pence. Reported profit before
taxation amounted to £49.1 million, earnings attributable to shareholders
amounted to £36.3 million and basic earnings per share amounted to 69.5 pence.
Kensington reported net assets of £180.3 million as at 30 November 2006 and
total assets of £8,101.4 million. Excluding mortgage loans subject to
securitisation less provision for impairment, total assets as at 30 November
2006 amounted to £2,481.6 million.


10.    Management and employees of Kensington


Investec attaches great importance to the skills and experience of the current
management team and employees of Kensington. Accordingly, Investec intends that
Alison Hutchinson and other members of the management team will continue to be
involved in the ongoing business following the completion of the Offer. The
board of Investec confirms that it intends to safeguard the existing employment
rights, including pension rights, of all employees of Kensington.


11.    Kensington Share Schemes


At the same time as, or as soon as practicable following, publication of the
Scheme Document, Kensington will write to participants in the Kensington Share
Schemes to inform them of the effect of the Offer on their rights under the
Kensington Share Schemes and to set out appropriate proposals to the holders of
options.


12.    Structure of the Offer


The Offer is to be effected by means of a scheme of arrangement between
Kensington and its Shareholders under section 425 of the Companies Act. The
procedure involves an application by Kensington to the Court to sanction the
Scheme and to confirm the cancellation of the existing Scheme Shares and the
issue of new Kensington Shares to Investec, in consideration for which Scheme
Shareholders will receive new Investec Shares. The cancellation and subsequent
issue of new Kensington Shares to Investec will result in Kensington becoming a
wholly-owned subsidiary of Investec.


To become Effective, the Scheme requires, amongst other things, the approval of
a majority in number of the Kensington Shareholders present and voting (and
entitled to vote) at the Court Meeting, either in person or by proxy, and
representing not less than three-fourths in value of the relevant Kensington
Shares voted at the Court Meeting (or any adjournment thereof), together with
the sanction of the Court and the passing of the resolutions necessary to
implement the Scheme and sanction the related capital reduction at the
Extraordinary General Meeting.


The Conditions to the Offer are set out in Appendix I to this announcement.


Once the necessary approvals from Kensington Shareholders have been obtained and
the other Conditions have been satisfied or (where applicable) waived, following
sanction of the Court, upon delivery to and, in the case of the associated
reduction of capital, registration of the Court Order by the Registrar of
Companies of England and Wales the Scheme and associated reduction of capital
will become Effective. Upon the Scheme becoming Effective, it will be binding on
all Kensington Shareholders, irrespective of whether or not they attended or
voted at the Court Meeting or the Extraordinary General Meeting, or those who
could not be traced. The Scheme is expected to become Effective by the end of
August 2007.


It is expected that, following the Effective Date, Kensington's listing on the
Official List of the UK Listing Authority and admission to trading on the London
Stock Exchange will be cancelled and Kensington will be re-registered as a
private company under the relevant provisions of the Companies Act. On the
Effective Date, share certificates in respect of Kensington Shares will cease to
be valid and entitlements to Kensington's Shares held within the CREST System
will be cancelled.


Applications will be made to the UK Listing Authority for the new Investec
Shares to be issued pursuant to the Scheme to be admitted to the Official List
and to trading on the London Stock Exchange.


A detailed timetable will be included in the Scheme Document.


13.    Disclosure of interests in Kensington


Neither Investec nor any of the directors of Investec nor, so far as the
directors of Investec are aware, any other person acting in concert with
Investec for the purposes of the Offer, owns, controls, holds, or has borrowed
or lent any Kensington Shares or any securities convertible or exchangeable into
Kensington Shares or rights to subscribe for or purchase or options (including
traded options) in respect of, or derivatives referenced to, any such Kensington
Shares. In view of the requirement for confidentiality, Investec have not made
any enquiries in respect of certain parties who may be deemed by the Panel to be
acting in concert with either of them for the purposes of the Offer.


Neither Investec nor, so far as Investec is aware, any person acting in concert
with Investec, has entered into any arrangement in relation to relevant
Kensington securities. For these purposes, 'arrangement' includes any indemnity
or option arrangement, any agreement or understanding, formal or informal, of
whatever nature, relating to relevant Kensington securities which may be an
inducement to deal or refrain from dealing in such securities.


14.    Overseas shareholders


The availability of the Offer to persons not resident in the United Kingdom may
be prohibited or affected by the laws of the relevant jurisdictions. Such
persons should inform themselves about, and observe, any applicable
requirements. Further details in relation to overseas shareholders will be
contained in the Scheme Document.


15.    General


Investec reserves the right to elect to implement the acquisition of the
Kensington Shares by way of a Takeover Offer as an alternative to the Scheme.
Any such Takeover Offer will be subject to a 90 per cent. acceptance condition
and will otherwise be implemented on the same terms (subject to appropriate
amendments), so far as applicable, as those which would apply to the Scheme and
in compliance with applicable laws and regulations.


The Offer will be made on the terms and subject to the Conditions set out in
Appendix I to this announcement and to be set out in the Scheme Document and
Forms of Proxy. The Scheme Document will include full details of the Scheme,
together with notices of the Court Meeting and the Extraordinary General
Meeting, the expected timetable and the Forms of Proxy. These will be despatched
to Kensington Shareholders and for information only, to holders of options
granted under Kensington Share Schemes, in due course. The Offer will be
governed by English law. The Scheme will comply with the applicable rules and
requirements of the City Code, the Panel, the London Stock Exchange and the
Financial Services Authority and all applicable securities laws.


In deciding whether or not to vote in favour of the Scheme, Kensington
Shareholders should rely on the information contained in, and follow the
procedures described in, the Scheme Document and the Forms of Proxy.


In accordance with Rule 2.10 of the City Code, as at the date of this
announcement, the issued share capital of Kensington comprises 52,606,507
Kensington Shares. Unexercised options are outstanding over a total of 1,853,719
Kensington Shares.


Details of the sources of information and basis of calculation of certain
information set out in this announcement are included in Appendix II. Details of
the directors' irrevocable undertakings received by Investec in relation to the
Offer are set out in Appendix III. Certain expressions used in this announcement
are set out in Appendix IV.


Enquiries:


Investec                                                  Tel: [phone]
Stephen Koseff, Chief Executive Officer
Bernard Kantor, Managing Director
Bradley Fried, Chief Executive Officer, Investec Bank (UK) Limited

Citi (financial adviser to Investec)                           [phone]
Christopher Williams
Andrew Reiniger
David Plowman

Merrill Lynch (corporate broker to Investec)                   [phone]
Andrew Fairclough
Will Smith

Citigate (public relations adviser to Investec)                [phone]
Jonathan Clare
Tom Baldock

Kensington                                                     [phone]
Alison Hutchinson, Group Chief Executive
Roger Blundell, Group Finance Director

Rothschild (financial adviser to Kensington)                   [phone]
Robert Leitao
Stuart Vincent

Panmure Gordon (corporate broker to Kensington)                [phone]
Tim Linacre

Financial Dynamics (public relations adviser to Kensington)    [phone]
Geoffrey Pelham-Lane
Charles Gorman


Citigroup Global Markets Limited ('Citi'), which is authorised and regulated in
the UK by the Financial Services Authority, is acting exclusively as financial
adviser for Investec and no one else in connection with the Offer and will not
be responsible to anyone other than Investec for providing the protections
afforded to clients of Citi or for providing advice in relation to the Offer or
any other matters referred to in this announcement.


Merrill Lynch International ('Merrill Lynch'), which is authorised and regulated
in the UK by the Financial Services Authority, is acting exclusively as
corporate broker for Investec and no one else in connection with the Offer and
will not be responsible to anyone other than Investec for providing the
protections afforded to clients of Merrill Lynch International or for providing
advice in relation to the Offer or any other matters referred to in this
announcement.


N M Rothschild & Sons Limited ('Rothschild'), which is authorised and regulated
in the UK by the Financial Services Authority, is acting exclusively as
financial adviser for Kensington and no one else in connection with the Offer
and will not be responsible to anyone other than Kensington for providing the
protections afforded to clients of Rothschild or for providing advice in
relation to the Offer or any other matters referred to in this announcement.


Panmure Gordon (UK) Limited ('Panmure Gordon'), which is authorised and
regulated in the UK by the Financial Services Authority, is acting exclusively
as corporate broker for Kensington and no one else in connection with the Offer
and will not be responsible to anyone other than Investec for providing the
protections afforded to clients of Panmure Gordon or for providing advice in
relation to the Offer or any other matters referred to in this announcement.


Further information on the Offer


This announcement is not intended to and does not constitute an offer or
invitation to purchase, sell or exchange any securities or the solicitation of
any vote or approval in any jurisdiction pursuant to the Offer or otherwise, nor
shall there be any purchase, sale or exchange of securities or such solicitation
in any jurisdiction in which such offer, solicitation or sale or exchange would
be unlawful prior to registration or qualification under the laws of such
jurisdiction.


This announcement does not constitute a prospectus or prospectus equivalent
document.


The Offer will be made solely through the Scheme Document, which will contain
the full terms and conditions of the Scheme, including details of how to vote in
favour of the Scheme. Any acceptance or other responses to the Offer should be
made only on the basis of the information in the Scheme Document. Kensington
will prepare the Scheme Document to be distributed to Kensington Shareholders.
Kensington and Investec urge Kensington Shareholders to read the Scheme Document
when it becomes available because it will contain important information relating
to the Offer.


The availability of the Offer to Kensington Shareholders who are not resident in
the United Kingdom may be affected by the laws of the relevant jurisdictions in
which they are located. Persons who are not resident in the United Kingdom
should inform themselves of, and observe, any applicable requirements. Further
details in relation to overseas persons who are Kensington Shareholders will be
contained in the Scheme Document.


Any securities to be offered pursuant to the Offer as described in this
announcement have not been and will not be registered under the US Securities
Act, or under the securities laws of any state, district or other jurisdiction
of the United States, or of Canada, Japan or Australia. Accordingly, such
securities may not be offered, sold or delivered, directly or indirectly, in or
into such jurisdictions except pursuant to exemptions from applicable
requirements of such jurisdictions.


The release, publication or distribution of this announcement in jurisdictions
other than the UK may be restricted by law and therefore any persons who are
subject to the laws of any jurisdiction other than the UK should inform
themselves about, and observe, any applicable requirements. Any failure to
comply with the applicable restrictions may constitute a violation of the
securities laws of any such jurisdiction. To the fullest extent permitted by
applicable law, the companies involved in the proposed Offer disclaim any
responsibility or liability for the violation of such restrictions by any
person.


This announcement has been prepared for the purpose of complying with English
law and the applicable rules and regulations of the Financial Services
Authority, the London Stock Exchange and the Panel and the information disclosed
may not be the same as that which would have been disclosed if this announcement
had been prepared in accordance with the laws of jurisdictions outside the UK.


US Kensington Shareholders should note that the Scheme will relate to the shares
of a UK company that is a 'foreign private issuer' as defined under the Rule
3b-4 under the US Securities Exchange Act 1934, as amended (the 'Exchange Act'),
and will be governed by English law. Accordingly, neither the proxy solicitation
nor the tender offer rules under the Exchange Act will apply to the Scheme.
Moreover, the Scheme will be subject to the disclosure requirements and
practices applicable in the UK to schemes of arrangement, which differ from the
disclosure requirements of the US proxy solicitation rules and tender offer
rules. Financial information included in the Scheme documentation will have been
prepared in accordance with accounting standards applicable in the UK that may
not be comparable to the accounting standards applicable to financial statements
of US companies. If Investec exercises its right to elect to effect the Offer by
way of a Takeover Offer, the Offer will be made in compliance with applicable US
securities laws and regulations.


Persons receiving copies of this announcement and all other documents relating
to the Offer (including, without limitation, nominees, trustees and custodians)
should observe the above restrictions and must not mail, or otherwise forward,
distribute or send such documents in, into or from any such jurisdiction in
violation of these restrictions and applicable laws. Any person (including,
without limitation, any custodian, nominee and trustee) who would, or otherwise
intends to, or who may have a contractual or legal obligation to, forward this
announcement and/or the Scheme Document and/or any other related document to any
jurisdiction outside the United Kingdom should inform themselves of, and
observe, any applicable legal or regulatory requirements of their jurisdiction.



Forward-looking statements


This announcement, including information included or incorporated by reference
in this announcement, may contain 'forward-looking statements', including for
the purposes of the US Private Securities Litigation Reform Act of 1995,
concerning the Investec Group and the Kensington Group. All statements other
than statements of historical fact included in this announcement may be forward
looking statements. Without limitation, any statements preceded or followed by
or that include the words 'will', 'may', 'should', 'continue', 'believes',
'expects', 'intends', 'anticipates' or words of similar substance or the
negative thereof are forward-looking statements.


The forward-looking statements are not guarantees of future performance and
involve known and unknown risks and uncertainties and other factors which could
cause them to differ materially from the actual results, performance or
achievements expressed or implied by such forward-looking statements. Many of
these risks and uncertainties relate to factors that are beyond the companies'
abilities to control or estimate precisely, such as future market conditions and
the behaviours of other market participants, and therefore undue reliance should
not be placed on such statements. Investec and Kensington assume no obligation
and do not intend to update these forward-looking statements, except as required
pursuant to applicable law.


Dealing disclosure requirements


Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes,
'interested' (directly or indirectly) in 1 per cent. or more of any class of
'relevant securities' of Investec or Kensington, all 'dealings' in any 'relevant
securities' of that company (including by means of an option in respect of, or a
derivative referenced to, any such 'relevant securities') must be publicly
disclosed by no later than 3.30 pm (London time) on the Business Day following
the date of the relevant transaction. This requirement will continue until the
Effective Date or the date on which the Scheme is withdrawn. If two or more
persons act together pursuant to an agreement or understanding, whether formal
or informal, to acquire an 'interest' in 'relevant securities' of Investec or
Kensington, they will be deemed to be a single person for the purpose of Rule
8.3.


Under the provisions of Rule 8.1 of the City Code, all 'dealings' in 'relevant
securities' of Investec or Kensington by Investec or Kensington, or by any of
their respective 'associates', must be disclosed by no later than 12.00 noon
(London time) on the Business Day following the date of the relevant
transaction.


A disclosure table, giving details of the companies in whose 'relevant'
securities 'dealings' should be disclosed and the number of such securities in
issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.


'Interests in securities' arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the prices of
securities. In particular, a person will be treated as having an 'interest' by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.


Terms in quotation marks are defined in the City Code, which can also be found
on the Panel's website. If you are in any doubt as to whether or not you are
required to disclose a 'dealing' under Rule 8, you should consult the Panel.



                                   Appendix I


              Conditions to and Certain Further Terms of the Offer


The Offer is conditional upon the Scheme becoming Effective by 28 September 2007
or such later date as Investec and Kensington may, with the consent of the
Panel, agree and (if required) the Court may allow.

1.                   The Scheme will be subject to the following conditions:

(a)                the approval of the Scheme by a majority in number,
representing not less than three-fourths in value, of the holders of Kensington
Shares present and voting, whether in person or by proxy, at the Court Meeting
(or any adjournment thereof);

(b)                the EGM Resolution being duly passed by the requisite
majority at the Extraordinary General Meeting (or any adjournment thereof); and

(c)                the sanction of the Scheme (with or without modification on
terms acceptable to Investec and Kensington) and the confirmation of the
associated capital reduction by the Court, an office copy of the Court Order and
the minute of such reduction attached thereto being delivered for registration
to the Registrar of Companies and, in relation to the capital reduction, the
Court Order being registered by him.

2.                   In addition, Investec and Kensington have agreed that,
subject to the requirements of the Panel in accordance with the City Code, the
Offer will be conditional upon the following matters and, accordingly, the Court
Order sanctioning the Scheme will not be delivered to the Registrar of Companies
for registration unless such Conditions have been satisfied or waived:

(a)                the first to occur of the following:

(i)                  the Competition Authority in Ireland ('Competition
Authority') having furnished to Investec and Kensington a copy of its
determination, pursuant to section 21(2)(a) or section 22(3)(a) of the (Irish)
Competition Act, 2002, as amended ('Competition Act'), that the Offer may be put
into effect; or

(ii)                the period specified in section 21(2) of the Competition Act
(as extended, where relevant, pursuant to section 21(4) of that Act) having
elapsed without the Competition Authority having informed Investec and
Kensington of the determination (if any) it has made under section 21(2) of that
Act in relation to the Offer; or

(iii)               the Competition Authority having furnished to Investec  and
Kensington a copy of its determination, pursuant to section 22(3)(c) of the
Competition Act, that the Offer may be put into effect subject to conditions
specified by the Competition Authority being complied with (such conditions
being acceptable to Investec  and Kensington); or

(iv)              the period specified in section 22(4)(a) of the Competition
Act having elapsed without the Competition Authority having made a determination
under section 22(3) of the Competition Act in relation to the Offer;

(b)                the Financial Services Authority having formally (and
unconditionally) approved Investec (and any relevant affiliate of Investec which
would be deemed to be acquiring control (as such term is defined in the FSMA))
as a controller of all and any relevant entities within the Kensington Group
which are authorised in the UK by the Financial Services Authority under the
FSMA (pursuant to the provisions of Part XII of the FSMA);

(c)                the South African Reserve Bank having formally (and
unconditionally) approved the acquisition of Kensington by Investec;

(d)                the Investec Shares to be issued pursuant to the Scheme being
admitted to the Official List of the UK Listing Authority (the 'UKLA') and being
admitted to trading on the London Stock Exchange or, if Investec and Kensington
so determine and subject to the consent of the Panel, the UKLA agreeing to admit
such shares to the Official List and the London Stock Exchange agreeing to admit
such shares to trading subject only to (i) the allotment of such shares and/or
(ii) the Scheme becoming effective;

(e)                no Irish Competition Authority or any other court or
competition, antitrust or supervisory body or other government, governmental or
regulatory agency or body in each case in any jurisdiction and whose consent or
clearance is required in order for the Offer to proceed (each a 'Relevant
Authority') having decided to take, institute, implement or threaten any action,
proceeding, suit, investigation, enquiry or reference, or having enacted, made
or proposed, and there not continuing to be outstanding, any statute,
regulation, notice, order or decision that would or might be reasonably expected
to:

(i)                  make the Offer or the acquisition or proposed acquisition
of any shares in, or control or management of, Kensington by Investec or any
member of the Investec Group void, unenforceable and/or illegal in any
jurisdiction or directly or indirectly prohibit, restrain, prevent or otherwise
restrict, materially delay or otherwise interfere with the implementation of, or
impose material additional conditions or obligations with respect to, or
otherwise challenge or interfere with, the Offer or the acquisition of any
shares in, or control or management of, Kensington by any member of the Investec
Group;

(ii)                require, prevent or delay the divestiture (or alter the
terms of any proposed divestiture) by the Investec Group or the Kensington Group
of all or any part of their respective businesses, assets or properties, or
impose any limitation on their ownership of any of their respective assets or
properties or any part thereof;

(iii)               impose any limitation on, or result in any delay in, the
ability of any member of the Investec Group to acquire or hold or exercise
effectively, directly or indirectly, all or any rights of ownership of shares or
other securities (or the equivalent) in, or to exercise management control over,
any member of the Kensington Group or on the ability of any member of the
Kensington Group to hold or exercise effectively, directly or indirectly, all or
any rights of ownership of shares or other securities (or the equivalent) in, or
to exercise management control over, any other member of the Kensington Group;

(iv)              other than in the implementation of the Offer, require any
member of the Investec Group or of the Kensington Group to acquire or offer to
acquire any shares or other securities (or the equivalent) or interest in any
member of the Kensington Group or any member of the Investec Group;

(v)                impose any material limitation on the ability of any member
of the Investec Group to integrate or co-ordinate its business, or any part of
it, with the businesses or any part of the businesses of any member of the
Kensington Group or conduct all or part of their respective businesses following
the implementation of the Offer; or

(vi)              otherwise adversely affect the business, assets, financial or
trading position or profits or prospects of any member of the Kensington Group,

in each case to an extent which is material in the context of the Offer or the
Investec Group taken as a whole, and all applicable waiting and other time
periods during which any such Relevant Authority could decide to take,
institute, implement or threaten any such action, proceeding, suit,
investigation, enquiry or reference, or take any other step under the laws of
any jurisdiction, having expired, lapsed or been terminated;

(f)                 all necessary filings, applications and/or notifications
having been made and all appropriate waiting periods (including any extensions
thereof) under any applicable legislation or regulation of any jurisdiction
having expired, lapsed or been terminated, in each case in respect of the Offer
and the acquisition of any shares or other securities in, or control of,
Kensington by Investec or any member of the Investec Group and all
authorisations, orders, grants, recognitions, confirmations, licences, consents,
clearances, permissions and approvals ('authorisations') necessary in any
jurisdiction for or in respect of the Offer and the proposed acquisition of any
shares or other securities in, or control or management of, Kensington by
Investec or any member of the Investec Group being obtained in terms and in a
form satisfactory to Investec, acting reasonably, from appropriate Relevant
Authorities or from any persons or bodies with whom any member of the Investec
Group or the Kensington Group has entered into contractual arrangements, and
such authorisations, together with all authorisations necessary or appropriate
for any member of the Kensington Group to carry on its business, remaining in
full force and effect, in each case where the absence of such authorisation
would have a material adverse effect on the Kensington Group taken as a whole or
the ability of the Investec Group to implement the Offer, and there being no
notice or other intimation of any intention to revoke, suspend, restrict or
modify or not to renew any of the same having been made;

(g)                save as disclosed to Investec by or on behalf of Kensington,
or as publicly announced by Kensington by the delivery of an announcement to a
Regulatory Information Service before the time of the announcement of the Offer
(the 'Announcement'), or as disclosed in the Annual Report and Accounts for the
financial year ended 30 November 2006, there being no provision of any
agreement, arrangement, licence, permit, franchise or other instrument to which
any member of the Kensington Group is a party, or by or to which any such member
or any of its assets is or may be bound, entitled or subject, which, as a direct
result of the Offer or the acquisition or proposed acquisition by any member of
the Investec Group of any shares or other securities in, or change in the
control or management of, Kensington, would or might result in:

(i)                  any monies borrowed by, or any other indebtedness (actual
or contingent) of, or any grant available to, any such member of the Kensington
Group becoming repayable or capable of being declared repayable immediately or
earlier than the stated repayment date, or the ability of such member of the
Kensington Group to borrow monies or incur any indebtedness being or becoming
capable of being withdrawn or inhibited;

(ii)                the creation or enforcement of any mortgage, charge or other
security interest over the whole or any part of the business, property or assets
of any such member of the Kensington Group or any such security interest
(whenever arising or having arisen) becoming enforceable;

(iii)               any assets or interest of any such member of the Kensington
Group being or falling to be disposed of or charged, or any right arising under
which any such asset or interest could be required to be disposed of or charged;

(iv)              the interest or business of any such member of the Kensington
Group in or with any other person, firm or company (or any agreements or
arrangements relating to such interest or business) being terminated or
adversely affected;

(v)                any such member of the Kensington Group ceasing to be able to
carry on business under any name under which it presently does so;

(vi)              the value of any such member of the Kensington Group or its
financial or trading position or prospects being prejudiced or adversely
affected;

(vii)             any such agreement, arrangement, licence, permit, franchise or
other instrument or the rights, liabilities, obligations or interests of any
such member being terminated or adversely modified or any onerous obligation
arising or any adverse action being taken or arising thereunder; or

(viii)           the creation of any liabilities (actual or contingent) by any
such member of the Kensington Group,

and which in each such case would be material in the context of the Kensington
Group taken as a whole, and no event having occurred which, under any provision
of any agreement, arrangement, licence, permit, franchise or other instrument to
which any member of the Kensington Group is a party or by or to which any such
member or any of its assets may be bound or be subject, is likely to result in
any events or circumstances as are referred to in subparagraphs (i) to (viii) of
this paragraph (g) and which in each such case would be material in the context
of the Kensington Group taken as a whole;

(h)                save as disclosed to Investec by or on behalf of Kensington
or as publicly announced by Kensington by the delivery of an announcement to a
Regulatory Information Service before the time of the Announcement, or as
disclosed in the Annual Report and Accounts for the financial year ended 30
November 2006, no member of the Kensington Group having since 30 November 2006:

(i)                  issued or agreed to issue or authorised the issue of
additional shares or securities of any class, or securities convertible into or
exchangeable for, or rights, warrants or options to subscribe for or acquire,
any such shares or convertible securities (save as between Kensington and
wholly-owned subsidiaries of Kensington and save for the issue of Kensington
Shares to employees or packagers (as such term is used in the Annual Report and
Accounts for the financial year ended 30 November 2006) on the exercise of
options granted under, or the grant or vesting of options under, the Kensington
Share Schemes);

(ii)                implemented or authorised any merger or demerger or, other
than in the ordinary course of business, acquired or disposed of or transferred,
mortgaged or charged, or created any other security interest over, any asset or
any right, title or interest in any asset or authorised, proposed or announced
its intention to propose the same in each case which is material in the context
of the Kensington Group taken as a whole;

(iii)               entered into, implemented or authorised any reconstruction,
amalgamation, scheme or other transaction or arrangement (other than the Scheme)
which is material in the context of the Kensington Group taken as a whole other
than transactions between wholly-owned members of the Kensington Group;

(iv)              made, proposed, authorised or announced its intention to make,
propose or authorise any material change in its loan capital or, other than in
the ordinary course of business, issued or authorised the issue of any
debentures or incurred any material indebtedness or increased materially any
indebtedness or become subject to any material contingent liability;

(v)                entered into, varied or terminated, or authorised the entry
into, variation or termination of, any contract, commitment or arrangement
(whether in respect of capital expenditure or otherwise) which is outside the
ordinary course of business or which is of a long term, onerous or unusual
nature or magnitude or which involves or could involve an obligation of a nature
or magnitude which is material in the context of the Kensington Group taken as a
whole;

(vi)              save as between Kensington and members of the Kensington Group
entered into any contract, commitment or arrangement which would be restrictive
on the business of any member of the Kensington Group which is material in the
context of the Kensington Group taken as a whole;

(vii)             been unable, or admitted in writing that it is unable, to pay
its debts or having stopped or suspended (or threatened to stop or suspend)
payment of its debts generally or having entered into or taken steps to enter
into a moratorium, composition, compromise or arrangement with its creditors in
respect of its debts or ceased or threatened to cease carrying on all or a
substantial part of its business, in each case as would have a material adverse
effect on the Kensington Group taken as a whole;

(viii)           taken any corporate action or (to an extent which is material
in the context of the Kensington Group taken as a whole) had any step,
application, filing in court, notice or legal proceedings started or served or
threatened against it for its winding-up (voluntary or otherwise), dissolution
or reorganisation (or for any analogous proceedings or steps in any
jurisdiction) or for the appointment of a receiver, administrator,
administrative receiver, liquidator, trustee or similar officer (or for the
appointment of any analogous person in any jurisdiction) of all or any of its
assets and revenues;

(ix)             waived, compromised or settled any claim to an extent which is
material in the context of the Kensington Group taken as a whole;

(x)              entered into or varied or made an offer (which remains open
for acceptance) to vary the terms of any contract, commitment or arrangement
with any director or senior executive of Kensington or changed or entered into
any commitment to change the terms of any Kensington Share Schemes, in each case
as would be material in the context of the Kensington Group taken as a whole;

(xi)              made or consented to any change to the terms of the trust
deeds constituting the pension schemes established for its directors and/or
employees and/or their dependants or to the benefits which accrue, or to the
pensions which are payable thereunder, or to the basis on which qualification
for or accrual or entitlement to such benefits or pensions are calculated or
determined, or to the basis upon which the liabilities (including pensions) of
such pension schemes are funded or made, or agreed or consented to, any change
to the trustees in each case as would be material in the context of the
Kensington Group taken as a whole; or

(xii)             entered into any contract, commitment or arrangement or passed
any resolution or made any offer (which remains open for acceptance) with
respect to, or proposed or announced any intention to effect or propose, any of
the transactions, matters or events referred to in this condition which in each
case is material in the context of the Kensington Group taken as a whole;

(i)               save as disclosed to Investec by or on behalf of Kensington
or as publicly announced by Kensington by the delivery of an announcement to a
Regulatory Information Service before the time of the Announcement, or as
disclosed in the Annual Report and Accounts for the financial year ended 30
November 2006:

(i)               no adverse change or deterioration having occurred in the
business, assets, financial or trading position or profits or prospects of any
member of the Kensington Group which in any such case is material in the context
of the Kensington Group taken as a whole;

(ii)              no litigation, arbitration proceedings, prosecution or other
legal proceedings having been threatened, announced, instituted or remaining
outstanding by, against or in respect of any member of the Kensington Group or
to which any member of the Kensington Group is a party (whether as claimant or
defendant or otherwise) and no investigation by any Relevant Authority or other
investigative body against or in respect of any member of the Kensington Group
having been threatened, announced, instituted or remaining outstanding by,
against or in respect of any member of the Kensington Group which in any such
case is material in the context of the Kensington Group taken as a whole;

(iii)             no contingent or other liability having arisen which would,
or might reasonably be expected to, materially and adversely affect the
business, assets, financial or trading position or profits or prospects of any
member of the Kensington Group to an extent which is material in the context of
the Kensington Group taken as a whole; and

(iv)              no steps having been taken which are likely to result in the
withdrawal (without replacement), cancellation or termination of any licence,
permit or consent held by any member of the Kensington Group which is necessary
for the carrying on by the Kensington Group of the business and which is
material in the context of the Kensington Group taken as a whole;

(j)               save as disclosed to Investec by or on behalf of Kensington
or as publicly announced by Kensington by the delivery of an announcement to a
Regulatory Information Service before the time of the Announcement, or as
disclosed in the Annual Report and Accounts for any of the financial years ended
30 November 2004, 2005 and 2006, Investec not having discovered:

(i)               that any financial, business or other information
concerning the Kensington Group publicly disclosed at any time since 1 December
2003 by any member of the Kensington Group is materially misleading, contains a
material misrepresentation of fact or omits to state a material fact necessary
to make the information contained therein not misleading;

(ii)              that any member of the Kensington Group or any partnership,
company or other entity in which any member of the Kensington Group has an
interest is subject to any liability, contingent or otherwise, which is material
in the context of the Kensington Group taken as a whole; or

(iii)               any information which affects the import of any information
disclosed at any time by or on behalf of the Kensington Group and which is
material in the context of the Kensington Group taken as a whole.

Investec reserves the right to waive all or any of the conditions in 2 (other
than 2(d)), in whole or in part.

If Investec is required by the Panel to make an offer or offers for any
Kensington Shares under Rule 9 of the City Code, Investec may make such
alterations to the above conditions as are necessary to comply with the
provisions of that Rule.

The Offer will lapse and the Scheme will not proceed if, before the date of the
Court Meeting and the Kensington EGM, the European Commission initiates
proceedings under Article 6(1)(c) of the Regulation in respect of the Offer or
any matter arising from or relating to the Offer or, following a referral by the
European Commission to a competent authority in the United Kingdom under Article
9(1) of the Regulation the Offer or any matter arising from or relating to the
Offer is referred to the Competition Commission.

Investec reserves the right to elect to effect the Offer by way of a Takeover
Offer. In such event, such offer will be implemented on and subject to the same
terms and conditions (subject to appropriate amendments, including (without
limitation) an acceptance condition set at 90 per cent. of the Kensington Shares
to which such offer relates (but capable of waiver in accordance with Rule 10 of
the City Code) in substitution for condition 1), so far as applicable, to those
that would apply to the Scheme.

The Offer and the Scheme will be governed by English law and will be subject to
the jurisdiction of the English Courts.







                                  Appendix II


                Sources of Information and Basis of Calculation


In this announcement:


(a) The value placed by the Offer on the existing issued and to be issued share
capital of Kensington (approximately £283 million) is based on 52,606,507
Kensington Shares in issue and unexercised options over a total of 1,853,719
Kensington Shares as at 29 May 2007, the last Business Day prior to the date of
this announcement.


(b) The closing prices of the Kensington Shares referred to in this document are
derived from the Daily Official List of the London Stock Exchange.


(c) Unless otherwise stated, the financial information relating to Kensington is
extracted from the Annual Report and Accounts of Kensington for the year ended
30 November 2006.


(d) Unless otherwise stated, the financial information relating to Investec is
extracted from the Investec Annual Results announcement for the year ended 31
March 2007.



                                  Appendix III


                      Directors' Irrevocable Undertakings

Name of Director                        Number of Kensington Shares which 
                                        are subject to an irrevocable
                                        undertaking

Peter Birch CBE                                     135,000
David Gareth Jones                                   61,471
Alison Hutchinson                                     3,095





                                  Appendix IV


The following definitions apply throughout this announcement, the Summary and
the Appendices unless the context requires otherwise:

Alternative    means a proposed offer, merger, acquisition, scheme of
Proposal       arrangement, recapitalisation or other business combination
               relating to any direct or indirect acquisition of fifty per cent.
               or more of the Kensington Shares or all or any material part of
               the business or assets of the Kensington Group proposed by any
               third party which is not a concert party (as defined in the City
               Code) of Investec;

Australia      means the Commonwealth of Australia, its territories and
               possessions;

Business Day   means a day (other than Saturday or Sunday) on which banks are
               generally open for business in the City of London and
               Johannesburg;

Canada         means Canada, its provinces and territories and all areas subject
               to its jurisdiction and any political sub-division of such
               territories and areas;

City Code      means the UK City Code on Takeovers and Mergers;

Companies Act  means the Companies Act 1985 (as amended);

Conditions     means the conditions of the Offer set out in Appendix I to this
               announcement;

Court          means the High Court of Justice in England and Wales;

Court Meeting  means the meeting of the Kensington Shareholders (and any
               adjournment thereof) to be convened by order of the Court
               pursuant to section 425 of the Companies Act to consider and, if
               thought fit, approve the Scheme (with or without amendment);

Court Order    means the order of the Court sanctioning the Scheme under section
               425 of the Companies Act and confirming the reduction of share
               capital which forms part of it under section 137 of the Companies
               Act;

Daily Official means the daily official list of the London Stock Exchange;
List

Effective      means:
               if the Offer is implemented by way of the Scheme, the Scheme
               having become effective pursuant to its terms; or
               if the Offer is implemented by way of a Takeover Offer, the
               Takeover Offer having been declared or become unconditional in
               all respects in accordance with the City Code.

Effective Date means the date on which the Offer becomes Effective;

EGM Resolution means the special resolution to approve, amongst other things,
               the cancellation of the entire issued share capital of
               Kensington, the amendments to Kensington's articles of
               association and such other matters as may be necessary for,
               connected with or desirable for, the implementation of the Offer;

Extraordinary  means the extraordinary general meeting (or any adjournment
General        thereof) of the Kensington Shareholders to be convened in
Meeting        connection with the Scheme, expected to be held as soon as the
               preceding Court Meeting shall have been concluded or adjourned;

Financial      means the Financial Services Authority of the UK acting in its
Services       capacity as the competent authority for the purposes of Part VI
Authority      of FSMA and in the exercise of its functions in respect of
               admission to the Official List otherwise than in accordance with
               Part VI of FSMA;

FSMA           means the Financial Services and Markets Act 2000 (as amended);

Forms of Proxy means the forms of proxy to be enclosed with the Scheme Document;

Hearing Date   means the date of the commencement of the hearing or hearings by
               the Court of the petition to sanction the Scheme;

Implementation means the implementation agreement between Kensington and

Agreement      Investec dated 30 May 2007;

Investec       means Investec plc;

Investec       means the board of directors of Investec;
Directors or
Board of
Investec

Investec Group means Investec, Investec Limited and their respective
               subsidiaries and, where the context permits, each of them;

Investec Share means an ordinary share of £0.0002 in the capital of Investec;

Investec       means a holder of an Investec Share;
Shareholder

Kensington     means Kensington Group plc;

Kensington     means the board of directors of Kensington;
Directors or
Board of
Kensington

Kensington     means Kensington and its subsidiaries and, where the context
Group          permits, each of them;

Kensington     means an ordinary share of £0.10 in the capital of Kensington;
Share

Kensington     means a holder of a Kensington Share;
Shareholder

Kensington     means the Kensington Inland Revenue Approved Executive Share
Share Schemes  Options Scheme 2000, the Kensington (Unapproved) Executive Share
               Option Scheme 2000, the Kensington Sharesave Option Scheme 2000,
               the Kensington Performance Share and Investment Plan, the
               Kensington Long Term Incentive Plan, the Kensington Employee
               Share Options Scheme and the Norland Packager Share Option
               Scheme;

Listing Rules  means the Listing Rules of the Financial Services Authority as
               amended from time to time and contained in the Financial Services
               Authority's publication of the same name;

London Stock   means the London Stock Exchange plc;
Exchange

Offer          means the proposed acquisition of the Kensington Shares by
               Investec to be implemented by means of the Scheme (or if Investec
               so elects, a Takeover Offer) on the terms and subject to the
               conditions set out in this announcement and to be set out in the
               Scheme Document (or the Offer Document (as the case may be)) and,
               where the context admits, any subsequent revision, variation,
               extension or renewal thereof;

Offer Document means, in the event Investec elects, to conduct the Offer by
               means of a Takeover Offer, the document containing the offer to
               be sent to Kensington Shareholders;

Panel          means the Panel on Takeovers and Mergers;

Part VI Rules  means any of the Listing Rules, Disclosure and Transparency Rules
               or Prospectus Rules made by the Financial Services Authority in
               exercise of its functions as competent authority pursuant to Part
               VI of the Financial Services and Markets Act 2000;

Regulatory     means any of the services set out in Appendix 3 to the Listing
Information    Rules;
Service

Relevant       means the Irish Competition Authority and any other court or

Authority      competition, antitrust or supervisory body or other government,
               governmental, trade or regulatory agency or body in each case in
               any jurisdiction whose consent or clearance is required or
               desirable in connection with the Offer and Relevant Authorities
               shall mean all of them;

Rothschild     means N M Rothschild & Sons Limited;

Scheme         means the acquisition of the Scheme Shares by way of a scheme of
               arrangement under section 425 of the Companies Act, on the terms
               and subject to the Conditions set out in this announcement and to
               be set out in the Scheme Document;

Scheme         means the document to be sent to Kensington Shareholders which
Document       will, among other things, contain the terms and conditions of the
               Scheme;

Scheme         means the holders of Scheme Shares;
Shareholders

Scheme Shares  (a)                means Kensington Shares in issue on the date
               of this announcement together with any further Kensington Shares:
               (b)               issued after the date of this announcement and
               prior to the Voting Record Time;
               (c)                (if any) issued on or after the Voting Record
               Time and prior to 6:00p.m. on the day before the Hearing Date
               either on terms that the original or any subsequent holders
               thereof shall be bound by the Scheme or in respect of which the
               holders thereof shall have agreed to be bound by the Scheme;

South Africa   means the Republic of South Africa;

Sterling or £  means pounds sterling;

Subsidiary     has the meaning given by the Companies Act;

Takeover Offer means the implementation of the Offer by means of a takeover
               offer under the City Code;

United Kingdom means the United Kingdom of Great Britain and Northern Ireland;
or UK

United States  means the United States of America (including the States and the
or US          District of Columbia), its territories, its possessions and other
               areas subject to its jurisdiction;

US Kensington  means Kensington Shareholders who are US persons pursuant to
Shareholders   RegulationS under the US Securities Act;

US Securities  means the United States Securities Act of 1933 (as amended); and
Act

Voting Record  means the time and date to be specified in the Scheme Document.
Time










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