Offer by OM Group-Pt.3

London Stock Exchange
29 August 2000

PART 3 OF 5

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO AUSTRALIA, CANADA,
JAPAN OR THE UNITED STATES
                                       
                                   OM GROUP
                                   --------
                      OFFER FOR LONDON STOCK EXCHANGE PLC
                      -----------------------------------
                                       
                                       
                                  APPENDIX I
                                  ----------
                              TERMS OF THE OFFER
                              ------------------

Terms of the Offer
------------------

On behalf of OM, Lazard will offer to acquire LSE Shares on the following
basis:

          for each LSE Share   0.65 new OM Shares and GBP7.00 in cash

and so in proportion for any other number of LSE Shares.

The Offer includes a Loan Note Alternative as set out below.

Full acceptance of the Offer would result in the issue of approximately 19.3
million new OM Shares with LSE Shareholders owning 18.5 per cent. of the New
Group on a fully diluted basis.

On the basis of the closing price of an OM Share of SEK425 on 28 August 2000
(being the latest practicable date prior to this announcement) and an exchange
rate of SEK13.68:GBP1 as published in the Financial Times on that date, the
Offer values each LSE share at GBP27.19 and values LSE at approximately GBP808
million.

The value of the Offer represents a premium of 15.7 per cent. to the closing
price of an LSE Share on 25 August 2000 (the closing price prior to LSE's
announcement of OM's approach).

OM confirms that it has committed facilities in respect of the cash element of
the consideration under the Offer.

The issue of the new OM Shares is subject to approval by OM Shareholders.
OM's Board has unanimously voted in favour of the Offer.  The Board includes
members who either themselves hold, or represent shareholders who hold, 40 per
cent. in aggregate of OM's issued share capital.

OM intends to seek a secondary listing on the London Stock Exchange following
the completion of the merger.

The Offer is conditional, inter alia, upon:

*         the Articles of Association of LSE being changed to remove the
          restriction on persons holding or being interested in more than 4.9
          per cent. of LSE's issued share capital

*         approval by OM Shareholders of the issue of the new OM Shares

*         clearance from the UK and Swedish competition authorities on terms
          acceptable to OM

LSE Shares will be acquired by OM fully paid and free from all liens,
equities, charges, encumbrances and other interests and together with all
rights now or hereafter attaching thereto, including the right to receive and
retain all dividends and other distributions declared, made or paid after 29
August 2000.

The new OM Shares will be issued credited as fully paid and free from all
liens, equities, charges, encumbrances and other interests.  The new OM Shares
will rank pari passu in all respects with the existing OM Shares, including
the right to receive and retain all dividends and distributions declared, made
or paid on or after 29 August 2000.

Fractions of new OM Shares will not be allotted or issued to holders of LSE
Shares who accept the Offer (including such holders who are deemed to accept
the Offer) but will be aggregated and sold in the market and the net proceeds
of sale distributed pro rata to the holders of LSE Shares entitled to them.
However, individual cash entitlements of less than GBP3 otherwise arising on
such distribution will not be paid but will be retained for the benefit of the
enlarged OM Group.

The Loan Note Alternative
-------------------------

As an alternative to the cash consideration receivable under the basic terms
of the Offer, LSE Shareholders (other than certain overseas shareholders) may
elect to receive Loan Notes of an equivalent nominal value instead of all or
part of the cash consideration to which they would otherwise be entitled.  The
Loan Notes will be issued by OM on the following basis:

          for each GBP1 of cash         GBP1 nominal value of
          consideration                 Loan Notes

The Loan Notes will be unsecured obligations of OM and will not be guaranteed
as to principal or as to interest.  The Loan Notes will be issued credited as
fully paid in amounts and integral multiples of GBP1 and fractions of Loan
Notes will be disregarded.  No application has been or will be made for the
Loan Notes to be listed or dealt in on any stock exchange.

The Loan Notes will bear interest at a rate of 0.5 per cent. per annum below
LIBOR, payable in half yearly instalments in arrears.  The Loan Notes will be
redeemable at the option of the holder at half yearly intervals commencing on
1 April 2001 up to and including 30 September 2005.  On the fifth anniversary
of the Offer becoming unconditional in all respects all outstanding Loan Notes
will be redeemed at par.

If valid elections for the Loan Note Alternative will not result in the issue
of at least GBP 5 million nominal of Loan Notes, no Loan Notes will be issued
and LSE Shareholders who have elected for the Loan Note Alternative will
receive cash in accordance with the terms of the Offer.

Information on OM
-----------------

OM is an international technology company with a market capitalisation of
approximately GBP2.6 billion that develops and provides transaction technology
to customers world-wide.  It owns and operates a number of exchanges and
clearing houses.  Over the last 15 years, OM has become the partner of choice
and a world leading provider of integrated exchange technology to 20
international exchanges and clearing houses. OM also develops and provides
solutions to leading banks and brokers in more than 20 countries.

OM has a strong track record of creating shareholder value, growing its market
capitalisation from approximately GBP230 million at the end of 1995 to
approximately GBP2.6 billion today and gross profits by an average of over 30
per cent. per annum over the last four years.  OM founded and operated the
first for-profit, privately owned electronic derivatives exchange in 1985,
which was publicly listed in 1987 and then successfully integrated with the
Stockholm Stock Exchange, which it acquired in 1998.  OM has since 1989 owned
and operated OM London Exchange, one of six RIEs in the United Kingdom.

For the year ended 31 December 1999, OM's turnover was GBP146 million (1998:
GBP119 million) and profit before tax was GBP45 million (1998: GBP36 million).
Net assets including minorities as at 31 December 1999 were GBP205 million
(1998: GBP205 million).

Information on LSE
------------------

LSE operates, inter alia, the London Stock Exchange.  The London Stock
Exchange is a Recognised Investment Exchange under the Financial Services Act
and provides markets that facilitate the raising of capital for UK and
international companies through equity, debt and depository receipt issues.
The London Stock Exchange operates the fourth largest equities exchange in the
world by market capitalisation and the third largest by value of trading.

The London Stock Exchange's activities can be categorised in the following
three segments:

*         Company Services - The London Stock Exchange provides a number of
          markets which facilitate the raising of capital and the trading of
          corporate securities.  These markets are supported by a range of
          services to raise the profile of Exchange-traded companies and
          encourage the flow of market and corporate information through the
          Regulatory News Service (RNS) and other value added services

*         Trading Services - The London Stock Exchange provides access to a
          well-developed trading environment with services encompassing an
          advanced electronic order book for the most liquid stocks, quote
          display and a mix of quote display and order execution for less
          liquid stocks

*         Information Services - The London Stock Exchange provides high
          quality real time price information to over 91,000 terminals world-
          wide as well as historic and reference data services

For the year ended 31 March 2000, LSE reported for continuing operations a
turnover of GBP164 million (1999: GBP147 million), profit before tax of GBP43
million (1999: GBP11 million), and net earnings including discontinued
operations of GBP34 million (1999: GBP12 million).

Based on the closing price of LSE Shares on 25 August 2000 (the closing price
prior to LSE's announcement of OM's approach), LSE's market capitalisation was
approximately GBP698 million.

Regulatory issues
-----------------

It is not anticipated that the implementation of the Offer will require any
formal regulatory approval.  The operations of the LSE will not initially
change materially and, therefore, issues relating to market integrity
structure and surveillance should not arise.  The implementation of some of
the other, longer term plans set out in this announcement may require
regulatory consent, which will be sought as and when appropriate.

Financing of the Offer
----------------------

Cash consideration under the Offer will be funded by OM from its cash
resources, existing bank facilities and committed new facilities entered into
for the purpose.  Lazard has confirmed that resources are available to OM
Group sufficient to satisfy full acceptance of the Offer.

Disclosure of interests
-----------------------

OM does not own or control any shares in LSE.  Lazard, or companies within its
group, owns or controls 200,000 shares in LSE.

Save as disclosed above, neither OM nor any Director of OM nor, so far as OM
is aware, any party acting in concert with OM, owns or controls any LSE Shares
or holds any options to purchase LSE Shares or any derivative instrument
referenced to securities of LSE.

General
-------

The Directors of OM accept responsibility for the information contained in
this document, save that the only responsibility accepted by the Directors in
respect of the information in this document relating to LSE, which has been
compiled from published sources, is to ensure that such information has been
correctly and fairly reproduced and presented.  Subject as aforesaid, to the
best of the knowledge and belief of the Directors (who have taken all
reasonable care to ensure that such is the case), the information contained in
this announcement is in accordance with the facts and does not omit anything
likely to affect the import of such information.

The formal offer document to LSE Shareholders setting out OM's formal Offer
and a circular to OM Shareholders convening a shareholders' meeting of OM to
approve the issue of new OM Shares pursuant to the Offer will be despatched in
due course.

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