Acquisition and Placing

Mercury Group PLC
01 March 2005


For immediate release
                                                                    1 March 2005


                 Mercury Group PLC ('Mercury' or the 'Company')

   Acquisition of Smith Melzack Pepper Angliss Limited ('Smith Melzack Pepper
                                   Angliss')

  Placing of 120,000,000 new Ordinary Shares at 0.5 p per Ordinary Share (the
                                   'Placing')

                                  Board change

            Option to acquire Lee Baron Group Limited ('Lee Baron')

Introduction

On 3 December 2004, the Company announced that it had exercised the options to
acquire the outstanding 60 per cent. of Navitas Hemway and 100 per cent. of
Telco Solutions. Each of those acquisitions constituted a 'reverse take-over'
under the AIM Rules and was each therefore subject to the approval of
shareholders being given at the extraordinary general meeting of the Company
held on 30 December 2004. The acquisitions were duly approved and the Company
was re-admitted to AIM on 31 December 2004.

Mercury's strategy is to provide a wide range of professional services to the
real estate industry in the UK and Continental Europe. In the admission document
posted to shareholders dated 3 December 2004 the Directors of the Company stated
that in due course, the Directors would consider expanding the services offered
by Mercury to include a commercial property agency and that the Company was in
detailed discussions with a number of possible significant acquisition targets.
Further to that statement, the Directors are now delighted to announce that
agreement has been reached for the acquisition of the entire issued share
capital of Smith Melzack Pepper Angliss (the 'Acquisition').

Smith Melzack Pepper Angliss

Immediately prior to completion of the Acquisition, Smith Melzack Pepper Angliss
will acquire all of the business and assets of Smith Melzack Pepper Angliss LLP
pursuant to the terms of an intra-group reorganisation agreement dated 28
February 2005. With its roots in the early 1950's, Smith Melzack Pepper Angliss
LLP is a privately owned commercial agency business with offices in the City of
London and the West End. Smith Melzack Pepper Angliss LLP was formed following a
merger between Smith Melzack and Pepper Angliss and Yarwood in 2001. Presently,
Smith Melzack Pepper Angliss LLP has 7 consultants and employs, through its
subsidiaries, a further 25 staff. The consolidated audited financial results of
Smith Melzack Pepper Angliss LLP for the two years ended 31 December 2003 and
the unaudited results for the year ended 31 December 2004 are set out in the
table below:

(£)               Year ended 31          Year ended 31          Year ended 31
                       December               December               December
                           2002                   2003                   2004
                        Audited                Audited              Unaudited

Turnover              3,073,555              2,926,678              2,821,283

Operating
profit                  291,718                240,051                467,764

As at 31 December 2004 Smith Melzack Pepper Angliss LLP's net assets were
£431,470. As at 24 February 2005 Smith Melzack Pepper Angliss LLP had net
indebtedness of £300,135.

Acquisition agreement

The Company has agreed to acquire Smith Melzack Pepper Angliss for a maximum
consideration of up to £1,300,000 to be satisfied by the issue of new ordinary
shares of 0.1p each ('Ordinary Shares') and loan notes ('Loan Notes').

The initial consideration payable by the Company to the vendors of Smith Melzack
Pepper Angliss on completion of the Acquisition comprises £200,000 to be
satisfied by the issue of 40,000,000 new Ordinary Shares. Provided that Smith
Melzack Pepper Angliss' profit before tax is not less than £250,000 in each of
the years ending 31 December 2005 and 31 December 2006, further consideration
(the 'Deferred Consideration') is payable to the vendors of Smith Melzack Pepper
Angliss on the following basis:

(i) an amount equal to 1.667 times the amount by which Smith Melzack Pepper
Angliss' turnover for the year ending 31 December 2005 exceeds £2,900,000. This
additional consideration is subject to a maximum of £500,000; and

(ii) an amount equal to 0.8333 times the amount by which Smith Melzack Pepper
Angliss' turnover for the year ending 31 December 2006 exceeds £2,900,000. This
additional consideration is also subject to a maximum of £500,000.

The Deferred Consideration will be payable within 5 business days of
finalisation of Smith Melzack Pepper Angliss' accounts for the relevant year and
will be satisfied by the issue of Loan Notes and new Ordinary Shares (to be
issued at the then prevailing middle market price) in the proportion of £20 of
Loan Notes and £80 of new Ordinary Shares for every £100 of Deferred
Consideration.

In addition, provided that Smith Melzack Pepper Angliss achieves an aggregate
turnover of not less than £6,700,000 and an aggregate profit before tax of not
less than £500,000 ('Aggregate Profits') for the 24 month period ending 31
December 2006, further deferred consideration will be payable to the vendors of
Smith Melzack Pepper Angliss equal to 0.25 times the amount by which Aggregate
Profits exceeds £500,000. This further deferred consideration is subject to a
maximum of £100,000 and will be payable within 5 business days of finalisation
of Smith Melzack Pepper Angliss' accounts for the year ending 31 December 2006
and will be satisfied by the issue of new Ordinary Shares (to be issued at the
then prevailing middle market price).

The holders of the Loan Notes will be entitled to redeem them at par with effect
from six months from the date they are issued. Interest will accrue on the Loan
Notes at the base rate of Barclays Bank plc and is payable on 31 January, 30
April, 31 July, and 31 October in each year following the issue of the Loan
Notes.

The sale and purchase agreement contains a number of warranties and indemnities
given by the vendors of Smith Melzack Pepper Angliss to the Company.

The vendors of Smith Melzack Pepper Angliss have also undertaken to the Company
that they or any persons connected with them will not sell or dispose of any of
their respective interests in Ordinary Shares received as consideration for the
sale of their interests in Smith Melzack Pepper Angliss at any time before the
first anniversary of the Acquisition or the date on which the Company announces
its results for the year ending 30 September 2005, whichever is the later.

As described above, immediately prior to completion of the Acquisition, Smith
Melzack Pepper Angliss will acquire all of the business and assets of Smith
Melzack Pepper Angliss LLP pursuant to the terms of an intra-group
reorganisation agreement dated 28 February 2005. Following this reorganisation,
Smith Melzack Pepper Angliss will owe the aggregate sum of £800,000 to the
former partners of Smith Melzack Pepper Angliss LLP (the 'Loans'). £600,000 is
repayable by Smith Melzack Pepper Angliss on the date of completion of the
Acquisition. The remaining £200,000 is repayable by Smith Melzack Pepper Angliss
on 31 May 2005. The Company is obliged to procure that Smith Melzack Pepper
Angliss has sufficient funds to repay the Loans in cash on the relevant due
dates.

Board change

Following completion of the acquisition, Mr Ronald Franks will join the Board of
Mercury as an Executive Director. Mr. Franks has been Managing Partner of Smith
Melzack Pepper Angliss since 2001, and has 40 years experience in the commercial
agency sector.

Mr Ronald Franks, 58, during the past five years has been or continues to be a
director or partner of the following companies or entities:

Present Past

Director of two trustee companies : Smith Melzack (Service & Management)

1)      Intercity House Slough Ltd Smith Melzack (Facilities) Ltd

2)      Grayrose Properties Ltd

        Smith Melzack Pepper Angliss Ltd
        Smith Melzack Pepper Angliss (Professional Services) Ltd
        Smith Melzack Pepper Angliss (Management) Ltd
        Smith Melzack Pepper Angliss (Services) Ltd
        Smith Melzack Pepper Angliss (Croydon) Ltd

There is no further information in respect of Mr. Franks to be disclosed in
accordance with the AIM Rules.

The Placing

In order to finance the Acquisition and to provide some additional working
capital for the Enlarged Group, the Company has itself placed 120,000,000 new
Ordinary Shares with a small number of investors at a price of 0.5p per Ordinary
Share (the 'Placing'), pursuant to which the Company will receive gross proceeds
of £618,000 (before commissions of £18,000), which after commissions amounts to
net proceeds of £600,000. The proceeds of the Placing will, together with the
other cash balances of the Company, be used to provide additional working
capital for the Enlarged Group.

The new Ordinary Shares will, following allotment, rank pari passu in all
respects with the existing Ordinary Shares and will have the right to receive
all dividends and other distributions thereafter declared, made or paid in
respect of the issued ordinary share capital of the Company.

Lee Baron

The Company also announces that it has agreed the terms of an option with the
shareholders of Lee Baron (the 'Shareholders') pursuant to a call option deed
dated 1 March 2005 (the 'Option'). Lee Baron is a leading independent commercial
property agency in the UK. The company employs over 90 staff, has been trading
for over 20 years and currently operates from offices in London and Manchester.
It is involved in all aspects of commercial property, including management,
insurance, sales and acquisitions, rent reviews and valuations. For the year
ended 31 December 2003 turnover of the Lee Baron Group was £6,655,501, and
operating profits amounted to £465,550.

Under the Option, Mercury has the right exercisable at any time prior to 31 May
2005 to require the Shareholders to enter into an agreed form sale and purchase
agreement in respect of the entire issued share capital of Lee Baron.  If the
Company does not exercise the Option prior to 31 May 2005 it is obliged to pay
the Shareholders a contribution to their costs not exceeding £150,000 (including
VAT) incurred in relation to the preparation of the Option and the agreed form
sale and purchase agreement, other than in circumstances where the Company fails
to exercise the Option in certain circumstances, including where the
Shareholders shall have breached the warranties and undertakings set out in the
Option or if Lee Baron and subsidiaries for the time being are substantially
different from that which the Shareholders have led the Company to expect.

David Williams, the Chairman, commented:

'The acquisition of Smith Melzack Pepper Angliss is an important step in
achieving our stated strategy of building a vertically integrated European based
property services group. I am excited by the opportunity to cross sell the
Group's professional services across our businesses and look forward to working
with the highly respected Smith Melzack Pepper Angliss team. '

ENDS

Enquiries:

David J Williams Michael Cornish

Chairman Beaumont Cornish Limited

Mercury Group plc Tel: [phone]

Tel: [phone]

Appendix

                                  Definitions

the              the proposed acquisition of the entire issued share capital of
'Acquisition     Smith Melzack Pepper Angliss by the Company

'Board' or       the directors of the Company
'Directors'

'Company' or     Mercury Group PLC, formerly called 'Cater Barnard plc'
'Mercury '

'Enlarged        the Group and Smith Melzack Pepper Angliss
Group'

'Group'          the Company and its subsidiaries

'Lee Baron       Lee Baron Group Limited

'Loan Notes'     the unsecured loan notes to be issued to the vendors of Smith
                 Melzack Pepper Angliss

'Option'         the call option deed dated 1 March 2005 pursuant to which
                 Mercury has the right exercisable at any time prior to 31 May
                 2005 to require the shareholders of lee Baron to enter into an
                 agreed form sale and purchase agreement in respect of the
                 entire issued share capital of Lee Baron.

'Ordinary        Ordinary Shares of 0.1p each in the capital of the Company
Shares'

'Shareholders'   the shareholders of the entire issued share capital of Lee
                 Baron

'Smith Melzack   Smith Melzack Pepper Angliss Limited
Pepper
Angliss'


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