Disposal

Mentmore PLC
30 January 2004


FOR IMMEDIATE RELEASE   30 January 2004


                                  Mentmore plc
                                    Disposal


The following is the text of a letter to the shareholders of Mentmore plc ('
Mentmore') from Nicholas Smith, Chairman in respect of the disposal of
Mentmore's 49.9 per cent equity shareholding in IME.  It is included with a
notice of extraordinary general meeting, to be held on 23 February 2004, which
will today be sent to shareholders of Mentmore.


Enquiries

Mentmore plc                                                                            020 8946 3159

Nick Smith, Chairman
Martin Nye, Chief Executive
Clive Drysdale, Finance Director

Bridgewell Ltd                                                                          020 7003 3000
Greg Aldridge / Nick Lovering

Hoare Govett Ltd                                                                        020 7678 8000
Ranald McGregor Smith

Buchanan Communications Ltd                                                             020 7466 5000
Charles Ryland / Catherine Miles



1.            Introduction

On 10 December 2003, the Board of Mentmore announced that it had reached
agreement to sell its 49.9 per cent. equity shareholding in the IME joint
venture to IMI for £82.5 million in cash, which includes the repayment of
shareholder loans of approximately £23.5 million advanced to IME by Mentmore.
Mentmore will as a result be entirely focussed on its personal storage
activities. The Board intends to return £82.5 million in cash to Shareholders,
being an amount equivalent to the proceeds of the Disposal.



On 22 December 2003, the Board of Mentmore announced that it had received an
approach that may or may not lead to an offer for the Company and it further
announced on 12 January 2004 that it had received a number of other approaches,
which are being evaluated. This process is ongoing and Shareholders will be
informed of further developments as appropriate. As a consequence, the Company
is now within an ''Offer Period'' as defined by the City Code.



The Board wanted to be in a position to put firm proposals to Shareholders
regarding the Return of Capital but given the current position it does not
believe this to be appropriate at this time. The Board will continue to review
this position while evaluating the approaches that have been received.




No firm decision has been taken by the Board as to how funds are to be returned
to Shareholders. A Tender Offer is one possible method of returning capital to
Shareholders, but it requires Shareholders' approval. To avoid the need to call
a separate extraordinary general meeting, the Board is taking this opportunity
to seek Shareholders' approval to allow it to make a Tender Offer if this route
is subsequently chosen.



In view of its size relative to the market valuation of Mentmore, the Disposal
is conditional, inter alia, on approval by Shareholders.





2.             Background to and reasons for the Disposal

In the announcement of results for the year to 30 April 2003, Mentmore announced
that it had started discussions as to how best to realise the value of its
investment in IME. The Disposal announced on 10 December 2003 represents the end
of that process.



The Directors believe that the Disposal provides the best opportunity to realise
value from the investment in IME. Although the Directors believe that IME will
continue to grow, this growth would require a significant amount of additional
capital expenditure, which means that IME would require funding by Mentmore for
some years, rather than generating cash for Mentmore and the Shareholders. The
Directors believe that if Mentmore continued to hold its shares within IME, the
value of that investment would continue to grow, but they also believe that
there would be no certainty about when and at what level value for Shareholders
might be realised.



The origins of Mentmore's investment in IME date back to 1996, when Mentmore
acquired a company called British Data Management Plc (''BDM''). In 1999
Mentmore sold 50.1 per cent. of BDM to IMI, one of the world's leading companies
in records and information management, and entered into a joint venture
agreement relating to BDM with IMI, at which point BDM was renamed IME. At the
time, IMI had a very limited presence in Europe and Mentmore considered it
beneficial to enter into an alliance with the largest records management company
in the USA. Both Mentmore and IMI recognised the potential to provide records
management services into the European market. No pre-determined exit
arrangements were agreed by the parties and arrangements were put in place to
ensure that both parties had pre-emption rights in the event that there was a
change of control in either Mentmore or IMI, or a sale by either party of their
stake in IME.



Since the establishment of IME, considerable investment has been made by both
Mentmore and IMI in establishing the IME business to the current point where it
is a leading player in the European records management market. IME has made a
number of acquisitions whilst at the same time investing all surplus cash
generated in its organic business growth. As IME has grown, it has increasingly
developed its own management and therefore Mentmore is now no longer as involved
in the day to day management of the joint venture.




In July 2003, IME made its largest acquisition to date, the £185.5 million
acquisition of Hays IMS. This acquisition of an established business with a
large portfolio of existing customers was seen as highly beneficial to IME in
growing its business more quickly than would be possible through organic growth.
It was wholeheartedly supported by the Directors as it was believed that it
would increase the value of Mentmore's investment in IME.



Due to the timing of the disposal of Mentmore's serviced business space division
on 9 July 2003, Hays IMS was acquired by IME with bridging financing provided by
IMI. The equity element of the consideration required to be financed directly by
Mentmore and IMI was estimated to be £70 million.  Mentmore and IMI agreed an
option arrangement, which would allow Mentmore to invest its share of the £70
million, being £34.9 million, at a later date. In addition, IMI and Mentmore
have identified significant additional investment required in the IME business
over the next two years. By electing to dispose of the shareholding in IME,
Mentmore will not be required to fund any of this investment, and will not need
to invest its £34.9 million share of the £70 million equity element of the Hays
IMS consideration.



IME is a growing business in an expanding sector of the market and the Directors
have investigated a number of different methods of realising value from
Mentmore's equity shareholding. These methods have included continuing to hold
the investment and developing the IME business in conjunction with IMI,
partially selling or diluting Mentmore's holding in the joint venture, agreeing
an option arrangement with IMI to facilitate a sale at a future point in time or
floating the IME business separately. In each case, a number of logistical and
commercial issues were identified that would have disadvantaged Mentmore and
Shareholders.



During the expansion of IME, both through the acquisition of Hays IMS and
generally, it has significantly increased its indebtedness. IME's aggregate
external debt and liability for shareholder loans, as at 31 October 2003, was
£292 million. The Disposal therefore places an enterprise value of £410 million
on IME, being the aggregate of the equity value, shareholder loans and external
debt, which is comprised as follows:


                                                                £ million
Value of Disposal                                                    82.5
Mentmore shareholder loan                                          (23.5)
Value of Mentmore share of equity of IME                             59.0

100% of the equity value of IME                                     118.0
External debt and shareholder loans                                 292.0
Enterprise value of IME                                             410.0



The Directors believe that an enterprise value of £410 million represents a fair
value for the business given its current state of development. Mentmore will
receive £82.5 million for its economic interest in IME, of which £23.5 million
is the estimated repayment of loans made by Mentmore to IME and the balance is
for Mentmore's share of the equity of IME.  The Directors consider that the
value of the shareholding in IME to the Company justifies the price received.



The Directors have made previous public statements of their desire to return
cash to Shareholders when appropriate. The completion of this Disposal will
facilitate the proposed return of capital, as detailed below.



Clive Drysdale and Martin Nye will resign as directors of IME and its
subsidiaries following completion of the Disposal. I have been asked to remain
as a non-executive director of IME by IMI. No discussions will take place as to
my terms of appointment until after completion of the Disposal.



Following the Disposal, the Directors will be able to focus on the development
and expansion of the personal storage business. The Directors continue to
believe that there is an attractive opportunity to expand this business, which
has a strong market position in a sector that offers good returns and growth
prospects.



Further details of the prospects of the personal storage business are set out
below.



3.             Information on IME

IME is a joint venture between Mentmore (which owns 49.9 per cent. of the
equity) and IMI (which owns 50.1 per cent.). Its business is providing records
and data management services across Europe. It was established in 1999 as a
means by which IMI could develop a presence in Europe with a local partner, and
by which Mentmore could gain access to IMI's operational expertise, information
technology systems and customer base. IME now services more than 15,000 customer
accounts in 38 markets across Europe.



4.            Information on the Purchaser

IMI is the one of the world's leading companies in records and information
management. It is listed on the New York Stock Exchange and reported turnover of
US$1,318 million in the year to 31 December 2002. It provides such services as
courier pick-up and delivery, records filing, retrieval, and destruction,
database management, customised reporting and disaster recovery to more than
150,000 customers in the US and abroad.



5.             Principal terms and conditions of the Disposal

The Disposal is conditional upon the approval of Shareholders. The consideration
is £82.5 million, of which £23.5 million is the estimated repayment of loans
owing to Mentmore from IME. The consideration is payable immediately on
completion of the Disposal.





6.             Financial effects of the Disposal

After allowing for estimated transaction expenses of £0.8 million, the Company
will receive net cash proceeds from the Disposal of approximately £81.7 million.




Mentmore's 49.9 per cent. equity shareholding in IME was valued in the Group
balance sheet at £42.2 million as at 31 October 2003, including shareholder
loans of £23.5 million. The Disposal is expected to result in a profit before
taxation to the Group of approximately £20 million.



Mentmore has accounted for IME using joint venture accounting practices.
Extracts from the financial statements of Mentmore incorporating Mentmore's
share of IME are summarised as follows:


  Year to 30 April                      2003          2002           2001
                                         £m            £m             £m

  EBITDA                                 7.7           5.1           3.0
  Profit/(loss) before tax               2.3           1.3          (1.0)





7.             Proposed Return of Capital

In the announcement on 10 December 2003 the Directors announced that they were
proposing to return to Shareholders the proceeds from the sale of IME. The
Company has committed bank facilities in the UK of £102 million, of which £18
million was drawn as at 31 October 2003. The Directors believe that these
facilities are sufficient to develop the personal storage business in the medium
term. As such the Directors propose to return £82.5 million to Shareholders
(being equivalent to the total proceeds received for the Disposal).



The Board is currently reviewing a number of methods of achieving the Return of
Capital, including a Tender Offer, payment of a special dividend and a Court
approved scheme of arrangement.



Tender Offer

A Tender Offer for 15 per cent. or more of the Company's share capital would
require the approval of Shareholders and for a circular to be sent to
Shareholders. As such, the Board is seeking the authority to implement a Tender
Offer at the same time as seeking Shareholders' approval for the Disposal and a
resolution to allow the making of the Tender Offer will be put to Shareholders
at the Extraordinary General Meeting. The authority is being sought so that the
Tender Offer can be made to Shareholders without the need for calling a further
extraordinary general meeting, in the event that the Board determines that this
is the preferred method of completing the Return of Capital.



The principal features of the Tender Offer would be as follows:



•               Hoare Govett, the Company's brokers, would invite Shareholders
to tender Shares (subject to the maximum number indicated below) at a tender
price (which would fall within the minimum and maximum levels indicated below).
Following completion of the Tender Offer, Hoare Govett would require the Company
to purchase for cancellation at the tender price such number of Shares as is
equal to that number of Shares purchased by Hoare Govett under the Tender Offer.
Subject to the completion of the Disposal and the procedural issue of the
Company filing interim accounts at Companies House, the Company has
distributable reserves sufficient to implement the purchase of Shares by the
Company.



•               All Shareholders on the Company's register of members on a
specified date (other than certain overseas Shareholders where necessary to
avoid offending local laws relating to the implementation of any Tender Offer)
will be given the opportunity to participate in the Tender Offer.



•               The maximum number of Shares to be purchased would be such
number of Shares as would be derived by dividing the sum of £82.5 million by the
tender price.



•               The tender price would fall within the following minimum and
maximum levels:



                                             i)                  the minimum
price (exclusive of any expenses) which would be paid for any Share would be not
less than 10 per cent. below the average of the market value for a Share as
derived from the Daily Official List for the 10 business days ending on the
business day prior to the publication of the document containing the formal
terms of the Tender Offer; and



                                           ii)                  the maximum
price (exclusive of any expenses) which would be paid for any Share would not be
more than 30 per cent. above the average middle market value for a Share as
derived from the Daily Official List for the 10 business days ending on the
business day prior to the publication of the document containing the formal
terms of the Tender Offer.



•               Shareholders would be able to tender all or some of their
Shares. At the same time the Shareholders (other than certain overseas
Shareholders where necessary to avoid offending local laws relating to the
implementation of any Tender Offer) would be informed of the amount of the
tender price, they would also be notified of the minimum number of Shares that
they would be guaranteed to be able to sell (their ''Basic Entitlement'').
Shareholders would be able tender in excess of their Basic Entitlement, but such
excess would only be satisfied to the extent that other Shareholders tender less
than their Basic Entitlement.



•               Shareholders would not have to tender any Shares if they do not
wish to.



On 22 December 2003 the Company announced that it had received an approach that
may or may not lead to an offer for the Company. As a consequence the Company is
now within an ''Offer Period'' as defined by the City Code.



The Board wanted to be in a position to put firm proposals to Shareholders
regarding the Return of Capital but given the current position it does not
believe this to be appropriate at this time.  The Board will continue to review
this position while evaluating all of the approaches that have been received.



In the event that a Tender Offer is made, a further document (together with the
tender form) will be sent to Shareholders setting out full details of the Tender
Offer, and including further details about pricing and the terms and conditions
on which the Tender Offer will be made. This document will ensure all
Shareholders will be provided with an opportunity to review the detailed terms
and conditions proposed.



General Authority

Following a successful completion of any Tender Offer, the Board, subject to
consideration of the financial position of Mentmore, may wish to return further
surplus cash to Shareholders if appropriate. It may be that the method adopted
for returning such cash is by way of further Share purchases by the Company.
Accordingly, it is proposed to seek Shareholders' approval by way of the General
Authority to enable the Board to make further market purchases of Shares
subsequent to the implementation of any Tender Offer. A resolution seeking the
General Authority will be put to the Shareholders at the Extraordinary General
Meeting.



The General Authority would be limited to such maximum number of Shares as
represents 14.9 per cent. of the issued share capital of Mentmore after
completion of any Tender Offer. The minimum price per Share paid on any purchase
would not be less than the average of the market value for a Share (as derived
from the Daily Official List) for the 5 business days immediately preceding the
day on which the Shares are purchased.  The maximum price would not be more than
5 per cent. above the average of the market value for a Share (as derived from
the Daily Official List) for the 5 business days immediately preceding the day
on which the Shares are purchased. Unless subsequently renewed, varied or
revoked, the General Authority would expire at the conclusion of the next annual
general meeting of the Company, or 12 months from the date of passing of the
resolution, whichever shall occur first.



The Board would only use the power to make additional market purchases of Shares
if the effect would be to increase expected earnings per Share and if they
considered such purchases to be in the interest of Shareholders generally. The
Board has no present intention to make additional purchases over and above those
contemplated by any Tender Offer but would like to have the flexibility to do
so.



The consideration for any further purchases of Shares would be paid in cash. The
Board would have to be satisfied that the Company has sufficient financial
resources available to make such further purchases before carrying out any such
further purchases.



8.         Profile of the Continuing Group

Following the Disposal, the sole trading activity of the Continuing Group will
be its personal storage operation, which trades in the UK under the Spaces brand
and as Une Piece en Plus in France.  Mentmore operates 44 personal storage sites
in the UK and 7 personal storage sites in France. In addition, Mentmore has 3
business centres that are co-located with storage sites, and 1 site which is
currently let while its development potential is evaluated.



The Directors believe that Mentmore's personal storage operations have a strong
market position, potential for growth, strong levels of returns and good asset
backing.



Strong market position

Mentmore aspires to continue to develop its market leadership position within
the UK and Greater Paris markets. Spaces has the largest number of storage sites
of any operator in the UK and the greatest space capacity with a total of
233,000 square metres. Spaces also has the broadest national coverage of any
operator in the UK. Une Piece en Plus is one of the leading operators in the
central Paris market with 23,000 square metres of total capacity.



Potential for growth

Following the Disposal, Mentmore aims to continue to improve the performance of
the existing business, before moving to take advantage of the growth
opportunities that exist in the sector in both the UK and France. Significant
investments have been made recently in strengthening the management of the
business to help achieve these objectives.



The storage business has attractive economics, particularly when centres are
mature. Operating margins before central costs in the six months ended 31
October 2003 from UK centres that have been open for more than five years were
64.2 per cent. for freehold sites and 56.3 per cent. for leasehold sites. The
equivalent figures for sites that are less than five years old were 35.7 per
cent. for freehold sites and 3.4 per cent. for leasehold sites, which
demonstrates the extent to which margins improve as occupancy levels in a site
increase.



The UK and French markets remain under-developed compared to the more mature
market places of the US and Australia. The estimated current level of average
per capita storage space in the UK is 0.23 square feet per capita, compared to
estimates of 4.3 square feet per capita in the US and 0.9 square feet per capita
in Australia. Although the Directors do not believe that levels of storage space
in the UK will rise to those in the US, they anticipate further growth in the
market as awareness of the self-storage proposition increases.



Having analysed its market in detail, including looking at potential demand and
current capacity across the UK, the Directors believe that the number of sites
could grow at 10-15 per cent. per annum and plan to grow Mentmore's UK
operations in line with this. Growth is also planned in the Greater Paris
market. The Directors will only open sites if they consider that these sites
will deliver the target return on capital of 15 per cent. once the centre is
mature.



The rate of growth of new sites will also be constrained by the Directors'
intention to ensure that earnings growth is maintained, notwithstanding the
dilutive effect of opening new sites which are loss making until a breakeven
level of occupancy is achieved.



The level of growth planned for the next three to four years can be funded from
the cash flows of the business and from debt facilities. The exact amount
required per new centre will depend on whether the site is freehold or leasehold
and its location and size, but the total investment required is likely to be
between £2 million and £5 million per site.



Asset backing

The Continuing Group will have a strong asset backing and these assets can be
used as security for borrowing.



The book value of the Company's tangible fixed assets, as at 31 October 2003,
was approximately £99 million. This figure includes £83 million of freehold
assets, £6 million of leasehold improvements and £10 million of plant and
fixtures. There was £41 million of goodwill in the balance sheet of its interim
accounts for the six months to 31 October 2003. In addition to the freehold
sites, there are the 17 leasehold sites in the UK that represent 33 per cent. of
the Group's total self storage capacity in the UK. Six out of the seven French
sites are leaseholds.







9.             Current Trading and Prospects of the Continuing Group

The results for the first half of the financial year for personal storage, as
reported in the Company's interim accounts for the six months to 31 October
2003, announced on 10 December 2003 show sales increasing to £15.0 million, a 25
per cent. increase on the comparable period in the previous year.  Part of this
change is due to the acquisitions that were made in September 2002, which were
only in last year's numbers for one month, and the impact of the business
centres which were previously reported as part of the serviced business space
division.



EBITDA from personal storage increased by 16 per cent. to £5.7 million and
operating profit before goodwill amortisation increased overall by just under 10
per cent. to £4.2 million. The rate of profit growth was held back by the
increased investment in management, marketing and IT resources intended to
create the platform for further growth. Sales from non-storage activities
increased as a percentage of sales from 10.2 per cent. to 11.8 per cent. The
division delivered an organic growth in operating profits before goodwill
amortisation in the six months of 8 per cent. This reverses the decline of 4 per
cent. shown for the year ended 30 April 2003.



Overall, total space capacity increased marginally over the six month period
with capacity utilisation increasing from 64.9 per cent. to 70.6 per cent. The
average price achieved for self storage activities increased marginally. The
main focus continues to be improving the performance of the existing sites with
the target of raising the average level of occupancy to 85 per cent. This would
mean letting an additional 37,000 square metres and due to the predominantly
fixed nature of costs in the business, this would significantly improve the
profitability of the business.



The current level of profits from the personal storage business and the
additional latent profit within the business gives the Board confidence in
planning a progressive dividend policy. The intention is to pay out a dividend
at a level that is covered around three times by post tax profits as stated
after the amortisation of goodwill. This level of dividend payout is thought to
be appropriate at this stage of the Group's development. It is designed to
balance the funding needs of the Group's growth plans whilst providing a
reasonable level of dividend to Shareholders on the strength of the existing
business.



The Group continues to trade in line with the Board's expectations. The Board
continues to be confident of the trading outlook and prospects for the
Continuing Group in the current financial year.



10.             Dividends

The Directors are pleased to confirm that the Company now has distributable
reserves and subject to the procedural issue of filing interim accounts for
Mentmore at Companies House, the Company is able to pay dividends. Accordingly,
both the special interim dividend of 0.89 pence per Share announced on 9 July
2003 and the interim dividend of 0.445 pence per Share announced on 10 December
2003 will be paid on 8 March 2004 to Shareholders on the Company's register of
members on 13 February 2004.



11.            Extraordinary General Meeting

The Company has today given notice of an Extraordinary General Meeting, to be
held at 10.00 a.m. on 23 February 2004.



In light of the fact that the Company is in an Offer Period, the passing of the
resolutions to be put to the Extraordinary General Meeting will represent the
approval of the Disposal, the authority to make a Tender Offer and the General
Authority for the purposes of the City Code.



12.             Recommendation

Your Board, which has been so advised by Bridgewell, considers the Disposal to
be in the best interests of the Company and its Shareholders as a whole. In
providing its advice to the Directors, Bridgewell have taken into account the
Directors' commercial assessments of the Disposal. Your Board also considers the
authority to make a Tender Offer and the General Authority to be in the best
interests of the Company and its Shareholders as a whole.



Accordingly, the Directors unanimously recommend Shareholders to vote in favour
of the resolutions to be proposed at the Extraordinary General Meeting. The
Directors intend to vote in favour of the resolutions in respect of their own
beneficial interests amounting in aggregate to 1,542,259 Shares, representing
approximately 0.85 per cent. of the Shares currently in issue.





                                  DEFINITIONS


'Act'                               the Companies Act 1985


''Bridgewell''                      Bridgewell Limited


''City Code''                       the City Code on Takeovers and Mergers


''Continuing Group''                Mentmore and its subsidiary undertakings following the Disposal


''Daily Official List''             the official list of the London Stock Exchange


''Disposal''                        the proposed disposal of Mentmore's 49.9 per cent. equity shareholding
                                    in IME in accordance with the terms of the Disposal Agreement


''Disposal Agreement''              The agreement dated 10 December 2003 made between Mentmore and IMI for
                                    the purchase by IMI of Mentmore's 49.9 per cent. equity shareholding in
                                    IME


''Extraordinary General             the extraordinary general meeting of Mentmoreto be held on 23 February
                                    2004 or any adjournment thereof
Meeting''


''FSA''                             the Financial Services Authority


''FSMA''                            the Financial Services and Markets Act 2000


''General Authority''               Shareholders' authority given to the Company by way of the passing of
                                    the special resolution set out in the notice of EGM, to make further
                                    market purchases once the Tender Offer has been implemented and
                                    completed


'Group'                             the Company and its subsidiary undertakings


'Hays IMS'                          the European operations of the Hays Information Management Services
                                    business


''Hoare Govett''                    Hoare Govett Limited


''IMI''                             Iron Mountain Incorporated


''IME''                             Iron Mountain Europe Limited


''Listing Rules''                   the listing rules which are made by the UK Listing Authority for the
                                    purposes of Part VI of FSMA and published in the book entitled ''The
                                    Listing Rules'', as from time to time amended (except that the Best
                                    practice provisions at the end of the book, chapter  headings, paragraph
                                    headings and the section at the start of each chapter headed ''Scope of
                                    chapter'' do not form part of the Listing Rules)


''London Stock Exchange''           the London Stock Exchange plc


''Mentmore'' or ''Company''         Mentmore plc and/or its subsidiary undertakings as the context may
                                    require



''Return of Capital''               the proposal by Mentmore to return £82.5 million in cash to
                                    Shareholders, being an amount equivalent to the proceeds of the Disposal


''Shares'' or ''Ordinary Shares''   ordinary shares of 10p each in the share capital of Mentmore


''Shareholder'' or ''Shareholders'' a holder of Shares


''Tender Offer''                    the public invitation to Shareholders to tender their Shares at a
                                    specified price which may be made on behalf of the Company by Hoare
                                    Govett


''UK Listing Authority''            the FSA acting in its capacity as the competent authority for the
                                    purposes of Part VI of the FSMA, including where the context  so
                                    permits, any committee, employee, officer or servant to whom any
                                    function of the UK Listing Authority may from time to time be delegated





The terms 'subsidiary' and 'subsidiary undertaking' as used in this announcement
                                       shall have the meanings given by the Act.












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