Recommended Merger Offer

Millfield Group PLC
06 August 2004

Date:                    6 August 2004

On behalf of:            Millfield Group plc and Inter-Alliance Group PLC

Embargoed until:         0700hrs

Not for release, publication or distribution in or into the United States,
Canada, Australia or Japan



Creation of UK's Largest National Independent Financial Adviser



RECOMMENDED MERGER OFFER
by COLLINS STEWART LIMITED on behalf of
MILLFIELD GROUP PLC ("Millfield")
for
INTER-ALLIANCE GROUP PLC ("Inter-Alliance")


SUMMARY OF KEY INFORMATION

The following summary should be read in conjunction with the full text of the
attached announcement.



•         Millfield and Inter-Alliance announce today that they have reached
agreement on the proposed merger of their two businesses, which, subject to
regulatory approval by the Financial Services Authority, will be achieved
through a recommended all share offer to be made by Collins Stewart on behalf of
Millfield for the entire issued and to be issued ordinary share capital of
Inter-Alliance.

•         Millfield and Inter-Alliance are two of the largest national firms of
advisers in the UK with a combined advisory force of approximately 1,850.

•         The Merger brings together two of the most significant companies in
the financial services distribution sector and will create the largest branded
independent national advisory distribution business within the UK, with proforma
combined annual turnover of approximately £105.5 million.

•         The boards of Millfield and Inter-Alliance believe that the synergies
that exist between the two companies represent an excellent "business fit" which
will allow the New Group to maximise its distribution capabilities, combining
competencies and skills to make the best use of future opportunities as the
market consolidates.

•         The directors of Millfield and Inter-Alliance have identified the key
benefits of the merger as:
-  economies of scale;
-  strong leadership;
-  a comprehensive distribution system;
-  market leading technology; and
-  improved financial position.

•         The directors of Millfield and the Proposed Directors have
well-developed skills in the restructuring and integration of businesses
including the rationalisation required to generate significant cost savings.

•         Up to £15 million of funding has been secured (in compliance with our
regulator's requirements) by way of loans for integration and working capital
purposes from five leading financial institutions - AXA Sun Life plc, Friends
Provident Life and Pensions Limited, Prudential UK Services Limited, Scottish
Widows plc and Skandia Life Assurance (Holdings) Limited.

•         The Merger Offer is being made on the basis of 5 New Millfield Shares
for every 236 Inter-Alliance Shares valuing each Inter-Alliance Share at 1.25
pence and the entire issued and to be issued share capital of Inter-Alliance at
approximately £11.35 million.

•         The merger is unanimously recommended by the boards of both Millfield
and Inter-Alliance which believe that the proposed Merger is very much in the
best interests of the shareholders of both companies and of the sector through
the creation of a strong, compliant and adviser-focused distribution business
which will play a full part in a new era of corporate and personal financial
services in the UK.

•         The New Group will be called Millfield Group plc.

Commenting on the proposed merger, Paul Tebbutt, Chief Executive of Millfield,
said:

"We are extremely excited about the opportunities that are facing us.  We are
creating a financial services distribution company with the scale, financial
resources, technology and team required in the new economic, political and
regulatory environment in which we now operate.  The New Millfield Group will be
the largest national independent financial adviser in the UK."

Keith Carby, Chairman of Inter-Alliance, added:

"The joining of Millfield and Inter-Alliance will be the single biggest merger
that has happened in distribution.  We are delighted with the support the merger
has received from these five leading product providers which is a further
endorsement of our strategy and the excellence of our people.  Scale and
independence are two of the key ingredients that are essential to be able to
deliver value and service for all our stakeholders.  We unanimously recommend
this merger to our shareholders and believe that, in Millfield, we have found
our perfect partner."



Enquiries:
Millfield  Group plc                                  020 8604 2607
Paul Tebbutt, Chief Executive

Collins Stewart                                       020 7523 8350
Stephen Keys

Redleaf Communications                                020 7955 1410
Emma Kane

Inter-Alliance Group PLC                              01285 886702
Keith Carby, Chairman & Chief Executive

Ernst &Young LLP                                      020 7951 2000
John Stephan



The availability of the Merger Offer to persons not resident in the United
Kingdom may be affected by the laws of the relevant jurisdiction.  Persons who
are not resident in the United Kingdom should obtain advice and observe any
applicable requirements.  The Merger Offer will not be made, directly or
indirectly, in or into, or by use of the mails, or by any other means or
instrumentality (including, without limitation, facsimile transmission,
electronic mail, telex or telephone) of interstate or foreign commerce, or of
any facility of a national securities exchange, of the United States, Canada,
Australia or Japan, and the Merger Offer will not be capable of acceptance by
any such means, instrumentality or facility or from within the United States,
Canada, Australia or Japan.  Accordingly, copies of this announcement and any
other documents related to the Merger Offer are not being, and must not be,
mailed or otherwise distributed or sent in or into the United States, Canada,
Australia or Japan and persons receiving such documents (including custodians,
nominees and trustees) must not distribute or send them in, into or from such
jurisdictions.

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

Collins Stewart Limited, which is regulated in the United Kingdom by The
Financial Services Authority, is acting exclusively for Millfield and no-one
else in connection with the Merger Offer and will not be responsible to anyone
other than Millfield for providing the protections afforded to customers of
Collins Stewart Limited nor for giving advice in relation to the Merger Offer.

Ernst & Young LLP, which is regulated in the United Kingdom by The Financial
Services Authority, is acting exclusively for Inter-Alliance and no-one else in
connection with the Merger Offer and will not be responsible to anyone other
than Inter-Alliance for providing the protections afforded to clients of Ernst &
Young LLP nor for giving advice in relation to the Merger Offer.

This announcement has been approved by Collins Stewart Limited solely for the
purposes of section 21 of the Financial Services and Markets Act 2000.


Not for release, publication or distribution in or into the United States,
Canada, Australia or Japan



ANNOUNCEMENT

6 August 2004


                                            RECOMMENDED MERGER OFFER

                                                       by

                                            COLLINS STEWART LIMITED

                                                  on behalf of

                                       MILLFIELD GROUP PLC ("Millfield")

                                                      for

                                  INTER-ALLIANCE GROUP PLC ("Inter-Alliance")



1.      INTRODUCTION

The boards of Millfield and Inter-Alliance today announced that they have
reached agreement on the terms of a proposed merger of their two businesses.
The Merger will be achieved through a recommended all share offer to be made by
Collins Stewart, on behalf of Millfield, for the entire issued and to be issued
ordinary share capital of Inter-Alliance.

The boards of Millfield and Inter-Alliance also announced today that they have
secured working capital funding from five leading financial institutions, namely
AXA Sun Life plc, Friends Provident Life and Pensions Limited, Prudential UK
Services Limited, Scottish Widows plc and Skandia Life Assurance (Holdings)
Limited. These Loan Providers have agreed to provide funding to the New Group by
way of loans of, in aggregate, up to £15 million for integration and working
capital purposes. £10.7 million of this funding is conditional upon the Merger
Offer becoming or being declared unconditional in all respects.

2.     THE MERGER OFFER

The Merger Offer, which is being unanimously recommended by the board of
Inter-Alliance, will be made on the basis of 5 New Millfield Shares for every
236 Inter-Alliance Shares to which the Merger Offer relates.

Based on the closing middle market price of 59 pence per Millfield Share on 5
August 2004, the Merger Offer:

•         values each Inter-Alliance Share at approximately 1.25 pence;

•         values the entire existing issued ordinary share capital of
Inter-Alliance at approximately £11.35 million;

•         represents a premium of 108 per cent. over the closing middle market
price of 0.6 pence per Inter-Alliance Share on 4 June 2004, the last dealing day
before the announcement that Inter-Alliance and Millfield were in discussions
which might or might not lead to a merger of the companies; and

•         represents a premium of approximately 117.4 per cent. over the closing
middle market price of 0.575 pence per Inter-Alliance Share on 5 August 2004
(the last dealing day prior to this announcement).

If the Merger Offer becomes or is declared unconditional in all respects, full
acceptance of the Merger Offer, assuming no exercise or vesting of any options
or awards outstanding under the Inter-Alliance Share Option Schemes, would
result in the issue of up to 19,235,069 New Millfield Shares, representing
approximately 16.4 per cent. of the issued share capital of Millfield as
enlarged by the Merger.  Inter-Alliance Shares acquired under the Merger Offer
will be acquired by Millfield fully paid and free from all liens, charges and
encumbrances, rights or pre-emption and any other third party rights or
interests and together with all rights attaching thereto, including the right to
receive all dividends and other distributions declared after today's date.

Fractions of New Millfield Shares will not be allotted to Inter-Alliance
Shareholders and their entitlement will be rounded down to the nearest whole
number of New Millfield Shares.

The Merger Offer will extend to any Inter-Alliance Shares which are
unconditionally allotted or issued whilst the Merger Offer remains open for
acceptance (or by such earlier date as Millfield may, subject to the Code
determine, such earlier date not, without the consent of the Panel, being
earlier than the date on which the Merger Offer becomes unconditional as to
acceptances or, if later, the First Closing Date), as a result of the exercise
of options granted under the Inter-Alliance Share Schemes or otherwise.

The Inter-Alliance Shares to be acquired pursuant to the Merger Offer will be
acquired by Millfield fully paid, free from all liens, charges, equitable
interests and encumbrances and other third party interests together with all
rights attaching thereto on or after the date of this announcement, including
the right to receive and retain all dividends and other distributions (if any)
declared, made or paid hereafter.

The New Millfield Shares to be allotted and issued in connection with the Merger
Offer will be allotted and issued credited as fully paid and will rank pari
passu in all respects with the existing issued Millfield Shares, together with
the right to receive and retain in full all dividends and other distributions
declared, made or paid after the date of this announcement.

Due to its size and the requirements of the AIM Rules, the Merger will be
conditional, inter alia, on the approval of Millfield shareholders and on
respectively the re-admission of the existing Millfield Shares and the admission
of the New Millfield Shares to trading on AIM and the obtaining of approval from
the FSA in respect of the change of control of Inter-Alliance. Millfield
Shareholders representing, in aggregate, 7.4 per cent. of Millfield's existing
issued ordinary share capital have given undertakings that they will vote in
favour of the Resolution to be proposed at the Extraordinary General Meeting of
Millfield to approve the Merger, as have the directors of Millfield in respect
of their holdings of a further 5.9 per cent. of Millfield's existing issued
ordinary share capital.

Application will be made to the London Stock Exchange for respectively the
Millfield Shares to be re-admitted and the New Millfield Shares to be admitted
to trading on AIM.  It is expected that dealings will commence in the New
Millfield Shares on the first dealing day following the day on which the Merger
Offer becomes or is declared unconditional in all respects (save only for the
admission to trading of such New Millfield Shares becoming effective).
Certificates for New Millfield Shares to be allotted and issued to
Inter-Alliance Shareholders will be despatched by no later than fourteen days
after the Merger Offer becomes or is declared unconditional in all respects or
fourteen days after receipt of a valid acceptance of the Merger Offer, whichever
is later.

The formal documentation relating to the Merger Offer will be despatched to
Inter-Alliance Shareholders and Millfield Shareholders (other than certain
oversees shareholders) as soon as practicable (and, in any event, save with the
consent of the Panel, within 28 days of the date of this announcement).

3.     UNDERTAKINGS TO ACCEPT THE OFFER

Millfield has received irrevocable undertakings to accept the Merger Offer from
the directors of Inter-Alliance and an institutional Inter-Alliance Shareholder
in respect of an aggregate of 42,457,500 Inter-Alliance Shares, representing
approximately 4.7 per cent. of Inter-Alliance's existing issued ordinary share
capital.  These undertakings are binding in the event that a higher competing
offer for Inter-Alliance is made.

In addition, Millfield has received irrevocable undertakings to accept the
Merger Offer from certain institutional Inter-Alliance Shareholders in respect
of in aggregate 115,792,667 Inter-Alliance Shares (representing approximately
12.7 per cent. of Inter-Alliance's existing issued ordinary share capital).
These undertakings cease to be binding in the event of a third party making a
general offer at a price of 1.5 pence per Inter-Alliance Share or higher.

Further, Millfield has received letters of intent to accept the Merger Offer
from an institutional shareholder in respect of 70,000,000 Inter-Alliance Shares
(representing approximately 7.7 per cent. of Inter-Alliance's existing issued
ordinary share capital) and from a further institutional shareholder in respect
of 83,804,199 Inter-Alliance Shares (representing approximately 9.2 per cent. of
Inter-Alliance's existing issued ordinary share capital) provided that no third
party makes a general offer at a price of 1.375 pence per Inter-Alliance Share
or higher.

Accordingly, Millfield has received irrevocable undertakings or letters of
intent to accept the Merger Offer in respect of in aggregate 312,054,366
Inter-Alliance Shares (representing approximately 34.4 per cent. of
Inter-Alliance's existing issued ordinary share capital).

One of the Loan Providers has been provided with financial information in
relation to the New Group in connection with their agreement to provide loan
facilities as referred to above  and has undertaken, at the request of the
Panel, not to accept the Merger Offer until it has become or been declared
unconditional as to acceptances. That Loan Provider, who also holds Millfield
Shares, has undertaken, at the request of the Panel, not to vote in favour of
the Resolution to be proposed at the EGM.

4.     BACKGROUND TO AND REASONS FOR THE MERGER OFFER

The introduction of FSMA in December 2001 placed a greater regulatory burden on
market participants.  This, combined with other factors such as the imperative
to invest in technology, has encouraged the trend toward sector consolidation as
smaller IFA firms have found it increasingly difficult to cope with such
additional cost and regulatory burdens. The directors of Millfield and
Inter-Alliance believe that this trend toward sector consolidation is set to
accelerate as a result of proposed regulatory changes, including depolarisation
and the arrival of mortgage and general insurance regulation.

The directors of both Millfield and Inter-Alliance have developed similar
strategies in their respective organisations arising from a shared belief about
how the distribution of financial services in the UK will develop.  The
directors of both Millfield and Inter-Alliance believe that the Merger has the
potential to create the first of a new generation of large-scale consolidated
financial advisory businesses in a sector where the need for scale is
increasingly important.

The directors of Millfield and Inter-Alliance have identified the key benefits
of the Merger as:

  • economies of scale;

  • strong leadership;
  • a comprehensive distribution system;
  • market leading technology; and
  • improved financial position.

5.     RECOMMENDATION

The directors of Inter-Alliance, who have been so advised by Ernst & Young LLP,
consider the terms of the Merger Offer to be fair and reasonable.  In providing
advice to the directors of Inter-Alliance, Ernst & Young LLP has taken into
account the commercial assessment of the directors of Inter-Alliance.

Accordingly, the directors of Inter-Alliance will unanimously recommend all
Inter-Alliance Shareholders to accept the Merger Offer as they have irrevocably
undertaken to do in respect of all the Inter-Alliance Shares in which they are
interested, which together amount to 8,750,000 Inter-Alliance Shares,
representing approximately 1.0 per cent. of Inter-Alliance's issued ordinary
share capital.

6.     INFORMATION ON MILLFIELD

Millfield commenced trading in 1998 and since that time has become a leading
independent financial services advisory group. The company was admitted to AIM
in March 2001 and, through acquisitions and organic growth, has increased its
number of advisers and professional staff from approximately 100 as at March
2001 to over 700 today. The Millfield Group's strategy is to develop new ways of
delivering IFA services, which will offer financial advisers and their clients a
significantly improved investment and administration process, combining wide
product choice with advice.

The principal operating company of the Millfield Group, Millfield Partnership
Limited, provides independent financial advice in the core areas of life
insurance, mortgages, pension planning and investment products, as well as
specialist areas such as business assurance, professional connections and
affinity marketing. Millfield Associate Partnership provides other IFA companies
with the opportunity to become a branded Millfield Associate and benefit from
economies of scale, training, compliance, marketing and IT support.

The Millfield Group has implemented focused marketing strategies that have
enabled Millfield to target specialist sectors such as care homes where it now
has the largest specialist financial advisory group in the UK.

For the financial year ended 31 March 2004, Millfield reported turnover of £41.9
million (2003: £26.1 million) representing an increase of over 60 per cent.
against the previous year and losses on ordinary activities before tax and
exceptional items of £14.1 million (2003: £13.4 million).

7.     INFORMATION ON INTER-ALLIANCE

Inter-Alliance, which was founded in 1993, is one of the UK's largest national
IFA groups, providing an integrated wealth management advisory service to high
net worth individuals, corporate entities and the professional market.  Existing
Inter-Alliance Shares are traded on AIM, Inter-Alliance having been floated in
May 1998.

Inter-Alliance has a national infrastructure and service capability.  Its
approximately 1,250 advisers have access to a wide range of financial planning
solutions and financial products, including investment products, life assurance,
mortgage and pensions products.  Inter-Alliance's activities are predominantly
based in the UK where its business includes a national IFA group and the Sage
network (the major part of HST, which was acquired by the Inter-Alliance Group
in August 2002).  In addition Inter-Alliance has an international business based
in Cyprus, with operations in Africa and Asia.  Inter-Alliance is regulated by
the FSA and is registered with the Mortgage Code Compliance Board.

During 2002 and 2003, Inter-Alliance implemented a major and ongoing
restructuring programme, with the aim of significantly reducing the
Inter-Alliance Group's cost base and streamlining its organisational structure,
whilst at the same time improving the technology, sales and business processing
systems of the Inter-Alliance Group.  The addition of a channel for
non-regulated business through PMH Alliance Limited, which started trading in
August 2003, has enabled the Inter-Alliance Group to benefit from the increasing
activity of its advisers in this sector.

For the financial year ended 31 December 2003, Inter-Alliance reported turnover
of £63.6 million (2002: £51.9 million) representing an increase of 23 per cent.
against the preceding year and losses on ordinary activities before tax and
exceptional items of £20.6 million (2002: £12.0 million loss).

8.     CURRENT TRADING AND PROSPECTS FOR MILLFIELD

Results for the quarter ended 30 June 2004 were in line with the Millfield
board's expectations.

  • Turnover continues to grow at an annualised rate of over 50 per cent.;
  • Gross margins and adminstration costs remain tightly controlled; and
  • Monthly losses are sharply reduced from those in the previous year.

The Millfield board remain confident of achieving their plans for the year.

9.     CURRENT TRADING AND PROSPECTS FOR INTER-ALLIANCE

In the results announcement on 30 June 2004 the directors of Inter-Alliance
stated that they were pleased with the trading performance in the first quarter
with volumes significantly better than the previous year.  This has continued in
line with the Inter-Alliance directors' expectations with six month revenue 19
per cent. ahead of the first half of 2003. The directors of Inter-Alliance
believe these results are to some extent a consequence of an improved market but
are also derived from the actions taken in the second half of 2003 to
restructure the Inter-Alliance Group.

In parallel with the Merger discussions, progress has continued to be made on
the Inter-Alliance restructuring programme including the relocation of the
Swindon support centre to Cirencester, exit from the third floor lease in
Wimbledon and the closure of 10 additional operating locations. Business
processes have been improved by the introduction of group-wide functionality in
compliance, supervision and monitoring.

Adviser productivity has shown further improvements and is now at annualised
rate of £57,000.  Continuing improvements in reported monthly trading and cash
flows reflect the overhead savings made in the year to date. However as
previously reported further cost reductions of £2 million were deferred pending
merger discussions and the aborted Berkeley Berry Birch Plc transaction and, in
addition, the compromise of departing directors will result in an exceptional
charge of £1.4 million in the first half of the current financial year.

The requirement to publish Inter-Alliance's annual report and accounts for the
year ended 31 December 2003 during the ongoing Merger discussions meant that the
Inter-Alliance directors were not able to provide the Inter-Alliance Group's
auditors with sufficient evidence surrounding the certainty of the Merger or the
certainty of adequate funding in the event that the Merger does not proceed.
Accordingly in the circumstances the auditors had no option but to qualify the
accounts in the this regard.

At that time the Inter-Alliance directors stated that in the event that the
Merger did not proceed a number of other strategic options had been maintained
and that it would be likely to require an alternative source of funding to
provide an adequate level of working and regulatory capital. Since then the
focus has been on the Merger and other strategic options have not been pursued.
In the event that the Merger does not proceed the Inter-Alliance directors now
believe that additional funding would be required at that time to provide an
adequate level of working and regulatory capital.

10.     DIRECTORS, MANAGEMENT AND EMPLOYEES  

It is proposed that, following the Merger Offer becoming or being declared
unconditional in all respects, Keith Carby, Michael Burne and Tom Morton will
join the board of Millfield from Inter-Alliance. Conditionally on the Merger
Offer becoming or being declared unconditional in all respects, Roger Brosch,
Darrell Smith and Bryan Beeston have agreed to step down as Directors of
Millfield but will remain with the New Group as directors on the newly formed
group executive board.

The Directors and Proposed Directors have confirmed that the existing employment
rights, including pension rights, of all the management and employees of
Inter-Alliance will be fully safeguarded following completion of the Merger.

11.     INTER-ALLIANCE SHARE SCHEMES

Millfield will make appropriate proposals to participants in the Inter-Alliance
Share Schemes once the Merger Offer becomes or is declared unconditional in all
respects, to the extent that options have not been exercised.

12.     COMPULSORY ACQUISITION, DE-ADMISSION AND RE-REGISTRATION

If sufficient acceptances of the Merger Offer are received and/or sufficient
Inter-Alliance Shares are otherwise acquired, Millfield intends to apply the
provisions of Sections 428 to 430F (inclusive) of the Act to acquire
compulsorily any outstanding Inter-Alliance Shares following the Merger Offer
becoming or being declared wholly unconditional.

It is also intended that, following the Merger Offer becoming or being declared
wholly unconditional and subject to any applicable requirements of the Stock
Exchange, Millfield will procure that Inter-Alliance will apply to the London
Stock Exchange for the admission of its shares to trading on AIM to be
cancelled.  It is anticipated that the cancellation of the admission of the
Inter-Alliance Shares to trading on AIM will, subject to the AIM Rules, take
effect no earlier than 20 business days following the Merger Offer becoming or
being declared wholly unconditional.  Cancellation of admission would
significantly reduce the liquidity and marketability of any Inter-Alliance
Shares not acquired by Millfield.

The Merger will be treated as a reverse takeover of Millfield for the purposes
of the AIM Rules and will result in the cancellation of the admission of the
Millfield Shares to trading on AIM.  Application for re-admission will be made
with a view to all of the shares in the enlarged share capital of Millfield
being admitted to trading on AIM shortly following the first closing date of the
Merger Offer.

13.     FINANCIAL AND OTHER INFORMATION

Financial and other information relating to each of Millfield and Inter-Alliance
is set out in the Offer Document and in the Admission Document.

14.     GENERAL

The directors of Inter-Alliance accept responsibility for the information
contained in this announcement relating to the Inter-Alliance Group, themselves
and their immediate families. To the best of the knowledge and belief of the
directors of Inter-Alliance (who have taken all reasonable care to ensure that
such is the case), the information contained herein for which they accept
responsibility is in accordance with the facts and does not omit anything likely
to affect the import of such information.

The directors of Millfield accept responsibility for the information contained
in this announcement other than relating to the Inter-Alliance Group, the
directors of Inter-Alliance and their immediate families. To the best of the
knowledge and belief of the directors of Millfield (who have taken all
reasonable care to ensure that such is the case), the information contained
herein for which they accept responsibility is in accordance with the facts and
does not omit anything likely to affect the import of such information.

Neither Millfield nor any of the directors of Millfield nor, so far as Millfield
is aware, any party acting in concert with Millfield, owns or controls any
Inter-Alliance Shares or holds any options to purchase Inter-Alliance Shares or
holds any derivatives referenced to Inter-Alliance Shares.  In the interests of
confidentiality prior to this announcement, Millfield has not made enquiries in
this respect of certain of the parties who may be deemed by the Panel to be
acting in concert with Millfield for the purposes of the Merger Offer.

The conditions and certain further terms to which the Merger Offer will be
subject or as may be required to comply with the provisions of the Code are set
out or referred to in Appendix I of this announcement and will be set out in
full in the Offer Document and related Form of Acceptance.  The bases and
sources used in this announcement are outlined in Appendix II.  A summary of the
financial effects of acceptance of the Merger Offer are set out in Appendix III.
Appendix IV contains definitions of certain terms used in this announcement.
The Offer Document and the Form of Acceptance will be despatched to
Inter-Alliance Shareholders in due course.

The availability of the Merger Offer to Inter-Alliance Shareholders who are not
resident in the UK may be affected by the laws of the relevant jurisdiction.
Inter-Alliance Shareholders who are not resident in the UK should inform
themselves about and observe any applicable requirements.

Enquiries:

Millfield Group plc                                    020 8604 2607
Paul Tebbutt. Chief Executive


Collins Stewart                                        020 7523 8350
Stephen Keys


Redleaf Communications                                 020 7955 1410
Emma Kane


Inter-Alliance Group PLC                               01285 886702
Keith Carby, Chairman & Chief Executive


Ernst &Young LLP                                       020 7951 2000
John Stephan



The availability of the Merger Offer to persons not resident in the United
Kingdom may be affected by the laws of the relevant jurisdiction.  Persons who
are not resident in the United Kingdom should obtain advice and observe any
applicable requirements.  The Merger Offer will not be made, directly or
indirectly, in or into, or by use of the mails, or by any other means or
instrumentality (including, without limitation, facsimile transmission,
electronic mail, telex or telephone) of interstate or foreign commerce, or of
any facility of a national securities exchange, of the United States, Canada,
Australia or Japan, and the Merger Offer will not be capable of acceptance by
any such means, instrumentality or facility or from within the United States,
Canada, Australia or Japan.  Accordingly, copies of this announcement and any
other documents related to the Merger Offer are not being, and must not be,
mailed or otherwise distributed or sent in or into the United States, Canada,
Australia or Japan and persons receiving such documents (including custodians,
nominees and trustees) must not distribute or send them in, into or from such
jurisdictions.

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

Collins Stewart Limited, which is authorised by the Financial Services
Authority, is acting exclusively for Millfield and no-one else in connection
with the Merger Offer and will not be responsible to anyone other than Millfield
for providing the protections afforded to customers of Millfield nor for giving
advice in relation to the Merger Offer.

Ernst & Young LLP, which is authorised by the Financial Services Authority, is
acting exclusively for Inter-Alliance and no-one else in connection with the
Merger Offer and will not be responsible to anyone other than Inter-Alliance for
providing the protections afforded to clients of Ernst & Young LLP nor for
giving advice in relation to the Merger Offer.

This announcement has been approved by Collins Stewart Limited solely for the
purposes of section 21 of the Financial Services and Markets Act 2000.

APPENDIX I

Conditions and certain further terms of the Merger Offer

The Merger Offer, which will be made by Collins Stewart on behalf of Millfield,
will comply with the rules and regulations of the London Stock Exchange and the
Code, will be governed by English law and will be subject to the terms and
conditions to be set out in the Merger Offer Document and related Form of
Acceptance.

Part A: Conditions of the Merger Offer

The Merger Offer will be subject to the following conditions:

1.   valid acceptances being received (and not, where permitted, withdrawn) by
no later than 3.00 p.m. on 27 August 2004 (the First Closing Date) or such later
time(s) and/or date(s) as Millfield may (subject to the provisions of the Code
or with the consent of the Panel) decide, in respect of not less than 90 per
cent. (or such lesser percentage as Millfield may decide) of the ordinary shares
to which the Merger Offer relates (within the meaning of sections 428 to 430f of
the Companies Act 1985), provided that this condition will not be satisfied
unless Millfield shall have acquired or agreed to acquire (whether pursuant to
the merger offer or otherwise) Inter-Alliance Shares carrying, in aggregate,
more than 50 per cent. of the voting rights then normally exercisable at general
meetings of Inter-Alliance including for this purpose, to the extent (if any)
required by the Panel and/or the Code, any such voting rights attaching to any
Inter-Alliance Shares that are unconditionally allotted or issued before the
Merger Offer becomes or is declared unconditional as to acceptances, whether
pursuant to the exercise of any outstanding conversion or subscription rights or
otherwise); and, for this purpose, Inter-Alliance Shares which have been
unconditionally allotted shall be deemed to carry the voting rights which they
will carry on issue;

2.   the passing at the Extraordinary General Meeting of Millfield (or at any
adjournment thereof) of such ordinary resolution (s) as may be required:

(a)   for the approval and implementation of the Merger Offer and the
acquisition of any Inter-Alliance Shares;

(b)   for the allotment and issue of New Millfield Shares pursuant to the Merger
Offer;

3.   the London Stock Exchange admitting  the New Millfield Shares (or, with the
consent of the Panel, agreeing to admit the New Millfield Shares) to be issued
pursuant to the Merger Offer to trading on AIM and such admission becoming
effective in accordance with the AIM Rules or (if Millfield so determines and
subject to the consent of the Panel) the London Stock Exchange agreeing or
confirming its decision to admit the new Millfield Shares to trading on AIM
subject only to allotment of such shares;

4.   the FSA having notified Millfield in terms reasonably satisfactory to
Millfield that it does not object to any person who will, as a result of the
implementation of the Merger Offer become a controller of Inter-Alliance for the
purposes of the FSMA or the period allowed under that act for the FSA to notify
any objection to any such person becoming a controller having expired without
notification of any such objection;

5.    it being established to the reasonable satisfaction of Millfield, that
neither the proposed acquisition of Inter-Alliance by Millfield, nor any matters
arising from or related to it, will be referred to the UK Competition
Commission;

6.    no government or governmental, quasi-governmental, supranational,
statutory or regulatory body, court, trade agency, association, institution or
professional body or any other person or body in any jurisdiction ("Authority"
or together "Authorities") having instituted, implemented or threatened any
action, proceedings, suit, enquiry or investigation or made, proposed or enacted
any statute, regulation or order that would:

(a)   make the Merger Offer, its implementation or the acquisition or proposed
acquisition by Millfield of Inter-Alliance Shares or control of Inter-Alliance
and/or its subsidiary undertakings illegal, void or unenforceable or otherwise
restrain, prohibit, restrict or interfere in or materially delay implementation
of, or impose additional conditions or obligations with respect to, or otherwise
challenge the proposed acquisition of Inter-Alliance or any Inter-Alliance
Shares by Millfield;

(b)    require or prevent the divestiture by Millfield or any of its
subsidiaries (the "Millfield Group") or any associated company (together the
"Wider Millfield Group") or by Inter-Alliance or any of its subsidiaries (the
"Inter-Alliance Group") or any associated company (together the "Wider Inter-
Alliance Group") of all or any material part of their businesses, assets or
property or impose any limitation on the ability of any of them to conduct all
or any material portion of their respective businesses or own all or any
material portion of their respective assets or property;

(c)    impose any limitation on the ability of any member of the Millfield Group
to acquire or hold or effectively to exercise all or any rights of ownership of
Inter-Alliance Shares or on the ability of any member of the Inter-Alliance
Group or of the Millfield Group to hold or effectively to exercise all or any
rights of ownership of shares in any member of the Wider Inter-Alliance Group or
to exercise management control over any such member of the Wider Inter-Alliance
Group to an extent which is material in the context of the Wider Millfield
Group;

(d)     require any member of the Wider Millfield Group or any member of the
Wider Inter-Alliance Group to offer to acquire any shares in any member of the
Wider Inter-Alliance Group owned by a third party; or

(e)     otherwise adversely affect the business, profits or prospects of any
member of the Wider Inter-Alliance Group or of the Wider Millfield Group, to an
extent which is material in the context respectively of the Wider Inter-Alliance
Group or the Wider Millfield Group, as the case may be, taken as a whole,

and all applicable waiting periods during which any such Authority could decide
to take, institute, implement or threaten any such action, proceedings, suit,
enquiry or investigation having expired or been terminated.

7.     all necessary filings having been made, all appropriate waiting periods
under any applicable legislation or regulation of any territory having expired
or been terminated, all necessary statutory and regulatory obligations in
connection with the Merger Offer in any jurisdiction having been complied with
and all authorisations, orders, grants, recognitions, confirmations, clearances,
consents, licences, permissions and approvals necessary for or appropriate to
the Merger Offer and the proposed acquisition of any shares in, or control of,
Inter-Alliance by Millfield in any jurisdiction (and the absence of which would
or might have a material adverse effect on the Wider Inter-Alliance Group or the
Wider Millfield Group) being obtained in terms and in form reasonably
satisfactory to Millfield from all appropriate Authorities or persons with whom
any member of the Wider Inter-Alliance Group has entered into contractual
arrangements, and such authorisations, orders, grants, recognitions,
confirmations, clearances, consents, licences, permissions and approvals
remaining in full force and effect at the time at which the Merger Offer becomes
otherwise unconditional in all respects and no notice or indication of an
intention to revoke or not to renew these having been received;

8.    save as disclosed in the  announcement by Inter-Alliance issued on 5 May
2004 of its preliminary results for the period ended 31 December 2003, the
announcement of 30 June 2004, in the Admission Document or in the announcement
of the Merger Offer issued on 6 August 2004 (any information so disclosed being
referred to in these conditions as "disclosed") there being no provision of any
arrangement, agreement, licence or other instrument to which any member of the
Wider Inter-Alliance Group is a party, or by or to which any such member or any
of their respective assets may be bound or be subject, which could, in
consequence of the proposed acquisition of any of the Inter-Alliance Shares by
Millfield or for any other reason directly connected with the implementation of
the Merger Offer, result in:

(a)    any moneys borrowed by or other indebtedness of any such member being or
becoming repayable or capable of being declared repayable prior to their stated
maturity or the ability of any such member to incur any indebtedness being
withdrawn or inhibited;

(b)    any such arrangement, agreement, licence or other instrument being
terminated or adversely modified or any adverse action being taken or any
onerous obligation arising under it;

(c)    the interests or business of any such member in or with any other firm,
venture, company, body or asset (or any arrangements relating to such business
or interests) being terminated, modified or affected;

(d)    any such member ceasing to be able to carry on business under any name
under which it presently does so;

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

(f)    the disposal of assets or creation of liabilities by any such member
(other than in the ordinary course of business);

9.     other than as disclosed, no member of the Wider Inter-Alliance Group
having, since 31 December 2003:

(a)    issued or authorised or proposed the issue of additional shares of any
class or securities convertible into, or rights, warrants or options to
subscribe for or acquire, any such shares or other securities or redeemed,
purchased or reduced any part of its share capital, save for the issue of shares
or securities by any member of the Inter-Alliance Group which is a wholly owned
subsidiary of Inter-Alliance or to another wholly owned subsidiary member of the
Inter-Alliance Group;

(b)    declared, paid or made or proposed to declare, pay or make any dividend,
bonus or other distribution (whether payable in cash or otherwise) in respect of
any shares in Inter-Alliance;

(c)    authorised, proposed or made any announcement of an intention to propose
a merger or demerger or acquisition or change in its share or loan capital;

(d)    issued or proposed the issue of any debentures;

(e)    (otherwise than in the ordinary course of business) incurred or increased
any indebtedness or contingent liability which is material in the context of the
Inter-Alliance Group taken as a whole;

(f)     entered into any contract, arrangement, reconstruction or amalgamation
which is material in the context of the Inter-Alliance Group;

(g)    proposed any voluntary winding up;

(h)    disposed or transferred (otherwise than in the ordinary course of its
business) or mortgaged or encumbered any assets or any right, title or interest
in any asset;

(i)    entered into or made an offer to enter into any contract or commitment
(whether in respect of any capital expenditure or otherwise) either: (A) which
is of a long term or unusual nature; or (B) which involves or could involve an
obligation of a nature or magnitude which is material in the context of the
business or financial position of the Inter-Alliance Group as a whole;

(j)    entered into or varied any service or consultancy agreement with or in
respect of the services of any of the directors of Inter-Alliance; or

(k)    entered into any agreement or commitment or passed any resolution with
respect to any transaction or event referred to in this paragraph (other than
those specifically excluded);

10.    Other than as disclosed:

(a)    there having been no adverse change, and no contingent liability having
arisen which would result in any adverse change, in the business, financial or
trading position or profits or prospects of any member of the Wider Inter-
Alliance Group which would be material in the context of the Inter-Alliance
Group taken as a whole;

(b)    no material litigation, arbitration proceedings, prosecution or other
legal proceedings having been instituted or threatened or remaining outstanding
against or by any member of the Wider Inter-Alliance Group (whether as plaintiff
or defendant or otherwise) which in any such case is or may be material in the
context of the Inter-Alliance Group taken as a whole;

(c)    there having been no receiver, administrative receiver or other
encumbrancer appointed over any of the assets of any member of the Wider Inter-
Alliance Group or any analogous proceedings or steps taking place in any
jurisdiction and there having been no petition presented for the administration
of any member of the Wider Inter-Alliance Group or any analogous proceedings or
steps taking place in any jurisdiction;

11.      Millfield not having discovered:

(a)      that the financial or business information concerning any member of the
Wider Inter-Alliance Group as contained in the information publicly disclosed at
any time or otherwise made available to Millfield by any member of the Wider
Inter-Alliance Group either contains a misrepresentation of fact or omits to
state a fact necessary to make the information contained in it not misleading
(being a misrepresentation or omission which is misleading to an extent which is
material in the context of the Inter-Alliance Group taken as a whole), and not
becoming aware after the date on which the Merger Offer is made of any
information which affects (to an extent which is adverse and material in the
context of the Inter-Alliance Group as a whole) the import of any information so
disclosed at any time by any member of the Wider Inter-Alliance Group;

(b)     that any member of the Wider Inter-Alliance Group which is not a
subsidiary undertaking of Inter-Alliance is subject to any liability, contingent
or otherwise, which is not either taken into account in and reasonably apparent
from the accounts of the Inter-Alliance Group for the year ended 31 December
2003 or disclosed.

Millfield reserves the right to waive, in whole or in part, all or any of
conditions 5 to 11 (inclusive).  The Merger Offer will lapse unless conditions 2
to 11 (inclusive) are satisfied or waived on or before, the 21st day after the
later of the first closing date of the Merger Offer and the date on which
condition 1 is fulfilled (or such later date as Millfield with the consent of
the Panel may decide) provided that Millfield shall be under no obligation to
waive or treat as fulfilled any of conditions 5 to 11 (inclusive) by a date
earlier than the latest date specified above for its satisfaction
notwithstanding that the other conditions of the Merger Offer may at such
earlier date have been fulfilled or waived and that there are at such earlier
date no circumstances indicating that any of such conditions may not be capable
of fulfilment.

If Millfield is required by the Panel to make an offer or offers for
Inter-Alliance Shares under the provisions of Rule 9 of the Code, Millfield may
make such alterations to the conditions as are necessary to comply with the
provisions of that Rule;

Unless the Panel agrees otherwise, the Merger Offer will lapse if, before 3.00
p.m. on the First Closing Date or the date when the Merger Offer becomes or is
declared unconditional as to acceptances, whichever is the later, the
acquisition by Millfield of Inter-Alliance is referred to the Competition
Commission;

If the Merger Offer lapses the Merger Offer will cease to be capable of further
acceptances and persons accepting the Merger Offer and Millfield will cease to
be bound by acceptances delivered on or before the date on which the Merger
Offer so lapses.

Part B: Certain Further Terms of the Merger Offer

The Merger Offer will not be made, directly or indirectly, in or into, or by use
of the mails, or by any other means or instrumentality (including, without
limitation, facsimile transmission, electronic mail, telex or telephone) of
interstate or foreign commerce, or of any facility of a national securities
exchange, of the United States, Canada, Australia, the Republic of Ireland or
Japan, and the Merger Offer will not be capable of acceptance by any such means,
instrumentality or facility or from or within the United States, Canada,
Australia, the Republic of Ireland or Japan.  Accordingly, copies of this
announcement and any other documents related to the Merger Offer are not being,
and must not be, mailed or otherwise distributed or sent in or into the United
States, Canada, Australia, the Republic of Ireland or Japan and persons
receiving such documents (including custodians, nominees and trustees) must not
distribute or send them in, into or from such jurisdictions.

The Inter-Alliance Shares to be acquired pursuant to the Merger Offer will be
acquired by Millfield fully paid, free from all liens, charges, equitable
interests and encumbrances and other third party interests together with all
rights attaching thereto on or after the date of this announcement, including
the right to receive and retain all dividends and other distributions (if any)
declared, made or paid hereafter.  The Merger Offer will extend to any
Inter-Alliance Shares which are unconditionally allotted or issued whilst the
Merger Offer remains open for acceptance (or by such earlier date as Millfield
may, subject to the Code, determine such earlier date, not (without the consent
of the Panel) being earlier than the date on which the Merger Offer becomes
unconditional as to acceptances or, if later, the First Closing Date) as a
result of the exercise of options granted under the Inter-Alliance Share Schemes
or otherwise.

APPENDIX II



Bases and Sources

1.       General

Unless otherwise stated:

(a)          financial information relating to Millfield has been extracted from
its report and audited accounts for the 12 months ended 31 March 2004; and

(b)          financial information relating to Inter-Alliance has been extracted
from its report and audited accounts for the year ended 31 December 2003.

2.       Share prices

The market price of a Inter-Alliance Share is based on the closing middle market
prices of:

(a)          0.575 pence per Inter-Alliance Share obtained from the Daily
Official List on 5 August 2004 (the last dealing day prior to the date of this
announcement); and

(b)          0.6 pence per Inter-Alliance Share obtained from the Daily Official
List on 4 June 2004 (the last dealing day prior to the announcement that the
boards of Millfield and Inter-Alliance were in discussions that might or might
not lead to a merger of the two companies).

3.       Value of the Merger Offer

References to the value of the Merger Offer for the entire issued ordinary share
capital of Inter-Alliance are based on 907,895,248 Inter-Alliance Shares
currently in issue.



APPENDIX III



Financial Effects of Acceptance of the Offer

The following paragraphs set out, for illustrative purposes only, and on the
bases and assumptions set out in the notes below, the financial effects of
acceptance of the Merger Offer on capital value for an accepting holder of 236
Inter-Alliance Shares if the Merger Offer becomes or is declared wholly
unconditional in all respects.

A.     Capital Value
                                                       Notes          Pence
Market value of 5 Millfield Shares                     (i)            295.0
Less: market value of 236 Inter-Alliance Shares       (ii)            141.6
Increase in capital value                                             153.4
This represents an effective increase of                              108%



B.      Income Value

No dividend was declared on the Inter-Alliance Shares for the year ended 31
December 2003.

No dividend was declared on the Millfield Shares for the year ended 31 March
2004.

Accepting Inter-Alliance Shareholders will be entitled to participate in any
dividends declared on the New Millfield Shares made or paid after the date of
this announcement.

Notes:

(i)     The value of a Millfield Share is based on the closing middle market
price for a Millfield Share of 59 pence on 5 August 2004 (the last business day
prior to the date of this announcement), as derived from the Daily Official
List.

(ii)    The value of an Inter-Alliance Shares is based on the closing middle
market price for an Inter-Alliance Share of 0.6 pence on 4 June 2004 (the day
before the announcement that Inter-Alliance and Millfield were in discussions
which might or might not lead to a merger of the companies), as derived from the
Daily Official List.

(iii)      No account has been taken of any potential liability to taxation.



APPENDIX IV

Definitions


"Act"                          the Companies Act 1985 (as amended)
"Admission"                    the proposed admission of new and existing Millfield Shares to trading on
                               AIM
"Admission Document"           the Admission Document dated 6 August 2004 published by Millfield relating
                               to the New Group and the New Millfield Shares
"AIM"                          the market of that name operated by the London Stock Exchange
"AIM Rules"                    The rules published by the London Stock Exchange governing admission to and
                               the operation of AIM as in force at the date of this document or, where the
                               context requires, as amended or modified after the date of this document.
"Australia"                    the Commonwealth of Australia, its states, territories and possessions
"Board of Millfield" or "      the board of directors of Millfield
Millfield Board"
"Board of Inter-Alliance" or " the board of directors of Inter-Alliance
Inter-Alliance Board"
"business day"                 a day, not being a Saturday or Sunday, on which banks in the City of London
                               are open for business
"Canada"                       Canada, its provinces and territories
"Code"                         the City Code on Takeovers and Mergers
"Collins Stewart"              Collins Stewart Limited
"Daily Official List"          the Daily Official List of the London Stock Exchange
"Extraordinary General         The Extraordinary General Meeting of Millfield convened for 10.00 a.m. on 23
Meeting" or "EGM"              August 2004 to vote on the Resolution required in connection with the
                               Merger, notice of which is set out in the Admission Document
"First Closing Date"           the first closing date of the Merger Offer
"Form of Acceptance"           the form of acceptance and authority relating to the Merger Offer (to be
                               despatched to Inter-Alliance Shareholders with the Merger Offer Document)
"Japan"                        Japan, its cities and prefectures, territories and possessions
"London Stock Exchange"        London Stock Exchange plc
"Merger"                       the merger of Inter-Alliance and Millfield by way of the Merger Offer
"Merger Offer"                 the recommended all Share offer to be made by Collins Stewart on behalf of
                               Millfield to acquire all of the Inter-Alliance Shares on the terms and
                               subject to the conditions to be set out in the Offer Document and the Form
                               of Acceptance and including, where the context so permits, any subsequent
                               revision, variation, extension or renewal of such offer
"Millfield"                    Millfield Group plc
"Millfield Group"              Millfield, its subsidiaries and subsidiary undertakings
"Millfield Shares"             ordinary shares of  0.175p each in the capital of Millfield
"Millfield Shareholders"       holders of Millfield Shares
"New Group"                    Millfield or the Millfield Group (as the context requires) as enlarged by
                               the Merger
"Offer Document"               the document to be sent to Inter-Alliance Shareholders (and for information
                               only) to Millfield Shareholders and to the holders of options under the
                               Inter-Alliance Share Option Schemes setting out the terms and conditions of
                               the Merger Offer
"Official List"                the Official List of the UK Listing Authority
"Panel"                        The UK Panel on Takeovers and Mergers
"Proposed Directors"           Keith Carby, Michael Burne and Tom Morton Being those directors of
                               Inter-Alliance who have agreed to join the Board of the New Group upon the
                               Merger Offer becoming or being declared unconditional in all respects
"Resolution"                   the resolution set out in the notice of EGM contained in the Admission
                               Document
"Inter-Alliance"               Inter-Alliance Group PLC
"Inter-Alliance Group"         Inter-Alliance, its subsidiaries and subsidiary undertakings
"Inter-Alliance Shares"        the existing unconditionally allotted or issued and fully paid ordinary
                               shares of 1 pence each in the capital of Inter-Alliance and any further
                               ordinary shares which are unconditionally allotted or issued prior to the
                               date on which the Merger Offer closes (or such earlier date or dates as
                               Millfield may, subject to the Code, determine) including any such shares
                               allotted or issued pursuant to the exercise of options granted under the
                               Inter-Alliance Share Schemes
"Inter-Alliance Shareholders"  holders of Inter-Alliance Shares
"Inter-Alliance Share Option   the Inter-Alliance 1997 Company Share Option Plan, the Inter-Alliance 1997
Schemes"                       Unapproved Share Option Scheme, the Inter-Alliance 1998 Savings Related
                               Share Option Scheme and the Inter-Alliance 2003 Discretionary Share Option
                               Scheme
"UK" or "United Kingdom"       the United Kingdom of Great Britain and Northern Ireland




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