Offer for Prop. Inc. & Growth

RNS Number:6187J
Property Income & Growth Fund Ld
03 April 2003


For Immediate Release

Property Income & Growth Fund Limited and BC Property Securities Limited

Offer for Property Income & Growth Fund Limited

3 April 2003

PART I - SUMMARY

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

                            
                            RECOMMENDED CASH OFFER
                                      BY
                         TEATHER & GREENWOOD LIMITED 
                                 ON BEHALF OF
                              LAND RACE LIMITED
                         FOR THE ORDINARY SHARES OF
                    PROPERTY INCOME & GROWTH FUND LIMITED
 

The boards of Land Race Limited ("Land Race") and of Property Income & Growth
Fund Limited ("Property Income & Growth") today announce that they have reached
agreement on the terms of a recommended cash offer of 16.5 pence per Ordinary
Share of Property Income & Growth to be made by Teather & Greenwood on behalf of
Land Race, for all of the Ordinary Shares of Property Income & Growth. In
addition, a special dividend of 0.5 pence per Ordinary Share will be paid to all
Ordinary Shareholders on the register on the date the Offer is declared wholly
unconditional.

Land Race is a company established in Guernsey specifically for the purpose of
making the Offer and is wholly owned by David Bruce. The directors of Land Race
are David Bruce, the chief executive and majority shareholder of BC Asset
Management Limited (the investment manager of Property Income & Growth) together
with William Scott and Ben Morgan who are both residents of Guernsey.

No offer is being made for the ZDP Shares issued by BC Property Securities
Limited, a subsidiary of Property Income & Growth, whose capital entitlements
will remain unchanged. However, Land Race has, conditional on the Offer becoming
wholly unconditional, entered into certain undertakings and arrangements for the
benefit of ZDP Shareholders which are described further below and in the Offer
Document.

Summary of the Offer

*  The Offer is 16.5 pence in cash for each Ordinary Share.


*  In addition, the Directors of Property Income & Growth have today declared a
special dividend of 0.5 pence per Ordinary Share, referred to above, conditional
upon the Offer being declared wholly unconditional within 60 days, payable to
Ordinary Shareholders on the register on the date the Offer is declared wholly
unconditional, within 14 days thereafter.


*  Ordinary Shareholders will also receive the ninth interim dividend of 0.375p
per Ordinary Share which was declared on 18 March 2003 and is payable on 8 April
2003. In the meantime, the Board will suspend the declaration of further monthly
dividends.



*  The Offer values the issued ordinary share capital of Property Income &
Growth at approximately #14.4 million (excluding the Special Dividend).



*  The Offer price (excluding the Special Dividend) represents a premium of 6.45
per cent. to the closing bid price of 15.5p according to Bloomberg on 1 April
2003, (the most latest practicable date prior to the printing of the Offer
Document) and a discount of 5.71 per cent. to the closing mid market price of
17.5p as derived from the Daily Official List of the London Stock Exchange on 1
April 2003.



*  The Offer price (excluding the Special Dividend) also represents a premium of
11.71 per cent. to the net asset value per Ordinary Share as at 25 March 2003
(the latest published net asset value excluding 2.12p of unamortised placing
expenses) of 14.77p (valuing the Income Portfolio on a bid-price basis) or a
premium of 3.97 per cent. to the net asset value per Ordinary Share of 15.87p
per Ordinary Share (valuing the Income Portfolio on a mid-price basis).



*  The Board of Property Income & Growth, which has been so advised by Hoare
Govett, considers that the Offer is in the best interests of Ordinary
Shareholders and unanimously recommends that Ordinary Shareholders should accept
the Offer.  The Board has also considered the consequences of the Offer being
declared wholly unconditional and the undertakings from Land Race and is also
satisfied that, by recommending the Offer together with the proposals to be put
to ZDP Shareholders, it is having due regard to the interests of the ZDP
Shareholders. In giving its advice, Hoare Govett has taken into account the
Directors' commercial assessment.



The Offer Document and the circular to ZDP Shareholders are being despatched
today.



Dividends referred to in this announcement are not intended to be, nor should
they be taken as, a forecast of profits.



Enquiries:



Land Race Limited

David Bruce      01202 305 900



Teather & Greenwood (Financial Adviser to Land Race)

Jonathan Becher  020 7426 9000

Paul Fincham      020 7426 9000



Hoare Govett (Financial Adviser to Property Income & Growth)

Bob Cowdell       020 7678 8000

Hugh Field        020 7678 8000





Teather & Greenwood Limited, a company authorised and regulated by the Financial
Services Authority, is acting exclusively for Land Race Limited and no-one else
in connection with the Offer and will not be responsible to anyone other than
Land Race Limited for providing the protections afforded to clients of Teather &
Greenwood Limited nor for giving advice in relation to the Offer or any other
matter referred to herein.



Hoare Govett Limited, a company authorised and regulated by the Financial
Services Authority, is acting exclusively for Property Income & Growth Fund
Limited and no-one else in connection with the Offer and will not be responsible
to anyone other than Property Income & Growth Fund Limited for providing the
protections afforded to clients of Hoare Govett Limited nor for giving advice in
relation to the Offer or any other matter referred to herein.



The availability of the Offer to Property Income & Growth Shareholders who are
not resident in the United Kingdom may be affected by the laws of the relevant
jurisdiction. Ordinary Shareholders who are not resident in the United Kingdom
should inform themselves about and observe any applicable requirements.



The Offer is not being made, directly or indirectly, in or into the United
States, or by use of the mail, or by any means or instrumentality (including,
without limitation, facsimile or other electronic transmission, telex or
telephone) of interstate or foreign commerce of, or any facility of a national
securities exchange of, the United States nor is it being made directly or
indirectly in or into Canada, Australia or Japan and the Offer cannot be
accepted by any such use, means, instrumentality or facility or from or within
the United States, Canada, Australia or Japan subject to certain exceptions.
Accordingly, copies of the Form of Acceptance are not being and must not be
mailed or otherwise forwarded, distributed or sent in, into or from the United
States, Canada, Australia or Japan.





Teather & Greenwood Limited, of Beaufort House, 15 St Botolph Street, London
EC3A 7QR has approved the contents of this announcement solely for the purposes
of Section 21 of the Financial Services and Markets Act 2000.





This summary should be read in conjunction with the full text of this
announcement and the Offer Document. Appendix 3 contains definitions of certain
expressions used in this announcement.




PART II



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


                            RECOMMENDED CASH OFFER
                                      BY
                         TEATHER & GREENWOOD LIMITED 
                                 ON BEHALF OF
                              LAND RACE LIMITED
                         FOR THE ORDINARY SHARES OF
                    PROPERTY INCOME & GROWTH FUND LIMITED


INTRODUCTION



The boards of Land Race and Property Income & Growth today announce that they
have agreed on the terms of a recommended Offer, to be made by Teather &
Greenwood on behalf of Land Race, for all of Property Income & Growth's Ordinary
Shares at 16.5p per Ordinary Share plus the Special Dividend referred to below.



Land Race is a company established in Guernsey specifically for the purpose of
making the Offer and is wholly owned by David Bruce.  The directors of Land Race
are David Bruce, the chief executive and majority shareholder of BC Asset
Management Limited (the investment manager of Property Income & Growth) together
with William Scott and Ben Morgan, who are both residents of Guernsey.



No offer is being made for the ZDP Shares issued by BC Property Securities
Limited, a subsidiary of Property Income & Growth, whose capital entitlements,
will remain unchanged. However, Land Race has, conditional upon the Offer
becoming wholly unconditional, entered into certain undertakings and
arrangements for the benefit of ZDP Shareholders as described further below.



THE OFFER



The Offer, which is being made on the terms and subject to the conditions set
out in the Offer Document and in the Form of Acceptance, is to acquire all of
the issued Ordinary Shares on the following basis:



for each Ordinary Share       16.5p in cash

plus the special dividend of 0.5p per Ordinary Share*



* This is not intended to be, nor should it be taken as, a forecast of profits.



Further details of the Special Dividend are set out under "Dividends" below.



The Offer values the Ordinary Shares, in aggregate, at approximately #14.4
million (excluding the Special Dividend). The Offer price represents a premium
of 6.45 per cent. to the closing bid price of 15.5p according to Bloomberg on 1
April 2003, (the latest practicable date prior to the printing of the Offer
Document), a discount of 5.71 per cent. to the closing mid-market price of 17.5p
as derived from the Daily Official List of the London Stock Exchange on 1 April
2003.



Without taking into account the Special Dividend, the Offer price also
represents a premium of approximately 11.71 per cent. to the net asset value per
Ordinary Share as at 25 March 2003 (the latest published net asset value prior
to the printing of the Offer Document excluding unamortised placing expenses) of
14.77p (valuing the Income Portfolio on a bid-price basis) or a premium of 3.97
per cent. to the net asset value of 15.87p per Ordinary Share (valuing the
Income Portfolio on a mid-price basis).



The Ordinary Shares will be acquired by Land Race pursuant to the Offer fully
paid and free from all liens, charges, equities, encumbrances, rights of
pre-emption and other third party rights and interests of any nature whatsoever
and together with all rights now or hereafter attaching to them, including,
without limitation, the right to receive and retain in full all dividends and
other distributions (if any) declared, announced, made or paid prior to the
Offer being declared wholly unconditional other than the ninth interim dividend
of 0.375p per share payable on 8 April 2003 and the Special Dividend described
below.



The Offer is conditional, inter alia, upon valid acceptances being received no
later than 3.00 p.m. on 24 April 2003 (or such later time(s) and/or date(s) as
Land Race may decide) in respect of not less than 75 per cent. (or such lesser
percentage as Land Race with the consent of RBS may decide) of the Ordinary
Shares to which the Offer relates, provided that the condition shall not be
satisfied unless Land Race has by that date (or such later time(s) and/or date
(s) as Land Race may decide) acquired or agreed to acquire Ordinary Shares
carrying over 50 per cent. of the voting rights normally exercisable at a
general meeting of Property Income & Growth.



The Offer is also subject to the further terms and conditions set out in
Appendix I of the Offer Document, including the passing of the first special
resolution at the Extraordinary General Meeting which has been convened for
10.00am on 24 April 2003 to amend the Articles of Association of Property Income
& Growth.



DIVIDENDS



The Board has today declared a special dividend of 0.5p per Ordinary Share which
is conditional upon the Offer being declared wholly unconditional within 60
days. This special dividend will be paid to the holders of Ordinary Shares on
the register on the date the Offer is declared wholly unconditional, within 14
days of such declaration.



If the Offer does not become wholly unconditional and lapses or is withdrawn or
ceases to be recommended by the Board, the Special Dividend will not be paid and
the Board will review the future dividend policy in light of the circumstances
then prevailing.



Ordinary Shareholders will still receive the ninth interim dividend of 0.375p
per Ordinary Share which was declared on 18 March 2003 and is payable on 8 April
2003.



In the meantime, the Board will suspend the declaration of further monthly
dividends.



BACKGROUND TO PROPERTY INCOME & GROWTH SINCE LAUNCH



The Group was launched in May 2001 and issued further Ordinary Shares and ZDP
Shares in July 2001. The issued share capital currently comprises 87 million
Ordinary Shares and 29 million ZDP Shares together with #77.33 million of prior
ranking borrowings through the RBS Bank Facility.  Since launch, the Ordinary
Share net asset value has fallen from 95p to 15.87p (as at 25 March 2003,
excluding unamortised placing expenses of 2.12p per Ordinary Share). This fall
was primarily a result of the market falls and the significant difficulties
encountered by companies investing in split capital and high income investment
trusts and companies, which comprise the Income Portfolio. The Income Portfolio
has accumulated losses of #59.14 million as at 25 March 2003. However, these
losses are partially mitigated by gains in the value of the Property Portfolio
of #7.44 million, from the date of purchase (excluding purchase costs) to 25
March 2003.



Since launch, the ZDP Shares net asset value has risen from 100p to 117.10p (as
at 25 March 2003).



In the annual report to 31 May 2002, it was announced that the Board, after
careful consideration, had decided to reduce the monthly dividend from 0.75p to
0.375p per Ordinary Share following a significant reduction in the level of
income received from the Income Portfolio caused by dividend cuts or suspensions
from the investments in this portfolio. The purpose of this reduction was to
seek to preserve asset values and to protect Property Income & Growth's position
under its bank covenants. A monthly dividend of 0.375p per Ordinary Share has
been maintained since that date although dividend cuts and suspensions by
companies in the Income Portfolio have continued to reduce the level of income
received by the Company.



In addition, the Board also notes that on 25 March 2003 the Company breached a
financial covenant, contained in the RBS Facility Agreement regarding the ratio
of adjusted total assets to the amount drawndown under that facility. Under the
RBS Facility Agreement, this breach would enable RBS to require that the Company
take such action as may be necessary to ensure, within 6 months, that the breach
is remedied. Accordingly, if RBS enforce this right, the Directors may be
required to suspend any further dividend payments. However, RBS has waived this
breach and confirmed that they will not object to the payment of the ninth
interim dividend and, should the Offer be declared wholly unconditional, the
Special Dividend.



It is against this background that the Board has considered the terms of the
unsolicited Offer received from Land Race.



REASONS FOR THE DIRECTORS' UNANIMOUS RECOMMENDATION OF THE OFFER



On 11 December 2002, the Board announced that it had received an unsolicited
approach from BFS Managed Properties Limited and that this approach had been
rejected. No further approach has been received from BFS Managed Properties
Limited.



Since the approach was received from BFS Managed Properties Limited, the
Directors have been considering with their advisers the strategic options
available to the Group, given the current uncertainty in equity and property
markets generally and, in particular, the significant lack of liquidity
currently being experienced in the split capital and high income investment
trust sector.



The Directors have also considered with their advisers whether the liquidation
of the Group would be likely to offer greater value than the Offer, having due
regard to the interests of both the Ordinary and ZDP Shareholders. As part of
their review, the Directors have considered the potential costs of realising
both the Property Portfolio and Income Portfolio.



Without taking into account the Special Dividend, the Offer price of 16.5p
represents a premium of 11.71 per cent. to the net asset value per Ordinary
Share as at 25 March 2003 (the latest published net asset value prior to the
printing of the Offer Document) excluding 2.12p of unamortised placing expenses)
of 14.77p (valuing the Income Portfolio on a bid price basis) or a premium of
3.97 per cent. to the net asset value per Ordinary Share of 15.87p (valuing the
Income Portfolio on a mid-price basis).





The Directors, together with their advisers, have taken the following matters
into consideration when recommending the Offer:



*     the uncertain prospects for the Income Portfolio and the impact that may
have on the net asset value of Property Income & Growth;



*     the outlook for the Property Portfolio in light of the current difficult
economic environment;



*     the potential for a reduction in the level of revenue generated by the
Income Portfolio as a result of further dividend cuts and suspensions by these
investments;



*     the likelihood of a further reduction in the level of dividend payable to
Ordinary Shareholders; and



*     Land Race's commitments regarding the continued running of Property Income
& Growth and the protections to be afforded to ZDP Shareholders.*



* Please refer to the risk factors set out in Appendix V of the Offer Document.



The Board is also mindful that a number of Ordinary Shareholders are split
capital or high income trusts and companies which are either seeking to realise
assets in order to repay bank borrowings or to fund share buy-backs or are
either suspended or in liquidation and consequently are seeking to dispose of
all their assets. The Directors are also aware of the current lack of liquidity
in the split capital and high income share market which significantly reduces
the ability of such investors to realise assets.



Accordingly, the Directors have concluded that, whilst the Offer may not fully
recognise the long term value of the Ordinary Shares, given the significant
uncertainty regarding the outlook for both equity and property markets, it
provides certainty for Ordinary Shareholders and is in their best interests.
Consequently, the Directors unanimously recommend that Ordinary Shareholders
accept the Offer.



ZERO DIVIDEND PREFERENCE SHARES



The Board is also mindful of the responsibility it owes to ZDP Shareholders and
it has been advised that it must have due regard to the interests of ZDP
Shareholders at all times. Accordingly, the Board and its advisers have required
Land Race to provide certain protections for the ZDP Shareholders. These
protections are contained in the Commitment Agreement dated 3 April 2003 between
the Company, the ZDP Subsidiary, the Property Subsidiary and Land Race and can
be summarised as follows:



(i)   Under the Commitment Agreement, Land Race has undertaken that, should the
Offer be declared wholly unconditional, it will, subject to ZDP Shareholders
passing the first special resolution at the ZDP Class Meeting, make available at
least #4 million of cash to repurchase ZDP Shares for cancellation by way of a
tender offer to be conducted by Teather & Greenwood and pay the reasonable costs
thereof. The tender offer will be completed within 3 months of the Offer being
declared wholly unconditional. Land Race has advised the Board that they
currently anticipate that the maximum price to be paid under the tender offer,
subject to unforseen circumstances, will be in the region of 60p per ZDP Share
but will in any event be at least 55p per ZDP Share (being the mid market price
of a ZDP share on 1 April 2003). In addition, the Board of the ZDP Subsidiary
has agreed, subject as provided below, to institute a regular, ongoing,
programme of ZDP Share buy-backs and Land Race has undertaken to support this
process. In return, the board of the ZDP Subsidiary has undertaken to take into
account the prevailing price and availability of ZDP Shares in the market, the
relative attractions of other potential investments (including improvements to
investments in property) and the benefits of using surplus funds further to
reduce the level of bank debt.



This ongoing programme will be funded out of the surplus income generated by the
Group from its revenues less outgoings, including the debt repayment schedule to
the Bank. Such market purchases will only be made at a discount to the
prevailing net asset value per ZDP Share and consequently would increase both
the Initial Cover and Projected Final Cover of the remaining ZDP Shares.



Set out below is a table showing the Initial Cover and Projected Final Cover per
ZDP Share (i) as it currently stands and (ii) on the basis that (a) the Offer is
declared wholly unconditional, (b) the tender offer to buy back #4 million of
ZDP Shares at the relevant tender price is implemented, (c) the Company's
borrowings from RBS are amortised as referred below, and (d) that the on-going
share buy-backs are undertaken at a price which equates to a 15 per cent. per
annum redemption yield to the ZDP Repayment Date. (Based upon the market bid
price as at 1 April 2003 and assuming that the ZDP Shares are redeemed at their
final capital entitlement, the redemption yield would equate to 24.00 per cent.
per annum.)


                                Initial      Cover*            Projected *
                                                               Final Cover

Current position                              1.40                    0.83

Illustrative tender offer
price per ZDP Share

55p**                                         1.17                    1.18

60p                                           1.14                    1.13

70p                                           1.10                    1.07

80p                                           1.06                    1.03



*  assuming ZDP Shareholders approve the first special resolution at the ZDP
Class Meeting authorizing the buy-back, for cancellation, of ZDP Shares.



** mid-market price of a ZDP Share as at 1 April 2003 (the latest practicable
date prior to the printing of the Offer Document).



For the purposes of making the Offer, Land Race has entered into a #13.7 million
facility agreement with the Bank.  Under the terms of the existing RBS Facility
Agreement, a change of control of the Company is an event of default. If the
Offer becomes wholly unconditional this will constitute a change of control for
these purposes. Accordingly RBS has indicated to the Company that it will waive
such an event of default provided that, following the Offer, the Company enters
into a restatement of the RBS Facility Agreement. Under the restated Facility
Agreement the amount outstanding will be reduced from #77.33 million to #75
million and the margin will be increased from 0.975 per cent. to 1.1 per cent.
and the loan will be amortised on a quarterly basis based on the Land Race
Group's loan to property value ratio from time to time ("Group LTV Ratio").  If
the Group LTV Ratio is greater than 0.8, all surplus cash flows generated during
the previous quarter will be used to reduce the amount outstanding under the
Restated Facility. Subject to interest cover requirements, if the Group LTV
Ratio then is less than 0.8 but greater than 0.775, the amount outstanding will
be reduced by #250,000 and if the Group LTV Ratio is less than 0.775 the amount
outstanding will be reduced by #100,000. The first payment in respect of this
amortisation schedule will be made approximately six months after the date of
first drawdown of the Additional Facility.



Amounts due under the Additional Facility and the Restated Facility will rank in
priority to amounts due to the ZDP Shareholders. The effect of the Land Race
Group entering into these two agreements is to increase the level of prior
ranking debt from #77.33 million (as at 25 March 2003) to #88.7 million.



Notwithstanding this increase in prior ranking debt, the Directors believe that
the terms of the Restated Facility together with the attendant security
arrangements are satisfactory, taking into account, inter alia, the increase in
the Projected Final Cover set out in the table above.



(ii)  Under the Commitment Agreement, Land Race has also undertaken and agreed
that no dividends or capital payments or any other return of revenue or capital
may be paid to Land Race or its shareholders until all the ZDP Shares have
either been repurchased or redeemed. Accordingly, Land Race has also agreed that
should the Offer be declared wholly unconditional they will immediately procure
that the Articles of Association are amended, to provide that no dividends,
capital payments or any other return of capital may be paid to Land Race until
there are no ZDP Shares remaining in issue.



(iii) Property Income & Growth's existing investment objective is to provide
Ordinary Shareholders with a high level of income payable monthly together with
long term capital appreciation from direct investment in UK property, and ZDP
Shareholders with a pre-determined capital entitlement on the ZDP Repayment
Date.



If the Offer is declared wholly unconditional, the investment objective will be
amended to provide ZDP Shareholders with their pre-determined capital
entitlement on the ZDP Repayment Date and to provide Ordinary Shareholders with
a return, in the form of income and/or capital, only after all ZDP Shares have
been repurchased or redeemed. In addition, the Investment Policy of the Group
will be amended so that, given the volatility of the movements in prices
primarily in the Income Portfolio, not less than 75 per cent. of the Group's
assets will be invested in the Property Portfolio and the balance in the Income
Portfolio. The Income Portfolio will be managed to provide a total return. Under
the Commitment Agreement, Land Race has undertaken not to amend further the
investment objective or policy whilst any ZDP Shares remain in issue.



In addition, each of the Directors has indicated to Land Race that he intends to
accept an invitation received from Land Race to remain on the Boards of Property
Income & Growth and the ZDP Subsidiary if the Offer is declared wholly
unconditional.



Accordingly, the Board, which has been advised by Hoare Govett, has considered
the consequences of the Offer being declared wholly unconditional and the
undertakings from Land Race referred to above, and the Board is satisfied that,
by recommending the Offer together with the proposals to be put to ZDP
Shareholders, it is having due regard to the interests of the ZDP Shareholders.





AMENDMENTS TO THE ARTICLES OF ASSOCIATION



The Offer is conditional, inter alia, upon the passing of a special resolution
to be proposed at the Extraordinary General Meeting of Property Income & Growth,
which has been convened for 24 April 2003 amending its Articles of Association
to enable Land Race to acquire, compulsorily, all the remaining Ordinary Shares
in issue once acceptances have been received in respect of 75 per cent. of the
Ordinary Shares to which the Offer relates and the Offer is declared wholly
unconditional.



Land Race has advised the Board that, if the Offer is declared wholly
unconditional, Land Race will exercise the rights contained in the Articles of
Association, as amended by the resolution to be proposed at the Extraordinary
General Meeting, to compulsorily acquire, at the same price as the Offer, any
outstanding Ordinary Shares which have not accepted the Offer.



It is also proposed that the borrowing restriction, contained within the
Articles of Association and required at launch by the rules of the UK Listing
Authority, be amended to permit the ratio of the Group's borrowings to total
assets to be no more than 85 per cent. as compared to its existing level of 65
per cent. This amendment to the Articles of Association will provide flexibility
to facilitate ZDP Share buy-backs as implementation of such buy-backs would be
likely to cause the Group to breach the existing restriction. As the Board may
consider implementing a ZDP Share buy-back programme regardless of the outcome
of the Offer, the resolution is not conditional on the outcome of the Offer and
the Offer is not conditional upon this amendment being approved by Ordinary
Shareholders and ZDP Shareholders.



Under the Loan Note and Contribution Agreement entered into between Property
Income & Growth and the ZDP Subsidiary, the ZDP Shareholders are entitled to
vote on any change to the Articles relaxing the borrowing restrictions currently
in place. Accordingly, an extraordinary resolution is to be proposed at a
separate class meeting of the ZDP Shareholders for the purposes of approving the
amendment to the Articles of Association in relation to the borrowing limit
restrictions being amended but not in respect of the change to the Articles of
Association providing for the compulsory acquisition of the non-accepting
Ordinary Shareholders.





SUSPENSION OF NAV



As the Company is currently in an offer period, the City Code contains
restrictions on the financial information which the Company may publish without
such information being reported on by relevant advisers. As the Company is
predominantly invested in property, any further announcement of its net asset
value would require a formal property valuation report to be prepared.
Accordingly, for the time being, the Board has decided to suspend the
publication of a formal monthly net asset value. This will result in a cost
saving to the Group.





INFORMATION ON LAND RACE



Land Race is a company recently formed for the purpose of making the Offer and
is wholly owned by David Bruce, the chief executive and majority shareholder of
the Investment Manager. At the date of this announcement, Land Race's only asset
is cash and its intention, if the Offer is declared or becomes unconditional in
all respects, is to act as the holding company of the Group. All of the
directors of Land Race were appointed at the date of incorporation.



The Investment Manager manages on a discretionary basis the investments of,
inter alia, Yeoman Investment Trust plc and US Growth & Income Fund Limited
which hold 5,500,000 Ordinary Shares and 2,860,000 Ordinary Shares respectively.
In addition, BC Income & Growth Fund Limited which was managed by the Investment
Manager on a discretionary basis until 13 August 2002 when it was put into
liquidation, owns 1,500,000 Ordinary Shares.



The Investment Manager has undertaken not to exercise those discretionary powers
(either to accept the Offer or to vote at the relevant general meetings). No
irrevocable undertakings or letters of intention have been sought from the
respective clients of the Investment Manager or any other Ordinary Shareholders.





LAND RACE FINANCING ARRANGEMENTS



Full acceptance of the Offer would result in a maximum cash consideration of
approximately #14.4 million being payable by Land Race to Ordinary Shareholders.
The cash consideration and working capital of Land Race is to be funded from
bank facilities provided by RBS of #13.7 million, an issue of unsecured loan
notes to the Investment Manager of #1.4 million and an equity subscription from
David Bruce of #100,000. The financing from RBS is conditional, inter alia, on
Land Race having acquired or agreed to acquire, whether pursuant to the Offer or
otherwise, not less than 75 per cent. (or such lesser percentage as Land Race
with the consent of RBS may decide) of the Ordinary Shares to which the Offer
relates.



Teather & Greenwood is satisfied that sufficient financial resources are
available to Land Race to satisfy acceptance of the Offer in full.



Under the RBS Bank Facility, a change of control of Property Income & Growth is
an event of default. RBS has agreed to waive this event of default, provided
Property Income & Growth enters into the Restated Facility Agreement once the
Offer has become wholly unconditional. These revised terms will include, inter
alia, a schedule of regular quarterly reductions in the amount of the loan
outstanding. The amount of each quarterly repayment will be determined according
to formulae contained within the Restated Facility Agreement.



In addition the Restated Facility provides for additional loan repayments to the
extent that there is surplus cash which has not been utilised by the payment of
ongoing management fees, bank interest and running costs and which has not been
applied to the on-going ZDP Share buy-back programme.





FUTURE MANAGEMENT AND STRUCTURE OF THE PROPERTY INCOME AND GROWTH GROUP



Following implementation of the Offer, Property Income & Growth will become a
subsidiary of Land Race. Land Race will become the new holding company for
Property Income & Growth whose principal subsidiaries comprise the ZDP
Subsidiary, which issued the ZDP Shares, and the Property Subsidiary which is
the property investment holding company of the Group.



The Property Subsidiary acts as the property investment holding company and
currently holds the Group's investment properties which, as at 25 March 2003,
were independently valued at #109.66 million. These provide security for the
existing term loan facility with RBS which currently amounts to #77.33 million.
Shortly after the Offer being declared wholly unconditional, the Additional
Facility will also be secured against these properties. Land Race has undertaken
that the level of Land Race Group gearing on drawdown of the Additional Facility
(taking account of the Restated Facility) will not exceed 85 per cent. of the
value of the  Group's properties.



The ZDP Subsidiary has in issue 29 million ZDP Shares with an initial capital
entitlement on issue of 100p which increases daily at such compound rate as
gives a final capital entitlement of 199.54p on 31 May 2009. As at 25 March
2003, their accrued entitlement was 117.10p. The ZDP Subsidiary has the benefit
of an unsecured subordinated loan note issued by Property Income & Growth, with
a nominal value of #29 million, repayable at par on 31 May 2009. The loan note
is interest free but obliges Property Income & Growth to contribute such amounts
as will result in the ZDP Subsidiary having sufficient assets to satisfy the
capital entitlement of the ZDP Shares.



Following implementation of the Offer, the arrangements described above between
Property Income & Growth and the ZDP Subsidiary will remain unchanged. Land Race
intends to maintain the listing of the ZDP Shares on the Official List of the UK
Listing Authority and the Channel Islands Stock Exchange and the trading
facility on the London Stock Exchange's market for listed securities and the
Channel Islands Stock Exchange and has invited the existing directors of
Property Income & Growth and the ZDP Subsidiary to maintain their appointments
on unchanged terms.



In addition, Land Race has undertaken not to make any distribution to its own
shareholders in the form of either capital or income until all ZDP Shares have
either been repurchased for cancellation or repaid in full. Land Race has
undertaken to procure that Property Income & Growth's Articles of Association be
amended, conditional upon the Offer being declared wholly unconditional, to
restrict the payment of capital or dividends to Land Race.



The Group has no employees. Following implementation of the Offer, it is
intended that the existing arrangements will remain unchanged between Property
Income & Growth and the Investment Manager in relation to the management of
Property Income & Growth and its portfolio of properties and investments. In
addition, Land Race expects the existing arrangements for the administration of
Group and the custody of its assets to continue unchanged.





RECOMMENDATION



The Board of Property Income & Growth, which has been so advised by Hoare
Govett, considers that the Offer and the proposed amendments to the Articles of
Association are in the best interests of Ordinary Shareholders. In giving its
advice, Hoare Govett has taken into account the Directors' commercial
assessment. Accordingly, the Board of Property Income & Growth unanimously
recommends that Ordinary Shareholders should accept the Offer and vote in favour
of the special resolutions to be proposed at the Extraordinary General Meeting
of Property Income & Growth.





GENERAL



The Offer is subject to the applicable requirements of the City Code. The formal
offer document, dated 3 April 2003 and setting out details of the Offer, is
being despatched today together with the Form of Acceptance, the Circular to ZDP
Shareholders and Forms of Proxy for use by Ordinary and ZDP Shareholders at the
Extraordinary General Meeting and ZDP Class Meeting.



This announcement does not constitute an offer or an invitation to purchase
securities.
APPENDIX 1



CONDITIONS OF THE OFFER



The Offer is conditional upon:



(a)   valid acceptances being received (and not, where permitted, withdrawn) by
not later than 3.00 p.m. on 24 April 2003, the first closing date of the Offer,
(or such later time(s) and/or date(s) as Land Race may, subject to the City
Code, decide) in respect of not less than 75 per cent. (or such lower percentage
as Land Race with the consent of RBS may decide) in nominal value of the
Ordinary Shares to which the Offer relates, provided that this condition shall
not be satisfied unless Land Race shall have acquired or agreed to acquire,
whether pursuant to the Offer or otherwise, Ordinary Shares carrying in
aggregate more than 50 per cent. of the voting rights normally exercisable at
general meetings of Property Income & Growth including, for this purpose, to the
extent (if any) required by the City Code, the voting rights attaching to any
Ordinary Shares which may be unconditionally allotted or issued, before the
Offer becomes or is declared unconditional as to acceptances. For the purposes
of this condition:



(i)   shares which have been unconditionally allotted but not issued shall be
deemed to carry the voting rights they will carry upon issue;



(ii)  the expression ''Ordinary Shares to which the Offer relates'' shall be
construed in accordance with sections 428 to 430F of the Companies Act 1985;



(b)   all necessary filings having been made and all applicable waiting and
other periods (including any extensions thereof) having expired, lapsed or been
terminated and all statutory or regulatory obligations in any jurisdiction
having been complied with, in each case, in respect of the Offer and the
acquisition of any shares in, or control of, Property Income & Growth by Land
Race;



(c)   resolution number 1 set out in a notice of Extraordinary General Meeting
of Property Income & Growth dated 3 April 2003 being passed;



(d)   save as publicly announced through a Regulatory Information Service by the
Wider Property Income & Growth Group since 30 November 2002 or disclosed in
writing to Land Race, the Investment Manager or David Bruce prior to the
announcement of the Offer no person having taken, instituted, implemented or
threatened any legal proceedings, or having required any action to be taken or
otherwise having done anything or having enacted, made or proposed any statute,
regulation, order or decision or taken any other step and there not continuing
to be outstanding any statute, regulation, order or decision that will or is
reasonably likely to:



(i)   make the Offer, its implementation or the acquisition or proposed
acquisition of any shares in, or control or management of, the Wider Property
Income & Growth Group by Land Race illegal, void or unenforceable; or



(ii)  otherwise directly or indirectly materially restrict, restrain, prohibit,
delay or interfere in the implementation of or impose material additional
conditions or obligations with respect to or otherwise materially challenge or
require amendment of the Offer or the proposed acquisition of Property Income &
Growth by Land Race or any acquisition of shares in Property Income & Growth by
Land Race; or



(iii) impose any material limitation on the ability of Land Race or  Property
Income & Growth or any member of the Wider Property Income & Growth Group to
acquire or hold or exercise effectively, directly or indirectly, any rights of
ownership of shares or other securities or the equivalent in any member of the
Wider Property Income & Growth Group or management control over any member of
the Wider Property Income & Growth Group; or



(iv)  require, prevent or delay the disposal or alter the terms of any proposed
disposal by any member of the Wider Property Income & Growth Group of all or any
material part of their respective businesses, assets or properties or impose any
material limitation on the ability of any of them to conduct their respective
businesses or own their respective assets or properties; or



(v)   require Land Race or any member of the Wider Property Income & Growth
Group to offer to acquire any shares or other securities (or the equivalent) in
any member of the Wider Property Income & Growth Group or Land Race owned by any
third party (in each case, other than in implementation of the Offer); or



(vi)  impose any material limitation on the ability of Land Race or the Wider
Property Income & Growth Group to integrate or co-ordinate its business, or any
material part of it, with the businesses or any material part of the businesses
of Land Race and/or any member of the Wider Property Income & Growth Group; or



(vii) result in any member of the Wider Property Income & Growth Group ceasing
to be able to carry on business under any name under which it presently does so;
or



(viii)otherwise adversely affect any or all of the businesses, assets, prospects
or profits of any member of the Wider Property Income & Growth Group in each
case to an extent which is material in the context of the Offer or the Wider
Property Income & Growth Group taken as a whole;



and all applicable waiting and other time periods during which any such person
could institute, or implement or threaten any such legal proceedings, having
expired, lapsed or been terminated;



(e)   since 30 November 2002, except and to the extent publicly announced by
Property Income & Growth through a Regulatory Information Service or disclosed
in writing to Land Race, the Investment Manager or David Bruce prior to the
announcement of the Offer on by the Wider Property Income & Growth Group, there
being no provision of any agreement, arrangement, licence, permit or other
instrument to which any member of the Wider Property Income & Growth Group is a
party or by or to which any such member of the Wider Property Income & Growth
Group or any of its assets may be bound, entitled or subject, which, in
consequence of the Offer or the proposed acquisition of any shares or other
securities in Property Income & Growth or because of a change in the control or
management of any member of the Wider Property Income & Growth Group, would or
might reasonably be expected to result in:



(i)   any moneys borrowed by or any other indebtedness (actual or contingent)
of, or any grant available to, any member of the Wider Property Income & Growth
Group being or becoming repayable or capable of being declared repayable
immediately or earlier than its stated maturity date or repayment date or the
ability of any member of the Wider Property Income & Growth Group to borrow
monies or incur any indebtedness being withdrawn or inhibited or being capable
of becoming or being withdrawn or inhibited;



(ii)  any such agreement, arrangement, licence, permit or instrument or the
rights, liabilities, obligations, interests or business of any member of the
Wider Property Income & Growth Group thereunder being terminated or adversely
modified or adversely affected or any adverse obligation or liability arising or
any action being taken or arising thereunder;



(iii) any assets or interests of any member of the Wider Property Income &
Growth Group being or falling to be disposed of or charged or any right arising
under which any such asset or interest could be required to be disposed of or
charged;



(iv)  the creation or enforcement of any mortgage, charge or other security
interest over the whole or any part of the business, property or assets of any
member of the Wider Property Income & Growth Group or any such security interest
(whenever arising or having arisen) becoming enforceable;



(v)   the rights, liabilities, obligations or interests of any member of the
Wider Property Income & Growth Group in, or the business of any member of the
Wider Property Income & Growth Group with, any person, firm or body (or any
arrangement or arrangements relating to any such interest or business) being
terminated or adversely modified or affected;



(vi)  the value of any member of the Wider Property Income & Growth Group or its
financial or trading position or prospects being prejudiced or adversely
affected;



(vii) any member of the Wider Property Income & Growth Group ceasing to be able
to carry on business under any name under which it presently does so; or



(viii)the creation of any liability, actual or contingent, by any member of the
Wider Property Income & Growth Group;



in each case to an extent which is material in the context of the Wider Property
Income & Growth Group taken as a whole and no event having occurred which, under
any provision of any agreement, arrangement, licence, permit or other instrument
to which any member of the Wider Property Income & Growth Group is a party or by
or to which any member of the Wider Property Income & Growth Group or any of its
assets may be bound, entitled or subject would, otherwise than in the ordinary
course of business, result in any of the events or circumstances referred to in
subparagraphs (i) to (viii) of this paragraph (e) in circumstances which are, or
might reasonably be expected to be, material in the context of the Wider
Property Income & Growth Group taken as a whole;



(f)   no government or governmental, quasi-governmental, supranational,
statutory, regulatory, environmental or investigative body, court, trade agency,
association, institution or any other body or person whatsoever in any
jurisdiction (each a ''Third Party'') having decided to take, institute,
implement or threaten any action, proceeding, suit, investigation, enquiry or
reference, or enacted, made or proposed any statute, regulation, decision or
order or having taken any other steps which would or might reasonably be
expected to:



(i)   require, prevent or delay the divestiture or alter the terms
envisaged for any proposed divestiture by Land Race or any member of    Land
Race of all or any portion of their respective businesses, assets or property or
impose any limitation on their ability to conduct their respective businesses
(or any of them) or to own any of their respective assets or properties or any
part thereof in any such case to an extent which is material in the context of
Land Race or any member of the Wider Property Income & Growth Group (in each
case taken as a whole);



(ii)  require, prevent or delay the divestiture by Land Race of any shares or
other securities in Property Income & Growth;



(iii) impose any material limitation on, or result in a material delay in, the
ability of Land Race directly or indirectly to acquire or to hold or to exercise
effectively any rights of ownership in respect of shares or loans or securities
convertible into shares or any other securities (or the equivalent) in any
member of the Wider Property Income & Growth Group or to exercise management
control over any such member or person of the Wider Property Income & Growth
Group;



(iv)  otherwise adversely affect the business, assets, profits or prospects of
any member of the Wider Property Income & Growth Group in a manner which would
be material in the context of (as applicable) Land Race or the Wider Property
Income & Growth Group in either case taken as a whole;



(v)   make the Offer or its implementation or the acquisition or proposed
acquisition of any shares or other securities in, or control of, Property Income
& Growth by Land Race void, illegal and/or unenforceable under the laws of any
jurisdiction, or otherwise, directly or indirectly, restrain, restrict,
prohibit, delay or otherwise interfere with the same, or impose additional
material conditions or obligations with respect thereto, or otherwise challenge,
hinder or interfere therewith in any such case to a material extent;



(vi)  save pursuant to the Offer, require Land Race or any member of the Wider
Property Income & Growth Group to offer to acquire any shares or other
securities (or the equivalent) or interest in any member of the Wider Property
Income & Growth Group or Land Race owned by any Third Party;



(vii) impose any limitation on the ability of any member of the Wider Property
Income & Growth Group to co-ordinate its business, or any part of it, with the
businesses of any other members which is adverse to and material in the context
of the Wider Property Income & Growth Group taken as a whole; or



(viii)result in any member of the Wider Property Income & Growth Group ceasing
to be able to carry on business under any name other than the name under which
it carries on business at the date of the announcement of the Offer,



and all applicable waiting and other time periods during which any such Third
Party could institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference or any other step under the laws of any
jurisdiction having expired, lapsed or been terminated;



(g)   all necessary filings or applications having been made in connection with
the Offer and all authorisations, orders, recognitions, grants, consents,
licences, confirmations, clearances, permissions and approvals necessary for or
in respect of the Offer or the proposed acquisition of any shares or other
securities in, or control of, Property Income & Growth by Land Race, or which
are necessary for any member of the Wider Property Income & Growth Group to
carry on its business, having been obtained from all appropriate Third Parties
or persons with whom any member of the Wider Property Income & Growth Group has
entered into contractual arrangements which are material in the context of the
Wider Property Income & Growth Group taken as a whole and all such
authorisations, orders, recognitions, grants, consents, licences, confirmations,
clearances, permissions and approvals together with all authorisations, orders,
recognitions, grants, licences, confirmations, clearances, permissions and
approvals necessary or appropriate to carry on the business of the Wider
Property Income & Growth Group and the absence of which would have a material
adverse effect on the Wider Property Income & Growth Group taken as a whole
remaining in full force and effect at the time when the Offer become otherwise
unconditional (and all filings necessary for such purpose having been made) and
no notice or intimation of any intention to revoke, amend or not to renew any of
the same having been received at the time at which the Offer becomes otherwise
unconditional in all respects and all necessary statutory or regulatory
obligations in connection with the Offer and its implementation in any
jurisdiction having been complied with by Property Income & Growth;



(h)   no member of the Wider Property Income & Growth Group having since 30
November 2002 save as publicly announced through a Regulatory Information
Service or as disclosed by Property Income & Growth to Land Race prior to the
announcement of the Offer or as set out in the Offer Document:



(i)   issued or agreed to issue or authorised or proposed the issue of
additional shares of any class, or securities or securities convertible into, or
exchangeable for, or rights, warrants or options to subscribe for or acquire,
any such shares or convertible securities (save as between Property Income &
Growth and wholly owned subsidiaries of Property Income & Growth and save for
the issue of Ordinary Shares on the exercise of options granted before the date
of this announcement in the ordinary course);



(ii)  recommended, declared, paid or made or proposed to recommend, declare, pay
or make any bonus, dividend or other distribution other than to Property Income
& Growth or one of its wholly-owned subsidiaries;



(iii) save for transactions between Property Income & Growth and its wholly
owned subsidiaries, merged with or demerged or acquired any body corporate,
partnership or business or acquired or disposed of, or, other than in the
ordinary course of business, transferred, mortgaged or charged or created any
security interest over, any assets or any right, title or interest in any asset
(including shares and trade investments) or authorised, proposed or announced
any intention to do so, in each case which is material in the context of the
Wider Property Income & Growth Group taken as a whole;



(iv)  save for transactions between Property Income & Growth and its
wholly-owned subsidiaries, made, authorised, proposed or announced an intention
to propose any change in its loan capital which is material in the context of
the Wider Property Income & Growth Group taken as a whole;



(v)   save for transactions between Property Income & Growth and its
wholly-owned subsidiaries issued, authorised or proposed the issue of any
debentures incurred or increased any indebtedness or contingent liability to an
extent which is material to the Wider Property Income & Growth Group (taken as a
whole);



(vi) any material contract, transaction, arrangement or commitment (whether in
respect of capital expenditure or otherwise) which is of a long term, unusual or
onerous nature, or which  involves or could involve an obligation of a nature or
magnitude which is, in any such case, material to the Wider Property Income &
Growth Group taken as a whole or which is or is likely to be materially
restrictive on the business of the Wider Property Income & Growth Group or Land
Race;



(vii) entered into or varied the terms of any service agreement with any
director or senior executive of any member of the Wider Property Income & Growth
Group (excluding the payment of additional fees to any director in respect of
this or any third party offer);



(viii)implemented, effected or authorised, proposed or announced its intention
to implement, effect, authorise or propose any reconstruction, amalgamation,
commitment, scheme or other transaction or arrangement other than in the
ordinary course of business;



(ix)  purchased, redeemed or repaid or proposed the purchase (excluding the
proposals to authorise the repurchase of ZDP Shares contained in the circular to
ZDP Shareholders dated 3 April 2003), redemption or repayment of any of its own
shares or other securities or reduced or made any other change to any part of
its share capital to an extent which is material to the Wider Property Income &
Growth Group taken as a whole;



(x)   waived or compromised any claim which is material in the context of the
Wider Property Income & Growth Group taken as a whole;



(xi)  made any material alteration to its Memorandum or Articles of Association
or other incorporation documents;



(xii) taken or proposed any corporate action or had any legal proceedings
instituted or threatened against it for its winding-up (voluntary or otherwise),
dissolution, reorganisation or for the appointment of any administrator,
administrative receiver, trustee or similar officer of all or any of its assets
or revenues or any analogous proceedings in any jurisdiction or appointed any
analogous person in any jurisdiction;



(xiii)been unable, or admitted in writing that it is unable, to pay its debts or
having stopped or suspended (or threatened to stop or suspend) payment of its
debts generally or ceased or threatened to cease carrying on all or a
substantial part of its business in each such case where the consequences
thereof would be material in the context of Land Race or the Wider Property
Income & Growth Group (in each case taken as a whole); or



(xiv) entered into any contract, commitment, agreement or arrangement or passed
any resolution or made any offer (which remains open for acceptance) with
respect to or announced an intention to effect or propose any of the
transactions, matters or events referred to in this paragraph;



(i)   since 30 November 2002,  save as publicly announced by Property Income &
Growth through a Regulatory Information Service,  or as disclosed in writing to
Land Race, the Investment Manager or David Bruce by Property Income & Growth
prior to the announcement of the Offer on:



(i)   there having been no material adverse change or deterioration having
occurred in the business, assets, financial or trading position or profits or
prospects of Property Income & Growth or any other member of the Wider Property
Income & Growth Group which is material in the context of the Wider Property
Income & Growth Group taken as a whole;



(ii)  there having been no litigation, arbitration proceedings, other form of
dispute resolution proceedings, prosecution or other legal proceedings to which
any member of the Wider Property Income & Growth Group is or may become a party
(whether as a claimant, defendant or otherwise), no such proceedings having been
threatened against any member of the Wider Property Income & Growth Group and no
investigation by any Third Party against or in respect of any member of the
Wider Property Income & Growth Group having been instituted, threatened or
announced by or against or remaining outstanding in respect of any member of the
Wider Property Income & Growth Group which in any such case might adversely
affect any member of the Wider Property Income & Growth Group in any way which
is material in the context of the Wider Property Income & Growth Group taken as
a whole; and



(iii) no contingent or other liability having arisen which might reasonably be
expected adversely to affect any member of the Property Income & Growth Group to
an extent which is material to the Wider Property Income & Growth Group taken as
a whole.



(j)   Land Race not having discovered except as disclosed in writing to Land
Race prior to the announcement of the Offer:



(i)   that any financial, business or other information concerning any member of
the Wider Property Income & Growth Group as contained in the information which
has been disclosed at any time in writing by or on behalf of Property Income &
Growth is misleading, contains a misrepresentation of fact or omits to state a
fact necessary to make that information not misleading in each case to an extent
which is material in the context of the Wider Property Income & Growth Group
taken as a whole; or



(ii)  that any member of the Wider Property Income & Growth Group is subject to
any liability (contingent or otherwise) which is not disclosed in the interim
report of Property Income & Growth for the six months ended 30 November 2002 or
publicly announced by Property Income & Growth prior to the release of the
announcement of the Offer and which is material in the context of the Wider
Property Income & Growth Group taken as a whole; or



(iii) any information relating specifically to Property Income & Growth which
adversely affects the import of any information disclosed at any time by or on
behalf of Property Income & Growth to an extent which is material in the context
of the Wider Property Income & Growth Group taken as a whole; and



(k)   Land Race not having discovered prior to the date when the Offer would
otherwise become unconditional in all respects that:



(i)   any past or present member of the Wider Property Income & Growth Group has
failed to comply with any and/or all applicable    legislation or regulations of
any jurisdiction with regard to environmental matters including without
limitation, the disposal, spillage, release, discharge, leak or emission of any
waste or hazardous substance or any substance likely to impair the environment
or harm human health or animal health;



(ii)  there has otherwise been any such disposal, spillage, release, discharge,
leak or emission (whether or not the same constituted a non compliance by any
person with any such legislation or regulations, and wherever the same may have
taken place) which would be likely to give rise to any liability (actual or
contingent) or cost on the part of any member of the Wider Property Income &
Growth Group;



(iii) there is, or is likely to be, for that or any other reason whatsoever, any
liability (actual or contingent) of any member of the Wider Property Income &
Growth Group to make good, repair, reinstate or clean up any property or any
controlled waters now or previously owned, occupied, operated or made use of or
controlled by or harmed, contaminated or in any way affected by any member of
the Wider Property Income & Growth Group under any environmental legislation,
regulation, notice, circular or order of any government, governmental,
quasi-governmental, state or local government, supranational, statutory or other
regulatory body, agency, court, association or any other person or body in any
jurisdiction or any common law liability (including, without limitation,
contract); or



(iv)  circumstances exist whereby a person or class of persons or any entity or
entities would be likely to have any claim or claims in respect of any product,
by-product or process or materials used or existing now or previously sold or
carried out by or in any way dealt with or handled by or resulting from, or from
any activity of any member of the Wider Property Income & Growth Group or any of
its predecessors which claim or claims would be likely to give rise to any
liability (whether actual or contingent) of any member of the Wider Property
Income & Growth Group which, in each of cases (i), (ii), (iii) and (iv), is
material in the context of the Wider Property Income & Growth Group taken as a
whole.



Waiver of conditions



Land Race reserves the right to waive, in whole or in part, all or any of the
above conditions except condition (a). If Land Race is required to make an offer
for Ordinary Shares under the provisions of Rule 9 of the City Code, Land Race
may make such alterations to any of the above conditions as are necessary to
comply with the provisions of that Rule.



Conditions (b) to (k) must be fulfilled or waived by midnight on the 21st day
after the date on which condition (a) is fulfilled (or in each case such later
time(s) and/or date(s) as the Panel may agree). Land Race shall be under no
obligation to waive or treat as satisfied any of the conditions (b) to (k) by a
date earlier than the latest date specified above for the satisfaction thereof,
notwithstanding that the other conditions of the Offer may at such earlier date
have been waived or fulfilled and that there are at such earlier date no
circumstances indicating that any of such conditions may not be capable of
fulfilment.



Each of the conditions (b) to (k) inclusive shall be regarded as a separate
condition and shall not be limited by reference to any other condition.



General



The Offer will lapse if the acquisition of Property Income & Growth is referred
to the Competition Commission or if the European Commission initiates
proceedings under Article 6(l)(C) of Council Regulation (EEC) 4064/89 or makes a
referral to a competent authority of the UK under Article 9(1) thereof in
relation to the acquisition of Property Income & Growth by Land Race before 3.00
p.m. on the later of 24 April 2003 and the date on which the Offer becomes or is
declared unconditional as to acceptances. In such circumstances, the Offer will
cease to be capable of further acceptance and persons accepting the Offer and
Land Race shall thereupon cease to be bound by acceptances delivered on or
before the date on which the Offer so lapse.



The Offer will not be made, directly or indirectly, in or into, or by use of the
mails or by any means or instrumentality of interstate or foreign commerce of,
or by any facilities of a national securities exchange of, the US, nor will they
be made in or into Canada, Australia or Japan. Accordingly, copies of this offer
document and any announcement are not being, and must not be mailed or otherwise
distributed or sent in or into or from, the US, Canada, Australia or Japan.






APPENDIX 2



PRINCIPAL BASES AND ASSUMPTIONS



The statistics contained in this announcement have been prepared on the
following bases and assumptions.



Principal bases and assumptions



1. The issued share capital of the Group comprises 87,000,000 Ordinary Shares
and 29,000,000 ZDP Shares.



2. The Group has an outstanding Bank Facility of #77.33 million which is
repayable on 31 May 2009. There is an interest rate swap arrangement which
together with the margin payable on the loan and the MLA costs, fixes the rate
of interest at 6.8925 per cent. per annum



3. As at 31 March 2003, the Group's Total Assets were #125.1 million and
consisted of #109.66 million invested in the Property Portfolio, #10.068 million
invested in the Income Portfolio valued on a mid-price basis and #5.372 million
in cash and other assets.



4. Rental income received from the Property Portfolio is #8,699,000 in the 12
months from 31 March 2003.



5. Income received from the Income Portfolio is #1,400,000 in the 12 months from
31 March 2003.



6. Interest is received on cash balances at the rate of 3 per cent. per annum.



7. As at 31 March 2003, the NAV per Ordinary Share (excluding unamortised
expenses relating to the issue of ZDP Shares and draw down of the Royal Bank of
Scotland Facility at launch on 25 May 2001 equal to 2.12p per Ordinary Share) is
15.87p.



8. Management fees are equal to 1.2 per cent. per annum (excluding VAT) of Total
Assets.



9. Other running expenses of the Company are equal to #450,000 per annum.



10. Should the Offer not be declared wholly unconditional, the monthly dividend
to be paid to Ordinary Shareholders is the lower of 0.375p per Ordinary Share
and such an amount of income per Ordinary Share as remains available for
distribution following the payment of bank interest, management fees and other
running expenses.



11. No member of the Group is expected to incur any significant liability to
taxation on either income or gains, during the period of the projections or
suffer any withholding taxes.



The following bases and assumptions apply in addition to the above assuming the
Offer is declared wholly unconditional in all respects.



12. A tender offer is implemented for the ZDP Subsidiary to buy-back 6,666,667
ZDP Shares at a price of 60p per share (or, if the context requires, such other
number and illustrative price) at a total cost of #4,000,000 within three
months.



13. No dividends are paid or capital returned to holders of Land Race Ordinary
Shares until there are no ZDP Shares in issue and the outstanding Additional
Facility is repaid.



14. The Group does not issue any further shares or securities.



15. The Additional Facility and the Restated Facility amount to #88.7  million.
The existing swap arrangement is retained. The interest paid on the net
additional loan is 4.3 per cent. per annum. The revised margin is 1.1 per cent.
The resulting blended interest rate on the Additional Facility and the Restated
Facility is 6.8121 per cent. per annum (including 0.015 per cent. for MLA's)
which is paid by Property Income & Growth or its subsidiaries.



16. The expenses to be incurred by Property Income & Growth relating, inter
alia, to the Offer are equal to approximately #650,000 of which #500,000 has
been included in the Net Asset Value per Ordinary Share as at 25 March 2003.



17. All income generated by the Income Portfolio and Property Portfolio is,
after payment of management fees, bank interest, bank facility amortisation and
other running costs, used to repurchase ZDP Shares. The ongoing ZDP Share
buy-backs are undertaken at a price which equates to a 15 per cent. per annum
redemption yield to 31 May 2009.



18. Cash balances are assumed to be nil with no interest received or paid.



19. All remaining ZDP Shares are redeemed or repurchased on 31 May 2009.



20. The Special Dividend is paid to Ordinary Shareholders.



21. There are no changes in Guernsey tax law or practice in the period to the
ZDP Repayment Date.






APPENDIX 3



DEFINITIONS



The following definitions apply throughout this announcement:



''Additional Facility'' the additional facility from RBS described on page 78 of
the Offer Document



''Additional Facility Agreement'' the facility agreement between Land Race, the
companies that may become guarantors thereunder and RBS



''Annual Report and Accounts of Property Income & Growth'' the annual report and
consolidated account of Property Income & Growth for the period ended 31 May
2002



''Articles of Association'' the articles of association of Property Income &
Growth



''Channel Islands Stock Exchange'' The Channel Islands Stock Exchange, LBG



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



''Commitment Agreement'' the commitment agreement between Land Race and the
Group dated 3 April 2003



''Directors'' or ''Board'' the Property Income & Growth Board of Directors



''Extraordinary General Meeting'' or ''EGM'' the Extraordinary General Meeting
of Property Income & Growth to be held at 10.00 a.m. on 24 April 2003 or any
adjournment thereof



''Form of Acceptance'' the Form of Acceptance for use by Ordinary Shareholders
in connection with the Offer



''FSA'' Financial Services Authority



''Group'' Property Income & Growth and the Subsidiaries and any other subsidiary
of Property Income & Growth or Subsidiaries from time to time



''Hoare Govett'' Hoare Govett Limited



''Income Portfolio'' the proportion of Property Income & Growth's assets
invested in geared ordinary shares of split capital investment trusts and of
investment companies and sterling denominated corporate bonds and equities



''Initial Cover'' in respect of the ZDP Shares, at 25 March 2003, the ratio of
respectively the Group's and the Land Race Group's gross assets less outstanding
borrowings to the then total accrued entitlement of the ZDP Shares on the basis
of the relevant bases and assumptions set out in Appendix 2



''Investment Manager'' BC Asset Management Limited



''Land Race'' Land Race Limited



''Land Race Group'' Land Race and the Group



''Loan Note and Contribution Agreement'' the loan note and contribution
agreement dated 24 May 2001 and made between the Company and the ZDP Subsidiary



''London Stock Exchange'' London Stock Exchange plc or its successor



''net asset value'' the net asset value of the Company as determined by
deducting the value of the total liabilities of the Company from the value of
the total assets of the Company. Total assets include all cash, accounts
receivables, accrued interest and the current market values of all investments.
Total liabilities include any fees payable to the Manager, the Custodian and the
Administrator, all borrowings, provision for taxes (if any), allowances for
contingent liabilities and any other costs and expenses reasonably and properly
incurred by the Company in effecting the acquisition or disposal of securities



''Offer''   the offer being made by Teather & Greenwood on behalf of Land Race
to acquire all the Ordinary Shares to which the Offer relates on the terms and
subject to the conditions set out in the Offer Document and the Form of
Acceptance including, where the context so requires, any subsequent revisions,
variation, extension or renewal of such offer and includes any election or
alternative available in connections with it



''Offer Document'' the document dated 3 April 2003 relating to the Offer



''Official List'' the Official List of the London Stock Exchange



''Ordinary Share(s)'' the existing unconditionally allotted or issued and fully
paid Ordinary Shares of 25p each in the capital of Property Income & Growth and
any further shares which are unconditionally allotted or issued before the date
on which the Offer closes (or such earlier date or dates, not being earlier than
the date on which the Offer becomes unconditional as to acceptances or, if
later, the first closing date of the Offer, as Land Race may decide)



''Ordinary Shareholder(s)'' the holder(s) of Ordinary Shares



''Panel'' the Panel on Takeovers and Mergers



''Projected Final Cover'' in respect of the ZDP Shares, at the ZDP Repayment
Date, the ratio of respectively the Group's and Land Race Group's gross assets
less outstanding borrowings to the total amount which holders of the ZDP shares
would be entitled to receive on the ZDP Repayment Date on the basis of the
relevant bases and assumptions set out in Appendix 2



''Property Income & Growth'' or ''the Company'' Property Income & Growth Fund
Limited



''Property Portfolio'' the proportion of Property Income & Growth's assets
invested directly in UK property assets



''Property Subsidiary'' BC Property Holdings Limited



''Prospectus'' the prospectus of Property Income & Growth and the ZDP Subsidiary
dated 21 May 2001



''RBS'' or ''Bank'' The Royal Bank of Scotland plc



''RBS Bank Facility'' the term loan facility provided to Property Income &
Growth by the Bank pursuant to the RBS Facility Agreement



''RBS Facility Agreement'' the facility agreement between RBS, Property Income &
Growth, the ZDP Subsidiary and the Property Subsidiary



''Regulatory Information Service''  shall include the Company Announcements
Office of the London Stock Exchange (now known as the Regulatory News Service)



''Restated Facility'' the existing RBS Bank Facility restated as described on
page 81 of the Offer Document



''Restated Facility Agreement'' the RBS Facility Agreement as amended and
restated



''Special Dividend'' the special dividend of 0.5p per Ordinary Share declared on
3 April 2003 which is conditional upon the Offer being declared wholly
unconditional within 60 days of the date of the Offer Document



''significant interest'' a direct or indirect interest in 10 per cent. or more
of the equity share capital (as defined in the Act)



''Teather & Greenwood'' Teather & Greenwood Limited



''the Subsidiaries'' ZDP Subsidiary and the Property Subsidiary



''Total Assets'' the aggregate value of the assets of Property Income & Growth
including net distributable but undistributed income less current liabilities of
Property Income & Growth which shall exclude any proportion of the principal
amounts borrowed for investment treated as current liabilities and any liability
of an intra-group nature



''UK Listing Authority'' the FSA acting in its capacity as the competent
authority for listing under Part VI of the Financial Services and Markets Act
2000



''United States'' the United States of America, including all the states, the
District of Columbia, its territories, possessions and any areas subject to its
jurisdiction



''Wider Property Income & Growth Group'' Property Income & Growth and associated
undertakings and any other body corporate, partnership, joint venture or person
in which the Property Income & Growth and such undertakings (aggregating their
interests) have an interest of more than 20 per cent. of the voting or equity or
the equivalent



''ZDP Circular'' the circular to holders of ZDP Shares dated 3 April 2003



''ZDP Class Meeting'' the separate class meeting of ZDP Shareholders to be held
at 10.10 a.m. on 24 April 2002



''ZDP Repayment Date'' 31 May 2009



''ZDP Shareholder(s)'' a holder of ZDP Shares



''ZDP Shares'' zero dividend preference shares of 25p each in the capital of the
ZDP Subsidiary



''ZDP Subsidiary'' BC Property Securities Limited



All times referred to are London time unless otherwise stated.




                      This information is provided by RNS
            The company news service from the London Stock Exchange
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