Offer for Brockhampton - Pt 1

RNS Number:0536M
South Downs Limited
24 October 2001

South Downs Limited
Offer for Brockhampton - pt1

              NOT FOR RELEASE, PUBLICATION OR
  DISTRIBUTION INTO THE UNITED STATES, CANADA, AUSTRALIA OR
                            JAPAN
                              
FOR IMMEDIATE RELEASE                        24 October 2001
                              
                  BROCKHAMPTON HOLDINGS plc
                          Part One
                              
     Recommended Cash Offers by South Downs Limited for
                  Brockhampton Holdings plc
                              
The  Independent Directors of Brockhampton and the board  of
South  Downs announce the terms of recommended cash  offers,
to  be  made  by  Rothschild on behalf of  South  Downs,  to
acquire the entire issued and to be issued share capital  of
Brockhampton.

The  Offers,  which will be unanimously recommended  by  the
Independent Directors of Brockhampton:

* value each Brockhampton Ordinary Share and Brockhampton
  "A"  Share  at  319 pence in cash and 128 pence  in  cash,
  respectively;

* value  the entire issued share capital of Brockhampton
  at approximately #70.8 million, and represent an enterprise
  value of #76.9 million based on net debt of #6.1 million at
  31 March 2001;

* represent premia of approximately 25.1 per cent. to the
  Closing Price of 255.0 pence per Brockhampton Ordinary Share
  and 23.7 per cent. to the Closing Price of 103.5 pence per
  Brockhampton "A" Share on 23 October 2001, the day prior to
  this announcement;

* represent a premium of 9.9 per cent. to Brockhampton's
  Underlying Regulated Capital Value as at 31 March 2001  of
  #70 million; and

* allow  Brockhampton Shareholders (other  than  certain
  overseas Brockhampton Shareholders) to elect to receive  a
  Loan  Note Alternative instead of some or all of the  cash
  under the terms of the Offers.

South  Downs has received irrevocable undertakings to accept
the  Offers  in  respect of 3,668,976 Brockhampton  Ordinary
Shares  and 23,074,374 Brockhampton "A" Shares, representing
approximately  86.0  per cent. and 51.6  per  cent.  of  the
issued  ordinary voting share capital and "A" ordinary  non-
voting share capital, respectively, of Brockhampton.

South  Downs is a newly-formed company established  for  the
purpose of making the Offers. South Downs has not traded  or
entered   into  any  material  obligation  other   than   in
connection with the Offers and their financing.

The  entire issued share capital of South Downs is owned  by
South Downs Capital.  Following the Offers becoming or being
declared  unconditional in all respects, the ordinary  share
capital  of South Downs Capital will be owned as to  15  per
cent.  by  Management,  40  per cent.  by  The  South  Downs
Employee Benefit Trust and 45 per cent. by Drummond Capital,
through RBIL, both wholly-owned indirect subsidiaries of The
Royal Bank of Scotland Group plc.

It is intended that, subject to certain performance criteria
being  achieved,  Drummond Capital's  interest,  which  will
attract a dividend, will be redeemed over a period of years,
and that the equity interests in South Downs Capital held by
Management  and The South Downs Employee Benefit Trust  will
be increased as a result.

The  shares held by Management and The South Downs  Employee
Benefit  Trust will not attract any dividends until Drummond
Capital's  interest has been redeemed in  full  and  in  any
event  not  until 2008, but will benefit from  any  inherent
gains as Drummond Capital's interest is redeemed.

Mr  Rory  Cullinan, Chairman of Drummond  Capital,  is  Non-
Executive  Chairman of South Downs Capital and South  Downs.
Mr  Nicholas  Roadnight  and  Mr  Neville  Smith,  currently
Managing  Director  and Finance Director,  respectively,  of
Brockhampton  will hold the same positions  in  South  Downs
Capital and South Downs.

Subsequent  to the Offers becoming or being declared  wholly
unconditional, South Downs intends to optimise  the  capital
structure  of  Brockhampton,  which  is  likely  to  involve
raising finance from debt capital markets.

RBS  and  Brockhampton have entered into an  inducement  fee
arrangement,  details of which are set out in  Part  Two  of
this announcement.

The Independent Directors of Brockhampton, who have been  so
advised by Close Brothers, consider the terms of the  Offers
to  be  fair and reasonable and have unanimously  agreed  to
recommend Brockhampton Shareholders to accept the Offers, as
they  have irrevocably undertaken to do in respect of  their
own  beneficial shareholdings.  In providing advice  to  the
Independent Directors, Close Brothers has taken into account
the commercial assessments of the Independent Directors.

Commenting  on the announcement, Rory Cullinan, Chairman  of
Drummond Capital, said:

"We   are  delighted  that  the  Independent  Directors   of
Brockhampton  have agreed to recommend South  Downs'  Offers
and  that  the  major Brockhampton Shareholders  have  shown
their  support  by  giving irrevocable undertakings.   South
Downs  is  committed  to continuing the high  standards  and
quality of service to its water supply customers at the same
time  as giving greater stability and sustainability to  the
shareholder structure."

Martin Copp, Independent Director of Brockhampton, added:

"Brockhampton's ability to create shareholder value has been
limited  by  the  constraints of operating  in  a  regulated
industry  and  by reduced investor interest in small  quoted
companies.   These  Offers,  which  are  at  a  premium   to
Underlying Regulated Capital Value, represent good value for
shareholders and will allow the company to access lower cost
capital,  leaving it well placed to continue developing  for
the  benefit  of its employees and customers whilst  meeting
its regulatory requirements."

Expressions used in this summary are defined in the attached
announcement.

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

Enquiries

South Downs:
Rory Cullinan                          Tel:    [phone]
Nicholas Roadnight                     Tel:    [phone]

Rothschild:
Richard Noble                          Tel:    [phone]
Ed Welsh                               Tel:    [phone]

Brockhampton:
Martin Copp                            Tel:    [phone]

Close Brothers:
Peter Alcaraz                          Tel:    [phone]
David Bezem                            Tel:    [phone]
                                       
Smithfield Financial:
John Antcliffe                         Tel:    [phone]


Rothschild, which is regulated in the United Kingdom by  The
Securities   and  Futures  Authority  Limited,   is   acting
exclusively  for  RBS and South Downs and  no  one  else  in
connection  with the Offers and will not be  responsible  to
anyone  other  than  RBS and South Downs for  providing  the
protections  afforded  to  its customers  or  for  providing
advice in relation to the Offers.

Close Brothers, which is regulated in the United Kingdom  by
The  Securities  and  Futures Authority Limited,  is  acting
exclusively  for Brockhampton and no one else in  connection
with  the Offers and will not be responsible to anyone other
than Brockhampton for providing the protections afforded  to
its  customers  or for providing advice in relation  to  the
Offers.

The  Offers  (including the Loan Note Alternative)  are  not
being made, directly or indirectly, in or into, or by use of
the  mails,  or by any means or instrumentality  (including,
without  limitation,  facsimile or electronic  transmission,
telex  and telephone) of interstate or foreign commerce,  or
of  any  facility of a national securities exchange of,  the
USA,  Canada,  Australia or Japan and the Offers  cannot  be
accepted by any such use, means, instrumentality or facility
or from within the USA, Canada, Australia or Japan.

The  Loan  Notes have not been, and will not be,  registered
under  the Securities Act nor under the securities  laws  of
any  state of the USA nor the applicable securities laws  of
Canada,  Australia  or  Japan. The Loan  Notes  may  not  be
offered,  sold or delivered (directly or indirectly)  in  or
into the USA, Canada, Australia or Japan.

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