Offer for Property Fund Mgmt

RNS Number:3455D
Teesland Plc
24 September 2004


NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION IN WHOLE OR IN PART IN OR INTO THE 
UNITED STATES, CANADA, JAPAN OR AUSTRALIA


For immediate release on 24 September 2004


                           Teesland plc ("Teesland")



           Recommended Offer for Property Fund Management plc ("PFM")



         Proposed Placing and Open Offer to raise #13.6 million (gross)







The boards of Teesland and PFM are pleased to announce that they have reached
agreement on the terms of a recommended offer to be made by British Linen
Advisers on behalf of Teesland for the whole of the issued and to be issued
share capital of PFM which it does not already own.



Highlights



*         Offer Highlights

   o  The Offer is being made on the basis of 2.308 New Teesland Shares for
      each PFM Share, valuing each PFM Share at 156p.

   o  The Offer values PFM at #34.47 million, based on the Closing Price of a
      Teesland Share of 67.5p on 24 September 2004.

   o  The Offer represents a premium of approximately 50.5 per cent. to the
      Closing Price of 103.5p per PFM Share on 18 August 2004.

   o  The Cash Alternative will be made available for 21 days following
      posting of the Offer Document to PFM Shareholders and values PFM at 150p 
      per share (before taking into account fractional entitlements to Offer 
      Shares).

   o  The Cash Alternative has been underwritten by KBC Peel Hunt.



*         Placing and Open Offer

   o  Teesland proposes, in addition, to raise approximately #13 million
      (after deducting the placing and underwriting commissions relating to the
      Placing and Open Offer) by the issue of 20,912,320 Open Offer Shares at 
      65p per share.

   o  The Placing and Open Offer has been fully underwritten by KBC Peel
      Hunt.



*         Irrevocable undertakings

   o  Binding irrevocable undertakings to accept the Offer have been received
      by Teesland in respect of 10,086,217 PFM Shares, representing in aggregate
      approximately 45.6 per cent. of the existing issued share capital of PFM.

   o  In aggregate, Teesland owns or has binding irrevocable acceptances to
      accept the Offer in respect of 13,391,754 PFM Shares (60.5 per cent. of 
      the PFM Shares in issue).



*         Recommendation

   o  The PFM Board unanimously recommends the Offer.



*         Proceeds of the Placing and Open Offer

   o  The net proceeds of the Placing and Open Offer, estimated at #13
      million after deducting the placing and underwriting commissions relating 
      to the Placing and Open Offer, will support co-investment by the Enlarged 
      Group in the second closing of PFM's Euroind High Income Fund and in PFM's 
      proposed Central European Investment Fund, both of which are being 
      promoted by or on behalf of PFM, and in its UK funds. They will also meet 
      the cost of the placing and underwriting commissions relating to provision 
      of the Cash Alternative and all other expenses of the Offer, including the 
      expenses of PFM and its advisers.



*         PFM interims

   o  PFM announced today results for the 6 months to 30 June 2004.

   o  Loss before tax of #1.91 million (6 months to 30 June 2003 profit of
      #0.01 million).





The Teesland Directors believe that combining the businesses of Teesland and PFM
will offer shareholders in the Enlarged Group:



*             Additional industrial property expertise to complement Teesland's
existing expertise in the mixed commercial, residential and student housing,
shopping centre and leisure sectors.

*             An infrastructure of European offices, from which it is intended
that the Enlarged Group will launch funds in sectors reflecting Teesland's
strengths.

*             An extended client base: Teesland intends to market both existing
and new funds to PFM's European investors, and intends to offer European
property funds to private investors.

*             The opportunity for both Teesland's and PFM's development teams to
launch a new fund whose objectives will be exploitation of property development
and enhancement opportunities.

*             The likelihood of enhanced returns from applying Teesland's
warehousing and co-investment model to the Enlarged Group.

*             Critical mass, with funds under management expected to exceed #2.5
billion by the end of 2006.



The Teesland Directors also believe that PFM's business will benefit from
Teesland's existing authorised fund management activity which is carried out by
its FSA regulated subsidiary, Equity Partnerships Fund Management Limited.



Subject to the timely second closure of PFM's Euroind High Income Fund, the
Teesland Directors expect the acquisition of PFM to be earnings enhancing from
the outset.



It is intended that John Sims, the Chief Executive of PFM, will join the board
of the Enlarged Group as an executive director, upon the Offer being declared
unconditional in all respects.



Commenting on the acquisition, Kevin McCabe, Chairman of Teesland said:



"These are two complementary businesses with principal strengths in fund and
asset management. The merger has the benefit of creating a major UK and European
property fee earning business."



Commenting on the acquisition, Glyn Hirsch, Chairman of PFM said:



"A combination of PFM and Teesland makes strategic sense, bringing together
PFM's strengths in the industrial sector and in Europe and Teesland's strengths
in the provision of a range of specialist funds. This Offer delivers value for
PFM Shareholders with the choice of continuing their equity exposure through
participating in a combination of the PFM and Teesland businesses or realising
their PFM Shares for cash or a combination of both. We therefore unanimously
recommend shareholders to accept the Offer."



British Linen Advisers is acting as financial adviser to Teesland.  KBC Peel
Hunt is acting as sponsor and corporate broker to Teesland and is sole
underwriter of the Cash Alternative and the Placing and Open Offer. Williams de
Broe is acting as financial adviser and broker to PFM.



Enquiries:


Teesland plc
Mickola Wilson                                      020 7659 4709

British Linen Advisers
Richard Davies                                      020 7710 8800

KBC Peel Hunt
David Davies / Jonathan Marren                      020 7418 8900

Tavistock Communications
Jeremy Carey / Marylene Guernier                    020 7920 3150/07836 734 625

PFM plc
Glyn Hirsch                                         020 7535 1818

Williams de Broe Plc
Jonathan Gray / James Maxwell                       020 7588 7511

Baron Phillips Associates
Baron Phillips                                      020 7920 3161/07050 124 119



This summary should be read in conjunction with and is subject to the full text
of the attached press announcement.



British Linen Advisers, which is authorised and regulated in the UK by the
Financial Services Authority, is acting exclusively as financial adviser for
Teesland and no-one else in connection with the Offer and the Placing and Open
Offer and will not be responsible to anyone other than Teesland for providing
the protections afforded to clients of British Linen Advisers nor for giving
advice in relation to the contents of this announcement or any other
arrangements referred to herein.  British Linen Advisers has approved this
announcement for the purpose of Section 21 of the Financial Services and Markets
Act 2000.



KBC Peel Hunt, which is authorised and regulated in the UK by the Financial
Services Authority, is acting exclusively as sponsor and stockbroker for
Teesland and no-one else in connection with the Offer and the Placing and Open
Offer and will not be responsible to anyone other than Teesland for providing
the protections afforded to clients of KBC Peel Hunt nor for giving advice in
relation to the contents of this announcement or any other arrangements referred
to herein.



Williams de Broe, which is authorised and regulated in the UK by the Financial
Services Authority, is acting exclusively for PFM and no-one else in connection
with the Offer and will not be responsible to anyone other than PFM for
providing the protections afforded to clients of Williams de Broe nor for giving
advice in relation to the contents of this announcement or any other
arrangements referred to herein.



Terms used in this summary shall have the meaning given to them in Appendix III
to the full announcement.



This announcement does not constitute an offer to sell or invitation to purchase
or subscribe for any securities or the solicitation of an offer to buy or
subscribe for any securities pursuant to the Offer or otherwise.  The Offer will
be made solely by the Offer Document and the Form of Acceptance accompanying the
Offer Document, which will contain the full terms and conditions of the Offer,
including details of how the Offer may be accepted.



The availability of the Offer and/or the Cash Alternative to persons not
resident in the United Kingdom may be affected by the laws of the relevant
jurisdictions.  Persons who are subject to the laws of any jurisdiction other
than United Kingdom should inform themselves about, and observe, any applicable
requirements.  Further details in relation to overseas PFM Shareholders will be
contained in the Offer Document and the Form of Acceptance.



The Offer is not being made, directly or indirectly, in or into, or by use of
e-mails of, or by any means or instrumentality (including, without limitation,
facsimile transmission, telex, telephone or e-mail) of interstate or foreign
commerce of, or any facilities of a national securities exchange of the United
States, Canada, Australia or Japan or any other jurisdiction if to do so would
constitute the violation of the relevant laws of such jurisdiction, and cannot
be accepted by any such use, means or instrumentality or facility from or within
the United States, Canada, Australia or Japan.











NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION IN WHOLE OR IN PART IN OR INTO THE
                   UNITED STATES, CANADA, JAPAN OR AUSTRALIA



For immediate release on 24 September 2004





                           Teesland plc ("Teesland")



           Recommended Offer for Property Fund Management plc ("PFM")



         Proposed Placing and Open Offer to raise #13.6 million (gross)





1.        Introduction



The boards of Teesland and PFM are pleased to announce that they have reached
agreement on the terms of a recommended offer to be made by British Linen
Advisers on behalf of Teesland for the whole of the issued and to be issued
share capital of PFM which it does not already own.



Teesland also announces that it proposes to raise approximately #13 million
(after deducting the placing and underwriting commissions relating to the
Placing and Open Offer) by way of a placing and open offer of 20,912,320 Open
Offer Shares at 65p per share in order to support the Enlarged Group's
co-investment plans and to meet the cost of the placing and underwriting
commissions relating to provision of the Cash Alternative and all other expenses
of the Offer, including the expenses of PFM and its advisers. The Open Offer is
being made on the basis of 7 Open Offer Shares for every 19 existing Teesland
Shares, and has been fully underwritten by KBC Peel Hunt.



2.        The Offer for PFM



The Offer, which will be made by British Linen Advisers on behalf of Teesland
and will be subject to the conditions and further terms set out below and in
Appendix I to this announcement and to be set out in the Offer Document, will be
made on the following basis:



           For every 1 PFM Share                       2.308 Offer Shares



and so in proportion for any greater or lesser number of PFM Shares held.
Fractions of Offer Shares will not be allotted and the number of Offer Shares to
be allotted to each PFM Shareholder who validly accepts the Offer will be
rounded down to the nearest whole number.



Based on the Closing Price of a Teesland Share of 67.5p on 24 September 2004,
being the last Business Day immediately preceding this announcement, the Offer
values the whole of the issued ordinary share capital of PFM at approximately
#34.47 million, and each PFM Share at approximately 156p. This represents a
premium of approximately 50.5 per cent. to the Closing Price of 103.5p per PFM
Share on 18 August 2004, being the last Business Day prior to the commencement
of the Offer Period.



3.        The Cash Alternative



PFM Shareholders who validly accept the Offer may elect, in respect of all or
part of their holdings of PFM Shares, to receive cash instead of the Offer
Shares to which they would otherwise be entitled at a price of 65p for each
Offer Share. An accepting PFM Shareholder who elects for the Cash Alternative
will therefore receive, subject to fractional entitlements, in total:



           For each PFM Share                          150 pence in cash



On the basis set out above, the Cash Alternative values the whole of the issued
ordinary share capital of PFM at approximately #33.19 million, a premium of
approximately 44.9 per cent. to the Closing Price of 103.5 p per PFM Share as at
18 August 2004. The Cash Alternative will remain open for acceptance until 21
days after the posting of the Offer Document and will then close and cease to be
available for acceptance (unless KBC Peel Hunt and Teesland agree to extend it).



Details of the financing of the Cash Alternative are set out in paragraph 8
below.



PFM Shareholders who are in any doubt as to whether to elect for the Cash
Alternative should consult their stockbroker, bank manager, solicitor,
accountant or other independent financial adviser authorised under the Financial
Services and Markets Act 2000.



4.        Further Terms of the Offer



The PFM Shares which are the subject of the Offer will be acquired by Teesland
fully paid, or credited as fully paid, and free from all liens, equitable
interests, charges, third party rights, encumbrances and other interests and
together with all rights now or hereafter attaching thereto, including the right
to receive and retain all dividends and other distributions declared or paid
hereafter.



The Offer is conditional, inter alia, upon (i) the passing by Teesland
Shareholders of appropriate resolutions at the EGM to approve and implement the
Offer and the Placing and Open Offer, and (ii) Admission.



The Offer will otherwise be made subject to the conditions and further terms set
out in Appendix I, and to be set out in full in the Offer Document and the Forms
of Acceptance, or otherwise so as to comply with the requirements of the City
Code.



The Offer Shares will rank pari passu in all respects with the existing Teesland
Shares and the Open Offer Shares and will rank in full for dividends and other
distributions declared, made or paid after Admission in respect of the ordinary
share capital of Teesland save in respect of the final dividend declared by
Teesland on 8 September 2004 for its financial year ending 30 June 2004 and
having a record date of 24 September 2004, which shall only be payable in
respect of existing Teesland Shares.



5.        PFM Share Options



Following the Offer becoming or being declared unconditional in all respects,
Teesland, through British Linen Advisers, intends to make appropriate proposals
to holders of options under the PFM Option Schemes or otherwise to the extent
that such options have not been exercised or lapsed.



6.        Recommendation



The PFM Directors, who have been so advised by Williams de Broe, consider the
terms of the Offer to be fair and reasonable and unanimously recommend that PFM
Shareholders accept the Offer, as they have irrevocably undertaken to do in
respect of their and their connected persons' beneficial holdings amounting to
8,194,017 PFM Shares, representing 37.0 per cent. of PFM's share capital. In
providing its advice, Williams de Broe has taken into consideration the
commercial assessments of the PFM Directors.



7.        Irrevocable Undertakings



In addition to the 3,305,537 PFM Shares already owned by Teesland (representing
approximately 14.9 per cent. of the existing issued share capital of PFM),
Teesland has received binding irrevocable undertakings to accept or procure the
acceptance of the Offer from the PFM Directors and certain other PFM
Shareholders in respect of holdings totalling 10,086,217 PFM Shares,
representing approximately 45.6 per cent. of PFM's existing issued share
capital.  In aggregate, Teesland either owns or has received irrevocable
undertakings to accept the Offer in respect of 13,391,754 PFM Shares,
representing approximately 60.5 per cent. of the existing issued share capital
of PFM.



Further details of these undertakings, including the extent to which
undertakings have been given to elect for the Cash Alternative, will be set out
in the Offer Document.



8.        Financing of the Cash Alternative



KBC Peel Hunt has agreed to procure persons to acquire for the 34,554,673 New
Teesland Shares at the Issue price to which PFM Shareholders who elect for the
Cash Alternative would otherwise be entitled (being the maximum number of Offer
Shares which would be issued if all holders of existing PFM Shares, other than
Teesland and those PFM Shareholders who have irrevocably undertaken to accept
the Offer and to receive Offer Shares as consideration, elected for the Cash
Alternative) or to the extent that it does not to do so, to subscribe itself for
the 34,554,673 Offer Shares.



KBC Peel Hunt has conditionally placed the 34,554,673 Offer Shares with
institutional investors (subject to clawback to the extent that PFM Shareholders
validly elect to receive Offer Shares rather than the Cash Alternative) at a
price of 65p per share, being the same price at which the Open Offer Shares are
being allotted.



The Placing Agreement is conditional upon the Offer being declared unconditional
in all respects (save only for the condition of the Offer relating to
Admission).



9.        Information on Teesland



Teesland is a property fund and asset manager specialising in indirect property
investment vehicles.



Teesland's business is primarily fee based, derived from launch and property
acquisition fees, annual and performance fees from the provision of fund and
asset management services, and from other property services.



Teesland's strategy is to grow the volume of funds it manages by promoting new
funds and by increasing the size of the funds that have already been
established.  It intends that the launch of new funds will enhance its quality
of income by both specialisation and diversification of client base.  In
addition, Teesland's strategy includes co-investment, from which it benefits
from income yield and capital growth generated by the underlying property
assets.



It is also important to the strategy of launching new funds that Teesland can
offer prospective investors the likelihood that their committed funds will be
invested without delay in assets of the targeted class and known investment
characteristics.  Teesland itself therefore uses its own capital, supplemented
with debt and mezzanine facilities provided by Bank of Scotland, to complete the
purchase of properties which are then held available to prospective investors.
Teesland describes this preliminary phase of fund formation as warehousing.



At 30 June 2004 Teesland had funds and assets under management with a value of
approximately #550 million.  The funds were Osprey, which owns mixed commercial
properties; Oystercatcher (residential properties); Frenchgate (a shopping
centre); Thorpe Park (a business park); UK Prime (student housing); TAPP (mixed
commercial property); and Thames Gateway (commercial property in a regeneration
area).



The assets for which Teesland provided property management services, were
Princes Square (retail, leisure and offices) and Sterling Mills (a factory
outlet).



In the year ended 30 June 2004, Teesland's turnover was #6.0 million (2003: #5.9
million); profit before goodwill amortisation was #2.7 million (2003: #2.3
million); and profit after tax was #1.5 million (2003: #1.1 million).  The Board
has recommended a final dividend of 1.7p per share.  The Directors have agreed
that future dividend payments will be based on dividends covered twice by
available earnings.



In March 2004 Teesland undertook a Placing and Open Offer which raised #12.1
million, net of expenses. Net assets as at 30 June 2004 were #22.0 million
(2003: #10.0 million).



10.       Information on PFM



PFM is the holding company of a European business specialising in establishing
and managing funds invested in industrial property. It has been appointed as
specialist property adviser or asset manager of seven funds, of which details of
the major six are set out below. As at 3 September 2004, the value of the
portfolios owned by these funds together with other properties managed by PFM
was approximately #1.05 billion.



The PFM Group has offices in London, Paris, Amsterdam, Copenhagen, Warsaw,
Berlin and Madrid.



Details of the major funds are:



The Industrial Trust

The Industrial Trust is an open-ended unauthorised unit trust which was
established for a term of 25 years from July 2001 to invest in UK multi-let
industrial property. As at 3 September 2004, the fund had a portfolio value of
approximately #166 million.



The Industrial Investment Partnership

The Industrial Investment Partnership is a UK limited partnership, which was
established in March 2004 to acquire multi-let industrial properties in the UK.
Unless the partners otherwise agree, the partnership will be dissolved on 1
March 2012. As at 3 September 2004, the fund had a portfolio value of
approximately #64 million.



The Industrial Development Partnership II

The Industrial Development Partnership II is a UK limited partnership,
closed-end fund, which was established for a term of 10 years from July 2000 to
acquire land for the development of new-build industrial estates in the UK known
as iO centres. As at 3 September 2004, the fund had a portfolio value of
approximately #85.5 million.



European Industrial Partnership

The European Industrial Partnership is a Luxembourg fonds commun de placement,
which was established in July 2001 for an initial period of 10 years to invest
in European multi-let industrial properties. As at 3 September 2004, the fund
had a portfolio value of approximately Euro492 million.



iBerind

iBerind Holland BV is a fund structured as a Dutch joint venture company, which
was established in May 2004 to develop multi-tenanted industrial estates in
Spain. IO Grupo Lar Grosvenor S.A., a 50:50 joint venture between Lar Grosvenor
S.A. and the PFM Group, has been appointed to provide asset management services
to the fund. As at 3 September 2004, the fund had a portfolio value of
approximately Euro13 million.



Euroind High Income Fund

The Euroind High Income fund was established in May 2004 for a term of 7 years.
It is a Dutch limited partnership structure investing in multi-let industrial
estates in France, Netherlands, Germany and Denmark. The fund raised Euro193
million of equity on its first closing, including Euro7.5 million committed by PFM
itself. As at 3 September 2004 the fund had a property portfolio of
approximately Euro116 million.



Other funds are being planned and, in October 2003, PFM has acquired a majority
interest in an established property asset manager based in Warsaw in order to
explore opportunities in Poland, Hungary and the Czech Republic. In the year
ended 31 December 2003 PFM's net turnover was #8.7 million and profit before
taxation was #826,000. Its equity shareholders' funds at that date were #8.9
million.



11.       PFM's interim results



PFM announced today its results for the 6 months to 30 June 2004. Turnover was
#5.57million (2003: #5.60 million) and loss before tax was #1.91 million (2003:
profit before tax of #0.01 million). Net assets as at 30 June 2004 were #7.66
million (2003: #6.82 million).



12.       Rationale for the Offer



The Teesland Directors believe that combining the businesses of Teesland and PFM
will offer shareholders in the Enlarged Group:



*             Additional industrial property expertise to complement Teesland's
existing expertise in the mixed commercial, residential and student housing,
shopping centre and leisure sectors.

*             An infrastructure of European offices, from which it is intended
that the Enlarged Group will launch funds in sectors reflecting Teesland's
strengths.

*             An extended client base: Teesland intends to market both existing
and new funds to PFM's European investors, and intends to offer European
property funds to private investors.

*             The opportunity for both Teesland's and PFM's development teams to
launch a new fund whose objectives will be exploitation of property development
and enhancement opportunities.

*             The likelihood of enhanced returns from applying Teesland's
warehousing and co-investment model to the Enlarged Group.

*             Critical mass, with funds under management likely to exceed #2.5
billion by 2006.



The Teesland Directors also believe that PFM's business will benefit from
Teesland's existing authorised fund management activity which is carried out by
its FSA regulated subsidiary, Equity Partnerships Fund Management.



Subject to the timely second closure of PFM's Euroind High Income Fund, the
Teesland Directors expect the acquisition of PFM to be earnings enhancing from
the outset.





13.       Teesland current trading and prospects



Teesland's principal aim is to build funds and assets under management and grow
the fee income from long term, recurring contracts.


The Teesland Directors expect that the key initiatives of the Teesland Group for
the current year will include:



*             the launch of the Thorpe Park Property Investment fund, for high
net worth private investors;

*             the launch of the TAPP fund, also for high net worth private
investors;

*             building the portfolio of student housing projects, so that the
fund can be opened to new investors in 2005;

*             further acquisitions for the Thames Gateway fund;

*             acquisitions for the Osprey fund;

*             subject to market conditions, opening the Oystercatcher fund to
further investors and adding to its portfolio; and

*             the launch of a warehouse fund to secure higher risk / higher
return opportunities from property development.

Trading in the first three months of the financial year has been satisfactory
and in line with the Teesland Board's expectations.  In accordance with the
initiatives described above, Teesland has:



*             committed #2m, being its share of the development cost of
approximately #10m, to a student housing development which will be held
available for the student housing fund to purchase at market value, upon
completion of the development scheduled for summer 2005;

*             agreed to acquire over #27m of mixed commercial property, mainly
retail warehousing, for the TAPP fund with further property currently under
offer at a value of approximately #17.6m;  and

*             entered into discussions with a view to acquiring #61 million of
stock for the Osprey fund.

At this early stage in Teesland's financial year, the Teesland Board considers
that progress on meeting the Company's objectives is satisfactory.



14.       Management and employees



John Sims, Chief Executive of PFM, has agreed to join the Teesland Board in an
executive capacity, conditional upon the Offer being declared unconditional in
all respects. The Teesland Board has given assurances to the PFM Board that the
existing employment rights, including pension rights, of all employees of PFM
will be fully safeguarded.



15.       Details of the Placing and Open Offer



Teesland is seeking to raise approximately #13 million (after deducting the
placing and underwriting commissions relating to the Placing and Open Offer) for
the purpose of supporting proposed co-investment in the second closing of PFM's
Euroind High Income Fund and in PFM's proposed Central European Investment Fund,
and in its UK funds. The proceeds will also be used to meet the cost of the
placing and underwriting commissions relating to provision of the Cash
Alternative and all other expenses of the Offer, including the expenses of PFM
and its advisers. KBC Peel Hunt, as agent on behalf of Teesland, will invite
Teesland Shareholders to apply under the Open Offer for 20,912,320 Open Offer
Shares at the Issue Price on the basis of:



7 Open Offer Shares               for every 19 Existing Teesland Shares



held by Teesland Shareholders at close of business on the Record Date, and so in
proportion for any other number of Existing Teesland Shares then held.



Entitlements of Qualifying Teesland Shareholders will be rounded down to the
nearest whole number of Open Offer Shares. Fractional entitlements which would
otherwise have arisen will not be allotted to Qualifying Teesland Shareholders.
Qualifying Teesland Shareholders may apply for any whole number of Open Offer
Shares up to their maximum entitlement, as set out on their Application Form.
Qualifying Teesland Shareholders with holdings of existing Teesland Shares in
both certificated and uncertificated form will be treated as having separate
entitlements under the Open Offer.



Certain Teesland Shareholders have undertaken not to take up their entitlements
to 7,676,618 Open Offer Shares under the Open Offer and those shares have been
placed firm by KBC Peel Hunt under the Placing. Further details of these
undertakings will be set out in the Prospectus.



The Open Offer Shares will be offered at the Issue Price to Qualifying Teesland
Shareholders validly applying for the same on a pre-emptive basis under the
terms of the Open Offer. Pursuant to the Placing Agreement (details of which
will be set out in the Prospectus), KBC Peel Hunt has agreed to place
conditionally with institutional and other investors, or, to the extent that it
does not do so, itself to subscribe for the Open Offer Shares which are not the
subject of undertakings to take up or valid applications made by Qualifying
Teesland Shareholders under the Open Offer, on the terms and subject to the
conditions set out in the Placing Agreement.



The Open Offer Shares will rank pari passu in all respects with the existing
Teesland Shares and the Offer Shares and will rank in full for dividends and
other distributions declared, made or paid after admission of the Open Offer
Shares to the Official List and to trading on the London Stock Exchange's market
for listed securities in respect of the ordinary share capital of Teesland save
in respect of the final dividend declared by Teesland on 8 September 2004 for
its financial year ending 30 June 2004 and having a record date of 24 September
2004 which shall only be payable in respect of existing Teesland Shares.


Application may only be made on the Application Form, which is personal to the
Qualifying Shareholder(s) named therein and may not be assigned, transferred or
split except to satisfy bona fide market claims. Qualifying Teesland
Shareholders who have sold or transferred all or part of their registered
holdings are advised to consult their stockbroker, bank or other agent through
or by whom the sale or transfer was effected as soon as possible since the
benefits arising under the Open Offer may be claimed from them by purchasers
under the rules of the London Stock Exchange.



16.       The Offer Document and Prospectus



The Offer Document containing the full terms and conditions of the Offer,
together with the Form of Acceptance and a copy of the Prospectus, is expected
to be despatched to PFM Shareholders on or around 29 September 2004.



The Prospectus containing the full terms of the Placing and Open Offer, together
with the Application Form, is expected to be despatched to Teesland Shareholders
on or around 29 September 2004. The Prospectus will also contain the notice of
the EGM for the purposes of considering the necessary resolutions to implement
the Offer and the Placing and Open Offer.



17.       Overseas Shareholders



The availability of the Offer and/or the Cash Alternative to persons not
resident in the United Kingdom may be affected by the laws of the relevant
jurisdictions.  Persons who are subject to the laws of any jurisdiction other
than United Kingdom should inform themselves about, and observe, any applicable
requirements.  Further details in relation to Overseas Shareholders will be
contained in the Offer Document and the Form of Acceptance.



The Offer is not being made directly or indirectly, or into or by use of e-mails
of, or by any means or instrumentality (including, without limitation, facsimile
transmission, telex, telephone or e-mail) of interstate or foreign commerce of,
or any facilities of a national securities exchange of the United States,
Canada, Australia or Japan or any other jurisdictions if to do so would
constitute a violation of the relevant laws of such jurisdiction, and cannot be
accepted by any such use, means or instrumentality or facility from or within
the United States, Canada, Australia or Japan.



For Qualifying Teesland Shareholders with registered addresses in any territory
other than the UK and who have not given Teesland an address within the UK for
the service of notices, the offer to those Qualifying Teesland Shareholders will
be made solely by way of notice published in the Edinburgh Gazette and not
pursuant to the Prospectus or the Application Form and neither the Prospectus
nor the Application Form constitute or include any offer of Open Offer Shares in
respect of such Qualifying Teesland Shareholders.  However, such Qualifying
Teesland Shareholders will only be entitled to accept the Open Offer if the
Company is satisfied, in its absolute discretion, that such acceptance would not
contravene any applicable securities laws and that the transaction in question
is exempt from or not subject to the legislation or regulations giving rise to
the restrictions in question.



18.       General



The financial effects of acceptance of the Offer and the bases of these
calculations are set out in Appendix II. Certain terms issued in this
announcement are defined in Appendix III.



This announcement does not constitute an offer or invitation to purchase any
shares.



Enquiries:


Teesland plc
Mickola Wilson                                   020 7659 4709

British Linen Advisers
Richard Davies                                   020 7710 8800

KBC Peel Hunt
David Davies / Jonathan Marren                   020 7418 8900

Tavistock Communications
Jeremy Carey                                     020 7920 3150/07836 734 625

PFM plc
Glyn Hirsch                                      020 7535 1818

Williams de Broe Plc
Jonathan Gray / James Maxwell                    020 7588 7511

Baron Phillips Associates
Baron Phillips                                   020 7920 3161/07050 124 119



The Teesland Directors accept responsibility for the information contained in
this announcement other than the information relating to the PFM Group, the PFM
Directors, their immediate families and related trusts and persons connected
with the PFM Directors. To the best of the knowledge and belief of the Teesland
Directors (who have taken all reasonable care to ensure that such is the case),
the information contained in this announcement, 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 PFM Directors accept responsibility for the information contained in this
announcement relating to the PFM Group, the PFM Directors, their immediate
families and related trusts and persons connected with the PFM Directors. To the
best of the knowledge and belief of the PFM Directors (who have taken all
reasonable care to ensure that such is the case), the information contained in
this announcement, for which they accept responsibility, is in accordance with
the facts and does not omit anything likely to affect the import of such
information.



British Linen Advisers, which is authorised and regulated in the UK by the
Financial Services Authority, is acting exclusively as financial adviser for
Teesland and no-one else in connection with the Offer and the Placing and Open
Offer and will not be responsible to anyone other than Teesland for providing
the protections afforded to clients of British Linen Advisers nor for giving
advice in relation to the contents of this announcement or any other
arrangements referred to herein.  British Linen Advisers has approved this
announcement for the purpose of Section 21 of the Financial Services and Markets
Act 2000.



KBC Peel Hunt, which is authorised and regulated in the UK by the Financial
Services Authority, is acting exclusively as sponsor and stockbroker for
Teesland and no-one else in connection with the Offer and the Placing and Open
Offer and will not be responsible to anyone other than Teesland for providing
the protections afforded to clients of KBC Peel Hunt nor for giving advice in
relation to the contents of this announcement or any other arrangements referred
to herein.



Williams de Broe, which is authorised and regulated in the UK by the Financial
Services Authority, is acting exclusively for PFM and no-one else in connection
with the Offer and will not be responsible to anyone other than PFM for
providing the protections afforded to clients of Williams de Broe nor for giving
advice in relation to the contents of this announcement or any other
arrangements referred to herein.



Terms used in this summary shall have the meaning given to them in Appendix III
to the full announcement.



This announcement does not constitute an offer to sell or invitation to purchase
or subscribe for any securities or the solicitation of an offer to buy or
subscribe for any securities pursuant to the Offer or otherwise.  The Offer will
be made solely by the Offer Document and the Form of Acceptance accompanying the
Offer Document, which will contain the full terms and conditions of the Offer,
including details of how the Offer may be accepted.



The availability of the Offer and/or the Cash Alternative to persons not
resident in the United Kingdom may be affected by the laws of the relevant
jurisdictions.  Persons who are subject to the laws of any jurisdiction other
than United Kingdom should inform themselves about, and observe, any applicable
requirements.  Further details in relation to overseas PFM Shareholders will be
contained in the Offer Document and the Form of Acceptance.



The Offer is not being made, directly or indirectly, in or into, or by use of
e-mails of, or by means or instrumentality (including, without limitation,
facsimile transmission, telex, telephone or e-mail) of interstate or foreign
commerce of, or any facilities of a national securities exchange of the United
States, Canada, Australia of Japan or any other jurisdiction if to do so would
constitute the violation of the relevant laws of such jurisdiction, and cannot
be accepted by any such use, means or instrumentality or facility from or within
the United States, Canada, Australia or Japan.





Appendix I



Conditions and certain further terms of the Offer



PART A: Conditions of the Offer



1. Conditions of the Offer



The Offer is subject to the following conditions:



(a) valid acceptances being received (and not, where permitted, withdrawn) by
3.00 p.m. (London time) on the First Closing Date (or such later time(s) and/or
date(s) as Teesland may, subject to the rules of the City Code, decide), in
respect of not less than 53.6 per cent. (or such lesser percentage as Teesland
may decide) of the PFM Shares to which the Offer relates, provided that this
condition shall not be satisfied unless Teesland and/or its wholly owned
subsidiaries shall have acquired or agreed to acquire, whether pursuant to the
Offer or otherwise, PFM Shares carrying, in aggregate, more than 50 per cent. of
the voting rights then normally exercisable at general meetings of PFM,
including for this purpose (to the extent, if any, required by the Panel) any
such voting rights attaching to any PFM Shares that are unconditionally allotted
or issued before the Offer becomes or is declared unconditional as to
acceptances, whether pursuant to the exercise of any subscription rights,
conversion rights or otherwise. For the purposes of this condition:



(i)    the expression ''PFM Shares to which the Offer relates'' shall be
construed in accordance with sections 428 to 430F (inclusive) of the Act; and



(ii)   PFM Shares which have been unconditionally allotted shall be deemed to
carry the voting rights which they will carry on issue;



(b) the passing at an extraordinary general meeting of Teesland (or at any
adjournment thereof) of such resolution or resolutions as may be necessary to
approve, effect and implement or authorise the implementation of the Offer and
the Placing and Open Offer;



(c) the admission to the Official List of the Offer Shares (or such of them as
are due to be allotted at the time the Offer becomes or is declared
unconditional in all other respects) becoming effective in accordance with the
Listing Rules and the admission of such shares to trading on the London Stock
Exchange's market for listed securities becoming effective or (if determined by
Teesland and subject to the consent of the Panel) the UK Listing Authority
agreeing to admit such shares to the Official List and the London Stock Exchange
agreeing to admit such shares to trading subject only to (i) the allotment of
such shares and/or (ii) the Offer becoming or being declared unconditional in
all respects;



(d) no government or governmental, quasi-governmental, supranational, statutory
or regulatory or investigative body or trade agency, professional body,
association, institution or environmental body or any court or other body or
person whatsoever in any relevant jurisdiction (each a ''Relevant Authority'')
having instituted, implemented, or threatened, or having decided to take,
institute or threaten, any action, proceedings, suit, investigation, enquiry or
reference or having enacted, made or proposed any statute, regulation or order
or decision or taken any other steps and there not continuing to be outstanding
any statute, regulation, order or decision that would or might reasonably be
expected to:



(i)    make the Offer or the acquisition or proposed acquisition by Teesland or
any member of the Teesland Group of any PFM Shares, or the acquisition or
proposed acquisition by Teesland or any member of the Teesland Group of any
shares in or control of PFM, void, unenforceable or illegal or directly or
indirectly restrict, prohibit, materially delay or otherwise interfere with the
implementation of, or impose material additional conditions or obligations with
respect to, or otherwise challenge the Offer or the acquisition of any PFM
Shares or the acquisition of control of PFM or otherwise require material
amendment to the terms of the Offer in each case in a manner which is material
in the context of the Offer;



(ii)   require or prevent or materially delay a divestiture by any member of the
Teesland Group of any PFM Shares;



(iii)  require or prevent or materially delay the divestiture or alter the terms
of any proposed divestiture by any member of the Wider Teesland Group or by the
Wider PFM Group of all or any substantial part of their respective businesses,
assets or property or impose any material  limitation on the ability of any of
them to conduct all or any portion of their respective businesses or to own all
or any portion of their respective assets or property to an extent which in each
case would be material in the context of the Wider PFM Group taken as a whole or
the Wider Teesland Group taken as a whole, as appropriate;



(iv)  impose any material limitation on the ability of the Wider Teesland Group
or of the Wider PFM Group to acquire or hold or to exercise effectively,
directly or indirectly, all or any rights of ownership in respect of shares or
loans or securities convertible into shares or the equivalent in any member of
the Wider PFM Group or the Wider Teesland Group respectively or to exercise
management control over any such member to an extent which is material in the
context of the Wider Teesland Group taken as a whole or, as the case may be, the
Wider PFM Group taken as a whole;



(v)   other than pursuant to the Offer require any member of the Wider Teesland
Group or any member of the Wider PFM Group to offer to acquire directly or
indirectly any shares in any member of the Wider PFM Group owned by any third
party, such acquisition being material in the context of the Wider PFM Group
taken as a whole; or



(vi)  affect materially and adversely the business, assets, profits or prospects
of any member of the Wider Teesland Group or any member of the Wider PFM Group
to an extent which is material in the context of respectively the Wider Teesland
Group taken as a whole or the Wider PFM Group taken as a whole;



and all applicable waiting and other time periods during which any such Relevant
Authority could decide to take, institute, implement or threaten any such
action, proceedings, suit, investigation, enquiry or reference under the laws of
any relevant jurisdiction having expired, lapsed or been terminated;



(e) all necessary filings having been made in respect of the Offer and all
required authorisations, orders, grants, recognitions, confirmations, consents,
clearances, licences, permissions, exemptions and approvals (''authorisations'')
material and necessary or appropriate or required for or in respect of the Offer
or the proposed acquisition of all or any shares in, or control of, PFM by the
Teesland Group having been obtained on terms and in a form reasonably
satisfactory to Teesland from all appropriate Relevant Authorities with whom any
member of the Teesland or PFM Group has entered into contractual arrangements,
in each case where the absence of such would have a material adverse effect on
the Wider Teesland Group taken as a whole or the Wider PFM Group taken as a
whole, as the case may be, and all such authorisations remaining in full force
and effect at the time at which the Offer  becomes otherwise unconditional in
all respects (save only as regards satisfaction of the condition of the Offer
relating to Admission) and no intimation or notice of any intention to revoke,
suspend, restrict, modify or not renew any of the same having been received in
each case where the absence of such authorisation would have a material adverse
affect on the Wider Teesland Group or the Wider PFM Group taken as a whole and
all necessary filings having been made and all appropriate waiting periods
(including any extension thereof) under any applicable legislation and
regulations in any jurisdiction having expired, lapsed or been terminated, in
each case as may be necessary in connection with the Offer or the proposed
acquisition of all or any shares in, or control of PFM, by the Teesland Group
under the laws or regulations of any relevant jurisdiction and all necessary
statutory or regulatory obligations in any relevant jurisdiction having been
complied with in connection with the Offer or the proposed acquisition of all or
any shares in, or control of, PFM by the Teesland Group;



(f) save as Disclosed, there being no provision of any agreement, arrangement,
licence, permit or other instrument to which any member of the Wider PFM Group
is a party or by or to which any such member or any of their assets may be
bound, entitled or be subject which, as a direct result of the acquisition by
the Teesland Group of the PFM Shares or any of them, or change in the management
or control of PFM or the acquisition of control of PFM by the Teesland Group
will, or might reasonably be expected to, result in:



(i)    any material amount of moneys borrowed by, or any other material
indebtedness (actual or  contingent) of any such member being or becoming
repayable or capable of being declared  repayable immediately or earlier than
the repayment date stated in such agreement, arrangement, licence, permit or
other instrument, or the ability of any such member to borrow monies or incur
any material indebtedness being withdrawn or inhibited;



(ii)   any such agreement, arrangement, licence, permit or other instrument
being or becoming capable of being terminated or materially and adversely
modified or affected or any onerous obligation arising or any adverse action
being taken or arising thereunder;



(iii)  the interests or business of any such member in or with any other person,
firm, company or body (or any arrangements relating to such interests or
business) being terminated, modified or materially and adversely affected;



(iv)  any assets of any such member 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 other than in the ordinary course of
trading;



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



(vi)  the financial or trading position or prospects of any such member being
prejudiced or materially and adversely affected;



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



(viii) the creation of any material liabilities by any such member;



in each case, which will or might reasonably be expected to have a material
adverse affect on the Wider PFM Group, taken as a whole;



(g) save as Disclosed, no member of the Wider PFM Group having since 31 December
2003 (save as between members of the Wider PFM Group):



(i)    issued or authorised or proposed the issue of additional shares of any
class, or securities convertible into or exchangeable for, or rights, warrants
or options to subscribe for or acquire, any such shares or securities or
redeemed, purchased or reduced any part of its share capital;



(ii)   recommended, declared, paid or made or proposed to declare, pay or make
any bonus, dividend or other distribution in respect of the share capital of
PFM;



(iii)  merged with any body corporate or authorised or announced any intention
to propose any merger, demerger, acquisition, disposal, transfer, mortgage or
charge of or granting of any security over assets or shares (otherwise than in
the ordinary course of business);



(iv)  authorised or proposed or announced its intention to propose any change in
its share or loan capital other than in the ordinary course of business;



(v)   announced any proposal to purchase any of its own shares or purchased any
such shares;



(vi)  issued, authorised or proposed the issue of any debentures or (save in the
ordinary course of business) incurred or increased any indebtedness or become
subject to any contingent liability;



(vii)  entered into any contract or commitment (whether in respect of capital
expenditure or otherwise) which is of a long term or unusual nature or which
involves or might reasonably be expected to involve an obligation of a nature or
magnitude which is material in the context of the Wider PFM Group taken as a
whole;



(viii) entered into any contract, transactions or arrangement which would be
restrictive on the business of any member of the PFM Group and which would have
a material adverse effect on the business of the Wider PFM Group taken as a
whole;



(ix)  entered into or varied the terms of any service agreement with any of the
directors of  PFM;



(x)   acquired, disposed of or transferred, mortgaged or charged or encumbered
or created any security interest over any asset or any right, title or interest
in any asset (including, without limitation, shares and trade investments) or
entered into any contract, reconstruction, amalgamation, commitment or other
transaction or arrangement in each case which is  otherwise than in the ordinary
course of business and which would have a material adverse affect on the
business of the Wider PFM Group taken as a whole;



(xi)  waived or compromised any claim which is material otherwise than in the
ordinary course of business;



(xii)  proposed any voluntary winding up or taken any corporate action or had
any order made for its winding-up, dissolution or reorganisation or for the
appointment of a receiver, administrator, administrative receiver, trustee or
similar officer of all or any of its assets and revenues other than in respect
of a member which was solvent at the relevant time; or



(xiii)            entered into any contract, commitment or agreement to, or
passed any resolution to effect any of the transactions or events referred to in
this paragraph (g);



in each such case, unless otherwise stated, which is material in the context of
the Wider PFM Group taken as a whole;



(h) since 31 December 2003, and save as Disclosed:



(i)    no adverse change in the business, financial or trading position or
profits or prospects of the Wider PFM Group taken as a whole; and



(ii)   no contingent liability having arisen which would or might reasonably
affect materially and  adversely the Wider PFM Group taken as a whole;



(i) since 31 December 2003, and save as Disclosed, no litigation, arbitration
proceedings, prosecution or other legal proceedings having been instituted or
threatened by or against or remaining outstanding against any member of the
Wider PFM Group or to which any member of the Wider PFM Group is party (whether
as plaintiff or defendant or otherwise) and which, in any case, is or might
reasonably be expected to materially and adversely affect the Wider PFM Group
taken as a whole; and



(j) Teesland not having discovered:



(i)    that any, financial or business or other information concerning the PFM
Group which has been publicly disclosed at any time by any member of the PFM
Group is materially misleading, contains a material misrepresentation of fact or
omits to state a fact necessary to make the information contained therein not
materially misleading or that any  contingent liability disclosed in such
information would or might materially and adversely affect the business, assets,
financial position, profits or prospects of the Wider PFM Group and which was
not, if material, corrected by subsequent public announcement made before 24
September 2004; or



(ii)   that any member of the Wider PFM Group not being a subsidiary undertaking
of PFM is subject to any liability, contingent or otherwise, which is or might
reasonably be expected to be material in the context of the Wider PFM Group
taken as a whole, and which has not been Disclosed.



Teesland may waive all or any of the conditions in sub-paragraphs (d) to (j), in
whole or in part.



If Teesland is required by the Panel to make an offer for PFM Shares under the
provisions of Rule 9 of the City Code, Teesland may make such alterations to the
above conditions, including condition (a) as are necessary to comply with the
provisions of that Rule.



The Offer will lapse unless the conditions set out above (other than condition
(a)) are fulfilled or (if capable of waiver) waived no later than midnight on
the 21st day after whichever is the later of the First Closing Date and the date
on which the Offer becomes or is declared unconditional as to acceptances, or
such later date as the Panel may agree. Teesland shall be under no obligation to
waive or treat as fulfilled any of the conditions in sub-paragraphs (d) to (j)
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 on such earlier date there
are no circumstances indicating that any of such conditions may not be capable
of fulfilment.



The Offer will lapse if the acquisition of PFM is referred to the Competition
Commission before 3.00 p.m. (London time) on whichever is the later of the First
Closing Date and the date on which the Offer becomes or is declared
unconditional as to acceptances, or such later date as the Panel may agree.



In the event that the Offer lapses, the Offer will cease to be capable of
further acceptance and persons accepting the Offer and Teesland shall thereupon
cease to be bound by acceptances delivered on or before the time when the Offer
so lapses.



For the purposes of these conditions, (i) the "Wider PFM Group" means PFM, its
subsidiaries, subsidiary undertakings and associated undertakings and any other
body corporate, partnership or joint venture or person in which PFM and such
undertakings (aggregating their interests) have an interest of more than 20 per
cent. in the voting or equity capital (or the equivalent) and (ii) the "Wider
Teesland Group" means Teesland, its subsidiaries, subsidiary undertakings and
associated undertakings and any other body corporate, partnership or joint
venture or person in which Teesland and such undertakings (aggregating their
interests) have an interest of more than 20 per cent. in the voting or equity
capital (or the equivalent).





PART B: Further conditions of the Offer



The Offer is not being and will not be made, directly or indirectly in, or into,
or by use of the mails of, or by any means or instrumentality (including,
without limitation, facsimile transmission, telex or telephone) of interstate or
foreign commerce of, or any facilities of a national securities exchange of the
United States, Canada, Australia or Japan and the Offer cannot be accepted by
any such use, means or instrumentality of from within the United States, Canada,
Australia or Japan.



The Offer extends to any PFM Shareholders not resident in the United Kingdom to
whom the Offer Document, the Prospectus, the Form of Acceptance or any related
documents may not be despatched and such PFM Shareholders may collect copies of
these documents from British Linen Advisers Limited, 8 Fredericks Place, London
EC2R 8HY.  Teesland and British Linen Advisers reserve the right to notify any
matter to all or any of PFM Shareholder(s) with (a) registered address(es)
outside the United Kingdom or whom Teesland knows to be (a) nominee(s) holding
PFM Shares for persons who are citizens, residents or nationals of jurisdictions
outside the United Kingdom by announcement in the United Kingdom or paid
advertisement in a newspaper published and circulated in the United Kingdom, in
which event such notice shall be deemed to have been sufficiently given,
notwithstanding any failure by any such shareholder(s) to receive such notice.



The PFM Shares will be acquired under the Offer free from all liens, equities,
charges, encumbrances and any other interests together with all rights attaching
thereto, including the right to receive all dividends and other distributions,
if any, declared, made or paid after 24 September 2004 (being the date of this
announcement).





Appendix II



Financial effects of acceptance



The following table sets out, for illustrative purposes only, and on the bases
and assumptions set out in the notes below, the financial effects of acceptance
of the Offer on the capital value and gross income if the Offer becomes or is
declared unconditional in all respects for a holder of 1,000 PFM Shares who
either accepts the Offer in full or makes the maximum election for the Cash
Alternative:


                                                                                    Offer                      Cash

                                                          Notes                                         Alternative
                                                                                      (#)                       (#)
(a) Capital value
Market value of 2,308 Offer Shares                        (i)                    1,557.90                         -
Value of the Cash Alternative                                                           -                  1,500.20
Market value of 1,000 PFM Shares                          (ii)                   1,035.00                  1,035.00
Increase in capital value                                                          522.90                    465.20
This represents an increase of                                                      50.5%                     44.9%

(b) Income
Gross dividend income on 2,300 Offer Shares               (iii)                     43.60                         -
Gross interest income on #1,500.20 cash                   (iv)                          -                     71.26
Gross dividend income from 1,000 PFM Shares               (v)                       22.22                     22.22
Increase in gross income                                                            21.38                     49.04
This represents an increase of                                                      96.2%                    220.7%




Notes:

(i)      The market value of 2,308 Offer Shares is based on the Closing Price of
67.5p for each Teesland Share on 24 September 2004 (being the last Business Day
immediately preceding the announcement of the Offer).

(ii)    The market value of 1,000 PFM Shares is based on the Closing Price of
103.5p for each PFM Share on 18 August 2004 (being the last Business Day
immediately preceding the commencement of the Offer Period).

(iii)   The gross dividend income from 2,308 Offer Shares is based on the net
dividends declared in respect of the year ended 30 June 2004 of 1.7p per
Teesland Share (excluding the special interim dividend of 1.7p).

(iv)   The cash consideration is assumed to be reinvested so as to yield 4.75
per cent. per annum, being the Government Securities Index average gross
redemption yield for medium coupon UK gilts of maturities of up to five years as
obtained from the Financial Times dated 24 September 2004, being the last
Business Day immediately preceding the announcement of the Offer.

(v)     The gross dividend income from 1,000 PFM Shares is based on the net
dividends declared in respect of the year ended 31 December 2003 of 2p per PFM
Share (2p interim dividend, nil final dividend).

(vi)   No account has been taken of any fractions or, save as stated in notes
(iii) and (v), of any potential liability to taxation.







Appendix III



Definitions



The following definitions apply throughout this announcement unless the context
otherwise requires:


"Act"                                        the Companies Act 1985


"Admission"                                  the admission of Offer Shares to the Official List becoming
                                             effective in accordance with the Listing Rules and dealings
                                             in them commencing on the London Stock Exchange's market for
                                             listed securities


"Application Form"                           the application form relating to the Open Offer being sent
                                             to Qualifying Teesland Shareholders with the Prospectus;


"Australia"                                  the Commonwealth of Australia, its states, territories and
                                             possessions


"British Linen Advisers"                     British Linen Advisers Limited


"Business Day"                               a day, other than a Saturday or a Sunday, on which clearing
                                             banks are generally open for business in the UK


"Canada"                                     Canada, its provinces and territories and all areas subject
                                             to its jurisdiction and any political sub-division thereof


"Cash Alternative"                           the alternative under which PFM Shareholders who validly
                                             accept the Offer may elect to receive 150p in cash in lieu
                                             of the Offer Shares to which they would otherwise be
                                             entitled under the Offer on the terms set out in this
                                             announcement and the Offer Document and accompanying Form of
                                             Acceptance


"Cash Underpinning"                          the conditional placing by KBC Peel Hunt of 34,554,673 of
                                             the Offer Shares in accordance with the Placing Agreement


"City Code"                                  the City Code on Takeovers and Mergers


"Closing Price"                              the closing middle market price of a Teesland Share or a PFM
                                             Share, as the context requires, as derived from the Daily
                                             Official List


"Daily Official List"                        the Daily Official List of the London Stock Exchange


"Disclosed"                                  in relation to PFM, means as disclosed in PFM's annual
                                             report and accounts for the year ended 31 December 2003 or
                                             interim report and accounts for the six months ended 30 June
                                             2004, as publicly announced by PFM prior to 27 September
                                             2004 as disclosed in this announcement, or else otherwise
                                             disclosed in writing prior to 27 September 2004


"Enlarged Group"                             Teesland or the Teesland Group (as the context requires) as
                                             enlarged by the combination with PFM


"EGM"                                        the extraordinary general meeting of Teesland Shareholders
                                             to be held on or around 14 October 2004 or at any
                                             adjournment thereof, notice of which will be contained in
                                             the Prospectus


"First Closing Date"                         the date following 21 days after posting of the Offer
                                             Document


"Form of Acceptance"                         the form of acceptance, authority and election for use in
                                             connection with the Offer


"FSA"                                        the Financial Services Authority


"Issue Price"                                65p per New Teesland Share


"KBC Peel Hunt"                              KBC Peel Hunt


"Listing Rules"                              the rules and regulations made by the UK Listing Authority
                                             under the Financial Services and Markets Act 2000 and
                                             contained in the UK Listing Authority's publication of the
                                             same name


"London Stock Exchange"                      London Stock Exchange plc


"New Teesland Shares"                        Offer Shares and Open Offer Shares


"Offer"                                      the recommended offer to be made by British Linen Advisers
                                             on behalf of Teesland to acquire the PFM Shares which it
                                             does not already own, subject to the terms and conditions
                                             set out in this announcement, the Offer Document and the
                                             accompanying Form of Acceptance and, where the context so
                                             requires, any subsequent revision, variation, extension or
                                             renewal thereof


"Offer Document"                             the offer document to be posted to PFM Shareholders on or
                                             around 29 September 2004 setting out the terms of the Offer


"Offer Period"                               the period commencing on 19 August 2004 and ending on
                                             whichever is the later of (i) 3.00 p.m. on the First Closing
                                             Date, (ii) the time and date on which the Offer lapses; and
                                             (iii) the time and date on which the Offer becomes or is
                                             declared unconditional as to acceptances


"Offer Shares"                               43,435,078 new Teesland Shares to be allotted pursuant to
                                             the Offer


"Official List"                              the official list of the UK Listing Authority


"Open Offer"                                 the conditional invitation by KBC Peel Hunt on behalf of
                                             Teesland to Teesland Qualifying Shareholders to apply for
                                             New Teesland Shares on the terms and conditions set out in
                                             the Prospectus and the accompanying application form


"Open Offer Shares"                          20,912,320 new Teesland Shares the subject of the Open Offer
                                             which have been conditionally placed by KBC Peel Hunt in
                                             accordance with the Placing Agreement


"Overseas Shareholders"                      PFM Shareholders who are resident in countries other than
                                             the UK or who have a registered address in countries other
                                             than the UK


"Panel"                                      The Panel on Takeovers and Mergers


"Placing"                                    the conditional placing by KBC Peel Hunt of the 55,466,993
                                             New Teesland Shares, subject in the case of Open Offer
                                             Shares, to clawback to satisfy valid elections by Teesland
                                             Qualifying Shareholders and, in the case of Offer Shares, to
                                             reduction depending upon the level of valid elections for
                                             the Cash Alternative


"Placing Agreement"                          the conditional agreement dated 24 September 2004 in
                                             connection with the Placing and Open Offer and the Cash
                                             Underpinning made between Teesland and KBC Peel Hunt, the
                                             principal terms of which will be summarised in the
                                             Prospectus


"PFM" or the "Company"                       Property Fund Management plc


"PFM Directors" or "PFM Board"               the existing directors of PFM


"PFM Group"                                  PFM, its subsidiary undertakings and the PFM Joint Ventures


"PFM Joint Ventures"                         iO Management Germany GmbH, iO Grupo Lar Grosvenor
                                             Management S.A., iOG Property Management LLP and Ascent
                                             Insurance Brokers Limited


"PFM Ordinary Shares" or "PFM Shares"        the unconditionally allotted and issued fully paid ordinary
                                             shares of 5 pence each in the capital of PFM and any further
                                             such ordinary shares which are unconditionally allotted or
                                             issued at or before the time at which the Offer ceases to be
                                             open for acceptance (or such earlier date or time not being
                                             earlier than the date on which the Offer becomes or is
                                             declared unconditional as to acceptances or, if later, the
                                             first closing date of the Offer, as Teesland may, subject to
                                             the City Code, decide) including such further ordinary
                                             shares of PFM as may be unconditionally allotted or issued
                                             pursuant to the exercise of options under any PFM Share
                                             Option Schemes or otherwise


"PFM Shareholders"                           holders of PFM Shares


"PFM Share Option Schemes"                   the existing share option schemes of PFM, details of which
                                             will be contained in the Offer Document


"Prospectus"                                 the document to be posted to PFM Shareholders and Teesland
                                             Shareholders on or around 29 September 2004  comprising (i)
                                             a prospectus relating to Teesland and the New Teesland
                                             Shares to be issued under the Offer, the Placing and the
                                             Open Offer and (ii) a circular in connection with the Offer


"Qualifying Teesland Shareholders"           those holders of Teesland Shares on the register of members
                                             of Teesland at the close of business on 24 September 2004


"Record Date"                                24 September 2004


"subsidiary" or "subsidiary undertaking"     have the meanings given to them by the Act


"Teesland"                                   Teesland plc


"Teesland Directors"                         the existing directors of Teesland

or "Teesland Board"


"Teesland Group"                             Teesland plc and its subsidiaries


"Teesland Shareholders"                      the registered holders of Teesland Shares


"Teesland Shares"                            ordinary shares of 1 penny each in the capital of Teesland


"United Kingdom" or "UK"                     the United Kingdom of Great Britain and the province of
                                             Northern Ireland and its territories and crown dependencies


"UK Listing Authority"                       the Financial Services Authority acting in its capacity as
                                             competent authority for the purposes of Part VI of the
                                             Financial Services and Markets Act 2000


"US", "USA" or "United States"               the United States of America, its territories and
                                             possessions, any state of the United States and the District
                                             of Columbia and all other areas subject to its jurisdiction


"Williams de Broe"                           Williams de Broe Plc, financial adviser to PFM








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