RNS Number:4921O
Dunham-Bush (Europe) PLC
08 August 2003



Dunham-Bush (Europe) plc



Memorandum of Understanding


    The directors of Dunham-Bush (Europe) plc ('DBE') announce that DBE has
    today signed a Memorandum of Understanding ('MoU') which if implemented will
    be likely to lead to a change of control of the Company. The provisions of
    the MoU are subject to the final negotiation and exchange of definitive
    agreements which are now being prepared.


    The other parties to the MoU are Dunham-Bush (Cayman) Limited ('DBC') Dunham
    Bush (Malaysia) Berhad ("DBM") and European Industrial Acquisition
    Corporation of Delaware, USA ('EIAC').

    The MoU envisages, among other matters, that an option will be granted by
    DBC whereby, assuming its exercise, EIAC will acquire, for a total
    consideration of #1 (one pound sterling) the whole of DBC's holding in DBE,
    which constitutes 51% of DBE's issued share capital. A further option is
    also envisaged whereby EIAC will acquire for a total consideration of #1
    (one pound sterling) from DBM the indebtedness of approximately #1.3 million
    owed by DBE to DBM. Assuming exercise of the option, and subject to the
    approval of shareholders in DBE, this indebtedness will be converted into
    new ordinary shares in DBE constituting 20% of the thereby enlarged share
    capital, these shares to rank pari passu with the existing ordinary shares.
    At that time, an application will be made for these new shares to be
    admitted to the Official List of the London Stock Exchange.


    EIAC is established as a private limited liability company in the United
    States of America ("USA") and is affiliated to American Industrial
    Acquisition Corporation ("AIAC"). AIAC, through its operating affiliates,
    owns and manages a portfolio of manufacturing business in the USA and
    .Canada.


    The Panel on Takeovers and Mergers have been consulted and, having regard to
    the token consideration of #1 being paid for the 51% tranche held by DBC
    have indicated that it will grant a dispensation to EIAC from the obligation
    to make a cash offer to other shareholders which would otherwise arise under
    the provisions of the City Code.


    All the parties to the MoU undertake to use every reasonable endeavour to
    ensure that the ordinary share capital of DBE will continue to be traded on
    the Official List of the London Stock Exchange.


    A further announcement will be made upon the signing of the agreements
    giving effect to the MoU.




    Further information;


    Howard Drummon ( director - Dunham-Bush (Europe) plc). 020 7871 2232




    8th August 2003



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