BEP Bourne End Prop

RNS No 4041h
BOURNE END PROPERTIES PLC
21 October 1999


                         BOURNE END PROPERTIES PLC

          Proposed sale of subsidiaries and cancellation of shares
                                   and
      Proposed reduction of share premium account (together the "Proposals")

                          TRANSACTION HIGHLIGHTS

-  Bourne End Properties Plc ("Bourne End" or the "Company") announces that it
   has reached   agreement with a company connected with Leo Noe and his      
   family trusts (the "Noe Interests") involving:

    -  Proposed transfer from Bourne End of a property portfolio with a       
       total value of #71.3m

    -  Proposed transfer of debt liabilities with an estimated market value of
       #72.4m

    -  Proposed cancellation of 8,436,131 Bourne End ordinary shares held by  
       the Noe Interests, representing 12.1% of the issued share capital

-  The Directors believe that the above proposals will have the following     
   benefits for Bourne End:

    -  Significant positive effect on FRS 13 adjusted net asset value

    -  Removal of the Norwich Union Debenture Loan, without any early         
       redemption penalties

    -  Reduction in gearing from 247% to 210%

    -  Increase in the Company's retail focus - 72% by value of the remaining 
       portfolio comprises shopping centres

    -  Increased prospects for growth in net asset value per share from the   
       retained portfolio

    -  A positive impact on earnings per share

-  The transaction is conditional, inter alia, on shareholder approval and the
   consent of the High Court.  A circular to shareholders will be posted      
   shortly.

Commenting on the Proposals, Mick Newmarch, Non-executive Chairman, said:

" We believe these proposals will enhance the company's potential for net
asset and earnings growth through the total elimination of the expensive
Norwich Union Debenture.  At the same time it represents a further step in our
objective of being a highly focused investor in shopping centres and larger
retail properties."

Enquiries:

Bourne End                                                       0171 631 4500
David Roberts, Chief Executive
Duncan Bain, Finance Director 

Credit Suisse First Boston                                       0171 888 8888
Henry Lloyd

Baron Phillips Associates                                        0171 224 1302
Baron Phillips 

Credit Suisse First Boston (Europe) Limited is acting exclusively for Bourne
End Properties Plc and no one else in connection with the transaction and will
not be responsible to anyone other than Bourne End Properties Plc for
providing the protections afforded to customers of Credit Suisse First Boston
(Europe) Limited or for giving advice in relation to the Proposals.
              
 

                           BOURNE END PROPERTIES PLC

           Proposed sale of subsidiaries and cancellation of shares
                                      and
    Proposed reduction of share premium account (together the "Proposals")



Introduction

Bourne End Properties Plc ("Bourne End" or the "Company") today announces that
it has reached agreement with a company connected with Leo Noe and his family
trusts (the "Noe Interests") for the sale to that company of certain
subsidiaries of the Company (the "Transfer") in consideration for the
cancellation of the remaining 8,436,131 ordinary shares of 25p each in the
capital of the Company ("Ordinary Shares") held by the Noe Interests. 
 
In summary, Bourne End is proposing to:

-  transfer to the Noe Interests its investment in certain subsidiaries (the  
   "Sale Companies") which own properties valued at #71.3 million subject to  
   debt liabilities with an estimated market value of #72.4 million calculated
   in accordance with Financial Reporting Standard 13 ("FRS 13") (face value  
   of #57.3 million); and

-  cancel 8,436,131 Ordinary Shares held by the Noe Interests.  The market    
   value of these shares is #3.6 million (by reference to the middle market   
   quotation as derived from the Daily Official List of the London Stock      
   Exchange at the close of business on 20 October 1999 of 42.5 pence).

It is proposed that the cancellation of the Noe Interests' Ordinary Shares
will be effected by means of a Scheme of Arrangement under section 425 of the
Companies Act 1985 (the "Scheme of Arrangement").  The Company is also
proposing a reduction in its share premium account to enable it to eliminate
certain losses arising from the Transfer.  Following the Transfer, the Noe
Interests will not own or be interested in any Ordinary Shares.  Furthermore,
the Noe Interests have undertaken not to acquire any Ordinary Shares or
interests in Ordinary Shares for a period of twelve months following
completion of the Transfer.

As a result of the size of the transaction and as it is with substantial
shareholders in Bourne End, shareholder approval will be sought at an
Extraordinary General Meeting.  Shareholder approvals will also be required in
order to effect the Scheme of Arrangement and reduction in share premium
account.

Credit Suisse First Boston (Europe) Limited is advising Bourne End on the
transaction.


Background to, and reasons for, the Proposals

In September 1996, Bourne End entered into a #66.9 million Debenture Loan with
Norwich Union Mortgage Finance ("Norwich Union") due September 2016 (the
"Debenture Loan"), carrying an annual interest rate of 9.8 per cent. payable
quarterly in arrears.  This consolidated eleven separate Norwich Union loans
of varying maturities and interest rates.  The effect of the Debenture Loan
was to reduce the average interest rate of the company's borrowings from 10.26
per cent. to 9.8 per cent. per annum and to extend the average maturity by
seven years. 

In November 1997, #9.7 million of the Debenture Loan was assumed by Leo Noe's
family trusts as part of the consideration for the transfer by the Company of
a portfolio of properties worth #28.2 million.  At the same time, 11,873,333
Ordinary Shares were bought back from interests associated with Leo Noe.  This
reduced the Noe Interests' shareholding in Bourne End from 29.1 per cent. to
14.6 per cent. of the Ordinary Shares and at the same time Leo Noe resigned
from the Board.  The Noe Interests have since been reduced to 12.1 per cent.
as a result of issues of Ordinary Shares made by the Company over the past two
years. Following the completion of the Proposals announced today, the Noe
Interests will not own or be interested in any Ordinary Shares.

The Directors believe that the cost of the Debenture, when compared with the
cost of raising similar financing in the current market, has become expensive
reflecting the fall in the benchmark gilt yield since September 1996, from 8.1
per cent. to 5.3 per cent. as at 20 October 1999.  FRS 13 requires companies
to illustrate in the notes to their report and accounts what the estimated
present market value of their debt would be, reflecting the difference between
current interest rates and the rates historically committed.  The Directors
estimated the market value, under FRS 13, of the Group's liability in respect
of the Debenture Loan on 30 June 1999 to be #75.1 million, some #17.8 million
more than its face value.  The impact of FRS 13 on the balance sheet of the
Company as at 30 June 1999 was to reduce reported net asset value per share
from 88.2 pence to 61.8 pence.  The Directors believe that this has had an
adverse impact on the share price which at the close of business on 20 October
1999 stood at a 51.8 per cent. discount to reported net asset value per share
as at 30 June 1999.  

Following completion of the Proposals, the pro forma net asset value per share
as at 30 June 1999 would be 75.4 pence before taking into account any change
in the value of the remaining property assets since 30 June 1999.  The
Directors estimate that the impact of FRS 13 on the value of the remaining
debt in Bourne End would not currently result in a reduction in the reported
net asset value per share.

The properties owned by the Sale Companies which secure the Debenture Loan
are:

-  Clock Towers Shopping Centre, Rugby which was originally purchased in April
   1997 for #16.5 million (the finance for which was provided by Norwich      
   Union).  Since then, the Group has applied its management skills to        
   increase rental income and reduce the amount of vacant space.  The property
   is now valued by DTZ Debenham Thorpe at #25.75 million, representing an    
   increase of 56 per cent on Bourne End's total historical cost of #18.0     
   million, including subsequent capital expenditure;

-  six secondary regional office properties valued in aggregate by DTZ        
   Debenham Thorpe at #32.4 million; and

-  nine small mixed use units valued in aggregate by DTZ Debenham Thorpe at   
   #13.17 million.

In summary, the Directors believe that the overall benefits to the Company of
these Proposals are:

-  a significant positive effect on FRS 13 adjusted net asset value (at       
   current gilt yields);

-  the removal, in its entirety, of the Debenture Loan, without incurring any 
   early redemption penalties, which would otherwise be significant.          
   Following the Proposals, and based on current interest rates, the Company's
   negative FRS 13 adjustment will be eliminated in its entirety;

-  the disposal in one transaction of a significant portfolio of properties   
   which do not fit with the Company's ongoing strategy or have been          
   successfully managed to extract the opportunities perceived at the time of 
   acquisition;

-  an increase in the proportion of the Company's assets invested in shopping 
   centres from 60 per cent. to 72 per cent. by value;

-  a reduction in the level of net borrowings as a percentage of net assets   
   from 247 per cent to approximately 210 per cent as at 30 June 1999; 

-  enhanced prospects for growth in net asset value per share from the        
   retained portfolio; and

-  a positive effect on earnings per share.


Details of the Proposals

Cancellation of Shares
The cancellation of the Ordinary Shares of the Noe Interests will be effected
pursuant to the Scheme of Arrangement, subject to the passing of the necessary
shareholder resolutions and the consent of the High Court.  Under the Scheme
of Arrangement the consideration for the cancellation will comprise the
transfer to Vivienne Properties Limited ("Vivienne Properties") (the Company
connected with the Noe Interests), at the direction of the Noe Interests, of
the whole of the issued share capital of the Sale Companies on the terms of,
and subject to the conditions in, an agreement between the Company and
Vivienne Properties Limited dated 21 October 1999 ("the Transfer Agreement").

The Transfer Agreement
The Transfer Agreement provides for the transfer to Vivienne Properties of the
whole of the issued share capital of the Sale Companies.  In addition to the
cancellation of the Noe Interests' Ordinary Shares, Vivienne Properties will
reimburse the Company through cash payments at completion for certain
expenditure made by the Company on behalf of the Sale Companies.   Also, a
cash payment will be made to reflect rental payments received and property and
interests costs paid during the quarter in which completion occurs.

The Transfer Agreement is conditional, inter-alia, on the Scheme of
Arrangement becoming effective, the reduction of the share premium account of
the Company becoming effective and the Company's shareholders (other than the
Noe Interests) (the "Independent Shareholders") approving the Transfer
Agreement.

Reduction of share premium account
The Directors estimate that the completion of the Transfer would give rise to
a loss, after transaction costs, in the accounts of the Company of
approximately #15.2 million.  The effect of this loss would be to reduce the
Company's distributable reserves to a deficit.  It is therefore proposed,
subject to the approval of the Independent Shareholders and the High Court,
that an amount of approximately #15.5 million standing to the credit of the
Company's share premium account (out of the total value of #26.9 million),
which is undistributable, will be cancelled.  An amount equal to the cancelled
amount will be transferred to a reserve for elimination of any losses arising
on the completion of the Transfer.  Any remaining balance on this reserve
after this elimination of losses will be deemed to be undistributable.  The
reduction in the share premium account and the Scheme of Arrangement will be
designed to become effective at the same time. 

Both the Scheme of Arrangement and the reduction of the share premium account
require the approval of Shareholders and subsequent confirmation by the
sanction of the High Court.

The Court will be concerned to protect the interests of the Company's
creditors and to achieve this the Company will make appropriate arrangements
to ensure that such creditors are adequately protected. 


Dividends 

Following the elimination of the loss arising on the Transfer, the Company
will have no available distributable reserves out of which to pay a final
dividend for the year ending 31 December 1999.  However, the Directors would
expect, in the absence of unforeseen circumstances and assuming adequate
distributable reserves, to announce with its results for the year ended 31
December 1999 its intention to pay a first interim dividend, payable in July
2000, in lieu of a final dividend.


Current trading and prospects

In the Company's interim statement of results for the six months ended 30 June
1999 announced on 18 August 1999, Mick Newmarch, Non-executive Chairman,
stated that:

"Our central strategy of concentrating our management team's efforts on the
assembly and intensive management of a focused core portfolio of "in town"
shopping centres is beginning to have a markedly beneficial impact on your
company's results.

I am confident that they (the interim results) demonstrate the validity of the
strategy we have been following in recent years.  I am also anxious to
emphasise the confirmation they offer for the quality of the management team
your company employs.  I believe that sound foundations have been laid for you
company's future success and, in particular, that the second half of 1999 will
demonstrate further solid progress."

Trading since 30 June 1999 continues to support this statement which the
Directors believe will be reflected in the property valuation at the year end.


Extraordinary General Meeting and Court Meeting

As a result of the size and nature of the Proposals and because they are with
substantial shareholders in the Company, the Proposals are conditional upon
the approval of Independent Shareholders at an Extraordinary General Meeting,
at which an ordinary resolution will be proposed to approve the entry by the
Company into the Transfer Agreement.  A special resolution will also be
proposed at the Extraordinary General Meeting to approve the Scheme and the
cancellation by the Company of the Ordinary Shares owned by the Noe Interests
in connection with the Scheme and the reduction in share premium account. 
Independent Shareholders will also be asked to approve the cancellation of the
Ordinary Shares held by the Noe Interests at a Court Meeting.

A circular containing further details of the Proposals and including notices
of the Extraordinary General Meeting and the Court Meeting to approve the
Scheme of Arrangement and an explanatory statement under section 426 of the
Companies Act 1985 is due to be posted to shareholders shortly.  The Noe
Interests have undertaken not to attend, and to abstain from voting at, the
Court Meeting but have undertaken to be bound by the Scheme of Arrangement in
respect of the Ordinary Shares held by them.

Credit Suisse First Boston (Europe) Limited is acting exclusively for Bourne
End Properties Plc and no one else in connection with the transaction and will
not be responsible to anyone other than Bourne End Properties Plc for
providing the protections afforded to customers of Credit Suisse First Boston
(Europe) Limited or for giving advice in relation to the Proposals.

END

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