RNS Number:2696R
Country & Metropolitan PLC
24 October 2003


                            Country & Metropolitan PLC



 Placing of 1,893,900 Firm Placing Shares and a 1 for 6 Open Offer of 3,156,621
                  Open Offer Shares to Qualifying Shareholders



For release on 24 October 2003


Country & Metropolitan plc ("C&M" or the "Company") announces that it proposes
to raise approximately #8.3 million (approximately #7.9 million net of expenses)
by an issue of 5,050,521 new ordinary shares ("New C&M Shares") (representing
approximately 26.7 per cent. of the Company's issued share capital) through a
placing and open offer at the Issue Price of 165p per New C&M Share ("Placing
and Open Offer"). The sponsor and financial adviser to the Company is Dawnay Day
Corporate Finance Limited; the broker is JM Finn & Co.


The Issue Price per New C&M Share represents a discount of 16.5p (approximately
9.1 per cent.) to the closing middle market price of 181.5p per C&M Share on 23
October 2003 (the latest practicable date prior to this announcement). The
Placing and Open Offer is not being underwritten.


Background and reasons for the Placing and Open Offer


In the present environment of political resistance to greenfield developments
both at local and national levels and general planning problems, acquiring
building land and obtaining planning consent takes time and is subject to strong
competitive pressure from other developers. The Board believes that its skills
in land acquisition and its in-depth understanding of the planning process have
formed the basis of Country & Metropolitan's achievements to date. In order to
make best use of these strengths and to improve its growth prospects without
exposing itself to excessive financial gearing, the C&M Group wishes to raise
additional equity capital.


The Placing and Open Offer will raise approximately #7.9 million (net of
expenses), addresses this requirement and, as described above, will provide
additional working capital for increased low cost housing and mixed use
developments as well as for expanding the C&M Group's land bank. While it is not
possible to be specific about the precise allocation of the net proceeds of the
Placing and Open Offer prior to agreeing the purchase prices of specific sites,
the Board expects to apply approximately #3.8 million of the net proceeds of
the Placing and Open Offer to the purchase of land and the balance of
approximately #4.1 million for construction and related working capital
requirements. The Board believes the potential benefits of increasing the land
bank and scale of business outweigh the associated risk of building land falling
in value.

The effect of financing these land purchases out of the proceeds of the Placing
and Open Offer will be to increase the C&M Group's gross assets and its capital
base; thereby reducing the gearing percentage of net debt to share capital and
reserves.

The Placing


The New C&M Shares (other than 543,794 New C&M Shares which are subject to
irrevocable undertakings from certain Qualifying Shareholders to subscribe for
their entitlements under the Placing and Open Offer ("Committed Shares")) have
been conditionally placed by JM Finn as agent for the Company, with
institutional and other investors on the terms of a placing and open offer dated
24 October 2003 ("Placing and Open Offer Agreement"). Stephen Wicks' pension
fund and Jolyon Harrison have committed to subscribe, in aggregate, for 145,255
New C&M Shares, which represent approximately 7.7 per cent. of the total of
1,893,900 New C&M Shares which have been placed firm ("Firm Placing Shares").
The remaining 3,156,621 New C&M Shares ("Open Offer Shares") are being offered
to Qualifying Shareholders under the Open Offer.


All New C&M Shares have been or will be issued at a price of 165p each. The
Issue Price of 165p represents a discount of approximately 9.1 per cent. to the
middle market price of 181.5p of a C&M Share at the close of business on 23
October 2003 (the latest practicable date prior to the publication of this
announcement).


Certain Qualifying Shareholders have undertaken not to apply for their
entitlement to 849,461 Open Offer Shares in aggregate. JM Finn has also placed
these Open Offer Shares firm with institutional and other investors. The
remaining 1,763,366 Open Offer Shares (other than the Committed Shares) have
been placed with institutional and other investors subject to clawback by
Qualifying Shareholders under the Open Offer.


The New C&M Shares represent approximately 26.7 per cent. of the existing C&M
Shares and will represent approximately 21.1 per cent. of the enlarged issued
share capital of the Company following the completion of the Placing and Open
Offer.


The Placing and Open Offer is conditional, inter alia, upon the passing of a
resolution to be proposed at an extraordinary general meeting of the Company to
be held at 11.00 am on 17 November 2003, on the Placing and Open Offer Agreement
having become unconditional in all respects and not having been terminated in
accordance with its terms and on admission of the New C&M Shares to the official
list of the UK Listing Authority and to trading on the London Stock Exchange's
market for listed securities ("Admission") becoming effective by not later than
8.00 a.m. on 19 November 2003 (or such later time and/or day, not being later
than 5.00 p.m. on 30 November 2003, as the Company, Dawnay Day and JM Finn
agree).


The New C&M Shares will, when issued and fully paid, rank pari passu in all
respects with the existing C&M Shares. Applications have been made to the UK
Listing Authority for Admission of the New C&M Shares. It is expected that
Admission will become effective and dealings will commence in the New C&M Shares
on 19 November 2003.


The Open Offer


The Open Offer provides Qualifying Shareholders with the opportunity to apply
for 3,156,621 Open Offer Shares at the Issue Price on the following basis:


                1 Open Offer Share for every 6 Existing C&M Shares


registered in their names at the close of business on 22 October 2003 and so in
proportion for any greater number of shares so registered. Entitlements to apply
for Open Offer Shares will be rounded down to the nearest whole number.
Fractions of Open Offer Shares will be disregarded in the calculation of a
Qualifying Shareholder's entitlement. Completed Application Forms, together with
payment in full, must be received by 3.00 p.m. on 14 November 2003.


The C&M Group's business


The Board of Country & Metropolitan, a developer of affordable homes and complex
mixed property developments, in response to shifting market trends, correctly
anticipated the cooling down of the housing market in the South East of England
over 18 months ago. As a result of those projections, a strategic decision was
taken to increase its activities in the North of England, both via its existing
operations in the North and the North West and via the acquisition in August
2002 of NorthCountry Homes Group Limited ("NorthCountry"), a group of five
housebuilding companies specialising in affordable homes for sale. At the same
time the Company began to withdraw from developing luxury homes in North West
London. The majority of the C&M Group's developments will now be based on
providing good quality homes at affordable prices and it intends to pursue a
number of new initiatives in the South East to provide low cost homes for sale,
principally to first-time buyers or key worker employees.

The continued growth of the C&M Group's volume housebuilding activities, its
more complex mixed use property development schemes and the enlargement of the
land bank requires additional financial investment.


Current trading and prospects


Following the acquisition of NorthCountry in August 2002, the enlarged C&M
Group's financial reporting periods were brought into line by changing Country &
Metropolitan's financial reporting date from 31 August to 30 June. As a result
of this change, the enlarged group reported its results for a shortened 10-month
period ended 30 June 2003, which were announced on 6 October 2003. Profit before
tax and amortisation of goodwill for that period was #6.85 million on turnover
of #62.8 million as compared with #3.99 million and #32.3 million respectively
in the 12 months to 31 August 2002. Net assets at 30 June 2003 were #23.3
million.

Trading since 1 July 2003 has been strong with contracted sales of #26.7 million
and forward reservations of #18.6 million as at 30 September 2003. This compares
with aggregate contracted sales and forward reservations of #38.4 million at 30
September 2002. While construction costs are increasing slightly, selling prices
on urban developments, which are primarily in the North and North West of
England, are still firm. The market for the purchase of development land is
competitive and is subject to regional and local variations.

In the South, the C&M Group is exploring housing development opportunities aimed
at "first time buyers". The Directors intend to apply the low cost model, which
has been a proven success in the North, to developments in the South. This
strategy is in line with government plans for affordable key worker housing and,
in some cases, brownfield planning initiatives.

The geographic spread, product range and skill base, position the C&M Group for
further growth in the current climate of low inflation, low interest rates and
stability in the housing market sector in which the C&M Group primarily
operates. The Board is confident of the C&M Group's prospects for the current
financial year.





                     Expected timetable of principal events
                                                                                        2003

Record Date for the Open Offer                                                     22 October

Latest time and date for splitting Application Forms                    3.00 p.m. 12 November
                                                                        
(to satisfy bona fide market claims)

Latest time and date for receipt of completed Application Forms and     3.00 p.m. 14 November
payment in full under the Open Offer                                    

Latest time and date for receipt of Form of Proxy                      11.00 a.m. 15 November
                                                                        

Extraordinary General Meeting                                          11.00 a.m. 17 November
                                                                        

Dealings in New C&M Shares expected to commence                                   19 November

CREST stock accounts expected to be credited for New C&M Shares in                19 November
uncertificated form

Definitive share certificates for New C&M Shares expected to be                   24 November
despatched
by



Enquiries
                                                                 Telephone number

Country & Metropolitan PLC
Stephen Wicks, Chief Executive                                     01895 824 111


Dawnay, Day Corporate Finance Limited
Gerald Raingold                                                    020 7509 4570
Bruce Garrow


J M Finn & Co
Leslie Kent                                                        020 7860 6324


Buchanan Communications Ltd
Jeremy Garcia                                                      020 7466 5000







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

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