GlobalData Regulatory News (DATA)

14 Dec 2007 07:01

14 December 2007

Not for release, publication or distribution, in whole or in part, in, into or from any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction

RECOMMENDED OFFER BY TMN GROUP PLC FOR INTERNET BUSINESS GROUP PLC

The Boards of TMN Group plc ("TMN") one of the UK's premier online direct marketing groups, and Internet Business Group plc ("IBG"), the online advertising and media specialist, are pleased to announce that they have reached agreement on the terms of a recommended proposal for TMN to acquire the entire issued and to be issued share capital of IBG by way of a share-for-share exchange.

Key points

* The Acquisition will be effected by means of a scheme of arrangement

between IBG and its shareholders pursuant to section 425 of the Companies

Act 1985. The Scheme requires the approval of IBG Shareholders and the

sanction of the Court.

* Scheme Shareholders will receive 1 new ordinary share in TMN for every

3.765 ordinary shares held in IBG. Based on the Closing Price of 48 pence

per TMN Share and 12.75 pence per IBG Share on 13 December 2007, being the

last business day prior to this announcement, the Acquisition values each

IBG Share at approximately 12.75 pence and the existing issued share

capital of IBG at approximately ‚£9.84 million. This represents a nil

premium to the Closing Price of 12.75 pence per IBG Share.

* A maximum number of approximately 21.0 million New TMN Shares will be

issued pursuant to the Acquisition if all IBG Options are exercised

(including those with an exercise price greater than the consideration per

IBG Share receivable under the Acquisition). Assuming no options in either

IBG or TMN are exercised prior to completion of the Acquisition, a maximum

number of approximately 20.5 million New TMN Shares will be issued, such

that IBG Shareholders will hold New TMN Shares representing approximately

29 per cent. of the enlarged issued share capital of TMN immediately after

completion of the Acquisition.

* The New TMN Shares will be allotted and issued credited as fully paid and

will rank pari passu in all respects with the TMN Shares in issue at the

time the New TMN Shares are allotted and issued, including the right to

receive and retain dividends and other distributions declared, made or paid

after the Effective Date.

* TMN's services include email and website marketing (TMN Media), full

service digital advertising (EDR), online fieldwork solutions (iD Factor)

and research analysis (ICD Research). For the year ended 30 April 2007, TMN

reported revenue of ‚£16.1 million and operating profit of ‚£3.3 million. For

the six months ended 31 October 2007, TMN reported revenue of ‚£9.0 million,

and headline profit before tax of ‚£1.4 million.

.

* IBG's operations are divided primarily into the following three divisions:

AffiliateFuture (a Performance Marketing network), IBG Media (brokering

traffic as well as publishing a variety of websites), and E-commerce

(websites retailing product lines across several sectors within sports and

lifestyle). IBG is today announcing its preliminary results for the

financial year ended 31 October 2007, reporting revenue of ‚£16.4 million,

profit before share based charges, interest, taxation, depreciation,

amortisation IFRS share based charges and movement in investments of ‚£1.6

million, and profit before taxation of ‚£0.92 million.

* The IBG Directors and TMN Directors believe that the Acquisition will

result in an Enlarged Group with significant commercial and financial

advantages for the shareholders of both companies.

* As one of the UK's premier online direct marketing groups, TMN will bring

to the Enlarged Group extensive experience and scale advantages. TMN's

strategy is to increase its UK online direct marketing service range with

view to controlling more of advertisers' online spend in a rapidly

expanding market.

* The IBG Directors believe that their strategy of creating a substantially

larger advertising and media operation can best be achieved at this time by

means of the Acquisition.

* There is little cross-over at present between the TMN and IBG customer

bases, providing potential opportunities to cross-sell products and

services.

* The IBG Directors believe that the Acquisition should allow IBG to

accelerate its existing growth strategy by leveraging TMN's complementary

resources and expertise. Taking all of the above factors into account, the

IBG Directors believe that the Acquisition is in the best interests of IBG

Shareholders and therefore unanimously recommend that they vote in favour

of the resolutions to be proposed at the Court Meeting and the General

Meeting.

* In aggregate, TMN has received irrevocable undertakings to vote in favour

of the Scheme in respect of 37,350,270 IBG Shares in aggregate representing

approximately 48.39 per cent. of IBG's existing issued share capital.

Mark Smith, CEO of TMN, said:

"Bringing the two Groups together, with their obvious synergies and exciting market potential, represents an opportunity to continue our strategic focus on building an Enlarged Group providing a broad range of high quality, online advertising, marketing and research services.

The market in which we operate continues to grow and present new opportunities, and TMN will continue to evolve to meet the needs of the market. We see excellent synergies between the businesses and feel that this is a significant step in achieving our long-term vision."

Maziar Darvish, CEO of IBG, said:

"We believe that as part of a larger integrated group, we will be better positioned to exploit the significant opportunities within the marketplace.

The structure of the deal and the combination of two such highly complementary businesses is expected to enhance value for shareholders in the medium to long term. With these factors in mind, the Directors unanimously recommend that the shareholders vote in favour of the resolutions to be proposed at the Court Meeting and the General Meeting."

Investec is acting as sole financial adviser and corporate broker to TMN. Strand Partners is acting as financial adviser to IBG. St Helen's Capital plc is acting as corporate broker to IBG.

Enquiries:

TMN GROUP PLC

Mark Smith, CEO 020 7440 9310

Craig Dixon, CFOINVESTECAndrew Craig 020 7597 5172Erik AndersonREDLEAF COMMUNICATIONS

Samantha Robbins 020 7822 0200

Anna Dunkin

IBG PLC

Maziar Darvish, CEO 07967 039 693

STRAND PARTNERS

James Harris 020 7409 3494

Braden Saunders

ST HELEN'S CAPITAL

Ruari McGirr 020 7628 5582

TAVISTOCK COMMUNICATIONS

Matt Ridsdale 020 7920 3150

Summary

Terms of the Acquisition

The boards of TMN Group plc and Internet Business Group plc are pleased to announce that they have reached agreement on the terms of a recommended proposal for TMN to acquire the entire issued and to be issued share capital of IBG by way of a share-for-share exchange, to be effected by means of a scheme of arrangement between IBG and its shareholders pursuant to section 425 of the Companies Act 1985. The Scheme requires the approval of IBG Shareholders and the sanction of the Court.

Under the terms of the Acquisition, Scheme Shareholders will receive 1 new ordinary share in TMN for every 3.765 ordinary shares held in IBG. Based on the Closing Price of 48 pence per TMN Share and 12.75 pence per IBG Share on 13 December 2007, being the last business day prior to this announcement, the Acquisition values each IBG Share at approximately 12.75 pence and the existing issued share capital of IBG at approximately ‚£9.84 million.

A maximum number of approximately 21.0 million New TMN Shares will be issued pursuant to the Acquisition if all IBG Options are exercised (including those with an exercise price greater than the consideration per IBG Share receivable under the Acquisition). Assuming no options in either IBG or TMN are exercised prior to completion of the Acquisition, a maximum number of approximately 20.5 million New TMN Shares will be issued, such that IBG Shareholders will hold New TMN Shares representing approximately 29 per cent. of the enlarged issued share capital of TMN immediately after completion of the Acquisition. The New TMN Shares will be allotted and issued credited as fully paid and will rank pari passu in all respects with the TMN Shares in issue at the time the New TMN Shares are allotted and issued, including the right to receive and retain dividends and other distributions declared, made or paid after the Effective Date.

Information on TMN

TMN is one of the UK's largest online direct marketing organisations. TMN was established in 1999 and was listed on AIM in 2000 under the name themutual.net. Following TMN's acquisition of EDR and The iD Factor in 2005, themutual.net changed its name to TMN plc. TMN's services include email and website marketing (TMN Media), full service digital advertising (EDR), online fieldwork solutions (iD Factor) and research analysis (ICD Research). For the year ended 30 April 2007, TMN reported revenue of ‚£16.1 million and operating profit of ‚£3.3 million. For the six months ended 31 October 2007, TMN reported revenue of ‚£9.0 million, and headline profit before tax of ‚£1.4 million.

Information on IBG

IBG was incorporated in 1999. Its subsidiary, Mazware Ltd, was incorporated in 1996, offering web design and web hosting services. With its core skills in technology, design and marketing, IBG has developed into a business focused on online advertising, online publishing and online retailing. IBG's operations are divided primarily into the following three divisions: AffiliateFuture (a Performance Marketing network), IBG Media (brokering traffic as well as publishing a variety of websites), and E-commerce (websites retailing product lines across several sectors within sports and lifestyle). IBG is today announcing its preliminary results for the financial year ended 31 October 2007, reporting revenue of ‚£16.4 million and profit before interest, taxation, depreciation amortisation, IFRS share based charges and movement in investments of ‚£1.6 million, and profit before taxation of ‚£0.92 million

Strategic rationale

The IBG Directors and TMN Directors believe that the Acquisition will result in an Enlarged Group with significant commercial and financial advantages for both the shareholders of TMN as well as the shareholders of IBG, who will, through their subsequent shareholdings in the Enlarged Group, partake in the potential benefits that are expected to result from the Acquisition. As one of the UK's premier online direct marketing groups, TMN will bring to the Enlarged Group extensive experience and scale advantages. TMN's strategy is to increase its UK online direct marketing service range with view to controlling more of advertisers' online spend in a rapidly expanding market.

The IBG Directors believe that their strategy of creating a substantially larger advertising and media operation can best be achieved at this time by means of the Acquisition. This will allow the IBG Directors the opportunity to focus on growing the business within the TMN Group and without the distraction to operational matters that the on-going requirements of being a smaller independently quoted business bring. TMN operates in the complementary areas of operating media assets, e-mail campaign management, e-mail sales representation and market research and has demonstrable expertise in both sales and account management. In addition, TMN owns complementary technology and know-how in the lead generation market. In addition, there is little cross-over at present between the TMN and IBG customer bases, providing potential opportunities to cross-sell products and services. As a result of these factors, the IBG Directors have concluded that IBG would be better placed to achieve the opportunities available to it within a larger integrated group. As the acquisition of IBG by TMN is equity based, resulting in IBG Shareholders being interested in approximately 29 per cent of the enlarged TMN group following the Acquisition (on the basis that no options over TMN Shares and IBG Shares as at 13 December 2007 are exercised thereafter), IBG shareholders may have the opportunity to gain from the potential medium to long term upside offered by IBG, as part of a larger media and marketing services organisation. Furthermore, the IBG Directors believe there to be a strong commercial rationale for the Acquisition, beneficial to all IBG stakeholders, including IBG Shareholders, employees and customers. The IBG Directors believe that the Acquisition should allow IBG to accelerate its existing growth strategy by leveraging TMN's complementary resources and expertise. Taking all of the above factors into account, the IBG Directors believe that the Acquisition is in the best interests of IBG Shareholders and therefore unanimously recommend that they vote in favour of the resolutions to be proposed at the Court Meeting and the General Meeting.

The Board

The Enlarged Group will continue to be managed and run on a day to day basis by the current executive management team of TMN. Upon completion of the Acquisition the board of TMN will comprise:

Peter Harkness Non Executive Chairman

Mark Smith Chief Executive Officer

Craig Dixon Chief Financial Officer

Vincent Smith Non Executive Director

Bruce Fair Non Executive Director

TMN attaches great importance to the skills and experience of the existing management and employees of IBG and believes that opportunities for the employees of the Enlarged Group will be enhanced in the event that the Acquisition is completed.

TMN confirms that it has no plans to alter existing arrangements with employees or management of the IBG Group. As such, the employees and management of the IBG Group will continue to be employed on the basis of their current terms. TMN also has no plans to change the locations of IBG Group's places of business and it has confirmed that following completion of the Acquisition all existing employment rights, including pension rights, of employees of IBG will be fully safeguarded.

Undertakings

TMN has received irrevocable undertakings from certain IBG Directors and Connected Parties to vote (or procure the vote) in favour of the Scheme in respect of 28,649,270 IBG Shares, in aggregate representing approximately 37.11 per cent. of IBG's existing issued share capital. TMN has also received irrevocable undertakings from other IBG Shareholders to vote in favour of the Scheme in respect of 8,701,000 IBG Shares, in aggregate representing approximately 11.27 per cent. of IBG's existing issued share capital. Such undertakings from these other IBG Shareholders will cease to be binding, broadly speaking, in the event of a higher competing offer being made for IBG. In aggregate, therefore, TMN has received irrevocable undertakings to vote in favour of the Scheme in respect of 37,350,270 IBG Shares, in aggregate representing approximately 48.39 per cent. of IBG's existing issued share capital. Further details of these irrevocable undertakings received by TMN are set out in Appendix III to this announcement.

Recommendation

The IBG Directors, who have been so advised by Strand Partners, consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the IBG Directors, Strand Partners has taken into account the commercial assessments of the IBG Directors. Accordingly, the IBG Directors unanimously recommend IBG Shareholders to vote in favour of the resolutions to be proposed at the Court Meeting and the General Meeting, as they have irrevocably undertaken to do in respect of their own entire legal and beneficial holdings of IBG Shares which, in aggregate, total 25,310,316 IBG Shares, representing approximately 32.79 per cent. of IBG's existing issued share capital.

This summary should be read in conjunction with, and is subject to, the full text of the following announcement and the Appendices. The Acquisition will be subject to the Conditions set out in Appendix I. Appendix II contains the bases and sources of certain information contained in this announcement. Appendix III contains details of the irrevocable undertakings. Appendix IV contains the definitions of certain terms used in this summary.

General

Application will be made to the London Stock Exchange for the New TMN Shares to be admitted to trading on AIM. It is expected that Admission will become effective and that trading in the New TMN Shares will commence on AIM on the Effective Date. It is also proposed that, in addition, to the cancellation of the listing of IBG Shares, IBG be re-registered as a private limited company under the relevant provisions of the Act prior to the Effective Date to enable the New IBG Shares to be issued to TMN following the Capital Reduction without the need to prepare a valuation report under Section 103 of the Act.

This announcement is not intended to and does not constitute or form any part of an offer or invitation to sell or subscribe for or purchase any securities in any jurisdiction pursuant to the Acquisition or otherwise. The Acquisition will be subject to the Conditions and further terms set out herein and in Appendix I, and to the full terms and conditions that will be set out in the Scheme Document. The Acquisition will be governed by English law and will be subject to the applicable requirements of the City Code, the Panel and the London Stock Exchange. Any acceptance or other response to the Acquisition should be made only on the basis of the information in the Scheme Document. IBG Shareholders are advised to read the formal documentation in relation to the Acquisition carefully, once it has been dispatched.

It is anticipated that a Scheme Document containing the notice of the two Shareholders' meetings will be sent to IBG Shareholders on or around 19 December 2007 following a hearing of the application in Court to convene the Scheme Shareholders' meetings.

TMN reserves the right to implement the offer, with the written consent of IBG, by way of a Conventional Offer, in which case additional documents will be despatched to IBG Shareholders. Further details are set out in Appendix I.

Investec, which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for TMN and no one else in connection with the Acquisition and other matters referred to in this announcement and the Scheme and will not be responsible to anyone other than TMN for providing the protections afforded to clients of Investec nor for giving advice in relation to the Acquisition and the Scheme or any other matter or arrangement referred to in this announcement.

Strand Partners, which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for IBG and no one else in connection with the Acquisition and the Scheme and will not be responsible to anyone other than IBG for providing the protections afforded to clients of Strand Partners nor for giving advice in relation to the Acquisition and the Scheme or any other matter or arrangement referred to in this announcement.

The TMN Directors accept responsibility for the information contained in this announcement other than the information relating to IBG. To the best of the knowledge and belief of the directors of TMN (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 IBG Directors accept responsibility for the information contained in this announcement other than the information relating to TMN. To the best of the knowledge and belief of the directors of IBG (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 distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe, such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

Any TMN Shares issued pursuant to the Scheme (including the New TMN Shares) will be issued in reliance upon the exemptions from the registration requirements of the US Securities Act provided by Section 3(a)(10) of the US Securities Act and, as a consequence, will not be registered thereunder or under the securities laws of any state or other jurisdiction of the Unites States. For the purposes of qualifying for the Section 3(a)(10) exemption from the registration requirements of the US Securities Act and the securities laws of certain states of the Unites States, TMN and IBG will advise the Court that its sanctioning of the Scheme will be relied upon by TMN and IBG as an approval of the Scheme following a hearing of its fairness to Scheme Shareholders at which hearing all such Scheme Shareholders are entitled to attend in person or through counsel to support or oppose the sanctioning of the Scheme and with respect to which notification has been given to all Scheme Shareholders. TMN will not register the TMN Shares (including the New TMN Shares) under the US Securities and Exchange Act of 1934 and thus will not be required following completion of the Scheme to file any reports with the SEC.

Cautionary note regarding forward looking statements:

This announcement contains certain forward looking statements with respect to the financial condition, results of operations and business of IBG or the IBG Group, TMN or the TMN Group or the Enlarged Group and certain plans and objectives of the boards of directors of IBG and TMN. These forward looking statements can be identified by the fact that they do not relate to historical or current facts. Forward looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could", "potential" or other words of similar meaning. These statements are based on assumptions and assessments made by the boards of directors of IBG and TMN in the light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe appropriate. By their nature, forward looking statements involve risk and uncertainty and the factors described in the context of such forward looking statements in this announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward looking statements.

Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this announcement. Although IBG and TMN believe that the expectations reflected in any such forward-looking statements are reasonable, IBG and TMN can give no assurance that such expectations will prove to have been correct. IBG and TMN caution you not to place undue reliance on these forward-looking statements, which speak only as of the date of this announcement. IBG and TMN assume no obligation to update or correct the information contained in this announcement.

Dealing disclosure requirements

Under the provisions of Rule 8.3 of the Code, if any person is, or becomes, "interested" (directly or indirectly) in one per cent. or more of any class of "relevant securities" of IBG or TMN, all "dealings" in any "relevant securities of that company (including by means of an option in respect of, or a derivative referenced to, any such relevant securities") must be publicly disclosed by no later than 3.30 p.m. on the business day following the date of the relevant transaction. This requirement will continue until the Effective Date or until the date on which the Scheme lapses or is otherwise withdrawn or on which the "Offer Period" otherwise ends (or, if TMN elects to effect the Acquisition by way of a Takeover Offer, until the date on which such Takeover Offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the relevant "offer period" otherwise ends). If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of IBG or TMN, they will be deemed to be a single person for the purpose of Rule 8.3.

Under the provisions of Rule 8.1 of the Code, all "dealings" in relevant securities of IBG or TMN by IBG or TMN, or by any of their respective associates, must be disclosed by no later than 12.00 noon on the business day following the date of the relevant transaction.

A disclosure table, giving details of the companies in whose "relevant securities "dealings" should be disclosed, and the number of such securities in issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.

"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.

Terms in quotation marks are defined in the Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a dealing under Rule 8, please contact an independent financial adviser authorised under FSMA, consult the Panel's website at www.thetakeoverpanel.org.uk or contact the Panel on telephone number + 44 (0) 20 7638 0129.

14 December 2007

RECOMMENDED OFFER BYTMN GROUP PLC FORINTERNET BUSINESS GROUPPLC

1. Introduction

The boards of TMN Group plc and Internet Business Group plc are pleased to announce that they have reached agreement on the terms of a recommended proposal for TMN to acquire the entire issued and to be issued share capital of IBG by way of a share for share exchange and which is to be effected by means of a scheme of arrangement (the "Scheme") between IBG and its shareholders pursuant to section 425 of the Act (involving a reduction of capital pursuant to section 135 of the Act). The Scheme requires the approval of Scheme Shareholders and the sanction of the Court.

2. The Acquisition

Under the terms of the Acquisition, Scheme Shareholders will receive 1 new ordinary share in TMN for every 3.765 ordinary shares held in IBG. Based on the Closing Price of 48 pence per TMN Share and 12.75 pence per IBG Share on 13 December 2007, being the last business day prior to this announcement, the Acquisition values each IBG Share at approximately 12.75 pence and the existing issued share capital of IBG at approximately ‚£9.84 million. This represents a nil premium to the Closing Price of 12.75 pence per IBG Share.

A maximum number of up to 21.0 million New TMN Shares will be issued pursuant to the Acquisition if all IBG Options are exercised, including those with an exercise price greater than the consideration per IBG Share receivable under the Acquisition. Assuming no options in either IBG or TMN are exercised prior to completion of the Acquisition, a maximum number of approximately 20.5 million New TMN Shares will be issued, such that IBG Shareholders will hold New TMN Shares representing approximately 29 per cent. of the enlarged issued share capital of TMN immediately after completion of the Acquisition. The New TMN Shares will be allotted and issued credited as fully paid and will rank pari passu in all respects with the TMN Shares in issue at the time the New TMN Shares are allotted and issued, including the right to receive and retain dividends and other distributions declared, made or paid after the Effective Date.

Fractions of New TMN Shares will not be allotted or issued to Scheme Shareholders pursuant to the Acquisition and all fractional entitlements to New TMN Shares will be rounded down to the nearest whole number of New TMN Shares. Fractional entitlements of New TMN Shares will not be issued to the holders of Scheme Shareholders and nor will they be aggregated and sold in the market.

3. Irrevocable undertakings

TMN has received irrevocable undertakings from certain IBG Directors and Connected Parties to vote (or procure the vote) in favour of the Scheme in respect of 28,649,270 IBG Shares, in aggregate representing approximately 37.11 per cent. of IBG's existing issued share capital. TMN has also received irrevocable undertakings from other IBG Shareholders to vote in favour of the Scheme in respect of 8,701,000 IBG Shares, in aggregate representing approximately 11.27 per cent. of IBG's existing issued share capital. Such undertakings from these other IBG Shareholders will cease to be binding, broadly speaking, in the event of a higher competing offer being made for IBG. In aggregate, therefore, TMN has received irrevocable undertakings to vote in favour of the Scheme in respect of 37,350,270 IBG Shares, in aggregate representing approximately 48.39 per cent. of IBG's existing issued share capital.

Further details of these irrevocable undertakings received by TMN (including those from the IBG Directors and the circumstances when such undertakings cease to be binding) are set out in Appendix III to this announcement.

4. Background to and reasons for recommending the Acquisition

IBG was incorporated in 1999. Its subsidiary, Mazware Ltd, was incorporated in 1996 offering web design and web hosting services. Following a severe downturn in the internet professional services market subsequent to the well-documented "dotcom crash", the directors of the Company, at that time, focused the IBG Group's activities on e-commerce and online advertising. The organically created e-commerce business was expanded in late 2001 following the acquisition of the majority stake in Sweatband Ltd, not already owned IBG. The online advertising business was developed in-house and was launched in February 2002 as AffiliateFuture. This operation has achieved significant growth and accounted for over 85 per cent. of IBG's sales in the financial year ended 31 October 2007.

During its 2006 financial year, IBG established a discrete media division, bringing together its media brokering business with intangible assets (primarily domain names) acquired in July 2006 in order to operate as an online publisher, generating revenues from advertising on its own properties. This division provides IBG with a comparatively higher margin operation in its own right as well as a point of difference for the AffiliateFuture operation.

In the last few years, IBG has achieved significant growth in sales and made progress in diversifying its business internationally in addition to establishing a media operation.

As reported in both the conclusion of the interim results statement, published on 30 July 2007, and more recently in the preliminary results statement announced on 14 December 2007, IBG has continued to focus on the medium to long term goal of creating a substantially larger advertising and media operation.

Whilst the IBG Directors remain confident as to the medium to long-term prospects of IBG, they believe that there are potential disadvantages associated with remaining at its current size. These include:

¢â€" Reduced client influence as a result of relative size compared with larger competitors

¢â€" Competitive disadvantage for IBG resulting from only being able to offer one element (affiliate marketing) of the overall online marketing activities of most clients.

The IBG Directors believe that their strategy of creating a substantially larger advertising and media operation can best be achieved at this time by means of the Acquisition. This will allow the IBG Directors the opportunity to focus on growing the business within the TMN Group and without the distraction to operational matters that the on-going requirements of being a smaller independently quoted business bring.

TMN operates in the complementary areas of operating media assets, e-mail campaign management, e-mail sales representation and market research and has demonstrable expertise in both sales and account management. In addition, TMN owns complementary technology and know-how in the lead generation market.

In addition, there is little cross-over at present between the TMN and IBG customer bases, providing potential opportunities to cross-sell products and services.

As a result of these factors, the IBG Directors have concluded that IBG would be better placed to achieve the opportunities available to it within a larger integrated group. As the acquisition of IBG by TMN is equity based, resulting in IBG Shareholders being interested in approximately 29 per cent of the enlarged TMN group following the Acquisition (on the basis that no options over TMN Shares and IBG Shares as at 13 December 2007 are exercised thereafter), IBG shareholders may have the opportunity to gain from the potential medium to long term upside offered by IBG, as part of a larger media and marketing services organisation. Furthermore, the IBG Directors believe there to be a strong commercial rationale for the Acquisition, beneficial to all IBG stakeholders, including IBG Shareholders, employees and customers. The IBG Directors believe that the Acquisition will allow IBG to accelerate its existing growth strategy by leveraging TMN's complementary resources and expertise.

Taking all of the above factors into account, the IBG Directors believe that the Acquisition is in the best interests of IBG Shareholders and therefore unanimously recommend that they vote in favour of the resolutions to be proposed at the Court Meeting and the General Meeting.

5. Reasons for the Acquisition and intentions for IBG

The IBG Directors and TMN Directors believe that the Acquisition should result in an Enlarged Group with significant commercial and financial advantages for both the shareholders of TMN as well as the IBG Shareholders, who will, through their subsequent shareholdings in the Enlarged Group, partake in the potential benefits that are expected to result from the Acquisition. As one of the UK's premier online direct marketing groups, TMN will bring to the Enlarged Group extensive experience and scale advantages. TMN's strategy is to increase its UK online direct marketing service range with view to controlling more of advertisers' online spend in a rapidly expanding market. Paragraph 4 above sets out the background to and reasons for the IBG Directors recommending that IBG shareholders vote in favour of the Acquisition.

Enhanced service range

The Enlarged Group will be able to offer its respective clients a competitive menu of services from its different divisions: affiliate marketing (AffiliateFuture), email media planning and buying (EDR), media ownership and representation (TMN Media and IBG Media) and research services (The iD Factor and ICD Research). The services that IBG provides strategically supplement in TMN's service portfolio, and should allow TMN to grow both online businesses through exploiting market opportunities with an enhanced service range and leveraged sales across its divisions, together with an enlarged complementary client base.

Expansion of client base

The majority of the largest clients of TMN and IBG are currently not major clients of the other, and this could offer an instant synergy to up-sell the broader service offering of the Enlarged Group. In particular, the ability of TMN to offer affiliate marketing as a service will further its appeal to existing clients while offering increased opportunities to acquire new clients who can utilise a full range of internet advertising services via one provider.

Scale benefits

TMN and IBG operate within a market that has started to consolidate, with major market participants in both the US and Europe increasing their control of the media and agency sectors. The Directors believe that following the Acquisition, the Enlarged Group would be in a more advantageous position to strengthen its current market position, as well as to continue to grow its operations at a strong pace and offer its clients a broader and more effective service through increased resource, cross-Group synergies and a single Group focused on benefiting an advertiser by servicing a larger proportion of their internet advertising spend.

TMN intends to focus primarily on strategically positioning the Affiliate Future and IBG Media divisions of the IBG business as part of the Enlarged Group, through using the service offerings of these divisions as a platform to broaden the online marketing activities that TMN is able to provide to both its current and new clients. The strategic direction in which TMN intends to carry the IBG business is not expected to change, however TMN intends to accelerate the growth of all parts of the Enlarged Group via the increased opportunities arising from the Acquisition, as discussed above. The proposed enlargement of the Group will bring long-term commercial scalability and opportunities to deliver a broader solution to clients. The strategic objective of the Group remains focused on bringing together various marketing services, with the current retail operations of IBG being disposed in due course.

6. Management and employees

The Enlarged Group will continue to be managed and run on a day to day basis by the current executive management team of TMN. Upon completion of the Acquisition the board of TMN will comprise:

Peter Harkness Non Executive Chairman

Mark Smith Chief Executive Officer

Craig Dixon Chief Financial Officer

Vincent Smith Non Executive Director

Bruce Fair Non Executive Director

TMN attaches great importance to the skills and experience of the existing management and employees of IBG and believes that opportunities for the employees of the Enlarged Group will be enhanced in the event that the Acquisition is completed.

TMN confirms that it has no plans to alter existing arrangements with employees or management of the IBG Group. As such, the employees and management of the IBG Group will continue to be employed on the basis of their current terms. TMN also has no plans to change the locations of IBG Group's places of business and it has confirmed that following completion of the Acquisition all existing employment rights, including pension rights, of employees of IBG will be fully safeguarded.

The IBG Directors have each entered into a lock-in agreement pursuant to which they have agreed: (a) not to dispose of any interest in such number of TMN Shares as shall equal or exceed 25 per cent. of the TMN Shares received by them pursuant to the Scheme from the period from Admission to 31 July 2008; (b) not to dispose of any interest in such number of TMN Shares as shall equal or exceed 62.5 per cent. of the TMN Shares received by them pursuant to the Scheme from the period from 31 July 2008 to 31 December 2008; and (c) not to dispose of any interest in the TMN Shares received by them pursuant to the Scheme during the 24 month period from Admission otherwise than through Investec (or broker to TMN at that time) so as to ensure an orderly market in the TMN Shares for that period.

The IBG Board has given due consideration to TMN's statements above and assurances noted above in deciding to recommend the Acquisition.

7. Information on TMN

TMN was established in 1999 under the name "themutual.net" as an internet community in which members could obtain a stake and receive information free of charge through a message board system. Themutual.net was listed on AIM in 2000, and gained expertise in the email marketing sector. After substantial growth and the acquisitions of Electronic Direct Response and iD Factor Limited in 2005, themutual.net, now a bigger company that had transformed itself via organic and acquisitional growth into a major online direct marketing specialist, changed its name to TMN Group plc in order to reflect better divisional structure and the substantial expertise that the business has developed. TMN has since evolved significantly through continued investment in staff and infrastructure, and is far removed from the business it was when first established.

TMN is now one of the UK's largest online direct marketing organisations, operating through four divisions: TMN Media, EDR, The iD Factor and ICD Research. Each divisional brand provides a specialist approach to its field of expertise. In addition, TMN has a number of further pipeline opportunities, including the launch of Envoy, an email delivery platform.

TMN Media - media division

TMN Media specialises in email and website marketing, with access to over 10 million highly profiled, permission-based email addresses, millions of visitors to its websites, and distribution technology that ensures strong deliverability. TMN Media manages one of the most comprehensive portfolio of email databases in the UK, and offers a full online advertising solution.

EDR - digital advertising agency division

TMN acquired EDR, an online interactive advertising agency, in November 2005 for a maximum consideration of ‚£6.0m. EDR was established in 2000 to offer full services in email broadcast, sales and delivery. TMN's EDR division fulfils the full planning and buying marketing requirements for numerous blue chip clients. In 2006, EDR divested its owned and managed lists to TMN Media, and now focuses purely on email strategy and investment, with access to over 30 million opt-in email addressees from around 100 email lists. EDR is one of the UK's largest email-buying agencies, and plans campaigns across a large number of third party lists, including TMN Media.

iD Factor - online fieldwork solutions division

Specialist online market research agency, the iD Factor, was formed in 2001 to offer online survey management and fieldwork services to the market research industry and was acquired by TMN in December 2005 for a consideration of ‚£1.2 million. Core services of this division include sample provision, the design and implementation of web based surveys as well as full data processing and tabulation. With over 250,000 panel members in the UK, access to 4 million members across 41 territories and extensive synergies with the rest of TMN, iD Factor aims to capitalise on the trend of market research migration online, which is driven by the superior speed, efficiency and targeting accuracy that online offers against traditional fieldwork.

ICD Research - Research analysis division

ICD Research was established as an autonomous division providing clients with insight and analysis of market research data.

For the year ended 30 April 2007, TMN reported revenue of ‚£16.1 million (a 79 per cent. increase over the prior year), and operating profit of ‚£3.3 million (a 93 per cent. increase over the prior year). For the six months ended 31 October 2007, TMN reported revenue of ‚£9.0 million (a 13 per cent. increase over the prior year), and headline profit before tax of ‚£1.4 million (a 4 per cent. increase over the prior year).

8. Information on IBG

IBG was incorporated in 1999. Its subsidiary, Mazware Ltd, was incorporated in 1996, offering web design and web hosting services.

With its core skills in technology, design and marketing, IBG has developed into a business focused on online advertising, online publishing and online retailing. IBG's operations are divided primarily into the following three divisions:

* AffiliateFuture - a Performance Marketing network; * IBG Media - brokering traffic as well as publishing a variety of websites; and, * E-commerce - websites retailing product lines across several sectors within sports and lifestyle.

AffiliateFuture

Launched in February 2002, AffiliateFuture is IBG's largest division. It operates in the UK, US and European markets with offices in London, New York and Northern Spain, delivering tens of thousands of transactions per week to hundreds of clients who range from small businesses to major international operators. AffiliateFuture operates primarily on a CPA (Cost Per Acquisition) model, whereby clients pay an agreed percentage of or a fixed amount for sales or leads that are generated by the network, as such directly linking results to advertising costs.

IBG Media

IBG Media is IBG's most recently established division and offers targeted advertising solutions to advertisers through its own network of websites and email publications including Henoo.com, CheapHolidayDeals.co.uk, CheapAccommodation.com and NetFreeStuff.com. Henoo.com is a travel search engine, allowing consumers to compare prices of package holidays, scheduled flights, worldwide hotels and car hire from multiple suppliers. CheapHolidayDeals.co.uk and CheapAccommodation.com are price comparison websites featuring deals from numerous travel and accommodation suppliers. Net Free Stuff is a "freebie", discount voucher and competition website with over 100,000 UK members. In addition to the above, IBG Media also brokers traffic. This entails purchasing traffic from third party sources and monetising this traffic through affiliate networks.

E-commerce

IBG's e-commerce strategy is to focus on products that are not readily available to consumers on the high street. IBG offers a range of products across its network of consumer websites including www.Sweatband.com, and www.GadgetHub.co.uk. Through a network of Sweatband.com branded websites, IBG offers consumers a specialist range of active sports equipment, for example in the areas of tennis, fitness and squash. Focused on lifestyle products, GadgetHub's product lines include table games such as football tables, pool, snooker and air hockey.

IBG is today announcing its preliminary results for the financial year ended 31 October 2007, reporting revenue of ‚£16.4 million, profit before interest, taxation, depreciation, amortisation, IFRS share based charges and movement in investments of ‚£1.6 million; and profit before taxation of ‚£0.92 million. As at 31 October 2007 IBG had net assets of ‚£4.4 million.

9. Financial effects of the Acquisition

Following the Acquisition, IBG will become a subsidiary of TMN as a result of which the assets and liabilities of the IBG Group will be consolidated into the financial statements of the TMN Group. The TMN Directors expect that the Acquisition will be earnings enhancing in the first full year of ownership, before taking into account the amortisation of identified acquired intangibles. The foregoing statement should not be interpreted as a profit forecast nor to mean that TMN's future earnings per share will necessarily be greater than or equal to its historical earnings per share. As neither TMN nor IBG have paid or declared a dividend in the last financial year ended 30 April 2007 and 31 October 2007 respectively, there will be no change in the income position of IBG's shareholders arising from the Acquisition. Based on the Closing Price of 48 pence per TMN Share and 12.75 pence per IBG Share on 13 December 2007, being the last business day prior to the announcement, the terms of the Acquisition imply a nil-premium offer, which would mean no change in the capital position of IBG shareholders arising from the Acquisition.

10. Timing

IBG anticipates that it will despatch the Scheme Document to IBG Shareholders and, for information only, to holders of options granted under the IBG Share Schemes on or about 19 December 2007, but in any event within the next 28 days (or such later date as may be agreed with the Panel); that the Court Meeting and General Meeting will take place during January 2008; and subject to the Scheme becoming unconditional and effective in accordance with its terms, the Effective Date is expected to occur at the end of February 2008. The timing of events which relate to the implementation of the Scheme is, however, subject to the approval of the Court and is therefore subject to change. A full anticipated timetable will be set out in the Scheme Document.

11. IBG Share Scheme

The offer to acquire the IBG Shares under the Acquisition extends to all IBG Shares which are allotted and issued or transferred pursuant to the exercise of IBG Options before the Scheme Record Time. Pursuant to the terms of the IBG Option Scheme, all of the IBG Options will become exercisable upon the sanction of the Scheme by the Court. IBG Options will continue to be exercisable at any time within 30 days after the Scheme is sanctioned by the Court, but they will lapse to the extent that they have not been exercised at the end of that 30 day period. Proposed amendments to the Articles provide that any IBG Shares which are allotted and issued pursuant to the exercise of IBG Options after the Scheme Record Time will be immediately transferred to TMN, or a wholly owned subsidiary of TMN, conditional on and in exchange for the same consideration for each IBG Share as was due to a holder of Scheme Shares under the Scheme. This will avoid any person (other than TMN, or a wholly owned subsidiary of TMN) holding IBG Shares after dealings in such shares have ceased on AIM, which is expected to occur at the close of business on the Effective Date. IBG Optionholders will be sent details by IBG of the proposals made in respect of the exercise of their outstanding IBG Options.

12. Implementation Agreement

IBG and TMN have entered into the Implementation Agreement, which governs their relationship until the Effective Date. Amongst other things, TMN and IBG have agreed to co-operate with regard to the process required to implement the Scheme and each has also entered into certain undertakings concerning the conduct of its business during that period. The Implementation Agreement contains provisions for an inducement and break fee agreement pursuant to which IBG has agreed to pay an inducement fee of an amount equal to one per cent. of the aggregate value of the fully diluted share capital of IBG (calculated by reference to the price of an IBG share as valued pursuant to the Offer and on the basis set out in Practice Statement 15 published by the Panel and inclusive of non-recoverable VAT) to TMN if, following the Announcement and subject to certain exceptions, an IBG Competing Transaction is announced and subsequently concluded or the IBG Board withdraws or adversely amends its recommendation of the Acquisition and, in either case, the Acquisition lapses or is withdrawn as a result. In addition, TMN has also agreed to pay a break fee to IBG of an amount equal to one per cent. of the aggregate value of the fully diluted share capital of IBG (calculated by reference to the price of an IBG share as valued pursuant to the Offer and on the basis set out in Practice Statement 15 published by the Panel and inclusive of non-recoverable VAT) in the event that, following the Announcement a TMN Competing Transaction is announced and is subsequently concluded and, the Acquisition lapses or is withdrawn as a result.

13. The Scheme and the Meetings

The Acquisition is being implemented by means of a scheme of arrangement between IBG and the IBG Shareholders under section 425 of the Act. The Scheme involves the cancellation of the Scheme Shares by way of a Court approved reduction of capital and the application of the reserve arising from such cancellation in paying up in full a number of New IBG Shares which is equal to the number of cancelled Scheme Shares and issuing the same to TMN in consideration for which Scheme Shareholders will receive New TMN Shares to the extent of their entitlement. On the Effective Date, TMN will become the owner of the whole of the issued share capital of IBG. To become effective, the Scheme requires, amongst other things, the approval at the Court Meeting of a majority in number representing not less than three-fourths in value of the Scheme Shares held by Scheme Shareholders present and voting, either in person or by proxy, at the Court Meeting, or at any adjournment thereof, and the passing of the Special Resolutions necessary to approve matters to give effect to the Scheme at the General Meeting, or at any adjournment thereof.

Following the Court Meeting and the General Meeting and the satisfaction (or, where applicable, waiver) of the other Conditions, the Scheme must also be sanctioned by the Court at the Scheme Court Hearing and the associated Capital Reduction must be confirmed by the Court at the Reduction Court Hearing.

14. Disclosure of interests in IBG

Save for the irrevocable undertakings referred to paragraph 3 above, neither TMN nor any of its subsidiaries nor any of theTMN Directors, their immediate families, related trusts or (so far as the TMN Directors are aware having made due and careful enquiry) connected persons (within the meaning of section 346 of the Act) nor any persons acting in concert with TMN nor any person with whom TMN or any person acting in concert with TMN has an arrangement, were interested, directly or indirectly, in any IBG Shares or any rights over securities convertible or exchangeable into, or any rights to subscribe for or purchase, or any options to purchase, any IBG Shares, or any derivatives referenced to IBG Shares nor borrowed or lent (save for any borrowed shares which have been either on-lent or sold) nor had any right to subscribe for, or any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery in relation to, such securities.

15. Recommendation

The IBG Directors, who have been so advised by Strand Partners, consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the IBG Directors, Strand Partners has taken into account the commercial assessments of the IBG Directors. Accordingly, the IBG Directors unanimously recommend IBG Shareholders to vote in favour of the resolutions to be proposed at the Court Meeting and the General Meeting, as they have irrevocably undertaken to do in respect of their own entire legal and beneficial holdings of IBG Shares which, in aggregate, total 25,310,316 IBG Shares, representing approximately 32.79 per cent. of IBG's existing issued share capital.

Appendix I

Conditions and Certain Further Terms of the Offer

PART A - Conditions of the Offer

1. The implementation of the Scheme is conditional upon, inter alia:

i. the approval of the Scheme by a majority in number, representing not less

than three-fourths in value, of the Scheme Shares held by the holders of

Scheme Shares, present and voting, either in person or by proxy, at the

Court Meeting or any adjournment of that meeting;

ii. the resolutions required to approve and implement the Scheme and give

effect to the reduction of capital set out in the notice of the General

Meeting being passed by the requisite majority at the General Meeting, or

any adjournment of that meeting;

iii. the sanction (with or without modification as agreed by IBG and TMN) of

the Scheme and the confirmation of the Capital Reduction by the Court, office copies of the Court Orders and the Minute being delivered for registration to the Registrar of Companies and the registration of the Reduction Court Order confirming the Capital Reduction with the Registrar of Companies;

iv. the admission of the New TMN Shares to trading on AIM, in accordance with

the AIM Rules becoming effective

2. In addition, the Scheme is conditional upon the following matters and,

accordingly, the necessary actions to make the Scheme effective will not be

taken unless such conditions (as amended, if appropriate) have been

satisfied or waived:

Authorisations:

i. all authorisations in any jurisdiction which TMN or IBG, acting reasonably,

considers reasonably necessary or appropriate for, or in respect of, the Scheme and/or its implementation (where the absence of such authorisation would have a material and adverse effect on the Scheme) having been obtained in terms and in a form reasonably satisfactory to TMN and IBG, acting reasonably, from any relevant person and all such authorisations remaining in full force and effect and IBG not having received written notice of any intention to revoke or not renew the same; and

ii. all authorisations which TMN or IBG, acting reasonably. considers

reasonably necessary to carry on the business of any member of the IBG Group (where the absence of such authorisation would have a material and adverse effect on the IBG Group taken as a whole) remaining in full force and effect and IBG not having received written notice of any intention to revoke or not to renew the same; and

iii. all filings in connection with the Scheme, its implementation or the

acquisition or proposed acquisition of any shares in, or control or management of, the IBG Group which TMN or IBG, acting reasonably, considers reasonably necessary or appropriate, and where the absence of such filing would have a material and adverse effect on the Scheme, having been made and all applicable waiting periods having expired, lapsed or been terminated.

3. Regulatory Intervention

No regulatory body having taken, instituted, implemented or threatened in writing any legal proceedings, or having required any action to be taken or otherwise having done anything or having enacted, made or proposed any statute, regulation, order or decision or taken any other step and there not continuing to be outstanding any statute, regulation, order or decision that is reasonably likely to (in each case to an extent which is material in the context of the IBG Group taken as a whole):

i. make the Scheme, its implementation or the acquisition or proposed

acquisition of any shares in, or control or management of, the IBG Group by

TMN illegal, void or unenforceable; or

ii. otherwise, directly or indirectly, prevent, prohibit or otherwise

materially restrict, restrain, delay or interfere in the implementation of or impose additional conditions or obligations with respect to or otherwise challenge or require amendment of the Scheme or the proposed acquisition of IBG by TMN or any acquisition of shares in IBG by TMN; or

iii. require, prevent or materially delay the divestiture by TMN of any shares

or other securities in IBG; or

iv. impose any material limitation on the ability of any member of the TMN

Group or any member of the IBG Group to acquire or hold or exercise effectively, directly or indirectly, any rights of ownership of shares or other securities or the equivalent in any member of the IBG Group or management control over any member of the IBG Group in any such case in a manner or to an extent which is material to TMN in the context of the Scheme or, as the case may be, in the context of the TMN Group or the IBG Group taken as a whole; or

v. require, prevent or materially delay the disposal by IBG or any member of

the IBG Group, or require the disposal or alter the terms of any proposed disposal by any member of the IBG Group, of all or any part of their respective businesses, assets or properties or impose any limitation on the ability of any of them to conduct their respective businesses or own their respective assets or properties; or

vi. require any member of the TMN Group or any member of the IBG Group to offer

to acquire any shares or other securities (or the equivalent) in any member

of the IBG Group owned by any third party (in each case, other than in

connection with the implementation of the Scheme); or

vii. impose any limitation on the ability of TMN or any member of the IBG Group

to integrate or co-ordinate its business, or any part of it, with the

businesses or any part of the businesses of TMN and/or any member of the

IBG Group; or

viii. otherwise adversely affect any or all of the businesses, assets,

prospects or profits of any member of TMN or the IBG Group; and all applicable waiting and other time periods during which any such regulatory body could institute, or implement or threaten any legal proceedings, having expired, lapsed or been terminated;

Consequences of the Scheme

Save as Disclosed, there being no provision of any agreements to which any member of the IBG Group is a party, or by or to which any such member, or any part of its assets, may be bound, entitled or subject, which would or might, in each case as a consequence of the Scheme, its implementation or of the acquisition or proposed acquisition of all or any part of the issued share capital of, or change of control or management of, IBG or any other member of the IBG Group reasonably be expected to result (in each case to an extent which is material to TMN in the context of the Scheme or, as the case may be, in the context of the IBG Group taken as a whole) in:

i. any material assets or interests of any member of the IBG Group being or

falling to be disposed of or charged in any way or ceasing to be available to any member of the IBG Group or any rights arising under which any such asset or interest could be required to be disposed of or charged in any way or could cease to be available to any member of the IBG Group otherwise than in the ordinary course of business; or

ii. any monies borrowed by or other indebtedness (actual or contingent) of, or

any grant available to, any member of the IBG Group being or becoming repayable or capable of being declared repayable immediately or earlier than the repayment date stated in such agreement or the ability of such member of the IBG Group to incur any such borrowing or indebtedness becoming or being capable of becoming withdrawn, inhibited or prohibited; or

iii. any such agreement or the rights, liabilities, obligations or interests of

any such member under it being terminated or adversely modified or affected

or any onerous obligation arising or any adverse action being taken under

it; or

iv. the interests or business of any such member in or with any third party (or

any arrangements relating to any such interests or business) being

terminated or adversely modified or affected; or

v. the financial or trading position of any member of the IBG Group being

prejudiced or adversely affected; or

vi. the creation of any mortgage, charge or other security interest over the

whole or any part of the business, property or assets of any member of the

IBG Group or any such security (whenever arising or having arisen) becoming

enforceable or being enforced; or

vii. any member of the IBG Group ceasing to be able to carry on business under

any name under which or on the terms on which it currently does so or any

person presently not able to carry on business under any name under which

any member of the IBG Group currently does becoming able to do so; or

viii. the creation of actual or contingent liabilities by any member of the IBG

Group;

No Corporate Action Taken Since the Accounting Date

Since the Accounting Date, save as otherwise Disclosed or pursuant to transactions in favour of IBG or a wholly-owned subsidiary of IBG or pursuant to transactions between members of the IBG Group otherwise pursuant to the Scheme, no member of the IBG Group having (to an extent which is material and adverse in the context of the IBG Group taken as a whole):

i. issued or agreed to issue or authorised or proposed the issue or grant 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 convertible securities (save pursuant to the exercise of options granted or the exercise of rights under the IBG Share Scheme); or

ii. redeemed, purchased, repaid or reduced or proposed the redemption,

purchase, repayment or reduction of any part of its share capital or made

or proposed the making of any other change to its share capital; or

iii. recommended, declared, paid or made or proposed to recommend, declare, pay

or make any dividend, bonus issue or other distribution whether payable in

cash or otherwise; or

iv. merged or demerged with or from, or acquired, any body corporate or

authorised or proposed or announced any intention to propose any such

merger or demerger; or

v. other than in the ordinary course of business acquired or disposed of,

transferred, mortgaged or charged, or created or granted any security interest over, any assets (including shares and trade investments) or authorised or proposed or announced any intention to propose any acquisition, disposal, transfer, mortgage, charge or creation or grant of any security interest; or

vi. issued or authorised or proposed the issue of any debentures or incurred or

save in the ordinary course of business increased any borrowings,

indebtedness or liability (actual or contingent) of any aggregate amount

which is material in the context of the IBG Group as a whole; or

vii. entered into or varied, or authorised or proposed the entry into or

variation of, or announced its intention to enter into or vary, any material transaction, arrangement, contract or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, onerous or unusual nature or magnitude or could involve an obligation of such nature or magnitude or which is or could be restrictive to the existing business of any member of the IBG Group or which is other than in the ordinary course of business (save pursuant to the IBG Options (if any)); or

viii. entered into, implemented, effected, authorised or proposed or announced

its intention to enter into, implement, effect, authorise or propose any contract, reconstruction, amalgamation, scheme, commitment or other transaction or arrangement otherwise than in the ordinary course of business; or

ix. waived or compromised any material claim; or

x. entered into or varied or made any offer (which remains open for

acceptance) to enter into or vary the terms of any material contract with any of the directors or senior executives of IBG or any of the directors or senior executives of any other member of the IBG Group (save pursuant to the IBG Options (if any)); or

xi. taken any corporate action or had any legal proceedings instituted or

threatened against it or petition presented for its winding-up (voluntary or otherwise), dissolution or reorganisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of all or any material part of its assets and revenues or for any analogous proceedings or steps in any jurisdiction or for the appointment of any analogous person in any jurisdiction which in any case is material in the context of the IBG Group taken as a whole; or

xii. been unable, or admitted in writing that it is unable, to pay its debts or

has stopped or suspended (or threatened to stop or suspend) payment of its

debts generally or ceased or threatened to cease carrying on all or a

substantial part of its business; or

xiii. made any material alteration to its memorandum or articles of

association, or other incorporation documents; or

xiv. in relation to the pension schemes established for its directors and/or

other employees and/or their dependants, made or consented to any change

to:

xv. + the terms of the trust deeds constituting such pension schemes or to the benefits which accrue; + the pensions which are payable, under them; + the basis on which qualifications for or accrual of or entitlement to such benefits or pensions are calculated or determined; + the basis upon which the liabilities (including pensions) of such pension schemes are funded or made; + or agreed or consented to any change to the trustees of such pension schemes; or

xv. entered into any agreement or passed any resolution or made any offer

(which remains open for acceptance) or proposed or announced any intention

with respect to any of the transactions, matters or events referred to in

this condition;

Other Events Since the Accounting Date

In the period since the Accounting Date, save as Disclosed:

i. other than in the ordinary course of business no litigation or arbitration

proceedings, prosecution, investigation or other legal proceedings having been announced, instituted, threatened or remaining outstanding by, against or in respect of, any member of the IBG Group or to which any member of the IBG Group is or may become a party (whether as claimant, respondent or otherwise) which is material in the context of the IBG Group taken as a whole; or

ii. no adverse change or deterioration having occurred in the business or

assets or financial or trading position, assets or profits of any member of

the IBG Group which is material in the context of the IBG Group taken as a

whole; or

iii. no enquiry or investigation by, or complaint or reference to, any relevant

person against or in respect of any member of the IBG Group having been threatened in writing, announced, implemented or instituted or remaining outstanding by, against or in respect of, any member of the IBG Group which in any such case is material in the context of the IBG Group taken as a whole; or

iv. no contingent or other liability having arisen or become apparent or

increased which is material in the context of the IBG Group taken as a

whole;

Other issues

Save as Disclosed, TMN not having discovered that:

i. Information

* The financial, business or other information Disclosed at any time by any

member of the IBG Group, whether publicly or in the context of the Scheme,

either contained a material misrepresentation of fact or omitted to state a

fact necessary to make the information disclosed not materially misleading

and such information not being subsequently corrected or remedied;

ii. Intellectual Property

* any member of the IBG Group does not own or have licensed to it or

otherwise possess legally enforceable rights to use all intellectual

property that is (a) required for the conduct of business of the relevant

member of the IBG Group as currently conducted; or (b) under development

for such business; and, in either case, the absence of which, individually

or in the aggregate, would be material in the context of the IBG Group

taken as a whole; or

* any member of the IBG Group has infringed any intellectual property rights

of any third party where the consequences of which would be material in the

context of the IBG Group taken as a whole; or

3. TMN may waive (wholly or partly) all or any of the conditions in paragraph

2. (Authorisations) above.

4. If TMN is required by the Panel to make an offer or offers for the IBG

Shares under the provisions of Rule 9 of the City Code, TMN may make such

alterations to the terms and conditions of the Acquisition as may be

necessary to comply with the provisions of that Rule.

5. The Acquisition will not complete and the Scheme will not become effective

if before the date of the Court Meeting, the Acquisition, or any matter

arising from it, is referred to the Competition Commission. In such

circumstances, the Scheme will be withdrawn and will lapse.

6. The Acquisition and the Scheme are governed by English law and are subject

to the jurisdiction of the English Courts. The rules of the City Code, so

far as they are appropriate, apply to the Acquisition and the Scheme.

Appendix II

Sources of Information and Bases of Calculation

Unless otherwise stated, the following constitute the bases and sources of information referred to in the Scheme and this announcement:

1. Financial information relating to IBG has been extracted or derived

(without material adjustment) from the audited financial statements of IBG

for the financial year ended 31 October 2006, and the preliminary statement

of annual results for the financial year ended 31 October 2007

2. Financial information relating to TMN has been extracted or derived

(without material adjustment) from the audited financial statements of TMN

for the year ended 30 April 2007, and from the unaudited interim statement

for the six months ended 31 October 2007.

3. The value of IBG for the purposes of the Acquisition is calculated:

i. by reference to a price of 48 pence per TMN Share (being the Closing Price

of a TMN Share on 13 December 2007, the last business day prior to the date

of this announcement); and

ii. by reference to a price of 12.75 pence per IBG Share (being the Closing

Price of an IBG Share on 13 December 2007, the last business day prior to

the date of this announcement); and

1. The fully diluted share capital of IBG (being 79,138,010 IBG Shares) is

calculated on the basis of 77,190,800 IBG shares in issue on 13 December 2007, with a further maximum of 1,947,210 IBG shares under option which are either capable of exercise or will become capable of exercise prior to the Scheme Record Time :

2. The percentage that IBG Directors will be interested in, in aggregate, of

TMN's enlarged issued share capital is calculated on the following basis:

i. by reference to TMN's existing issued share capital of 51,092,351 TMN

Shares; and

ii. by reference to IBG's existing issued share capital of 77,190,800 IBG

Shares

1. The market capitalisation of the Enlarged Group is calculated on the basis

of the number of TMN Shares in issue on 13 December 2007, being 51,092,351, and 20,503,806 New TMN Shares being issued pursuant to the Acquisition, based on the Closing Prices as set out in paragraphs 3(i) and(ii) above, which assumes that no options over TMN and IBG Shares as at 13 December 2007 are exercised thereafter.

2. There are currently options outstanding in respect of 315,000 unissued IBG

Shares whose exercise price is below the Option Price

3. The Closing Price of an IBG Share (or a TMN Share (as the case may be)) is

derived from the AIM Appendix of the Daily Official List for 13 December

2007.

Appendix III

Details of Irrevocable Undertakings

TMN has received irrevocable undertakings to vote (or procure the vote) in favour of the Scheme in respect of, in aggregate 37,350,270 IBG Shares, representing approximately 48.39 per cent. of IBG's existing issued share capital. This includes irrevocable undertakings from certain of the IBG Directors and Connected Parties in respect of 28,649,270 IBG Shares, representing approximately 37.11 per cent. of IBG's existing issued share capital held by them and by the Connected Parties, as follows:

Name Number of IBG Shares Percentage of existing issued share capital of IBG Directors Maziar Darvish 17,318,283 22.44% Daniel Chick 3,688,233 4.78% Nicola De Oliveira Costa 1,923,243 2.49% Ricki Bothamley 1,224,722 1.59% Pierre Jean De Villiers 955,835 1.24% Andrew Doe 200,000 0.26% Connected Parties Kamal Darvish 1,896,394 2.46% Niloufar Darvish 1,404,800 1.82% Salimeh Mahshid Darvish 37,760 0.05%

The undertakings given by the IBG Directors and Connected Parties are conditional on the despatch of the Scheme Document within 28 days of the date on which this announcement is made, being 14 December 2007.

Other irrevocable undertakings to vote in favour of the Scheme have been given by:

Registered Holder Beneficial Number of IBG Percentage of existing

Holder Shares issued share capital of IBG William Currie William Currie 2,650,000 3.43% William Currie William Currie 200,000 0.26% Pension Fund Hargreave Hale Ltd Marlborough 2,350,000 3.04% Special Situations Fund Hargreave Hale Ltd Marlborough UK 2,000,000 2.59% MIcroCap Growth Fund Hargreave Hale Ltd Keydata AIM VCT 1,501,000 1.94%

Appendix IV

Definitions of terms used

In this announcement, the following words and expressions have the following meanings, unless the context requires otherwise:

"Accounting Date" 31 October 2007 "Acquisition" the proposed acquisition by TMN of the entire issued and to be issued share capital of IBG pursuant to the Scheme "Act" the Companies Act 1985 (as amended or re-enacted) "acting in concert" has the meaning set out in the Code "Admission" the admission of the New TMN Shares to trading on AIM becoming effective in accordance with the AIM Rules "agreements" arrangements, agreements, commitments, licences, permits, franchises, partnerships, joint ventures, authorisations or other instruments "AIM" AIM, a market operated by the London Stock Exchange "AIM Rules" the AIM Rules for Companies published by the London Stock Exchange (as amended) "Articles" the articles of association of IBG as at the date of the Scheme and Article shall mean any article of those Articles "authorisations" authorisations, orders, recognitions, grants, consents, licences, confirmations, clearances, permissions and approvals "Business Day" a day (excluding Saturdays, Sundays and public holidays) on which banks are generally open for business in the City of London "Capital Reduction" the proposed reduction of the share capital of IBG pursuant to the Scheme as described in this announcement "certificated" or "in where a share or other security is not in certificated form" uncertificated form (that is, not in CREST) "Code" or "City Code" the City Code on Takeovers and Mergers, issued by the Panel on Takeovers and Mergers "Court" the High Court of Justice in England and Wales "Closing Price" the closing middle market quotation of an IBG Share or a TMN Share (as the case may be) as derived from the AIM Appendix of the Daily Official List

"Competition Commission" the Competition Commission established under the

Competition Act 1998 "Conditions" the conditions to the Scheme and the Acquisition which are set out in Part III of this announcement "Connected Parties" Kamal Darvish, Niloufar Darvish and Salimeh Mahshid Darvish "Conventional Offer" Should TMN so elect and IBG consent, a takeover offer to be made by or on behalf of TMN to acquire all of "Court Hearings" the IBG Shares each of the Scheme Court Hearing and the Reduction Court Hearing "Court Meeting" the meeting of the Scheme Shareholders to be convened pursuant to an order of the Court pursuant to section 425 of the Act for the purposes of considering and, if thought fit, approving the Scheme (with or without amendment) and any adjournment of such meeting "Court Orders" the Scheme Court Order and/or the Reduction Court Order "CREST" the relevant system (as defined in the CREST Regulations) of which Euroclear is the Operator (as defined in the CREST Regulations) "CREST Manual" the CREST Manual referred to in agreements entered into by Euroclear "CREST payment" has the meaning given in the CREST Manual "CREST Regulations" the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755) "CREST sponsor" a CREST participant admitted to CREST as a CREST sponsor "Daily Official List" the daily official list of the London Stock Exchange "Disclosed" means: (i) as disclosed in IBG's report and accounts for the year ended 31 October 2006; (ii) as publicly announced by IBG to a Regulatory Information Service; (iii) as may be disclosed in this announcement; or (iv) as fairly disclosed in writing by or on behalf of IBG to TMN or its advisers "disclosure period" the 12 month period commencing on the date on which the Offer Period commences "EDR" Electronic Direct Response plc, now re-registered with the name Electronic Direct Response Limited "Effective" in the context of the Acquisition the Scheme having become Effective pursuant to its terms "Effective Date" the date on which the Scheme becomes effective in accordance with its terms "Enlarged Group" the TMN Group after completion of the Acquisition "Euroclear" Euroclear UK & Ireland Limited

"Explanatory Statement" the explanatory statement relating to the Scheme, as

set out in Part II of the Scheme Document, which together with the documents incorporated therein constitute the explanatory statement relating to the Scheme as required by section 426 of the Act "Forms of Proxy" as the context may require, either or both of (i) the blue form of proxy for use at the Court Meeting, and (ii) the white form of proxy for use at the General Meeting, each of which accompanies the Scheme Document "FSA" the Financial Services Authority "FSMA" the Financial Services and Markets Act 2000 (as amended) "General Meeting" the General Meeting of IBG Shareholders to be held at for the purpose of the Acquisition, notice of which will be set out in the Scheme Document, and any adjournment of such meeting "holder" a registered holder of shares, including any person entitled by transmission "IBG" means Internet Business Group plc (registered number 03718515) whose registered office is situated at Threeways House, 40-44 Clipstone Street, London, W1W 5DW "IBG Board" or "IBG the directors of IBG, being Maziar Darvish, Pierre Directors" Jean De Villliers, Daniel Chick, Ricki Bothamley, Nicola de Oliveira Costa and Andrew Doe, and "IBG Director" means any one of them "IBG Group" IBG and its subsidiaries, subsidiary undertakings, associated undertakings and any other undertakings in which IBG and/or such subsidiaries or undertakings (aggregating their interests) have a substantial interest "IBG Options" an option, award or other right over an IBG Share granted pursuant to the terms of the IBG Share Scheme "IBG Optionholders" the holders of IBG Options pursuant to the IBG Option Scheme "IBG Shareholders" the holders of IBG Shares "IBG Shares" ordinary shares of 1 pence each in the issued share capital of IBG "IBG Share Scheme" means the 2000 Executive Share Option Scheme (as adopted by IBG on 2 March 2000) "IBG Competing means a general offer for the IBG Shares or business Transaction" or all or a material part of the assets of IBG or any proposal for a merger of IBG (including by way of a scheme of arrangement) with any entity other than TMN, or an associate or concert party of TMN "IFRS" International Financial Reporting Standards "Implementation the agreement dated 13 December 2007 between TMN and Agreement" IBG and relating, among other things, to the implementation of the Acquisition further details of which are set out in this announcement

"Intellectual Property" all patents, trademarks, trade names, service marks,

copyrights, designs, databases and any applications therefore, schematics, technology, know how, computer software, programs or applications (in both source code and object code form), and tangible or intangible proprietary information or material has the meaning set out in Appendix 1 to this announcement "interest" as defined in the Code "Investec" Investec Bank (UK) Limited "legal proceedings" actions, suits, proceedings, investigations, references or enquiries "London Stock Exchange" London Stock Exchange plc "Meetings" the Court Meeting and the General Meeting and "Meeting" means either of them "members" members of IBG on the register of members at any relevant date "Memorandum" the memorandum of association of IBG "Minute" the minute (approved by the Court) showing, as altered by the Reduction Court Order, the information required by section 138 of the Act with respect to IBG's share capital "New IBG Shares" the new ordinary shares of 1 pence each in the capital of IBG to be allotted and issued credited as fully paid to TMN pursuant to the Scheme "New TMN Shares" the new ordinary shares of ‚£0.0001 each in the capital of TMN to be allotted and issued credited as fully "Offer" paid to Scheme Shareholders pursuant to the Scheme the recommended offer being made by TMN to acquire the entire issued and to be issued share capital of IBG, which offer is to be effected by means of the Scheme and, where the context requires, any subsequent revision, variation, extension or renewal of such offer "Offer Period" the period commencing on the date of this announcement and ending on the Effective Date "Official List" the official list of the UK Listing Authority

"Overseas Shareholders" Scheme Shareholders who are resident in, ordinarily

resident in, or citizens of, jurisdictions outside the United Kingdom "Panel" the Panel on Takeovers and Mergers "participant ID" means the identification code or membership number used in CREST to identify a particular CREST member or other CREST participant "pounds", "‚£", "pence" the lawful currency of the United Kingdom or "Sterling"

"Reduction Court Order" the order of the Court confirming the Capital

Reduction

"Registrar of Companies" the Registrar of Companies in England and Wales,

within the meaning of the Act

"Registrars" or "Capita IBG's registrars, Capita Registrars, a trading name of Registrars"

Capita Registrars Limited, of The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU "Regulatory Information as defined in the AIM Rules Service" or "RIS" "relevant asset" land, property or other asset now or previously owned, occupied or made use of by any past or present member of the IBG Group "relevant persons" governments, governmental, quasi governmental, supranational, statutory, investigative, regulatory or administrative bodies or trade agencies, associations, institutions or courts, or professional or environmental bodies, or any other persons or bodies whatsoever in any jurisdiction "Relevant Court the hearings by the Court of the petition to approve Hearings" the Scheme and confirm the Capital Reduction "Scheme" the scheme of arrangement under section 425 of the Act between IBG and the Scheme Shareholders to implement the Acquisition, with or subject to any modification thereof or addition thereto or condition approved or imposed by the Court and agreed by IBG and TMN

"Scheme Court Hearing" the hearing by the Court of the petition to sanction

the Scheme

"Scheme Court Order" the order of the Court sanctioning the Scheme under

Section 425 of the Act "Scheme Document" the document to be sent by IBG to the IBG Shareholders, of which the Scheme forms part

"Scheme Record Time" 6 p.m. on the business day immediately preceding the

Effective Date

"Scheme Shareholders" holders of a Scheme Share, and a "Scheme Shareholder"

shall mean any one of these Scheme Shareholders "Scheme Shares" IBG Shares: (i) in issue at the date of this announcement; (ii) issued after the date of the Scheme Document, but before the Voting Record Time; and (iii) issued at or after the Voting Record Time but before the Scheme Record Time on terms that the original or any subsequent holders are, or shall have agreed in writing to be, bound by the Scheme "SDRT" stamp duty reserve tax "SEC" the United States Securities and Exchange Commission "Securities Act" the United States Securities Act 1933, as amended and the rules and regulations promulgated under such Act "securities" has the meaning set out in the Code

"Special Resolutions" the special resolutions to be proposed at the General

Meeting and to be set out in the notice of General Meeting attached to the Scheme Document "Strand Partners" Strand Partners Limited

"substantial interest" a direct or indirect interest in 20 per cent. or more

of the equity capital of an undertaking "Takeover Offer" an offer made or to be made by or on behalf of TMN for the entire issued and to be issued share capital of IBG and, where the context so requires, any subsequent revision, extension or variation thereof "TMN" TMN Group plc "TMN Board" or the board of directors of TMN "TMN Competing means (a) a general offer for the TMN Shares or Transaction" business or all or a material part of the assets of TMN (including by way of a scheme of arrangement) with any "TMN Directors" entity other than IBG and/or (b) any transaction outside the ordinary course of business that would require announcement or notification by TMN pursuant to the AIM Rules Mark Smith, Craig Dixon, Peter Harkness, Vincent Smith and Bruce Fair "TMN Group" TMN and its subsidiaries, subsidiary undertakings, associated undertakings and any other undertakings in which TMN and/or such subsidiaries or undertakings (aggregating their interests) have a substantial interest "TMN Shareholders" the holders of TMN Shares "TMN Shares" ordinary shares of ‚£0.0001 each in the issued share capital of TMN

"US" or "United States" the United States of America, its territories and

possessions, any state of the United States of America and the District of Columbia and all other areas subject to its jurisdiction "US person" as defined in Regulation S under the Securities Act

"US Securities Act" the United States Securities Act of 1933, as amended

from time to time

"Voting Record Time" 6 p.m. on the day which is two days before the date

scheduled for the Court Meeting or, if such Court Meeting is adjourned, 6 p.m. on the day which is two days before the date of such adjourned meeting

In this announcement, the expressions "subsidiary, "subsidiary undertaking, associated undertaking and "undertaking" have the meanings given by the Act (but for this purpose ignoring paragraph 20(l)(b) of Schedule 4A to the Act).

In this announcement, the references to the singular includes the plural and vice versa, unless the context otherwise requires. References to time are to London time.