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18 May 2010

Liberty Plc ("Liberty")

RESPONSE TO LIBERTY'S ANNOUNCEMENT

Pyrrho Investments Limited ("Pyrrho") notes the announcements made by Liberty on 14 May and 17 May in response to Pyrrho's announcement that it has made a proposal to Liberty's board that it wishes to make an offer for the entire issued and to be issued share capital of Liberty at a higher aggregate price than the possible offer by BlueGem Capital Partners LLP ("BlueGem") that was announced on 7 May.

For the benefit of the shareholders of MWB Group Holdings plc ("MWB") and Liberty, Pyrrho wishes to respond to and clarify a number of assertions that were made in the announcements by Liberty:

1. Pyrrho's initial proposal to Liberty on 4 May was not "highly conditional"

As stated in Pyrrho's announcement on 14 May, this initial proposal was subject to standard due diligence pre-conditions. These were discussed in a meeting between Arbuthnot Securities Limited ("Arbuthnot"), Pyrrho's advisers, and Panmure Gordon ("Panmure"), MWB's advisers, in the morning of 5 May. During this meeting, Arbuthnot represented that these due diligence pre-conditions were capable of being addressed in a very short timescale, primarily by arranging a meeting between the respective parties.

2. The risk to Liberty of BlueGem's possible proposed offer falling away was not material

On 6 May, Pyrrho made an approach to Liberty with a revised proposal which was not subject to any due diligence pre-conditions. Pyrrho subsequently discovered that this revised proposal was only 1p per Liberty share less than BlueGem's revised proposed offer of 186p.

If Liberty had agreed to negotiate with Pyrrho, even if BlueGem's revised proposed offer had fallen away, the downside to Liberty shareholders was only approximately GBP230,000, a difference of 0.5% in a transaction of over GBP43million. Pyrrho's revised proposal at 185p was open for the Liberty board's acceptance until 5pm on 7 May.

Pyrrho believes that it remains in Liberty shareholders' interests for the Liberty board to explore a possible offer from Pyrrho.

3. a) Pyrrho was never told that a higher offer existed

On 3 May Pyrrho was informed that BlueGem had made an offer for Liberty (the "Original BlueGem Offer"). On 6 May Pyrrho made an unconditional offer at a higher price than the Original BlueGem Offer. At no time did Panmure or Liberty's advisers Cavendish Corporate Finance ("Cavendish") inform Pyrrho that Liberty had received an offer higher than Pyrrho's 185p unconditional offer. Pyrrho naturally assumed that it remained the highest bidder, and therefore saw no reason to raise its offer. Pyrrho was only aware of the higher offer when an email was sent to Arbuthnot 13 minutes prior to the publication of the announcement at 7am on 7 May that Liberty had received an offer of 186p from BlueGem.

b) 185p was not Pyrrho's highest offer

In the early afternoon of 6 May, Panmure telephoned Arbuthnot to ask if 185p was Pyrrho's highest offer. Unaware that BlueGem had made or were intending to make a higher offer, Arbuthnot replied that "this (i.e.185p) is an offer that we are able to deliver on today", leaving the door open for further negotiation.

At no time did Arbuthnot state that 185p was Pyrrho's highest offer.

This brief statement by Arbuthnot should not have been construed or interpreted by Panmure (particularly without having sought clarification from Pyrrho or its advisers) as confirmation that "Pyrrho was not prepared to increase that offer on an unconditional basis above 185 pence" as was stated in Liberty's announcement on 14 May.

Subsequent to the aforementioned telephone conversation between Panmure and Arbuthnot, between 4 pm and 8 pm on 6 May, Arbuthnot chased Panmure and Cavendish several times, via e-mails and telephone messages, in an earnest attempt to obtain an update on the status of Liberty board's decision-making process, and to try to ascertain if there was a higher offer.

It must have been obvious to Cavendish, Liberty's advisers, that the numerous attempts that Arbuthnot made to discuss the proposed Pyrrho offer with them during the afternoon of 6 May indicated that they were in a position to provide further information to Liberty and its advisers, which could have benefited Liberty and MWB's shareholders.

4. The Liberty and MWB boards did not sufficiently consider the Pyrrho Offer

Pyrrho is surprised that, since it first indicated its interest in making a possible offer for Liberty on 4 May, neither MWB nor Liberty made any attempt to contact Pyrrho to discuss this or to arrange a meeting. In addition, MWB's advisers and Liberty's advisers made no proactive attempt to enter into any discussions with Pyrrho's advisers.

We understand that some time after receipt by Liberty of the higher 185p per share offer from Pyrrho on 6 May, BlueGem restructured its bid (i.e. materially enlarging the Liberty special dividend and shrinking BlueGem's cash offer component, compared to BlueGem's original bid), culminating in a revised BlueGem bid that is, in the aggregate, a mere 1p per share above Pyrrho's unconditional offer.

Pyrrho was given no opportunity to respond to BlueGem's revised offer, a privilege afforded to BlueGem in response to Pyrrho's unconditional offer of 185p. Pyrrho cannot understand, in light of the incremental difference between Pyrrho's unconditional offer of 185p and BlueGem's revised offer of 186p being so small, why the Liberty Board and its advisers did not invite competing potential acquirers to bid against each other in another competitive round in order to achieve a higher final offer price.

Pyrrho believes that this was an inappropriate manner in which to consider a matter as important as a potential offer for Liberty.

5. Liberty's advisers did indicate to Pyrrho's advisers that they would update them on any developments in this matter

This assertion was made both verbally and in an email by Cavendish at 3.20pm on 6 May to Arbuthnot.

6. Pyrrho showed interest in a bid for Liberty once it became aware of potential terms

Pyrrho has watched the efforts of the Liberty management team and MWB to elicit offers for Liberty since its strategic review was announced in July 2009. Pyrrho would have put forward this proposal earlier had it been aware of the level of offer that Liberty's board and MWB were willing to recommend and accept. Pyrrho made its initial approach to Liberty on 4 May one day after becoming aware of this information.

Improved Proposal

Further to its announcement on 14 May, Pyrrho reiterates that it has made a revised proposal to Liberty's board that it wishes to make an offer for the entire issued and to be issued share capital of Liberty at a higher aggregate price than BlueGem's aggregate 186p per share offer.

For further information, please contact:

Arbuthnot Securities Limited

Nick Tulloch Tel: +44 (0) 207 012 2000

Ben Wells

Ed Gay

Hogarth PR

Reg Hoare Tel: +44 (0) 7884 494112

Katie Hunt +44 (0) 207 357 9477

Ian Payne

Copies of this announcement are available on the London Stock Exchange website

www.londonstockexchange.com

Disclosure requirements of the Takeover Code (the "Code")

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any paper offeror, must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4). Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.