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FOR IMMEDIATE RELEASE

Letter to Shareholders

Gladstone plc

('Gladstone' or the 'Company')

The Chairman and Chief Executive of Gladstone, Dr Said Ziai, wrote to shareholders yesterday in relation to the Board's recommendation to vote against the resolution being proposed at the general meeting of the Company to be held on 16 March 2009. The full text of the letter is set out below.

'

3 March 2009

Dear Shareholder,

Urgent: To Protect your interest in Gladstone

VOTE AGAINST the resolution to appoint Mark Leonard as a director of Gladstone (the 'Resolution')

Whilst a substantial majority of Gladstone shareholders rejected Constellation's inadequate and hostile offer for Gladstone at the end of last year, Constellation has not given up its campaign to pursue its own interests at the expense of other shareholders and to take control of Gladstone on the cheap.

On Friday, 27 February 2009, at Gladstone's Annual General Meeting (the 'AGM'), Constellation voted against key company resolutions which were accepted by the majority of the other Gladstone shareholders whose votes were taken. In particular, Constellation voted against the re-election of Gladstone's Finance Director, requiring him to step down, removed the Company's ability to sell its treasury shares for cash (other than to current shareholders on a pre-emptive basis), denied the Board the flexibility to make market purchases of its shares and prevented the Company from adopting revised articles of association to reflect the new legislation embodied in the Companies Act 2006. In a reckless act, Constellation voted to:

• Remove Nicholas Montgomery as Finance Director: Nicholas Montgomery is an integral part of the management team. No questions were raised by Constellation before or during the AGM as to his role or performance. The Board has demonstrated consistency in preserving the financial strength of the Group whilst strategically investing in critical business areas. This gives Gladstone many options for growth in the future, despite the current challenging economic conditions. What possible reasons could Constellation have for removing the Finance Director in these circumstances? The Board believes such action is indicative of Constellation's desire to pursue its own agenda against the interests of the Company as a whole and of the majority of Gladstone's other shareholders.

• Prevent Gladstone from selling its treasury shares for cash: Constellation has, by its actions, prevented a targeted cash sale of the shares Gladstone currently holds in treasury, notwithstanding that this may be for the benefit of all other shareholders. The Board believes Constellation's vote against this resolution was motivated by its own desire to prevent any dilution of its shareholding and not by any consideration of the Company's long-term best interests.

• Prevent Gladstone from making market purchases of its shares: At the AGM, the Board also sought shareholder approval to make market purchases of Gladstone shares, subject to certain limitations. This resolution was again blocked by Constellation, denying the Board the flexibility to enhance shareholder value by managing effectively the Company's capital and reserves over the coming 12 months.

• Prevent Gladstone's articles of association from being properly updated to reflect the Companies Act 2006: At the AGM, we asked shareholders to approve a number of amendments to our articles of association that were intended primarily to take account of changes in English company law brought about by the Companies
  

  Act 2006 (including in relation to the regulation of conflicts of interest). In its letter to shareholders dated 25 February, Constellation stated that it would vote against the adoption of the revised articles and made several allegations regarding Gladstone's corporate governance and the Board's management of conflicts of interest. Not only does the Board believe these allegations to be wholly without substance, but the Board also believes Constellation's opposition to the adoption of the new articles of association was a deliberate measure aimed at enabling it, through its significant minority shareholding, to have effective control over issues of conflicts of interest, each of which must now (following the failure of the resolution to adopt the revised articles) be put to a shareholder vote instead of being managed by the Board. The question of how the Company will manage conflicts of interest in the event of Mark Leonard's appointment as a director is an issue which your Board has previously highlighted as being of real concern if the Resolution is carried.
  

If you have not yet voted on the Resolution (or if you have voted in favour and now wish to change your proxy instruction), to protect your interest in Gladstone, the Board now asks you to VOTE AGAINST the Resolution by using the attached green proxy form. Please ignore the form sent to you by Constellation on 25 February requesting their form to be sent to their advisers. Constellation's advisers are under no obligation to forward your voting instructions to the Registrar and your vote could be lost. Should you need any help with regards to this note, you can call the shareholder helpline on 01491 202111. In order to ensure receipt of your completed green proxy form in good time, it should be submitted as soon as possible, and in any event by no later than 12.00 pm on Wednesday 11 March 2009.

If you have not received or seen a copy of the circular and notice of general meeting, a copy can be viewed or downloaded from the Company's website

at www.gladstoneplc.com and by clicking on the 'Latest News' tab where you will see the links to the published documents.

Thank you for your assistance.

Yours sincerely, 

Dr. Said Ziai

Chairman and Chief Executive Officer'

- Ends -

For further information:    

 

Gladstone plc
Dr. Said Ziai, Chairman and Chief Executive	Tel: +44 (0) 1491 201010
	www.gladstoneplc.com

Financial Adviser and Nominated Adviser to Gladstone:
Grant Thornton UK LLP
Charles Cattaneo	Tel: +44 (0) 7774 276 512
Ian Stanway	Tel: +44 (0) 121 232 5193
Gerry Beaney	Tel: +44 (0) 20 7728 2589

Broker to Gladstone:
Fairfax I.S. PLC
Adam Hart / Laura Littley	Tel: +44 (0)20 7598 5368

Media enquiries: 

Abchurch Communications Limited
Henry Harrison-Topham / Monique Tsang	Tel: +44 (0) 20 7398 7712
monique.tsang@abchurch-group.com	www.abchurch-group.com

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