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The Niche Group Plc ('Niche' or 'the Company')

The Purchase of an Interest and Option in Ely Management Operations Limited ('EMO')

Niche is pleased to announce that it has today entered into a Sale and Purchase agreement together with a further option ('SP&O') with the shareholders of EMO.

Under the terms of the SP&O, Niche has purchased 5.5% of the issued share capital of EMO (the 'Initial Purchase') in consideration of the issue to the EMO shareholders of 46,255,674 new ordinary shares of 1p each in Niche ('New Ordinary Shares').  After the Initial Purchase, EMO shareholders will own 29% of the enlarged issued share capital in Niche.  

In addition, under the terms of the SP&O, Niche has been granted an option (the 'Further Option') to purchase the balance of the outstanding issued share capital of EMO in consideration of the issue by Niche of 794,756,580 new ordinary shares of 1p each in Niche ('Consideration Shares') to the EMO shareholders.  Should Niche choose to exercise the Further Option, the transaction is likely to be deemed a reverse takeover pursuant to Rule 14 of the AIM Rules for Companies. As such, before exercising the further option, Niche will require the approval of its shareholders in a General Meeting.  

EMO Shareholders have undertaken to the Company, subject to certain exceptions in accordance with, inter alia, the AIM Rules for Companies (including the ability to accept a take-over offer for the Company and to give an irrevocable undertaking to accept a takeover offer for the Company), not to dispose of or transfer any Ordinary Shares in which they are interested for a period of 12 months from admission of the shares. 

EMO Shareholders have undertaken to the Company only to dispose of Ordinary Shares in which they are interested through the Company's broker for a further 12 months from the end of the lock-in period referred to above.

The exercise of the Further Option is also subject to the following:

• completion of satisfactory further due diligence by Niche on the business of EMO; 

• approval by the Company's Board; 

• the Company raising not less than £500,000 through the issue of a convertible loan note; and/or placing at 1p and

•  the admission of the Consideration Shares to AIM. 

The exercise of the Further Option is also subject to the granting by the Panel on Takeovers and Mergers of a Rule 9 waiver in respect of the issue of the Consideration Shares.  Following a successful completion of the exercise of the Further Option, the EMO shareholders will hold approximately  88% of the enlarged share capital of Niche.

EMO is a recently incorporated company, which has taken over the operations and management of Verum Way Limited ('Verum').

Verum completed the management buy-out of Ely Property Group Limited ('Ely') and its subsidiaries from Newcourt Group Plc ('Newcourt') in December 2008. 

Ely develops, owns, operates and manages student accommodation in Ireland and the UK. It currently operates 2,500 beds in Ireland and the UK. Ely has a pipeline in various stages of negotiation and development of a further 2,000 beds.

EMO has entered into management service agreements to operate and manage all of Ely's current student accommodation as well as an agreement to operate and manage any and all of Ely's future developments. On the current accommodation, the gross rent has historically been €5.36m on which the Company charges 11 per cent. commission.

The ultimate shareholders of Verum are Philip Marley, Brian Winters and Hamilton International Limited ('Hamilton').  Philip Marley was the original founder of Ely, which was admitted to AIM in 2005, and joined the board of Newcourt when Ely was sold to it in 2006.

Upon the completion of the initial purchase, Ronnie Stirling will resign from the Board of Niche.

In addition to the issue of shares to EMO shareholders, Niche is issuing a further 10,295,150 new ordinary shares to Baisden Investments Limited ('Baisden') ('Baisden Shares') in consideration of the services provided by Baisden in connection with the proposed acquisition by the Company of shares in the capital of EMO.

The New Ordinary Shares and the Baisden Shares are expected to admit to trading on 23 July 2009. Following admission, the Company will have 159,502,324 Ordinary Shares in issue all of which all carry voting rights. This figure may be used by shareholders of the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or change their interest in, the share capital of the Company.

Following admission of the new Ordinary Shares and the Baisden Shares, Verum, Hamilton and Baisden will have a notifiable interest in issued share capital of the Company of 24.65 per cent., 4.35 per cent. and 6.45 per cent. respectively.

Christopher Stainforth, Chairman of the Niche Group Plc said:

'I am extremely pleased to announce this initial investment in EMO. If concluded the acquisition of the whole of EMO will provide the first step towards diversifying the company's investments into bed management. We have known the management of EMO for some time and look forward to working with them with a view to completing a successful transaction.'

Contact:

The Niche Group Plc                       Christopher Stainforth                  020 7838 6700

Daniel Stewart                                  Oliver Rigby                               020 7776 6550

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