Serviced Office Group plc

Purchase of Consort Property Holdings Limited

The board of Serviced Office Group plc ('SOG') today announces an update in relation to its acquisition of the shares not currently owned by SOG in Consort Property Holdings Limited ('Consort') from UBS AG, London branch ('Acquisition').

As set out in the announcement by SOG on 24 July 2009, the Acquisition could not proceed as originally intended owing to the requirement to obtain approval from The Royal Bank of Scotland plc ('RBS') to the Acquisition and to the renewal of the combined group's facilities. Since July 2009, discussions have been on going between SOG, certain of its major shareholders including Sir Tom Farmer, UBS AG and RBS. As a result of these discussions the board of SOG is pleased to announce the following transaction which it is hoped will result in due course in the acquisition by SOG of the shares in Consort not currently owned by it. Maidencraig Consort Limited ('MCL'), a special purpose vehicle formed for the purpose and wholly owned by Sir Tom Farmer, has today acquired all the shares in Consort not owned by SOG together with the indebtedness due from Consort to UBS ('Investment').

Simultaneously, SOG has entered into an option arrangement with Sir Tom Farmer under which it is entitled for twelve months to acquire MCL from Sir Tom Farmer on the basis that at that time, its sole asset will be the Investment and there will be no indebtedness owed to Sir Tom Farmer. The price payable on exercise of the option will be equal to the sums invested by Sir Tom Farmer to enable MCL to acquire the Investment plus the higher of £75,000 or 50 per cent. of the post-tax profits of Consort from completion of the acquisition by MCL of the Investment until the acquisition of MCL by SOG. Sir Tom Farmer will have the option to receive the purchase price either in cash or by the issue of shares in SOG at their average mid-market price over the seven days prior to completion of the acquisition of MCL by SOG or, if a fundraising is carried out concurrently with the acquisition of MCL, at the price of such fundraising. 

MCL is classified as a related party of SOG for the purposes of the AIM Rules for Companies (the 'AIM Rules'). Accordingly, the option arrangement will be classified as a related party transaction for the purpose of Rule 13 of the AIM Rules. The directors of SOG (the 'Directors'), having consulted with Evolution Securities Limited ('Evolution Securities'), the Company's nominated adviser, consider that the terms of the option arrangement to be fair and reasonable insofar as SOG's shareholders are concerned. In providing advice to the Directors, Evolution Securities has taken into account the Directors' commercial assessments.

Michael Kingshott has advanced an unsecured loan of £100,000 to SOG on the basis that it will convert into shares at a price per share calculated in the same manner as outlined above on completion of the acquisition of MCL and in any event within 12 months.

Discussions are ongoing with RBS in relation to the renewal of the group's banking facilities and it is hoped that, if such discussions can be brought to a successful conclusion, SOG will complete the acquisition of MCL from Sir Tom Farmer and thus will become the sole owner of Consort.

The directors will keep shareholders informed as appropriate

27 August 2009

ENQUIRIES: 

Serviced Office Group plc Tel: 020 7583 8833 

Michael Kingshott, Chairman 

Evolution Securities Limited Tel: 020 7071 4300 

Bobbie Hilliam