Acquisition

23 December 2010

Merchant House Group plc announces the launch of new Financial Planning Division

Plans to open new offices nationwide

New senior appointment

Merchant House Group plc ("the Company") announces the launch of a new Financial Planning business aimed at recruiting up to 200 Independent Financial Advisors ("IFAs") into the new Financial Planning Division from which they can better service their clients as the new Retail Distribution Review regime approaches.

Merchant House Financial Services ("MHFS"), a subsidiary of the Company, has acquired certain assets from Bridge Business Recovery LLP, the administrator ("Administrator") to The Clarkson Hill Group Plc (in administration) ("CHG") to support the implementation of the new financial planning division. These assets include certain commission debtors (in the amount of approximately £4 million), administrative staff, fixtures and fittings and the company records. MHFS has agreed to collect the commission debtors referred to above due to CHG out of which up to £3.75 million will be payable to the Administrator and third parties and an estimated £250,000 to MHFS. There is no further consideration payable to the Administrator. MHFS has not acquired the IFAs or clients.

CHG provided fee- and commission-based financial planning services in the United Kingdom, covering regulated products such as life assurance, pensions and collective investment schemes, term assurance, permanent health insurance and medical expenses insurance. These products and others will be offered by Merchant House Financial Services. CHG retained the services of 200 Independent Financial advisors and operated 10 branch offices in London, Rugby, Edinburgh, Cardiff, Plymouth, Maidstone, Newcastle, Truro, Leeds, with a head office in Wisbech, Cambridgeshire. CHG has been authorised and regulated by the Financial Services Authority of the United Kingdom and announced on 17 December 2010 that it was going into administration following regulatory capital issues.

The Company also announces the appointment of Nic Brown as Managing Director of MHFS and as a Director of the MHFS board of management. Nic was previously a founding director of Foster Denovo as Director of Partnership Development. Nic commented, "I am delighted to be joining Merchant House at a time when the company is developing in such an exciting way. I will be working to attract as many of the Clarkson Hill advisors and clients to our new business as possible."

Ron Pritchard, the Chief Executive of The Clarkson Hill Group Plc said, "We searched for sometime to find the right company where we felt able to recommend to our independent Advisors and clients that they could find a home. We have been impressed with the professional approach of Merchant and feel confident that those of our advisors and clients that go there will be well looked after."

Christopher Day, Chief Executive of Merchant House Group commented, "The launch of this new business venture for us compliments our other businesses and is a further step in our Strategy plan. As with our other businesses, we believe we have identified a market opportunity and the right team to implement the opportunity. I would like to welcome our new colleagues and I wish them well within the Group."

Enquiries:

James HolmesMerchant House Group PlcTel: 020 7332 2200

Shore Capital and Corporate LimitedPascal KeaneTel: 020 7408 4090