Landsbanki Íslands hf. - Tender offer

Announcement from Landsbanki Islands hf. regarding its possible participation in the submission of a takeover bid for Close Brothers Group plc.

Landsbanki Islands hf. refers to its notices of November 8th and 29th 2007 to
the OMC Nordic Exchange Iceland and other securities exchanges where its
securities are listed.  As a consequence of speculation in both the domestic
and international press during the weekend the bank wishes to draw attention to
the following announcement from Cenkos Securities Plc and Landsbanki Islands
hf. regarding a possible recommended offer for the financial services provider
Close Brothers Group plc, which was released this morning. 
 
For further information please contact:
 
Landsbanki's CEOs Sigurjón Th. Árnason, tel. +354 410-4009 / +354 898 0177 and
Halldór J. Kristjánsson, tel. +354 410 4015 / +354 820 6399. 
Media Relations - Andrew Walton, Financial Dynamics, tel: +44 20 7269 7204 /
mob: +44 7711 264 157. 
 
For immediate release                                                          
                                               14 January 2008 
 
Cenkos Securities plc ("Cenkos")
Landsbanki Islands HF ("Landsbanki")
 
 
Possible recommended offer for Close Brothers Group PLC ("Close Brothers")
 
Further to recent press comment, the Boards of Cenkos and Landsbanki confirm
that they are in discussions with Close Brothers regarding a possible
recommended offer for the entire issued share capital of Close Brothers. 
 
It is currently envisaged that an offer for Close Brothers would be made by
Cenkos by way of a scheme of arrangement, with a sale of the banking division
to Landsbanki conditional upon the scheme becoming effective, and that funding
for the offer would be achieved through a combination of debt and a significant
equity issue by Cenkos. 
 
Cenkos intends that the divisions being retained by it would continue to be run
independently of its existing businesses, and the employees of those divisions
will be remunerated in line with Cenkos' existing policy of direct equity
ownership together with transparent pay structures. 
 
The expansion of Landsbanki's operations outside Iceland is a clearly stated
strategic priority. The focus of this strategy has been to achieve sectoral and
geographic diversification of assets, funding and income through the addition
of value enhancing complementary businesses. The diverse model of the Close
Brothers banking division together with its valuable management and employees
brings a good fit to this strategy and would provide Landsbanki with an
excellent opportunity to further strengthen its footprint in the specialist
asset-based lending sector in the UK, Irish, Channel Islands and German
markets. Furthermore, Close Brothers' banking operations are very well funded
with the ratio of deposits to total loan book being 117% on July 31 2007[1]. 
 
The proposal of Cenkos and Landsbanki is subject to a number of pre-conditions
and conditions, including due diligence, Cenkos shareholder approval and
regulatory approval and there can be no certainty that the discussions will
ultimately lead to an offer for Close Brothers nor as to the terms or the price
on which an offer might be made nor as to the timing of any offer. 
 
Enquiries:
 
Anthony Bernbaum                                                    +44 20 7991
8888 
Julian Gray 
HSBC (adviser to Cenkos and Landsbanki)                              
 
David Rydell                                                                 
+44 20 78613232 
Dan De Belder
Bell Pottinger (PR adviser to Cenkos)
 
HSBC Bank plc, which is regulated in the United Kingdom by the Financial
Services Authority, is acting for Cenkos and Landsbanki and no one else in
relation to matters described in this announcement and will not be responsible
to anyone other than Cenkos and Landsbanki for providing the protections
afforded to customers of HSBC Bank plc or for providing advice on matters
described in this announcement. 
 
Under the provisions of Rule 8.3 of the City Code on Takeovers and Mergers (the
"Code"), if any person is, or becomes, "interested" (directly or indirectly) in
1% or more of any class of "relevant securities" of Close Brothers, all
"dealings" in any "relevant securities" of that company (including by means of
an option in respect of, or a derivative referenced to, any such "relevant
securities") must be publicly disclosed by no later than 3.30 pm (London time)
on the London business day following the date of the relevant transaction. This
requirement will continue until the date on which the offer becomes, or is
declared, unconditional as to acceptances, lapses or is otherwise withdrawn or
on which the "offer period" otherwise ends. If two or more persons act together
pursuant to an agreement or understanding, whether formal or informal, to
acquire an "interest" in "relevant securities" of Close Brothers, they will be
deemed to be a single person for the purpose of Rule 8.3. 
Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant
securities" of Close Brothers by Close Brothers, or by any of its "associates",
must be disclosed by no later than 12.00 noon (London time) on the London
business day following the date of the relevant transaction. 
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities
in issue, can be found on the Takeover Panel's website at
www.thetakeoverpanel.org.uk. 
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities. 
Terms in quotation marks are defined in the Code, which can also be found on
the Takeover Panel's website. If you are in any doubt as to whether or not you
are required to disclose a "dealing" under Rule 8, you should consult the
Takeover Panel. 
The distribution of this announcement in jurisdictions other than the United
Kingdom may be restricted by law and therefore persons into whose possession
this announcement comes should inform themselves about, and observe, such
restrictions. Any failure to comply with the restrictions may constitute a
violation of the securities laws of any such jurisdiction. This announcement
does not constitute an offer or an invitation to purchase or subscribe for any
securities or a solicitation of an offer to buy any securities pursuant to this
announcement or otherwise in any jurisdiction. 
 


[1] Close Brothers Annual Report 2007