Hat Pin proposed acquisition of 70 per cent. of the issued share capital of Saxton Bampfylde Hever

Hat Pin plc, the executive search and recruitment group and owner of market leading brand Kendall Tarrant Worldwide (ìKTWî), is pleased to announce that the Company has agreed to acquire, conditional, inter alia, on the approval of its Shareholders, 70 per cent. of the issued share capital of Saxton Bampfylde Hever plc (ìSBHî), one of the UKís most respected executive search companies.

The total consideration payable under the Acquisition Agreement is up to approximately 4.91 million. Of the total consideration, 4,400,000 is payable on Completion and is to be satisfied by way of a cash payment of 2,440,000 and by the issue of 3,631,948 Consideration Shares. The remainder, the Deferred Consideration, is payable subject to the achievement by SBH of certain financial performance criteria. The Deferred Consideration of up to 512,500 is to be satisfied by way of a further cash payment from the Groupís resources.

The Acquisition is in line with Hat Pinís stated strategy of augmenting the Groupís organic growth and complementing the KTW business to enhance Hat Pinís position as an AIM-listed provider of human resource and a consolidator within the recruitment industry.

The Acquisition significantly reduces Hat Pinís dependence on the revenues generated by KTW and its exposure to the cyclical nature of the marketing and communications sector. Furthermore, the Directors believe that the Enlarged Group could benefit from the cross-fertilization of ideas and best-practice as well the involvement of SBHís highly experienced management team in its future growth plans.

Both KTW and SBH have ambitious growth plans and it is Hat Pinís intention to support these fully. The SBH business is profitable and cash-generative, and the transaction is expected to be earnings enhancing for Hat Pin in its first full-year after the Acquisition.

SBH is a premium brand within the executive search industry, with a highly experienced management team. It has a track record of strong growth over nearly 20 years and the potential to expand its activities further.

Within the private sector, SBH has an extensive track record in senior media, retail, financial services, professional services and technology appointments. Within each of these areas SBH aims to build sustained relationships with a small number of leading firms (currently two-thirds of SBHís active private sector mandates represent business from clients for whom SBH has worked previously). Within the public and not-for-profit sectors, SBH is a leading adviser on senior appointments in higher education, central government (including regulatory and trade body appointments at the interface between government and business), charities and the arts.

Following this announcement of the Acquisition, the Chairman declares his intention, subject to market price, to buy a shareholding in the Company of up to 1.25 million Ordinary Shares, and Gay Haines, an executive Director, and her related parties have indicated that they will be prepared to sell these shares to him, again subject to market price. Gay and her related parties have no intention to dispose of any further Ordinary Shares for a period of a minimum of six months.

As part of these arrangements, Stephen Bampfylde will be joining the Board as an executive Director with effect from Completion and both Hannah Brown and Louise Wall, currently executive Directors of Hat Pin, are stepping down from the Board with immediate effect. This streamlined Board structure reflects the Enlarged Groupís commitment to growing the business and to enhancing overall shareholder value.

Angela Campbell-No, Chief Executive Hat Pin plc said: ìThe SBH brand, its people and market position add an exciting dimension to our business. The near-doubling in size of our operating business enhances our talent pool and heralds the next stage of the development of Hat Pin. May I also take this opportunity to thank Hannah and Louise for their valued contribution to the Board and also to welcome Stephen as a new Board member.î

Chief executive of SBH, Stephen Bampfylde, said ìBoth companies share the same excitement and views on the potential for SBH and I am delighted to be joining the Hat Pin group.î

The Acquisition is classified as a ìreverse takeoverî under the AIM Rules by virtue of its size and is conditional, inter alia, upon the approval of Shareholders, which is being sought at the EGM on 14 December 2005.

The Directors have irrevocably undertaken to support the Resolution in respect of their beneficial holdings amounting, in aggregate, to 2,380,000 Existing Ordinary Shares, representing approximately 21.61 per cent. of the existing issued share capital of the Company.

In addition, certain other shareholders have irrevocably undertaken to support the Resolution in respect of their beneficial holdings amounting, in aggregate, to 4,074,670 Existing Ordinary Shares, representing approximately 36.99 per cent. of the existing issued share capital of the Company.

It is expected that dealings on AIM will commence in the Ordinary Shares on or around 15 December 2005.

The market capitalisation of the Enlarged Group, post-Acquisition, at the closing share price on 25 November 2005 (the latest practicable date prior to the issue of this announcement) will be approximately 7.98 million.