For immediate release

This announcement is not for release, publication or distribution in whole or in part, in, into or from Canada, Australia, South Africa or Japan.

RECOMMENDED CASH OFFER

For the A convertible ordinary shares of 25 pence nominal value in the capital of

CATHEDRAL CAPITAL PLC

BENFIELD ADVISORY LIMITED

On behalf of

DISCIPLE HOLDCO LIMITED

A wholly owned subsidiary of

DISCIPLE TOPCO LIMITED

A company funded by the

ALCHEMY INVESTMENT PLAN

Summary

The Cathedral Capital Independent Directors, the Board of Disciple Holdco and Management are pleased to announce that an agreement has been reached on the terms of a recommended cash "Offer", to be made by Benfield Advisory on behalf of Disciple Holdco, to acquire the entire issued and to be issued Cathedral Capital A Shares not subject to the Management Arrangements.

The Offer price is 140 pence in cash for each Cathedral Capital A Share.

Disciple Holdco is a newly incorporated company funded by the Alchemy Investment Plan and formed specifically for the purposes of making the Offer. As part of the arrangements in connection with the Offer, Management and certain other employees have agreed to roll over some or all of their interests in Cathedral Capital into equity and loan notes in the Disciple Group.

It is intended that the business of the Cathedral Capital Group will continue substantially as it is at present. Following the Offer becoming or being declared unconditional in all respects, Management and employees of Cathedral Capital intend to continue building a strong independent franchise in the London Market.

Following the Offer becoming or being declared unconditional in all respects, the Board of Disciple Holdco will comprise Elvin Patrick, Peter Scales and John Lynch (currently Chairman, Chief Executive Officer and Chief Financial Officer of Cathedral Capital respectively), together with a representative of Alchemy Partners.

The Offer, together with the Management Arrangements, values the existing issued and to be issued share capital of Cathedral Capital at approximately £113 million, on the assumption that the Offer is declared unconditional in all respects on the First Closing Date.

The Cathedral Capital Independent Directors, who have been so advised by West Hill, consider the Offer to be fair and reasonable and unanimously recommend to Cathedral Capital A Shareholders that they accept the Offer, as they have irrevocably undertaken to do in respect of their own beneficial holdings. In providing the Cathedral Capital Independent Directors with advice, West Hill has taken account of the commercial assessments of Cathedral Capital Independent Directors.

Disciple Holdco has received irrevocable undertakings to accept or procure acceptance of the Offer in respect of, in aggregate, 46,702,566 Cathedral Capital A Shares representing approximately 71.2 per cent. of the existing issued Cathedral Capital A Shares and 75.3 per cent. of the Cathedral Capital A Shares to which the Offer will relate.

The Offer will be conditional, inter alia, upon valid acceptances being received in respect of not less than 90 per cent. (or such lower percentage, not less than 50 per cent., as Disciple Holdco decides) in nominal value of the Cathedral Capital A Shares to which the Offer will relate and the approval of the Financial Services Authority, the Council of Lloyd’s and the Lloyd’s Franchise Board to a change of control of the regulated entities within the Cathedral Capital Group. The Offer will also be conditional on the Management Arrangements being approved by the Independent Shareholders at an EGM of Cathedral Capital.

Comments on the offer

Peter Scales, Chief Executive of Cathedral Capital, said:

“It is very much business as usual for the team. We believe that this transaction will have a positive impact on our business, clients and employees. We are proud to have built Cathedral Capital into a leading specialist insurer and reinsurer in the London Market.”

Dominic Slade, partner of Alchemy Partners and a director of Disciple Holdco, said:

“Cathedral Capital is a high quality and robust business. I have been impressed by the professionalism of the senior management team over the time I have known them. The business has a strong underwriting culture and an excellent reputation in the London Market. We look forward to working with and supporting the full Cathedral Capital team over the coming years.”

Anthony Minns, Senior Independent Director of Cathedral Capital, said:

“The Cathedral Capital Independent Directors are pleased to support the Offer. Cathedral Capital’s management and the wider team have worked hard to build a successful business and we believe that this effort is reflected in the price achieved for shareholders.”

Benfield Advisory is acting as financial adviser to Disciple Holdco and Disciple Topco. West Hill is acting as financial adviser to Cathedral Capital. Kinmont is acting as financial adviser to Management.