HTB Highland Timber

    HIGHLAND TIMBER P.L.C.

24 August 2007

SALE OF FOREST ASSETS

Highland Timber P.L.C. ("the Company") is pleased to announce that it has today
entered into a conditional agreement for the sale of all of the Company's
forest assets ("Forests Assets") to FIM Timber Growth Fund IV ("FIM TGF IV")
for a total cash consideration of �12,500,000 ("the Transaction" or "the
Offer").

SUMMARY

  * The Offer is for the Forest Assets for a total cash consideration of �
    12,500,000.
   
  * Following completion of the Transaction, cash balances held by the Company
    will be approximately �15,000,000, equivalent to approximately 121 pence of
    cash per share on a fully diluted basis.
   
  * Completion of the Transaction is subject to shareholder approval being
    obtained at an extraordinary general meeting of the Company to be held no
    later than 27 September 2007 ("the EGM").
   
  * The Company's Directors who hold shares in the Company have irrevocably
    undertaken to vote in favour of the Transaction at the EGM in respect of
    all the shares held legally and beneficially by them and by interests
    related to them and their families, representing approximately 36.4 per
    cent. of the Company's issued share capital.
   
  * The proposed Transaction will divest the Company of all of its trading
    activities and, as such, following completion of the Transaction the
    Company will become an investing company pursuant to Rule 15 of the AIM
    Rules with an investment strategy as approved by shareholders at the
    company's extraordinary general meeting on 26 June 2007.
   
  * The Board will continue to explore cost effective methods of returning
    capital to shareholders in the short term, with the intention of seeking
    shareholders' approval to change the investing strategy to enable a full
    return of capital or a liquidation of the Company.
   
DETAILS OF THE TRANSACTION

The Company has today entered into a conditional sale and purchase agreement
for the disposal of the Company's Forest Assets in their entirety to FIM TGF IV
for a total cash consideration of �12,500,000 payable on completion.

Following completion of the Transaction and including the Company's existing
cash resources of approximately �2,400,000, cash balances held by the Company
will be approximately �15,000,000 net of related transaction costs, which are
not anticipated to exceed �175,000, and the receipt of proceeds of
approximately �310,000 from the exercise of share options. This figure is
equivalent to approximately 121 pence of cash per share on a fully diluted
basis.

In accordance with the AIM Rules the Transaction is subject to shareholder
approval being obtained at the EGM to be held no later than 27 September 2007,
notice of which will be set out in a circular to be sent to shareholders
shortly. Under the provisions of Rule 21.1 of the City Code on Takeovers and
Mergers, the Transaction is also subject to shareholder approval being obtained
as the Company is currently in an offer period.

Background to and reasons for the Transaction

As shareholders will be aware, on 14 March 2007 the Company received an
unsolicited approach for its Forest Assets. On 12 April 2007, the Company
announced that it was considering the approach. Following this announcement the
Company received a number of bids, at increasingly higher prices, from further
interested parties.

On 18 May 2007, the Company announced that it had entered into a sale and
purchase agreement, conditional only upon shareholders' approval at the
Company's extraordinary general meeting on 26 June 2007, to dispose of the
Forest Assets to FIM TGF IV for a consideration of �9,900,000 payable in cash.

On 4 June 2007, Louis Dreyfus Energy Holdings Limited ("LDEH") announced that
it had made an offer for the Forests for a consideration of �11,100,000 payable
in cash subject to the completion of due diligence and documentation. The
Company advised LDEH that it was unable to progress their offer due to the
exclusivity provisions of the agreement with FIM TGF IV.

Subsequently, on 20 June 2007, LDEH announced that if the proposed resolutions
to be put at the Company's extraordinary general meeting on 26 June 2007 were
voted down, it would consider making an offer for the entire issued share
capital of the Company at a price of 110 pence per share in cash. In addition,
LDEH stated that it remained committed to its offer to acquire the Forest
Assets on the terms of its offer to the Company dated 31 May 2007 as announced
on 4 June 2007.

At the Company's extraordinary general meeting held on 26 June 2007, the
proposed disposal of the Forests to FIM TGF IV was not approved by
Shareholders, but the Company's proposed investing strategy was approved. As a
result of the proposed disposal of the Forests to FIM TGF IV not being approved
by shareholders and completion not having occurred by 30 June 2007, the Company
has agreed to pay �70,000 to FIM TGF IV in relation to the re-imbursement of
FIM TGF IV fees pursuant to the terms of the sale and purchase agreement
entered into by the Company and FIM TGF IV dated 17 May 2007 and no other fees
remain payable by the Company to FIM TGF IV under the terms of that agreement
or otherwise.

Following the expiry date of the Company's exclusivity period with FIM TGF IV
on 30 June 2007, the Company has held discussions with interested parties, both
relating to a disposal of the Forest Assets and a cash offer for the Company's
entire issued and to be issued share capital.

This has culminated in the Company receiving the Offer of �12,500,000 from FIM
TGF IV and advanced discussions with LDEH regarding a possible cash offer for
the entire issued and to be issued share capital of the Company at a proposed
price of 115 pence per share. This statement in relation to the possible cash
offer by LDEH is not being made with their approval. No firm intention from
LDEH to make such an offer has been received by the Company and therefore there
can be no certainty that an offer will be made nor as to the terms on which any
offer might be made by LDEH except that if LDEH were to make an offer it would
have to be at a price not less than 110 pence per share as per LDEH's
announcement on 20 June 2007.

IRREVOCABLE UNDERTAKINGS

The Company's Directors who hold shares in the Company have irrevocably
undertaken to vote in favour of the Transaction at the EGM in respect of all
the shares held legally and beneficially by them and by interests related to
them and their families, representing approximately 36.4 per cent. of the
Company's issued share capital.

In respect of the undertakings given by the Directors, these undertakings will
lapse and be of no effect on 28 September 2007 or earlier if any one of the
following occurs:

 a. a bona fide offer is made prior to the EGM for the Forest Assets at a price
    which values the Forest Assets at �13,750,000 or more; or
   
 b. an announcement is made prior to the EGM of an offer for the whole issued
    capital of the Company not already owned by the offeror (or persons
    acting in concert with him) at a price which values the Company's shares at
    132 pence per ordinary share or more.
   
EFFECTS OF THE TRANSACTION

The effect of the proposed Transaction will be to divest the Company of all of
its trading activities and, as such, following completion of the Transaction
the Company will become an investing company pursuant to Rule 15 of the AIM
Rules with an investment strategy as approved by shareholders at the Company's
extraordinary general meeting on 26 June 2007.

However, the Board are mindful of the desire of certain shareholders' to
achieve a full cash exit in the short term, and will therefore continue to
explore cost effective methods of returning capital to shareholders, with the
intention of seeking shareholders' approval to change the investing strategy to
enable a full return of capital or a liquidation of the Company.

FINANCIAL INFORMATION

Profits before taxation attributable to the assets comprising the Transaction,
post the reversal of previous impairment charges of the forests and excluding
interest receivable on cash balances held by the Company and exceptional items,
were �79,000 and �577,000 in respect of the 6 months to 30 June 2007 and 12
months to 31 December 2006 respectively.

The net book values attributable to the assets comprising the Transaction were
�6,264,000 as at 30 June 2007.

Commenting on the Transaction, Oliver Waring, Chief Executive of the Company
said:

"The sale of the Company's Forest Assets to FIM TGF IV is the final step for
the Company in realising the value of its assets. Following completion of the
Transaction, cash balances held by the Company will be approximately �
15,000,000 net of related transaction costs and receipt of proceeds from the
exercise of share options which equates to approximately 121 pence per share on
a fully diluted basis."

Enquiries:

Highland Timber P.L.C. 020 7937 0755

Oliver Waring, Chief Executive Officer

Arbuthnot Securities

Richard Johnson 020 7012 2000

                                                                



END

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