GREENWICH, Conn., June 19 /PRNewswire/ -- Mercury Real Estate Advisors LLC, an affiliate of Mercury Partners LLC, a real estate investment management company based in Greenwich, CT, sent the following letter today to Marylebone Warwick Balfour Group's Board of Directors.

MERCURY REAL ESTATE ADVISORS LLC Three River Road Greenwich, Connecticut 06807 June 19, 2007 Marylebone Warwick Balfour Group plc Attn: Eric Sanderson, Non-Executive Chairman Richard Balfour-Lynn, Chief Executive Andrew Blurton, Joint Finance Director Jagtar Singh, Joint Finance Director Michael Bibring, Legal and Commercial Director David Marshall, Non-Executive Director Robert Burrow, Non-Executive Director 1 West Garden Place Kendal Street London, W2 2AQ United Kingdom Dear Board of Directors:

As you are aware, Mercury Real Estate Advisors LLC ("Mercury"), together with its managed investment funds, is the largest shareholder in Marylebone Warwick Balfour Group plc ("MWB" or the "Company"), with approximately a 15.8% reported ownership position. We have been a long-term holder of the Company's shares, as well as a strong supporter of the Company. We are communicating with you today regarding the attempted sale of the Malmaison and Hotel du Vin property portfolio (the "Portfolio") in connection with the failed initial public offering of Vector Hospitality ("Vector").

While we very reluctantly voted for the Vector transaction given that it was presented to the shareholders as a fait accompli, we were extremely uncomfortable with the Company's prior agreement to sell the Portfolio in an off-market transaction without first undertaking a full marketing effort. Even more unsettling, the agreement with Vector was fraught with conflicts of interest, arising from the fact that Richard Balfour-Lynn is a director of Vector, Chief Executive Officer of Vector's external manager and Chief Executive Officer of MWB. While the consideration proposed by Vector for the acquisition of the Portfolio was not indefensible based on valuations provided by DTZ and CBRE, in the absence of a fee valuation of the Portfolio, there is no evidence that such a bespoke operating company / property company ("OpCo / PropCo") structure, designed solely for the benefit of Balfour-Lynn, represented or remains the best value available in the market for shareholders. This lack of transparency and poor corporate governance practices inherent in the Balfour-Lynn / Vector / MWB transaction cannot be repeated.

Given the strong performance and positive outlook for the U.K. hospitality sector, we firmly believe the failure of Vector's initial public offering is substantially based on the market's negative view of its undesirably conflicted and externally advised corporate structure rather than a reflection of the underlying markets or initial portfolio, including the MWB assets. This view is corroborated by Balfour-Lynn himself, who said in a June 15, 2007 Bloomberg article that, "investors cited his involvement as a seller, buyer and manager, in addition to potential management performance fees, as a reason not to invest in Vector." Fortunately, the failure of Vector's initial public offering provides a fresh opportunity for MWB to immediately pursue a more transparent sales process, which would mitigate the risks posed to shareholders by an off-market transaction with the conflicted Balfour-Lynn.

Therefore, we demand the Company immediately pursue a broad-based auction for the Portfolio, in order to objectively determine the optimal buyer and maximize value for all MWB shareholders. If Balfour-Lynn is not willing to operate in such an open and unbiased fashion, we believe he should be immediately terminated as Chief Executive Officer of the Company. It is time that the Board of Directors disposed of the Portfolio in a manner that will maximize value to all shareholders, not Balfour-Lynn disproportionately. We believe a failure to entertain all potential offers in the wake of the unsuccessful Vector initial public offering would be a breach of the Board of Directors' fiduciary responsibilities, which would warrant strong opposition and a review of all available remedies by the undersigned.

We are tremendous believers in MWB's valuable hospitality operations and real estate assets. Engaging the services of an independent third-party firm to manage the marketing of the Malmaison and Hotel du Vin properties ensures the Company properly identifies the best opportunity available in the market and fulfills its responsibility to all of its shareholders.

We would be pleased to discuss these demands in greater detail. Very truly yours, MERCURY REAL ESTATE ADVISORS LLC David R. Jarvis Malcolm F. MacLean IV Chief Executive Officer President

CONTACT: Malcolm F. MacLean IV, +1-203-769-2980, for Mercury Real Estate
Advisors LLC

Web site: http://www.mercuryrealestate.com/