Proposed Placing of Shares

RNS Number : 9525A

AO World plc

30 March 2017

 

THIS ANNOUNCEMENT, INCLUDING THE APPENDIX AND THE INFORMATION CONTAINED IN IT, IS RESTRICTED AND IS NOT FOR PUBLIC RELEASE, PUBLICATION, OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, HONG KONG, NEW ZEALAND, SINGAPORE, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. PLEASE SEE "IMPORTANT NOTICE" BELOW.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR IMMEDIATE RELEASE.

AO World plc

("AO World" or the "Company")

PLACING OF NEW ORDINARY SHARES

30 March 2017

Proposed Placing

AO World today announces a placing to raise up to £50 million, through the issue of up to 42,063,157 new ordinary shares in the Company (the "Placing Shares") representing up to approximately 9.99% of the Company's existing issued ordinary share capital (excluding any treasury shares) to institutional investors (the "Placing"). The Placing is being conducted through an accelerated bookbuilding process (the "Bookbuild") which will be launched immediately following this announcement (together with the Appendix, the "Announcement") and will be subject to the terms and conditions set out in the Appendix.

Steve Caunce and John Roberts have indicated their intention to subscribe for Placing Shares representing £2 million each. Additionally, Chris Hopkinson (non-executive Director) and Mark Higgins (CFO) have indicated their intention to participate in the Placing. Further details of the Placing and any participation by such Directors will be set out in the announcement to be made on the closing of the Bookbuild which is expected to be made later today.

Jefferies International Limited ("Jefferies") and Numis Securities Limited ("Numis", and together with Jefferies, the "Joint Bookrunners") have been appointed as joint bookrunners in respect of the Placing. Rothschild is acting as financial adviser to the Company.

Background to and reasons for the Placing

At our IPO in 2014 we set out our strategy to be the best electrical retailer in Europe, and since then we have delivered on this strategy across the 4C's:

·     Countries: successfully expanded from being a UK-only operation to being an international retailer

·     Categories: grown from being a seller of major domestic appliances (MDA) and some small domestic appliances (SDA) to selling electricals across multiple categories, including, audio visual (AV) and computing and also expanding our existing ranges

·     Customers: our customers are at the heart of what we do, borne out by our strong customer review site and NPS scores that remain consistently high in both the UK and Germany

·     Culture & Brand: being exceptional in the moments that matter because we care more

As a result of this progress across the 4C's of our strategy, over the last four years (FY13-FY17E), we expect to have more than doubled annual revenues to c.£700 million. To support both this growth and to maintain our market leading customer proposition in the UK and Europe across multiple categories, we have invested in our inventory which has increased approximately sevenfold over the same period*. Taking into account this growth and the Board's expectation for continued progress both in the UK and Europe, today's capital raising underpins our further growth prospects.

The capital raising will allow us to suitably capitalise the business to support our continued growth and increasing scale, provide flexibility to react to market opportunities and changes, and strengthen our balance sheet for our supplier partners. This will provide improved flexibility to take the right commercial and investment decisions for the growth of the business, with fewer financial constraints.

Steve Caunce, Chief Executive Officer of AO World, said:

"This is our first capital raising since our IPO and the proceeds will support our continued growth and increasing scale as we pursue our proven strategy. We have seen another year of strong growth - in the UK and in Europe - as we continue to deliver on our 4C's strategy and opened our European distribution centre in Bergheim. This was achieved in spite of the challenging dynamics in our markets. We remain as committed as ever to doing business the AO way and continuing to deliver for our customers, our people, our supplier partners and our investors. The strength in our UK business and our investment in mainland Europe have positioned us well for the future, and this will be further strengthened by the capital raising."

Shareholder consultation

Ahead of the proposed Placing, AO World consulted with a number of its leading shareholders regarding the rationale of the proposed Placing. The Board believes that the proposed Placing is in the best interest of shareholders.

Details of the Placing

The Bookbuild will open with immediate effect following this Announcement. The exact number of Placing Shares to be placed and the price at which the Placing Shares are to be placed will be determined by the Company and the Joint Bookrunners at the close of the Bookbuild and announced by the Company shortly thereafter. The timing of the closing of the Bookbuild, pricing and allocations are at the discretion of the Company and the Joint Bookrunners.

Under the terms of the Placing, AO World intends to place up to 42,063,157 new ordinary shares of 0.25 pence each in the capital of the Company, representing up to approximately 9.99 per cent of the existing issued ordinary share capital of the Company as at 30 March 2017. Members of the public are not entitled to participate in the Placing.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu with the existing ordinary shares of 0.25 pence each in the capital of the Company including the right to receive all future dividends and distributions declared, made or paid by reference to a record date falling after their issue.

The Company will apply for admission of the Placing Shares to listing on the premium listing segment of the Official List of the Financial Conduct Authority (the "FCA") and to trading on the main market for listed securities of London Stock Exchange plc (together, "Admission"). It is expected that settlement of subscriptions in respect of the Placing Shares and Admission will take place and that trading in the Placing Shares will commence at 8.00 a.m. on 3 April 2017.

The Placing is conditional upon, inter alia, Admission becoming effective. The Placing is also conditional upon the placing agreement between the Company, Jefferies and Numis (the "Placing Agreement") becoming unconditional and not being terminated. Further details of the Placing Agreement can be found in the terms and conditions of the Placing contained in the Appendix to this Announcement (which forms part of the Announcement).

By choosing to participate in the Placing and by making a verbal offer to acquire Placing Shares, investors will be deemed to have read and understood this Announcement (including the Appendix) in its entirety and to be making such offer on the terms and subject to the conditions in the Announcement, and to be providing the representations, warranties and acknowledgements contained in the Appendix.

Your attention is drawn to the detailed terms and conditions of the Placing set out in the Appendix to this Announcement.

Director Lock-up

Each of the Directors of the Company has agreed that until (but excluding) 29 March 2018, he or she will not dispose of any ordinary shares in the Company that he or she holds immediately following completion of the Placing, without obtaining the prior written consent of the Joint Bookrunners, subject to certain customary exceptions and excluding bona fide gifts to charities.

Concert Party

Together John Roberts and Steve Caunce (the "Concert Party") are considered to be acting in concert with each other in relation to the Company for the purposes of the Takeover Code. Prior to the proposed equity issue John Roberts and Steve Caunce respectively hold 109,237,235 shares (equivalent to 25.9 per cent of the issued share capital) and 51,236,382 shares (equivalent to 12.2 per cent of the issued share capital). In aggregate the Concert Party holds 38.1 per cent of the issued share capital of AO World.

The Takeover Code and the Concert Party

Brief details of the Takeover Panel, the Takeover Code and the protections they afford are given below.

The Company is a public company incorporated in England and Wales and its shares are admitted to trading on the London Stock Exchange's main market for listed securities. Accordingly, the Takeover Code applies to all takeover and merger transactions in relation to the Company and operates principally to ensure that the shareholders of the Company are treated fairly and are not denied an opportunity to decide on the merits of a takeover and that shareholders of the same class are afforded equivalent treatment. The Takeover Code also provides an orderly framework within which takeovers are conducted and the Takeover Panel has now been placed on a statutory footing.

The Takeover Code governs, inter alia, transactions which may result in a change of control of a company to which the Takeover Code applies. Under Rule 9 of the Takeover Code any person who acquires, whether by a series of transactions over a period of time or not, an interest (as defined in the Takeover Code) in shares which, taken together with shares in which he is already interested or in which persons acting in concert with him are interested, carry 30 per cent. or more of the voting rights of a company which is subject to the Takeover Code, that person is normally required to make a general offer to all the remaining shareholders to acquire their shares.

Similarly, Rule 9 of the Takeover Code also provides that when any person, together with persons acting in concert with him, is interested in shares which, in aggregate, carry more than 30 per cent. of the voting rights of such company, but does not hold shares carrying 50 per cent. or more of such voting rights, a general offer will normally be required if any further interest in shares is acquired by any such person.

An offer under Rule 9 must be in cash and must be at the highest price paid by the person required to make the offer, or any person acting in concert with him, for any interest in shares of the company in question during the 12 months prior to the announcement of the offer.

Persons acting in concert include persons who, pursuant to an agreement or understanding (whether formal or informal), co-operate to obtain or consolidate control of that company.

Immediately following the proposed equity issue the Concert Party will be interested in an increased number of shares, although this will be a reduced amount of the enlarged issued share capital of AO World in percentage terms.  Further announcements will be made in due course outlining the Concert Party's resultant shareholdings arising out of the proposed equity issue.  Accordingly no obligation under Rule 9 will arise as a result of their participation in this proposed equity issue. Should any member of the Concert Party acquire any interest in shares apart from pursuant to the arrangements described above, the Takeover Panel may regard this as giving rise to an obligation upon that member of the Concert Party to make an offer for the entire Existing Share Capital of the Company at a price no less than the highest price paid by the individual member of the Concert Party or any other member of the Concert Party in the previous 12 months.

* Based on FY13 and FY17E average month end inventory levels

For further information, please contact:

AO World plc                                                                                      [phone]

Mark Higgins

Chief Financial Officer

Jefferies                                                                                              [phone]

Nick Adams

Lee Morton

Max Jones

Numis                                                                                                  [phone]

Alex Ham

Luke Bordewich

Michael Burke

Rothschild                                                                                           [phone]

Bod Buckby

Jonathan Finn

Tulchan Communications                                                                  [phone]

Susanna Voyle                                                                                    [e-mail]

Michelle Clarke

IMPORTANT NOTICE

This Announcement is for information only and does not constitute an offer to sell, or a solicitation of an offer to buy or otherwise acquire, any securities in any jurisdiction. Persons needing advice should consult an independent financial adviser.

This Announcement has been issued by and is the sole responsibility of the Company.  No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by the Joint Bookrunners or by any of their respective affiliates or agents as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

Each of the Joint Bookrunners is authorised and regulated by the Financial Conduct Authority and is acting for the Company in connection with the Placing and no-one else and will not be responsible to anyone other than the Company for providing the protections afforded to its clients nor for providing advice in relation to the Placing, the contents of this Announcement or any transaction or any other matters referred to herein. In connection with the Placing, each of the Joint Bookrunners and any of their respective affiliates, acting as investors for their own accounts, may subscribe for or purchase Placing Shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such Placing Shares and other securities of the Company or related investments in connection with the Placing or otherwise.

The distribution of any information in this Announcement and the offer, sale and delivery of the Placing Shares in certain jurisdictions may be restricted by law.  No action has been taken by the Company or the Joint Bookrunners that would permit an offering of such shares or possession or distribution of this Announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required.  Persons into whose possession this Announcement comes are required by the Company and the Joint Bookrunners to inform themselves about, and to observe, any such restrictions.

This Announcement may contain statements that are, or are deemed to be, forward-looking statements. In some instances, forward-looking statements can be identified by the use of terms such as "projects", "forecasts", "anticipates", "expects", "believes", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology. Forward-looking statements are subject to a number of known and unknown risks and uncertainties that may cause actual results and events to differ materially from those expressed in or implied by such forward-looking statements, including, but not limited to: general economic and business conditions; demand for the Company's products and services; competitive factors in the industries in  which the Company operates; exchange rate fluctuations; legislative, fiscal and regulatory developments; political risks; terrorism, acts of war and pandemics; changes in law and legal interpretations; and the impact of technological change. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events  or otherwise. The information contained in this Announcement is subject to change without notice.

Members of the public are not eligible to take part in the Placing.  In the European Economic Area ("EEA") other than the United Kingdom, the Announcement is directed only at and may only be communicated to persons who are "qualified investors" within the meaning of Article 2(1)(e) of EU Directive 2003/71/EC ("Prospectus Directive"), as amended, in each case as implemented in the relevant jurisdiction ("Qualified Investors").  In the United Kingdom, the Announcement is directed only at Qualified Persons who are also (i) persons having professional experience in matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 ("Order"); (ii) high net worth bodies corporate, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2) of the Order; or (iii) persons to whom it may otherwise lawfully be communicated (together "Relevant Persons").  In the United Kingdom, any investment activity to which the Announcement relates is only available to and will only be engaged in with Relevant Persons and elsewhere in the EEA with Qualified Investors, and any other persons within the United Kingdom or elsewhere in the EEA who receive the Announcement should not rely on or act upon the Announcement.

The Placing Shares have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered, sold, resold, pledged, delivered, distributed or transferred, directly or indirectly, into or within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There has been and will be no public offering of the Placing Shares in the United States or elsewhere.

The Placing Shares have not been and will not be registered under the applicable securities laws of Australia, Canada, Japan, Hong Kong, New Zealand, Singapore or South Africa and, subject to certain exceptions, may not be offered or sold, directly or indirectly, in Australia, Canada, Japan, Hong Kong, New Zealand, Singapore or South Africa. There has been and will be no public offering of the Placing Shares in Australia, Canada, Japan, Hong Kong, New Zealand, Singapore, South Africa or elsewhere.

APPENDIX

FURTHER DETAILS OF THE PLACING

TERMS AND CONDITIONS

Participation in, and principal terms of, the Placing

1.         The Joint Bookrunners are arranging the Placing severally, and not jointly, nor jointly and severally, as Joint Bookrunners and agents of the Company.

2.         Participation will only be available to persons who may lawfully be, and are, invited to participate by any of the Joint Bookrunners. Each of the Joint Bookrunners and their respective affiliates are entitled to enter bids as principal in the Bookbuild.

3.         The Bookbuild will establish a single price payable in respect of the Placing Shares (the "Placing Price") to the Joint Bookrunners by all Placees whose bids are successful. The Placing Price and the aggregate proceeds to be raised through the Placing will be agreed between the Joint Bookrunners and the Company following completion of the Bookbuild and any discount to the market price of the Ordinary Shares will be determined within the limits specified by the Listing Rules of the UK Listing Authority, as published pursuant to Part 6 of the Financial Services and Markets Act 2000. The Placing Price and the final number of Placing Shares will be announced on a Regulatory Information Service following the completion of the Bookbuild.

4.         To bid in the Bookbuild, prospective Placees should communicate their bid by telephone or in writing to their usual sales contact at one of the Joint Bookrunners. Each bid should state the number of Placing Shares which the prospective Placee wishes to acquire at the Placing Price ultimately established by the Company and the Joint Bookrunners or at prices up to a price limit specified in its bid. Bids may be scaled down by the Joint Bookrunners on the basis referred to in paragraph 6 below.

5.         The Bookbuild is expected to close no later than 5p.m. (London time) on 30 March 2017, but may be closed earlier or later, at the discretion of the Joint Bookrunners. The Joint Bookrunners may, in agreement with the Company, accept bids that are received after the Bookbuild has closed.

6.         Each Placee's allocation will be confirmed to Placees orally by the relevant Joint Bookrunner following the close of the Bookbuild, and a trade confirmation will be dispatched as soon as possible thereafter. The relevant Joint Bookrunner's oral confirmation to such Placee will constitute an irrevocable legally binding commitment upon such person (who will at that point become a Placee) in favour of such Joint Bookrunner and the Company, under which such Placee agrees to acquire the number of Placing Shares allocated to it and to pay the relevant Placing Price on the terms and conditions set out in this Appendix and in accordance with the Company's corporate documents.

7.         Subject to paragraphs 3 and 4 above, the Joint Bookrunners will, in effecting the Placing, agree with the Company the identity of the Placees and the basis of allocation of the Placing Shares.

8.         A bid in the Bookbuild will be made on the terms and subject to the conditions in this Appendix and will be legally binding on the Placee on behalf of which it is made and except with the relevant Joint Bookrunner's consent will not be capable of variation or revocation after the time at which it is submitted. Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to the relevant Joint Bookrunner, to pay it (or as it may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares that such Placee has agreed to acquire. Each Placee's obligations will be owed to the relevant Joint Bookrunner.

9.         Except as required by law or regulation, no press release or other announcement will be made by the Joint Bookrunners or the Company using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee's prior written consent.

10.       Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made at the same time, on the basis explained below under "Registration and Settlement".

11.       All obligations under the Bookbuild and Placing will be subject to fulfilment or (where applicable) waiver of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Right to terminate under the Placing Agreement".

12.       By participating in the Bookbuild, each Placee agrees that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee after confirmation (oral or otherwise) by a Joint Bookrunner.

13.       To the fullest extent permissible by law, neither the Joint Bookrunners, the Company nor any of their respective affiliates or persons acting on behalf of them shall have any responsibility or liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither of the Joint Bookrunners, nor the Company, nor any of their respective affiliates or persons acting on behalf of them shall have any responsibility or liability (including to the extent permissible by law, any fiduciary duties) in respect of the Joint Bookrunners' conduct of the Bookbuild or of such alternative method of effecting the Placing as the Joint Bookrunners and the Company may agree.

Conditions of the Placing

The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms. The Joint Bookrunners' obligations under the Placing Agreement are conditional on certain conditions, including:

(a)       Admission of the Placing Shares occurring at or before 8:00 a.m. (London time) on the Closing Date;

(b)       the Company having complied with all of the agreements and undertakings and satisfied or performed all of the conditions and obligations on its part to be performed or satisfied under the Placing Agreement on or before the Closing Date;

(c)       in the joint opinion of the Joint Bookrunners, there having been no material adverse change in or affecting, or any development reasonably likely to involve a material adverse change in or affecting, the condition (financial, operational, legal or otherwise) or earnings, management, business affairs, solvency, credit rating or prospects of the Company and its subsidiaries (the "Group") taken as a whole since the date of the Placing Agreement;

(d)       the publication by the Company of, among other announcements, the results of the Placing on a Regulatory Information Service;

(e)       the Company allotting and/or issuing, as applicable, subject only to Admission, the relevant Placing Shares in accordance with the Placing Agreement; and

(f)         the delivery to the Joint Bookrunners of certain documentary conditions precedent.

If: (i) any of the conditions contained in the Placing Agreement, including those described above, are not fulfilled or (where applicable) waived or extended in writing by the Joint Bookrunners by the relevant time or date specified (or such later time or date as the Company and the Joint Bookrunners may agree); or (ii) the Placing Agreement is terminated in the circumstances specified below, the Placing will lapse and the Placees' rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by it in respect thereof.

The Joint Bookrunners may, at their discretion, extend the time for satisfaction of, or waive compliance by the Company with, the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

None of the Joint Bookrunners shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision it may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision it may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the Joint Bookrunners.

Right to terminate under the Placing Agreement

The Joint Bookrunners are entitled, at any time on or before the Closing Date, to terminate the Placing Agreement in accordance with its terms in certain circumstances, including: (i) any breach of the representations or warranties given by the Company in the Placing Agreement, or any failure to perform any of the Company's obligations in the Placing Agreement by the times specified therein which, in either case the Joint Bookrunners consider to be material; (ii) any of the conditions in the Placing Agreement not having been satisfied, or waived by the Joint Bookrunners; or (iii) if there has been, in the joint opinion of the Joint Bookrunners, any material adverse change in or affecting, or any development likely to involve a material adverse change in or affecting the condition (financial, operational, legal or otherwise) or earnings, management, business affairs, solvency, credit rating or prospects of the Group taken as a whole since the date of the Placing Agreement; or (iv) the application for Admission is withdrawn or refused by the FCA or the London Stock Exchange (the "Exchange"), or in the joint opinion of the Joint Bookrunners, will not be granted.

By participating in the Placing, Placees agree that the exercise by the Company or any Joint Bookrunner of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of the Company or such Joint Bookrunner or for agreement between the Company and the Joint Bookrunner(s) (as the case may be) and that neither the Company or such Joint Bookrunner need make any reference to, or consultation with, Placees and that neither they nor any of their respective affiliates or any persons acting on behalf of them shall have any liability to Placees whatsoever in connection with any such exercise.

Lock-up

The Company has undertaken to the Joint Bookrunners that, between the date of the Placing Agreement and 180 days after the Closing Date, it will not, without the prior written consent of the Joint Bookrunners enter into certain transactions involving or relating to the Ordinary Shares, subject to certain, customary carve-outs agreed between the Joint Bookrunners and the Company.

By participating in the Placing, Placees agree that the exercise by the Joint Bookrunners of any power to grant consent to the undertaking by the Company or a Director of a transaction which would otherwise be subject to lock-up restrictions shall be within the absolute discretion of the Joint Bookrunners and that they need not make any reference to, or consultation with, Placees and that they shall have no liability to Placees whatsoever in connection with any such exercise of the power to grant consent.

No Prospectus

No offering document or prospectus has been or will be published or submitted to be approved by the FCA in relation to the Placing.

Placees' commitments will be made solely on the basis of the information contained in this Announcement. Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement and all other publicly available information previously or simultaneously published by the Company by notification to a Regulatory Information Service or otherwise filed by the Company is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information, representation, warranty, or statement made by or on behalf of the Joint Bookrunners or any other person and none of the Joint Bookrunners nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation by that person.

Registration and Settlement

Settlement of transactions in the Placing Shares (ISIN: GB00BJTNFH41) following Admission will take place in CREST. Subject to certain exceptions, the Joint Bookrunners and the Company reserve the right to require settlement of, and delivery of, the Placing Shares to Placees by such other means that they deem necessary if delivery or settlement is not practicable in CREST within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

Each Placee allocated Placing Shares in the Placing will be sent a trade confirmation in accordance with the standing arrangements in place with the relevant Joint Bookrunner stating the number of Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee to the Joint Bookrunner and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions in respect of the Placing Shares that it has in place with the relevant Joint Bookrunner (unless otherwise agreed).

It is expected that settlement will be on 3 April 2017 in accordance with the instructions set out in the trade confirmation or contract note (as applicable).

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by the Joint Bookrunners.

Each Placee is deemed to agree that, if it does not comply with these obligations, the Joint Bookrunners may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for the Joint Bookrunners' account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) or other similar taxes imposed in any jurisdiction which may arise upon the sale of such Placing Shares on such Placee's behalf.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation or contract note (as applicable) is copied and delivered immediately to the relevant person within that organisation.

Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax.

If there are any other circumstances in which any stamp duty or stamp duty reserve tax (including any interest and penalties relating thereto) is payable in respect of the allocation, allotment, issue or delivery of the Placing Shares (or for the avoidance of doubt if any stamp duty or stamp duty reserve tax is payable in connection with any subsequent transfer of or agreement to transfer Placing Shares), neither of the Joint Bookrunners nor the Company shall be responsible for the payment thereof. 

Placees (or any nominee or other agent acting on behalf of a Placee) will not be entitled to receive any fee or commission in connection with the Placing.

Representations, Warranties and Further Terms

By submitting a bid and/or participating in the Placing each Placee (and any person acting on such Placee's behalf) irrevocably:

1.         represents and warrants that it has read and understood the Announcement, and accepts the terms and conditions set out in this Appendix, entirely;

2.         acknowledges that no offering document or prospectus has been prepared in connection with the Placing and represents and warrants that it has not received a prospectus or other offering document in connection therewith;

3.         acknowledges that none of the Joint Bookrunners, the Company, any of their respective affiliates or any person acting on behalf of any of them has provided, nor will provide, it with any material regarding the Placing Shares or the Company other than this Announcement; nor has it requested any of the Joint Bookrunners, the Company, any of their affiliates or any person acting on behalf of any of them to provide it with any such information;

4.         acknowledges that the Company's Ordinary Shares are admitted to trading on the Exchange and the Company is required to publish certain information in accordance with applicable laws and regulations by notification to a Regulatory Information Service (collectively, the "Exchange Information"), which includes the Company's financial information, including balance sheets and income statements, and that it is able to obtain or access the Exchange Information;

5.         acknowledges that the content of this Announcement is exclusively the responsibility of the Company and that none of the Joint Bookrunners, nor their respective affiliates or any person acting on behalf of any of them has or shall have any liability for any information, representation or statement contained in, or omission from, this Announcement or any information previously published by or on behalf of the Company, including, but not limited to, the Exchange Information, and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to acquire Placing Shares is contained in this Announcement and any information previously or simultaneously published by the Company by notification to a Regulatory Information Service (and acknowledges that information previously published may since have been superseded or become out of date), such information being all that such Placee deems necessary or appropriate and sufficient to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given, or representations, warranties or statements made, by any of the Joint Bookrunners or the Company nor any of their respective affiliates and none of the Joint Bookrunners or the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

6.         acknowledges that it may not rely, and has not relied, on any investigation that the Joint Bookrunners, any of their affiliates or any person acting on their behalf, may have conducted with respect to the Placing Shares or the Company, and none of such persons has made any representation, express or implied, with respect to the Company, the Placing Shares or the accuracy, completeness or adequacy of the Exchange Information or any other information; each Placee further acknowledges that it has conducted its own investigation of the Company and the Placing Shares and has received all information it believes necessary or appropriate in connection with its investment in the Placing Shares;

7.         acknowledges that it has made its own assessment and has satisfied itself concerning the relevant tax, legal, currency and other economic considerations relevant to its investment in the Placing Shares;

8.         acknowledges that none of the Joint Bookrunners, their respective affiliates or any person acting on behalf of any of them has or shall have any liability for any information made publicly available by or in relation to the Company or any representation, warranty or statement relating to the Company or the Group contained therein or otherwise, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

9.         if it is located in the United Kingdom it is a Relevant Person and if it is located elsewhere in the EEA it is a Qualified Investor;

10.       acknowledges that the Placing Shares have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered, sold, resold, pledged, delivered, distributed or transferred, directly or indirectly, into or within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States; and represents and warrants that it is and, at the time the Placing Shares are acquired, will be either (i) outside the United States and acquiring the Placing Shares in an "offshore transaction" in accordance with Rule 903 or Rule 904 of Regulation S under the Securities Act; or (ii) a "qualified institutional buyer" (a "QIB") as defined in Rule 144A under the Securities Act, which is acquiring the Placing Shares for its own account or for the account of one or more QIBs, each of which is acquiring beneficial interests in the Placing Shares for its own account, pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States; if acquiring the Placing Shares for the account of one or more other persons, it has full power and authority to make, and does make, each of the representations, warranties, undertakings, agreements and acknowledgements contained herein on behalf of each such account;

11.       represents and warrants that it (i) has such knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of an investment in the Placing Shares, (ii) will not look to the Joint Bookrunners for all or part of any such loss it may suffer, (iii) is able to bear the economic risk of an investment in the Placing Shares, (iv) is able to sustain a complete loss of an investment in the Placing Shares and (v) has no need for liquidity with respect to its investment in the Placing Shares;

12.       acknowledges that the Placing Shares have not been and will not be registered and that a prospectus will not be approved in respect of any of the Placing Shares under the securities laws or legislation of Australia, Canada, Japan or South Africa and, subject to certain exceptions, the Placing Shares may not be offered, sold, or delivered or transferred, directly or indirectly, in or into those jurisdictions;

13.       represents, warrants and undertakes that, if resident in Australia (i) it is a professional investor as defined in Section 9, and for the purposes of Section 708(11), of the Corporations Act 2001 (Cth) of Australia, or the minimum amount to be paid by it for the Placing Shares to be subscribed for by it will be not less than AUD 500,000, and (ii) it is not acquiring the Placing Shares for the purpose of resale, transfer or the granting, issuing or transferring interests in, or options over them, and will not offer any Placing Shares for resale in Australia within 12 months of any such Placing Shares being issued to it unless the resale offer is exempt from the requirement to issue a disclosure document under Section 708 of the Corporations Act 2001 (Cth) of Australia;

14.       acknowledges that the Placing Shares are being subscribed for investment purposes, and not with a view to offer, resell or distribute within the meaning of the United States securities laws;

15.       acknowledges that it is not acquiring any of the Placing Shares as a result of any form of "general solicitation" or "general advertising" within the meaning of Rule 502(c) of Regulation D under the Securities Act, or any "directed selling efforts" as defined in Regulation S under the Securities Act;

16.       acknowledges that no representation has been made as to the availability of any exemption under the Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares;

17.       acknowledges that any Placing Shares offered and sold in the United States are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act and further agrees that so long as the Placing Shares are restricted securities, it will segregate such Placing Shares from any other shares in the Company that it holds that are not restricted securities and will not deposit the Placing Shares into any depositary receipt facility maintained by any depositary bank in respect of the Company's shares;

18.       acknowledges that, if the Placing Shares were offered to it in the United States, it has consulted its own independent advisors or otherwise has satisfied itself concerning, without limitation, the effects of United States federal, state and local income tax laws and foreign tax laws generally and the US Employee Retirement Income Security Act of 1974 ("ERISA"), the US Investment Company Act and the Securities Act;

19.       represents, warrants and agrees that, unless otherwise agreed with the Company, it is not (a) (i) an employee benefit plan as described in Section 3(3) of ERISA and subject to ERISA, (ii) a plan subject to Section 4975 of the US Internal Revenue Code of 1986, as amended (the "Code"), (iii) any entity whose assets are treated as assets of any such plan by reason of such employee benefit plan's or plans' investment in the entity, or (iv) a "benefit plan investor" as such term is otherwise defined in the regulations promulgated by the US Department of Labor, and (b) if it is a governmental plan, church or other plan which is subject to any federal, state or local law that is substantially similar to the provisions of Title I of ERISA or Section 4975 of the Code, its purchase, holding or disposition of Placing Shares will not constitute or result in a nonexempt violation under any such substantially similar law;

20.       represents and warrants that the issue to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services) and that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer Placing Shares into a clearance service;

21.       represents and warrants that it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006, the Money Laundering Regulations 2007 (as amended) and the Serious Crime Act 2015 and any related or similar rules, regulations or guidelines, issued, administered or enforced by any government agency having jurisdiction in respect thereof (the "Regulations") and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;

22.       if a financial intermediary, as that term is used in Article 3(2) of the EU Prospectus Directive, represents and warrants that the Placing Shares purchased by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a Member State of the EEA which has implemented the Prospectus Directive other than to Qualified Investors, or in circumstances in which the prior consent of the Joint Bookrunners has been given to the offer or resale;

23.       represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in the EEA except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the EEA within the meaning of the Prospectus Directive;

24.       represents and warrants that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) relating to the Placing Shares in circumstances in which section 21(1) of the Financial Services and Markets Act 2000 ("the FSMA") does not require approval of the communication by an authorised person;

25.       represents and warrants that it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;

26.       represents and warrants that it and any person acting on its behalf is entitled to acquire the Placing Shares under the laws of all relevant jurisdictions and that it has all necessary capacity and has obtained all necessary consents and authorities to enable it to commit to participation in the Placing and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this Appendix) and will honour such obligations;

27.       undertakes that it (and any person acting on its behalf) will make payment in respect of the Placing Shares allocated to it in accordance with this Appendix on the due time and date set out herein (unless otherwise agreed), failing which the relevant Placing Shares may be placed with other acquirers or sold as the Joint Bookrunners may in their sole discretion determine and without liability to such Placee, who will remain liable for any amount by which the net proceeds of such sale falls short of the product of the relevant Placing Price and the number of Placing Shares allocated to it and may be required to bear any stamp duty, stamp duty reserve tax or other similar taxes (together with any interest or penalties) which may arise upon the sale of such Placee's Placing Shares;

28.       acknowledges that none of the Joint Bookrunners, nor any of their respective affiliates, nor any person acting on behalf of them, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that its participation in the Placing is on the basis that it is not and will not be a client of any Joint Bookrunner in connection with its participation in the Placing and that the Joint Bookrunners have no duties or responsibilities to it for providing the protections afforded to their respective clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of their respective rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

29.       undertakes that the person whom it specifies for registration as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. None of the Joint Bookrunners or the Company will be responsible for any liability to stamp duty or stamp duty reserve tax or other similar taxes resulting from a failure to observe this requirement ("Indemnified Taxes"). Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify the Company and the Joint Bookrunners on an after-tax basis in respect of any Indemnified Taxes;

30.       agrees that its commitment to acquire Placing Shares on the terms set out herein and in the contract note or trade confirmation will continue notwithstanding any amendment that may in future be made to the terms of the Placing and Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's or the Joint Bookrunners' conduct of the Placing;

31.       acknowledges that any agreements entered into by it pursuant to the terms and conditions set out in this Appendix, and all non-contractual or other obligations arising out of or in connection with them, shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract (including any dispute regarding the existence, validity or termination of such contract or relating to any non-contractual or other obligation arising out of or in connection with such contract), except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by either the Company or the Joint Bookrunners in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;

32.       agrees to indemnify on an after tax basis and hold the Company, the Joint Bookrunners and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing;

33.       represents and warrants that it has neither received nor relied on any "inside information" (as defined In the EU Market Abuse Regulation) concerning the Company prior to or in connection with accepting this invitation to participate in the Placing and is not purchasing Placing Shares on the basis of inside information; and

34.       agrees that the Company, the Joint Bookrunners and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and undertakings which are given to the Joint Bookrunners on their own behalf and on behalf of the Company and are irrevocable.

The agreement to settle a Placee's acquisition of Placing Shares (and/or the acquisition by a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to an acquisition by it and/or such person direct from the Company for the Placing Shares in question. Such agreement also assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement relates to any other dealing in the Placing Shares, stamp duty or stamp duty reserve tax or other similar taxes may be payable, for which neither the Company nor the Joint Bookrunners will be responsible and the Placees shall indemnify the Company and the Joint Bookrunners on an after-tax basis for any stamp duty or stamp duty reserve tax paid by them in respect of any such arrangements or dealings. If this is the case, each Placee should seek its own advice and notify the Joint Bookrunners accordingly.

In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the acquisition by them of any Placing Shares or the agreement by them to acquire any Placing Shares.

Each Placee, and any person acting on behalf of the Placee, acknowledges that the Joint Bookrunners do not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement.

Each Placee and any person acting on behalf of the Placee acknowledges and agrees that any Joint Bookrunner or any of its affiliates may, at its absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares.

The Joint Bookrunners do not intend to disclose the extent of any such investment or participation otherwise than in accordance with any legal or regulatory obligation to do so.

When a Placee or person acting on behalf of the Placee is dealing with a Joint Bookrunner, any money held in an account with such Joint Bookrunner on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FCA made under the FSMA. Each Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from such Joint Bookrunner's money in accordance with the client money rules and will be used by such Joint Bookrunner in the course of its own business and the Placee will rank only as a general creditor of such Joint Bookrunner.

Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser. Each Placee should not consider any information in this Announcement to be legal, tax or business advice. Each Placee should consult its own lawyer, tax advisor and business advisor for legal, tax and business advice regarding an investment in the Placing Shares.

The rights and remedies of the Joint Bookrunners and the Company under these Terms and Conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others.

If a Placee is a discretionary fund manager, he may be asked to disclose, in writing or orally to the Joint Bookrunners the jurisdiction in which the funds are managed or owned.

All times and dates in this Announcement may be subject to amendment. The Joint Bookrunners shall notify the Placees and any person acting on behalf of the Placees of any changes.

 

END

 

 

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