Proposed Placing & Open Offer & Notice of GM

RNS Number : 0775R

B.P. Marsh & Partners PLC

12 June 2018

Date: 12 June 2018

On behalf of: B.P. Marsh & Partners Plc ("B.P. Marsh" or "the Company")

THIS ANNOUNCEMENT, INCLUDING THE APPENDICES AND THE INFORMATION CONTAINED HEREIN, IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, JAPAN, NEW ZEALAND OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL. THIS ANNOUNCEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR THE SOLICITATION TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE ANY ORDINARY SHARES OF B.P. MARSH & PARTNERS PLC IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.

B.P. Marsh & Partners Plc

("B.P. Marsh" or "the Company")

Proposed Placing and Open Offer to raise up to £17.0 million

and

Notice of General Meeting

B.P. Marsh & Partners Plc (AIM: BPM), the specialist venture capital investor in early stage financial services businesses, today announces a conditional placing of 6,169,194 new Ordinary Shares (the "New Placing Shares") to a new investor in the Company (the "Investor" or "PSC"), an entity in the PSC Insurance Group ("PSC Group"), at a price of 252 pence each (the "Issue Price") to raise gross proceeds of approximately £15.5 million for the Company (the "Placing"). Additionally, the Placing will also include the transfer by B.P. Marsh Management Limited (a company wholly owned by Brian Marsh, the Executive Chairman of the Group) of 1,166,310 Existing Ordinary Shares (the "Sale Shares") to the Investor, who has also agreed to acquire the Sale Shares at the Issue Price.

In addition, in order to provide existing Shareholders with an opportunity to participate in the proposed issue of New Ordinary Shares, the Company is intending to launch an open offer to all Qualifying Shareholders (the "Open Offer") to give them the opportunity to subscribe for an aggregate of up to 595,238 new Ordinary Shares ("Open Offer Shares") to raise approximately £1.5 million (before expenses) for the Company, on the basis of 1 Open Offer Share for every 21 Existing Ordinary Shares held on the Record Date, at the Issue Price. Qualifying Shareholders subscribing for their full entitlement under the Open Offer may also request additional Open Offer Shares through an Excess Application Facility.

The Directors intend to use the net proceeds of the Placing and Open Offer received by the Company to grow the Company's existing portfolio as well as to continue investing in early stage financial services intermediary businesses with the aim of becoming the capital provider of choice for the sector.

Background to the Placing and Open Offer

The PSC Group is a diversified insurance intermediary group with operations in Australia, New Zealand and the United Kingdom. The PSC Group is listed on the Australian Stock Exchange (ASX) with a market capitalisation of approximately A$731 million. The PSC Group comprises a portfolio of businesses, ranging from early stage to mature businesses, within the general insurance intermediary and services market.

The PSC Group wishes to expand its business interests in the United Kingdom by making a substantial investment in the Company. Additionally Brian Marsh, the Executive Chairman of the Group, who (along with certain of his connected persons, being B.P. Marsh Management Limited and the Marsh Christian Trust, as further referred to below) currently holds in excess 60.7 per cent. of the Ordinary Shares, wishes to diversify his personal holdings by transferring beneficial interests representing approximately 4.0 per cent. of the Existing Issued Share Capital (held through B.P. Marsh Management Limited, a company wholly owned by Brian Marsh) to a suitable, supportive third party investor.

Immediately following the Placing and Open Offer, the Investor will hold 7,335,504 Ordinary Shares in the Company, representing approximately 19.6 per cent. of the Enlarged Share Capital. The Investor will, as a result of the Placing, become a substantial shareholder in the Company.

The PSC Group and B.P. Marsh are complementary listed businesses operating in the insurance intermediary sector and the investment is considered by both businesses to be an excellent strategic and cultural fit. Both businesses have successful investment track records in the insurance intermediary space, without taking underwriting risk. Following the investment, B.P. Marsh and the PSC Group will consider themselves partners, with added strength and growing possibilities to work together in the UK and internationally.

Commenting on the Placing and Open Offer, Brian Marsh, Executive Chairman of B.P. Marsh, commented:

"We view the partnership with PSC as containing considerable potential, which will benefit our business and, in turn, prove valuable for shareholders."

Commenting on the Placing and Open Offer, Paul Dwyer, PSC's Group Managing Director, commented:

"PSC is delighted to be investing in and partnering with B.P. Marsh. B.P. Marsh is a world class investor in insurance intermediary assets and businesses, and has a very strong management team. We expect to be a long term investor, and expect over time for there to be numerous collaboration opportunities. We believe the best of both PSC and B.P. Marsh will bring benefits to the shareholders of both companies. The investment in B.P. Marsh is likely to broaden the global horizons of PSC over time."

Details of the Placing and Open Offer

The Placing and Open Offer are conditional, inter alia, on the passing, without amendment, of the relevant Resolutions by Shareholders at the General Meeting which is to be convened for 3.00 p.m. on 5 July 2018 at the Company's offices at 4 Matthew Parker Street, London, England SW1H 9NP and on the Admission of the New Ordinary Shares to trading on AIM. It is expected that Admission will become effective and that dealings in the New Ordinary Shares will commence no later than at 8.00 a.m. on 9 July 2018.

The Directors are fully supportive of the Open Offer and they (other than Brian Marsh, as detailed below) have indicated their intention to participate in full in the Open Offer in respect of their respective Basic Entitlements, and, to the extent possible, may also request additional Open Offer Shares through the Excess Application Facility.

To allow the remaining Qualifying Shareholders the opportunity to subscribe for more Ordinary Shares in the Company, in respect of their Basic Entitlements, and to reduce the dilutive impact of the Placing, Brian Marsh has irrevocably undertaken not to subscribe for any entitlements under the Open Offer (and has undertaken to procure that B.P. Marsh Management Limited, a company wholly owned by Brian Marsh, shall do the same), except that Brian Marsh has agreed to subscribe for any residual Excess Shares that are not taken up under the Excess Application Facility by the remaining Qualifying Shareholders up to a financial limit of £500,000 (the "Brian Marsh Subscription Commitment"). The entitlements which might otherwise have been available to Brian Marsh and B.P. Marsh Management Limited under the Open Offer will, therefore, be available for subscription by the remaining Qualifying Shareholders as part of their Basic Entitlements.

The terms and conditions of the Open Offer, including the Excess Application Facility, will be set out in the Circular to Shareholders, which will also include a notice convening a General Meeting. The Circular will set out the reasons for, and provide further information on, the Placing and Open Offer, to explain why the Board considers the Placing and Open Offer to be in the best interests of the Company and its Shareholders as a whole, and why the Board recommends that Shareholders vote in favour of the Resolutions. It is expected that the Circular will be dispatched on or around 13 June 2018 and will also be available at this time on the Company's website at www.bpmarsh.co.uk.

Panmure Gordon (UK) Limited ("Panmure Gordon") is acting: (i) as nominated adviser, financial adviser and broker to the Company in connection with the Placing and Admission; and (ii) as agent for B.P. Marsh Management Limited, in relation to the Placing. Panmure Gordon will not be conducting a bookbuilding exercise in respect of the Placing and New Placing Shares will not be issued to any person other than the Investor. The Placing and Open Offer will not be underwritten. The Placing Shares are not subject to clawback and are not part of the Open Offer. The Sale Shares will not be transferred to any person other than the Investor.

The Placing and the Open Offer are separate and distinct transactions involving the issue of Ordinary Shares. However, the Open Offer is conditional on the Placing and will not be implemented independently if for any reason the Placing lapses.

Dividends

The New Placing Shares and the Open Offer Shares will, following Admission, rank pari passu in all respects with the Existing Ordinary Shares and will carry the right to receive all dividends and distributions declared, made or paid on or in respect of the Ordinary Shares after Admission. The Directors have agreed that the New Placing Shares and the Open Offer Shares will be entitled to receive the Company's final cash dividend of 4.76 pence per Ordinary Share in respect of the 12 month period ended 31 January 2018 (the "2018 Final Dividend"), subject to Shareholder approval of the dividend at the Company's forthcoming annual general meeting. Under the Company's intended dividend timetable, the Ordinary Shares will be quoted ex the 2018 Final Dividend on 12 July 2018, and the record date for entitlement to participate in the 2018 Final Dividend will be 13 July 2018.

However, in the unlikely event Admission does not occur at 8.00 a.m. on 9 July 2018, being the expected date of Admission, and is subsequently delayed beyond the date on which the Ordinary Shares are quoted ex the 2018 Final Dividend (being 12 July 2018), the New Placing Shares and the Open Offer Shares will be issued "ex-dividend" and the holders of the New Placing Shares and the Open Offer Shares will therefore not be entitled to receive the 2018 Final Dividend.

Employee share incentive schemes

2018 JSOP

The Company has established a new joint share ownership plan (the "2018 JSOP") for eligible Group employees and senior executives to replace the 2014 JSOP, which matured in November 2017. The purpose of the 2018 JSOP is to provide eligible employees of the Group with a joint beneficial ownership in and an opportunity to benefit from any possible appreciation in the value of Ordinary Shares in the Company subject to a suitable hurdle rate.

To implement the 2018 JSOP, the Group has established an employee benefit trust which intends to subscribe for 1,461,302 new Ordinary Shares, representing 5.00 per cent. of the Existing Issued Share Capital, at the time the awards are made.

2018 SIP Allocation

As an update to the statutory "schedule 2" share incentive plan of the Company established by the Group on 29 March 2016 (the "B.P. Marsh SIP"), the Company intends to issue and allot up to 26,303 Ordinary Shares to the B.P. Marsh SIP Trustee as part of the 2018 SIP Allocation, representing 0.09 per cent. of the Existing Issued Share Capital. The Ordinary Shares held by the B.P. Marsh SIP Trust will be granted to eligible employees. It is expected that certain Directors will participate in the award of shares under the B.P. Marsh SIP.

As such, references throughout this Announcement to 'Enlarged Share Capital' mean the issued share capital of the Company immediately following Admission, assuming the maximum number of Open Offer Shares are allotted and including the new Ordinary Shares that are expected to be allotted under the 2018 JSOP and the new Ordinary Shares that are expected to be allotted under the 2018 SIP Allocation prior to Admission, being in aggregate up to 1,487,605 new Ordinary Shares, representing 5.09 per cent. of the Existing Issued Share Capital.

This Announcement should be read in its entirety. Further details of the Placing and Open Offer are set out in Appendix I to this Announcement. Shareholders' attention is also drawn to the risk factors described in Appendix II. The capitalised terms used in this Announcement have the meaning set out in Appendix III to this Announcement.

This Announcement contains inside information for the purposes of Article 17 of the Market Abuse Regulation (EU) No 596/2014. The person responsible for arranging the release of this Announcement on behalf of the Company is Sinead O'Haire, Group Company Secretary and Chief Legal Officer.

For further information:

B.P. Marsh & Partners Plc	www.bpmarsh.co.uk
Brian Marsh OBE / Camilla Kenyon	+44 (0)20 7233 3112

Nominated Adviser & Broker Panmure Gordon (UK) Limited
Atholl Tweedie / Charles Leigh-Pemberton / Sandra Björck	+44 (0)20 7886 2500

Redleaf Communications
Emma Kane / Elisabeth Cowell	+44 (0)20 7382 4732
Email: bpmarsh@redleafpr.com

IMPORTANT INFORMATION

No prospectus will be made available in connection with the matters contained in this Announcement and no such prospectus is required (in accordance with the Prospectus Directive) to be published.

The information contained in this Announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this Announcement or its accuracy, fairness or completeness.

Forward-Looking Statements

Certain statements in this Announcement may constitute "forward-looking statements" within the meaning of legislation in the United Kingdom, including (without limitation) those regarding the Placing, the Open Offer and any other potential offering of securities, the Group's financial position, business strategy, products, plans and objectives of management for future operations, and any statement preceded or followed by, or including, words such as "target", "believe", "expect", "aim", "intend", "will", "may", "anticipate", "would" or "could", or negatives of such words. Any forward-looking statements are based on currently available competitive, financial and economic data together with management's views and assumptions regarding future events and business performance as of the time the statements are made and are subject to risks and uncertainties. We wish to warn you that there are some known and unknown factors that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.

Reference should be made to those documents that B.P. Marsh shall file from time to time or announcements that may be made by B.P. Marsh in accordance with the London Stock Exchange AIM Rules for Companies ("AIM Rules") and the Disclosure Guidance and Transparency Rules ("DTRs"), which contain and identify other important factors that could cause actual results to differ materially from those contained in any projections or forward-looking statements. These forward-looking statements speak only as of the date of this Announcement. All subsequent written and oral forward-looking statements by or concerning B.P. Marsh are expressly qualified in their entirety by the cautionary statements above. Except as may be required under the AIM Rules or the DTRs or by relevant law in the United Kingdom, B.P. Marsh does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise arising.

No statement in this Announcement is intended to be a profit forecast and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

Panmure Gordon, which is authorised and regulated in the United Kingdom by the FCA, is acting for the Company as nominated adviser, financial adviser and broker in relation to the Placing and Admission and for B.P. Marsh Management Limited as agent in relation to the Placing and for no one else in connection with the Placing and Admission and will not be responsible to anyone other than the Company and B.P. Marsh Management Limited for providing the protections afforded to clients of Panmure Gordon or for providing advice in relation to the Placing, Admission or any other matters referred to in this Announcement and apart from the responsibilities and liabilities (if any) imposed on Panmure Gordon by FSMA, any liability therefor is expressly disclaimed. Any other person should seek their own independent legal, investment and tax advice as they see fit.

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 or on behalf of the Company, Panmure Gordon or by their affiliates or their respective agents, directors, officers and employees 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 therefor is expressly disclaimed.

The New Ordinary Shares to be issued pursuant to the Placing and the Open Offer will not be admitted to trading on any stock exchange other than to trading on AIM.

Members of the public are not eligible to take part in the Placing and no public offering of Placing Shares is being or will be made.

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this Announcement.

The Placing and Open Offer and the distribution of this Announcement and other information in connection with the Placing and Open Offer in certain jurisdictions may be restricted by law and persons into whose possession this Announcement, any document or other information referred to herein, comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

In particular, the securities of the Company (including the New Ordinary Shares) have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), or under the securities laws or with any securities regulatory authority of any state or other jurisdiction of the United States, and accordingly the New Ordinary Shares may not be offered, sold, pledged or transferred, directly or indirectly, in, 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 the securities laws of any relevant state or jurisdiction of the United States. There is no intention to register any portion of the offering in the United States or to conduct a public offering of securities in the United States.

The New Ordinary Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or Open Offer or the accuracy or adequacy of this Announcement. Any representation to the contrary is a criminal offence in the United States.

APPENDIX I

PROPOSED PLACING AND OPEN OFFER

Introduction

The Company announces today that it proposes to undertake a Placing to raise approximately £15.5 million (before fees and expenses) together with an Open Offer to raise up to approximately £1.5 million (before fees and expenses), in each case through the issue of New Ordinary Shares at the Issue Price. All the New Placing Shares will be placed with the Investor, an entity in the PSC Insurance Group.

Additionally, the Placing will also include the transfer by B.P. Marsh Management Limited (a company wholly owned by Brian Marsh) of 1,166,310 Sale Shares to the Investor, who has agreed to acquire the Sale Shares at the Issue Price.

The Issue Price represents a discount of approximately 11.3 per cent. to the Closing Price on the Latest Practicable Date and a discount of approximately 2.7 per cent. to the 60 trading day volume weighted average Closing Price for the 60 trading days ending on the Latest Practicable Date. Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that Admission will occur on or around 9 July 2018. The Placing and the Open Offer are conditional, inter alia, on the passing of the Resolutions at the General Meeting. The Resolutions will be contained in the Notice of General Meeting which will form part of the Circular. The Placing Shares are not subject to clawback and are not part of the Open Offer.

The purpose of this Announcement and the Circular is to set out the background to, and the reasons for, the Placing and the Open Offer. It explains why the Directors consider the Placing and the Open Offer to be in the best interests of the Company and its Shareholders as a whole. The Board recommends that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting, as the Directors, who are interested in Ordinary Shares, have irrevocably undertaken to do in respect of their own beneficial shareholdings (and where shareholdings are registered in the name of any of their immediate family members and/or persons connected with them, have undertaken to use reasonable endeavours to procure that those persons will vote in favour of the Resolutions).

Shareholder approval is being sought in connection with the Placing and the Open Offer at the General Meeting which is to be convened for 3.00 p.m. on 5 July 2018 at the offices of the Company at 4 Matthew Parker Street, London, England SW1H 9NP.

Background to and reasons for the Placing and Open Offer and use of proceeds

The Investor, an entity in the PSC Insurance Group based in Australia, New Zealand and the United Kingdom, wishes to expand its business interest in the United Kingdom by making a substantial investment in the Company. Additionally Brian Marsh, the Executive Chairman of the Group, who (along with certain of his connected persons) currently holds in excess of 60.7 per cent. of the Ordinary Shares, wishes to diversify his personal holdings by transferring beneficial interests representing approximately 4.0 per cent. of the Existing Issued Share Capital (held through B.P. Marsh Management Limited, a company wholly owned by Brian Marsh) to a suitable, supportive third party investor.

The Directors believe that the Placing is the most appropriate method:

· to issue the New Placing Shares in the Company to the Investor; and

· for Brian Marsh to transfer the Sale Shares to the Investor.

In addition, in order to provide existing Shareholders with an opportunity to participate in the proposed issue of New Ordinary Shares, the Company is providing all Qualifying Shareholders with the opportunity to subscribe for an aggregate of up to 595,238 Open Offer Shares, to raise up to approximately £1.5 million (before fees and expenses) for the Company, on the basis of 1 Open Offer Share for every 21 Existing Ordinary Shares held on the Record Date, at the Issue Price. Shareholders subscribing for their full entitlement under the Open Offer may also request additional Open Offer Shares through the Excess Application Facility.

Immediately following the Placing and Open Offer, the Investor will hold approximately 19.6 per cent. of the Enlarged Share Capital. The Investor will, as a result of the Placing become a substantial shareholder in the Company. More information about the PSC Insurance Group is set out below.

Information on PSC and their rationale for investing in the Company

The PSC Insurance Group ("PSC Group") operates a diversified insurance intermediary Group with operations and investments in Australia, New Zealand and the United Kingdom. The PSC Group is listed on the Australian Stock Exchange (ASX), with a market capitalisation of approximately A$731m. PSC Group's principal businesses within the general insurance intermediary and services market comprise:

· insurance broking;

· underwriting agencies;

· an authorised representative network business in Australia;

· wholesale insurance broking in the United Kingdom; and

· reinsurance broking in the United Kingdom.

PSC Group's structure comprises a portfolio of operating businesses and investments ranging from early stage to mature businesses. The PSC Group has an experienced team of insurance practitioners, with broad skill sets, at both board and executive level. These are utilised across the different businesses to leverage efficiencies and opportunities.

The PSC Group also operates complementary businesses including life insurance broking, on-line direct general insurance broking and third party claims management. The PSC Group does not take underwriting risk, however maintains relationships with many insurers in Australia, New Zealand and the United Kingdom.

The PSC Group conducts its business through a number of separate licensed subsidiaries in Australia and the United Kingdom.

The PSC Group has a diverse client base. It predominantly services the insurance needs of SMEs. These clients have access to the full range of business services offered by the PSC Group. The PSC Group also services other insurance brokers through its United Kingdom broking and underwriting agency operations and services insurance carriers by way of their reinsurance operations.

Following the investment, B.P. Marsh and the PSC Group will consider themselves partners, with added strength and exciting possibilities for joint working in the UK and internationally.

Current trading and outlook

The Company announced today its audited Group final results for the year to 31 January 2018. A copy of the final results is available on the Company's website at www.bpmarsh.co.uk. Shareholders should read those results in full before making any application for Open Offer Shares. The Company is due to publish its annual report and accounts for the year ending 31 January 2018 on or around 26 June 2018, a copy of which will be sent to the Shareholders and will also be made available on the same website.

The highlights of the final results for the year to 31 January 2018 are:

· an increase in the equity value of the Group's investment portfolio of 31.3 per cent. (£18.9m) over the year to 31 January 2018;

· net asset value of £98.9m (31 January 2017: £79.7m), a 24.1 per cent. increase (net of dividends);

· a net asset value increase to 339p per Ordinary Share (31 January 2017: 273p);

· a total return to Shareholders in the year of 25.5 per cent. (2017: 13.9 per cent.);

· consolidated profit after tax of £20.2m (31 January 2017: £9.8m);

· average net asset value annual compound growth rate of 12.0 per cent. since 1990;

· 2018 Final Dividend of 4.76p per share declared (31 January 2017: 3.76p), a 27 per cent. increase;

· cash and treasury funds balance of £5.4m at year end;

· four new investments - two in Lloyd's brokers and the other two in USA-based Mark Edwards Partners LLC and XPT Group LLC;

· disposal of interests in Besso Insurance Group Ltd and Trireme Insurance Group Ltd;

· a further investment into LEBC Holdings Ltd of £7.1m; and

· the provision of follow-on funding to Nexus Underwriting Management Ltd of £4.0m.

The Group is growing strongly, delivering consistent year on year returns to shareholders and is well- positioned to deal with any uncertainty arising from the UK's exit from the EU by April 2019. The Directors look forward to the year ahead with confidence.

Details of the Placing and the Open Offer

Structure

The Directors have given careful consideration as to the structure of the proposed fundraising and have concluded that the Placing and the Open Offer is the most suitable option available to the Company and its Shareholders at this time.

Through the Placing:

· 6,169,194 New Placing Shares will be issued to the Investor at 252 pence per New Placing Share to raise gross proceeds of approximately £15.5 million; and

· 1,166,310 Sale Shares will be transferred at a price of 252 pence per Sale Share by B.P. Marsh Management Limited (a company wholly owned by Brian Marsh) to the Investor.

Up to 595,238 New Ordinary Shares will be issued to Qualifying Shareholders through the Open Offer at 252 pence per New Ordinary Share to raise gross proceeds of up to approximately £1.5 million.

Principal terms of the Placing

The Company is proposing to issue the New Placing Shares to the Investor pursuant to the Placing. In accordance with the terms of the Placing and Open Offer Agreement, Panmure Gordon has, as broker for the Company, conditionally placed, with the Investor, the New Placing Shares at the Issue Price to raise gross proceeds for the Company of approximately £15.5 million. Panmure Gordon has also, as agent for B.P. Marsh Management Limited, conditionally placed, with the Investor, the Sale Shares at the Issue Price.

No Placing Shares will be issued/transferred to any person other than the Investor. Panmure Gordon will not be conducting a bookbuilding exercise in respect of the Placing and New Placing Shares will not be issued to/placed under the Placing with any other person other than the Investor.

The Placing is not being underwritten.

The Placing Shares are not subject to clawback and are not part of the Open Offer.

The Investor will, immediately following Admission, and assuming full take up of entitlements under the Open Offer, hold approximately 19.6 per cent. of the Enlarged Share Capital and, therefore, may have the ability to, directly or indirectly, exercise a controlling influence on the business of the Group. As a substantial shareholder in the Company, the Investor has undertaken, for as long as it holds at least 15 per cent. of the Enlarged Share Capital to:

(a) conduct all transactions, agreements, relationships and arrangements with any member of the Group on an arm's length basis and on normal commercial terms;

(b) not take any action that would have the effect of preventing, or that might reasonably be expected to prevent, any member of the Group from complying with its obligations under any applicable laws;

(c) not exercise any of the voting rights or any other powers of control in such a manner so as to procure any amendment to the Company's articles of association;

(d) not exercise any of the voting rights in favour of any resolution to cancel the admission of the Ordinary Shares to trading on AIM, unless such resolution is also recommended by the independent Directors of the Company; and

(e) exercise any voting rights against any resolution to give the Directors authority to allot shares in the Company, or to disapply any pre-emption rights which holders of Ordinary Shares have, unless such resolutions are recommended by the independent Directors of the Company to Shareholders or unless such disapplication is at the Company's annual general meeting.

Principal terms of the Open Offer

The Directors consider it important that Qualifying Shareholders have the opportunity to participate in the fundraising, and the Directors have concluded that the Open Offer is the most suitable option available to the Company and its Shareholders.

Subject to the below, the Open Offer provides an opportunity for all Qualifying Shareholders to participate in the fundraising by both subscribing for their respective Basic Entitlements and, subject to availability, by subscribing for Excess Shares under the Excess Application Facility.

To allow the remaining Qualifying Shareholders the opportunity to subscribe for more Ordinary Shares in the Company, in respect of their Basic Entitlements, and to reduce the dilutive impact of the Placing, Brian Marsh has irrevocably undertaken not to subscribe for any entitlements under the Open Offer (and has undertaken to procure that B.P. Marsh Management Limited, a company wholly owned by Brian Marsh, shall do the same), except that Brian Marsh has agreed to subscribe for any residual Excess Shares that are not taken up under the Excess Application Facility by the remaining Qualifying Shareholders, up to a financial limit of £500,000 (the "Brian Marsh Subscription Commitment"). The entitlements which might otherwise have been available to Brian Marsh and B.P. Marsh Management Limited under the Open Offer will, therefore, be available for subscription by the remaining Qualifying Shareholders as part of their Basic Entitlements.

Basic Entitlement

Qualifying Shareholders are invited, on and subject to the terms and conditions of the Open Offer, to apply for any number of Open Offer Shares (subject to the limit on the number of Excess Shares that can be applied for using the Excess Application Facility) at the Issue Price. Qualifying Shareholders have a Basic Entitlement of:

1 Open Offer Share for every 21 Existing Ordinary Shares

registered in the name of the relevant Qualifying Shareholder on the Record Date.

Basic Entitlements under the Open Offer will be rounded down to the nearest whole number and any fractional entitlements to Open Offer Shares will be disregarded in calculating Basic Entitlements and will be aggregated and made available to Qualifying Shareholders under the Excess Application Facility.

The aggregate number of Open Offer Shares available for subscription pursuant to the Open Offer will not exceed 595,238 New Ordinary Shares.

2018 Final Dividend

The Company, as part of its February 2018 Trading Update, announced the 2018 Final Dividend which, subject to Shareholder approval of the dividend at the Company's forthcoming annual general meeting, is expected to be paid on 31 July 2018 to Shareholders whose names are on the register on 13 July 2018. The New Ordinary Shares issued as part of the Placing and Open Offer will be issued "cum-dividend" and the holders of the New Ordinary Shares will therefore be entitled to receive the 2018 Final Dividend.

Shareholders should note, however, that if, in the unlikely event, Admission does not occur at 8.00 a.m. on 9 July 2018, being the expected date of Admission, and is subsequently delayed beyond the date on which the Ordinary Shares are quoted ex the 2018 Final Dividend (being 12 July 2018), the New Ordinary Shares issued as part of the Placing and Open Offer will be issued "ex-dividend" and the holders of the New Ordinary Shares would therefore not be entitled to receive the 2018 Final Dividend.

Conditionality

The Placing and the Open Offer are conditional upon, among other things, the following:

· the passing (without amendment) at the General Meeting of the Resolutions and the Resolutions becoming unconditional;

· the London Stock Exchange agreeing to admit (subject only to allotment, where relevant) the New Placing Shares and the Open Offer Shares to trading on AIM;

· Admission taking place by not later than 8.00 a.m. on 9 July 2018 (or such later date as Panmure Gordon may agree as the date for Admission, but in any event not later than 8.00 a.m. on 13 July 2018); and

· the Placing and Open Offer Agreement becoming unconditional in all respects (save for the condition relating to Admission) and not having been terminated in accordance with its terms prior to Admission.

If the conditions set out above are not satisfied or waived (where capable of waiver):

· the Placing and the Open Offer will lapse;

· the New Placing Shares will not be issued and all monies received from the Investor in respect of the New Placing Shares will be returned to the Investor (at the Investor's risk and without interest) as soon as possible thereafter;

· the Sale Shares will not be transferred to the Investor and all monies received from the Investor in respect of the Sale Shares will be returned to the Investor (at the Investor's risk and without interest) as soon as possible thereafter; and

· any Basic Entitlements and Excess CREST Open Offer Entitlements admitted to CREST will, after that time and date, be disabled and application monies under the Open Offer will be refunded to the applicants, by cheque (at the applicant's risk) in the case of Qualifying Non-CREST Shareholders and by way of a CREST payment in the case of Qualifying CREST Shareholders, without interest, as soon as practicable thereafter.

The Placing and the Open Offer are separate and distinct transactions involving the issue of Ordinary Shares. However the Open Offer is conditional on the Placing and will not be implemented independently if for any reason the Placing lapses.

General Meeting

The General Meeting of the Company, notice of which will be contained in the Circular, is to be held at 3.00 p.m. on 5 July 2018 at the offices of the Company at 4 Matthew Parker Street, London, England SW1H 9NP. The General Meeting is being held for the purpose of considering and, if thought fit, passing the Resolutions required in connection with the implementation of the Placing and the Open Offer.

A summary and explanation of the Resolutions will be set out in the Circular.

For the avoidance of doubt, none of the Resolutions shall be required or shall apply in respect of the placing of the Sale Shares as such shares are already in existence at the date of this Announcement.

Intentions of Brian Marsh and certain Directors in relation to the Placing and Open Offer

The Directors (other than Brian Marsh) who in aggregate hold 234,554 Existing Ordinary Shares, representing approximately 0.8 per cent. of the Existing Issued Share Capital, are fully supportive of the Placing and Open Offer and have irrevocably undertaken to vote (and where such Existing Ordinary Shares are registered in the name of any of their immediate family members and/or persons connected with them, have irrevocably undertaken to use reasonable endeavours to procure that those persons will vote) in favour of the Resolutions at the General Meeting.

The Directors (other than Brian Marsh) who are Qualifying Shareholders intend to participate (where possible in full) in the Open Offer in respect of their respective Basic Entitlements, which amount to 11,166 Open Offer Shares in aggregate, and, to the extent possible, may also apply for additional Open Offer Shares through the Excess Application Facility.

Brian Marsh, the Company's majority shareholder, who (together with B.P. Marsh Management Limited, a company wholly owned by Brian Marsh) in aggregate holds 16,731,581 Existing Ordinary Shares, representing approximately 57.3 per cent. of the Existing Issued Share Capital, is fully supportive of the Placing and Open Offer and has irrevocably undertaken to vote (and, where such Existing Ordinary Shares are registered in the name of B.P. Marsh Management Limited, has undertaken to procure that B.P. Marsh Management Limited will vote) in favour of the Resolutions at the General Meeting.

To allow the remaining Qualifying Shareholders the opportunity to subscribe for more Ordinary Shares in the Company, in respect of their Basic Entitlements, and to reduce the dilutive impact of the Placing, Brian Marsh has irrevocably undertaken not to subscribe for any entitlements under the Open Offer (and has undertaken to procure that B.P. Marsh Management Limited shall do the same), except that Brian Marsh has agreed to subscribe for any residual Excess Shares that are not taken up under the Excess Application Facility by the remaining Qualifying Shareholders up to a financial limit of £500,000. The entitlements which might otherwise have been available to Brian Marsh and B.P. Marsh Management Limited under the Open Offer will, therefore, be available for subscription by the remaining Qualifying Shareholders as part of their Basic Entitlements.

Directors' interests

The interests (all of which are beneficial unless stated otherwise) of the Directors and their immediate families and of persons connected with them (within the meaning of Section 252 of the Act) in the Existing Issued Share Capital and the existence of which is known to, or could with reasonable due diligence be ascertained by, any Director as at the Latest Practicable Date and as they are so expected to be upon Admission (assuming full take-up under the Open Offer) are as per the table below.

The Directors (other than Brian Marsh) have indicated their intention to subscribe in full for their respective Basic Entitlements, where possible, under the Open Offer. The table below summarises the individual beneficial shareholding positions of each of the Directors before and after the Placing and Open Offer.

	At the Latest Practicable Date		Number of Ordinary Shares subscribed for under the Open Offer¹	On Admission
Name	Number of Ordinary Shares	Percentage of Existing Issued Share Capital		Number of Ordinary Shares	Percentage of Enlarged Share Capital³
Mr. Brian Marsh (along with certain of his connected persons)²	17,729,581	60.71%	0	16,563,271	44.19%
Ms. Alice Foulk	16,184	0.06%	770	16,954	0.05%
Mr. Daniel Topping	78,462	0.27%	3,736	82,198	0.22%
Mr. Jonathan Newman	16,256	0.06%	774	17,030	0.05%
Ms. Camilla Kenyon	18,044	0.06%	859	18,903	0.05%
Mr. Campbell Scoones	51,000	0.17%	2,428	53,428	0.14%
Mr. Pankaj Lakhani	35,000	0.12%	1,666	36,666	0.10%
Mr. Nicholas Walker⁴	19,608	0.07%	933	20,541	0.05%

Notes:

1 Assuming full take up of only the Basic Entitlements under the Open Offer by all eligible Directors, with the exception of Brian Marsh and certain of his connected persons.

2 Aggregate interest of Brian Marsh and B.P. Marsh Management Limited (a company wholly owned by Brian Marsh) and the Marsh Christian Trust (a charitable trust founded by Brian Marsh and the trustee board of which Brian Marsh is the Chairman). The direct interests of Brian Marsh, B.P. Marsh Management Limited and the Marsh Christian Trust are as follows:

	As at the Latest Practicable Date		On Admission³
Name	Number of Shares	Percentage of Existing Issued Capital	Number of Ordinary Shares	Percentage of Enlarged Share Capital³
Mr. Brian Marsh (direct interest)	15,565,271	53.30%	15,565,271	41.53%
B.P. Marsh Management Limited	1,166,310	3.99%	Nil	nil
Marsh Christian Trust	998,000	3.42%	998,000	2.66%

3 Assuming full take up of the Open Offer by Qualifying Shareholders (with the exception of Brian Marsh and B.P Marsh Management Limited, who have each confirmed that they will not take up any Ordinary Shares which may otherwise have been offered to them as part of the Open Offer and will not subscribe for any Open Offer Shares, in order to maximise the number of Open Offer Shares available under the Open Offer to Qualifying Shareholders, except that Brian Marsh has agreed to subscribe for any residual Excess Shares that are not taken up under the Excess Application Facility by the remaining Qualifying Shareholders up to a financial limit of £500,000, and assuming that the Marsh Christian Trust does not subscribe for any Open Offer Shares), but excluding any interests of the Directors in any Ordinary Shares which are issued and allotted to the EBT under the 2018 JSOP prior to Admission and/or in any Ordinary Shares issued and allotted to the B.P. Marsh SIP Trustee prior to Admission.

4 Mr. Nicholas Walker's beneficial interests include 9,804 Ordinary Shares owned by his wife, Annabel Walker.

Recommendation

The Directors believe that the Placing and the Open Offer are in the best interests of the Company and its Shareholders as a whole.

Accordingly, the Board recommends that you vote in favour of the Resolutions as each of the Directors who are interested in the Ordinary Shares have irrevocably undertaken to do (and where such Ordinary Shares are registered in the name of any of their immediate family members and/or persons connected with them, have irrevocably undertaken to use reasonable endeavours to procure that those persons do so) in respect of their beneficial holdings of the Existing Issued Share Capital. Whilst Brian Marsh is fully supportive of the Placing and Open Offer, he has abstained from joining in the formal recommendation of the Board to Shareholders, on the basis of his personal participation in the Placing and Open Offer.

The Company is in receipt of irrevocable undertakings from the Directors to vote in favour of the Resolutions representing approximately 58.1 per cent. of the Existing Issued Share Capital.

Expected timetable of principal events

Record Date for entitlement to participate in the Open Offer	5.00 p.m. on 11 June 2018
Announcement of the Placing and the Open Offer	on 12 June 2018
Despatch of the Circular, the Form of Proxy and, to certain Qualifying Non-CREST Shareholders, the Application Form	on 13 June 2018
Ex-entitlement Date for the Open Offer	7.00 a.m. on 13 June 2018
Basic Entitlements and Excess CREST Open Offer Entitlements credited to CREST stock accounts of Qualifying CREST Shareholders	on 14 June 2018
Recommended latest time and date for requesting withdrawal of Basic Entitlements and Excess CREST Open Offer Entitlements from CREST	4.30 p.m. on 28 June 2018
Latest time for depositing Basic Entitlements and Excess CREST Open Offer Entitlements into CREST	3.00 p.m. on 29 June 2018
Latest time and date for splitting Application Forms (to satisfy bona fide market claims only)	3.00 p.m. on 2 July 2018
Latest time and date for receipt of Forms of Proxy for the General Meeting	3.00 p.m. on 3 July 2018
Latest time and date for receipt of completed Application Forms and payment in full under the Open Offer or settlement of relevant CREST instruction (as appropriate)	11.00 a.m. on 4 July 2018
General Meeting	3.00 p.m. on 5 July 2018
Announcement of the result of the General Meeting and Open Offer	on 6 July 2018
Admission of the New Ordinary Shares to trading on AIM	8.00 a.m. on 9 July 2018
New Ordinary Shares in uncertificated form expected to be credited to accounts in CREST (uncertificated holders only)	As soon as practicable after 8.00 a.m. on 9 July 2018
Expected date of despatch of definitive share certificates for the New Ordinary Shares in certificated form (certificated holders only)	on 16 July 2018
Annual General Meeting of the Company	on 18 July 2018

If any of the details contained in the timetable above should change, the revised time and dates will be notified to Shareholders by means of a Regulatory Information Service (as defined in the AIM Rules) announcement.

In this Announcement, all references to times and dates are to times and dates in London, United Kingdom. The timetable above assumes that the Resolutions are passed at the General Meeting without adjournment.

Dealing codes

The ISIN of the Basic Entitlements: GB00BD24ZC73

The ISIN of the Excess CREST Open Offer Entitlements: GB00BD24ZD80

APPENDIX II

RISK FACTORS

Potential investors should carefully consider the risks described below before making a decision to invest in the Company. This Appendix II contains what the Directors believe to be certain of the principal risk factors associated with an investment in the Company. It should be noted that this list is not exhaustive and that other risk factors will apply to an investment in the Company. If any of the following risks actually occur, the Company's business, financial condition and/or results or future operations could be materially adversely affected. In such circumstances, the trading price of the New Ordinary Shares could decline and an investor may lose all or part of their investment. There can be no certainty that the Company will be able to implement successfully the strategy set out in this Announcement, the Circular or any documents referred to therein. Additional risks and uncertainties not currently known to the Directors or which the Directors currently deem immaterial, may also have an adverse effect on the Company.

This Announcement contains and the Circular will contain forward-looking statements that involve risks and uncertainties. The Company's actual results could differ materially from those anticipated in the forward-looking statements as a result of many factors, including the risks faced by the Company which are described below and elsewhere in this Announcement. Prospective investors should carefully consider the other information in this Announcement. The risks listed below do not necessarily comprise all the risks associated with an investment in the Company.

An investment in the Company may not be suitable for all recipients of the Announcement and the Circular. Investors are accordingly advised to consult an independent financial adviser duly authorised under FSMA and who specialises in advising upon the acquisition of shares and other securities before making a decision to invest.

The Group's principal activity is the provision of consultancy services to, as well as making and trading investments in, financial services businesses, and specifically insurance intermediaries. As with any business in this sector, there are risks and uncertainties relevant to the Group's business. Certain of these risk factors affect the majority of businesses, some are common to businesses in the financial services and insurance sector and others are more specific to the Group.

1 Principal risks and uncertainties relating to the Group

1.1 Price risk

The Group is exposed to private equity securities price risk. The Group's investee companies are themselves subject to market risks and it is not possible to guarantee that any of these investee companies will perform to the Group's expectations. The Group manages the risk by ensuring that there is a director appointed to the board of each of its investee companies. In this capacity, the appointed director can advise the Group's board of investee companies' activities and prompt action can be taken to protect the value of the investment.

1.2 Credit risk

The Group is exposed to the risk of default on the loans it has made available to investee companies. The Group manages the risk by ensuring that there is a director appointed to the board of each of its investee companies. In this capacity, the appointed director can advise the Group's board of investee companies' activities and prompt action can be taken to protect the value of the loan. As such the directors believe the credit risk to the Group is adequately managed.

1.3 Liquidity risk

The Group is likely to commit to investments of a long-term and illiquid nature in companies whose shares are not quoted or dealt on any recognised investment exchange. Such investments are likely to involve a high degree of risk and the timing of cash distributions to investors is uncertain and unpredictable. Unquoted investments can take several years to mature. Consequently, while long-term performance of the underlying investments may be strong, performance in the short term may be poor.

The directors assess and review the Group's liquidity position and funding requirements on a regular basis and this is an agenda item for the Group's board meetings. While the Directors consider that, following the Placing and Open Offer, the Group will have sufficient liquidity to manage its commitments, there can be no assurance that further funding will not be required by the Group to meet its commitments and to implement its business plan. Any additional equity financing may be dilutive to Shareholders, and debt financing, if available, may involve restrictions in financing and operating activities.

1.4 New investment risk

The Group has an active New Business department which continues to receive a strong pipeline of new investment opportunities. In addition, there is often potential for further investment within the Group's existing portfolio. An inherent risk of realising any investment is the loss of a performing asset and a potential lack of new investments to replace the lost income and capital growth. Prior to reinvestment, returns on cash can be significantly lower, which may reduce underlying profitability on a short-term basis until funds are reinvested.

1.5 Concentration risk

The Group only invests in financial services businesses, and specifically insurance intermediaries and is therefore subject to the risk of loss in value of its investment portfolio in the event of a downturn in this market. Though its investments are concentrated, the Group has a wealth of experience in this specific sector and seeks to manage concentration risk by making investments across a variety of geographic areas, development stages of business and classes of product.

1.6 Litigation risk

Legal proceedings, with or without merit, may arise from time to time in the course of the Group's business. The Directors cannot preclude litigation being brought against any member of the Group (whether with or without merit) and any litigation brought against any member of the Group could be expensive, time consuming and have an adverse effect on the financial condition, results or operations of the Group. The Group's business may be adversely affected if the Group and/or its employees or agents are found not to have met the appropriate standard of care or exercised their discretion or authority in a prudent or appropriate manner in accordance with accepted standards. The Directors regularly review the level and scope of the Group's D&O liability insurance cover to ensure that it is sufficient to mitigate these risks.

1.7 Currency exchange rate fluctuations and overseas activities

Although the Group's investments are predominantly within the UK it also makes investments and derives income outside the UK. As such, some of the Group's income and assets are subject to movement in foreign currencies.

Foreign revenues are also subject to special risks that may disrupt markets, including the risk of war, terrorism, civil disturbances, embargo, and government activities. Revenue generating activities in certain foreign countries may require prior governmental approval in the form of an export licence and otherwise be subject to tariffs and import/export restrictions. There can be no assurance that the Group will not experience difficulties in connection with future foreign revenues and, in particular, adverse effects from foreign currency fluctuations.

Conducting business in most countries will require the Group to become familiar with and to comply with foreign laws, rules, regulations and customs. The Group has growing experience conducting foreign business and the Group cannot assure investors that it will be successful. Moreover, the Group's failure to comply with foreign laws, rules and regulations of which the Group is not aware may harm the development of the Group's business. Further, risks are inherent in international operations, including the following:

(a) customer agreements may be difficult to enforce and receivables difficult to collect through a foreign country's legal system;

(b) foreign customers may have longer payment cycles;

(c) foreign countries may tax foreign income and tax rates in certain foreign countries may exceed those of the United Kingdom and foreign earnings may be subject to withholding requirements or the imposition of tariffs, exchange controls or other restrictions;

(d) intellectual property rights may be more difficult to enforce in foreign countries; and

(e) general economic conditions in the countries in which the Group seeks to trade could have an adverse effect on the Group earnings from operations in those countries.

The Group engages in short term currency hedges from time to time (but not always) when a need is identified for currency in a certain denomination. The Group, in contracting to forward contracts, may lose out on more advantageous deals closer to the date of the transaction.

1.8 Interest rate risk

The Group had no interest bearing liabilities but had interest bearing assets. Interest bearing assets are loans made available to investee companies to aid their expansion and are normally subject to a minimum interest rate to protect the Group from a period of low interest rates.

1.9 General economic conditions and volatility

Market conditions may affect the ultimate value of the Ordinary Shares regardless of operating performance. The Group could be affected by unforeseen events outside its control, including, natural disasters, terrorist attacks and political unrest and/or government legislation or policy, variations in operating results, changes in financial estimates and recommendations by securities analysts, the share price performance of other companies that investors may deem comparable to the Company, news reports relating to trends in the Group's markets, and other factors outside the Group's control. Further general economic conditions may affect exchange rates, interest rates and inflation rates. Movements in these rates may have an impact on the Company's cost of raising and maintaining debt financing should it seek to do so in the future. Prospective investors should be aware that the value of the Ordinary Shares could go down as well as up and investors may therefore not recover their original investment especially as the market in the Ordinary Shares may have limited liquidity.

1.10 Risk of legal and regulatory changes

This is the risk that the Group or one of its component parts breaches legal, regulatory or tax requirements of other jurisdictions in which it has a presence. The Group's strategy has been formulated in the light of the current regulatory and legal environment and anticipated future changes. The regulatory and legal environment may change and any such change may have adverse consequences for the Group and its business.

The financial services industry is heavily regulated in most jurisdictions. The majority of the companies owned by the Group are subject to the regulatory system in the jurisdictions in which they operate. These companies, and any future acquisitions by the Group, may not be able to maintain the necessary licences, permits and permissions, authorisations or accreditations in jurisdictions in which they currently engage in business or may only be able to do so only at significant cost.

In the United Kingdom, the Group is subject to regulation by the FCA through its quotation on AIM but its business, as currently operated, is not required to be regulated by the FCA. If the nature of the business or the ambit of the FCA rules were to change the Group might need to obtain approval from the FCA, without which the Group would not be able to provide those services which require FCA approval. Obtaining such approval would also have a cost consequence for the Group. The FCA has substantial powers of intervention in relation to the companies and the markets which it regulates, with the ability to remove, restrict or modify the authorisations and licences required to conduct business.

Regulators in other jurisdictions where the Group operates have broadly similar powers to those of the FCA and US state regulatory authorities.

In addition, the relevant members of the Group may not be able to comply fully with, or obtain appropriate exemptions from, any amendments to a regulatory regime. Failure to comply with or to obtain appropriate exemptions under any applicable laws could result in restrictions on the Group's ability to conduct business in one or more of the jurisdictions in which it operates and could result in the imposition of fines and other sanctions, each of which could have a material adverse effect on its reputation, financial condition and/or operating results.

Failure to comply with applicable regulations and solvency requirements could result in an impediment to business development and/or a variety of sanctions. The Directors are responsible for ensuring that best practice is applied to ensure regulatory compliance.

The Group operates in several tax jurisdictions around the world. Tax risk is the risk associated with changes in tax law or in the interpretation of tax law. It also includes the risk of changes in tax rates and the risk of failure to comply with procedures required by tax authorities. Failure to manage tax risks could lead to an additional tax charge. It could also lead to a financial penalty for failure to comply with required tax procedures or other aspects of tax law. If, as a result of a particular tax risk materialising, the tax costs associated with particular transactions are greater than anticipated, it could affect the profitability of those transactions.

The extent and complexity of the legal and regulatory environment in which the Group operates and the products and services the Group offers mean that many aspects of the business involve substantial risks of liability. Any litigation brought against the Group or any companies within it in future could have a material adverse effect on the Group.

In addition, litigation may have a material adverse effect upon the Group's business in that legal decisions between third parties may expand apparent scope of legal liabilities, which in turn could increase the amount of claims which have to be paid by the Group, thereby reducing profits. The Group's owned companies are also exposed to potential tort claims including claims for punitive or exemplary damages that could have a materially adverse effect on profitability.

The Group's Governance Function contains the control and assurance functions (Compliance, Risk Management and Internal Audit) which ensure that such functions are closely aligned. The Group ensures that there is regular liaison with local management and recruitment of local expertise where needed. The Group actively manages relationships with all local regulators where the Group has a presence.

1.11 Brexit

As a UK domiciled business, the Group is exposed to the risks associated with the UK's decision to leave the European Union ("Brexit"). The Group is continually assessing the potential impact of Brexit on the Group and its underlying investments, however it is the Group's intention to continue to invest into the international financial services market, a policy which has historically had little or no direct impact from the UK's membership of the European Union.

2 Risks relating to the Ordinary Shares

2.1 The market of the Ordinary Shares may fluctuate significantly

The market price of the Ordinary Shares may, in addition to being affected by the Company's actual or forecast operating results, fluctuate significantly as a result of factors beyond the Company's control, including among others:

(a) changes in securities analysts' recommendations or the failure to meet the expectations of securities analysts;

(b) changes in the performance of the financial services and insurance industries as a whole; and

Any or all of these events could result in a material decline in the market price of the Ordinary Shares, regardless of the actual performance of the Group. Shareholders should be aware that the value of the Ordinary Shares may go down as well as up and may not reflect the underlying asset values or prospects of the Company.

2.2 Future issues of Ordinary Shares will result in immediate dilution

The Group may require additional capital in the future which may not be available to it. If available, future financings to provide this capital may dilute Shareholders' proportionate ownership in the Company. The Company may raise capital in the future through public or private equity financings or by raising debt securities convertible into Ordinary Shares, or rights to acquire these securities. Any such issues may exclude the pre-emption rights pertaining to the then outstanding shares. If the Company raises significant amounts of capital by these or other means, it could cause dilution for the Company's existing Shareholders. Moreover, the further issue of Ordinary Shares could have a negative impact on and/or increase the volatility of the market price of the Ordinary Shares.

Furthermore, the issue of additional Ordinary Shares may be on more favourable terms than the fundraising.

The Company may also issue further Ordinary Shares, or create further options over Ordinary Shares, as part of its employee remuneration policy, which could in aggregate create a dilution in the value of the Ordinary Shares and the proportion of the Company's share capital in which investors are interested.

In addition, the issue of additional Ordinary Shares by the Company, or the possibility of such issue or exercise, may cause the market price of the Ordinary Shares to decline and may make it more difficult for Shareholders to sell Ordinary Shares at a desirable time or price.

The proposed issue of the New Placing Shares and the Open Offer Shares will also dilute existing shareholdings of Shareholders. Qualifying Shareholders will be able to mitigate the extent of this dilution by applying for Open Offer Shares in the Open Offer.

2.3 Future sale of Ordinary Shares

The Company is unable to predict when and if substantial numbers of Ordinary Shares will be sold in the open market. Any such sales, or the perception that such sales might occur, could result in a material fall in the market price of the Ordinary Shares. The ability of an investor to sell Ordinary Shares will also depend on there being a willing buyer for them at an acceptable price. Consequently, it might be difficult for an investor to realise his/her investment in the Group and he/ she may lose all of his/her investment.

2.4 Risk relating to Open Offer entitlements

If a Shareholder does not take up his Open Offer Entitlement, his interest in the Company will be diluted. Shareholders' proportionate ownership and voting interest in the Company will be reduced pursuant to the Fundraising. In addition, to the extent that Shareholders do not take up their Open Offer Entitlement, their proportionate ownership and voting interest in the Company will be further reduced.

2.5 Investment in publicly quoted securities

The New Ordinary Shares will be traded on AIM and no application is being made for the admission of the Ordinary Shares to the Official List. Investment in securities traded on AIM is perceived to involve a higher degree of risk and be less liquid than investment in companies whose securities are listed on the "Official List" in the UK and traded on the London Stock Exchange's main market for listed securities. AIM is a market designed primarily for emerging or smaller companies to which a higher investment risk tends to be attached rather than for larger or more established companies. A prospective investor should be aware of the risks of investing in such companies and should make the decision to invest only after careful consideration and, if appropriate, consultation with an independent financial adviser authorised under FSMA who specialises in advising on the acquisition of shares and other securities.

An investment in Ordinary Shares traded on AIM may be difficult to realise. Although AIM has been in existence since June 1995, Admission to AIM does not guarantee that there will be a liquid market for New Ordinary Shares. An active public market for New Ordinary Shares may not develop or be sustained after Admission and the market price of the Ordinary Shares may fall below the Issue Price. Prospective investors should be aware that the value of the Ordinary Shares may go down as well as up and that the market price of the Ordinary Shares may not reflect the underlying value of the Company. Investors may therefore realise less than, or lose all of, their investment.

2.6 Potentially volatile share price and liquidity

An investment in a share which is traded on AIM, such as the Ordinary Shares, may be difficult to realise and carries a high degree of risk. The ability of an investor to sell Ordinary Shares will depend on there being a willing buyer for them at an acceptable price. The Ordinary Shares may be illiquid and, accordingly, an investor may find it difficult to sell Ordinary Shares, either at all or at an acceptable price. Consequently, it might be difficult for an investor to realise his/her investment in the Group and he/ she may lose all of his/her investment.

The share price of companies quoted on AIM can be highly volatile and shareholdings illiquid. The price at which the Ordinary Shares are quoted and the price at which investors may realise their investment in the Company may be influenced by a significant number of factors, some specific to the Company and its operations and some which affect quoted companies generally. These factors could include the performance of the Company, large purchases or sales of Ordinary Shares, legislative changes and general, economic, political or regulatory conditions.

2.7 No guarantee that the Ordinary Shares will continue to be traded on AIM

The Company cannot assure investors that the Ordinary Shares will always continue to be traded on AIM or on any other exchange. If such trading were to cease, certain investors may decide to sell their shares, which could have an adverse impact on the price of the Ordinary Shares. Additionally, if in the future the Company decides to obtain a listing on another exchange in addition or as an alternative to AIM, the level of liquidity of the Ordinary Shares traded could decline.

2.8 Timetable for 2018 Final Dividend

In the unlikely event, Admission does not occur at 8.00 a.m. on 9 July 2018, being the expected date of Admission, and is subsequently delayed beyond the date on which the Ordinary Shares are quoted ex the 2018 Final Dividend (being 12 July 2018), the New Ordinary Shares issued as part of the Placing and Open Offer will be issued "ex-dividend" and the holders of the New Ordinary Shares would therefore not be entitled to receive the 2018 Final Dividend.

2.9 US Securities legislation

The New Ordinary Shares have not been, nor will they be, registered under the US Securities Act and there are restrictions on transfer under the US Securities Act. The New Ordinary Shares are being offered and sold outside the United States in transactions exempt from the registration requirements of the US Securities Act in reliance on Regulation S under the US Securities Act. The New Ordinary Shares may not be offered, sold or delivered in or into the United States unless the transfer is registered under the US Securities Act, or an exemption from the registration requirements of Section 5 of the US Securities Act provided by section 4(2) under the US Securities Act or another applicable exemption is available.

Only the Company is entitled to register the Ordinary Shares under the US Securities Act and the Company has no obligation to do so. The Company can give no assurances that an exemption from registration under the US Securities Act will be available to any subscribers for or purchasers of Ordinary Shares.

3 Industry specific risks

3.1 Business Development and Growth

There is a potential risk that the Group fails to identify and harness new business opportunities, and/or its profitability is impaired following the establishment/acquisition of new business.

The Group operates in a competitive environment and faces competition from current and potential competitors. The Group may not be able to compete effectively with such competitors, particularly those with far greater capital resources.

The Group has made numerous investments in recent years and the Directors expect to continue to make such investments. There is no guarantee, however, that there will be any potential investments in the future which meet the Group's criteria.

The acquisition of financial services and insurance intermediaries, businesses or investment portfolios may require the approval of the relevant regulator, in respect of, not only the Group, but also of its controllers and potentially the Group's directors and officers. There is no guarantee that the relevant regulators will provide such approval or that the conditions on which the regulators will grant such approval will be acceptable.

No assurance can be given that the Group will be able to manage future acquisitions profitably or to integrate such acquisitions successfully without substantial costs, delays or other problems.

3.2 Ineffective Cash Flow Management

This is the risk that the Group fails to implement adequate controls over cash flow and liquidity leading to financial shortfalls.

The Group must actively manage its cash flow to ensure that operating cash flow requirements, debt repayments (together with interest payable) and claims payments can be met and the Group's distribution policy sustained. The Group undergoes a thorough annual budgeting process, which includes a monthly Group cash flow projection, against which actual movements are regularly monitored through, for example, the weekly circulation of the cash balances in each of the Group's entities. If cash flows are not managed, this will adversely affect the Group's ability to make acquisitions, and sustain its distribution policy.

The Group assesses and reviews its liquidity position and funding requirements on a regular basis and this is an agenda item for board meetings.

3.3 Forward-looking statements

This Announcement includes and the Circular will include forward-looking statements concerning the Group. Forward-looking statements are based on current expectations and projections about future events. These forward-looking statements are subject to risks, uncertainties and assumptions about the Group. Subject to the Company's continuing obligations under the AIM Rules and applicable laws and regulations, the Group undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

3.4 Cyber risk

This risk has arisen from rapid technological advances, particularly in the area of social media.

Cyber-attacks or information security failures can take many forms, and include (but are not restricted to):

· generally, breaches of the Group's information security policy;

· more specifically, breaches of applicable Data Protection legislation;

· organised crime entities;

· phishing;

· viruses, works, malware, hacks;

· denial of service attacks;

· data corruption;

Cyber-attacks or information security failures could have a significant adverse impact on the reputation of the Group and its relationships with its customers and other stakeholders.

APPENDIX III

DEFINITIONS

Admission	admission of the New Ordinary Shares to trading on AIM and such admission becoming effective in accordance with the AIM Rules;
AIM	the AIM market operated by the London Stock Exchange;
AIM Rules	the AIM Rules for Companies and/or the AIM Rules for Nominated Advisers (as the context may require);
AIM Rules for Companies	the rules of AIM as set out in the publication entitled 'AIM Rules for Companies' published by the London Stock Exchange from time to time;
AIM Rules for Nominated Advisers	the rules of AIM as set out in the publication entitled 'AIM Rules for Nominated Advisers' published by the London Stock Exchange from time to time;
Announcement	this announcement (including the appendices to this announcement);
Application Form	the application form to accompany the Circular to be used by Qualifying Non-CREST Shareholders in connection with the Open Offer;
Basic Entitlement	the Open Offer Shares which a Qualifying Shareholder is entitled to subscribe for under the Open Offer calculated on the basis of 1 Open Offer Share for every 21 Existing Ordinary Shares held by that Qualifying Shareholder as at the Record Date, such entitlement being calculated by reference to, inter alia, the non-take up undertaking from Brian Marsh under the Brian Marsh Subscription Commitment;
Board	the board of directors of the Company for the time being who are providing recommendations in relation to the Placing and the Open Offer in this Announcement (with the exception of Brian Marsh, who has abstained from providing a recommendation on account of his personal participation in the Placing and Open Offer);
B.P. Marsh SIP	the B.P. Marsh & Partners Plc Share Incentive Plan, being the statutory "schedule 2" share incentive plan of the Company established by the Group on 29 March 2016;
B.P. Marsh SIP Trustee	means B.P. Marsh and Co. Trustee Company Limited, a company incorporated in England and Wales with registered number 04205559 and having its registered office at 4 Matthew Parker Street, London, England SW1H 9NP established to hold Ordinary Shares allocated to the B.P. Marsh SIP;
Brian Marsh Subscription Commitment	the undertakings in respect of taking up under the Open Offer by Brian Marsh (for himself and on behalf of B.P. Marsh Management Limited) as further described in Appendix I of this Announcement;
certificated or in certificated form	the description of a share or other security which is not in uncertificated form (that is not in CREST);
Circular	the circular of the Company giving (amongst other things) details of the Placing and Open Offer and incorporating the Notice of General Meeting, which is to be published on or around 13 June 2018;
Closing Price	the closing middle market quotation of an Ordinary Share as derived from the Daily Official List of the London Stock Exchange;
Company or B.P. Marsh	B.P. Marsh & Partners Plc, a company incorporated in England and Wales with registered number 05674962 and having its registered office at 4 Matthew Parker Street, London, England SW1H 9NP;
CREST	the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the Operator (as defined in the CREST Regulations);
Directors	the board of directors of the Company for the time being (inclusive of Brian Marsh);
Disclosure and Transparency Rules or DTRs	the disclosure guidance and transparency rules of the FCA as amended from time to time;
EBT	the B.P. Marsh Employees Share Trust, being the employee benefit trust established to acquire and hold 5.00 per cent. of the Existing Issued Share Capital to provide benefits to employees and former employees of the Company in the form of options over, or interests in, Ordinary Shares;
Enlarged Share Capital	the issued share capital of the Company immediately following Admission, assuming (save for the purposes of calculating the 29.9 per cent. Aggregate Limit) the maximum number of Open Offer Shares are allotted and, for the avoidance of doubt, including any Ordinary Shares allotted under the 2018 JSOP and any Ordinary Shares allotted pursuant to the 2018 SIP Allocation before Admission;
EU	the European Union;
Euroclear	Euroclear UK & Ireland Limited;
Excess Application Facility	the mechanism whereby a Qualifying Shareholder, who has taken up his Basic Entitlement in full, can apply for Excess Shares up to an amount equal to the total number of Open Offer Shares available under the Open Offer less an amount equal to a Qualifying Shareholder's Basic Entitlement, subject always to the 29.9 per cent. Aggregate Limit, as will be more fully set out in the Circular and subject to the terms of the Brian Marsh Subscription Commitment;
Excess CREST Open Offer Entitlements	in respect of each Qualifying CREST Shareholder who has taken up his Basic Entitlement in full, the entitlement to apply for Open Offer Shares in addition to his Basic Entitlement credited to his stock account in CREST, pursuant to the Excess Application Facility, which may be subject to scaling back in accordance with the provisions of the Circular;
Excess Shares	Open Offer Shares which are not taken up by Qualifying Shareholders pursuant to their Basic Entitlement and which are offered to Qualifying Shareholders under the Excess Application Facility;
Excluded Overseas Shareholders	other than as agreed by the Company and Panmure Gordon or as permitted by applicable law, Shareholders who are located or have registered addresses in a Restricted Jurisdiction;
Existing Issued Share Capital	the issued share capital of the Company as at the Latest Practicable Date;
Existing Ordinary Shares	the 29,226,040 Ordinary Shares in issue as at the Record Date;
FCA	the UK Financial Conduct Authority;
Form of Proxy	the form of proxy to accompany the Circular relating to the General Meeting;
FSMA	the UK Financial Services and Markets Act 2000 (as amended);
General Meeting or GM	the general meeting of the Company, notice of which is to be set out in the Circular, and including any adjournment(s) thereof;
Group	the Company and/or its subsidiary undertakings at the date of this Announcement (as defined in sections 1159 and 1160 of the Act);
Investor or PSC	PSC UK Pty Limited, a company incorporated in Australia with registered number 154 179 754 and having its registered office at C/- PSC Insurance, Level 4, 96 Wellington Parade, East Melbourne, VIC 3002, Australia;
Issue Price	252 pence per New Ordinary Share;
Latest Practicable Date	means 5.00 p.m. on 11 June 2018, being the latest practicable date prior to publication of this Announcement;
Link Asset Services	Link Asset Services, a trading name of Link Market Services Limited, a company incorporated in England and Wales with registered number 02605568 and having its registered office at The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU;
London Stock Exchange	London Stock Exchange plc;
New Ordinary Shares	the New Placing Shares and the Open Offer Shares to be issued by the Company pursuant to the Placing and the Open Offer;
New Placing Shares	6,169,194 new Ordinary Shares to be issued by the Company pursuant to the Placing;
Notice of General Meeting	the notice of General Meeting to be set out in the Circular;
Open Offer	the conditional invitation by the Company to Qualifying Shareholders to apply to subscribe for Open Offer Shares at the Issue Price on the terms and subject to the conditions set out in the Circular and in the case of the Qualifying Non-CREST Shareholders only, the Application Form, subject to the terms of the Brian Marsh Subscription Commitment;
Open Offer Entitlements	an entitlement to subscribe for Open Offer Shares, allocated to a Qualifying Shareholder under the Open Offer (and, for the avoidance of doubt, references to Open Offer Entitlements include Basic Entitlements and Excess CREST Open Offer Entitlements);
Open Offer Shares	the 595,238 new Ordinary Shares to be offered to Qualifying Shareholders under the Open Offer;
Overseas Shareholders	Shareholders with registered addresses outside the UK or who are citizens of, incorporated in, registered in or otherwise resident in, countries outside the UK;
Ordinary Shares	ordinary shares of 10 pence each in the capital of the Company;
Participant ID	the identification code or membership number used in CREST to identify a particular CREST member or other CREST participant;
Panmure Gordon or Panmure Gordon (UK) Limited	Panmure Gordon (UK) Limited, a company incorporated in England with company number 04915201 and having its registered office at One New Change, London, EC4M 9AF, and who at the date of this Announcement is appointed as: (i) the nominated adviser, financial adviser and broker to the Company; and (ii) agent for B.P. Marsh Management Limited;
PSC Group	PSC Insurance Group Limited, a company incorporated in Australia with registered number 147 812 164 and having its registered office at 96 Wellington Parade, East Melbourne, Victoria, 3002, Australia, and being the ultimate holding company of PSC UK Pty Limited;
Placing Shares	the 6,169,194 New Placing Shares to be issued by the Company to the Investor and the 1,166,310 Sale Shares to be transferred to the Investor under the Placing;
Placing	the placing of the Placing Shares to the Investor pursuant to the Placing and Open Offer Agreement;
Placing and Open Offer Agreement	the conditional agreement dated 12 June 2018 between the Company, B.P. Marsh Management Limited and Panmure Gordon (UK) Limited relating to the Placing and Open Offer, details of which will be set out in the Circular;
Qualifying CREST Shareholders	Qualifying Shareholders whose Existing Ordinary Shares on the register of members of the Company on the Record Date are in uncertificated form;
Qualifying Non-CREST Shareholders	Qualifying Shareholders whose Existing Ordinary Shares on the register of members of the Company on the Record Date are held in certificated form;
Qualifying Shareholders	holders of Existing Ordinary Shares on the register of members of the Company at the Record Date with the exception (subject to certain exceptions) of Excluded Overseas Shareholders, subject to the terms of the Brian Marsh Subscription Commitment;
Record Date	5.00 p.m. on 11 June 2018;
Registrars or Receiving Agent	Link Asset Services;
Regulatory Information Service or RNS	has the meaning given in the AIM Rules for Companies;
Resolutions	the resolutions to be proposed at the General Meeting which will be set out in full in the Notice of General Meeting;
Restricted Jurisdictions	the United States and each of Canada, Australia, New Zealand, the Republic of South Africa and Japan;
Sale Shares	the 1,166,310 Ordinary Shares held by B.P. Marsh Management Limited (a company wholly owned by Brian Marsh) to be transferred to the Investor under the Placing;
Shareholders	holders of Ordinary Shares;
uncertificated	recorded on a register of securities maintained by Euroclear in accordance with the CREST Regulations as being in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST;
UK or United Kingdom	the United Kingdom of England, Scotland, Wales and Northern Ireland;
US or United States	the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia;
US Securities Act	the US Securities Act of 1933 (as amended);
£ or sterling	pounds sterling, the legal currency of the United Kingdom;
A$	Australian dollar;
29.9 per cent. Aggregate Limit	the restriction on the number of Open Offer Shares that each Qualifying Shareholder (other than B.P. Marsh Management Limited in respect of any application for Excess Shares up to an amount of £500,000 pursuant to the Brian Marsh Subscription Commitment) may receive under the Open Offer on the basis that no Qualifying Shareholder shall be entitled to receive in excess of such number of Open Offer Shares as would bring its aggregate interest in the Company to more than 29.9 per cent. of the Enlarged Share Capital;
2014 JSOP	the Jointly Owned Share Plan for eligible employees and senior executives which was initiated in November 2014 and subsequently matured in November 2017;
2018 Final Dividend	the final cash dividend of 4.76 pence per Ordinary Share in respect of the 12 month period ended 31 January 2018;
2018 JSOP	the joint share ownership plan of the Company approved by resolution of the Remuneration Committee of the Company; and
2018 SIP Allocation	means the transfer from treasury of 21,009 Ordinary Shares for nil consideration to the B.P. Marsh SIP Trustee and the issue and allotment of 26,303 new Ordinary Shares to the B.P. Marsh SIP Trustee.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

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Friday, 1st November 2024

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