Proposed placing of new ordinary shares

RNS Number : 5189A

Big Yellow Group PLC

12 September 2018

 

THIS ANNOUNCEMENT, INCLUDING THE APPENDIX AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

12 September 2018

Big Yellow Group PLC ("Big Yellow" or the "Company" and, together with its subsidiaries, the "Group")

PROPOSED Placing of new ordinary Shares

Big Yellow announces today its intention to raise gross proceeds of approximately £67 million by way of a placing with both existing shareholders and new institutional investors.

Highlights

§ Intention to raise gross proceeds of approximately £67 million.

§ The Company intends to use the proceeds to fund the Company's current pipeline of development opportunities as well as to continue the longer-term portfolio expansion strategy.

§ The combination of building out the current pipeline and the equity raise will be marginally earnings dilutive in the short term but the Company believes that this is more than offset by the anticipated significant medium to long term accretion.

§ Members of the Board intend to invest in aggregate up to £265,000 in the Placing.

§ The number of new shares issued will not exceed 4.99% of the Company's existing issued share capital.

Introduction

The Placing is being conducted through an accelerated book-build process which will be launched immediately following this announcement, in accordance with the terms and conditions set out in the Appendix to this announcement.

J.P. Morgan Securities plc (which conducts its UK investment banking business as J.P. Morgan Cazenove) ("JPMC") has been appointed sole bookrunner in respect of the Placing.

Background to the Placing

Big Yellow now has a pipeline comprising eleven development sites (including the proposed increases in capacity of its Battersea and Wapping stores) with a cost to complete of approximately £102 million in addition to the £20 million of capital expenditure spent to 31 August in the current financial year.  These store openings are expected to add approximately 680,000 sq ft of storage space to the portfolio, an increase of 15% from the current maximum lettable area of the Group's portfolio.

Our current estimate of net operating income at stabilisation, at today's prices, for this increase in capacity is in excess of approximately £17.4 million. The total development cost including cost incurred to date is estimated to be approximately £198 million implying an 8.8% net operating income return on cost.

The Company intends to continue adding to its pipeline over the next few years, which will be funded by an appropriate mix of retained cash flow, debt and the proceeds of this placing. This will allow a material expansion of the Company's portfolio whilst maintaining a conservative balance sheet and adequate interest cover.

The Group spent a total of £42.0 million of growth capital expenditure in the financial year ended 31 March 2018, up from £20.6 million the year before and has spent £20.2 million in the period 1 April to 31 August 2018.  For the year to 31 March 2019, the Board is committed to spend a total of £40 million of capital expenditure but we anticipate that this will rise with further site acquisitions.

Our recently opened stores in Guildford Central and Wapping, London have started strongly.  The remaining 73 open stores increased occupancy to 85.8% at 31 August (2017: 84.2%).  We also saw continued rate growth with like-for-like average net achieved rent of £26.92 for the five months to August 2018, up 4.0% compared to the same period last year.  Year on year revenue growth for the five months to 31 August was 7.1% with like for like growth 6.9%.

Current development pipeline

Site	Location	Status	Anticipated capacity
Manchester	Prime location on Water Street, central Manchester	Planning consent granted in September 2017.  Store construction started in March 2018, with a view to opening in early Summer 2019.	60,000 sq ft
Camberwell, London	Prominent location on Southampton Way	Planning consent recently granted by LB Southwark.  Construction due to start in November 2018 with a view to opening in Spring 2020.	72,000 sq ft
Kings Cross, London	Prominent location on York Way	Planning application submitted and registered by LB Islington.	115,000 to 120,000 sq ft
Bracknell	Prime location on Ellesfield Avenue	Site acquired in February 2018.  Application to be submitted in September to Bracknell Forest Council incorporating self storage and other occupiers.	60,000 to 65,000 sq ft
Slough	Prominent location on Bath Road	Site acquired in November 2017. Planning application to be submitted to Slough Borough Council in late 2018.	50,000 sq ft
Battersea, London	Prominent location on junction of Lombard Road and York Road (South Circular)	Potential redevelopment to increase size of existing 34,000 sq ft Big Yellow store.  Redevelopment of adjoining retail into a mixed use residential led scheme. Application submitted and registered by LB Wandsworth in August.	Up to an additional 40,000 sq ft
Wapping, London	Prominent location on The Highway	Site acquired in May 2017.  The Group converted the existing vacant space and opened a 25,000 sq ft self storage centre at the end of July, and are also collecting income from the remaining short-let tenancies. This provides income while we look to expand the store.	Up to an additional 50,000 sq ft
Uxbridge, London	Prominent location on Oxford Road	Site acquired in April 2018.  Planning application to be submitted to South Bucks DC late 2018/early 2019.	55,000 sq ft
Hove	Prominent location on Old Shoreham Road	Site acquired in April 2018.  Planning application to be submitted in 2019.	55,000 sq ft to 60,000 sq ft
Queensbury, London	Prominent location off Honeypot Lane	Contracts exchanged, planning discussions to commence following completion.	55,000 sq ft to 60,000 sq ft
Newcastle	Prime location on Scotswood Road	Planning application to be submitted in early 2019.	60,000 sq ft
Total capacity			672,000 to 692,000 sq ft

Details of the Placing

Under the terms of the Placing, the Company intends to raise gross proceeds of approximately £67 million by way of a placing with both existing shareholders and new institutional investors.

Members of the Board intend to invest in aggregate up to £265,000 in the Placing.

The timing of the closing of the book, pricing and allocations is at the discretion of JPMC.  The number of new ordinary shares ("Placing Shares") and the price at which the Placing Shares are to be placed (the "Placing Price") are subject to agreement between the Company and JPMC at the close of the book-building process. Details of the number of Placing Shares and the Placing Price will be announced as soon as practicable after the close of the book-building process.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of 10 pence each in the capital of the Company (the "Ordinary Shares"), including the right to receive all dividends and other distributions declared, made or paid on or in respect of such shares after the date of issue of the Placing Shares. The Placing will be made on a non-pre-emptive basis.

The Company has made an application to the Financial Conduct Authority (the "FCA") for admission of the Placing Shares to the premium segment of Official List of the UK Listing Authority (the "Official List") and to the London Stock Exchange for admission to trading on its main market for listed securities (together, "Admission"). It is expected that Admission will become effective on or around 14 September 2018 and that dealings in the Placing Shares will commence at that time.

The Placing is conditional upon, amongst other things, Admission becoming effective and the placing agreement between the Company and JPMC (the "Placing Agreement") becoming unconditional and not being terminated, in accordance with its terms. A description of the Placing Agreement can be found in the Appendix to this announcement.

The Appendix to this announcement (which forms part of the announcement) sets out the terms and conditions of the Placing.

Commenting on the Placing, Nicholas Vetch, Big Yellow's Executive Chairman, said:

"This equity raise allows us to execute our next phase of growth through the acquisition of new development sites that will deliver medium-term earnings progression. Our newly acquired site at Queensbury in London is the first of these and we continue to identify attractive locations for the Big Yellow brand."

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

This announcement should be read in its entirety. In particular, you should read and understand the information provided in the "Important Notice" section of this announcement. The person responsible for arranging for the release of this announcement on behalf of the Company is John Trotman, Chief Financial Officer.

For further information, please contact:

Big Yellow                                                                   01276 477 811

Nicholas Vetch (Executive Chairman)

James Gibson (Chief Executive)

John Trotman (Chief Financial Officer)

J.P. Morgan Cazenove                                                  020 7742 4000

Bronson Albery

Barry Meyers

IMPORTANT NOTICE

The distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore persons coming into possession of this announcement and/or any related communications should inform themselves about and observe such restrictions. Any failure to comply with such restrictions may constitute a violation of the securities law of any such jurisdiction.

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 (as defined below)) to be published.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY, IS NOT INTENDED TO AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO PURCHASE OR SUBSCRIBE FOR, UNDERWRITE, SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO PURCHASE OR SUBSCRIBE, SELL, ACQUIRE, DISPOSE OF THE PLACING SHARES OR ANY OTHER SECURITY IN THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA, COLLECTIVELY THE "UNITED STATES"), AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR IN ANY JURISDICTION IN WHICH, OR TO ANY PERSONS TO WHOM, SUCH OFFERING, SOLICITATION OR SALE WOULD BE UNLAWFUL.

The Placing Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") or under the securities laws of any state or other jurisdiction of the United States, and may not be offered, sold or transferred, directly or indirectly, in or into 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. The Placing Shares are being offered and sold (i) outside the United States in accordance with Regulation S under the Securities Act and (ii) within the United States only to persons reasonably believed to be "qualified institutional buyers" pursuant to an exemption from the registration requirements of the Securities Act for transactions not involving any public offering. There will be no public offering of the Placing Shares in the United States, the United Kingdom or elsewhere. No representation is being made as to the availability of any exemption under the Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares.

The Placing Shares have not been approved or disapproved by the United States 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 the accuracy or adequacy of this announcement. Any representation to the contrary is a criminal offence in the United States.

The relevant clearances have not been, and nor will they be, obtained from the securities commission or similar regulatory authority of any province or territory of Canada. The offering of the Placing Shares is being made on a private placement basis only in the provinces of British Columbia, Alberta, Ontario and Quebec and is exempt from the requirement that the Company prepare and file a prospectus with the relevant securities regulatory authorities in Canada. No offer of securities is made pursuant to this Announcement in Canada except to a person who has represented to the Company and JPMC that such person (i) is purchasing as principal, or is deemed to be purchasing as principal in accordance with applicable Canadian securities laws, for investment only and not with a view to resale or distribution; (ii) is an "accredited investor" as such term is defined in section 1.1 of National Instrument 45-106 Prospectus Exemptions or, in Ontario, as such term is defined in section 73.3(1) of the Securities Act (Ontario); and (iii) is a "permitted client" as such term is defined in section 1.1 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the Placing Shares acquired by a Canadian investor in the Placing must be made in accordance with applicable Canadian securities laws, which may vary depending on the relevant jurisdiction, and which may require resales to be made in accordance with Canadian prospectus requirements, a statutory exemption from the prospectus requirements, in a transaction exempt from the prospectus requirements or otherwise under a discretionary exemption from the prospectus requirements granted by the applicable local Canadian securities regulatory authority. These resale restrictions may under certain circumstances apply to resales of the Placing Shares outside of Canada.

No prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and the Placing Shares have not been, and nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, Japan or South Africa. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into, Australia, Japan or South Africa or any other jurisdiction outside the United Kingdom or to, or for the account or benefit of any national, resident or citizen of Australia, Japan or South Africa.

The distribution of this announcement and the Placing of the Placing Shares as set out in this announcement in certain jurisdictions may be restricted by law. No action has been taken 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 to inform themselves about, and to observe, such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This communication is directed only at: (a) persons in member states of the European Economic Area who are qualified investors within the meaning of article 2(1)(e) of EU Directive 2003/71/EC and amendments thereto (the "Prospectus Directive") ("Qualified Investors") and (b) if in the United Kingdom, persons who (i) have 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, as amended (the "Order"), or are high net worth companies, unincorporated associations or partnerships or trustees of high value trusts as described in article 49(2) of the Order and (ii) are "qualified investors" as defined in section 86 of the Financial Services and Markets Act 2000 (as amended) and (c) otherwise, to persons to whom it may otherwise be lawful to communicate it (all such persons together being referenced to as "relevant persons"). Any investment in connection with the Placing will only be available to, and will only be engaged with, relevant persons. Any person who is not a relevant person should not act or rely on this announcement or any of its contents.

J.P. Morgan Securities plc (which conducts its UK investment banking business under the name J.P. Morgan Cazenove) ("JPMC"), which is authorised in the United Kingdom by the Prudential Regulation Authority (the "PRA") and regulated by the PRA and the Financial Conduct Authority (the "FCA"), is acting for the Company and no-one else in connection with the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to clients of JPMC nor for providing advice in relation to the Placing.

This announcement is being 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 JPMC nor any of its affiliates or agents (or any of their respective directors, officers, employees or advisers) for the contents of the information contained in this announcement, or any other written or oral information made available to or publicly available to any interested party or its advisers, or any other statement made or purported to be made by or on behalf of JPMC or any of its affiliates in connection with the Company, the Placing Shares or the Placing and any responsibility and liability whether arising in tort, contract or otherwise therefore is expressly disclaimed. JPMC and its affiliates accordingly disclaim all and any liability, whether arising in tort, contract or otherwise (save as referred to above) in respect of any statements or other information contained in this announcement and no representation or warranty, express or implied, is made by JPMC or any of its affiliates as to the accuracy, fairness, verification, completeness or sufficiency of the information contained in this announcement and nothing in this announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or future.

This announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the Placing Shares. Any investment decision to buy Placing Shares in the Placing must be made solely on the basis of publicly available information, which has not been independently verified by JPMC.

This announcement contains (or may contain) certain forward-looking statements, beliefs or opinions, with respect to certain of the Company's current expectations and projections about future performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which sometimes use words such as "aim", "anticipate", "believe", "intend", "plan" "estimate", "expect" and words of similar meaning, include all matters that are not historical facts and reflect the directors' beliefs and expectations and involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement. These statements are subject to unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Statements contained in this announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The information contained in this announcement is subject to change without notice and, except as required by applicable law, neither the Company nor JPMC and any of such persons' respective directors, officers, employees, agents, affiliates or advisers assume any responsibility or obligation to update, amend or revise publicly or review any of the forward-looking statements contained in this announcement. You should not place undue reliance on forward-looking statements, which speak only as of the date of this announcement. Any indication in this announcement of the price at which Placing Shares have been bought or sold in the past cannot be relied upon as a guide to future performance. No statement in this announcement is or is intended to be a profit forecast or profit estimate or to imply that the earnings of the Company for the current or future financial years will necessarily match or exceed the historical or published earnings of the Company. Past performance of the Company cannot be relied on as a guide to future performance and persons reading this announcement are cautioned not to place undue reliance on such forward-looking statements.

In connection with the Placing, JPMC and any of its affiliates, acting as investors for their own account, may take up a portion of the shares in the Placing as a principal position and in that capacity may retain, purchase, sell, offer to sell for their own accounts such shares and other securities of the Company or related investments in connection with the Placing or otherwise. Accordingly, references to Placing Shares being offered, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or acquisition, placing or dealing by, JPMC and any of its affiliates acting in such capacity. In addition, JPMC and any of its affiliates may enter into financing arrangements (including swaps) with investors in connection with which JPMC and any of its affiliates may from time to time acquire, hold or dispose of shares. JPMC do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the London Stock Exchange.

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

This announcement does not constitute a recommendation concerning any investors' options with respect to the Placing. Investors and prospective investors should conduct their own investigation, analysis and evaluation of the business and data described in this announcement. The price and value of securities can go down as well as up. Past performance is not a guide to future performance. The contents of this announcement are not to be construed as legal, business, financial or tax advice. Each investor or prospective investor should consult his, her or its own legal adviser, business adviser, financial adviser or tax adviser for legal, financial, business or tax advice.

APPENDIX: TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING

APPENDIX

TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION FOR PLACEES ONLY
REGARDING THE PLACING

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT IN THIS APPENDIX ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA (THE "EEA"), PERSONS WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(1)(E) OF EU DIRECTIVE 2003/71/EC AND AMENDMENTS THERETO, INCLUDING THE 2010 PD AMENDING DIRECTIVE, TO THE EXTENT IMPLEMENTED IN THE RELEVANT MEMBER STATE OF THE EEA) (THE "PROSPECTUS DIRECTIVE") ("QUALIFIED INVESTORS"); (B) IN THE UNITED KINGDOM, PERSONS WHO (I) HAVE 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, AS AMENDED (THE "ORDER"), OR ARE HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS OR PARTNERSHIPS OR TRUSTEES OF HIGH VALUE TRUSTS AS DESCRIBED IN ARTICLE 49(2) OF THE ORDER AND (II) ARE "QUALIFIED INVESTORS" AS DEFINED IN SECTION 86 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED ("FSMA"); (C) IN THE UNITED STATES, CERTAIN QUALIFIED INSTITUTIONAL BUYERS ("QIBS") (AS DEFINED IN RULE 144A UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"); (D) IN AUSTRALIA, PERSONS WHO ARE "SOPHISTICATED INVESTORS" OR "PROFESSIONAL INVESTORS" (WITHIN THE MEANING OF SECTIONS 708(8), AND 708(11), RESPECTIVELY, OF THE AUSTRALIAN CORPORATIONS ACT 2001 (CTH) (THE "CORPORATIONS ACT")), BEING PERSONS TO WHOM AN OFFER OF SECURITIES CAN BE MADE WITHOUT A DISCLOSURE DOCUMENT UNDER CHAPTER 6D OF THE CORPORATIONS ACT; AND (E) OTHERWISE, PERSONS TO WHOM IT MAY OTHERWISE BE LAWFUL TO COMMUNICATE IT TO (EACH A "RELEVANT PERSON"). NO OTHER PERSON SHOULD ACT OR RELY ON THIS ANNOUNCEMENT. BY ACCEPTING THE TERMS OF THIS ANNOUNCEMENT YOU REPRESENT AND AGREE THAT YOU ARE A RELEVANT PERSON. THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX) DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.

EACH PLACEE (AS DEFINED BELOW) SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS, FINANCIAL AND RELATED ASPECTS OF A SUBSCRIPTION FOR THE PLACING SHARES (AS DEFINED BELOW).

Persons who are invited to and who choose to participate in the Placing (as defined below), by making an oral or written offer to subscribe for Placing Shares, including any individuals, funds or others on whose behalf a commitment to subscribe for Placing Shares is given (the "Placees"), will be deemed to have read and understood this announcement, (such announcement and the Appendix together being the "Announcement") including its Appendix, in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements and undertakings, contained in this Appendix. In particular each such Placee represents, warrants and acknowledges that:

(A)            it is a Relevant Person (as defined above) and undertakes that it will subscribe for, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business; and

(B)            if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, that any Placing Shares subscribed for by it in the Placing will not be subscribed for on a non-discretionary basis on behalf of, nor will they be subscribed for with a view to their offer or resale to, persons in circumstances which may give rise to an offer of securities to the public other than an offer or resale in a member state of the EEA which has implemented the Prospectus Directive to Qualified Investors, or in circumstances in which the prior consent of J.P. Morgan Securities plc, which conducts its UK investment banking business under the name "J.P. Morgan Cazenove" ("JPMC") has been given to each such proposed offer or resale.

Persons (including without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Appendix or the Announcement of which it forms part should seek appropriate advice before taking any action.

The Placing 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 of any state or other jurisdiction of the United States. Accordingly, the Placing Shares may not be offered or sold 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 in accordance with applicable state securities laws. There will be no public offering of the Placing Shares in the United States. The Placing Shares are being offered and sold outside the United States in accordance with Regulation S under the Securities Act. Any offering to be made in the United States will be made to a limited number of qualified institutional buyers (as defined in Rule 144A under the Securities Act), pursuant to an exemption from registration under the Securities Act in a transaction not involving any public offering.

The Placing 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 the accuracy or adequacy of this announcement. Any representation to the contrary is unlawful.

The relevant clearances have not been, and nor will they be, obtained from the securities commission or similar regulatory authority of any province or territory of Canada. The offering of the Placing Shares is being made on a private placement basis only in the provinces of British Columbia, Alberta, Ontario and Quebec and is exempt from the requirement that the Company prepare and file a prospectus with the relevant securities regulatory authorities in Canada. No offer of securities is made pursuant to this Announcement in Canada except to a person who has represented to the Company and JPMC that such person (i) is purchasing as principal, or is deemed to be purchasing as principal in accordance with applicable Canadian securities laws, for investment only and not with a view to resale or distribution; (ii) is an "accredited investor" as such term is defined in section 1.1 of National Instrument 45-106 Prospectus Exemptions or, in Ontario, as such term is defined in section 73.3(1) of the Securities Act (Ontario); and (iii) is a "permitted client" as such term is defined in section 1.1 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the Placing Shares acquired by a Canadian investor in the Placing must be made in accordance with applicable Canadian securities laws, which may vary depending on the relevant jurisdiction, and which may require resales to be made in accordance with Canadian prospectus requirements, a statutory exemption from the prospectus requirements, in a transaction exempt from the prospectus requirements or otherwise under a discretionary exemption from the prospectus requirements granted by the applicable local Canadian securities regulatory authority. These resale restrictions may under certain circumstances apply to resales of the Placing Shares outside of Canada.

No prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and the Placing Shares have not been, and nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, Japan, Jersey or South Africa. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Australia, Japan, Jersey  or South Africa or any other jurisdiction outside the United Kingdom or to, or for the account or benefit of any national, resident or citizen of Australia, Japan or South Africa.

Details of the Placing Agreement and of the Placing Shares

JPMC and the Company have today entered into a placing agreement (the "Placing Agreement") under which, subject to the terms and conditions set out therein, JPMC has agreed that it will, as agent for and on behalf of the Company, use its reasonable endeavours to procure Placees for new ordinary shares of 10 pence each in the share capital of the Company (the "Placing Shares"), with the number of Placing Shares and price to be determined following completion of the Bookbuild (as defined below) and, failing which, to itself as principal subscribe for the Placing Shares at the Placing Price (the "Placing").

Pursuant to the Placing Agreement, JPMC has agreed, subject to agreement with the Company as to the final number of the Placing Shares to be placed with Placees and the price per Placing Share (the "Placing Price"), to underwrite the settlement risk in the event that any Placees fail to take up their allocation of the Placing Shares.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of 10 pence each in the share capital of the Company (the "Ordinary Shares"), including the right to receive all dividends and other distributions declared, made or paid in respect of the Ordinary Shares after Admission (as defined below).

Application for listing and admission to trading

Applications have been made to the Financial Conduct Authority (the "FCA") for admission of the Placing Shares to the premium listing segment of the Official List of the FCA (the "Official List") and to London Stock Exchange plc (the "London Stock Exchange") for admission of the Placing Shares to trading on its main market for listed securities (together, "Admission"). It is expected that Admission will become effective at 8.00 a.m. on 14 September 2018 and that dealings in the Placing Shares will commence at that time.

Bookbuild

JPMC will today commence an accelerated bookbuilding process to determine demand for participation in the Placing by Placees (the "Bookbuild"). This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.

JPMC shall be entitled to effect the Placing by such alternative method to the Bookbuild as it may, in its absolute discretion following consultation with the Company, determine.

Participation in, and principal terms of, the Placing

1.              JPMC is acting as a bookrunner and agent of the Company in connection with the Placing.

2.              Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by JPMC. JPMC and its respective affiliates are entitled to enter bids in the Bookbuild as principal.

3.              The Bookbuild, if successful, will establish a single price per Placing Share payable to JPMC, as agent for and on behalf of the Company, by all Placees whose bids are successful. The Placing Price and the final number of Placing Shares will be determined by the Company (in consultation with JPMC) following completion of the Bookbuild and any discount to the market price of the Ordinary Shares will be determined in accordance with the Listing Rules of the FCA. The Placing Price and the final number of Placing Shares to be issued will be announced on a Regulatory Information Service ("RIS") following the completion of the Bookbuild (the "Placing Results Announcement").

4.              To bid in the Bookbuild, prospective Placees should communicate their bid by telephone to their usual sales contact at JPMC. Each bid should state the number of Placing Shares which the prospective Placee wishes to acquire at either the Placing Price which is ultimately established by the Company and JPMC or at prices up to a price limit specified in its bid. Bids may be scaled down by JPMC on the basis referred to in paragraph 8 below.

5.              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 JPMC's consent, will not be capable of variation or revocation after the time at which it is submitted. Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to JPMC, as agent for and on behalf of the Company, to pay it in cleared funds immediately on the settlement date, in accordance with the registration and settlement requirements set out below, an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to subscribe for and the Company has agreed to allot.

6.              The Bookbuild is expected to close no later than 4.00 p.m. (London time) on 12 September 2018 but may be closed earlier or later at the discretion of JPMC and the Company. JPMC may, in agreement with the Company, accept bids that are received after the Bookbuild has closed.

7.              Each prospective Placee's allocation will be agreed between JPMC (in consultation with the Company) and will be confirmed orally by JPMC (as agent for and on behalf of the Company) following the close of the Bookbuild and a trade confirmation will be despatched thereafter. This oral confirmation to such Placee will constitute an irrevocable legally binding commitment upon that person (who will at that point become a Placee) in favour of JPMC and the Company to acquire the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with the Company's articles of association. All obligations under the Bookbuild and Placing will be subject to fulfilment 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". By participating in the Bookbuild, each Placee will agree 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.

8.              JPMC may choose to accept bids, either in whole or in part, on the basis of allocations determined in agreement with the Company and may scale down any bids for this purpose on such basis as they may determine. JPMC may also, notwithstanding paragraphs 4 and 5 above, and subject to prior consent of the Company, (i) allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time and (ii) allocate Placing Shares after the Bookbuild has closed to any person submitting a bid after that time. The Company reserves the right (upon agreement with JPMC) to reduce or seek to increase the amount to be raised pursuant to the Placing, in its absolute discretion.

9.              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".

10.            Except as required by law or regulation, no press release or other announcement will be made by JPMC 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.

11.            To the fullest extent permissible by law, none of JPMC, the Company or any of their respective affiliates, agents, directors, officers or employees shall have any responsibility or liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, none of JPMC, the Company or any of their respective affiliates, agents, directors, officers or employees shall have any liability (including to the fullest extent permissible by law, any fiduciary duties) in respect of JPMC's conduct of the Bookbuild or of such alternative method of effecting the Placing as JPMC 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 obligations of JPMC under the Placing Agreement are conditional on, amongst other things:

(A)            agreement being reached between the Company and JPMC on the Placing Price and the final number of Placing Shares to be issued pursuant to the Placing;

(B)            in the opinion of JPMC (acting in good faith), the representations and warranties of the Company contained in the Placing Agreement being true and accurate and not misleading on and as of the date of the Placing Agreement and at all times before Admission by reference to the facts and circumstances then subsisting, save to the extent, in the absolute discretion of JPMC, any breach of a representation or warranty is not material;

(C)            the fulfilment by the Company of its obligations under the Placing Agreement to the extent that the same fall to be performed prior to Admission, save to the extent, in the absolute discretion of JPMC, the failure to fulfil any such obligation is not material;

(D)            the Company allotting, subject only to Admission, the Placing Shares to the Placees in accordance with the Placing Agreement; and

(E)            Admission occurring not by not later than 8.00 a.m. (London time) on 14 September 2018 (or such later date as may be agreed by the Company and JPMC, being not later than 14 September 2018).

If: (i) any of the conditions contained in the Placing Agreement, including those described above, are not fulfilled or, where permitted, waived or extended in writing by JPMC, by the time or date specified (or such later time and/or date as the Company and JPMC may agree); or (ii) any of such conditions become incapable of being satisfied; or (iii) the Placing Agreement is terminated in the circumstances specified below, the Placing will not proceed 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 the Placee in respect thereof. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

Neither JPMC nor any of its respective affiliates, agents, directors, officers or employees 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 they may make as to whether or not to waive or to extend the time and/or the date for the satisfaction of any condition to the Placing nor for any decision they 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 JPMC.

Lock-up

The Company has agreed with JPMC that it will not, and will procure that none of its subsidiaries will (save as required by law or the rules or standards of the London Stock Exchange, the Listing Rules or the Market Abuse Regulation (EU) No 596/2014 ("MAR")), without the prior written consent of JPMC (such consent not to be unreasonably withheld or delayed), between the date of the Placing Agreement and 90 days after the date of Admission, (i) issue, allot, offer, pledge, sell, contract to sell, grant any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any Ordinary Shares or other shares in the capital of the Company or any securities convertible into or exchangeable for Ordinary Shares or other shares in the capital of the Company or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of Ordinary Shares or other shares in the capital of the Company, whether any such transaction described in (i) or (ii) above is to be settled by delivery of Ordinary Shares or other shares in the capital of the Company or such other securities, in cash or otherwise, provided that the foregoing shall not prevent or restrict the issue and offer of the Placing Shares in respect of the Placing in accordance with the terms of the Placing Agreement or the grant of options under, or the allotment and issue of shares pursuant to options or other rights under, any existing employee share schemes, long term incentive plans, employee share options or bonus plans of the Company (in accordance with its normal practice), or the cancellation of the Company's treasury shares (if applicable).

Right to terminate under the Placing Agreement

JPMC is entitled, at its absolute discretion, at any time before Admission, terminate the Placing Agreement by giving notice to the Company if, amongst other things, (i) in the opinion of JPMC (acting in good faith) any of the Company's representations and warranties are not true and accurate or have become misleading (or would not be true and accurate or would be misleading if they were repeated at any time before Admission) by reference to the facts subsisting at the time and, in the absolute discretion of JPMC, any such breach of representation or warranty is material; (ii) the Company has not fulfilled its obligations under the Placing Agreement to the extent that the same fall to be performed prior to Admission, save to the extent and, in the absolute discretion of JPMC, the failure to fulfil any such obligation is material; (iii) since the date of the Placing Agreement, there has been a material adverse change in or affecting the operations, properties, condition (financial or other), trading position or prospects or results of operations or general affairs of the Group taken as a whole; or (iv) there has occurred a force majeure or market disruption event as specified in the Placing Agreement which, in the opinion of JPMC (acting in good faith) and after such consultation with the Company as shall be practicable in the circumstances, is of such magnitude or severity as to make it impracticable or inadvisable to proceed with the Placing.

Upon such notice being given, the parties to the Placing Agreement shall be released and discharged (except for any liability arising before or in relation to such termination) from their respective obligations under or pursuant to the Placing Agreement, subject to certain exceptions.

By participating in the Placing, Placees agree that the exercise by JPMC of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of JPMC, that JPMC does not need to make any reference to Placees and shall have no liability to Placees whatsoever in connection with any exercise or failure to exercise any right of termination and that none of the Company, JPMC or any of their respective directors, officers, employees, agents or affiliates shall have any liability to Placees whatsoever in connection with any exercise or failure to exercise any right of termination.

No prospectus

No offering document or prospectus has been or will be submitted to be approved by the FCA or submitted to the London Stock Exchange in relation to the Placing and no such prospectus is required (in accordance with the Prospectus Directive) to be published and Placees' commitments will be made solely on the basis of the information contained in this Announcement (including this Appendix) released by the Company today and any information publicly announced to a RIS by or on behalf of the Company on or prior to the date of this Announcement and subject to the further terms set forth in the contract note to be provided to individual prospective Placees.

Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement (including this Appendix) and all other publicly available information previously and simultaneously published by the Company by notification to a RIS 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 Company or JPMC or any other person and none of the Company, JPMC or any of their respective directors, officers, employees, agents or affiliates 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 or limit the liability of any person for fraudulent misrepresentation by that person.

Registration and settlement

Settlement of transactions in the Placing Shares following Admission will take place within the system administered by Euroclear UK & Ireland Limited ("CREST"), subject to certain exceptions. JPMC and the Company reserve the right to require settlement for and delivery of the Placing Shares (or a portion thereof) to Placees in certificated form if delivery or settlement is not possible or practicable within the CREST system or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

Following the close of the Bookbuild for the Placing, each Placee allocated Placing Shares in the Placing will be sent a contract note stating the number of Placing Shares to be allocated to it at the Placing Price 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 that it has in place with JPMC.

The Company will deliver the Placing Shares to a CREST account operated by JPMC as the Company's agent and JPMC will enter its delivery (DEL) instruction into the CREST system. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant Placing Shares to that Placee against payment.

It is expected that settlement will be on 14 September 2018 on a delivery versus payment basis in accordance with the instructions set out in the trade confirmation.

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 JPMC.

Each Placee is deemed to agree that, if it does not comply with these obligations, JPMC (as agent for and on behalf of the Company) 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 Company's 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 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. Placees shall not be entitled to receive any fee or commission in connection with the Placing.

Representations and warranties and further terms

By submitting a bid and/or participating in the Placing each prospective Placee (and any person acting on such Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents, warrants and agrees (as the case may be) with JPMC (in its capacity as a bookrunner and placing agent of the Company, in each case as a fundamental term of its application for Placing Shares), the following:

(a)          it has read and understood this announcement, including this Appendix, in its entirety and that its participation in the Bookbuild and the Placing and its subscription of Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, indemnities, acknowledgements, agreements and undertakings and other information contained herein and undertakes not to redistribute or duplicate this Announcement;

(b)         no offering document or prospectus has been or will be prepared in connection with the Placing and it has not received and will not receive a prospectus or other offering document in connection with the Bookbuild, the Placing or the Placing Shares;

(c)          (i) it has made its own assessment of the Company, the Placing Shares and the terms of the Placing based on this Announcement (including this Appendix) and any information publicly announced to a Regulatory Information Service by or on behalf of the Company prior to the date of this Announcement (the "Publicly Available Information"); (ii) the Ordinary Shares are admitted to the premium listing segment of the Official List of the FCA and to trading on the London Stock Exchange's main market for listed securities and the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of the FCA and the London Stock Exchange (the "Exchange Information"), which includes a description of the nature of the Company's business, most recent balance sheet and profit and loss account, and similar statements for preceding years, and it has reviewed such Exchange Information as it has deemed necessary or that it is able to obtain or access the Exchange Information without undue difficulty; and (iii) it has had access to such financial and other information (including the business, financial condition, prospects, creditworthiness, status and affairs of the Company, the Placing and the Placing Shares, as well as the opportunity to ask questions) concerning the Company, the Placing and the Placing Shares as it has deemed necessary in connection with its own investment decision to acquire any of the Placing Shares and has satisfied itself that the information is still current and relied on that investigation for the purposes of its decision to participate in the Placing;

(d)         the content of this Announcement is exclusively the responsibility of the Company and none of JPMC or any of its affiliates, agents, directors, officers or employees or any person acting on behalf of any of them has or shall have any liability for (i) any information, representation or statement contained in, or any misstatements in or omissions from, this Announcement or any information previously or subsequently published by or on behalf of the Company, including, without limitation, any Publicly Available Information or Exchange Information; or (ii) any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement or otherwise. Nothing in this paragraph or otherwise in this Announcement (including this Appendix) excludes the liability of any person for fraudulent misrepresentation made by that person;

(e)          none of JPMC, the Company or any of their respective affiliates, agents, directors, officers or employees nor any person acting on behalf of any of them has provided, and none of them will provide, to it any material regarding the Placing Shares or the Company or any other person other than this Announcement (including this Appendix), nor has it requested that any of JPMC, the Company, any of their respective affiliates or any person acting on behalf of any of them to provide it with any such information;

(f)          either (i) it is not within the United States, will not be within the United States at the time that any buy order for Placing Shares is originated by it and is acquiring the Placing Shares in an "offshore transaction" within the meaning of and pursuant to Regulation S and not as a result of any form of "directed selling efforts" as defined in Regulation S; or (ii) it is a "qualified institutional buyer" as defined in Rule 144A under the Securities Act ("QIB") that has had delivered to it a US investor letter and is not acquiring the Placing Shares as a result of any "general solicitation" or "general advertising" within the meaning of Rule 502(c) under the Securities Act;

(g)          unless otherwise specifically agreed with JPMC, it is not, and at the time the Placing Shares are acquired, neither it nor the beneficial owner of the Placing Shares will be, a resident of Australia, Canada, Japan, Jersey or South Africa and further acknowledges that the Placing Shares have not been and will not be registered under the securities legislation of Australia, Canada, Japan, Jersey or South Africa and, subject to certain exceptions, may not be offered, sold, transferred, delivered or distributed, directly or indirectly, in or into those jurisdictions;

(h)         it has neither received nor relied on any "inside information" as defined in MAR in accepting the invitation to participate in the Placing;

(i)          it has complied with its obligations under the Criminal Justice Act 1993, MAR and, and in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000, the Terrorism Act 2006, and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the "Regulations") and the Money Laundering Sourcebook of the FCA 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;

(j)          if a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, that the Placing Shares subscribed for by it in the Placing will not be subscribed for on a non-discretionary basis on behalf of, nor will they be subscribed for with a view to their offer or resale to, persons in a member state of the EEA other than Qualified Investors, or in circumstances in which the prior consent of JPMC has been given to the proposed offer or resale;

(k)         it has not offered or sold and will not offer or sell any Placing Shares to the public in any member state of the EEA except in circumstances falling within Article 3(2) of the Prospectus Directive which do not result in any requirement for the publication of a prospectus pursuant to Article 3 of that Directive;

(l)          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 FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

(m)        if in a member state of the EEA, it is a "qualified investor" within the meaning of the Prospectus Directive;

(n)         it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;

(o)         if in the United Kingdom, it is a person (i) having professional experience in matters relating to investments and who falls within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order") or (ii) who is a high net worth entity falling within Article 49(2)(A) of the Order, or (iii) to whom this announcement may otherwise lawfully be communicated;

(p)         if in Australia, it is a person who is a "sophisticated investor" or "professional investor" (within the meaning of sections 708(8), and 708(11), respectively, of the Corporations Act, being a person to whom an offer of securities can be made without a disclosure document under Chapter 6D of the Corporations Act;

(q)         if in Canada, it (i) is purchasing as principal, or is deemed to be purchasing as principal in accordance with applicable Canadian securities laws, for investment only and not with a view to resale or distribution; (ii) is an "accredited investor" as such term is defined in section 1.1 of National Instrument 45-106 Prospectus Exemptions or, in Ontario, as such term is defined in section 73.3(1) of the Securities Act (Ontario); and (ii) is a "permitted client" as such term is defined in section 1.1 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations;

(r)          no action has been or will be taken by either the Company or JPMC or any person acting on behalf of the Company or JPMC that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required;

(s)          neither it, nor the person specified by it for registration as holder of Placing Shares is, or is acting as nominee or agent for, and the Placing Shares will not be allotted to, a person who is or may be liable to stamp duty reserve tax under any sections 67,70, 93 and 96 of the Finance Act 1986 (depository receipts and clearance services) and the Placing Shares are not being acquired in connection with arrangements to issue depository receipts or to issue or transfer Placing Shares into a clearance system;

(t)          (i) it is acting as principal in respect of the Placing and has the power and authority to carry on the activities in which it is engaged, to subscribe for Placing Shares and to execute and deliver all documents necessary for such subscription; and/or (ii) if it is acting for any other person (A) it is duly authorised to do so and has full power to make the acknowledgments, representations and agreements herein on behalf of each such person; and (B) it is and will remain liable to the Company and/or JPMC for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person). Each Placee agrees that the provisions of this paragraph shall survive the resale of the Placing Shares by or on behalf of any person for whom it is acting;

(u)         (i) it and any person acting on its behalf is entitled to subscribe for the Placing Shares under the laws of all relevant jurisdictions which apply to it; (ii) it has paid any issue, transfer or other taxes due in connection with its participation in any territory; (iii) it has fully observed such laws and obtained all such governmental and other guarantees, permits, authorisations, approvals and consents which may be required thereunder and complied with all necessary formalities and that it has not taken any action or omitted to take any action which will or may result in JPMC, the Company or any of their respective affiliates, directors, officers, agents, employees or advisers acting in breach of the legal or regulatory requirements of any jurisdiction in connection with the Placing; and (iv) the subscription of the Placing Shares by it or any person acting on its behalf will be in compliance with applicable laws and regulations in the jurisdiction of its residence, the residence of the Company, or otherwise;

(v)         it has all necessary capacity and has obtained all necessary consents and authorities to enable it to commit to its 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 announcement) and will honour such obligations;

(w)        it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with the terms and conditions of this Announcement, including the Appendix, on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other persons or sold as JPMC may in its absolute discretion determine and without liability to such Placee;

(x)          its allocation (if any) of Placing Shares will represent a maximum number of Placing Shares which it will be entitled, and required, to acquire, and that JPMC or the Company may call upon it to acquire a lower number of Placing Shares (if any), but in no event in aggregate more than the aforementioned maximum;

(y)         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. Neither JPMC nor 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. Each Placee and any person acting on behalf of such Placee agrees to indemnify the Company and JPMC in respect of the same on an after-tax basis on the basis that the Placing Shares will be allotted to the CREST stock account of JPMC who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;

(z)         the Placing does not constitute a recommendation or financial product advice and JPMC has not had regard to its particular objectives, financial situation and needs;

(aa)        none of JPMC, any of its affiliates, agents, directors, officers or employees, or any person acting on behalf of any of them, is making any recommendations to it or, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of JPMC and that JPMC does not have any duties or responsibilities to it for providing the protections afforded to JPMC's 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 its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

(bb)       in making any decision to acquire the Placing Shares, it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for or purchasing the Placing Shares. It further confirms that it is experienced in investing in securities of this nature in this sector and is aware that it may be required to bear, and is able to bear, the economic risk of participating in, and is able to sustain a complete loss in connection with, the Placing. It further confirms that it relied on its own examination and due diligence of the Company and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved, and not upon any view expressed or information provided by or on behalf of JPMC;

(cc)        in connection with the Placing, JPMC and any of its respective affiliates acting as an investor for its own account may take up Placing Shares in the Company and in that capacity may retain, purchase or sell for its own account such Placing Shares in the Company and any securities of the Company or related investments and may offer or sell such securities or other investments otherwise than in connection with the Placing. JPMC does not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so;

(dd)       its commitment to acquire the Placing Shares on the terms set out herein and in the contract note 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 consents be obtained with respect to the Company's or the JPMC's conduct of the Placing;

(ee)        terms and conditions and any agreements entered into by it pursuant to these terms and conditions and any non-contractual obligations arising out of or in connection with such agreements 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, 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 the Company or JPMC 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;

(ff)         the Company, JPMC and their respective affiliates and others will rely upon the truth and accuracy of the representations, warranties and acknowledgements set forth herein and which are given to JPMC on its own behalf and on behalf of the Company and are irrevocable and it irrevocably authorises the Company and JPMC to produce this announcement, pursuant to, in connection with, or as may be required by any applicable law or regulation, administrative or legal proceeding or official inquiry with respect to the matters set forth herein. It agrees that if any of the acknowledgements, representations, warranties and agreements made in connection with its subscribing and/or acquiring of Placing Shares is no longer accurate, it shall promptly notify the Company and JPMC;

(gg)        it will indemnify on an after-tax basis and hold the Company and JPMC 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;

(hh)       none of the Company or JPMC owes any fiduciary or other duties to any Placee in respect of any acknowledgements, confirmations, undertakings, representations, warranties or indemnities in the Placing Agreement; and

(ii)         if it is a pension fund or investment company, its acquisition of Placing Shares is in full compliance with applicable laws and regulations.

The foregoing acknowledgements, confirmations, undertakings, representations and warranties are given for the benefit of each of the Company and JPMC (for their own benefit and, where relevant, the benefit of their respective affiliates and any person acting on their behalf) and are irrevocable.

Please also note that the agreement to allot and issue Placing Shares to Placees (or the persons for whom Placees are contracting as agent) free of stamp duty and stamp duty reserve tax relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, direct from the Company for the Placing Shares in question. Such agreement is subject to the representations, warranties and further terms above and assumes and is based on the warranty from each Placee that the Placing Shares are not being subscribed for 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 none of the Company or JPMC will be responsible and the Placees shall indemnify on an after-tax basis and hold harmless the Company and JPMC and their respective affiliates, agents, directors, officers and employees 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 JPMC accordingly.

Neither the Company nor JPMC is liable to bear any capital duty, 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 in or outside the United Kingdom by any Placee or any other person on a Placee's acquisition of any Placing Shares or the agreement by a Placee to acquire any Placing Shares. Each Placee agrees to indemnify on an after-tax basis and hold harmless the Company, JPMC and their respective affiliates, agents, directors, officers and employees from any and all such stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including interest, fines or penalties relating thereto).

In this Announcement, "after-tax basis" means in relation to any payment made to the Company, JPMC or their respective affiliates, agents, directors, officers and employees pursuant to this Announcement where the payment (or any part thereof) is chargeable to any tax, a basis such that the amount so payable shall be increased so as to ensure that after taking into account any tax chargeable (or which would be chargeable but for the availability of any relief unrelated to the loss, damage, cost, charge, expense or liability against which the indemnity is given on such amount (including on the increased amount) there shall remain a sum equal to the amount that would otherwise have been so payable.

When a Placee or person acting on behalf of the Placee is dealing with JPMC, any money held in an account with JPMC 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 FSMA. The 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 JPMC's money in accordance with the client money rules and will be used by JPMC in the course of its own business; and the Placee will rank only as a general creditor of JPMC.

All times and dates in this announcement may be subject to amendment by JPMC (in its absolute discretion). JPMC shall notify the Placees and any person acting on behalf of the Placees of any changes.

 

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