Acquisition and placing

RNS Number : 5770U

Eclectic Bar Group PLC

08 April 2016

 

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, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

For immediate release

8 April 2016

Eclectic Bar Group Plc

Proposed acquisition of The Brighton Marine Palace and Pier Company

Proposed primary placing to raise not less than £8.5 million

Proposed secondary placing of 1,853,795 existing Ordinary Shares

Proposed change of name

and

Directorate change

Eclectic Bar Group plc (AIM: BAR) ("Eclectic", the "Company" or, together with its Subsidiaries, the "Group" or the "Existing Group") announces that it has today entered into a conditional agreement to acquire The Brighton Marine Palace and Pier Company, which owns and operates Brighton Pier, a profitable and cash-generative landmark seafront visitor attraction and entertainment venue on the South East coast of the UK, for a total cash consideration of £18 million on a cash-free, debt-free basis.

The Company proposes to fund the consideration payable under the Acquisition through a conditional placing of new Ordinary Shares to raise gross proceeds of not less than £8.5 million, with the balance to be funded through new £13 million debt financing agreed with Barclays Bank plc.

The Acquisition constitutes a reverse takeover for the purposes of Rule 14 of the AIM Rules for Companies and, as such, is conditional, inter alia, upon Shareholder approval.

In addition, Reuben Harley, the Company's Chief Executive Officer, has informed the Board that he intends to step down from the Board following the completion of the Acquisition and intends to sell up to 1,853,795 existing Ordinary Shares pursuant to the Placing.

Highlights

Transformational Acquisition

·     Proposed acquisition of the entire issued share capital of PierCo, which owns and operates Brighton Pier, for a total cash consideration of £18 million (subject to various adjustments under the Share Purchase Agreement), on a cash-free, debt-free basis.

·     The total consideration represents a multiple of approximately 5.1 times the Target Standalone EBITDA for the 12-month period ended 31 October 2015.

·     The Board believes that the Acquisition represents a significant opportunity for the Group to acquire an iconic British asset whilst also broadening its business base and diversifying its existing portfolio of venues by expanding into a differentiated offering within the leisure sector.

·     In particular, the Board believes that the Enlarged Group will benefit from the high-quality experience of operations, leadership and performance enhancement of PierCo's existing, standalone, senior management team, led by Anne Martin, whom it is proposed will join the Board on Completion.

·     The Board considers that the cash flow expected to be generated by PierCo would be transformative to the Existing Group, bringing substantial free cash flow for potential utilisation by the Enlarged Group, including the possible funding of further acquisitions across the leisure and entertainment sector.

·     The Acquisition is expected to be immediately earnings enhancing from Completion.

·     In order to reflect better the business of the Enlarged Group from Completion, it is intended to change the name of the Company to The Brighton Pier Group PLC with effect from Completion.  The Ordinary Shares will trade on AIM under the new TIDM "PIER" with effect from Admission.

·     The Acquisition constitutes a reverse takeover for the purposes of Rule 14 of the AIM Rules for Companies and, as such, is conditional, inter alia, upon Shareholder approval, which will be sought at a general meeting of the Company to be held at 10.00 a.m. on 26 April 2016 at the offices of Panmure Gordon, One New Change, London EC4M 9AF.

·     In accordance with Rule 14 of the AIM Rules for Companies, trading in Existing Ordinary Shares will be suspended from 7.30 a.m. today, 8 April 2016, pending publication of the Admission Document.  The Admission Document, which will include a circular and a notice convening the General Meeting, is expected to be published later today at which point it is expected that the suspension of trading in the Existing Ordinary Shares will cease.

·     A copy of the Admission Document will be available on the Company's website at www.eclecticbars.co.uk upon publication.  The Company will provide a further update in due course.

The Placing and the Bookbuild

·     Conditional placing to raise proceeds of not less than £8.5 million (gross) for the Company and conditional placing of up to 1,853,795 existing Ordinary Shares for the benefit of Reuben Harley.

·     Luke Johnson, the Company's Executive Chairman, is intending to subscribe for £2.5 million of New Ordinary Shares pursuant to the Placing.

·     The net proceeds of the Placing receivable by the Company will be used to part finance the cash consideration payable under the Acquisition.

·     The Placing will be conducted through an accelerated bookbuilding process which will be launched immediately following this Announcement in accordance with the terms and conditions set out in Appendix I to this Announcement.

·     The Placing is conditional, inter alia, upon Admission becoming effective and upon approval of the Resolutions by Shareholders at the General Meeting.  In total, the Company has received irrevocable undertakings to vote in favour of the Resolutions in respect of beneficial holdings totalling 6,827,505 Existing Ordinary Shares, representing approximately 42.1 per cent. of the Existing Share Capital.

·     Application will be made for the New Ordinary Shares to be admitted to trading on AIM.  It is expected that Admission and dealings in the New Ordinary Shares will commence at 8.00 a.m. on 27 April 2016 and that the Acquisition will complete at the same time.

·     Panmure Gordon is acting as Financial Adviser, Nominated Adviser and Joint Broker, and Arden Partners is acting as Joint Broker to the Company and sole Broker to the Selling Shareholder in connection with the Placing.  With the aim of broadening the Company's institutional shareholder base and to minimise the time and transaction costs of the Placing, the Placing Shares are being placed by the Joint Bookrunners with only a limited number of existing and new institutional shareholders.  The Placing Shares are not being made available to the public.

Commenting on the Acquisition and the Placing, Luke Johnson, Executive Chairman of Eclectic said:

"We are very pleased to announce the acquisition of Brighton Pier, one of the most iconic and instantly recognisable attractions in the UK. The pier is hugely popular with the British public and it occupies a special place as a landmark at the heart of Brighton.

"Brighton is one of the UK's most popular visitor destinations with over 10 million visitors per year, making it the most visited place in the South East. The pier itself is Britain's most popular attraction outside London. The pier has been well run and well maintained by the previous owners and we welcome Anne Martin and her first class management team to the newly enlarged Eclectic group.

"This acquisition represents the next stage in the group's development, expanding the Company's existing portfolio and using the enhanced Board's diverse skillset to become a differentiated operator of leisure and entertainment assets.

"I'd like to thank Reuben Harley for his contribution to the success of the Group.  He leaves with our warm wishes."

This summary should be read in conjunction with the full text of this Announcement.  In particular, your attention is drawn in particular to the risk factors set out in this Announcement, and you should read and understand the information provided in the "Important Notices" section of this Announcement.  Unless otherwise defined, defined terms have the same meanings as those given in Appendix II to this Announcement.

Enquiries:

Eclectic Bar Group Plc       (www.eclecticbars.co.uk)
Luke Johnson, Executive Chairman	Tel: [phone]
John Smith, CFO	Tel: [phone]
Panmure Gordon (Nominated Adviser and Joint Broker)	Tel: [phone]
Corporate Finance
Andrew Godber / Atholl Tweedie / Duncan Monteith
Corporate Broking
Charles Leigh-Pemberton
Arden Partners plc (Joint Broker)	Tel: [phone]
Corporate Finance
James Felix / Benjamin Cryer
Corporate Broking
Ed Walsh / Jonathan Keeling
Maitland (Financial Communications Advisers)	Tel: [phone]
James Devas
Robbie Hynes

IMPORTANT NOTICES

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING.  THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN (TOGETHER, THIS "ANNOUNCEMENT") ARE DIRECTED ONLY AT PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE: (1) IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA"), QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2.1(e) OF DIRECTIVE 2003/71/EC AS AMENDED, INCLUDING BY THE 2010 PROSPECTUS DIRECTIVE AMENDING DIRECTIVE (DIRECTIVE 2010/73/EC) AND TO THE EXTENT IMPLEMENTED IN THE RELEVANT MEMBER STATE (THE "PROSPECTUS DIRECTIVE"); (2) IF IN THE UNITED KINGDOM, ARE QUALIFIED INVESTORS AND (A) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER") (INVESTMENT PROFESSIONALS) OR (B) ARE PERSONS WHO FALL WITHIN ARTICLE 48 (CERTIFIED HIGH NET WORTH INDIVIDUALS) OR (ARTICLE 49(2)(a) TO (d) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").

THIS ANNOUNCEMENT AND THE INFORMATION IN IT 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 ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.  THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN ECLECTIC BAR GROUP PLC.

THE CONTENT OF THIS ANNOUNCEMENT HAS NOT BEEN APPROVED BY AN AUTHORISED PERSON WITHIN THE MEANING OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (AS AMENDED). RELIANCE ON THIS ANNOUNCEMENT FOR THE PURPOSE OF ENGAGING IN ANY INVESTMENT ACTIVITY MAY EXPOSE AN INDIVIDUAL TO A SIGNIFICANT RISK OF LOSING ALL OF THE PROPERTY OR OTHER ASSETS INVESTED.

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 WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY, IN 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 ONLY OUTSIDE OF THE UNITED STATES IN "OFFSHORE TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE WITH, REGULATION S UNDER THE SECURITIES ACT AND OTHERWISE IN ACCORDANCE WITH APPLICABLE LAWS.  NO PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE IN THE UNITED STATES OR ELSEWHERE.

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 OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

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

This Announcement or any part of it does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States (including its territories and possessions, any state of the United States and the District of Columbia (the "United States" or the "US")), Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction in which the same would be unlawful.  No public offering of the Placing Shares is being made in any such jurisdiction.

All offers of the Placing Shares will be made pursuant to an exemption under the Prospectus Directive from the requirement to produce a prospectus.  In the United Kingdom, this Announcement is being directed solely at persons in circumstances in which section 21(1) of the Financial Services and Markets Act 2000 (as amended) does not apply.

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 a criminal offence in the United States.  The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada, no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; the relevant clearances have not been, and will not be, obtained for the South Africa Reserve Bank or any other applicable body in the Republic of South Africa in relation to the Placing Shares and the Placing Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, Canada, Japan or the Republic of 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, Canada, Japan or the Republic of South Africa or any other jurisdiction outside the United Kingdom.

Persons (including, without limitation, nominees and trustees) who have a contractual right or other legal obligations to forward a copy of this Announcement should seek appropriate advice before taking any action.

By participating in the Bookbuild and the Placing, each person who is invited to and who chooses to participate in the Placing (a "Placee") by making an oral and legally binding offer to acquire Placing Shares will be deemed to have read and understood this Announcement in its entirety, to be participating, making an offer and acquiring Placing Shares on the terms and conditions contained herein and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in the Appendix.

This Announcement may contain and the Company may make verbal statements containing "forward-looking statements" with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition, performance, strategic initiatives, objectives and results.  Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "seek", "may", "could", "outlook" or other words of similar meaning.  By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond the control of the Company, including amongst other things, United Kingdom domestic and global economic business conditions, market-related risks such as fluctuations in interest rates and exchange rates, the policies and actions of governmental and regulatory authorities, the effect of competition, inflation, deflation, the timing effect and other uncertainties of future acquisitions or combinations within relevant industries, the effect of tax and other legislation and other regulations in the jurisdictions in which the Company and its respective affiliates operate, the effect of volatility in the equity, capital and credit markets on the Company's profitability and ability to access capital and credit, a decline in the Company's credit ratings; the effect of operational risks; and the loss of key personnel.  As a result, the actual future financial condition, performance and results of the Company may differ materially from the plans, goals and expectations set forth in any forward-looking statements.  Any forward-looking statements made in this Announcement by or on behalf of the Company speak only as of the date they are made.  Except as required by applicable law or regulation, the Company expressly disclaims any obligation or undertaking to publish any updates or revisions to any forward-looking statements contained in this Announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

Panmure Gordon is authorised and regulated by the Financial Conduct Authority (the "FCA") in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Bookbuild and the Placing, and Panmure Gordon will not be responsible to anyone (including any Placees) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Bookbuild or the Placing or any other matters referred to in this Announcement.

Arden Partners is authorised and regulated by the FCA in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Bookbuild and is acting exclusively for the Company and the Selling Shareholder and no one else in connection with the Placing and Arden Partners will not be responsible to anyone (including any Placees) other than the Company and the Selling Shareholder for providing the protections afforded to its clients or for providing advice in relation to the Bookbuild and/or the Placing or any other matters referred to in this Announcement.

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

No statement in this Announcement is intended to be a profit forecast or estimate, 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.

The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares.  Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser.

The Placing Shares to be issued or sold 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 nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.

Proposed acquisition of The Brighton Marine Palace and Pier Company

Proposed primary placing to raise not less than £8.5 million

Proposed secondary placing of 1,853,795 existing Ordinary Shares

Proposed change of name

and

Directorate change

1. Introduction

Eclectic has today announced that it has entered into a conditional agreement to acquire PierCo, which owns and operates Brighton Pier, a profitable and cash-generative landmark seafront visitor attraction and entertainment venue on the South East coast of the UK, from the Seller for a total cash consideration of £18 million (subject to various adjustments under the Share Purchase Agreement), on a cash-free, debt-free basis, which represents a multiple of approximately 5.1 times the Target Standalone EBITDA for the 12 month period ended on 31 October 2015.

The Board believes that the Acquisition represents a significant opportunity for the Existing Group to acquire an iconic British asset whilst also broadening its business base and diversifying its existing portfolio of venues by expanding into a differentiated offering within the leisure sector. In particular, the Board believes that the Enlarged Group will benefit from the high-quality experience of operations, leadership and performance enhancement of PierCo's existing, standalone senior management team, led by Anne Martin whom it is proposed will join the Company's board of directors. In addition, the Board considers that the cash flow expected to be generated by PierCo would be transformative to the Existing Group, bringing substantial free cash flow for potential utilisation by the Enlarged Group, including the possible funding of further acquisitions across the leisure and entertainment sector.

The Acquisition constitutes a reverse takeover under the AIM Rules for Companies and as such is conditional, inter alia, on approval by Shareholders, which will be sought at a general meeting of the Company to be held on 26 April 2016, notice of which will be set out at the end of the Admission Document to be published later today.

The Company proposes to fund the Acquisition through a conditional placing to raise gross proceeds of not less than £8.5 million, with the balance funded through new £13 million debt financing agreed with Barclays Bank plc, with which the Company has conditionally entered into a £12 million term loan facility, and a revolving credit facility of £1,000,000, which replaces the current facilities available to the Existing Group. The outstanding amount of the Existing Group's current revolving credit facility is intended to be repaid within two months of Completion.

In addition, a resolution will be proposed at the General Meeting to change the name of the Company to The Brighton Pier Group plc.

2. Background to and reasons for the Acquisition

The Existing Group was created in 2006 following the acquisition of 12 leasehold premium bars and the Company was admitted to trading on AIM on 28 November 2013. At that time, the Existing Group had built up its portfolio of premium bars to 20 sites across the UK, and had developed two major brands, 'Sakura' and 'Lola Lo', across ten such sites. The Existing Group's venues predominantly target a customer base of sophisticated students midweek and stylish over-21s and young professionals at weekends.

The Company's objective at the time of its Original Admission was to grow the business through:

(i) the development of its premium bar business; and

(ii) corporate acquisitions as appropriate opportunities were identified.

The Company implemented the first element of this strategy in the first year following its Original Admission, including acquiring the Lowlander Grand Café bar and brassiere in Covent Garden, London and refurbishing Embargo República, the Existing Group's Cuban-themed nightclub in Chelsea, London.

In November 2014, the Company announced that its business had faced difficult trading conditions in a number of areas, including changes in student behaviour, intense competition in a number of the Existing Group's key trading towns, and disappointing trading in two of the Existing Group's sites. These challenging market conditions have continued and the Existing Group has responded by reducing costs at the head office, disposing, and seeking to dispose, of underperforming sites, closing non-profitable nights and focussing on development of its food offering.

On 15 June 2015, the Company announced the appointment of Luke Johnson as Executive Chairman and his investment of £1.5 million by way of a subscription for new shares, which, alongside the subscriptions of certain other Directors, raised a total of £1.65 million to provide additional working capital to fund the development of the Existing Group's business.

Mr Johnson identified that Eclectic has much potential, including a strong management team, an attractive portfolio of sites, and a robust business model from which to take advantage of new opportunities in the market to diversify operations and grow the business through acquisition and market consolidation.

The Board believes that the Acquisition is the first such opportunity to increase the size of the Existing Group, and that it will enable the Existing Group to acquire an iconic British asset and profitable business whilst also broadening its business base and diversifying its existing portfolio of venues by expanding into a differentiated offering within the leisure sector.

The Enlarged Group will benefit from the combined expertise of the existing Eclectic and PierCo management, operational and finance teams, including an augmented board following Admission with the addition of Proposed Director, Anne Martin, current General Manager of PierCo. The Board is also intending to appoint Proposed Director, Joseph Tager, whom has extensive experience of acquiring and developing leisure sector assets.

In addition, the Board considers that the cash flow expected to be generated by PierCo should be transformative to the Existing Group, bringing substantial free cash flow for potential utilisation across the Enlarged Group, including the possible funding of further acquisitions across the leisure and entertainment sectors. The Directors believe that the combination of the two businesses will also have the result of smoothing the businesses' respective seasonal fluctuations in working capital, and furthermore can be achieved with no requirement for additional central administrative overheads. Additionally, by combining Eclectic and PierCo, the Enlarged Group may have the potential to realise lower costs through targeted cost synergies, for example liquor purchasing synergies.

The Acquisition is expected to be immediately earnings enhancing from Completion. This statement does not constitute a profit forecast.

3. Information on Brighton Pier

3.1 Introduction

Brighton Pier, which is owned and operated by PierCo, is an iconic landmark and leisure attraction in Brighton, England. Brighton Pier, originally named The Brighton Marine Palace & Pier, is 1,722 feet long, offering a wide variety of seaside entertainment including amusement rides, arcades, bars, a restaurant and food and retail kiosks in a nostalgic and safe environment, with unparalleled views of Brighton and the English Channel. Entry to Brighton Pier is free, attracting a wide demographic of customers, including national and international tourists and local residents. According to Visit Britain, it is the fifth most popular visitor destination in the UK, with over 4.5 million visitors in 2014, making it the UK's most visited attraction outside of London. Brighton Pier is managed by a long-serving and experienced management team, who will remain at PierCo to continue to oversee the operations of the Pier.

In the past three years, PierCo's strategy has been to create a profitable and cash-generative attraction that appeals to a wide demographic of visitors by offering traditional and thrill attractions and quality hospitality facilities with a family-friendly atmosphere. This is being delivered by Brighton Pier's technically-astute management team through an integrated approach to capital expenditure, operational excellence, quality control, effective marketing and robust health and safety procedures. The execution of this strategy has delivered a three year compound annual Target Standalone EBITDA growth rate of approximately 7 per cent. to approximately £3.5 million for the year ended 31 October 2015 at a relatively constant Target Standalone EBITDA margin of approximately 27 per cent. During this period, turnover grew at a three year CAGR of approximately 9 per cent. to approximately £13.3 million for the year ended 31 October 2015.

The Directors and Proposed Directors believe Brighton Pier to be a well-invested and highly profitable leisure attraction, positioned in an iconic location, which possesses a strong heritage within a large and growing target market.

3.2 History

PierCo has been part of the Noble group since 1984, and is a statutory company created by the Brighton Marine Palace and Pier Act in 1888.

Brighton Pier (originally known as The Brighton Marine Palace & Pier) opened on 20 May 1899, and cost £137,000 to build. Brighton Pier became the third pier to be constructed in Brighton in addition to the Royal Suspension Chain Pier and the West Pier. A condition of Brighton Pier's construction was for the Chain Pier to be demolished, however, a storm largely destroyed it before this could take place. The Pier opened as a pleasure pier, offering deckchairs, kiosks selling souvenirs and confectionary as well as entertainment stalls with fortune tellers and silhouettists, plus smaller pavilions for dining, smoking and reading. In 1905, a collection of amusement machines was installed on Brighton Pier. A concert hall opened in 1907, which was developed into a theatre by 1911. In the same year, a steamer landing stage was constructed, allowing Brighton Pier to offer regular passenger ferry services to and from continental Europe, in addition to short trips on pleasure boats. Brighton Pier continued to develop entertainment facilities, constructing the indoor Winter Gardens (now The Palace of Fun) in 1910 to host regular band appearances, and a bandstand to stage free concerts through the summer months. In 1932, dodgems and a ferris wheel were added to Brighton Pier's amusements.

Brighton Pier was extended in 1938. For national security reasons, Brighton Pier was closed in May 1940 as it was seen by the War Office to be potentially useful to sea-borne invasion forces.

The Pier was listed at Grade II* on 20 August 1971, which categorises the Pier as a particularly important building of more than special interest. This provides the local council authority to grant or refuse building consent for any alteration, extension or demolition which would affect its character as a building of special architectural or historic interest, taking into consideration the Pier's historic significance against issues including its function, condition and viability.

The landing stage had become unused by 1973, and work to demolish this commenced that year, completing in 1975. During a storm in 1973, a 70-ton barge moored at the landing stage, which was being used by the demolition company, broke loose and damaged the Pier head, and in particular the theatre which never re-opened.

In 1984, Brighton Pier was acquired by the Noble Organisation, and major changes were implemented including the introduction of free admission, free deck chairs, new food kiosks on the forecourt and a traditional fish & chips restaurant. In 1986, the theatre was removed, with the Pier head extended to support new attractions including a domed amusement arcade, several amusement and thrill rides and an additional hospitality venue

In 1998, the National Piers Society named Brighton Pier as 'Pier of the Year', and in 2000 it was renamed "Brighton Pier". Brighton Pier suffered a large fire on 4 February 2003 but the damage was limited and most of the Pier was able to reopen the next day. It was during this period that much damage was suffered by the West Pier, which had closed for custom in 1975, causing it to be declared beyond repair.

3.3 Attractions and product offering

Brighton Pier is a pleasure pier, offering a wide range of attractions including two arcades, over twelve amusement rides and a variety of on-site hospitality and catering facilities. The attractions, product offering and layout of the Pier are focussed on creating a family-friendly atmosphere that aims to attract a wide demographic of visitors. The Pier itself is free entry, with revenue generated via the pay-as-you-go purchase of products on the amusement rides, in the arcades, in the hospitality facilities and at the retail kiosks. Additionally, the Pier has recently introduced a pre-paid wristband offer to allow customers unlimited use of the amusement rides for a flat fee during their day-visit, with secondary spend then generated in the arcades, the catering and hospitality facilities and retail kiosks. Brighton Pier's pricing structure allows its attractions and facilities to be accessible for visitors of all budgets.

The Pier is open 364 days a year (not Christmas Day), and is typically open from 9.30 a.m. to midnight (Easter to September) and 11.00 a.m. to 8.00 p.m. (October to Easter), with typical visit times of between one hour to half a day, allowing the Pier to accommodate a high turnover of visitors each day. While the Pier is outdoors, a number of the Pier's attractions and hospitality facilities are undercover, including the Palm Court restaurant, allowing them to remain open for trade during inclement weather.

Arcades

PierCo currently operates two indoor arcade locations on Brighton Pier with 347 machines in total: the Palace of Fun, which is located in what was formerly known as the Winter Garden near the entrance of the Pier and is the largest of the two; and the Dome, which is located at the Pier head amongst the amusement rides.

Palace of Fun contains 234 arcade machines, including arcade games, simulators, penny pushers, fixed-odds gaming machines, and participation games. Palace of Fun generates the majority of arcade revenue, and is a key revenue generating attraction during the quieter winter period due to its location at the front of the Pier and it being kept open all year round. The Dome holds 113 arcade machines, including arcade games, penny pushers, simulators, table games and competitive participation games. The Dome currently has spare capacity, and the Directors and Proposed Directors believe an area can be converted into a children soft-play zone with neighbouring cake and coffee stand. Side stalls are located throughout the Pier, which include classic fairground participation games such as 'hook a duck' and coconut shies.

The arcade amusements and side stalls are cash attractions.

Amusement rides

Brighton Pier has amusement rides to cater for a wide range of visitors and for all ages, including thrill rides and traditional fairground rides. Entry to the amusement rides can be through pre-paid tickets or via the pre-paid unlimited entry wristband offer. Pricing is flexibly managed in respect of the time of season, the time of day and the prevailing weather. Other than when the rides need to be repaired, which takes place in late winter, the rides remain open all year round, weather permitting. The amusement rides are all based at the Pier head, and contain seven thrill rides which are major attractions to visiting customers, including Turbo Coaster, the Pier's largest rollercoaster and the fastest of Brighton Pier's rides, featuring two drops and a loop-the-loop; Air Race, a thrill ride replicating the experiences of an acrobatic aeroplane flight; The Booster, a 130 feet, a maximum thrill ride which rotates the customer 360 degrees while hurtling through the air; Twister, which rotates at 12 revolutions per minute; Galaxia, a high speed carousel; Wild River, a wooden log flume; and Crazy Mouse, a rollercoaster with spinning cars.

Brighton Pier also hosts a number of traditional fairground rides, including a carousel, a traditional family seaside ride; the Horror Hotel, a haunted house rollercoaster ride; dodgems, a popular bumper car ride; waltzers, a classic spinning fairground ride; trampolines and a helter skelter.

Catering and hospitality

Brighton Pier has a large mix of catering and hospitality options throughout the Pier, including restaurants, bars, fast food and snack kiosks and a range of concession kiosks.

Palm Court is a family-friendly fish and chips restaurant located midway along the Pier. Visitors can order meals either to sit in or take away. The restaurant is fully licensed to sell alcohol, serving a large selection of cold and hot drinks.

Victoria's Bar is a public house located next to Palm Court, offering cold and hot drinks, a shortened menu of Palm Court food to eat-in, and afternoon tea.

Horatio's Bar is an approximately 5,000 square foot public house on the Pier head which has a large beer garden adjoined to it with sea views out to the east of the Pier. The Glitter Bar is a karaoke and entertainment bar connected to Horatio's Bar. Horatio's Bar and Glitter Bar do not currently offer catering, but have potential to do so in the future. Both Victoria's Bar and Horatio's Bar offer live sports, and Horatio's Bar can host live music and entertainment in addition to private parties to extend the offering into late night.

Currently, 25 fast food and snack kiosks are operated on the Pier. These include fast food kiosks (Wokstar noodles & rice, burgers, hot dogs, savoury crêpes), snack kiosks (ice creams, doughnuts, sweet crêpes, smoothies) and retail outlets. These are placed throughout Brighton Pier, with a number of these specifically repeated to allow visitors to have multiple opportunities to purchase from a certain stall on their customer journey.

PierCo offers a number of private and function hire options for a range of events. An individual restaurant or bar may be hired, and it is possible for customers to hire the entire Pier for exclusive use, including all of the attractions. Parts of the Pier are also licensed to conduct marriages.

In addition to the above, PierCo generates revenue from eight ATMs positioned throughout the Pier, receiving a proportion of the commission charged through transaction fees.

3.4 PierCo financial record and current trading and prospects

The following selected historical financial information on PierCo for each of the three financial years ended 31 October 2013, 31 October 2014 and 31 October 2015 has been prepared in accordance with IFRS, in addition to using PierCo's historical records of its assets and liabilities, including management accounts, with costs and income which will be directly associated to PierCo on Completion included or removed to reflect the PierCo business as a standalone entity from the Sellers. The audited Target Underlying EBITDA figures are given as the profit from operations adjusted for depreciation, machine rental costs, management charges and exceptional repair costs relating to the Pier. The Target Underlying EBITDA figures are adjusted for ATM revenue of approximately £96,000, £110,000 and £125,000 for the years ended 2013, 2014 and 2015 respectively, which will be transferring to PierCo on Completion, to derive the unaudited Target Standalone EBITDA.

	Financial year ended
	31 October 2013 £000's	31 October 2014 £000's	31 October 2015 £000's
Revenue	11,245	12,289	13,297
Target Underlying EBITDA	3,014	3,443	3,421
Target Standalone EBITDA	3,110	3,553	3,546
Target Standalone EBITDA margin	27.7%	28.9%	26.7%

Since 31 October 2015, PierCo has continued to trade in line with PierCo's management's expectations.

3.5 Maintenance and capital expenditure

Each year, a thorough substructure survey is undertaken by Hemsley Orrell Partnership ("HOP"), a specialist pier surveyor, which stated in its most recent report (dated January 2016) that in its opinion, when compared with other piers of a similar age around the UK coastline, Brighton Pier has had significantly better than average levels of positive maintenance over recent years. Additionally, qualified divers undertake an underwater substructure survey of the Pier approximately every five-to-six years. The last underwater survey took place on May 2010.

For the year ended 31 October 2015, PierCo spent approximately £0.7 million on routine repairs and maintenance. For the forthcoming financial year ending 31 October 2016, HOP stated within its annual survey that it believed approximately £0.7 million of repairs and maintenance expenditure would need to be incurred to ensure Brighton Pier remains safe and retains excellent structural integrity.

Since 1 November 2010, £4.25 million of non-recurring 'catch-up' capital expenditure has been invested by PierCo on steel bracing, replacement of balustrades, new gas and electricity mains, concrete pile encasement and cathodic protection to enhance the structural integrity of Brighton Pier for the long term, as was identified and recommended by HOP in its FY 2010 report. A further £0.5 million has been committed by PierCo and is currently being undertaken, of which the work outstanding at the date of this Announcement will be reflected as a deduction from the final Consideration. The Directors and Proposed Directors believe this exceptional investment will reduce the likelihood of one-off repair work and reduce future annual repair and maintenance expenses, and the Directors consider this to leave no identifiable needs for long-term structural projects, allowing future incremental capital expenditure to be allocated to revenue and profit enhancement opportunities.

Since 1 November 2009, PierCo has carried out major investments in its portfolio of attractions and hospitality facilities, spending £3.2 million of enhancement capital expenditure on the purchase of new amusement rides and arcade machines, the installation of wristband technology and the resumption of hospitality kiosks from vendors previously out as concessions. Capital expenditure of this nature is designed to increase visitor numbers, visitor satisfaction and the visitors' length of time spent on the Pier to support increases customer spend. The Directors and Proposed Directors believe these to be revenue and profitability-enhancing in nature.

The management team has a track record of maximising returns from its disciplined, EBITDA-focussed approach to investment, demanding a high internal rate of return to be exceeded. For example, in the year ended 31 October 2013, PierCo management team spent approximately £1.2 million on purchasing and installing new amusement rides, including a new roller coaster which generated an approximately £0.5 million improvement in PierCo's EBITDA by the end of the year ended 31 October 2015. The management team currently has a programme of potentially EBITDA-accretive near-term development capital expenditure projects to be considered by the Directors and Proposed Directors. When purchasing new amusement rides, the Board believes that PierCo's management have historically focussed on sourcing proven, high thrill rides - as opposed to high risk, high cost new rides and/or prototypes - from established manufacturers, which have the ability to fit within the space restrictions of the Pier.

The investment in wristband technology is a strategic initiative which aims to provide Brighton Pier's management with access to data on its customers, including which rides are most popular; the order in which customers visit the arcades, amusement rides and hospitality facilities; and the total time spent on Brighton Pier. The pre-paid wristband is purchased for a flat fee, allowing unlimited entry on the amusement rides on that day. The utilisation of the wristband technology will increase the proportion of online sales made by credit card, providing a guaranteed revenue stream that allows the Pier to hedge against the effects of inclement weather and increase its visibility on customer numbers, while reducing the number of on-site cash transactions.

Routine maintenance of the Pier is carried out on a daily basis, and is managed by a team internally, with maintenance schedules compliant with legislation and training systems, recognised externally as equivalent to a national vocational qualification. All amusement rides are subject to a compulsory annual safety review, which includes the dismantling and rebuilding of each attraction. PierCo insures Brighton Pier, and the rights to the insurance will be novated to Eclectic upon completion of the Acquisition. PierCo has historically made successful claims for repairs to damage incurred, including a claim made following costs of c.£602,000 incurred as a result of significant damage from a large storm in the year ended 31 October 2014.

3.6 Market and customers

The local tourist market and vitality of the resident economy are primary determinants of attendance levels to Brighton Pier. It is estimated that domestic holiday trips within England in the seven months to July 2015 rose by 13 per cent. (Visit England) over the same period in 2014, as UK holidaymakers increasingly look to national destinations. Brighton is one of the most popular visitor destinations within the UK and the most visited destination within the South East, with over 10 million visitors per year, of which 9 million are estimated to visit Brighton beach. Tourism contributes an estimated £780 million into the Brighton local economy and is responsible for the employment of nearly 20,000 people.

Brighton has a local population of 281,000 people, and in December 2015 was ranked second in the LSH UK Vitality Index Report, which measures the economic strength of towns and cities in the United Kingdom. 30 per cent. of England's population is within a two hour journey time of Brighton Pier, with good existing transport links and local infrastructure.

According to Visit Britain, Brighton Pier is the fifth most popular free entry visitor destination in the UK and the most visited attraction outside of London, with 4.5 million visitors in 2014. Furthermore, the UK continues to be a popular holiday destination for international visitors, with £21.8 billion spent by 34.4 million inbound tourists to the UK in 2014. Brighton has fast train links from London, one of the UK's most popular tourist destinations.

Brighton Pier is the only remaining pier in Brighton. No significant local competition exists for amusement rides or arcades entertainment, with Brighton Pier being the only location for permanent large-scale amusement rides in Brighton and the local area, or for a visitor experience of respective quality and scale. Due to this, and due to a large proportion of visitors to Brighton attending Brighton Pier, the Directors and Proposed Directors consider the Pier's primary competition comes from national holiday and short-break destinations and local day-visit attractions beyond Brighton.

The Brighton i360, a vertical cable car designed by the architects of the London Eye which, at its 450 feet high summit, allows 360 degree views for up to 26 miles (including of Brighton Pier), is expected to attract 165,000 to 305,000 new visitors to Brighton as estimated by Brighton & Hove City Council, which the Directors and Proposed Directors believe presents an opportunity for visitors to Brighton Pier to increase. Construction of the Brighton i360 observation tower at the root end of the derelict West Pier, 0.6 miles west of Brighton Pier, is continuing with the new visitor attraction expected to open in Spring 2016. Brighton & Hove City Council has stated that there were no other credible funded proposals for the West Pier site, and as such, the Directors and Proposed Directors now believe it unlikely that a competing Pier will be constructed in Brighton.

Brighton Pier's customers consist of local residents and national and international tourists, of which the customers are from a wide ranging demographic of visitor categories, including families with young and old children, teenagers, young adults and large groups. The Pier also attracts small and large corporate and family event customers through the hiring of its hospitality facilities.

The management team create targeted marketing campaigns to attract new customers and retain interest from previous visitors predominantly targeting local radio, focussed campaigns at universities and social media campaigns, while a large amount of on-Pier marketing is undertaken to attract casual visitors to attend the attractions and catering facilities present. The Directors and Proposed Directors believe Brighton Pier is capable of generating a certain amount of its own custom due to it being an iconic attraction in the local area and within the UK - this includes the permitted use of images of Brighton Pier in official tourist body marketing campaigns and through customers advertising Brighton Pier through their own use of social media platforms, such as Instagram and Facebook. The management team view customer satisfaction as a key marketing tool in generating customer loyalty, repeat visits and positive word-of-mouth trade, and ensure this is maintained in through its commitment to operational excellence, quality control and to the provision of first-rate training to their employees.

3.7 Health and safety, and employees

Health and safety of visitors to Brighton Pier is held in the highest regard by PierCo and Brighton Pier's management team. The management team has robust safety procedures and systems in place on-and offsite, including routine daily safety checks on all amusement rides. In line with its safety procedures, PierCo has, for example, installed a high-pressure fire extinguisher/deluge system to support in the case of a fire incident. In addition, if necessary, PierCo has use of a specialist lightweight fire engine housed at Brighton Pier's local fire station for emergency deployment. All amusement rides undergo an annual evaluation whereby sections of the rides are dismantled, evaluated and inspected, and then reassembled.

Such evaluations are performed by qualified engineers to evaluate the critical components and structures. The rides are subsequently repaired, refurbished or replaced where necessary to ensure they are at the highest standards of operation. The Brighton Pier's successful operation is underpinned by its management team's experience and length of service. The head office is located on-site, with the management team readily trained to respond to any safety matters or possible evacuation, in addition to staffing or operational issues. Health and safety is held in the highest regard by the management team, who work in close conjunction with the local police, firefighters and coastguard to ensure procedures are in place to react quickly and in the interest of the public's safety in the case of an emergency. Contingency plans have been produced and are in action for all amusement rides and facilities on site should an emergency arise.

Brighton Pier has a fixed payroll of approximately 139 employees all year round, growing to approximately 265 employees over the summer high season. Brighton Pier has a full time HR manager who oversees all necessary paperwork and training arrangements. The Pier has a culture of investing in training and development of its staff, with an intensive course of training on-site provided by a highly regarded external contractor to develop its employees' health and safety, customer service and operational abilities. PierCo has all relevant licences necessary to operate the arcade gaming and gambling machines, to permit the sale of alcohol and provide regulated entertainment, and to permit civil ceremonies to be conducted. PierCo has robust food safety and hygiene policies and procedures in place, and currently has the maximum five star rating for the areas that require inspection.

4. Existing Group, selected financial information and current trading

Eclectic is a leading operator of 19 premium bars located in major towns and cities across the UK. The Existing Group trades across its estate under a variety of concepts including Embargo Republica, Lola Lo, Sakura, Po Na Na, Fez Club, Lowlander, Dirty Blonde and Coalition. The Existing Group predominantly targets a customer base of sophisticated students midweek and stylish over-21s and professionals at weekends.

The Existing Group focuses on delivering added value to its customers, with premium product ranges, high quality music and entertainment and a commitment to exceptional service standards. Eclectic's estate is nationwide across key university cities and towns which provide a vibrant night time economy and the demographics to support premium bars.

In November 2014, the Company announced that its business had faced difficult trading conditions in a number of areas, including changes in student behaviour, intense competition in a number of the Existing Group's key trading towns, and disappointing trading in two of the Existing Group's sites. These challenging market conditions have continued and the Existing Group has responded by reducing costs at the head office, closing non-profitable nights, focussing on development of its food offering and rationalising its estate.

Trading for the first half of the financial year to June 2016 was in-line with the Board's expectations.  The Existing Group had revenue on continuing operations for the 26 week period ended 27 December 2015 of £10.72 million (2014: £12.12 million), and Existing Group EBITDA before highlighted items of £0.96 million (2014: £1.10 million). Profit before tax and highlighted items for the same period was £0.30 million (2014: £0.01 million), and earnings per share (basic and diluted) was 1.8 pence per share (2014: loss per share of 4.0 pence).

The Existing Group expects to receive a full year benefit from the effect of cost savings already delivered, both at the head office and at site level, and will continue to dispose of smaller, non-viable sites where the opportunity arises. The Board expects trading to continue to be in-line with management expectations through the second half of the financial year as the Existing Group continues to execute its strategy. Whilst the Existing Group will continue to be cash generative, it is anticipated that the overall trading result will be similar to the previous financial year.

5. Strategy of the Enlarged Group

The Directors believe that the Acquisition represents the first stage in the next phase of the Company's development. The Enlarged Group's strategy will be to utilise the skillsets of the Directors and the Proposed Directors to create a growth company operating across a diverse portfolio of experiential leisure and entertainment assets in the UK. The Enlarged Group will aim to achieve this objective by way of organic revenue growth across the whole estate, and also active pursuit of future potential strategic acquisitions of experiential leisure and entertainment destinations that could enhance the Enlarged Group's portfolio and could enable the Enlarged Group to realise synergies by leveraging scale. It is the Board's longer-term strategy to position the Company as a consolidator within this sector.

The Board proposes that PierCo will be integrated as a standalone division in the Enlarged Group, with a key part of the integration plan being to identify and deliver the benefits of the potential synergies and development opportunities that the Board's initial analysis has identified. Development opportunities for the PierCo business include planned improvements to the catering and hospitality offering on the Pier, potentially seeking to bring in-house certain food kiosk concessions from vendors, and the development of more family-friendly attractions such as a soft play area. The Board is also developing a plan to gather more customer and visitor information. Historically, the Pier's management team has delivered strong returns on investment and uplift in EBITDA from enhancement capital expenditure.

The Board continues to focus on providing quality service and delivery in respect of the Existing Group's sites, whilst also continuing to rationalise the Existing Group's estate, seeking to dispose of underperforming sites, and reduce costs.

6. Board of Directors and Proposed Directors

Directors

The Board is currently comprised of Luke Johnson as Executive Chairman, Reuben Harley as Chief Executive Officer, John Smith as Chief Financial Officer, Leigh Nicolson as Chief Operating Officer, James Fallon as Non-Executive Director and Paul Viner as Non-Executive Director.

Reuben Harley has informed the Board that he intends to step down from his role as Chief Executive Officer with effect from 31 May 2016 to pursue his current business interests outside of Eclectic and other opportunities following the completion of the Acquisition. Reuben has been instrumental in driving the business over the last ten years, taking it from a private company through to its admission to AIM. More recently, he has overseen the return of the business of the Existing Group to profitability amidst challenging trading conditions. He will lead an orderly handover of the business of the Existing Group to the current Chief Operating Officer, Leigh Nicolson over the coming months.

Proposed Directors

Anne Martin and Joseph Tager will be appointed as Executive Director and Non-Executive Director, respectively, at Admission.

The biographical details of the Proposed Directors are set out below:

Anne Elizabeth Martin (formerly Anne Elizabeth Grainger, born Anne Elizabeth Fulcher) (aged 58) - Proposed Managing Director, Pier

Anne is the current General Manager of PierCo, a position she has held for over 12 years. Prior to this, Anne was the Operations Director for Bourne Leisure Limited, a group of holiday parks, where she was responsible for all park entertainment programmes and for all retail shops across a 57-site estate. Anne was previously the first female Area Director at Welcome Break, a position she held for over four years, managing a large service area and coordinating national training initiatives during periods of expansion for that company.

A service agreement dated 8 April 2016 has been entered into between the Company and Anne Martin pursuant to which Anne Martin is employed as an executive director of the Company with effect from Admission, terminable by either party on 12 months' written notice, at a salary (subject to annual review) of £125,000 per annum and other benefits commensurate with her position, including permanent health insurance, life assurance, a contribution to company car and a contribution of 1 per cent. of base salary towards pension fund.

Joseph Peter Tager (aged 35) - Proposed Non-Executive Director

Joseph began his career at PricewaterhouseCoopers in the Business Restructuring Group, qualifying as an accountant in 2006. The majority of time was spent assisting on large corporate insolvencies (including Enron and Sea Containers) and independent reviews on distressed businesses and public bodies. Joseph also spent six months seconded to PwC New York, working for Transactional Services across the US, with a focus on private equity transactions for Apollo Group. He later joined Bread Limited and Gail's bakery chain in 2007, where he was recruited to find acquisition opportunities, run new businesses and find new retail opportunities for Gail's. Joseph then left in 2010 to work as a Partner on Luke Johnson's personal investment portfolio, focusing primarily on the leisure and hospitality industry. Investments on which Joseph advises (and holds board positions) include Feng Sushi Restaurants, 3Sixty Restaurants, Genuine Dining Contract Caterers, Draft House Pubs, Grand Union Bars and Majestic Bingo Clubs.

A letter of appointment dated 8 April 2016 has been entered into pursuant to which Joseph Tager is appointed as a non-executive director of the Company with effect from Admission. The appointment is for an initial period of three years but is terminable by either party on three months' written notice to expire at any time. The letter of appointment provides a annual fee of £30,000.

7. Financing of the Acquisition and the Enlarged Group

The Company proposes to use the proceeds of the Placing receivable by the Company, together with new debt financing, to satisfy the cash consideration of approximately £18 million payable in respect of the Acquisition. The new conditional £13 million debt financing has been agreed with Barclays Bank plc, with which the Company has conditionally entered into a £12 million term loan facility and a new revolving credit facility of £1,000,000.

8. Terms of the Acquisition

As part of the Acquisition, it is proposed that:

(a)          Barclub (Marylebone) Limited, a special purpose vehicle wholly owned by Eclectic will acquire all the issued shares of PierCo under the Share Purchase Agreement;

(b)          Addbudget Limited (one of the Sellers), will give to the Company a standard set of warranties and tax indemnities under the Share Purchase Agreement and tax deed;

(c)           certain equipment used in the business of PierCo will be transferred from Repset Limited to Barclub (Drury Lane) Limited, a special purpose vehicle wholly owned by Eclectic, on completion of the Acquisition; and

(d)          the consideration for the sale and purchase of the shares of the Company under paragraph (a) above and the transfer of the equipment under paragraph (c) above will be £18,000,000, subject to various adjustments under the Share Purchase Agreement.

9. Details of the Placing

The Bookbuild will be launched immediately following this Announcement and will be conducted in accordance with the terms and conditions set out in Appendix I to this Announcement.  The timing of the closing of the book, pricing and allocations is at the absolute discretion of the Company, Panmure Gordon and Arden Partners.  The exact number of Placing Shares will be determined by the Company, Panmure Gordon and Arden Partners at the close of the Bookbuild.  Details of the number of New Ordinary Shares, Sale Shares and the Placing Price will be announced as soon as practicable after the closing of the Bookbuild process.

Certain of the Directors of the Company intend to subscribe for New Ordinary Shares in the Placing.  The extent of the Director participation will be announced following completion of the Bookbuild.

The New Ordinary Shares will be issued credited as fully paid and will, on issue, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions thereafter declared, made or paid on the Enlarged Share Capital.

The Placing, which is not underwritten, is conditional, inter alia, upon the Resolutions being duly passed at the General Meeting, the Share Purchase Agreement becoming unconditional in all respects, Admission becoming effective, the Placing Agreement not being terminated in accordance with its terms and the Selling Shareholder Agreement not being terminated in accordance with its terms.

By choosing to participate in the Placing and by making an oral and legally binding offer to acquire Placing Shares, investors will be deemed to have read and understood this Announcement in its entirety and to be making such offer on the terms and subject to the conditions in it, and to be providing the representations, warranties, acknowledgements and undertakings contained in Appendix I to this Announcement.

10. Dividend Policy

The Company does not intend to pay a dividend in the near term. The Board will continue to review the Company's dividend policy on a regular basis.

11. Share Options

Following the announcement of the Placing Price, expected to be later today, the Company will issue Options over 293,417 Ordinary Shares to employees of the Existing Group at the Placing Price under the Share Option Plan.

Following the announcement of the Placing Price, expected to be later today, it is intended that the Company will, conditional upon Admission, issue options over a number of Ordinary Shares equivalent to £125,000 at the Placing Price to Anne Martin, and Options over 40,625 Ordinary Shares at the Placing Price to Joseph Tager.

12. General Meeting

A notice convening the General Meeting to be held at Panmure Gordon's registered offices at One New Change, London, EC4M 9AF at 10.00 a.m. on 26 April 2016 will be set out at the end of the Admission Document. The full terms of the Resolutions will be set out in that notice and are summarised below:

·     The Acquisition constitutes a 'reverse takeover' under the AIM Rules for Companies by virtue of the size of PierCo relative to the Company and is therefore subject to the approval of Shareholders. Such approval is being sought by way of Resolution 1 to be proposed at the General Meeting.

·     Resolution 2 will seek approval for the Directors to allot the New Ordinary Shares.

·     Resolution 3 will seek approval for to disapply pre-emption rights.

·     Resolution 4 will seek approval for the proposed change of name of the Company.

If Resolution 4 is passed, the share certificates held by the existing Shareholders will continue to be valid, notwithstanding the change of name.

13. Irrevocable undertakings

The Directors have given irrevocable undertakings to the Company to vote in favour of the Resolutions (and to procure that such action is taken by the relevant registered holders) in respect of their beneficial holdings totalling 6,827,505 Existing Ordinary Shares, representing approximately 42.1 per cent. of the Existing Share Capital.

14. Recommendation

The Directors consider the Acquisition and the Placing to be in the best interests of the Company and Shareholders as a whole. Accordingly, the Directors intend to recommend that Shareholders vote in favour of the Resolutions, as they have irrevocably committed to do in respect of the Resolutions in respect of their beneficial holdings amounting, in aggregate, to 6,827,505 Existing Ordinary Shares, representing approximately 42.1 per cent. of the Existing Share Capital.

15. Expected timetable of principal events

Publication of Admission Document	8 April 2016
Latest time and date for lodging forms of proxy for the Eclectic General Meeting	10.00 a.m. on 22 April 2016
General Meeting	10.00 a.m. on 26 April 2016
Cancellation of trading on AIM of the Existing Ordinary Shares	7.00 a.m. on 27 April 2016*
Expected date of Admission and commencement of dealings in the Enlarged Share Capital on AIM	8.00 a.m. on or around 27 April 2016*
Completion of Acquisition	on or around 27 April 2016*
Expected date for CREST accounts to be credited (where applicable)	8.00 a.m. on or around 27 April 2016*
Despatch of definitive share certificates (where applicable)	by 11 May 2016

*these dates may be subject to change, which will be notified on a Regulatory Information Service.

RISK FACTORS

An investment in the Ordinary Shares is subject to a number of risks and uncertainties. Accordingly, in evaluating whether to make an investment in the Ordinary Shares potential investors should consider carefully all of the information set out in this Announcement and the risks attaching to an investment in the Ordinary Shares, including (but not limited to) the risk factors described below, before making any investment decision with respect to the Ordinary Shares. The risk factors described below do not purport to be an exhaustive list and do not necessarily comprise all of the risks to which the Enlarged Group is exposed or all those associated with an investment in the Ordinary Shares. In particular, the Enlarged Group's performance is likely to be affected by changes in market and/or economic conditions and in legal, accounting, regulatory and tax requirements. The risk factors described below are not intended to be presented in any assumed order of priority. Additional risks and uncertainties not presently known to the Directors or which the Directors currently deem immaterial, may also have an adverse effect upon the Enlarged Group. If any of the following risks were to materialise, the Enlarged Group's business, financial condition, results, prospects and/or future operations may be materially adversely affected. In such case, the value of the Ordinary Shares may decline and an investor may lose all or part of his investment.

GENERAL RISKS

An investment in the Enlarged Group is only suitable for investors capable of evaluating the risks and merits of such investment and who have sufficient resources to bear any loss that may result from the investment. A prospective investor should consider with care whether an investment in the Enlarged Group is suitable for him in the light of his personal circumstances and the financial resources available to him. The investment opportunity offered in this Announcement may not be suitable for all readers of this Announcement. Investors are therefore strongly recommended to consult an investment adviser authorised under the FSMA, or such other similar body in their jurisdiction, who specialises in advising on investments of this nature before making their decisions to invest.

Investment in the Enlarged Group should not be regarded as short-term in nature. There can be no guarantee that any appreciation in the value of the Enlarged Group's investments will occur or that the commercial objectives of the Enlarged Group will be achieved. Investors may not get back the full or any amount initially invested.

RISKS RELATING TO PIERCO

The Brighton Pier business is exposed to the risk of catastrophic events

Brighton Pier is exposed to the risk of storm damage, fire damage and other similar perils (such as other severe weather conditions, significant power interruptions, and structural failures). These events may result in the total or partial destruction, or temporary or permanent closure, of the Pier, or cause the temporary or permanent cessation of operations of some or all of the attractions on the Pier, which could have a material adverse effect on the Enlarged Group's business, prospects, financial condition or results of operations.

Additionally, there can be no assurance that the Enlarged Group would seek to or receive approval to rebuild, restore or otherwise repair any damage to the Pier, or that visitor volumes could be restored to levels experienced prior to the occurrence of such event. While the Enlarged Group has insurance cover designed to mitigate the financial impact of some of these events, such insurance cover is subject to exclusions, exceptions, deductibles and limits on liability which mean that it may not reimburse in whole or part any resulting loss to the Enlarged Group.

Risks relating to the structural integrity of Brighton Pier

Brighton Pier requires significant maintenance capital expenditure on an annual basis, to meet its high standards of structural integrity and safety. A substructure survey is undertaken by HOP, a specialist pier surveyor, on an annual basis; and a further underwater substructure survey of the Pier is conducted by HOP once every five-to-six years by specialist divers (the last such underwater substructure survey having been carried out in May 2010, and the next due to be carried out in summer 2016). Should future structural surveys recommend significant unexpected structure repairs, the Enlarged Group may have to incur substantial unplanned capital expenditure, which could have a material adverse effect on its business, prospects, financial condition or results of operations.

The Brighton Pier business is seasonal in nature and may be negatively affected by unfavourable weather conditions

Due to the seasonal nature of the Brighton Pier business, inclement weather (or other adverse environmental conditions that may arise) during the Pier's peak operating months may have a greater negative impact on visitor volumes at the Pier than at other times. In addition, because weekend days are typically peak days for visitor volumes at the Pier, inclement weather (or other adverse environmental conditions that may arise) on weekends can have a greater negative impact on visitor volumes at the Pier than on weekdays.

A significant reduction in visitor volumes at the Pier due to unfavourable weather or other environmental conditions could have a material adverse effect on the Enlarged Group's business, prospects, financial condition or results of operations.

The Enlarged Group is exposed to the risk of health and safety incidents

Despite the health and safety measures that the Pier business has imposed, the Pier business is exposed to the risk of personal injury and other safety incidents, including health concerns such as instances of food-borne illnesses at the Group's restaurants. Any accident or other safety incident involving harm to any persons or damage to property or assets (or the public perception of risk thereof) could expose the Enlarged Group to financial risk, including personal injury and other liability claims and criminal proceedings. In addition, rides and attractions at the Pier could be subject to temporary or permanent cessation of operations as a result of mechanical or technical faults. The occurrence of any such accident, other safety incident or material stoppage could have a material adverse effect on the Enlarged Group's business, prospects, financial condition or results of operations.

The Brighton Pier business is partly dependent on tourism

Visitor volumes at the Pier are partly dependent on the tourism industry, both domestic tourists in the UK and overseas tourists. The tourism industry is influenced by a number of external factors beyond the Enlarged Group's control, any of which may affect the number of tourists visiting the Pier. Such factors include the general state of the global economy and the regional economies of Brighton and London and a potential tourist's home country, reliance on tour operators, Pound Sterling exchange rates and international and regional geopolitical landscapes (including any actual, attempted or threatened terrorist activity). There can be no assurance that in the future the number of tourist visitors to the Pier will match current levels or that any decline in overseas tourists will be wholly or partly offset by any 'staycation' effect. A significant reduction in the number of tourist visitors to the Attractions could have a material adverse effect on the Enlarged Group's business, prospects, financial condition and results of operations.

The Enlarged Group's insurance coverage may not be adequate to cover all possible losses that it could suffer in respect of Brighton Pier

While the Enlarged Group will seek to maintain comprehensive insurance coverage at commercially reasonable rates to cover certain risks associated with Brighton Pier, its insurance policies may not cover all types of losses and liabilities and subject to limits and excesses. Any shortfall in coverage could have a material adverse effect on the Enlarged Group's business, prospects, financial condition or results of operations. There can be no assurance that the Enlarged Group's insurance in respect of Brighton Pier will be sufficient to cover the full extent of all losses or liabilities for which it is insured and the Enlarged Group cannot guarantee that it will be able to renew its current insurance policies on favourable terms, or at all. In addition, if the Enlarged Group or other visitor attraction operators sustain significant losses or make significant insurance claims, then the Enlarged Group's ability to obtain future insurance coverage at commercially reasonable rates could be materially adversely affected.

The operation and development of the Pier may be subject to planning and other consents, laws and regulations

The operation, potential development and upgrade of rides and other attractions on the Pier and the possible addition of new rides or other attractions may require consent from the relevant local and national planning authorities as well as from third parties, such as finance providers and regulatory bodies. There can be no assurance that the requisite planning or other consents can be obtained by the Enlarged Group as and when required in respect of developments or redevelopments or the roll-out of new rides or other attractions or that they will not be withdrawn in relation to existing offerings at the Pier.

Any refusal or delay in the granting of planning or other consents for the Pier or the application of any special conditions to such consents (or breach by the Enlarged Group of such conditions) could have a material adverse effect on the Enlarged Group's business, prospects, financial condition and results of operations.

The Brighton Pier business is also subject to numerous other laws and licensing and authorisation regimes, regulating a number of operating issues relevant to the Enlarged Group, including health and safety procedures, equipment specifications, employment requirements and environmental laws and regulations. These laws and regimes are constantly subject to change and there can be no assurance that any or all of the relevant regulatory and licensing and authorisation frameworks will not become more restrictive in the future. The impact of, and costs associated with, complying with changes in interpretation of existing, or the adoption of new, legislation, regulations or other laws or licensing and authorisation regimes, can be difficult to anticipate or estimate and could have a material adverse effect on the Pier's business, prospects, financial condition and results of operations.

Revocation, change of terms or sanctions in relation to the Pier's gambling licence

The Pier currently holds, and remains dependent upon, gambling licences in relation to its gaming-related machines. Failure to comply with the terms of the Pier's existing or future gambling licences may lead to penalties, sanctions or ultimately the revocation of relevant operating licences, which could adversely affect the Pier's trading in respect of gaming machines. In addition, any penalties and sanctions imposed by a regulator could create negative publicity for the Enlarged Group, which may affect its reputation and deter future customers from attending the Pier, which could have a negative impact on the financial performance of the Enlarged Group.

Risk relating to the Acquisition

Completion of the Acquisition is subject to the satisfaction (or waiver) of a number of conditions contained in the Share Purchase Agreement including the approval of the Acquisition by the Shareholders at the General Meeting and Admission. If Shareholders do not approve the Acquisition at the General Meeting, the Acquisition will not complete.

PierCo is a statutory company

PierCo is a statutory company incorporated under the Brighton Palace and Pier Act 1888 (the "Pier Act"). PierCo is not governed by the Companies Act and does not have Articles of Association but rather its constitution is governed by the Pier Act and subsequent amending legislation (the "Constituent Legislation"). The Constituent Legislation is in some ways inconsistent with modern company law, and does not contain power and authorities that cover many situations. The Constituent Legislation cannot be changed by shareholders resolution but requires a parliamentary and/or administrative procedure which could be prohibitively expensive and time consuming if a change in the Constituent Legislation is required. There is a risk that PierCo may not, in certain circumstances, have the desired flexibility under the Constituent Legislation.

In due diligence the Company has found that the historic records of PierCo in relation to the Constituent Legislation have been lacking. It is clear that in certain historic circumstances PierCo has not complied with the letter of the Constituent Legislation.

RISKS RELATING TO THE ENLARGED GROUP

Changing consumer habits and confidence

The Enlarged Group's financial results can be materially impacted by any material change in consumer habits within the United Kingdom. Examples of changes in consumer habits that may impact the Enlarged Group's financial performance include the increasing breadth of choice of leisure amenities in the United Kingdom; in relation to PierCo in particular, this includes the trend of 'staycations' and the attraction of shorter holiday trips and the evolving generational habits of spending leisure and recreational time available; and in relation to the Existing Group's business in particular, this includes the increasing emphasis on healthier lifestyles and the corresponding reduction in alcohol consumption), the change in students' and young adults' habits with regards to time spent for social activities, and the on-trade/off-trade consumption of alcohol. Changes in consumer tastes and demographic trends may also affect the appeal of the Enlarged Group's sites and venues to consumers, especially if the Enlarged Group does not anticipate, identify and respond to such changes by evolving its venues, attractions, brands, formats and offerings adequately and sufficiently promptly, which could have a negative impact on the Enlarged Group's financial performance.

The Enlarged Group's business is also subject to general economic conditions in the United Kingdom. In particular, the revenue and results of the Enlarged Group are affected by the level of consumer confidence and expenditure on leisure activities. Economic factors such as rising interest rates, declining wages, higher unemployment, tax increases, declining inbound tourism, lack of consumer credit and falling house prices could all adversely affect the level of consumer confidence, which could have a significant effect on the level of spending by the Enlarged Group's customers.

The integration of PierCo may give rise to challenges, and the Enlarged Group could suffer financial consequences while management is working on the integration process

The Enlarged Group's success will depend upon the Director's ability to integrate PierCo without disruption to the Existing Group's business. The management team will be required to commit time towards achieving the integration of PierCo and the Existing Group's businesses, and this may affect or impair its ability to run the business of the Enlarged Group effectively. Integration may prove more difficult than currently anticipated by the Directors and Proposed Directors, or take longer than expected, thereby posing a risk to the Enlarged Group's profitability, and the costs to achieve this integration may also be greater than expected, any of which could have a material adverse effect on the Enlarged Group's business, financial condition and/or results of operations.

Growth and expansion may strain the Enlarged Group's managerial, operational and control systems and the Enlarged Group may encounter difficulty obtaining personnel and other resources to adequately develop these systems further

The development and establishment or acquisition of additional leisure and entertainment venues may raise unanticipated operational or control risks. Management of growth through newly developed or acquired venues will require, among other things:

·     implementation of financial and management controls and information technology systems in newly established or acquired assets;

·     integration of business culture and adoption of policies and best practices;

·     increased marketing activities; and

·     identifying, hiring and training new qualified personnel.

The operating complexity of the Enlarged Group's business and the responsibilities of the Enlarged Group's management are likely to increase as a result of this growth, placing significant strain on the Enlarged Group's managerial, operational and control systems. In view of the Enlarged Group's growth strategy, the Enlarged Group's management will need to continue to integrate the Enlarged Group's operational and financial systems and managerial controls and procedures to keep pace with the Enlarged Group's growth. The Enlarged Group's management will also have to maintain close coordination among the Enlarged Group's accounting, finance and asset management personnel.

The Enlarged Group's inability to successfully manage the impact of growth on the Enlarged Group's operational and managerial resources and control systems could have a material adverse effect on the Enlarged Group's business, financial condition and results of operations. Moreover, there can be no assurance that the Enlarged Group will be able to achieve operating results for its existing or future sites or venues comparable to the historical operating results of the Enlarged Group's existing sites or venues.

As the Enlarged Group's operations expand and additional growth opportunities are sought, the Enlarged Group's internal controls in particular will need to adapt and respond to the growing demands of the Enlarged Group's business activities. The Enlarged Group's management is continuing to evaluate the need for additional staff and other resources in the area of internal controls. However, there can be no assurance that any such efforts will not disrupt the controls system the Enlarged Group currently has. Effective internal controls are necessary for the Enlarged Group to produce reliable financial reports and are important to help prevent fraud. As a result, if the Enlarged Group fails to achieve and maintain effective internal controls over cash management and financial reporting as the Enlarged Group's businesses grow, this could result in the loss of investor confidence in the reliability of the Enlarged Group's financial statements, which in turn could harm the Enlarged Group's business, financial condition and results of operations and negatively impact the trading price of the Ordinary Shares.

Increases in the UK national minimum wage and the introduction of the living wage could affect the Enlarged Group's operating costs

In October 2015, the national minimum wage rose to £6.70 an hour for people aged 21 and over, and £5.30 for people aged 18 to 20. Because a significant proportion of the Enlarged Group's employees are paid the national minimum wage, any further increase in the minimum wage, or its scope, would increase the Enlarged Group's operating and employment costs and, in turn, could have a material adverse effect on its operating results, financial condition and prospects. From April 2016, the national living wage will be introduced, amounting to £7.20 an hour for people aged 25 and older. While a less significant proportion of the Enlarged Group's employees would be applicable for the national living wage, the introduction of, and any further increase in, the national living wage will increase the Enlarged Group's operating and employment costs and, in turn, could have a material adverse effect on its operating results, financial condition and prospects.

Health and Safety regulation

The Enlarged Group is subject to regulation in health and safety and fire safety. Whilst the Enlarged Group believes it has appropriate policies and procedures in place, these may need to adapt which may require additional expenditure. Furthermore, in order to ensure the Enlarged Group's sites and venues remain fully compliant with legislative requirements there will always be the need to maintain premises, not only generally but if an ad hoc issue arises, which again could require capital expenditure.

Dependence on key executives and personnel

The Enlarged Group has a relatively small senior management team and the loss of any key individual or the inability to attract appropriate personnel could impact upon the Enlarged Group's future performance.

Tax risk

Any change in the Enlarged Group's tax status or in taxation legislation in the UK could affect the Enlarged Group's ability to provide returns to Shareholders. Statements concerning the taxation of investors in shares are based on current law and practice, which is subject to change. The taxation of an investment in the Enlarged Group depends on the individual circumstances of investors.

Asbestos at the Enlarged Group's premises

Some of the Enlarged Group's premises contain asbestos but the Existing Group complies with its legal obligations with regard to those sites affected and has in place appropriate management plans to monitor and maintain the safe condition of the asbestos. Should the asbestos require removal in the future there would be costs associated with that.

RISKS RELATING TO THE EXISTING GROUP AND ITS BUSINESS

Competition to the Existing Group's business

The sector in which the Existing Group's business operates is competitive and there can be no certainty that it will be able to achieve the market penetration it seeks. There can be no guarantee that the Existing Group's current competitors or new entrants to the market will not appeal to a wider proportion of the Existing Group's target market, command broader brand awareness or achieve greater brand loyalty. In each case, such competing companies may have greater financial and marketing resources than the Enlarged Group. Even if the Enlarged Group is able to compete successfully, it may be forced to make changes in one or more of the Existing Group's bar concepts in order to respond to changes in consumer tastes which may impact negatively on the Enlarged Group's financial performance.

Consumer perceptions and public attitudes towards the consumption of alcohol may continue to change

In the United Kingdom, consumption of alcoholic beverages has become the subject of considerable social and political attention in recent years due to increasing public concern over adverse health consequences associated with the misuse of alcohol (including alcoholism) and alcohol-related social problems (including drink-driving, binge drinking and under-age drinking). Changes in consumer tastes in both food and drink may adversely affect the appeal of the Enlarged Group's bars to consumers, especially if the Enlarged Group does not anticipate, identify and respond to such changes by evolving its brands, formats, offerings and premises. This, in turn, would have an adverse effect on the Enlarged Group's operating results, financial condition and prospects.

In addition, any increased focus on the potentially harmful effects of alcohol, such as a public service advertising campaign by the UK government, might reduce sales of alcoholic beverages and therefore negatively affect the Enlarged Group's operating results, financial condition and prospects.

The Existing Group's business is dependent on key sites

The Existing Group's business performance is partly dependant on a number of key sites, in particular the Fez Club (Putney), Embargo Republica and Lola Lo (Cambridge). While the Enlarged Group's expansion continues to diversify these sites' significance to the Enlarged Group's overall trading results, if the Enlarged Group suffered a loss of licence at either of these sites, which resulted in the site(s) to cease operating, then this may have an adverse material effect on the Enlarged Group's profitability.

The Enlarged Group may encounter difficulty disposing of certain of the Existing Group's underperforming sites on terms acceptable to the Enlarged Group

In continuing to rationalise the Existing Group's bar estate, the Board intends to dispose of underperforming and closed sites. Such sites may be trading unprofitably, may be failing to provide the quality service the Enlarged Group aims to deliver, or may not be producing the required return on capital desired. The Enlarged Group may not be able to achieve terms acceptable to dispose of the underperforming sites, or may have to accept such undesirable terms to meet this strategy. Furthermore, the Enlarged Group may have to incur exceptional costs relating to the disposals, which will adversely affect the Enlarged Group's financial condition and results of operations.

The refurbishment and development of the Existing Group's estate may not deliver the financial returns expected by the Enlarged Group

The Enlarged Group intends to evaluate refurbishment and development opportunities on the Existing Group's estate where it feels opportunities may arise, in particular, to invest in its food offering and/or introduce new activity-based leisure facilities. While the Enlarged Group's management has experience in opening and operating such leisure venues and bar offerings, the Existing Group has minimal trading experience in providing such offerings. As such, it is possible that each site with such an offering may take some time from its re-opening date to reach profitable operating levels due to teething inefficiencies typically associated with newly developed sites, including lack of awareness, competition, the need to hire and train sufficient staff and other factors.

The success of the any planned renovation or development will depend on numerous factors, many of which are beyond the Company's control, including the ability to secure all necessary planning and operating approvals in a timely manner; the extent of the competition for the re-developed sites' new offering; the ability to complete the refurbishment and development at an economic cost; delays in the timely refurbishment and development of these sites and general economic conditions. Any of the above factors could cause the newly refurbished or redeveloped venue to trade below the Enlarged Group's expectations, which could adversely affect the Enlarged Group's business, financial condition and results of operations.

Integration of any new bar sites may be difficult and may adversely affect the Enlarged Group's business, financial condition and results of operations

The success of any bar site acquisition will depend, in part, on the Enlarged Group's ability to realise the anticipated benefits from integrating acquired sites with the Existing Group's existing operations. For instance, the Enlarged Group may develop or acquire new sites in geographic areas in which the Enlarged Group's management may have little or no operating experience and in which potential customers may not be familiar with the brands of the Existing Group. These sites may attract fewer customers than the Existing Group's other operating bar sites, while at the same time the Enlarged Group may incur substantial additional costs with these new sites. As a result, the Enlarged Group's results of operations at acquired sites may be inferior to those of the Existing Group's other operating bar sites. Unanticipated expenses and insufficient demand at a new site, therefore, could adversely affect the Enlarged Group's business. The Enlarged Group's success in realising anticipated benefits and the timing of this realisation depend upon the successful integration of the operations of the acquired site. This integration is a complex, costly and time-consuming process. The difficulties of combining acquired or newly developed sites with the Enlarged Group's existing operations include, among others:

·     integrating information systems;

·     preserving the important licensing, distribution, marketing, customer, employment and other relationships of the acquired site and obtaining new relationships, as required; and

·     successfully re-branding sites, if required.

The Enlarged Group may not accomplish the integration of acquired or newly developed sites smoothly or successfully. The diversion of the attention of the Enlarged Group's management from its existing operations to integration efforts and any difficulties encountered in combining operations could prevent it from realising the anticipated benefits from the acquisition or development and could adversely affect the Enlarged Group's business, financial condition and results of operations.

The bar industry in the United Kingdom is highly regulated and all such operations require licences, permits and approvals

The Existing Group's bars are subject to laws and regulations that affect their operations, including in relation to employment, minimum wages, premises and personal licenses, alcoholic drinks control, entertainment licences, competition, sanitation and data protection. These laws and regulations impose a significant administrative burden on the Existing Group's business, as managers have to devote significant time to compliance with these requirements and therefore have less time to dedicate to the business. If additional or more stringent requirements were to be imposed in the future, it would increase this burden, which could adversely affect the Enlarged Group's operating results (as a result of increased costs or lower revenues) and, in turn, adversely affect the Enlarged Group's financial condition and prospects. If the Enlarged Group were not unable to comply with additional regulatory requirement, or compliance became uneconomic, the Enlarged Group may change its bar operations, for example, having shorter opening hours at its bars, and such changes may adversely affect the Enlarged Group's financial performance.

The Enlarged Group may experience delays and failures in obtaining and retaining required licences, permits and approvals

Each of the Existing Group's existing, and any of the Enlarged Group's planned future, bars is, or will need to be, licensed to permit, among other things, the sale of alcoholic drinks. Difficulties or failures in obtaining or maintaining required licences or approvals could delay or prohibit the operation of the Enlarged Group's bars. If any of the Enlarged Group's licences were withdrawn or amended, the profitability of the affected bars would be adversely affected and this, in turn, may have an adverse effect on the Enlarged Group's operating results, financial condition and prospects. Licensing requirements which affect the Enlarged Group's bars are subject to change, and additional or more stringent requirements may be imposed on the Enlarged Group's bar operations in the future. This may reduce the ability of the Enlarged Group's bars to sell alcoholic drinks, which could have an adverse effect on the Enlarged Group's operating results, financial condition and prospects.

Incidents involving the abuse of alcohol, use of illegal drugs and violence

Incidents involving the abuse of alcohol, use of illegal drugs and violence on the Enlarged Group's bar premises may continue to occur or may increase in frequency. Such activity may directly interrupt the operations of the Enlarged Group and could also result in adverse publicity, litigation, regulatory action or loss of licence, any of which could adversely affect the Enlarged Group's operating results, financial condition and prospects.

RISKS RELATING TO THE ORDINARY SHARES

Trading market for the Ordinary Shares

The share price of publicly-traded companies, including those listed on AIM, can be highly volatile and shareholdings illiquid. The price at which the Ordinary Shares will be quoted and the price which investors may realise for their shares will be influenced by a large number of factors, which could include, but are not limited to, the performance of both the Enlarged Group's and its competitors' businesses, variations in the operating results of the Enlarged Group, divergence in financial results from analysts' expectations, changes in earnings estimates by stock market analysts, large purchases or sales of Ordinary Shares, legislative changes and general economic, political and regulatory conditions. Prospective investors should be aware that the value of an investment in the Enlarged Group and the income derived from it may go down as well as up. Investors may therefore realise less than, or lose all of, their investment. The volume of shares traded on AIM can be limited and this may restrict the ability of Shareholders to dispose of Ordinary Shares at any particular time. It may be more difficult for an investor to realise his investment in the Enlarged Group than in a company whose shares are quoted on the Official List. The AIM Rules for Companies are less demanding than those of the Official List. It is emphasised that no application is being made for the admission of the Enlarged Group's securities to the Official List.

Substantial sales of Ordinary Shares

There can be no assurance that certain Directors will not elect to sell their Ordinary Shares following the expiry of the lock-in period or otherwise. Similarly, other significant Shareholders could dispose of Ordinary Shares at any time. The market price of Ordinary Shares could decline as a result of any such sales of Ordinary Shares or as a result of the perception that these sales may occur. In addition, if these or any other sales were to occur, the Enlarged Group may in the future have difficulty in offering Ordinary Shares at a time or at a price it deems appropriate.

Additional capital and dilution

The Directors do not currently anticipate that the Enlarged Group will require additional capital to further its strategy as outlined in this Announcement. Nevertheless, it is possible that the Enlarged Group will need or choose to raise extra capital in the future to finance the development of new products or enhancements, to develop fully the Enlarged Group's business, to take advantage of acquisition opportunities or respond to new competitive pressures. If the Enlarged Group is unable to obtain this financing on terms acceptable to it then it may be forced to curtail its development. If additional funds are raised through the issue of new equity or equity-linked securities of Eclectic other than on a pro rata basis to existing Shareholders, the percentage ownership of such Shareholders may be substantially diluted. The costs and timing implications of a pro rata issue of equity securities are likely to lead to further issues of equity being done on a non-pre-emptive basis. There is no guarantee that the then prevailing market conditions will allow for such a fundraising or that new investors will be prepared to subscribe for Ordinary Shares at the same price as the Placing Price or higher.

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

The Enlarged Group 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 Enlarged Group 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 on AIM could decline.

APPENDIX I - TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE PLACING.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING.  THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN (TOGETHER, THIS "ANNOUNCEMENT") ARE DIRECTED ONLY AT PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE: (1) IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA"), QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2.1(e) OF DIRECTIVE 2003/71/EC AS AMENDED, INCLUDING BY THE 2010 PROSPECTUS DIRECTIVE AMENDING DIRECTIVE (DIRECTIVE 2010/73/EC) AND TO THE EXTENT IMPLEMENTED IN THE RELEVANT MEMBER STATE (THE "PROSPECTUS DIRECTIVE"); (2) IF IN THE UNITED KINGDOM, ARE QUALIFIED INVESTORS AND (A) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER") (INVESTMENT PROFESSIONALS) OR (B) ARE PERSONS WHO FALL WITHIN ARTICLE 48 (CERTIFIED HIGH NET WORTH INDIVIDUALS) OR ARTICLE 49(2)(a) TO (d) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").

THIS ANNOUNCEMENT AND THE INFORMATION IN IT 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 ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.  THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN ECLECTIC BAR GROUP PLC.

THE CONTENT OF THIS ANNOUNCEMENT HAS NOT BEEN APPROVED BY AN AUTHORISED PERSON WITHIN THE MEANING OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (AS AMENDED). RELIANCE ON THIS ANNOUNCEMENT FOR THE PURPOSE OF ENGAGING IN ANY INVESTMENT ACTIVITY MAY EXPOSE AN INDIVIDUAL TO A SIGNIFICANT RISK OF LOSING ALL OF THE PROPERTY OR OTHER ASSETS INVESTED.

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 WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY, IN 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 ONLY OUTSIDE THE UNITED STATES IN "OFFSHORE TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE WITH, REGULATION S UNDER THE SECURITIES ACT AND OTHERWISE IN ACCORDANCE WITH APPLICABLE LAWS.  NO PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE IN THE UNITED STATES OR ELSEWHERE.

THIS ANNOUNCEMENT (INCLUDING THIS 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 OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

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

This Announcement or any part of it does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States (including its territories and possessions, any state of the United States and the District of Columbia), Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction in which the same would be unlawful.  No public offering of the Placing Shares is being made in any such jurisdiction.

All offers of the Placing Shares will be made pursuant to an exemption under the Prospectus Directive from the requirement to produce a prospectus.  In the United Kingdom, this Announcement is being directed solely at persons in circumstances in which section 21(1) of the Financial Services and Markets Act 2000 (as amended) (the "FSMA") does not apply.

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 a criminal offence in the United States.  The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada, no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; the relevant clearances have not been, and will not be, obtained for the South Africa Reserve Bank or any other applicable body in the Republic of South Africa in relation to the Placing Shares and the Placing Shares have not been, nor will they be, registered under or offering in compliance with the securities laws of any state, province or territory of Australia, Canada, Japan or the Republic of 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, Canada, Japan or the Republic of South Africa or any other jurisdiction outside the United Kingdom.

Persons (including, without limitation, nominees and trustees) who have a contractual right or other legal obligations to forward a copy of this Announcement should seek appropriate advice before taking any action.

This Announcement should be read in its entirety.  In particular, you should read and understand the information provided in the "Important Notices" section of this Announcement.

By participating in the Bookbuild and the Placing, each Placee will be deemed to have read and understood this Announcement in its entirety, to be participating, making an offer and acquiring Placing Shares on the terms and conditions contained herein and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in this Appendix.

In particular, each such Placee represents, warrants, undertakes, agrees and acknowledges (amongst other things) that:

1.            it is a Relevant Person and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;

2.            in the case of a Relevant Person in a member state of the EEA which has implemented the Prospectus Directive (each, a "Relevant Member State") who acquires any Placing Shares pursuant to the Placing:

(a)        it is a Qualified Investor within the meaning of Article 2(1)(E) of the Prospectus Directive; and

(b)        in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive:

(i)         the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than Qualified Investors or in circumstances in which the prior consent of the Joint Bookrunners has been given to the offer or resale; or

(ii)         where Placing Shares have been acquired by it on behalf of persons in any Relevant Member State other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Directive as having been made to such persons; and

3.            in the case of a Relevant Person in the UK who is not a Qualified Investor and who acquires any Placing Shares pursuant to the Placing, is a person who falls within Article 48 (certified high net worth individuals) or Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005; and

4.            it is acquiring the Placing Shares for its own account or is acquiring the Placing Shares for an account with respect to which it exercises sole investment discretion and has the authority to make and does make the representations, warranties, indemnities, acknowledgements, undertakings and agreements contained in this Announcement; and

5.            it understands (or if acting for the account of another person, such person has confirmed that such person understands) the resale and transfer restrictions set out in this Appendix; and

6.            except as otherwise permitted by the Company and subject to any available exemptions from applicable securities laws, it (and any account referred to in paragraph 5 above) is outside the United States acquiring the Placing Shares in offshore transactions as defined in and in accordance with Regulation S under the Securities Act.

No prospectus

No prospectus or other offering document has been or will be submitted to be approved by the FCA in relation to the Placing or the Placing Shares and Placees' commitments will be made solely on the basis of the information contained in this Announcement and any information publicly announced through a Regulatory Information Service (as defined in the AIM Rules for Companies) by or on behalf of the Company on or prior to the date of this Announcement (the "Publicly Available Information") and subject to any further terms set forth in the contract note to be sent to individual Placees.

Each Placee, by participating in the Placing, agrees that the content of this Announcement is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any information (other than the Publicity Available Information), representation, warranty or statement made by or on behalf of the Joint Bookrunners or the Company or any other person and none of the Joint Bookrunners, the Company nor any other person acting on such person's behalf nor any of their affiliates has or shall have any liability for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement.  Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing.  Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Details of the Placing Agreement, the Selling Shareholder Agreement and the Placing Shares

The Joint Bookrunners have today entered into a placing agreement (the "Placing Agreement") with the Company under which, on the terms and subject to the conditions set out in the Placing Agreement, the Joint Bookrunners, as agents for and on behalf of the Company, have agreed to use their respective reasonable endeavours to procure Placees for the New Ordinary Shares. The number of Placing Shares and the Placing Price will be determined following completion of the Bookbuild as set out in this Announcement and the Placing Agreement.

The New Ordinary Shares will, once issued, be subject to the articles of association of the Company and will be credited as fully paid and will rank pari passu in all respects with the existing issued Ordinary Shares , including the right to receive all dividends and other distributions declared, made or paid in respect of such Ordinary Shares after the date of issue of the New Ordinary Shares.

Arden Partners is today entering into the Selling Shareholder Agreement with the Selling Shareholder under which, on the terms and subject to the conditions set out in the Selling Shareholder Agreement, Arden Partners as agent for and on behalf of the Selling Shareholder, has agreed to use its reasonable endeavours to procure Placees for the Sale Shares.

As part of the Placing, the Company has agreed that it will not for a period of 90 days after (but including) Admission, directly or indirectly, issue, offer, sell, lend, pledge, contract to sell or issue, grant any option, right or warrant to purchase or otherwise dispose of any Ordinary Shares (or any interest therein or in respect thereof) or other securities of the Company exchangeable for, convertible into or representing the right to receive Ordinary Shares or any substantially similar securities or otherwise enter into any transaction (including derivative transaction) directly or indirectly, permanently or temporarily, to dispose of any Ordinary Shares or undertake any other transaction with the same economic effect as any of the foregoing or announce an offering of Ordinary Shares or any interest therein or to announce publicly any intention to enter into any transaction described above.  This agreement is subject to certain customary exceptions and does not prevent the grant or exercise of options under any of the Company's existing share incentives and share option schemes, or following Admission the issue by the Company of any Ordinary Shares upon the exercise of any right or option or the conversion of a security already in existence.

Application for admission to trading

Application will be made to the London Stock Exchange for admission of the New Ordinary Shares to trading on AIM.

It is expected that Admission will take place on or before 8.00 a.m. on 27 April 2016 and that dealings in the New Ordinary Shares on AIM will commence at the same time.

Bookbuild

The Joint Bookrunners will today commence an accelerated bookbuilding process in respect to the Placing (the "Bookbuild") to determine demand for participation in the Placing by Placees at the Placing Price. 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.

The Joint Bookrunners and the Company shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their sole discretion, determine.

Principal terms of Bookbuild and the Placing

1.            The Joint Bookrunners are acting as joint bookrunners to the Placing, as agents for and on behalf of the Company.

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

3.            The Bookbuild will establish a single price (the "Placing Price") payable to the Joint Bookrunners or as they may direct (as agents for the Company) by all Placees whose bids are successful.  The Placing Price and the number of Placing Shares which will be agreed between the Joint Bookrunners and the Company following completion of the Bookbuild. The Placing Price and the number of Placing Shares which have been placed at the Placing Price will be announced on a Regulatory Information Service following the completion of the Bookbuild (the "Placing Results Announcement").

4.            To bid in the Bookbuild, Placees should communicate their bid by telephone to their usual sales contact at one of the Joint Bookrunners.  Each bid should state the number of Placing Shares which the prospective Placee wishes to subscribe for at the Placing Price which is ultimately established by the Joint Bookrunners in agreement with the Company or at prices up to a price limit specified in its bid.  Bids may be scaled down by the Joint Bookrunners on the basis referred to paragraph 9 below.

5.            The Bookbuild is expected to close no later than 5.00 p.m. on 8 April 2016 but may be closed earlier or later at the discretion of the Joint Bookrunners.  The Joint Bookrunners may, in agreement with the Company, accept bids that are received after the Bookbuild has closed.  The Company reserves the right (upon agreement of the Bookrunners) to reduce or seek to increase the amount to be raised pursuant to the Placing, in its discretion.

6.            Each Placee's allocation will be confirmed to Placees orally, or by email, by the Joint Bookrunners (or any one of them) following the close of the Bookbuild and a trade confirmation or contract note will be dispatched as soon as possible thereafter.  A Joint Bookrunner's oral or emailed confirmation to such Placee will constitute an irrevocable legally binding commitment upon such person (who will at that point become a Placee) in favour of the Joint Bookrunners and the Company, under which it agrees to subscribe for 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.  Except with the Joint Bookrunners' consent, such commitment will not be capable of variation or revocation at the time at which it is submitted.

7.            The Company will release the Placing Results Announcement following the close of the Bookbuild detailing the aggregate number of the Placing Shares to be issued and the Placing Price at which such shares have been placed.

8.            Each Placee's allocation and commitment will be evidenced by a contract note issued to such Placee by the relevant Joint Bookrunner.  The terms of this Appendix will be deemed incorporated in that contract note.

9.            Subject to paragraphs 4, 5 and 6 above, the Joint Bookrunners may choose to accept bids, either in whole or in part, on the basis of allocations determined at their discretion (in agreement with the Company) and may scale down any bids for this purpose on such basis as it may determine. The Joint Bookrunners may also, notwithstanding paragraphs 4, 5 and 6 above, subject to the prior consent of the Company: (a) allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time; and (b) allocate Placing Shares after the Bookbuild has closed to any person submitting a bid after that time.

10.          A bid in the Bookbuild will be made on the terms and subject to the conditions in this Appendix and will be legally binding on the Placee on behalf of which it is made and except with the Joint Bookrunners' 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 the relevant Joint Bookrunner (as agent for the Company), to pay to it (or as it may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to acquire and the Company has agreed to allot and issue to that Placee and/or the Arden Partners has agreed to sell (as agent for the Selling Shareholder) to that Placee (as the case may be).  Each Placee's obligations will be owed to the Joint Bookrunners.

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

12.          Irrespective of the time at which a Placee's allocation(s) pursuant to the Placing is/are 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".

13.          All obligations under the Bookbuild 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 "Termination of the Placing".

14.          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.

15.          To the fullest extent permissible by law and applicable FCA rules, neither: (a) the Joint Bookrunners, (b) any of their respective affiliates, agents, directors, officers, consultants or employees nor (c) to the extent not contained within (a) or (b), any person connected with the Joint Bookrunners as defined in the FSMA ((b) and (c) being together "affiliates" and individually an "affiliate" of the Joint Bookrunners) shall have any liability (including to the extent permissible by law, any fiduciary duties) to Placees or to any other person whether acting on behalf of a Placee or otherwise.  In particular, neither the Joint Bookrunners nor any of their respective affiliates shall have any liability (including, to the extent permissible by law, any fiduciary duties) in respect of the Joint Bookrunners' conduct of the Bookbuild or of such alternative method of effecting the Placing as the Joint Bookrunners and the Company and the Selling Shareholder may agree.

Registration and Settlement

If Placees are allocated any Placing Shares in the Placing they will be sent a contract note or electronic confirmation which will confirm the number of Placing Shares allocated to them, the Placing Price and the aggregate amount owed by them to the relevant Joint Bookrunner.

Following the close of the Bookbuild, each Placee allocated Placing Shares in the Placing will be sent a trade confirmation or contract note in accordance with the standing arrangements in place with the relevant Joint Bookrunner, stating the number of Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee to the relevant Joint Bookrunner and settlement instructions.  Each Placee will be deemed to agree that it will do all things necessary to ensure that delivery and payment is completed as directed by the relevant Joint Bookrunner in accordance with either the standing CREST or certificated settlement instructions which they have in place with that Joint Bookrunner.

Settlement of transactions in the Placing Shares (ISIN: GB00BG49KW66) following Admission will take place within the CREST system, subject to certain exceptions.  Settlement through CREST will be on a T+3 basis unless otherwise notified by the Joint Bookrunners and is expected to occur on 27 April 2016 (the "Settlement Date") in accordance with the contract notes.  Settlement will be on a delivery versus payment basis or as otherwise agreed with certificated holders.  However, in the event of any difficulties or delays in the admission of the Placing Shares to CREST or the use of CREST in relation to the Placing, the Company and the Joint Bookrunners may agree that the Placing Shares should be issued in certificated form.  The Joint Bookrunners reserve the right to require settlement for the Placing Shares, and to deliver the Placing Shares to Placees, by such other means as they deem necessary if delivery or settlement to Placees is not practicable within the CREST system or would not be consistent with regulatory requirements in a Placee's jurisdiction.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above, in respect of either CREST or certificated deliveries, at the rate of 2 percentage points above prevailing base rate of Barclays Bank plc as determined by the Joint Bookrunners.

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

If Placing Shares are to be delivered to a custodian or settlement agent, Placees must ensure that, upon receipt, the conditional contract note 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 United Kingdom stamp duty or stamp duty reserve tax.  Placees will not be entitled to receive any fee or commission in connection with the Placing.

Conditions of the Placing

The Placing is conditional upon the Placing Agreement and the Selling Shareholder Agreement becoming unconditional and not having been terminated in accordance with their respective terms.

The obligations of the Joint Bookrunners under the Placing Agreement are, and the Placing is, conditional upon, inter alia:

(a)        none of the representations, warranties and undertakings on the part of the Company contained in the Placing Agreement being untrue or inaccurate on the date on which the Placing Agreement is signed or Admission, by reference to the facts and circumstances then subsisting;

(b)        the Company complying with its obligations under the Placing Agreement to the extent that they fall to be performed on or before Admission;

(c)        the Resolutions being duly passed at the General Meeting (or at any adjournment thereof);

(d)        the Share Purchase Agreement having become unconditional and not having been terminated in accordance with its terms;

(e)        the facility agreement between the Company and Barclays Bank plc having become unconditional in all respects (save in respect of any condition in relation to the Placing Agreement becoming unconditional and Admission) and any condition to be satisfied on completion of the Share Purchase Agreement provided that such conditions have been satisfied in escrow;

(f)         the Selling Shareholder Agreement having become unconditional and not having been terminated in accordance with its terms (save for any condition in relation to the Placing Agreement becoming unconditional);

(g)        the Company having allotted, subject only to Admission, the New Ordinary Shares in accordance with the Placing Agreement; and

(h)        Admission having become effective at or before 8.00 a.m. on 27 April 2016 or such later time being no later than 12 May 2016 as the Joint Bookrunners may agree with the Company;

(all conditions to the obligations of the Joint Bookrunners included in the Placing Agreement being together, the "conditions").

If any of the conditions set out in the Placing Agreement is not fulfilled or, where permitted, waived in accordance with the Placing Agreement within the stated time periods (or such later time and/or date as the Company and the Joint Bookrunners may agree), or the Placing Agreement is terminated in accordance with its terms, the Placing will lapse and the Placee's rights and obligations shall cease and terminate at such time and each Placee agrees that no claim can be made by or on behalf of the Placee (or any person on whose behalf the Placee is acting) in respect thereof.

The obligations of Arden under the Selling Shareholder Agreement are, and the Placing is, conditional upon:

(a)        the Placing Agreement having become unconditional and not having been terminated in accordance with its terms (save for any condition in relation to the Selling Shareholder Agreement becoming unconditional);

(b)        the Selling Shareholder complying with his obligations under the Selling Shareholder Agreement to the extent that they fall to be performed on or before Admission; and

(c)        Selling Shareholder Agreement not being terminated in accordance with its terms.

By participating in the Bookbuild, each Placee agrees that its rights and obligations cease and terminate only in the circumstances described above and under "Termination of the Placing" below and will not be capable of rescission or termination by it.

The Joint Bookrunners may, in their absolute discretion and upon such terms as they think fit, waive fulfilment of all or any of the conditions in the Placing Agreement in whole or in part, or extend the time provided for fulfilment of one or more the conditions, save that certain of the conditions including the condition relating to Admission referred to in paragraph (h) above may not be waived.  Any such extension or waiver will not affect Placees' commitments as set out in this Appendix.

The Joint Bookrunners may terminate the Placing Agreement in certain circumstances, details of which are set out below.

Neither the Joint Bookrunners nor any of their respective affiliates, agents, directors, officers or employees nor the Company 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 any of them may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision any of them may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the Joint Bookrunners.

Termination of the Placing

Each of the Joint Bookrunners may, in its absolute discretion, by notice to the Company or any director thereof, terminate the Placing Agreement at any time up to Admission if, inter alia:

(a)        it shall come to the attention to the Joint Bookrunners that any of the warranties given to them was untrue, inaccurate or misleading when made and/or any of the warranties have ceased to be true or accurate or has become misleading in each case by reference to the facts and circumstances subsisting at that time;

(d)        the Company has not complied or cannot comply with any of its obligations under the Placing Agreement or otherwise relating to the Placing and Admission;

(e)        there has, in the opinion of the Joint Bookrunners (acting in good faith), been a material adverse change;

(f)         it shall come to the attention to the Joint Bookrunners that any statement contained in this Announcement or any other document or announcement issued or published by or on behalf of the Company in connection with the Placing has become untrue, inaccurate or misleading or any matter has arisen which would, if this Announcement or such other documents were issued at that time, constitute a material omission from this Announcement or such other documents; or

(g)        in the opinion of the Joint Bookrunners (acting in good faith), there has been a force majeure event.

If the Placing Agreement is terminated in accordance with its terms, the rights and obligations of each Placee in respect of the Placing as described in this Announcement shall cease and terminate at such time and no claim can be made by any Placee in respect thereof.

By participating in the Bookbuild, each Placee agrees with the Company and the Joint Bookrunners and the Selling Shareholder that the exercise by the Company or the Joint Bookrunners or the Selling Shareholder of any right of termination or any other right or other discretion under the Placing Agreement and/or the Selling Shareholder Agreement (as the case may be) shall be within the absolute discretion of the Company or the Joint Bookrunners or the Selling Shareholder or for agreement between the Company and the Joint Bookrunners and the Selling Shareholder (as the case may be) and that neither the Company nor the Joint Bookrunners nor the Selling Shareholder need make any reference to such Placee and that none of the Company, the Joint Bookrunners nor any of their respective affiliates, agents, directors, officers or employees nor the Selling Shareholder shall have any liability to such Placee (or to any other person whether acting on behalf of a Placee or otherwise) whatsoever in connection with any such exercise.

By participating in the Placing, each Placee agrees that its rights and obligations terminate only in the circumstances described above and under the "Conditions of the Placing" section above and will not be capable of rescission or termination by it after oral or emailed confirmation by the Bookrunner following the close of the Bookbuild.

Representations, warranties and further terms

By submitting a bid in the Bookbuild, each Placee (and any person acting on such Placee's behalf) represents, warrants, acknowledges and agrees (for itself and for any such prospective Placee) that (save where the Joint Bookrunners expressly agree in writing to the contrary):

1.            it has read and understood this Announcement in its entirety and that its acquisition of the 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 that it has not relied on, and will not rely on, any information given or any representations, warranties or statements made at any time by any person in connection with Admission, the Placing, the Company, the Placing Shares or otherwise, other than the information contained in this Announcement and the Publicly Available Information;

2.            it has not received a prospectus or other offering document in connection with the Placing and acknowledges that no prospectus or other offering document: (a) is required under the Prospectus Directive; and (b) has been or will be prepared in connection with the Placing;

3.            the Ordinary Shares are admitted to trading on AIM, and that the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules for Companies, which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and that it is able to obtain or access such information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other publicly traded company, without undue difficulty;

4.            it has made its own assessment of the Placing Shares and has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing and neither the Joint Bookrunners nor the Company nor the Selling Shareholder nor any of their respective affiliates, agents, directors, officers or employees nor any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing Shares or the Company or any other person other than the information in this Announcement or the Publicly Available Information; nor has it requested the Joint Bookrunners, the Company, the Selling Shareholder, any of their respective affiliates, agents, directors, employees or officers or any person acting on behalf of any of them to provide it with any such information;

5.            neither the Joint Bookrunners nor any person acting on behalf of them nor any of their respective affiliates, agents, directors, officers or employees has or shall have any liability for any Publicly Available Information, or any representation relating to the Company, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

6.            (a) the only information on which it is entitled to rely on and on which it has relied in committing to acquire the Placing Shares is contained in the Publicly Available Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and it has made its own assessment of the Company, the Placing Shares and the terms of the Placing based on Publicly Available Information; (b) neither the Joint Bookrunners, nor the Company (nor any of their respective affiliates, agents, directors, officers and employees) nor the Selling Shareholder have made any representation or warranty to it, express or implied, with respect to the Company, the Placing or the Placing Shares or the accuracy, completeness or adequacy of the Publicly Available Information; (c) it has conducted its own investigation of the Company, the Placing and the Placing Shares, satisfied itself that the information is still current and relied on that investigation for the purposes of its decision to participate in the Placing; and (d) has not relied on any investigation that the Joint Bookrunners or any person acting on their behalf may have conducted with respect to the Company, the Placing or the Placing Shares;

7.            the content of this Announcement and the Publicly Available Information has been prepared by and is exclusively the responsibility of the Company and that neither the Joint Bookrunners nor any persons acting on their behalf is responsible for or has or shall have any liability for any information, representation, warranty or statement relating to the Company contained in this Announcement or the Publicly Available Information nor will they be liable for any Placee's decision to participate in the Placing based on any information, representation, warranty or statement contained in this Announcement, the Publicly Available Information or otherwise.  Nothing in this Appendix shall exclude any liability of any person for fraudulent misrepresentation;

8.            it is not, and at the time the Placing Shares are acquired will not be, a resident of Australia, Canada, the Republic of South Africa or Japan;

9.            the Placing Shares have not been registered or otherwise qualified, and will not be registered or otherwise qualified, for offer and sale nor will a prospectus be cleared or approved in respect of any of the Placing Shares under the securities laws of the United States, or any state or other jurisdiction of the United States, Australia, Canada, the Republic of South Africa or Japan and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within the United States, Australia, Canada, Japan or the Republic of South Africa or in any country or jurisdiction where any such action for that purpose is required;

10.          it has the funds available to pay for the Placing Shares for which it has agreed to acquire and acknowledges and agrees that it will pay the total subscription amount in accordance with the terms of this Announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other placees or sold at such price as the Joint Bookrunners determine;

11.          it and/or each person on whose behalf it is participating:

(a)        is entitled to acquire Placing Shares pursuant to the Placing under the laws and regulations of all relevant jurisdictions;

(b)        has fully observed such laws and regulations;

(c)        has capacity and authority and is entitled to enter into and perform its obligations as an acquirer of Placing Shares and will honour such obligations; and

(d)        has obtained all necessary consents and authorities (including, without limitation, in the case of a person acting on behalf of a Placee, all necessary consents and authorities to agree to the terms set out or referred to in this Appendix) under those laws or otherwise and complied with all necessary formalities to enable it to enter into the transactions contemplated hereby and to perform its obligations in relation thereto and, in particular, if it is a pension fund or investment company it is aware of and acknowledges it is required to comply with all applicable laws and regulations with respect to its acquisition of Placing Shares;

12.          it is not, and any person who it is acting on behalf of is not, and at the time the Placing Shares are acquired will not be, a resident of, or with an address in, or subject to the laws of, Australia, Canada, Japan or the Republic of South Africa, and it acknowledges and agrees that the Placing Shares have not been and will not be registered or otherwise qualified under the securities legislation of Australia, Canada, Japan or the Republic of South Africa and may not be offered, sold, or acquired, directly or indirectly, within those jurisdictions;

13.          it and the beneficial owner of the Placing Shares is, and at the time the Placing Shares are acquired will be, outside the United States and acquiring the Placing Shares in an "offshore transaction" as defined in, and in accordance with, Regulation S under the Securities Act;

14.          it understands that the Placing Shares have not been, and will not be, registered under the Securities Act and may not be offered, sold or resold in or into or from the United States except pursuant to an effective registration under the Securities Act, or 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; and 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;

15.          it (and any account for which it is purchasing) is not acquiring the Placing Shares with a view to any offer, sale or distribution thereof within the meaning of the Securities Act;

16.          it understands that: (a) the Placing Shares are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act; (b) no representation is made as to the availability of the exemption provided by Rule 144 for resales of Placing Shares; and (c) it will not deposit the Placing Shares in a depositary receipt programme in the United States or for US persons (as defined in the Securities Act);

17.          it will not offer, sell, transfer, pledge or otherwise dispose of any Placing Shares except:

(a)        in an offshore transaction in accordance with Rules 903 or 904 of Regulation S under the Securities Act; or

(b)        pursuant to another exemption from registration under the Securities Act, if available,

and in each case in accordance with all applicable securities laws of the states of the United States and other jurisdictions;

18.          no representation has been made as to the availability of the exemption provided by Rule 144, Rule 144A or any other exemption under the Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares;

19.          it will not distribute, forward, transfer or otherwise transmit this Announcement or any part of it, or any other presentational or other materials concerning the Placing in or into or from the United States (including electronic copies thereof) to any person, and it has not distributed, forwarded, transferred or otherwise transmitted any such materials to any person;

20.          neither of the Joint Bookrunners, their respective affiliates and any person acting on behalf of any of them is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of the Joint Bookrunners and that the Joint Bookrunners have no duties or responsibilities to it for providing the protections afforded to their clients or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of their rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right in the Placing Agreement;

21.          it will make payment to the Joint Bookrunners for the Placing Shares allocated to it in accordance with the terms and conditions of this Announcement on the due times and dates set out in this Announcement, failing which the relevant Placing Shares may be placed with others on such terms as the Joint Bookrunners determine in their absolute discretion without liability to the Placee and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties due pursuant to the terms set out or referred to in this Announcement) which may arise upon the sale of such Placee's Placing Shares on its behalf;

22.          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 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;

23.          no action has been or will be taken by any of the Company, the Joint Bookrunners, the Selling Shareholder or any person acting on behalf of the Company or the Joint Bookrunners that would, or is intended to, permit a public offer of the Placing Shares in the United States or in any country or jurisdiction where any such action for that purpose is required;

24.          the person who it specifies for registration as holder of the Placing Shares will be: (a) the Placee; or (b) a nominee of the Placee, as the case may be.  The Joint Bookrunners and the Company will not be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement.  Each Placee and any person acting on behalf of such Placee agrees to acquire Placing Shares pursuant to the Placing and agrees to indemnify the Company and the Joint Bookrunners in respect of the same on the basis that the Placing Shares will be allotted to a CREST stock account of the relevant Joint Bookrunner or transferred to a CREST stock account of the relevant Joint Bookrunner who will hold them as nominee on behalf of the Placee until settlement in accordance with its standing settlement instructions with it;

25.          the allocation, allotment, issue, transfer and delivery to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a stamp duty or stamp duty reserve tax liability under (or at a rate determined under) any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depository receipts and clearance services) and that it is not participating in the Placing as nominee or agent for any person or persons to whom the allocation, allotment, issue or delivery of Placing Shares would give rise to such a liability;

26.          it and any person acting on its behalf (if within the United Kingdom) falls within Article 19(5) and/or 49(2) of the Order and undertakes that it will acquire, hold, manage and (if applicable) dispose of any Placing Shares that are allocated to it for the purposes of its business only;

27.          it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom or elsewhere in the EEA prior to the expiry of a period of six months from Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the FSMA or an offer to the public in any other member state of the EEA within the meaning of the Prospectus Directive;

28.          if it is within the EEA, it is a Qualified Investor as defined in section 86(7) of the FSMA, being a person falling within Article 2.1(e) of the Prospectus Directive;

29.          it has only communicated or caused to be communicated and it will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) relating to Placing Shares in circumstances in which section 21(1) of the FSMA does not require approval of the communication by an authorised person and it acknowledges and agrees that this Announcement has not been approved by either of the Joint Bookrunners in its capacity as an authorised person under section 21 of the FSMA and it may not therefore be subject to the controls which would apply if it was made or approved as financial promotion by an authorised person;

30.          it has complied and it will comply with all applicable laws with respect to anything done by it or on its behalf in relation to the Placing Shares (including all relevant provisions of the FSMA in respect of anything done in, from or otherwise involving the United Kingdom);

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

32.          if it has received any confidential price sensitive information about the Company in advance of the Placing, it has not: (a) dealt in the securities of the Company; (b) encouraged or required another person to deal in the securities of the Company; or (c) disclosed such information to any person, prior to the information being made publicly available;

33.          neither the Joint Bookrunners, the Company, the Selling Shareholder, nor any of their respective affiliates, agents, directors, officers or employees nor any person acting on behalf of the Joint Bookrunners or their respective affiliates, agents, directors, officers or employees is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing nor providing advice in relation to the Placing nor in respect of any representations, warranties, acknowledgements, agreements, undertakings, or indemnities contained in the Placing Agreement nor the exercise or performance of any of the Joint Bookrunners' rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

34.          the Joint Bookrunners and their respective affiliates, acting as an investor for its or their own account(s), may bid or subscribe for and/or purchase Placing Shares and, in that capacity, may retain, purchase, offer to sell or otherwise deal for its or their own account(s) in the Placing Shares, any other securities of the Company or other related investments in connection with the Placing or otherwise.  Accordingly, references in this Announcement to the Placing Shares being offered, subscribed, acquired or otherwise dealt with should be read as including any offer to, or subscription, acquisition or dealing by, the Joint Bookrunners and/or any of their respective affiliates acting as an investor for its or their own account(s).  Neither the Joint Bookrunners nor the Company intend to disclose the extent of any such investment or transaction otherwise than in accordance with any legal or regulatory obligation to do so;

35.          it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering Regulations 2007 (together, the "Regulations") and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;

36.          in order to ensure compliance with the Regulations, each of the Joint Bookrunners (for itself and as agent on behalf of the Company) or the Company's registrars may, in their absolute discretion, require verification of its identity.  Pending the provision to the Joint Bookrunners or the Company's registrars, as applicable, of evidence of identity, definitive certificates in respect of the Placing Shares may be retained at the Joint Bookrunners' absolute discretion or, where appropriate, delivery of the Placing Shares to it in uncertificated form may be delayed at the Joint Bookrunners' or the Company's registrars', as the case may be, absolute discretion. If within a reasonable time after a request for verification of identity either of the Joint Bookrunners (for itself and as agent on behalf of the Company) or the Company's registrars have not received evidence satisfactory to them, either the Joint Bookrunner and/or the Company may, at its absolute discretion, terminate its commitment in respect of the Placing, in which event the monies payable on acceptance of allotment will, if already paid, be returned without interest to the account of the drawee's bank from which they were originally debited;

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

38.          it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of acquiring the Placing Shares.  It further acknowledges that it is experienced in investing in securities of this nature and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Placing.  It has relied upon its own examination and due diligence of the Company and its affiliates taken as a whole, and the terms of the Placing, including the merits and risks involved;

39.          it irrevocably appoints any duly authorised officer of each Joint Bookrunner as its agent for the purpose of executing and delivering to the Company and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares for which it agrees to subscribe or purchase upon the terms of this Announcement;

40.          the Company, the Joint Bookrunners and others (including each of their respective affiliates, agents, directors, officers and employees) will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and agreements, which are given to the Joint Bookrunners on its own behalf and on behalf of the Company and are irrevocable;

41.          if it is acquiring the Placing Shares as a fiduciary or agent for one or more investor accounts, it has full power and authority to make, and does make, the foregoing representations, warranties, acknowledgements, agreements and undertakings on behalf of each such accounts;

42.          time is of the essence as regards its obligations under this Appendix;

43.          any document that is to be sent to it in connection with the Placing will be sent at its risk and may be sent to it at any address provided by it to the Joint Bookrunners;

44.          the Placing Shares will be issued subject to the terms and conditions of this Appendix; and

45.          the terms and conditions contained in this Appendix and all documents into which this Appendix is incorporated by reference or otherwise validly forms a part and/or any agreements entered into pursuant to these terms and conditions and all agreements to acquire shares pursuant to the Bookbuild and/or the Placing will be governed by and construed in accordance with English law and it submits to the exclusive jurisdiction of the English courts in relation to any claim, dispute or matter arising out of such contract except that enforcement proceedings in respect of the obligation to make payment for the Placing shares (together with interest chargeable thereon) may be taken by the Company or the Joint Bookrunners or the Selling Shareholder 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.

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) agrees to indemnify and hold the Company, the Joint Bookrunners, the Selling Shareholder and each of their respective affiliates, agents, directors, officers and employees 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 given by the Placee (and any person acting on such Placee's behalf) in this Appendix or incurred by the Joint Bookrunners, the Company, the Selling Shareholder or each of their respective affiliates, agents, directors, officers or employees arising from the performance of the Placee's obligations as set out in this Announcement, and further agrees that the provisions of this Appendix shall survive after the completion of the Placing.

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 in the United Kingdom relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, direct by the Company.  Such agreement assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service.  If there are any such arrangements, or the settlement related to any other dealings in the Placing Shares, stamp duty or stamp duty reserve tax may be payable.  In that event, the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax and neither the Company nor the Joint Bookrunners nor the Selling Shareholder shall be responsible for such stamp duty or stamp duty reserve tax.  If this is the case, each Placee should seek its own advice and they should notify the Joint Bookrunners accordingly.  In addition, Placees should note that they will be liable for 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 outside the United Kingdom by them or any other person on the acquisition by them of any Placing Shares or the agreement by them to acquire any Placing Shares and each Placee, or the Placee's nominee, in respect of whom (or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such non-United Kingdom stamp, registration, documentary, transfer or similar taxes or duties undertakes to pay such taxes and duties, including any interest and penalties (if applicable), forthwith and to indemnify on an after-tax basis and to hold harmless the Company and the Joint Bookrunners in the event that either the Company and/or the Joint Bookrunners have incurred any such liability to such taxes or duties.

The representations, warranties, acknowledgements and undertakings contained in this Appendix are given to each Joint Bookrunner for itself and on behalf of the Company and are irrevocable.

Panmure Gordon is authorised and regulated by the FCA in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Bookbuild and the Placing, and Panmure Gordon will not be responsible to anyone (including any Placees) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Bookbuild or the Placing or any other matters referred to in this Announcement.

Arden Partners is authorised and regulated by the FCA in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Bookbuild and is acting exclusively for the Company and the Selling Shareholder and no one else in connection with the Placing and Arden Partners will not be responsible to anyone (including any Placees) other than the Company and the Selling Shareholder for providing the protections afforded to its clients or for providing advice in relation to the Bookbuild and/or the Placing or any other matters referred to in this Announcement.

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

Each Placee and any person acting on behalf of the Placee acknowledges and agrees that each of the Joint Bookrunners may (at its absolute discretion) satisfy its obligations to procure Placees by itself agreeing to become a Placee in respect of some or all of the Placing Shares or by nominating any connected or associated person to do so.

When a Placee or any person acting on behalf of the Placee is dealing with the Joint Bookrunners, any money held in an account with the Joint Bookrunners 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 relevant rules and regulations of the FCA made under the FSMA.  Each Placee acknowledges that the money will not be subject to the protections conferred by the client money rules: as a consequence this money will not be segregated from the Joint Bookrunners' money in accordance with the client money rules and will be held by them under a banking relationship and not as trustee.

References to time in this Announcement are to London time, unless otherwise stated.

All times and dates in this Announcement may be subject to amendment.  Placees will be notified of any changes.

No statement in this Announcement is intended to be a profit forecast or estimate, 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.

The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares.  Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser.

The Placing Shares to be issued or sold 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 nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.

APPENDIX II - ADDITIONAL DEFINITIONS

"Acquisition"	the proposed acquisition by the Company of the entire issued share capital of PierCo pursuant to the terms of the Share Purchase Agreement
"Admission"	the admission of the Enlarged Share Capital to trading on AIM becoming effective in accordance with the AIM Rules for Companies
"Admission Document"	the admission document relating to the Group, PierCo, the Placing and the Acquisition expected to be published by the Company later today, 8 April 2016, including a shareholder circular and notice convening the General Meeting
"AIM"	AIM, a market operated by the London Stock Exchange
"AIM Rules for Companies"	the rules for AIM companies published by the London Stock Exchange
"Arden Partners"	Arden Partners Plc
"ATM"	automated teller machine, a computer terminal that allows the user to access basic bank services, such as cash withdrawals
"Bookbuild"	the bookbuilding exercise to be undertaken by the Panmure Gordon and Arden Partners in respect of the Placing
"Brighton Pier" or "Pier"	the pleasure pier located in Brighton, England, which is owned and operated by PierCo
"CAGR"	compound annual growth rate
"Companies Act"	the Companies Act 2006 (as amended)
"Company" or "Eclectic"	Eclectic Bar Group Plc
"Completion"	completion of the Acquisition pursuant to the Share Purchase Agreement
"CREST"	the computerised settlement system (as defined in the CREST Regulations), operated by Euroclear UK & Ireland which facilitates the holding and transfer of title to shares in uncertificated form
"CREST Regulations"	the Uncertificated Securities Regulations 2001, including (i) any enactment or subordinate legislation which amends or supersedes those regulations; and (ii) any applicable rules made under those regulations or any such enactment or subordinate legislation for the time being in force
"Directors" or "Board"	the directors of the Company as at the date of this Announcement, namely Luke Johnson, Reuben Harley, John Smith, Leigh Nicolson, James Fallon and Paul Viner
"EBITDA"	earnings before interest, taxes, depreciation and amortisation and exceptional items and loss on disposal of property, plant and equipment
"Enlarged Group"	the enlarged group immediately following the acquisition of PierCo by the Company
"Enlarged Share Capital"	the Ordinary Shares in issue immediately following Admission (comprising the Existing Ordinary Shares and the New Ordinary Shares)
"Euroclear UK & Ireland"	Euroclear UK & Ireland Limited
"Existing Group"	the Company and its Subsidiaries at the date of this Announcement
"Existing Ordinary Shares"	the 16,222,741 Ordinary Shares as of the date of this Announcement
"Existing Share Capital"	the issued ordinary share capital of the Company as of the date of this Announcement
"General Meeting"	the general meeting of the Company convened for 10.00 a.m. on 26 April 2016 (or any adjournment thereof), notice of which will be set out at the end of the Admission Document
"HOP"	Hemsley Orrell Partnership
"Joint Bookrunners"	together, Panmure Gordon and Arden Partners
"London Stock Exchange"	London Stock Exchange plc
"New Ordinary Shares"	the new Ordinary Shares to be allotted and issued pursuant to the Placing, such allotment being conditional on Admission
"Options"	rights to acquire (whether by subscription or market purchase) Ordinary Shares
"Ordinary Shares"	the ordinary shares of £0.25 each in the share capital of the Company
"Original Admission"	the admission of the Ordinary Shares to trading on AIM on 28 November 2013
"Panmure Gordon"	Panmure Gordon (UK) Limited
"PierCo" or "Target"	Brighton Marine Palace and Pier Company (The), a statutory company created by the Brighton Marine Palace and Pier Act 1888 (registered number ZC000164) and having its registered office at 1a Dukesway Court, Team Valley, Gateshead, Tyne and Wear, NE11 0PJ
"Placing"	the conditional placing of the Placing Shares by Panmure Gordon and Arden Partners, pursuant to the Placing Agreement and the Selling Shareholder Agreement
"Placing Agreement"	the conditional agreement dated 8 April 2016 between the Company, Panmure Gordon and Arden Partners relating to the placing of the New Ordinary Shares
"Placing Price"	the price per Ordinary Share of the Placing Shares pursuant to the Placing (to be determined during the course of the Bookbuild)
"Placing Shares"	together, the New Ordinary Shares and the Sale Shares
"Proposed Directors"	each of Anne Martin and Joseph Tager
"Registrar"	Equiniti Limited, the registrar of the Company
"Resolutions"	the resolutions to be proposed at the General Meeting, the full text of which will be set out in the notice of General Meeting to be set out at the end of the Admission Document
"Sale Shares"	up to 1,853,795 Existing Ordinary Shares to be sold by the Selling Shareholder pursuant to the Placing
"Sellers"	(1) Addbudget Limited (registered in England with company number 02971012) and (2) Mr Philip Noble, Mr Philip Noble and Mr David James Horrocks, Mr David James Horrocks and Mr Ian Imrie all as trustees of bare trusts in favour of Addbudget Limited, being the holders of the entire issued share capital of PierCo
"Share Option Plan"	the share option plan dated 20 November 2013 adopted by the Company
"Selling Shareholder"	Reuben Harley
"Selling Shareholder Agreement"	the conditional agreement between the Selling Shareholder and Arden Partners relating to the placing of the Sale Shares to be entered into immediately following this Announcement
"Shareholder"	a holder of Ordinary Shares, including a holder of Placing Shares following Admission
"Share Purchase Agreement"	the share purchase agreement dated 8 April 2016 and entered into between (1) the Sellers as sellers, (2) Barclub (Marylebone) Limited as buyer, (3) Red Poppy (UK) Limited as guarantor of the sellers' obligations and (4) Eclectic as guarantor of the buyer's obligations, in respect of the Acquisition
"Subsidiary" or "Subsidiaries"	as defined in sections 1159 of the Companies Act
"Target Standalone EBITDA"	the implied standalone EBITDA of PierCo, given as the Target Underlying EBITDA adjusted for ATM revenue for each year, which will be transferring to PierCo on Completion
"Target Underlying EBITDA"	the EBITDA of PierCo, given as the profit from operations adjusted for depreciation, machine rental costs, management charges and exceptional repair costs relating to the Pier
"UK" or "United Kingdom"	the United Kingdom of Great Britain and Northern Ireland

 

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