Offer for Alfred McAlpine plc

Carillion PLC 10 December 2007 10 December 2007 PART I CARILLION PLC RECOMMENDED SHARES AND CASH ACQUISITION OF ALFRED MCALPINE PLC The Boards of Carillion and Alfred McAlpine are pleased to announce that agreement has been reached on the terms of a recommended proposal whereby Carillion will acquire, for shares and cash, the entire issued and to be issued ordinary share capital of Alfred McAlpine. Highlights * Recommended shares and cash Acquisition valuing each Alfred McAlpine Share at 558 pence * Consideration for each Alfred McAlpine Share is 1.08 New Carillion Shares valued at 392.3 pence (based on the Closing Price of 363.25 pence per Carillion Share on 7 December 2007, the last Business Day before this announcement) and 165.4 pence in cash, with a Mix and Match Facility and Loan Notes available * Values Alfred McAlpine's existing issued ordinary share capital at approximately Â£572 million * Creates one of the UK's largest support services and construction companies with an aggregate revenue of approximately Â£4.7 billion and combines two companies with an excellent strategic fit - potential to deliver significant value for both Carillion and Alfred McAlpine Shareholders by generating significant cost synergy benefits and enhancing operational performance - creates a leading support services group serving both public and private sector customers - enhanced capability to provide integrated solutions due to the complementary skills of Carillion and Alfred McAlpine in private finance, design, construction, maintenance and support services - Alfred McAlpine's construction business will fit with Carillion's skills and resources and the businesses will together continue to target higher margin projects - creates enhanced positions in a wide range of UK growth markets - enhances management resources, particularly the number of people available with the skills required to support Carillion's major growth opportunities in the Middle East * Expected to achieve an annual running rate of cost savings of Â£30 million by the end of 2009 (the first full year after completion of the Acquisition) and to deliver materially enhanced earnings in that year (see Note 1) * Acquisition price of 558 pence represents a premium of approximately:- - 24 per cent. to the Closing Price of 448.5 pence for each Alfred McAlpine Share on 1 August 2007, the last Business Day prior to the announcement of demerger plans by Alfred McAlpine; and - 5 per cent. to the Closing Price of 532.0 pence per Alfred McAlpine Share on 15 October 2007, the last Business Day prior to Alfred McAlpine announcing that it had received an approach from Carillion * Holders of New Carillion Shares following completion of the Acquisition will receive the Carillion final dividend for the year to 31 December 2007 * Irrevocable undertakings have been received from Alfred McAlpine Directors and letters of intent have been received from Alfred McAlpine Shareholders in respect of 308,488 Alfred McAlpine Shares and 18,045,264 Alfred McAlpine Shares respectively, representing, in aggregate, approximately 17.9 per cent. of the existing issued ordinary share capital of Alfred McAlpine * It is intended that the Acquisition will be effected by way of a scheme of arrangement of Alfred McAlpine, although Carillion reserves the right in its absolute discretion to implement the Acquisition by way of an Offer, subject (if required) to agreement with the Panel * Carillion also announces expected growth in underlying earnings per share (see Note 2) in 2007 of at least 20 per cent. compared to 2006 (see Note 3) and the Carillion Board expects the Carillion Group's strong momentum to continue in 2008 and over the medium term Commenting on the Acquisition, Philip Rogerson, Chairman of Carillion said: 'The acquisition of Alfred McAlpine represents a further step in Carillion's development and its successful strategy for sustainable and profitable growth. There is an excellent strategic fit between the two companies and the combined group will be one of the UK's leading support services businesses with enhanced capabilities in providing integrated solutions and construction services. We are confident this transaction can deliver significant value for the shareholders of the Enlarged Group.' Commenting on the Acquisition, Roger Urwin, Chairman of Alfred McAlpine said: 'Over the past five years we have repositioned Alfred McAlpine into a valuable support services group, with leading positions in a number of growth markets. Carillion's offer recognises this value and gives our shareholders, employees and customers the opportunity to share in the future success of the Enlarged Group.' Lazard is acting as financial adviser to Carillion. Morgan Stanley and Oriel Securities are acting as joint corporate brokers to Carillion. JPMorgan Cazenove and Tricorn Partners are acting as joint financial advisers to Alfred McAlpine. JPMorgan Cazenove is also acting as corporate broker to Alfred McAlpine. This summary should be read in conjunction with, and is subject to, the full text of the announcement set out in Part II. In particular, the Acquisition is subject to the conditions set out in Appendix I to this announcement. Certain information relating to the Profit Forecast is included in Appendix II to this announcement. The bases and sources of certain financial information contained in this announcement are set out in Appendix III. Certain definitions and terms used in this announcement are set out in Appendix IV. Notes: (1) The anticipated operational cost savings have been calculated on the basis of the existing cost and operating structures of the Carillion and Alfred McAlpine Groups. These statements of estimated cost savings and one-off costs for achieving them relate to future actions and circumstances which, by their nature, involve risks, uncertainties and other factors. As a result, the cost savings referred to may not be achieved, or those achieved could be materially different from those estimated. The statement that the Acquisition is expected to deliver materially enhanced earnings for Carillion in 2009 (the first full year following completion of the Acquisition) relates to future actions and circumstances, which, by their nature, involve risks, uncertainties and other factors. These statements do not constitute a profit forecast and should not be interpreted to mean that earnings for that year or any subsequent financial period would necessarily match or be greater than those for any preceding financial period. (2) Before intangible amortisation, goodwill impairment, restructuring costs and non-operating items. (3) Carillion has agreed with the Panel's ruling that this statement represents a profit forecast (the 'Profit Forecast') for the purpose of Rule 28 of the City Code. As such it is a requirement that this statement should be reported on by Carillion's auditors and financial advisers in accordance with Rule 28 of the City Code. These reports and the basis and principal assumptions underlying the Profit Forecast are included in Appendix II to this announcement. A presentation for analysts will be held at 9.30 a.m. at City Presentation Centre, 4 Chiswell Street, Finsbury Square, London, EC1Y 4UP. Enquiries Carillion Carillion plc +44 (0)1902 316426 John McDonough, Group Chief Executive Richard Adam, Group Finance Director John Denning, Director, Group Corporate Affairs Lazard (Financial Adviser) +44 (0)20 7187 2000 Peter Warner Vasco Litchfield Morgan Stanley (Joint Corporate Broker) +44 (0)20 7425 8000 Peter Moorhouse Robin Tennent Oriel Securities (Joint Corporate Broker) +44 (0)20 7710 7600 Simon Bragg David Arch Maitland (PR Adviser) +44 (0)20 7379 5151 Angus Maitland Alfred McAlpine Alfred McAlpine plc +44 (0)20 7357 9477 Ian Grice, Group Chief Executive Mark Greenwood, Group Finance Director JPMorgan Cazenove (Joint Financial Adviser and Corporate Broker) +44 (0)20 7588 2828 Edmund Byers Dwayne Lysaght Tricorn Partners (Joint Financial Adviser) +44 (0)20 7823 0888 Guy Dawson Andrew McNaught Hogarth Partnership (PR Adviser) +44 (0)20 7357 9477 James Longfield Rachel Hirst Lazard, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Carillion and no one else in connection with the Acquisition and this announcement and will not be responsible to anyone other than Carillion for providing the protections afforded to clients of Lazard nor for providing advice in connection with the Acquisition or this announcement or any matter referred to herein. JPMorgan Cazenove, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Alfred McAlpine and no one else in connection with the Acquisition and this announcement and will not be responsible to anyone other than Alfred McAlpine for providing the protections afforded to clients of JPMorgan Cazenove nor for providing advice in connection with the Acquisition or this announcement or any matter referred to herein. Tricorn Partners, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Alfred McAlpine and no one else in connection with the Acquisition and this announcement and will not be responsible to anyone other than Alfred McAlpine for providing the protections afforded to clients of Tricorn Partners nor for providing advice in connection with the Acquisition or this announcement or any matter referred to herein. Morgan Stanley, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Carillion and no one else in connection with the Acquisition and this announcement and will not be responsible to anyone other than Carillion for providing the protections afforded to clients of Morgan Stanley nor for providing advice in connection with the Acquisition or this announcement or any matter referred to herein. Oriel Securities, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Carillion and no one else in connection with the Acquisition and this announcement and will not be responsible to anyone other than Carillion for providing the protections afforded to clients of Oriel Securities nor for providing advice in connection with the Acquisition or this announcement or any matter referred to herein. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes, 'interested' (directly or indirectly) in 1% or more of any class of 'relevant securities' of Carillion or of Alfred McAlpine, all 'dealings' in any 'relevant securities' of that company (including by means of an option in respect of, or a derivative referenced to, any such 'relevant securities') must be publicly disclosed by no later than 3.30pm (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the Scheme becomes Effective, lapses or is otherwise withdrawn or on which the 'offer period' otherwise ends (or, if Carillion elects to effect the Acquisition by way of an Offer, until the date on which the Offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the 'offer period' otherwise ends). If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an 'interest' in 'relevant securities' of Carillion or Alfred McAlpine, they will be deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the City Code, all 'dealings' in 'relevant securities' of Carillion or Alfred McAlpine by Carillion or Alfred McAlpine, or by any of their respective 'associates' must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose 'relevant securities' 'dealings' should be disclosed, and the number of such securities in issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk. 'Interests in securities' arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an 'interest' by virtue of the 'ownership' or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities. Terms in quotation marks are defined in the City Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a 'dealing' under Rule 8, you should consult the Panel. Overseas Jurisdictions The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements. This announcement has been prepared for the purposes of complying with English law and the City Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of England. This announcement is not intended to, and does not constitute, or form part of, an offer to sell or any invitation to purchase or subscribe for any securities or a solicitation of any vote or approval in any jurisdiction. This announcement does not constitute a prospectus or a prospectus equivalent document. Shareholders of Carillion and Alfred McAlpine are advised to read carefully the formal documentation in relation to the Acquisition once it has been despatched. The proposals of the Acquisition will be made solely through the Scheme Document, which will contain the full terms and conditions of the Scheme, including details of how to vote with respect to the Scheme. Any acceptance or other response to the proposals should be made only on the basis of the information in the Scheme Document. Alfred McAlpine Shareholders may obtain a further free copy of the Scheme Document, when it becomes available, from CMS Cameron McKenna LLP at Mitre House, 160 Aldersgate Street, London EC1A 4DD. In particular, this announcement is not an offer of securities for sale in the United States and the New Carillion Shares, which will be issued in connection with the Acquisition, have not been, and will not be, registered under the US Securities Act or under the securities law of any state, district or other jurisdiction of the United States, Australia, Canada or Japan and no regulatory clearance in respect of the New Carillion Shares has been, or will be, applied for in any jurisdiction other than the UK. The New Carillion Shares may not be offered, sold, or, delivered, directly or indirectly, in, into or from the United States absent registration under the US Securities Act or an exemption from registration The New Carillion Shares may not be offered, sold, resold, delivered or distributed, directly or indirectly, in, into or from Canada, Australia or Japan or to, or for the account or benefit of, any resident of Australia, Canada or Japan absent an exemption from registration or an exemption under relevant securities law. It is expected that the New Carillion Shares will be issued in reliance upon the exemption from the registration requirements of the US Securities Act provided by Section 3(a)(10) thereof. Under applicable US securities laws, persons (whether or not US persons) who are or will be 'affiliates' within the meaning of the US Securities Act of Alfred McAlpine or Carillion prior to, or of Carillion after, the Effective Date will be subject to certain transfer restrictions relating to the New Carillion Shares received in connection with the Scheme. Notice to US Investors in Alfred McAlpine: The Acquisition relates to the shares of a UK company and is proposed to be made by means of a scheme of arrangement provided for under the laws of England and Wales. The Acquisition is subject to the disclosure requirements and practices applicable in the United Kingdom to schemes of arrangement, which differ from the disclosure and other requirements of US securities laws. Financial information included in the relevant documentation will have been prepared in accordance with accounting standards applicable in the United Kingdom that may not be comparable to the financial statements of US companies. If the Acquisition is implemented by way of an Offer, it will be made in accordance with the procedural and filing requirements of the US securities laws, to the extent applicable. If the Acquisition is implemented by way of an Offer, the New Carillion Shares to be issued in connection with such offer will not be registered under the US Securities Act or under the securities laws of any state, district or other jurisdiction of the United States and may not be offered, sold or delivered, directly or indirectly, in the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act or such other securities laws. Carillion does not intend to register any such New Carillion Shares or part thereof in the United States or to conduct a public offering of the New Carillion Shares in the United States. Unless Carillion otherwise determines, relevant clearances and registrations have not been, nor will they be, sought or obtained, nor have any steps been taken, nor will any steps be taken, to enable the Loan Notes to be publicly offered in compliance with applicable securities laws of any jurisdiction. The Loan Notes have not been, nor will they be, registered under the US Securities Act or under the securities laws of any state, district or other jurisdiction of the United States and the Loan Notes are not being offered in, and may not be transferred into, the United States. Accordingly, Scheme Shareholders in the United States will not be eligible to receive Loan Notes. The Loan Notes may not (subject to certain limited exceptions) be offered, sold, transferred or delivered, directly or indirectly, in any other jurisdiction (including, without limitation, in Australia, Canada or Japan) where to do so would violate the laws of that jurisdiction or would require registration thereof in such jurisdiction. Forward Looking Statements This announcement contains statements about Carillion and Alfred McAlpine that are or may be forward looking statements. All statements other than statements of historical facts included in this announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words 'targets', 'plans', 'believes', 'expects', 'aims',' intends', 'will', 'may', 'anticipates', 'estimates', 'projects' or, words or terms of similar substance or the negative thereof, are forward looking statements. Forward looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Carillion's or Alfred McAlpine's operations and potential synergies resulting from the Acquisition; and (iii) the effects of government regulation on Carillion's or Alfred McAlpine's business. Such forward looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof. Carillion and Alfred McAlpine disclaim any obligation to update any forward looking or other statements contained herein, except as required by applicable law. 10 December 2007 PART II CARILLION PLC RECOMMENDED SHARES AND CASH ACQUISITION OF ALFRED MCALPINE PLC 1. Introduction The Boards of Carillion and Alfred McAlpine are pleased to announce that agreement has been reached on the terms of a recommended proposal whereby Carillion will acquire, for shares and cash, the entire issued and to be issued ordinary share capital of Alfred McAlpine. The terms of the Acquisition value each Alfred McAlpine Share at 558 pence and Alfred McAlpine's existing issued ordinary share capital at approximately Â£572 million. It is currently intended that the Acquisition will be implemented by way of a scheme of arrangement pursuant to section 425 of the Companies Act 1985, although Carillion reserves the right, in its sole discretion and subject (if required) to agreement with the Panel, to implement the Acquisition by way of an Offer for the entire issued and to be issued ordinary share capital of Alfred McAlpine and to make appropriate amendments to the terms of the Acquisition arising from the change to an Offer. Subject to the satisfaction or, where appropriate, waiver of the Conditions, it is expected that the Acquisition will become effective during the first quarter of 2008. 2. Terms of the Acquisition Under the terms of the Scheme, which will be subject to the Conditions and further terms set out in Appendix I to this announcement and the full terms and conditions that will be set out in the Scheme Document, Alfred McAlpine Shareholders will be entitled to receive: for each Alfred McAlpine Share 1.08 New Carillion Shares and 165.4 pence in cash and so in proportion for any number of Alfred McAlpine Shares held. Based on the Closing Price of 363.25 pence per Carillion Share on 7 December 2007, the last Business Day before this announcement, this entitlement represents 392.3 pence in New Carillion Shares plus 165.4 pence in cash. A Mix and Match Facility will also be made available pursuant to which Alfred McAlpine Shareholders (other than certain Overseas Persons) may, subject to availability, elect to vary the proportions in which they receive New Carillion Shares and cash in respect of their holdings of Alfred McAlpine Shares. Further details of the Mix and Match Facility are set out in paragraph 11 below. A Loan Note Alternative will be made available to Alfred McAlpine Shareholders (other than certain Overseas Persons and Scheme Shareholders in the United States) enabling them to take Loan Notes instead of all or part of the cash to which they would otherwise be entitled, including any additional cash consideration to which they become entitled as a result of an election under the Mix and Match Facility. Further details of the Loan Note Alternative are set out in paragraph 12 below. Assuming a maximum number of 113.7 million New Carillion Shares will be issued pursuant to the Acquisition, Alfred McAlpine Shareholders will hold Carillion Shares representing approximately 29 per cent. of the issued share capital of the Enlarged Group. In addition, Alfred McAlpine Shareholders will have received cash consideration, in aggregate, of approximately Â£174 million. Based on the Closing Price of 363.25 pence per Carillion Share on 7 December 2007, being the last Business Day before this announcement, the Acquisition values each Alfred McAlpine Share at approximately 558 pence and the existing issued ordinary share capital of Alfred McAlpine at approximately Â£572 million. These terms represent a premium of approximately: * 24 per cent. to the Closing Price of 448.5 pence per Alfred McAlpine Share on 1 August 2007, the last Business Day prior to the day that Alfred McAlpine announced that it was planning to undertake a demerger; and * 5 per cent. to the Closing Price of 532.0 pence per Alfred McAlpine Share on 15 October 2007, being the last Business Day before the day Alfred McAlpine announced that it had received an approach from Carillion. Fractions of New Carillion Shares will not be allotted or issued pursuant to the Scheme. Fractional entitlements to New Carillion Shares will be aggregated and sold in the market and the net proceeds of sale will be distributed pro rata to persons entitled thereto. Upon the Scheme becoming Effective: * the Scheme Shares will be cancelled and in their place new ordinary shares in the capital of Alfred McAlpine will be issued to Carillion, whereupon Alfred McAlpine will become a private limited company and a wholly-owned subsidiary of Carillion; * the New Carillion Shares and/or cash and/or Loan Notes due to each Alfred McAlpine Shareholder pursuant to the Scheme will be paid or issued to such Alfred McAlpine Shareholder within 14 days of the Effective Date; and * the New Carillion Shares will be issued credited as fully paid and will rank pari passu in all respects with the Carillion Shares in issue at the time the New Carillion Shares are issued pursuant to the Acquisition, including the right to receive and retain dividends and other distributions declared, made or paid by reference to a record date falling after the Effective Date. 3. Recommendation The Alfred McAlpine Directors, who have been so advised by JPMorgan Cazenove and Tricorn Partners, consider the terms of the Acquisition to be fair and reasonable. In providing their advice to the Alfred McAlpine Directors, JPMorgan Cazenove and Tricorn Partners have taken into account the commercial assessments of the Alfred McAlpine Directors. Accordingly, the Alfred McAlpine Directors intend unanimously to recommend that Alfred McAlpine Shareholders vote in favour of the resolutions to be proposed at the Scheme Meeting and the Alfred McAlpine Extraordinary General Meeting, as they have irrevocably undertaken to do in respect of their own respective beneficial holdings, amounting in aggregate to 308,488 Alfred McAlpine Shares, representing approximately 0.3 per cent. of Alfred McAlpine's existing issued ordinary share capital. 4. Background to, and reasons for, the Acquisition Carillion believes that the Acquisition will create significant value for its shareholders by bringing together two companies with an excellent strategic fit and complementary skills, particularly in support services. The Acquisition will create one of the largest support services and construction companies in the UK, with a combined turnover of approximately Â£4.7 billion. The Acquisition is consistent with Carillion's strategic objective of seeking to deliver sustainable, profitable growth through: * growing support services organically and by acquisition; * maintaining and further enhancing a strong and selective construction capability focused on higher added value contracts for longer term customers; and * developing and marketing integrated solutions tailored to the needs of customers. The acquisition of Alfred McAlpine is another important step in accelerating Carillion's strategy for growth. It is also expected to generate significant cost synergies (see Note 8, Appendix III). Carillion is confident that the Acquisition will produce attractive returns for shareholders in excess of Carillion's cost of capital. Furthermore, Carillion believes that the Acquisition will deliver materially enhanced earnings in 2009, the first full year after completion of the Acquisition (see Note 9, Appendix III). Support services The Enlarged Group will benefit from significantly enhanced capabilities and positions in a number of support services markets with strong growth dynamics. With combined pro forma annual revenue from support services of approximately Â£2.3 billion, it will also be one of the largest suppliers of support services in the UK. The Enlarged Group will have a broader range of skills and capabilities, strengthening its integrated services offering across a wide range of UK growth markets. The Acquisition will combine the complementary strengths of Carillion and Alfred McAlpine in a number of growth support services sectors for public and private sector customers. For example, Carillion has strong positions in the education, health, defence and transport infrastructure sectors, and in the financial services, telecommunications and insurance sectors. Alfred McAlpine is a substantial supplier of support services to private sector companies, with leading positions in the financial services and retail sectors. It also has a strong position in road maintenance. Through the Acquisition, Alfred McAlpine's consultancy business, which includes the recently acquired Enviros business, should benefit from the opportunity to offer its services to a larger client base. Together with Carillion's TPS, the enlarged consultancy business will be able to offer a broader spectrum of consultancy services. A further cross-selling opportunity exists with Alfred McAlpine's IT services business, which currently provides IT services to, among other customers, BAE Systems. With the addition of Alfred McAlpine's Utility Services business, Carillion will enter a new market as one of the leading providers in the sector, with the opportunity to develop Alfred McAlpine's current services into a higher margin business. Construction services The construction services activities of Carillion and Alfred McAlpine will have a combined pro forma annual turnover of approximately Â£2.3 billion and together will be a leading business in the UK construction services market. Alfred McAlpine's construction business will fit with Carillion's skills and resources and the businesses will together continue to target higher margin projects. In the UK road infrastructure services market, Carillion's position as a major supplier of integrated solutions for the Highways Agency will be enhanced through Alfred McAlpine's ECI contracts as well as its strong relationship with Local Authorities. The combination of Carillion and Alfred McAlpine will also enhance the Group's management resources. In particular, there will be a significant increase in the number of people with the skills required to take advantage of the major opportunity Carillion has in the Middle East, which will continue to be one of the Enlarged Group's key areas of focus given its significant growth potential. Integrated solutions Developing and marketing integrated solutions are key parts of Carillion's strategy for growth. The Acquisition will increase Carillion's capability in providing integrated solutions through combining the capabilities the Enlarged Group will have in project finance, design, construction, maintenance and facilities management and services to provide life-time asset management solutions. Synergies In addition to the expected strategic benefits of the Acquisition referred to above, there is the potential to generate significant synergy benefits. Carillion believes it can achieve an annual running rate of operating cost savings in the Enlarged Group of Â£30 million by the end of 2009 (see Note 8, Appendix III), which will broadly equal the one-off costs of delivering those savings. Within its existing business, and through the integration of Mowlem, Carillion has already demonstrated that it can make substantial overheads savings in areas such as head offices, regional offices, management and back-office services. In addition, Carillion believes there will be opportunities to generate supply chain savings. In addition to the above cost savings, Carillion also believes that the Acquisition will create a number of cross-selling opportunities within the Enlarged Group and generate revenue synergies in areas such as facilities management, M&E maintenance, vehicle fleet management, consultancy, IT services and the recruitment and supply of operational personnel. 5. Background to, and reasons for, recommending the Acquisition The Board of Alfred McAlpine believes that the combination of Alfred McAlpine and Carillion will create a leading support services company. The Enlarged Group is well placed to take advantage of large growth markets which are driven by the continuing trend to outsource the maintenance and management of buildings and by the high level of investment required to develop and renew the health, leisure and education facilities and transport and utility infrastructures in its chosen markets. The Board of Alfred McAlpine believes that Carillion provides a strong fit for both its Business Services and the Infrastructure Services / Project Services businesses. The Acquisition will provide significant opportunities for growth which will benefit all Alfred McAlpine stakeholders. The Acquisition also represents an attractive realisation of value today for Alfred McAlpine Shareholders and is an excellent opportunity for Alfred McAlpine Shareholders both to realise cash and to continue to participate in the future success of Alfred McAlpine within the Enlarged Group. 6. Irrevocable undertakings Alfred McAlpine Directors who also hold Scheme Shares have irrevocably undertaken to vote such Scheme Shares (in aggregate, 308,488 Alfred McAlpine Shares, representing approximately 0.3 per cent. of the existing issued ordinary share capital of Alfred McAlpine) in favour of the Acquisition and the Scheme at the Scheme Meeting and the Alfred McAlpine Extraordinary General Meeting. Such Alfred McAlpine Directors have also undertaken that, if following this announcement, Carillion decides to implement the Acquisition by means of an Offer instead of by way of the Scheme, they will accept such Offer in respect of their Scheme Shares. Of the Alfred McAlpine Directors, only Robert Hough is interested in Alfred McAlpine Preference Shares. Robert Hough is the beneficial owner of 6,000 Alfred McAlpine Preference Shares which he has irrevocably undertaken to vote in favour of the Capital Reduction at the Alfred McAlpine Extraordinary General Meeting. Carillion has received non-binding letters of intent over 17.6 per cent. of Alfred McAlpine's issued ordinary share capital from Schroder Investment Management Limited, New Star Asset Management Limited and Audley Capital to accept an offer by Carillion. The letters will lapse if the formal documentation relating to the Scheme (or Offer in the event Carillion decides to implement the Acquisition by means of an Offer instead of a Scheme) has not been posted by 16 January 2008. The letters will also cease to apply to shares which are disposed of by the holder. The letters of intent relate to 9,901,571 Alfred McAlpine Shares held by Schroder Investment Management Limited, 3,511,830 Alfred McAlpine Shares held by New Star Asset Management Limited and 4,631,863 Alfred McAlpine Shares held by Audley Capital, in each case on their own behalf and on behalf of discretionary clients. Accordingly, Carillion has received irrevocable undertakings and letters of intent on the terms set out above in respect of 308,488 Alfred McAlpine Shares and 18,045,264 Alfred McAlpine Shares respectively, representing, in aggregate, approximately 17.9 per cent. of Alfred McAlpine's existing issued ordinary share capital. 7. Information on Carillion Carillion was launched and listed on the London Stock Exchange as an independent company in 1999, following its demerger from Tarmac. In 1999, Carillion was predominantly a construction company. Today, Carillion generates around half of its revenue and over two-thirds of its profit from support services and equity investments in PPP projects. Changing its business mix and introducing rigorous new risk management procedures have significantly improved the risk profile of the company's activities and the predictability of its earnings. Carillion reports its financial results in the following three segments in which it groups together activities of a similar type and risk profile in order to make it easier to value its earnings on a consistent basis: * Support services: facilities management and services, rail infrastructure, road maintenance, consultancy and other support services; * Construction Services: UK building, civil engineering, developments and international construction; and * Investments: equity returns on investments in PPP projects and management thereof. Carillion's portfolio includes a wide range of high-profile services and projects in the UK and overseas. Its portfolio of PPP projects includes schools, universities, hospitals, roads, prisons and defence projects, the largest of which being the Allenby Connaught project for the Ministry of Defence, which involves the replacement and management of Army accommodation in the South of England. Carillion also provides extensive facilities management services for other parts of the Ministry of Defence estate, NHS hospitals, schools and other government and commercial property, including some 7,000 properties for British Telecom. It has also upgraded large sections of the UK rail network such as the West Coast Mainline and constructed the M6 Toll motorway. It maintains a substantial proportion of the UK motorway network, including the M25 and sections of the M40 and M11, together with a number of local authority road networks. In the Middle East, Carillion has substantial and rapidly growing joint venture businesses engaged on a number of major construction projects, such as the multi-billion pound Dubai Festival City development, and also has a growing facilities management business. In Canada, Carillion has completed two of the first PPP hospitals in Ontario, which are now fully operational, is building its third PPP hospital and maintains a substantial proportion of the road network in Ontario. As at 7 December 2007 (the last Business Day before the date of this announcement), Carillion had a market capitalisation of approximately Â£1,022 million. In the year to 31 December 2006, Carillion generated revenues (including its share of joint ventures) of Â£3.6 billion, profit on ordinary activities before tax, goodwill amortisation and exceptional items of Â£82.9 million, and as at 31 December 2006 had net assets of Â£434 million and gross assets of Â£2,062 million. In the six months to 30 June 2007, Carillion generated revenues (including its share of joint ventures) of Â£1,929 million, profit on ordinary activities before tax, amortisation and exceptional items of Â£34.3 million, and as at 30 June 2007 had net assets of Â£476 million and gross assets of Â£1,970 million. At that date, the Carillion Directors valued Carillion's portfolio of PPP investments at Â£277 million. 8. Current trading Carillion has continued to build on its strong first-half performance and, as previously announced, the Board expects the Carillion Group to deliver materially enhanced earnings in 2007. The Board now expects that this will represent growth in underlying earnings per share (see Note 11, Appendix III) from continuing operations in 2007 of at least 20 per cent. compared to 2006 (see Note 12, Appendix III). As indicated, the successful integration of Mowlem has created a stronger and more resilient business, well positioned in a wide range of growth markets. In addition, it will also generate integration cost savings at the previously announced running rate of Â£26 million a year by the end of 2007, well ahead of the Â£15 million a year originally expected at the time of the Mowlem acquisition. Average net debt in 2007 is expected to be below Â£150 million, reflecting continuing strong cash management. Following the sale of Pall Mall Holdings and Sovereign Soft Services in September 2007, net debt at 31 December 2007 is now expected to be below Â£80 million. Trading conditions in Carillion's main market sectors have remained strong, enabling the Carillion Group to continue to focus on growing revenue in support services, at stable operating margins of between 4 and 5 per cent., and on enhancing operating margins in construction services with the objective of moving them towards 3 per cent. over the next three years. Carillion's order book at 31 December 2007 is expected to be stable and in the region of Â£15.7 billion (December 2006: Â£16.0 billion). The pipeline of probable new orders is expected to increase significantly to over Â£3.3 billion (December 2006: Â£1.6 billion), reflecting, in particular, the progress Carillion is making in the Middle East. Carillion's businesses in the Middle East continue to make very strong progress and given the magnitude of probable new orders in this region the Carillion Board now believes that the Carillion Group's share of revenues from these businesses is likely to more than double to around Â£600 million within three years, rather than the five years previously announced, at margins of around 6 per cent. The Carillion Group has been successful in agreeing with the tax authorities certain prior year tax issues and a mechanism for the use of certain tax losses acquired with Mowlem in 2007 and in future years. Consequently, the Carillion Group's effective tax rate for 2007 is likely to reduce to around 25 per cent., which is reflected in the Carillion Group's earnings growth. In addition, with the outlook in the Carillion Group's main UK and international market sectors forecast to remain positive, the Board expects the Carillion Group's strong momentum to continue in 2008 and over the medium term. 9. Information on Alfred McAlpine Alfred McAlpine is a leading support services company and its business is focused on providing services to the built environment. Alfred McAlpine develops, finances, designs, builds, manages and maintains the buildings and infrastructure that enable individuals and organisations to carry out their business. During the first half of 2007, Alfred McAlpine undertook a comprehensive review to determine the best way to maximise shareholder value during the next stage in the group's development. The review produced two fundamental conclusions, namely that the group's PFI investments and Slate business should be sold and that the remaining core businesses should be demerged to create two separate listed companies (Business Services and Infrastructure Services / Project Services). Demerger preparations were being made until the announcements by Carillion and Alfred McAlpine on 2 November 2007. On 5 November 2007 Alfred McAlpine announced that it had reached agreement to sell its equity and subordinated loan stock interests in six PFI concessions operating within the roads, schools and healthcare sectors to Infrastructure Investors Limited Partnership ('I2') for Â£52.2 million cash (of which Â£4.9 million is conditional). Alfred McAlpine is continuing to progress its planned disposal of the Slate Business. Alfred McAlpine has the following four business segments for reporting purposes: * Business Services: a leading provider of facilities management services, working with clients to develop, manage and deliver solutions that improve the performance and quality of their built environment assets and reduce operating costs. The business is founded on engineering and project management expertise and provides business critical support, with an emphasis on proactive and preventative facilities and asset management through service helpdesks and engineering service centres. These services are complemented by hard facilities management services, such as mechanical and electrical engineering and fabric maintenance, and by consultancy services, such as environmental, energy and waste management consultancy and health and safety compliance management. This range of added value services enables Alfred McAlpine to offer total facilities management solutions for the built environment; * Infrastructure Services: focused on providing maintenance and renewal services to the utilities and highways maintenance sectors, where clients continue to seek to reduce costs and improve delivery through outsourcing; * Project Services: comprises construction services and investment and land-led development businesses. It provides building and civil engineering services to local and national government, to commercial developers and to the health, education and leisure sectors. It also manages the development, financing, construction and maintenance of long-term assets; * Slate: the Slate Business is one of the world's major producers of natural slate. It manufactures a comprehensive range of roofing slate together with a wide range of other dimensional slate products for building, construction and architectural applications. It operates the Penrhyn , Blaenau Ffestiniog and Cwt-y-Bugail quarries in North Wales and also operates from its American operation at Hilltop Slate Inc. For the year ended 31 December 2006, Alfred McAlpine generated turnover (including its share of joint ventures) of Â£1.1 billion, profit on ordinary activities before tax, goodwill amortisation and operating exceptional items of Â£27.0 million, and as at 31 December 2006 had net assets of Â£263 million and gross assets of Â£662 million. In the six months to 30 June 2007, Alfred McAlpine generated turnover (including its share of joint ventures) of Â£0.6 billion, profit on ordinary activities before tax, goodwill amortisation and operating exceptional items of Â£12.7 million and at 30 June 2007 had net assets of Â£279 million and gross assets of Â£700 million. 10. Implementation agreement Carillion and Alfred McAlpine have entered into the Implementation Agreement in relation to the Acquisition which governs their relationship during the period until the Acquisition becomes Effective or lapses. The parties have agreed, amongst other things, to co-operate with regard to the process of implementing the Acquisition. The agreement also contains certain assurances and confirmations between the parties (including terms regarding the conduct of the business of the Alfred McAlpine Group pending completion of the Acquisition and in relation to certain non-solicitation undertakings by Alfred McAlpine). The Implementation Agreement will terminate in certain circumstances, including if the Acquisition lapses or the Scheme or the Acquisition is not approved at the Scheme Meeting or the Alfred McAlpine Extraordinary General Meeting or the Carillion Extraordinary General Meeting. Break fee arrangement Alfred McAlpine has agreed to pay Carillion a break fee of Â£5,718,323 (being an amount equal to one per cent. of the value of Alfred McAlpine calculated by reference to the terms of the Acquisition as at the date of this announcement) (together with any amount payable in respect of any VAT but only to the extent that any such VAT is recoverable by Alfred McAlpine or the representative member of Alfred McAlpine's VAT group) if (i) a third party transaction (being an alternative to the Acquisition) is announced and subsequently that or another such third party transaction becomes or is declared unconditional in all respects or is completed; or (ii) the Alfred McAlpine Shareholders do not approve the Acquisition at the Scheme Meeting and the Alfred McAlpine Extraordinary General Meeting. Carillion has also agreed to pay Alfred McAlpine a reciprocal break fee of Â£5,718,323 (together with any amount payable in respect of any VAT but only to the extent that any such VAT is recoverable by Carillion or the representative member of Carillion's VAT group) if the Carillion Shareholders do not approve the Acquisition at the Carillion Extraordinary General Meeting. 11. Terms of the Mix and Match Facility Alfred McAlpine Shareholders (other than certain Overseas Persons) will be entitled to elect, subject to availability, to vary the proportions in which they receive New Carillion Shares and cash in respect of their holdings of Alfred McAlpine Shares. However, the total number of New Carillion Shares to be issued and the maximum aggregate amount of cash to be paid under the Scheme will not be varied as a result of elections under the Mix and Match Facility. Accordingly, elections made by Alfred McAlpine Shareholders under the Mix and Match Facility will only be satisfied to the extent that other Alfred McAlpine Shareholders make off-setting elections. Satisfaction of elections under the Mix and Match Facility will be effected on the basis of the price of a Carillion Share at the time the Scheme Document is despatched and will be confirmed in that document. To the extent that elections cannot be satisfied in full, they will be scaled down on a pro rata basis. As a result, Alfred McAlpine Shareholders who make an election under the Mix and Match Facility will not know the exact number of New Carillion Shares or the amount of cash they will receive until settlement of the consideration due to them in respect of the Acquisition. The Mix and Match Facility is conditional upon the Acquisition becoming Effective and further details on the Mix and Match Facility will be included in the Scheme Document. 12. The Loan Note Alternative A Loan Note Alternative will be made available to Alfred McAlpine Shareholders (other than certain Overseas Persons and Scheme Shareholders in the United States) enabling them to take Loan Notes instead of all or part of the cash to which they would otherwise be entitled, including cash entitlements under the Mix and Match Facility. The Loan Note Alternative will be made available on the basis of Â£1 nominal value of Loan Notes for every Â£1 of cash which a Alfred McAlpine Shareholder would otherwise be entitled to receive under the Acquisition. The Loan Notes will be governed by English law and will be issued, credited as fully paid, in integral multiples of Â£1 nominal value. All fractional entitlements to the Loan Notes will be disregarded and will not be issued. The Loan Notes will not be transferable other than to privileged relations and family trusts and no application will be made for them to be listed or dealt in on any stock exchange. The Loan Notes will not be qualifying corporate bonds. The Loan Notes will bear interest from the date of issue to the relevant holder of the Loan Notes at a rate per annum of 50 basis points below sterling LIBOR. Interest will be payable by half-yearly instalments in arrears (less any tax required by law to be withheld or deducted therefrom) on 31 March and 30 September in each year (or, if such date is not a Business Day, on the first Business Day thereafter). The Loan Notes will be redeemable at par (together with accrued interest less any tax required by law to be withheld or deducted therefrom) in whole or in part, for cash at the option of the noteholders on 30 September 2008 and subsequently semi-annually on 31 March and 30 September in each year (or, if such date is not a Business Day, on the first Business Day thereafter). In certain circumstances, Carillion will have the right to redeem all of the Loan Notes. If not previously redeemed, the final redemption date will be the next interest payment date following the fifth anniversary of the date on which the Loan Notes are issued. If at any time after 31 March 2009, the outstanding nominal amount of Loan Notes equals or is less than 10 per cent. of the total amount of Loan Notes issued, Carillion will be entitled to redeem all of the then outstanding Loan Notes. The Loan Notes have not been, nor will they be, registered under the US Securities Act or under the securities laws of any state, district or other jurisdiction of the United States and the Loan Notes are not being offered in, and may not be transferred into, the United States. Accordingly, Scheme Shareholders in the United States will not be eligible to elect to receive Loan Notes. The Loan Note Alternative will be conditional upon the Acquisition becoming Effective. Full details of the Loan Note Alternative will be contained in the Scheme Document and the appropriate form of election. The Loan Notes are not being offered to persons in the United States or any other jurisdiction where the sale, issue or transfer of the Loan Notes would be a contravention of applicable law. 13. Financial effects of the Acquisition The cash consideration payable to Alfred McAlpine Shareholders pursuant to the Acquisition will be provided by Carillion from its recently enlarged debt facility provided by its existing relationship banks. Lazard is satisfied that sufficient resources are available to Carillion to satisfy in full the cash consideration payable pursuant to the Acquisition. Further information on the financing of the Acquisition will be set out in the Scheme Document. Carillion currently expects that net debt of the Enlarged Group will be around Â£300 million by 31 December 2008. In accordance with its normal practice, Carillion intends to take a prudent view of fair value adjustments and this review is ongoing. 14. The New Carillion Shares The New Carillion Shares to be issued pursuant to the Acquisition will be ordinary shares of 50 pence each in the capital of Carillion. The New Carillion Shares will be issued in registered form, will be capable of being held in both certificated and uncertificated form, will be issued credited as fully paid and will rank pari passu in all respects with the existing Carillion Shares. The New Carillion Shares will carry the right to Carillion's final dividend in respect of the year to 31 December 2007. 15. Dividend policy The Board's policy on dividends is to increase returns to Carillion Shareholders progressively over time, reflecting the underlying performance of the Carillion Group and the cash flow requirements of the business. Carillion intends to maintain its existing dividend policy following completion of the Acquisition. 16. Management and employees of Alfred McAlpine Carillion attaches great importance to the skills and experience of the existing management and employees of Alfred McAlpine. Carillion believes that the Enlarged Group's prospects for growth should lead to increased employment opportunities. The Board of Carillion has also given assurances to the Alfred McAlpine Directors that, following the Acquisition becoming Effective, the existing contractual employment rights, including pension rights, of all employees of the Alfred McAlpine Group will be fully safeguarded. 17. Disclosure of Interests in Alfred McAlpine Save for the arrangements with Alfred McAlpine Shareholders in relation to irrevocable undertakings summarised in paragraph 6 above, as at the close of business on 7 December 2007, being the latest practicable date prior to the date of this announcement, neither Carillion nor any Carillion Director nor, so far as Carillion is aware, any person acting in concert with Carillion, owns or controls any Alfred McAlpine Shares or any securities convertible or exchangeable into, or any rights to subscribe for or purchase, or any options (including traded options) to purchase or any short positions (whether conditional or absolute and whether in the money or otherwise and including under a derivative), agreement to sell, delivery obligation or right to require another person to take delivery of or any derivatives referenced to Alfred McAlpine Shares nor does any such person have any arrangement in relation to Alfred McAlpine Shares. For these purposes, 'arrangement' includes any indemnity or option arrangement, any agreement or understanding, formal or informal, of whatever nature, relating to Alfred McAlpine Shares which may be an inducement to deal or refrain from dealing in such Alfred McAlpine Shares. 18. Alfred McAlpine Share Schemes The Acquisition will, as described in paragraph 2 above, extend to all Alfred McAlpine Shares issued upon the exercise of the options and/or the vesting of awards under the Alfred McAlpine Share Schemes before the Scheme becomes Effective. Appropriate proposals will be made in due course to participants in the Alfred McAlpine Share Schemes. 19. Pensions The latest valuation of the Alfred McAlpine Pension Plan was carried out as at 31 December 2005. Following that valuation, Alfred McAlpine and the Alfred McAlpine Trustee concluded a recovery plan to meet the Alfred McAlpine Pension Plan's statutory funding objective, as required by the Pensions Act 2004. This recovery plan was designed to remove the deficit in funding revealed by the valuation by 31 December 2015. Under the recovery plan Alfred McAlpine agreed to make cash contributions to the Alfred McAlpine Pension Plan of (i) Â£6.6 million in 2006; (ii) Â£6.6 million in 2007; (iii) Â£8.5 million in 2008; and (iv) Â£9.2 million plus the increase in RPI over the previous year in 2009. In the years from 2010 to 2015, Alfred McAlpine agreed to make contributions equal to the prior year contribution plus the increase in RPI over the preceding 12 months. Â£4 million was contributed in 2006 with the remainder of the 2006 commitment and Â£6.1 million of the 2007 commitment contributed so far in 2007. Carillion has held a preliminary discussion with the Alfred McAlpine Trustee concerning the Alfred McAlpine pension scheme. 20. Alfred McAlpine Preference Shares Carillion expects to make proposals in respect of the Alfred McAlpine Preference Shares in due course. 21. Settlement, listing and dealing of New Carillion Shares Applications will be made to the UK Listing Authority and to the London Stock Exchange for the New Carillion Shares to be issued in connection with the Acquisition to be admitted to the Official List and to trading on the London Stock Exchange's main market for listed securities. It is expected that admission of the New Carillion Shares to the Official List and to trading on the London Stock Exchange's main market for listed securities will become effective, and that dealings for normal settlement in the New Carillion Shares will commence, on the date on which the Scheme becomes Effective. The existing Carillion Shares are already admitted to CREST. It is expected that all of the New Carillion Shares, when issued and fully paid, will be capable of being held and transferred by means of CREST. It is expected that the New Carillion Shares will trade under ISIN GB0007365546. Further details on listing, dealing and settlement will be included in the Scheme Document. 22. Implementation of the Scheme and cancellation of listing It is intended that the Acquisition will be effected by means of a scheme of arrangement between Alfred McAlpine and the Scheme Shareholders under section 425 of the Companies Act 1985. The procedure involves an application by Alfred McAlpine to the Court to sanction the Scheme and confirm the Capital Reduction. In consideration for the cancellation of their Alfred McAlpine Shares, Alfred McAlpine Shareholders, who are Scheme Shareholders, will receive cash, Loan Notes and/or New Carillion Shares as outlined in paragraph 2 above. Following the implementation of the Scheme, Alfred McAlpine will become a private limited, wholly-owned subsidiary of Carillion. Carillion and Alfred McAlpine have agreed that Carillion may, if it so determines in its absolute discretion, implement the Acquisition by making an Offer for the entire issued and to be issued ordinary share capital of Alfred McAlpine. The Directors of Alfred McAlpine have confirmed that, in the event that Carillion determines to implement the Acquisition by way of an Offer, subject to such Offer representing in the reasonable opinion of Lazard, JPMorgan Cazenove and Tricorn Partners, no diminution in the value of the consideration offered under the terms set out in this announcement, the Alfred McAlpine Directors will recommend, on a unanimous and unqualified basis, that Alfred McAlpine Shareholders accept the Offer except to the extent that the Alfred McAlpine Directors determine in good faith (having taken appropriate legal and financial advice) that such unanimous and unqualified recommendation should not be given or should be withdrawn or modified in compliance with their fiduciary duties. The Acquisition will be subject to, among other things, the Conditions set out in Appendix I to this announcement, including approval by Alfred McAlpine Shareholders by the passing of a resolution at a meeting of the Alfred McAlpine Shareholders convened by the order of the Court pursuant to section 425 of the Companies Act to consider and, if thought fit, approve the Scheme with or without any modification thereof (and any adjournment thereof). This resolution must be approved by a majority in number of the holders of Alfred McAlpine Shares (other than members of the Carillion Group, if relevant) present and voting, either in person or by proxy, at the Scheme Meeting, representing not less than three-fourths in value of the Alfred McAlpine Shares held by such holders. The Scheme must also be sanctioned by the Court and the associated Capital Reduction must be confirmed by the Court, in each case at the relevant Court Hearings. In addition, the implementation of the Scheme will require separate approval by the passing of special resolutions at the Alfred McAlpine Extraordinary General Meeting, inter alia, to: * authorise the Alfred McAlpine Directors to take such action as they consider necessary or appropriate to effect the Scheme; * reclassify and subsequently cancel any existing Alfred McAlpine Shares (other than Alfred McAlpine Shares already held by Carillion (if any)) and approve the issue of new ordinary shares in Alfred McAlpine to Carillion (and/or its nominee(s)) in accordance with the Scheme; and * amend the Alfred McAlpine articles of association to ensure that the Alfred McAlpine Shares issued under the Alfred McAlpine Share Schemes will be subject to the Scheme or, if issued following the Reorganisation Record Time, will be automatically transferred to Carillion on the same terms as under the Scheme. The Alfred McAlpine Extraordinary General Meeting will be held directly after the Scheme Meeting. If the Scheme becomes Effective, it will be binding on all Scheme Shareholders irrespective of whether or not they attend or vote in favour of the Scheme at the Scheme Meeting or in favour of the special resolutions to be proposed at the Alfred McAlpine Extraordinary General Meeting. Prior to the Scheme becoming Effective, Carillion intends to apply to the Financial Services Authority for the listing of Alfred McAlpine Shares to be cancelled and to the London Stock Exchange for the Alfred McAlpine Shares to cease to be admitted to trading on the London Stock Exchange's market for listed securities. This will take effect on the Effective Date. As part of the Acquisition, it is intended that Alfred McAlpine be re-registered as a private company on the Effective Date. 23. Carillion Shareholder Approval As a result of the size of the transaction, the Acquisition constitutes a Class 1 transaction (as defined in the Listing Rules) for Carillion. Accordingly, Carillion will be required to seek the approval of its shareholders for the Acquisition at the Carillion Extraordinary General Meeting. Carillion will prepare and send to its shareholders, as soon as is reasonably practicable, an explanatory circular summarising the background to and reasons for the Acquisition (which will include a notice convening the Carillion Extraordinary General Meeting). The Acquisition will be conditional on, among other things, the requisite resolution being passed by the Carillion Shareholders at the Carillion Extraordinary General Meeting. Carillion will also be required to publish the Prospectus in connection with the issue of the New Carillion Shares. The Prospectus will contain information relating to, amongst other things, the Enlarged Group and the New Carillion Shares. 24. Overseas Persons The availability of New Carillion Shares and the Loan Notes under the terms of the Acquisition to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdiction. Such persons should inform themselves about and observe any applicable requirements. Further details in relation to Overseas Persons will be contained in the Scheme Document. 25. General The formal documentation setting out the details of the Acquisition, including the Scheme Document setting out the procedures to be followed to approve the Scheme, with the forms of proxy for use in connection with the Scheme Meeting and the Alfred McAlpine Extraordinary General Meeting and the form of election under which Alfred McAlpine Shareholders can elect for varying proportions of cash, Loan Notes and New Carillion Shares under the Mix and Match Facility and the Loan Note Alternative, together with the Prospectus relating to Carillion and the New Carillion Shares, will be posted to Alfred McAlpine Shareholders and, for information only, to participants in the Alfred McAlpine Share Schemes as soon as is reasonably practicable and, in any event within 28 days of the date of this announcement (or such later date as Carillion and Alfred McAlpine may, with the consent of the Panel, agree). With the consent of the Panel, there may be a short delay in posting the Scheme Document to Alfred McAlpine Shareholders. The Scheme Document will be posted by 16 January 2008 at the latest (except where the Panel otherwise consent to any further delay). At the same time as these documents are sent to Alfred McAlpine Shareholders, the Prospectus and the Carillion Shareholder Circular convening the Carillion Extraordinary General Meeting will be sent to Carillion Shareholders. The Scheme Document will include full details of the Scheme, together with notices of the Court Meeting and the Alfred McAlpine Extraordinary General Meeting and the expected timetable, and will specify the necessary action to be taken by the Scheme Shareholders. The sources and bases of information set out in this announcement are contained in Appendix III. The definitions of certain expressions used in this announcement are contained in Appendix IV. Enquiries Carillion Carillion plc +44 (0)1902 316426 John McDonough, Group Chief Executive Richard Adam, Group Finance Director John Denning, Director, Group Corporate Affairs Lazard (Financial Adviser) +44 (0)20 7187 2000 Peter Warner Vasco Litchfield Morgan Stanley (Joint Corporate Broker) +44 (0)20 7425 8000 Peter Moorhouse Robin Tennent Oriel Securities (Joint Corporate Broker) +44 (0)20 7710 7600 Simon Bragg David Arch Maitland (PR Adviser) +44 (0)20 7379 5151 Angus Maitland Alfred McAlpine Alfred McAlpine plc +44 (0)20 7357 9477 Ian Grice, Group Chief Executive Mark Greenwood, Group Finance Director JPMorgan Cazenove (Joint Financial Adviser and Corporate Broker) +44 (0)20 7588 2828 Edmund Byers Dwayne Lysaght Tricorn Partners (Joint Financial Adviser) +44 (0)20 7823 0888 Guy Dawson Andrew McNaught Hogarth Partnership (PR Adviser) +44 (0)20 7357 9477 James Longfield Rachel Hirst Lazard, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Carillion and no one else in connection with the Acquisition and this announcement and will not be responsible to anyone other than Carillion for providing the protections afforded to clients of Lazard nor for providing advice in connection with the Acquisition or this announcement or any matter referred to herein. JPMorgan Cazenove, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Alfred McAlpine and no one else in connection with the Acquisition and this announcement and will not be responsible to anyone other than Alfred McAlpine for providing the protections afforded to clients of JPMorgan Cazenove nor for providing advice in connection with the Acquisition or this announcement or any matter referred to herein. Tricorn Partners, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Alfred McAlpine and no one else in connection with the Acquisition and this announcement and will not be responsible to anyone other than Alfred McAlpine for providing the protections afforded to clients of Tricorn Partners nor for providing advice in connection with the Acquisition or this announcement or any matter referred to herein. Morgan Stanley, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Carillion and no one else in connection with the Acquisition and this announcement and will not be responsible to anyone other than Carillion for providing the protections afforded to clients of Morgan Stanley nor for providing advice in connection with the Acquisition or this announcement or any matter referred to herein. Oriel Securities, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Carillion and no one else in connection with the Acquisition and this announcement and will not be responsible to anyone other than Carillion for providing the protections afforded to clients of Oriel Securities nor for providing advice in connection with the Acquisition or this announcement or any matter referred to herein. THIS ANNOUNCEMENT IS NOT A PROSPECTUS. IT DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OF SECURITIES, OR CONSTITUTE SOLICITATION OF ANY OFFER OF SECURITIES. ANY ACCEPTANCE OR RESPONSE TO THE ACQUISITION SHOULD BE MADE ONLY ON THE BASIS OF THE INFORMATION REFERRED TO IN THE SCHEME DOCUMENT AND THE PROSPECTUS. Copies of the Prospectus, the Carillion Shareholder Circular and the Scheme Document will, from the date of posting to Alfred McAlpine Shareholders or Carillion Shareholders (as appropriate), be available for inspection at the Document Viewing Facility which is situated at The Financial Services Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS. Copies of the Carillion Shareholder Circular, the Scheme Document and the Prospectus will, from the date of posting to Alfred McAlpine Shareholders or Carillion Shareholders (as appropriate), be available for inspection by Carillion Shareholders at the offices of Carillion plc, Birch Street, Wolverhampton, WV1 4HY during normal business hours on any weekday (Saturdays, Sundays and public holidays excepted) and at the offices of Slaughter and May, One Bunhill Row, London, EC1Y 8YY during normal business hours on any weekday (Saturdays, Sundays and public holidays excepted). Copies of the Scheme Document and the Prospectus will, from the date of posting to Alfred McAlpine Shareholders or Carillion Shareholders (as appropriate), be available for inspection by Alfred McAlpine Shareholders at the offices of Alfred McAlpine plc, Kinnaird House, 1 Pall Mall East, London, SW1Y 5AZ during normal business hours on any weekday (Saturdays, Sundays and public holidays excepted) and at the offices of CMS Cameron McKenna LLP, Mitre House, 160 Aldersgate Street, London, EC1A 4DD during normal business hours on any weekday (Saturdays, Sundays and public holidays excepted). Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes, 'interested' (directly or indirectly) in 1% or more of any class of 'relevant securities' of Carillion or of Alfred McAlpine, all 'dealings' in any 'relevant securities' of that company (including by means of an option in respect of, or a derivative referenced to, any such 'relevant securities') must be publicly disclosed by no later than 3.30pm (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the Scheme becomes Effective, lapses or is otherwise withdrawn or on which the 'offer period' otherwise ends (or, if Carillion elects to effect the Acquisition by way of an Offer, until the date on which the Offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the 'offer period' otherwise ends). If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an 'interest' in 'relevant securities' of Carillion or Alfred McAlpine, they will be deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the City Code, all 'dealings' in 'relevant securities' of Carillion or Alfred McAlpine by Carillion or Alfred McAlpine, or by any of their respective 'associates' must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose 'relevant securities' 'dealings' should be disclosed, and the number of such securities in issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk. Overseas Jurisdictions 'Interests in securities' arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an 'interest' by virtue of the 'ownership' or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities. Terms in quotation marks are defined in the City Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a 'dealing' under Rule 8, you should consult the Panel. The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements. This announcement has been prepared for the purposes of complying with English law and the City Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of England. This announcement is not intended to, and does not constitute, or form part of, an offer to sell or any invitation to purchase or subscribe for any securities or a solicitation of any vote or approval in any jurisdiction. This announcement does not constitute a prospectus or a prospectus equivalent document. Shareholders of Carillion and Alfred McAlpine are advised to read carefully the formal documentation in relation to the Acquisition once it has been despatched. The proposals of the Acquisition will be made solely through the Scheme Document, which will contain the full terms and conditions of the Scheme, including details of how to vote with respect to the Scheme. Any acceptance or other response to the proposals should be made only on the basis of the information in the Scheme Document. Alfred McAlpine Shareholders may obtain a further free copy of the Scheme Document, when it becomes available, from CMS Cameron McKenna LLP at Mitre House, 160 Aldersgate Street, London, EC1A 4DD. In particular, this announcement is not an offer of securities for sale in the United States and the New Carillion Shares, which will be issued in connection with the Acquisition, have not been, and will not be, registered under the US Securities Act or under the securities law of any state, district or other jurisdiction of the United States, Australia, Canada or Japan and no regulatory clearance in respect of the New Carillion Shares has been, or will be, applied for in any jurisdiction other than the UK. The New Carillion Shares may not be offered, sold, or, delivered, directly or indirectly, in, into or from the United States absent registration under the US Securities Act or an exemption from registration The New Carillion Shares may not be offered, sold, resold, delivered or distributed, directly or indirectly, in, into or from Canada, Australia or Japan or to, or for the account or benefit of, any resident of Australia, Canada or Japan absent an exemption from registration or an exemption under relevant securities law. It is expected that the New Carillion Shares will be issued in reliance upon the exemption from the registration requirements of the US Securities Act provided by Section 3(a)(10) thereof. Under applicable US securities laws, persons (whether or not US persons) who are or will be 'affiliates' within the meaning of the US Securities Act of Alfred McAlpine or Carillion prior to, or of Carillion after, the Effective Date will be subject to certain transfer restrictions relating to the New Carillion Shares received in connection with the Scheme. Notice to US Investors in Alfred McAlpine: The Acquisition relates to the shares of a UK company and is proposed to be made by means of a scheme of arrangement provided for under the laws of England and Wales. The Acquisition is subject to the disclosure requirements and practices applicable in the United Kingdom to schemes of arrangement, which differ from the disclosure and other requirements of US securities laws. Financial information included in the relevant documentation will have been prepared in accordance with accounting standards applicable in the United Kingdom that may not be comparable to the financial statements of US companies. If the Acquisition is implemented by way of an Offer, it will be made in accordance with the procedural and filing requirements of the US securities laws, to the extent applicable. If the Acquisition is implemented by way of an Offer, the New Carillion Shares to be issued in connection with such offer will not be registered under the US Securities Act or under the securities laws of any state, district or other jurisdiction of the United States and may not be offered, sold or delivered, directly or indirectly, in the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act or such other securities laws. Carillion does not intend to register any such New Carillion Shares or part thereof in the United States or to conduct a public offering of the New Carillion Shares in the United States. Unless Carillion otherwise determines, relevant clearances and registrations have not been, nor will they be, sought or obtained, nor have any steps been taken, nor will any steps be taken, to enable the Loan Notes to be publicly offered in compliance with applicable securities laws of any jurisdiction. The Loan Notes have not been, nor will they be, registered under the US Securities Act or under the securities laws of any state, district or other jurisdiction of the United States and the Loan Notes are not being offered in, and may not be transferred into, the United States. Accordingly, Scheme Shareholders in the United States will not eligible to elect to receive Notes. The Loan Notes may not (subject to certain limited exceptions) be offered, sold, transferred or delivered, directly or indirectly, in any other jurisdiction (including, without limitation, in Australia, Canada or Japan) where to do so would violate the laws of that jurisdiction or would require registration thereof in such jurisdiction. Forward Looking Statements This announcement contains statements about Carillion and Alfred McAlpine that are or may be forward looking statements. All statements other than statements of historical facts included in this announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words 'targets', 'plans', 'believes', 'expects', 'aims',' intends', 'will', 'may', 'anticipates', 'estimates', 'projects' or, words or terms of similar substance or the negative thereof, are forward looking statements. Forward looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Carillion's or Alfred McAlpine's operations and potential synergies resulting from the Acquisition; and (iii) the effects of government regulation on Carillion's or Alfred McAlpine's business. Such forward looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof. Carillion and Alfred McAlpine disclaim any obligation to update any forward looking or other statements contained herein, except as required by applicable law. APPENDIX I CONDITIONS TO AND CERTAIN FURTHER TERMS OF THE ACQUISITION The Acquisition will be conditional upon the Scheme of Arrangement becoming unconditional and effective by a date falling 150 days after the date on which the Scheme Document is posted or such later date imposed by the Court and/or agreed by Carillion and Alfred McAlpine. PART A Conditions to the Acquisition 1 The Scheme will be subject to the following conditions: a) its approval by a majority in number representing not less than three-fourths in value of the holders of Alfred McAlpine Shares who are on the register of members of Alfred McAlpine at the Scheme Voting Record Time, present and voting, whether in person or by proxy, at the Scheme Meeting (or any adjournment thereof); b) the special resolutions required to implement the Scheme being passed at the Alfred McAlpine Extraordinary General Meeting (or any adjournment thereof); and c) the sanction (with or without modification (but subject to such modification being acceptable to Carillion and Alfred McAlpine)) of the Scheme and the confirmation of the Capital Reduction by the Court, office copies of the Court Orders and of the minute of reduction being delivered for registration to the Registrar of Companies and registration of the Second Court Order by the Registrar of Companies. 2 The Acquisition will be conditional upon the passing at the Carillion Extraordinary General Meeting (or any adjournment thereof) of such resolution or resolutions as are necessary to approve, implement and effect the Acquisition and the acquisition of Alfred McAlpine Shares pursuant to the Acquisition or otherwise (as such resolutions may be set out in the Carillion Shareholder Circular, including a resolution or resolutions to increase the share capital of Carillion and authorise the creation and allotment of New Carillion Shares). 3 Alfred McAlpine and Carillion have agreed that, subject to the provisions of paragraph5 below, the Scheme will also be conditional upon, and accordingly the necessary actions to make the Acquisition Effective will only be taken on, the satisfaction or waiver of the following Conditions: a) (i) the Office of Fair Trading in the United Kingdom indicating, in terms reasonably satisfactory to Carillion, that the proposed acquisition of Alfred McAlpine by Carillion or any matter arising therefrom or related thereto will not be referred to the Competition Commission and the deadline for appealing such a decision to the Competition Appeal Tribunal having expired or lapsed (as appropriate); and (ii) to the extent that the Irish Competition Act 2002 (the '2002 Act') is applicable, the Irish Competition Authority (the 'Authority') informing Carillion of its determination pursuant to Section 21(2) of the 2002 Act in terms reasonably satisfactory to Carillion, that the Acquisition and any matter arising therefrom or related thereto may be put into effect or the period specified in Section 21(2) of the 2002 Act elapsing without the Authority having made a determination in relation to the Acquisition; b) the admission to the Official List of the New Carillion Shares to be issued in connection with the Acquisition becoming effective in accordance with the Listing Rules and the admission of such shares to trading becoming effective in accordance with the Admission and Disclosure Standards of the London Stock Exchange or, if Carillion and Alfred McAlpine so determine and subject to the consent of the Panel, the UKLA agreeing to admit such shares to the Official List and the London Stock Exchange agreeing to admit such shares to trading subject only to (i) the allotment of such shares and/or (ii) the Acquisition becoming Effective. c) except as (i) publicly announced in accordance with the Listing Rules by Alfred McAlpine prior to 10 December 2007, (ii) disclosed in the annual report and accounts of Alfred McAlpine for the financial year ended 31 December 2006, (iii) disclosed in the interim report of Alfred McAlpine for the six months ended 30 June 2007 or (iv) as fairly disclosed in writing by or on behalf of Alfred McAlpine to Carillion or its advisers prior to 10 December 2007, there being no provision of any agreement, arrangement, licence, permit or other instrument to which any member of the wider Alfred McAlpine Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, which in consequence of the Acquisition or the proposed acquisition of any shares or other securities in Alfred McAlpine by the Carillion Group or because of a change in the control or management of Alfred McAlpine or otherwise, would reasonably be expected to result (in each case to an extent which is material in the context of the wider Alfred McAlpine Group as a whole or the wider Carillion Group as a whole) in: (i) any moneys borrowed by or any other indebtedness (actual or contingent) of, or grant available to any such member, being or becoming repayable or capable of being declared repayable immediately or earlier than their or its stated maturity date or repayment date or the ability of any such member to borrow moneys or incur any indebtedness being withdrawn or inhibited or being capable of becoming or being withdrawn or inhibited; (ii) any such agreement, arrangement, licence, permit or instrument or the rights, liabilities, obligations or interests of any such member thereunder being terminated or adversely modified or affected or any obligation or liability arising or any adverse action being taken thereunder; (iii) any assets or interests of any such member being or falling to be disposed of or charged or any right arising under which any such asset or interest could be required to be disposed of or charged otherwise than in the ordinary course of business; (iv) the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of any such member; (v) the rights, liabilities, obligations or interests of any such member in, or the business of any such member with, any person, firm or body (or any arrangement or arrangements relating to any such interest or business) being terminated, adversely modified or affected; (vi) the value of any such member or its financial or trading position being prejudiced or adversely affected; (vii) any such member ceasing to be able to carry on business under any name under which it presently does so; or (viii) the creation of any liability, actual or contingent, by any such member, and no event having occurred which, under any provision of any agreement, arrangement, licence, permit or other instrument to which any member of the wider Alfred McAlpine Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, would result in or would reasonably be expected to result in any of the events or circumstances as are referred to in sub-paragraphs (i) to (viii) of this paragraph 3(c) (in each case to an extent which is material in the context of the wider Alfred McAlpine Group as a whole); d) no government or governmental, quasi-governmental, supranational, statutory, regulatory, environmental or investigative body, court, trade agency, association, institution or any other body or person whatsoever in any jurisdiction, except for the Office of Fair Trading or the Irish Competition Authority (each a 'Third Party') having decided to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference, or enacted or made any statute, regulation, decision or order, or having taken any other steps which would or would reasonably be expected to (in each case to an extent which is material in the context of the wider Alfred McAlpine Group as a whole): (i) require, prevent or delay the divestiture, or materially alter the terms envisaged for any proposed divestiture by any member of the wider Carillion Group or any member of the wider Alfred McAlpine Group of all or any portion of their respective businesses, assets or property or impose any material limitation on the ability of any of them to conduct their respective businesses (or any of them) or to own any of their respective assets or properties or any material part thereof; (ii) require, prevent or delay the divestiture by any member of the wider Carillion Group of any shares or other securities in Alfred McAlpine; (iii) impose any limitation on, or result in a delay in, the ability of any member of the wider Carillion Group directly or indirectly to acquire or to hold or to exercise effectively any rights of ownership in respect of shares or loans or securities convertible into shares or any other securities (or the equivalent) in any member of the wider Alfred McAlpine Group or the wider Carillion Group or to exercise management control over any such member; (iv) otherwise materially adversely affect the business, assets or profits of any member of the wider Carillion Group or of any member of the wider Alfred McAlpine Group; (v) make the Acquisition or its implementation or the acquisition or proposed acquisition by Carillion or any member of the wider Carillion Group of any shares or other securities in, or control of Alfred McAlpine void, illegal, and/or unenforceable under the laws of any jurisdiction, or otherwise, directly or indirectly, restrain, restrict, prohibit, delay or otherwise materially interfere with the same, or impose additional conditions or obligations with respect thereto, or otherwise challenge or materially interfere therewith; (vi) except if Carillion elects to implement the Acquisition by way of an Offer, in respect of the 'squeeze out' procedure in accordance with the provisions of Chapter 3 of Part 28 of the Companies Act 2006, require any member of the wider Carillion Group or the wider Alfred McAlpine Group to offer to acquire any shares or other securities (or the equivalent) or interest in any member of the wider Alfred McAlpine Group or the wider Carillion Group owned by any third party; (vii) result in any member of the wider Alfred McAlpine Group ceasing to be able to carry on business under any name under which it presently does so; and all applicable waiting and other time periods during which any such Third Party could institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference or any other step under the laws of any jurisdiction in respect of the Acquisition or the acquisition or proposed acquisition of any Alfred McAlpine Shares having expired, lapsed or been terminated PROVIDED THAT this condition (d) shall not apply in relation to any action, proceeding, suit, investigation, enquiry or reference by a Third Party in connection with the proposed disposal by Alfred McAlpine of the Slate Business or the sale of six PFI concessions announced by Alfred McAlpine on 5 November 2007; e) all necessary filings or applications having been made in connection with the Acquisition and all statutory or regulatory obligations in any jurisdiction having been complied with in connection with the Acquisition or the acquisition by any member of the wider Carillion Group of any shares or other securities in, or control of, Alfred McAlpine and all authorisations, orders, recognitions, grants, consents, licences, confirmations, clearances, permissions and approvals (collectively 'Consents') reasonably deemed necessary by for or in respect of, the Acquisition or the proposed acquisition of any shares or other securities in, or control of, Alfred McAlpine by any member of the wider Carillion Group having been obtained in terms and in a form reasonably satisfactory to Carillion from all appropriate Third Parties or persons with whom any member of the wider Alfred McAlpine Group has entered into contractual arrangements in each case where the absence of such Consent would have a material adverse effect on the wider Carillion Group taken as a whole and all such Consents together with all material Consents reasonably necessary to carry on the business of any member of the wider Alfred McAlpine Group which is material remaining in full force and effect and all filings necessary for such purpose having been made and there being no notice or intimation of any intention to revoke or not to renew any of the same at the time at which the Acquisition otherwise becomes Effective and all necessary statutory or regulatory obligations in any jurisdiction having been complied with in all material respects; f) except as (i) publicly announced in accordance with the Listing Rules by Alfred McAlpine prior to 10 December 2007, (ii) disclosed in the annual report and accounts of Alfred McAlpine for the financial year ended 31 December 2006 , (iii) disclosed in the interim report of Alfred McAlpine for the six months ended 30 June 2007 or (iv) as fairly disclosed in writing by or on behalf of Alfred McAlpine to Carillion or its advisers prior to 10 December 2007, no member of the wider Alfred McAlpine Group having, since 31 December 2006: (i) save as between Alfred McAlpine and wholly-owned subsidiaries of Alfred McAlpine or for Alfred McAlpine Shares issued pursuant to the exercise of options granted or vesting of awards made under the Alfred McAlpine Share Schemes, issued, authorised or proposed the issue of additional shares of any class; (ii) save as between Alfred McAlpine and wholly-owned subsidiaries of Alfred McAlpine or for the grant of options or making of awards under the Alfred McAlpine Share Schemes, issued or agreed to issue, authorised or proposed the issue of securities convertible or exchangeable into shares of any class or rights, warrants or options to subscribe for, or acquire, any such shares or convertible securities; (iii) other than to another member of the Alfred McAlpine Group, recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus, dividend or other distribution whether payable in cash or otherwise; (iv) save for intra-Alfred McAlpine Group transactions, merged or demerged with any body corporate or acquired or disposed of or transferred, mortgaged or charged or created any security interest over any assets or any right, title or interest in any asset (including shares and trade investments) or authorised or proposed or announced any intention to propose any merger, demerger, acquisition or disposal, transfer, mortgage, charge or security interest, in each case, other than in the ordinary course of business and to an extent which is material in the context of the Alfred McAlpine Group taken as a whole; (v) save for intra-Alfred McAlpine Group transactions, made or authorised or proposed or announced an intention to propose any change in its loan capital; (vi) save for intra-Alfred McAlpine Group transactions, issued, authorised or proposed the issue of any debentures or save for intra-Alfred McAlpine Group transactions and save in the ordinary course of business, incurred or increased any indebtedness or become subject to any guarantee or contingent liability; (vii) save for intra-Alfred McAlpine Group transactions purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares or other securities or reduced or, save in respect to the matters mentioned in sub-paragraph f(i) above, made any other change to any part of its share capital; (viii) implemented, or authorised, proposed or announced its intention to implement, any reconstruction, amalgamation, scheme, commitment or other transaction or arrangement otherwise than in the ordinary course of business which in each case is material in the context of the Alfred McAlpine Group taken as a whole or entered into or changed the terms of any contract with any director or any member of Alfred McAlpine's Group Executive Committee; (ix) entered into or varied or authorised, proposed or announced its intention to enter into or vary any contract, transaction or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, onerous or unusual nature or magnitude or which is or would be reasonably likely to be materially restrictive on the businesses of the wider Alfred McAlpine Group or the wider Carillion Group taken as a whole or which involves or could involve an obligation of such a nature or magnitude or which is other than in the ordinary course of business, and in each such case is or would be reasonably likely to be material in the context of the wider Alfred McAlpine Group; (x) (other than in respect of a member which is dormant and was solvent at the relevant time) taken any corporate action or had any legal proceedings started or threatened against it for its winding-up, dissolution or reorganisation or for the appointment of a receiver, administrative receiver, administrator, trustee or similar officer of all or any of its assets or revenues or any analogous proceedings in any jurisdiction or had any such person appointed which in each case is material in the context of the Alfred McAlpine Group taken as a whole; (xii) waived or compromised any claim otherwise than in the ordinary course of business which is in each case material in the context of the wider Alfred McAlpine Group as a whole; or (xiii) save for the proposed disposal of the Slate Business, entered into any contract, commitment, arrangement or agreement otherwise than in the ordinary course of business or passed any resolution or made any offer (which remains open for acceptance) with respect to or announced any intention to, or to propose to, effect any of the transactions, matters or events referred to in this condition (f), and, for the purposes of paragraphs (iii), (iv), (v) and (vi) of this condition (f), the term 'Alfred McAlpine Group' shall mean Alfred McAlpine and its wholly-owned subsidiaries; g) except as (i) publicly announced in accordance with the Listing Rules by Alfred McAlpine prior to 10 December 2007, (ii) disclosed in the annual report and accounts of Alfred McAlpine for the financial year ended 31 December 2006 , (iii) disclosed in the interim report of Alfred McAlpine for the six months ended 30 June 2007 or (iv) as fairly disclosed in writing by or on behalf of Alfred McAlpine to Carillion or its advisers prior to 10 December 2007: (i) no material adverse change or deterioration having occurred in the business, assets, financial or trading position or profits of the wider Alfred McAlpine Group taken as a whole; (ii) no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the wider Alfred McAlpine Group is or may become a party (whether as a claimant, defendant or otherwise) and no investigation by any Third Party against or in respect of any member of the wider Alfred McAlpine Group having been instituted, announced or threatened in writing by or against or remaining outstanding in respect of any member of the wider Alfred McAlpine Group which in any such case would have or would reasonably be expected to have a material adverse effect on the wider Alfred McAlpine Group as a whole; (iii) no contingent or other liability having arisen which would have or would reasonably be expected to have a material adverse effect on the wider Alfred McAlpine Group as a whole; (iv) no steps have been taken which are reasonably likely to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the wider Alfred McAlpine Group which is necessary for the proper carrying on of its business and the absence of which in any case would have or would reasonably be expected to have a material adverse effect on the wider Alfred McAlpine Group as a whole; h) except as (i) publicly announced in accordance with the Listing Rules by Alfred McAlpine prior to 10 December 2007, (ii) disclosed in the annual report and accounts of Alfred McAlpine for the financial year ended 31 December 2006 , (iii) disclosed in the interim report of Alfred McAlpine for the six months ended 30 June 2007 or (iv) as fairly disclosed in writing by or on behalf of Alfred McAlpine to Carillion or its advisers prior to 10 December 2007, Carillion not having discovered: (i) that any financial, business or other information concerning the wider Alfred McAlpine Group as contained in the information publicly disclosed at any time by or on behalf of any member of the wider Alfred McAlpine Group is materially misleading, contains a material misrepresentation of fact or omits to state a fact necessary to make that information not materially misleading and which was not subsequently corrected before 10 December 2007 by public disclosure; or (ii) that any member of the wider Alfred McAlpine Group is subject to any liability (contingent or otherwise) which is material in the context of the Alfred McAlpine Group as a whole; i) Carillion not having discovered that: (i) any past or present member of the wider Alfred McAlpine Group has failed to comply with any and/or all applicable legislation or regulation, of any jurisdiction with regard to the disposal, spillage, release, discharge, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or harm human health or animal health or otherwise relating to environmental matters, or that there has otherwise been any such disposal, spillage, release, discharge, leak or emission (whether or not the same constituted a non-compliance by any person with any such legislation or regulations, and wherever the same may have taken place) any of which disposal, spillage, release, discharge, leak or emission would be likely to give rise to any liability (actual or contingent) on the part of any member of the wider Alfred McAlpine Group and which is material in the context of the wider Alfred McAlpine Group as a whole; or (ii) there is, or is likely to be, for that or any other reason whatsoever, any material liability (actual or contingent) of any past or present member of the wider Alfred McAlpine Group to make good, repair, reinstate or clean up any property or any controlled waters now or previously owned, occupied, operated or made use of or controlled by any such past or present member of the wider Alfred McAlpine Group, under any environmental legislation, regulation, notice, circular or order of any government, governmental, quasi-governmental, state or local government, supranational, statutory or other regulatory body, agency, court, association or any other person or body in any jurisdiction and which is material in the context of the wider Alfred McAlpine Group as a whole. 4 For the purposes of these conditions the 'wider Alfred McAlpine Group' means Alfred McAlpine and its subsidiary undertakings, associated undertakings and any other undertaking in which Alfred McAlpine and/or such undertakings (aggregating their interests) have a significant interest and the 'wider Carillion Group' means Carillion and its subsidiary undertakings, associated undertakings and any other undertaking in which Carillion and/or such undertakings (aggregating their interests) have a significant interest and for these purposes 'subsidiary undertaking', 'associated undertaking' and 'undertaking' have the meanings given by the Companies Act 1985, other than paragraph 20(1)(b) of Schedule 4A to that Act which shall be excluded for this purpose, and 'significant interest' means a direct or indirect interest in ten per cent. or more of the equity share capital (as defined in that Act). 5 Subject to the requirements of the Panel, Carillion reserves the right to waive, in whole or in part, all or any of the above conditions, except conditions 1, 2 and 3(b). 6 If Carillion is required by the Panel to make an offer for Alfred McAlpine Shares under the provisions of Rule 9 of the City Code, Carillion may make such alterations to any of the above conditions as are necessary to comply with the provisions of that Rule. 7 Unless the Panel otherwise consents, the Acquisition will not proceed if, after the date of this announcement and before the Alfred McAlpine Extraordinary General Meeting, the Acquisition is referred to the Competition Commission. 8 The Acquisition will be governed by English law and be subject to the jurisdiction of the English courts, to the conditions set out in this announcement and in the formal Scheme Document and related form of election. PART B Certain further terms of the Acquisition 1 Fractions of New Carillion Shares will not be allotted or issued pursuant to the Scheme. Fractional entitlements to New Carillion Shares will be aggregated and sold in the market and the net proceeds of sale distributed pro rata to persons entitled thereto. 2 Subject to the consent of the Panel (if applicable), Carillion reserves the right to elect to implement the Acquisition by way of a an Offer. In such event, the Acquisition will be implemented on the same terms (with such amendments as may be necessary or as may be required to incorporate an acceptance condition set at 90 per cent. of the shares to which the Acquisition relates or such other percentage as may be required by the Panel and subject to the availability of an exemption from the registration requirements of the US Securities Act and such amendments that Carillion deems necessary in connection with US securities laws), so far as applicable, as those which would apply to the implementation of the Acquisition by means of the Scheme. 3 This announcement is not an offer of securities for sale in the United States and the New Carillion Shares, which will be issued in connection with the Acquisition, have not been, and will not be, registered under the US Securities Act or under the securities law of any state, district or other jurisdiction of the United States, Australia, Canada or Japan and no regulatory clearance in respect of the New Carillion Shares has been, or will be, applied for in any jurisdiction other than the UK. The New Carillion Shares may not be offered or sold in the United States absent registration under the US Securities Act or an exemption from registration. It is expected that the New Carillion Shares will be issued in reliance upon the exemption from the registration requirements of the US Securities Act provided by Section 3(a)(10) thereof. Under applicable US securities laws, persons (whether or not US persons) who are or will be 'affiliates' (for the purposes of the US Securities Act) of Carillion or Alfred McAlpine prior to, or of Carillion after, the Effective Date will be subject to certain transfer restrictions relating to the New Carillion Shares received in connection with the Acquisition. 4 Unless Carillion otherwise determines, relevant clearances and registrations have not been, nor will they be, sought or obtained, nor have any steps been taken, nor will any steps be taken, to enable the Loan Notes to be publicly offered in compliance with applicable securities laws of any jurisdiction. The Loan Notes have not been, nor will they be, registered under the Securities Act or under the securities laws of any state, district or other jurisdiction of the United States and the Loan Notes are not being offered in, and may not be transferred into, the United States. Accordingly, Scheme Shareholders will not be eligible to elect to receive Loan Notes. The Loan Notes may not (subject to certain limited exceptions) be offered, sold, transferred or delivered, directly or indirectly, in any other jurisdiction (including, without limitation, in Australia, Canada or Japan) where to do so would violate the laws of that jurisdiction or would require registration thereof in such jurisdiction. APPENDIX II PROFIT FORECAST The key basis of preparation of the profit forecast is as follows: * the unaudited interim financial statements of Carillion plc for the six months ended 30 June 2007 issued by Carillion plc on 5 September 2007; * the unaudited management accounts of Carillion plc for the four month period ended 31 October 2007; and * the unaudited forecast of Carillion plc for the two months ended 31 December 2007. The accounting policies adopted in preparing the profit forecast are consistent with those normally adopted by Carillion. There have been no new changes or amendments to policies during 2007. The policies adopted by Carillion in 2006 can be seen in its published annual report. The profit forecast is based on the following key underlying assumptions: External factors * Rates of interest, taxation, inflation and foreign currency exchange rates will not change significantly during the forecast period. In respect of UK taxation no changes are expected in addition to the announced change to the corporation tax rate to 28 per cent. in the year ending 31 December 2008. * Any changes in relevant legislation, governmental policy or other regulatory requirements will not materially affect the results of the Group. * There will be no material adverse change in economic conditions in the markets in which the Group operates. * There will be no serious industrial disputes or other interruptions in business arising from circumstances outside the Group's control which would adversely affect the Group, its customers or suppliers. * There will be no material unprovided costs arising from environmental exposures of which the Group is not yet aware. Internal factors * The costs of restructuring the Rail division and disposing of certain rail assets can be achieved within the available provisions. * Any costs from the potential acquisition of Alfred McAlpine are either capitalised as part of the investment cost (if the acquisition proceeds), or treated as non-operating (if the acquisition is aborted). * No conclusions will be reached by the OFT in their enquiry into the Construction Industry in 2007. * Taxation on underlying profit has been included at a rate of 25 per cent. Private & confidential The Directors Carillion plc 24 Birch Street Wolverhampton WV1 4HY Lazard & Co., Limited 50 Stratton Street London W11 8LL 10 December 2007 Dear Sirs Carillion plc We report on the profit forecast comprising the forecast of growth in underlying earnings (defined as profit after tax but before amortisation of intangibles (arising from business combinations), goodwill impairment, reorganisation costs and non operating items) of Carillion plc ('the Company') and its subsidiaries ('the Group') for the year ending 31 December 2007 (the 'Profit Forecast'). The Profit Forecast, and the material assumptions upon which it is based, are set out on page 44 of the Rule 2.5 Announcement ('the Rule 2.5 Announcement'). This report is required by Rule 28.3 (b) of the City Code on Takeovers and Mergers ('the City Code') and is given for the purpose of complying with that rule and for no other purpose. Responsibilities It is the responsibility of the directors of the Company ('the Directors') to prepare the Profit Forecast in accordance with the requirements of the City Code. It is our responsibility to form an opinion as required by the City Code as to the proper compilation of the profit forecast and to report that opinion to you. Save for any responsibility which we may have to those persons to whom this report is expressly addressed, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with Rule 28.4 of the City Code, consenting to its inclusion in the Rule 2.5 Announcement. Basis of Preparation of the Profit Forecast The Profit Forecast has been prepared on the basis stated on page 44 of the Rule 2.5 Announcement and is based on the unaudited interim financial results for the six months ended 30 June, the unaudited management accounts for the four months ended 31 October 2007 and a forecast to 31 December 2007. The Profit Forecast is required to be presented on a basis consistent with the accounting policies of the Group. Basis of opinion We conducted our work in accordance with Standards for Investment Reporting issued the Auditing Practices Board in the United Kingdom. Our work included evaluating the basis on which the historical financial information included in the Profit Forecast has been prepared and considering whether the Profit Forecast has been accurately computed based upon the disclosed assumptions and the accounting policies of the Group. Whilst the assumptions upon which the Profit Forecast are based are solely the responsibility of the Directors, we considered whether anything came to our attention to indicate that any of the assumptions adopted by the Directors which, in our opinion, are necessary for a proper understanding of the Profit Forecast have not been disclosed or if any material assumption made by the Directors appears to us to be unrealistic. We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with reasonable assurance that the Profit Forecast has been properly compiled on the basis stated. Since the Profit Forecast and the assumptions on which it is based relate to the future and may therefore be affected by unforeseen events, we can express no opinion as to whether the actual results reported will correspond to those shown in the Profit Forecast and differences may be material. Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in the United States of America or other jurisdictions and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices. Opinion In our opinion the Profit Forecast, so far as the accounting policies and calculations are concerned, has been properly compiled on the basis of the assumptions made by the Directors and the basis of accounting used is consistent with the accounting policies of the Group. Yours faithfully KPMG Audit Plc The Directors Carillion plc 24 Birch Street Wolverhampton WV1 4HY 10 December 2007 Dear Sirs Carillion plc's offer for Alfred McAlpine plc We refer to the forecast made by Carillion plc ('Carillion') in the Rule 2.5 Announcement dated 10 December 2007 (the 'Acquisition Announcement'), a copy of which is attached to this letter, comprising a forecast of the profit for the group for the year ending 31 December 2007 (the 'Profit Forecast'). We have discussed the Profit Forecast and the bases and assumptions on which it has been prepared with you as directors of Carillion (the 'Directors') and with KPMG Audit Plc, Carillion's auditors. You have confirmed to us that all information relevant to the Profit Forecast has been disclosed to us. We have relied on the accuracy and completeness of all such information and have assumed such accuracy and completeness for the purposes of providing this letter to you. We have also discussed the accounting policies and basis of calculation for the Profit Forecast with KPMG Audit Plc and we have considered their letter dated 10 December 2007 addressed to you and us on this matter. On the basis of the foregoing, we consider that the Profit Forecast, for which you as Directors are solely responsible, has been compiled with due care and consideration by the Directors. This letter is provided to you solely in connection with Rule 28.3(b) of the City Code on Takeovers and Mergers and for no other purpose. Accordingly, save for any responsibility which we may have to those persons to whom this letter is expressly addressed, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any person for any loss suffered by any such person as a result of, or in connection with, this letter. Yours faithfully, For and on behalf of Lazard & Co., Limited Peter Warner Managing Director APPENDIX III SOURCES AND BASES 1. Unless otherwise stated: * financial information relating to Carillion has been extracted or provided (without material adjustment) from the audited annual report and accounts for Carillion for the year ended 31 December 2006 reported under IFRS and, as relevant, the unaudited interim report and accounts for the six months ended 30 June 2007 reported under IFRS; and * financial information relating to Alfred McAlpine has been extracted or provided (without material adjustment) from the audited annual report and accounts for Alfred McAlpine for the year ended 31 December 2006 reported under IFRS and, as relevant, the unaudited interim report and accounts for the six months ended 30 June 2007 reported under IFRS. 2. The terms of the Acquisition value each Alfred McAlpine Share at 558 pence. The Acquisition price is based on a share price of 363.25 pence per Carillion Share (the Closing Price on 7 December 2007, the last Business Day prior to this announcement) and 1.08 Carillion Shares to be issued for each Alfred McAlpine Share representing 392.3 pence in Carillion Shares, plus 165.4 pence in cash. 3. As at the close of business on 7 December 2007, Carillion had in issue 281,242,738 ordinary shares of 50 pence each; and Alfred McAlpine had in issue 102,532,195 ordinary shares of 25 pence each and 4,506,780 Alfred McAlpine Preference Shares. 4. The value of the Acquisition is calculated: * by reference to a price of 363.25 pence per Carillion Share (the Closing Price on 7 December 2007, the last Business Day prior to this announcement); and * on the basis of the issued ordinary share capital of Alfred McAlpine referred to in paragraph 3 above. 5. For the purposes of this announcement, pro forma numbers represent the sum of Carillion's and Alfred McAlpine's reported figures for the year ended 31 December 2006. 6. The maximum number of New Carillion Shares to be issued pursuant to the Acquisition is calculated on the basis of: * the fully diluted ordinary share capital of Alfred McAlpine referred to in paragraph 7 below; and * the issued ordinary share capital of Carillion referred to in paragraph 3 above. 7. The fully diluted ordinary share capital of Alfred McAlpine (being 105,256,953 Alfred McAlpine Shares) is calculated on the basis of: * the number of issued Alfred McAlpine Shares on 7 December 2007, the last Business Day prior to the date of this announcement, being 102,532,195 Alfred McAlpine Shares; and * any further Alfred McAlpine Shares which may be issued on or after the date of this announcement on the exercise of options or vesting of awards under the Alfred McAlpine Share Schemes assuming that the Scheme will be sanctioned by the Court on a date no later than 27 February 2008, amounting in aggregate to 2,724,758 Alfred McAlpine Shares. 8. The expected operational cost savings have been calculated on the basis of the existing cost and operating structures of the Carillion Group and the Alfred McAlpine Group respectively. These statements of estimated cost savings and one-off costs for achieving them relate to future actions and circumstances which, by their nature, involve risks, uncertainties and other factors. Because of this, the cost savings referred to may not be achieved, or those achieved could be materially different from those estimated. This statement is not intended to be a profit forecast and should not be interpreted to mean that the earnings per share in 2008, 2009 or in any subsequent financial period, would necessarily match or be greater than those for the relevant preceding financial period. 9. The statement that the Acquisition is expected to deliver materially enhanced earnings for Carillion in 2009 (the first full year following completion of the Acquisition) relates to future actions and circumstances, which, by their nature, involve risks, uncertainties and other factors. This statement does not constitute a profit forecast and should not be interpreted to mean that earnings for that year or any subsequent financial period would necessarily match or be greater than those for any preceding financial period. Earnings in this context represent net after tax earnings before the amortisation of intangible assets and non-operating items. 10. For the purposes of this announcement, net debt / cash represents total debt, excluding finance leases, less total cash balances (including cash in joint ventures). 11. Underlying earnings means before intangible amortisation, goodwill impairment, restructuring costs and non-operating items. 12. Carillion has agreed with the Panel's ruling that this statement represents a profit forecast (the 'Profit Forecast') for the purpose of Rule 28 of the City Code. As such it is a requirement that this statement should be reported on by Carillion's auditors and financial advisers in accordance with Rule 28 of the City Code. These reports and the basis and principal assumptions underlying the Profit Forecast are included in Appendix II to this announcement. APPENDIX IV DEFINITIONS In this announcement, the following definitions apply unless the context requires otherwise: 'Acquisition' the proposed acquisition of the entire issued and to be issued ordinary share capital of Alfred McAlpine by Carillion 'Alfred McAlpine' Alfred McAlpine plc, registered in England and Wales (no. 1367044) 'Alfred McAlpine Board' the board of Alfred McAlpine Directors 'Alfred McAlpine Directors' the directors of Alfred McAlpine 'Alfred McAlpine Extraordinary the extraordinary general meeting of the Alfred General Meeting' McAlpine Shareholders (and any adjournment thereof) convened for the purposes of considering and, if thought fit, approving certain resolutions in connection with the Scheme 'Alfred McAlpine Group' Alfred McAlpine and its subsidiary undertakings 'Alfred McAlpine Ordinary ordinary shares of 25 pence each in the capital Shares' of Alfred McAlpine 'Alfred McAlpine Preference the 9% cumulative preference shares of Â£1 each Shares' in the capital of Alfred McAlpine 'Alfred McAlpine Shareholders' holders of Alfred McAlpine Shares 'Alfred McAlpine Shares' (i) prior to the Reorganisation Record Time, Alfred McAlpine Ordinary Shares and (ii) after the Reorganisation Record Time, the shares in the capital of Alfred McAlpine as reclassified 'Alfred McAlpine Share Schemes' (i) the Alfred McAlpine Executive Share Option Scheme (1991); (ii) the Alfred McAlpine plc Executive Share Option Scheme 2000; (iii) the Alfred McAlpine Restricted Share Plan; (iv) the Alfred McAlpine Long Term Incentive Plan 2005; (v) the Alfred McAlpine plc Savings Related Share Option Scheme 1998; (vi) the Alfred McAlpine plc Buy as You Earn Share Scheme; and (vii) the Alfred McAlpine Business Services Limited Profit Sharing Scheme 'Alfred McAlpine Trustee' the trustees of the Alfred McAlpine Pension Plan; 'Australia' the Commonwealth of Australia, its states, territories or possessions and all areas subject to its jurisdiction or any sub-division thereof 'Business Day' any day on which banks are generally open in England and Wales for the transaction of business, other than a Saturday, Sunday or public holiday 'Canada' Canada, its provinces and territories and all areas subject to its jurisdiction or any political sub-division thereof 'Capital Reduction' the proposed reduction of the share capital of Alfred McAlpine pursuant to the Scheme 'Carillion' Carillion plc, registered in England and Wales (no. 3782379) 'Carillion Board' the board of Carillion Directors 'Carillion Directors' the directors of Carillion ''Carillion Extraordinary General the extraordinary general meeting of Carillion Meeting' to consider and, if thought fit, to approve the Acquisition 'Carillion Group' Carillion and its subsidiary undertakings 'Carillion Shareholder Circular' the circular to be sent to Carillion Shareholders outlining the Acquisition and containing the notice convening the Carillion Extraordinary General Meeting 'Carillion Shareholders' holders of Carillion Shares 'City Code' or 'Code' the City Code on Takeovers and Mergers 'Closing Price' the closing middle market price of a relevant share as derived from SEDOL on any particular day 'Conditions' the conditions to the Acquisition and the Scheme set out in Appendix I of this announcement 'Court' the High Court of Justice in England and Wales 'Court Hearings' the two separate hearings by the Court of the claim form to sanction the Scheme and to confirm the Capital Reduction 'Court Orders' the First Court Order and the Second Court Order 'Effective' in the context of the Acquisition: (i) if the Acquisition is implemented by way of the Scheme, the Scheme having become effective pursuant to its terms; or (ii) if the Acquisition is implemented by way of an Offer, such Offer having been declared or become unconditional in all respects in accordance with the requirements of the City Code ''Effective Date' the date on which the Acquisition becomes Effective 'Enlarged Group' the Carillion Group (including the Alfred McAlpine Group) following the Effective Date 'First Court Order' the order of the Court sanctioning the Scheme under section 425 of the Companies Act 1985 'Hogarth' Hogarth Partnership 'Implementation Agreement' the agreement dated 9 December 2007 between Carillion and Alfred McAlpine in relation to the implementation of the Acquisition 'Japan' Japan, its cities, prefectures, territories and possessions and all areas subject to its jurisdiction or any sub-division thereof 'JPMorgan Cazenove' JPMorgan Cazenove Limited 'Lazard' Lazard & Co., Limited 'Listing Rules' the rules and regulations of the UKLA, as amended 'Loan Note Alternative' the option whereby Alfred McAlpine Shareholders (other than certain Overseas Shareholders and Scheme Shareholders in the United States) may elect to receive Loan Notes instead of some or all of the cash consideration to which they would otherwise be entitled under the Acquisition, including under the Mix and Match Facility 'Loan Notes' the floating rate loan notes of Carillion issued pursuant to the Loan Note Alternative 'London Stock Exchange' London Stock Exchange plc, together with any successors thereto 'Mix and Match Facility' the mix and match facility under which Alfred McAlpine Shareholders may, subject to availability elect to vary the proportion of New Carillion Shares and cash they will receive under the Scheme 'Mowlem' Mowlem plc, now Carillion JM Limited 'Morgan Stanley' Morgan Stanley & Co. International plc 'New Carillion Shares' the Carillion Shares proposed to be issued and credited as fully paid pursuant to the Scheme 'Offer' a takeover offer as that term is defined in section 974 of the Companies Act 2006 'Offer Document' should the Acquisition be implemented by means of an Offer, the document to be sent to Alfred McAlpine Shareholders which will contain, inter alia, the terms and conditions of the Offer 'Official List' the official list of the UKLA 'Oriel Securities' Oriel Securities Limited 'Overseas Persons' Scheme Shareholders who are resident in, ordinarily resident in, or citizens of, jurisdictions outside the United Kingdom and the United States where, as relevant, the Mix and Match Facility or the sale, issue or transfer of the Loan Notes would be a contravention of applicable law 'Panel' the Panel on Takeovers and Mergers 'Pounds', 'pence' and 'Â£' the lawful currency of the United Kingdom 'PPP' Public Private Partnership 'Profit Forecast' has the meaning given in Note 12, Appendix III 'Prospectus' means the prospectus to be published by Carillion containing information on, amongst other things, Carillion, the Enlarged Group and the New Carillion Shares 'Registrar of Companies' the Registrar of Companies in England and Wales, within the meaning of the Companies Act 1985 'Reorganisation Record Time' 6.00 pm on the Business Day immediately proceeding the Court hearing to confirm the Capital Reduction 'Scheme' the proposed scheme of arrangement under section 425 of the Companies Act 1985 between Alfred McAlpine and the Scheme Shareholders to implement the Acquisition 'Scheme Document' the document to be dispatched to Scheme Shareholders in relation to the Scheme comprising the particulars required by section 426 of the Companies Act 1985 'Scheme Meeting' the meeting of Scheme Shareholders to be convened by order of the Court under section 425 of the Companies Act 1985 to consider and, if thought fit, approve the Scheme (with or without amendment), and any adjournment thereof 'Scheme Shareholders' holders of Scheme Shares 'Scheme Shares' the Alfred McAlpine Shares: (i) in issue at the date of the Scheme Document; (ii) issued after the date of the Scheme Document and before the Scheme Voting Record Time; and (iii) issued at or after the Voting Record Time and before the Reorganisation Record Time on terms that the original or any subsequent holders thereof are, or shall have agreed in writing to be, bound by the Scheme in each case other than Alfred McAlpine Shares (if any) beneficially owned by the Carillion Group and the Alfred McAlpine Preference Shares 'Scheme Voting Record Time' 6.00 p.m. on the day which is two days before the Scheme Meeting or, if the Scheme Meeting is adjourned, 6.00 p.m. on the second day before the date of such adjourned meeting 'Second Court Order' the order of the Court confirming the Capital Reduction under section 137 of the Companies Act 1985 and authorising the re-registration of Alfred McAlpine as a private limited company under section 139 of the Companies Act 1985 'SEDOL' the London Stock Exchange Daily Official List 'Slate Business' means the business of Alfred McAlpine Slate Limited and Hilltop Slate Inc., both wholly owned subsidiaries of Alfred McAlpine, which include the roofing and architectural slate business and aggregates business based in North Wales and the roofing and architectural slate business based in North Eastern United States 'subsidiary', 'subsidiary have the meanings ascribed to them under the undertaking', 'associated Companies Act 1985 undertaking' and 'undertaking' 'Tricorn Partners' Tricorn Partners LLP 'UKLA' the UK Listing Authority, being the Financial Services Authority acting in its capacity as the competent authority for the purposes of Part IV of the Financial Services and Markets Act 2000 'United Kingdom' or 'UK' United Kingdom of Great Britain and Northern Ireland 'United States', 'US' or 'USA' the United States of America, its territories and possessions, any State of the United States of America and the District of Columbia 'US Securities Act' the United States Securities Act of 1933 (as amended) 'VAT' any value added tax imposed under Directive 2006 /112/EC, the Value Added Tax Act 1994 and/or any primary or secondary legislation supplemental to either of them Unless otherwise stated, all times referred to in this announcement are references to the time in London. Any reference to any provision of any legislation shall include any amendment, modification, re-enactment or extension thereof. This information is provided by RNS The company news service from the London Stock Exchange

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