Capital Raising

RNS Number : 3325Y

IP Group PLC

23 January 2014

 



THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR THE UNITED STATES OR INTO ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OR BREACH OF ANY APPLICABLE LAW.  PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT, WHICH DOES NOT CONSTITUTE A PROSPECTUS OR DOCUMENT EQUIVALENT TO A PROSPECTUS, IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES AND NEITHER THIS ANNOUNCEMENT NOR ANYTHING HEREIN FORMS THE BASIS FOR ANY CONTRACT OR COMMITMENT WHATSOEVER.  SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION AND THE SECURITIES DESCRIBED HEREIN WILL BE SOLD IN ACCORDANCE WITH ALL APPLICABLE LAWS AND REGULATIONS.

THE DEFINED TERMS SET OUT IN THE APPENDIX APPLY IN THIS ANNOUNCEMENT.

23 January 2014

IP Group plc

("IP Group" or the "Company")

Proposed Firm Placing and Placing, Open Offer and Offer for Subscription

and Notice of General Meeting

The Board of IP Group announces a share issue to raise gross proceeds of up to approximately £75.0 million (approximately £72.9 million net of expenses) through the issue of up to 45,454,856 Capital Raising Shares by way of a Firm Placing and Placing, Open Offer and Offer for Subscription (together the "Capital Raising") at a price of 165 pence per New Share.

The Issue Price represents a discount of 8.3 per cent. to the closing middle market price (as derived from the Daily Official List) of 179.9 pence per Ordinary Share on 22 January 2014.

In addition to the Capital Raising, the Boards of IP Group plc and Fusion IP plc announced today that they had reached agreement on the terms of a unanimously recommended all-share offer to be made by IP Group for the entire issued and to be issued share capital of Fusion not already owned by IP Group, to be implemented by way of a scheme of arrangement by Fusion under Part 26 of the Companies Act.

The Capital Raising and the Acquisition are not interconditional and neither is contingent on the other.

IP Group will shortly be publishing a Prospectus in connection with the Capital Raising and will be convening a General Meeting to approve certain matters necessary to implement the proposed Capital Raising.

Summary

·           Issue of 30,303,030 new Ordinary Shares through a Firm Placing raising gross proceeds of £50.0 million. The Firm Placing is underwritten by Numis Securities

·           Issue of up to 15,151,826 new Ordinary Shares pursuant to a non-underwritten Placing, Open Offer and Offer for Subscription to raise gross proceeds of up to approximately £25.0 million

·           Qualifying Shareholders are being offered the opportunity to participate in the Open Offer on the basis of 4.0377 Open Offer Share for every 100 Existing Ordinary Shares

·           Qualifying Shareholders are also being offered the opportunity to subscribe for Capital Raising Shares in addition to their Open Offer Entitlements under the Excess Application Facility

·           The Board has the ability to increase the size of the Capital Raising by up to one third should there be sufficient demand so that the total gross proceeds would be approximately £100.0 million

·           The Capital Raising will enable IP Group to accelerate the growth of the Group by increasing its overall rate of capital deployment in both its current portfolio and in new early stage opportunities that progress to the post-seed stage

·           The Capital Raising will also provide capital to allow IP Group to develop novel therapeutics with such opportunities being developed through majority-owned single-asset development vehicles or spin-out companies

·           The Capital Raising will provide capital to fund the growth of the Group's developing US business

·           The Capital Raising is conditional on the passing of the Resolutions at the General Meeting.  If the Resolutions are passed and the other conditions to the Capital Raising are satisfied, it is expected that dealings in the Capital Raising Shares will commence at 8.00 a.m. on 14 February 2014

The Prospectus concerning the Capital Raising will shortly be sent to Shareholders and will also be made available on the Company's website www.ipgroupplc.com. Further details are set out in this announcement and in the Prospectus. A copy of the Prospectus will be submitted to the National Storage Mechanism and will shortly be available for inspection at: http://www.hemscott.com/nsm.do.

Alan Aubrey, Chief Executive Officer of IP Group, said:

"We believe there is a significant opportunity to accelerate growth by increasing our overall rate of capital deployment into both our existing portfolio and in new early stage opportunities both in the UK and internationally. In addition to strengthening the Group's financial position, the capital raising will also enable IP Group to take advantage of opportunities to broaden its access to world class IP. We remain confident in the prospects for the group and would like to thank all of our stakeholders for their continued support."

Readers are referred to the important notice that applies to this announcement. Unless otherwise stated, references to time contained in this announcement are to UK time.  This announcement has been issued by and is the sole responsibility of IP Group plc.

For further information contact:

IP Group plc
Alan Aubrey, Chief Executive Officer	[phone]
Greg Smith, Chief Financial Officer Liz Vaughan-Adams, Communications	[phone] [phone] [phone] [e-mail]
Numis Securities Limited	[phone]
Corporate Finance: Etienne Bottari / Michael Meade / Freddie Barnfield
Corporate Broking: James Black
FTI Consulting	[phone]
Ben Atwell
John Dineen

IMPORTANT NOTICE

This announcement is an advertisement and does not constitute a prospectus or prospectus equivalent document.  Nothing in this announcement should be interpreted as a term or condition of the Open Offer or the Offer for Subscription.  Investors should not subscribe for or purchase any shares in the Open Offer or the Offer for Subscription except on the basis of the information contained in the Prospectus to be published shortly or which is incorporated by reference into the Prospectus.  The Prospectus, when published, will be made available on the Company's website (www.ipgroupplc.com) and will be available for inspection at: http://www.hemscott.com/nsm.do.

This announcement does not constitute or form part of any offer or invitation to purchase, or otherwise acquire, subscribe for, sell, otherwise dispose of or issue, or any solicitation of any offer to sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for, any security in the capital of the Company in any jurisdiction.

The information contained in this announcement is not for release, publication or distribution to persons in the United States, Canada, Australia, Japan, New Zealand or The Republic of South Africa or in any jurisdiction where to do so would breach any applicable law.  The Capital Raising Shares have not been and will not be registered under the securities laws of such jurisdictions and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within such jurisdictions except pursuant to an exemption from and in compliance with any applicable securities laws. No public offer of the Capital Raising Shares is being made by virtue of this announcement into Australia, Canada, Japan, New Zealand, the Republic of South Africa or the United States or any other jurisdiction outside the United Kingdom in which such offer would be lawful. No action has been or will be taken by the Company, Numis or any other person to permit a public offering or distribution of this announcement or any other offering or publicity materials or the Capital Raising Shares in any jurisdiction where action for that purpose may be required, other than in the United Kingdom.

The Capital Raising Shares and any entitlements pursuant to the Open Offer and Offer for Subscription will not be registered under the US Securities Act of 1933, as amended (the "US Securities Act"), or the relevant laws of any state, province or territory of the United States. Unless so registered, the Capital Raising Shares and any entitlements pursuant to the Open Offer and Offer for Subscription may not be offered, sold, taken up or exercised, within the United States except in a transaction that is exempt from, or not subject to, the registration requirements of the US Securities Act. There will be no public offer in the United States. Outside the United States, the Capital Raising Shares are being offered in reliance on Regulation S under the US Securities Act. The Capital Raising Shares are being offered within the United States only to persons reasonably believed to be both qualified institutional buyers (within the meaning of Rule 144A under the US Securities Act) and qualified purchasers (as defined in Section 2(a)(51) of the US Investment Company Act of 1940, as amended).

This announcement has been issued by and is the sole responsibility of the Company.

Numis Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting for IP Group plc and for no-one else in connection with the contents of this announcement and will not be responsible to anyone other than IP Group plc for providing the protections afforded to clients of Numis Securities Limited, or for providing advice in relation to the contents of this announcement or any matters referred to herein.  Numis Securities Limited is not responsible for the contents of this announcement.  Numis Securities Limited has given and not withdrawn its written consent to the issue of this announcement with the inclusion of the reference to its name in the form and context in which it is included.

This announcement has been prepared for the purposes of complying with the applicable law and regulation of the United Kingdom 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 the United Kingdom.

Note regarding forward-looking statements:

This announcement includes statements that are, or may be deemed to be, forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "anticipates", "believes", "estimates", "expects", "intends", "may", "plans", "projects", "should" or "will", or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include, but are not limited to, statements regarding the Company's and/or Directors' intentions, beliefs or current expectations concerning, amongst other things, the Group's results of operations, financial position, prospects, growth, strategies and expectations for the Company's or its portfolio companies principal markets.

Any forward-looking statements in this announcement reflect the Company's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Group's operations, results of operations and growth strategy. Investors should specifically consider the factors identified in this announcement which could cause actual results to differ before making an investment decision. Subject to the requirements of the Prospectus Rules, the Disclosure and Transparency Rules and the Listing Rules, none of the Company, the Directors and Numis undertake any obligation publicly to release the result of any revisions to any forward-looking statements in this announcement that may occur due to any change in the Company's expectations or to reflect events or circumstances after the date of this announcement. Past performance of the Company is not necessarily indicative of future performance.

You are advised to read this announcement and, once available the Prospectus and the information incorporated by reference therein, in their entirety for a further discussion of the factors that could affect the Company's or the Group's future performance and the industries in which they operate.  In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements in this announcement may not occur.

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

Any person receiving this announcement is advised to exercise caution in relation to the Capital Raising. If in any doubt about any of the contents of this announcement, independent professional advice should be obtained.

This summary should be read in conjunction with the full text of the announcement which follows.

Expected timetable

Record Date for entitlement under the Open Offer	close of business on 22 January 2014
Announcement of the Capital Raising	23 January 2014
Ex-entitlement date for the Open Offer	23 January 2014
Publication and posting of the Prospectus, Form of Proxy and Application Form	27 January 2014
Open Offer Entitlements credited to stock account of Qualifying CREST Shareholders in CREST	as soon as possible after 8.00 a.m. on 28 January 2014
Recommended latest time and date for requesting withdrawal of Open Offer Entitlements from CREST	4.30 p.m. on 5 February 2014
Latest time and date for depositing Open Offer Entitlements into CREST	3.00 p.m. on 6 February 2014
Latest time and date for splitting Application Forms (to satisfy bona fide market claims only)	3.00 p.m. on 7 February 2014
Latest time and date for receipt of Forms of Proxy and receipt of electronic proxy appointments via the CREST system	10.00 a.m. on 10 February 2014
Latest time and date for receipt of completed Application Forms and payment in full under the Open Offer and settlement of relevant CREST instructions	11.00 a.m. on 11 February 2014
Latest time and date for receipt of completed Subscription Forms and payment in full under the Offer for Subscription or settlement of relevant CREST instructions	11.00 a.m. on 11 February 2014
Latest time and date for receipt of Placing commitments	11.00 a.m. on 11 February 2014
General Meeting	10.00 a.m. on 12 February 2014
Expected date of announcement of results of the General Meeting and the Capital Raising through the Regulatory Information Service	12 February 2014
Expected date of Capital Raising Admission and commencement of dealings in Capital Raising Shares	8.00 a.m. on 14 February 2014
Capital Raising Shares in uncertificated form expected to be credited to accounts in CREST	as soon as practicable after 8.00 a.m. on 14 February 2014
Expected date of despatch of definitive share certificates for Capital Raising Shares in certificated form	by 21 February 2014

The times set out in the expected timetable of principal events above and mentioned throughout this announcement are times in London unless otherwise stated, and may be adjusted by the Company in consultation with or, if required, with the agreement of Numis Securities, in which event details of the new times and dates will be notified to the Financial Conduct Authority, the London Stock Exchange and, where appropriate, Shareholders.

Introduction

The Board announces that the Company intends to raise up to approximately £75.0 million (approximately £72.9 million net of all Capital Raising costs and expenses) in a Capital Raising by way of a Firm Placing and a Placing, Open Offer and Offer for Subscription consisting of the issue of up to 45,454,856 Capital Raising Shares at an Issue Price of 165 pence per New Share. The Firm Placing is fully underwritten by Numis Securities. The Board has the ability to increase the size of the Capital Raising by up to one third should there be sufficient demand.

It is the Board's opinion that the Capital Raising will strengthen the financial position of the Group and enable it to deploy more capital into new and existing commercialisation opportunities, both in the UK and internationally, and to take advantage of opportunities to broaden its access to potentially world class IP. The Board therefore considers the Capital Raising to be in the best interests of IP Group and IP Group Shareholders as a whole and unanimously recommends that IP Group Shareholders vote in favour of the Resolutions.

Shareholders will be asked to approve the Resolutions, details of which are set out within this announcement and in the Prospectus.  The General Meeting is being convened for 10.00 a.m. on 12 February 2014 at the Company's offices at 24 Cornhill, London, EC3V 3ND.

Background to and reasons for the Capital Raising

Overview of the Company

IP Group was established in 2000 to commercialise scientific innovation developed in the UK's leading research institutions. The Group's business model is to form, or assist in the formation of, spin-out companies based on that innovation, to take a significant minority equity stake in those spin-out companies and then to grow the value of that equity over time through active participation in the development of these spin-out companies. The Group's strategy has been to build significant minority equity stakes in a diversified portfolio of companies designed to achieve strong equity returns over the medium to long term.

An important aspect of the Group's strategy is its ability to access a wide range of leading scientific research. This has been achieved primarily through long-term partnerships with a number of leading research universities in the UK.  IP Group entered into its first long term partnership with the University

of Oxford's Chemistry Department in 2000 and now has direct contractual arrangements covering eleven of the UK's leading universities including, most recently, its entry into of an IP commercialisation agreement with the University of Manchester in February 2013.

In the last quarter of 2009, the Group acquired a strategic stake in Fusion and entered into a co-investment agreement with Fusion relating to spin-out companies originating from Fusion's university partners. In addition, in January 2011, the Group also broadened its relationship with the University of Oxford by acquiring a stake in, and forming a commercialisation alliance with, Technikos LLP, which has a commercialisation agreement with Institute of Biomedical Engineering. More recently, the Group completed a £5.0 million strategic investment in Cambridge Innovation Capital plc ("CIC") in October 2013 and also entered into a memorandum of understanding with CIC in relation to co-investment opportunities in the Cambridge Cluster.

As at 31 December 2013, the Group had a portfolio of 72 companies in which its combined stake was valued at approximately £286 million, calculated by reference to the values attributed to the Group's investments in such portfolio companies in the unaudited consolidated management accounts of the Company for the year ended 31 December 2013. Up to this date, the Group had invested approximately £122 million in aggregate in its portfolio and had made cash realisations of approximately £42 million. The fair value of the Group's holdings in portfolio companies at, and cash realisations to, 31 December 2013 represents approximately 2.7 times the total cash invested by the Group into its portfolio companies since 2001.

The Group's portfolio is diverse with exposure to five main sectors - Energy & Renewables, Medical Equipment & Supplies, Pharma & Biotech, Chemicals & Materials and IT & Communications.

Reasons for the Capital Raising

The Group has built a platform for the systematic commercialisation of leading technology innovations

which, to date, have been primarily sourced from within universities with which the Group has partnerships.

The Board believes that there continues to exist a significant opportunity to accelerate the growth of the Group by increasing its overall rate of investment in both its current portfolio and in new early stage opportunities that progress to the post-seed stage, whilst still seeking to preserve the returns that it has historically been able to achieve. As companies within the Group's portfolio mature, they generally require an increased level of investment, commensurate with their advancing stage of development, in order to achieve their technical, commercial and strategic objectives. The Board considers that, where such companies continue to make progress towards achieving these objectives, there can be advantages for the Group in maintaining significant minority equity stakes in these companies in order to seek to maximise its level of returns.

The Board considers that the Group remains in a highly advantageous position to assess the merits of further investments in its post-seed portfolio companies, given its well-established and in depth understanding of the relevant company in each case. These investment opportunities are typically more mature (in that technology proof-of-concept has generally been achieved and demonstrated) and additional capital is required to bring the technology to, or towards, commercial validation. The Capital Raising will enable the Group to continue to have flexibility to lead these subsequent investment rounds in both existing and future post-seed companies, decreasing its reliance on external capital and allowing it to maintain significant minority equity stakes with a view to continuing to generate strong equity returns.

The Group will continue to seek to identify compelling IP based opportunities arising from its current partnerships. In addition, the Group may source further opportunities from other research intensive institutions and may explore the possibility of either extending its existing partnerships or entering into additional partnerships or other collaborative arrangements with such institutions.  The Directors believe that the increased strength of its balance sheet following completion of the Capital Raising will enhance the Group's ability to attract new early stage commercialisation opportunities from, and collaborations with, research intensive institutions and its ability to attract experienced management teams and co-investment partners, as appropriate, into portfolio companies as they develop.

In addition, the Group aims to increase its exposure to therapeutics assets building on its track record in the biotechnology sector resultant from the approximately £357 million sale of Proximagen Group plc in 2012. Market sentiment in the biotechnology sector is at a high, with 2013 the best year for sector IPOs in over a decade and the NASDAQ biotechnology index up by 65 per cent. over the period. The year saw 37 biotechnology IPOs, raising $2.7 billion in gross proceeds and eclipsing the 26 biotech IPOs and $1.9 billion raised during the previous sector high in 2000. Against this backdrop and given its existing track record as aforementioned, the Board considers that increasing its capital allocation to biotechnology is attractive at this time. The Directors believe that the increased strength of the Group's balance sheet following completion of the Capital Raising will enable IP Group to leverage its existing expertise and assets to build innovative, therapeutically aligned, biotechnology companies. The objective for each such company would be to grow it to the point at which its products might be licensed or acquired by a large pharmaceutical company, with precedent demonstrating that deal values at the early stage are in the region of $88 million and as high as $450 million at Phase 2. Alternatively such a company may be grown to the stage where it is mature enough to continue as a standalone entity.

Consistent with the ambition of the Group to operate internationally, the Group has opened up an office and established a presence along the North East coast corridor of the US. The Board believes that this area is a rich source of potentially world-class IP which has not been systematically tapped to date. Furthermore, the Board believes that this geographically focussed footprint will enable the Group to establish its brand and build partnerships with key global institutions. The first step towards this was its entry into of commercialisation agreements with each of the University of Pennsylvania and Columbia University, as described above, both of whom featured in the FT's list of top 20 universities in 2012/2013. The Directors believe that the increased strength of the Group's balance sheet following completion of the Capital Raising will enable the Group to complete successful pilot phases with each of these universities, building both strong relationships with each over this time and its reputation in the US market place, and also to explore accessing additional potentially  

Current trading trends and prospects

Portfolio and cash update

The following information is extracted from the Group's unaudited consolidated management accounts for the year ended 31 December 2013.

At 31 December 2013, the Group's portfolio consisted of holdings in 72 companies compared to 67 at 31 December 2012. The portfolio was valued at approximately £286 million (2012: £182 million), representing a net unrealised fair value increase for the year of approximately £82 million excluding the investments and realisations described below.

During the year to 31 December 2013, the Group provided pre-seed, seed and post-seed capital totalling approximately £27 million to its portfolio companies, including a £5 million investment into Cambridge Innovation Capital plc. The Group generated proceeds of approximately £5 million (2012: £17 million). Cash, cash equivalents and deposits at 31 December 2013 totalled approximately £24 million (2012: £48 million).

Outlook

The Directors believe that the UK continues to produce a wealth of potentially world class IP from its universities and other research intensive institutions. Whilst macroeconomic sentiment in the UK is improving, funding for higher-risk, early stage businesses continues to be constrained and trading circumstances for many small businesses remain difficult. Against this backdrop, the Directors consider that the Group has an increasingly competitive position given its track record, strong cash position (assuming completion of the Capital Raising) and available funds under management.

The Group continues to expand its access to leading scientific innovation by broadening and deepening its arrangements with its existing university partners and other research intensive institutions and entering into collaborations with new partners. These arrangements continue to provide opportunities for the Group to invest in early stage projects and companies based on high impact technologies. The Board is confident that this flow of opportunities, coupled with the Group's increased ability to invest larger sums more frequently in its portfolio companies as a result of the Capital Raising, will continue to drive the Group's growth. The Board is excited at the prospect of the acquisition of Fusion which it considers represents an opportunity to create a stronger UK commercialisation company with greater critical mass. Accordingly, the Board remains confident in the prospects for the Group.

Principal Terms of the Capital Raising

IP Group is proposing to raise gross proceeds of up to approximately £75.0 million (£72.9 million net of expenses) by the issue of up to 45,454,856 Capital Raising Shares way of the Firm Placing and the Placing, Open Offer and Offer for Subscription at 165 pence per Capital Raising Share, although the Directors have the ability to increase the size of the Issue by up to one third such that the gross proceeds would be approximately £100.0 million (approximately £97.4 million net of expenses). Assuming that the Capital Raising size is £75.0 million, 30,303,030 Capital Raising Shares will be issued through the Firm Placing and up to 15,151,826 Capital Raising Shares will be issued through the Placing, Open Offer and Offer for Subscription. The actual number of Capital Raising Shares to be issued pursuant to the Capital Raising will be notified by the Company via a Regulatory Information Service announcement prior to Capital Raising Admission.

The Board considers the Firm Placing and Placing, Open Offer and Offer for Subscription to be a suitable fundraising structure as it will allow access to a wide variety of new investors to broaden the Company's shareholder base whilst providing existing Shareholders with the opportunity to participate in the fundraising through the Open Offer and the Offer for Subscription.

Qualifying Shareholders are being offered the right to subscribe for Open Offer Shares in accordance with the terms of the Open Offer. Qualifying Shareholders are not being offered the right to subscribe for the Firm Placed Shares or the Placing Shares. Qualifying Shareholders applying for their Open Offer Entitlements may also apply, under the Excess Application Facility, for Excess Shares in excess of their Open Offer Entitlements as described below. The Company is also making the Offer for Subscription as described below in the UK only.

All elements of the Capital Raising have the same Issue Price. The Issue Price was set having regard to the prevailing market conditions and the size of the Issue, and represents a discount of approximately 8.3 per cent. to the closing price of 179.9 pence per Share on 22 January 2014 (being the last Business Day before the announcement of the Capital Raising). The Board believes that both the Issue Price and the discount are appropriate.

The Capital Raising Shares, when issued and fully paid, will rank in full for all dividends or distributions made, paid or declared after the date of the Prospectus and otherwise pari passu in all respects with the Existing Shares.

On the basis that the Capital Raising size is £75.0 million, the Capital Raising is expected to result in 45,454,856 Capital Raising Shares being issued (representing approximately 12.1 per cent. of the existing issued share capital) assuming that it is fully subscribed.

Some questions and answers in relation to the Open Offer, together with details of further terms and conditions of the Open Offer, including the procedure for application and payment and the procedure in respect of entitlements not taken up, will be set out in the Prospectus and, where relevant, will be set out in the Application Form.

Details of the further terms and conditions of the Offer for Subscription, including the procedure for application and payment and the procedure in respect of Subscription Entitlements, will be set out in the Prospectus and, where relevant, will be set out in the Subscription Form. The Subscription Form will be contained in the Prospectus and will be available at the Company's website.

Firm Placing

The Firm Placees have conditionally agreed to subscribe for 30,303,030 Capital Raising Shares in aggregate at the Issue Price (representing gross proceeds of £50 million). The Firm Placed Shares are not subject to clawback to satisfy the valid applications by Qualifying Shareholders under the Open Offer and are not part of the Placing, Open Offer and Offer for Subscription. The Firm Placing is underwritten by Numis. The terms and conditions of the Firm Placing are set out in the Appendix to this announcement. The terms and conditions of the Placing, Open Offer and Offer for Subscription will be set out in the Prospectus.

Open Offer

The Directors recognise the importance of pre-emption rights to Shareholders and consequently 15,151,826 Capital Raising Shares are being offered to existing Shareholders by way of the Open Offer. The Open Offer provides an opportunity for Qualifying Shareholders to participate in the Capital Raising by both subscribing for their respective Open Offer Entitlements and by subscribing for Excess Shares under the Excess Application Facility, subject to availability. To the extent that valid applications are not received in respect of Open Offer Shares under the Open Offer, such Open Offer Shares may be allocated to Qualifying Shareholders to meet any valid applications under the Excess Application Facility.

Open Offer Entitlements

Qualifying Shareholders are being offered the opportunity on, and subject to, the terms and conditions of the Open Offer to apply for Open Offer Shares at the Issue Price, pro rata to their holdings of Existing Shares on the Record Date on the basis of:

4.0377 Open Offer Shares for every 100 Existing Shares

Open Offer Entitlements under the Open Offer will be rounded down to the nearest whole number and any fractional entitlements to Open Offer Shares will not be allocated but will be aggregated and made available under the Excess Application Facility and/or the Placing and/or the Offer for Subscription.

If you have sold or otherwise transferred all of your Existing Ordinary Shares before the ex‑entitlement date, you are not entitled to participate in the Open Offer.

Qualifying Shareholders are also being offered the opportunity to subscribe for Excess Shares in excess of their Open Offer Entitlements pursuant to the Excess Application Facility as described below.

Excess Application Facility

Qualifying Shareholders may apply to subscribe for Excess Shares using the Excess Application Facility, should they wish. Qualifying Non-CREST Shareholders wishing to apply to subscribe for Excess Shares, may do so by completing the relevant sections on the Application Form. Qualifying CREST Shareholders who wish to apply to subscribe for more than their Open Offer Entitlements will have Excess CREST Open Offer Entitlements credited to their stock account in CREST and should refer to the Prospectus for information on how to apply for Excess Shares pursuant to the Excess Application Facility.

The Excess Application Facility will be comprised of Open Offer Shares that are not taken up by Qualifying Shareholders under the Open Offer pursuant to their Open Offer Entitlements less any Shares that the Directors reallocate to the Placing and/or the Offer for Subscription to satisfy demand from prospective new investors.

The maximum amount of Capital Raising Shares to be issued under the Excess Application Facility (the "Maximum Excess Application Number") will be limited to: (a) the maximum size of the Issue; less (b) the aggregate of the Firm Placed Shares, the Capital Raising Shares issued under the Open Offer pursuant to Qualifying Shareholders' Open Offer Entitlements and any Capital Raising Shares that the Directors determine to issue under the Placing and the Offer for Subscription. Excess Applications will therefore only be satisfied to the extent that: (a) other Qualifying Shareholders do not apply for their Open Offer Entitlements in full; (b) where fractional entitlements have been aggregated and made available under the Excess Application Facility; and/or (c) if the Directors do not exercise their discretion to reallocate Capital Raising Shares to the Placing and/or the Offer for Subscription. Qualifying Shareholders can apply for up to the Maximum Excess Application Number of Capital Raising Shares under the Excess Application Facility, although if applications exceed the maximum number available under the Open Offer, the applications will be scaled back on a pro rata basis initially but subject to adjustment at the Company's discretion. Excess monies in respect of applications which are not met in full will be returned to the applicant (at the applicant's risk) without interest as soon as practicable thereafter by way of cheque or CREST payment, as appropriate.

Placing

The Company may reallocate Capital Raising Shares from the Excess Application Facility to the Offer for Subscription or the Placing. Capital Raising Shares will be allocated to Non-Firm Placees pursuant to, and in accordance with, the Placing Agreement. The Placing will not be underwritten by Numis and may be scaled back in favour of the Offer for Subscription. The terms and conditions of the Placing will be contained in the Prospectus.

Offer for Subscription

The Company may reallocate Capital Raising Shares from the Excess Application Facility to the Placing or Offer for Subscription. The Offer for Subscription may be scaled back in favour of the Placing.

The Offer for Subscription is only being made in the UK but, subject to applicable law, the Company may allot Capital Raising Shares on a private placement basis to applicants in other jurisdictions. The terms and conditions of application under the Offer for Subscription will be set out in the Prospectus and, where relevant, in the Subscription Form. These terms and conditions should be read carefully before an application is made. Investors should consult their stockbroker, bank manager, solicitor, accountant or other financial adviser if they are in doubt.

Dilution

As noted above, the Directors have the ability to increase the size of the Capital Raising from approximately £75.0 million to approximately £100.0 million.  The Directors may allocate any Capital Raising Shares from such increase to and between the Excess Application Facility, the Placing and/or the Offer for Subscription as they deem fit.

If a Qualifying Shareholder does not take up his Open Offer Entitlements in full, such Qualifying Shareholder's holding will be diluted by up to approximately 10.8 per cent. as a result of the Firm Placing and the Placing, the Open Offer and the Offer for Subscription (assuming the gross proceeds of the Capital Raising are £75.0 million and excluding the impact of the Consideration Shares issued pursuant to the Acquisition). Furthermore, a Qualifying Shareholder who takes up his Open Offer Entitlements in full in respect of the Open Offer (and does not receive any other Capital Raising Shares pursuant to the Capital Raising) will suffer dilution of approximately 7.2 per cent. to his shareholding in the Company as a result of the Firm Placing assuming the gross proceeds of the Firm Placing are £50.0 million.

If the Directors increase the Capital Raising by one third, the size of the Capital Raising will be approximately £100.0 million and if a Qualifying Shareholder does not take up his Open Offer Entitlements in full and does not otherwise participate in the Capital Raising, such Qualifying Shareholder's holding will be diluted by up to approximately 13.9 per cent. as a result of the Capital Raising if subscribed in full (excluding the impact of Consideration Shares issued pursuant to the Acquisition).

Furthermore, a Qualifying Shareholder who takes up his Open Offer Entitlements in full in respect of the Open Offer (but does not receive any other Capital Raising Shares pursuant to the Capital Raising) will suffer dilution of approximately 10.4 per cent. to his shareholding in the Company as a result of the Firm Placing, applications under the Excess Application Facility, the Placing and Offer for Subscription and the increase in size of the Capital Raising.

Fractions

Fractions of Open Offer Shares will not be allocated to Qualifying Shareholders in the Open Offer and fractional entitlements under the Open Offer will be aggregated and made available under the Excess Application Facility and/or the Placing and/or the Offer for Subscription.

Basis of allocation under the Capital Raising

The Open Offer is being made on a pre-emptive basis to Qualifying Shareholders and is not subject to scaling back in favour of either the Placing or the Offer for Subscription.  Any Capital Raising Shares that are available under the Open Offer and are not taken up by Qualifying Shareholders pursuant to their Open Offer Entitlements and under the Excess Application Facility will be reallocated to the Placing and/or the Offer for Subscription and available thereunder.

The Directors have the discretion to determine the basis of allotment between Qualifying Shareholders under the Excess Application Facility and any scaling back of or reallocation of Open Offer Shares to the Placing and/or the Offer for Subscription. In exercising this discretion, the Directors generally intend to give priority to existing Shareholders over prospective new Shareholders, although the Directors will seek to balance the benefits to the Company of allowing existing Shareholders to maintain or increase the size of their relative Shareholdings with expanding the Shareholder base of the Company.

Conditionality

The Capital Raising is conditional upon:

·        the passing of the Resolutions without amendment to be proposed at the General Meeting to be held on 12 February 2014;

·        the Placing Agreement having become unconditional in all respects save for the condition relating to Capital Raising Admission and not being terminated in accordance with its terms before Capital Raising Admission occurs; and

·        Capital Raising Admission occurring by not later than 8.00 a.m. on 14 February 2014 (or such later time and date as the Company and Numis may agree, not being later than 8.00 a.m. on 28 February 2014).

Prior to Capital Raising Admission, Numis may terminate the Placing Agreement in certain defined circumstances. Following Capital Raising Admission, the Placing Agreement cannot be terminated.

If the conditions of the Placing Agreement are not fulfilled on or before 8.00 a.m. on 14 February 2014, application monies will be returned to applicants (at the applicant's risk) without interest as soon as possible thereafter.

Capital Raising Admission

Applications will be made to the UKLA for the Capital Raising Shares to be listed on the premium segment of the Official List and to the London Stock Exchange for the Capital Raising Shares to be admitted to trading on the London Stock Exchange's main market for listed securities. Capital Raising Admission is expected to occur on 14 February 2014, when dealings in the Capital Raising Shares are expected to begin.

General meeting

A General Meeting is to be held at the offices of IP Group on 12 February 2014 at 10.00am. The full text of the Notice of General Meeting will be set out in the Prospectus.

At the General Meeting, the Resolutions will be proposed to:

·          approve the Capital Raising;

·          approve the allotment of Capital Raising Shares in connection with the Capital Raising; and

·          disapply statutory pre-emption rights in relation to the allotment of equity securities for the purpose of the Firm Placing and the Placing, Open Offer and Offer for Subscription, pursuant to section 570 of the Companies Act.

Recommendation

The Board considers the Capital Raising and the passing of each of the Resolutions to be in the best interests of the Company and the Shareholders as a whole.

Accordingly, the Board unanimously recommends that Shareholders vote in favour of the Resolutions to be put to the General Meeting as they intend to do, or procure, in respect of their own beneficial holding, amounting in aggregate to 4,253,681 Existing Shares, representing approximately 1.1 per cent. of the Existing Shares.

It is anticipated that a Prospectus providing further details of the Firm Placing and Placing, Open Offer and Offer for Subscription and convening the General Meeting will be published shortly and posted to Shareholders.  Copies of the Prospectus will be available from the registered office of IP Group at 24 Cornhill, London, EC3V 3ND. The Prospectus will also be available free of charge during normal business hours on any weekday (except Saturdays, Sundays and public holidays) from the date of its publication until Capital Raising Admission at the offices of Pinsent Masons LLP, 30 Crown Place, London EC2A 4ES.

APPENDIX

In this announcement, the following expressions have the following meanings unless the context requires otherwise:

Acquisition		the proposed acquisition of the entire issued and to be issued share capital of Fusion (other than the Excluded Shares) by IP Group to be implemented by way of (i) the Scheme; or (ii) the Acquisition Offer (as the case may be)
Admission and Disclosure Standards		the "Admission and Disclosure Standards" of the London Stock Exchange containing, among other things, the admission requirements to be observed by companies seeking admission to trading on the London Stock Exchange's main market for listed securities
AIM		the market of that name operated by the London Stock Exchange
Application Form		the personalised application form accompanying the Prospectus on which Qualifying Non-CREST Shareholders may apply for Open Offer Shares under the Open Offer
Board or Directors		the board of directors of the Company
Business Day		a day (other than a Saturday, Sunday or public holiday) on which banks are open in London for the transaction of normal banking business
Capital Raising		the Firm Placing and the Placing, Open Offer and the Offer for Subscription
Capital Raising Admission		the admission of the Capital Raising Shares (i) to the premium segment of the Official List and (ii) to trading on the London Stock Exchange's main market for listed securities, becoming effective in accordance, respectively, with LR 3.2.7G of the Listing Rules and paragraph 2.1 of the Admission and Disclosure Standards
Capital Raising Shares			up to 60,606,060 new Shares to be allotted and issued by IP Group pursuant to the Capital Raising, assuming the Directors exercise their discretion to increase the total size of the Capital Raising to approximately £100.0 million
certificated or in certificated form			a share or security which is not in uncertificated form
Companies Act			the Companies Act 2006, as amended
Company or IP Group	IP Group plc
Consideration Shares			the new Shares to be issued to Scheme Shareholders credited as fully paid in accordance with the Scheme
CREST			the relevant system, as defined in the CREST Regulations, and the holding of shares in uncertificated form in respect of which Euroclear is the operator (as defined in the CREST Regulations)
CREST Regulations or Regulations			the Uncertificated Securities Regulations 2001 (SI 2001 No. 01/378), as amended
Daily Official List			the daily record setting out the prices of all trades in shares and other securities conducted on the London Stock Exchange
Disclosure and Transparency Rules			the rules relating to the disclosure of information made in accordance with section 73A(3) of the FSMA, as amended from time to time
Euroclear			Euroclear & Ireland Limited, the operator of CREST
Excess Application Facility			the arrangement pursuant to which Qualifying Shareholders may apply for Open Offer Shares in excess of their Open Offer Entitlement provided they have agreed to take up their Open Offer Entitlement in full
Excess CREST Open Offer Entitlements			in respect of each Qualifying CREST Shareholder, the entitlement (in addition to his Open Offer Entitlement) to apply for Excess Shares credited to his stock account in CREST, pursuant to the Excess Application Facility, which is conditional on such Qualifying CREST Shareholder agreeing to take up its Open Offer Entitlement in full
Excess Shares			the Open Offer Shares for which Qualifying Shareholders may apply under the Excess Application Facility
Excluded Territory or Excluded Territories			Australia, Canada, Japan, New Zealand, the Republic of South Africa and the United States of America
Existing Shares			the Shares in issue as at the date of this document
Financial Conduct Authority or FCA Firm Placees			the Financial Conduct Authority of the United Kingdom any persons who have agreed to subscribe for Firm Placed Shares pursuant to the Firm Placing
Firm Placed Shares			the 30,303,030 Capital Raising Shares to be allotted and issued by the Company pursuant to the Firm Placing
Firm Placing			the conditional placing by Numis, on behalf of the Company, of the Firm Placed Shares pursuant to the Placing Agreement
Fusion			Fusion IP plc
Form of Proxy			the form of proxy accompanying the prospectus for use by Shareholders in relation to the General Meeting
FSMA			the Financial Services and Markets Act 2000, as amended
General Meeting or IP Group General Meeting			the general meeting of IP Group to be held at 10.00am on 12 February  2014, notice of which will be set out in the Prospectus
IAS			International Accounting Standards
IP			intellectual property, meaning any and all patents, trade marks, rights in designs, get-up, trade, business or domain names, copyrights, and topography rights, (whether registered or not and any applications to register or rights to apply for registration of any of the foregoing), rights in inventions, know-how, trade secrets and other confidential information, rights in databases and all other intellectual property rights of a similar or corresponding character which may now or in the future subsist in any part of the world
Issue			the issue of Capital Raising Shares pursuant to the Capital Raising
Issue Price			165 pence per New Share
Listing Rules			the Listing Rules made by the FCA under Part VI of FSMA, as amended from time to time
London Stock Exchange			London Stock Exchange plc
Non-Firm Placees			any persons who have agreed or shall agree to subscribe for Placing Shares pursuant to the Placing
Notice of General Meeting			the notice of the General Meeting contained in Part X of the Prospectus
Numis			Numis Securities Limited of The London Stock Exchange Building, 10 Paternoster Square, London EC4M 7LT, acting as sponsor, financial adviser, underwriter and broker
Offer for Subscription			the offer for subscription to the public in the UK of Capital Raising Shares on the terms set out in the Prospectus and (where applicable) the Subscription Form
Official List			the Official List of the Financial Conduct Authority pursuant to Part VI of FSMA
Open Offer			the offer to Qualifying Shareholders, constituting an invitation to apply for the Open Offer Shares, including pursuant to the Excess Application Facility, on the terms and subject to the conditions set out in the Prospectus and in the case of Qualifying Non-CREST Shareholders, in the Application Form
Open Offer Entitlement			the pro rata entitlement of Qualifying Shareholders to apply for Open Offer Shares allocated to a pursuant to the Open Offer
Open Offer Shares			the new Shares to be offered to Qualifying Shareholders under the Open Offer
Panel			the Panel on Takeovers and Mergers
Placed Shares			the Firm Placed Shares and those Placing Shares allotted by the Company to Non-Firm Placees
Placees			the Firm Placees and the Non-Firm Placees
Placing			the subscription by the Non-Firm Placees for the Placed Shares
Placing Agreement			the placing agreement dated 23 February 2014 between (1) IP Group and (2) Numis, further details of which are set out in the Prospectus
Placing Shares			the Capital Raising Shares to be allotted and issued by the Company to Non-Firm Placees pursuant to the Placing
Pounds Sterling or £			the lawful currency of the United Kingdom
Prospectus			the document to be dated 27 January 2014 comprising a combined prospectus and notice of general meeting
Prospectus Rules			the Prospectus Rules of the UK Listing Authority made in accordance with Section 73A of FSMA, as amended from time to time
Qualifying CREST Shareholders			Qualifying Shareholders holding Shares in uncertificated form in CREST
Qualifying Non-CREST Shareholders			Qualifying Shareholders holding Shares in certificated form
Qualifying Shareholders			Shareholders on the register of members of the Company at the Record Date with the exclusion (subject to certain exceptions) of persons with a registered address or located or resident in the US or an excluded territory
Record Date			5.00 p.m. on 22 January 2014
Regulatory Information Service			one of the regulatory information services authorised by the UK Listing Authority to receive, process and disseminate regulatory information in respect of listed companies
Resolutions			the resolutions to be proposed at the General Meeting (to be set out in the Notice of General Meeting) to approve the Capital Raising, authorise the Directors to allot Capital Raising Shares to facilitate the Capital Raising and to disapply pre-emption rights
Scheme			the proposed scheme of arrangement under Part 26 of the Companies Act between Fusion and Scheme Shareholders to implement the Acquisition
Selected Subscription Applicants			means a person invited by Numis to apply for Capital Raising Shares in the Offer for Subscription in CREST
Shareholder			holders of Shares
Shares			ordinary shares of 2 pence each in the capital of the Company
stock account			an account within a member account in CREST in which a holding of a particular share or other security in CREST is admitted
Subscription Form			the application form in Appendix 4 of the Prospectus for use in connection with the Offer for Subscription
uncertificated or in uncertificated form			a share recorded on the Company's register as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST
United Kingdom or UK			the United Kingdom of Great Britain and Northern Ireland
US Securities Act			the United States Securities Act of 1933, as amended, and related rules
United States or US			the United States of America, its territories and possessions, any state of the United States and the District of Columbia.

TERMS AND CONDITIONS OF THE FIRM PLACING AND THE PLACING

1.   Introduction

"Regulation S" means Regulation S as promulgated under the Securities Act; and

"Securities Act" means the United States Securities Act of 1933, as amended.

2.   Introduction

Participation in the Firm Placing and/or the Placing is only available to persons who are invited to participate by Numis. These terms and conditions apply to persons making an offer to subscribe for Firm Placed Shares under the Firm Placing and/or Placing Shares under the Placing. The Placee hereby agrees with Numis and the Company to be bound by these terms and conditions as being the terms and conditions upon which Firm Placed Shares will be sold under the Firm Placing and Placing Shares will be sold under the Placing (as applicable). A Placee shall, without limitation, become so bound if Numis confirms its allocation of Firm Placed Shares under the Firm Placing and/or Placing Shares under the Placing (as applicable) to such Firm Placee.

Upon being notified of its allocation of Firm Placed Shares under the Firm Placing and/or Placing Shares under the Placing through receipt of a contract note, a Firm Placee shall, subject to the provisions of the Prospectus with respect to the Placed Shares, be contractually committed to acquire the number of Firm Placed Shares and/or Placing Shares allocated to them (subject to reallocation of the Placing Shares by the Directors to the Offer for Subscription) at the Issue Price and to the fullest extent permitted by law, will be deemed to have agreed not to exercise any rights to rescind or terminate or otherwise withdraw from such commitment. Dealing may not begin before any notification is made.

3.   Agreement to acquire Firm Placed Shares and/or Placing Shares

Each of the Firm Placing and the Placing is conditional upon the following conditions:

(i)         the Resolutions being passed at the General Meeting;

(ii)        the Placing Agreement having become unconditional in all respects save for the condition relating to Capital Raising Admission, and not being terminated in accordance with its terms before Capital Raising Admission becomes effective; and

(iii)       Capital Raising Admission becoming effective by not later than 8.00 a.m. (London time) on 14 February 2014 (or such later time and/or date as the Company and Numis may agree (being no later than 28 February 2014) in accordance with the terms of the Placing Agreement).

Subject to the above conditions, a Placee agrees to become a Shareholder and agrees to acquire Firm Placed Shares and/or Placing Shares (as applicable) at the Issue Price. The number of Firm Placed Shares issued to such Placee under the Firm Placing and/or Placing Shares issued to such Placee under the Placing (as applicable) shall be in accordance with the arrangements described above, subject to the provisions of paragraph 6 of these terms and conditions with respect to the Placing Shares.

4.   Payment for Firm Placed Shares and Placing Shares

Each Placee undertakes to pay the Issue Price for the Firm Placed Shares and Placing Shares issued to such Placee in such manner as shall be directed by Numis. In the event of any failure by a Placee to pay as so directed by Numis, the relevant Placee shall be deemed hereby to have appointed Numis or any nominee of Numis to sell (in one or more transactions) any or all of the Firm Placed Shares and Placing Shares in respect of which payment shall not have been made as so directed and to have agreed to indemnify on demand Numis in respect of any liability for UK stamp duty and/or stamp duty reserve tax arising in respect of any such sale or sales.

5.   Representations and Warranties

By receiving this document, each Placee and, in the case of paragraph 5.15 of these terms and conditions, any person confirming his agreement to subscribe for Firm Placed Shares and/or Placing Shares on behalf of a Placee or authorising Numis to notify a Placee's name to the Registrars, is deemed to acknowledge, agree, undertake, represent and warrant to each of Numis, the Registrars and the Company that:

5.1       the Non-Firm Placee has read the Prospectus in its entirety and acknowledges that its participation the Placing shall be made solely on the terms and subject to the conditions set out in these terms and conditions, the Placing Agreement and the Articles. Such Placee agrees that these terms and conditions and the contract note issued by Numis to such Placee represents the whole and only agreement between the Placee, Numis and the Company in relation to the Placee's participation in the Placing and supersedes any previous agreement between any of such parties in relation to such participation. Accordingly, all other terms, conditions, representations, warranties and other statements which would otherwise be implied (by law or otherwise) shall not form part of these terms and conditions. Such Placee agrees that neither the Company, Numis nor any of their respective officers or directors will have any liability for any such other information or representation and irrevocably and unconditionally waives any rights it may have in respect of any such other information or representation;

5.2       the Placee has the power and authority to subscribe for the Placing Shares under the Placing and/or the Firm Placed Shares under the Firm Placing (as applicable) and to execute and deliver all documents necessary for such subscription;

5.3       neither Numis nor any person affiliated with Numis or acting on its behalf is responsible for or shall have any liability for any information, representation or statement contained in this announcement or the Prospectus or any information previously published by or on behalf of the Company or any member of the Group and will not be liable for any decision by a Placee to participate in the Firm  Placing and/or the Placing based on any information, representation or statement contained in this document or otherwise;

5.4       the Placee acknowledges that the Capital Raising Shares will be admitted to the Official List, and the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of the FCA (collectively, the "Exchange Information"), which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and that the Placee is able to obtain or access such Exchange Information without undue difficulty and is able to obtain access to such information or comparable information concerning any other publicly traded company without undue difficulty;

5.5       the Placee acknowledges that neither Numis, nor any person affiliated with Numis, nor any person acting on its behalf is making any recommendations to it or advising it regarding the suitability or merits of any transaction it may enter into in connection with the Firm Placing and/or the Placing, and that participation in the Firm Placing and/or the Placing is on the basis that it is not and will not be a client of Numis for the purposes of the Firm Placing and/or the Placing (as applicable) and the Placee acknowledges that neither Numis, nor any person affiliated with Numis, nor any person acting on its behalf has any duties or responsibilities to the Placee for providing the protections afforded to its clients or for providing advice in relation to the Firm Placing and/or the Placing or in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement or for the exercise or performance of any of Numis's rights and obligations thereunder, including any right to waive or vary any condition or exercise any termination right contained therein;

5.6       the Placee has not relied on Numis or any person affiliated with Numis in connection with any investigation of the accuracy of any information contained in this announcement or the Prospectus or their investment decision and the Placee has relied on its own investigation with respect to the Firm Placed Shares and/or the Placing Shares and the Company in connection with its investment decision;

5.7       in agreeing to purchase Firm Placed Shares under the Firm Placing and/or Placing Shares under the Placing (as applicable), the Placee is relying on the Prospectus and/or any supplementary prospectus issued by the Company in connection with the Capital Raising (as the case may be) or any regulatory announcement that may be issued by the Company and not on any other information or representation concerning the Group, the Firm Placing, the Placing, the Firm Placed Shares or the Placing Shares;

5.8       save in the event of fraud on its part (and to the extent permitted by the rules of the FCA), neither Numis nor any of its directors or employees shall be liable to a Placee for any matter arising out of the role of Numis as the Company's adviser and broker or otherwise, and that where any such liability nevertheless arises as a matter of law each Placee will immediately waive any claim against Numis and any of its directors and employees which a Placee may have in respect thereof;

5.9       the Placee has complied with all such laws and such Placee will not infringe any applicable law as a result of such Placee's agreement to purchase Firm Placed Shares under the Firm Placing and/or Placing Shares under the Placing (as applicable) and/or acceptance thereof or any actions arising from such Placee's rights and obligations under the their agreement to purchase Firm Placed Shares under the Firm Placing and/or Placing Shares under the Placing (as applicable) and/or acceptance thereof or under the Articles;

5.10      the Placee has accepted that its application is irrevocable and if for any reason it becomes necessary to adjust the expected timetable as set out in the Prospectus, the Company will make an appropriate announcement to a Regulatory Information Service giving details of the revised dates. In particular, the Company shall, in agreement with Numis, be entitled to extend the last time and/or date for applications under the Firm Placing and/or the Placing, and any such extension will not affect applications already made, which will continue to be irrevocable;

5.11      to the fullest extent permitted by law, the Placee acknowledges and agrees to the disclaimers contained in this announcement and acknowledges and agrees to comply with the selling restrictions set out in this announcement and the Prospectus;

5.12      the Shares have not been and will not be registered under the Securities Act, or under the securities legislation of, or with any securities regulatory authority of, any state or other jurisdiction of the United Sates or under the applicable securities laws of the Excluded Territories or where to do so may contravene local securities laws or regulations;

5.13      the Placee is not a person located in the United States and is subscribing for Capital Raising Shares only in "offshore transactions" as defined in and pursuant to Regulation S and not as a result of any "directed selling efforts" as defined in Regulation S;

5.14      the Placee is not a resident of the Excluded Territories or the United States and acknowledges that the Firm Placed Shares and the Placing Shares have not been and will not be registered nor will a prospectus be prepared in respect of the Firm Placed Shares and/or the Placing Shares under the securities legislation of the Excluded Territories or the United States and, subject to certain exceptions, may not be offered or sold, directly or indirectly, in or into those jurisdictions;

5.15      the Placee does not have a registered address in, and is not a citizen, resident or national of, any jurisdiction in which it is unlawful to make or accept an offer of the Firm Placed Shares or Placing Shares and it is not acting on a non-discretionary basis for any such person;

5.16      the Placee has not, directly or indirectly, distributed, forwarded, transferred or otherwise transmitted this document or any other offering materials concerning the Placing to any persons within the United States, nor will it do any of the foregoing;

5.17      the Placee accepts that if either or both of the Placing or the Firm Placing does not proceed or the conditions to the Placing Agreement are not satisfied or the Placing Shares or Firm Placed Shares for which valid application are received and accepted are not admitted to listing on the premium segment of the Official List and to trading on the Main Market for any reason whatsoever then none of Numis or the Company, nor persons controlling, controlled by or under common control with any of them nor any of their respective employees, agents, officers, members, stockholders, partners or representatives, shall have any liability whatsoever to it or any other person;

5.18      in the case of a person who confirms to Numis on behalf of a Placee an agreement to purchase Firm Placed Shares under the Firm Placing and/or Placing Shares under the Placing and/or who authorises Numis to notify such Placee's name to the Registrars, that person represents and warrants that he has authority to do so on behalf of the Placee;

5.19      the Placee has complied with its obligations in connection with money laundering and terrorist financing under the Criminal Justice Act 1993, the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Anti-Terrorism Crime and Security Act 2001, and the Money Laundering Regulations 2007 (the "Regulations") and undertakes to provide satisfactory evidence of its identity within such reasonable time (in each case to be determined in the absolute discretion of Numis) to ensure compliance with the Money Laundering Regulations 2007 and that if it is making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;

5.20      the Placee is not, and is not applying as nominee or agent for, a person to whom the issue would give rise to a liability under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depository receipts and clearance services) and that the Firm Placed Shares and/or the Placing Shares (as applicable) are not being acquired in connection with arrangements to issue depository receipts or to issue or transfer Firm Placed Shares and/or Placing Shares (as applicable) into a clearing system;

5.21      if you are a resident in the European Economic Area, you are a "qualified investor" within the meaning of the law in the Relevant Member State implementing Article 2(1)(e)(i), (ii) or (iii) of the Prospectus Directive (Directive 2003/71/EC);

5.22      the Placee has not offered or sold and will not offer or sell any Firm Placed Shares and/or Placing Shares (as applicable) to persons in the UK prior to Capital Raising Admission except to "qualified investors" as defined in Article 2(1)(e) of the Prospectus Directive;

5.23      the Placee is (a) a person falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "FPO") or (b) a person falling within article 49(2)(a) to (d) of the FPO and undertakes that it will acquire, hold, manage or dispose of any Form Placed Shares or Placing Shares that are allocated to it for the purposes of its business or (c) a person to whom this document may otherwise be lawfully communicated;

5.24      the Placee has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Firm Placed Shares and or the Placed Shares (as applicable) in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

5.25      the exercise by Numis of any rights or discretions under the Placing Agreement shall be within its absolute discretion and Numis need not have any reference to any Placee and shall have no liability to any Placee whatsoever in connection with any decision to exercise or not to exercise any such right and each Placee agrees that it shall have no rights against Numis or its directors or employees under the Placing Agreement; and

5.26      the Placee acknowledges that any money held in an account with Numis on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FCA. The Placee further acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from the Numis's money in accordance with the client money rules and will be used by Numis in the course of its own business; and the Placee will rank only as a general creditor of Numis.

5.27      the Placee accepts that the allocation of Placing Shares and Firm Placed Shares shall be determined by Numis in its absolute discretion but in consultation with the Company and that Numis may scale down any commitments for this purpose on such basis as it may determine;

5.28      time shall be of the essence as regards its obligations to settle payment for the Placing Shares or Firm Placed Shares and to comply with its other obligations under the Placing or Firm Placing;

The Placee acknowledges and understands that the Company and Numis will rely upon the truth and accuracy of the foregoing representations, warranties, agreements, acknowledgements and undertakings.

The Placee indemnifies on an after-tax basis and hold harmless Numis and each person affiliated with Numis and any person acting on their behalf from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in these terms and conditions and further agrees that the provisions of these terms and conditions shall survive after completion of the Firm Placing and the Placing.

6.   Scale back of the Placing Shares

The number of Placing Shares to be issued under the Placing will be determined at the discretion of the Directors (in consultation with Numis).

7.   Miscellaneous

The rights and remedies of Numis, the Registrars and the Company under these terms and conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others.

On application, each Placee may be asked to disclose, in writing or orally to Numis:

(i)         if he is an individual, his nationality; or

(ii)        if he is a discretionary fund manager, the jurisdiction in which the funds are managed or owned.

All documents will be sent at the Placee's risk. They may be sent by post to such Placee at an address notified to Numis. The provisions of these terms and conditions of the Firm Placing and/or the Placing may be waived, varied or modified as regards specific Placees or on a general basis by Numis.

The contract to subscribe for Firm Placed Shares and/ or Placing Shares (as applicable) and the appointments and authorities mentioned herein will be governed by, and construed in accordance with, the laws of England and Wales.

For the exclusive benefit of Numis, the Company and the Registrars, each Placee irrevocably submits to the exclusive jurisdiction of the English courts in respect of these matters. This does not prevent an action being taken against a Placee in any other jurisdiction.

In the case of a joint agreement to subscribe for Firm Placed Shares and/or Placing Shares (as applicable), references to a "Placee" in these terms and conditions are to each of such Placees and such joint Placees' liability is joint and several.

Numis and the Company each expressly reserve the right to modify the Firm Placing and/or the Placing (including, without limitation, its timetable and settlement) at any time before allocations of Firm Placed Shares under the Firm Placing and/or of Placing Shares under the Placing are determined.

 

END

 

 

MSCZMGZMVFRGDZG