Further Issue of Shares

RNS Number : 5075C

Bear Stearns Private Equity Limited

02 September 2008

 



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES OF AMERICA 

2 September 2008 

BEAR STEARNS PRIVATE EQUITY LIMITED - FURTHER ISSUE OF SHARES 

Bear Stearns Private Equity Limited (the 'Company') announces a placing for cash of up to 7,455,823 zero dividend preference shares (comprising 5,947,165 new zero dividend preference shares and 1,508,658 zero dividend preference shares currently held in treasury) (the 'Placing') to fund additional acquisitions of private equity assets.  

The Company continues to emphasise the development of a diverse, seasoned pool of private equity assets consistent with its current portfolio of over 1,500 companies held through 161 funds and 11 direct investments. As the Company's strategy is to reduce or eliminate the standard back-ended returns of private equity (the 'J-Curve') by a) investing in secondaries and b) only raising new money when investment opportunities exist ('just-in-time financing'), the Company is now seeking to raise additional finance to take advantage of specific investment opportunities arising from the well-publicised issues relating to the global capital markets.  

The Company has delivered 12 consecutive quarters of positive NAV growth in its equity shares and a 21.9% annualized rate of return since its initial offering in 2005, based on its estimated 30 June 2008 Net Asset Value. In addition, during this period the Company's equity shares have outperformed 
key major listed private equity benchmarks.

The Company remains optimistic that its opportunistic investment strategy of buying quality assets from motivated or distressed sellers positions it well to perform in a turbulent market environment. The Company has built its portfolio with an emphasis on global lower middle market transactions purchased at discounts to intrinsic value, and has emphasized distressed, turnaround and special situation strategies with the specific purpose of benefiting from a tightening credit market. 

The Company's net asset value as at 15 August 2008 comprised approximately USD$493 million in respect of the equity shares and £30 million of zero dividend preference shares.  The Company has the ability to borrow up to 20 per cent. of its adjusted total capital and reserves for short-term or temporary purposes as is necessary for settlement of transactions, to facilitate the operation of the over-commitment policy or to meet ongoing expenses.  As at 15 August 2008, the Company had USD$62.9 million drawn under a secured credit facility.  

Zero Dividend Preference Shares

The Company currently has 57,963,001 zero dividend preference shares in issue (excluding the 1,508,658 zero dividend preference shares held in treasury).  The Company's zero dividend preference shares are designed to provide a predetermined final capital entitlement ranking behind the Company's creditors (if any) but in priority to the equity shares. They carry no entitlement to income and the whole of their return, therefore, takes the form of capital. Zero dividend preference shareholders had an initial capital entitlement on 30 June 2005 of 41.5 pence per zero dividend preference share growing to a final capital entitlement of 73.0 pence on 28 June 2013. The zero dividend preference shares will be redeemed on the final capital entitlement date at their final capital entitlement (as defined in the Company's Articles of Incorporation) or, if lower, at a price per share equivalent to each zero dividend preference shareholder's pro rata share of the surplus assets of the Company (after payment of liabilities excluding any part of the revenue profits of the Company (including accumulated reserves)).    

The Placing

The Company is proposing to raise up to £3.92 million (before expenses) by way of a placing by JPMorgan Cazenove Limited ('JPMC') of up to 7,455,823 zero dividend preference shares (comprising 5,947,165 new zero dividend preference shares and 1,508,658 zero dividend preference shares currently held in treasury)    (together the 'Placing Shares') at 52.5 pence per share (the 'Placing Price'), representing a discount of 2.3 per cent. to the closing mid-market price of 53.75 pence per zero dividend preference share on 1 September 2008, and a gross redemption yield of 7.07 per cent* until the final capital entitlement date.  On the assumption the placing is fully subscribed, the final capital entitlement of the zero dividend preference shares will be covered some 6 times by the USD$549 million gross assets less other liabilities at 15 August 2008.  

The Placing Price is equivalent to a 1.1 per cent. premium to the accrued net asset value per zero dividend preference share as at 1 September 2008 of 51.94p and total expenses of the Placing are not expected to represent more than 1.1 per cent of the accrued net asset value. Existing shareholders, therefore, will not be disadvantaged by the expenses of the issue of further zero dividend preference shares. 

JPMC has entered into a placing agreement with the Company and Bear Stearns Asset Management Inc. (the 'Placing Agreement') whereby it has, on the terms and subject to the conditions set out therein, agreed to use its reasonable endeavours to procure subscriptions for the Placing Shares. The Placing Shares will rank pari passu with the existing zero dividend preference shares of the Company.  On 7 August 2008, the Company has convened an Extraordinary General Meeting on 5 September 2008 at which the Board is proposing, amongst other items of business, to change the Company's name and adopt new articles of incorporation, further details of which are set out below. Subscribers to the Placing Shares will not be able to vote at that meeting.  

The Company is not in possession of any unpublished inside information.  

Applications will be made to the Financial Services Authority and to the London Stock Exchange for the Placing Shares to be admitted to the Official List and to trading on the London Stock Exchange ('Admission') and Admission is expected to occur and dealings to commence in the Placing Shares on 5 September 2008. 

A further announcement will be made once the results of the Placing are known. 

JPMC is acting as financial adviser, broker and bookrunner in relation to the Placing. 

Attention is drawn to the detailed terms and conditions of the Placing set out in the Appendix to this Announcement.

Enquiries: 

Bear Stearns Asset Management 

Greg Getschow / Troy Duncan [phone] 

JPMorgan Cazenove 

Angus Gordon Lennox [phone] 

Anthony Payne / Max Hilton [phone] / [phone] / 

[e-mail] 

* The gross redemption yield of a zero dividend preference share is not, and should not be, taken as a forecast of profits and there can be no assurance that the zero dividend preference shares will be repaid in full on the final capital entitlement date of 28 June 2013.  

THIS ANNOUNCEMENT HAS BEEN ISSUED BY, AND IS THE SOLE RESPONSIBILITY OF BEAR STEARNS PRIVATE EQUITY LIMITED. 

THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM PART OF AN OFFER TO SELL, PURCHASE, EXCHANGE OR SUBSCRIBE FOR ANY SECURITIES OR SOLICITATION OF SUCH AN OFFER IN THE UNITED STATES OF AMERICA OR ANY OTHER JURISDICTION. THE COMPANY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940, AS AMENDED. THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND WILL NOT BE OFFERED OR SOLD OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, US PERSONS EXCEPT IN ACCORDANCE WITH THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR AN EXEMPTION THEREFROM AND UNDER CIRCUMSTANCES WHICH WILL NOT REQUIRE THE COMPANY TO REGISTER UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940, AS AMENDED. 

THE RELEASE, PUBLICATION OR DISTRIBUTION OF THIS ANNOUNCEMENT INTO CERTAIN JURISDICTIONS OTHER THAN THE UK MAY BE RESTRICTED BY LAW AND THEREFORE PERSONS IN SUCH JURISDICTIONS INTO WHICH THIS ANNOUNCEMENT IS RELEASED, PUBLISHED OR DISTRIBUTED SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH RESTRICTIONS. NO ACTION HAS BEEN TAKEN BY THE COMPANY OR JPMC THAT WOULD PERMIT AN OFFERING OF SUCH SHARES OR POSSESSION OR DISTRIBUTION OF THIS ANNOUNCEMENT OR ANY OTHER OFFERING OR PUBLICITY MATERIAL RELATING TO SUCH SHARES IN ANY JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED. ANY FAILURE TO COMPLY WITH ANY SUCH RESTRICTIONS MAY CONSTITUTE A VIOLATION OF THE SECURITIES LAWS OR REGULATION OF SUCH JURISDICTIONS. 

THIS ANNOUNCEMENT INCLUDES FORWARD-LOOKING STATEMENTS THAT ARE PREDICTIONS OF OR INDICATE FUTURE EVENTS AND FUTURE 

TRENDS. THESE FORWARD-LOOKING STATEMENTS INCLUDE ALL MATTERS THAT ARE NOT HISTORICAL FACTS. UNDUE RELIANCE SHOULD NOT BE PLACED ON FORWARD-LOOKING STATEMENTS BECAUSE THEY INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT ARE IN MANY CASES BEYOND THE COMPANY'S CONTROL. BY THEIR NATURE, FORWARD-LOOKING STATEMENTS INVOLVE RISKS AND UNCERTAINTIES BECAUSE THEY RELATE TO EVENTS AND DEPEND ON CIRCUMSTANCES THAT MAY OR MAY NOT OCCUR IN THE FUTURE. 

FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE, AND THE COMPANY'S ACTUAL RESULTS OF OPERATIONS, FINANCIAL CONDITION AND LIQUIDITY, AND THE DEVELOPMENT OF THE INDUSTRY IN WHICH IT OPERATES MAY DIFFER MATERIALLY FROM THOSE MADE IN OR SUGGESTED BY THE FORWARD-LOOKING STATEMENTS CONTAINED IN THIS ANNOUNCEMENT. THE CAUTIONARY STATEMENTS SET FORTH ABOVE SHOULD BE CONSIDERED IN CONNECTION WITH ANY SUBSEQUENT WRITTEN OR ORAL FORWARD-LOOKING STATEMENTS THAT THE COMPANY, OR PERSONS ACTING ON ITS BEHALF, MAY ISSUE. THESE FORWARD-LOOKING STATEMENTS ARE MADE AS OF THE DATE OF THIS ANNOUNCEMENT AND ARE NOT INTENDED TO GIVE ANY ASSURANCES AS TO FUTURE RESULTS. SAVE AS REQUIRED BY LAW OR REGULATION, THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE THESE FORWARD-LOOKING STATEMENTS, AND WILL NOT PUBLICLY RELEASE ANY REVISIONS IT MAY MAKE TO THESE FORWARD-LOOKING STATEMENTS THAT MAY RESULT FROM EVENTS OR CIRCUMSTANCES 

ARISING AFTER THE DATE OF THIS ANNOUNCEMENT. 

JPMC, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for the Company and for no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to clients of  JPMC or for affording advice in relation to the contents of this announcement or on any matters referred to herein. 

This announcement, including the Appendix (together the 'Announcement'), is not for distribution directly or indirectly in or into the United States, Canada, Australia or Japan. No public offering of securities will be made in the United States, Canada, Australia, or Japan. 

This Announcement is only addressed to and directed at persons in member states of the European Economic Area who are 'qualified investors' ('Qualified Investors') within the meaning of Article 2(1)(e) of the EU Prospectus Directive (Directive 2003/71/EC) (the 'Prospectus Directive'). Any person in the EEA who acquires any securities in the Placing or to whom any offer of securities is made will be deemed to have acknowledged and agreed that they are such a Qualified Investor.

In the case of any securities acquired by a financial intermediary as that term is used in Article 3(2) of the Prospectus Directive, such financial intermediary will also be deemed to have represented and warranted that the securities acquired by it in the Placing have not been acquired on a non-discretionary basis on behalf of, nor have they have been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of securities to the public other than an offer or resale in a member state of the EEA which has implemented the Prospectus Directive to Qualified Investors or in circumstances in which the prior consent of JPMC has been given to each such proposed offer or resale.

This Announcement has been issued by and is the sole responsibility of the Company. No representation or warranty express or implied, is or will be made as to, and no responsibility or liability is or will be accepted by JPMC or by any of its affiliates or agents as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed. 

The price of shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares. Investment in the Company is suitable only for persons who can bear the economic risk of the loss of their investment and who have limited need for liquidity in their investment other than via trading on the London Stock Exchange. The Company's investments in private equity are relatively illiquid and more difficult to realise than equities or bonds. Yields may vary, and are not guaranteed. There is no guarantee that the market price of shares in the Company will fully reflect their underlying net asset value. 

APPENDIX: FURTHER DETAILS OF THE PLACING

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN. 

IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS OUTSIDE THE EUROPEAN ECONOMIC AREA ('EEA') TO WHOM IT IS LAWFUL TO COMMUNICATE IT; OR (B) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA (OTHER THAN THE UNITED KINGDOM) WHO ARE QUALIFIED INVESTORS; OR (C) IN THE UNITED KINGDOM, PERSONS WHO ARE QUALIFIED INVESTORS AND (I) WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(1) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE 'ORDER'); (II) WHO FALL WITHIN ARTICLE 49(2)(A) TO (D) ('HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC') OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS 'RELEVANT PERSONS'). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. 

Persons who are invited to and who choose to participate in the Placing, by making an oral or written offer to subscribe for Placing Shares (the 'Placees'), will be deemed to have read and understood this Announcement, including this Appendix, in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements, and undertakings contained in this Appendix. In particular each such Placee represents, warrants and acknowledges that it is: 

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

(B) outside the United States and is subscribing for the Placing Shares for its own account or is purchasing the Placing Shares for an account with respect to which it exercises sole investment discretion and that it (and any such account) is, at the time the offer to it of Placing Shares and at the time the buy order originated, outside the United States, for the purpose of Rule 903 of Regulation S under the Securities Act. 

This Announcement does not constitute an offer to sell or issue or the solicitation of an offer to buy or subscribe for Placing Shares. This Announcement and the information contained herein is not for publication or distribution, directly or indirectly, to persons in the United States, Canada, Australia or Japan or in any jurisdiction in which such publication or distribution is unlawful. No public offer of securities of the Company is being made in the United Kingdom or elsewhere.

In particular, the Placing Shares referred to in this Announcement have not been and will not be registered under the Securities Act and may not be offered, sold or transferred within the United States except pursuant to an exemption from, or as part of a transaction not subject to, the registration requirements of the Securities Act. The Placing Shares are being offered and sold outside the United States only and in accordance with Regulation S under the Securities Act. 

The relevant clearances have not been, and nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and the Placing Shares have not been, and nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Canada, Australia or Japan. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Canada, Australia or Japan or any other jurisdiction outside the United Kingdom. 

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

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

Details of the Placing Agreement and the Placing Shares 

JPMC has entered into a placing agreement (the 'Placing Agreement') with the Company and Bear Stearns Asset Management Inc. under which JPMC has, on the terms and subject to the conditions set out therein, undertaken to use reasonable endeavours to procure subscriptions for up to 7,455,823 Placing Shares at the Placing Price. 

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing zero dividend preference shares in the capital of the Company ('Shares'). 

In this Appendix, unless the context otherwise requires, Placee means a person (including individuals, funds or others) on whose behalf a commitment to subscribe for Placing Shares under the Placing has been given. 

Application for listing and admission to trading 

Application will be made to the Financial Services Authority (the 'FSA') for admission of the Placing Shares to the Official List of the UK Listing Authority (the 'Official List') and to the London Stock Exchange plc (the 'London Stock Exchange') for admission to trading of the Placing Shares on its market for listed securities (together 'Admission'). It is expected that Admission will become effective on or around 5 September 2008 and that dealings in the Placing Shares will commence at that time. 

Participation in, and principal terms of, the Placing

Applications for Placing Shares should be communicated to participants normal sales contact at JPMC, specifying the number of Placing Shares which are being offered to be acquired.  

Each Placee's allocation will be confirmed to Placees orally by JPMC following the close of the Placing, and a trade confirmation will be dispatched as soon as possible thereafter. JPMC's oral confirmation to such Placee will constitute an irrevocable legally binding commitment upon such person (who will at that point become a Placee) to subscribe for the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with the Company's Memorandum and Articles of Incorporation. 

The book-building will start with immediate effect. The timing of the closing of the book and allocations is at the discretion of the Company and JPMC. JPMC reserves the right to accept further bids after initial allocations have been made. The number of Placing Shares to be issued will be agreed between the Company and JPMC at the close of the book-building process. Details of the number of Placing Shares to be issued and the Placing Price will be announced as soon as practicable after the close of the book-building process.  

JPMC reserves the right not to accept bids or to accept bids in part rather than in whole and may scale down any bids for this purpose on such basis it may determine. The acceptance of bids and the allocation of Placing Shares (if any) shall be determined by JPMC and the Company in their absolute discretion. However, it is currently intended that any scaling back will generally give preferential treatment to existing shareholders over new applicants. The Company does not guarantee that all Placing Shares will be allotted even if the number of Placing Shares bid for exceeds the maximum number of Placing Shares available.  

Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to JPMC, to pay to it (or as it may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to subscribe for. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.  

Placees will not be entitled to vote at the EGM to be held on 5 September 2008 at which the Board is proposing:

- to change the Company's name to 'J.P. Morgan Private Equity Limited'

- the adoption of new articles of incorporation, including new provisions that allow: (i) the issue of shares with the same rights as the existing equity shares but which are quoted in, and have their net asset value calculated and reported in, currencies other than US dollars, (ii) the issue of C shares in the future; and (iii) switching between the equity share classes that may be issued by the Company in the future pursuant to the new articles of incorporation (subject to certain limitations)

- to conduct a capital reorganisation of the Company whereby equity shares, any shares forming part of an additional equity share class that may be issued in the future and the ZDP Shares will have no par value and the existing issued equity shares will be designated as US$ Equity Shares

- to request authority for the allotment of shares by the Company

- to request that shareholders approve the insertion of pre-emption rights and their disapplication on the allotment of shares for cash in the new articles of incorporation;

- to renew authorities of the Company: (i) to make further purchases of its own shares by way of tender offers; and (ii) to buy back shares on the market, in both cases in accordance with the Listing Rules, the articles of incorporation and all applicable laws and regulations

Conditions of the Placing

JPMC's obligations under the Placing Agreement in respect of the Placing Shares are conditional upon, among other things:

1) Admission of the Placing Shares taking place not later than 8.00 a.m. on 5 September 2008 (or such later time and/or date as may be agreed by the Company and JPMC);

2) a term sheet having been executed by the Company and JPMC (though neither party is obliged to execute the same) setting out the final number of Placing Shares to be placed;

3) none of the representations or warranties of the Company or Bear Stearns Asset Management Inc. contained therein being untrue, inaccurate, incorrect or misleading in any respect which is material in the context of the Placing at any time up to and including Admission; and

4) the Company and Bear Stearns Asset Management Inc. having complied with their obligations under the Placing Agreement, save to the extent that any non-compliance is not material in the context of the Placing or Admission.

If (i) any of the conditions contained in the Placing Agreement in relation to the Placing Shares are not fulfilled or waived by JPMC by the respective time or date where specified (or such later time or date as the Company and JPMC may agree, where applicable) or (ii) any of such conditions becomes incapable of being fulfilled, the Placing will lapse and the Placee's rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof. By participating in the Placing each Placee agrees that its rights and obligations cease and terminate only in the circumstances described above or following termination of the Placing Agreement by JPMC and each Placee agrees that its rights and obligations will not be capable of rescission or termination by it. 

JPMC may, at its discretion and upon such terms as it thinks fit, waive compliance by the Company with the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement save that the above condition relating to Admission taking place may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement. 

Neither JPMC nor the Company shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision it may make as to whether or not to waive or to extend the time and /or date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of JPMC or the Company. 

Right to terminate under the Placing Agreement 

JPMC is entitled, at any time before Admission, to terminate the Placing Agreement in relation to its obligations in respect of the Placing in certain circumstances, including a breach of the warranties given to JPMC in the Placing Agreement or if JPMC determines that market conditions are not appropriate. 

By participating in the Placing Placees agree that the exercise by JPMC of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of JPMC and that it need not make any reference to Placees and that it shall have no liability to Placees whatsoever in connection with any such exercise. 

No Prospectus 

No offering document or prospectus has been or will be submitted to be approved by the FSA in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in this Announcement and any information previously published by the Company by notification to a Regulatory Information Service (together, 'Public Information'). Each Placee, by accepting a participation in the Placing, agrees that the content of the Public Information is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information, representation, warranty, or statement made by or on behalf of the Company or JPMC or any other person and neither JPMC nor the Company nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation. 

Registration and Settlement 

Settlement of transactions in the Placing Shares (ISIN:GB00B07V0R25) following Admission will take place within the CREST system, subject to certain exceptions. JPMC reserves the right to require settlement for and delivery of the Placing Shares to Placees by such other means that it deems necessary if delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in the Placee's jurisdiction. 

Each Placee allocated Placing Shares in the Placing will be sent a trade confirmation stating the number of Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee to JPMC and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST or certificated settlement instructions that it has in place with JPMC. 

It is expected that settlement will be on 5 September 2008 on a T+3 basis in accordance with the instructions set out in the trade confirmation. 

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by JPMC. 

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

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation. 

Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. 

Representations and Warranties 

By participating in the Placing each Placee (and any person acting on such Placee's behalf): 

1 represents and warrants that it has read this Announcement, including the Appendix, in its entirety and undertakes not to redistribute or duplicate it; 

2 acknowledges that no offering document or prospectus has been prepared in connection with the placing of the Placing Shares and represents and warrants that it has not received a prospectus or other offering document in connection therewith; 

3 acknowledges that the Shares are listed on 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 FSA, which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and that it is able to obtain or access such information without undue difficulty; 

4 acknowledges that neither JPMC nor the Company nor any of their affiliates nor any person acting on behalf of any of them has provided, and will not provide it, with any material regarding the Placing Shares or the Company other than this Announcement; nor has it requested any of JPMC, the Company, any of their affiliates or any person acting on behalf of any of them to provide it with any such information; 

5 acknowledges that the content of this Announcement is exclusively the responsibility of the Company and that neither JPMC nor any person acting on its behalf has or shall have any liability for any information, representation or statement contained in this Announcement or any information previously published by or on behalf of the Company and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to acquire the Placing Shares is contained in this Announcement and any information previously published by the Company by notification to a Regulatory Information Service, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by any of JPMC or the Company and neither JPMC nor the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement. Each Placee further acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing; 

6 acknowledges that neither JPMC nor any person acting on behalf of it nor any of its affiliates has or shall have any liability for any publicly available or filed information or any representation relating to the Company, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person; 

7 represents and warrants that it, or the beneficial owner, as applicable, is entitled to subscribe for Placing Shares under the laws of all relevant jurisdictions which apply to it and that it has fully observed such laws and obtained all such governmental and other permissions and other consents in either case which may be required thereunder and complied with all necessary formalities; 

8 acknowledges that the Placing Shares have not been and will not be registered under the US Securities Act or with any State or other jurisdiction of the United States, nor approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any other United States regulatory authority, and agrees not to reoffer, resell, pledge or otherwise transfer the Placing Shares except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act; 

9 represents, warrants and acknowledges that it is, at the time the offer to it of the Placing Shares and at the time buy order originates, outside the United States for the purposes of Rule 903 of Regulation S under the US Securities Act; 

10 represents and warrants that it is not a 'benefit plan investor' (within the meaning of the US Employee Retirement Income Security Act of 1974, as amended ('ERISA')), or other employee benefit plan subject to any US federal, state, local or other law or regulation that is substantially similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the US Internal Revenue Code of 1986, as amended, and that it will not sell or otherwise transfer any Placing Shares or any interest therein unless the transferee makes or is deemed to make the representations and warranties set forth in this section, and the purchaser acknowledges and agrees that any purported transfer of Placing Shares or any interest therein that does not comply with this section will not be effective and will not be recognised by the Company; 

11 represents and warrants that it is, or at the time the Placing Shares are acquired that it will be, the beneficial owner of such Placing Shares, or that the beneficial owner of such Placing Shares is not a resident of the US, Australia, Canada or Japan; 

12 acknowledges that the Placing Shares have not been and will not be registered under the securities legislation of the United States, Australia, Canada or Japan and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within those jurisdictions; 

13 represents and warrants that the issue to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services) and that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer Placing Shares into a clearance system; 

14 represents and warrants that it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2003 and the Money Laundering Regulations 2003 (the 'Regulations') and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations; 

15 represents and warrants that it and any person acting on its behalf is a person falling within Article 19 and/or 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business; 

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

17 represents and warrants that it has not offered or sold and, prior to the expiry of a period of six months from Admission, will not offer or sell any Placing Shares to persons in the European Economic Area prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the European Economic Area within the meaning of the Prospectus Directive (which means Directive 2003/71/EC and includes any relevant implementing measure in any member state); 

18 if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, represents and warrants that the Placing Shares subscribed for and/or purchased by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of securities to the public other than an offer or resale in a member state of the EEA which has implemented the Prospectus Directive to Qualified Investors, or in circumstances in which the prior consent of JPMC has been given to each such proposed offer or resale;

19 represents and warrants that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) relating to the Placing Shares in circumstances in which section 21(1) of the FSMA does not require approval of the communication by an authorised person; 

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

21 represents and warrants that it and any person acting on its behalf is entitled to acquire the Placing Shares under the laws of all relevant jurisdictions and that it has all necessary powers and capacity and has obtained all necessary consents and authorities to enable it to commit to this participation in the Placing and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this Announcement) and will honour such obligations; 

22 undertakes that it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with this Announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other subscribers or sold as JPMC may in its sole discretion determine and without liability to such Placee; 

23 acknowledges that none of JPMC, nor any of its affiliates, nor any person acting on behalf of any of them, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placees and that participation in the Placing is on the basis that it is not and will not be a client of JPMC and that JPMC has no duties or responsibilities to it for providing the protections afforded to its clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right; 

24 undertakes that the person who it specifies for registration as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. Neither JPMC nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify the Company and JPMC in respect of the same on the basis that the Placing Shares will be allotted to the CREST stock account of JPMC who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions; 

25 acknowledges that any agreements entered into by it pursuant to these terms and conditions shall be governed by and construed in accordance with the laws of England and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or JPMC in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange; 

26 agrees that the Company, JPMC and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and undertakings which are given to JPMC on its own behalf and on behalf of the Company and are irrevocable; and 

27 agrees to indemnify and hold the Company and JPMC harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing. 

The agreement to settle a Placee's acquisition (and/or the acquisition of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to an acquisition by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement related to any other dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor JPMC will be responsible. If this is the case, each Placee should seek its own advice and notify JPMC accordingly. 

In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the subscription by them of any Placing Shares or the agreement by them to subscribe for any Placing Shares. 

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

All times and dates in this Announcement may be subject to amendment. JPMC shall notify the Placees and any person acting on behalf of the Placees of any changes. 

END 

 

END

 

 

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