Increased and final recommended offer

Fortress Investment Group (UK) Ltd

15 January 2025

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

FOR IMMEDIATE RELEASE

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

15 January 2025

INCREASED AND FINAL* RECOMMENDED OFFER

FOR

LOUNGERS PLC

BY

CF EXEDRA BIDCO LIMITED

(a newly-formed company indirectly owned by funds and accounts managed or advised by affiliates of Fortress Investment Group, LLC)

to be implemented by means of a scheme of arrangement under Part 26 of the Companies Act 2006

Introduction

On 28 November 2024 (the "Original Announcement Date"), the boards of directors of Loungers plc ("Loungers") and CF Exedra Bidco Limited ("Bidco"), a newly-formed company indirectly owned by funds and accounts managed or advised by affiliates of Fortress Investment Group, LLC ("Fortress"), announced that they had reached agreement on the terms and conditions of a recommended acquisition by Bidco of the entire issued and to be issued share capital of Loungers (the "Acquisition"). The Acquisition is to be effected by means of a Court sanctioned scheme of arrangement under Part 26 of the Companies Act 2006 (the "Scheme").

The shareholder circular in respect of the Acquisition (the "Scheme Document") was published and made available to Loungers Shareholders on 17 December 2024. This announcement should be read in conjunction with the Scheme Document.

Unless otherwise defined, capitalised terms used in this announcement have the same meanings as set out in the Scheme Document. All references in this announcement to times are to London time unless otherwise stated.

Increased and Final* Offer

The boards of directors of Bidco and Loungers are pleased to announce that they have reached an agreement on the terms of an increased recommended offer by Bidco for the entire issued and to be issued share capital of Loungers (the "Increased and Final Offer").  

*Bidco considers the financial terms of the Increased and Final Offer to be fair. Bidco therefore confirms today that the financial terms of the Increased and Final Offer are final and will not be increased, except that Bidco reserves the right to increase the Increased and Final Cash Offer (as defined below), the Increased and Final Alternative Offer (as defined below) and/or otherwise improve the terms of the Acquisition: (i) if there is an announcement on or after the date of this announcement of a possible offer or of a firm intention to make an offer for Loungers by any third party; or (ii) if the Panel otherwise provides its consent (such consent to be given only in wholly exceptional circumstances).

The Increased and Final Cash Offer

Under the terms of the Increased and Final Offer, Loungers Shareholders will be entitled to receive:

for each Scheme Share:           325 pence in cash

(the "Increased and Final Cash Offer")

The Increased and Final Cash Offer values the entire issued, and to be issued, ordinary share capital of Loungers at approximately £354.4 million, and implies an enterprise value of approximately £366.6 million and a multiple of approximately 8.4 times Loungers' FY24 Adjusted EBITDA (before site pre-opening costs) and of approximately 9.4 times Loungers' FY24 Adjusted EBITDA (after site pre-opening costs).

The Increased and Final Cash Offer represents a premium of approximately 4.8 per cent. to 310 pence per Loungers Share, being the original Cash Offer for the Acquisition (the "Original Cash Offer"), and a premium of approximately:

·    36.6 per cent. to the closing price of 238.0 pence per Loungers Share on 27 November 2024, being the last Business Day before the Original Announcement Date;

·    46.5 per cent. to the volume weighted average price of 221.9 pence per Loungers Share in the two weeks to 27 November 2024, being the last Business Day before the Original Announcement Date;

·    41.1 per cent. to the volume weighted average price of 230.4 pence per Loungers Share in the one month to 27 November 2024, being the last Business Day before the Original Announcement Date; and

·    35.9 per cent. to the volume weighted average price of 239.2 pence per Loungers Share in the twelve months to 27 November 2024, being the last Business Day before the Original Announcement Date.

The Increased and Final Alternative Offer

As an alternative to the Increased and Final Cash Offer, Eligible Scheme Shareholders will continue to be able to elect for the Alternative Offer in relation to some or all of their holdings of Loungers Shares (subject to the implementation of the Rollover Process as detailed in the Scheme Document). As a result of the Increased and Final Offer, Eligible Scheme Shareholders who elect for the Alternative Offer will receive (subject to the implementation of the Rollover Process as detailed in the Scheme Document) for each Loungers Share:

1 Rollover Unit (each Rollover Unit comprising 3.67862913805519 Topco Ordinary Shares and 321.321370861945 Topco B Preference Shares (the "Revised Exchange Ratio"))

As the Increased and Final Cash Offer represents an increase in value per Loungers Share, the value of the Rollover Unit will be increased commensurately. To reflect the increased value of a Rollover Unit, the number of Topco B Preference Shares and Topco Ordinary Shares per Rollover Unit have been increased so as to maintain as closely as possible the ratio of the Topco B Preference Shares and Topco Ordinary Shares received by Loungers Shareholders who validly elect for the Alternative Offer (the "Increased and Final Alternative Offer").

Except for the Revised Exchange Ratio, the terms and conditions of the Increased and Final Alternative Offer (as detailed in Part V (Details of the Rollover Units) of the Scheme Document) have not changed and the Topco Ordinary Shares and the Topco B Preference Shares will continue to have the rights of the "Ordinary Shares" and "B Preference Shares" respectively set out in the Revised Topco Shareholders' Agreement and the Topco Articles (as amended from time to time).

For the purposes of Rule 24.11 of the Takeover Code, the Rollover Units have been independently valued by HSBC (as financial adviser to Bidco) and an estimate of the value of the Rollover Units, together with the assumptions, qualifications and caveats forming the basis of that estimate of value, was set out at Part XI (Rule 24.11 HSBC Estimated Value of Rollover Units) of the Scheme Document. It is HSBC's view that under the terms of the Increased and Final Alternative Offer, the Estimated Value of each Rollover Unit is a range of 240 pence to 285 pence (the "Revised Estimated Value"). As a result of the Increased and Final Alternative Offer and the Revised Estimated Value, HSBC have prepared a Revised 24.11 Letter, which is attached as Appendix 2 to this announcement. 

The Increased and Final Offer is subject to the terms and conditions set out in the Scheme Document (as modified by the terms of the Increased and Final Offer contained in this announcement). Loungers Shareholders should note that Loungers does not intend to publish a revised scheme document for the Increased and Final Offer.

If, on or after the Announcement Date and before the Effective Date, any dividend and/or other distribution and/or other return of capital is declared, made or paid or becomes payable in respect of Loungers Shares, Bidco shall reduce the consideration payable under the terms of the Increased and Final Cash Offer (and, as the case may be, the consideration due under the terms of the Increased and Final Alternative Offer), by an amount up to the amount of such dividend and/or distribution and/or return of capital, in which case any reference in this document to the consideration payable under the Increased and Final Cash Offer (or consideration due under the Increased and Final Alternative Offer) will be deemed to be a reference to the consideration as so reduced. If the consideration payable under the terms of the Increased and Final Cash Offer (or consideration due under the Increased and Final Alternative Offer) is reduced in accordance with this paragraph, it shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the terms of the Scheme.

Comments on the Increased and Final Offer

Commenting on the Increased and Final Offer, Alex Reilley, the Chairman of Loungers said:

"We are very pleased that Fortress has decided to increase its offer, making it even more compelling for Loungers Shareholders and reinforcing the Loungers Directors' recommendation that they should vote in favour of the Acquisition."

Commenting on the Increased and Final Offer, Domnall Tait, Managing Director of Fortress said:

"This increased offer for Loungers reflects our continued belief in the business and its management team, and we look forward to supporting them through the next stage of growth. Notwithstanding the recent challenges, Fortress remains a strong believer in the UK."

Recommendation of the Increased and Final Cash Offer

The Loungers Directors, who have been so advised by Houlihan Lokey as to the financial terms of the Increased and Final Cash Offer, consider the terms of the Increased and Final Cash Offer to be fair and reasonable. In providing its advice to the Loungers Directors, Houlihan Lokey has taken into account the commercial assessments of the Loungers Directors. Houlihan Lokey is providing independent financial advice to the Loungers Directors for the purposes of Rule 3 of the Takeover Code.

Accordingly, the Loungers Directors unanimously recommend that Loungers Shareholders vote in favour of the Scheme at the Court Meeting and the Resolution to be proposed at the General Meeting as the Loungers Directors who are interested in Loungers Shares have irrevocably undertaken to do (or procure to be done) in respect of their own beneficial holdings, being, in aggregate, 7,759,526 Loungers Shares (representing approximately 7.5 per cent. of the issued ordinary share capital of Loungers as at close of business on 14 January 2025, being the latest practicable date prior to publication of this announcement.

As an alternative to the Increased and Final Cash Offer, Eligible Scheme Shareholders may also elect for the Increased and Final Alternative Offer in respect of some or all of their Loungers Shares. Houlihan Lokey is unable to advise the Loungers Directors as to whether or not the financial terms of the Increased and Final Alternative Offer are fair and reasonable. Accordingly, the Loungers Directors are unable to form an opinion as to whether or not the terms of the Increased and Final Alternative Offer are fair and reasonable and are not making any recommendation to Loungers Shareholders as to whether or not they should elect for the Increased and Final Alternative Offer, and in this regard Loungers Shareholders attention is drawn to section 16 of Part I (Letter from the Executive Chair of Loungers plc) of the Scheme Document.

Background to and reasons for the Loungers' Directors recommendation of the Increased Final Cash Offer

The Loungers Directors welcome the decision by Bidco to increase the value of the Original Cash Offer. The Loungers Directors reaffirm the reasons for their recommendation of the Original Cash Offer, as set out in paragraph 3 of Part 1 of the Scheme Document, with respect to the Increased and Final Cash Offer.

The Loungers Directors not only believe that the Increased and Final Cash Offer is in the best interests of Loungers and the Loungers Shareholders but also that the consequences of the Acquisition failing to complete could be materially detrimental for Loungers and Loungers Shareholders. 

In order to ensure that Loungers Shareholders are in a position to make a fully informed decision about the Acquisition, the Loungers Directors wish to highlight the following:

1.   the Increased and Final Cash Offer represents an approximately 4.8 per cent. premium on the value of the Original Cash Offer and a premium of 8.3 per cent. to the highest-ever closing price prior to the Original Announcement Date of a Loungers Share of 300 pence. The Increased and Final Cash Offer will provide the opportunity to receive an immediate and certain value per Loungers Share in cash at a valuation that might not otherwise become available and would, in any event, be subject to recognition by the stock market of the successful ongoing execution of Loungers' strategy and sufficient liquidity in the Loungers Shares;

2.   the Increased and Final Offer has been made despite the increasing weight of negative comment about the outlook for the sector and implies a multiple of approximately 8.4 times Loungers' FY24 Adjusted EBITDA (before site pre-opening costs) and of approximately 9.4 times Loungers' FY24 Adjusted EBITDA (after site pre-opening costs) which, the Loungers Directors believe, is at a level comparable with relevant recent precedent;

3.   the Increased and Final Offer is, by a significant measure, the highest offer received for Loungers following its comprehensive and competitive sale process involving both private equity and strategic potential acquirors and several rounds of negotiations with Fortress, as detailed in paragraph 3 of Part 1 of the Scheme Document. The Loungers Directors believe that it is instructive, and indicative of the fair value represented by the Original Cash Offer, let alone the Increased and Final Cash Offer, that in the period since the Original Announcement Date, Loungers has received no competing offer approaches from any third party;

4.   that sale process was itself the culmination of extended strategic discussions aimed at addressing the failure of the Loungers Share price to reflect the business' strong operational performance. Loungers had, in conjunction with its brokers and other advisers, considered several options to address this, including the commencement of dividend payments and share buy-backs. However, it was ultimately concluded such actions would not have a meaningful impact. Loungers also sought to engage with potential new investors, including retail investors, and increased both its media and research analyst engagement. The effect of these actions on Loungers' valuation was limited and, as a result, the Loungers Directors decided to evaluate the potential for a recommendable offer;

5.   if the Acquisition were to fail to complete, the consequences could, in the opinion of the Loungers Directors, be materially detrimental to Loungers and Loungers Shareholders.  It would undermine both the recommendation of the Loungers Directors and, in particular, the positions of Executive Chairman Alex Reilley and CEO Nick Collins, both of whom are fully supportive of the Acquisition and both of whom would find their positions untenable if it was voted down by Loungers Shareholders. Investors and other market participants acknowledge that one of Loungers' key strengths is its strong management team. The Loungers Directors consider that Loungers' team morale stems, in large part, from its executive leadership and that should any of the management team leave Loungers as a result of the Acquisition being voted down at this stage, it would undoubtedly impact the Loungers business, potentially materially;

6.   the Loungers Directors have little confidence that the stock market outlook for quoted consumer stocks will improve markedly in the foreseeable future. The Loungers Directors consider that 2025 is likely to be a challenging year for British consumers as retailers and leisure operators raise prices again to mitigate the rise in National Insurance Contributions and the National Minimum Wage introduced in the October budget.  Loungers too has meaningful incremental costs as a result of these measures which it will need to seek to mitigate; and

7.   the Loungers Directors believe that poor liquidity in Loungers Shares is a reason why it has been hard to attract new institutional investors to Loungers. Should the Acquisition not complete, the Loungers Directors would expect to see downward pressure on the Loungers Share price as the factors mentioned above materialise, and believe that this would be exacerbated by selling pressure from short term event driven investors that joined the Loungers share register following the Original Announcement and other Loungers Shareholders who wished to receive the Increased and Final Cash Offer but were prevented from doing so because the Acquisition did not complete. Even if the value of the Loungers Shares were to increase over time, the Loungers Directors believe that the poor liquidity in the Loungers Shares is likely to restrict material volumes of Loungers Shares being traded.

For these reasons, the Loungers Directors believe that the Increased and Final Cash Offer is in the best interests of Loungers and the Loungers Shareholders. Accordingly, the Loungers Directors recommend unanimously that Loungers Shareholders vote in favour of the Scheme at the Court Meeting and the Resolution to be proposed at the General Meeting, as the Loungers Directors who are interested in Loungers Shares have irrevocably undertaken to do (or procure to be done) in respect of their own beneficial holdings, being, in aggregate, 7,759,526 Loungers Shares (representing approximately 7.5 per cent. of the issued ordinary share capital of Loungers as at close of business on 14 January 2025, being the latest practicable date prior to publication of this announcement.

Irrevocable Undertakings and Letter of Intent

Loungers Directors

Revised irrevocable undertakings in relation to the Increased and Final Alternative Offer have been received from Loungers Directors who hold Loungers Shares and who intend to participate in the Increased and Final Alternative Offer (being Alex Reilley and Nick Collins). These revised irrevocable undertakings reflect the terms of the Increased and Final Offer and account for the fact that both intend to increase their participation in the Increased and Final Alternative Offer.

Name	Total Number of Loungers Shares	Percentage of existing issued share capital held	Percentage of existing issued share capital committed to the Increased and Final Alternative Offer
Alex Reilley	6,751,432	6.5	5.0
Nick Collins	956,276	0.9	0.3

A revised irrevocable undertaking, which reflects the terms of the Increased and Final Offer, has also been received from Stephen Marshall. He does not currently hold any Loungers Shares but to the extent he acquires any as a result of the vesting of awards or the exercise of options under the Loungers Share Plans following the date of this announcement, he intends to participate in the Increased and Final Alternative Offer in respect of 100 per cent. of his Loungers Shares (which are expected to represent 0.02 per cent. of the fully diluted share capital of Loungers at completion of the Acquisition).

Robert Darwent is a Loungers Director. He holds no Loungers Shares in his own name. However, he is a representative of Lion on the Loungers Board. Lion is interested in 26,728,524 Loungers Shares and has given an irrevocable undertaking as described below.

Loungers Shareholders

Revised irrevocable undertakings, which reflect the terms of the Increased and Final Offer, have also been received from Lion, Jake Bishop and Justin Carter, all of whom currently hold Loungers Shares and intend to participate in the Increased and Final Alternative Offer, and in the case of Jake Bishop and Justin Carter reflect that both intend to increase their participation in the Increased and Final Alternative Offer.

Name	Total Number of Loungers Shares	Percentage of existing issued share capital held	Percentage of existing issued share capital committed to the Increased and Final Alternative Offer
Lion Capital LLP	26,728,524	25.7	25.7
Jake Bishop	6,507,432	6.3	4.9
Justin Carter	598,572	0.6	0.3

Revised irrevocable undertakings, which reflect the terms of the Increased and Final Offer, have also been received from Kate Eastwood, Lucy Knowles, Jono Jenkins, Tom Trenchard and Guy Youll. They do not currently hold any Loungers Shares, but intend to participate in the Increased and Final Alternative Offer in respect of 30 per cent., 30 per cent., 15.9 per cent., 15.9 per cent. and 40 per cent. respectively of the Loungers Shares they acquire as a result of the vesting of awards or the exercise of options under the Loungers Share Plans following the date of this announcement (which are expected to represent 0.01 per cent., 0.02 per cent., 0.01 per cent, 0.02 per cent. and 0.09 per cent. respectively of the fully diluted share capital of Loungers at completion of the Acquisition).

Copies of the revised irrevocable undertakings will be available on Fortress' website at https://www.fortress.com/loungers-offer and on Loungers' website at https://loungers.co.uk/offer-documentation by no later than 12 noon on 16 January 2025.  

The irrevocable undertakings and the non-binding letter of intent previously received by Bidco, and which have not been revised, remain valid in relation to the Increased and Final Offer. Further information regarding these irrevocable undertakings can be found at Part X (Additional Information) of the Scheme Document.

In total therefore, Bidco has procured irrevocable undertakings to vote (or, where applicable, procure voting) in favour of the Scheme at the Court Meeting and the Resolution to be proposed at the General Meeting (or if the Acquisition is implemented by an Offer, to accept or procure acceptance of such Offer) in respect of, in aggregate, 41,774,202 Loungers Shares, representing approximately 40.2 per cent. of the existing issued ordinary share capital of Loungers as at 14 January 2025, the latest practicable date prior to the date of this announcement.

Financing of the Increased and Final Offer

The additional cash consideration payable pursuant to the Increased and Final Offer will be financed by equity to be invested by the Fortress Funds. On 15 January 2025, Bidco and certain of the Fortress Funds entered into a revised Equity Commitment Letter (the "Revised Equity Commitment Letter") to reflect the revised total amount of the Fortress Equity Investment which may be required. A revised Omnibus Subscription Agreement (the "Revised Omnibus Subscription Agreement") was also entered into to reflect the terms of the Increased and Final Offer. The balance of the cash consideration payable pursuant to the acquisition will be financed in the manner described in paragraph 9 of Part II (Explanatory Statement) of the Scheme Document.

Further detail regarding the funding of the Acquisition can be found at Part II (Explanatory Statement) and at paragraph 6 of Part X (Additional Information) of the Scheme Document. 

HSBC, in its capacity as sole financial adviser to Bidco, is satisfied that sufficient resources are available to Bidco to satisfy in full the cash consideration payable to Loungers Shareholders pursuant to the terms of the Acquisition.

Information on Topco share capital

The total amount of the Fortress Equity Investment on the Effective Date in connection with the Increased and Final Offer will continue to depend on the number of elections validly made by Eligible Scheme Shareholders under the Increased and Final Alternative Offer. If no valid elections are received from Loungers Shareholders other than those who have irrevocably undertaken to participate in the Increased and Final Alternative Offer (as described in this announcement and at paragraph 6 of Part X (Additional Information) of the Scheme Document), the amount of the Fortress Equity Investment would be £112.3 million (with the amount of the Fortress Preference Investment being an amount equal to £112.3 million minus the amount of the Fortress Ordinary Investment) and the share capital of Topco would comprise, following, and subject to, the implementation of the Rollover Process:

·       143,432,648 Topco Ordinary Shares issued to Loungers Shareholders;

·       95,621,765 Topco Ordinary Shares issued to Fortress Funds;

·       12,528,573,451 Topco B Preference Shares issued to Loungers Shareholders; and

·       11,137,813,610 Topco A Preference Shares issued to Fortress Funds.

For every additional Loungers Share which is subject to the Increased and Final Alternative Offer, the Fortress Equity Investment will be reduced (on a pound for pound basis) by an amount equal to the value of the Increased and Final Cash Offer in respect of each such additional Loungers Share participating in the Increased and Final Alternative Offer (subject always to the Alternative Offer Maximum). Accordingly, if the Increased and Final Alternative Offer were taken up in full by Eligible Scheme Shareholders, the maximum amount of the Fortress Equity Investment would be £107.3 million (with the amount of the Fortress Preference Investment being an amount equal to £107.3 million minus the amount of the Fortress Ordinary Investment) and the share capital of Topco would comprise, following, and subject to, the implementation of the Rollover Process:

·       149,112,798 Topco Ordinary Shares issued to Loungers Shareholders;

·       99,408,532 Topco Ordinary Shares issued to Fortress Funds;

·       13,024,723,851 Topco B Preference Shares issued to Loungers Shareholders; and

·       10,632,196,205 Topco A Preference Shares issued to Fortress Funds.

Any fractional entitlements of a Loungers Shareholder to Topco Ordinary Shares and Topco B Preference Shares under the Increased and Final Alternative Offer will be rounded down to the nearest whole number of Topco Ordinary Shares and Topco B Preference Shares per Loungers Shareholder. Fractional entitlements to Topco Ordinary Shares and Topco B Preference Shares will not be allotted or issued to such Loungers Shareholder but will be disregarded. Any fractional entitlements of Fortress Funds to Topco Ordinary Shares or Topco A Preference Shares will be rounded down to the nearest whole number and any such fractional entitlements will be disregarded.

Accordingly, if a Loungers Shareholder with 1,000 Loungers Shares validly accepts the Alternative Offer in respect of such shares, they would, subject to the implementation of the Rollover Process and to any scale back pursuant to the mechanism described at paragraph 3 of ‎Part II (Explanatory Statement) of the Scheme Document, receive 1,000 Rollover Units (comprising 3,678 Topco Ordinary Shares and 321,321 Topco B Preference Shares).

Court Meeting and General Meeting

The Loungers Board confirms that the Court Meeting and the General Meeting, notices of which are set out in Part XII (Notice of Court Meeting) and Part XIII (Notice of General Meeting) of the Scheme Document respectively, will be held at 9.00 a.m. and 9.15 a.m. (or, if later, as soon as the Court Meeting has concluded or been adjourned), respectively, on 30 January 2025 at the offices of Loungers at 26 Baldwin Street, Bristol, BS1 1SE in accordance with the Scheme Document.

Action to be taken by Loungers Shareholders

As described in the Scheme Document, in order to become Effective the Scheme will require, among other things, the approval at the Court Meeting of a majority in number of the Scheme Shareholders present and voting in person or by proxy, representing not less than 75 per cent. in value of the Scheme Shares held by such Scheme Shareholders, the passing of the Resolution, among other things, to implement the Scheme at the General Meeting by the requisite majority of Loungers Shareholders at such General Meeting and the subsequent sanction of the Scheme by the Court. The Scheme is also subject to the satisfaction or, where applicable, waiver of the Conditions and to further terms that are set out in the Scheme Document. It is important that, for the Court Meeting in particular, as many votes as possible are cast so that the Court may be satisfied that there is fair representation of the opinion of Scheme Shareholders.

Scheme Shareholders who have not yet done so are therefore strongly encouraged to complete, sign and return the Form of Proxy in accordance with the instructions printed thereon or, alternatively, to appoint a proxy or voting instruction online or through CREST, for both the Court Meeting and the General Meeting, as soon as possible and by no later than the following times and dates:

·      BLUE Form of Proxy for use at the Court Meeting so as to be received no later than 9.00 a.m. on 28 January 2025; and

·      WHITE Form of Proxy for use at the General Meeting so as to be received no later than 9.15 a.m. on 28 January 2025.

If the BLUE Form of Proxy for the Court Meeting is not returned by the above time, it may be handed to a representative of Link Group, on behalf of the Chairman of the Court Meeting, or to the Chairman of the Court Meeting, before the start of that Meeting. However, in the case of the General Meeting, the WHITE Form of Proxy must be received by Link Group by the time mentioned above, or it will be invalid.

Loungers Shareholders are reminded that completion and return of a Form of Proxy, or the appointment of a proxy electronically using CREST (or any other procedure described in the Scheme Document), will not prevent them from attending, speaking and voting in person at either the Court Meeting and/or the General Meeting, or any adjournment thereof, if they wish and are entitled to do so.

Loungers Shareholders who do NOT wish to change their voting instructions or Form of Election

Loungers Shareholders who have already submitted Forms of Proxy for the Court Meeting and/or General Meeting and who do not wish to change their voting instructions need take no further action as their Forms of Proxy will continue to be valid in respect of the Court Meeting and the General Meeting.

Loungers Shareholders who have already submitted a Form of Election in respect of the Alternative Offer and who do not wish to change their election need take no further action as their Form of Election will continue to be valid in respect of the Increased and Final Alternative Offer.

Loungers Shareholders who DO wish to change their voting instructions or Form of Election

Loungers Shareholders who have already submitted Forms of Proxy for the Court Meeting and/or General Meeting or a Form of Election in respect of the Alternative Offer and who now wish to change their voting instructions or election should contact Link Group by calling the shareholder helpline between 9.30 a.m. and 5.30 p.m. Monday to Friday (excluding public holidays in England and Wales) on [phone]. Calls are charged at the standard geographic rate and will vary by provider. Calls from outside the UK will be charged at the applicable international rate. Please note that Link Group cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

Conditions

The Conditions to the Acquisition are set out in full in Part III (Conditions to and further terms of the Acquisition and the Scheme) of the Scheme Document.

The Scheme will be modified to reflect the terms of the Increased and Final Offer. Save as disclosed in this announcement, the Increased and Final Offer is subject to the terms and conditions set out in the Scheme Document.

Expected Timetable of Principal Events

The Scheme Document contains an expected timetable of principal events relating to the Scheme, which is also attached as Appendix 1 to this announcement. Subject to obtaining the necessary approvals of the Scheme Shareholders at the Court Meeting, Loungers Shareholders at the General Meeting, the satisfaction or, where applicable, the waiver of the other Conditions (as set out in the Scheme Document) and the sanction of the Court, the Scheme is expected to become effective on or around 11 February 2025.

If any of the key dates and/or times set out in the expected timetable change, Loungers will give notice of this change by issuing an announcement through a Regulatory Information Service with such announcement being made available on Loungers' website at https://loungers.co.uk/offer-documentation.

General

The Increased and Final Offer does not change Bidco's intentions as regards the Loungers business (including locations of its operations), the management and employees of Loungers, existing employment and pension rights. The Increased and Final Offer does not change the effect of the Scheme on participants' options and awards under the Loungers Share Plans or (where applicable) the appropriate proposal in respect of such rights pursuant to Rule 15 of the Takeover Code. Joint letters are being sent to participants in the Loungers Share Plans to update them on the Increased and Final Offer and giving them the opportunity to change their decisions as to whether to receive the Increased and Final Cash Offer or the Increased and Final Alternative Offer in relation to the Loungers Shares under their options and awards (the "Share Plan Participant Letters"). The Share Plan Participant Letters will be made available on the Fortress website at https://www.fortress.com/loungers-offer and the Loungers' website at https://loungers.co.uk/offerdocumentation.

Save as disclosed in this announcement, there are no disclosures required to be made under Rule 27.2(a), 27.2(b) or 27.2(c) of the Takeover Code by Loungers, Bidco or Fortress.

Revised documents

The Omnibus Put and Call Option Deed, the Bidco Loan Note Instrument and the Midco Loan Note instrument have been revised to reflect the terms of the Increased and Final Alternative Offer.

Sources and Bases

Appendix 3 to this announcement contains sources and bases of certain information contained in this announcement.

Consents

Each of HSBC, Houlihan Lokey, Panmure Liberum and Peel Hunt has given and not withdrawn its written consent to the inclusion herein of the references to its name in the form and context in which such references appear.

Documents available on website

Copies of the following documents will, by no later than 12 noon on 16 January 2025, be made available via the links on Fortress' website at https://www.fortress.com/loungers-offer and Loungers' website at https://loungers.co.uk/offer-documentation:

·      this announcement;

·      letters to Loungers Shareholders notifying them of this announcement;

·      the Share Plan Participant Letters;

·      the Revised 24.11 Letter;

·      the Revised Equity Commitment Letter;

·      the Revised Omnibus Subscription Agreement;

·      the Revised Omnibus Put and Call Option Deed;

·      the Revised Bidco Loan Note Instrument;

·      the Revised Midco Loan Note Instrument;

·      the revised irrevocable undertakings as described in this announcement; and

·      the consent letters from each of the financial advisers and brokers referred to above.

The contents of the websites referred to in this announcement are not incorporated into and do

not form part of this announcement.

Enquiries:

HSBC Bank plc (Financial Adviser to Bidco)
Anthony Parsons David Plowman Christopher Fincken Alex Thomas Alina Vaskina (Corporate Broking)	[phone]
Cardew Group (Communications adviser to Fortress) Ed Orlebar ([e-mail]) Olivia Rosser ([e-mail]) [e-mail]	[phone] [phone]
Loungers Nick Collins Stephen Marshall	[phone]
Houlihan Lokey UK Limited (Financial Adviser to Loungers) Sam Fuller Tim Richardson Tom Barnard	[phone]
Panmure Liberum Limited (Joint Broker to Loungers) Andrew Godber Rupert Dearden William King	[phone]
Peel Hunt LLP (Joint Broker to Loungers) Dan Webster Sohail Akbar Andrew Clark	[phone]
Sodali & Co (PR Adviser to Loungers) Rob Greening Russ Lynch	[phone]

Slaughter and May is acting as legal adviser to Bidco.

Jones Day is acting as legal adviser to Loungers.

Important Notices Relating to Financial Advisers

HSBC Bank plc ("HSBC"), which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation Authority, is acting as financial adviser exclusively for Bidco and no one else in connection with the Acquisition and will not be responsible to anyone other than Bidco for providing the protections afforded to clients of HSBC, or for providing advice in relation to the Acquisition or any other matters referred to in this announcement. Neither HSBC nor any of its group undertakings or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of HSBC in connection with this announcement or any matter referred to herein.

Houlihan Lokey UK Limited ("Houlihan Lokey"), which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting as financial adviser exclusively for Loungers and no one else in connection with the Acquisition and will not be responsible to anyone other than Loungers for providing the protections afforded to clients of Houlihan Lokey or for providing advice in relation to the Acquisition or any other matters referred to in this announcement. Neither Houlihan Lokey nor any of its affiliates owes or accepts any duty, liability, or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Houlihan Lokey in connection with this announcement, any statement contained herein or otherwise.

Panmure Liberum Limited ("Panmure Liberum"), which is authorised and regulated in the United Kingdom by the FCA, is acting as corporate broker exclusively for Loungers and no one else in connection with the Acquisition and the matters set out in this announcement. Panmure Liberum will not regard any other person as its client in relation to the Acquisition or any other matter or arrangement set out in this announcement and will not be responsible to anyone other than Loungers for providing the protections afforded to clients of Panmure Liberum, nor for providing advice in relation to the Acquisition or any other matter or arrangement referred to in this announcement. Neither Panmure Liberum nor any of its affiliates (nor their respective directors, officers, employees or agents) owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Panmure Liberum in connection with the Acquisition, this announcement, any statement contained herein or otherwise. No representation or warranty, express or implied, is made by Panmure Liberum as to the contents of this announcement.

Peel Hunt LLP ("Peel Hunt"), which is authorised and regulated in the United Kingdom by the FCA, is acting as corporate broker exclusively for Loungers and no one else in connection with the Acquisition and the matters set out in this announcement. Peel Hunt will not regard any other person as its client in relation to the Acquisition or any other matter or arrangement set out in this announcement and will not be responsible to anyone other than Loungers for providing the protections afforded to clients of Peel Hunt, nor for providing advice in relation to the Acquisition or any other matter or arrangement referred to in this announcement. Neither Peel Hunt nor any of its affiliates (nor their respective directors, officers, employees or agents) owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Peel Hunt in connection with the Acquisition, this announcement, any statement contained herein or otherwise. No representation or warranty, express or implied, is made by Peel Hunt as to the contents of this announcement.

Further information

This announcement is for information purposes only and is not intended to, and does not, constitute or form part of any offer or inducement to sell or an invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of an offer to buy any securities, any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise. The Acquisition will be made and implemented solely pursuant to the terms of the Scheme Document (or, if the Acquisition is implemented by way of an Offer, the Offer Document), which will contain the full terms and conditions of the Acquisition, including details of what action is required from Loungers Shareholders in respect of the Acquisition. Any decision in respect of, or other response to, the Acquisition should be made only on the basis of the information in the Scheme Document (or, if the Acquisition is implemented by way of an Offer, the Offer Document).

This announcement does not constitute a prospectus or prospectus equivalent document.

This announcement has been prepared for the purposes of complying with English law, the rules of the London Stock Exchange, the Listing Rules and the City Code on Takeovers and Mergers 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 jurisdictions outside the United Kingdom.

Bidco reserves the right to elect to implement the Acquisition by way of an Offer as an alternative to the Scheme (subject to the Panel's consent and the terms of the Co-operation Agreement). In such event, the Acquisition would be implemented on substantially the same terms, so far as applicable, as those which would apply to the Scheme, subject to appropriate amendments to reflect, among other things, the change in method of effecting the Acquisition (including, without limitation: (i) the inclusion of an acceptance condition set at 90 per cent. of the Loungers Shares to which such Offer relates (or such other percentage as Bidco may, subject to the rules of the Takeover Code and the terms of the Co-operation Agreement and with the consent of the Panel, decide); and (ii) those required by, or deemed appropriate by, Bidco under applicable law, including US securities laws). Further, Bidco has agreed under the Co-operation Agreement that, if sufficient acceptances of such Offer are received and/or sufficient Loungers Shares are otherwise acquired, it will apply the provisions of the Companies Act 2006 to acquire compulsorily any outstanding Loungers Shares to which such offer relates.

Overseas Shareholders

This announcement has been prepared in accordance with, and for the purpose of complying with, the laws of England and Wales, the Takeover Code, the Market Abuse Regulation, the AIM Rules and the Disclosure Guidance and Transparency Rules and 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 of jurisdictions outside England and Wales.

The release, publication or distribution of this announcement in or into certain jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves of, and observe, any applicable requirements of their jurisdictions.

The availability of the Acquisition to Loungers Shareholders who are not resident in and citizens of the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions. In particular, the ability of persons who are not resident in the United Kingdom to vote their Loungers Shares with respect to the Scheme at the Court Meeting, or to execute and deliver forms of proxy appointing another to vote at the Court Meeting on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person.

Unless otherwise determined by Bidco or required by the Takeover Code, and permitted by applicable law and regulation, participation in the Acquisition will not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Acquisition by any such use, means, instrumentality or from within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this announcement and any formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction and persons receiving this announcement and all such documents relating to the Acquisition (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in, into or from any Restricted Jurisdiction. Doing so may render invalid any related purported vote in respect of the Acquisition. If the Acquisition is implemented by way of an Offer (unless otherwise permitted by applicable law and regulation), the Offer may not be made directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Offer may not be capable of acceptance by any such use, means, instrumentality or facilities.

Further details in relation to Overseas Shareholders are contained in the Scheme Document.

Notice to US investors in Loungers

Loungers Shareholders in the United States should note that the Acquisition relates to the shares of an English company with a quotation on AIM and is proposed to be made by means of a scheme of arrangement provided for under, and which is governed by, the laws of England and Wales. If the Acquisition is carried out under the Scheme, it is expected that any Rollover Units issued pursuant to the Acquisition would be issued in reliance upon the exemption from the registration requirements under the US Securities Act provided by Section 3(a)(10) thereof and would not be registered under the US Securities Act. Securities issued pursuant to the Scheme will not be registered under any laws of any state, district or other jurisdiction of the United States, and may only be issued to persons resident in such state, district or other jurisdiction pursuant to an exemption from the registration requirements of such laws.

Neither proxy solicitation rules nor the tender offer rules under the US Exchange Act will apply to the Scheme. Moreover, the Scheme will be subject to the disclosure and procedural requirements and practices applicable in the United Kingdom to schemes of arrangement which differ from the disclosure requirements of US tender offer and proxy solicitation rules. If, in the future, Bidco exercises the right to implement the Acquisition by way of an Offer and determines to extend the offer into the United States, the Acquisition will be made in compliance with applicable United States laws and regulations, including any applicable exemptions under the US Exchange Act. Such an Offer would be made in the United States by Bidco and no one else. In accordance with normal United Kingdom practice and consistent with Rule 14e-5 under the US Exchange Act, Bidco, certain affiliated companies and the nominees or brokers (acting as agents) may make certain purchases of, or arrangements to purchase, shares in Loungers outside such Offer during the period in which such Offer would remain open for acceptance. If such purchases or arrangements to purchase were to be made they would be made outside the US either in the open market at prevailing prices or in private transactions at negotiated prices and would comply with applicable law, including, to the extent applicable, the US Exchange Act. Any information about such purchases will be disclosed as required in the United Kingdom, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website at www.londonstockexchange.com.

The financial information included in this announcement and the Scheme Document (or, if the Acquisition is implemented by way of an Offer, the Offer Document) has been or will have been prepared in accordance with generally accepted accounting principles of the United Kingdom and thus may not be comparable to the financial information of US companies or companies whose financial statements are prepared in accordance with IFRS in the United States.

The receipt of consideration by a US holder for the transfer of its Loungers Shares pursuant to the Acquisition may be a taxable transaction for US federal income tax purposes and under applicable US state and local, as well as non-US and other, tax laws. Each Loungers Shareholder is urged to consult their independent professional adviser immediately regarding the tax consequences of the Acquisition applicable to them, including under applicable US federal, state and local, as well as non-US and other, tax laws.

It may be difficult for US holders of Loungers Shares to enforce their rights and any claim arising out of the US federal laws or to enforce against them a judgment of a US court predicated upon the securities laws of the United Kingdom, since Bidco and Loungers are incorporated in a non-US jurisdiction, and some or all of their officers and directors may be residents of countries other than the United States. US holders of Loungers Shares may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.

Cautionary Note Regarding Forward-Looking Statements

This announcement (including information incorporated by reference in this announcement), oral statements made regarding the Acquisition, and other information published by Bidco and Loungers contain certain statements which are, or may be deemed to be, "forward-looking statements". Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Bidco and/or Loungers (as the case may be) about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements.

These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "hope", "aims", "continue", "will", "may", "should", "would", "could", or other words of similar meaning or derivatives thereof. These statements are based on assumptions and assessments made by Loungers and/or Bidco in light of their experience and their perception of historical trends, current conditions, future developments and other factors they believe appropriate. By their nature, forward-looking statements involve risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future and the factors described in the context of such forward-looking statements in this announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements, include but are not limited to: the ability to complete the Acquisition, the ability to obtain requisite regulatory and shareholder approvals and changes in the global, political, economic, business, competitive, market and regulatory forces, financial regulatory matters, future exchange and interest rates, changes in tax rates and future business combinations or dispositions.

Although it is believed that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct and you are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as at the date of this announcement. Neither Loungers nor Bidco assumes any obligation to update or correct the information contained in this announcement (whether as a result of new information, future events or otherwise), except as required by applicable law.

Dealing and Opening Position Disclosure Requirements

Under Rule 8.3(a) of the Takeover Code, any person who is interested in one per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified.

An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. (London time) on the 10^th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10^th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in one per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on [phone] if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication on a website

In accordance with Rule 26.1 of the Takeover Code, a copy of this announcement will be made available and other documents required to be published under Rule 26 of the Takeover Code will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Loungers' website at https://loungers.co.uk and Fortress' website at https://www.fortress.com/loungers-offer by no later than 12 noon (London time) on the first Business Day following the date of this announcement. For the avoidance of doubt, neither the contents of these websites nor any website accessible from hyperlinks is incorporated into or forms part of this announcement.

No profit forecasts, estimates or quantified benefits statements

No statement in this announcement is intended to constitute a profit forecast, profit estimate or quantified benefits statement for any period and no statement in this announcement should be interpreted to mean that the earnings or future earnings per share of or dividends or future dividends per share of Loungers for the current or future financial years will necessarily match or exceed the historical published earnings or earnings per share or dividends per share of Loungers.

Requesting hard copy documents

In accordance with Rule 30.3 of the Takeover Code, Loungers Shareholders, persons with information rights and participants in Loungers Share Plans may request a hard copy of this announcement by contacting Loungers' registrars, Link Group 10^th Floor, Central square, 29 Wellington Street, Leeds, LS1 4DL, between 9.00 a.m. to 5.30 p.m. (London time) Monday to Friday (except public holidays in England and Wales) by calling [phone] or by submitting a request in writing to Link Group. Calls are charged at the standard geographical rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Please note that Link Group cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes. For persons who receive a copy of this announcement in electronic form or via a website notification, a hard copy of this announcement will not be sent unless so requested. Such persons may also request that all future documents, announcements and information to be sent to them in relation to the Acquisition should be in hard copy form.

Electronic Communications

Please be aware that addresses, electronic addresses and certain other information provided by Loungers Shareholders, persons with information rights and other relevant persons for the receipt of communications from Loungers may be provided to Bidco during the Offer Period as required under Section 4 of Appendix 4 of the Takeover Code to comply with Rule 2.11 of the Takeover Code.

Rounding

Certain figures included in this announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

General

If the Acquisition is effected by way of an Offer, and such an Offer becomes or is declared unconditional in all respects and sufficient acceptances are received, Bidco has agreed under the Co-operation Agreement to exercise its rights to apply the provisions of Chapter 3 of Part 28 of the Companies Act 2006 so as to acquire compulsorily the remaining Loungers Shares in respect of which the Offer has not been accepted.

Investors should be aware that Bidco may purchase Loungers Shares otherwise than under any Offer or the Scheme, including pursuant to privately negotiated purchases.

If you are in any doubt about the contents of this announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor or independent financial adviser duly authorised under FSMA if you are resident in the United Kingdom or, if not, from another appropriate authorised independent financial adviser.

Appendix 1

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

All times shown are London times. All dates and times, other than those relating to the Court Meeting and the General Meeting, are based on Loungers' and Bidco's current expectations and are subject to change. If any of the dates and/or times in this expected timetable change, the revised dates and/or times will be notified to Loungers Shareholders by announcement through a Regulatory Information Service, with such announcement being made available on Loungers' website at https://loungers.co.uk/offer-documentation and on Fortress' website at https://www.fortress.com/loungers-offer.

Event	Expected time/date(1)
Latest time for lodging Forms of Proxy for: Court Meeting (BLUE form) General Meeting (WHITE form)	9.00 a.m. on 28 January 2025(2) 9.15 a.m. on 28 January 2025(2)
Scheme Voting Record Time	6.00 p.m. on 28 January 2025 (3)
Court Meeting	9.00 a.m. on 30 January 2025
General Meeting	9.15 a.m. on 30 January 2025 (4)
The following dates are indicative only and subject to change(1)
Court Sanction Hearing	7 February 2025
Election Return Time for the Scheme Shares Form of Election (GREEN form)	6.00 p.m. on the date of the Court Sanction Hearing
Last day of dealings in, and for registration of transfers of, Loungers Shares	10 February 2025
Scheme Record Time	6.00 p.m. on 10 February 2025
Disablement of CREST in respect of Loungers Shares	6.00 p.m. on 10 February 2025
Suspension of dealings in Loungers Shares	by 7.30 a.m. on 11 February 2025
Effective Date of the Scheme	11 February 2025
Cancellation of admission of Loungers Shares to trading on AIM	by 7.00 a.m. on 12 February 2025
Latest date for despatch of cheques and crediting of CREST for cash consideration due under the Scheme	14 days after the Effective Date
Latest date for issue of share certificates in respect of Rollover Units due, subject to the implementation of the Rollover Process, under the Alternative Offer	14 days after the Effective Date
Long Stop Date	11.59 p.m. on 28 August 2025(6)

Notes:

(1)        The times and dates are indicative only and will depend on, among other things, the dates upon which (i) the Court sanctions the Scheme, and (ii) a copy of the Court Order sanctioning the Scheme is delivered to the Registrar of Companies.

(2)        The BLUE Form of Proxy for the Court Meeting, if not received by the time stated above (or, if the Court Meeting is adjourned, 48 hours (excluding any day which is not a Business Day) before the adjourned Court Meeting), may be handed to a representative of Link Group, on behalf of the Chairman of the Court Meeting, or to the Chairman of the Court Meeting, before the start of that Meeting. However, in order to be valid, the WHITE Form of Proxy must be received no later than 9.15 a.m. (London time) on 28 January 2025 (or, if the General Meeting is adjourned, 48 hours (excluding any day which is not a Business Day) before the time fixed for the adjourned General Meeting). Please see "Action to be taken" on pages 12 to 18 and paragraph 22 of Part II (Explanatory Statement) of the Scheme Document.

(3)        If either the Court Meeting or the General Meeting is adjourned, the Scheme Voting Record Time for the relevant adjourned Meeting will be 6.00 p.m. on the date which is two Business Days before the date set for such adjourned Meeting.

(4)        To commence at 9.15 a.m. or as soon thereafter as the Court Meeting shall have concluded or is adjourned.

(5)        The Election Withdrawal Deadline will be the later of (i) the Election Return Time and (ii) such other date and time as Bidco and Loungers may agree.

(6)        The latest time and date by which the Scheme must become Effective, which may be extended by agreement between Loungers and Bidco with the Panel's consent and as the Court may approve (if such approval(s) are required).

Appendix 2

REVISED RULE 24.11 HSBC ESTIMATED VALUATION OF ROLLOVER UNITS

The Director
CF Exedra Bidco Limited

Duo, Level 6, 280 Bishopsgate

London

EC2M 4RB

15 January 2025

Recommended Acquisition of Loungers PLC ("Loungers")
by CF Exedra Bidco Limited ("Bidco") (a newly formed company indirectly owned by funds and accounts managed or advised by affiliates of Fortress Investment Group, LLC)

Revised Estimated Value of the Rollover Units

Dear Sir,

Pursuant to the requirements of Rule 24.11 of the Takeover Code, you have requested our opinion as to the revised estimated value of the unlisted and non-transferable (except in very limited circumstances) securities, which will be issued in the capital of CF Exedra Topco Limited (the ultimate owner of Bidco) ("Topco") (the "Rollover Units") for each Loungers Share (the "Revised Estimated Value") on the terms and subject to the conditions of the Increased and Final Alternative Offer (as defined below) set out in this announcement of which this letter forms part dated 15 January 2025.

Capitalised terms used in this letter will, unless otherwise stated, have the same meanings given to them in the Scheme Document.

1.         Background

Under the terms of an increased recommended offer by Bidco for the entire issued and to be issued share capital of Loungers (the "Increased and Final Offer"), if the Acquisition becomes Effective, for each Loungers Share held, Loungers Shareholders will be entitled to 325 pence per Scheme Share (the "Increased and Final Cash Offer"). As an alternative to the Increased and Final Cash Offer, eligible Loungers Shareholders will continue to be able to elect for the Alternative Offer in relation to some or all of their holding of Loungers Shares. As a result of the Increased and Final Offer, Eligible Scheme Shareholders who elect for the Alternative Offer will, subject to the implementation of the Rollover Process receive 3.67862913805519 Topco Ordinary Shares and 321.321370861945 Topco B Preference Shares (a Rollover Unit) in exchange for each Loungers Share (the "Increased and Final Alternative Offer"), subject to the terms and conditions set out in this announcement and the Scheme Document. The Topco Ordinary Shares and the Topco B Preference Shares will have the rights of the "Ordinary Shares" and "B Preference Shares" respectively set out in the Topco Articles (as amended from time to time).

Any fractional entitlements of a Loungers Shareholder to Topco Ordinary Shares and Topco B Preference Shares under the Increased and Final Alternative Offer will be rounded down to the nearest whole number of Topco Ordinary Shares and Topco B Preference Shares. Fractional entitlements to Topco Ordinary Shares and Topco B Preference Shares will not be allotted or issued to such Loungers Shareholder but will be disregarded.

Loungers Shareholders may elect to take up the Increased and Final Alternative Offer in respect of all or part of their holding of Loungers Shares.

The maximum number of Rollover Units available to eligible Loungers Shareholders under the Increased and Final Alternative Offer will be limited to such aggregate amount which, based on an exchange ratio of one Rollover Unit for each Loungers Share, represents 37.17 per cent. of the fully diluted share capital of Loungers at completion of the Acquisition (the "Alternative Offer Maximum").

If valid elections are received from eligible Loungers Shareholders in respect of a number of Loungers Shares that would, subject to the implementation of the Rollover Process, require the issue of Rollover Units exceeding the Alternative Offer Maximum, such elections will not be capable of being satisfied in full. In these circumstances the amount of Bidco Rollover Securities and Rollover Units to be issued to each eligible Loungers Shareholder who has validly elected for the Increased and Final Alternative Offer will be reduced on a pro rata basis (being pro rata to the number of Loungers Shares in respect of which valid elections have been received), and the balance of the consideration due to each such Loungers Shareholder will be paid in cash in accordance with the terms of the Increased and Final Cash Offer. For the avoidance of doubt, the Revised Exchange Ratio would continue to apply on the same basis.

The availability of the Increased and Final Alternative Offer is conditional upon valid elections being made that would, subject to the implementation of the Rollover Process, require the issue of such number of Rollover Units as, based on an exchange ratio of one Rollover Unit for each Loungers Share, represent at least 25 per cent. of the fully diluted share capital of Loungers at completion of the Acquisition (the "Minimum Alternative Offer Threshold"), failing which it will lapse. In these circumstances, no Bidco Rollover Securities will be issued and the consideration payable in respect of each Loungers Share will be settled entirely in cash in accordance with the terms of the Increased and Final Cash Offer. However, given the irrevocable undertakings received from certain Loungers Directors, Lion and certain other Loungers Shareholders include undertakings to elect for the Increased and Final Alternative Offer in respect of, in aggregate, a total 38,990,788 Loungers Shares owned or expected to be owned by them at completion of the Acquisition, representing approximately 37.5 per cent. of Loungers' existing issued ordinary share capital on 14 January 2025, being the latest practicable date prior to the date of this announcement, and representing approximately 35.8 per cent. of the fully diluted share capital of Loungers at completion of the Acquisition, the Increased and Final Alternative Offer is not anticipated to lapse for this reason.

If the Scheme becomes Effective, Loungers Shareholders who do not validly elect to receive their consideration by means of the Increased and Final Alternative Offer will automatically receive the full amount of the Increased and Final Cash Offer for their entire holding of Loungers Shares.

Unless otherwise determined by Bidco and permitted by applicable law and regulation, the Increased and Final Alternative Offer will not be made, and neither the Bidco Rollover Securities, Midco Rollover Securities nor the Rollover Units will be offered, sold or delivered, directly or indirectly, in or into any Restricted Jurisdiction and individual acceptances of the Increased and Final Alternative Offer will be valid only if all regulatory approvals (if any) required by a Loungers Shareholder to acquire the Bidco Rollover Securities and, subject to the implementation of the Rollover Process, the Rollover Units, have been obtained.

The Rollover Units will comprise securities in a private and unquoted company, they will not be listed or admitted to trading on any exchange or market for the trading of securities, and they will therefore be illiquid. The Rollover Units do not have a public valuation.

The Rollover Units are described in paragraphs 4 and 5 of Part II (Explanatory Statement) and Part V (Details of the Rollover Units) of the Scheme Document.

2.         Purpose

This Revised Estimated Value has been provided to the director of Bidco (the "Bidco Director") solely for the purposes of complying with the requirements of Rule 24.11 of the Takeover Code in connection with the Acquisition and shall not be used or relied upon for any other purpose whatsoever. It is not addressed to, and may not be relied upon by, any third party for any purpose whatsoever and HSBC Bank plc ("HSBC") expressly disclaims any duty, liability or responsibility (whether direct or indirect, whether in contract, tort, under statute or otherwise) to any third party with respect to the contents of this letter.

Our view as expressed in this letter is limited to an estimate of the net present value of the Rollover Units being offered to eligible Loungers Shareholders under the Increased and Final Alternative Offer as at 15 January 2025 and is given and valid as at such date only. The Revised Estimated Value assumes both a willing buyer and seller of equal bargaining power, neither being under any compulsion to buy or sell, dealing on an arm's length basis and where each party has knowledge of all relevant information.

The Revised Estimated Value does not represent the value that a holder of Rollover Units may realise on any future sale of such Rollover Units, it being noted that such value realised on any future sale of Rollover Units may be higher or lower than the figure in this letter. The Revised Estimated Value may also differ substantially from estimates available from other sources. HSBC assumes no obligation to update or revise the Revised Estimated Value at any date in the future based upon circumstances or events occurring after the date hereof, unless it is otherwise required to by the Takeover Code.

3.         Information

In arriving at the Revised Estimated Value, we have reviewed and considered or otherwise taken into account, among other things:

·        certain publicly available financial statements as well as certain other publicly available business and financial information relating to Loungers;

·        certain information (including information derived from due diligence materials made available to Bidco by Loungers) provided by Bidco relating to the business, operations, financial condition and prospects of Loungers;

·        the financial projections of Loungers (the "Financial Projections"), including certain financial analyses and forecasts, prepared by or at the direction of representatives of Bidco and the Bidco Director relating to the business, operations, financial condition and prospects of the Topco Group;

·        the commercial assessments of representatives of Bidco and the Bidco Director and investment teams of the shareholders of Bidco with respect to the business, operations, financial condition and prospects of the Topco Group;

·        the rights and restrictions attached to the Rollover Units as summarised in the Scheme Document, and contained in the Revised Topco Shareholders' Agreement and the Topco Articles (as applicable), although our review should in no way be construed as constituting legal advice;

·        the non property net debt position of Loungers (excluding property leases) as at 6 October 2024 of £12.2 million comprising a term loan of £20 million and cash and cash equivalents of £7.8 million;

·        the total existing issued ordinary share capital on 14 January 2025 (being the latest practicable date prior to the date of this announcement) of 103,960,391 Loungers Shares;

·        the terms of the Acquisition and its proposed financing; and

·        such other financial analyses and such other information as we deemed appropriate for the purposes of this letter.

In addition, we have met with certain members of the investment advisory teams of Fortress to discuss the above, as well as the Acquisition and other matters we believed to be relevant to our enquiry, and we have considered and relied upon their commercial assessments.

In performing our analyses, we have relied upon and assumed the accuracy and completeness of all information that was publicly available or which was furnished to or discussed with us by or on behalf of Bidco or Fortress or otherwise reviewed by or for us, and we have not independently verified (nor have we assumed responsibility or liability for independently verifying) any such information or its accuracy or completeness. We have not conducted any valuation or appraisal of any assets or liabilities of the Topco Group, nor have we been provided with any appraisal of any assets or liabilities of the Topco Group, nor have we evaluated the solvency of the Topco Group under any applicable laws relating to bankruptcy, insolvency or similar matters. In relying on financial analyses, projections and forecasts provided to us or derived therefrom, we have assumed that they have been reasonably prepared based on assumptions reflecting the best currently available estimates and judgements by the Bidco Director as to the expected future results of operations and financial condition of the Topco Group to which such analyses, projections or forecasts relate. We express no view as to such analyses, projections or forecasts or the assumptions on which they were based.

We have assumed for the purposes of this letter that Rollover Units are already in issue, that the Acquisition has become effective in accordance with its terms (with no modification or delay), that the conditions to the issue and allotment of the Rollover Units and the Increased and Final Alternative Offer have been satisfied or (if applicable) waived (without adverse effect) and that Bidco has acquired the entire issued and (if applicable) to be issued ordinary share capital of Loungers.

If any of the information or assumptions relied upon prove to be incorrect, the actual value of a Rollover Units may be different from, including potentially considerably less than or more than, the Revised Estimated Value. Our view as expressed in this letter is necessarily based on economic, market and other conditions, the prospects of the Topco Group and other factors which generally influence the valuation of companies and securities, in each case as they exist at the date hereof and on the information made available to us as of the date of this letter. It should be understood that subsequent developments and/or changes to prevailing financial, economic and market conditions, the financial condition and prospects of the Topco Group (and other factors which generally influence the valuation of companies and securities) may affect the views provided in this letter and that we assume no obligation to update, revise or reaffirm the views expressed in this letter, unless otherwise required to by the Takeover Code.

4.       Methodology

In arriving at the Revised Estimated Value, HSBC has, among other things:

·        undertaken a discounted cash flow analysis based on the Financial Projections;

·        referenced the historical trading prices and the implied trading valuations of Loungers Shares on the London Stock Exchange;

·        considered a range of other widely accepted valuation methods we deemed relevant including, inter alia, trading multiples of comparable publicly traded companies and transaction multiples of comparable companies;

·        taken into account the proposed financing structure for the Topco and certain estimated transaction expenses expected to be incurred in relation to the Acquisition; and

·        considered the lack of a liquid market for the Rollover Units and transfer restrictions attached to the Rollover Units as summarised in the Scheme Document, and contained in the Revised Topco Shareholders' Agreement and the Topco Articles (as applicable).

The Revised Estimated Value is based on theoretical valuation techniques and is sensitive to changes in assumptions about the future financial performance of the Topco Group and the ongoing transformation of Loungers. As a result, there can be no assurance that the actual value of a Rollover Security will not be higher or lower than the Revised Estimated Value.

The taxation position of individual Loungers Shareholders will vary and so we have not taken account of the effect of any taxation exemptions, allowances or reliefs which may be available for the purposes of income, capital gains, inheritance or any other applicable tax, duty or levy, notwithstanding that these may be of significance in the case of certain shareholders.

No account has been taken of any potential transaction costs that a holder of Rollover Units may incur, including any associated dealing costs, or any potential costs that may be associated with a sale of Topco (or any other member of the Topco Group) to a third party or a liquidation of Topco (or any other member of the Topco Group) and which might be expected to reduce any return to a holder of Rollover Units upon the occurrence of such an event.

We also note that the valuation of non-publicly traded securities is inherently imprecise and is subject to certain contingencies, all of which are difficult to predict and are beyond our control. Reasons for this inherent uncertainty, include but are not limited to, the following factors relating to liquidity and rights attached to the Rollover Units:

·        The Rollover Units are unquoted and there is no current expectation that they will be listed or admitted to trading on any exchange or market for the trading of securities, and will therefore be illiquid;

·        The Topco B Preference Shares and Topco Ordinary Shares will be highly levered and economically subordinated share capital ranking behind the Topco A Preference Shares (which shall be held by the Fortress Funds) and the secured and unsecured liabilities of the Topco Group;

·        The value and performance of the Rollover Units will be uncertain and there can be no assurance that any such securities will be capable of being sold in the future or that they will be capable of being sold at the value to be estimated by HSBC in this letter;

·        Certain rights and protections attaching to the Rollover Units will depend on the number of Rollover Units held by each Loungers Shareholder. Loungers Shareholders will have no certainty as to the number of Rollover Units they would receive;

·        The Topco B Preference Shares will have no voting rights and the Topco Ordinary Shares in Topco will have one vote per share;

·        Certain customary matters shall be subject to the prior approval of: (i) holders of a majority of the Topco A Preference Shares; (ii) holders of a majority of the Topco B Preference Shares; (iii) holders of at least 20 per cent. of the Topco Ordinary Shares; and (iv) holders of a majority of the Topco Ordinary Shares held by the Topco Minority Shareholders, respectively;

·        Payments in respect of Rollover Units will not be guaranteed or secured and, for so long as the Topco Group has any secured debt or Topco Preference Shares outstanding, it is not anticipated that Topco will declare or pay any dividends or make any distributions on any of the Topco Ordinary Shares;

·        No Topco Shares will be transferable during an initial five-year lock-up period from the Effective Date without the prior written consent of a majority of the Topco Ordinary Shareholders, except in very limited circumstances. Following the expiry of the Lock-up Period, any transfer will be subject to a right of first refusal on the part of all other holders of Topco Ordinary Shares, unless such right of first refusal has been waived by holders of a majority of the Topco Ordinary Shares;

·        Holders of Rollover Units may be required to sell their Rollover Units pursuant to the exercise of "drag-along" provisions in the Revised Topco Shareholders' Agreement by other Topco Shareholders. Although holders of Rollover Units will be entitled to no less favourable terms than those applicable to other Topco Shareholders, any transfer involving the application of "drag-along" rights may be at a value that is less than the value of the Increased and Final Cash Offer;

·        Where other Topco Shareholders elect to sell Topco Ordinary Shares, "tag-along" rights may apply entitling Topco Shareholders to participate in the relevant transfer. However, such "tag-along" rights are subject to a number of exclusions, including customary permitted transfers to affiliates or in relation to transfers in connection with an IPO, a reorganisation or a refinancing. Further, holders of Rollover Units who exercise the "tag-along" rights will be required to agree to pay a proportionate share of related costs and bear related liabilities and to agree to the same terms of transfer as the transferring Topco Shareholders, including in respect of covenants, indemnities and commitments in connection with such process.

·        The Rollover Units will be unlisted securities in a private company and so Loungers Shareholders who, subject to the implementation of the Rollover Process and the other terms of this announcement and the Scheme Document, receive Rollover Units will not be afforded protections commensurate with those from which they currently benefit as a Loungers Shareholder. Except for limited information to be provided to persons who hold at least 5 per cent. of the Topco Ordinary Shares, neither the Topco Articles nor the Revised Topco Shareholders' Agreement will provide holders of Rollover Units with information rights, and the default information rights available to such holders of Rollover Units under Jersey law are very limited. A holder of at least 15 per cent. of the Topco Ordinary Shares shall have customary information rights;

·        The holders of Rollover Units will not enjoy any minority protections or other rights save for those rights provided for in the Revised Topco Shareholders' Agreement and the Topco Articles and those rights prescribed by applicable law;

·        Topco is not a company to which the Takeover Code applies and the protections of the Takeover Code will no longer be available to Loungers Shareholders electing for the Increased and Final Alternative Offer; and

·        The value of Rollover Units will be subject to the same trading risks as are faced by Loungers currently, including risk in the trading performance of Loungers.

In performing this analysis, we have made numerous assumptions with respect to industry performance and general business, economic and market conditions, many of which are beyond the control of Bidco and Loungers. Consequently, the view expressed in this letter is not necessarily indicative of the amount which might be realised upon a sale of Rollover Units.

5.         The Revised Estimated Value

On the basis of and subject to the foregoing, it is our view as at the date of this letter that the Revised Estimated Value of each Rollover Unit is a range of 240 pence to 285 pence.

The Revised Estimated Value only incorporates an assumed level of discount for trading illiquidity and reduced rights and protections of the Rollover Units. The Revised Estimated Value does not incorporate a discount for other structural features and risk factors pertaining to the Rollover Units; each eligible Loungers Shareholder should individually take these factors into account.

Eligible Loungers Shareholders who may be considering either the cash consideration of 325 pence per Loungers Share or a continuing investment in the future of Topco and Loungers through the Rollover Units should read carefully all the information relating to the Increased and Final Alternative Offer and the Rollover Units contained in this announcement and the Scheme Document, including, without limitation, ‎Part V (Details of the Rollover Units) of the Scheme Document. Any decision to elect for the Increased and Final Alternative Offer and the Rollover Units should be based on independent financial, tax and legal advice, and a full consideration of this announcement, the Scheme Document and the other documents in relation to the Acquisition.

6.         General

HSBC is acting as financial adviser to Bidco and no one else solely for the purposes of providing this letter in accordance with Rule 24.11 of the Takeover Code in connection with the Acquisition and HSBC will not be responsible to anyone other than Fortress and Bidco for providing the protections afforded to clients of HSBC, nor for providing advice in connection with the Acquisition or any matter referred to in this announcement, the Scheme Document or this letter.

HSBC will receive fees from Bidco in respect of its services in connection with the provision of this letter. In addition, Bidco has agreed to indemnify HSBC for certain liabilities arising out of its engagement. During the five years preceding the date of this letter, we and our affiliates have had commercial or investment banking relationships with portfolio companies managed or advised by affiliates of Fortress for which we and such of our affiliates have received customary compensation. In the ordinary course of our businesses, we and our affiliates may actively trade the equity securities of Loungers for our own account or for the accounts of customers and, accordingly, we may at any time hold long or short positions in such securities.

HSBC has not provided, nor will it provide, legal, tax, regulatory, accounting or other specialist advice, and nothing herein should be taken to reflect any such advice. For the avoidance of doubt, HSBC expresses no opinion (whether as to the fairness or otherwise) of the financial terms of the Acquisition, the Increased and Final Cash Offer or the Increased and Final Alternative Offer. Any decision to elect for the Increased and Final Alternative Offer should be based on independent financial, tax and legal advice and full consideration of this announcement, the Scheme Document and the other documents in relation to the Acquisition, including the Revised Topco Shareholders' Agreement and the Topco Articles.

Eligible Loungers Shareholders should ascertain whether acquiring or holding the Rollover Units is affected by the laws of the relevant jurisdiction in which they reside and consider whether the Rollover Units are a suitable investment in light of their own personal circumstances and are, therefore, strongly recommended to seek their own independent financial, tax and legal advice before deciding whether to elect for the Increased and Final Alternative Offer. In particular, Loungers Shareholders should note that the Rollover Units are not transferable except pursuant to limited exemptions, including where holders of a majority of the Topco Ordinary Shares waive the lock-up requirement, will not be listed and that no market exists or is expected to exist in them.

This letter is provided solely for the benefit and use of the Bidco Director for the purpose of Rule 24.11 of the Takeover Code in connection with the Acquisition and for no other purpose. This letter is not addressed to, or provided on behalf of, nor shall it confer any rights or remedies upon, any shareholder, creditor or any other person other than the Bidco Director for the aforesaid purpose. Without prejudice to the generality of the foregoing, this letter does not constitute a recommendation or opinion to, or for the benefit of, any Scheme Shareholder as to whether such Scheme Shareholder should vote in favour of the Scheme at the Court Meeting or the Resolution to be proposed at the General Meeting in order to give effect to the Acquisition or whether any such Scheme Shareholder should accept the Increased and Final Cash Offer or make any election pursuant to the Increased and Final Alternative Offer. Other than as required pursuant to the Takeover Code or as the Panel or the Court may otherwise require, this letter may not be disclosed, referred to, or communicated (in whole or in part) to any third party for any purpose whatsoever except with our prior written approval in each case. This letter may be reproduced in full in this announcement to be sent to Loungers Shareholders and others on the basis that no duties or responsibilities are accepted by HSBC to any person, individually or collectively, but this letter may not otherwise be published or reproduced publicly in any manner without our prior written approval.

Yours faithfully,

HSBC Bank plc

Appendix 3

SOURCES AND BASES OF INFORMATION

In this announcement:

1.   Unless otherwise stated, historical financial information relating to the Loungers Group has been extracted or derived (without any adjustment) from the audited 2024 Annual Report.

2.   As at the close of business on 14 January 2025 (being the latest practicable date prior to the date of this announcement), Loungers had in issue 103,960,391 Loungers Shares. The ISIN for the Loungers Shares is GB00BH4JR002.

3.   The fully diluted share capital of Loungers (being 109,052,683 Loungers Shares) is calculated on the basis of:

·      the number of issued Loungers Shares referred to in paragraph 2 of this Appendix 3; and

·      5,092,292 Loungers Shares, being the number of Loungers Shares that is expected to be issued on or after the Latest Practicable Date to satisfy the exercise of options or vesting of awards under the Loungers Share Plans, as at the Latest Practicable Date assuming the Scheme becomes Effective in February 2025 and taking into account any leavers since the Announcement Date reducing the number of outstanding options and awards.

4.   The value attributable to the entire issued and to be issued ordinary share capital of Loungers is calculated on the basis of:

·      the cash consideration of 325 pence per Loungers Share; and

·      the fully diluted number of Loungers Shares as referred to in paragraph 3 of this Appendix 3.

5.   The enterprise value of Loungers of £366.6 million is derived from the entire issued and to be issued ordinary share capital of Loungers valued at £354.4 million plus the non-property net debt of Loungers of £12.2 million as at the end of H125.

6.   The adjusted EBITDA multiples of 8.4x and 9.4x implied by the Acquisition are calculated based on a fully diluted enterprise value of £366.6 million per paragraph 5 of this Appendix 3 and, respectively, the FY24 adjusted EBITDA (before site pre-opening costs) of £43.5 million and the FY24 adjusted EBITDA (after site pre-opening costs) of £38.8 million.

7.   Unless otherwise stated, all prices and closing prices for Loungers Shares are closing middle market quotations derived from the London Stock Exchange Daily Official List (SEDOL).

8.   The premium calculations to the price per Loungers Share have been calculated by reference to a price of 238.0 pence per Loungers Share, being the closing price on 27 November 2024, the last Business Day prior to the Announcement Date.

9.   Volume-weighted average prices per Loungers Shares have been derived from Bloomberg and have been rounded to the nearest single decimal place.

 

END