Acquisition of homecare provider ILS Group

RNS Number : 7378C

Mears Group PLC

19 April 2013

 



19 April 2013

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ANY JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION IS UNLAWFUL. THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES IN THE UNITED STATES, CANADA, SOUTH AFRICA, AUSTRALIA, JAPAN OR ANY JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION IS UNLAWFUL.

Mears Group PLC

("Mears" or the "Company")

Acquisition of ILS Group Limited ("ILS") and Placing of New Ordinary Shares

Highlights

·      Acquisition of ILS, a leading homecare company operating solely in Scotland, for a total consideration of £22.5 million on a debt-free, cash-free basis

·      Over 40 per cent. of ILS's work is in higher acuity services

·      Provides high quality community based care services to approximately 3,400 service users

·     ILS provides Mears with the necessary platform to roll out higher acuity services across the UK

·      Placing of 6,368,069 million new Ordinary Shares to raise £19.7 million before expenses to fund the majority of the acquisition; balance of the consideration will be provided from Mears' existing debt facility

·      For the 12 months ended 31 January 2013 ILS generated unaudited EBITDA of £2.89 million (before corporate costs) on revenues of £24.4 million

·      The Acquisition is expected to be earnings per share neutral in the current year and earnings per share enhancing in the first full financial year post synergies

Investec Bank plc ("Investec") is acting as financial adviser to Mears in respect of the Acquisition and Investec and Canaccord Genuity Limited ("Canaccord Genuity") are acting as joint bookrunners, joint underwriters and joint agents in the Placing.

David Miles, Chief Executive Officer of Mears commented:

"Fundamentally, the acquisition will provide Mears with the platform to provide higher acuity home services across the UK, complementing Mears' existing care capabilities and developing the capability to offer longer term continuing healthcare in the home, an area in which Mears does not currently operate. We look forward to welcoming the ILS employees into the Group as we continue to build the range of broader health and social care services for our clients. The acquisition provides Mears with an excellent geographic fit with Mears' existing care business in Scotland with limited branch overlap and will increase our presence in Scotland."

Enquiries:
Mears Group PLC
David Miles, Chief Executive Andrew Smith, Finance Director Bob Holt, Chairman	Tel: [phone] Tel: [phone] Tel: [phone]
Financial adviser and joint bookrunner Investec Bank plc Keith Anderson/Daniel Adams	Tel: [phone]
Joint bookrunner Canaccord Genuity Limited Piers Coombs/Lucy Tilley	Tel: [phone]
Gable Communications              John Bick/Justine James           [e-mail]	Tel: [phone] Tel: [phone]

Persons who have chosen to participate in the Placing (as defined below), by making an oral or written offer to acquire new ordinary shares of Mears ("Placing Shares"), will be deemed to have read and understood this announcement (including the Appendix) in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements and undertakings contained in the Appendix.

This announcement, including the Appendix (together the "Announcement"), and the information contained in it is restricted and is not for release, publication or distribution, in whole or in part, directly or indirectly, in or into the United States, Australia, Canada, Japan or South Africa or any other jurisdiction in which such publication or distribution would be unlawful. This Announcement is for information purposes only and does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire shares in the capital of the Company in the United States, Australia, Canada, Japan or South Africa or any other jurisdiction in which such an offer or solicitation would be unlawful. Persons into whose possession this Announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdictions. No prospectus is or shall be produced in connection with the Placing.

This Announcement should not be regarded as an opinion or recommendation concerning the purchase or sale of securities of the Company.

The shares in the Company referred to in this Announcement have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") and may not be offered, sold or transferred, directly or indirectly, within the United States. There will be no public offer of shares in the Company in the United Kingdom, the United States or elsewhere.

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

Investec is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, and is acting exclusively for the Company and for no-one else in connection with the Placing, and other matters referred to in this Announcement. Investec will not be responsible to anyone other than the Company for providing the protections afforded to its clients nor for providing advice to any other person in relation to the Placing or any other matter referred to herein.

Canaccord Genuity is authorised and regulated in the United Kingdom by the Financial Conduct Authority, and is acting exclusively for the Company and for no-one else in connection with the Placing, and other matters referred to in this Announcement. Canaccord Genuity will not be responsible to anyone other than the Company for providing the protections afforded to its clients nor for providing advice to any other person in relation to the Placing or any other matter referred to herein.

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

Certain statements in this Announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The information contained in this Announcement is subject to change without notice and neither the Company nor the Joint Bookrunners assume any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein.

No statement in this Announcement is intended to be a profit forecast and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

The price of shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares.

The Placing Shares to be issued or sold pursuant to the Placing will not be admitted to trading on any stock exchange other than the London Stock Exchange plc and the ISDX. Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.

Introduction

Mears announces that it has today entered into a conditional agreement with the shareholders of ILS Group Limited ("ILS") to acquire the entire issued share capital of ILS, a leading homecare company operating solely in Scotland, for a total consideration of £22.5 million on a debt-free, cash-free basis (the "Acquisition").

In connection with the Acquisition, the Company will place 6,368,069 new Ordinary Shares in the Company (representing approximately 6.9 per cent. of the Company's existing issued share capital) through a cash placing of 3,737,768 new Ordinary Shares and a vendor placing of 2,630,301 new Ordinary Shares at a price of 310 pence per Placing Share (the "Placing").

Information on ILS

ILS provides high quality community based care services to approximately 3,400 service users in Scotland and has contracts with 20 local authorities, employing over 1,600 staff. ILS operates from 10 branches/offices. The business has grown through a combination of organic growth and by way of acquisition and currently over 40 per cent. of ILS's work is in higher acuity services, including learning disabilities, autism, mental health and more complex conditions. Over half of the hours ILS delivers are to people under 75 years of age.

As part of its provision of higher acuity services, ILS operates the Nurseplus brand which focuses on the provision of more complex at home care services, typically contracted on an individual by individual basis, and involving more nurse-led care. These services tend to be at a higher price and higher margin than standard homecare. In order to provide these services, ILS has the necessary clinical governance procedures including a clinical governance board chaired by an external GP. ILS generated 77 per cent. revenue growth from Nurseplus in 2012.

The financial performance for the three years ended 30 September 2012 and for the 12 months ended 31 January 2013 are set out below. The financial information has been extracted, without material adjustment, from ILS's audited accounts for the three years ended 30 September 2012 and ILS's unaudited management accounts for the 12 months ended 31 January 2013.

	Year ended
	30 September 2010	30 September 2011	30 September 2012	12 months ended 31 January 2013
Turnover	17,199	20,060	23,933	24,393
Gross profit	5,381	5,830	7,008	7,264
Branch overheads	(2,452)	(2,520)	(2,755)	(2,860)
Branch contribution	2,929	3,310	4,253	4,404
Central costs	(1,538)	(2,042)	(1,608)	(1,514)
EBITDA (pre corporate costs)	1,391	1,268	2,645	2,891
Depreciation	(232)	(235)	(231)	(250)
Operating profit (pre corporate costs)	1,159	1,033	2,414	2,641
Corporate costs	(566)	(464)	(617)	(621)
Exceptional items	-	(141)	(65)	(75)

ILS has grown its revenues through a combination of organic growth and acquisition. Improving branch contribution from the development of larger "superbranches" and leveraging volumes across the central cost base has driven an improvement in EBITDA margins. The 2011 margin was impacted by poor cost control, particularly in respect of central overhead, which was reversed in 2012. In November 2012, ILS acquired Ardmore, whose profitability is not yet fully reflected in the 12 months to 31 January 2013. In addition, ILS has recently exited its contract based in the Highlands of Scotland, which was producing a low margin, with the last revenues generated in March 2013.

The gross assets of ILS as at 30 September 2012 were £12.6 million excluding cash, of which £9.0 million relates to intangible assets.

Opportunity and Rationale

Mears' strategic objective within its Care business has been to increase the level of work that it undertakes in higher acuity services. The positive macro drivers for higher acuity services, such as improved medical technology to extend people's lives, more robust funding and policymakers' aim to target more care at home make this an attractive area to operate in.  The consideration of £22.5 million represents a multiple of 7.8 times ILS's EBITDA (before corporate costs) for the 12 months to 31 January 2013 (unaudited) and a multiple of 6.8 times ILS's EBITDA (before corporate costs) for the 12 months to 31 January 2013 (unaudited) post synergies.

ILS, with a large proportion of its work in higher acuity services, is an attractive addition to Mears' existing care proposition, improving Mears' offering in more complex home care and developing the capability to offer longer term continuing healthcare in the home, an area in which Mears does not currently operate. While ILS currently operates solely in Scotland, it does provide the regulatory licence and reference sites that would allow Mears to roll out these services across the UK, where its own existing care business operates, and the Acquisition therefore enhances Mears' ability to offer an integrated health and social care service. A combination of this and ILS's home care business improves the potential for organic growth in Mears' care business.

ILS provides an excellent geographic fit with Mears' existing care business in Scotland with limited branch overlap and will increase Mears' presence in Scotland, a relatively more attractive market from a policy perspective owing to a much lower level of outsourcing of these services from local authorities than in England, and a policy of free personal and nursing care for all individuals over 65, regardless of means. In addition, ILS comes with a strong operational senior management team that can strengthen Mears' existing local management.

Finally, Mears will be able to realise synergy benefits from the acquisition. The corporate costs within ILS, which principally relate to executive management and amounted to £0.6 million in the year ended 30 September 2012, will be saved as part of the transaction. In addition, it is expected  approximately a further £0.4 million of branch and central administration cost savings can be achieved by the end of the current Mears financial year.  

Principal terms of the Acquisition

The total consideration for the Acquisition is £22.5 million, on a debt-free-cash-free basis which will be satisfied on completion. Completion of the Acquisition is anticipated on 24 April 2013 and assumes a normal level of working capital. The Acquisition is to be funded by way of a placing of 6,368,069 new Ordinary Shares at 310 pence per share to raise approximately £19.7 million (before expenses) with the balance of the consideration to be funded from Mears' existing debt facility. The Acquisition is conditional on, inter alia, the admission of the Placing Shares to the Official List of the Financial Conduct Authority with a premium listing, to trading on the London Stock Exchange's main market for listed securities and to trading on the ISDX Main Board which is expected to take place on 24 April 2013 ("Admission").

As part of the acquisition, Mears has agreed to pay the shareholders of ILS initial additional consideration of £150,000 in respect of another homecare business operating in Scotland, which ILS is in advanced talks to acquire. Mears will have the right, but not the obligation, to acquire this business once it has concluded its own due diligence. If this additional acquisition were to complete, the expected total consideration (including the £150,000 payment) is approximately £1.55 million, out of which the shareholders of ILS would, upon completion of this further acquisition, be a paid a sum of £355,000.

Details of the Placing

The Board of Mears announces today a placing of 6,368,069 new Ordinary Shares in Mears through a cash placing of 3,737,768 new Ordinary Shares and a vendor placing of 2,630,301 new Ordinary Shares at 310 pence per share to raise a total of approximately £19.7 million before expenses (the "Placing").

The shares being issued pursuant to the Placing represent approximately 6.9 per cent. of the existing share capital of Mears. The Placing Price of 310 pence per share represents a 2.5 per cent. discount to the closing mid-market price of a Mears ordinary share on 18 April 2013.

The proceeds of the Placing will be used to satisfy the majority portion of the total consideration for the acquisition of ILS. The balance of the consideration of £2.8 million is being funded from Mears' existing bank facility.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of one penny each in the Company ("Ordinary Shares"), including the right to receive all dividends and other distributions declared, made or paid in respect of such shares after the date of issue of the Placing Shares, including the recommended final dividend of 5.7 pence per share due to be paid, subject to shareholder approval, on 2 July 2013.

In connection with the Placing, Mears has entered into an agreement today with Investec Bank plc ("Investec") and Canaccord Genuity Limited ("Canaccord Genuity" and, together with Investec, the "Joint Bookrunners") (the "Placing Agreement"), and the Placing Agreement is conditional upon, amongst other things, Admission. In accordance with the terms of the Placing Agreement, each Joint Bookrunner has, severally, agreed to procure Placees for the Placing Shares and to the extent that such Joint Bookrunner is unable to procure Placees, it will subscribe as principal for its proportionate share of the Placing Shares for which Placees have not been procured.

The Placing is being carried out pursuant to the authorities granted by shareholders at the Company's annual general meeting on 6 June 2012, so does not require any further shareholder approval. Application will be made for the Placing Shares to be admitted to the premium segment of the Official List of the Financial Conduct Authority, to trading on the Main Market of the London Stock Exchange and to trading on the ISDX Main Board. Settlement of the Placing Shares together with Admission is expected to become effective on 24 April 2013.

Following Admission, Mears' issued share capital shall consist of 98,393,654 Ordinary Shares, each with voting rights. No ordinary shares are held in treasury. Shareholders may use the above figure as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, Mears under the FSA's Disclosure and Transparency Rules.

The Appendix to this announcement (which forms part of this announcement) sets out the terms and conditions of the Placing. Persons who have chosen to participate in the Placing, by making an oral or written offer to acquire Placing Shares, will be deemed to have read and understood this Announcement in its entirety (including the Appendix) and to be making such offer on the terms and subject to the conditions herein, and to be providing the representations, warranties and acknowledgements contained in the Appendix.

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

APPENDIX

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ANY JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT IN THIS APPENDIX ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED, ("QUALIFIED INVESTORS") BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC, AS AMENDED FROM TIME TO TIME AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE "PROSPECTUS DIRECTIVE"); AND (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE  19(1)  OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR THE SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF A PURCHASE OF PLACING SHARES  THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE INTO THE UNITED STATES.  THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM, OR AS PART OF A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE US SECURITIES ACT, NO PUBLIC OFFERING OF SECURITIES IS BEING MADE IN THE UNITED STATES, NO MONEY, SECURITIES OR OTHER CONSOLIDATION FROM ANY PERSON INSIDE THE UNITED STATES IS BEING SOLICITED AND, IF SENT IN RESPONSE TO THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT, WILL NOT BE ACCEPTED.

Persons who are invited to and have chosen  to participate in the Placing, by making an oral or written offer to acquire Placing Shares, will be deemed to have read and understood this Announcement in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements and undertakings contained in this Appendix. Unless the context otherwise requires, terms defined in the Announcement shall have the same meaning in this Appendix.

In this Appendix, unless the context otherwise requires, "Placee" means a Relevant Person (including individuals, funds or others) by whom or on whose behalf a commitment to take up Placing Shares has been given. In particular each such Placee represents, warrants and acknowledges that:

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

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

     a.     unless specifically agreed with the Joint Bookrunners in writing, it is a Qualified Investor;

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

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

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

3.  (a)(i) it is not in the United States and (ii) it is not acting for the account or benefit of a person in the United States, unless in the case of this clause (ii), it is acting with investment discretion for such person or, if such person is a corporation or partnership, the person agreeing to purchase the Placing Shares is an employee of such person authorised to make such purchase; or (b) it is a dealer or other professional fiduciary in the United States acting on a discretionary basis for a non-US person (other than an estate or trust) in reliance on Regulation S; or (c) it is otherwise acquiring the Placing Shares in an 'offshore transaction' meeting the requirements of Regulation S under the Securities Act. 

Save as expressly set out, this Announcement does not constitute an offer or invitation to underwrite, subscribe for or otherwise acquire or dispose of any securities or investment advice in any jurisdiction, including without limitation, the United Kingdom, the United States, Australia, Canada, Japan or South Africa or in any jurisdiction in which such offer or invitation would be unlawful. Past performance is no guide to future performance. Persons needing advice should consult an independent financial advisor. This Announcement and the information contained herein are not for release, publication or distribution, in whole or in part, directly or indirectly, to persons in the United States, Australia, Canada, Japan or South Africa or in any jurisdiction in which such publication or distribution would be unlawful. No public offer of securities of the Company is being made in the United Kingdom, the United States or elsewhere. In particular, the Placing Shares referred to in this Announcement have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States. The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement. Any representation to the contrary is a criminal offence in the United States.

The Placing Shares may not be offered, sold or transferred within the United States except pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any state or other jurisdiction of the United States. The Placing Shares are being offered and sold outside the United States in reliance on Regulation S or another available safe harbour or exemption from registration under the Securities Act.

The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and the Placing Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, Canada, Japan or South Africa.

Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Australia, Canada, Japan or South Africa or any other jurisdiction outside the United Kingdom.

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

The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the London Stock Exchange and the ISDX.

Details of the Placing Agreement and the Placing Shares

The Placing is being effected by way of a vendor placing and a cash placing.  Investec Bank plc and Canaccord Genuity Limited have entered into a placing agreement (the "Placing Agreement") with the Company under which they have, on the terms and subject to the conditions set out therein, agreed as placing agents for the Company to use their respective reasonable endeavours to procure Placees to take up the Placing Shares at the Issue Price, failing which the Joint Bookrunners have severally, and not jointly or jointly and severally, agreed to subscribe for the Placing Shares, for which Placees have not been procured, themselves. The Placing Agreement was entered into at the same time as the agreement to acquire ILS and the consideration payable to the sellers of ILS is to be satisfied by the allotment and issue of new Ordinary Shares in the Company to such persons as the Joint Bookrunners may direct (or failing which to the Joint Bookrunners as principal) in accordance with the terms of the Placing Agreement. The only consideration to be received by the Company in consideration for the allotment of such new Ordinary Shares is the transfer to it of the entire issued share capital of ILS. At the same time, the sellers of ILS have entered into an agreement with the Joint Bookrunners pursuant to which the Joint Bookrunners will pay, or procure other persons to pay, to the sellers the gross proceeds from the allotment and issue of such new Ordinary Shares. In addition, the Company proposes to raise cash proceeds through the issue of further new Ordinary Shares for cash to such persons as the Joint Bookrunners may direct (or failing which to the Joint Bookrunners as principal). The new Ordinary Shares to be issued by the Company pursuant to the acquisition of ILS and the new Ordinary Shares to be issued by the Company for cash together comprise the Placing Shares.

The Placing Shares will rank pari passu in all respects with the existing ordinary shares  in Mears, including the right to receive all dividends and other distributions declared, made or paid on or in respect of the Ordinary Shares after the date of issue of the Placing Shares and will in particular qualify for the recommended final dividend of 5.7 pence per Ordinary Share, payable on 2 July 2013, subject to approval of Mears' shareholders at the Company's annual general meeting

The Company, subject to certain exceptions, has agreed not to allot, issue or grant any rights in respect of any of its Ordinary Shares in the period from the date of this Announcement until 90 days after Admission without first consulting the Joint Bookrunners and taking into account its reasonable views.

The Placing Agreement is conditional upon, amongst other things:

·      The agreement relating to the Acquisition not having been terminated or rescinded before Admission and such agreement becoming unconditional in all respects, subject only to Admission, the satisfaction of the consideration due on its completion and any conditions relating to the Placing Agreement becoming unconditional or not being terminated;

·      Admission occurring by no later than 8.00am on 26 April 2013; and

·      the obligations of Investec and Canaccord not having been terminated pursuant to the terms of the Placing Agreement.

The Placing Agreement contains certain undertakings and warranties given by the Company for the benefit of Investec and Canaccord.  Investec and Canaccord have absolute discretion as to whether or not to bring an action against the Company for breach of these undertakings and warranties.

Application for listing and admission to trading

Application will be made to the Financial Conduct  Authority (the "FCA") for admission of the Placing Shares to the Official List of the FCA  (the "Official List"), to the London Stock Exchange plc for admission to trading of the Placing Shares on its main market for listed securities and to the ICAP Securities and Derivatives Exchange for admission to trading on the ISDX Main Board (together, "Admission"). It is expected that Admission will become effective by no later than 8.00 am on or around 24 April 2013 and that dealings in the Placing Shares will commence at that time.

Participation in, and principal terms of, the Placing

1. The Joint Bookrunners (whether through themselves or any of their affiliates) are arranging the Placing as placing agents of the Company for the purpose of procuring Placees at the Issue Price for the Placing Shares. Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by the Joint Bookrunners. The Joint Bookrunners and their affiliates may participate in the Placing as principals.  The Joint Bookrunners will determine in their absolute discretion the extent of each Placee's participation in the Placing, which will not necessarily be the same for each Placee

2. The allotment and issue of the Placing Shares to Placees by the Company will be in consideration for either (i) the transfer to the Company by the sellers of the shares in ILS or (ii) cash.

3. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.

4. The placing price will be a fixed price of 310 pence per Placing Share (the "Issue Price").

5. Each Placee's allocation will be confirmed to Placees orally by the Joint Bookrunners, and a trade confirmation will be dispatched as soon as possible thereafter. The oral confirmation to such Placee will constitute an irrevocable legally binding commitment upon such person (who will at that point become a Placee) in favour of the Joint Bookrunners and the Company, under which it agrees to acquire the number of Placing Shares allocated to it at the Issue Price on the terms and conditions set out in this Appendix and in accordance with the Company's Articles of Association.

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

7. Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made at the same time, on the basis explained below under "Registration and Settlement".

8. All obligations under Placing will be subject to fulfilment or (where applicable) waiver of, amongst others, the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Right to terminate under the Placing Agreement".

9.  By participating in the Placing, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

10. To the fullest extent permitted by law and applicable Financial Conduct Authority ("FCA") rules (the "FCA Rules"), neither (i) Investec or Canaccord, (ii) any of their respective directors, officers, employees or consultants, or (iii) to the extent not contained with (i) or (ii), any person connected with Investec or Canaccord as defined in the FCA Rules (i), (ii) and (iii) being together "affiliates" and individually an "affiliate"), shall have any liability (including to the extent permissible by law, any fiduciary duties) to Placees or to any person other than the Company in respect of the Placing.

Conditions of the Placing

The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms. The Joint Bookrunners' obligations under the Placing Agreement are conditional on, inter alia:

(a) none of the warranties contained in the Placing Agreement being untrue, inaccurate or misleading as at the date of Admission as though they had been given and made on such date (by reference to the facts and circumstances existing at such date);

(b) the Company's  compliance with all of the agreements and undertakings and satisfaction and performance of all of its conditions and obligations under the Placing Agreement in so far as they are required to be performed prior to Admission;

(c) in the opinion of the Joint Bookrunners, there having been no material adverse change in, or any development involving or reasonably likely to involve a prospective adverse change in or affecting the condition (financial, operational, legal or otherwise), earnings, business, management, properties, prospects, assets, rights , results of operations, net asset value, funding position, liquidity or solvency of the Company  or the Company and its subsidiaries which is material in the context of the Company and its subsidiaries as a whole, whether or not arising in the ordinary course of business;

(d) Admission taking place not later than 8.00 a.m. on 26 April 2013; and

(e) the Acquisition Agreement having become unconditional in all respects subject only to Admission, the payment of the consideration due on its completion and any conditions relating to the Placing Agreement becoming unconditional or not being terminated before Admission.

If (i) any of the conditions contained in the Placing Agreement is not fulfilled or (where applicable) waived by the Joint Bookrunners in accordance with the Placing Agreement within the stated time periods (or such later time and/or date as may be agreed between the Company and the Joint Bookrunners), or (ii) the Placing Agreement is terminated in accordance with its terms (see below), the Placing will lapse and the Placees' rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by or on behalf of the Placee (or any person on whose behalf the Placee is acting) in respect thereof. By participating in the Placing, each Placee agrees that its rights and obligations cease and terminate only in the circumstances described above and under "Right to terminate under the Placing Agreement" below and will not be capable of rescission or termination by it after oral confirmation by the Joint Bookrunners. The Joint Bookrunners may, at their discretion and upon such terms as they determine, waive compliance with, or extend the time and/or date for fulfilment by the Company of, the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement save that certain conditions, including the above conditions relating to Admission taking place and the Company's allotment of the Placing Shares, may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

None of the Joint Bookrunners, the Company, any of their directors or respective affiliates or any other person shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the Company and the Joint Bookrunners.

Right to terminate under the Placing Agreement

The Joint Bookrunners are entitled, at any time before Admission, to terminate the Placing Agreement in accordance with the terms of the Placing Agreement in certain circumstances, including a breach of the warranties given to the Joint Bookrunners in the Placing Agreement or the occurrence of a force majeure event. Upon such termination, the parties to the Placing Agreement shall be released and discharged (except for any liability arising before or in relation to such termination) from their respective obligations under or pursuant to the Placing Agreement subject to certain exceptions. By participating in the Placing, Placees agree that the exercise by the Joint Bookrunners of any right of termination or other right or discretion under the Placing Agreement shall be within the absolute discretion of the Joint Bookrunners and that it need not make any reference to Placees and that it shall have no liability to Placees whatsoever in connection with any such exercise.

No prospectus

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

Registration and settlement

Settlement of transactions in the Placing Shares (ISIN: GB0005630420) following Admission will take place within the CREST system, subject to certain exceptions. The Joint Bookrunners reserve the right to require settlement for and delivery of the Placing Shares to Placees by such other means that it deems necessary if delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

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

It is expected that settlement will be on 24 April 2013 on a T+3 basis in accordance with the instructions set out in the trade confirmation. Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above the London Interbank Offered Rate as determined by the Joint Bookrunners.

Settlement should be through either Investec Bank against CREST ID: 331, account designation: NEWISSUE or Canaccord against CREST ID: 805, account designation: BLANK.  For the avoidance of doubt, Placing allocations will be booked with a trade date of 19 April 2013 and settlement date of 24 April 2013, being the date of Admission.

Each Placee is deemed to agree that, if it does not comply with these obligations, the Joint Bookrunners may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for the relevant Joint Bookrunner's account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf. For the avoidance of doubt, the relevant Placee shall not be entitled to any profit which may arise upon the sale of such Placing Shares on such Placee's behalf. By participating in the Placing, each Placee confers on the relevant Joint Bookrunner all such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions the relevant Joint Bookrunner lawfully takes in pursuance of such sale.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax.

Placees will not be entitled to receive any fee or commission in connection with the Placing.

Representations, warranties and further terms

By participating in the Placing each Placee (and any person acting on such Placee's behalf) acknowledges, undertakes, represents, warrants and agrees (as the case may be) that:

1. it has read this Announcement, including the Appendix, in its entirety and that its purchase of the Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings and other information contained herein and undertakes not to redistribute them;

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

3. none of the Joint Bookrunners, the Company, their directors or respective affiliates or any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing, the Placing Shares or the Company other than this Announcement; nor has it requested any of the Joint Bookrunners, the Company, any of their directors or affiliates or any person acting on behalf of any of them to provide it with any such information;

4.  the content of this Announcement is exclusively the responsibility of the Company and that none of the Joint Bookrunners, their affiliates or any person acting on the Joint Bookrunners' behalf has or shall have any liability for any information, representation or statement contained in this Announcement or any information previously published by or on behalf of the Company and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to acquire the Placing Shares is contained in this Announcement and any information previously published by the Company by notification to a Regulatory Information Service, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by  the Joint Bookrunners or the Company and neither the Joint Bookrunners nor the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person. Each Placee further acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing;

5.  neither the Joint Bookrunners nor any person acting on their behalf nor any of their affiliates has or shall have any liability for any publicly available or filed information or any information, representation, warranty or statement relating to the Company contained therein or otherwise, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

6.  any sales outside the United States are being made in 'offshore transactions' (as defined in Regulation S under the Securities Act) in reliance on Regulation S under the Securities Act;

7.  it (a)(i) is not in the United States and (ii) is not acting for the account or benefit of a person in the United States, unless in the case of this clause (ii) it is acting with investment discretion for such person or, if such person is a corporation or partnership, the person agreeing to purchase the Placing Shares is an employee of such person authorised to make such purchase; or (b) it is a dealer or other professional fiduciary in the United States acting on a discretionary basis for a non-US person (other than an estate or trust) in reliance on Regulation S under the Securities Act; or (c) it is otherwise acquiring the Placing Shares in an 'offshore transaction' meeting the requirements of Regulation S under the Securities Act;

8.  it is acquiring the Placing Shares for its own account or for one or more accounts as to each of which it exercises sole investment discretion, for investment purposes and not with a view to any distribution or for resale in connection with, the distribution thereof in whole or in part, in the United States and that it has full power to make the acknowledgements, representations and agreements herein on behalf of each such account;

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

10. the Company is subject to ongoing reporting obligations in the United Kingdom and is therefore required to publish certain business and financial information in accordance with the rules and practices of the United Kingdom and relevant regulatory authorities in such jurisdiction (the 'Exchange Information'), which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account, and similar statements for preceding years, and that it has reviewed such Exchange Information as it has deemed necessary and that it is able to obtain or access the Exchange Information without undue difficulty and none of the Joint Bookrunners, the Company or any of their respective affiliates has made any representations to it, express or implied, with respect to the Company, the Placing and the Placing Shares or the accuracy, completeness or adequacy of the Exchange Information. It understands that the Exchange Information has been prepared in accordance with the UK format, style and context, which differs from US format, style and context. It acknowledges and agrees that it will not hold the Joint Bookrunners or any of its affiliates responsible for any misstatements in or omissions from any publicly available information concerning the Company including (without limitation) the Exchange Information. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation;

11. unless otherwise specifically agreed with the Joint Bookrunners, it is, or at the time the Placing Shares are acquired that it will be, the beneficial owner of such Placing Shares, or that the beneficial owner of such Placing Shares is not a resident of Australia, Canada, Japan or South Africa;

12. issue to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services), that it is not participating in the Placing as nominee or agent for any person or persons to whom the allocation, allotment, issue or delivery of Placing Shares would give rise to such a liability and that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer Placing Shares into a clearance system;

13. it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000 (as amended), the Terrorism Act 2006 and the Money Laundering Regulations 2007 (the 'Regulations') and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations. In order to ensure compliance with the Money Laundering Regulations 2007, the Joint Bookrunners (for themselves and as agents on behalf of the Company) or the Company's registrars may, in their absolute discretion, require verification of your identity.  Pending the provision to the Joint Bookrunners or the Company's registrars, as applicable, of evidence of identity, definitive certificates in respect of the Placing Shares may be retained at the Joint Bookrunners' absolute discretion or, where appropriate, delivery of the Placing Shares to you in uncertificated form, may be retained at the Joint Bookrunners or the Company's registrars', as the case may be, absolute discretion.  If within a reasonable time after a request for verification of identity the Joint Bookrunners (for themselves and as agents on behalf of the Company) or the Company's registrars have not received evidence satisfactory to them, the Joint Bookrunners and/or the Company may, at their absolute discretion, terminate your commitment in respect of the Placing, in which event the monies payable on acceptance of allotment will, if already paid, be returned without interest to the account of the drawee's bank from which they were originally debited.

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

15. it has not offered or sold and, prior to the expiry of a period of six months from Admission, will not offer or sell any Placing Shares to persons in the United Kingdom, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the Financial Services and Markets Act 2000 ('FSMA');

16. it and any person acting on its behalf (a) falls within Article 19(5) and/or 49(2) of the Order and undertakes that it will acquire, hold, manage and (if applicable) dispose of any Placing Shares that are allocated to it for the purposes of its business only and (b) is a Qualified Investor as defined in section 86(7) of FSMA, being a person falling within Article 2.1(e)(i), (ii) or (iii) of the Prospectus Directive;

17. it has not offered or sold and will not offer or sell any Placing Shares to persons in the EEA prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the EEA within the meaning of the Prospectus Directive;

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

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

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

21. it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with this Announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other Placees or sold as the Joint Bookrunners  may in their respective sole discretion determine and without liability to such Placee, who will remain liable for any amount by which the net proceeds of such sale falls short of the product of the Issue Price and the number of Placing Shares allocated to it and may be required to bear any stamp duty, stamp duty reserve tax or other similar taxes (together with any interest or penalties) which may arise upon the sale of such Placee's Placing Shares;

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

23. undertakes that the person whom it specifies for registration as holder of the Placing  Shares will be (a) itself or (b) its nominee, as the case may be. None of the Joint Bookrunners nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement ("Indemnified Taxes"). Each Placee and any person acting on behalf of such Placee agrees to indemnify the Company and the Joint Bookrunners on an after-tax basis in respect of any Indemnified Taxes;

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

25. the Company, the Joint Bookrunners and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties and acknowledgements which are given to the Joint Bookrunners on their own behalf and on behalf of the Company and are irrevocable;

26. it will indemnify and hold the Company, the Joint Bookrunners and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing;

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

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

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

30. it has neither received nor relied on any inside information concerning the Company in accepting this invitation to participate in the Placing; and

31. if it is a pension fund or investment company, its purchase of Placing Shares is in full compliance with applicable laws and regulations.

The agreement to settle a Placee's acquisition of Placing Shares (and/or the acquisition by a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to an acquisition by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement related to any other dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor the Joint Bookrunners will be responsible. If this is the case, each Placee should seek its own advice and notify the Joint Bookrunners accordingly. In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the acquisition by them of any Placing Shares or the agreement by them to acquire any Placing Shares.

Each Placee, and any person acting on behalf of the Placee, acknowledges that the Joint Bookrunners do not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement. Each Placee and any person acting on behalf of the Placee acknowledges and agrees that either or both of the Joint Bookrunners or any of their respective affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares. When a Placee or person acting on behalf of the Placee is dealing with a Joint Bookrunner, any money held in an account with such Joint Bookrunner on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FCA made under the FSMA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from such Joint Bookrunner's money in accordance with the client money rules and will be used by such Joint Bookrunner in the course of its own business and the Placee will rank only as a general creditor of such Joint Bookrunner.

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

 

END

 

 

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