Proposed Share Issue and Notice of General Meeting

RNS Number : 8253S

Primary Health Properties PLC

22 March 2016

 

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

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

THE DEFINED TERMS SET OUT IN APPENDIX 1 APPLY IN THIS ANNOUNCEMENT.

22 March 2016

Primary Health Properties PLC

("PHP" or the "Company")

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

and Notice of General Meeting

The Board of PHP announces a share issue to raise gross proceeds of up to £120 million (approximately £116 million net of expenses) through the issue of up to 120,000,000 new Ordinary Shares by way of a Firm Placing and Placing, Open Offer and Offer for Subscription at a price of 100 pence per New Share. The Board will have the ability to increase the size of the Issue by up to 25 per cent. should there be sufficient demand.

The Issue Price represents a discount of 9.5 per cent. to the Closing Price of 110.50 pence per Ordinary Share on 21 March 2016. 

PHP will shortly be publishing a Prospectus in connection with the Capital Raising and will convene a General Meeting to approve certain matters necessary to implement the proposed fundraising.

Summary

·	Issue of 60,000,000 new Ordinary Shares through a Firm Placing raising gross proceeds of £60 million. The Firm Placing is underwritten by Numis and Peel Hunt.
·	Issue of up to 60,000,000 new Ordinary Shares pursuant to a Placing, Open Offer and Offer for Subscription to raise gross proceeds of up to £60 million.
·	Qualifying Shareholders are being offered the opportunity to participate in the Open Offer on the basis of 1 Open Offer Share for every 10 Existing Ordinary Shares.
·	Qualifying Shareholders are also being offered the opportunity to subscribe for New Shares in addition to their Basic Entitlements under the Excess Application Facility.
·	The Board will have the ability to increase the size of the Capital Raising by up to 25 per cent should there be sufficient demand so that the gross proceeds would be approximately £150 million.
·	The Capital Raising will enable the Company to continue delivering its long-term strategy of growing the portfolio through selected property acquisitions whilst maintaining gearing at a conservative level and supporting its progressive dividend policy.
·	The proceeds will be selectively applied alongside existing and future debt facilities to generate a growing return and to maintain a progressive dividend policy, including:
	o	to fund existing development projects and purchase contracts totalling £24.3 million (as at 31 December 2015); and
	o	to fund transactions from PHP's current acquisition pipeline totalling £115.5 million in the UK and €53.9 million in the Republic of Ireland.
·	Initially, where possible, to pay down sums drawn on the Group's revolving debt, totalling £70.0 million as at 31 December 2015, maximising treasury management efficiency and allowing the Group to re-draw sums as necessary to fund existing acquisition and development commitments, and further as investment opportunities require.
·	In addition, the Board will continue to monitor the Group's interest rate swap portfolio and consider the redemption or restructuring of all or elements of the contracts should prevailing market conditions and pricing make it efficient to do so.
·	The Board's medium to long term target is to operate with leverage in the range of 45 per cent. to 65 per cent. of gross property value and in the short to medium term no higher than 60 per cent..
·	The Company is confident that GPs will continue to be at the forefront of the development and delivery of integrated care models with increased numbers of services delivered from local community settings to enable the NHS to modernise the provision of care, meet their patient choice agenda and provide care in a cost effective manner. PHP's long standing track record of delivering flexible, modern accommodation and continuing to invest to improve and expand its facilities provides the foundation from which PHP can capitalise on the continued demand for healthcare real estate.
·	The Company is now taking its first steps into healthcare real estate in the Republic of Ireland. The challenges facing this country's healthcare provision are similar to those of the UK with a growing, ageing population and increasing rates of chronic illness. PHP is working with selected experienced developers of real estate in the Republic of Ireland to acquire existing modern assets and fund the development of new premises.
·	The Capital Raising is conditional on, amongst other things, the passing of the Resolutions at the General Meeting.  If the Resolutions are passed and the other conditions to the Capital Raising are satisfied, it is expected that dealings in the New Shares will commence at 8.00 a.m. on 14 April 2016.

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

Harry Hyman, Managing Director of PHP said:

"I am delighted to announce this fundraising which enables us to continue to deliver our long term strategy of growing the portfolio through earnings enhancing acquisitions that support our progressive dividend policy, while maintaining gearing at appropriate levels. We are currently seeing more opportunities as the demand for high quality, flexible, modern GP centres continues to grow as the government places greater emphasis on the important role primary care has to deliver increased number of services from the local community. The funds raised will be used to finance our existing committed development projects, as well as our current pipeline of opportunities which we are seeing in both the UK and in the Republic of Ireland."

Further details of the Firm Placing and Placing, Open Offer and Offer for Subscription are set out in this announcement.  Readers are referred to the important notice that applies to this announcement. The times set out in the expected timetable of principal events above and mentioned throughout this announcement are times in London unless otherwise stated. This announcement has been issued by and is the sole responsibility of Primary Health Properties PLC.

For further information contact:

Primary Health Properties PLC	[phone]
Harry Hyman, Managing Director
Phil Holland, Finance Director
Bell Pottinger	[phone]
David Rydell / Victoria Geoghegan / Elizabeth Snow
Numis Securities Limited Sole Sponsor, Joint Broker and Joint Bookrunner	[phone]
Corporate Finance: Michael Meade / Andrew Holloway
Corporate Broking: James Black / Jamie Loughborough
Peel Hunt Joint Broker and Joint Bookrunner	[phone]
Corporate Finance: Capel Irwin / George Huntley
Corporate Sales & Syndications: Jock Maxwell Macdonald

IMPORTANT NOTICE

This announcement is an advertisement and does not constitute a prospectus or prospectus equivalent document.  Nothing in this announcement should be interpreted as a term or condition of the Capital Raising.  Investors should not subscribe for or purchase any New Shares except on the basis of the information contained in the combined circular and Prospectus to be published today or otherwise incorporated by reference into the Prospectus.  The Prospectus, when published, will be made available on the Company's website (www.phpgroup.co.uk) and will be available for inspection at: http://www.Hemscott.com/nsm.do.   

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

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

The New Shares and any entitlements pursuant to the open offer and offer for subscription will not be registered under the US Securities Act of 1933, as amended (the "US Securities Act"), or with the securities regulatory authority of any state or other jurisdiction of the United States. Unless so registered, the New Shares and any entitlements pursuant to the open offer and offer for subscription may not be offered, sold, taken up or exercised, within the United States except in a transaction that is exempt from, or not subject to, the registration requirements of the US Securities Act. There will be no public offer of New Shares in the United States. Outside the United States, the New Shares are being offered in reliance on Regulation S under the US Securities Act.

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

Numis Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting for Primary Health Properties PLC and for no-one else in connection with the Capital Raising and will not be responsible to anyone other than Primary Health Properties PLC for providing the protections afforded to clients of Numis Securities Limited, or for providing advice in relation to the Capital Raising or any matters referred to in this announcement.  Numis Securities Limited is not responsible for the contents of this announcement. 

Peel Hunt LLP, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting for Primary Health Properties PLC and for no-one else in connection with the Capital Raising and will not be responsible to anyone other than Primary Health Properties PLC for providing the protections afforded to clients of Peel Hunt LLP, or for providing advice in relation to the Capital Raising or any matters referred to in this announcement.  Peel Hunt LLP is not responsible for the contents of this announcement. 

This announcement has been prepared for the purposes of complying with the applicable laws and regulations of the United Kingdom and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of the United Kingdom.

Note regarding forward-looking statements:

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

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

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

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

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

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

Expected timetable

Record Date for entitlements under the Open Offer	close of business on 18 March 2016
Announcement of the Capital Raising, publication and posting of the Prospectus, Form of Proxy and Application Form	22 March 2016
Ex-entitlement date for the Open Offer	22 March 2016
Basic Entitlements and Excess CREST Open Offer Entitlements credited to stock accounts of Qualifying CREST Shareholders in CREST	23 March 2016
Recommended latest time for requesting withdrawal of Basic Entitlements and Excess CREST Open Offer Entitlements from CREST	4.30 p.m. on 6 April 2016
Latest time for depositing Basic Entitlements and Excess CREST Open Offer Entitlements into CREST	3.00 p.m. on 7 April 2016
Latest time and date for splitting of Application Forms (to satisfy bona fide market claims only)	3.00 p.m. on 8 April 2016
Latest time and date for receipt of Forms of Proxy and receipt of electronic proxy appointments via the CREST system	10.00 a.m. on 11 April 2016
Latest time and date for receipt of Placing commitments	11.00 a.m. on 12 April 2016
Latest time and date for receipt of completed Application Forms and payment in full under the Open Offer or settlement of relevant CREST Instructions	11.00 a.m. on 12 April 2016
Latest time and date for receipt of completed Subscription Forms and payment in full under the Offer for Subscription or settlement of relevant CREST Instructions	11.00 a.m. on 12 April 2016
General Meeting	10.00 a.m. on 13 April 2016
Expected date of announcement of results of the General Meeting and the Capital Raising through a Regulatory Information Service	13 April 2016
Expected date of Admission and commencement of dealings in New Shares and CREST Members' accounts credited in respect of New Shares in uncertificated form	by 8.00 a.m. on 14 April 2016
Expected date of despatch of definitive share certificates for New Shares in certificated form	No later than 21 April 2016

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

Introduction

The Board announces that the Company intends to raise up to £120 million (approximately £116 million net of all Capital Raising costs and expenses) in a Capital Raising by way of a Firm Placing and a Placing, Open Offer and Offer for Subscription consisting of the issue of up to 120,000,000 New Shares at an Issue Price of 100 pence per New Share. The Board will have the ability to increase the size of the Issue by up to 25 per cent should there be sufficient demand. It is the Board's opinion that the Capital Raising will enable the Company to continue delivering its long-term strategy of growing the portfolio through selected property acquisitions in line with its prudent acquisition policies, whilst maintaining gearing at a conservative level. The Board believes that investing the proceeds in primary care properties in the current environment, will generate a favourable return, thus enabling the Company to continue its progressive dividend policy.

Shareholders will be asked to approve the Resolutions to approve the Capital Raising, details of which are set out within this announcement and in the Prospectus.  The General Meeting has been convened for 10.00 a.m. on 13 April 2016 at Nabarro LLP, 125 London Wall, London EC2Y 5AL.

Background to and reasons for the Capital Raising

Overview of the Company, its objectives and investment characteristics

The principal activity of the Group is the generation of rental income and capital growth through the acquisition and development of healthcare property in the United Kingdom and the Republic of Ireland leased principally to GPs, NHS, HSE and other governmental bodies and other associated healthcare users. The Group's activities are carried out in the United Kingdom and the Republic of Ireland.

The Directors believe that PHP has little development risk and a low risk portfolio due to its:

·	strong tenant covenants, given that 91 per cent. of the Group's UK rent roll is paid directly or indirectly by the UK government and that the HSE will be responsible for 60 per cent. to 80 per cent. of the income from Irish properties;
·	long leases, with effectively upward only rent reviews in the UK and linked to CPI in Ireland; and
·	minimal vacancies.

Accordingly, the Directors believe that PHP offers strong and visible cash flows to Shareholders. Historically, the increase in rents receivable achieved through the rent review process has broadly matched increases in the RPI. If this trend continues, the Directors believe that an investment in PHP will provide an effective hedge against inflation.

The current quantum of the Group's property assets enables it to spread its fixed costs over a relatively large portfolio and the Company expects further benefits from economies of scale as PHP grows in size.

The Board believes that the Adviser has considerable expertise in sourcing deals in the UK and has built a good network of contacts with developers, consultants and agents to capitalise on the Company's UK track record to secure a portfolio of assets in the Republic of Ireland.

The Company's cost structure is well-defined and efficient. The pipeline of acquisition opportunities remains significant, and will be enhanced by the Group's expansion into the Republic of Ireland. The current positive gap between yields and financing costs is providing opportunities for PHP to make immediately earnings enhancing and cash generating property investments.

The Directors consider that the attractive investment characteristics of the Company and the stability of its underlying income and shareholder returns have contributed to PHP outperforming the FTSE All Share Index by 18 per cent. on price performance and 42 per cent. on total shareholder return over the five years ended 31 December 2015. The Directors believe that long leases, strong tenant covenants and little or no oversupply in the primary healthcare property market are the principal reasons why yields on the Group's portfolio have remained resilient in comparison to other sectors of the property industry.

Reasons for the Capital Raising

Having delivered increasing returns in recent years against a backdrop of limited new centre development opportunities, the Board sees growing levels of opportunity from changing circumstances and fresh initiatives in the UK and in entering a new market in the Republic of Ireland. The Board's opinion is that the Capital Raising will enable the Company to continue delivering its long-term strategy of growing the portfolio through selected property acquisitions whilst maintaining gearing at an appropriate level and supporting its progressive dividend policy.

The Group is in active, and in some cases advanced, negotiations with vendors of potential property acquisitions and development in both the UK and the Republic of Ireland. Some represent opportunities where the Company has agreed acquisition terms with vendors and, subject to contract, are currently in the hands of solicitors for documenting and completion whereas others are nearing that state or are at the stage where the Group is in the course of agreeing terms with vendors. The Group is under no contractual obligation and there can be no guarantee that the Group will complete the acquisition of any of these investment opportunities. The Directors consider that these assets, if completed, would benefit the Company.

Geographical region	Number of indicative pipeline opportunities*	Acquisition cost*	Rent roll*
United Kingdom
North	6	£9.4m	£0.55m
Midlands	5	£20.3m	£0.91m
South East	18	£56.7m	£3.33m
South West	8	£26.0m	£1.61m
Scotland	1	£3.1m	£0.17m
Total - United Kingdom	38	£115.5m	£6.57m
Republic of Ireland	6	€53.9m	€3.74m

*Unaudited

The Board believes that this pipeline is indicative of the attractive and suitable investment opportunities that currently exist and are expected to arise.  This is evidenced by a number of additional acquisition opportunities that are actively being negotiated with vendors and has led the Board to conclude that now is an appropriate time to seek to raise sufficient additional capital to exploit these opportunities.

Fulfilment of some or all of these pipeline opportunities would increase the size and rent roll of the Group's portfolio and help to enable PHP to gain further critical mass, regarded by the Directors as necessary to compete effectively with other property companies, as well as enabling it to benefit from some additional economies of scale and increase financing flexibility.

The Board also expects that the increased market capitalisation of the Company following the Capital Raising will improve the liquidity of the Ordinary Shares, to the benefit of all Shareholders.

PHP's LTV ratio as at 31 December 2015 was approximately 62.7 per cent.. The Board has consistently believed that, despite the secure nature of the Company's tenants and the long lease expiry profile, a conservative consolidated level of gearing of below 65 per cent. is appropriate for the Company. The Board's medium to long term target is to operate with leverage in the range of 45 per cent. to 65 per cent. of gross property value and in the short to medium term no higher than 60 per cent.. The effect of the Capital Raising will be to allow PHP to continue to pursue its growth strategy and maintain maximum funding flexibility on an ongoing basis.

The Group has no consolidated LTV covenants within its range of debt facilities. A proportion of the Group's property portfolio is currently unfettered with debt and the Group has the ability to transfer such properties into the security pools of its debt facilities if required.

Current trading trends and prospects

The Company announced the issue of its Annual Report and Accounts for the year ended 31 December 2015 on 4 February 2016. The information below is extracted from the Chairman's statement in that announcement.

"I am pleased to present the Group's Annual Report for 2015, a year in which we have continued to deliver on our strategic objectives. Further accretive property acquisitions, efficient management and lower costs of borrowing in the year enabled the Company to grow its dividend for the 19th successive year. Importantly, this was coupled with achieving one of our key goals of returning to full dividend cover in the second half of the year."

Outlook

After careful evaluation, we have taken our first steps to invest in primary care property in the Republic of Ireland. The challenges facing Ireland's healthcare provision are similar to those in the UK with a growing, ageing population and increasing rates of chronic illness but a disparate and outdated estate from which services are delivered.

The Irish State's Health Service Executive ("HSE") is driving forward significant change in healthcare provision in Ireland, focussed on the modernisation of the primary care sector. This is seeing the development of a number of new primary care centres with the HSE itself as the majority occupier, providing a similar covenant to that of the NHS in the UK.

We are a leading investor in healthcare real estate in the UK and our reputation and experience will benefit our expansion into Ireland. We are well placed to provide new premises to support the modernisation of the NHS and to work alongside the HSE to reposition healthcare provision in Ireland.

The fundamentals of the sector in both the UK and Ireland provide confidence that the assets in which we invest will continue to provide strong, reliable and growing long term returns. The Group's operational structure ensures that our activities are managed efficiently, whilst active management of our debt portfolio will maintain a balanced maturity profile and an appropriate blended cost of debt. This will all be reflected in the progressive dividend that we pay to shareholders.

Principal Terms of the Capital Raising

PHP is proposing to raise gross proceeds of up to £120 million (approximately £116 million net of expenses) by the issue of up to 120,000,000 new Ordinary Shares through the Capital Raising at 100  pence per New Share, although the Directors have the ability to increase the size of the Issue by up to 25 per cent. such that the gross proceeds would be approximately £150 million (approximately £146 million net of expenses). The Firm Placing is underwritten by Numis and Peel Hunt. The Board considers the Firm Placing and Placing, Open Offer and Offer for Subscription to be a suitable fundraising structure as it will allow access to a wide variety of new investors to broaden the Company's shareholder base, whilst providing existing Shareholders with the opportunity to participate in the fundraising to an extent through the Open Offer and the Offer for Subscription.

Assuming that the size of the Issue is approximately £120 million, 60,000,000 of the New Shares will be issued through the Firm Placing and 60,000,000 of the New Shares will be issued through the Placing, Open Offer and Offer for Subscription. The actual number of New Shares to be issued pursuant to the Issue will be notified by the Company via a Regulatory Information Service announcement prior to Admission. Qualifying Shareholders are being offered the right to subscribe for Open Offer Shares in accordance with the terms of the Open Offer. Qualifying Shareholders are not being offered the right to subscribe for the Firm Placed Shares or Placed Shares. Qualifying Shareholders applying for their Basic Entitlements may also apply, under the Excess Application Facility, for Excess Shares in excess of their Basic Entitlements as described below. The Company is also making the Offer for Subscription as described below in the UK only.

All elements of the Capital Raising have the same Issue Price. The Issue Price was set having regard to the prevailing market conditions and the size of the Issue, and represents a discount of approximately 9.5 per cent. to the Closing Price of 110.50 pence per Ordinary Share on 21 March 2016 (being the last Business Day before the announcement of the Capital Raising). The Board believes that both the Issue Price and the discount are appropriate having also taken into account the period of the Open Offer (21 days) and the potential for share price fluctuation during this time.

The New Shares, when issued and fully paid, will rank equally to the Existing Ordinary Shares and will rank in full for all dividends or distributions made, paid or declared if any, by reference to a record date after the date of their issue or otherwise pari passu in all respects with the Existing Ordinary Shares. The New Shares will not qualify for the dividend to be declared on or about 31 March 2016 payable to Shareholders on the Company's register as at or about 8 April 2016.

On the basis that the Issue size is £120 million, the Capital Raising is expected to result in 120,000,000 new Ordinary Shares being issued (representing approximately 26.9 per cent. of the existing issued share capital). On the basis that the Issue size is increased to a maximum of £150 million, the Capital Raising is expected to result in 150,000,000 new Ordinary Shares being issued (representing approximately 33.6 per cent. of the existing issued share capital).

The Capital Raising has been structured in a way that is expected to have the effect of creating distributable reserves equal to the net proceeds of the Capital Raising less the par value of the New Shares attributable to the Capital Raising issued by the Company. It should be possible for the Company to declare dividends from the aggregate distributable reserves created by the Capital Raising (together with any other distributable reserves of the Company) provided that the Company has sufficient cash resources to fund such dividends, the distributable reserves have not otherwise been reduced and the Directors consider it appropriate to declare such dividends.

The New Shares may be offered: (a) to certain institutional and qualified professional investors in the United Kingdom and elsewhere; and (b) in the United States only to a limited number of persons who are reasonably believed to be QIBs that are not ERISA Entities in transactions exempt from, or not subject to, the registration requirements under the US Securities Act. The New Shares are being offered and sold outside the United States in reliance on Regulation S. There will be no public offering of the New Shares in the United States.

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

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

Firm Placing

The Firm Placees have conditionally agreed to subscribe for 60,000,000 of the New Shares at the Issue Price (representing gross proceeds of approximately £60 million). The Firm Placed Shares are not subject to clawback to satisfy the valid applications by Qualifying Shareholders under the Open Offer and are not part of the Placing, Open Offer and Offer for Subscription. The Firm Placing is underwritten by Numis and Peel Hunt. The terms and conditions of the Firm Placing and the Placing are contained in Appendix 2 to this announcement.

Open Offer

The Directors recognise the importance of pre-emption rights to Shareholders and consequently 44,662,701 of the New Shares are being offered to existing Shareholders by way of the Open Offer. The Open Offer provides an opportunity for Qualifying Shareholders to participate in the fundraising by both subscribing for their respective Basic Entitlements and by subscribing for Excess Shares under the Excess Application Facility, subject to availability. The Placing and the Offer for Subscription may be scaled back at the Directors' discretion to increase the size of the Open Offer by allocating New Shares that could otherwise be available under the Placing and/or the Offer for Subscription to be available to Qualifying Shareholders through the Excess Application Facility. 

To the extent that valid applications are not received in respect of any of the Open Offer Shares under the Open Offer, such Open Offer Shares may be allocated to Qualifying Shareholders to meet any valid applications under the Excess Application Facility.

Basic Entitlements

Qualifying Shareholders are being offered the opportunity to subscribe at the Issue Price for Open Offer Shares on the following basis:

1 Open Offer Share for every 10 Existing Ordinary Shares

registered in their name at the close of business on the Record Date.

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

Persons who have sold or otherwise transferred all of their Existing Ordinary Shares before the ex‑entitlement date are not entitled to participate in the Open Offer.

Qualifying Shareholders are also being offered the opportunity to subscribe for Excess Shares in excess of their Basic Entitlements as described below.

Excess Application Facility

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

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

The maximum amount of New Shares to be issued under the Excess Application Facility (the "Maximum Excess Application Number") will be limited to: (a) the maximum size of Issue (as may be increased by the Directors by up to 25 per cent. to approximately £150 million); less (b) the aggregate of the Firm Placed Shares, the New Shares issued under the Open Offer pursuant to Qualifying Shareholders' Basic Entitlements and any New Shares that the Directors determine to issue under the Placing and Offer for Subscription. Excess Applications will therefore only be satisfied to the extent that: (a) other Qualifying Shareholders do not apply for their Basic Entitlements in full; (b) where fractional entitlements have been aggregated and made available under the Excess Application Facility; and (c) if the Directors exercise their discretion to reallocate New Shares that would otherwise have been available under the Placing or Offer for Subscription to the Excess Application Facility. Qualifying Shareholders can apply for up to the Maximum Excess Application Number of New Shares under the Excess Application Facility, although applications under the Excess Application Facility shall be allocated in such manner as the Directors may determine, in their absolute discretion, and no assurance can be given that the applications by Qualifying Shareholders will be met in full or in part or at all. Excess monies in respect of applications which are not met in full will be returned to the applicant (at the applicant's risk) without interest as soon as practicable thereafter by way of cheque or CREST payment, as appropriate.

Placing

To the extent that any New Shares remain unallocated via the Excess Application Facility and are not allocated to the Offer for Subscription, New Shares will be made available under the Placing. New Shares are being allocated to Placees pursuant to the Placing Agreement. The Placing will not be underwritten by Numis and Peel Hunt and may be scaled back in favour of the Open Offer and/or the Offer for Subscription. The terms and conditions of the Firm Placing and the Placing are contained in Appendix 2 to this announcement.

Offer for Subscription

To the extent that any New Shares remain unallocated via the Excess Application Facility and are not allocated to the Placing, New Shares will be made available under the Offer for Subscription. The Offer for Subscription may be scaled back in favour of the Open Offer and/or the Placing,

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

Dilution

Assuming that the size of the Issue is approximately £120 million, if a Qualifying Shareholder does not take up his Basic Entitlements in full, such Qualifying Shareholder's holding will be diluted by up to approximately 21.2 per cent. as a result of the Firm Placing and the Placing, Open Offer and Offer for Subscription. Furthermore, a Qualifying Shareholder who takes up his Basic Entitlements in full in respect of the Open Offer (and does not receive any other New Shares pursuant to the Capital Raising) will suffer dilution of approximately 13.3 per cent. to his shareholding in the Company as a result of the Firm Placing.

If the Directors increase the Issue by 25 per cent, the size of the Issue will be approximately £150 million and if a Qualifying Shareholder does not take up his Basic Entitlements in full, such Qualifying Shareholder's holding will be diluted by up to approximately 25.1 per cent. as a result of the Firm Placing and the Placing, Open Offer and Offer for Subscription. Furthermore, a Qualifying Shareholder who takes up his Basic Entitlements in full in respect of the Open Offer (and does not receive any other New Shares pursuant to the Capital Raising) will suffer dilution of approximately 17.7 per cent. to his shareholding in the Company as a result of the Firm Placing and the increase in size of the Issue.

Shareholders who are not Qualifying Shareholders, subject to certain exceptions, will be diluted by approximately 21.2 per cent., assuming the size of the Issue is approximately £120 million, or 25.1 per cent. if the Directors increase the size of the Issue to approximately £150 million.

Fractions

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

Basis of allocation under the Capital Raising

The Placing may be scaled back in favour of the Open Offer or the Offer for Subscription and the Offer for Subscription may be scaled back in favour of the Placing or the Open Offer. The Open Offer is being made on a pre-emptive basis to Qualifying Shareholders and is not subject to scaling back in favour of either the Placing or the Offer for Subscription. The Directors have the discretion to scale back the Placing and/or the Offer for Subscription in favour of the Open Offer by reallocating New Shares that would otherwise be available under the Placing and/or the Offer for Subscription to be available to Qualifying Shareholders through the Excess Application Facility under the Open Offer. Any New Shares that are available under the Open Offer and are not taken up by Qualifying Shareholders pursuant to their Basic Entitlements and under the Excess Application Facility will be reallocated to the Placing and/or the Offer for Subscription and available thereunder.

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

Conditionality

The Capital Raising is conditional, inter alia, upon:

·	the passing of the Resolutions without amendment to be proposed at the General Meeting to be held on 13 April 2016;
·	the Placing Agreement having become unconditional in all respects save for the condition relating to Admission and not being terminated in accordance with its terms before Admission occurs; and
·	Admission occurring by not later than 8.00 a.m. on 14 April 2016 (or such later time and date as the Company, Numis and Peel Hunt may agree, not being later than 8.00 a.m. on 28 April 2016).

Prior to Admission, Numis and Peel Hunt may terminate the Placing Agreement in certain defined circumstances. Following Admission, the Placing Agreement cannot be terminated.

If the conditions of the Placing Agreement are not fulfilled on or before 8.00 a.m. on 28 April 2016, application monies will be returned to applicants (at the applicant's risk) without interest as soon as possible thereafter.

Admission

Applications will be made to the FCA and to the London Stock Exchange, respectively, for the New Shares to be admitted to the listing on the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities.

Subject to the conditions to the Capital Raising having been satisfied (or, if applicable, waived) it is expected that Admission will occur at 8.00 a.m. on or around 14 April 2016.

Existing Ordinary Shares are already admitted to listing on the premium segment of the Official List, the London Stock Exchange's main market for listed securities and to CREST. It is expected that the New Shares, when allotted and issued, credited as fully paid, will be capable of being held and transferred by means of CREST. It is expected that the New Shares will trade under ISIN code GB00BYRJ5J14.

General meeting

A General Meeting is to be held on 13 April 2016 at 10.00 a.m. at Nabarro LLP, 125 London Wall, London EC2Y 5AL. The full text of the Notice of General Meeting is set out in the Prospectus.

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

·	grant the Directors authority pursuant to section 551 of the Companies Act to allot Ordinary Shares generally and in connection with the Capital Raising;
·	disapply where relevant statutory pre-emption rights set out in section 561 of the Companies Act; and
·	grant the Directors authority pursuant to section 701 of the Companies Act to make market purchases of Ordinary Shares.

Irrevocable undertakings

Each of the Directors is supportive of the fundraising and as detailed below, Directors have irrevocably undertaken to subscribe or apply, in aggregate, for 50,705 New Shares under the Open Offer and have committed to acquire, in aggregate, 112,000 shares within the Firm Placing.

Harry Hyman has irrevocably undertaken to apply for his full Basic Entitlement of 28,919 Open Offer Shares in respect of his direct holding of Ordinary Shares and has committed to acquire 50,000 shares within the Firm Placing.

Dr. Ian Rutter O.B.E. has irrevocably undertaken to apply for his full Basic Entitlement of 4,278 Open Offer Shares and has committed to acquire 9,000 shares within the Firm Placing.

Alun Jones has irrevocably undertaken to apply for his full Basic Entitlement, of 9,000 Open Offer Shares and has committed to acquire 11,000 shares within the Firm Placing.

Phil Holland has committed to acquire 30,000 shares within the Firm Placing.

Mark Creedy has irrevocably undertaken to apply for his Basic Entitlement of 4,800 Open Offer Shares.

Steven Owen has irrevocably undertaken to apply for his full Basic Entitlement of 3,708 Open Offer Shares and has committed to acquire 12,000 shares within the Firm Placing.

In addition, each of the Directors has irrevocably undertaken to vote in favour of all of the Resolutions in respect of his own direct holding to the extent that he has any such holding, and procure that those parties connected with him will vote in favour of all of the Resolutions in respect of their holdings, which together amount to 16,799,382 Ordinary Shares representing approximately 3.76 per cent. of the Ordinary Shares in issue as at 21 March 2016 (being the latest practicable date prior to the publication of this announcement).

Recommendation

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

Accordingly, the Board recommends unanimously that Shareholders vote in favour of the Resolutions, as each of the Directors has irrevocably undertaken to do in respect of their own beneficial holding, to the extent that they have any such holding, which together amount to 16,799,382 Ordinary Shares, representing approximately 3.76 per cent. of the Ordinary Shares in issue as at 21 March 2016.

Shareholders should also be aware that if the Resolutions to be proposed at the General Meeting are not passed, the Capital Raising will lapse.

It is anticipated that a Prospectus providing further details of the Firm Placing and Placing, Open Offer and Offer for Subscription and convening the General Meeting will be published today and posted to Shareholders and will also be made available on the Company's website www.phpgroup.co.uk. Copies of the Prospectus will be available from the registered office of PHP at 5^th Floor, Greener House, 66-68 Haymarket, London SW1Y 4RF. The Prospectus will also be available free of charge during normal business hours on any weekday (except Saturdays, Sundays and public holidays) from the date of its publication until Admission at the offices of Nabarro LLP, 125 London Wall, London EC2Y 5AL.

APPENDIX 1

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

Admission	one or more admissions of the New Shares issued pursuant to the Capital Raising to the Official List becoming effective in accordance with the Listing Rules and the admission of such shares to trading on the premium segment of the  London Stock Exchange's main market for listed securities becoming effective in accordance with the Admission and Disclosure Standards
Admission and Disclosure Standards	the "Admission and Disclosure Standards" of the London Stock Exchange containing, among other things, the admission requirements to be observed by companies seeking admission to trading on the London Stock Exchange's main market for listed securities
Application Form	the application form accompanying the Prospectus on which Qualifying Non-CREST Shareholders may apply for Open Offer Shares under the Open Offer (including under the Excess Application Facility)
Articles	the articles of association of the Company
Basic Entitlements	the pro rata entitlement of Qualifying Shareholders to subscribe for 1 Open Offer Share for every 10 Existing Ordinary Shares registered in their name as at the Record Date
Board	the Directors of PHP
Bookrunners	means Numis and/or Peel Hunt, as applicable;
Business Day	a day (other than a Saturday, Sunday or public holiday) on which banks are generally open for business in the City of London for the transaction of normal banking business
Capital Raising	the Firm Placing and the Placing, Open Offer and the Offer for Subscription
Capital Raising Shares	all New Shares to be issued pursuant to the Capital Raising
certificated or in certificated form		in relation to a share or other security, a share or other security which is not in uncertificated form
Closing Price		the closing middle market quotation as derived from the Daily Official List of the London Stock Exchange on a particular day
Code		the US Internal Revenue Code of 1986, as amended
Companies Act		the Companies Act 2006 as amended
Corporate Governance Code		the UK Corporate Governance Code published in September 2014 by the Financial Reporting Council
CPI		Consumer Price Index
CREST		the relevant system, as defined in the CREST Regulations (in respect of which Euroclear is the operator as defined in the CREST Regulations)
CREST Member		a person who has been admitted to Euroclear as a system member (as defined in the CREST Regulations)
CREST Regulations or Regulations		the Uncertificated Securities Regulations 2001 (SI 2001 No. 01/378), as amended
Daily Official List		the daily record setting out the prices of all trades in shares and other securities conducted on the London Stock Exchange
Directors		the executive director and non-executive directors of the Company
Disclosure and Transparency Rules		the rules relating to the disclosure of information made in accordance with section 73A(3) of the FSMA
ERISA		the US Employee Retirement Income Security Act of 1974, as amended
ERISA Entity		any person that is: (i) an "employee benefit plan" as defined in Section 3(3) of ERISA that is subject to Title 1 of ERISA; (ii) a "plan" as defined in Section 4975 of the Code, including an individual retirement account or other arrangement that is subject to Section 4975 of the Code; or (iii) an entity which is deemed to hold the assets of any of the foregoing types of plans, accounts or arrangements that is subject to Title 1 of ERISA or Section 4975 of the Code; or any governmental, church, non U.S. or other employee benefit plan that is subject to any federal, state, local or non U.S. law that is substantially similar to the provisions of Title I of ERISA or Section 4975 of the Code whose purchase, holding, and disposition of the New Shares could constitute or result in a non-exempt violation of any such substantially similar law
EU or European Union		the European Union
Euroclear		Euroclear & Ireland Limited, the operator of CREST
Excess Application Facility		the arrangement pursuant to which Qualifying Shareholders may apply for additional Open Offer Shares in excess of their Basic Entitlements in accordance with the terms and conditions of the Open Offer
Excess CREST Open Offer Entitlements		in respect of each Qualifying CREST Shareholder, the entitlement (in addition to their basic entitlement) to apply for Existing Ordinary Shares pursuant to the Excess Application Facility
Excess Shares		Open Offer Shares applied for by Qualifying Shareholders under the Excess Application Facility
Excluded Territories		Australia, Japan, New Zealand and South Africa and any other jurisdiction where the extension or availability of the Capital Raising (and any other transaction contemplated thereby) would breach any applicable law or regulation
ex-entitlement date		the date on which the Ordinary Shares trade ex-entitlement to participate in the Open Offer, expected to be 22 March 2016
Existing Ordinary Shares		the 446,627,017 Ordinary Shares in issue as at the date of this announcement
Financial Conduct Authority or FCA		the Financial Conduct Authority of the United Kingdom
Firm Placees		any persons who have agreed to subscribe for Firm Placed Shares pursuant to the Firm Placing
Firm Placed Shares		the 60,000,000 new Ordinary Shares which are to be allocated pursuant to the Firm Placing
Firm Placing		the conditional placing by Numis and Peel Hunt on behalf of the Company of the Firm Placed Shares pursuant to the Placing Agreement
Form of Proxy		the form of proxy for use at the General Meeting
FPO		Financial Services and Markets Act 2000 (Financial Promotion) Order 2005
FSMA		the Financial Services and Markets Act 2000, as amended
General Meeting		the general meeting of PHP to be held at 10.00 a.m. on 13 April 2016, notice of which is set out in Part 10 of the Prospectus
GP		General Practitioner
HSE		Health Service Executive in Ireland
Issue		the issue of New Shares pursuant to the Capital Raising
Issue Price		100 pence per New Share
Listing Rules		the Listing Rules made by the FCA under Part VI of FSMA
London Stock Exchange		London Stock Exchange PLC
LTV		loan to value
Maximum Excess Application Number		the maximum amount of New Shares to be issued under the Excess Application Facility
Member State		a sovereign state which is a member of the European Union
New Shares		the Ordinary Shares to be issued under the terms set out in the Prospectus
Nexus		Nexus Tradeco Limited of Greener House, 66-68 Haymarket, London SW1Y 4RF
NHS		the National Health Service
Notice of General Meeting		the notice of the General Meeting contained in Part 10 of the Prospectus
Numis		Numis Securities Limited
Offer for Subscription		the offer for subscription to the public in the UK of the New Shares on the terms set out in the Prospectus and (where applicable) the Subscription Form
Official List		the Official List of the Financial Conduct Authority pursuant to Part VI of FSMA
Open Offer		the conditional invitation to Qualifying Shareholders to subscribe for the Open Offer Shares at the Issue Price on the terms and subject to the conditions set out in the Prospectus and in the case of Qualifying Non-CREST Shareholders only, the Application Form
Open Offer Shares		means the New Shares being offered in aggregate pursuant to the Open Offer together, where the context requires, with the Excess Application Facility
Ordinary Shares or Shares		ordinary shares of 12.5 pence each in the share capital of the Company
Overseas Shareholders		Shareholders with registered addresses outside the United Kingdom or who are citizens or residents of countries outside the United Kingdom
Peel Hunt		Peel Hunt LLP
PHP or the Company		Primary Health Properties PLC, a public limited company incorporated in England and Wales with registered number 03033634
PHP Group or Group		the Company and each of its subsidiaries and subsidiary undertakings from time to time
Placed Shares		the New Shares which are the subject of the Placing
Placees		any persons who have agreed to subscribe for Placed Shares
Placing		the conditional placing by Numis and Peel Hunt on behalf of the Company of the Placed Shares pursuant to the Placing Agreement
Placing Agreement		the placing agreement dated 22 March 2016 between the Company, Numis and Peel Hunt relating to the Capital Raising and further described in paragraph 15.1 of Part 7 of the Prospectus
Pounds Sterling or £		the lawful currency of the United Kingdom
PPP		Prime Public Partnership (Holdings) Limited, a company incorporated in England and Wales with company number 08304612 (now named PHP Primary Properties (Haymarket) Limited), whose registered address is at 5th Floor, Greener House, 66-68 Haymarket, London SW1Y 4RF
Prospective Directive		the Prospectus Directive (Directive 2003/71/EC)
Prospectus		document dated 22 March 2016 comprising a combined prospectus and notice of general meeting
Prospectus Rules		the Prospectus Rules published by the FCA under Section 73A of FSMA
Qualified Institutional Buyer or QIB		a "qualified institutional buyer" as defined by Rule 144A(a)(1) or under the US Securities Act
Qualifying CREST Shareholders		Qualifying Shareholders holding Ordinary Shares in uncertificated form in CREST at close of business on the Record Date
Qualifying Non-CREST Shareholders		Qualifying Shareholders holding Ordinary Shares in certificated form at close of business on the Record Date
Qualifying Shareholders		holders of Ordinary Shares on the register of members of the Company at the Record Date with the exclusion (subject to certain exemptions) of Overseas Shareholders
Record Date		close of business on 18 March 2016
Regulation S		means Regulation S under the US Securities Act
Regulatory Information Service		one of the regulatory information services authorised by the Financial Conduct Authority to receive, process and disseminate regulatory information in respect of listed companies
Registrars or Receiving Agent or Equiniti		Equiniti Limited
Regulation D		Regulation D under the US Securities Act
REIT		Real Estate Investment Trust
Resolutions		the resolutions to be proposed at the General Meeting set out in the Notice of General Meeting
RPI		retail price index
Shareholder		a holder of Ordinary Shares from time to time
Share Sub division		the sub division of each 50p Ordinary Share into four Ordinary Shares, which became effective at 8.00 a.m. on 12 November 2015
stock account		an account within a member account in CREST to which a holding of a particular share or other security in CREST is credited
Subscription Entitlement		in respect of each CREST Subscription Applicant (as defined in the Prospectus) the entitlement to apply for New Shares pursuant to the Offer for Subscription through submission of a USE instruction in CREST
Subscription Form		the application form to be included in Appendix 4 of the Prospectus for use in connection with the Offer for Subscription
uncertificated or in uncertificated form		recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST
United Kingdom or UK		the United Kingdom of Great Britain and Northern Ireland
US Securities Act		the United States Securities Act 1933, as amended
United States or US		the United States of America, its territories and possessions, any state of the United States and the District of Columbia.

APPENDIX 2

TERMS AND CONDITIONS OF THE FIRM PLACING AND THE PLACING

1             eLIGIBLE pARTICIPANTS

Members of the public are not eligible to take part in the Firm Placing or the Placing. This appendix and the terms and conditions set out herein are for information purposes only and are directed only at:

a)            persons in member states of the European Economic Area who are qualified placees as defined in section 86(7) of the FSMA, as amended ("Qualified Placees"), being persons falling within the meaning of Article 2(1)(e) of the Prospectus Directive including any relevant implementing directive measure in any member state;

b)            in the United Kingdom, Qualified Placees who are persons who:

(i)         fall within Article 19(5) of the FPO;

(ii)        fall within Article 49(2)(a) to (d) (High Net Worth Companies, Unincorporated Associations, etc) or the FPO; 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 these terms and conditions must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which these terms and conditions relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.

Furthermore, the Firm Placed Shares and the Placed Shares may not be offered or sold in the United States absent (A) registration under the US Securities Act or (B) an available exemption from the registration requirements under the US Securities Act. The Firm Placed Shares and the Placed Shares have not been, and will not be, registered under the US Securities Act and will be offered only (A) to investors located outside of the United States in "offshore transactions" as defined in and in accordance with Regulation S, or (B) within the United States to a limited number of persons that are reasonably believed to be QIBs that are not ERISA Entities pursuant to an exemption from the registration requirements under the US Securities Act in a transaction not involving any public offering.

2             Introduction

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

Upon being notified of its allocation of Firm Placed Shares under the Firm Placing and/or Placed Shares under the Placing, a Placee shall, subject to the provisions of paragraph ‎7 of this appendix with respect to the Placed Shares, be contractually committed to acquire the number of Firm Placed Shares and/or Placed Shares allocated to them at the Issue Price and to the fullest extent permitted by law, will be deemed to have agreed not to exercise any rights to rescind or terminate or otherwise withdraw from such commitment. Dealing may not begin before any notification is made.

Neither this announcement nor the Firm Placed Shares and Placed Shares have been or will be registered under the US Securities Act, or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within the United States except pursuant to an applicable exemption from or in a transaction not subject to the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States.

Accordingly, the Company is not making the Firm Placing and Placing into the United States unless an exemption from the registration requirements of the US Securities Act is available and, subject to certain exceptions, this announcement (including this appendix) will not constitute an offer or an invitation to apply for or an offer or an invitation to acquire any Firm Placed Shares and Placed Shares in the United States. All persons applying for Firm Placed Shares and/or Placed Shares and wishing to hold such Firm Placed Shares and/or Placed Shares in registered form must provide an address for registration of the Firm Placed Shares and/or Placed Shares outside the United States.

Subject to certain exceptions, any person who applies for Firm Placed Shares and/or Placed Shares will be deemed to have declared, warranted and agreed that they are not, and that at the time of application they will not be, in the United States, or acting on a nondiscretionary basis for a person located within the United States.

The Company reserves the right to treat as invalid any application for Firm Placed Shares and/or Placed Shares or which does not make a warranty to the effect that the person applying for Firm Placed Shares and/or Placed Shares does not have a registered address and is not otherwise located in the United States and is not applying for Firm Placed Shares and/or Placed Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of the Firm Placed Shares and/or Placed Shares in the United States or where the Company believes application for such Firm Placed Shares and/or Placed Shares may infringe applicable legal or regulatory requirements.

In addition, until 40 days after the commencement of the Firm Placing and Placing, an offer, sale or transfer of the Firm Placed Shares and/or Placed Shares within the United States by a dealer (whether or not participating in the Firm Placing and/or Placing) may violate the registration requirements of the US Securities Act.

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

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

a)            the Resolutions being passed at the General Meeting;

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

c)            Admission becoming effective by not later than 8.00 a.m. (London time) on 14 April 2016 (or such later time and/or date as the Company, Numis and Peel Hunt may agree (being no later than 28 April 2016) in accordance with the terms of the Placing Agreement).

Subject to the above conditions, a Placee agrees to become a Shareholder and agrees to acquire Firm Placed Shares and/or Placed Shares (as applicable) at the Issue Price. The number of Firm Placed Shares issued to such Placee under the Firm Placing and/or Placed Shares issued to such Placee under the Placing (as applicable) shall be in accordance with the arrangements described above, subject to the provisions of paragraph ‎7 of this appendix with respect to the Placed Shares.

The commitments of a Non-Firm Placee to subscribe for the number of Placed Shares allotted to them is subject to the right of the Company to clawback any or all of such Placed Shares in order to satisfy valid applications by Qualifying Shareholders under the Open Offer or the Offer for Subscription.  The number of Placed Shares to be clawed back from Non-Firm Placees will be calculated pro rata to each Non-Firm Placees' commitment to subscribe for Placed Shares.

The Company has undertaken that the Firm Placed Shares and the Placed Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares and will have the same rights and restrictions as each Existing Ordinary Share, including in respect of any dividends or distributions declared in respect of the New Shares following Admission.  The Firm Placed Shares and the Placed Shares will not qualify for the dividend to be declared on or about 31 March 2016 payable to Shareholders on the Company's register as at on or about 8 April 2016.

4             Payment for Firm Placed Shares and/or Placed Shares

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

5             Representations and Warranties

By receiving this announcement, each Placee and, in the case of paragraph ‎5‎cc) of this appendix, any person confirming his agreement to subscribe for Firm Placed Shares and/or Placed Shares on behalf of a Placee or authorising the Bookrunners to notify a Placee's name to the Registrars, is deemed to acknowledge, agree, undertake, represent and warrant to each of the Bookrunners, the Registrars and the Company that:

a)            the Placee has read this announcement, including this appendix in its entirety and acknowledges that its participation in the Firm Placing and/or the Placing (as applicable) shall be made solely on the terms and subject to the conditions set out in this appendix, the Placing Agreement and the Articles. Such Placee agrees that these this appendix and the terms and conditions contained herein and the contract note issued by the Bookrunners to such Placee represents the whole and only agreement between the Placee, the Bookrunners and the Company in relation to the Placee's participation in the Firm Placing and/or the Placing (as applicable) and supersedes any previous agreement between any of such parties in relation to such participation. Accordingly, all other terms, conditions, representations, warranties and other statements which would otherwise be implied (by law or otherwise) shall not form part of this appendix and the terms and conditions contained herein. Such Placee agrees that none of the Bookrunners nor any of their officers or directors will have any liability for any such other information or representation and irrevocably and unconditionally waives any rights it may have in respect of any such other information or representation;

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

c)            neither the Bookrunners nor any person affiliated with the Bookrunners or acting on their behalf is responsible for 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 or any member of the Group and will not be liable for any decision by a Placee to participate in the Firm Placing and/or the Placing based on any information, representation or statement contained in this announcement or otherwise;

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

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

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

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

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

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

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

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

l)             all actions, conditions and things required to be taken, fulfilled and done (including the obtaining of necessary consents) in order: (i) to enable the Placee to exercise its rights and perform and comply with its obligations to acquire the Firm Placed Shares under the Firm Placing and/or Placed Shares under the Placing; and (ii) to ensure that those obligations are legally binding and enforceable, have been taken, fulfilled and done. The Placee's exercise of its rights and/or performance under, or compliance with its obligations under the Firm Placing and/or Placing, does not and will not violate: (a) its constitutive documents; or (b) any agreement to which the Placee is a party or which is binding on the Placee or its assets;

m)           the Firm Placed Shares and/or Placed Shares may not be offered or sold in the United States absent (i) registration under the US Securities Act or (ii) an available exemption from the registration requirements under the US Securities Act. The Firm Placed Shares and the Placed Shares have not been, and will not be, registered under the US Securities Act and will not be offered to the public in the United States;

n)            the Placee is, and at the time the Firm Placed Shares and/or Placed Shares are acquired will be, either:

(i)         located outside of the United States and eligible to participate in "offshore transaction" as defined in and in accordance with Regulation S; or

(ii)        located within the United States and

(A)       is a QIB that is acquiring the Firm Placed Shares and/or Placed Shares in a transaction that is exempt from the registration requirements under the US Securities Act for its own account (or for the account of a QIB as to which it has sole investment discretion);

(B)       is not an ERISA Entity; and

(C)       has duly executed an investor letter in a form provided to it and delivered the same to Peel Hunt and/or Numis or their respective affiliates;

o)            in the case of investors located in Canada (Alberta, British Columbia, Ontario and Quebec only):

(i)         the Placee is an accredited investor, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and a permitted client, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations;

(ii)        the Placee acknowledges that it has received notice that securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this offering document (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the Placee within the time limit prescribed by the securities legislation of the purchaser's province or territory and that the Placee should refer to any applicable provisions of the securities legislation of the Placee's province or territory for particulars of these rights or consult with a legal advisor;

(iii)        the Placee further acknowledges that it has received notice that pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts ("NI 33-105"), the Bookrunners, to the extent applicable, are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with the offering;

(iv)       by purchasing the New Shares, the Placee is deemed to have acknowledged and consented to disclosure regarding their purchase of the securities that may be required to be provided to the applicable Canadian securities regulators; and

(v)        upon receipt of this announcement including this appendix, the Placee hereby confirms that it has expressly requested that all documents evidencing or relating in any way to the sale of the securities described herein (including for greater certainty any purchase confirmation or any notice) be drawn up in the English language only. Par la réception de ce document, chaque investisseur canadien confirme par les présentes qu'il a expressément exigé que tous les documents faisant foi ou se rapportant de quelque manière que ce soit à la vente des valeurs mobilières décrites aux présentes (incluant, pour plus de certitude, toute confirmation d'achat ou tout avis) soient rédigés en anglais seulement;

p)            if it is acquiring the Firm Placed Shares and/or Placed Shares for the account of one or more other persons, it has full power and authority to make the representations, warranties, agreements and acknowledgements herein on behalf of each such account;

q)            the Company, and any registrar or other agent of the Company, will not be required to accept the registration of transfer of any Firm Placed Shares and/or Placed Shares acquired by the Placee, except upon presentation of evidence satisfactory to the Company that the foregoing restrictions on transfer have been complied with;

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

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

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

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

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

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

x)            the Placee is (a) a person falling within Article 19(5) of the FPO or (b) a person falling within Article 49(2)(a) to (d) of the FPO and undertakes that it will acquire, hold, manage or dispose of any Firm Placed Shares or Placed Shares (as applicable) that are allocated to it for the purposes of its business or (c) a person to whom this announcement may otherwise be lawfully communicated;

y)            if the Placee is in the EEA, the person is a "Professional Client/Eligible Counterparty" within the meaning of Annex II/Article 24 (2) of MiFID and is not participating in the Firm Placing and/or Placing on behalf of persons in the EEA other than professional clients or persons in the UK and other Member States (where equivalent legislation exists) for whom the Placee has authority to make decisions on a wholly discretionary basis;

z)            in the case of any Firm Placed Shares and/or Placed Shares acquired by the Placee as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive: (A) the Firm Placed Shares and/or Placed Shares acquired by the Placee in the Firm Placing and/or Placing have not been acquired on behalf of, nor have they been acquired with a view to their placing or resale to, persons in any relevant member state other than qualified Placees, as that term is defined in the Prospectus Directive, or in other circumstances falling within Article 3(2) of the Prospectus Directive and the prior consent of Numis and/or Peel Hunt has been given to the placing or resale; or (B) where Firm Placed Shares and/or Placed Shares have been acquired by the Placee on behalf of persons in any relevant Member State other than qualified Placees, the Firm Placing of those Firm Placed Shares and/or Placing of those Placed Shares to it is not treated under the Prospectus Directive as having been made to such persons;

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

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

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

dd)          the Placee is liable for any capital duty, 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 it or any other person on the acquisition by it of any Firm Placed Shares and/or Placed Shares or the agreement by it to acquire any Firm Placed Shares and/or Placed Shares;

ee)          the Placee irrevocably appoints any director of the Company, Numis or Peel Hunt as its agent for the purposes of executing and delivering to the Company and/or the Registrar any documents on its behalf necessary to enable it to be registered as the holder of any of the Firm Placed Shares and/or Placed Shares agreed to be taken up by it under the Firm Placing and/or Placing and otherwise to do all acts, matters and things as may be necessary for, or incidental to, its acquisition of any Firm Placed Shares and/or Placed Shares in the event of its failure so to do;

ff)           Numis and/or Peel Hunt may, in accordance with applicable legal and regulatory provisions, engage in transactions in relation to the Firm Placed Shares and/or Placed Shares and/or related instruments for their own account for the purpose of hedging their underwriting exposure or otherwise and, except as required by applicable law or regulation, Numis and/or Peel Hunt will not make any public disclosure in relation to such transactions; and

gg)          Peel Hunt and/or Numis and each of their respective affiliates, each acting as a Placee for its or their own account(s), may bid or subscribe for and/or purchase Firm Placed Shares and/or Placed Shares and, in that capacity, may retain, purchase, place to sell or otherwise deal for its or their own account(s) in the Firm Placed Shares and/or Placed Shares, any other securities of the Company or other related investments in connection with the Firm Placing and/or Placing or otherwise. Accordingly, references in this announcement including in this appendix to the Firm Placed Shares and/or Placed Shares being issued, subscribed, acquired or otherwise dealt with should be read as including any issue, subscription, acquisition or dealing by Peel Hunt, Numis and/or any of their respective affiliates, acting as a Placee for its or their own account(s). Neither Numis, Peel Hunt nor the Company intend to disclose the extent of any such investment or transaction otherwise than in accordance with any legal or regulatory obligation to do so.

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

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

6             Representations, warranties and selling and transfer restrictions relating to Placees located in the United States

a)            This announcement is not an offer of securities for sale in the United States.  The Firm Placed Shares and the Placed Shares have not been, and will not be, registered under the US Securities Act or with any securities regulatory authority of or under the applicable securities laws or regulations of any state or other jurisdiction of the United States and may not be offered or sold in the United States except in transactions exempt from, or not subject to, the registration requirements of the US Securities Act. The Firm Placed Shares and the Placed Shares may be offered and sold only (a) in the United States to a limited number of persons that are all reasonably believed to be QIBs that are not ERISA Entities in transactions exempt from, or not subject to, the registration requirements under the US Securities Act, and (b) outside the United States in "offshore transactions" within the meaning of, and in reliance on, Regulation S. In addition, until 40 days after the commencement of the Firm Placing and Placing, any offer or sale of the Firm Placed Shares and Placed Shares within the United States by any dealer (whether or not participating in the Firm Placing and Placing) may violate the registration requirements of the US Securities Act if such offer or sale is made otherwise than in accordance with Regulation S or another available exemption from registration under the US Securities Act.

b)            Each purchaser of Firm Placed Shares and the Placed Shares within the United States, by accepting delivery of this announcement, will be deemed to have acknowledged, agreed, undertaken, represented and warranted that it has received a copy of this announcement and such other information as it deems necessary to make an investment decision and that:

(i)         the Firm Placed Shares and Placed Shares are being offered and sold in a transaction not involving a public offering of securities in the United States, and the Firm Placed Shares and Placed Shares have not been and will not be registered under the US Securities Act or with any state or other jurisdiction of the United States, nor approved or disapproved by the SEC, any state securities commission in the United States or any other United States regulatory authority and agree not to reoffer, resell, pledge or otherwise transfer the Firm Placed Shares and Placed Shares except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and otherwise in accordance with any applicable securities laws of any state or jurisdiction of the United States. The Firm Placed Shares and the Placed Shares have not been and will not be registered under the securities legislation of, or with any securities regulatory authority of, any other Excluded Territory;

(ii)        the Placee is, and at the time the Firm Placed Shares and/or Placed Shares are acquired will be, either (a) located outside of the United States and eligible to participate in an "offshore transaction" as defined in and in accordance with Regulation S, or (b) located within the United States and is a QIB that is not an ERISA Entity that is acquiring the Firm Placed Shares and/or Placed Shares in a transaction that is exempt from the registration requirements under the US Securities Act for its own account (or for the account of a QIB that is not an ERISA Entity as to which it has sole investment discretion) and has duly executed an investor letter in a form provided to it and delivered the same to Peel Hunt and/or Numis or their respective affiliates;

(iii)        the Placee is not acquiring the Firm Placed Shares and/or Placed Shares as a result of any "directed selling efforts" as defined in Regulation S or as a result of any form of general solicitation or general advertising (within the meaning of Rule 502(c) of Regulation D under the US Securities Act);

(iv)       the Placee is acquiring the Firm Placed Shares and/or Placed Shares for investment purposes only and not with a view to any resale, distribution or other disposition of the Firm Placed Shares and/or Placed Shares in violation of the US Securities Act or any other United States federal or applicable state securities laws;

(v)        the Placee invests in or purchases securities similar to the Firm Placed Shares and/or Placed Shares in the normal course of its business and it has such knowledge, skill and experience in financial, and business and investment matters as to be capable of evaluating the merits and risks of an investment in the Firm Placed Shares and/or Placed Shares;

(vi)       with the assistance of its own professional advisers, to the extent that the Placee, as the case may be, deemed appropriate, the Placee has made its own legal, tax, accounting, and financial evaluation of the merits and risks of an investment in the Firm Placed Shares and/or Placed Shares and the consequences of investing in the Firm Placed Shares and Placed Shares and conducted its own investigation with respect to the Company and the Firm Placed Shares and/or Placed Shares, and the Placee has concluded that an investment in the Firm Placed Shares and/or Placed Shares is suitable for it or, where the Placee is not acting as principal, for any beneficial owner of the Firm Placed Shares and/or Placed Shares, in light of each such person's own circumstances and financial condition and based upon each such person's investment objectives and financial requirements;

(vii)       the Placee or, where the Placee is not acting as principal, any beneficial owner of the Firm Placed Shares and/or Placed Shares, is able to bear the economic risk of an investment in the Firm Placed Shares and/or Placed Shares for an indefinite period and the loss of its entire investment in the Firm Placed Shares and/or Placed Shares;

(viii)      it understands that the Firm Placed Shares and the Placed Shares are being offered and sold in the United States only in transactions not involving any public offering within the meaning of the US Securities Act and that the Firm Placed Shares and the Placed Shares have not been and will not be registered under the US Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered, sold, pledged or otherwise transferred except (i) in an offshore transaction in accordance with Rule 903 or Rule 904 of Regulation S; (iii) pursuant to an exemption from registration under the US Securities Act provided by Rule 144 thereunder (if available); or (iv) pursuant to an effective registration statement under the US Securities Act, in each case in accordance with any applicable securities laws of any state or other jurisdiction of the United States.  It further (A) understands that the Firm Placed Shares and the Placed Shares may not be deposited into any unrestricted American depositary receipt facility in respect of the Firm Placed Shares and the Placed Shares established or maintained by a depositary bank; (B) acknowledges that the Firm Placed Shares and the Placed Shares (whether in physical certificated form or in uncertificated form held in CREST) are "restricted securities" within the meaning of Rule 144(a)(3) under the US Securities Act and that no representation is made as to the availability of the exemption provided by Rule 144 or any other exemption under the US Securities Act or any US state securities laws for resales of the Firm Placed Shares and the Placed Shares; and (C) understands that the Company may not recognise any offer, sale, resale, pledge or other transfer of the Firm Placed Shares and the Placed Shares made other than in compliance with the above-stated restrictions;

(ix)       it understands that the Firm Placed Shares and the Placed Shares (to the extent they are in certificated form), unless otherwise determined by the Company in accordance with applicable law, will bear a legend substantially to the following effect:

"THE ORDINARY SHARES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATESSECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR IN ANOTHER TRANSACTION EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF, THE UNITED STATES. IN ADDITION, THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED TO ANY PERSON USING THE ASSETS OF AN ERISA ENTITY. FOR PURPOSES OF THIS LEGEND, AN "ERISA ENTITY" IS ANY PERSON THAT IS: (1) AN "EMPLOYEE BENEFIT PLAN" AS DEFINED IN SECTION 3(3) OF THE UNITED STATES EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") THAT IS SUBJECT TO TITLE I OF ERISA; OR (2) A "PLAN" AS DEFINED IN SECTION 4975 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), INCLUDING AN INDIVIDUAL RETIREMENT ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE CODE; OR (3) AN ENTITY WHICH IS DEEMED TO HOLD THE ASSETS OF ANY OF THE FOREGOING TYPES OF PLANS, ACCOUNTS OR ARRANGEMENTS THAT IS SUBJECT TO TITLE I OF ERISA OR SECTION 4975 OF THE CODE; OR (4) A

GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER EMPLOYEE BENEFIT PLAN

THAT IS SUBJECT TO ANY FEDERAL, STATE, LOCAL OR NON-U.S. LAW THAT IS SUBSTANTIALLY SIMILAR TO THE PROVISIONS OF TITLE I OF ERISA OR SECTION 4975 OF THE CODE WHOSE PURCHASE, HOLDING, AND DISPOSITION OF THE NEW SHARES COULD CONSTITUTE OR RESULT IN A NON-EXEMPT VIOLATION OF ANY SUCH SUBSTANTIALLY SIMILAR LAW.

NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE

EXEMPTION PROVIDED BY RULE 144 OR ANY OTHER EXEMPTION UNDER

THE SECURITIES ACT OR ANY US STATE SECURITIES LAWS FOR RESALES

OF THE ORDINARY SHARES REPRESENTED HEREBY. THE ORDINARY

SHARES REPRESENTED HEREBY ARE "RESTRICTED SECURITIES" WITHIN

THE MEANING OF RULE 144(a)(3) UNDER THE SECURITIES ACT AND THEY

MAY NOT BE DEPOSITED INTO ANY UNRESTRICTED DEPOSITARY RECEIPT

FACILITY IN RESPECT OF THE ORDINARY SHARES ESTABLISHED OR MAINTAINED BY A DEPOSITARY BANK. EACH HOLDER, BY ITS ACCEPTANCE

OF ORDINARY SHARES, REPRESENTS THAT IT UNDERSTANDS AND AGREES TO THE FOREGOING RESTRICTIONS."; and

(x)        it represents that if, in the future, it offers, resells, pledges or otherwise transfers such Firm Placed Shares and/or the Placed Shares while they remain "restricted securities" within the meaning of Rule 144(a)(3) of the US Securities Act, it shall notify such subsequent transferee of the restrictions set out above.

The Company and the Bookrunners and their respective affiliates and others will rely on the truth and accuracy of the foregoing acknowledgments, representations and agreements.

7             Scale back of the Placed Shares

The number of Placed Shares to be issued under the Placing may be scaled back at the discretion of the Directors (in consultation with the Bookrunners) in favour of:

a)            the Excess Application Facility of the Open Offer; and/or

b)            the Offer for Subscription.

8             Miscellaneous

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

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

a)            if he is an individual, his nationality; or

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

All documents will be sent at the Placee's risk. They may be sent by post to such Placee at an address notified to the Bookrunners.

The provisions of these terms and conditions of the Firm Placing and/or the Placing may be waived, varied or modified as regards specific Placees or on a general basis by the Bookrunners.

The contract to subscribe for Firm Placed Shares and/ or Placed Shares (as applicable) and the appointments and authorities mentioned herein will be governed by, and construed in accordance with, the laws of England and Wales. For the exclusive benefit of the Bookrunners, the Company and the Registrars, each Placee irrevocably submits to the exclusive jurisdiction of the English courts in respect of these matters. This does not prevent an action being taken against a Placee in any other jurisdiction.

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

In addition to the provisions of paragraph ‎7 of this appendix, the Bookrunners and the Company each expressly reserve the right to modify the Firm Placing and/or the Placing (including, without limitation, its timetable and settlement) at any time before allocations of Firm Placed Shares under the Firm Placing and/or of Placed Shares under the Placing are determined.

 

END

 

 

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