Rathbone Brothers Plc : Issue of Equity

Rathbone Brothers Plc 

20 October 2016

THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) IS FOR INFORMATION PURPOSES ONLY AND SHALL NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY, SUBSCRIBE OR ACQUIRE ANY SECURITIES, INCLUDING THE PLACING SHARES, IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), AUSTRALIA, CANADA, JAPAN, JERSEY, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

Rathbone Brothers Plc ("Rathbones" or the "Company")

Outcome of the Board's review of the Company's defined benefit pension schemes
Placing of 4.6% to raise approximately £38.0m

Current trading
The Board of Rathbones has announced this morning the Company's trading update for the three months ended 30 September 2016 which demonstrates positive momentum in its business, with funds under management up 8.5% in the quarter, supported by favourable investment markets, net organic and acquired growth in Investment Management and strong net inflows in Unit Trusts. Further details of this trading update are contained in the separate announcement released this morning.

Pensions review
Further to the announcement made in the group's interim results in July, the Board has concluded its review of the Company's two defined benefit pension schemes (the "DB Schemes") and in particular the larger Rathbone 1987 Scheme (the "1987 Scheme") which remains open to future service accrual.

During 2016 the combined deficit in the DB Schemes has risen significantly, mainly driven by the valuation of scheme liabilities based on yields on long term corporate bonds. Those yields, which have been falling since the financial crisis, reduced significantly during the year and in particular since the outcome of the UK referendum on its membership of the EU on 23 June 2016.

Prior to this, the increase in the DB Schemes' liabilities was broadly matched by Company contributions and the growth of assets in the schemes. By way of illustration, the combined half-yearly IAS 19 funding position of the DB Schemes fluctuated between a £14m deficit and a £9m surplus between 2011 and 2015, and stood at a modest deficit of £4.5m at 31 December 2015.  The group's recent interim results showed a deficit of £32.0m as at 30 June 2016, and this rose further to £58.3m in the three months to 30 September 2016.

Changes in the level of the DB Schemes' deficits under IAS19 directly impact the group's regulatory capital resources and the Company's distributable reserves. An elevated deficit position also constrains the group's strategic flexibility. The Board has therefore resolved to take action to mitigate the situation.

In particular it has engaged with the 1987 Scheme's trustees and plans to consult with affected employees with respect to proposals to cap pensionable salaries and to close the scheme for future service accrual with effect from July 2017. Whilst the Laurence Keen Scheme (the "LK Scheme") is already closed to future accrual, the Board will also consult with those affected employees who are members of the LK Scheme with respect to a proposal to cap pensionable salaries with effect from July 2017. The consultation processes will last for a minimum period of 60 days although ultimate resolution may take longer. The Board will update the market on the progress of the consultation processes in due course.

Whilst implementing these proposed actions is expected to generate a higher regulatory capital requirement in the near-term, the Board expects this to be more than outweighed by the following key benefits over the life of the DB Schemes:

• a reduction in the combined IAS19 deficit of the DB Schemes and therefore the Company's exposure to its future volatility;
• a reduction in ongoing required contributions and service costs associated with the DB Schemes; and
• a reduction in the rate of growth of regulatory capital required to support the DB Schemes.

The Placing
The Board has therefore decided to undertake a placing of 4.6% of the issued share capital to raise gross proceeds of approximately £38.0 million primarily to fund the near-term capital requirement and also to provide a measure of additional financial flexibility. The funds raised will remain on the Company balance sheet to be applied as the Board sees fit. It is not anticipated that there will be any immediate incremental contribution to the DB Schemes.

The Board considers the proposed actions, including the Placing, to be appropriate to address the current situation and reduce future risks. Nonetheless it is possible that further actions will be required in the future as the Company will remain exposed to ongoing uncertainties related to the deficit position of the DB Schemes including (i) further possible corporate bond yield compression, (ii) the outcome of the engagement with the Trustees, the consultation with the DB Scheme members and the next triennial valuation of the DB Schemes (which will be carried out based on the financial position as at 31 December 2016); (iii) the resultant level of contributions required to address the deficit position in the future; and (iv) any regulatory capital implications associated with the above that might arise.

Commenting on the proposed actions, Philip Howell, Chief Executive Officer said:
'Rathbones has continued to perform well despite challenging industry conditions. We have conducted a review of our defined benefit pension arrangements in the context of the rising costs associated with our pension schemes. We concluded we needed to take the actions we have announced today and look forward to engaging successfully with the Trustees and our affected employees. The capital raising will enable us to progress these actions and support our continued future growth.'

Placing details
The Company intends to issue 2,224,210 Placing Shares pursuant to the Placing, which is being conducted by means of an accelerated bookbuild process. The price per Placing Share is 1,710 pence to raise approximately £37.0 million, net of expenses.

The Placing will be conducted by Peel Hunt and Canaccord Genuity in accordance with the terms and conditions set out in the Appendix to this announcement. The bookbuilding process will determine demand for and participation in the Placing. The bookbuilding will commence with immediate effect and the books are expected to close no later than 4.30pm on the date of this announcement. However, Peel Hunt and Canaccord Genuity reserve the right to close the books earlier or later without further notice. A further announcement will then be made following the completion of the bookbuilding process. The Placing is also subject to the conditions and termination rights set out in the Placing Agreement.

The Placing Shares, when issued, will be fully paid and will rank pari passu in all respects with the existing ordinary shares of the Company, including the right to receive all dividends and other distributions declared, made or paid after the date of issue. The Placing Shares represent an increase of approximately 4.6% of the current issued ordinary share capital of the Company.

The Placing does not require any further Shareholder approval. Application has been made for the Placing Shares to be admitted to the premium listing segment of the Official List of the FCA and to be admitted to trading on the main market for listed securities of the London Stock Exchange. Settlement for the Placing Shares and Admission are expected to take place on or before 8.00 a.m. on 25 October 2016. The Placing is conditional, among other things, upon Admission becoming effective.

Ends

20 October 2016

For further information contact:

Rathbone Brothers Plc
Tel: [phone]
email: [e-mail]

Philip Howell, Chief Executive
Paul Stockton, Finance Director
Shelly Chadda, Investor Relations Manager

Canaccord Genuity
Charles Williams
Andrew Buchanan
Kit Stephenson
Tel: [phone]

Peel Hunt
Adrian Haxby
Guy Wiehahn
Jock Maxwell-Macdonald
Tel: [phone]

Camarco
Ed Gascoigne-Pees
Tel: [phone]
email: [e-mail]

Notes to Editors:

About Rathbone Brothers Plc

Rathbone Brothers Plc ("Rathbones"), through its subsidiaries, is a leading provider of high-quality, personalised investment and wealth management services for private clients, charities and trustees. This includes discretionary investment management, unit trusts, financial planning, trust and company management and banking services.

Rathbones has over 1,000 staff in 15 UK locations and Jersey, and currently has its headquarters in Curzon Street, London.

About Rathbone Brothers Plc's Long Term Employee Benefits

Rathbones operates two defined benefit pension schemes: the Rathbone 1987 Scheme and the Laurence Keen Retirement Benefit Scheme. The Laurence Keen Scheme was closed to new entrants and future accrual with effect from 30 September 1999. The Rathbone 1987 Scheme remains open to future accrual but was closed to new entrants with effect from 31 March 2002. More information about the Group's long term employee benefits can be found in the Annual and Interim Report and Accounts.

Terms and Conditions of the Placing

IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE PLACING

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS DOCUMENT AND THE TERMS AND CONDITIONS SET OUT AND REFERRED TO HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT PERSONS SELECTED BY CANACCORD GENUITY AND/OR PEEL HUNT WHO ARE "INVESTMENT PROFESSIONALS" FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "FPO") OR "HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS ETC" FALLING WITHIN ARTICLE 49(2) OF THE FPO OR TO PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS DOCUMENT AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS.

THE PLACING SHARES THAT ARE THE SUBJECT OF THE PLACING ARE NOT BEING OFFERED OR SOLD TO ANY PERSON IN THE EUROPEAN UNION, OTHER THAN TO "QUALIFIED INVESTORS" AS DEFINED IN ARTICLE 2.1(E) OF DIRECTIVE 2003/71/EC (THE "PROSPECTUS DIRECTIVE"), WHICH INCLUDES LEGAL ENTITIES WHICH ARE REGULATED BY THE FCA OR ENTITIES WHICH ARE NOT SO REGULATED WHOSE CORPORATE PURPOSE IS SOLELY TO INVEST IN SECURITIES OR TO SUCH OTHER PERSONS AS ARE AGREED BY THE JOINT BOOKRUNNERS.

All offers of the Placing Shares will be made pursuant to an exemption under the Prospectus Directive from the requirement to produce a prospectus. This Announcement is being distributed and communicated to persons in the UK only in circumstances to which section 21(1) of FSMA does not apply.

The Placing Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") or under the securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold or delivered, directly or indirectly, in or into the United States or to, or for the account or benefit of, US Persons (as defined in Regulation S under the Securities Act). "United States" means the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia. No public offering of the Placing Shares is being made in the United States. Persons receiving this document (including custodians, nominees and trustees) must not forward, distribute, mail or otherwise transmit it in or into the United States or use the United States mails, directly or indirectly, in connection with the Placing.

This document does not constitute an offer to sell or issue or a solicitation of an offer to buy or subscribe for Placing Shares in any jurisdiction including, without limitation, the United States, Canada, Australia, the Republic of South Africa, Japan, or Jersey in which such offer or solicitation is or may be unlawful (a "Prohibited Jurisdiction"). This document and the information contained herein are not for publication or distribution, directly or indirectly, to persons in a Prohibited Jurisdiction unless permitted pursuant to an exemption under the relevant local law or regulation in any such jurisdiction.

The distribution of this document, the Placing and/or issue of the Placing Shares in certain jurisdictions may be restricted by law and/or regulation. No action has been taken by the Company, Canaccord Genuity, Peel Hunt or any of their respective Affiliates (as defined below) that would permit an offer of the Placing Shares or possession or distribution of this document or any other publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons receiving this document are required to inform themselves about and to observe any such restrictions.

Canaccord Genuity Limited and Peel Hunt LLP are regulated in the United Kingdom by the Financial Conduct Authority, are acting for the Company and for no one else in connection with the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Canaccord Genuity or Peel Hunt LLP (as appropriate) or for affording advice in relation to the Placing, or any other matters referred to herein.

By participating in the Placing, each person who is invited to and who chooses to participate in the Placing (a "Placee") by making an oral offer to take up Placing Shares is deemed to have read and understood this document in its entirety and to be making such offer on the terms and conditions contained herein, and to be providing the representations, warranties, undertakings, agreements and acknowledgements contained herein.

Details of the Placing Agreement and the Placing Shares
The Company has entered into the Placing Agreement with the Joint Bookrunners, under which the Joint Bookrunners have, subject to the terms set out therein, severally agreed to use their respective reasonable endeavours, as agents of the Company, to procure Placees for the Placing Shares to raise gross proceeds of approximately £38,033,991.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with each other and with the existing Ordinary Shares. The Placing Shares will be issued free of any encumbrance, lien or other security interest.

Application for listing and admission to trading
Application will be made for the Placing Shares to be admitted to the premium segment of the Official List of the FCA and to trading on the Main Market of the London Stock Exchange. It is expected that Admission will take place at 8:00 am on 25 October 2016 (or such later date as may be agreed between the Company and the Joint Bookrunners) and that dealings in the Placing Shares will commence at that time.

Bookbuild
The Joint Bookrunners will today commence the Bookbuild to determine demand for participation in the Placing by Placees. This Document gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.

Participation in, and principal terms of, the Placing
Prospective Placees have been identified and will be contacted by Canaccord Genuity or Peel Hunt. The Placing Price will be a single price of 1,710p per new Placing Share and will be payable by all Placees. The Placing is expected to close today. The Placing Price shall be payable to the Joint Bookrunners (as agents for the Company) by all Placees.

The Joint Bookrunners are acting as joint bookrunners, brokers and agents of the Company in connection with the Placing.  Each of Canaccord Genuity, Peel Hunt and their respective Affiliates (as defined below) is entitled to participate as a Placee.

Participation in the Placing will only be available to persons who may lawfully be, and are, invited by Canaccord Genuity and Peel Hunt to participate.

The Bookbuild will establish the allocation of the Placing Shares to the Placees. The allocation of Placing Shares among the Placees will be determined by the Joint Bookrunners in their absolute discretion following consultation with the Company.

To bid in the Bookbuild, Placees should communicate their bid by telephone to their usual sales contact at the relevant Joint Bookrunner.  Each bid should state the number of Placing Shares which a prospective Placee wishes to acquire. Bids may be scaled down by the Joint Bookrunners on the basis referred to below.

The Bookbuild is expected to close no later than 4.30 p.m. (London time) on 20 October 2016 but may be closed earlier or later at the discretion of the Joint Bookrunners.  The Joint Bookrunners may, in agreement with the Company, accept bids that are received after the Bookbuild has closed. The Company reserves the right to reduce the amount to be raised pursuant to the Placing, in agreement with the Joint Bookrunners. The total number of shares to be issued or transferred pursuant to the Placing (whether new ordinary shares or ordinary shares held in treasury by the Company, or a combination of the above) shall not exceed a number of shares equal to 4.6 per cent of the Company's existing issued share capital.

A bid to acquire Placing Shares, which has been communicated by a prospective Placee to a Joint Bookrunner which has not been withdrawn or revoked prior to publication of this document shall not be capable of withdrawal or revocation immediately following the publication of this document without the consent of the relevant Joint Bookrunner.

Each Placee's allocation will be determined by the Joint Bookrunners (after consultation with the Company) and will be confirmed orally by a Joint Bookrunner as soon as practicable following the close of the Bookbuild.   The oral confirmation of an allocation by a Joint Bookrunner will give rise to a legally binding commitment by the Placee concerned, in favour of the Joint Bookrunners and the Company, under which it agrees to acquire the number of Placing Shares allocated to it on the terms and subject to the conditions set out in this document and the Company's articles of association.

The Company will release the Placing Results Announcement following the close of the Bookbuild.

Each Placee's allocation and commitment will be evidenced by a contract note or trade confirmation issued to such Placee by a Joint Bookrunner. The terms of this document will be deemed incorporated therein.

The Joint Bookrunners may choose to accept bids, either in whole or in part, on the basis of allocations determined at its discretion with agreement of the Company) and may scale down any bids for this purpose on such basis as they may determine or be directed.  The Joint Bookrunners may also, notwithstanding the paragraphs above, (a) allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time and (b) allocate Placing Shares after the Bookbuild has closed to any person submitting a bid after that time.

A bid in the Bookbuild will be made on the terms and subject to the conditions in this document and will be legally binding on the Placee on behalf of which it is made and, except with the consent of the Joint Bookrunners, will not be capable of variation or revocation after the time at which it is submitted. Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to the Joint Bookrunners, to pay to it (or as it may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to acquire and the Company has agreed to allot and issue (or transfer out of treasury, as the case may be) to that Placee.

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

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

All obligations under the Bookbuild and Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Right to terminate under the Placing Agreement".

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

To the fullest extent permissible by law, neither Joint Bookrunner or any holding company thereof, nor any subsidiary, branch or affiliate of a Joint Bookrunner (each an "Affiliate") nor any person acting on behalf of any of the foregoing shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise).  In particular, neither Joint Bookrunner nor any Affiliate thereof nor any person acting on behalf of any such person shall have any liability to Placees (including, to the extent permissible by law, any fiduciary duties) in respect of their conduct of the Bookbuild or the Placing (or of such alternative method of effecting the Placing as the Joint Bookrunners and the Company may agree).  No commissions will be paid to Placees or directly by Placees in respect of any Placing Shares.

Conditions of the Placing
The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms.

The obligations of the Joint Bookrunners under the Placing Agreement are conditional, inter alia, on:

1. the Company fulfilling each of the conditions and complying with all of its obligations under the Placing Agreement;
    
2. the Warranties given by the Company being true, accurate and not misleading in any respect at the date of the Placing Agreement and since that date have remained true, accurate and not misleading in any material respect by reference to the facts and circumstances existing since that date;
    
3. the Company allotting the Placing Shares, prior to and conditional only on Admission, in accordance with the terms of the Placing Agreement;
    
4. the Joint Bookrunners receiving orders for all of the Placing Shares at a price per share of not less than the Placing Price; and
    
5. Admission occurring by no later than 8:00 a.m. on 25 October 2016 (or such later date as may be agreed between the Company and the Joint Bookrunners, not being later than 8 November 2016).

If (a) the conditions are not fulfilled (or to the extent permitted under the Placing Agreement waived by the Joint Bookrunners), or (b) the Placing Agreement is terminated in the circumstances specified below, the Placing will lapse and each Placee's rights and obligations hereunder shall cease and determine at such time and no claim may be made by a Placee in respect thereof. Neither Joint Bookrunner shall not have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision either Joint Bookrunner may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition in the Placing Agreement or in respect of the Placing generally.

The Joint Bookrunners and the Company may agree in writing to extend the time and/or date by which any of the Conditions are required to be fulfilled to no later than 3.00 p.m. on the Long Stop Date.

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

By participating in the Placing, each Placee agrees that its rights and obligations hereunder terminate only in the circumstances described above and under "Right to terminate under the Placing Agreement" below, and will not be capable of rescission or termination by the Placee.

Right to terminate under the Placing Agreement
The Placing Agreement may, at any time before Admission, be terminated on behalf of the Joint Bookrunners by giving notice to the Company if (inter alia):

a) any of the warranties contained in the Placing Agreement are not true and accurate or have become misleading in any material respect (or would not be true and accurate or would be misleading if they were repeated at any time before Admission) by reference to the facts existing from time to time; or

b) there is a material breach by the Company of any of its obligations under the Placing Agreement (to the extent such obligations fail to be performed prior to admission); or

c) there has been in the opinion of the Joint Bookrunners (acting in good faith), a material adverse change in the business of the Group or in the financial or trading position or prospects of the Group or the Company; or

d) the UKLA or the London Stock Exchange cancels or suspends trading in the Company's securities; or

e) there has occurred (A) any change, or development involving a prospective change, in national or international, financial, economic, political, industrial or market conditions or exchange rates or exchange controls, or any incident of terrorism or outbreak or escalation of hostilities or any declaration by the UK or the US or any member state of the EU of a national emergency or war or any other calamity or crisis; (B) or a suspension of trading in securities generally on the London Stock Exchange or New York Stock Exchange or trading is limited or minimum prices established on any such exchange; or (C) a declaration of a banking moratorium in London or by the US federal or New York State authorities or any material disruption to commercial banking or securities settlement or clearance services in the US or the UK, which, in each case in the opinion of the relevant Joint Bookrunner, acting in good faith, would or would be likely to have an adverse effect on the financial or trading position or the business or the prospects of the Group which is material in the context of the Group as a whole or which renders the Placing impracticable or inadvisable.

By participating in the Placing, each Placee agrees with the Joint Bookrunners that the exercise of any right of termination or other discretion by the Joint Bookrunners (or either of them) under the Placing Agreement shall be within the absolute discretion of the Joint Bookrunners and that the Joint Bookrunners need not make any reference to the Placee in this regard and that, to the fullest extent permitted by law, neither Joint Bookrunner shall have any liability whatsoever to the Placee in connection with any such exercise.

Upon such termination, the relevant Joint Bookrunner (if only one of the Joint Bookrunners terminates its obligations under the Placing Agreement or all of the parties to the Placing Agreement shall if both of the Joint Bookrunners terminate their obligations under the Placing Agreement) shall be released and discharged (except for any liability arising before or in relation to such termination) from their respective obligations under or pursuant to the Placing Agreement subject to certain exceptions.

No prospectus
No offering document or prospectus has been or will be prepared in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in this document and any information previously published by or on behalf of the Company by notification to a Regulatory Information Service (as defined in the Listing Rules). Each Placee, by accepting a participation in the Placing, agrees that the content of this document is exclusively the responsibility of the Company and confirms to the Joint Bookrunners and the Company that it has neither received nor relied on any information, representation, warranty or statement made by or on behalf of either Joint Bookrunner (other than the amount of the relevant Placing participation in the oral confirmation given to Placees and the trade confirmation referred to below), any of their respective Affiliates, any persons acting on their behalf or the Company  and neither Joint Bookrunner nor any of their Affiliates, nor any persons acting on their behalf, nor the Company will be liable for the decision of any Placee to participate in the Placing based on any other information, representation, warranty or statement which the Placee may have obtained or received (regardless of whether or not such information, representation, warranty or statement was given or made by or on behalf of any such persons). By participating in the Placing, each Placee acknowledges to and agrees with the Joint Bookrunners for themselves and as agents for the Company that, except in relation to the information contained in this document, it has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Registration and settlement
Settlement of transactions in the Placing Shares (ISIN GB0002148343) following Admission will take place within the CREST system, subject to certain exceptions. The Joint Bookrunners reserve the right to require settlement for and delivery of the Placing Shares to Placees by such other means as the Joint Bookrunners respectively deem necessary if delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this document or would not be consistent with the regulatory requirements in the Placee's jurisdiction. 

Each Placee allocated Placing Shares in the Placing will be sent a trade confirmation stating the number of Placing Shares allocated to it, the Placing Price, the aggregate amount owed by such Placee to Canaccord Genuity or Peel Hunt (as the case may be) and settlement instructions.  It is expected that such trade confirmation will be despatched on 20 October 2016 and that this will also be the trade date. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST or certificated settlement instructions which it has in place with Canaccord Genuity or Peel Hunt (as appropriate).

It is expected that settlement will be on 25 October 2016 on a T+3 basis in accordance with the instructions set out in the trade confirmation.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of 2 percentage points above the base rate of Barclays Bank Plc as determined by the Joint Bookrunners.

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

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

Insofar as Placing Shares are registered in the Placee's name or that of its nominee or in the name of any person for whom the Placee is contracting as agent or that of a nominee for such person, such Placing Shares will, subject as provided below, be so registered free from any liability to PTM levy, stamp duty or stamp duty reserve tax. If there are any circumstances in which any other stamp duty or stamp duty reserve tax is payable in respect of the issue of the Placing Shares, neither Canaccord Genuity, Peel Hunt, nor the Company shall be responsible for the payment thereof. Placees will not be entitled to receive any fee or commission in connection with the Placing.

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

1. represents and warrants that it has read and understood these Terms and Conditions in their entirety and acknowledges that its participation in the Placing will be governed by the terms of this document;
2. confirms that the exercise by the Joint Bookrunners of any right of termination or any right of waiver exercisable by the Joint Bookrunners contained in the Placing Agreement including, without limitation, the right to terminate the Placing Agreement, is within the absolute discretion of the Joint Bookrunners and the Joint Bookrunners will not have any liability to any Placee whatsoever in connection with any decision to exercise or not exercise any such rights;
3. acknowledges that no prospectus or offering document has been prepared in connection with the placing of the Placing Shares;
4. agrees to indemnify on an after-tax basis and hold harmless each of the Company, the Joint Bookruners, their respective Affiliates and any person acting on behalf of any such person from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this document and further agrees that the provisions of this document shall survive after completion of the Placing;
5. acknowledges that the new Placing Shares of the Company will be admitted to the premium segment of the Official List of the UK Listing Authority, and the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of such market (collectively, the "Exchange Information") and that the Placee is able to obtain or access the Exchange Information without undue difficulty;
6. acknowledges that neither of the Joint Bookrunners nor any of their respective Affiliates nor any person acting on behalf of any such person has provided, and will not provide it with any material or information regarding the Placing Shares or the Company; nor has it requested that the Joint Bookrunners nor any of their respective Affiliates or any person acting on behalf of any such person to provide it with any such material or information;
7. acknowledges that the content of this document is exclusively the responsibility of the Company and that neither the Joint Bookrunners nor any of their respective Affiliates nor any person acting on behalf of any such person will be responsible for or shall have any liability for any information, representation or statement relating to the Company contained in this document or any information previously published by or on behalf of the Company and neither the Joint Bookruners nor any of their respective Affiliates nor any person acting on behalf of any such person will be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this document or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing to subscribe for the Placing Shares is contained in this document and any Exchange Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares, and that it has relied on its own investigation with respect to the Placing Shares and the Company in connection with its decision to subscribe for the Placing Shares and acknowledges that it is not relying on any investigation that the Joint Bookruners, any of their respective Affiliates or any person acting on behalf of any such person may have conducted with respect to the Placing Shares or the Company and none of such persons has made any representations to it, express or implied, with respect thereto;
8. acknowledges that it has not relied on any information relating to the Company contained in any research reports prepared by the Joint Bookrunners, their respective Affiliates or any person acting on behalf of any such person and understands that (i) none of the Joint Bookrunners, any of their respective Affiliates nor any person acting on behalf of any such person has or shall have any liability for public information or any representation; (ii) none of the Joint Bookrunners, any of their respective Affiliates nor any person acting on behalf of any such person has or shall have any liability for any additional information that has otherwise been made available to such Placee, whether at the date of publication, the date of this document or otherwise; and that (iii) none of the Joint Bookrunners, any of their respective Affiliates nor any person acting on behalf of any such person makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of such information, whether at the date of publication, the date of this document or otherwise;
9. represents and warrants that (i) it is entitled to acquire the Placing Shares under the laws and regulations of all relevant jurisdictions which apply to it; (ii) it has fully observed such laws and regulations and obtained all such governmental and other guarantees and other consents and authorities which may be required thereunder and complied with all necessary formalities; (iii) it has all necessary capacity to commit to participation in the Placing and to perform its obligations in relation thereto and will honour such obligations; (iv) it has paid any issue, transfer or other taxes due in connection with its participation in any territory and (v) it has not taken any action which will or may result in the Company, the Joint Bookrunners, any of their respective Affiliates or any person acting on behalf of any such person being in breach of the legal and/or regulatory requirements of any territory in connection with the Placing;
10. represents and warrants that the issue to the Placee, or the person specified by the Placee for registration as holder, of Placing Shares will not give rise to a liability under any of sections 67, 70, 93 or 96 of the UK Finance Act 1986 (depositary receipts and clearance services) and that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer Placing Shares into a clearance system;
11. represents and warrants that it understands that the Placing Shares have not been and will not be registered under the Securities Act or under the securities laws of any state or other jurisdiction of the United States;
12. represents and warrants that neither it nor its Affiliates nor any person acting on its or their behalf have engaged or will engage in any "directed selling efforts" with respect to the Placing Shares;
13. it is not a US Person and is not acquiring the Placing Shares for the account or benefit of a US Person;
14. represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom prior to Admission except to "qualified investors" as defined in Article 2.1(e) of the Prospectus Directive;
15. represents and warrants that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which it is permitted to do so pursuant to section 21 of FSMA;
16. if it has received any confidential price sensitive information about the Company in advance of the Placing, it warrants that it has received such information within the marketing soundings regime provided for in article 11 of Regulation (EU) No. 596/2014 on market abuse (as amended) and associated delegated regulations ("MAR") and has not: (a) dealt in the securities of the Company; (b) encouraged or required another person to deal in the securities of the Company; or (c) disclosed such information to any person, prior to the information being made publicly available;
17. represents and warrants that it has complied and will comply with all applicable provisions of FSMA and MAR with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving the United Kingdom;
18. represents and warrants that it 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 Terrorism Act 2006, the Anti-terrorism Crime and Security Act 2001 and the Money Laundering Regulations (2007) (each as amended) (the "Regulations") and, 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;
19. represents and warrants that it is (i)(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 Placing Shares that are allocated to it for the purposes of its business or (ii) a person falling within Article 43 of the FPO, to the extent that article relates to the Company;
20. unless otherwise agreed by the Joint Bookrunners, represents and warrants that it is a qualified investor as defined in section 86(7) of FSMA, being a person falling within Article 2.1(e)(i), (ii) or (iii) of the Prospectus Directive;
21. undertakes that it (and any person acting on its behalf) will pay for the Placing Shares acquired by it in accordance with this document on the due time and date set out herein against delivery of such Placing Shares to it, failing which the relevant Placing Shares may be placed with other Placees or sold as the Joint Bookrunners may, in their absolute discretion, determine and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties due pursuant to the terms set out or referred to in this document) which may arise upon the sale of such Placee's Placing Shares on its behalf;
22. acknowledges that none of the Joint Bookrunners, any of their respective Affiliates nor any person acting on behalf of any such person 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 Placing, and acknowledges that neither of the Joint Bookrunners, any of their respective Affiliates nor any person acting on behalf of any such person has any duties or responsibilities to it for providing advice in relation to 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 Joint Bookrunners' individual or joint rights and obligations thereunder, including any right to waive or vary any condition or exercise any termination right contained therein;
23. undertakes that (i) the person whom it specifies for registration as holder of the Placing Shares will be (a) the Placee or (b) the Placee's nominee, as the case may be, (ii) neither the Joint Bookrunners nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement and (iii) the Placee and any person acting on its behalf agrees to acquire the Placing Shares on the basis that the Placing Shares will be allotted to the CREST stock account of either of the Joint Bookrunners which will hold them as settlement agent as nominee for the Placees until settlement in accordance with its standing settlement instructions with payment for the Placing Shares being made simultaneously upon receipt of the Placing Shares in the Placee's stock account on a delivery versus payment basis;
24. acknowledges that any agreements entered into by it pursuant to these terms and conditions shall be governed by and construed in accordance with the laws of England and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract;
25. acknowledges that it irrevocably appoints any director of the Joint Bookrunners as its agent for the purposes of executing and delivering to the Company and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares agreed to be taken up by it under the Placing;
26. represents and warrants that it is not a resident of any Prohibited Jurisdiction and acknowledges that the Placing Shares have not been and will not be registered nor will a prospectus be cleared in respect of the Placing Shares under the securities legislation of any Prohibited Jurisdictions and, subject to certain exceptions, may not be offered, sold, taken up, renounced, delivered or transferred, directly or indirectly, within any Prohibited Jurisdiction;
27. represents and warrants that any person who confirms to either of the Joint Bookrunners on behalf of a Placee an agreement to subscribe for Placing Shares and/or who authorises the Joint Bookrunners to notify the Placee's name to the Company's registrar, has authority to do so on behalf of the Placee;
28. acknowledges that the agreement to settle each Placee's acquisition of Placing Shares (and/or the acquisition of a person for whom it is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to an acquisition by it and/or such person direct from the Company of the Placing Shares in question. Such agreement assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer the Placing Shares into a clearance service. If there were any such arrangements, or the settlement related to other dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which none of the Company nor the Joint Bookrunners will be responsible. If this is the case, the Placee should take its own advice and notify the Joint Bookrunners accordingly;
29. acknowledges that the Placing Shares will be issued subject to the terms and conditions set out in this document;
30. acknowledges that when a Placee or any person acting on behalf of the Placee is dealing with either of the Joint Bookrunners, any money held in an account with the Joint 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 relevant rules and regulations of the FCA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from the Joint Bookrunners' money in accordance with the client money rules and will be used by the Joint Bookrunners in the course of their respective businesses; and the Placee will rank only as a general creditor of either of the Joint Bookrunners (as the case may be);
31. acknowledges and understands that the Company, the Joint Bookrunners and others will rely upon the truth and accuracy of the foregoing representations, warranties, agreements, undertakings and acknowledgements; and
32. acknowledges that the basis of allocation will be determined by the Joint Bookrunners at their absolute discretion. The right is reserved to reject in whole or in part and/or scale back any participation in the Placing.

The acknowledgements, agreements, undertakings, representations and warranties referred to above are given to the Company and each of the Joint Bookrunners  (for their own benefit and, where relevant, the benefit of their respective Affiliates and any person acting on  behalf of any such person), are irrevocable and will survive completion of the Placing.

No UK stamp duty or stamp duty reserve tax should be payable to the extent that the Placing Shares are issued or transferred (as the case may be) into CREST to, or to the nominee of, a Placee who holds those shares beneficially (and not as agent or nominee for any other person) within the CREST system and registered in the name of such Placee or such Placee's nominee.

Any arrangements to issue or transfer the Placing Shares into a depositary receipts system or a clearance service or to hold the Placing Shares as agent or nominee of a person to whom a depositary receipt may be issued or who will hold the Placing Shares in a clearance service, or any arrangements subsequently to transfer the Placing Shares, may give rise to stamp duty and/or stamp duty reserve tax, for which neither the Company nor the Joint Bookrunners will be responsible and the Placee to whom (or on behalf of whom, or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such stamp duty or stamp duty reserve tax undertakes to pay such stamp duty or stamp duty reserve tax forthwith and to indemnify on an after-tax basis and to hold harmless the Company and the Joint Bookrunners in the event that any of the Company and/or the Joint Bookrunners has incurred any such liability to stamp duty or stamp duty reserve tax.

In addition, Placees should note that they will be 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 them or any other person on the acquisition by them of any Placing Shares or the agreement by them to acquire any Placing Shares.

All times and dates in this document may be subject to amendment.  Either or both of the Joint Bookrunners shall notify the Placees and any person acting on behalf of the Placees of any such changes.

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

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

Each Placee may be asked to disclose in writing or orally to either of the Joint Bookrunners:

1. if he is an individual, his nationality; or
    
2. if he is a discretionary fund manager, the jurisdiction in which the funds are managed or owned.

Definitions

In this document, save where the context requires otherwise:

Admission	admission by the UKLA of the Placing Shares to the premium segment of the Official List by the making of an announcement in accordance with LR 3.2.7G of the Listing Rules and the admission of the Placing Shares to trading on the London Stock Exchange's main market for listed securities in accordance with the Admission and Disclosure Standards produced by the London Stock Exchange
Articles of Association	the articles of association of the Company
Board	the board of Directors
Bookbuild	the accelerated bookbuild process in relation to the Placing which will establish the allocation of Placing Shares to each Placee
Canaccord Genuity	Canaccord Genuity Limited
Company	Rathbone Brothers Plc
CREST	the relevant system (as defined in the CREST Regulations) of which Euroclear UK & Ireland is the Operator (as defined in the CREST Regulations)
Directors	the directors of the Company
FCA	the UK Financial Conduct Authority
FSMA	the Financial Services and Markets Act 2000 (as amended from time to time)
Group	the Company and its subsidiary undertakings
Joint Bookrunners	Canaccord Genuity and Peel Hunt
Listing Rules	the Listing Rules of the FCA (as amended from time to time)
London Stock Exchange	London Stock Exchange plc
Long Stop Date	8 November 2016
Official List	the official list of the UK Listing Authority
Ordinary Shares	ordinary shares of 5p each in the capital of the Company
Peel Hunt	Peel Hunt LLP
Placing	the placing of the Placing Shares by the Joint Bookrunners on behalf of the Company with existing institutional investors on the terms of the Placing Agreement and the Terms and Conditions set out in this document
Placing Agreement	the placing agreement dated the date of this announcement between the Company and the Joint Bookrunners in respect of the Placing
Placing Price	1,710p
Placing Shares	The 2,224,210 Ordinary Shares to be issued by the Company pursuant to the Placing
Placing Participation	a Placee's allocation in the Placing
Press Announcement	the press announcement in the agreed form giving details of the Placing to be released on the date of this Agreement
Shareholders	holders of Ordinary Shares
UKLA	the FCA acting in its capacity as competent authority for the purposes of FSMA

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This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Rathbone Brothers Plc via Globenewswire