Acquisition

RNS Number : 7480D

Workspace Group PLC

08 December 2009

 



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

Workspace Group PLC

("Workspace" or the "Company")

Acquisition of 50 per cent. of Workspace Glebe Limited ("Workspace Glebe"), currently a joint venture between Workspace and Glebe Two Limited ("Glebe Two") 

Placing of 101.5 million Ordinary Shares at 19.0 pence per share to raise £18.9 million (net of expenses)

Group Trading Update

Workspace Group PLC, London's flexible business space provider, is today pleased to announce the acquisition of the 50 per cent. interest in Workspace Glebe not already owned by Workspace, the amendment and restatement of Workspace Glebe's existing debt facilities and a proceeds sharing arrangement (the "Acquisition"), a conditional placing of 101.5 million ordinary shares in Workspace to part fund the Acquisition and a group trading update.

Highlights

• On completion Workspace will gain full ownership and control of a portfolio of commercial properties across London:

-     18 properties at 11 locations providing a total of 1.1 million sq. ft of lettable space
       across 34 acres of freehold land

      -     Cash rent roll as at 30 September 2009 of £6.0 million

      -     Occupancy as at 30 September 2009 of 73.6 per cent.

      -     Significant mixed use and expansion potential inherent in the portfolio

-     Initial consideration of £83 million equates to a capital cost of some £75 per sq. ft

• Initial Acquisition consideration of £83.0 million:

-     Cash payment of £15.0 million and revised and restated debt facility of £68.0 million

-     Arrangements in place for sharing proceeds from any future disposals once the debt
      has been repaid and Workspace has received its priority return 

-    Timing of disposals at Workspace's discretion

• Conditional placing of 101.5 million New Ordinary Shares (representing 9.7 per cent. of the issued ordinary share capital of the Company) to raise £18.9 million net of expenses

• New debt facility:

-    Existing debt reduced to £68.0 million by the existing lenders to Workspace Glebe

-    Margin at 1.25 per cent. over LIBOR with good headroom on covenants

• Group Trading Update:

-    October and November enquiry levels averaging 1,100 per month

-    Improved occupancy levels with total occupancy at end of November 2009 of 82.6 
     per cent. compared to 81.9 per cent. at September 2009 and like-for-like occupancy
     (adjusted for disposals) at 85.3 per cent. 

-    Further disposals exchanged since half year announcement; £40.0 million of cash from
     disposals expected by end January 2010

• Impact of the Acquisition on Workspace:

-    Net increase in the size of the property portfolio to 5.5 million sq. ft

-    Significant improvement in the portfolio's income and enhancement potential 

 -   Amended and restated five year debt introduced

 -   No increase in overall gearing of Workspace post completion of disposals

 -   Provisions against joint venture liabilities of £9.0 million reduced to approximately 
     £1 million and deferred to 2014

Rothschild and Noble & Company Limited are acting as Joint Financial Advisers to Workspace in respect of the Acquisition.

Panmure Gordon (UK) Limited and Investec Bank plc are acting as joint brokers and joint bookrunners in the placing.

Harry Platt, Chief Executive Officer of Workspace commented:

"This acquisition enables Workspace to gain full ownership of a portfolio of assets we know extremely well, with potential to increase current income and capture the inherent enhancement value for the benefit of our shareholders".  

Graham Clemett, Chief Financial Officer of Workspace commented:

"The financial impact of this transaction is positive for both earnings and net assets. Combined with the disposals we have achieved it also introduces new longer term debt from a new lender to Workspace with no increase in our overall gearing".

A meeting for analysts will be held at 10.30 am on 8 December 2009 at City Profile, Augustine House, 6A Austin Friars, London, EC2N 2HA.

Contact Information

Workspace Group PLC                      Tel: [phone] 

Harry Platt, Chief Executive 

Graham Clemett, Finance Director 

Rothschild                                           Tel: [phone] 

Alex Midgen

Richard Blackwell 

Noble & Co                                          Tel: [phone]

David Ovens

Peter Tracey

Panmure Gordon (UK) Limited       Tel: [phone] 

Tim Linacre 

Adam Pollock

Stuart Gledhill 

Investec Bank plc                               Tel: [phone] 

Keith Anderson 

Henry Reast 

City Profile                                          Tel: [phone] 

Jonathan Gillen 

Simon Courtenay 

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

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

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

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

This Announcement has been issued by, and is the sole responsibility of, the Company. No representation or warranty express or implied, is or will be made, and no responsibility or liability is or will be accepted by Panmure Gordon (UK) Limited and/or Investec Bank plc (together the "Joint Bookrunners") N M Rothschild & Sons Limited or Noble & Company Limited or by any of their respective affiliates or agents as to or in relation to the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed. 

N M Rothschild & Sons Limited ("Rothschild"), which is regulated in the United Kingdom by the FSA, is acting exclusively for the Company and for no-one else in connection with the Acquisition and the Placing, and other matters referred to in this Announcement. Rothschild will not be responsible to anyone other than the Company for providing the protections afforded to clients of Rothschild nor for providing advice to any other person in relation to the Acquisition and the Placing or any other matter referred to herein.

Noble & Company Limited, which is regulated in the United Kingdom by the FSA, is acting exclusively for the Company and for no-one else in connection with the Acquisition and the Placing, and other matters referred to in this Announcement. Noble & Company Limited will not be responsible to anyone other than the Company for providing the protections afforded to clients of Noble & Company Limited nor for providing advice to any other person in relation to the Acquisition and the Placing or any other matter referred to herein.

Panmure Gordon (UK) Limited ("Panmure Gordon") is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for the Company and for no-one else in connection with the Placing, and other matters referred to in this Announcement. Panmure Gordon will not be responsible to anyone other than the Company for providing the protections afforded to clients of Panmure Gordon nor for providing advice to any other person in relation to the Placing or any other matter referred to herein.

Investec Bank plc ("Investec Bank") is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for the Company and for no-one else in connection with the Placing, and other matters referred to in this Announcement. Investec Bank will not be responsible to anyone other than the Company for providing the protections afforded to clients of Investec Bank nor for providing advice to any other person in relation to the Placing or any other matter referred to herein.

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

Certain statements in this Announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The information contained in this Announcement is subject to change without notice and none of the Company or the Joint Bookrunners assumes any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein. 

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

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

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

  1.  Introduction

Workspace has entered into a conditional agreement to acquire the issued share capital of Workspace Glebe not already owned by the Company for a consideration of £1.  

An agreement has been reached (the "Revised Debt Facility") with Bank of Scotland plc and The Bank of East Asia, Limited ("Bank of East Asia") (together, the "Lenders") to amend and restate the existing HBoS Facility A Agreement and terminate the HBoS Facility B Agreement, Workspace Glebe's existing debt facilities. 

Under the Revised Debt Facility the existing £134.0 million debt will be reduced to £68.0 million, subject to a cash payment of £15.0 million and an agreement to share the proceeds from any future property disposals. 

The agreement to share proceeds from future disposals will only apply when property disposals are made, and will only apply to proceeds after the repayment of debt and Workspace's priority return.  Further details of the proceeds sharing agreement are given in section 6.

In connection with the Acquisition, the Company has conditionally placed with new and existing shareholders 101.5 million New Ordinary Shares in the Company (representing approximately 9.7 per cent. of the Company's existing issued share capital) at a price of 19.0 pence per New Ordinary Share (the "Placing"). The Placing is expected to raise £18.9 million (net of expenses). The Placing is conditional, inter alia, on the admission of the New Ordinary Shares to the official list of the UK Listing Authority and to trading on the main market of the London Stock Exchange plc ("Admission"). The Placing has been fully underwritten by Investec Bank and Panmure Gordon. 

The funds raised from the Placing will be used to finance the £15.0 million payment to the Lenders and other costs associated with the Acquisition, including the REIT entry charge in respect of the property assets held by Workspace Glebe.

The Acquisition is conditional upon Admission.

2.  Group trading and update

The results for the six months to 30 September 2009, which were announced on 16 November 2009, indicated that Workspace was seeing an improved level of demand for space from potential occupiers which was beginning to provide stability on rent roll as voids reduce. Overall occupancy in the six months to 30 September 2009 was up 1.6 per cent. to 81.9 per cent.  while cash rent roll (excluding disposals) declined 5 per cent. to £46.9 million.  

The improved level of trading has continued through to the end of November 2009 with monthly enquiries averaging 1,100 over the two months. Total occupancy has improved to 82.6 per cent. at the end of November 2009 from 81.9 per cent. at the end of September 2009 and the like-for-like occupancy (adjusted for disposals) has improved to 85.3 per cent. from 83.7 per cent. at the end of September 2009. 

Workspace expects to receive £40 million in cash from disposals by the end of January 2010. In total, £46 million of property disposals have now been exchanged since 30 September 2009 at or ahead of book values. They comprise some £2.4 million of rent roll with lettable floor area of 0.4 million sq. ft. Since the announcement of the half year results Workspace has exchanged contracts on three further disposals:

• Aladdin Business Centre, UB6 and Seedbed Centre, RM7 for a combined cash consideration of £7.6 million, due to complete in January 2010.

• Thurston Road, SE13, an existing industrial estate sold for a mixed-use redevelopment where Workspace will receive £6.6 million cash on completion, which is expected to be in January 2010, and new commercial space once the work has completed. 

3.  Impact of the transaction on Workspace

The impact of the acquisition of the Workspace Glebe property portfolio (the "Workspace Glebe Portfolio") and cash from the disposals referred to above which are expected to complete by the end January 2010, on the reported results of Workspace as at 30 September 2009 are shown below on a pro-forma basis as if they had occurred prior to 30 September 2009:

• The lettable floor area would increase from 4.8 million sq. ft to 5.5 million sq. ft.

• The cash rent roll would increase from £46.9 million to £50.5 million.

• The property valuation would increase from £605.0 million to £659.0 million.

• Borrowings would increase from £346.0 million to £374.0 million

• Loan to value would remain constant at 57 per cent.

• Provisions against joint venture liabilities would be reduced from £9.0 million to approximately £1 million.

4.  Information on Workspace Glebe

The Workspace Glebe Portfolio comprises 18 freehold properties at 11 locations in London with total lettable area of 1.1 million sq. ft across 34 acres of freehold land. The properties were valued at £94.0 million by CBRE as at 30 September 2009 and have a rent roll of £6.0 million per annum. 

History

Workspace Glebe was formed in June 2006 as a joint venture between Workspace and Glebe Two in order to promote intensification and change of use opportunities inherent in certain properties previously owned by Workspace and certain properties previously owned by Glebe Two. Under the terms of the joint venture agreement, Workspace provided operational and asset management capability, whilst Glebe Two was responsible for the promotion of regeneration and alternative use opportunities at the properties. 

On formation of the joint venture, Workspace sold eleven properties to the joint venture at a value of £146.0 million (representing an income yield of 4.9 per cent.). Glebe Two sold three properties to the joint venture at a value of £8.7 million. During the life of the joint venture, some £24.0 million has been spent by Workspace Glebe on site acquisition, capital expenditure and progressing enhancement plans. Each party has contributed £23.1 million by way of equity and loans with the non-recourse debt facilities provided to the joint venture by the Lenders.

As at 31 March 2009, the Workspace Glebe Portfolio was valued at £130 million, with outstanding debt of £134 million and net liabilities (including shareholder loans) of £52 million. The Workspace Glebe debt was non-recourse to the joint venture partners, but there was a maximum liability of £6.0 million under an interest shortfall guarantee (of which the Company remained jointly and severally liable for up to £4.0 million at 30 September 2009) and a tax indemnity provided by the Company on the formation of the joint venture that stood at £5.1 million as at 30 September 2009.  

Based on the valuation of the Workspace Glebe Portfolio as at 31 March 2009, the loan to value covenants under the HBoS Facility Agreements were breached and Workspace wrote down the value of its interest in Workspace Glebe to nil and fully provided for its potential liabilities to the joint venture. In April 2009 Workspace and Glebe Two commenced discussions with the Lenders to renegotiate these facilities. 

In early September 2009, Glebe Two's shareholders notified Workspace that they intended to place Glebe Two into voluntary liquidation. On 10 September 2009, Workspace announced it would continue to manage the Workspace Glebe Portfolio in the normal course of its business without interruption whilst negotiations continued to the satisfaction of Workspace with the bankers to Workspace Glebe, expecting to update shareholders on progress at the time of its interim results in November 2009.

Operational Performance of the Workspace Glebe Portfolio

The operational performance of the Workspace Glebe Portfolio has been impacted by the limited investment in the portfolio since April 2009 while negotiations with the Lenders over the covenant breach continued. In more recent months demand for space has improved and occupancy has increased to 73.6 per cent. at September 2009 (70.7 per cent. at March 2009). Cash rent roll fell 14 per cent. (£1.0 million) over the six months to £6.0 million as at 30 September 2009. This was a result of the lower prices being achieved on new lettings combined with the impact from the restrictions on leases and the creation of voids to enable future enhancement opportunities.

Properties within the Workspace Glebe Portfolio 

		At 30 September 2009
Location	Estate Type	Rent Roll	Valuation*
		£'000	£ million
Bow Enterprise Park, E3	Industrial	490	9.8
Bow Exchange, E3	Office	210	3.4
Grand Union Centre, W10	Office/Industrial	520	13.0
Hamilton Road, SE27	Industrial	150	1.8
Highway Business Park, E1	Industrial	230	4.4
Parkhall Road Trading Estate, SE21	Industrial	610	6.1
Rainbow Industrial Park, SW18	Industrial/Storage	300	3.5
Riverside Business Centre, SW18	Office	810	8.9
Tower Bridge Business Complex, SW18	Office/Industrial	2,320	30.8
Wandsworth Business Village, SW18	Office	40	8.3
Zennor Road, SW12	Industrial	350	3.7
Total		6,030	93.7

* Valuation by CBRE at 30 September 2009, including an assessment of its added value potential

5.  Benefits of the Acquisition

The Board believes that the Acquisition will benefit Workspace in the following ways:

• Acquisition of a portfolio of properties across London at an initial capital cost of some £75 per sq. ft. 
• Ability to utilise internal enhancement expertise to progress mixed use opportunities across the Workspace Glebe Portfolio, a number of which are already well progressed.
• Workspace currently manages all the properties in the Workspace Glebe Portfolio so transaction and integration risks are limited.
• New five year debt facility with good headroom on all covenants.
• Operational cashflows from the Workspace Glebe Portfolio can be used to fund capital expenditure.
• Write-back of approximately £8 million of existing joint venture provisions.
• Property disposals will be made at the Company's discretion, subject to Lender consent. 

6.  Key terms of the Acquisition

The Acquisition involves the purchase of the Workspace Glebe shares not already owned by the Company, an amendment and restatement of the existing HBoS Facility A Agreement, the termination of the existing HBoS Facility B Agreement and an arrangement to share any future disposal proceeds with the Lenders. 

Acquisition of shares not already owned

The Workspace Glebe shares not already owned by Workspace will be acquired for £1 from Glebe Two, acting by its liquidators.  

Revised Debt Facility

Following a loan repayment of £15.0 million to the Lenders, the outstanding debt of Workspace Glebe under the Revised Debt Facility will be £68.0 million. This debt will carry a margin of 1.25 per cent. over LIBOR and part of the existing interest rate swap for a nominal £50.0 million at 5.15 per cent. to June 2013 will remain in place. 

Details of the agreement to share future disposal proceeds associated with the Acquisition

Any cash proceeds from any future disposal of properties (or companies holding properties) within the Workspace Glebe Portfolio will be applied in the order set out below:

-  Firstly, the repayment of debt and deferred interest shortfall amounts to the Lenders; then

-  Workspace priority return comprising a cash payment of £15.0 million and any capital
   expenditure not funded by operational cashflows from the portfolio, less an agreed deduction if
   the interest shortfall amount is paid early from operational cashflows.

Any further disposal proceeds up to £170.0 million will be shared, 50 per cent. to Workspace and 50 per cent. to the Lenders. Disposal proceeds between £170.0 million and £200.0 million will be shared 70 per cent. to Workspace and 30 per cent. to the Lenders. Any proceeds raised in excess of £200.0 million will be retained entirely by Workspace

7.  Details of the Placing

The Acquisition and the costs associated with the Acquisition, including the REIT entry charge in respect of the Workspace Glebe Portfolio, are being part funded by the Placing. The Company has conditionally placed 101,473,333 New Ordinary Shares (representing 9.7 per cent. of the issued ordinary share capital of the Company) with new and existing shareholders. The placing price of 19.0 pence represents a discount of 3.8 per cent. to the closing mid-market price on 7 December 2009. The Placing has been fully underwritten by Investec Bank and Panmure Gordon.

The New Ordinary Shares will rank pari passu with the existing ordinary shares in Workspace, including the right to qualify for the interim dividend of 0.25 pence per share, payable on 11 February 2010.

Application has been made to the UK Listing Authority and to the London Stock Exchange plc for the new ordinary shares to be admitted to the official list of the UK Listing Authority and to trading on the main market for listed securities of the London Stock Exchange plc.

It is expected that Admission will take place and that dealings on the London Stock Exchange plc in the New Ordinary Shares will commence at 8.00am on 11 December 2009.

The Placing is conditional, inter alia, on Admission becoming effective and the placing agreement between the Company and the Joint Bookrunners not being terminated. The appendix to this announcement (which forms part of the announcement) (the "Appendix") sets out the detailed terms and conditions of the Placing.

As part of the Placing, the Company has agreed to place 42,105,263 New Ordinary Shares with Rovida Holdings Limited ("Rovida"). Rovida is considered to be a ''related party'' of the Company for the purposes of the Listing Rules. Accordingly, the participation of Rovida in the Placing is classified as a ''related party transaction'' for the purposes of the Listing Rules. Such transaction is not of sufficient size to require shareholder approval under the Listing Rules

As part of the Placing, the Company has also agreed to place a total of 4,215,789 New Ordinary Shares with Directors of the Company. Directors of the Company are deemed to be related parties of the Company, however none of the individual transactions with Directors is of sufficient scale to be deemed to be a related party transaction under the Listing Rules.

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

IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY. 

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT IN THIS APPENDIX ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS WHO ARE QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED, ("QUALIFIED INVESTORS") BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE "PROSPECTUS DIRECTIVE"); AND (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR THE SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. 

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF A PURCHASE OF PLACING SHARES. 

THIS ANNOUNCEMENT AND ANY OFFER IF MADE SUBSEQUENTLY IS ONLY ADDRESSED TO AND DIRECTED AT PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA ("EEA") WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE PROSPECTUS DIRECTIVE ("QUALIFIED INVESTORS"). 

Persons who have chosen to participate in the Placing, by making an oral or written offer to acquire New Ordinary Shares, will be deemed to have read and understood this Announcement in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements and undertakings contained in this Appendix. 

Unless the context otherwise requires, terms defined in the Announcement shall have the same meaning in this Appendix. 

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

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

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

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

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

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

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

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

Save as expressly set out, this Announcement does not constitute an offer or invitation to underwrite, subscribe for or otherwise acquire or dispose of any securities or investment advice in any jurisdiction, including without limitation, the United Kingdom, the United States, Australia, Canada, Japan or South Africa or in any jurisdiction in which such offer or invitation would be unlawful. Past performance is no good guide to future performance. Persons needing advice should consult an independent financial advisor. This Announcement and the information contained herein are not for release, publication or distribution, in whole or in part, directly or indirectly, to persons in the United States, Australia, Canada, Japan or South Africa or in any jurisdiction in which such publication or distribution would be unlawful. No public offer of securities of the Company is being made in the United Kingdom, the United States or elsewhere. 

In particular, the New Ordinary Shares referred to in this Announcement have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States. The New Ordinary Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement. Any representation to the contrary is a criminal offence in the United States. 

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

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

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

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

Details of the Placing Agreement and the New Ordinary Shares 

The proceeds of the Placing will be used to fund the Acquisition and related expenses. The Placing is being effected by way of a cashbox placing.  Panmure Gordon and Investec Bank have entered into a placing agreement (the "Placing Agreement") with the Company under which each of the Joint Bookrunners have, on the terms and subject to the conditions set out therein, severally agreed as placing agents for the Company to use their reasonable endeavours to procure Placees to take up the New Ordinary Shares at the Placing Price, failing which to take up the New Ordinary Shares themselves.

The New Ordinary Shares will rank pari passu with the existing ordinary shares (the "Ordinary Shares") in Workspace, including the right to qualify for the interim dividend of 0.25 pence per share, payable on 11 February 2010.

As a result, the allotment and issue of the New Ordinary Shares will be made by the Company to Placees procured by Panmure Gordon and Investec Bank (acting as agents of the Company) in consideration for the transfer to the Company of certain shares in a Jersey incorporated subsidiary of the Company ('NewCo') by Panmure Gordon. 

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

Application for listing and admission to trading 

Application will be made to the Financial Services Authority (the "FSA") for admission of the New Ordinary Shares to the Official List of the UK Listing Authority (the "Official List") and to London Stock Exchange plc for admission to trading of the New Ordinary Shares on its main market for listed securities (together, "Admission"). It is expected that Admission will become effective by no later than 8.00 am on or around 11 December 2009 and that dealings in the New Ordinary Shares will commence at that time. 

Participation in, and principal terms of, the Placing 

1.     Panmure Gordon and Investec Bank (whether through themselves or any of their affiliates) are arranging the Placing as several placing agents of the Company for the purpose of procuring Placees at the Placing Price for the New Ordinary Shares.

2.     Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by the Joint Bookrunners. The Joint Bookrunners and their affiliates may participate in the Placing as principal.

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

4.     The placing price will be a fixed price of 19.0 per New Ordinary Share (the "Placing Price").

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

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

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

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

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

10. To the fullest extent permissible by law, none of the Company, the Joint Bookrunners or any of their respective affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, none of the Company, the Joint Bookrunners or any of their respective affiliates shall have any liability (including to the fullest extent permissible by law, any fiduciary duties) in respect of the Joint Bookrunners' conduct of the Placing.

Conditions of the Placing 

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

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

(b) Admission taking place not later than 8.00 a.m. on 11 December 2009 or such later date as the Company and the Joint Bookrunners may otherwise agree but not being later than 3.00 p.m. on 31 December 2009.

If (i) any of the conditions contained in the Placing Agreement is not fulfilled or (where applicable) waived by the Joint Bookrunners in accordance with the Placing Agreement within the stated time periods (or such later time and/or date as may be agreed between the Company and each of the Joint Bookrunners), or (ii) the Placing Agreement is terminated in accordance with its terms (see below), the Placing will lapse and the Placees' rights and obligations hereunder in relation to the New Ordinary Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by or on behalf of the Placee (or any person on whose behalf the Placee is acting) in respect thereof. By participating in the Placing, each Placee agrees that its rights and obligations cease and terminate only in the circumstances described above and under "Right to terminate under the Placing Agreement" below and will not be capable of rescission or termination by it after oral confirmation by the relevant Joint Bookrunner. 

The Joint Bookrunners may, at their discretion and upon such terms as they determine, waive compliance with, or extend the time and/or date for fulfilment by the Company of, the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement save that certain conditions, including the above conditions relating to Admission taking place and the Company's allotment of the New Ordinary Shares, may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement. 

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

Right to terminate under the Placing Agreement 

The Joint Bookrunners are entitled, at any time before Admission, to terminate the Placing Agreement in accordance with the terms of the Placing Agreement in certain circumstances, including a breach of the warranties given to the Joint Bookrunners in the Placing Agreement or the occurrence of a force majeure event. 

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

No prospectus 

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

Registration and settlement 

Settlement of transactions in the New Ordinary Shares (ISIN: GB0005296354) following Admission will take place within the CREST system, subject to certain exceptions. The Joint Bookrunners severally reserve the right to require settlement for and delivery of the New Ordinary Shares to Placees by such other means that it deems necessary if delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in the Placee's jurisdiction. 

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

It is expected that settlement will be on 11 December 2009 on a T+3 basis in accordance with the instructions set out in the trade confirmation. 

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above the London Interbank Offered Rate as determined by the Joint Bookrunners.

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

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

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

Representations, warranties and further terms 

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

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

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

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

4.     acknowledges that the content of this Announcement is exclusively the responsibility of the Company and that neither of the Joint Bookrunners, their affiliates or any person acting on the Joint Bookrunners’ behalf has or shall have any liability for any information, representation or statement contained in this Announcement or any information previously published by or on behalf of the Company and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to acquire the New Ordinary Shares is contained in this Announcement and any information previously published by the Company by notification to a Regulatory Information Service, such information being all that it deems necessary to make an investment decision in respect of the New Ordinary Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by any of the Joint Bookrunners or the Company and neither the Joint Bookrunners nor the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person. Each Placee further acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing;

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

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

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

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

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

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

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

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

13. represents and warrants that it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000 (as amended), the Terrorism Act 2006 and the Money Laundering Regulations 2007 (the 'Regulations') and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;

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

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

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

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

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

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

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

21. undertakes that it (and any person acting on its behalf) will make payment for the New Ordinary Shares allocated to it in accordance with this Announcement on the due time and date set out herein, failing which the relevant New Ordinary Shares may be placed with other Placees or sold as Panmure Gordon or Investec Bank may in their respective sole discretion determine and without liability to such Placee;

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

23. undertakes that the person whom it specifies for registration as holder of the New Ordinary Shares will be (a) itself or (b) its nominee, as the case may be. 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. Each Placee and any person acting on behalf of such Placee agrees to indemnify the Company and the Joint Bookrunners in respect of the same on the basis that the New Ordinary Shares will be allotted to the CREST stock account of Panmure Gordon or Investec Bank who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;

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

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

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

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

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

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

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

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

Each Placee, and any person acting on behalf of the Placee, acknowledges that the Joint Bookrunners do not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement. 

Each Placee and any person acting on behalf of the Placee acknowledges and agrees that either Joint Bookrunner or any of their affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the New Ordinary Shares. 

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

All times and dates in this Announcement may be subject to amendment. 

 

END

 

 

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