ARE.L Regulatory News (ARE)

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

13 January 2012

RECOMMENDED CASH OFFER

by

Aldersgate Investments Limited ("Aldersgate")

for

Arena Leisure plc ("Arena")

(to be implemented by way of a Scheme of Arrangement

under Part 26 of the Companies Act)

Summary

·; The boards of Aldersgate and Arena are pleased to announce that they have reached agreement on the terms of a recommended cash offer under which Aldersgate will acquire the entire issued and to be issued share capital of Arena (the "Acquisition").

·; It is intended that the Acquisition will be implemented by way of a Court sanctioned scheme of arrangement under Part 26 of the Companies Act.

·; Under the terms of the Acquisition, Scheme Shareholders will be entitled to receive 44.25 pence in cash for each Arena Share held at the Scheme Record Time, valuing the entire issued and to be issued share capital of Arena at approximately £167 million.

·; Aldersgate is a company incorporated in the British Virgin Islands and is wholly-owned by family trusts controlled by David and Simon Reuben, both British citizens. Aldersgate operates as a holding company for property related investments and its existing portfolio consists of investments in the United Kingdom, mainland Europe and other jurisdictions.

·; The consideration of 44.25 pence for each Arena Share represents a premium of approximately:

- 37 per cent. to the closing price of 32.3pence per Arena Share on 22 June 2011, being the day before Arena's announcement that it was reviewing possible options to increase value for its shareholders;

- 51.5 per cent. to the average closing price of 29.2 pence per Arena Share over the six months ending on 22 June 2011, being the day before Arena's announcement that it was reviewing possible options to increase value for its shareholders; and

- 19.6 per cent. to the closing price of 37 pence per Arena Share on 12 January 2012, being the last Business Day prior to this announcement.

·; The cash consideration payable under the terms of the Acquisition will be funded using Aldersgate's existing cash resources.

·; The Arena Directors, who have been so advised by Investec, consider the terms of the Acquisition to be fair and reasonable. In providing its advice, Investec has taken into account the commercial assessments of the Arena Directors.

·; Accordingly, the Arena Directors intend unanimously to recommend that Arena Shareholders vote in favour of the Scheme, as the Arena Directors have irrevocably undertaken to do (or procure to be done) in respect of their and their connected persons' entire beneficial holdings in Arena, amounting to, in aggregate, 263,591 Arena Shares, representing approximately 0.07 per cent. of the existing issued ordinary share capital of Arena.

·; Aldersgate has also received irrevocable undertakings to vote in favour of the Scheme from Coatbridge Limited and Rumney-Manor Limited in respect of, in aggregate, 149,663,217 Arena Shares, representing 41.09 per cent. of the existing issued ordinary share capital of Arena. Coatbridge Limited and Rumney-Manor Limited are companies owned by the family interests of Mr. Trevor Hemmings.

·; As at the date of this announcement, in aggregate, Aldersgate has, therefore, received irrevocable undertakings to vote in favour of the Scheme in respect of 149,926,808 Arena Shares, representing 41.17 per cent. of the existing issued ordinary share capital of Arena. Further details of the irrevocable undertakings are set out in Appendix III.

·; Reuben Brothers Limited, a company which is acting in concert with Aldersgate, holds interests in respect of a total of 108,639,495 Arena Shares representing 29.8 per cent. of the existing issued ordinary share capital of Arena. These shares are Excluded Shares for the purposes of the Scheme and as such are precluded from being voted at the Court Meeting. Arena Shares held by Reuben Brothers Limited will not therefore count towards the majority required at the Court Meeting to approve the Scheme. Reuben Brothers Limited is not, however, precluded from voting at the General Meeting and it has undertaken to Arena to vote in favour of the resolutions to be proposed at the General Meeting in respect of its holding of Arena Shares.

·; The Acquisition is conditional on, inter alia, certain approvals by Arena Shareholders and the sanction of the Scheme by the Court. In order to become effective, the Scheme must be approved by a majority in number of the Scheme Shareholders voting at the Court Meeting representing not less than 75 per cent. in value of the Scheme Shares held by the Scheme Shareholders present and voting in person or by proxy. It is expected that the Scheme Document, containing further information about the Acquisition and notices of the Court Meeting and General Meeting together with the Forms of Proxy, will be posted to Arena Shareholders as soon as is reasonably practicable and, in any event, within 28 days of the date of this announcement (or such later date as Aldersgate and Arena may, with the consent of the Panel, agree) and that the Acquisition and the resolutions required to implement the Scheme will be put to Arena Shareholders at the Court Meeting and the General Meeting which are expected to be held by 5 March 2012. Subject to the satisfaction, or where relevant, waiver of all relevant Conditions, the Scheme is expected to become effective by 30 March 2012.

Commenting on the Acquisition, Mark Elliott, Chief Executive of Arena, said:

"On 23 June 2011, Arena announced that it was reviewing possible options to increase value for its shareholders, which might include a possible offer for the Company. I am pleased to say that this review has resulted in this offer from Aldersgate at 44.25 pence per share. I and the other Arena Directors consider, for the reasons set out in today's announcement, that this represents a fair and reasonable opportunity to realise value for Arena shares that is not currently available in the market."

Commenting on the Acquisition, Stephane Nahum of Motcomb Estates Limited representing Aldersgate, said:

"The proposed acquisition of Arena is an endorsement of the view held by Aldersgate that British horseracing and racecourses represent a sound, long-term investment. We believe that the opportunity to share the operating expertise of Arena and our existing racecourse investment under one umbrella management organisation will benefit all customer groups and participants in the sport."

This summary should be read in conjunction with the following full announcement and the appendices.

The Acquisition will be made on the terms and subject to the conditions and further terms set out in Appendix I to this announcement and the further terms and conditions set out in the Scheme Document and Forms of Proxy when issued. The bases and sources of certain financial information contained in this announcement are set out in Appendix II to this announcement. A summary of the irrevocable undertakings given by the Arena Directors and the irrevocable undertakings given by certain other Arena Shareholders is contained in Appendix III to this announcement. Certain terms used in this announcement are defined in Appendix IV to this announcement.

HSBC Bank plc, which is authorised and regulated in the UK by the Financial Services Authority, is acting for Aldersgate and no one else in connection with the Acquisition and this announcement and will not be responsible to anyone other than Aldersgate for providing the protections afforded to clients of HSBC Bank plc nor for providing advice in connection with the Acquisition or any matter referred to herein.

Investec, which is authorised and regulated in the UK by the Financial Services Authority, is acting exclusively for Arena and no one else in connection with the Acquisition and this announcement and will not be responsible to anyone other than Arena for providing the protections afforded to clients of Investec nor for providing advice in connection with the Acquisition or any matter referred to herein.

Altium, which is authorised and regulated in the UK by the Financial Services Authority, is acting exclusively for Arena and no one else in connection with the Acquisition and this announcement and will not be responsible to anyone other than Arena for providing the protections afforded to clients of Altium nor for providing advice in connection with the Acquisition or any matter referred to herein.

This announcement is for information purposes only and does not constitute an offer to sell or an invitation to purchase any securities or the solicitation of an offer to buy securities, pursuant to the Acquisition or otherwise. The Acquisition will be made solely by means of the Scheme Document, which will contain the full terms and conditions of the Acquisition, including details of how to vote in favour of the Scheme. Arena will prepare the Scheme Document to be distributed to Arena Shareholders. Arena and Aldersgate urge Arena Shareholders to read the Scheme Document when it becomes available because it will contain important information relating to the Acquisition.

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

This announcement has been prepared for the purpose of complying with English law and the City Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

Overseas shareholders

The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and observe, any applicable requirements.

Unless otherwise determined by Aldersgate or required by the City Code and permitted by applicable law and regulation, the Acquisition will not be made, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and the Acquisition will not be capable of acceptance from or within a Restricted Jurisdiction. Accordingly, copies of this announcement and all documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this announcement and all documents relating to the Acquisition (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions as doing so may invalidate any purported acceptance of the Acquisition.

The availability of the Acquisition to Arena Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements.

Further details in relation to overseas Arena Shareholders will be contained in the Scheme Document.

Aldersgate reserves the right to elect, with the consent of the Panel, to implement the Acquisition by way of a Contractual Offer. In such event, the Contractual Offer will be implemented on substantially the same terms, subject to appropriate amendments, as those which would apply to the Acquisition.

Forward looking statements

This announcement, any oral statements made by Aldersgate or Arena in relation to the Acquisition and other information published by Aldersgate or Arena may contain statements about Aldersgate and Arena that are or may be forward looking statements. All statements other than statements of historical facts included in this announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "estimates", "projects" or words or terms of similar substance or the negative thereof, are forward looking statements. Forward looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Aldersgate's or Arena's operations and potential synergies resulting from the Acquisition; and (iii) the effects of government regulation on Aldersgate's or Arena's business.

Such forward looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward looking statements. Aldersgate and Arena disclaim any obligation to update any forward looking or other statements contained herein, except as required by applicable law.

Not a profit forecast

No statement in this announcement is intended as a profit forecast or profit estimate. No statement in this announcement should be interpreted to mean that the profits or earnings per share of (i) the Aldersgate Group as enlarged by the Acquisition, (ii) Aldersgate and/or (iii) Arena for current or future financial years will necessarily match or exceed the historical or published profits or earnings per share of Aldersgate or Arena, as the case may be.

Disclosure requirements of the Takeover Code (the "Code")

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

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

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

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication on website

A copy of this announcement will be made available, free of charge subject to certain restrictions relating to persons in Restricted Jurisdictions, at Arena's website at www.arenaleisureplc.com by no later than 12 noon (London time) on the Business Day following the date of this announcment.

Neither the content of the website referred to in this announcement nor the content of any website accessible from hyperlinks on Arena's website (or any other website) is incorporated into, or forms part of, this announcement.

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

13 January 2012

RECOMMENDED CASH OFFER

by

Aldersgate Investments Limited ("Aldersgate")

for

Arena Leisure plc ("Arena")

(to be implemented by way of a Scheme of Arrangement

under Part 26 of the Companies Act)

1 Introduction

The boards of Aldersgate and Arena are pleased to announce that they have reached agreement on the terms of a recommended cash offer under which Aldersgate will acquire the entire issued and to be issued share capital of Arena.

2 The Acquisition

It is intended that the Acquisition will be implemented by way of a Court sanctioned scheme of arrangement under Part 26 of the Companies Act.

Pursuant to the Acquisition, which will be subject to the conditions and further terms set out below and in Appendix I and to the full terms and conditions which will be set out in the Scheme Document, Scheme Shareholders will receive:

for each Arena Share 44.25 pence in cash

The Acquisition values the entire existing issued share capital of Arena at approximately £161 million and the entire issued and to be issued share capital of Arena at approximately £167 million. 

The consideration of 44.25 pence for each Arena Share represents a premium of approximately:

- 37 per cent. to the closing price of 32.3pence per Arena Share on 22 June 2011, being the day before Arena's announcement that it was reviewing possible options to increase value for its shareholders;

- 51.5 per cent. to the average closing price of 29.2 pence per Arena Share over the six months ending on 22 June 2011, being the day before Arena's announcement that it was reviewing possible options to increase value for its shareholders; and

- 19.6 per cent. to the closing price of 37 pence per Arena Share on 12 January 2012, being the last Business Day prior to this announcement.

No dividends will be paid by Arena between the date of this announcement and the Effective Date or (if applicable) the date on which any condition to the Scheme can no longer be satisfied or waived.

3 Background to and reasons for the Acquisition

The proposed Acquisition is a reflection of the board of Aldersgate's continued confidence in the long term prospects of British horseracing and racecourses, underpinned by what the board of Aldersgate believes to be their appeal to both domestic and international media rights buyers attracted by the quality and competitive nature of the sport.

Aldersgate believes there is the opportunity to apply the combined experience, particularly in sales, marketing, catering and racecourse operations, of Arena and Aldersgate's existing racecourse investment, across both businesses. The board of Aldersgate believes that the two businesses, operated under one umbrella management organisation, will benefit all customer groups and participants in the sport, including horsemen and the general race going public.

4 Recommendation

The Arena Directors, who have been so advised by Investec, consider the terms of the Acquisition to be fair and reasonable. In providing its advice, Investec has taken into account the commercial assessments of the Arena Directors.

Accordingly, the Arena Directors intend unanimously to recommend that Arena Shareholders vote in favour of the Scheme and the resolutions at the Court Meeting and the General Meeting, as the Arena Directors have irrevocably undertaken to do (or procure to be done) in respect of their and their connected persons' entire beneficial holdings in Arena, amounting to, in aggregate, 263,591 Arena Shares, representing approximately 0.07 per cent. of the entire issued ordinary share capital of Arena.

5 Background to and reasons for the recommendation to Arena Shareholders

On 23 June 2011, Arena announced that, following press speculation concerning the Company and the movement in its share price, it was reviewing possible options to increase value for its shareholders, which might include a possible offer for the Company. This review has resulted in the offer from Aldersgate at 44.25 pence per Arena Share.

The Arena Directors have taken into account the fact that the Offer Price represents a significant premium to Arena's share price in the period prior to the announcement of a possible offer on 23 June 2011. The Offer Price represents a premium of approximately:

- 37 per cent. to the closing price of 32.3pence per Arena Share on 22 June 2011, being the last dealing day prior to the commencement of the Offer Period;

- 51.5 per cent. to the average closing price of 29.2 pence per Arena Share over the six months ending on 22 June 2011, being the last dealing day prior to the commencement of the Offer Period; and

- 19.6 per cent. to the closing price of 37 pence per Arena Share on 12 January 2012, being the last Business Day prior to this announcement.

The Arena Directors consider, taking into account the current economic circumstances and the feedback received from certain larger Arena Shareholders, that the Offer Price represents a fair and reasonable opportunity to realise value for Arena Shares that is not currently available in the market.

Accordingly, the Arena Directors believe that the Acquisition is in the best interests of Arena Shareholders and intend unanimously to recommend that Arena Shareholders vote in favour of the Scheme and the resolutions at the Court Meeting and the General Meeting, as they have irrevocably undertaken to do (or procure to be done) in respect of their and their connected parties' entire beneficial holdings of 263,591 Arena Shares, representing, in aggregate, approximately 0.07 per cent. of the existing issued share capital of Arena.

6 Irrevocable undertakings

Aldersgate has received irrevocable undertakings from each of the Arena Directors to vote and to procure that their connected persons vote in favour of the resolutions to be proposed at the Court Meeting and the General Meeting, in respect of a total of 263,591 Arena Shares, representing approximately 0.07 per cent. of the entire issued ordinary share capital of Arena.

In connection with the Acquisition, Aldersgate has also received irrevocable undertakings to vote in favour of the resolutions to be proposed at the Court Meeting and the General Meeting from each of Coatbridge Limited and Rumney-Manor Limited in respect of 149,663,217 Arena Shares in aggregate, representing 41.09 per cent. of the existing issued ordinary share capital of Arena. Coatbridge Limited and Rumney-Manor Limited are companies owned by the family interests of Mr. Trevor Hemmings.

In aggregate, Aldersgate has, therefore, received irrevocable undertakings to vote in favour of the Scheme and the General Meeting Resolution in respect of 149,926,808 Arena Shares as at the date of this announcement, representing 41.17 per cent. of the existing issued ordinary share capital of Arena.

The irrevocable undertakings from Coatbridge Limited, Rumney-Manor Limited and the Arena Directors will cease to be binding if a bona fide third party announces a firm intention to make an offer to acquire the whole of the issued ordinary share capital of the Company save for any shares owned by that third party or any person acting in concert with it on terms which provide for consideration of no less value than 50 pence per ordinary share provided that the Arena Directors', Coatbridge Limited's and Rumney-Manor Limited's respective obligations under their respective undertakings will not lapse unless the Company or the relevant shareholder has notified Aldersgate of the consideration payable per ordinary share under the terms of the proposed offer at least 5 business days prior to the announcement of the competing offer and Aldersgate has not agreed to increase the consideration to be paid per ordinary share pursuant to the Acquisition to an amount equal to or more than the consideration under the proposed offer (or, if the consideration includes a non-cash element, an amount which, in the reasonable opinion of HSBC Bank plc, is of equivalent value to that consideration).

Reuben Brothers Limited has given an undertaking to vote in favour of the resolutions to be proposed at the General Meeting in respect of its entire holding of Arena Shares, being 108,639,495 Arena Shares, representing 29.8 per cent. of the existing issued ordinary share capital of Arena.

Further details of these irrevocable undertakings (including further details of the circumstances in which they will lapse) are set out in Appendix III to this announcement.

7 Information on Aldersgate

Aldersgate is a company incorporated in the British Virgin Islands and is wholly-owned by family trusts controlled by David and Simon Reuben, both British citizens. Aldersgate operates as a holding company for property related investments and its existing portfolio consists of investments in the United Kingdom, mainland Europe and other jurisdictions.

8 Information on Arena

The Arena Group owns and operates seven racecourses in the UK comprising Doncaster, Royal Windsor, Lingfield Park, Wolverhampton, Folkestone, Southwell and Worcester. Lingfield Park, Wolverhampton and Southwell comprise of or include all-weather tracks.

Arena also owns 45.85 per cent. of AtTheRaces Holdings Limited, a media distribution business in joint venture with British Sky Broadcasting Limited and others.

In the year ended 31 December 2010, Arena had revenues of £63.98 million and made a pre-tax profit of £3.62 million.

9 Management, employees and locations

Aldersgate has assured the Arena Board that, on the Scheme becoming effective, the existing employment rights, including pension rights, of the management and employees of the Arena Group will be safeguarded.

The non-executive directors of Arena have agreed to resign with effect from the Effective Date and they will each receive remuneration up to the Effective Date and a payment in lieu of notice in line with the termination provisions of their respective service contracts or letters of appointment by way of compensation. Each of Mark Elliott and Tony Harris has also agreed to resign as an Arena Director with effect from the Effective Date. A summary of the arrangements entered into by Arena with each of Mark Elliott and Tony Harris is set out below and further details will be contained in the Scheme Document.

Aldersgate's current plans for Arena do not involve any material change to its commercial offering or its places of business, other than the relocation of Arena's London head office following the exercise by Arena of a break provision in its current lease arrangement. Further details will be contained in the Scheme Document.

There are no agreements or arrangements between Aldersgate and the senior management of Arena and no such agreements or arrangements will be entered into at the current time.

10 Compromise Agreements

Arena has entered into compromise agreements with its Chief Executive Officer, Mark Elliott, and Finance Director, Tony Harris, which are conditional upon completion of the Acquisition. The compromise agreements provide for the executives to waive all claims against Arena or any associated company in return for a payment of £351,114 in the case of Mr Elliott and £217,751 in the case of Mr Harris, which in both cases is the equivalent of one year's salary and benefits to which the executives are entitled under the terms of their service agreements. The executives are also entitled to be paid bonuses in respect of 2011 and 2012, subject to the terms of individual bonus plans, and their entitlements under the Arena Employee Share Schemes are preserved. The compromise agreements also contain standard clauses dealing with confidentiality, continuing assistance, resignation of directorships, restatement of existing restrictive covenants and the provision of a reference by Arena.

11 Arena Employee Share Schemes

Participants in the Arena Employee Share Schemes will be contacted separately regarding the effect of the Acquisition on their rights under the Arena Employee Share Schemes and appropriate proposals will be made to such persons in due course. The Acquisition will extend to any Arena Shares which are unconditionally allotted or issued before the Scheme Record Time as a result of the exercise of existing options or the vesting of awards under the Arena Employee Share Schemes.

12 Financing the Acquisition

The cash consideration payable under the terms of the Acquisition will be funded using Aldersgate's existing cash resources.

HSBC, financial adviser to Aldersgate, is satisfied that sufficient resources are available to satisfy in full the cash consideration payable to Arena Shareholders under the terms of the Acquisition.

13 Offer-related Arrangements

Aldersgate and Arena have each agreed to co-operate in relation to the obtaining of any and all consents, clearances, permissions and waivers as may be necessary, and the making of all filings as may be necessary, from or under the law, regulations or practices applied by any applicable regulatory authority. Aldersgate and Arena have also each undertaken to provide each other with all such co-operation, information and assistance as the other may reasonably request in connection with the preparation and verification of the Scheme Document or Offer Document (as the case may be). Furthermore, Arena has agreed with Aldersgate that it will, so far as permitted under the Code, discuss any proposed changes in relation to the timetable of the Scheme with Aldersgate in a timely manner. These agreements and undertakings are contained in a letter dated 13 January 2012 from Arena to Aldersgate, which is disclosed in accordance with paragraph 19 below.

14 Opening Position Disclosures and interests in Arena Shares

Other than pursuant to the irrevocable undertakings referred to in paragraph 6 above, Aldersgate confirms that it does not currently hold any interests in Arena Shares.

Reuben Brothers Limited, a company which is acting in concert with Aldersgate, currently holds interests in respect of a total of 108,639,495 Arena Shares representing 29.8 per cent. of the existing issued ordinary share capital of Arena. These shares are Excluded Shares for the purposes of the Scheme and as such are precluded from being voted at the Court Meeting. Arena Shares held by Reuben Brothers Limited will not therefore count towards the majority required at the Court Meeting to approve the Scheme. Reuben Brothers Limited is not, however, precluded from voting at the General Meeting, and has undertaken to vote in favour of the resolutions to be proposed at the General Meeting in respect of its entire holding of Arena Shares.

Aldersgate confirms that on 5 October 2011 an Opening Position Disclosure was made by Reuben Brothers Limited, setting out the details required to be disclosed by it under Rule 8.1(a) of the Code.

15 Structure of the Acquisition

It is intended that the Acquisition will be effected by way of a Court sanctioned scheme of arrangement under Part 26 of the Companies Act. The Scheme is an arrangement between Arena and the Scheme Shareholders and is subject to the approval of the Court.

The purpose of the Scheme is to provide for Aldersgate to become the holder of the entire issued and to be issued ordinary share capital of Arena other than the shares held by Reuben Brothers Limited. This is to be achieved by the cancellation of the Scheme Shares held by Scheme Shareholders and the application of the reserve arising from such cancellation in paying up in full such number of new ordinary shares of 5 pence each in Arena which is equal to the number of Scheme Shares cancelled and issuing such new ordinary shares to Aldersgate. Aldersgate will subsequently pay the cash consideration to which Arena Shareholders on the register of members at the Scheme Record Time are entitled pursuant to the terms of the Acquisition.

To become effective, the Scheme will require, amongst other things, the approval by a majority in number of Scheme Shareholders representing at least 75 per cent. in value of the Scheme Shares held by such Scheme Shareholders voting, either in person or by proxy, at the Court Meeting (or any adjournment thereof), and the passing by the Arena Shareholders of the special resolutions necessary to implement the Scheme (including approving appropriate amendments to the articles of association of Arena) at the General Meeting (or any adjournment thereof). In addition, the Scheme must be sanctioned, and the Capital Reduction must be confirmed, by the Court.

The Scheme will also be subject to certain conditions and certain further terms referred to in Appendix I to this announcement and to be set out in the Scheme Document. In accordance with the Code, the Scheme will not become effective if the Acquisition is referred to the Competition Commission prior to the General Meeting and the Court Meeting.

Once the necessary approvals from Arena Shareholders have been obtained and the other Conditions have been satisfied or (where applicable) waived, the Scheme will become effective upon the delivery of the Reduction Court Order to the Registrar. Details of the Scheme timetable will be set out in the Scheme Document. The Scheme is expected to become effective by 30 March 2012. If the Scheme does not become effective on or before 13 July 2012, it will lapse and the Acquisition will not proceed (unless the parties agree otherwise with the consent of the Panel).

Upon the Scheme becoming effective, it will be binding on all Scheme Shareholders, irrespective of whether or not they attended or voted at the Court Meeting or the General Meeting.

The new ordinary shares in Arena to be issued to Aldersgate pursuant to the Scheme will be issued fully paid and free from all liens, charges, equities, encumbrances, rights of pre-emption and any other interests of any nature whatsoever and together with all rights attaching thereto, including voting rights and the rights to receive and retain in full all dividends and other distributions declared, made or paid on or after the date of their issue.

Aldersgate reserves the right, with the consent of the Panel (where necessary), to elect to implement the Acquisition by way of a Contractual Offer as an alternative to the Scheme. Any such Contractual Offer will be subject to acceptances being received in respect of Arena Shares which, together with any Arena Shares held or acquired or agreed to be acquired by Aldersgate and parties acting in concert with it (including Reuben Brothers Limited), carry in aggregate more than 50 per cent. of the voting rights exercisable at a general meeting of Arena and will otherwise be implemented on the same terms (subject to appropriate amendments), so far as applicable, as those which would apply to the Scheme, and in compliance with applicable laws and regulations.

Further details of the Scheme, including the expected timetable of the Scheme and how Scheme Shareholders may participate in the Court Meeting and General Meeting, will be contained in the Scheme Document. It is expected that the Scheme Document, containing notices of the Court Meeting and the General Meeting together with the Forms of Proxy, will be posted to Arena Shareholders and (for information purposes only) to participants in the Arena Employee Share Schemes, as soon as practicable and in any event by no later than 28 days after the date of this announcement (or such later date as Aldersgate and Arena may, with the consent of the Panel, agree).

16 Overseas Shareholders

The availability of the Acquisition or distribution of this announcement to persons not resident in the United Kingdom may be prohibited or affected by the laws of the relevant jurisdictions. Such persons should inform themselves about, and observe, any applicable requirements. Further details in relation to overseas Arena Shareholders will be contained in the Scheme Document.

17 Delisting and re-registration

Upon or shortly after the Effective Date, it is intended that Aldersgate will procure that Arena makes applications to cancel the listing of Arena Shares on the Official List and to cancel trading in Arena Shares on the London Stock Exchange's Main Market for listed securities.

On the Effective Date, Arena will become a wholly-owned subsidiary of Aldersgate and share certificates in respect of the Arena Shares will cease to be valid and should be destroyed. In addition, entitlements to Arena Shares held within the CREST system will be cancelled on the Effective Date.

It is also proposed that on or following the Effective Date, Arena will be re-registered as a private limited company.

18 Arena issued share capital

In accordance with Rule 2.10 of the Code, Arena confirms that as at the close of business on 12 January 2012, being the last Business Day prior to this announcement, there were 364,202,007 Arena Shares (ISIN GB0000219260) in issue.

19 Documents on display

Copies of the following documents will be made available, subject to certain restrictions relating to persons resident in any Restricted Jurisdiction, on Arena's website (www.arenaleisureplc.com) by no later than 12 noon on the day following the date of this announcement until the end of the Offer Period:

- irrevocable undertakings referred to in paragraph 6 above and summarised in Appendix III to this announcement; and

- the offer-related arrangements referred to in paragraph 13 above.

20 General

The Acquisition will be made on the terms and subject to the conditions and further terms set out herein and in Appendix I to this announcement. The bases and sources of certain financial information contained in this announcement are set out in Appendix II to this announcement. A summary of the irrevocable undertakings is contained in Appendix III to this announcement. Certain terms used in this announcement are defined in Appendix IV to this announcement.

The Acquisition will be made on the terms and subject to the conditions and further terms set out herein and in Appendix I to this announcement and the further terms and conditions set out in the Scheme Document and Forms of Proxy when issued. The bases and sources of certain financial information contained in this announcement are set out in Appendix II to this announcement. A summary of the irrevocable undertakings given by the Arena Directors and the irrevocable undertakings given by certain other Arena Shareholders is contained in Appendix III to this announcement. Certain terms used in this announcement are defined in Appendix IV to this announcement.

HSBC Bank plc, which is authorised and regulated in the UK by the Financial Services Authority, is acting for Aldersgate and no one else in connection with the Acquisition and this announcement and will not be responsible to anyone other than Aldersgate for providing the protections afforded to clients of HSBC Bank plc nor for providing advice in connection with the Acquisition or any matter referred to herein.

Investec, which is authorised and regulated in the UK by the Financial Services Authority, is acting exclusively for Arena and no one else in connection with the Acquisition and this announcement and will not be responsible to anyone other than Arena for providing the protections afforded to clients of Investec nor for providing advice in connection with the Acquisition or any matter referred to herein.

Altium, which is authorised and regulated in the UK by the Financial Services Authority, is acting exclusively for Arena and no one else in connection with the Acquisition and this announcement and will not be responsible to anyone other than Arena for providing the protections afforded to clients of Altium nor for providing advice in connection with the Acquisition or any matter referred to herein.

This announcement is for information purposes only and does not constitute an offer to sell or an invitation to purchase any securities or the solicitation of an offer to buy securities, pursuant to the Acquisition or otherwise. The Acquisition will be made solely by means of the Scheme Document, which will contain the full terms and conditions of the Acquisition, including details of how to vote in favour of the Scheme. Arena will prepare the Scheme Document to be distributed to Arena Shareholders. Arena and Aldersgate urge Arena Shareholders to read the Scheme Document when it becomes available because it will contain important information relating to the Acquisition.

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

This announcement has been prepared for the purpose of complying with English law and the City Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

Overseas shareholders

The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and observe, any applicable requirements.

Unless otherwise determined by Aldersgate or required by the City Code and permitted by applicable law and regulation, the Acquisition will not be made, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and the Acquisition will not be capable of acceptance from or within a Restricted Jurisdiction. Accordingly, copies of this announcement and all documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this announcement and all documents relating to the Acquisition (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions as doing so may invalidate any purported acceptance of the Acquisition.

The availability of the Acquisition to Arena Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements.

Further details in relation to overseas Arena Shareholders will be contained in the Scheme Document.

Aldersgate reserves the right to elect, with the consent of the Panel, to implement the Acquisition by way of a Contractual Offer. In such event, the Contractual Offer will be implemented on substantially the same terms, subject to appropriate amendments, as those which would apply to the Acquisition.

Forward looking statements

This announcement, any oral statements made by Aldersgate or Arena in relation to the Acquisition and other information published by Aldersgate or Arena may contain statements about Aldersgate and Arena that are or may be forward looking statements. All statements other than statements of historical facts included in this announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "estimates", "projects" or words or terms of similar substance or the negative thereof, are forward looking statements. Forward looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Aldersgate's or Arena's operations and potential synergies resulting from the Acquisition; and (iii) the effects of government regulation on Aldersgate's or Arena's business.

Such forward looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward looking statements. Aldersgate and Arena disclaim any obligation to update any forward looking or other statements contained herein, except as required by applicable law.

Not a profit forecast

No statement in this announcement is intended as a profit forecast or profit estimate. No statement in this announcement should be interpreted to mean that the profits or earnings per share of (i) the Aldersgate Group as enlarged by the Acquisition, (ii) Aldersgate and/or (iii) Arena for current or future financial years will necessarily match or exceed the historical or published profits or earnings per share of Aldersgate or Arena, as the case may be.

Disclosure requirements of the Takeover Code (the "Code")

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

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

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

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Appendix I to this announcement contains the conditions to, and certain further terms of, the Acquisition. Appendix II to this announcement contains further details of the sources of information and bases of calculations set out in this announcement. Appendix III contains a summary of the irrevocable undertakings given by the Arena Directors, Coatbridge Limited and Rumney-Manor Limited as well as Reuben Brothers Limited. Appendix IV contains definitions of certain expressions used in this summary and in this announcement.

Information relating to Arena Shareholders

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

Publication on website

A copy of this announcement will be made available, free of charge subject to certain restrictions relating to persons in Restricted Jurisdictions at Arena's website at www.arenaleisureplc.com by no later than 12 noon (London time) on the Business Day following the date of this announcment.

Neither the content of the website referred to in this announcement nor the content of any website accessible from hyperlinks on Arena's website (or any other website) is incorporated into, or forms part of, this announcement.

APPENDIX ICONDITIONS AND FURTHER TERMS OF THE SCHEME AND THE ACQUISITION

Part A: Conditions of the Acquisition

1 The Acquisition will be conditional upon the Scheme becoming unconditional and becoming effective by no later than 13 July 2012 or such later date (if any) as Aldersgate and Arena may, with the consent of the Panel, agree and (if required) the Court may allow.

2 The Scheme will be conditional upon:

(a) approval of the Scheme by a majority in number of the Scheme Shareholders entitled to vote and present and voting, either in person or by proxy, at the Court Meeting or at any adjournment of such meeting, representing no less than 75 per cent. in value of the Scheme Shares so voted;

(b) all resolutions in connection with, or necessary to approve and implement, the Scheme as set out in the notice of the General Meeting being duly passed by the requisite majority at the General Meeting or at any adjournment of that meeting; and

(c) the sanction of the Scheme and the confirmation of the Capital Reduction in either case, without modification or with modification (on terms reasonably acceptable to Aldersgate and Arena) by the Court and the delivery for registration of copies of the Court Orders and the statement of capital attached thereto to the Registrar of Companies.

3 In addition, Arena and Aldersgate have agreed that, subject to Part B below, the Scheme will also be conditional upon the following Conditions and, accordingly, the necessary actions to make the Scheme effective will not be taken unless the following Conditions (as amended if appropriate) have been satisfied (where capable of satisfaction) or where permitted, waived, prior to the Scheme being sanctioned by the Court in accordance with Condition 2(c) above:

(a) no indication having been made by the Office of Fair Trading in the United Kingdom that the Acquisition or any matter arising therefrom or related thereto will be referred to the Competition Commission;

(b) all necessary material notifications and filings having been made in connection with the Acquisition and all statutory and regulatory obligations in connection with the Acquisition in any relevant jurisdiction having been complied with in all material respects and all Authorisations deemed reasonably necessary or appropriate by Aldersgate in any relevant jurisdiction for, or in respect of, the implementation of the Acquisition and the Scheme having been obtained in terms reasonably satisfactory to Aldersgate from all appropriate third parties, all or any applicable waiting and other time periods under any applicable legislation or regulation of any relevant jurisdiction having expired, lapsed or been terminated (as appropriate) and all such Authorisations (together with all material Authorisations deemed reasonably necessary or appropriate to carry on the business of any member of the Arena Group) remaining in full force and effect at the Effective Date and there being no notice of any intention to revoke, suspend, restrict, amend or not to renew any such Authorisations;

(c) no central bank, government or governmental, quasi-governmental, supranational, statutory or regulatory body or court with the necessary jurisdiction (each a "Third Party") having given notice of a decision to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference, or having required any action to be taken, or otherwise having done anything, or having enacted, made or proposed any statute, regulation or order, or taken any other step as a result of or in connection with the Scheme that would or might reasonably be expected to:

(i) require, prevent or delay the divestiture, or alter the terms envisaged for any proposed divestiture by any member of the Aldersgate Group or any member of the Arena Group of all or any material part of their respective businesses, assets or properties or impose any limitation on the ability of any member of the Aldersgate Group or the Arena Group to conduct their respective businesses (or any part of them) or to own any of their respective assets or property or any part of them which, in any such case, is material in the context of the Arena Group taken as a whole;

(ii) save pursuant to the Scheme or sections 974 to 991 of the Companies Act, require any member of the Aldersgate Group or of the Arena Group to make an offer to acquire any shares or other securities (or the equivalent) of any member of the Arena Group owned by any Third Party;

(iii) impose any material limitation on, or result in a material delay in, the ability of Aldersgate directly or indirectly to acquire or to hold or to exercise effectively directly or indirectly all or any rights of ownership in respect of shares or loans or securities convertible into shares or any other securities (or the equivalent) in Arena or the ability of Aldersgate to hold or exercise effectively any rights of ownership of shares, loans or other securities in, or to exercise management control over any other member of the Arena Group or require a divestiture by Aldersgate or any member of the Aldersgate Group of any rights or ownership in respect of shares or other securities in Arena which, in any case, is material in the context of the Arena Group as a whole;

(iv) otherwise adversely affect the business, assets, liabilities, financial or trading position of any member of the Arena Group, in each case to an extent which is material in the context of the Arena Group taken as a whole;

(v) result in any member of the Arena Group ceasing to be able to carry on business under any name under which it presently does so (the consequence of which would be material in the context of the Arena Group taken as a whole); or

(vi) make the Acquisition or the Scheme or, in each case, its implementation or the acquisition or proposed acquisition by Aldersgate or any member of the Aldersgate Group of any shares or other securities in, or control or management of, Arena void, unenforceable or illegal under the laws of any jurisdiction, or restrict, prohibit or delay to a material extent or otherwise materially interfere with the implementation of, or impose material additional conditions or obligations with respect to, the Scheme or the Acquisition, or otherwise materially challenge or require material amendment of, the Scheme or the Acquisition or the acquisition or proposed acquisition of any Arena Shares or the acquisition of control of Arena or any member of the Arena Group by Aldersgate,

and all applicable waiting and other time periods during which any such Third Party could decide to take, institute, implement or threaten any such action, proceedings, suit, investigation, enquiry or reference or take any other step under the laws of any jurisdiction having expired, lapsed or been terminated;

(d) since the Accounting Date and save as Disclosed, there being no provision of any arrangement, agreement, lease, licence, permit or other instrument to which any member of the Arena Group is a party or by or to which any such member or any of its assets is or may be bound or be subject, which as a consequence of the Scheme or the Acquisition or of the acquisition or proposed acquisition by Aldersgate or any member of the Aldersgate Group of any shares or other securities (or the equivalent) in Arena or because of a change in the control or management of any member of the Arena Group, would result, in any case to an extent which is material in the context of the Arena Group taken as a whole, in:

(i) any monies borrowed by, or any other indebtedness, actual or contingent, of, any member of the Arena Group being or becoming repayable, or being capable of being declared repayable immediately or prior to their or its stated maturity, or the ability of any such member to borrow monies or incur any indebtedness being withdrawn or inhibited;

(ii) the creation of any mortgage, charge or other security interest, over the whole or any part of the business, property or assets of any member of the Arena Group or any such mortgage, charge or other security interest (whenever arising or having arisen) becoming enforceable;

(iii) any such arrangement, agreement, lease, licence, permit or other instrument being terminated or adversely modified or affected or any onerous obligation or liability arising or any adverse action being taken thereunder;

(iv) any assets or interests of any member of the Arena Group being or falling to be disposed of or charged or any right arising under which any such asset or interest could be required to be disposed of or charged otherwise than in the ordinary course of business;

(v) the rights, liabilities, obligations or interests of any member of the Arena Group in, or the business of any such member with, any person, firm or body (or any arrangement or arrangements relating to any such interest or business) being terminated, adversely modified or affected;

(vi) the value or financial or trading position or profits of Arena or any member of the Arena Group being prejudiced or adversely affected; or

(vii) the creation of any liability (actual or contingent) by any member of the Arena Group (other than in the ordinary course of business);

(e) since the Accounting Date and save as Disclosed, no resolution of Arena Shareholders in relation to any acquisition or disposal of assets or shares (or the equivalent thereof) in any undertaking or undertakings (or in relation to any merger, demerger, reconstruction, amalgamation or scheme) being passed at a meeting of Arena Shareholders;

(f) since the Accounting Date and save as Disclosed, no member of the Arena Group having:

(i) issued or agreed to issue or authorised or proposed or announced its intention to authorise or propose the issue of additional shares of any class, or securities convertible into, or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares or convertible securities (save as (i) between Arena and subsidiaries or associated undertakings of Arena; (ii) for the issue of Arena Shares pursuant to or in connection with the exercise of options granted under, or the grant of options or rights under, the Arena Employee Share Schemes; and (iii) any Arena Shares issued pursuant to the implementation of the Scheme or the Acquisition);

(ii) recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus issue, dividend or other distribution whether payable in cash or otherwise other than dividends (or other distributions whether payable in cash or otherwise) lawfully paid or made by any subsidiary or associated undertaking of Arena;

(iii) other than pursuant to the implementation of the Acquisition (and save for transactions between Arena and its subsidiaries or associated undertakings and transactions in the ordinary course of business) implemented, effected, authorised, proposed or announced its intention to implement, effect, authorise or propose any merger, demerger, reconstruction, amalgamation, scheme, commitment or acquisition or disposal of assets or shares (or the equivalent thereof) in any undertaking or undertakings that is material in the context of the Arena Group taken as a whole (including in particular a disposal of any interest in AtTheRaces Holdings Limited) or any material change in its share or loan capital (save for the issue of Arena Shares on the exercise or vesting of options or awards granted before the date of this announcement under the Arena Employee Share Schemes or the issue of Arena Shares pursuant to the implementation of the Scheme);

(iv) (save for transactions between Arena and its subsidiaries or associated undertakings and save for transactions in the ordinary course of business) disposed of, or transferred, mortgaged or created any security interest over any asset or any right, title or interest in any asset that is material in the context of the Arena Group taken as a whole or authorised, proposed or announced any intention to do so;

(v) (save for transactions between Arena and its subsidiaries or associated undertakings) issued, authorised or proposed or announced an intention to authorise or propose, the issue of any debentures or (save for transactions between Arena and its subsidiaries or associated undertakings or transactions under existing credit arrangements or in the ordinary course of business) incur any indebtedness or contingent liability;

(vi) entered into or varied or authorised, proposed or announced an intention to enter into or vary any contract, arrangement, agreement, transaction or commitment (whether in respect of capital expenditure or otherwise) otherwise than in the ordinary course of business which is of a long term, unusual or onerous nature or magnitude or which involves or is reasonably likely to involve an obligation of such a nature or magnitude which is, in any such case, or which is or is likely to be restrictive on the business of any member of the Arena Group, which is, in any such case, material in the context of the Arena Group (including but not limited to any media rights agreement);

(vii) entered into or varied to a material extent or authorised, proposed or announced its intention to enter into or vary to a material extent the terms of, or make any offer (which remains open for acceptance) to enter into or vary to a material extent the terms of, any service agreement with any director or senior executive of Arena, save for salary increases, bonuses or variations of terms in the ordinary course;

(viii) other than as required by the implementation of the Scheme or the Acquisition, proposed, agreed to provide or modified the terms of any share option scheme, incentive scheme or other benefit relating to the employment or termination of employment of any person employed by the Arena Group, which is, in any such case, material in the context of the Arena Group;

(ix) purchased, redeemed or repaid or announced a proposal to purchase, redeem or repay any of its own shares or other securities or reduced or proposed the reduction of any part of its share capital, except pursuant to the implementation of the Scheme or the Acquisition;

(x) other than in the ordinary course of business, waived, compromised or settled any claim which is material in the context of the Arena Group as a whole;

(xi) save as disclosed on publicly available registers or as envisaged in accordance with the terms of the Acquisition or the Scheme, made any alteration to its articles of association;

(xii) made or agreed or consented to any significant change to the terms of the trust deeds constituting the pension schemes established for its directors and/or employees and/or their dependants or to the benefits which accrue, or to the pensions which are payable, thereunder, or to the basis on which qualification for or accrual or entitlement to such benefits or pensions are calculated or determined or to the basis upon which the liabilities (including pensions) of such pension schemes are funded or made, or agreed or consented to any change to the trustees involving the appointment of a trust corporation which is, in any such case, material in the context of the Arena Group taken as a whole;

(xiii) been unable, or admitted in writing that it is unable, to pay its debts or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of any business which is material in the context of the Arena Group as a whole;

(xiv) (other than in respect of a company which is dormant and was solvent at the relevant time) taken or proposed any corporate action or had any action or proceedings or other steps instituted against it for its winding-up (voluntary or otherwise), dissolution or reorganisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of all or any material part of its assets or revenues or any analogous proceedings in any jurisdiction or appointed any analogous person in any jurisdiction; or

(xv) entered into any agreement, arrangement or commitment or passed any resolution or made any proposal or announcement with respect to, or to effect, any of the transactions, matters or events referred to in this Condition (f);

(g) since the Accounting Date and save as Disclosed, there having been:

(i) no adverse change or deterioration in the business, assets, financial or trading position or profits or prospects of any member of the Arena Group which is material in the context of the Arena Group taken as a whole;

(ii) no litigation, arbitration proceedings, prosecution or other legal proceedings having been announced or instituted by or against or remaining outstanding against or in respect of any member of the Arena Group and no enquiry or investigation by or complaint or reference to any Third Party against or in respect of any member of the Arena Group having been threatened, announced or instituted or remaining outstanding, against or in respect of any member of the Arena Group and which in any such case is material in the context of the Arena Group taken as a whole;

(iii) no contingent or other liability having arisen or become apparent to any member of the Aldersgate Group which might reasonably be expected to materially adversely affect any member of the Arena Group which is material in the context of the Arena Group taken as a whole; and

(iv) no steps having been taken which are likely to result in the withdrawal (without replacement), cancellation, termination or modification of any licence held by any member of the Arena Group which is necessary for the proper carrying on of its business which is material in the context of the Arena Group taken as a whole; and

(h) save as Disclosed, Aldersgate not having discovered:

(i) that the financial, business or other information concerning the Arena Group that has been Disclosed at any time by or on behalf of any member of the Arena Group is misleading, contains a misrepresentation of fact or omits to state a fact necessary to make the information contained therein not misleading and which is in any case, material in the context of the Arena Group as a whole;

(ii) that any member of the Arena Group is, otherwise than in the ordinary course of business, subject to any liability, contingent or otherwise, which is material in the context of the Arena Group taken as a whole; or

(iii) any information which adversely affects the import of any information Disclosed at any time by or on behalf of the Arena Group and which is material in the context of the Arena Group taken as a whole.

Part B: Certain further terms of the Acquisition

1 Subject to the requirements of the Panel, or if required, the Court, Aldersgate reserves the right to waive, in whole or in part, all or any of the Conditions set out in paragraph 3 of Part A above. The Scheme will not become effective and will lapse unless the Conditions have been fulfilled or (if capable of waiver) waived or where appropriate, have been determined by Aldersgate to be or remain satisfied by no later than the date referred to in Condition 1 (or such later date as Aldersgate, Arena, the Panel and, if required, the Court, may allow).

2 Aldersgate shall be under no obligation to waive or treat as satisfied any of the Conditions set out in paragraphs 3(a) to (g) of Part A (inclusive) above by a date earlier than the latest date for the fulfilment of the Conditions notwithstanding that the other conditions of the Acquisition may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such Conditions may not be capable of fulfilment.

3 If Aldersgate is required by the Panel to make an offer for Arena Shares under the provisions of Rule 9 of the Code, Aldersgate may make such alterations to any of the above Conditions, including Condition 1 above, and to the terms of the Acquisition as are necessary to comply with the provisions of that Rule.

4 Aldersgate reserves the right, with the consent of the Panel (where necessary), to elect to implement the Acquisition by way of a Contractual Offer (as defined in Part 28 of the Companies Act) as an alternative to the Scheme. Any such Contractual Offer will be implemented on substantially the same terms, so far as applicable, as those which would apply to the Scheme, subject to appropriate amendments to reflect the change in method of effecting the Acquisition including (without limitation and subject to the consent of the Panel) a condition of acceptances being received in respect of Arena Shares which, together with the Arena Shares held or acquired or agreed to be acquired by Aldersgate and parties acting in concert with it (including Reuben Brothers Limited), carry in aggregate more than 50 per cent. of the voting rights exercisable at a general meeting of Arena.

5 The Scheme will lapse if there is a reference to the Competition Commission before the later of the time of the Court Meeting and the time of the General Meeting. In such event Arena will not be bound by the terms of the Acquisition or the Scheme.

6 The availability of the Acquisition and this announcement to Arena Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements. Further details in relation to overseas shareholders will be contained in the Scheme Document.

7 Under Rule 13.5 of the Code, Aldersgate may only invoke a Condition to the Acquisition so as to cause the Acquisition not to proceed, to lapse or to be withdrawn where the circumstances which give rise to the right to invoke the Condition are of material significance to Aldersgate in the context of the Acquisition. The Conditions set out in paragraphs 1 and 2 of Part A above are not subject to Rule 13.5 of the Code.

8 The Acquisition and Scheme will be governed by English law and will be subject to the exclusive jurisdiction of the English courts.

APPENDIX IISOURCES OF INFORMATION AND BASES OF CALCULATION

In this announcement:

(i) The value placed by the Acquisition on the existing issued and to be issued share capital of Arena (approximately £167 million) is based on 364,202,007 Arena Shares in issue on 12 January 2012, being the last dealing day prior to the date of this announcement, and options and rights being exercised prior to the Scheme Record Time over a further 12,313,933 Arena Shares.

(ii) The closing share price of Arena Shares on 12 January 2012 referred to in this announcement is derived from the Daily Official List of the London Stock Exchange.

(iii) Unless otherwise stated, the financial information relating to Arena is extracted from the Annual Report and Accounts of Arena for the financial year to 31 December 2010 and the Interim Report.

APPENDIX IIIIRREVOCABLE UNDERTAKINGS

Directors

The Arena Directors have given irrevocable undertakings to vote or procure the vote in favour of the Acquisition as follows:

These irrevocable undertakings include undertakings from the Arena Directors who hold Arena Shares in respect of their entire holdings of Arena Shares:

(i) to vote or procure the vote in favour of the Scheme and the General Meeting Resolutions; and

(ii) if Aldersgate exercises its right to structure the Acquisition as a Contractual Offer, to accept or procure the acceptance of such Contractual Offer.

In addition, the irrevocable undertakings from the Arena Directors include undertakings to:

(i) recommend all shareholders of the Company to vote in favour of the Scheme (or, if the Acquisition is implemented by way of an Offer, accept the Offer) and recommend all Arena Shareholders to vote in favour of any resolution or resolutions for the purpose of implementing the Scheme or an Offer successfully;

(ii) not take any action or make any statement or announcement which is prejudicial to the success of the Acquisition or which may impede, prevent or delay the making of the Scheme or an Offer or its implementation; and

(iii) not actively solicit an offer for all or any part of the issued share capital of the Company, or proposal for a merger of the Company with any other entity.

The irrevocable undertakings are subject to the Arena Directors' duties to Arena in their capacity as directors and their obligations under the City Code.

These irrevocable undertakings will cease to be binding if:

(i) a bona fide third party announces a firm intention to make an offer to acquire the whole of the issued ordinary share capital of the Company save for any shares owned by that third party or any person acting in concert with it on terms which provide for consideration of no less value than 50 pence per ordinary share provided that the Arena Directors obligations under their undertaking will not lapse unless the Company or the relevant Arena Director has notified Aldersgate of the consideration payable per ordinary share under the terms of the proposed offer at least 5 business days prior to the announcement of the competing offer and Aldersgate has not agreed to increase the consideration to be paid per ordinary share pursuant to the Acquisition to an amount equal to or more than the increased consideration under the proposed offer (or, if the increased consideration includes a non-cash element, an amount which, in the reasonable opinion of HSBC Bank plc, is of equivalent value to the increased consideration); or

(ii) the Scheme does not become effective, lapses or is withdrawn in accordance with its terms, unless Aldersgate exercises its right to structure the Acquisition as a Contractual Offer, in which case the irrevocable undertaking will cease to have effect on the withdrawal or lapsing of the Contractual Offer.

Certain Other Arena Shareholders

Aldersgate has received an irrevocable undertaking from each of Coatbridge Limited and Rumney-Manor Limited in respect of 40,767,217 and 108,896,000 and Arena Shares respectively, representing in aggregate approximately 41.09 per cent. of the existing issued ordinary share capital of Arena, among other things:

(i) to vote in favour of the Scheme and the General Meeting Resolutions; and

(ii) if Aldersgate exercises its rights to structure the Acquisition as a Contractual Offer, to accept or procure the acceptance of such Contractual Offer. 

These irrevocable undertakings will cease to be binding if:

(i) Aldersgate announces, with the consent of the Panel, that it does not intend to make or proceed with the Acquisition and no new, revised or replacement Scheme or Offer is announced by Aldersgate in accordance with Rule 2.7 of the Code at the same time;

(ii) the Scheme or an Offer lapses or is withdrawn without becoming unconditional in all respects following an indication having been made by the Office of Fair Trading in the United Kingdom that the Acquisition (or any matter arising therefrom or related thereto) will be referred to the Competition Commission;

(iii) a bona fide third party announces a firm intention to make an offer to acquire the whole of the issued ordinary share capital of the Company save for any shares owned by that third party or any person acting in concert with it on terms which provide for consideration of no less value than 50 pence per ordinary share provided that Coatbridge Limited's and Rumney-Manor Limited's obligations under their respective undertakings will not lapse unless the Company or the relevant shareholder has notified Aldersgate of the consideration payable per ordinary share under the terms of the proposed offer at least 5 business days prior to the announcement of the competing offer and Aldersgate has not agreed to increase the consideration to be paid per ordinary share pursuant to the Acquisition to an amount equal to or more than the increased consideration under the proposed offer (or, if the increased consideration includes a non-cash element, an amount which, in the reasonable opinion of HSBC Bank plc, is of equivalent value to the increased consideration);

(iv) the Scheme Document (or if the Acquisition is implemented by way of an Offer, the Offer Document) is not despatched to Arena Shareholders on or before the date which is 28 days from the date of this announcement or such later date (not being later than 17 February 2012 unless Aldersgate, either Coatbridge Limited or Rumney-Manor Limited (as applicable) agree otherwise) as may be agreed between Aldersgate and the Panel; or

(v) the Scheme has not become effective (or if the Acquisition is implemented by way of an Offer, has not been declared or become unconditional in all respects) by the date which falls six months after the date of this announcement.

Reuben Brothers Limited

Reuben Brothers Limited has undertaken to Arena, in respect of a total of 108,639,495 Arena Shares representing 29.8 per cent. of the existing issued ordinary share capital of Arena, to vote in favour of the resolutions to be proposed at the General Meeting.

The undertaking will cease to be binding if:

(i) Aldersgate announces, with the consent of the Panel, that it does not intend to make or proceed with the Acquisition and no new, revised or replacement Scheme or Offer is announced by Aldersgate in accordance with Rule 2.7 of the Code at the same time;

(ii) a bona fide third party announces a firm intention to make an offer to acquire the whole of the issued ordinary share capital of Arena on terms which provide for consideration of no less value than 50 pence per ordinary share;

(iii) the Scheme Document (or if the Acquisition is implemented by way of an Offer, the Offer Document) is not despatched to Arena Shareholders on or before the date which is 28 days from the date of this announcement or such later date (not being later than 17 February 2012 unless Arena and Reuben Brothers Limited (each in respect of their shareholding) agree otherwise) as may be agreed between Aldersgate and the Panel; or

(iv) the Scheme has not become effective (or if the Acquisition is implemented by way of an Offer, has not been declared or become unconditional in all respects) by the date which falls six months after the date of this announcement.

APPENDIX IVDEFINITIONS

The following definitions apply throughout this announcement unless the context requires otherwise.

For the purposes of this announcement, "subsidiary", "subsidiary undertaking", "undertaking" and "associated undertaking" have the respective meanings given thereto by the Companies Act.

All references to "pounds", "pounds Sterling", "Sterling", "£", "pence", "penny" and "p" are to the lawful currency of the United Kingdom.

All the times referred to in this announcement are London times unless otherwise stated.

References to the singular include the plural and vice versa.