BILL.L Regulatory News (BILL)

15 Dec 2005 16:06

Billing Services Group Limited15 December 2005 For Immediate Release 15 December 2005 BILLING SERVICES GROUP LIMITED ("BSG" or the "Company") Recommended Offer by Evolution Securities Limited on behalf of Billing Services Group Limited for the entire share capital of United Clearing Plc The Boards of Billing Services Group Limited (AIM: BILL) - a leading clearing,settlement, payment and financial risk management solutions provider for thecommunications industry, and United Clearing Plc (AIM: UCL) - a provider ofoutsourcing support services to the global cellular industry, today announcethey have reached agreement on the terms of a recommended offer ("the Offer") toacquire the entire issued and to be issued share capital of United Clearing Plc. Transaction Highlights • Recommended all share offer to be made by Evolution Securities, on behalf of BSG for all of the existing issued share capital of United Clearing Plc. • The Offer is being made on the basis of 1.385 New BSG Shares for each United Clearing Share. • The Offer values each United Clearing Share at approximately 131.6 pence and all of the existing issued United Clearing Shares at approximately £23.5m, on the basis of the Closing Price of 95 pence per BSG Share on 14 December 2005 (being the last business day prior to the publication of this document). This represents a premium of 8.3 per cent. over the Closing Price of United Clearing on 14 December 2005 (being the last business day prior to the announcement of this Offer) and a premium of 14.9 per cent. over the Closing Price of United Clearing on 11 October 2005 (being the last business day prior to the commencement of the offer period). • As at the date of this announcement, BSG has received irrevocable commitments to accept the Offer in respect of 5,467,609 United Clearing Shares (representing approximately 30.6 per cent of the existing issued share capital of United Clearing). Rationale for and benefits of the Offer • Complementary fit between United Clearing products to BSG's existing wireless product offering. • BSG principally sells GSM data clearing services into the mobile telecommunications industry whilst United Clearing provides financial settlement services. • BSG will investigate cross selling its advanced funding services, currently offered in the U.S. fixed-line market, to certain United Clearing wireless customers. • The skills and expertise of the United Clearing management team will further enhance its position in the GSM clearing and settlements market. • BSG intends to leverage United Clearing's capabilities in the establishment of its new convergence solutions. Patrick J. Haynes III, Chief Executive of Billing Services Group Limitedcommenting on the acquisition said;"We are delighted to be announcing this offer for United Clearing today. Weanticipate excellent operational synergies between the two businesses andbelieve the enhancements to our existing wireless offering will provide thefoundation to cross sell new services into our existing client base in bothEurope and North America." Commenting on the Offer Atul Devani, Chief Executive of United Clearing Plcsaid;"United Clearing is delighted by Billing Services Group's announcement.The range of services and expertise offered by both companies will enablecarriers across the world to take advantage of combining the advanced clearingand settlement solutions for fixed, wireless and next generation technologies." Billing Services Group Ltd Tel: +1 847 832 0077Patrick J. Haynes III, Chief ExecutiveRandall Brouckman, Chief Operating Officer Buchanan Communications Tel: +44 (0)20 7466 5000Bobby Morse / Jeremy Garcia / James Strong Evolution Securities Tel: +44 (0)20 7071 4300Michael Brennan / Stuart Andrews / Fergus Marcroft Binns & Co PR Ltd Tel: +44 (0)20 7786 9600Peter Binns Seymour Pierce Limited Tel: +44 (0)20 7107 8000Mark Percy About Billing Services Group LimitedBilling Services Group Limited is a leading global provider of clearing,settlement, payment and financial risk management solutions for communicationsservice providers. The company processes over 15 billion transactions annuallyfor 570 of the world's largest communications companies throughout NorthAmerica, Europe and Asia. With a ubiquitous, scalable platform and an extensiveportfolio of clearinghouse services for wireless, fixed-line, WLAN, content andnext-generation networks, BSG monetises network transactions by facilitating thefinancial exchange of its customers' services. BSG meets the needs of today'scomplex network interconnections and anticipates the requirements of convergingtechnologies, allowing for rapid and reliable deployment. Headquartered inGlenview, Illinois, USA, BSG is publicly traded on the London Stock Exchange(AIM) under the ticker symbol BILL. For more information, visitwww.billingservicesgroup.com. About United Clearing PlcHeadquartered in London, United Kingdom, with offices in the US and Hong Kong,United Clearing is a fast growing outsourcing support services company providingspecialist financial clearing and settlement services to the global cellularindustry. It is a specialist provider in the marketplace focused 'solely on thefinancial clearing component' of the international roaming settlement process. Notice: The United Clearing Directors accept responsibility for the informationcontained in sections 1, 5, 7(ii) and 14 in this announcement to the extent thatthey relate to United Clearing, themselves and their immediate families andconnected persons. The BSG Directors accept responsibility for all the otherinformation contained in this announcement. To the best of the knowledge andbelief of the BSG Directors and the United Clearing Directors (who have takenall reasonable care to ensure that such is the case) the information containedherein for which they are respectively responsible is in accordance with thefacts and does not omit anything likely to affect the import of suchinformation. Evolution Securities Limited which is regulated in the U.K. by the FinancialServices Authority, is acting exclusively for BSG in connection with the Offerand no one else and will not be responsible to anyone other than BSG forproviding the protections afforded to clients of Evolution Securities Limitednor for providing advice in relation to the Offer. Seymour Pierce Limited, which is regulated in the U.K. by the Financial ServicesAuthority, is acting as financial advisor to United Clearing and no one else inconnection with the Offer and will not be responsible to anyone other thanUnited Clearing for providing the protections afforded to clients of SeymourPierce Limited nor for providing advice in relation to the Offer. No offer or invitation to acquire or exchange securities in BSG or UnitedClearing is being made now. Any such offer or invitation will only be made indocuments to be published in due course (if any) and any such acquisition orexchange should be made solely on the basis of information contained in any suchdocuments. The Offer will not be made, directly or indirectly, in or into, or by the use ofmails or any means or instrumentality (including, without limitation,telephonically or electronically) of interstate or foreign commerce of, or anyfacility of a national securities exchange of the United States, Canada,Australia or Japan and the Offer will not be capable of acceptance by any suchuse, means, instrumentality or facilities from or within the United States,Canada, Australia or Japan. Accordingly, copies of this announcement and anyrelated documents are not being, and must not be, directly or indirectly, mailedor otherwise forwarded, distributed or sent in or into or from the UnitedStates, Canada, Australia or Japan and persons receiving this announcement andany related document (including custodians, nominees and trustees) must not mailor otherwise forward, distribute or send it in, into or from the United States,Canada, Australia or Japan or such other jurisdiction where to do so wouldconstitute a violation of the relevant laws of such jurisdiction. Doing so mayrender invalid any purported acceptance of the Offer. BSG Shares have not been registered under the U.S. Securities Act and may not beoffered, sold, pledged or otherwise transferred except (a)(1) in an OffshoreTransaction complying with Rule 904 of U.S. Regulation S or (2) pursuant to anexemption from registration under the U.S. Securities Act and (b) in accordancewith all applicable securities laws of the states of the United States. The availability of the Offer to persons who are not resident in the UnitedKingdom may be affected by the laws of the relevant jurisdictions. Persons whoare not resident in the United Kingdom should inform themselves about andobserve any applicable requirements.The Panel wishes to draw attention to certain U.K. dealing disclosurerequirements following the announcement of the Offer. An "offer period" isdeemed to commence at the time when an announcement is made of a proposed orpossible offer, with or without terms. Accordingly, the offer period began on 12October 2005.Terms defined in the Announcement attached to this document shall have the samemeaning herein unless the context requires otherwise. Dealing Disclosure Requirements: Under the provisions of Rule 8.3 of the City Code on Takeovers and Mergers (the"Code"), if any person is, or becomes "interested" (directly or indirectly) in1% or more of any class of "relevant securities" of BSG or of United Clearing,all "dealings" in any "relevant securities" of that company (including by meansof an option in respect of, or a derivative referenced to, any such "relevantsecurities") must be publicly disclosed by no later than 3.30 pm (London time)on the London business day following the date of the relevant transaction. Thisrequirement will continue until the date on which the offer becomes, or isdeclared, unconditional as to acceptances, lapses or is otherwise withdrawn oron which the "offer period" otherwise ends. If two or more persons act togetherpursuant to an agreement or understanding, whether formal or informal, toacquire an "interest" in "relevant securities" of BSG or United Clearing, theywill be deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevantsecurities" of BSG or United Clearing by BSG or United Clearing, or by any oftheir respective "associates", must be disclosed by no later than 12.00 noon(London time) on the London business day following the date of the relevanttransaction. A disclosure table, giving details of the companies in whose "relevantsecurities" "dealings" should be disclosed, and the number of such securities inissue, can be found on the Takeover Panel's website atwww.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Code, which can also be found on thePanel's website. If you are in any doubt as to whether or not you are requiredto disclose a "dealing" under Rule 8, you should consult the Panel. Recommended Offer by Evolution Securities Limited on behalf of Billing Services Group Limited for the entire share capital of United Clearing Plc 15 December 2005 1. Introduction The Boards of BSG and United Clearing announce the terms of a recommended offerto be made by Evolution Securities on behalf of BSG for the whole of the issuedand to be issued share capital of United Clearing. 2. The Offer On behalf of BSG, Evolution Securities will offer to acquire all of the UnitedClearing Shares on the following basis: for each United Clearing Share 1.385 New BSG Shares and so in proportion for any other number of United Clearing Shares held. The Offer values each United Clearing Share: • At approximately 131.6 pence and all of the existing issued United Clearing Shares at approximately £23.5m, on the basis of the Closing Price of 95 pence per BSG Share on 14 December 2005 (being the last business day prior to the publication of this document). This represents a premium of 8.3 per cent. over the Closing Price of United Clearing on 14 December 2005 (being the last business day prior to the announcement of this Offer) and a premium of 14.9 per cent. over the Closing Price of United Clearing on 11 October 2005 (being the last business day prior to the commencement of the offer period). • At approximately 132 pence and all of the existing issued United Clearing Shares at approximately £23.6m, on the basis of the Closing Price of 95.3 pence per BSG Share based on the average Closing Price between 2 December 2005 and 8 December 2005 (being the agreed reference period for this Offer). This represents a premium of 8.6 per cent. over the closing share price of United Clearing on 14 December 2005 (being the last business day prior to the announcement of this Offer). The United Clearing Shares will be acquired under the Offer fully paid and freefrom all liens, equities, charges, encumbrances and other interests and (save asprovided to the contrary below) together with all rights now or hereafterattaching to them, including the right to receive all dividends declared, madeor paid after the date of this announcement. However, the existing UnitedClearing Shareholders will be entitled to retain the final dividend of 2p perUnited Clearing Share declared at the Annual General Meeting of United Clearingheld on 5 December 2005. Consequently United Clearing will pay this dividend toUnited Clearing Shareholders who's names appeared on the register of members ofUnited Clearing on the relevant record date (being 9 December 2005). The New BSG Shares to be issued pursuant to the Offer will, when issued, becredited as fully paid and free from all liens, charges and encumbranceswhatsoever and will rank pari passu in all respects with the existing BSGShares. Fractions of New BSG Shares will not be allotted or issued pursuant tothe Offer but will be aggregated and retained for the benefit of BSG. The Offer will be made in accordance with the requirements of the City Code andwill be subject to the conditions set out in Appendix I, the Offer Document andthe Form of Acceptance.The Offer will extend to the holders of all existing issued United ClearingShares and to the holders of any United Clearing Shares which areunconditionally allotted or issued prior to the date on which the Offer closes(or such earlier date as BSG may, subject to the City Code, decide) includingUnited Clearing Shares to be issued pursuant to the exercise of options underthe United Clearing Share Option Schemes or otherwise. Full acceptance of the Offer by holders of United Clearing Shares (excluding anyUnited Clearing Shares resulting from the exercise of any options under theUnited Clearing Share Option Schemes) will result in the issue of approximately29.4 million New BSG Shares, representing approximately 10.4 per. cent of theenlarged issued BSG share capital. 3. Irrevocable undertakings to accept the Offer All of the United Clearing Directors have entered into irrevocable undertakingsto accept, or procure the acceptance of, the Offer when made in respect of theirentire beneficial holdings of United Clearing Shares comprising, in aggregate,3,660,774 United Clearing Shares which represent approximately 20.5% of theexisting issued share capital of United Clearing. These undertakings, which areconditional upon the Offer Document being posted within 28 days of the date ofthis announcement and the offer not lapsing or being withdrawn, will continue tobe binding even in the event of a higher competing offer for United Clearingbeing announced and cannot be withdrawn other than in the event of the Offerlapsing or being withdrawn. Madoff Securities International Limited ("Madoff") has entered into anirrevocable undertaking to accept, or procure the acceptance of, the Offer whenmade in respect of its entire beneficial holdings of United Clearing Sharescomprising 1,806,835 United Clearing Shares which represent approximately 10.1%of the existing issued share capital of United Clearing. This undertaking, whichis conditional upon the Offer Document being posted within 28 days of the dateof this announcement and the Offer not lapsing or being withdrawn, will not bebinding in the event of a competing offer for United Clearing which values aUnited Clearing Share at a price of at least 152.35 per cent. (i.e. 110 percent. of 1.385) of the average Closing Price for BSG Shares for the 5consecutive business days immediately preceding the date of this announcement. Accordingly, irrevocable undertakings to accept, or procure acceptance of, theOffer have been received from United Clearing Shareholders who, in aggregate,have an interest in 5,467,609 United Clearing Shares, representing approximately30.6 per cent. of the existing issued share capital of United Clearing. Save for the irrevocable undertakings referred to above, neither BSG nor, so faras BSG is aware, any party acting in concert with BSG, owns or controls anyUnited Clearing Shares or holds any options to purchase (or rights to subscribefor) United Clearing Shares or has entered into any derivatives referenced toUnited Clearing Shares which remain outstanding nor has BSG nor, so far as BSGis aware, any associate of BSG procured any irrevocable commitments or lettersof intent to accept the Offer. 4. Information on BSG The Group is a leading global provider of clearing and settlement services fortraditional and emerging voice, data and video networks. Its diverse productofferings service fixed wireline network providers and wireless carriers. The Group was formed by the acquisition of BC Holdings I Corporation, the parentcompany of Billing Concepts, Inc. and Enhanced Services Billing, Inc, and thecontribution of Thurston Communications Corporation and its two LEC billingsubsidiaries, ACI Billing Services, Inc. and HBS Billing Services Company, byAvery Communications, Inc. In August 2005 BSG acquired EDS IOS. The acquisition positioned BSG as a majorplayer in the growing market for third party clearinghouses for mobile local andglobal wireless carriers. At the time of the acquisition, EDS IOS had more than120 mobile network customers in 60 markets across the U.K., Europe and Asia. Thetransaction provided BSG with a new operating segment, leveraging its alreadystrong business model by diversifying its product and service offerings andaugmenting its exposure to global markets. Additionally, the Directors believethe acquisition uniquely positions BSG to offer clearing and settlementsolutions for the emerging convergence market. The Group has offices in Glenview, Illinois; San Antonio, Texas; andRusselsheim, Germany. The BSG Directors now believe that opportunities are becoming available to theGroup which will allow the Group to apply the skills it has acquired in its coreareas to other product areas and geographies. The new product areas relate tothe industry wide changes to billing systems, transaction services and paymentmethods which are currently occurring as a result of the rapid changes in theproducts offered by telecommunications providers. 5. Information on United Clearing United Clearing is a fast-growing outsourcing support services company providingspecialist financial clearing and settlement services to the global cellularindustry. It is a specialist provider in the marketplace focused 'solely on thefinancial clearing component' of the international roaming settlement process. United Clearing has a dedicated and sales driven management team with over 35years combined experience in banking, software technology and the GSM roamingindustry. United Clearing employs 44 people in London with representative salesoffices in Hong Kong and, Florida. United Clearing has designed a service that offers a mobile operator the abilityto conduct financial clearing and settlement at potentially less cost than theycould do themselves. This is not only more efficient but actually could enablethem to benefit from cost savings as well, leaving them to focus on their corebusiness. The primary target market for United Clearing's services are GSM networkoperators. With over one billion customers globally, GSM mobile technology isthe most widely used wireless digital platform in the world and captures over 70per cent of the world's digital wireless market. GSM mobile technology has beenadopted by more than 600 network operators in over 200 countries. UnitedClearing has recognised a position within the market to provide globalsettlement between international network operators for GSM roaming. The continued level of growth for GSM network operators and related companiescreates more network operators and more complexity in the financial clearingmarketplace, much to the benefit of the providers of outsourced clearing. Inthis environment, the United Clearing Directors are of the opinion that UnitedClearing is well positioned to capitalise on each opportunity as it arises. The United Clearing roaming settlement service allows mobile network operatorsto outsource the function of financial settlement for the payment/collection ofroaming invoices. The system provides settlement between network operators,calculating the net position between operators and settling the amount in thechosen currency of the receiving operator. As part of the service, a fullydefined reconciliation procedure ensures that any disputes are resolved in linewith the regulations specified by the GSM Association. The cycle of settlementis set to cover a 30-day period, which is the current standard in the industry. 6. Background to and reasons for the Offer (i) The United Clearing products are complementary to BSG'sexisting wireless product offerings. BSG principally sells GSM data clearingservices into the mobile telecommunications industry whilst United Clearingprovides financial settlement services. Some of BSG's wireless competitors arecurrently offering both products to prospective customers and the combinationwill provide a compelling solution to the market. Furthermore, BSG willinvestigate cross selling some of its advanced funding services currentlyoffered in the U.S. fixed-line market to certain United Clearing wirelesscustomers. (ii) BSG believes the skills and expertise of the United Clearingmanagement team will further enhance its position in the GSM clearing andsettlements market. (iii) BSG intends to leverage United Clearing's capabilities inthe establishment of its new convergence solutions. 7. Current Trading (i) BSG At the time of the Company's announcement of its interim results on 30 September2005, the Company stated: "At the time of the Company's announcement of its acquisition of EDS IOS on 29July 2005, the Company stated that: "Current trading in BSG's existing core U.S. wireline business remains strongand is currently ahead of management's expectations at the time of BSG'sadmission to trading on AIM. EDS IOS's most recent management accounts show thatEDS IOS is trading in line with its management's expectations." Patrick J. Haynes, III, Chief Executive Officer of the Company, stated, "I amvery pleased to report that the above continues to be the case in bothbusinesses." Mr. Haynes continued, "Our results during the first half of 2005reflect a sound business model and an aggressive agenda to expand the scope andgeographic breadth of our service offerings. The acquisition of the EDS IOSbusiness gives us an immediate worldwide presence in several attractive andrapidly growing markets, including Europe and Asia. We are well positioned toexecute our long-term strategic objectives, and I am confident in our ability tomeet financial expectations for 2005. Given the size and global breadth of thebusiness, we may consider a move to the Official List of the London StockExchange during 2006 to further enable us to meet these objectives." (ii) United ClearingUnited Clearing announced on 7 November 2005 its final results for the yearended 30 September 2005 which showed strong growth with turnover up 80 per cent.to £3,223,000 (2004: £1,788,000) and PBT up 349 per cent. to £1,172,000 (2004:£261,000).United Clearing is firmly focussed on delivering high quality servicesto its customer base which includes blue chip network operators such as OrangeU.K., '3' U.K., O2 Germany and Telstra Australia. In the United ClearingDirectors' opinion global mobile operator groups are increasingly makingprocurement decisions on a group-wide basis and United Clearing is a leadingplayer in the selections processes run by these operators. For example, in thelast financial year, United Clearing secured a framework agreement with theOrange group as well as winning significant individual deals, such as announcedby O2 U.K. recently, which adds to the existing base of O2 companies alreadyusing United Clearing's services in Germany, Ireland and the Isle of Man. Alsoin the second half of the last financial year, United Clearing announced astrategic partnership with N-Tel, a provider of technical solutions for pre-paidroaming, that launched United Clearing into the clearing and financialsettlement services for the pre-pay roaming market. United Clearing alsocontinued to develop its presence in the U.S. and this year successfullylaunched a new financial clearing service called ACTiNET which clears roamingrevenues between TDMA and CDMA networks (TDMA and CDMA are the cellulartechnologies used primarily in the U.S. and Central and South America). 8. Directors and employees Board of the Enlarged Group Following the Offer becoming or being declared unconditional in all respects,the Board of Directors of the Enlarged Group will comprise: Name Current RolePatrick David Heneghan Non-Executive ChairmanPatrick James Haynes,III Chief Executive OfficerMichael Joseph Labedz Chief Operating OfficerNorman McKenzie Phipps Chief Financial OfficerPhilip James Dance Non-Executive DirectorLeighton Warren Smith Non-Executive DirectorPeter Shanahan Walker Non-Executive DirectorJoseph Alan Lindauer Non-Executive Director Employees The Board of BSG has confirmed that, following the Offer becoming or beingdeclared unconditional in all respects, the existing employment rights,including pension rights, of all employees of United Clearing will be fullysafeguarded. United Clearing Directors It has been proposed that Atul Devani (Chief Executive of United Clearing) andKirit Ruparelia (Managing Director of United Clearing) will enter into newservice agreements with different terms following the Offer becoming whollyunconditional in all respects. Seymour Pierce considers the new service contracts with BSG to be entered intoby Mr Devani and Mr Ruparelia on the Offer becoming wholly unconditional in allrespects, to be fair and reasonable so far as other United Clearing shareholdersare concerned. 9. Accounting policies and year end of the Enlarged Group The Enlarged Group will adopt BSG's year end of 31 December and its accountingpolicies. The Board of BSG believes that the impact of the differences betweenthe accounting policies of BSG and United Clearing will not be significant. 10. Financial effects of acceptance of the Offer The financial effects for United Clearing Shareholders of acceptance of theOffer are set out in Appendix III. 11. United Clearing share options The Offer will extend to holders of United Clearing Shares issued orunconditionally allotted upon the exercise of rights under the United ClearingShare Option Schemes whilst the Offer remains open for acceptance (or by suchearlier date as, subject to the City Code, BSG may decide). To the extent thatsuch options have not been exercised in full, once the Offer becomes or isdeclared unconditional in all respects, appropriate proposals will be made indue course to participants in the United Clearing Share Option Schemes. Madoff has an option to subscribe for up to 5 per cent. of the ordinary sharesin the capital of United Clearing as at 6 July 2004. Madoff has irrevocablyagreed with the Offeror that in consideration for the Offeror allotting 176,178New BSG Shares to Madoff, the option will be cancelled. The cancellation of theoption is conditional upon the Offer becoming or being declared whollyunconditional in all respects. This agreement, which is conditional upon theOffer Document being posted within 28 days of the date of this announcement andthe Offer not lapsing or being withdrawn, will not be binding in the event of acompeting offer for United Clearing which values a United Clearing Share at aprice of at least 152.35 per cent. (i.e. 110 per cent. of 1.385) of the averageClosing Price for BSG Shares for the 5 consecutive business days immediatelypreceding the date of this announcement. Seymour Pierce considers the terms of the cancellation of the Madoff option andthe consequent allotment of 176,178 New BSG Shares to Madoff on the Offerbecoming wholly unconditional in all respects, to be fair and reasonable so faras other United Clearing shareholders are concerned. 12. Settlement, admission to trading on AiM and dealings Application will be made to the London Stock Exchange for the New BSG Shares tobe admitted to trading on AiM. Certificates for the New BSG Shares will bedespatched to United Clearing Shareholders who hold their United Clearing Sharesin certificated form (that is, not in CREST) and CREST stock accounts will becredited in respect of those United Clearing Shareholders who hold their UnitedClearing Shares in uncertificated form (that is, in CREST) (i) in the case ofacceptances received, complete in all respects, by the date on which the Offerbecomes or is declared unconditional in all respects, by no later than 14 daysafter such date, or (ii) in the case of acceptances received, complete in allrespects, after the date on which the Offer becomes or is declared unconditionalin all respects but while it remains open for acceptance, within 14 days of suchreceipt. Further details on settlement, listing and dealing will be included in the OfferDocument. 13. Compulsory acquisition, cancellation of trading of United Clearing Shares onAiM and re-registration Upon the Offer becoming or being declared unconditional in all respects, it isthe intention of BSG, if sufficient acceptances of the Offer are received and/orsufficient United Clearing Shares are otherwise acquired, to apply theprovisions of Part XIIIA of the Companies Act to acquire compulsorily anyoutstanding United Clearing Shares to which the Offer relates, on the same termsas the Offer. It is also intended that following the Offer becoming or being declaredunconditional in all respects, and subject to the requirements of the AiM Rules,that BSG will procure that United Clearing applies for the cancellation oftrading of United Clearing Shares on AiM. Such cancellation would significantlyreduce the liquidity and marketability of any United Clearing Shares notassented to the Offer. It is anticipated that such cancellation will take effectno earlier than 20 business days after the Offer becomes or is declaredunconditional in all respects. It is also proposed that, in due course, BSG will seek to procure there-registration of United Clearing as a private company under the relevantprovisions of the Companies Act. 14. Recommendation of the United Clearing Board The United Clearing Directors, who have been so advised by Seymour Pierce,consider the terms of the Offer to be fair and reasonable insofar as the UnitedClearing Shareholders are concerned. In providing advice to the United ClearingDirectors, Seymour Pierce has taken into account the commercial assessments ofthe United Clearing Directors. Accordingly, the United Clearing Directors intend unanimously to recommendUnited Clearing Shareholders to accept the Offer, when made, as they and certainof their connected persons have irrevocably undertaken so to do in respect oftheir own respective beneficial shareholdings amounting to, in aggregate,3,660,774 United Clearing Shares representing approximately 20.5 per cent. ofthe existing issued share capital of United Clearing. Enquiries: Billing Services Group Limited United Clearing Plc+1 847 832 0077 +44 (0)20 7608 8000Patrick J. Haynes, III Atul DevaniRandall W. Brouckman Michael van Klink Evolution Securities Limited Seymour Pierce Limited+44 (0)20 7071 4300 +44 (0)20 7107 8000Michael Brennan Mark PercyStuart AndrewsFergus Marcroft 15. Miscellaneous Evolution Securities Limited, which is regulated in the U.K. by the FinancialServices Authority, is acting exclusively for BSG in connection with the Offerand no one else and will not be responsible to anyone other than BSG forproviding the protections afforded to clients of Evolution Securities Limitednor for providing advice in relation to the Offer. Seymour Pierce Limited, which is regulated in the U.K. by the Financial ServicesAuthority, is acting as financial advisor to United Clearing and no one else inconnection with the Offer and will not be responsible to anyone other thanUnited Clearing for providing the protections afforded to clients of SeymourPierce Limited nor for providing advice in relation to the Offer. No offer or invitation to acquire or exchange securities in BSG or UnitedClearing is being made now. Any such offer or invitation will only be made indocuments to be published in due course (if any) and any such acquisition orexchange should be made solely on the basis of information contained in any suchdocuments. The Offer will not be made, directly or indirectly, in or into, or by the use ofmails or any means or instrumentality (including, without limitation,telephonically or electronically) of interstate or foreign commerce of, or anyfacility of a national securities exchange of, the United States, Canada,Australia or Japan and the Offer will not be capable of acceptance by any suchuse, means, instrumentality or facilities from or within the United States,Canada, Australia or Japan. Accordingly, copies of this announcement and anyrelated documents are not being, and must not be, directly or indirectly, mailedor otherwise forwarded, distributed or sent in or into or from the UnitedStates, Canada, Australia or Japan and persons receiving this announcement andany related document (including custodians, nominees and trustees) must not mailor otherwise forward, distribute or send it in, into or from the United States,Canada, Australia or Japan or such other jurisdiction where to do so wouldconstitute a violation of the relevant laws of such jurisdiction. Doing so mayrender invalid any purported acceptance of the Offer. BSG Shares have not been registered under the U.S. Securities Act and may not beoffered, sold, pledged or otherwise transferred except (a)(i) in an OffshoreTransaction complying with Rule 904 of U.S. Regulation S or (ii) pursuant to anexemption from registration under the U.S. Securities Act and (b) in accordancewith all applicable securities laws of the states of the United States. The availability of the Offer to persons who are not resident in the UnitedKingdom may be affected by the laws of the relevant jurisdictions. Persons whoare not resident in the United Kingdom should inform themselves about andobserve any applicable requirements. The Panel wishes to draw attention to certain U.K. dealing disclosurerequirements following the announcement of the Offer. An "offer period" isdeemed to commence at the time when an announcement is made of a proposed orpossible offer, with or without terms. Accordingly, the offer period began on 12October 2005. Dealing Disclosure Requirements: Under the provisions of Rule 8.3 of the City Code on Takeovers and Mergers (the"Code"), if any person is, or becomes "interested" (directly or indirectly) in1% or more of any class of "relevant securities" of BSG or of United Clearing,all "dealings" in any "relevant securities" of that company (including by meansof an option in respect of, or a derivative referenced to, any such "relevantsecurities") must be publicly disclosed by no later than 3.30 pm (London time)on the London business day following the date of the relevant transaction. Thisrequirement will continue until the date on which the offer becomes, or isdeclared, unconditional as to acceptances, lapses or is otherwise withdrawn oron which the "offer period" otherwise ends. If two or more persons act togetherpursuant to an agreement or understanding, whether formal or informal, toacquire an "interest" in "relevant securities" of BSG or United Clearing, theywill be deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevantsecurities" of BSG or United Clearing by BSG or United Clearing, or by any oftheir respective "associates", must be disclosed by no later than 12.00 noon(London time) on the London business day following the date of the relevanttransaction. A disclosure table, giving details of the companies in whose "relevantsecurities" "dealings" should be disclosed, and the number of such securities inissue, can be found on the Takeover Panel's website atwww.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virute of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Code, which can also be found on thePanel's website. If you are in any doubt as to whether or not you are requiredto disclose a "dealing" under Rule 8, you should consult the Panel. The United Clearing Directors accept responsibility for the informationcontained in this announcement relating to United Clearing, themselves and theirimmediate families and connected persons. The BSG Directors acceptresponsibility for all the other information contained in this announcement. Tothe best of the knowledge and belief of the BSG Directors and the UnitedClearing Directors (who have taken all reasonable care to ensure that such isthe case) the information contained herein for which they are respectivelyresponsible is in accordance with the facts and does not omit anything likely toaffect the import of such information. APPENDIX I CONDITIONS The Offer, which will be made by Evolution Securities on behalf of BSG, willcomply with the applicable rules and regulations of the City Code. The Offerwill be governed by English law and will be subject to the jurisdiction of thecourts of England and to the terms and conditions set out in the Offer Documentand Form of Acceptance The Offer will be subject to the following conditions: (a) valid acceptances being received (and not, where permitted, withdrawn) by nolater than 3.00 p.m. on the first closing date of the Offer (or such later time(s) and/or date(s) as BSG may, subject to the rules of the Code, decide) inrespect of not less than 90 per cent. (or such lesser percentage as BSG maydecide) of the United Clearing Shares to which the Offer relates, provided that,unless agreed by the Panel, this condition will not be satisfied unless BSG and/or its wholly-owned subsidiaries have acquired or agreed to acquire (pursuant tothe Offer or otherwise), directly or indirectly, United Clearing Sharescarrying, in aggregate, over 50 per cent. of the voting rights then normallyexercisable at a general meeting of United Clearing on such basis as may berequired by the Panel (including for this purpose, to the extent (if any)required by the Panel, any voting rights attaching to any shares which areunconditionally allotted or issued before the Offer becomes or is declaredunconditional as to acceptances, whether pursuant to the exercise of conversionor subscription rights or otherwise); and for this purpose (i) the expression"United Clearing Shares to which the Offer relates" shall be construed inaccordance with sections 428-430F of the Companies Act; and (ii) shares whichhave been unconditionally allotted shall be deemed to carry the voting rightswhich they will carry on issue; (b) without limitation to condition (c) below, BSG not having discovered orotherwise become aware prior to the date on which the Offer would otherwise havebecome or been declared unconditional that the Office of Fair Trading intends torefer the proposed acquisition of United Clearing by BSG, or any matters arisingtherefrom, to the Competition Commission; (c) the London Stock Exchange agreeing to admit the New BSG Shares to trading onAiM (subject only to the allotment of such shares) and such admission becomingeffective in accordance with the AiM Rules; (d) no central bank, government or governmental, quasi-governmental,supranational, statutory or regulatory body, or any court, institution,investigative body, association, trade agency or professional or environmentalbody or (without prejudice to the generality of the foregoing) any other similarperson or body in any jurisdiction (each, a "Relevant Authority") having decidedto take, instituted, implemented or threatened any action, proceedings, suit,investigation or enquiry or enacted, made or proposed any statute, regulation ororder or otherwise taken any other step or done any thing that would or might bereasonably be expected to: (i) restrict, restrain, prohibit, delay, impose additional conditions orobligations with respect to, or otherwise interfere with the implementation of,the Offer or the acquisition of any United Clearing Shares by BSG or any mattersarising therefrom; (ii) result in a delay in the ability of BSG, or render BSG unable, to acquiresome or all of the United Clearing Shares; (iii) require, prevent or delay the divestiture by BSG or any of itssubsidiaries, subsidiary undertakings or associated undertakings (including anycompany of which 20 per cent. or more of the voting capital is held by the Groupor any partnership, joint venture, firm or company in which any of them may beinterested) (together the "wider Group") or United Clearing or any of itssubsidiaries, subsidiary undertakings or associated undertakings (including anycompany of which 20 per cent. or more of the voting capital is held by UnitedClearing or any partnership, joint venture, firm or company in which any of themmay be interested) (together the "wider United Clearing Group") of all or anyportion of their respective businesses, assets or property or of any UnitedClearing Shares or other securities in United Clearing or impose any limitationon the ability of any of them to conduct their respective businesses or owntheir respective assets or properties or any part thereof; (iv) impose any limitation on, or result in any delay in, the ability of anymember of the wider Group to acquire or hold or exercise effectively, directlyor indirectly, all or any rights of all or any of the United Clearing Shares(whether acquired pursuant to the Offer or otherwise) or to exercise managementcontrol over any member of the wider United Clearing Group or on the ability ofany member of the wider United Clearing Group to hold or exercise effectively,directly or indirectly, all or any rights of ownership of shares or othersecurities (or the equivalent) in, or to exercise management control over, anyother member of the wider United Clearing Group, in each case to an extent whichis material in the context of the wider Group taken as a whole or, as the casemay be, the wider United Clearing Group taken as a whole; (v) require any member of the wider United Clearing Group or the wider Group tooffer to acquire any shares or other securities or rights thereover owned by anythird party in any member of the wider United Clearing Group or in any member ofthe wider Group where such acquisition would be material in the context of thewider United Clearing Group taken as a whole or the wider Group taken as awhole, as the case may be (provided that this shall not apply to a court orderpursuant to Part XIIIA of the Companies Act requiring the Offeror to acquire anyUnited Clearing Shares); (vi) make the Offer or its implementation or the proposed acquisition of UnitedClearing or any member of the wider United Clearing Group or of any UnitedClearing Shares or any other shares or securities in, or control of, UnitedClearing, illegal, void or unenforceable in or under the laws of any applicablejurisdiction;(vii) impose any limitation on the ability of any member of the wider Group orthe wider United Clearing Group to integrate or co-ordinate its business, or anypart of it, with the business of any other member of the wider Group and/or thewider United Clearing Group; or (viii) otherwise adversely affect any or all of the businesses, assets orprofits of any member of the wider Group or the wider United Clearing Group orthe exercise of rights of shares of any company in the United Clearing Group toan extent which is material in the context of the wider United Clearing Grouptaken as a whole or, as the case may be, the wider Group taken as a whole,and all applicable waiting and other time periods during which such RelevantAuthority could institute, implement or threaten any such action, proceeding,suit, investigation, enquiry or reference or otherwise intervene having expired,lapsed or been terminated; (e) all authorisations, orders, grants, consents, clearances, licences,permissions and approvals, in any jurisdiction, deemed necessary or appropriateby BSG for or in respect of the Offer, the proposed acquisition of any shares orsecurities in, or control of, United Clearing or any member of the wider UnitedClearing Group by any member of the wider Group or the carrying on of thebusiness of any member of the wider United Clearing Group or the wider Group,the issue of the New BSG Shares or any matters arising therefrom being obtainedin terms satisfactory to BSG and United Clearing from all appropriate RelevantAuthorities or (without prejudice to the generality of the foregoing) from anypersons or bodies with whom any members of the wider United Clearing Group haveentered into contractual arrangements (in each case where the absence of suchauthorisation would have a material and adverse effect on the wider UnitedClearing Group taken as a whole) and such authorisations, orders, grants,consents, clearances, licences, permissions and approvals remaining in fullforce and effect and there being no notice or intimation of any intention torevoke, suspend or restrict or not to renew any of the same and all necessaryfilings having been made, all appropriate waiting and other time periods(including extensions thereto) under any applicable legislation and regulationsin any jurisdiction having expired, lapsed or been terminated and all necessarystatutory or regulatory obligations in any jurisdiction in respect of the Offeror the proposed acquisition of United Clearing by BSG or of any United ClearingShares or any matters arising therefrom having been complied with; (f) except as Disclosed, there being no provision of any agreement, instrument,permit, licence or other arrangement to which any member of the wider UnitedClearing Group is a party or by or to which it or any of its assets may be boundor subject which, as a consequence of the Offer or the acquisition of UnitedClearing or any United Clearing Shares or because of a change in the control ormanagement of United Clearing or any member of the United Clearing Group or anymatters arising therefrom or otherwise, could or might (in any such case to anextent which is materially adverse in the context of the wider United ClearingGroup taken as a whole) reasonably be expected to have the result that: (i) any moneys borrowed by, or other indebtedness, actual or contingent, of, orgrant available to, any member of the wider United Clearing Group becomes or iscapable of being declared repayable immediately or earlier than the repaymentdate stated in such agreement, instrument or other arrangement or the ability ofany member of the wider United Clearing Group to borrow moneys or incurindebtedness is withdrawn, inhibited or adversely affected; (ii) any mortgage, charge or other security interest is created over the wholeor any part of the business, property or assets of any member of the widerUnited Clearing Group or any such security (whenever arising) becomesenforceable; (iii) any such agreement, instrument, permit, licence or other arrangement, orany right, interest, liability or obligation of any member of the wider UnitedClearing Group therein, is terminated or adversely modified or affected or anyaction is taken or onerous obligation arises thereunder; (iv) the value of any member of the wider United Clearing Group or its financialor trading position is prejudiced or materially adversely affected; (v) any material asset or, other than in the ordinary course of business, anyasset of the wider United Clearing Group being or falling to be charged ordisposed of; (vi) the rights, liabilities, obligations or interests or business of any memberof the wider United Clearing Group in or with any other person, firm or company(or any arrangement relating to such interest or business) is terminated,modified or adversely affected;(vii) any liabilities, actual or contingent (other than in the ordinary courseof business) are created in respect of the wider United Clearing Group; or (viii) any member of the wider United Clearing Group ceases to be able to carryon business under any name under which it currently does so; (g) save as Disclosed, no member of the United Clearing Group having since 30September 2005 (the date to which United Clearing's last published auditedaccounts were made up): (i) (save as between United Clearing and wholly-owned subsidiaries of UnitedClearing) issued or agreed to issue or authorised or agreed the issue ofadditional shares of any class or issued or authorised or agreed the issue of orgranted securities convertible into or rights, warrants or options to subscribefor or acquire such shares or convertible securities or redeemed, purchased orreduced or announced any intention to do so or made any other change to any partof its share capital; (ii) recommended, declared, paid or made or proposed to recommend, declare, payor make any dividend, bonus issue or other distribution other than dividendslawfully paid by a member of the United Clearing Group to another member of theUnited Clearing Group; (iii) authorised or announced or agreed to any merger or any change in its shareor loan capital;(iv) issued or authorised or proposed the issue of any debentures or (save inthe ordinary course of its business) incurred or increased any indebtedness(actual or contingent); (v) disposed of or transferred, mortgaged or encumbered any asset or any right,title or interest in any asset or entered into or varied any contract,commitment or arrangement (whether in respect of capital expenditure orotherwise) which is of a long term or unusual nature or which involves or couldinvolve an obligation of a nature or magnitude which is material or authorised,agreed or announced any intention to do so; (vi) entered into or varied any contract, reconstruction, amalgamation,arrangement or other transaction which is of a long term or unusual or onerousnature or is otherwise than in the ordinary course of business or announced anyintention to do so;(vii) entered into, or varied the terms of, any contract or agreement with anyof the directors or, to the extent material, senior executives of UnitedClearing; (viii) taken or proposed any corporate action or had any legal proceedingsstarted or threatened against it for its winding-up, dissolution orreorganisation or for the appointment of a receiver, administrator,administrative receiver, trustee or similar officer (or for the appointment ofany analogous person in any jurisdiction) of all or any of its assets andrevenues; (ix) waived or compromised any claim other than in the ordinary course ofbusiness which is material;(x) made any amendment to its memorandum or articles of association;(xi) entered into any contract, transaction, commitment or arrangement which isor is reasonably likely to be restrictive on the business of any member of thewider United Clearing Group other than to a nature or extent which is notmaterial; (xii) entered into any contract, commitment or agreement with respect to any ofthe transactions or events referred to in this condition (f); and(xiii) been unable or admitted that it is unable to pay its debts or havingstopped or suspended (or threatened to stop or suspend) payment of its debtsgenerally or ceased or threatened to cease carrying on all or a substantial partof its business;for the purposes of this condition "material" shall mean material in the contextof the wider United Clearing Group taken as a whole; (h) save as Disclosed, in relation to the United Clearing Group since 30September 2005: (i) no litigation, arbitration, prosecution or other legal proceedings havingbeen instituted, announced or threatened or become pending or remainedoutstanding by or against any member of the wider United Clearing Group or towhich any member of the wider United Clearing Group is or may become a party(whether as claimant, defendant or otherwise) which could or might reasonably belikely to affect materially and adversely the United Clearing Group taken as awhole; (ii) no material adverse change having occurred in the business, assets,financial or trading position or profits of any member of the wider UnitedClearing Group which is material in the context of the wider United ClearingGroup taken as a whole; and (iii) no enquiry or investigation by or complaint or reference to any RelevantAuthority having been threatened, announced, implemented or instituted orremaining outstanding in respect any member of the wider United Clearing Groupwhich could or might reasonably be expected to materially and adversely affectthe wider United Clearing Group taken as a whole;(iv) no liability (actual or contingent) having arisen or became apparent orincreased which in any such case might reasonably be expected to materially andadversely effect any member of the wider United Clearing Group. (i) BSG not having discovered that: (i) any business, financial or other information concerning any member of thewider United Clearing Group disclosed by or on behalf of any member of the widerUnited Clearing Group, either contains a misrepresentation of fact or omits tostate a fact necessary to make the information contained therein not misleadingwhich is, in any case, material and adverse to the financial or trading positionof the wider United Clearing Group taken as a whole; or (ii) any member of the wider United Clearing Group is subject to any liability,actual or contingent, which is not disclosed in the annual report and accountsof United Clearing for the financial year ended 30 September 2005 and ismaterial in the context of the wider United Clearing Group taken as a whole.The Offer will lapse if the Offer or the proposed acquisition of United Clearingby BSG or any matter arising therefrom is referred to the Competition Commissionbefore the first closing date of the Offer or the date when the Offer becomes oris declared unconditional as to acceptances, whichever is the later. Conditions (c) and (d) must be fulfilled within 21 days after the later of thefirst closing date of the Offer and the date on which condition (a) isfulfilled. BSG reserves the right to waive condition (b) and all or any ofconditions (d) to (i) inclusive, in whole or in part. The Offer will lapseunless all the above conditions are fulfilled or (if capable of waiver) waivedor, where appropriate, determined by BSG to have been or remain satisfied bymidnight on the day which is 21 days after the later of the first closing dateand the date on which the Offer becomes or is declared unconditional as toacceptances (or such later date as BSG may, with the consent of the Panel,decide). BSG shall be under no obligation to waive or treat as fulfilled any ofcondition (b) and conditions (d) to (i) inclusive by a date earlier than thedate specified above for the fulfilment thereof notwithstanding that the otherconditions of the Offer may at such earlier date have been waived or fulfilledand that there are at such earlier date no circumstances indicating that any ofsuch conditions may not be capable of fulfilment. If BSG is required by the Panel to make an offer for United Clearing Sharesunder the provisions of Rule 9 of the Code, BSG may make such alterations to theconditions as are necessary to comply with the provisions of that Rule. "Disclosed" means (i) as disclosed in United Clearing's report and accounts forthe year ended 30 September 2005; (ii) as publicly announced by United Clearing(by delivery of an announcement to an authorised Regulatory Information Service)prior to the date of this announcement (the "Offer Date"); (iii) any matter thesubject of a resolution passed at the Annual General Meeting of United Clearingheld on 5 December 2005; (iv) as disclosed in this announcement; or (v) asotherwise disclosed in writing to BSG or its advisers by or on behalf of UnitedClearing prior to the Offer Date in the context of the Offer. APPENDIX II DEFINITIONS The following definitions apply throughout this announcement, unless the contextotherwise requires: "Act" or "Companies Act" the Companies Act 1985 (as amended)"AiM a market operated by the London Stock Exchange"AiM Rules" the rules of the London Stock Exchange governing admission to and the operation of AiM"Board" or "Directors" the directors of either BSG and/or United Clearing, as the context requires"BSG Board" the board of directors of BSG"BSG Directors" the directors of BSG"BSG Shares" the common shares of U.S.$1.00 each in the share capital of BSG"BSG" or "Company" Billing Services Group Limited"business day" a day (other than a Saturday, Sunday or public holiday) when clearing banks are open for business in the City of London"certificated" or "in a share which is not in uncertificated formcertificated form" (that is a share not held in CREST)"Closing Price" the closing middle market quotation of a share"Code" or "City Code" the City Code on Takeovers and Mergers as amended or interpreted from time to time by the Panel"Competing Offer" an offer or possible offer by a third party, which is not acting in concert with BSG, for all or some of the United Clearing Shares not already owned by or on behalf of such third party or any transaction proposed by any such third party or United Clearing which involves the acquisition of a substantial equity interest in or control of United Clearing or a disposal or merger of all or a substantial part of the business or assets of United Clearing"CREST Regulations" the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755)"CREST" the relevant system (as defined in the CREST Regulations) in respect of which CRESTCo is the operator (as defined in the CREST Regulations)"CRESTCo" CRESTCo Limited"Daily Official List" the daily official list of the London Stock Exchange"EDS IOS" EDS Interoperator Services GmbH (now called BSG Clearing Solutions GmbH)"Enlarged Group" BSG and its subsidiaries and subsidiary undertakings following the acquisition of United Clearing"Evolution Securities " Evolution Securities Limited"Form of Acceptance" the form of acceptance and authority for use in connection with the Offer"Group" BSG and its subsidiaries and subsidiary undertakings"GSM" Global System for Mobile communications"London Stock Exchange" London Stock Exchange plc"New BSG Shares" the BSG Shares to be issued pursuant to the Offer"Offer Document" the document to be addressed to United Clearing Shareholders on behalf of BSG, containing and setting out the terms and conditions of the Offer"Offer" the recommended offer made by Evolution Securities on behalf of BSG for all the United Clearing Shares on the terms and subject to the conditions set out in the Offer Document and the Form of Acceptance (including, where the context so requires, any subsequent waiver, revision, variation or extension thereof)"Offshore Transaction" an offer of BSG Shares not made to a person in the U.S. and, at the time a buy order is originated, the buyer is outside the United States or the seller reasonably believed the buyer was outside the United States, so long as such offer or sale was not specifically targeted at identifiable groups of U.S. citizens living abroad (such as members of the U.S. armed forces living overseas); provided, however, an offer or sale to a person identified in Rule 902(k)(2)(vi) of U.S. Regulation S shall be deemed to be made in an Offshore Transaction"Panel" the Panel on Takeovers and Mergers"Seymour Pierce" Seymour Pierce Limited"Shareholder" a holder of either BSG Shares or United Clearing Shares, as the context requires"Third Party an announcement made by a third party which isAnnouncement" not acting in concert with BSG or United Clearing of an intention to make a Competing Offer (whether or not subject to pre-conditions) pursuant to Rule 2.5 of the Code, or otherwise"Third Party the Competing Offer referred to in a ThirdTransaction" Party Announcement"U.K." or "United the United Kingdom of Great Britain andKingdom" Northern Ireland"U.S. Regulation S" Regulation S promulgated by the U.S. Securities and Exchange Commission under the U.S. Securities Act, including the preliminary notes thereto"U.S. Securities Act" the United States Securities Act of 1933, as amended"uncertificated" or "in a share or shares recorded on the register ofuncertificated form" members as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST"United Clearing the directors of United ClearingDirectors""United Clearing Group" United Clearing and its subsidiaries and subsidiary undertakings"United Clearing Share together the 2004 Enterprise ManagementOption Schemes" Incentive Plan adopted by United Clearing on 23 August 2004, the unapproved share options granted under the United Clearing Executive Option Agreement"United Clearing Shares" the existing unconditionally allotted or issued and fully paid (or credited as fully paid) ordinary shares of 1 pence each in the capital of United Clearing and any further such shares which are unconditionally allotted or issued fully paid or credited as fully paid after the date hereof and before the date on which the Offer ceases to be open for acceptance (or such earlier date as BSG may, subject to the Code, decide) including any such shares which are so allotted or issued pursuant to the exercise of options granted under the United Clearing Share Option Schemes or otherwise"United Clearing" United Clearing Plc"United States" or the United States of America, its territories"U.S." and possessions, any state of the United States of America and the District of Columbia and all other areas subject to its jurisdictionSave where otherwise stated, for the purpose of this announcement, "subsidiary","subsidiary undertaking" and "associate" have the respective meanings given tothem by the Act. In this announcement, the singular includes the plural and vice versa, unlessthe context otherwise requires. Appendix III Financial Effects for United Clearing Shareholders of Acceptance of the Offer The following table sets out, for illustrative purposes only, and on the basesand assumptions set out in the notes below, the financial effects of acceptanceof the Offer on capital value and gross income for an accepting holder of UnitedClearing Shares, if the Offer becomes or is declared unconditional in allrespects. Column A compares the market value of 1.385 BSG Shares on 14 December 2005 withthe market value of 1 United Clearing Share on 14 December 2005 (being the lastbusiness day prior to the issue of this announcement of the Offer) and Column Bcompares the market value of 1.385 BSG Shares on 14 December 2005 with themarket value of 1 United Clearing Share on 11 October 2005 (being the lastbusiness day prior to the commencement of the Offer Period): Increase in Capital Value A BMarket Value of 1.385 BSG Shares 131.6 131.6Market Value of 1 United Clearing Share 121.5 114.5Increase in Capital Value 10.1 17.1 This represents an increase of: 8.3% 14.9% Comparison of Income:Gross Income from 1 United Clearing Share: 2pGross Income from 1.385 BSG Share: Nil Notes: (i) based on the Closing Price of a BSG Share on 14 December 2005 being the lastbusiness day prior to the issue of this announcement of the Offer (ii) based on the Closing Price of a United Clearing Share on 14 December 2005being the last business day prior to the issue of this announcement of the Offer (iii) based on the Closing Price of a United Clearing Share on 11 October 2005being the last business day prior to the commencement of the Offer Period (iv) the gross dividend income on United Clearing Shares is based on the finaldividend of 2p per United Clearing Share payable in respect of the year ended 30September 2005. (The terms of the Offer will allow the existing United Clearingshareholders to retain this final dividend) (v) no dividends have been paid on BSG Shares (vi) no account has been taken of any liability to taxation This information is provided by RNS The company news service from the London Stock Exchange