Last checked at 8 Mar 2007 07:03
Castle Bidco Limited08 March 2007 Not for release, publication or distribution, in whole or in part, in or into orfrom any jurisdiction where to do so would constitute a violation of therelevant laws of such jurisdiction Castle Bidco reserves the right, with the consent of the Takeover Panel, toimplement the acquisition of Crest Nicholson by way of a takeover offer underthe Takeover Code 8 March 2007 RECOMMENDED PROPOSALS FOR THE ACQUISITION of CREST NICHOLSON PLC by CASTLE BIDCO LIMITED to be effected by means of a Scheme of Arrangement Summary • The boards of Castle Bidco and Crest Nicholson are pleased to announcethat they have reached agreement on the terms of a recommended acquisition byCastle Bidco of the entire issued and to be issued share capital of CrestNicholson (other than that already owned by Castle Bidco) for 620 pence perCrest Nicholson Share in cash. • The terms of the Acquisition value the entire issued and to be issuedshare capital of Crest Nicholson at approximately £715 million. A Loan NoteAlternative will, subject to the terms and conditions which will be set out inthe Scheme Circular and the Form of Election, also be made available to CrestNicholson Shareholders (other than any Loan Note Restricted Overseas Person). • Crest Nicholson will also pay an interim dividend of 9.7 pence perCrest Nicholson Share in respect of the six month period ended 31 October 2006to Crest Nicholson Shareholders whose names appear on the register as at9 March 2007. This Interim Dividend will be paid on 10 April 2007. • If the Scheme becomes effective, Crest Nicholson Shareholders (otherthan Castle Bidco, whose Crest Nicholson Shares are not subject to the Schemeand who will only therefore receive the Interim Dividend) will thereforereceive, in aggregate, 629.7 pence per Crest Nicholson Share. • This aggregate price per Crest Nicholson Share represents a premiumof: - 18.5 per cent. to 531.3 pence per Crest Nicholson Share, being the averageClosing Price over the six month period to 9 November 2006; and - 10.2 per cent. to 571.5 pence per Crest Nicholson Share, being the ClosingPrice on 9 November 2006, being the last Business Day prior to the date on which Crest Nicholson made anannouncement noting receipt of an approach from a third party regarding apossible offer for Crest Nicholson. The aggregate price per Crest Nicholson Share also represents: - 2.4 times Crest Nicholson's published net asset value per issued CrestNicholson Share as at 31 October 2006; and - a price earnings ratio of 12.4 times based on Crest Nicholson's fully dilutedearnings per share for the financial year ended 31 October 2006. • Castle Bidco is a company that has been formed for the purposes of theAcquisition. Castle Bidco is indirectly owned by Bank of Scotland (through itswholly-owned subsidiary, Uberior) and West Coast Capital (through Pacific Shelf1410 which it indirectly wholly owns). • The Acquisition is proposed to be effected by means of a Scheme ofArrangement under section 425 of the Companies Act, subject to the requisiteCourt and Crest Nicholson Shareholder approvals being obtained. • The Crest Nicholson Board unanimously recommend the Acquisition andthat Crest Nicholson Shareholders vote in favour of the resolutions to beproposed at the Court Meeting and at the EGM. • The Crest Nicholson Board, which has been so advised by the Company'sfinancial adviser, Dresdner Kleinwort, considers the terms of the Acquisition tobe fair and reasonable. In giving its advice to the Crest Nicholson Board,Dresdner Kleinwort has taken into account the commercial assessments of theCrest Nicholson Directors. Accordingly, each of the Crest Nicholson Directorswho has any entitlement to Crest Nicholson Shares has irrevocably undertaken tovote in favour of the resolutions to be proposed at the Court Meeting and at theEGM in respect of their own beneficial holdings which, in aggregate, at theReference Date total 745,767 Crest Nicholson Shares (representing approximately0.66 per cent. of the existing issued share capital of Crest Nicholson). All ofthese irrevocable undertakings will continue to be binding if a Competing Offeris made. • Castle Bidco currently holds 26,310,243 Crest Nicholson Shares,representing approximately 23.26 per cent. of the existing issued share capitalof Crest Nicholson. Castle Bidco is precluded from voting at the Court Meeting.Crest Nicholson Shares held by Castle Bidco will not therefore count towards themajority required at the Court Meeting to approve the Scheme. Castle Bidco isnot, however, precluded from voting at the EGM. • Bank of Scotland has arranged and underwritten all the debt facilitieson behalf of Castle Bidco. • Approval of the Acquisition will be sought from the Crest NicholsonShareholders at the Court Meeting and at the EGM. In order to become effective,the Scheme must be approved at the Court Meeting by the passing of a resolutionby a majority in number of the Scheme Shareholders present and voting, either inperson or by proxy, representing not less than 75 per cent. in value of theCrest Nicholson Shares that are voted by such Scheme Shareholders. In addition,the Special Resolution must be passed by Crest Nicholson Shareholdersrepresenting at least 75 per cent. of the votes cast at the EGM. Implementationof the Scheme will also require the sanction of the Scheme by the Court. • It is expected that the Scheme Circular will be posted to CrestNicholson Shareholders on or around 21 March 2007. The Court Meeting and the EGMare expected to be held on 16 April 2007 and, subject to the requisiteShareholder and Court approvals being obtained, it is expected that the Schemewill become effective on 3 May 2007. All dates in this announcement which relateto the implementation of the Scheme are, however, subject to the approval of theCourt and are therefore subject to change. Commenting on the Acquisition, John Matthews, Chairman of Crest Nicholson, said: "Crest Nicholson is proud of its track record of delivering shareholder valueand the Board believes that this deal with Castle Bidco delivers fair value toshareholders. The Board also see it as a positive development for the businessand its prospects. Crest Nicholson has become one of the leading providers ofsustainable developments and is meeting the challenges of producing moreenvironmentally responsible housing. The Board believes that Castle Bidco'ssupport will help Crest Nicholson take further advantage of the significantopportunities for the future growth of its regeneration, mixed use andtraditional house building businesses." Commenting on the Acquisition, Jim McMahon, Director of Castle Bidco said: "We are delighted that the Board of Crest Nicholson has unanimously recommendedour offer. Castle Bidco is excited about the acquisition of Crest Nicholson, acompany with a strong underlying business and market position in urbanregeneration, as well as traditional house building. We very much look forwardto working with the Crest Nicholson management team and its employees." Dresdner Kleinwort is acting as financial and Rule 3 adviser and broker to CrestNicholson. Rothschild and Panmure Gordon are acting as financial adviser andbroker, respectively, to Castle Bidco. This summary should be read in conjunction with the full text of the followingannouncement and the Appendices. The Acquisition will be subject to theconditions set out in Appendix I to this announcement and to the further termsto be set out in the Scheme Circular. This announcement is not intended to, and does not, constitute or form part ofany offer to sell or an invitation to purchase any securities or thesolicitation of any vote or approval in any jurisdiction. The Proposals will bemade solely through the Scheme Circular. Any acceptance or other response to theProposals should be made only on the basis of the information in the SchemeCircular. Crest Nicholson Shareholders are advised to read carefully the formaldocumentation in relation to the Acquisition once it has been despatched. Appendix II contains the sources and bases of information used in thisannouncement. Appendix III contains the definitions of certain expressions used in thisannouncement. All times referred to are London times unless otherwise stated. Enquiries:Rothschild (Financial Adviser to Castle Bidco) Tel: +44 (0)20 7280 5000Alex MidgenKevin Ramsden Panmure Gordon (Broker to Castle Bidco) Tel: +44 (0)20 7459 3600Tim LinacreRichard Gray Crest Nicholson PLC Tel: +44 (0)1932 580 555John MatthewsStephen Stone Dresdner Kleinwort (Financial and Rule 3 Adviser and Broker Tel: +44 (0)20 7623 8000to Crest Nicholson) Charles BattenMichael CovingtonAngus Kerr (Corporate Broking) Brunswick (Public Relations Adviser to Crest Nicholson) Tel: +44 (0)20 7404 5959 Andrew FenwickKate Miller Rothschild, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting for Castle Bidco and for no-one else inrelation to the Proposals and will not be responsible to anyone other thanCastle Bidco for providing the protections afforded to clients of Rothschild orfor affording advice in relation to the Proposals or any matters referred toherein. Panmure Gordon, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting for Castle Bidco and for no-one else inrelation to the Proposals and will not be responsible to anyone other thanCastle Bidco for providing the protections afforded to clients of Panmure Gordonor for affording advice in relation to the Proposals or any matters referred toherein. Dresdner Kleinwort, which is authorised and regulated by the Financial ServicesAuthority, is acting for Crest Nicholson and for no-one else in relation to theProposals and will not be responsible to anyone other than Crest Nicholson forproviding the protections afforded to customers of Dresdner Kleinwort or foraffording advice in relation to the Proposals or any matters referred to herein. Further information in relation to the Proposals The distribution of this announcement and the availability of the Proposals injurisdictions other than the UK may be restricted by law and therefore anypersons who are subject to the laws of any jurisdiction other than the UK shouldinform themselves about, and observe, any applicable requirements. Thisannouncement has been prepared for the purpose of complying with English law andthe Takeover Code and the information disclosed may not be the same as thatwhich would have been disclosed if this announcement had been prepared inaccordance with the laws of jurisdictions outside England. Copies of this announcement are not being, and must not be, directly orindirectly, mailed or otherwise forwarded, distributed or sent in or into orfrom any jurisdiction where to do so would violate the laws of that jurisdictionand persons receiving this announcement (including custodians, nominees andtrustees) must not mail or otherwise forward, distribute or send it in, into orfrom any such jurisdiction. Castle Bidco reserves the right, with the consent of the Takeover Panel, toimplement the acquisition of Crest Nicholson by way of a takeover offer underthe Takeover Code. If the Acquisition is implemented by way of an Offer (unlessotherwise determined by Castle Bidco and permitted by applicable law andregulation), the Offer may not be made, directly or indirectly, in or into or bythe use of mails of, or by any other means or instrumentality (including,without limitation, electronic mail, facsimile transmission, telex, telephone,internet or other forms of electronic communication) of interstate or foreigncommerce of, or any facility or a national state or securities exchange of, anyjurisdiction where to do so would violate the laws of that jurisdiction and theOffer may not be capable of acceptance by any such use, means, instrumentalityor facility. The Acquisition will be subject to the applicable rules and regulations of theUK Listing Authority, the London Stock Exchange and the Takeover Code. The Loan Notes that may be issued in connection with the Acquisition pursuant tothe Loan Note Alternative have not been, nor will they be, listed on any stockexchange and have not been, nor will they be, registered under the US SecuritiesAct or under the securities laws of any state or other jurisdiction of theUnited States (or under the securities laws of any other jurisdiction, theresidents of which Castle Bidco is advised to treat as Loan Note RestrictedOverseas Persons); the relevant clearances have not been, and will not be,obtained from the securities commission of any province of Canada; nor has anyprospectus been lodged with, or registered by, the Australian Securities andInvestments Commission; nor have any steps been taken, nor will any steps betaken, to enable the Loan Notes to be offered in compliance with the applicablesecurities laws of Japan or any other jurisdiction if to do so would constitutea violation of the relevant laws of, or require registration thereof in suchjurisdiction. Accordingly, unless the relevant clearances are obtained or anexemption under such act or securities laws is available or unless otherwisedetermined by Castle Bidco or required by the Takeover Code and permitted byapplicable law and regulation, the Loan Notes may not be offered, sold, resold,delivered or transferred, directly or indirectly, in or into the United States,Canada, Australia or Japan or any other jurisdiction if to do so wouldconstitute a violation of the relevant laws of, or require registration thereofin, such jurisdiction or to, or for the account or benefit of, a person locatedin the United States, Canada, Australia or Japan or such other jurisdiction.Accordingly, subject to certain limitations and exceptions, the Loan Notes willnot be available to any Loan Note Restricted Overseas Person. Neither the US Securities and Exchange Commission nor any US state securitiescommission has approved or disapproved of the Loan Notes, or determined if thisannouncement is accurate or complete. Any representation to the contrary is acriminal offence. Forward looking statements This document contains certain forward-looking statements with respect to thefinancial condition, results of operations and business of Crest Nicholson andthe Crest Nicholson Group and certain plans and objectives of the boards ofdirectors of Crest Nicholson and Castle Bidco. These forward-looking statementscan be identified by the fact that they do not relate only to historical orcurrent facts. Forward-looking statements often use words such as "anticipate","target", " expect", "estimate", "intend", "plan", "goal", "believe", "will","may", "should", "would", "could" or other words of similar meaning. Thesestatements are based on assumptions and assessments made by the boards ofdirectors of Crest Nicholson and Castle Bidco in light of their experience andtheir perception of historical trends, current conditions, expected futuredevelopments and other factors they believe appropriate. By their nature,forward-looking statements involve risk and uncertainty, and the factorsdescribed in the context of such forward-looking statements in this documentcould cause actual results and developments to differ materially from thoseexpressed in or implied by such forward-looking statements. Should one or more of these risks or uncertainties materialise, or shouldunderlying assumptions prove incorrect, actual results may vary materially fromthose described in this document. Crest Nicholson and Castle Bidco assume noobligation to update or correct the information contained in this document. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the Takeover Code, if any person is, orbecomes, "interested" (directly or indirectly) in one per cent. or more of anyclass of "relevant securities" of Crest Nicholson, all "dealings" in any such"relevant securities" of that company (including by means of an option inrespect of, or a derivative referenced to, any such "relevant securities") mustbe publicly disclosed by no later than 3.30 pm on the London business dayfollowing the date of the relevant transaction. This requirement will continueuntil the date on which the Scheme become effective, lapses, or is withdrawn, orupon the "offer period" otherwise ending (or, if Castle Bidco elects to effectthe Acquisition by way of an Offer, until the date on which such Offer becomes,or is declared, unconditional as to acceptances, lapses or is otherwisewithdrawn or on which the period for which such Offer is open for acceptanceotherwise ends). If two or more persons act together pursuant to an agreement orunderstanding, whether formal or informal, to acquire an "interest" in "relevantsecurities" of Crest Nicholson, they will be deemed to be a single person forthe purpose of Rule 8.3. Under the provisions of Rule 8.1 of the Takeover Code, all "dealings" in"relevant securities" of Crest Nicholson by Castle Bidco or by Crest Nicholson,or by any of their respective "associates", must be disclosed by no later than12 noon 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 at http://www.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 Takeover Code, which can also befound on the Takeover Panel's website. If you are in any doubt as to whether ornot you are required to disclose a "dealing" under Rule 8, you should consultthe Takeover Panel. Not for release, publication or distribution, in whole or in part, in or into orfrom any jurisdiction where to do so would constitute a violation of therelevant laws of such jurisdiction Castle Bidco reserves the right, with the consent of the Takeover Panel, toimplement the acquisition of Crest Nicholson by way of a takeover offer underthe Takeover Code 8 March 2007 RECOMMENDED PROPOSALS FOR THE ACQUISITION of CREST NICHOLSON PLC by CASTLE BIDCO LIMITED to be effected by means of a Scheme of Arrangement 1. Introduction The boards of Castle Bidco and Crest Nicholson are pleased to announce that theyhave reached agreement on the terms of a recommended cash acquisition by CastleBidco of the entire issued and to be issued share capital of Crest Nicholson(other than that already owned by Castle Bidco). Castle Bidco is a company that has been formed for the purposes of theAcquisition. Castle Bidco is owned by Bank of Scotland (through its wholly-ownedsubsidiary, Uberior) and West Coast Capital (through Pacific Shelf 1410 which itindirectly wholly owns). 2. The Acquisition It is intended that the Acquisition will be effected by way of a Courtsanctioned scheme of arrangement under section 425 of the Companies Act. Underthe terms of the Scheme, which will be subject to the Conditions and the otherterms set out in this announcement and to the further terms and conditions to beset out in the Scheme Circular, Crest Nicholson Shareholders (other than CastleBidco) will receive: for each Crest Nicholson Share 620 pence in cash The Acquisition values the entire issued and to be issued share capital of CrestNicholson at approximately £715 million. Crest Nicholson will also pay an interim dividend of 9.7 pence per CrestNicholson Share in respect of the six month period ended 31 October 2006 toCrest Nicholson Shareholders whose names appear on the register as at9 March 2007. This Interim Dividend will be paid on 10 April 2007. Therefore, ifthe Scheme becomes effective, Crest Nicholson Shareholders (other than CastleBidco, whose Crest Nicholson Shares are not subject to the Scheme and who willtherefore only receive the Interim Dividend) will receive, in aggregate,629.7 pence per Crest Nicholson Share. This aggregate price per Crest NicholsonShare represents a premium of: - 18.5 per cent. to 531.3 pence per Crest Nicholson Share, being the averageClosing Price over the six month period to 9 November 2006; and - 10.2 per cent. to 571.5 pence per Crest Nicholson Share, being the ClosingPrice on 9 November 2006, being the last Business Day prior to the date on which Crest Nicholson made anannouncement noting receipt of an approach from a third party regarding apossible offer for Crest Nicholson. 3. The Loan Note Alternative As an alternative to some or all of the cash consideration of 620 pence perCrest Nicholson Share which would otherwise be receivable under the terms of theAcquisition, Crest Nicholson Shareholders (other than any Loan Note RestrictedOverseas Person) will, subject to the terms and conditions which will be set outin the Scheme Circular and the Form of Election, be able to elect to receiveLoan Notes issued by Castle Bidco on the following basis: for each £1 of cash consideration £1 nominal value of Loan Notes The Loan Note Alternative will be conditional upon the Scheme becoming effectivein accordance with its terms and will remain open for six months after theEffective Date. Further details of the Loan Notes and the Loan Note Alternativewill be contained in the Scheme Circular. The repayment of the principal amount of the Loan Notes will be guaranteed byBank of Scotland. 4. Background to and reasons for the Acquisition Listed since 1972, Crest Nicholson is a residential and mixed-use developmentcompany with an emphasis on creating sustainable communities. It operates sixregional businesses (South East, South, Eastern, Chiltern, South West andMidlands) and an urban regeneration business. Its stated mission is to meet itscustomers' expectations through the provision of environmentally sensitive andwell-built developments. Crest Nicholson is dedicated to excellence in designand construction and to providing high quality locations and customer service.This emphasis on quality and customer service has resulted in Crest Nicholsonreceiving a number of awards, and has allowed it to maintain one of the leadingmarket positions in both urban regeneration (including mixed use developments)and traditional house building. Crest Nicholson's increasing focus on urban regeneration and larger brownfieldsites has also begun to produce increasing returns for Crest NicholsonShareholders and has helped the Company build one of the longest land banks inthe sector at approximately five years. Against this background, Crest Nicholson has achieved significant growth duringthe last five years, with annual unit sales growing from 1,543 to 2,946 overthat period. Over the same period, pre-tax profit has grown from £50.5 millionto £80.1 million, a compound annual growth rate of approximately 9.7%, netassets have grown from £214.0 million to £298.5 million, a compound annualgrowth rate of approximately 6.9% and earnings per share has grown from 30.8pence to 51.2 pence, a compound annual growth rate of approximately 10.7%. Crest Nicholson announced its preliminary results for the year ended 31 October2006 on 25 January 2007. In respect of the financial year ended 31 October 2006,the Company recorded consolidated turnover of £690.7 million (£699.0 million to31 October 2005), consolidated profit before tax of £80.1 million (£78.9 millionto 31 October 2005), consolidated total assets of £841.1 million (£889.0 millionas at 31 October 2005) and consolidated net assets of £298.5 million (£263.3million as at 31 October 2005). The Board would like to acknowledge the contribution that Crest Nicholson'semployees have made over the years and the Company's current success is, in nosmall part, due to their loyalty and dedication. For the financial year ending 31 October 2007, Crest Nicholson remains on trackto increase both open market and affordable housing completions by around 15% asa result of Crest Nicholson's regeneration business beginning to make a fullcontribution. The volume gains will benefit the second half of 2007 due to thetrading pattern of apartment completions. Crest Nicholson's average sale priceis expected to remain similar to that achieved in 2006. The UK house building industry is trading well and is experiencing a strong waveof consolidation. Whilst the Board sees no reasons why a steady housing marketshould not continue, external factors such as interest rates and land supplyissues can have a material impact on the prospects for the sector. Against thisbackground, the Board believes the Acquisition represents good and certain cashvalue for Crest Nicholson Shareholders and reflects fairly the Company's currentprospects and asset position. In particular, the proposed aggregate price(including the Interim Dividend) of 629.7 pence per Crest Nicholson Sharerepresents: - 2.4 times Crest Nicholson's published net asset value per issued CrestNicholson Share as at 31 October 2006; and - a price earnings ratio of 12.4 times based on Crest Nicholson's fully dilutedearnings per share for the financial year ended 31 October 2006. 5. Recommendation The Crest Nicholson Board, which has been so advised by the Company's financialadviser Dresdner Kleinwort, considers the terms of the Acquisition to be fairand reasonable. In giving its advice to the Crest Nicholson Board, DresdnerKleinwort has taken into account the commercial assessments of the CrestNicholson Directors. The Crest Nicholson Directors believe that the terms of the Acquisition are inthe best interests of Crest Nicholson Shareholders as a whole and unanimouslyrecommend that Crest Nicholson Shareholders vote in favour of the resolutions tobe proposed at the Court Meeting and the EGM. Each of the Crest NicholsonDirectors who has any entitlement to Crest Nicholson Shares has also irrevocablyundertaken to vote in favour of the Scheme at the Court Meeting and in favour ofthe Special Resolution at the EGM, in respect of his own beneficial holdingswhich, in aggregate, at the Reference Date total 745,767 Crest Nicholson Shares(representing approximately 0.66 per cent of the existing issued share capitalof Crest Nicholson). All of these irrevocable undertakings will continue to bebinding if a Competing Offer is made. 6. Interests in Crest Nicholson Shares As at the close of business on the Reference Date, save as disclosed below,neither Castle Bidco (nor any of its directors) nor any other member of theCastle Bidco Group, nor, so far as Castle Bidco is aware and save as describedbelow, any person deemed by the Takeover Panel to be acting in concert withCastle Bidco, owns or controls any Crest Nicholson Shares or any securitiesconvertible or exchangeable into Crest Nicholson Shares (including pursuant toany long exposure, whether conditional or absolute, to changes in the prices ofsecurities) or any rights to subscribe for or purchase the same, or holds anyoptions (including traded options) in respect of, or has any option to acquire,any Crest Nicholson Shares or has entered into any derivatives referenced to,Crest Nicholson Shares ("Relevant Crest Nicholson Securities") which remainoutstanding, nor does any such person hold any short positions in relation toRelevant Crest Nicholson Securities (whether conditional or absolute and whetherin the money or otherwise), including any short position under a derivative, anyagreement to sell or any delivery obligation or right to require another personto purchase or take delivery, nor does any such person have any arrangement inrelation to Relevant Crest Nicholson Securities. An "arrangement" also includesany indemnity or option arrangement and any agreement or understanding, formalor informal, of whatever nature, relating to Relevant Crest Nicholson Securitieswhich may be an inducement to deal or refrain from dealing in such securities. Save as described in the following paragraph, in view of the requirement ofconfidentiality and therefore the availability to Castle Bidco of all relevantpersons within the HBOS Group to provide information, it has not been possibleto ascertain all of the interests and dealings (if more than the interestsdisclosed in the following paragraph) of relevant persons within the HBOS Groupin Crest Nicholson Shares. Any such additional interest(s) or dealing(s) will bediscussed with the Takeover Panel and, if appropriate, will be disclosed toCrest Nicholson Shareholders in the Scheme Circular or announced earlier ifrequested by the Takeover Panel. As at the close of business on the Reference Date: (i) Castle Bidco was the owner of 26,310,243 Crest Nicholson Shares,representing approximately 23.26% of the existing issued share capital of CrestNicholson; and (ii) members of the HBOS Group (excluding Castle Bidco) were interested in atotal of 4,990,830 Crest Nicholson Shares, representing approximately 4.41% ofthe existing issued share capital of Crest Nicholson. Of these, interests in937,107 Crest Nicholson Shares, representing approximately 0.83% of the existingissued share capital of Crest Nicholson, were discretionary interests andinterests in 3,868,616 Crest Nicholson Shares, representing approximately 3.42%of the existing issued share capital of Crest Nicholson, were beneficialinterests. The Crest Nicholson Shares held by Castle Bidco and the Crest Nicholson Sharesheld by relevant members of the HBOS Group (in respect of which they arebeneficially interested or have a discretionary interest) are precluded fromvoting at the Court Meeting. Crest Nicholson Shares held by Castle Bidco andsuch interests of the members of the HBOS Group will not therefore count towardsthe majority required at the Court Meeting to approve the Scheme. Castle Bidcoand the relevant members of the HBOS Group holding Crest Nicholson Shares arenot, however, precluded from voting at the EGM. 7. Information on Castle Bidco, Castle Topco and the CastleConsortium (a) Castle Bidco Castle Bidco is a limited liability company incorporated in England and Walesfor the purposes of the Acquisition. Castle Bidco is a wholly-owned subsidiaryof Castle Midco, which in turn is a wholly-owned subsidiary of Castle Topco(further details of which are contained in paragraph (b) below). Castle Bidcohas not traded since its date of incorporation, nor has it entered into anyobligations, other than in connection with the acquisition of 26,310,243 CrestNicholson Shares during November 2006 and the Acquisition. The current directors of Castle Bidco are John Moran, Joanna Bannerman, PaulDavidson and Jim McMahon. The registered office of Castle Bidco is 21-23 HillStreet, Mayfair, London W1J 5JW and its registered number is 5988526. (b) Castle Topco Castle Topco is a limited liability company incorporated in England and Wales inconnection with the Acquisition. Castle Topco is a consortium company which isowned by Bank of Scotland (through its wholly-owned subsidiary, Uberior) (as to50.0 per cent.) and West Coast Capital (through Pacific Shelf 1410 which itindirectly wholly owns) (as to 50.0 per cent.). Castle Topco has not tradedsince its date of incorporation, nor has it entered into any obligations, otherthan in connection with the acquisition by Castle Bidco of 26,310,243 CrestNicholson Shares during November 2006 and the Acquisition. The current directors of Castle Topco are John Moran, Joanna Bannerman, PaulDavidson and Jim McMahon. The registered office of Castle Topco is 21-23 HillStreet, Mayfair, London W1J 5JW and its registered number is 5988581. (c) The Castle Consortium Uberior Uberior was incorporated as a limited company in Scotland (Registered NumberSC235067) on 7 August 2002 and is ultimately a wholly-owned subsidiary of HBOS.HBOS was formed from the merger of Halifax plc with Bank of Scotland inSeptember 2001 and is a diversified financial services company providing, interalia, corporate and treasury services in addition to retail banking services toconsumers and companies in the UK and overseas. Uberior operates as a holding company for investments arranged by Bank ofScotland Joint Ventures team, part of Bank of Scotland's Corporate divisionwithin HBOS. The investments are made for HBOS' own account in a broad range ofasset backed business sectors. Bank of Scotland is both an active investor in and lender to the commercialproperty and retail markets. Its Joint Ventures team is engaged in the businessof providing funding strips including senior debt, mezzanine debt and equity toasset backed sectors such as commercial property, leisure, hotels and housebuilding. The Joint Ventures team currently has 120 joint ventures in itsportfolio, with committed funding of over £12 billion. The latest audited consolidated annual accounts of Uberior in respect of thefinancial year ended 31 December 2005, disclosed operating income of £46 million(£37 million to 31 December 2004), profit before tax of £112 million (£43million to 31 December 2004), total assets of £584 million (£483 million(restated) as at 31 December 2004) and net assets of £59 million (£36 million(restated) as at 31 December 2004). The registered office of Uberior is Level 1, Citymark, 150 Fountainbridge,Edinburgh, EH3 9PE. The directors of Uberior are B.S. Anderson, D.K. Gateley,H.C. McMillan, J.C. Moran, E.J. Morrison, I Robertson and G.R.A. Shankland. Theauthorised share capital of Uberior is £1,000 divided into 1,000 shares of £1each of which 1 share has been issued. Following the Scheme becoming effective, Uberior will be the legal andbeneficial owner of 50.0 per cent. of the issued share capital of Castle Topco. West Coast Capital/Pacific Shelf 1410 Pacific Shelf 1410 is a limited liability company incorporated in Scotland on 12January 2007 for the purpose of holding TBH Investments' interest in CastleBidco. Pacific Shelf 1410 is wholly-owned by TBH Investments. The currentdirectors of Pacific Shelf 1410 are Jim McMahon and Paul Davidson. Theregistered office of Pacific Shelf 1410 is Marathon House, Olympic BusinessPark, Drybridge Road, Dundonald, Ayrshire KA2 9AE and its registered number isSC314564. TBH Investments is an investment holding company based in Ayrshire, Scotland.TBH Investments' primary activity is investing in the property sector in the UKusing funding made available by West Coast Capital and, where appropriate,external debt funding. TBH Investments has interests in a number of jointventure vehicles which have acquired or established substantial propertyportfolios. TBH Investments is indirectly wholly-owned by West Coast Capital, a privateequity fund established in February 2001 and owned and funded by the retailentrepreneur Sir Tom Hunter, and by Jim McMahon and Paul Davidson. West CoastCapital is a partnership established in Scotland which invests mainly in theretail and property sectors and has substantial liquid reserves available forinvestment, often co-investing with other major investors and institutions. TBH Investments was incorporated in Scotland as a private limited company on 6November 1992 with registered number 02762478. The registered office is c/oMcGrigors, 5 Old Bailey, London EC4M 7BA. The directors of TBH Investments areJim McMahon and Paul Davidson. The authorised capital of TBH Investments is£1,000 divided into 200 ordinary shares of £1.00 each and 800 A ordinary sharesof £1.00 each, of which 140 ordinary shares of £1.00 each and 560 A ordinaryshares of £1.00 each are in issue. The audited group accounts of TBH Investments for the 12 month period ended 31March 2006 disclosed profit before tax of £31.5 million (£7.5 million to 31March 2005), total assets of £173.1 million (£87.7 million as at 31 March 2005)and net assets of £89.8 million (£56.6 million as at 31 March 2005). Following the Scheme becoming effective, Pacific Shelf 1410 will be the legaland beneficial owner of 50.0 per cent. of the issued share capital of CastleTopco. 8. Future plans for Crest Nicholson Castle Bidco believes that the next stage of Crest Nicholson's development wouldbe best achieved under private ownership, under which the executive managementteam and employees will be able to fully concentrate on the long-termdevelopment of the business without the short-term targets and reportingrequirements imposed on companies by the public markets. Castle Bidco viewsCrest Nicholson as being a market leading player in both the urban regenerationand traditional house building sectors and considers that such characteristicsshould help ensure its successful future expansion and development. Castle Bidcohas confirmed that it attaches great importance to the skills and experience ofthe existing management and employees of Crest Nicholson and believes that theywill be key factors in the future success of Crest Nicholson and willaccordingly look to financially incentivise key employees of the Crest NicholsonGroup. Discussions regarding the terms of such incentivisation will commence shortly after the Scheme becomes effective. In this context, Castle Bidco has provided assurances to the Crest NicholsonBoard that: - the existing employment rights and terms and conditions of employees of CrestNicholson will be safeguarded on the Scheme becoming effective; - in accordance with the agreement reached with the Pension Fund Trustees,details of which are set out in paragraph 9 below, the participating employersin the Crest Nicholson Defined Benefit Scheme will fund the deficit in the CrestNicholson Defined Benefit Scheme over a period of 10 years, by paying anincreased funding rate to the Crest Nicholson Defined Benefit Scheme and CastleBidco has no intention to make detrimental changes to the benefits providedunder the Defined Benefit Scheme; - it does not currently anticipate job losses in the business over thoseenvisaged by the Crest Nicholson management team, as a result of the change ofownership to be effected pursuant to the Scheme; - its strategic plans for Crest Nicholson do not envisage any change to theprincipal locations of the Crest Nicholson business or any redeployment of anymaterial fixed assets whether owned or controlled by Crest Nicholson; and - it intends to support management's strategy of achieving profitable growththrough increasing the scale and capital available to the business. Thisstrategy includes the addition of new regions in due course and further growingCrest Nicholson's land and operational resources to take full advantage offuture value-enhancing growth opportunities. The Board of Crest Nicholson welcomes these assurances. Bank of Scotland has provided debt and/or equity finance to a number of partnersin the house building sector. Bank of Scotland may in the future reviewappropriate combinations with other house building vehicles financed by membersof the HBOS Group, although Bank of Scotland has confirmed that there arecurrently no ongoing discussions regarding any such combinations. Castle Bidco has indicated to the Crest Nicholson Board that, as soon aspracticable after the Scheme becomes effective, it intends to appoint DavidShearer (a current non-executive director of HBOS) as the non-executive chairmanof Crest Nicholson. 9. Pensions The Pension Fund Trustees of the Crest Nicholson Defined Benefit Scheme haveagreed to a proposal from Castle Bidco which provides, amongst other things,that following the Scheme becoming effective: 9.1 Bank of Scotland will provide a guarantee to the Pension FundTrustees in the sum of up to £50 million for a period of 10 years in respect ofthe liability of the participating employers in the Crest Nicholson DefinedBenefit Scheme under section 75 of the Pensions Act 1995 ("Section 75") on theoccurrence of an "insolvency event" within the meaning of section 121 of thePensions Act 2004 in relation to one or more of those employers, or on thewinding up of the Crest Nicholson Defined Benefit Scheme, or, in the sum of theunpaid contribution. The guarantee reduces at a rate of £4 million per annum ona straight-line basis and expires on the tenth anniversary of the EffectiveDate; 9.2 the participating employers will pay the followingcontributions to the Crest Nicholson Defined Benefit Scheme: 9.2.1 the sum of £5 million on or shortly after the Scheme becomeseffective; 9.2.2 £4 million per annum in equal monthly instalments from theseventh month after the date on which the Scheme becomes effective for a periodof 9 years and 6 months; and 9.2.3 the sum of £15 million by the date which is 10 years after thedate when the Scheme becomes effective, and the Pension Fund Trustees have agreed to adopt a schedule of contributionsreflecting the obligations in paragraphs 9.2.1 to 9.2.3 above for the purposesof the recovery plan required under the Pensions Act 2004 arising from theactuarial valuation of the Crest Nicholson Defined Benefit Scheme as at 1February 2007; and 9.3 in consideration of the above matters, the Pension FundTrustees have provided a non-legally binding letter of comfort that theircurrent intention is not to require employer contributions towards the pastservice deficit in the Crest Nicholson Defined Benefit Scheme which exceed theamounts specified in paragraphs 9.2.1 to 9.2.3 above and that the Pension FundTrustees will not alter the investment strategy of the Crest Nicholson DefinedBenefit Scheme without first consulting with the participating employers. 10. Crest Nicholson Share Schemes Appropriate proposals will be made to participants in the Crest Nicholson ShareSchemes in due course. Details of these proposals will be set out in separateletters to be sent to participants in the Crest Nicholson Share Schemes. 11. Financing The Acquisition will be funded by a combination of equity and debt funding. Theequity funding will be provided by the members of the Castle Consortium and debtfacilities of £1.12 billion have been arranged and fully underwritten by Bank ofScotland. These debt facilities will also be used to refinance the existing debtof Crest Nicholson, provide working capital for Crest Nicholson after completionof the Acquisition and pay certain fees and expenses associated with theAcquisition. Under the agreements for the provision of the debt facilities, Castle Bidco hasagreed, save as may be required by the Court, not to waive or amend any term orcondition to the Scheme without the prior written consent of Bank of Scotland. Rothschild has confirmed that it is satisfied that sufficient resources areavailable to Castle Bidco to satisfy the full cash consideration payable toCrest Nicholson Shareholders under the terms of the Acquisition. Further information on the financing of the Acquisition will be set out in theScheme Circular. 12. Implementation and Inducement Fee Agreements As an inducement to Castle Bidco carrying out its due diligence in respect ofthe Acquisition and devoting management time and resources in connection withthe Acquisition, Crest Nicholson has agreed, at the request of Castle Bidco, topay Castle Bidco an inducement fee equal to £7,150,005 (unless such fee isconsideration for a taxable supply by Castle Bidco or any member of the CastleBidco Group, in which case the inducement fee shall be the amount as, aftertaking into account any available refund or credit in respect of such VATavailable to Crest Nicholson or the relevant member of the Crest NicholsonGroup, will involve a net cost to Crest Nicholson of £7,150,005). This fee becomes payable if: • any of the Crest Nicholson Directors withdraws or qualifies theirrecommendation of the Proposals or modifies it in a manner which is adverse toCastle Bidco and the Acquisition subsequently fails or otherwise fails to becomeeffective; or • the Company fails to take the actions it has agreed to take inconnection with the Scheme, pursuant to the Implementation Agreement and theAcquisition subsequently fails or otherwise fails to become effective; or • before the Acquisition becomes effective, lapses or is withdrawn, aCompeting Offer is made and (a) such offer becomes or is declared unconditionalin all respects or is otherwise completed or implemented or (b) such offer ispublicly recommended by the Crest Nicholson Directors or such of the CrestNicholson Directors as are independent at the relevant time (as the case maybe); Castle Bidco and Crest Nicholson have also entered into the ImplementationAgreement which governs their relationship during the period until the Schemebecomes effective, lapses or is withdrawn. Amongst other things, the partieshave agreed to cooperate to implement the Acquisition and Crest Nicholson hasentered into certain undertakings concerning the conduct of its business and theprovision of certain further information during that period. The full terms of the Implementation Agreement and the Inducement Fee Agreementwill be summarised in the Scheme Circular. 13. Scheme of Arrangement It is intended that the Acquisition will be effected by means of a Scheme ofArrangement between Crest Nicholson and the Scheme Shareholders under section425 of the Companies Act (although Castle Bidco reserves the right, with theconsent of the Takeover Panel, to effect the Acquisition by way of an Offer).The purpose of the Scheme is to allow Castle Bidco to become the owner of theentire issued share capital of Crest Nicholson not currently owned by CastleBidco. This is to be achieved by: • the cancellation of the Cancellation Shares held by CancellationShareholders and the application of the reserve arising from such cancellationin paying up in full a number of New Crest Nicholson Shares (which is equal tothe number of Cancellation Shares cancelled) and issuing the New Crest NicholsonShares to Castle Bidco in consideration for which Cancellation Shareholders willreceive 620 pence per Crest Nicholson Share on the basis set out in paragraph 2to this announcement; and • the transfer by Crest Nicholson Shareholders of the Loan NoteElected Shares in accordance with the Scheme in consideration for which relevantScheme Shareholders will be issued by Castle Bidco with Loan Notes (instead ofthe cash to which they would otherwise have been entitled), on the basis set outin paragraph 3 of this announcement. The implementation of the Acquisition is subject to the satisfaction or waiverof all the Conditions and the further terms to be set out in the Scheme ofArrangement. In particular, the Scheme requires the passing of a resolution atthe Court Meeting by a majority in number of the Scheme Shareholders present andvoting, either in person or by proxy, representing not less than 75 per cent. invalue of the Crest Nicholson Shares voted by such Scheme Shareholders. The Crest Nicholson Shares held by Castle Bidco and the Crest Nicholson Sharesheld by relevant members of the HBOS Group (in respect of which they arebeneficially interested or have a discretionary interest) are precluded fromvoting at the Court Meeting. The Crest Nicholson Shares held by Castle Bidco andsuch interests of the members of the HBOS Group will not therefore count towardsthe majority required at the Court Meeting to approve the Scheme. Castle Bidcoand the relevant members of the HBOS Group holding Crest Nicholson Shares arenot, however, precluded from voting at the EGM. Implementation of the Scheme will also require the passing of the SpecialResolution at the EGM, requiring the approval of Crest Nicholson Shareholdersrepresenting at least 75 per cent. of the votes cast at the EGM, which will beheld immediately after the Court Meeting. Castle Bidco and the relevant membersof the HBOS Group holding Crest Nicholson Shares will be entitled to attend andvote at the EGM. Following the Meetings, the Scheme will only become effective following sanctionby the Court and delivery of the Court Order to and, in the case of the CapitalReduction, registration of the Court Order by, the Registrar of Companies. Upon the Scheme becoming effective, it will be binding on all SchemeShareholders, irrespective of whether or not they attended or voted at the CourtMeeting or the EGM (and if they attended and voted, whether or not they voted infavour). Expected timetable of principal events: Posting of Scheme Circular 21 March 2007 Court Meeting 16 April 2007 Extraordinary General Meeting 16 April 2007 Court hearing to sanction the Scheme and to confirm the 2 May 2007Capital Reduction (if sanctioned by the Crest Nicholson Shareholders) Effective Date of the Scheme 3 May 2007(if sanction and confirmation of the Court is received) Latest date for consideration to be posted to 17 May 2007Shareholders (if Scheme becomes effective on 3 May 2007) All dates in this announcement which relate to the implementation of the Schemeare subject to the approval of the Court and are therefore subject to change. Further details of the Scheme will be contained in the Scheme Circular. 14. Delisting, cancellation of trading and re-registration If the Scheme becomes effective, it is intended that applications be made to theUK Listing Authority for the listing of Crest Nicholson Shares on the OfficialList to be cancelled and to the London Stock Exchange for the cancellation oftrading of Crest Nicholson Shares on its market for listed securities, in eachcase to take effect on the day that is two Business Days after the EffectiveDate. It is proposed that, following the Scheme becoming effective and after the CrestNicholson Shares have been de-listed, Crest Nicholson will be re-registered as aprivate limited company. 15. General Dresdner Kleinwort is acting as financial and Rule 3 adviser and broker to CrestNicholson. Rothschild and Panmure Gordon are acting as financial adviser andbroker respectively to Castle Bidco. The Proposals will be subject to the conditions set out in Appendix I to thisannouncement but will be made solely through, and be subject to the furtherterms set out in, the Scheme Circular, which will contain the full terms andconditions of the Acquisition, including details of how to vote in favour of theScheme. Any acceptance or other response to the Proposals should be made only onthe basis of the information in the Scheme Circular. Crest NicholsonShareholders are advised to read carefully the formal documentation in relationto the Proposals once it has been despatched. The Scheme Circular will alsoinclude full details of the Scheme, together with notices of the Court Meetingand the EGM. The Acquisition will be governed by English law and be subject to the applicablerequirements of the Takeover Code, the Takeover Panel, the London Stock Exchangeand the Financial Services Authority. The implications of the Scheme for persons not resident in the UK may beaffected by the laws of the relevant jurisdiction. Any persons who are subjectto the laws of any jurisdiction other than the UK should inform themselves aboutand observe any applicable requirements. Appendix II contains the sources and bases of information used in thisannouncement. Appendix III contains the definitions of certain expressions used in thisannouncement. All times referred to are London times unless otherwise stated. Enquiries:Rothschild (Financial Adviser to Castle Bidco) Tel: +44 (0)20 7280 5000 Alex MidgenKevin RamsdenPanmure Gordon (Broker to Castle Bidco) Tel: +44 (0)20 7459 3600 Tim LinacreRichard GrayCrest Nicholson PLC Tel: +44 (0)1932 580 555 John MatthewsStephen StoneDresdner Kleinwort (Financial and Rule 3 Adviser and Broker Tel: +44 (0)20 7623 8000to Crest Nicholson) Charles BattenMichael CovingtonAngus Kerr (Corporate Broking) Brunswick (Public Relations Adviser to Crest Nicholson) Tel: +44 (0)20 7404 5959Andrew FenwickKate Miller Rothschild, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting exclusively for Castle Bidco and forno-one else in relation to the Proposals and will not be responsible to anyoneother than Castle Bidco for providing the protections afforded to clients ofRothschild or for affording advice in relation to the Proposals or any mattersreferred to herein. Panmure Gordon, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting exclusively for Castle Bidco and forno-one else in relation to the Proposals and will not be responsible to anyoneother than Castle Bidco for providing the protections afforded to clients ofPanmure Gordon or for affording advice in relation to the Proposals or anymatters referred to herein. Dresdner Kleinwort, which is authorised and regulated by the Financial ServicesAuthority, is acting for Crest Nicholson and for no-one else in relation to theProposals and will not be responsible to anyone other than Crest Nicholson forproviding the protections afforded to customers of Dresdner Kleinwort or foraffording advice in relation to the Proposals or any matters referred to herein. Further information in relation to the Acquisition The distribution of this announcement and the availability of the Proposals injurisdictions other than the UK may be restricted by law and therefore anypersons who are subject to the laws of any jurisdiction other than the UK shouldinform themselves about, and observe, any applicable requirements. Thisannouncement has been prepared for the purpose of complying with English law andthe Takeover Code and the information disclosed may not be the same as thatwhich would have been disclosed if this announcement had been prepared inaccordance with the laws of jurisdictions outside England. Copies of this announcement are not being, and not must be, directly orindirectly, mailed or otherwise forwarded, distributed or sent in or into orfrom any jurisdiction where to do so would violate the laws in that jurisdictionand persons receiving this announcement (including custodians, nominees andtrustees) must not mail or otherwise forward, distribute or send it in, into orfrom any such jurisdiction. The Acquisition will be subject to the applicable rules and regulations of theUK Listing Authority, the London Stock Exchange and the Takeover Code. Castle Bidco reserves the right, with the consent of the Takeover Panel, toimplement the acquisition of Crest Nicholson by way of a takeover offer underthe Takeover Code. If the Acquisition is implemented by way of an Offer, unlessotherwise determined by Castle Bidco and permitted by applicable law andregulation, the Offer may not be made, directly or indirectly, in or into or bythe use of mails of, or by any other means or instrumentality (including,without limitation, electronic mail, facsimile transmission, telex, telephone,internet or other forms of electronic communication) of interstate or foreigncommerce of, or any facility or a national state or securities exchange of, anyjurisdiction where to do so would violate the laws of that jurisdiction and theOffer may not be capable of acceptance by any such use, means, instrumentalityor facility. The Loan Notes that may be issued in connection with the Acquisition pursuant tothe Loan Note Alternative have not been, nor will they be, listed on any stockexchange and have not been, nor will they be, registered under the US SecuritiesAct or under the securities laws of any state or other jurisdiction of theUnited States (or under the securities laws of any other jurisdiction, theresidents of which Castle Bidco is advised to treat as Loan Note RestrictedOverseas Persons); The relevant clearances have not been, and will not be,obtained from the securities commission of any province of Canada; nor has anyprospectus been lodged with, or registered by, the Australian Securities andInvestments Commission; nor have any steps been taken, nor will any steps betaken, to enable the Loan Notes to be offered in compliance with the applicablesecurities laws of Japan or any other jurisdiction if to do so would constitutea violation of, or require registration thereof under, the relevant laws in suchjurisdiction. Accordingly, unless the relevant clearances are obtained or anexemption under such act or securities laws is available or unless otherwisedetermined by Castle Bidco or required by the Takeover Code and permitted byapplicable laws and regulations, the Loan Notes may not be offered, sold,resold, delivered or transferred, directly or indirectly, in or into the UnitedStates, Canada, Australia or Japan or any other jurisdiction if to do so wouldconstitute a violation of the relevant laws of, or require registration thereofin, such jurisdiction or to, or for the account or benefit of, a person locatedin the United States, Canada, Australia or Japan or such other jurisdiction.Accordingly, subject to certain limitations and exceptions, the Loan Notes willnot be available to, inter alia, Loan Note Restricted Overseas Persons. Neither the US Securities and Exchange Commission nor any US state securitiescommission has approved or disapproved of the Loan Notes, or determined if thisannouncement is accurate or complete. Any representation to the contrary is acriminal offence. Forward looking statements This document contains certain forward-looking statements with respect to thefinancial condition, results of operations and business of Crest Nicholson andthe Crest Nicholson Group and certain plans and objectives of the boards ofdirectors of Crest Nicholson and Castle Bidco. These forward-looking statementscan be identified by the fact that they do not relate only to historical orcurrent facts. Forward-looking statements often use words such as "anticipate","target", " expect", "estimate", "intend", "plan", "goal", "believe", "will","may", "should", "would", "could" or other words of similar meaning. Thesestatements are based on assumptions and assessments made by the boards ofdirectors of Crest Nicholson and Castle Bidco in light of their experience andtheir perception of historical trends, current conditions, expected futuredevelopments and other factors they believe appropriate. By their nature,forward-looking statements involve risk and uncertainty, and, inter alia, thefactors described in the context of such forward-looking statements in thisdocument could cause actual results and developments to differ materially fromthose expressed in or implied by such forward-looking statements. Should one or more of these risks or uncertainties materialise, or shouldunderlying assumptions prove incorrect, actual results may vary materially fromthose described in this announcement. Crest Nicholson and Castle Bidco assume noobligation to update or correct the information contained in this announcement. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the Takeover Code, if any person is, orbecomes, "interested" (directly or indirectly) in one per cent. or more of anyclass of "relevant securities" of Crest Nicholson, all "dealings" in any such"relevant securities" of that company (including by means of an option inrespect of, or a derivative referenced to, any such "relevant securities") mustbe publicly disclosed by no later than 3.30 pm on the London business dayfollowing the date of the relevant transaction. This requirement will continueuntil the date on which the Scheme become effective, lapses, or is withdrawn, orupon the "offer period" otherwise ending (or, if Castle Bidco elects to effectthe Acquisition by way of an Offer, until the date on which such Offer becomes,or is declared, unconditional as to acceptances, lapses or is otherwisewithdrawn or on which the period for which such Offer is open for acceptanceotherwise ends). If two or more persons act together pursuant to an agreement orunderstanding, whether formal or informal, to acquire an "interest" in "relevantsecurities" of Crest Nicholson, they will be deemed to be a single person forthe purpose of Rule 8.3. Under the provisions of Rule 8.1 of the Takeover Code,all "dealings" in "relevant securities" of Crest Nicholson by Castle Bidco or byCrest Nicholson, or by any of their respective "associates", must be disclosedby no later than 12 noon on the London business day following the date of therelevant transaction. 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 at http://www.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 Takeover Code, which can also befound on the Takeover Panel's website. If you are in any doubt as to whether ornot you are required to disclose a "dealing" under Rule 8, you should consultthe Takeover Panel. Appendix I: Conditions to the implementation of the Acquisition 1. The Acquisition will be conditional upon the Schemebecoming unconditional and becoming effective by not later than 7 July 2007 orsuch later date (if any) as Crest Nicholson and Castle Bidco may, with theconsent of the Takeover 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, representing75 per cent. or more in value of Crest Nicholson Shareholders (other than CastleBidco) present and voting, either in person or by proxy, at the Court Meeting; (b) the resolution(s) in connection with or required to approveand implement the Scheme being duly passed by the requisite majority at the EGM;and (c) the sanction of the Scheme and the confirmation of theCapital Reduction by the Court (in either case, with or without modifications onterms acceptable to Crest Nicholson and Castle Bidco) and the delivery of acertified copy of the Court Order and the minute of such reduction attachedthereto to the Registrar of Companies in England and Wales and the registration,in relation to the Capital Reduction, of such Court Order by him. 3. Crest Nicholson and Castle Bidco have agreed that, subjectas stated in condition 4 below, the Acquisition will be conditional upon thefollowing matters and, accordingly, the office copy of the Court Order will notbe delivered to the Registrar of Companies in England and Wales and theregistration of the Court Order with the Registrar of Companies will not occurunless the Conditions (as amended if appropriate) have been satisfied or waived: (a) no government or governmental, quasi-governmental,supranational, statutory or regulatory body or association, institution oragency (including any trade agency) or any court or other body (including anyprofessional or environmental body) or person in any relevant jurisdiction (eacha "Relevant Authority") having decided to take, instituted, implemented orthreatened any action, proceeding, suit, investigation, enquiry or reference orenacted, made or proposed and there not continuing to be outstanding anystatute, regulation, order or decision that would or might be reasonablyexpected to: (i) make the Acquisition or its implementation or theacquisition of any shares in, or control of, Crest Nicholson by any member ofthe Wider Castle Bidco Group void, unenforceable or illegal under the laws ofany relevant jurisdiction or directly or indirectly prohibit or otherwisematerially restrict, prevent or delay or interfere with the implementation of,or impose additional material conditions or obligations with respect to, orotherwise challenge or materially interfere with the Acquisition or theacquisition of any shares in, or control of, Crest Nicholson by any member ofthe Wider Castle Bidco Group; (ii) require the divestiture by any member of the Wider CastleBidco Group or by any member of the Wider Crest Nicholson Group of all or anypart of their respective businesses, assets or properties or impose anylimitation on their ability to conduct all or any part of their respectivebusinesses and to own or control any of their respective assets or propertieswhich, in any such case, is material in the context of the Wider Castle BidcoGroup or the Wider Crest Nicholson Group in either case taken as a whole; (iii) impose any limitation on, or result in any delay in, theability of any member of the Wider Castle Bidco Group to acquire or hold or toexercise effectively, directly or indirectly, all or any rights of ownership ofshares or other securities (or the equivalent) in, or to exercise voting ormanagement control over, any member of the Wider Crest Nicholson Group or on theability of any member of the Wider Crest Nicholson Group to hold or exerciseeffectively, directly or indirectly, all or any rights of ownership of shares orother securities (or the equivalent) in, or to exercise management control over,any other member of the Wider Crest Nicholson Group which, in any such case, ismaterial in the context of the Wider Castle Bidco Group or the Wider CrestNicholson Group in either case taken as a whole; (iv) require any member of the Wider Castle Bidco Group or of theWider Crest Nicholson Group to acquire or offer to acquire any shares or othersecurities (or the equivalent) in any member of the Wider Crest Nicholson Groupor any asset owned by any third party (other than the acquisition of CrestNicholson Shares in the implementation of the Acquisition) which, in any suchcase, is material in the context of the Wider Castle Bidco Group or the WiderCrest Nicholson Group in either case taken as a whole; (v) impose any limitation on the ability of any member of theWider Castle Bidco Group or the Wider Crest Nicholson Group to conduct itsbusiness which, in any such case, is material in the context of the Wider CastleBidco Group or the Wider Crest Nicholson Group in either case taken as a whole;or (vi) otherwise adversely affect any or all of the business, assets,financial or trading position or profits or prospects of any member of the WiderCastle Bidco Group or of the Wider Crest Nicholson Group to an extent which ismaterial in the context of the Wider Castle Bidco Group or of the Wider CrestNicholson Group in either case taken as a whole, and all applicable waiting and other time periods during which any such RelevantAuthority could decide to take, institute, implement or threaten any suchaction, proceeding, suit, investigation, enquiry or reference or take any otherstep under the laws of any jurisdiction in respect of the Acquisition or theproposed acquisition of any shares in Crest Nicholson having expired, lapsed orbeen terminated; (b) (i) all necessary notifications, filings or applications whichare the responsibility of any member of the Crest Nicholson Group having beenmade in connection with the Acquisition; (ii) all statutory or regulatory obligations in any jurisdictionhaving been complied with and all applicable waiting periods (including anyextensions thereof) under any applicable legislation or regulation of anyrelevant jurisdiction having expired, lapsed or been terminated in each case inrespect of the Acquisition or the acquisition by any member of the Wider CastleBidco Group of any shares in, or control of, Crest Nicholson and, save asDisclosed, all other necessary statutory or regulatory obligations in anyrelevant jurisdiction having been complied with by the Wider Crest NicholsonGroup; (iii) all authorisations, orders, grants, recognitions,confirmations, licences, consents, clearances, permissions and approvals(together "Authorisations") reasonably necessary for the implementation of theAcquisition having been obtained in terms and in a form reasonably satisfactoryto Castle Bidco (where failure to obtain such Authorisations would have amaterial adverse effect on the Wider Crest Nicholson Group, the Wider CastleGroup or the ability of Castle Bidco to implement the Acquisition) fromappropriate Relevant Authorities or, save as Disclosed, from any persons orbodies with whom any member of the Wider Crest Nicholson Group has entered intocontractual arrangements; and (iv) such Authorisations together with all material Authorisationsnecessary for any member of the Wider Crest Nicholson Group to carry on itsbusiness remaining in full force and effect and no notice of any intention torevoke, suspend, restrict or modify or not to renew any of the same having beenmade at the time at which the Scheme becomes effective. (c) save as Disclosed, there being no provision of any agreement,arrangement, licence, permit or other instrument to which any member of theWider Crest Nicholson Group is a party or by or to which any such member or anyof its assets is or may be bound, entitled or subject which, as a result of themaking or implementation of the Acquisition or the acquisition or proposedacquisition by any member of the Wider Castle Bidco Group of any shares in, orchange in the control or management of, Crest Nicholson or otherwise, would ormight reasonably be expected to result in, to an extent which is material in thecontext of the Wider Crest Nicholson Group taken as a whole: (i) any monies borrowed by or any other indebtedness (actual orcontingent) of any such member of the Wider Crest Nicholson Group becomingrepayable or capable of being declared repayable immediately or earlier than thestated repayment date or the ability of such member to borrow monies or incurany indebtedness being withdrawn or inhibited or becoming capable of beingwithdrawn or inhibited; (ii) the creation or enforcement of any mortgage, charge or othersecurity interest over the whole or any part of the business, property or assetsof any such member of the Wider Crest Nicholson Group or any such securityinterest (whenever arising or having arisen) becoming enforceable; (iii) any assets or interest of, or any asset the use of which isenjoyed by, any such member of the Wider Crest Nicholson Group being or fallingto be disposed of or charged or any right arising under which any such asset orinterest could be required to be disposed of or charged or could cease to beavailable to any member of the Wider Crest Nicholson Group; (iv) the interest or business of any such member of the Wider CrestNicholson Group in or with any other person, firm or company (or any agreementsor arrangements relating to such interest or business) being terminated oradversely affected; (v) any such member of the Wider Crest Nicholson Group ceasing tobe able to carry on business under any name under which it presently does so; (vi) the value of any such member of the Wider Crest NicholsonGroup or its financial or trading position or prospects being prejudiced oradversely affected; (vii) any liability of any member of the Wider Crest Nicholson Groupto make any severance, termination, bonus or other payment to any of thedirectors or the officers; (viii) any such agreement, arrangement, licence or other instrument orthe rights, liabilities, obligations or interests of any such member thereunderbeing terminated or adversely modified or any onerous obligation arising or anyadverse action being taken or any obligation or liability arising thereunder; or (ix) the creation of any liabilities (actual or contingent) by anysuch member of the Wider Crest Nicholson Group; and no event having occurred which, under any provision of any agreement,arrangement, licence, permit or other instrument to which any member of theWider Crest Nicholson Group is a party or by or to which any such member or anyof its assets may be bound or be subject, could reasonably be expected to resultin any of the events or circumstances as are referred to in subparagraphs (i) to(ix) of this condition (c); (d) except as Disclosed, no member of the Wider Crest NicholsonGroup having since 31 October 2005: (i) save as between Crest Nicholson and wholly-ownedsubsidiaries of Crest Nicholson and save for Scheme Shares issued pursuant tothe Crest Nicholson Share Schemes or options granted or awards of sharesthereunder, issued or agreed to issue or authorised the issue or grant ofadditional shares of any class, or securities, or securities convertible into,or exchangeable for, or rights, warrants or options to subscribe for or acquire,any such shares or convertible securities; (ii) other than the Interim Dividend, recommended, declared, paidor made any bonus issue, dividend or other distribution, whether payable in cashor otherwise, other than a distribution by any wholly-owned subsidiary of CrestNicholson to Crest Nicholson or another wholly-owned subsidiary of CrestNicholson; (iii) save for intra-Crest Nicholson Group transactions,implemented or authorised any merger or demerger or other than in the ordinarycourse of business, acquired or disposed of or transferred, mortgaged orcharged, or created any other security interest over, any asset or any right,title or interest in any asset which is material in the context of the WiderCrest Nicholson Group taken as a whole or authorised, proposed or announced itsintention to propose the same; (iv) implemented or authorised any reconstruction, amalgamation,scheme or other transaction or arrangement which is, in any case, material inthe context of the Wider Crest Nicholson Group taken as a whole; (v) save as between Crest Nicholson and wholly-owned subsidiariesof Crest Nicholson, purchased, redeemed or repaid any of its own shares or othersecurities or reduced or, save in respect of the matters referred to insub-paragraph (i) above, made or authorised any other change in its sharecapital; (vi) issued or authorised the issue of any debentures or save forintra-Crest Nicholson Group transactions and other than in the ordinary courseof business made or authorised any change in its loan capital or incurred orincreased any indebtedness or liability (actual or contingent) or proposed to doany of the foregoing; (vii) entered into, varied or terminated, or authorised the entryinto, variation or termination of, any contract, transaction, commitment orarrangement (whether in respect of capital expenditure or otherwise), otherwisethan in the ordinary course of business, which is of a long term, onerous orunusual nature or magnitude or which involves or could involve an obligation ofa nature or magnitude which is, in any such case, material in the context of theWider Crest Nicholson Group taken as a whole; (viii) save as between Crest Nicholson and wholly-owned subsidiariesof Crest Nicholson, entered into any contract, commitment or arrangement whichwould be restrictive on the business of the Wider Crest Nicholson Group otherthan to a nature and extent which is normal in the context of the businessconcerned; (ix) been unable, or admitted in writing that it is unable, to payits 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 allor a substantial part of its business; (x) other than in respect of a company which is dormant and wassolvent at the relevant time, taken any corporate action or had any steps takenor legal proceedings started or threatened against it or petition presented ororder made for its winding-up (voluntary or otherwise), dissolution orreorganisation (or for any analogous proceedings or steps in any jurisdiction)or for the appointment of a receiver, administrator, administrative receiver,trustee or similar officer (or for the appointment of any analogous person inany jurisdiction) of all or any of its assets and revenues; (xi) save as between Crest Nicholson and wholly-owned subsidiariesof Crest Nicholson, waived, compromised or settled any claim which is materialin the context of the Wider Crest Nicholson Group taken as a whole; (xii) entered into or varied the terms of any service agreement orarrangement with any senior executive of Crest Nicholson or any member of theWider Crest Nicholson Group which is material in the context of the business ofany member of the Wider Crest Nicholson Group or entered into or varied theterms of any service agreement or arrangement with any director of any member ofthe Wider Crest Nicholson Group; (xiii) made or agreed or consented to (other than in connection withthe Scheme) any alteration to its memorandum or articles of association or otherincorporation documents which is material in the context of the Wider CrestNicholson Group taken as a whole; (xiv) modified or agreed to modify the terms of any of the CrestNicholson Share Schemes; (xv) made or consented to any change to the terms of the trust deedsor rules constituting the pension schemes established for its directors and/oremployees and/or their dependants or to the benefits which accrue, or to thepensions which are payable thereunder, or to the basis on which qualificationfor or accrual or entitlement to such benefits or pensions are calculated ordetermined, or to the basis upon which the liabilities (including pensions) ofsuch pension schemes are funded or made, or agreed or consented to, any changeto the trustees in each case where the consequence would be material in thecontext of the Wider Crest Nicholson Group taken as a whole; (xvi) proposed, agreed to provide or modified in any respect the termsof any share option scheme, incentive scheme or other benefit relating to theemployment or termination of employment of any person employed by the WiderCrest Nicholson Group to the extent material in the context of the Wider CrestNicholson Group taken as a whole; or (xvii) entered into any contract, commitment or arrangement or passedany resolution or made any offer (which remains open for acceptance) withrespect to, or proposed or announced any intention to effect or propose, any ofthe transactions, matters or events referred to in this condition; (e) save as Disclosed, since 31 October 2005: (i) no adverse change or deterioration having occurred in thebusiness, assets, financial or trading position or profits or prospects of anymember of the Wider Crest Nicholson Group which is material in the context ofthe Wider Crest Nicholson Group taken as a whole; (ii) no litigation, arbitration proceedings, prosecution or otherlegal proceedings having been threatened, announced, instituted or remainingoutstanding by, against or in respect of any member of the Wider Crest NicholsonGroup or to which any member of the Wider Crest Nicholson Group is or may becomea party (whether as plaintiff or defendant or otherwise) and no enquiry orinvestigation by or complaint or reference to any Relevant Authority or otherinvestigative body against or in respect of any member of the Wider CrestNicholson Group having been threatened, announced, implemented or instituted orremaining outstanding by, against or in respect of any member of the Wider CrestNicholson Group which, in any such case, would or might reasonably be expectedto materially adversely affect the Wider Crest Nicholson Group taken as a whole; (iii) no contingent or other liability having arisen which wouldor might reasonably be expected to adversely affect the business, assets,financial or trading position or profits or prospects of any member of the WiderCrest Nicholson Group to an extent which is material to the Crest NicholsonGroup taken as a whole; and (iv) no steps having been taken and no omissions having been madewhich are likely to result in the withdrawal, cancellation, termination ormodification of any licence held by any member of the Wider Crest NicholsonGroup, which is necessary for the proper carrying on of its business and thewithdrawal, cancellation, termination or modification of which is material inthe context of the Wider Crest Nicholson Group taken as a whole; (f) Castle Bidco not having discovered: (i) save as Disclosed that any financial, business or otherinformation concerning the Wider Crest Nicholson Group publicly disclosed at anytime by any member of the Wider Crest Nicholson Group is materially misleading,contains a material misrepresentation of fact or omits to state a fact necessaryto make the information contained therein not materially misleading; (ii) save as Disclosed that any member of the Wider CrestNicholson Group or any partnership, company or other entity in which any memberof the Wider Crest Nicholson Group has a significant economic interest and whichis not a subsidiary undertaking of Crest Nicholson is subject to any liability,contingent or otherwise, which is not disclosed in the annual report andaccounts of Crest Nicholson for the year ended 31 October 2005 and which ismaterial in the context of the Wider Crest Nicholson Group taken as a whole; (iii) save as Disclosed that any past or present member of theWider Crest Nicholson Group has failed to comply with any applicable legislationor the regulations of any jurisdiction or any notice or requirement of anyRelevant Authority with regard to the use, storage, treatment, transport,handling, disposal, discharge, spillage, release, leak or emission of any wasteor hazardous or harmful substance or any substance likely to impair theenvironment or harm human or animal health or otherwise relating toenvironmental matters or human health or that there has otherwise been any suchuse, storage, treatment, transport, handling, disposal, discharge, spillage,release, leak or emission (whether or not the same constituted non-compliance byany person with any such legislation or regulation, and whenever or wherever thesame may have taken place), any of which non-compliance would be likely to giverise to any liability (whether actual or contingent) or cost on the part of anymember of the Wider Crest Nicholson Group which, in each case, is material inthe context of the Wider Crest Nicholson Group taken as a whole; (iv) save as Disclosed that there is or is likely to be anyobligation or liability (whether actual or contingent) of any member of theWider Crest Nicholson Group to make good, repair, re-instate or clean up anyproperty now or previously owned, occupied, operated or made use of orcontrolled by any past or present member of the Wider Crest Nicholson Groupunder any environmental legislation, regulation, notice, circular, order orother requirement of any Relevant Authority in any jurisdiction which in eachcase, is material in the context of the Wider Crest Nicholson Group taken as awhole; or (v) any information which affects the import of any informationdisclosed to Castle Bidco at any time by or on behalf of the Wider CrestNicholson Group and which is material in the context of the Wider CrestNicholson Group taken as a whole. 4. Castle Bidco reserves the right to waive all or any ofconditions 3(a) to (f) inclusive, in whole or in part. Castle Bidco shall beunder no obligation to waive or treat as fulfilled any of conditions 3(a) to (f)inclusive by a date earlier than the date specified in condition 1 above for thefulfilment thereof notwithstanding that the other conditions of the Acquisitionmay at such earlier date have been waived or fulfilled and that there are atsuch earlier date no circumstances indicating that any of such conditions maynot be capable of fulfilment. 5. If Castle Bidco is required by the Takeover Panel to makean offer for any Crest Nicholson Shares under Rule 9 of the Takeover Code,Castle Bidco may make such alterations to the above conditions as are necessaryto comply with that Rule. 6. The Acquisition will lapse and the Scheme will not proceed(unless the Takeover Panel otherwise consents) if the acquisition of CrestNicholson is referred to the Competition Commission before the date of the CourtMeeting. 7. Castle Bidco reserves the right to elect to implement theAcquisition by way of an Offer. In such event, such offer will be implemented onthe same terms (subject to appropriate amendments, including (withoutlimitation) an acceptance condition set at 90 per cent. (or such lesserpercentage as Castle Bidco may, subject to compliance with the Takeover Code,decide) of the shares to which such offer relates and of the voting rightscarried by those shares, so far as applicable, as those which would apply to theScheme. 8. If the Scheme is effected: (a) the Loan Note Elected Shares will be acquired by Castle Bidcofully paid and free from all liens, charges, equitable interests, encumbrances,rights of pre-emption and any other rights and interests of any naturewhatsoever and together with all rights now and hereafter attaching thereto,including voting rights and the right to receive and retain in full alldividends and other distributions (if any) declared, made or paid on or afterthe date of this announcement other than the Interim Dividend; and (b) Cancellation Shareholders will be deemed to have confirmed tothe Company that the Cancellation Shares held by them are fully paid and freefrom all liens, charges, equitable interests, encumbrances, rights ofpre-emption and any other rights and interests of any nature whatsoever. 9. For the purpose of these conditions: "Wider Castle Bidco Group" means Castle Bidco, its holding companies and thesubsidiary undertakings of any such holding companies, associated undertakingsand any other undertakings in which Castle Bidco and such undertakings(aggregating their interests) have a substantial interest; "Wider Crest Nicholson Group" means Crest Nicholson and its subsidiaryundertakings, associated undertakings and any other undertakings in which CrestNicholson and such undertakings (aggregating their interests) have a substantialinterest; and "subsidiary undertaking", "holding company", "associated undertaking" and "undertaking" have the meanings given by the Companies Act (but for thesepurposes ignoring paragraph 20(1)(b) of Schedule 4A to the Companies Act) and "substantial interest" means a direct or indirect interest in 20 per cent. ormore of the equity capital (as defined in the Companies Act) of an undertaking. 10. For the purpose of these conditions: (a) "Disclosed" means disclosed in: (i) any of the documents made available as at 6.00pm on 5 March 2007 in respectof the proposed Acquisition in the data room located at Linklaters, One SilkStreet, London EC2Y 8HQ; (ii) any other documents delivered to an Information Recipient in respect of theAcquisition by or on behalf of Crest Nicholson on or before 6.00pm on5 March 2007; (iii) any public announcement by Crest Nicholson to a Regulatory InformationService on or before 6.00pm on 5 March 2007; (iv) the announcement released on 25 January 2007 by Crest Nicholson of itspreliminary results for the financial year ended 31 October 2006; or (v) the report and accounts of Crest Nicholson for the financial year ended 31October 2005. (b) "Information Recipient" means each of: (i) any director or employee of any member of the Castle Bidco Group; and (ii) any professional advisers engaged by any member of the Castle Bidco Groupin connection with the Acquisition. 11. The Acquisition and the Scheme are governed by English law andwill be subject to the exclusive jurisdiction of the English courts and theconditions set out above. Appendix II: Bases and sources of the financial information 1. Unless otherwise stated: (i) the financial information relating to Crest Nicholson hasbeen extracted without material adjustment from the published audited reportsand accounts of Crest Nicholson for the relevant period; and (ii) the information relating to Castle Bidco has been providedby the Castle Bidco Directors. 2. The value of the existing issued share capital of CrestNicholson of approximately £701.3 million is based on 113,120,318 CrestNicholson Shares in issue as at the Reference Date. 3. The fully diluted value of Crest Nicholson of approximately£715 million is based on the fully diluted number of Crest Nicholson Shares of115,322,657 as at the Reference Date. 4. Unless otherwise stated: (i) the financial information in this announcement relating toUberior has been sourced from the audited financial statements of Uberior forthe 12 month period ended 31 December 2005; and (ii) the financial information in this announcement relating toTBH Investments has been sourced from the audited financial statements of TBHInvestments for the 12 month period ended 31 March 2006. 5. Unless otherwise stated, all prices quoted for shares areclosing mid-market prices as derived from the Daily Official List. Appendix III: Definitions The following definitions apply throughout this announcement unless the contextrequires otherwise. 1994 Executive the Crest Nicholson Group Executive Share Option Scheme 1994, asScheme amended from time to time (including an unapproved schedule)2004 Executive the Crest Nicholson Executive Share Option Scheme 2004, asScheme amended from time to time (including an unapproved schedule)Acquisition the proposed issue of the New Cobra Shares to Castle Bidco in consideration of the cancellation of the Scheme Shares pursuant to the SchemeAustralia the Commonwealth of Australia, its territories and possessionsBank of The Governor and Company of the Bank of ScotlandScotlandBusiness Day any day, other than a Saturday or Sunday or public holiday or bank holiday, on which banks are open for normal business in the City of LondonCanada Canada, its provinces and territories and all areas subject to its jurisdictionCancellation all Scheme Shares other than the Loan Note Elected SharesSharesCancellation those Crest Nicholson Shareholders holding Scheme Shares otherShareholders than any Loan Note Elected SharesCapital the proposed reduction of the share capital of Crest NicholsonReduction comprising the cancellation of the Scheme Shares provided for by the Scheme under section 135 of the Companies ActCastle Bidco Castle Bidco Limited, a company incorporated in England and Wales with registered number 5988526Castle Bidco the directors of Castle BidcoDirectorsCastle Bidco Castle Topco, Castle Midco and Castle BidcoGroupCastle the investors in Castle Topco, comprising Bank of ScotlandConsortium (through its wholly-owned subsidiary, Uberior) and West Coast Capital (through Pacific Shelf 1410 which it indirectly wholly owns)Castle Midco Castle Midco Limited, a company incorporated in England and Wales with registered number 5988530, being the parent company of Castle BidcoCastle Topco Castle Topco Limited, a company incorporated in England and Wales with registered number 5988581, being the parent company of Castle MidcoClosing Price the closing middle market quotation of a Crest Nicholson Share as derived from the Daily Official ListCompanies Act the Companies Act 1985 (as amended)Competing an offer or proposal (however effected, including by means of aOffer scheme of arrangement) to acquire 30 per cent. or more of the voting rights attributable to the issued share capital or the whole or a material part of the undertaking, business or assets of the Crest Nicholson Group which is made by a person or entity other than Castle Bidco or any person acting in concert (as defined in the Takeover Code) with Castle BidcoConditions the conditions to the implementation of the Scheme and the Acquisition which are set out in Appendix I to this announcementCourt the High Court of Justice for England and WalesCourt Meeting the meeting of Scheme Shareholders to be convened by an order of the Court pursuant to section 425 of the Companies Act for the purpose of considering and, if thought fit, approving the Scheme (with or without amendment) and any adjournment thereofCourt Order the order of the Court sanctioning the Scheme and confirming the Capital ReductionCrest Crest Nicholson PLC, a company incorporated in England and WalesNicholson or with registered number 1040616the CompanyCrest the board of directors of Crest NicholsonNicholsonBoard or BoardCrest the Crest Nicholson Group Pension and Life Assurance SchemeNicholsonDefinedBenefit SchemeCrest the directors of Crest NicholsonNicholsonDirectors orDirectorsCrest the group comprising Crest Nicholson and its subsidiaryNicholson undertakings and a member of the Crest Nicholson Group shall beGroup construed accordinglyCrest the 1994 Executive Scheme, the 2004 Executive Scheme, theNicholson Deferred Plan, the LTIP, the SAYE and the SIPShare SchemesCrest holders of Crest Nicholson Shares from time to timeNicholsonShareholdersorShareholdersCrest the ordinary shares of 10 pence each in the capital of CrestNicholson NicholsonShares orSharesDaily Official the Daily Official List of the London Stock ExchangeListDeferred Plan the Crest Nicholson Deferred Share Bonus Plan as amended from time to timeDresdner Dresdner Kleinwort LimitedKleinwortEffective Date the day on which the Scheme becomes effective in accordance with its termsEGM or the extraordinary general meeting of Crest Nicholson to beExtraordinary convened in connection with the Proposals and any adjournmentGeneral thereofMeetingFinancial the Financial Services Authority of the UK in its capacity as theServices competent authority for the purposes of Part VI of FSMAAuthorityForm of the form of election to be issued to Crest Nicholson ShareholdersElection in connection with the Loan Note AlternativeFSMA the Financial Services and Markets Act 2000 (as amended)HBOS Group the group comprising HBOS and its subsidiary undertakingsHBOS HBOS plc, a company incorporated in Scotland with registered number SC218813Implementation the implementation agreement dated 7March 2007 between CastleAgreement Bidco and Crest NicholsonInterim the interim dividend of 9.7pence per Crest Nicholson ShareDividend declared by Crest Nicholson on 25 January 2007and payable to the holders of Crest Nicholson Shares whose names appear on the register as at 9March2007Japan Japan, its cities and prefectures, territories and possessionsListing Rules the rules and regulations made by the Financial Services Authority in its capacity as the UK Listing Authority under FSMA, and contained in the UK Listing Authority's publication of the same name;Loan Notes any loan notes issued by Castle Bidco under the terms of a loan note instrument proposed to be entered into between Castle Bidco and Bank of Scotland as guarantorLoan Note the alternative whereby Crest Nicholson Shareholders (other thanAlternative Loan Note Restricted Overseas Persons) may elect to receive, subject to the terms and conditions of the Scheme and the other terms and conditions to be set out in the Scheme Circular, Loan Notes instead of all or part of the cash consideration to which they would otherwise be entitled under the Scheme or Offer (if applicable)Loan Note Scheme Shares (if any) in respect of which valid elections haveElected Shares been made under the Loan Note AlternativeLoan Note a person (including an individual, partnership, unincorporatedRestricted syndicate, limited liability company, unincorporated association,Overseas trust, trustee, executor, administrator or other legalPerson representative) in, or resident in, or any person whom Castle Bidco reasonably believes to be in, or resident in, (i) any of the United States, Australia, Canada or Japan or any jurisdiction where extension or acceptance of the Loan Note Alternative would violate the law of, or require registration in, that jurisdiction or (ii) in respect of whom Castle Bidco is advised to treat as loan note restricted overseas persons in order to observe the laws of such jurisdiction or to avoid the requirement to comply with any governmental or other consent or any registration, filing or other formality which Castle Bidco regards as unduly onerousLondon Stock London Stock Exchange plcExchangeLTIP the Crest Nicholson Long Term Share Incentive Plan, as amended from time to timeMeetings the Court Meeting and/or the EGM, as the case may beNew Crest the new ordinary shares of 10 pence each in the capital of CrestNicholson Nicholson to be issued in accordance with the SchemeSharesOffer if Castle Bidco elects to effect the Acquisition by way of a takeover offer, the offer to be made by or on behalf of Castle Bidco to acquire all the Crest Nicholson Shares (which may or may not include Shares already owned by Castle Bidco and/or persons acting in concert with it) and, where the context so requires, any subsequent revision, variation, extension or renewal thereofOfficial List the official list of the Financial Services AuthorityPacific Shelf Pacific Shelf 1410 Limited, a company incorporated in Scotland1410 with registered number SC314564Panmure Gordon Panmure Gordon (UK) LimitedPension Fund the trustees of the Crest Nicholson Defined Benefit SchemeTrusteespounds or £ pounds sterling, the lawful currency of the UKProposals means the recommended offer by Castle Bidco to (i) cancel the Scheme Shares and (ii) acquire the Loan Note Elected Shares by way of the Scheme and, where the context requires, any subsequent revision, variation, extension and renewal thereofReference Date 5 March2007, the last practicable date prior to this announcementRegistrar of the Registrar of Companies in England and WalesCompaniesRegulatory any of the Regulatory Information Services approved by theInformation Financial Services Authority and set out in appendix 3 to theService Listing RulesRothschild N M Rothschild & Sons LimitedSAYE the Crest Nicholson Sharesave Scheme (1998), as amended from time to timeScheme or the scheme of arrangement proposed to be made under section 425Scheme of of the Companies Act between Crest Nicholson and the holders ofArrangement Scheme Shares, with or subject to any modification, addition or condition approved or imposed by the Court and agreed to by Crest Nicholson and Castle BidcoScheme the document proposed to be sent to Crest Nicholson ShareholdersCircular containing, inter alia, the Scheme, certain information about Crest Nicholson and the Castle Bidco Group and the notices convening the MeetingsScheme Record 6.00 p.m. on the Business Day immediately prior to the EffectiveTime DateScheme registered holders of Scheme SharesShareholdersScheme Shares (a) all Crest Nicholson Shares which are: (b) allotted and in issue at the date of the Scheme Circular; (c) allotted and issued after the date of the Scheme Circular and before the Voting Record Time; or (d) allotted and issued at or after the Voting Record Time and before the Scheme Record Time either on terms that the original or any subsequent holders of such shares are to be bound by the Scheme or in respect of which their holders are, or have agreed in writing to be, bound by the Scheme other than those Crest Nicholson Shares held by Castle BidcoSIP the Crest Nicholson Share Incentive Plan, as amended from time to timeSpecial the special resolution to be proposed at the Crest Nicholson EGMResolution in connection with the Schemesubsidiary or to be construed in accordance with the Companies ActholdingcompanyTakeover Code the City Code on Takeovers and MergersTakeover Panel the Panel on Takeovers and MergersTBH TBH Investments Limited, a company incorporated in England andInvestments Wales with registered number 2762478Uberior Uberior Ventures Limited, a company incorporated in Scotland with registered number SC235067UK Listing the Financial Services Authority acting in its capacity as theAuthority competent authority for listing under the FSMAUnited Kingdom the United Kingdom of Great Britain and Northern Irelandor UKUnited States the United States of America, its territories and possessions, any State of the United States of America and the District of ColumbiaUS Securities the Securities Act of 1933 (as amended)ActVAT value added taxVoting Record the date and time to be fixed by the Court for determiningTime entitlement to vote at the Court Meeting (to be set out in the notice of Court Meeting) or, if the Court Meeting is adjourned, 6.00 p.m. on the day two days immediately preceding the day fixed for the adjourned Court MeetingWest Coast a partnership established under the laws of ScotlandCapital This information is provided by RNS The company news service from the London Stock Exchange
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