Chesnara Regulatory News (CSN)

Chesnara plc

24 November 2016

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No.596/2014. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

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

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS. INVESTORS SHOULD NOT PURCHASE OR SUBSCRIBE FOR ANY SECURITIES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT ON THE BASIS OF INFORMATION CONTAINED IN A PROSPECTUS EXPECTED TO BE PUBLISHED BY THE COMPANY TODAY IN CONNECTION WITH THE AQUISITION AND THE FIRM PLACING AND PLACING AND OPEN OFFER.

Chesnara plc

Proposed Acquisition of Legal & General Nederland Levensverzekering Maatschappij N.V ("Legal & General Nederland") by Chesnara Holdings B.V. for €160 million (approximately £135.6 million) (the "Acquisition"), and Firm Placing and Placing and Open Offer by Chesnara plc ("Chesnara" or the "Company") to raise approximately £70 million

Highlights

· Proposed acquisition of Legal & General Nederland, a Dutch life and pension insurer and a wholly owned subsidiary of Legal & General Group plc, for €160 million (c.£135.6 million)

· Acquisition provides a strong fit with Chesnara's strategy of acquiring life and pension businesses in its chosen markets

· Legal & General Nederland increases Chesnara's scale in the Netherlands and provides a complementary platform to the Waard Group, Chesnara's existing local operations

· Consideration of €160 million represents a 33% discount to Economic Value

· Acquisition enhances long-term cash generation and supports Chesnara's dividend strategy

· Firm Placing and Placing and Open Offer to raise a total of approximately £70 million before expenses to part fund the Acquisition; balance of the consideration being funded from Chesnara's cash resources and incremental debt

· Acquisition and its financing are expected on completion of the Acquisition ("Completion") to enhance Chesnara Group's EcV by £126.3 million, gross of the £70 million equity raise. This equates to an EcV enhancement per share of 28 pence (7.6%)

John Deane, Chief Executive of Chesnara, commented: "Chesnara is delighted to be acquiring another well-run and attractive business in the Dutch life assurance market. As with our Swedish subsidiary Movestic, we will be writing protection and pension new business. This will complement our closed book consolidation business Waard. We see great opportunities for both organisations within the Chesnara group to deliver value to our customers, their advisors and our shareholders."

Shore Capital is acting as sole sponsor in relation to the Acquisition and the Firm Placing and Placing and Open Offer and Shore Capital and Panmure Gordon (UK) Limited ("Panmure Gordon") are acting as joint global co-ordinators and joint bookrunners in relation to the Firm Placing and Placing and Open Offer. References to "Shore Capital" refer to Shore Capital and Corporate Limited and/or Shore Capital Stockbrokers Limited, as the context admits.

Stifel Nicolaus Europe Limited (trading as Keefe, Bruyette & Woods) ("Keefe, Bruyette & Woods") is acting as financial adviser to the Company in relation to the Acquisition and as Placing Agent in relation to the Firm Placing and Placing and Open Offer.

The Firm Placing and Placing and Open Offer are both fully underwritten by Shore Capital and Panmure Gordon and will be conditional upon, inter alia, the approval of shareholders at a General Meeting expected to be held on 13 December 2016. The Acquisition is categorised as a Class 1 transaction under the UK Listing Rules and is therefore conditional upon the approval of Chesnara shareholders at the General Meeting.

Further information on the Acquisition and the Firm Placing and Placing and Open Offer will be contained within the combined Class 1 circular and prospectus which is expected to be sent to Qualifying Shareholders later today. Appendix I sets out the full terms and conditions of the Firm Placing and Placing. Appendix II sets out the definitions of terms used in this announcement.

Sterling and Euro conversions are based on the exchange rate of £1.00 : €1.18, except for any pro forma and accretion figures which are based on the 30 June 2016 exchange rate of £1.00: € 1.21.

Indicative abridged timetable 

(a full timetable is set out in paragraph 20 below)

Enquiries

Chesnara plc

John Deane, Chief Executive +44 (0)1772 972079

David Rimmington, Finance Director +44 (0)1772 972079

Shore Capital

Sponsor and joint global co-ordinator and joint bookrunner

Hugh Morgan +44 (0)20 7408 4090

Toby Gibbs

Panmure Gordon

Joint global co-ordinator and joint bookrunner

Dominic Morley +44 (0)20 7886 2500

Charles Leigh-Pemberton

Keefe, Bruyette & Woods

Financial Adviser in relation to the Acquisition and Placing Agent

Stephen Howard +44 (0)20 7663 5400

Max Cornu-Thenard

FWD Consulting

Financial PR +44 (0)20 7280 0651

Roddy Watt +44 (0)7714 770493

Further information in relation to the Acquisition and Firm Placing and Placing and Open Offer

1. INTRODUCTION

On 24 November 2016, Chesnara announced that it had reached agreement on the terms of the proposed acquisition of Legal & General Nederland. Legal & General Nederland was founded in 1984, as an indirect wholly owned subsidiary of the Legal & General Group. Legal & General Nederland then acquired Unilife Netherlands later the same year. Legal & General Nederland is a specialist insurer operating in the life insurance and pensions sector in the Netherlands. It is a leading Dutch player in adviser-led risk and investment-linked products, serving high-end affluent customers and has an established defined contribution group pension platform focused on Dutch SMEs. The headline consideration for the Acquisition is €1601 million to be paid in cash. The Acquisition consideration is proposed to be financed by a combination of the Firm Placing and Placing and Open Offer to raise in aggregate approximately £70 million (before expenses), the New Debt Facilities totalling £100.2 million (£40 million and €71 million), which replace an existing debt facility of £52.8 million and raises £47.4 million of incremental debt (as described below at paragraph 5.2 below) and the balance from Chesnara's existing cash resources.

The Directors believe that Legal & General Nederland is an attractive acquisition target and that its addition to the Chesnara Group will continue the Company's successful acquisition-based growth within its target markets and value range. The Acquisition provides Chesnara with a platform for further expansion into the Netherlands and the Directors believe that, as in the case of Waard, Chesnara's first acquisition in the Netherlands in 2015, there is a strong cultural fit between Legal & General Nederland and the Chesnara Group.

In view of the size of the Acquisition in relation to Chesnara, the Acquisition constitutes a Class 1 transaction for the purposes of the Listing Rules and therefore requires the approval of Shareholders, which will be sought at a General Meeting of the Company. The notice convening the General Meeting will be set out in the Prospectus. The Acquisition also requires regulatory approval, including obtaining a declaration of no objection (verklaring van geen bezwaar) from the Dutch Central Bank (De Nederlandsche Bank) ("DNB"), the Dutch local regulator which itself will confirm that the PRA, as group supervisor, has no objections to the Acquisition. The principal terms of the Acquisition are described in more detail in paragraph 1 of this letter and Part II (Principal Terms of the Acquisition) of the Prospectus.

The Issue Price represents a discount of approximately 2.9 per cent. to the Closing Price of 309 pence per Ordinary Share on 23 November 2016 (being the Latest Practicable Date). The Firm Placing and Placing and Open Offer are conditional, inter alia, upon the passing of the Resolutions and Admission but are not conditional upon completion of the Acquisition.

2. BACKGROUND TO AND REASONS FOR THE ACQUISITION

The Directors previously identified that the Dutch insurance market was an attractive market to enter due to its highly fragmented characteristics offering the opportunity for consolidation, as well as the Netherlands having a similar regulatory environment to that of the UK. Since the Chesnara Group's entry into the Dutch insurance market (following its successful acquisition of the Waard Group in May 2015), Chesnara has stated its intention to build the Chesnara Group's presence in the Dutch insurance market and has continued to investigate opportunities for value-enhancing acquisitions. Chesnara has a proven track record of acquiring and integrating insurance companies in accordance with the Chesnara Group's strict acquisition criteria and converting these into strong returns to Shareholders.

[1] In addition to the headline consideration, the deferred capital related consideration will accrue from 30 June 2016 to the date of completion of the Acquisition, which is expected to occur during the first quarter of 2017. The Company calculated the maximum interest payable to be €2.3 million.

The acquisition of Legal & General Nederland is consistent with Chesnara's three core strategic objectives:

• Maximise value from in force books

Legal & General Nederland is expected to enhance the future cash flows available for distribution to Shareholders, achieved through the generation of profits combined with the expected reduction of capital requirements.

• Acquire life and pension businesses

A key attraction of the recent acquisition of the Waard Group in the Netherlands was the opportunity it created for Chesnara to replicate its previously successful and proven UK consolidation strategy in the Dutch insurance market. The Acquisition is a logical next step for Chesnara pursuing this strategy. The Acquisition is at a 33 per cent. discount to EcV and hence is value accretive in its own right but, in addition, it significantly increases Chesnara's operational scale bringing, based on information at 30 June 2016, 170,600 policies and €2.2 billion assets under management and as a result its prospects for further acquisition activity in the Netherlands.

• Enhance value through new business

Legal & General Nederland is open to new business and presents an opportunity for Chesnara to generate profits from an appropriately targeted and profitable product offering. The benefits of a philosophy that focuses on profitability rather than sales volume are evidenced by the successful new business operation in Movestic, which has been built upon realistic target market shares.

Attractions to Chesnara of the Legal & General Nederland acquisition

The Directors have reviewed a number of potential acquisitions and believe that Legal & General Nederland offers a suitable and attractive opportunity for Shareholders, policyholders and management. When measured against Chesnara's key assessment criteria for acquisitions of: EcV enhancement, cash generation, customer outcomes and risk profile the Directors believe that the Acquisition is a good strategic fit for the Chesnara Group. In particular:

• Positive expected impact on EcV

The consideration of €160 million (excluding deferred cost of capital related consideration) for the Acquisition represents a 33 per cent. discount to Chesnara's estimate of Legal & General Nederland's EcV of €239 million as at 30 June 2016. The Acquisition and the Firm Placing and Placing and Open Offer are anticipated to increase Chesnara's EcV by approximately 27.5 per cent. or £126.3 million. This represents an EcV per share increase of approximately 28 pence, or 7.6 per cent. In addition to the headline consideration, deferred cost of capital related consideration will accrue for the period from 1 October 2016 to the date of completion, expected to be during the first quarter of 2017. Given that the Acquisition Agreement provides that completion of the Acquisition must occur by no later than 31 July 2017, the Company has calculated the maximum amount of interest payable to be €2.3 million (which assumes that completion of the Acquisition were to occur on 31 July 2017).

• Well capitalised and cash generative company

Legal & General Nederland is well capitalised on a Solvency II basis with a ratio of 219 per cent. As at 30 June 2016, adopting a standard formula model with no transitional arrangements. This together with the fact that Legal & General Nederland is a profitable business results in the potential for phased, orderly capital extraction.

• Consistent governance model and strong operational performance

Legal & General Nederland is a subsidiary of the Legal & General Group, a significant UK FTSE company and as a result a strong corporate governance culture is well established and will continue with Chesnara as the ultimate parent company. It is not envisaged that any significant changes will be required to be made to the Chesnara governance structure as the required changes were implemented by the Chesnara Group following the acquisition of Waard in 2015. Legal & General Nederland has an independent operating model with little direct reliance on the Legal & General Group processes or support. As such, it should continue to deliver its high servicing standards under Chesnara ownership and there is expected to be no requirement for systems separation, migrations or integration. Following completion of the Acquisition, Legal & General Nederland will continue to receive asset management services from LGIM under the LGIM Asset Management Agreement for a further four years, subject to performance, thus ensuring continuity of service levels and policy performance. Further details on the LGIM Asset Management Agreement will be found in paragraph 9.2(a) of Part XIV (Additional Information) of the Prospectus.

• Territory

Legal & General Nederland's location is consistent with the Director's assessment that the Dutch insurance market would present further value adding consolidation potential following Chesnara's acquisition of the Waard Group in 2015. It will enable Chesnara to build upon its established relationship with the DNB in the Netherlands since the Acquisition and will enable the Chesnara Group to utilise its existing organisational structure to exercise control without the need for additional resource. Moreover, the operational and financial size of the Acquisition together with the Waard acquisition creates substantial scale in the Dutch insurance market with 247,118 policies and €2.4 billion of assets under management, as at 30 June 2016, and is expected to support further acquisitions in the region.

• Products

Legal & General Nederland's products are well matched to Chesnara's risk appetite with a focus on protection and unit linked savings together with an acceptable level of exposure to annuities and product guarantees.

• Potential for profitable new business operation

The Acquisition provides potential for new business profits from products that the Chesnara Group understands and are aligned to its risk appetite. Legal & General Nederland has a keen focus on product profitability, a unit linked specialism and sells through an IFA distribution model. This model is consistent with Chesnara's existing open operation in Sweden and is well matched to its strategic objectives regarding new business operations.

Impact Assessment

• Acquisitions maintain the effectiveness of the Chesnara Group's operating model. The Acquisition is expected to both create a source of value enhancement and sustain the cash generation potential of the Enlarged Group and is deemed by the Chesnara Board to be a good cultural fit with the Chesnara Group.

• The Acquisition is expected to increase the Chesnara Group's EcV by approximately £126.3 million 1.

• The Acquisition is expected to enhance the cash flows of the Enlarged Group, supporting the Chesnara Group's dividend strategy.

• The Acquisition is expected to have a positive impact in terms of the absolute level of Chesnara Group Solvency II surplus.

• The potential impact of the Acquisition falls within the Chesnara Group's risk appetite.

• The Enlarged Group's gearing ratio post-acquisition is expected to be 25.8 per cent.which is well within the Chesnara Group's debt and leverage policy which incorporates the Board's risk appetite. The ratio is expected to reduce to below 20 per cent. within one year of completion based on the proposed debt repayment terms.

1 Based on pro-forma adjustment to the Company's EcV at 30 June 2016 and using the closing exchange rates as at 30 June 2016 of £1 = Euro 1.21 and £1 = Swedish Krona 11.38.

Completion of the Acquisition

Completion of the Acquisition is conditional upon, inter alia, Admission, consent of two thirds of the Seller's lenders under its revolving credit facility for the Seller to enter the Acquisition and the receipt of regulatory approval, including obtaining a declaration of no objection (verklaring van geen bezwaar) from the DNB, the local Dutch regulator which itself will confirm that the PRA, as group supervisor, has no objections to the Acquisition, which is expected to be received during the first quarter of 2017. In addition, the Acquisition is also subject to certain conditions which are customary for an acquisition of this nature.

3. SUMMARY INFORMATION ON LEGAL & GENERAL NEDERLAND

Legal & General Nederland was founded in 1984 as a subsidiary of the Legal & General Group and is a specialist insurer operating in the life insurance and pensions sector in the Netherlands. Legal & General Nederland is a leading Dutch player in adviser-led risk and investment-linked products, serving high-end affluent customers and has an established defined contribution group pension platform focused on Dutch SMEs.

Legal & General Nederland is a "top 5" provider in the term assurance market and a market leader in investment-linked products, which are backed by a wide range of investment funds. Legal & General Nederland has strong collaborative ties with IFAs (with approximately 2,000 adviser relationships) through which its business is sold.

Legal & General Nederland's accounts indicate historic profitability with strong solvency ratios on a Solvency II basis. During the period from 1 January 2013 to 30 June 2016 the Legal & General Nederland business paid €151 million of dividends to Legal & General Group plc.

Key Legal & General Nederland metrics were as follows as at 30 June 2016:

• €219.8 million of Solvency II own funds;

• €2.2 billion of funds under management;

• Approximately 170,600 policies; and

• Solvency ratio of 219 per cent.

Legal & General Nederland is split into three operating segments: risk, wealth and group pensions. As at the Latest Practicable Date, the Legal & General Nederland business had 170,600 in-force policies split by product as follows:

• 114,200 in Risk;

• 47,900 in Wealth; and

• 8,500 in Group Pensions.

As a subsidiary of a group that is listed on the London Stock Exchange, Legal & General Nederland has in place financial reporting processes and procedures to enable it to report to the standards required under Chesnara ownership, which will benefit the transition process following completion of the Acquisition. Legal & General Nederland is regulated by the DNB, the prudential supervisor of the Dutch financial market, and reports using the Solvency II regime standard formula for calculating its capital requirements, and does not use any transitional arrangements, nor adjustments regarding volatility or matching.

Legal & General Nederland's operations are predominantly managed "in-house" and are almost fully independent from the Legal & General Group support. Legal & General Nederland receives investment management services at arm's length from LGIM.

Legal & General Nederland is led by an experienced management team who have an average of 25 years of experience and an average of 8 years working at Legal & General Nederland. The management team is supported by 162 employees which is equivalent to 147 full time employees.

Legal & General Nederland has historically used a degree of reinsurance where it was deemed appropriate to manage the risks that it had written, including two proportional treaties and an excess loss cover.

Summary of the recent key financial dynamics of Legal & General Nederland

During the period from 1 January 2013 to 30 June 2016, Legal & General Nederland has consistently delivered profits on an IFRS basis. The annual levels of profit have been volatile largely due to the IFRS accounting treatment of actuarial liabilities and the assets backing these liabilities. As is common in the Dutch market, the actuarial liabilities for certain policies are valued using economic assumptions that are applied at the point the policy is sold and are not revalued using updated economic inputs, thereby giving rise to greater IFRS profit volatility. IFRS profitability is not directly linked to Solvency or EcV which are considered to be the more commercial relevant financial metrics.

During the period from 1 January 2013 to 30 June 2016, pre-dividend Solvency II "own funds" have increased by €50.2 million (15.7 per cent.). During that same period the SCR has reduced by €4 million (3.8 per cent.) On a year on year basis the movement in "own funds" is significantly more stable than the aforementioned IFRS profits. However, a degree of variability has been evident which is dominated by the impact of movements in interest rates, bond spreads and equity values. Legal & General Nederland is well capitalised with a Solvency II ratio of 219 per cent. as at 30 June 2016. The Solvency II "own funds" as at 30 June 2016 are €219.8 million against a statutory capital requirement of €100.2 million with an absolute level of surplus of approximately €120 million above the statutory requirement. Legal & General Nederland operates to a capital plan which requires a minimum Solvency II ratio of 160 per cent.

4. SUMMARY INFORMATION ON CHESNARA

Chesnara is primarily a life and pensions closed book consolidator, and is the owner of Countrywide Assured, Movestic and the Waard Group. Chesnara has been listed on the premium segment of the London Stock Exchange's Main Market since May 2004.

Key Chesnara Group metrics for the period ending 30 June 2016 were as follows:

• £459.9 million of EcV;

• £5.1 billion of funds under management;

• 907,000 policyholders; and

• 6.96 per cent. dividend yield (based on Chesnara share price as at 30 June 2016).

Chesnara has a track record of identifying, completing and integrating acquisitions, as well as delivering growth and strong shareholder returns. During the period from 1 January 2009 to 28 October 2016, it generated a Total Shareholder Return of 236 per cent. Chesnara currently has a strong financial position. As at 30 June 2016, Chesnara had a Group Solvency II ratio of 148 per cent., with a corresponding regulatory surplus of £100 million. Chesnara operates according to three core strategic objectives, namely:

• Maximising value from its existing business;

• Acquiring further life and pensions businesses where they satisfy stringent assessment criteria; and

• Value enhancement through the writing of profitable new business.

Chesnara's current acquisition strategy is to target opportunities in the UK and the Netherlands which have an acquisition value ranging from £50 million to £200 million and which are earnings accretive for Shareholders. Opportunities are assessed giving full regard to the following four criteria:

• Cash generation expectations (base case and stressed);

• EcV impact;

• Strategic fit and potential; and

• Risk profile.

Further information on the Chesnara Group will be set out in Part IV (Information on the Chesnara Group) of the Prospectus.

5. PRINCIPAL TERMS AND CONDITIONS OF THE ACQUISITION

In order to implement the Acquisition, Chesnara, or one or more of its subsidiaries (as the case may be) has entered into the agreements set out below. A more detailed summary of the key terms of these agreements is set out in Part II (Principal Terms of the Acquisition) of the Prospectus.

5.1 Acquisition Agreement

Under the terms of the Acquisition Agreement, and subject to the satisfaction of certain conditions, the Buyer has agreed to acquire Legal & General Nederland with economic effect from 1 January 2016, with a purchase price adjusted for Legal & General Nederland's 30 June 2016 unaudited financial statements. The final purchase price shall be the sum of €160 million plus an interest rate of 1 per cent. per annum for the period starting on 1 October 2016 to 31 December 2016 and an interest rate of 2 per cent. per annum for the period starting on 1 January 2017 to completion of the Acquisition. Given that the Acquisition Agreement provides that completion of the Acquisition must occur by no later than 31 July 2017, the Company has calculated the maximum amount of interest payable to be €2.3 million (which assumes that completion of the Acquisition were to occur on 31 July 2017). Furthermore, any amount of leakage (if any) will be deducted from the purchase price. The Acquisition Agreement is governed by Dutch law. Completion of the Acquisition is conditional on the following: (a) successful completion of the works council consultation process in the Netherlands; (b) obtaining a declaration of no objection (verklaring van geen bezwaar) from the DNB in relation to the Acquisition in accordance with Article 3.95 of the Dutch Financial Supervision Act (Wet op het financieel toezicht) which itself will confirm that the PRA, as the group supervisor, has no objections to the Acquisition; (c) the resignation of certain nominated individuals from the supervisory board of Legal & General Nederland and replaced with other nominated individuals as supervisory board members of Legal & General Nederland, one of whom shall become chairman, with effect from completion of the Acquisition; (d) the resignation of a nominated current member of the management board of Legal & General Nederland, effective from the earlier of (i) 1 April 2017 and (ii) the date of completion of the Acquisition; (e) the consent of two thirds of the Seller's lenders under its revolving credit facility for the Seller to enter the Acquisition; (f) the absence of a material adverse change occurring under the Sponsor and Placing Agreement prior to Admission or a material adverse change (including a major default that also constitutes a material adverse change)occurring under the Existing Debt Facilities Agreement prior to completion of the Acquisition; (g) the passing of the Resolutions, including approval of the Acquisition, by Chesnara Shareholders at the General Meeting; and (h) Admission. Completion of the Acquisition is expected to take place in the first quarter of 2017.

The Seller has given an indemnity to the Buyer in respect of any losses, damages, costs (including administrative handling costs and reasonable legal costs), liabilities and expenses (including taxes) suffered by the Buyer or Legal & General Nederland arising out of claims from (former) customers of Legal & General Nederland in relation to Woekerpolis up to a maximum amount of €60 million. The indemnity being given is subject to a risk-sharing arrangement between the Seller and the Buyer. Both the indemnity and the rule-sharing arrangement will operate for three years after completion of the Acquisition. Further details on this indemnity and the risk-sharing arrangement to which it is subject will be found in Part II (Principal Terms of the Acquisition) of the Prospectus.

5.2 New Debt Facilities Agreement

The Chesnara Group's Existing Debt Facilities (the "Existing Debt Facilities") of £52.8 million are to be replaced by New Debt Facilities of approximately £100.2 million, comprising both a Sterling and Euro tranche. The facilities will be provided by The Royal Bank of Scotland plc.

The New Debt Facilities will be divided into two separate tranches:

(a) Facility A is a sterling facility for an amount of £40 million and will be used to refinance part of the Chesnara Group's Existing Debt Facilities of £52.8 million; and

(b) Facility B is a Euro facility for an amount of €71 million and will be used to partially fund the costs of the Acquisition.

Both tranches of the New Debt Facilities will remain in place for a period of five years. Further details of the Chesnara Group's Existing Debt Facilities and the New Debt Facilities are set out in paragraphs 9.1(d) and 9.1(e) of Part XIV (Additional Information) of the Prospectus. The Existing Debt Facilities will be irrevocably cancelled and repaid on completion of the Acquisition.

6. FINANCING THE ACQUISITION

Chesnara proposes to fund the Acquisition through a combination of:

• the proceeds of the Firm Placing and Placing and Open Offer of 23,333,334 New Ordinary Shares at an Issue Price of 300 pence per New Ordinary Share, raising gross proceeds of approximately £70 million and net proceeds of approximately £66.1 million after deduction of estimated expenses of the Firm Placing and Placing and Open Offer. The principal terms of the Firm Placing and Placing and Open Offer are set out in paragraph 9 below;

• the New Debt Facilities totalling £100.2 million (£40 million and €71 million), which replace an existing debt facility of £52.8 million and raises £47.4 million of incremental debt. The key terms of the New Debt Facilities are set out in paragraph 9.1(e) of Part XIV (Additional Information) of the Prospectus; and

• the balance from Chesnara's own cash resources.

7. RELATED PARTY TRANSACTION

Columbia Threadneedle Investments is currently interested in approximately 12.16 per cent. of the Company's issued share capital and is therefore deemed a substantial shareholder of Chesnara for the purposes of the Listing Rules. As part of the Firm Placing and Placing and Open Offer, Columbia Threadneedle Investments has subscribed for 2,270,713 New Ordinary Shares pursuant to the Firm Placing and has conditionally subscribed for 567,678 New Ordinary Shares pursuant to the Placing, in each case at the Issue Price, amounting to £8.5 million at the Issue Price. Columbia Threadneedle Investment's participation in the Firm Placing and Placing and Open Offer constitutes a smaller related party transaction pursuant to Listing Rule 11.1.10R (and therefore Chesnara is not required to comply with the requirements of Listing Rule 11.1.7R).

8. STRUCTURE OF THE ISSUE

The Company proposes to raise an aggregate of £70 million (gross) through the issue of 23,333,334 New Ordinary Shares by way of the Firm Placing and Placing and Open Offer. The decision to structure the equity capital raising by way of the Firm Placing and Placing and Open Offer takes into account a number of factors, including the total net proceeds to be raised. Whilst recognising the importance of pre-emption rights, the Directors are also cognisant that there may be a limit to the amount of additional capital that can be sought from existing Shareholders. The Directors consider the Firm Placing and Placing and Open Offer to be an appropriate fundraising structure, providing certainty of funds to complete the Acquisition and access to new institutional investors to broaden the Chesnara Group's shareholder base, while providing existing Shareholders with the opportunity to participate in the fundraising through the Open Offer. Subject to the conditions to the Placing and Open Offer being satisfied, Qualifying Shareholders are being offered the opportunity to apply for the Open Offer Shares at the Issue Price pro rata to their holdings of Existing Ordinary Shares on the Record Date on the basis of 3.69 New Ordinary Shares for every 100 Existing Ordinary Shares ("Basic Open Offer Entitlement"). Qualifying Shareholders are also being given the opportunity, provided they take up their Open Offer Entitlements in full, to apply for Excess Shares through the Excess Application Facility up to a maximum number of Excess Shares equal to two times the number of Existing Ordinary Shares held in such Qualifying Shareholder's name as at the Record Date ("Excess Open Offer Entitlement"). Qualifying Shareholders are not being offered the right to subscribe for the Firm Placed Shares. Qualifying Shareholders with fewer than 28 shares will not have the opportunity to participate in the open offer.

All elements of the Issue have the same Issue Price.

9. PRINCIPAL TERMS OF THE ISSUE

The Company intends to raise gross proceeds of approximately £70 million (approximately £66.1 million net of estimated expenses of the Firm Placing and Placing and Open Offer) through the issue of 23,333,334 New Ordinary Shares by way of the Firm Placing and Placing and Open Offer at the Issue Price. The Issue is conditional upon, amongst other things, Admission becoming effective by no later than 8 a.m. on 15 December 2016 (or such later time and/or date as the Company and the Joint Bookrunners may agree, not being later than 8 a.m. on 29 December 2016).

Placing and Open Offer

The Company intends to raise gross proceeds of approximately £70 million through the Placing and Open Offer of 23,333,334 New Ordinary Shares at the Issue Price.

The Placing and Open Offer is conditional upon, amongst other things, Admission becoming effective by not later than 8 a.m. on 15 December 2016 (or such later time and/or date as the Company may agree with the Banks, not being later than 8 a.m. on 29 December 2016).

The Issue Price represents a discount of £0.09 (2.9 per cent.) to the Closing Price of £3.09 per Existing Ordinary Share on the Latest Practicable Date.

The Joint Bookrunners have agreed, pursuant to the Sponsor and Placing Agreement, to conditionally place all the Open Offer Shares at the Issue Price with institutional and other investors. The commitments of these placees are subject to clawback in respect of valid applications for Open Offer Shares by Qualifying Shareholders pursuant to the Open Offer. Subject to the Placing and Open Offer not being terminated, any Open Offer Shares which are not applied for in respect of the Open Offer will be issued to placees procured by the Joint Bookrunners, or failing which, to the Joint Bookrunners, in each case at the Issue Price, with the net proceeds retained for the benefit of the Company.

Qualifying Shareholders are being given the opportunity to apply for the Open Offer Shares at the Issue Price on and subject to the terms and conditions of the Open Offer, pro rata to their holdings of Existing Ordinary Shares on the Record Date on the following basis:

3.69 New Ordinary Shares for every 100 Existing Ordinary Shares

Fractions of New Ordinary Shares will not be allotted and each Qualifying Shareholder's entitlement under the Open Offer will be rounded down to the nearest whole number. Fractional entitlements will be aggregated and made available in the Excess Application Facility. Accordingly, Qualifying Shareholders with fewer than 28 Existing Ordinary Shares will not have the opportunity to participate in the Open Offer.

Qualifying Shareholders may apply for any whole number of New Ordinary Shares up to their maximum entitlement which, in the case of Qualifying Non-CREST Shareholders, is equal to the number of Basic Open Offer Entitlements as shown on their Application Form or, in the case of Qualifying CREST Shareholders, is equal to the number of Basic Open Offer Entitlements standing to the credit of their stock account in CREST. Qualifying Shareholders with holdings of Existing Ordinary Shares in both certificated and uncertificated form will be treated as having separate holdings for the purpose of calculating their Basic Open Offer Entitlements.

Firm Placing

The Company is proposing to issue 18,668,994 Firm Placed Shares pursuant to the Firm Placing at the Issue Price, the principal terms and conditions of which will be summarised in paragraph 2 of Part III (Terms and Conditions of the Issue) of the Prospectus.

The Firm Placed Shares are not subject to clawback and do not form part of the Placing and Open Offer. The Firm Placing is expected to raise gross proceeds of approximately £56 million. The Firm Placing is subject to the same conditions and termination rights which apply to the Placing and Open Offer. Subject to waiver or satisfaction of the conditions and the Firm Placing not being terminated, the Firm Placed Shares will be issued to placees and/or other subscribers procured by the Joint Bookrunners,or failing which, to the Joint Bookrunners subject to the terms and conditions of the Sponsor and Placing Agreement, with the net proceeds retained for the benefit of the Company. The Firm Placees will not be entitled to participate in the Open Offer in respect of Firm Placed Shares.

Excess Application Facility

Qualifying Shareholders who have taken up their Basic Open Offer Entitlement in full may apply for Excess Shares using the Excess Application Facility up to a maximum number of Excess Shares equal to two times the number of Existing Ordinary Shares held in such Qualifying Shareholder's name as at the Record Date.

Qualifying Non-CREST Shareholders wishing to apply to subscribe for Excess Shares may do so by completing the relevant sections on the Application Form. Qualifying CREST Shareholders who wish to apply to subscribe for more than their Basic Open Offer Entitlements will have Excess Basic Open Offer Entitlements credited to their stock account in CREST and should refer to Part III (Terms and Conditions of the Issue) of the Prospectus for information on how to apply for Excess Shares pursuant to the Excess Application Facility. Excess applications will be satisfied only to the extent that corresponding applications for Basic Open Offer Entitlements are not made by other Qualifying Shareholders or are made for less than their pro rata entitlements. The total number of Open Offer Shares is fixed and will not be increased in response to any applications under the Excess Application Facility. If there is an oversubscription resulting from excess applications, allocations in respect of such excess applications will be scaled down pro rata to the number of Excess Shares applied for under this Excess Application Facility by Qualifying Shareholders or allocated in such manner as the Board may, in its absolute discretion, determine and no assurances can be given that the applications by Qualifying Shareholders will be met in full, in part or at all.

Excess monies in respect of applications which are not met in full will be returned to the applicant (at the applicant's risk) without interest as soon as practicable thereafter by way of cheque or CREST payment, as appropriate.

Further information

Application will be made to the FCA for the New Ordinary Shares to be to be admitted to listing on the premium listing segment of the Official List and application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on its main market for listed securities. Subject to the conditions below being satisfied, it is expected that Admission will become effective on 15 December 2016 and that dealings for normal settlement in the New Ordinary Shares will commence at 8 a.m. on the same day.

The New Ordinary Shares issued under the Firm Placing and Placing and Open Offer, when issued and fully paid, will be identical to, and rank pari passu with, the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid on the Existing Ordinary Shares by reference to a record date on or after Admission. Shareholders should note that the Open Offer is not a rights issue. Qualifying CREST Shareholders should note that the Basic Open Offer Entitlements will not be tradeable or listed and that, although the Basic Open Offer Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of entitlements under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim raised by Euroclear's Claims Processing Unit. Qualifying Non-CREST Shareholders should note that the Application Form is not a negotiable document and cannot be traded. Qualifying Shareholders should be aware that in the Open Offer, unlike in a rights issue, any Open Offer Shares not applied for will not be sold in the market or placed for the benefit of Qualifying Shareholders who do not apply under the Open Offer, but will be subscribed for under the Placing with the net proceeds retained for the benefit of the Company and Qualifying Shareholders who do not apply to take up their Basic Open Offer Entitlements will have no rights under the Open Offer to receive any proceeds from it.

A Qualifying Shareholder that does not take up any Open Offer Shares under the Open Offer (or a Shareholder in the United States or an Excluded Territory who is not eligible to participate in the Open Offer) will experience a dilution of 15.6 per cent. as a result of the Issue.

Further information on the Issue, and the terms and conditions on which it is made, including the procedure for application and payment in the Open Offer, are set out in Appendix I to this announcement (Terms and Conditions of the Issue) and, where relevant, in the Application Form.

The Firm Placing and Placing and Open Offer is conditional, inter alia, upon:

(a) the passing without amendment of the Resolutions at the General Meeting (and not, except with the prior written agreement of the Banks, at any adjournment of such meeting) on 13 December 2016 (or such later date as the Banks may agree) and the Resolutions remaining in force;

(b) the Company having complied with its obligations under the Sponsor and Placing Agreement and under the terms and conditions of the Placing and Open Offer which fall to be performed on or prior to Admission;

(c) the Sponsor and Placing Agreement being entered into and becoming unconditional in all respects (as regards the Firm Placing and Placing and Open Offer) and not having been terminated prior to Admission;

(d) Admission taking place by not later than 8a.m. on 15 December 2016 (or such time and/or date as the Banks and the Company may agree, being not later than 8 a.m. on 29 December 2016);

(e) the Signing Protocol being entered into and not having been terminated in accordance with its terms and no circumstances having arisen such that, in the opinion of the Banks, the Acquisition Agreement would be incapable of completing in accordance with its term; and

(f) the New Debt Facilities Agreement being entered into, becoming unconditional in all respects (other than in relation to conditions relating solely to Admission or completion of the Acquisition Agreement) and not having been terminated in accordance with its terms.

Accordingly, if any such conditions are not satisfied the Firm Placing and Placing and Open Offer will not proceed, any Basic Open Offer Entitlements admitted to CREST will thereafter be disabled and application monies received under the Open Offer will be refunded to the applicants, by cheque (at the applicant's risk) in the case of Qualifying Non-CREST Shareholders and by way of a CREST payment in the case of Qualifying CREST Shareholders, without interest, as soon as practicable thereafter.

10. USE OF PROCEEDS OF THE ISSUE

The Company intends to use the net proceeds of the Firm Placing and Placing and Open Offer to part fund the Acquisition and to satisfy the associated acquisition costs (including adviser fees). In the event that the Acquisition does not complete, the Board intends that the net proceeds of the Issue, after satisfying the expenses related to the Issue and the Acquisition (estimated to amount to approximately £62.2 million), will be used to execute other acquisition opportunities. The Board believes there are a number of such potential acquisition opportunities within the Dutch and wider European insurance markets.

Pending utilisation of the proceeds of the Firm Placing and Placing and Open Offer, monies will be used to strengthen the balance sheet and for working capital purposes in supporting the Chesnara Group's strategy, but to the extent that opportunities for such acquisitions or further capital expenditure are not identified by the Board, the Board will review the Chesnara Group's funding structure and will consider its options, which will include the return of surplus cash to its shareholders in as tax efficient a manner as possible.

11. FINANCIAL EFFECTS OF THE ACQUISITION AND THE ISSUE

The Firm Placing and Placing and Open Offer will result in 23,333,334 New Ordinary Shares being issued. Upon Admission and assuming the exercise of options under any share option schemes, the Enlarged Issued Share Capital is expected to be 149,738,226 Ordinary Shares (excluding 147,535 treasury shares). On this basis, the New Ordinary Shares will represent approximately 15.6 per cent. of the Enlarged Issued Share Capital. A Qualifying Shareholder who does not take up their Basic Open Offer Entitlements in full (and does not receive any other New Ordinary Shares pursuant to the Issue) will have their shareholding in Chesnara diluted by up to approximately 15.6 per cent. as a result of the Issue. Furthermore, a Qualifying Shareholder who takes up their Basic Open Offer Entitlements in full (and does not receive any other New Ordinary Shares pursuant to the Issue) will have their shareholding in Chesnara diluted by approximately 12.5 per cent. as a result of the Firm Placing.

A pro forma statement of net assets of the Company illustrating the effect of the Issue on the Company's audited net assets as at 30 June 2016, as if it had been undertaken at that date, will be set out in Part XI (Unaudited Pro Forma Combined IFRS Financial Information For The Enlarged Group) of the Prospectus. This information is unaudited and has been prepared for illustrative purposes only. Taking into account the receipt of the net proceeds of the Firm Placing and the Placing and Open Offer of approximately £66.1 million, the pro forma net assets of the Company as at 30 June 2016 would have been £380.4 million, with pro forma net cash of £236.7 million. The Issue is not expected to have a material impact on the earnings of the Company. Should the Acquisition complete, it is expected to be earnings accretive. However, the Issue is not conditional upon completion of the Acquisition.

12. CURRENT TRADING AND PROSPECTS

Since 30 June 2016, being the most recently published financial information for Chesnara, the Chesnara Group has traded in line with expectations. One of the key drivers of the performance and position of the Chesnara Group is the economic environment, with key levers being gilt yields, equity markets and the Euro and Swedish Krona to sterling exchange rate. Gilt yields have reduced since 30 June 2016 and the FTSE 100, being a useful barometer for equity performance, has continued to rise in the same period, being 4.8 per cent. higher at the Latest Practicable Date when compared with 30 June 2016. The principal Swedish equity markets have also increased since 30 June 2016, with the OMX30 index having increased by 12.0 per cent. to reach 1,483 as at the Latest Practicable Date. Sterling has strengthened slightly against both the Euro and Swedish Krona in the same period. The net impact of the economic variables is that the financial position of the Chesnara Group has not changed materially since 30 June 2016.

Countrywide Assured, the Chesnara Group's principal operating subsidiary in the UK, has been in run-off for a number of years. The non-economic drivers of the business can be predicted with a reasonable degree of certainty, with expenses being controlled and persistency remaining within the Company's long-term assumptions. Movestic, Chesnara's Swedish subsidiary, has also traded satisfactorily and continues to steadily recover market share in its targeted profitable business segments. The Waard Group contributes only a relatively small proportion of the Chesnara Group's earnings and these have emerged in line with expectations since 30 June 2016.

As at 30 June 2016 there were several ongoing UK regulatory issues, including:

• A FCA investigation into the appropriateness of Chesnara's level of disclosure regarding exit charges, paid-up charges and early transfer charges to its customers holding closed book products;

• the findings and recommendations of the FCA's "Thematic review into the fair treatment of long- standing customers in the life and pension industry" which is under consultation; and

• FCA proposals to cap exit charges on pensions for those aged over 55.

During the period since 30 June 2016 there have been no developments to the position on any of these issues that suggest the accounting treatment and reported outlook as per the 2016 Unaudited Interim Financial Statements has deteriorated. The FCA has confirmed its previous proposals will be implemented and amongst them, a 1 per cent. cap on early exit pension charges for existing personal and stakeholder pension schemes will be introduced from 31 March 2017. The Chesnara Group's 2016 Unaudited Interim Financial Statements published on 30 August 2016 make allowance for the introduction of the 1 per cent. cap

13. DIVIDEND POLICY

The Chesnara Group is committed to offering its Shareholders an attractive income stream arising from the profits of its life assurance business. In its interim results, which were announced on 10 August 2016, the Chesnara Group declared an interim dividend of 6.80 pence per share, an increase of 2.9 per cent. over the dividend of 6.61 pence declared for the comparable period in 2015.

14. GENERAL MEETING

A notice convening a General Meeting to be held at the offices of Panmure Gordon at 11 a.m. on 13 December 2016 at which the Resolutions will be proposed will be set out at the end of the Prospectus. The purpose of the General Meeting is to consider and, if thought fit, pass the Resolutions as set out in full in the Notice of General Meeting.

Your attention is again drawn to the fact that the Firm Placing and Placing and Open Offer and the Acquisition are conditional and dependent upon the Resolutions being passed (there are also additional conditions which must be satisfied before the Acquisition and the Firm Placing and Placing and Open Offer can be completed).

However, Shareholders should be aware that it is possible that, subsequent to Admission becoming effective, the Acquisition could fail to complete. This possibility is discussed further in paragraph 10 above and paragraph 1 of Part II (Principal Terms of the Acquisition) of the Prospectus.

For further information in relation to the Resolutions to be proposed at the General Meeting, see the Notice of General Meeting at the end of the Prospectus.

15. OVERSEAS SHAREHOLDERS

The distribution of the Prospectus, the Application Form and the making of the Open Offer to persons who have registered addresses in, or who are resident or ordinarily resident in, or citizens of, or which are corporations, partnerships or other entities created or organised under the laws of countries other than the United Kingdom or to persons who are nominees of, or custodians, trustees or guardians for, persons who are citizens or nationals of, or resident in, countries other than the United Kingdom may be restricted by the laws or regulatory requirements of the relevant jurisdictions.

Any failure to comply with such restrictions may constitute a violation of the securities laws of the relevant jurisdiction. Those persons should consult their professional advisers as to whether they require any governmental or other consents or need to observe any applicable legal requirement or other formalities to enable them to apply for Open Offer Shares under the Open Offer.

No action has been or will be taken by the Company, the Joint Bookrunners or any other person, to permit a public offering in any jurisdiction where action for that purpose may be required, other than in the United Kingdom.

Receipt of the Prospectus and/or an Application Form and/or a credit of Basic Open Offer Entitlements to a stock account in CREST will not constitute an invitation or offer of securities for subscription, sale or purchase in those jurisdictions in which it would be illegal to make such an invitation or offer and, in those circumstances, the Prospectus and/or the Application Form must be treated as sent for information only and should not be copied or redistributed.

Application Forms will not be sent to, and Basic Open Offer Entitlements will not be credited to stock accounts in CREST of, persons with registered addresses in the United States or any Excluded Territory or their agent or intermediary, except where the Company is satisfied that such action would not result in the contravention of any registration or other legal requirement in any jurisdiction.

It is the responsibility of any person (including, without limitation, custodians, agents, nominees and trustees) outside the United Kingdom wishing to apply for Open Offer Shares under the Open Offer to satisfy himself or herself as to the full observance of the laws of any relevant territory in connection therewith, including obtaining any governmental or other consents that may be required, observing any other formalities required to be observed in such territory and paying any issue, transfer or other taxes due in such territory.

16. TAXATION

Your attention is drawn to Part XII (United Kingdom Taxation) of the Prospectus in relation to taxation matters. If you are in any doubt as to your tax position, you should consult your own professional adviser without delay.

17. EMPLOYEE SHARE SCHEMES

In accordance with the rules of the Share Schemes, the number of ordinary shares subject to subsisting awards under such schemes and/or the exercise price (if any) may be adjusted to take account of the issue of New Ordinary Shares pursuant to the Open Offer. Participants will be informed of such adjustments in due course.

18. FURTHER INFORMATION

Your attention is drawn to the section entitled "Risk Factors" of the Prospectus and to Part XIV (Additional Information) of the Prospectus. You should read all of the information contained in the Prospectus before deciding the action to take in respect of the General Meeting. If you are a Qualifying Shareholder, and, subject to certain exceptions, unless you have a registered address in, or are resident in, the United States or any of the Excluded Territories, your attention is drawn in connection with the Firm Placing and Placing and Open Offer to the further information which will be contained in Part III (Terms and Conditions of the Issue) of the Prospectus.

The results of the votes cast at the General Meeting will be announced as soon as possible once known through a Regulatory Information Service and on the Chesnara website (www.chesnara.co.uk). It is expected that this will be on 13 December 2016.

19. RECOMMENDATION

The Chesnara Board considers the Acquisition and the Issue to be in the best interests of Chesnara and Shareholders as a whole. Accordingly, the Chesnara Board unanimously recommends that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting as they intend to do (or procure to be done, as the case may be) in respect of their entire holdings of 133,043 Ordinary Shares in aggregate, representing approximately 0.1 per cent. of the existing issued ordinary share capital of Chesnara. The Directors are fully supportive of the Firm Placing and Placing and Open Offer. Certain of the Directors of Chesnara (including the Chief Executive and the Group Finance Director) intend to participate in the Placing and Open Offer. The extent of Director participation will be announced post completion of the Issue.

20. Expected Timetable of Principal Events

Each of the times and dates in the table below is indicative only and may be subject to change.(1)

(1) The times and dates set out in the expected timetable of principal events above and mentioned throughout this document may be adjusted by Chesnara with the agreement of the Banks in which event details of the new times and dates will be notified to the UKLA, the London Stock Exchange and, where appropriate, Qualifying Shareholders.

Important Notice

Shore Capital and Corporate Limited and Shore Capital Stockbrokers Limited have been appointed as sponsor and joint bookrunner, respectively, in connection with the Acquisition, the Firm Placing and Placing and Open Offer and Admission. Shore Capital and Corporate Limited and Shore Capital Stockbrokers Limited, which are each authorised and regulated in the UK by the FCA, are acting exclusively for the Company and no one else in connection with the contents of this announcement, the Acquisition, the Firm Placing and Placing and Open Offer, Admission or any other matters referred to in this announcement and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Acquisition, the Firm Placing and Placing and Open Offer, Admission or any other matters referred to in this announcement and will not be responsible for providing the protections afforded to their clients nor for giving advice in relation to the contents of this announcement, the Acquisition, the Firm Placing and Placing and Open Offer, Admission or any other matter or arrangement referred to in this announcement.

Panmure Gordon, which is authorised and regulated in the UK by the FCA, has been appointed as joint bookrunner in connection with the Firm Placing and Placing and Open Offer and Admission and is acting exclusively for the Company and no one else in connection with the contents of this announcement, the Firm Placing and Placing and Open Offer, Admission or any other matters referred to in this announcement and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Firm Placing and Placing and Open Offer, Admission or any other matters referred to in this announcement and will not be responsible for providing the protections afforded to its clients nor for giving advice in relation to the contents of this announcement, the Firm Placing and Placing and Open Offer, Admission or any other matter or arrangement referred to in this announcement.

Keefe, Bruyette & Woods, which is authorised and regulated in the UK by the FCA, has been appointed as financial adviser in connection with the Acquisition and Placing Agent in connection with the Firm Placing and Placing and Open Offer and Admission and is acting exclusively for the Company and no one else in connection with the contents of this announcement, the Firm Placing and Placing and Open Offer, Admission or any other matters referred to in this announcement and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Firm Placing and Placing and Open Offer, Admission or any other matters referred to in this announcement and will not be responsible for providing the protections afforded to its clients nor for giving advice in relation to the contents of this announcement, the Firm Placing and Placing and Open Offer, Admission or any other matter or arrangement referred to in this announcement.

Appendix I: Terms and Conditions of the Firm Placing and the Placing Issue

IMPORTANT INFORMATION ON THE FIRM PLACING AND THE PLACING FOR INVITED PLACEES ONLY.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE FIRM PLACING OR THE PLACING. THE TERMS AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE ONLY DIRECTED (A) AT PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA (OTHER THAN THE UNITED KINGDOM) WHO ARE "QUALIFIED INVESTORS" WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE PROSPECTUS DIRECTIVE (DIRECTIVE 2003/71/EC) ("QUALIFIED INVESTORS"), AND (B) IN THE UNITED KINGDOM, AT QUALIFIED INVESTORS (I) WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER") (NAMELY, AUTHORISED FIRMS UNDER THE FSMA; PERSONS WHO ARE EXEMPT IN RELATION TO PROMOTIONS OF SHARES IN COMPANIES; PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM INVESTING IN COMPANIES; GOVERNMENTS; LOCAL AUTHORITIES OR INTERNATIONAL ORGANISATIONS; OR A DIRECTOR, OFFICER OR EMPLOYEE ACTING FOR SUCH ENTITIES IN RELATION TO INVESTMENT) AND/OR (II) WHO ARE HIGH VALUE ENTITIES FALLING WITHIN ARTICLE 49(2)(A) TO (D) OF THE ORDER (NAMELY, BODIES CORPORATE WITH SHARE CAPITAL OR NET ASSETS OF NOT LESS THAN £5 MILLION (EXCEPT WHERE THE BODY CORPORATE HAS MORE THAN 20 MEMBERS IN WHICH CASE THE SHARE CAPITAL OR NET ASSETS SHOULD BE NOT LESS THAN £500,000)); UNINCORPORATED ASSOCIATIONS OR PARTNERSHIPS WITH NET ASSETS OF NOT LESS THAN £5 MILLION; TRUSTEES OF HIGH VALUE TRUSTS; OR A DIRECTOR, OFFICER OR EMPLOYEE ACTING FOR SUCH ENTITIES IN RELATION TO THE INVESTMENT); AND (C) ANY OTHER PERSON TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED; AND, IN EACH CASE, WHO HAVE BEEN INVITED TO PARTICIPATE IN THE FIRM PLACING AND THE PLACING BY THE JOINT BOOKRUNNERS (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").

THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY PERSON WHO HAS RECEIVED OR IS DISTRIBUTING THESE TERMS AND CONDITIONS MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THESE TERMS AND CONDITIONS RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THESE TERMS AND CONDITIONS DO NOT THEMSELVES CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THE PLACED SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND THE SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY IN, INTO OR WITHIN THE UNITED STATES, EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. THERE WILL BE NO PUBLIC OFFERING OF SECURITIES IN THE UNITED STATES.

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO THE LEGAL, TAX AND BUSINESS RELATED ASPECTS OF AN ACQUISITION OF PLACED SHARES.

Unless otherwise defined in these terms and conditions, capitalised terms used in these terms and conditions shall have the meaning given to them in this announcement.

If a Relevant Person indicates to either Joint Bookrunner that it wishes to participate in the Firm Placing and/or the Placing (together, the "Equity Placings") by making or accepting an offer to acquire Firm Placed Shares pursuant to the Firm Placing (each such person a "Firm Placee") and Open Offer Shares pursuant to the Placing (each such person a "Conditional Placee" and, together with the Firm Placees, the "Placees") it will be deemed to have read and understood these terms and conditions, the announcement of which they form part and the draft prospectus dated 14 November 2016 prepared by, and relating to, the Company (the "Placing Proof") in their entirety and to be making or accepting such offer subject to these terms and conditions and to be providing the representations, warranties, indemnities, agreements and acknowledgements contained herein. In particular, each such Placee represents, warrants and acknowledges that it is a Relevant Person and undertakes that it will acquire, hold, manage and dispose of any of the Placed Shares that are allocated to it for the purposes of its business only. Further, each such Placee represents, warrants and agrees that: (a) if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, that the Placed Shares acquired by and/or subscribed for by it in the Equity Placings will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of securities to the public other than an offer or resale in a member state of the EEA which has implemented the Prospectus Directive to Qualified Investors, or in circumstances in which the prior consent of the Joint Bookrunners has been given to each such proposed offer or resale; and (b) it is not a US Person (as defined in Regulation S), and is not acquiring the Placed Shares for the account or benefit of a US Person, and it is located outside the United States and acquiring the Placed Shares in an "offshore transaction" (as defined in Regulation S) for its own account or purchasing the Placed Shares for an account with respect to which it exercises sole investment discretion.

These terms and conditions and the information contained herein are not for release, publication or distribution, directly or indirectly, in whole or in part, to persons in the United States or any Excluded Territory.

In particular, the Placed Shares referred to in these terms and conditions have not been and will not be registered under the Securities Act or the securities laws of any state or other jurisdiction of the United States and the Placed Shares may not be offered or sold directly or indirectly in, into or within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. There will be no public offering of the Placed Shares in the United States. No offering of the Placed Shares will be made in the United States. The Placed Shares have not been approved or disapproved by the U.S. Securities and Exchange Commission, any state securities commission in the United States or any other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the offer of the Placed Shares or the accuracy or adequacy of these terms and conditions. Any representation to the contrary is a criminal offence in the United States.

The distribution of these terms and conditions and the offer and/or placing of Placed Shares in certain other jurisdictions may be restricted by law. No action has been taken by the Joint Bookrunners or the Company that would permit an offer of the Placed Shares or possession or distribution of these terms and conditions or any other offering or publicity material relating to the Placed Shares in any jurisdiction where action for that purpose is required, save as mentioned above. Persons into whose possession these terms and conditions come are required by the Joint Bookrunners and the Company to inform themselves about and to observe any such restrictions.

No undertaking, representation, warranty or any other assurance, express or implied, is made or given by or on behalf of either Joint Bookrunner or any of their respective affiliates or their respective directors, officers, employees, agents, advisers, or any other person, as to the accuracy, completeness, correctness or fairness of the information or opinions contained in the Placing Proof or this announcement or for any other statement made or purported to be made by any of them, or on behalf of them, in connection with the Company or the Equity Placings and no such person shall have any responsibility or liability for any such information or opinions or for any errors or omissions. Accordingly, save to the extent permitted by law, no liability whatsoever is accepted by any of the Joint Bookrunners or any of their respective affiliates or their respective directors, officers, employees, agents or affiliates or any other person for any loss howsoever arising, directly or indirectly, from any use of this announcement or such information or opinions contained herein or otherwise arising in connection with the Placing Proof.

These terms and conditions do not constitute or form part of, and should not be construed as, any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any Placed Shares or any other securities or an inducement to enter into investment activity, nor shall these terms and conditions (or any part of them), nor the fact of their distribution, form the basis of, or be relied on in connection with, any investment activity. No statement in these terms and conditions is intended to be nor may be construed as a profit forecast and no statement made herein should be interpreted to mean that the Company's profits or earnings per share for any future period will necessarily match or exceed historical published profits or earnings per share of the Company.

Firm Placing and Placing and Open Offer

Placees are referred to these terms and conditions, this announcement and the Placing Proof containing details of, inter alia, the Equity Placings. These terms and conditions, this announcement and the Placing Proof have been prepared and issued by the Company, and each of these documents is the sole responsibility of the Company.

Firm Placing

The Firm Placed Shares are not subject to clawback and do not form part of the Placing and Open Offer. The Firm Placing is subject to the same conditions and termination rights which apply to the Placing and Open Offer.

The Joint Bookrunners have agreed, pursuant to the Sponsor and Placing Agreement, to use reasonable endeavors to place, as agents of the Company, all the Firm Placed Shares at the Issue Price with Firm Placees. Subject to the Firm Placing not being terminated, the Firm Placed Shares will be issued to Firm Placees procured by the Joint Bookrunners or, failing which, to the Joint Bookrunners, subject to the terms and conditions of the Sponsor and Placing Agreement.

Placing and Open Offer

The Joint Bookrunners have agreed, pursuant to the Sponsor and Placing Agreement, to use reasonable endeavors to conditionally place, as agents of the Company, all the Open Offer Shares at the Issue Price with Conditional Placees. Subject to the Placing and Open Offer not being terminated, any Open Offer Shares which are not applied for in respect of the Open Offer will be issued to Placees procured by the Joint Bookrunners or, failing which, to the Joint Bookrunners, subject to the terms and conditions of the Sponsor and Placing Agreement.

The commitments of the Conditional Placees are subject to clawback in respect of valid applications for Open Offer Shares by Qualifying Shareholders pursuant to the Open Offer, including under the Excess Application Facility.

Qualifying Shareholders are being given the opportunity to apply for the Open Offer Shares at the Issue Price on and subject to the terms and conditions of the Open Offer, on the basis of 3.69 Open Offer Shares for every 100 Existing Ordinary Shares held on the Record Date. Open Offer Shares will also be made available to Qualifying Shareholders under the Excess Application Facility. Fractions of Open Offer Shares will not be allotted and each Qualifying Shareholder's entitlement under the Open Offer will be rounded down to the nearest whole number. Qualifying Shareholders applying for their full Basic Open Offer Entitlements may also apply, under the Excess Application Facility, for New Ordinary Shares in excess of their Basic Open Offer Entitlements at the Issue Price. The number of Excess Shares a Qualifying Shareholder can apply for under the Excess Application Facility is capped at a maximum number equal to two times the number of Existing Ordinary Shares held in such Qualifying Shareholder's name as at the Record Date.

The Placed Shares issued under the Firm Placing and Placing and Open Offer, when issued and fully paid, will be identical to, and rank pari passu with, the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid on the Existing Ordinary Shares after Admission.

The Equity Placings

Application will be made to the FCA for the Placed Shares to be issued under the Firm Placing and the Placing and Open Offer to be admitted to the premium listing segment of the Official List and to the London Stock Exchange for the Placed Shares to be admitted to trading on its main market for listed securities. Subject to the conditions below being satisfied, it is expected that Admission will become effective on 15 December 2016 and that dealings for normal settlement in the Placed Shares will commence at 8 a.m. on the same day.

The Firm Placing and Placing and Open Offer are conditional, inter alia, upon:

(i) The Resolutions being passed at the General Meeting;

(ii) Admission becoming effective by not later than 8 a.m. on 15 December 2016 (or such later time and/or date as the Company and the Banks may agree, being no later than 29 December 2016); and

(iii) the Sponsor and Placing Agreement having become unconditional in all respects and not having been terminated in accordance with its terms.

The full terms and conditions of the Open Offer will be contained in the Prospectus to be issued by the Company in connection with the Open Offer and Admission. The Prospectus to be issued by the Company will be approved by the FCA under section 87A of the FSMA and made available to the public in accordance with Rule 3.2 of the Prospectus Rules made under Part VI of the FSMA.

The Joint Bookrunners will seek to procure Placees as agents of the Company. These terms and conditions give details of the terms and conditions of, and the mechanics of participation in, the Equity Placings.

Principal terms of the Equity Placings

a) By participating in the Equity Placings, Placees will be deemed to have read and understood this announcement, these terms and conditions and the Placing Proof in their entirety and to be participating and making an offer for any Placed Shares subject to, and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in, these terms and conditions.

b) The Joint Bookrunners are arranging the Equity Placings severally, and not jointly, nor jointly and severally, as agents of the Company.

c) Participation in the Equity Placings will only be available to persons who are Relevant Persons and who may lawfully be, and are, invited to participate by either of the Joint Bookrunners. The Joint Bookrunners and their respective affiliates are entitled to offer to subscribe for Placed Shares as principal in the Equity Placings.

d) The Joint Bookrunners reserve the right not to accept an offer to subscribe for Placed Shares, either in whole or in part, and may scale down any offer to subscribe for Placed Shares for this purpose.

e) An offer to subscribe for Placed Shares will be made on the basis of this announcement, these terms and conditions and the Placing Proof. A Placee's commitment to subscribe for the number of Placed Shares allocated to it (and in the respective numbers of Firm Placed Shares and Open Offer Shares (subject to clawback) so allocated) will be agreed with and confirmed to it orally by one of the Joint Bookrunners and a contract note will be dispatched as soon as possible thereafter. The oral confirmation to the Placee by a Joint Bookrunner constitutes an irrevocable, legally binding contractual commitment to that Joint Bookrunner (as agent of the Company) to subscribe for the number of Placed Shares allocated to it on the terms set out in this announcement. Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to that Joint Bookrunner, to pay to that Joint Bookrunner (or as that Joint Bookrunner may direct) as agent of the Company in cleared funds an amount equal to the product of the Issue Price and the sum of the number of Firm Placed Shares and, once apportioned after clawback (in accordance with the procedure described in the paragraph entitled 'Placing Procedure' below), the Open Offer Shares, which such Placee has agreed to acquire.

f) The Company will, in consultation with the Joint Bookrunners, in its absolute discretion determine the allocation to Placees of the Firm Placed Shares and the Open Offer Shares. The Joint Bookrunners reserve the right not to accept bids or to accept bids, either in whole or in part, on the basis of allocations determined at the Company's discretion and may scale down any bids as the Company may determine, in consultation with the Joint Bookrunners. The acceptance of bids shall be at the Joint Bookrunners' absolute discretion, subject to agreement with the Company.

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

h) No commissions are payable to Placees in respect of the Firm Placing. A commission of one per cent. of the aggregate value at the Issue Price of the Open Offer Shares committed to by Conditional Placees is payable to the Conditional Placees by the relevant Joint Bookrunner in respect of the Placing. This commission is expected to be paid within five Business Days of Admission (provided Conditional Placees have provided details of the account payee).

i) By participating in the Equity Placings, each Placee agrees that its rights and obligations in respect of the Firm Placing and/or the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee. All obligations under the Equity Placings will be subject to the fulfilment of the conditions referred to in the section below.

Conditions of the Equity Placings and Termination of the Sponsor and Placing Agreement

The Banks have the right to terminate their obligations under the Sponsor and Placing Agreement (after such consultation with the Company as the circumstances may allow) at any time prior to Admission in certain circumstances including, inter alia, (i) if any of the warranties contained in the Sponsor and Placing Agreement was untrue, inaccurate or misleading and/or would be untrue, inaccurate or misleading if it were to be repeated at any time prior to Admission so as to have a material adverse effect, in the reasonable opinion of the Banks, on the Equity Placings or if any statement in the Issue Documents is incorrect or has become untrue, incorrect or misleading; or (ii) a material adverse change in the financial position or prospects of the Group or the Enlarged Group (taken as a whole); or (iii) the occurrence of certain specified events of force majeure (as specified in the Sponsor and Placing Agreement). If the Sponsor and Placing Agreement is terminated prior to Admission, the Equity Placings will lapse and the rights and obligations of the Placees hereunder shall cease and determine at such time and no claim can be made by any Placee in respect thereof. In such event, all monies (if any) paid by the Placees to the Joint Bookrunners at such time shall be returned to the Placees at their sole risk without any obligation on the part of the Company or the Joint Bookrunners or any of their respective affiliates to account to the Placees for any interest earned on such funds. The Placees acknowledge and agree that the Company and the Banks may, at their sole discretion, exercise their contractual rights to waive some of the conditions in the Sponsor and Placing Agreement or to extend the time and/or date for fulfilment of any of the conditions in the Sponsor and Placing Agreement. Any such extension or waiver will not affect Placees' commitments.

Placees will only be called on to acquire Placed Shares if the obligations of the Banks under the Sponsor and Placing Agreement have become unconditional in all respects and the Banks have not terminated the Sponsor and Placing Agreement prior to Admission.

The Banks' obligations under the Sponsor and Placing Agreement in respect of the Firm Placing and the Placing and Open Offer are conditional upon, inter alia:

a) Admission occurring not later than 8.a.m. on 15 December 2016 (or such later time and/or date as the Company and the Banks may agree, being not later than 8 a.m. on 29 December 2016);

b) the passing without amendment of the Resolutions at the General Meeting (and not, except with the prior written agreement of the Banks, at any adjournment of such meeting) on 29 December 2016 (or such later date as the Banks may agree) and the Resolutions remaining in force;

c) the Company having complied with its obligations under the Sponsor and Placing Agreement and under the terms and conditions of the Placing and Open Offer which fall to be performed on or prior to Admission;

d) the Sponsor and Placing Agreement becoming unconditional in all respects, save for Admission, and not having been terminated in accordance with its terms;

e) the Signing Protocol being entered into and not having been terminated in accordance with its terms and no circumstances having arisen such that, in the opinion of the Banks, the Acquisition Agreement would be incapable of completing in accordance with its term; and

f) the New Debt Facilities Agreement being entered into, becoming unconditional in all respects (other than in relation to conditions relating solely to Admission or completion of the Acquisition Agreement) and not having been terminated in accordance with its terms,

(all conditions included in the Sponsor and Placing Agreement being together the "Conditions"). It is to be noted that the Equity Placings are not conditional on completion of the Acquisition.

If any Condition has not been satisfied, has not been waived by the Banks or has become incapable of being satisfied (and is not waived by the Banks as described below) or if the Sponsor and Placing Agreement is terminated, all obligations under these terms and conditions will automatically terminate. By participating in the Equity Placings, each Placee agrees that its rights and obligations hereunder are conditional upon the Sponsor and Placing Agreement becoming unconditional in all respects and that its rights and obligations will terminate only in the circumstances described above and will not be capable of rescission or termination by it.

The Banks may in their absolute discretion in writing waive fulfilment of certain of the Conditions or extend the time provided for fulfilment of such Conditions. Any such extension or waiver will not affect Placees' commitments as set out in these terms and conditions. None of the Banks, nor the Company, shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision made by the Banks as to whether or not to waive or to extend the time and/or date for the fulfilment of any Condition.

By participating in the Equity Placings each Placee agrees that the exercise by the Company or any of the Banks of any right or other discretion under the Sponsor and Placing Agreement shall be within the absolute discretion of the Company and each of the Banks (as the case may be) and that neither the Company nor any of the Banks need make any reference to such Placee and that neither the Company nor any of the Banks shall have any liability to such Placee (or to any other person whether acting on behalf of a Placee or otherwise) whatsoever in connection with any such exercise.

Withdrawal Rights

Placees acknowledge that their acceptance of any of the Placed Shares is not by way of acceptance of the public offer made in the Prospectus and (if applicable) the Application Form but is by way of a collateral contract and as such section 87Q of the FSMA does not entitle Placees to withdraw in the event that the Company publishes a supplementary prospectus in connection with the Open Offer or Admission. If, however, a Placee is entitled to withdraw, by accepting the offer of Placed Shares, the Placee agrees to confirm its acceptance of the offer on the same terms immediately after such right of withdrawal arises.

Placing Procedure

Any allocation of the Offer Shares (subject to clawback) to be issued pursuant to the Equity Placings will be notified to the Conditional Placees on or around 24 November 2016 (or such other time and/or date as the Company and the Banks may agree).

Conditional Placees will be called upon to subscribe for, and shall subscribe for, the Open Offer Shares only to the extent that valid applications by Qualifying Shareholders under the Open Offer (including, at the Company's discretion, under the Excess Application Facility) are not received by 11 a.m. on 12 December 2016 (or by such later time and/or date as the Company may agree with the Banks) or if applications have otherwise not been deemed to be valid in accordance with the Prospectus and (if applicable) the Application Form.

Registration and Settlement

Settlement of transactions in the Placed Shares following Admission will take place within the CREST system, subject to certain exceptions. The Joint Bookrunners and the Company reserve the right to require settlement for, and delivery of, the Placed Shares to Placees by such other means that they deem necessary if delivery or settlement is not possible within the CREST system within the timetable set out in the Placing Proof and/or the Prospectus or would not be consistent with the regulatory requirements in the Placee's jurisdiction. Each Placee will be deemed to agree that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST or certificated settlement instructions which they have in place with the relevant Joint Bookrunner.

It is expected that settlement of the Firm Placing and the Placing will occur on 15 December 2016, on which date each Placee must settle the full amount owed by it in respect of the Placed Shares allocated to it. The Joint Bookrunners may (after consultation with the Company) specify a later settlement date (or dates) at their absolute discretion. The Joint Bookrunners will notify Placees if any of the dates in these terms and conditions should change, including as a result of delay in the posting of the Prospectus, the Application Forms or the crediting of the Open Offer Entitlements or the Excess Open Offer Entitlements in CREST or the production of a supplementary prospectus or otherwise. Payment must be made in cleared funds. The payment instructions for settlement in CREST and settlement outside of CREST will be set out in the contract note issued to the Placee by the relevant Joint Bookrunner. Interest is chargeable daily on payments not received from Placees on the due date at the rate per annum of 2 percentage points above the Barclays Bank plc base rate. Time shall be of the essence as regards the obligations of Placees to settle payment for the Placed Shares and to comply with their other obligations under this Announcement.

Acceptance

By participating in the Equity Placings, a Placee (and any person acting on such Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents, warrants and agrees (as the case may be) with the Joint Bookrunners and the Company, the following:

(i) in consideration of its allocation of Placed Shares, to subscribe at the Issue Price for (a) the Firm Placed Shares comprised in its allocation and (b) any Open Offer Shares comprised in its allocation for which it is required to subscribe (subject to clawback in respect of valid applications from Qualifying Shareholders in the Open Offer) pursuant to these terms and conditions, and it has obtained all necessary consents and authorities to enable it to give its commitment to so subscribe and purchase, and that it will sign, execute and deliver any documents and do all acts, matters and things as may be necessary for or incidental to such subscription and purchase;

(ii) it has read and understood this announcement (including these terms and conditions) and the Placing Proof in their entirety and that it has neither received nor relied on any information given or any investigations, representations, warranties or statements made at any time by any person in connection with Admission, the Equity Placings, the Company, the Placed Shares, or otherwise, other than the information contained in this announcement (including these terms and conditions) and the Placing Proof that in accepting the offer of Placed Shares it will be relying solely on the information contained in this announcement (including these terms and conditions) and the Placing Proof, receipt of which is hereby acknowledged, and undertakes not to redistribute or duplicate such documents;

(iii) it has received the Placing Proof and all such information as it deems necessary to make an investment decision in relation to the Placed Shares and it has made its own assessment of the Placed Shares and have relied on its own investigation of the business, financial or other position of the Company in agreeing to participate in the Equity Placing;

(iv) its oral commitment will be made solely on the basis of the information set out in this announcement, the Placing Proof and the information publicly announced to a Regulatory Information Service by or on behalf of the Company on or before the date of this announcement, such information being all that such Placee deems necessary or appropriate and sufficient to make an investment decision in respect of the Placed Shares and that it has neither received nor relied on any other information given, or representations or warranties or statements made, by the Joint Bookrunners or the Company nor any of their respective affiliates nor any other person and none of such persons will be liable for any Placee's decision to participate in the Firm Placing and/or the Placing based on any other information, representation, warranty or statement;

(v) its agreement to subscribe for Placed Shares is not by way of acceptance of a public offer made or to be made in the Prospectus but is by way of a collateral contract and, accordingly, section 87Q of the FSMA does not entitle it to withdraw its acceptance in the event that the Company publishes a supplementary prospectus in connection with the Equity Raising and/or Admission. Without prejudice to such acknowledgement, if it is so entitled to withdraw, it irrevocably agrees (if applicable) not to exercise any such rights and to confirm its acceptance of the offer to participate in the Equity Placings on the same terms immediately after any such right to withdraw arises;

(vi) it understands and accepts that by offering such Placed Shares, neither Joint Bookrunner is making any recommendations to or advising such Placee regarding the suitability or merits of any transaction that such Placee may enter into in connection with the Equity Placings or otherwise and that such Placee is not, and does not regard itself as, a client of any of the Banks or Keefe, Bruyette & Woods in connection with the Equity Placings, and that the Banks and Keefe, Bruyette & Woods are acting solely for the Company in relation to the Equity Placings, the Acquisition and Admission as set out in the Placing Proof and will not be responsible to such Placee for providing the protections afforded to their clients or for advising such Placee on the transactions and arrangements proposed in this announcement and/or the Placing Proof, nor do the contents or receipt of this announcement constitute the giving of investment advice by either Joint Bookrunner or Keefe, Bruyette & Woods to such Placee;

(vii) the content of the this announcement, these terms and conditions and the Placing Proof are exclusively the responsibility of the Company and neither Joint Bookrunner nor Keefe, Bruyette & Woods nor any of their respective affiliates nor any person acting on its or their behalf will be responsible for or shall have liability for any information, representation or statement contained therein and neither Joint Bookrunner nor Keefe, Bruyette & Woods nor any of their respective affiliates nor any person acting on its or their behalf will be responsible or liable for a Placee's decision to accept its Placed Shares;

(viii) neither Panmure Gordon Group nor Shore Capital Group (each as defined below) nor any of their respective officers, directors and employees shall, save in the event of fraud on their part (and to the extent permitted by the rules of the FCA) be liable to Placees for any matter arising out of the role of either Joint Bookrunner as agent, broker or otherwise in connection with the Equity Placings and that where any such liability nevertheless arises as a matter of law the Placee will immediately waive any claim against the Panmure Gordon Group and the Shore Capital Group and any of their respective officers, directors and employees which it may have in respect thereof. In these terms and conditions, the expression "Panmure Gordon Group" means Panmure Gordon and its ultimate holding company(ies) and all direct and indirect subsidiary undertakings of such holding company(ies) and Shore Capital Group means Shore Capital Stockbrokers and its ultimate holding company(ies) and all direct and indirect subsidiary undertakings of such holding company(ies);

(ix) if the offer of Placed Shares is made to it in the United Kingdom it is a Qualified Investor who (i) who has professional experience in matters relating to investments falling within Article 19(5) of the Order (namely authorised firms under the FSMA; persons who are exempt in relation to promotions of shares in companies; persons whose ordinary activities involve them investing in companies; governments; local authorities or international organisations; or a director, officer or employee acting for such entities in relation to investment) and/or (ii) is a high value entity falling within article 49(2)(a) to (d) of the Order (namely, bodies corporate with share capital or net assets of not less than £5 million (except where the body corporate has more than 20 members in which case the share capital or net assets should not be less than £500,000)); unincorporated associations or partnerships with net assets of not less than £5 million; trustees of high value trusts; or a director, officer or employee acting for such entities in relation to the investment;

(x) it is a person whose ordinary activities involve it (as principal or agent) acquiring, holding, managing or disposing of investments for the purpose of its business and it undertake that it will (as principal or agent) acquire, hold, manage or dispose of any Placed Shares that are allocated to it for the purposes of its business;

(xi) if it is in a member state of the European Economic Area (other than the United Kingdom), it is a Qualified Investor;

(xii) it has complied with its obligations under the Criminal Justice Act 1993, the EU Market Abuse Regulation (2014/596/EU) ("MAR"), the Bribery Act 2010 and in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002 (as amended) and the Terrorism Act 2006 (as amended) and with the Money Laundering Regulations 2007 and the Money Laundering Sourcebook of the Financial Conduct Authority and any other applicable legislation concerning prevention of money laundering (together, the "Regulations") and, it will on request from either Joint Bookrunner provide any such information and provide such assistance to the relevant Joint Bookrunner in order to verify its identity which the relevant Joint Bookrunner or the Company may require in compliance with the Regulations. If it is making payment on behalf of a third party, it has obtained and recorded satisfactory evidence to verify the identity of the third party as required by the Regulations. Each Placee's attention is further drawn to the section entitled "Money Laundering" contained in Part III of the Placing Proof;

(xiii) its participation in the Firm Placing and/or Placing and Open Offer will not require it to make a mandatory offer under Rule 9 of the City Code on Takeovers and Mergers;

(xiv) it is not subscribing for Placed Shares pursuant to an agreement or understanding (whether formal or informal) with another person or persons or to obtain or consolidate control of the Company;

(xv) it is not a related party of the Company for the purposes of the Listing Rules of the UK Listing Authority as at the date hereof;

(xvi) to the fullest extent permitted by law, it acknowledges and agrees to the disclaimers contained in the Prospectus and it acknowledges and agrees to comply with, and to only make offers and sales of the Placed Shares in compliance with, the selling restrictions set out in Part III of the Placing Proof;

(xvii) it is not a person who has a registered address in, or is a resident, citizen or national of, a country or countries, in which it is unlawful to make or accept an offer to subscribe for Placed Shares;

(xviii) if it is a person (including, without limitation, nominees and trustees of such a person) with a registered address outside the United Kingdom or a citizen or resident of a country other than the United Kingdom, it has fully observed and will fully observe the applicable laws of any relevant territory, including obtaining any requisite governmental or other consents and it has fully observed and will fully observe any other requisite formalities and pay any issue, transfer or other taxes due in such territories;

(xix) the Placed Shares are being offered in a transaction not involving any public offering in the United States within the meaning of the Securities Act, and that the Placed Shares have not been and will not be registered under the Securities Act, the US Investment Company Act of 1940, as amended or the securities laws of any state or other jurisdiction of the United States. It further acknowledges that, subject to certain exceptions, the Placed Shares may not be offered, sold, pledged, resold, transferred, delivered or distributed within the United States;

(xx) it is not a US Person (as defined in Regulation S) and it is located outside the United States and eligible to participate in an "offshore transaction" as and pursuant to Regulation S; and it acknowledges that the Placed Shares were not offered to it by means of any "directed selling efforts" within the meaning of Regulation S;

(xxi) neither it nor its affiliates nor any person acting of its or their behalf has engaged, nor will engage, in any "direct selling efforts" with respect to any Placed Shares, and that it will not make any offer to the public of the Placed Shares prior to Admission;

(xxii) it is not acting on a non-discretionary basis for the account or benefit of a US Person (as defined in Regulation S) or any person located within the United States at the time the undertaking to subscribe for Placed Shares

(xxiii) it understands that the Placed Shares have not been registered under the applicable laws of Australia, Canada, Japan, New Zealand or any other Excluded Territory. It is not a resident of any Excluded Territory or a corporation, partnership or other entity organised under the laws of any Excluded Territory. It has not offered, sold or delivered, and will not offer, sell or deliver, in whole or in part, directly or indirectly any of the Placed Shares in any Excluded Territory or to or for the benefit of any person resident in any Excluded Territory;

(xxiv) it has not and will not distribute or publish this announcement, the Placing Proof or any other advertisement or other offering material in relation to the Placed Shares directly or indirectly in, into or within any of the Excluded Territories or the United States (except as permitted in the Placing Proof);

(xxv) it has observed the laws of all relevant jurisdictions, obtained any requisite governmental exchange controls or other consents, complied with all relevant formalities and has paid or will pay any issue, transfer or other taxes due in connection with its allocation of Placed Shares in any territory and that it has not taken any action which will or may result in the Joint Bookrunners or the Company being in breach of the legal or regulatory requirements of any jurisdiction;

(xxvi) if it elects to receive its Placed Shares in uncertificated form, the CREST member account will be agreed with and confirmed to it orally by one of the Joint Bookrunners and a contract note will be dispatched as soon as possible thereafter including that information;

(xxvii) the right is reserved in the Banks' absolute discretion to agree to extend the time for the satisfaction of all or any of the Conditions and otherwise adjust the timetable for implementation of the Equity Placings. All times and dates referred to in this announcement are therefore subject to adjustment in accordance with this reservation;

(xxviii) it has only communicated or caused to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) relating to the Placed Shares in circumstances in which section 21(1) of the FSMA does not require approval of the communication by an authorised person;

(xxix) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Placed Shares, in, from or otherwise involving the United Kingdom;

(xxx) in the event that it has received any confidential inside information about the Company in advance of the Equity Placings, it confirms to the Joint Bookrunners that it has not (i) dealt in the securities of the Company; (ii) encouraged or required another person to deal in the securities of the Company; or (iii) disclosed such information to any person, prior to the information being made generally available;

(xxxi) it is not liable, and it is not applying as nominee(s) or agent(s) for a person or persons who is/are or may be liable, to pay stamp duty reserve tax under sections 93 or 96 of the Finance Act 1986 or stamp duty under sections 67 or 70 of the Finance Act 1986, in each case at the increased rates referred to in those sections. For the avoidance of doubt, if this confirmation is incorrect, the placee acknowledges that stamp duty or stamp duty reserve tax may be payable for which neither the Joint Bookrunners nor the Company will be responsible and if, as a result, any of those persons is obliged by law to pay any such stamp duty or stamp duty reserve tax (or any penalties or interest in relation thereto), they shall be entitled to receive it, on an after tax basis, from it for which purposes it hereby indemnifies on demand the Joint Bookrunners and the Company in respect of any such liability;

(xxxii) it agrees that it has no right against any person under the Sponsor and Placing Agreement pursuant to The Contracts (Rights of Third Parties) Act 1999;

(xxxiii) in accepting its allocation of Placed Shares, it irrevocably appoints any director or employee of either Joint Bookrunner as its agent for the purpose of executing and delivering to the Company and/or the Company's registrar any document on its behalf necessary to enable it to be registered as the holder of Placed Shares for which it has subscribed or to complete the sale of such Placed Shares on its behalf in the circumstances referred to earlier;

(xxxiv) that neither Joint Bookrunner owes it fiduciary duties in respect of any claim it may have relating to the Equity Placings; and

(xxxv) to indemnify and hold harmless the Company, each Joint Bookrunner and their respective affiliates from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in these terms and conditions and further agree that the provisions of these terms and conditions shall survive after completion of the Equity Placings.

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

Set-off and Miscellaneous

If a Placee is entitled to participate in the Open Offer by virtue of being a Qualifying Shareholder it will be able to apply to subscribe for Open Offer Shares under the terms and conditions of the Open Offer (including the Excess Application Facility). Any participation by a Placee as a Qualifying Shareholder in the Open Offer (including the Excess Application Facility) will not reduce such Placee's commitment in respect of the Firm Placing or the Placing.

The Company reserves the right to treat as invalid any application or purported application for Placed Shares that appears to the Company or its agents to have been executed, effected or dispatched from the United States or an Excluded Territory or in a manner that may involve a breach of the laws or regulations of any jurisdiction or if the Company or its agents believe that the same may violate applicable legal or regulatory requirements or if it provides an address for delivery of the share certificates of Placed Shares in an Excluded Territory or the United States, or any other jurisdiction outside the United Kingdom in which it would be unlawful to deliver such share certificates.

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

Times

Unless the context otherwise requires, all references to time are to London time. All times and dates in these terms and conditions may be subject to amendment. The Joint Bookrunners will notify Placees and any persons acting on behalf of the Placees of any changes.

Appendix II: Definitions