CVH.L Regulatory News (CVH)

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

4 May 2011

RECOMMENDED CASH OFFER

for

CAVANAGH GROUP PLC

OFFER UPDATE - LEVEL OF ACCEPTANCES AND EXTENSION OF OFFER

Introduction

On 4 April 2011, it was announced that the Boards of Close Brothers Group plc ("Close Brothers") and Cavanagh Group plc ("Cavanagh") had agreed the terms of a recommended cash offer to be made by Close Asset Management Holdings Limited ("CAMHL"), a subsidiary of Close Brothers, for the entire issued and to be issued share capital of Cavanagh (the "Offer").

Level of acceptances

As at 1.00 p.m. on 3 May 2011, CAMHL had received valid acceptances of the Offer in respect of a total of 7,356,331 Cavanagh Shares, representing approximately 63.4 per cent. of Cavanagh's current issued share capital and approximately 87.8 per cent. of the Cavanagh Shares to which the Offer relates (which excludes Cavanagh Shares subject to the Management Arrangements).

This includes acceptances received in respect of 5,485,889 Cavanagh Shares (representing approximately 47.3 per cent. of Cavanagh's current issued share capital and approximately 65.4 per cent. of the Cavanagh Shares to which the Offer relates) which were subject to an irrevocable commitment procured by CAMHL. In addition, CAMHL has received acceptances in respect of a further 71,849 Shares which were subject to an irrevocable commitment procured by CAMHL but which are not Cavanagh Shares to which the Offer relates.

CAMHL has received irrevocable undertakings to accept the Offer in respect of a further 239,750 Cavanagh Shares (representing approximately 2.1 per cent. of Cavanagh's current issued share capital and approximately 2.9 per cent. of the Cavanagh Shares to which the Offer relates) which have not yet been assented to the Offer.

Extension of the Offer

Close Brothers announces that the Offer has been extended and will remain open for acceptance until 1.00 p.m. on 17 May 2011.

Cavanagh Shareholders who have not yet accepted the Offer, and participants in the Cavanagh Share Incentive Schemes who have not yet accepted the proposals made to them, are encouraged to do so without delay and in any event by 1.00 p.m. on 17 May 2011. Acceptances of the Offer should be received in accordance with the instructions contained in the Offer Document and (in the case of shares held in certificated form) the Form of Acceptance.

As announced by Cavanagh yesterday, the condition of the Offer relating to the passing of the Resolution has now been satisfied. The Offer remains subject to various other conditions set out in Appendix I of the Offer Document, including FSA approval of the acquisition of Cavanagh.

The Offer Document and Form of Acceptance (in the case of Cavanagh Shareholders holding Cavanagh Shares in certificated form) have been sent to Cavanagh Shareholders in hard copy and are available on the Close Brothers website (www.closebrothers.co.uk), subject to restrictions relating to persons in certain overseas jurisdictions.

Compulsory acquisition, delisting and cancellation of trading in Cavanagh Shares

If CAMHL receives acceptances under the Offer in respect of, and/or otherwise acquires, both 90 per cent. or more in value of the Cavanagh Shares to which the Offer relates and 90 per cent. or more of the voting rights carried by those shares and assuming that all of the other conditions of the Offer have been satisfied or waived (if capable of being waived), CAMHL intends to exercise its rights in accordance with sections 974 to 991 of the 2006 Act to acquire compulsorily the remaining Cavanagh Shares on the same terms as the Offer. The Cavanagh Shares which are subject to the Management Arrangements are not shares to which the Offer relates.

As stated in the Offer Document, following the Offer becoming or being declared unconditional in all respects and subject to any applicable requirements of the AIM Rules, CAMHL intends to procure the making of an application by Cavanagh to the London Stock Exchange for the cancellation of the admission to trading of its Shares on AIM. It is anticipated that such cancellation will take effect no earlier than 20 Business Days after the Offer becomes or is declared unconditional in all respects (provided that CAMHL has acquired, or agreed to acquire, issued share capital carrying 75 per cent. of the voting rights of Cavanagh). Delisting and the cancellation of trading of Cavanagh Shares will significantly reduce the liquidity and marketability of any Cavanagh Shares not acquired by CAMHL.

CAMHL and concert party interests in Cavanagh Shares

Neither CAMHL nor any person acting, or deemed to be acting, in concert with CAMHL currently holds or has agreed to acquire any Cavanagh Shares (or rights over Cavanagh Shares), other than pursuant to the Share Exchange Agreement, details of which are set out in the Offer Document.

Terms used but not defined in this announcement shall have the meaning given to them in the Offer Document.

Enquiries

CAMHL and Close Brothers

Gleacher Shacklock (financial adviser to CAMHL and Close Brothers)

Cavanagh

Brewin Dolphin (nominated adviser and financial adviser to Cavanagh)

Gleacher Shacklock LLP, which is authorised and regulated in the United Kingdom by the Financial Services Authority for investment business activities, is acting exclusively as financial adviser to CAMHL and Close Brothers and no one else in connection with the Offer and will not be responsible to anyone other than CAMHL and Close Brothers for providing the protections afforded to clients of Gleacher Shacklock LLP or for providing advice in relation to the Offer or any other matters referred to in this announcement.

Brewin Dolphin Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority for investment business activities, is acting exclusively as nominated adviser and financial adviser to Cavanagh and no one else in connection with the Offer and will not be responsible to anyone other than Cavanagh for providing the protections afforded to clients of Brewin Dolphin Limited or for providing advice in relation to the Offer or any other matters referred to in this announcement.

Overseas jurisdictions

The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction. In particular, this announcement is not for publication or distribution, directly or indirectly, to US persons or into the United States (including its territories and possessions, any state of the United States and the District of Colombia), Canada, Australia or Japan. This announcement has been prepared in accordance with English Law and the Code and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England. 

This announcement is not intended to, and does not, constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Offer or otherwise. The Offer will be made solely through the Offer Document, which will contain the full terms and conditions of the Offer, including details of how to accept the Offer and vote at the General Meeting. Any voting decision, acceptance or other response to the Offer should be made only on the basis of information in the Offer Document.

The Offer is not and will not be made, directly or indirectly, in or into, or by use of the mails, or by any means or instrumentality (including, without limitation, by means of telephone, facsimile, telex, internet or other forms of electronic communication) of interstate or foreign commerce of, or any facilities of a securities exchange of, the United States, Canada, Australia or Japan, and the Offer will not be capable of acceptance by any such use, means, instrumentality or facility or from within the United States, Canada, Australia or Japan. Accordingly, unless otherwise determined by CAMHL, copies of this announcement and any other document relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise distributed or sent in or into the United States, Canada, Australia or Japan and persons receiving such documents (including custodians, nominees and trustees) must not distribute or send them in, into or from such jurisdictions as doing so may make invalid any purported acceptance of the Offer by persons in any such jurisdiction.

Dealing disclosure requirements

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

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

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

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

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