Entertainment One Regulatory News (ETO)

NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT DOES NOT CONSTITUTE A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT AND NEITHER THIS ANNOUNCEMENT NOR ANYTHING HEREIN FORMS THE BASIS FOR ANY CONTRACT OR COMMITMENT WHATSOEVER. INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY SECURITIES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT ON THE BASIS OF INFORMATION TO BE CONTAINED IN (OR INCORPORATED BY REFERENCE INTO) THE PROSPECTUS EXPECTED TO BE PUBLISHED BY THE COMPANY IN CONNECTION WITH THE PLACING.

THE DEFINED TERMS SET OUT IN APPENDIX 2 APPLY IN THIS ANNOUNCEMENT.

7 September 2012 

For immediate release

ENTERTAINMENT ONE LTD. ("Entertainment One" or the "Company")PROPOSED ACQUISITION OF ALLIANCE FILMS HOLDINGS, INC. ("Alliance"), PLACING AND NOTICE OF SPECIAL MEETING

Today the Board of Entertainment One announces that it has entered into an agreement to acquire Alliance, a leading independent distributor of filmed entertainment products in Canada, the United Kingdom and Spain, from affiliates of the Goldman Sachs Group Inc. and Investissement Québec for approximately CAD$225 million, comprising CAD$174.2 million payable in cash to the Sellers on Completion and the balance representing the pay down of net debt as at Completion1.

Highlights:

·; The combination of Entertainment One and Alliance will establish the Company as the largest independent film distributor in each of the Canadian and UK markets. The Directors believe that the Acquisition will strengthen Entertainment One's existing film distribution business and help drive growth.

·; Alliance and Entertainment One operate in geographies that are highly complementary and the Enlarged Group will have an international reach across Canada, the United Kingdom, Benelux, Australia, the United States and Spain.

·; Alliance's film library includes some of the most commercially successful independently produced titles of the last twenty years, including Pulp Fiction, Good Will Hunting, Lord of the Rings, The King's Speech and The Hunger Games. The Enlarged Group will benefit from a combined library of more than 35,000 film and television titles.

·; The Enlarged Group will have increased access to the most successful independent film studios through output agreements in Canada including with The Weinstein Company, Focus Features and Relativity.

·; The Acquisition will enhance long-term growth potential through a combined investment in content of over approximately CAD$225 million per year.

·; The Directors believe that the Acquisition will deliver estimated annualised pre-tax cost synergies of at least CAD$20 million (by the third anniversary of Completion), driving substantial enhancement of Entertainment One's earnings per share2.

The Company intends to fund the Acquisition and associated expenses through a combination of the proceeds received from the Placing of approximately £110 million (approximately CAD$175.7 million) and CAD$150 million of

____________

funds available under the Revised Facility, which are expected to raise, in aggregate, approximately CAD$304.2 million (net of expenses).

The Placing is expected to raise net proceeds of approximately £96.5 million (net of all expenses relating to the transaction) (approximately CAD$154.2 million) through the issue of 73,333,333 Placing Shares at a Placing Price of 150.0 pence per Placing Share. The Placing Price represents a discount of 3.54 per cent. to the Closing Price of 155.5 pence per Common Share on 6 September 2012. The Placing is not conditional upon Completion of the Acquisition. Therefore, subject to the conditions of the Placing being satisfied and the Placing Agreement not being terminated, Admission will become effective and the Net Proceeds of the Placing will be collected, before Completion.

In addition to the consideration payable at Completion, a contingent payment of up to CAD$35 million may become payable to the Sellers after Completion based on film titles currently controlled by the Alliance Group exceeding certain box office performance targets. An additional amount of CAD$12 million may also become payable to the Sellers after completion in the event that certain tax provisions are settled for less than the amount provided in Alliance's accounts.

Completion of the Acquisition is conditional, amongst other things, on approval being received from the Canadian Competition Bureau.

It is expected that a Prospectus will be published later today in connection with Admission. Once published, the Prospectus will be made available on the Company's website and submitted to the National Storage Mechanism and be available for inspection at http://www.hemscott.com/nsm.do.

A Special Meeting of the Company will be held in connection with the Placing, and a Shareholder Circular incorporating the notice of Special Meeting (together with the Form of Proxy and Form of Direction) will be posted to Shareholders today.

J.P. Morgan Limited and Credit Suisse are acting as Joint Financial Advisers to Entertainment One with respect to the Acquisition and J.P. Morgan Cazenove and Cenkos Securities are acting as Joint Bookrunner on the Placing.

Commenting on the Acquisition, Entertainment One's Group Chief Executive Officer, Darren Throop said:

"The combination of Entertainment One and Alliance creates a market leading film distribution business which alongside our Television and Family divisions will deliver a strong strategic platform for long term growth. As a result of the acquisition, Entertainment One will be a more competitive business in each of the geographic markets that we serve, allowing us to act as a more valuable partner for content producers and expanding the quality and depth of the content that we offer to our customers. I am extremely excited by the opportunities available to us to grow the Enlarged Group and we look forward to representing the very best in independent film across all of our markets. This acquisition means that Entertainment One is better positioned than ever to generate significant value for shareholders."

This preceding summary should be read in conjunction with the full text of the following announcement and its appendices, including the announcement published by Entertainment One simultaneously with this announcement which includes, amongst other matters, financial information on Alliance.

A call for analysts and institutional investors will be held today at 9.00am. The conference call details are as follows:

Toll Number +44 (0) 203 140 0668

Participant PIN Code 793022#

Enquiries:

Entertainment One +44 (0) 207 566 6720

Giles Willits

J.P. Morgan Cazenove (Joint Financial Adviser, Joint Bookrunner and Underwriter) +44 (0) 207 742 4000

Harry Hampson

Nicholas Hall

Virginia Khoo

Credit Suisse (Joint Financial Adviser) +44 (0) 207 888 8888

Alastair Blackman

Joe Hannon

Cenkos Securities (Corporate Broker and Joint Bookrunner) +44 (0) 207 397 8926

Stephen Keys

Adrian Hargrave

Alex Aylen

Andy Roberts

Singer Capital Markets (Corporate Broker) +44 (0) 203 205 7500

James Maxwell

Nick Donovan

Redleaf Polhill +44 (0) 207 566 6720

Emma KaneRebecca Sanders-Hewett

Media (North America)

Jackie Rubin +1 416 979 7256

IMPORTANT NOTICE

This announcement 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 South Africa or any other jurisdiction in which it would be unlawful to do so. This announcement does not constitute an offer to sell or issue, or the solicitation of an offer to buy or acquire, any securities, nor shall there be any sale of securities in the United States, Australia, Canada, Japan, New Zealand or South Africa or any other jurisdiction in which such an offer or solicitation would be unlawful. No money, securities or other consideration is being solicited and, if sent in response to the information herein, will not be accepted.

This announcement has been issued by, and is the sole responsibility of, the Company. No representation or warranty, express or implied, is or will be made by, or in relation to, and no responsibility or liability is or will be accepted by the Banks or by any of their respective affiliates or agents or by any adviser to the Company or by any of their affiliates or agents as to or in relation to the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any responsibility or liability therefore is expressly disclaimed.

J.P. Morgan Cazenove, Credit Suisse and Cenkos (the "Banks") are authorised and regulated in the United Kingdom by the FSA and are acting exclusively for the Company in connection with the matters set out in this announcement. The Banks are not, and will not be, responsible to anyone other than the Company for providing the protections afforded to their clients or for providing advice in relation to the proposed Acquisition and Placing or any other matters referred to in this announcement. Apart from the responsibilities and liabilities, if any, which may be imposed on them by the FSMA, neither the Banks nor any of their respective affiliates, parent undertakings, subsidiary undertakings or subsidiaries of its parent undertakings or any of their respective directors, officers, employees or advisers or any other person accepts any responsibility whatsoever and makes no representation or warranty, express or implied, for or in respect of the contents of this announcement, or for any other statement made or purported to be made by them, or on their behalf, in connection with the Company, the proposed Acquisition or the Placing, and nothing in this announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or the future. The Banks accordingly disclaim to the fullest extent permitted by law all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this announcement or any such statement.

This announcement has been prepared in accordance with English law, the Listing Rules and the Disclosure Rules and Transparency Rules and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England.

The distribution of this announcement, and the availability of the Placing, in jurisdictions other than the United Kingdom may be affected by the laws of relevant jurisdictions. Therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom will need to inform themselves about, and observe any applicable requirements.

This announcement is for information purposes only and shall not constitute an offer or invitation to buy, or otherwise acquire, sell, otherwise dispose of or issue or subscribe for, or the solicitation of an offer to buy, sell, dispose of, acquire, issue, or subscribe for, any securities in the Company or any other entity. Any such offer will be made solely by means of the Prospectus once published in due course and any supplement or amendment thereto and any acquisition of securities in the Company should be made solely on the basis of the information contained in such Prospectus.

The securities of the Company (the "Securities") have not been and will not be registered under the Securities Act, or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, 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 in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offer of the Securities in the United States.

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

This announcement and some of the materials distributed in connection with this announcement, contains (or may contain) certain forward-looking statements with respect to certain of the Company's current expectations and projections about future events. These statements, which can be identified by the use of words such as "anticipate", "believe", "intend", "estimate", "expect", "will", "shall", "may", "plan", "project", "aim", "predict", "should", "continue" or, in each case, their negative, and words of similar meaning and/or other similar expressions, are predictions of or indicate future events and/or future trends, discussions of future strategy, plans, objectives, goals, and reflect the directors' beliefs and expectations at the date of this announcement and involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement.

Forward-looking statements are not guarantees of future performance. Statements contained in this announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The information contained in this announcement is subject to change without notice and, except to the extent required by the FSA, the London Stock Exchange or by applicable law, the Prospectus Rules, the Listing Rules and the Disclosure and Transparency Rules, neither the Company nor the Banks assume any responsibility or obligation to update publicly, release the result of any revisions to any forward-looking statements in this announcement that may occur due to any change in the Company's expectations or to reflect events or circumstances after the date of this announcement, or review any of the forward-looking statements contained herein. You should not place undue reliance on forward-looking statements, which speak only as of the date of this announcement. A number of factors could cause results and developments of the Company's Group to differ materially from those expressed or implied by the forward-looking statements including, without limitation, general economic and business conditions, industry trends, competition, changes in regulation, currency fluctuations, changes in its business strategy, political and economic uncertainty and other factors to be set forth in the Prospectus.

No statement in this announcement is or is intended to be a profit forecast or to imply that the earnings of the Company for the current or future financial years will necessarily match or exceed the historical or published earnings of the Company.

You are advised to read this announcement and, once available, the Prospectus and the information incorporated by reference therein in their entirety for a further discussion of the factors that could affect the Company's future performance and the industries in which it operates, in light of these risks, uncertainties and assumptions, the events described in the forward-looking statements in this announcement may not occur.

The price of shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares. Past performance is no guide to future performance. Any person receiving this announcement is advised to exercise caution in relation to the Acquisition and Placing. If in any doubt about any of the contents of this announcement, independent professional advice should be obtained.

NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT DOES NOT CONSTITUTE A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT AND NEITHER THIS ANNOUNCEMENT NOR ANYTHING HEREIN FORMS THE BASIS FOR ANY CONTRACT OR COMMITMENT WHATSOEVER.

THE DEFINED TERMS SET OUT IN APPENDIX 2 APPLY IN THIS ANNOUNCEMENT.

ADDITIONAL INFORMATION REGARDING THE TRANSACTION

ENTERTAINMENT ONE LTD.PROPOSED ACQUISITION OF ALLIANCE, PLACING AND NOTICE OF SPECIAL MEETING

1. introduction

Today the Board announces that it has entered into an agreement for the Acquisition of Alliance from affiliates of the Goldman Sachs Group Inc. and Investissement Québec for approximately CAD$225 million comprising CAD$174.2 million payable in cash to the Sellers on Completion and the balance representing the pay down of external net debt at Completion. In addition, the following contingent payments might become due to the Sellers after Completion: (i) a maximum aggregate amount of CAD$35 million based on the Alliance Group meeting certain box office targets; and (ii) a maximum aggregate amount of CAD$12 million in the event that certain tax provisions are settled for less than the amount provided in Alliance's accounts.

For the purposes of the calculation of the consideration, the Directors do not expect that any amounts will become payable to the Sellers in relation to items (i) and (ii) above. Completion of the Acquisition is conditional, amongst other things, on approval being received from the Canadian Competition Bureau. Alliance is a leading independent distributor of filmed entertainment products in Canada, the United Kingdom and Spain.

The Company stated in its trading update on 28 March 2012 that it was considering applying to the UKLA for a premium listing of its Common Shares and it was expected that this would be complete by March 2013. In light of the Acquisition, this has been put on hold pending Completion and the subsequent integration of the Alliance Group into the Entertainment One Group. In any event, a successful application for a premium listing of the Company's Common Shares will be subject to satisfaction of applicable eligibility requirements.

In order to fund in part the Acquisition, Entertainment One proposes to undertake the Placing to raise approximately £110 million (approximately CAD$175.7 million) through the issue of 73,333,333 Placing Shares at a Placing Price of 150.0 pence per Placing Share (being approximately £96.5 million (approximately CAD$154.2 million) after costs and expenses relating to the Acquisition, the Placing and the Debt Commitment Letter).

The Placing Price represents a discount of 3.54 per cent. to the Closing Price of 155.5 pence per Common Share on 6 September 2012 (being the last Business Day prior to the date of the Prospectus).

The Placing is conditional, among other things, upon the following:

·; the passing of the Resolutions to be proposed at the Special Meeting;

·; Admission of the Placing Shares becoming effective by not later than 8.00 a.m. (BST) on 1 October 2012 or such later time as J.P. Morgan Cazenove and Cenkos agree, being not later than the seventh day following the Special Meeting; and

·; the Placing Agreement becoming unconditional in all respects and not having been terminated.

In the event that the Placing Agreement does not become unconditional or is terminated in accordance with its terms, for example, if the Resolutions are not passed or in the event of a material adverse change in the Group or the Alliance Group (provided, in the case of the Alliance Group, this gives rise to a termination right under the Acquisition Agreement), the Placing will lapse.

The Placing (other than the placing of 7,000,000 Placing Shares to US Placees) is underwritten by J.P. Morgan Cazenove. Certain institutional investors have entered into binding placing letters with the Company or the Joint Bookrunners, as agents for the Company, as the case may be, pursuant to which they have committed, conditional upon the Placing Agreement becoming unconditional in all respects and not having been terminated, to subscribe for an aggregate of up to 73,333,333 Placing Shares, of which 733,333 have been placed with the Initial Placees subject to clawback in order to satisfy subscriptions by the Clawback Placees, who, following announcement of the Placing will be invited to subscribe for such Placing Shares not allotted to the Initial Placees at the Placing Price by way of the Clawback Placing.

Further information on the Clawback Placing is set out in Appendix 3 and will be set out in the Prospectus.

Entertainment One is expected to announce the completion of the Clawback Placing on or around the date of the Prospectus.

The Placing is not conditional upon Completion of the Acquisition. Therefore, subject to the conditions to the Placing being satisfied and the Placing Agreement not being terminated, Admission will become effective and the Net Proceeds will be collected, before Completion. If one or more conditions to the Acquisition are not satisfied and Completion of the Acquisition does not occur, the Directors intend that some or all of the Net Proceeds will be returned to Shareholders, in accordance with applicable Canadian law (including the satisfaction of any applicable solvency tests under Canadian corporate law) and by a mechanism that the Company considers most efficient from a taxation perspective. The Company expects that some or all of the Net Proceeds will be returned in cash, for example by way of a special dividend which would be payable to Shareholders (other than those, if any, who elect to waive their respective rights) pro rata to their holdings of Common Shares, or by way of a substantial issuer bid involving the buy-back and cancellation of certain Common Shares, in which all Shareholders would be eligible to participate pro rata to their holdings.

The remainder of the funding required for the Acquisition will be obtained by the Company by way of debt financing. Entertainment One has entered into the Debt Commitment Letter with J.P. Morgan and Barclays pursuant to which J.P. Morgan agreed to act as lead arranger to (i) obtain the consent of the Existing Lenders required to allow Entertainment One to enter into the Acquisition Agreement (which was obtained on 6 September 2012); (ii) procure that the Existing Lenders enter into the Amended Facility, under which the Existing Lenders would agree to extend the term of the current revolving credit facility provided under the Existing Facility from 1 October 2014 to the fifth anniversary of the closing of the Amended Facility (which is expected to be immediately prior to Completion) and to include the Term Loan, which is an additional amount of up to CAD$150 million available to be used to, amongst other things, part fund the consideration payable under the Acquisition Agreement.

In the event that J.P. Morgan and Barclays are unable to procure the execution of the Amended Facility by all Existing Lenders, they have agreed to provide the New Facility which will be on substantially similar terms to the Existing Facility and which will (i) include a revolving credit facility of the same amount as, and will be used to repay the drawn down amounts of, the revolving credit facility provided under the Existing Facility with a maturity date of the fifth anniversary of the closing of the New Facility (which is expected to be immediately prior to Completion); and (ii) include the Term Loan. In the event that the Existing Lenders agree to extend the term of only a portion of the revolving credit facility and/or do not wish to include the Term Loan in the Amended Facility, J.P. Morgan and Barclays will remain under a commitment to fund the Term Loan as well as the portion of the revolving credit facility that is not extended under the Amended Facility and will be under an obligation to enter into the New Facility which will include such non-funded elements. Therefore the debt financing for the Acquisition will be provided either by the Amended Facility or the New Facility (as applicable). The Amended Facility or the New Facility (as applicable) (together the "Revised Facility") is expected to raise approximately CAD$150 million in funds available to be used to part fund the Acquisition.

Any amounts payable under the Acquisition Agreement over and above CAD$225 million will be satisfied by the Company from a drawdown under its available debt facilities or from its general working capital resources.

The purpose of this announcement is to explain the background to, and reasons for, the Acquisition and the Placing, to explain why the Directors believe that the Placing is in the best interests of the Company and of the Shareholders as a whole, and to recommend that you vote in favour of the Resolutions to be proposed at the Special Meeting.

2. STRATEGY

The Group's goal is to become the world's leading independent entertainment company, creating value for Shareholders through the ownership and distribution of film and television content rights across all media throughout the world.

The Group has stated three strategic priorities:

Invest in content and programming. Since commencing its content-focused strategy in 2007 Entertainment One has invested over £360 million in film and television properties. The Group's library of content rights, which includes over 24,000 film and television titles and 2,700 hours of television programming in March 2012, was independently valued as at March 2011 at over US$350 million;

Maximise rights ownership. Entertainment One's strategy when acquiring or producing content is to maximise the extent of the rights it owns across the different media available to consumers. This ensures that the Group is well positioned to mitigate the impact of changes in technology which may influence how consumers consume content; and

Expand global presence. Since 2007, Entertainment One has expanded internationally through both corporate acquisitions and partnerships. By continuing to grow internationally the Group gains access to more markets, is able to drive greater efficiencies and reduces its exposure to any one territory.

The Directors believe the Acquisition is complementary to the Group's strategic priorities and believe the Group will benefit from added scale in both investment in content and rights ownership and gain access to more markets such as Spain.

3. Rationale for the Acquisition

The Board believes that the combination of Entertainment One and Alliance represents an exceptional opportunity to create a leading independent film distributor in Canada and the United Kingdom. The Directors believe that, based on box office revenues, Entertainment One is the 8th largest film distributor in Canada (with a 7.9 per cent. market share); 8th largest film distributor and 2nd largest independent film distributor in the United Kingdom (with a market share of 5.1 per cent.), Alliance is the 3rd largest film distributor in Canada (with a 12.3 per cent. market share); and 9th largest film distributor and 3rd largest independent film distributor in the United Kingdom (with a market share of 4.6 per cent.). The Directors believe that the combination of the Entertainment One Group and Alliance Group would therefore create one of the largest and a highly competitive film distributor in Canada (with a combined market share of 20.1 per cent.) ahead of major studios and the 5th largest film distributor and largest independent film distributor in the United Kingdom (with a combined market share of 9.7 per cent.).

Alliance's business operates in geographies that are highly complementary to Entertainment One's, and the Group will have an international reach across Canada, the United Kingdom, Benelux, Australia, United States and Spain with a combined library of more than 35,000 film and television titles.

The Board believes that the Acquisition will provide significant strategic and commercial benefits and will add value for Shareholders by:

·; providing increased access to successful independent film studios through an expanded range of output agreements including The Weinstein Company, Focus Features, and Relativity in Canada;

·; providing a stronger market position in the Group's core territories and increasing the Group's reach by adding Spain to its global network;

·; expanding and strengthening the Group's film catalogue, particularly in Canada, making its library increasingly attractive to digital channels seeking to secure access to premium content to drive market entry strategies and providing the Group additional revenue stability and cash flow;

·; enhancing the Group's position to distribute film and television content in competition with the major film studios;

·; enhancing long-term growth potential through a combined investment in content of over approximately CAD$225 million per year; and

·; delivering estimated annualised pre-tax cost synergies of at least CAD$20 million from procurement and operational efficiencies (by the third anniversary of Completion), with the expected one-off cash costs to implement the integration and deliver the synergies estimated at CAD$13 million; and driving substantial enhancement of Entertainment One's earnings per share3.

Overall, the Directors believe that the Acquisition will strengthen Entertainment One's existing film distribution business and help drive growth.

4. Summary information on Entertainment One

Entertainment One is an international entertainment group with operations incorporating film and television. During the year ended 31 March 2012, Entertainment One released 152 English-language and French-language films theatrically and delivered 237 half hours of television content (excluding Family). The Group's current rights library includes more than 24,000 film and televisiontitles, 2,700 hours of television programming and 45,000 music tracks and is distributed across all media formats.

Entertainment One was admitted to trading on the AIM market of the London Stock Exchange on 29 March 2007, and to the standard segment of the Official List and to trading on the Main Market of the London Stock Exchange on 15 July 2012. The Group employs approximately 1,092 staff worldwide.

The Group's total sales for the year ended 31 March 2012 were £502.7 million, representing growth of 7 per cent. over the prior year. The Group's Underlying EBITDA increased from £42.5 million to £52.6 million over the same period.

The Group is operated through two divisions:

Entertainment (comprising Film and Television):

·; Film: Entertainment One acquires and exploits feature film rights across all media (including theatrical, DVD, TV and digital) in the United Kingdom, Canada, United States, Australia and Benelux; and

·; Television: Entertainment One produces original television programming in North America and the United Kingdom for broadcast in domestic and international markets. The Group's United Kingdom based business produces award-winning Family programming with associated licencing and merchandising opportunities managed by the Company's own in-house team.

Distribution:

·; Entertainment One owns wholesale home entertainment distribution operations in Canada and the United States.

Further information on Entertainment One will be set out in the Prospectus.

5. Summary information on ALLIANCE

Alliance is the largest independent film distributor in Canada and a leading independent distributor in the United Kingdom and Spain, based on box office revenues in 2011. On average, Alliance has released more than 90 theatrical and more than 120 direct-to-video films annually since 2009 and Alliance's catalogue comprises over 11,500 titles. Alliance trades as Alliance Films in Canada, Momentum Pictures in the United Kingdom and Aurum in Spain. Alliance has recently released a number of high-profile titles in Canada and the United Kingdomincluding: The King's Speech, The Fighter, Limitless, The Girl With the Dragon Tattoo and Woman in Black and The Hunger Games in Canada. Alliance has approximately 289 employees.

____________3 This should not be construed as a profit forecast or interpreted to mean that the future earnings per share, profits, margins or cashflows of Entertainment One will necessarily be greater than the historic published figures.

In Canada, Alliance has exclusive output agreements with leading independent film studios including Lions Gate, The Weinstein Company, Focus Features, and Relativity. In the United Kingdom, Alliance has an output agreement with Relativity and in Spain with Summit, the United States studio behind the Twilight franchise and with which Entertainment One has its own output deal in Canada, the United Kingdom and Australia. In 2011, Alliance acquired Canadian independent film distributor Maple Pictures Corporation from Lions Gate and secured a long term output agreement with Lions Gate. Alliance also has an extensive catalogue of French language films.

In the year ended 31 December 2011, Alliance earned revenues of CAD$454.4 million (approximately £284.5 million), and income before net finance expense and taxes of CAD$12.3 million (approximately £7.7 million). As at 31 December 2011, Underlying EBITDA4 was CAD$39.7 million (approximately £24.9 million).

6. PRINCIPAL TERMS OF THE ACQUISITION

The consideration for the Acquisition is approximately CAD$225 million comprising CAD$174.2 million payable in cash to the Sellers on Completion and the balance representing the pay down of external net debt at Completion.

In addition, the following contingent payments might become due to the Sellers after Completion in respect of (i) a maximum aggregate amount of CAD$35 million based on the Alliance Group meeting certain box office targets over a two year period; and (ii) a maximum aggregate amount of CAD$12 million in the event that certain tax provisions are settled for less than the amount provided in Alliance's accounts within a 3 year period of Completion.

For the purposes of the calculation of the consideration, the Directors do not expect that any amounts will become payable to the Sellers in relation to items (i) and (ii) above because, in the case of (i), the Directors believe that the relevant box office forecasts of the Alliance Group for the next two years are optimistic and, in the case of (ii), given the Directors' analysis of the tax position of Alliance. The final amount of Alliance's external net debt will be calculated at Completion, however as at 31 December 2011, it was CAD$50.5 million.

The final amount of the external net debt of Alliance will not be known until Completion, although Alliance has provided positive and negative covenants in the Acquisition Agreement in respect of the operation of its business up to Completion in order to preserve the business and help ensure the external net debt of Alliance at Completion will be in line with expectations. These covenants include positive covenants to operate the business in the ordinary course and in accordance with past practice, as well as negative covenants to not (save with Entertainment One's consent) make certain capital expenditures, investments, distributions or other payments, as well as to not take on additional debt out of the ordinary course of business up to Completion.

The Acquisition is conditional on (a) no breach of the representations and warranties under the Acquisition Agreement; (b) performance of the covenants of the Sellers, Alliance and Entertainment One; (c) no action or threatened action or injunction from a government authority that is likely to prohibit, restrict or make illegal the Acquisition; (d) no material adverse change or material adverse effect having occurred; (e) approval from the Canadian Competition Bureau having been obtained by 5 March 2013; (f) Alliance having settled its debt obligations in relation to all shareholder loans and (g) delivery of certain standard closing deliverables.

If the approval from the Canadian Competition Bureau is not forthcoming by 5 March 2013, the Sellers and Entertainment One both have the right to terminate the Acquisition Agreement and if this is exercised, it would trigger an obligation on Entertainment One to pay a break fee of CAD$20 million to one of the Sellers (specifically, Goldman).

Entertainment One has agreed to use its best efforts to obtain approval of the Acquisition from the Canadian Competition Bureau as soon as practicable after execution of the Acquisition Agreement. This means that Entertainment One is under an obligation to comply with any requests or conditions if they are required by the Canadian Competition Bureau in order to secure their approval of the Acquisition, regardless of the impact of the

___________4 Underlying EBITDA is calculated by Entertainment One as being income before net finance expenses and taxes of CAD$12.3 million after adding back one off items and certain items of amortisation. One off items comprise CAD$5.0 million of goodwill written off, CAD$2.1 million of transaction costs relating to the Maple acquisition and CAD$1.1 million of restructuring and transaction costs. Amortisation items comprise amortisation of property and equipment and intangible assets of CAD$3.4 million and CAD$15.8 million representing amortisation on the uplift in value of investment in content arising on acquisition of the business in 2007. In calculating Underlying EBITDA all figures have been extracted from Alliance’s audited financial statements included in Part VII (Financial Information on Alliance) of the Prospectus with the exception of the CAD$15.8 million amortisation on the uplift in value of investment in content which has been sourced from Alliance management information underlying the audited financial statements.

implementation of those requests or conditions on the business of the Alliance Group or the Entertainment One Group. For example, if the Canadian Competition Bureau requires Entertainment One to sell a portion of its or the Alliance Group's business in order to secure approval of the Acquisition, Entertainment One would be under an obligation to complete such sale, irrespective of how that affected the combined Group post Completion and any actions required to comply with any such request or condition of the Canadian Competition Bureau must be completed prior to 5 March 2013 (i.e. the long stop date in the Acquisition Agreement). In the event that approval from the Canadian Competition Bureau is not obtained by 5 March 2013, Entertainment One and the Sellers each have the right to terminate the Acquisition Agreement and, if terminated by either party, Entertainment One would be obliged to pay a break fee to one of the Sellers of CAD$20 million.

If one or more conditions to the Acquisition are not satisfied and Completion of the Acquisition does not occur, the Directors intend that some or all of the Net Proceeds of the Placing will be returned to Shareholders in accordance with applicable Canadian law (including the satisfaction of any applicable solvency tests under Canadian corporate law) and by a mechanism that the Company considers most efficient from a taxation perspective. The Company expects that some or all of the Net Proceeds will be returned in cash, for example, by way of a special dividend which would be payable to Shareholders (other than those, if any, who elect to waive their respective rights) pro rata to their holdings of Common Shares or by way of a substantial issuer bid involving the buy-back and cancellation of certain Common Shares, in which all Shareholders would be eligible to participate pro rata to their holdings.

7. REASONS FOR THE FUNDRAISE AND USE OF PROCEEDS

The Company intends to fund the Acquisition and associated expenses through a combination of the proceeds received from the Placing and the Revised Facility.

·; the Placing is expected to raise £110 million by the issue of 73,333,333 Placing Shares at a Placing Price of 150.0 pence per Placing Share (being approximately £96.5 million (approximately CAD$154.2 million) after costs and expenses relating to the Acquisition, the Placing and the Debt Commitment Letter); and

·; the Revised Facility is expected to raise approximately CAD$150 million in funds available to be used to part fund the Acquisition.

Therefore, the Placing and the portion of the Revised Facility available to be used to part fund the Acquisition are expected to raise, in aggregate, CAD$304.2 million (net of expenses).

The Board believes that it is prudent to part fund the Acquisition through the Placing and believes that the Group's level of indebtedness is appropriate with ample liquidity for continued investments in content post Completion of the Acquisition, whilst offering the prospect of attractive returns for Shareholders. The Company intends to use the proceeds of the Placing and the portion of the Revised Facility available to be used to part fund the Acquisition as follows:

·; CAD$225 million in order to satisfy the approximate amount of consideration payable on Completion pursuant to the Acquisition Agreement; and

·; CAD$21.5 million in order to satisfy the costs and expenses associated with the Acquisition and Placing including bank fees, legal fees and costs associated with the application for approval of the Acquisition by the Canadian Competition Bureau.

Any amounts payable under the Acquisition Agreement over and above CAD$225 million will be satisfied by the Company from a drawdown under its available debt facilities or from its general working capital resources.

The Acquisition Agreement is not conditional upon receipt of the Net Proceeds of the Placing, the Revised Facility being available or the raising of any other acquisition financing by Entertainment One. As stated, Entertainment One intends to use and requires the Net Proceeds of the Placing and the Revised Facility to fund the consideration payable at Completion under the Acquisition Agreement and, although the Placing (other than the placing of 7,000,000 Placing Shares to US Placees) is underwritten and the Directors are confident that the Revised Facility will be available, both are subject to the satisfaction of certain customary conditions. In addition, J.P. Morgan Cazenove and Cenkos have certain rights of termination in relation to the Placing Agreement. The Directors are confident that all of the conditions to the Placing and the Revised Facility will be satisfied and do not anticipate that an event is likely to occur which would lead to the Placing Agreement being terminated. However, in the event that the Company does not receive the Net Proceeds of the Placing or the Revised Facility is not available to the Company and the Acquisition Agreement becomes unconditional, the Company will remain obligated to pay the consideration under the Acquisition Agreement. In this circumstance, the Directors intend to seek other sources of further debt or equity funding in the form of term loans, bonds or a further equity issuance, in order to satisfy its obligations under the Acquisition Agreement.

The Acquisition requires approval by the Canadian Competition Bureau and if this is not forthcoming, the Acquisition Agreement can be terminated by either the Sellers or Entertainment One which would trigger an obligation on Entertainment One to pay a break fee of CAD$20 million to the Sellers.

8. FINANCIAL IMPACT OF THE ACQUISITION AND PLACING

The Board believes that the Acquisition will be financially beneficial to the Company and will add value for Shareholders through:

i. estimated annualised pre-tax cost synergies of at least CAD$20 million from procurement and operational efficiencies (by the third anniversary of Completion), expected one-off cash costs to implement the integration and deliver the synergies are estimated at CAD$13 million; and

ii. driving substantial enhancement of Entertainment One's earnings per share5.

9. SUMMARY OF THE PLACING

The Company is proposing to raise approximately £110 million by way of the Placing. 73,333,333 Placing Shares will be issued through the Placing at 150.0 pence per Placing Share (being approximately £96.5 million (approximately CAD$154.2 million) after costs and expenses relating to the Acquisition, the Placing and the Debt Commitment Letter).

The Placing Price represents a discount of 3.54 per cent. to the Closing Price of 155.5 pence per Common Share on 6 September 2012 (being the last Business Day prior to the announcement of the Placing).

The Placing is conditional, amongst other things, upon the following:

·; the passing of the Resolutions to be proposed at the Special Meeting;

·; Admission of the Placing Shares becoming effective by not later than 8.00 a.m. (BST) on 1 October 2012 or such later time as J.P. Morgan Cazenove and Cenkos agree, being not later than the seventh day following the Special Meeting; and

·; the Placing Agreement becoming unconditional.

On Admission, the Placing Agreement will be unconditional in all respects.

In the event that the Placing Agreement does not become unconditional or is terminated in accordance with its terms, for example if the Resolutions are not passed, the Placing will lapse and Admission will not occur.

The Acquisition requires approval by the Canadian Competition Bureau and if this is not forthcoming, the Acquisition Agreement can be terminated by either the Sellers or Entertainment One which would trigger an obligation on Entertainment One to pay a break fee of CAD$20 million to the Sellers.

The Placing (other than the placing of 7,000,000 Placing Shares to the US Placees)is underwritten by J.P. Morgan Cazenove. Certain institutional investors have entered into binding placing letters with the Company or Joint Bookrunners, as agents for the Company, as the case may be, pursuant to which they have committed, conditional

____________5 This should not be construed as a profit forecast or interpreted to mean that the future earnings per share, profits, margins or cashflows of Entertainment One will necessarily be greater than the historic published figures.

upon the Placing Agreement becoming unconditional in all respects and not having been terminated, to subscribe for an aggregate of up to 73,333,333 Placing Shares, of which 733,333 have been placed with the Initial Placees subject to clawback in order to satisfy subscriptions by the Clawback Placees, who, following announcement of the Placing will be invited to subscribe for such Placing Shares and Placing Shares not allotted to the Initial Placees at the Placing Price by way of the Clawback Placing.

Further information on the Clawback Placing is set out in Appendix 3 and will be set out in the Prospectus.

Entertainment One will announce the completion of the Clawback Placing on or around the date of the Prospectus.

Upon completion of the Placing, the Placing Shares will represent 27.17 per cent. of the Enlarged Issued Share Capital. Following the issue of the Placing Shares, Shareholders who have not participated in the Placing will suffer a dilution of 27.17 percent.

10. Summary of the revised facility

The Company is proposing to raise approximately CAD$150 million by way of debt financing in funds available under the Revised Facility to part fund the Acquisition.

Entertainment One has entered into the Debt Commitment Letter with J.P. Morgan and Barclays pursuant to which J.P. Morgan and Barclays agreed to act as joint arrangers to (i) obtain the consent of the Existing Lenders required to allow Entertainment One to enter into the Acquisition Agreement (which was obtained on 6 September 2012); and (ii) procure that the Existing Lenders enter into the Amended Facility, under which the Existing Lenders would agree to extend the term of the current revolving credit facility provided under the Existing Facility from 1 October 2014 to the fifth anniversary of the closing of the Amended Facility (which is expected to be immediately prior to Completion) and to include the Term Loan, which is an additional amount available of up to CAD$150 million available to be used, amongst other things, to part fund the consideration payable under the Acquisition Agreement.

In the event that J.P. Morgan and Barclays are unable to procure the execution of the Amended Facility by all Existing Lenders, they have agreed to provide the New Facility which will be on substantially similar terms to the Existing Facility and which will (i) include a revolving credit facility of the same amount as, and will be used to repay the drawn down amounts of, the revolving credit facility provided under the Existing Facility with a maturity date of the fifth anniversary of the closing of the New Facility (which is expected to be immediately prior to Completion); and (ii) include the Term Loan. In the event that the Existing Lenders agree to extend the term of only a portion of the revolving credit facility and/or do not wish to include the Term Loan in the Amended Facility, J.P. Morgan and Barclays will remain under a commitment to fund the Term Loan as well as the portion of the revolving credit facility that is not extended under the Amended Facility and will be under an obligation to enter into the New Facility which will include such non-funded elements.

The provision of both the Amended Facility and the New Facility is conditional, amongst other things, upon the following:

·; the entering into of long form documents;

·; the delivery of external reports;

·; continued compliance with covenants under the Existing Facility; and

·; a material adverse change of Alliance (which is substantially the same as the material adverse change provision in the Acquisition Agreement) having not occurred.

11. Working capital

Entertainment One is of the opinion that the Group does not have sufficient working capital for its present requirements that is, for at least the next 12 months from the date of publication of the Prospectus.

The requirements noted above relate specifically to the payment of the consideration required under the terms of the Acquisition Agreement. In all other aspects, including the payment of the CAD$20 million break fee (if required), the Board considers that the Group does have sufficient working capital for its present requirements, that is for at least the next 12 months from the date of the publication of the Prospectus.

Under the terms of the Acquisition Agreement, Entertainment One has committed, subject to certain conditions, to proceed with the Acquisition and to pay consideration of approximately CAD$225 million comprising CAD$174.2 million payable in cash to the Sellers on Completion and the balance representing the pay down of external net debt at Completion. The consideration is expected to be funded by the Net Proceeds of the Placing and the Revised Facility as explained further in this paragraph, however these funds will not be available as at the date of the Prospectus. In addition, the following contingent payments might become due to the Sellers after Completion: (i) a maximum aggregate amount of up to CAD$35 million based on the Alliance Group meeting certain box office targets; and (ii) a maximum aggregate amount of up to CAD$12 million in the event that certain tax provisions are settled for less than the amount provided in Alliance's accounts.

For the purposes of the calculation of the consideration, the Directors do not expect that any amounts will become payable to the Sellers in relation to items (i) and (ii) above because, in the case of (i), the Directors believe that the relevant box office forecasts of the Alliance Group for the next two years are optimistic and, in the case of (ii), given the Directors' analysis of the tax position of Alliance. If, however, these contingent payments do become payable, the Directors believe that the cash generated by increased revenues from meeting the box office forecasts of Alliance will be sufficient to fund the contingent payment in respect of (i) above and that the amounts provided for tax in the Alliance accounts will be sufficient to fund the contingent payment in respect of (ii) above. The final amount of Alliance's external net debt will only be calculated at Completion, however as at 31 December 2011, it was CAD$50.5 million. Alliance has provided positive and negative covenants in the Acquisition Agreement in respect of the operation of its business up to Completion in order to preserve the business and help ensure the external net debt of Alliance at Completion will be in line with expectations. These covenants include positive covenants to operate the business in the ordinary course and in accordance with past practice, as well as negative covenants to not (save with Entertainment One's consent) make certain capital expenditures, investments, distributions or other payments, as well as to not take on additional debt out of the ordinary course of business up to Completion.

Any amounts payable under the Acquisition Agreement over and above CAD$225 million will be satisfied by the Company from a drawdown under its available debt facilities or from its general working capital resources.

The Acquisition Agreement is not conditional upon receipt of the Net Proceeds of the Placing, the Revised Facility being available or the raising of any other acquisition financing by Entertainment One. Entertainment One intends to use and requires the Net Proceeds of the Placing and the Revised Facility to fund the consideration payable to the Sellers for the Acquisition at Completion and, although the Placing (other than the placing of 7,000,000 Placing Shares by the Company to US Placees) is underwritten, both the Placing and the Revised Facility are subject to the satisfaction of certain market standard rights and conditions. The Company expects Completion to occur in early 2013 and accordingly will require the funds to pay the consideration under the Acquisition Agreement at that time.

One of the conditions to the Debt Commitment Letter and therefore to the provision of the Revised Facility is that a minimum of CAD$125 million is received by Entertainment One from an equity fundraise. If the Placing does not complete, and if Entertainment One does not complete another equity fundraise, the commitment of J.P. Morgan and Barclays to provide the Revised Facility under the Debt Commitment Letter may be withdrawn. At the time of signing the Acquisition Agreement, the Company and the Joint Bookrunners have received irrevocable commitments from investors to subscribe for the Placing Shares and irrevocable undertakings to vote in favour of the Resolutions from Marwyn Investment Managers and certain Directors. As such, the Directors are confident that all of the conditions to the Placing will be satisfied and do not anticipate that an event is likely to occur which would lead to the Placing Agreement being terminated.

£10.5 million of the Gross Proceeds of the Placing (being the approximate amount subscribed for by US Placees) is not being underwritten by J.P. Morgan Cazenove, however irrevocable commitments from US Placees to subscribe for the relevant number of Placing Shares have been obtained by the Company under a binding placing letter which is subject to standard conditions.

Additionally, the Directors are confident that the conditions to the Debt Commitment Letter and therefore the provision of the Revised Facility will be satisfied. This is because most of the conditions are within the control of Entertainment One, such as the filing of security documents and provision of reports. The Directors are confident that those conditions that are not within Entertainment One's control will also be satisfied. These include that a long form agreement is entered into (as, under New York law, there is an implied covenant of good faith and fair dealing in all contracts which means that J.P. Morgan, Barclays and the Company will be under an obligation to finalise the final documentation in good faith, based on the terms specified in the Debt Commitment Letter and certain guiding "documentation principles"), that no material adverse change has occurred in respect of Alliance (as this provision is substantially the same as the material adverse change provision in the Acquisition Agreement therefore in the event that this condition is not satisfied under the Debt Commitment Letter it would equally not be satisfied under the Acquisition Agreement) and that certain representations in the Acquisition Agreement remain true and accurate (all of which the Directors consider standard representations and consider it unlikely that any would become untrue or incorrect). In the event that the Existing Lenders agree to extend the term of only a portion of the revolving credit facility and/or do not wish to include the Term Loan in the Amended Facility, J.P. Morgan and Barclays will remain under a commitment to fund the Term Loan as well as the portion of the revolving credit facility that is not extended under the Amended Facility. It is expected that the Amended Facility or New Facility (as applicable) will be executed immediately prior to Completion. Accordingly, the Directors are confident that the Net Proceeds of the Placing and the Revised Facility will be available to the Company to fund the Acquisition.

Following receipt of the Net Proceeds of the Placing and satisfaction of the conditions precedent to the Debt Commitment Letter and therefore the availability of the Revised Facility, the Group will have sufficient working capital to fund the Acquisition and its other present requirements, that is for at least the next 12 months from the date of the publication of the Prospectus.

In the event that the Company does not receive the Net Proceeds of the Placing or the Revised Facility is not available to the Company and the Acquisition Agreement becomes unconditional, the Directors intend to seek other sources of further debt or equity funding in the form of term loans, bonds or a further equity issuance, in order to satisfy its obligation to pay the consideration under the Acquisition Agreement. The Directors are confident that they would be able to secure such alternative funding based on the strength of the Company's balance sheet and the prospects of the Group. If the Company cannot obtain such other sources of funding (by whatever means), it would be in breach of the Acquisition Agreement and the Sellers might be entitled to bring an action for breach of contract against Entertainment One, which could result in, amongst other things, a claim for damages, specific performance or other remedy against Entertainment One.

12. APPLICATION FOR ADMISSION, SETTLEMENT AND DEALING ARRANGEMENTS

Application will be made to the UK Listing Authority for the Placing Shares to be listed on the standard segment of the Official List and to trading on the London Stock Exchange's Main Market for listed securities. Subject to, among other things, the Resolutions being passed, it is expected that Admission will become effective at 8:00 a.m. (BST) on 1 October 2012 and that dealings for normal settlement in the Placing Shares will commence at 8:00 a.m. (BST) on the same day.

The Placing Shares to be issued pursuant to Placing will, following Admission, rank pari passu in all respects with the Common Shares in issue at the date of the Prospectus and will carry the right to receive all dividends and distributions declared, made or paid on or in respect of the Common Shares after Admission.

CREST is a paperless settlement procedure enabling securities to be evidenced otherwise than by a certificate and transferred otherwise than by written instrument. Securities issued by certain non-United Kingdom registered companies, such as the Company, cannot be held or transferred in the CREST system. To enable investors to settle the Company's securities through CREST, the Company entered into the Depository Agreement. Depository Interests allow certified shares issued by companies in non-United Kingdom jurisdictions to be dematerialised and settled electronically. Accordingly Common Shares are transferred to the Depository under the Depository Agreement, who then issues the Depository Interests to the individual holder's CREST account on a one-for-one basis and provides the necessary custodial services. The Depository Interests can then be traded and settled within the CREST system in the same way as any other CREST security. As the Common Shares cannot themselves be dematerialised and admitted to CREST, the Company has adopted the Depository Interest facility operated by the Depository so that Shareholders have the choice of whether they want to hold their Common Shares (including the Placing Shares) in certified form or in uncertified form through the Depository Interest facility. Shareholders who subscribe for Placing Shares who elect to hold their Common Shares in uncertified form as Depository Interests will be bound by the terms of the Deed Poll.

The Company's share register will show the Depository as the holder of Placing Shares that are held in uncertified form through the Depository Interest facility but the beneficial interest will remain with the relevant Shareholder who will continue to receive all of the rights attaching to the Placing Shares as they would have if they had themselves been entered on the register. Placing Shares will be transferred or issued to an account for the Depository (or its nominated custodian) and the Depository will issue Depository Interests to participating members. The Depository Interests will be traded and settled via the CREST system. Depository Interest Holders can withdraw their Placing Shares back into certified form at any time using standard CREST messages. Conversion into, and transfer of, Depository Interests are not currently subject to stamp duty or SDRT. CREST is a voluntary system and holders of the Placing Shares who wish to receive and retain share certificates will be able to do so. Share certificates will be despatched to those Shareholders who have registered to hold their Placing Shares in certificated form by first-class post within 10 days of the date of Admission.

13. Dividend policy

The current focus for the Company will continue to be on delivering capital growth for Shareholders and therefore the Board will only commence the payment of dividends as and when it is appropriate and practicable.

14. CURRENT TRADING and prospectS

14.1 Current trading and prospects of the Group

Trading in the first five months of the current financial year is in line with management expectations.

14.2 Current trading and prospects of Alliance

Trading in the first six months of the Alliance Group's current financial year is in line with the expectations of the Directors.

15. SPECIAL MEETING

A Special Meeting of the Company is to be held at the offices of Osler, Hoskin & Harcourt LLP in Room CC5, 63rd Floor, 100 King Street West, Toronto, Ontario, Canada at 1:00 p.m. (EDT)/6.00 p.m. (BST) on 28 September 2012 at which the Resolutions will be proposed and Shareholder approval required for the Placing will be sought. The full text of the Resolutions will be set out in the notice convening the Special Meeting contained in the Shareholder Circular. The Acquisition and Placing are conditional and dependent upon the Resolutions being passed (there are also additional conditions which must be satisfied before the Acquisition and Placing can be completed).

The Marwyn Investment Managers and the Directors who hold Existing Common Shares have entered into irrevocable undertakings to vote in favour of the Resolutions at the Special Meeting. In addition, Darren Throop as the holder of Preferred Variable Voting Shares intends to vote in favour of the Resolutions. The vote of the Preferred Variable Voting Shares and the votes from those Shareholders who have granted irrevocable undertakings are sufficient to pass the Resolutions at the Special Meeting.

16. Further information AND RISK FACTORS

Further details in relation to the Acquisition and Placing will be set out in the Prospectus which is expected to be published in relation to the application to the UKLA and the London Stock Exchange for the Placing Shares of the Company to be admitted to listing on the standard listing segment of the Official List and to trading on the main market of the London Stock Exchange. Shareholders' attention is drawn, in particular, to the risk factors to be included in the Prospectus.

Further details on the actions to be taken by Shareholders in respect of the Special Meeting and the Resolutions will be set out in the Shareholder Circular.

Enquiries:

Entertainment One +44 (0) 207 566 6720

Giles Willits

J.P. Morgan Cazenove (Joint Financial Adviser, Joint Bookrunner and Underwriter) +44 (0) 207 742 4000Harry Hampson

Nicholas Hall

Virginia Khoo

Credit Suisse (Joint Financial Adviser) +44 (0) 207 888 8888

Alastair Blackman

Joe Hannon

Cenkos Securities (Corporate Broker and Joint Bookrunner) +44 (0) 207 397 8926

Stephen Keys

Adrian Hargrave

Alex Aylen

Andy Roberts

Singer Capital Markets (Corporate Broker) +44 (0) 203 205 7500

James Maxwell

Nick Donovan

Redleaf Polhill +44 (0) 207 566 6720

Emma KaneRebecca Sanders-Hewett

Media (North America)

Jackie Rubin +1 416 979 7256

IMPORTANT NOTICE

This announcement 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 South Africa or any other jurisdiction in which it would be unlawful to do so. This announcement does not constitute an offer to sell or issue, or the solicitation of an offer to buy or acquire, any securities, nor shall there be any sale of securities in the United States, Australia, Canada, Japan, New Zealand or South Africa or any other jurisdiction in which such an offer or solicitation would be unlawful. No money, securities or other consideration is being solicited and, if sent in response to the information herein, will not be accepted.

This announcement has been issued by, and is the sole responsibility of, the Company. No representation or warranty, express or implied, is or will be made by, or in relation to, and no responsibility or liability is or will be accepted by the Banks or by any of their respective affiliates or agents or by any adviser to the Company or by any of their affiliates or agents as to or in relation to the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any responsibility or liability therefore is expressly disclaimed.

The Banks are authorised and regulated in the United Kingdom by the FSA and are acting exclusively for the Company in connection with the matters set out in this announcement. The Banks are not, and will not be, responsible to anyone other than the Company for providing the protections afforded to their clients or for providing advice in relation to the proposed Acquisition and Placing or any other matters referred to in this announcement. Apart from the responsibilities and liabilities, if any, which may be imposed on them by the FSMA, neither the Banks nor any of their respective affiliates, parent undertakings, subsidiary undertakings or subsidiaries of its parent undertakings or any of their respective directors, officers, employees or advisers or any other person accepts any responsibility whatsoever and makes no representation or warranty, express or implied, for or in respect of the contents of this announcement, or for any other statement made or purported to be made by them, or on their behalf, in connection with the Company, the proposed Acquisition or the Placing, and nothing in this announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or the future. The Banks accordingly disclaim to the fullest extent permitted by law all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this announcement or any such statement.

This announcement has been prepared in accordance with English law, the Listing Rules and the Disclosure Rules and Transparency Rules and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England.

The distribution of this announcement, and the availability of the Placing, in jurisdictions other than the United Kingdom may be affected by the laws of relevant jurisdictions. Therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom will need to inform themselves about, and observe any applicable requirements.

This announcement is for information purposes only and shall not constitute an offer or invitation to buy, or otherwise acquire, sell, otherwise dispose of or issue or subscribe for, or the solicitation of an offer to buy, sell, dispose of, acquire, issue, or subscribe for, any securities in the Company or any other entity. Any such offer will be made solely by means of a prospectus to be published in due course and any supplement or amendment thereto and any acquisition of securities in the Company should be made solely on the basis of the information contained in such Prospectus.

The securities of the Company (the "Securities") have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, 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 in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offer of the Securities in the United States.

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

This announcement and some of the materials distributed in connection with this announcement, contains (or may contain) certain forward-looking statements with respect to certain of the Company's current expectations and projections about future events. These statements, which can be identified by the use of words such as "anticipate", "believe", "intend", "estimate", "expect", "will", "shall", "may", "plan", "project", "aim", "predict", "should", "continue" or, in each case, their negative, and words of similar meaning and/or other similar expressions, are predictions of or indicate future events and/or future trends, discussions of future strategy, plans, objectives, goals, and reflect the directors' beliefs and expectations at the date of this announcement and involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement.

Forward-looking statements are not guarantees of future performance. Statements contained in this announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The information contained in this announcement is subject to change without notice and, except to the extent required by the FSA, the London Stock Exchange or by applicable law, the Prospectus Rules, the Listing Rules and the Disclosure and Transparency Rules, neither the Company nor the Banks assume any responsibility or obligation to update publicly, release the result of any revisions to any forward-looking statements in this announcement that may occur due to any change in the Company's expectations or to reflect events or circumstances after the date of this announcement, or review any of the forward-looking statements contained herein. You should not place undue reliance on forward-looking statements, which speak only as of the date of this announcement. A number of factors could cause results and developments of the Company's Group to differ materially from those expressed or implied by the forward-looking statements including, without limitation, general economic and business conditions, industry trends, competition, changes in regulation, currency fluctuations, changes in its business strategy, political and economic uncertainty and other factors to be set forth in the Prospectus.

No statement in this announcement is or is intended to be a profit forecast or to imply that the earnings of the Company for the current or future financial years will necessarily match or exceed the historical or published earnings of the Company.

You are advised to read this announcement and, once available, the Prospectus and the information incorporated by reference therein in their entirety for a further discussion of the factors that could affect the Company's future performance and the industries in which it operates. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements in this announcement may not occur.

The price of shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares. Past performance is no guide to future performance. Any person receiving this announcement is advised to exercise caution in relation to the Acquisition and Placing. If in any doubt about any of the contents of this announcement, independent professional advice should be obtained.

APPENDIX 1

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Each of the times and dates set out below and mentioned elsewhere in this announcement may be adjusted by the Company in consultation with J.P. Morgan Cazenove and Cenkos, in which event details of the new times and dates will be notified to the FSA, the London Stock Exchange and, where appropriate, Shareholders. References to a time of day are to London time unless otherwise stated.

_____________6 This is the current expected date of Completion of the Acquisition. However, Completion is conditional and this timing is therefore dependent on factors outside the control of the Company, including the decision and timetable of the Canadian Competition Bureau.

APPENDIX 2

Definitions and Glossary of Technical Terms

Reference to a company in this announcement shall be construed so as to include any company, corporation or other body corporate, wherever and however incorporated or established.

"Acquisition" the proposed acquisition by Entertainment One of Alliance under the terms of the Acquisition Agreement

"Acquisition Agreement" the agreement entered into by Entertainment One, the Sellers and Alliance in connection with the Acquisition

"Admission" admission to listing of the Placing Shares on the Official List (Standard Listing) and admission to trading of the Placing Shares on the Main Market of the London Stock Exchange and a reference to Admission becoming "effective" is to be construed in accordance with the Listing Rules or the Standards (as applicable)

"Alliance" Alliance Films Holdings Inc., a corporation organised and existing under the laws of Canada

"Alliance Group" Alliance and its subsidiaries and subsidiary undertakings

"Amended Facility" the amended facility arrangement pursuant to the Debt Commitment Letter under which the Existing Lenders agree to amend the Existing Facility in order to (i) extend the term of the revolving credit facility under the Existing Facility from 10 October 2014 to the fifth anniversary of the closing of the Amended Facility; and (ii) to include the Term Loan.

"Banks" J.P. Morgan Cazenove, Credit Suisse and Cenkos

"Barclays" Barclays Bank PLC

"Board" the board of directors of the Company from time to time

"Business Day" any day on which banks are generally open in England and Wales for the transaction of business, other than a Saturday or Sunday or a public holiday

"Canadian Competition Bureau" the competition bureau of Canada from time to time

"Cenkos" Cenkos Securities plc

"Clawback Placees" subscribers for the Placing Shares which have be conditionally placed with the Initial Placees procured pursuant to the Clawback Placing

"Clawback Placing" the placing of up to 733,333 new Common Shares which have been conditionally placed with the Initial Placees on or before the date of the Prospectus

"Closing Price" the closing middle market quotation as derived from Bloomberg on a particular day

"Common Shares" common shares of no par value in the capital of the Company

"Company" Entertainment One Ltd., a company incorporated under the laws of Canada

"Completion" completion of the Acquisition in accordance with the Acquisition Agreement

"Credit Suisse" Credit Suisse Securities (Europe) Limited

"CREST" the relevant system (as defined in the CREST Regulations) operated by Euroclear in accordance with which securities may be held or transferred in uncertificated form

"Debt Commitment Letter" the letter from J.P. Morgan and Barclays to and acknowledged by the Company dated 6 September 2012 pursuant to which J.P. Morgan and Barclays agreed to act as joint arrangers to (i) obtain the consent of the Existing Lenders required to allow Entertainment One to enter into the Acquisition Agreement (which was obtained on 6 September 2012); (ii) procure the execution of the Amended Facility; and (iii) (in the event that the Amended Facility is not executed by all the Existing Lenders), to provide the New Facility

"Deed Poll" the deed poll executed by the Depository in favour of the holders of the Depository Interests from time to time whereby the Depository Interests will be created and issued

"Depository" Capita IRG Trustees Limited

"Depository Agreement" the agreement between the Company and the Depository under which the Company appoints the Depository to constitute and issue series of Depository Interests

"Depository Interest" depository interests of a particular series issued in uncertificated form from time to time by the Depository on the terms and conditions of the Deed Poll and in accordance with the Regulations, title to which is evidenced by entry on the Depository Interest Register and which represent a particular class of Company securities

"Depository Interest Holders" holders of Depository Interests

"Depository Interest Register" in relation to a particular series of Depository Interests, the register of holders maintained in the United Kingdom on behalf of the Depository by the Depository Interest Registrar

"Depository Interest Registrar" Capital Registrars Limited or such other CREST Registrar who for the time being maintains the Depositary Interest Register

"Directors" the directors of the Company, and "Director" shall mean any one of them

"Enlarged Group" the Entertainment One Group and the Alliance Group as constituted immediately following Completion

"Enlarged Issued Share Capital" the fully diluted Issued Share Capital of the Company immediately following Admission

"Entertainment One" the Company, or should the context so require, Entertainment One (Cayman)

"Entertainment One (Cayman)" Entertainment One Ltd., a company previously registered in the Cayman Islands which continued into Canada and merged with Entertainment One on 15 July 2010

"Entertainment One Group" the Company and its subsidiaries and subsidiary undertakings prior to Completion, excluding the Alliance Group

"Existing Common Shares" the Common Shares or Depository Interests in respect thereof (where the context requires) of the Company in issue as at 5 September 2012

"Existing Facility" the credit and guaranty agreement dated 19 September 2008 (as amended) between certain members of the Group and the Existing Lenders

Existing Lenders" J.P. Morgan Chase Bank N.A., Barclays Bank plc, Toronto - Dominion Bank, Royal Bank of Canada, Alliance & Leicester Commercial Finance PLC, Bank of America, N.A., Canada Branch, US Bank Santander, First California, Royal Bank of Scotland and Bank Leumi

"Form of Proxy" the form of proxy for use at the Special Meeting which is enclosed with the Shareholder Circular

"Form of Direction" the form of direction for use at the Special Meeting which is enclosed with the Shareholder Circular

"FSA" the Financial Services Authority of the United Kingdom

"FSMA" Financial Services and Markets Act 2000, as amended

"Goldman" GSCP VI AA One Holding S.A.R.L and GSCP VI AA One Parallel Holding S.A.R.L

 "Group" the Entertainment One Group as at the date of the Prospectus and, from Completion, the Entertainment One Group and the Alliance Group as constituted immediately following Completion and, for the avoidance of doubt, "Group" includes all of the Company's subsidiaries and subsidiary undertakings from time to time; and "member of the Group" shall be construed accordingly

"Initial Placees" subscribers for the Placing Shares in (i) the firm placing of 65,600,000 new Common shares and (ii) the conditional placing of up to 733,333 new Common Shares (subject to clawback in order to satisfy subscriptions by the Clawback Placees), in each case, by J.P. Morgan Cazenove and Cenkos on behalf of the Company, outside the United States and pursuant to the terms of the Placing Agreement

"ISIN" International Securities Identification Number

"Issued Share Capital" the Common Shares issued in the capital of the Company as at 5 September (being the last practicable date prior to the publication of the Prospectus)

"Joint Bookrunners" J.P. Morgan Cazenove and Cenkos

"J.P. Morgan" J.P. Morgan Chase Bank N.A. and J.P. Morgan Securities LLC

"J.P. Morgan Cazenove" in relation to the Placing, J.P. Morgan Securities plc (which conducts its UK investment banking activities as J.P. Morgan Cazenove), and in relation to the Acquisition, JPML

"Joint Financial Advisers" Credit Suisse and JPML

"JPML" J.P. Morgan Limited

"Lions Gate" a member of the Lions Gate Entertainment Corporation

"London Stock Exchange" London Stock Exchange plc

"Marwyn Investment Managers" Marwyn Value Investors LP (formerly known as Marwyn Neptune Fund LP), Marwyn Investment Management LLP and Marwyn Capital Management Ltd

"Net Proceeds" approximately £96.5 million, being the net proceeds received by the Company from the issue of the Placing Shares under the Placing, after any costs and expenses relating to the Acquisition, Placing or entry into of the Debt Commitment Letter

"New Facility" the new facility arrangement pursuant to the Debt Commitment Letter under which J.P. Morgan and Barclays have agreed, in the event that the Amended Facility is not executed by all Existing Lenders, to provide (i) a revolving credit facility on substantially the same terms and of the same amount as the revolving credit facility provided under the Existing Facility (and will be used to repay the revolving credit facility under the Existing Facility) with a maturity date of the fifth anniversary of the closing of the New Facility (which is expected to be immediately prior to Completion); and (ii) the Term Loan

"Official List" the Official List of the UK Listing Authority

"Placees" subscribers for the Placing Shares (including the Clawback Placing Shares)

"Placing" (i) the firm placing of 72,600,000 new Common Shares with the Initial Placees and the US Placees; and (ii) the conditional placing of 733,333 new Common Shares (subject to clawback in order to satisfy subscriptions by the Clawback Placees) and the Clawback Placing

"Placing Agreement" the placing and underwriting agreement between the Company, J.P. Morgan Cazenove and Cenkos dated 7 September 2012 pursuant to which J.P. Morgan Cazenove and Cenkos agreed, on the terms and subject to the conditions referred to in the Placing Agreement, to act as Joint Bookrunners to the Company in connection with the Placing, and to use their reasonable endeavours to procure investors to acquire the Placing Shares at the Placing Price

"Placing Price" 150.0 pence per Placing Share

"Placing Shares" the 73,333,333 new Common Shares to be issued by the Company pursuant to the Placing and "Placing Share" shall be construed accordingly

"Preferred Variable Voting Shares" preferred variable voting shares in the capital of the Company

"Prospectus" the document published by the Company in connection with the Placing - on or around the same date as this announcement

"Resolutions" the resolutions to be passed by the Shareholders at the Special Meeting to give effect to the Placing as set out in the Shareholder Circular

"Restricted Jurisdiction" each of Australia, Canada, Japan, New Zealand, South Africa and the United States

"Revised Facility" the Amended Facility or the New Facility (as applicable)

 "SDRT" Stamp Duty Reserve Tax

"Securities Act" the United States Securities Act of 1933 (as amended)

"Sellers" affiliates of the Goldman Sachs Group Inc. (being GSCP VI AA One Holding S.A.R.L, GSCP VI AA One Parallel Holding S.A.R.L) and Investissement Québec (being IQ Cinema Inc.)

"Shareholder Circular" the circular to be issued to Shareholders by the Company on 7 September 2012 containing the notice of the Special Meeting

"Shareholders" holders of Common Shares and holders of Preferred Variable Voting Shares, each individually being a "Shareholder"

"Special Meeting" the special meeting of the Company due to take place on 28 September 2012 at 1:00 p.m. (EDT)/6.00 p.m. (BST), notice of which is set out in the Shareholder Circular

"Standards" the "Admission and Disclosure Standards" of the London Stock Exchange

"Term Loan" the CAD$150 million term loan to be provided under the Revised Facility, pursuant to the Debt Commitment Letter which can be utilised by the Company to part fund the Acquisition, pay costs in relation to the Acquisition and, re-finance any existing indebtedness of the Company

"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland

"UK Listing Authority" or "UKLA" the FSA acting in its capacity as competent authority for the purposes of Part VI of FSMA

"Underlying EBITDA" earnings before interest, tax, depreciation, amortisation of intangible assets, one off items and share-based payment charges

"United States" or "US" the United States of America, its territories and possessions, any State of the United States and the District of Columbia

 "US Placees" subscribers for the Placing Shares in (i) the firm placing of 7,000,000 new Common Shares by the Company, in the United States and pursuant to the terms of the Placing Agreement

In this announcement all references to times and dates are a reference to those observed in London, United Kingdom.

APPENDIX 3

TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) AND THE TERMS AND CONDITIONS SET OUT HEREIN (THE "ANNOUNCEMENT") ARE DIRECTED ONLY AT PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE: (A) IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA (THE "EEA"), PERSONS WHO ARE QUALIFIED INVESTORS (each a "qualified investor") AS DEFINED IN SECTION 86(7) OF FSMA, BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2.1(e) OF DIRECTIVE 2003/71/EC AS AMENDED, INCLUDING BY DIRECTIVE 2010/73/EU, AND TO THE EXTENT IMPLEMENTED IN THE RELEVANT MEMBER STATE (THE "PROSPECTUS DIRECTIVE"), AND (B) IF IN THE UNITED KINGDOM, PERSONS WHO FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER") OR ARE PERSONS WHO FALL WITHIN ARTICLE 49(2) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER, AND (C) PERSONS WHO HAVE BEEN INVITED TO PARTICIPATE IN THE PLACING BY THE JOINT BOOKRUNNERS ON BEHALF OF THE COMPANY (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").

THIS ANNOUNCEMENT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.

The securities referred to in thIS Announcement have not been and will not be registered under the the Securities Act or under the securities laws of any State or other jurisdiction of the United States, and may not be offered or sold directly or indirectly in or into the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with the securities laws of any State or any other jurisdiction of the United States. SUBJECT TO CERTAIN EXCEPTIONS, The Placing Shares are being offered and sold ONLY outside the United States in accordance with Regulation S under the Securities Act.

Capitalised terms in this Appendix have the meanings ascribed to them in Appendix 2 (Definitions) above.

This Announcement is for information only and does not itself constitute or form part of an offer to sell or issue or the solicitation of an offer to buy or subscribe for securities referred to herein in any jurisdiction including, without limitation the United States, any other Restricted Jurisdiction or in any jurisdiction where such offer or solicitation is unlawful. No public offering of securities will be made in connection with the Placing in the United Kingdom, the United States, any other Restricted Jurisdiction or elsewhere.

This Announcement and the information contained herein are not for publication or distribution, directly or indirectly, to persons in the United States or any other Restricted Jurisdiction or in any jurisdiction in which such publication or distribution is unlawful. The distribution of this Announcement and the Placing and/or the offer or sale of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken or will be taken by the Company, the Joint Bookrunners, or any of their respective affiliates or agents, which would permit an offer of the Placing Shares or possession or distribution of this Announcement or any other offering or publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons distributing any part of this Announcement must satisfy themselves that it is lawful to do so. Persons (including without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Announcement should seek appropriate advice before taking any action. Persons into whose possession this Announcement comes are required by the Company and the Joint Bookrunners to inform themselves about, and to observe, any such restrictions.

Subject to certain exceptions, the securities referred to in this Announcement may not be offered or sold in any Restricted Jurisdiction or to, or for the account of, a citizen or resident, or a corporation, partnership or other entity created or organised in or under any laws, of a Restricted Jurisdiction.

The Prospectus will not be approved by any securities regulatory authority in Canada nor has any securities regulatory authority in Canada expressed an opinion about these securities, and it is an offence to claim otherwise.

Subject to certain exceptions, the Prospectus will not be distributed in or into the United States or any other Restricted Jurisdiction and the Prospectus will not constitute an offer of Placing Shares to any Restricted Jurisdiction Shareholder.

The securities referred to in this Announcement have not been approved or disapproved by the US Securities and Exchange Commission, any State securities commission or any other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement. Any representation to the contrary is a criminal offence in the United States.

This Announcement has been issued by and is the sole responsibility of the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by the Joint Bookrunners or any of their respective affiliates or agents as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any party or its advisers, and any liability therefore is expressly disclaimed.

J.P. Morgan Cazenove and Cenkos are authorised and regulated by the FSA in the United Kingdom and are acting exclusively for the Company and no one else in connection with the Placing and are not, and will not be, responsible to anyone (including the Placees) other than the Company for providing the protections afforded to their clients or for providing advice in relation to the Placing or the contents of this Announcement or the Prospectus or any other matter referred to therein.

Neither the Company nor the Joint Bookrunners make any representation to any offeree, subscriber or purchaser regarding an investment in the securities referred to in this Announcement under the laws applicable to such offeree, subscriber or purchaser. Each investor should consult its own advisers as to the legal, tax, business, financial and related aspects of an investment in the Placing Shares.

By participating in the Placing, Placees will be deemed to have read and understood the Prospectus and this Announcement in their entirety, and to be participating, making an offer and acquiring Placing Shares on the terms and conditions contained in the Prospectus and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained therein.

In particular, each such Placee represents, warrants and acknowledges that it:

(a) is a Relevant Person and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;

(b) in the case of a Relevant Person in a member state of the European Economic Area which has implemented the Prospectus Directive (each a "Relevant Member State") who acquires any Placing Shares pursuant to the Placing, is a Qualified Investor;

(c) is (and any such account for which it is acting is) outside the United States and is acquiring the Placing Shares in an "offshore transaction", as defined in and in accordance with, Regulation S under the Securities Act;

(d) is acquiring the Placing Shares for its own account or is acquiring the Placing Shares for an account with respect to which it exercises sole investment discretion and has the authority to make, and does make, the acknowledgements, representations and agreements contained in the Prospectus; and

(e) understands (or, if it is acting for the account of another person, such person has confirmed that such person understands) the resale and transfer restrictions set out in the Prospectus.

1. Introduction

The Company is proposing to undertake the Placing to raise approximately £110 million (approximately CAD$175.7 million) through the issue of 73,333,333 Placing Shares at a Placing Price of 150.0 pence per Placing Share (being approximately £96.5 million (approximately CAD$154.2 million) after costs and expenses relating to the Acquisition, the Placing and the Debt Commitment Letter). The Placing Price represents a discount of 3.54 per cent. to the Closing Price of 155.5 pence per Common Share on 5 September 2012 (being the last practicable date prior to the date of the Prospectus). The Placing (other than the placing by the Company of up to 7,000,000 Placing Shares to US Placees) is being underwritten by J.P. Morgan Cazenove pursuant to the Placing Agreement. A summary of the Placing Agreement will be set out in the Prospectus.

Certain institutional placees have entered into binding placing letters with the Company or the Joint Bookrunners, as agents for the Company, as the case may be, pursuant to which they have committed, conditional upon the Placing Agreement becoming unconditional in all respects and not having been terminated, to subscribe for an aggregate of up to 73,333,333 Placing Shares. Up to 66,333,333 of these Placing Shares have been placed with the Initial Placees subject to clawback in order to satisfy subscriptions by the Clawback Placees who, following announcement of the Placing will be invited to subscribe for such Placing Shares, and for those Placing Shares not allotted to the Initial Placees at the Placing Price.

2. The Clawback Placing

A summary of the arrangements and terms and conditions of the Clawback Placing are set out below. The formal terms and conditions of the Clawback Placing will be set out in the Prospectus. The attention of those persons invited to subscribe is drawn to paragraph 5 of this Appendix 3 and the Prospectus which gives details of the procedure for application and payment for the Placing Shares by the Clawback Placees.

The Placing Shares are in registered form and can be held in certificated or uncertificated form as Depositary Interests via CREST. Depositary Interests in respect of Existing Common Shares are already admitted to CREST. Accordingly, no further application for admission to CREST is required for the Depositary Interests in respect of the Placing Shares as the Placing Shares will be issued under the current ISIN and will rank pari passu. All Depositary Interests in respect of the Placing Shares when issued and fully paid, will be held and transferred by means of CREST. The aggregate number of Placing Shares allotted to the Clawback Placees available will not exceed 733,333.

Application will be made to the UK Listing Authority for the Placing Shares to be admitted to trading on the London Stock Exchange's Main Market for listed securities. It is expected that Admission to the standard segment of the Official List will take place and that dealings in the Placing Shares will commence at 8.00 a.m. (BST) on 1 October 2012.

3. Participation in the Clawback Placing

Participation in the Clawback Placing will only be available to persons who are invited to subscribe for Placing Shares and who may lawfully be, and are, invited to participate.

The number of Placing Shares to be issued pursuant to the Clawback Placing will be agreed between the Joint Bookrunners and the Company following completion of the Clawback Placing but in any event will be no more than 733,333. Each Clawback Placee will be required to pay an amount equal to the Placing Price in respect of each Placing Share issued to it.

Any Clawback Placee who participates in the Clawback Placing in accordance with the procedures to be set out in the Prospectus will be deemed to make the representations and warranties contained in the Prospectus and which are set out for information in paragraph 5 of this Appendix 3. 

4. Conditions and Further Terms of the Clawback Placing

The Placing is conditional, amongst other things, upon the following:

·; the passing of the Resolutions (without amendment) to be proposed at the Special Meeting;

·; Admission of the Placing Shares becoming effective by not later than 8.00 a.m. (BST) on 1 October 2012 (or such later time as the Joint Bookrunners may agree being not later than the seventh day following the Special Meeting);

·; the Acquisition Agreement remaining in full force and effect, and having not lapsed or terminated prior to Admission; and

·; the warranties in the Placing Agreement remaining true, accurate and not misleading.

In the event that the Placing Agreement does not become unconditional or is terminated in accordance with its terms, for example, if the Resolutions are not passed or in the event of a material adverse change in relation to the Company or in relation to Alliance (provided, in respect of Alliance, that this gives rise to a termination right under the Acquisition Agreement), the Placing will lapse.

The Placing is not conditional upon Completion. Therefore, subject to the conditions to the Placing being satisfied and the Placing Agreement not being terminated, Admission will become effective and the Net Proceeds will be collected, before Completion. If one or more conditions to the Acquisition do not occur, the Directors intend that some or all of the Net Proceeds will be returned to Shareholders, in accordance with applicable Canadian law (including the satisfaction of any applicable solvency tests under Canadian corporate law) and by a mechanism that the Company considers most efficient from a taxation perspective. The Company expects that some or all of the Net Proceeds will be returned in cash, for example by way of a special dividend which would be payable to Shareholders (other than those who elect to waive their respective rights) pro rata to their holdings of Common Shares, or by way of a substantial issuer bid involving the buy-back and cancellation of certain Common Shares, in which all Shareholders would be eligible to participate pro rata to their holdings.

If (i) any of the conditions contained in the Placing Agreement are not fulfilled or are waived by the Joint Bookrunners by 8.00 a.m. (BST) on the date of Admission, (ii) any such condition becomes incapable of being fulfilled or (iii) the Placing Agreement is terminated in the circumstances specified below, the Placing in relation to the Placing Shares will lapse and the Placee's rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.

The Joint Bookrunners may, at their discretion, waive compliance by the Company with the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement, save that the conditions in relation to Admission, approval and publication of the Prospectus, and the passing of the Resolutions may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in the Prospectus.

The Joint Bookrunners are entitled, at any time before Admission, to terminate the Placing Agreement in accordance with its terms, including in the event that any of the conditions to the Placing Agreement have not been satisfied or waived. By participating in the Placing, Placees agree that the Joint Bookrunners have absolute discretion as to the enforcement of (i) any obligations, undertakings, representations and warranties of the Company in the Placing Agreement, (ii) the termination of their obligations under the Placing Agreement and (iii) the making of any amendments thereto, and that the Joint Bookrunners shall have no obligation to consult with or notify the Placees and shall have no responsibility or liability to the Placees in relation to the exercise of such discretion.

5. Procedure for Application and Payment

To participate in the Clawback Placing, prospective Clawback Placees will be invited to communicate their offer by telephone to their usual sales contact at Cenkos or J.P. Morgan Cazenove, unless otherwise instructed. Each offer should state the number of Placing Shares which the prospective Clawback Placee wishes to acquire at the Placing Price. An offer in the Clawback Placing will be made on the terms and subject to the conditions in the Prospectus and will be legally binding on the prospective Clawback Placee on behalf of which it is made and, except in certain circumstances, will not be capable of variation or revocation after the time at which it is submitted. Each Clawback Placee will have an immediate, separate, irrevocable and binding obligation to pay in cleared funds a sterling amount equal to the product of the Placing Price and the number of Placing Shares such Clawback Placee has agreed to acquire and the Company has agreed to allot.

The Clawback Placing is expected to close no later than 8.00 a.m. (BST) on the Business Day immediately following the date of publication of the Prospectus but may be closed earlier or later as agreed between the Company and the Joint Bookrunners. The Company and the Joint Bookrunners reserve the right to reduce the amount to be raised pursuant to the Clawback Placing, in their absolute discretion. All obligations under the Clawback Placing will be subject to the conditions referred to above.

By participating in the Clawback Placing, each Clawback Placee (and any person acting on such Clawback Placee's behalf) will in accordance with the terms and conditions to be set out in the Prospectus:

(a) represent and warrant that he has read and accepted the terms and conditions of the Placing set out in the Prospectus and that its acquisition of Placing Shares is subject to and based upon all the terms, conditions, representations, warranties and other information contained therein;

(b) represent, warrant, acknowledge and agree that: (i) he has made his own assessment of the Placing Shares and has relied on his own investigation of the business, financial or other position of the Company in accepting a participation in the Clawback Placing; (ii) neither the Joint Bookrunners nor any of their respective affiliates or any person acting on behalf of any of them has provided, or will provide Clawback Placees, with any material regarding the Placing Shares; and (iii) he has not requested the Joint Bookrunners, the Company or any of their respective affiliates or any person acting on behalf of any of them to provide him with any such information;

(c) acknowledge and agree that the Prospectus is exclusively the responsibility of the Company, and that neither the Joint Bookrunners nor any of their respective affiliates nor any person acting on behalf of any of them has or shall have any liability for any information, representation or statement contained in the Prospectus or any information previously published by or on behalf of the Company or any other written or oral information made available to or publicly available or filed information or any representation, warranty or undertaking relating to the Company, and will not be liable for any Clawback Placee's decision to participate in the Clawback Placing based on any information, representation, warranty or statement contained in the Prospectus or otherwise, provided that nothing in this paragraph shall exclude any liability of any person for fraud;

(d) represent, warrant, acknowledge and agree that the only information on which the Clawback Placee has relied in committing itself to acquire the Placing Shares is contained in the Prospectus, and that he has neither received nor relied on any information given or representations, warranties or statements made by the Joint Bookrunners or the Company or any of their affiliates or any person acting on behalf of any of them and neither the Joint Bookrunners nor the Company nor any of their affiliates nor any person acting on behalf of any of them will be liable for any Clawback Placee's decision to accept an invitation to participate in the Clawback Placing based on any other information, representation, warranty or statement;

(e) represent and warrant that he: (i) is entitled to acquire the Placing Shares under the laws of all relevant jurisdictions; (ii) has fully observed such laws; (iii) has the requisite capacity and authority and is entitled to enter into and to perform its obligations as an acquirer of Placing Shares and will honour such obligations; and (iv) has obtained all necessary consents and authorities (including, without limitation, in the case of any person on whose behalf he is acting, all necessary consents and authorities to agree to the terms set out or referred to in the Prospectus) to enable him to enter into the transactions contemplated hereby and to perform its obligations in relation thereto;

(f) represent and warrant that he is not, and at the time the Placing Shares are acquired will not be, a resident of or located in any Restricted Jurisdiction, and acknowledges and agrees that the Placing Shares have not been and will not be registered or otherwise qualified under the securities legislation of any Restricted Jurisdiction and, subject to certain exceptions, may not be offered, sold, or acquired, directly or indirectly, within those jurisdictions;

(g) acknowledge that the Placing 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, nor approved or disapproved by the United States Securities and Exchange Commission, any state securities commission in the United States or any other United States regulatory authority, and agrees not to reoffer, resell, pledge or otherwise transfer the Placing Shares except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States;

(h) represent and warrant that he is not located in the United States and is purchasing the Placing Shares in an "offshore transaction" within the meaning of Regulation S under the Securities Act and represents and warrants that he is not acting for the account or benefit of a person located within the United States or any other Restricted Jurisdiction;

(i) represent and warrant that he is not acquiring any Placing Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Placing Shares into the United States, any other Restricted Jurisdiction or into any jurisdiction in which it is unlawful to make such offer;

(j) represent and warrant that he is not subscribing for any Placing Shares as a result of any "directed selling efforts" as defined in Regulation S under the Securities Act;

(k) represent and warrant that he has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Placing Shares, will not look to the Joint Bookrunners for all or any part of any such loss he may suffer, is able to bear the economic risk of an investment in the Placing Shares, is able to sustain a complete loss of the investment in the Placing Shares and has no need for liquidity with respect to his participation in the Clawback Placing;

(l) represent and warrant that, if it is a pension fund or investment company, its purchase of the Placing Shares is in full compliance with all applicable laws and regulations;

(m) represent and warrant that the allocation, allotment, issue and delivery to him, or the person specified by him for registration as a holder of Placing Shares, will not give rise to a stamp duty or stamp duty reserve tax liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services) and that he, or the person specified by him for registration as a holder of Placing Shares, is not participating in the Clawback Placing as nominee or agent for any person or persons to whom the allocation, allotment, issue or delivery of Placing Shares would give rise to such a liability;

(n) acknowledge that he, or the person specified by him for registration as a holder of Placing Shares, will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto), if any, payable on acquisition of any of the Placing Shares;

(o) represent and warrant that he is a person of a kind described in (i) article 19(5) (Investment professionals) and/or 49(2) (High net worth companies etc.) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended; and (ii) section 86(7) of FSMA. For such purposes, he undertakes that he will acquire, hold, manage and (if applicable) dispose of any Placing Shares that are allocated to him for the purposes of its business only;

(p) represent and warrant that he has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom prior to Admission, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of FSMA;

(q) represent and warrant that he is a qualified investor as defined in section 86(7) of FSMA, being a person falling within Articles 2.1(e) of the Prospectus Directive;

(r) represent and warrant that he has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person and he acknowledges and agrees that the Prospectus is not being issued by the Joint Bookrunners in their capacity as an authorised person under section 21 of FSMA and they may not therefore be subject to the controls which would apply if they were made or approved as financial promotions by an authorised person;

(s) represent and warrant that he has complied and will comply with all applicable provisions of FSMA with respect to anything done by him in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;

(t) represent and warrant that he will (or will procure that his nominee will) if applicable, make notification to the Company of its interests in its Common Shares in accordance with Chapter 5 of the Disclosure and Transparency Rules;

(u) represent and warrant that he has not offered or sold and will not offer or sell any Placing Shares to persons in the European Economic Area prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the European Economic Area within the meaning of the Prospectus Directive;

(v) if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, represent and warrant that the Placing Shares acquired by it in the Clawback Placing 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 any Relevant Member State, or in circumstances in which the prior consent of the Joint Bookrunners has been given to the offer or resale;

(w) represent and warrant that he has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2003 and the Money Laundering Regulations 2003 and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by him to verify the identity of the third party as required by such regulations;

(x) undertake that he and any person on whose behalf he is acting will make payment for the Placing Shares allocated to him in accordance with the terms set out in the Prospectus;

(y) acknowledge and agree that none of the Joint Bookrunners nor any of their respective affiliates nor any person acting on behalf of any of them, is making any recommendations to him, advising him regarding the suitability of any transactions he may enter into in connection with the Clawback Placing and that participation in the Clawback Placing is on the basis that he is not and will not be a client of the Joint Bookrunners and that the Joint Bookrunners have no duties or responsibilities to him for providing the protections afforded to his respective clients or customers or for providing advice in relation to the Clawback Placing;

(z) undertake that the person specified by him for registration as a holder of the Placing Shares will be: (i) himself; or (ii) his nominee, as the case may be, and acknowledge and agree that: (a) none of the Joint Bookrunners nor the Company nor any of their respective affiliates nor any person acting on behalf of them will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement; and (b) he and any person on whose behalf he is acting agree to participate in the Clawback Placing and agrees to indemnify the Company and the Joint Bookrunners in respect of the same on the basis that the Placing Shares (in the form of Depositary Interests) will be allotted to the CREST stock account of Cenkos who will hold them as nominee on behalf of the relevant Clawback Placee until settlement in accordance with its standing settlement instructions;

(aa) acknowledge and agree that the Company and the Joint Bookrunners and their respective affiliates and others will rely upon the truth and accuracy of the foregoing agreements, acknowledgements, representations and warranties which are given to the Company or the Joint Bookrunners, on their own behalf and on behalf of the Company, as the case may be;

(bb) undertake to vote (either in person or by proxy) any Existing Common Shares held by him on the date of the Prospectus in favour of the Resolutions being proposed at the Special Meeting; and

(cc) agree to indemnify and hold the Company and the Joint Bookrunners, their respective affiliates and any other person acting on behalf of them harmless 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 agreements, acknowledgements, representations, warranties and undertakings in the Prospectus.

6. Admission, Settlement and Dealings

The result of the Placing is expected to be announced on or around the date of the Prospectus. Applications will be made to the UKLA for the Placing Shares to be admitted to listing on the standard segment of the Official List and to the London Stock Exchange for the Placing Shares to be admitted to trading on the London Stock Exchange's Main Market for listed securities. It is expected that Admission will become effective and that dealings in the Placing Shares, fully paid, will commence at 8.00 a.m. (BST) on 1 October 2012.

The Depository Interests in respect of the Existing Common Shares are already admitted to CREST. No further application for admission to CREST is accordingly required for the Depository Interests in respect of the Placing Shares. All such shares, when issued and fully paid, may be held and transferred by means of CREST.

Each Clawback Placee allocated Placing Shares in the Clawback Placing will be sent a trade confirmation, stating the number of Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Clawback Placee and settlement instructions. Each Clawback Placee agrees 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.

7. Times and Dates

The Company shall after consultation with the Joint Bookrunners, be entitled to amend the commencement date of the Clawback Placing or amend or extend the latest date for acceptance of offers under the Clawback Placing and all related dates set out in this Appendix 3 and the Prospectus and in such circumstances shall notify the UKLA, and make an announcement on a Regulatory Information Service approved by the UKLA.

If a supplementary prospectus is published by the Company two or fewer Business Days prior to the latest time and date for acceptance and payment in full under the Clawback Placing specified in the Prospectus, the latest date for acceptance under the Clawback Placing shall be extended to the date that is at least three Business Days after the date of publication of the supplementary prospectus (and the dates and times of principal events due to take place following such date shall be extended accordingly).

8. Taxation

Certain statements regarding United Kingdom and Canadian taxation in respect of the Placing will be set out in the Prospectus. Clawback Placees who are in any doubt as to their tax position in relation to participating in the Clawback Placing, or who are subject to tax in any jurisdiction other than the United Kingdom or Canada, should immediately consult a suitable professional adviser.

9. Governing Law and Jurisdiction

The terms and conditions of the Clawback Placing as set out in the Prospectus and any non-contractual obligation related thereto shall be governed by, and construed in accordance with, English law. The courts of England and Wales are to have exclusive jurisdiction to settle any dispute which may arise out of or in connection with the Placing or the Prospectus. By participating in the Clawback Placing in accordance with the instructions set out in the Prospectus the Clawback Placees irrevocably submit to the jurisdiction of the courts of England and Wales and waive any objection to proceedings in any such court on the grounds of venue or on the grounds that proceedings have been brought in an inconvenient forum.