FAP.L Regulatory News (FAP)

21 Oct 2005 17:48

Faupel PLC21 October 2005 MMR Limited 21 October 2005 Not for release, distribution or publication in or into or from the USA, Canada,Australia, South Africa, the Republic of Ireland or Japan Recommended Cash Offer by RSM Robson Rhodes LLP on behalf of Max Money Resources Limited ("MMR") for Faupel Plc ("Faupel") Introduction The Independent Directors of Faupel and the Board of MMR are pleased to announcethat agreement has been reached on the terms of a recommended cash offer to bemade by RSM Robson Rhodes LLP, on behalf of MMR, to acquire the entire issuedand to be issued share capital of Faupel not already held by MMR. The Offer • The Offer is 25 pence in cash for each Faupel Share, valuing the existing issued share capital of Faupel at approximately £3.93 million. TheOffer represents a premium of 72.4% to yesterday's closing price of 14.5 penceper Faupel Share. • MMR is a private company which is currently the holder ofapproximately 20.1% of Faupel's issued share capital. Laurence Mead, chiefexecutive of Faupel, is a shareholder and director of MMR. • Irrevocable undertakings to accept the Offer have been receivedfrom shareholders representing 60.93% of Faupel's existing issued share capital. Commenting on the acquisition Laurence Mead, Director of MMR, said: "We are pleased to announce this offer today which we believe represents a veryattractive price for Faupel Shareholders. We believe that whilst Faupel is asound business its performance will be greatly enhanced as a private companywhere it will not have to bear the costs associated with being quoted and as aleaner organisation it will be more able to adapt to the rapidly changing retailmarketplace." Commenting on behalf of the Board of Faupel, David Newbigging, Chairman ofFaupel, said: "The offer price of 25 pence per share represents a substantial premium to thecurrent share price. The Independent Directors of Faupel believe that,notwithstanding the recent restructuring of the Company and the refocusing ofits operations, the size of the Company and the likely period of time before theresumption of dividend payments mean that any improvement in profitability maynot be reflected in its share price within the foreseeable future. As such, weare recommending Faupel Shareholders to accept the offer and crystallise theirinvestment in the Company." This summary should be read in conjunction with the full text of the followingannouncement including Appendix I where the conditions of the Offer are set out,Appendix II which contains details of the Loan Notes and Appendix III whichcontains definitions of certain terms used in this summary and the followingannouncement. Enquiries Laurence Mead .................... 07810 658748(MMR) RSM Robson Rhodes LLP .................... 020 7865 2341(Financial Adviser to MMR) Martin GibbsSamantha Harrison Faupel PlcDavid Newbigging (Chairman) .................... 020 7550 3663 Bridgewell Securities Limited .................... 020 7003 3000(Financial Adviser to Faupel)Nick Lovering RSM Robson Rhodes LLP, which is regulated in the UK by the Financial ServicesAuthority, is acting exclusively for MMR Limited and for no one else inconnection with the Offer and will not be responsible to anyone other than MMRLimited for providing the protections afforded to customers of RSM Robson RhodesLLP or for giving advice in relation to the Offer. Bridgewell, which is regulated in the UK by the Financial Services Authority, isacting exclusively for Faupel Plc and for no one else in connection with theOffer and will not be responsible to anyone other than Faupel Plc for providingthe protections afforded to customers of Bridgewell or for giving advice inrelation to the Offer. This press announcement does not constitute an offer or invitation to purchaseany securities or a solicitation of an offer to buy any securities, pursuant tothe Offer or otherwise. The Offer will be made solely by means of the OfferDocument and the Form of Acceptance accompanying the Offer Document, which willcontain the full terms and conditions of the Offer, including details of how theOffer may be accepted. The Offer Document and Form of Acceptance accompanying the Offer Document willbe made available to all Faupel Shareholders at no charge to them. FaupelShareholders are advised to read the Offer Document and the accompanying Form ofAcceptance when they are sent to them because they will contain importantinformation. This announcement and the Offer (including the Loan Note Alternative referred toin this announcement) are not being made and will not be made, directly orindirectly, in or into, or by use of the mails or by any means orinstrumentality (including, without limitation, telephonically orelectronically) of interstate or foreign commerce of, or by any facilities of, anational, state or other securities exchange of the USA, Canada, Australia,South Africa, the Republic of Ireland or Japan or any other jurisdiction if todo so would constitute a violation of the relevant laws of such jurisdiction,and the Offer (including the Loan Note Alternative) cannot be accepted by anysuch use, means or instrumentality or otherwise from or within the USA, Canada,Australia, South Africa, the Republic of Ireland or Japan or any other suchjurisdiction. Accordingly, this announcement, the Offer Document and the Form ofAcceptance or any accompanying document are not being, and must not be, directlyor indirectly, mailed or otherwise distributed or sent in or into or from theUSA, Canada, Australia, South Africa, the Republic of Ireland or Japan or anyother such jurisdiction. The Loan Notes to be issued pursuant to the Offer have not been, and will notbe, registered under the United States Securities Act of 1933 (as amended) orunder any of the securities laws of any State or other jurisdiction of theUnited States and no prospectus in relation to the Loan Notes has been or willbe filed or registration made under any securities laws of Canada in connectionwith the issue of Loan Notes in any jurisdiction in Canada, nor has a prospectusin relation to the Loan Notes been lodged with or registered by the AustralianSecurities and Investment Commission, nor have any steps been taken, nor willany steps be taken, to enable the Loan Notes to be offered in compliance withthe applicable securities laws of South Africa, the Republic of Ireland or Japanor any jurisdiction outside the United Kingdom. Accordingly, unless anexemption under relevant securities laws is applicable the Loan Notes may not beoffered, sold, delivered or transferred, directly or indirectly, in or into theUSA, Canada, Australia, South Africa, the Republic of Ireland or Japan or anyother jurisdiction if to do so would constitute a violation of the relevant lawsof such jurisdiction or to or for the benefit of any US persons (as defined inRegulation S under the United States Securities Act of 1933 (as amended)) orresidents of Canada, Australia, South Africa, the Republic of Ireland or Japanor any other jurisdiction if to do so would constitute a violation of therelevant laws of such jurisdiction. Not for release, distribution or publication in or into or from the USA, Canada,Australia, South Africa, the Republic of Ireland or Japan 21 October 2005 Recommended Cash Offer by RSM Robson Rhodes LLP on behalf of Max Money Resources Limited ("MMR") for Faupel Plc ("Faupel") 1. Introduction The Independent Directors of Faupel and the Board of MMR are pleased to announcethat agreement has been reached on the terms of a recommended cash offer to bemade by RSM Robson Rhodes LLP, on behalf of MMR, to acquire the entire issuedand to be issued share capital of Faupel not already owned by MMR. 2. Terms of the Offer On behalf of MMR, RSM Robson Rhodes LLP will offer to acquire, on the terms andsubject to the conditions set out or referred to in this announcement and to beset out or referred to in the Offer Document and in the Form of Acceptance, theentire issued and to be issued ordinary share capital of Faupel, other than the3,150,000 Faupel Shares already owned by MMR, on the following basis: for each Faupel Share 25 pence in cash The Offer will value the existing issued ordinary share capital of Faupel atapproximately £3.93 million. The Offer represents a premium of approximately: • 72.4 per cent. to yesterday's Closing Price of 14.5 pence perFaupel Share • 78.6 per cent. to the average Closing Price of 14 pence perFaupel Share over the three month period ending yesterday, 20 October 2005 There is a limited Loan Note Alternative, details of which are set out below. The Offer will extend to Faupel Shares unconditionally allotted or issued whilstthe Offer remains open for acceptance (or until such earlier date as MMR may,subject to the Code, determine), including any Faupel Shares which areunconditionally allotted or issued and fully paid pursuant to the exercise ofoptions granted under the Faupel Share Option Schemes. The First Closing Date of the Offer will be 21 days after posting of the OfferDocument. It is a term of MMR's financing arrangements for the Offer that thedate for acceptance of the Offer must not be extended beyond a further 7 daysafter that date without the prior written consent of Burdale Financial Limited("Burdale"). The Faupel Shares will be acquired pursuant to the Offer by, or on behalf of,MMR fully paid up with full title guarantee, free from all liens, equities,mortgages, charges, encumbrances, rights of pre-emption and other third partyrights and interests of any nature whatsoever and together with all rights nowor hereafter attaching thereto, including all voting rights and the right toreceive and retain all dividends and other distributions announced, declared,made or paid on or after the date of this announcement. The Offer will be subject to the conditions and further terms set out inAppendix I to this announcement and to those terms which will be set out in theOffer Document and in the accompanying Form of Acceptance, and such furtherterms as may be required to comply with the rules and regulations of theFinancial Services Authority and the Code. David Newbigging, Stephen Redfarn, Peter Hawthorn Daniel Sweeney and MichaelMolloy are deemed to be the Independent Directors for the purposes ofconsidering and recommending the Offer. Laurence Mead is not independent due tohis involvement with MMR and Robin Hows is not considered to be independent ashis employment will continue with Faupel after the Offer has become or isdeclared wholly unconditional. 3. Background to the Offer and reasons for recommendation Over the last three years Faupel has undergone a period of restructuring inorder to stem losses by driving down stock levels and refocusing the business onhigher margin operations. The Independent Directors believe that significantprogress has been made, with the relocation of the warehousing andadministrative functions, the merger of the three home furnishing brands and thesale or closure of three loss making businesses. However, furtherrationalisation is still required. In the Company's audited financialstatements for the year ended 31 March 2005, Faupel remained loss-making at thepre-tax level. Whilst the changes made in recent years should yield positive results over thelonger term, the Independent Directors believe that Faupel Shareholders may haveto wait some time to benefit from these initiatives and to see a resumption ofdividends, particularly given the costs of maintaining a stock exchange listing.Furthermore, the Company's market capitalisation remains very small, and theIndependent Directors believe that the lack of liquidity in shares of companiesof this size and the reluctance of certain institutional shareholders to investin them, mean that there is no guarantee that a return to profitability wouldresult in a significant re-rating of Faupel Shares. In addition, the IndependentDirectors believe that it will continue to be very difficult for the Company toincrease its size materially through acquisition and in so doing address theseissues. This is due to the difficulty in securing financing for an acquisitionand the high associated costs. The Independent Directors have carefully considered the prospects for Faupel asa publicly quoted company and have concluded the terms of the Offer to be fairand reasonable. The Offer affords Faupel's Shareholders the opportunity toreceive cash for their Faupel Shares at a significant premium to the level atwhich the shares have traded recently. The Independent Directors recognise thehigh costs of maintaining a listing relative to the size of Faupel and believethat the price per Faupel Share under the Offer takes account of the significantcost savings that could be made if the listing was relinquished. 4. The recommendation of the Independent Directors of Faupel The Independent Directors, who have been so advised by Bridgewell, consider theterms of the Offer to be fair and reasonable. In providing advice to theIndependent Directors, Bridgewell has taken into account the commercialassessments of the Independent Directors. Accordingly, the Independent Directors will unanimously recommend that FaupelShareholders accept the Offer, as they have irrevocably undertaken to do inrespect of their entire beneficial holdings amounting to, in aggregate,7,982,548 Faupel Shares (which for this purpose includes shares held by relatedtrusts or family members in relation to which the Independent Directors haveirrevocably undertaken to procure acceptance of the Offer), which representapproximately 50.81 per cent. of the existing issued share capital of Faupel. 5. Irrevocable undertakings to accept the Offer As noted above, the Independent Directors have irrevocably undertaken to accept,or to procure the acceptance of, the Offer in respect of a total of 7,982,548Faupel Shares (which for this purpose includes shares held by related trusts andfamily members), representing approximately 50.81 per cent. of the issued sharecapital of Faupel. These irrevocable undertakings will continue to be binding inthe event of a higher offer being made for Faupel Shares by a competing party. Robin Hows, a director of Faupel, has irrevocably undertaken to accept, or toprocure the acceptance of, the Offer in respect of 14,446 Faupel Shares (whichfor this purpose includes shares held by related trusts and family members),representing approximately 0.09 per cent. of the issued share capital of Faupel.This irrevocable undertaking will continue to be binding in the event of ahigher offer being made for Faupel Shares by a competing party. In addition, MMR has received an irrevocable undertaking from one other FaupelShareholder to accept the Offer in respect of a further 1,575,000 Faupel Shares,representing approximately 10.03 per cent. of the issued share capital ofFaupel. This irrevocable undertaking will continue to be binding in the event ofa higher offer being made for Faupel Shares by a competing party. Accordingly, and subject to the terms summarised above, MMR has receivedirrevocable undertakings to accept, or procure the acceptance of, the Offer inrespect of a total of 9,571,994 Faupel Shares representing in aggregateapproximately 60.93 per cent. of the issued share capital of Faupel. 6. The Loan Note Alternative Faupel Shareholders (other than certain overseas shareholders) who validlyaccept the Offer may elect to receive Loan Notes instead of all or part of thecash consideration to which they would otherwise be entitled on the followingbasis: for every £1 of cash consideration under the Offer £1 nominal of Loan Notes The Loan Note Alternative is conditional on the Offer becoming or being declaredunconditional in all respects. Shareholders considering electing to accept the Loan Note Alternative shouldconsult their independent financial advisor before making any such election. As detailed below some of the Faupel directors have elected to accept the LoanNote Alternative up to the maximum nominal amount of Loan Notes available forelection by Faupel Shareholders which is £567,241. In the event of elections forthe Loan Note Alternative exceeding this maximum, the allocation of Loan Notesto Stephen Redfarn, Peter Hawthorn, Daniel Sweeney and Michael Molloy will bescaled down accordingly. The Loan Notes, which will be governed by English Law,will be issued, credited as fully paid, in amounts and integral multiples of £1nominal amounts. Fractional entitlements will be disregarded. The Loan Notes will be unsecured obligations of MMR. However, shareholder loansto MMR will be subordinated to the Loan Notes. RSM Robson Rhodes estimatesthat, based on market conditions on 20 October 2005 (the last practicable dateprior to the date of this announcement), in its opinion, if the Loan Notes hadbeen in issue on that date, the value of each £1 nominal would not have exceeded90 pence. The Loan Notes will bear interest (subject to any requirement to deduct taxtherefrom) for the six month period beginning from the first date of issue atLIBOR and thereafter at LIBOR plus 4 per cent. Interest on the Loan Notes willbe payable in arrears on redemption of the Loan Notes. The Loan Notes will not be transferable and no application will be made for theLoan Notes to be listed, traded or dealt in on any stock exchange. The Loan Notes will be redeemable in cash at par (together with any accruedinterest subject to any requirement to deduct tax therefrom) at MMR's option inpart or in whole at any time after the expiry of six months following the firstdate of issue. Any Loan Notes not previously redeemed will be repaid in cash atpar (together with any accrued interest subject to any requirement to deduct taxtherefrom) on the first anniversary of the first date of issue. Further details of the Loan Notes are set out in Appendix II to thisannouncement. The Loan Note Alternative will remain open for acceptance until 1.00 pm on theFirst Closing Date. However, the right is reserved to keep the Loan NoteAlternative open for acceptance after such date. The right is also reserved toclose the Loan Note Alternative without prior notice on any closing date onwhich the Offer is neither unconditional as to acceptances nor capable of beingdeclared to be unconditional as to acceptances and to reintroduce the Loan NoteAlternative at any time. Independent Directors' intentions with regard to the Loan Note Alternative Stephen Redfarn, Peter Hawthorn, Daniel Sweeney and Michael Molloy haveirrevocably undertaken to accept or procure acceptance of the Loan NoteAlternative in respect of part of their respective holdings of ordinary sharesin Faupel (which for this purpose includes shares held by related trusts andfamily members), as follows: • Stephen Redfarn has elected to receive Loan Notes with a nominal valueof £335,819; • Peter Hawthorn has elected to receive Loan Notes with a nominal valueof £71,888; • Daniel Sweeney has elected to receive Loan Notes with a nominal valueof £78,003; and • Michael Molloy has elected to receive Loan Notes with a nominal valueof £81,531. David Newbigging has elected not to accept the Loan Note Alternative. The total quantum of the above described elections for the Loan Note Alternativeis £567,241, which is the maximum nominal amount of Loan Notes available forelection by Faupel Shareholders. In the event of elections for the Loan NoteAlternative exceeding this maximum, the allocation of Loan Notes to StephanRedfarn, Peter Hawthorn, Daniel Sweeney and Michael Molloy will be scaled downaccordingly. 7. Information on Faupel Faupel comprises three divisions. The largest division is Faupel HomeFurnishings which designs, sources and distributes quality home furnishingsproducts for the UK retail market. Products include bedding, towels, cushions,curtains, table linen and Christmas decorations. The other two divisions are theGarments division, which is involved in branded garments, and Faupel Safety andIndustrial Products which supplies personal protective equipment, hand tools forthe construction sector and in-cabin textile products for the airline industry. In the year ended 31 March 2005, according to Faupel's audited financialstatements, Faupel recorded a loss on ordinary activities before taxation of£52,000 (2004: loss £18,000) on turnover of £24,607,000 (2004: £24,892,000), andat that date had net assets of £4,237,000 (2004: £4,289,000). 8. Information on MMR MMR is a private limited company which was formed in 2001 and is registered inthe Territory of the British Virgin Islands. Laurence Mead owns 40% of theissued share capital of MMR. The other two shareholders in MMR are Chih ChungChiang and George Chiang, business associates of Laurence Mead who own andoperate the Oriental Max Group which is a large shoe manufacturing business insouthern China. In November 2001, shortly before Laurence Mead became ChiefExecutive of Faupel, MMR subscribed for 3,000,000 ordinary shares in Faupel. On2 October 2003, MMR purchased a further 150,000 Faupel Shares and it now holds3,150,000 Faupel Shares representing 20.1% of Faupel's issued share capital. MMRhas to date existed solely to hold the shares in Faupel and it has never traded. 9. Financing of the Offer The financing of the Offer is being made available to MMR from financingarranged with Burdale. Burdale is an asset based lender, which, specialises inproviding and structuring debt secured against all assets of a business,including for example, stocks, debtors, land and buildings and plant. Burdalecan provide facilities between £5 and £200 million. Established in the UK in1992, Burdale became a member of the Bank of Ireland Group in January 2005. Alldebt funding is provided by the Bank of Ireland. The Bank of Ireland Group has €126 billion of assets. Full acceptance of the Offer, having regard to the undertakings from StephenRedfarn, Peter Hawthorn, Daniel Sweeney and Michael Molloy to take up the LoanNote Alternative up to the maximum of £567,241 in nominal value of Loan Notes,would result in a cash payment of approximately £2.57 million being payable byMMR to Faupel Shareholders who validly accept the Offer. RSM Robson Rhodes is satisfied that sufficient resources are available for MMRto satisfy the consideration payable as a result of full acceptance of theOffer. 10. Directors, Management and Employees The Board of MMR has given assurances to the Independent Directors that it will,following the Offer becoming or being declared unconditional in all respects,safeguard the existing employment rights of all of the employees of the FaupelGroup. All of the directors of Faupel, with the exception of Laurence Mead, have agreedto resign from the board of Faupel upon the Offer becoming or being declaredunconditional in all respects. No payment other than for accrued directors' feesand expenses will become payable as a result of their resignation. The existing service contract Laurence Mead, Chief Executive, will continueunchanged if the Offer becomes or is declared wholly unconditional. If theOffer is declared wholly unconditional, Robin Hows will remain as an employee ofFaupel on the terms of his current contract save that he will resign as adirector of Faupel. 11. Faupel Share Option Schemes Appropriate proposals will be made to participants in the Faupel Share OptionSchemes as soon as practicable after the Offer is declared wholly unconditional. 12. Inducement fee Faupel has entered into an agreement with MMR, pursuant to which Faupel agreedto pay to MMR an inducement fee of £42,000 (inclusive of irrecoverable VAT) inthe event that: • any Independent Director of Faupel withdraws or modifies, in amanner adverse to MMR, his recommendation to Faupel Shareholders in respect ofthe Offer; or • a competing offer is announced by a third party which becomes oris declared wholly unconditional. As part of this arrangement MMR has undertaken to Faupel to pay to Faupel awithdrawal fee of £42,000 (inclusive of irrecoverable VAT) in the event that itwithdraws or lapses the Offer for any reason other than a failure to satisfy theacceptance condition of the Offer. 13. De-listing, compulsory acquisition and re-registration Following the Offer becoming or being declared unconditional in all respects andsubject to the requirements of the London Stock Exchange, MMR intends to procurethat Faupel applies for cancellation of the admission to trading of FaupelShares on AIM. Such cancellation will take effect no earlier than 20 businessdays after the Offer becomes or is declared unconditional in all respects.De-listing would significantly reduce the liquidity and marketability of FaupelShares. If MMR receives acceptances under the Offer in respect of, and/or otherwiseacquires, 90 per cent. or more of the Faupel Shares to which the Offer relates,and assuming that all of the other conditions of the Offer have been satisfiedor waived (if capable of being waived), MMR intends to exercise its rightspursuant to the provisions of Sections 428 to 430F (inclusive) of the CompaniesAct to acquire compulsorily the remaining Faupel Shares on the same terms as theOffer. It is proposed that in due course MMR will seek to procure the re-registrationof Faupel as a private company under the relevant provisions of the CompaniesAct. 14. Interests in Faupel As at the date of this announcement, MMR owns 3,150,000 Faupel Shares,representing approximately 20.1 per cent of Faupel's existing issued ordinaryshare capital. Set out below are the interests in the share capital of Faupel of persons deemedto be acting in concert with MMR for the purposes of the Offer (as at the latestpracticable date before this announcement): Number of Faupel Shares Number of Faupel Share Options Laurence Mead 1,260,000 437,500 Laurence Mead is the beneficial owner of 40 per cent. of MMR, which owns3,150,000 Faupel Shares. Laurence Mead has 437,500 Faupel Share Options, exercisable at 20 pence pershare. He has undertaken not to exercise these Options in the event the Offerbecomes or is declared unconditional in all respects. Save for the irrevocable undertakings referred to in paragraph REF_Ref116273469 /r /h 5 above and the interests disclosed above, neither MMR norany person deemed to be acting in concert with MMR for the purposes of the Offerowns or controls any Faupel Shares or any securities convertible or exchangeableinto Faupel Shares or any rights to subscribe for, or options (including tradedoptions) in respect of, or derivatives referenced to, any such Faupel Shares('relevant Faupel securities') nor does any such person have any arrangement inrelation to relevant Faupel securities. For these purposes, 'arrangement'includes an indemnity or option arrangement, or agreement or understanding,formal or informal, of whatever nature, relating to Faupel Group Shares whichmay be an inducement to deal or refrain from dealing in such shares. 15. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the City Code, any person who, alone oracting together with any other person(s) pursuant to an agreement orunderstanding (whether formal or informal) to acquire or control relevantsecurities of Faupel, owns or controls, or becomes the owner or controller,directly or indirectly, of one per cent. or more of any class of securities ofFaupel is required to disclose, by not later than 12.00 noon (London time) onthe London business day following the date of the relevant transaction, dealingsin such securities of Faupel (or in any option in respect of, or derivativereferenced to, any such securities) during the period to the date on which theOffer becomes or is declared unconditional as to acceptances or lapses or isotherwise withdrawn. Under the provisions of Rule 8.1 of the City Code, all dealings in relevantsecurities of Faupel by MMR or Faupel, or by any of their respective'associates' (within the meaning of the City Code), must also be disclosed. If any Faupel Shareholder is in any doubt as to the application of Rule 8, he orshe should contact an independent financial adviser authorised under theFinancial Services and Markets Act 2000 and can consult the Panel's website at: www.thetakeoverpanel.org.uk or contact the Panel on telephone number +44 20 7638 0129; fax +44 20 7236 7013. 16. General The directors of MMR, being Laurence Mead, Chih Chung Chiang and George Chiang,accept responsibility for the information contained in this announcement, otherthan that relating to Faupel, the Faupel Group, the directors of Faupel and thatrelating to the recommendation of the Offer, including the views, opinions andrecommendations from the Independent Directors. To the best of the knowledge andbelief of the directors of MMR (who have taken all reasonable care to ensurethat such is the case), the information contained in this announcement for whichthey accept responsibility is in accordance with the facts and does not omitanything likely to affect the import of such information. The directors of Faupel, being David Newbigging, Stephen Redfarn, PeterHawthorn, Robin Hows, Daniel Sweeney, Michael Molloy and Laurence Mead, acceptresponsibility for the information contained in this announcement relating toFaupel, the Faupel Group and the directors of Faupel, other than that relatingto the recommendation of the Offer, including the views, opinions andrecommendations from the Independent Directors. To the best of the knowledge andbelief of the directors of Faupel (who have taken all reasonable care to ensurethat such is the case), such information is in accordance with the facts anddoes not omit anything likely to affect the import of such information. The Independent Directors in the context of this Offer, being David Newbigging,Stephen Redfarn, Peter Hawthorn, Daniel Sweeney and Michael Molloy, acceptresponsibility for the information contained in this announcement relating tothe recommendation of the Offer, including their views, opinions andrecommendations. To the best of the knowledge and belief of the IndependentDirectors (who have taken all reasonable care to ensure that such is the case),such information is in accordance with the facts and does not omit anythinglikely to affect the import of such information. The Offer will be made on the terms and subject to the conditions set out hereinand in Appendix I, and to be set out in the Offer Document and the accompanyingForm of Acceptance. These will be despatched to Faupel Shareholders and, forinformation only, to participants in the Faupel Share Option Schemes, in duecourse. The Offer, Loan Note Alternative and acceptances thereof will begoverned by English law. The Offer including the Loan Note Alternative will besubject to the applicable requirements of the Code and the Panel. The availability of the Offer including the Loan Note Alternative to persons notresident in the United Kingdom may be affected by the laws of the relevantjurisdictions. Such persons should inform themselves of, and observe, anyapplicable requirements. This announcement does not constitute an offer or an invitation to purchase anysecurities. In accordance with Rule 2.10 of the City Code, the current number of FaupelShares in issue is 15,709,447 (ISIN number GB0003317335). Enquiries Laurence Mead .................... 07810 658748(MMR) RSM Robson Rhodes LLP .................... 020 7865 2341(Financial Adviser to MMR)Martin GibbsSamantha Harrison Faupel Plc .................... 020 7506 1000David Newbigging (Chairman) .................... 020 7550 3663 Bridgewell Securities Limited .................... 020 7003 3000(Financial Adviser to Faupel)Nick Lovering RSM Robson Rhodes LLP, which is regulated in the UK by the Financial ServicesAuthority, is acting exclusively for MMR Limited and for no one else inconnection with the Offer and will not be responsible to anyone other than MMRLimited for providing the protections afforded to customers of RSM Robson RhodesLLP or for giving advice in relation to the Offer. Bridgewell, which is regulated in the UK by the Financial Services Authority, isacting exclusively for Faupel Plc and for no one else in connection with theOffer and will not be responsible to anyone other than Faupel Plc for providingthe protections afforded to customers of Bridgewell or for giving advice inrelation to the Offer. This announcement and the Offer including the Loan Note Alternative referred toin this announcement are not being made and will not be made, directly orindirectly, in or into, or by use of the mails or by any means orinstrumentality (including, without limitation, telephonically orelectronically) of interstate or foreign commerce of, or by any facilities of, anational, state or other securities exchange of, the USA, Canada, Australia,South Africa, the Republic of Ireland or Japan or any other jurisdiction if todo so would constitute a violation of the relevant laws of such jurisdiction,and the Offer including the Loan Note Alternative cannot be accepted by any suchuse, means or instrumentality or otherwise from or within the USA, Canada,Australia, South Africa, the Republic of Ireland or Japan or any other suchjurisdiction. Accordingly, this announcement, the Offer Document and the Form ofAcceptance or any accompanying document are not being, and must not be, directlyor indirectly, mailed or otherwise distributed or sent in or into or from theUSA, Canada, Australia, South Africa, the Republic of Ireland or Japan or anyother such jurisdiction. The Loan Notes to be issued pursuant to the Offer have not been, and will notbe, registered under the United States Securities Act of 1933 (as amended) orunder any of the securities laws of any State or other jurisdiction of theUnited States and no prospectus in relation to the Loan Notes has been or willbe filed or registration made under any securities laws of Canada in connectionwith the issue of Loan Notes in any jurisdiction of Canada, nor has a prospectusin relation to the Loan Notes been lodged with or registered by the AustralianSecurities and Investment Commission, nor have any steps been taken, nor willany steps be taken, to enable the Loan Notes to be offered in compliance withthe applicable securities laws of South Africa, the Republic of Ireland or Japanor any jurisdiction outside the United Kingdom. Accordingly, unless anexemption under relevant securities laws is applicable, the Loan Notes may notbe offered, sold, delivered or transferred, directly or indirectly in or intothe United States, Canada, Australia, South Africa, the Republic of Ireland orJapan or any other jurisdiction if to do so would constitute a violation of therelevant laws of such jurisdiction or to or for the benefit of any US persons(as defined in Regulation S under the United States Securities Act of 1933 (asamended)) or residents of Canada, Australia, South Africa, the Republic ofIreland or Japan or any other jurisdiction if to do so would constitute aviolation of the relevant laws of such jurisdiction. APPENDIX I Conditions and certain further terms of the Offer The Offer will be subject to the following conditions: (a) valid acceptances being received (and not, where permitted, withdrawn)by not later than 1.00 p.m. on the first closing date of the Offer (or suchlater time(s) and/or date(s) as MMR may, subject to the City Code, decide) inrespect of not less than 90 per cent. (or such lower percentage as MMR maydecide with the consent of Burdale) in nominal value of the Faupel Shares towhich the Offer relates, provided that this condition will not be satisfiedunless MMR and/or any of its wholly-owned subsidiaries shall have acquired oragreed to acquire (whether pursuant to the Offer or otherwise) Faupel Sharescarrying in aggregate more than 50 per cent. of the voting rights then normallyexercisable at a general meeting of Faupel, including for this purpose (to theextent, if any, required by the Panel) any such voting rights attaching to anyFaupel Shares that are unconditionally allotted or issued before the Offerbecomes or is declared unconditional as to acceptances, whether pursuant to theexercise of any outstanding subscription or conversion rights or otherwise. Forthe purpose of this condition: (i) the expression 'Faupel Shares to which the Offer relates'shall be construed in accordance with sections 428 to 430F of the Act; and (ii) Faupel Shares which have been unconditionally allotted butnot issued shall be deemed to carry the voting rights which they will carry uponissue; (b) no Third Party having intervened and there not continuing to beoutstanding any statute, regulation, decision or order of any Third Party, ineach case which would or might reasonably be expected to: (i) make the Offer, its implementation or the acquisition orproposed acquisition by MMR or any other member of the Wider MMR Group of anyshares or other securities in, or control of, Faupel void, illegal and/orunenforceable in or under the laws of any relevant jurisdiction, or otherwisedirectly or indirectly restrain, prevent, prohibit, restrict or delay the Offeror such acquisition or impose additional material adverse conditions orobligations with respect to the Offer or such acquisition, or otherwisematerially impede, challenge or interfere with the Offer or such acquisition, orrequire any material amendment to the terms of the Offer or the proposedacquisition of any Faupel Shares or the acquisition of control of Faupel by MMR; (ii) require, prevent or delay the divestiture (or alter theterms of any proposed divestiture) by any member of the Wider MMR Group or byany member of the Wider Faupel Group of all or any portion of their respectivebusinesses, assets (including shares or other securities (or the equivalent)) orproperties or impose any limitation on the ability of any of them to conduct anyof their respective businesses or to own any of their respective assets(including shares or other securities (or the equivalent)) or properties in eachcase to an extent which is material in the context of the Wider MMR Group takenas a whole or, as the case may be, the Wider Faupel Group taken as a whole; (iii) impose any limitation on, or result in a delay in, theability of any member of the Wider MMR Group or any member of the Wider FaupelGroup to acquire or to hold or to exercise effectively, in each case directly orindirectly, all or any rights of ownership or other rights in respect of sharesor other securities (or the equivalent) in, or to exercise management controlover, any member of the Wider Faupel Group in each case to an extent which ismaterial in the context of the Wider MMR Group taken as a whole, or as the casemay be, the Wider Faupel Group taken as a whole; (iv) except pursuant to Part XIIIA of the Act, require any memberof the Wider MMR Group or the Wider Faupel Group to acquire, or to offer toacquire or repay any shares or other securities (or the equivalent) of anymember of the Wider Faupel Group owned by any third party where such acquisitionwould be material in the context of the Wider MMR Group taken as a whole, or, asthe case may be, the Wider Faupel Group taken as a whole; (v) impose any limitation on the ability of any member of theWider MMR Group or any member of the Wider Faupel Group to integrate itsbusiness, or any part of it, with any business of the Wider Faupel Group or theWider MMR Group, respectively to an extent which is materially adverse to theWider MMR Group taken as a whole or, as the case may be, the Wider Faupel Grouptaken as a whole; (vi) result in any member of the Wider Faupel Group ceasing to beable to carry on business under any name under which it presently does so to anextent which is material in the context of the Wider Faupel Group taken as awhole; or (vii) otherwise adversely affect any or all of the businesses,assets, profits or prospects of any member of the Wider Faupel Group or anymember of the Wider MMR Group to an extent which is material in the context ofthe Wider Faupel Group taken as a whole or, as the case may be, the Wider MMRGroup taken as a whole, and all applicable waiting and other time periods during which any Third Partycould intervene in such a way under the laws of any relevant jurisdiction havingexpired, lapsed or been terminated; (c) all necessary notifications and filings having been made, all applicablewaiting and other time periods (including extensions thereof) under anyapplicable legislation or regulation of any relevant jurisdiction havingexpired, lapsed or terminated and all statutory or regulatory obligations in anyrelevant jurisdiction having been complied with in each case in connection withthe Offer or its implementation or the acquisition or proposed acquisition ofany shares or other securities (or the equivalent) in, or control of, Faupel orany other member of the Wider Faupel Group by any member of the Wider MMR Groupand all Authorisations reasonably considered necessary or appropriate by MMR inany relevant jurisdiction for or in respect of the Offer or the acquisition orproposed acquisition of any shares or other securities (or the equivalent) in,or control of, Faupel or any other member of the Wider Faupel Group by anymember of the Wider MMR Group having been obtained, in terms and in a formreasonably satisfactory to MMR, from all appropriate Third Parties or from anypersons or bodies with whom any member of the Wider Faupel Group has enteredinto contractual arrangements (which are material in the context of the Offer)and all such Authorisations, the absence of which would have a material adverseeffect on the Wider Faupel Group taken as a whole, remaining in full force andeffect and there being no notice or intimation of any intention to revoke or notto renew any of the same and all necessary and material statutory or regulatoryobligations in any jurisdiction having been complied with; (d) except as disclosed to MMR or its advisers by or on behalf of Faupelprior to 21 October 2005 or as otherwise publicly announced by Faupel (by thedelivery of an announcement to a Regulatory Information Service) prior to 21October 2005, there being no provision of any arrangement, agreement, licence,permit, franchise or other instrument to which any member of the Wider FaupelGroup is a party, or by or to which any such member or any of its assets is orare or may be bound, entitled or subject, which, in each case as a consequenceof the Offer or the acquisition or proposed acquisition of any shares in Faupel,or change in the control or management of Faupel or any other member of theWider Faupel Group or any matters arising therefrom or otherwise, would or mightreasonably be expected to result in (in each case to an extent which is or wouldbe material in the context of the Wider Faupel Group taken as a whole): (i) any monies borrowed by or any other indebtedness orliabilities, actual or contingent, of, or grant available to, any member of theWider Faupel Group being or becoming repayable or capable of being declaredrepayable immediately or prior to its stated repayment date, or the ability ofany member of the Wider Faupel Group to borrow monies or incur any indebtednessbeing withdrawn or inhibited or becoming capable of being withdrawn orinhibited; (ii) the creation or enforcement of any mortgage, charge orother security interest over the whole or any part of the business, property,assets or interests of any member of the Wider Faupel Group or any suchmortgage, charge or other security interest (whenever arising or having arisen)becoming enforceable; (iii) any such arrangement, agreement, licence, permit, franchiseor instrument, being terminated or adversely modified or any onerous obligationarising or any adverse action being taken or any obligation or liability arisingthereunder; (iv) any asset or interest of any member of the Wider FaupelGroup being or falling to be disposed of or charged or any right arising underwhich any such asset or interest could be required to be disposed of or chargedotherwise than in the ordinary course of business; (v) any member of the Wider Faupel Group ceasing to be able tocarry on business under any name under which it presently does so; (vi) any adverse change in or adverse effect on the ownership oruse of any intellectual property rights by any member of the Wider Faupel Group; (vii) the creation of any liabilities, actual or contingent, ofany member of the Wider Faupel Group other than in the ordinary course ofbusiness; (viii) the rights, liabilities or obligations of any member of theWider Faupel Group or the interests or business of any such member in or withany other person, firm, company or body (or any arrangement or arrangementsrelating to any such interests or business) being terminated, adversely modifiedor adversely affected; or (ix) the financial or trading position or prospects or value ofany member of the Wider Faupel Group being prejudiced or adversely affected, and no event or circumstance having occurred which, under any provision of anyarrangement, agreement, licence, permit, franchise or other instrument to whichany member of the Wider Faupel Group is a party, or by, or to which any suchmember or any of its assets is or are or may be bound, entitled or subject,would or might reasonably be expected to result in any of the events orcircumstances as are referred to in subparagraphs (i) to (ix) of this paragraph(d) in any case to an extent which is or would be material and adverse in thecontext of the Wider Faupel Group taken as a whole; (e) since 31 March 2005, except as disclosed in Faupel's annual report andaccounts for the year ended 31 March 2005 or as otherwise publicly announced byFaupel (by the delivery of an announcement to a Regulatory Information Service)prior to 21 October 2005 or as disclosed to MMR or its advisers by or on behalfof Faupel prior to 21 October 2005, no member of the Wider Faupel Group having: (i) issued or agreed to issue or authorised or proposed theissue of additional shares of any class, or securities convertible into, orrights, warrants or options to subscribe for or acquire, any such shares orconvertible securities (save as between Faupel and wholly-owned subsidiaries ofFaupel), except for any shares issued upon the exercise of any options grantedunder any of the Faupel Share Option Schemes; (ii) recommended, declared, paid or made, or proposed therecommendation, declaration or payment or making of, any bonus, dividend orother distribution whether in cash or otherwise (save to Faupel or awholly-owned subsidiary of Faupel); (iii) made or authorised any change in its loan capital (save asbetween Faupel and its wholly-owned subsidiaries); (iv) save as between Faupel and a wholly-owned subsidiary ofFaupel, merged with or demerged or acquired any body corporate, partnership orbusiness or (other than in the ordinary course of business) acquired or disposedof or transferred, mortgaged or charged or created any security interest overany assets (including shares in any undertaking and trade investments) or anyright, title or interest in any assets or authorised the same (which in eachcase would be material in the context of the Wider Faupel Group taken as awhole); (v) issued or authorised the issue of, or made any change in orto, any debentures or (save in the ordinary course of business) incurred orincreased any indebtedness or liability (actual or contingent) which is, in thecase of such indebtedness or liability, material in the context of the WiderFaupel Group taken as a whole; (vi) purchased, redeemed or repaid any of its own shares or othersecurities, or reduced or made any other change to any part of its share capitalsave as set out in sub-paragraph (i) of this condition; (vii) entered into or varied or authorised the entry into orvariation of any contract, transaction, agreement, arrangement or commitment(whether in respect of capital expenditure or otherwise) which: (a) is of a long-term, onerous or unusual nature or magnitude, or which doesinvolve an obligation of such nature or magnitude; (b) is restrictive of the business of any member of the Wider Faupel Group;or (c) is other than in the ordinary course of business and which in each case is or would be material in the context of the WiderFaupel Group taken as a whole; (viii) entered into, implemented, effected or authorised anyreconstruction, amalgamation, scheme, commitment or other transaction orarrangement in respect of itself or any other member of the Wider Faupel Group(which in any case is other than in the ordinary course of business and is orwould be material in the context of the Wider Faupel Group taken as a whole); (ix) save as between Faupel and its wholly-owned subsidiaries,granted any lease or third party rights in respect of any of the leasehold orfreehold property owned or occupied by it or transferred or otherwise disposedof (or agreed to make any such grant, transfer or other disposal of) any suchproperty which is material in the context of the Wider Faupel Group taken as awhole; (x) entered into or varied or made any offer (which remains openfor acceptance) to enter into or vary the terms of any contract or arrangementwith any of the directors or senior executives of any member of the Wider FaupelGroup; (xi) taken any corporate action or had any legal proceedingsinstituted or threatened against it or petition presented or order made for itswinding-up (voluntarily or otherwise), dissolution or reorganisation or for theappointment of a receiver, administrator, administrative receiver, trustee orsimilar officer of all or any material part of its assets and revenues or forany analogous proceedings or steps in any jurisdiction or for the appointment ofany analogous person in any jurisdiction over all or any material part of itsassets and revenues in each case which is material in the context of the WiderFaupel Group taken as a whole; (xii) been unable, or admitted in writing that it is unable, to payits debts or having stopped or suspended (or threatened to stop or suspend)payment of its debts generally or ceased or threatened to cease carrying on allor a substantial part of its business in any case with a material adverse effecton the Wider Faupel Group taken as a whole; (xiii) waived or compromised any claim other than in the ordinarycourse of business and which is material in the context of the Wider FaupelGroup taken as a whole; (xiv) made any alteration to its memorandum or articles ofassociation or equivalent constitutional documents which is material in thecontext of the Offer; or (xv) agreed to or entered into or made any agreement, commitment orarrangement or passed any resolution or made any offer (which remains open foracceptance) or announced any intention with respect to any of the transactions,matters or events referred to in this paragraph (e); (f) since 31 March 2005, except as disclosed in Faupel's annual report andaccounts for the year ended 31 March 2005 or as otherwise publicly announced byFaupel (by the delivery of an announcement to a Regulatory Information Service)prior to 21 October 2005 or as otherwise disclosed to MMR or its advisers by oron behalf of Faupel prior to 21 October 2005: (i) there having been no material adverse change ordeterioration, and no other circumstances having arisen which would or mightreasonably result in any material adverse change or deterioration, in thebusiness, assets, financial or trading position, profits or prospects of anymember of the Wider Faupel Group, in any case which is material in the contextof the Wider Faupel Group taken as a whole; (ii) no litigation, arbitration proceedings, prosecution orother legal proceedings to which any member of the Wider Faupel Group is a party(whether as claimant or defendant or otherwise) having been instituted,announced, implemented or threatened, or remaining outstanding against or inrespect of any member of the Wider Faupel Group, in each case which wouldreasonably be expected materially and adversely to affect any member of theWider Faupel Group to an extent which is material in the context of the WiderFaupel Group taken as a whole; (iii) other than as a result of the Offer, no enquiry orinvestigation by, or complaint or reference to, any Third Party having beenthreatened, announced, implemented, instituted by or against or remainingoutstanding against or in respect of any member of the Wider Faupel Group, ineach case which is material in the context of the Wider Faupel Group taken as awhole; (iv) no contingent or other liability having arisen or becomeapparent or increased which would or might reasonably be expected to be materialin the context of the Wider Faupel Group taken as a whole; (g) save as disclosed to MMR or its advisers prior to 21 October 2005 by oron behalf of Faupel, MMR not having discovered: (i) that any financial or business or other informationconcerning the Wider Faupel Group publicly disclosed at any time by or on behalfof any member of the Wider Faupel Group which is material in the context of theacquisition of Faupel by MMR (other than to the extent corrected by way ofpublic announcement), otherwise is misleading or contains a misrepresentation offact or omits to state a fact necessary to make any information containedtherein not misleading, which in each case is material and adverse to thefinancial or trading position of the Wider Faupel Group taken as a whole; (ii) that any member of the Wider Faupel Group is subject to anyliability (contingent or otherwise) which is not disclosed in Faupel's annualreport and accounts for the year ended 31 March 2005 or which has not otherwisebeen disclosed by or on behalf of Faupel to MMR or its advisers prior to 21October 2005 and which is material in the context of the Wider Faupel Grouptaken as a whole; or (iii) any information which affects the import of any informationdisclosed at any time by or on behalf of any member of the Wider MMR Group wouldreasonably be expected materially and adversely to affect any member of theWider Faupel Group to an extent which is material in the context of the WiderMMR Group taken as a whole; and (h) save as disclosed to MMR or its advisers prior to 21 October 2005, MMRnot having discovered that: (i) any past or present member of the Faupel Group, in amanner or to an extent which is material in the context of the Offer, has notcomplied with all or any applicable legislation, or regulations with regard toenvironmental matters or the health and safety of any persons, or that there hasotherwise been any such use, treatment, handling, storage, transport,production, supply, disposal, discharge, spillage, leak or emission (whether ornot the same constituted a non-compliance by any person with any suchlegislation, or regulation and wherever the same may have taken place) which, inany such case, would be reasonably likely to give rise to any liability (whetheractual or contingent) or cost on the part of any past or present member of theWider Faupel Group which would be material in the context of the Wider FaupelGroup taken as a whole; (ii) there is, or might reasonably be expected to be, anyliability (actual or contingent) to make good, repair, reinstate or clean up anyproperty or land now or previously owned, occupied or made use of by any past orpresent member of the Wider Faupel Group or any other property or land or anycontrolled waters under any environmental legislation, regulation, notice,circular, order or other lawful requirement of any relevant authority (whetherby formal notice or order or not) or Third Party or otherwise in a manner whichor to an extent which is material in the context of the Offer which, in any suchcase, would be material in the context of the Wider Faupel Group taken as awhole; or (iii) circumstances exist whereby a person or class of person,would be reasonably likely to have or does have any claim or claims in respectof any product or service now or previously sold or carried out by or on behalfof any past or present member of the Wider Faupel Group which in any such casewould be material in the context of the Wider Faupel Group taken as a whole andin the context of the Offer. For the purpose of these conditions: a) 'Third Party' means any government, government department orgovernmental, quasi-governmental, supranational, statutory, regulatory orinvestigative body, authority (including any national anti-trust or mergercontrol authorities), court, trade agency, association, institution orprofessional or environmental body or any other person or body whatsoever in anyrelevant jurisdiction; b) a Third Party shall be regarded as having 'intervened' if it hasthreatened or decided to take, institute or implement any action, proceedings,suit, investigation, enquiry or reference or made, proposed or enacted anystatute, regulation, decision or order and 'intervene' shall be construedaccordingly; c) 'Authorisations' means authorisations, orders, grants, recognitions,determinations, certificates, confirmations, consents, licences, clearances,permissions or approvals; and d) a matter shall be regarded as having been 'disclosed' if it is withinthe actual knowledge of Laurence Mead. Subject to the requirements of the Panel, MMR reserves the right to waive all orany of the above conditions, in whole or in part, except condition (a) althoughas part of the financing arrangements with Burdale, MMR has agreed that none ofthe conditions of the Offer will be waived without the prior written consent ofBurdale. Conditions (b) to (h) (inclusive) must be fulfilled, be determined by MMR to be,or remain, satisfied, or (if capable of waiver) be waived by midnight on the21st day after the later of the first closing date of the Offer and the date onwhich condition (a) becomes fulfilled (or in each case such later date as MMRmay, with the consent of the Panel, decide), failing which the Offer will lapse. MMR shall be under no obligation to waive (if capable of waiver), to determineto be or remain satisfied or to treat as fulfilled any of conditions (b) to (h)(inclusive) by a date earlier than the latest date specified above for thefulfilment thereof notwithstanding that the other conditions of the Offer may atsuch earlier date have been waived, determined to be satisfied or to remainsatisfied or fulfilled and that there are at such earlier date no circumstancesindicating that such condition may not be capable of fulfilment. If MMR is required by the Panel to make an offer for Faupel Shares under theprovisions of Rule 9 of the City Code, MMR may make such alterations to theconditions of the Offer, including condition (a), as are necessary to complywith the provisions of that Rule. If the Offer lapses, the Offer will cease to be capable of further acceptanceand Faupel's Shareholders accepting the Offer and MMR shall upon the Offerlapsing cease to be bound by Forms of Acceptance delivered on or before the dateon which the Offer lapses. The Offer including the Loan Note Alternative will be governed by English lawand subject to the jurisdiction of the English courts. APPENDIX II Particulars of Loan Notes The Loan Notes will be created by a resolution of the board of directors of MMRor a duly authorised committee thereof and will be constituted by the Loan NoteInstrument to be executed as a deed by MMR. The Loan Note Instrument willcontain provisions, inter alia, to the effect set out below. Form and Status 1. The Loan Notes will be issued by MMR in amounts and integral multiplesof £1 nominal amount and will constitute unsecured obligations of MMR, whichwill rank at least pari passu with all the present and future unsecuredobligations of MMR, save for such obligations as may be preferred by provisionsof law that are both mandatory and of general application and save forshareholder loans to MMR which will be subordinated to the Loan Notes pursuantto a deed of subordination to be entered into between the shareholders of MMRand MMR on or about the same date as the Loan Note Instrument. The Loan NoteInstrument will not contain any restrictions on creating and issuing furtherloan notes or other debentures or incurring any other indebtedness ranking paripassu with or in priority to the Loan Notes. 2. The maximum nominal amount of Loan Notes to be created by MMR under theLoan Note Instrument is £567,241. Interest 3. Interest on the Loan Notes will be payable (subject to any requirementsto deduct tax therefrom) on the date of redemption (the 'Redemption Date').Interest will be payable for the period from and including the date of issue ofsuch Loan Notes to and including the business day immediately preceding theRedemption Date of such Loan Notes. Each payment of interest shall be calculatedon the basis of the actual number of days elapsed in the relevant period andinterest shall be deemed to accrue on the Loan Notes from day to day. 4. The rate of interest on the Loan Notes for the sixth month periodbeginning from the first date on which the Loan Notes are first issued under theLoan Note Instrument shall be LIBOR as at the business day immediately precedingthe first date on which the Loan Notes are first issued (the 'Initial Rate') andthereafter at the Initial Rate plus 4 per cent. per annum. Repayment and Redemption 5. The Redemption Date shall be the first anniversary of the first date ofissue of Loan Notes under the Loan Note Instrument. Where the Redemption Date isnot a business day, redemption shall take place on the next following businessday. 6. MMR shall be entitled to redeem all or any part (being £100 or anyintegral multiple of £100 and on a pro rata basis among the noteholders) of theoutstanding Loan Notes at par together with accrued interest for such Loan Noteson giving not less than 30 days' notice in writing to the noteholders expiringon or after the date falling six months from the date on which Loan Notes arefirst issued under the Loan Note Instrument. 7. MMR may from time to time purchase any Loan Notes at any price by tender(available to all noteholders alike), private treaty or otherwise. Any LoanNotes purchased in accordance with these provisions or repaid or redeemed shallimmediately be cancelled and MMR shall not be at liberty to reissue the same. 8. Any Loan Notes not previously repaid, redeemed or purchased will berepaid in full in cash at par together with accrued interest (subject in eachcase to any requirement to deduct tax therefrom) on the first anniversary of thefirst date of the issue of Loan Notes. 9. Any Loan Notes not previously repaid, redeemed or repaid will becancelled and shall not be available for future re-issue. Registration, Transfer and Marketability 10. Each noteholder or the joint holders of any of the Loan Notes shall beentitled free of charge to a certificate for the Loan Note or Loan Notesregistered in his name. Where some only of the Loan Notes comprised in acertificate are redeemed, the old certificate shall be cancelled and a newcertificate for the balance of the Loan Notes not repayable on that occasionshall be issued to the noteholder concerned in lieu without charge. 11. The Loan Notes will not be transferable and no application has been oris intended to be made to any stock exchange for the Loan Notes to be listed,traded or dealt in. Governing Law and Jurisdiction 12. The Loan Note Instrument and the Loan Notes shall be governed by andconstrued in all respects in accordance with English law. The Courts of Englandand Wales shall have exclusive jurisdiction in relation to any claim, dispute ordifference concerning the Loan Note Instrument and the Loan Notes and any matterarising therefrom. APPENDIX III Definitions In this announcement, unless the context otherwise requires the followingexpressions have the following meaning: "Acceptance Condition" means the acceptancecondition contained in paragraph (a) of Appendix I to this announcement. "Act" or the "Companies Act" the Companies Act 1985, asamended "AIM" AIM, a marketoperated by the London Stock Exchange "AIM Rules" the rules relatingto AIM published by the London Stock Exchange "Australia" the commonwealthof Australia, its states, territories and possessions "Bridgewell" BridgewellSecurities Limited "Burdale" Burdale FinancialLimited, a member of Bank of Ireland Group "business day" a day on which banksare normally open for business in London "Canada" Canada, itspossessions and territories and all areas subject to its jurisdiction and anypolitical sub-divisions thereof "Closing Price" the closing, middlemarket quotation of a Faupel Share derived from the Daily Official List "Code" or "City Code" The City Code onTakeovers and Mergers "First Closing Date" the first closing dateof the Offer "Faupel" or "the Company" Faupel Plc, a publiclimited company incorporated in England and Wales under number 1367775 "Faupel Group" Faupel and itssubsidiary undertakings "Faupel Share Option Schemes" the Faupel Trading Group Plcunapproved share option scheme and the Faupel Trading Group Plc Inland Revenueapproved share option scheme "Faupel Shareholders" holders of Faupel Shares "Faupel Shares" the existing issued orunconditionally allotted and fully paid ordinary shares of 5 pence each inFaupel and any further such shares which are unconditionally allotted or issuedand fully paid up or credited as fully paid up (including pursuant to the FaupelShare Option Schemes) on or before the time at which the Offer ceases to be openfor acceptance (or such earlier time, as MMR may, with the Panel's consent or inaccordance with the Code, decide) "Form of Acceptance" or "Form" the form of acceptance andauthority relating to the Offer "FSMA" the FinancialServices and Markets Act 2000 "Independent Directors" the Faupel directors whoare independent in relation to the Offer, being David Newbigging, StephenRedfarn, Peter Hawthorn, Daniel Sweeney and Michael Molloy "Japan" Japan, itscities, prefectures, territories and possessions "LIBOR" in respect of anyday, the arithmetic mean (rounded down to one decimal place) of the offeredquotations in £ for a period of six months which appears on the relevant page ofthe Reuter Monitor Money Rates service as at 11:00 a.m. London time on thepreceding business day or, if no such display rate is then available for £ (asthe case may be), such rate as certified by Barclays Bank PLC to MMR "Loan Note Alternative" the right of eligibleFaupel Shareholders (other than certain overseas shareholders) who validlyaccept the Offer to receive Loan Notes instead of all or part of the cash towhich they would otherwise be entitled under the Offer "Loan Note Instrument" the loan note instrumentconstituting the Loan Notes to be executed by MMR "Loan Notes" the unsecured loannotes to be issued by MMR pursuant to the Loan Note Alternative, having therights and being subject to the restrictions set out in the Loan Note Instrument "London Stock Exchange" London Stock Exchange plc "MMR" Max Money ResourcesLimited, a private company registered in the British Virgin Islands under number458725 "Offer Document" the formal offerdocument, to be sent to Faupel Shareholders (and, for information only, toholders of options granted under the Faupel Share Option Schemes), which willcontain the Offer "Offer" the recommendedoffer of 25 pence in cash per Faupel Share to be made by RSM Robson Rhodes LLPon behalf of MMR to acquire the Faupel Shares on the terms and subject to theconditions to be set out in the Offer Document and the Form of Acceptance and,where the context admits, any revision, variation, extension or renewal thereof "p" or "pence" UK pence "Panel" The Panel onTakeovers and Mergers "RSM Robson Rhodes" RSM Robson Rhodes LLP "South Africa" South Africa, itspossessions and territories and all areas subject to its jurisdiction and anypolitical sub-divisions thereof "United Kingdom" or "UK" the United Kingdom of GreatBritain and Northern Ireland "US" or "USA" or "United States" the United States of America,its territories and possessions, any state of the United States, and theDistrict of Columbia "Wider Faupel Group" Faupel, its subsidiaries,subsidiary undertakings and associated undertakings and any other bodycorporate, partnership, joint venture or person in which Faupel and suchundertakings (aggregating their interests) have a direct or indirect interest of20 per cent. or more of the voting or equity capital or equivalent "Wider MMR Group" MMR and its associatedundertakings and any other body corporate, partnership, joint venture or personin which MMR and such undertakings (aggregating their interests) have a director indirect interest of 20 per cent. or more of the voting or equity capital orequivalent (but excluding the Faupel Group) "£" pound sterling,the lawful currency of the United Kingdom For the purposes of this announcement, "subsidiary", "subsidiary undertaking", "undertaking" and "associated undertaking" have the respective meanings giventhereto by the Act. All the times referred to in this announcement are London times. This information is provided by RNS The company news service from the London Stock Exchange