Last checked at 19 Dec 2007 18:06
Inspace Plc19 December 2007 Willmott Dixon Limited19 December 2007 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO ORFROM ANY RELEVANT JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OFTHE RELEVANT LAWS OF SUCH JURISDICTION 19 December 2007 Recommended Cash Offer of 183 pence per Inspace Share for Inspace Plc ("Inspace") by Willmott Dixon Limited ("Willmott Dixon") Summary and Highlights The Independent Directors of Inspace and the Board of Willmott Dixon are pleasedto announce that they have reached agreement on the terms of a recommended cashoffer of 183 pence per Inspace Share to be made by Willmott Dixon to acquire theentire issued and to be issued share capital of Inspace that is not alreadyowned by Willmott Dixon. At the date of this announcement, Willmott Dixon ownedapproximately 10.3 per cent. of the issued share capital of Inspace. In addition, the Panel has deemed that all of the shareholders in WillmottDixon, and certain other persons, who together hold a further 56.6 per cent. ofthe issued share capital of Inspace, are acting in concert with Willmott Dixonfor the purposes of the Offer. Further details of the concert parties ofWillmott Dixon can be found at section 14 of this announcement. Therefore, in aggregate, Willmott Dixon and those persons who are deemed to beacting in concert with it, hold approximately 66.9 per cent. of the issued sharecapital of Inspace.The Offer will be made on the following basis: for each Inspace Share 183 pence in cash • The Offer Price represents a premium of approximately 66.4 per cent to Inspace's share price of 110.0 pence at the close of business on 7 December 2007, being the last Business Day prior to the announcement by Inspace on 10 December that it was in talks with Willmott Dixon regarding a possible Offer by Willmott Dixon for Inspace. • The terms of the Offer value Inspace's existing issued share capital at approximately £148.2 million. • Willmott Dixon has received irrevocable undertakings from those Inspace Directors who hold Inspace Shares to accept the Offer (and, in certain cases, to procure the acceptance of the Offer by certain persons connected with them) in respect of a total of 5,958,587 Inspace Shares, representing in aggregate approximately 7.4 per cent. of the existing issued share capital of Inspace. • In addition to the irrevocable undertakings given by the Inspace Directors, Willmott Dixon has received irrevocable undertakings to accept the Offer (and, in certain cases, to procure the acceptance of the Offer by certain persons connected with them) in respect of a further 37,289,159 Inspace Shares, representing approximately 46.0 per cent. of the existing issued share capital of Inspace. • In aggregate, therefore, Willmott Dixon has received irrevocable undertakings to accept the Offer (or procure the acceptance of the Offer) in respect of 43,247,746 Inspace Shares, representing approximately 53.4 per cent. of the existing issued ordinary share capital of Inspace. • The Independent Directors, who have been so advised by their financial adviser, Dresdner Kleinwort, consider the terms of the Offer to be fair and reasonable. In giving its advice to the Independent Directors, Dresdner Kleinwort has taken into account the Independent Directors' commercial assessments. • Accordingly, the Independent Directors intend to recommend that Inspace Shareholders accept the Offer, as those Independent Directors, who hold Inspace Shares, have irrevocably undertaken to do in respect of their beneficial shareholdings amounting, in aggregate, to 640,183 Inspace Shares, representing 0.8 per cent. of the existing issued share capital of Inspace. Commenting on the proposed Offer, Rick Willmott, Chief Executive of WillmottDixon said: "We are pleased to have reached agreement on the terms of a recommended offerfor Inspace. This forms part of Willmott Dixon's revised strategy of developinga broader construction services business. We look forward to re-establishingrelationships with many former customer organisations and indeed to forging newpartnerships with the next generation of client bodies." David Batchelor, an Independent Director of Inspace, said: "The offer represents a significant premium to the share price before theapproach was announced and gives shareholders certainty of value." This summary should be read in conjunction with the full text of the followingannouncement and the Appendices. Appendix 1 sets out the conditions and certain further terms of the Offer.Appendix 2 contains source notes relating to certain information contained inthis announcement. Appendix 3 contains details of the irrevocable undertakingsreceived in relation to the Offer. Certain terms used in this announcement aredefined in Appendix 4 to this announcement. Enquiries: Seymour Pierce (Financial Adviser to Willmott Dixon)Douglas Harmer +44 (0) 20 7107 8000Mark Percy +44 (0) 20 7107 8000 Dresdner Kleinwort (Financial Adviser to Inspace)Chris Treneman +44 (0) 20 7623 8000Christian Littlewood +44 (0) 20 7623 8000Keith Welch +44 (0) 20 7623 8000 Seymour Pierce, which is authorised and regulated in the United Kingdom by theFinancial Services Authority is acting exclusively for Willmott Dixon inconnection with the Offer and no-one else and will not be responsible to anyoneother than Willmott Dixon for providing the protections afforded to clients ofSeymour Pierce nor for providing advice in relation to the Offer or any othermatter referred to in this announcement. Dresdner Kleinwort Limited, which is authorised and regulated by the FinancialServices Authority, is acting for Inspace (in the form of the IndependentDirectors) and for no-one else in connection with the Offer and will not beresponsible to anyone other than Inspace (in the form of the IndependentDirectors) for providing the protections afforded to clients of DresdnerKleinwort Limited nor for affording advice in relation to the Offer or any othermatter referred to in this announcement. This announcement is not intended to and does not constitute or form any part ofan offer to sell or an invitation to purchase or the solicitation of an offer tosubscribe for any securities or the solicitation of any vote or approval in anyjurisdiction pursuant to the Offer or otherwise. The Offer will be made solelythrough the Offer Document and, in the case of certificated Inspace Shares, theForm of Acceptance, which will together contain the full terms and conditions ofthe Offer, including details of how to accept the Offer. Any acceptance or otherresponse to the Offer should be made only on the basis of the informationcontained in the Offer Document and the Form of Acceptance. The release, distribution or publication of this announcement in jurisdictionsother than the UK may be restricted by law and therefore any persons who aresubject to the laws of any jurisdiction other than the UK should informthemselves about and observe any applicable requirements. Copies of thisannouncement and any documentation relating to the Offer are not being, and mustnot be, directly or indirectly, mailed or otherwise forwarded, distributed orsent in or into or from any Restricted Jurisdiction and persons receiving suchdocuments (including custodians, nominees and trustees) must not mail orotherwise forward, distribute or send such documents in or into or from aRestricted Jurisdiction. The Offer (unless otherwise determined by WillmottDixon and permitted by applicable law and regulation), will not be made,directly or indirectly, in or into, or by the use of the mails, or by any meansof instrumentality (including without limitation, telephonically orelectronically) of interstate or foreign commerce of, or any facilities of anational securities exchange of any Restricted Jurisdiction, and the Offer willnot be capable of acceptance from or within any Restricted Jurisdiction. This announcement, including information included or incorporated by referencein this announcement, may contain "forward-looking statements" concerningWillmott Dixon, Inspace and their respective subsidiaries. Generally, the words"will", "may", "should", "continue", "believes", "expects", "intends","anticipates" or similar expressions identify forward-looking statements. Theforward-looking statements involve risks and uncertainties that could causeactual results to differ materially from those expressed in the forward-lookingstatements. Many of these risks and uncertainties relate to factors that arebeyond the companies' abilities to control or estimate precisely, such as futuremarket conditions and behaviours of other market participants, and thereforeundue reliance should not be placed on such statements. Willmott Dixon andInspace assume no obligation and do not intend to update these forward-lookingstatements, except as required pursuant to applicable law. Dealing disclosure requirements Under the provisions of Rule 8.3 of the Code, if any person is, or becomes,'interested' (directly or indirectly) in 1 per cent. or more of any class of'relevant securities' of Inspace, all 'dealings' in any 'relevant securities' ofthat company (including by means of an option in respect of, or a derivativereferenced to, any such 'relevant securities') must be publicly disclosed by nolater than 3.30 p.m. (London time) on the Business Day following the date of therelevant transaction. This requirement will continue until the date on which theOffer becomes, or is declared, unconditional as to acceptances, lapses or isotherwise withdrawn or on which the 'Offer Period' otherwise ends. If two ormore persons act together pursuant to an agreement or understanding, whetherformal or informal, to acquire an 'interest' in 'relevant securities' ofInspace, they will be deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the Code, all 'dealings' in 'relevantsecurities' of Inspace by Willmott Dixon or Inspace, or by any of theirrespective 'associates', must be disclosed by no later than 12.00 noon (Londontime) on the London business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose 'relevantsecurities' 'dealings' should be disclosed, and the number of such securities inissue, can be found on the Panel's website at www.thetakeoverpanel.org.uk. 'Interests in securities' arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an 'interest' byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Code, which can also be found on thePanel's website. If you are in any doubt as to whether or not you are requiredto disclose a 'dealing' under Rule 8, you should consult the Panel. This summary should be read in conjunction with the full text of the followingannouncement and the Appendices. NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO ORFROM ANY RESTRICTED JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OFTHE RELEVANT LAWS OF SUCH JURISDICTION 19 December 2007 Recommended Cash Offer of 183 pence per Inspace Share for Inspace Plc ("Inspace") by Willmott Dixon Limited ("Willmott Dixon") 1. Introduction The Independent Directors of Inspace and the Board of Willmott Dixon are pleasedto announce that they have reached agreement on the terms of a recommended cashoffer to be made by Willmott Dixon to acquire the entire issued and to be issuedordinary share capital of Inspace, not already owned by Willmott Dixon. At thedate of this announcement, Willmott Dixon owns approximately 10.3 per cent. ofthe issued share capital of Inspace. In addition, the Panel has deemed that the shareholders in Willmott Dixon, andcertain other persons, who together hold a further 56.6 per cent. of the issuedshare capital of Inspace, are acting in concert with Willmott Dixon for thepurposes of the Offer. Further details of the concert parties of Willmott Dixoncan be found at section 14 of this announcement. Therefore, in aggregate, Willmott Dixon and those persons who are deemed to beacting in concert with it, hold approximately 66.9 per cent. of the issued sharecapital of Inspace. 2. Summary of the recommended Offer Willmott Dixon will offer to acquire, on the terms and subject to the conditionsset out below and in Appendix 1 and on the full terms which will be set out inthe Offer Document, the entire issued share capital of Inspace (other than thoseInspace Shares already held by Willmott Dixon) on the following basis: for each Inspace Share 183 pence in cash The Offer Price represents a premium of approximately 66.4 per cent. toInspace's share price of 110.0 pence at the close of business on 7 December2007, being the last Business Day prior to the announcement by Inspace on 10December that it was in talks with Willmott Dixon regarding a possible Offer byWillmott Dixon for Inspace. The terms of the Offer value Inspace's existing issued share capital atapproximately £148.2 million. 3. Independent Directors Since certain members of the Board of Inspace were involved in helping the Boardof Willmott Dixon formulate the Offer and/or hold financial interests in theissued share capital of Willmott Dixon, the Board of Inspace constituted anIndependent Committee of the Board to consider the Offer. This IndependentCommittee consists of David Batchelor, Duncan Forbes and Christopher Sheridan. 4. Background to and reasons for the Offer The Board of Willmott Dixon does not believe that the expected benefits of thedemerger and subsequent admission to AIM of Inspace in May 2005 have been fullyrealised by Inspace Shareholders. In particular, it believes that a lack of liquidity in Inspace Shares has led toa volatile share price since its admission and, on occasions, significant pricemovements which have been driven by only modest trading volumes. Furthermore, the Board of Willmott Dixon believes that the recent turmoil in thecredit markets has and will continue to accentuate these unfavourableconditions, especially within the wider construction sector. This, it believes,will also have negative repercussions on the ability of companies such asInspace to raise additional equity capital in the public markets. This, coupled with the significant cost and management constraints associatedwith a stock market listing, lead the Board of Willmott Dixon to consider thatthe future of Inspace is best served away from the public markets. Upon the Offer for Inspace becoming wholly unconditional, and as part of anintegrated strategy going forward, the Board of Willmott Dixon will seek torestructure the combined business. Principally, this would involve, in duecourse, the transfer of the corporate assets division of Inspace under thecontrol of Willmott Dixon. The resultant Willmott Dixon business will be a focused provider ofconstruction, maintenance and interior fit out services to the commercial andpublic sectors. Correspondingly, Inspace will be entirely focused on theprovision of social and affordable housing to the UK market.5. Background to and reasons for recommending the Offer Since its demerger from Willmott Dixon in January 2005 and subsequent flotationon AIM, Inspace has made good progress in positioning itself in line with theBoard's view of likely future government expenditure on social and affordablehousing. The acquisition of Widacre in August 2006 from Willmott Dixonrepresented an important part of Inspace's strategy, strengthening the InspaceGroup's position in the social housing market, providing access to the privatehousing market, bringing to the group a number of new relationships withregistered social landlords ("RSLs") and providing new build skills for both thesocial housing and affordable homes markets. This progress was reflected in the interim results of the Inspace Group for thesix months ended 30 June 2007 with earnings per share (on a diluted and adjustedbasis) up 35 per cent. and improved visibility of future revenue. Despite this progress, the Independent Directors of Inspace continue to see anumber of challenges in growing the Inspace business. As previously announcedand set out under the Current Trading section of this announcement, the Board ofInspace believes there remains uncertainty regarding the Company's ability tomeet its short and medium term forecasts. The Board believes this uncertaintyarises, inter alia, by reason of margin pressure on existing contracts withinmaintenance and stock reinvestment and the difficulty in winning new contractsin this area at margins which the Board believes are acceptable, reducing demandfor certain of the Corporate Assets division's services and increased near termrisk associated with the affordable housing division. The Independent Directors of Inspace believe these risks, in addition to generalmarket uncertainties, have led to a recent fall in Inspace's share price. Priorto the announcement on 10 December 2007, the fall over the last six months hasbeen in excess of the fall in the benchmark indices during that period and morein line with the fall during that period experienced by UK listed housebuilders. In addition, the Independent Directors believe that share price growthhas been inhibited by a number of other issues including the relative lowliquidity of the Inspace Shares, due to the aggregate holding of approximately67 per cent. held by the Willmott and Dixon family members and Willmott Dixon,and the need to further develop the Board structure. The Independent Directors have considered the possibility of finding alternativebuyers for Inspace. However, in light of the aggregate shareholdings of theWillmott and Dixon families and Willmott Dixon's shareholding in Inspace, theIndependent Directors have concluded that this was unlikely. Against this background, the Independent Directors consider the Offer to be madeby Willmott Dixon to be fair and reasonable and, in the absence of a higheroffer, should be put to shareholders. 6. Independent Directors' recommendation The Independent Directors, who have been so advised by their financial adviser,Dresdner Kleinwort, consider the terms of the Offer to be fair and reasonable.In giving its advice to the Independent Directors, Dresdner Kleinwort has takeninto account the Independent Directors' commercial assessments. Accordingly, in the absence of a higher offer, the Independent Directorsunanimously recommend that Inspace Shareholders accept the Offer. The Independent Directors who hold Inspace Shares have given irrevocableundertakings to Willmott Dixon to accept the Offer in respect of their legal andbeneficial holdings in such shares, which in aggregate amount to 640,183 InspaceShares representing approximately 0.8 per cent. of the existing issued ordinaryshare capital of Inspace. These undertakings will remain binding in the event ofa higher offer. 7. Irrevocable Undertakings Willmott Dixon has received irrevocable undertakings from those InspaceDirectors who hold Inspace Shares to accept the Offer (and, in certain cases, toprocure the acceptance of the Offer by certain persons connected with them) inrespect of a total of 5,958,587 Inspace Shares, representing in aggregateapproximately 7.4 per cent. of the existing issued share capital of Inspace. Willmott Dixon has also received irrevocable undertakings from certain othershareholders to accept the Offer (and, in certain cases, to procure theacceptance of the Offer by certain persons connected with them) in respect of atotal of 32,206,281 Inspace Shares, representing in aggregate approximately 39.8per cent. of the existing issued share capital of Inspace. All of the above undertakings continue to be binding even if a competing offeris announced for Inspace which exceeds the value of the Offer and whether or notsuch competing offer is recommended for acceptance by the Inspace Board. In addition, Willmott Dixon has received a further irrevocable undertaking toaccept the Offer in respect of 5,082,878 Inspace Shares, representingapproximately 6.3 per cent. of the existing issued share capital of Inspace.This undertaking will cease to be binding if a competing offer is announced forInspace which exceeds the value of the Offer by not less than 10 per cent. In aggregate, therefore, Willmott Dixon has received irrevocable undertakings toaccept the Offer (and, in certain cases, to procure the acceptance of the Offer)in respect of 43,247,746 Inspace Shares, representing approximately 53.4 percent. of the existing issued share capital of Inspace. All of the above irrevocable undertakings will lapse if an event occurs whichmeans that Willmott Dixon is no longer required by the Code to proceed with theOffer or the Offer lapses or is withdrawn. Further details of the irrevocable undertakings are contained in Appendix 3 tothis announcement. 8. Financing the Offer The cash consideration payable under the Offer will be funded through acombination of the existing cash resources of Willmott Dixon and bank debt. Full details of the financing arrangements will be set out in the OfferDocument. It is the intention to refinance a proportion of this bank debt assoon as is reasonably practicable after the Offer has become or being declaredunconditional in all respects through the Proposed Underwritten Equity Issue,with maximum underwriting commitments in respect of the equity issue in the sumof approximately £32.0 million. Seymour Pierce is satisfied that sufficientfinancial resources are available to Willmott Dixon to satisfy in full the cashconsideration payable to Inspace Shareholders in the event of full acceptance ofthe Offer. 9. Information on Willmott Dixon Willmott Dixon is a leading provider of construction services across England andWales. The principal services of Willmott Dixon surround the construction anddevelopment of real estate assets across a variety of sectors includingcommercial, health, education, law and order, leisure and hotels. Willmott Dixonalso offers a range of construction related consultancy services through itsRe-Thinking division. In addition to its operations within the private sector, Willmott Dixon operatesa focused public sector operation. Willmott Dixon Public Private InvestmentsLimited aims to specialise in assembling bids, developing projects andultimately holding assets in what it sees is a growing market for public privatepartnerships. For the year ended 31 December 2006, Willmott Dixon had total sales of £359.3million (2005 £412.7 million) and pre-exceptional profit before tax of £8.7million (2005 £10.5 million), with net assets at that date of £27.9 million(2005 £23.7 million). The decline in the reported turnover and profit of Willmott Dixon in 2006 wasdue to the disposal of Widacre Limited, a subsidiary undertaking of WillmottDixon, which was sold to Inspace in August 2006. In its unaudited interim accounts for the six months ended 30 June 2007 WillmottDixon reported total sales of £178.4 million (2006 £192.1 million) andpre-exceptional profit before tax of £4.1 million (2006 £3.9 million) with netassets at that date of £29.6 million (2006 £27.7 million). Further financial information on Willmott Dixon can be found in Appendix III tothe Offer Document. 10. Information on Inspace Inspace plc is a property based services company, providing specialist servicesto the social and affordable housing markets. It was demerged from WillmottDixon in January 2005 and acquired Widacre from Willmott Dixon in August 2006. Inspace has three divisions: social housing, affordable housing and corporateassets. Social Housing- creating and maintaining sustainable homes The division is one of the UK's specialist service providers to social housinglandlords through long term framework contracts. Its services comprise major'repair and maintenance', 'stock reinvestment' and new build programmes forlocal authorities, Arms Length Management Organisations (ALMOs) and RegisteredSocial Landlords (RSLs). Affordable Housing - developing integrated communities The affordable housing division specialises in the provision of low cost homesfor sale, usually in partnership with RSLs, and alongside social housing builtby the Social Housing division, as part of more extensive mixed tenure schemes.It has already established a number of joint venture companies with RSLs andthrough its involvement in the Key London Alliance consortium, has beenappointed to provide mixed tenure developments under the Government's LondonWide Initiative. Corporate Assets - improving and maintaining public and private real estate The corporate assets division provides a comprehensive repair, maintenance,capital works and interior fit-out service across public and private sectornon-residential real estate.For the year ended 31 December 2006, Inspace had total sales of £175.1 million(2005: £147.5 million) and profit before tax of £9.5 million (2005: £7.4million), with net assets at that date of £32.6 million (2005: £16.0 million).In its unaudited interim accounts for the six months ended 30 June 2007 Inspacereported total sales of £139.9 million (2006: £62.6 million) and profit beforetax of £5.4 million (2006: £3.7 million) with net assets at that date of £36.1million (2006: £17.8 million).11. Current trading and prospects of Inspace On 10 December 2007, Inspace issued the following update on current trading andprospects: "Despite a more challenging second half year, overall trading is in line withmarket forecasts for the year ended 31 December 2007. As usual, there are issuesto be resolved before the accounts are closed, most notably the agreement ofannual performance-related incentive payments with clients. Whilst these arerunning at higher levels than normal, the Directors remain optimistic thatsatisfactory settlements will be reached.Social housingOur core Social Housing market remains robust, particularly in terms of newbuild activity which is expected to provide the majority of future revenues forthis division. With many good opportunities on the ground, sales andpreconstruction teams are working across a variety of framework and projectspecific bids, and conversion rates are good. Sourcing land and securingplanning consents remain the key frustrations for social housing customers,creating the main constraint on what might otherwise be higher growth rates.Decent Homes work continues to be difficult for Inspace to procure with pricinglevels becoming more aggressive as existing programmes draw to an end. This hasnow translated into growing competitiveness on maintenance tenders, in part dueto Decent Homes contractors migrating into this area. Affordable housingRecent uncertainty about house prices is now impacting our Affordable Housingdivision. In some instances, launch prices have been reduced in order to keepreservation levels at an acceptable level. Investor interest, which hastraditionally fed a material proportion of sales, has declined in broad termsalthough we are seeing some larger strategic investors prepared to speculate onmultiple unit deals in order to induce greater discounts. With just fourdevelopments currently on site, we are less exposed to short term marketfluctuations than the volume builders. One of those sites will be complete inthe first quarter of 2008 and is fully sold; the second, launched in the summer,is almost fully reserved. The two remaining sites have just been launched withall unit sales budgeted for the last quarter of 2008. Looking further ahead, thethree London Wide Initiative and Dee Park regeneration schemes provide thebackbone of our sales programme from 2009.Corporate assetsOur Corporate Assets division operates in two sectors: the property maintenancesector and the interior fit-out sector. The former remains robust in terms ofvolume, albeit the fragmented structure of the supply side and low barriers toentry continue to create a competitive pricing environment. Efforts to segmentour customer base, growing volumes with higher spending property portfolioholders and reducing volumes with those offering lower or less predicablespending patterns, continues and is progressing satisfactorily alongside theroll-out of the new technology platform aimed at improving efficiency.Interior fit-out remains our most volatile sector, being dependent upon thecommercial office market, particularly in central London. Whilst we have seengood growth during 2007, we are now seeing reduced confidence levels, acorresponding reduction in our sales pipeline and some pending orders beingshelved.Forward order bookThe forward order book at the year end is expected to be marginally lower thanour declared targets of 85 per cent. of revenue for the Social Housing divisionand 75 per cent. for the Corporate Assets division. The Social Housingshortfall, which relates mainly to maintenance activity, will be rectified if wesecure a maintenance contract with Birmingham City Council where a decision isexpected early in the New Year. The Corporate Assets shortfall relates mainly tointerior fit-out where we are more exposed approaching 2008 than we would haveliked. Experience has taught us that volumes can also improve quickly, but weare monitoring the position carefully and will retain the flexibility to reducecapacity if required.Revenues in the Affordable Housing division are becoming less predictable, witha noticeable reduction in viewings and reservations over recent weeks." Since 10 December 2007, Inspace has been advised by Birmingham City Council thatit is the Council's intention to award Inspace the housing maintenance contractfor the north area of the city for a period of four and a half years with thepossibility of a further three year extension. Subject to contracts beingconcluded, which cannot occur before 28 December 2007, the contract is expectedto contribute revenues of up to £100 million if extended for the full seven anda half year period. 12. Management and employees Save for as is described in paragraph 4 above, Willmott Dixon intends tocontinue to build upon the success of Inspace as a leading specialist within themarket for social and affordable housing and, in this respect, it has no currentintentions to either change the principal location of the operations of Inspaceor materially redeploy other significant assets within the business, although itmay consider any potential opportunities if and when they were to arise. Willmott Dixon attaches importance to the skills and experience of themanagement team and employees of Inspace. Willmott Dixon has thereforeconfirmed to the Independent Directors that the existing employment rights,including pension rights, of the employees of Inspace will be fully safeguardedand that it has no current intentions to materially change their conditions ofemployment. In the period following the Offer becoming or being declared unconditional inall respects, David Batchelor intends, at an appropriate time, to step down fromthe board of Inspace on specific terms to be agreed. David will only receive anypayments in relation to the termination of his appointment in line with anycontractual entitlement. Upon the Offer becoming or being declared unconditional in all respects andsubject to the passing of a shareholder resolution by Willmott Dixonshareholders, Willmott Dixon intends to implement a Group Reorganisation,pursuant to which Willmott Dixon Holdings (a newly formed company) will becomethe parent company of Willmott Dixon. If the Group Reorganisation does occur, a new board of directors will need to beappointed in respect of Willmott Dixon Holdings, whose members will be drawnfrom certain individuals currently serving on either the Willmott Dixon orInspace boards as follows: • Colin Enticknap (currently Group Chairman of Willmott Dixonand Executive Chairman of Inspace) will be appointed as a director and GroupChairman of Willmott Dixon Holdings; • Rick Willmott (currently Chief Executive Officer of WillmottDixon) will be appointed as a director and Group Chief Executive of WillmottDixon Holdings; • Andrew Telfer (currently Chief Financial Officer of Inspace) will be appointed as a director of Willmott Dixon Holdings; • Christopher Sheridan (currently Non-Executive Deputy Chairman of Inspace) will be appointed as a non-executive director of Willmott Dixon Holdings; • Stephen Dixon (currently a non-executive director of Willmott Dixon) will be appointed as a non-executive director of Willmott Dixon Holdings In addition, if the Group Reorganisation does occur, it is proposed that theboards of Willmott Dixon and Inspace will eventually be constituted as follows: Board of Willmott Dixon • Rick Willmott will remain as a director and will be appointedas Chairman of Willmott Dixon; • John Frankiewicz will remain as a director and will be appointed as Chief Executive Officer of Willmott Dixon; • Sir Michael Latham will remain as Non Executive Deputy Chairman of Willmott Dixon; • Duncan Canney will become a director of Willmott Dixon; • Duncan Forbes (currently a director of Inspace) will be appointed as a director of Willmott Dixon; • Colin Enticknap will resign as a director and Stephen Dixonwill resign as a non-executive director of Willmott Dixon Board of Inspace • Rick Willmott will be appointed as a director and Chairman ofInspace; • Chris Durkin will remain as a director and be appointed as Chief Executive Officer of Inspace; • Duncan Canney will become a director of Inspace • Andrew Telfer will remain as a director of Inspace; • Sir Michael Latham will be appointed as a Non Executive Deputy Chairman of Inspace; • Both Colin Enticknap and Duncan Forbes will resign as directors and Christopher Sheridan will resign as a non-executive director of Inspace It is not currently intended that those individuals who come to serve on theboards of Willmott Dixon Holdings, Willmott Dixon or Inspace will, in the shortterm, be offered any significantly improved conditions of service than theycurrently enjoy with Willmott Dixon or Inspace. In the event that the Offer becomes or is declared unconditional in all respectsand the Group Reorganisation does not occur, it is intended that, save for DavidBatchelor (whose intentions have been described above), the boards of WillmottDixon and Inspace will remain unchanged. Thereafter, Willmott Dixon would intendto put in place appropriate arrangements such that the management structure ofthe combined Willmott Dixon and Inspace businesses materially reflect themanagement structure that would have been in place had the proposed GroupReorganisation been effected. 13. Inspace Share Option Schemes The Offer will extend to any Inspace Shares issued or unconditionally allottedor issued whilst the Offer remains open for acceptance (or by such earlier dateas Willmott Dixon, subject to the Code, may decide), including any InspaceShares unconditionally allotted or issued upon exercise of options under theInspace Share Option Schemes. To the extent that such options are not soexercised, and if the Offer becomes or is declared unconditional in allrespects, Willmott Dixon will make appropriate proposals to holders of optionsin Inspace Shares in due course, to the extent required by the Code or thePanel. 14. Disclosure of interests in relevant securities of Inspace At the date of this announcement, Willmott Dixon owns approximately 10.3 percent. of the issued share capital of Inspace. Willmott Dixon's issued ordinaryshare capital is held by the shareholders listed below, all of whom are deemed,by the Panel, to be acting in concert with Willmott Dixon for the purposes ofthe Offer. Certain of the concert parties listed below do not hold WillmottDixon Shares but are, nevertheless, deemed to be acting in concert with WillmottDixon for the purposes of the Offer. In addition, certain of the concert partieslisted below also hold Inspace Shares. As regards the information disclosedbelow in respect of interests in Inspace Shares (excluding share options orother interests granted under Inspace Share Schemes) held by Willmott Dixonshareholders and the other concert parties listed below, Willmott Dixon and theWillmott Dixon Directors are reliant on those Willmott Dixon shareholders toaccurately provide such information. In some cases, that information has notbeen independently confirmed to Willmott Dixon by Willmott Dixon shareholdersand Willmott Dixon and the Willmott Dixon Directors have therefore needed tocompile the information, where it is available, from published sources, whichmay or may not be reliable. Registered Inspace % of total issued share capital ofHolder Shares Inspace Mrs D E Fisher 1,741,667 2.15%Mrs P AWillmott andMr Hill 0 0.00%Mr D Willmott 431,709 0.53%Mr J Willmott 431,709 0.53%Mr P Willmott 431,709 0.53%Mrs L Willmott 14,775 0.02%Mr W Willmott 431,709 0.53%Mr & Mrs RMoulton 2,490,738 3.07%Dr A Millar 1,273,238 1.57%Mr J FWillmott 918,544 1.13%Mrs P NWillmott 1,132,340 1.40%Mr P WWillmott 3,157,069 3.90%Miss SWillmott 1,893,133 2.34%RevereCharitableTrust 100,000 0.12%Mr P WWillmott & I RWoolfe No 1 540,901 0.67%Mr P WWillmott & I RWoolfe No 2 1,324,263 1.63%P W Willmott1992GrandchildrensTrust 1,001,650 1.24%Mrs P AWillmott 69,682 0.09%Mr N J Fisher 499,071 0.62%Mrs R Willmott 304,860 0.38%Mrs E A Joyce 250,000 0.31%Mr R JWillmott 7,395,625 9.13%Mr S I G Dixon 3,135,400 3.87%Mrs A J Maylin 435,515 0.54%Mr M G Dixon 435,515 0.54%Lady Dixon 5,330,665 6.58%Mr J W Bayliss 871,031 1.08%Mrs E RBayliss 783,927 0.97%Mrs K Larkin 871,031 1.08%Mrs M Carr/GCarr 114,431 0.14%Mr M A Organ 0 0.00%Mr G Runcie 62,548 0.08%Mr C Enticknap 3,561,496 4.40%Mr C Durkin 622,788 0.77%Mr A Telfer 329,173 0.41%Mr J Campion 282,501 0.35%Mr T Carpenter 282,501 0.35%Mrs S M Canney 35,616 0.04%Mrs C M Cantor 59,553 0.07%Mrs J Hart 0 0.00%Sir MichaelLatham 307,263 0.38%Mr D Canney 174,297 0.22%Mr B Drysdale 100,000 0.12%Mr JFrankiewicz 432,850 0.53%Mr M Hart 182,948 0.23%Ms WMcWilliams 96,648 0.12%Mr P Owen 75,195 0.09%Mrs K Owen 9,464 0.01%Mr M Tant 75,195 0.09%Mrs SEnticknap 643,832 0.79%EnticknapTrust 1 150,000 0.19%EnticknapTrust 2 150,000 0.19%EnticknapTrust 3 150,000 0.19%MrsT Willmott 92,500 0.11%Mrs M Telfer 161,115 0.20% Total 45,849,390 56.60% Note: The holding in Inspace Shares of Mr G Runcie of 62,548 Inspace Sharesincludes 52,548 Inspace Shares which have been transferred to his spouse, buthave not, at the date of this announcement, been registered in her name.As at the date of this announcement options or other interests over thefollowing Inspace Shares had been granted to or acquired by the followingpersons (who are deemed to be acting in concert with Willmott Dixon) under theInspace Share Schemes and remained outstanding: The Inspace plc Discretionary Share Option Scheme Registered Date of Exercise Number of Inspace Shares Exerciseholder Grant Price under option PeriodMr A 5.4.2006 £1.69 73,964 5.4.2009-Telfer 5.4.2016Mr A 28.3.2007 £1.585 75,000 28.3.2010-Telfer 28.3.2017Mr G 28.3.2007 £1.585 30,000 28.3.2010-Runcie 28.3.2017The Widacre Limited Employee Share Acquisition Scheme* Date of **Acquisition Number of Inspace Shares in ***VestingBeneficial Allocation Price which interested DateHolderMr C 17.1.2006 6.79 pence 122,788 2007DurkinMr C 17.1.2006 6.79 pence 122,788 2008DurkinMr J 6.6.2006 6.79 pence 73,673 2007CampionMr J 6.6.2006 6.79 pence 73,673 2008CampionMr T 6.6.2006 6.79 pence 73,673 2007CarpenterMr T 6.6.2006 6.79 pence 73,673 2008Carpenter \* The legal title to the Inspace Shares held under the Widacre Limited EmployeeShare Acquisition Scheme is held by Rathbone Jersey Trustees Limited and, untilsuch shares have vested, the individuals listed above hold a beneficial interestin such shares subject to the risk of forfeiture. *\* The acquisition price reflects the aggregate value payable by participants perInspace Share before they can obtain full ownership of the relevant shareswithout the risk of forfeiture. ***Inspace Shares vest, subject to the achievement of certain Widacre LimitedPBT targets, in the financial year to 31 December 2007 and the financial year to31 December 2008. As at the date of this announcement, save as disclosed above (including theirrevocable undertakings referred to above and the Inspace Shares representedthereby), neither Willmott Dixon nor, so far as the Directors of Willmott Dixonare aware, any person acting in concert with it, has any interest in or right tosubscribe for any relevant securities of Inspace nor are they party to any shortpositions (whether conditional or absolute and whether in money or otherwise)relating to relevant securities of Inspace, including any short positions underderivatives, agreements to sell or any delivery obligations or rights to requireanother person to purchase or take delivery of any relevant securities ofInspace nor does any such person have any arrangement in relation to relevantsecurities of Inspace. Neither Willmott Dixon nor the Directors of WillmottDixon nor, so far as Willmott Dixon is aware, any person acting in concert withWillmott Dixon, has borrowed or lent any relevant securities of Inspace. For these purposes, 'interest' includes any long economic exposure, whetherconditional or absolute, to changes in the prices of securities. A person istreated as having an 'interest' by virtue, inter alia, of the ownership orcontrol of securities or by virtue of any option in respect of, or derivativereferenced to, securities. 'Relevant securities' in Inspace include anysecurities of Inspace which are being offered for under the Offer or carryvoting rights, any equity share capital of Inspace and any securities of Inspacecarrying conversion or subscription rights into any of the foregoing. 15. Cancellation of trading, compulsory acquisition and re-registration If the Offer becomes or is declared unconditional in all respects and ifsufficient acceptances are received under the Offer, Willmott Dixon intends toexercise its rights pursuant to the provisions of Part 28 of the Companies Act2006 to acquire compulsorily the remaining Inspace Shares to which the Offerrelates on the same terms as the Offer. If Willmott Dixon acquires, by virtue of its shareholdings and acceptances ofthe Offer, Inspace Shares carrying at least 75 per cent. of the voting rights ofInspace, subject to the Offer becoming or being declared unconditional in allrespects, and subject to any applicable requirements of the AIM Market, as soonas practicable thereafter, Willmott Dixon intends to procure that Inspaceapplies to the AIM Market to cancel admission of its shares to trading on theAIM Market. The cancellation of admission to trading on AIM of Inspace Shares wouldsignificantly reduce the liquidity and marketability of any Inspace Shares heldby Inspace Shareholders who have not accepted the Offer. It is proposed that as soon as practicable following the Offer becoming or beingdeclared unconditional in all respects Inspace will be re-registered as aprivate company. 16. General Your attention is drawn to the further information contained in the Appendiceswhich form part of this announcement. The full text of the conditions and further terms of the Offer set out inAppendix 1 to this announcement forms part of, and should be read in conjunctionwith, this announcement. Appendix 2 to this announcement provides details of the basis of calculationsand sources of certain information included in this announcement. Appendix 3 to this announcement contains details of the irrevocable undertakingsreceived in relation to the Offer. Appendix 4 to this announcement contains definitions of certain terms used inthis announcement. The Offer Document setting out in full the terms and conditions of the Offer isexpected to be posted to Inspace Shareholders as soon as practicable and must,in any event, be posted to Inspace Shareholders not later than 28 days after thedate of this announcement unless otherwise agreed with the Panel. Enquiries: Seymour Pierce (Financial Adviser to Willmott Dixon)Douglas Harmer +44 (0) 20 7107 8000Mark Percy +44 (0) 20 7107 8000 Dresdner Kleinwort (Financial Adviser to Inspace)Chris Treneman +44 (0) 20 7623 8000Christian Littlewood +44 (0) 20 7623 8000Keith Welch +44 (0) 20 7623 8000 Seymour Pierce, which is authorised and regulated in the United Kingdom by theFinancial Services Authority is acting exclusively for Willmott Dixon inconnection with the Offer and no-one else and will not be responsible to anyoneother than Willmott Dixon for providing the protections afforded to clients ofSeymour Pierce nor for providing advice in relation to the Offer or any othermatter referred to in this announcement. Dresdner Kleinwort Limited, which is authorised and regulated by the FinancialServices Authority, is acting for Inspace (in the form of the IndependentDirectors) and for no-one else in connection with the Offer and will not beresponsible to anyone other than Inspace (in the form of the IndependentDirectors) for providing the protections afforded to clients of DresdnerKleinwort Limited nor for affording advice in relation to the Offer or any othermatter referred to in this announcement. This announcement is not intended to and does not constitute or form any part ofan offer to sell or an invitation to purchase or the solicitation of an offer tosubscribe for any securities or the solicitation of any vote or approval in anyjurisdiction pursuant to the Offer or otherwise. The Offer will be made solelythrough the Offer Document and, in the case of certificated Inspace Shares, theForm of Acceptance, which will together contain the full terms and conditions ofthe Offer, including details of how to accept the Offer. Any acceptance or otherresponse to the Offer should be made only on the basis of the informationcontained in the Offer Document and the Form of Acceptance. The release, distribution or publication of this announcement in jurisdictionsother than the UK may be restricted by law and therefore any persons who aresubject to the laws of any jurisdiction other than the UK should informthemselves about and observe any applicable requirements. Copies of thisannouncement and any documentation relating to the Offer are not being, and mustnot be, directly or indirectly, mailed or otherwise forwarded, distributed orsent in or into or from any Restricted Jurisdiction and persons receiving suchdocuments (including custodians, nominees and trustees) must not mail orotherwise forward, distribute or send such documents in or into or from aRestricted Jurisdiction. The Offer (unless otherwise determined by WillmottDixon and permitted by applicable law and regulation), will not be made,directly or indirectly, in or into, or by the use of the mails, or by any meansof instrumentality (including without limitation, telephonically orelectronically) of interstate or foreign commerce of, or any facilities of anational securities exchange of any Restricted Jurisdiction, and the Offer willnot be capable of acceptance from or within any Restricted Jurisdiction. This announcement, including information included or incorporated by referencein this announcement, may contain "forward-looking statements" concerningWillmott Dixon, Inspace and their respective subsidiaries. Generally, the words"will", "may", "should", "continue", "believes", "expects", "intends","anticipates" or similar expressions identify forward-looking statements. Theforward-looking statements involve risks and uncertainties that could causeactual results to differ materially from those expressed in the forward-lookingstatements. Many of these risks and uncertainties relate to factors that arebeyond the companies' abilities to control or estimate precisely, such as futuremarket conditions and behaviours of other market participants, and thereforeundue reliance should not be placed on such statements. Willmott Dixon andInspace assume no obligation and do not intend to update these forward-lookingstatements, except as required pursuant to applicable law. Dealing disclosure requirements Under the provisions of Rule 8.3 of the Code, if any person is, or becomes,'interested' (directly or indirectly) in 1 per cent. or more of any class of'relevant securities' of Inspace, all 'dealings' in any 'relevant securities' ofthat company (including by means of an option in respect of, or a derivativereferenced to, any such 'relevant securities') must be publicly disclosed by nolater than 3.30 p.m. (London time) on the Business Day following the date of therelevant transaction. This requirement will continue until the date on which theOffer becomes, or is declared, unconditional as to acceptances, lapses or isotherwise withdrawn or on which the 'Offer Period' otherwise ends. If two ormore persons act together pursuant to an agreement or understanding, whetherformal or informal, to acquire an 'interest' in 'relevant securities' ofInspace, they will be deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the Code, all 'dealings' in 'relevantsecurities' of Inspace by Willmott Dixon or Inspace, or by any of theirrespective 'associates', must be disclosed by no later than 12.00 noon (Londontime) on the London business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose 'relevantsecurities' 'dealings' should be disclosed, and the number of such securities inissue, can be found on the Panel's website at www.thetakeoverpanel.org.uk . 'Interests in securities' arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an 'interest' byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Code, which can also be found on thePanel's website. If you are in any doubt as to whether or not you are requiredto disclose a 'dealing' under Rule 8, you should consult the Panel. APPENDIX 1 CONDITIONS AND CERTAIN FURTHER TERMSOF THE OFFER The Offer will comply with the applicable rules and regulations of the Code andwill be governed by English law and will be subject to the jurisdiction of thecourts of England. In addition it will be subject to the terms and conditionsset out in this Appendix 1, the further terms set out in the Offer Document and,in relation to Inspace Shares held in certificated form, the related Form ofAcceptance. Conditions 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. (London time) on the first closing dateof the Offer (or such later time(s) and/or date(s) as Willmott Dixon may,subject to the rules of the Code or with the consent of the Panel, decide) inrespect of not less than 90 per cent. (or such lower percentage as WillmottDixon may decide) in nominal value of the Inspace Shares to which the Offerrelates and not less than 90 per cent. (or such lower percentage as WillmottDixon may decide) of the voting rights carried by the Inspace Shares to whichthe Offer relates, provided that this condition will not be satisfied unlessWillmott Dixon (together with its wholly owned subsidiaries) shall have acquiredor agreed to acquire (whether pursuant to the Offer or otherwise) directly orindirectly Inspace Shares carrying in aggregate more than 50 per cent. of thevoting rights then normally exercisable at general meetings of Inspace,including for this purpose (except to the extent, if any, required by the Panel)any such voting rights attaching to Inspace Shares that are unconditionallyallotted or issued before the Offer becomes or is declared unconditional as toacceptances, whether pursuant to the exercise of any outstanding subscription orconversion rights or otherwise.For the purposes of this condition: (i) Inspace Shares which have been unconditionally allottedshall be deemed to carry the voting rights they will carry upon issue; (ii) the expression "Inspace Shares to which the Offer relates"shall be construed in accordance with Part 28 of the Act; and (iii) valid acceptances shall be deemed to have been received inrespect of any Inspace Shares which Willmott Dixon shall, pursuant to section979 of the Act, be treated as having acquired or contracted to acquire by virtueof acceptance of the Offer; (b) no Third Party having intervened (as defined below) and there notcontinuing to be outstanding any statute, regulation or order of any Third Partyin each case which would or might reasonably be expected, to an extent which ismaterial to the Wider Inspace Group or the Wider Willmott Dixon Group, as thecase may be, each taken as a whole to: (i) make the Offer, its implementation or the acquisition orproposed acquisition by Willmott Dixon of any shares or other securities in, orcontrol of, Inspace or any member of the Wider Inspace Group void, illegal orunenforceable in any relevant jurisdiction, or otherwise directly or indirectlyrestrain, prevent, prohibit, restrict or delay the same or impose additionalconditions or obligations with respect to the Offer or such acquisition, orotherwise impede, challenge or interfere with the Offer or such acquisition, orrequire amendment to the terms of the Offer or the acquisition or proposedacquisition of any Inspace Shares or the acquisition of control of Inspace orthe Wider Inspace Group by Willmott Dixon; (ii) limit or delay, or impose any material limitations on, theability of Willmott Dixon or any member of the Wider Inspace Group to acquire orto hold or to exercise effectively, directly or indirectly, all or any rights ofownership in respect of shares or other securities in, or to exercise voting ormanagement control over, any member of the Wider Inspace Group; (iii) require, prevent or materially delay the divestiture byWillmott Dixon of any shares or other securities in any member of the WiderInspace Group; (iv) require, prevent or materially delay the divestiture either byWillmott Dixon or by any member of the Wider Inspace Group of all or anymaterial portion of their respective businesses, assets or properties or limitthe ability of any of them to conduct any of their respective businesses or toown or control any of their respective assets or properties or any portionthereof, in any such case in a manner or to an extent which is material in thecontext of Willmott Dixon Group taken as a whole or, as the case may be, theWider Inspace Group taken as a whole; (v) except pursuant to Part 28 of the Act, require Willmott Dixonor any member of the Wider Inspace Group to acquire, or to offer to acquire, anyshares or other securities (or the equivalent) in any member of either theWillmott Dixon Group or the Wider Inspace Group owned by any third party; (vi) materially limit the ability of Willmott Dixon or any member ofthe Wider Inspace Group to conduct or integrate its business, or any part of it,with the businesses or any part of the businesses of any other member of theWider Inspace Group; or (vii) otherwise materially and adversely affect the financial ortrading position of any member of the Wider Inspace Group or, as the case maybe, the Wider Inspace Group taken as a whole, and all applicable waiting and other time periods during which any Third Partycould intervene under the laws of any relevant jurisdiction having expired,lapsed or been terminated. (c) all Authorisations which are necessary or are reasonably considerednecessary by Willmott Dixon in any relevant jurisdiction for or in respect ofthe Offer or the acquisition or proposed acquisition of any shares or othersecurities in (except pursuant to Part 28 of the Act), or control or managementof, Inspace or any other member of the Wider Inspace Group by Willmott Dixon orthe carrying on by any member of the Wider Inspace Group of its business havingbeen obtained, in terms and in a form reasonably satisfactory to Willmott Dixon,from all appropriate Third Parties, in each case, where the absence of suchAuthorisation would have a material adverse effect on the Wider Inspace Group orthe Wider Willmott Dixon Group, as the case may be, each taken as a whole, andall such Authorisations remaining in full force and effect and there being nonotice or intimation of any intention to revoke, suspend, restrict, modify ornot to renew any of the same; (d) save as Publicly Announced or Disclosed there being no provision ofany arrangement, agreement, licence, permit, franchise or other instrument towhich any member of the Wider Inspace Group is a party, or by or to which anysuch member or any material part of its assets is or are or may be bound,entitled or subject or any circumstance, which, in each case as a consequence ofthe Offer or the acquisition or proposed acquisition of any shares or othersecurities in, or control of, Inspace or any other member of the Wider InspaceGroup by Willmott Dixon or otherwise, could or might reasonably be expected (inany case, to an extent which is or in a manner which is material to the WiderInspace Group or the Wider Willmott Dixon Group, as the case may be, each takenas a whole) to result in: (i) any amount of monies borrowed by or any other indebtedness orliabilities (actual or contingent) of, or any grant available to, any member ofthe Wider Inspace 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 Inspace Group to borrow monies or incur any indebtednessbeing withdrawn or inhibited or becoming capable of being withdrawn; (ii) the creation or enforcement of any mortgage, charge or othersecurity interest over the whole or any substantial part of the business,property, assets or interests of any member of the Wider Inspace Group or anysuch mortgage, charge or other security interest (wherever created, arising orhaving arisen) becoming enforceable; (iii) any such arrangement, agreement, licence, permit, franchise orinstrument, or the rights, liabilities, obligations or interests of any memberof the Wider Inspace Group thereunder, being, or becoming capable of being,terminated or adversely modified or affected or any adverse action being takenor any obligation or liability arising thereunder; (iv) any asset or interest of any member of the Wider Inspace Groupbeing or falling to be disposed of or ceasing to be available to any member ofthe Wider Inspace Group or any right arising under which any such asset orinterest could be required to be disposed of or could cease to be available toany member of the Wider Inspace Group; (v) any member of the Wider Inspace Group ceasing to be able tocarry on business under the name which it presently carries on its business; (vi) the creation of any liabilities (actual or contingent) by anymember of the Wider Inspace Group; (vii) the rights, liabilities, obligations or interests of any memberof the Wider Inspace Group under any such arrangement, agreement, licence,permit, franchise or other instrument or the interests or business of any suchmember in or with any other person, firm, company or body (or any arrangement orarrangements relating to any such interests or business) being terminated oradversely modified or affected; or (viii) the financial or trading position or the value of any member ofthe Wider Inspace Group being prejudiced or adversely affected; and (ix) no event having occurred which, under any provision of any sucharrangement, agreement, licence, permit or other instrument, would, or mightreasonably be expected to, result in any of the events or circumstances whichare referred to in paragraphs (i) to (viii) of this condition (d); (e) since 31 December 2006 and except as otherwise Publicly Announcedor Disclosed, no member of the Wider Inspace Group having (in any case, to anextent which or in a manner which is material to the Wider Inspace Group or theWider Willmott Dixon Group, as the case may be, each taken as a whole): (i) issued or agreed to issue, or authorised the issue of,additional shares of any class, or securities convertible into or exchangeablefor, or rights, warrants or options to subscribe for or acquire, any such sharesor convertible securities or transferred or sold any shares out of treasury,other than as between Inspace and wholly-owned subsidiaries of Inspace and otherthan any shares issued or shares transferred from treasury upon the exercise ofany options granted under any of the Inspace Share Option Schemes; (ii) purchased or redeemed or repaid any of its own shares or othersecurities or reduced or made any other change to any part of its share capital; (iii) recommended, declared, paid or made any dividend or otherdistribution whether payable in cash or otherwise or made any bonus issue, otherthan a distribution by any wholly-owned subsidiary of Inspace; (iv) except than as between members of the Inspace Group, made,committed to make, authorised, proposed or announced any change in its loancapital; (v) (other than any acquisition or disposal in the ordinary courseof business and/or a transaction between Inspace and a wholly owned subsidiaryof Inspace or between such wholly owned subsidiaries) merged with, demerged oracquired any body corporate, partnership or business or acquired or disposed ofor transferred, mortgaged, charged or created any security interest over anyassets or any right, title or interest in any assets, including shares in anyundertaking and trade investments, or authorised the same; (vi) issued, authorised or approved the issue of, or authorisationof or made any change in or to, any debentures; (vii) entered into, varied, or authorised any agreement, transaction,arrangement or commitment (whether in respect of capital expenditure orotherwise) which: (A) is of a long term, onerous or unusual nature or magnitude(or which could be reasonably expected to involve an obligation of such a natureor magnitude); or (B) would or might reasonably be expected to restrict thebusiness of any member of the Wider Inspace Group; or (C) is other than in the ordinary course of business; (viii) entered into, implemented, effected or authorised any merger,demerger, reconstruction, amalgamation, scheme, commitment or other transactionor arrangement in respect of itself or another member of the Wider Inspace Groupotherwise than in the ordinary course of business; (ix) entered into or varied the terms of, any contract, agreement orarrangement with any of the directors or senior executives of any member of theWider Inspace Group; (x) 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 or over all or any part of its assets and revenues or anyanalogous proceedings in any jurisdiction or appointed any analogous person inany jurisdiction; (xi) 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; (xii) otherwise than in the ordinary course of business, waived orcompromised any claim ; (xiii) made any alteration to its memorandum or articles of association; (xiv) made or agreed or consented to: (A) any significant change: (1) to the terms of the trust deeds constituting the pension scheme(s)established for its directors, employees or their dependants; or (2) to the benefits which accrue or to the pensions which are payablethereunder; or (3) to the basis on which qualification for, or accrual or entitlement tosuch benefits or pensions are calculated or determined; or (4) to the basis upon which the liabilities (including pensions) of suchpension schemes are funded or made; or (B) any change to the trustees including the appointment of atrust corporation but excluding any appointment of a member nominated trustee inaccordance with existing nomination arrangements or one company appointment tofill a trustee vacancy, (xv) proposed, agreed to provide or modified the terms of any share optionscheme or incentive scheme of the Wider Inspace Group; (xvi) save as between Inspace and its wholly-owned subsidiaries, granted anymaterial lease in respect of any of the leasehold or freehold property owned oroccupied by it or transferred or otherwise disposed of any such property; or (xvii) entered into any agreement, commitment or arrangement or passed anyresolution or proposed or announced any intention with respect to any of thetransactions, matters or events referred to in this condition (e); (f) except as Publicly Announced or Disclosed: (i) there having been no adverse change or deterioration in the business,assets, financial or trading positions or profit of any member of the WiderInspace Group to an extent which is material in the context of the Wider InspaceGroup or the Wider Willmott Dixon Group, as the case may be, each taken as awhole; (ii) no contingent or other liability of any member of the Wider Inspace Grouphaving arisen or become apparent or increased which is material in the contextof the Wider Inspace Group or the Wider Willmott Dixon Group, as the case maybe, each taken as a whole; (iii) no litigation, arbitration proceedings, prosecution or other legalproceedings to which any member of the Wider Inspace Group is may or become aparty (whether as claimant, defendant or otherwise) having been announced orinstituted by or against or remaining outstanding against or in respect of anymember of the Wider Inspace Group which in any case might reasonably be expectedto materially and adversely affect the Wider Inspace Group or the Wider WillmottDixon Group, as the case may be, each taken as a whole; and (iv) (other than as a result of the Offer) no enquiry or investigation by, orcomplaint or reference to, any Third Party having been announced or institutedby or against or remaining outstanding against or in respect of any member ofthe Wider Inspace Group, which in any case materially and adversely affects theWider Inspace Group or the Wider Willmott Dixon Group, as the case may be, eachtaken as a whole. (g) except as Publicly Announced or Disclosed, Willmott Dixon nothaving discovered: (i) that any financial or business or other informationconcerning the Wider Inspace Group disclosed at any time by or on behalf of anymember of the Wider Inspace Group, whether publicly or to Willmott Dixon, ismaterially misleading or contains any misrepresentation of fact or omits tostate a fact necessary to make any information contained therein not materiallymisleading and which was not subsequently corrected by specific disclosureeither publicly or otherwise to Willmott Dixon to an extent which in any case ismaterial in the context of the Wider Inspace Group taken as a whole; or (ii) that any member of the Wider Inspace Group is subject to anyliability (actual or contingent) which is not disclosed in Inspace's annualreport and accounts for the financial year ended 31 December 2006 or hasotherwise been Publicly Announced or Disclosed and which in any case is materialin the context of the Wider Inspace Group or the Wider Willmott Dixon Group, asthe case may be, each taken 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 Inspace Groupto an extent which is material in the context of the Wider Inspace Group or theWider Willmott Dixon Group, as the case may be, each taken as a whole. (h) except to the extent Publicly Announced or Disclosed, WillmottDixon not having discovered: (i) that any past or present member of the Wider Inspace Grouphas not complied with any applicable legislation or regulations of anyjurisdiction with regard to the use, treatment, handling, storage, transport,release, disposal, discharge, spillage, leak or emission of any waste orhazardous substance or any substance likely to impair the environment or harmhuman health, or otherwise relating to environmental matters or the health andsafety of any person, or that there has otherwise been any such use, treatment,handling, storage, transport, release, disposal, discharge, spillage, leak oremission (whether or not this constituted a non-compliance by any person withany legislation or regulations and wherever the same may have taken place)which, in any case, would be reasonably likely to give rise to any liability(whether actual or contingent) or cost on the part of any member of the WiderInspace Group; or (ii) that there is, or is reasonably likely to be, any liability,whether actual or contingent, to make good, repair, reinstate or clean up anyproperty now or previously owned, occupied or made use of by any past or presentmember of the Wider Inspace Group or any other property or any controlled watersunder any environmental legislation, regulation, notice, circular, order orother lawful requirement of any relevant authority or third party or otherwise, which in any case is material in relation to the Wider Inspace Group or theWider Willmott Dixon Group, as the case may be, each taken as a whole. (i) For the purpose of these conditions: (i) "Third Party" means any central bank, government, governmentdepartment or governmental, quasi-governmental, supra-national, statutory,regulatory or investigative body, authority (including any national anti-trustor merger control authority), court, trade agency, association, institution orenvironmental body or any other statutory person or body whatsoever in anyrelevant jurisdiction; (ii) a Third Party shall be regarded as having "intervened" if it hasdecided to take, institute, implement or threaten any action, proceeding, suit,investigation, enquiry or reference or made, proposed or enacted any statute,regulation, decision or order or taken any measures or other steps or requiredany action to be taken or information to be provided and "intervene" shall beconstrued accordingly; and (iii) "Authorisations" means authorisations, orders, grants,recognitions, determinations, certificates, confirmations, consents, licences,clearances, permissions and approvals. Subject to the requirements of the Panel, Willmott Dixon reserves the right towaive in whole or in part all or any of conditions (b) to (i) inclusive. Conditions (b) to (i) inclusive must be satisfied as at, or waived on or beforemidnight on the 21st day after the later of the first closing date of the Offerand the date on which condition (a) is fulfilled (or, in each case, such laterdate as Willmott Dixon, with the consent of the Panel, may decide). WillmottDixon shall be under no obligation to waive or determine to be, or treat as,fulfilled, any of conditions (b) to (i) inclusive by a date earlier than thedate specified above for the fulfilment thereof notwithstanding that the otherconditions of the Offer may at such earlier date have been waived or fulfilledand that there are at such earlier date no circumstances indicating that any ofsuch conditions may not be capable of fulfilment. Except with the Panel's consent Willmott Dixon will not invoke any of the aboveconditions (except for condition (a)) so as to cause the Offer not to proceed,to lapse or be withdrawn unless the circumstances which give rise to the rightto invoke the relevant conditions are of material significance to Willmott Dixonin the context of the Offer. If Willmott Dixon is required by the Panel to make an offer for the InspaceShares under the provisions of Rule 9 of the Code, Willmott Dixon may make suchalterations to the terms and conditions of the Offer, including to condition(a), as are necessary to comply with the provisions of that Rule. Further Terms of the Offer The Offer will lapse if it is referred to the Competition Commission before 1.00p.m on the later of the first closing date of the Offer and the date on whichthe Offer becomes or is declared unconditional as to acceptances (whichever isthe later). Inspace Shares will be acquired by Willmott Dixon fully paid and free from allliens, equitable interests, charges, encumbrances and other third party rightsof any nature whatsoever and together with all rights attaching to them,including the right to receive and retain all dividends and distributions (ifany) declared, made or payable after the date of this announcement. The availability of the Offer to persons not resident in the United Kingdom maybe affected by the laws of the relevant jurisdictions. Persons who are notresident in the United Kingdom should inform themselves about and observe anyapplicable requirements. To permit Inspace Shareholders resident in Canada to accept the Offer, WillmottDixon has applied to the relevant securities regulatory authorities for ordersexempting the Offer from applicable take-over bid rules in Canada. WillmottDixon may treat as invalid any acceptance of the Offer made by a shareholderresident in Canada unless Willmott Dixon is satisfied in its sole discretionthat it has received the necessary exemptions from such take-over bid rules Except with the Panel's consent, Willmott Dixon will not invoke any of the aboveconditions (except for condition (a)) so as to cause the Offer not to proceed,to lapse or be withdrawn unless the circumstances which give rise to the rightto invoke the relevant conditions are of material significance to Willmott Dixonin the context of the Offer. If Willmott Dixon is required by the Panel to make an offer for the InspaceShares under the provisions of Rule 9 of the Code, Willmott Dixon may make suchalterations to the terms and conditions of the Offer as are necessary to complywith the provisions of that Rule. APPENDIX 2 BASES AND SOURCES OF INFORMATION (a) The value attributed to the existing issued share capital ofInspace is based upon the 81,001,690 Inspace Shares in issue on the date of thisannouncement. (b) Unless otherwise stated, all prices for Inspace Shares have beenderived from the AIM Appendix to the Daily Official List and represent closingmiddle market prices on the relevant date. (c) References to a percentage of Inspace Shares are based on thenumber of Inspace Shares in issue as set out in paragraph (a) above. APPENDIX 3 IRREVOCABLE UNDERTAKINGS The following holders of Inspace Shares have given irrevocable undertakings toaccept the Offer (or, in certain cases, to procure the acceptance of the Offerby persons connected with them): Name Number of Inspace Shares % of issued share capital of Inspace AxaFramlingtonInvestmentManagementLimited 5,082,878 6.28%Mr J W Bayliss1 1,654,958 2.04%Mr D Canney 2 209,913 0.26%Mr J Campion 282,501 0.35%Mr T Carpenter 282,501 0.35%Mr M G Dixon 435,515 0.54%Mr S I G Dixon 3,135,400 3.87%Lady Dixon 5,330,665 6.58%Mr C Durkin 622,788 0.77%Mr C Enticknap3 4,205,328 5.19%Mrs D E Fisher 1,741,667 2.15%D Forbes 540,183 0.67%Mr JFrankiewicz 432,850 0.53%Sir MichaelLatham 307,263 0.38%Mrs A J Maylin 435,515 0.54%RevereCharitableTrust 100,000 0.12%Ms WMcWilliams 96,648 0.12%C Sheridan 4 100,000 0.12%Mr A Telfer 5 490,288 0.61%Mr J FWillmott 6 1,223,404 1.51%Mrs P NWillmott 1,132,340 1.40%Mr P WWillmott 3,157,069 3.90%Mr P WWillmott & I RWoolfe No 1 540,901 0.67%Mr P WWillmott & I RWoolfe No 2 1,324,263 1.63%P W Willmott1992GrandchildrensTrust 1,001,650 1.24%Mr R JWillmott 7 7,488,125 9.24%Miss SWillmott 1,893,133 2.34% Total 43,247,746 53.39% 1 - Including a procurement obligation in respect of783,927 Inspace Shares held by his spouse2 - Including a procurement obligation in respect of35,616 Inspace Shares held by his spouse3 - Including a procurement obligation in respect of643,832 Inspace Shares held by his spouse4 - Including a procurement obligation in respect of50,000 Inspace Shares held by his spouse5 - Including a procurement obligation in respect of161,115 Inspace Shares held by his spouse6 - Including a procurement obligation in respect of304,860 Inspace Shares held by his spouse7 - Including a procurement obligation in respect of92,500 Inspace Shares held by his spouse All of these undertakings will continue to be binding even if a competing offeris made for Inspace which exceeds the value of the Offer and even if such higheroffer is recommended for acceptance by the Board of Inspace.In addition, Willmott Dixon has received a further irrevocable undertaking toaccept the Offer, from AXA Framlington Investment Management Limited, in respectof 5,082,878 Inspace Shares, representing approximately 6.3 per cent. of theexisting issued share capital of Inspace. This undertaking will cease to bebinding if a competing offer is announced for Inspace which exceeds the value ofthe Offer by not less than 10 per cent.In aggregate, therefore, Willmott Dixon has received irrevocable undertakings toaccept the Offer (or procure the acceptance of the Offer) in respect of43,247,746 Inspace Shares, representing approximately 53.4 per cent. of theexisting issued share capital of Inspace. All of the above irrevocable undertakings will lapse if an event occurs whichmeans that Willmott Dixon is no longer required by the Code to proceed with theOffer or the Offer lapses or is withdrawn. APPENDIX 4 DEFINITIONS The following definitions apply throughout this announcement unless the contextrequires otherwise. "Act" Companies Act 1985 (as amended) or, where relevant, the Companies Act 2006 and where any specific provision of the Companies Act 1985 is referred to, this will include, where relevant, any equivalent provision of the Companies Act 2006"AIM" the AIM Market of the London Stock Exchange"Board" the board of directors of Inspace or the board of directors of Willmott Dixon, as the context so requires and the term "Inspace Board" or "Willmott Dixon Board" shall be construed accordingly"Business Day" any day (other than a public holiday, Saturday or Sunday) on which clearing banks in London are open for normal business"Closing Price" the closing middle market quotation of a Inspace Share as derived from the AIM Appendix to the Daily Official List of the London Stock Exchange"Code" The City Code on Takeovers and Mergers"Directors" the directors of Inspace or the directors of Willmott Dixon at the date of this announcement, as the context so requires and the term "Inspace Directors" or "Willmott Dixon Directors" shall be construed accordingly"Dresdner Dresdner Kleinwort LimitedKleinwort""EEA" the European Economic Area"Form of the form of acceptance and authority relating to the OfferAcceptance" which will accompany the Offer Document when issued"Group apossible reorganisation of the Willmott Dixon Group,Reorganisation" intended (subjected to certain conditions) to be effected as soon as reasonably practicable following the Offer becoming or being declared unconditional in all respects, pursuant to whichWillmott Dixon Holdings would become the parent company of Willmott Dixon"Independent David Batchelor, Duncan Forbes and Christopher SheridanDirectors" or the"IndependentCommittee""Inspace" or "the Inspace PlcCompany""Inspace Group" Inspace and its subsidiaries and subsidiary undertakings"Inspace holders of Inspace SharesShareholders""Inspace Shares" the existing unconditionally allotted or issued and fully paid ordinary shares of 2 pence each in the capital of Inspace and any further shares which are unconditionally allotted or issued before the date on which the Offer closes (or such earlier date as Willmott Dixon (subject to the City Code) may decide not being earlier than the date on which the Offer becomes or is declared unconditional to acceptances) but excluding in both cases any shares held as treasury shares on such date as Willmott Dixon may determine before the Offer closes"Inspace Share the Inspace plc Discretionary Share Option Scheme and theOption Scheme(s) Inspace Limited Enterprise Management Incentive Scheme""Inspace Share the Inspace Limited Enterprise Management Incentive Scheme,Scheme(s)" the Inspace plc Discretionary Share Option Scheme, the Inspace plc Share Incentive Plan and the Widacre Limited Employee Share Acquisition Scheme"Listing Rules" the rules and regulations made by the Financial Services Authority in its capacity as the UK Listing Authority under the Financial Services and Markets Act 2000, and contained in the UK Listing Authority's publication of the same name"London Stock London Stock Exchange plcExchange""Offer" the recommended offer to be made by Willmott Dixon on the terms and subject to the conditions set out in the Offer Document and the Form of Acceptance and, where the context so requires, any subsequent revision, variation, extension, or renewal of such offer"Offer Document" the document to be published and sent to Inspace Shareholders containing the Offer"Offer Period" the offer period (as defined in the Code) relating to Inspace, which commenced on 10 December 2007"Offer Price" 183 pence per Inspace Share"Panel" The Panel on Takeovers & Mergers"Publicly specifically disclosed in the annual report and accounts forAnnounced or Inspace for the year ended 31 December 2006 or in thisDisclosed" announcement or in any other announcement made to a Regulatory Information Service since the date of such report and accounts or as specifically disclosed in writing to Willmott Dixon or its advisers prior to the date of this announcement"Proposed an underwritten pre-emptive equity issue, intended to beUnderwritten effected as soon as reasonably practicable following theEquity Issue" Offer becoming or being declared unconditional in all respects, in Willmott Dixon or Willmott Dixon Holdings (following aGroupReorganisation), in order to partially refinance the bank borrowing being utilised to finance the Offer"Regulatory any of the services set out in Appendix 3 to the ListingInformation RulesService""Restricted subject always to the requirements of Rule 30.3 of the CodeJurisdiction" in relation to the distribution of offer documentation to jurisdictions outside the UK, whether inside or outside the EEA, any jurisdiction where extension or acceptance of the Offer would violate the law of that jurisdiction"Seymour Pierce" Seymour Pierce Limited, financial advisor to Willmott Dixon"Substantial a direct or indirect interest in 20 per cent. or more of theInterest" voting or equity capital (or equivalent) of an undertaking"UK or United the United Kingdom of Great Britain and Northern Ireland (andKingdom" its dependent territories)"UK Listing the Financial Services Authority acting in its capacity asAuthority or the competent authority for the purposes of Part VI of theUKLA" Financial Services and Markets Act 2000"Wider Inspace Inspace and the subsidiaries and subsidiary undertakings ofGroup" Inspace and associated undertakings (including any joint venture, partnership, firm or company in which any member of the Inspace Group is interested or any undertaking in which Inspace and such undertakings (aggregating their interests) have a Substantial Interest)"Wider Willmott Willmott Dixon and the subsidiaries and subsidiaryDixon Group" undertakings of Willmott Dixon and associated undertakings (including any joint venture, partnership, firm or company in which any member of the Willmott Dixon Group is interested or any undertaking in which Willmott Dixon and such undertakings (aggregating their interests) have a Substantial Interest)"Willmott Dixon" Willmott Dixon Limited, a company incorporated under the laws of England and Wales with registered number 00198032"Willmott Dixon Willmott Dixon and its subsidiaries and subsidiaryGroup" undertakings"Willmott Dixon Willmott Dixon Holdings Limited, a newly incorporated privateHoldings" limited company incorporated under the laws of England and Wales with registered number 6454113, which may become the parent company of Willmott Dixon pursuant to the Group Reorganisation"Willmott Dixon the ordinary shares of £1 each in the capital of WillmottShares" Dixon The terms "subsidiary" and "subsidiary undertaking", "undertaking" and"associated undertaking" have the meanings given by the Act (but for thispurpose ignoring paragraph 20(1)(b) of Schedule 4A of the Act. All references to time in this document are to London time. Words importing the singular shall include the plural and vice versa, and wordsimporting the masculine gender shall include the feminine or neutral gender. This information is provided by RNS The company news service from the London Stock Exchange
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