NTA.L Regulatory News (NTA)

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Northacre PLC

("Northacre" or "the Company")

Proposed Open Offer and Cash Box Acquisition

Northacre is pleased to announce that it has today posted to Shareholders a circular (the "Circular"), setting out proposals whereby the Company will, conditional upon, inter alia, approval by Shareholders, raise a total of approximately £12.5 million (before expenses)(the "Fundraising") by way of:

· an Open Offer for 5,177,968 New Ordinary Shares; and

· the acquisition from Spadille, the Company's majority shareholder, of a new company which has not traded and whose sole asset will (prior to the Company entering into the Acquisition Agreement or it becoming effective) be cash of approximately £8.4 million, in consideration for the issue to Spadille of 10,433,927 Consideration Shares

in each case at a price of 80 pence per New Ordinary Share, representing a premium of 3.2 per cent. to the Closing Price per Existing Ordinary Share on 4 December 2013.

The net proceeds of the Fundraising will provide the Company with a significantly strengthened balance sheet, which the Directors believe is necessary in order to enhance the Company's ability to secure and fund development opportunities, as and when they arise, in a highly competitive market.

The Open Offer has been proposed so as to provide Qualifying Shareholders with an opportunity to participate in the Fundraising and to maintain their percentage shareholdings in the Enlarged Share Capital as nearly as is practically possible. To facilitate this, Spadille have undertaken not to participate in the Open Offer. The Open Offer is fully underwritten by Spadille.

Further details of the Fundraising, including the terms and conditions of the Open Offer and what action Shareholders may take, are set out in the Circular. A copy of the Circular will be made available on the Company's website (www.northacre.com) and extracts thereof are set out below.

Unless otherwise stated, terms and expressions defined in the Circular have the same meaning in this announcement.

Enquiries:

Northacre PLC Tel: 020 7349 8000

Klas Nilsson (Non-Executive Chairman)

Niccolò Barattieri di San Pietro (Chief Executive Officer)

finnCap Ltd Tel: 020 7220 0500

Stuart Andrews

Henrik Persson

The information reproduced below is extracted from the Circular as has been posted to Shareholders today.  The full Circular will shortly be available on the Company's website: www.northacre.com

Cash Box Acquisition, Open Offer and Notice of General Meeting 1. INTRODUCTION

Northacre has today announced that it proposes to raise, in total, approximately £12.5 million (before expenses) by:

· the issue of 5,177,968 new Ordinary Shares (being the Open Offer Shares) at the Offer Price pursuant to the Open Offer (in respect of approximately £4.1 million); and

· the acquisition from Spadille of the entire issued share capital of the Cash Box Company, a company whose sole asset is intended to be cash of approximately £8.4 million, in consideration for which the Company proposes to issue 10,433,927 new Ordinary Shares, being the Consideration Shares, at the Offer Price.

The net proceeds of the Open Offer and the cash to which the Company will have access subsequent to the Cash Box Acquisition will provide the Company with a significantly strengthened balance sheet, which the Directors believe will enable the Company more easily to secure and fund development opportunities. Further information on the background and use of proceeds is set out below.

The Company has agreed to issue the Consideration Shares at the Offer Price of 80 pence per new Ordinary Share. The Offer Price represents a premium of 3.2 per cent. to the Closing Price of 77.5 pence per Existing Ordinary Share on 4 December 2013, being the last practicable date before the posting of this document.

The Directors are committed to fully safeguarding the pre-emption rights of Shareholders, and therefore have proposed the Open Offer at the Offer Price to provide Qualifying Shareholders with an opportunity to participate in the proposed issue of new Ordinary Shares and to maintain their percentage shareholdings in the Enlarged Share Capital (as it will be following the issue of the Open Offer Shares and the Consideration Shares) as nearly as is practically possible at the same percentage as that held by them prior to the issue of the New Ordinary Shares.

In order to achieve this, Spadille, which currently holds 17,861,400 Existing Ordinary Shares, representing approximately 66.8 per cent. of the Existing Ordinary Shares, has irrevocably undertaken not to apply for any Open Offer Shares under the Open Offer, which will result in approximately 3,460,820 Open Offer Shares being available under the Excess Application Facility. 

Under the Open Offer, the Company is providing all Qualifying Shareholders with the opportunity to subscribe for an aggregate of 5,177,968 Open Offer Shares, to raise approximately £4.1 million before expenses, on the basis set out below at 80 pence per Open Offer Share, payable in full on acceptance:

(a) 1.9376 Open Offer Shares for every 10 Existing Ordinary Shares held by Qualifying Shareholderson the Record Date and so in proportion for any other number of Ordinary Shares then held; and

(b) Excess Shares over and above their Open Offer Entitlements through the Excess Application Facility up to a maximum of the relevant Excess Open Offer Entitlement Limit.

The total number of Excess Offer Entitlements available to each Qualifying Shareholder, together with each Qualifying Shareholder's Open Offer Entitlements, have been calculated such as to provide Qualifying Shareholders with an opportunity to maintain their percentage shareholdings in the Enlarged Share Capital as nearly as is practically possible.

Fractions will be rounded down to the nearest whole number.

In order to comply with the provisions of the Companies Act, the offer of Open Offer Shares to Qualifying Non-EEA Shareholders (being those who have no registered address in the European Economic Area and have not given to the Company any address within the European Economic Area for the service of notices), will be made pursuant to section 562(3) of the Companies Act by way of a notice in the London Gazette. Such Qualifying Non-EEA Shareholders should see paragraphs 8 and 9 of Part 2 of this document for further information.

The Open Offer is being underwritten by Spadille. Any Open Offer Shares not taken up by Qualifying Shareholders will be issued by the Company to Spadille at the Offer Price pursuant to the Underwriting Agreement.

As the allotment and issue of the New Ordinary Shares will exceed the Directors' existing authority to allot shares, a General Meeting is being called to seek Shareholders' approval to grant the required authority to enable the Directors to complete the Open Offer and the Cash Box Acquisition. The Resolution will be put to the General Meeting of the Company to be held at 10.00 a.m. on Monday, 23 December 2013. The Notice convening the General Meeting is set out at the end of this document and a Form of Proxy is also enclosed for you to complete. This letter includes an explanation of the Resolution.

The Open Offer is conditional upon the approval by Shareholders of the Resolution which will be proposed at the General Meeting, the Cash Box Acquisition being completed and on Admission of the Open Offer Shares. If these conditions are not fulfilled by 24 December 2013, or such later date as the Company and finnCap may agree (not being later than 10 January 2014), the Open Offer as currently envisaged will not proceed.

The Cash Box Acquisition is conditional upon the approval by Shareholders of the Resolution which will be proposed at the General Meeting and on Admission of the Consideration Shares. If these conditions are not fulfilled by 24 December 2013, or such later date as the Company and Spadille may agree (not being later than 10 January 2014), the Cash Box Acquisition, and consequently the Open Offer, as currently envisaged will not proceed.

The purpose of this document is to explain the background to the Open Offer and the Cash Box Acquisition and to set out the reasons why the Board believes that they are in the best interests of the Company and its Shareholders.

2. INFORMATION ON THE COMPANY

Northacre is engaged in property development, development management and the provision of interior design services for high quality residential property schemes, with recent such work having been focused on attractive developments in sought-after areas of London. Its work to date has included some of the most prestigious residential developments in London, including the Lancasters, Bromptons and Phillimores, amongst many others. It is the Company's aim to become recognised as a leading developer of luxury residential properties in Central London. Northacre has two operating segments, being development management and interior design.

The Company's success with the Lancasters development has not only provided significant financial support to the Company but has also significantly enhanced its position within the highly competitive market in which it operates. Working with ADCM, and leveraging its market position, the Company has in recent months sought to build a pipeline of work, including:

· on 22 August 2013, Northacre announced the acquisition of a 15 per cent. equity interest in the special purpose vehicle company which owns 33 Thurloe Square, London and was subsequently appointed as development manager, with a mandate to refurbish and deliver a highly desirable, exquisite single residence; and

· on 18 September 2013, the Company committed to invest in a development project at 1 Palace Street, London, a large, partially listed former UK government building adjacent to Buckingham Palace with planning permission for a conversion to a significant residential scheme and Northacre expects to be appointed soon as development manager to this project.

The Company generates income from development management fees from each project on which it is appointed as development manager, and where possible, also from ancillary interior design.

Market practice normally requires the alignment of interests between the development manager and the principal equity owners in a development such that the appointment of a development manager is often dependent on its ability to make an equity investment in projects. The Company additionally recognises that superior shareholder returns can only be generated from participating in these developments through significant equity investment and carried interests.

3. BACKGROUND TO AND REASONS FOR THE OPEN OFFER AND THE CASH BOX ACQUISITION

On 15 March 2013, Spadille announced completion of the acquisition of a controlling interest in the Company. Spadille announced that it believed that securing funding for development projects was the greatest challenge facing residential property developers and that it was its strategy, subsequent to completion of the acquisition, to enhance Northacre's access to sources of funding for development and working capital purposes.

The Company has to date committed a total of £12.2 million in capital, excluding associated working capital requirements, to fund its investments in the projects outlined above. Whilst the Company could finance these projects from existing resources and expected future receipts from the Lancasters development and associated cash inflows, the Directors believe that the Company would not have the balance sheet strength to secure further compelling projects with the potential to deliver significant returns.

The Board however believes that there are further opportunities available for maintaining this momentum, and that the recent growth of the Company can only be sustained by the acquisition of further equity interests in a pipeline of attractive projects which fits its investment and operational criteria. In addition to the Company's employees' technical skills, the Board believes that its competitive advantage in this market, where it competes against significantly larger, well-known names, comes through agility and speed of execution.

Whilst there can be no assurance that further projects will be secured, or on what terms, set out below are current examples of the Company's pipeline of potential projects which highlight the level of investment that the Company expects to be required in order to secure these projects.

Project PCL - the Company has made an offer, with a view to securing exclusivity and due diligence access, in respect of a potential conversion of an existing hotel property in the Kensington & Chelsea region of London, to a residential development with a surface of 50,000 sq.ft. The Board is currently forecasting that this opportunity will require an equity investment of approximately £10 million, payable during March 2014.

· Project Riverfront - the Company has identified and is undertaking due diligence on a substantial property, with existing consents for a residential development, which will consist of the full demolition of the existing structure and a new build of 280,000 sq.ft., with 165,000 net sellable sq.ft. The project has budgeted net costs at present of £230 million, with a potential value when completed of £320 million, equating to an average selling price of £1,900 per sq.ft. At present, the Company expects that an equity investment of £10 million would be required in order to both secure the project and to generate attractive shareholder return.

As such, the Board firmly believes that the net proceeds of the Open Offer and the access to the cash resulting from the Cash Box Acquisition will provide the Company with the requisite financing to take advantage of these opportunities, and others, as and when they arise. The Company further recognises the advantages which a strong balance sheet will provide in a market where the Company competes against substantially larger, well-known names.

4. CURRENT TRADING AND PROSPECTS

On 19 November 2013, the Company announced its interim results for the six months ended 31 August 2013. Since that date, the Company has continued to trade in line with its expectations. During August and September 2013, the Company paid a total of £1.4 million towards its £2.2 million equity commitment in Thurloe Square and a total of £3.4 million towards its £10 million equity commitment in 1 Palace Street.

The Company is currently in advanced discussions to acquire the interest of Minerva Limited ("Minerva") in Lancaster Gate (Hyde Park) Limited, the company established by Northacre and Minerva as a joint venture to manage and develop the Lancasters project. Once completed, this will entitle Northacre to receive, in full, any future proceeds from the Lancasters project and in return the Company will take on the ongoing snagging obligations which are expected to be completed by June 2014. The Directors do not believe that the purchase of Minerva's stake and taking on the snagging process will have a material effect on the Company's operations or financial performance and is expected to result in an earlier than expected receipt of the final dividend from the Lancasters development. This transaction is expected to be completed during December 2013.

5. USE OF PROCEEDS

The Open Offer is expected to raise net proceeds of approximately £4.1 million. In addition, the Cash Box Acquisition will provide the Company with access to the amount of approximately £8.4 million in cash.

The Company intends to deploy a proportion of the net proceeds of the Open Offer and the cash accessible to it pursuant to the Cash Box Acquisition to fund equity investments and working capital on existing development projects. Additionally, the Company requires further financial strength in order to take advantage of a number of compelling and accretive development projects. Furthermore, the Board recognises the comfort that can be drawn by the Company's partners, clients and other stakeholders from a strong balance sheet.

6. DETAILS OF THE CASH BOX ACQUISITION

The Company will acquire the entire issued share capital of the Cash Box Company from Spadille for a consideration of approximately £8.4 million, to be satisfied in full by the issue of 10,433,927 new Ordinary Shares (being the Consideration Shares), credited as fully paid, at an issue price of 80 pence per new Ordinary Share, representing a premium of 3.2 per cent. to the Closing Price of 80 pence per Existing Ordinary Share on 4 December 2013, being the last practicable date before the posting of this document.

As of the date on which the Cash Box Acquisition completes (which is currently expected to be 24 December 2013) the principal asset of the Cash Box Company is intended to be cash of £8,347,141.60, and the purpose of the Cash Box Acquisition is to provide the Group with access to this amount as additional capital to fund in part its future activities, as described above. This amount of cash is intended to be put into the Cash Box Company wholly before such date. It should be noted that the Cash Box Company does not currently hold any cash, but that it will hold the relevant cash before the Cash Box Acquisition is entered into or becomes effective.

The Cash Box Acquisition is conditional on the passing of the Resolution and on Admission of the Consideration Shares by no later than by 24 December 2013, or such later date as the Company and Spadille may agree (not being later than 10 January 2014), failing which the Cash Box Acquisition (and consequently the Open Offer) will lapse and will not be completed.

The agreement for the Cash Box Acquisition, entered into between the Company and Spadille includes warranties from Spadille and warranties to Spadille from the Company which the Independent Directors consider appropriate to the transaction.

7. DETAILS OF THE UNDERWRITING

In terms of the Underwriting Agreement, the Company and Spadille have agreed that Spadille will underwrite the Open Offer, and will accordingly subscribe, at the Offer Price for any Open Offer Shares not taken up by Qualifying Shareholders pursuant to valid applications under the Open Offer.

No fees or underwriting commissions are payable by the Company to Spadille in consideration of the underwriting. The Company has given Spadille customary warranties and undertakings relating to the Company's authority to issue the underwritten shares and to their ranking and admission to trading on AIM. In addition, Spadille has the right to terminate the Underwriting Agreement before Admission in certain specific circumstances typical for an agreement of this nature.

8. RELATED PARTY TRANSACTIONS - INDEPENDENT DIRECTORS' VIEWS

The Cash Box Acquisition and the issue of the Consideration Shares to Spadille are classified as a related party transaction under the AIM Rules, as Spadille is a substantial shareholder (as defined by the AIM Rules) in the Company. The Underwriting Agreement between Spadille and the Company similarly constitutes a related party transaction under the AIM Rules.

The Independent Directors, (being the Board excluding Jassim Alseddiqi and Mustafa Kheriba, as directors of Spadille and chief executive and chief operating officer respectively of ADCM), having consulted with finnCap, the Company's nominated adviser, consider that the terms of the Cash Box Acquisition and the issue of the Consideration Shares and the terms of the Underwriting Agreement are respectively fair and reasonable insofar as Shareholders are concerned.

9. PRINCIPAL TERMS AND CONDITIONS OF THE OPEN OFFER

The Company is proposing to raise approximately £4.1 million (before expenses) by the Open Offer.

A total of 5,177,968 Open Offer Shares is being made available to Qualifying Shareholders pursuant to the Open Offer at the Offer Price, payable in full on acceptance. Any Open Offer Shares not taken up by Qualifying Shareholders pursuant to valid applications under the Open Offer (including under the Excess Application Facility) will be issued to Spadille at the Offer Price pursuant to the Underwriting Agreement.

Subject to fulfilment of the terms and conditions referred to in this document, and where relevant, set out in the Application Form, Qualifying Shareholders may apply for Open Offer Shares under the Open Offer and for Excess Shares under the Excess Application Facility, in each case at the Offer Price, payable in full on acceptance, on the following basis:

1.9376 Open Offer Shares for every 10 Existing Ordinary Shares

held by Qualifying Shareholders on the Record Date and so in proportion for any other number of Ordinary Shares then held; and

Excess Shares over and above their Open Offer Entitlements through the Excess Application Facility up to a maximum of the relevant Excess Open Offer Entitlement Limit, provided that they have taken up their Open Offer Entitlements in full

Entitlements of Qualifying Shareholders will be rounded down to the nearest whole number of Open Offer Shares. Fractional entitlements will not be allocated and will be disregarded.

In order to comply with the provisions of the Companies Act, the offer of Open Offer Shares to Qualifying Non-EEA Shareholders will be made pursuant to section 562(3) of the Companies Act by way of an appropriate notice in the London Gazette. The Open Offer is not being made to Qualifying Non-EEA Shareholders by means of sending this document or the Application Form to them, and nor will the stock accounts of such Qualifying Non-EEA Shareholders who hold Existing Ordinary Shares in CREST be credited with Open Offer Entitlements or Excess Open Offer Entitlements. Such Qualifying Shareholders should see paragraphs 8 and 9 of Part 2 of this document for further information. The attention of all Overseas Shareholders is drawn to paragraph 8 of Part 2 of this document.

Valid applications by Qualifying Shareholders will be satisfied in full up to their Open Offer Entitlements as shown on the relevant Application Form or credited to the relevant stock account. Qualifying Shareholders are also being given the opportunity, provided that they take up their Open Offer Entitlements in full, to apply for Excess Shares up the Excess Open Offer Entitlement Limit through the Excess Application Facility.

Application has been made for the Open Offer Entitlements and the Excess Open Offer Entitlements to be admitted to CREST. It is expected that such Open Offer Entitlements and Excess Open Offer Entitlements will be credited to CREST on Friday, 6 December 2013. The Open Offer Entitlements and the Excess Open Offer Entitlements will be enabled for settlement in CREST until 11.00 a.m. on Friday, 20 December 2013. Applications through the CREST system may only be made by the Qualifying CREST Shareholder originally entitled or by a person entitled by virtue of bona fide market claims. The Open Offer Shares must be paid in full on application. The latest time and date for receipt of completed Application Forms or CREST application and payment in respect of the Open Offer is 11.00 a.m. on Friday, 20 December 2013.

Qualifying Shareholders should be aware that the Open Offer is not a rights issue. As such, Qualifying Shareholders should note that their Application Forms are not negotiable documents and cannot be traded. Qualifying CREST Shareholders should note that, although their Open Offer Entitlements and Excess Open Offer Entitlements will be credited to their CREST accounts (save in the case of relevant Qualifying Non-EEA Shareholders), the Open Offer Entitlements and Excess Open Offer Entitlements will not be tradeable or listed and applications in respect of the Open Offer may only be made by the Qualifying CREST Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim. Open Offer Shares which are not taken up under the Open Offer will not be sold in the market for the benefit of those who do not apply under the Open Offer and Qualifying Shareholders who do not apply to take up Open Offer Shares will have no rights under the Open Offer. Any Open Offer Shares which are not taken up by Qualifying Shareholders pursuant to valid applications under the Open Offer will be issued to Spadille pursuant to the Underwriting Agreement.

Further details of the Open Offer and the terms and conditions on which it is being made, including the procedure for application and payment, are contained in Part 2 of this document and on the Application Form.

The Open Offer is conditional on:

(a) the passing of the Resolution at the General Meeting;

(b) completion of the Cash Box Acquisition; and

(c) Admission of the Open Offer Shares,

occurring not later than 8.00 a.m. on 24 December 2013 (or such later time and/or date as the Company and finnCap or Spadille, as the case may be, may agree being no later than 8.00 a.m. on 10 January 2014).

Accordingly, if these conditions are not satisfied or waived (where capable of waiver) by the above date, the Open Offer will not proceed and any applications made by Qualifying Shareholders will be rejected. In such circumstances, application monies will be returned (at the applicant's sole risk), without payment of interest, as soon as practicable thereafter.

The Open Offer Shares will be issued free of all liens, charges and encumbrances and will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue.

Application will be made to the London Stock Exchange for the Admission of the Open Offer Shares to trading on AIM. It is expected that Admission will occur and that dealings will commence at 8.00 a.m. on Tuesday 24 December 2013 at which time it is also expected that the Open Offer Shares will be enabled for settlement in CREST.

Upon completion of the Open Offer and the Cash Box Acquisition, the New Ordinary Shares will represent approximately 58.4 per cent. of the Existing Ordinary Shares and approximately 36.9 per cent. of the Company's Enlarged Share Capital.

Following the issue of the New Ordinary Shares, Qualifying Shareholders who do not take up any of their entitlements in respect of the Open Offer or who are not eligible to do so will experience a dilution of 58.4 per cent. of their interests in the Company as a result of the Open Offer.

10. DIRECTORS' AND MAJOR SHAREHOLDERS' SHAREHOLDINGS

As at 2 December 2013 (being the latest practicable date prior to the date of this document), none of the Directors nor any person connected with a Director within the meaning of section 252 to 255 of the Companies Act has any interest in the Company's share capital).

As at 2 December 2013 (being the latest practicable date prior to the date of this document) and as expected to be held immediately following Admission the Company is aware of the following existing Shareholders who by virtue of the notifications made to it pursuant to the Companies Act and/or the Disclosure and Transparency Rules, are or will immediately following Admission be interested, directly or indirectly, in 3 per cent. or more of the Company's issued share capital:

†assuming full take-up of the Open Offer, including under the Excess Application Facility

11. IMPORTANT NOTICE TO SHAREHOLDERS

The Board has been informed by Spadille that it remains its intention, in due course and subject to Spadille having acquired (whether as a consequence of the Cash Box Acquisition and/or entering into the Underwriting Agreement, or otherwise) a holding of not less than 75 per cent. of the Ordinary Shares in issue at the relevant time, to seek a cancellation of the admission of the Ordinary Shares to trading on AIM in accordance with rule 41 of the AIM Rules. Such cancellation would be set out in a separate circular to Shareholders and be conditional upon the approval of not less than 75 per cent. of votes cast by Shareholders at a general meeting.

Shareholders are advised that Spadille may, dependent upon the number of Open Offer Shares taken up by Qualifying Shareholders in the Open Offer and as a consequence of the issue of the Consideration Shares and entry into the Underwriting Agreement, acquire a holding of not less than 75 per cent. of the Enlarged Share Capital.

Following any such cancellation, Shareholders' ability to trade their Ordinary Shares is likely to be severely limited. Whilst there can be no certainty that such an arrangement will be put in place, or the price and other terms that would apply in the event of such an arrangement, the Company may, in the event of such cancellation, at the Directors' sole discretion, consider putting in place a dealing facility to allow Shareholders to trade their Ordinary Shares on a matched bargain basis.

12. GENERAL MEETING

A notice convening a General Meeting of the Company, to be held at the offices of Northacre PLC, 8 Albion Riverside, 8 Hester Road, London, SW11 4AX, at 10.00 a.m. on Monday, 23 December 2013 is set out at the end of this document. At the General Meeting, the following Resolution will be proposed as an ordinary resolution:

Resolution

That the Directors be and they are hereby generally and unconditionally authorised in accordance with section 551 of the Companies Act 2006 to exercise all powers of the Company to allot equity securities (as defined in section 560(1) of the Companies Act 2006) in the Company up to an aggregate nominal amount of £390,297.38 in connection with the Open Offer and the Cash Box Acquisition respectively, (each as defined in the circular dated 5 December 2013, of which this notice forms part), provided that this authority shall: (i) be in substitution for all previous authorities pursuant to section 551 of the Companies Act 2006; and (ii) expire on the date of the next annual general meeting of the Company.

Spadille, in respect of 17,861,400 Existing Ordinary Shares in aggregate representing approximately 66.8 per cent. of the existing issued ordinary share capital of the Company, has irrevocably undertaken to vote in favour of the Resolution to be proposed at the General Meeting in respect of its entire beneficial holding of Ordinary Shares.

13. ACTION TO BE TAKEN BY SHAREHOLDERS

General Meeting

Shareholders will find accompanying this circular a Form of Proxy for use at the General Meeting.

Whether or not Shareholders intend to be present at the General Meeting, they are requested to complete, sign and return the Form of Proxy in accordance with the instructions printed on it as soon as possible and, in any event, so as to arrive no later than 10.00 a.m. on Saturday, 21 December 2013. Completion and return of the Form of Proxy will not affect Shareholders' right to attend and vote in person at the General Meeting if they so wish. Further information regarding the appointment of proxies can be found at the end of this document.

In the case of non-registered Shareholders who receive these materials through their broker or other intermediary, the Shareholder should complete and send a letter of direction in accordance with the instructions provided by their broker or other intermediary.

In order for the Open Offer and the Cash Box Acquisition to proceed, Shareholders will need to approve the Resolution set out in the Notice of General Meeting. Since Spadille has irrevocably undertaken to vote in favour of the Resolution, the Company expects the Resolution to be passed at the General Meeting. However, if the Resolution is not passed, the Open Offer and the Cash Box Acquisition will not proceed, with the result that the anticipated net proceeds of the Open Offer and the funds held in the Cash Box Company will not become available to fund proposed upcoming expenditure and achieve the objectives set by the Board and the Company's business plans and growth prospects may be materially adversely affected as a result.

Accordingly it is important that all Shareholders vote in favour of the Resolution.

In respect of the Open Offer

Qualifying Non-CREST Shareholders wishing to apply for Open Offer Shares must complete the Application Form in accordance with the instructions set out in paragraph 4 of Part 2 of this document and in the Application Form and return it with the appropriate payment to Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU, so as to arrive no later than 11.00 a.m. on Friday, 20 December 2013. Qualifying Shareholders should note that their Application Form is not a negotiable document and cannot be traded.

Application has been made for the Open Offer Shares to be admitted to CREST. It is expected that the relevant Open Offer Entitlements and Excess Open Offer Entitlements will be admitted to CREST at 8.00 am on 6 December 2013. The relevant Open Offer Entitlements and Excess Open Offer Entitlements will also be enabled for settlement in CREST at 8.00 a.m. on 6 December 2013.

Qualifying CREST Shareholders should note that, although the relevant Open Offer Entitlements and Excess Open Offer Entitlements will be admitted to CREST (save for those in respect of Qualifying Non-EEA Shareholders) and be enabled for settlement, applications in respect of entitlements under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim.

If you are a Qualifying CREST Shareholder, no Application Form will be sent to you. Qualifying CREST Shareholders (other than those who are also Qualifying Non-EEA Shareholders) will have Open Offer Entitlements and Excess Open Offer Entitlements credited to their stock accounts in CREST. You should refer to the procedure for application set out in paragraph 4 of Part 2 of this document. The relevant CREST instructions must have settled in accordance with the instructions in paragraph 4.2 of Part 2 of this document by no later than 11.00 a.m. on 20 December 2013.

Qualifying CREST Shareholders who are CREST Sponsored Members should refer to their CREST Sponsors regarding the action to be taken in connection with this document and the Open Offer.

If you do not wish to apply for any Open Offer Shares under the Open Offer, you should not complete or return the Application Form.

Qualifying Non-EEA Shareholders should refer to the notice in the London Gazette, by which the Open Offer is made to them. Such Qualifying Non-EEA Shareholders will be able on personal application to the Receiving Agents to inspect or obtain a copy of this document and the Application Form and, subject to the terms and conditions of the Open Offer, may use the Application Form to apply for Open Offer Shares.

14. OVERSEAS SHAREHOLDERS

The attention of Shareholders who have registered addresses outside the United Kingdom, or who are citizens or residents of countries outside the United Kingdom, or who are holding Existing Ordinary Shares for the benefit of such persons, (including, without limitation, custodians, nominees, trustees and agents) or who have a contractual or other legal obligation to forward this document or the Application Form to such persons, is drawn to the information which appears in paragraphs 8 and 9 of Part 2 of this document.

In particular, Shareholders who have registered addresses in or who are resident in, or who are citizens of, countries other than the United Kingdom (including without limitation the United States), should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to take up their entitlements under the Open Offer.

The Open Offer will be made to Qualifying EEA Shareholders by means of the despatch of this document and an Application Form to them or by the despatch of this document and the crediting of their relevant stock accounts with Open Offer Entitlements and Excess Open Offer Entitlements, as the case may be. The Open Offer will only be made to Qualifying Non-EEA Shareholders, including those in Restricted Jurisdictions, by means of the notice in the London Gazette referred to in paragraph 9 of Part 2. All Qualifying Shareholders should however be aware that the making or acceptance of the Open Offer in certain jurisdictions, including without limitation the United States and the other Restricted Jurisdictions, may be restricted by the laws or regulatory requirements of those jurisdictions. Although the Open Offer will be made to Qualifying Non-EEA Shareholders by means of the notice referred to above, subject to certain exceptions, the despatch of this document and any accompanying Application Form do not constitute an offer of the Open Offer Shares to any such Qualifying Non-EEA Shareholders. The Open Offer Shares have not been and will not be registered under the US Securities Act or under any relevant laws of any other Restricted Jurisdiction and, subject to certain exceptions, the Open Offer Shares and the Application Form may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, within the United States or any other Restricted Jurisdiction except pursuant to an applicable exemption from registration requirements, or in a transaction not subject thereto, and in compliance with applicable laws.

Except as otherwise agreed with the Company in writing, each person who subscribes for or purchases Open Offer Shares will be deemed to have represented, agreed and acknowledged that it is located outside the United States (except as expressly permitted by Regulation S under the Securities Act in connection with an offshore transaction) and is acquiring the Open Offer Shares in an offshore transaction in accordance with Rule 903 or Rule 904 under the US Securities Act.

15. TAXATION

If you are in any doubt as to your tax position, or you are subject to tax in a jurisdiction other than the United Kingdom, you should consult your own independent tax adviser without delay.

16. INDEPENDENT DIRECTORS' RECOMMENDATION

The Independent Directors consider the Open Offer, the Underwriting Agreement and the Cash Box Acquisition to be in the best interests of the Company and its Shareholders as a whole. Accordingly the Independent Directors unanimously recommend that Shareholders vote in favour of the Resolution to be proposed at the General Meeting.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Record Date for entitlements under the Open Offer 5.00 p.m. on Monday, 2 December 2013

Announcement of the Open Offer Thursday, 5 December 2013

Ex-entitlement Date 8.00 a.m. on Thursday, 5 December 2013

Posting of this document, the Form of Proxy and Thursday, 5 December 2013the Application Form

Publication of London Gazette notice Friday, 6 December 2013

Open Offer Entitlements and Excess Open Offer Entitlements Friday, 6 December 2013credited to CREST stock accounts of relevant Qualifying CREST Shareholders

Recommended latest time for requesting withdrawal of 4.30 p.m. on Monday,Open Offer Entitlements and Excess Open Offer 16 December 2013

Entitlements from CREST

Latest time for depositing Open Offer Entitlements 3.00 p.m. on Tuesday,and Excess Open Offer Entitlements into CREST 17 December 2013

Latest time for splitting Application Forms 3.00 p.m. on Wednesday,(to satisfy bona fide market claims only) 18 December 2013

Latest time for receipt of completed Application Forms 11.00 a.m. on Friday,and payment in full under the Open Offer or settlement 20 December 2013of relevant CREST instructions (as appropriate)

Latest time and date for receipt of Forms of 10.00 a.m. on Saturday,Proxy from Shareholders 21 December 2013

General Meeting 10.00 a.m. on Monday, 23 December 2013

Expected date of announcement of result of Monday, 23 December 2013the General Meeting

Expected date for announcement of result of the Open Offer Monday, 23 December 2013

Completion of the Cash Box Acquisition (subject to Admission) Monday, 23 December 2013

Admission to AIM and commencement of dealings in the 8.00 a.m. on Tuesday,New Ordinary Shares on AIM 24 December 2013

Open Offer Shares credited to CREST stock accounts Tuesday, 24 December 2013in uncertificated form

Despatch of definitive share certificates for Open Offer Shares No later thanto be held in certificated form Friday, 3 January 2014

Notes:

1. References to times in this document and any accompanying document are to London, United Kingdom time unless otherwise stated.

2. The times and dates set out in the timetable above and mentioned throughout this document may be adjusted by the Company, in which event details of the new times and dates will be notified to AIM and, where appropriate, Qualifying Shareholders, by means of an announcement through a Regulatory Information Service.

3. Different deadlines and procedures for return of forms may apply in certain cases.

4. If you have any queries on the procedure for acceptance and payment, you should contact Capita Asset Services on 0871 664 0321 (UK only) or +44 208 639 3399 (if calling outside the UK). This Shareholder Helpline is available from 9.00 a.m. to 5.30 p.m. (London time) Monday to Friday (except bank holidays). Calls from within the UK are charged at ten pence per minute (including VAT) plus your service provider's network extras. Calls to the helpline from outside the UK will be charged at applicable international rates. Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. For legal reasons, the helpline cannot provide advice on the merits of the Open Offer nor give any financial, legal or tax advice.