Resolute Mining Regulatory News (RSG)

31 Jul 2007 08:54

Brian Kingham31 July 2007 Not for release, publication or distribution, in whole or in part, in, into orfrom the United States, Canada, Australia, Japan or any other jurisdiction whereto do so would constitute a violation of the relevant laws of such jurisdiction. ANNOUNCEMENTFor immediate release 31 July 2007 RECOMMENDED CASH OFFER FOR RELIANCE SECURITY GROUP PLC BY RELIANCE EXECUTIVELIMITED Summary of the Offer • The Board of Reliance Executive and the Independent Reliance Directors are delighted to announce that they have reached agreement on the terms of a recommended offer to be made by Reliance Executive for the entire issued and to be issued share capital of Reliance, other than an aggregate of 15,108,564 Reliance Shares (representing approximately 70 per cent. of the entire existing issued share capital of Reliance) held by Brian Kingham and the Brian Kingham Settlements. • Independent Reliance Shareholders who accept the Offer, which will be made wholly in cash, will be entitled to receive 916 pence for each Reliance Share. The Offer values the entire existing issued share capital of Reliance at approximately £197 million. • The Offer represents a premium of approximately 28 per cent. to the Closing Price of 715 pence for each Reliance Share on 16 April 2007, being the last business day prior to the commencement of the Offer Period. • The consideration payable under the Offer will be financed through facilities made available by Barclays and RBS. • Reliance Executive (an indirect and wholly-owned subsidiary of Reliance Corporation Group) is a recently incorporated private limited company established for the purposes of making the Offer. The ordinary share capital of Reliance Corporation is held 100 per cent. by Brian Kingham. • The directors of Reliance Executive are Brian Kingham and Neil French. It is intended that following the Offer becoming or being declared unconditional in all respects, the Management Team (comprising Julian Nicholls, Mark Harrison and Jeremy Simon) will remain in their present positions and participate in various incentive arrangements of the Reliance Corporation Group. JPMorgan Cazenove considers the terms of the arrangements between the Management Team and Reliance Corporation Group to be fair and reasonable so far as Independent Reliance Shareholders are concerned. • Reliance Executive has received an irrevocable undertaking from Artemis Investment Management Limited to accept the Offer and vote in favour of Resolution 2 to be proposed at the EGM in respect of its entire holding of Reliance Shares (representing approximately 4.8 per cent. of the entire existing issued share capital of Reliance and approximately 16 per cent. of the Reliance Shares to which the Offer relates). • The conditions to and certain terms of the Offer are set out in the attached Announcement, together with certain information on Reliance and on Reliance Executive. • This summary should be read in conjunction with, and is subject to, the full text of the following Announcement. Appendix I to the Announcement contains the conditions to, and certain further terms of, the Offer. Appendix II to the Announcement contains the bases and sources of certain information used in this summary and in the following Announcement. Appendix III to the Announcement contains details of the irrevocable undertakings received by Reliance Executive. Appendix IV to the Announcement contains details of interests in certain Reliance Shares. Appendix V to the Announcement contains definitions of the terms used in this summary and the following Announcement. Commenting on the Offer, Brian Kingham, Chairman of Reliance Executive, said:"I am delighted to have reached agreement with the Independent RelianceDirectors on the terms of an offer for the Reliance Shares held by theIndependent Reliance Shareholders. I look forward to working with the ManagementTeam in the private arena to realise the full potential of the business over thelong-term. The Offer has been unanimously recommended by the IndependentReliance Directors and represents an attractive opportunity for the IndependentReliance Shareholders to whom it is extended to realise their investment". Commenting on the Offer, Nigel Stapleton, Chairman of the Independent RelianceDirectors committee, said:"The Independent Reliance Directors have given careful consideration to theproposal received from Brian Kingham. We believe the Offer is full and fair andpitched at an attractive premium to the company's share price. Taking also intoaccount Mr Kingham's clear long-term commitment to owning and running Relianceand his commitment to respect the employment rights, including pension rights,of all Reliance employees, we are happy to recommend the Offer to shareholders". Enquiries: Reliance Executive Tel: + 44 (0) 207 730 9901Brian KinghamNeil French Hawkpoint Tel: + 44 (0) 207 665 4500Paul BainesChris RobinsonJoseph Ayala Reliance Tel: + 44 (0) 1895 205 000Nigel Stapleton JPMorgan Cazenove Tel: + 44 (0) 207 588 2828Malcolm MoirJulian Cazalet The Offer Document, the Form of Acceptance and the Form of Proxy will be postedto Independent Reliance Shareholders as soon as practicable and, in any event,within 28 days of this Announcement, other than to Independent RelianceShareholders resident in a Restricted Jurisdiction. The Reliance Executive Directors accept responsibility for the informationcontained in this Announcement other than: (i) the information relating to theReliance Group, the Reliance Directors and their immediate families, relatedtrusts and connected persons; (ii) the recommendations and opinions of theIndependent Reliance Directors relating to the Offer; (iii) the informationrelating to the Management Team, their immediate families, related trusts andconnected persons; and (iv) the information relating to Brian Kingham hisimmediate family, related trusts, connected persons and the Brian KinghamSettlements. To the best of the knowledge and belief of the Reliance ExecutiveDirectors (who have taken all reasonable care to ensure that such is the case),the information contained in this Announcement for which they are responsible isin accordance with the facts and does not omit anything likely to affect theimport of such information. The Reliance Directors accept responsibility for the information contained inthis Announcement relating to the Reliance Group, the Reliance Directors, theirimmediate families, related trusts and connected persons (other than therecommendation(s) and opinions of the Independent Reliance Directors relating tothe Offer, for which only the Independent Reliance Directors acceptresponsibility as set out below and other than the information contained in thisAnnouncement relating to the Management Team, their immediate families, relatedtrusts and connected persons for which only the Management Team acceptresponsibility as set out below and other than the information relating to BrianKingham, his immediate family, related trusts, connected persons and the BrianKingham Settlements for which only Brian Kingham accepts responsibility as setout below). To the best of the knowledge and belief of the Reliance Directors(who have taken all reasonable care to ensure that such is the case), theinformation contained in this Announcement for which they are responsible is inaccordance with the facts and does not omit anything likely to affect the importof such information. The Independent Reliance Directors accept responsibility for the recommendationand opinions of the Independent Reliance Directors relating to the Offer. To thebest of the knowledge and belief of the Independent Reliance Directors (who havetaken all reasonable care to ensure that such is the case), the informationcontained in this Announcement for which they are responsible is in accordancewith the facts and does not omit anything likely to affect the import of suchinformation. The members of the Management Team accept responsibility for the informationcontained in this Announcement relating to the Management Team, their immediatefamilies, related trusts and connected persons. To the best of the knowledge andbelief of the Management Team (who have taken all reasonable care to ensure thatsuch is the case), the information contained in this Announcement for which theyare responsible is in accordance with the facts and does not omit anythinglikely to affect the import of such information. Brian Kingham accepts responsibility for the information contained in thisAnnouncement relating to himself, his immediate family, related trusts,connected persons and the Brian Kingham Settlements. To the best of theknowledge and belief of Brian Kingham (who has taken all reasonable care toensure that this is the case) the information contained in this Announcement forwhich he is responsible is in accordance with the facts and does not omitanything likely to affect the import of such information. Hawkpoint, which is authorised and regulated in the United Kingdom by theFinancial Services Authority is acting for Reliance Executive and no one else inconnection with the Offer and will not be responsible to anyone other thanReliance Executive for providing the protections afforded to clients ofHawkpoint or for providing advice in connection with the Offer. JPMorgan Cazenove, which is authorised and regulated in the United Kingdom bythe Financial Services Authority, is acting exclusively for Reliance and no oneelse in connection with the Offer and will not be responsible to anyone otherthan Reliance for providing the protections afforded to clients of JPMorganCazenove nor for providing advice in relation to the Offer. This Announcement does not constitute an offer or an invitation to purchase orsubscribe for any securities. The Offer will be made solely by means of theOffer Document which will contain the full terms and conditions of the Offer anddetails of how the Offer may be accepted, the Form of Acceptance (in respect ofcertificated Reliance Shares) and a notice to be published in the LondonGazette. Unless otherwise determined by Reliance Executive and permitted by applicablelaw and regulation, the Offer will not be made, directly or indirectly, in orinto, or by the use of the mails or by any means or instrumentality (including,without limitation, telephonically or electronically) of interstate or foreigncommerce, or any facility of a national securities exchange, of a RestrictedJurisdiction (including the United States, Canada, Australia or Japan) and theOffer will not be capable of acceptance by any such use, means, instrumentalityor facility or from within a Restricted Jurisdiction. Accordingly, copies ofthis Announcement are not being, and must not be, directly or indirectly, mailedor otherwise forwarded, distributed or sent in or into or from a RestrictedJurisdiction and persons receiving this Announcement (including, withoutlimitation, custodians, nominees and trustees) must not mail or otherwiseforward, distribute or send it in or into or from a Restricted Jurisdiction.Doing so may render invalid any purported acceptance of the Offer. Theavailability of the Offer to persons who are not resident in the United Kingdommay be affected by the laws of the relevant jurisdictions. Persons who are notresident in the United Kingdom should inform themselves about, and, observe anyapplicable requirements. Under the provisions of Rule 8.3 of the Code, if any person is, or becomes,"interested" (directly or indirectly) in 1% or more of any class of "relevantsecurities" of Reliance, all "dealings" in any "relevant securities" of Reliance(including by means of an option in respect of, or a derivative referenced to,any such "relevant securities") must be publicly disclosed by no later than 3.30p.m. on the business day following the date of the relevant transaction. Thisrequirement will continue until the date on which the Offer becomes, or isdeclared, unconditional as to acceptances, lapses or is otherwise withdrawn oron which the "offer period" otherwise ends. If two or more persons act togetherpursuant to an agreement or understanding, whether formal or informal, toacquire an "interest" in "relevant securities" of Reliance, they will be deemedto 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 Reliance by Reliance Executive or by any its "associates", mustbe disclosed by no later than 12.00 p.m. on the business day following the dateof 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 agreementto purchase, option in respect of, or derivative referenced to, securities. Terms in quotations marks are defined in the Code, which can also be found onthe Panel's website. If you are in any doubt as to the application of Rule 8 ofthe Code to you, please contact an independent financial adviser authorisedunder the Financial Services and Markets Act 2000 (as amended), consult thePanel's website or contact the Panel on telephone number +44 (0) 20 7382 9026 orfax +44 (0) 20 7638 1554. If you are in any doubt as to whether or not you arerequired to disclose a "dealing" under Rule 8, you should consult the Panel. If you are in any doubt about the action you should take, you are recommended toseek your own personal financial advice immediately from your stockbroker, bankmanager, solicitor, accountant or independent financial adviser authorised underthe Financial Services and Market Act 2000 (as amended) if you are resident inthe United Kingdom or, if not, from another appropriately authorised independentfinancial adviser. Copies of this Announcement can be found at Reliance's website atwww.reliancesecurity.co.uk. Not for release, publication or distribution, in whole or in part, in, into orfrom the United States, Canada, Australia, Japan or any other jurisdiction whereto do so would constitute a violation of the relevant laws of such jurisdiction. ANNOUNCEMENT For immediate release 31 July 2007 RECOMMENDED CASH OFFER FOR RELIANCE SECURITY GROUP PLC BY RELIANCE EXECUTIVELIMITED 1. Introduction On 17 April 2007, Brian Kingham, the Chairman of Reliance, announced that he was at a very preliminary stage of considering the possibility of making an offer for the issued share capital of Reliance. The Board of Reliance Executive (an indirect and wholly-owned subsidiary of Reliance Corporation), which has been advised by Hawkpoint, announces today that it has reached agreement with the Independent Reliance Directors on the terms of a recommended cash offer to be made by Reliance Executive for the entire issued and to be issued ordinary share capital of Reliance, other than an aggregate of 15,108,564 Reliance Shares (representing approximately 70 per cent. of the entire existing issued share capital of Reliance) held by Brian Kingham and the Brian Kingham Settlements. Independent Reliance Shareholders who accept the Offer, which will be made wholly in cash, will be entitled to receive 916 pence for each Reliance Share. The Offer values the entire existing issued share capital of Reliance at approximately £197 million. The formal Offer will be set out in the Offer Document, which is expected to be dispatched to Independent Reliance Shareholders as soon as is practicable following the release of this Announcement. 2. The Offer Under the Offer, Reliance Executive will offer to acquire all of the Reliance Shares to which the Offer relates, on the terms and subject to the conditions set out or referred to in Appendix I to this Announcement, on the following basis: for each Reliance Share 916 pence in cash The Offer represents: - a premium of approximately 28.0 per cent. to the Closing Price of 715 pence for each Reliance Share on 16 April 2007, being the last business day prior to the commencement of the Offer Period; and - a premium of approximately 8.8 per cent. to the Closing Price of 842 pence for each Reliance Share on 30 July 2007, being the last business day prior to the date of this Announcement. Full acceptance of the Offer (on the bases and sources set out in Appendix II tothis Announcement) will result in a cash payment of approximately £60.5 million.This payment will be funded from new facilities being made available by Barclaysand RBS to Reliance Corporation Group, details of which are set out in paragraph11 of this Announcement. Details of certain further terms of, and the conditions to, the Offer are setout below and in Appendix I to this Announcement, and will be set out in theOffer Document. 3. Background to and reasons for the Offer As founder and controlling shareholder of Reliance, Brian Kingham strongly believes that, in order to maximise the long-term profitable growth of the business, it is essential that the Management Team be exclusively focused on the growth of the business and, accordingly, significantly incentivised to achieve this aim. Mr Kingham also believes that private ownership will afford the executive management team more flexibility in managing the challenges between short and long-term commercial opportunities. As Chairman of Reliance, Mr Kingham believes that the Board of Reliance is highly unlikely to seek to raise capital from equity markets or to need to use Reliance Shares as currency for potential acquisitions in the foreseeable future. Mr Kingham has therefore conceived the Offer as a means to eliminate the distractions associated with the media and the stock market, to put in place a highly motivational management incentivisation scheme and to avoid the costs and administrative burden of maintaining an unnecessary stock market quotation. Finally, Brian Kingham has confirmed in writing to the Independent Reliance Directors that he does not have any current intention, nor does he anticipate having any intention in the foreseeable future, of disposing or seeking to dispose of his Reliance Shares (representing approximately 32 per cent. of the entire existing issued share capital of Reliance) other than to the Reliance Corporation Group. The trustees of the Brian Kingham Settlements hold an aggregate of 8,278,155 Reliance Shares (representing approximately 39 per cent. of the entire existing issued share capital of Reliance) in their capacity as trustees of the Brian Kingham Settlements. Brian Kingham has also confirmed that he is not aware of any intention of the trustees of the Brian Kingham Settlements to dispose of or seek to dispose of any Reliance Shares, either now or in the foreseeable future other than to the Reliance Corporation Group, and he does not have any current intention (nor does he anticipate doing so in the foreseeable future) of persuading or encouraging the trustees to do the same. It is the view of the Independent Reliance Directors that the prospects of a sale of all or a majority of the Reliance Shares to a third party, either currently or in the foreseeable future, are highly unlikely. 4. Irrevocable Undertakings Reliance Executive has received an irrevocable undertaking from Artemis Investment Management Limited to accept the Offer and vote in favour of Resolution 2 to be proposed at the EGM in respect of its entire holding of Reliance Shares (representing approximately 4.8 per cent. of the entire existing issued share capital of Reliance and approximately 16 per cent. of the Reliance Shares to which the Offer relates). None of the Reliance Directors (other than Brian Kingham) hold Reliance Shares; however, each of Julian Nicholls and Mark Harrison who hold Reliance Options, have entered into irrevocable undertakings to exercise in full their Reliance Options and accept the Offer (following the proposals being made to Reliance Optionholders). These irrevocable undertakings remain binding, even in the event of a higher competing offer for Reliance, unless the Offer lapses or is withdrawn. Further details of these irrevocable undertakings are set out in Appendix III to this Announcement. 5. Information on the Reliance Corporation Group Reliance Executive (an indirect and wholly-owned subsidiary of Reliance Corporation) is a recently incorporated private limited company established for the purposes of making the Offer, the directors of which are Brian Kingham and Neil French. Pursuant to the Share Exchange Agreements, Reliance Executive has agreed to acquire: - 6,830,409 Reliance Shares held by Brian Kingham (being all of the Reliance Shares held by Brian Kingham) conditional, inter alia, upon the Offer becoming or being declared unconditional in all respects; and - 8,278,155 Reliance Shares held by the Brian Kingham Settlements (being all of the Reliance Shares held by the Brian Kingham Settlements) conditional, inter alia, upon the Offer becoming or being declared unconditional in all respects and valid acceptances having been received in respect of not less than two-thirds of the Reliance Shares to which the Offer relates. The Reliance Shares held by Brian Kingham and the Brian Kingham Settlements represent approximately 70 per cent. of the entire existing issued share capital of Reliance. Following the Offer becoming or being declared unconditional in all respects, the ordinary shares in the capital of Reliance Corporation will continue to be held 100 per cent. by Brian Kingham. The Brian Kingham Settlements will exchange 8,278,155 Reliance Shares, ultimately, for unsecured loan notes to be issued by Reliance Corporation, further details of which will be set out in the Offer Document. The ultimate holding company of the Reliance Corporation Group is Reliance Corporation which owns the entire issued share capital of Reliance Enablement. Reliance Enablement, in turn, owns the entire issued share capital of Reliance Executive. The Reliance Corporation Group is initially being financed by approximately £100,000 of ordinary shares and preference shares in Reliance Corporation to be subscribed for by Brian Kingham and Barclays. Approximately £80 million will be provided under term loan and revolving credit facilities made available by Barclays and RBS to Reliance Enablement. To date, no member of the Reliance Corporation Group has traded or engaged in any activities, other than those incidental to its incorporation and the making of the Offer. Brian Kingham, the Brian Kingham Settlements, the Management Team and the members of the Reliance Corporation Group are deemed to be acting in concert for the purposes of the Code. 6. Information on Reliance Reliance is an established market leader in the provision of contract security, facilities management, support services and business process outsourcing. Reliance employs over 12,000 people from a network of offices throughout the UK. In the year ended 27 April 2007, revenues (including share of joint ventures) were up 8.8 per cent. to £345.5 million (2006: £317.5 million). Profit on ordinary activities before taxation and exceptional items was £13.6 million (2006: £13.1 million). Diluted earnings per share before exceptional items amounted to 46.2 pence (2006: 41.9 pence). 7. Directors, management, employees and location The Reliance Executive Board has given assurances to the Independent Reliance Directors that, following the Offer becoming or being declared unconditional in all respects, the existing employment rights, including pension rights, of all Reliance Group employees will be fully safeguarded. Reliance Executive confirms that it has no plans to alter existing arrangements with employees or to change the locations of the Company's places of business. 8. Reliance Share Option Schemes The Offer will extend to any Reliance Shares which are issued or unconditionally allotted and fully paid (or credited as fully paid) before the date on which the Offer closes (or, subject to the Code, by such earlier date as Reliance Executive may decide), including Reliance Shares issued pursuant to the exercise of Reliance Options granted under the Reliance Share Option Schemes or otherwise. Appropriate proposals will be made to Reliance Optionholders. The proposals will invite Reliance Optionholders to exercise their Reliance Options immediately prior to the Offer becoming or being declared unconditional in all respects and to accept the Offer for the Reliance Shares so acquired. The Remuneration Committee has resolved that, subject to the Offer becoming or being declared unconditional in all respects, the performance conditions in respect of the Reliance 1996 Share Option Scheme and in respect of the Reliance Options granted in 2004 under the Reliance Long Term Incentive Plan be waived. Performance conditions in respect of the Reliance Options granted under the Reliance Long Term Incentive Plan in 2005 and 2006 will be reviewed prior to the Offer becoming or being declared unconditional. The Reliance Shadow Share Option Scheme, which is a cash scheme, will pay cash to the relevant Reliance Optionholders within 30 days of the Offer becoming or being declared unconditional in all respects. 9. Management Arrangements The Management Team comprises Julian Nicholls, Mark Harrison and Jeremy Simon (Reliance Group Company Secretary and legal counsel). It is intended that, following the Offer becoming or being declared unconditional in all respects, the Management Team will participate in the following incentive arrangements to be established by Reliance Corporation: (a) LTIP In order to ensure that the Management Team is fully incentivised, it is proposed that, following the Offer becoming or being declared unconditional in all respects, the directors of Reliance Corporation will seek to implement a long term management incentive scheme (the "LTIP") for the benefit of the Management Team. Participation in the LTIP may also be offered to a limited number of Reliance Corporation senior executives. It is proposed that the LTIP will permit participants to choose as to whether to be awarded a specific number of deferred purchase shares (" Deferred Shares") in the capital of Reliance Corporation, a number of phantom share awards ("Phantom Shares") based on the value of shares in the capital of Reliance Corporation, or a proportion of each. The value of these Deferred Shares and Phantom Shares (together the "Shares") will be determined over a four year performance period (the "Performance Period") in accordance with a pre-determined valuation methodology referenced to an increase in the value of Reliance Corporation shares over the Performance Period. The Phantom Shares will entitle the participant to an amount of cash based on the value of the shares. As such, awards under the LTIP will only be realised at the full value of the shares after the expiry of the Performance Period or, if earlier, in the event of a change of control of Reliance Corporation or upon the participant leaving the Reliance Corporation Group in certain limited circumstances to the extent that a performance condition based on the value of the shares in the capital of Reliance Corporation is met. To the extent that the performance condition has been satisfied, the participants may retain some or all of their Shares for up to two years following the expiry of the Performance Period. Thereafter, Reliance Corporation will have an agreed period of time to call for the sale of the Deferred Shares and pay cash to satisfy the Phantom Shares. The LTIP awards will vest in full if the average annual increase in the value of Reliance Corporation ordinary shares over the Performance Period is not less than 40 per cent. In the event of a 40 per cent. increase, it is projected that the value of such awards (before tax) payable to the Management Team and the limited number of Reliance Corporation senior executives referred to above will be an aggregate of £17 million. The Management Team's share of this total would be approximately £8 million, of which £4 million would be payable to Julian Nicholls (in his capacity as Reliance Group Managing Director) but no other individual award would be higher than £2 million. To the extent that the increase in the value of Reliance Corporation ordinary shares is less than 40 per cent., awards will vest only to a reduced extent determined by reference to a pre-agreed sliding scale. To the extent that the increase in the value of Reliance Corporation ordinary shares is more than 40 per cent, awards will vest in full and the value of the awards would increase above £17 million to reflect out-performance. (b) Management subscription of shares It is proposed that following the Offer becoming or being declared unconditional in all respects, the Management Team and a limited number of Reliance Corporation senior executives will be given a limited opportunity to subscribe for shares ("Subscribed Shares") in the capital of Reliance Corporation for consideration equal to the value of Reliance Corporation shares implied by the Offer. It is anticipated that the aggregate value of the Subscribed Shares at the date of subscription will not exceed £1.4 million. Provided that the Subscribed Shares are held by the participant for a four year period and that the participant remains a Reliance Corporation senior executive for the whole of that period, one Phantom Share will be delivered to the participant for every two Subscribed Shares held. There will be no other performance conditions attaching to these Phantom Shares. (c) Long Term Cash Bonus Scheme It is intended that certain other senior executives who will not participate in the LTIP, as set out in paragraph 9(a) above, will participate in a separate, cash-based long-term incentive scheme. (d) Annual Cash Bonus Scheme In addition to the LTIP, as set out in paragraph 9(a) above, it is also proposed that the Management Team will be entitled to participate in a Reliance Corporation Group annual cash bonus scheme which will operate on a basis similar to the existing arrangements in place for the Reliance Group. JPMorgan Cazenove considers the terms of the Management Arrangements to be fair and reasonable so far as the Independent Reliance Shareholders are concerned. 10. Extraordinary General Meeting Rule 16 of the Code states that, "except with the Panel's consent, an offeror or persons acting in concert with it may not make any arrangements with shareholders and may not deal or enter into arrangements to deal in shares of the offeree company or enter into arrangements which involve acceptance of an offer, either during an offer period or when an offer is reasonably in contemplation, if there are favourable conditions attached which are not being extended to all shareholders." In light of the provisions of Rule 16, the Panel has reviewed the Management Arrangements and has agreed, subject to Independent Reliance Shareholders' approval on a poll vote at the EGM, inter alia, to allow the Offer to be made. Accordingly, an EGM, notice of which will be set out in the Offer Document, will be convened. Resolution 1 set out in the notice of EGM to be contained in the Offer Document will be proposed, pursuant to the Code, to approve the Management Arrangements. In order to comply with the requirements of the Panel and Rule 16 of the Code, the vote on Resolution 1 will be taken on a poll and only the Independent Reliance Shareholders will be entitled to vote thereon. The Offer is conditional, inter alia, upon the passing of Resolution 1. JPMorgan Cazenove considers the terms of the Management Arrangements to be fair and reasonable as far as the Independent Reliance Shareholders are concerned. The Independent Reliance Directors will unanimously recommend the Independent Reliance Shareholders to vote in favour of Resolution 1 to be proposed at the EGM. Two further resolutions will be proposed at the EGM to approve, inter alia, the making of an application cancelling the admission of the Reliance Shares to trading on AIM and the re-registration of Reliance as a private limited company under section 53 of the Act. 11. Financing of the Offer The consideration payable under the Offer will be financed through committed cash resources, further details of which are set out below, which will be made available to Reliance Executive and the Reliance Corporation Group by Barclays and RBS. - The Reliance Corporation Group will initially be financed using a combination of equity and debt. Approximately £100,000 will by provided by Brian Kingham and Barclays for an equity subscription for ordinary and preference shares in Reliance Corporation. - Pursuant to a term and revolving agreement (the "Facility Agreement") Barclays and RBS will make available to Reliance Enablement a new sterling term loan and revolving facility of approximately £80 million. - The Offer is not being made to Brian Kingham and the Brian Kingham Settlements in respect of their Reliance Shares. Brian Kingham has agreed, conditional upon the Offer becoming or being declared unconditional in all respects, to sell 6,830,409 of his Reliance Shares to Reliance Executive in exchange for the issue of Reliance Executive loan notes. - The trustees of the 1986 Settlement have agreed, conditional, inter alia, upon the Offer being declared unconditional in all respects, to sell 3,201,231 Reliance Shares to Reliance Executive for a cash consideration of £29,323,275, which will be invested in loan notes in Reliance Corporation. The trustees of the 1998 Settlement have also agreed, conditional, inter alia, upon the Offer becoming or being declared unconditional in all respects, to sell 5,076,924 Reliance Shares to Reliance Executive in exchange for £46,504,623 nominal of loan notes in Reliance Corporation. - Reliance Corporation will loan certain of the monies received by way of subscription for the loan notes to Reliance Enablement, which will in turn loan these monies (together with funds received from Barclays and RBS pursuant to the new term loan and revolving facilities agreement) to Reliance Executive to enable it to fund the Offer and associated costs. Under the terms of the Facility Agreement, the consent of Barclays and RBS is required by Reliance Executive if and to the extent it wishes to waive or amend or treat as satisfied any condition of the Offer where such waiver or consent would be materially prejudicial to the interests of Barclays and RBS (unless required by the Code). Further details of the financing of the Offer will be set out in the Offer Document. Hawkpoint has confirmed that it is satisfied that the necessary financial resources are available to Reliance Executive to enable it to satisfy in full the consideration payable by Reliance Executive as a result of full acceptance of the Offer. 12. Inducement fee Reliance Executive has entered into an inducement fee arrangement with Reliance and before the inducement fee was agreed, Brian Kingham confirmed to the Independent Reliance Directors that Reliance Executive would not make the Offer without entering into the inducement fee arrangement with Reliance. The inducement fee agreement was entered into between Reliance and Reliance Executive on 30 July 2007, pursuant to which Reliance has agreed to pay a fee of approximately £1.97 million (being 1 per cent. of the value of the entire existing issued share capital of Reliance at 916 pence per Reliance Share) to Reliance Executive (inclusive of any irrecoverable VAT) in the following circumstances: (a) where a third party makes an offer to acquire the Reliance Shares before the Offer lapses or is withdrawn and such third party offer becomes or is declared unconditional in all respects or is completed; or (b) where the Independent Reliance Directors subsequently withdraw or adversely modify their recommendation of the Offer, or recommend a third party offer. 13. Disclosure of interests in Reliance Save as disclosed in Appendix IV to this Announcement, neither Reliance Executive nor, so far as the Reliance Executive Directors are aware, any person acting in concert with it, has any interest in or right to subscribe for Reliance Shares or has any short position (including any short positions under a derivative, any agreement to sell or any delivery obligation or right to require another person to take delivery) in Reliance Shares, has borrowed or lent any Reliance Shares (save for any borrowed shares which have been either on-lent or sold) or has any arrangement in relation to Reliance Shares. For these purposes, "arrangement" includes any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery and borrowing or lending of Reliance Shares. An "arrangement" also includes any indemnity or option arrangement, any agreement or understanding, formal or informal, of whatever nature relating to Reliance Shares which may be an inducement to deal or refrain from dealing in such securities. "Interest" includes any long economic exposure, whether conditional or absolute, to changes in the price of securities and a person is treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities. 14. Further details of the Offer The Reliance Shares to be acquired by Reliance Executive pursuant to the Offer will be acquired fully paid and free from all liens, equities, charges, encumbrances, rights of pre-emption and other third party rights and interests of any nature whatsoever and together with all rights now or hereafter attaching thereto, including the right to receive and retain all dividends and other distributions (if any) declared, paid or made on or after 30 July 2007. Save as disclosed in paragraph 11 above, there are no agreements or arrangements to which Reliance Executive is a party which relate to the circumstances in which it may or may not invoke or seek to invoke a condition of the Offer. 15. Overseas Shareholders Unless otherwise determined by Reliance Executive and permitted by applicable law and regulation, the Offer will not be made, directly or indirectly, in or into, or by the use of the mails or by any means or instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce, or any facility of a national securities exchange, of a Restricted Jurisdiction and the Offer is not capable of acceptance by any such use, means, instrumentality or facility or from within a Restricted Jurisdiction. Accordingly, copies of the Offer Document and any related document are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from a Restricted Jurisdiction and persons receiving the Offer Document and any related document (including, without limitation, custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in or into or from a Restricted Jurisdiction. Doing so may render invalid any purported acceptance of the Offer. The availability of the Offer to persons who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements. 16. Compulsory acquisition, cancellation of admission of Reliance Shares to trading on AIM and re-registration If Reliance Executive receives acceptances under the Offer in respect of, and/or otherwise acquires, 90 per cent. or more of the Reliance Shares to which the Offer relates and the Offer becomes or is declared unconditional in all respects, Reliance Executive intends to exercise its rights pursuant to the provisions of sections 974 to 991 (inclusive) of the Companies Act 2006 to acquire compulsorily any outstanding Reliance Shares not acquired or agreed to be acquired pursuant to the Offer or otherwise. Subject to the passing of Resolution 2 set out in the notice of EGM to be contained in the Offer Document, Reliance Executive intends to procure the making of an application cancelling the admission of the Reliance Shares to trading on AIM. It is anticipated that such cancellation to trading will take effect 20 business days following the passing of Resolution 2. The cancellation of the trading of the Reliance Shares will significantly reduce the liquidity and marketability of any Reliance Shares not assented to the Offer and their value may be affected in consequence. Subject to the passing of Resolution 3 set out in the notice of EGM to be contained in the Offer Document and to the Offer becoming or being declared unconditional in all respects, it is also intended that Reliance will seek to be re-registered as a private company under section 53 of the Act. 17. Reasons for recommending the Offer In reaching the decision to recommend the Offer to Independent Reliance Shareholders, the Independent Reliance Directors have taken into account, inter alia, the following factors: - Price - the Offer Price represents a premium of approximately 28 per cent. to the Closing Price on 16 April 2007 (being the last business day prior to the commencement of the Offer Period) and of approximately 8.8 per cent. to the Closing Price on 30 July 2007 (being the last business day prior to the publication of this Announcement). - Prospects for the sale of Reliance to a third party - no proposals from any third party to make an offer for Reliance have been received by the Independent Reliance Directors. It is the view of the Independent Reliance Directors that the prospects of a sale of all or a majority of the Reliance Shares to a third party, either currently or in the foreseeable future, are highly unlikely. Accordingly, the Independent Reliance Directors consider that the Offer represents the best opportunity available to the Independent Reliance Shareholders to realise their investment in Reliance. The Independent Reliance Directors, having been so advised by JPMorgan Cazenove, consider the terms of the Offer to be fair and reasonable. In providing advice to the Independent Reliance Directors, JPMorgan Cazenove has taken into account the commercial assessments made by the Independent Reliance Directors. Accordingly, the Independent Reliance Directors will unanimously recommend Independent Reliance Shareholders to accept the Offer and to vote in favour of Resolution 1 to be proposed at the EGM. 18. General The Offer Document, the Form of Acceptance and Form of Proxy will be posted to Independent Reliance Shareholders as soon as practicable and in any event within 28 days of this Announcement, other than in relation to Independent Reliance Shareholders resident in a Restricted Jurisdiction. Appendix I to this Announcement contains conditions and further terms of the Offer. Appendix II contains the bases and sources of certain information used in this Announcement. Appendix III contains details of irrevocable undertakings received by Reliance Executive. Appendix IV contains details of interests in certain Reliance Shares. Appendix V contains definitions of certain terms used in this Announcement. Reliance Executive Tel: + 44 (0) 207 730 9901Brian KinghamNeil French Hawkpoint Tel: + 44 (0) 207 665 4500Paul BainesChris RobinsonJoseph Ayala Reliance Tel: + 44 (0) 1895 205 000Nigel Stapleton JPMorgan Cazenove Tel: + 44 (0) 207 588 2828Malcolm MoirJulian Cazalet The Offer Document, the Form of Acceptance and the Form of Proxy will be postedto Independent Reliance Shareholders as soon as practicable and, in any event,within 28 days of this Announcement, other than to Independent RelianceShareholders resident in a Restricted Jurisdiction. The Reliance Executive Directors accept responsibility for the informationcontained in this Announcement other than: (i) the information relating to theReliance Group, the Reliance Directors and their immediate families, relatedtrusts and connected persons; (ii) the recommendations and opinions of theIndependent Reliance Directors relating to the Offer; (iii) the informationrelating to the Management Team, their immediate families, related trusts andconnected persons; and (iv) the information relating to Brian Kingham hisimmediate family, related trusts, connected persons and the Brian KinghamSettlements. To the best of the knowledge and belief of the Reliance ExecutiveDirectors (who have taken all reasonable care to ensure that such is the case),the information contained in this Announcement for which they are responsible isin accordance with the facts and does not omit anything likely to affect theimport of such information. The Reliance Directors accept responsibility for the information contained inthis Announcement relating to the Reliance Group, the Reliance Directors, theirimmediate families, related trusts and connected persons (other than therecommendation(s) and opinions of the Independent Reliance Directors relating tothe Offer, for which only the Independent Reliance Directors acceptresponsibility as set out below and other than the information contained in thisAnnouncement relating to the Management Team, their immediate families, relatedtrusts and connected persons for which only the Management Team acceptresponsibility as set out below and other than the information relating to BrianKingham, his immediate family, related trusts, connected persons and the BrianKingham Settlements for which only Brian Kingham accepts responsibility as setout below). To the best of the knowledge and belief of the Reliance Directors(who have taken all reasonable care to ensure that such is the case), theinformation contained in this Announcement for which they are responsible is inaccordance with the facts and does not omit anything likely to affect the importof such information. The Independent Reliance Directors accept responsibility for the recommendationand opinions of the Independent Reliance Directors relating to the Offer. To thebest of the knowledge and belief of the Independent Reliance Directors (who havetaken all reasonable care to ensure that such is the case), the informationcontained in this Announcement for which they are responsible is in accordancewith the facts and does not omit anything likely to affect the import of suchinformation. The members of the Management Team accept responsibility for the informationcontained in this Announcement relating to the Management Team, their immediatefamilies, related trusts and connected persons. To the best of the knowledge andbelief of the Management Team (who have taken all reasonable care to ensure thatsuch is the case), the information contained in this Announcement for which theyare responsible is in accordance with the facts and does not omit anythinglikely to affect the import of such information. Brian Kingham accepts responsibility for the information contained in thisAnnouncement relating to himself, his immediate family, related trusts,connected persons and the Brian Kingham Settlements. To the best of theknowledge and belief of Brian Kingham (who has taken all reasonable care toensure that this is the case) the information contained in this Announcement forwhich he is responsible is in accordance with the facts and does not omitanything likely to affect the import of such information. Hawkpoint, which is authorised and regulated in the United Kingdom by theFinancial Services Authority is acting for Reliance Executive and no one else inconnection with the Offer and will not be responsible to anyone other thanReliance Executive for providing the protections afforded to clients ofHawkpoint or for providing advice in connection with the Offer. JPMorgan Cazenove, which is authorised and regulated in the United Kingdom bythe Financial Services Authority, is acting exclusively for Reliance and no oneelse in connection with the Offer and will not be responsible to anyone otherthan Reliance for providing the protections afforded to clients of JPMorganCazenove nor for providing advice in relation to the Offer. This Announcement does not constitute an offer or an invitation to purchase orsubscribe for any securities. The Offer will be made solely by means of theOffer Document which will contain the full terms and conditions of the Offer anddetails of how the Offer may be accepted, the Form of Acceptance (in respect ofcertificated Reliance Shares), and a notice to be published in the LondonGazette. Unless otherwise determined by Reliance Executive and permitted by applicablelaw and regulation, the Offer will not be made, directly or indirectly, in orinto, or by the use of the mails or by any means or instrumentality (including,without limitation, telephonically or electronically) of interstate or foreigncommerce, or any facility of a national securities exchange, of a Restricted andthe Offer will not be capable of acceptance by any such use, means,instrumentality or facility or from within a Restricted Jurisdiction.Accordingly, copies of this Announcement are not being, and must not be,directly or indirectly, mailed or otherwise forwarded, distributed or sent in orinto or from a Restricted Jurisdiction and persons receiving this Announcement(including, without limitation, custodians, nominees and trustees) must not mailor otherwise forward, distribute or send it in or into or from a RestrictedJurisdiction. Doing so may render invalid any purported acceptance of the Offer.The availability of the Offer to persons who are not resident in the UnitedKingdom may be affected by the laws of the relevant jurisdictions. Persons whoare not resident in the United Kingdom should inform themselves about, and,observe any applicable requirements. Under the provisions of Rule 8.3 of the Code, if any person is, or becomes,"interested" (directly or indirectly) in 1% or more of any class of "relevantsecurities" of Reliance, all "dealings" in any "relevant securities" of Reliance(including by means of an option in respect of, or a derivative referenced to,any such "relevant securities") must be publicly disclosed by no later than 3.30p.m. on the business day following the date of the relevant transaction. Thisrequirement will continue until the date on which the Offer becomes, or isdeclared, unconditional as to acceptances, lapses or is otherwise withdrawn oron which the "offer period" otherwise ends. If two or more persons act togetherpursuant to an agreement or understanding, whether formal or informal, toacquire an "interest" in "relevant securities" of Reliance, they will be deemedto 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 Reliance by Reliance Executive, or by any of its "associates",must be disclosed by no later than 12.00 p.m. on the business day following thedate 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 agreementto purchase, option in respect of, or derivative referenced to, securities. Terms in quotations marks are defined in the Code, which can also be found onthe Panel's website. If you are in any doubt as to the application of Rule 8 ofthe Code to you, please contact an independent financial adviser authorisedunder the Financial Services and Markets Act 2000 (as amended), consult thePanel's website or contact the Panel on telephone number +44 (0)20 7382 9026 orfax +44 (0)20 7638 1554. If you are in any doubt as to whether or not you arerequired to disclose a "dealing" under Rule 8, you should consult the Panel. If you are in any doubt about the action you should take, you are recommended toseek your own personal financial advice immediately from your stockbroker, bankmanager, solicitor, accountant or independent financial adviser authorised underthe Financial Services and Market Act 2000 (as amended) if you are resident inthe United Kingdom or, if not, from another appropriately authorised independentfinancial adviser. Copies of this Announcement can be found at Reliance's website atwww.reliancesecurity.co.uk APPENDIX I CONDITIONS AND FURTHER TERMS OF THE OFFER The Offer, which will comply with the applicable rules and regulations of theLondon Stock Exchange and the Code and will be governed by English law andsubject to the jurisdiction of the courts of England, will be subject to theterms and conditions set out below, in the Offer Document and (in respect ofcertificated Reliance Shares) in the Form of Acceptance. The Offer will be subject to the following conditions: (a) valid acceptances of the Offer being received (and not, where permitted, withdrawn) by not later than 3.00 p.m. on the first closing date of the Offer or such later time(s) and/or date(s) as Reliance Executive may, with the consent of the Panel or subject to the Code, decide in respect of not less than 90 per cent. (or such lower percentage as Reliance Executive may decide) in nominal value of the Reliance Shares to which the Offer relates and not less than 90 per cent. (or such lower percentage as Reliance Executive may decide) of the voting rights carried by the Reliance Shares to which the Offer relates. For the purpose of this condition: (i) the expression "Reliance Shares to which the Offer relates'' shall be construed in accordance with sections 974 to 991 (inclusive) of the Companies Act 2006; and (ii) Reliance Shares which have been unconditionally allotted but not issued shall be deemed to carry the voting rights which they will carry on issue; (iii) valid acceptance shall be treated as having been received in respect of any Reliance Shares that are, pursuant to section 979(8) and, if applicable, section 979(9) of the Companies Act 2006, treated as having acquired or unconditionally contracted to acquire by Reliance Executive by virtue of acceptances of the Offer; (b) the passing at the EGM of Resolution 1 in the notice of such EGM (without amendment); (c) no central bank government, governmental, quasi-governmental, supranational, statutory, administrative, regulatory body, or any court, institution, investigative body, association, trade agency or professional or environmental body or any other similar person or body in any jurisdiction (each, a "Relevant Authority'') having decided to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference or enacted, made or proposed any statute, regulation, decision or order or having taken any other step or done anything and there not continuing to be outstanding any statute, regulation, decision or order which would or might reasonably be expected to: (i) restrict or restrain, prohibit or delay to a material extent, impose additional adverse conditions or obligations with respect to, or otherwise interfere with the implementation of, the Offer or the acquisition of any Reliance Shares by Reliance Executive or any matters arising therefrom; (ii) result in a material delay in the ability of Reliance Executive, or render Reliance Executive unable, to acquire some or all of the Reliance Shares; (iii) require, prevent or materially delay the divestiture (or alter the terms envisaged for such divestiture) by any member of the wider Reliance Corporation Group or any member of the wider Reliance Group of all or any portion of their respective businesses, assets or properties or impose any limitation on the ability of any of them to conduct their businesses or own their respective assets or properties or any part thereof (in any such case to an extent which is material in the context of the wider Reliance Group or the wider Reliance Corporation Group); (iv) impose any material limitation on, or result in a material delay in, the ability of any member of the wider Reliance Corporation Group to acquire or hold or exercise effectively, directly or indirectly, all or any rights of ownership of shares or other securities of any member of the wider Reliance Group or on the ability of any member of the wider Reliance Group to hold or exercise effectively, directly or indirectly, all or any rights of ownership of shares or other securities or to exercise management control over any other member of the wider Reliance Group; (v) except pursuant to Part 28 of the Companies Act 2006, require any member of the wider Reliance Corporation Group or the wider Reliance Group to offer to acquire any shares or other securities or rights thereover in any member of the wider Reliance Group owned by any third party; (vi) make the Offer or its implementation or the proposed acquisition by Reliance Executive of any shares or other securities in Reliance or the acquisition or control of Reliance or any member of the wider Reliance Group, illegal, void or unenforceable in or under the laws of any jurisdiction or directly or indirectly materially restrict or delay, prohibit or otherwise interfere with the implementation of, or impose additional conditions or obligations with respect to, or otherwise challenge, the Offer or the acquisition of any shares in Reliance, or control of Reliance, by Reliance Executive; (vii) result in any member of the wider Reliance Group ceasing to be able to carry on business under any name under which it presently does so, the consequences of which would be material in the context of the wider Reliance Group or the wider Reliance Corporation Group taken as a whole; (viii) impose any limitation on the ability of any member of the wider Reliance Corporation Group or the wider Reliance Group to conduct or co-ordinate or integrate its business, or any part of it, with the business of any other member of the wider Reliance Corporation Group or the wider Reliance Group; or (ix) otherwise adversely affect the business, assets, prospects or profits of any member of the wider Reliance Corporation Group to a material extent or the wider Reliance Group to a material extent, and all applicable waiting and other time periods during which any such Relevant Authority could decide to take, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference or otherwise intervene under the laws of any relevant jurisdiction having expired, lapsed or been terminated; (d) all authorisations, orders, grants, recognitions, consents, confirmations, clearances, licences, permissions and approvals ("authorisations'') required by law in any jurisdiction for or in respect of the Offer and the proposed acquisition of any shares or securities, directly or indirectly, in, or control of, Reliance or any member of the wider Reliance Group by any member of the wider Reliance Corporation Group having been obtained in terms and/or form reasonably satisfactory to Reliance Executive from all appropriate Relevant Authorities or (without prejudice to the generality of the foregoing) from any persons or bodies with whom any member of the wider Reliance Group has entered into contractual arrangements and such authorisations together with all authorisations necessary for any member of the wider Reliance Group to carry on its business remaining in full force and effect and there being no notice or intimation of any intention to revoke, suspend, materially modify or not to renew the same and all necessary filings having been made, all appropriate waiting and other time periods (including extensions thereto) under any applicable legislation and regulations in any jurisdiction having expired, lapsed or been terminated and all necessary statutory or regulatory obligations in any jurisdiction in respect of the Offer or the proposed acquisition of Reliance by Reliance Executive or of any Reliance Shares or any matters arising therefrom having been complied with; (e) save as Disclosed, there being no provision of any agreement, permit, lease, licence or other instrument to which any member of the wider Reliance Group is a party or by or to which it or any of its assets may be bound or subject which, as a consequence of the making or implementation of the Offer or the acquisition by Reliance Executive directly or indirectly of Reliance or because of a change in the control or management of Reliance or any member of the wider Reliance Group, could or might reasonably be expected to result in (in any such case which is or would be material in the context of the wider Reliance Group taken as a whole): (i) any monies borrowed by, or other indebtedness (actual or contingent) of, or grant available to, any member of the wider Reliance Group becoming repayable or capable of being declared repayable immediately or earlier than the stated maturity or repayment date or the ability of any member of the wider Reliance Group to borrow moneys or incur indebtedness being or becoming capable of being withdrawn or inhibited; (ii) any such agreement, arrangement, permit, lease, licence or other instrument or any right, interest, liability or obligation of any member of the wider Reliance Group therein, being terminated or adversely modified or affected or any adverse action being taken or any onerous obligation or liability arising thereunder; (iii) any mortgage, charge or other security interest being created over the whole or any part of the business, property or assets of any member of the wider Reliance Group or any such security (whenever arising) becoming enforceable; (iv) the value of any member of the wider Reliance Group or its financial or trading position or prospects being prejudiced or adversely affected; (v) any assets or interests of any member of the wider Reliance Group being or falling to be charged or disposed of or any right arising under which any such asset or interest could be required to be disposed of or charged otherwise than in the ordinary course of business; (vi) the rights, liabilities, obligations or interests or business of any member of the wider Reliance Group in or with any other person, firm or company (or any arrangement relating to such interest or business) being terminated or adversely modified or affected; (vii) any member of the wider Reliance Group ceasing to be able to carry on business under any name under which it currently does so; or (viii) the creation of any liability, actual or contingent, by any member of the wider Reliance Group; (f) since 27 April 2007, save as Disclosed, no member of the Reliance Group having: (i) (save for Reliance Shares issued pursuant to the exercise of options granted under the Reliance Share Option Schemes or as between Reliance and wholly-owned subsidiaries of Reliance ("Intra-Reliance Group Transactions")) issued or agreed to issue or authorised or proposed the issue of additional shares of any class or securities convertible into or rights, warrants or options to subscribe for or acquire any such shares or convertible securities; (ii) recommended, declared, paid or made or proposed to recommend, declare, pay or make any dividend, bonus or other distribution (whether payable in cash or otherwise) other than dividends lawfully paid to Reliance or wholly-owned subsidiaries of Reliance; (iii) merged or demerged with or acquired any body corporate, partnership or business; (iv) save for Intra-Reliance Group Transactions, (other than for acquisition or disposals in the ordinary course of business) acquired or disposed of, transferred, mortgaged or charged or created any security interest over any asset or any right, title or interest in any asset (including shares and trade investments) or authorised, proposed or announced any intention to do so which, in any such case, is material in the context of the wider Reliance Group taken as a whole; (v) save for Intra-Reliance Group Transactions, issued or authorised or proposed the issue of any debentures or incurred or increased any indebtedness or contingent liability or made, authorised, proposed or announced an intention to propose any change in its share or loan capital which (other than in the case of Reliance) is material in the context of the wider Reliance Group taken as a whole; (vi) entered into or varied or announced its intention to enter into or vary any contract, transaction, commitment or arrangement (whether in respect of capital expenditure or otherwise) which is of a long term or unusual nature or which involves or could involve an obligation of a nature or magnitude which, in any such case, is material in the context of the Reliance Group taken as a whole or which is or is likely to be restrictive in any material respect on the business of any member of the wider Reliance Group or the wider Reliance Corporation Group; (vii) entered into, implemented, authorised or proposed any reconstruction, amalgamation, scheme of arrangement or other transaction or arrangement otherwise than in the ordinary course of business or announced any intention to do so; (viii) entered into, or varied in any material respect the terms of, any contract or agreement with any of the directors or senior executives of Reliance or any of its subsidiaries; (ix) taken or proposed any corporate action or had any legal proceedings started or threatened against it or had any petition presented for its winding-up (voluntary or otherwise), dissolution or reorganisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of all or any of its material assets and/or revenues or any analogous proceedings in any jurisdiction; (x) waived or compromised any claim other than in the ordinary course of business which is material in the context of the wider Reliance Group taken as a whole; (xi) (save as disclosed in any registers available to the public) made any material amendment to its memorandum or articles of association; (xii) purchased, redeemed or repaid or proposed the purchase, redemption or repayment of any of its own shares or other securities or reduced or made any other change to any part of its share capital which (other than in the case of Reliance) is material in the context of the wider Reliance Group taken as a whole; (xiii) been unable or admitted in writing that it is unable to pay its 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 all or a substantial part of its business, in any case, with a material adverse effect on the wider Reliance Group taken as a whole; (xiv) made or agreed or consented to any significant change to the terms of the trust deeds constituting the pension schemes established for its directors, employees or their dependants or to the benefits which accrue; or to the pensions which are payable, thereunder, or to the basis on which qualification for, or accrual or entitlement to; such benefits or pensions are calculated or determined or to the basis upon which the liabilities (including pensions) of such pension schemes are funded or made, or agreed or consented to any change to the trustees including the appointment of a trust corporation; or (xv) entered into, varied or modified any contract, commitment or agreement with respect to any of the transactions, matters or events referred to in this condition (h) or announced an intention to do so which is material in the context of the wider Reliance Group taken as a whole; (g) since 27 April 2007, save as Disclosed: (i) no litigation, arbitration, prosecution or other legal proceedings having been instituted, announced or threatened or become pending or remaining outstanding by or against any member of the wider Reliance Group or to which any member of the wider Reliance Group is or may become a party (whether as claimant, respondent or otherwise) and no enquiry or investigation by or complaint or reference to any Relevant Authority or other investigative body having been threatened, announced, implemented or instituted or remaining outstanding against or in respect of any member of the wider Reliance Group which, in any such case, would or might reasonably be expected adversely to affect any member of the wider Reliance Group to an extent which is material in the context of the Reliance Group taken as a whole; (ii) no material adverse change having occurred in the business, assets, financial or trading position, profits or prospects of any member of the wider Reliance Group which in any case would have a material adverse effect on the wider Reliance Group taken as a whole; (iii) no contingent or other liability having arisen which in any case is material in the context of the wider Reliance Group taken as a whole; (iv) no investigation by any Relevant Authority having been threatened, announced, implemented or instituted or remaining outstanding which in any case which in any case is material in the context of the Reliance Group taken as a whole; (h) save as Disclosed, Reliance Executive not having discovered that: (i) any business, financial or other information concerning any member of the wider Reliance Group publicly disclosed or disclosed to Reliance Executive or to any of the advisers or otherwise at any time by or on behalf of any member of the Reliance Group is misleading in any material respect, contains a misrepresentation of fact or omits to state a fact necessary to make the information contained therein not misleading in any material respect and which was not subsequently corrected before the date of the Offer Document by disclosure either publicly or otherwise to Reliance Executive which, in any such case, is material in the context of the wider Reliance Group taken as a whole; (ii) any member of the wider Reliance Group is subject to any liability, actual or contingent, which is material in the context of the wider Reliance Group taken as a whole; (iii) any past or present member of the wider Reliance Group has not complied with all applicable legislation or regulations of any jurisdiction with regard to the storage, disposal, discharge, spillage, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or to harm human health or otherwise relating to environmental matters (which non-compliance might give rise to any liability (whether actual or contingent) on the part of any member of the wider Reliance Group which is material in the context of the Reliance Group taken as a whole) or that there has otherwise been any such disposal, discharge, spillage, leak or emission (whether or not the same constituted a non-compliance by any person with any such legislation or regulations and wherever the same may have taken place) which in any such case might give rise to any liability (whether actual or contingent) on the part of any member of the wider Reliance Group which is material in the context of the wider Reliance Group taken as a whole; (iv) there is, or is likely to be, any liability (whether actual or contingent) to make good, repair, reinstate or clean up any property now or previously owned, occupied or made use of by any past or present member of the wider Reliance Group or any controlled waters under any environmental legislation, regulation, notice, circular or order of any Relevant Authority or otherwise and which is material in the context of the wider Reliance Group taken as a whole; or (v) circumstances exist (whether as a result of the making of the Offer or otherwise) which would be likely to lead to any Relevant Authority instituting, or whereby any member of the wider Reliance Group or the wider Reliance Corporation Group would be likely to be required to institute, an environmental audit or take any other steps which in any such case would be likely to result in any actual or contingent liability on the part of any member of the wider Reliance Group or the wider Reliance Corporation Group to improve or install new plant or equipment or make good, repair, re-instate or clean up any land or other asset now or previously owned, occupied or made use of by any member of the wider Reliance Group which liability is or is likely to be material in the context of the wider Reliance Group taken as a whole. Subject to the requirements of the Panel, Reliance Executive reserves the rightto waive all or any of conditions (c) to (h) (inclusive) above, in whole or inpart. Conditions (c) to (h) (inclusive) must be fulfilled, be determined byReliance Executive to be or remain satisfied, or be waived by midnight on the21st day after the later of the first closing date of the Offer and the date onwhich condition (a) is fulfilled (or such later date as Reliance Executive may,with the consent of the Panel, decide), failing which the Offer will lapse.Reliance Executive shall be under no obligation to waive or treat as fulfilledany of conditions (c) to (h) (inclusive) by a date earlier than the latest datespecified 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 consent of the Panel, Reliance Executive will not invoke any ofthe above conditions (except condition (a) or condition (b)) so as to cause theOffer not to proceed, or lapse or to be withdrawn unless the circumstances thatgive rise to the right to invoke the relevant condition are of materialsignificance to Reliance Executive in the context of the Offer. If Reliance Executive is required by the Panel to make an offer for RelianceShares under the provisions of Rule 9 of the Code, Reliance Executive may makesuch alterations to the conditions as are necessary to comply with theprovisions of that Rule. The Offer will lapse if, before 3.00 p.m. on the first closing date of the Offeror the date on which the Offer becomes or is declared unconditional as toacceptances (whichever is later), (i) the Offer or any part of it is referred tothe Competition Commission; or (ii) following a request to the EuropeanCommission under Article 22(3) of Council Regulation 139/2004/EC (the"Regulation") in relation to the Offer or any part of it, which request isaccepted by the European Commission, the European Commission initiatesproceedings under Article 6(1)(c) of the Regulation. If the Offer lapses, it will cease to be capable of further acceptance. RelianceShareholders who have already accepted the Offer shall then cease to be bound byacceptances delivered on or before the date on which the Offer lapses. APPENDIX II BASES AND SOURCES Unless otherwise stated in this Announcement: (a) financial information relating to Reliance has been extracted from the audited accounts of Reliance for the years ended 29 April 2005, 28 April 2006 and 27 April 2007; (b) references to the value of Reliance and the Offer Price are based upon 21,512,855 ordinary Reliance Shares being in issue on 30 July 2007, such number of shares excluding the 400,000 Reliance Shares held in treasury which do not form part of the Reliance Shares to which the Offer relates; and (c) all prices quoted for Reliance Shares are Closing Prices. APPENDIX III IRREVOCABLE UNDERTAKINGS Irrevocable undertakings to accept, or to procure the acceptance of, the Offer havebeen received by Reliance Executive from the following persons in respect offollowing interests in Reliance Shares: Independent Reliance Shareholders Name Number of Reliance Shares Percentage of existing irrevocably committed issued share capital (%)ArtemisInvestment 1,028,037 4.8Management Limited(1) Reliance Optionholders JulianNicholls (1),(2) 135,117 nilMarkHarrison (1),(2) 36,862 nil Notes:(1).This irrevocable undertaking to accept the Offer remains binding, even if a higher competing offer is announced by a third party, unless the Offer lapses or is withdrawn. (2).The irrevocable undertakings entered into by certain of the Reliance Directors only cover options over Reliance Shares granted under Reliance Share Option Schemes. Pursuant to such undertakings, the Reliance Directors have irrevocably agreed to either (i) accept, when made, the proposals to Reliance Optionholders; or (ii) exercise in full the relevant option and accept the Offer in full in respect of all Reliance Shares resulting therefrom. APPENDIX IV INTERESTS IN SHARES As at the close of business on 30 July 2007 (being the last practicable dateprior to the date of this Announcement), the interests (as defined in section820 of the Companies Act 2006) of the Concert Party and their immediate familiesand connected persons, all of which are beneficial unless otherwise stated, inthe share capital of Reliance were as follows: Name Number of Reliance Shares Percentage of existing issued share capital (%)Brian Kingham 6,830,409 31.81986 Settlement 3,201,231 14.91998 Settlement 5,076,924 23.6Julian Nicholls nil nilMark Harrison nil nilJeremy Simon nil nil TOTAL 15,108,564 70.2 As at the close of business on 30 July 2007 (being the last practicable date prior tothe date of this Announcement) the following options in respect of Reliance Shareshad been granted to the following members of the Concert Party, for nominalconsideration and remained outstanding under the Reliance Share Option Schemes: Name Type Date of Numbe Exercise Price Exercisable Expiry date grant of from Relianc Shares under optionJulian LTIP 04.07.2005 50,980 £1 (in 04.07.2009 03.07.2015 aggregate)Nicholls LTIP 06.07.2006 64,137 £1 (in 06.07.2010 05.07.2016 aggregate) LTIP 08.12.2006 20,000 £1 (in 08.12.2010 07.12.2016 aggregate)Mark LTIP 10.10.2006 26,862 £1 (in 10.10.2010 09.10.2016 aggregate)Harrison LTIP 08.12.2006 10,000 £1 (in 08.12.2010 07.12.2016 aggregate)Jeremy ESOP 29.01.2002 14,705 680p 29.01.2006 28.01.2012Simon ESOP 02.07.2003 16,250 800p 02.07.2007 01.07.2013 LTIP 04.08.2004 5,909 £1 (in 04.08.2008 03.08.2014 aggregate) LTIP 04.07.2005 27,450 £1 (in 04.07.2009 03.07.2015 aggregate) LTIP 06.07.2006 14,232 £1 (in 06.07.2010 05.07.2016 aggregate) LTIP 08.12.2006 10,000 £1 (in 08.12.2010 07.12.2016 aggregate) APPENDIX V DEFINITIONS The following definitions apply throughout this Announcement unless the contextotherwise requires: "1986 Settlement" the B. Kingham 1986 Settlement dated 18 March 1986 and resident in Guernsey"1998 Settlement" the B. Kingham Settlement No.1 dated 31 March 1998 and resident in England and Wales"Act'' the Companies Act 1985 (as amended)"AIM'' AIM, the market of that name operated by the London Stock Exchange"Announcement" this announcement being made pursuant to Rule 2.5 of the Code"Australia" the Commonwealth of Australia, its states, territories or possessions and all areas subject to its jurisdiction and any political subdivision thereof"Barclays" Barclays Capital the investment banking division of Barclays Bank PLC of 5 The North Colonnade, Canary Wharf, London E14 4BB"Brian Kingham the 1986 Settlement and the 1998 SettlementSettlements""business day" a day (not being a Saturday, a Sunday or a public holiday) on which clearing banks in the City of London are open for the transaction of general commercial business"Canada" Canada, its possessions, provinces and territories and all areas subject to its jurisdiction or any political subdivision thereof"certificated'' or in relation to a share or other security, not in uncertificated form (that is, not in CREST)"in certificatedform''"Closing Price" the closing middle market quotation of a share as derived from the AIM Appendix of the Daily Official List save that quotations for 30 July 2007 have been derived from the website of the London Stock Exchange"Code'' the City Code on Takeovers and Mergers"Companies Act the Companies Act 20062006""Concert Party" each of Brian Kingham, the Brian Kingham Settlements, the Management Team and each member of the Reliance Corporation Group"connected person" has the meaning given to that term in section 346 of the Act"CREST'' the relevant system (as defined in the Regulations) in respect of which Euroclear UK and Ireland Limited is the operator"Daily Official the Daily Official List of the London Stock ExchangeList''"Disclosed" means (i) as disclosed in Reliance's report and accounts for the year ended 27 April 2007; (ii) as publicly announced by Reliance (by the delivery of an announcement to an authorised Regulatory Information Service on or prior to 30 July 2007); (iii) as disclosed in this Announcement; or (iv) as otherwise disclosed in writing, or in the documentation or written information provided, to Reliance Executive or its advisers by or on behalf of Reliance prior to 30 July 2007 in the context of the Offer"EGM" the extraordinary general meeting of Reliance to be held to approve the Resolutions, and any adjournment thereof, notice of which will be set out in the notice of EGM at the end of the Offer Document"Form of the form of acceptance and authority relating to the OfferAcceptance'' in respect of certificated Reliance Shares"Hawkpoint" Hawkpoint Partners Limited of 41 Lothbury, London EC2R 7AE"Independent the Reliance Directors other than Brian Kingham, JulianReliance Nicholls and Mark HarrisonDirectors''"Independent the Reliance Shareholders other than the members of theReliance Concert Party and their connected personsShareholders""Japan" Japan, its cities, prefectures, territories and possessions"JPMorgan JPMorgan Cazenove Limited of 20 Moorgate, London EC2R 6DACazenove''"London Stock London Stock Exchange PLCExchange''"Management the management arrangements, details of which are set out inArrangements" paragraph 9 of this Announcement"Management Team" Julian Nicholls, Mark Harrison and Jeremy Simon"Offer'' the recommended cash offer by Reliance Executive, on the terms and subject to the conditions set out in Appendix I of this Announcement, the Offer Document and the Form of Acceptance (in respect of certificated Reliance Shares), to acquire all of the Reliance Shares held by the Independent Reliance Shareholders (including, where the context requires, any subsequent revision, variation, extension or renewal of such offer)"Offer Period'' the period commencing on 17 April 2007 and ending on the later of (i) 1.00 p.m. on the first closing date of the Offer; (ii) the time and date on which the Offer becomes or is declared unconditional as to acceptances; and (iii) the time and date on which the Offer lapses or is withdrawn"Offer Price" 916 pence for every Reliance Share held by Independent Reliance Shareholders"Panel'' the Panel on Takeovers and Mergers"pounds", "£" or the lawful currency of the United Kingdom"pence""RBS" The Royal Bank of Scotland PLC of 280 Bishopsgate, London, EC2M 4RB"Regulatory any channel recognised as a channel for the dissemination ofInformation regulatory information by listed companies as defined in theService" Listing Rules published by the Financial Services Authority"Reliance'' Reliance Security Group PLC, a public limited company incorporated in England and Wales with company number 01473721"Reliance Reliance Corporation Limited, a private limited companyCorporation" incorporated in England and Wales with company number 06036746"Reliance Reliance Corporation and its existing subsidiaryCorporation Group'' undertakings"Reliance the directors of Reliance at the date of this AnnouncementDirectors'' or"Board of Reliance""Reliance Reliance Enablement Limited, a private limited companyEnablement" incorporated in England and Wales with company number 06302549"Reliance Employee The Reliance Security Group PLC Employee Trust, PritchardsBenefit Trust" Trustees Limited, PO Box 119, Martello Court, Admiral Trust, St Peter Port, Guernsey GY1 3H"Reliance Reliance Executive Limited, a private limited companyExecutive'' incorporated in England and Wales with company number 06302567"Reliance Executive the directors of Reliance Executive as at the date of thisDirectors'' or Announcement"Reliance ExecutiveBoard""Reliance Group'' Reliance and its existing subsidiary undertakings"Reliance Options" options or other rights to acquire Reliance Shares under the Reliance Share Option Schemes or otherwise"Reliance holders of Reliance OptionsOptionholders""Reliance Share the Reliance Long Term Incentive Plan, the Reliance ApprovedOption Schemes'' Executive Share Option Scheme (1994), the Reliance Shadow Share Option Scheme and the Reliance 1996 Company Share Option Scheme"Reliance holders of Reliance SharesShareholders''"Reliance Shares'' the issued fully paid ordinary shares of 5 pence each in the capital of Reliance and any further such shares which are unconditionally allotted or issued and fully paid or credited as fully paid before the date on which the Offer closes (or such earlier date, not being earlier than the date on which the Offer becomes or is declared unconditional as to acceptances, as Reliance Executive may, subject to the Code and the Panel, decide)"Remuneration the remuneration committee of the Board of RelianceCommittee" consisting of Nigel Stapleton, David Walter and Roger Wood"Resolutions" the resolutions to be proposed at the EGM and set out in the notice of EGM at the end of the Offer Document (and "Resolution 1", "Resolution 2" and "Resolution 3" shall be construed accordingly)"Restricted the United States, Canada, Australia or Japan or any otherJurisdiction" jurisdiction where extension or acceptance of the Offer would violate the law of that jurisdiction"Securities Act" the United States Securities Act 1933, as amended"Share Exchange means the share exchange agreements between (1) each ofAgreements" Brian Kingham and the Brian Kingham Settlements and (2) Reliance Executive, further details of which will be set out in the Offer Document"uncertificated'' in relation to a share or other security, recorded on theor "in relevant register in uncertificated form in CREST and titleuncertificated to which, by virtue of the Regulations, may be transferredform'' by means of CREST"United Kingdom'' the United Kingdom of Great Britain and Northern Irelandor "UK''"US" or "United the United States of America, its territories andStates" possessions, any state of the United States of America (and the District of Columbia) and all other areas subject to its jurisdiction"wider Reliance means Reliance, its subsidiaries, subsidiary undertakingsGroup'' and associated undertakings and any other body corporate, partnership, joint venture or person in which Reliance and such undertakings (aggregating their interests) have an interest (direct or indirect) in 20 per cent. or more of the voting or equity capital (or the equivalent)"wider Reliance means Reliance Corporation, Reliance Enablement, RelianceCorporation Group'' Executive, its subsidiaries, subsidiary undertakings and associated undertakings and any other body corporate, partnership, joint venture or person in which Reliance Executive and such undertakings (aggregating their interests) have an interest (direct or indirect) in 20 per cent. or more of the voting or equity capital (or the equivalent) Save where otherwise stated, for the purpose of this Announcement,"subsidiary'', "subsidiary undertaking'', "associated undertaking'' and"undertaking'' shall be construed in accordance with the Act (but for thispurpose ignoring paragraph 20(1)(b) of Schedule 4A of the Act). In this Announcement, the singular includes the plural and vice versa, unlessthe context otherwise requires. All references in this Announcement to time are to London time. All references to legislation in this Announcement are to English legislationunless the contrary is stated. Any references to any provision of anylegislation shall include any amendment, re-enactment or extension thereof. This information is provided by RNS The company news service from the London Stock Exchange