SuperGroup Regulatory News (SGP)

1 Apr 2005 08:12

Sanctuary Group PLC01 April 2005 For immediate release: 1st April 2005 The Sanctuary Group plc SANCTUARY ADDS GLOBAL SUPERSTAR SIR ELTON JOHN TO MANAGEMENT ROSTER ON ACQUISITION OF MANAGEMENT COMPANY, TWENTY-FIRST ARTISTS The Sanctuary Group plc ("Sanctuary" or the "Group") announces that it hasagreed to acquire 100% of the share capital of Twenty-First Artists Limited ("Twenty-First") from Sir Elton John and co-owners, Frank Presland and KeithBradley (the "vendors"), for a consideration of £16 million funded through amixture of cash and shares. Twenty-First manages the creative and businessaffairs of Sir Elton John and throughout its five year history has also workedwith Jamiroquai and Mis-Teeq. It has recently launched the career of James Bluntand will continue to develop new artists in the future. Sir Elton John's career has spanned more than 35 years and he is one of theworld's most successful touring artists and one of the top-selling solo artistsof all time. He has sold close to a quarter of a billion records worldwide, withover 100 US Hot 100 Chart Singles, 12 Multi-Platinum, 23 platinum and 33 Gold USAlbums and 29 consecutive UK Top 40 Hits, earning 35 Gold and 25 Platinumalbums. Sir Elton has been awarded multiple Grammy Awards including the Grammy LegendAward and he collaborated with lyricist Tim Rice to create the soundtrack to theWalt Disney Pictures blockbuster The Lion King, for which his music won anAcademy Award. Sir Elton John said: "I am very pleased to be involved with Sanctuary as I have been impressed by theapproach they take, particularly toward the artist. I feel strongly that thiswill represent the continuation of a very creative period for me and I amlooking forward to working with Andy, Merck and the whole team". Commenting on the news, Sanctuary Executive Chairman Andy Taylor said: "The status of Sir Elton John as a respected and hugely successful artist isunassailable and we are obviously very happy to be involved in his career goingforward. I am pleased that Sanctuary's approach to the music industry isattractive to artists of the credibility of Sir Elton John and this can onlyenhance Sanctuary's proposition." Adding to this, Merck Mercuriadis, Group CEO, said: "Elton John is one of the greatest artists of all time responsible for some ofthe most important albums ever made and songs composed. He is also one of thegreatest icons and most celebrated people of our time. His new Peachtree Roadalbum proves that he remains as vital today as he was 30 years ago when herecorded Captain Fantastic and the Brown Dirt Cowboy and this is furtherevidenced by the enormous audiences he continues to attract and the box officerecords he continues to set on tour each year. To work with an artist of hisstature is a privilege accorded to few in our industry. Sir Elton's musicalgenius and passion for creating and performing will ensure that he will remainat the forefront of contemporary music globally for as long as he wishes and weare delighted to be working with him." Frank Presland, Chief Executive Officer of Twenty-First Artists, said: "I have watched and admired the development of Sanctuary over several years andI'm convinced that our future involvement with them will enable us to give aneven more effective global service to our artists." Twenty-First Artists Limited - Background As part of the terms, Sir Elton has signed a new 5-year management agreement,which, like other Sanctuary management agreements, provides commission on theearnings in all aspects of the artist's career. In addition, Frank Presland andKeith Bradley have each signed 5-year employment contracts to ensure continuityof key relationships. As part of this arrangement Sanctuary will also acquire the shares of formerTwenty-First director, Derek MacKillop, who left to set up his own business. In the last full year audited results (year-ended 31st March 2004)Twenty-First's turnover was £4.7 million and profit before tax was £1.55million. Net assets as at 31st March 2004 were £1.77 million. For the previoustwo years (2002 and 2003) turnover averaged £6.0 million pa and profit beforetax averaged £2.75 million pa. Sanctuary's existing management structure willenable cost savings with regard to Twenty-First, such as a reduction in officespace and services such as legal and touring provided by internal Sanctuaryresources, and the Group has identified a number of key areas and opportunitiesfor enhanced earnings over the next few years. The Board of Sanctuary istherefore comfortable that the acquisition costs will be fully recovered within3 years and the acquisition will show an annualised return in excess of 20% overthe period of the management contract. Current Trading - Sanctuary Group As Sanctuary reaches the half year, it is pleased to note that all activities,from records through to management, are performing as expected and the Group istrading in line with the Group's expectations for the full year. Consistent withprior years, shareholders should expect a stronger second half than first halfand indeed the Group anticipates that the disparity between the first and secondhalves will be more marked than hitherto. This is due to a strong second halfalbum release schedule and to the live touring season which peaks between Apriland October, and is when many of Sanctuary's artists are most active with newalbums and tours. Sanctuary Artist Management is the largest global artist management operationwith an impressive roster of established acts including Morrissey, Beyonce, GunsN' Roses, Robert Plant, Nelly, Fleetwood Mac, Destiny's Child, Iron Maiden,Kelis, Slipknot, Manic Street Preachers, D- 12, The Who, Xzibit, Jane'sAddiction, Eve, Groove Armada, Slayer and Russell Watson as well as emergingtalent such as Mario, Scott Stapp, Mastadon and Funeral For A Friend. Acquisition Details The initial consideration for the acquisition is £16 million that has beensatisfied by Sanctuary as follows: • The allotment of 30 million new ordinary shares in Sanctuary to the vendors. These shares have been/are being placed on behalf of the vendors by Credit Suisse First Boston (Europe) Limited at a price per share of 40.5p. • £3.85 million in cash funded from cash raised through the issue of the remaining £8.5 million of the £30 million convertible loan notes ("Loan Notes") first issued by Sanctuary on 28th November 2003. The Loan Notes were initially structured in two tranches with the first tranche of £21.5 million subscribed for in November 2003 with an option for investors to take-up a further £8.5m of Loan Notes (the "Second Tranche of Loan Notes") and certain warrants within 18 months. Highbridge International LLC has indicated that it wishes to exercise this option, subject to agreeing amendments to the terms of the Second Tranche of Loan Notes and the warrants already issued and to those to be issued - principally as follows: • The Second Tranche of Loan Notes will be convertible into fully paid ordinary shares in the Group at any time prior to 28th November 2008 at a conversion price of 55 pence per ordinary share, which represents a 33.3% premium on the share price at the close of business on 31st March 2005. The £21.5 million of loan notes issued under the first tranche are also exercisable at 55p whereas they had a conversion price on issue of 63.06 pence per ordinary share. • Whilst unconverted, the Second Tranche of Loan Notes will bear interest at a rate of 5.5% per annum, representing a discount on current interest rates being paid by the Group of 20% - the £21.5 million of loan notes issued under the first tranche had a coupon on issue of 4.5% per annum. Application will be made for Second Tranche of Loan Notes to be admitted to theOfficial List of the UK Listing Authority and to the London Stock Exchangemarket for listed securities by 6th April 2005. In addition, the vendors are entitled to further payments up to a maximumaggregate amount of £10 million as follows: • 30% of the cumulative net profits on ordinary activities (after tax) in excess of £12,250,000 for all financial years starting on or after 1 April 2005; and • In the event that Sir Elton signs a further 5-year management agreement with Twenty First in 2010 under the same terms as his current agreement, Sanctuary will pay either (a) if Sanctuary is a public company, a sum equal to £5 million multiplied by the percentage increase (if any) in the value of Sanctuary's shares by the time that the new management agreement is entered into or (b) if Sanctuary is a private company, £3 million. Ends For further information, contact: Philip RangerDirector, Corporate & Investor Relations The Sanctuary Group plc 020 7300 1323 Eddy LevitenHead of Corporate Communications The Sanctuary Group 020 7300 6542 Paul Downes/Rebecca Penney Merlin 020 7653 6620 Notes to Editors Sir Elton John - Biography Does Elton John really need an introduction? A legend in his lifetime, a greathumanitarian, a multiple Grammy winner, a flamboyant superstar and a hero of ourtimes, Elton is the most enduringly successful singer/songwriter of hisgeneration. He has sustained an inimitable career over 34 years, scoring atleast one Top 40 American hit a year between 1972 and 1996. His path has beenentirely his own, operating outside the fickle swings and roundabouts of ficklemusical fashions but always, somehow, managing to connect with everyone. Peachtree Road is, almost astonishingly, his 43rd album, yet the quality,enthusiasm and passion that he, his lyrical partner Bernie Taupin and his newlyinvigorated band bring to the project are as fresh and untainted as if it weretheir debut. Building on the back-to-basics blueprint of 2002's multi-platinumselling Songs From The West Coast, Peachtree Road is Elton devoid of studioembellishment. Three decades on, Elton astonishingly is still turning out some of the finestmusic of his career. His spirit is often taken for granted, his talentforgotten in his A-list public profile. But as he sings himself on 'Turn TheLights Out When You Leave': "I aint gonna die. I aint gonna cry. I will wear myheart out on my sleeve." Elton's musical life is marked by a startlingresilience, openness and refusal to let his talent simmer. A former student of the Royal Academy of Music in London, England, the man bornReginald Kenneth Dwight in 1947 left school and immediately began his path inthe music industry. His first band, Bluesology, was formed in 1961. He wouldlater take his stage name from the Bluesology saxophonist Elton Dean and theircharismatic frontman, Long John Baldry. Frustrated by his arduous touring duesbeing paid behind other performers, Elton was introduced to Bernie Taupin in1966 by Liberty Records. Amazingly, their first compositions were conducted bymail. In 1968 they became staff songwriters for Dick James' DJM label, farmingout music to budding pop stars. Elton and Bernie's prolific nature was established early in his career. By thetime Elton's self-titled breakthrough album and evergreen hit 'Your Song' hadintroduced him to an international stage in 1970, they had honed their skill tosuch a degree that Taupin could turn out a lyric in half an hour and Elton couldcompose to it within the hour. This reaped huge benefits, and in the periodbetween 1972-76, they turned out a stellar three albums a year, including thestill dearly beloved Madman Across The Water, Tumbleweed Connection, HonkyChateau, Captain Fantastic And The Brown Dirt Cowboy and Don't Shoot Me, I'mOnly The Piano Player. Amongst these, Goodbye Yellow Brick Road, with itsstring of American Number One hit singles and unbroken two month run at the topof the Billboard Top 100, became an all time classic. 1974 was a good year forElton. Not only did he sign a record breaking 8 million dollar deal with MCA,he co-wrote John Lennon's comeback single 'Whatever Gets You Through The Night',and was joined by his fellow legend on stage at Madison Square Gardens toperform it. Their mutual appreciation society ran until Lennon's cruel,untimely and premature death in 1981. The late 70s are often underwritten in Elton's historical cannon, but they werea time of new rebirth and artistic experimentation that is only now beginning tobe reappraised. Though his relationship with Taupin had come to a temporarystandstill, his ambitious double album Blue Moves has long been a favouriteamongst fans, A Single Man provided a fortuitous musical hook-up with GaryOsbourne, and his 1977 sessions with Philly Soul producer Thom Bell provided himwith a Number One UK hit last year in the form of 'Are You Ready For Love', whenit was re-released due to demand from influential British DJs. This is anongoing pattern. Elton has always been given credit from the unlikeliestquarters. Courtney Love and Michael Stipe have both told the artist that he wasthe soundtrack to their 1970s. The filmmaker Cameron Crowe has immortalised 'Tiny Dancer' in his fictional rock-umentary, Almost Famous. John and Taupin were reunited for 21 At 33 in 1980. The album swiftlyreacquainted Elton with the Top Ten and introduced yet another new beginning forthe artist. In retrospect the album Jump Up! with the smash single 'Blue Eyes'and Lennon tribute 'Empty Garden (Hey Hey Johnny)', was a dress rehearsal forhis return to peak form on Too Low For Zero, the home of two of Elton's livefavourites to this day, 'I Guess That's Why They Call It The Blues' and 'I'mStill Standing', his valedictory song to the troubles he had gone through. The80s were littered with platinum albums and Top 40 singles: 'Nikita', 'Sad Songs(Say So Much)' and the rousing 'I Don't Wanna Go On With You Like That'. In 1991 Elton established the Elton John AIDS Foundation, his pioneering charitydedicated to breakthrough work on behalf of those around the world sufferingfrom HIV and related illnesses. The next year he released the double platinumalbum The One. Perhaps it is coincidence, or perhaps the dawning of a new day,but the start of the last four decades have proved creatively and commerciallylucrative periods for Elton. The 90s saw him rise to new heights. He brokerecords again by signing a $39 million publishing deal in '92. His collaborationwith Tim Rice on music for Disney's The Lion King garnered not only a Best malepop Grammy but his first Academy Award. Oscar said hello to Elton. He hassince collaborated with Rice again on the Broadway smash Aida and his score forBilly Elliot: The Musical is expected to open in 2005. The musical bug isclearly catching. Elton and Bernie Taupin together have written the music forAnne Rice's Vampire Lestat, opening on Broadway next year. The late 90s were a time of intense personal tragedy for Elton, with the loss ofhis good friends, fashion design guru Gianni Versace and Diana, the Princess ofWales. The untimely death of the Princess would provide him with the biggestsingle hit of his career, a rewrite of his Marilyn Monroe tribute 'Candle In TheWind', which he would perform at the Princess' funeral. In the Canadian Top Tenfor three whole years, the single is now the biggest selling in the world, ever,surpassing Bing Crosby's 'White Christmas'. The new millennium has seen Elton invigorated and back at the top of his game.He has undertaken a three year residency with The Red Piano show at the Caesar'sPalace Colliseum in Las Vegas, art-directed by the brilliant conceptualist,David LaChapelle. Additionally, a four DVD box set entitled Dream Ticket is tobe released around the same time as the new studio album, which includes 3incredible concerts and a never-before-seen documentary highlighting fourdecades in Elton's illustrious career. Peachtree Road is the icing on the cakeof an already stellar decade. As ever, the best words on Elton John come fromBernie Taupin: "Fortune and fame are so fleeting these days / I'm glad to saythat I'm still around" sings Elton on the already classic 'The Weight Of theWorld'. And how. The Sanctuary Group plc The Sanctuary Group is one of the world's leading independent music companiesand one of the world's leading developers of music, audio-visual andentertainment intellectual property rights ("IPR"). The Group has offices inthe UK, USA and Germany and has worldwide distribution for recorded music andaudio-visual product. In Recorded Product, the company maximises the value of the Sanctuary ownedmusic and audio-visual catalogues on a worldwide basis, records establishedacts, and, on a low risk approach, new artists. It owns the world's largestindependent catalogue of music and has worldwide distribution for its recordedmusic and audio-visual output, in both physical and digital formats, as well asproviding niche websites to help market music products. The company signs new and established artists such as Kiss, Morrissey, AlisonMoyet, Ocean Colour Scene, Allman Brothers Band, Dolly Parton, Widespread Panicand The Charlatans for new albums, as well as releasing product from its largecatalogue. Joint venture label deals with Rough Trade and Fantastic Plastic haveseen success with The Strokes, The Libertines, Babyshambles, Belle & Sebastianand The Beat Ups. In addition, Sanctuary Visual Entertainment has startedreleasing an increasing number of quality music DVDs from artists as wideranging as T-Rex, Neil Young, Morrissey, Kiss, The Who, Black Sabbath and PhilCollins. Sanctuary Urban Records signs new and established artists including Earth Wind &Fire, De La Soul and Jon B within the urban genre for recorded music andaudio-visual output. Sanctuary Artist Management is the largest global artist management operationwith an impressive roster of established acts including Morrissey, Beyonce, GunsN' Roses, Robert Plant, Nelly, Fleetwood Mac, Destiny's Child, Iron Maiden,Kelis, Slipknot, Manic Street Preachers, D- 12, The Who, Xzibit, Jane'sAddiction, Eve, Groove Armada, Slayer and Russell Watson as well as emergingtalent such as Mario, Scott Stapp, Mastadon and Funeral For A Friend.. Inaddition, it has the largest live touring agency operation outside NorthAmerica, representing some 300 artists including Beyonce, Franz Ferdinand, KingsOf Leon, Craig David, The Darkness, Marilyn Manson, Anastacia, David Gray andMoby. Sanctuary Merchandising/ Bravado, a visual rights licensing and merchandisingcompany, has a client base ranging from Sir Elton John, Christina Aguilera andHilary Duff to Simon & Garfunkel, Bon Jovi and Robbie Williams. This announcement has been issued by The Sanctuary Group Plc ("Sanctuary") andis the sole responsibility of Sanctuary. Credit Suisse First Boston (Europe)Limited ("CSFB") which is regulated in the United Kingdom by the FinancialServices Authority, is acting exclusively for Sanctuary and no-one else inrelation to the Placing and will not be responsible to any person other thanSanctuary for providing the protections afforded to clients of CSFB or forproviding advice in relation to the Placing or in relation to the contents ofthis announcement or any other transaction, arrangement or matter referred totherein. Certain statements made in this announcement are forward-looking statements.Such statements are based on current expectations and are subject to a number ofrisks and uncertainties that could cause actual results and performance todiffer materially from any expected further results or performances, express orimplied, by the forward-looking statements. Factors that might causeforward-looking statements to differ materially from actual results include,among other things, political, regulatory and economic factors. Sanctuaryassumes no responsibility to update any of the forward-looking statementscontained in this announcement. Past performance is no guide to futureperformance and persons needing advice should consult an independent financialadviser. Members of the general public are not eligible to take part in the Placing.This announcement, in so far as it constitutes an invitation or inducement toparticipate in the Placing, is directed only at persons who have professionalexperience in matters relating to investments who fall within article 19(1) ofthe Financial Services and Markets Act 2000 (Financial Promotions) Order 2001(as amended) (the "Order") or are persons falling within article 49(2) (a) to(d) of the Order or to whom it may otherwise lawfully be communicated (all suchpersons together being referred to as "Relevant Persons"). This announcement,in so far as it constitutes an invitation or inducement to participate in thePlacing, must not be acted on or relied on by persons who are not RelevantPersons. Any investment or inducement activity in so far as relating toparticipation in the Placing is available only to Relevant Persons and will beengaged in only with Relevant Persons. This announcement is not for distribution directly or indirectly in or into theUnited States, Australia, Canada or Japan. This announcement does not constitutean offer to sell or issue or the solicitation of an offer to buy or acquireordinary shares in the capital of Sanctuary in the United States, Australia,Canada or Japan or any jurisdiction in which such an offer or solicitation isunlawful. The ordinary shares in Sanctuary referred to in this announcement havenot been and will not be registered under the United States Securities Act of1933 and may not be offered or sold in the United States. No public offering ofsecurities will be made in the United Kingdom, the United States or elsewhere. EMBARGO: NOT FOR RELEASE BEFORE (07.00) HOURS (UK TIME) ON FRIDAY, 1st APRIL 2005. NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN PART 2 SANCTUARY ADDS GLOBAL SUPERSTAR SIR ELTON JOHN TO MANAGEMENT ROSTER ONACQUISITION OF MANAGEMENT COMPANY, TWENTY-FIRST ARTISTS PART 2: IMPORTANT INFORMATION FOR PLACEES ONLY IN THE PLACING MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS PART 2AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE DIRECTED ONLY AT PERSONS WHOSEORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING OR DISPOSING OFINVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHOHAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS WHO FALL WITHINARTICLE 19(1) ("INVESTMENT PROFESSIONALS") OF THE FINANCIAL SERVICES AND MARKETSACT 2000 (FINANCIAL PROMOTION) ORDER 2001 (AS AMENDED) (THE "ORDER") OR AREPERSONS FALLING WITHIN ARTICLE 49(2)(a) TO (d) ("HIGH NET WORTH COMPANIES,UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER OR TO WHOM IT MAY OTHERWISELAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS PART 2 AND THE TERMS AND CONDITIONS SET OUT HEREINMUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANYINVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS PART 2 AND THE TERMS ANDCONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILLBE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS PART 2 DOES NOT CONSTITUTE ANOFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN SANCTUARY IN ANYJURISDICTION. THE CONSIDERATION SHARES REFERRED TO HEREIN HAVE NOT BEEN AND WILLNOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE "SECURITIES ACT")AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES. If you choose to participate in the Placing by making an oral offer to acquireConsideration Shares you will be deemed to have read and understood this Part 2in its entirety and to be making such offer on its terms and conditions, and tobe providing the representations, warranties, agreements, acknowledgements andundertakings, contained herein. In particular, you represent, warrant andacknowledge that: (i) you are a person whose ordinary activities involve you inacquiring, holding, managing or disposing of investments (as principal or agent)for the purposes of your business and have professional experience in mattersrelating to investments and undertake that you will acquire, hold, manage ordispose of any Consideration Shares that is allocated to you for the purposes ofyour business; and (ii) you are purchasing the Consideration Shares for your ownaccount or you are purchasing the Consideration Shares for an account withrespect to which you exercise sole investment discretion and that you (and anysuch account) are outside the United States. The distribution of this announcement and the placing and/or issue of theConsideration Shares in certain jurisdictions may be restricted by law. Noaction has been taken by Sanctuary or Credit Suisse First Boston (Europe)Limited ("CSFB" or the "Manager") that would permit an offer of theConsideration Shares or possession or distribution of this announcement or anyother offering or publicity material relating to the Consideration Shares in anyjurisdiction where action for that purpose is required. Persons into whosepossession this announcement comes are required by Sanctuary and CSFB to informthemselves about and to observe any such restrictions. For the avoidance of doubt, capitalised terms used in this Part 2 but nototherwise defined herein shall have the meanings given in Part 1 of thisannouncement. 1 Details of the Placing Agreement and the Consideration Shares The Manager has entered into a placing agreement (the "Placing Agreement") withSanctuary under which, subject to the satisfaction of certain conditions set outin the agreement and the agreement not having been terminated, the Manager hasundertaken as agent for Sanctuary, to procure persons to acquire a proportion ofthe Consideration Shares ("Placees"), failing which to itself acquire suchproportion of the Consideration Shares. When issued, the Consideration Shares will be fully paid and free from any lienclaim, charge or equity or other third party right and will rank pari passu inall respects with the existing shares of 12.5p nominal value in the sharecapital of Sanctuary (the "Existing Shares"), including the right to receive alldividends and other distributions declared, made or paid after the date of issueof the Consideration Shares. In this Part 2, unless the context otherwise requires, Placee means a person(including individuals, funds or others) on whose behalf a commitment tosubscribe for Consideration Shares has been given. 2 Placing Commencing today, the Managers will arrange participation in the Placing by thePlacees. This Part 2 gives details of the terms and conditions of, and themechanics of participation in, the Placing. The Manager is procuring Placees asan agent of Sanctuary. 3 Principal terms of the Placing 3.1 Participation will only be available to persons whoseparticipation is accepted by the Manager. 3.2 No commissions will be payable to Placees in respect of anyConsideration Shares. 3.3 The price at which the Placing will be effected will be **penceper Consideration Share (the "Placing Price"). 3.4 To participate in the Placing you should contact your usualsales contact at Credit Suisse First Boston. 3.5 The Placing is to be made outside the United States within themeaning of and pursuant to Regulation S under the Securities Act. 4 Applications for admission to listing and trading Applications have been made to the UKLA for admission of the ConsiderationShares to the Official List maintained by the UKLA and to the London StockExchange plc (the "London Stock Exchange") for admission to trading of theConsideration Shares on the London Stock Exchange's market for listed securities("Admission"). It is expected that Admission will become effective and dealingsin the Consideration Shares on the London Stock Exchange will commence on 6thApril 2005. No application for listing of Consideration Shares has been madeanywhere else. 5 Conditions of the Placing The Placing is conditional upon the Placing Agreement becoming unconditional andnot having been terminated in accordance with its terms. The Manager's obligations to Sanctuary in respect of the Placing are conditionalon, inter alia: 5.1 Sanctuary having delivered to the Manager a certificateconfirming, inter alia, that, having made due and careful enquiries, none of thewarranties or undertakings given by Sanctuary in the Placing Agreement has beenbreached; 5.2 the share purchase agreement relating to the acquisition ofTwenty-First not having been terminated or having lapsed prior to Admission; 5.3 Sanctuary not being in breach of any of its obligations underthe Placing Agreement which in the Manager's opinion is material in the contextof the Placing; 5.4 Admission having occurred on or before 6th April 2005 (or suchlater time and/or date as Sanctuary and Managers may agree); and 5.5 Sanctuary allotting, subject only to Admission, theConsideration Shares in accordance with the Placing Agreement. The Manager may, at its discretion and upon such terms as it thinks fit, waivecompliance by Sanctuary with the whole or any part of any of Sanctuary'sobligations in relation to the conditions in the Placing Agreement. The Managerreserves the right with the agreement of Sanctuary to waive or to extend thetime and/or date for fulfilment of any of the conditions in the PlacingAgreement. Any such extension or waiver will not affect Placees' commitments as set out inthis announcement. Neither the Manager nor Sanctuary shall have any liabilityto any Placee (or any other person whether acting on behalf of a Placee orotherwise) in respect of any decision they may make as to whether or not towaive or to extend the time and/or date for the satisfaction of any condition inthe Placing Agreement nor for any decision they may make as to the satisfactionof any condition. 6 Right to terminate under the Placing Agreement The Manager may, by notice to Sanctuary, terminate the Placing Agreement at anytime before Admission becoming effective in certain circumstances more fullydescribed in the Placing Agreement. These include: 6.1 if any statement contained, inter alia, in this announcement hasbecome or been discovered to become untrue, incorrect or misleading in anymaterial respect; 6.2 if any breach of any of the warranties or undertakings given bySanctuary in the Placing Agreement or of any obligation of Sanctuary under thePlacing Agreement occurs which, in the opinion of the Manager (acting reasonablyand after prior consultation with Sanctuary), is material in the context of thePlacing 6.3 if the conditions in the Placing Agreement are not fulfilled orwaived by the date specified in them (or such later time and/or date asSanctuary and the Manager may agree); and 6.4 if certain "force majeure" events specified in the PlacingAgreement occur which would, in the sole judgement of the Manager, make itimpractical or inadvisable to market the Consideration Shares or to enforcecontracts for the sale of the Consideration Shares. Placees' rights and obligations hereunder will not be capable of termination orrescission, except if the Manager's obligations under the Placing Agreement areterminated or if their obligations under the Placing Agreement do not becomeunconditional in accordance with its terms by the times and/or dates specified(or such later times and/or dates as the Manager and Sanctuary may, subject asspecified above, agree), in which case Placees' rights and obligations inrespect of the Placing as described in this announcement shall cease and theyshall not be entitled to claim in respect of such termination 7 No Prospectus No prospectus or listing particulars has been or will be submitted to beapproved by the UKLA or filed with the Registrar of Companies in England andWales in relation to the Consideration Shares and the Placees' commitments willbe made solely on the basis of the information contained in this announcement(including this Part 2). Each Placee, by accepting a participation in thePlacing, agrees that the content of this announcement (including this Part 2),is exclusively the responsibility of Sanctuary and confirms that it has neitherreceived nor relied on any other information, representation, warranty orstatement made by or on behalf of either of the Manager or Sanctuary and neitherthe Manager nor Sanctuary will be liable for any Placee's decision to acceptthis invitation to participate in the Placing based on any other information,representation, warranty or statement. Each Placee acknowledges and agrees thatit has relied on its own investigation of the business, financial or otherposition of Sanctuary in accepting a participation in the Placing. Nothing inthis paragraph shall exclude the liability of any person for fraudulentmisrepresentation. 8 Registration and Settlement Settlement of transactions in the Consideration Shares following Admission willtake place within the CREST system, subject to certain exceptions. The Managerreserves the right to require settlement for, and to deliver the ConsiderationShares to you, by such other means as it deems necessary if delivery orsettlement is not practicable within the CREST system or would not be consistentwith regulatory requirements in the Placee's jurisdiction. If you are allocated any Consideration Shares, you will be sent a (placingletter (the "Placing Letter")) which will state the amount of ConsiderationShares acquired by you, the Placing Price and the aggregate amount owed by you.In accepting the allocation of Consideration Shares set out in the (PlacingLetter), you agree that you will do all things necessary to ensure that deliveryand payment is completed in accordance with either the standing CREST orcertificated settlement instructions which you have in place with the Manager. Settlement will be on a T+3 basis unless otherwise notified. Interest ischargeable daily on payments not received from Placees on the due date inaccordance with the arrangements set out above, in respect of either CREST orcertificated deliveries, at the rate of five percentage points above prevailingLIBOR. If you do not comply with these obligations, the Manager may sell yourConsideration Shares on your behalf and retain from the proceeds, for its ownaccount and benefit, an amount equal to the Placing Price plus any interest due. You will, however, remain liable for any shortfall below the Placing Price andyou may be required to bear any stamp duty or stamp duty reserve tax (togetherwith any interest or penalties) which may arise upon the sale of yourConsideration Shares on your behalf. Insofar as Consideration Shares are registered in your name or that of yournominee or in the name of any person for whom you are contracting as agent orthat of a nominee for such person, such Consideration Shares should, subject asprovided below, be so registered free from any liability to UK stamp duty orstamp duty reserve tax. 9 Lock-Up Arrangements Sanctuary has agreed with the Manager in the Placing Agreement that it will not(without the prior written consent of the Manager), for a period of (90) daysfrom the date of issue of the Consideration Shares, effect certain issues of newshares. 10 Representations, warranties and undertakings By participating in the Placing, you (unless otherwise agreed in writing withthe Manager): 10.1 represent and warrant that you have read this announcement in itsentirety and understand and acknowledge that no disclosure or offering documenthas been prepared in connection with the Consideration Shares; 10.2 represent and warrant that the issue to you, or any personspecified by you for registration as holder, of Consideration Shares will notgive rise to a liability to stamp duty or stamp duty reserve tax payable underany of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receiptsand clearance services); 10.3 undertake that you and any person acting on your behalf will payfor the Consideration Shares acquired by you in accordance with thisannouncement on the due times and dates set out in this announcement, failingwhich the relevant Consideration Shares may be placed with other persons at suchprice as the Manager may determine and without liability to you; 10.4 undertake that the person who you or any person acting on yourbehalf specifies for registration as holder of the Consideration Shares will bethe Placee or a nominee of the Placee, as the case may be. Neither the Managernor Sanctuary will be responsible for any liability to stamp duty or stamp dutyreserve tax resulting from a failure to observe this requirement and you agreeto indemnify the Manager and Sanctuary in respect of the same. You and anyperson acting on your behalf shall be deemed to agree to acquire theConsideration Shares on the basis that they will be allotted to a CREST stockaccount of the Manager who will hold them as nominee on behalf of the Placeeuntil settlement in accordance with its standing settlement instructions; 10.5 represent and warrant that you and any person acting on your behalffalls within paragraph 3(a) of Schedule 11 to the Financial Services and MarketsAct 2000 (as amended, the "FSMA") (being a person whose ordinary activitiesinvolve it in acquiring, holding, managing or disposing of investments (asprincipal or agent) for the purpose of its business), and within article 19 and/or article 49 of the Financial Services and Markets Act 2000 (FinancialPromotions) Order 2001, as amended (which exempts certain communications toinvestment professionals); 10.6 undertake that you will acquire, hold, manage and (if applicable)dispose of any Consideration Shares that is allocated to you for the purposes ofyour business; 10.7 represent and warrant that you have not offered or sold and, priorto the expiry of a period of six months from the commencement of trading of theConsideration Shares on the London Stock Exchange's market for listedsecurities, will not offer or sell any Consideration Shares to persons in theUnited Kingdom, except to persons whose ordinary activities involve them inacquiring, holding, managing or disposing of investments (as principal or agent)for the purposes of their business or otherwise in circumstances which have notresulted in and which will not result in an offer to the public in the UnitedKingdom within the meaning of the Public Offer of Securities Regulations 1995,as amended, or the FSMA; 10.8 represent and warrant that you have only communicated or caused tobe communicated and undertake that you will only communicate or cause to becommunicated any invitation or inducement to engage in investment activity(within the meaning of section 21 of the FSMA) relating to Consideration Sharesin circumstances in which section 21(1) of the FSMA does not require approval ofthe communication by an authorised person; 10.9 represent and warrant that you have complied and undertake that youwill comply with all applicable provisions of the FSMA with respect to anythingdone by you in relation to the Consideration Shares in, from or otherwiseinvolving the United Kingdom; 10.10 confirm that you are an institution which (i) has such knowledge andexperience in financial and business matters that you are capable of evaluatingthe merits and risks of your investment in the Consideration Shares and (ii) youand any accounts for which you are acting (and for whom you are deemed to havegiven the representations warranties and undertakings in this Section 10) areeach able to bear the economic risk of such investment, and are able to sustaina complete loss of your investment in the Consideration Shares; 10.11 represent and warrant that you have all necessary capacity and haveobtained all necessary consents and authorities to enable you to commit to thisparticipation and to perform your obligations in relation thereto (including,without limitation, in the case of any person on whose behalf you are acting,all necessary consents and authorities to agree to the terms set out or referredto in this announcement); 10.12 acknowledge (and any person acting on your behalf shall be deemed toacknowledge) that participation in the Placing is on the basis that you are notand will not be customers of the Manager and that the Manager has duties(whether fiduciary or otherwise) or responsibilities to you for providing theprotections afforded to its customers nor for providing advice in relation tothe Placing nor in respect of any representations, warranties, undertakings orindemnities in the Placing Agreement nor for the exercise or performance of anyof its rights and obligations thereunder, including any right to waive or varyconditions or exercise any termination right; 10.13 acknowledge (and any person acting on your behalf shall be deemed toacknowledge) that the Manager may (at its absolute discretion) satisfy itsobligations to procure Placees by itself agreeing to become the Placee inrespect of some or all of the Consideration Shares or by nominating anyconnected or associated person to do so; 10.14 acknowledge that the Consideration Shares are being offered and soldto you in a transaction not involving any public offering in the United Stateswithin the meaning of the Securities Act and the offer and sale to you of theConsideration Shares have not been and will not be registered under theSecurities Act and are being offered and sold on behalf of Sanctuary onlyoutside the United States within the meaning of, and pursuant to Regulation Sunder the Securities Act; 10.15 acknowledge that the Consideration Shares have not been approved ordisapproved by the U.S. Securities and Exchange Commission, any state securitiescommission in the U.S. or any other U.S. regulatory authority; 10.16 represent and warrant that, at the time the Consideration Shares areacquired, you will be the beneficial owner of such Consideration Shares and youare not a resident of the United States, Canada, Australia or Japan; 10.17 acknowledge (and any person acting on your behalf shall be deemed toacknowledge) that the Consideration Shares have not been and will not beregistered under the securities legislation of Canada, Australia or Japan and,subject to certain exceptions, may not be offered, sold, taken up, renounced ordelivered or transferred, directly or indirectly, within Canada, Australia orJapan; 10.18 represent and warrant that you and any person acting on your behalfare entitled to acquire Consideration Shares under the laws of all relevantjurisdictions and you and any person acting on your behalf shall be deemed tohave fully observed such laws and have all necessary capacity and have obtainedall necessary consents and authorities to enable you to commit to thisparticipation and to perform your or its obligations in relation thereto(including, without limitation, in the case of a person acting on your behalf,all necessary consents and authorities to agree to the terms set out or referredto in this Part 2), under those laws or otherwise; 10.19 represent and warrant that you and any person acting on your behalf(i) are aware of your obligations in connection with money laundering under theCriminal Justice Act 1993, (ii) have verified the identity of your clients inaccordance with the Money Laundering Regulations (2003) (the "Regulations") and(iii) have complied fully with your obligations under the Regulations; 10.20 acknowledge that the contents of this announcement (which includesPart 1 and Part 2) are exclusively the responsibility of Sanctuary andrepresent, warrant and agree that the only information upon which you areentitled to rely and on which you have relied in committing yourself to acquireConsideration Shares is that contained in this announcement (which includes Part1 and Part 2), such information being all that you deem necessary to make aninvestment decision in respect of the Consideration Shares; 10.21 agree and acknowledge that neither the Manager nor any person actingon their behalf has or shall have any liability for any information orrepresentation relating to Sanctuary (including, without limitation, theinformation referred to in paragraph 10.19 above); 10.22 agree that Sanctuary, the Manager and others will rely upon the truthand accuracy of the foregoing representations, warranties, acknowledgements andundertakings which are given to the Manager for itself and on behalf ofSanctuary and are irrevocable; and 10.23 agree that this Part 2 and all documents into which this Part 2 isincorporated by reference or otherwise validly forms a part will be governed byand construed in accordance with English law. All agreements to acquireConsideration Shares pursuant to the (Bookbuilding and/or) the Placing will begoverned by English law and the English courts shall have "non-exclusive"jurisdiction in relation thereto, except that enforcement proceedings in respectof the obligation to pay the Placing Price (together with any interestchargeable thereon) may be taken by Sanctuary in any jurisdiction in which therelevant Placee is incorporated or in which any of its securities have aquotation on a recognised stock exchange. When a Placee or person acting on behalf of the Placee is dealing with theManager, any money held in an account with either Manager on behalf of thePlacee and/or any person acting on behalf of the Placee will not be treated asclient money (within the meaning of the rules and regulations of the FinancialServices Authority made under the FSMA) which, therefore, will not require theManager to segregate such money, as that money will be held by them under abanking relationship and not as trustee. Past performance is no guide to future performance and persons needing adviceshould consult an independent financial adviser. All times and dates in this announcement may be subject to amendment. TheManager shall notify the Placees and any person acting on behalf of the Placeesof any changes. (ends) This information is provided by RNS The company news service from the London Stock Exchange