8 May 2007 07:03
SSP Holdings PLC08 May 2007 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE IT WOULD BE UNLAWFUL TO DO SO 8 May 2007 RECOMMENDED CASH AND SHARE OFFER FOR SIRIUS FINANCIAL SOLUTIONS PLC ("SIRIUS") BY SSP HOLDINGS PLC ("SSP") (TO BE EFFECTED BY MEANS OF A SCHEME OF ARRANGEMENT) Highlights • The Boards of SSP and Sirius are pleased to announce that they have agreed the terms of recommended Proposals for the cash and share acquisition by SSP of the entire issued and to be issued ordinary share capital of Sirius. It is intended that the Proposals be effected by way of a Court sanctioned scheme of arrangement under section 425 of the Companies Act. • Under the terms of the Proposals, Sirius Shareholders on the register of members at the Scheme Record Time will be entitled to receive: For each Sirius Share 178.0 pence in cash AND 0.4 New SSP Shares • Based on the SSP Closing Price on 4 May 2007, the recommended cash and share Proposals: - value each Sirius Share at 235.0 pence - value Sirius' issued and to be issued ordinary share capital at approximately £43.4 million; - represent a premium of approximately 28.8 per cent. to the Closing Price of a Sirius Share of 182.5 pence on 4 May 2007, the last Business Day prior to the date of this announcement; and - represent a premium of approximately 40.6 per cent. to the average Closing Price of a Sirius Share of 167.1 pence for the three months prior to 4 May 2007, the last Business Day prior to the date of this announcement. • SSP has received irrevocable undertakings to vote in favour of the Scheme in respect of a total of 13,131,631 Sirius Shares, representing in aggregate approximately 74.6 per cent. of the existing issued ordinary share capital of Sirius. In addition, SSP has received a letter of intent to vote in favour of the Scheme in respect of a total of 1,541,396 Sirius Shares, representing approximately 8.8 per cent. of the existing issued ordinary share capital of Sirius. In aggregate, SSP has received irrevocable undertakings and a letter of intent to vote in favour of the Scheme in respect of 14,673,027 Sirius Shares, representing in aggregate approximately 83.4 per cent. of the existing issued ordinary share capital of Sirius. • The SSP Board believes that combining SSP and Sirius has compelling strategic and financial logic for both companies. The combination will create a UK market leading insurance software provider and a platform to expand the Enlarged Group internationally. In addition the Enlarged Group will have strong product offerings on several leading technologies and will be able to deliver synergies and other strategic benefits. • The cash consideration payable pursuant to the Proposals will be provided by SSP from a new bank facility provided by Barclays Bank PLC as well as the issue of the Placing Shares. • Pursuant to the Placing Agreement, KBC Peel Hunt has conditionally placed 3,583,140 Placing Shares on behalf of SSP at the Placing Price. The Placing has been fully underwritten by KBC Peel Hunt. • The Enlarged Group will combine the best brand values and customer and staff oriented cultures of both businesses. The strong customer service and relationship management style of SSP combined with the sales focus and innovative product focus of Sirius should benefit all customers of the Enlarged Group. • In light of the Proposals, the Sirius Board no longer intends to recommend and pay on 22 June 2007 the final dividend of 1.375 pence per Sirius Share previously announced in respect of the year ended 31 December 2006. • It is expected that the Scheme Document will be posted by 22 May 2007 and that the Scheme will become effective on 9 July 2007, subject to satisfaction of all conditions, including the conditions set out in Appendix 1 of this announcement. • Following the Scheme becoming Effective SSP intends to put in place a new board structure. David Rasche will continue as Executive Chairman with Stephen Verrall (Sirius' Chairman and Group Chief Executive) becoming Deputy Chairman of the Enlarged Group. Laurence Walker, SSP's Managing Director, will become Group Chief Executive, and Gren Folwell will continue as Senior Independent Director. Other Sirius executive directors except for Richard Bowser (Sirius' Finance Director, who will resign his directorship and employment on the Scheme becoming Effective) are expected to continue in a senior management capacity with the Enlarged Group. Commenting on the Proposals, David Rasche, Executive Chairman of SSP, said: "This is a tremendous opportunity to create a market leading international aswell as UK business. As world insurance markets become more competitive, thereis a shift towards an internet and electronic trading model. Our combined presenceand knowledge of this market will provide significant expansion opportunities. The combination of the businesses will also strengthen our 'consumer to carrier'proposition in the UK through additional products and market segments. This transaction should help improve efficiencies for insurance distribution and bring additional capabilities for our enlarged customer base, particularly in electronic trading and web enablement. I am very pleased that Steve has agreed to join the board as he has greatknowledge of worldwide markets and has been an innovator in the insurancesoftware sector. His advice during the integration process and input to groupstrategy will be invaluable." Commenting on the Proposals, Stephen Verrall, Chairman and Group Chief Executiveof Sirius, said: "I am delighted that we have reached agreement on combining Sirius with SSP tocreate an exciting and new Enlarged Group which is strongly placed to addressthe many opportunities in the international insurance software marketplace. The Proposals offer Sirius Shareholders the opportunity both to realise a cashpremium to the three month average Sirius Share Price and to participate to asignificant degree in the prospects of the Enlarged Group. For our managementand employees, there will be exciting new opportunities and possibilities withina much larger combined organisation. On a personal level, it gives me greatsatisfaction to see the company I started 23 years ago form a major part of anew combined business that will be a significant global player in our market. Iam very committed to see that these opportunities are fully exploited and toensure that all we have achieved with Sirius makes a significant contribution tothe future of the combined business." Background to and reasons for the Proposals The SSP Board believes that combining SSP and Sirius has compelling strategicand financial logic for both companies and that the Proposals represent anattractive opportunity to enhance value for both the existing SSP Shareholdersand, through the share element of the consideration for their Sirius Shares,Sirius Shareholders. The combination will create an Enlarged Group which isstrong across several key sectors of the global insurance software market. The principal benefits of the Proposals are: • UK market leading insurance software provider In the UK, the combination will create a strong presence in the areas of general insurance relating to regional brokers, call centres, small intermediaries, major brokers, underwriting agencies and insurance companies, as well as establish a strong presence in the systems sector relating to large financial advisers. Combining the UK businesses of SSP and Sirius is expected to help develop and maintain strong relationships with brokers and insurance companies as they continue to rationalise the distribution of insurance. Consolidation in the general insurance market is creating demand for solutions providers that service large national and regional brokers with call centre operations and e-trading requirements. These large businesses often prefer to work with organisations with a global presence, that are financially strong and have a wide range of solutions. The Enlarged Group will be able to further develop SSP's 'consumer to carrier' proposition in the UK through a broader presence and the combination should ultimately reduce distribution costs. • Platform to expand the Enlarged Group internationally Outside the UK, SSP has offices in Ireland, Denmark and South Africa whilst Sirius' offices are in Australia, New Zealand, Kenya, India and the United States. With these complementary networks of offices, the Enlarged Group will have customers in over 50 countries. The Proposals will bring additional potential for growth in Australasia, South Africa and other parts of Africa, the United States, the Caribbean and India, as well as in Europe and will enable the Enlarged Group to become a major player across several regions and one of the largest specialist suppliers of general insurance software in the world. The Enlarged Group will be well placed to compete globally with other major IT organisations. • Strong product offerings on several leading technologies The Enlarged Group will have products for many parts of the insurance market. The existing products of both companies, including Sirius products Sirius 21, Sirius for Insurance and Swift and SSP products SSP electraM3, SSP sector, SSP insight and SSP insureJ, will continue to be developed and the Enlarged Group intends to continue all current products in line with existing commitments. The SSP Directors believe that the wide range of products offered by the Enlarged Group will be a positive benefit to its customers' current and future requirements. The Enlarged Group will offer customers products based upon a range of leading technologies, including Microsoft, Oracle and IBM focussed Java systems, as well as supporting many customers on successfully proven older technologies. Its distribution capability, including SSP's affinity club, will provide further opportunity to reduce costs and offer additional products and services to its customers. • Synergies and strategic benefits Following the integration of the two businesses, the SSP Board expects to be able to make reasonable reductions to the Enlarged Group's cost base. Synergies are expected to be derived from: - reduced executive management costs; - the utilisation of common technologies; and - savings in head office and other duplicate costs, including professional fees and regulatory costs. In addition to the synergies referred to above, there are expected to be furtherstrategic benefits available to the Enlarged Group from: - the use of Sirius' successful development capability in India enabling it to bring new technology offerings to market across a range of systems by combining these skills with its UK and territorial expertise; - the wider distribution of a greater variety of personal lines products; - the combined expertise in internet and electronic trading of personal and small commercial insurance; - the cross-selling of SSP Group and Sirius Group products and services to each business' respective customers; - the significant expansion potential in Europe, Africa, Australasia, the Caribbean and the US through greater scale and territorial presence with a much wider product range; and - the extension of SSP's affinity club to include customers of Sirius. • Enhancement in earnings per share The Proposals are expected to enhance earnings per share (before exceptional costs) for SSP for the year ending 31 March 2008 with further significant enhancements expected in the year ending 31 March 2009 as the synergies and other strategic benefits of the business combination increasingly take effect.1 Note:1 This statement should not be taken to imply that the earnings per share of SSPfor the years ending 31 March 2008 or 31 March 2009 will be higher than for theyear ended 31 March 2007 or that the earnings per share of SSP for the yearending 31 March 2009 will be higher than for the year ending 31 March 2008. Irrevocable Undertakings and Letters of Intent • SSP has received irrevocable undertakings and letters of intent to vote in favour of the Scheme in respect of a total of 14,673,027 Sirius Shares, representing in aggregate approximately 83.4 per cent. of the existing issued ordinary share capital of Sirius. Further details are given immediately below and in the main body of the announcement. • The Sirius Directors have undertaken to vote in favour of the Scheme in respect of a total of 7,073,612 Sirius Shares, representing in aggregate approximately 40.2 per cent. of the existing issued ordinary share capital of Sirius. These irrevocable undertakings continue to be binding in the event of a higher offer being made for Sirius. • SSP has received irrevocable undertakings to vote in favour of the Scheme from the following institutional shareholders: AXA Framlington Investment Management Limited, Gartmore Investment Limited and Liontrust Investment Services Limited, and from Richard Glaves, a member of the Sirius management team, in respect of their aggregate holdings of 6,058,019 Sirius Shares, representing in aggregate approximately 34.4 per cent. of the existing issued ordinary share capital of Sirius. • In addition, SSP has received a non-binding letter of intent to vote in favour of the Scheme from Insight Investment Management (Global) Limited in respect of 1,541,396 Sirius Shares, representing approximately 8.8 per cent. of the existing issued ordinary share capital of Sirius. Enquiries: SSP Holdings PLC Sirius Financial Solutions PLCTel: +44 (0) 1422 330 022 Tel: +44 (0) 121 779 8400 David Rasche (Executive Chairman) Stephen Verrall (Chairman and Group Chief Executive)Nick Bate (Finance Director) Richard Bowser (Finance Director) Deloitte Corporate Finance Close Brothers(financial adviser to SSP) (financial adviser to Sirius)Tel: +44 (0) 113 243 9021 Tel: +44 (0) 20 7655 3100 Roger Esler Simon WillisSimon Houldsworth James Craven KBC Peel Hunt Brewin Dolphin Securities Limited(nominated adviser and broker to SSP) (nominated adviser and broker to Sirius)Tel: +44 (0) 20 7418 8900 Tel: +44 (0) 121 236 7000 Oliver Scott Ifor WilliamsNicholas Marren Weber Shandwick Financial College Hill(PR adviser to SSP) (PR adviser to Sirius)Tel: +44 (0) 20 7067 0700 Tel: +44 (0) 20 7457 2020 Nick Oborne Adrian DuffieldJohn Moriarty Ben WayCharlie Hooper This summary should be read in conjunction with the full text of the followingannouncement and the Appendices. The conditions to and certain further terms ofthe Proposals are set out in Appendix 1. The bases and sources of certainfinancial information contained in this announcement are set out in Appendix 2.Certain definitions and terms used in this announcement are set out in Appendix3. The Sirius Directors accept responsibility for the information contained in thisannouncement other than the information for which the SSP Directors acceptresponsibility. To the best of the knowledge and belief of the Sirius Directors(who have taken all reasonable care to ensure that such is the case), theinformation contained in this announcement for which they accept responsibilityis in accordance with the facts and does not omit anything likely to affect theimport of such information. The SSP Directors accept responsibility for the information contained in thisannouncement relating to the SSP Group, the opinions of SSP, the SSP Directorsand members of their immediate families, related trusts and persons connectedwith them. To the best of the knowledge and belief of the SSP Directors (whohave taken all reasonable care to ensure that such is the case), the informationcontained in this announcement for which they accept responsibility is inaccordance with the facts and does not omit anything likely to affect the importof such information. Deloitte Corporate Finance is acting for SSP and for no one else in connectionwith the Proposals and will not regard any other person as its client nor beresponsible to anyone other than SSP for providing the protections afforded tothe clients of Deloitte Corporate Finance nor for providing advice in relationto the Proposals or any matter referred to herein. Deloitte Corporate Finance isa division of Deloitte & Touche LLP, which is authorised and regulated by theFinancial Services Authority in respect of regulated activities. KBC Peel Hunt is acting as nominated adviser and broker to SSP in respect of theProposals, and no one else in connection with the Proposals and will not beresponsible to anyone other than SSP for providing the protections afforded tothe clients of KBC Peel Hunt nor for providing advice in relation to theProposals or any other matter referred to herein. Close Brothers, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting exclusively for Sirius and no one elsein connection with the Proposals and will not be responsible to anyone otherthan Sirius for providing the protections afforded to the clients of CloseBrothers nor for providing advice in relation to the Proposals or any othermatter referred to herein. Overseas Jurisdictions The release, publication or distribution of this announcement in jurisdictionsother than the United Kingdom may be restricted by law and therefore any personswho are subject to the laws of any jurisdiction other than the United Kingdomshould inform themselves about, and observe, any applicable requirements. Thisannouncement has been prepared for the purposes of complying with English lawand the City Code and the information disclosed may not be the same as thatwhich would have been disclosed if this announcement had been prepared inaccordance with the laws and regulations of any jurisdiction outside of England. This announcement does not constitute an offer to sell or an invitation topurchase or subscribe for any securities or a solicitation of any vote orapproval in any jurisdiction whether relating to the Proposals or otherwise.This announcement does not constitute a prospectus or a prospectus equivalentdocument. The Proposals will be made solely through the Scheme Document whichwill contain the full details, terms and conditions of the Proposals, includingdetails of how to vote in respect of the Proposals. Sirius Shareholders areadvised to read carefully the formal documentation in relation to the Proposalsonce it has been despatched. In particular, this announcement is not an offer of securities for sale in theUnited States and the New SSP Shares, which will be issued in connection withthe Proposals, have not been, and will not be, registered under the SecuritiesAct or under the securities law of any state, district or other jurisdiction ofthe United States, Australia, Canada or Japan and no regulatory clearance inrespect of the New SSP Shares has been, or will be, applied for in anyjurisdiction other than the UK. The New SSP Shares may not be offered or sold inthe United States absent registration under the Securities Act or an exemptionfrom registration. It is expected that the New SSP Shares will be issued inreliance upon the exemption from the registration requirements of the SecuritiesAct provided by Section 3(a)(10) thereof. Under applicable US securities laws,Sirius Shareholders (whether or not US persons) who are or will be "affiliates"of Sirius or SSP prior to, or of SSP after, the Effective Date will be subjectto certain transfer restrictions relating to the New SSP Shares received inconnection with the Scheme. Notice to US investors in Sirius: The Proposals relate to the shares of a UKcompany and are proposed to be made by means of a scheme of arrangement providedfor under the laws of England and Wales. The Proposals are subject to thedisclosure requirements and practices applicable in the United Kingdom toschemes of arrangement, which differ from the disclosure and other requirementsof US securities laws. Financial information included in the relevantdocumentation will have been prepared in accordance with accounting standardsapplicable in the United Kingdom that may not be comparable to the financialstatements of US companies. If SSP decides to implement the Proposals by way of the Offer, it will be madein satisfaction of the procedural and filing requirements of the US securitieslaws, to the extent applicable. If the Proposals are implemented by way of theOffer, the New SSP Shares to be issued in connection with such Offer will not beregistered under the Securities Act or under the securities laws of any state,district or other jurisdiction of the United States and may not be offered, soldor delivered, directly or indirectly, in the United States except pursuant to anexemption from, or in a transaction not subject to, the registration requirements of the Securities Act. SSP does not intend to register any such New SSP Shares or part thereof in the United States or to conduct a public offering of the New SSP Shares in the United States. Forward Looking Statements This announcement contains forward looking statements that are based on currentexpectations or beliefs, as well as assumptions about future events. Thesestatements are based on the current expectations of the management of SSP andare naturally subject to uncertainty and changes in circumstances. Unduereliance should not be placed on any such statements because, by their verynature, they are subject to known and unknown risks and uncertainties and can beaffected by other factors that could cause actual results, and SSP's plans andobjectives, to differ materially from those expressed or implied in the forwardlooking statements. There are several factors which could cause actual results to differ materiallyfrom those expressed or implied in forward looking statements. Among the factorsthat could cause actual results to differ materially from those described in theforward looking statements are SSP's ability to combine successfully thebusinesses of Sirius and SSP and to realise expected synergies from thatcombination, changes in the global, political, economic, business, competitive,market and regulatory forces, future exchange and interest rates, changes in taxrates and future business combinations or dispositions. Neither SSP nor Sirius undertakes any obligation (except as required by the AIMRules, the rules of the London Stock Exchange and the City Code) to revise orupdate any forward looking statement contained in this announcement, regardlessof whether that statement is affected as a result of new information, futureevents or otherwise. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes,"interested" (directly or indirectly) in one per cent. or more of any class of"relevant securities" of SSP or Sirius, all "dealings" in any "relevantsecurities" of that company (including by means of an option in respect of, or aderivative referenced to, any such "relevant securities") must be publiclydisclosed by no later than 3.30 p.m. on the London business day following thedate of the relevant transaction. This requirement will continue until theScheme becomes Effective, lapses or is otherwise withdrawn or on which the"offer period" otherwise ends (or, if SSP elects to effect the Proposals by wayof the Offer, until the date on which the Offer becomes, or is declared,unconditional as to acceptances, lapses or is otherwise withdrawn or on whichthe "offer period" otherwise ends). If two or more persons act together pursuantto an agreement or understanding, whether formal or informal, to acquire an"interest" in "relevant securities" of SSP or Sirius, they will be deemed to bea single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevantsecurities" of SSP or Sirius by SSP or Sirius, or by any of their respective"associates", must be disclosed by no later than 12.00 noon on the Londonbusiness day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose "relevantsecurities" "dealings" should be disclosed, and the number of such securities inissue, can be found on the Panel's website at www.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the City Code, which can also be foundon the Panel's website. 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. NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE IT WOULD BE UNLAWFUL TO DO SO 8 May 2007 RECOMMENDED CASH AND SHARE OFFER FOR SIRIUS FINANCIAL SOLUTIONS PLC ("SIRIUS") BY SSP HOLDINGS PLC ("SSP") (TO BE EFFECTED BY MEANS OF A SCHEME OF ARRANGEMENT) 1. IntroductionThe Boards of SSP and Sirius are pleased to announce that they have agreed theterms of recommended Proposals for the cash and share acquisition by SSP of theentire issued and to be issued ordinary share capital of Sirius. It is intendedthat the Proposals will be effected by way of a Court sanctioned scheme ofarrangement under section 425 of the Companies Act. Subject to the satisfactionor, where appropriate, waiver, of the Conditions, it is expected that theProposals will become Effective on 9 July 2007. 2. The ProposalsPursuant to the Proposals, which will be subject to the Conditions and furtherterms set out below and in Appendix 1 and the full terms and conditions whichwill be set out in the Scheme Document (or, as the case may be, the OfferDocument), Sirius Shareholders on the register of members at the Scheme RecordTime will be entitled to receive: For each Sirius Share 178.0 pence in cash AND 0.4 New SSP Shares Based on the SSP Closing Price on 4 May 2007, the recommended cash and shareProposals:• value each Sirius Share at 235.0 pence; • value Sirius' issued and to be issued ordinary share capital at approximately £43.4 million; • represent a premium of approximately 28.8 per cent. to the Closing Price of aSirius Share of 182.5 pence on 4 May 2007, the last Business Day prior to thedate of this announcement; and • represent a premium of approximately 40.6 per cent. to the average ClosingPrice of a Sirius Share of 167.1 pence for the three months prior to 4 May 2007,the last Business Day prior to the date of this announcement. The New SSP Shares will be issued credited as fully paid and will rank paripassu in all respects with the SSP Shares in issue at the time the New SSPShares are issued pursuant to the Proposals, including the right to receive andretain dividends and other distributions declared, made or paid by reference toa record date falling after the Effective Date. Application will be made to theLondon Stock Exchange for the New SSP Shares to be admitted to trading on AIM.It is expected that Admission will occur on the Dealing Day following the dateon which the Scheme becomes Effective. Any new Sirius Shares issued to SSP or its nominee(s) pursuant to the Scheme(or, in the event that the Proposals are implemented by way of Offer, the SiriusShares acquired pursuant to the Offer) will be so issued or acquired fully paidand free from all liens, charges, equitable interests, encumbrances and rightsof pre-emption and any other interests of any nature whatsoever and togetherwith all rights attaching thereto. In light of the Proposals, the Sirius Board no longer intends to recommend andpay on 22 June 2007 the final dividend of 1.375 pence per Sirius Sharepreviously announced in respect of the year ended 31 December 2006. 3. RecommendationThe Sirius Directors, who have been so advised by Close Brothers, consider theterms of the Proposals to be fair and reasonable. In providing their advice tothe Sirius Directors, Close Brothers has taken into account the commercialassessments of the Sirius Directors. Accordingly, the Sirius Directors intendunanimously to recommend that Sirius Shareholders vote in favour of the Scheme(or, as the case may be, accept the Offer), as they have irrevocably undertakento do in respect of their entire legal and beneficial holdings, which inaggregate amount to 7,073,612 Sirius Shares, representing approximately 40.2 percent. of Sirius' existing issued ordinary share capital. 4. Reasons for the recommendation by the Sirius Directors of the ProposalsSirius was established in 1984 by its current Chairman and Group Chief ExecutiveStephen Verrall and was admitted to trading on AIM in 1998. Sirius' focus hasbeen to build on its track record of expertise, innovation and delivery in theglobal insurance marketplace to develop a business with market-leading productsin its chosen subsectors, and with a solid financial profile of sustainableprofit and growth. This strategy has yielded good results, with Siriusannouncing on 30 April 2007 increased revenues and operating profit of £23.7million and £2.5 million respectively for the year ended 31 December 2006. Whilst the Sirius Directors are confident that the prospects of the business asan independent company remain strong, they also recognise the benefits ofincreased scale and reach achieved by combining Sirius with a larger, but stillfocused, insurance solutions provider such as SSP. The two businesses are inmany respects complementary, both in terms of their geographic footprint andproduct offerings whilst at the same time offering scope for synergies fromstreamlining overlapping support functions. The Sirius Board believes the terms of the Proposals fairly reflect thepotential benefits that can be derived from combining the two businesses. Thevalue of the Proposals also represents a significant premium of 28.8 per cent.over the Closing Price of 182.5 pence per Sirius Share on 4 May 2007 (being thelast Business Day prior to the date of this announcement). Accordingly, theSirius Board believes the Proposals represent an attractive opportunity forSirius Shareholders both to realise a cash premium to the three month averageSirius Closing Price and to participate in the prospects of the Enlarged Group. 5. Background to and reasons for the ProposalsThe SSP Board believes that combining SSP and Sirius has compelling strategicand financial logic for both companies and that the Proposals represent anattractive opportunity to enhance value for both the existing SSP Shareholdersand, through the share element of the consideration for their Sirius Shares,Sirius Shareholders. The combination will create an Enlarged Group which isstrong across several key sectors of the global insurance software market. The principal benefits of the Proposals are: • UK market leading insurance software provider In the UK, the combination will create a strong presence in the areas of general insurance relating to regional brokers, call centres, small intermediaries, major brokers, underwriting agencies and insurance companies, as well as establish a strong presence in the systems sector relating to large financial advisers. Combining the UK businesses of SSP and Sirius is expected to help develop and maintain strong relationships with brokers and insurance companies as they continue to rationalise the distribution of insurance. Consolidation in the general insurance market is creating demand for solutions providers that service large national and regional brokers with call centre operations and e-trading requirements. These large businesses often prefer to work with organisations with a global presence, that are financially strong and have a wide range of solutions. The Enlarged Group will be able to further develop SSP's 'consumer to carrier' proposition in the UK through a broader presence and the combination should ultimately reduce distribution costs. • Platform to expand the Enlarged Group internationally Outside the UK, SSP has offices in Ireland, Denmark and South Africa whilst Sirius' offices are in Australia, New Zealand, Kenya, India and the United States. With these complementary networks of offices, the Enlarged Group will have customers in over 50 countries. The Proposals will bring additional potential for growth in Australasia, South Africa and other parts of Africa, the United States, the Caribbean and India, as well as in Europe and will enable the Enlarged Group to become a major player across several regions and one of the largest specialist suppliers of general insurance software in the world. The Enlarged Group will be well placed to compete globally with other major IT organisations. • Strong product offerings on several leading technologies The Enlarged Group will have products for many parts of the insurance market. The existing products of both companies, including Sirius products Sirius 21, Sirius for Insurance and Swift and SSP products SSP electraM3, SSP sector, SSP insight and SSP insureJ, will continue to be developed and the Enlarged Group intends to continue all current products in line with existing commitments. The SSP Directors believe that the wide range of products offered by the Enlarged Group will be a positive benefit to its customers' current and future requirements. The Enlarged Group will offer customers products based upon a range of leading technologies, including Microsoft, Oracle and IBM focussed Java systems, as well as supporting many customers on successfully proven older technologies. Its distribution capability, including SSP's affinity club, will provide further opportunity to reduce costs and offer additional products and services to its customers. • Synergies and strategic benefits Following the integration of the two businesses, the SSP Board expects to be able to make reasonable reductions to the Enlarged Group's cost base. Synergies are expected to be derived from: - reduced executive management costs; - the utilisation of common technologies; and - savings in head office and other duplicate costs, including professional fees and regulatory costs. In addition to the synergies referred to above, there are expected to be further strategic benefits available to the Enlarged Group from: - the use of Sirius' successful development capability in India enabling it to bring new technology offerings to market across a range of systems by combining these skills with its UK and territorial expertise; - the wider distribution of a greater variety of personal lines products; - the combined expertise in internet and electronic trading of personal and small commercial insurance; - the cross-selling of SSP Group and Sirius Group products and services to each business' respective customers; - the significant expansion potential in Europe, Africa, Australasia, the Caribbean and the US through greater scale and territorial presence with a much wider product range; and - the extension of SSP's affinity club to include customers of Sirius. • Enhancement in earnings per share The Proposals are expected to enhance earnings per share (before exceptional costs) for SSP for the year ending 31 March 2008 with further significant enhancements expected in the year ending 31 March 2009 as the synergies and other strategic benefits of the business combination increasingly take effect.2 Note:2 This statement should not be taken to imply that the earnings per share of SSPfor the years ending 31 March 2008 or 31 March 2009 will be higher than for theyear ended 31 March 2007 or that the earnings per share of SSP for the yearending 31 March 2009 will be higher than for the year ending 31 March 2008. 6. Information relating to SSPSSP is a market leading provider of business critical IT systems and services tothe UK general insurance industry. SSP Shares commenced trading on AIM on 2October 2006. SSP has a 'consumer to carrier' proposition whereby its solutions facilitatecommunication and interaction across all participants in the insurance chainstarting with insurance underwriters or agencies and ending with the consumers.At one end of the value chain the SSP Group's solutions enable the consumer topurchase insurance products through a range of channels includingintermediaries, brokers, major call centres, affinity groups or the internet.The SSP Group's systems enable the details of policies sold to be communicatedelectronically to the insurance company. At the other end of the value chain theSSP Group provides insurers with back office and administrations solutions. SSP's software is installed in over 1,000 individual insurance businesses inEurope with customers including Fortis, Admiral, Brit, HSBC Insurance Brokers,Jardine Lloyd Thompson, Swinton, Kwik Fit Insurance Service, Norwich Union andWillis Commercial Network. SSP primarily provides its solutions and services to customers in the UK,although it also has insurance company customers outside the UK in Spain, theNetherlands, Denmark, France, Ireland and South Africa. For the year ended 31 March 2006, the SSP Group reported turnover of £30.7million (2005: £21.8 million) and operating profit of £3.3 million (2005: £1.2million). As at 31 March 2006, the total assets of the SSP Group were £57.6million (2005: £44.1 million) and net assets were £15.5 million (2005: £15.8million).3 Note:3 The results for the year ended 31 March 2006 are the consolidated results ofSSP. The results for the year ended 31 March 2005 are an aggregation of theresults of SSP and Software Solutions Partners Limited, which was acquired bySSP on 22 October 2004. These results have been extracted from the AdmissionDocument for SSP dated 27 September 2006. SSP announced its unaudited interim results for the six months to 30 September2006 on 5 December 2006. In those results SSP reported turnover of £17.9 million(2005: £12.7 million) and operating profit of £0.6 million (2005: £0.7 million).As at 30 September 2006, the total assets of the SSP Group were £57.7 million(2005: £41.5 million) and net assets were £18.2 million (2005: £15.0 million). SSP expects to announce its results for the year ended 31 March 2007 in earlyJuly 2007. The SSP Directors believe that the industry dynamics remain favourable for SSPand that the SSP Group will continue to enjoy high levels of recurring andvisible revenues. Having performed well in its first period as a quoted company,the SSP Directors expect SSP to make further progress in the current financialyear. 7. Information relating to SiriusThe principal activities of the Sirius Group are the development and supply ofinsurance specific application software both as a package and as a solution. TheSirius Group also provides a range of professional services, consultancy andsupport to its customers. The Sirius Group's principal market remains theinsurance sector covering, amongst others, insurance brokers, traditional ande-commerce based intermediaries, underwriters, specialist scheme administratorsand IFAs. Sirius provides software products and services to a global client baseof top insurance providers and financial services groups including Royal Bank ofScotland, Zurich, QBE, AON and Towergate Partnership. The audited preliminary results for Sirius for the year ended 31 December 2006were announced on 30 April 2007. For the 12 months ended 31 December 2006, theSirius Group reported turnover of £23.7 million (2005: £21.8 million) andoperating profit of £2.5 million (2005: £2.0 million before one-off propertycosts). As at 31 December 2006, the total assets of the Sirius Group were £20.0million (2005: £18.9 million) and net assets were £13.8 million (2005: £12.3million). 8. Management and employeesFollowing the Scheme becoming Effective (or the Offer becoming or being declaredunconditional in all respects) SSP intends to put in place a new boardstructure. David Rasche will continue as Executive Chairman with Stephen Verrall(who as Chairman and Group Chief Executive of Sirius has built the Siriusbusiness, through several stages of success, over 20 years) becoming part-timeDeputy Chairman with particular focus on group strategy and on supporting theEnlarged Group through the integration process. Laurence Walker, SSP's ManagingDirector, will become Group Chief Executive, and Gren Folwell will continue asSenior Independent Director. Nick Bate will continue as Group Finance Directorand Barney Quinn and Steve Broughton will continue in a non-executive capacity.Other Sirius executives except for Richard Bowser (who will resign hisdirectorship and employment on the Scheme becoming Effective) are expected tocontinue in a senior management capacity with the Enlarged Group. The existing employment rights of all Sirius management and employees will befully safeguarded. Following the Scheme becoming Effective (or the Offer becoming or being declaredunconditional in all respects), the Sirius Directors will be interested, inaggregate, in 2,829,444 SSP Shares, representing 3.4 per cent. of the enlargedissued ordinary share capital of SSP pursuant to the Proposals and the Placing. The Sirius Directors (except for Richard Bowser as set out below) have agreedthat they will not dispose of any interest in SSP's ordinary share capital for aperiod of 12 months following completion except in certain limitedcircumstances. In addition, Sirius Directors (except Richard Bowser) haveundertaken for the 12 months after expiry of the initial 12 months followingcompletion, only to sell their SSP Shares through KBC Peel Hunt (for as long asKBC Peel Hunt remain broker to SSP). Richard Bowser has agreed that he will not dispose of any interest in SSP'sordinary share capital for a period of six months following completion and willonly dispose of up to 50 per cent. of any interest in the following six months.For a period of two years from completion he will only sell any SSP Sharesthrough KBC Peel Hunt (for as long as KBC Peel Hunt remain broker to SSP). 9. Sirius Share SchemesAppropriate proposals will be made in due course to participants in the SiriusShare Schemes. Details of these proposals will be set out in the Scheme Documentor, as the case may be, the Offer Document and in separate letters to be sent toparticipants in the Sirius Share Schemes. 10. Financing of the cash considerationThe cash consideration payable pursuant to the Proposals will be provided by SSPfrom a new bank facility provided by Barclays Bank PLC as well as the issue ofthe Placing Shares. Deloitte Corporate Finance is satisfied that sufficient resources are availableto SSP to satisfy in full the cash consideration payable pursuant to theProposals. Further information on the financing of the Proposals will be set out in theScheme Document. 11. Details of the PlacingPursuant to the Placing Agreement, KBC Peel Hunt has conditionally placed3,583,140 Placing Shares on behalf of SSP at the Placing Price. The Placing hasbeen underwritten by KBC Peel Hunt. The Placing Price of 140.0 pence per Placing Share is at a discount of 1.8 percent. below the Closing Price of 142.5 pence per SSP Share on 4 May 2007, thelast Business Day prior to the date of this announcement, which the SSPDirectors consider to be fair and reasonable given the size of the Placing. The Placing Shares to be issued by SSP pursuant to the Placing will representapproximately 5.0 per cent. of the existing issued ordinary share capital of SSPand will raise approximately £5.0 million gross for SSP. The Placing Shares willbe issued credited as fully paid and will rank pari passu in all respects withthe SSP Shares in issue at the time the New SSP Shares are issued pursuant tothe Placing, including the right to receive and retain dividends and otherdistributions declared, made or paid by reference to a record date falling afterthe Effective Date. The Placing, which is fully underwritten by KBC Peel Hunt, is conditional interalia upon the Proposals becoming Effective and Admission of the Placing Sharesto trading on AIM by 10 July 2007 or such later date (being no later than 31August 2007) as SSP and KBC Peel Hunt may agree. Application will be made to the London Stock Exchange for the Placing Shares tobe admitted to trading on AIM. It is expected that Admission will be effectedand that dealings in the Placing Shares will commence on 10 July 2007. 12. Scheme of ArrangementIt is intended that the Proposals will be effected by means of a Courtsanctioned scheme of arrangement between Sirius and its shareholders undersection 425 of the Companies Act (although SSP and Sirius have agreed that SSPmay, if it so determines in its absolute discretion, instead effect theProposals by way of the Offer). The Scheme will involve an application by Siriusto the Court to sanction the Scheme. Upon the Scheme becoming Effective, SSP will become the owner of the whole ofthe issued ordinary share capital of Sirius. To become Effective, the Scheme will require, amongst other things, the approvalat the Scheme Meeting of a majority in number of the Scheme Shareholders presentand voting, either in person or by proxy, representing not less than threefourths in value of the Sirius Shares voted and the passing of the resolutionsnecessary to implement the Scheme at the Sirius Extraordinary General Meeting.Following the Sirius Extraordinary General Meeting and the Scheme Meeting andthe satisfaction (or, where applicable, waiver) of the other Conditions, theScheme must also be sanctioned by the Court and the associated Capital Reductionmust be confirmed by the Court at the Court Hearing. The formal documentation setting out details of the Proposals, including theScheme Document setting out the procedures to be followed to approve the Scheme,is expected to be posted to Sirius Shareholders (other than certain OverseasShareholders) by 22 May 2007. The Scheme Document will include full details of the Scheme, together withnotices of the Scheme Meeting and the Sirius Extraordinary General Meeting andthe expected timetable, and will specify the action to be taken by SchemeShareholders. 13. Overseas ShareholdersThe availability of New SSP Shares under the terms of the Proposals to personsnot resident in the United Kingdom may be affected by the laws of the relevantjurisdiction. Such persons should inform themselves about and observe anyapplicable requirements. Further details in relation to Overseas Shareholderswill be contained in the Scheme Document. 14. Irrevocable Undertakings and Letter of IntentSSP has received irrevocable undertakings to vote (or procure the vote) infavour of the Scheme (or to accept the Offer, if the Proposals are implementedby way of a takeover offer) in respect of 13,131,631 Sirius Shares, in aggregaterepresenting approximately 74.6 per cent. of Sirius' existing issued ordinaryshare capital. This includes irrevocable undertakings from the Sirius Directorsin respect of 7,073,612 Sirius Shares, representing approximately 40.2 per centof Sirius' existing issued ordinary share capital, as follows:+------------------------+------------------------+------------------------+|Name |Number of Sirius Shares | Percentage of existing || | | issued ordinary share || | | capital of Sirius |+------------------------+------------------------+------------------------+|Stephen Verrall | 5,536,816 | 31.46% |+------------------------+------------------------+------------------------+|Richard Bowser | 1,454,555 | 8.27% |+------------------------+------------------------+------------------------+|Mike Dodd | 60,025 | 0.34% |+------------------------+------------------------+------------------------+|Philip Race | 10,216 | 0.06% |+------------------------+------------------------+------------------------+|Michael Anstee | 7,000 | 0.04% |+------------------------+------------------------+------------------------+|David Cox | 5,000 | 0.03% |+------------------------+------------------------+------------------------+ The undertakings given by the Sirius Directors will remain binding even if ahigher competing offer for Sirius is made. They will cease to be binding only if(i) the Proposals lapse or are withdrawn or (ii) the documentation in connectionwith the Scheme is not posted to Sirius Shareholders within 28 days of the dateof this announcement or such later date as the Panel may agree (being not laterthan 42 days after the date of issue of this announcement). Other irrevocable undertakings have been given by:• Richard Glaves in respect of his entire beneficial holding of 790,238Sirius Shares, representing approximately 4.5 per cent. of the existing issuedordinary share capital of Sirius; • AXA Framlington Investment Management Limited in respect of its entireholding of 1,965,000 Sirius Shares, representing approximately 11.2 per cent. ofthe existing issued ordinary share capital of Sirius; • Gartmore Investment Limited in respect of its entire holding of1,015,193 Sirius Shares, representing approximately 5.8 per cent. of theexisting issued ordinary share capital of Sirius; and • Liontrust Investment Services Limited in respect of its entire holdingof 2,287,588 Sirius Shares, representing approximately 13.0 per cent. of theexisting issued ordinary share capital of Sirius. These undertakings will cease to be binding if (i) a third party announces afirm intention to make an offer to acquire Sirius' entire issued share capitalon terms which, in the reasonable opinion of Close Brothers, represent animprovement of 10 per cent. or more (or, in the case of the undertaking of AXAFramlington Investment Management Limited, on terms which represent animprovement of 5 per cent. or more) on the value of the consideration under theProposals provided that the third party has announced a firm intention to makean offer by no later than 3.30pm on the fifteenth day following the posting ofthe Scheme Document (or Offer Document as the case may be) to the SiriusShareholders, or (ii) the Proposals lapse or are withdrawn, or (iii) thedocumentation in connection with the Scheme is not posted to Sirius Shareholderswithin 28 days of the date of this announcement or such later date as the Panelmay agree (being not later than 42 days after the date of issue of thisannouncement). In addition, SSP has received a letter of intent from Insight InvestmentManagement (Global) Limited to vote in favour of the Scheme in respect of1,541,396 Sirius Shares, representing approximately 8.8 per cent. of Sirius'existing issued ordinary share capital. In aggregate, therefore, SSP has received irrevocable undertakings and a letterof intent to vote in favour of the Proposals at the Scheme Meeting and theSirius Extraordinary General Meeting in respect of 14,673,027 Sirius Shares(representing approximately 83.4 per cent. of Sirius' existing issued ordinaryshare capital). 15. Disclosure of Interests in SiriusAs at the date of this announcement, SSP does not own any Sirius Shares. Savefor the arrangements with Sirius Shareholders in relation to irrevocableundertakings summarised above, as at 4 May 2007, the latest practicable BusinessDay prior to the date of this announcement, neither SSP, nor, so far as SSP isaware, any person acting in concert with SSP for the purposes of the Proposals,has any interest in, or right to subscribe for, or has borrowed or lent (savefor any borrowed shares which have been either on-lent or sold) any SiriusShares, nor does any such person have any short position or any arrangement inrelation to Sirius Shares. An "arrangement" includes any indemnity or optionarrangement and any agreement or any understanding, formal or informal, ofwhatever nature, relating to Sirius Shares which may be an inducement to deal orrefrain from dealing in such securities. It has not been possible, by the date of this announcement, to ascertain theinterests in Sirius Shares (if any) of all SSP's concert parties. Furtherenquiries will be completed prior to publication of the Scheme Document or, asthe case may be, the Offer Document. If such enquiries reveal any suchinterests, they will be included in the Scheme Document or, as the case may be,the Offer Document or announced earlier if required by the Panel. "Interests in securities" is further explained in the paragraph headed "DealingDisclosure Requirements" below. 16. Mutual Inducement FeeSirius has entered into an agreement with SSP under which Sirius has undertaken,among other things, to pay SSP a fee of 1.0 per cent. of the offer value on afully diluted basis and having taken into account, for these purposes, theconsideration payable for all of the current issued ordinary share capital ofSirius together with the consideration payable in respect of any offers orproposals that SSP is required to make for any securities in Sirius under Rule14 or Rule 15 of the Code if, in summary: (i) the Sirius Directors withdraw,qualify or adversely modify their unanimous and unqualified recommendation thatSirius Shareholders vote in favour of the Scheme (or, as applicable, accept theOffer); (ii) a Sirius Director fails to sign an irrevocable undertaking, onterms reasonably acceptable to Sirius, to vote in favour of the Scheme (or, asapplicable, accept the Offer), which is binding even in the event of a higheroffer by a third party; (iii) Sirius or any of the Sirius Directors fail toprovide written confirmation on request that the Sirius Directors remainprepared to unanimously recommend the Scheme (or, as applicable, the Offer);(iv) Sirius breaches its undertaking not to (or fails to procure that itsdirectors, officers, employees, representatives, agents and advisers do not),directly or indirectly invite, initiate or solicit any approach from a thirdparty; (v) Sirius takes any action that comes within paragraphs (a) or (b) ofRule 21.1 of the City Code without obtaining the prior consent of the Panel tosuch action, where there is no requirement for a shareholders' meeting, or ofSSP to such action; (vi) Sirius (or any of its directors) informs SSP or itsadvisers that they intend not to co-operate in respect of the implementation ofthe Proposals to a material extent; or (vii) any alternative offer becomes or isdeclared unconditional in all respects or is otherwise completed. SSP has agreed to pay to Sirius a fee of 1.0 per cent. of the offer value on afully diluted basis and having taken into account, for these purposes, theconsideration payable for all of the current issued ordinary share capital ofSirius together with the consideration payable in respect of any offers orproposals that SSP is required to make for any securities in Sirius under Rule14 or Rule 15 of the Code if, in summary: (i) the SSP Shareholders vote againstany resolution required by SSP to implement the Scheme (or, as applicable, theOffer); or (ii) SSP (or any of its subsidiaries or its or their directors,employees, agents or advisers) informs Sirius or its advisers that they intendnot to pursue the Scheme (or, as applicable, the Offer) or, if requested inwriting by Sirius, otherwise fail to confirm its willingness to proceed with theScheme (or, as applicable, the Offer) on terms previously agreed between SSP andSirius, unless Sirius is liable to pay an inducement fee to SSP or SSP hasidentified a material issue as part of its due diligence exercise that makes anyof its assumptions about Sirius or the transaction incorrect. 17. Delisting, Re-registration and Compulsory AcquisitionIt is intended that the London Stock Exchange will be requested to canceltrading in Sirius Shares on AIM on, or shortly after, the date on which theScheme becomes Effective. If the Proposals are effected by way of Offer, it is anticipated thatcancellation of listing and trading will take effect no earlier than 20 BusinessDays after SSP has acquired or agreed to acquire 75 per cent. of the votingrights attaching to the Sirius Shares. Delisting would significantly reduce theliquidity and marketability of any Sirius Shares not assented to the Offer atthat time. If the Proposals are effected by way of Offer and SSP receives acceptances underthe Offer in respect of, and/or otherwise acquires, 90 per cent. or more of theSirius Shares and voting rights to which the Offer relates, SSP intends toexercise its rights to acquire compulsorily the remaining Sirius Shares inrespect of which the Offer has not been accepted. As soon as possible after the Effective Date, it is intended that Sirius bere-registered as a private limited company. 18. General and DocumentationThe Proposals will be subject to the conditions and further terms set out hereinand in Appendix 1 and to the full terms and conditions which will be set out inthe Scheme Document. It is expected that the Scheme Document will be sent to Sirius Shareholders(other than certain Overseas Shareholders) by 22 May 2007. Enquiries:SSP Holdings PLC Sirius Financial Solutions PLCTel: +44 (0) 1422 330 022 Tel: +44 (0) 121 779 8400 David Rasche (Executive Chairman) Stephen Verrall (Chairman and Group Chief Executive)Nick Bate (Finance Director) Richard Bowser (Finance Director) Deloitte Corporate Finance Close Brothers(financial adviser to SSP) (financial adviser to Sirius)Tel: +44 (0) 113 243 9021 Tel: +44 (0) 20 7655 3100 Roger Esler Simon WillisSimon Houldsworth James Craven KBC Peel Hunt Brewin Dolphin Securities Limited(nominated adviser and broker to SSP) (nominated adviser and broker to Sirius)Tel: +44 (0) 20 7418 8900 Tel: +44 (0) 121 236 7000 Oliver Scott Ifor WilliamsNicholas Marren Weber Shandwick College Hill(PR adviser to SSP) (PR adviser to Sirius)Tel: +44 (0) 20 7067 0700 Tel: +44 (0) 20 7457 2020 Nick Oborne Adrian DuffieldJohn Moriarty Ben WayCharlie Hooper The conditions to and certain further terms of the Proposals are set out inAppendix 1. The bases and sources of certain financial information contained inthis announcement are set out in Appendix 2. Certain definitions and terms usedin this announcement are set out in Appendix 3. The Sirius Directors accept responsibility for the information contained in thisannouncement other than the information for which the SSP Directors acceptresponsibility. To the best of the knowledge and belief of the Sirius Directors(who have taken all reasonable care to ensure that such is the case), theinformation contained in this announcement for which they accept responsibilityis in accordance with the facts and does not omit anything likely to affect theimport of such information. The SSP Directors accept responsibility for the information contained in thisannouncement relating to the SSP Group, the opinions of SSP, the SSP Directorsand members of their immediate families, related trusts and persons connectedwith them. To the best of the knowledge and belief of the SSP Directors (whohave taken all reasonable care to ensure that such is the case), the informationcontained in this announcement for which they accept responsibility is inaccordance with the facts and does not omit anything likely to affect the importof such information. Deloitte Corporate Finance is acting for SSP and for no one else in connectionwith the Proposals and will not regard any other person as its client nor beresponsible to anyone other than SSP for providing the protections afforded tothe clients of Deloitte Corporate Finance nor for providing advice in relationto the Proposals or any matter referred to herein. Deloitte Corporate Finance isa division of Deloitte & Touche LLP, which is authorised and regulated by theFinancial Services Authority in respect of regulated activities. KBC Peel Hunt is acting as nominated adviser and broker to SSP in respect of theProposals, and no one else in connection with the Proposals and will not beresponsible to anyone other than SSP for providing the protections afforded tothe clients of KBC Peel Hunt nor for providing advice in relation to theProposals or any other matter referred to herein. Close Brothers, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting exclusively for Sirius and no one elsein connection with the Proposals and will not be responsible to anyone otherthan Sirius for providing the protections afforded to the clients of CloseBrothers nor for providing advice in relation to the Proposals or any othermatter referred to herein. Overseas JurisdictionsThe release, publication or distribution of this announcement in jurisdictionsother than the United Kingdom may be restricted by law and therefore any personswho are subject to the laws of any jurisdiction other than the United Kingdomshould inform themselves about, and observe, any applicable requirements. Thisannouncement has been prepared for the purposes of complying with English lawand the City Code and the information disclosed may not be the same as thatwhich would have been disclosed if this announcement had been prepared inaccordance with the laws and regulations of any jurisdiction outside of England. This announcement does not constitute an offer to sell or an invitation topurchase or subscribe for any securities or a solicitation of any vote orapproval in any jurisdiction whether relating to the Proposals or otherwise.This announcement does not constitute a prospectus or a prospectus equivalentdocument. The Proposals will be made solely through the Scheme Document whichwill contain the full details, terms and conditions of the Proposals, includingdetails of how to vote in respect of the Proposals. Sirius Shareholders areadvised to read carefully the formal documentation in relation to the Proposalsonce it has been despatched. In particular, this announcement is not an offer of securities for sale in theUnited States and the New SSP Shares, which will be issued in connection withthe Proposals, have not been, and will not be, registered under the SecuritiesAct or under the securities law of any state, district or other jurisdiction ofthe United States, Australia, Canada or Japan and no regulatory clearance inrespect of the New SSP Shares has been, or will be, applied for in anyjurisdiction other than the UK. The New SSP Shares may not be offered or sold inthe United States absent registration under the Securities Act or an exemptionfrom registration. It is expected that the New SSP Shares will be issued inreliance upon the exemption from the registration requirements of the SecuritiesAct provided by Section 3(a)(10) thereof. Under applicable US securities laws,Sirius Shareholders (whether or not US persons) who are or will be "affiliates"of Sirius or SSP prior to, or of SSP after, the Effective Date will be subjectto certain transfer restrictions relating to the New SSP Shares received inconnection with the Scheme. Notice to US investors in Sirius: The Proposals relate to the shares of a UKcompany and are proposed to be made by means of a scheme of arrangement providedfor under the laws of England and Wales. The Proposals are subject to thedisclosure requirements and practices applicable in the United Kingdom toschemes of arrangement, which differ from the disclosure and other requirementsof US securities laws. Financial information included in the relevantdocumentation will have been prepared in accordance with accounting standardsapplicable in the United Kingdom that may not be comparable to the financialstatements of US companies. If SSP decides to implement the Proposals by way of the Offer, it will be madein satisfaction of the procedural and filing requirements of the US securitieslaws, to the extent applicable. If the Proposals are implemented by way of theOffer, the New SSP Shares to be issued in connection with such Offer will not beregistered under the Securities Act or under the securities laws of any state,district or other jurisdiction of the United States and may not be offered, soldor delivered, directly or indirectly, in the United States except pursuant to anexemption from, or in a transaction not subject to, the registrationrequirements of the Securities Act. SSP does not intend to register any such NewSSP Shares or part thereof in the United States or to conduct a public offeringof the New SSP Shares in the United States. Forward Looking StatementsThis announcement contains forward looking statements that are based on currentexpectations or beliefs, as well as assumptions about future events. Thesestatements are based on the current expectations of the management of SSP andare naturally subject to uncertainty and changes in circumstances. Unduereliance should not be placed on any such statements because, by their verynature, they are subject to known and unknown risks and uncertainties and can beaffected by other factors that could cause actual results, and SSP's plans andobjectives, to differ materially from those expressed or implied in the forwardlooking statements. There are several factors which could cause actual results to differ materiallyfrom those expressed or implied in forward looking statements. Among the factorsthat could cause actual results to differ materially from those described in theforward looking statements are SSP's ability to combine successfully thebusinesses of Sirius and SSP and to realise expected synergies from thatcombination, changes in the global, political, economic, business, competitive,market and regulatory forces, future exchange and interest rates, changes in taxrates and future business combinations or dispositions. Neither SSP nor Sirius undertakes any obligation (except as required by the AIMRules, the rules of the London Stock Exchange and the City Code) to revise orupdate any forward looking statement contained in this announcement, regardlessof whether that statement is affected as a result of new information, futureevents or otherwise. Dealing Disclosure RequirementsUnder the provisions of Rule 8.3 of the City Code, if any person is, or becomes,"interested" (directly or indirectly) in one per cent. or more of any class of"relevant securities" of SSP or Sirius, all "dealings" in any "relevantsecurities" of that company (including by means of an option in respect of, or aderivative referenced to, any such "relevant securities") must be publiclydisclosed by no later than 3.30 p.m. on the London business day following thedate of the relevant transaction. This requirement will continue until theScheme becomes Effective, lapses or is otherwise withdrawn or on which the"offer period" otherwise ends (or, if SSP elects to effect the Proposals by wayof the Offer, until the date on which the Offer becomes, or is declared,unconditional as to acceptances, lapses or is otherwise withdrawn or on whichthe "offer period" otherwise ends). If two or more persons act together pursuantto an agreement or understanding, whether formal or informal, to acquire an"interest" in "relevant securities" of SSP or Sirius, they will be deemed to bea single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevantsecurities" of SSP or Sirius by SSP or Sirius, or by any of their respective"associates", must be disclosed by no later than 12.00 noon on the Londonbusiness day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose "relevantsecurities" "dealings" should be disclosed, and the number of such securities inissue, can be found on the Panel's website at www.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the City Code, which can also be foundon the Panel's website. 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. APPENDIX 1 CONDITIONS TO AND CERTAIN FURTHER TERMS OF THE PROPOSALS The Proposals are conditional upon the Scheme becoming unconditional andbecoming Effective by 31 August 2007 (or such later date as SSP and Sirius mayagree and the Court may allow). The Proposals will be governed by English law and be subject to the jurisdictionof the English courts, to the Conditions set out in this announcement and in theformal Scheme Document and to the applicable requirements of the City Code, thePanel, the London Stock Exchange and the AIM Rules. PART A Conditions of the Proposals 1 The Scheme will be subject to the following conditions: 1.1 its approval by a majority in number, representing not less than three-fourths in value, of the holders of Sirius Shares who are on the register of members of Sirius at the Scheme Voting Record time, present and voting, whether in person or by proxy, at the Scheme Meeting (or at any adjournment thereof); 1.2 the resolutions required to approve and implement the Scheme (including, without limitation, to amend Sirius' articles of association) being passed by the requisite majority of the Sirius shareholders at the Sirius Extraordinary General Meeting (or at any adjournment thereof); and 1.3 the sanction (with or without modification (but subject to such modification being acceptable to SSP and Sirius)) of the Scheme and the confirmation of the Capital Reduction by the Court, an office copy of the Court Order and of the Minute being delivered for registration to the Registrar of Companies and being registered by him. 2 In addition, Sirius and SSP have agreed that the Proposals will be conditional upon the following conditions being satisfied or waived and, accordingly, the necessary action to make the Proposals Effective will not be taken unless such conditions (as amended if appropriate) have been so satisfied or waived: 2.1 if the Proposals qualify for investigation by the Office of Fair Trading under the merger provisions of the Enterprise Act 2002, the Office of Fair Trading indicating, in terms reasonably satisfactory to SSP, that the proposed Proposals or any matter arising therefrom or related thereto will not be referred to the Competition Commission; 2.2 the admission to trading on AIM of the New SSP Shares to be issued in connection with the Proposals becoming effective in accordance with the AIM Rules or, if SSP so determines, the London Stock Exchange agreeing to admit such shares to trading on AIM subject to (i) the allotment of such shares and/or (ii) the Proposals becoming Effective; 2.3 except as disclosed in Sirius' annual report and accounts for the year ended 31 December 2005 or as fairly disclosed in any public announcement made to a Regulatory News Service by Sirius prior to the date of this announcement or as fairly disclosed in writing by or on behalf of Sirius to SSP or its advisers prior to the date of this announcement, there being no provision of any agreement, arrangement, licence, permit or other instrument to which any member of the wider Sirius Group is a party or by which or to which any such member or any of its assets may be bound, entitled or subject, which in consequence of the Proposals or the proposed acquisition of any shares or other securities in Sirius or because of a change in the control or management of Sirius or otherwise, would or might reasonably be expected to result in (in any case to an extent which is or would be material in the context of the wider Sirius Group taken as a whole): (a) any monies borrowed by or any other indebtedness in the nature of borrowing of, or grant available to, any such member, being or becoming repayable or capable of being declared repayable immediately or earlier than their or its stated maturity date or repayment date or the ability of any such member to borrow moneys or incur any indebtedness being withdrawn or inhibited or being capable of becoming or being withdrawn or inhibited; (b) any such agreement, arrangement, licence, permit or instrument or the rights, liabilities, obligations or interests of any such member thereunder being terminated or adversely modified or affected or any obligation or liability arising or any adverse action being taken thereunder; (c) any assets or interests of any such member being or falling to be disposed of or ceasing to be available to any such member or any right arising under which any such asset or interest could be required to be disposed of or could cease to be available to any such member; (d) the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of any such member; (e) the value of any such member or its financial or trading position or prospects being prejudiced or adversely affected; (f) any such member ceasing to be able to carry on business under any name under which it presently does so; or (g) the creation of any liability, actual or contingent, by any such member, and no event having occurred which, under any provision of any such agreement, arrangement, licence, permit or other instrument, could result in any of the events or circumstances as are referred to in sub-paragraphs (a) to (g) of this paragraph in each case to an extent which is or would be material in the context of the wider Sirius Group taken as a whole; 2.4 no government or governmental, quasi-governmental, supranational, statutory, regulatory, environmental or investigative body, court, trade agency, association, institution or any other similar body or person whatsoever in any jurisdiction except for the Office of Fair Trading (each a "Third Party"), having decided in writing 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 similar steps (in each case, an "intervention" (with "intervene" being construed accordingly)), in each case to an extent which is material in the context of the wider Sirius Group taken as a whole, which in any such case would reasonably be expected to: (a) require, prevent or delay the divestiture, or materially alter the terms envisaged for any proposed divestiture, by any member of the wider SSP Group or any member of the wider Sirius Group of all or any portion of their respective businesses, assets or property or impose any limitation on the ability of any of them to conduct their respective businesses (or any of them) or to own any of their respective assets or properties or any part thereof; (b) require, prevent or delay the divestiture by any member of the wider SSP Group of any shares or other securities in Sirius; (c) impose any limitation on, or result in a delay in, the ability of any member of the wider SSP Group to acquire or to hold or to exercise effectively any rights of ownership in respect of shares or loans or securities convertible into shares or any other securities (or the equivalent) in any member of the wider Sirius Group or the wider SSP Group or to exercise management control over any such member; (d) impose any limitation on the ability of any member of the wider SSP Group or the wider Sirius Group to integrate or co-ordinate the business of any member of the wider Sirius Group, or any part of it, with that of any member(s) of the wider SSP Group and/or any other member of the wider Sirius Group; (e) otherwise materially and adversely affect the business, assets, financial position, profits or prospects of any member of the wider Sirius Group; (f) make the Proposals or their implementation or the acquisition or proposed acquisition by SSP or any member of the SSP Group of any shares or other securities in, or control of, Sirius void, illegal or unenforceable under the laws of any jurisdiction, or otherwise, directly or indirectly, restrain, restrict, prohibit, delay or otherwise interfere with the same, or impose additional conditions or obligations with respect thereto, or otherwise challenge or interfere therewith; (g) except in the case of the SSP Group in relation to the Proposals pursuant to Chapter 3 of Part 28 of the Companies Act 2006, require any member of the wider SSP Group or the wider Sirius Group to offer to acquire any shares or other securities (or the equivalent) or interest in any member of the wider Sirius Group or the wider SSP Group owned by any third party; or (h) result in any member of the wider Sirius Group ceasing to be able to carry on business under any name under which it presently does so, and all applicable waiting and other time periods during which any such Third Party could intervene under the laws of any jurisdiction in respect of the Proposals or the acquisition or proposed acquisition of any Sirius Shares having expired, lapsed or been terminated; 2.5 all necessary filings or applications having been made in connection with the Proposals and all statutory or regulatory obligations in any jurisdiction having been complied with in connection with the Proposals or the acquisition by any member of the wider SSP Group of any shares or other securities in, or control of, Sirius and all authorisations, orders, recognitions, grants, consents, licences, confirmations, clearances, permissions and approvals (collectively, "Consents"), reasonably deemed necessary or appropriate by SSP, for or in respect of the Proposals or the proposed acquisition of any shares or other securities in, or control of, Sirius by any member of the wider SSP Group having been obtained in terms and in a form reasonably satisfactory to SSP from all appropriate Third Parties or persons with whom any member of the wider Sirius Group has entered into contractual arrangements, in each case where the absence of such Consent would have a material adverse effect on the wider Sirius Group taken as a whole, and all such Consents, together with all material Consents necessary or appropriate to carry on the business of any member of the Sirius Group which is material, remaining in full force and effect and all filings necessary for such purpose having been made and there being no notice or intimation of any intention to revoke or not to renew any of the same at the time at which the Proposals otherwise becomes Effective; 2.6 except as disclosed in Sirius' annual report and accounts for the year ended 31 December 2005 or as fairly disclosed in any public announcement made to a Regulatory News Service by Sirius prior to the date of this announcement or as fairly disclosed in writing by or on behalf of Sirius to SSP or its advisers prior to the date of this announcement, no member of the Sirius Group having, since 31 December 2005: (a) save as between Sirius and members of the Sirius Group who are wholly owned subsidiaries or between members of the Sirius Group who are all wholly owned subsidiaries or for Sirius Shares issued pursuant to the exercise of options granted or vesting of awards made under the Sirius Share Schemes, issued, authorised or agreed to the issue of additional shares of any class; (b) save as between Sirius and members of the Sirius Group who are wholly owned subsidiaries or between members of the Sirius Group who are all wholly owned subsidiaries or for the grant of options or making of awards under the Sirius Share Schemes, issued, agreed to issue or authorised the issue of securities convertible into shares of any class or rights, warrants or options to subscribe for, or acquire, any such shares or convertible securities; (c) other than to another member of the Sirius Group, recommended, declared, paid or made or agreed to recommend, declare, pay or make any bonus, dividend or other distribution whether payable in cash or otherwise; (d) save for transactions between members of the Sirius Group, merged with or demerged any body corporate or acquired or disposed of or transferred, mortgaged or charged or created any security interest over any assets or any right, title or interest in any asset (including shares and trade investments) or authorised or proposed any merger, demerger, acquisition or disposal, transfer, mortgage, charge or security interest, in each case and to an extent which is material in the context of the Sirius Group taken as a whole; (e) save for transactions between members of the Sirius Group, made or authorised or agreed to make any change in its loan capital; (f) save for transactions between members of the Sirius Group, issued or authorised or agreed to the issue of any debentures or, save for transactions between members of the Sirius Group, incurred or increased any borrowing or indebtedness in the nature of borrowing or become subject to any guarantee or contingent liability; (g) save as between Sirius and members of the Sirius Group who are wholly owned subsidiaries or between members of the Sirius Group who are all wholly owned subsidiaries, purchased, redeemed or repaid or agreed to purchase, redeem or repay any of its own shares or other securities or reduced or, save in respect to the matters mentioned in sub-paragraph (a) above, made any other change to any part of its share capital; (h) save as between Sirius and members of the Sirius Group who are wholly owned subsidiaries or between members of the Sirius Group who are all wholly owned subsidiaries, implemented, or authorised, proposed or announced its intention to implement, any reconstruction, amalgamation or scheme otherwise than in the ordinary course of business which in each case is material in the context of the Sirius Group taken as a whole or entered into or varied the terms of any contract with any Sirius Director or senior executive; (i) entered into or authorised or agreed to enter into or vary any contract, transaction or commitment (whether in respect of capital expenditure or otherwise) which is of an onerous or unusual nature or magnitude or which is or could be materially restrictive on the businesses of any member of the Sirius Group or which involves or could involve an obligation of such a nature or magnitude and which in each case is material in the context of the Sirius Group taken as a whole; (j) (other than in respect of a member which is non-trading or dormant and was solvent at the relevant time) taken any corporate action or had any legal proceedings instituted or petition presented for its winding-up, dissolution or reorganisation or for the appointment of a receiver, administrative receiver, administrator, trustee or similar officer of all or any part of its assets and revenues or any analogous proceedings in any jurisdiction or had any such person appointed and which in each case is material in the context of the Sirius Group taken as a whole; (k) waived or compromised any claim, otherwise than in the ordinary course of business, which in each case is material in the context of the Sirius Group taken as a whole; (l) made any change to (A) the terms of the trust deeds constituting the pension scheme(s) established by any member of the Sirius Group for its directors, employees or their dependants, (B) the benefits which accrue or to the pensions which are payable thereunder, (C) the basis on which qualification for, or accrual or entitlement to such benefits or pensions are calculated or determined or (D) the basis upon which the liabilities (including pensions) of such pension schemes are funded or made in any such case, which has an effect that is material in the context of the Sirius Group taken as a whole; (m) proposed, agreed to provide or modified the terms of any share option scheme, incentive scheme or other benefit relating to the employment or termination of employment of any person employed by the wider Sirius Group; or (n) entered into any contract, commitment, arrangement or agreement otherwise than in the ordinary course of business or passed any resolution or made any offer (which remains open for acceptance) with respect to or announced any intention to, or to propose to, effect any of the transactions, matters or events referred to in this condition 2.6, and, for the purposes of paragraphs (c), (d), (e) and (f) of this condition 2.6, the term "Sirius Group" shall mean Sirius and its wholly-owned subsidiaries; 2.7 since 31 December 2005 and except as disclosed in Sirius' annual report and accounts for the year then ended or fairly disclosed in any public announcement made to a Regulatory News Service by Sirius prior to the date of this announcement or as fairly disclosed in writing by or on behalf of Sirius to SSP or its advisers prior to the date of this announcement: (a) no adverse change or deterioration having occurred in the business, assets, financial or trading position or profits or prospects of the Sirius Group which is material in the context of the Sirius Group taken as a whole; (b) no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the wider Sirius Group is or may become a party (whether as a claimant, defendant or otherwise) having been instituted, announced or threatened in writing by or against or remaining outstanding in respect of any member of the wider Sirius Group which in any such case is material in the context of the Sirius Group taken as a whole; and (c) no contingent or other liability of any member of the wider Sirius Group having arisen or become apparent to SSP which in any case is material in the context of the Sirius Group taken as a whole;2.8 except as disclosed in Sirius' annual report and accounts for the year ended 31 December 2005 or fairly disclosed in any public announcement made to a Regulatory News Service by Sirius prior to the date of this announcement or as fairly disclosed in writing by or on behalf of Sirius to SSP or its advisers, SSP not having discovered: (a) that any financial, business or other information concerning the wider Sirius Group as contained in the information publicly disclosed at any time by or on behalf of any member of the wider Sirius Group or otherwise disclosed by or on behalf of Sirius to SSP or its advisers is misleading, contains a material misrepresentation of fact or omits to state a fact necessary to make that information not misleading and which was not subsequently corrected before the date of this announcement by disclosure either publicly or otherwise to SSP or its advisers which in any case is material in the context of the Sirius Group taken as a whole; (b) that any member of the Sirius Group or any partnership, company or other entity in which any member of the Sirius Group has a significant economic interest and which is not a subsidiary undertaking of the Sirius Group is subject to any material liability (contingent or otherwise); or (c) that any member of the Sirius Group has failed to comply with all applicable laws and regulations whether of the United Kingdom or elsewhere which would be likely to give rise to any liability (actual or contingent) on the part of any member of the wider Sirius Group which is material in the context of the wider Sirius Group taken as a whole. Subject to the requirements of the Panel, SSP reserves the right to waive all orany of the above Conditions, in whole or in part, except Conditions 1 and 2.2. SSP shall be under no obligation to waive (if capable of waiver), to determineto be or remain satisfied or to treat as fulfilled any of the Conditions by adate earlier than the first to occur of the date of the sanction of the Schemereferred to in Condition 1.3 above or the latest date specified above for thefulfilment of that Condition, notwithstanding that the other Conditions of theProposals may at such earlier date have been waived or fulfilled and that thereare, at such earlier date, no circumstances indicating that any Condition maynot be capable of fulfilment. For the purposes of these Conditions the "wider Sirius Group" means Sirius andits subsidiary undertakings, associated undertakings and any other undertakingin which Sirius and/or such undertakings (aggregating their interests) have asignificant interest and the "wider SSP Group" means SSP and its subsidiaryundertakings, associated undertakings and any other undertaking in which SSP and/or such undertakings (aggregating their interests) have a significant interestand for these purposes "subsidiary", " subsidiary undertaking", "associatedundertaking" and "undertaking" have the meanings given by the Companies Act1985, other than paragraph 20(1)(b) of Schedule 4A to that Act which shall beexcluded for this purpose, and "significant interest" means a direct or indirectinterest in ten per cent. or more of the equity share capital (as defined inthat Act). If SSP is required by the Panel to make an offer for Sirius Shares under theprovisions of Rule 9 of the Code, SSP may make such alterations to any of theabove conditions as are necessary to comply with the provisions of that Rule. SSP and Sirius have agreed that SSP may, if it so determines and in its absolutediscretion, implement the Proposals by way of a takeover offer for the entireissued and to be issued share capital of Sirius, as defined in Chapter 3 of Part28 of the Companies Act 2006. In such event, the Proposals will be implementedon the same terms (subject to appropriate amendments including (withoutlimitation) an acceptance condition set at 90 per cent. (or such lowerpercentage as SSP may, subject to the consent of the Panel, decide) of theshares to which the Proposals relate or such other percentage as may be requiredby the Panel and subject to the availability of an exemption from registrationfor the New SSP shares under the US Securities Act 1933), so far as applicable,as those which would apply to the implementation of the Proposals by means ofthe Scheme. The Proposals will not proceed if, prior to the Effective Date of the Scheme,the European Commission in respect thereof either initiates proceedings underArticle 6(1)(c) of Council Regulation (EEC) 4064/89 or makes a referral to acompetent authority of the United Kingdom under Article 9(1) of that regulationand there is a subsequent reference to the Competition Commission. PART B Certain further terms of the Proposals Fractions of New SSP Shares will not be allotted or issued to SiriusShareholders pursuant to the Proposals. Fractional entitlements to New SSPShares will be aggregated and sold in the market and the net proceeds of salepaid pro rata to persons entitled thereto. Any new Sirius Shares issued to SSP or its nominee(s) pursuant to the Scheme(or, in the event that the Proposals are implemented by way of Offer, the SiriusShares acquired pursuant to the Offer) will be so issued or acquired fully paidand free from all liens, charges, equitable interests, encumbrances and rightsof pre-emption and any other interests of any nature whatsoever and togetherwith all rights attaching thereto. The New SSP Shares will be issued credited as fully paid and will rank paripassu in all respects with the SSP Shares in issue at the time the New SSPShares are issued pursuant to the Proposals, including the right to receive andretain dividends and other distributions declared, made or paid by reference toa record date falling after the Effective Date. Application will be made to theLondon Stock Exchange for the New SSP Shares to be admitted to trading on AIM. This announcement does not constitute an offer to sell or an invitation topurchase or subscribe for any securities or a solicitation of any vote orapproval in any jurisdiction. This announcement does not constitute a prospectusor a prospectus equivalent document. Sirius Shareholders are advised to readcarefully the formal documentation in relation to the Proposals once it has beendespatched. In particular, this announcement is not an offer of securities for sale in theUnited States and the New SSP Shares, which will be issued in connection withthe Proposals, have not been, and will not be, registered under the SecuritiesAct or under the securities law of any state, district or other jurisdiction ofthe United States, Australia, Canada or Japan and no regulatory clearance inrespect of the New SSP Shares has been, or will be, applied for in anyjurisdiction other than the UK. The New SSP Shares may not be offered or sold inthe United States absent registration under the Securities Act or an exemptionfrom registration. It is expected that the New SSP Shares will be issued inreliance upon the exemption from the registration requirements of the SecuritiesAct provided by Section 3(a)(10) thereof. Under applicable US securities laws,Sirius Shareholders (whether or not US persons) who are or will be "affiliates"of Sirius or SSP prior to, or of SSP after, the Effective Date will be subjectto certain transfer restrictions relating to the New SSP Shares received inconnection with the Scheme. APPENDIX 2 Bases and Sources1 Unless otherwise stated: financial information relating to SSP has been extracted or derived (without any adjustment) from the Admission Document for SSP dated 27 September 2006, the unaudited interim results for the six months ended 30 September 2006 and the SSP trading update of 16 April 2007 (which is unaudited); and financial information relating to Sirius has been extracted or derived (without any adjustment) from the audited annual report and accounts for Sirius for the year ended 31 December 2005 and the audited preliminary results for the year ended 31 December 2006. 2 The value of Sirius based on the Proposals is calculated: by reference to a price of 142.5 pence per SSP Share (being the Closing Price of a SSP Share on 4 May 2007, the last Business Day prior to the date of this announcement); and on the basis of the fully diluted number of Sirius Shares in issue referred to in paragraph 4 below. 3 In accordance with Rule 2.10 of the City Code, SSP confirms that as at the close of business on 4 May 2007, the last Business Day prior to the date of this announcement, SSP had in issue 71,662,762 SSP Shares (ISIN GB00B1D3Q599); and Sirius had in issue 17,598,594 Sirius Shares (ISIN GB0002940525). 4 The fully diluted share capital of Sirius (being 18,486,731 Sirius Shares) is calculated on the basis of: the number of issued Sirius Shares on 4 May 2007, the last Business Day prior to the date of this announcement, being 17,598,594 Sirius Shares; and the 888,137 "in the money" options outstanding under the Sirius Share Schemes on 4 May 2007, the last Business Day prior to the date of the announcement, and which are expected to become exercisable as a consequence of the Proposals. This amount includes 223,788 options granted under the SAYE Scheme, being the maximum number of such options that can be exercised into SSP Shares on the assumption that the holders of options granted under the SAYE Scheme continue to make contributions to their savings accounts up to the last date possible for exercise (being six months following the date that the Court sanctions the Scheme). 5 The premium calculations to the price per Sirius Share in this announcement have been calculated by reference to the Closing Price of 142.5 pence of a SSP Share, being the Closing Price on 4 May 2007, the last Business Day prior to the date of this announcement. 6 The percentage that Sirius Directors will be interested in, in aggregate, of SSP's enlarged issued ordinary share capital is calculated on the following basis: by reference to SSP's existing issued ordinary share capital of 71,662,762 SSP Shares; by reference to Sirius' fully diluted share capital, as referred to in paragraph 4 above; and by reference to the Placing Shares. APPENDIX 3 DEFINITIONS In this announcement, the following definitions apply unless the contextrequires otherwise: "Admission" admission of New SSP Shares to trading on AIM in accordance with AIM Rules "AIM" the AIM Market operated by the London Stock Exchange "AIM Rules" the AIM Rules for companies published by the London Stock Exchange relating to companies whose securities are admitted to trading on AIM "Australia" the Commonwealth of Australia, its territories and possessions "Business Day" any day on which banks are generally open in England and Wales for the transaction of general banking business, other than a Saturday, Sunday or public holiday "Canada" Canada, its provinces and territories and all areas subject to its jurisdiction or any political sub-division thereof "Capital Reduction" the proposed reduction of share capital of Sirius pursuant to the Scheme "City Code" the City Code on Takeovers and Mergers issued from time to time by or on behalf of the Panel "Close Brothers" Close Brothers Corporate Finance Limited "Closing Price" the closing middle market price of a relevant share as derived from the Daily Official List "Companies Act" the Companies Act 1985 (as amended or re-enacted) "Conditions" the conditions to the Proposals set out in Appendix 1 to this announcement "Court" the High Court of Justice in England and Wales "Court Hearing" the hearing by the Court of the petitions to sanction the Scheme and to confirm the Capital Reduction provided for by the Scheme under section 137 of the Companies Act "Court Order" the order of the Court sanctioning the Scheme under section 425 of the Companies Act and confirming the Capital Reduction "Court Sanction" the sanction (with or without modification) of the Scheme and confirmation of the associated Capital Reduction by the Court "Daily Official List" the Daily Official List of the London Stock Exchange "Dealing Day" a day on which the London Stock Exchange is open for business in the trading of securities admitted to AIM "Deloitte Corporate Finance" a division of Deloitte & Touche LLP of Stonecutter Court, 1 Stonecutter Street, London, EC4A 4TR "Effective" in the context of the Proposals: (i) if the Proposals are implemented by way of the Scheme, the Scheme having become effective pursuant to its terms; or (ii) if the Proposals are implemented by way of the Offer, the Offer having been declared or become unconditional in all respects in accordance with the requirements of the City Code "Effective Date" the date on which the Proposals becomes Effective "Enlarged Group" with effect from the Effective Date, the combined SSP Group and Sirius Group "FSA" the UK Financial Services Authority "FSMA" the Financial Services and Markets Act 2000 (as amended) "IFA" Independent Financial Adviser "Hearing Date" the date of commencement of the Court Hearing "Hearing Record Time" 6:00 pm on the Business Day immediately preceding the Hearing Date "Japan" Japan, its cities, prefectures, territories and possessions "KBC Peel Hunt" KBC Peel Hunt Ltd "London Stock Exchange" London Stock Exchange plc "New SSP Shares" the SSP Shares proposed to be issued and credited as fully paid pursuant to the Proposals and the Placing "Offer" should the Proposals be implemented by way of a takeover offer as defined in Chapter 3 of Part 28 of the Companies Act 2006, the recommended offer to be made by or on behalf of SSP to acquire the entire issued and to be issued ordinary share capital of Sirius and, where the context admits, any subsequent revision, variation, extension or renewal of such offer "Offer Document" should the Proposals be implemented by means of the Offer, the document to be sent to Sirius Shareholders which will contain, inter alia, the terms and conditions of the Offer "Overseas Shareholders" Scheme Shareholders who are resident in, ordinarily resident in, or citizens of, jurisdictions outside the United Kingdom "Panel" the Panel on Takeovers and Mergers "Placing" the conditional fully underwritten placing by KBC Peel Hunt of the Placing Shares pursuant to the Placing Agreement "Placing Agreement" the agreement dated 7 May 2007 between SSP and KBC Peel Hunt relating to the Placing "Placing Price" 140 pence per Placing Share "Placing Shares" the 3,583,140 New SSP Shares that are intended to be issued pursuant to the Placing "Pounds", "pence" and "£" the lawful currency of the United Kingdom "Proposals" the proposed recommended cash and share acquisition by SSP of the entire issued and to be issued ordinary share capital of Sirius by way of the Scheme and the other matters relevant thereto to be considered at the Scheme Meeting and the Sirius Extraordinary General Meeting and related arrangement (or if SSP so elects, with the consent of the Panel, to be implemented by a takeover offer) "Registrar of Companies" the Registrar of Companies in England and Wales, within the meaning of the Companies Act "Scheme" the proposed scheme of arrangement under section 425 of the Companies Act between Sirius and the Sirius Shareholders to implement the Proposals with or subject to any modification, addition or condition approved or imposed by the Court and agreed by SSP and Sirius "Scheme Document" the document to be posted to Sirius Shareholders proposing the Scheme "Scheme Meeting" the meeting or meetings (and any adjournment thereof) of Sirius Shareholders (or the relevant class or classes thereof) as may be convened by order of the Court under section 425 of the Companies Act to consider and, if thought fit, approve the Scheme (with or without amendment) "Scheme Record Time" 6.00 p.m. on the Business Day immediately before the Scheme becomes Effective "Scheme Shareholders" holders of Scheme Shares "Scheme Shares" (i) the Sirius Shares in issue at the date of the Scheme Document; (ii) any Sirius Shares issued after the date of the Scheme Document and before the Scheme Voting Record Time; and (iii) any Sirius Shares issued at or after the Scheme Voting Record Time and before the Scheme Record Time on terms that the original or any subsequent holders thereof shall be bound by the Scheme or in respect of which the holders thereof shall have agreed in writing to be bound by the Scheme at the relevant date, in each case other than Sirius Shares beneficially owned by the SSP Group "Scheme Voting Record Time" 6.00 p.m. on the day which is two days before the Scheme Meeting or, if the Scheme Meeting is adjourned, 6.00 p.m. on the second day before the date of such adjourned meeting "Securities Act" the US Securities Act of 1933, as amended, and the rules and regulations promulgated there under "Sirius" Sirius Financial Solutions PLC, registered in England and Wales (company number 03273649) "Sirius Approved Scheme" the Policymaster Group Executive Share Option Scheme adopted in June 1998 "Sirius Board" the board of directors of Sirius "Sirius Directors" the directors of Sirius "Sirius EMI Scheme" the Sirius Executive Management Incentive Scheme (and scheme rules as amended in April 2006) together with a pro forma Option Agreement "Sirius Extraordinary General the extraordinary general meeting ofMeeting" Sirius (and any adjournment thereof) as may be convened for the purposes of considering and, if thought fit, approving certain resolutions in connection with the Scheme "Sirius Group" Sirius and its subsidiary and associated undertakings "Sirius SAYE Scheme" the Policymaster Group Savings-Related Share Option Scheme adopted in June 1998 "Sirius Shareholders" holders of Sirius Shares "Sirius Share Schemes" the Sirius Approved Scheme, the Sirius Unapproved Scheme, the Sirius SAYE Scheme and the Sirius EMI Scheme "Sirius Shares" ordinary shares of 1 pence each in the capital of Sirius "Sirius Unapproved Scheme" the Policymaster Group Unapproved Executive Share Option Scheme adopted in June 1998 "Special Resolution" the special resolution to be proposed at the Sirius Extraordinary General Meeting relating to the Scheme "SSP" SSP Holdings PLC, registered in England and Wales (company number 5247843) "SSP Board" the board of directors of SSP "SSP Directors" the directors of SSP "SSP Group" SSP and its subsidiary undertakings "SSP Shareholders" the holders of SSP Shares "SSP Shares" ordinary shares of 0.1 pence each in the share capital of SSP "subsidiary", "subsidiary have the meanings ascribed to them underundertaking", "associated the Companies Actundertaking" and "undertaking" "UKLA" the UK Listing Authority, being the Financial Services Authority acting in its capacity as the competent authority for the purposes of Part IV of FSMA "United Kingdom" or "UK" United Kingdom of Great Britain and Northern Ireland "United States", "US" or "USA" the United States of America, its territories and possessions, any State of the United States of America and the District of ColumbiaUnless otherwise stated, all times referred to in this announcement arereferences to London time. This information is provided by RNS The company news service from the London Stock Exchange
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