TAU.L Regulatory News (TAU)

TAU CAPITAL PLC

(the "Company" or "Tau")

RESULT OF TENDER OFFER AND INVESTMENT UPDATE

TENDER OFFER

Tau Capital PLC announces the result of the Tender Offer announced on 18 September 2013.

A total of 97,291,080 shares were tendered under the Tender Offer. As a result, the Basic Entitlement of all Shareholders who have validly tendered their shares will be accepted in full and excess tenders will be satisfied to the extent of approximately

2.97 per cent. of the excess shares tendered. Therefore 32,360,364 shares will be repurchased at USD 0.460965 per share by the Company under the Tender Offer and subsequently cancelled.

Payment of the consideration due to Shareholders whose tenders under the Tender Offer have been accepted is expected to be despatched (by cheque or by a CREST payment, as appropriate) on or around 23 October 2013. Balance certificates will be despatched in respect of tendered shares that were not accepted to the Tender on or around 23 October 2013.

Following the implementation of the Tender Offer and the cancellation, the Company will have 73,983,659 Shares in issue.

Terms used in this announcement shall, unless the context otherwise requires, bear the meaning given to them in the Circular.

INVESTMENT UPDATE

An update on Stopharm LLP ("Stopharm") for the six months ended 30 June 2013 as obtained from Stopharm's management is as follows (all figures are unaudited):

During the first half of 2013 Stopharm LLP earned revenues of US$119.23 million compared to US$140.4 million in the first half of 2012. A substantial portion of the revenue decrease in H1 2013 compared to H1 2012 was a result of a timing issue of goods shipped to SK Pharma prior to the close of H1 2012 and overall lower government sales as a result of the SK Pharma tender compared to the same period in 2012. Actual revenues of US$119.23 million exceeded budgeted revenues of US$110.3 million by 8.1% and the efforts to increase private sector pharmaceutical sales are in line with management forecasts. Stopharm's management reports that the results of the 2014 SK Pharma tender are largely in line with their projections for 2014, which Stopharm's management believes will result in continued growth in revenue as compared to 2013 on a year on year basis.

Unaudited Net Profit for the first half of 2013 was US$2.03 million, which exceeded forecast Net Profit by 11%. Stopharm paid Tau a cash dividend of approximately $1.7 million in July 2013.

The Board of Tau is continuing to work closely with its Investment Adviser, Capitalgate Securities Ltd, to realise the value of its remaining private equity investments, in particular Stopharm which, after the completion of the third tender offer, will represent approximately 63% of the Company's Net Asset Value. A consortium representing the majority shareholders of Stopharm (who hold 57% of Stopharm) engaged VISOR Capital in the 3rd quarter of 2012 to organise the sale of their shareholdings. Their decision to sell came at a time when the government procurement agency was also reorganized which resulted in decreased government orders to Stopharm. As of the date of this announcement the majority shareholders have not sold their interests in Stopharm.

The Board of Tau recognises that the immediate sale of Stopharm, if it were possible, would possibly be at a value below the Company's current carrying value of Stopharm. However if the business would be further enhanced through the development of the private sector pharmaceutical sales and the launch of a non-pharmaceutical logistics business in addition to the pharmaceutical distribution business, a higher value could be obtained. The Investment Advisor has identified potential new shareholders who are interested in purchasing the majority shareholders' interest in Stopharm. These potential new shareholders would provide synergies, both in terms of partnership in the logistics business and injections of capital. Discussions between VISOR Capital and the potential new shareholders are understood to be ongoing. If such a sale were to occur, Tau would retain its interest in Stopharm in order to be able to realize value from the development of the private sector pharmaceutical sales and of the new non-pharmaceutical logistics business division of Stopharm. However there are no assurances that such a sale by the majority shareholders of Stopharm will occur at this time. If the sale does not occur then Tau will continue to implement its investing policy of disposing of the portfolio by July 2014, subject to the discretion to extend this date if it was in the best interests of shareholders to do so.

With regard to Lucent Petroleum, its management continues to seek an investor to provide capital to continue the drilling programme. During the first half of 2013 three additional potential investors commenced due diligence on the seismic information that was completed during the first quarter of 2013.

The Tau Board is also looking to reduce costs further. With effect from 1 January 2014 the aggregate fee of the Tau Board Directors will be reduced by 40% by a reduction of the number of Directors from 5 to 3 and lower fees for individual directors. Richard Horlick will retire from the Board but will remain a key advisor to the Company. Graham Smith will also resign from the Board. Company contracts with third parties are in the process of being evaluated with an aim of futher reducing cost.

NAV

The Board is pleased to advise that, following consultation with its Investment Adviser, the estimated Net Asset Value ("NAV") as at close of business on 30th September 2013 is US$ 0.46 per share.

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