Tavistock Regulatory News (TAVI)

TAVISTOCK INVESTMENTS PLC

Proposed Acquisition of County Life & Pensions Limited

Proposed Acquisition of Blacksquare Limited

1 for 100 consolidation of Ordinary Shares

Placing of 10,000,000 New Ordinary Shares at 7.5 pence per share

Waiver of Rule 9 of the City Code on Takeovers and Mergers

15 May 2014

Tavistock Investments Plc ("Tavistock" or "Company") is pleased to announce that it has entered into conditional contracts for the purchases of County Life & Pensions Limited ("County"), an independent financial advisory business, and Blacksquare Limited ("Blacksquare"), an investment management business (the "Acquisitions"). Both County and Blacksquare are regulated by the FCA.

The Company also announces that it has conditionally raised an additional £750,000 of working capital through a placing of 10,000,000 new ordinary shares of 1p each ("Placing Shares") at a subscription price of 7.5 pence per share ("Placing Price").

In view of the size of the Acquisitions relative to the Company, they will constitute a reverse takeover of Tavistock under the AIM Rules for Companies and therefore require the approval of Shareholders which is being sought at a general meeting to be held on 30 May 2014 ("General Meeting"). Application will be made for the enlarged share capital of the Company to be admitted to trading on AIM, subject to the passing of the resolutions to be proposed at the General Meeting ("Admission").

History

On 29 July 2013, shareholders approved the fundamental restructuring of the Company which included the disposal of the Company's historic business in the software sector, a change of name to Tavistock Investments Plc, the adoption of a new investment policy and the introduction of £200,000 of new working capital. Subsequently, the Company raised an additional £230,000 of working capital through a further placing of shares.

The Company announced its results for the year ended 31 December 2013 on 12 May 2014 and has sent copies of the full audited accounts to shareholders, together with an admission document prepared in connection with the Acquisitions, and a copy of both will be available from the Company's website, www.tavistockinvestments.com. These accounts included the trading period prior to 29 July 2013 and for the year the Company reported a loss before and after taxation of £516,000 on turnover of £176,000.

Strategy

The objective of the Company is to create a large, profitable and highly rated business in the financial services sector and for shareholders to achieve significant capital appreciation from the profitable growth of a business that combines both financial advisory and investment management services.

The underlying rationale is that the market rating attributable to companies engaged in both of these service areas is significantly higher than the rating attributable to companies engaged in just one of them.

Much of the Company's growth is likely to be driven by acquisition activity, however, once businesses in each of the two aforementioned service areas have been acquired there will be significant opportunity for organic growth.

Since July 2013, the initial focus has been to agree terms for the acquisition of an established, profitable, privately owned advisory business that can become the cornerstone of a national network of, predominantly self-employed, financial advisers. It is important that any such business has an established investment process and sound compliance procedures. Ideally, the business will already provide clients with both model portfolio and bespoke investment solutions and be led by a management team that is committed to working with Tavistock to fully exploit opportunities for growth over at least the next three years. The Board believes that County satisfies all of these criteria.

Upon its introduction in January 2013, the retail distribution review ("RDR"), required IFAs to:

· move from earning product commissions to the transparent charging of advisory fees;

· achieve a higher standard of professional qualifications;

· conform to stricter compliance standards; and

· maintain increased levels of regulatory capital.

There are currently over 10,500 financial advisory firms regulated by the Financial Conduct Authority in the UK and some 95 per cent. of these firms employ 10 or fewer advisers. Fewer than 1 per cent. of firms employ more than 20 advisers. Upon readmission, the enlarged group will be amongst the largest 1 per cent. of all advisory firms. Many smaller firms have found the new regulatory requirements to be extremely challenging and are consequently interested in joining the "safe haven" of a larger, respected firm or network. The Board's strategy is to complete the initial acquisition of County, as described above, and to use the acquired company as a platform for attracting many more advisers to join our branded network under a multi-year contract whereby we guarantee to buy-out their business at a future date provided they conform to our investment and compliance methodology and achieve a minimum level of recurring revenue.

Once terms had been agreed for the acquisition of a suitable advisory business, the Board also wanted to acquire an investment firm with the appropriate permissions to operate as a discretionary fund manager. Such a company would be responsible for developing and operating the Company's centralised investment proposition, managing a range of risk-rated model portfolios for clients of the advisory division and either itself providing, or sourcing, bespoke investment services for clients as appropriate. The Directors believe that this would enable the Company both to provide a lower cost solution to clients, and to retain income that would otherwise be paid away to third parties for investment services. The net effect would be to potentially double the net revenue earned from each client.

The aim of the Company is to acquire credible capacity in this area as cost effectively as possible and thereafter to increase the volume of business (the level of funds under management) by providing the services described above to the rest of the enlarged group on a more effective and cost efficient basis than that offered by independent third parties. As the business expands Tavistock may also seek to acquire additional discretionary fund manager ("DFM") operations.

An integrated business model would thus be created offering financial advice, model portfolio and discretionary investment management, estate planning, pensions and retirement planning, employee benefits, insurance and mortgages to both private and corporate clients.

Proposed Acquisitions

County: 

County is the group holding company operating the Sterling McCall wealth management network. The Sterling McCall business was established in 2003 by its three principals, Steve Moseley, Kevin Mee and Paul Millott. It is headquartered in Kegworth, Derbyshire, and has a second office in Grimsby, South Yorkshire. County is regulated by the FCA with FRN 449607.

As at 31 January 2014, the business had 23 financial advisers, over 2,500 active clients and some £300 million of funds under advice, of which some £125 million is currently managed on platforms by a selected panel of DFMs.

In the year ended 31 December 2013, County reported a profit before taxation of £482,959 on turnover of £2,771,803. As at 31 December 2013, County had net assets of £221,333

Advisers within the Sterling McCall network provide both private and corporate clients with financial advice, model portfolio and discretionary investment management, estate planning, pensions and retirement planning, insurance protection and mortgages.

In the view of the Directors, the key attributes of the Sterling McCall network are:

· the cost effectiveness of its centralised investment proposition which brings the benefits of discretionary management within the reach of the mass affluent market;

· that same process also offers advisers the means to increase profitability because they do not spend time selecting specific investments for clients (which is not their area of expertise anyway); and

· the business model is rapidly scalable.

In summary, Sterling McCall has established a respected network, built an attractive brand, and developed sound investment and compliance processes. In the opinion of the Directors, the business is well positioned to capitalise on the perceived current opportunity to satisfy the desire of many advisers to join a respected network and thereby relieve the regulatory pressure they are under.

The company has developed proprietary software that will enable its advisers to conduct fact finds and risk assessments and to undertake the know-your-client process for new clients on a paperless basis. It is the view of the Directors that this software, together with the company's centralised compliance and investment management processes, provide an opportunity to develop a substantially paperless infrastructure to manage client relationships, compliance and investment management. Such a template has the potential to be the launch pad from which to develop a significantly larger, national business.

Sterling McCall has also registered discretionarydirect.co.uk with the intention of providing an online service enabling clients to choose inexpensive tax wrappers (e.g. SIPPs and ISAs) and an investment strategy that matches their attitude to risk, without the cost and complexity of requiring advice. It is currently envisaged that such a service could be launched within 18 months.

Blacksquare:

Blacksquare was established in 2005 by Christopher Peel. Initially, Blacksquare operated as an unregulated, offshore, fund of hedge fund manager. Its first product, the Blacksquare Capital Access Fund successfully navigated the "armageddon" period when the global recession hit and during which, for example, the FTSE 100 fell by 43 per cent. between October 2007 and February 2009. By contrast, the maximum drawdown of the Access Fund was 5.3 per cent. between May 2007 and August 2007 from which the Fund recovered to return growth of 3.2 per cent. for that year. In fact the Fund never had a down year from its inception in early 2006 until it was closed in 2011.

Despite this success, when many of the funds run by Blacksquare's competitors were "gated" or suspended (thus preventing investors from withdrawing capital), the Access Fund was subjected to very substantial redemption requests. The decision was therefore taken to convert the business model and to run an onshore, regulated version of the offshore strategy where it was envisaged by the principals that market conditions would be more stable.

Consequently the business, which is based in Windsor, is now authorised and regulated by the Financial Conduct Authority with FRN 568089 and manages the Acumen Defensive Portfolio. This product aims to deliver positive absolute returns that are uncorrelated to equity or bond markets. In 2012 the Portfolio returned growth of 5.5 per cent. However, having been unable to replicate earlier success in securing significant institutional funds to manage, Blacksquare is currently loss making. It is intended that following completion of the Acquisitions, Tavistock will inject additional capital into Blacksquare to cover its ongoing regulatory and working capital requirements.

The intention now is for Blacksquare to apply its skills, experience and proprietary portfolio models, to managing centralised investment solutions (model portfolios) for the clients of financial advisory firms. Blacksquare already has the necessary regulatory permissions to operate as a DFM.

In the year ended 31 December 2013 Blacksquare reported a loss before and after taxation of £408,798 on turnover of £177,029. At 31 December 2013 Blacksquare had net liabilities of £133,157. The Directors anticipate that Blacksquare will return to profitability relatively quickly as a consequence of it being appointed as the DFM for clients of the enlarged group's advisory division.

Terms of the Acquisitions

County

The Company has agreed, conditional, inter alia, upon Admission, to acquire the entire issued and to be issued share capital of County for a consideration of £7,350,000 to be satisfied in full by the issue of 98,000,000 new ordinary shares of 1p each ("New Ordinary Shares") at a price of 7.5 pence per share ("Consideration Shares"). The Sterling McCall business is operated through County, as the FCA regulated entity, and its wholly owned subsidiary Sterling McCall Limited which is an appointed representative of County and the company with which all of County's independent financial advisers have their adviser agreements.

The Consideration Shares will represent 81.2 per cent. of the enlarged share capital of the Company. The Consideration Shares, when issued, will rank pari passu in all respects with the New Ordinary Shares arising on the proposed consolidation of the existing ordinary shares of 0.01p each ("Ordinary Shares") into New Ordinary Shares ("Consolidation").

Blacksquare

The Company has agreed, conditional, inter alia, upon Admission, to acquire the entire issued and to be issued share capital of Blacksquare for an initial consideration of £1, payable in cash, and a deferred consideration that is payable by 30 June 2016. The value of the deferred consideration will be determined by reference to the level of funds under management by Blacksquare on 31 May 2016. For the first £100 million of funds under management at that date the Blacksquare vendors will receive 0.95 per cent. of the value and for all funds under management above that level the Blacksquare vendors will receive 0.75 per cent. of the value. The deferred consideration will be satisfied in full through the issue to the Blacksquare vendors of New Ordinary Shares at the Placing Price. Shareholders should note that the Blacksquare deferred consideration is not subject to any upper limit and accordingly it is possible that upon the issue of the New Ordinary Shares due in satisfaction of the Blacksquare deferred consideration, which must take place by no later than 30 June 2016, the Blacksquare Concert Party (details of which are set out below) may acquire an interest in shares which carry 30 per cent. or more of the voting rights of the Company and accordingly incur an obligation to make a mandatory bid in accordance with Rule 9 of the City Code on takeovers and Mergers ("City Code").

The Placing

The Company has conditionally raised £750,000, before expenses, by way of a placing of 10,000,000 New Ordinary Shares at the Placing Price. The Placing Shares will represent approximately 8.3 per cent. of the Enlarged Share Capital.

The Placing, which has been partially underwritten, is conditional, inter alia, upon Admission.

Brian Raven, chief executive of the Company, has agreed to subscribe for 1,302,089 Placing Shares. Additionally, Oliver Cooke and Brian Raven have entered into an agreement with the Company pursuant to which they have underwritten the issue of up to 3,333,334 Placing Shares ("Underwritten Shares") and, should other investors not subscribe for these shares in the interim, they will acquire the Underwritten Shares at the Placing Price by no later than 31 August 2014. In consideration for entering into the underwriting agreement Oliver Cooke and Brian Raven will each receive an underwriting fee of £12,500 satisfied by the issue of 166,667 New Ordinary Shares.

The Company will apply for the New Ordinary Shares, other than the Underwritten Shares, to be admitted to trading with effect from 2 June 2014 and will apply for the Underwritten Shares to be admitted to trading by no later than 5 September 2014

The proceeds of the Placing will be utilised to provide ongoing working capital for the enlarged group.

The Placing Shares, when issued, will rank pari passu in all respects with the New Ordinary Shares arising on the Consolidation.

Directors and Proposed Senior Management

Directors

Oliver Cooke, Executive Chairman

Oliver has over 30 years of financial and business development experience gained in a range of quoted and private companies including over ten years' experience as a Public Company Director. He has considerable experience in the fields of acquisitions, disposals, fundraisings, turnarounds, restructurings and strategic transformation. He serves as a Non-Executive Director of Peterhouse Corporate Finance Limited. Oliver is a Chartered Accountant and Fellow of the Association of Chartered Certified Accountants.

Brian Raven, Group Chief Executive

Brian Raven is Chairman of Blacksquare and has been involved in the financial services sector since 2010. He has a wide range of business experience, having held many sales and general management posts at senior management and board level, including running public companies on both AIM and the Official List. Most notably, in 1991 Brian founded Card Clear Plc, subsequently renamed Retail Decisions plc, a business engaged in combating the fraudulent use of plastic payment cards. He led the company until 1998 by which time it was an international group, listed on AIM, with a market capitalisation of some £100 million. As a principal, Brian has been responsible for identifying, negotiating and integrating numerous acquisitions, as well as for delivering organic growth.

Roderic Rennison, Non-executive Director

Roderic Rennison has spent more than 35 years in financial services encompassing a variety of roles including sales, strategy, product development, proposition, operations and latterly acquisitions, mergers, and integrations together with corporate affairs, risk and regulatory matters. He provides consultancy services in the financial services sector to a range of providers, fund managers and intermediaries and particularly specialises on RDR, for which he chaired the professionalism and reputation work stream within the Financial Services Authority. Roderic is a member of the Chartered Insurance Institute's Disciplinary Committee, having previously been a member of its Professional Standards Board and Executive Board.

Philip Young, Non-executive Director

Following completion of his law degree and Diploma in Legal Practice, Philip began his career in 1996 at a small financial consultancy business specialising in complex regulatory issues, CCL, in Macclesfield. Phil moved to Bankhall Investment Associates Ltd in 1998, where he worked initially in the compliance area, then moved to become Commercial Manager for Bankhall's e-commerce department. In 2003 he set up threesixty services LLP and threesixty support LLP, with a number of colleagues, and became an equity partner. threesixty has grown to become one of the most significant forces in adviser support in the UK, providing professional business services to over 700 firms with more than 7000 advisers. threesixty was sold to Standard Life Plc in 2010, after which Philip was appointed Managing Director and continues to run the business today.

Proposed Senior Management

Christopher Peel, Proposed Chief Investment Officer

Christopher Peel is the founder and Chief Executive of Blacksquare. He has more than 25 years' experience in financial markets and began his career with Citibank in London before spending 11 years with Salomon Brothers International working with both traditional and alternative asset management companies. In 2003 he joined FIM Limited, a specialist alternative asset management group, where he was responsible for all fixed income investments which included allocations to government security, investment grade credit, high yield and directional macro trading strategies. He then joined Cardinal Asset Management where he was a managing director in the hedge fund business and was responsible for all fixed income investments

Stephen Moseley, Proposed Business Development Director, Advisory Business

Stephen Moseley has been involved in the financial services sector for over 20 years. In 1993, he joined United Friendly where he managed a team of financial advisers, as he did subsequently for both Britannic Assurance and IFA Connections. Stephen then established his own IFA practice in 2004, along with two others who are both still with the company. Having initially worked as an independent financial adviser until 4 years ago, Stephen has subsequently focused on building the County business through mergers and acquisitions. 

Share Consolidation

The Company currently has 1,228,916,168 Ordinary Shares in issue and the closing mid-market price on 14 May 2014 was 0.065 pence per share.

The Directors believe that in order to create a more orderly market in the Company's securities following Admission the Company's share capital should be consolidated on the basis of every 100 Existing Ordinary Shares held becoming 1 New Ordinary Share. Fractional entitlements to Consolidation Shares will not be issued but will be consolidated and sold for the benefit of the Company. Based upon the Company's shareholder register as at 12 May 2014 it is estimated that the fractional entitlements will amount to 75 New Ordinary Shares and fewer than 5 Shareholders will cease to hold an interest in the Company as a result of the Consolidation.

Admission to trading on AIM

As a consequence of the Acquisitions constituting a reverse takeover, the Company is required to apply for re-admission to AIM of the enlarged group. Therefore, application will be made for the New Ordinary Shares to be admitted to trading on AIM, subject to shareholder approval. It is expected that Admission will become effective and that dealings in the New Ordinary Shares, other than the Underwritten Shares, will commence on AIM at 8.00 a.m. on 2 June 2014 and that dealings in the Underwritten Shares will commence on AIM by no later than 8.00 a.m. on 5 September 2014 ("Second Admission").

Lock-ins and Orderly Market Agreements

In respect of the New Ordinary Shares held at Admission, each of the County Vendors has undertaken (in respect of himself and persons connected with him (within the meaning of section 252 of the Companies Act)) to the Company not to dispose of any interest in New Ordinary Shares until 1 January 2016, except in very limited circumstances.

Rule 9 of The City Code on Takeovers and Mergers

The Company is registered in England and Wales and Shareholders are protected under the City Code.

Under Rule 9 of the City Code, where any person acquires, whether by a single transaction or a series of transactions over a period of time, interests in securities which (taken together with securities in which he is already interested and in which persons acting in concert with him are interested) carry 30 per cent. or more of the voting rights of a company which is subject to the City Code, that person is normally required by the Panel to make a general offer to all the remaining shareholders of that company to acquire their shares. Similarly, when any person individually or a group of persons acting in concert, already holds interests in securities which in aggregate carry not less than 30 per cent. of the voting rights of such a company but does not hold shares carrying more than 50 per cent. of such voting rights, that person may not normally acquire further securities without making a general offer to the shareholders of that company to acquire their shares. An offer under Rule 9 must be made in cash and at the highest price paid by the person required to make the offer, or any person acting in concert with him, for any interest in shares of the company during the 12 months prior to the announcement of the offer.

Under the City Code, a concert party arises where persons acting together pursuant to an agreement or understanding (whether formal or informal and whether or not in writing) co-operate to obtain or consolidate control of the company. Control means an interest or interests in shares carrying in aggregate 30 per cent. or more of the voting rights of the company, irrespective of whether the holding or holdings give de facto control.

A. County Concert Party

The founders of County, Stephen Moseley, Kevin Mee and Paul Millott ("Concert Party"), are considered to be a concert party for the purposes of the City Code and immediately following Admission will be interested, in aggregate, in 72.9 per cent. of the issued share capital of the Company. As set out above, under the City Code the Concert Party would be obliged following Admission to make an offer in cash for the entire issued and to be issued share capital of the Company in which they do not have an interest.

Each of the three members of the Concert Party currently owns a one third share in County. However, as a result of the decision to award certain of County's independent financial advisers with an interest in the company prior to its acquisition by Tavistock as a bonus for their loyalty and performance, the Concert Party will be receiving in aggregate 85,505,733 of the 98,000,000 Consideration Shares, equivalent to 87.3 per cent. of the consideration payable for County.

Stephen Moseley

Details of Stephen Moseley are set out in the paragraph entitled "Directors and Proposed Senior Management" above.  

Kevin Mee

Kevin Mee began his career in 1992 with Royal London Insurance and he chose to remain in a client facing role throughout his career with them. He decided to leave Royal London in 2003 in order to start Sterling McCall with Paul Millott and Steve Moseley. He had also worked for many years with Mick Legg who later joined Sterling McCall to become Compliance Director.

Paul Millott

Paul Millott began his career in 1992 as a Sales Agent with The United Friendly Group which subsequently became Royal London Insurance and worked his way up through various management positions. Following redundancy in 2003 Paul became a self-employed Independent Financial Adviser and shortly after, along with Kevin Mee and Steve Moseley, decided to start Sterling McCall.

The business address of each of the members of the Concert Party is 1 The Cornerstone, Market Place, Kegworth, Derbyshire, DE74 2EE 

Upon Admission and Second Admission the interests of the Concert Party in the New Ordinary Shares will be:

The Takeover Panel has agreed to waive the obligation of the Concert Party to make a general offer that would otherwise arise as a result of receiving the Consideration Shares, subject to the approval of Shareholders, taken on a poll. Accordingly, resolution 2 is being proposed at the General Meeting to approve the Waiver and will be taken on a poll.

On completion of the Acquisitions, the Concert Party will hold more than 50 per cent. of the Company's voting share capital and may as a consequence be able to increase its aggregate shareholding in the Company without incurring any obligation under Rule 9 to make a general offer to the Company's other Shareholders. Under the Takeover Code, whilst each member of the Concert Party continues to be treated as acting in concert, each member will be able to increase further his respective percentage shareholding in the voting rights of the Company without incurring an obligation under Rule 9 to make a general offer to Shareholders to acquire the entire issued share capital of the Company. However, individual members of the Concert Party will not be able to increase their percentage shareholding through or between a Rule 9 threshold, without the consent of the Panel.

The members of the Concert Party are prohibited from disposing of their Consideration Shares until 1 January 2016 but, subject to the restrictions of the Takeover Code summarised above may increase their shareholdings.

B. Blacksquare Concert Party

The Blacksquare Vendors, further details of whom are set out below, and Oliver Cooke are considered to be a concert party for the purposes of the City Code ("Blacksquare Concert Party") and immediately following Admission will be interested, in aggregate, in 1.6 per cent. of the issued share capital of the Company.

The Blacksquare Vendors are:

Brian Raven

Details of Brian Raven, Group Chief Executive of Tavistock, are set out in the paragraph entitled "Directors and Proposed Senior Management" above.

Christopher Peel

Details of Christopher Peel, proposed Chief Investment Officer of Tavistock, are set out the paragraph entitled "Directors and Proposed Senior Management" above.

Benjamin Raven

Benjamin Raven works in the research and portfolio management department of Towry Limited. He began his career in the City as a junior analyst at Blacksquare Capital LLP in 2007 and resigned in July 2013. During the period at the firm he was promoted to head of research, co-manager of the Acumen Portfolios and had operational oversight of the Blacksquare Capital Access Fund. He holds a B.A. in Business Management from Leeds University.

Ajay Patel

Ajay Arvindray Patel is employed by Deutsche Bank in London and works on the fixed income and futures sales desk. He began his career in the City as a broker at Tullett Prebon in 2004. He joined Blacksquare Capital LLP as junior portfolio manager in January 2008 and resigned in August 2010. During this period at the firm he was a member of the investment committee and also provided sales and marketing support to the firm's partners.

The business address of all of the above is 5 Victoria Street, Windsor, Berkshire SL4 1HB.

St Margarets Trustees Limited

St Margarets Trustees Ltd is a trust company incorporated in England with the purpose of holding investments for Christopher Peel. The trustee of St Margarets Trustees is Charles Bartlett and the registered address of the company is 79 Cypress Avenue, London TW2 7JY.

As a result of their long standing and ongoing business relationship Mr Oliver Cooke and Mr Brian Raven are acting in concert for the purposes of the City Code and as a result Oliver Cooke has been included within the Blacksquare Concert Party.

Details of Oliver Cooke are set out in the paragraph entitled "Directors and Proposed Senior Management" above.

Upon Admission and Second Admission, assuming that Oliver Cooke and Brian Raven subscribe in full for the Underwritten Shares, the interests of the Blacksquare Concert Party in New Ordinary Shares will be: 

Following Admission, Oliver Cooke intends to transfer title to 5,000,000 of the 10,000,000 A Ordinary Shares he currently holds to Brian Raven. The 10,000,000 A Ordinary Shares will convert on 31 July 2016 into 10 per cent. of the issued ordinary share capital of the Company as enlarged by the conversion of the entire A Ordinary Share capital. As a result of this conversion and assuming no further issues of equity between Admission and conversion of the A Ordinary Shares into New Ordinary Shares (assuming that no Blacksquare deferred consideration is paid) the Blacksquare Concert Party will be interested in 18,604,589 New Ordinary Shares representing a maximum of approximately 13.9 per cent. of the then issued ordinary share capital and voting rights of the Company.

Under the terms of the Blacksquare Acquisition the initial consideration payable to the Blacksquare Vendors is £1 in cash. They will be entitled to receive a deferred consideration payable by 30 June 2016 based upon the assets under management within Blacksquare on 31 May 2016, satisfied by the issue of New Ordinary Shares at the Placing Price.

Given the Company's growth strategy and that the deferred consideration due to the Blacksquare Vendors is uncapped, the Directors are unable to estimate the funds that Blacksquare will have under management at 31 May 2016 and thus the value of the Blacksquare deferred consideration and the number of New Ordinary Shares to be issued in settlement of this sum. Should the issue of New Ordinary Shares as satisfaction of the Blacksquare deferred consideration cause the Blacksquare Concert Party to be interested, individually or in aggregate, in shares which carry 30 per cent. or more of the voting rights of the Company then the Blacksquare Concert Party will be obliged to make an offer to acquire all of those New Ordinary Shares they do not already own at that time.

Related Party Transactions

The acquisition of Blacksquare is deemed to be a related party transaction under the AIM Rules as Brian Raven, Group Chief Executive, is a vendor of Blacksquare. The Directors other than Brian Raven, having consulted with the Company's nominated adviser, Northland Capital Partners Limited, consider that the terms of the proposed acquisition of Blacksquare are fair and reasonable insofar as Shareholders are concerned.

The Underwriting Agreement is deemed to be a related party transaction under the AIM Rules as Oliver Cooke, Chairman, and Brian Raven, Group Chief Executive, are parties to it. The Directors other than Brian Raven and Oliver Cooke, having consulted with the Company's nominated adviser, Northland Capital Partners Limited, consider that the terms of the proposed acquisition of Blacksquare are fair and reasonable insofar as Shareholders are concerned.

For further information:

Tavistock Investments plc

Oliver Cooke, Executive Chairman Tel: 020 7469 0930

Nominated adviser and joint broker:

Northland Capital Partners Limited

William Vandyk Tel: 020 7382 1100

Joint broker:

Peterhouse Corporate Finance Limited

Jon Levinson/Lucy Williams/Duncan Vasey Tel: 020 7469 0930