TEG.L Regulatory News (TEG)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS IN THAT JURISDICTION

This announcement does not constitute an announcement of a firm intention to make an offer under Rule 2.7 of the Takeover Code. There can be no certainty that an offer will ultimately be made.

TEG Group Plc

("TEG" or "the Company")

Commencement of formal sale process

Following the statement announced on 23 January 2012 regarding the share price movement ('Announcement') the Board has received a significant number of preliminary expressions of interest from potential purchasers and as a result the Board has decided it should conduct a formal sale process in order to explore these and any further potential expressions of interest alongside the alternative strategic options referred to below.

Whilst the Board firmly believes that the Company has a secure future as an independent business, it recognises that there is potential interest from organisations that could help the business by providing investment to strengthen the Company's balance sheet and provide assistance to secure future projects. They believe that this support could significantly accelerate the Company's growth to take advantage of the opportunities in the waste market.

In addition to the formal sale process the Board are also considering a number of other alternative investment structures including investment at the operating company and project level and is in discussion with other potential investors.

Potential offerors for the entire issued and to be issued share capital of the Company are invited to contact KPMG Corporate Finance (contact details are provided below).

The Takeover Panel has granted a dispensation from the requirements of Rules 2.4(a), 2.4(b) and 2.6(a) of the Takeover Code (the "Code") such that any interested party participating in the formal sale process will not be required to be publicly identified as a result of this announcement (subject to note 3 to Rule 2.2. of the Code) and will not be subject to the 28 day deadline referred to in Rule 2.6(a), for so long as it is participating in the formal sale process. Interested parties should note Rule 21.2 of the Code, which will prohibit any form of inducement fee or other offer-related arrangement, and that the Company has not requested any dispensation from this prohibition under Note 2 of Rule 21.2 at this stage.

The Company proposes to conduct the formal sale process in the following manner. Any interested party who approaches KPMG Corporate Finance will be required to enter into a non-disclosure agreement with the Company on reasonable terms satisfactory to the Board and on the same terms, in all material respects, as the other interested parties, before being permitted to participate in the process. The Company intends to release an information memorandum shortly to all participants who have entered into such non-disclosure agreements with the Company. It is intended that any participant who is taken forward to the next phase of the formal sale process will be given access to a data room and management presentations.

The Board reserves the right to alter any aspect of the sale process as outlined above or to terminate it at any time and in such cases will make an announcement as appropriate.

The Board reserves the right to reject any approach or terminate discussions with any interested party or participant at any time. There can be no certainty that any offer will be made for the Company, or even proposed, or as to the level of any proposal or offer that may be made.

Following the Announcement, Bridges Ventures LLP has confirmed to the Board and its advisers that, in accordance with Rule 2.8 of the Code, it does not intend to make an offer for TEG. Bridges Ventures LLP has authorised TEG to make this announcement on its behalf.

Rule 2.10 disclosure

In accordance with Rule 2.10 of the Code, the Company confirms that it has 117,439,360 ordinary shares of 5p each in issue. The International Securities Identification Number (ISIN) for these shares is GB0002504529.

For further information please contact:

KPMG Corporate Finance, a division of KPMG LLP which is authorised and regulated by the Financial Services Authority for investment business activities, is acting for the Company as financial adviser in relation to the possible offer for the Company and is not acting for any other person in relation to such possible offer for the Company. KPMG Corporate Finance will not be responsible to anyone other than Company for providing the protections afforded to its clients or for providing advice in relation to the contents of this document or any possible offer for the Company or arrangement referred to herein.

Brewin Dolphin Limited ("Brewin Dolphin"), which is authorised and regulated by the Financial Services Authority is acting for the Company as financial adviser and broker in relation to the possible offer for the Company and is not acting for any other person in relation to such possible offer for the Company. Brewin Dolphin will not be responsible to anyone other than Company for providing the protections afforded to its clients or for providing advice in relation to the contents of this document or any possible offer for the Company or arrangement referred to herein.

Disclosure requirements of the Takeover Code (the "Code")

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.

Publication on website

A copy of this announcement will be made available on the Company's website www.theteggroup.plc.uk.

For the avoidance of doubt, the content of the website referred to above is not incorporated into and does not form part of this announcement.