Thg Regulatory News (THG)

THIS ANNOUNCEMENT AND THE INFORMATION HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, OUTSIDE OF THE UNITED KINGDOM, INCLUDING IN OR INTO AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS AND INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY SECURITIES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT ON THE BASIS OF INFORMATION TO BE CONTAINED IN THE PROSPECTUS.

Further, this announcement is for information purposes only and shall not constitute an offer to sell or issue or the solicitation of an offer to buy, subscribe for or otherwise acquire any new ordinary shares of Terrace Hill Group plc in any jurisdiction in which any such offer or solicitation would be unlawful. This announcement should be read in its entirety. In particular, you should read and understand the information provided in the 'Important Notice' section.

FOR IMMEDIATE RELEASE 28 April 2014

Terrace Hill Group plc ("Terrace Hill")

(to be re-named Urban&Civic plc)

Recommended acquisition of Urban&Civic and proposed Placing to raise £170 million through a placing of 75,555,556 Placing Shares at 225 pence per Share

Proposed admission to the standard listing segment of the Official List and to trading on the London Stock Exchange's Main Market for listed securities

SUMMARY

· The Board of Terrace Hill is pleased to announce that it has conditionally agreed to acquire (the "Acquisition") Urban&Civic, an unlisted property group founded in 2009 by Nigel Hugill and Robin Butler, which aims to deliver strategic residential land developments in key growth areas of the UK. The Acquisition will create a new UK real estate company (the "Enlarged Group") with a network of regional offices and a focus on large scale strategic residential holdings and commercial development opportunities across Central London and the UK's regions.

· The Enlarged Group also announces a proposed Placing to raise £170 million (before expenses) through a placing of 75,555,556 Placing Shares at 225p per share. No existing shareholders or directors are offering to sell Ordinary Shares pursuant to the proposed Placing.  

· Under the terms of the Acquisition, Terrace Hill will issue 43,084,456 consolidated Consideration Shares (equivalent to 430,844,560 2p shares in the Company), which values Urban&Civic at approximately £95.3 million based upon the mid-market closing price of 22.13p per Ordinary Share on 25 April 2014, being the Latest Practicable Date prior to the announcement of the Acquisition.

· Urban&Civic owns two large strategic residential land sites in the UK which, in aggregate, have a resolution to grant outline planning consent for 11,200 houses with a built out value (or GDV) estimated by Urban&Civic to be £2.7 billion (at current prices and assuming a build out of residential properties and the current market value of commercial property).

- The first is the 1,432 acre Alconbury Weald site near Huntingdon in Cambridgeshire which the Enlarged Group will seek to develop over the next 20 years and which already has a resolution to grant outline planning consent for 5,000 houses and 3.1 million sq. ft. of commercial space with a built out value (or GDV) estimated by Urban&Civic to be in excess of £1.3 billion (at current prices and assuming a build out of residential properties and the current market value of commercial property). The Enlarged Group expects to receive the required approvals to allow works to start in the third quarter of 2014 with residential delivery commencing in the second quarter of 2015.

- The second is a 50 per cent. interest in a 1,170 acre development site in Rugby which has been conditionally acquired and has outline planning permission for 6,200 houses and approx. 1.3 million sq. ft. of commercial development, with a built out value (or GDV) estimated by Urban&Civic to be in excess of £1.4 billion (at current prices and assuming a build out of residential properties and the current market value of commercial property) with the delivery of the first houses due to commence by the third quarter 2015.

· The Placing is being made in order to raise funds for the purpose of delivering a strategy of securing and profitably delivering major strategic land holdings and commercial developments. The objectives are to achieve a solid balance sheet, NAV growth and profits in order to pay a progressive dividend to Shareholders. Subject to the Placing becoming unconditional, the Net Proceeds will be used as follows:

- £50 million to develop further the sites at Alconbury Weald and Rugby;

- £30 million for current commercial developments; and

- the balance to purchase and develop pipeline opportunities.

Given the nature of the existing Terrace Hill pipeline, the equity capital to be applied to commercial developments could utilise additional debt capital to allow substantially larger investment than the equity committed on pre-let development schemes, potentially leading to a rebalancing of assets and income towards the commercial activities over the short term.

The Enlarged Group

· The Board of Terrace Hill believe that this combination of two established businesses with a clearly defined strategic direction will create a new "Best in Class" UK real estate company with a focus on large scale strategic residential holdings and commercial development opportunities across Central London and the UK's regions.  

· CBRE has valued the Alconbury site at £101 million and the Rugby site at £55 million (Urban&Civic's share: £27.5 million), which equates to £13,610 and £10,661 per residential plot respectively. The unaudited pro forma effect of the Acquisition, the Placing and the Rugby Acquisition on the net assets of the Terrace Hill Group, had they occurred on 31 December 2013 would be to increase net assets from £52.1 million (EPRA NAV per share: 27.0 pence) to £308.0 million (EPRA NAV per share: 23.2 pence).

· In addition to increased scale and a stronger balance sheet, providing the resources to both deliver the existing pipeline and make additional acquisitions, upon Completion the Enlarged Group will benefit from:

· A business strategy to secure and profitably develop:

- Large scale strategic residential land holdings in locations that benefit from strong transport links as well as robust local economies, with the primary purpose of selling serviced land plots to companies in the housebuilding industry. The Enlarged Group may also construct and deliver for sale private residential housing units itself with the aim of generating recurring cashflows in the longer term; and

- Commercial development/trading opportunities across Central London and the UK's regions under the Terrace Hill brand with a focus on foodstores, where it is a market leader, and leisure development;

· a management team with an outstanding track record in planning and metropolitan/local project management;

· complementary promotion and delivery skills to capture the upside development potential in the South East England and recovering regions;

· an ability to maintain a conservative capital structure, given the significant operating leverage in land;

· a substantial identified pipeline of opportunities and resolutions to grant planning consents for 19 million sq ft of buildable area obtained in the last five months;

· an intention to retain from its development activity selected commercial assets, private rental sector housing and affordable housing to establish a regular income base to cover overheads;

· a focus on income and growth to support a sustainable dividend with a target first dividend of approximately one per cent. of the Placing Price after a full year of trading, being the year ending 30 September 2015*; and

· a target internal rate of return on strategic land sites and commercial property development of 20 per cent. at the property level.

\* This is a target only and not a profit forecast. There can be no assurance that this target will be met or that the Company will make any distributions at all. 

· Following Completion the executive members of the board of directors of the Enlarged Group will be Nigel Hugill, Executive Chairman of Urban&Civic, as Executive Chairman; Robin Butler, Managing Director of Urban&Civic, as Managing Director; Philip Leech, Chief Executive of Terrace Hill, as Property Director and Jon Austen, Finance Director of Terrace Hill, as Finance Director. Robert Adair will become Non-Executive Deputy Chairman of the Enlarged Group. Alan Dickinson will serve as Senior Independent Non-executive Director. Alan is currently a non-executive director of Nationwide Building Society, Carpetright plc, Willis Limited and Brown Shipley & Co Limited (where he is also Chairman). Duncan Hunter, Robert Dyson and June Barnes will also serve as Independent Non-executive Directors while Mark Tagliaferri will be a Non-executive Director.

Additional details of the Placing and Acquisition

· Terrace Hill has received irrevocable undertakings from each of the Directors who hold ordinary shares, certain family trusts of Robert Adair and Caledonia Investments Plc to vote in favour of the Resolution to be proposed at the General Meeting, in respect of a total of 154,318,841 Terrace Hill Ordinary Shares, representing approximately 72.8 per cent. of the ordinary shares of Terrace Hill in issue on 25 April 2014 (being the Latest Practicable Date). 

· The Bookbuild for the proposed Placing will open with immediate effect following this announcement. The book is expected to close on Wednesday 30 April 2014, or earlier at the Joint Bookrunners' discretion.

· The Company will apply for admission of the Enlarged Share Capital to the standard listing segment of the Official List of the Financial Conduct Authority and to trading on London Stock Exchange plc's Main Market for listed securities. It is expected that Admission will become effective and that dealings in the Ordinary Shares will commence on 22 May 2014.

· Following completion of the Acquisition and Placing, the Enlarged Group will operate under a new name, Urban&Civic plc. 

· Shareholder approval will be sought at the General Meeting for the Share Consolidation, whereby the Existing Ordinary Shares of two pence each will be consolidated into Consolidated Ordinary Shares of 20 pence each in the capital of the Company on the basis of one Consolidated Ordinary Share for every 10 Existing Ordinary Shares held.

· Members of the Enlarged Board intend to subscribe for an aggregate amount of approximately £3.6 million in the Placing or the Employee Offer.

· In view of the size of the Acquisition in relation to the Company, the Acquisition constitutes a reverse takeover under the AIM Rules for Companies and is conditional on the approval of Shareholders. Trading in the Company's shares on AIM will be suspended until publication of the prospectus relating to the Placing and Acquisition which is expected to be later today.

· It is expected that the Circular containing further information in relation to the Acquisition and the Placing and notice of the General Meeting, together with a Form of Proxy, will be posted to Terrace Hill Shareholders later today.

· Appendix 2 contains Terrace Hill's first quarter results for the three months to 31 December 2013.

Robert Adair, Executive Chairman of Terrace Hill, commented: "This powerful new combination represents a transformational and exciting step forward for us. I could not have wanted for a better and more promising outcome. As local economies and real wages outside central London begin to recover, the new business has good momentum and an excellent and skilled, combined management team to take us forward. Our shareholders should also benefit from the greater visibility and improved liquidity that the Main Market listing and larger capitalisation will provide."

Nigel Hugill, Executive Chairman of Urban&Civic, commented: "We are back in the arena where we feel happiest. Alconbury and Rugby are both new garden settlements in the making with strong local economies and good commuting to London. The two companies have highly complementary skill sets and the secured Terrace Hill pipeline will allow us to build retained income. The enlarged business will be strong enough to punch hard but small enough to care passionately. I simply cannot wait to get going."

This summary should be read in conjunction with, and is subject to, the full text of the following announcement including the Appendices.

Enquiries:

Terrace Hill Group plc 020 7631 1666

Philip Leech

Jon Austen

Urban&Civic 020 7569 1600

Nigel Hugill

Robin Butler

Ernst & Young LLP 020 7951 2000

(Financial adviser to Terrace Hill)

Julie Green

Scott Orr

J.P. Morgan Cazenove 020 7742 4000

(Financial adviser to Urban&Civic and Joint Bookrunner to the Enlarged Group)

Robert Fowlds

Bronson Albery

Oriel Securities Limited ("Oriel Securities") 020 7710 7600

(Nominated adviser to Terrace Hill and Joint Bookrunner to the Enlarged Group)

Mark Young

David Arch

FTI Consulting 020 3727 1000

(Financial Public Relations adviser)

Richard Sunderland

Stephanie Highett

Nick Taylor

Will Henderson

terracehill@fticonsulting.com

Ernst & Young LLP, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for Terrace Hill and no one else in connection with the Acquisition and will not be responsible to anyone other than Terrace Hill for providing the protections afforded to clients of Ernst & Young LLP or for providing advice in connection with the Acquisition, the content of this announcement or any matter or arrangement referred to herein. Neither Ernst & Young LLP nor any of its subsidiaries, branches or affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Ernst & Young LLP in connection with this announcement, any statement contained herein or otherwise.

Oriel Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as nominated adviser and joint bookrunner and no one else in connection with the Acquisition and Placing and will not be responsible to anyone other than Terrace Hill for providing the protections afforded to clients of Oriel Securities for providing advice in connection with the Acquisition and Placing, the content of this announcement or any matter or arrangement referred to herein. Neither Oriel Securities nor any of its subsidiaries, branches or affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Oriel Securities in connection with this announcement, any statement contained herein or otherwise.

J. P. Morgan Limited (which conducts its UK investment banking business as J.P. Morgan Cazenove), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for Urban&Civic and no one else in connection with the Acquisition and will not be responsible to anyone other than Urban&Civic for providing the protections afforded to clients of J. P. Morgan Cazenove or for providing advice in connection with the Acquisition, the content of this announcement or any matter or arrangement referred to herein. Neither J. P. Morgan Cazenove nor any of its subsidiaries, branches or affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of J. P. Morgan Cazenove in connection with this announcement, any statement contained herein or otherwise.

J. P. Morgan Securities plc (which conducts its UK investment banking business as J.P. Morgan Cazenove), which is authorised by the Prudential Regulatory Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulatory Authority, is acting exclusively as joint bookrunner to Terrace Hill and no one else in connection with the Placing and will not be responsible to anyone other than Terrace Hill for providing the protections afforded to clients of J. P. Morgan Cazenove or for providing advice in connection with the Placing, the content of this announcement or any matter or arrangement referred to herein. Neither J. P. Morgan Cazenove nor any of its subsidiaries, branches or affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of J. P. Morgan Cazenove in connection with this announcement, any statement contained herein or otherwise.

Forward-looking Statements

Some of the information in this announcement may contain projections or other forward-looking statements regarding future events or the future financial performance of the Company. You can identify forward-looking statements by terms such as "expect", "believe", "anticipate", "estimate", "intend", "will", "could", "may", or "might" the negative of such terms or other similar expressions. The Company wishes to caution you that these statements are only predictions and that actual events or results may differ materially. The Company does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of the Company, including, among others, general economic conditions, the competitive environment as well as many other risks specifically related to the Company and its operations.

This summary should be read in conjunction with the full text of this announcement. Appendix 1 to this announcement contains further details of the Placing, Appendix 2 contains the Terrace Hill first quarter results for the three months ended 31 December 2013 and Appendix 3 contains definitions of certain expressions used in this summary and in this announcement.

Publication on website and availability of hard copies

It is expected that the prospectus will be published later today.

A copy of this announcement will be available free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Terrace Hill's website at www.terracehill.co.uk. The contents of Terrace Hill's and Urban&Civic's websites, and those of any other website accessible from hyperlinks on Terrace Hill's and Urban&Civic's websites, are not incorporated into nor form part of this announcement.

IMPORTANT NOTICE

THE MATERIAL SET FORTH HEREIN IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT INTENDED, AND SHOULD NOT BE CONSTRUED, AS AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES OR ANY OTHER JURISDICTION. SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION. THE SECURITIES OF THE COMPANY DESCRIBED HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE LAWS OF ANY STATE OF THE UNITED STATES OR ANY JURISDICTION THEREOF, AND MAY NOT BE OFFERED, SOLD, RE-SOLD, TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, ABSENT REGISTRATION OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION IN THE UNITED STATES.

The distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and, therefore, any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements. Failure to comply with any such restrictions may constitute a violation of the securities laws of any jurisdiction.

This announcement does not constitute an offer of, or the solicitation of an offer to subscribe for or purchase, any Ordinary Shares to any person in any jurisdiction to whom or in which such offer or solicitation is unlawful, and therefore persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. In particular, this announcement is not for distribution in or into, the United States, Canada, Japan or the Republic of South Africa.

No action has been or will be taken by the Company or the Joint Bookrunners to permit a public offering of the Ordinary Shares under the applicable securities laws of any jurisdiction. Other than in the United Kingdom, no action has been taken or will be taken to permit the possession or distribution of this announcement (or any other offering or publicity materials relating to the Ordinary Shares) in any jurisdiction where action for that purpose may be required or where doing so is restricted by law. Accordingly, neither this announcement, nor any advertisement, nor any other offering material may be distributed or published in any jurisdiction except under circumstances that will result in compliance with any applicable laws and regulations. Persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of the securities laws of any such jurisdiction.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA ("EEA") THE PLACING IS ONLY OPEN TO INVITED PERSONS WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC, AS AMENDED FROM TIME TO TIME, AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE "PROSPECTUS DIRECTIVE") ("QUALIFIED INVESTORS"); AND IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(1) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED.

THIS ANNOUNCEMENT AND THE INFORMATION HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, OUTSIDE OF THE UNITED KINGDOM, INCLUDING IN OR INTO AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS AND INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY SECURITIES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT ON THE BASIS OF INFORMATION TO BE CONTAINED IN THE PROSPECTUS.

Further, this announcement is for information purposes only and shall not constitute an offer to sell or issue or the solicitation of an offer to buy, subscribe for or otherwise acquire any new ordinary shares of Terrace Hill Group plc in any jurisdiction in which any such offer or solicitation would be unlawful. This announcement should be read in its entirety. In particular, you should read and understand the information provided in the 'Important Notice' section.

FOR IMMEDIATE RELEASE 28 April 2014

Terrace Hill Group plc ("Terrace Hill")

(to be re-named Urban&Civic plc)

Recommended acquisition of Urban&Civic and proposed Placing to raise £170 million through a placing of 75,555,556 Placing Shares at 225 pence per Share

and

Proposed admission to the standard listing segment of the Official List and to trading on the London Stock Exchange's Main Market for listed securities

INTRODUCTION

The Board of Terrace Hill is pleased to announce that it has conditionally agreed to acquire Urban&Civic (to form the "Enlarged Group"). The Enlarged Group intends to apply for Admission of its ordinary shares to the standard listing segment of the Official List of the UK Financial Services Authority and to trading on the Main Market for listed securities of the London Stock Exchange (together, "Admission"). In addition, to provide funds for the delivery of a strategy of securing and profitably delivering major strategic land holdings and commercial developments, the Enlarged Group intends to raise £170 million (before expenses) by way of a Placing (all the above together, the "Transaction"). The Acquisition will constitute a reverse takeover of Terrace Hill by Urban&Civic and is conditional on the approval of Shareholders.

BACKGROUND TO AND REASONS FOR THE ACQUISITION

The Board of Terrace Hill believes that the Enlarged Group will combine two established businesses with a clear strategic direction, will bring together a management team with an outstanding track record and will enable them to build on and develop the existing strong and diversified portfolio of assets to grow a new "Best in Class" UK real estate business.

The Enlarged Group will have exceptional large scale planning expertise and in-house project management and delivery skills across a network of UK regional offices. The combination of these complementary skill-sets and two solid and established real estate companies will position the Enlarged Group to generate attractive shareholder returns from its targeted UK real estate sectors.

Information on Urban&Civic

Urban&Civic is an unlisted property group founded in 2009 by Nigel Hugill and Robin Butler, which aims to deliver strategic residential land developments in key growth areas of the UK. Urban&Civic's management has considerable expertise and extensive experience in assembling large, complex developments and taking them through the planning process to successful delivery.

Urban&Civic owns two large strategic residential land sites in the UK which, in aggregate, have outline planning consent for 11,200 houses. The first is the 1,432 acre Alconbury Weald site near Huntingdon in Cambridgeshire. The second is a 50 per cent. interest in a 1,170 acre development site in Rugby which has been conditionally acquired and has planning permission for 6,200 houses and approx. 1.3 million sq. ft. of commercial development.

ALCONBURY WEALD

Overview

Urban&Civic acquired the former Alconbury Airfield site in November 2009, purchasing a strategic parcel of neighbouring farm land a year later known as Grange Farm. The combined land holding extends to approximately 1,432 acres of freehold land near to Huntingdon town centre which is adjacent to the East Coast Mainline and has direct links to the A14 and A1(M).

The Enlarged Group has the opportunity to create a large scale, low carbon, high quality mixed use development. As freehold owner and promoter of Alconbury Weald, the Enlarged Group will seek to develop the site over an estimated period of 20 years.

The site has a resolution to grant outline planning permission consent for 5,000 houses and approximately 3.1 million sq. ft. of commercial space, with a GDV estimated by Urban&Civic to be in excess of £1.3 billion (at current prices), subject to completion of a Section 106 Agreement, which has been substantially agreed.

In August 2011, approximately 370 acres of the site was designated as an Enterprise Zone by the Government, reflecting its position as a key growth hub for the region. The airfield currently benefits from consent for temporary use for storage and distribution and generates approximately £2.3 million of gross rental income per annum from the letting of open storage land, former aircraft hangars and peripheral commercial buildings.

The Enlarged Group has the potential to further enhance land values at Alconbury Weald by extending the built form of the development to the Grange Farm site, which extends to 345 acres of the total area of 1,432 acres, through the provision of a further 1,500 to 2,000 dwellings, subject to obtaining the necessary planning permission.

Development progress to date

Pursuant to a series of specific planning consents, Urban&Civic continues to invest in early infrastructure delivery and has to date constructed an access point for heavy commercial vehicles and construction haulage to the west of the site and has undertaken site clearance, demolition, crushing of hard standing (for re-use) and landscaping. In addition, a new main entrance, road for the Enterprise Zone and a 15,000 sq. ft. commercial building are now complete. To date all construction projects on site have been delivered on time and within budget.

The new commercial building within the Enterprise Zone is a business incubator unit that provides small and entrepreneurial companies with flexible office space and technical assistance to help grow their businesses. The first tenants have now been signed.

Next phase of development

The delivery of the initial key phases will include up to 1,100 homes, 850,000 sq. ft. of commercial space, a three-form entry primary school and associated infrastructure and landscaping. The Enlarged Group intends to build out a proportion (up to 100 homes) of this first residential phase in order to 'place-make', while the established design code will provide housebuilders with enough flexibility to bring forward their own ideas and methods.

Urban&Civic is currently advancing the design for the first phase of the outline planning consent in parallel with the completion of the Section 106 Agreement. The Enlarged Group expects to receive the required approvals to allow infrastructure and enabling works to start in the third quarter of 2014 with residential delivery commencing in the second quarter of 2015.

CBRE has valued the site at £101 million as at 31 December 2013 on the basis of a resolution to grant outline planning consent.

RUGBY

Overview

The Rugby Radio Station site is a former radio transmission facility located in Rugby, Warwickshire. Following decommissioning in 2003, BT and Aviva formed a joint venture, the RRSLP, to promote the redevelopment of the Rugby Radio Station site. The site extends to approximately 1,674 acres and comprises two principal elements, the 1,170 acre predominantly residential Sustainable Urban Expansion ("SUE") site and a logistics site known as the Daventry International Rail Freight Terminal III ("DIRFT") site.

Following a competitive process, Urban&Civic was confirmed as the development partner for the SUE site in May 2013, which included an option to acquire an interest in the site. In April 2014, Urban&Civic, through its joint venture SUE LP (its 50:50 joint venture), entered into an agreement to purchase its interest in the SUE site and this acquisition is expected to complete by the end of 2014.

The SUE site has a resolution to grant outline planning permission for 6,200 houses and approximately 1.3 million sq. ft. of commercial space over 460 acres of developable area, along with 49 acres of community and heritage areas and 393 acres of open spaces, with a built out value estimated by Urban&Civic to be in excess of £1.7 billion (at current prices), subject to Section 106 Agreement, which has been substantially agreed. Of the 1,170 acres development area, RRSLP currently owns approximately 981 acres and has options over approximately 145 acres. The balance of 44 acres remains to be acquired but in the event that suitable commercial arrangements cannot be agreed for this acquisition, there would be a small reduction in the number of housing units and commercial space. The Enlarged Board does not believe this will have a material impact on the development or on the value of the SUE site as the loss of sales revenue would be mitigated by the absence of land acquisition consideration.

Next phase of development

The initial delivery phase may extend to a maximum of approximately 1,000 homes, approximately 270,000 sq. ft. of commercial space, a two-form entry primary school and associated infrastructure and landscaping.

The design for the initial delivery phase of the outline consent for Rugby is being advanced. Reserved matters approvals will be sought in respect of the roads and green spaces and for early housing delivery, which is expected to commence by the third quarter 2015.

As with Alconbury Weald, the Enlarged Group will seek to build out a proportion of the residential dwellings at Rugby in order to 'place-make', either independently, or with its joint venture partner.

CBRE has valued Urban&Civic's 50 per cent. share of the SUE site at £27.5 million as at 9 January 2014 on the basis of a resolution to grant outline planning consent (implied value of entire SUE site: £55.0 million).

Information on Terrace Hill

Terrace Hill is a UK property development group which was admitted to trading on AIM in 1995. Terrace Hill's focus is on out of town foodstores, Central London offices and regional commercial development in the office, retail, industrial and, more recently, student accommodation and leisure sectors. It has offices in London, Teesside, Bristol, Manchester and Glasgow, providing it with a national presence combined with local knowledge.

Its current commercial development activities are focused on three main areas: foodstores; Central London offices and regional commercial development in the office, retail, industrial, student accommodation and leisure sectors and include:

Foodstores

Terrace Hill has a recognised expertise in foodstore development. Since 2008, Terrace Hill has completed highly profitable transactions involving seven foodstores with a total floor area of over 500,000 sq. ft. and GDV in excess of £180 million. Terrace Hill is currently developing four foodstores totalling approximately 340,000 sq. ft., comprising:

· Gateway, Teesside: Terrace Hill owns a 17 acre site and plans to develop a 125,000 sq. ft. foodstore and petrol station pre-let to Sainsbury's, subject to various conditions including payment of a premium to Sainsbury's, with sites also conditionally pre-let to Marston's and KFC. Planning consent was granted in February 2014 with an expectation to be on-site in mid-2014;

· Herne Bay, Kent: Terrace Hill has conditionally acquired a 7.5 acre site and plans to develop a 99,700 sq. ft. foodstore and petrol station pre-let to Sainsbury's. The planning application was submitted in 2012 and the Enlarged Board expects a recommendation for approval/ determination in 2014;

· Midsomer Norton, Somerset: Terrace Hill has conditionally acquired a 12 acre site and terms have been agreed with a retailer to develop a 93,700 sq. ft. foodstore; and

· Stokesley, North Yorkshire: Terrace Hill has conditionally acquired a 5.3 acre site and plans to develop an approximately 25,000 sq. ft. foodstore with 173 car parking spaces and a petrol filling station.

Central London offices

Terrace Hill has a successful track record of developing offices in Central London, with nine schemes completed over the past 12 years representing approximately 350,000 sq. ft. and £290 million of GDV. Terrace Hill is currently involved in the development of two Central London offices totalling approximately 190,000 sq. ft. comprising:

· Conduit Street, London W1: a 30,400 sq. ft. office and retail scheme currently under construction in Mayfair. The retail element is pre-let to Dsquared2, and Terrace Hill is acting as development manager; and

· Howick Place, London SW1: a 160,300 sq. ft. office and residential scheme in Victoria which was developed in a joint venture with Doughty Hanson. Leases have been secured for part of the office space, including for the UK head office for Giorgio Armani, and all of the residential element.

Regional opportunities

Terrace Hill has more than 20 years' experience of developing in the regional office, retail and industrial sectors and, more recently, in the leisure and student accommodation sectors. Terrace Hill is currently involved in nine regional development opportunities totalling approximately 540,000 sq. ft. including:

· Darlington, County Durham: planning permission was received in December 2013 for a 105,400 sq. ft. leisure and hotel scheme, with pre-lettings secured with Vue Cinemas, Premier Inn and Greene King. Terrace Hill was selected by Darlington Borough Council to develop the scheme and completion is expected by the end of 2015; and

· Southampton, Hampshire: a 1,104 bed student accommodation development pre-let to Southampton University. This has been forward funded by Legal & General and is under construction and expected to complete by July 2014.

The Enlarged Group's Strategy

The Enlarged Group's strategy will be to secure:

· major strategic land holdings in locations that benefit from strong transport links as well as robust local economies; and

· highly profitable commercial development/trading opportunities across the UK under the Terrace Hill brand with a strong focus on foodstore and leisure development.

The Placing will allow the Enlarged Group to deliver its strategy, in particular building on the excellent progress to date at Alconbury Weald and Rugby, as well as accelerating highly profitable commercial schemes such as Herne Bay. Furthermore, with a strong identified pipeline, the Enlarged Group would seek to capitalise on improving market conditions and capture the upside in the UK property market.

A proportion of the Enlarged Group's commercial developments are expected to be sold to institutional investors and REITs. This may be by way of forward funding or sale upon completion, generating income in the shorter term.

The Enlarged Group's Strengths

Combination of two established businesses with a clear strategic logic

The Board believe that the combination of these two established businesses creates an Enlarged Group that has a complementary strategy of focusing on major strategic land holdings and highly profitable commercial development/trading opportunities across the UK.

A management team with an outstanding track record

The Enlarged Group will benefit from a management team with an outstanding track record in planning and metropolitan as well as local project management.

Only three major retail planning consents have been achieved in London since the Second World War and two of the most recent, namely White City (now Westfield London) and Stratford (now Westfield Stratford City), were achieved by members of the team.

In addition, the team has achieved planning consents for 19 million sq ft of buildable area within the last five months and, over the past 15 years, the team has been directly involved in five of the largest regeneration schemes built or under development in London, being Paddington Basin, Elephant & Castle, Greenwich Peninsula, White City and Stratford.

Furthermore, the management team has more than a 20 year track record of commercial development in Central London and the regions, delivering 66 developments totalling approximately 4 million sq. ft. Management has demonstrated an ability to adapt to changes in property and financial markets, as illustrated by its move into foodstore developments in 2008, where Terrace Hill is now a market leader.

The following are a selection of commercial developments delivered by the team across the UK over the last 10 years:

· Cyprium, Swansea - 70,000 sq ft office scheme developed in 2006;

· Time Central, Newcastle - 83,000 sq ft Grade A commercial office space completed in 2008;

· Pinewood, Wokingham - 120,000 sq ft office development in 2008;

· Wilton Road, Victoria, London - 64,000 sq ft office development sold in 2010; and

· Sunderland - 99,000 sq ft Sainsbury's foodstore completed in 2013.

Positioned to generate risk-managed shareholder returns from its targeted UK real estate sectors

The Enlarged Group will be positioned to generate risk-managed shareholder returns from its targeted UK real estate sectors, as set out below:

· Land banks in robust regional locations: The Enlarged Group will focus on securing major strategic land holdings in locations that benefit from strong transport links, robust local economies and superior growth potential.

· Low base costs and operational leverage: Urban&Civic's land bank is not only located in regions with above average growth prospects, but has also been assembled at less than half the cost that is commonly achieved by listed housebuilders.

· Planning protection: Under the National Planning Policy Framework (NPPF), local authorities are now required to plan positively for growth, which includes demonstrating a five year supply of deliverable land.

· Diversification: The Enlarged Group will benefit from both business and geographic diversification. It has two different but complementary principal activities, being strategic residential land development and commercial development.

· Use of balance sheet: The Enlarged Group will assess whether to forward fund a development or sell upon completion on a case-by-case basis, reviewing development risks against the yield on cost as well as views on future yields.

· Market opportunities: The Enlarged Group has identified a pipeline of further strategic residential land opportunities, including a large scheme in the south-east of England within the M25 and a second large scheme in Cambridgeshire. In addition, the current pipeline of commercial development projects includes a student accommodation scheme on the south coast of England, a cinema-led leisure scheme in the north-west of England, a large foodstore in the south-west of England with a new operator relationship and an office scheme in the north-west of England.

Local authorities and the public sector are becoming more active in sponsoring development and regeneration, and the Enlarged Group has been able to secure pipeline opportunities through its long track record of performance and trust with relevant local authorities.

SUMMARY OF TERMS OF THE ACQUISITION

The Company has conditionally agreed to acquire Urban&Civic under the terms of the Acquisition Agreement, which has been entered into by all of the Urban&Civic Shareholders.

The Acquisition values Urban&Civic at approximately £95.3 million based upon the mid-market closing price of 22.13p per Ordinary Shares on 25 April 2014, being the Latest Practicable Date, and the 43,084,456 consolidated Consideration Shares to be issued to the Sellers pursuant to the Acquisition Agreement.

The Acquisition is conditional, inter alia, on the passing of the Resolution at the General Meeting and the Placing Agreement becoming unconditional (save for Admission and any condition relating to the Acquisition Agreement becoming unconditional) and not having been terminated in accordance with its terms.

The Acquisition Agreement contains warranties given by the Sellers to the Company and by the Company to the Sellers respectively as well as various undertakings in relation to the management of the businesses of each of the Terrace Hill Group and the Urban&Civic Group up until Completion.

In view of the size of the Acquisition in relation to the Company, the Acquisition constitutes a reverse takeover under the AIM Rules for Companies.

SUMMARY OF THE PLACING

The Placing comprises 75,555,556 Placing Shares to be issued by the Company. The Placing Shares will represent 54 per cent. of the Enlarged Share Capital (assuming the Placing is fully subscribed such that the Company issues 75,555,556 Placing Shares in the Placing and no shares are issued in the Employee Offer).

Under the Placing, Ordinary Shares are being made available to certain institutional and professional investors in the United Kingdom and elsewhere outside of the United States in reliance on Regulation S and in accordance with other applicable laws, and in the United States only to QIBs in reliance on Rule 144A or another exemption from the registration requirements of the Securities Act.

The Bookbuild for the proposed Placing will open with immediate effect following this announcement. The exact number of Placing Shares will be determined by Terrace Hill, Urban&Civic, J.P. Morgan Cazenove and Oriel Securities at the close of the Bookbuild and announced by the Company shortly thereafter. The book is expected to close on Wednesday 30 April 2014, or earlier at the Joint Bookrunners' discretion.

Shareholder approval will be sought at the General Meeting for the Share Consolidation, whereby the Existing Ordinary Shares of two pence each will be consolidated into Consolidated Ordinary Shares of 20 pence each in the capital of the Company on the basis of one Consolidated Ordinary Share for every 10 Existing Ordinary Shares held.

Under the Placing, Ordinary Shares are being made available to certain institutional and professional investors in the United Kingdom and elsewhere outside of the United States in reliance on Regulation S and in accordance with other applicable laws, and in the United States only to QIBs in reliance on Rule 144A or another exemption from the registration requirements of the Securities Act. Members of the Enlarged Board intend to subscribe for an aggregate amount of approximately £3.6 million in the Placing or the Employee Offer as follows:

· Robert Adair £640,000

· Jon Austen £300,000

· June Barnes £10,000

· Robin Butler £250,000

· Alan Dickinson £200,000

· Robert Dyson £250,000

· Nigel Hugill £250,000

· Philip Leech £500,000

· Duncan Hunter £1,237,500

In addition, the Company is proposing to offer Ordinary Shares up to an aggregate amount of €5 million (approximately £4.1 million) at the Placing Price to certain employees of the Enlarged Group (being fewer than 150 persons in total) ("Employee Shares"). The offer of Employee Shares by the Company is not part of the Placing and is not being underwritten. The offer of Employee Shares will be open until the date of the General Meeting and the results of the offer of Employee Shares are expected to be announced on or about 14 May 2014.

Applications will be made to the FCA for the Enlarged Share Capital to be admitted to the standard listing segment of the Official List and to the London Stock Exchange for the Enlarged Share Capital to be admitted to trading on the London Stock Exchange's Main Market for listed securities. The Placing Shares have not been marketed in whole or in part to the public in conjunction with the applications for Admission. The Company's obligation to issue the Placing Shares is conditional upon:

(a) the Resolution being duly passed without amendment;

(b) the Acquisition Agreement becoming unconditional (save for Admission) and not having been terminated in accordance with its terms prior to Admission;

(c) the Placing Agreement becoming unconditional (save for Admission) and not having been terminated in accordance with its terms prior to Admission;

(d) the execution of the Placing Memorandum and the Placing Memorandum including a number of Placing Shares sufficient to raise not less than £170 million of gross proceeds for the Company in the Placing following completion of the bookbuilding process; and

(e) Admission taking place on 22 May 2014 or such later date as the Joint Bookrunners, the Company, the Principal Shareholders and the Enlarged Board may agree not being later than 31 May 2014.

Pursuant to the Placing Agreement, the Directors and the Proposed Directors have each undertaken, subject to certain exceptions, that they will be subject to certain lock-up arrangements with respect to the Ordinary Shares and related securities. Each of the Company, the Directors and the Proposed Directors has given certain customary representations, warranties and undertakings to the Joint Bookrunners.

GIP U&C has also undertaken with the Joint Bookrunners to be bound by similar lock-up arrangements with respect to the Ordinary Shares and related securities.

In addition, Robert Adair and his family trusts have undertaken with the Company and the Joint Bookrunners for a period of one year from Admission, not to dispose of any Ordinary Shares or related securities unless executed through Oriel Securities in order to maintain an orderly market in the Ordinary Shares.

Terms and conditions of the proposed Placing will be detailed in the prospectus relating to the Placing and Acquisition, which is expected to be published later today.

If the Placing is not fully subscribed following completion of the bookbuilding process, the Placing, the Acquisition and Admission will not proceed. Further details of the Placing are set out in Appendix 1 of this announcement.

IRREVOCABLE UNDERTAKINGS TO APPROVE THE RESOLUTION

Terrace Hill has received irrevocable undertakings from each of the Directors who hold ordinary shares, certain family trusts of Robert Adair and Caledonia Investments Plc to vote in favour of the Resolution to be proposed at the General Meeting, in respect of a total of 154,318,841 Terrace Hill Ordinary Shares, representing approximately 72.8per cent. of the ordinary shares of Terrace Hill in issue on 25 April 2014 (being the Latest Practicable Date).

BOARD OF DIRECTORS

The Enlarged Group will have a strong board with extensive experience. The composition of the Enlarged Board on Admission will be as follows:

Nigel Hugill Executive Chairman

Robin Butler Chief Executive

Philip Leech Property Director

Jon Austen Group Finance Director

Robert Adair Deputy Chairman and Non-executive Director

June Barnes Independent Non-executive Director

Alan Dickinson Senior Independent Non-executive Director

Robert Dyson Independent Non-executive Director

Duncan Hunter Independent Non-executive Director

Mark Tagliaferri Non-executive Director

The Proposed Directors will become directors of the Company with effect from Admission.

CHANGE OF NAME

Upon completion of the Acquisition, the name of the Company will be changed to Urban&Civic plc.

DIVIDEND POLICY

The Enlarged Group Board intends to adopt a progressive dividend policy taking into account the Enlarged Group's expected earnings and future expansion plans, and will target a first dividend after a full year of trading, being the year ending 30 September 2015, of approximately 1 per cent. of the Placing Price*.

\* This is a target only and not a profit forecast. There can be no assurance that this target will be met or that the Company will make any distributions at all.

GEARING POLICY

The Enlarged Group Board intends to maintain a low level of gearing for the Enlarged Group, targeting a loan to gross asset value ratio in the region of 30 per cent. which will typically be secured at the asset level. The Enlarged Group Board intends to limit the amount of borrowing by the Enlarged Group that is secured against strategic residential developments, as there is already significant operating leverage in the land.

MOVE FROM AIM TO OFFICIAL LIST

Application has been made to the FCA for all the Ordinary Shares to be listed on the standard listing segment of the Official List and application has been made to the London Stock Exchange for all the Ordinary Shares to be admitted to trading on the London Stock Exchange's Main Market for listed securities.

Upon Admission, the Company will cancel the trading on AIM of its Existing Ordinary Shares and the standard listing on the Official List will become the Company's only listing. Trading in the Company's shares on AIM will be suspended until publication of the prospectus relating to the Placing and Acquisition which is expected to be later today.

It is expected that Admission will become effective and that dealings in the Ordinary Shares will commence on the London Stock Exchange at 8.00 a.m. (London time) on 22 May 2014.

GENERAL MEETING

A General Meeting will be held to consider the Proposals and notice of this will be shortly despatched to Terrace Hill Shareholders. Completion of the Acquisition and Admission of the Shares to the Official List and to trading on the Main Market of the London Stock Exchange is expected to take place on 22 May 2014.

Ernst & Young LLP, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for Terrace Hill and no one else in connection with the Acquisition and will not be responsible to anyone other than Terrace Hill for providing the protections afforded to clients of Ernst & Young LLP or for providing advice in connection with the Acquisition, the content of this announcement or any matter or arrangement referred to herein. Neither Ernst & Young LLP nor any of its subsidiaries, branches or affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Ernst & Young LLP in connection with this announcement, any statement contained herein or otherwise.

Oriel Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as nominated adviser and joint bookrunner and no one else in connection with the Acquisition and Placing and will not be responsible to anyone other than Terrace Hill for providing the protections afforded to clients of Oriel Securities for providing advice in connection with the Acquisition and Placing, the content of this announcement or any matter or arrangement referred to herein. Neither Oriel Securities nor any of its subsidiaries, branches or affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Oriel Securities in connection with this announcement, any statement contained herein or otherwise.

J. P. Morgan Limited (which conducts its UK investment banking business as J.P. Morgan Cazenove), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for Urban&Civic and no one else in connection with the Acquisition and will not be responsible to anyone other than Urban&Civic for providing the protections afforded to clients of J. P. Morgan Cazenove or for providing advice in connection with the Acquisition, the content of this announcement or any matter or arrangement referred to herein. Neither J. P. Morgan Cazenove nor any of its subsidiaries, branches or affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of J. P. Morgan Cazenove in connection with this announcement, any statement contained herein or otherwise.

J. P. Morgan Securities plc (which conducts its UK investment banking business as J.P. Morgan Cazenove), which is authorised by the Prudential Regulatory Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulatory Authority, is acting exclusively as joint bookrunner to Terrace Hill Row and no one else in connection with the Placing and will not be responsible to anyone other than Terrace Hill for providing the protections afforded to clients of J. P. Morgan Cazenove or for providing advice in connection with the Placing, the content of this announcement or any matter or arrangement referred to herein. Neither J. P. Morgan Cazenove nor any of its subsidiaries, branches or affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of J. P. Morgan Cazenove in connection with this announcement, any statement contained herein or otherwise.

Forward-looking Statements

Some of the information in this announcement may contain projections or other forward-looking statements regarding future events or the future financial performance of the Company. You can identify forward-looking statements by terms such as "expect", "believe", "anticipate", "estimate", "intend", "will", "could", "may", or "might" the negative of such terms or other similar expressions. The Company wishes to caution you that these statements are only predictions and that actual events or results may differ materially. The Company does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of the Company, including, among others, general economic conditions, the competitive environment as well as many other risks specifically related to the Company and its operations.

The summary should be read in conjunction with the full text of this announcement. Appendix 1 to this announcement contains further details of the Placing, Appendix 2 contains the Terrace Hill first quarter results for the three months ended 31 December 2013 and Appendix 3 contains definitions of certain expressions used in the summary and in this announcement.

Publication on website and availability of hard copies

It is expected that the prospectus will be published later today.

A copy of this announcement will be available free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Terrace Hill's website at www.terracehill.co.uk. The contents of Terrace Hill's and Urban&Civic's websites, and those of any other website accessible from hyperlinks on Terrace Hill's and Urban&Civic's websites, are not incorporated into nor form part of this announcement.

IMPORTANT NOTICE

THE MATERIAL SET FORTH HEREIN IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT INTENDED, AND SHOULD NOT BE CONSTRUED, AS AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES OR ANY OTHER JURISDICTION. SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION. THE SECURITIES OF THE COMPANY DESCRIBED HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE LAWS OF ANY STATE OF THE UNITED STATES OR ANY JURISDICTION THEREOF, AND MAY NOT BE OFFERED, SOLD, RE-SOLD, TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, ABSENT REGISTRATION OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION IN THE UNITED STATES.

The distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and, therefore, any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements. Failure to comply with any such restrictions may constitute a violation of the securities laws of any jurisdiction.

This announcement does not constitute an offer of, or the solicitation of an offer to subscribe for or purchase, any Ordinary Shares to any person in any jurisdiction to whom or in which such offer or solicitation is unlawful, and therefore persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. In particular, this announcement is not for distribution in or into, the United States, Canada, Japan or the Republic of South Africa.

No action has been or will be taken by the Company or the Joint Bookrunners to permit a public offering of the Ordinary Shares under the applicable securities laws of any jurisdiction. Other than in the United Kingdom, no action has been taken or will be taken to permit the possession or distribution of this announcement (or any other offering or publicity materials relating to the Ordinary Shares) in any jurisdiction where action for that purpose may be required or where doing so is restricted by law. Accordingly, neither this announcement, nor any advertisement, nor any other offering material may be distributed or published in any jurisdiction except under circumstances that will result in compliance with any applicable laws and regulations. Persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of the securities laws of any such jurisdiction.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA ("EEA") THE PLACING IS ONLY OPEN TO INVITED PERSONS WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC, AS AMENDED FROM TIME TO TIME, AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE "PROSPECTUS DIRECTIVE") ("QUALIFIED INVESTORS"); AND IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(1) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED.

APPENDIX 1

FURTHER INFORMATION ON THE PLACING

Bookbuilding and allocation

All Ordinary Shares made available pursuant to the Placing will be payable in full at the Placing Price. The results of the Placing are expected to be announced at or before 7.00 a.m. on 1 May 2014.

Allocations under the Placing will be determined by the Company (including the Proposed Directors) in consultation with the Joint Bookrunners. A number of factors will be considered in determining the basis of allocation under the Placing, including the level and nature of demand for Ordinary Shares.

Upon accepting any allocation, prospective investors will be contractually committed to subscribe for the number of Ordinary Shares allocated to them at the Placing Price and, to the fullest extent permitted by law, will be deemed to have agreed not to exercise any rights to rescind or terminate, or withdraw from, such commitment.

The rights attaching to the Ordinary Shares will be uniform in all respects and the Ordinary Shares will form a single class for all purposes.

Each investor will be required to pay the Placing Price for the Ordinary Shares issued to such investor in such manner as shall be directed by the Joint Bookrunners.

All Ordinary Shares issued pursuant to the Placing will be issued at the Placing Price.

The Ordinary Shares allocated under the Placing will be underwritten, subject to certain conditions, by the Joint Bookrunners if the Placing is fully subscribed following completion of the bookbuilding process.

The Joint Bookrunners will solicit bids from prospective institutional investors to subscribe for Ordinary Shares in the Placing. Prospective investors will be required to specify the number of Ordinary Shares which they would be prepared to subscribe for at the Placing Price.

In the event that demand for the Ordinary Shares being offered exceeds the number of Ordinary Shares made available in the Placing, allocations may be scaled down in any manner at the Joint Bookrunners' discretion, in consultation with the Company (including the Proposed Directors), and investors under the Placing may be allocated Ordinary Shares having an aggregate value which is less than the sum applied for in the bookbuilding process. The Joint Bookrunners, in consultation with the Company (including the Proposed Directors) and the Principal Shareholders, may allocate such Ordinary Shares as they see fit (and there is no obligation to allocate such Ordinary Shares proportionately).

Completion of the Placing will be subject to the satisfaction of conditions contained in the Placing Agreement including (i) execution of the Placing Memorandum; (ii) the Placing Memorandum including a number of Placing Shares sufficient to raise not less than £170 million of gross proceeds for the Company in the Placing following completion of the bookbuilding process; (iii) Admission occurring and (iv) the Placing Agreement not having been terminated. The Placing cannot be terminated once dealings in the Ordinary Shares have commenced.

Prospective investors in the Placing will be advised verbally or by electronic mail of their allocation as soon as practicable following allocation. Prospective investors in the Placing will be contractually committed to subscribe for the number of Ordinary Shares allocated to them at the Placing Price, and to the fullest extent permitted by law, will be deemed to have agreed not to exercise any rights to rescind or terminate, or otherwise withdraw from, such commitment.

The Placing, the Acquisition and Admission will not proceed if the Placing is not fully subscribed following the bookbuilding process.

Withdrawal rights

In the event that the Company is required to publish a supplementary prospectus, investors who have applied to subscribe for Ordinary Shares in the Placing will not have the right to withdraw their offer to subscribe for Ordinary Shares in the Placing because the Placing is not an offer to the public for the purpose of the Prospectus Directive.

Terms and conditions of the Placing

The terms and conditions of the Placing will be set out in the Prospectus and will apply to investors agreeing to subscribe for or purchase Ordinary Shares under the Placing. Each such investor will be deemed to have agreed with each of the Company and the Joint Bookrunners to be bound by such terms and conditions as being the terms and conditions upon which Ordinary Shares will be issued under the Placing.

Conditional on, inter alia, (i) the execution of the Placing Memorandum and the Placing Memorandum including a number of Placing Shares sufficient to raise not less than £170 million of gross proceeds for the Company in the Placing following completion of the bookbuilding process; and (ii) Admission occurring on or prior to 22 May 2014 (or such later date as the Joint Bookrunners, the Company, the Principal Shareholders, and the Enlarged Board may agree); and (iii) the investor being allocated Ordinary Shares, each investor will agree to become a member of the Company and agrees to subscribe for Ordinary Shares at the Placing Price.

The number of Ordinary Shares allocated to an investor under the Placing will be in accordance with the arrangements described in this Appendix 1.

Each investor will be required to represent, warrant and acknowledge to each of the Company and the Joint Bookrunners on terms which will be set out in the Prospectus.

Certain restrictions that apply to the distribution of this announcement and the Prospectus and Ordinary Shares in jurisdictions outside the United Kingdom are described in paragraph 10 of Part 8 of the prospectus.

APPENDIX 2

Financial information on the Terrace Hill Group for the three months ended 31 December 2013

The financial information set out below of the Terrace Hill Group is for the period from 1 October 2013 to 31 December 2013 (with comparatives for the year ended 30 September 2013).

Terrace Hill Group Statements of Comprehensive Income

3 months Year Ended

to 31 30

December September

Terrace Hill Group Balance Sheets

3 months Year Ended

to 31 30

December September

Terrace Hill Group Statements of Changes in Equity

Terrace Hill Group Cash Flow Statements

3 months Year Ended

to 31 30

December September

2013 2013

Notes

General information

The special purpose financial information for the three month period ended 31 December 2013 has been prepared and included in the Accountant's report on the Historical Financial Information relating to Terrace Hill which will be included in a Prospectus to be issued following this announcement.

Basis of preparation and accounting policies

The accounting policies and basis of preparation adopted in the preparation of the special purpose financial information for the period to 31 December 2013 are consistent with those applied in the Terrace Hill statutory accounts for the year ended 30 September 2013.

The financial information set out in this announcement does not constitute statutory accounts for the three month period ended 31 December 2013 or the year ended 30 September 2013. Statutory accounts for the year ended 30 September 2013 have been reported on by the Independent Auditors and have been delivered to the Registrar of Companies. The Independent Auditors report on the statutory accounts for the year ended 30 September 2013 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under section 498(2) and 498(3) of the Companies Act 2006.

APPENDIX 3

DEFINITIONS

In this announcement the following expressions have the following meanings, unless the context requires

otherwise: