Team Internet Regulatory News (TIG)

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 OF SUCH JURISDICTION

28 August 2015

RECOMMENDED CASH OFFER

for

The Innovation Group plc ("Innovation")by

Axios Bidco Limited ("Bidco")

Summary

· The boards of Bidco and Innovation are pleased to announce that they have reached agreement on the terms of a recommended cash offer pursuant to which Bidco shall acquire the entire issued and to be issued ordinary share capital of Innovation. The Offer is to be effected by means of a scheme of arrangement under Part 26 of the Companies Act.

· Under the terms of the Offer, Innovation Shareholders shall be entitled to receive 40 pence in cash for each Ordinary Share held, representing a premium of approximately:

· 13.5 per cent. to the Closing Price per Ordinary Share of 35.25 pence on 27 August 2015 (being the latest practicable date prior to the announcement by Innovation that it was in discussions with Carlyle);

· 26.3 per cent. to the volume weighted average Closing Price per Ordinary Share of 31.67 pence for the 3 months ended 27 August 2015 (being the latest practicable date prior to the announcement by Innovation that it was in discussions with Carlyle);

· 42.1 per cent. to the volume weighted average Closing Price per Ordinary Share of 28.14 pence for the 6 months ended 27 August 2015 (being the latest practicable date prior to the announcement by Innovation that it was in discussions with Carlyle); and

· a P/E multiple of 22.9x to Innovation's earnings per share for the twelve months ended 31 March 2015.

· The Offer values the entire issued and to be issued ordinary share capital of Innovation at approximately £499 million.

· The Offer is conditional on, amongst other things, the approval of Innovation Shareholders.

· Bidco has, in total, received irrevocable undertakings and letters of intent to vote in favour of the Scheme in respect of 346,817,571 issued Ordinary Shares representing, in aggregate, approximately 28.3 per cent. of the issued ordinary share capital of Innovation on 27 August 2015 (being the last practicable date prior to the date of this Announcement). These are described in further detail below.

· The Innovation Directors, who have been so advised by Investec, consider the terms of the Offer to be fair and reasonable. In providing advice to the Innovation Directors, Investec has taken into account the commercial assessments of the Innovation Directors.

· Bidco is indirectly wholly owned by the Carlyle Europe Partners IV Funds. The Carlyle Europe Partners IV Funds, together with their affiliates, do business as 'The Carlyle Group' ("Carlyle"). Carlyle is a global alternative asset manager with $193 billion of assets under management in 128 funds and 159 fund of funds vehicles as of 30 June 2015. Carlyle invests across four segments - Corporate Private Equity, Global Market Strategies, Real Assets and Investment Solutions - in Africa, Asia, Australia, Europe, the Middle East, North America and South America. Carlyle has expertise in various industries, including: financial services, aerospace, defence & government services, consumer and retail, energy and power, healthcare, industrial, infrastructure, real estate, technology and business services, telecommunications and media and transportation. Carlyle employs more than 1,700 people in 35 offices across six continents.

· The Board and management team of Innovation have built a strong business since 2009, growing the market capitalisation of Innovation from £50 million on 13 May 2009, the day before announcing the Group's proposed placing to raise approximately £5.1 million at 8 pence per Ordinary Share, to £433 million as at 27 August 2015 (being the last practicable date prior to the date of this Announcement). This has been achieved through a combined organic and inorganic growth strategy, offering a range of insurance-focused business process services and software to clients.

· Whilst the Innovation Directors believe that there is potential for future growth in equity value for Innovation Shareholders they recognise the benefits to Innovation in having a partner like Carlyle with global presence, relevant industry network and commitment to the ongoing investment requirements of (i) supporting the international growth of the Business Services division; (ii) accelerating its growth through acquisitions; and (iii) scaling the Software division. The Offer will provide Innovation with enhanced financial and operational flexibility as it seeks to execute its strategy in the longer-term. As such, the Innovation Directors believe that the Offer represents a compelling opportunity for Innovation Shareholders to immediately and fully realise the value from their investment in cash and at a premium.

· Accordingly, the Innovation Directors intend to recommend unanimously that Innovation Shareholders vote in favour of the Scheme at the Court Meeting and the resolution to be proposed at the General Meeting as the Innovation Directors have irrevocably undertaken to do in respect of their own beneficial holdings amounting in aggregate to 8,215,394 Ordinary Shares representing approximately 0.7 per cent. of the issued ordinary share capital of Innovation as at 27 August 2015 (being the latest practicable date prior to the publication of this Announcement).

· The Offer Price assumes that Innovation Shareholders will not receive a final dividend for Innovation's financial year ending 30 September 2015. If any dividend or other distribution is authorised, declared, proposed, made or paid by Innovation on or after the date of this Announcement and prior to the Effective Date, Bidco reserves the right to adjust the Offer Price downwards on an equivalent basis.

· The Offer shall be put to Innovation Shareholders at the Court Meeting and at the General Meeting. In order to become effective, the Scheme must be approved by a majority in number of the Innovation Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Ordinary Shares voted. In addition, a special resolution implementing the Scheme must be passed by Innovation Shareholders representing at least 75 per cent. of votes cast at the General Meeting.

· The Scheme Document, containing further information about the Offer and notices of the Court Meeting and the General Meeting, shall be published as soon as practicable and, in any event, within 28 days of this Announcement.

Commenting on the Offer, Eric Kump, Managing Director, Carlyle Europe Partners, said:

"Innovation is a high-quality business with great potential for growth, both organically and through acquisitions. Carlyle shares the management team's vision for growth and international expansion, and we believe our partnership will strengthen the business."

Commenting on the Offer, Zeina Bain, Managing Director, Carlyle Europe Partners, said:

"We are excited about working with management to realise the group's growth potential and continuing its success internationally through leveraging Carlyle's experience and global 'OneCarlyle' network."

Commenting on the Offer, David Thorpe, Non-Executive Chairman of Innovation, said:

"The group has achieved much and created significant value since the management team, led by Andy Roberts, took over the leadership of the business in 2009. Carlyle's offer represents a compelling opportunity for Innovation's shareholders to immediately and fully realise the value from their investment, in cash and at a premium. We also believe that Carlyle brings a commitment and vision to the ongoing investment requirements of the business, providing Innovation with enhanced financial and operational flexibility as the group seeks to execute its strategy in the longer-term. We believe this also makes the transaction compelling for our non-investor stakeholders as well. As a consequence, the Board believes that this transaction is in the best interests of all our stakeholders and unanimously recommends that shareholders vote in favour of the resolutions relating to this Offer."

This summary should be read in conjunction with the full text of this Announcement. The Offer shall be subject to the Conditions and further terms set out in Appendix I to this Announcement and to the full terms and conditions which shall be set out in the Scheme Document. Appendix II to this Announcement contains the sources of information and bases of calculations of certain information contained in this Announcement, Appendix III contains a summary of the irrevocable undertakings and letters of intent received in relation to this Offer and Appendix IV contains definitions of certain expressions used in this summary and in this Announcement.

Important Notices

HSBC Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the UK. HSBC is acting exclusively as financial adviser to Bidco and Carlyle and no one else in connection with the Offer and shall not be responsible to anyone other than Bidco and Carlyle for providing the protections afforded to clients of HSBC nor for providing advice in connection with the Offer or any matter referred to herein.

Barclays Bank PLC, acting through its Investment Bank ("Barclays") is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the UK. Barclays is acting exclusively as financial adviser to Bidco and Carlyle and no one else in connection with the Offer and shall not be responsible to anyone other than Bidco and Carlyle for providing the protections afforded to clients of Barclays nor for providing advice in connection with the Offer or any matter referred to herein.

Investec Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the UK. Investec is acting exclusively for Innovation and no one else in connection with the Offer and shall not be responsible to anyone other than Innovation for providing the protections afforded to clients of Investec nor for providing advice in connection with the Offer or any matter referred to herein.

This Announcement is for information purposes only and does not constitute an offer to sell or an invitation to purchase any securities or the solicitation of an offer to buy any securities, pursuant to the Offer or otherwise. The Offer shall be made solely by means of the Scheme Document or any document by which the Offer is made which shall contain the full terms and Conditions of the Offer, including details of how to vote in respect of the acquisition.

This Announcement has been prepared for the purpose of complying with English law and the Takeover Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

Innovation shall prepare the Scheme Document to be distributed to Innovation Shareholders. Innovation and Bidco urge Innovation Shareholders to read the Scheme Document when it becomes available because it shall contain important information relating to the Offer.

This Announcement does not constitute a prospectus or prospectus equivalent document.

Overseas Shareholders

The release, publication or distribution of this Announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and observe, any applicable requirements.

Unless otherwise determined by Bidco or required by the Takeover Code, and permitted by applicable law and regulation, the Offer shall not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the offer by any such use, means, instrumentality or form within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this Announcement and all documents relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this Announcement and all documents relating to the Offer (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions where to do so would violate the laws in that jurisdiction.

The availability of the Offer to Innovation Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements.

The Offer shall be subject to the applicable requirements of the Takeover Code, the Panel, the London Stock Exchange, the Financial Conduct Authority and the UKLA.

Notice to US Shareholders

The Offer relates to shares of a UK company and is proposed to be effected by means of a scheme of arrangement under the laws of England and Wales. A transaction effected by means of a scheme of arrangement is not subject to proxy solicitation or tender offer rules under the US Securities Exchange Act of 1934 (the "US Exchange Act"). Accordingly, the Offer is subject to the disclosure requirements, rules and practices applicable in the United Kingdom to schemes of arrangement, which differ from the requirements of US proxy solicitation or tender offer rules. However, if Bidco were to elect to implement the Offer by means of a takeover offer, such takeover offer shall be made in compliance with all applicable laws and regulations. Such a takeover would be made in the United States by Bidco and no one else. In addition to any such takeover offer, Bidco, certain affiliated companies and the nominees or brokers (acting as agents) may make certain purchases of, or arrangements to purchase, shares in Innovation outside such takeover offer during the period in which such takeover offer would remain open for acceptance. If such purchases or arrangements to purchase were to be made they would be made outside the United States and would comply with applicable law, including the US Exchange Act.

The information contained in this document has neither been approved or disapproved by the US Securities and Exchange Commission (the "SEC") or any US state securities commission. Neither the SEC, nor any state securities commission, has passed upon the fairness or merits of the proposal described in, nor upon the accuracy or adequacy of the information contained in, this document.

The financial information included in this announcement has been prepared in accordance with accounting standards applicable in the United Kingdom that may not be comparable to the financial statements of US companies. US generally accepted accounting principles differ in certain respects from IFRS used in the United Kingdom. None of the financial information in this announcement has been audited in accordance with auditing standards generally accepted in the United States or the auditing standards of the Public Accounting Oversights Board (United States).

The receipt of cash pursuant to the Offer by a US Shareholder as consideration pursuant to the terms of the Offer may be a taxable transaction for US federal income tax purposes and under applicable US state and local, as well as foreign and other, tax laws. Each Shareholder is urged to consult his independent professional adviser immediately regarding the tax consequences of the Offer applicable to him or her.

Forward-Looking Statements

This Announcement contains statements about Bidco and Innovation that are or may be forward-looking statements. All statements other than statements of historical facts included in this Announcement may be forward-looking statements. Without limitation, any statements preceded or followed by or that include the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "estimates", "projects" or words or terms of similar substance or the negative thereof, are forward-looking statements. Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Bidco's or Innovation's operations and potential synergies resulting from the Offer; and (iii) the effects of government regulation on Bidco's or Innovation's business.

Such forward-looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward-looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. Bidco disclaims any obligation to update any forward-looking or other statements contained herein, except as required by applicable law.

No profit forecasts or estimates

No statement in this Announcement is intended as a profit forecast or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share for Bidco or Innovation, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Bidco or Innovation, as appropriate.

Disclosure requirements of the Takeover Code

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange 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 securities exchange 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 securities exchange 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 securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange 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 securities exchange 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 securities exchange 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 Panel's website at http://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.

Electronic Communications

Please be aware that addresses, electronic addresses and certain information provided by Innovation Shareholders, persons with information rights and other relevant persons for the receipt of communications from Innovation may be provided to Bidco during the Offer Period as requested under Section 4 of Appendix 4 of the Takeover Code to comply with Rule 2.12(c) of the Takeover Code.

Publication on Website and Availability of Hard Copies

A copy of this Announcement shall be made available subject to certain restrictions relating to persons resident in Restricted Jurisdictions on Innovation's website at http://investors.innovation-group.com/recommended-acquisition-by-axios-bidco-limited.aspx by no later than 12 noon (London time) on 1 September 2015. For the avoidance of doubt, the contents of this website are not incorporated into and do not form part of this Announcement.

You may request a hard copy of this Announcement by contacting Capita Asset Services on 0371 664 0300 or if calling from outside the UK on +44 (0) 208 639 3399. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. We are open between 9.00 a.m. to 5.30 p.m., Monday to Friday excluding public holidays in England and Wales. You may also request that all future documents, announcements and information to be sent to you in relation to the Offer should be in hard copy form.

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

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 OF SUCH JURISDICTION

28 August 2015

RECOMMENDED CASH OFFER

for

The Innovation Group plc ("Innovation")by

Axios Bidco Limited ("Bidco")

1 Introduction

The boards of Bidco and Innovation are pleased to announce that they have reached agreement on the terms of a recommended cash offer pursuant to which Bidco shall acquire the entire issued and to be issued ordinary share capital of Innovation (the "Offer"). The Offer is to be effected by means of a scheme of arrangement under Part 26 of the Companies Act.

2 The Offer

Under the terms of the Offer, which shall be subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Scheme Document, Innovation Shareholders shall be entitled to receive:

for each Ordinary Share 40 pence in cash

The Offer values the entire issued and to be issued ordinary share capital of Innovation at approximately £499 million, and represents a premium of approximately:

· 13.5 per cent. to the Closing Price per Ordinary Share of 35.25 pence on 27 August 2015 (being the latest practicable date prior to the announcement by Innovation that it was in discussions with Carlyle);

· 26.3 per cent. to the volume weighted average Closing Price per Ordinary Share of 31.67 pence for the 3 months ended 27 August 2015 (being the latest practicable date prior to the announcement by Innovation that it was in discussions with Carlyle);

· 42.1 per cent. to the volume weighted average Closing Price per Ordinary Share of 28.14 pence for the 6 months ended 27 August 2015 (being the latest practicable date prior to the announcement by Innovation that it was in discussions with Carlyle); and

· a P/E multiple of 22.9x to Innovation's earnings per share for the twelve months ended 31 March 2015.

The Offer Price assumes that Innovation Shareholders will not receive a final dividend in respect of Innovation's financial year ending 30 September 2015. If any dividend or other distribution is authorised, declared, proposed, made or paid by Innovation on or after the date of this Announcement and prior to the Effective Date, Bidco reserves the right to adjust downwards the Offer Price on an equivalent basis.

It is expected that the Scheme Document shall be published as soon as reasonably practicable and, in any event, by 25 September 2015 and that the Scheme shall become effective by the end of 2015, subject to the satisfaction or waiver of the Conditions and certain other terms set out in Appendix I to this Announcement.

3 Background to the Offer

Carlyle believes that Innovation is a high quality service and software business offering differentiated and business enhancing solutions to its clients. Innovation is well positioned for growth in its various activities with a strong end customer satisfaction focus and technology capability. Innovation's excellent management team, ethos of innovation and service delivery, combined with its international presence, underpins its successful track record and exciting future prospects. Innovation has strong potential to further build out its business lines and geographic presence both organically and inorganically, a journey Carlyle is keen to support it on.

4 Recommendation

The Innovation Directors, who have been so advised by Investec, consider the terms of the Offer to be fair and reasonable. In providing advice to the Innovation Directors, Investec has taken into account the commercial assessments of the Innovation Directors.

Accordingly, the Innovation Directors intend to recommend unanimously that Innovation Shareholders vote in favour of the Scheme at the Court Meeting and the resolution to be proposed at the General Meeting as the Innovation Directors have irrevocably undertaken to do in respect of their own beneficial holdings amounting in aggregate to 8,215,394 Ordinary Shares representing approximately 0.7 per cent. of the issued ordinary share capital of Innovation as at 27 August 2015 (being the latest practicable date prior to publication of this Announcement).

5 Background to and reasons for the recommendation

In evaluating the Offer, the Innovation Directors have considered the interests of Innovation's employees and customers, as well as the economic benefits to its shareholders.

The Innovation Directors have evaluated the Offer on behalf of Innovation Shareholders as a whole and, as a Board, have held detailed discussions regarding the terms of the potential acquisition of Innovation by Bidco. These discussions have resulted in the Offer at a price of 40 pence in cash for each Ordinary Share.

The Board and management team of Innovation have built a strong business since 2009, growing the market capitalisation of Innovation from £50 million on 13 May 2009, the day before announcing the Group's proposed placing to raise approximately £5.1 million at 8 pence per Ordinary Share, to £433 million as at 27 August 2015 (being the last practicable date prior to the date of this Announcement). This has been achieved through a combined organic and inorganic growth strategy, offering a range of insurance-focused business process services and software to clients.

Whilst the Innovation Directors believe that there is potential for future growth in equity value for Innovation Shareholders they recognise the benefits to Innovation in having a partner like Carlyle with global presence, relevant industry network and commitment to the ongoing investment requirements of (i) supporting the international growth of the Business Services division; (ii) accelerating its growth through acquisitions; and (iii) scaling the Software division. The Offer will provide Innovation with enhanced financial and operational flexibility as it seeks to execute its strategy in the longer-term. As such, the Innovation Directors believe that the Offer represents a compelling opportunity for Innovation Shareholders to immediately and fully realise the value from their investment in cash and at a premium.

The Innovation Directors believe that the Offer is in the best interests of Innovation Shareholders, and unanimously recommend that Innovation Shareholders vote in favour of the Scheme at the Court Meeting and that Innovation Shareholders vote in favour of the resolution to be proposed at the General Meeting, as they have irrevocably undertaken to do in respect of their own Innovation Shares amounting in aggregate to approximately 0.7 per cent. of the issued ordinary share capital of Innovation as at 27 August 2015 (being the latest practicable date prior to publication of this Announcement).

6 Irrevocable undertakings and letters of intent

Bidco has received irrevocable undertakings from each of the Innovation Directors to vote in favour of the Scheme at the Court Meeting and the resolution to be proposed at the General Meeting, in respect of a total of 8,215,394 Ordinary Shares, representing approximately 0.7 per cent. of the ordinary share capital of Innovation in issue on 27 August 2015 (being the latest practicable date prior to this Announcement).

Bidco has also received irrevocable undertakings to accept the Offer from Henderson Global Investors Limited, AlphaGen Capital Limited and Harwood Capital Management in respect of a total of 231,042,334 Ordinary Shares representing, in aggregate, approximately 18.8 per cent. of Innovation's ordinary share capital in issue on 27 August 2015 (being the latest practicable date prior to this Announcement).

In addition, Bidco has received a letter of intent from RWC Focus Asset Management Limited and NFU Mutual Insurance Society Ltd to accept the Offer in respect of 107,559,843 Ordinary Shares, representing, in aggregate, approximately 8.8 per cent. of Innovation's ordinary share capital in issue on 27 August 2015 (being the latest practicable date prior to this Announcement).

Bidco has therefore received irrevocable undertakings or letters of intent in respect of a total of 346,817,571 Ordinary Shares representing, in aggregate, approximately 28.3 per cent. of Innovation's ordinary share capital in issue on 27 August 2015 (being the latest practicable date prior to this Announcement).

Further details of these irrevocable undertakings (including the circumstances in which they shall fall away) are set out in Appendix III to this Announcement.

7 Information on Carlyle, the Carlyle Europe Partners IV Funds and Bidco

The Carlyle Europe Partners IV Funds form the fourth Carlyle European Buyout fund which, together with their affiliates, does business as "The Carlyle Group".

Carlyle is a global alternative asset manager with $193 billion of assets under management in 128 funds and 159 fund of funds vehicles as of 30 June 2015. Carlyle invests across four segments - Corporate Private Equity, Global Market Strategies, Real Assets and Investment Solutions - in Africa, Asia, Australia, Europe, the Middle East, North America and South America. Carlyle has expertise in various industries, including: financial services, aerospace, defence and government services, consumer and retail, energy and power, healthcare, industrial, infrastructure, real estate, technology and business services, telecommunications and media and transportation. Carlyle employs more than 1,700 people in 35 offices across six continents.

Bidco is a newly incorporated English company which, as at the date of this Announcement, is indirectly wholly-owned by the Carlyle Europe Partners IV Funds. Bidco was incorporated for the sole purpose of effecting the Offer. Bidco does not conduct a trade or business.

8 Information on Innovation

Innovation, which is headquartered in Whiteley, Hampshire, is a solution provider primarily to the motor and property insurance industry through its two divisions: Business Services and Software. Its principal offices are situated in the United Kingdom, Germany, France, Belgium, Spain, South Africa, Australia, United States of America and Pakistan. Innovation also provides services to the vehicle fleet and leasing and automotive manufacturing (warranty repair and maintenance) markets.

The Business Services division provides services and solutions designed to provide clients with significant savings on claim settlement and vehicle management costs whilst enabling them to achieve high levels of customer satisfaction. Innovation has core competencies in the provision of first-notice-of-loss administration, repair management, loss assessing, full claims handling, supplier network management and provision of management information.

The Software division provides software to insurance companies, building and operating the underlying business systems that are required to manage claims administration and policy processes. This technology can be used either to complement Innovation's outsourcing services or be implemented on a stand-alone basis for clients.

9 Innovation trading update

Innovation's interim results for the six months ended 31 March 2015 were released on 19 May 2015, in which the Innovation Directors reported strong revenue growth in its Business Services division of 20 per cent. at constant currency, of which 7 per cent. was delivered organically. However, the first half of the year had some challenges, the most significant being the benign weather conditions that were experienced in the UK adversely affecting the volume of property claims. Innovation was able to compensate for this decline in volume at the profit level through the sale of the UK customer contracts associated with its UK Innovation Symbility business to Symbility Solutions Ltd for a purchase price of £4.0m.

In Software, delays in a small number of significant contracts meant revenue was down on the prior period to £5.7m (H1 2014: £9.0m). Since 31 March 2015, Innovation has announced it has secured a new £46 million software client win with a Tier One UK insurer over an initial 10 year term with £12 million being recognised over the next 12 months.

Trading is currently in line with Innovation Directors' expectations, despite the significant headwinds that have continued (such as benign weather conditions reducing claims volumes in the UK property business and adverse currency fluctuations) and a requirement to close a small number of significant contracts before the year end.

10 Employees, management and locations

Following the completion of the Offer, the existing employment rights, including pension rights, of the management and employees of Innovation shall be fully safeguarded.

Bidco has not sought to create a new strategic plan for Innovation. Instead, Bidco intends to seek to realise growth opportunities and to support Innovation and its management and employees in executing management's long-term growth strategy for Innovation.

Save for its general intention to support management's long-term growth strategy with Innovation and its management and employees, Bidco has no current intention of changing Innovation's strategic plans, the location of Innovation's operations or redeploying Innovation's fixed assets or of effecting a material change to the operations of the business, or to the continued employment of, or any conditions of employment of, Innovation employees.

Each of David Thorpe, James Morley and Chris Harrison has confirmed that they intend to resign from the board of Innovation conditional upon, and with effect from, the Scheme becoming effective.

No proposals have been made on the terms of any incentive arrangements for relevant managers or the continuing Innovation Directors and there have been no discussions in respect of the terms of these arrangements.

11 Innovation Employee Incentive Plans

Participants in Innovation Employee Incentive Plans shall be contacted regarding the effect of the Offer on their rights under Innovation Employee Incentive Plans and appropriate proposals shall be made to such participants in due course.

Further details of the terms of such proposals shall be included in the Scheme Document.

12 Financing

The cash consideration payable under the Offer is being financed by a combination of equity to be invested indirectly by the Carlyle Europe Partners IV Funds and £230 million of debt to be provided under facilities arranged by Barclays Bank PLC and HSBC Bank plc.

HSBC, financial adviser to Bidco, is satisfied that sufficient resources are available to satisfy in full the cash consideration payable to Innovation Shareholders under the terms of the Offer.

Under the facilities agreement entered into between (among others) Bidco, Barclays Bank PLC and HSBC Bank plc dated on or about the date hereof (the "FA"), Bidco has agreed that (a) save as required to do so by the Takeover Panel, the High Court of Justice in England and Wales, applicable law, regulation or regulatory body (including any applicable waivers by the Takeover Panel) or otherwise with the consent of the Majority Lenders (as defined in the FA), it will not amend or waive any of the terms or conditions of the Offer or Scheme to an extent which would be materially prejudicial to the interests of the Lenders (as defined in the FA) taken as a whole under the FA, other than any amendment or waiver in relation to an increase in the price offered for the Ordinary Shares which is funded with the proceeds of equity or an extension of the period of acceptance of the Offer or Scheme for the shareholders of Innovation (including (i) in relation to an extension to any date for any meeting or court hearing and/or (ii) by reason of the adjournment of any meeting or court hearing, in each case, in connection with the Offer or, as the case may be, the Scheme) and (b) in the event that the Offer were to be implemented by way of takeover offer, it will not declare, or allow to be declared, the Offer to be unconditional as to acceptances at less than 75 per cent. of the shares to which the Offer relates (except to the extent agreed between Bidco and the Agent, acting on the instructions of all the Lenders (each term as defined in the FA) and subject to the right of the Agent (acting on the instructions of all the Lenders), in certain circumstances, to increase the threshold below which Bidco will not declare the Offer to be unconditional as to acceptances (except to the extent agreed between Bidco and the Agent, acting on the instructions of the Majority Lenders) from 75 per cent. to 90 per cent).

13 Offer-related Arrangements

In connection with the due diligence exercise undertaken by Carlyle, CECP and Innovation entered into a confidentiality agreement on 24 June 2015 (the "Confidentiality Agreement") pursuant to which each of CECP and Innovation has undertaken, subject to the provisions of the Takeover Code, to keep certain information confidential and not to disclose it to third parties (other than to permitted disclosees) unless required by law or regulation. These confidentiality obligations shall remain in force until the earlier of (i) expiry of a period of three years from the date of the Confidentiality Agreement; and (ii) the date the Scheme becomes effective.

Pursuant to the Co-operation Agreement, Bidco and Innovation have, amongst other things, each agreed to (i) co-operate in relation to the obtaining of any and all consents, clearances, permissions, waivers and/or approvals as may be necessary, and the making of all filings as may be necessary, from or under the law, regulations or practices applied by any applicable regulatory authority in connection with the Offer and (ii) cooperate in preparing and implementing appropriate proposals in relation to the Innovation Employee Incentive Plans. The Co-operation Agreement will terminate in certain circumstances, including if the Offer is withdrawn or lapses, if any Condition becomes incapable of satisfaction, if the Innovation Directors withdraw their recommendation of the Offer or if the Scheme does not become effective in accordance with its terms by the Long Stop Date or otherwise as agreed between Bidco and Innovation.

14 Structure of the Offer

It is intended that the Offer shall be effected by means of a Court-approved scheme of arrangement between Innovation and Innovation Shareholders under Part 26 of the Companies Act.

The purpose of the Scheme is to provide for Bidco to become the holder of the entire issued and to be issued ordinary share capital of Innovation. This is to be achieved by the transfer of the Ordinary Shares to Bidco, in consideration for which the Innovation Shareholders shall receive cash consideration on the basis set out in paragraph 2 of this Announcement.

The Scheme is subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Scheme Document. In particular, the Scheme will be subject to the following conditions:

(i) its approval by a majority in number of the Innovation Shareholders who are present and vote, whether in person or by proxy, at the Court Meeting and who represent 75 per cent. in value of the Ordinary Shares voted by those Innovation Shareholders;

(ii) the resolution(s) required to approve and implement the Scheme being duly passed by Innovation Shareholders representing 75 per cent. or more of votes cast at the General Meeting; and

(iii) the approval of the Scheme by the Court (with or without modification but subject to any modification being on terms acceptable to Innovation and Bidco) and the delivery of a copy of the Court Order to the Registrar of Companies.

Once the necessary approvals from Innovation Shareholders and the Court have been obtained and the other Conditions have been satisfied or (where applicable) waived, the Scheme shall then become effective upon delivery of the Court Order to the Registrar of Companies. Subject to satisfaction of the Conditions, the Scheme is expected to become effective by the end of 2015.

The Offer shall lapse if:

· the approval of the requisite majorities of Innovation Shareholders at the Court Meeting and the General Meeting are not obtained by 9 November 2015 or, if earlier, the 22nd day after the expected date of such meetings as set out in the Scheme Document (or, in each case, such later date as may be agreed between Bidco and Innovation);

· the Scheme is not sanctioned by the Court by the 22nd day after the expected date of such hearing as set out in the Scheme Document (or such later date as may be agreed between Bidco and Innovation); or

· the Scheme does not become effective by the Long Stop Date,

provided however that the deadlines for the timing of the Court Meeting, the General Meeting and the Court hearing to approve the Scheme as set out above may be waived by Bidco, and the deadline for the Scheme to become effective may be extended by agreement between Innovation and Bidco.

Upon the Scheme becoming effective, it shall be binding on all Innovation Shareholders, irrespective of whether or not they attended or voted at the Court Meeting or the General Meeting.

Further details of the Scheme, including an indicative timetable for its implementation, shall be set out in the Scheme Document. It is expected that the Scheme Document and the Forms of Proxy accompanying the Scheme Document will be published as soon as practicable and, in any event, (save with the consent of the Panel) within 28 days of this Announcement. The Scheme Document and Forms of Proxy will be made available to all Innovation Shareholders at no charge to them.

15 Conditions to the Offer

The Offer shall be subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Scheme Document, which include (a) approvals and consents received from the UK Financial Conduct Authority and the Guernsey Financial Services Commission; and (b) the satisfaction of all merger control requirements under the laws of Germany, South Africa and Guernsey.

16 De-listing and re-registration

Prior to the Scheme becoming effective, Innovation shall make an application for the cancellation of the listing of Ordinary Shares on the Official List and for the cancellation of trading of the Ordinary Shares on the London Stock Exchange's market for listed securities in each case to take effect from or shortly after the Effective Date. The last day of dealings in Ordinary Shares on the Main Market of the London Stock Exchange is expected to be the Business Day immediately prior to the Effective Date and no transfers shall be registered after 6.00p.m. on that date.

On the Effective Date, share certificates in respect of Ordinary Shares shall cease to be valid and entitlements to Ordinary Shares held within the CREST system shall be cancelled.

It is proposed, as part of the application to Court in connection with the Scheme, to seek an order of the Court pursuant to Section 651 of the Companies Act to re-register Innovation as a private limited company.

17 Disclosure of Interests in Innovation

Save in respect of the irrevocable undertakings and letters of intent referred to in paragraph 6 above, as at the close of business on 27 August 2015 (being the last practicable date prior to the date of this Announcement) neither Bidco nor any of its directors nor, so far as Bidco is aware, any person acting in concert (within the meaning of the Takeover Code) with it has:

(i) any interest in or right to subscribe for any relevant securities of Innovation, nor

(ii) any short positions in respect of relevant Ordinary Shares (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery, nor

(iii) provided an irrevocable commitment or letter of intent to accept or vote in favour of the Offer in respect of relevant securities of Innovation; nor

(iv) borrowed or lent any relevant Ordinary Shares (including, for these purposes, any financial collateral arrangements of the kind referred to in Note 4 on Rule 4.6 of the Takeover Code), save for any borrowed shares which had been either on-lent or sold.

'Interests in securities' for these purposes arise, in summary, when a person has long economic exposure, whether absolute or conditional, to changes in the price of securities (and a person who only has a short position in securities is not treated as interested in those securities). In particular, a person will be treated as having an 'interest' by virtue of the ownership, voting rights or control of securities, or by virtue of any agreement to purchase, option in respect of, or derivative referenced to, securities.

It has not been practicable for Bidco to make enquiries of all of its concert parties in advance of the release of this Announcement. Therefore, all relevant details in respect of Bidco's concert parties shall be included in the Opening Position Disclosure in accordance with Rule 8.1(a) and Note 2(a)(i) on Rule 8 of the Takeover Code.

18 General

Bidco reserves the right to elect (subject to the consent of the Panel) to implement the Offer by way of a takeover offer as an alternative to the Scheme. In such event, the acquisition shall be implemented on substantially the same terms, so far as applicable, as those which would apply to the Scheme (subject to appropriate amendments, including an acceptance condition set at 90 per cent. of the shares to which such offer relates or such lesser percentage, being more than 50 per cent., as Bidco may decide or the Panel may require).

If the Offer is effected by way of a takeover offer and such takeover offer becomes or is declared unconditional in all respects and sufficient acceptances are received in respect of such Offer, Bidco intends to: (i) procure that Innovation makes an application to the London Stock Exchange to cancel the trading of Ordinary Shares on the London Stock Exchange's market for listed securities; and (ii) exercise its rights (to the extent such rights are available) to apply the provisions of Chapter 3 of Part 28 of the Companies Act to acquire compulsorily the remaining Ordinary Shares in respect of which such Offer has not been accepted.

The bases and sources of certain financial information contained in this Announcement are set out in Appendix II to this Announcement. A summary of the irrevocable undertakings and letters of intent given in relation to the Offer is contained in Appendix III to this Announcement. Certain terms used in this Announcement are defined in Appendix IV to this Announcement.

19 Documents available on website

Copies of the following documents shall be made available on Innovation's website at http://investors.innovation-group.com/recommended-acquisition-by-axios-bidco-limited.aspx until the end of the Offer:

· the irrevocable undertakings and letters of intent referred to in paragraph 6 above and summarised in Appendix III to this Announcement;

· the documents relating to the financing of the Scheme referred to in paragraph 11 above;

· the Confidentiality Agreement;

· the Co-operation Agreement; and

· this Announcement.

With the consent of the Panel, which has been given, under Rule 26.1, from the time of publishing of the Scheme Document, the side letter relating to market flex provisions relating to the financing of the Offer will be made available on Innovation's website at http://investors.innovation-group.com/recommended-acquisition-by-axios-bidco-limited.aspx until the end of the Offer.

Enquiries:

Important Notices

HSBC Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the UK. HSBC is acting exclusively as financial adviser to Bidco and Carlyle and no one else in connection with the Offer and shall not be responsible to anyone other than Bidco and Carlyle for providing the protections afforded to clients of HSBC nor for providing advice in connection with the Offer or any matter referred to herein.

Barclays Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the UK. Barclays is acting exclusively as financial adviser to Carlyle and no one else in connection with the Offer and shall not be responsible to anyone other than Carlyle for providing the protections afforded to clients of Barclays nor for providing advice in connection with the Offer or any matter referred to herein.

Investec Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the UK. Investec is acting exclusively for Innovation and no one else in connection with the Offer and shall not be responsible to anyone other than Innovation for providing the protections afforded to clients of Investec nor for providing advice in connection with the Offer or any matter referred to herein.

This Announcement is for information purposes only and does not constitute an offer to sell or an invitation to purchase any securities or the solicitation of an offer to buy any securities, pursuant to the Offer or otherwise. The Offer shall be made solely by means of the Scheme Document or any document by which the Offer is made which shall contain the full terms and Conditions of the Offer, including details of how to vote in respect of the acquisition.

This Announcement has been prepared for the purpose of complying with English law and the Takeover Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

Innovation shall prepare the Scheme Document to be distributed to Innovation Shareholders. Innovation and Bidco urge Innovation Shareholders to read the Scheme Document when it becomes available because it shall contain important information relating to the Offer.

Overseas Shareholders

The release, publication or distribution of this Announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and observe, any applicable requirements.

Unless otherwise determined by Bidco or required by the Takeover Code, and permitted by applicable law and regulation, the Offer shall not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the offer by any such use, means, instrumentality or form within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this Announcement and all documents relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this Announcement and all documents relating to the Offer (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions where to do so would violate the laws in that jurisdiction.

The availability of the Offer to Innovation Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements.

The Offer shall be subject to the applicable requirements of the Takeover Code, the Panel, the London Stock Exchange, the Financial Conduct Authority and the UKLA.

This Announcement does not constitute a prospectus or prospectus equivalent document.

Notice to US Shareholders

The Offer relates to shares of a UK company and is proposed to be effected by means of a scheme of arrangement under the laws of England and Wales. A transaction effected by means of a scheme of arrangement is not subject to proxy solicitation or tender offer rules under the US Exchange Act. Accordingly, the Offer is subject to the disclosure requirements, rules and practices applicable in the United Kingdom to schemes of arrangement, which differ from the requirements of US proxy solicitation or tender offer rules. However, if Bidco were to elect to implement the Offer by means of a takeover offer, such takeover offer shall be made in compliance with all applicable laws and regulations. Such a takeover would be made in the United States by Bidco and no one else. In addition to any such takeover offer, Bidco, certain affiliated companies and the nominees or brokers (acting as agents) may make certain purchases of, or arrangements to purchase, shares in Innovation outside such takeover offer during the period in which such takeover offer would remain open for acceptance. If such purchases or arrangements to purchase were to be made they would be made outside the United States and would comply with applicable law, including the US Exchange Act.

The information contained in this document has neither been approved or disapproved by the SEC or any US state securities commission. Neither the SEC, nor any state securities commission, has passed upon the fairness or merits of the proposal described in, nor upon the accuracy or adequacy of the information contained in, this document.

The financial information included in this announcement has been prepared in accordance with accounting standards applicable in the United Kingdom that may not be comparable to the financial statements of US companies. US generally accepted accounting principles differ in certain respects from IFRS used in the United Kingdom. None of the financial information in this announcement has been audited in accordance with auditing standards generally accepted in the United States or the auditing standards of the Public Accounting Oversights Board (United States).

The receipt of cash pursuant to the Offer by a US Shareholder as consideration pursuant to the terms of the Offer may be a taxable transaction for US federal income tax purposes and under applicable US state and local, as well as foreign and other, tax laws. Each Shareholder is urged to consult his independent professional adviser immediately regarding the tax consequences of the Offer applicable to him or her.

Forward-looking statements

This Announcement contains statements about Bidco and Innovation that are or may be forward-looking statements. All statements other than statements of historical facts included in this Announcement may be forward-looking statements. Without limitation, any statements preceded or followed by or that include the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "estimates", "projects" or words or terms of similar substance or the negative thereof, are forward-looking statements. Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Bidco's or Innovation's operations and potential synergies resulting from the Offer; and (iii) the effects of government regulation on Bidco's or Innovation's business.

Such forward-looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward-looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. Bidco disclaims any obligation to update any forward-looking or other statements contained herein, except as required by applicable law.

No profit forecasts or estimates

No statement in this Announcement is intended as a profit forecast or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share for Bidco or Innovation, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Bidco or Innovation, as appropriate.

Disclosure requirements of the Takeover Code

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange 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 securities exchange 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 securities exchange 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 securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange 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 securities exchange 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 securities exchange 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 Panel's website at http://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 and Availability of Hard Copies

A copy of this Announcement shall be made available subject to certain restrictions relating to persons resident in Restricted Jurisdictions on Innovation's website at http://investors.innovation-group.com/recommended-acquisition-by-axios-bidco-limited.aspx by no later than 12 noon (London time) on 1 September 2015. For the avoidance of doubt, the contents of this website are not incorporated into and do not form part of this Announcement.

You may request a hard copy of this Announcement by contacting Capita Asset Services on 0371 664 0300 or if calling from outside the UK on +44 (0) 208 639 3399. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. We are open between 9.00 a.m. to 5.30 p.m., Monday to Friday excluding public holidays in England and Wales. You may also request that all future documents, announcements and information to be sent to you in relation to the Offer should be in hard copy form.

Electronic Communications

Please be aware that addresses, electronic addresses and certain information provided by Innovation Shareholders, persons with information rights and other relevant persons for the receipt of communications from Innovation may be provided to Bidco during the Offer Period as requested under Section 4 of Appendix 4 of the Takeover Code to comply with Rule 2.12(c) of the Takeover Code.

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

APPENDIX ICONDITIONS AND FURTHER TERMS OF THE OFFER

Part A: Conditions of the Offer

The Offer is conditional upon the Scheme becoming unconditional and effective, subject to the Takeover Code, by not later than the Long Stop Date or such later date (if any) as Bidco and Innovation may agree and (if required) the Panel and the Court may allow.

1 The Scheme shall be subject to the following conditions:

1.1 its approval by a majority in number of Innovation Shareholders, who are present and vote, whether in person or by proxy, at the Court Meeting and who represent 75 per cent. or more in value of the Ordinary Shares voted by those Innovation Shareholders, on or before 9 November 2015 or, if earlier, the 22nd day after the expected date of the Court Meeting as set out in the Scheme Document (or, in each case, such later date as may be agreed between Bidco and Innovation and the Court may allow);

1.2 the resolution(s) required to approve and implement the Scheme being duly passed by Innovation Shareholders representing 75 per cent. or more of votes cast at the General Meeting on or before 9 November 2015 or, if earlier, the 22nd day after the expected date of the General Meeting as set out in the Scheme Document (or, in each case, such later date as may be agreed by Bidco and Innovation and the Court may allow); and

1.3 the sanction of the Scheme by the Court (with or without modification but subject to any modification being on terms acceptable to Innovation and Bidco) on or before the 22nd day after the expected date of the Court sanction hearing as set out in the Scheme Document (or such later date as may be agreed by Bidco and Innovation and the Court may allow) and the delivery of a copy of the Court Order to the Registrar of Companies.

2 In addition, subject as stated in Part B below and to the requirements of the Panel, the Offer shall be conditional upon the following Conditions and, accordingly, the Court Order shall not be delivered to the Registrar of Companies unless such Conditions (as amended if appropriate) have been satisfied or, where relevant, waived:

(a) the German Federal Cartel Office (FCO) (i) approving the Offer by formal decision pursuant to Sec. 40 para. 1 sentence 1 of the German Act Against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen, GWB) or declaring in writing that the pre-conditions for a prohibition pursuant to Sec. 36 of the GWB are not present; or (ii) declaring that the Offer does not need to be filed; or (iii) not declaring within the time limits of Sec. 40 para. 1 sentence 1 of the GWB that the main examination procedure has been initiated; or (iv) not prohibiting the Offer within the examination period of Sec. 40 para. 2 sentence 2 GWB or the extended examination period of Sec. 40 para. 2 sentence 4 no. 1 GWB;

(b) the South African Competition Commission (i) approving the Offer pursuant to the provisions of the Competition Act, no. 89 of 1998 in the currently applicable version or (ii) the South African Competition Commission not issuing a decision within the statutory time limits or, (iii) if the Offer qualifies as a "large merger", the South African Competition Tribunal approving the Offer;

(c) if required by applicable law, application for approval of the Channel Islands Competition and Regulatory Authorities ("CICRA") having been made under the Competition (Prescribed Mergers and Acquisitions) (Guernsey) Regulations, 2012 in connection with the Offer or the proposed acquisition of control of Innovation or any other member of the Wider Innovation Group by any member of the Wider Bidco Group and such approval of CICRA having been obtained and remaining in full force and effect at the time at which the Offer becomes otherwise wholly unconditional;

(d) other than the matters referred to in Condition 1, all notifications, notices, filings or applications which, in the reasonable opinion of Bidco, are necessary or required under any applicable legislation or regulation of any relevant jurisdiction having been made in connection with the Offer or any aspect of the Offer or its financing and all necessary waiting periods (including any extensions thereof) under any applicable legislation or regulation of any jurisdiction having expired, lapsed or been waived (as appropriate) and all applicable statutory and regulatory obligations in any relevant jurisdiction having been complied with in each case in respect of the Offer and all Authorisations necessary or required in any jurisdiction for or in respect of the Offer and the acquisition or the proposed acquisition of any shares or other securities in, or control or management of, Innovation or any other member of the Wider Innovation Group by any member of the Wider Bidco Group having been obtained, or deemed by effluxion of time to have been given, in terms and in a form satisfactory to Bidco (acting reasonably) from all appropriate Third Parties or (without prejudice to the generality of the foregoing) from any person or bodies with whom any member of the Wider Innovation Group has entered into contractual arrangements, and all such Authorisations necessary or appropriate to carry on the business of any member of the Wider Innovation Group in any jurisdiction having been obtained and all such Authorisations which are material in the context of the Wider Innovation Group taken as a whole remaining in full force and effect at the time at which the Offer becomes otherwise wholly unconditional and there being no notice or intimation of an intention to revoke, suspend, restrict, modify or not to renew such Authorisations;

(e) the FCA having approved, or having been deemed through effluxion of time to have approved, all such change of controller applications as are required to be made in respect of the acquisition or the proposed acquisition of any shares or other securities in, or control or management of, Innovation or any other member of the Wider Innovation Group by any member of the Wider Bidco Group in connection with the Offer in terms and in a form satisfactory to Bidco (acting reasonably) and all such approvals remain in full force and effect at the time at which the Offer becomes otherwise wholly unconditional and there being no notice or intimation of an intention to revoke, suspend, restrict, modify or not to renew such approval;

(f) all necessary written notifications of no objection from the Guernsey Financial Services Commission in respect of the acquisition or the proposed acquisition of any shares or other securities in, or control or management of, Innovation or any other member of the Wider Innovation Group by any member of the Wider Bidco Group in connection with the Offer (the "GFSC Notifications") having been obtained from, or deemed through effluxion of time to have been given by, the Guernsey Financial Services Commission in terms and in a form satisfactory to Bidco (acting reasonably) and all such GFSC Notifications and Authorisations which are necessary or appropriate to carry on the business of any member of the Wider Innovation Group in Guernsey remaining in full force and effect at the time at which the Offer becomes otherwise wholly unconditional and there being no notice or intimation of an intention to revoke, suspend, restrict, modify or not to renew such GFSC Notifications or Authorisations;

(g) unconditional approval (to the extent required) of the Offer having been granted in terms of the Republic of South Africa's Short-term Insurance Act, No. 53 of 1998 by the Registrar of Short-term Insurance or, if such approval is subject to conditions, such conditions being acceptable to Innovation and Bidco as may be applicable, (acting reasonably) who shall indicate their acceptance of such conditions by giving written notice to that effect to the other;

(h) other than the matters referred to in Condition 1, no anti-trust regulator or Third Party having given notice of a decision to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference (and in each case, not having withdrawn the same), or having required any action to be taken or otherwise having done anything, or having enacted, made or proposed any statute, regulation, decision, order or change to published practice (and in each case, not having withdrawn the same) and there not continuing to be outstanding any statute, regulation, decision or order which would or might reasonably be expected to:

(i) require, prevent or delay the divestiture or alter the terms envisaged for such divestiture by any member of the Wider Bidco Group or by any member of the Wider Innovation Group of all or any part of its businesses, assets or property or impose any material limitation on the ability of all or any of them to conduct their businesses (or any part thereof) or to own, control or manage any of their assets or properties (or any part thereof);

(ii) except pursuant to Chapter 3 of Part 28 of the Companies Act, require any member of the Wider Bidco Group or the Wider Innovation Group to acquire or offer to acquire any shares, other securities (or the equivalent) or interest in any member of the Wider Innovation Group or any asset owned by any Third Party (other than in the implementation of the Offer);

(iii) impose any material limitation on, or result in a material delay in, the ability of any member of the Wider Bidco Group directly or indirectly to acquire, hold or to exercise effectively all or any rights of ownership in respect of shares or other securities in Innovation or on the ability of any member of the Wider Innovation Group or any member of the Wider Bidco Group directly or indirectly to hold or exercise effectively all or any rights of ownership in respect of shares or other securities (or the equivalent) in, or to exercise voting or management control over, any member of the Wider Innovation Group;

(iv) otherwise materially adversely affect any or all of the business, assets, profits or prospects of any member of the Wider Innovation Group or any member of the Wider Bidco Group;

(v) result in any member of the Wider Innovation Group or any member of the Wider Bidco Group ceasing to be able to carry on business under any name under which it presently carries on business;

(vi) make the Offer, its implementation or the acquisition or proposed acquisition of any shares or other securities in, or control or management of, Innovation by any member of the Wider Bidco Group void, unenforceable and/or illegal under the laws of any relevant jurisdiction, or otherwise, directly or indirectly materially prevent or materially prohibit, restrict or restrain, or materially delay or otherwise interfere with the implementation of, or impose material additional conditions or obligations with respect to, or otherwise challenge, impede, interfere or require amendment of the Offer or the acquisition or proposed acquisition of any shares or other securities in, or control or management of, Innovation by any member of the Wider Bidco Group;

(vii) require, prevent or materially delay a divestiture by any member of the Wider Bidco Group of any shares or other securities (or the equivalent) in any member of the Wider Innovation Group or any member of the Wider Bidco Group; or

(viii) impose any material limitation on the ability of any member of the Wider Bidco Group of any member of the Wider Innovation Group to conduct, integrate or co-ordinate all or any part of its business with all or any part of the business of any other member of the Wider Bidco Group and/or the Wider Innovation Group,

and all applicable waiting and other time periods (including any extensions thereof) during which any such antitrust regulator or Third Party could decide to take, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference or take any other step under the laws of any jurisdiction in respect of the Offer or the acquisition or proposed acquisition of any Ordinary Shares or otherwise intervene having expired, lapsed or been terminated;

(i) except as Disclosed, there being no provision of any arrangement, agreement, lease, licence, franchise, permit or other instrument to which any member of the Wider Innovation Group is a party or by or to which any such member or any of its assets is or may be bound, entitled or be subject or any event or circumstance which, as a consequence of the Offer or the acquisition or the proposed acquisition by any member of the Wider Bidco Group of any shares or other securities (or the equivalent) in Innovation or because of a change in the control or management of any member of the Wider Innovation Group or otherwise, would or might reasonably be expected to, to an extent which is material in the context of the Wider Innovation Group as a whole, result in:

(i) any monies borrowed by, or any other indebtedness, actual or contingent, of, or any grant available to, any member of the Wider Innovation Group being or becoming repayable, or capable of being declared repayable, immediately or prior to its or their stated maturity date or repayment date, or the ability of any such member to borrow monies or incur any indebtedness being withdrawn or inhibited or being capable of becoming or being withdrawn or inhibited;

(ii) the creation, save in the ordinary and usual course of business, or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of any member of the Wider Innovation Group or any such mortgage, charge or other security interest (whenever created, arising or having arisen) becoming enforceable;

(iii) any such arrangement, agreement, lease, licence, franchise, permit or other instrument being terminated or the rights, liabilities, obligations or interests of any member of the Wider Innovation Group being adversely modified or adversely affected or any obligation or liability arising or any adverse action being taken or arising thereunder;

(iv) any liability of any member of the Wider Innovation Group to make any severance, termination, bonus or other payment to any of its directors, or other officers;

(v) the rights, liabilities, obligations, interests or business of any member of the Wider Innovation Group under any such arrangement, agreement, licence, permit, lease or instrument or the interests or business of any member of the Wider Innovation Group in or with any other person or body or firm or company (or any arrangement or arrangement relating to any such interests or business) being or becoming capable of being terminated, or adversely modified or affected or any onerous obligation or liability arising or any adverse action being taken thereunder;

(vi) any member of the Wider Innovation Group ceasing to be able to carry on business under any name under which it presently carries on business;

(vii) the value of, or the financial or trading position or prospects of, any member of the Wider Innovation Group being prejudiced or adversely affected; or

(viii) the creation or acceleration of any liability (actual or contingent) by any member of the Wider Innovation Group other than trade creditors or other liabilities incurred in the ordinary course of business,

and no event having occurred which, under any provision of any arrangement, agreement, licence, permit, franchise, lease or other instrument to which any member of the Wider Innovation Group is a party or by or to which any such member or any of its assets are bound, entitled or subject, would or might result in any of the events or circumstances as are referred to in Conditions (i)(i) to (viii);

(j) except as Disclosed, no member of the Wider Innovation Group having since 30 September 2014:

(i) issued or agreed to issue or authorised or proposed or announced its intention to authorise or propose the issue, of additional shares of any class, or securities or securities convertible into, or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares, securities or convertible securities or transferred or sold or agreed to transfer or sell or authorised or proposed the transfer or sale of Ordinary Shares out of treasury (except, where relevant, as between Innovation and wholly owned subsidiaries of Innovation or between the wholly owned subsidiaries of Innovation and except for the issue or transfer out of treasury of Ordinary Shares on the exercise of employee share options or vesting of employee share awards in the ordinary course under the Innovation Employee Incentive Plans);

(ii) recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus issue of shares, dividend or other distribution (whether payable in cash or otherwise) other than dividends (or other distributions whether payable in cash or otherwise) lawfully paid or made by any wholly owned subsidiary of Innovation to Innovation or any of its wholly owned subsidiaries;

(iii) other than pursuant to the Offer (and except for transactions between Innovation and its wholly owned subsidiaries or between the wholly owned subsidiaries of Innovation and transactions in the ordinary course of business) implemented, effected, authorised or announced its intention to implement, effect, authorise or propose any merger, demerger, reconstruction, amalgamation, scheme, binding commitment or acquisition or disposal of assets or shares or loan capital (or the equivalent thereof) in any undertaking or undertakings;

(iv) except for transactions between Innovation and its wholly owned subsidiaries or between the wholly owned subsidiaries of Innovation and for disposals of assets in the ordinary course of business, disposed of, or transferred, mortgaged or created any security interest over any asset or any right, title or interest in any asset or authorised, proposed or announced any intention to do so;

(v) except for transactions between Innovation and its wholly owned subsidiaries or between the wholly owned subsidiaries of Innovation, issued, authorised or proposed or announced an intention to authorise or propose, the issue of or made any change in or to the terms of any debentures or incurred or materially increased any indebtedness or, except in the ordinary course of business, become subject to any contingent liability;

(vi) entered into or materially varied or authorised or announced its intention to enter into or materially vary any contract, arrangement, agreement, transaction or binding commitment (whether in respect of capital expenditure or otherwise) except in the ordinary course of business on terms which are (a) of a long term, unusual or onerous nature or magnitude or which are or (b) which involve or could involve an obligation of a nature or magnitude which is likely to be materially restrictive on the business of any member of the Wider Innovation Group;

(vii) entered into or materially varied the terms of, or made any offer (which remains open for acceptance) to enter into or materially vary the terms of any contract, service agreement, commitment or arrangement with any director or senior executive of any member of the Wider Innovation Group;

(viii) proposed, agreed to provide or modified the terms of any share option scheme, incentive scheme or other benefit relating to the employment or termination of employment of any employee of the Wider Innovation Group;

(ix) purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares or other securities or reduced or, except in respect of the matters mentioned in sub-paragraph (i) above, made any other change to any part of its share capital;

(x) except in the ordinary course of business, waived, compromised or settled any claim which is material in the context of the Wider Innovation Group taken as a whole;

(xi) terminated or varied the terms of any agreement or arrangement between any member of the Wider Innovation Group and any other person in a manner which would or might reasonably be expected to have a material adverse effect on the financial position of the Wider Innovation Group taken as a whole or in the context of the Offer;

(xii) made any alteration to its memorandum or articles of association or other incorporation documents;

(xiii) except in relation to changes made or agreed as a result of, or arising from, changes to legislation, made or agreed or consented to any change to:

(a) the terms of the trust deeds and rules constituting the pension scheme(s) established by any member of the Wider Innovation Group for its directors, employees or their dependants;

(b) the contributions payable to any such scheme(s) or to the benefits which accrue, or to the pensions which are payable, thereunder;

(c) the basis on which qualification for, or accrual or entitlement to, such benefits or pensions are calculated or determined; or

(d) the basis upon which the liabilities (including pensions) of such pension schemes are funded, valued, made, agreed or consented to;

(xiv) been unable, or admitted in writing that it is unable, to pay its debts or commenced negotiations with one or more of its creditors with a view to rescheduling or restructuring any of its indebtedness, or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business;

(xv) (other than in respect of a member of the Wider Innovation Group which is dormant and was solvent at the relevant time) taken or proposed any steps, corporate action or had any legal proceedings instituted or threatened against it in relation to the suspension of payments, a moratorium of any indebtedness, its winding-up (voluntary or otherwise), dissolution, reorganisation or for the appointment of a receiver, administrator, manager, administrative receiver, trustee or similar officer of all or any of its assets or revenues or any analogous or equivalent steps or proceedings in any jurisdiction or appointed any analogous person in any jurisdiction or had any such person appointed;

(xvi) (except for transactions between Innovation and its wholly owned subsidiaries or between the wholly owned subsidiaries), made, authorised, proposed or announced an intention to propose any change in its loan capital;

(xvii) entered into, implemented or authorised the entry into, any joint venture, asset or profit sharing arrangement, partnership or merger of business or corporate entities; or

(xviii) entered into any agreement, arrangement, binding commitment or contract or passed any resolution or made any offer (which remains open for acceptance) with respect to or announced an intention to, or to propose to, effect any of the transactions, matters or events referred to in this Condition (j);

(k) except as Disclosed, since 30 September 2014 there having been:

(i) no adverse change and no circumstance having arisen which would or might be expected to result in any adverse change in, the business, assets, financial or trading position or profits or prospects or operational performance of any member of the Wider Innovation Group which is material in the context of the Wider Innovation Group or in the context of the Offer;

(ii) no litigation, arbitration proceedings, prosecution or other legal proceedings having been threatened, announced or instituted by or against or remaining outstanding against or in respect of, any member of the Wider Innovation Group or to which any member of the Wider Innovation Group is or may become a party (whether as claimant, defendant or otherwise) having been threatened, announced, instituted or remaining outstanding by, against or in respect of, any member of the Wider Innovation Group, in each case which might reasonably be expected to have a material adverse effect on the Wider Innovation Group taken as a whole or in the context of the Offer;

(iii) no enquiry, review or investigation by, or complaint or reference to, any Third Party against or in respect of any member of the Wider Innovation Group having been threatened, announced or instituted or remaining outstanding by, against or in respect of any member of the Wider Innovation Group, in each case which might reasonably be expected to have a material adverse effect on the Wider Innovation Group taken as a whole or in the context of the Offer;

(iv) no contingent or other liability having arisen or become apparent to Bidco or increased other than in the ordinary course of business which is reasonably likely to affect adversely the business, assets, financial or trading position or profits or prospects of any member of the Wider Innovation Group to an extent which is material in the context of the Wider Innovation Group taken as a whole or in the context of the Offer; and

(v) no steps having been taken and no omissions having been made which are likely to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the Wider Innovation Group which is necessary for the proper carrying on of its business and the withdrawal, cancellation, termination or modification of which might reasonably be expected to have a material adverse effect on the Wider Innovation Group taken as a whole or in the context of the Offer;

(l) except as Disclosed, Bidco not having discovered:

(i) that any financial, business or other information concerning the Wider Innovation Group publicly announced prior to this date of the announcement or disclosed at any time to any member of the Wider Bidco Group by or on behalf of any member of the Wider Innovation Group prior to the date of this announcement is misleading, contains a material misrepresentation of any fact, or omits to state a fact necessary to make that information not misleading, in any such case to a material extent in the context of the Wider Innovation Group taken as a whole or in the context of the Offer;

(ii) that any member of the Wider Innovation Group or any partnership, company or other entity in which any member of the Wider Innovation Group has a significant economic interest and which is not a subsidiary undertaking of Innovation is subject to any liability, contingent or otherwise and which is material in the context of the Wider Innovation Group taken as a whole or in the context of the Offer;

(iii) that any past or present member of the Wider Innovation Group has not complied in all material respects with all applicable legislation, regulations or other requirements of any jurisdiction or any Authorisations relating to the use, treatment, storage, carriage, disposal, discharge, spillage, release, leak or emission of any waste or hazardous substance or any substance likely to impair the environment (including property) or harm human health or otherwise relating to environmental matters or the health and safety of humans, which non-compliance would be likely to give rise to any material liability including any penalty for non-compliance (whether actual or contingent) on the part of any member of the Wider Innovation Group;

(iv) that there is or is likely to be any obligation or liability (whether actual or contingent) or requirement to make good, remediate, repair, reinstate or clean up any property or asset currently or previously owned, occupied, operated or made use of or controlled by any past or present member of the Wider Innovation Group (or on its behalf), or in which any such member may have or previously have had or be deemed to have had an interest, under any environmental legislation, common law, regulation, notice, circular, Authorisation or order of any Third Party in any jurisdiction or to contribute to the cost thereof or associated therewith or indemnify any person in relation thereto, in each case which is material in the context of the Wider Innovation Group taken as a whole or in the context of the Offer;

(v) that circumstances exist (whether as a result of making the Offer or otherwise) which would be likely to lead to any Third Party taking any steps which would in any such case be reasonably likely to result in any actual or contingent liability to improve or install new plant or equipment or to make good, repair, reinstate or clean up any property of any description or any asset now or previously owned, occupied or made use of by any past or present member of the Wider Innovation Group (or on its behalf) or by any person for which a member of the Wider Innovation Group is or has been responsible, or in which any such member may have or previously have had or be deemed to have had an interest, which is material in the context of the Wider Innovation Group taken as a whole or in the context of the Offer;

(m) no member of the Wider Innovation Group nor any person that performs or has performed services for or on behalf of any such company is or has engaged in any activity, practice or conduct which would constitute an offence under the Bribery Act 2010, the U.S. Foreign Corrupt Practices Act of 1977 or any other applicable anti-corruption legislation or regulation (including, without limitation the Organisation for Economic Co-operation and Development's Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and any laws or regulations implementing the same);

(n) no past or present member of the Wider Innovation Group has engaged in any activity or business with, or made any investments in, or made any payments to any government, entity or individual covered by any of the economic sanctions administered by the United Nations or the European Union (or any of their respective member states) or the United States Office of Foreign Assets Control or any other governments or supranational body or authority in any jurisdiction;

(o) no asset of any member of the Wider Innovation Group constitutes criminal property as defined by section 340(3) of the Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that definition); or

(p) Bidco not having discovered that circumstances have arisen or events have occurred since the date of this Announcement in relation to any intellectual property owned, used or licensed by the Wider Innovation Group or to any third parties, including:

(i) any member of the Wider Innovation Group losing its title to any intellectual property or any intellectual property owned by the Wider Innovation Group being revoked, cancelled or declared invalid;

(ii) any agreement regarding the use of any intellectual property licensed to or by any member of the Wider Innovation Group being terminated or varied; or

(iii) any claim being filed suggesting that any member of the Wider Innovation Group infringed the intellectual property rights of a third party or any member of the Wider Innovation Group being found to have infringed the intellectual property rights of a third party,

in each case, which is material in the context of the Wider Innovation Group taken as a whole or in the context of the Offer.

Part B: Certain further terms of the Offer

1 Subject to the requirements of the Panel, Bidco reserves the right to waive:

(a) any of the Conditions set out in the above Condition 1 for the timing of the Court Meeting, General Meeting, and the Court hearing to sanction the Scheme and the effectiveness of the Scheme. If any such deadline is not met, Bidco shall make an announcement by 8.00 a.m. on the Business Day following such deadline confirming whether it has invoked or waived the relevant Condition or agreed with Innovation to extend the deadline in relation to the relevant Condition; and

(b) in whole or in part, all or any of the above Conditions 2(a) to (p) (inclusive).

2 If Bidco is required by the Panel to make an offer for Ordinary Shares under the provisions of Rule 9 of the Takeover Code, Bidco may make such alterations to any of the above Conditions and terms of the Offer as are necessary to comply with the provisions of that Rule.

3 The Offer shall lapse if:

(a) in so far as the Offer or any matter arising from or relating to the Scheme or Offer constitutes a concentration with a Community dimension within the scope of the Regulation, the European Commission either initiates proceedings under Article 6(1)(c) of the Regulation or makes a referral to a competent authority in the United Kingdom under Article 9(1) of the Regulation and there is then a CMA Phase 2 Reference; or

(b) in so far as the Offer or any matter arising from the Scheme or Offer does not constitute a concentration with a Community dimension within the scope of the Regulation, the Scheme or Offer or any matter arising from or relating to the Offer becomes subject to a CMA Phase 2 Reference,

in each case, before the date of the Court Meeting.

4 Conditions 2(a) to 2(p) (inclusive) of this Appendix I must be fulfilled, or be or remain satisfied or (if capable of waiver) be waived, prior to the commencement of the court hearing to sanction the Scheme, failing which the Offer will lapse and the Scheme will not proceed. Bidco shall be under no obligation to waive (if capable of waiver), to determine to be or remain satisfied or to treat as fulfilled any of Conditions 2(a) to (p) (inclusive) by a date earlier than the latest date for the fulfilment of that Condition notwithstanding that the other Conditions of the Offer may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such Conditions may not be capable of fulfilment.

5 If, on or after the date of this Announcement, but prior to the Effective Date, any dividend or other distribution is declared, paid or made or payable by Innovation (a "relevant distribution"), Bidco reserves the right (without prejudice to any right of Bidco), with the consent of the Panel, to invoke Condition 2(j)(ii) above) to reduce the consideration payable under the Offer in respect of an Ordinary Share by the aggregate amount of such dividend or distribution.

If any such dividend or distribution occurs, any reference in this Announcement to the Offer Price shall be deemed to be a reference to the Offer Price as so reduced. If such reduction occurs, notwithstanding the terms on which the Ordinary Shares are expressed to be acquired by Bidco pursuant to the Offer in Appendix I, the Ordinary Shares shall be acquired by or on behalf of Bidco pursuant to the Offer fully paid and free from all liens, equities, charges, encumbrances, options, rights of pre-emption and any other third party rights and interests of any nature and together with all rights now and hereafter attaching to such shares, including, without limitation, voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid, or any other return of capital (whether by reduction of share capital or share premium account or otherwise) made, on or after the date of this Announcement.

To the extent that such a dividend or distribution has been declared, paid, made or is payable and is or shall be: (i) transferred pursuant to the Offer on a basis which entitles Bidco to receive the dividend or distribution and to retain it; or (ii) cancelled, the Offer Price shall not be subject to change in accordance with this paragraph.

Any exercise by Bidco of its rights referred to in this paragraph shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the Offer.

6 Bidco reserves the right to elect (with the consent of the Panel) to implement the Offer by way of a takeover offer as it may determine in its absolute discretion. In such event, the acquisition shall be implemented on substantially the same terms, so far as applicable, subject to appropriate amendments, including (without limitation) an acceptance condition set at 90 per cent. (or such less percentage, being more than 50 per cent., as Bidco may decide or the Panel may require) of the shares to which such offer relates, so far as applicable, as those which would apply to the Scheme.

7 The Ordinary Shares acquired under the Offer (whether by way of the Scheme or a takeover offer) shall be acquired fully paid and free from all liens, equities, charges, encumbrances, options, rights of pre-emption and any other third party rights and interests of any nature and together with all rights now or hereafter attaching or accruing to them, including, without limitation, voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid, or any other return of capital (whether by reduction of share capital or share premium account or otherwise) made, on or after the date of this Announcement.

8 The availability of the Offer to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements.

9 The Offer is not being made, directly or indirectly, in, into or from, or by use of the mails of, or by any means of instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of, any jurisdiction where to do so would violate the laws of that jurisdiction.

10 The Offer is governed by the law of England and Wales and is subject to the jurisdiction of the English courts and to the Conditions and further terms set out in this Appendix I and to be set out in the Scheme Document. The Offer shall be subject to the applicable requirements of the Takeover Code, the Panel, the London Stock Exchange, the Financial Conduct Authority and the UKLA.

11 Each of the Conditions shall be regarded as a separate Condition and shall not be limited by reference to any other Condition.

12 Under Rule 13.5 of the Takeover Code, Bidco may not invoke a condition to the Offer so as to cause the offer not to proceed, to lapse or to be withdrawn unless the circumstances which give rise to the right to invoke the Condition are of material significance to Bidco in the context of the Offer. Condition 1 is not subject to this provision of the Code.

APPENDIX IISOURCES OF INFORMATION AND BASES OF CALCULATION

(i) The value placed by the Offer on the existing issued and to be issued share capital of Innovation is based on 1,227,302,188 Ordinary Shares in issue on 27 August 2015, being the last dealing day prior to the date of this Announcement.

(ii) The Closing Prices on 27 August 2015 are taken from the Daily Official List.

(iii) The volume weighted average prices for Ordinary Shares are derived from Bloomberg.

(iv) Unless otherwise stated, the financial information relating to Innovation is extracted from the audited consolidated financial statements of Innovation for the financial year to 30 September 2014, prepared in accordance with IFRS.

(v) The number of Ordinary Shares in respect of which options shall become exercisable as a result of the Offer is 19,191,905 Ordinary Shares. Vesting of options under the Innovation Employee Incentive Plans is dependent on the time for which they have been held and the degree to which performance targets are satisfied. This figure assumes: (i) closing on 30 November 2015; (ii) that none of the current unvested Innovation Performance Share Plan grants will vest as to more than 48% of the shares under option and does not include any dividend equivalents; and (iii) all sharesave options will be exercised on 30 November 2015.

APPENDIX IIIIRREVOCABLE UNDERTAKINGS AND LETTERS OF INTENT

Innovation Directors' Irrevocable Undertakings

These irrevocable undertakings will remain binding if a higher competing offer for the entire issued and to be issued share capital of Innovation is made, but will cease have effect: (i) if Bidco has not made the Announcement by 11.59 p.m. on 28 August 2015 (or such later time and date as Innovation and Bidco may agree); (ii) if Bidco announces, with the consent of the Takeover Panel and before the Scheme Document is published, that it does not intend to proceed with the Scheme and no new, revised or replacement Scheme or Offer is announced by Bidco; or (iii) on the earlier of (a) the Long Stop Date or (b) the date on which the Offer (whether implemented by way of a Scheme or a takeover offer) is withdrawn or lapses in accordance with its terms.

Other Innovation Shareholders

These irrevocable undertakings cease to have effect: (i) if Bidco announces, with the consent of the Takeover Panel and before the Scheme Document is published, that it does not intend to proceed with the Scheme and no new, revised or replacement Scheme or Offer is announced by Bidco; or (ii) if the Scheme does not become effective, lapses or is withdrawn (other than as a result of Bidco exercising its right to implement the Offer by way of a takeover offer); (iii) if a third party announces a firm intention to make an offer for the Ordinary Shares and such offer would provide for a consideration of no less value than 110 per cent. of the value of the consideration under the Offer; and (iv) in the case of the undertakings from Henderson Global Investors Limited and AlphaGen Capital Limited, if the undertaking has not otherwise terminated by 29 February 2016.

The irrevocable undertakings given by Innovation Shareholders prevent such Innovation Shareholders from selling all or any part of their Ordinary Shares.

Letters of intent

The following holders, controllers, or beneficial owners of Ordinary Shares have delivered to Bidco letters of intent to accept the Offer:

APPENDIX IVDEFINITIONS

The following definitions apply throughout this Announcement unless the context requires otherwise:

For the purposes of this Announcement, "subsidiary", "subsidiary undertaking", "undertaking" and "associated undertaking" have the respective meanings given thereto by the Companies Act.

All references to "pounds", "pounds Sterling", "Sterling", "£", "pence", "penny" and "p" are to the lawful currency of the United Kingdom.

All references to "US$", "$" and "US Dollars" are to the lawful currency of the United States.

All the times referred to in this Announcement are London times unless otherwise stated.

References to the singular include the plural and vice versa.