TXH.L Regulatory News (TXH)

For immediate release

23 June 2014

Clarification statement regarding the recommended acquisition of Tex Holdings plc ("Tex" or the "Offeree") by Le Bas Investment Trust Limited ("Bidder" or the "Offeror") (the "Offer")

Introduction

This announcement is made on behalf of Tex and Bidder. This statement is being made at the request of The Panel on Takeovers and Mergers (the "Panel") in order to clarify a number of points regarding the content of the Tex Scheme Circular dated 9 June 2014 (the "Scheme Circular").

The Offeror concert party

The table below sets out the identity, relationship with the Offeror and shareholdings in Tex of Tex shareholders that are considered to be acting in concert with the Offeror (as defined in The City Code on Takeovers and Mergers (the "Code")) (the "Offeror Concert Party").

Intentions of the Offeror with regard to the business, employees and pension schemes of Tex

The Offeror has confirmed its position in relation to its intentions as follows:

I. Its intentions with regard to the continued employment of the employees and management of the Offeree and of its subsidiaries are to continue the employment of those currently employed and not to make any material change in their conditions of employment.

II. Its strategic plan in relation to the Offeree and its subsidiaries is to continue to operate its business in all material respects as it is currently operated, but with the revised funding arrangements under the new RBSIF invoice discounting facility referred to below and combination of some management, administrative and pension management functions between members of the wider Offeror group (including the Offeree and its subsidiaries). The Offeror does not intend that its acquisition of the Offeree would have any repercussions on employment or the locations of the places of business of the Offeree or its subsidiaries.

III. It intends that the Offeree and its subsidiaries will continue to make employer contributions into the Offeree's pension scheme for existing members and that no changes will be made in relation to the accrual of benefits for existing members and that the Offeree's pension scheme will remain closed to new members. In relation to the deficit within the Offeree's pension scheme, the intention of the Offeror is to make available part of the surplus in The Pension and Assurance Scheme of Edward Le Bas Limited of which it is a constituent company should the trustees of The Pension and Assurance Scheme of Edward Le Bas Limited receive advice that it would be appropriate or necessary to do so.

IV. The Offeror has no intention to redeploy any of the fixed assets of the Offeree.

V. If the scheme is completed, an application will be made to the UK Listing Authority for a cancellation of the listing of the shares in the Offeree to take effect at completion.

Views of the Independent Directors on the Offer including the Offeror's plans for the Offeree and its employees

The Independent Directors (being Mr Christopher Palmer-Tomkinson and Mr David Redhead) believe that the Offer is in the best interests of Tex stakeholders, and specifically its employees and members of the Tex defined benefit pension scheme. In forming their opinion the Independent Directors have considered the intentions of the Offeror set out within this statement. The Independent Directors note that the Offeror's intentions are to continue to operate Tex's business in all material respects as it is currently operated. Having considered the Offeror's plans they are of the opinion that Tex will benefit from the cancellation of its listing and from being part of the Offeror group.

Financial information on the Offeror

The audited accounts of the Offeror and its controlling shareholder Le Bas Limited, for each of the years ending 31 March 2013 and 31 March 2012 have been incorporated in the Scheme Circular by reference and are on display on the websites of the Offeror, www.claydonbusinesspark.co.uk under the Corporate section, and Tex www.tex-holdings.co.uk under the Bid Offer section.

RBSIF facilities

In accordance with Rule 24.3(f) of the Code further disclosure is provided below on the terms of the new invoice discounting facilities with RBS (the "RBSIF facilities") which are referred to on page 39 of the Scheme Circular.

The RBSIF facilities are made available to each of Tex Plastics (Derby), Tex Plastics (Barnstaple) and QK Honeycomb. The maximum aggregate facility limit across the three facilities is £4,500,000. The RBSIF facilities have a minimum period of 36 months and a notice period for cancellation/termination of 6 months.

The security granted for the RBSIF facilities are debentures over each of the client borrowers (Tex Plastics (Derby), Tex Plastics (Barnstaple) and QK Honeycomb and Tex is party by virtue of being a guarantor) and an unlimited corporate guarantee granted by each of the client borrowers together with Tex as the parent company. A deed of priority is also to be put in place with NatWest (the existing lender to the Tex group) giving priority to RBSIF over the book debts secured under the RBSIF facilities.

The fees and charges for the RBSIF facilities are: an arrangement fee of £10,000 (plus VAT), an annual service charge of £14,000 (plus VAT) and the facility carries a discount charge on the book debts financed of 1.65% over base (currently 0.5% and therefore a current charge of 2.15%). This discount charge margin (1.65% above base) has been fixed for the initial minimum period of 36 months and this discount charge margin will be renegotiable following the expiry of the 36 month period.

The operational covenants applicable to the RBSIF facilities are: debt turn target for Tex Plastics (Derby) of 93 days; debt turn target for Tex Plastics (Barnstaple) of 79 days and debt turn target for QK Honeycomb of 66 days. There is also a credit note dilution covenant of 5%. Each of these covenants is tested on a 3 month rolling basis.

Copies of the RBSIF facility agreements are available on the websites of Tex and the Offeror.

Notice to Tex shareholders relating to Rule 2.12(c) of the Code

Tex Shareholders should be aware that addresses, electronic addresses and certain information provided by Tex Shareholders, persons with information rights and other relevant persons for the receipt of communications from Tex may be provided to the Offeror during the Offer period as requested under Section 4 of Appendix 4 of the Code.

Responsibility

The Offeror Directors (being Angela Burrows, Richard Burrows and Mark Harrison) each accept responsibility for information contained in this statement in respect of the Offeror; namely the information contained in the sections above headed "The Offeror concert party", "Intentions of the Offeror with regard to the business, employees and pension schemes of Tex" and "Financial information on the Offeror".

The Independent Directors each accept responsibility for information contained in this announcement in respect of the Independent Directors, namely information contained in the section above headed "Views of the Independent Directors on the Offer including the Offeror's plans for the Offeree and its employees".

The Tex Directors, (being Richard Burrows, Chris Parker and the Independent Directors) each accept responsibility for the information contained in this statement being in respect of the Tex Directors, namely information contained in the sections above headed "RBSIF facilities" and "Notice to Tex shareholders relating to Rule 2.12(c) of the Code" .

To the best of the knowledge and belief of the Tex Directors and the Offeror's directors (who have taken all reasonable care to ensure that such is the case), the information contained in this statement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.

Enquiries

The Offeror

Hilde Cobbald Tel: +44(0) 1473 830 055

Tex Holdings PLC

Chris Parker Tel: +44(0) 1473 830 144

Westhouse Securities

Richard Baty / Robert Finlay Tel: +44(0)20 7601 6100