Walker Crips Regulatory News (WCW)

13 March 2012

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, TO US PERSONS, OR INTO THE UNITED STATES, OR INTO OR FROM CANADA OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL

WALKER CRIPS GROUP PLC

("Walker Crips" or the "Company")

Proposed Disposal of

Walker Crips Asset Managers Limited

and

Notice of General Meeting

Walker Crips Group plc, the financial services group, is pleased to announce that it has entered into a conditional share purchase agreement with Liontrust Asset Management plc relating to the proposed disposal of certain of the Company's fund management activities included in Walker Crips Asset Managers Limited, its wholly-owned fund management subsidiary.

WCAM's principal activity is the management of unit trusts and segregated mandates which are distributed to clients, institutional investors and intermediaries, predominantly in the United Kingdom. WCAM's funds are distributed by its in-house sales team and are also available on various fund platforms. As at 29 February 2012, the aggregate AuM relating to the WCAM Funds subject to the Disposal were £603.7 million. For the year ended 31 March 2011, the total turnover relating to the WCAM Funds (subject to the Disposal) was c.£3.6 million and the profit before tax was c.£1.9 million.

As at 12 March 2012 (being the latest practicable date prior to this announcement), the aggregate value of the Consideration receivable from Liontrust in respect of the Disposal was £12.3 million. The Consideration receivable comprises a mix of cash, shares in Liontrust, a convertible unsecured loan stock note issued by Liontrust and an amount linked to the value of the net assets of WCAM at Completion on a pound-for-pound basis. The Consideration is subject to a potential adjustment depending on the aggregate value of the AuM of the WCAM Funds at Completion.

Key highlights (which should be read in conjunction with the full text of this announcement) include:

Stephen Bailey, who is a director of both the Company and WCAM and Jan Luthman who is a director of WCAM, each stand to benefit from the Disposal as a result of their participation in the LTIP. Under the terms of the LTIP awards granted to them, the WCAM Managers would be entitled to, in aggregate, 20 per cent of the consideration payable in relation to the WCAM business managed by the LTIP participants. However it has been agreed between the WCAM Managers and the Company that they will forego their entitlements under the LTIP. As part of the Disposal, the WCAM Managers will each enter into separate arrangements with Liontrust on terms that are acceptable to them. Accordingly the total consideration due from the Purchaser takes into account the effective payment to the WCAM Managers which the Company would otherwise have been required to make.

Due to its size, the Disposal is classified as a Class 1 transaction under the Listing Rules and, accordingly, is conditional, inter alia, on the approval by Shareholders in a general meeting as well as approval from the FSA for a change in controller of WCAM. As a result of the WCAM Managers' participation in the Company's LTIP, the transaction is also a related party transaction under the Listing Rules. The Board has convened a General Meeting to approve matters necessary to implement the Disposal on 5 April 2012. As related parties to the Disposal, neither Stephen Bailey, nor Jan Luthman, are permitted to vote on the Disposal at the General Meeting. The Disposal is also a Class 1 transaction for Liontrust and therefore is also conditional on the approval of Liontrust Shareholders.

The Company has received irrevocable undertakings from its Board (save for Stephen Bailey) and letters of intent from certain Shareholders to vote in favour of the Resolution in respect of 1,478,831 and 11,452,229 Shares, respectively, representing approximately 4.1 per cent. and 31.5 per cent. of the Company's issued share capital, respectively.

The WCAM Managers will abstain from voting at the General Meeting and have each taken all reasonable steps to ensure that their associates also abstain from voting at the General Meeting.

Liontrust has received irrevocable undertakings from its board of directors and letters of intent from certain Liontrust Shareholders to vote in favour of their resolutions relating to the purchase of WCAM at the Liontrust General Meeting in respect of 3,572,767 and 11,673,973 shares in the capital of Liontrust, respectively, representing approximately 9.6 per cent. and 31.5 per cent. of Liontrust's issued share capital, respectively.

A general meeting of the Company has been convened to approve matters necessary to implement the Disposal on 5 April 2012. A circular setting out the details of the Disposal, incorporating a notice convening the General Meeting, will be posted to the Company's shareholders today. The Circular and the Form of Proxy will shortly be made available on the Company's website www.wcgplc.co.uk. The Liontrust General Meeting is expected to take place on 5 April 2012.

Stephen Bailey will resign from his position as a director of the Company with effect from Completion.

Canaccord Genuity Limited is acting as sole financial adviser and sponsor to the Company in relation to the Disposal.

David Gelber, Chairman of Walker Crips, said "WCAM has grown significantly since its inception and in reality has required only modest resources and investment from the Group. However in order for WCAM to fulfil its potential, significantly increased levels of investment in infrastructure, systems and personnel would be required. Following a strategic review, and taking into consideration the views of Stephen and Jan, the Board has decided to instead deploy its resources to its core businesses. The Board also believes that this would be the right time to crystallise value in the best interests of shareholders and the Company for what it considers to be a full and fair price. The Board are pleased that the structure of the transaction will allow the Company to continue to participate in the future development of WCAM through the investment in Liontrust received as part of the consideration."

John Ions, Chief Executive of Liontrust, said "The acquisition of WCAM significantly strengthens our fund management capability. Combining our existing fund managers with Stephen Bailey and Jan Luthman will create one of the strongest ranges of UK equity funds and teams. The addition of Stephen Bailey and Jan Luthman is testament to the fact we invest in fund managers with robust and repeatable investment processes that add value to client portfolios over the long term and that the success of Liontrust over the past couple of years enables us to attract the best talent"

Information extracted from the Circular is set out below.

For further information please contact:

Media enquiries:

Notes:

This announcement contains a number of forward-looking statements relating to Walker Crips and the Continuing Group with respect to, amongst other things, financial condition; results of operations; economic conditions in which the Company operates and in which the Company will operate; the business of the Company and the Continuing Group; future benefits of the Disposal and the Company's management plans and objectives. The Company considers any statements that are not historical facts as "forward-looking statements". They relate to events and trends that are subject to risks and uncertainties that could cause the actual results and financial position of either the Company or the Continuing Group to differ materially from the information presented in the relevant forward-looking statement. When used in this announcement the words "estimate", "intend", "believe", "expect", "should" and similar expressions, as they relate to the Company's management, are intended to identify such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as at the date of this announcement. Neither the Company, nor any member of its group, its Directors or Sponsor, undertake any obligation publicly to update or revise any of the forward-looking statements contained in this announcement.

This announcement is for information purposes only and does not constitute an offer or invitation to acquire or dispose of any securities or investment advice in any jurisdiction.

Canaccord Genuity Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as sponsor and financial adviser exclusively for the Company in connection with the Disposal. Canaccord Genuity Limited is not acting for any other person and will not be responsible to any other person for providing the protections afforded to clients of Canaccord Genuity Limited or for advising any other person in connection with the Disposal.

No representation or warranty, express or implied, is made by Canaccord Genuity Limited or any of their respective directors, officers, employees, advisers or agents as to any of the contents of this announcement and, without limiting the statutory rights (if any) of any person to whom this announcement is issued, no liability whatsoever is accepted by Canaccord Genuity Limited or any of their respective directors, officers, employees, advisers or agents for the accuracy of any information or opinions contained in this announcement or for the omission of any material information.

The following information has been extracted without material adjustment from the Circular. Unless the context otherwise requires, defined terms used in this announcement shall have the meanings ascribed to them in the Appendix to this announcement. Shareholders should read the whole of the Circular to be sent to them and not just rely on the summarised information set out in this announcement.

Background to and reasons for the Disposal

Whilst the fund management business undertaken by WCAM has increased AuM significantly since its inception in 2002, such growth has been achieved with modest resource and investment from the wider Group.

Following a strategic review, the Board recognised that in order for WCAM to continue to expand at its current pace within the Group, it would require significantly increased levels of investment in infrastructure, systems and personnel. Accordingly, the Board is now clear that WCAM would be an attractive investment for a larger fund management group and would benefit from access to a specialist fund management infrastructure, specific sales and distribution resource. The Board has therefore concluded that this is the right time to be selling WCAM and crystallising value in the best interests of shareholders and the Company for what it considers to be a full and fair price. The Board also believes that the Disposal proceeds receivable by the Company (i.e. after deducting the LTIP equivalent entitlement of the WCAM Managers) compares favourably with similar transactions. The Board has the full support of the WCAM Managers in connection with the Disposal.

The Company will continue to participate in the future development of WCAM as part of Liontrust through the investment it will receive as part of the Consideration. Following Completion, the Company will have an interest of approximately 4.0 per cent. of Liontrust's issued share capital and potentially, assuming the CULS are converted and held in their entirety, 8.7 per cent. of Liontrust's issued share capital (both on a fully diluted basis which includes the Consideration Shares, the CULS and dilutive options over Shares in the capital of Liontrust as at 12 March 2012, being the latest practicable date prior to this announcement).

Furthermore, the Board believes that the Continuing Group has core pensions, wealth management and stockbroking businesses that have significant growth opportunities over the longer term and will benefit from the additional resources arising from the Disposal which will be used primarily to drive the profitable expansion of the Continuing Group's private client and intermediary businesses.

Information on WCAM

Overview of WCAM

WCAM is the fund management division of the Group. It is a wholly-owned subsidiary of London York Fund Managers Limited, itself a wholly-owned subsidiary of G&E Investment Services Limited, which in turn is wholly owned by the Company.

WCAM's principal activity is the management of unit trusts and segregated mandates which are distributed to clients, institutional investors and intermediaries, predominantly in the United Kingdom. WCAM's funds are distributed by its in-house sales team and are also available on various fund platforms.

Since inception in 2002, WCAM has built a significant fund management business in terms of AuM. As at 29 February 2012 (being the latest practicable date prior to this announcement), the aggregate AuM of the funds and mandates that are managed by the WCAM Managers and subject to the Disposal was £603.7 million. As at 29 February 2012 (being the latest practicable date prior to this announcement), the WCAM Funds along with their corresponding values are as shown in the following table:

Source: WCAM

The management of certain other funds currently within WCAM will remain with the Continuing Group, details of which are set out in the section 'Funds remaining with the Continuing Group' below.

Financial Information

The table below summarises the financial performance of WCAM (including those funds that are not subject to the Disposal) for the three years ended 31 March 2011:

Although the majority of AuM in WCAM comprises the WCAM Funds, the difference between the financial information for WCAM and the financial information relating solely to the WCAM Funds is due to a combination of factors including (i) the inclusion in 2009 of investment management revenues from activities un-related to the WCAM Funds which were subsequently transferred to a separate division of the Group in 2010; and (ii) a reduction in management fees of non-WCAM off-shore funds during 2010.

For the three financial years ended 31 March 2011, the total turnover relating to the WCAM Funds was £2.8 million, £2.7 million and £3.6 million, respectively. For the three financial years ended 31 March 2011, the corresponding profit before tax relating solely to the WCAM Funds was £1.5 million, £1.3 million and £1.9 million respectively.

As at 30 September 2011, WCAM had unaudited gross assets of £1.5 million and unaudited net tangible assets of £0.5 million.

During the period since 31 March 2011, WCAM has continued to grow. In the 11 months to 29 February 2012 (being the latest practicable date prior to this announcement), WCAM had net inflows (excluding the non-WCAM off-shore funds and the CF UK Fund) of £63.6 million, of which £64.1 million related to the WCAM Funds.

The financial information in the table above has been extracted without material adjustment from the financial information contained in Part III of the Circular and is intended as a summary only.

Management and employees

WCAM's business is managed by the senior management team consisting of Stephen Bailey and Jan Luthman. Mr Bailey and Mr Luthman are supported by three personnel, including the sales and distribution team. Stephen Bailey, who is employed by Walker Crips Group plc, and all the other employees and personnel of WCAM will be transferring to the Purchaser's Group with effect from Completion.

All of the directors of the board of WCAM (being Stephen Bailey, Jan Luthman, David Hetherton, Rodney Fitzgerald, Robert Elliott and David Gelber) and WCAM's company secretary, Phillip Gilfillan, will resign with effect from Completion.

Track record

Over the years, the WCAM Managers have established a strong, credible and consistent investment performance track record in the products they manage. Each of the CF Walker Crips UK Growth Fund and the CF Walker Crips Equity Income Fund are rated "Citywire Selection" by Citywire, with the CF Walker Crips UK Growth Fund having achieved the accolade in each of the past three years, since the programme was initiated by Citywire. Each of Stephen Bailey and Jan Luthman have been rated "Alpha Managers" by Financial Express/Trustnet for the past four consecutive years, since the programme was initiated by Financial Express/Trustnet. The table below summarises the performance of the WCAM Funds (excluding segregated accounts) ranked by quartile within their respective peer groups over selected time periods to 29 February 2012 (being the latest practicable date prior to this announcement):

Source: Morningstar, bid to bid, net income basis in UK Sterling terms

The CF Walker Crips UK Equity Income Fund has outperformed the FTSE All Share Index in seven out of the eight calendar years since its launch in 2003. As at 29 February 2012 (being the latest practicable date prior to this announcement), over the time period in which the CF Walker Crips UK Growth Fund and the CF Walker Crips Equity Income Fund have been under the management of the WCAM Managers, both funds outperformed over 95 per cent. of their peer group competitors.

Funds remaining with the Continuing Group

As part of the Disposal, investment management of the CF Walker Crips Corporate Bond Fund, CF Walker Crips Select Income Trust and CF Walker Crips Global Growth Trust will remain with the Continuing Group. Save for the CF Walker Crips Corporate Bond Fund which is managed by the WCAM Managers, those funds remaining with the Continuing Group will continue to be managed by the current fund manager who will remain employed by the Continuing Group following Completion.

The principal reason for the Continuing Group to retain investment management of the Continuing Funds is the high level of the Company's clients that are invested in these funds. The Board believes that the Continuing Group has the requisite investment management expertise for the asset classes that the Continuing Funds represent and, in the case of the CF Walker Crips Corporate Bond Fund, will appoint the appropriate investment professionals to continue investment management of this fund following Completion.

Accordingly, under the terms of the SPA, the Purchaser and the Company have agreed that the investment management of the Continuing Funds shall, with effect from Completion, be delegated by WCAM to Walker Crips Stockbrokers Limited, a subsidiary company of the Continuing Group. Following Completion and until such time as the Purchaser has reorganised WCAM within its group, the sub-investment management fees paid to the Sub-Investment Manager shall be equal to the existing investment management fees currently received by WCAM less £5,000 per fund. Upon completion of the Purchaser's re-organisation of WCAM within its group, the Sub-Investment Manager will receive investment management fees on the same basis as were received by WCAM prior to the Disposal.

As at 29 February 2012 (being the latest practicable date prior to this announcement), the aggregate AuM of the Continuing Funds was £36.7 million.

Principal terms of the Disposal

The Purchaser will acquire the majority of WCAM's fund management business, comprising the WCAM Funds as set out in the section 'Overview of WCAM' above. In addition, the WCAM Managers and other senior managers and personnel of WCAM will transfer across to the Purchaser.

Completion of the Disposal is subject to, amongst other things

- the passing of the Resolution at the Company's General Meeting;

- the approval of Liontrust's Shareholders at the Liontrust General Meeting;

- receipt of approval from the FSA for a change in controller of WCAM; and

- trail arrangements as at the date of the SPA with the Company's existing advisers for monies introduced into the WCAM Funds remaining unchanged at Completion.

The consideration payable by the Purchaser to the Company is £6 million (subject to a subsequent potential adjustment depending on the level of the WCAM Funds at Completion), payable in cash on Completion plus the CULS and the Consideration Shares. The Company will also receive £447,853 for the estimated value of WCAM's net assets as at Completion (subject to an adjustment on a pound-for-pound basis for the actual level of WCAM's net assets at Completion subject to a cap of £1 million).

Further details of these provisions are contained in the summary of the principal terms of the SPA, which is set out in Part V of the Circular.

Consideration receivable, financial effects of the Disposal and use of proceeds

Consideration receivable

The Consideration that the Company will receive for the Disposal comprises a combination of cash, CULS issued by the Purchaser, the Consideration Shares and the value of WCAM's net assets at Completion on a pound-for-pound basis (the consideration receivable for the net assets being subject to a cap of £1 million). One of the assumptions to the Consideration is that the level of the WCAM Funds at Completion is between £455 million and £685 million. If the level of the WCAM Funds at Completion is greater than £685 million, the Company will receive an additional £0.5 million of consideration in cash. Conversely, if the level of the WCAM Funds at Completion is less than £455 million, the Company must pay the Purchaser £0.5 million. The Consideration will be payable to the Company by Liontrust on or immediately following Completion.

As at 12 March 2012 (being the latest practicable date prior to this announcement), the value of the aggregate consideration receivable by the Company was approximately £12.3 million.

The Company will receive £6 million in cash on Completion as part of the cash element of the Consideration.

The Consideration Shares receivable as part of the Consideration comprise 1,851,719 ordinary shares in the share capital of Liontrust, which the Company intends to use a source of liquidity for re-investment into the Continuing Group over the long-term. As at 12 March 2012 (being the latest practicable date prior to this announcement), the Consideration Shares had an aggregate value of £1.9 million. It should be noted that any future sales of the Consideration Shares by the Company will be subject to orderly marketing restrictions pursuant to the terms of an agreement between the Company and Liontrust to be entered into at Completion. Under the terms of this agreement, for a period of 18 months from the date of Completion, the Company will not be able to dispose of any of the Consideration Shares, or ordinary shares in the capital of Liontrust arising from a conversion of the CULS, without effecting such disposal through Liontrust's broker(s) and will have to comply with any reasonable instructions Liontrust require in relation to any such disposal. There are some exceptions to this including (but not limited to) when the Company is interested in less than 3 per cent. of the Purchaser's ordinary share capital. The Company will also receive, as part of the Consideration, £4 million in CULS issued by Liontrust. The CULS are due for repayment on the fifth anniversary from the date of issue (which will be Completion) or, at the election of the Company, may be converted in whole or in part into new ordinary shares in Liontrust, at a conversion price of 100p per share. Prior to repayment or conversion, the CULS will be subject to interest at the rate of 6 per cent. per annum, payable quarterly.

In addition, the Company will receive in cash an amount linked to the value of WCAM's net assets as at Completion of £447,853, subject to possible adjustment. The Consideration payable in respect of WCAM's net assets will be subject to a cap of £1 million.

Financial effects of the Disposal

Out of the total consideration receivable by the Company for the sale of WCAM, the gross cash proceeds due at Completion will be approximately £6.4 million including the estimated value of WCAM's net assets at Completion (c.£5.7 million net of costs which include VAT), substantially increasing the Company's net cash position.

An unaudited pro forma statement of consolidated net assets, illustrating the effect of the Disposal on the Continuing Group's net assets as at 30 September 2011 as if the Disposal had been undertaken at that date, is set out in Part IV of the Circular. This information has been prepared for illustrative purposes only, is based on the unaudited statement of financial position of the Group and from unaudited internal management accounts of WCAM at 30 September 2011 and shows that the Disposal would have had the effect of increasing the Continuing Group's net assets by over £10 million to an estimated £25 million at 30 September 2011.

The Board believes that the effect of the Disposal on the earnings of the Continuing Group will be earnings dilutive in the short term, although the Directors believe there will be the opportunity to further streamline the central costs of the Continuing Group. This statement does not constitute a profit forecast and should not be interpreted to mean that the Continuing Group's earnings per share for the financial year ending 31 March 2012 will necessarily match, or be greater or less than, historical published earnings per share.

Use of proceeds

Following Completion the Board will, after consultation with the Company's larger Shareholders, consider a range of options for the optimal use of proceeds. These options are expected to include payment of a special dividend and/or reinvestment into the Continuing Group's business to support the ongoing development in the Continuing Group's activities either organically or by way of acquisition to take advantage of the opportunities available.

The Consideration Shares will be used as a source of liquidity for re-investment into the Continuing Group over the longer term, subject to the provisions of the orderly marketing agreement that the Company will enter into with the Purchaser. The Company also intends to treat, in a similar manner, any new ordinary shares issued to it by the Purchaser arising out of conversion, in whole or in part, of the CULS.

Principal terms of the CULS

The Company will be issued with £4,000,000 of CULS at Completion. The outstanding CULS will accrue interest at a rate of 6 per cent per annum payable quarterly in arrears in cash. Any outstanding CULS will be automatically redeemed on the fifth anniversary from the date of issue (which will be Completion).

The CULS convert into ordinary shares of 1p each in the capital of Liontrust at 1 such ordinary share for each £1.00 in nominal value of CULS. The CULS will not be subject to an application for listing on any stock exchange but all ordinary shares arising from conversions of the CULS will be subject to an application for admission to trading on the London Stock Exchange. The Company is subject to certain restrictions on the number of CULS which can be converted at any time.

Upon the occurrence of certain events of default, including where Liontrust may, or does, go into administration, the Company may declare that the CULS then outstanding become immediately repayable. Liontrust has also given certain customary covenants in relation to the CULS in favour of the Company. Further information on the CULS is set out in Part VI of the Circular.

Related party transaction

As participants in the LTIP, the WCAM Managers are entitled to a cash payment from the LTIP Payment Pool, amongst other events, in the event of a sale of the shares or assets of WCAM for cash or cash equivalent consideration (defined in the rules of the LTIP as an Exit Event). The LTIP Payment Pool is calculated by reference to a proportion of the cash (or cash equivalent) consideration payable on the relevant Exit Event which relates directly to the value of the parts of the WCAM business managed by the LTIP participants.

Under the terms of the LTIP awards granted to them, the WCAM Managers would be entitled to, in aggregate, 20 per cent. of the cash (or cash equivalent) consideration payable on the relevant Exit Event which relates directly to the value of the parts of the WCAM business managed by the LTIP participants. However, it has been agreed between the WCAM Managers, WCAM and the Company that they will forego their entitlements under the LTIP.

As the WCAM Managers are directors of one or both of the Company and WCAM and stand to benefit financially from the Disposal, they are therefore both related parties. Accordingly, the Disposal constitutes a related party transaction for the purposes of the Listing Rules, as well as being a Class 1 transaction due to its size. The Disposal is therefore conditional upon Shareholder approval at the General Meeting.

As part of the Disposal, the WCAM Managers have each entered into separate agreements with the Purchaser, wholly conditional on Completion, the terms of which include each of the WCAM Managers becoming members of Liontrust Investment Partners LLP (a subsidiary of the Purchaser) with effect from Completion.

The total Consideration due from the Purchaser to the Company takes into account that the Purchaser is, in effect, making the payment to the WCAM Managers which the Company would otherwise have been required to make, excluding employer's National Insurance contributions which the Company would have had to pay had the LTIP not been terminated.

The WCAM Managers will abstain from voting at the General Meeting and have each taken all reasonable steps to ensure that their associates also abstain from voting at the General Meeting. Stephen Bailey will resign from his position as a director of the Company with effect from Completion.

Information on Liontrust

Liontrust is an established equity asset management business, whose UK unit trusts, Dublin UCITS3 funds, Cayman Islands domiciled hedge funds, Guernsey domiciled offshore funds and institutional segregated accounts are distributed to clients in the United Kingdom, continental Europe and internationally. Liontrust is incorporated, and has its registered office, in the United Kingdom and its shares have been listed on the Official List (now with a premium listing) and admitted to trading on the London Stock Exchange's main market for listed securities since July 1999.

Liontrust reported consolidated gross profit (revenues) of £9.8 million (2010: £13.1 million) and consolidated loss before tax of £5.1 million (2010: £1.0 million) for the year ended 31 March 2011. Adjusted loss before tax was £1.7 million after adding back expenses for cost reduction and restructuring, depreciation and intangible asset amortisation, severance compensation, expenses related to share incentivisation and the Financial Services Compensation Scheme Interim Levy (2010: adjusted profit before tax of £0.8 million). At that date, Liontrust had consolidated net assets of £15.3 million (2010: £21.4 million). On 14 November 2011, Liontrust reported a consolidated profit before tax of £1.7 million and a corresponding adjusted profit before tax of £22,000 for the six months ended 30 September 2011. More recently, Liontrust issued its interim management statement for the period from 1 October 2011 to 31 December 2011 during which Liontrust experienced net positive inflows of £15 million making it the 6th successive quarter in which it has had positive net sales. Liontrust experienced net positive inflows of £74 million in the financial year to 31 December 2011 and, from 1 January 2012 to 30 January 2012, recorded positive net sales of £15 million.

As at 29 February 2012, Liontrust had AuM of £1,489.4 million and were broken down by type and process as follows:

Source: Liontrust

General Meeting

The notice convening the General Meeting of the Company to be held at 10.00 a.m. on 5 April 2012 at Finsbury Tower, 103-105 Bunhill Row, London EC1Y 8LZ is set out at the end of the Circular. The purpose of the General Meeting is to seek Shareholders' approval for the Disposal.

Irrevocable undertakings and letters of intent

The Company has received irrevocable undertakings from its Board (save for Stephen Bailey) and letters of intent from certain Shareholders to vote in favour of the Resolution in respect of 1,478,831 and 10,622,929 Shares, respectively, representing approximately 4.1 per cent. and 29.3 per cent. of the Company's issued share capital, respectively.

Recommendation

The Board, which has received advice from Canaccord, considers the Disposal to be fair and reasonable so far as Shareholders as a whole are concerned. In providing its advice, Canaccord has taken into account the Board's commercial assessments of the Disposal.

Further, the Board considers the Disposal to be in the best interests of the Company and the Shareholders taken as a whole.

Accordingly, the Board unanimously recommends that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting, as the Directors (save for Stephen Bailey) intend to do in respect of their own beneficial holdings amounting (as at 12 March 2012, being the latest practicable date prior to this announcement) to an aggregate of 1,478,831 Ordinary Shares, representing approximately 4.1 per cent. of the Company's current issued share capital.

Stephen Bailey has taken no part in the Board's consideration of the Disposal. Stephen Bailey and Jan Luthman will not vote on the Resolution and have taken all reasonable steps to ensure that their respective associates will not vote on the Resolution.

Appendix

Definitions