XCH.L Regulatory News (XCH)

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 OR REGULATIONS OF THAT JURISDICTION

11 January 2016

For immediate release

Xchanging plc

BOARD RECOMMENDATION TO SHAREHOLDERS

The board of Xchanging plc ("Xchanging") wishes to provide the following update to its shareholders on the recommended cash offer from Computer Sciences Corporation ("CSC") and the ongoing discussions with Ebix, Inc. ("Ebix").

CSC

On 9 December 2015, CSC announced a unanimously recommended cash offer for Xchanging at a price of 190 pence per share. As stated in CSC's offer document, each of the Xchanging directors holding Xchanging shares has accepted CSC's offer in respect of his own beneficial holdings (representing, in aggregate, approximately 0.46 per cent. of the Xchanging shares in issue on 8 January 2016). On 23 December 2015, CSC announced it had purchased 9.99 per cent. of Xchanging's shares from Capita plc and therefore owns or has irrevocable undertakings, other commitments and a letter of intent to accept its offer in respect of 141,424,246 Xchanging shares, representing approximately 57.06 per cent. of the Xchanging shares in issue on 8 January 2016.

The first closing date of the offer from CSC is 1.00 p.m. (London time) on 15 January 2016 at which point, if it has not received acceptances from shareholders representing at least 75 per cent. of the Xchanging shares to which its offer relates, CSC will be entitled either to lapse its offer or to extend the offer period. CSC's offer remains conditional on certain regulatory and anti-trust clearances.

Ebix

On 16 November 2015, Xchanging announced that it had received an approach from Ebix regarding an indicative proposal to acquire the entire issued and to be issued share capital of Xchanging for 175 pence per share in cash and that Xchanging had commenced discussions with Ebix. Accordingly, Ebix (as well as CSC) was set a deadline of 5.00 p.m. on 9 December 2015 by which to announce a firm offer for Xchanging or to announce it would not make an offer. The Panel on Takeovers and Mergers (the "Panel") ruled on 9 December 2015, that CSC's offer resulted in Ebix being set a new deadline of 5.00 p.m. on 6 February 2016 (being the 53rd day following publication of CSC's offer document) to announce a firm intention to make an offer for Xchanging or to announce it would not make an offer.

However, despite the significant amount of time that has been available to Ebix, Ebix has not confirmed to Xchanging that they will be able to make a superior offer for Xchanging or provided evidence that they would be able to finance such an offer for Xchanging. Given the very limited engagement that Ebix or its advisers have had with Xchanging to date, there remains no certainty that Ebix will announce a firm intention to make an offer.

Accordingly, the Xchanging board is currently unable to express any confidence in the likelihood of a superior cash offer from Ebix.

Conclusion and recommendation by the board of Xchanging

Xchanging shareholders should be aware that if CSC does not receive at least 75 per cent. acceptances by 1.00 p.m. (London time) on Friday 15 January 2016 and decides to lapse its offer rather than extend it, and Ebix does not subsequently make an offer for Xchanging, then (absent a third party offer) there will be no takeover offer for Xchanging capable of being accepted by shareholders.

The board of Xchanging has a high degree of confidence in the future prospects of Xchanging. However, the board continues to recommend that Xchanging shareholders accept the offer from CSC for the reasons set out in CSC's offer document, including the significant premium it implies (representing a premium of approximately 81 per cent. to the average closing price per Xchanging share for the three month period ended 2 October 2015), and to do so by no later than 1.00 p.m. (London time) on Friday 15 January 2016.

This announcement is being made by Xchanging without the agreement of Ebix or CSC.

Enquiries:

www.xchanging.com

@XchangingGroup

Linkedin/company/xchanging

Disclaimer

Lazard & Co., Limited, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for Xchanging and for no-one else in connection with the CSC offer and the matters referred to in this announcement and will not be responsible to anyone other than Xchanging for providing the protections afforded to its clients or for providing advice in connection with the CSC offer or the matters referred to in this announcement.

Investec Bank plc, which is authorised in the United Kingdom by the PRA and regulated by the FCA and the PRA, is acting exclusively for Xchanging and no-one else in connection with the CSC offer and will not be responsible to anyone other than Xchanging for providing the protections afforded to its clients or for providing advice in connection with the CSC offer. Neither Investec Bank plc nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Investec Bank plc in connection with this announcement, any statement contained herein, the CSC offer or otherwise.

Liberum Capital Limited, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for Xchanging and for no-one else in connection with the CSC offer and will not be responsible to anyone other than Xchanging for providing the protections afforded to its clients or for providing advice in connection with the CSC offer or matters referred to in this announcement.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any 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 Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any 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(s), 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 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. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.