Xps Pensions Regulatory News (XPS)

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR INTO ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OR BREACH OF ANY APPLICABLE LAW. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT, WHICH DOES NOT CONSTITUTE A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT, IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES, AND NEITHER THIS ANNOUNCEMENT NOR ANYTHING HEREIN FORMS THE BASIS FOR ANY CONTRACT OR COMMITMENT WHATSOEVER.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

7 December 2017

Xafinity plc

Proposed Acquisition of Punter Southall Holdings Limited for up to £153 million

Proposed Firm Placing and Placing and Open Offer to raise £70 million

Introduction

Xafinity plc ("Xafinity" or the "Company"), the pensions actuarial, consulting and administration business, today announces the proposed acquisition from Punter Southall Group Limited ("PS Topco") of its actuarial consulting, pensions administration and investment consulting businesses (the "Target Group") for a total consideration of up to approximately £153 million (the "Acquisition").

The consideration for the Acquisition will be satisfied through the payment of £92,520,000 in cash, the issue of 25,766,871 Completion Shares, the transfer of the operating company of Xafinity's HR Trustees business to PS Topco at an agreed value of £8,480,000, and the potential issue of up to 6,134,969 Earn Out Shares pursuant to a contingent deferred consideration mechanism.

The cash component of the consideration is proposed to be financed by a combination of (a) a Firm Placing and Placing and Open Offer (the "Capital Raising") to raise in aggregate approximately £70 million (before expenses) and (b) funds drawn down under New Debt Facilities totalling £80 million (which replaces an existing debt facility of £38 million and will provide £42 million of incremental debt capacity).

The Target Group comprises three businesses: (i) the Actuarial Consulting Business, which provides actuarial advice to the trustees or employer sponsors of approximately 425 UK occupational pension schemes; (ii) the Pensions Administration Business, which administers pensions for approximately 380,000 scheme members belonging to more than 200 UK occupational pension schemes; and (iii) the Investment Consulting Business, which provides specialist consulting services, including investment strategy, risk management and investment governance, to the trustees or employer sponsors of over 115 UK occupational pension schemes.

The Target Group reported revenue for the year ended 31 December 2016 of approximately £51 million and Adjusted EBITDA of approximately £11 million.

The Acquisition is conditional upon, among other things, Xafinity Shareholders' approval and receipt of proceeds from the Capital Raising, and is expected to complete on 11 January 2018.

Highlights of the Acquisition

· The Xafinity Directors believe that the strategic rationale for the Acquisition is compelling and that the Acquisition represents an opportunity for Xafinity to progress its strategy of consolidating the mid-market in actuarial, investment and administrative services to trustees and sponsors of UK DB Schemes, by creating a new leading player with increased capability to challenge the Global Consultancies.

· The Xafinity Directors believe that the Target Group's businesses are highly complementary to Xafinity's. In particular, the Xafinity Directors believe that the two groups' actuarial, investment consulting and administration businesses, each of which has a strong market reputation, a diversified client base, long-standing client relationships and a collegiate employee culture, are very well suited to a combination within the Enlarged Group.

· The Xafinity Directors believe that the Acquisition will enable clients of both Xafinity and the Target Group to benefit from the combined capabilities of the Enlarged Group. In the Board's view, Xafinity has market-leading offerings in certain areas, including de-risking activity through its Centre of Excellence, in technology (with the development of "Radar", Xafinity's actuarial and investment software) and in relation to the DC market with the National Pension Trust. Xafinity has had success introducing these offerings to its own client base and, the Xafinity Directors believe, such services are also likely to be attractive to the Target Group's clients following Completion. Similarly, there are areas of expertise within the Target Group that are stronger than Xafinity's relative capabilities (for example, in the area of pension scheme administration, where significant growth has been achieved, taking on some of the largest contracts in the market, and advice on corporate mergers and acquisitions activity through Punter Southall Transaction Services). The Xafinity Directors consider that the Acquisition would enable both firms to 'level up' in such areas across the Enlarged Group.

· The markets in which both the Xafinity Group and the Target Group operate are fragmented. The Xafinity Directors believe that the combination of Xafinity's businesses with the Target Group will create the largest "pure-play" pensions consultancy firm in the UK. As a result, the Board believes the Enlarged Group would have a high profile in the pensions industry which is expected to lead to an increase in the number of invitations and opportunities received by Xafinity to tender for services to trustees of DB Schemes for the provision of actuarial, administration and/or investment consulting services. The Xafinity Directors believe that the Enlarged Group would have access to a greater proportion of market opportunities in future by providing a compelling alternative to the Global Consultancies, by virtue of its increased scale and profile.

· The disposal of Xafinity's HR Trustees business as part of the consideration for the Acquisition removes a potential barrier to growth for Xafinity, because Xafinity's addressable market is reduced by HR Trustees' clients due to the potential conflict of interest that would or could arise if HR Trustees and Xafinity were to share a client.

· The Target Group achieved revenue of approximately £51 million and adjusted EBITDA (including PS Group central cost allocations of £4.3 million) of approximately £11 million for the year ended 31 December 2016. In connection with the Acquisition, the Company and PS Topco have agreed a Transitional Services Agreement, under which PS Topco will continue to provide overhead services support and services to the Target Group for up to two years after Completion for a basic charge of £2.125 million per annum.

· The Acquisition is expected by the Xafinity Directors to be earnings enhancing for the Group for the financial year ending 31 March 2019 and materially earnings enhancing thereafter.

Paul Cuff & Ben Bramhall, co-CEOs of Xafinity plc, said:

"We are delighted to announce the merger of Xafinity and the actuarial, administration and investment consulting divisions of Punter Southall. The deal will create the largest "pure-play" pensions consultancy firm in the UK market. We both have a personal and long-standing affiliation with Punter Southall, and we believe that the addition of their like-minded and high-quality staff will contribute significantly to Xafinity's position in the market. This transaction marks another significant step in our strategy towards becoming the pre-eminent mid-tier pensions consultancy firm in the UK, with the combination of these businesses providing an expanded, yet focused, offering for clients that will position us as the primary alternative to the big three Global Consultancies."

John Batting, CEO of Punter Southall's Actuarial Consulting Business, said:

"This morning's announcement is very exciting news for clients and employees of the actuarial, administration and investment consultancy businesses at Punter Southall. This deal will bring together complementary businesses that will ultimately provide increased scale and expertise, an enhanced range and quality of service. Paul and Ben's history with Punter Southall, and their clear understanding of our reputation and culture has been vitally important to this merger, and I am confident that our current employees will benefit from this unique opportunity to be part of a publicly listed company poised for an exciting growth journey."

The Acquisition

Xafinity has entered into a conditional agreement with PS Topco to acquire Punter Southall Holdings Limited ("Target Holdco"), the holding company of the Target Group. The Company will also acquire certain minority interests in the Target Group pursuant to the Acquisition.

The consideration due under the Acquisition Agreement will be satisfied through:

· a payment of £92,520,000 in cash;

· the issue of 25,766,871 Completion Shares (valued, for the purposes of the Acquisition, at 163 pence per Completion Share, being approximately £42 million in aggregate), representing approximately 12.6 per cent of the Company's Enlarged Share Capital following the completion of the Capital Raising and Completion;

· the transfer (pursuant to the Disposal Agreement) by Xafinity Consulting to PS Topco of the entire issued share capital of HR Trustees at an agreed value, for the purposes of such transfer, of £8,480,000; and

· the issue of up to 6,134,969 Earn Out Shares (valued, for the purposes of the Acquisition, at the same price per share as the Completion Shares, being a maximum of approximately £10 million in aggregate) following Completion, pursuant to a contingent deferred consideration mechanism.

The consideration is subject to a post-Completion adjustment, the quantum of which will be calculated by reference to the net working capital position and the cash and debt positions of, respectively, the Target Group and HR Trustees. The Group's HR Trustees business accounted for approximately five per cent of the Group's revenues for the year ended 31 March 2017 at £2.55 million.

Shareholder approval

The Acquisition is of sufficient size relative to the Group to constitute a Class 1 transaction under the Listing Rules, and is therefore conditional, among other things, on the approval of all of the Resolutions by the Shareholders at the General Meeting to be held at 10.30 a.m. on 4 January 2018. Although the Disposal is conditional on Completion, it does not, of itself, require the approval of Shareholders.

The Capital Raising

The Capital Raising, which has been fully underwritten by Liberum, comprises the issue of 41,176,470 Capital Raising Shares at an Offer Price of 170 pence per share (representing approximately 23.1 per cent of the Enlarged Share Capital following completion of the Capital Raising) to raise gross proceeds of approximately £70 million. It is expected that the Capital Raising Shares will be admitted to the premium segment of the Official List and to trading on the London Stock Exchange's Main Market, and that dealings in the Capital Raising Shares will commence, at 8.00 a.m. on 5 January 2018.

The Firm Placing and the Placing are being conducted by way of an accelerated bookbuild on the Company's behalf by Liberum and Zeus Capital as Joint Bookrunners. The bookbuild will open with immediate effect following this Announcement. The timing of the closing of the bookbuild, the final size of the Firm Placing, the final size of the Placing and Open Offer and final allocations of Capital Raising Shares are at the discretion of Liberum. A further announcement will be made following closing of the book, confirming the final details of the Capital Raising.

Completion of the Acquisition is expected to take place on 11 January 2018, on which date it is expected that the Completion Shares will be admitted to the premium listing segment of the Official List and to trading on the London Stock Exchange's Main Market. The Capital Raising is not conditional on completion of the Acquisition.

Key Terms of the Capital Raising

The Company is proposing to raise gross proceeds of approximately £70 million by way of the Capital Raising which, in addition to the funds drawn down under the New Debt Facilities, will be used to fund the Acquisition (and expenses incurred in connection with the Acquisition).

The Company has today entered into the Sponsor and Placing Agreement under which Liberum and Zeus Capital have agreed to use their respective reasonable endeavours to procure Firm Placees for the Firm Placing Shares to be issued pursuant to the Firm Placing and Placing Placees for the Open Offer Shares not taken up by Qualifying Shareholders under the Open Offer, failing which, Liberum has agreed to subscribe for such Firm Placing Shares or Open Offer Shares itself.

The Capital Raising is conditional upon, among other things:

· the Resolutions being passed by the Shareholders at the General Meeting;

· the Sponsor and Placing Agreement having become unconditional in all respects save for the conditions relating to Admission of the Capital Raising Shares and not having been terminated in accordance with its terms before Admission of the Capital Raising Shares becomes effective; and

· Admission of the Capital Raising Shares becoming effective by not later than 8.00 a.m. on 5 January 2018 (or such later time and/or date as the Joint Bookrunners, the Sponsor and the Company may agree, being not later than 8.00 a.m. on 19 January 2018).

If the conditions to the Capital Raising (further details of which are set out in this announcement, below) are not satisfied or, if applicable, waived, the Capital Raising will not proceed.

Firm Placing

The Firm Placing is proposed to raise gross proceeds of £52.1 million for the Company. The Firm Placing Shares are not subject to clawback and are not part of the Placing and Open Offer. The Firm Placing is subject to the same conditions as the Placing and Open Offer.

Liberum, in consultation with Zeus Capital and the Company, reserves the right to alter the relative sizes of the Firm Placing and the Placing and Open Offer.

Placing and Open Offer

The Placing and Open Offer is proposed to raise gross proceeds of £17.9 million for the Company. The Placing Shares will be subject to clawback to satisfy valid applications by Qualifying Shareholders under the Open Offer. To the extent that the Open Offer Shares are not taken up by Qualifying Shareholders under the Open Offer, an equivalent number of shares will be subscribed by institutional investors pursuant to the Placing.

Open Offer Entitlements

Qualifying Shareholders will have the opportunity under the Open Offer to subscribe for Open Offer Shares at the Offer Price, payable in full on application and free of expenses, pro-rata to their holding of Existing Ordinary Shares, on the following basis:

1 Open Offer Share for every 13 Existing Ordinary Shares

held by them and registered in their names at the Record Date. Fractions of Ordinary Shares will not be allotted and each Qualifying Shareholder's entitlement under the Open Offer will be rounded down to the nearest whole number. Fractional entitlements to Open Offer Shares will be aggregated and will ultimately accrue for the benefit of the Company under the Placing.

Excess Application Facility

Under the Open Offer, Qualifying Shareholders will also be offered the opportunity to subscribe for Excess Shares in excess of their Open Offer Entitlements pursuant to the Excess Application Facility. The Excess Application Facility will comprise Open Offer Shares that are not taken up by Qualifying Shareholders under the Open Offer pursuant to their Open Offer Entitlements, which have been clawed back from Placing Placees. Qualifying Shareholders' applications for Excess Shares will, therefore, be satisfied only to the extent that corresponding applications by other Qualifying Shareholders are made for less than their pro rata Open Offer Entitlements. If there is an over-subscription resulting from excess applications, allocations in respect of such excess applications will be scaled-back at the absolute discretion of Liberum, in consultation with Zeus Capital and the Company, who will have regard to the pro rata number of Excess Shares applied for by Qualifying Shareholders under the Excess Application Facility. No assurances can therefore be given that applications by Qualifying Shareholders under the Excess Application Facility will be met in full, in part or at all.

Liberum, in consultation with Zeus Capital and the Company, reserves the right to alter the relative sizes of the Firm Placing and the Placing and Open Offer.

Terms used in this announcement and not defined in Appendix I to this announcement shall have the meaning given to them in the Prospectus. Appendix II to this announcement sets out the terms and conditions of the Firm Placing and Placing.

For further information please contact:

Notes to Editors

Xafinity is a UK specialist in pensions actuarial, consulting and administration, providing a wide range of services to over 550 pension scheme clients. The Company combines expertise, insight and technology to address the needs of both pension trustees and sponsoring companies. The Xafinity Group has more than 400 employees, of which approximately 90 per cent are client facing, with offices in Reading, Leeds, Stirling, Belfast, London and Manchester providing it with access to staff, expertise and clients in geographic locations across the UK.

IMPORTANT NOTICE

This announcement is an advertisement and does not constitute a prospectus or prospectus equivalent document. Nothing in this announcement should be interpreted as a term or condition of the Capital Raising. Investors should not subscribe for or purchase any New Ordinary Shares except on the basis of the information contained in the Prospectus expected to be published tomorrow or otherwise incorporated by reference into the Prospectus. The Prospectus, when published, will be made available on the Company's website (www.xafinity.com) and be available for inspection during normal business hours on any day (except Saturdays, Sundays and bank holidays in England and Wales) free of charge at the offices of Macfarlanes LLP, 20 Cursitor Street, London EC4A 1LT, from the date of this announcement to the date one month from the date of Admission of the Completion Shares.

This announcement does not constitute or form part of any offer or invitation to purchase, or otherwise acquire, subscribe for, sell, otherwise dispose of or issue, or any solicitation of any offer to sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for, any security in the capital of the Company in any jurisdiction.

The information contained in this announcement is not for release, publication or distribution to persons in the United States, Australia, Canada, Japan or the Republic of South Africa or in any jurisdiction where to do so would breach any applicable law. The New Ordinary Shares have not been and will not be registered under the securities laws of such jurisdictions and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within such jurisdictions except pursuant to an exemption from and in compliance with any applicable securities laws. No public offer of the New Ordinary Shares is being made by virtue of this announcement in or into the United States, Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction outside the United Kingdom in which such offer would be unlawful. No action has been or will be taken by the Company, the Directors, Deloitte, Zeus Capital or Liberum, or any other person to permit a public offering or distribution of this announcement or any other offering or publicity materials or the New Ordinary Shares in any jurisdiction where action for that purpose may be required, other than in the United Kingdom.

THIS ANNOUNCEMENT DOES NOT CONTAIN OR CONSTITUTE AN OFFER FOR THE SOLICITATION OF AN OFFER TO PURCHASE SECURITIES IN THE UNITED STATES. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT, OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OF THE UNITED STATES OR OTHER JURISDICTION AND MAY NOT BE OFFERED, SOLD, RESOLD, TRANSFERRED OR DELIVERED WITHIN THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE US SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. THERE WILL BE NO PUBLIC OFFER OF SECURITIES IN THE UNITED STATES.

This announcement has been issued by, and is the sole responsibility of, the Company.

Deloitte Corporate Finance, a division of Deloitte LLP ("Deloitte"), has been appointed as sponsor and financial adviser to the Company. Deloitte is authorised and regulated in the United Kingdom by the FCA in respect of regulated activities and is acting exclusively for the Company and no one else in connection with the transactions and arrangements described in this announcement. Deloitte will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the transactions and arrangements described in this announcement and will not be responsible for providing the protections afforded to Deloitte's clients nor for giving advice in relation to the contents of this announcement or the transactions and arrangements described in this announcement. Deloitte is not responsible for the contents of this announcement.

Zeus Capital Limited ("Zeus Capital") has been appointed as joint bookrunner and sole broker to the Company. Zeus Capital is authorised and regulated in the United Kingdom by the FCA and is acting exclusively for the Company and no one else in connection with the transactions and arrangements described in this announcement. Zeus Capital will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the transactions and arrangements described in this announcement and will not be responsible for providing the protections afforded to Zeus Capital's clients nor for giving advice in relation to the contents of this announcement or the transactions and arrangements described in this announcement. Zeus Capital is not responsible for the contents of this announcement.

Liberum Capital Limited ("Liberum") has been appointed as joint bookrunner and sole underwriter to the Company. Liberum is authorised and regulated in the United Kingdom by the FCA and is acting exclusively for the Company and no one else in connection with the transactions and arrangements described in this announcement. Liberum will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the transactions and arrangements described in this announcement and will not be responsible for providing the protections afforded to Liberum's clients nor for giving advice in relation to the contents of this announcement or the transactions and arrangements described in this announcement. Liberum is not responsible for this announcement.

This announcement has been prepared for the purposes of complying with the applicable laws and regulations of the United Kingdom 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 and regulations of any jurisdiction outside of the United Kingdom.

Note regarding forward-looking statements:

This announcement includes statements that are, or may be deemed to be, forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms anticipates, believes, estimates, expects, intends, may, plans, projects, should or will, or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include, but are not limited to, statements regarding the Company's and/or Directors' intentions, beliefs or current expectations concerning, amongst other things, the Group's results of operations, financial position, prospects, growth, strategies and expectations for the pensions actuarial, consulting and administration market.

Any forward-looking statements in this announcement reflect the Company's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Group's operations, results of operations and growth strategy. Investors should specifically consider the factors identified in this announcement which could cause actual results to differ before making an investment decision. Subject to the requirements of the Prospectus Rules, the Disclosure Requirements, the Transparency Rules and the Listing Rules, none of the Company, the Directors, Deloitte, Zeus Capital and Liberum undertakes any obligation publicly to release the result of any revisions to any forward-looking statements in this announcement that may occur due to any change in the Company's expectations or to reflect events or circumstances after the date of this announcement. Past performance of the Company is not necessarily indicative of future performance.

You are advised to read this announcement and, once available, the Prospectus and the information incorporated by reference therein, in their entirety for a further discussion of the factors that could affect the Company's, the Group's or the Target Group's future performance, and the industries in which they operate. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements in this announcement may not occur.

Neither the content of the Company's website (or any other website) nor any website accessible by hyperlinks on the Company's website (or any other website) is incorporated in, or forms part of, this announcement.

Any person receiving this announcement is advised to exercise caution in relation to the Capital Raising. If in any doubt about any of the contents of this announcement, independent professional advice should be obtained.

This summary should be read in conjunction with the full text of the announcement which follows.

Xafinity plc

Proposed Acquisition of Punter Southall Holdings Limited for up to £153 million

and

Firm Placing and Placing and Open Offer to raise £70 million

1 Introduction

1.1 The Acquisition

Xafinity has today announced that it has entered into the Acquisition Agreement with Punter Southall Group Limited ("PS Topco") to acquire Punter Southall Holdings Limited ("Target Holdco"), the holding company of the Target Group. The Company will also acquire certain minority interests in the Target Group pursuant to the Acquisition.

The Acquisition Agreement is conditional and provides for a total consideration of up to approximately £153 million. It is currently anticipated that completion of the Acquisition in accordance with the terms of the Acquisition Agreement ("Completion") will occur on or around 11 January 2018.

The consideration due under the Acquisition Agreement will be satisfied through:

· a payment of £92,520,000 in cash;

· the issue of 25,766,871 Completion Shares (valued, for the purposes of the Acquisition, at 163 pence per Completion Share, being approximately £42 million in aggregate), representing approximately 12.6 per cent of the Company's Enlarged Share Capital following the completion of the Capital Raising and Completion;

· the transfer (pursuant to the Disposal Agreement) by Xafinity Consulting to PS Topco of the entire issued share capital of HR Trustees at an agreed value, for the purposes of such transfer, of £8,480,000; and

· the issue of up to 6,134,969 Earn Out Shares (valued, for the purposes of the Acquisition, at the same price per share as the Completion Shares, being a maximum of approximately £10 million in aggregate) following Completion, pursuant to a contingent deferred consideration mechanism.

The consideration is subject to a post-Completion adjustment, the quantum of which will be calculated by reference to the net working capital position and the cash and debt positions of, respectively, the Target Group and HR Trustees.

The cash component of the consideration is proposed to be financed by a combination of (a) the Firm Placing and Placing and Open Offer to raise in aggregate approximately £70 million (before expenses) and (b) funds drawn down under the New Debt Facilities totalling £80 million (which replaces an existing debt facility of £38 million and will provide £42 million of incremental debt capacity). If the Capital Raising does not proceed then the Acquisition will not proceed.

Part of the consideration, comprising the Earn Out Shares, is both contingent and deferred. PS Topco's and the Minority Sellers' respective entitlements to Earn Out Shares, if any, will be calculated by reference to the 2019 Xafinity Accounts.

HR Trustees is the operating company of the Xafinity Group's non-core independent trustee business. The Disposal is (pursuant to the Disposal Agreement) conditional, and completion thereof will occur immediately, upon Completion. Further information on the Disposal is set out at below.

Following Completion, certain Acquisition Share Awards will be made under the Xafinity PSP to current Target Group employees. The Acquisition Share Awards will be made in two tranches, with the first tranche to be made as soon as practicable after Completion. The first tranche of the Acquisition Share Awards (relating to 1,533,742 Ordinary Shares) are proposed to have no performance conditions and to be excluded for the purposes of the dilution limits in rule 3.1 of the Xafinity PSP and rule 5.2 of the Xafinity Sharesave Plan. Accordingly, Resolution 5, to be proposed at the General Meeting, seeks Shareholders' consent to amend the Rules of the Xafinity PSP and the Rules of the Xafinity Sharesave Plan for this purpose.

In the immediate term, the Group's and Target Group's businesses will continue to trade under their current brands, in each case with a tagline of "Part of Xafinity Punter Southall". The Directors have set a target of April 2018 for a decision to be reached on the future branding strategy for the Enlarged Group.

The Board believes that the Acquisition represents a compelling and highly attractive opportunity to create a new leading mid-market player in the provision of actuarial, investment advisory and administration services, with the potential to challenge and more effectively compete with the Global Consultancies. For further information on the background to, and reasons for, the Acquisition, see paragraph 2, below.

1.2 The Target Group

The Target Group, which operates across nine UK offices and has approximately 450 employees, comprises three businesses: (i) the Actuarial Consulting Business, (ii) the Pensions Administration Business and (iii) the Investment Consulting Business. These businesses can be summarised as follows:

· The Actuarial Consulting Business provides actuarial advice to the trustees or employer sponsors of approximately 425 UK occupational pension schemes.

· The Pensions Administration Business administers pensions for approximately 380,000 scheme members belonging to more than 200 UK occupational pension schemes.

· The Investment Consulting Business provides specialist consulting services, including investment strategy, risk management and investment governance, to the trustees or employer sponsors of over 115 UK occupational pension schemes.

The Target Group reported revenue for the year ended 31 December 2016 of approximately £51 million and Adjusted EBITDA of approximately £11 million.

The Xafinity Directors believe that the two groups' comparable actuarial, investment consulting and administration businesses, each of which has a strong market reputation, a diversified client base, long-standing client relationships and a collegiate employee culture, are very well suited to a combination within the Enlarged Group.

1.3 The Capital Raising

As more fully described below, the Company proposes to undertake the Capital Raising to raise gross proceeds of approximately £70 million, the net proceeds of which will be used to fund (together with the funds from the New Debt Facilities) the cash component of the consideration payable under the Acquisition Agreement and the associated transaction fees.

The Capital Raising comprises the issue of, in aggregate, 41,176,470 Capital Raising Shares at an Offer Price of 170 pence per share. The Firm Placing Shares have been conditionally placed with institutional and other investors by the Joint Bookrunners. The Open Offer Shares have been conditionally placed with institutional and other investors by the Joint Bookrunners, subject to clawback to satisfy valid applications by Qualifying Shareholders under the Open Offer.

The Capital Raising is being fully underwritten by Liberum, subject to, and in accordance with, the terms and conditions of the Sponsor and Placing Agreement.

The Offer Price represents a discount of 1.7 per cent to the Closing Price of 173.0 pence per Ordinary Share on 6 December 2017 (being the last Business Day before the announcement of the Capital Raising). The Capital Raising is conditional, among other things, on the approval of the Acquisition and related matters at the General Meeting.

While the Capital Raising will not proceed if the Acquisition Agreement has been terminated before Admission of the Capital Raising Shares, the Capital Raising is not conditional upon Completion. In the event that the Capital Raising proceeds but the Acquisition does not complete, the Xafinity Directors' current intention is that the proceeds of the Capital Raising which were to be used to fund the cash consideration payable under the Acquisition and to pay the expenses of the Acquisition will be invested on a short-term basis, and the balance of the proceeds will be applied in reducing the Group's net debt, while the Xafinity Directors evaluate other appropriate acquisition opportunities. If no appropriate opportunities can be found on acceptable terms, the Xafinity Directors will consider how best to return surplus capital to Shareholders. Such a return could result in certain costs and complexities such that any return of capital may be less than the amount subscribed for in the Capital Raising. The Xafinity Directors would expect to effect such a return within 12 months of the Acquisition failing to complete, if no appropriate opportunities to use funds can be found.

Applications will be made for the Capital Raising Shares to be admitted to the premium segment of the Official List and to trading on the London Stock Exchange's Main Market (together "Admission of the Capital Raising Shares"). It is expected that Admission of the Capital Raising Shares will become effective and that dealings in the Capital Raising Shares will commence at 8.00 a.m. on 5 January 2018. Additionally, applications will be made for the Completion Shares to be admitted to the premium segment of the Official List and to trading on the London Stock Exchange's Main Market (together, "Admission of the Completion Shares"). It is expected that Admission of the Completion Shares will become effective and that dealings in Completion Shares will commence at 8.00 a.m. on 11 January 2018.

1.4 The New Debt Facilities

On 7 December 2017 the Company's existing debt facilities (pursuant to the Existing Facilities Agreement) were amended and restated to increase the aggregate facilities available thereunder to £80 million of committed facilities to be advanced by certain lenders, including HSBC Bank plc and The Governor and Company of the Bank of Ireland.

The New Debt Facilities comprise two revolving credit facilities: "Facility A" and "Facility B". Subject to the terms of the Amended Facilities Agreement, Facility A is available for drawing in a maximum aggregate amount of £38 million and Facility B is available for drawing in a maximum aggregate amount of £42 million.

Facility A may be utilised for the purpose of funding the general corporate and working capital purposes of the Group, including, but not limited to, the refinancing of any existing financial indebtedness of the Group. Facility B may be utilised for the financing of or payment of any costs, expenses and fees in connection with the Acquisition. Thereafter, Facility B may be used for the same purpose as Facility A.

The Amended Facilities Agreement also provides the Company with the ability to request (on an uncommitted basis) that the total commitments thereunder be increased by a further £20 million.

1.5 The Proposed Directors

The Board currently comprises four Executive Directors and three Non-Executive Directors. It is proposed that, with effect from Completion, the following individuals will join the Board in the following roles:

· John Batting (Executive Director)

· Jonathan Punter (Non-Executive Director)

Jonathan Punter is currently a director of PS Topco and John Batting is one of the Minority Sellers.

1.6 Shareholder approval

The Acquisition is of sufficient size relative to the Group to constitute a Class 1 transaction under the Listing Rules, and is therefore conditional, among other things, on the approval of all of the Resolutions by the Shareholders at the General Meeting to be held at 10.30 a.m. on 4 January 2018. Although the Disposal is conditional on Completion, it does not, of itself, require the approval of Shareholders.

2 Background to and reasons for the Acquisition, the Disposal and the Capital Raising

2.1 The Acquisition

The Xafinity Directors believe that the Target Group's business is highly complementary to Xafinity's. The overall market for the provision of actuarial, investment and administrative services to UK DB Schemes can be segmented broadly into three categories: (i) the "big three" (namely, the Global Consultancies); (ii) the mid-market (which currently includes both the Xafinity Group and the Target Group); and (iii) the smaller regional market.

The Acquisition represents an opportunity for Xafinity to progress its strategy of consolidating the mid-market in actuarial, investment and administrative services to trustees and sponsors of UK DB Schemes, by creating a new leading player with increased capability to challenge the Global Consultancies.

The Xafinity Directors believe that, as a result of the Acquisition, the Enlarged Group will benefit from enhanced opportunities for growth, for the following reasons:

· The Enlarged Group would have a high profile in the pensions industry, which the Board believes may lead to an increase in the number of invitations and opportunities received by Xafinity to tender for services to trustees of DB Schemes for the provision of actuarial, administration and/or investment consulting services. The markets in which both the Xafinity Group and the Target Group operate are fragmented, and some tender opportunities may not be received by either of them. The Xafinity Directors believe that the Enlarged Group could have access to a greater proportion of market opportunities in future by providing a compelling alternative to the Global Consultancies, by virtue of its increased scale and profile.

· The Xafinity Directors believe that a key benefit of the Acquisition would be to strengthen the overall capabilities of the Xafinity Group and the Target Group. In the Board's view, Xafinity has market-leading offerings in certain areas, including de-risking activity through the Centre of Excellence, in technology (with the development of "Radar", Xafinity's actuarial and investment software) and in relation to the DC market with the National Pension Trust. Xafinity has had success introducing these offerings to its own client base and, the Xafinity Directors believe, such services are also likely to be attractive to the Target Group's clients following Completion. Similarly, there are areas of expertise within the Target Group that are stronger than Xafinity's relative capabilities (for example, in the area of pension scheme administration, where significant growth has been achieved, taking on some of the largest contracts in the market, and advice on corporate mergers and acquisitions activity through Punter Southall Transaction Services). The Xafinity Directors consider that the Acquisition would enable both firms to 'level up' in such areas across the Enlarged Group.

· The Xafinity Directors believe that the Enlarged Group would be well-placed to benefit from some of the potential outcomes of the CMA's review of investment consulting activity. This is an area of the Group's and the Target Group's services where the significant majority of the market (around 80 per cent) is concentrated in the Global Consultancies, which the FCA and the CMA have decided merits investigation for a variety of reasons. The Xafinity Directors believe that the Enlarged Group, which would be the largest "pure play" pensions consulting firm in the UK outside of the Global Consultancies, could benefit from any movement of clients or business away from the Global Consultancies in this market, with both the Xafinity and Punter Southall investment consulting businesses having a good reputation for high quality in this market.

A key challenge in any merger of "people businesses" is the cultural fit between the groups. Some members of the senior management team of Xafinity know the Target Group very well: each of the Co-Chief Executive Officers of the Xafinity Group previously worked in the Target Group (Paul Cuff for seven years, Ben Bramhall for six years), where they both trained and qualified as actuaries at the beginning of their careers, and have retained strong relationships with senior staff in the Target Group. The Xafinity Directors believe that this should be of significant benefit in the context of integrating the two businesses, and the Xafinity Directors therefore believe that the post-Acquisition businesses would be well-placed to succeed in the future.

Furthermore, the deferral of a proportion of the share consideration due under the Acquisition Agreement (comprising the Earn Out Shares), and the post-Acquisition shareholding of PS Group, creates a significant alignment of interests during the period of integration, with all parties being motivated to seek to achieve a seamless transition.

2.2 The Disposal

The Disposal represents an opportunity for Xafinity to divest a non-core business at the same time as undertaking an acquisition which complements the Group's strategy.

HR Trustees provides professional trustee services to approximately 100 UK occupational pension schemes. HR Trustees and Xafinity's consulting business operate independently, to protect the current Xafinity Group against a potential conflict of interest that would or could arise if HR Trustees and Xafinity were to share a client. As such, HR Trustees effectively represents a barrier to growth for Xafinity, because Xafinity's addressable market is reduced by HR Trustees' clients. Although this restriction has a relatively small effect in a comparatively large wider market, it would become a greater issue if Xafinity and/or HR Trustees were to grow their market share in future. The Disposal solves this issue.

Each UK DB Scheme will typically have a number of individual trustees on its trustee board. Given the increased requirements and complexity of running a UK DB Scheme, there is an increasing trend towards pension schemes including at least one professional trustee on their trustee board. Even where a professional trustee is not appointed to the trustee board, many pension schemes will use the services of a professional trustee in certain situations such as significant ad hoc projects.

After the Disposal, PS Group will have a larger professional trustee business, as HR Trustees would be merged with the PS Independent Trustees business. The Enlarged Group would seek to maintain a good relationship with the PS Independent Trustees business going forward, and the Xafinity Directors believe that there could be the potential for future opportunities to provide services to that business in the future.

2.3 The Capital Raising

The Company is proposing to raise gross proceeds of approximately £70 million by way of the Capital Raising which, in addition to the funds drawn down under the New Debt Facilities, will be used to fund the Acquisition (and expenses incurred in connection with the Acquisition). If the Capital Raising does not proceed then the Acquisition will not proceed.

The Board considers the Firm Placing, Placing and Open Offer to be a suitable fundraising structure as it provides Shareholders with the flexibility to enable them to participate in the Capital Raising.

The Board believes that undertaking the Capital Raising at the Offer Price represents an attractive opportunity for the Company to secure equity funding for the Acquisition, and maintain sufficient capacity to pursue further growth opportunities that may arise in the future, whether by way of further acquisitions or through investment into the Xafinity Group's (or, following Completion, the Enlarged Group's) existing platform.

3 Financial impact of the Acquisition and use of proceeds

The Board expects the Acquisition to be earnings enhancing for the Group for the year ending 31 March 2019 and materially earnings enhancing thereafter. However, no statement in this announcement should be interpreted to mean that the future earnings per share of the Enlarged Group will necessarily match or exceed the historical published earnings per share of the Group.

The Company proposes to use the net proceeds of the Capital Raising of approximately £65.8 million to fund part of the cash consideration payable under the Acquisition Agreement and the associated transaction fees, with the balance of such cash consideration being financed pursuant to one or more drawdowns under the New Debt Facilities. The cash consideration payable under the terms of the Acquisition Agreement is £92,520,000. The Company will incur commissions, adviser fees and expenses of approximately £7.4 million in connection with the Acquisition and the Capital Raising.

Shareholders should note that, while the Capital Raising will not proceed if the Acquisition Agreement has been terminated before Admission of the Capital Raising Shares, the Capital Raising is not conditional upon Completion. After Admission of the Capital Raising Shares, the Acquisition could fail to complete. In the event that the Capital Raising proceeds but the Acquisition does not complete, the Xafinity Directors' current intention is that the proceeds of the Capital Raising which were to be used to fund the cash consideration payable under the Acquisition and to pay the expenses of the Acquisition will be invested on a short-term basis, and the balance of the proceeds will be applied in reducing the Group's net debt, while the Xafinity Directors evaluate other appropriate acquisition opportunities. If no appropriate opportunities can be found on acceptable terms, the Xafinity Directors will consider how best to return surplus capital to Shareholders. Such a return could result in certain costs and complexities such that any return of capital may be less than the amount subscribed for in the Capital Raising. The Xafinity Directors would expect to effect such a return within 12 months of the Acquisition failing to complete, if no appropriate opportunities to use funds can be found.

4 Summary information on the Xafinity Group and its current trading

4.1 Overview

Xafinity is a pensions actuarial, consulting and administration business providing a wide range of services to over 550 pension scheme clients. The Company combines expertise, insight and technology to address the needs of both pension trustees and sponsoring companies. The Xafinity Group has more than 400 employees, of which approximately 90 per cent are client facing, with offices in Reading, Leeds, Stirling, Belfast, London and Manchester providing it with access to staff, expertise and clients in geographic locations across the UK.

Xafinity enjoys very high levels of client loyalty with 80 per cent of the top 20 fee payers having been clients for over 10 years. This, combined with the predictable nature of the activities carried out by the Xafinity Group, means that a high proportion of the Xafinity Group's revenues repeat each year.

Xafinity's principal businesses operate in three key markets: (i) the Xafinity Pensions Advisory and Administration Business and the HR Trustees business operate primarily in the UK DB market; (ii) Xafinity's Master Trust platform, called the National Pension Trust, operates in the UK DC market; and (iii) the SSAS and SIPP Business operates in the UK SSAS and SIPP services market.

The principal activity of the Company is that of a holding company for the Xafinity Group. The Company has been listed on the premium segment of the London Stock Exchange's Main Market since 16 February 2017.

4.2 Current trading and prospects

The Group's performance since 30 September 2017 has remained in line with the Board's expectations, with a number of new client wins built on robust trading momentum and delivery of the Company's strategy to build market share in the pensions advisory sphere. The revenues from these new client wins are expected to have a positive incremental effect on the Company through the remainder of the current financial year. Trading conditions remain strong and, with a strong pipeline of visible new opportunities, the Board looks forward to the rest of the financial year with confidence.

5 Summary information on the Target Group and its current trading

5.1 Overview

PS Group was established in 1988 to provide actuarial, administration and investment consulting services to UK occupational pension schemes. Two of the founders of PS Group were Jonathan Punter and Stuart Southall.

The Target Group operates three of the PS Group's key businesses. They are:

· the Actuarial Consulting Business, which provides actuarial advice to the trustees or employer sponsors of approximately 425 UK occupational pension schemes;

· the Pensions Administration Business, which administers pensions for approximately 380,000 scheme members belonging to more than 200 UK occupational pension schemes; and

· the Investment Consulting Business, which provides specialist consulting services, including investment strategy, risk management and investment governance, to the trustees or employer sponsors of over 115 UK occupational pension schemes.

The Xafinity Directors believe the Target Group to be a high-quality business with operations that are very similar in nature to those of the Xafinity Group.

In the combined historical financial information for the year ending 31 December 2016, the Target Group reported revenue of £51.0 million, underlying operating profit of £10.6 million and gross assets of £26.0 million.

5.2 Current trading and prospects

The Target Group's business, in common with the Xafinity Group, enjoys a high proportion of revenue which is recurring or repeatable in nature, as well as a stable employee cost base. Since 31 December 2016, the Target Group has continued to trade in line with the expectations of the Target Group's management, with continued revenue growth due to significant new client wins in the Pensions Administration Business.

6 Summary of the key terms of the Acquisition

6.1 Acquisition Agreement and ancillary documents

In order to implement the Acquisition, the Company and PS Topco have entered into the Acquisition Agreement. Under the terms of the Acquisition Agreement, and subject to the conditions thereunder being satisfied, the Company will (through Xafinity CRL) acquire Target Holdco (and each of its subsidiaries and subsidiary undertakings), the Minority Shares and the PL B Shares, in consideration for (i) aggregate cash consideration of £92,520,000 (subject to a post-Completion adjustment mechanism), (ii) the issue of 25,766,871 Completion Shares (valued at approximately £42 million in aggregate), (iii) the transfer (pursuant to the Disposal Agreement) by Xafinity Consulting to PS Topco of the entire issued share capital of HR Trustees (valued at £8,480,000 for the purposes of such transfer), and (iv) the issue of up to 6,134,969 Earn Out Shares (attributing a maximum value to such shares for the purposes of the Acquisition at £10 million). The total consideration is valued at up to approximately £153 million.

Completion is conditional, among other things, on: (i) the Resolutions being passed without amendment; (ii) the Sponsor and Placing Agreement not being terminated or lapsing in accordance with its terms prior to Admission of the Capital Raising Shares; and (iii) the granting by the FCA of approval in relation to the change of control of PS Investment Consulting, together with certain other conditions to Completion (including with respect to the times by which Admission of the Capital Raising Shares and Admission of the Completion Shares must occur).

6.2 Class 1 transaction approvals

Owing to its size, the Acquisition constitutes a Class 1 transaction for the purposes of the Listing Rules, and therefore requires approval from Shareholders. Accordingly, a General Meeting has been convened for 4 January 2018 for the purpose, among other things, of passing a Resolution approving the Acquisition.

7 Financing the Acquisition

The consideration due under the Acquisition Agreement includes a cash component, the transfer of the shares in HR Trustees, and the issue of the Consideration Shares (comprising the Completion Shares and, if any, the Earn Out Shares).

The cash component of the consideration is proposed to be financed by a combination of (a) the Firm Placing and Placing and Open Offer to raise in aggregate approximately £70 million (before expenses) and (b) funds drawn down under the New Debt Facilities totalling £80 million (which replaces an existing debt facility of £38 million and will provide £42 million of incremental debt capacity).

Subject to the satisfaction of the other conditions to Completion, the Company will apply for the Completion Shares to be admitted to listing on the premium segment of the Official List and to trading on the London Stock Exchange's Main Market.

The Completion Shares (and, if applicable, any Earn Out Shares) will be issued to PS Topco and the Minority Sellers in the proportions agreed under the Acquisition Agreement. PS Topco's and the Minority Sellers' holdings of Ordinary Shares will, following Completion, be subject to the Lock-in Deeds entered into by, respectively, PS Topco and the Minority Sellers, the Company and the Joint Bookrunners.

The Completion Shares (and, if any, the Earn Out Shares) will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares (and the Capital Raising Shares), including the right to receive all dividends or other distributions declared after the date of their issue. The Completion Shares (and, if any, the Earn Out Shares) will be in registered form and capable of being held in certificated form or uncertificated form in CREST.

Application will be made for the Completion Shares to be admitted to listing on the premium segment of the Official List and to trading on the London Stock Exchange's Main Market for listed securities. It is expected that Admission of the Completion Shares will become effective at 8.00 a.m. on 11 January 2018.

8 Integration, management and employees following the Acquisition

Xafinity is in the process of finalising a detailed programme to integrate the Target Group within the equivalent actuarial consulting, pensions administration and investment consulting businesses of the Xafinity Group as efficiently as possible. The Xafinity Directors attach great importance to the skills and experience of the management and employees of the Target Group, and believe that they will be an important factor in the success of the Enlarged Group.

In connection with the Acquisition, the Company and PS Topco have agreed a Transitional Services Agreement, under which PS Topco will provide certain IT, finance, human resources, legal and compliance and facilities management services to the Target Group for up to two years after Completion. In the year ended 31 December 2016, the Target Group was charged £4.3 million by the wider PS Group in relation to the provision of overhead services support. This reflected the PS Group's internal charging model. The Target Group will continue to receive the benefit of overhead services support pursuant to the Transitional Services Agreement for two years following Completion and will, pursuant to the terms of the Transitional Services Agreement, pay up to £2.125 million per annum for such services (subject to additional charges that may be agreed). This charge was set by reference to the current per capita cost of the equivalent overheads within the Xafinity Group. However, the pricing mechanics under the Transitional Services Agreement should not be considered to be a guide to the cost of providing such services within the Enlarged Group after the expiration of the Transitional Services Agreement.

Anticipated additional net costs are estimated by management to be approximately £4 million during the 27 months following Completion. Such costs are associated with integration and the Enlarged Group's increased scale as a result of the Acquisition. Approximately two thirds of such costs relate to integration and are one-off in nature. The remainder relate to investing in functional capabilities of the Enlarged Group to ensure adequate resourcing.

Xafinity's management have developed an integration and business plan for the acquisition and integration of the Target Group and are well progressed on both preparation for 'day 1' implementation from Completion as well as a detailed programme for the business thereafter. In the immediate term, the Group's and Target Group's businesses will continue to trade under their current brands, in each case with a tagline of "Part of Xafinity Punter Southall". The Directors have set a target of April 2018 for a decision to be reached on the future branding strategy for the Enlarged Group.

9 Principal terms of the Capital Raising

9.1 Overview

The Company proposes to issue Capital Raising Shares pursuant to the Capital Raising to raise approximately £70 million, before expenses. The Joint Bookrunners have made arrangements to conditionally place the Firm Placing Shares with Firm Placees, and to conditionally place the Open Offer Shares with Placing Placees subject to clawback to satisfy valid applications by Qualifying Shareholders under the Open Offer, in each case pursuant to the Sponsor and Placing Agreement, or failing which, in the case of Liberum, to subscribe for such Firm Placing Shares or such Open Offer Shares itself.

The Offer Price was set having regard to the prevailing market conditions and the size of the Capital Raising. The Offer Price represents a discount of approximately 1.7 per cent to the Closing Price of 173.0 per Existing Ordinary Share on 6 December 2017 (being the last Business Day before the announcement of the Capital Raising).

The Capital Raising is conditional, among other things, on:

· the Resolutions being passed by the Shareholders at the General Meeting;

· the Company having complied with its obligations under the Sponsor and Placing Agreement that fall to be performed on or prior to Admission of the Capital Raising Shares;

· the Sponsor and Placing Agreement having become unconditional in all respects save for the conditions relating to Admission of the Capital Raising Shares, and not having been terminated in accordance with its terms;

· the Acquisition Agreement being entered into, becoming unconditional in all respects (other than conditions relating to Admission of the Capital Raising Shares, the Admission of the Completion Shares and the granting by the FCA of approval in relation to the change of control of PS Investment Consulting) and not having been terminated in accordance with its terms;

· the Amended Facilities Agreement being entered into, becoming unconditional in all respects (other than customary certain funds conditions and conditions relating solely to Admission of the Capital Raising Shares or Completion) and not having been terminated in accordance with its terms;

· Admission of the Capital Raising Shares becoming effective by not later than 8.00 a.m. on 5 January 2018 (or such later time and/or date as the Joint Bookrunners, the Sponsor and the Company may agree, being not later than 8.00 a.m. on 19 January 2018); and

· in the good faith opinion of the Joint Bookrunners, between the date of the Sponsor and Placing Agreement and Admission of the Capital Raising Shares, there having been no material adverse change in the legal condition or the earnings, management, business affairs, solvency or prospects of the Group, or of the Enlarged Group (taken as a whole), whether or not arising in the ordinary course of business.

The Capital Raising is expected to result in 41,176,470 Capital Raising Shares being issued (representing approximately 23.1 per cent of the Enlarged Share Capital immediately following Admission of the Capital Raising Shares). Subject to Completion, the Capital Raising Shares will represent approximately 20.2 per cent of the Enlarged Share Capital immediately following Admission of the Completion Shares. The issue of the Capital Raising Shares is subject to the terms and conditions of the Sponsor and Placing Agreement.

Assuming Completion takes place, the Capital Raising proceeds of approximately £65.8 million (net of expenses) will be applied, together with the funds drawn down under the New Debt Facilities, to finance the cash consideration payable under the Acquisition Agreement, and associated transaction costs.

The Capital Raising Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends or other distributions declared after the date of their issue. The Capital Raising Shares will be in registered form and capable of being held in certificated form or uncertificated form in CREST.

Application will be made for the Capital Raising Shares to be admitted to listing on the premium segment of the Official List and to trading on the London Stock Exchange's Main Market for listed securities. It is expected that Admission of the Capital Raising Shares will become effective and dealings in the Capital Raising Shares will commence at 8.00 a.m. on 5 January 2018.

9.2 The Firm Placing

The Joint Bookrunners, as agents of the Company, have made arrangements to conditionally place the Firm Placing Shares with certain institutional investors at the Offer Price, or failing which, in the case of Liberum, to subscribe for such Firm Placing Shares itself, subject to the terms and conditions of the Sponsor and Placing Agreement.

The Firm Placing will proceed subject to Shareholder approval of the Resolution to disapply pre-emption rights in relation to the allotment of the Firm Placing Shares pursuant to the Firm Placing and to Shareholder approval of the other Resolutions, and subject to the other conditions of the Capital Raising being satisfied. The Firm Placing Shares are not subject to clawback, and do not form part of the Placing and Open Offer.

While the Firm Placing will not proceed if the Acquisition Agreement has been terminated before Admission of the Capital Raising Shares, the Firm Placing is not conditional on the Acquisition proceeding and may proceed even if the Acquisition does not. In this scenario the Firm Placing would only relate to an investment in the Group and not an investment in the Enlarged Group.

The Firm Placing Shares represent approximately 74.4 per cent of the Capital Raising Shares and approximately 17.2 per cent of the Enlarged Share Capital immediately following Admission of the Capital Raising Shares. Subject to Completion, the Firm Placing Shares will represent approximately 15.0 per cent of the Enlarged Share Capital immediately following Admission of the Completion Shares.

9.3 The Open Offer

Qualifying Shareholders are invited, subject to the terms and conditions of the Open Offer, to subscribe for Open Offer Shares pro rata to their holdings as at the Record Date at the Offer Price of 170 pence per share, payable in full in cash on application, free of all expenses, on the basis of: 1 Open Offer Share for every 13 Existing Ordinary Shares, in each case rounded down to the nearest whole number of Open Offer Shares.

To the extent that the Open Offer Shares are not taken up by Qualifying Shareholders under the Open Offer, an equivalent number of shares will be subscribed by institutional investors pursuant to the Placing.

Under the Open Offer, Qualifying Shareholders will also be offered the opportunity to subscribe for Excess Shares in excess of their Open Offer Entitlements pursuant to the Excess Application Facility. The Excess Application Facility will comprise Open Offer Shares that are not taken up by Qualifying Shareholders under the Open Offer pursuant to their Open Offer Entitlements. Qualifying Shareholders' applications for Excess Shares will, therefore, be satisfied only to the extent that corresponding applications by other Qualifying Shareholders are made for less than their pro rata Open Offer Entitlements. If there is an over-subscription resulting from excess applications, allocations in respect of such excess applications will be scaled-back at the absolute discretion of Liberum, in consultation with Zeus Capital and the Company, who will have regard to the pro rata number of Excess Shares applied for by Qualifying Shareholders under the Excess Application Facility. No assurances can therefore be given that applications by Qualifying Shareholders under the Excess Application Facility will be met in full, in part or at all.

The Open Offer is not a rights issue. Qualifying CREST Shareholders should note that, although the Open Offer Entitlements and Excess Open Offer Entitlements will be admitted to CREST and be enabled for settlement in CREST, the Open Offer Entitlements and Excess Open Offer Entitlements will not be tradeable or listed and applications in respect of the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim raised by Euroclear's Claims Processing Unit. Qualifying Non-CREST Shareholders should note that their Application Form is not a negotiable document and cannot be traded. Qualifying Shareholders should be aware that, in the Open Offer, unlike in a rights issue, any Open Offer Shares not applied for under the Open Offer will not be sold in the market or placed for the benefit of Qualifying Shareholders who do not apply under the Open Offer, and Qualifying Shareholders who do not apply to take up their Open Offer Entitlements and/or Excess Open Offer Entitlements will have no rights under the Open Offer or receive any proceeds from it.

The Open Offer will proceed, subject to Shareholder approval of the Resolution to disapply pre-emption rights in relation to the allotment of the Open Offer Shares pursuant to the Placing and Open Offer, and to Shareholder approval of the other Resolutions, and subject to the other conditions of the Capital Raising being satisfied.

While the Open Offer will not proceed if the Acquisition Agreement has been terminated before Admission of the Capital Raising Shares, the Open Offer is not conditional on the Acquisition proceeding and may proceed even if the Acquisition does not. In this scenario the Open Offer would only relate to an investment in the Group and not an investment in the Enlarged Group.

The Open Offer Shares represent approximately 25.6 per cent of the Capital Raising Shares and approximately 5.9 per cent of the Enlarged Share Capital immediately following Admission of the Capital Raising Shares. Subject to Completion, the Open Offer Shares will represent approximately 5.2 per cent of the Enlarged Share Capital immediately following Admission of the Completion Shares.

The rights attaching to the Open Offer Shares will be uniform in all respects and will form a single class for all purposes. The Open Offer Shares are not being made available in whole or in part to the public except under the terms of the Open Offer. In the event that the Open Offer does not become unconditional by 8.00 a.m. on 5 January 2018 (or such later time and/or date as the Joint Bookrunners, the Sponsor and the Company may agree, being not later than 8.00 a.m. on 19 January 2018), the Open Offer will lapse and application monies will be returned by post to applicants, at the applicants' risk and without payment of interest, to the address set out on the Application Form, within 14 days thereafter.

9.4 The Placing

The Joint Bookrunners, as agents of the Company, have made arrangements to conditionally place the Open Offer Shares with institutional investors at the Offer Price, or failing which, in the case of Liberum, to subscribe for such Open Offer Shares itself.

The commitments of the Placing Placees are subject to clawback in respect of valid applications for Open Offer Shares by Qualifying Shareholders pursuant to the Open Offer.

Subject to waiver or satisfaction of the conditions and the Sponsor and Placing Agreement not being terminated or lapsing in accordance with its terms, if valid applications are not received from Qualifying Shareholders for all of the Open Offer Shares by 11.00 a.m. on 2 January 2018, the number of Open Offer Shares not so applied for will be subscribed for at the Offer Price by such Placing Placees pursuant to the Placing or, failing which, will be subscribed for by Liberum subject to the terms and conditions of the Sponsor and Placing Agreement.

The Placing will proceed, subject to Shareholder approval of the Resolution to disapply pre-emption rights in relation to the allotment of the Open Offer Shares pursuant to the Placing and Open Offer and to Shareholder approval of the other Resolutions, and subject to the other conditions of the Capital Raising being satisfied.

While the Placing will not proceed if the Acquisition Agreement has been terminated before Admission of the Capital Raising Shares, the Placing is not conditional on the Acquisition proceeding and may proceed even if the Acquisition does not. In this scenario the Placing would only relate to an investment in the Group and not an investment in the Enlarged Group.

9.5 Effect of the Capital Raising

Immediately following Admission of the Capital Raising Shares, the Enlarged Share Capital is expected to be 178,072,714 Ordinary Shares. On this basis, the Capital Raising Shares will represent approximately 23.1 per cent of the Enlarged Share Capital immediately following Admission of the Capital Raising Shares. Subject to Completion, the Capital Raising Shares will represent approximately 20.2 per cent of the Enlarged Share Capital immediately following Admission of the Completion Shares.

Qualifying Shareholders who take up their Open Offer Entitlements under the Open Offer in full (but not any Excess Open Offer Entitlements) will suffer a maximum dilution of approximately 17.2 per cent to their ownership and voting interests in the Company. Qualifying Shareholders who do not take up any of their Open Offer Entitlements under the Open Offer and do not participate in the Firm Placing or the Placing, and Shareholders who are not eligible to participate in the Open Offer or in the Firm Placing or the Placing, will suffer a maximum dilution of approximately 23.1 per cent to their ownership and voting interests in the Company by virtue of the issue of the Capital Raising Shares pursuant to the Capital Raising.

The Completion Shares will represent approximately 12.6 per cent of the Enlarged Share Capital immediately following Admission of the Completion Shares. The proportion of the Company's share capital represented by the Earn Out Shares will depend on the number of Earn Out Shares issued (if any) in accordance with the Acquisition Agreement, and on the number of Ordinary Shares in issue at the time of such issue (which would take place following the publication of the 2019 Xafinity Accounts).

10 Recommendation and voting intentions

The Board considers the Acquisition, the Capital Raising and the Resolutions to be in the best interests of the Company and its Shareholders taken as a whole. Accordingly, the Board unanimously recommends that Shareholders vote in favour of the Resolutions, as all of the Xafinity Directors intend to do in respect of their own beneficial shareholdings, amounting to 2,859,692 Ordinary Shares in aggregate as at the Latest Practicable Date (representing approximately 2.09 per cent of the Existing Ordinary Shares).

11 Further Information

Further details of the Acquisition and the Capital Raising, together with a notice convening a General Meeting to consider the Acquisition and the Capital Raising, will be contained in the combined class 1 circular and prospectus which is expected to be sent to Shareholders on or around 8 December 2017.

Expected timetable of principal events

All times are London times. Each of the times and dates stated in the table below is indicative only and is subject to change. If any of the times and/or dates below change, the Company will announce such changes through a Regulatory Information Service.

APPENDIX I: DEFINITIONS

In this announcement, the following expression have the following meanings unless the context requires otherwise:

Appendix II: Terms and Conditions of the Firm Placing and the Placing Issue

1 Introduction

Participation in the Firm Placing and/or the Placing is only available to persons who are invited to participate by the Joint Bookrunners. These terms and conditions apply to persons making an offer to subscribe for Firm Placing Shares under the Firm Placing and/or Open Offer Shares under the Placing. The Placee hereby agrees with the Joint Bookrunners and the Company to be bound by these terms and conditions as being the terms and conditions upon which Firm Placing Shares will be sold under the Firm Placing and Open Offer Shares will be sold under the Placing (as applicable). A Placee shall, without limitation, become so bound if Liberum confirms its allocation (either orally or in writing including by way of email) of Firm Placing Shares under the Firm Placing and/or Open Offer Shares under the Placing (as applicable) to such Placee.

Upon being notified of its allocation of Firm Placing Shares under the Firm Placing and/or Open Offer Shares under the Placing and Open Offer (the "Placing Commitment"), a Placee shall, subject to the provisions (relating to clawback of the Open Offer Shares) of paragraph 6, below, with respect to the Open Offer Shares allocated to such Placee, be contractually committed to acquire the number of Firm Placing Shares and/or Open Offer Shares allocated to them and, to the fullest extent permitted by law, will be deemed to have agreed not to exercise any rights to rescind or terminate or otherwise withdraw from such commitment. Dealing may not begin before any notification is made.

2 Agreement to Acquire Firm Placing Shares and/or Open Offer Shares

The Capital Raising is conditional upon the Sponsor and Placing Agreement becoming unconditional in all respects by 8.00 a.m. on 5 January 2018 (or such later time and/or date as the Joint Bookrunners, the Sponsor and the Company, respectively, may agree, being not later than 8.00 a.m. on 19 January 2018) and the Sponsor and Placing Agreement not being terminated or lapsing in accordance with its terms.

The Joint Bookrunners' and Deloitte's obligations under the Sponsor and Placing Agreement are conditional on, among other things:

(a) the Resolutions being passed by the Shareholders at the General Meeting;

(b) the Company having complied with its obligations under the Sponsor and Placing Agreement that fall to be performed on or prior to Admission of the Capital Raising Shares and which are, in the reasonable opinion of Deloitte and the Joint Bookrunners, material in the context of the Capital Raising;

(c) the Acquisition Agreement being entered into, becoming unconditional in all respects (other than conditions relating to Admission of the Capital Raising Shares, Admission of the Completion Shares and the granting by the FCA of approval in relation to the change of control of PS Investment Consulting) and not having been terminated in accordance with its terms;

(d) the Amended Facilities Agreement being entered into, becoming unconditional in all respects (other than customary certain funds conditions and conditions relating solely to Admission of the Capital Raising Shares or Completion) and not having been terminated in accordance with its terms;

(e) Admission of the Capital Raising Shares becoming effective by not later than 8.00 a.m. on 5 January 2018 (or such later time and/or date as the Joint Bookrunners, the Sponsor and the Company may agree, being not later than 8.00 a.m. on 19 January 2018); and

(f) in the good faith opinion of the Joint Bookrunners and Deloitte, between the date of the Sponsor and Placing Agreement and Admission of the Capital Raising Shares, there having been no material adverse change in the financial, operational or legal condition or the earnings, management, business affairs, solvency or prospects of the Group, or of the Enlarged Group (taken as a whole), whether or not arising in the ordinary course of business.

Subject to the above conditions, a Placee agrees to become a Shareholder and agrees to acquire Firm Placing Shares and/or Open Offer Shares (as applicable) at the Offer Price. The number of Firm Placing Shares issued to such Placee under the Firm Placing and/or Open Offer Shares issued to such Placee under the Placing (as applicable) shall be in accordance with the arrangements described above, subject to the provisions of paragraph 6, below, with respect to the Open Offer Shares.

In the event that the Capital Raising does not proceed then the Acquisition will not proceed. If the Capital Raising proceeds to Completion, the net proceeds of the Capital Raising will be used to part fund the consideration payable under the Acquisition Agreement for the Acquisition. While the Capital Raising will not proceed if the Acquisition Agreement has been terminated before Admission of the Capital Raising Shares, the Capital Raising is not conditional on Completion. If Completion does not occur, the Xafinity Directors will consider how best to return the net proceeds of the Capital Raising to Shareholders. Such a return could result in certain costs and complexities such that any return of capital may be less than the amount subscribed for in the Capital Raising.

3 Payment for Firm Placing Shares and Open Offer Shares

Each Placee undertakes to pay the Offer Price for each Firm Placed Share and/or Open Offer Share issued to such Placee in such manner and on the due time and date as shall be directed by Liberum. In the event of any failure by a Placee to pay as so directed by Liberum, the relevant Placee shall be deemed hereby to have appointed Liberum or any nominee of Liberum as its agent and to use its reasonable endeavours to sell (in one or more transactions) any or all of the Firm Placing Shares and Open Offer Shares in respect of which payment shall not have been made as so directed and to have agreed to indemnify on demand Liberum in respect of any liability for UK stamp duty and/or stamp duty reserve tax arising in respect of any such sale or sales.

The Placee will, however, remain liable for any shortfall below the aggregate amount owed by such Placee and it may be required to bear any tax or other charges (together with any interest or penalties) which may arise upon the sale of such Firm Placing Shares and/or Open Offer Shares on such Placee's behalf.

In addition, Placees should note that they will be liable for any capital duty, stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the acquisition by them of any Firm Placing Shares and/or Open Offer Shares or the agreement by them to acquire any Firm Placing Shares and/or Open Offer Shares.

4 Representations and Warranties

By participating in the Firm Placing and/or the Placing, a Placee (and any person acting on such Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents, warrants and agrees (as the case may be) with the Joint Bookrunners and the Company, the following:

(a) the Placee has read this announcement (including this appendix) in its entirety and acknowledges that its participation in the Firm Placing and/or the Placing (as applicable) shall be made solely on the terms and subject to the conditions set out in these terms and conditions, the Sponsor and Placing Agreement and the Articles. Such Placee agrees that these terms and conditions and the allocation confirmation from Liberum (either orally or in writing including by way of email) to such Placee represents the whole and only agreement between the Placee, Liberum and the Company in relation to the Placee's participation in the Firm Placing and/or the Placing (as applicable) and supersedes any previous agreement between any of such parties in relation to such participation. Accordingly, all other terms, conditions, representations, warranties and other statements which would otherwise be implied (by law or otherwise) shall not form part of these terms and conditions. Such Placee agrees that none of the Company, the Joint Bookrunners nor any of their respective officers or directors will have any liability for any such other information or representation and irrevocably and unconditionally waives any rights it may have in respect of any such other information or representation;

(b) the Placee has the power and authority to subscribe for the Firm Placing Shares under the Firm Placing and/or the Open Offer Shares under the Placing (as applicable) and to execute and deliver all documents necessary for such subscription;

(c) the Placee has received this announcement and all such information as it deems necessary to make an investment decision in relation to the Firm Placing Shares and/or the Open Offer Shares and it has made its own assessment of the Firm Placing Shares and/or the Open Offer Shares and has relied on its own investigation of the business, financial or other position of the Company in agreeing to participate in the Firm Placing and/or the Placing;

(d) the Placee's agreement to subscribe for the Open Offer Shares under the Placing and/or the Firm Placing Shares under the Firm Placing (as applicable) is not by way of acceptance of a public offer made or to be made in this announcement but is by way of a collateral contract and, accordingly, section 87Q of FSMA does not entitle it to withdraw its acceptance in the event that the Company publishes a supplementary prospectus in connection with the Capital Raising and/or Admission of the Capital Raising Shares. Without prejudice to such acknowledgement, if the Placee is so entitled to withdraw, it irrevocably agrees (if applicable) not to exercise any such rights and to confirm its acceptance of the offer to participate in the Capital Raising on the same terms immediately after any such right to withdraw arises;

(e) the Placee understands and accepts that by offering such Open Offer Shares and/or Firm Placing Shares, neither Joint Bookrunner is making any recommendations to or advising such Placee regarding the suitability or merits of any transaction that such Placee may enter into in connection with the Capital Raising or otherwise and that such Placee is not, and does not regard itself as, a client of either Joint Bookrunner or Deloitte in connection with the Capital Raisings, and that the Joint Bookrunners and Deloitte are acting solely for the Company in relation to the Capital Raising, the Acquisition and Admission of the Capital Raising Shares as set out in this announcement and will not be responsible to such Placee for providing the protections afforded to their clients or for advising such Placee on the transactions and arrangements proposed in this announcement, nor do the contents or receipt of this announcement constitute the giving of investment advice by either Joint Bookrunner or Deloitte to such Placee;

(f) these terms and conditions and this announcement are exclusively the responsibility of the Company and neither Joint Bookrunner nor Deloitte nor any of their respective affiliates nor any person acting on its or their behalf will be responsible for or shall have liability for any information, representation or statement contained therein and neither Joint Bookrunner nor Deloitte nor any of their respective affiliates nor any person acting on its or their behalf will be responsible or liable for a Placee's decision to accept its Firm Placing Shares and/or Open Offer Shares;

(g) the Placee has not relied on either Joint Bookrunner nor any person affiliated with either Joint Bookrunner in connection with any investigation of the accuracy of any information contained in this announcement or its investment decision and the Placee has relied on its own investigation with respect to the Firm Placing Shares and/or the Open Offer Shares and the Company in connection with its investment decision;

(h) it has made its own assessment of the Company and the terms of the Firm Placing and Placing based on this announcement (including this appendix) and the Company's publicly available information, such information being all that it deems necessary to make an investment decision in respect of the Capital Raising Shares and that it has neither received nor relied on any information given or representations, warranties or statements made by either Joint Bookrunner, Deloitte or the Company or any of their affiliates or any person acting on behalf of any of them and neither Joint Bookrunner, Deloitte, nor the Company nor any of their affiliates not any person acting on behalf of any of them will be liable for any Placee's decision to accept an invitation to participate in the Firm Placing and/or Placing based on any information, representation, warranty or statement other than that contained in this announcement;

(i) neither Joint Bookrunner nor any of their respective officers, directors and employees shall, save in the event of fraud on their part (and to the extent permitted by the rules of the FCA) be liable to Placees for any matter arising out of the role of either Joint Bookrunner as agent, broker or otherwise in connection with the Firm Placing and Placing and that where any such liability nevertheless arises as a matter of law the Placee will immediately waive any claim against the Zeus Capital Group and the Liberum Group and any of their respective officers, directors and employees which it may have in respect thereof. In these terms and conditions, the expression "Zeus Capital Group" means Zeus Capital and its ultimate holding company(ies) and all direct and indirect subsidiary undertakings of such holding company(ies) and "Liberum Group" means Liberum and its ultimate holding company(ies) and all direct and indirect subsidiary undertakings of such holding company(ies);

(j) the Placee has complied with all such laws and such Placee will not infringe any applicable law as a result of such Placee's agreement to purchase Firm Placing Shares under the Firm Placing and/or Open Offer Shares under the Placing (as applicable) and/or acceptance thereof or any actions arising from such Placee's rights and obligations under their agreement to purchase Firm Placing Shares under the Firm Placing and/or Open Offer Shares under the Placing (as applicable) and/or acceptance thereof or under the Articles;

(k) the Placee has accepted that its application is irrevocable and if for any reason it becomes necessary to adjust the expected timetable as set out in this announcement, the Company will make an appropriate announcement to a Regulatory Information Service giving details of the revised dates. In particular, Liberum shall, in agreement with the Company, Zeus Capital and Deloitte, be entitled to extend the last time and/or date for applications under the Firm Placing and/or the Placing, and any such extension will not affect applications already made, which will continue to be irrevocable;

(l) to the fullest extent permitted by law, the Placee acknowledges and agrees to the disclaimers contained in this announcement and acknowledges and agrees to comply with the selling restrictions set out in this announcement;

(m) the Firm Placing Shares and Open Offer Shares have not been and will not be registered under the US Securities Act, or under the securities legislation of, or with any securities regulatory authority of, any state or other jurisdiction of the United States or under the applicable securities laws of any other Excluded Territories or where to do so may contravene local securities laws or regulations;

(n) the Placee is either (A) a person located outside the United States and is subscribing for Firm Placing Shares and/or Open Offer Shares only in "offshore transactions" as defined in and pursuant to Regulation S, or (B) within the United States and a QIB within the meaning of Rule 144A under the US Securities Act and is not acquiring Firm Placing Shares and/or Open Offer Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any Firm Placing Shares or Open Offer Shares in or into the United States, and has or have executed and delivered a US investor representation letter substantially in the form set out in the letter provided to it by the Joint Bookrunners to the addressees specified therein;

(o) the Placee is not acquiring Firm Placing Shares and/or Open Offer Shares as a result of any "directed selling efforts" as defined in Regulation S or as a result of any form of "general solicitation" or "general advertising" (within the meaning of Rule 502(c) of Regulation D;

(p) the Placee is not a resident of Australia, Canada, Japan, South Africa or any other jurisdiction where the availability of the Capital Raising would breach any applicable laws or regulations and acknowledges that the Firm Placing Shares and the Open Offer Shares have not been and will not be registered nor will a prospectus be prepared in respect of the Firm Placing Shares and/or the Open Offer Shares under the securities legislation of the United States or any other Excluded Territory and, subject to certain exceptions, may not be offered or sold, directly or indirectly, in or into those jurisdictions;

(q) the Placee does not have a registered address in, and is not a citizen, resident or national of, any jurisdiction in which it is unlawful to make or accept an offer of the Firm Placing Shares or Open Offer Shares and it is not acting on a non-discretionary basis for any such person;

(r) the Placee has not, directly or indirectly, distributed, forwarded, transferred or otherwise transmitted this announcement or any other offering materials concerning the Firm Placing or the Placing to any persons within the United States or any other Excluded Territory, nor will it do any of the foregoing;

(s) the Placee accepts that if either or both of the Firm Placing and/or the Placing does not proceed, or the conditions to the Sponsor and Placing Agreement are not satisfied, or the Firm Placing Shares or Open Offer Shares for which valid applications are received and accepted are not admitted to listing on the premium segment of the Official List and to trading on the London Stock Exchange's Main Market, for any reason whatsoever, then neither Joint Bookrunner, nor the Company, nor persons controlling, controlled by or under common control with any of them nor any of their respective employees, agents, officers, members, stockholders, partners or representatives, shall have any liability whatsoever to it or any other person;

(t) in the case of a person who confirms to Liberum on behalf of a Placee an agreement to purchase Firm Placing Shares under the Firm Placing and/or Open Offer Shares under the Placing and/or who authorises Liberum to notify such Placee's name to the Registrars, that person represents and warrants that he has authority to do so on behalf of the Placee;

(u) the Placee is aware of, and has complied with, its obligations under the Criminal Justice Act 1993, the Market Abuse Regulation and the Proceeds of Crime Act 2002;

(v) in respect of each person on whose behalf the Placee is subscribing for Firm Placing Shares and/or Open Offer Shares (i) the Placee has complied with the customer due diligence measures required by the Money Laundering Regulations in relation to its client (and any beneficial owner), (ii) the Placee has complied fully with all other obligations imposed by the Money Laundering Regulations, and (iii) the Placee will provide Liberum on demand with any information it may require for the purposes of its compliance with the Money Laundering Regulations and any related or similar rules, regulations or guidelines, issued, administered or enforced by any government agency having jurisdiction in respect thereof;

(w) the Placee is not, and is not applying as nominee or agent for, a person to whom the issue of any Firm Placing Shares and/or Open Offer Shares (as applicable) would give rise to a liability under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary receipts and clearance services), and that the Firm Placing Shares and/or the Open Offer Shares (as applicable) are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer Firm Placing Shares and/or Open Offer Shares (as applicable) into a clearing system;

(x) the Placee is acting as principal only in respect of the Firm Placing and/or the Placing or, if it is acting for any other person: (i) it is duly authorised to do so and has full power to make the acknowledgments, warranties, representations, undertakings and agreements herein on behalf of each such person; and (ii) it is and will remain liable to the Company and/or Liberum for the performance of all its obligations as a Placee in respect of the Firm Placing and/or the Placing (regardless of the fact that it is acting for another person);

(y) if a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, represents, warrants and undertakes that the Firm Placing Shares and/or the Open Offer Shares purchased by it in the Firm Placing and/or the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a Member State of the European Economic Area which has implemented the Prospectus Directive other than persons who are "qualified investors" within the meaning of the law in the relevant Member State implementing Article 2(1)(e)(i), (ii) or (iii) of the Prospectus Directive (each a "Qualified Investor"), or in circumstances in which the prior consent of Liberum has been given to the offer or resale;

(z) the Placee has not offered or sold and will not offer or sell any Firm Placing Shares and/or Open Offer Shares to persons in the United Kingdom, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of FSMA;

(aa) the Placee has not offered or sold and will not, prior to Admission of the Capital Raising Shares, offer or sell any Firm Placing Shares and/or Open Offer Shares to persons in the European Economic Area except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public (within the meaning of the Prospectus Directive) in any member state of the European Economic Area;

(bb) if the Placee is a resident in a member state of the European Economic Area (other than the United Kingdom), the Placee is a Qualified Investor;

(cc) if the Placee is within the United Kingdom, the Placee is (a) a person falling within (i) Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "FPO") or (ii) Article 49(2)(a) to (d) of the FPO, and could, if they were a client of Liberum, be categorised as a "Professional Client" or "Eligible Counterparty" within the meaning of Chapter 3 of the FCA's Conduct of Business Sourcebook and undertakes that it will acquire, hold, manage or dispose of any Firm Placing Shares and/or Open Offer Shares that are allocated to it for the purposes of its business or (b) a qualified investor (as that term is defined in section 86(7) of FSMA) or (c) a person to whom this announcement may otherwise be lawfully communicated;

(dd) the Placee's participation in the Firm Placing and/or the Placing and Open Offer will not require it to make a mandatory offer under Rule 9 of the City Code on Takeovers and Mergers;

(ee) the Placee is not subscribing for Firm Places Shares and/or Open Offer Shares pursuant to an agreement or understanding (whether formal or informal) with another person or persons or to obtain or consolidate control of the Company;

(ff) the Placee has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Firm Placing Shares and/or the Open Offer Shares (as applicable) in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

(gg) the Placee acknowledges and agrees that no action has been or will be taken by either the Company or the Joint Bookrunners or any person acting on behalf of the Company or the Joint Bookrunners that would, or is intended to, permit a public offer of the Firm Placing Shares and/or the Open Offer Shares in any country or jurisdiction where any such action for that purpose is required;

(hh) the exercise by either Joint Bookrunner or Deloitte of any rights or discretions under the Sponsor and Placing Agreement shall be within each of their absolute discretions and the Joint Bookrunners and Deloitte need not have any reference to any Placee and shall have no liability to any Placee whatsoever in connection with any decision to exercise or not to exercise any such right and each Placee agrees that it shall have no rights against either Joint Bookrunner or Deloitte or any of their respective directors or employees under the Sponsor and Placing Agreement;

(ii) the Placee irrevocably appoints any director of Liberum as its agent for the purposes of executing and delivering to the Company and/or the Registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Firm Placing Shares and/or Open Offer Shares agreed to be taken up by it under the Firm Placing and/or the Placing and otherwise to do all acts, matters and things as may be necessary for, or incidental to, its acquisition of any Firm Placing Shares and/or Open Offer Shares in the event of its failure so to do;

(jj) the Placee acknowledges that any money held in an account with or on behalf of a Joint Bookrunner on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FCA. The Placee further acknowledges that the money will not be subject to the protections conferred by the client money rules. As a consequence, this money will not be segregated from such Joint Bookrunner's money in accordance with the client money rules and will be used by such Joint Bookrunner in the course of their own business and the Placee will rank only as a general creditor of such Joint Bookrunner;

(kk) the Placee accepts that the allocation of Open Offer Shares and Firm Placing Shares shall be determined by Liberum in its absolute discretion, but in consultation with the Company and Zeus Capital, that Liberum may scale down any commitments for this purpose on such basis as they may determine;

(ll) except as set out in paragraph (mm), below, represents and warrants that it has neither received nor relied on any "inside information" (for the purposes of the Market Abuse Regulation and section 56 of the Criminal Justice Act 1993) concerning the Company prior to or in connection with accepting the invitation to participate in the Firm Placing and/or the Placing and is not purchasing Firm Placing Shares and/or Open Offer Shares on the basis of material non-public information;

(mm) if it has received any "inside information" (for the purposes of the Market Abuse Regulation and section 56 of the Criminal Justice Act 1993) in relation to the Company and its securities, it confirms that it has received such information within the market soundings regime provided for in Article 11 of the Market Abuse Regulation and associated delegated regulations and it has not: (i) dealt (or attempted to deal) in the securities of the Company; (ii) encouraged, recommended or induced another person to deal in the securities of the Company; or (iii) unlawfully disclosed inside information to any person, prior to the information being made publicly available; and

(nn) time shall be of the essence as regards its obligations to settle payment for the Firm Placing Shares and/or Open Offer Shares comprised in its Placing Commitment and to comply with its other obligations under the Firm Placing and/or the Placing.

5 Off-set

(a) If the relevant Placee is also a Qualifying Shareholder and it applies to subscribe for Open Offer Shares to which it is entitled under the Open Offer in accordance with its terms, such Placee can elect to have all or part of the number of Open Offer Shares (subject to clawback) comprised in its Placing Commitment reduced by up to the number of Open Offer Shares which it has validly applied and paid for under the Open Offer ("Off-Set").

(b) If the relevant Placee is also a Qualifying Shareholder and wishes to take advantage of the Off-Set arrangements, it should notify Liberum without delay and in any event by 4.30 p.m. on 22 December 2017, in which case Liberum will issue the relevant instruction form. If the completed instruction form has not been received by Liberum by 11.00 a.m. on 2 January 2018, the relevant Placee will be deemed to have waived its right of Off-Set.

(c) By accepting the Placing Commitment, the Placee agrees and acknowledges that to the extent that other Placees who are Qualifying Shareholders and who qualify for Off-Set take up Open Offer Shares under the Open Offer and elect to reduce the number of Open Offer Shares for which they are obliged to subscribe under their Placing Commitment, the number of Open Offer Shares subject to clawback which form part of its Placing Commitment may be proportionately increased (although it will not exceed the maximum number of such Placing Shares for which it has agreed to subscribe).

6 Clawback of Open Offer Shares

The Open Offer Shares to be issued under the Placing are subject to clawback to satisfy valid applications received from Qualifying Shareholders under the Open Offer and, at the discretion of Liberum (in consultation with the Company and Zeus Capital) under the Excess Application Facility. The number of Open Offer Shares to be clawed back from Placees will be calculated pro rata to each Placee's commitment to subscribe for the Open Offer Shares.

7 Miscellaneous

The rights and remedies of each Joint Bookrunner, Deloitte, the Registrars and the Company under these terms and conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others.

All documents will be sent at the Placee's risk. They may be sent by post to such Placee at an address notified to the relevant Joint Bookrunner.

The provisions of these terms and conditions of the Firm Placing and/or the Placing may be waived, varied or modified as regards specific Placees or on a general basis by Liberum, in its absolute discretion, in consultation with the Company and Zeus Capital.

The contract to subscribe for Firm Placing Shares and/or Open Offer Shares (as applicable) and the appointments and authorities mentioned herein will be governed by, and construed in accordance with, English law. For the exclusive benefit of the Joint Bookrunners, Deloitte, the Company and the Registrars, each Placee irrevocably submits to the exclusive jurisdiction of the courts of England and Wales in respect of these matters. This does not prevent an action being taken against a Placee in any other jurisdiction. Each Placee waives any objection to proceedings in the courts of England and Wales on the ground of venue or on the ground that proceedings have been brought in an inconvenient forum.

In the case of a joint agreement to subscribe for Firm Placing Shares and/or Open Offer Shares (as applicable), references to a "Placee" in these terms and conditions are to each of such Placees, and such joint Placees' liability is joint and several.