5th Mar 2007 07:04
Mears Group PLC05 March 2007 Not for release, distribution or publication in whole or in part in, into orfrom the United States, Canada, Australia, the Republic of Ireland, the Republic of South Africa, New Zealand or Japan or any other jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction For immediate release 5 March 2007 Mears Group PLC Recommended offer for Careforce Group plc Proposed Placing of 7,532,900 Placing Shares to raise approximately £25.2 million The boards of Mears and Careforce are pleased to announce the terms of arecommended offer, to be made by Mears for the entire issued and to be issuedshare capital of Careforce. Mears also announces today that Investec Bank (UK) Limited has been appointed asits nominated adviser under the AIM Rules. Under the terms of the Offer, Careforce Shareholders will receive 0.4552 newMears Shares for each Careforce Share they hold, valuing each Careforce Share at160p and the entire issued share capital of Careforce at approximately £22.2million. A Cash Alternative will also be offered. Careforce Shareholders who validlyaccept the Offer may elect to receive cash in lieu of some or all of the newMears Shares to which they would otherwise be entitled on the basis of 150p incash for each Careforce Share. The Offer represents a premium of approximately 43.5 per cent. over the ClosingPrice of 111.5p per Careforce Share on 2 March 2007, being the last business dayprior to this announcement and a premium of approximately 47.5 per cent. overthe average Closing Price of 108.5p per Careforce Share for the three monthperiod prior to this announcement. Mears has received irrevocable undertakings to accept the Offer from theCareforce Directors in respect of 18.2 per cent of Careforce's existing issuedordinary share capital. In addition Mears has received irrevocable undertakingsto accept the Offer from certain institutional shareholders of Careforce inrespect of approximately 36.8 per cent of the issued share capital of Careforce.Accordingly, Careforce Shareholders owning approximately 55.0 per cent of theexisting issued ordinary share capital of Careforce have undertaken to acceptthe Offer. Mears will finance the maximum amount of cash payable under the CashAlternative, costs and additional working capital by way of a Placing of7,532,900 new Mears Shares at 334p per share to raise approximately £25.2million before expenses. The Placing requires the approval of MearsShareholders. In the event that Mears Shareholders do not approve the issue ofthe Placing Shares to implement the Placing, the Offer will lapse. In the eventthat the Placing is approved but the Offer lapses, the Placing will proceed withthe net proceeds being applied to finance expansion by Mears into thedomiciliary care market. Following completion of the Acquisition, Careforce's Chief Executive, Mr.Michael Rogers, will join the Mears Board as an executive director withresponsibility for the Enlarged Group's newly formed care division. Commenting on the Offer, Bob Holt, Executive Chairman and CEO of Mears, said: "The recommended offer for Careforce which we have announced today is anexpansion of our public sector services into the community domiciliary careprovision market. There are enormous opportunities ahead for both our existingbusiness and the sector we are moving into." Peter Stone, Chairman of Careforce, said: "There is a strong strategic fit between Careforce and Mears' existingactivities. In particular there are many parallels between the domiciliary caremarket and those in which Mears currently operates. Being part of a larger groupwith a track record of establishing long term partnerships with LocalAuthorities will bring benefits to our clients and employees. Mears has statedits intention to invest in Careforce in order to build an increased share in theUK community and care services market and to continue the acquisition strategywhich we have successfully pursued to date. Overall the Careforce Directors believe that the offer, which is being made at ahealthy premium to our current price, is in the best interests of theshareholders, employees and clients of Careforce and recommend that shareholdersaccept it." Mears has today separately made its preliminary announcement of audited resultsfor the year ended 31 December 2006. A presentation for analysts will be held at10.30 a.m. today at the offices of Investec, 2 Gresham Street, London, EC2V 7QP. Enquiries:Mears Group PLC - Bob Holt / David Robertson 01453 511 518Investec - Keith Anderson / Michael Ansell 020 7597 5970Weber Shandwick Communications - John Coles / Trevor Bass 020 1067 0743 Careforce Group plc - Mike Rogers / John Coleman 01438 310 600Arbuthnot Securities - Alastair Moreton / Richard Tulloch 020 7012 2000Tavistock Communications - John West 020 7920 3150 The above summary is to be read in conjunction with, and subject to, the fulltext of this announcement. Appendix III to this announcement containsdefinitions of certain expressions used in this summary. This announcement does not constitute, or form part of, any offer for, or anysolicitation of any offer for, or an invitation to purchase or subscribe for,securities of Careforce. The Offer will be made solely by the Offer Document and the Form of Acceptance, which will contain the full terms and conditions ofthe Offer, including details of how the Offer may be accepted. Unless otherwise determined by Mears and permitted by applicable law andregulation, the Offer will not be made, directly or indirectly, in, into orfrom, or by use of the mails of, or by any means or instrumentality (including,without limitation, facsimile transmission, telex, telephone or email) ofinterstate or foreign commerce of, or by any facility of a national securitiesexchange of, nor will it be made in, into or from the United States, Canada,Australia, the Republic of Ireland, the Republic of South Africa, New Zealand orJapan or any other jurisdiction if to do so would constitute a violation of therelevant laws of such jurisdiction and the Offer will not be capable ofacceptance by any such use, means, instrumentality or facilities. Accordingly,copies of any documents relating to the Offer must not be, directly orindirectly, mailed, transmitted or otherwise forwarded, distributed or sent, inwhole or in part, in, into or from the United States, Canada, Australia, theRepublic of Ireland, the Republic of South Africa, New Zealand or Japan or anyother jurisdiction if to do so would constitute a violation of the relevant lawsof such jurisdiction and persons receiving such documents (including custodians,nominees and trustees) must not directly or indirectly mail, transmit orotherwise forward, distribute or send them in, into or from any suchjurisdiction as to do so may invalidate any purported acceptance of the Offer. The availability of the Offer to persons who are not resident in the UnitedKingdom may be affected by the laws of the jurisdiction in which they areresident. Persons who are not resident in the United Kingdom should informthemselves about, and observe, applicable requirements. Investec, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting for Mears and for no one else inconnection with the Offer and will not be responsible to anyone other than Mearsfor providing the protections afforded to clients of Investec nor for providingadvice in relation to the Offer. Arbuthnot Securities, which is authorised and regulated in the United Kingdom bythe Financial Services Authority, is acting for Careforce and for no one elsein connection with the Offer and will not be responsible to anyone other than Careforce for providing the protections afforded to customers of ArbuthnotSecurities nor for providing advice in relation to the Offer. CLB Littlejohn Frazer, which is authorised and regulated in the United Kingdomby the Financial Services Authority, is acting for Careforce and for no oneelse in connection with the Offer and will not be responsible to anyone otherthan Careforce for providing the protections afforded to customers of CLBLittlejohn Frazer nor for providing advice in relation to the Offer. The Panel wishes to draw attention to certain UK dealing disclosure requirementsfollowing the announcement of the Offer. An "offer period" is deemed tocommence at the time when an announcement is made of a proposed or possible offer, with or without terms. Accordingly, the offer period began on 5 March2007. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes,"interested" (directly or indirectly) in 1% or more of any class of "relevantsecurities" of Careforce or of Mears, all "dealings" in any "relevant securities" of that company (including by means of an option in respect of, or aderivative referenced to, any such "relevant securities") must be publiclydisclosed by no later than 3.30pm (London time) on the London business day following the date of the relevant transaction. This requirement will continueuntil the date on which the offer becomes, or is declared, unconditional as toacceptances, lapses or is otherwise withdrawn or on which the "offer period"otherwise ends. If two or more persons act together pursuant to an agreement orunderstanding, whether formal or informal, to acquire an "interest" in"relevant securities" of Careforce or of Mears, they will be deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevantsecurities" of Careforce or of Mears by Mears or Careforce, or by any of theirrespective "associates", must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose "relevantsecurities" "dealings" should be disclosed, and the number of such securitiesin issue, can be found on the Takeover Panel's website atwww.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the City Code, which can also be foundon the Panel's website. If you are in any doubt as to whether or not you arerequired to disclose a "dealing" under Rule 8, please contact an independent financial adviser authorised under the Financial Services and Markets Act 2000and/or consult the Panel's website at www.thetakeoverpanel.org.uk or contactthe Panel on telephone number +442076380129; fax +442072367013. The above disclosure requirements are set out in more detail in Rule 8 of the City Code. In accordance with Rule 2.10 of the City Code, Mears confirms that it has61,577,596 ordinary shares of one penny each in issue and admitted to tradingon AIM under the UK ISIN code GB0005630420. In accordance with Rule 2.10 of the City Code, Careforce confirms that it has13,886,944 ordinary shares of 10 pence each in issue and admitted to trading onAIM under the UK ISIN code GB00B03T1L15. Not for release, distribution or publication in whole or in part in, into orfrom the United States, Canada, Australia, the Republic of Ireland, the Republic of South Africa, New Zealand or Japan or any other jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction For immediate release 5 March 2007 Mears Group PLC Recommended offer for Careforce Group plc Proposed Placing of 7,532,900 Placing Shares to raise approximately £25.2 million 1. Introduction The boards of Mears and Careforce are pleased to announce the terms of arecommended offer, to be made by Mears, for the entire issued and to be issuedshare capital of Careforce. The Offer values the entire issued share capital of Careforce at approximately£22.2 million, representing a premium of approximately 43.5 per cent. over theClosing Price of 111.5p per Careforce Share on 2 March 2007, being the lastbusiness day prior to this announcement and a premium of approximately 47.5 percent. over the average Closing Price of 108.5 pence per Careforce Share for thethree month period prior to this announcement. Investec Bank (UK) Limited has today been appointed as nominated adviser toMears under the AIM Rules. 2. Recommendation The Careforce Board, which has been so advised by CLB Littlejohn Frazer,considers the terms of the Offer to be fair and reasonable so far as theCareforce Shareholders are concerned. The Careforce Board has also been advisedby Arbuthnot Securities. Arbuthnot Securities is deemed to be connected to Mearsand, as a consequence of Rule 3 of the City Code, is not acting as independentadviser for the purposes of the Offer. Arbuthnot Securities also considers theterms of the Offer to be fair and reasonable so far as Careforce Shareholdersare concerned. In providing advice to the Careforce Board, CLB Littlejohn Frazerand Arbuthnot Securities have taken into account the commercial assessments ofthe Careforce Board. Accordingly, the Careforce Directors intend unanimously to recommend thatCareforce Shareholders accept the Offer, as they have irrevocably undertaken todo in respect of their beneficial holdings amounting to, in aggregate, 2,526,345Careforce Shares, representing approximately 18.2 per cent. of the existingissued ordinary share capital of Careforce. 3. The Offer Mears will offer to acquire all of the Careforce Shares on the following basis: for every Careforce Share 0.4552 new Mears Shares Fractions of new Mears Shares will not be allotted or issued pursuant to theOffer. The Offer values each Careforce Share at approximately 160p and the existingissued share capital of Careforce at approximately £22.2 million based on thevalue of a Mears Share at the Closing Price of 351.5p on 2 March 2007, being thelast business day prior to this announcement. The Offer represents a premium of approximately 43.5 per cent. over the ClosingPrice of 111.5p per Careforce Share on 2 March 2007, being the last business dayprior to this announcement and a premium of approximately 47.5 per cent. overthe average Closing Price of 108.5p per Careforce Share for the three monthperiod prior to this announcement. New Mears Shares issued under the Offer will rank pari passu with the existingissued Mears Shares including in respect of all dividends made, paid or declaredafter the date of this announcement. The Offer Shares will be entitled toparticipate in the Mears Dividend. The Offer is conditional on, inter alia, the receipt of acceptances in respectof 90 per cent. of the Careforce Shares to which the Offer relates (or suchlower percentage as Mears may, subject to the City Code, decide), the passing ofthe necessary resolution at the EGM of Mears, to implement the Placing, andAdmission of the Offer Shares and the Placing Shares. 4. The Cash Alternative Careforce Shareholders who validly accept the Offer may elect to receive cash inlieu of some or all of the new Mears Shares to which they would otherwise beentitled under the Offer on the following basis: for each Careforce Share 150p in cash The Cash Alternative represents a premium of approximately 34.5 per cent. overthe Closing Price of 111.5p per Careforce Share on 2 March 2007, being the lastbusiness day prior to this announcement and a premium of approximately 38.2 percent. over the average Closing Price of 108.5p per Careforce Share for the threemonth period prior to this announcement. The Cash Alternative will remain open until 1.00 pm on the First Closing Dateprovided that, if the Offer is then unconditional as to acceptances (or is thencapable of being declared unconditional as to acceptances and is extended), theCash Alternative will be extended for at least 14 days thereafter. If the Offeris not then unconditional as to acceptances (or capable of being so declared)and is extended beyond that date, the Cash Alternative will also be extended forat least 14 days, although the right is reserved (subject to the City Code) tolapse or to close the Cash Alternative thereafter. If the Cash Alternativelapses or closes, the right is also reserved to re-introduce a further cashalternative as long as the Offer is still conditional as to acceptances. The right is also reserved to revise, increase and/or extend the CashAlternative should the Takeover Panel so agree or in the event of a competitivesituation arising. For this purpose, references in this announcement to theOffer being unconditional as to acceptances at a particular time shall be deemedto be references to the Offer becoming or being declared unconditional as toacceptances by reference to acceptances received up to that time. 5. Financing the offer Full acceptance of the Offer and full election for the Cash Alternative wouldresult in a maximum cash consideration of approximately £20.8 million beingpayable by Mears to Careforce Shareholders. Mears will finance the maximum cashconsideration by way of the Placing, which requires the approval of MearsShareholders. In the event that Mears Shareholders do not approve the Placing,the Offer will lapse. In the event that the Placing is approved but the Offerlapses, the Placing will proceed with the net proceeds being applied to financeexpansion by Mears into the domiciliary care market. Admission of the Placing Shares is expected to occur two business days followingthe passing of the necessary resolution to implement the Placing. Furtherdetails will be set out in a circular to be sent to Mears Shareholders conveningthe EGM. Investec is satisfied that sufficient cash resources are available to Mears tosatisfy in full the cash consideration payable to Careforce Shareholders underthe Offer. 6. Irrevocable undertakings to accept the Offer Mears has received irrevocable undertakings to accept the Offer from theCareforce Directors in respect of 2,526,345 Careforce Shares in aggregatecomprising undertakings from Michael Rogers in respect of 2,257,793 shares, fromJohn Coleman in respect of 8,000 shares, from Iain MacKinnon in respect of216,952 shares and from Peter Stone in respect of 43,600 shares. The irrevocableundertakings from the Careforce Directors will cease to be binding only if theOffer lapses or is withdrawn or if the Offer Document is not posted within 28days of this announcement. The undertakings will remain binding if a highercompeting offer is made for Careforce. Michael Rogers has undertaken to receiveMears Shares in respect of 225,000 Careforce Shares and elect for the CashAlternative in respect of the balance of his holding. Mears has received irrevocable undertakings to accept the Offer from fundsmanaged by subsidiaries of Close Brothers in respect of 3,711,984 CareforceShares in aggregate comprising undertakings from Close Ventures Limited inrespect of 3,466,700 shares and from Close Investments Limited in respect of245,284. These irrevocable undertakings will cease to be binding only if theOffer lapses or is withdrawn or if the Offer Document is not posted within 28days of this announcement. These entities have undertaken to accept Mears Sharesin respect of 1,245,284 Careforce Shares and to elect for the Cash Alternativein respect of the balance of their holdings of Careforce Shares. Mears has received an irrevocable undertaking from Invesco Asset ManagementLimited ("Invesco") to accept the Offer in respect of 1,396,850 Careforce Sharesheld by funds managed by it. This undertaking will cease to be binding if theOffer Document is not posted within 28 Days of this announcement or if inInvesco's sole reasonable opinion, a competing offer is made which values aCareforce Share at 10 per cent. or more than the per share value of the Offer.It will also cease to be binding in certain circumstances if the relevant fundscease to be managed by Invesco. Invesco has undertaken not to accept the CashAlternative with respect to 1,396,850 Careforce Shares. In total, therefore, Mears has received irrevocable undertakings to accept theOffer in respect of 7,635,179 Careforce Shares representing approximately 55.0per cent. of the existing ordinary share capital of Careforce. 7. Background to and reasons for the Offer In the ten years since Mears was admitted to trading on AIM, Mears has achievedstrong, consistent growth in turnover and profits. Mears' principal business isnow one of the largest social housing repairs and maintenance providers in theUK, providing rapid response and planned maintenance services to LocalAuthorities and registered social landlords and is a substantial provider ofbuilding services under the Decent Homes programme, which is a programme set bythe UK Government to ensure all social housing meets set standards of decency. The Government is seeking to build on the progress of its Decent Homes programmeby broadening the focus of activity from improving housing quality towardsimproving the services provided to communities. This development by theGovernment, termed Sustainable Communities, aims to meet the diverse needs ofexisting and future residents, their children and other users, to contribute toa high quality of life and to provide opportunity and choice. This strategy isperceived by the Government to be an important step, alongside improvement inhousing standards, in improving the quality of lives within the relevantcommunities. During the second half of 2006, the Mears Board conducted a review of the UKGovernment's Sustainable Communities commentary to appraise any attractiveopportunities where Mears could effectively utilise its skills, experience andrelationships. The Mears Directors have identified domiciliary care as anattractive and significant market in itself which the Mears Directors believeshould provide substantial future growth opportunities for the Mears Group. Inaddition, the Mears Directors believe entering this market will improve theMears Group's positioning as the Sustainable Communities policy develops. Domiciliary care involves providing care for the elderly (the largest recipientgroup), disabled people or others who need assistance carrying out their dailylife within their homes. Each year, Local Authorities in the UK spend over £2billion on domiciliary care, and the Mears Directors believe that future growthis underpinned by a number of factors: the demographic trend for people to livelonger; a Government policy towards promoting care in the home as opposed toresidential care; and an increased trend in the outsourcing of these services byLocal Authorities. The Mears Directors believe that domiciliary care provides an attractiveopportunity in a market with a strong strategic fit with Mears' existingactivities, namely: • the Mears Group already serves a significant user group of domiciliary care, those living in social housing, and has good relationships with them; • the Mears Group has considerable experience of working with Local Authorities under long term contracts; • the Mears Group has experience of developing Local Authority contracts with a move towards a partnership based ethos; • in its existing business, the Mears Group has expertise and experience in managing and developing work patterns of a similar profile to that of domiciliary care; and • domiciliary care represents a community-centred activity with a close fit with Mears' existing "Improving homes, improving neighbourhoods, improving lives" ethos. Historically, the social housing market was characterised by price-baseddecision making. Over time this has moved towards an outcome-based approachwhere the quality of service, not just price, has become an important factor.The Mears Directors believe that there is potential for Mears to develop thesophistication of the domiciliary care market which has parallels with the wayin which Mears has driven the development of the social housing market duringthe last ten years, from a price-based to an outcome--based approach. The MearsDirectors believe that Mears can develop a unique, differentiated position inthe domiciliary care market as a larger scale operator with an innovative andfirst class quality service. The Mears Directors believe the acquisition of Careforce will bring into theMears Group a well established and growing provider of domiciliary care servicesin the community, broadening Mears' existing offering and providing a platformto build its position in the market. Following the Acquisition, the MearsDirectors intend to invest in Careforce's infrastructure with the aim ofimproving profitability and to continue to develop and implement Careforce'sacquisition strategy. The UK care market has experienced recent pricing pressure with LocalAuthorities under budgetary constraints to fulfill care needs in the community.The Mears Directors believe Mears can bring a long term partnership ethos to thesector, building on the Mears Group's track record of establishing long termpartnership relationships with Local Authorities. The Mears Directors believethat the domiciliary care sector will evolve towards a partnership approachsimilar to that of the social housing sector. The Mears Directors believe thatstakeholders at all levels could benefit from this long term investmentapproach. 8. Information relating to the Mears Group Mears is a leading provider of social housing repairs and maintenance in the UK,including rapid response and planned maintenance services. Mears provides thelarge majority of its services to UK public sector organisations and workspredominantly with Local Authorities and registered social landlords. Inaddition, Mears has a mechanical and electrical division and a vehicledistribution division. As announced today, for the year ended 31 December 2006, Mears reported turnoverof £241.4 million (2005: £203.5 million), an increase of 18.6 per cent. Profitbefore tax and amortisation increased 28.4 per cent. to £12.5 million (2005:£9.8 million) and normalised diluted earnings per share pre amortisationincreased 26.2 per cent. to 13.63p (2005: 10.80p). The Mears Board has proposeda final dividend of 2.4p, making the total dividend for the year 3.3p (2005:2.6p) a 26.9 per cent. increase. The order book currently stands atapproximately £1.1 billion. 9. Information relating to the Careforce Group Careforce is the holding company of a group of companies providing domiciliarycare services, supporting people, mainly those over 65 years of age, to remainin their own homes through the provision of personal care services, which aredelivered principally as part of outsourcing arrangements with LocalAuthorities. Formed in 1999 to take advantage of the growing trend for Local Authorities tooutsource domiciliary care to the private sector, Careforce has grown from onebranch in 1999 to 28 branches with operations in Yorkshire, East Anglia, theMidlands and the North West and South East of England. The growth in thebusiness and the number of branches has been achieved both organically andthrough acquisitions. Approximately 80 per cent. of Careforce's turnover is generated fromarrangements with Local Authorities and Primary Care Trusts, the majority ofwhich are provided under medium to long-term contracts. Careforce currently has23 Local Authority and Primary Care Trust clients. Revenue for the year ended 31 July 2006 increased by approximately 42 per cent.to £28.8 million (2005: £20.3 million). Operating profit increased byapproximately 60 per cent. to £1.1 million 2005: £0.7 million), and profitbefore tax increased by approximately £0.82 million to £0.77 million (2005: loss£0.04 million), giving earnings per Careforce Share of 4.1 pence (2005: loss0.71 pence). Equity shareholders funds were £7.4 million as at 31 July 2006(2005: £7.0). On 12 February 2007, Careforce provided a trading update following the end ofthe six month period to 31 January 2007, which included the following statement: "While activity has continued to reflect the market trends of ongoing budgetarypressures of its local authority clients, as referred to in the Company'sNovember 2006 results statement, trading has been broadly satisfactory in thefirst half. Careforce has recently announced significant contract wins inNorthamptonshire and is seeing early indications of increased referrals fromsome of its local authority clients." 10. Integration, Careforce Board, management and employees It is Mears' intention that Careforce will be integrated into Mears' managementand control systems. Due to the complementary nature of the businesses, theMears Board anticipates that Careforce will operate within the Enlarged Groupalongside existing Mears businesses with close liaison in respect of crossselling and other revenue-enhancing opportunities. Separate market-facingidentity and branding will be retained where this is considered to have arecognisable value in the particular market. Mears intends to carry out an operational review in the period following thecompletion of the Offer in order to identify opportunities for functionalalignment. It is not intended that Mears will integrate any of the central orhead office functions following completion of the Acquisition. It is expectedthat cost savings following completion of the Acquisition will comprise thestandard administration and board costs that Careforce incurs as a publiclyquoted company. It is intended that Mears will invest in Careforce in order tobuild an increased market position in the UK domiciliary care market and it isparamount that Careforce's support functions are strengthened to provide a solidplatform for future growth. Following completion of the Acquisition, Careforce's Chief Executive, Mr MichaelRogers, will join the Mears Board as an executive director with responsibilityfor the Enlarged Group's newly formed care division. The Mears Board recognises the importance of the skills and experience of theexisting management and employees of Careforce and believes that opportunitiesfor them will be enhanced in the event that the Offer completes. In particular,Mears' strategic plans for Careforce are not expected to have a material impacton employment or the locations of Careforce's places of business. Nor are theyexpected to lead to a material redeployment of Careforce's fixed assets and arenot expected to result in any material changes in the conditions of employmentfor Careforce employees. Mears intends that on the Offer becoming wholly unconditional, the accruedemployment rights, including pension rights, of all management and employees ofCareforce will be fully safeguarded. 11. Careforce Share Option Schemes The Offer will extend to any Careforce Shares which are issued orunconditionally allotted prior to the date on the which the Offer closes (orsuch earlier date as Mears may, subject to the Code, determine), as a result ofthe exercise of options granted under the Careforce Share Option Schemes. If the Offer is declared or becomes unconditional in all respects, Mears willmake appropriate proposals to holders of options under the Careforce ShareOption Schemes. 12. Compulsory acquisition, de-listing and re-registration If Mears receives acceptances under the Offer in respect of, and/or otherwiseacquires, 90 per cent. or more of the Careforce Shares to which the Offerrelates and the Offer becomes or is declared unconditional in all respects,Mears intends to exercise its rights under sections 428 to 430F of the Act toacquire compulsorily any remaining Careforce Shares following the Offer becomingor being declared unconditional in all respects. When the Offer becomes or is declared unconditional in all respects, and subjectthereto, Mears intends to procure the making of an application by Careforce forcancellation of the admission to trading of Careforce Shares on AIM. A noticeperiod of not less than 20 business days prior to the cancellation of listingand trading will take effect after the Offer becomes or is declaredunconditional in all respects. The cancellation of the listing will significantly reduce the liquidity andmarketability of any Careforce Shares not assented to the Offer and their valuemay be affected in consequence. 13. Extraordinary General Meeting The Offer is conditional on, inter alia, the receipt of acceptances in respectof 90 per cent. of the Careforce Shares to which the Offer relates (or suchlower percentage as Mears may, subject to the City Code, decide), the passing ofthe necessary resolution to implement the Placing at the EGM, and Admission ofthe Offer Shares and Placing Shares. The Placing is conditional on, inter alia, the passing of the necessaryresolution to implement the Placing at the EGM, Admission of the Placing Sharesbecoming effective and the placing agreement becoming unconditional in allrespects. 14. Inducement fee As an inducement to Mears to make the Offer, Careforce has agreed to pay Mears£222,400 (inclusive of value added tax, except to the extent that such VAT isrecoverable by Careforce) being one per cent. of the value of the Offer, or suchother amount as the Panel may agree, in certain circumstances including if (i)another offer is received after the date of this announcement from a third partywhich becomes or is declared wholly unconditional or (ii) if Careforce indicatesafter the date of this announcement that it is no longer in a position torecommend the Offer or the terms of the recommendation of the Offer are, in theabsolute discretion of Mears, adversely modified. 15. Disclosure of interests in Careforce On 6 June 2006 Reginald Pomphrett, a Mears Director, purchased a contract fordifferences in respect of 20,000 Careforce Shares at a price of 91.75p perCareforce Share. Save as disclosed above and save for the irrevocable undertakings referred to inparagraph 6 of this announcement, neither Mears nor any of its directors nor, sofar as the directors of Mears are aware, any person deemed to be acting inconcert (as defined in the City Code) with Mears has any interest in or right tosubscribe for Careforce Shares or has any short position (including any shortpositions under a derivative, any agreement to sell or any delivery obligationor right to require another person to take delivery) in Careforce Shares or hasborrowed or lent any Careforce Shares (save for any borrowed shares which haveeither been on-lent or sold) or owns or controls any Careforce Shares or has anyoptions to acquire Careforce Shares or has procured or received an irrevocablecommitment or letter of intent to accept, or procure the acceptance of, theOffer. Neither Mears nor, so far as the directors of Mears are aware, any personacting in concert with Mears for the purposes of the Offer has any arrangementin relation to Careforce Shares or any securities convertible into orexchangeable into Careforce Shares or options (including traded options) inrespect of, or derivatives referenced to, any such shares. For these purposes,"arrangement" includes any indemnity or option arrangement, any agreement orunderstanding, formal or informal, of whatever nature, relating to CareforceShares (or such other securities specified) which may be an inducement to dealor refrain from dealing in such shares. In the interests of confidentialityprior to this announcement, Mears has not made any enquiries in this respect ofcertain parties who may be presumed by the Panel to be acting in concert withMears for the purposes of the Offer. 16. General The conditions of the Offer are set out in Appendix I. Appendix II contains additional information regarding the Offer and the basesand sources of certain information contained in this announcement. Appendix III contains the definitions of certain expressions used in thisannouncement. It is intended that the Offer Document and Form of Acceptance will be dispatchedshortly to Careforce Shareholders and, for information only, to holders ofoptions under the Careforce Share Option Schemes. The terms of the Offer andacceptances will be governed by English law. This announcement does not constitute, or form part of, any offer for, or anysolicitation of any offer for, or an invitation to purchase or subscribe for,securities of Careforce. The Offer will be made solely by the Offer Document and the Form of Acceptance, which will contain the full terms and conditions ofthe Offer, including details of how the Offer may be accepted. Unless otherwise determined by Mears and permitted by applicable law andregulation, the Offer will not be made, directly or indirectly, in, into orfrom, or by use of the mails of, or by any means or instrumentality (including,without limitation, facsimile transmission, telex, telephone or email) ofinterstate or foreign commerce of, or by any facility of a national securitiesexchange of, nor will it be made in, into or from the United States, Canada,Australia, the Republic of Ireland, the Republic of South Africa, New Zealand orJapan or any other jurisdiction if to do so would constitute a violation of therelevant laws of such jurisdiction and the Offer will not be capable ofacceptance by any such use, means, instrumentality or facilities. Accordingly,copies of any documents relating to the Offer must not be, directly orindirectly, mailed, transmitted or otherwise forwarded, distributed or sent, inwhole or in part, in, into or from the United States, Canada, Australia, theRepublic of Ireland, the Republic of South Africa, New Zealand or Japan or anyother jurisdiction if to do so would constitute a violation of the relevant lawsof such jurisdiction and persons receiving such documents (including custodians,nominees and trustees) must not directly or indirectly mail, transmit orotherwise forward, distribute or send them in, into or from any suchjurisdiction as to do so may invalidate any purported acceptance of the Offer. The availability of the Offer to persons who are not resident in the UnitedKingdom may be affected by the laws of the jurisdiction in which they areresident. Persons who are not resident in the United Kingdom should informthemselves about, and observe applicable requirements. The Mears Directors accept responsibility for the information contained in thisannouncement, other than that relating to the Careforce Group and the CareforceDirectors and their immediate families. To the best of the knowledge and beliefof such directors (who have taken all reasonable care to ensure that such is thecase), the information contained in this announcement for which they arerespectively responsible is in accordance with the facts and does not omitanything likely to affect the import of such information. The Careforce Directors accept responsibility for the information contained inthis announcement relating to the Careforce Group, themselves and members oftheir immediate families. To the best of the knowledge and belief of theCareforce Directors (who have taken all reasonable care to ensure that such isthe case), the information contained in this announcement for which they acceptresponsibility is in accordance with the facts and does not omit anything likelyto affect the import of such information. Investec, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting for Mears and for no one else inconnection with the Offer and will not be responsible to anyone other than Mearsfor providing the protections afforded to clients of Investec nor for providingadvice in relation to the Offer. Arbuthnot Securities, which is authorised and regulated in the United Kingdom bythe Financial Services Authority, is acting for Careforce and for no one elsein connection with the Offer and will not be responsible to anyone other than Careforce for providing the protections afforded to customers of ArbuthnotSecurities nor for providing advice in relation to the Offer. CLB Littlejohn Frazer, which is authorised and regulated in the United Kingdomby the Financial Services Authority, is acting for Careforce and for no oneelse in connection with the Offer and will not be responsible to anyone otherthan Careforce for providing the protections afforded to customers of CLBLittlejohn Frazer nor for providing advice in relation to the Offer. Dealing disclosure requirements The Panel wishes to draw attention to certain UK dealing disclosure requirementsfollowing the announcement of the Offer. An "offer period" is deemed tocommence at the time when an announcement is made of a proposed or possible offer, with or without terms. Accordingly, the offer period began on 5 March2007. The above disclosure requirements are set out in more detail in Rule 8 of theCity Code. Under the provisions of Rule 8.3 of the City Code, if any personis, or becomes, "interested" (directly or indirectly) in 1% or more of any classof "relevant securities" of Careforce or of Mears, all "dealings" in any"relevant securities" of that company (including by means of an option inrespect of, or a derivative referenced to, any such "relevant securities") mustbe publicly disclosed by no later than 3.30pm (London time) on the Londonbusiness day following the date of the relevant transaction. This requirementwill continue until the date on which the offer becomes, or is declared,unconditional as to acceptances, lapses or is otherwise withdrawn or on whichthe "offer period" otherwise ends. If two or more persons act togetherpursuant to an agreement or understanding, whether formal or informal, toacquire an "interest" in "relevant securities" of Careforce or of Mears, theywill be deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevantsecurities" of Careforce or Mears by Mears or Careforce, or by any of theirrespective "associates", must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose "relevantsecurities" "dealings" should be disclosed, and the number of such securitiesin issue, can be found on the Takeover Panel's website atwww.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the City Code, which can also be foundon the Panel's website. If you are in any doubt as to whether or not you arerequired to disclose a "dealing" under Rule 8, please contact an independent financial adviser authorised under the Financial Services and Markets Act 2000and/or consult the Panel's website at www.thetakeoverpanel.org.uk or contactthe Panel on telephone number +442076380129; fax +442072367013. APPENDIX I Conditions and further terms of the Offer Part A: Conditions of the Offer The Offer will be subject to the following conditions: (a) valid acceptances being received (and not, where permitted,withdrawn) by not later than 1.00 p.m. on the First Closing Date of the Offer(or such later time(s) and/or date(s) as Mears may, subject to the rules of theCity Code, decide) in respect of not less than 90 per cent. (or such lesserpercentage as Mears may decide) in nominal value of the Careforce Shares towhich the Offer relates, provided that, unless agreed by the Panel, thiscondition will not be satisfied unless Mears and/or its wholly-ownedsubsidiaries have acquired or agreed to acquire (pursuant to the Offer orotherwise), directly or indirectly, Careforce Shares carrying, in aggregate,more than 50 per cent. of the voting rights then normally exercisable at generalmeetings of Careforce on such basis as may be required by the Panel (includingfor this purpose, to the extent (if any) required by the Panel, any votingrights attaching to any Careforce Shares which are unconditionally allotted orissued before the Offer becomes or is declared unconditional as to acceptances,whether pursuant to the exercise of conversion or subscription rights orotherwise); and for this purpose (i) the expression "Careforce Shares to whichthe Offer relates" shall be construed in accordance with sections 428 to 430F ofthe Act; (ii) Careforce Shares which have been unconditionally allotted but notissued shall be deemed to carry the voting rights which they will carry on issueand; (iii) shares that cease to be held in treasury are Careforce Shares towhich the Offer relates; (b) the London Stock Exchange announcing its decision to admit totrading on AIM the new Mears Shares to be issued pursuant to the Offer and thePlacing (subject only to allotment), and such admission becoming effective inaccordance with the AIM Rules; (c) the passing at an Extraordinary General Meeting (or at anyadjournment thereof) of Mears of a resolution to disapply the statutorypre-emption rights in respect of the new Mears Shares in order to implement theOffer and the Placing; (d) no government or governmental, quasi-governmental, supranational,statutory or regulatory body, or any court, institution, investigative body,association, trade agency or professional or environmental body or (withoutprejudice to the generality of the foregoing) any other person or body in anyjurisdiction (each, a "Relevant Authority") having decided to take, instituted,implemented or threatened any action, proceedings, suit, investigation orenquiry or enacted, made or proposed any statute, regulation or order orotherwise taken any other step or done any thing, and there not beingoutstanding any statute, legislation or order, that would or might: (i) restrict, restrain, prohibit, delay, impose additionalconditions or obligations with respect to, or otherwise interfere with theimplementation of, the Offer or the acquisition of any Careforce Shares by Mearsor the control by Mears of Careforce or any matters arising there from; (ii) result in a delay in the ability of Mears, or render Mearsunable, to acquire some or all of the Careforce Shares; (iii) require, prevent, delay or affect the divestiture by anymember of the Wider Mears Group or of the Wider Careforce Group of all or anyportion of their businesses, assets or property or of any Careforce Shares orother securities in Careforce or impose any limitation on the ability of any ofthem to conduct their respective businesses or own their respective assets orproperties or any part thereof; (iv) impose any limitation on the ability of any member of theWider Mears Group to acquire or hold or exercise effectively, directly orindirectly, all rights of all or any of the Careforce Shares (whether acquiredpursuant to the Offer or otherwise); (v) require any member of the Wider Mears Group or the WiderCareforce Group to offer to acquire any shares or other securities or rightsthereover in any member of the Wider Careforce Group owned by any third party(save as required by law or pursuant to the Offer); (vi) make the Offer or its implementation or the proposedacquisition of Careforce or any member of the Wider Careforce Group or of anyCareforce Shares or any other shares or securities in, or control of, Careforce,illegal, void or unenforceable in or under the laws of any jurisdiction; (vii) impose any limitation on the ability of any member of the WiderMears Group or the Wider Careforce Group to co-ordinate its business, or anypart of it, with the business of any other member of the Wider Mears Group orthe Wider Careforce Group to an extent which is material in the contextrespectively of the relevant member of the Wider Mears Group or the WiderCareforce Group; (viii) result in any member of the Wider Mears Group or WiderCareforce Group ceasing to be able to carry on business in a manner in which itpresently does so to an extent which is material in the context respectively ofthe relevant member of the Wider Mears Group or the Wider Careforce Group; or (ix) otherwise adversely affect any or all of the businesses,assets, prospects or profits of any member of the Wider Mears Group or the WiderCareforce Group to an extent which is material in the context respectively ofthe relevant member of the Wider Mears Group or the Wider Careforce Group or theexercise of rights of shares of any company in the Careforce Group, and all applicable waiting periods during which such Relevant Authority couldinstitute, implement or threaten any such action, proceeding, suit,investigation, enquiry or reference or otherwise intervene having expired,lapsed or been terminated; (e) all authorisations, orders, grants, consents, clearances, licences,permissions and approvals, in any jurisdiction, deemed necessary or appropriateby Mears for or in respect of the Offer, the proposed acquisition of any sharesor securities in, or control of, Careforce or any member of the Wider CareforceGroup by Mears or the carrying on of the business of any member of the WiderCareforce Group or Mears or any matters arising there from being obtained interms satisfactory to Mears from all appropriate Relevant Authorities or(without prejudice to the generality of the foregoing) from any persons orbodies with whom any members of the Wider Careforce Group or the Wider MearsGroup has entered into contractual arrangements and such authorisations, orders,grants, consents, clearances, licences, permissions and approvals remaining infull force and effect and there being no intimation of any intention to revokeor not to renew the same and all necessary filings having been made, allappropriate waiting and other time periods (including extensions thereto) underany applicable legislation and regulations in any jurisdiction having expired,lapsed or been terminated and all necessary statutory or regulatory obligationsin any jurisdiction in respect of the Offer or the proposed acquisition ofCareforce by Mears or of any Careforce Shares or any matters arising there fromhaving been complied with; (f) appropriate assurances being received, in terms satisfactory toMears, from the Relevant Authorities or any party with whom any member of theWider Careforce Group has any contractual or other relationship that theinterests held by any member of the Wider Careforce Group under licences,leases, consents, permits and other rights will not be adversely amended orotherwise affected by the Offer or the proposed acquisition of Careforce or anymatters arising there from, that such licences, leases, consents, permits andother rights are in full force and effect and that there is no intention torevoke or amend any of the same; (g) save as fairly disclosed in writing to Mears prior to the date ofannouncement of the Offer, there being no provision of any agreement,instrument, permit, licence or other arrangement to which any member of theWider Careforce Group is a party or by or to which it or any of its assets maybe bound or subject which, as a consequence of the Offer or the acquisition ofCareforce or because of a change in the control or management of Careforce orany member of the Careforce Group or any matters arising there from orotherwise, could or might have the result that: (i) any monies borrowed by, or other indebtedness, actual orcontingent, of, or grant available to, any member of the Wider Careforce Groupbecomes or is capable of being declared repayable immediately or earlier thanthe repayment date stated in such agreement, instrument or other arrangement orthe ability of any member of the Wider Careforce Group to borrow moneys or incurindebtedness is withdrawn, inhibited or adversely affected; (ii) any mortgage, charge or other security interest is created overthe whole or any part of the business, property or assets of any member of theWider Careforce Group or any such security (whenever arising) becomesenforceable; (iii) any such agreement, instrument, permit, licence or otherarrangement, or any right, interest, liability or obligation of any member ofthe Wider Careforce Group therein, is terminated or adversely modified oraffected or any action is taken or obligation or liability arises there under; (iv) the value of any member of the Wider Careforce Group or itsfinancial or trading position is prejudiced or adversely affected; (v) any material asset or, other than in the ordinary course ofbusiness, any asset of the Wider Careforce Group being or falling to be chargedor disposed of; (vi) the rights, liabilities, obligations or interests or business ofany member of the Wider Careforce Group in or with any other person, firm orcompany (or any arrangement relating to such interest or business) isterminated, modified or adversely affected in a manner that is materiallyadverse to the Careforce Group taken as a whole; (vii) any material liability (actual, contingent or otherwise) iscreated or accelerated in respect of any member of the Wider Careforce Group; (viii) any third party receiving additional or enhanced rights withrespect to the intellectual property of the Wider Careforce Group; or (ix) any member of the Wider Careforce Group ceases to be able to carryon business under any name under which it currently does so; (h) since 31 July 2006 (being the date to which the latest publishedaudited report and accounts of Careforce were made up) and save as disclosed inCareforce's published published report and accounts or save as announcedpublicly and in each case delivered to a Regulatory Information Service (asdefined in the Listing Rules) or fairly disclosed in writing to Mears inconnection with the Offer prior to the date of this announcement no member ofthe Careforce Group having: (i) issued or agreed to issue or authorised or proposed the issueof additional shares of any class or issued or authorised or proposed the issueof or granted securities convertible into or rights, warrants or options tosubscribe for or acquire such shares or convertible securities or redeemed,purchased or reduced or announced any intention to do so or made any otherchange to any part of its share capital; (ii) sold or transferred or agreed to sell or transfer any TreasuryShares; (iii) recommended, declared, paid or made or proposed to recommend,declare, pay or make any dividend, bonus or other distribution other thandividends lawfully paid to Careforce or wholly-owned subsidiaries of Careforce; (iv) authorised or proposed or announced its intention to propose anymerger or acquisition or disposal or transfer of assets or shares or any changein its share or loan capital (other than pursuant to the Offer); (v) issued or authorised or proposed the issue of any debentures orincurred or increased any indebtedness or contingent liability; (vi) disposed of or transferred, mortgaged or encumbered any materialasset or any right, title or interest in any asset or entered into or varied anycontract, commitment or arrangement (whether in respect of capital expenditureor otherwise) which is of a long term or unusual nature or which involves orcould involve an obligation of a nature or magnitude which is material orauthorised, proposed or announced any intention to do so; (vii) entered into or varied or proposed to enter into or vary anymaterial contract, reconstruction, amalgamation, arrangement or othertransaction which is of a long term or unusual or onerous nature or is otherwisethan in the ordinary course of business or announced any intention to do so; (viii) entered into, or varied the terms of, any contract or agreementwith any of the directors or senior executives of Careforce; (ix) taken or proposed any corporate action or had any legalproceedings started or threatened against it for its winding-up, dissolution orreorganisation or for the appointment of a receiver, administrator,administrative receiver, trustee or similar officer of all or any of its assetsand revenues; (x) waived or compromised any material claim other than in theordinary course of business; (xi) (i) taken any action with respect to, adopting, entering into,terminating or amending any severance, change in control, retirement, retention,welfare, incentive or similar agreement, arrangement or benefit plan for thebenefit or welfare of any current or former director, officer, employee orconsultant or any collective bargaining agreement, (ii) increased in any respect the compensation or fringe benefits of,or pay any bonus to, any director, officer, employee or consultant, (iii) amended or accelerated the payment, right to payment or vestingof any compensation or benefits, including any outstanding options or restrictedstock awards, (iv) granted any awards under any bonus, incentive, performance orother compensation plan or arrangement or benefit plan, including the grant ofstock options, stock appreciation rights, stock based or stock related awards,performance units or restricted stock, or the removal of existing restrictionsin any benefit plans or agreements or awards made there under; (xii) made any amendment to its memorandum or articles of association orother incorporation documents; (xiii) made or agreed or consented to: (A) any significant change to: (I) the terms of the trust deeds constituting the pension scheme(s)established for its directors, employees or their dependants; or (II) the benefits which accrue or to the pensions which are payablethere under; or (III) the basis on which qualification for, or accrual or entitlementto such benefits or pensions are calculated or determined; or (IV) the basis upon which the liabilities (including pensions) or suchpension schemes are funded or made; or (B) any change to the trustees including the appointment of a trust corporationin respect of any pension scheme(s) established for its directors, employees ortheir dependents; (xiv) entered into any contract, transaction or arrangement which is ormay be restrictive on the business of any member of the Wider Careforce Group orthe Wider Mears Group to an extent which is material in the context respectivelyof the relevant member of the Wider Careforce Group or the Wider Mears Group; (xv) entered into any material contract, commitment or agreement withrespect to any of the transactions or events referred to in this condition (h);and (xvi) been unable or admitted that it is unable to pay its debts orhaving stopped or suspended (or threatened to stop or suspend) payment of itsdebts generally or ceased or threatened to cease carrying on all or asubstantial part of its business; (i) since 31 July 2006 being the date of Careforce's last publishedreport and accounts or save as announced publicly and in each case delivered toa Regulatory Information Service (as defined in the Listing Rules) or as fairlydisclosed in writing to Mears in connection with the Offer prior to the date ofthis announcement: (i) no litigation, arbitration, prosecution or other legalproceedings having been instituted, announced or threatened or become pending orremained outstanding by or against any member of the Wider Careforce Group or towhich any member of the Wider Careforce Group is or may become a party (whetheras plaintiff, defendant or otherwise) and which in any such case is likely toadversely affect any member of the Wider Careforce Group to an extent whichmight reasonably be expected to be material in the context of the WiderCareforce Group taken as a whole; (ii) no adverse change having occurred in the business, assets,financial or trading position, profits or prospects of any member of the WiderCareforce Group in each case to an extent which is or might reasonably beexpected to be material in the context of the Wider Careforce Group taken as awhole; (iii) no steps having been taken which are likely to result in thewithdrawal, cancellation, termination or modification of any licence held by anymember of the Wider Careforce Group which is necessary for the proper carryingon of its business and the withdrawal, cancellation, termination or modificationof which is or might reasonably be expected to be material in the context of theWider Careforce Group taken as a whole; (iv) no investigation by any Relevant Authority having beenthreatened, announced, implemented or instituted or remaining outstanding whichis or might reasonably be expected to be material in the context of the WiderCareforce Group taken as a whole; (v) no material liability (actual, contingent or otherwise) havingarisen which is or might reasonably be expected to be material in the context ofthe Wider Careforce Group taken as a whole; (vi) the Wider Careforce Group has not made or agreed to make capitalexpenditure exceeding in aggregate £50,000; (j) Save as fairly disclosed in writing to Mears in connection withthe Offer prior to the date of this announcement, Mears not having discoveredthat: (i) any business, financial or other information concerning anymember of the Careforce Group disclosed, publicly or otherwise at any time toMears, by or on behalf of any member of the Careforce Group, either contains amisrepresentation of fact or omits to state a fact necessary to make theinformation contained therein not misleading and which is material or whichmight reasonably be expected to be material in the context of the Offer; or (ii) any member of the Wider Careforce Group is subject to anyliability, actual or contingent, which is not disclosed in the annual report andaccounts of Careforce for the financial year ended 31 July 2006 or in the OfferDocument and which is or might reasonably be expected to be material in thecontext of the Wider Careforce Group taken as a whole; and (k) Save as fairly disclosed in writing to Mears in connection with theOffer prior to the date of this announcement, Mears not having discovered that: (i) any past or present member of the Wider Careforce Group has notcomplied with all applicable legislation or regulations of any jurisdiction withregard to the storage, disposal, discharge, spillage, leak or emission of anywaste or hazardous substance or any substance likely to impair the environmentor to harm human health or otherwise relating to environmental matters (whichnon compliance might give rise to any liability (whether actual or contingent)on the part of any member of the Wider Careforce Group) which would be materialor which might reasonably be expected to be material to the Wider CareforceGroup taken as a whole or that there has otherwise been any such disposal,discharge, spillage, leak or emission (whether or not the same constituted anon-compliance by any person with any such legislation or regulations andwherever the same may have taken place) which in any such case might give riseto any liability (whether actual or contingent) on the part of any member of theWider Careforce Group and which is or might reasonably be expected to bematerial in the context of the Wider Careforce Group taken as a whole; (ii) there is or is likely to be any liability (whether actual orcontingent) to make good, repair, reinstate or clean up any property now orpreviously owned, occupied or made use of by any past or present member of theWider Careforce Group or any controlled waters under any environmentallegislation, regulation, notice, circular or order of any Relevant Authority orthird party or otherwise which, in each case, is material or which mightreasonably be expected to be material in the context of the Wider CareforceGroup taken as a whole; (iii) that circumstances exist (whether as a result of the making ofthe Offer or otherwise) which might lead to any Relevant Authority institutingor any member of the Wider Careforce Group or the Wider Mears Group might berequired to institute, an environmental audit or take any other steps which inany such case might result in any actual or contingent liability to improve orinstall new plant or equipment or make good, repair, re-instate or clean up anyland or other asset now or previously owned, occupied or made use of by anymember of the Wider Careforce Group in each case which is or might reasonably beexpected to be material in the context of the Wider Careforce Group taken as awhole; (iv) the Wider Careforce Group has not complied in any materialrespect in the context of the Wider Careforce Group taken as a whole with anyapplicable law or regulation governing the conduct of its business; (v) any contract, agreement or other arrangement which is or may berestrictive on the business of any member of the Wider Careforce Group or theWider Mears Group which is or might reasonably be expected to be material in thecontext of the Wider Careforce Group or the Wider Mears Group taken as a whole; (vi) the conduct of the business of the Wider Careforce Groupinfringes the intellectual property rights of any third party to an extent whichis or might reasonably be expected to be material in the context of the WiderCareforce Group taken as a whole; (vii) circumstances exist whereby a person or class of persons mighthave any claim or claims n respect of any product or process of manufacture ormaterials used therein now or previously manufactured, sold or carried out byany past or present member of the Wider Careforce Group in each case which is ormight reasonably be expected to be material in the context of the WiderCareforce Group taken as a whole. Subject to the requirements of the Panel, Mears reserves the right to waive allor any of conditions (d) to (k) (inclusive) above, in whole or in part.Conditions (b) and (c) must be fulfilled, and conditions (d) to (k) must besatisfied or waived, within 21 days after the later of the First Closing Date ofthe Offer and the date on which condition (a) is fulfilled (or in each case suchlater date as the Panel may agree) provided that Mears shall be under noobligation to waive or treat as satisfied any of conditions (b) to (k)(inclusive) by a date earlier than the latest date specified above for thesatisfaction thereof notwithstanding that the other conditions of the Offer mayat such earlier date have been waived or fulfilled and that there are at suchearlier date no circumstances indicating that any of such conditions may not becapable of fulfilment. If Mears is required by the Panel to make an offer for Careforce Shares underthe provisions of Rule 9 of the City Code, Mears may make such alterations tothe conditions as are necessary to comply with the provisions of that Rule. The Offer will lapse if it is referred to the Competition Commission or if theEuropean Commission in respect thereof either initiates proceedings underarticle 6(1)(c) of Council Regulation (EEC) 139/2004 or makes a referral to acompetent authority of the United Kingdom under article 9(1) of that Regulation,before (in any such case) the later of the First Closing Date of the Offer andthe date when the Offer becomes or is declared unconditional as to acceptances. The Cash Alternative will be conditional upon the Offer becoming or beingdeclared unconditional in all respects. This Offer will be governed by English Law and be subject to the jurisdiction ofthe English courts, to the conditions set out above and in the formal OfferDocument and related Form of Acceptance. The Offer Document, an equivalent document containing information on Mears to beapproved by the UK Listing Authority of the FSA, and enclosing the Form ofAcceptance will be despatched to Careforce Shareholders in due course. Part B: Certain further terms of the Offer The Offer will not be made, directly or indirectly, in or into, or by use of themails of, or by any means or instrumentality (including, without limitation,facsimile transmission, telex, telephone or e-mail) of interstate or foreigncommerce of, or of any facility of a national securities exchange of, the UnitedStates or Canada and the Offer will not be capable of acceptance by any suchuse, means, instrumentality or facility or from within the United States orCanada. Careforce Shares will be acquired under the Offer free from all liens, equities,charges, encumbrances and other interests and together with all rights attachingthereto on or after the date of this announcement. APPENDIX II Sources of information and bases of calculation Unless otherwise stated in this announcement: a) financial information relating to Careforce has been extracted from theaudited accounts of Careforce for the year ended 31 July 2006; b) financial information relating to Mears has been extracted from thepreliminary statement of audited results of Mears for the year ended 31 December2006 which was announced separately today; c) the value of the existing issued share capital of Careforce is basedupon 13,886,944 Careforce Shares in issue on 2 March 2007 (being the lastbusiness day prior to the date of this announcement); d) the amount of consideration payable upon full acceptance of the Offeris calculated based upon the existing issued share capital of Careforce (asdescribed in paragraph c above) multiplied by 160p, resulting in an aggregatepayment of approximately £22.2 million; and e) all prices quoted in respect of Careforce Shares or Mears Shares arethe Closing Prices on the relevant day as derived from the Daily Official List. APPENDIX III Definitions The following definitions apply throughout this announcement, unless the contextotherwise requires: "Act" or "Companies Act" the Companies Act 1985, as amended "Acquisition" the acquisition of Careforce pursuant to the Offer "Admission" admission of the Offer Shares and/or the Placing Shares (as the context requires) to trading on AIM becoming effective in accordance with the AIM Rules "AIM" the AIM market operated by the London Stock Exchange "AIM Rules" the rules of the London Stock Exchange governing the admission to and operation of AIM "Announcement" this announcement "Arbuthnot Securities" Arbuthnot Securities Limited, Careforce's nominated adviser and broker "Articles" the articles of association of Mears "Australia" the Commonwealth of Australia, its states, territories and all areas subject to its jurisdiction or any political subdivision of it "Canada" Canada, its provinces and territories and all areas subject to its jurisdiction or any political subdivision of it "Careforce" Careforce Group plc "Careforce Board" or the directors of Careforce"Careforce Directors" "Careforce Group" Careforce and its subsidiaries and/or (where the context requires) any one or more of them "Careforce Shareholders" holders of Careforce Shares "Careforce Share Option the Careforce Enterprise Management incentive SchemeSchemes" and the Unapproved Scheme "Careforce Shares" the existing unconditionally allotted or issued and fully paid ordinary shares of 10p each in the capital of Careforce and any further such shares which may be issued or unconditionally allotted and fully paid prior to the time and date on which the Offer closes or by such earlier date and time as Mears may, subject to the City Code, decide (other than any such shares held in treasury) "Cash Alternative" the alternative whereby Careforce Shareholders validly accepting the Offer may elect to receive 150p in cash for each Careforce Share, instead of the new Mears Shares to which they would otherwise be entitled under the Offer, including, where the context so requires any subsequent revision, variation, extension or renewal of such alternative "certified" or "in a share or security which is not in uncertificated formcertified form" (that is, not in CREST) "City Code" or "Code" the City Code on Takeovers and Mergers "Closing Price" the middle market quotation for the relevant share on the close of trading on the relevant date as derived from the AIM section of the Daily Official List "Close Ventures" Close Ventures Limited, a Subsidiary of Close Asset Management Holdings Limited "Daily Official List" the Daily Official List of the London Stock Exchange "EGM" or "Extraordinary the extraordinary general meeting of Mears inGeneral Meeting" connection with the Offer and the Placing (or any adjournment thereof) "Enlarged Group" the Mears Group immediately after the Offer becomes or is declared unconditional in all respects, including the Careforce Group "First Closing Date" the first closing date of the Offer "Form of Acceptance" the form of acceptance, election and authority relating to the Offer "FSA" the Financial Services Authority, acting in its capacity as competent authority in the United Kingdom pursuant to Part VI of FSMA "Investec" Investec Bank (UK) Limited, Mears' financial and nominated adviser and broker "Japan" Japan, its provinces and territories and all areas subject to its jurisdiction or any political subdivision of it "Lloyds TSB Registrars" Lloyds TSB Registrars who will be providing takeover receiving agent services in connection with the Offer "London Stock Exchange" London Stock Exchange Plc "Mears" or "the Company" Mears Group PLC "Mears Board" or the directors of Mears"Mears Directors" "Mears Dividend" the final dividend of 2.4p per Mears Share proposed to be paid by Mears in respect of the accounting year ended 31 December 2006 "Mears Group" Mears and its Subsidiaries and/or (where the context requires) any one or more of them "Mears Shareholders" or holders of Mears Shares"Shareholders" "New Zealand" the Commonwealth of New Zealand, its states, territories and all areas subject to its jurisdiction or any political subdivision of it "Offer" the recommended offer to be made by Mears to acquire the whole of the issued, and to be issued, share capital of Careforce (excluding any treasury shares) and, where the context so requires, any subsequent revision, variation, extension or renewal thereof "Offer Document" the document to be sent to Careforce Shareholders which will contain, inter alia, the terms and conditions of the Offer; "Offer Period" the period commencing on the date of this announcement and ending on the latest of: (a) the First Closing Date; (b) the date on which the Offer lapses; or (c) the date on which the Offer becomes or is declared unconditional as to acceptances "Offer Shares" up to 6,321,337 new Mears Shares to be issued by the Company pursuant to the Offer "Ordinary Shares" or "Mears ordinary shares of 1p each in the capital of Mears,Shares" with ISIN: GB0005630420 "Panel" or "Takeover Panel" The Panel of Takeovers and Mergers "participant ID" the identification code or membership number used in CREST to identify a particular CREST member or other CREST participant "Placing" the conditional placing of 7,532,900 new Mears Shares at the Placing Price "Placing Agreement" the placing agreement entered into between Mears and Investec in relation to the Placing "Placing Price" 334p per Mears Share "Placing Shares" the 7,532,9000 new Mears Shares to be issued pursuant to the Placing "Receiving Agent" Lloyds TSB Registrars in its capacity as receiving agent of the Offer "Registered Office" the registered office of the Company "Regulations" the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755) "Regulatory Information any of the services set out in Appendix 3 to theService" Listing Rules "Restricted Jurisdiction" the United States, Canada, Australia, the Republic of Ireland, New Zealand, the Republic of South Africa or Japan or any other jurisdiction where extension or acceptance of the offer would violate the law of that jurisdiction "South Africa" the Republic of South Africa, its provinces and territories and all areas subject to its jurisdiction or any political subdivision of it "Subsidiary" a subsidiary undertaking (as defined by section 258 of the Act) "Substantial Interest" a direct or indirect interest in 20 per cent. or more of the voting or equity capital (or equivalent) of an undertaking "Takeover Directive" the Takeover Directive (Interim Implementation) Regulations 2006 (SI 1183/2006) "TTE instruction" a transfer to escrow instruction (as defined by the CREST Manual issued by CRESTCo) "UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland "uncertificated" or "in recorded on the relevant register of the share oruncertificated form" security concerned as being held in uncertificated form in CREST and title to which, by virtue of the Regulations may be transferred by means of CREST "United States" the United States of America, its territories and possessions, any states of the United States and the District of Columbia "US Securities Act" the United States Securities Act 1933, as amended "VAT" value added tax "Wider Careforce Group" Careforce and the subsidiaries and subsidiary undertakings of Careforce and associated undertakings (including any joint venture, partnerships, firm or company in which any member of the Careforce Group is interested or any undertaking in which Careforce and such undertakings (aggregating their interests) have a Substantial Interest) "Wider Mears Group" Mears and the subsidiaries and subsidiary undertakings of Mears and associated undertakings (including any joint venture, partnerships, firm or company in which any member of the Mears Group is interested or any undertaking in which Mears and such undertakings (aggregating their interests) have a Substantial Interest) For the purposes of this announcement "subsidiary", "subsidiary undertaking", "associated undertaking" and "undertaking" have the meanings given to those terms by the Companies Act (but for this purpose ignoring paragraph 20(1)(b) of the Schedule 4A to the Companies Act) and "significant interest" means a direct or indirect interest in 20 per cent or more of the voting or equity share capital (or the equivalent) of the undertaking. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Mears