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Offer for Harvey Nash Group plc

7th Aug 2018 07:00

RNS Number : 9904W

DBAY Advisors Limited

07 August 2018

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

FOR IMMEDIATE RELEASE

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

7 August 2018

RECOMMENDED CASH ACQUISITION

Harvey Nash Group plc ("Harvey Nash")

The Power of Talent Ltd ("Bidco")

a newly incorporated entity indirectly owned and controlled by investment funds (the "DBAY Funds") controlled and managed by DBAY Advisors Limited ("DBAY")

intended to be effected by means of a scheme of arrangement under Part 26 of the Companies Act

Summary

· The Independent Harvey Nash Directors and the Board of Bidco are pleased to announce that they have reached agreement on the terms of a recommended cash offer pursuant to which Bidco intends to acquire the entire issued and to be issued share capital of Harvey Nash, other than those Harvey Nash Shares owned by Bidco or, otherwise, directly or indirectly owned by the DBAY Funds (the "Acquisition"). The Acquisition is intended to be effected by means of a scheme of arrangement under Part 26 of the Companies Act (the "Scheme") (or if Bidco so elects, with the consent of the Panel, by way of a Takeover Offer).

· Under the terms of the Acquisition, each Harvey Nash Shareholder will be entitled to receive 130 pence in cash for each Harvey Nash Share (the "Harvey Nash Offer Price") and one interim dividend of up to 1.75 pence for each Harvey Nash Share which may be declared prior to the Effective Date (the "Interim Dividend").

· The Harvey Nash Offer Price values the entire issued and to be issued share capital of Harvey Nash at approximately £98.7 million, representing a valuation of 9.1x EV/EBITDA for the year ended 31 January 2018, based on average net debt during such period.

· The Harvey Nash Offer Price represents a premium of approximately:

· 91.9 per cent. to the Closing Price of 67.8 pence per share on 6 March 2017, being the Business Day prior to the day on which DBAY first announced a disclosable holding in Harvey Nash;

· 35.8 per cent. to the average Closing Price of 95.8 pence per Harvey Nash Share in the twelve month period prior to the Last Practicable Date; and

· 16.6 per cent. to the Closing Price of 111.5 pence per Harvey Nash Share on the Last Practicable Date.

Recommendation

· The Independent Harvey Nash Directors, who have been so advised by Rothschild & Co as to the financial terms of the Acquisition, unanimously consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the Independent Harvey Nash Directors, Rothschild & Co has taken into account the commercial assessments of the Independent Harvey Nash Directors. Rothschild & Co is providing independent financial advice to the Independent Harvey Nash Directors for the purpose of Rule 3 of the Code.

· Accordingly, the Independent Harvey Nash Directors intend to recommend unanimously that Harvey Nash Shareholders vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the Harvey Nash General Meeting.

Irrevocable Undertakings and support for the Acquisition

· Bidco has received irrevocable undertakings from each of the Independent Harvey Nash Directors who are interested in Harvey Nash Shares to vote (or to procure the voting) in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the Harvey Nash General Meeting (or, in the event that the Acquisition is implemented by way of a Takeover Offer, to accept or procure acceptance of the Takeover Offer) in respect of a total of 1,265,578 Harvey Nash Shares, representing, in aggregate, approximately 1.72 per cent. of the share capital of Harvey Nash in issue on the Last Practicable Date and 2.33 per cent. of the Scheme Shares entitled to be voted at the Court Meeting.

· Further details of these irrevocable undertakings are set out in Appendix III to this Announcement.

Other information

· The Harvey Nash Shares to which the Acquisition relates do not include the 19,171,823 Harvey Nash Shares, in aggregate, held by the DBAY Funds, which represent approximately 26.1 per cent. of the Harvey Nash Shares in issue at the Last Practicable Date.

· Other than the Interim Dividend, if any dividend or other distribution is authorised, declared, made or paid in respect of Harvey Nash Shares on or after the date of this Announcement and prior to the Effective Date, Bidco reserves the right to reduce the Harvey Nash Offer Price by the amount of any such dividend or other distribution.

· The Acquisition will be conditional on, amongst other things, the following matters:

· the approval by a majority in number of Scheme Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Scheme Shares voted;

· the approval by Harvey Nash Shareholders of a shareholder resolution (the "Special Resolution") in connection with the implementation of the Scheme, by the requisite majority, at the Harvey Nash General Meeting;

· the sanction of the Scheme by the Court;

· the satisfaction or (where applicable) waiver of the other Conditions listed in Appendix I to this Announcement; and

· the Scheme becoming Effective by no later than the Long Stop Date.

Scheme Document

The Scheme Document will include further information about the Acquisition, together with notices of the Court Meeting and the Harvey Nash General Meeting and the expected timetable of the Scheme, and will specify the actions to be taken by Harvey Nash Shareholders. The Scheme Document will be sent to Harvey Nash Shareholders as soon as reasonably practicable and, in any event (save with the consent of the Panel), within 28 days of this Announcement and will be made available by Harvey Nash and Bidco at www.harveynash.com (subject to certain restrictions in relation to persons in Restricted Jurisdictions).

Comments on the Acquisition

Commenting on the Acquisition, Julie Baddeley, Chairman of Harvey Nash said:

"Harvey Nash's acquisition strategy and successful transformation programme has resulted in significant shareholder value being created over the past two years.

The Independent Harvey Nash Directors have considered carefully the offer from DBAY, which was the result of a period of negotiation. Whilst the Independent Harvey Nash Directors believe Harvey Nash would have a strong future as an independent listed company, they consider that the offer, which is wholly in cash, represents attractive value and is in the best interests of Harvey Nash Shareholders, staff and clients. In addition, DBAY offers stability to all Harvey Nash's stakeholders and has stated it intends to support Harvey Nash's employees and invest in the business as it moves to the next stage of its development.

Accordingly the Independent Harvey Nash Directors intend to recommend unanimously that Harvey Nash Shareholders vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the Harvey Nash General Meeting.

I would like to take this opportunity to thank all the employees at Harvey Nash for all their continued hard work and support."

Commenting on the Acquisition, David Morrison, Investment Director of DBAY said:

"DBAY is pleased to have reached agreement with the Independent Harvey Nash Directors on an attractive cash proposal for Harvey Nash shareholders. We know the Harvey Nash business well having been significant investors since February 2017 and are delighted to have the opportunity to partner with the Harvey Nash management team and employees to further strengthen its leading position in the specialist technology recruitment and outsourcing markets."

General

This summary should be read in conjunction with, and is subject to, the full text of this Announcement (including its Appendices).

The Acquisition will be subject to the Conditions and further terms set out in Appendix I to this Announcement and to the full terms and conditions which will be set out in the Scheme Document. Appendix II to this Announcement contains the sources of information and bases of calculation of certain information contained in this Announcement. Appendix III to this Announcement contains a summary of the irrevocable undertakings received in relation to the Acquisition. Appendix IV to this Announcement contains definitions of certain expressions used in this summary and in this Announcement.

Enquiries:
DBAY / Bidco	+44 (0) 16 2469 0900
Mike HaxbyDavid Morrison
Deloitte (Financial Adviser to Bidco)	+44 (0) 20 7936 3000
Chris Nicholls Craig Lukins
Harvey Nash Group plc	+44 (0) 20 7333 0033
Albert Ellis, Chief Executive Officer Mark Garratt, Chief Financial Officer
Rothschild & Co (Financial Adviser to Harvey Nash)	+44 (0) 20 7280 5000
Niall McBride Neil Thwaites Alexander Mitteregger
Panmure Gordon (Joint Financial Adviser and Corporate Broker to Harvey Nash)	+44 20 7886 2500
Ben Thorne Erik Anderson Andrew Potts
Hudson Sandler LLP (Financial PR Adviser to Harvey Nash) Michael Sandler Hattie O'Reilly	+44 (0) 20 7796 4133

Travers Smith LLP is retained as legal adviser to Harvey Nash. Addleshaw Goddard LLP is retained as legal adviser to Bidco and DBAY.

Important notices

Deloitte LLP is acting for Bidco and no-one else in connection with the Acquisition and will not be responsible to anyone other than Bidco for providing the protections offered to clients of Deloitte LLP or for providing advice in relation to the Acquisition, the contents of this Announcement or any matters referred to in this Announcement. Deloitte LLP is authorised and regulated in the United Kingdom by the Financial Conduct Authority in respect of regulated activities. Deloitte LLP can be contacted at its principal office: 1 New Street Square, London, EC4A 3HQ.

Rothschild & Co, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom is acting exclusively as financial adviser to Harvey Nash and no one else in connection with the subject matter of this Announcement and will not be responsible to anyone other than Harvey Nash for providing the protections afforded to clients of Rothschild & Co or for providing advice in connection with the subject matter of this Announcement.

Panmure Gordon, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom is acting exclusively as joint financial adviser and corporate broker to Harvey Nash and no one else in connection with the subject matter of this Announcement and will not be responsible to anyone other than Harvey Nash for providing the protections afforded to clients of Panmure Gordon or for providing advice in connection with the subject matter referred of this Announcement.

The Acquisition is intended to be implemented by way of a Scheme pursuant to the terms of the Scheme Document, which will contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the Scheme. Any decision, vote or other response in respect of the Acquisition should be made only on the basis of information contained in the Scheme Document. Harvey Nash Shareholders are advised to read the formal documentation in relation to the Acquisition carefully once it has been dispatched.

This Announcement does not constitute a prospectus or prospectus-equivalent document.

This Announcement has been prepared for the purpose of complying with English law and the Code 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 of jurisdictions outside the United Kingdom.

Overseas jurisdictions

The release, publication or distribution of this Announcement in jurisdictions other than the United Kingdom and the ability of Harvey Nash Shareholders who are not resident in the United Kingdom to participate in the Acquisition may be restricted by laws and/or regulations of those jurisdictions. In particular, the ability of persons who are not resident in the United Kingdom to vote their Scheme Shares with respect to the Scheme at the Court Meeting or with respect to the Special Resolution at the Harvey Nash General Meeting, or to execute and deliver Forms of Proxy appointing another to vote at the Court Meeting and/or Harvey Nash General Meeting on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. Therefore, any persons who are subject to the laws and regulations of any jurisdiction other than the United Kingdom or Harvey Nash Shareholders who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements in their jurisdiction. Any failure to comply with the applicable requirements may constitute a violation of the laws and/or regulations of any such jurisdiction.

The Acquisition will not be made, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws of that jurisdiction and no person may vote in favour of the Acquisition by any use, means, instrumentality or form within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this Announcement and any formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in or into or from any Restricted Jurisdiction.

Further details in relation to Harvey Nash Shareholders in overseas jurisdictions will be contained in the Scheme Document.

Notice to US investors

Harvey Nash Shareholders in the United States should note that the Acquisition relates to the securities of a company organised under the laws of England and Wales and is proposed to be effected by means of a scheme of arrangement under the laws of England and Wales. This Announcement, the Scheme Document and certain other documents relating to the Acquisition have been or will be prepared in accordance with English law, the Code and UK disclosure requirements, format and style, all of which differ from those in the United States. A transaction effected by means of a scheme of arrangement is not subject to the tender offer rules or the proxy solicitation rules under the US Exchange Act. Accordingly, the Acquisition is subject to the disclosure requirements of and practices applicable in the United Kingdom to schemes of arrangement, which differ from the disclosure requirements of the United States tender offer and proxy solicitation rules.

Harvey Nash's financial statements, and all financial information that is included in this Announcement or that may be included in the Scheme Document, or any other documents relating to the Acquisition, have been or will be prepared in accordance with International Financial Reporting Standards and may not be comparable to financial statements of companies in the United States or other companies whose financial statements are prepared in accordance with US generally accepted accounting principles.

Forward Looking Statements

This Announcement contains certain statements about Bidco and Harvey Nash that are, or may be deemed to be, "forward-looking statements" which are prospective in nature. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are based on current expectations and projections about future events and are therefore subject to known and unknown risks and uncertainties which could cause actual results, performance or events to differ materially from the future results, performance or events expressed or implied by the forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects", "is expected", "is subject to", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "believes", "targets", "aims", "projects", "goal", "objective", "outlook", "risks", "seeks" or words or terms of similar substance or the negative thereof, as well as variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might", "probably" or "will" be taken, occur or be achieved. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations.

Such forward-looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward-looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this Announcement. Any forward-looking statements made in this Announcement on behalf of Bidco or Harvey Nash are made as of the date of this Announcement based on the opinions and estimates of directors of Bidco and Harvey Nash, respectively. Each of Bidco and Harvey Nash and their respective members, directors, officers, employees, advisers and any person acting on behalf of one or more of them, expressly disclaims any intention or obligation to update or revise any forward-looking or other statements contained in this Announcement, whether as a result of new information, future events or otherwise, except as required by applicable law. Neither Bidco, Harvey Nash nor their respective members, directors, officers or employees, advisers or any person acting on their behalf, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur.

No forward-looking or other statements have been reviewed by the auditors of Bidco or Harvey Nash. All subsequent oral or written forward-looking statements attributable to Bidco, Harvey Nash or to any of their respective members, directors, officers, advisers or employees or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above.

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

No profit forecasts or estimates

Nothing in this Announcement is intended or shall be deemed to be a forecast, projection or estimate of the future financial performance of Bidco or Harvey Nash for any period and no statement in this Announcement should be interpreted to mean that cash flow from operations, earnings, or earnings per share or income of those persons (where relevant) for the current or future financial years would necessarily match or exceed the historical published cash flow from operations, earnings, earnings per share or income of those persons (as appropriate).

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the Announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) of the Code applies must be made by no later than 3:30 pm (London time) on the 10th Business Day following the commencement of the offer period and, if appropriate, by no later than 3:30 pm (London time) on the 10th Business Day following the Announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8 of the Code. A Dealing Disclosure by a person to whom Rule 8.3(b) of the Code applies must be made by no later than 3:30 pm (London time) on the Business Day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will normally be deemed to be a single person for the purpose of Rule 8.3 of the Code.

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication on website and availability of hard copies

A copy of this Announcement and the display documents required to be published pursuant to Rule 26 of the Code will be made available, free of charge and subject to certain restrictions relating to persons in Restricted Jurisdictions, on Harvey Nash's website at www.harveynash.com by no later than 12 noon (London time) on the Business Day following the date of this Announcement. For the avoidance of doubt, neither the contents of such website nor the content of any website accessible from hyperlinks on such website is incorporated into, and do not form part of, this Announcement.

Any person who is required to be sent a copy of this Announcement under the Code, and who has not received a hard copy of it, may request a hard copy of this Announcement (and any information incorporated by reference in this Announcement) by submitting a request in writing to Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA or by calling the helpline on 0371 384 2809 or +44 121 415 0089 (if calling from outside the UK). Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 8:30 am and 5:30 pm, Monday to Friday excluding public holidays in England and Wales. Please note that the Equiniti helpline cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

Save as otherwise referred to above, a hard copy of this Announcement will not be sent unless requested. Any such person may also request that all future documents, announcements and information in relation to the Acquisition should be sent to them in hard copy form.

Relevant securities in issue

In accordance with Rule 2.9 of the Code, Harvey Nash confirms that, as at the Last Practicable Date, it has 73,450,393 ordinary shares of 5 pence each in issue and admitted to trading on AIM. The International Securities Identification Number for Harvey Nash Shares is GB0006573546.

Electronic communications

Please note that under Rule 2.11(c) of the Code, all addresses, electronic addresses (if any) and certain other information provided by the Harvey Nash Shareholders, persons with information rights and other relevant persons for the receipt of communications from Harvey Nash will upon request be provided to offerors (including Bidco) during the Offer Period as required under Section 4 of Appendix 4 of the Code.

General

If you are in any doubt about the contents of this Announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor or independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriate authorised independent financial adviser.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

FOR IMMEDIATE RELEASE

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

7 August 2018

RECOMMENDED CASH ACQUISITION

Harvey Nash Group plc

The Power of Talent Ltd ("Bidco")

a newly incorporated entity indirectly owned and controlled by investment funds (the "DBAY Funds") controlled and managed by DBAY Advisors Limited ("DBAY") intended to be effected by means of a scheme of arrangement under Part 26 of the Companies Act

1. Introduction

The Independent Harvey Nash Directors and the Board of Bidco are pleased to announce that they have reached agreement on the terms of a recommended cash offer pursuant to which Bidco intends to acquire the entire issued and to be issued share capital of Harvey Nash, other than those Harvey Nash Shares held by Bidco or, otherwise, directly or indirectly by the DBAY Funds (the "Acquisition"). The Acquisition is intended to be effected by means of a scheme of arrangement under Part 26 of the Companies Act.

2. The Acquisition

Under the terms of the Acquisition, which shall be subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Scheme Document, Harvey Nash Shareholders shall be entitled to receive 130 pence in cash for each Harvey Nash Share (the "Harvey Nash Offer Price") and one Interim Dividend of up to 1.75 pence for each Harvey Nash Share which may be declared prior to the Effective Date (the "Interim Dividend").

The Harvey Nash Offer Price values the entire issued and to be issued share capital of Harvey Nash at approximately £98.7 million, which represents a valuation of 9.1x EV/EBITDA for the year ended 31 January 2018, based on average net debt during such period, and represents a premium of approximately:

· 91.9 per cent. to the Closing Price of 67.8 pence per share on 6 March 2017 being the Business Day prior to the day on which DBAY first announced a disclosable holding in Harvey Nash;

· 35.8 per cent. to the average Closing Price of 95.8 pence per Harvey Nash Share in the twelve month period prior to the Last Practicable Date; and

· 16.6 per cent. to the Closing Price of 111.5 pence per Harvey Nash Share on the Last Practicable Date.

The Harvey Nash Shares to which the Acquisition relates do not include the 19,171,823 Harvey Nash Shares, in aggregate, held by the DBAY Funds, which represent approximately 26.1 per cent. of the Harvey Nash Shares in issue at the Last Practicable Date.

The Harvey Nash Shares to be acquired under the Acquisition shall be acquired fully paid and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and any other rights and interests of any nature whatsoever and together with all rights now and hereafter attaching thereto, including voting rights and the right to receive and retain in full all dividends (other than the Interim Dividend) and other distributions (if any) declared, made or paid on or after the date of this Announcement.

Other than the Interim Dividend, if any dividend or other distribution or return of value is authorised, declared, made or paid in respect of Scheme Shares on or after the date of this Announcement and prior to the Effective Date, Bidco reserves the right to reduce the Harvey Nash Offer Price by the amount of any such dividend or other distribution.

Other than the Interim Dividend, if any such dividend, distribution or return of value is paid or made after the date of this Announcement and Bidco exercises its rights described above, any reference in this Announcement to the consideration payable under the Scheme shall be deemed to be a reference to the consideration as so reduced. Any exercise by Bidco of its rights referred to in this paragraph shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the terms of the Scheme.

3. Conditions to the Acquisition

The Acquisition will be subject to the Conditions and further terms set out in Appendix I to this Announcement and which will be set out in the Scheme Document, including:

· the approval by a majority in number of Scheme Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Scheme Shares voted;

· the approval by Harvey Nash Shareholders of the Special Resolution in connection with the implementation of the Scheme, by the requisite majority at the Harvey Nash General Meeting;

· the sanction of the Scheme by the Court;

· the satisfaction or (where applicable) waiver of the other Conditions listed in Appendix I to this Announcement; and

· the Scheme becoming Effective by no later than the Long Stop Date.

4. Background to and reasons for the Acquisition

DBAY is a pan-European asset manager and investor in public and private securities.

DBAY Funds first acquired Harvey Nash Shares in February 2017 and continued to add to their Harvey Nash shareholding until May 2017. DBAY Funds are currently interested in 19,171,823 Harvey Nash Shares, representing approximately 26.1 per cent. of the Harvey Nash Shares in issue at the Last Practicable Date, and are Harvey Nash's largest shareholder. On 1 October 2017, Adrian Gunn was appointed to the Harvey Nash Board as a non-executive director, representing the DBAY Funds' shareholding.

Bidco believes that Harvey Nash represents an interesting opportunity to invest in one of the leading providers of specialist recruitment and outsourcing services in the IT and technology sector.

Bidco is looking forward to working with the Harvey Nash management team to implement its existing long term strategy, further develop opportunities for the business and grow the value of the business in the longer term.

Bidco believes that, at this point in the company's development, Harvey Nash will be better suited to a private company environment thereby eliminating the regulatory burden, constraints and costs of maintaining a public listing.

5. Background to and reasons for the Independent Harvey Nash Directors' recommendation

Founded in 1988, Harvey Nash has grown into a full service global technology recruitment and outsourcing group, which has supported many of the world's leading organisations to recruit, source and manage the highly skilled talent they need to succeed in an increasingly competitive and technology driven world.

Over the last two years, Harvey Nash has benefitted from a major transformation programme, which has increased the focus on the Harvey Nash Group's core operations through non-core disposals and exiting markets unrelated to the technology sector. In parallel, Harvey Nash has focused on offices and businesses with strong market positions and also on the efficiency of its central operations, thereby streamlining the business and improving margins.

These actions have significantly strengthened the Harvey Nash Group, enabling management to focus on a strategy to accelerate growth both organically and through acquisitions, including Sweden-based PAT Management and UK-based Crimson Limited in 2017 and Belgium-based eMenka in 2018.

Through the successful execution of the transformation programme, Harvey Nash has delivered significant value to its Shareholders. As the improved operating and financial performance has come through this has been reflected in a substantial increase in Harvey Nash's share price alongside the consistent progressive dividend policy.

The Independent Harvey Nash Directors believe Harvey Nash would continue to have a strong future as an independent listed company. However, the Independent Harvey Nash Directors also recognise that Harvey Nash's financial performance is in part dependent on the economic cycle, and whilst the Company now is better placed to react to any changes to market conditions, there remain significant political and economic uncertainties in the medium and longer-term which may impact Harvey Nash's future performance.

The Harvey Nash Offer Price, agreement on which was reached after a period of negotiation between DBAY and the Independent Harvey Nash Directors, is at a premium of 35.8 per cent. to the average Closing Price of 95.8 pence per Harvey Nash Share in the twelve month period prior to the Last Practicable Date and implies a valuation of 9.1x EV/EBITDA for the year ended 31 January 2018.

Against this backdrop, the Independent Harvey Nash Directors believe the Harvey Nash Offer Price represents attractive value for Harvey Nash Shareholders and is a compelling opportunity for them to realise the value of their holdings in cash.

The Independent Harvey Nash Directors, together with their financial adviser Rothschild & Co, have considered the Harvey Nash Offer Price and deliverability of the Acquisition. Accordingly, the Independent Harvey Nash Directors intend to recommend unanimously the Acquisition to Harvey Nash Shareholders as set out in paragraph 6 below.

6. Recommendation and undertakings by the Independent Harvey Nash Directors

The Independent Harvey Nash Directors, who have been so advised by Rothschild & Co as to the financial terms of the Acquisition, unanimously consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the Independent Harvey Nash Directors, Rothschild & Co has taken into account the commercial assessments of the Independent Harvey Nash Directors. Rothschild & Co is providing independent financial advice to the Independent Harvey Nash Directors for the purpose of Rule 3 of the Code. Adrian Gunn is appointed to the Harvey Nash Board as a non-executive director, representing the DBAY Funds' shareholding, and therefore has taken no part in the consideration of the Acquisition.

Accordingly, the Independent Harvey Nash Directors intend to recommend unanimously that Harvey Nash Shareholders vote in favour of the Scheme at the Court Meeting and approve the Special Resolution to be proposed at the Harvey Nash General Meeting, as the Independent Harvey Nash Directors who are interested in Harvey Nash Shares have irrevocably undertaken to do (or procure to be done) in respect of their own holdings (and those of their family members) of 1,265,578 Harvey Nash Shares, representing, in aggregate, approximately 1.72 per cent. of the share capital of Harvey Nash in issue on the Last Practicable Date and 2.33 per cent. of the Scheme Shares entitled to vote at the Court Meeting.

Further details of these irrevocable undertakings are set out in Appendix III to this Announcement.

7. Information on Bidco and DBAY

Bidco is a company limited by shares, incorporated on 13 July 2018 under the laws of England and Wales, for the purpose of implementing the Acquisition. Bidco has not traded since the date of its incorporation and has not entered into any obligations, other than in connection with the Acquisition and the financing of the Acquisition. Bidco is indirectly owned and controlled by the DBAY Funds.

DBAY is a regulated investment manager licensed to conduct investment business by the Isle of Man Financial Services Authority. It was founded in 2011 and manages a range of funds and co-investment vehicles for endowments, foundations and other institutional investors.

DBAY is a value investor that aims to support companies in which it makes long term investments to develop clear growth opportunities with a particular emphasis on creating long term value by working alongside management teams.

8. Information on Harvey Nash

Harvey Nash Group plc (LSE: HVN) provides professional recruitment and offshore solutions for the technology and digital sector. Headquartered in the UK with offices in the USA, Europe and Asia Pacific, Harvey Nash's core services comprise Leadership Services, Technology Recruitment and IT Outsourcing.

Leadership Services

Harvey Nash helps its clients build modern, diverse board and leadership teams through its executive recruitment and assessment services.

· Executive search: Placing senior leaders into board and executive management roles.

· Interim management: Providing executives on short-term assignments.

· Leadership consulting: Board and leadership assessment and development services.

Technology Recruitment

Harvey Nash places specialist technology and digital professionals on a temporary, permanent or fixed-term basis.

· Permanent recruitment: Placing digital and technology experts on a permanent basis.

· Contract recruitment: Placing highly skilled technology experts on a shorter-term basis.

· Recruitment solutions: Running large-scale recruitment activities on behalf of clients.

IT Outsourcing

Harvey Nash provides business process outsourcing, application development, third party software maintenance and outsourced software services to clients across the world.

Current trading and prospects

As stated in the preliminary results announcement on 27 April 2018 as well as the trading update on 6 June 2018, Harvey Nash was encouraged by the strong trading momentum in the second half of the year to 31 January 2018 which has continued in the year to date. With the additional contribution from the annualised effect of the acquired businesses and of the transformation programme, Harvey Nash continues to be confident of making significant progress in FY2019.

9. Management, employees and locations of business

Bidco recognises the quality of the Harvey Nash Group's employees and management team and their importance to the future success of Harvey Nash and in delivering the strategic benefits that the Acquisition is expected to deliver. Bidco believes that following completion of the Acquisition, in a private company setting and with access to the support and other resources of DBAY, management will be better able to fully focus on optimising Harvey Nash's long term value, whilst maintaining the culture and values of the Harvey Nash business, which have played an integral role in Harvey Nash's success to date.

Bidco intends to support the Harvey Nash management team and to help develop and execute management's current long term strategy for Harvey Nash, including the continuation of the successful transformation programme as described in the annual report and accounts for Harvey Nash for the financial year ended 31 January 2018. With regard to its plans for the continued employment of the Harvey Nash employees, there is no intention to make changes other than those already planned and currently being executed within the Harvey Nash Group's transformation programme and any other restructuring in the ordinary course of operating the business. There is no intention to make any material change in the conditions of employment of Harvey Nash Group's employees or in the balance of skills and functions of Harvey Nash Group's employees and management. Bidco intends to ensure that the existing employment rights, including any pension rights, benefits and in particular, current incentives in place for the current financial year to 31 January 2019 of the employees and management of Harvey Nash will be fully safeguarded. Bidco does not intend to make any material changes to any employee compensation packages, including with respect to the current levels of pension contributions for existing members of, or admission of new members to, Harvey Nash's defined contribution pension plan as a consequence of the Acquisition. However, Bidco may review the bonus arrangements of senior management for subsequent financial years after 31 January 2019 to ensure that they remain appropriate for Harvey Nash as a private company following completion of the Acquisition.

Following completion of the Acquisition, in conjunction with the executive management's normal strategic planning and budgeting activities, Bidco intends to undertake a thorough review of the Harvey Nash Group and the markets in which it operates. It is possible that this review may lead to the identification of additional strategic opportunities for Harvey Nash, and Bidco will evaluate such opportunities with management, if and when they are identified, with a view to enhancing Harvey Nash's performance and accelerating its growth. In particular, Bidco intends to invest in Harvey Nash both organically and potentially via acquisitions to further improve the product offering and hence growth and market positions. The acquisition strategy would seek to continue Harvey Nash's strategy of "bolt-on" acquisitions.

Bidco has no intention of changing the locations of Harvey Nash's places of business, including the location of Harvey Nash's headquarters and headquarters functions or of redeploying any material fixed assets of Harvey Nash as a consequence of the Acquisition.

Following completion of the Acquisition, Bidco expects to put in place long-term incentivisation arrangements for the benefit of the management and certain other employees of the Harvey Nash Group, but no discussions have taken place to date between Bidco and Harvey Nash or its employees in relation to the terms of those arrangements. Further information regarding the Harvey Nash Share Schemes and the proposed treatment of interests under those schemes is set out in paragraph 13 of this Announcement.

It is intended that each of the independent non-executive directors of Harvey Nash will resign from the Harvey Nash Board, conditional upon and with effect from the Effective Date (or, in the event that the Acquisition is implemented by way of a Takeover Offer, upon or shortly following the Takeover Offer becoming or being declared wholly unconditional).

Response from the Independent Harvey Nash Directors

The Independent Harvey Nash Directors welcome Bidco's intention as described above to support the existing strategy of the Harvey Nash management team, including the successful transformation programme, and to continue investing in developing the Harvey Nash Group. The Independent Harvey Nash Directors also welcome Bidco's intention not to make any changes to the Harvey Nash employees' conditions of employment, the locations of Harvey Nash Group's existing and future places of business or Harvey Nash Group's fixed assets.

10. Financing arrangements

Deloitte, in its capacity as financial adviser to Bidco, is satisfied that sufficient resources are available to Bidco to satisfy, in full, the cash consideration payable to Harvey Nash Shareholders under the terms of the Acquisition.

The cash consideration payable for the Acquisition will be funded through equity and intra-group debt financing provided by the DBAY Funds.

11. Structure of the Acquisition and the Scheme Document

Scheme

It is intended that the Acquisition will be effected by a Court-sanctioned scheme of arrangement between Harvey Nash and the Scheme Shareholders under Part 26 of the Companies Act. The intention of the Scheme is to enable Bidco to become the owner of the whole of the issued and to be issued share capital of Harvey Nash.

Under the Scheme, the Scheme Shares will be transferred to Bidco and in consideration the Scheme Shareholders will receive the consideration on the basis set out in paragraph 2 of this Announcement. The Scheme will be subject to the Conditions and further terms and conditions referred to in Appendix I to this Announcement and to be set out in the Scheme Document. The Acquisition will lapse if the Scheme does not become Effective by the Long Stop Date.

Approval by the Court Meeting and the Harvey Nash General Meeting

In order to become Effective, the Scheme requires:

(a) the approval of a majority in number of the Scheme Shareholders who vote, representing not less than 75 per cent. in value of the Scheme Shares voted, either in person or by proxy, at the Court Meeting. At the Court Meeting, voting will be by poll and not on a show of hands and, subject to the below, all Scheme Shareholders, appearing on Harvey Nash's register of members at the Voting Record Time, will be entitled to vote at the Court Meeting and to cast one vote for each Scheme Share held;

(b) the approval of not less than 75 per cent. of the votes cast, either in person or by proxy, of the Special Resolution to be proposed at the Harvey Nash General Meeting (to be held directly after the Court Meeting) necessary in order to implement the Scheme, including to approve amendments to Harvey Nash's articles of association to ensure that any Harvey Nash Shares issued after the approval of the Scheme at the Court Meeting and the Scheme Record Time will be (i) subject to the Scheme and (ii) automatically acquired by Bidco (or its nominee(s)) on the same terms as under the Scheme. This will avoid any person (other than Bidco, its nominee(s) or the DBAY Funds) being left with Harvey Nash Shares after the Effective Date. At the Harvey Nash General Meeting, all Harvey Nash Shareholders, appearing on Harvey Nash's register of members at the Voting Record Time, will be entitled to vote at the Harvey Nash General Meeting and to cast one vote for each Harvey Nash Share held; and

(c) all of the other Conditions to the Acquisition, as set out in Appendix I to this Announcement, to be satisfied or (where applicable) waived.

Application to the Court to sanction the Scheme

Once the necessary approvals have been obtained at the Harvey Nash Meetings, and the other Conditions have been satisfied or (where applicable) waived, in order for the Scheme to be capable of becoming Effective, it must be sanctioned by the Court at the Scheme Court Hearing.

The Scheme will only become Effective, however, in accordance with its terms, on delivery of the Scheme Court Order to the Registrar of Companies.

Lapsing of the Acquisition

The Acquisition will lapse if, amongst other things:

(a) the approval of the requisite majorities of Scheme Shareholders at the Court Meeting is not obtained on or before the 22nd day after the expected date of the Court Meeting to be set out in the Scheme Document (or such later date, if any, as Bidco and Harvey Nash may agree and the Court may allow, subject to the Code and, if required, the consent of the Panel); or

(b) the approval of the requisite majority of Harvey Nash Shareholders to pass the Special Resolution to be proposed at the Harvey Nash General Meeting is not obtained on or before the 22nd day after the expected date of the Court Meeting to be set out in the Scheme Document (or such later date, if any, as Bidco and Harvey Nash may agree and the Court may allow, subject to the Code and, if required, the consent of the Panel);

(c) the sanction of the Scheme by the Court (without modification or with modification on terms acceptable to Bidco and Harvey Nash) and the delivery of an office copy of the Scheme Court Order to the Registrar of Companies is not procured before the 22nd day after the expected date of the Court Hearing to be set out in the Scheme Document (or such later date, if any, as Bidco and Harvey Nash may agree and the Court may allow, subject to the Code and, if required, the consent of the Panel); or

(d) the Scheme has not become Effective by no later than the Long Stop Date (or such later date, of any, as Bidco and Harvey Nash may agree and the Court may allow, subject to the Code and, if required, the consent of the Panel).

Scheme becoming Effective

Subject to the satisfaction or (where applicable) waiver of the Conditions, the Scheme is expected to become Effective by the end of October 2018.

Upon the Scheme becoming Effective, it will be binding on all Scheme Shareholders, irrespective of whether or not they attended or voted at the Court Meeting or Harvey Nash General Meeting, or whether they voted in favour of or against the Scheme.

The Harvey Nash Offer Price will be despatched by Bidco to Scheme Shareholders no later than 14 days after the Effective Date. Share certificates in respect of Harvey Nash Shares will cease to be valid and entitlements to Harvey Nash Shares held within the CREST system will be cancelled.

Scheme Document

The Scheme Document will include full details of the Scheme, together with notices of the Court Meeting and the Harvey Nash General Meeting and the expected timetable for the Scheme, and will specify the action to be taken by Harvey Nash Shareholders.

It is expected that the Scheme Document, together with the Forms of Proxy, will be despatched to Harvey Nash Shareholders and, for information only, to participants in the Harvey Nash Share Schemes as soon as possible and, in any event, (save with the consent of the Panel) within 28 days of the date of this Announcement, unless Bidco and Harvey Nash otherwise agree, and the Panel consents, to a later date.

General

The Scheme will be governed by the laws of England and Wales. The Scheme will be also subject to the applicable requirements of the Code, the Panel, the London Stock Exchange and the Financial Conduct Authority.

12. Interests of DBAY in Harvey Nash Shares

Bidco will shortly make a public Opening Position Disclosure setting out details required to be disclosed by it under Rule 8.1(a) of the Code.

As at the Last Practicable Date, DBAY Funds held 19,171,823 Harvey Nash Shares, representing 26.1 per cent of the issued Harvey Nash Shares.

Save in respect of the above interests, and save in respect of the irrevocable undertakings referred to at paragraph 6 above, as at the Last Practicable Date neither Bidco, nor DBAY, nor any of their respective directors, nor, so far as Bidco is aware, any person acting in concert (within the meaning of the Code) with Bidco or DBAY had (i) any interest or right to subscribe for Harvey Nash Shares; nor (ii) any short positions in respect of relevant Harvey Nash Shares (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell, any delivery obligation or right to require another person to purchase or take delivery; nor (iii) borrowed or lent any Harvey Nash Shares (including, for these purposes, any financial collateral arrangements of the kind referred to in Note 4 on Rule 4.6 of the Code).

'Interests in securities' for these purposes arise, in summary, when a person has long economic exposure, whether absolute or conditional, to changes in the price of securities (and a person who only has a short position in securities is not treated as interested in those securities). In particular, a person will be treated as having an 'interest' by virtue of the ownership, voting rights or control of securities, or by virtue of any agreement to purchase, option in respect of, or derivative referenced to, securities.

13. Harvey Nash Share Schemes

The Scheme will extend to any Harvey Nash Shares which are unconditionally allotted, issued or transferred to satisfy the vesting or exercise of awards under the Harvey Nash Share Schemes prior to the Scheme Record Time.

Participants in the Harvey Nash Share Schemes will be contacted separately regarding the effect of the Acquisition on their rights under the Harvey Nash Share Schemes and appropriate proposals will be made to such participants in due course. Further details of the terms of such proposals shall be included in the Scheme Document and separate proposal documentation. By way of summary:

· in accordance with the rules of the Harvey Nash Group plc Performance Share Plan, the Remuneration Committee of the Harvey Nash Board has determined that subsisting awards (including those referred to below) will vest and become exercisable in full, to the extent not already vested, on sanction of the Scheme by the Court. Participants will be offered the opportunity to exercise their vested awards, acquire Harvey Nash Shares and participate in the Acquisition on the same terms as other Harvey Nash Shareholders;

· in accordance with the rules of the Harvey Nash Group plc Share Bonus Plan, subsisting awards will vest and become unrestricted in full, on sanction of the Scheme by the Court. Harvey Nash Shares subject to such vested awards will be released to participants and they will be entitled to participate in the Acquisition on the same terms as other Harvey Nash Shareholders; and

· in accordance with the rules of the Harvey Nash Group plc Share Incentive Plan, participants will participate in the Acquisition on the same terms as other Harvey Nash Shareholders in respect of their plan shares.

Any unallocated Harvey Nash Shares held in the Harvey Nash Employee Benefit Trust will be used to satisfy the vesting and/or exercise of awards under the Harvey Nash Share Schemes to the maximum extent possible. Any additional Harvey Nash Shares required to satisfy the vesting and/or exercise of awards will be allotted and issued by Harvey Nash.

On or as soon as practicable following the date of this announcement, the remuneration committee of the Board of Harvey Nash will grant further awards under the Harvey Nash Group plc Performance Share Plan over a maximum of 708,355 Harvey Nash Shares, for which the consent of the Panel has been obtained in accordance with Rule 21 of the Takeover Code.

14. Acquisition related arrangements

Confidentiality agreement

On 18 April 2018, DBAY Advisors Limited (a member of the Wider Bidco Group) and Harvey Nash entered into a confidentiality agreement in relation to the Acquisition, pursuant to which DBAY undertook, subject to certain exceptions, to keep information relating to Harvey Nash confidential and to not disclose it to third parties. DBAY Advisors Limited agreed to certain non-solicit provisions in relation to employees of the Harvey Nash Group and certain standstill obligations in respect of taking any action in respect of an offer for, or requisitioning an extraordinary general meeting of, Harvey Nash.

15. Delisting and re-registration

It is intended that prior to the Scheme becoming Effective, an application will be made to the London Stock Exchange for admission of the Harvey Nash Shares to trading on AIM to be cancelled on or shortly after the Effective Date. The last day of dealings in, and for registration of transfers of, Harvey Nash Shares is expected to be at the close of business on the Business Day immediately prior to the Court Hearing and no transfers will be registered after 6.00 p.m. on that date. No dealings in Harvey Nash Shares will be registered after this date.

On the Effective Date, Harvey Nash will become a wholly-owned subsidiary of Bidco and share certificates in respect of the Harvey Nash Shares will cease to be valid and should be destroyed. In addition, entitlements to Harvey Nash Shares held within the CREST system will be cancelled on the Effective Date.

It is also intended that shortly after the Effective Date, Harvey Nash will be re-registered as a private limited company under the relevant provisions of the Companies Act.

16. Documents on display

· The following documents will, in accordance with Rule 26.2 of the Code, be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Harvey Nash's website at www.harveynash.com by no later than 12 noon on the Business Day following the date of this Announcement until the end of the Offer Period:

· this Announcement;

· the irrevocable undertakings described in paragraph 6 above; and

· the confidentiality agreement described in paragraph 14 above.

17. General

This Announcement does not constitute an offer or an invitation to purchase or subscribe for any securities.

The Scheme will be subject to the Conditions and certain further terms set out in Appendix I to this Announcement and to the full terms and conditions to be set out in the Scheme Document. Appendix II to this Announcement contains the sources of information and bases of calculation of certain information contained in this Announcement. Appendix III to this Announcement contains a summary of the irrevocable undertakings received in relation to the Acquisition. Appendix IV to this Announcement contains the definitions of certain expressions used in this Announcement.

Bidco reserves the right, subject to the prior consent of the Panel, to implement the Acquisition by way of a Takeover Offer for the entire issued and to be issued share capital of Harvey Nash as an alternative to the Scheme. In such an event, a Takeover Offer will be implemented on the same terms (subject to appropriate amendments, including, if the Panel so agrees, an acceptance condition set at up to 90 per cent. of the shares to which such offer relates or such lesser percentage as Bidco may decide with the consent of the Panel provided that it if became or was declared unconditional in all respects, the Takeover Offer would result in Bidco holding Harvey Nash Shares carrying greater than 50 per cent. of the voting rights in Harvey Nash) so far as applicable, as those which would apply to the Scheme.

If such Takeover Offer becomes or is declared unconditional in all respects, where:

· acceptances are received from Harvey Nash Shareholders such that, together with any other Harvey Nash Shares unconditionally acquired, owned or controlled by DBAY, the DBAY Funds or Bidco, DBAY, the DBAY Funds and/or Bidco will hold at least 75 per cent. of the voting rights attaching to the Harvey Nash Shares, Bidco intends to request that the then appointed Harvey Nash Board (subject to its fiduciary duties) will apply to the London Stock Exchange for admission of the Harvey Nash Shares to trading on AIM to be cancelled on or shortly after the Effective Date, which cancellation would eliminate the liquidity of Harvey Nash Shares for any remaining Harvey Nash Shareholders; and

· Bidco receives acceptances under the Takeover Offer in respect of, or otherwise acquires, 90 per cent. or more of the Harvey Nash Shares to which the Takeover Offer relates by nominal value and voting rights attaching to such shares, Bidco intends to exercise its rights pursuant to sections 974 to 991 of the Companies Act to acquire compulsorily the remaining Harvey Nash Shares in respect of which the Takeover Offer has not been accepted on the same terms as the Takeover Offer.

The availability of any such Takeover Offer to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Such persons should inform themselves about and observe any applicable requirements.

18. Consents

Deloitte has given and has not withdrawn its written consent to the issue of this Announcement with the inclusion therein of the references to its name in the form and context in which it appears.

Rothschild & Co has given and has not withdrawn its written consent to the issue of this Announcement with the inclusion therein of the references to its name in the form and context in which it appears.

Panmure Gordon has given and has not withdrawn its written consent to the issue of this Announcement with the inclusion therein of the references to its name in the form and context in which it appears.

Enquiries:
DBAY / Bidco	+44 (0) 16 2469 0900
Mike HaxbyDavid Morrison
Deloitte (Financial Adviser to Bidco)	+44 (0) 20 7936 3000
Chris Nicholls Craig Lukins
Harvey Nash Group plc	+44 (0) 20 7333 0033
Albert Ellis, Chief Executive Officer Mark Garratt, Chief Financial Officer
Rothschild & Co (Financial Adviser to Harvey Nash)	+44 (0) 20 7280 5000
Niall McBride Neil Thwaites Alexander Mitteregger
Panmure Gordon (Joint Financial Adviser and Corporate Broker to Harvey Nash)	+44 (0) 20 7886 2500
Ben Thorne Erik Anderson Andrew Potts
Hudson Sandler LLP (Financial PR Adviser to Harvey Nash) Michael Sandler Hattie O'Reilly	+44 (0) 20 7796 4133

Further Information

This Announcement is for information purposes only and is not intended to, and does not, constitute or form part of any offer, invitation, inducement or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of or exercise rights in respect of any securities, or the solicitation of any vote or approval of an offer to buy securities in any jurisdiction, pursuant to the Acquisition or otherwise nor shall there be any sale, issuance or transfer of any securities pursuant to the Acquisition in any jurisdiction in contravention of any applicable laws. The Acquisition is intended to be implemented by way of a Scheme pursuant to the terms of the Scheme Document, which will contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the Scheme. Any decision, vote or other response in respect of the Acquisition should be made only on the basis of information contained in the Scheme Document. Harvey Nash Shareholders are advised to read the formal documentation in relation to the Acquisition carefully once it has been dispatched.

This Announcement does not constitute a prospectus or prospectus-equivalent document.

This Announcement has been prepared for the purpose of complying with English law, the Code and the Listing Rules of the Financial Conduct Authority 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 of jurisdictions outside the United Kingdom.

Overseas jurisdictions

Further details in relation to Harvey Nash Shareholders in overseas jurisdictions will be contained in the Scheme Document.

Notice to US investors

Forward Looking Statements

This Announcement contains certain statements in relation to Bidco and Harvey Nash that are, or may be deemed to be, "forward-looking statements" which are prospective in nature. All statements other than statements of historical fact, are or may be deemed to be, forward-looking statements. Forward-looking statements are based on current expectations and projections about future events and are therefore subject to known and unknown risks and uncertainties which could cause actual results, performance or events to differ materially from the future results, performance or events expressed or implied by the forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects", "is expected", "is subject to", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "believes", "targets", "aims", "projects", "goal", "objective", "outlook", "risks", "seeks" or words or terms of similar substance or the negative thereof, as well as variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might", "probably" or "will" be taken, occur or be achieved. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations.

Such forward-looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward-looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this Announcement. Any forward-looking statements made in this Announcement on behalf of Bidco or Harvey Nash are made as of the date of this Announcement based on the opinions and estimates of directors of Bidco and Harvey Nash, respectively. Each of the Bidco and Harvey Nash and their respective members, directors, officers, employees, advisers and any person acting on behalf of one or more of them, expressly disclaims any intention or obligation to update or revise any forward-looking or other statements contained in this Announcement, whether as a result of new information, future events or otherwise, except as required by applicable law. Neither Bidco and Harvey Nash nor their respective members, directors, officers or employees, advisers or any person acting on their behalf, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur.

No forward-looking or other statements have been reviewed by the auditors of Bidco or Harvey Nash. All subsequent oral or written forward-looking statements attributable to Bidco, Harvey Nash or their respective members, directors, officers, advisers or employees or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above.

Rounding

No profit forecasts or estimates

Disclosure requirements of the Code

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of the Code). Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication on website and availability of hard copies

A copy of this Announcement and the display documents required to be published pursuant to Rule 26 of the Code will be made available, free of charge and subject to certain restrictions relating to persons in Restricted Jurisdictions, on Harvey Nash's website at www.harveynash.com by no later than 12 noon (London time) on the Business Day following the date of this Announcement. For the avoidance of doubt, neither the contents of such website nor the content of any website accessible from hyperlinks on such websites is incorporated into, and do not form part of, this Announcement.

Any person who is required to be sent a copy of this Announcement under the Code, and who has not received a hard copy of it, may request a hard copy of this Announcement (and any information incorporated by reference in this Announcement) by submitting a request in writing to Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA or by calling the helpline on 0371 384 2809 or +44 121 415 0089 (if calling from outside the UK). Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The Equiniti helpline is open between 8:30 am and 5:30 pm, Monday to Friday excluding public holidays in England and Wales. Please note that Equiniti helpline cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

Relevant securities in issue

Electronic communications

General

Appendix IConditions and Further Terms of the Acquisition and the Scheme

Part A: Conditions of the Acquisition

The Acquisition is conditional upon the Scheme becoming unconditional and becoming Effective by no later than the Long Stop Date or such later date, if any, as Bidco and Harvey Nash may agree (subject to the Code and, if required, the consent of the Panel) and the Court may allow.

1. The Scheme shall be conditional on the following Conditions:

Scheme Approval

(a) the approval of the Scheme at the Court Meeting (or at any adjournment of any such meeting) by a majority in number representing 75 per cent. or more in value of the Scheme Shareholders (or the relevant class or classes thereof, if applicable) present and voting, either in person or by proxy and such Court Meeting being held on or before the 22nd day after the expected date of the Court Meeting to be set out in the Scheme Document (or such later date, if any, as Bidco and Harvey Nash may agree and the Court may allow, subject to the Code and, if required, the consent of the Panel);

(b) the Special Resolution required to approve and implement the Scheme as set out in the notice of the Harvey Nash General Meeting (including, without limitation, to amend Harvey Nash's articles of association) being duly passed by the requisite majority required to pass such resolution at the Harvey Nash General Meeting or at any adjournment of that meeting to be held on or before the 22nd day after the expected date of the General Meeting to be set out in the Scheme Document (or such later date, if any, as Bidco and Harvey Nash may agree and the Court may allow, subject to the Code and, if required, the consent of the Panel);

(c) the sanction of the Scheme by the Court (without modification or with modification on terms acceptable to Bidco and Harvey Nash) and the hearing to sanction the Scheme being held on or before the 22nd day after the expected date of the Court Hearing to be set out in the Scheme Document (or such later date, if any, as Bidco and Harvey Nash may agree and the Court may allow, subject to the Code and, if required, the consent of the Panel); and

(d) the delivery of an office copy of the Scheme Court Order to the Registrar of Companies.

2. In addition, subject as stated in Part B below and to the requirements of the Code, the Acquisition will be conditional upon the following Conditions and, accordingly, the Scheme Court Order will not be delivered to the Registrar of Companies unless such Conditions have been satisfied or, where relevant, waived:

Other third party clearances

(a) no government or governmental, quasi-governmental, supranational, statutory, administrative or regulatory body or association, institution or agency (including any trade agency) or any court tribunal in any jurisdiction (each a "Relevant Authority") having taken or instituted or given written notice of any action, proceeding, suit, investigation, enquiry or reference (and, in each case, not having withdrawn the same) or enacted, made or proposed and there not continuing to be outstanding any statute, regulation, order or decision that would or would reasonably be expected to:

(i) make the Acquisition or other acquisition of Harvey Nash Shares, or control or management of Harvey Nash by Bidco or any member of Wider Bidco Group void, unenforceable or illegal in any relevant jurisdiction or directly or indirectly prohibit or otherwise materially restrict, materially delay or materially interfere with the implementation of, or impose material additional conditions or obligations with respect to, or otherwise materially challenge or require amendment to the terms of, the Scheme or the Acquisition or other acquisition of any Harvey Nash Shares, or control or management of Harvey Nash by Bidco or any member of the Wider Bidco Group;

(ii) require, prevent or materially delay the divestiture (or alter the terms of any proposed divestiture) by the Wider Bidco Group or the Wider Harvey Nash Group of all or any material part of their respective businesses, assets or properties or impose any material limitation on their ability to conduct all or any part of their respective businesses and to own, control or manage any of their respective assets or properties;

(iii) impose any limitation on, or result in any material delay in, the ability of any member of the Wider Bidco Group to acquire or hold or to exercise effectively, directly or indirectly, all or any rights of ownership of shares or other securities (or the equivalent) in, or to exercise management control over, any member of the Wider Harvey Nash Group or on the ability of any member of the Wider Harvey Nash Group to hold or to exercise effectively, directly or indirectly, all or any rights of ownership of shares or other securities (or the equivalent) in, or to exercise management control over, any other member of the Wider Harvey Nash Group to an extent which is material in the context of the Wider Harvey Nash Group taken as a whole or the Wider Bidco Group taken as a whole or material in the context of the Acquisition (as the case may be);

(iv) except pursuant to Chapter 3 of Part 28 of the Companies Act, require any member of the Wider Bidco Group or of the Wider Harvey Nash Group to acquire or offer to acquire any shares or other securities (or the equivalent) or interest in any member of the Wider Harvey Nash Group or any member of the Wider Bidco Group owned by a third party (other than in the implementation of the Acquisition);

(v) other than in the implementation of the Acquisition, require the divestiture by any member of the Wider Bidco Group of any shares, securities or other interests in any member of the Wider Harvey Nash Group;

(vi) impose any material limitation on, or result in any material delay in, the ability of any member of the Wider Bidco Group or the Wider Harvey Nash Group to integrate or co-ordinate its business, or any part of it, with the businesses or any part of the businesses of any other member of the Wider Bidco Group and/or the Wider Harvey Nash Group;

(vii) result in any member of the Wider Harvey Nash Group ceasing to be able to carry on business under any name under which it presently does so, to an extent which is material in the context of the Wider Harvey Nash Group taken as a whole or the Wider Bidco Group taken as a whole or material in the context of the Acquisition (as the case may be);

(viii) otherwise materially and adversely affect the business, assets, financial or trading position or profits of any member of the Wider Harvey Nash Group,

and all applicable waiting and other time periods (including extensions thereof) during which any such Relevant Authority could decide to take, institute or threaten any such action, proceeding, suit, investigation, enquiry or reference having expired, lapsed or been terminated; provided that, for the avoidance of doubt, this paragraph 2.(a) shall not apply to any action taken by a Relevant Authority in relation to a contract or arrangement with a member of the Wider Harvey Nash Group entered into in the ordinary course of its business;

(b) other than in relation to the approvals referred to in paragraph 2(a) above, all material filings, applications and/or notifications which are necessary under applicable legislation or regulation of any relevant jurisdiction having been made and all relevant waiting periods and other time periods (including any extensions thereof) under any applicable legislation or regulation of any relevant jurisdiction having expired, lapsed or been terminated and all applicable statutory or regulatory obligations in any jurisdiction having been complied with in each case in respect of the Scheme and the Acquisition or, except pursuant to Chapter 3 of Part 28 of the Companies Act, other acquisition of any shares or other securities in, or control or management of, Harvey Nash or any member of the Wider Harvey Nash Group by any member of the Wider Bidco Group or (except as Disclosed) the carrying on by any member of the Wider Harvey Nash Group of its business;

(c) other than in relation to the approvals referred to in paragraph 2(a) above, all Authorisations which are necessary in any jurisdiction for or in respect of the Acquisition and other acquisition of any Harvey Nash Shares, or control of Harvey Nash, by Bidco or any member of the Wider Bidco Group being obtained on terms and in a form reasonably satisfactory to Bidco from appropriate Relevant Authorities, or (except as Disclosed) from any persons or bodies with whom any member of the Wider Bidco Group or the Wider Harvey Nash Group has entered into contractual arrangements or material business relationships, and such Authorisations, together with all other Authorisations necessary for any member of the Wider Harvey Nash Group to carry on its business (except as Disclosed) (where the absence of any such Authorisations would be material and adverse in the context of the Acquisition) remaining in full force and effect and no written notice of any intention to revoke, suspend, restrict or modify or not to renew any of the same having been given.

Confirmation of absence of adverse circumstances

(d) except as Disclosed, there being no provision of any agreement, arrangement, licence or other instrument to which any member of the Wider Harvey Nash Group is a party or by or to which any such member or any of its assets is or may be bound or subject which, as a result of the implementation of the Acquisition or other acquisition by Bidco or any member of the Wider Bidco Group of any Harvey Nash Shares, or change in the control or management of Harvey Nash or otherwise, would or would reasonably be expected to result in (in each case to an extent which is material in the context of the Wider Harvey Nash Group taken as a whole):

(i) any monies borrowed by or any other indebtedness (actual or contingent) of, or any grant available to, any such member of the Wider Harvey Nash Group becoming repayable, or capable of being declared repayable, immediately or earlier than the stated repayment date or the ability of such member to borrow monies or incur any indebtedness being withdrawn or inhibited;

(ii) the creation or enforcement of any mortgage, charge or other security interest over the whole or any material part of the business, property or assets of any such member of the Wider Harvey Nash Group or any such mortgage, charge or other security interest (whenever arising or having arisen) becoming enforceable;

(iii) any rights, assets or interests of any such member of the Wider Harvey Nash Group being or falling to be disposed of or ceasing to be available to any member of the Wider Harvey Nash Group or any right arising under which any such asset or interest could be required to be disposed of or could cease to be available to any member of the Wider Harvey Nash Group;

(iv) the interest or business of any such member of the Wider Harvey Nash Group in or with any other person, firm or company (or any agreements or arrangements relating to such interest or business) being terminated or adversely modified or affected;

(v) any such member of the Wider Harvey Nash Group ceasing to be able to carry on business under any name under which it presently does so;

(vi) the value of any such member of the Wider Harvey Nash Group or its financial or trading position or prospects being prejudiced or adversely affected;

(vii) any such agreement, arrangement, licence or other instrument being terminated or adversely modified or any onerous obligation arising or any adverse action being taken or arising thereunder;

(viii) the creation of any liability (actual or contingent) by any such member of the Wider Harvey Nash Group, other than trade creditors or other liabilities incurred in the ordinary course of business; or

(ix) any requirement on any member of the Wider Harvey Nash Group to acquire, subscribe, pay up or repay any shares or other securities (or the equivalent);

and no event having occurred which, under any provision of any agreement, arrangement, licence or other instrument to which any member of the Wider Harvey Nash Group is a party or by or to which any such member or any of its assets is or may be bound or subject, would or would reasonably be expected to result in any events or circumstances as are referred to in this paragraph 2.(d) (in each case to an extent which is material in the context of the Wider Harvey Nash Group taken as a whole);

No material transactions, claims or changes in the conduct of the business of the Harvey Nash Group

(e) except as Disclosed, no member of the Wider Harvey Nash Group having since 31 January 2018:

(i) issued or agreed to issue or authorised or proposed the issue of additional shares of any class, or securities convertible into, or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares or convertible or exchangeable securities or transferred or sold (or agreed to transfer or sell) any shares out of treasury (except, in each case, (a) as between Harvey Nash and its wholly owned subsidiaries or between its wholly owned subsidiaries, or (b) upon, pursuant to or in respect of the exercise of any options or vesting of any awards granted under the Harvey Nash Share Plans);

(ii) other than the Interim Dividend, recommended, declared, paid or made or resolved to recommend, declare, pay or make any bonus, dividend or other distribution, whether payable in cash or otherwise other than dividends or other distributions, whether payable in cash or otherwise, lawfully paid or made by any wholly-owned subsidiary of Harvey Nash to Harvey Nash or any of its wholly-owned subsidiaries;

(iii) (except for transactions between Harvey Nash and its wholly-owned subsidiaries, or between its wholly-owned subsidiaries or transactions in the ordinary course of business) implemented or authorised any merger or demerger acquired or disposed of or transferred, mortgaged or charged, or created any other security interest over, any asset or any right, title or interest in any asset (in each case to an extent which is material in the context of the Wider Harvey Nash Group taken as a whole);

(iv) entered into, or authorised the entry into, any joint venture, asset or profit sharing arrangement, partnership or merger of businesses or corporate entities (in each case to an extent which is material in the context of the Wider Harvey Nash Group taken as a whole);

(v) other than pursuant to the Acquisition and except for transactions between Harvey Nash and its wholly owned subsidiaries or between wholly owned subsidiaries of Harvey Nash, implemented or authorised any reconstruction, amalgamation, scheme or other transaction or arrangement with a substantially equivalent effect (in each case to an extent which is material in the context of the Wider Harvey Nash Group taken as a whole);

(vi) purchased, redeemed or repaid any of its own shares or other securities or reduced or made or authorised any other change in its share capital (except, in each case, where relevant, (a) as between Harvey Nash and wholly owned subsidiaries of Harvey Nash or between the wholly owned subsidiaries of Harvey Nash, or (b) upon, pursuant to or in respect of the exercise of any options or vesting of any awards granted under the Harvey Nash Share Plans);

(vii) made or authorised any change in its loan capital or issued or authorised the issue of any debentures or incurred or increased any indebtedness or contingent liability (except, in each case, where relevant, as between Harvey Nash and wholly owned subsidiaries of Harvey Nash or between the wholly owned subsidiaries of Harvey Nash) (in each case to an extent which is material in the context of the Wider Harvey Nash Group taken as a whole);

(viii) entered into, varied or terminated, or authorised the entry into, variation or termination of, any contract, commitment or arrangement (whether in respect of capital expenditure, real estate or otherwise) which is outside the ordinary course of business or which is of a long term, onerous or unusual nature or magnitude or which involves, or would reasonably be expected to involve, an obligation of a nature or magnitude which is materially restrictive on the business of any member of the Wider Harvey Nash Group (in each case to an extent which is material in the context of the Wider Harvey Nash Group taken as a whole);

(ix) been unable or deemed unable, or admitted in writing that it is unable, to pay its debts as they fall due or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business (in each case to an extent which is material in the context of the Wider Harvey Nash Group taken as a whole);

(x) commenced negotiations with any of its creditors or taken any step with a view to rescheduling or restructuring any of its indebtedness or entered into a composition, compromise, assignment or arrangement with any of its creditors whether by way of a voluntary arrangement, scheme of arrangement, deed of compromise or otherwise (in each case to an extent which is material in the context of the Wider Harvey Nash Group taken as a whole);

(xi) (other than in respect of a member of the Wider Harvey Nash Group which is dormant and solvent at the relevant time) taken any corporate action or had any legal proceedings started, served or threatened against it or any documents filed or faxed in court for its winding-up (voluntary or otherwise), dissolution or reorganisation (or for any analogous proceedings or steps in any jurisdiction) or for the appointment of a liquidator, provisional liquidator, receiver, administrator, administrative receiver, trustee or similar officer (or for the appointment of any analogous person in any jurisdiction) of all or any of its assets and revenues or had written notice given of the intention to appoint any of the foregoing to it (in each case to an extent which is material in the context of the Wider Harvey Nash Group taken as a whole);

(xii) except in the ordinary course of business, waived, compromised, settled, abandoned or admitted any dispute, claim or counter-claim whether made or potential and whether by or against any member of the Wider Harvey Nash Group (in each case to an extent which is material in the context of the Wider Harvey Nash Group taken as a whole);

(xiii) made any material alteration to its constitutional documents (other than the amendments to Harvey Nash's articles of association as required in connection with the Acquisition);

(xiv) entered into, or varied the terms of, or terminated or given notice of termination of, any service agreement or arrangement with any director or senior executive of any member of the Wider Harvey Nash Group;

(xv) proposed, agreed to provide, or agreed to modify the terms of, any share option scheme, incentive scheme or other benefit relating to the employment or termination of employment of any person employed by any member of the Wider Harvey Nash Group; or

(xvi) entered into any contract, commitment or arrangement or passed any resolution or made any offer (which remains open for acceptance) to effect, or proposed or announced any intention to effect, any of the transactions, matters or events referred to in this paragraph 2.(e) (otherwise than where permitted or referred to in this paragraph 2.(e));

(f) except as Disclosed, since 31 January 2018:

(i) no adverse change having occurred, and no circumstances having arisen which would reasonably be expected to result in any adverse change, in the business, assets, financial or trading position or profits of any member of the Wider Harvey Nash Group (in each case to an extent which is material in the context of the Wider Harvey Nash Group taken as a whole); and

(ii) no litigation, arbitration proceedings, prosecution or other legal proceedings in any jurisdiction having been threatened, announced, instituted or remaining outstanding by, against or in respect of any member of the Wider Harvey Nash Group or to which any member of the Wider Harvey Nash Group is a party (whether as claimant or defendant or otherwise) and no investigation by any Relevant Authority or other investigative body against or in respect of any member of the Wider Harvey Nash Group having been threatened in writing, announced, instituted or remaining outstanding by, against or in respect of any member of the Wider Harvey Nash Group (in each case to an extent which is material in the context of the Wider Harvey Nash Group taken as a whole);

(iii) no enquiry, review or investigation by, or complaint or reference to, any Third Party against or in respect of any member of the Wider Harvey Nash Group having been threatened in writing, announced or instituted or remaining outstanding by, against or in respect of any member of the Wider Harvey Nash Group, in each case to an extent which is material in the context of the Wider Harvey Nash Group taken as a whole;

(iv) no steps having been taken and no omissions having been made which would result in the withdrawal, cancellation, termination or modification of any licence held by any member of the Wider Harvey Nash Group which is necessary for the proper carrying on of its business, and the withdrawal, cancellation, termination or modification of which would have a material adverse effect on the Wider Harvey Nash Group taken as a whole; and

(v) no contingent or other liability having arisen outside the ordinary course of business which would or would reasonably be expected to adversely affect any member of the Wider Harvey Nash Group (in each case to an extent which is material in the context of the Wider Harvey Nash Group taken as a whole); and

(g) except as Disclosed, Bidco not having discovered that:

(i) any financial, business or other information concerning the Wider Harvey Nash Group publicly announced prior to the date of this Announcement at any time by any member of the Wider Harvey Nash Group is misleading, contains a misrepresentation of fact or omits to state a fact necessary to make the information contained therein not misleading (in each case to an extent which is material in the context of the Wider Harvey Nash Group taken as a whole);

(ii) there is any information which affects the import of any information publicly announced prior to the date of this Announcement by or on behalf of any member of the Wider Harvey Nash Group (in each case to an extent which is material in the context of the Wider Harvey Nash Group taken as a whole);

(iii) any member of the Wider Harvey Nash Group is subject to any liability, contingent or otherwise, other than in the ordinary course of business (in each case to an extent which is material in the context of the Wider Harvey Nash Group taken as a whole); or

(iv) there is or is likely to be any obligation or liability (whether actual or contingent) to make good, repair, re-instate or clean up any property now or previously owned, occupied, operated or made use of or controlled by any past or present member of the Wider Harvey Nash Group under any environmental legislation, regulation, notice, circular or order of any Relevant Authority in any jurisdiction (in each case to an extent which is material in the context of the Wider Harvey Nash Group taken as a whole).

Part B: Certain further terms of the Acquisition

1. To the extent permitted by law and subject to the requirements of the Panel, Bidco reserves the right in its sole discretion (subject to the requirements of the Code and the Panel) to waive (if capable of waiver), in whole or in part, the above Conditions in paragraph 2 of Part A.

2. If Bidco is required by the Panel to make an offer for Harvey Nash Shares under the provisions of Rule 9 of the Code, Bidco may make such alterations to any of the above Conditions and terms of the Acquisition as are necessary to comply with the provisions of that Rule.

3. The Scheme will not become Effective unless the Conditions have been fulfilled or (if capable of waiver) waived or, where appropriate, have been determined by Bidco and/or Harvey Nash to be or remain satisfied by no later than 11.59 p.m. on the Long Stop Date.

4. The Conditions set out in paragraphs 1.(a), 1.(b) and 2 of Part A must be fulfilled, be determined by Bidco to be fulfilled or (where capable of waiver) waived by Bidco by no later than 11.59 p.m. on the date immediately preceding the date of the Court Hearing, failing which the Scheme will lapse or, if the Acquisition is implemented by way of a Takeover Offer, no later than as permitted by the Panel.

5. Bidco shall be under no obligation to waive (if capable of waiver), to determine to be or remain satisfied or to treat as fulfilled any of the Conditions in paragraph 2 of Part A by a date earlier than the latest date for the fulfilment of that Condition notwithstanding that the other Conditions of the Acquisition may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such conditions may not be capable of fulfilment.

6. Under Rule 13.5 of the Code, Bidco may not invoke a Condition so as to cause the Acquisition not to proceed, to lapse or to be withdrawn unless the circumstances which give rise to the right to invoke the Condition are of material significance to Bidco in the context of the Acquisition. The Conditions contained in paragraph 1 of Part A are not subject to this provision of the Code.

7. The Harvey Nash Shares to be acquired under the Acquisition shall be acquired fully paid and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and any other rights and interests of any nature whatsoever and together with all rights now and hereafter attaching thereto, including voting rights and the right to receive and retain in full all dividends (other than the Interim Dividend) and other distributions (if any) declared, made or paid on or after the date of this Announcement. Accordingly, without prejudice to paragraph 2 of this Announcement, insofar as any dividend (excluding the Interim Dividend) or other distribution or return of value is authorised, declared, made or paid in respect of Scheme Shares on or after the date of this Announcement and prior to the Effective Date, Bidco reserves the right to reduce the Harvey Nash Offer Price by the amount of any such dividend or other distribution except where the Scheme Shares are or will be acquired pursuant to the Scheme on a basis which entitles Bidco to receive the dividend, distribution or return of value and to retain it.

8. The availability of the Acquisition to persons not resident in the United Kingdom may be affected by the laws of the Restricted Jurisdictions. Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements.

9. Bidco reserves the right, subject to the prior consent of the Panel, to implement the Acquisition by way of a Takeover Offer as an alternative to the Scheme. In such an event, the Acquisition will be implemented by Bidco on substantially the same terms as those which would apply to the Scheme (subject to such amendments as are appropriate for an acquisition being made by way of a Takeover Offer, including if the Panel so agrees, an acceptance condition set at up to 90 per cent. of the shares to which such Takeover Offer relates or at such lower percentage as the Panel may agree, provided that if it became or was declared unconditional in all respects, the Acquisition would result in Bidco holding Harvey Nash Shares carrying greater than 50 per cent. of the voting rights in Harvey Nash).

10. The Acquisition is governed by English law and is subject to the jurisdiction of the English courts and to the Conditions and further terms set out in this Appendix I to this Announcement and those terms which will be set out in the Scheme Document. The Acquisition shall be subject to the applicable requirements of the Code, the Panel, the London Stock Exchange and the Financial Conduct Authority.

11. Each of the Conditions shall be regarded as a separate Condition and shall not be limited by reference to any other Condition.

12. The Acquisition shall lapse, and shall no longer bind Scheme Shareholders or Bidco if:

(a) in so far as the Acquisition or any matter arising from or relating to the Acquisition constitutes a concentration with a Community dimension within the scope of the Regulation, the European Commission either initiates proceedings under Article 6(1)(c) of the Regulation or makes a referral to a competent authority in the United Kingdom under Article 9(1) of the Regulation and there is then a CMA Phase 2 Reference; or

(b) in so far as the Acquisition or any matter arising from the Acquisition does not constitute a concentration with a Community dimension within the scope of the Regulation, the Acquisition or any matter arising from or relating to the Acquisition becomes subject to a CMA Phase 2 Reference,

in each case, before the date of the Court Meeting.

Appendix IISources of information and bases of calculation

In this Announcement, unless otherwise stated, or the context otherwise requires, the bases and sources used are set out below.

1. Unless otherwise stated, financial information relating to the Harvey Nash Group has been extracted or derived (without any adjustment) from Harvey Nash Group's audited consolidated financial statements for the financial year ended on 31 January 2018, as applicable.

2. As at the Last Practicable Date, there were 73,450,393 Harvey Nash Shares in issue.

3. There are no Harvey Nash Shares held in treasury.

4. The International Securities Identification Number for the Harvey Nash Shares is GB0006573546.

5. The aggregate transaction value of the entire issued and to be issued share capital of Harvey Nash of £98.7 million has been calculated on the basis of:

(a) 73,450,393 Harvey Nash Shares in issue as at the Last Practicable Date (including, for the avoidance of doubt, 545,972 Harvey Nash Shares held by the Trustee to be transferred, before the Effective Date, in connection with the exercise of any options or vesting of any awards granted under the Harvey Nash Share Plans) multiplied by the Harvey Nash Offer Price; plus

(b) 2,434,513 Harvey Nash Shares expected to be issued pursuant to the Harvey Nash Share Schemes multiplied by the Harvey Nash Offer Price.

6. The implied valuation of 9.1x EV/EBITDA for the year ended 31 January 2018 has been calculated on the basis of:

(a) implied enterprise value ("EV") of £116.3 million, being the sum of the aggregate transaction value of the entire issued and to be issued share capital of Harvey Nash of £98.7 million (as described at paragraph 5 above) plus average net debt of £17.6 million for the year ended 31 January 2018 based on monthly management accounts as presented in financial reports used by the Harvey Nash Directors; and

(b) EBITDA of £12.8 million for the year ended 31 January 2018, calculated on the basis of Harvey Nash Group's audited consolidated financial statements for the financial year ended on 31 January 2018, being the sum of:

(i) core total operating profit before non-recurring items of £11.4 million; plus;

(ii) depreciation of property, plant and equipment of £1.3 million; plus;

(iii) amortisation of £0.1 million,

(together, "EBITDA").

7. The number of Scheme Shares entitled to be voted at the Court Meeting is 54,278,570 and has been calculated by subtracting the 19,171,823 Harvey Nash Shares held directly or indirectly by the DBAY Funds from the 73,450,393 Harvey Nash Shares in issue as at the Last Practicable Date.

8. Unless otherwise stated, all prices and closing prices for Harvey Nash Shares are closing middle market quotations derived from the Daily Official List published by the London Stock Exchange.

Appendix III

Irrevocable Undertakings

Harvey Nash Directors' Irrevocable Undertakings

The following Harvey Nash Directors (or family members of Harvey Nash Directors) have given an irrevocable undertaking to vote (or procure the voting) in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the Harvey Nash General Meeting (or in the event that the Acquisition is implemented by way of a Takeover Offer, to accept, or procure the acceptance of, the Takeover Offer) in relation to the following Harvey Nash Shares, in which they or their family members are beneficially interested:

Name	Number of Harvey Nash Shares in respect of which undertaking is given	Percentage of Harvey Nash's issued share capital at the Last Practicable Date	Percentage of Scheme Shares (i.e. those Harvey Nash Shares entitled to vote at the Court Meeting) at the Last Practicable Date
Mark Garratt	35,331	0.048%	0.065%
Simon Wassall	328,889	0.448%	0.606%
Kevin Thomas	10,000	0.014%	0.018%
Albert Ellis	221,435	0.301%	0.408%
Julie Baddeley	10,000	0.014%	0.018%
Lynn Patricia Ellis	659,923	0.898%	1.216%
Total	1,265,578	1.723%	2.332%

These irrevocable undertakings will cease to be binding if:

(a) Bidco announces that it does not intend to make or proceed with the offer and no new, revised or replacement Scheme or Takeover Offer (to which the irrevocable undertaking applies) is announced by Bidco or its affiliates contemporaneously in accordance with Rule 2.7 of the Code;

(b) the offer has lapsed or been withdrawn (for the avoidance of doubt, this shall not apply where the Scheme lapses or is withdrawn in connection with Bidco exercising its right to implement the offer by way of a Takeover Offer rather than the Scheme) and no new, revised or replacement Scheme or Takeover Offer (to which the irrevocable undertaking applies) has previously been announced by Bidco or its affiliates in accordance with Rule 2.7 of the Code, or is announced by Bidco or its affiliates contemporaneously in accordance with Rule 2.7 of the Code;

(c) the Scheme (or the Takeover Offer, if such is announced in implementation of the Acquisition, as the case may be) has not become effective (or become or been declared unconditional in all respects in accordance with the requirements of the Code, as the case may be) by the Long Stop Date (or such later time or date as Harvey Nash and Bidco agree in writing with the consent of the Panel); or

(d) if the Offer is implemented by way of a Takeover Offer, the Takeover Offer document is not posted to Harvey Nash Shareholders within the permitted period under the Code or by such later date as is agreed between Bidco and the Panel.

Appendix IV

Definitions

"Acquisition"		the proposed recommended all-cash acquisition by Bidco for the entire issued and to be issued share capital of Harvey Nash, other than any Harvey Nash Shares held by Bidco or, otherwise, directly or indirectly by the DBAY Funds, by means of the Scheme, on the terms and subject to the conditions set out in this Announcement and to be set out in the Scheme Document (or the Takeover Offer, under certain circumstances as described in this Announcement)
"AIM"		the market of that name operated by the London Stock Exchange
"Announcement"		means this Announcement made pursuant to Rule 2.7 of the Code
"Authorisations"		regulatory authorisations, orders, recognitions, grants, consents, clearances, confirmations, certificates, licences, permissions or approvals
"Bidco"		The Power of Talent Ltd, a company incorporated in England and Wales with registered number 11464274
"Board"		in relation to Bidco or Harvey Nash, the board of directors of the relevant company
"Business Day"		a day (other than Saturdays, Sundays and public or bank holidays in the UK) on which banks are generally open for business in the City of London
"Closing Price"		the middle market price for a Harvey Nash Share at the close of business on the day to which the price relates, as derived from the Daily Official List
"CMA Phase 2 Reference"		a reference of the Acquisition to the chair of the Competition and Markets Authority for the constitution of a group under Schedule 4 to the Enterprise and Regulatory Reform Act 2013
"Code"		the City Code on Takeovers and Mergers issued from time to time by the Panel
"Companies Act"		the Companies Act 2006
"Conditions"		the conditions of the Acquisition (including the Scheme) set out in Part A of Appendix I to this Announcement and to be set out in the Scheme Document
"Court"		the High Court of Justice in England and Wales
"Court Meeting"		the meeting(s) of the Scheme Shareholders to be convened by order of the Court pursuant to section 896 of the Companies Act for the purpose of considering, and if thought fit, approving the Scheme (with or without amendment) and any adjournment thereof
"CREST"		the relevant system (as defined in the Uncertificated Securities Regulations 2001 (SI 2001/3755) in respect of which Euroclear UK & Ireland Limited is the Operator (as defined in such Regulations) for the paperless settlement of trades in securities and the holding of uncertificated securities
"Daily Official List"		the daily official list of the London Stock Exchange
"DBAY"		DBAY Advisors Limited, the manager of the DBAY Funds
"DBAY Funds"		the investment funds controlled and managed by DBAY
"Deloitte"		Deloitte LLP, the financial adviser to Bidco in relation to the Acquisition
"Disclosed"		information which has been: (i) fairly disclosed by, or on behalf of, Harvey Nash to Bidco (or its advisers) in the data room established by Harvey Nash for the purposes of the Acquisition, on or before 26 July 2018; (ii) fairly disclosed by, or on behalf of, Harvey Nash to Bidco (or its advisers) in writing prior to the date of this Announcement; (iii) disclosed in the annual report and accounts for Harvey Nash for the financial year ended 31 January 2018; (iv) disclosed in any announcement to a regulatory information service by, or on behalf of, Harvey Nash, prior to the publication of this Announcement; or (v) disclosed in this Announcement;
"EBITDA"		earnings before interest, tax, depreciation and amortisation of the Harvey Nash Group as defined in (and calculated on the basis set out in) paragraph 6(b) of Appendix II to this Announcement
"Effective"		the Scheme having become effective in accordance with its terms, upon delivery of the Scheme Court Order to the Registrar of Companies
"Effective Date"		the date upon which the Scheme becomes Effective;
"EV"		implied enterprise value of the Harvey Nash Group as defined in (and calculated on the basis set out in) paragraph 6(a) of Appendix II to this Announcement
"Forms of Proxy"		the forms of proxy for use at the Court Meeting and at the Harvey Nash General Meeting which will accompany the Scheme Document
"Harvey Nash"		Harvey Nash Group plc, a company incorporated in England and Wales with registered number 03320790
"Harvey Nash Directors"		the directors of Harvey Nash at the date of this Announcement, being Julie Baddeley, Albert Ellis, Mark Garratt, Simon Wassall, Ian Davies, David Bezem, Kevin Thomas and Adrian Gunn
"Harvey Nash General Meeting"		the general meeting of Harvey Nash Shareholders (including any adjournment thereof) to be convened in connection with the Scheme, notice of which will be set out in the Scheme Document
"Harvey Nash Group"		Harvey Nash and its subsidiaries and subsidiary undertakings
"Harvey Nash Meetings"		the Court Meeting and the Harvey Nash General Meeting
"Harvey Nash Offer Price"		130 pence in cash per Harvey Nash Share
"Harvey Nash Share"		an ordinary share of 5 pence in the capital of Harvey Nash
"Harvey Nash Shareholders"		the holders of Harvey Nash Shares from time to time
"Harvey Nash Share Schemes"		(a) the Harvey Nash Group plc Performance Share Plan; (b) the Harvey Nash Group plc Share Bonus Plan; and (c) the Harvey Nash Share Incentive Plan
"Independent Harvey Nash Directors"		the Harvey Nash Directors excluding Adrian Gunn
"Interim Dividend"		an interim dividend of up to 1.75 pence which may be declared prior to the Effective Date for each Harvey Nash Share as described in paragraph 2 of this Announcement
"Last Practicable Date"		6 August 2018, being the last practicable date prior to the publication of this Announcement
"London Stock Exchange"		London Stock Exchange Group plc
"Long Stop Date"		31 December 2018, or such later date (if any) as may be agreed by Bidco and Harvey Nash (with the consent of the Panel) and the approval of the Court (if such approval is required)
"Offer Period"		in relation to Harvey Nash, has the meaning given to it in the Code, which period commenced on the date of this Announcement
"Opening Position Disclosure"		has the meaning given to it in Rule 8 of the Code
"Panel"		the Panel on Takeovers and Mergers
"Panmure Gordon"		Panmure Gordon (UK) Limited
"Registrar of Companies"		the Registrar of Companies in England and Wales
	"Regulation"		Council Regulation (EC) No 139/2004
"Relevant Authority"		has the meaning given to it in paragraph 2.(a) of Appendix I to this Announcement
"Restricted Jurisdiction"		any jurisdiction where local laws or regulations may result in a significant risk of civil, regulatory or criminal exposure if the information concerning the Acquisition is sent or made available to Harvey Nash Shareholders in that jurisdiction
"Rothschild & Co"		N M Rothschild & Sons Limited, the financial adviser to Harvey Nash in relation to the Acquisition
"Scheme"		the proposed scheme of arrangement under Part 26 of the Companies Act between Harvey Nash and the Scheme Shareholders to implement the Acquisition with or subject to any modification, addition or condition approved or imposed by the Court
"Scheme Court Hearing"		the hearing of the Court to sanction the Scheme under section 899 of the Companies Act
"Scheme Court Order"		the order of the Court sanctioning the Scheme under section 899 of the Companies Act
"Scheme Document"		the document to be despatched to (among others) Harvey Nash Shareholders including, among other things, details of the Scheme required by section 897 of the Companies Act, the full terms and conditions of the Scheme and the notices of the Harvey Nash Meetings
"Scheme Record Time"		the time and date to be specified as such in the Scheme Document or such later time and/or date as Bidco and Harvey Nash may agree
"Scheme Shareholder"		holders of Scheme Shares
"Scheme Shares"		(a) the Harvey Nash Shares in issue at the date of the Scheme Document; (b) any Harvey Nash Shares issued after the date of the Scheme Document and before the Voting Record Time; and (c) any Harvey Nash Shares issued at or after the Voting Record Time and before the Scheme Record Time in respect of which the original or any subsequent holders thereof are, or shall have agreed in writing to be, bound by the Scheme, in each case excluding any Harvey Nash Shares held by Bidco or, otherwise, directly or indirectly by the DBAY Funds
"Significant Interest"		in relation to an undertaking, a direct or indirect interest of 20 per cent. or more of (i) the total voting rights conferred by the equity share capital (as defined in section 548 of the Companies Act) of such undertaking or (ii) the relevant partnership interest
"Special Resolution"		a shareholder resolution in connection with the implementation of the Scheme to be proposed at the Harvey Nash General Meeting and voted on by Harvey Nash Shareholders
"Takeover Offer"		should the Acquisition be implemented by way of a takeover offer as defined in Chapter 3 of Part 28 of the Companies Act, the recommended offer to be made by or on behalf of Bidco to acquire the entire issued and to be issued share capital of Harvey Nash and, where the context requires, any subsequent revision, variation, extension or renewal of such offer and includes any election available thereunder
"Third Party"		each of a central bank, government or governmental, quasi-governmental, supranational, statutory, regulatory, environmental, administrative, fiscal or investigative body, court, trade agency, association, institution, environmental body, employee representative body or any other body or person whatsoever in any jurisdiction
	"Trustee"		Harvey Nash Group EBT Limited, the trustee of the Harvey Nash Group Employee Benefit Trust
"UK" or "United Kingdom"		the United Kingdom of Great Britain and Northern Ireland
"US Exchange Act"		the US Securities Exchange Act of 1934, as amended from time to time
"Voting Record Time"		the date and time specified in the Scheme Document by reference to which entitlement to vote at the Court Meeting or the Harvey Nash General Meeting will be determined, expected to be 6:30 p.m. on the day which is two days before the date of the Court Meeting or, if the Court Meeting is adjourned, 6:30 p.m. on the day which is two days before the date of such adjourned meeting
"Wider Bidco Group"		Bidco and its subsidiaries, subsidiary undertakings, associated undertakings, holding companies, and their respective subsidiaries, subsidiary undertakings, associated undertakings, holding companies and any other body corporate, partnership, joint venture or person in which Bidco and all such undertakings (aggregating their interests) have a Significant Interest or which have a Significant Interest in Bidco or any other member of the Wider Bidco Group, in each case other than any member of the Wider Harvey Nash Group
"Wider Harvey Nash Group"		Harvey Nash and its subsidiaries, subsidiary undertakings, associated undertakings and any other body corporate, partnership, joint venture or person in which Harvey Nash and all such undertakings (aggregating their interests) have a Significant Interest

For the purposes of this Announcement, "subsidiary", "subsidiary undertaking", "undertaking" and "associated undertaking" have the respective meanings given thereto by the Companies Act.

All references to "pounds", "pounds Sterling", "Sterling", "£", "pence", "penny" and "p" are to the lawful currency of the United Kingdom.

All the times and/or dates referred to in this Announcement are to those times and/or dates as determined by Greenwich Mean Time, unless otherwise stated.

References to the singular include the plural and vice versa.

All references to statutory provision or law or to any order or regulation shall be construed as a reference to that provision, law, order or regulation as extended, modified, replaced or re-enacted from time to time and all statutory instruments, regulations and order from time to time made thereunder or deriving validity therefrom.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.

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