26th Jan 2007 07:43
Warner Estate Holdings PLC26 January 2007 Not for release, publication or distribution, in whole or in part, in, into orfrom the United States or any other Restricted Jurisdiction. ANNOUNCEMENT FOR IMMEDIATE RELEASE 26 January 2007 RECOMMENDED CASH OFFER by WARNER ESTATE HOLDINGS PLC for JS REAL ESTATE PLC Summary The boards of Warner Estate and JS are pleased to announce the terms of arecommended cash offer to be made by Warner Estate to acquire the entire issuedand to be issued share capital of JS. - Under the terms of the Offer, JS Shareholders will receive 700 pence in cash for each JS Share held by them. - The Offer values the entire issued share capital of JS at approximately £114 million. - • The Offer represents: • a discount of approximately 10.3 per cent. to the LSE Closing Price of 780 pence per JS Share on 25 January 2007 (being the last Business Day prior to the date of this Announcement). • a premium of approximately 13.4 per cent. to the Closing Price of 617.5 pence per JS Share on 26 July 2006 (being the date 6 months prior to the date of this Announcement). • a premium of approximately 35.3 per cent. to the Closing Price of 517.5 pence per JS Share on 26 January 2006 (being the date 12 months prior to the date of this Announcement). - As an alternative to all or some of the cash consideration to which they would otherwise be entitled under the Offer, accepting JS Shareholders (other than US Persons and shareholders in other Restricted Jurisdictions) may elect to receive Loan Notes on the basis of £1 nominal of Loan Notes for every £1 of cash consideration. - The JS Directors, who have been so advised by Oriel Securities, unanimously consider the terms of the Offer to be fair and reasonable. In providing advice to the JS Directors, Oriel Securities has taken into account the commercial assessments of the JS Directors. - The JS Directors believe that the Offer is in the best interests of JS Shareholders as a whole and intend to recommend unanimously that JS Shareholders accept the Offer as they have irrevocably undertaken to do, or procure to be done, in respect of their own beneficial holdings. - Warner Estate has received irrevocable undertakings from the JS Directors and certain persons connected with them to accept, or procure acceptance of, the Offer in respect of, in aggregate, 2,221,706 JS Shares, representing approximately 13.64 per cent. of the issued share capital of JS. - In addition, Warner Estate has received irrevocable undertakings from certain other JS Shareholders to accept the Offer, save in certain limited circumstances, in respect of a total of 6,919,465 JS Shares, representing approximately 42.49 per cent. of the issued share capital of JS. - Warner Estate has therefore received irrevocable undertakings to accept the Offer, or procure acceptance of the Offer, in respect of 9,141,171 JS Shares in aggregate, representing approximately 56.14 per cent. of the issued share capital of JS. Commenting on the Offer, Stephen Mulliner, Chairman of JS, said: "The Offer from Warner Estate has received the unanimous recommendation of theJS Board. We believe that the Offer fully reflects the value of JS' assets and,in addition, takes account of the potential benefit that would accrue to JSShareholders in removing the inherent tax liability were it able to convert to aREIT. " The Offer is at a discount to the LSE Closing Price on 25 January 2007 of 780pence. However, it should be noted thatJS' share price has risen by 50 percent.from 520 pence at the end of our last financial year and by 28 percent.from 607.5 pence since JS' half year end only four months ago. To givefurther perspective, over the same periods, the FTSE Small Cap Real Estate Indexhas risen by approximately 10 per cent.and 7 per cent.respectively. The increaseinJS' share price has occurred on very low trading volumes and transactions atrecent levels have been for small numbers of shares. Consequently, theJSDirectors do not believe that the recent price levels represent a realisticindication of the level at which large shareholdings could be traded. Moreimportantly, based upon the Offer price, the JS team has delivered returns toshareholders of over 21 per cent. per annum over the last nine years and I wouldlike to thank them for the enterprise and commitment that they havedemonstrated. I would also like to thank the extraordinary support and loyaltythat many shareholders have shown JS both before and during its time as a publiccompany." Philip Warner, Executive Chairman of Warner Estate, said: "The acquisition of JS is in line with Warner Estate's strategy to increase thequantum of our property assets under management. Circa 40 per cent. of the JSportfolio is located in St John's Wood High Street, London NW8, which providesgood asset management opportunities. The portfolio also improves our exposure tothe South East and there are three sites with development potential. We believeour offer enables JS shareholders to realise full value for the JS propertyportfolio through our ability to take account of the Capital Gains Tax whichwill be eliminated on conversion to REIT status. At a time when opportunities toadd value are difficult to find, this acquisition will be NAV neutral oncompletion, leverages our existing resources through the reduction in JS costsand improves Warner Estate's status for REIT conversion." The above summary should be read in conjunction with the full text of thisAnnouncement and the Appendices to it and with the full terms and conditions ofthe Offer to be set out in the Offer Document and the Form of Acceptance.Appendix I sets out the conditions of and certain further terms of the Offer.Appendix II contains details of the irrevocable undertakings received by WarnerEstate. Appendix III contains source notes relating to certain informationcontained in this Announcement. Certain terms used in this Announcement aredefined in Appendix IV. Enquiries: Warner Estate Tel: +44 (0) 20 7907 5100Philip WarnerPeter CollinsMichael Stevens Bridgewell Tel: +44 (0) 20 7003 3000(Financial adviser and broker to Warner Estate)Heraclis EconomidesRashmi Sinha City Profile Tel: +44 (0) 20 448 3244(Financial public relations to Warner Estate)Simon CourtenayWilliam Attwell JSStephen Mulliner Tel: +44 (0) 7711 672 015Tony Roscoe Tel: +44 (0) 20 7408 1515 Oriel Securities Tel: +44 (0) 20 7710 7600(Financial adviser and broker to JS)Simon BraggNatalie FortescueMichael Shaw A presentation to analysts has been scheduled for 11.00 am on 26 January 2007 atthe offices of City Profile Group Limited, 7-9, Copthall Avenue, London, EC2R7NJ. This Announcement is not intended to and does not constitute or form any part ofany offer, invitation or the solicitation of an offer to purchase, subscribe foror otherwise acquire, sell or dispose of, any securities pursuant to the Offeror otherwise. The Offer will be made solely by the Offer Document and Form ofAcceptance, when issued, which will contain the full terms and conditions of theOffer, including details of how the Offer may be accepted. Bridgewell, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting exclusively for Warner Estate and no-oneelse in connection with the Offer and will not be responsible to anyone otherthan Warner Estate for providing the protections afforded to clients ofBridgewell nor for giving advice in relation to the Offer or any matter orarrangement referred to in this Announcement. Oriel Securities, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting exclusively for JS in connection withthe Offer and for no-one else in connection with the Offer and will not beresponsible to anyone other than JS for providing the protections afforded toclients of Oriel Securities nor for giving advice in relation to the Offer orany matter or arrangement referred to in this Announcement. This Announcement has been prepared in accordance with English law, the TakeoverCode and the AIM Rules and information disclosed may not be the same as thatwhich would have been prepared in accordance with the law of jurisdictionsoutside England.The Offer will be subject to the applicable rules and regulations of theFinancial Services Authority, the London Stock Exchange and the Takeover Code.The distribution of this Announcement in jurisdictions other than the UnitedKingdom and the availability of the Offer to JS Shareholders who are notresident in the United Kingdom may be affected by the laws of relevantjurisdictions. Therefore, any persons who are subject to the laws of anyjurisdiction other than the United Kingdom or JS Shareholders who are notresident in the United Kingdom will need to inform themselves about, andobserve, any applicable requirements. Unless otherwise determined by Warner Estate or required by the Takeover Codeand permitted by applicable law and regulation, the Offer is not being, and willnot be made, directly or indirectly, in or into or by use of the mails of, or byany other means or instrumentality (including, without limitation, facsimiletransmission, telex, telephone, internet or other forms of electronictransmission) of inter-state or foreign commerce of, or any facility of anational, state or other securities exchange of, the United States or any otherRestricted Jurisdiction, and will not be capable of acceptance by any such use,means, instrumentality or facility or from within the United States, or anyother Restricted Jurisdiction. Accordingly, unless otherwise determined byWarner Estate or required by the Takeover Code and permitted by applicable lawand regulation, copies of this Announcement are not being, and must not be,directly or indirectly, mailed, transmitted or otherwise forwarded, distributedor sent in, into or from the United States or any other Restricted Jurisdiction,and persons receiving this Announcement (including, without limitation,custodians, nominees and trustees) must not mail, or otherwise, forward,distribute or send it in, into or from such jurisdiction.Any persons (including without limitation, any custodian, nominee and trustee)who would, or otherwise intends to, or may have a contractual or legalobligation to, forward this Announcement, and/or the Offer Document, and/or anyother related document to any jurisdiction outside the United Kingdom shouldinform themselves of, and observe, any applicable legal or regulatoryrequirements of their jurisdiction. The Loan Notes to be issued pursuant to the Loan Note Alternative have not been,and will not be, listed on any stock exchange and have not been, and will notbe, registered under the US Securities Act or under the laws of any state,district or other jurisdiction of the United States, nor have clearances been,nor will they be, obtained from the securities commission or similar authorityof any province or territory of Canada and no prospectus has been, or will be,filed, or registration made, under any securities law of any province orterritory of Canada, nor has a prospectus in relation to the Loan Notes been,nor will one be, lodged with, or registered by, the Australian Securities andInvestments Commission, nor have any steps been taken, nor will any steps betaken, to enable the Loan Notes to be offered in compliance with applicablesecurities laws of Japan and no regulatory clearances in respect of the LoanNotes have been, or will be, applied for in any other jurisdiction. Accordingly,unless an exemption under relevant securities laws is available, the Loan Notesare not being, and may not be, offered, sold, resold, delivered or distributed,directly or indirectly, in, into or from the United States or any other LoanNote Restricted Jurisdiction or to, or for the account or benefit of, any USperson or resident of any other Loan Note Restricted Jurisdiction. The Offerdoes not constitute an offer of Loan Notes in the United States. Neither the USSecurities and Exchange Commission nor any US state securities commission hasapproved or disapproved of the Loan Notes, or determined if this Announcement isaccurate or complete. Any representation to the contrary is a criminal offence. Nothing in this Announcement is intended, or is to be construed, as a forecast,projection or estimate of the future financial performance of either JS orWarner Estate. Cautionary statement regarding forward-looking statements This Announcement, including information included or incorporated by referencein this Announcement may contain forward-looking statements concerning WarnerEstate and JS. Generally the words "will", "may", "should", "continue","believes", "expects", "intends", "anticipates" or similar expressions identifyforward-looking statements. The forward-looking statements involve risks anduncertainties that could cause actual results to differ materially from thosesuggested by them. Many of these risks and uncertainties relate to factors thatare beyond the companies' abilities to control or estimate precisely, such asfuture market conditions and the behaviours of other market participants, andtherefore undue reliance should not be placed on such statements which speakonly as at the date of this Announcement. Warner Estate and JS assume noobligation and do not intend to update these forward-looking statements, exceptas required pursuant to applicable law. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the Takeover Code, if any person is, orbecomes, 'interested' (directly or indirectly) in one per cent. or more of anyclass of 'relevant securities' of JS, all 'dealings' in any 'relevantsecurities' of JS (including by means of an option in respect of, or aderivative referenced to, any such 'relevant securities') must be publiclydisclosed by no later than 3.30 pm (London time) on the London business dayfollowing the date of the relevant transaction. This requirement will continueuntil the date on which the Offer becomes, or is declared, unconditional as toacceptance, lapses or is otherwise withdrawn or on which the 'offer period'otherwise ends. If two or more persons act together pursuant to an agreement orunderstanding, whether formal or informal, to acquire an 'interest' in 'relevantsecurities' of JS they will be deemed to be a single person for the purpose ofRule 8.3 of the Takeover Code. Under the provisions of Rule 8.1 of the Takeover Code, all 'dealings' in'relevant securities' of JS by Warner Estate or JS or by any of their respective'associates' must be disclosed by no later than 12.00 noon (London time) on theLondon business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose 'relevantsecurities' 'dealings' should be disclosed, and the number of such securities inissue, can be found on the Panel's website at www.thetakeoverpanel.org.uk. 'Interests in securities' arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an 'interest' byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Takeover Code, which can also befound on the Panel's website. If you are in any doubt as to whether or not youare required to disclose a 'dealing' under Rule 8 of the Takeover Code, youshould consult the Panel. Not for release, publication or distribution, in whole or in part, in, into orfrom the United States or any other Restricted Jurisdiction. ANNOUNCEMENTFOR IMMEDIATE RELEASE 26 January 2007 RECOMMENDED CASH OFFER by WARNER ESTATE HOLDINGS PLC for JS REAL ESTATE PLC 1. Introduction The boards of Warner Estate and JS are pleased to announce the terms of arecommended cash offer to be made by Warner Estate to acquire the entire issuedand to be issued share capital of JS. 2. The Offer The Offer, which will be on the terms and subject to the conditions set outbelow and in Appendix I, and to be set out in the Offer Document and the Form ofAcceptance, will be made on the following basis: for each JS Share 700 pence in cash The Offer values the entire issued share capital of JS at approximately £114million. • The Offer represents: • a discount of approximately 10.3 per cent. to the LSE Closing Price of 780 pence per JS Share on 25 January 2007 (being the last Business Day prior to the date of this Announcement). • a premium of approximately 13.4 per cent. to the Closing Price of 617.5 pence per JS Share on 26 July 2006 (being the date 6 months prior to the date of this Announcement). • a premium of approximately 35.3 per cent. to the Closing Price of 517.5 pence per JS Share on 26 January 2006 (being the date 12 months prior to the date of this Announcement). Over the last six months, the price of JS Shares has risen significantly, drivenby a combination of market factors affecting sentiment in the real estate sectorand the lack of liquidity in JS Shares. The price of JS' Shares has risen by 50per cent. from 520 pence at the end of JS' last financial year and by 28 percent. from 607.5 pence since JS' half year end only four months ago. To givefurther perspective, over the same periods, the FTSE Small Cap Real Estate Indexhas risen by approximately 10 per cent. and 7 per cent. respectively. Theincrease in JS' share price has occurred on very low trading volumes andtransactions at recent levels have been for small numbers of shares.Consequently, the JS Directors do not believe that the recent price levelsrepresent a realistic indication of the level at which large shareholdings couldbe traded or an appropriate benchmark on which to assess an offer to acquire theentire share capital of JS. The Offer price of 700 pence for each JS Share equates to a total Offer Value ofapproximately £114 million for the entire share capital of JS. In arriving atthis value Warner Estate have assumed a 5 per cent. yield on the rental incomeof the JS portfolio for the twelve months to 24 September 2006 and deducted theinterim dividend (which was paid in early January) and acquisition costs. 3. Recommendation The JS Directors, who have been so advised by Oriel Securities, unanimouslyconsider the terms of the Offer to be fair and reasonable. In providing adviceto the JS Directors, Oriel Securities has taken into account the commercialassessments of the JS Directors. The JS Directors believe that the Offer is in the best interests of JSShareholders as a whole and intend to recommend unanimously that JS Shareholdersaccept the Offer as they have irrevocably undertaken to do, or procure to bedone, in respect of their own beneficial holdings. 4. The Loan Note Alternative As an alternative to some or all of the cash consideration to which they wouldotherwise be entitled under the Offer, accepting JS Shareholders, other than USPersons and other shareholders in Restricted Jurisdictions, will be entitled toelect to receive Loan Notes to be issued by Warner Estate on the followingbasis: for every £1 of cash consideration £1 nominal of Loan Notes The Loan Notes, which will be governed by English Law, will be unsecured andissued by Warner Estate, credited as fully paid, in amounts and integralmultiples of £1 nominal value. The Loan Notes will bear interest (from the date of issue to the relevant holderof Loan Notes) at a rate of 1 per cent. per annum below LIBOR (for three monthsterling deposits). Interest will be payable semi-annually in arrears on 30September and 31 March in each year, up to and including 31 March 2012 (each an"Interest Payment Date") (or, if not a Business Day in any year, on the firstBusiness Day thereafter) in respect of the period (an "Interest Period")starting on the previous Interest Payment Date and ending on the day before thenext Interest Payment Date. However, the first payment of interest will be onthe later of 30 April 2007 and the date that is one month after the date ofexecution of the instrument constituting the Loan Notes (which shall thereforebe the first Interest Payment Date) and in respect of the period from (andincluding) the date of execution of the instrument constituting the Loan Notesto (but excluding) the first Interest Payment Date. The Loan Notes will be redeemable at the holder's option in part or in whole, onnot less than 14 days' notice, on each Interest Payment Date, other than 31March 2012. Unless previously redeemed or purchased, the Loan Notes will beredeemed on 31 March 2012 (or, if not a Business Day, on the first Business Daythereafter). The Loan Notes can be redeemed by Warner Estate at anytime on orafter 31 March 2010 if at any time thereafter the aggregate nominal amount ofall the Loan Notes then outstanding shall be equal to or less than twenty percent. of the total amount of the Loan Notes outstanding immediately after thefirst redemption date. Unless Warner Estate decides otherwise, no Loan Notes will be issued unless, bythe time the Offer has become or is declared unconditional in all respects,valid elections have been received for at least £15 million in nominal value ofLoan Notes. If insufficient valid elections are received, JS Shareholders whovalidly elect for the Loan Note Alternative will instead receive cash inaccordance with the terms of the Offer. The Loan Notes will not be transferable and no application will be made for theLoan Notes to be listed, quoted or dealt on, any stock exchange or other tradingfacility. The Loan Note Alternative is conditional on the Offer becoming or being declaredunconditional in all respects and will remain open for acceptance for so long asthe Offer remains open for acceptance. Further details of the Loan Notes will be contained in the Offer Document. 5. Further Terms of the Offer The JS Shares will be acquired pursuant to the Offer fully paid and free fromall liens, charges, equitable interests, encumbrances, rights of pre-emption andany other interests of any nature whatsoever and together with all rights now orhereafter attaching thereto, including, without limitation, voting rights andthe right to receive and retain in full all dividends and other distributions(if any) announced, declared, made or paid on or after 26 January 2007. 6. Background to, and reasons for, the Offer The Warner Estate Board believes that the acquisition of JS offers an attractiveopportunity to increase Warner Estate's property assets under management whilstincreasing its presence in London and the South East. Some of JS' assets may beallocated to existing Warner Estate funds. The Warner Estate Board intends to leverage Warner Estate's existing resourcesin order to manage the JS assets and would reduce overheads through the closureof JS' head office. This will improve the yield on the JS properties. The WarnerEstate Board further believes that JS' assets provide a number of developmentand asset management opportunities. The addition of the JS portfolio alsoincreases the scale of Warner Estate's activities for REIT conversion in 2007. 7. Background to, and reasons for, recommending the Offer JS was founded in 1899 and was almost entirely owned by members of the family ofJames Smith until it joined the Unlisted Securities Market in 1989. In 1994, JSbecame fully listed on the London Stock Exchange where it remained until August2005 when it transferred to AIM. The family of James Smith has maintained asignificant interest in JS throughout its life as a public company both inrespect of a presence on the JS Board and the size of the aggregate familyshareholding. Immediately after the listing in 1994, family holders heldapproximately one third of the shares in issue. However, over the last eightyears JS has repurchased approximately 10.5 million JS Shares from institutionalshareholders with the result that the Smith family shareholders now holdapproximately half of the JS Shares in issue. In addition, a further 29 percent. is held by a single professional investor. JS has carried on business during the last twenty years principally as ageneralist real estate investor together with a limited amount of developmentactivity. In 1998 the JS Board adopted a strategy aimed at generating abovemarket total returns for JS Shareholders by pursuing acquisitions that offeredpotential for adding value through active management. The success of thisapproach can be measured by the fact that in the eight financial years since 24March 1998, JS has reported a compound increase in net asset value per share ofapproximately 19 per cent. per annum. On the basis of the Offer price, totalreturns to JS Shareholders from the same date, calculated by reference to theincrease in share price and in dividends paid, have been approximately 21 percent. per annum. Despite this background of strong performance, the JS Board decided to explorean approach from Warner Estate having recognised two important developments inthe real estate sector that could have an impact on JS' ability to continue todeliver such high returns in the medium term. Firstly, increased competitionfrom a significantly broadened real estate investor base and an ever moreregulatory environment has favoured and will continue to favour, larger and morespecialised property investment companies. Secondly, the introduction of REITshas created significant tax advantages for those companies able to satisfy theconditions of REIT status. Given the current shareholder structure of JS and itspresence on AIM, a conversion to REIT status is not likely to be asstraightforward as for other listed property companies such as Warner Estate. In considering the terms of the Offer, the JS Board has taken into account thevalue offered for the assets of JS as well as the tax benefit it would be likelyto receive if it could convert to a REIT itself. As at 24 March 2006, JS had acontingent liability to tax on the disposal of its property portfolio equivalentto 77 pence per share. That liability will have risen broadly in line with anyincrease in the value of the portfolio but is capable of elimination by apurchaser who attains REIT status in return for a tax charge of 2 per cent. ofthe aggregate portfolio value. The JS Board believes that the Offer fullyreflects the value of JS' assets and, in addition, takes account of thepotential benefit that would accrue to JS Shareholders in removing the inherenttax liability were it able to convert to a REIT. The JS Board is keenly aware that in recommending the Offer it is proposing thatover 107 years of independent existence should come to an end. The Board is alsocognisant of the fact that many JS Shareholders have shown extraordinary loyaltyand support to JS, particularly during the last eighteen years when it has beena public company. However, the JS Board believes that the Offer fully reflectsthe value created by the JS team and that it allows all JS Shareholders anexcellent opportunity to benefit from a realisation of their investment forcash. As a result the JS Board considers it appropriate to recommend acceptanceof the Offer to JS Shareholders. 8. Information on JS JS is a property company focusing on commercial real estate investment in Londonand southern England. JS' strategy is to target opportunities where it can supplement returns throughasset management and development activity, predominantly through vacant,part-let and short-term income producing assets for refurbishment orredevelopment. JS generated profit before tax of £6.7 million for the year ending 24 March 2006(£5.9 million in 2005) from turnover of £10.4 million (£11.6 million in 2005).JS had a rental income of £6.6 million for the year ended 24 March 2006 and £3.3million for the 6 months to 24 September 2006. 9. Information on Warner Estate Founded in 1891, Warner Estate is a UK property investment group whose primaryobjective is to maximise total return for shareholders, both by increasing netasset value per share and by dividend growth from an improving earnings stream.Warner Estate has delivered 35 years of continuous dividend growth to itsshareholders. Warner Estate specialises in the management of property across theretail, office and industrial sectors and had £2.8 billion of property assetsunder management as at 30 September 2006. As stated in Warner Estate's interim results, released on 29 November 2006,Warner Estate will continue to consider and research new sectors which furtherthe strategy. In line with this strategy Warner Estate announced, in October2006, the formation of the £98 million Greater London Office Fund, with BarclaysCapital, focused on office investments throughout London and the Greater Londonprincipal boroughs. In light of the introduction of legislation permitting the formation of REITsfrom 1 January 2007, the Warner Estate Directors have, following evaluation,concluded that conversion to REIT status would be of benefit to Warner EstateShareholders and therefore Warner Estate currently intends to convert.Conversion would not take place before 1 April 2007. As at 30 September 2006 theconversion charge and the related costs were estimated to be in the order of£15-20 million and the capital gains tax liability which would be extinguishedwas estimated to be £34 million. Warner Estate generated profit before tax of £91.0 million for the year ending31 March 2006 (£55.2 million in 2005) from turnover of £67.5 million (£45.1million in 2005). 10. Financing for the Offer The consideration payable under the Offer will be funded entirely in cash,through an increase in existing banking facilities and a placing of up to2,675,125 new Warner Estate ordinary shares representing up to 5 per cent. ofthe issued share capital of Warner Estate in order to raise approximately£21,400,000. The placing is also announced today and is underwritten byBridgewell.Bridgewell confirms that it is satisfied that sufficient financial resources areavailable to Warner Estate to satisfy in full the cash consideration payable toJS Shareholders under the terms of the Offer. 11. Inducement fee JS and Warner Estate have entered into an agreement under which JS has agreed topay Warner Estate a fee equal to one per cent. of the Offer Value (inclusive ofany VAT payable thereon save to the extent that such VAT is recoverable by JS)in the event that: (a) the JS Directors withdraw, or adversely modify, or make subject to anycondition or qualification, their recommendation of the Offer (including, forthe avoidance of doubt recommending a Competing Offer); or (b) the Offer lapses or is withdrawn and before the lapse or withdrawal aCompeting Offer for JS is announced (whether under Rule 2.4 or Rule 2.5 of theTakeover Code or otherwise) which subsequently becomes or is declaredunconditional in all respects or is otherwise completed or implemented. Nothing in the inducement fee agreement obliges JS to pay any amount which thePanel determines would not be permitted by Rule 21.2 of the Takeover Code. 12. Management, employees and location The Warner Estate Board has given assurances to the JS Directors that, on theOffer becoming or being declared unconditional in all respects, the existingemployment rights, including pension rights, of all JS Group employees will beobserved at least to the extent required by applicable law. If the Offer becomes or is declared unconditional in all respects, it isintended that the employment contracts of Antony Roscoe, Anthony Rutherford andKamla Gardner will be terminated although, as part of the terminationagreements, they have agreed to work with Warner Estate for a transitionalperiod. Also, Stephen Mulliner, Simon Speirs and Susan Weeks will resign. 13. Irrevocable undertakings Warner Estate has received irrevocable undertakings to accept (or procureacceptances of) the Offer from the JS Directors and certain persons connectedwith them in respect of, in aggregate, 2,221,706 JS Shares representingapproximately 13.64 per cent. of JS' issued share capital. Warner Estate has also received irrevocable undertakings to accept the Offerfrom Trefick Limited in respect of 4,670,285 JS Shares representingapproximately 28.68 per cent. of JS' issued share capital and from certainshareholders connected with or related to the James Smith family in respect of,in aggregate, 2,249,180 JS Shares representing approximately 13.81 per cent. ofJS' issued share capital. Warner Estate has therefore received irrevocable commitments to accept (orprocure acceptances of) the Offer in respect of, in aggregate, 9,141,171 JSShares, representing approximately 56.14 per cent. of the issued share capitalof JS. Further details of these irrevocable undertakings are set out in Appendix II tothis Announcement. 14. Disclosure of interests in JS As at the close of business on 25 January 2007 (the latest practicable BusinessDay prior to the date of this Announcement), neither Warner Estate, nor anyWarner Estate Director, nor, so far as Warner Estate is aware, any person actingin concert with Warner Estate has any interest in, or has any right to subscribefor, any relevant securities of JS, nor are they party to any short positions(whether conditional or absolute and whether in the money or otherwise) relatingto relevant securities of JS, including short positions under derivatives,agreements to sell or any delivery obligations or rights to require anotherperson to take delivery. Neither Warner Estate nor any Warner Estate Director nor, so far as WarnerEstate is aware, any person acting in concert with Warner Estate has borrowed orlent any relevant securities of JS. No arrangement exists with Warner Estate norany associate of Warner Estate (within the meaning of the Takeover Code) inrelation to relevant securities of JS. For these purposes, "arrangement"includes any indemnity or option arrangement and any agreement or understanding,formal or informal, of whatever nature, relating to relevant securities of JSwhich may be an inducement to deal or refrain from dealing in such securities. 15. Extraordinary General Meeting Trefick Limited holds 13.79 per cent. of Warner Estate's existing issued sharecapital. It is also a 28.68 per cent. shareholder in JS. Accordingly, theacceptance of the Offer by Trefick will amount to a related party transaction byWarner Estate under the Listing Rules, therefore requiring the approval, byordinary resolution, of Warner Estate Shareholders (other than Trefick and itsassociates) at an extraordinary general meeting. It is intended to publish thenotice of the Extraordinary General Meeting of Warner Estate at the time ofposting the Offer Document. The Offer will be conditional upon the passing ofthe Ordinary Resolution. If the Ordinary Resolution is not passed and the Offerlapses or is withdrawn as a result, Warner Estate has agreed to pay JS a fee of0.5 per cent. of the Offer Value (inclusive of any VAT payable thereon save tothe extent that such VAT is recoverable by JS). 16. Compulsory acquisition and cancellation of trading If Warner Estate receives acceptances under the Offer in respect of, and/orotherwise acquires 90 per cent. or more of the JS Shares to which the Offerrelates, Warner Estate intends to exercise its rights pursuant to the provisionsof sections 428 to 430F (inclusive) of the Companies Act to acquirecompulsorily, any outstanding JS Shares in respect of which the Offer has notbeen accepted. After the Offer becomes or is declared unconditional in all respects and WarnerEstate has by virtue of its shareholdings and acceptances of the Offer acquired,or agreed to acquire, issued share capital representing at least 75 per cent. ofthe voting rights of JS, Warner Estate intends, as soon as practicable and inaccordance with the AIM Rules, to procure the making of an application by JS tothe London Stock Exchange for the cancellation of the admission to trading of JSShares on AIM. A notice period of not less than 20 business days prior to thecancellation will commence either on Warner Estate attaining 75 per cent. ormore of the voting rights as described above or on the first date of issue ofcompulsory acquisition notices under sections 428 to 430F of the Companies Act.The cancellation of the admission of JS Shares to trading on AIM willsignificantly reduce the liquidity and marketability of any JS Shares notassented to the Offer and their value may be affected in consequence. It is also proposed that, following the Offer becoming unconditional in allrespects and after the cancellation of the admission of JS Shares to trading onAIM, JS will be re-registered as a private company under the relevant provisionsof the Companies Act. 17. General The Offer will be on the terms and subject to the conditions set out herein andin Appendix I, and to be set out in the Offer Document and Form of Acceptance.The formal Offer Document will be sent to shareholders of JS by 23 February 2007(or such later date as the Panel may agree). Enquiries: Warner Estate Tel: +44 (0) 20 7907 5100Philip WarnerPeter CollinsMichael Stevens Bridgewell Tel: +44 (0) 20 7003 3000(Financial adviser and broker to Warner Estate)Heraclis EconomidesRashmi Sinha City Profile Tel: +44 (0) 20 448 3244(Financial public relations to Warner Estate)Simon CourtenayWilliam Attwell JSStephen Mulliner Tel: +44 (0) 7711 672 015Tony Roscoe Tel: +44 (0) 20 7408 1515 Oriel Securities Tel: +44 (0) 20 7710 7600(Financial adviser and broker to JS)Simon BraggNatalie FortescueMichael Shaw A presentation to analysts has been scheduled for 11.00 am on 26 January 2007 atthe offices of City Profile Group Limited, 7-9, Copthall Avenue, London, EC2R7NJ. This Announcement is not intended to and does not constitute or form any part ofany offer, invitation or the solicitation of an offer to purchase, subscribe foror otherwise acquire, sell or dispose of, any securities pursuant to the Offeror otherwise. The Offer will be made solely by the Offer Document and Form ofAcceptance, when issued, which will contain the full terms and conditions of theOffer, including details of how the Offer may be accepted. Bridgewell, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting exclusively for Warner Estate and no-oneelse in connection with the Offer and will not be responsible to anyone otherthan Warner Estate for providing the protections afforded to clients ofBridgewell nor for giving advice in relation to the Offer or any matter orarrangement referred to in this Announcement. Oriel Securities, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting exclusively for JS in connection withthe Offer and for no-one else in connection with the Offer and will not beresponsible to anyone other than JS for providing the protections afforded toclients of Oriel Securities nor for giving advice in relation to the Offer orany matter or arrangement referred to in this Announcement. This Announcement has been prepared in accordance with English law, the TakeoverCode and the AIM Rules and information disclosed may not be the same as thatwhich would have been prepared in accordance with the law of jurisdictionsoutside England.The Offer will be subject to the applicable rules and regulations of theFinancial Services Authority, the London Stock Exchange and the Takeover Code.The distribution of this Announcement in jurisdictions other than the UnitedKingdom and the availability of the Offer to JS Shareholders who are notresident in the United Kingdom may be affected by the laws of relevantjurisdictions. Therefore, any persons who are subject to the laws of anyjurisdiction other than the United Kingdom or JS Shareholders who are notresident in the United Kingdom will need to inform themselves about, andobserve, any applicable requirements. Unless otherwise determined by Warner Estate or required by the Takeover Codeand permitted by applicable law and regulation, the Offer is not being, and willnot be made, directly or indirectly, in or into or by use of the mails of, or byany other means or instrumentality (including, without limitation, facsimiletransmission, telex, telephone, internet, or other forms of electronictransmission) of inter-state or foreign commerce of, or any facility of anational, state or other securities exchange of, the United States or any otherRestricted Jurisdiction, and will not be capable of acceptance by any such use,means, instrumentality or facility or from within the United States, or anyother Restricted Jurisdiction. Accordingly, unless otherwise determined byWarner Estate or required by the Takeover Code and permitted by applicable lawand regulation, copies of this Announcement are not being, and must not be,directly or indirectly, mailed, transmitted or otherwise forwarded, distributedor sent in, into or from the United States, or any other RestrictedJurisdiction, and persons receiving this Announcement (including, withoutlimitation, custodians, nominees and trustees) must not mail, or otherwise,forward, distribute or send it in, into or from such jurisdiction.Any person (including without limitation, any custodian, nominee and trustee)who would, or otherwise intends to, or may have a contractual or legalobligation to, forward this Announcement, and/or the Offer Document, and/or anyother related document to any jurisdiction outside the United Kingdom shouldinform themselves of, and observe, any applicable legal or regulatoryrequirements of their jurisdiction. The Loan Notes to be issued pursuant to the Loan Note Alternative have not been,and will not be, listed on any stock exchange and have not been, and will notbe, registered under the US Securities Act or under the laws of any state,district or other jurisdiction of the United States, nor have clearances been,nor will they be, obtained from the securities commission or similar authorityof any province or territory of Canada and no prospectus has been, or will be,filed, or registration made, under any securities law of any province orterritory of Canada, nor has a prospectus in relation to the Loan Notes been,nor will one be, lodged with, or registered by, the Australian Securities andInvestments Commission, nor have any steps been taken, nor will any steps betaken, to enable the Loan Notes to be offered in compliance with applicablesecurities laws of Japan and no regulatory clearances in respect of the LoanNotes have been, or will be, applied for in any other jurisdiction. Accordingly,unless an exemption under relevant securities laws is available, the Loan Notesare not being, and may not be, offered, sold, resold, delivered or distributed,directly or indirectly, in, into or from the United States or any other LoanNote Restricted Jurisdiction or to, or for the account or benefit of, any USperson or resident of any other Loan Note Restricted Jurisdiction. The Offerdoes not constitute an offer of Loan Notes in the United States. Neither the USSecurities and Exchange Commission nor any US state securities commission hasapproved or disapproved of the Loan Notes, or determined if this Announcement isaccurate or complete. Any representation to the contrary is a criminal offence. Nothing in this Announcement is intended, or is to be construed, as a forecast,projection or estimate of the future financial performance of either JS orWarner Estate. Cautionary statement regarding forward-looking statements This Announcement, including information included or incorporated by referencein this Announcement may contain forward-looking statements concerning WarnerEstate and JS. Generally the words "will", "may", "should", "continue","believes", "expects", "intends", "anticipates" or similar expressions identifyforward-looking statements. The forward-looking statements involve risks anduncertainties that could cause actual results to differ materially from thosesuggested by them. Many of these risks and uncertainties relate to factors thatare beyond the companies' abilities to control or estimate precisely, such asfuture market conditions and the behaviours of other market participants, andtherefore undue reliance should not be placed on such statements which speakonly as at the date of this Announcement. Warner Estate and JS assume noobligation and do not intend to update these forward-looking statements, exceptas required pursuant to applicable law. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the Takeover Code, if any person is, orbecomes, 'interested' (directly or indirectly) in one per cent. or more of anyclass of 'relevant securities' of JS, all 'dealings' in any 'relevantsecurities' of JS (including by means of an option in respect of, or aderivative referenced to, any such 'relevant securities') must be publiclydisclosed by no later than 3.30 pm (London time) on the London business dayfollowing the date of the relevant transaction. This requirement will continueuntil the date on which the Offer becomes, or is declared, unconditional as toacceptance, lapses or is otherwise withdrawn or on which the 'offer period'otherwise ends. If two or more persons act together pursuant to an agreement orunderstanding, whether formal or informal, to acquire an 'interest' in 'relevantsecurities' of JS they will be deemed to be a single person for the purpose ofRule 8.3 of the Takeover Code. Under the provisions of Rule 8.1 of the Takeover Code, all 'dealings' in'relevant securities' of JS by Warner Estate or JS or by any of their respective'associates' must be disclosed by no later than 12.00 noon (London time) on theLondon business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose 'relevantsecurities' 'dealings' should be disclosed, and the number of such securities inissue, can be found on the Panel's website at www.thetakeoverpanel.org.uk. 'Interests in securities' arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an 'interest' byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Takeover Code, which can also befound on the Panel's website. If you are in any doubt as to whether or not youare required to disclose a 'dealing' under Rule 8 of the Takeover Code, youshould consult the Panel. APPENDIX I CONDITIONS AND FURTHER TERMS OF THE OFFER The Offer, which will be made by Warner Estate, will comply with the applicablerules and regulations of the Financial Services Authority, the London StockExchange and the Takeover Code, will be governed by English law and will besubject to the jurisdiction of the courts of England. In addition it will besubject to the terms and conditions set out in the Offer Document and relatedForm of Acceptance. 1. Conditions of the Offer The Offer will be subject to the following conditions: (a) valid acceptances being received (and not, where permitted,withdrawn) by not later than 1.00 pm (London time) on the first closing date ofthe Offer (or such later time(s) and/or date(s) as Warner Estate may, subject tothe rules of the Takeover Code or with the consent of the Panel, decide) inrespect of not less than 90 per cent. (or such lower percentage as Warner Estatemay decide) of the JS Shares to which the Offer relates, provided that thiscondition will not be satisfied unless Warner Estate (together with its whollyowned subsidiaries) shall have acquired or agreed to acquire (whether pursuantto the Offer or otherwise) JS Shares carrying in aggregate more than 50 percent. of the voting rights then normally exercisable at a general meeting of JS,including for this purpose (except to the extent otherwise agreed by the Panel)any such voting rights attaching to JS Shares that are unconditionally allottedor issued before the Offer becomes or is declared unconditional as toacceptances whether pursuant to the exercise of any outstanding subscription orconversion rights or otherwise. For the purposes of this condition: (i) JS Shares which have been unconditionally allotted shallbe deemed to carry the voting rights they will carry upon issue; (ii) JS Shares that cease to be held in treasury are JS Sharesto which the Offer relates; and (iii) the expression "JS Shares to which the Offer relates"shall be construed in accordance with sections 428 to 430F of the Act; (b) Admission of the Placing Shares having become effective; (c) the passing at an Extraordinary General Meeting of WarnerEstate (or at any adjournment of the meeting) of the Ordinary Resolution; (d) no government or governmental, quasi-governmental,supranational, statutory, regulatory, environmental, administrative, fiscal orinvestigative body, court, trade agency, association, institution or any otherbody or person whatsoever in any jurisdiction (each a "Third Party") havingdecided to take, institute, implement or threaten any action, proceeding, suit,investigation, enquiry or reference, or having required any action to be takenor otherwise having done anything or having enacted, made or proposed anystatute, regulation, decision, order or change to published practice and therenot continuing to be outstanding any statute, regulation, decision or orderwhich would or might: (i) make the Offer, its implementation or the acquisition orproposed acquisition of any shares or other securities in, or control of, JS byany member of the Wider Warner Estate Group void, illegal and/or unenforceableunder the laws of any jurisdiction, or otherwise directly or indirectlyprohibit, or restrain, restrict, delay or otherwise interfere with theimplementation of, or impose additional conditions or obligations with respectto, or otherwise challenge or require amendment of the Offer or the acquisitionof any such shares or securities by any member of the Wider Warner Estate Group; (ii) require, prevent or delay the divestiture or alter theterms envisaged for such divestiture by any member of the Wider Warner EstateGroup or by any member of the Wider JS Group of all or any part of itsbusinesses, assets or property or impose any limitation on the ability of any ofthem to conduct their businesses (or any part thereof) or to own any of theirassets or properties (or any part thereof); (iii) impose any limitation on, or result in a delay in, theability of any member of the Wider Warner Estate Group directly or indirectly toacquire or hold or to exercise effectively all or any rights of ownership inrespect of JS Shares or (provided such limitation or delay is material) othersecurities in JS or on the ability of any member of the Wider JS Group or anymember of the Wider Warner Estate Group directly or indirectly to hold orexercise effectively any rights of ownership in respect of shares or othersecurities (or the equivalent) in, or to exercise management control over JS or(provided such limitation or delay is material) any other member of the Wider JSGroup; (iv) require any member of the Wider Warner Estate Group toacquire or offer to acquire any shares, other securities (or the equivalent) orinterest in any member of the Wider JS Group owned by any third party (otherthan in the implementation of the Offer); (v) require, prevent or materially delay a divestiture by anymember of the Wider Warner Estate Group of any shares or other securities (orthe equivalent) in JS. (vi) result in any member of the Wider JS Group ceasing to beable to carry on business under any name under which it presently carries onbusiness to an extent which is material in the context of the JS Group taken asa whole; (vii) impose any material limitation on the ability of any memberof the Wider Warner Estate Group or any member of the Wider JS Group tointegrate or co-ordinate all or any part of its business with all or any part ofthe business of any other member of the Wider Warner Estate Group and/or theWider JS Group; or (viii) except as fairly disclosed in writing by JS to WarnerEstate prior to 26 January 2007 otherwise affect the business, assets, profitsor prospects of any member of the Wider JS Group or any member of the WiderWarner Estate Group in a manner which is adverse to and material in the contextof the JS Group taken as a whole or of the obligations of any members of theWarner Estate Group taken as a whole in connection with the financing of theOffer; and all applicable waiting and other time periods during which any such ThirdParty could decide to take, institute, implement or threaten any such action,proceeding, suit, investigation, enquiry or reference or take any other stepunder the laws of any jurisdiction in respect of the Offer or the acquisition orproposed acquisition of any JS Shares or otherwise intervene having expired,lapsed, or been terminated; (e) no undertakings or assurances being sought from Warner Estate,any member of the Wider Warner Estate Group or any member of the Wider JS Groupby the Secretary of State for Trade and Industry or any other third party,except on terms satisfactory to Warner Estate; (f) all necessary or appropriate notifications, filings orapplications having been made in connection with the Offer and all necessarywaiting periods (including any extensions thereof) under any applicablelegislation or regulation of any jurisdiction having expired, lapsed or beenterminated (as appropriate) and all statutory and regulatory obligations in anyjurisdiction having been complied with and all Authorisations necessary orappropriate in any jurisdiction for or in respect of the Offer and theacquisition or the proposed acquisition of any shares or other securities in, orcontrol of, JS by any member of the Wider Warner Estate Group having beenobtained in terms and in a form satisfactory to Warner Estate from allappropriate Third Parties or (without prejudice to the generality of theforegoing) from any person or bodies with whom any member of the Wider JS Groupor the Wider Warner Estate Group has entered into contractual arrangements andall such Authorisations necessary or appropriate to carry on the business of anymember of the Wider JS Group in any relevant jurisdiction having been obtainedin each case where the direct consequence of a failure to make such notificationor filing or to wait for the expiry, lapse or termination of any such waitingperiod or to comply with such obligation or obtain such Authorisation would havea material adverse effect on the JS Group, any member of the Warner Estate Groupor the ability of Warner Estate to implement the Offer and all suchAuthorisations remaining in full force and effect at the time at which the Offerbecomes otherwise unconditional and there being no notice or intimation of anintention to revoke, suspend, restrict, modify or not to renew suchAuthorisations; (g) except as fairly disclosed in the Interim Results of JS therebeing no provision of any arrangement, agreement, licence, permit, lease orother instrument to which any member of the Wider JS Group is a party or by orto which any such member or any of its assets is or may be bound or be subjector any event or circumstance which, as a consequence of the Offer or theacquisition or the proposed acquisition by any member of the Wider Warner EstateGroup of any shares or other securities in JS or because of a change in thecontrol or management of any member of the Wider JS Group or otherwise, could ormight reasonably be expected to result in, in each case to an extent which ismaterial in the context of the JS Group taken as a whole or to the obligationsof any member of the Warner Estate Group in connection with the financing of theOffer: (i) any monies borrowed by, or any other indebtedness,actual or contingent, of any member of the Wider JS Group being or becomingrepayable, or capable of being declared repayable, immediately or prior to itsor their stated maturity date or repayment date, or the ability of any suchmember to borrow monies or incur any indebtedness being withdrawn or inhibitedor being capable of becoming or being withdrawn or inhibited; (ii) the rights, liabilities, obligations, interests orbusiness of any member of the Wider JS Group or any member of the Wider WarnerEstate Group under any such arrangement, agreement, licence, permit, lease orinstrument or the interests or business of any member of the Wider JS Group orany member of the Wider Warner Estate Group in or with any other firm or companyor body or person (or any agreement or arrangement relating to any such businessor interests) being terminated or adversely modified or affected or any onerousobligation or liability arising or any adverse action being taken thereunder; (iii) any member of the Wider JS Group ceasing to be able tocarry on business under any name under which it presently carries on business ; (iv) any assets or interests of, or any asset the use of whichis enjoyed by, any member of the Wider JS Group being or falling to be disposedof or charged or any right arising under which any such asset or interest couldbe required to be disposed of or charged or could cease to be available to anymember of the Wider JS Group otherwise than in the ordinary course of business; (v) the creation or enforcement of any mortgage, charge orother security interest over the whole or any part of the business, property orassets of any member of the Wider JS Group; (vi) the value of, or the financial or trading position orprospects of, any member of the Wider JS Group being prejudiced or adverselyaffected; (vii) the creation of any liability (actual or contingent) by anymember of the Wider JS Group; or (viii) save as disclosed to Warner Estate in writing by JS priorto 26 January 2007, any liability of any member of the Wider JS Group to makeany severance, termination, bonus or other payment to any of its directors orother officers; (h) since 24 March 2006, and except as fairly disclosed in theInterim Results of JS no member of the Wider JS Group having: (i) issued or agreed to issue or authorised or proposed theissue of additional shares of any class, or securities or securities convertibleinto, or exchangeable for, or rights, warrants or options to subscribe for oracquire, any such shares or convertible securities (save, where relevant, asbetween JS and wholly-owned subsidiaries of JS); (ii) recommended, declared, paid or made or proposed torecommend, declare, pay or make any bonus, dividend or other distribution(whether payable in cash or otherwise) other than to JS or one of itswholly-owned subsidiaries; (iii) save for transactions between JS and its wholly-ownedsubsidiaries, merged with or demerged from or acquired any body corporate,partnership or business or acquired or disposed of, or, other than in theordinary course of business, transferred, mortgaged or charged or created anysecurity interest over, any assets or any right, title or interest in any asset(including shares and trade investments) or authorised, proposed or announcedany intention to do so; (iv) save as between JS and its wholly-owned subsidiaries orbetween such wholly-owned subsidiaries, made, authorised, proposed or announcedan intention to propose any change in its loan capital; (v) issued, authorised or proposed the issue of any debenturesor (save in the ordinary course of business and save as between JS and itswholly-owned subsidiaries or between such wholly-owned subsidiaries) incurred orincreased any indebtedness or become subject to any contingent liability to anextent which is material in the context of the JS Group; (vi) entered into or varied or authorised, proposed orannounced its intention to enter into or vary any contract, transaction,arrangement or commitment (whether in respect of capital expenditure orotherwise) which is of a long term, unusual or onerous nature, or which involvesor could involve an obligation of a nature or magnitude which is, in any suchcase, material in the context of the JS Group or which is or is likely to berestrictive on the business of any member of the Wider JS Group or the WiderWarner Estate Group; (vii) entered into or varied the terms of any service agreementwith any director or senior executive of the Wider JS Group; (viii) proposed, agreed to provide or modified in any materialrespect the terms of any share option scheme, incentive scheme, or other benefitrelating to the employment or termination of employment of any employee of theWider JS Group; (ix) the trustees of the relevant pension scheme having, madeor agreed or consented to any significant change to the terms of the trust deedsconstituting the pension schemes established for its directors, employees ortheir dependants or the benefits which accrue, or to the pensions which arepayable, thereunder, or to the basis on which qualification for, or accrual orentitlement to, such benefits or pensions are calculated or determined or to thebasis on which the liabilities (including pensions) of such pension schemes arefunded or valued, or agreed or consented to any change to the trustees ortrustee directors, or carried out any act which may lead to the commencement ofthe winding up of the scheme or which could give rise directly or indirectly toa liability arising out of the operation of sections 38 to 56 inclusive of thePensions Act 2004 in relation to the scheme; (x) implemented or effected, or authorised, proposed orannounced its intention to implement or effect, any composition, assignment,reconstruction, amalgamation, commitment, scheme or other transaction orarrangement (other than the Offer); (xi) purchased, redeemed or repaid or announced any proposal topurchase, redeem or repay any of its own shares or other securities or reducedor, save in respect of the matters mentioned in sub-paragraph (i) above, madeany other change to any part of its share capital to an extent which (other thanin the case of JS) is material in the context of the JS Group; (xii) waived or compromised any claim otherwise than in theordinary course of business; (xiii) made any alteration to its memorandum or articles ofassociation or other incorporation documents; (xiv) (other than in respect of a member which is dormant and wassolvent at the relevant time) taken or proposed any steps, corporate action orhad any legal proceedings instituted or threatened against it in relation to thesuspension of payments, a moratorium of any indebtedness, its winding-up(voluntary or otherwise), dissolution, reorganisation or for the appointment ofany administrator, receiver, manager, administrative receiver, trustee orsimilar officer of all or any of its assets or revenues or any analogousproceedings in any jurisdiction or appointed any analogous person in anyjurisdiction or had any such person appointed; (xv) been unable, or admitted in writing that it is unable, topay its debts or commenced negotiations with one or more of its creditors with aview to rescheduling or restructuring any of its indebtedness, or having stoppedor suspended (or threatened to stop or suspend) payment of its debts generallyor ceased or threatened to cease carrying on all or a substantial part of itsbusiness; or (xvi) entered into any contract, commitment, agreement orarrangement otherwise than in the ordinary course of business or passed anyresolution or made any offer (which remains open for acceptance) with respect toor announced an intention to, or to propose to, effect any of the transactions,matters or events referred to in this condition; (i) since 24 March 2006, and except as fairly disclosed in theInterim Results of JS: (i) there having been no adverse change in the business,assets, financial or trading position or profits or prospects or operationalperformance of any member of the Wider JS Group; (ii) no litigation, arbitration proceedings, prosecution orother legal proceedings having been threatened, announced or instituted by oragainst or remaining outstanding against any member of the Wider JS Group or towhich any member of the Wider JS Group is or may become a party (whether asclaimant or defendant or otherwise) and no enquiry or investigation by, orcomplaint or reference to, any Third Party against or in respect of any memberof the Wider JS Group having been threatened, announced or instituted by oragainst, or remaining outstanding in respect of, any member of the Wider JSGroup; (iii) no contingent or other liability having arisen or becomeknown to Warner Estate which might be likely adversely to affect the business,assets, financial or trading position or profits or prospects of any member ofthe Wider JS Group; and (iv) no steps having been taken and no omissions having beenmade which are likely to result in the withdrawal, cancellation, termination ormodification of any licence held by any member of the Wider JS Group, which isnecessary for the proper carrying on of its business and the withdrawal,cancellation, termination or modification of which is material and likelyadversely to affect the JS Group taken as a whole; (j) since 24 March 2006, and except as fairly disclosed in theInterim Results of JS, Warner Estate not having discovered: (i) that any financial, business or other informationconcerning the Wider JS Group publicly disclosed by the Wider JS Group ordisclosed to any member of the Wider Warner Estate Group at any time by or onbehalf of any member of the Wider JS Group is misleading, contains amisrepresentation of fact or omits to state a fact necessary to make thatinformation not misleading and such information is material, or the inaccuracyin such information would have a material effect, in the context of the JSGroup; (ii) that any member of the Wider JS Group is subject to anyliability, contingent or otherwise, which is not disclosed in the Annual Reportand Accounts or Interim Results of JS, and which is material in the context ofthe JS Group; or (iii) any information which affects the import of anyinformation disclosed to Warner Estate at any time by or on behalf of any memberof the Wider JS Group; (k) except as disclosed in writing to Warner Estate prior to 26January 2007 Warner Estate not having discovered: (i) that any past or present member of the Wider JS Grouphas not complied with all applicable legislation or regulations of anyjurisdiction or any Authorisations relating to the storage, carriage, disposal,discharge, spillage, leak or emission of any waste or hazardous substance or anysubstance likely to impair the environment (including property) or harm humanhealth or otherwise relating to environmental matters or the health and safetyof humans, which non compliance would be likely to give rise to any materialliability including any penalty for non compliance (whether actual orcontingent) on the part of any member of the Wider JS Group; or (ii) that there has been a disposal, discharge, spillage,accumulation, leak, emission, release or the migration, production, supply,treatment, storage, transport or use of any waste or hazardous substance or anysubstance likely to impair the environment (including any property) or harmhuman health which (whether or not giving rise to non compliance with any law orregulation) would be likely to give rise to any material liability (whetheractual or contingent) on the part of any member of the Wider JS Group; or (iii) that there is or is likely to be any liability (whetheractual or contingent) or requirement to make good, remediate, repair, re instateor clean up any property or asset currently or previously owned, occupied ormade use of by any past or present member of the Wider JS Group (or on itsbehalf), or in which any such member may have or previously have had or bedeemed to have had an interest, under any environmental legislation, common law,regulation, notice, circular, Authorisation, other legally binding requirementor order of any Third Party or to contribute to the cost thereof or associatedtherewith or indemnify any person in relation thereto in any such case to anextent which is material in the context of the JS Group; or (iv) that circumstances exist (whether as a result of themaking of the Offer or otherwise): (1) which would be likely to lead to any Third Party instituting; or (2) whereby any member of the Wider Warner Estate Group or any presentor past member of the Wider JS Group would be likely to be required toinstitute, an environmental audit or take any other steps which would in any such case belikely to result in any liability (whether actual or contingent) to improve,modify existing or install new plant, machinery or equipment or carry outchanges in the processes currently carried out or make good, remediate, repair,re instate or clean up any land or other asset currently or previously owned,occupied or made use of by any past or present member of the Wider JS Group (oron its behalf) or by any person for which a member of the Wider JS Group is orhas been responsible, or in which any such member may have or previously havehad or be deemed to have had an interest which is material in the context of theJS Group; or (v) that circumstances exist whereby a person or class ofpersons would be likely to have any claim or claims in respect of any product orprocess of manufacture or materials used therein currently or previouslymanufactured, sold or carried out by any past or present member of the Wider JSGroup which claim or claims would be likely, materially and adversely, to affectany member of the Wider JS Group and which is material in the context of the JSGroup. Warner Estate reserves the right to waive in whole or in part all or any ofconditions (b) to (k) inclusive. Conditions (b) to (k) inclusive must besatisfied as at, or waived (where possible) on or before, the 21st day after thelater of the first closing date of the Offer and the date on which condition (a)is fulfilled (or, in each case, such later date as the Panel may agree). WarnerEstate shall be under no obligation to waive or determine to be, or treat as,fulfilled, any of conditions (b) to (k) inclusive by a date earlier than thedate specified above for the fulfilment thereof notwithstanding that the otherconditions of the Offer may at such earlier date have been waived or fulfilledand that there are at such earlier date no circumstances indicating that any ofsuch conditions may not be capable of fulfilment. If Warner Estate is required by the Panel to make an offer for JS Shares underthe provisions of Rule 9 of the Takeover Code, Warner Estate may make suchalterations to the terms and conditions of the Offer as are necessary to complywith the provisions of that Rule. 2. Further Terms of the OfferThe Offer will lapse if it is referred to the UK Competition Commission beforethe later of 1.00 pm (London time) on the first closing date of the Offer andthe date on which the Offer becomes or is declared unconditional as toacceptances. If the Offer so lapses, the Offer will cease to be capable offurther acceptance and persons accepting the Offer and Warner Estate will ceaseto be bound by forms of acceptance submitted on or before the time when theOffer lapses. APPENDIX II DETAILS OF IRREVOCABLE UNDERTAKINGS 1. Irrevocable Undertakings from JS Directors and certain personsconnected with the JS Directors (a) Irrevocable undertakings to accept (or procure acceptance of the Offer) havebeen given in respect of the following numbers of JS Shares which are legallyand/or beneficially owned by the JS Directors or certain persons connected tothe JS Directors: Name Number of JS Shares % of JS issued share capital Stephen Mulliner (see note 1) 705,892 4.34%Anthony Roscoe (see note 2) 598,662 3.68%Susan Weeks 637,450 3.91%Simon Speirs (see note 3) 193,950 1.19%Anthony Rutherford 69,931 0.43%Kamla Gardner (see note 4) 15,821 0.10% Total 2,221,706 13.64% Notes: 1. Of the 705,892 JS Shares: (i) 158,200 are legally and beneficiallyowned by Stephen Mulliner's wife, Sarah Mulliner, who has given an irrevocableundertaking in respect of these JS Shares, (ii) 342,000 are held by BarclayshareNominees Limited and 203,692 are held by Giltspur Nominees Limited Buns Acct ineach case pursuant to Stephen Mulliner's self-invested pension plan and (iii)2,000 are legally and beneficially owned by Stephen Mulliner. Stephen Mullinerhas given an irrevocable undertaking to accept the Offer in respect of theshares legally and beneficially owned by him and has irrevocably undertaken touse all reasonable endeavours to procure the acceptance of the Offer in respectof the JS Shares held by Barclayshare Nominees Limited and Giltspur NomineesLimited Buns Acct on his behalf. 2. Of the 598,662 JS Shares: (i) 35,000 JS Shares are held by BarclayshareNominees Limited pursuant to Anthony Roscoe's self-invested pension plan and(ii) 563,662 are legally and beneficially owned by Anthony Roscoe. AnthonyRoscoe has given an irrevocable undertaking to accept the Offer in respect ofthe JS Shares legally and beneficially owned by him and has irrevocablyundertaken to use all reasonable endeavours to procure the acceptance of theOffer in respect of the JS Shares held by Barclayshare Nominees Limited on hisbehalf. 3. The 193,950 JS Shares are held in the name of R C Greig NomineesLimited on behalf of: (i) in respect of 2,000 JS Shares, Simon Speirs; (ii) inrespect of 184,200 JS Shares on behalf of Simon Speirs and Margaret Speirs; and(iii) in respect of 7,750 JS Shares on behalf of Margaret Speirs. 4. Of the 15,821 JS Shares, 14,821 are legally and beneficially owned byKamla Gardner. Of the remaining 1,000 JS Shares: (i) 500 are held by KamlaGardner on behalf of Natasha Sahonte, and (ii) 500 are held by Kamla Gardner onbehalf of Ella Sahonte. (b) The irrevocable undertakings referred to in paragraph 1(a) above will onlycease to be binding on the earlier of the following occurrences: - the Offer Document is not posted within 28 days (or such longer period as thePanel may agree) after the date of this Announcement; and - the Offer closes, lapses or is withdrawn.2. Irrevocable Undertakings from persons connected with or related to the JamesSmith FamilyThe following persons connected with or related to the James Smith family haveirrevocably undertaken to accept the Offer in respect of, in aggregate,2,249,180 JS Shares, representing approximately 13.8 per cent. of the issuedshare capital of JS. These undertakings will cease to be binding in thecircumstances described in paragraph 1(b) above and if a Competing Offer is madefor JS at a price which exceeds the price under the terms of the Offer by morethan 10 per cent. unless Warner Estate increases or publicly announces a firmintention to increase its Offer to an amount as is equal to or greater than theprice of the Competing Offer within 5 business days of the Competing Offer beingmade: Name Number of JS Shares % of JS issued share capitalJP Denmee 726,880 4.46%PB Smith (see note 5) 1,000,000 6.14%Colonel J Speirs (see note 6) 350,300 2.15%Sheila Speirs 172,000 1.06% Total 2,249,180 13.81% Notes: 5. These JS Shares are held by Rene Nominees (IOM) Limited on behalf of PBSmith, the beneficial owner. 6. These JS Shares are held by Giltspur Nominees Limited Buns Acct onbehalf of Colonel J Speirs, the beneficial owner. 3. Irrevocable Undertaking from Trefick LimitedTrefick Limited has irrevocably undertaken to accept the Offer in respect of4,670,285 JS Shares, representing approximately 28.7 per cent. of the issuedshare capital of JS. This undertaking will cease to be binding in thecircumstances described in paragraph 1(b) above and if a third party publishesan announcement in accordance with Rule 2.9 of the Takeover Code, prior to thedate on which Trefick accepts the Offer, of a firm intention to make a takeoveroffer as defined in section 428(1) of the Companies Act (which is not subject toany pre-conditions) for JS (whether to be implemented by an offer or scheme ofarrangement or otherwise) at a price which exceeds the price under the terms ofthe Offer by more than 10 per cent. APPENDIX III BASES AND SOURCES OF INFORMATION (a) Unless otherwise stated, financial information relating to Warner Estate hasbeen extracted from Warner Estate's unaudited interim results for the six monthsended 30 September 2006 and Warner Estate's audited report and accounts for theyear ended 31 March 2006. (b) Unless otherwise stated, financial information relating to JS has beenextracted from JS' unaudited interim results for the six months ended 24September 2006, JS' audited report and accounts for the year ended 24 March 2006and JS' audited report and accounts for the year ended 24 March 1998. (c) The information relating to JS, other than the financial information, hasbeen provided by the JS Directors. (d) The maximum value placed by the Offer on the entire issued ordinary sharecapital of JS, and other statements made in this Announcement by reference tothe issued share capital of JS, are based upon 16,283,350 JS Shares being inissue on 25 January 2007. (e) The calculations in paragraph 15 by reference to the issued share capital ofWarner Estate, are based upon 53,502,508 Warner Estate Shares being in issue on25 January 2007 and Trefick Limited and its associates holding, in aggregate,7,356,223 Warner Estate Shares on 20 June 2006. (f) The International Securities Identification Number for JS Shares isGB0008178138. APPENDIX IV DEFINITIONS The following definitions apply throughout this Announcement, unless the contextrequires otherwise: "Admission" both Admission to Listing and Admission to Trading and a reference to Admission becoming "effective" is to be construed in accordance with paragraph 3.2.7(G) of the Listing Rules and paragraph 2.1 of the Standards (as applicable) "Admission to Admission to the Official List of the UKLAListing" "Admission to Admission to trading on the London Stock ExchangeTrading" "AIM" the market of that name which is operated by the London Stock Exchange "AIM Rules" the rules applicable to companies whose shares are traded on AIM published by the London Stock Exchange as amended from time to time "Announcement" this document "Authorisations" authorisations, orders, grants, recognitions, confirmations, consents, licences, clearances, certificates, permissions or approvals "Bridgewell" Bridgewell Limited, financial adviser to Warner Estate "Business Day" a day, not being a public holiday, Saturday or Sunday, on which clearing banks in London are open for normal business "Canada" Canada, its provinces and territories and all areas subject to its jurisdiction and any political sub-division thereof "certificated" or in relation to a share or other security, a share or other"certificated security title to which is recorded in the relevant registerform" of the share or other security as being held in certificated form (that is, not in CREST) "Closing Price" the closing middle market quotation of a JS Share as derived from the AIM appendix to the Daily Official List "Companies Act" the Companies Act 1985, as amended "Competing Offer" a general cash offer (which is not subject to any pre-conditions) to acquire the entire issued and to be issued share capital of JS (howsoever to be implemented) made or to be made by a third party "CREST" the relevant system (as defined in the CREST Regulations) in respect of which CRESTCo is the Operator (as defined in the CREST Regulations) "CRESTCo" CRESTCo Limited "CREST the Uncertificated Securities Regulations 2001 (SI 2001/Regulations" 3755), as amended "Daily Official the Daily Official List published by the London StockList" Exchange "Extraordinary the extraordinary general meeting of Warner Estate to beGeneral Meeting" convened to approve the Ordinary Resolution "Form of the Form of Acceptance, Authority and Election for use by JSAcceptance" Shareholders which will accompany the Offer Document "Interim Results" the interim results of JS for the six months ended 24 September 2006 "Japan" Japan, its possessions and territories and all areas subject to its jurisdiction and any political sub-division thereof "JS" JS Real Estate Plc "JS Board" the board of directors of JS "JS Director" a director of JS "JS Group" JS and its subsidiary undertakings and where the context permits, each of them "JS Share(s)" the existing unconditionally allotted or issued and fully paid ordinary shares of 25 pence each in the capital of JS and any further shares which are unconditionally allotted or issued before the date on which the Offer closes (or such earlier date or dates, not being earlier than the date on which the Offer becomes unconditional as to acceptances or, if later, the first closing date of the Offer, as Warner Estate may decide) but excluding in both cases any such shares held or which become held in treasury "JS Shareholders" holders of JS Shares "LIBOR" the rate per annum which is the offered rate for three month sterling deposits of £1 million on the relevant page of the Telerate screen which displays British Bankers Association interest settlement rates for deposits in sterling or, if no such rate is available, the rate per annum which is the arithmetic mean (rounded down, if necessary, to four decimal places) of the respective rates appearing on the "LIBP" page of the Reuters Monitor Money Rate Service screen for three month sterling deposits of £1 million at or about 11.00 a.m. on the first business day of the relevant Interest Period. If a rate of interest cannot for whatever reason be established for an Interest Period in accordance with the foregoing provisions of this sub-paragraph, the rate of interest on the Loan Notes for such Interest Period shall be calculated by reference to such rate as Warner Estate shall determine on the basis of quotations made for three month sterling deposits of £1 million in such inter-bank market or markets as Warner Estate may select on the first business day of the relevant Interest Period "Listing Rules" the listing rules made by the FSA under section 73A of the Financial Services and Markets Act 2000 "Loan Note the alternative under the Offer whereby JS ShareholdersAlternative" (other than US Persons and other shareholders in Restricted Jurisdictions) who validly accept the Offer may elect to receive Loan Notes instead of all or part of the cash consideration to which they would otherwise have been entitled under the Offer "Loan Notes" the variable rate unsecured loan notes 2012 of Warner Estate to be issued pursuant to the Loan Note Alternative "Loan Note any jurisdiction in which an offer of Loan Notes wouldRestricted constitute a violation of relevant laws or requireJurisdiction" registration of the Loan Notes "London Stock London Stock Exchange plc or its successorExchange" "LSE Closing the closing middle market quotation of a JS Share as derivedPrice" from the website of the London Stock Exchange after 5.00 pm London time "Offer" the recommended cash offer to be made by Warner Estate to acquire all the JS Shares on the terms and subject to the conditions to be set out in the Offer Document and the Form of Acceptance including, where the context so permits, the Loan Note Alternative and, where the context so requires, any subsequent revision, variation, renewal or extension of such offer and includes any election available in connection with it "Offer Document" the formal offer document to be sent to JS Shareholders setting out the terms and conditions of the Offer "Offer Value" the aggregate cash value of the total consideration payable by Warner Estate to JS Shareholders pursuant to the terms of the Offer "Ordinary the ordinary resolution to be proposed at the ExtraordinaryResolution" General Meeting in accordance with the requirements of the Listing Rules to approve the related party transaction between Warner Estate and Trefick Limited as referred to in paragraph 15 of this Announcement "Oriel Securities" Oriel Securities Limited, financial adviser to JS "Panel" the Panel on Takeovers and Mergers "REIT" real estate investment trust "relevant as the context requires, Warner Estate Shares and JS Shares,securities" other JS share capital and any securities convertible into, or exchangeable for, and rights to subscribe for, any of the foregoing "Restricted any jurisdiction where local laws or regulations may resultJurisdiction" in a significant risk of civil, regulatory or criminal exposure or prosecution if information concerning the Offer is sent or made available to JS Shareholders in that jurisdiction "Standards" admission and disclosure standards made by the London Stock Exchange from time to time "subsidiary", shall be construed in accordance with the Companies Act (but"subsidiary for this purpose ignoring paragraph 20(1)(b) of Schedule 4Aundertaking", of the Companies Act)"associatedundertaking" or"undertaking" "Takeover Code" The City Code on Takeovers and Mergers "UKLA" the Financial Services Authority acting in its capacity as the competent authority for the purposes of Part VI of the Financial Services and Markets Act 2000 "uncertificated" a share or other security title to which is recorded in theor "in relevant register of the share or security as being held inuncertificated uncertificated form, in CREST, and title to which, by virtueform" of the CREST Regulations may be transferred by means of CREST "United Kingdom" the United Kingdom of Great Britain and Northern Ireland andor the "UK" its dependent territories "United States" the United States of America, its possessions and territories, all areas subject to its jurisdiction or any sub-division thereof, any state of the United States of America and the District of Columbia "US Person" a US person as defined in Regulation S under the US Securities Act "US Securities the US Securities Act of 1933, as amended and the rules andAct" regulations promulgated thereunder "Warner Estate" Warner Estate Holdings PLC "Warner Estate the board of directors of Warner EstateBoard" "Warner Estate a director of Warner EstateDirector" "Warner Estate Warner Estate and its subsidiary undertakings and where theGroup" context permits, each of them "Warner Estate the existing Warner Estate ordinary shares of 5p each in theShares" capital of Warner Estate "Warner Estate holders of Warner Estate SharesShareholders" "Wider JS Group" JS and associated undertakings and any other body corporate, partnership, joint venture or person in which JS and such undertakings (aggregating their interests) have an interest of more than 20 per cent. of the voting or equity capital or the equivalent"Wider Warner Warner Estate Group and associated undertakings and any otherEstate Group" body corporate, partnership, joint venture or person in which Warner Estate and such undertakings (aggregating their interests) have an interest of more than 20 per cent. of the voting or equity capital or the equivalent All times referred to are London time unless otherwise stated. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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