8th May 2006 07:00
Solitaire Real Estate Holding Ltd05 May 2006 Part 1 Not for release, publication or distribution in or into the United States,Canada, Australia or Japan 5 May 2006 Recommended cash offer by Corporate Synergy Plc on behalf of Solitaire Real Estate Holdings Limited to acquire Solitaire Group plc Summary • The Boards of Solitaire Group plc (Solitaire) andSolitaire Real Estate Holdings Limited (SREH) are pleased to announce that theyhave reached agreement on the terms of a recommended cash offer, to be made byCorporate Synergy Plc on behalf of SREH, for the entire issued and to be issuedshare capital of Solitaire. • The Offer will be 850 pence in cash for each Solitaire Share. • The Offer values the entire issued share capital ofSolitaire at approximately £42.5 million. • The Offer represents a premium of approximately 23 percent. to the Closing Price of 690 pence per Solitaire Share on 28 April 2006,being the last business day prior to the commencement of the Offer Period, apremium of approximately 48 per cent. to the average Closing Price of 576 penceper Solitaire Share over the six months prior to the commencement of the OfferPeriod and a premium of approximately 13 per cent. to the Closing Price of 755pence per Solitaire Share on 4 May 2006 (being the last business day prior tothis announcement). • The Solitaire Directors, who have been so advised by KBCPeel Hunt, consider the terms of the Offer to be fair and reasonable so far asSolitaire Shareholders are concerned. In providing its advice to the SolitaireBoard, KBC Peel Hunt has taken into account the commercial assessments of theSolitaire Directors. • SREH is a company specifically formed for the purposes ofmaking the Offer and is ultimately owned by a company controlled by InvestecTrust (Guernsey) Limited as trustees of the Tchenguiz Family Trust (the Trust). • The Trust is also the ultimate owner of Consensus BusinessGroup, a private limited company which, is responsible for managing a number ofresidential and commercial property interests, including properties withapproximately 150,000 ground rent leases situated throughout the United Kingdomand a commercial property portfolio with gross assets of approximately £4billion. The acquisition of Solitaire, with its expertise in propertymanagement, will compliment the existing activities of the Trust and Consensus. • SREH has received irrevocable undertakings to accept theOffer from directors of Solitaire in respect of 2,663,513 Solitaire Sharesrepresenting 53 per cent. of the issue shared capital of Solitaire. ElsinaLimited, a company connected with SREH, owns 500,000 Solitaire Shares.Accordingly, SREH and persons connected with SREH now own or have receivedirrevocable undertakings to accept (or procure the acceptance of) the Offer inrespect of a total of 3,163,513 Solitaire Shares, representing approximately 63per cent of the existing share capital of Solitaire. Graham Shapiro, Joint Managing Director of Solitaire, comments: "Since 1997 when Solitaire was floated on AIM we have developed the businessinto an excellent property management company. However, the Offer represents anopportunity for Solitaire shareholders to realise their investment for cash at asubstantial premium to the market valuation of the company prior to thecommencement of the Offer Period and offers an excellent return for investorswho have invested in the company." Vincent Tchenguiz, Chairman and CEO of Consensus said: "I am delighted to have reached agreement with the board of Solitaire on thisrecommended offer and look forward to working with the management and employeesof Solitaire in building upon its excellent reputation and maximising thepotential for the continued development of its existing operations alongsideConsensus." This summary should be read in conjunction with the full text of thisannouncement. Appendix III to this announcement contains definitions of certainexpressions used in this summary and in this announcement. The full terms and conditions of the Offer will be set out in the Offer Documentand Form of Acceptance which will accompany it. In deciding whether or not toaccept the Offer, Solitaire Shareholders must rely solely on the terms andconditions of the Offer and the information contained, and the proceduresdescribed, in the Offer Document and the Form of Acceptance. It is anticipatedthat the Offer Document will be despatched to Solitaire Shareholders as soon aspracticable but in any event within 28 days of this announcement. Enquiries Corporate Synergy Plc (Financial adviser to SREH) 020 7448 4400 Rhod Cruwys David Seal KBC Peel Hunt Ltd (Financial adviser to Solitaire) 020 7418 8900 James Britton David Anderson Corporate Synergy Plc, which is authorised and regulated in the United Kingdomby The Financial Services Authority, is acting for SREH and no one else inconnection with the Offer and will not be responsible to anyone other than SREHfor providing the protections afforded to customers of Corporate Synergy Plc norfor providing advice in relation to the Offer or any other matter referred toherein. KBC Peel Hunt Ltd, which is authorised and regulated in the United Kingdom byThe Financial Services Authority is acting exclusively for Solitaire and isacting for no one else in connection with the Offer and will not be responsibleto anyone other than Solitaire for providing the protections afforded tocustomers of KBC Peel Hunt Ltd or for providing advice in relation to the Offeror any other matter referred to herein. The availability of the Offer to persons not resident in the United Kingdom maybe affected by the laws of the relevant jurisdiction. Such persons should informthemselves about and observe any applicable requirements of those jurisdictions. The Offer will not be made, directly or indirectly, in or into the UnitedStates, Canada, Australia or Japan and, subject to certain exceptions, the Offerwill not be capable of acceptance in or from the United States, Canada,Australia or Japan. Custodians, nominees and trustees should observe therestrictions and must not send or distribute this announcement in, into or fromthe United States, Canada, Australia or Japan. This announcement does not constitute an offer or an invitation to purchase orsubscribe for any securities or the solicitation of an offer to purchase anysecurities, pursuant to the Offer or otherwise. Responsibility The directors of SREH accept responsibility for all the information contained inthis announcement, other than that relating to Solitaire, the Solitaire Groupand the directors of Solitaire and members of their immediate families andconnected persons for which the directors of Solitaire are responsible, and thatrelating to the recommendation of the Offer. To the best of their knowledge andbelief (having taken all reasonable care to ensure that such is the case), theinformation contained in this announcement for which they accept responsibilityis in accordance with the facts and does not omit anything likely to affect theimport of such information. The directors of Solitaire accept responsibility for the information containedin this announcement relating to Solitaire, the Solitaire Group and thedirectors of Solitaire and members of their immediate families and connectedpersons. To the best of their knowledge and belief (having taken all reasonablecare to ensure that such is the case), the information in this announcement forwhich they are responsible is in accordance with the facts and does not omitanything likely to affect the import of such information. Dealing Disclosure Requirements The Panel wishes to draw attention to certain UK dealing disclosure requirementsfollowing the announcement of the Offer. An "Offer Period" is deemed to commenceat the time when an announcement is made of a proposed offer, with or withoutterms. Accordingly, the offer period began on 2 May 2006. Under the provisions of Rule 8.3 of the City Code on Takeovers and Mergers (the"Code"), if any person is, or becomes, "interested" (directly or indirectly) in1% or more of any class of "relevant securities" of Solitaire Group plc, all"dealings" in any "relevant securities" of that company (including by means ofan option in respect of, or a derivative referenced to, any such "relevantsecurities") must be publicly disclosed by no later than 3.30 pm (London time)on the London business day following the date of the relevant transaction. Thisrequirement will continue until the date on which the offer becomes, or isdeclared, unconditional as to acceptances, lapses or is otherwise withdrawn oron which the "offer period" otherwise ends. If two or more persons act togetherpursuant to an agreement or understanding, whether formal or informal, toacquire an "interest" in "relevant securities" of Solitaire Group plc, they willbe deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevantsecurities" of Solitaire Group plc by SREH/any member of SREH's group orSolitaire Group plc, or by any of their respective "associates", must bedisclosed by no later than 12.00 noon (London time) on the London business dayfollowing 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 Takeover Panel's website atwww.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Code, which can also be found on thePanel's website. If you are in any doubt as to whether or not you are requiredto disclose a "dealing" under Rule 8, you should consult the Panel. Part II Not for release, publication or distribution in or into the United States,Canada, Australia or Japan Recommended cash offer by Corporate Synergy Plc on behalf of Solitaire Real Estate Holdings Limited to acquire Solitaire Group plc Introduction The boards of SREH and Solitaire are pleased to announce that they have reachedagreement on the terms of a recommended cash offer, to be made by CorporateSynergy Plc on behalf of SREH, to acquire the entire issued and to be issuedshare capital of Solitaire. SREH is a company specifically formed for thepurpose of making the Offer and is ultimately owned by Investec Trust (Guernsey)Limited as trustees of the Tchenguiz Family Trust. The Offer The Offer will be 850 pence in cash for each Solitaire Share. The Offer valuesthe entire issued share capital of Solitaire at approximately £42.5 million. The Offer represents: • a premium of approximately 23 per cent. to the ClosingPrice of 690 pence per Solitaire Share on 28 April 2006, being the last businessday prior to the commencement of the Offer Period; • a premium of approximately 48 per cent. to the averageClosing Price of 576 pence per Solitaire Share over the six months prior to thecommencement of the Offer Period; and • a premium of approximately 13 per cent. to the ClosingPrice of 755 pence per Solitaire Share on 4 May 2006 (being the last businessday prior to this announcement). Corporate Synergy Plc is acting as financial adviser to SREH. The Offer, which will be made by Corporate Synergy Plc on behalf of SREH on theterms and subject to the conditions and further terms set out below and inAppendix I to this announcement, and subject to the conditions and further termsto be set out in the Offer Document and in the accompanying Form of Acceptance,will be made on the following basis: for each Solitaire Share 850 pence in cash The Offer will extend, subject to the terms and conditions to be set out in theOffer Document and the Form of Acceptance, to all Solitaire Shares which areunconditionally allotted or issued on the date on which the Offer is made and toany further Solitaire Shares unconditionally allotted or issued while the Offerremains open for acceptance (or such earlier date as SREH may, subject to theCity Code, decide). The Solitaire Shares will be acquired by SREH, pursuant to the Offer, fully paidand free from all liens, equities, charges, encumbrances, rights of pre-emptionand other third party rights and interests of any nature whatsoever and togetherwith all of the rights now and hereafter attaching thereto, including the rightto receive and retain in full all dividends and other distributions declared,made or paid after the date of this announcement. Recommendation of the Offer The Solitaire Directors, who have been so advised by KBC Peel Hunt, consider theterms of the Offer to be fair and reasonable so far as Solitaire Shareholdersare concerned. In providing its advice to the Solitaire Board, KBC Peel Hunt hastaken into account the commercial assessments of the Solitaire Directors. Accordingly, the Solitaire Directors unanimously recommend that SolitaireShareholders accept the Offer, as they have irrevocably undertaken to do, orprocure to do, in respect of their own beneficial shareholdings amounting to, inaggregate, 2,663,513 Solitaire Shares, representing 53 per cent. of the existingissued share capital of Solitaire. Interests in Solitaire Shares and irrevocable undertakings to accept the Offer SREH has received irrevocable undertakings to accept the Offer from directors ofSolitaire in respect of 2,663,513 Solitaire Shares, representing 53 per cent. ofthe issued share capital of Solitaire. Elsina Limited, a company connected with SREH, owns 500,000 Solitaire Shares. Inaddition Mr Steven Coe, a director of Investec Trust (Guernsey) Limited, thetrustee of the Tchenguiz Family Trust, is interested in 700 Solitaire Shares. For the purposes of the City Code, Elsina and Mr Coe are presumed to be actingin concert with SREH. Accordingly, SREH and persons acting in concert with SREH now own or havereceived irrevocable undertakings to accept (or procure the acceptance of) theOffer in respect of a total of 3,163,513 Solitaire Shares, representingapproximately 63 per cent of the existing share capital of Solitaire. Information on Solitaire Solitaire is a specialist property manager of new-build residential propertiesin the UK. Since its flotation on AIM in October 1997, Solitaire has grown bothorganically, adding further freehold reversions to its portfolio, and throughacquisition, purchasing similar businesses with their own incumbent propertymanagement portfolios, whilst diversifying its business model with relatedproperty services. For the year ended 31 December 2005, Solitaire reported consolidated revenues of£10.6 million and trading profit (before exceptional items) of £3 million andhad net assets of £19.5 million. Information on SREH and reasons for the Offer SREH, a private limited company registered in England and Wales, wasincorporated on 4 May 2006. The company was incorporated specifically for thepurpose of acquiring Solitaire and holding Solitaire in the future and has nottraded since incorporation except for the purpose of making the Offer. The directors of SREH are Sidney Khadhouri and Christopher McGill. SREH is owned by Finistere Limited as nominee for Investec Trust (Guernsey)Limited, in its capacity as the trustee of the Tchenguiz Family Trust. The directors of SREH recognise the success of the strategy that the currentmanagement of Solitaire has pursued, and they intend to continue to strengthenthe operations in order to reinforce and further develop the position ofSolitaire as a specialist property manager. The Tchenguiz Family Trust is also the ultimate owner of Consensus BusinessGroup, a private limited company which, is responsible for a number ofresidential and commercial property interests, including properties withapproximately 150,000 ground rent leases situated throughout the United Kingdomand a commercial property portfolio with gross assets of approximately £4billion. The acquisition of Solitaire, with its expertise in propertymanagement, will compliment the existing activities of the Trust and Consensus. There are no agreements or arrangements to which SREH is a party which relatesto the circumstances in which it may or may not invoke or seek to invoke acondition of the Offer. Financing of the Offer The Offer will be financed by debt facilities provided or procured by VincentTchenguiz. Management and employees of Solitaire The board of SREH has given assurances to the directors of Solitaire that, inthe event of the Offer becoming or being declared unconditional in all respects,the existing employment rights, including pension rights, of all employees ofthe Solitaire Group will be fully safeguarded. Solitaire Share Options The Offer will extend to all Solitaire Shares issued or unconditionally allottedfully paid (or credited as fully paid) whilst the Offer remains open foracceptance (or prior to such earlier date as SREH may, subject to the provisionsof the City Code, determine, not being earlier than the date on which the Offerbecomes or is declared unconditional in all respects or, if later, the firstclosing date of the Offer) pursuant to the exercise of share options or thevesting of share awards granted under the Solitaire Share Option Scheme orotherwise. Appropriate proposals will be made by SREH to the holders of optionsunder the Solitaire Share Option Scheme or otherwise. Disclosure of interests in Solitaire Save as described in this announcement neither SREH nor, so far as the directorsof Solitaire are aware, any other person acting in concert with SREH for thepurposes of the Offer, has any arrangement in relation to ordinary shares inSolitaire or any securities convertible or exchangeable into ordinary shares inSolitaire or options (including trade options) in respect of, or derivativesreferenced to, any such shares. For these purposes, "arrangement" includes anyindemnity or option arrangements, or any agreement or understanding, formal orinformal, of whatever nature, relating to ordinary shares in Solitaire which maybe an inducement to deal or refrain from dealing in such shares. Compulsory acquisition of Solitaire Shares, cancellation of admission to AIM andre-registration of Solitaire As soon as it is appropriate to do so, and subject to the Offer becoming orbeing declared unconditional in all respects, SREH intends to procure thatSolitaire applies to the London Stock Exchange for cancellation of the admissionof the Solitaire Shares on the AIM market of the London Stock Exchange. It isanticipated that such cancellation will take effect no earlier than twentybusiness days after the Offer becomes or is declared unconditional in allrespects. The cancellation of the admission of Solitaire's shares willsignificantly reduce the liquidity, marketability and value of any SolitaireShares in respect of which acceptances of the Offer are not submitted. Subject to the Offer becoming or being declared unconditional in all respects,if sufficient acceptances are received under the Offer, SREH intends to applythe provisions of sections 428 to 430F (inclusive) of the Companies Act toacquire compulsorily any outstanding Solitaire Shares to which the Offer relateson the same terms as the Offer. It is also proposed that Solitaire will be re-registered as a private companyunder the relevant provisions of the Companies Act in due course. General The Offer Document, setting out details of the Offer and enclosing the Form ofAcceptance, will be despatched to Solitaire Shareholders and, for informationonly to participants in the Solitaire Share Option Scheme, within twenty eightdays of the date of this announcement unless otherwise agreed with the Panel. This announcement does not constitute an offer to sell or an invitation topurchase or subscribe for any securities. The availability of the Offer topersons not resident in the United Kingdom may be affected by the laws of therelevant jurisdictions. Persons who are not resident in the United Kingdom, orwho are subject to the laws of any jurisdiction other than the United Kingdomshould inform themselves about and observe any applicable requirements of thosejurisdictions. Unless otherwise determined by SREH and as permitted by appropriate law andregulation the Offer will not be made, directly or indirectly, in or intoCanada, Australia or Japan and, subject to certain exceptions, the Offer willnot be capable of acceptance in or from Canada, Australia or Japan. In addition,the Offer will not be made, directly or indirectly in or into or by use of themails or by any means or instrumentality (including without limitation, by meansof telephone, facsimile, telex, internet or other forms of electronictransmission) of interstate or foreign commerce of, or any facilities of anational securities exchange of, or in or into, the United States and, subjectto certain exceptions, the Offer will not be capable of acceptance by any suchuse, means, instrumentality or facilities or from the United States.Accordingly, copies of this announcement and formal documentation relating tothe Offer are not being, and must not be, mailed or otherwise forwarded,distributed or sent in, into or from the United States, Canada, Australia orJapan. Custodians, nominees and trustees should observe these restrictions andmust not send or distribute this announcement in, into or from the UnitedStates, Canada, Australia or Japan. Further details in relation to overseas Solitaire Shareholders will be containedin the Offer Document. Corporate Synergy Plc, which is authorised and regulated in the United Kingdomby the Financial Services Authority, is acting for SREH and no one else inconnection with the Offer and will not be responsible to anyone other than SREHfor providing the protections afforded to customers of Corporate Synergy Plc norfor providing advice in relation to the Offer or any other matter referred toherein. KBC Peel Hunt Ltd, which is authorised and regulated in the United Kingdom bythe Financial Services Authority, is acting exclusively for Solitaire and isacting for no one else in connection with the Offer and will not be responsibleto anyone other than Solitaire for providing the protections afforded tocustomers of KBC Peel Hunt Ltd or for providing advice in relation to the Offeror any other matter referred to herein. Appendix I to this announcement contains a summary of the conditions and certainfurther terms of the Offer. Appendix II to this announcement contains furtherdetails of the bases and sources of the financial information set out in thisannouncement and Appendix III contains definitions of certain expressions usedin this announcement. Enquiries Corporate Synergy Plc (Financial adviser to SREH) 020 7448 4400 Rhod Cruwys David Seal KBC Peel Hunt Ltd (Financial adviser to Solitaire) 020 7418 8900 James Britton David Anderson APPENDIX I Conditions to and certain further terms of the Offer 1. Conditions of the Offer 1.1 The Offer will be subject to the following conditions: 1.1.1 valid acceptances being received (and not, wherepermitted, withdrawn) by not later than 3.00p.m. (London time) on the firstclosing date of the Offer (or such later time(s) and/or date(s) as SREH may,subject to the rules of the City Code, decide) in respect of not less than 90per cent. (or such lower percentage as SREH may decide) in nominal value of theSolitaire Shares to which the Offer relates, provided that this condition willnot be satisfied unless SREH and/or its wholly-owned subsidiaries shall haveacquired or agreed to acquire (whether pursuant to the Offer or otherwise)Solitaire Shares carrying in aggregate more than 50 per cent. of the votingrights then normally exercisable at a general meeting of Solitaire, includingfor this purpose (except to the extent otherwise agreed by the Panel) any suchvoting rights attaching to any Solitaire Shares that are unconditionallyallotted or issued before the Offer becomes or is declared unconditional as toacceptances, whether pursuant to the exercise of any outstanding subscription orconversion rights or otherwise; and for this purpose: (a) the expression "Solitaire Shares to which the Offer relates" shallbe construed in accordance with sections 428 to 430F of the Act; (b) Solitaire Shares which have been unconditionally allotted shall bedeemed to carry the voting rights which they will carry upon being entered inthe register of members of Solitaire; and (c) valid acceptances shall be deemed to have been received in respectof Solitaire Shares which are treated for the purposes of section 429(8) of theAct as having been acquired or contracted to be acquired by SREH by virtue ofacceptances of the Offer; 1.1.2 to the extent that the acquisition of SolitaireShares would constitute a relevant merger within the meaning of Section 23 ofthe Enterprise Act 2002, the Office of Fair Trading indicating, in termsacceptance to SREH, that it is not the intention of the Secretary of State forTrade and Industry or the Office of Fair Trading (whichever is the competentauthority for making a reference to the Competition Commission) to refer theproposed acquisition of Solitaire by SREH, or any matters arising therefrom orrelated thereto, to the Competition Commission; 1.1.3 no Third Party having intervened and there notcontinuing to be outstanding any statute, regulation or order of any Third Partyin each case which would or might reasonably be expected to: (a) make the Offer, its implementation or the acquisition or proposedacquisition by SREH or any member of the Wider SREH Group of any shares or othersecurities in, or control or management of, Solitaire or any member of the WiderSolitaire Group void, illegal or unenforceable in any jurisdiction, or otherwisedirectly or indirectly restrain, prevent, prohibit, restrict or delay the sameor impose additional conditions or obligations with respect to the Offer or suchacquisition, or otherwise impede, challenge or interfere with the Offer or suchacquisition, or require amendment to the terms of the Offer or the acquisitionor proposed acquisition of any Solitaire Shares or the acquisition of control ofSolitaire or any member of the Wider Solitaire Group by SREH; (b) limit or delay the ability of any member of the Wider SREH Groupor any member of the Wider Solitaire Group to acquire or to hold or to exerciseeffectively, directly or indirectly, all or any rights of ownership in respectof shares or other securities in, or to exercise voting or management controlover, any member of the Wider Solitaire Group or any member of the Wider SREHGroup; (c) require, prevent or delay the divestiture or alter the termsenvisaged for any proposed divestiture by any member of the Wider SREH Group ofany shares or other securities in Solitaire or any member of the Wider SolitaireGroup (in any case to an extent which is material in the context of the SREHGroup or the Solitaire Group, as the case may be, taken as a whole); (d) require, prevent or delay the divestiture or alter the termsenvisaged for any proposed divestiture by any member of the Wider SREH Group orby any member of the Wider Solitaire Group of all or any portion of theirrespective businesses, assets or properties or limit the ability of any of themto conduct any of their respective businesses or to own or control any of theirrespective assets or properties or any part thereof (in any case to an extentwhich is material in the context of the SREH Group or the Solitaire Group, asthe case may be, taken as a whole); (e) except pursuant to Part XIIIA of the Act, require any member ofthe Wider SREH Group or of the Wider Solitaire Group to subscribe for oracquire, or to offer to acquire, any shares or other securities (or theequivalent) in any member of either Group owned by any third party (in any caseto an extent which is material in the context of the SREH Group or the SolitaireGroup, as the case may be, taken as a whole); (f) materially limit the ability of any member of the Wider SREHGroup or of the Wider Solitaire Group to conduct or integrate or co-ordinate itsbusiness, or any part of it, with the businesses or any part of the businessesof any other member of the Wider SREH Group or of the Wider Solitaire Group; (g) result in any member of the Wider SREH Group or the WiderSolitaire Group ceasing to be able to carry on business under any name underwhich it presently does so (in any case to an extent which is material in thecontext of the SREH Group or the Solitaire Group, as the case may be, taken as awhole); or (h) otherwise materially adversely affect the business, assets,profits, financial or trading position or prospects of any member of the WiderSREH Group or of the Wider Solitaire Group, and all applicable waiting and other time periods during which any Third Partycould intervene under the laws of any relevant jurisdiction having expired,lapsed or been terminated; 1.1.4 all notifications and filings which are necessary orare reasonably considered appropriate by SREH having been made, all appropriatewaiting and other time periods (including any extensions of such waiting andother time periods) under any applicable legislation or regulation of anyrelevant jurisdiction having expired, lapsed or been terminated (as appropriate)and all statutory or regulatory obligations in any relevant jurisdiction havingbeen complied with in each case in connection with the Offer or the acquisitionor proposed acquisition of any shares or other securities in, or control of,Solitaire or any other member of the Wider Solitaire Group by any member of theWider SREH Group or the carrying on by any member of the Wider Solitaire Groupof its business; 1.1.5 all Authorisations which are necessary or arereasonably considered necessary or appropriate by SREH in any relevantjurisdiction for or in respect of the Offer or the acquisition or proposedacquisition of any shares or other securities in, or control of, Solitaire orany other member of the Wider Solitaire Group by any member of the Wider SREHGroup or the carrying on by any member of the Wider Solitaire Group of itsbusiness having been obtained, in terms and in a form reasonably satisfactory toSREH provided that such Authorisations shall not impose any conditions orrequire the taking or refraining from taking of any action by any member of theWider Solitaire Group or the Wider SREH Group, from all appropriate ThirdParties or from any persons or bodies with whom any member of the WiderSolitaire Group has entered into contractual arrangements, in each case wherethe absence of such Authorisations would have a material adverse effect on theSolitaire Group taken as a whole and all such Authorisations remaining in fullforce and effect and there being no notice or intimation of any intention torevoke, suspect, restrict, modify or not to renew any of the same; 1.1.6 except as Disclosed there being no provision of anyarrangement, agreement, licence, permit, franchise or other instrument to whichany member of the Wider Solitaire Group is a party, or by or to which any suchmember or any of its assets is or are or may be bound, entitled or subject orany circumstance which, in each case as a consequence of the Offer or theacquisition or proposed acquisition of any shares or other securities in, orcontrol of, Solitaire or any other member of the Wider Solitaire Group by anymember of the Wider SREH Group or otherwise, could or might reasonably beexpected to result in: (a) any material amount of monies borrowed by or any other materialindebtedness or liabilities (actual or contingent) of, or any material grantavailable to, any member of the Wider Solitaire Group being or becomingrepayable or capable of being declared repayable immediately or prior to itsstated repayment date or the ability of any member of the Wider Solitaire Groupto borrow monies or incur any indebtedness being withdrawn or inhibited orbecoming capable of being withdrawn; (b) the creation or enforcement of any mortgage, charge or othersecurity interest over the whole or any material part of the business, property,assets or interests of any member of the Wider Solitaire Group or any suchmortgage, charge or other security interest (wherever created, arising or havingarisen) becoming enforceable; (c) any such arrangement, agreement, licence, permit, franchise orinstrument, or the rights, liabilities, obligations or interests of any memberof the Wider Solitaire Group thereunder, being or becoming capable of being,terminated or adversely modified or affected in any material respect or anyadverse action being taken or any onerous obligation or liability arisingthereunder; (d) any material asset or interest of any member of the WiderSolitaire Group or any material asset the use of which is enjoyed by any memberof the Wider Solitaire Group, being or failing to be disposed of or ceasing tobe available to any member of the Wider Solitaire Group or any right arisingunder which any such asset or interest could be required to be disposed of orcould cease to be available to any member of the Wider Solitaire Group otherwisethan in the ordinary course of business; (e) any member of the Wider Solitaire Group ceasing to be able tocarry on business under any name under which it presently does so to an extentwhich is material to the Solitaire Group; (f) the creation or assumption of liabilities (actual or contingent)by any member of the Wider Solitaire Group which liability is material in thecontext of the Solitaire Group taken as a whole; (g) the rights, liabilities, obligations or interests of any member ofthe Wider Solitaire Group under any such arrangement, agreement, licence,permit, franchise or other instrument or the interests or business of any suchmember in or with any other person, firm, company or body (or any arrangement orarrangements relating to any such interests or business) being terminated,adversely modified or affected in any material respect; (h) the financial or trading position or the prospects or the value ofany member of the Wider Solitaire Group being prejudiced or adversely affectedin a manner which is material in the context of the Solitaire Group taken as awhole; or (i) any member of the Wider Solitaire Group being required toacquire or repay any shares in and/or material indebtedness of any member of theWider Solitaire Group owned by or owed to any third party; and, save as Disclosed, no event having occurred which, under any provision ofany such arrangement, agreement, licence, permit or other instrument, couldresult in any of the events or circumstances which are referred to in paragraphs(a) to (i) of this condition 1.1.6; 1.1.7 since 31 December 2005 and except as Disclosed, nomember of the Wider Solitaire Group having: (a) issued or agreed to issue, or authorised the issue of, additionalshares of any class, or securities convertible into or exchangeable for, orrights, warrants or options to subscribe for or acquire, any such shares orconvertible securities other than as between Solitaire and wholly-ownedsubsidiaries of Solitaire and other than any options granted as Disclosed toSREH prior to the date of this Announcement and any shares issued upon theexercise of any options granted under the Solitaire Share Option Scheme (orotherwise); (b) purchased or redeemed or repaid or proposed the purchase,redemption or repayment of any of its own shares or other securities (or theequivalent) or reduced or made any other change to any part of its sharecapital; (c) recommended, declared, paid or made or proposed to recommend,declare, pay or make any bonus issue in respect of shares, dividend or otherdistribution whether payable in cash or otherwise (other than to Solitaire or awholly-owned subsidiary of Solitaire); (d) made or authorised any change in its loan capital; (e) (other than any acquisition or disposal between Solitaire and awholly-owned subsidiary of Solitaire) merger with, demerged or acquired any bodycorporate, partnership or business or acquired or disposed of or (other than inthe ordinary course of business) transferred, mortgaged or charged or createdany security interest over any material assets or any right, title or interestin any material assets (including shares in any undertaking and tradeinvestments) or authorised, proposed or announced the same; (f) issued or authorised the issue of, or made any change in or to,any debentures or (other than transactions between any wholly-owned member ofthe Solitaire Group and another such member) incurred or increased anyindebtedness or liability (actual or contingent) which in any case is materialin the context of the Solitaire Group taken as a whole; (g) entered into, varied, authorised or announced its intention toenter into or vary any agreement, transaction, arrangement or commitment(whether in respect of capital expenditure or otherwise) which: (i) is of a long term, onerous or unusual nature ormagnitude or which is or could involve an obligation of such nature ormagnitude; (ii) could restrict the business of any member of theWider Solitaire Group; or (iii) is other than in the ordinary course of business, and which in any case is material in the context of the Solitaire Group taken asa whole; (h) entered into, implemented, effected or authorised any merger,demerger, reconstruction, amalgamation, scheme, commitment or other transactionor arrangement in respect of itself or another member of the Wider SolitaireGroup which in any case is material in the context of the Solitaire Group takenas a whole; (i) entered into or varied the terms of, any contract, agreement orarrangement with any of the directors or senior executives of any member of theWider Solitaire Group; (j) taken any corporate action or had any legal proceedingsinstituted or threatened against it or petition presented or order made for itswinding-up (voluntarily or otherwise), dissolution or reorganisation or for theappointment of a receiver, administrator, administrative receiver, trustee orsimilar officer of all or any material part of its assets and revenues or anyanalogous proceedings in any jurisdiction or appointed any analogous person inany jurisdiction which in any case is material in the context of the SolitaireGroup taken as a whole; (k) been unable, or admitted in writing that it is unable, to pay itsdebts or having stopped or suspended (or threatened to stop or suspend) paymentof its debts generally or ceased or threatened to cease carrying on all or asubstantial part of its business in any case with a material adverse effect onthe Solitaire Group taken as a whole; (l) waived or compromised any claim which is material in the contextof the Solitaire Group taken as a whole; (m) made any alteration to its memorandum or articles of association; (n) made or agreed or consented to any significant change to the termsof the trust deeds constituting the pension schemes established for itsdirectors, employees or their dependants or to the benefits which accrue, or tothe pensions which are payable, thereunder, or to the basis on whichqualification for, or accrual or entitlement to, such benefits or pensions arecalculated or determined or to the basis upon which the liabilities (includingpensions) of such pension schemes are funded or made, or agreed or consented toany change to the trustees including the appointment of a trust corporation; (o) proposed, agreed to provide or modified the terms of any shareoption scheme, incentive scheme or other benefit relating to the employment ortermination of employment of any person employed by the Wider Solitaire Group ina manner which is material to the context of the Solitaire Group; or (p) entered into any agreement, commitment or arrangement or passedany resolution or made any offer (which remains open for acceptance) or proposedor announced any intention with respect to any of the transactions, matters orevents referred to in this condition 1.1.7; 1.1.8 since 31 December 2005 and except as Disclosed: (a) there having been no adverse change or deterioration in thebusiness, assets, financial or trading positions or profit or prospects of anymember of the Wider Solitaire Group which in any case is material in the contextof the Solitaire Group taken as a whole; (b) no contingent or other liability of any member of the WiderSolitaire Group having arisen or become apparent or increased which in any caseis material in the context of the Solitaire Group taken as a whole; (c) no litigation, arbitration proceedings, prosecution or other legalproceedings to which any member of the Wider Solitaire Group is or may become aparty (whether as plaintiff, defendant or otherwise) having been threatened,announced, implemented or instituted by or against or remaining outstandingagainst or in respect of any member of the Wider Solitaire Group which in anycase is material in the context of the Solitaire Group taken as a whole; (d) (other than as a result of the Offer) no enquiry or investigationby, or complaint or reference to, any Third Party having been threatened,announced, implemented, instituted by or against or remaining outstandingagainst or in respect of any member of the Wider Solitaire Group which in anycase is material in the context of the Solitaire Group taken as a whole; and (e) no claim being made and no circumstance having arisen which mightlead to a claim being made under the insurance of any member of the WiderSolitaire Group which is material in the context of the Solitaire Group taken asa whole; 1.1.9 SREH not having discovered: (a) that any financial or business or other information concerning theWider Solitaire Group Disclosed, is misleading or contains any misrepresentationof fact or omits to state a fact necessary to make any information containedtherein not misleading and which was not subsequently corrected before the dateof this Announcement by fair disclosure either publicly or otherwise to SREH, toan extent which in any case is material in the context of the Solitaire Grouptaken as a whole; (b) that any member of the Wider Solitaire Group is subject to anyliability (actual or contingent) which is not disclosed in Solitaire's annualreport and accounts for the financial year ended 31 December 2005 and which inany case is material in the context of the Solitaire Group taken as a whole; or (c) any information which affects the import of any informationdisclosed at any time by or on behalf of any member of the Wider Solitaire Groupto an extent which is material in the context of the Solitaire Group taken as awhole; and 1.1.10 SREH not having discovered: (a) that, save as Disclosed, any past or present member of the WiderSolitaire Group has not complied with any applicable legislation or regulationsof any jurisdiction with regard to the use, treatment, handling, storage,transport, release, disposal, discharge, spillage, leak or emission of any wasteor hazardous substance or any substance likely to impair the environment or harmhuman health, or otherwise relating to environmental matters or the health andsafety of any person, or that there has otherwise been any such use, treatment,handling, storage, transport, release, disposal, discharge, spillage, leak oremission (whether or not this constituted a non-compliance by any person withany legislation or regulations and wherever the same may have taken place)which, in any case, would be likely to give rise to any liability (whetheractual or contingent) or cost on the part of any member of the Wider SolitaireGroup which in any case is material in the context of the Solitaire Group takenas a whole; (b) that, save as fairly Disclosed, there is, or is likely to be, anyliability, whether actual or contingent, to make good, repair, reinstate orclean up any property now or previously owned, occupied or made use of by anypast or present member of the Wider Solitaire Group or any controlled watersunder any environmental legislation, regulation, notice, circular, order orother lawful requirement of any relevant authority or Third Party or otherwisewhich in any case is material in the context of the Solitaire Group taken as awhole; or (c) that, save as fairly Disclosed, circumstances exist whereby aperson or class of persons would be likely to have a claim in respect of anyproduct or process of manufacture or materials used therein now or previouslymanufactured, sold or carried out by any past or present member of the WiderSolitaire Group which is material in the context of the Solitaire Group. 1.2 For the purpose of these conditions: 1.2.1 "Third Party" means any central bank, government,government department or governmental, quasi-governmental, supranational,statutory, regulatory or investigative body, authority (including any nationalanti-trust or merger control authority), court, trade agency, associationinstitution or professional or environmental body or any other person or bodywhatsoever in any relevant jurisdiction; 1.2.2 a Third Party shall be regarded as having"intervened" if it has decided to take, institute, implement or threaten anyaction, proceeding, suit, investigation, enquiry or reference or made, proposedor enacted any statute, regulation, decision or order or taken any measures orother steps or required any action to be taken or information to be provided orotherwise having done anything and "intervene" shall be construed Accordingly;and 1.2.3 "Authorisations" means authorisations, orders,grants, recognitions, determinations, certificates, confirmations, consents,licences, clearances, provisions and approvals Subject to the requirements of the Panel, SREH reserves the right to waive allor any of the above conditions, in whole or in part, except condition 1.1.1. Conditions 1.1.2 to 1.1.10 (inclusive) must be fulfilled, be determined by SREHto be or remain satisfied or (if capable of waiver) be waived by midnight on the21st day after the later of the first closing date of the Offer and the date onwhich condition 1.1.1 is fulfilled (or in each case such later date as SREH may,with the consent of the Panel, decide), failing which the Offer will lapse. SREHshall be under no obligation to waive (if capable of waiver), to determine to beor remain satisfied or to treat as fulfilled any of conditions 1.1.2 to 1.1.10(inclusive) by a date earlier than the latest date specified above for thefulfilment of that condition. If the Panel requires SREH to make an offer for Solitaire Shares under theprovisions of Rule 9 of the City Code, SREH may make such alterations to theconditions of the Offer, including to condition 1.1.1, as a necessary to complywith the provisions of that Rule. The Offer will lapse (unless otherwise agreed by the Panel) if the acquisitionof Solitaire by SREH is referred to the Competition Commission before the laterof 3.00p.m. on the first closing date of the Offer and the date when the Offerbecomes or is declared unconditional as to acceptances. If the Offer lapses it will cease to be capable of further acceptance. SolitaireShareholders who have accepted the Offer and SREH shall then cease to be boundby acceptances delivered on or before the date on which the Offer lapses. 2. Certain further terms of the Offer The Solitaire Shares will be acquired by SREH fully paid up and free from allliens, equities, charges, encumbrances and other third party rights and/orinterests and together with all rights now or hereafter attaching thereto,including the right to receive and retain all dividends, interest and otherdistributions declared, made or payable on or after the date of thisAnnouncement other than the final dividend in respect of the year to 31 December2005 of 9.7p per share payable on 27 June 2006 to shareholders on the registeron 19 May 2006. The Offer will be on the terms and will be subject, inter alia, to theconditions which are set out in paragraph 1 of this Appendix I and those termswhich will be set out in the formal offer document or the Form of Acceptance andsuch further terms as may be required to comply with the AIM Rules of the LondonStock Exchange and the provisions of the City Code. The Offer and anyacceptances thereunder will be governed by English law. The availability of the Offer to persons not resident in the United Kingdom maybe affected by the laws of the relevant jurisdictions. Persons who are notresident in the United Kingdom should inform themselves about and observe anyapplicable requirements. APPENDIX II Sources of information and bases of calculations 1. The value placed by the Offer on the entire issuedshare capital of Solitaire is based on 4,999,667 Solitaire Shares in issue on 5May 2006. 2. The financial information relating to Solitaire isextracted or derived without material adjustment from the preliminary results ofSolitaire for the year ended 31 December 2005. 3. The Closing Prices of Solitaire Shares are derived from Bloomberg. APPENDIX III Definitions The following definitions apply throughout this announcement unless the contextotherwise requires: Act or Companies Act: the Companies Act 1985 (as amended); AIM: the market of that name operated by the London Stock Exchange; AIM Rules: the rules of AIM governing admission to and the operation of AIM for AIM companies and their nominated advisers as published by the London Stock Exchange from time to time; associate: shall be construed in Accordance with s 430E(4)(a) to (d) (inclusive) of the Companies Act; business day: a day (excluding Saturdays, Sundays and public holidays) on which banks are open for business in the City of London; City Code: the City Code on Takeovers and Mergers; Closing Price: the closing middle market quotation of a share as derived from the AIM Appendix to the Daily Official List of the London Stock Exchange; Consensus: Consensus Business Group Limited Corporate Synergy: Corporate Synergy Plc, financial adviser to SREH; "Disclosed" means (i) as publicly announced by Solitaire (by the delivery of an announcement to an authorised regulatory information service prior to the date of this announcement; (ii) as disclosed in this document or (iii) as otherwise disclosed in writing, or in the documentation or written information provided to SREH or its agents or advisers on behalf of Solitaire in the context of the Offer prior to the date of this announcement. First Closing Date: 21 days after the date of the posting of the Offer Document (or such other date as SREH may, subject to the provisions of the City Code, decide); Form of Acceptance: the form of acceptance, authority and election for use in connection with the Offer to be despatched to Solitaire Shareholders with the Offer Document; FSMA the Financial Services and Markets Act 2000; KBC Peel Hunt: KBC Peel Hunt Ltd, financial adviser to Solitaire; London Stock Exchange: the London Stock Exchange plc; Offer: the recommended cash offer to be made by Corporate Synergy on behalf of SREH to acquire all of the issued and to be issued Solitaire Shares not already owned (or contracted to be acquired) by SREH or its associates 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 to requires, any subsequent revision, variation, extension or renewal of such offer); Offer Document: the document to be posted to Solitaire Shareholders containing the formal terms and conditions of the Offer; Offer Period: the period commencing on 2 May 2006 being the date of the announcement by Solitaire that it had received a preliminary approach which may or may not lead to an offer for the Company; Offer Price: 850 pence per Solitaire Share; Overseas Shareholders: Solitaire Shareholders not resident in and citizens of the United Kingdom; Panel: the Panel on Takeovers and Mergers; pence or £: the lawful currency of the United Kingdom; Solitaire Board or the board of directors of Solitaire Group; Solitaire Directors or Board of Solitaire: Solitaire or Company: Solitaire Group plc; Solitaire Group: Solitaire and its subsidiary undertakings, and, where the context permits, each of them; Solitaire Share Option the Solitaire Group Approved Employee Share OptionScheme: Scheme; Solitaire Shareholders: holders of Solitaire Shares; Solitaire Shares: includes the existing unconditionally allotted or issued and fully paid ordinary shares of 10 pence each in the capital of Solitaire and any further ordinary shares of 10 pence each in the capital of Solitaire which are unconditionally allotted of issued before the date on which the Offer closes or before such earlier date a SREH (subject to the City Code) may determine not being earlier than the date on which the Offer becomes or is declared unconditional as to acceptances. SREH: Solitaire Real Estate Management Limited; SREH Group: SREH and its subsidiary undertakings, associated undertakings and any other undertaking in which SREH and/or such undertakings (aggregating their interests) have a substantial interest; subsidiary; subsidiary have the meanings given by the Companies Act 1985,undertaking; undertaking; other than paragraph 20(1)(b) of Schedule 4A to associated undertaking; that Act which shall be excluded for this purpose and substantial interest: and substantial interest means a direct or indirect interest in 20 per cent or more of the equity share capital (as defined in that Act) of any undertaking; Tchenguiz Family Trust: a discretionary trust of which Vincent Tchenguiz is a potential beneficiary and the trustee of which is Investec Trust (Guernsey) Limited; UK or United Kingdom: the United Kingdom of Great Britain and Northern Ireland; United States or US: the United States of America, its possessions and territories, all areas subject to its jurisdiction or any subdivision thereof, any state of the United States and the District of Columbia; Wider SREH Group: the SREH Group, the shareholders of SREH, and any holding company or holding companies of such shareholders, their subsidiary undertakings, associated undertakings and any other undertaking in which such shareholders, any holding company or holding companies of such shareholders and/or such undertakings (aggregating their interests) have a substantial interest and any subsidiary undertakings or associated undertaking; and Wider Solitaire Group: Solitaire and its subsidiary undertakings, associated undertakings and any other undertaking or partnership or company in which Solitaire and/ or such undertakings (aggregating their interests) have a substantial interest and any subsidiary undertakings or associated undertakings or undertaking. All references to legislation in this document are to English legislation unlessthe contrary is indicated. Any reference to any provision of any legislationshall include any amendment, modification, re-enactment or extension thereof. All references to time in this document are to London time. Words importing the singular shall include the plural and vice versa, and wordsimporting the masculine gender shall include the feminine or neutral gender. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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