22nd Jun 2006 07:02
Redstone PLC22 June 2006 22 JUNE 2006 REDSTONE PLC Recommended cash offer by Evolution Securities Limited on behalf of Redstone plc for Symphony Telecom Holdings plc Proposed placing of 381,350,000 New Redstone Shares at 5.25 pence per New Redstone Share • Redstone plc ("Redstone"), the national communications servicesprovider, announces today a recommended cash offer for Symphony TelecomHoldings plc ("Symphony"), which values the existing issued share capital ofSymphony at approximately £16.9 million and assuming full exercise of rightsunder the existing option schemes of Symphony, following the Offer becomingunconditional, at £17.3 million. • Symphony is a leading UK distributor of mobile and fixed linetelecommunications products and services. It sells mobile, fixed line anddata products and services directly to the SME markets and also acts as adistributor for all five mobile network operators within the UK. • The Redstone Directors believe that the Acquisition is a furthersignificant step towards establishing Redstone as a leading UK IT andcommunications solution provider. • The Redstone Directors believe that the Acquisition provides the Groupwith the following principal strategic benefits: o the addition of a mobile telecommunications offering; o the addition of over 8,000 more corporate and SME customers; o cost savings through synergies from combining the two UK based fixed line telephony businesses; o the addition of alternative suppliers of fixed line telephony; o the addition of a UK based network of dealers as channel partners for the Group's existing products; and o the ability to bundle mobile telephony with Redstone's existing fixed line telephony, broadband and other IT and communication solutions and offer a "one stop shop" to the Enlarged Group's customers. • In order to finance the cash consideration payable by Redstone pursuantto the Offer and to provide additional working capital for the EnlargedGroup, the Company proposes to raise approximately £20.0 million beforeexpenses (£18.1 million net of expenses) by way of a placing of New RedstoneShares at a price of 5.25 pence per share (the "Placing"). Redstone intendsto post a circular to Redstone Shareholders setting out details of thePlacing and convening an Extraordinary General Meeting and the formal offerdocumentation to Symphony Shareholders as soon as reasonably practicable. Martin Balaam, Chief Executive of Redstone, commented, "The offer for Symphonyrepresents a key step in our stated strategy to broaden our product offering andtake advantage of consolidation in this industry. We believe that theintegration of Symphony with Redstone will realise significant synergies andopportunities to cross sell to each of Symphony's and Redstone's customer bases.We believe that this acquisition enhances our market position and ensures we arebest placed to generate future growth and shareholder returns." ENQUIRIES: Redstone plc Tel. +44 (0)845 200 2200Martin Balaam, Chief ExecutiveTim Perks, Chief Financial Officer Symphony Telecom Holdings plc Tel. +44 (0)1442 283300Martin Turner, Chief ExecutiveIan Brewer, Finance Director ICIS Limited Tel. +44 (0)20 7651 8688Tom Moriarty or +44 (0)7769 937 626 The Symphony Directors accept responsibility for the information contained inthis announcement relating to Symphony and its subsidiaries, themselves andtheir immediate families and connected persons. The Redstone Directors acceptresponsibility for all the other information contained in this announcement. Tothe best of the knowledge and belief of the Redstone Directors and the SymphonyDirectors (who have taken all reasonable care to ensure that such is the case)the information contained herein for which they are respectively responsible isin accordance with the facts and does not omit anything likely to affect theimport of such information. This announcement has been issued by Evolution Securities Limited. EvolutionSecurities Limited which is regulated in the UK by the Financial ServicesAuthority, is acting exclusively for Redstone in connection with the Offer andno one else and will not be responsible to anyone other than Redstone forproviding the protections afforded to clients of Evolution Securities Limitednor for providing advice in relation to the Offer. No offer or invitation to acquire or exchange securities in Redstone or Symphonyis being made now. Any such offer or invitation will only be made in documentsto be published in due course (if any) and any such acquisition or exchangeshould be made solely on the basis of information contained in any suchdocuments. The Offer will not be made, directly or indirectly, in or into, or by the use ofmails or any means or instrumentality (including, without limitation,telephonically or electronically) of interstate or foreign commerce of, or anyfacility of a national securities exchange of, the United States, Canada,Australia or Japan and the Offer will not be capable of acceptance by any suchuse, means, instrumentality or facilities from or within the United States,Canada, Australia or Japan. Accordingly, copies of this announcement and anyrelated documents are not being, and must not be, directly or indirectly, mailedor otherwise forwarded, distributed or sent in or into or from the UnitedStates, Canada, Australia or Japan and persons receiving this announcement andany related document (including custodians, nominees and trustees) must not mailor otherwise forward, distribute or send it in, into or from the United States,Canada, Australia or Japan or such other jurisdiction where to do so wouldconstitute a violation of the relevant laws of such jurisdiction. Doing so mayrender invalid any purposed acceptance of the Offer. The availability of the Offer to persons who are not resident in the UnitedKingdom may be affected by the laws of the relevant jurisdictions. Persons whoare not resident in the United Kingdom should inform themselves about andobserve any applicable 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 or possible offer, withor without terms. Accordingly, the offer period begins today, 22 June 2006. The above disclosure requirements are set out in more detail in Rule 8 of theCode. In particular, Rule 8.3 requires public disclosure of dealings during theoffer period by persons who own or control, or who would as a result of anytransaction own or control, one per cent. or more of any class of the relevantsecurities of Symphony. Relevant securities include Symphony Shares, securitiesof Symphony carrying conversion or subscription rights into its shares, optionsin respect of and derivatives referenced to its shares. In the case of theOffer, this requirement will apply until the first closing date of the Offer or,if later, the date when the Offer becomes or is declared unconditional as toacceptances or lapses. If you are in any doubt as to the application of Rule 8 to you, please contactan independent financial advisor authorised under the Financial Services andMarkets Act 2000, consult the Panel's website at www.thetakeoverpanel.org.uk orcontact the Panel on telephone number +44 20 7638 0129; fax +44 20 7236 7013. Recommended cash offer by Evolution Securities Limited on behalf of Redstone plcfor the entire share capital of Symphony Telecom Holdings plc 1. Introduction The Redstone Directors and the Symphony Directors announce the terms ofrecommended cash offer to be made by Evolution Securities, on behalf ofRedstone, to acquire the entire issued and to be issued ordinary share capitalof Symphony. This announcement contains the terms and conditions of the Offer and summaryinformation on Redstone and Symphony. 2. The Offer On behalf of Redstone, Evolution Securities hereby offers to acquire, on theterms and subject to the conditions set out or referred to in Appendix 1 to thisannouncement, all of the Symphony Shares on the following basis: for each Symphony Share 54.5 pence in cash Redstone intends to acquire a minimum of 90 per cent. and a maximum of 100 percent. of the Symphony Shares. The Offer extends to the holders of all existing issued Symphony Shares and tothe holders of any Symphony Shares which are unconditionally allotted or issuedprior to the date on which the Offer closes (or such earlier date as Redstonemay, subject to the Code, decide) including Symphony Shares to be issuedpursuant to the exercise of options under the Symphony Share Option Schemes orotherwise. The Offer values the entire existing issued share capital of Symphony atapproximately £16.9 million and each Symphony Share at 54.5 pence. At 54.5pence, the Offer represents: •a premium of approximately 14.7 per cent. to the Closing Price of 47.5 pence for each Symphony Share on 21 June 2006, being the last business day prior to this announcement ; and •a premium of approximately 32.9 per cent. to the issue price of 41 pence for each Symphony Share upon admission to trading on AIM on 15 September 2005. Full acceptance of the Offer would result in a cash payment of approximately£16.9 million. This payment and the working capital requirements of the EnlargedGroup will be funded from £5 million of the new banking facilities being madeavailable from Barclays and the net proceeds of the Placing. Details of the further terms and conditions of the Offer are set out below inAppendix I to this announcement. 3. Further details of the Offer The Symphony Shares to be acquired by Redstone pursuant to the Offer will beacquired fully paid and free from all liens, equities, charges, encumbrances,rights of pre-emption and other third party rights and interests of any naturewhatsoever and together with all rights now or hereafter attaching thereto,including the right to receive and retain all dividends and other distributions(if any) declared, paid or made on or after 22 June 2006. There are no agreements or arrangements to which Redstone is a party whichrelate to the circumstances in which it may or may not invoke or seek to invokea condition of the Offer. The Offer is conditional, inter alia, upon the approval of Redstone Shareholdersof the Resolutions at the Extraordinary General Meeting of Redstone, furtherdetails of which will be set out in the Circular to be sent to RedstoneShareholders as soon as practicable. 4. Irrevocable undertakings The Symphony Directors who hold Symphony Shares have entered into irrevocableundertakings to accept, or procure the acceptance of, the Offer in respect oftheir beneficial interests in Symphony Shares amounting, in aggregate, to121,961 Symphony Shares, representing approximately 0.4 per cent. of the entireexisting issued ordinary share capital of Symphony. All of these undertakingsremain binding, even in the event of a higher competing offer for Symphony,unless the Offer lapses or is withdrawn. Eckoh has entered into an irrevocable undertaking to accept, or procure theacceptance of, the Offer in respect of its beneficial holding amounting inaggregate, to 20,099,999 Symphony Shares, representing approximately 64.7 percent. of the entire existing issued ordinary share capital of Symphony. Thisundertaking remains binding, even in the event of a higher competing offer forSymphony, unless the Offer lapses or is withdrawn. Eckoh has also agreed toenter into a non-compete covenant for a period of three years from the date ofthe Offer. Accordingly, Redstone has received irrevocable undertakings to accept, orprocure the acceptance of, the Offer from Symphony Shareholders in respect of,in aggregate, 20,221,960 Symphony Shares, representing approximately 65.0 percent. of Symphony's entire existing issued share capital. 5. Information on Redstone and Redstone's financing arrangements Redstone is a provider of communications and IT solutions for businesses andpublic sector organisations. The Company's portfolio of products and serviceshelps businesses to maximise the benefits of the latest telecom and converged IPsolutions thereby enhancing customer satisfaction, increasing productivity,maximising operational efficiency, reducing costs and generating valuable newrevenue channels. The Group's business is organised into four distinct businessdivisions: Telecom Redstone Telecom provides telephony network services to the private and publicsector and its portfolio includes business telephony services, line rental,non-geographic services and premium rate services. Redstone Telecom has astrategic relationship with BT Wholesale delivering service quality andavailability. This is complemented by customer-focused services includingdedicated account management and around the clock customer support. Technology Redstone Technology is one of Ireland's leading specialists in providing HPenterprise storage solutions and is a specialist in HP business criticalenterprise-class servers and provides a wide array of professional, consulting,logistics and maintenance services in the Republic of Ireland and NorthernIreland. Redstone Technology is an HP Preferred Partner and is the only HP AuthorisedService Delivery Partner in Ireland, as well as being HP's leading partner inenterprise storage solutions and business critical servers in Ireland. RedstoneTechnology is also the first Red Hat Linux Advanced Partner in Ireland and aStorageTek Premier Plus Partner. Managed solutions Redstone Managed Solutions ("RMS") provides a portfolio of infrastructure andinternet services suitable for businesses and public sector organisations. Theseinclude server and desktop deployment, application development, hosting andco-location, network and system management, internet service provision andconsultancy. RMS can manage and support business networks from enterprise level through tothe desktop, with a single source service for business. RMS also provideshosting solutions from its London and Cambridge data centres, with scaleablesolutions, from a single server to multiple racks. Redstone's ISP offersservices including managed IP virtual private networks, managed firewall, emailfiltering, online data backup, global roaming internet access and a WiFi hotspotservice. The Redstone Metropolitan Area Network in Cambridge comprises in excessof 25 kilometres of fibre, providing a state of the art communications backbonecapable of delivering internet, voice, data or point to point services. RMS has a dedicated education sector offering which provides services includingISP connection and filtered email and content control, hosting and domainregistration services, together with niche software developments for schoolsincluding its education sector WebXchange portal and registration administrationproducts. Converged solutions Redstone Converged Solutions is a provider of converged IP solutions, withexpertise in contact centres, voice and video, IP networks, Intelligent Building(Onenet) and security. Bringing together the combined knowledge and experienceof Xpert Communications and Redstone's solutions businesses, Redstone ConvergedSolutions provides innovative solutions to businesses and organisations in thehealth, education, local government, retail and finance sectors. With over 10years' of expertise in the fields of voice and data, Redstone ConvergedSolutions represents a strong proposition in the convergence market. Redstone Converged Solutions has developed long standing partnerships withworld-class suppliers of voice and data technology solutions, including Avaya,BT, Cisco and Mitel. In addition to these relationships, Redstone ConvergedSolutions also partners with technology specific-suppliers which enables it tooffer bespoke and innovative solutions for all voice and data technologyapplications. As it is vendor independent, Redstone Converged Solutions has theflexibility to specify the most appropriate solution for clients bespokerequirements. Redstone's financing arrangements In order to finance the cash consideration payable by Redstone pursuant to theOffer and to provide additional working capital for the Enlarged Group, Redstoneproposes to raise approximately £20.0 million before expenses (£18.1 million netof expenses) by way of a placing by Evolution Securities, as agent for and onbehalf of Redstone, of 381,350,000 New Redstone Shares at 5.25 pence per share.The Placing is conditional, inter alia, upon the approval of RedstoneShareholders of the Resolutions at the Extraordinary General Meeting ofRedstone, the Offer becoming or being declared unconditional in all respects andAdmission. Redstone has also entered into new banking facilities with Barclays of which £5million will be used towards the cash consideration payable pursuant to theOffer. 6. Information on Symphony The Symphony Group Symphony is a leading UK distributor of telecommunications products andservices. Symphony sells mobile, fixed line and data products and servicesdirectly to the SME market. Symphony also acts as a distributor for all fivemobile network operators within the UK. Symphony's channels to market includeits own direct sales team, a network of independent dealers and eight jointventures with established telephony equipment distributors. The Symphony Group's principal trading divisions comprise Fixed Line and DataServices and Mobile Services, which includes the mobile distribution businessAnglia Telecom Centres Limited acquired in April 2005. Together, these divisionshave an annual combined turnover of approximately £60.0 million, which, theSymphony Directors believe, makes Symphony one of the largest independentresellers of telecommunications services in the UK. Symphony currently has 116employees based predominantly in Hemel Hempstead and Ipswich. Mobile Services Division The Mobile Services Division operates as a mobile service provider to SMEs andas a distributor for the UK and Dutch mobile networks. Mobile Distribution The Mobile Distribution operation, trading as Anglia Telecom, acts as anaggregator that sits between mobile network operators, small dealers and retailoutlets. Through its dealer channel and direct sales team, Anglia Telecom supplies enduser corporate customers with a range of mobile airtime packages, handsets andaccessories. It supports its dealer channel through the provision of marketingservices, hardware sourcing and arranging the connection of customers to thedesired network and provides high quality customer care and account management. Anglia Telecom has mobile distribution agreements with Vodafone, O2, Orange,T-mobile and 3, who each pay to Anglia Telecom a commission for each connectionto the relevant network, the level of which depends on the tariff plan andcontract duration. Since its acquisition on 29 April 2005, Anglia Telecom in the UK has generatedsales of £33.6 million for the Symphony Group. For the full year the operationachieved significant organic growth including Anglia's pre-acquisition results,with gross connections up from 61,800 to 74,200 and turnover up 39 per cent. to£36.7 million (2005: £26.4 million). This growth has been achieved through theuse of aggressive short-term promotions and incentives as well as the expansionof the dealer network. Gross margin on a similar pro forma basis was 10 percent. for the full year (2005: 13 per cent.), the reduction largely due to theintroduction of the lower-margin 3 network during the year and consequentialimpact on product mix. During the year Symphony also acquired IMS Plus Beheer B.V. ("IMS"), a Dutchmobile distribution business, which contributed a loss of £0.2 million onturnover of £1.5 million. Despite its small size IMS has shown steady growth andis expected to achieve a break even position within the next six months. Thefuture success of this business will determine the timing and extent ofSymphony's plans to roll out its business model into other European countries. Mobile Service Provision The Mobile Service Provision business, operating under the "Symphony" and otheraffiliated brands, is one of only nine businesses in the UK to hold serviceprovider licences with both Vodafone and O2, both of which were secured in 2000.Under these contracts, Symphony purchases voice and data airtime packages fromVodafone and O2 at wholesale rates and resells them at retail prices to end userbusiness customers. Following a strategic review, over the past six months, the Mobile ServiceProvision operation has been reorganised to focus on growth through its indirectdistribution channels, including the acquired Anglia dealer channel which hasperformed exceptionally well since acquisition. The Symphony Directors believethis to be the most cost efficient and effective way to grow its mobile serviceprovision business in the future. Both the Vodafone and O2 service provisionlicences were extended during the past year, ensuring Symphony continues tobenefit from being one of a small number of service providers with duallicences. As a result of the review the division has increased its indirect sales and backoffice staff, reduced direct sales costs and created a unified mobile sales teamacross both mobile distribution and mobile service provision channels.Additionally and in conjunction with the mobile network operators, the divisionundertook an exercise to cleanse the subscriber base of low quality connections,resulting in approximately 2,500 disconnections. Notwithstanding these changes,annual turnover rose 8 per cent. to £6.9m (2005: £6.4m) with 12,374 activesubscribers at year end (2005: 12,400). Based on the successful Anglia Telecom model and by adopting an indirect salesstrategy as the primary route to market, Symphony intends to significantly growits service provision operation over the next 12 months. A series of new productofferings were launched into the market in April 2006. Fixed Line and Data Services The Fixed Line and Data Division, trading as Symphony Telecom, resells fixedline voice, line rental and data products from BT and other alternative carriersto SME customers. It has non-exclusive supplier arrangements with a range offixed line carriers, principally, BT, Energis, Cable & Wireless, Thus andWorldcom/MCI. These services include fixed voice, data, private and ISDNcircuits, wholesale line rental and non-geographic numbers. Turnover for the year increased to £19.4 million (2005: £14.4 million), whichincludes £4.5 million generated from the customer base acquired with Anglia. Theorganic growth was largely due to increased sales of wholesale line rentalservices into the existing customer base and the launch of two new jointventures. Despite competitive market conditions, gross margins increased to 39 per cent.(2005: 38 per cent.). The division protects its margins by using its buyingpower to negotiate improvements in wholesale costs from its suppliers, and byoffering tailored pricing plans and product bundles. The integration of Anglia'sfixed line services was completed on 31 October 2005 which has reduced operatingcosts going forward through the elimination of duplicate costs. Demand and customer interest continues to grow for advanced data services(including business broadband) and business VoIP (Voice over Internet Protocol)solutions. In May 2006, the division launched a free broadband offering as partof a bundle of complementary telecom services, and a comprehensive business VoIPsolution is scheduled to launch in the summer of 2006. Following a strategic review, the fixed line operation in Ireland is beingdiscontinued. The operation generated revenue of £0.2 million and an operatingloss of £40,000 during the year. 7. Background to and reasons for the Offer Redstone has stated its aim to become one of the leading IT and communicationssolution providers in the UK and Ireland. The UK IT and communications sector is experiencing significant change andopportunity as the increasing availability and affordability of broadband allowsbusinesses and consumers to take advantage of converged technologies. As a consequence of these changes, there continues to be consolidation in thismarket sector as businesses scale up by the acquisition of complementaryproducts and services and also to enlarge their customer bases. Redstone has previously announced its intention to be an active participant inthis consolidating marketplace. In pursuit of this strategy, in April 2005 theCompany acquired, and subsequently successfully integrated, Xpert Group Limitedand has today announced the Offer. The Redstone Directors believe that the Acquisition is a further significantstep towards establishing itself as a leading UK IT and communications solutionprovider. The Redstone Directors believe that the Acquisition provides the Group with thefollowing principal strategic benefits: •the addition of a mobile telecommunications offering; •the addition of over 8,000 more corporate and SME customers; •cost savings through synergies from combining the two UK based fixed line telephony businesses; •the addition of alternative suppliers of fixed line telephony; •the addition of a UK based network of dealers as channel partners for the Group's existing products; and •the ability to bundle mobile telephony with Redstone's existing fixed line telephony, broadband and other IT and communication solutions and offer a "one stop shop" to the Enlarged Group's customers. The Redstone Directors believe that there are significant opportunities to crosssell to each of Redstone's and Symphony's customer bases which, when combinedwith the synergistic benefits of bringing together the back office functions ofRedstone and Symphony and integrating the fixed line businesses, the RedstoneDirectors expect will create good opportunities for additional revenues and costsavings. The Redstone Directors believe that the prospects are enhanced simplyby being a larger entity with a more substantial presence in key verticalmarkets and an increased purchasing power with suppliers which in itself isexpected to help achieve increased sales growth and win new accounts. It is expected that the fixed line business units of Redstone and Symphony willbe consolidated as soon as practicable following completion of the Acquisitionand that the mobile business unit will operate as a separate division of theEnlarged Group. Accordingly, the Redstone Directors believe that the outlook for the EnlargedGroup is encouraging. It is anticipated that the Enlarged Group will be able tooffer a comprehensive range of IT and communication solutions to business andpublic sector organisations in a market which is increasingly reliant on suchsolutions to transact business and interact with its end customers. The Redstone Directors believe that Redstone's continued success will be basedon its ability to offer a comprehensive range of innovative IT and communicationsolutions to its customers, combined with excellent customer service. Redstonewill continue to seek to enlarge both its customer base and its range ofproducts and services through both organic growth and acquisition. 8. Symphony Directors, management and employees Martin Turner, Martin Smith and Lesley Innes have agreed to resign from theboard of Symphony upon the Offer becoming or being declared unconditional in allrespects. The board of Redstone has given assurances to the Symphony Directors that,following the Offer becoming or being declared unconditional in all respects,the existing employment rights, including pension rights, of all employees ofthe Symphony Group will be fully safeguarded. Redstone intends to continue the mobile business of Symphony in broadly itscurrent form and there are presently no intentions regarding any major changesto that business division of Symphony. As a result of the intention to merge thefixed line business units of Symphony and Redstone, Redstone will review thestaffing and location of both Redstone and Symphony's fixed line business units. 9. Symphony Share Option Schemes The Offer extends to any Symphony Shares which are issued or unconditionallyallotted and fully paid (or credited as fully paid) before the date on which theOffer closes (or, subject to the Code, by such earlier date as Redstone maydecide), including Symphony Shares issued pursuant to the exercise of optionsgranted under the Symphony Share Option Schemes or otherwise. To the extent that such options have not been exercised in full, Redstone willmake appropriate proposals to the holders of Symphony Options as soon as isreasonably practicable following the issuance of the Offer Document. 10. Inducement fee Redstone has entered into an inducement fee arrangement with Symphony underwhich a fee of £130,000 at the time of breach of such agreement would be payableto Redstone by Symphony in certain circumstances. In certain circumstances whereRedstone breaches such agreement a similar fee would be payable by Redstone toSymphony. Before the inducement fee was agreed, Redstone confirmed to theSymphony Board that it would not make the Offer without entering into thisinducement fee arrangement with Symphony. 11. Settlement Subject to the Offer becoming or being declared unconditional in all respects,settlement of the consideration to which any Symphony Shareholder is entitledunder the Offer will be effected by the despatch of cheques or the credit of theCREST accounts (i) in the case of acceptances received, complete in allrespects, by the date on which the Offer becomes or is declared unconditional inall respects, within 14 days of such date; or (ii) in the case of acceptancesreceived, complete in all respects, after the date on which the Offer becomes oris declared unconditional in all respects but while it remains open foracceptance, within 14 days of such receipt, in the following manner: (a) Symphony Shares held in certificated form (that is, not in CREST) Where an acceptance relates to Symphony Shares held in certificated form,settlement of any cash due will be despatched by first class post (or by suchother method as may be approved by the Panel) at the risk of the person(s)entitled thereto to validly accepting Symphony Shareholders or their appointedagents (but not in or into a Restricted Jurisdiction). All such cash paymentswill be made in pounds sterling by cheque drawn on a branch of a UK clearingbank. (b) Symphony Shares held in uncertificated form (that is, in CREST) Where an acceptance relates to Symphony Shares held in uncertificated form, thecash consideration to which the accepting Symphony Shareholder is entitled willbe paid by means of a CREST payment in favour of the accepting SymphonyShareholder's payment bank in respect of the cash consideration due, inaccordance with the CREST payment arrangements. Redstone reserves the right to settle all or any part of the considerationreferred to above, for all or any accepting Symphony Shareholder(s), in themanner referred to in paragraph (a) above, if, for any reason, it wishes to doso. (c) General If the Offer does not become or is not declared unconditional in all respects:(i) in respect of Symphony Shares held in certificated form, the relevantcompleted Forms of Acceptance, share certificate(s) and/or other document(s) oftitle will be returned by post (or by such other method as may be approved bythe Panel) within 14 days of the Offer lapsing or being withdrawn to SymphonyShareholders and (ii) in respect of Symphony Shares held in uncertificated form,the Escrow Agent will, immediately after the lapsing or withdrawal of the Offer(or within such longer period as the Panel may permit, not exceeding 14 daysfrom the lapsing or withdrawal of the Offer), give TFE Instructions to CRESTCoto transfer all relevant Symphony Shares held in escrow balances and in relationto which it is the Escrow Agent for the purposes of the Offer to the originalavailable balances of the Symphony Shareholders concerned. No document will besent to an address in a Restricted Jurisdiction. All communications, notices, certificates, documents of title and remittancessent by, to or from Symphony Shareholders or their appointed agents will bedelivered by, or sent to or from, them, or their appointed agents, at their ownrisk. 12. Compulsory acquisition, cancellation of admission of Symphony Shares totrading on AIM and re-registration If Redstone receives acceptances under the Offer in respect of, and/or otherwiseacquires, 90 per cent. or more of the Symphony Shares to which the Offer relatesand the Offer becomes or is declared unconditional in all respects, Redstoneintends to exercise its rights pursuant to the provisions of sections 428 to430F (inclusive) of the Act to acquire compulsorily any outstanding SymphonyShares not acquired or agreed to be acquired pursuant to the Offer or otherwise. Assuming the Offer becomes or is declared unconditional in all respects,Redstone intends to procure the making of an application by Symphony to theLondon Stock Exchange for the cancellation of the admission of the SymphonyShares to trading on AIM. It is anticipated that such cancellation of tradingwill take effect no earlier than 20 business days after the Offer becomes or isdeclared unconditional in all respects. The cancellation of the trading of the Symphony Shares will significantly reducethe liquidity and marketability of any Symphony Shares not assented to the Offerand their value may be affected in consequence. It is also proposed that, in due course, Redstone will seek to procure there-registration of Symphony as a private company under the relevant provisionsof the Act. 13. Extraordinary General Meeting of Redstone An Extraordinary General Meeting will be convened in due course at whichresolutions will be proposed to implement the Placing. Resolution 1, which will be proposed as an ordinary resolution and which is,subject to the Placing Agreement becoming unconditional, to increase theauthorised share capital of the Company. Resolution 2, which will be proposed as an ordinary resolution and which issubject to the passing of Resolutions 1 and 3 and the Placing Agreement becomingunconditional, is to authorise the Redstone Directors to allot the New OrdinaryShares in connection with the Placing. Resolution 3, which will be proposed as a special resolution and which issubject to the passing of Resolutions 1 and 2 and the Placing Agreement becomingunconditional, disapplies Shareholders' statutory pre-emption rights in relationto the issue of the New Ordinary Shares. 14. Recommendation of the Redstone Board The Redstone Board, which has been so advised by Evolution Securities, considersthat the Placing is in the best interests of the Company and its Shareholders asa whole. In giving this advice, Evolution Securities has relied upon thecommercial assessments made by the Board. Accordingly, the Redstone Directors unanimously recommend that you vote infavour of the Resolutions to be proposed at the EGM, as they and their immediatefamilies and connected persons (within the meaning of Section 346 of the Act)intend to do in respect of their aggregate holdings of 7,790,849 RedstoneShares, representing 1.1 per cent. of the Company's existing issued ordinaryshare capital. 15. Recommendation of the Symphony Board The Symphony Directors, having been so advised by Daniel Stewart & Company,consider the terms of the Offer to be fair and reasonable. In providing adviceto the Symphony Directors, Daniel Stewart & Company has taken into account thecommercial assessments of the Symphony Directors. Accordingly, the Symphony Directors unanimously recommend Symphony Shareholdersto accept the Offer as they have irrevocably undertaken so to do in respect oftheir own beneficial interests in Symphony Shares comprising, in aggregate,121,961 Symphony Shares, representing approximately 0.4 per cent. of Symphony'sexisting issued share capital. 16. Financing arrangements It is estimated that full acceptance of the Offer would require the payment byRedstone of a maximum of approximately £16.9 million in cash. Evolution Securities is satisfied that the necessary financial resources areavailable to Redstone to enable it to implement the Offer in full. The payment of interest on, repayment of or security for any liability(contingent or otherwise), will not depend to any significant extent on thebusiness of the Symphony Group. 17. Other arrangements The inter-company loan between Eckoh and Symphony will remain in place followingthe Offer. The following changes have been made to the loan: if Symphony andRedstone default on any repayments, Eckoh may require the loan to be satisfiedin part or in full by the issue to it of an equivalent amount of RedstoneShares, the rate of interest has been reduced to 100 basis points above the baserate of Barclays, from time to time, and minor alterations have been made to theterm of the loan. Daniel Stewart & Company considers the terms of the loan to befair and reasonable. Evolution Securities has agreed to waive its options over 400,000 SymphonyShares. 18. Miscellaneous This announcement has been issued by Evolution Securities. Evolution Securities,which is regulated in the UK by the Financial Services Authority, is actingexclusively for Redstone in connection with the Offer and no one else and willnot be responsible to anyone other than Redstone for providing the protectionsafforded to clients of Evolution Securities Limited nor for providing advice inrelation to the Offer. Daniel Stewart & Company, which is regulated in the UK by the Financial ServicesAuthority, is acting as financial advisor to Symphony and no one else inconnection with the Offer and will not be responsible to anyone other thanSymphony for providing the protections afforded to clients of Daniel Stewart &Company nor for providing advice in relation to the Offer. No offer or invitation to acquire or exchange securities in Redstone or Symphonyis being made now. Any such offer or invitation will only be made in documentsto be published in due course (if any) and any such acquisition or exchangeshould be made solely on the basis of information contained in any suchdocuments. The Offer will not be made, directly or indirectly, in or into, or by the use ofmails or any means or instrumentality (including, without limitation,telephonically or electronically) of interstate or foreign commerce of, or anyfacility of a national securities exchange of, the United States, Canada,Australia or Japan and the Offer will not be capable of acceptance by any suchuse, means, instrumentality or facilities from or within the United States,Canada, Australia or Japan. Accordingly, copies of this announcement and anyrelated documents are not being, and must not be, directly or indirectly, mailedor otherwise forwarded, distributed or sent in or into or from the UnitedStates, Canada, Australia or Japan and persons receiving this announcement andany related document (including custodians, nominees and trustees) must not mailor otherwise forward, distribute or send it in, into or from the United States,Canada, Australia or Japan or such other jurisdiction where to do so wouldconstitute a violation of the relevant laws of such jurisdiction. Doing so mayrender invalid any purposed acceptance of the Offer. The availability of the Offer to persons who are not resident in the UnitedKingdom may be affected by the laws of the relevant jurisdictions. Persons whoare not resident in the United Kingdom should inform themselves about andobserve any applicable 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 or possible offer, withor without terms. Accordingly, the offer period begins on 22 June 2006. The above disclosure requirements are set out in more detail in Rule 8 of theCode. In particular, Rule 8.3 requires public disclosure of dealings during theoffer period by persons who own or control, or who would as a result of anytransaction own or control, one per cent. or more of any class of the relevantsecurities of Symphony and Redstone. Relevant securities include Symphony Sharesand Redstone Shares, securities of Symphony and Redstone carrying conversion orsubscription rights into such shares, options in respect of and derivativesreferenced to such shares. In the case of the Offer, this requirement will applyuntil the first closing date of the Offer or, if later, the date when the Offerbecomes or is declared unconditional as to acceptances or lapses. If you are in any doubt as to the application of Rule 8 to you, please contactan independent financial advisor authorised under the Financial Services andMarkets Act 2000, consult the Panel's website at www.thetakeoverpanel.org.uk orcontact the Panel on telephone number +44 20 7638 0129; fax +44 20 7236 7013. The Symphony Directors accept responsibility for the information contained inthis announcement relating to Symphony and its subsidiaries, themselves andtheir immediate families and connected persons. The Redstone Directors acceptresponsibility for all the other information contained in this announcement. Tothe best of the knowledge and belief of the Redstone Directors and the SymphonyDirectors (who have taken all reasonable care to ensure that such is the case)the information contained herein for which they are respectively responsible isin accordance with the facts and does not omit anything likely to affect theimport of such information. APPENDIX I Conditions and further terms of the Offer The Offer, which will be made by Evolution on behalf of Redstone, will complywith the applicable rules and regulations of the City Code. The Offer will begoverned by English law and will be subject to the jurisdiction of the courts ofEngland and to the terms and conditions set out in the Offer Document and Formof Acceptance The Offer is subject to the following conditions: (a) valid acceptances of the Offer being received (and not, where permitted,withdrawn) by not later than 3.00 p.m. on the First Closing Date or such latertime(s) and/or date(s) as Redstone may, with the consent of the Panel or subjectto the Code, decide in respect of not less than 90 per cent. (or such lowerpercentage as Redstone may decide) in nominal value of the Symphony Shares towhich the Offer relates, provided that this condition will not be satisfiedunless Redstone and/or any of its wholly-owned subsidiaries shall have acquiredor agreed to acquire (whether pursuant to the Offer or otherwise), SymphonyShares carrying, in aggregate, more than 50 per cent. of the voting rights thennormally exercisable at a general meeting of Symphony (including for thispurpose, to the extent (if any) required by the Panel, any voting rightsattaching to any Symphony Shares which may be unconditionally allotted or issuedbefore the Offer becomes or is declared unconditional as to acceptances, whetherpursuant to the exercise of any outstanding conversion or subscription rights orotherwise). For the purpose of this condition: (i) the expression "Symphony Shares to which the Offer relates" shall be construed in accordance with sections 428 to 430F of the Act; and (ii) Symphony Shares which have been unconditionally allotted but not issued shall be deemed to carry the voting rights which they will carry on issue; (b) the passing at the Extraordinary General Meeting (or at any adjournmentthereof) of Redstone of any resolution or resolutions which are necessary or, inthe opinion of Redstone, desirable to approve, fund, effect and implement theOffer and the acquisition of Symphony and of any Symphony Shares; (c) the London Stock Exchange agreeing to admit the New Redstone Shares totrading on AIM and (unless the Panel otherwise agrees) such admission becomingeffective in accordance with the AIM Rules. (d) to the extent that the acquisition of the Symphony Shares would constitute arelevant merger within the meaning of section 23 of the Enterprise Act 2002, theOffice of Fair Trading indicating, in terms reasonably satisfactory to Redstone,that it does not intend to refer the proposed acquisition of Symphony byRedstone, or any aspect of it, to the Competition Commission; (e) no central bank, government or governmental, quasi-governmental,supranational, statutory, administrative or regulatory body, or any court,institution, investigative body, association, trade agency or professional orenvironmental body or any other similar person or body in any jurisdiction(each, a "Relevant Authority") having decided to take, institute, implement orthreaten any action, proceeding, suit, investigation, enquiry or reference orenacted, made or proposed any statute, regulation, decision or order or havingtaken any other step or done anything and there not continuing to be outstandingany statute, regulation, decision or order which would or might reasonably beexpected to: (i) restrict or restrain, prohibit, delay, impose additional adverse conditionsor obligations with respect to, or otherwise interfere with the implementationof, the Offer or the acquisition of any Symphony Shares by Redstone or anymatters arising therefrom; (ii) result in a material delay in the ability of Redstone, or render Redstoneunable, to acquire some or all of the Symphony Shares; (iii) require, prevent or materially delay the divestiture (or materially alterthe terms envisaged for such divestiture) by any member of the wider RedstoneGroup or any member of the wider Symphony Group of all or any portion of theirrespective businesses, assets or properties or impose any limitation on theability of any of them to conduct their businesses or own their respectiveassets or properties or any part thereof; (iv) impose any material limitation on, or result in a delay in, the ability ofany member of the wider Redstone Group to acquire or hold or exerciseeffectively, directly or indirectly, all or any rights of ownership of shares orother securities of any member of the wider Symphony Group or on the ability ofany member of the wider Symphony Group to hold or exercise effectively, directlyor indirectly, all or any rights of ownership of shares or other securities orto exercise management control over any other member of the wider SymphonyGroup; (v) require any member of the wider Redstone Group or the wider Symphony Group to offer to acquire any shares or other securities or rights thereover in any memberof the wider Symphony Group (other than in Symphony pursuant to the Offer) ownedby any third party; (vi) make the Offer or its implementation or the proposed acquisition by Redstoneof any shares or other securities in Symphony or the acquisition or control of Symphony or any member of the wider Symphony Group,illegal, void or unenforceablein or under the laws of any jurisdiction or directly or indirectly restrict or delay, prohibit or otherwise interfere with the implementation of, or impose additionalconditions or obligations with respect to, or otherwise challenge, the Offer orthe acquisition of any shares in Symphony, or control of Symphony, by Redstone; (vii) result in any member of the wider Symphony Group ceasing to be able to carryon business under any name under which it presently does so, the consequences of which would be material in the context of the Symphony Group taken as a whole; (viii) impose any limitation on the ability of any member of the wider RedstoneGroup or the wider Symphony Group to conduct or co-ordinate or integrate itsbusiness, or any part of it, with the business of any other member of the widerRedstone Group or the wider Symphony Group; or (viii) otherwise materially and adversely affect the business, assets and profitsof the wider Symphony Group taken as a whole, and all applicable waiting and othertime periods during which any such Relevant Authority could decide to take, institute, implement or threaten any such action, proceeding,suit, investigation,enquiry or reference or otherwise intervene having expired,lapsed or been terminated; (f) all authorisations, orders, grants, recognitions, consents, confirmations,clearances, licences, permissions and approvals ("authorisations") required bylaw in any jurisdiction for or in respect of the Offer and the proposedacquisition of any shares or securities, directly or indirectly, in, or controlof, Symphony or any member of the wider Symphony Group by any member of thewider Redstone Group having been obtained in terms and/or form reasonablysatisfactory to Redstone from all appropriate Relevant Authorities or (withoutprejudice to the generality of the foregoing) from any persons or bodies withwhom any member of the wider Redstone Group or the wider Symphony Group hasentered into contractual arrangements and such authorisations together with allauthorisations necessary for any member of the wider Symphony Group to carry onits business remaining in full force and effect and there being no notice orintimation of any intention to revoke, suspend, modify or not to renew the sameand all necessary filings having been made, all appropriate waiting and othertime periods (including extensions thereto) under any applicable legislation andregulations in any jurisdiction having expired, lapsed or been terminated andall necessary statutory or regulatory obligations in any jurisdiction in respectof the Offer or the proposed acquisition of Symphony by Redstone or of anySymphony Shares or any matters arising therefrom having been complied with inall material respects; (g) there being no provision of any agreement, permit, lease, licence or otherinstrument to which any member of the wider Symphony Group is a party or by orto which it or any of its assets may be bound or subject which, as a consequenceof the making or implementation of the Offer or the acquisition by Redstonedirectly or indirectly of Symphony or because of a change in the control ormanagement of Symphony or any member of the wider Symphony Group, would, save asDisclosed, result in (in each case to an extent which is material in the contextof the wider Symphony Group taken as a whole): (i) any monies borrowed by, or other indebtedness (actual or contingent) of, or grant available to, any member of the wider Symphony Group becoming repayable orcapable of being declared repayable immediately or earlier than the stated maturityor repayment date or the ability of any member of the wider Symphony Group to borrowmoneys or incur indebtedness being or becoming capable of being withdrawn or inhibited; (ii) any such agreement, arrangement, permit, lease, licence or other instrumentor any right, interest, liability or obligation of any member of the wider SymphonyGroup therein, being terminated or adversely modified or affected or any adverseaction being taken or any onerous obligation or liability arising thereunder; (iii) any mortgage, charge or other security interest being created over the wholeor any part of the business, property or assets of any member of the wider SymphonyGroup or any such security (whenever arising) becoming enforceable; (iv) the value of the wider Symphony Group or its financial or trading positionor prospects being prejudiced or adversely affected; (v) any assets or interests of any member of the wider Symphony Group being or falling to be charged or disposed of; (vi) the rights, liabilities, obligations or interests or business of any memberof the wider Symphony Group in or with any other person, firm or company (or anyarrangement relating to such interest or business) being terminated or adverselymodified or affected; (vii) any member of the wider Symphony Group ceasing to be able to carry on businessunder any name under which it currently does so; or (viii) the creation of any liability, actual or contingent, by any member of thewider Symphony Group; (h) since 31 March 2006, save as Disclosed, no member of the Symphony Grouphaving: (i) save for Symphony Shares issued pursuant to the exercise of options granted under the Symphony Share Option Schemes or as between Symphony and wholly-owned subsidiaries of Symphony ("Intra-Symphony Group Transactions"))issued or agreedto issue or authorised or proposed the issue of additional shares of any class orsecurities convertible into or rights, warrants or options to subscribe for or acquire any such shares or convertible securities; (ii) other than to another member of the Symphony Group,recommended, declared, paid or made or proposed to recommend, declare, pay or make any dividend, bonus or other distribution (whether payable in cash or otherwise) other than dividendslawfully paid to Symphony or wholly-owned subsidiaries of Symphony; (iii) save for Intra-Symphony Group Transactions, merged or demerged with or acquired any body corporate, partnership or business; (iv) save for Intra-Symphony Group Transactions, acquired, or (other than in theordinary course of business) disposed of, transferred, mortgaged or charged or created any security interest over any asset or any right, title or interest in any asset (including shares and trade investments) or authorised,proposed or announcedany intention to do so which, in any such case, is material in the context of theSymphony Group taken as a whole; (v) save for Intra-Symphony Group Transactions, issued or authorised or proposedthe issue of any debentures or incurred or increased any indebtedness orcontingent liability or made, authorised, proposed or announced an intention topropose any change in its share or loan capital; (vi) entered into or varied or announced its intention to enter into or vary anymaterial contract; (vii) save for Intra-Symphony Group Transactions, entered into, implemented,authorised or proposed any reconstruction, amalgamation, scheme of arrangementor other transaction or arrangement otherwise than in the ordinary course ofbusiness or announced any intention to do so; (viii) entered into, or varied in any material respect the terms of, anycontract or agreement with any of the directors or senior executives of Symphonyor any of its subsidiaries; (ix) taken or proposed any corporate action or had any legal proceedings startedor threatened against it or had any petition presented for its winding-up(voluntary or otherwise), dissolution or reorganisation or for the appointmentof a receiver, administrator, administrative receiver, trustee or similarofficer of all or any of its assets and/or revenues or any analogous proceedingsin any jurisdiction which may have a materially adverse effect in the context ofthe Symphony Group as a whole; (x) waived or compromised any claim which is material in the context of thewider Symphony Group taken as a whole other than in the ordinary course ofbusiness; (xi) save in respect of wholly-owned members of the Symphony Group, made anymaterial amendment to its memorandum or articles of association; (xii) purchased, redeemed or repaid or proposed the purchase, redemption orrepayment of any of its own shares or other securities or reduced or made anyother change to any part of its share capital; (xiii) been unable or admitted that it is unable to pay its debts or having stoppedor suspended (or threatened to stop or suspend) payment of its debts generally orceased or threatened to cease carrying on all or a substantial part of its business; or (xiv) entered into, varied or modified in any material respect any contract, commitment or agreement with respect to any of the transactions,matters or eventsreferred to in this condition (h) or announced an intention to do so; (i) since 31 March 2006, save as Disclosed: (i) no litigation, arbitration, prosecution or other legal proceedings having beeninstituted, announced or threatened or become pending or remaining outstanding byor against any member of the wider Symphony Group or to which any member of thewider Symphony Group is or may become a party (whether as claimant, respondent orotherwise) and no enquiry or investigation by or complaint or reference to any Relevant Authority or other investigative body having been threatened, announced,implemented or instituted or remaining outstanding against or in respect of anymember of the wider Symphony Group which, in any such case, would reasonably beexpected adversely to affect any member of the wider Symphony Group to an extentwhich is material in the context of the Symphony Group taken as a whole; (ii) no material adverse change having occurred in the business, assets, financialor trading position, profits or prospects of the wider Symphony Group taken as a whole; (iii) no material contingent or other liability having arisen which would reasonablybe expected materially adversely to affect the wider Symphony Group taken as a whole; (iv) no investigation by any Relevant Authority having been threatened,announced,implemented or instituted or remaining outstanding which in any case would be likelyto have a material adverse effect on the financial position of the Symphony Grouptaken as a whole; (j) save as Disclosed, Redstone not having discovered that: (i) any business, financial or other information concerning any member of thewider Symphony Group publicly disclosed or disclosed to Redstone at any time byor on behalf of any member of the Symphony Group is misleading, contains amisrepresentation of fact or omits to state a fact necessary to make theinformation contained therein not misleading which in either such case ismaterial in the context of the wider Symphony Group taken as a whole; (ii) any member of the wider Symphony Group is subject to any liability, actualor contingent which is material in the context of the wider Symphony Group takenas a whole; (iii) any past or present member of the wider Symphony Group has not compliedwith all applicable legislation or regulations of any jurisdiction with regardto the storage, disposal, discharge, spillage, leak or emission of any waste orhazardous substance or any substance likely to impair the environment or to harmhuman health or otherwise relating to environmental matters (whichnon-compliance might give rise to any liability (whether actual or contingent)on the part of any member of the wider Symphony Group which is material in thecontext of the Symphony Group taken as a whole) or that there has otherwise beenany such disposal, discharge, spillage, leak or emission (whether or not thesame constituted a non-compliance by any person with any such legislation orregulations and wherever the same may have taken place) which in any such casemight give rise to any liability (whether actual or contingent) on the part ofany member of the wider Symphony Group which is material in the context of theSymphony Group taken as a whole; (iv) there is, or is likely to be, any liability (whether actual or contingent)to make good, repair, reinstate or clean up any property now or previouslyowned, occupied or made use of by any past or present member of the widerSymphony Group or any controlled waters under any environmental legislation,regulation, notice, circular or order of any Relevant Authority or otherwise andwhich is material in the context of the Symphony Group taken as a whole; or (v) circumstances exist (whether as a result of the making of the Offer orotherwise) which would be likely to lead to any Relevant Authority instituting,or whereby any member of the wider Symphony Group or the wider Redstone Groupwould be likely to be required to institute, an environmental audit or take anyother steps which in any such case would be likely to result in any actual orcontingent liability on the part of any member of the wider Symphony Group orthe wider Redstone Group to improve or install new plant or equipment or makegood, repair, re-instate or clean up any land or other asset now or previouslyowned, occupied or made use of by any member of the wider Symphony Group whichliability is or is likely to be material in the context of the Symphony Grouptaken as a whole. Redstone reserves the right to waive all or any of conditions (c) to (i)(inclusive) above, in whole or in part. Conditions (c) to (j) (inclusive) mustbe fulfilled or waived by midnight on the 21st day after the later of the FirstClosing Date and the date on which condition (a) is fulfilled (or such laterdate as the Panel may agree). Redstone shall be under no obligation to waive ortreat as fulfilled any of conditions (c) to (j) (inclusive) by a date earlierthan the latest date specified above for the fulfilment thereof notwithstandingthat the other conditions of the Offer may at such earlier date have been waivedor fulfilled and that there are at such earlier date no circumstances indicatingthat any of such conditions may not be capable of fulfilment. If Redstone is required by the Panel to make an offer for Symphony Shares underthe provisions of Rule 9 of the Code, Redstone may make such alterations to theconditions as are necessary to comply with the provisions of that Rule. The Offer will lapse if, before 3.00 p.m. on the first closing date of the Offeror the date on which the Offer becomes or is declared unconditional as toacceptances (whichever is later), (i) the Offer or any part of it is referred tothe Competition Commission; or (ii) following a request to the EuropeanCommission under Article 22(3) of Council Regulation 139/2004/EC (the "Regulation") in relation to the Offer or any part of it, which request isaccepted by the European Commission, the European Commission initiatesproceedings under Article 6(1)(c) of the Regulation. If the Offer lapses, it will cease to be capable of further acceptance andaccepting Symphony Shareholders and Redstone will cease to be bound by Forms of Acceptancesubmitted on or before the time when the Offer lapses. Unless otherwise determined by Redstone and permitted by applicable law andregulation, the Offer is not being made, directly or indirectly, in or into, orby the use of the mails or by any means or instrumentality (including, withoutlimitation, telephonically or electronically) of interstate or foreign commerce,or any facility of a national securities exchange, of a Restricted Jurisdiction(including the United States, Canada, Australia or Japan) and the Offer is notcapable of acceptance by any such use, means, instrumentality or facility orfrom within a Restricted Jurisdiction. Accordingly, copies of this announcement,the Form of Acceptance (in respect of certificated Symphony Shares) and anyrelated documents are not being, and must not be, directly or indirectly, mailedor otherwise forwarded, distributed or sent in or into or from a RestrictedJurisdiction and persons receiving such documents (including, withoutlimitation, custodians, nominees and trustees) must not mail or otherwiseforward, distribute or send them in or into or from a Restricted Jurisdiction.Doing so may render invalid any purported acceptance of the Offer. APPENDIX II Definitions The following definitions apply throughout this announcement unless the contextotherwise requires: "Acquisition" the proposed acquisition of Symphony by Redstone to be effected by means of the Offer "Act" the Companies Act 1985 (as amended) "AIM Rules" the rules governing the admission to, and operation of, AIM as set out in the AIM Rules for Companies published by the London Stock Exchange from time to time "AIM" AIM, the market of that name operated by the London Stock Exchange "Announcement" this announcement dated 22June 2006 "Australia" the commonwealth of Australia, its states, territories or possessions "Barclays" Barclays Bank PLC "basic Offer TTE a transfer to escrow instruction (as defined in the CRESTInstruction" manual) "business day" a day (not being a Saturday, a Sunday or a public holiday) on which clearing banks in the City of London are open for normal business "Canada" Canada, its possessions, provinces and territories and all areas subject to its jurisdiction or any political subdivision thereof "Capita Capita Registrars, Corporate Actions, The Registry, 34Registrars" or Beckenham Road, Beckenham, Kent, BR3 4TU, Redstone's receiving"Escrow Agent" agent for the purposes of the Offer and a trading division of Capita IRG Plc "certificated" in relation to a share or other security, not in uncertificatedor "in form (that is, not in CREST)certificatedform" "Circular" the circular to be sent to Redstone Shareholders containing information relating to the Offer and the Extraordinary General Meeting "Closing Price" the closing middle market quotation of a share as derived from the AIM Appendix of the Daily Official List "Code" The City Code on Takeovers and Mergers "Company" or Redstone plc"Redstone" "connected has the meaning given to that term in section 346 of the Actperson" "CREST Manual" the manual issued by CRESTCo from time to time "CREST member" a person who has been admitted by CRESTCo as a system-member (as defined by in the Regulations) "CREST a person who is, in relation to CREST, a system-participant (asparticipant" defined in the Regulations) "CREST payment" has the meaning given to that term in the CREST Manual "CREST sponsor" a CREST participant admitted to CREST as a CREST sponsor "CREST sponsored a CREST member admitted to CREST as a sponsored membermember" "CREST" the relevant system (as defined in the Regulations) in respect of which CRESTCo is the operator "CRESTCo" CRESTCo Limited "Daily Official the Daily Official List of the London Stock ExchangeList" "Daniel Stewart Daniel Stewart & Company Plc& Company" "Disclosed" means (i) as disclosed in Symphony's report and accounts for the year ended 31 March 2005; (ii) as disclosed in Symphony's preliminary results for the year ended 31 March 2006; (iii) as publicly announced by Symphony (by the delivery of an announcement to an authorised Regulatory Information Service prior to 22 June 2006; (iv) as disclosed in this announcement; or (v) as otherwise disclosed in writing, or in the documentation or written information provided, to Redstone or its advisers by or on behalf of Symphony prior to 22 June 2006 in the context of the Offer "Eckoh Shares" ordinary shares of 0.25p each in the capital of Eckoh "Eckoh" Eckoh Technologies Plc "Electronic the inputting and settling of a TTE Instruction whichAcceptance" constitutes or is deemed to constitute an acceptance of the Offer on the terms set out in this announcement "Enlarged Group" the combined businesses of the Redstone Group and the Symphony Group following the Offer becoming or being declared unconditional in all respects "ESA an Escrow Account Adjustment Input (AESN), transaction typeInstruction" "ESA" (as described in the CREST Manual) "Evolution Evolution Securities LimitedSecurities" "Extraordinary the extraordinary general meeting of Redstone to be held toGeneral Meeting" approve the issue of the New Redstone Shares or at any adjournment thereof, notice of which is set out in the Circular "First Closing the date 21 days following the date on which the Offer DocumentDate" is posted "Form of the form of acceptance, election and authority relating to theAcceptance" Offer in respect of certificated Symphony Shares "Japan" Japan, its cities, prefectures, territories and possessions "London Stock London Stock Exchange plcExchange" "member account the identification code or number attached to any memberID" account in CREST "New Redstone the 381,350,000 new Redstone Shares proposed to be issued byShares" Redstone pursuant to the Placing "Offer" the offer by Evolution Securities, on behalf of Redstone, on the terms and subject to the conditions set out in this announcement and the Form of Acceptance (in respect of certificated Symphony Shares), to acquire all of the Symphony Shares (including, where the context requires, any subsequent revision, variation, extension or renewal of such offer) "Offer Document" the document to be issued containing details of the Offer "Offer Period" has the meaning set out in paragraph 5(c) of Part B of Appendix 1 to this announcement "Offer Price" 54.5 pence for every Symphony Share "Panel" the Panel on Takeovers and Mergers "participant ID" the identification code or membership number used in CREST to identify a particular CREST member or other CREST participant "Placing" the conditional placing by Evolution Securities, on behalf of Redstone, of the New Redstone Shares pursuant to the Placing Agreement "Placing the conditional agreement dated 22 June 2006 between RedstoneAgreement" and Evolution Securities relating to the Placing, further details of which are set out in the Offer Document "Redstone the directors of Redstone at the date of this announcementDirectors" "Redstone Group" Redstone and its existing subsidiary undertakingsor "Group" "Redstone holders of existing Redstone SharesShareholders" "Redstone ordinary shares of 1 penny each in the capital of RedstoneShares" "Regulations" the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755) "Regulatory any channel recognised as a channel for the dissemination ofInformation regulatory information by listed companies as defined in theService" AIM Rules "Resolutions" the resolutions to be put to the Redstone Shareholders at the Extraordinary General Meeting in connection with the allotment and issue of the New Redstone Shares "Restricted the United States, Canada, Australia or Japan or any otherJurisdiction" jurisdiction where extension or acceptance of the Offer would violate the law of that jurisdiction "Securities Act" the United States Securities Act 1933, as amended "SME" small and medium sized enterprises "Symphony the directors of Symphony at the date of this announcementDirectors" or"Symphony Board" "Symphony Group" Symphony and its existing subsidiary undertakings "Symphony holders of Symphony OptionsOptionholders" "Symphony options or other rights to acquire Symphony Shares under theOptions" Symphony Share Option Schemes or otherwise "Symphony Share Symphony's unapproved share option scheme and long termOption Schemes" incentive plan "Symphony holders of Symphony SharesShareholders" "Symphony the existing issued fully paid ordinary shares of 2 pence eachShares" in the capital of Symphony and any further such shares which are unconditionally allotted or issued and fully paid or credited as fully paid before the date on which the Offer closes (or such earlier date, not being earlier than the date on which the Offer becomes or is declared unconditional as to acceptances as Redstone may, subject to the Code, decide) "Symphony Symphony Telecom LimitedTelecom" "Symphony" Symphony Telecom Holdings plc "TFE A transfer from escrow instruction (as defined in the CRESTInstruction" Manual) "TTE a transfer to escrow instruction (as defined in the CRESTInstruction" Manual) "UK Listing The Financial Services Authority acting in its capacity as theAuthority" competent authority for the purposes of Part VI of the Financial Services and Markets Act 2000 "uncertificated" in relation to a share or other security, recorded on theor "in relevant register in uncertificated form in CREST and title touncertificated which, by virtue of the Regulations, may be transferred byform" means of CREST "United Kingdom" the United Kingdom of Great Britain and Northern Irelandor "UK" "US" or "United the United States of America, its territories and possessions,States" any state of the United States of America and the District of Columbia and all other areas subject to its jurisdiction "wider Redstone means Redstone, its subsidiaries, subsidiary undertakings andGroup" associated undertakings and any other body corporate, partnership, joint venture or person in which Redstone and such undertakings (aggregating their interests) have an interest in 20 per cent. or more of the voting or equity capital (or the equivalent) "wider Symphony means Symphony, its subsidiaries, subsidiary undertakings andGroup" associated undertakings and any other body corporate, partnership, joint venture or in person in which Symphony and such undertakings (aggregating their interests) have an interest in 20 per cent. or more of the voting or equity capital (or the equivalent) Save where otherwise stated, for the purpose of this announcement, "subsidiary","subsidiary undertaking", "associated undertaking" and "undertaking" shall beconstrued in accordance with the Act (but for this purpose ignoring paragraph 20(1)(b) of Schedule 4A of the Act). In this announcement, the singular includes the plural and vice versa, unlessthe context otherwise requires. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
CTP.LEckoh Technologies