Proposed Placing

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION. UPON THE PUBLICATION OF THE ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

Mereo BioPharma Group plc

("Mereo" or the "Company" or the "Group")

Proposed Placing

Proceeds will be used to accelerate development of orphan candidate BPS-804

Paediatric Phase 2 / 3 study in Osteogenesis Imperfecta (OI) patients to be initiated in 2017

London, 29 March 2017 - Mereo BioPharma Group plc (AIM: MPH), a clinical stage, UK-based, biopharmaceutical company focused on rare and specialty diseases, is pleased to announce that it intends to undertake a placing to raise a minimum of £15 million (the "Placing") to support an accelerated development of BPS-804 for the treatment of the orphan disease, osteogenesis imperfecta (OI) (brittle bone disease), following its acceptance to participate in the European Medicine Agency's Adaptive Pathways Programme.

Denise Scots-Knight, CEO of Mereo, commented:

"This Placing will provide funds to accelerate and expand the development of BPS-804 in the orphan disease osteogenesis imperfecta to include children. OI is a serious, debilitating and painful disease that affects a significant number of children as well as adults. We believe BPS-804 could reduce the incidence of fractures, and therefore meaningfully improve quality of life. Following our acceptance to participate in the European Medicine Agency's Adaptive Pathways Programme, we remain on track to initiate a potentially pivotal clinical programme for BPS-804 in H1 2017 that will now include a paediatric study."

Details of the Placing

The Placing will be conducted by way of a bookbuild process, which will be launched immediately following this announcement, in accordance with the terms and conditions set out in the Appendix to this announcement. Cantor Fitzgerald Europe and RBC Capital Markets are acting as joint bookrunners in connection with the Placing. A Placing Agreement has been entered into today between the Company, Cantor Fitzgerald Europe and RBC Capital Markets in connection with the Placing.

The Company will utilise its existing shareholder authorities, put in place upon admission to AIM in June 2016, which allows non-pre-emptive placings of up to 9,651,119 new ordinary shares of £0.003 each in the Company ("Ordinary Shares"), representing up to 15.0 per cent of the Company's existing issued ordinary share capital.

The final number of new Ordinary Shares (the "Placing Shares") will be agreed by Cantor Fitzgerald Europe, RBC Capital Markets and Mereo at the close of the bookbuild, which will be at 3.00 p.m. on 31 March 2017, or such earlier time as the Company, Cantor Fitzgerald Europe and RBC Capital Markets determine. Details of the number of Placing Shares, the price per Placing Share (the "Placing Price") and the approximate gross proceeds of the Placing will be announced as soon as practicable after the closing of the bookbuild. The timing for the close of the bookbuild and allocation of the Placing Shares shall be at the discretion of Cantor Fitzgerald Europe and RBC Capital Markets, in consultation with the Company.

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM ("Admission"). It is expected that Admission will become effective and that dealings in the Placing Shares, will commence at 8.00 a.m. on or around 3 April 2017 (or such later date as Cantor Fitzgerald Europe, RBC Capital Markets and the Company may agree).

Use of Proceeds

Mereo intends to use the net proceeds from the Placing for:

· the acceleration of its plans for BPS-804, following its acceptance to participate in the European Medicine Agency's Adaptive Pathways Programme, by commencing a potentially pivotal paediatric Phase 2b study in Osteogenesis Imperfecta (OI) patients aged between 5 and 18 years old. This will expand the scope of the pivotal clinical programme as part of which the adult study is due to start in the H1 2017;

· the associated CMC work needed to complete the quality package aspects of its submission including the production of validation batches and associated analysis in preparation for the accelerated submission of its registration package to the EMA; and

· the scientific and regulatory advice required in preparation for submission.

For further information, please contact:

About Mereo

Mereo is a UK-based biopharmaceutical company focused on the development of innovative medicines that aim to address unmet medical needs in rare and specialty disease areas and improve patient quality of life. The Company seeks to selectively acquire development-stage product candidates with demonstrated clinically meaningful data from large pharmaceutical companies and to rapidly progress these product candidates to subsequent value inflection points.

Mereo combines the operational discipline and efficiency of a small company with the financial resources to conduct comprehensive clinical studies. The Company has the option to directly commercialise products, for example in orphan diseases, in addition to partnering or divesting its products.

Mereo's initial portfolio consists of three mid-late stage clinical assets that were acquired from Novartis in July 2015. BPS-804 is being developed for the prevention of fractures resulting from osteogenesis imperfecta (brittle bone disease); acumapimod (BCT-197), is being developed to treat inflammation in patients with an AECOPD; and BGS-649 is a once-weekly pill to restore normal testosterone levels in men with hypogonadotropic hypogonadism.

In H1 2016 the Company initiated a Phase 2 study with acumapimod and a Phase 2b study with BGS-649. Mereo expects to commence the first pivotal trial for BPS-804 during H1 2017. Additional product opportunities, from a range of large pharmaceutical and biotechnology companies, are under active evaluation.

About osteogenesis imperfecta (OI)

OI is a rare genetic disorder that is characterized by fragile bones that break easily. In addition to fractures, people with OI often have muscle weakness, hearing loss, fatigue, joint laxity, curved bones, scoliosis, and short stature. The majority of cases of OI (estimated at approximately 90%) are caused by a dominant mutation in a gene coding for type I collagen, a key component of healthy bone. Current treatment of OI is supportive, focusing on minimizing fractures and maximizing mobility, but to date, there are no EMA or FDA approved treatments.

About the Adaptive Pathway

The Adaptive Pathways approach is part of the European Medicines Agency's (EMA) efforts to improve timely access for patients to new medicines, primarily in areas of high medical need. Adaptive Pathways is a scientific concept for medicine development and data generation which allows for early and progressive patient access to a medicine. The approach makes use of the existing European Union (EU) regulatory framework for medicines and is based on three principles:

1) Iterative development, which either means:

a. approval in stages, beginning with a restricted patient population then expanding to wider patient populations;

b. confirming the benefit-risk balance of a product, following a conditional approval based on early data (using surrogate endpoints) considered predictive of important clinical outcomes;

2) Gathering evidence through real-life use to supplement clinical trial data;

3) Early involvement of patients and health-technology-assessment bodies in discussions on a medicine's development.

For more information, visit:

http://www.ema.europa.eu/ema/index.jsp?curl=pages/regulation/general/general_content_000601.jsp 

This Announcement should be read in its entirety. In particular, you should read and understand the information provided in the "Important Notice" section below.

The Appendix to this Announcement (which forms part of this Announcement) sets out the terms and conditions of the Placing. Persons who have chosen to participate in the Placing, by making an oral or written offer to acquire Placing Shares, will be deemed to have read and understood this Announcement in its entirety (including the Appendix) and to be making such offer on the terms and subject to the conditions herein, and to be providing the representations, warranties, agreements, acknowledgements and undertakings contained in the Appendix.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United

States.

IMPORTANT NOTICE

This announcement, including the Appendix (together, the "Announcement"), and the information contained herein is not for release, publication or distribution, directly or indirectly, in whole or in part, in or into or from the United States, Canada, Australia, Japan or the Republic of South Africa, or any other jurisdiction where to do so might constitute a violation of the relevant laws or regulations of such jurisdiction (the "Restricted Jurisdictions"). This Announcement does not constitute or form part of an offer to sell or issue or a solicitation of an offer to buy, subscribe for or otherwise acquire any securities in any jurisdiction including, without limitation, the Restricted Jurisdictions or any other jurisdiction in which such offer or solicitation would be unlawful. This Announcement and the information contained in it is not for publication or distribution, directly or indirectly, to persons in a Restricted Jurisdiction unless permitted pursuant to an exemption under the relevant local law or regulation in any such jurisdiction.

This Announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This Announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, (the "Securities Act") and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.

No action has been taken by the Company, Cantor Fitzgerald Europe, RBC Capital Markets or any of their respective directors, officers, partners, agents, employees or affiliates that would permit an offer of the Placing Shares or possession or distribution of this Announcement or any other publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons receiving this Announcement are required to inform themselves about and to observe any restrictions contained in this Announcement.

This Announcement is directed at and is only being distributed to: (A) persons in member states of the European Economic Area who are "qualified investors", as defined in article 2.1(e) of the Prospectus Directive (Directive 2003/71/EC), as amended (the "Prospectus Directive"), (B) if in the United Kingdom, persons who (i) have professional experience in matters relating to investments who fall within the definition of "investment professionals" in article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") or fall within the definition of "high net worth companies, unincorporated associations etc." in article 49(2)(a) to (d) of the FPO and (ii) are "qualified investors" as defined in section 86 of the Financial Services and Markets Act 2000, as amended ("FSMA") or (C) persons to whom it may otherwise lawfully be communicated (each, a "Relevant Person"). No other person should act on or rely on this Announcement and persons distributing this Announcement must satisfy themselves that it is lawful to do so. By accepting the terms of this Announcement, you represent and agree that you are a Relevant Person.

This Announcement must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this Announcement or the Placing relate is available only to Relevant Persons and will be engaged in only with Relevant Persons. As regards all persons other than Relevant Persons, the details of the Placing set out in this Announcement are for information purposes only.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Announcement should seek appropriate advice before taking any action.

This Announcement is not being distributed by, nor has it been approved for the purposes of section 21 of FSMA by, a person authorised under FSMA. This Announcement is being distributed and communicated to persons in the United Kingdom only in circumstances in which section 21(1) of FSMA does not apply.

No prospectus will be made available in connection with the matters contained in this Announcement and no such prospectus is required (in accordance with the Prospectus Directive) to be published.

The information contained in this Announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this Announcement or its accuracy, fairness or completeness.

Certain statements in this Announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which may use words such as "aim", "anticipate", "believe", "could", "intend", "estimate", "expect" and words of similar meaning, include all matters that are not historical facts. These forward-looking statements involve risks, assumptions and uncertainties that could cause the actual results of operations, financial condition, liquidity and dividend policy and the development of the industries in which the Company's businesses operate to differ materially from the impression created by the forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given those risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by the UK Financial Conduct Authority ("FCA"), the London Stock Exchange or applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Any indication in this Announcement of the price at which the Company's shares have been bought or sold in the past cannot be relied upon as a guide to future performance. Persons needing advice should consult an independent financial adviser. No statement in this Announcement is intended to be a profit forecast and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

Cantor Fitzgerald Europe, which is authorised and regulated in the United Kingdom by the FCA, is acting for the Company and for no one else in connection with the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Cantor Fitzgerald Europe or for providing advice in relation to the Placing, or any other matters referred to in this Announcement.

RBC Capital Markets, which is authorised and regulated in the United Kingdom by the FCA, is acting for the Company and for no one else in connection with the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to clients of RBC Capital Markets or for providing advice in relation to the Placing, or any other matters referred to in this Announcement.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by or on behalf of the Company, Cantor Fitzgerald Europe or RBC Capital Markets or by their affiliates or their respective agents, directors, officers and employees as to, or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefor is expressly disclaimed.

The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than to trading on AIM.

The Appendix to this Announcement sets out the terms and conditions of the Placing. By participating in the Placing, each person who is invited to and who chooses to participate in the Placing by making or accepting an oral and legally binding offer to acquire Placing Shares will be deemed to have read and understood this Announcement in its entirety and to be making such offer on the terms and subject to the conditions set out in this Announcement and to be providing the representations, warranties, undertakings and acknowledgements contained in the Appendix.

Members of the public are not eligible to take part in the Placing and no public offering of Placing Shares is being or will be made.

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this Announcement.

APPENDIX - TERMS AND CONDITIONS OF THE PLACING

FOR INVITED PLACEES ONLY - IMPORTANT INFORMATION

Each Placee should consult with its own advisers as to legal, regulatory, tax, business and related aspects of any subscription for Placing Shares.

These Terms and Conditions (the "Terms and Conditions") do not constitute an offer or invitation to acquire, underwrite or dispose of, or any solicitation of any offer or invitation to acquire, underwrite or dispose of, any Ordinary Shares or other securities of the Company to any person in any jurisdiction to whom it is unlawful to make such offer, invitation or solicitation in such jurisdiction. Persons who seek to participate in the Placing must inform themselves about and observe any such restrictions and must be persons who are able to lawfully receive this Announcement in their jurisdiction (all such persons being "Relevant Persons"). In particular, these Terms and Conditions do not constitute an offer or invitation (or a solicitation of any offer or invitation) to acquire, underwrite or dispose of or otherwise deal in any Ordinary Shares or other securities of the Company in the United States, Canada, Australia, Japan or the Republic of South Africa, subject to certain limited exemptions.

Members of the public are not eligible to take part in the Placing and each Placee agrees, undertakes and warrants that it is not acquiring Placing Shares on behalf of members of the public or its Retail clients (as that term is defined in the Rules of the FCA), save where the Placee does so on a fully discretionary basis and without reference to any such Retail clients. In the UK, the Placing and these Terms and Conditions are directed only at persons whose ordinary activities involve them acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses and who have professional experience in matters relating to investments falling within the definition of 'investment professionals' in Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") or are high net worth body corporates, unincorporated associations or partnerships or trustees of high value trusts as described in Article 49 of the FPO or to whom they may otherwise lawfully be communicated.

These Terms and Conditions apply to any person who offers to subscribe for Placing Shares in the Placing. Each person (a "Placee") to whom these Terms and Conditions apply, as described above, who confirms his agreement, whether by telephone or otherwise, with Cantor Fitzgerald Europe and RBC Capital Markets to subscribe for Placing Shares in the Placing, hereby agrees with Cantor Fitzgerald Europe and RBC Capital Markets to be legally and irrevocably bound by these Terms and Conditions which will be the Terms and Conditions on which the Placing Shares will be acquired in the Placing.

Capitalised terms not otherwise defined in this Appendix are as defined in the Announcement relating to the Placing of which this Appendix forms part.

These Terms and Conditions must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which these Terms and Conditions relate is available only to Relevant Persons and will be engaged in only with Relevant Persons. A Placee may not assign, transfer, or in any manner, deal with its rights and obligations under the agreement arising from the acceptance of the Placing, without the prior written agreement of Cantor Fitzgerald Europe and RBC Capital Markets, in accordance with all relevant requirements.

All times and dates in this Appendix are references to times and dates in London (United Kingdom).

Terms of the Placing

Each Placee's commitment to subscribe for a fixed number of Placing Shares under the Placing will be agreed orally with Cantor Fitzgerald Europe and RBC Capital Markets and such agreement will constitute a legally binding irrevocable commitment by a Placee, subject to the Terms and Conditions set out in this Appendix, to subscribe and pay for the relevant number of Placing Shares (the "Placing Participation") at the Placing Price. Such commitment is not capable of termination or rescission by the Placee in any circumstances except fraud. All such obligations are entered into by the Placee with Cantor Fitzgerald Europe and RBC Capital Markets acting in their capacity as agent of the Company and are therefore directly enforceable by the Company.

After such agreement is entered into, each Placee allocated Placing Shares in the Placing will be sent a confirmatory email stating the number of Placing Shares allocated to it at the Placing Price, the total subscription amount payable to Cantor Fitzgerald Europe and RBC Capital Markets and including settlement instructions (the "Confirmation Note").

Each Placee will be deemed to have read this Appendix in its entirety. Cantor Fitzgerald Europe and RBC Capital Markets are acting for the Company and no one else in connection with the Placing and will not regard any other person (whether or not a recipient of these Terms and Conditions) as a client in relation to the Placing and to the fullest extent permitted by law and applicable FCA rules, neither Cantor Fitzgerald Europe, RBC Capital Markets nor any of their affiliates will have any liability, obligation or duty to Placees or to any person other than the Company in respect of the Placing.

The Placing will comprise of up to 9,651,119 Placing Shares. The Placing Shares will rank pari passu in all respects and form one class with the existing ordinary shares of the Company in issue on Admission, including the right to receive dividends or other distributions, if any. The Placing Shares will be issued free of any encumbrance, lien or other security interest.

Application for Admission

Application will be made to London Stock Exchange for Admission of the Placing Shares to trading on AIM.

It is anticipated that Admission of the Placing Shares to AIM will become effective at 8.00 a.m. on 3 April 2017 and that dealings in the Placing Shares will commence at that time and date for normal account settlement.

Placing Agreement

Pursuant to the Placing Agreement, Cantor Fitzgerald Europe and RBC Capital Markets have agreed on behalf of and as agent of the Company, to use their reasonable endeavours to procure persons who will subscribe for the Placing Shares at the Placing Price, subject to these Terms and Conditions.

Conditions of the Placing

The Placing is conditional upon the Placing Agreement becoming unconditional in all respects and not having been terminated in accordance with its terms.

Cantor Fitzgerald Europe's and RBC Capital Market's obligations under the Placing Agreement in respect of the Placing Shares are conditional on, inter alia:-

(a) the Company having complied with its obligations under the Placing Agreement to the extent that such obligations are required prior to Admission

(b) the warranties given by the Company in the Placing Agreement being true and accurate and not misleading at the relevant times;

(c) in the opinion of Cantor Fitzgerald Europe (following consultation with RBC Capital Markets) immediately prior to Admission there not having been a material adverse change since the date of the Placing Agreement affecting the Company or any member of its group; and

(d) Admission becoming effective not later than 8 a.m. on 3 April 2017 (or such later time or date as Cantor Fitzgerald Europe (following consultation with RBC Capital Markets) may agree with the Company).

The Placing Agreement contains, inter alia, certain warranties and indemnities from the Company for the benefit of Cantor Fitzgerald Europe and RBC Capital Markets.

Right to terminate under the Placing Agreement

Cantor Fitzgerald Europe (on behalf of itself and RBC Capital Markets and having consulted with RBC Capital Markets) may, in its absolute discretion, terminate the Placing Agreement if before Admission: (i) any statement contained in the Placing Documents (as defined in the Placing Agreement) has been discovered to be untrue, incorrect or misleading in a way which in the opinion of Cantor Fitzgerald Europe (having consulted with RBC Capital Markets) is material; (ii) there has been a breach of any of the warranties given by the Company to Cantor Fitzgerald Europe and RBC Capital Markets in the Placing Agreement which in the opinion of Cantor Fitzgerald Europe (having consulted with RBC Capital Markets) is material; (iii) an event occurs or a matter arises which if it had occurred or arisen before the date of the Placing Agreement would have rendered any of the warranties untrue, incorrect or misleading in any respect and which in the opinion of Cantor Fitzgerald Europe (having consulted with RBC Capital Markets) is material; (iv) in the opinion of Cantor Fitzgerald Europe (having consulted with RBC Capital Markets) there shall have been a material adverse change affecting the Company or any member of its group; (v) in the opinion of Cantor Fitzgerald Europe (having consulted with RBC Capital Markets) it is reasonably likely that there will occur a material adverse change in the financial markets, an outbreak or escalation of hostilities, war or terrorism, a declaration of emergency or martial law or other calamity or crisis or event or any change or development involving a prospective change in national or international political, financial, economic, monetary or market conditions or currency exchange rates or controls; (vi) in the opinion of Cantor Fitzgerald Europe (having consulted with RBC Capital Markets) it is reasonably likely that there will occur a suspension of, or the occurrence of material limitations to, trading generally on the New York Stock Exchange, the NASDAQ National Market or the London Stock Exchange or a material disruption in commercial banking or securities settlement or clearance services in the United States or Europe; (vii) in the opinion of Cantor Fitzgerald Europe (having consulted with RBC Capital Markets) it is reasonably likely that there will occur an actual or prospective change or development in taxation materially affecting the Company or any member of its group, the Company's ordinary shares or the transfer of such ordinary shares or exchange controls having been imposed by the United States or the United Kingdom; (viii) in the opinion of Cantor Fitzgerald Europe (having consulted with RBC Capital Markets) it is reasonably likely that there will occur a declaration of a banking moratorium by the United States or the United Kingdom; or (ix) there has occurred, or in the opinion of Cantor Fitzgerald Europe (having consulted with RBC Capital Markets) it is reasonably likely that there will occur any other event such as to make it in the judgement of Cantor Fitzgerald Europe (having consulted with RBC Capital Markets) impracticable or inadvisable to proceed with the Placing.

The exercise by Cantor Fitzgerald Europe and RBC Capital Markets of any right of termination (or any right of waiver exercisable by Cantor Fitzgerald Europe and RBC Capital Markets) contained in the Placing Agreement or the exercise of any discretion under the Terms and Conditions set out herein is within the absolute discretion of Cantor Fitzgerald Europe and RBC Capital Markets and Cantor Fitzgerald Europe and RBC Capital Markets will not have any liability to Placees whatsoever in connection with any decision to exercise or not exercise any such rights.

By accepting the Placing Shares referred to in the Announcement to which this Appendix is annexed, each Placee agrees that, without having any liability to such Placee, Cantor Fitzgerald Europe and RBC Capital Markets may, in their absolute discretion, exercise the right, (i) to extend the time for fulfilment of any of the conditions in the Placing Agreement (provided that Placees' commitments are not extended beyond 18 April 2017); (ii) to waive, in whole or in part, fulfilment of certain of the conditions; or (iii) to terminate the Placing Agreement, in each case without consulting Placees (or any of them).

If (i) any of the conditions in the Placing Agreement are not satisfied (or, where relevant, waived); or (ii) the Placing Agreement is terminated; or (iii) the Placing Agreement does not otherwise become unconditional in all respects, the Placing will not proceed and all funds delivered by Placees to Cantor Fitzgerald Europe and RBC Capital Markets or the Company pursuant to the Placing and this Appendix will be returned to Placees at their risk without interest, and Placees' rights and obligations under the Placing shall cease and determine at such time and no claim shall be made by Placees in respect thereof.

Registration and Settlement

Settlement of transactions in the Placing Shares (ISIN: GB00BZ4G2K23) following the relevant Admission will take place within CREST (subject to certain exceptions). If a Placee wishes to receive its Placing Shares in certificated form, it should contact Kellyann Leeds at Cantor Fitzgerald Europe (+44 (0)20 7894 7913) or Daniel Tabrett at RBC Capital Markets (+44 (0)20 7653 4175) as soon as possible after receipt of its Confirmation Note. Cantor Fitzgerald Europe and RBC Capital Markets reserve the right to require settlement for, and delivery of, the Placing Shares (or a portion thereof) to Placees by such other means that it deems necessary if delivery or settlement is not possible or practicable within CREST within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in any Placee's jurisdiction.

It is expected that settlement will be on 3 April 2017 in accordance with the instructions set out in the Confirmation Note.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of 3 percentage points above The Royal Bank of Scotland plc's base rate, with interest compounded on a daily basis.

Each Placee is deemed to agree that, if it does not comply with these obligations, Cantor Fitzgerald Europe and RBC Capital Markets may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for Cantor Fitzgerald Europe's and RBC Capital Market's account and benefit (as agent for the Company), an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax or securities transfer tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf. By communicating a bid for Placing Shares, each Placee confers on Cantor Fitzgerald Europe and RBC Capital Markets all such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions which Cantor Fitzgerald Europe and RBC Capital Markets lawfully take in pursuance of such sale.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the Confirmation Note is copied and delivered immediately to the relevant person within that organisation.

Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax or securities transfer tax.

Placees will not be entitled to receive any fee or commission in connection with the Placing.

Further Terms, Confirmations and Warranties

By accepting the Placing Participation referred to in the Confirmation Note, each Placee makes the following confirmations, acknowledgements, representations, warranties and/or undertakings to Cantor Fitzgerald Europe, RBC Capital Markets and the Company and their respective directors, agents and advisers:

1. each Placee confirms, represents and warrants that it has read and understood this Announcement (including this Appendix) in its entirety and acknowledges that its Placing Participation will be governed by the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings of this Appendix;

2. each Placee acknowledges and agrees that its Placing Participation on the Terms and Conditions set out in this Appendix is legally binding, irrevocable and is not capable of termination or rescission by such Placee in any circumstances;

3. each Placee confirms, represents and warrants that it has not relied on, received or requested nor does it have any need to receive, any prospectus, offering memorandum, listing particulars or any other document (other than the Announcement), any information given or any representations, warranties, agreements or undertakings (express or implied), written or oral, or statements made at any time by the Company, Cantor Fitzgerald Europe or RBC Capital Markets or by any subsidiary, holding company, branch or associate of the Company or Cantor Fitzgerald Europe or RBC Capital Markets, or any of their respective officers, directors, agents, employees or advisers, or any other person in connection with the Placing, the Company and its subsidiaries or the Placing Shares and that in making its application under the Placing it is relying solely on the information contained in the Announcement and this Appendix and it will not be relying on any agreements by the Company and its subsidiaries or Cantor Fitzgerald Europe or RBC Capital Markets or any director, employee or agent of the Company or Cantor Fitzgerald Europe or RBC Capital Markets other than as expressly set out in this Appendix for which none of Cantor Fitzgerald Europe or RBC Capital Markets or any of their directors and/or employees and/or person(s) acting on behalf of any of them shall to the maximum extent permitted under law have any liability except in the case of fraud;

4. each Placee confirms, represents and warrants that it is sufficiently knowledgeable to understand and be aware of the risks associated with, and other characteristics of, the Placing Shares and, among others, of the fact that it may not be able to resell the Placing Shares except in accordance with certain limited exemptions under applicable securities legislation and regulatory instruments;

5. each Placee confirms, represents and warrants, if a company, that it is a valid and subsisting company and has all the necessary corporate capacity and authority to execute its obligations in connection with the Placing Participation and confirms, represents and warrants that any person who confirms to Cantor Fitzgerald Europe and/or RBC Capital Markets on behalf of a Placee an agreement to subscribe for Placing Shares is duly authorised to provide such confirmation to Cantor Fitzgerald Europe and/or RBC Capital Markets;

6. each Placee agrees that the exercise by Cantor Fitzgerald Europe and/or RBC Capital Markets of any right of termination or any right of waiver exercisable by Cantor Fitzgerald Europe and/or RBC Capital Markets contained in the Placing Agreement or the exercise of any discretion including (without limitation) the right not to enter into the Placing Agreement is within the absolute discretion of Cantor Fitzgerald Europe and RBC Capital Markets and Cantor Fitzgerald Europe and RBC Capital Markets will not have any liability to any Placee whatsoever in connection with any decision to exercise or not exercise any such rights. Each Placee acknowledges that if (i) any of the conditions in the Placing Agreement are not satisfied (or, where relevant, waived); or (ii) the Placing Agreement is terminated; or (iii) the Placing Agreement does not otherwise become unconditional in all respects, the Placing will lapse and such Placee's rights and obligations in relation to the Placing shall cease and determine at such time and no claim shall be made by any Placee in respect thereof;

7. each Placee acknowledges and agrees that Cantor Fitzgerald Europe and RBC Capital Markets are not acting for, and that it does not expect Cantor Fitzgerald Europe and RBC Capital Markets to have any duties or responsibilities towards, such Placee, including, without limitation, for providing protections afforded to customers or clients of Cantor Fitzgerald Europe or RBC Capital Markets under the FCA's Conduct of Business Source Book or advising such Placee with regard to its Placing Participation and that such Placee is not, and will not be, a customer or client of Cantor Fitzgerald Europe or RBC Capital Markets as defined by the FCA's Conduct of Business Source Book in connection with the Placing. Likewise, Cantor Fitzgerald Europe and RBC Capital Markets will not treat any payment by such Placee pursuant to its Placing Participation as Client Money governed by the FCA's Client Assets Sourcebook;

8. each Placee undertakes and agrees that it will be responsible for any stamp duty or stamp duty reserve tax in relation to the Placing Shares comprised in its Placing Participation and that neither Cantor Fitzgerald Europe nor RBC Capital Markets nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax in relation to the Placing Shares comprised in such Placee's Placing Participation;

9. each Placee confirms, represents and warrants that it is a Relevant Person and that it may lawfully subscribe for or acquire the Placing Shares comprised in such Placee's Placing Participation and that it has complied with and will comply with all applicable provisions of FSMA with respect to anything done by such Placee in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;

10. each Placee acknowledges and agrees that the agreement confirmed by the Confirmation Note is a legally binding contract between it and the Company and the Terms and Conditions of such Placee's Placing Participation will be governed by, and construed in accordance with, the laws of England and Wales to the exclusive jurisdiction of whose courts such Placee irrevocably agrees to submit;

11. each Placee agrees that it will ensure delivery and payment is completed in accordance with the settlement instructions set out in the Confirmation Note (or as separately agreed with Cantor Fitzgerald Europe and RBC Capital Markets in the case of certificated settlement) and acknowledges and agrees that time shall be of the essence as regards such Placee's obligations pursuant to its Placing Participation;

12. each Placee acknowledges and agrees that it is the responsibility of such Placee (if it is outside of the United Kingdom) to satisfy itself that, in doing so, such Placee complies with the laws of any relevant territory in connection with its Placing Participation and that it obtains any requisite governmental or other consents and observes any other applicable formalities;

13. each Placee acknowledges and agrees that the Announcement does not constitute an offer to sell, or the solicitation of an offer to subscribe for or buy, Placing Shares in any jurisdiction in which such an offer or solicitation is unlawful;

14. each Placee confirms, represents and warrants that it has complied with all relevant laws of all relevant territories, obtained all requisite governmental or other consents which may be required in connection with its Placing Participation, complied with all requisite formalities and that it has not taken any action or omitted to take any action which will or may result in Cantor Fitzgerald Europe, RBC Capital Markets, the Company or any of their respective directors, officers, agents, employees or advisers acting in breach of the legal or regulatory requirements of any territory in connection with the Placing or such Placee's Placing Participation;

15. each Placee confirms, represents and warrants that its subscription for Placing Shares does not trigger, in the jurisdiction in which such Placee is resident or located: (i) any obligation to prepare or file a prospectus or similar document or any other report with respect to such subscription; (ii) any disclosure or reporting obligation of the Company; or (iii) any registration or other obligation on the part of Cantor Fitzgerald Europe, RBC Capital Markets or the Company;

16. each Placee confirms, represents and warrants it is acting as principal and for no other person and that its Placing Participation will not give any other person a contractual right to require the issue by the Company of any Placing Shares;

17. each Placee confirms, represents and warrants that in accepting its Placing Participation it is not applying for registration as, or as a nominee or agent for, a person who is or may be a person mentioned in sections 67 to 72 inclusive and sections 93 to 97 inclusive of the Finance Act 1986;

18. each Placee confirms, represents and warrants that, to the extent applicable to it, it is aware of its obligations in connection with the Criminal Justice Act 1993, the Terrorism Act 2006, the UK Anti-Terrorism Crime and Security Act 2001, the Money Laundering Regulations 2007, the Proceeds of Crime Act 2002, Part VIII of the Financial Services and Markets Act 2000 (as amended), the Financial Services Act 2012 and the Market Abuse Regulation, it has identified its clients in accordance with the Money Laundering Regulations 2007 and it has complied fully with its obligations pursuant to those Regulations;

19. each Placee acknowledges and agrees that all times and dates in this Announcement and the Terms and Conditions set out in this Appendix may be subject to amendment and that Cantor Fitzgerald Europe and RBC Capital Markets will notify it of any such amendments;

20. each Placee acknowledges and agrees that no term or other provision of the agreement confirmed by the Confirmation Note shall be enforceable under the Contracts (Rights of Third Parties) Act 1999 by any person other than the Company, Cantor Fitzgerald Europe and RBC Capital Markets or any affiliate of Cantor Fitzgerald Europe or RBC Capital Markets or any Indemnified Person (as hereinafter defined);

21. each Placee acknowledges that any of its monies held or received by Cantor Fitzgerald Europe and RBC Capital Markets will not be subject to the protections conferred by the FCA's Client Money Rules;

22. each Placee confirms, represents and warrants that it is not a person located in the United States, it is acquiring Placing Shares in an "offshore transaction", as defined in, and in accordance with, Regulation S under the Securities Act and the Placing Shares were not offered to it by means of "directed selling efforts", as defined in Regulation S under the Securities Act;

23. each Placee confirms, represents and warrants that it has not distributed, forwarded, transferred or otherwise transmitted, and will not distribute, forward, transfer or otherwise transmit, this Announcement or any other presentation or offering materials concerning the Placing Shares into or within the United States, Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction where to do so would breach any applicable law or regulation, nor will it do any of the foregoing;

24. each Placee confirms that it is not acting on a non-discretionary basis for the account or benefit of a person resident or located within the United States, Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction where the extension of the availability of the Placing would breach any applicable law or regulation, at the time the undertaking to subscribe for Placing Shares was given and it is not acquiring the Placing Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any Placing Shares into or within the United States, Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction where to do so would breach any applicable law or regulation;

25. if it is subscribing for the Placing Shares in the United Kingdom, that each Placee is a person falling within the exemption contained in Section 86(1)(a) of the Financial Services and Markets Act 2000 (as amended) or falling within one or more of the categories of persons set out in Article 19 (Investment Professionals) or Article 49 (High net worth companies, unincorporated associations etc.) of the FPO;

26. each Placee confirms, represents and warrants that, in making the investment decision with respect to the Placing Shares, it has:-

26.1 not relied on the Company or any of its respective affiliates or on any document published by any of them;

26.2 the ability to bear the economic risk of its investment in the Placing Shares and has no need for liquidity with respect to its investment in the Placing Shares;

26.3 such knowledge and experience in financial and business matters that it is capable of evaluating the merits, risks and suitability of investing in the Placing Shares, and is able to sustain a complete loss of any investment in the Placing Shares; and

26.4 investigated independently and made its own assessment and satisfied itself concerning the relevant tax, legal, currency and other economic considerations relevant to its investment in the Placing Shares, including any federal, state and local tax consequences, affecting it in connection with its subscription for and any subsequent disposal of the Placing Shares;

27. each Placee acknowledges and agrees that it is not entitled to the protections afforded to clients of Cantor Fitzgerald Europe or RBC Capital Markets in connection with the Placing and that neither Cantor Fitzgerald Europe nor RBC Capital Markets nor any of their affiliates nor any of their respective officers, directors, employees or advisers shall be liable for any losses (including, without limitation, loss of profit, loss of business or opportunity and special interest or consequential losses), damages or costs of the Placee save as a result of fraud or for death or personal injury;

28. each Placee acknowledges that the Company, Cantor Fitzgerald Europe, RBC Capital Markets, CREST, the Registrar, any transfer agent, any distributors or dealers and their respective affiliates and others will rely on the truth and accuracy of the foregoing confirmations, warranties, acknowledgements, representations, undertakings and agreements, and agrees to notify the Company, Cantor Fitzgerald Europe and RBC Capital Markets promptly in writing if any of its confirmations, warranties, acknowledgements, representations, undertakings or agreements set out above cease to be accurate and complete and to indemnify and hold harmless on an after-tax basis the Company, Cantor Fitzgerald Europe, RBC Capital Markets and any of their respective officers, directors, agents, employees or advisers (the "Indemnified Persons") from and against any and all loss, damage, liability or expense, including reasonable costs and attorneys' fees and disbursements, which an Indemnified Person may incur by reason of, or in connection with, any representation or warranty made by such Placee as set out above not having been true when made, any misrepresentation made or any failure by such Placee to fulfil any of its undertakings or agreements set out above or any other document such Placee provides to the Company, Cantor Fitzgerald Europe or RBC Capital Markets. Such Placee irrevocably authorises each of the Company, Cantor Fitzgerald Europe and RBC Capital Markets to produce a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby;

29. each Placee acknowledges that the rights and remedies of Cantor Fitzgerald Europe, RBC Capital Markets and the Company under these Terms and Conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one right or remedy will not prevent the exercise of the other rights and/or remedies; and

30. each Placee undertakes that it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with this Announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other subscribers or sold as Cantor Fitzgerald Europe and RBC Capital Markets may in their sole discretion determine and without liability to such Placee and such Placee will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear the liability for any stamp duty or stamp duty reserve tax (together with any interest or penalties due pursuant to or referred to in these Terms and Conditions) which may arise upon the placing or sale of such Placee's Placing Shares on its behalf.

CREST and certificated Placing Shares

Placing Shares, once issued, will be admitted to CREST with effect from Admission. Placees will receive Placing Shares comprised in their Placing Participation in uncertificated form registered in their CREST member account. Alternatively, those Placees who wish to receive their Placing Shares in certificated form should contact Kellyann Leeds at Cantor Fitzgerald Europe (+44 (0)20 7894 7913) or Daniel Tabrett at RBC Capital Markets (+44 (0)20 7653 4175) and are expected to receive their certificates for their Placing Shares by no later than 18 April 2017. If Placees do not provide any CREST details or if Placees provide insufficient CREST details to match within the CREST system to their details, Cantor Fitzgerald Europe and RBC Capital Markets may, at their discretion, deliver Placing Shares comprised in any such Placee's Placing Participation in certificated form provided payment has been made in terms satisfactory to Cantor Fitzgerald Europe and RBC Capital Markets and all conditions in relation to the Placing have been satisfied or waived.

Responsibility

The Terms and Conditions set out in this Appendix and the Announcement of which it forms part have been issued by the Company and the Company takes sole responsibility for them.