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Recommended cash acquisition of Spice plc

27th Sep 2010 07:00

RNS Number : 3299T

Cilantro Acquisitions Limited

27 September 2010

Not for release, publication or distribution, in whole or in part, directly or indirectly, in, into or from any jurisdiction where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction

27 September 2010

Recommended cash acquisition

Spice plc

Cilantro Acquisitions Limited

(to be implemented by way of a scheme of arrangement under Part 26 of the Companies Act 2006)

Summary

● The board of directors of Cilantro Acquisitions Limited (a company formed at the direction of funds managed and advised by Cinven Limited and being "Cilantro Acquisitions") and the Independent Directors of Spice plc ("Spice") are pleased to announce that they have reached agreement on the terms of a recommended cash acquisition by Cilantro Acquisitions of the entire issued and to be issued ordinary share capital of Spice. It is intended that the Acquisition is implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Act.

● Under the terms of the Acquisition, Spice Shareholders will receive 70 pence in cash for each Spice Share, valuing Spice's existing issued and to be issued ordinary share capital at approximately £251.1 million.

● The price of 70 pence for each Spice Share represents:

■ a premium of approximately 40.7 per cent. to the Closing Price of 49.75 pence per Spice Share on 14 June 2010, being the last business day before Spice's announcement that it had received an approach from Cinven;

■ a premium of approximately 10.7 per cent. to the Closing Price of 63.25 pence per Spice Share on 1 September 2010, being the last business day before Spice's announcement that it had received a possible offer from Cinven; and

■ a premium of approximately 5.3 per cent. to the Closing Price of 66.5 pence per Spice Share on 24 September 2010, being the last business day before this announcement.

● Cilantro Acquisitions has received irrevocable undertakings (including from all of the Spice Directors who are also Spice Shareholders) to vote in favour of the Scheme at the Court Meeting (or otherwise be bound by the Scheme) and the Special Resolution to be proposed at the General Meeting in respect of 89,419,260 Spice Shares representing approximately 25.40 per cent. of the existing issued ordinary share capital of Spice.

● In addition, Cilantro Acquisitions has received a non-binding letter of intent from a Spice Shareholder indicating its current intention to vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting in respect of 10,965,717 Spice Shares representing approximately 3.11 per cent. of the existing issued ordinary share capital of Spice.

● The Independent Directors, who have been so advised by Hawkpoint, consider the terms of the Acquisition to be fair and reasonable. In providing its advice, Hawkpoint has taken into account the commercial assessment of the Independent Directors. Accordingly, the Independent Directors intend unanimously to recommend to Spice Shareholders to vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting. The Independent Directors (other than Martin Towers) who are also Spice Shareholders have given irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting. Martin Towers has undertaken to be bound by the Scheme and has irrevocably undertaken to vote in favour of the Special Resolution to be proposed at the General Meeting but he will not vote on the resolution to approve the Scheme at the Court Meeting for the reason set out in paragraph 10 below.

● Further, the Executive Directors are fully supportive of the Acquisition and have irrevocably undertaken to vote in favour of the Special Resolution to be proposed at the General Meeting and to be bound by the Scheme.

● In order to become effective, the Acquisition must, among other things, be approved by the requisite majorities of the Spice Shareholders present (in person or by proxy) and entitled to vote at the Court Meeting and the General Meeting.

● It is expected that the Scheme Document will be posted on or around 11 October 2010 and that the Court Meeting and General Meeting will be held on or around 4 November 2010. Subject to the satisfaction or waiver of the relevant Conditions, the Scheme will become effective in December 2010.

Commenting on the Acquisition, Pascal Heberling, a director of Cilantro Acquisitions, said:

"We are delighted to be backing Spice as it looks to build on its strong market position serving its customers in the utility and energy sectors. In addition to Cinven's sector expertise, Spice will also benefit from significant additional funds which will enhance its ability to grow organically and through acquisitions, as well as accelerate the development of its international capabilities."

Commenting on the Acquisition, Martin Towers, Chief Executive of Spice, said:

"This offer is good for customers, employees and shareholders. Cinven is a highly credible institution with substantial funds at its disposal. As an investor, Cinven will take a long term perspective on our business with a view to supporting continued delivery of excellent service levels to our customers and opportunities for our employees. At the same time, the offer represents an attractive combination of value and certainty for Spice Shareholders."

This summary should be read in conjunction with, and is subject to, the full text of the following announcement. Appendix I to the announcement contains the conditions and certain further terms of the Scheme and the Acquisition. Appendix II contains further details of the sources of information and bases of calculations set out in this announcement. Appendix III details those Spice Directors and other Spice Shareholders giving irrevocable undertakings and non-binding letters of intent and Appendix IV contains definitions of certain expressions used in this summary and in this announcement.

Enquiries:

Cilantro Acquisitions	Tel: +44 (20) 7661 3333
Pascal Heberling
Yalin Karadogan

Altium (financial adviser to Cilantro Acquisitions)	Tel: + 44 (20) 7484 4040
Stephen Georgiadis
Sam Fuller

Investec (financial adviser to Cilantro Acquisitions)	Tel: +44 (20) 7597 5970
Charles Batten
James Rudd

HSBC Bank plc (financial adviser to Cilantro Acquisitions)	Tel: +44 (20) 7991 8888
James Pincus

Tulchan Communications (PR adviser to Cinven and Cilantro Acquisitions)	Tel: +44 (20) 7353 4200
James Bradley
Peter Hewer

Spice	Tel: +44 (11) 3 201 2120
Martin Towers (Chief Executive)
Oliver Lightowlers (Group Finance Director)

Hawkpoint (financial adviser to Spice)	Tel: +44 (20) 7665 4500
Chris Robinson
Christopher Kemball
Serge Rissi

KBC Peel Hunt (broker to Spice)	Tel: +44 (20) 7418 8900
Julian Blunt
David Anderson

Financial Dynamics (PR adviser to Spice)	Tel: +44 (20) 7831 3113
Billy Clegg
Caroline Stewart

This announcement is not intended to and does not constitute, or form part of, any offer to sell or subscribe for or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities of Spice in any jurisdiction in contravention of applicable law. The Acquisition will be made solely through the Scheme Document, which will contain the full terms and conditions of the Acquisition, including details of how to vote in favour of the Acquisition. Any acceptance or other response to the Acquisition should be made only on the basis of information in the Scheme Document or any other document by which the Acquisition is made.

Whether or not certain Spice Shares are voted at the Court Meeting or the General Meeting, if the Scheme becomes effective, those Spice Shares will be cancelled pursuant to the Scheme in return for the payment of 70 pence in cash per Spice Share.

Altium, Investec and HSBC Bank plc, each of which are authorised and regulated in the United Kingdom by the Financial Services Authority, are acting exclusively for Cinven and Cilantro Acquisitions and for no one else in connection with the Acquisition and will not be responsible to anyone other than Cinven or Cilantro Acquisitions for providing the protections afforded to clients of Altium and/or Investec and/or HSBC Bank plc (as applicable) nor for providing advice in relation to the Acquisition or any other matters referred to in this announcement.

Hawkpoint, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Spice and for no one else in connection with the Acquisition and will not be responsible to anyone other than Spice for providing the protections afforded to clients of Hawkpoint nor for providing advice in relation to the Acquisition or any matter referred to in this announcement.

KBC Peel Hunt, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively as corporate broker for Spice and for no one else in connection with the Acquisition and will not be responsible to anyone other than Spice for providing the protections afforded to clients of KBC Peel Hunt nor for providing advice in relation to the Acquisition or any matter referred to in this announcement.

The availability of the Acquisition to persons who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens. Persons who are not resident in the United Kingdom should inform themselves about, and observe, any applicable legal or regulatory requirements of their jurisdictions. Further details in relation to overseas shareholders will be contained in the Scheme Document.

Notice to US holders of Spice Shares

The Scheme relates to the shares of an English company that is a "foreign private issuer" as defined under Rule 3b-4 under the US Exchange Act and will be governed by English law. Neither the proxy solicitation rules nor the tender offer rules under the US Exchange Act will apply to the Scheme. Moreover, the Scheme will be subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement, which differ from the disclosure requirements of the US proxy solicitation rules and tender offer rules. Financial information included or referred to in this announcement or the Scheme Document, or which may be incorporated by reference into the Scheme Document, has been or will have been prepared in accordance with International Financial Reporting Standards that may not be comparable to the accounting standards applicable to financial statements of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the US. If Cilantro Acquisitions elects to implement the acquisition of the Spice Shares by way of an Offer, the Offer will be made in compliance with applicable US tender offer and securities laws and regulations.

Spice and Cilantro Acquisitions are each organised under the laws of England. Some or all of the officers and directors of Spice and Cilantro Acquisitions are residents of countries other than the United States. It may not be possible to sue Spice and Cilantro Acquisitions in a non-US court for violations of US securities laws. It may be difficult to compel Spice, Cilantro Acquisitions and their respective affiliates to subject themselves to the jurisdiction and judgment of a US court.

In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act, Cilantro Acquisitions or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase Spice Shares outside of the United States, other than pursuant to the Acquisition, until the date on which the Acquisition and/or Scheme becomes effective, lapses or is otherwise withdrawn. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in the UK, will be reported to the Regulatory Information Service of the London Stock Exchange and will be available on the London Stock Exchange website at http://www.londonstockexchange.com/prices-and-news/pricesnews/home.htm.

Overseas Shareholders

The availability of the Acquisition or the distribution of this announcement to Spice Shareholders who are not resident in the United Kingdom may be affected by the laws of their relevant jurisdiction. Such persons should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction. Spice Shareholders who are in any doubt regarding such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.

Forward-looking statements

This announcement, oral statements made regarding the Acquisition and other information published by Cilantro Acquisitions or Spice may contain certain statements that are or may be forward-looking. These statements are based on the current expectations of the management of Cilantro Acquisitions and/or Spice (as applicable) and are naturally subject to uncertainty and changes in circumstances. The forward-looking statements contained herein may include statements about the expected effects of the Acquisition, the expected timing and scope of the Acquisition, anticipated earnings enhancements, estimated cost savings and other synergies, costs to be incurred in achieving synergies, potential disposals and other strategic options and all other statements in this announcement other than historical facts. Forward-looking statements include, without limitation, statements that typically contain words such as: "will", "may", "should", "could", "continue", "believes", "expects", "intends", "estimates", "anticipates", "aims", "targets", "plans" and "forecasts" or words of similar import. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond the ability of the person making the statement to control or estimate precisely, such as future market conditions and the behaviour of other market participants. Other unknown or unpredictable factors could also cause actual results to differ materially from those in the forward looking statements. Therefore investors should not place undue reliance on such statements as a prediction of actual results. Cilantro Acquisitions and Spice assume no obligation and do not intend to update these forward-looking statements, whether as a result of new information, future events or otherwise, except as required pursuant to applicable law.

Disclosure requirements

Under Rule 8.3(a) of the Code, any person who is, or becomes, "interested" (directly or indirectly) in 1% or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an "Opening Position Disclosure" following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified.

An "Opening Position Disclosure" must contain details of the person's interests and short positions in, and rights to subscribe for, any "relevant securities" of each of (i) the offeree company and (ii) any paper offeror. An "Opening Position Disclosure" by a person to whom Rule 8.3(a) of the Code applies must be made by no later than 3.30 p.m. (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an "Opening Position Disclosure" must instead make a "Dealing Disclosure".

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of "relevant securities" of the offeree company or of any paper offeror must make a "Dealing Disclosure" if the person deals in any "relevant securities" of the offeree company or of any paper offeror. A "Dealing Disclosure" must contain details of the "dealing" concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8 of the Code. A "Dealing Disclosure" by a person to whom Rule 8.3(b) of the Code applies must be made by no later than 3.30 p.m. (London time) on the business day following the date of the relevant dealing.

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

"Opening Position Disclosures" must also be made by the offeree company and by any paper offeror and "Dealing Disclosures" must also be made by the offeree company, by any paper offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of the Code).

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

Terms in quotation marks are defined in the Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8 of the Code, you should contact an independent financial adviser authorised by the FSA under FSMA or consult the Panel's website at www.thetakeoverpanel.org.uk or contact the Panel on telephone number +44 (0)20 7638 0129.

Publication on website

A copy of this announcement will be available free of charge on Spice's website at www.spiceplc.com by no later than 12.00 p.m. (London time) on 27 September 2010.

27 September 2010

Recommended cash acquisition

Spice plc

Cilantro Acquisitions Limited

(to be implemented by way of a scheme of arrangement under Part 26 of the Companies Act 2006)

1. Introduction

The board of directors of Cilantro Acquisitions Limited (a company formed at the direction of funds managed and advised by Cinven Limited and being "Cilantro Acquisitions") and the Independent Directors of Spice plc ("Spice") are pleased to announce that they have reached agreement on the terms of a recommended cash acquisition by Cilantro Acquisitions of the entire issued and to be issued ordinary share capital of Spice. It is intended that the Acquisition is implemented by way of a Court‑sanctioned scheme of arrangement under Part 26 of the Act.

Under the terms of the Acquisition, which will be subject to the Conditions and further terms set out in Appendix I to this announcement and to be set out in the Scheme Document, Scheme Shareholders will be entitled to receive:

for each Spice Share 70 pence in cash,

valuing Spice's existing issued and to be issued ordinary share capital at approximately £251.1 million.

The price of 70 pence for each Spice Share represents:

■ a premium of approximately 5.3 per cent. to the Closing Price of 66.5 pence per Spice Share on 24 September 2010, being the last business day before this announcement.

2. Background to, and reasons for, the Acquisition

Cinven has extensive experience and a successful track record of investing in the business services sector. Cinven believes that Spice represents an attractive investment opportunity, with a strong market position across its key divisions, good long‑term growth prospects and an experienced management team in an industry with stable fundamentals and attractive consolidation dynamics.

Under Cinven's ownership, Spice will have access to significant additional funds which will enhance its ability to grow organically and through acquisitions and to accelerate the development of its international capabilities.

The Acquisition provides an immediate opportunity for Spice Shareholders to realise their investment for cash at a significant premium of approximately 40.7 per cent. to the Closing Price of 49.75 pence per Spice Share on 14 June 2010, being the last business day before Spice's announcement that it had received an approach from Cinven.

Cilantro Acquisitions recognises the skills and experience of the existing management and employees of Spice. Cilantro Acquisitions has given assurances that if the Scheme becomes effective, the existing employment rights, including pension rights, of the management and employees of Spice will be fully safeguarded.

3. Recommendation

The Independent Directors, who have been so advised by Hawkpoint, consider the terms of the Acquisition to be fair and reasonable. In providing its advice, Hawkpoint has taken into account the commercial assessment of the Independent Directors. Accordingly, the Independent Directors intend unanimously to recommend to Spice Shareholders to vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting. The Independent Directors (other than Martin Towers) who are also Spice Shareholders have given irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting. Martin Towers has undertaken to be bound by the Scheme and has irrevocably undertaken to vote in favour of the Special Resolution to be proposed at the General Meeting but he will not vote on the resolution to approve the Scheme at the Court Meeting for the reason set out in paragraph 10 below.

The Executive Directors have not participated in the decision of the Independent Directors to recommend the Acquisition to the Spice Shareholders as a result of their potential conflict of interest arising from their possible participation in incentivisation arrangements which may or may not be entered into between the Cilantro Acquisitions Group and certain members of the Spice management team following the Acquisition becoming Effective. The same potential conflict of interest prevents them from voting on the resolution to approve the Scheme at the Court Meeting.

The Executive Directors are fully supportive of the Acquisition and have irrevocably undertaken to vote in favour of the Special Resolution to be proposed at the General Meeting and to be bound by the Scheme.

4. Background to, and reasons for, the recommendation

The Spice Board has been very pleased with the success achieved in restructuring the business since Martin Towers' appointment as Chief Executive in February 2010. Spice has successfully disposed of its non-core Telecoms business and its loss-making Gas business, has used the disposal proceeds to reduce its borrowing levels and continues to progress the strategic review of its facilities business. At the same time, the core businesses continue to perform in line with the Spice Board's expectations, whilst the Spice Group's head office and net interest costs continue to decline and are running at a level better than the Spice Board's original expectations.

The Spice Board received an initial approach from Cinven on 24 May 2010 at an indicative price of 56 pence per share, which it rejected as it significantly undervalued Spice. As announced on 6 July 2010, Cinven subsequently increased its conditional proposal to between 62 and 65 pence per share, a level at which the Spice Board continued to believe undervalued the business.

The Spice Board, having consulted with its advisers and taken into account the views of a number of major Spice Shareholders, believes that Cilantro Acquisitions' cash offer of 70 pence per Spice Share provides an attractive combination of value and certainty for Spice Shareholders and reflects the performance and prospects of Spice.

The Spice Board understands that Cinven is a highly credible institution with substantial funds at its disposal, and is well placed to support management's plans to take the Spice businesses to the next stage of their development.

5. Irrevocable undertakings and letter of intent

Cilantro Acquisitions has received irrevocable undertakings (including from the Spice Directors who are also Spice Shareholders) to vote in favour of the Scheme at the Court Meeting (or otherwise to be bound by the Scheme) and the Special Resolution to be proposed at the General Meeting in respect of 89,419,260 Spice Shares, representing approximately 25.40 per cent. of the existing issued ordinary share capital of Spice. The undertakings from the Spice Directors who are Spice Shareholders are in respect of their entire holdings amounting to 3,245,449 Spice Shares representing approximately 0.93 per cent. of Spice's existing issued ordinary share capital. The undertakings from the Spice Directors who are Spice Shareholders will cease to be binding only if the Scheme or Offer (as applicable) lapses or (with the consent of the Panel) is withdrawn and will remain binding in the event that a higher competing offer for Spice is made.

These undertakings also include undertakings from Hermes Focus Asset Management Limited as general partner of Hermes Specialist UK Focus Fund, the Co-operative Asset Management, Simon Rigby, Rigby Children's Discretionary Trust for the benefit of Nicholas and Victoria Rigby and Impax Asset Management Limited to vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting in respect of, in aggregate, 86,173,811 Spice Shares representing approximately 24.47 per cent. of the existing issued ordinary share capital of Spice. These undertakings will cease to be binding if: (i) Cilantro Acquisitions announces that it does not intend to make or proceed with the Scheme or Offer (as applicable) and no new, revised or replacement Scheme or Offer is announced in accordance with Rule 2.5 of the Code at the same time; or (ii) the Scheme or Offer (as applicable) lapses or is withdrawn; or (iii) a third party announces a proposal pursuant to Rule 2.5 of the Code to acquire the entire issued and to be issued share capital of Spice (whether by means of a Scheme or an Offer), where such proposal provides for consideration in cash at more than a ten per cent. premium to the price per Spice Share being offered at that time by Cilantro Acquisitions and Cilantro Acquisitions does not increase the value of the consideration under the terms of the Scheme or Offer (as applicable) to a price per Spice Share at least equal to that being offered by the third party within five days of the date of the third party's announcement.

In addition, Cilantro Acquisitions has received a non-binding letter of intent to vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting from a further Spice Shareholder in respect of 10,965,717 Spice Shares representing approximately 3.11 per cent. of Spice's existing issued ordinary share capital.

In total, therefore, Cilantro Acquisitions has received irrevocable undertakings and a non-binding letter of intent to vote in favour of the Scheme at the Court Meeting (or otherwise to be bound by the Scheme) and the Special Resolution to be proposed at the General Meeting in respect of 100,384,977 Spice Shares representing approximately 28.51 per cent. of Spice's existing issued ordinary share capital.

Further details of these irrevocable undertakings and letter of intent are set out in Appendix III to this announcement.

6. Information relating to Spice

Spice was founded in 1996 through a management buy-out from Yorkshire Electricity. From a single contract worth £3 million per annum, Spice has grown organically and by acquisition to in excess of £300 million revenue per annum. Spice is now a leading provider of support services principally to utilities in the United Kingdom.

Spice provides outsourced support services across two divisions.

Supply Division

Billing

The Billing business identifies imbalances between the supply and consumption of energy. These imbalances arise due to the complexity of the billing environment, which has developed since de-regulation. Operating under the "Revenue Assurance Services" brand, the business assists the in-house client team of utilities to identify over charges to, or under billings made by, utility clients of the Billing business.

Energy

The Energy business provides energy and environmental consultancy services under the "Inenco", "NIFES" and "Saturn Energy" brands. The business provides energy management services to the industrial and commercial customers across the UK and Europe.

Distribution Division

Electricity

The Electricity business is a provider of specialist utility engineering services to the UK electricity sector and to industry. It provides "end to end" solutions for major utility and infrastructure projects, with an extensive delivery capability in design, project and operational management and technical works. The Electricity business is organised into seven service islands, under the "Freedom" brand name.

Water

The Water business provides clear and dirty water services and meter operations to utility, industrial and commercial clients. The business provides water services to clients, across the UK and is organised around four brands being "H20 Water Services", "Metro Rod", "Meter U" and "Kemac".

Financial Information

Spice's revenue for the year ended 30 April 2010 from continuing activities, increased by 11% to £310.7 million (2009: £279.6 million). Profit before tax, exceptional costs and the amortisation of intangible fixed assets from continuing activities was £31.5 million (2009: £31.7 million). Diluted earnings per share for continuing activities, adjusted for exceptional costs and amortisation of intangible fixed assets, was 6.05 pence (2009: 6.37 pence). A final dividend of 1.22 pence per share (2009: 1.14 pence) was paid on 14 September 2010, making a total dividend for the year of 1.62 pence per share (2009: 1.5 pence), an 8% increase and covered 3.7 times by adjusted diluted earnings per share (2009: 4.2 times).

As announced on 1 September 2010 trading for the continuing business has been, in aggregate, in line with the Spice Board's expectations as Spice has benefited from an increased focus on markets with strong underlying regulatory and environmental drivers. Spice continues to build upon the significant progress made earlier in the year through greater focus and the disposal of non-core businesses. Spice's targeting of markets where regulatory and environmental drivers prevail affords protection from the current difficult economic environment affecting both private and public sectors.

7. Information relating to Cilantro Acquisitions and Cinven

Cilantro Acquisitions

Cilantro Acquisitions is a newly incorporated, private limited company incorporated in England and Wales, formed at the direction of funds managed and advised by Cinven for the purpose of implementing the Acquisition. The current directors of Cilantro Acquisitions are Pascal Heberling and Yalin Karadogan.

Cilantro Acquisitions has not traded since its incorporation, nor has it entered into any obligations other than in connection with the implementation and financing of the Acquisition. Further information in relation to Cilantro Acquisitions will be set out in the Scheme Document.

Cinven

Established in 1977, Cinven is one of the most prominent and successful investors in the European buyout market, with offices in London, Paris, Frankfurt, Milan and Hong Kong. Cinven has invested in buyouts with a value in excess of €60 billion.

Cinven is currently investing its fourth fund which totals €6.5 billion. The funds are made up of over 150 institutional investors from more than 20 countries. They include many of the leading institutions in Europe, North America and the rest of the world, primarily pension funds and other funds with a long term investment horizon.

Cinven acquires successful, market-leading companies and works with them to help them grow and develop, using its proven value creation strategies. Typically, it acquires European-based companies that require an equity investment by its funds of at least €100 million.

8. Financing of the Acquisition and related expenses

The consideration payable by Cilantro Acquisitions under the terms of the Acquisition and the other amounts payable by Cilantro Acquisitions in connection with the Acquisition (including the refinancing of certain existing indebtedness of the Spice Group and the payment of transaction expenses) will be financed through a combination of equity and debt financing.

All of the consideration payable to Spice Shareholders by Cilantro Acquisitions under the terms of the Acquisition will be provided by funds managed and/or advised by Cinven by the direct or indirect subscription of equity and/or debt instruments in Cilantro Acquisitions.

Each of Altium and Investec, in its capacity as financial adviser to Cilantro Acquisitions, has confirmed that it is satisfied that sufficient financial resources are available to Cilantro Acquisitions to enable it to satisfy in full the cash consideration payable to Spice Shareholders under the terms of the Acquisition.

The other amounts payable by Cilantro Acquisitions in connection with the Acquisition will be made available by way of a credit agreement entered into on or around 26 September 2010 between, amongst others, Cilantro Parent Limited and HSBC Bank plc as agent and security trustee. The credit agreement provides for funds of which approximately £154 million will, as referred to above, be used, among other things, to refinance certain existing indebtedness of the Spice Group and to pay transaction expenses.

9. Management and employees

Cilantro Acquisitions attaches great importance to the skills and experience of the existing management and employees of the Spice Group, and believes that they will benefit from the financial and other resources available to Cilantro Acquisitions as a Cinven investee company. Accordingly, Cilantro Acquisitions has given assurances to the Spice Board that the existing employment rights of management and employees of the Spice Group, including pension rights, will be fully safeguarded following completion of the Acquisition.

Cilantro Acquisitions has no plans to change Spice's place of business or redeploy any of its fixed assets.

10. Arrangements with the Executive Team

Following the Acquisition becoming Effective, it is likely that Cilantro Acquisitions will put in place incentivisation scheme(s) for certain members of the Spice management team. Cilantro Acquisitions currently envisages that the incentivisation under these scheme(s) would allow such persons and other senior employees to participate in an element of the profit on any future sale of the Spice business. No discussions in respect of the terms of such arrangements have taken place with such persons at the time of this announcement.

Upon the Acquisition becoming Effective or shortly thereafter, Spice shall pay a cash bonus of £250,000 to Martin Towers and, in addition, may pay cash bonuses up to a maximum of £200,000 in aggregate to employees of the Spice Group chosen by Spice at its sole discretion. The cash bonus payable to Martin Towers upon the Acquisition becoming Effective or shortly thereafter was put in place in order to ensure appropriate remuneration terms and incentivisation for him, to bring him in line with the Executive Directors and to align his interests with those of the Spice Shareholders, given that he does not participate in Spice's equity incentivisation scheme. In view of the proposed payment of such cash bonus to Martin Towers, he will not vote on the resolution to approve the Scheme at the Court Meeting. Nevertheless, he has undertaken to be bound by the Scheme and has irrevocably undertaken to vote in favour of the Special Resolution to be proposed at the General Meeting.

11. Spice Share Schemes

Participants in the Spice Share Schemes will be contacted regarding the effect of the Acquisition on their rights under these schemes and appropriate proposals will be made to such participants in due course.

Further details of these proposals will be set out in the Scheme Document.

12. Implementation Agreement

Spice and Cilantro Acquisitions have entered into the Implementation Agreement in relation to the implementation of the Acquisition and related matters. Pursuant to the Implementation Agreement, Spice and Cilantro Acquisitions have agreed, amongst other things, to use all reasonable endeavours to implement the Acquisition on a timely basis and in accordance with an agreed indicative timetable.

Right to Match

In the event that a Competing Proposal is announced or entered into by a third party which is not acting in concert (as defined in the Code) with Cilantro Acquisitions, Spice has agreed to provide Cilantro Acquisitions with a right to match the financial terms of such Competing Proposal, which the Independent Directors determine to be a Superior Proposal, by announcing, pursuant to Rule 2.5 of the Code, an appropriately revised proposal which would provide equal or superior financial value to Spice Shareholders within 72 hours of the announcement of a Superior Proposal. In the event that Cilantro Acquisitions exercises its right to match, Spice will procure that the Independent Directors provide a unanimous and unqualified recommendation of such revised proposal and the Executive Directors support such revised proposal.

Break Fee

As a pre-condition to Cilantro Acquisitions agreeing to announce the Acquisition, pursuant to the Implementation Agreement Spice has agreed to make a payment to Cilantro Acquisitions in certain circumstances. This payment of £2.51 million (equal to one per cent. of the offer value of the issued and to be issued ordinary share capital of Spice and subject to any adjustment in respect of VAT) is due if, in summary:

(a) the Independent Directors (or any committee thereof) withdraw, qualify or adversely modify for whatever reason the terms of their recommendation of the Acquisition and/or decide not to proceed with the Acquisition and/or resolve to recommend a Competing Proposal or the Executive Directors withdraw, qualify or adversely modify for whatever reason the terms of their support and, in either case, the Acquisition does not become effective in accordance with its terms or does not become or is not declared unconditional in all respects and subsequently lapses or (with the consent of the Panel) is not made or is withdrawn; or

(b) Spice (or any other member of the Spice Group) enters into any agreement or contract in relation to a Major Transaction and the Acquisition does not become effective in accordance with its terms or does not become or is not declared unconditional in all respects and subsequently lapses or (with the consent of the Panel) is not made or is withdrawn; or

(c) if the Acquisition is proceeding by way of the Scheme: (i) the Scheme is not sanctioned by the Scheme Shareholders at the Court Meeting or the Special Resolution to be proposed at the General Meeting, and which is set out in the notice of that meeting, is not approved at the General Meeting; or (ii) the Court Meeting and/or the General Meeting is adjourned (without the prior written consent of Cilantro Acquisitions), save in circumstances where such adjournment is required by the Court or the Panel; or

(d) if the Acquisition is proceeding by way of Offer, the Offer is not declared unconditional as to acceptances, save in circumstances where the Offer lapses prior to Day 60 (as defined in the Code) or (with the consent of the Panel) is not made or is withdrawn by Cilantro Acquisitions; or

(e) if a Competing Proposal is announced (or any amendment, variation or revision of such Competing Proposal) and becomes effective in accordance with its terms or becomes or is declared unconditional in all respects.

13. Acquisition structure

It is intended that the Acquisition will be implemented by way of a Court-sanctioned scheme of arrangement between Spice and the Scheme Shareholders under Part 26 of the Act. The procedure will involve, among other things, an application by Spice to the Court to sanction the Scheme and confirm the cancellation of all Scheme Shares, in consideration for which the Scheme Shareholders will receive cash on the basis set out in paragraph 1 above.

The implementation of the Scheme will be subject to the Conditions and further terms set out in Appendix I and to be set out in the Scheme Document, and will only become effective if, amongst other things, the following events occur on or before the Longstop Date or such later date as Cilantro Acquisitions and Spice (with the consent of the Panel) agree and the Court (if required) may allow:

(a) a resolution to approve the Scheme is passed by a majority in number of the Scheme Shareholders present and voting (and entitled to vote), either in person or by proxy, at the Court Meeting, representing not less than three-quarters in value of the Scheme Shares held by such Scheme Shareholders;

(b) the Special Resolution necessary to implement the Scheme is passed by the requisite majority at the General Meeting;

(c) the Scheme is sanctioned (with or without modification, on terms agreed by Cilantro Acquisitions and Spice), and the Capital Reduction is confirmed, by the Court; and

(d) the Court Orders are delivered to the Registrar and, in the case of the Court Order confirming the Capital Reduction, it is registered by the Registrar together with the Statement of Capital attached to it.

Upon the Scheme becoming effective: (i) the Scheme will be binding on all Scheme Shareholders (irrespective of whether or not they attended or voted at the Court Meeting or the General Meeting) and Spice will become a wholly-owned subsidiary of Cilantro Acquisitions; and (ii) share certificates in respect of the Spice Shares will cease to be valid and entitlements to Spice Shares held within CREST will be cancelled.

14. Suspension, delisting and re-registration

It is intended that dealings in Spice Shares will be suspended at 5.00 p.m. London time on the business day prior to the Effective Date. It is intended that Cilantro Acquisitions will procure that Spice applies to the London Stock Exchange to cancel the admission to trading of the Spice Shares on the London Stock Exchange's main market for listed securities and to the UK Listing Authority to cancel the listing of the Spice Shares on the Official List, subject to applicable rules and requirements of the London Stock Exchange, such cancellations to take effect shortly after the Effective Date. On the Effective Date, Spice will become a wholly-owned subsidiary of Cilantro Acquisitions and share certificates in respect of Spice Shares will cease to be valid and should be destroyed. In addition, on the Effective Date, entitlements to Spice Shares held within CREST will be cancelled. It is also intended that Spice will, as soon as possible after the Effective Date, be re-registered as a private limited company as part of the Scheme.

15. Disclosure of interests in Spice

Except for the irrevocable undertakings referred to in paragraph 5 above, as at 24 September 2010 (the latest practicable date prior to the date of this announcement), neither Cilantro Acquisitions, nor any of the directors of Cilantro Acquisitions or any member of the Cilantro Acquisitions Group, nor, so far as the Cilantro Acquisitions Directors are aware, any person acting in concert with Cilantro Acquisitions for the purposes of the Acquisition, has any interest in, right to subscribe for, or has borrowed or lent any Spice Shares or securities convertible or exchangeable into Spice Shares (including pursuant to any long exposure, whether conditional or absolute, to changes in the prices of securities) or right to subscribe for or purchase the same or hold any options (including traded options) in respect of or has any right to acquire any Spice Shares or derivatives referenced to Spice Shares ("Spice Securities"), nor does any such person have any short position (whether conditional or absolute and whether in the money or otherwise) including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery in relation to Spice Securities.

The Opening Position Disclosure, which has been issued by or on behalf of Cilantro Acquisitions, further details the disclosures referred to in this paragraph 15.

16. Expected timetable

The Scheme Document containing further details of the Scheme will be despatched to Spice Shareholders, and, for information only, to participants in the Spice Share Schemes as soon as practicable and, in any event, within 28 days of the date of this announcement, unless otherwise agreed with the Panel. The Scheme Document will include the notices of the Court Meeting and the General Meeting, together with the anticipated timetable, and will specify the necessary actions to be taken by Spice Shareholders.

It is expected that the Scheme Document will be posted on or around 11 October 2010 and that the Court Meeting and General Meeting will be held on or around 4 November 2010. Subject to satisfaction or waiver of the relevant Conditions, the Scheme will become effective in December 2010.

17. General

The Acquisition will be governed by English law and will be subject to the applicable requirements of the Code, the Panel and the London Stock Exchange. Appendix I to this announcement contains the conditions and certain further terms of the Scheme and the Acquisition. Appendix II contains further details of the sources of information and bases of calculations set out in this announcement. Appendix III details those Spice Directors and other Spice Shareholders giving irrevocable undertakings and non-binding letters of intent and Appendix IV contains definitions of certain expressions used in this summary and in this announcement.

Enquiries:

Cilantro Acquisitions	Tel: +44 (20) 7661 3333
Pascal Heberling
Yalin Karadogan

Altium (financial adviser to Cilantro Acquisitions)	Tel: + 44 (20) 7484 4040
Stephen Georgiadis
Sam Fuller

Investec (financial adviser to Cilantro Acquisitions)	Tel: +44 (20) 7597 5970
Charles Batten
James Rudd

HSBC Bank plc (financial adviser to Cilantro Acquisitions)	Tel: +44 (20) 7991 8888
James Pincus

Tulchan Communications (PR adviser to Cinven and Cilantro Acquisitions)	Tel: +44 (20) 7353 4200
James Bradley
Peter Hewer

Spice	Tel: +44 (11) 3 201 2120
Martin Towers (Chief Executive)
Oliver Lightowlers (Group Finance Director)

Hawkpoint (financial adviser to Spice)	Tel: +44 (20) 7665 4500
Chris Robinson
Christopher Kemball
Serge Rissi

KBC Peel Hunt (broker to Spice)	Tel: +44 (20) 7418 8900
Julian Blunt
David Anderson

Financial Dynamics (PR adviser to Spice)	Tel: +44 (20) 7831 3113
Billy Clegg
Caroline Stewart

Notice to US investors

Overseas Shareholders

Forward-looking statements

Disclosure requirements

Terms in quotation marks are defined in the Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8 of the Code, you should contact an independent financial adviser authorised under FSMA or consult the Panel's website at www.thetakeoverpanel.org.uk or contact the Panel on telephone number +44 (0)20 7638 0129.

Publication on website

A copy of this announcement will be available free of charge on Spice's website at www.spiceplc.com by no later than 12.00 p.m. (London time) on 27 September 2010.

APPENDIX I

CONDITIONS AND CERTAIN FURTHER TERMS OF THE SCHEME AND THE ACQUISITION

Part A: Conditions of the Scheme and the Acquisition

The Acquisition will, if it is implemented by way of the Scheme, be conditional upon the Scheme becoming unconditional and becoming effective by no later than the Longstop Date or such later date (if any) as Cilantro Acquisitions and Spice may, with the consent of the Panel, agree and the Court (if required) may allow.

1. Conditions of the Scheme

The Scheme will be conditional upon:

(a) approval of the Scheme by a majority in number representing not less than three-fourths in value of the Scheme Shareholders (or the relevant class or classes thereof, if applicable) present and voting (and entitled to vote), either in person or by proxy, at the Court Meeting and at any separate class meeting which may be required by the Court or at any adjournment of any such meeting; and

(b) all resolutions in connection with or required to approve and implement the Scheme being duly passed by the requisite majority or majorities at the General Meeting or at any adjournment of that meeting; and

(c) the sanction of the Scheme and the confirmation of the Capital Reduction by the Court (in each case, with or without modifications on terms reasonably acceptable to Cilantro Acquisitions and Spice) and:

(i) the delivery of an office copy of each of the Court Orders and the Statement of Capital to the Registrar; and

(ii) if required by the Court, the registration of the Court Order (confirming the Capital Reduction) by the Registrar.

2. Conditions of the Acquisition

Cilantro Acquisitions and Spice have agreed that the Acquisition will be conditional upon the following conditions and, accordingly, the necessary actions to make the Scheme effective will not be taken unless the following conditions (as amended, if appropriate) have been satisfied or, where relevant, waived:

(a) insofar as the Acquisition constitutes, or is deemed to constitute, a concentration with a European Union dimension within the scope of the Regulation:

(i) the European Commission adopting a decision under Article 6(1)(b) of the Regulation in respect of the Acquisition of Spice by Cilantro Acquisitions (or being deemed to have done so under Article 10(6) of the Regulation) declaring the whole of the Acquisition compatible with the common market; and

(ii) in the event that any request or requests under Article 9(2) of the Regulation have been made by any European Union or European Free Trade Association states, the European Commission deciding not to refer the Acquisition of Spice by Cilantro Acquisitions or any aspect of such Acquisition, to any competent authority of a European Union or European Free Trade Association state in accordance with Article 9(3) of the Regulation;

(b) except in relation to any antitrust, competition or merger control clearances in respect of the Acquisition, in relation to which the Condition set out in paragraph (a) above only, shall apply, no Third Party having decided to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference, or enacted, made or proposed any statute, regulation, decision or order, or having taken any other steps which would or might reasonably be expected to:

(i) make the Scheme or the Acquisition or its implementation or the acquisition or proposed acquisition by Cilantro Acquisitions or any member of the Cilantro Acquisitions Group of any Spice Shares or other securities in, or control or management of, Spice void, illegal, prohibited and/or unenforceable under the laws of any relevant jurisdiction, or otherwise directly or indirectly restrain, restrict, prohibit, delay or otherwise interfere with the same, or impose additional conditions or obligations with respect thereto, or otherwise impede, challenge or require amendment of the Scheme or the Acquisition;

(ii) require, prevent or materially delay the divestiture by any member of the Cilantro Acquisitions Group of any Spice Shares or other securities in Spice;

(iii) require, prevent or materially delay the divestiture or materially alter the terms envisaged for any proposed divestiture by any member of the Cilantro Acquisitions Group or by any member of the Spice Group of all or any portion of their respective businesses, assets or properties or limit in a material way the ability of any of them to conduct any of their respective businesses or to own or control any of their respective assets or properties or any part thereof;

(iv) impose any limitation on the ability of any member of the Cilantro Acquisitions Group directly or indirectly to acquire or to hold or to exercise effectively any rights of ownership in respect of shares or loans or securities convertible into shares or any other securities (or the equivalent) in any member of the Spice Group or to exercise management control over any such member;

(v) require any member of the Cilantro Acquisitions Group or the Spice Group to offer to acquire any shares or other securities (or the equivalent) or interest in any member of the Spice Group or the Cilantro Acquisitions Group owned by any third party (other than in the implementation of the Acquisition);

(vi) limit the ability of any member of the Cilantro Acquisitions Group or of the Spice Group to conduct or integrate or coordinate its business, or any part of it, with the businesses or any part of the businesses of any other member of the Cilantro Acquisitions Group or of the Spice Group;

(vii) result in any member of the Spice Group ceasing to be able to carry on business under any name under which it presently does so or ceasing to be able to use in its business any name, trademark or other intellectual property right which it at present uses to an extent which is material in the context of the Spice Group taken as a whole; or

(viii) otherwise materially and adversely affect any or all of the business, assets, profits, financial or trading position of any member of the Cilantro Acquisitions Group taken as a whole or the Spice Group,

and all applicable waiting and other time periods during which any such Third Party could institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference or any other step under the laws of any relevant jurisdiction in respect of the Acquisition or the acquisition or proposed acquisition of any Spice Shares having expired, lapsed or been terminated;

(c) except in relation to any antitrust, competition or merger control clearances in respect of the Acquisition, in relation to which the Condition set out in paragraph (a) above only, shall apply, all filings or applications which are necessary or are considered reasonably appropriate by Cilantro Acquisitions having been made in connection with the Acquisition, all appropriate waiting and other time periods (including any extensions of such waiting and other time periods) under any applicable legislation or regulation of any relevant jurisdiction having expired, lapsed, or been terminated (as appropriate) and all statutory or regulatory obligations in any jurisdiction having been complied with in connection with the Acquisition or the acquisition or proposed acquisition by any member of the Cilantro Acquisitions Group of any shares or other securities in, or control or management of, Spice or any other member of the Spice Group, or the carrying on by any member of the Spice Group of its business;

(d) except in relation to any antitrust, competition or merger control clearances in respect of the Acquisition, in relation to which the Condition set out in paragraph (a) above only, shall apply, all Authorisations reasonably required by Cilantro Acquisitions or any member of the Cilantro Acquisitions Group for or in respect of the Acquisition or the acquisition or proposed acquisition of any shares or other securities in, or control or management of, Spice or any other member of the Spice Group by any member of the Cilantro Acquisitions Group or the carrying on by any member of the Spice Group of its business having been obtained in terms and in a form reasonably satisfactory to Cilantro Acquisitions from all appropriate Third Parties or any persons or bodies with whom any member of the Spice Group has entered into contractual arrangements and all such Authorisations (the absence of which would have an effect as aforesaid) remaining in full force and effect and there being no notice or intimation of any intention to revoke, suspend, restrict, modify or not to renew any of the same;

(e) except as Disclosed, there being no provision of any agreement, arrangement, licence, permit, franchise or other instrument to which any member of the Spice Group is a party or by or to which any such member or any of its assets is or are or may be bound, entitled or subject or any circumstance, which, in each case as a consequence of the Acquisition or the acquisition or proposed acquisition of any Spice Shares or other securities in Spice or because of a change in the control or management of Spice or any other member of the Spice Group by any member of the Cilantro Acquisitions Group or otherwise, is reasonably likely to result in each case to an extent which is material and adverse in the context of the Spice Group taken as a whole:

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

(ii) any such agreement, arrangement, licence, permit, franchise or instrument or the rights, liabilities, obligations or interests of any member of the Spice Group thereunder being, or becoming capable of being, terminated or adversely modified or affected or any obligation or liability arising or any action being taken or arising thereunder;

(iii) any assets or interests of any member of the Spice Group being or falling to be disposed of or charged or ceasing to be available to any member of the Cilantro Acquisitions Group or any right arising under which any such asset or interest could be required to be disposed of or charged or could cease to be available to any member of the Cilantro Acquisitions Group otherwise than in the ordinary course of business;

(iv) the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property, assets or interests of any member of the Spice Group or any such mortgage, charge or other security interest (wherever created, arising or having arisen) becoming enforceable;

(v) the rights, liabilities, obligations or interests of any member of the Spice Group under any such arrangement, agreement, licence, permit, franchise or other instrument, or the interests or business of any member of the Spice Group in or with any other person, firm, company or body (or any arrangement or arrangements relating to any such interest or business) being terminated or adversely modified or affected;

(vi) the value of any member of the Spice Group or its financial or trading position being prejudiced or adversely affected;

(vii) any member of the Spice Group ceasing to be able to carry on business under any name under which it presently does so; or

(viii) the creation of any liability, actual or contingent, by any member of the Spice Group other than in the ordinary course of business,

and, save as Disclosed, no event having occurred which, under any provision of any agreement, arrangement, licence, franchise, permit or other instrument to which any member of the Spice Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, could result in any of the events or circumstances as are referred to in sub-paragraphs (i) to (viii) of this Condition to an extent which is material in the context of the Spice Group as a whole;

(f) except as Disclosed, no member of the Spice Group having, since 1 May 2010:

(i) issued, authorised or proposed the issue of additional shares of any class (save as between Spice and wholly-owned subsidiaries of Spice and save in respect of any options or awards granted on or prior to the date of this announcement under the Spice Share Schemes and save as contemplated pursuant to the Scheme or the Implementation Agreement);

(ii) issued or agreed to issue, authorised or proposed the issue of securities convertible into or exchangeable for, shares of any class or rights, warrants or options to subscribe for, or acquire, any such shares or convertible securities (save as between Spice and wholly-owned subsidiaries of Spice and save in respect of any options or awards granted on or prior to the date of this announcement under the Spice Share Schemes and save as contemplated pursuant to the Scheme or the Implementation Agreement);

(iii) save for intra-Spice Group transactions, purchased or redeemed or repaid any of its own shares or other securities or reduced or made any other change to any part of its share capital;

(iv) other than to another member of the Spice Group, recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus, dividend or other distribution whether payable in cash or otherwise, save for the final dividend of 1.22 pence per Spice Share in respect of the year ended 30 April 2010 paid on 14 September 2010 to Spice Shareholders on the register of members on 27 August 2010;

(v) save as between wholly owned subsidiaries of Spice or between Spice and any of its wholly owned subsidiaries, merged or demerged with any body corporate or acquired or disposed of or transferred, mortgaged or charged or created any security interest over any assets or any right, title or interest in any asset (including shares and trade investments) or authorised or proposed or announced any intention to propose any merger, demerger, acquisition or disposal, transfer, mortgage, charge or security interest (to an extent which is material in the context of the Spice Group taken as a whole);

(vi) made or authorised or proposed or announced an intention to propose any change in its loan capital;

(vii) issued, authorised or proposed the issue of, or made any change in or to, any debentures or (save in the ordinary course of business and save for intra-Spice Group transactions) incurred or increased any indebtedness or become subject to any actual or contingent liability to an extent which is material in the context of the Spice Group taken as a whole;

(viii) other than in relation to the implementation of the Acquisition entered into, implemented, or authorised, proposed or announced its intention to enter into, implement or authorise, any merger, demerger, reconstruction, amalgamation, scheme, commitment or other transaction or arrangement to an extent which is material in the context of the Spice Group taken as a whole;

(ix) entered into or varied (other than increases in remuneration as provided under the terms of the relevant agreement) the terms of any service agreement, contract or arrangement with any director or senior executive of any member of the Spice Group (which in aggregate are material in the context of the Spice Group taken as a whole);

(x) other than in respect of a member of the Spice Group which is dormant and was solvent at the relevant time, taken any corporate action or had any legal proceedings started or threatened against it or petition presented or order made for its winding-up (voluntary or otherwise), dissolution or reorganisation or for the appointment of a receiver, administrative receiver, administrator, trustee or similar officer of all or any of its assets or revenues or any analogous proceedings in any jurisdiction or had any such person appointed;

(xi) entered into, varied or authorised any contract, agreement, transaction or arrangement (whether in respect of capital expenditure or otherwise) which is of a long term, onerous or unusual nature or magnitude or which could involve an obligation of such nature or magnitude or which would be restrictive on the business of any member of the Spice Group (and which is in any such case material in the context of the Spice Group taken as a whole);

(xii) waived or compromised any claim other than in the ordinary course of trading (which is material in the context of the Spice Group taken as a whole);

(xiii) been unable, or admitted in writing that it is unable, to pay its debts or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business;

(xiv) made any material alteration to its memorandum or articles of association or other constitutional documents;

(xv) other than as required by the implementation of the Scheme or the Acquisition or as contemplated pursuant to the Implementation Agreement, proposed, agreed to provide or modified the terms of any share option scheme, incentive scheme or other benefit relating to the employment or termination of employment of any person employed by the Spice Group; or

(xvi) entered into any contract, commitment, arrangement or agreement or passed any resolution or made any offer (which remains open for acceptance) with respect to or announced any intention to, or to propose to, effect any of the transactions, matters or events referred to in this Condition 2(f);

(g) except as Disclosed, since 1 May 2010:

(i) no adverse change or deterioration having occurred in the business, assets, financial or trading position or profits of any member of the Spice Group, which is material in the context of the Spice Group taken as a whole;

(ii) no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Spice Group is or may become a party (whether as a plaintiff, defendant or otherwise) and no investigation by any Third Party against or in respect of any member of the Spice Group having been instituted, implemented, announced or threatened by or against or remaining outstanding in respect of any member of the Spice Group which is material in the context of the Spice Group taken as a whole;

(iii) no contingent or other liability having arisen or become apparent or increased which would be likely to adversely affect any member of the Spice Group which is material in the context of the Spice Group taken as a whole;

(iv) no member of the Spice Group having conducted its business in breach of any applicable laws and regulations which is material in the context of the Spice Group taken as a whole; or

(v) no member of the Spice Group having taken (or agreed or committed to take) any action which requires, or would require, the consent of the Panel or the approval of Spice Shareholders in general meeting in accordance with, or as contemplated by, Rule 21.1 of the Code; and

(vi) no steps having been taken which are reasonably likely to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the Spice Group which is necessary for the proper carrying on of its business and is material in the context of the Spice Group taken as a whole;

(h) save as Disclosed, Cilantro Acquisitions not having discovered after the date of this announcement:

(i) that any past or present member of the Spice Group has not complied with any applicable legislation or regulations of any jurisdiction with regard to the use, treatment, handling, storage, transport, release, disposal, discharge, spillage, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or harm human health, or otherwise relating to environmental matters or the health and safety of any person, or that there has otherwise been any such use, treatment, handling, storage, transport, release, disposal, discharge, spillage, leak or emission (whether or not this constituted non-compliance by any person with any legislation or regulations and wherever the same may have taken place) which, in any case, would be likely to give rise to any liability (whether actual or contingent) or cost on the part of any member of the Spice Group;

(ii) that 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 previously owned, occupied or made use of by any past or present member of the Spice Group or any other property or any controlled waters under any environmental legislation, regulation, notice, circular, order or other lawful requirement of any relevant authority or third party or otherwise; or

(iii) that circumstances exist whereby a person or class of persons would be likely to have a claim in respect of any product or process of manufacture or materials used therein now or previously manufactured, sold or carried out by any past or present member of the Spice Group; and

which in any such case is material in the context of the Spice Group taken as a whole; and

(i) Cilantro Acquisitions not having discovered after the date of this announcement:

(i) that any financial, business or other information concerning the Spice Group is misleading, contains a misrepresentation of fact or omits to state a fact necessary to make that information not misleading (and which was not subsequently corrected before the date of this announcement);

(ii) that any member of the Spice Group is subject to any liability (contingent or otherwise); or

(iii) any information which affects the import of any information Disclosed by or on behalf of any member of the Spice Group,

which in any such case is material in the context of the Spice Group taken as a whole and provided that, for the purposes of this Condition (i), Cilantro Acquisitions cannot discover any of the matters referred to in sub-paragraphs (i) to (iii) of this Condition to the extent the same has been Disclosed.

Cilantro Acquisitions reserves the right to waive, in whole or in part, all or any of the above Conditions, apart from Conditions 1(a) to 1(c) inclusive which cannot be waived.

If Cilantro Acquisitions is required by the Panel to make an offer for Spice Shares under the provisions of Rule 9 of the Code, Cilantro Acquisitions may make such alterations to any of the above Conditions as are necessary to comply with the provisions of that Rule.

Save with the consent of the Panel, the Acquisition will lapse and the Scheme will not proceed if the European Commission initiates proceedings under Article 6(1)(c) of the Regulation or the European Commission makes a referral to the Office of Fair Trading under Article 9(3) of the Regulation and there is then a reference to the Competition Commission in the United Kingdom, in either case before the date on which the resolution is passed at the Court Meeting or, if Cilantro Acquisitions elects to implement the Acquisition by way of an Offer, before 3.00 p.m. on the first closing date of an Offer or the date on which an Offer becomes or is declared unconditional as to acceptances, whichever is the later.

For the purposes of these Conditions:

"Authorisations" means authorisations, orders, recognitions, grants, consents, licences, waivers, certificates, confirmations, clearances, permissions or approvals;

"Disclosed" means:

(a) as disclosed in Spice's report and accounts for the year ended 30 April 2010;

(b) as publicly announced by Spice (by the delivery of an announcement to an authorised Regulatory Information Service) prior to 27 September 2010;

(d) as otherwise fairly disclosed by or on behalf of Spice to Cinven, Cilantro Acquisitions or its advisers prior to the date of this announcement in the course of negotiations in connection with the Acquisition;

"Regulation" means Council Regulation (EC) 139/2004, as amended from time to time; and

"Third Party" means any central bank, ministry, government or governmental, quasi-governmental, supranational, statutory, regulatory, environmental or investigative body, or authority (including any national or supranational anti-trust or merger control authority), national, state, municipal or local government (including any subdivision, court, administrative agency or commission or other authority thereof), court, trade agency, association, institution or any other body or person whatsoever in any relevant jurisdiction, including, for the avoidance of doubt, the Panel.

Part B: Certain further terms of the Scheme and the Acquisition

Conditions 2(a) to (i) (inclusive) must each be fulfilled, determined by Cilantro Acquisitions to be or to remain satisfied or (if capable of waiver) be waived by Cilantro Acquisitions by no later than 11.59 p.m. on the date immediately preceding the date of the Court Hearing to sanction the Scheme, failing which the Scheme will lapse.

Cilantro Acquisitions reserves the right to elect (with the consent of the Panel) to implement the Acquisition by way of an Offer as it may determine in its absolute discretion, subject to and in accordance with the terms of the Implementation Agreement. In such event, such Offer will be implemented on the same terms, so far as applicable, as those which would apply to the Scheme, subject to appropriate amendments to reflect the change in method of effecting the Acquisition. If Cilantro Acquisitions makes an Offer it will be conditional on valid acceptances being received in respect of 75 per cent. (or such higher percentage as Cilantro Acquisitions may decide with the consent of the Panel, or such lower percentage as Cilantro Acquisitions may decide or the Panel may require) in nominal value of the Spice Shares.

Save to the extent cancelled pursuant to the Scheme, Spice Shares will be acquired by Cilantro Acquisitions fully paid and free from all liens, equities, charges, encumbrances, options, rights of pre-emption and any other third party rights and interests of any nature and together with all rights now or hereafter attaching or accruing to them, and subject to the following paragraph.

Save for the final dividend of 1.22 pence per Spice Share paid to the Spice Shareholders on 14 September 2010, in so far as a Distribution is declared, made, paid or payable by Spice in respect of the Spice Shares after 1 May 2010, the price payable under the Acquisition in respect of the Spice Shares will be reduced by the aggregate amount of the Distribution that has been declared, made, paid or is payable. To the extent that the Distribution that has been declared, made, paid or is payable is or will be transferred or cancelled pursuant to the Acquisition on a basis which entitles Cilantro Acquisitions alone to receive the Distribution and to retain it, the price payable under the Acquisition in respect of the Spice Shares will not be subject to change in accordance with the preceding paragraph.

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

The Acquisition and the Scheme will be governed by English law and be subject to the jurisdiction of the English courts and to the Conditions set out above and to be set out in the Scheme Document. The Scheme will be subject to the applicable requirements of the Code, the Panel, the London Stock Exchange, the FSA and applicable US securities law.

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

Except with the consent of the Panel, Cilantro Acquisitions shall not invoke any Condition (save for any of the Conditions under paragraph 1 of Part A of this Appendix I) so as to cause the Acquisition not to proceed, to lapse or to be withdrawn unless the circumstances which give rise to the right to invoke the Condition are of material significance to Cilantro Acquisitions or Cinven in the context of the Acquisition.

APPENDIX II

SOURCES OF INFORMATION AND BASES OF CALCULATION

In this announcement:

1. Unless otherwise stated, financial information relating to the Spice Group has been extracted or derived (without any adjustment) from the audited consolidated financial statements for the Spice Group for the year ended 30 April 2010.

2. The value of the Acquisition is calculated on the basis of the fully diluted share capital of Spice referred to in paragraph 4 below.

3. As at the close of business on 24 September 2010, being the last business day prior to the date of this announcement, Spice had in issue 352,184,980 Spice Shares. The International Securities Identification Number for Spice Shares is GB00B3CG9C16.

4. The fully diluted share capital of Spice (being approximately 358,666,006 Spice Shares) is calculated on the basis of:

● the number of issued Spice Shares referred to in paragraph 3; and

● any further Spice Shares which may be issued on or after the date of this announcement on the exercise of options under the Spice Share Schemes, amounting in aggregate to approximately 6,481,026 Spice Shares.

5. Unless otherwise stated, all prices and closing prices for Spice Shares are closing middle market quotations derived from the Daily Official List.

APPENDIX III

DETAILS OF IRREVOCABLE UNDERTAKINGS AND LETTERS OF INTENT

1. Irrevocable undertakings

Spice Directors

The following Spice Directors have given irrevocable undertakings to vote in favour of the Scheme at the Court Meeting (or otherwise to be bound by the Scheme) and the Special Resolution to be proposed at the General Meeting in relation to the following Spice Shares:

Name	Number of Spice Shares*	Percentage of issued share capital of Spice
Oliver Lightowlers	1,402,825	0.40
Andrew Catchpole	1,045,715	0.30
Christopher Lee	433,622	0.12
Timothy Huddart	163,550	0.05
Michael Shallow	150,000	0.04
Peter Cawdron	29,228	0.01
Martin Towers	20,509	0.01
Total	3,245,449	0.93

* These numbers include Spice shares held by family members of the relevant director to which the irrevocable also relates.

These irrevocable undertakings given by the Spice Directors will cease to be binding if the Scheme or Offer (as applicable) lapses or (with the consent of the Panel) is withdrawn, but otherwise remain binding in the event that a higher competing offer for Spice is made.

Other Spice Shareholders

Certain of the Spice Shareholders have given irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting in relation to the following Spice Shares:

Name	Number of Spice Shares	Percentage of issued share capital of Spice
Hermes Focus Asset Management Limited as general partner of Hermes Specialist UK Focus Fund	26,502,628	7.53
The Co-operative Asset Management	22,414,804	6.36
Simon Rigby	17,366,926*	4.93
Rigby Children's Discretionary Trust for the benefit of Nicholas and Victoria Rigby	12,500,000	3.55
Impax Asset Management Limited	7,389,453	2.10
Total	86,173,811	24.47

* This number includes the number of Spice shares held by pension schemes or family trusts of Simon Rigby to which the irrevocable also relates but excludes the shares held by the Rigby Children's Discretionary Trust for the benefit of Nicholas and Victoria Rigby which are also the subject of a separate irrevocable.

The irrevocable undertakings from Hermes Focus Asset Management Limited as general partner of Hermes Specialist UK Focus Fund, The Co-operative Asset Management, Simon Rigby, Rigby Children's Discretionary Trust for the benefit of Nicholas and Victoria Rigby and Impax Asset Management Limited will cease to be binding if: (i) Cilantro Acquisitions announces that it does not intend to make or proceed with the Scheme or Offer (as applicable) and no new, revised or replacement Scheme or Offer is announced in accordance with Rule 2.5 of the Code at the same time; or (ii) the Scheme or Offer (as applicable) lapses or is withdrawn; or (iii) a third party announces a proposal pursuant to Rule 2.5 of the Code to acquire the entire issued and to be issued share capital of Spice (whether by means of a Scheme or an Offer), such proposal provides for consideration in cash at more than a ten per cent. premium to the price per Spice Share being offered at that time by Cilantro Acquisitions and Cilantro Acquisitions does not increase the value of the consideration under the terms of the Scheme or Offer (as applicable) to a price per Spice Share at least equal to that being offered by the third party within five days of the date of the third party's announcement.

2. Letters of intent

A Spice Shareholder has given a non-binding letter of intent indicating its current intention to vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting in relation to the following Spice Shares:

Name	Number of Spice Shares	Percentage of issued share capital of Spice
UBS AG London Branch Investment Banking Division	10,965,717	3.11
Total	10,965,717	3.11

The letter of intent from UBS AG London Branch Investment Banking Division will cease to have any effect if: (i) the Scheme Document or Offer Document (as applicable) is not posted within 28 days of this announcement; or (ii) a third party announces a proposal pursuant to Rule 2.5 of the Code to acquire the entire issued and to be issued share capital of Spice (whether by means of a Scheme or an Offer).

APPENDIX IV

DEFINITIONS

The following definitions apply throughout this announcement unless the context requires otherwise:

"2003 ESOS" means the Spice 2003 Employees' Share Option Scheme;

"2006 PSP" means the Spice 2006 Performance Share Plan;

"2009 ESPP" means the Spice 2009 Employee Stock Purchase Plan;

"Acquisition" means the proposed acquisition by Cilantro Acquisitions of the entire issued and to be issued ordinary share capital of Spice (other than the Excluded Shares) pursuant to the Scheme;

"Act" means the Companies Act 2006, as amended or re-enacted from time to time;

"Altium" means Altium Capital Limited (incorporated in England and Wales under the Act with registered number 01072627), whose registered office is at 30 St James's Square London SW1Y 4AL;

"Approved ESOS" means the Spice Inland Revenue Approved Executive Share Option Scheme;

"business day" means a day (excluding Saturdays, Sundays and public holidays) on which banks are generally open for business in the City of London;

"Capital Reduction" means the proposed reduction of the share capital of Spice involving the cancellation and the extinguishing of the Scheme Shares pursuant to the Scheme under section 641 of the Act as described in this announcement;

"Cilantro Acquisitions" means Cilantro Acquisitions Limited (incorporated in England and Wales under the Act with registered number 7383194), whose registered office is Warwick Court, Paternoster Square, London EC4M 7AG;

"Cilantro Acquisitions Board" or "Cilantro Acquisitions Directors" means the board of directors of Cilantro Acquisitions and "Cilantro Acquisitions Director" means any of them;

"Cilantro Acquisitions Group" means Cilantro Acquisitions, its subsidiaries or subsidiary undertakings, its holding companies, and the subsidiaries of its holding companies and, where the context so permits, each of them;

"Cinven" means Cinven Limited (incorporated in England and Wales under the Act with registered number 02192937), whose registered office is Warwick Court, Paternoster Square, London EC4M 7AG;

"Closing Price" means the closing middle market quotation of a Spice Share, as derived from the Daily Official List;

"Code" means the Code on Takeovers and Mergers, as amended from time to time;

"Competing Proposal" means any offer, scheme of arrangement, merger or business combination, or similar transaction, which is announced or entered into by a third party which is not acting in concert (as defined in the Code) with Cilantro Acquisitions, including any revisions thereof, and the purpose of which is to enable that third party (or any other person) to acquire, directly or indirectly, all or a significant proportion (being 20 per cent. or more when aggregated with the shares already held by the third party and anybody acting in concert (as defined in the Code) with that third party) of the share capital of Spice, or all or a significant proportion of its undertaking, assets or business (being 20 per cent. or more of the undertaking, assets or business of the Spice Group taken as a whole);

"Conditions" means the conditions to the implementation of the Acquisition (including the Scheme) as set out in Appendix I to this announcement and to be set out in the Scheme Document;

"Court" means the High Court of Justice of England and Wales;

"Court Hearings" means the hearings by the Court of the claim form for the sanctioning of the Scheme under section 899 of the Act and to confirm the Capital Reduction under section 648 of the Act and "Court Hearing" shall mean any one of those Court Hearings;

"Court Meeting" means the meeting(s) of the Scheme Shareholders to be convened by order of the Court pursuant to section 896 of the Act, notice of which will be set out in the Scheme Document, for the purpose of approving the Scheme, including any adjournment thereof;

"Court Orders" means the orders of the Court sanctioning the Scheme under section 899 of the Act and confirming the Capital Reduction under section 648 of the Act and "Court Order" shall mean any one of those Court Orders;

"CREST" means the relevant system (as defined in the CREST Regulations) of which Euroclear UK & Ireland Limited, a company incorporated under the laws of England and Wales, is the Operator (as defined in the CREST Regulations);

"CREST Regulations" means the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755);

"Daily Official List" means the daily official list of the London Stock Exchange;

"Dealing Disclosure" means an announcement pursuant to Rule 8 of the Code containing details of dealings in interests in relevant securities of a party to an offer;

"Distribution" means a dividend and/or distribution and/or return of capital;

"Effective" means in the context of the Acquisition:

(a) if the Acquisition is implemented by way of the Scheme, the Scheme having become effective pursuant to its terms; or

(b) if the Acquisition is implemented by way of an Offer, the Offer having been declared or become unconditional in all respects in accordance with the requirements of the Code;

"Effective Date" means the date on which the Scheme becomes Effective;

"European Commission" means the executive body of the European Union;

"Excluded Shares" means any Spice Shares which are registered in the name of or beneficially owned by any member of the Cilantro Acquisitions Group or its nominee(s);

"Executive Directors" means Oliver Lightowlers, Christopher Lee and Andrew Catchpole;

"FSA" means the Financial Services Authority;

"FSMA" means the Financial Services and Markets Act 2000 (as amended from time to time);

"General Meeting" means the general meeting of Spice to be convened in connection with the Scheme and the Capital Reduction, notice of which will be set out in the Scheme Document, including any adjournment thereof;

"Hawkpoint" means Hawkpoint Partners Limited, (incorporated in England and Wales under the Act with registered number 3875835), whose registered office is 41 Lothbury, London EC2R 7AE;

"holder" means a registered holder of shares, including any person entitled by transmission;

"holding company" has the meaning given to it in section 1159 of the Act;

"Implementation Agreement" means the agreement dated 27 September 2010 and made between Cilantro Acquisitions and Spice and relating, among other things, to the implementation of the Acquisition;

"Independent Directors" means the Spice Directors other than the Executive Directors;

"Investec" means Investec Investment Banking, a division of Investec Bank plc, a public limited company (incorporated in England and Wales with registered number 00489604), whose registered office is at 2 Gresham Street, London EC2V 7QP;

"KBC Peel Hunt" means KBC Peel Hunt Ltd (incorporated in England and Wales under the Act with registered number 02320252), whose registered office is 111 Old Broad Street, London EC2N 1PH;

"Listing Rules" means the rules and regulations made by the FSA in its capacity as the UK Listing Authority under Part VI of FSMA, and contained in the UK Listing Authority's publication of the same name;

"London Stock Exchange" means London Stock Exchange plc;

"Longstop Date" means the date falling 145 days after the date on which this announcement is issued or such other date as may be agreed by Cilantro Acquisitions and Spice in writing;

"Major Transaction" means any proposal by Spice or any other member of its Group to dispose of a significant part (being 20 per cent. or more of the Spice Group taken as a whole) of its undertaking, business or assets where such disposal would require the consent of the Panel or the approval of Spice Shareholders in general meeting under the Listing Rules or under Rule 21.1 of the Code;

"Meetings" means the Court Meeting and the General Meeting and "Meeting" means either of them;

"Non Approved ESOS" means the Spice Non Approved Executive Share Option Scheme;

"Offer" means a takeover offer (within the meaning of section 974 of the Act) for the entire issued and to be issued ordinary share capital of Spice (other than any shares held by Cilantro Acquisitions (if any)) including any amendment or revision thereto, the full terms of which will be set out in the related offer document(s);

"Official List" means the Official List of the UK Listing Authority;

"Opening Position Disclosure" means an announcement pursuant to Rule 8 of the Code containing details of interests or short positions in, or rights to subscribe for, any relevant securities of a party to an offer;

"Overseas Shareholders" means the Scheme Shareholders who are resident in, ordinarily resident in, or citizens of, jurisdictions outside the United Kingdom;

"Panel" means the UK Panel on Takeovers and Mergers;

"Reduction Record Time" means 6.00 pm on the last business day immediately prior to the Court Hearing to confirm the Capital Reduction;

"Registrar" means the Registrar of Companies in England and Wales, within the meaning of the Act;

"Regulatory Information Service" means any channel recognised as a channel for the dissemination of regulatory information by listed companies as defined in the Listing Rules made by the FSA pursuant to section 73A of FSMA;

"Savings Related Share Option Scheme" means the Spice Inland Revenue Approved Savings Related Share Option Scheme;

"Scheme" means the scheme of arrangement proposed to be made under Part 26 of the Act between Spice and the Scheme Shareholders to implement the Acquisition, with or subject to any modification, addition or condition approved or imposed by the Court and/or agreed to by Spice and Cilantro Acquisitions;

"Scheme Document" means the circular in respect of the Scheme to be sent to (among others) Spice Shareholders setting out (among other things) the Scheme and notices convening the Meetings;

"Scheme Shareholders" means holders of Scheme Shares, and a "Scheme Shareholder" shall mean any one of those Scheme Shareholders;

"Scheme Shares" means all Spice Shares which are:

(a) in issue at the date of the Scheme Document;

(b) (if any) issued after the date of the Scheme Document but before the Voting Record Time; and

(c) (if any) issued at or after the Voting Record Time but at or before the Reduction Record Time either on terms that the original or any subsequent holders of such Spice Shares are to be bound by the Scheme or in respect of which such holders are, or have agreed in writing to be so bound,

in each case, other than the Excluded Shares;

"Spice" means Spice plc (incorporated in England and Wales under the Companies Act 1985 with registered number 3250709), whose registered office is at Wellfield House, Victoria Road, Morley, Leeds LS27 7PA;

"Spice Board" or "Spice Directors" means the board of directors of Spice and "Spice Director" means any of them;

"Spice Group" means Spice, its direct or indirect subsidiaries or subsidiary undertakings and, where the context so permits, each of them;

"Spice Share Schemes" means together, the Savings Related Share Option Scheme, the Approved ESOS, the Non Approved ESOS, the 2003 ESOS, the 2009 ESPP and the 2006 PSP;

"Spice Shareholders" means the holders of Spice Shares;

"Spice Shares" means the ordinary shares of two pence each in the capital of Spice;

"Special Resolution" means the special resolution to be proposed at the General Meeting;

"Statement of Capital" means the statement of capital (approved by the Court) showing, as altered by the Court Order confirming the Capital Reduction, the information required by section 649 of the Act with respect to Spice's share capital;

"Superior Proposal" means a bona fide Competing Proposal which the Independent Directors consider, acting reasonably and after consultation with their legal and financial advisers is able to be announced pursuant to Rule 2.5 of the Code promptly and is likely to be completed in accordance with its terms taking into account all financial, regulatory and other aspects of such proposal (including the ability of the proposing party to consummate the transactions contemplated by such proposal) and which at the time of announcement would be superior to the Acquisition from a financial point of view for Spice Shareholders, and which the Independent Directors are therefore minded to recommend;

"UK" or "United Kingdom" means the United Kingdom of Great Britain and Northern Ireland;

"UK Listing Authority" means the FSA acting in its capacity as the competent authority for listing under FSMA;

"United States of America" or "US" means the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia and all other areas subject to its jurisdiction;

"US Exchange Act" means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder; and

"Voting Record Time" means the time and date specified in the Scheme Document by reference to which entitlement to vote at the Court Meeting will be determined.

For the purposes of this announcement, "parent undertaking", "subsidiary", "subsidiary undertaking", "undertaking" and "associated undertaking" have the meanings given by the Act.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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