Statement re Ongoing discussions with Apollo

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO, OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

14 October 2015

For immediate release

Xchanging plc

Statement regarding Ongoing Discussions with Apollo Global Management, LLC ("Apollo")

Further to the announcement today of the recommended offer from Capita plc ("Capita") for Xchanging plc's ("Xchanging" or the "Company") issued and to be issued share capital at 160 pence per share in cash, the Board of Xchanging wishes to draw this announcement to the attention of Xchanging shareholders.

The Board of Xchanging is mindful of its obligations to all its stakeholders and, in particular, to maximise the valuation of Xchanging for all shareholders. In recommending (in the absence of a higher offer) Capita's offer at 160 pence per share in cash, the Board of Xchanging has decided to provide the opportunity for shareholders to consider the offer from Capita, in order to ensure a minimum certain outcome for Xchanging shareholders and to impose a clear regulatory timetable (under the City Code on Takeovers and Mergers (the "Code")) for Apollo potentially to announce a competing offer. The Board of Xchanging confirms that discussions with Apollo are continuing with regard to a potential offer for Xchanging at 170 pence per share in cash.

There can be no certainty that any offer from Apollo will be made, nor as to the terms of any such offer. Further announcements will be made in due course, as appropriate.

For the avoidance of doubt, the previous deadline (under Rule 2.6(a) of the Code), for Apollo to announce either a firm intention to make an offer (in accordance with Rule 2.7 of the Code) or that they do not intend to make an offer (in accordance with Rule 2.8 of the Code) of 5:00pm on 2 November, 2015, has been replaced (as a result of today's Rule 2.7 announcement by Capita) with the deadline of Day 53 following the posting of Capita's offer document.  

This announcement is being made by Xchanging without the prior agreement or approval of Apollo.

Enquiries:

Xchanging plc Tel: +44 (0) 20 3604 6999Geoff Unwin, ChairmanKen Lever, Chief Executive

Lazard (Financial Adviser) Tel: +44 (0) 20 7187 2000William Rucker

Cyrus KapadiaOlivier Christnacht

Investec (Corporate Broker) Tel: +44 (0) 20 7597 4000Christopher Baird

James Rudd

Liberum (Corporate Broker) Tel: +44 (0) 20 3100 2000Peter Tracey

Neil Patel

Maitland (Financial PR) Tel: +44 (0) 20 7379 5151Emma Burdett

Dan Yea Mob: +44 (0) 7595 270691

www.xchanging.com

@XchangingGroup

Linkedin/company/xchanging

Disclaimer

Lazard & Co., Limited, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for Xchanging and for no one else in connection with the possible offer and will not be responsible to anyone other than Xchanging for providing the protections afforded to its clients or for providing advice in connection with the possible offer referred to in this announcement.

Investec Bank plc, which is authorised in the United Kingdom by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, is acting exclusively for Xchanging and no-one else in connection with the possible offer and will not be responsible to anyone other than Xchanging for providing the protections afforded to its clients or for providing advice in connection with the possible offer referred to in this announcement.

Liberum Capital Limited, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for Xchanging and for no one else in connection with the possible offer and will not be responsible to anyone other than Xchanging for providing the protections afforded to its clients or for providing advice in connection with the possible offer referred to in this announcement.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange 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 securities exchange 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 securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange 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 securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange 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 securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (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 securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

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

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 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. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.