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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Broker Network | LSE:BNH | London | Ordinary Share | GB00B00GD538 | ORD 2P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 595.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:5646I Towergate Partnership Limited 27 November 2007 Offer for Broker Network HOLDINGS plc Not for release, publication or distribution, in whole or in part, in or into or from any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction FOR IMMEDIATE RELEASE 27 November 2007 Recommended Cash Offer by Towergate Partnership Limited ("Towergate") for Broker Network Holdings plc ("Broker Network") Summary * The Broker Network Board and the Towergate Board are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Towergate for the entire issued and to be issued share capital of Broker Network. * The Offer will be 605 pence in cash for each Broker Network Share valuing the entire existing issued and to be issued share capital of Broker Network at approximately #95 million in aggregate. * The Offer Price represents a premium of approximately: (i) 15.8 per cent. to the Closing Price of 522.5 pence per Broker Network Share on 26 November 2007, being the last Business Day prior to the date of this announcement; (ii) 27.6 per cent. to the Closing Price of 474 pence per Broker Network Share on 11 October 2007, being the last Business Day prior to Broker Network announcing that it had received an approach that may or may not lead to an offer; and (iii) 92.7 per cent. over the average Closing Price of 314 pence per Broker Network Share for the 12 months from 12 October 2006 to 11 October 2007 being the last Business Day prior to the commencement of the Offer Period. * Towergate has received irrevocable undertakings to accept or procure the acceptance of the Offer in respect of a total of 8,499,420 Broker Network Shares representing approximately 55.2 per cent. of the existing issued share capital of Broker Network. * Towergate is the UK's largest independently owned insurance intermediary, offering approximately 200 specialist insurance products and employing more than 3,400 people in 100 offices. Since its foundation in 1997, the Towergate Group has completed more than 130 acquisitions and now controls run-rate gross written premium of #1.1 billion per annum. In the year ending 31 December 2006, Towergate achieved revenues of #238 million and EBITDA of approximately #95 million. * Towergate believes that the acquisition of Broker Network will provide Towergate with a large network presence in the UK and will be the foundation upon which the Towergate Directors expect to continue to expand the Towergate Group through additional network acquisitions. Towergate believes that Broker Network is an attractive and well-run business that has experienced growth in both its network and owned broker businesses and will therefore provide the foundation on which to continue its expansion. * The Broker Network Directors, who have been so advised by Cenkos Securities Limited, consider the terms of the Offer to be fair and reasonable. * The Broker Network Directors unanimously recommend that Broker Network Shareholders accept the Offer, as they have irrevocably undertaken to do or to procure to be done in respect of their entire beneficial shareholdings and the shareholdings of any person whose interest in relevant securities a Broker Network Director is taken to be interested in pursuant to Part 22 of the Companies Act 2006, comprising in aggregate 3,815,588 Broker Network Shares, representing 24.8% per cent. of Broker Network's entire issued share capital. * Commenting on the Offer, Peter Cullum, the Executive Chairman of Towergate, said: "We are delighted to announce this transaction. This is a deal that makes great sense for employees, brokers and customers alike of Broker Network - our two organisations complement each other perfectly. I have known Grant Ellis for many years and I know we both share the same passion for promoting the role and value of a broker. We also share the same enthusiasm for how Broker Network could flourish under our ownership and continue to be run as a first class business for its broker members. Grant Ellis's proposed position as the Chairman of the Network Division of Towergate demonstrates our commitment to offering the leading UK network proposition." * Commenting on the Offer, Grant Ellis, the Chief Executive of Broker Network said: "The Broker Network Board feels that the offer made by Towergate is in the best interests of the Broker Network Shareholders and indeed in the best interests of the Broker Network business, its network members and its people too. Towergate is a major presence in the UK insurance market and joining forces with them presents Broker Network and its members with further opportunities to expand and prosper, which I'm very excited about." Enquiries: Lexicon Partners Tel: 020 7653 6000 Stuart Britton Joe Suddaby Tulchan Communications Tel: 020 7353 4200 Paul Harris Cenkos Securities Tel: 020 7397 8900 Ian Soanes Fox-Pitt, Kelton Tel: 020 7663 6000 Ryan Brown Broker Network PR and Communications Tel: 01423 554147 Kelly-Ann Knight The above summary should be read in conjunction with the full text of the attached announcement. The full text of the conditions of the Offer and the bases and sources of assumptions and calculations are set out in Appendices 1 and 2 respectively, each of which form part of and should be read with this announcement. Defined terms have the meanings set out in Appendix 3 which also forms part of and should be read in conjunction with this announcement. This announcement does not constitute or form part of an offer for, or solicitation of any offer for, or invitation to sell or purchase or subscribe for any securities. The Offer will be made solely by means of the Offer Document and the Form of Acceptance accompanying the Offer Document which will contain the full terms and conditions of the Offer, including details of how it may be accepted. Lexicon Partners is acting exclusively for Towergate and no-one else in connection with the Offer and will not be responsible to anyone other than Towergate for providing the protections afforded to clients of Lexicon Partners nor for providing advice in relation to the Offer or any matter referred to in this announcement. Lexicon Partners is authorised and regulated in the United Kingdom by the Financial Services Authority. Cenkos Securities is acting exclusively for Broker Network and no-one else in connection with the Offer and will not be responsible to anyone other than Broker Network for providing the protections afforded to clients of Cenkos Securities nor for providing advice in relation to the Offer or any matter referred to in this announcement. Cenkos Securities is authorised and regulated in the United Kingdom by the Financial Services Authority. Fox-Pitt, Kelton Limited is acting exclusively for Broker Network and no-one else in connection with the Offer and will not be responsible to anyone other than Broker Network for providing the protections afforded to clients of Fox-Pitt, Kelton nor for providing advice in relation to the Offer or any matter referred to in this announcement. Fox-Pitt, Kelton is authorised and regulated in the United Kingdom by the Financial Services Authority. The availability of the Offer to Broker Network Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdiction in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements. Unless otherwise determined by Broker Network and permitted by applicable law and regulation, the Offer will not be made, directly or indirectly, in, into or from, or by use of mails or any means or instrumentality (including, without limitation, facsimile transmission, telephone or internet) of interstate or foreign commerce of, or any facilities of a national, state or other securities exchange of any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction, and the Offer will not be capable of acceptance by any such use, means, instrumentality or facilities or from or within any such countries or jurisdiction. Accordingly, copies of any documents relating to the Offer must not be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent, in whole or in part, in, into or from any jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not directly or indirectly mail, transmit or otherwise forward, distribute or send them in, into or from any such jurisdiction as to do so may invalidate any such purported acceptance of the Offer. All statements other than statements of historical fact included in this announcement may be "forward-looking statements". Often, but not always, forward-looking statements can be identified by the use of the words such as "will", "may", "should", "continue", "plans", "estimates", "forecasts", "believes", "expects", "intends", "anticipates" or variations (including negative variations) of such words and phrases, or they can state that certain actions, events or results "may", "could\", "should", "would", "might", "will" or "continue to" be taken, occur or be achieved. Forward-looking statements involve risks and uncertainties and other factors that may cause the actual results, performance or achievements of Broker Network, Towergate and/or their subsidiaries to be materially different from those expressed or implied by the forward-looking statements. Factors that would cause actual results to differ materially from those described in this announcement include, but are not limited to: costs and terms related to the acquisition of Broker Network; the economic environment of the sectors in which Broker Network and Towergate operate; failure to retain management; regulatory change in the industry; and/or the general economic environment. This list is not exhaustive of the factors that may affect the forward-looking information. These and other factors should be considered carefully and undue reliance should not be placed on such forward-looking information. Although this announcement has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ materially from those anticipated, estimated or intended and therefore there can be no assurance that forward-looking statements will prove to be accurate. Forward-looking statements contained in this announcement in respect of Broker Network and/or Towergate are made as of the date of this announcement based on the opinions and estimates of management. Subject to requirements to update under any applicable regulation or law, Towergate and/or Broker Network disclaims any obligation to update any forward-looking statements, whether as a result of new information, estimates or opinions, future events or results or otherwise. The Panel wishes to draw attention to certain UK dealing disclosure requirements following the announcement of the Offer. An "offer period" is deemed to commence at the time when an announcement is made of a proposed or possible offer, with or without terms. Accordingly, the offer period began on 12 October 2007. The disclosure requirements are set out in more detail in Rule 8 of the City Code. Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes, "interested" (directly or indirectly) in 1% or more of any class of " relevant securities" of Broker Network or Towergate, all "dealings" in any " relevant securities" of that company, (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 pm (London time) on the business day following the date of the relevant transaction. This requirement will continue until the date on which the Offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of Broker Network or of Towergate, they will be deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevant securities" of Broker Network or of Towergate, by Towergate or Broker Network, or by any of their respective "associates", must be disclosed by no later than 12.00 noon (London time) on the business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at http:// www.thetakeoverpanel.org.uk/. "Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities. Terms in quotation marks are defined in the City 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, you should contact an independent financial adviser authorised under the Financial Services and Markets Act 2000 if you are resident in the UK or, if not, an appropriately authorised independent financial adviser or consult the Panel's website at http:// www.thetakeoverpanel.org.uk/ or contact the Panel on +44 207 382 9026; fax: +44 207 236 7005. 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 of such jurisdiction FOR IMMEDIATE RELEASE 27 November 2007 Recommended Cash Offer by Towergate Partnership Limited ("Towergate") for Broker Network Holdings plc ("Broker Network") 1. Introduction The Broker Network Board and the Towergate Board are pleased to announce that they have reached agreement on the terms of a recommended cash offer, to be made by Towergate to acquire the entire issued and to be issued share capital of Broker Network. The formal Offer will be set out in the Offer Document, which is expected to be despatched to Broker Network Shareholders and (for information only) to the Broker Network Optionholder shortly. 2. The Offer The Offer, which will be made on the terms and subject to the conditions set out in Appendix 1of this announcement and the further terms and conditions to be set out or referred to in the Offer Document and Form of Acceptance, will be made on the following basis: for each Broker Network Share 605 pence in cash The Offer, which is wholly in cash, values the entire issued and to be issued share capital of Broker Network subject to the Offer at approximately #95 million in aggregate. The Offer Price represents a premium of approximately: (i) 15.8 per cent. to the Closing Price of 522.5 pence per Broker Network Share on 26 November 2007, being the last Business Day prior to the date of this announcement; (ii) 27.6 per cent. to the Closing Price of 474 pence per Broker Network Share on 11 October 2007, being the last Business Day prior to Broker Network announcing that it had received an approach that may or may not lead to an offer; and (iii) 92.7 per cent. over the average daily Closing Price of 314 pence per Broker Network Share for the 12 months from 12 October 2006 to 11 October 2007 being the last Business Day prior to the commencement of the Offer Period. The Broker Network Shares will be acquired by Towergate pursuant to the Offer fully paid, with full title guarantee and free from all liens, equitable interests, charges, mortgages, encumbrances, rights of pre-emption and any other third party rights or interests of whatever nature and together with all rights attaching thereto, including all voting rights and the right to receive and retain all dividends, distributions and other returns of capital (if any) declared, made or paid in respect of Broker Network Shares on or after the date of this announcement. 3. Recommendation The Broker Network Directors, who have been so advised by Cenkos Securities, consider the terms of the Offer to be fair and reasonable. In providing advice to the Broker Network Directors, Cenkos Securities has taken into account the commercial assessments of the Broker Network Directors. Accordingly, the Broker Network Directors unanimously recommend that Broker Network Shareholders accept the Offer as they have irrevocably undertaken to do or procure to be done in respect of their entire beneficial shareholdings and the shareholdings of any person whose interest in relevant securities a Broker Network Director is taken to be interested in pursuant to Part 22 of the Companies Act 2006, such beneficial shareholdings comprising in aggregate 3,815,588 Broker Network Shares representing 24.8 per cent. of Broker Network's entire issued share capital. 4. Irrevocable undertakings and letters of intent Towergate has received irrevocable undertakings to accept, or procure the acceptance of, the Offer from the persons referred to below in respect of a total of 8,499,420 Broker Network Shares representing approximately 55.2 per cent. of the existing issued share capital of Broker Network. The Broker Network Directors have entered into irrevocable undertakings with Towergate pursuant to which they have irrevocably undertaken to accept, or procure the acceptance of, the Offer in respect of their entire beneficial shareholdings and the shareholdings of any person whose interest in relevant securities a Broker Network Director is taken to be interested in pursuant to Part 22 of the Companies Act 2006. These shareholdings in the share capital of Broker Network amount in aggregate to 3,815,588 Broker Network Shares, representing approximately 24.8 per cent. of the existing issued share capital of Broker Network. These undertakings remain binding even if a higher offer is made by a third party. David Belgian, an individual investor in Broker Network, has entered into an irrevocable undertaking with Towergate, pursuant to which he has irrevocably undertaken to accept, or procure the acceptance of, the Offer in respect of his entire beneficial shareholding and the shareholdings of any other person whose interest in relevant securities he is taken to be interested in pursuant to Part 22 of the Companies Act 2006. These shareholdings in the share capital of Broker Network amount in aggregate to 1,250,000 Broker Network Shares, representing approximately 8.1 per cent. of the existing issued share capital of Broker Network. These undertakings remain binding even if a higher offer is made by a third party. In addition, Hargreave Hale Limited, Ennismore Fund Management Limited, Artemis Investment Management Limited and Axa Framlington Investment Management Limited have entered into irrevocable undertakings with Towergate pursuant to which they have irrevocably undertaken to accept or procure the acceptance of the Offer in respect of their entire registered and/or beneficial shareholdings. These shareholdings in the share capital of Broker Network amount in aggregate to 3,433,832 Broker Network Shares representing approximately 22.3 per cent. of the existing issued share capital of Broker Network. These undertakings will cease to be binding if a higher offer of more than 10 per cent. of the value of the consideration of the Offer is made by a third party. In addition, Towergate has received non-legally binding letters of intent to accept the Offer in respect of, in aggregate, 1,223,500 Broker Network Shares, representing approximately 7.9 per cent. of Broker Network's existing issued share capital. Further details of these irrevocable undertakings and letters of intent are set out in paragraph 2 in Appendix 2 to this announcement. 5. Background to and reasons for the recommendation of the Offer Broker Network was listed on AIM in May 2004 and its shares began trading at a price of 71p per Broker Network Share. Since its admission to AIM, Broker Network has successfully implemented a strategy of organic growth by attracting more members to its network and by acquiring retail insurance broking businesses. The Broker Network Group is a large network for independent commercial insurance brokers in the UK, providing members with the benefits of being part of a national business including mutually beneficial relationships with insurers. Broker Network operates in a very competitive marketplace but has been able to grow strongly by offering diverse products and support services which benefit its members' business as well as growing its own community-based, wholly-owned broking business. The Broker Network Directors believe that generating growth will become increasingly challenging in the future and that building scale will be a key driver of added value to the network and therefore to Broker Network's business. The Broker Network Directors believe that the combination of Broker Network's business with that of the Towergate Group, the largest independently owned insurance intermediary in the UK, will bring scale benefits to the Broker Network Group and its members, such as enhanced terms with underwriters, which Broker Network would otherwise not be able to achieve. The Broker Network Directors consider that the terms of the Offer appropriately reflect the value that Broker Network is expected to bring to the Towergate Group. The Broker Network Directors consider, having taken account of the competitive environment in which Broker Network operates and the on-going risks involved in the execution of its strategy, that the Offer fairly reflects the value of Broker Network. 6. Background to and reasons for the Offer A key element of Towergate's growth strategy is to establish an insurance broking network alongside its existing owned brokers and underwriting managing general agents. The Towergate Directors believe that membership of a network is a preferred option for many smaller brokers and aims to build a network proposition that will represent a source of enhanced benefits to such brokers. Broker Network operates a network of 169 independent commercial insurance brokers in the UK. The Towergate Directors believe that the acquisition of Broker Network will provide Towergate with a large network presence in the UK and will be the foundation upon which the Towergate Directors expect to continue to expand the Towergate Group either through additional network acquisitions or acquisitions of existing members of the Broker Network network in circumstances where such members wish to consider changes in ownership in the future. The Towergate Directors believe that a proportion of the existing premium volume controlled by Broker Network may attract enhanced margins under Towergate's ownership. Given Towergate's focus on the commercial and specialist classes of business in which it currently operates, the wholly-owned broking subsidiaries of Broker Network, which are active in these areas, would be natural additions to the Towergate Group. Broker Network has seen strong growth in income and profit in recent years as the size of its network has increased and additionally as Broker Network has acquired and integrated other insurance brokers from both within and outside its network. The Towergate Directors believe that Broker Network is an attractive and well-run business that should continue to perform strongly as part of the Towergate Group. 7. Information relating to the Towergate Group The Towergate Group is the UK's largest independently owned insurance intermediary offering approximately 200 specialist insurance products and employing more than 3,400 people in 100 offices. The business consists of a number of specialist underwriting agencies and regional brokers providing a wide range of specialist and non-specialist general insurance products in partnership with a core group of capacity providers with whom the underwriting risk is placed. Since its establishment in 1997, Towergate has completed more than 130 acquisitions and controls run-rate gross written premium in excess of #1.1 billion per annum. The Towergate Group achieved revenues of #238 million and EBITDA of approximately #95 million in the year ending 31 December 2006 and completed a #580 million refinancing in November 2006, which included a bank facility of #235 million to support future acquisitions. Shortly afterwards, two institutional investors, Reservoir Capital and Och-Ziff, invested #100 million in securities issued by the Towergate Group. 8. Information relating to Broker Network Broker Network is an AIM-listed insurance broking business, employing over 450 people in 25 offices around the UK. Broker Network operates a network of independent general insurance brokers, acting as an intermediary between them and the insurance companies and by 26 November 2007, the number of members in Broker Network's network had reached 169. The Broker Network Group also owns a number of insurance brokers, acquired from both within and outside the network and to date has completed 22 acquisitions of insurance brokers. Although a number of non-network member brokers have been acquired during that time by the Broker Network Group, most acquisitions have been related to the retirement of network member principals. Broker Network is a fully accredited Lloyd's of London broker and, as such, it gives its group and its network members direct access to Lloyd's of London and the London insurance market. For the financial year ended 30 April 2007, Broker Network reported turnover of #23.26 million, profit before tax and goodwill amortisation of #6.53 million and fully diluted earnings per share of 20.33p. 9. Financing of the Offer The consideration payable under the Offer is being funded by Towergate's existing committed debt facilities ("Debt Facilities") which were originally arranged for Towergate by the Bank of Scotland plc and Lloyds TSB Bank plc in November 2006. The Banks have agreed, subject to certain conditions, to provide Towergate with a facility to fund the acquisition of the entire issued and to be issued share capital of Broker Network, the repayment of Broker Network's outstanding financial indebtedness and to pay certain fees and expenses associated with the Offer. Towergate has agreed with the Banks to use the funds advanced to it pursuant to the Debt Facilities, inter alia, in satisfying the cash consideration due to Broker Network Shareholders pursuant to the Offer. Towergate has agreed not to waive or amend any term or condition of the Offer without the prior consent of the Banks. Lexicon Partners, in its capacity as financial adviser to Towergate, has confirmed that the necessary financial resources are available to Towergate to satisfy full acceptance of the Offer. 10. Management and employees The Towergate Board has discussed with the Broker Network Directors their plans for the Broker Network management and employees within the Enlarged Group. Towergate has stated that it attaches great importance to the skills and experience of the existing management and employees of Broker Network and believes that they will be an important factor for the continuing success of the Enlarged Group. The Towergate Directors have given assurances that, upon the Offer becoming or being declared unconditional in all respects, the existing employment rights, including pension rights, of all employees will be fully safeguarded. Towergate plans to work with Broker Network's management to develop and integrate the Broker Network business within the Towergate Group. Given the complementary nature of the businesses of Towergate and Broker Network, the Towergate Directors do not currently envisage any substantial changes to Broker Network's management and employees to result from the Offer. The Broker Network Board and Towergate Board both believe that there will be opportunities for Broker Network employees to develop their careers within the broader framework of the Enlarged Group. Grant Ellis, Julie Hale, Mark Wood and Nigel Law, currently the Chief Executive, Finance Director and executive directors of Broker Network respectively, will each continue to work in a senior management capacity within the Enlarged Group. Each of their existing service contracts will continue to remain in place following the Offer becoming or being declared unconditional in all respects and there is no current intention that such contracts will be amended or varied. As at the date of this announcement, no formal commitments or promises have been made to any of the executive directors of Broker Network regarding the nature of any incentive arrangements which they may be offered following the Offer becoming or being declared unconditional in all respects. If any such incentive arrangements are considered in the future they will likely include the Towergate Board granting a value appreciation right to some or all of the executive directors of Broker Network, which would entitle each such director to a cash amount related to the growth in Broker Network achieved under the Towergate Group's ownership, which may become payable on one of the following events: (i) Towergate sells Broker Network pursuant to a trade sale or (ii) 90 per cent. or more of the Towergate Shares are listed on a public market. In addition, the Towergate Board may also consider offering Grant Ellis the opportunity to purchase up to #1 million of Towergate Shares following the Offer becoming or being declared unconditional in all respects. However, no formal commitments or promises have been entered into as at the date of this announcement. The non-executive directors of Broker Network will remain in office on the same terms following the Offer becoming or being declared unconditional in all respects. 11. Broker Network share scheme The Offer extends to any Broker Network Shares unconditionally allotted or issued and fully paid whilst the Offer remains open for acceptance (or by such earlier time and/or date as Towergate may, subject to the City Code, determine) including any shares acquired by participants pursuant to the Broker Network Incentive Plan and also including any shares allotted or issued and fully paid as a result of the exercise of the Broker Network EMI Options. Towergate will make appropriate proposals in due course to the Broker Network Optionholder. 12. Disclosure of interests in Broker Network Relevant Securities Save as disclosed in Appendix 2 of this announcement, as at 26 November 2007, being the last practicable Business Day prior to this announcement, neither Towergate nor, so far as Towergate is aware, any person acting in concert with Towergate, had an interest in or right to subscribe for relevant securities of Broker Network or had any short position in relation to relevant securities of Broker Network (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 of any relevant securities of Broker Network nor has any such person borrowed or lent therein. Save for the irrevocable undertakings and letters of intent described above, neither Towergate nor any person acting in concert with Towergate has any arrangement in relation to Broker Network Shares, or any securities convertible or exchangeable into Broker Network Shares or options (including trading options) in respect of, or derivatives referenced to, Broker Network Shares. For these purposes, "arrangement" includes any indemnity or option arrangement, any agreement or understanding, formal or informal, of whatever nature, relating to relevant securities which is, or may be, an inducement to deal or refrain from dealing in such securities. 13. Inducement fee As an inducement to Towergate to make the Offer, Broker Network has agreed to pay Towergate an inducement fee of #950,000 (exclusive of VAT to the extent that VAT is recoverable by Broker Network), in the event the Offer is withdrawn or lapses and, prior to such withdrawal or lapse: (a) any person or entity (other than Towergate or any person acting in concert with it, as such term is defined in the City Code) publicly announces a firm intention to make an offer or proposal (however effected) to acquire 30 per cent. or more of the voting rights attributable to the issued and to be issued share capital of Broker Network ("Competing Offer") and either (i) such Competing Offer or any other Competing Offer subsequently becomes or is declared unconditional in all respects or is otherwise completed, or (ii) such Competing Offer or any other Competing Offer is (whether at the time a Competing Offer is announced publicly or subsequently) recommended by the Broker Network Board or a committee of the Broker Network Board or any Broker Network Director; or (b) the Broker Network Board or any committee of the Broker Network Board or any Broker Network Director withdraws or modifies, in a manner adverse to Towergate, its or his recommendation to the Broker Network Shareholders in respect of the Offer; or (c) Broker Network (and/or any member(s) of Broker Network's Group) enters into any agreement, arrangement or understanding to dispose of any of its (or any of the companies in Broker Network's Group's) assets of a material amount (as such an amount would be determined in accordance with the terms of Note 2 to Rule 21.1 of the City Code) without the prior written consent of Towergate. Pursuant to Rule 21.2 of the City Code, Cenkos Securities and Broker Network have confirmed to the Panel that they consider the terms of the inducement fee to be in the best interests of Broker Network Shareholders. 14. Compulsory acquisition, de-listing and re-registration If Towergate receives acceptances under the Offer in respect of, and/or otherwise acquires, 90 per cent. or more in value of the Broker Network Shares to which the Offer relates and not less than 90 per cent. of the voting rights carried by those shares and the Offer becomes or is declared unconditional in all respects, Towergate intends to exercise its rights pursuant to Chapter 3 of Part 28 of the Companies Act 2006, to compulsorily acquire all remaining Broker Network Shares on the same terms as the Offer. It is Towergate's intention that, following the Offer becoming or being declared unconditional in all respects, Broker Network will apply for the admission to trading of Broker Network Shares on AIM to be cancelled. It is anticipated that such cancellation will take effect no earlier than 20 Business Days after the Offer becomes or is declared unconditional in all respects. Such cancellation would significantly reduce the liquidity and marketability of any Broker Network Shares not assented to the Offer and their value may be affected as a consequence. It is also proposed that, subject to the Offer becoming or being declared unconditional in all respects and following completion of the compulsory acquisition procedure referred to above, Towergate will seek to procure the re-registration of Broker Network as a private limited company under the relevant provisions of the Companies Act 2006. 15. General The Offer Document, together with the Form of Acceptance, will be posted to Broker Network Shareholders and (for information only) to the Broker Network Optionholder shortly. The Offer will be made subject to the conditions and on the terms contained in this announcement and on the further terms and conditions to be set out or referred to in the Offer Document and the Form of Acceptance. The Offer will be governed by the laws of England and Wales, the rules and regulations of the FSA, the rules of the London Stock Exchange, AIM, the Panel and the City Code and will be subject to the jurisdiction of the courts of England and Wales. The bases and sources of certain financial information contained in this announcement are set out in Appendix 2. Certain terms used in this announcement are defined in Appendix 3. Enquiries: Lexicon Partners Tel: 020 7653 6000 Stuart Britton Joe Suddaby Tulchan Communications Tel: 020 7353 4200 Paul Harris Cenkos Securities Tel: 020 7397 8900 Ian Soanes Fox-Pitt, Kelton Tel: 020 7663 6000 Ryan Brown Broker Network PR and Communications Tel: 01423 554147 Kelly-Ann Knight This announcement does not constitute, or form part of, an offer for, or any solicitation of any offer for, or invitation to sell or purchase or subscribe for any securities. The Offer will be made solely by means of the Offer Document and the Form of Acceptance accompanying the Offer Document, which will contain the full terms and conditions of the Offer including details of how it may be accepted. The full text of the conditions of the Offer and the bases and sources of assumptions and calculations are set out in Appendices 1 and 2 respectively, each of which form part of, and should be read with, this announcement. Defined terms have the meanings set out in Appendix 3, which also forms part of, and should be read in conjunction with, this announcement. Lexicon Partners is acting exclusively for Towergate and no-one else in connection with the Offer and will not be responsible to anyone other than Towergate for providing the protections afforded to clients of Lexicon Partners nor for providing advice in relation to the Offer or any matter referred to in this announcement. Lexicon Partners is authorised and regulated in the United Kingdom by the Financial Services Authority Cenkos Securities is acting exclusively for Broker Network and no-one else in connection with the Offer and will not be responsible to anyone other than Broker Network for providing the protections afforded to clients of Cenkos Securities nor for providing advice in relation to the Offer or any matter referred to in this announcement. Cenkos Securities is authorised and regulated in the United Kingdom by the Financial Services Authority Fox-Pitt, Kelton Limited is acting exclusively for Broker Network and no-one else in connection with the Offer and will not be responsible to anyone other than Broker Network for providing the protections afforded to clients of Fox-Pitt, Kelton nor for providing advice in relation to the Offer or any matter referred to in this announcement. Fox-Pitt, Kelton is authorised and regulated in the United Kingdom by the Financial Services Authority. Unless otherwise determined by Broker Network and permitted by applicable law and regulation, the Offer will not be made, directly or indirectly, in into or from, or by use of mails or any means or instrumentality (including, without limitation, facsimile transmission, telephone or internet) of interstate or foreign commerce of, or any facilities of a national securities exchange of, nor will it be made in, into or from any jurisdiction whereof to do so would constitute a violation of the relevant laws of such jurisdiction, and the Offer will not be capable of acceptance by any such use, means, instrumentality or facilities. Accordingly, copies of any documents relating to the Offer must not be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent, in whole or in part, in, into or from any jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not directly or indirectly mail, transmit or otherwise forward, distribute or send them in, into or from any such jurisdiction as to do so may invalidate any such purported acceptance of the Offer. All statements other than statements of historical fact included in this announcement may be "forward-looking statements". Often, but not always, forward-looking statements can be identified by the use of the words "will", "may", "should", "continue", "plans", "estimates", "forecasts", " believes", "expects", "intends", "anticipates" or variations (including negative variations) of such words and phrases, or they can state that certain actions, events or results "may", "could", "should", "would", "might", "will" or "continue to" be taken, occur or be achieved. Forward-looking statements involve risks and uncertainties and other factors that may cause the actual results, performance or achievements of Broker Network, Towergate and/or their subsidiaries to be materially different from those expressed or implied by the forward-looking statements. Factors that would cause actual results to differ materially from those described in this announcement include, but are not limited to: costs and terms related to the acquisition of Broker Network; the economic environment of the sectors in which Broker Network and Towergate operate; failure to retain management; regulatory change in the industry; and/or the general economic environment. This list is not exhaustive of the factors that may affect the forward-looking information. These and other factors should be considered carefully and undue reliance should not be placed on such forward-looking information. Although this announcement has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ materially from those anticipated, estimated or intended and therefore there can be no assurance that forward-looking statements will prove to be accurate. Forward-looking statements contained in this announcement in respect of Broker Network and/or Towergate are made as of the date of this announcement based on the opinions and estimates of management. Subject to requirements to update under any applicable regulation or law, Towergate disclaims any obligation to update any forward-looking statements, whether as a result of new information, estimates or opinions, future events or results or otherwise. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes, "interested" (directly or indirectly) in 1% or more of any class of "relevant securities" of Broker Network or Towergate, all "dealings" in any "relevant securities" of that company, (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 pm (London time) on the business day following the date of the relevant transaction. This requirement will continue until the date on which the Offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of Broker Network or Towergate, they will be deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevant securities" of Broker Network or Towergate, by Towergate or Broker Network, or by any of their respective "associates", must be disclosed by no later than 12.00 noon (London time) on the business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at http:// www.thetakeoverpanel.org.uk/. "Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities. Terms in quotation marks are defined in the City 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, you should contact an independent financial adviser authorised under the Financial Services and Markets Act 2000 if you are resident in the UK or, if not, an appropriately authorised independent financial adviser or consult the Panel's website at http:// www.thetakeoverpanel.org.uk/ or contact the Panel on +44 207 382 9026; fax: +44 207 236 7005. Appendix 1 CONDITIONS AND CERTAIN FURTHER TERMS OF THE OFFER The Offer will be subject to the following conditions: 1. valid acceptances being received (and not, where permitted, withdrawn) by not later than 1.00p.m. on the First Closing Date (or such later time(s) and/or date(s) as Towergate may, with the consent of the Panel or in accordance with the Code, decide) in respect of not less than 90 per cent (or such lower percentage as Towergate may decide) (i) in nominal value of Broker Network Shares to which the Offer relates and (ii) of the voting rights attached to those shares, provided that this condition shall not be satisfied unless Towergate and/or any of its wholly-owned subsidiaries shall have acquired or agreed to acquire, whether pursuant to the Offer or otherwise and whether directly or indirectly, Broker Network Shares carrying in aggregate more than 50 per cent of the voting rights then normally exercisable at a general meeting of Broker Network (including for this purpose, to the extent, if any, required by the Panel, any such voting rights attaching to any Broker Network Shares that are unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of any outstanding subscription or conversion rights or otherwise). For the purposes of this condition: 1.1 Broker Network Shares which have been unconditionally allotted but not issued before the Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of any outstanding subscription or conversion rights or otherwise, shall be deemed to carry the voting rights they will carry on being entered into the register of members of Broker Network; 1.2 the expression "Broker Network Shares to which the Offer relates" shall be construed in accordance with Chapter 3 of Part 28 of the Companies Act 2006; and 1.3 valid acceptances shall be treated as having been received in respect of any Broker Network Shares which Towergate shall, pursuant to section 979(8) of the Companies Act 2006, be treated as having acquired or contracted to acquire by virtue of acceptance of the Offer; 2. the Financial Services Authority having given notice in writing under section 184(1) of the Financial Services Markets Act ("FSMA"), in terms reasonably satisfactory to Towergate, of its approval in respect of any acquisition of any member of the Wider Broker Network Group which is a UK authorised person (as defined in section 178(4) of FSMA) which would result from the acquisition of Broker Network or any Broker Network Shares, or being treated as having given its approval by virtue of section 184(2) of FSMA; 3. no Third Party having decided to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry (and, in each case, not having irrevocably withdrawn the same) or reference or having enacted, made or proposed any statute, regulation, decision or order (and, in each case, not having irrevocably withdrawn the same) or otherwise taken any step or done any thing and there not continuing to be outstanding any statute, regulation, legislation, decision or order which in any of the foregoing cases would or might reasonably be expected to: 3.1 require, prevent, materially delay or adversely affect the divestiture by any member of the Wider Broker Network Group or any member of the Wider Towergate Group, of all or any material portion of their respective businesses, assets or property or of any Broker Network Shares or other securities in Broker Network or impose any material limitation on the ability of any of them to conduct their respective businesses or to own or control any of their respective assets or properties or any part thereof; 3.2 impose any material limitation on, or result in a material delay in, the ability of any member of the Wider Towergate Group or any member of the Wider Broker Network Group, directly or indirectly to acquire or to hold or to exercise effectively any or all rights of ownership or other rights in respect of shares or loans or securities convertible into Broker Network Shares or any other securities (or the equivalent) in any member of the Wider Broker Network Group or to exercise voting or management control over any such member; 3.3 materially and adversely affect the business, assets, financial condition or trading position or profits or prospects of any member of the Wider Broker Network or the Wider Towergate Group; 3.4 make the Offer or its implementation or the acquisition or proposed acquisition by Towergate or any member of the Wider Towergate Group of any Broker Network Shares or other securities in, voting rights in, or under the control of the management of Broker Network or any member of the Wider Broker Network Group, void, illegal and/or unenforceable in or under the laws of any relevant jurisdiction, or otherwise, directly or indirectly, restrain, restrict, prohibit, prevent, delay or otherwise impede, challenge or interfere with the implementation of, or impose additional conditions or obligations with respect to, the Offer or otherwise challenge or interfere with the acquisition of any Broker Network Shares, or control of Broker Network by any member of the Wider Towergate Group in each case to a material extent; 3.5 require any member of the Wider Towergate Group or the Wider Broker Network Group to acquire or to offer to acquire any shares or other securities (or the equivalent) or interest in any member of the Wider Broker Network Group (other than Broker Network) owned by any Third Party; 3.6 impose any material limitation on the ability of any member of the Wider Towergate Group or the Wider Broker Network Group to co-ordinate or integrate its business or any part of it, with the business or any part of the business of any other members of the Wider Broker Network Group and/or the Wider Towergate Group; or 3.7 result in any member of the Wider Broker Network Group ceasing to be able to carry on business in a manner in which it presently does so or under any name under which it presently does so, and all applicable waiting and other time periods (including any extensions thereof) 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 jurisdiction in respect of the Offer or the acquisition or proposed acquisition of any Broker Network Shares, having expired, lapsed or been terminated; 4. 4.1 all necessary notifications, filings or applications having been made and all applicable waiting and other time periods (including any extensions thereof) having expired, lapsed or been terminated in each case under any applicable legislation and/or regulations in any jurisdiction and all statutory or regulatory obligations in any jurisdiction having been complied with in each case in connection with the Offer or its implementation or the acquisition or proposed acquisition of any Broker Network Shares or other securities in, or voting rights in, or control or management of, Broker Network or any other member of the Wider Broker Network Group by Towergate or any other member of the Wider Towergate Group or the carrying on by any member of the Wider Broker Network Group of its business; 4.2 all authorisations, orders, recognitions, grants, consents, licences, confirmations, clearances, permissions and approvals from any Third Party (collectively "Consents") which are required by any applicable legislation or regulations in any jurisdiction, or which are necessary or appropriate in any jurisdiction, in connection with the Offer or its implementation (in each case where failure to obtain such Consent would have a material and adverse effect on a material member of the Wider Broker Network Group or the implementation of the Offer) including, without limitation, the acquisition or proposed acquisition of any Broker Network Shares or other securities in, voting rights in, or control or management of Broker Network or any other member of the Wider Broker Network Group by Towergate or any other member of the Wider Towergate Group in relation to the continuation of the business of any member of the Wider Broker Network Group having been obtained, in terms and in a form which do not impose restrictions or conditions materially adverse to the Wider Towergate Group or its interest in the Wider Broker Network Group, from all appropriate Third Parties, including those with whom any member of the Wider Broker Network Group has entered into contractual arrangements; and 4.3 all such Consents together with all consents necessary or appropriate to carry on the business of any member of the Wider Broker Network Group, which are material in the context to the Wider Broker Network Group taken as a whole or the Wider Towergate Group taken as a whole having been obtained and remaining in full force and effect and all filings necessary for such purpose having been made and there being no notice or intimation from any Third Party or other person of any intention to revoke, suspend, restrict, adversely modify or not to renew any of the same and all necessary statutory or regulatory requirements in any jurisdiction having been complied with by each member of the Wider Broker Network Group at the time at which the Offer becomes or is otherwise declared unconditional; 5. save as Disclosed, there being no provision of any agreement, arrangement, authorisation, Consent, permit, other instrument or arrangement to which any member of the Wider Broker Network Group is a party or by or to which any such member or any of its assets is, are or may be bound, entitled or subject, or any circumstance which, in each case as a consequence of the Offer or the acquisition or proposed acquisition of any Broker Network Shares, voting rights in, or control or management of, Broker Network by any member of the Wider Towergate Group or of a change in the control or management of Broker Network or any other member of the Wider Broker Network Group or otherwise, would or might reasonably be expected to result in, in any case, to an extent which is or would be material in the context of the Wider Broker Network Group taken as a whole: 5.1 any monies borrowed by or any other indebtedness or liabilities (actual or contingent) of, or grant available to any member of the Wider Broker Network Group, being or becoming repayable or capable of being declared repayable immediately or earlier than the statutory maturity date or repayment date or the ability of any such member to borrow monies or incur any indebtedness being withdrawn or inhibited or being capable of becoming or being withdrawn or inhibited; 5.2 any such agreement, authorisation, Consent, permit or instrument or arrangement, or the rights, liabilities, obligations or interests of any member of the Wider Broker Network Group, being or becoming capable of being terminated or adversely modified or affected or any obligation or liability arising or any adverse action being taken thereunder; 5.3 any assets or interests of any member of the Wider Broker Network Group being or failing to be disposed of or charged or ceasing to be available 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, in each case, other than in the ordinary course of business; 5.4 the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of any member of the Wider Broker Network Group or any such security interest (whenever created, arising or having arisen) becoming enforceable; 5.5 the rights, liabilities, obligations or interests of any member of the Wider Broker Network Group in, or the business of any such member 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; 5.6 the value of any member of the Wider Broker Network Group or its financial or trading position or prospects or profits being prejudiced or adversely affected; 5.7 any member of the Wider Broker Network Group ceasing to be able to carry on business under any name under which it presently does so; 5.8 the creation of any liability (actual, contingent or otherwise) by any member of the Wider Broker Network Group; or 5.9 any requirement on any member of the Wider Broker Network Group to acquire, subscribe for, pay up or repay any shares or other securities, and no event having occurred which, under any provision of any agreement, arrangement, authorisation, Consent, permit or other instrument to which any member of the Wider Broker Network Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, can or might reasonably be expected to result in any of the events or circumstances as are referred to in sub-paragraphs 5.1 to 5.9 of this paragraph which is or would be material in the context of the Wider Broker Network Group as a whole; 6. save as Disclosed, no member of the Wider Broker Network Group having, since 30 April 2007: 6.1 issued or agreed to issue, authorised or proposed to authorise the issue of any shares or any class or securities convertible into or exchangeable for any shares of any class or rights, warrants or options to subscribe for, or acquire, any such shares or convertible securities; 6.2 other than to a wholly owned subsidiary or Broker Network, 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; 6.3 save as between Broker Network and wholly owned subsidiaries of Broker Network, implemented any merger with or demerger from any body corporate, partnership or business or acquired or disposed of or transferred, mortgaged or charged or created any security interest over, any assets or any rights, title or interest in any asset (including shares and trade investments) or authorised or proposed or announced an intention to propose any merger, demerger, acquisition or disposal, transfer, mortgage, charge or security interest over any asset or right, title or interest in any asset, in each case save as to the extent the same is not material in the context of the Wider Broker Network Group taken as a whole; 6.4 other than to a wholly owned subsidiary of Broker Network, made or authorised or proposed or announced an intention to propose any change in its loan capital or issued, authorised or proposed the issue of any debentures or, other than in the ordinary course of business between Broker Network and its wholly owned subsidiaries, incurred or increased any indebtedness or become subject to any guarantee or other liability (actual or contingent) save to the extent the same is not material in the context of the Wider Broker Network Group taken as a whole; 6.5 purchased, redeemed or repaid or authorised or announced any proposal to purchase, redeem or repay any of its own shares or other securities or reduced or, save in respect to the matters mentioned in paragraph 6.1 above, made any other change to any part of its share capital; 6.6 implemented or authorised, proposed or announced its intention to implement any reconstruction, amalgamation, scheme, commitment or other transaction or arrangement, other than in the ordinary course of business, other than between Broker Network and its wholly-owned subsidiaries; 6.7 save in respect of normal annual salary increases in the ordinary course and in accordance with past remuneration policies, entered into or varied or made any offer (which remains open for acceptance) to enter into or vary the terms of any contract, agreement or arrangement with any Broker Network Director or director or senior executive of any member of the Wider Broker Network Group; 6.8 entered into, varied or terminated or authorised, proposed or announced its intention to enter into, vary or terminate any contract, transaction or commitment (whether in respect of capital expenditure or otherwise) which is of a long-term or onerous nature or magnitude or which is or can reasonably be expected to be restrictive on the business of any member of the Wider Broker Network Group or which involves an obligation of such a nature or magnitude which would be material in the context of the Wider Broker Network Group taken as a whole; 6.9 been unable, or admitted in writing or announced 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 to carry on all or a substantial part of its business; 6.10 taken or proposed any corporate action or had any legal proceedings started or threatened against it or petition presented or order made, in each case 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; 6.11 entered into any contract, transaction or arrangement which would be restrictive on the business of any member of the Wider Broker Network Group or the Wider Towergate Group other than to a nature and extent which is normal in the context of the business concerned and not material in the context of the Wider Broker Network Group or the Wider Towergate Group (as relevant) taken as a whole; 6.12 waived, settled or compromised any material claim otherwise than in the ordinary course of business; 6.13 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 6; 6.14 made or agreed or consented to: 6.14.1 any change which is or could reasonably be expected to be material in the context of the Offer or the Wider Broker Network Group taken as a whole to: 6.14.1.1 the terms of the trust deeds constituting the pension scheme(s) established for its directors, employees or their dependants; or 6.14.1.2 the benefits which accrue to the pensions which are payable thereunder; or 6.14.1.3 the basis on which qualification for, or accrual or entitlement to such benefits or pensions are calculated or determined; or 6.14.1.4 the basis upon which the liabilities (including pensions) of such pension schemes are funded; or 6.14.2 any change which is or could reasonably be expected to be material in the context of the Offer or the Wider Broker Network Group taken as a whole to the trustees including the appointment of a trust corporation; or 6.15 made any alteration to its memorandum or articles of association or equivalent constitutional documents which is, or could reasonably be expected to be, material in the context of the Offer or the Wider Broker Network Group as a whole; 7. save as Disclosed and since 30 April 2007: 7.1 no adverse change or deterioration having occurred in the business, assets, financial or trading position or profits or prospects of any member of the Wider Broker Network Group which is material in the context of the Wider Broker Network Group taken as a whole; 7.2 no litigation, arbitration, proceedings, prosecution or other legal proceedings to which any member of the Wider Broker Network Group is or can reasonably be expected to become a party (whether as a claimant, defendant or otherwise) and no enquiry or investigation by or complaint or reference to any Third Party against or in respect of any member of the Wider Broker Network Group having been instituted, announced, implemented or threatened by or against or remaining outstanding against or in respect of any member of the Wider Broker Network Group which, in any case, is material in the context of the Wider Broker Network Group taken as a whole; 7.3 no contingent or other liability having arisen or increased or become apparent to Towergate which would or might reasonably be likely to adversely affect any member of the Wider Broker Network Group to an extent which, in any case, is material in the context of the Wider Broker Network Group taken as a whole; 7.4 no steps having been taken which would or are reasonably likely to result in the withdrawal, cancellation, termination or modification of any Consent held by any member of the Wider Broker Network Group which is necessary for the proper carrying on of its business to an extent which, in any case, is material in the context of the Wider Broker Network Group taken as a whole; 7.5 no claim having been made, and no circumstances having arisen which are reasonably expected to lead to a claim being announced, threatened or made, under any insurance policy taken out by or in favour of any material of the Wider Broker Network Group, in each case which is or is reasonably expected to be material in the context of the Wider Broker Network Group taken as a whole; 8. save as Disclosed, Towergate not having discovered that: 8.1 any financial, business or other information concerning any member of the Broker Network Group contained in the information disclosed (publicly or otherwise) to Towergate or its advisers at any time by or on behalf of any member of the Broker Network Group is misleading, contains a misrepresentation of fact or omits to state a fact necessary to make that information contained therein not misleading which in any case is material in the context of the Broker Network Group taken as a whole; 8.2 any member of the Wider Broker Network Group is subject to any liability (actual, contingent or otherwise) save to an extent the same is not material in the context of the Wider Broker Network Group taken as a whole; 8.3 any past or present member of the Wider Broker Network Group has not complied with all applicable legislation or regulations of any jurisdiction with regard to the storage, disposal, discharge, spillage, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or to harm human health or otherwise relating to environmental matters (which non-compliance might give rise to any liability (whether actual or contingent) on the part of the Wider Broker Network Group) or that there has otherwise been any such disposal, discharge, spillage, leak or emission (whether or not the same constituted a non-compliance by any person with any such legislation or regulations and wherever the same may have taken place) which in any such case might give rise of any liability (whether actual or contingent) on the part of any member of the Wider Broker Network Group and, in any case, which is material in the context of the Wider Broker Network Group taken as a whole; 8.4 there is or is likely to be any material 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 Wider Broker Network Group or any controlled waters under any environmental legislation, regulation, notice, circular or order of any relevant authority or Third Party or otherwise; 8.5 circumstances exist (whether as a result of the making of the Offer or otherwise) which might reasonably be expected to lead to any relevant authority instituting or any member of the Wider Broker Network Group or the Wider Towergate Group being required to institute, an environmental audit or take any other steps which any such case might result in any actual or contingent liability to improve or install new plant or equipment or make good, repair re-instate or clean up any land or other asset now or previously owned, occupied or made use of by any member of the Wider Broker Network Group and which, in each case, is material in the context of the Wider Broker Network Group taken as a whole; 8.6 the Wider Broker Network Group has not complied with any applicable law or regulation governing the conduct of its business in any respect which is material in the context of the Wider Broker Network Group taken as a whole; 8.7 the conduct of the business of the Wider Broker Network Group infringes the intellectual property rights of any third party in any respect which is material in the context of the Wider Broker Network Group taken as a whole; 8.8 circumstances exist whereby a person or class of persons might reasonably be expected to have any claim or claims in respect of any product or materials used therein now or previously sold by any past or present member of the Wider Broker Network Group in any respect which is material in the context of the Wider Broker Network Group taken as a whole; or 8.9 any information which adversely affects the import of any information disclosed to Towergate and its advisers at any time by or on behalf of any member of the Wider Broker Network Group and which is material in the context of the Wider Broker Network Group taken as a whole. Subject to the requirements of the Panel, Towergate will reserve the right (but shall be under no obligation) to waive or treat as satisfied, in whole or in part, all or any of conditions 2 to 8. Conditions 2 to 8 (inclusive) must be fulfilled or waived by midnight on the date which is the 21st day after the later of the First Closing Date and the date on which condition 1 is fulfilled (or in each such case such later date as Towergate may, with the consent of the Panel, decide), failing which the Offer will lapse. Towergate shall be under no obligation to waive or treat as fulfilled or satisfied any of the conditions 2 to 8 (inclusive) by a date earlier than the latest date specified above for the satisfaction thereof, notwithstanding that the other conditions of the Offer may at any date earlier than such date have been waived or treated as satisfied or fulfilled and that there are at such earlier date no circumstances indicating that any of such conditions may not be capable of fulfilment or satisfaction. Towergate will not invoke any of conditions 2 to 8 so as to cause the Offer to lapse unless the circumstances which give rise to the right to invoke the condition are of material significance to Towergate in the context of the Offer. If following the announcement, any member of Broker Network's network gives notice that it intends to leave Broker Network's network upon the expiry of such notice, or if any insurer or underwriter gives notice to terminate its relationship with Broker Network, Broker Network and Towergate agree that any member resignations or notices to terminate insurer or underwriter relationships will not be viewed as grounds for invoking any conditions to the Offer (subject always to final determination of the Panel). The conditions are inserted for the benefit of Towergate and no Broker Network Shareholder shall be entitled to waive any of the conditions without the prior consent of Towergate. Each of conditions 1 to 8 (inclusive) shall be regarded as a separate condition and shall not be limited by reference to any other condition. The Offer will lapse if the proposed acquisition of Broker Network by Towergate is referred by the Office of Fair Trading to the Competition Commission before 1.00p.m. (London time) on the First Closing Date or the time and date on which the Offer becomes or is declared unconditional as to acceptances (whichever is the later). The Broker Network Shares will be acquired by Towergate fully paid, with full title guarantee and free from all liens, equitable interests, mortgages charges, encumbrances, rights of pre-emption and any other third party rights or interests of whatever nature and together with all rights attaching thereto, including without limitation, all voting rights and the right to receive and retain all dividends, distributions, and other returns of capital (if any), declared, made or paid in respect of Broker Network Shares on or after the date of this announcement. Unless otherwise determined by Towergate and permitted by applicable law and regulation, the Offer will not be made, directly or indirectly, in, into or from, or by use of the mails of, or by any means or instrumentally (including, without limitation, facsimile transmission, telex, telephone or email) of interstate or foreign commerce of, or by any facility of a national securities exchange of any jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction and the Offer will not be capable of acceptance by any such use, means instrumentality or facilities. Accordingly, copies of any documents relating to the Offer must not be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent, in whole or in part, in, into or from any jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not directly or indirectly mail, transmit or otherwise forward, distribute or send them in, into or from any such jurisdiction as to do so may invalidate any purported acceptance of the Offer. The availability of the Offer to persons who are not resident in the United Kingdom may be affected by the laws of the jurisdiction in which they are resident. Persons who are not resident in the United Kingdom should inform themselves about, and observe, all applicable requirements. The Offer is governed by the laws of England and Wales, the rules and regulations of the FSA, the London Stock Exchange, the AIM Rules, the Panel and the City Code and is subject to the jurisdiction of the courts of England and Wales. If Towergate is required by the Panel to make an offer for Broker Network Shares under the provisions of Rule 9 of the Code, Towergate may make such alterations to any of the above conditions as are necessary to comply with the provisions of that Rule. If the Offer lapses, the Offer will cease to be capable of further acceptance and Towergate and the accepting Broker Network Shareholders will cease to be bound by acceptances submitted at or before the time when the Offer so lapses. Appendix 2 1. Bases and sources (a) The value attributed to the existing issued and to be issued share capital of Broker Network is based upon the 15,404,224 Broker Network Shares in issue on 26 November 2007 (being the latest practicable Business Day prior to the publication of this announcement) and on 300,000 Broker Network Shares to be issued to the Broker Network Optionholder. (b) Unless otherwise stated in this announcement, all prices for Broker Network Shares have been derived from the London Stock Exchange and represent the Closing Price on the relevant date. (c) Broker Network's average share price of 314 pence for the 12 months ended on 11 October 2007 is derived from data provided by DataStream. (d) Unless otherwise stated in this announcement, the financial information relating to Broker Network has been extracted or derived, without material adjustment, from Broker Network's annual report and accounts for the financial year ended 30 April 2007. (e) Unless otherwise stated in this announcement, the financial information relating to the Towergate Group has been extracted or derived, without material adjustment, from the Towergate annual report and accounts for the financial year ended 31 December 2006. (f) References to existing issued share capital are references to Broker Network Shares in issue on 26 November 2007 (being the last practicable Business Day prior to the date of announcement), being 15,404,224 Broker Network Shares. (g) The Offer premium of 92.7 per cent, over the average daily Closing Price of 314 pence for Broker Network Shares for the 12 month period from 12 October 2006 to 11 October 2007 inclusive, as stated in this announcement, has been calculated using the Closing Price on each Business Day over the relevant period. 2. Irrevocable undertakings and letters of intent (a) The Broker Network Directors have given irrevocable undertakings to accept or procure the acceptance of the Offer in respect of the following Broker Network Shares beneficially owned by them or any other person whose interest in relevant securities a Broker Network Director is taken to be interested in pursuant to Part 22 of the Companies Act 2006: Name Number of Broker Network Percentage of existing Shares issued share capital Faisal Rahmatallah NIL N/A Grant Ellis 2,036,535 13.2 % Julie Hale (1) 645 0.0 % Dr Michael Collins 500,000 3.2 % Nigel Law NIL N/A Peter Bates 1,273,800 8.3 % Michael Pendle NIL N/A Mark Wood (2) 4,608 0.0 % Total 3,815,588 24.8 % (1) Excludes the 1,290 Broker Network Shares to which Julie Hale is entitled pursuant to the Broker Network Incentive Plan and the 300,000 Broker Network Shares in respect of which Julie Hale holds Broker Network EMI Options. Julie Hale has given an irrevocable undertaking to accept or procure the acceptance of the Offer in respect of (i) the 300,000 Broker Network Shares upon the exercise of the Broker Network EMI Options as described in paragraph 3 below and (ii) 1,290 Broker Network Shares upon her becoming entitled to such Broker Network Shares under the Broker Network Incentive Plan. (2) Excludes the 9,217 Broker Network Shares to which Mark Wood is entitled pursuant to the Broker Network Incentive Plan. Mark Wood has given an irrevocable undertaking to accept, or to procure the acceptance of, the Offer in respect of 9,217 Broker Network Shares upon him becoming entitled to such Broker Network Shares under the Broker Network Incentive Plan. All of these undertakings shall lapse if the Offer is withdrawn or lapses without the Offer having become wholly unconditional or if the Offer Document is not posted within 28 days following the date of this announcement. These undertakings will, however, remain binding even if a higher offer is made by a third party. (b) The following Broker Network Shareholder has given an irrevocable undertaking to accept or procure the acceptance of the Offer in respect of the following Broker Network Shares beneficially owned by him or any other person whose interest in relevant securities he is taken to be interested in pursuant to Part 22 of the Companies Act 2006: Name of Broker Network Number of Broker Network Percentage of existing Shareholder Shares issued share capital David Belgian 1,250,000 8.1 % This undertaking shall lapse if the Offer is withdrawn or lapses without the Offer having become wholly unconditional or if the Offer Document is not posted within 28 days following the date of this announcement. This undertaking will, however, remain binding even if a higher offer is made by a third party. (c) Irrevocable undertakings to accept, or procure the acceptance of, the Offer have been received by Towergate from the following persons: Name of Broker Network Number of Broker Network Percentage of existing Shareholder Shares issued share capital Hargreave Hale Limited 1,095,850 7.1% Ennismore Fund Management 1,053,882 6.8 % Limited Artemis Investment Management 862,000 5.6% Limited* Axa Framlington Investment 422,100 2.7% Management Limited* Total 3,433,832 22.3% Each of the undertakings referred to in this paragraph (c) cease to be binding in the event that the Offer is withdrawn or lapses without the Offer having become wholly unconditional or if the Offer Document is not posted within 28 days of the date of this announcement or if a third party announces a firm intention to make an offer for Broker Network (in the case of Broker Network Shareholders marked *, such third party announcement to be made within 20 days of the date of the Offer Document), the value of which is more than 10 per cent. higher than the value of the consideration of the Offer. (d) Towergate has received non-legally binding letters of intent to accept the Offer from the following persons: Name of Broker Network Number of Broker Network Percentage of existing Shareholder Shares issued share capital Blackrock Investment Management 661,000 4.3% (UK) Limited EEA Fund Management Limited 562,500 3.7% Total 1,223,500 7.9% 3. Julie Hale has agreed to exercise the Broker Network EMI Options prior to the Offer becoming or being declared unconditional in all respects. Towergate has agreed, pursuant to the terms of the Loan Agreement, to loan Julie Hale #60,000, being the exercise price of the Broker Network EMI Options (the "Loan"). The Loan shall be repaid to Towergate by Julie Hale pursuant to the terms of the Loan Agreement. Appendix 3 Definitions The following definitions apply throughout this announcement unless the context requires otherwise: "AIM" AIM a market of that name operated by the London Stock Exchange "AIM Rules" the rules governing the operation of AIM and issued by the London Stock Exchange from time to time in relation to AIM traded securities comprising of the AIM Rules for Companies and the AIM Rules for Nominated Advisers "AIM Rules for Companies" the AIM Rules for Companies and guidance notes as published by the London Stock Exchange from time to time "AIM Rules for Nominated Advisers" the AIM Rules for Nominated Advisers and guidance notes as published by the London Stock Exchange from time to time "Banks" each of the funding institutions that have agreed to provide commitments under the Debt Facilities "Broker Network" Broker Network Holdings plc "Broker Network Directors" or "Broker the directors of Broker Network or the board of Network Board" directors of Broker Network, as the context dictates "Broker Network EMI Options" the options granted to Julie Hale pursuant to the Broker Network enterprise management incentives scheme "Broker Network Group" Broker Network and each of its subsidiary undertakings, and where the context permits each of them "Broker Network Incentive Plan" the Broker Network Incentive Plan dated 10 August 2005 (as amended on 18 July 2007 and 26 November 2007) "Broker Network Optionholder" the person to whom the Broker Network EMI Options have been granted over Broker Network Shares "Broker Network Shares" the ordinary shares of 2 pence each in the capital of Broker Network "Broker Network Shareholders" the holders of Broker Network Shares "Business Day" any day (other than a Saturday, Sunday or a public holiday) on which banks are generally open in the City of London for the transaction of normal banking business "Cenkos Securities" Cenkos Securities Limited "City Code" the City Code on Takeovers and Mergers "Closing Price" the closing middle market quotation of a Broker Network Share at close of business on the relevant day as derived from the AIM appendix to the Daily List "Daily List" the Daily List of the London Stock Exchange "Disclosed" as disclosed in Broker Network's annual report and accounts for the year ended 30 April 2007 or as otherwise publicly announced by, or on behalf of Broker Network (by the delivery of an announcement to a Regulatory Information Service) as specified in the AIM Rules prior to the date of this announcement or as otherwise fairly disclosed in writing (whether by way of documentation disclosed by CD-Rom or otherwise) and made available to Towergate or its advisers, in each case by or on behalf of Broker Network prior to 26 November 2007 (being the date of this announcement) "Enlarged Group" Towergate and its subsidiary undertakings following the Offer becoming or being declared unconditional in all respects "Financial Services Authority" or "FSA" the United Kingdom Financial Services Authority "First Closing Date" the date which is 21 days after the posting of the Offer Document "Form of Acceptance" the form of acceptance relating to the Offer which will accompany the Offer Document "FPK" Fox-Pitt, Kelton Limited "GWP" gross written premium being the collective value of all policy premiums written or sold during an accounting period "Lexicon Partners" Lexicon Partners Limited "Loan Agreement" the loan agreement entered into between Towergate and Julie Hale on 27 November 2007, pursuant to which Towergate has agreed to loan Julie Hale #60,000, being the exercise price of the Broker Network EMI Options "London Stock Exchange" London Stock Exchange plc "member" a party with whom The Broker Network Limited, a subsidiary of Broker Network, has entered into a membership agreement "Offer" the recommended cash offer to be made by Towergate to acquire all of the issued and to be issued Broker Network Shares (other than any already owned by the Towergate Group (if any)), on the terms and subject to the conditions set out in this announcement and to be set out in the Offer Document and Form of Acceptance and, where the context so requires, any subsequent revision, variation, extension or renewal of such offer "Offer Document" the offer document to be despatched to Broker Network Shareholders and, for information only, to the Broker Network Optionholder which will contain, inter alia, the terms and conditions of the Offer "Offer Period" the period commencing 12 October 2007 being the date Broker Network announced that it had received an approach which may or may not lead to an offer and ending on the First Closing Date or, if later the date on which the Offer becomes or is declared unconditional, or lapses or is withdrawn "Offer Price" 605 pence per Broker Network Share "overseas person" any persons resident in or nationals or citizens of jurisdictions outside the United Kingdom or who are nominees of, or custodians, trustees or guardians of or citizens or residents of nationals of jurisdictions outside the United Kingdom "Panel" the Panel on Takeovers and Mergers in the United Kingdom "Regulatory Information Service" a service approved by the London Stock Exchange for the distribution to the public of AIM announcements "Towergate" Towergate Partnership Limited "Towergate Directors" or "Towergate Board" the directors of Towergate, or the board of directors of Towergate as the context dictates "Towergate Group" Towergate and each of its subsidiary undertakings and, where the context so permits, each of them "Wider Broker Network Group" Broker Network and its subsidiary undertakings and their associated undertakings and any other undertakings (including, without limitation, any joint ventures, partnerships, firms or bodies corporate) in which Broker Network and/or such undertakings (aggregating their interests) have a substantial interest and for these purposes "substantial interest" means a direct or indirect interest in 20 per cent or more of the voting rights or equity share capital (or the equivalent) of an undertaking "Wider Towergate Group" Towergate and its subsidiary undertakings and their associated undertakings and any other undertakings (including, without limitation, any joint ventures, partnerships, firms or bodies corporate) in which Towergate and/or such undertakings (aggregating their interests) have a substantial interest and for these purposes "substantial interest" means a direct or indirect interest in 20 per cent or more of the voting rights or equity share capital (or the equivalent) of an undertaking For the purposes of this announcement "holding company", "subsidiary" and "subsidiary undertaking" have the meanings given to them in the Companies Act 2006. All references to legislation in this announcement are to English legislation unless the contrary is indicated. Any reference to any provision of any legislation shall include any amendment, modification, re-enactment or extension thereof. References to "#", "pounds sterling", "pence" and "p" are to the lawful currency of the United Kingdom. Words importing the singular shall include the plural and vice versa, and words importing the masculine gender shall include the feminine or neutral gender. This information is provided by RNS The company news service from the London Stock Exchange END OFFZGMZMGNDGNZM
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