Offer for CBG Group plc (6200L)

TIDMZZZZ TIDMCB.

RNS Number : 6200L

Giles Insurance Brokers Limited

02 August 2011

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

2 August 2011

RECOMMENDED CASH OFFER

by

GILES INSURANCE BROKERS LIMITED

for

CBG GROUP PLC

Summary

-- The Boards of CBG and Giles are pleased to announce that they have agreed the terms of a recommended cash offer to be made by Giles, a wholly-owned indirect subsidiary of Expectrum Limited, for the entire issued and to be issued share capital of CBG.

-- CBG is an AIM quoted corporate general insurance, risk management and financial services intermediary, offering a range of insurance and financial planning services for commercial and private clients. CBG has 120 employees and has its head office in Manchester, together with offices in London and Blackpool.

-- Giles is one of the largest independent insurance brokers in the United Kingdom with around 900 employees and a network of 40 offices including major business centres in London, Birmingham, Glasgow, Leeds and Cardiff.

-- The Offer will comprise 32 pence in cash for each CBG Share and values the entire issued and to be issued share capital of CBG at approximately GBP5.1 million.

-- Giles has a strategy to grow both organically and by acquisition and to continue to build on its position as one of the leading commercial insurance brokers within the UK. The acquisition of CBG provides:

o the opportunity to extend Giles' geographic footprint by acquiring one of the largest insurance brokers in the North West of England predominantly focused on corporate and commercial clients;

o a platform to further develop the CBG business with the benefit of Giles' strong relationships with insurers and wide product base including a number of specialisms; and

o expertise in key product areas which can be leveraged across the existing Giles office network, such as healthcare.

-- Giles has received the following irrevocable undertakings and letters of intent:

o undertakings to accept, or procure the acceptance of, the Offer in respect of 1,444,671 CBG Shares in aggregate in which the CBG Directors have a beneficial interest, representing approximately 9.1 per cent. of the issued share capital of CBG;

o undertakings to accept, or procure the acceptance of, the Offer in respect of 4,692,521 CBG Shares in aggregate in which certain other Shareholders have a beneficial interest, representing approximately 29.6 per cent. of the issued share capital of CBG; and

o non-binding letters of intent to accept the Offer have been provided by Laurence Andrew Turnbull who has a beneficial interest in 1,252,942 CBG shares and Allianz Insurance plc which has a beneficial interest in 675,000 CBG shares.

-- Accordingly, the number of CBG Shares in respect of which irrevocable undertakings and letters of intent have been received is, in aggregate, 8,065,134, representing approximately 50.8 per cent. of the issued share capital of CBG. The shares that are the subject of these irrevocable undertakings and letters of intent equate to approximately GBP2.6 million of the Offer Value.

-- The Offer is conditional on, inter alia, valid acceptances being received in respect of not less than 90% of the CBG Shares to which the Offer relates, that Independent Shareholders vote in favour of the Resolution at the General Meeting and receipt of regulatory clearance from the FSA. The full terms and conditions of the Offer are set out in Appendix 1 to this announcement.

-- The Independent Directors, who have been so advised by Zeus Capital, consider the terms of the Offer to be fair and reasonable. Accordingly, the Independent Directors intend unanimously to recommend that Shareholders accept the Offer, as the CBG Directors have irrevocably undertaken to do, or procure to be done, in respect of their beneficial holdings of, in aggregate, 1,444,671 CBG Shares representing approximately 9.1 per cent of the existing issued share capital of CBG.

-- The Management Arrangements are required to be approved by Independent Shareholders under Rule 16 of the Code. Zeus Capital consider the terms of the Management Arrangements to be fair and reasonable, accordingly the Independent Directors intend unanimously to recommend that Independent Shareholders vote in favour of the Resolution at the General Meeting.

Commenting on the Offer, Chris Giles, Chief Executive of Giles, said:

"Giles is delighted to have made this Offer. We see CBG as a strong strategic fit with the existing Giles business with significant opportunities for both businesses to grow and develop together and to leverage from a shared scale and market presence.

The removal of the regulatory burden of being a listed company will allow the CBG team to focus on continuing to develop the business, and improve its operational performance through the infrastructure and operational efficiencies of Giles. The opportunity to expand in a core region is an exciting prospect for Giles and we are committed to exploring the opportunities ahead for both businesses."

Commenting on the Offer, Robin Slinger, Chairman of CBG, said:

"CBG is pleased to announce that it will be recommending Giles' offer for 32p per share to investors for consideration. The opportunity to become part of the Giles operation will inevitably provide significant growth potential for CBG in the coming years."

"Giles has established a strong position in the regional marketplace and has an excellent reputation for acquiring and enhancing ambitious businesses. We're confident that this deal will add considerable weight to Giles' North West proposition, while also providing the company with access to niche sectors where CBG has demonstrated exceptional strength."

Enquiries

Giles

Sarah Gestetner / Nicola Swift / Jos Bieneman Citigate Dewe Rogerson 020 7282 2920/2993

Altium Capital (financial adviser to Giles)

Keith Williams / Nakul Mohandas Altium Capital 0845 505 4343

CBG

Robin Slinger, Chairman CBG 0161 920 0200

Zeus Capital (nominated and financial adviser to CBG)

Alex Clarkson / Tom Rowley / Aaron Smyth Zeus Capital 0161 831 1512

This summary should be read in conjunction with, and is subject to, the full text of the following announcement, including the Appendices. The conditions to and further terms of the Offer are set out in Appendix I. Additional information is set out in Appendix II, including the sources and bases of certain information contained in this announcement (Part A) and details of the irrevocable undertakings and letters of intent received by Giles in relation to the Offer (Part B). Definitions and terms used in this announcement are set out in Appendix III.

Altium, which is authorised and regulated in the United Kingdom by the FSA for investment business activities, is acting exclusively as financial adviser to Giles and no one else in connection with the Offer and will not be responsible to anyone other than Giles for providing the protections afforded to clients of Altium or for providing advice in relation to the Offer or any other matters referred to in this announcement.

Zeus Capital, which is authorised and regulated in the United Kingdom by the FSA for investment business activities, is acting exclusively as nominated adviser and financial adviser to CBG and no one else in connection with the Offer and will not be responsible to anyone other than CBG for providing the protections afforded to clients of Zeus Capital or for providing advice in relation to the Offer or any other matters referred to in this announcement.

Overseas jurisdictions

The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Failure to comply with any such restrictions may constitute a violation of the securities laws or regulatory requirements of any such jurisdiction. In particular, this announcement is not for publication or distribution, directly or indirectly, to US persons or into the United States (including its territories and possessions, any state of the United States and the District of Colombia), Canada, Australia or Japan. This announcement has been prepared in accordance with English Law and the Code and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England.

This announcement is not intended to, and does not, constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Offer or otherwise. The Offer will be made solely through the Offer Document, which will contain the full terms and conditions of the Offer, including details of how to accept the Offer. Any voting decision, acceptance or other response to the Offer should be made only on the basis of information in the Offer Document.

The Offer is not and will not be made, directly or indirectly, in or into, or by use of the mails, or by any means or instrumentality (including, without limitation, by means of telephone, facsimile, telex, internet or other forms of electronic communication) of interstate or foreign commerce of, or any facilities of a securities exchange of, the United States, Canada, Australia or Japan, and the Offer will not be capable of acceptance by any such use, means, instrumentality or facility or from within the United States, Canada, Australia or Japan. Accordingly, unless otherwise determined by Giles, copies of this announcement and any other document relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise distributed or sent in or into the United States, Canada, Australia or Japan and persons receiving such documents (including custodians, nominees and trustees) must not distribute or send them in, into or from such jurisdictions as doing so may make invalid any purported acceptance of the Offer by persons in any such jurisdiction.

Cautionary note regarding forward-looking statements

This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and business of the CBG Group, Giles Group and Expectrum Limited and certain plans and objectives of the CBG Board, Giles Board and/or the board of directors of Expectrum Limited. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words of similar meaning. These statements are based on assumptions and assessments made by the Boards of CBG, Giles and the board of directors of Expectrum Limited in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe appropriate. By their nature, forward-looking statements involve risk and uncertainty, and the factors described in the context of such forward-looking statements in this announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements.

Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this announcement. None of CBG, Giles and Expectrum Limited assume any obligation to update or correct the information contained in this announcement, whether as a result of new information, future events or otherwise, except to the extent legally required.

The statements contained in this announcement are made as at the date of this announcement, unless some other time is specified in relation to them, and service of this announcement shall not give rise to any implication that there has been no change in the facts set out in this announcement since such date. Nothing contained in this announcement shall be deemed to be a forecast, projection or estimate of the future financial performance of the CBG Group or the Giles Group except where expressly stated.

Dealing disclosure requirements

Under Rule 8.3(a) of the Code, any person who is (directly or indirectly) interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(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 paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, (directly or indirectly) interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. 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 paper 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. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on [phone].

Publication on Giles website

A copy of this announcement and the Offer Document will be available free of charge, subject to certain restrictions relating to persons resident in restricted jurisdictions, for inspection on the Giles website at www.gilesinsurance.co.uk

Neither the contents of Giles' website nor the contents of any website accessible from hyperlinks on such website (or any other website) is incorporated into, or forms part of, this announcement nor, unless previously published by means of a recognised information service, should any such content be relied upon in reaching a decision regarding the matters referred to in this announcement.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

2 August 2011

RECOMMENDED CASH OFFER

by

GILES INSURANCE BROKERS LIMITED

for

CBG GROUP PLC

1. Introduction

The Boards of CBG and Giles are pleased to announce that they have agreed the terms of a recommended cash offer to be made by Giles, a wholly-owned indirect subsidiary of Expectrum Limited, for the entire issued and to be issued share capital of CBG, an AIM quoted corporate general insurance, risk management and financial services intermediary, offering a range of insurance and financial planning services for commercial and private clients.

2. The Offer

Giles is offering to acquire the entire issued and to be issued share capital of CBG, on the terms and subject to the conditions and further terms set out below and in Appendix I to this announcement and to the full terms and conditions set out in the Offer Document and in the accompanying Form of Acceptance on the following basis:

for each CBG Share 32 pence in cash

The Offer values the entire issued and to be issued share capital of CBG at approximately GBP5.1 million.

As at 2 August 2011, the Offer represents a premium of:

-- 54.2 per cent. to the Closing Price of an Ordinary Share of 20.75 pence on the last Dealing Day prior to the announcement dated 19 July 2011 that identified Giles as a potential offeror;

-- 44.6 per cent. to the average Closing Price of an Ordinary Share of 22.13 pence for the six months prior to the announcement dated 19 July 2011 that identified Giles as a potential offeror; and

-- 13.3 per cent. to the Closing Price of 28.25 pence per CBG Share on 2 August 2011 being the last Dealing Day prior to the date of this announcement.

CBG Shares to be acquired under the Offer will be acquired fully paid with full title guarantee and free from all liens, equities, charges, encumbrances, options, rights of pre-emption and any other third party rights and interests of any nature whatsoever and together with all rights now or subsequently attaching or accruing to them including, without limitation, voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid on or after the date of the Offer.

The Offer is conditional on, inter alia, the Resolution being passed at the General Meeting by the Independent Shareholders, valid acceptances being received in respect of not less than 90 per cent of the CBG Shares to which the offer relates and receipt of regulatory clearance from the FSA. The full terms and conditions of the Offer are set out in Appendix 1 to this announcement.

3. Background to and reasons for the Offer

Giles has a strategy to grow both organically and by acquisition and to continue to build on its position as one of the leading commercial insurance brokers within the United Kingdom.

The acquisition of CBG provides:

(i) the opportunity to extend Giles' geographic footprint by acquiring one of the largest insurance brokers in the North West of England predominantly focused on corporate and commercial clients;

(ii) a platform to further develop the CBG business with the benefit of Giles' strong relationships with insurers and wide product base including a number of specialisms; and

(iii) expertise in key product areas which can be leveraged across the existing Giles office network, such as healthcare.

The Giles Board believes that, with the financial backing of CCP and with the benefit of Giles' management and operational infrastructure, Giles is well placed to support CBG management and their plans to continue to develop the business.

4. Background to and reasons for recommending the Offer

The business of CBG was established in October 2001 and completed five acquisitions in the three years prior to listing on AIM in November 2003. Following listing CBG has completed twelve further acquisitions and established a strong reputation in the insurance marketplace, especially in the North West region of England.

While the CBG Board are confident that the fundamentals of CBG's business are strong, over the past 18 months the CBG Board has been mindful of the challenging market for insurance broking which has been impacted by the global recession and banking crisis.

In addition, market conditions are materially more difficult for smaller companies of all descriptions, with a particular issue being the restricted availability of capital, either through debt or equity. The difficult market conditions and CBG's lack of scale, combined with limited cash resources has restricted CBG's ability to take advantage of the potential opportunities and maintain growth in the CBG Group's revenues. The competitive environment has also continued to put pressure on the CBG Group's margins. In addition, CBG's share price performance has been impaired, in the CBG Directors' view, by a number of factors, including CBG's relatively small scale and resultant illiquidity.

Consequently, the CBG Board has had cause to weigh both the costs and benefits of maintaining an independent London quotation, with the potential but uncertain future growth in equity value for its investors.

Accordingly, following an approach by Giles, the Independent Directors have held detailed discussions regarding the terms of a potential acquisition of CBG by Giles. The Independent Directors believe that the strategic rationale for a combination with Giles is attractive, particularly in relation to the strategic view and nationwide footprint Giles is able to bring in order to capture fully the potential market opportunity. In addition, Giles has the ability to provide CBG with the additional resources required in order to implement its future growth strategy.

The CBG Board has reviewed a number of options in the past 12 months in connection with the growth of CBG, through organic and acquisition opportunities and have considered a number of factors in deciding to recommend the Offer, including valuation, deliverability and timing as well as the potential impact on the existing business.

At a time when the CBG Board believe that the CBG business faces significant external challenges, the Offer enables CBG Shareholders to crystallise value at a premium to the current CBG share price and at a higher level than has been available in the market for the last ten months.

Against this background, the Independent Directors, who have been so advised by Zeus Capital, consider the terms of the Offer to be fair and reasonable and that the Offer provides CBG Shareholders with the opportunity to realise, in cash, their investment in CBG. Accordingly, the Independent Directors recommend that Shareholders accept the Offer.

5. Recommendation of the Offer

Following the Offer becoming or being declared unconditional in all respects, Michael Askew will have continued employment with CBG and be subject to the Management Arrangements. Accordingly, Michael has taken no part in the consideration of the Offer as he is not deemed to be independent for those purposes. On the basis that Stephen Rees has expressed an interest to buy the financial services division of CBG, he is therefore not deemed by the Board of CBG to be independent and accordingly has taken no part in the recommendation of the Offer.

The Independent Directors, who have been so advised by Zeus Capital, consider the terms of the Offer to be fair and reasonable. In providing advice to the Independent Directors, Zeus Capital has taken into account the commercial assessment of the Independent Directors of the Offer. Accordingly, the Independent Directors unanimously recommend that CBG Shareholders accept the Offer.

6. Information relating to Giles and CCP

Information relating to Expectrum Limited

Expectrum Limited is the ultimate holding company of Giles Insurance Brokers Limited. Expectrum is owned predominantly by CCP and Christopher Michael Giles.

Information relating to Giles

Established in 1967, Giles has grown to become one of the largest independent insurance brokers in the United Kingdom with around 900 employees and a network of 40 offices including major business centres in London, Birmingham, Glasgow, Leeds and Cardiff.

For the year ended 31 August 2010, Giles reported turnover of GBP59.8 million (2009: GBP56.2 million), an operating profit before depreciation, interest costs, goodwill amortisation and exceptional charges in relation to impairment of investments of GBP11.4 million (2009: GBP9.8 million) and profit before taxation of GBP1.5 million (2009: GBP5.1 million). Giles had net assets of GBP102 million as at 31 August 2010.

Trading for the current financial year continues to reflect the competitive pressures within the market, although remains in line with management expectations. Giles intends to continue to grow both via acquisition activity and organic development.

Information relating to CCP

CCP is an independent private equity firm that focuses on large European buy-outs which Charterhouse has been doing since the early days of the buy-out market in the 1980's. With over 128 transactions, worth an aggregate of EUR38 billion in transaction value, and with 89% of those investments realised, Charterhouse has a track record and experience that combine to make it one of the leading private equity firms in Europe.

CCP is an English limited liability partnership authorised and regulated by the FSA (FRN: 230721). It provides investment advisory services to a number of private equity funds that are structured as series of limited partnerships whose general partners are also FSA authorised firms. CCP currently advises private equity funds having a value in excess of EUR8.0 billion.

7. CBG current trading and prospects

Results for the year ended 31 December 2010

On 22 March 2011, CBG announced its audited results for the year ended 31 December 2010. Revenue for the year ended 31 December 2010 was GBP7.7 million (2009: GBP8.9 million) resulting in adjusted pre-tax profit of GBP842,000 (2009: GBP1,026,000). CBG had net assets as at 31 December 2010 of GBP11.9 million, including cash and cash equivalents of GBP1.2 million.

The CBG Board recommended a final dividend of 0.75p per share, an increase of 7 per cent upon the dividend declared in the prior year, that was paid to Shareholders on 27 May 2011.

Trading Update

The CBG Board also provides the following trading update. The figures below are for the six month period ending 30 June 2011 and have not been audited.

Market uncertainty and economic fragility continues to impact heavily on the performance of many within the CBG Group's core client base. Overall pricing competition remains intense resulting in revenues and activity substantially lower than in the comparable period in 2010. The first six months of the year have been challenging for CBG given that the majority of the CBG Group's costs are relatively fixed.

Revenue for the six month period ended 30 June 2011 was GBP3.5 million (2010: GBP4.1 million) and is expected to result in an adjusted pre tax profit (EBITDA) of GBP336,000 (2010: GBP798,000). Insurance broking suffering a 14 per cent fall in revenues upon the comparative period in 2010, with financial services down by 13 per cent.

Net assets as at 30 June 2011 were GBP11.6 million (31 December 2010: GBP11.9 million) and net debt as at 30 June 2011 was GBP1.7 million (31 December 2010: GBP1.5 million).

Trading for July 2011 was back in line with management expectations.

8. Irrevocable undertakings and letters of intent to accept the Offer

Giles has received irrevocable undertakings to accept, or procure the acceptance of, the Offer in respect of:

-- 1,444,671 CBG Shares in aggregate in which the CBG Directors have a beneficial interest, representing approximately 9.1 per cent. of the issued share capital of CBG; and

-- 4,692,521 CBG Shares in aggregate in which certain other Shareholders have a beneficial interest, representing approximately 29.6 per cent. of the issued share capital of CBG.

Non-binding letters of intent to accept the Offer have been provided by Laurence Andrew Turnbull who has a beneficial interest in 1,252,942 CBG shares and Allianz Insurance plc which has a beneficial interest in 675,000 CBG shares.

Accordingly, the number of CBG Shares in respect of which irrevocable undertakings and letters of intent have been received is, in aggregate, 8,065,134, representing approximately 50.8 per cent. of the issued share capital of CBG. The shares the subject of these irrevocable undertakings and letters of intent equate to approximately GBP2.6 million of the Offer Value.

9. Management Arrangements

As part of its Offer terms Giles has proposed that Michael Askew will receive a retention bonus ("Retention Bonus") of GBP200,000 provided he remain employed by CBG at the date of payment and is not subject to any disciplinary proceedings or under any notice period. The Retention Bonus will become payable on the earlier of the date of publication of CBG's accounts for the year ended 31 December 2011 and 31 March 2012.

Giles has also proposed that key employees will participate in a performance bonus arrangement ("Performance Bonus") based on the trading performance of the CBG business under Giles' ownership provided that the relevant individuals remain employed by CBG at the date of payment and are not subject to any disciplinary proceedings or notice period. It is proposed that the bonus arrangement is paid on the following basis:

(a) a bonus payment equivalent to 25 per cent. of income above current management forecast income for the year to 31 December 2011, payable on the earlier of the date of publication of CBG's accounts for the year ended 31 December 2011 and 31 March 2012.

(b) a further bonus payment for the period 1 January 2012 to 31 August 2012 equivalent to 25 percent of income above the income reported from 1 January 2011 to 31 August 2011, payable on the earlier of the date of publication of Giles' 2012 accounts and 30 November 2012.

It is Giles' intention that Michael Askew will be a beneficiary of the Performance Bonus alongside other key employees. However, the identity of the other recipients and the respective allocation of payments of the Performance Bonus will only be decided following a review of the business by Giles which it intends to undertake once the Acquisition has completed.

Pursuant to Rule 16 of the Code, the Management Arrangements are required to be approved by the Independent Shareholders. Accordingly, the Resolution will be proposed at the General Meeting, referred to in paragraph 10 below, where a poll vote of more than 50 per cent. of the votes cast by the Independent Shareholders (voting either in person or by proxy) will need to be passed in favour of the Resolution. In accordance with Rule 16.2 of the code, Zeus Capital considers the terms of the Management Arrangements to be fair and reasonable and, accordingly, the Independent Directors unanimously recommend that Independent Shareholders vote in favour of the Resolution at the General Meeting.

10. General Meeting

The Offer is conditional on, inter alia, the passing of the Resolution by Independent Shareholders at the general meeting of CBG to approve the Management Arrangements for the purposes of Rule 16 of the Code. A notice convening the General Meeting will be set out at the end of the Offer Document.

11. Employees and locations

Giles has confirmed that the existing employment rights of all employees of the CBG Group and the Giles Group will, following the completion of the Acquisition, be fully safeguarded and all employee consultation requirements will be complied with.

The Giles Board has stated that it recognises that in order to achieve the planned benefits of the Acquisition some operational restructuring will be required following completion of the Acquisition, which may lead to some redundancies in the CBG Group and/or the Giles Group where the businesses of the Giles Group and the CBG Group have overlapping functions or where this would otherwise improve efficiency. However, the Giles Board has stated that no decisions will be taken regarding any redundancies or any changes to the locations of any member of the CBG Group's or any member of the Giles Group's places of business or redeployment of their fixed assets until a business review has been undertaken following completion of the Acquisition and appropriate consultation with employee representatives has occurred.

12. Financing of the Offer

Full implementation of the Offer (assuming no options are exercised under the CBG Enterprise Management Incentive Scheme) would result in a maximum payment by Giles of approximately GBP5.1 million in cash. The cash consideration payable to Shareholders pursuant to the Offer will be satisfied from the proceeds of a subscription by members of the CCP VIII Fund for loan notes issued by DMWSL 586 and the Giles Group's banking facilities provided by Bank of Scotland plc, part of Lloyds Banking Group.

Altium, financial adviser to Giles, is satisfied that the necessary financial resources are available to Giles to enable it to satisfy the cash consideration payable as a result of full acceptance of the Offer.

13. CBG Enterprise Management Incentive Scheme

The Offer extends to any CBG Shares unconditionally allotted or issued and fully paid prior to the date on which the Offer closes as a result of the exercise of options granted under the CBG Enterprise Management Incentive Scheme.

Participants in the CBG Enterprise Management Incentive Scheme will receive a letter from CBG, together with the Offer document, under which they will be notified that in the event that the Offer becomes or is declared unconditional in all respects, the option granted to the participants pursuant to the CBG Enterprise Management Incentive Schemes will become exercisable. As a result of the options granted pursuant to the CBG Enterprise Management Incentive Schemes being exercisable at a price in excess of the Offer Price, Giles is not required to make an equivalent offer to participants in the CBG Enterprise Management Incentive Scheme.

14. Inducement Fee and Non-Solicitation Agreement

On 14 June 2011, CBG entered into an agreement with Giles, (which was subsequently restated on 25 July 2011 and 2 August 2011) pursuant to which CBG has agreed to pay Giles a sum equal to one per cent. of the fully diluted equity value of CBG (calculated by reference to the Offer Price) if, amongst other things, (i) CBG breaches the terms of that agreement, (ii) the CBG Board fails to unanimously recommend the Offer or subsequently withdraws, modifies or qualifies its recommendation, (iii) a competing offer or alternative transaction is declared unconditional, completes or becomes effective, (iv) CBG enters into an inducement fee or analagous arrangement in connection with an alternative transaction or (v) CBG fails to notify the FSA within 14 days of announcement of the Offer.

Nothing in the inducement fee arrangement obliges CBG to pay any amount which the Panel determines would not be permitted by Rule 21.2 of the Code.

Pursuant to Rule 21.2 of the Code, Zeus Capital and CBG have each confirmed to the Panel that they consider the terms of the Inducement Fee and Non-Solicitation Agreement to be in the best interests of CBG Shareholders.

15. Compulsory acquisition, delisting and cancellation of trading

If Giles receives acceptances under the Offer in respect of, and/or otherwise acquires, both 90 per cent. or more in value of the CBG Shares to which the Offer relates and 90 per cent. or more of the voting rights carried by those shares and assuming that all of the other conditions of the Offer have been satisfied or waived (if capable of being waived), Giles intends to exercise its rights in accordance with sections 974 to 991 of the 2006 Act to acquire compulsorily the remaining CBG Shares on the same terms as the Offer.

Following the Offer becoming or being declared unconditional in all respects and subject to any applicable requirements of the AIM Rules, Giles intends to procure that CBG applies to the London Stock Exchange for the cancellation of the admission to trading in the CBG Shares on AIM. 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 (provided that Giles has acquired, or agreed to acquire, issued share capital carrying 75 per cent. of the voting rights of CBG). Delisting and the cancellation of the admission to trading of CBG Shares will significantly reduce the liquidity and marketability of any CBG Shares not acquired by Giles.

It is also intended that, following the Offer becoming or being declared unconditional in all respects, CBG will be re-registered as a private company and will enter into guarantee and debenture arrangements in favour of the lenders to the Giles Group under the terms of financing arrangements of the Giles Group.

It is intended that, following the Offer becoming or being declared unconditional in all respects, CBG will be operated as a trading subsidiary in a group of private companies, it will adopt articles of association consistent with this position and, as such, it is unlikely that it will pay dividends on any regular basis.

16. Disclosure of interests in CBG Shares

Giles confirms that on 1 August 2011 it made an Opening Position Disclosure, setting out the details required to be disclosed under Rule 8.1(a) of the Code.

As at midnight on 1 August 2011, neither Giles, nor any of the directors of Giles nor, so far as Giles is aware, any person acting in concert (within the meaning of the City Code) with Giles for the purposes of the Acquisition has any interest in, owns or controls any CBG Shares or any securities convertible or exchangeable into CBG Shares (including pursuant to any short or long exposure, whether conditional or absolute and whether in the money or otherwise, to changes in the prices of securities) or any rights to subscribe for or purchase the same, or holds any options (including traded options) in respect of, or has any option to acquire, any CBG Shares or has entered into any derivatives referenced to CBG Shares ("Relevant Shares") which remain outstanding, nor does any such person have any arrangement in relation to Relevant Shares. An "arrangement" for these purposes also includes any indemnity or option arrangement, or any agreement or understanding, formal or informal, of whatever nature, relating to Relevant Shares which may be an inducement to deal or refrain from dealing in such securities, or any borrowing or lending of Relevant Shares that have not been on-lent or sold.

17. General

The Offer document will be sent to CBG Shareholders (other than certain Overseas Shareholders) as soon as possible and in any event within 28 days of this announcement (or such longer period as the Panel may permit). Electronic addresses and certain other information provided by CBG shareholders, persons with information rights and other relevant persons for the receipt of communications from the target company may be provided to Giles during an offer period as required under section 4 of Appendix 4 of the Code.

Enquiries

Giles

Sarah Gestetner / Nicola Swift / Jos Bieneman Citigate Dewe Rogerson 020 7282 2920/2993

Altium (financial adviser to Giles)

Keith Williams / Nakul Mohandas Altium 0845 505 4343

CBG

Robin Slinger, Chairman CBG 0161 920 0200

Zeus Capital (nominated and financial adviser to CBG)

Alex Clarkson / Tom Rowley / Aaron Smyth Zeus Capital 0161 831 1512

Altium, which is authorised and regulated in the United Kingdom by the FSA for investment business activities, is acting exclusively as financial adviser to Giles and no one else in connection with the Offer and will not be responsible to anyone other than Giles for providing the protections afforded to clients of Altium or for providing advice in relation to the Offer or any other matters referred to in this announcement.

Zeus Capital, which is authorised and regulated in the United Kingdom by the FSA for investment business activities, is acting exclusively as nominated adviser and financial adviser to CBG and no one else in connection with the Offer and will not be responsible to anyone other than CBG for providing the protections afforded to clients of Zeus Capital or for providing advice in relation to the Offer or any other matters referred to in this announcement.

Overseas jurisdictions

The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Failure to comply with any such restrictions may constitute a violation of the securities laws or regulatory requirements of any such jurisdiction. In particular, this announcement is not for publication or distribution, directly or indirectly, to US persons or into the United States (including its territories and possessions, any state of the United States and the District of Colombia), Canada, Australia or Japan. This announcement has been prepared in accordance with English Law and the Code and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England.

This announcement is not intended to, and does not, constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Offer or otherwise. The Offer will be made solely through the Offer Document, which will contain the full terms and conditions of the Offer, including details of how to accept the Offer. Any voting decision, acceptance or other response to the Offer should be made only on the basis of information in the Offer Document.

The Offer is not and will not be made, directly or indirectly, in or into, or by use of the mails, or by any means or instrumentality (including, without limitation, by means of telephone, facsimile, telex, internet or other forms of electronic communication) of interstate or foreign commerce of, or any facilities of a securities exchange of, the United States, Canada, Australia or Japan, and the Offer will not be capable of acceptance by any such use, means, instrumentality or facility or from within the United States, Canada, Australia or Japan. Accordingly, unless otherwise determined by Giles, copies of this announcement and any other document relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise distributed or sent in or into the United States, Canada, Australia or Japan and persons receiving such documents (including custodians, nominees and trustees) must not distribute or send them in, into or from such jurisdictions as doing so may make invalid any purported acceptance of the Offer by persons in any such jurisdiction.

Cautionary note regarding forward-looking statements

This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and business of the CBG Group, Giles Group and Expectrum Limited and certain plans and objectives of the CBG Board, Giles Board and/or the board of directors of Expectrum. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words of similar meaning. These statements are based on assumptions and assessments made by the boards of directors of CBG, Giles and Expectrum Limited in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe appropriate. By their nature, forward-looking statements involve risk and uncertainty, and the factors described in the context of such forward-looking statements in this announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements.

Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this announcement. None of CBG, Giles and Expectrum Limited assume any obligation to update or correct the information contained in this announcement, whether as a result of new information, future events or otherwise, except to the extent legally required.

The statements contained in this announcement are made as at the date of this announcement, unless some other time is specified in relation to them, and service of this announcement shall not give rise to any implication that there has been no change in the facts set out in this announcement since such date. Nothing contained in this announcement shall be deemed to be a forecast, projection or estimate of the future financial performance of the CBG Group or Giles Group except where expressly stated.

Dealing disclosure requirements

Under Rule 8.3(a) of the Code, any person who is (directly or indirectly) interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(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 paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, (directly or indirectly) interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. 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 paper 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. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on [phone].

Publication on Giles website

A copy of this announcement will be available free of charge, subject to certain restrictions relating to persons resident in restricted jurisdictions, for inspection on the Giles website at www.gilesinsurance.co.uk

Neither the contents of Giles' website nor the contents of any website accessible from hyperlinks on such website (or any other website) is incorporated into, or forms part of, this announcement nor, unless previously published by means of a recognised information service, should any such content be relied upon in reaching a decision regarding the matters referred to in this announcement.

APPENDIX I

PART A: CONDITIONS OF THE OFFER

The Offer which will be made by Giles will comply with the Code. The Offer, any acceptances made under it and any dispute or claim arising out of, or in connection with, it (whether contractual or non contractual in nature) will be governed by, and construed in accordance with, English law and be subject to the jurisdiction of the courts of England. The Offer will be made on the terms and conditions set out in this announcement.

CONDITIONS OF THE OFFER

The Offer will be subject to the following conditions:

(a) valid acceptances being received (and not, where permitted, withdrawn) by 1.00 pm (London time) on 24 August 2011 (or such later time(s) and/or date(s) as Giles may, subject to the rules of the Code, decide) in respect of not less than 90 per cent. (or such lesser percentage as Giles may decide) in nominal value of the CBG Shares to which the Offer relates and of the voting rights attached to those shares, provided that this condition will not be satisfied unless Giles and/or any of its wholly owned subsidiaries shall have acquired or agreed to acquire, whether pursuant to the Offer or otherwise, directly or indirectly CBG Shares carrying, in aggregate, more than 50 per cent. of the voting rights then exercisable at a general meeting of CBG, including for this purpose to the extent (if any) required by the Panel, any such voting rights attaching to any CBG Shares that may be unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances whether pursuant to the exercise of any outstanding conversion or subscription rights or otherwise, and for this purpose:

(i) the expression "CBG Shares to which the Offer relates" shall be construed in accordance with sections 974 to 991 of the 2006 Act;

(ii) the expression "shares that may be unconditionally allotted or issued" shall include any treasury shares which are unconditionally transferred or sold by CBG; and

(iii) shares which have been unconditionally allotted but not issued shall be deemed to carry the voting rights which they will carry on being entered into the register of members of CBG;

(b) the Office of Fair Trading indicating, in terms satisfactory to Giles, that it is not its intention to refer the proposed acquisition of CBG by Giles or any matter arising therefrom to the Competition Commission;

(c) in respect of each notice under section 178 of FSMA which Giles is under a duty to give in connection with the Acquisition:

(i) the FSA notifying Giles pursuant to section 189(4)(a) or 189(7) of FSMA that it has determined to approve the acquisition by Giles of, or increase in control by Giles over, each member of the Wider CBG Group which is a UK authorised person (as that expression is defined in section 191G of FSMA) pursuant to section 185 of FSMA on terms reasonably satisfactory to the Giles Group; or

(ii) the FSA being treated, under section 189(6) of FSMA, as having approved each such acquisition of or increase in control;

(d) each Relevant Regulator having approved or being deemed to have approved, in terms reasonably satisfactory to Giles, the acquisition by Giles of control over CBG and any member of the Wider CBG Group which is authorised or regulated by any Relevant Regulator, either unconditionally or subject to the fulfilment of conditions or obligations reasonably acceptable to Giles;

(e) no government or governmental, quasi governmental, supranational, statutory, administrative or regulatory body (including any Relevant Regulator), authority, court, trade agency, association, institution, environmental or investigative body or any other person or body in any jurisdiction (each a "Relevant Authority") having decided to take, instituted, implemented or threatened any action, proceedings, suit, investigation, enquiry or reference, or made, proposed or enacted any statute, regulation, order or decision or taken any other steps and there not continuing to be outstanding any statute, regulation, order or decision, which would or might:

(i) make the Offer or the acquisition of any CBG Shares, or control of CBG by Giles void, illegal or unenforceable or otherwise restrict, restrain, prohibit, delay or interfere with the implementation thereof, or impose additional conditions or obligations with respect thereto, or require material amendment thereof or otherwise challenge or interfere therewith;

(ii) require, materially delay or prevent the divestiture (or alter the terms of any proposed divesture) by CBG or any member of the Wider CBG Group or any member of the Wider Giles Group of all or any material portion of their respective businesses, assets or property or impose any material limitation on the ability of any of them to conduct their respective businesses or own any of their assets or property;

(iii) impose any material limitation on or result in a material delay in the ability of any member of the Wider CBG Group or the Wider Giles Group to acquire or to hold or to exercise effectively any rights of ownership of shares or loans or securities convertible into shares in any member of the Wider CBG Group or of the Wider Giles Group held or owned by it or to exercise management control over any member of the Wider CBG Group or of the Wider Giles Group;

(iv) require any member of the Wider Giles Group or the Wider CBG Group to acquire or offer to acquire any shares or other securities in any member of the Wider CBG Group (other than as a result of implementation of the Offer);

(v) result in any member of the Wider Giles Group or the Wider CBG Group ceasing to be able to carry on its business;

(vi) result in the refusal, withholding, suspension, withdrawal, cancellation, termination or modification in whole or in part of any licence, authority, permission or package held or enjoyed by any member of the Wider CBG Group which is necessary for the proper carrying on of its business or the imposition of any conditions, restrictions or limitations upon such licence, authority, permission or privilege which would materially inhibit the exercise thereof;

(vii) otherwise materially and adversely affect the assets, business, profits, financial or trading position, or prospects of any member of the Wider Giles Group or of any member of the Wider CBG Group; or

(viii) all applicable waiting and other time periods during which any such Relevant Authority could decide to take, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference having expired, lapsed or been terminated;

(f) all necessary notifications and filings having been made, all applicable waiting periods (including any extensions thereof) under any applicable legislation or regulations of any jurisdiction having expired, lapsed or been terminated, in each case in respect of the Offer and the acquisition of any CBG Shares, or of control of CBG, by Giles, and all authorisations, orders, recognitions, grants, consents, licences, confirmations, clearances, permissions and approvals ("Authorisations") necessary or appropriate in any jurisdiction for, or in respect of, the Offer and the proposed acquisition of any CBG Shares, or of control of CBG, by Giles and to carry on the business of any member of the Wider Giles Group or of the Wider CBG Group having been obtained, in terms and in a form satisfactory to Giles, from all appropriate Relevant Authorities and from any persons or bodies with whom any member of the Wider Giles Group or the Wider CBG Group has entered into contractual arrangements in each case the absence of which would have a material adverse effect on the Wider CBG Group, and all such Authorisations remaining in full force and effect at the time at which the Offer becomes unconditional in all respects and Giles having no knowledge of an intention or proposal to revoke, suspend or modify or not to renew any of the same and all necessary statutory or regulatory obligations in any jurisdiction having been complied with;

(g) except as Fairly Disclosed, there being no provision of any arrangement, agreement, licence, permit or other instrument to which any member of the Wider CBG Group is a party or by or to which any such member or any of their assets is or may be bound, entitled or be subject to and which, in consequence of the Offer or the acquisition or proposed acquisition of any CBG Shares, or control of CBG, by Giles or otherwise, would or might, result in (in any case to an extent which is or would be material in the context of the Wider CBG Group taken as a whole):

(i) any monies borrowed by, or other indebtedness (actual or contingent) of, any such member of the Wider CBG Group being or becoming repayable or being capable of being declared immediately repayable or repayable prior to its or their stated maturity or the ability of any such member to borrow monies or incur any indebtedness being inhibited or becoming capable of being withdrawn;

(ii) 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 such member or any such security (whenever arising or having arisen) being enforced or becoming enforceable;

(iii) any such arrangement, agreement, licence or instrument being terminated or adversely modified or any action being taken of an adverse nature or any obligation or liability arising thereunder;

(iv) any assets or interests of any such member being disposed of or charged, or right arising under which any such asset or interest could be required to be disposed of or charged, other than in the ordinary course of business;

(v) the interest or business of any such member in or with any firm or body or person, or any agreements or arrangements relating to such interest or business, being terminated or adversely modified or affected;

(vi) any such member ceasing to be able to carry on business under any name under which it presently does so;

(vii) the creation of liabilities (actual or contingent) by any such member;

(viii) the value of or financial or trading position of any such member being prejudiced or adversely affected, and no event having occurred which, under any provision of any arrangement, agreement licence or other instrument to which any member of the Wider CBG Group is a party; or

(ix) to which any such member or any of its assets may be bound, entitled or subject, could reasonably be expected to result in any of the events or circumstances as are referred to in paragraphs (i) to (viii) of this condition (g) to an extent which is material in the context of the Wider CBG Group, taken as a whole;

(h) except as Fairly Disclosed, no member of the Wider CBG Group having, since 31 December 2010:

(i) issued, agreed to issue, authorised or proposed the issue of additional shares or securities of any class, or securities convertible into, or exchangeable for or rights, warrants or options to subscribe for or acquire, any such shares, securities or convertible securities (save as between CBG and wholly owned subsidiaries of CBG and save for options granted, and for any CBG Shares allotted upon exercise of options granted under the CBG Enterprise Management Incentive Scheme before 2 August 2011, or redeemed, purchased or reduced any part of its share capital (or announced any proposal to do so);

(ii) sold or transferred or agreed to sell or transfer any treasury shares;

(iii) recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus, dividend or other distribution other than to CBG or a wholly-owned subsidiary of CBG;

(iv) agreed, authorised, proposed or announced its intention to propose any merger or demerger or acquisition or disposal of assets (or any right, title or interest in any asset) or shares (other than in the ordinary course of trading) or to any material change in its share or loan capital;

(v) issued, authorised or proposed the issue of any debentures or incurred or increased any indebtedness or contingent liability;

(vi) acquired or disposed of or transferred, mortgaged or encumbered any asset or any right, title or interest in any asset (other than in the ordinary course of trading);

(vii) entered into or varied or announced its intention to enter into or vary any contract, arrangement or commitment (whether in respect of capital expenditure or otherwise) which is of a long term or unusual nature or involves or could involve an obligation of a material nature or magnitude;

(viii) entered into or proposed or announced its intention to enter into any reconstruction, amalgamation, scheme, commitment or other transaction or arrangement (otherwise than in the ordinary course of business);

(ix) taken any action nor having had any steps taken or legal proceedings started or threatened against it for its winding up or dissolution or for it to enter into any arrangement or composition for the benefit of its creditors, or for the appointment of a receiver, administrator, trustee or similar officer of it or any of its assets (or any analogous proceedings or appointment in any overseas jurisdiction);

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

(xi) entered into or varied or made any offer to enter into or vary the terms of any service agreement or arrangement with any of the directors of CBG;

(xii) waived, compromised or settled any claim which is material in the context of the Wider CBG Group;

(xiii) entered into any contract, transaction or arrangement which would be restrictive on the business of any member of the Wider CBG Group, other than to a nature and extent which is normal in the context of the business concerned; or

(xiv) entered into any agreement, arrangement or commitment or passed any resolution with respect to any of the transactions or events referred to in this condition (h);

(i) since 31 December 2010, except as Fairly Disclosed:

(i) there having been no material adverse change or deterioration in the business, assets, financial or trading position or profits or prospects of any member of the Wider CBG Group;

(ii) no litigation, arbitration proceedings, mediation proceedings, prosecution or other legal proceedings having been instituted, announced or threatened by or against or remaining outstanding against any member of the Wider CBG Group and no enquiry or investigation by or complaint or reference to any Relevant Authority against or in respect of any member of the Wider CBG Group having been threatened, announced or instituted or remaining outstanding which in any case is material in the context of the Wider CBG Group;

(iii) no contingent or other liability having arisen or been incurred which might reasonably be expected to adversely affect any member of the Wider CBG Group; and

(iv) no steps having been taken which are likely to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the Wider CBG Group which is necessary for the proper carrying on of its business;

(j) Giles not having discovered that, save as Fairly Disclosed:

(i) the financial, business or other information concerning the Wider CBG Group which has been disclosed at any time by or on behalf of any member of the Wider CBG Group whether publicly (by the delivery of an announcement to a Regulatory Information Service) or to Giles or its professional advisers, either contains a misrepresentation of fact or omits to state a fact necessary to make the information contained therein not misleading;

(ii) any member of the Wider CBG Group is subject to any liability, contingent or otherwise, which is not disclosed in the annual report and accounts of CBG for the financial year ended 31 December 2010;

(iii) any past or present member of the Wider CBG Group has not complied with all applicable legislation or regulations of any jurisdiction or any notice or requirement of any Relevant Authority with regard to the use, storage, disposal, discharge, transport, treatment, handling, release, spillage, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or harm human or animal health which non-compliance would be likely to give rise to any liability (whether actual or contingent) on the part of any member of the Wider CBG Group;

(iv) there is or is likely to be any obligation or 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 CBG Group or in which any such member may now or previously have had an interest under any environmental legislation or regulation or notice, circular or order of any Relevant Authority in any jurisdiction;

(v) circumstances exist whereby a person or class of persons would be likely to have any claim or claims in respect of any product or process of manufacture, or materials used therein, now or previously manufactured, sold or carried out by any past or present member of the Wider CBG Group which claim or claims would be likely to affect adversely any member of the Wider CBG Group, which in each case is material in the context of the Wider CBG Group;

(vi) that any member of the Wider CBG Group or any other entity in which any member of the Wider CBG Group has a significant economic interest and which is not a subsidiary of CBG (as applicable) is subject to any liability (contingent or otherwise) which is material in the context of the Wider CBG Group taken as a whole; or

(vii) there is any information which affects the import of any information disclosed at any time by or on behalf of any member of the Wider CBG Group and which is material in the context of the Wider CBG Group taken as a whole;

(k) the passing at the General Meeting (or any adjournment thereof) of the Resolution approving the Management Arrangements by Independent Shareholders (as detailed in Paragraphs 9 and 10 in the announcement above).

Giles reserves the right to waive, in whole or in part, all or any of conditions (b) to (j) inclusive. If Giles is required by the Panel to make an offer for CBG Shares under the provisions of Rule 9 of the Code, Giles may make such alterations to the above conditions, including condition (a), as are necessary to comply with the provisions of that Rule.

Except with the consent of the Panel, the Offer will lapse unless the conditions set out above (other than condition (a) to the Offer) are fulfilled or (if capable of waiver) waived or, where appropriate, have been determined by Giles in its reasonable opinion to be or to remain satisfied by no later than 21 days after the later of 24 August 2011 or the date on which the Offer becomes or is declared unconditional as to acceptances, or such later date as Giles may, with the consent of the Panel, decide. Giles shall be under no obligation to waive or treat as satisfied any of conditions (b) to (j) 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 such earlier date have been waived or fulfilled or satisfied and that there are at such earlier date no circumstances indicating that any of such conditions may not be capable of fulfilment or satisfaction.

The Offer will lapse if it is referred to the Competition Commission before 1.00 pm (London time) on the later of 24 August 2011 or the date on which the Offer becomes or is declared unconditional as to acceptances. If the Offer so lapses the Offer will cease to be capable of further acceptance and accepting CBG Shareholders and Giles will cease to be bound by acceptances received before the time when the Offer lapses.

PART B

CERTAIN FURTHER TERMS OF THE OFFER

The Offer will lapse if the proposed acquisition of CBG by Giles is referred to the Competition Commission before 1.00 p.m. on the first closing date of the Offer or the date when the Offer becomes or is declared unconditional as to acceptances, whichever is the later. In such circumstances, the Offer will cease to become capable of further acceptance and accepting CBG Shareholders and Giles shall cease to be bound by acceptances delivered on or before the date on which the Offer so lapses.

Giles reserves the right to make such changes to the above conditions as may be appropriate in the event that the conditions of the Offer are required to be amended to comply with Rule 9 of the Code.

The Offer will be made on the terms and will be subject to the conditions which are set out in this Appendix 1, those terms which will be set out in the Offer Document and the Form of Acceptance and such further terms as may be required to comply with the provisions of the Code. This announcement does not constitute an offer or invitation to purchase any securities.

The Offer will be governed by English law and subject to the jurisdiction of the English courts and to the conditions and further terms set out below and to be set out in the Offer Document and Form of Acceptance.

APPENDIX II

PART A: SOURCES AND BASES OF INFORMATION

Save as otherwise stated, the following constitute the sources and bases of certain information referred to in this announcement:

(i) Unless otherwise stated:

(a) the financial information relating to CBG stated as at or in respect of the period ended 31 December 2010, 31 December 2009, and 31 December 2008 is extracted from the audited financial statements for CBG for the years ended 31 December 2010, 31 December 2009 and 31 December 2008;

(b) the financial information relating to Giles stated as at or in respect of the period ended 31 August 2010, 31 August 2009 and 31 August 2008 is extracted from the audited financial statements for Giles for the years ended 31 August 2010 and 31 August 2009.

(ii) As at the close of business on 2 August 2011 (being the latest Dealing Date immediately prior to the publication of this announcement), CBG had in issue 15,878,753 ordinary shares of 4 pence each.

(iii) Unless otherwise stated, all prices quoted for CBG Shares are closing midmarket prices and are derived from the AIM Appendix and represent the closing middle price on the relevant date.

(iv) All share prices are expressed in pence.

(v) The information relating to the CBG Group has been provided by the CBG Directors.

(vi) The terms of the Offer value the entire issued and to be issued share capital of CBG at approximately GBP5.1 million, based on 15,878,753 CBG Shares as a result of options granted pursuant to the CBG Enterprise Management Incentive Schemes being exercisable at a price in excess of the Offer Price.

(vii) There has been no material change in any information published by Giles or CBG since the start of the Offer Period.

PART B: IRREVOCABLE UNDERTAKINGS AND LETTERS OF INTENT TO ACCEPT THE OFFER

CBG Directors

Giles has received irrevocable undertakings to accept, or procure the acceptance of, the Offer in respect of 1,444,671 CBG Shares in aggregate in which the CBG Directors and certain of their spouses have a beneficial interest, representing approximately 9.1 per cent. of the issued share capital of CBG.

In this regard, Robin Slinger, Janet Slinger, Michael Askew, Martyn Hughes, Suzanne Hughes, Stephen Rees, Stuart Mollekin, David Worsley and Carol Worsley have agreed to irrevocably undertake to accept or procure the acceptance of the Offer.

 
 
                                    CBG Shares subject 
                                            to 
                                 irrevocable undertakings 
                                                   Percentage 
                               Number of        of CBG issued 
     Directors:               CBG Shares        share capital 
 
     Robin Slinger*               45,000                  0.3 
     Janet Slinger               116,181                  0.7 
     Michael Askew               373,422                  2.4 
     Martyn Hughes*               26,179                  0.2 
     Suzanne Hughes               12,500                  0.1 
     Stephen Rees                333,437                  2.1 
     Stuart Mollekin*            140,366                  0.9 
     David Worsley*              322,586                  2.0 
     Carol Worsley                75,000                  0.5 
 
 
                               1,444,671                  9.1 
 
 
 
 

* Independent Directors

The above irrevocable undertakings from the CBG Directors and certain of their spouses remain binding unless the Offer lapses or is withdrawn.

Shareholders

Giles has also received irrevocable undertakings from Shareholders to accept, or procure the acceptance of, the Offer, in respect of in aggregate 4,692,521 CBG Shares, representing approximately 29.6 per cent of the issued share capital of CBG:

 
 
                                               CBG Shares subject 
                                                       to 
                                            irrevocable undertakings 
                                                              Percentage 
                                          Number of        of CBG issued 
     Shareholders:                       CBG Shares        share capital 
 
     Octopus Investments Limited          1,989,341                 12.5 
     Texas Holdings Limited               1,703,180                 10.7 
     Polar Capital LLP                    1,000,000                  6.3 
 
 
                                          4,692,521                 29.6 
 
 
 
 

The above irrevocable undertakings will cease to be binding only if (i) the Offer Document has not been posted within 28 days after the announcement of the Offer (or within such longer period as may be agreed by the Panel); (ii) the Offer lapses or is withdrawn; or in the case of the irrevocable undertakings from Octopus Investments Limited and Polar Capital LLP (iii) a Higher Competing Offer is received and Giles has not within three Business Days of the announcement of the Higher Competing Offer announced a firm intention to revise the terms of the Offer so that the value of the revised Offer is no less favourable than the value of the consideration under such Higher Competing Offer.

Non-binding letters of intent to accept the Offer have been provided by Laurence Andrew Turnbull who has a beneficial interest in 1,252,942 CBG Shares and Allianz Insurance plc which has a beneficial interest in 675,000 CBG Shares.

Accordingly, the number of CBG Shares in respect of which irrevocable undertakings and letters of intent have been received is, in aggregate, 8,065,134, representing approximately 50.8 per cent. of the issued share capital of CBG. The shares the subject of these irrevocable undertakings and letters of intent equate to approximately GBP2.6 million of the Offer Value.

APPENDIX III

DEFINITIONS

 
     2006 Act                          the Companies Act 2006 (as amended, 
                                        modified, consolidated, re-enacted 
                                        or replaced from time to time) 
     Acquisition                       the acquisition of the entire issued 
                                        and to be issued share capital of 
                                        CBG by Giles 
     AIM                               AIM, a market operated by the London 
                                        Stock Exchange 
     AIM Appendix                      the AIM appendix to the daily official 
                                        list of London Stock Exchange 
     AIM Rules                         rules and responsibilities in relation 
                                        to AIM companies 
     Altium                            Altium Capital Limited 
     Annual Report                     a comprehensive report on a company's 
                                        activities throughout the preceding 
                                        year 
     Board                             as the context requires, the board of 
                                       directors of CBG, or the board of 
                                       directors of Giles and the terms "CBG 
                                       Board", "Giles Board" and "Boards" 
                                       shall be construed accordingly 
     Business Day                      any day (other than a public holiday, 
                                        Saturday or Sunday) on which clearing 
                                        banks in London are open for normal 
                                        business 
     CBG                               CBG Group plc 
     CBG Board or CBG Directors                    Robin Slinger 
     or the Board of Directors                     (Non-executive Chairman) 
     of CBG                                        Michael Askew (Group 
                                                   Managing Director) Martyn 
                                                   Hughes (Group Finance 
                                                   Director) Stephen Rees 
                                                   (Financial Services 
                                                   Operations) Stuart Mollekin 
                                                   (Non-executive Director) 
                                                   David Worsley 
                                                   (Non-executive Director) 
     CBG Enterprise Management         the CBG Group plc Enterprise Management 
     Incentive Scheme                   Incentive Scheme 2003 
     CBG Group                         CBG and its subsidiaries and subsidiary 
                                        undertakings 
     CBG Shareholders or                     the Shareholders of CBG includes: 
     Shareholders                            (a) the existing unconditionally 
                                             allotted or issued and fully paid 
                                             ordinary shares of 4 pence each 
                                             in the capital of CBG; and (b) 
                                             any further ordinary shares of 4 
                                             pence each in the capital of CBG 
                                             which are unconditionally 
                                             allotted or issued and fully paid 
                                             before the Offer closes or before 
                                             such earlier date as Giles 
                                             (subject to the Code) may 
                                             determine, not being earlier than 
                                             the date on which the Offer 
                                             becomes or is declared 
                                             unconditional as to acceptances, 
     CCP                               Charterhouse Capital Partners LLP, 
                                        a limited liability partnership 
                                        incorporated in England and Wales 
                                        with registered number OC306266 
     CCP VIII Fund                     the relevant CCP fund from which 
                                        funds will be drawn down for the 
                                        purpose of the Acquisition 
     CGP VIII                          Charterhouse General Partners (VIII) 
                                       Limited, a private company incorporated 
                                       in England and Wales with registered 
                                       number 02290328 the general partner of 
                                       CCP VIII Fund 
     Charterhouse                      CCP and predecessor entitites carrying 
                                        on private equity investment business 
                                        under the name "Charterhouse" 
     Closing Price                     in the case of CBG Shares, the closing 
                                        middle market quotation of a CBG 
                                        Share as derived from the AIM Appendix 
     Code                              the City Code on Takeovers and Mergers 
     Daily Official List               an official list of share prices 
                                        produced every day by the London 
                                        Stock Exchange 
     Dealing Day                       a day on which stock exchanges and 
                                        trading facilities are generally 
                                        open for business 
     Dealing Disclosure                required after the person concerned 
                                        deals in relevant securities of 
                                        any party to the Offer 
     DMWSL 586                         DMWSL 586 Limited, a private company 
                                        incorporated in England and Wales 
                                        with registered number 06475827, 
                                        which is an indirect wholly owned 
                                        subsidiary of Expectrum 
     Expectrum or Expectrum            Expectrum Limited, a company 
     Limited                           incorporated in England and Wales with 
                                       registered number 06475825 and the 
                                       ultimate parent company of Giles 
     Expectrum Directors               Chris Giles, Paul Matson, Frank 
                                        van den Bosch and Robert Leeming 
     Fairly Disclosed                  fairly disclosed in the Annual Report, 
                                        or as publicly announced by or on 
                                        behalf of CBG through a Regulatory 
                                        Information Service before the date 
                                        of the Offer Document 
     Form of Acceptance                in respect of holders of CBG Shares 
                                        in certificated form, the form of 
                                        acceptance and authority relating 
                                        to the Offer 
     Form of Proxy                     the form of proxy for use by 
                                       Independent Shareholders in respect of 
                                       the General Meeting 
     FSA                               the Financial Services Authority of the 
                                       UK and any successor authorities 
     FSMA                              the Financial Services and Markets 
                                        Act 2000 (as amended) 
     General Meeting                   the general meeting of CBG to be 
                                        held at 10.30 a.m. on 24 August 
                                        2011 at which the Resolution will 
                                        be put to Independent Shareholders 
                                        (and any adjournment thereof) 
     Giles                             Giles Insurance Brokers Limited 
     Giles Directors                   George Prescott (Non-executive 
                                       Chairman) Chris Giles (Chief Executive 
                                       Officer) Sarah Lyons (Group Managing 
                                       Director) Mark Chambers (Finance 
                                       Director) Hazel McIntyre (Mergers & 
                                       Acquisitions) Matthew Scales 
                                       (Non-executive Director) 
     Giles Group                       Expectrum and its subsidiary 
                                       undertakings 
     Higher Competing Offer            a person announcing a firm intention 
                                       (in accordance with Rule 2.5 of the 
                                       Code) to make an offer to acquire CBG 
                                       at a price per ordinary share which is 
                                       above the value of the Offer as most 
                                       recently revised and, in case of the 
                                       irrevocable undertakings granted by 
                                       Polar Capital LLP, which is 35 pence or 
                                       more 
     Independent Directors             the CBG Directors with the exception 
                                        of Michael Askew and Stephen Rees 
     Independent Shareholders          all shareholders other than Michael 
                                        Askew, Stephen Rees and any member 
                                        of the Giles Group and any person 
                                        acting or deemed to be acting in 
                                        concert with Giles 
     Inducement Fee and                the inducement fee and non-solicitation 
     Non-Solicitation Agreement         agreement between CBG and Giles 
                                        dated 14 June 2011 and restated 
                                        on 25 July 2011 and 2 August 2011 
     London Stock Exchange             London Stock Exchange plc 
     Management Arrangements           the arrangements described in paragraph 
                                        9 of this announcement relating 
                                        to Michael Askew along with various 
                                        other members of the senior management 
                                        of CBG 
     Member account ID                 the identification code or number 
                                        attached to any member account in 
                                        CREST 
     Offer                             the recommended offer made by Giles 
                                        to acquire the entire issued and 
                                        to be issued share capital of CBG 
                                        on the terms and subject to the 
                                        conditions set out in the Offer 
                                        Document including, where the context 
                                        so requires, any subsequent revision, 
                                        variation, extension, or renewal 
                                        of such Offer 
     Offer Document                    the document to be despatched to 
                                        CBG Shareholders and others by Giles, 
                                        containing amongst other things, 
                                        the Offer and certain information 
                                        about CBG and Giles 
     Offer Period                                              the period 
                                                               commencing on 
                                                               (and including) 
                                                               19 July 2011 
                                                               until whichever 
                                                               of the 
                                                               following of 
                                                               the times and 
                                                               dates shall be 
                                                               the latest: (a) 
                                                               1.00 p.m. 
                                                               (London time) 
                                                               on 24 August 
                                                               2011; and (b) 
                                                               The earlier of: 
                                                               the time and 
                                                               date at which 
                                                               the Offer 
                                                               lapses; or the 
                                                               time and date 
                                                               at which the 
                                                               Offer becomes 
                                                               unconditional 
     Offer Price                       32 pence per CBG Share 
     Offer Value                       approximately GBP5.1m at 32 pence 
                                        per CBG Share 
     Official List                     the Daily Official List of the London 
                                        Stock Exchange 
     Opening Position Disclosure       an announcement containing details 
                                        of interests or short positions 
                                        in, or rights to subscribe for, 
                                        any relevant securities of a party 
                                        to the offer if the person concerned 
                                        has such a position 
     Overseas Shareholders             Shareholders (or nominees of, or 
                                       custodians or trustees for 
                                       Shareholders) resident in, ordinarily 
                                       resident in, located in or citizens of 
                                       jurisdictions outside the United 
                                       Kingdom 
     Panel                             the Panel on Takeovers and Mergers 
     Press Announcement                this announcement 
     Regulations                       the Uncertificated Securities 
                                       Regulations 2001 (SI 2001 No. 3755) 
     Regulatory Information            any information service authorised from 
     Service                           time to time by the FSA for the purpose 
                                       of disseminating regulatory 
                                       announcements 
     Relevant Regulator                in respect of CBG or any member of the 
                                       Wider CBG Group, each and any 
                                       regulatory authority to the supervision 
                                       and/or authorisation of which it is 
                                       subject whether statutory, 
                                       self-regulatory or otherwise, 
                                       including, without limitation, the FSA, 
                                       any settlement system, stock exchange 
                                       or listing authority 
     Resolution                        the ordinary resolution to be put 
                                        to the Independent Shareholders 
                                        at the General Meeting to approve 
                                        the Management Arrangements pursuant 
                                        to Rule 16 of the Code 
     Restricted Jurisdiction           each of the United States, Canada, 
                                        Australia and Japan 
     Shareholders                      holders of CBG Shares 
     subsidiary and subsidiary         the meaning given to these terms 
     undertakings                       in the 2006 Act 
     treasury shares                   any CBG Shares held by CBG as treasury 
                                        shares 
     UK or United Kingdom              the United Kingdom of Great Britain and 
                                       Northern Ireland (and its dependent 
                                       territories) 
     Wider CBG Group                   CBG and each of its subsidiaries, 
                                        subsidiary undertakings and associated 
                                        undertakings (including any joint 
                                        venture, partnership, firm or company 
                                        in which any member of the CBG Group 
                                        is interested or any undertaking) 
                                        in which any of such companies or 
                                        undertakings have a significant 
                                        interest 
     Wider Giles Group                 Expectrum and each of its subsidiaries, 
                                       subsidiary undertakings and associated 
                                       undertakings (including any joint 
                                       venture, partnership, firm or company 
                                       in which any member of the Giles Group 
                                       is interested or any undertaking) in 
                                       which any of such companies or 
                                       undertakings have a significant 
                                       interest 
     Zeus Capital                      Zeus Capital Limited 
 

All references to time in this announcement are to London time.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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