Offer for Lees Foods Plc (9791A)

Share Name	Share Symbol	Market	Type	Share ISIN	Share Description
Lees Foods	LSE:LEE	London	Ordinary Share	GB00B09Y4116	ORD 100P

Industry Sector	Turnover	Profit	EPS - Basic	PE Ratio	Market Cap
	0	0		N/A	0

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TIDMLEE

RNS Number : 9791A

Randotte (No. 555) Limited

10 April 2012

LEES FOODS PLC

10 April 2012

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

RECOMMENDED PROPOSAL FOR THE ACQUISITION

LEES FOODS PLC

RANDOTTE (NO. 555) LIMITED

to be effected by means of a scheme of arrangement under Part 26 of the Companies Act 2006

Summary

-- The Company is today announcing the terms of a recommended proposal whereby Randotte (No. 555) Limited will, subject to the consent of shareholders and the sanction of the Court, acquire the entire issued share capital of Lees by means of a scheme of arrangement under Part 26 of the Companies Act, further details of which are contained in the full text of this announcement and pursuant to the Exchange Agreements.

-- Under the terms of the Acquisition, Scheme Shareholders will be entitled to receive in cash 230 pence per Scheme Share.

-- The price of 230 pence per Scheme Share represents a premium of approximately 12.5 per cent. to 204.5 pence, being the volume weighted average Closing Price per Lees Share for the 6 months prior to the date of this announcement and a premium of approximately 31.8 per cent. to 175.5 pence, being the volume weighted average Closing Price per Lees Share for the 36 months prior to the date of this announcement.

-- The price of 230 pence per Scheme Share represents a premium of approximately 2.7 per cent. to 224 pence, being the Closing Price per Lees Share on 5 April 2012, being the last business day immediately prior to the date of this announcement.

-- The price of 230 pence per Scheme Share values the entire existing issued ordinary share capital of Lees at approximately GBP5.6 million.

-- The consideration payable under the Acquisition will be funded by debt finance from third party providers to Randotte.

-- The Lees Directors, Clive Miquel, David Simson, Albert Croll, Nadia Millar and Klaus Perch-Nielsen are not considered to be independent in relation to the Acquisition as they are all Randotte Directors and, subject to completion of the Exchange Agreements, will be shareholders in Randotte. Accordingly, there is presently no Lees Director who is independent of Randotte. The decision to recommend that Scheme Shareholders vote in favour of the Scheme at the Court Meeting and that eligible Lees Shareholders vote in favour of the Resolutions to be proposed at the General Meeting has therefore been made solely by Shore Capital who is acting as independent financial adviser to the Board.

-- Randotte has received irrevocable undertakings from certain shareholders to vote or procure the vote in favour of the Scheme in respect of holdings or shares over which they have discretionary voting control (as applicable), representing as at 5 April 2012 approximately 40.9% per cent. of the Scheme Shares which will carry voting rights at the Court Meeting.

-- Randotte is a private limited company incorporated in Scotland on 10 February 2012 and formed specifically for the purposes of the Acquisition. The directors of Randotte are also all of the directors of Lees. Randotte has not traded since its incorporation other than in connection with the Acquisition.

-- The Acquisition will be subject, inter alia, to the satisfaction or waiver of the Conditions set out in Appendix I to this announcement and in the Scheme Document. Further details of the Scheme will be set out in the Scheme Document which will be sent to Lees Shareholders within 28 days of the date of this announcement.

This summary should be read in conjunction with the accompanying full text of this announcement which sets out further details of the Acquisition and which forms an integral part of this announcement. Appendix I to this announcement contains the Conditions to, and certain further terms of, the Acquisition. Appendix II to this announcement contains further details of the sources of information and bases of calculations set out in this announcement. Appendix III to this announcement contains further details of the irrevocable undertakings. Appendix IV to this announcement contains definitions of certain expressions used in this summary and in this announcement.

Enquiries:

 
 Lees Foods Plc                    01236 441600 
 Clive Miquel 
 Randotte (NO. 555) Limited        01236 441600 
 David Simson 
 Grant Thornton UK LLP 
  Financial Adviser to Randotte 
  (NO. 555) Limited                020 7383 5100 
 Philip Secrett, Colin Aaronson 
  or David Hignell 
 Shore Capital and Corporate 
  Limited 
  Financial Adviser to Lees 
  Foods Plc                        020 7408 4090 
 Stephane Auton or Patrick 
  Castle

Shore Capital and Corporate Limited, which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for Lees and for no one else in connection with the Acquisition and will not be responsible to anyone other than Lees for providing the protections afforded to clients of Shore Capital and Corporate Limited nor for providing advice in relation to the Acquisition or any other matter or arrangement referred to in this announcement.

Grant Thornton UK LLP, which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for Randotte and for no one else in connection with the Acquisition and will not be responsible to anyone other than Randotte for providing the protections afforded to clients of Grant Thornton UK LLP nor for providing advice in relation to the Acquisition or any other matter or arrangement referred to in this announcement.

Baker Tilly Corporate Finance LLP, which is authorised and regulated in the United Kingdom by the Institute of Chartered Accountants in England and Wales, is acting exclusively for Lees and for no one else in connection with the Acquisition and will not be responsible to anyone other than Lees for providing the protections afforded to clients of Baker Tilly Corporate Finance LLP nor for providing advice in relation to the Acquisition or any other matter or arrangement referred to in this announcement.

This announcement is for information purposes only and is not intended to and does not constitute or form part of an offer to sell or invitation to purchase any securities or the solicitation of any vote for approval in any jurisdiction, nor shall there be any sale, issue or transfer of the securities referred to in this announcement in any jurisdiction in contravention of applicable law. The Acquisition will be made solely through the Scheme Document and the accompanying Forms of Proxy, which will together contain the full terms and conditions of the Acquisition, including details of how to vote in favour of the Scheme. Any response in relation to the Acquisition should be made only on the basis of the information contained in the Scheme Document or any document by which the Acquisition is made.

This announcement has been prepared for the purpose of complying with the laws of the United Kingdom and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom. The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and observe, any applicable requirements.

Important information

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 applicable restrictions or requirements. Any failure to comply with such restrictions may constitute a violation of the securities laws of any such jurisdiction. This announcement has been prepared for the purposes of complying with UK law, the Code and the AIM Rules and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any other jurisdiction.

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

This announcement does not constitute an offer or an invitation to purchase or subscribe for any securities or a solicitation of an offer to buy any securities pursuant to this announcement or otherwise in any jurisdiction in which such offer or solicitation is unlawful.

The statements contained herein 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 forth herein since such date. Nothing contained in this announcement shall be deemed to be a forecast, projection or estimate of the future financial performance of Lees or the Lees Group or of Randotte, except where otherwise stated.

Forward Looking Statements

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

Rule 2.10 disclosure

In accordance with Rule 2.10 of the Code, Lees confirms that it has 2,444,751 ordinary shares of GBP1 each in issue and admitted to trading on AIM under International Securities Identification Number (ISIN) GB00B09Y4116.

Dealing Disclosure Requirements

Under Rule 8.3(a) of the Code, any person who is, or becomes, "interested" (directly or indirectly) 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 the offeree company and any paper offeror.

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

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 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 of the Code. A "Dealing Disclosure" by a person to whom Rule 8.3(b) of the Code applies must be made by no later than 3.30 p.m. (London time) on the business day following the date of the relevant dealing.

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

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

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

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

This summary should be read in conjunction with the full text of this announcement. Appendix I to this announcement contains the conditions and further terms of the Acquisition. Appendix II to this announcement contains further details of the sources of information and bases of calculations set out in this announcement. Appendix III contains a summary of the irrevocable undertakings. Appendix IV contains definitions of certain expressions used in this summary and in this announcement.

Publication on Website

A copy of this announcement along with copies of the financing documents described in paragraph 10 of the full text of this announcement, the First Exchange Agreement and, when signed, the Second Exchange Agreement, each as described in paragraph 3 of the full text of this announcement and the irrevocable undertakings described in paragraph 5 of the full text of this announcement will be made available, free of charge, subject to certain restrictions relating to Overseas Shareholders, on Lees' website at www.leesfoods.co.uk by no later than 12 noon (London time) on the business day following the date of this announcement.

Neither the content of the website referred to in this announcement nor the content of any website accessible from hyperlinks on Lees' website (or any other website) is incorporated into, or forms part of, this announcement.

You may request a hard copy of this announcement, free of charge, by contacting Colin Aaronson or David Hignell at Grant Thornton UK LLP on 0207 383 5100.

Information relating to Lees Shareholders

Please be aware that addresses, electronic addresses and certain information provided by Lees Shareholders, persons with information rights and other relevant persons for the receipt of communications from Lees may be provided to Randotte during the offer period as requested under Section 4 of Appendix 4 of the Code to comply with Rule 2.12(c) of the Code.

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

10 April 2012

RECOMMENDED PROPOSAL FOR THE ACQUISITION

LEES FOODS PLC

RANDOTTE (NO. 555) LIMITED

to be effected by means of a scheme of arrangement under Part 26 of the Companies Act 2006

   1.         Introduction

Lees and Randotte are today announcing the terms of a recommended proposal under which Randotte will, subject to the consent of shareholders (as further described in paragraph 15 below) and the sanction of the Court, acquire the entire issued and to be issued share capital of Lees by means of a scheme of arrangement under Part 26 of the Companies Act and pursuant to the Exchange Agreements.

The terms of the Scheme are set out below. The Scheme is conditional upon the Conditions set out in Appendix I being satisfied or (if capable of waiver) waived.

   2.         The Acquisition

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

               for each Scheme Share            230 pence in cash

valuing Lees' existing issued ordinary share capital at approximately GBP5.6 million. The price of 230 pence for each Scheme Share represents a premium of approximately:

-- 2.7 per cent. to the Closing Price of 224 pence per Lees Share on 5 April 2012, being the last business day immediately prior to the date of this announcement;

-- 12.5 per cent. to 204.5 pence, being the volume weighted average Closing Price per Lees Share over the 6 months prior to 5 April 2012, being the last business day prior to the date of this announcement; and

-- 31.8 per cent. to 174.5 pence, being the volume weighted average Closing Price per Lees Share over the 36 months prior to 5 April 2012, being the last business day immediately prior to the date of this announcement.

If the Scheme becomes effective and the Exchange Agreements are completed, in each case in accordance with their respective terms, Lees will become a wholly owned subsidiary of Randotte.

The Acquisition is conditional upon the Scheme becoming effective by not later than 28 June 2012.

   3.         Exchange Agreements

Under the First Exchange Agreement, the Exchange Shareholders will exchange all or a significant proportion of their Lees Shares for Randotte Shares once the Scheme becomes effective. It is also intended that Nadia Millar will exercise options over 20,000 Lees Shares following the date of this announcement. Following exercise of the options, Mrs Millar intends to enter into the Second Exchange Agreement in respect of those shares which, if such agreement is completed, will result in Mrs Millar exchanging those shares for Randotte Shares.

   4.         Recommendation of the Acquisition by Shore Capital

On 10 February 2012, Lees announced, with considerable regret, the death of Dr. Chris Greig, the Company's then independent Non-Executive Chairman, who passed away after a period of illness. For the purposes of the Code, none of the current Lees Directors are deemed to be sufficiently independent of Randotte so as to be able to provide any recommendation to Lees Shareholders and, accordingly, Shore Capital, in its capacity as independent financial adviser to the Board of Lees, is providing the recommendation.

Having considered the relevant factors and the matters to be set out in the letter from the Board of Lees to be included in Part I of the Scheme Document, Shore Capital considers that the terms of the Scheme are fair and reasonable, and in the absence of a higher offer, Shore Capital will be recommending the Scheme Proposal in the Scheme Document.

The full text of the letter of recommendation from Shore Capital will be set out in Part II of the Scheme Document.

   5.         Irrevocable undertakings

Randotte has received irrevocable undertakings from certain shareholders, being Alasdair Locke, Ringway Limited, Trustees of the FCL Trust, F & P Investments Limited and Graham York, to vote or procure the vote in favour of the Scheme in respect of holdings or shares over which they have discretionary voting control (as applicable), representing as at 5 April 2012:

-- approximately 40.9% per cent. of the Scheme Shares which will carry voting rights at the Court Meeting;

-- together with the Exchange Shareholders and Coven, who have indicated their intention to vote in favour, approximately 70.9% per cent. of the Lees Shareholders eligible to vote in connection with the Special Resolution to be proposed at the General Meeting; and

-- approximately 40.9% per cent. of the Independent Shareholders eligible to vote in connection with the Ordinary Resolution to be proposed at the General Meeting.

Further details of these irrevocable undertakings are set out in Appendix III of this announcement.

   6.         Information on Lees

Lees is the parent company of Lees of Scotland and the Waverley Bakery, two Scottish based companies that have a long tradition in the manufacturing of confectionery, bakery and ice cream cone products that have been sold to consumers in the UK and overseas for many years. Lees was admitted to trading on AIM in June 2005.

Lees of Scotland produces a range of products under the Lees brand, including snowballs, teacakes, meringues and seasonal biscuits. In 1998, Lees of Scotland moved into a 82,000 square foot factory in Coatbridge.

In 2003, Lees acquired the Waverley Bakery. Operating out of a factory and warehousing facility in Cambuslang, Waverley Bakery manufactures and sells ice cream cones and wafers and accessories to both the independent trade and retailers.

Audited accounts of the Company for the two years ending 31 December 2010 and the unaudited interim accounts for the six months ended 30 June 2011 are incorporated by reference and are available at the Company's website, www.leesfoods.co.uk.

   7.         Current trading and prospects of the Lees Group

Key highlights from Lees audited financial statements for the years ended 31 December 2010, 2009 and 2008 and the unaudited interim results for the six months ending 31 June 2011 are summarised below.

 
                                                   2011 (6 months)  2010       2009       2008 
                                                   (GBP'000)        (GBP'000)  (GBP'000)  (GBP'000) 
Revenue                                            10,217           18,648     18,191     16,116 
Cost of Sales                                      (6,858)          (12,350)   (12,367)   (11,081) 
                                                   ---------------  ---------  ---------  --------- 
Gross Profit                                       3,359            6,298      5,824      5,035 
Operating Costs                                    (2,929)          (5,327)    (5,185)    (4,597) 
                                                   ---------------  ---------  ---------  --------- 
Operating Profit                                   430              971        639        438 
Finance Income                                     23               44         32         52 
Finance Costs                                      (31)             (65)       (58)       (111) 
                                                   ---------------  ---------  ---------  --------- 
Profit before Tax                                  422              950        613        379 
Tax                                                (111)            (254)      (181)      (123) 
                                                   ---------------  ---------  ---------  --------- 
Profit from continuing operations                  311              696        432        256 
(Loss) for the year from discontinued operations   -                -          (119)      (1,797) 
                                                   ---------------  ---------  ---------  --------- 
Profit for the period                              311              696        313        (1,541) 
                                                   ===============  =========  =========  =========

In the first six months of 2011, Lees recorded an operating profit of GBP0.43 million. This figure was down compared with the first six months of 2010, largely as a result of rising sugar prices caused by supply shortages in Europe, a situation which management continue to monitor closely. Turnover during the six month period amounted to GBP10.2 million, an increase of GBP0.6 million compared with the comparative period in 2010.

On 27 January 2012, Lees announced that it had reached a settlement with HM Revenue & Customs in relation to a long standing claim on overpaid output tax between 1973 and 1995. The payments, which ultimately will equate to a one off net cash amount of approximately GBP0.5 million have now been received.

   8.         Profit Estimate

In Lees' interim report on the six months ended 30 June 2011 issued on 28 September, Clive Miquel stated:

"Looking ahead to the full year performance, despite the raw material cost increases experienced in the first six months and the potential for further cost increases, we expect pre-tax profits to be well ahead of current market forecasts."

At that time, the Lees Directors considered that the market was expecting a pre-tax profit of GBP0.9 million for the year ending 31 December 2011, based on a note published by Shore Capital dated 25 May 2011.

A report on the Profit Estimate from each of Baker Tilly and Shore Capital will be contained within the Scheme Document.

   9.         Information relating to Randotte

Randotte is a private limited company incorporated in Scotland on 10 February 2012 and formed specifically for the purposes of the Acquisition. The Lees Directors are the Randotte Directors and subject to completion of the Exchange Agreements, shareholders in Randotte. Randotte has not traded since its incorporation other than in connection with the Acquisition.

As at the date of this announcement, Randotte has an issued share capital of 2 ordinary shares of GBP1 each (one held by David Simson and one held by Clive Miquel).

   10.        Financing of the Acquisition

The aggregate consideration payable in cash pursuant to the Scheme will be GBP4.43 million.

Randotte has entered into agreements with Lloyds Banking Group whereby Lloyds Banking Group will provide the relevant facilities to finance the Consideration. The facilities, which amount to GBP5 million, comprise a term loan of GBP2.4 million which is repayable by 30 June 2017, and two bridging facilities of GBP1.4 million and GBP1.2 million respectively that fall due for repayment on 31 July 2012 and 14 July 2012 respectively.

Grant Thornton, as financial adviser to Randotte, is satisfied that sufficient resources are available to Randotte to satisfy in full the cash consideration under the terms of the Scheme.

   11.        Management, employees and locations

The Randotte Directors have confirmed that they have no current plans to make any material change in the conditions of employment of the Lees Group's management and employees following the Scheme becoming effective and have no current plans to change the current strategy of Lees, its fixed assets or the location of Lees' operational places of business.

Lees currently employs approximately 270 people across its two factories and the Randotte Directors anticipate that it will remain an important employer in the local area. It is the intention of the Randotte Directors for employment to be maintained at or above the current level for the foreseeable future.

In accordance with the requirements of Rule 2.12 of the Code, Lees will make available to employees a copy of this announcement and will inform employees of the right of employee representatives under Rule 25.9 of the Code to require that a separate opinion of the employee representatives on the effects of the Acquisition on employment be appended to the Scheme circular.

12. Lees Directors, senior employees and the Lees ESOT and the effect of the Scheme on their interests

Directors

Details of the interests of the Lees Directors in the share capital of Lees, are set out below. Pursuant to the Exchange Agreements, the Lees Directors will, upon completion of these agreements, receive Randotte Shares in consideration for a significant proportion or all of their holdings of Lees Shares as at the date of this announcement.

 
 Name              Number of              Percentage      Number of Lees       Number of 
                    Lees Shares            holding         Shares that          Lees Shares 
                    (including             of the total    will be exchanged    that will 
                    Lees Shares            issued share    for shares           be acquired 
                    held by spouses)(1)    capital         in Randotte          for cash 
                                           of Lees 
 Clive 
  Miquel           102,659                4.20%           102,659              - 
 David 
  Simson           144,078                5.89%           102,659              41,419 
 Nadia 
  Millar(2)        76,5733                3.13%            76,573              - 
 Bert Croll        44,700                 1.83%           44,700               - 
 Klaus 
  Perch-Nielsen    238,471                9.75%           102,659              135,812

(1) Any Lees Shares held by a spouse are controlled by the relevant Lees Director.

(2) 42,373 of these shares are held as part of a family trust.

(3) Nadia Millar intends to exercise options over 20,000 Lees Shares following publication of this announcement. An application for these 20,000 Lees Shares to be admitted to trading on AIM will be made prior to the publication of the Scheme Document.

David Simson and Klaus Perch-Nielsen have agreed that some of their Lees Shares will be acquired for cash under the Scheme rather than for shares in Randotte to achieve an agreed shareholder position in Randotte following the Effective Date.

Senior employees

Pursuant to the First Exchange Agreement, certain senior employees of Lees will, upon completion of such agreement, receive Randotte Shares in consideration for all of their holding of Lees Shares, as set out below.

 
 Name             Position                 Number     Percentage holding   Number of 
                                            of Lees    of the total         Lees Shares 
                                            Shares     issued share         that will 
                                                       capital of Lees      be exchanged 
                                                                            for shares 
                                                                            in Randotte 
                  Lees Group Production 
 David Simpson     Director                19,800     0.81%                19,800 
                  Lees Group Supply 
 Steven Purves     Chain Director          3,400      0.14%                3,400 
                  Lees Group Financial 
 Sharon Lambe      Controller              1,600      0.07%                1,600 
                  The Waverley 
                   Bakery Limited 
                   (subsidiary of 
                   Lees) Finance 
 Robert Murray     Director                900        0.04%                900

Lees ESOT

The Lees ESOT is a trust set up to hold Lees Shares which can be gifted, sold or have options granted over, at the discretion of the trustee. The trustee is Dalry Investments Ltd, a wholly owned subsidiary of Lees whose directors are three of the Lees Directors, Klaus Perch-Nielsen, Clive Miquel and David Simson.

The Lees ESOT was established in 1995 for the benefit of and to incentivise employees of the Lees Group and has been used to distribute shares to employees. The Lees ESOT currently holds 64,488 Lees Shares representing approximately 2.64 per cent. of the entire issued share capital of Lees. None of the Lees Shares held by the Lees ESOT are allocated to any specific employee.

Pursuant to the First Exchange Agreement, the Lees Shares held by the Lees ESOT will be exchanged for an equal number of new shares in Randotte to ensure that the trustee can continue to operate the Lees ESOT following completion of the Acquisition.

Other effects of Scheme

There are no plans to introduce any new service agreements to the Lees Directors and the employees of Lees on more favourable terms than their existing service agreements.

Save as set out above, the effect of the Scheme on the interests of the Lees Directors and the other Exchange Shareholders does not differ from its effect on the interests of any other person.

In common with the other employees who hold options granted pursuant to the Lees Share Plans, appropriate proposals (as described below) will also be made to the Lees Directors in respect of their options granted under that arrangement.

Vote on arrangements under the Exchange Agreements

The Panel has agreed, pursuant to Rule 16 of the Code, that the Lees Directors (and connected persons), certain senior employees of Lees and the Lees ESOT will be permitted to receive shares in Randotte as consideration for the exchange of those Lees Shares which are the subject of the Exchange Agreements, provided the Independent Shareholders give their approval to these arrangements (by passing the Ordinary Resolution at the General Meeting).

Shore Capital, having reviewed the terms of the Exchange Agreements, considers that the terms of the Exchange Agreements are fair and reasonable so far as the Independent Shareholders are concerned.

   13.        Lees Share Plans

Options granted pursuant to the Lees Share Plans which have not already vested will become exercisable in full on the Effective Date and will remain so exercisable for a period of six weeks.

Any Lees Shares issued or transferred pursuant to the exercise of options under the Lees Share Plans prior to the Scheme Record Time will be subject to the terms of the Scheme.

As set out in the Special Resolution to be proposed at the General Meeting, an amendment to the Articles will be proposed to the effect that any Lees Shares allotted and issued pursuant to the exercise of an option under the Lees Share Plans after the Scheme Record Time (which are not subject to the Scheme) will automatically be transferred to, or purchased by, Randotte on the same terms as the Acquisition.

Participants in the Lees Share Plans will receive a separate explanatory letter which (i) explains the effect of the Scheme on their options, (ii) informs them of their right to exercise those options during the period noted above and (iii) invites them, as an alternative to such exercise, to surrender their entitlements in return for the payment of a cash amount which (after deductions in respect of tax and social security contributions) is equal to the gain they would have made had they exercised their options and sold the resulting Lees Shares for cash pursuant to the Scheme.

   14.        Opening position disclosures and interests

Randotte confirms that it is today making an Opening Position Disclosure, setting out the details required to be disclosed by it under Rule 8.1(a) of the Code.

   15.        The Scheme

Introduction

The Acquisition is being effected by means of a scheme of arrangement between Lees and the Scheme Shareholders pursuant to the provisions of Part 26 of the Companies Act (details of which will be set out in full in the Scheme Document) and pursuant to the Exchange Agreements.

The purpose of the Scheme is to enable Randotte, once the Scheme becomes effective and the Exchange Agreements are completed, to become the owner of the entire issued and to be issued share capital of Lees. This is to be achieved by the cancellation of the Scheme Shares by way of the Capital Reduction confirmed by the Court and the application of the credit arising in its books on account of capital caused by the cancellation of Scheme Shares in paying up in full new Lees Shares to be allotted to Randotte (with an aggregate nominal value equal to that of the Scheme Shares cancelled). Upon the Scheme becoming effective (and completion of the Exchange Agreements), Randotte will become the owner of the whole of the issued and to be issued share capital of Lees.

To become effective, the Scheme will require, amongst other things, the approval at the Court Meeting of a majority in number of the Meeting Shareholders present and voting, either in person or by proxy, representing 75 per cent. or more in value of the Meeting Shares held by such Meeting Shareholders, and the passing of the Resolutions necessary to approve certain matters to give effect to the Scheme at the General Meeting. The Special Resolution to be proposed at the General Meeting requires votes in favour representing 75 per cent. or more of the votes attached to Lees Shares voted at the General Meeting, whether in person or by proxy. The Ordinary Resolution to be proposed at the General Meeting requires votes in favour representing more than 50 per cent. of the votes cast by Independent Shareholders at the General Meeting. Lees Shareholders who are not independent of Randotte are precluded from voting on the Ordinary Resolution in accordance with the Code.

Following the Court Meeting and the General Meeting and the satisfaction (or, where applicable, waiver) of the other Conditions, the Scheme must also be sanctioned by the Court and the associated Re-registration authorised and Capital Reduction confirmed by the Court at the Scheme Court Hearing convened to sanction the Scheme. The Scheme, the Re-registration and the Capital Reduction will take effect when a certified copy of the Court Order, together with the requisite statement of capital, has been delivered to the Registrar of Companies in Scotland and, if so ordered by the Court, in the case of the Re-registration and the Capital Reduction, registered by him. If the Scheme becomes effective, it will be binding on all Scheme Shareholders irrespective of whether they attended or voted, and if they voted, whether they voted for or against the Scheme, at the Court Meeting or the General Meeting.

It is intended that dealings in Lees Shares will be suspended at 6.00 p.m. (London time) on the business day prior to the Scheme Court Hearing. Prior to the Effective Date, application will be made to the London Stock Exchange to cancel the admission to trading of Lees Shares on AIM. This is expected to take effect on or around the Effective Date.

On the Effective Date, share certificates in respect of the Lees Shares will cease to be valid and should be destroyed. In addition, entitlements to Lees Shares held within the CREST system will be cancelled on the Effective Date.

The Meetings

The Scheme is subject to the satisfaction (or waiver (if capable of waiver)) of the Conditions set out in Appendix I of this announcement. To become effective, the Scheme will also require approval by Meeting Shareholders at the Court Meeting, the approval of the Ordinary Resolution by the Independent Shareholders at the General Meeting and the approval of the Special Resolution by the Lees Shareholders at the General Meeting.

The Court Meeting

The Court Meeting will be convened at the direction of the Court to seek the approval of Meeting Shareholders for the Scheme (with or without modification).

At the Court Meeting, the Scheme must be approved by a majority in number of those Meeting Shareholders present and voting, either in person or by proxy, representing 75 per cent. or more in value of all Meeting Shares held by such Meeting Shareholders. The result of the Court Meeting will be posted on Lees' website.

The Scheme Shares held by Coven, Klaus Perch-Nielsen, David Simson, Shirley Simson and Anna Perch-Nielsen will be treated as a separate class from the other Scheme Shares as Klaus Perch-Nielsen and David Simson are directors of Randotte, Coven is controlled by the Perch-Nielsen family, Shirley Simson is connected with David Simson and Anna Perch-Nielsen is connected with Klaus Perch-Nielsen. Accordingly, Coven, Klaus Perch-Nielsen, David Simson, Shirley Simson and Anna Perch-Nielsen will not be eligible to vote at the Court Meeting. However, in order to allow the Court to sanction the Scheme, such shareholders will be required separately to consent to, and undertake to be bound by, the terms of the Scheme.

The General Meeting

The General Meeting will be convened to consider and, if thought fit, approve the Resolutions.

The Ordinary Resolution (which requires votes in favour representing more than 50 per cent. of the votes attached to Lees Shares held by Independent Shareholders voted at the General Meeting, whether in person or by proxy) has been proposed to approve the arrangements under the Exchange Agreements for the purposes of Rule 16.2 of the Code.

The Special Resolution (which requires votes in favour representing 75 per cent. or more of the votes attached to Lees Shares voted at the General Meeting, whether in person or by proxy) has been proposed to approve various provisions necessary to implement the Scheme, including:

   (a)         the Capital Reduction;

(b) subject to the Capital Reduction taking effect, the application of the resulting reserve in the books of account of Lees in paying up in full the New Lees Shares;

(c) the granting of authority to the Lees Directors pursuant to section 551 of the Companies Act to allot the New Lees Shares to Randotte in accordance with the terms of the Scheme; and

   (d)        to amend the articles of association of Lees (as described below).

It is proposed the Articles be amended so as to ensure that any Lees Shares issued at, or after, the adoption of the amended articles of association of Lees but at or before the Scheme Record Time will be subject to the terms of the Scheme and that any Lees Shares issued after the Scheme Record Time (other than to Randotte and/or its nominees) will automatically be transferred to, or purchased by, Randotte on the same terms as the Acquisition. This amendment will avoid any person (other than Randotte) holding shares in the capital of Lees after the Effective Date.

The Panel has agreed, pursuant to Rule 16 of the Code, that the Lees Directors (and connected persons), certain senior employees of Lees and the Lees ESOT will be permitted to receive shares in Randotte as consideration for their Lees Shares, provided the Independent Shareholders give their approval to these arrangements (by passing the Ordinary Resolution).

The Scheme Court Hearing

Under the Companies Act, the Scheme also requires the sanction of the Court. There will be one Court hearing in order to sanction the Scheme, authorise the Re-registration and confirm the Capital Reduction.

The Scheme Court Hearing to sanction the Scheme, authorise the Re-registration and confirm the Capital Reduction will be held at the Court of Session, Parliament House, Parliament Square, Edinburgh, EH1 1RQ. Any Lees Shareholder or other person who considers that he or she has an interest in the Scheme (each an "Interested Party") and who is concerned that the Scheme may adversely affect them is entitled to be heard by the Court.

Modifications to the Scheme

The Scheme contains a provision for Lees and Randotte jointly to consent, on behalf of all persons affected, to any modification of, or addition to, the Scheme or to any condition approved or imposed by the Court. The Court would be unlikely to approve any modification of, or addition to the Scheme which might be material to the interests of Scheme Shareholders.

Conditions to the Acquisition

The Acquisition and, accordingly, the Scheme are subject to a number of conditions set out in Appendix I of this announcement. In summary, the Scheme is conditional upon, amongst other things:

(a) the approval of the Scheme at the Court Meeting, or any adjournment thereof, by a majority in number of Meeting Shareholders present and voting, either in person or by proxy, representing 75 per cent. or more in value of the Meeting Shares held by such Meeting Shareholders;

(b) the Resolutions set out in the notice of the General Meeting being passed by the requisite majorities at the General Meeting, or any adjournment thereof; and

(c) the sanction of the Scheme, the authorisation of the Re-registration and the confirmation of the Capital Reduction by the Court (in either case, with or without modifications on terms agreed by Randotte and Lees) and a certified copy of the Court Order (together with the statement of capital attached thereto) being delivered to the Registrar of Companies in Scotland (and, in the case of the Capital Reduction and the Re-registration, if so ordered by the Court, registered by the Registrar of Companies in Scotland).

   16.        Overseas Shareholders

The implications of the Scheme and the Acquisition for Overseas Shareholders may be affected by the laws of jurisdictions outside the United Kingdom. Overseas Shareholders should inform themselves about, and must observe, any applicable legal requirements. It is the responsibility of any Overseas Shareholders to satisfy themselves as to the full observance of the laws and regulatory requirements of the relevant jurisdiction in connection therewith, including the obtaining of any governmental, exchange control or other consents which may be required, the compliance with other necessary formalities and the payment of any issue, transfer or other taxes or duties or payments due in such jurisdiction.

This announcement has been prepared for the purposes of complying with Scots law, the Code and the AIM Rules and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of the United Kingdom.

Lees Shareholders who are citizens or residents of the United States or other jurisdictions outside of the United Kingdom should consult their own legal and tax advisers with respect to the legal and tax consequences of the Scheme in light of their particular circumstances.

   17.        Settlement

Subject to the Scheme becoming effective and except with the consent of the Panel, settlement of the Consideration to which any Scheme Shareholder is entitled under the Scheme will be effected in the manner set out below.

   (a)   Scheme Shares held in uncertificated form

Where at the Scheme Record Time, a Scheme Shareholder holds Scheme Shares in uncertificated form they will receive the Consideration to which they are entitled through CREST by Capita Registrars on behalf of Randotte procuring the creation of an assured payment obligation in favour of the appropriate CREST account through which the relevant Scheme Shareholder holds such uncertificated shares in respect of the Consideration due to him. The creation of such an assured payment arrangement shall be a complete discharge of the obligations of Randotte under the Scheme with reference to payments made through CREST. Settlement of the Consideration will be paid through CREST within 14 days after the Effective Date, in accordance with CREST payment arrangements.

As from the Scheme Record Time, each holding of Scheme Shares credited to any stock account in CREST will be disabled and all Scheme Shares will be removed from CREST in due course thereafter.

Randotte reserves the right to pay all or any part of the Consideration referred to above to all or any Scheme Shareholder(s) who holds Scheme Shares in uncertificated form at the Scheme Record Time in the manner referred to in sub-paragraph (b) below if for any reason outside its control, it is not able to effect settlement in accordance with this sub-paragraph.

(b) Scheme Shares held in certificated form

Where at the Scheme Record Time, a Scheme Shareholder holds Scheme Shares in certificated form, settlement of the Consideration will be made in pounds sterling by cheque drawn on a branch of a clearing bank in the United Kingdom.

Settlement of the Consideration due under the Scheme in respect of Scheme Shares held in certificated form will be dispatched:

   (a)   by first class post, by cheque drawn on a branch of a UK clearing bank; or

(b) by such other method as may be approved by the Panel.

All such payments (whether in respect of Scheme Shares in uncertificated or certificated form) shall be made in pounds sterling. Payments made by cheque shall be payable to Scheme Shareholders concerned. Cheques shall be dispatched as soon as practicable after the Effective Date and in any event within 14 days of the Effective Date. All deliveries of cheques required to be made pursuant to the Scheme shall be effected by posting the same day by first class post in pre-paid envelopes addressed to the persons entitled thereto at their respective addresses as appearing in the register of members of Lees at the Scheme Record Time or, in the case of joint holders, at the address of that one of the joint holders whose name stands first in such register in respect of such joint holding at such time or in accordance with any special instructions regarding communications, and neither Randotte nor Lees shall be responsible for any loss or delay in the transmission of cheques sent in this way and such cheques shall be sent at the risk of the person entitled thereto.

On the Effective Date, each certificate representing a holding of Scheme Shares will be cancelled and share certificates for such shares will cease to be valid and should be destroyed.

Mandates in force at the Effective Date relating to the payment of dividends and other instructions given by the Scheme Shareholders in respect of their Scheme Shares will be deemed revoked as from the Effective Date.

   (c)   General

Except with the consent of the Panel, settlement of the Consideration to which any Scheme Shareholder is entitled under the Scheme will be implemented in full in accordance with the terms of the Scheme free of any lien, right of set-off, counterclaim or other analogous right to which Randotte may otherwise be, or claim to be, entitled against such shareholder.

   18.        Suspension and cancellation of admission to trading on AIM

It is intended that dealings in Lees Shares will be suspended at 4.30p.m. (London time) on the day prior to the Scheme Court Hearing. Prior to the Effective Date, application will be made to the London Stock Exchange to cancel the admission to trading of Lees Shares on AIM. This is expected to take effect on or around the Effective Date.

   19.        Further Information

Appendix I sets out the conditions and further terms of the Acquisition.

Appendix II sets out the sources of information and bases of calculation.

Appendix III sets out details of the irrevocable undertakings.

Appendix IV contains definitions of certain terms used in this announcement.

   20.        Documents on Display

In accordance with Rule 26.1 of the Code, copies of the following documents will be made available on Lees' website (www.leesfoods.co.uk) by no later than 12 noon (London time) on 10 April 2012 until the Effective Date:

(a) the irrevocable undertakings referred to in paragraph 5 above and summarised in Appendix III of this announcement;

(b) the facility agreements referred to in paragraph 10 above; and

   (c)   the Exchange Agreements.

Enquiries:

 
 Lees Foods Plc                    01236 441600 
 Clive Miquel 
 Randotte (NO. 555) Limited        01236 441600 
 David Simson 
 Grant Thornton UK LLP 
  Financial Adviser to Randotte 
  (NO. 555) Limited                020 7383 5100 
 Philip Secrett, Colin Aaronson 
  or David Hignell 
 Shore Capital and Corporate 
  Limited 
  Financial Adviser to Lees 
  Foods Plc                        020 7408 4090 
 Stephane Auton or Patrick 
  Castle

Important information

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 applicable restrictions or requirements. Any failure to comply with such restrictions may constitute a violation of the securities laws of any such jurisdiction. This announcement has been prepared for the purposes of complying with Scots law, the Code and the AIM Rules and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any other jurisdiction.

This announcement and the accompanying documents do not constitute an offer or an invitation to purchase or subscribe for any securities or a solicitation of an offer to buy any securities pursuant to this announcement or otherwise in any jurisdiction in which such offer or solicitation is unlawful. This announcement does not comprise a prospectus or a prospectus equivalent document.

Forward Looking Statements

Rule 2.10 disclosure

Dealing Disclosure Requirements

Publication on Website

A copy of this announcement along with copies of the financing documents described in paragraph 10 of the full text of this announcement, the First Exchange Agreement, and when signed, the Second Exchange Agreement, each as described in paragraph 3 of the full text of this announcement and the irrevocable undertakings described in paragraph 5 of the full text of this announcement will be made available, free of charge, subject to certain restrictions relating to Overseas Shareholders, on Lees' website at www.leesfoods.co.uk by no later than 12 noon (London time) on the Business Day following the date of this announcement.

You may request a hard copy of this announcement, free of charge, by contacting Colin Aaronson or David Hignell at Grant Thornton UK LLP on 0207 383 5100.

Information relating to Lees Shareholders

APPENDIX I

CONDITIONS AND FURTHER TERMS OF THE ACQUISITION

The Acquisition will be conditional upon the Scheme becoming unconditional and becoming effective by no later than 28 June 2012 or such later date (if any) as Randotte and Lees may, with the consent of the Panel, agree and the Court, if required, may approve.

   1.         CONDITIONS OF THE SCHEME

The Scheme will be conditional upon:

(b) each of the resolutions set out in the notice of the General Meeting being duly passed by the requisite majority or majorities at the General Meeting or at any adjournment of the General Meeting; and

(c) the sanction of the Scheme with or without modification (but subject to any such modification being acceptable to Randotte) by the Court, the authorisation of the Re-registration by the Court, the confirmation of the Capital Reduction by the Court, the delivery of a certified copy of the Court Order and a statement of capital to the Registrar of Companies in Scotland and, in the case of the Capital Reduction and the Re-registration, if the Court so directs, the registration of the Court Order by the Registrar of Companies in Scotland.

   2.             CONDITIONS OF THE ACQUISITION

In addition, Randotte and Lees have agreed that the Acquisition will be conditional upon the following Conditions and, accordingly, the necessary actions to make the Scheme effective will not be taken unless the following Conditions (as amended if appropriate) have been satisfied or, where relevant, waived:

(a) no government or governmental, quasi-governmental, supranational, statutory or regulatory body, institution, association or agency (including any trade agency) or any court or other body (including any professional body) or person in any jurisdiction (each, a "Third Party") having (by notification in writing) decided to take, institute, implement or threaten, or having announced its intention to take institute or implement, any action, proceedings, suit, investigation, enquiry or reference or enacted, or made or proposed any statute, regulation, order or decision or taken any other steps and there not continuing to be any statute, regulation, order or decision, in each case which would or might be expected to, in each case to an extent which is material in the context of Randotte or the Lees Group, as the case may be, taken as a whole:

a. make the Acquisition or the acquisition or the proposed acquisition of any shares in, or control of Lees or any member of the Lees Group, by Randotte void, unenforceable or illegal under the laws of any relevant jurisdiction or directly or indirectly restrain, restrict, prohibit, frustrate or otherwise materially delay or interfere with the implementation of, or impose additional material conditions or obligations with respect to, or otherwise in a material way challenge, the Acquisition, the acquisition of any shares in, or control of, Lees or any member of the Lees Group by Randotte;

b. require the divestiture by Randotte or any member of the Lees Group of all or any material part of their respective businesses, assets or properties or impose any limitation on their ability to conduct all or any part of their respective businesses or to own any of their respective assets or properties;

c. require the divestiture by Randotte of any shares or other securities in Lees or any member of the Lees Group;

d. limit or delay, or impose any material limitations on the ability of Randotte or any member of the Lees Group to acquire or hold or to exercise effectively, directly or indirectly, all or any rights of ownership of shares or other securities in, or to exercise management control over, any member of the Lees Group or Randotte;

e. other than in connection with the implementation of the Acquisition, require Randotte or any member of the Lees Group to subscribe for, acquire, offer to subscribe for or acquire, any shares or other securities (or interest) of any member of the Lees Group or Randotte;

f. impose any limitation on the ability of Randotte or any member of the Lees Group to integrate or co-ordinate its business, or any part of it, with the businesses or any part of the businesses of Randotte and/or any other member of the Lees Group;

g. result in any member of the Lees Group ceasing to be able to carry on business under any name under which it presently does so; or

h. otherwise materially adversely affect any or all of the businesses, assets, financial or trading position or profits or prospects of Randotte or any member of the Lees Group,

and all applicable waiting and other time periods during which any such Third Party could institute or implement or threaten any such action, proceeding, suit, investigation, enquiry or reference or otherwise intervene having expired, lapsed or been terminated;

(b) all necessary material notifications, filings or applications in connection with the Acquisition or its implementation having been made and all appropriate waiting and other time periods (including extensions of such periods) under any applicable legislation or regulation of any relevant jurisdiction having expired, lapsed or been terminated in each case in respect of the Acquisition and the acquisition of any shares in, or control of, Lees or any other member of the Lees Group by Randotte or the carrying on by any member of the Lees Group of its business;

(c) all authorisations, orders, grants, recognitions, confirmations, licences, consents, clearances, permissions and approvals ("Authorisations") which Randotte reasonably considers necessary in any relevant jurisdiction for or in respect of the Acquisition, the proposed acquisition of any shares or securities in, or control of, Lees or any member of the Lees Group by Randotte or any matters arising from such acquisition being obtained in terms and in a form reasonably satisfactory to Randotte from appropriate Third Parties (in each case where the absence of such authorisation could reasonably be expected by Randotte to have a material adverse effect on the Lees Group taken as a whole or Randotte, as the case may be) and such Authorisations together with all necessary Authorisations for any member of the Lees Group to carry on its business (where such business is material in the context of the Lees Group taken as a whole and where the absence of such Authorisations would have a material and adverse effect on the Lees Group taken as a whole) remaining in full force and effect and no notice or announcement having been made by the relevant Third Party of any intention to revoke, withdraw, suspend, restrict, withhold or modify or not to renew any of them having been made under the laws or regulations of any relevant jurisdiction (in each case to an extent which would have a material and adverse effect on the Lees Group taken as a whole) and all necessary statutory or regulatory obligations in any relevant jurisdiction in respect of the Acquisition having been materially complied with;

(d) since the latest date prior to the publication of the Scheme Document:

a. no adverse change, and no other circumstance which would or might be likely to result in any adverse change, in the business, assets, financial or trading position or profits or prospects of any member of the Lees Group having occurred which is material in the context of the Lees Group taken as a whole;

b. no litigation, arbitration, prosecution or other legal proceedings having been threatened, announced, instituted or become pending and remaining outstanding by, against or in respect of any member of the Lees Group or to which any member of the Lees Group is or may be a party (whether as claimant or defendant or otherwise) and no enquiry or investigation by or complaint or reference to any Third Party or other investigative body against or in respect of any member of the Lees Group having been threatened, announced, implemented, instituted or become pending and remaining outstanding by, against or in respect of any member of the Lees Group in any such case which would or would be reasonably likely to materially affect the Lees Group taken as a whole;

c. no claim being made and no circumstances having arisen which might reasonably be expected to lead to a claim being made under the insurance of any member of the Lees Group where such claim would not be covered by such insurance and where such claim is material in the context of the Lees Group taken as a whole;

d. no steps having been taken which are reasonably likely to result in the withdrawal (without replacement), cancellation or termination of any licence, permit or consent held by any member of the Lees Group which is necessary for the carrying on by such member of its business and which is material in the context of the Lees Group taken as a whole; and

e. no contingent or other liability of any member of the Lees Group having arisen or become apparent to Randotte or increased, which in any case is material in the context of the Lees Group taken as a whole.

   3.             FURTHER TERMS OF THE ACQUISITION

Subject to the requirements of the Panel, Randotte reserves the right to waive all or any of the Conditions in whole or in part.

The Lees Shares will be acquired by Randotte free from all liens, charges, encumbrances, rights of pre-emption and any other third party rights of any nature whatsoever and together with all rights attaching thereto including the right to receive in full all dividends and other distributions declared, paid or made on or after 10 April 2012.

The Acquisition will be governed by Scots law and be subject to the jurisdiction of the Court and to the conditions set out in this announcement. The Acquisition will comply with the applicable rules and regulations of the London Stock Exchange and the Code.

APPENDIX II

SOURCES OF INFORMATION AND BASES OF CALCULATION

In this announcement, unless otherwise stated or the context otherwise requires, the following bases and sources have been used.

   1.1        References to a percentage of Lees Shares are based on 2,444,751 issued Lees Shares.

1.2 The value of the entire issued ordinary share capital of Lees is based on 2,444,751 issued Lees Shares.

1.3 The closing share price of 224 pence on 5 April 2012 is the mid-market price as sourced from the AIM Appendix to the Daily Official List. The average volume-weighted closing price of 204.5 pence over the 6 months and 174.5 pence over the 36 months prior to 5 April 2012 are calculated based on the mid-market prices and daily trading volumes as sourced from Morningstar.

1.4 Unless otherwise stated, the financial information relating to Lees is extracted from the audited consolidated financial statements of Lees for the financial year to 31 December 2010, prepared in accordance with IFRS and from the unaudited consolidated financial statements of Lees (from its interim report) for the six months ended 30 June 2011, prepared in accordance with IFRS.

   1.5        The International Securities Identification Number for Lees Shares is GB00B09Y4116.

APPENDIX III

IRREVOCABLE UNDERTAKINGS

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

 
                                           Percentage 
                        Number of Scheme    of Meeting 
 Name                    Shares             Shares 
 Alasdair Locke         256,949            21.3% 
 Ringway Limited        80,000             6.6% 
 Trustees of the FCL 
  Trust(1)              70,000             5.8% 
 F & P Investments 
  Limited(1)            55,932             4.6% 
 Graham York            30,000             2.5% 
                        492,881            40.9%

(1) Graham York is a trustee of the FCL Trust and a director of F & P Investments Limited.

The irrevocable undertaking set out above will lapse if:

(a) the Scheme terminates or lapses in accordance with its terms or otherwise becomes incapable of ever becoming effective; or

(b) a third party announces a firm intention to make an offer for Lees (whether by scheme of arrangement or by way of takeover offer) at a value exceeding 230 pence per Lees Share or a securities exchange offer the value of which on the day of announcement exceeds 230 pence per Lees Share.

A copy of the irrevocable undertakings described above will be available on Lees' website (www.leesfoods.co.uk).

APPENDIX IV

DEFINITIONS

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

 
 "Acquisition"                the proposed acquisition by Randotte 
                               of the entire issued and to be issued 
                               share capital of Lees, on the terms 
                               and subject to the conditions set 
                               out in this announcement (and, where 
                               the context so requires, any subsequent 
                               revision, variation, extension or 
                               renewal of such acquisition); 
 "AIM"                        the AIM market operated by the London 
                               Stock Exchange; 
 "AIM Rules"                  the rules and guidance for companies 
                               whose shares are admitted to trading 
                               on AIM entitled "AIM Rules for Companies" 
                               published by the London Stock Exchange, 
                               as amended from time to time; 
 "Articles"                   the articles of association of Lees; 
 "Baker Tilly"                Baker Tilly Corporate Finance UK LLP, 
                               25 Farringdon Street, London EC4A 
                               4AB 
 "Board"                      the board of directors of Lees; 
 "business day"               a day on which the London Stock Exchange 
                               is open for the transaction of business; 
 "Capital Reduction"          the reduction of Lees' share capital 
                               by cancelling and extinguishing the 
                               Scheme Shares provided for by the 
                               Scheme pursuant to section 641 of 
                               the Companies Act; 
 "Capita Registrars"          a trading name of Capita Registrars 
                               Limited; 
 "Closing Price"              the mid-market prices of Lees Shares 
                               as sourced from Morningstar; 
 "Code"                       the City Code on Takeovers and Mergers 
                               of the United Kingdom (as amended); 
 "Companies Act"              the Companies Act 2006 (as amended); 
 "Conditions"                 the conditions to the Acquisition 
                               which are set out in Appendix I of 
                               this announcement; 
 "Consideration"              the cash consideration due to Scheme 
                               Shareholders in connection with the 
                               Scheme; 
 "Court"                      the Court of Session, Edinburgh, Scotland; 
 "Court Meeting"              the meeting of Scheme Shareholders 
                               to be convened pursuant to an order 
                               of the Court pursuant to Part 26 of 
                               the Companies Act for the purpose 
                               of considering and, if thought fit, 
                               approving the Scheme (with or without 
                               modification), and any adjournment 
                               thereof; 
 "Court Order"                the order of the Court sanctioning 
                               the Scheme under section 899 of the 
                               Companies Act, authorising the Re-registration 
                               and confirming the Capital Reduction 
                               under section 648 of the Companies 
                               Act; 
 "Coven"                      Coven-SA Limited, a company incorporated 
                               in Scotland (with registered number 
                               SC063213) with its registered office 
                               at 12 Hope Street, Edinburgh, Midlothian 
                               EH2 4DB; 
 "CREST"                      the relevant system (as defined in 
                               the Uncertificated Securities Regulations) 
                               of which Euroclear is the Operator 
                               (as defined in the Uncertificated 
                               Securities Regulations); 
 "Effective Date"             the date that the Scheme becomes effective 
                               in accordance with its terms; 
 "Euroclear"                  Euroclear UK & Ireland Limited, a 
                               company incorporated under the laws 
                               of England & Wales; 
 "Exchange Agreements"        the First Exchange Agreement and the 
                               Second Exchange Agreement; 
 "Exchange Shareholders"      Klaus Perch-Nielsen, David Simson, 
                               Shirley Simson, the trustees of the 
                               Lees ESOT, Clive Miquel, Catrine Miquel, 
                               Nadia Millar, the trustees of the 
                               Saccomando Flexible Gift Trust, Bert 
                               Croll, Elspeth Croll, David Simpson, 
                               Steven Purves, Sharon Lambe and Robert 
                               Murray; 
 "Exchange Shares"            the 539,438 Lees Shares being exchanged 
                               by the Exchange Shareholders pursuant 
                               to the Exchange Agreements; 
 "Excluded Shares"            any Lees Shares which are registered 
                               in the name of or beneficially owned 
                               by Randotte or its nominee(s) at the 
                               relevant time and the Exchange Shares; 
 "First Exchange Agreement"   the share exchange agreement dated 
                               5 April 2012 among Randotte, Lees 
                               and the Exchange Shareholders; 
 "Forms of Proxy"             the form of proxy for use at the Court 
                               Meeting and/or the form of proxy for 
                               use at the General Meeting; 
 "FSA"                        the United Kingdom Financial Services 
                               Authority; 
 "FSMA"                       the Financial Services and Markets 
                               Act 2000; 
 "General Meeting"            the general meeting of Lees to be 
                               convened in connection with the Scheme 
                               and the Capital Reduction, including 
                               any adjournment thereof; 
 "Grant Thornton"             Grant Thornton UK LLP, Grant Thornton 
                               House, Melton Street, Euston Square, 
                               London NW1 2EP; 
 "Independent Shareholders"   all holders of Lees Shares other than 
                               the Exchange Shareholders, Coven and 
                               Anna Perch-Nielsen 
 "Lees" or the "Company"      Lees Foods Plc, a company incorporated 
                               in Scotland (with registered number 
                               213987) with its registered office 
                               at North Caldeen Road, Coatbridge, 
                               North Lanarkshire, United Kingdom, 
                               ML5 4EF; 
 "Lees Directors"             the directors of Lees; 
 "Lees ESOT"                  the Lees Foods Plc employee share 
                               ownership trust; 
 "Lees Group"                 Lees, its subsidiaries and subsidiary 
                               undertakings; 
 "Lees Shareholders"          the holders of Lees Shares, from time 
                               to time; 
 "Lees Shares"                ordinary shares of GBP1 each in the 
                               share capital of Lees; 
 "Lees Share Plans"           Lees EMI Share Option Plan established 
                               by the board of directors on 26 November 
                               2010 and Lees Approved Share Option 
                               Plan established by resolution of 
                               the board of directors on 28 June 
                               2011; 
 "London Stock Exchange"      London Stock Exchange plc; 
 "Meeting Shareholders"       all holders of Meeting Shares; 
 "Meeting Shares"             all Scheme Shares other than those 
                               held by Coven, Klaus Perch-Nielsen, 
                               David Simson, Shirley Simson and Anna 
                               Perch-Nielsen; 
 "Meetings"                   the Court Meeting and/or the General 
                               Meeting as the case may be; 
 "New Lees Shares"            the new ordinary shares of GBP1 each 
                               in the share capital of Lees to be 
                               issued to Randotte following the Capital 
                               Reduction in accordance with the terms 
                               of the Scheme; 
 "Ordinary Resolution"        the ordinary resolution to be proposed 
                               at the General Meeting in accordance 
                               with the requirements of the Code 
                               to approve certain arrangements under 
                               the Exchange Agreements in the form 
                               set out in the Scheme Document; 
 "Overseas Shareholders"      Lees Shareholders located or resident 
                               outside the United Kingdom; 
 "Panel"                      the Panel on Takeovers and Mergers 
                               in the United Kingdom; 
 "Profit Estimate"            the estimate of profit for the year 
                               ended 31 December 2011 set out in 
                               Part V of the Scheme Document 
 "Randotte"                   Randotte (No.555) Limited, a company 
                               incorporated in Scotland (with registered 
                               number SC416783) with its registered 
                               office at 1 Exchange Crescent, Conference 
                               Square, Edinburgh EH3 8UL; 
 "Randotte Directors"         the board of directors of Randotte; 
 "Regulatory Information      any of the services approved by the 
  Service"                     London Stock Exchange for the distribution 
                               to the public of announcements and 
                               included within the list maintained 
                               on the London Stock Exchange website, 
                               www.londonstockexchange.com; 
 "Resolutions"                the Ordinary Resolution and the Special 
                               Resolution; 
 "Re-registration"            the proposed re-registration of Lees 
                               as a private limited company under 
                               section 651 of the Companies Act and 
                               as provided for in the Scheme; 
 "Scheme"                     the proposed scheme of arrangement 
                               under Part 26 of the Companies Act 
                               between Lees and Scheme Shareholders, 
                               with or subject to any modification, 
                               addition or condition thereto approved 
                               or imposed by the Court and agreed 
                               to by Randotte; 
 "Scheme Court Hearing"       the hearing at which the Court Order 
                               is sought; 
 "Scheme Document"            the document that is required to be 
                               sent to Shareholders within 28 days 
                               of this announcement, pursuant to 
                               Rule 24.1 of the Code; 
 "Scheme Proposal"            the proposed acquisition of Lees by 
                               Randotte pursuant to the Scheme and 
                               other matters relevant thereto to 
                               be considered at the Court Meeting 
                               and the General Meeting; 
 "Scheme Record Time"         6.00 p.m. on the business day immediately 
                               prior to the hearing at which the 
                               Court's sanction of the Scheme, authorisation 
                               of the Re-registration and confirmation 
                               of the Capital Reduction will be sought; 
 "Scheme Shareholders"        the holders of Scheme Shares; 
 "Scheme Shares"              all Lees Shares: 
                              (i) in issue at the date of the Scheme 
                               Document; and 
                              (ii) (if any) issued after the date 
                               of the Scheme Document and before 
                               the Voting Record Time; and 
                              (iii) (if any) issued at or after 
                               the Voting Record Time but on or before 
                               the Scheme Record Time either on terms 
                               that the original or any subsequent 
                               holders thereof are bound by the Scheme 
                               or in respect of which such holders 
                               are, or shall have agreed in writing 
                               to be, so bound, 
                              but excluding any Excluded Shares; 
 "Second Exchange             the share exchange agreement proposed 
  Agreement"                   to be entered into among Randotte, 
                               Lees and Nadia Millar; 
 "Shore Capital"              Shore Capital and Corporate Limited, 
                               Bond Street House, 14 Clifford Street, 
                               London W1S 4JU; 
 "Special Resolution"         the special resolution to approve, 
                               amongst other things, the cancellation 
                               of the entire issued share capital 
                               of Lees and such other matters as 
                               may be necessary to implement the 
                               Scheme in the form set out in the 
                               Scheme Document; 
 "Uncertificated Securities   the Uncertificated Securities Regulations 
  Regulations"                 2001 (SI 2001 No. 3755); 
 "United Kingdom"             the United Kingdom of Great Britain 
  or "UK"                      and Northern Ireland; 
 "United States" or           the United States of America, its 
  "US"                         territories and possessions, any state 
                               of the United States of America, the 
                               District of Columbia and all other 
                               areas subject to its jurisdiction; 
 "VAT"                        value added tax; 
 "Voting Record Time"         the time and date specified in the 
                               Scheme Document by reference to which 
                               entitlement to vote on the Scheme 
                               will be determined, expected to be 
                               6.00 p.m. on the day which is two 
                               days before the date of the Court 
                               Meeting or, if the Court Meeting is 
                               adjourned, 6.00 p.m. on the day which 
                               is two days before the date of such 
                               adjourned Court Meeting; and 
 "GBP" and "pence"            pounds and pence sterling, the lawful 
                               currency of the UK.

In this announcement the expressions "subsidiary", "subsidiary undertaking", "associated undertaking" and "undertaking" have the meanings given by the Companies Act.

In this announcement, references to the singular includes the plural and vice versa, unless the context otherwise requires. References to time are to London time, unless the context otherwise requires.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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