Action Real Estate Company(K.S.C.C) Recommended offer for Action Hotels plc (7890W)

Share Name	Share Symbol	Market	Type	Share ISIN	Share Description
Action Hotels	LSE:AHCG	London	Ordinary Share	JE00BFZD1492	ORD 10P

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

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RNS Number : 7890W

Action Real Estate Company(K.S.C.C)

03 August 2018

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

THE INFORMATION COMMUNICATED IN THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014.

FOR IMMEDIATE RELEASE

3 August 2018

RECOMMED CASH OFFER

for

ACTION HOTELS PLC

ACTION REAL ESTATE CO KSCC

(a subsidiary of Action Group Holdings Co KSCC)

to be implemented by way of a scheme of arrangement pursuant to Article 125 of the Jersey Companies Law

Summary

-- Further to the announcement on 29 June 2018, the boards of Action Hotels and Action Real Estate (a subsidiary of AGH) are pleased to announce that they have reached agreement on the terms of a recommended cash offer pursuant to which Action Real Estate will acquire the entire issued and to be issued ordinary share capital of Action Hotels other than the Excluded Shares. The Offer is to be effected by means of a scheme of arrangement pursuant to Article 125 of the Jersey Companies Law.

-- Under the terms of the Offer, Action Hotels Shareholders will be entitled to receive:

for each Action Hotels Share 24 pence in cash

-- If any dividend or other distribution is authorised, declared, made or paid in respect of Action Hotels Shares on or after 29 June 2018 (being the date of the announcement regarding a possible offer by AGH or an associate entity of AGH) and prior to the Effective Date, Action Real Estate reserves the right to reduce the Offer Price by the amount of all or part of any such excess or otherwise by the amount of any such dividend or other distribution.

-- The Offer values the entire issued ordinary share capital of Action Hotels at exactly GBP35,432,926.80.

   --             The Offer Price represents a premium of:

(i) 50 per cent. to the closing price of 16 pence per Action Hotels Share on 28 June 2018 (being the latest practicable date prior to the Rule 2.4 announcement made by Action Hotels on 29 June 2018 regarding a possible offer by AGH or an associate entity of AGH); and

(ii) approximately 41.2 per cent. to the volume-weighted average price of 16.9973 pence per Action Hotels Share during the one month period ended on 28 June 2018 (being the latest practicable date prior to the Rule 2.4 announcement made by Action Hotels on 29 June 2018 regarding a possible offer by AGH or an associate entity of AGH).

-- The Offer is conditional on, amongst other things, the approval of Action Hotels Shareholders and sanction of the Scheme by the Court. The Offer is further subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Scheme Document.

Action Real Estate, AGH and Action Hotels

-- Action Real Estate is a private Kuwait-based company which is a subsidiary of AGH. Established in 1993, it is a leading specialist property company in Kuwait and the Gulf Cooperation Council region.

-- AGH is a private Kuwait-based holding company established in 1998. With financial interests in both private and public companies, AGH and its subsidiaries also invest in alternative investments such as real estate and private equity.

-- Action Hotels is a leading owner, developer and asset manager of branded three and four star hotels in the Middle East and Australia. Established in 2005, Action Hotels currently has 14 completed hotels with 2,623 rooms in aggregate across the Middle East and Australia, with further properties in development in the Middle East.

Recommendation and support for the Offer

-- The Recommending Independent Directors who have been so advised by WH Ireland Limited as to the financial terms of the Offer, consider the terms of the Offer to be fair and reasonable. In providing advice to the Action Hotels Directors, WH Ireland Limited has taken into account the commercial assessments of the Independent Action Hotels Directors. In addition, the Recommending Independent Directors, consider the terms of the Offer to be in the best interests of Action Hotels Shareholders as a whole.

-- Accordingly, Recommending Independent Directors intend to recommend that Action Hotels Shareholders vote or procure votes in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the Action Hotels General Meeting as they intend to have irrevocably undertaken to do (or procure to be done), in respect of their own holdings (and those shares that they are otherwise able to control the exercise of all rights attaching to) totalling, 575,659 Action Hotels Shares, in aggregate, representing approximately 0.4 per cent. in aggregate of the issued ordinary share capital of Action Hotels in issue as at close of business on 2 August 2018 (being the last Business Day prior to the date of this Announcement).

-- The Independent Action Hotels Directors are those of the Action Hotels Directors who are independent of AGH and Action Real Estate, being all of the Action Hotels Directors other than Sheikh Mubarak A M Al Sabah and Rawaf I. Bourisli who are not considered to be independent for the purposes of the Offer in light of being associates of AGH and Action Real Estate. Those non-independent directors therefore, at their own request, have not taken part in any deliberations regarding the Offer and they have neither reviewed nor considered the terms of the Offer.

The acquisition process

-- The Offer will be put to Action Hotels Shareholders at the Court Meeting and resolutions to implement the Offer will be put to the Action Hotels Shareholders at the Action Hotels General Meeting. In order to become effective, the Scheme must, among other things, be approved by a majority in number representing not less than 3/4ths of the voting rights of the Action Hotels Shares present and voting in person or by proxy at the Court Meeting, which is convened by order of the Court. In addition, a special resolution implementing the Offer must be passed by Action Hotels Shareholders representing not less than 3/4ths of votes cast at the Action Hotels General Meeting. The Scheme will also need to be sanctioned by the Court and the Court Order must be delivered to the Registrar of Companies for registration.

-- The Offer will be made in accordance with the Takeover Code and on the terms and subject to the Conditions which are set out in Appendix I to this Announcement and on the further terms and conditions that will be set out in the Scheme Document.

-- Action Real Estate reserves the right, subject to the prior consent of the Panel, to effect the Offer by way of a takeover offer that constitutes a "takeover offer" as defined in Article 116(1) of the Jersey Companies Law. In such event, such takeover offer will be implemented on substantially the same terms (subject to appropriate amendments), so far as applicable, as those which would apply to the Scheme.

-- The Scheme Document, will include full details of the Scheme together with the explanatory statement required pursuant to Article 126 of the Jersey Companies Law and the notices convening the Court Meeting and the Action Hotels General Meeting. The Scheme Document will be published as soon as practicable and, in any event, (save with the consent of the Panel and subject to the availability of the Court to approve the Scheme Documents for posting) within 28 days of this Announcement and will be made available by AGH and Action Hotels on their websites at www.actionkuwait.com and www.actionhotels.com respectively.

-- The availability of the Offer to persons not resident in the United Kingdom or Jersey may be affected by the laws and regulations of the relevant jurisdiction in which they are located. Persons who are not resident in the United Kingdom or Jersey should obtain professional advice and inform themselves about and observe any applicable legal or regulatory requirements.

Action Hotels comment

Commenting on the Offer, Alain Debare, Chief Executive Officer of Action Hotels, said:

"On behalf of the board of Action Hotels, I can confirm a majority recommendation of the Independent Action Hotels Directors in favour of Action Real Estate's cash offer for Action Hotels.

Action Hotels' strategy has been to focus on branded economy and midscale hotels and employed a strategy of rapid development requiring large cash injections to fund its pipeline. Despite strong growth, outlined in the 2017 financial statements the challenging economic climate across the Middle East and the increased debt position of Action Hotels have caused increased losses as Action Hotels continues to develop hotels that are not yet cash generative. Although Action Hotels' diversification in Australia has proved to be a good balance, the level of debt, the lack of liquidity and lack of institutional interest have , amongst other things, impacted the share price, thus reducing Action Hotels' fundraising options and increasing our dependence on our main shareholder to support our heavy cash burden and growth strategy.

The Independent Action Hotels Directors have sought advice from professional advisors, reviewed alternative options and made an informed decision that the cash offer would be in the best interest of the Action Hotels Shareholders.

Whilst the Offer is below the net asset value per Action Hotels Share (as of the Action Hotels' audited financial statements as at 31 December 2017), the Offer from Action Real Estate represents an improved price above the first proposal put to Action Hotels by Action Real Estate and an opportunity for Action Hotels Shareholders to crystallise an immediate and certain cash return at a significant premium to the price per Action Hotels Share that may otherwise be unachievable in the future. Furthermore, compared to the prospect of the Action Hotels Shares being de-listed, the Recommending Independent Directors believe that this is a rare liquidity event and the acceptance of the Offer is more attractive than Action Hotels Shareholders retaining their shareholding."

This summary should be read in conjunction with the full text of this Announcement. The Offer will be subject to the Conditions and further terms set out in Appendix I to this Announcement and to the full terms and conditions which will be set out in the Scheme Document. Appendix II to this Announcement contains the sources of information and bases of calculations of certain information contained in this Announcement. Appendix III contains a summary of the irrevocable undertakings in relation to this Offer. Appendix IV contains definitions of certain expressions used in this summary and in this Announcement.

For more information contact:

Action Hotels plc Tel: +44 (0) 20 7907 9663

Andrew Lindley, Chief Financial Officer

Katie Shelton, Director of Corporate Affairs

WH Ireland Limited (Financial Adviser to Action Hotels) Tel: +44 (0) 20 7220 1666

Adrian Hadden

Jessica Cave

Alex Bond

Action Real Estate Co KSCC c/o finnCap: as below

Vikas Arora, Chief Financial Officer

finnCap Ltd (Financial Adviser to AGH and Action Real Estate) Tel: +44 (0) 20 7220 0500

Henrik Persson

Simon Hicks

Max Bullen-Smith

Travers Smith LLP and Carey Olsen are retained legal advisers to AGH and Action Real Estate. K&L Gates LLP and Ogier are retained as legal advisers as to Action Hotels.

Disclaimers

finnCap Ltd, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for AGH and Action Real Estate and no one else in connection with the Offer and will not be responsible to anyone other than AGH and Action Real Estate for providing the protections afforded to clients of finnCap Ltd nor for providing advice in relation to the Offer, the content of this summary and the Announcement or any other matter or arrangement referred to herein.

WH Ireland Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for Action Hotels and no one else in connection with the matters referred to in this Announcement and will not be responsible to anyone other than Action Hotels for providing the protections afforded to clients of WH Ireland Limited, or for providing advice in relation to the matters referred to in this summary and the Announcement.

IMPORTANT NOTICE

Overseas 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. This Announcement and the accompanying documents have been prepared in connection with proposals in relation to a scheme of arrangement pursuant to and for the purpose of complying with Jersey law, the Takeover Code, the AIM Rules and the Rules of the London Stock Exchange and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England & Wales and Jersey. Nothing in this Announcement or the accompanying documents should be relied on for any other purpose.

The distribution of this Announcement in jurisdictions other than the United Kingdom and Jersey may be restricted by the laws of those jurisdictions and therefore persons into whose possession this Announcement comes should inform themselves about and observe such restrictions. Any failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Offer disclaim any responsibility or liability for the violation of such restrictions by any person.

Unless otherwise determined by Action Real Estate or required by the Takeover Code, and permitted by applicable law and regulation, the Offer will not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Scheme by any such means from within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this Announcement and all documents relating to the Offer are not being, and must not be, direct or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this Announcement and all documents relating to the Offer (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions where to do so would violate the laws in that jurisdiction.

All Action Hotels Shareholders or other persons (including nominees, trustees and custodians) who would otherwise intend to or may have a contractual or legal obligation to forward this Announcement to a jurisdiction outside the United Kingdom or Jersey should refrain from doing so and seek appropriate professional advice before taking any action.

No person has been authorised to make any representations on behalf of AGH, Action Real Estate or Action Hotels concerning the Offer which are inconsistent with the statements contained in this Announcement and any such representations, if made, may not be relied upon as having been so authorised.

The summary of the principal provisions of the Scheme contained in this Announcement is qualified in its entirety by reference to the Scheme itself, the full text of which will be set out in the Scheme Document. Each Action Hotels Shareholder is advised to read and consider carefully the text of the Scheme itself.

Action Hotels Shareholders should not construe the contents of this Announcement as legal, tax or financial advice and should consult with their own advisers as to the matters described in this Announcement.

Forward-looking statements

This announcement may include "forward-looking statements". All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding AGH's, Action Real Estate's or Action Hotels' financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to AGH's, Action Real Estate's or Action Hotels' products and services) are forward-looking statements.

Forward-looking statements are subject to risks and uncertainties and accordingly AGH's, Action Real Estate's or Action Hotels' actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, the statements.

These forward-looking statements speak only as at the date of this announcement. AGH, Action Real Estate and Action Hotels expressly disclaim any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by the Financial Services and Markets Act 2000, the EU Market Abuse Regulation (2014/596/EU), the AIM Rules or other applicable laws, regulations or rules.

No profit forecasts or estimates

No statement in this Announcement is intended as a profit forecast or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share for AGH, Action Real Estate or Action Hotels, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for AGH, Action Real Estate or Action Hotels, as appropriate.

Dealing disclosure requirements of the Takeover Code

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10(th) business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10(th) business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange

offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

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

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

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4). Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication of this Announcement on website

A copy of this Announcement (together with any document incorporated by reference) is and will be available, free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions on AGH's website at www.actionkuwait.com and Action Hotels' website at www.actionhotels.com during the course of the Offer. For the avoidance of doubt, the contents of these websites and any websites accessible from hyperlinks on these websites are not incorporated into and do not form part of this Announcement.

Electronic communications

Please be aware that addresses, electronic addresses and certain information provided by Action Hotels Shareholders, persons with information rights and other relevant persons for the receipt of communications from AGH or Action Real Estate may be provided to AGH or Action Real Estate during the Offer Period as requested under Section 4 of Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of the Takeover Code.

Right to receive documents in hard copy form

Any person entitled to receive a copy of documents, announcements and information relating to the Offer is entitled to receive such documents in hard copy form. Such person may request that all future documents, announcements and information in relation to the Offer are sent to them in hard copy form.

A hard copy form will not be sent to any person unless requested from Registrar by way of either written request to Computershare Investor Services (Jersey) Limited, c/o The Pavilions, Bridgewater Road, Bristol BS99 6ZY or request by telephone on 0370 707 4040 (when telephoning from inside the UK) or on +44 (0) 370 707 4040 (when telephoning from outside the UK).

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

Rule 2.9

In accordance with Rule 2.9 of the Takeover Code, Action Hotels confirms that, as of the date of this Announcement, it has in issue 147,637,195 ordinary shares of 10 pence each. The International Securities Identification Number ("ISIN") number of the ordinary shares is JE00BF ZD1492.

THE INFORMATION COMMUNICATED IN THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014.

FOR IMMEDIATE RELEASE

3 August 2018

RECOMMED CASH OFFER

for

ACTION HOTELS PLC

ACTION REAL ESTATE CO KSCC

(a subsidiary of Action Group Holdings Co KSCC)

to be implemented by way of a scheme of arrangement pursuant to Article 125 of the Jersey Companies Law

   1.               Introduction

Further to the announcement on 29 June 2018, the boards of Action Hotels and Action Real Estate (a subsidiary of AGH) are pleased to announce that they have reached agreement on the terms of a recommended cash offer pursuant to which Action Real Estate will acquire the entire issued and to be issued ordinary share capital of Action Hotels other than the Excluded Shares. The Offer is to be effected by means of a scheme of arrangement pursuant to Article 125 of the Jersey Companies Law.

Action Real Estate reserves the right to elect to implement the Offer by way of a takeover offer that constitutes a "takeover offer" as defined in Article 116(1) of the Jersey Companies Law, subject to the Panel's consent.

   2.               Terms of the Offer

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

for each Action Hotels Share 24 pence in cash

If any dividend or other distribution is authorised, declared, made or paid in respect of Action Hotels Shares on or after 29 June 2018 (being the date of the announcement regarding a possible offer by AGH or an associate entity of AGH) and prior to the Effective Date, Action Real Estate reserves the right to reduce the Offer Price by the amount of all or part of any such excess or otherwise by the amount of any such dividend or other distribution.

The Offer values the entire issued ordinary share capital of Action Hotels at exactly GBP35,432,926.80.

The Offer Price represents a premium of:

(a) 50 per cent. to the closing price of 16 pence per Action Hotels Share on 28 June 2018 (being the latest practicable date prior to the Rule 2.4 announcement made by Action Hotels on 29 June 2018 regarding a possible offer by AGH or an associate entity of AGH); and

(b) approximately 41.2 per cent. to the volume-weighted average price of 16.9973 pence per Action Hotels Share during the one month period ended on 28 June 2018 (being the latest practicable date prior to the Rule 2.4 announcement made by Action Hotels on 29 June 2018 regarding a possible offer by AGH or an associate entity of AGH).

The Offer is conditional on, amongst other things, the approval of Action Hotels Shareholders and sanction of the Scheme by the Court. The Offer is further subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Scheme Document. Subject to the satisfaction or, where appropriate, waiver of the Conditions, it is expected that the Offer will become Effective in the third quarter of 2018. Further details in respect of the expected timetable of key events in relation to the Offer will also be set out in the Scheme Document to be sent to Action Hotels Shareholders in due course.

It is expected that the Scheme Document will be published as soon as practicable and, in any event (save with the consent of the Panel) within 28 days of this Announcement.

   3.               Background to and reasons for the Offer

The business of Action Hotels was originally established by AGH in 2005 with the target of becoming a leading owner, developer and asset manager of branded economy and midscale hotels in Middle East and Australian markets. Accelerating Action Hotels' strategy and the achievement of this goal lay behind Action Hotels seeking Admission in 2013.

Action Real Estate is pleased that Action Hotels is delivering upon this strategy with increases in revenue, operational room growth and total assets. However, notwithstanding the positive operational improvements since Admission, the share price performance of a Action Hotels Share has followed a broadly downward trajectory, liquidity in trading of Action Hotels Shares has been increasingly limited, and institutional investors in Action Hotels have mostly sold or considerably reduced their holdings of Action Hotels Shares without being replaced by investors with similar resources to support Action Hotels.

Action Real Estate is grateful for the considerable efforts of Action Hotels' management to address these matters but it has become increasingly clear that Action Hotels is financially and operationally dependent upon AGH. The combination of operational and financial activities have prevented Action Hotels from being cash generative since Admission and AGH believes that it will require further financial support in the future. Action Hotels' recent annual report and accounts for the year ended 31 December 2017 highlighted that Action Hotels' current liabilities, which will need to be settled or refinanced in the current financial year, exceeded its current assets by approximately $188 million, and that AGH's and its shareholders' ongoing financial support was a principal assumption underpinning the preparation of Action Hotels' 2017 financial statements on a going concern basis.

Action Real Estate recognises that, in addition to servicing its existing liabilities, Action Hotels will require substantial further financial support to continue its work programme and to grow in the face of challenges such as the difficult economic climate across the Middle East and the Australian banking situation. Action Real Estate does not expect that this support will be available from public market investors on economically compelling terms, nor does Action Real Estate believe that the ongoing need for parent company (and individual) loans and guarantees on an ad-hoc and indefinite basis is appropriate for a public company. In addition, further public market investment would likely be significantly dilutive to existing Action Hotels Shareholders. Action Real Estate also considers that a process of individual asset sales by Action Hotels would be detrimental and disruptive to Action Hotels as a whole and be highly unlikely, based on current market conditions and the individual circumstances of Action Hotels, to deliver a superior return to Action Hotels Shareholders than the Scheme.

In view of all the above factors, Action Real Estate believes that the advantages of private ownership far outweigh the possible benefits of continued public ownership and, regardless of the outcome of the Scheme, intends to request that Action Hotels seek a cancellation of its admission to trading on AIM.

Action Real Estate wishes at this time to give to Action Hotels Shareholders an opportunity to make a cash exit at a significant premium to the price of a Action Hotels Share (as set out above) prevailing prior to the announcement of a possible offer by AGH (or an associate entity of AGH) for Action Hotels on 29 June 2018. Action Real Estate notes, in view of the Wider AGH Group together with the Family Concert Party and Rawaf I. Bourisli holding approximately 73.8 per cent. of the Action Hotels Shares, that there is little possibility of any third party offeror emerging and hence the Offer is likely to be the only liquidity event that Action Hotels Shareholders will have the opportunity to bene t from in the near to medium term.

   4.               Recommendations

The Recommending Independent Directors, who have been so advised by WH Ireland Limited as to the financial terms of the Offer, consider the terms of the Offer to be fair and reasonable. In providing advice to the Action Hotels Directors, WH Ireland Limited has taken into account the commercial assessments of the Independent Action Hotels Directors. In addition, the Recommending Independent Directors consider the terms of the Offer to be in the best interests of Action Hotels Shareholders as a whole.

Accordingly, Recommending Independent Directors intend to recommend that Action Hotels Shareholders vote or procure votes in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the Action Hotels General Meeting as they intend to have irrevocably undertaken to do (or procure to be done), in respect of their own holdings (and those shares that they are otherwise able to control the exercise of all rights attaching to) totalling 575,659 Action Hotels Shares, in aggregate, representing approximately 0.4 per cent. in aggregate of the issued ordinary share capital of Action Hotels in issue as at close of business on 2 August 2018 (being the last Business Day prior to the date of this Announcement).

   5.               Background to and reasons for the recommendation

Action Hotels' strategy has been to exclusively focus on branded economy and midscale hotels. As outlined in its 2017 financial statements, the decline in the oil price and geopolitical context has created a challenging economic climate across the Middle East economies. Although Action Hotels diversification in Australia has proved to be a good balance, the depressed price of Action Hotels Shares has not allowed for access to capital from the equity markets at an acceptable share price and therefore Action Hotels' management has delivered growth by negotiating and securing additional debt funding whilst remaining within the loan-to-value levels set by the board of Action Hotels.

The recommendation has been made after due reflection and having taken detailed advice from professional advisers. Following this period of deliberation the Recommending Independent Directors, have made an informed decision that the Offer is in the best interest of the Action Hotels Shareholders.

The Recommending Independent Directors believe that the Offer is fair and reasonable and in considering the merits of the Offer, the Independent Directors have therefore taken into account:

-- Despite strong growth (compound annual growth rate of 13.7 per cent. in adjusted EBITDA since Admission), Action Hotels has had several profit warnings in the past 18 months with loss before tax being higher than market expectations due to interest charges, early repayment fees and depreciation charges.

-- Given the capital structure of Action Hotels and the reliance on debt funding for growth, the AIM market is no longer suited for the continued growth and requirements of Action Hotels.

-- The Offer Price of 24 pence represents a premium of 50 per cent. to the closing mid-market price of 16 pence on 27 June 2018 and a 16.4 per cent. premium over the average share price of the six months prior to that date, which sits broadly within the range of recent comparable public offers. Mean and median bid premia for bids below GBP250m during 2017 were 37 per cent. and 26 per cent. respectively.

-- Traditional valuation metrics are dramatically skewed by the significant debt burden of Action Hotels. Action Hotels Shares trade at a large discount to net asset value (discount of c.83 per cent.) for several reasons:

o Action Hotels is loss making;

o it has a heavy cash burden to service its debt and to fund developing hotels that are not yet cash generative;

o the CEO is departing;

o Action Hotels is exploring additional sources of financing to support and maintain the momentum of Action Hotels' growth and as announced in the 2017 financial statements Action Hotels forecasts its borrowings to increase towards the limit of total committed and non-committed facilities at various points from the signing of the financial statements and may require additional waivers of certain financial covenants; and

o in the absence of the above financing, Action Hotels may be reliant on its major shareholder, AGH, for continued support of the business and cash requirements going forward.

-- Action Hotels has not received the institutional support of investors in recent times and over time the share price performance and effect on the capital structure and performance of Action Hotels has resulted in the proportion of institutional investors on the share register declining.

-- Trading in Action Hotels Shares has become increasingly illiquid and therefore the Offer represents an opportunity for shareholders to exit for a meaningful amount of shares at a share price which the Recommending Independent Directors believe is higher than Action Hotels Shareholders are likely to be able to achieve on the open market in the short to medium term.

In addition to the above, the Recommending Independent Directors have considered the risk of not accepting the Offer. As set out in this Announcement, regardless of the outcome of the Scheme, AGH intends to request that Action Hotels seek a cancellation of its admission to trading on AIM, and therefore minority Action Hotels Shareholders would be likely to be left owning shares in a private limited company, which they may struggle to exit from in the short to medium term.

Against this background, the Independent Directors have also considered alternative options at length, including the disposal of certain assets. While the sale of some Action Hotels assets could theoretically realise a higher value to Action Hotels Shareholders, Action Real Estate considers that a process of individual asset sales by Action Hotels would be detrimental and disruptive to Action Hotels as a whole and as such, AGH would not support an asset sale. It is therefore highly unlikely, in current market conditions and the circumstances of Action Hotels that Action Hotels would be able to deliver a superior return to that of the Offer to Action Hotels Shareholders. On this basis, the Recommending Independent Directors consider that none of the alternatives considered are realistic or suitable strategies compared to the Offer in the circumstances.

Accordingly, the Recommending Independent Directors have taken the view that the Offer presents Action Hotels Shareholders with the best possible opportunity to achieve a return on their investment and in view of all of the above factors, and in agreement with the view of the independent professional advisers, the Recommending Independent Directors, intend to recommend that Action Hotels Shareholders vote, or procure the vote, in favour of all of the resolutions to be proposed at the Meetings.

   6.               Irrevocable undertakings by Action Hotels Directors

Irrevocable undertakings to vote, or procure the vote, in favour of all of the resolutions to be proposed at the Meetings have been received from Stefan Allesch-Taylor and Alain Debare in respect of their entire beneficial holdings of Action Hotels Shares amounting, in aggregate, to 575,659 Action Hotels Shares, which represents approximately 0.4 per cent. of the ordinary share capital of Action Hotels in issue on 2 August 2018 (being the last Business Day prior to this Announcement). Each of the above irrevocable undertakings will cease to be binding only if the Offer (or, if made, a takeover offer) lapses or is withdrawn at any time (but will continue be binding if the Offer is changed from the Scheme to a takeover offer).

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

   7.               Information on AGH, Action Real Estate and the Family Concert Party

AGH is a private Kuwait-based holding company established in 1998. With financial interests in both private and public companies, AGH and its subsidiaries also invest in alternative investments such as real estate and private equity.

Action Real Estate is a private Kuwait-based company which is a subsidiary of AGH. Established in 1993, it is a leading specialist property company in Kuwait and the Gulf Cooperation Council region.

The Family Concert Party comprises Sheikh Mubarak A M Al Sabah ("Sheikh Mubarak") and H E Dr Souad M S Al Sabah ("Dr Souad"). Dr Souad is the wife of the late H H Sheikh Abdullah Al Mubarak Al Sabah, the Deputy Amir of Kuwait and Sheikh Mubarak is their son. Dr Souad and Sheikh Mubarak hold 99.2 per cent. and 0.2 per cent. respectively of the share capital in AGH.

Dr. Souad is a Kuwaiti economist, writer, poet and artist. She is the chairperson of AGH and of the Action Consultancy Bureau. She obtained a degree in economics and politics at Cairo University in 1973 and a doctorate in economics from University of Surrey in the United Kingdom in 1981. She has written several economy-related publications including 'Development Planning in an Oil Economy and Kuwait: Anatomy of a Crisis Economy', and published several books related to socio-economic issues including 'The Planning and Development in the Kuwaiti Economy and the Role of Women', 'Lights on the Kuwaiti Economy' and 'OPEC: The Previous Experience and Futuristic Outlooks'. In 2007 she was bestowed with the honour of Commander of the Most Excellent Order of the British Empire (CBE) by Her Majesty Queen Elizabeth II in recognition of her cultural and educational contributions, and she is a patron of British-Kuwait Friendship Society. Dr Souad is the founder of Dar Souad Al-Sabah publishing company.

Sheikh Mubarak is the chairman of Action Real Estate and vice chairman of AGH. He is a prominent figure in the Kuwait commerce and social sectors and has been involved in a number of real estate, hospitality and investment projects. He completed his earlier education at the New English School in Kuwait and holds an M. Phil in International Relations from the University of Cambridge, and a BA (Hons.) in Politics with Economics from the University of Buckingham. He is also a graduate of The Royal Military Academy of Sandhurst and served in the Kuwaiti Armed Forces. Sheikh Mubarak was honored as a Young Global Leader in 2009 by the World Economic Forum, and in 2017 was bestowed with the honour of the Legion of Honor by French Government. Sheikh Mubarak has served on several boards of private and public companies and is currently also the chairman of Qurain Petrochemical Industries Company K.S.C., a public listed company. He also serves as a board member of EQUATE, Kuwait's first and largest international joint venture in the petrochemical sector and also serves on the board of Egypt Kuwait Holding Co which is listed on the Kuwait and Egyptian stock exchanges.

   8.               Information on Action Hotels

Action Hotels is a leading owner, developer and asset manager of branded three and four star hotels in the Middle East and Australia. Established in 2005, Action Hotels currently has 14 completed hotels with 2,623 rooms in aggregate across the Middle East and Australia, with further properties in development in the Middle East.

   9.               Action Hotels Equity Incentives

The applicable exercise prices of the Action Hotels Equity Incentives are significantly higher than the Offer Price and as the see through value is therefore negative, none of the participants are expected to elect to exercise. In accordance with paragraph 2.4, of the Panel's practice statement 24 no Rule 15 offer or proposal will be made to such participants. This will be communicated in due course to participants of the Action Hotels Equity Incentives on or as soon as practicable following publication of the Scheme Document.

Notwithstanding the above, any Action Hotels Shares issued prior to the Scheme Record Time will be subject to the Scheme. The Scheme will not extend to Action Hotels Shares issued on or after the Scheme Record Time. However, an amendment to Action Hotels' articles of association is to be proposed at the General Meeting (and which will be set out in the notice of General Meeting in the Scheme Document) to the effect that Action Hotels Shares issued on or after the Scheme Record Time would be automatically transferred to Action Real Estate in consideration for the payment of such cash consideration as would have been payable under the Scheme had such Action Hotels Shares been Scheme Shares.

   10.             Financing

The cash consideration payable by Action Real Estate to Action Hotels Shareholders under the Offer will be financed from Action Real Estate's existing cash resources.

finnCap Ltd, as financial adviser to Action Real Estate, is satisfied that the necessary financial resources are available to Action Real Estate to satisfy the cash consideration in full under the terms of the Offer. Full implementation of the Offer would result in cash consideration of GBP9,537,865.20 in aggregate being payable by Action Real Estate to Action Hotels Shareholders.

   11.             Structure of the Offer

Scheme

It is intended that the Offer will be effected by means of a Court-approved scheme of arrangement between Action Hotels and Action Hotels Shareholders pursuant to Article 125 of the Jersey Companies Law.

The purpose of the Scheme is to provide for the Wider AGH Group and the Family Concert Party to hold the entire issued and to be issued ordinary share capital of Action Hotels. This is to be achieved by the transfer of all Action Hotels Shares not being Excluded Shares to Action Real Estate, in consideration for which the Action Hotels Shareholders will receive cash consideration on the basis set out in paragraph 2 of this Announcement.

Approval by Court Meeting and General Meeting

To become Effective, the Scheme requires, among other things, the approval of a majority in number of the Action Hotels Shareholders (other than the Excluded Shareholders and Rawaf I. Bourisli) voting at the Court Meeting, either in person or by proxy, representing not less than 3/4ths of the voting rights of the Action Hotels Shares voted. The implementation of the Scheme also requires the passing at the Action Hotels General Meeting of the resolutions by the requisite majority of the Action Hotels Shareholders.

Application to Court to sanction the Scheme

Once the necessary approvals from Action Hotels Shareholders have been obtained and the other Conditions have been satisfied or (where applicable) waived, it is necessary for the Scheme to be sanctioned by the Court.

The Scheme will then become effective upon delivery of the Court Order sanctioning the Scheme to the Registrar of Companies for registration. Upon the Scheme becoming effective, it will be binding on all Action Hotels Shareholders (other than the Excluded Shareholders), irrespective of whether or not they attended or voted at the Court Meeting or the Action Hotels General Meeting.

Lapsing of the Offer

The Offer will lapse if:

(a) the Court Meeting and the Action Hotels General Meeting are not held by the 22(nd) day after the expected date of such meetings as set out in the Scheme Document in due course (or such later date as may be agreed between Action Real Estate and Action Hotels and the Court may allow);

(b) the Court hearing to approve the Scheme is not held by the 22(nd) day after the expected date of such hearing as set out in the Scheme Document (or such later date as may be agreed between Action Real Estate and Action Hotels); or

(c) the Scheme does not become Effective by 11.59 p.m. on the Long Stop Date (or such later date as may be agreed between Action Real Estate and Action Hotels and the Court may allow),

provided however that the deadlines for the timing of the Court Meeting, the Action Hotels General Meeting and the Court hearing to approve the Scheme as set out above may be waived by Action Real Estate, and the deadline for the Scheme to become effective may be extended by agreement between Action Hotels and Action Real Estate subject to the approval of the Court to the same.

Full details of the Scheme to be set out in the Scheme Document

Full details of the Scheme, including an indicative timetable for its implementation, together with the explanatory statement required pursuant to Article 126 of the Jersey Companies Law will be set out in the Scheme Document. The Scheme Document will specify the necessary actions to be taken by Action Hotels Shareholders. Together with the Forms of Proxy, the Scheme Document is expected to be despatched to Action Hotels Shareholders as soon as practicable and, in any event, (save with the consent of the Panel) within 28 days of this Announcement.

The Scheme Document and Forms of Proxy will be made available to all Action Hotels Shareholders at no charge to them.

Right to switch to a takeover offer

Action Real Estate reserves the right to elect (with the consent of the Panel) to implement the Offer by way of a takeover offer that constitutes a "takeover offer" as defined in Article 116(1) of the Jersey Companies Law. In such event, the takeover offer will be implemented on substantially the same terms subject to appropriate amendments, including (without limitation) an acceptance condition set at 90 per cent. (or such less percentage, being more than 50 per cent., as Action Real Estate may decide) of the shares to which such offer relates, so far as applicable, as those which would apply to the Scheme.

   12.             Conditions to the Offer

The Offer will be subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Scheme Document, and the Scheme will only become Effective if, amongst other things, the following events occur on or before Long Stop Date, or such later date as Action Real Estate and Action Hotels agree and the Court may approve:

(a) (i) its approval by a majority in number representing not less than 3/4ths of the voting rights of Scheme Shareholders (other than the Excluded Shareholders and Rawaf I. Bourisli) who are on the register of members of Action Hotels at the Voting Record Time present and voting, whether in person or by proxy, at the Court Meeting and at any separate class meeting which may be required (or any adjournments thereof); and (ii) such Court Meeting being held on or before the 22nd day after the expected date of the Court Meeting to be set out in the Scheme Document in due course (or such later date as may be agreed between Action Real Estate and Action Hotels and the Court may allow);

(b) (i) the resolutions required to implement the Scheme as set out in the notice convening the Action Hotels General Meeting being duly passed by the requisite majority of Action Hotels Shareholders required to pass such resolutions at the Action Hotels General Meeting; and (ii) the Action Hotels General Meeting being held on or before the 22(nd) day after the expected date of the Action Hotels General Meeting to be set out in the Scheme Document in due course (or such later date as may be agreed between Action Real Estate and Action Hotels and the Court may allow); and

(c) (i) the sanction of the Scheme by the Court (with or without modification but subject to any modification being on terms acceptable to Action Real Estate and Action Hotels) and the delivery of the Court Order for registration to the Registrar of Companies; and (ii) the Court hearing to sanction the Scheme being held on or before the 22nd day after the expected date of the Court sanction hearing to be set out in the Scheme Document in due course (or such later date as may be agreed between Action Real Estate and Action Hotels and the Court may allow).

   13.             Intentions with regard to the business, employees and assets of Action Hotels

Action Real Estate is confident in the long term prospects for Action Hotels and is committed to driving growth of the business over the long term. Action Real Estate believes that Action Hotels and its stakeholders will benefit from the opportunities that Action Real Estate believes will follow for Action Hotels in private ownership as part of the Wider AGH Group.

Action Real Estate highly values and wishes to retain the employees and management of Action Hotels and intends, following the Scheme becoming Effective, that the existing employment rights (including pension rights) of all management and employees of Action Hotels shall be fully safeguarded in accordance with contractual and statutory requirements. Accordingly, Action Real Estate has no intention to make material changes regarding the continuing employment, balance of skills and functions, and places of business of Action Hotels' employees and management.

Similarly, Action Real Estate does not intend to make any material changes to the existing agreed pension contributions for existing members of, or admission of new members to, Action Hotels' defined pension plan as a consequence of the Scheme becoming Effective.

Following the Scheme becoming Effective, Action Real Estate intends to review the ownership and financing structure of each of Action Hotels' fixed assets with a view to ensuring that these are as efficient as possible in generating returns. Action Real Estate is aware that Action Hotels is in the process of restructuring its assets and financing arrangements in Australia and, furthermore, is particularly mindful that Action Hotels has assets in the Gulf Cooperation Council region, which is facing challenges and which may require mitigating actions to be taken. Action Real Estate intends to focus on achieving operational efficiencies (for the avoidance of doubt, not including any intention to reduce headcount), increasing hotel occupancy rates by investment in marketing and advertising initiatives, and exploring whether, on an individual asset level, there is potential for achieving a more optimal corporate finance structure.

It may be strategically and financially advisable to transfer certain property investment assets from Action Hotels to Action Real Estate. Further analysis and consultation is necessary in this regard and it is expected that this will only be possible over time following the Scheme becoming Effective and after discussion with the management of Action Hotels and other Wider AGH Group companies.

Action Real Estate will also reassess Action Hotels' existing plans for its pipeline of development projects under construction, and in some cases, will alter the timing and level of investment made in these.

Although Action Real Estate may consider changing Action Hotels' registered office in Jersey to a different address, it does not intend that the Action Hotels' headquarters or headquarter functions would be relocated to an area outside the Dubai International Finance Centre. Any change to the registered office address is unlikely to have any effect on employment.

Action Real Estate no longer considers that there are compelling advantages to Action Hotels' continued trading on AIM. Action Real Estate has therefore requested that, in parallel with the Scheme, an application be made by Action Hotels to the London Stock Exchange to cancel admission to trading of the Action Hotels Shares and subsequently to reregister it as a private company even if the Scheme does not ultimately become Effective. Action Real Estate believes that this will save the costs incurred of trading on AIM, which may involve some employment roles connected with such trading becoming redundant, and give Action Hotels the exibility to make more signi cant changes to its strategy, nancing and structure than may be possible with the constraints and reporting obligations associated with a publicly traded company.

Given the nature of Action Hotels' business, it does not have a separate research and development function.

The Scheme is not expected to materially affect either AGH or Action Real Estate, including in relation to their respective businesses, employees, management, places of business or headquarter functions save to the extent referred to above.

   14.             De-listing and re-registration

Prior to the Scheme becoming Effective, Action Hotels will make an application for the cancellation of trading of Action Hotels Shares on AIM to take effect from or shortly after the Effective Date. The last day of dealings in Action Hotels Shares on AIM is expected to be the Business Day immediately prior to the Effective Date and no transfers will be registered after 6.00 pm on that date.

On the Effective Date, share certificates in respect of Action Hotels Shares will cease to be valid and entitlements to Action Hotels Shares held within the CREST system will be cancelled.

It is proposed that, following the Effective Date and after its shares are delisted, Action Hotels will be re-registered as a private limited company under the relevant provisions of the Jersey Companies Law.

   15.             Dividends

   16.             Disclosure of Interests in Action Hotels

Action Real Estate confirms that it made an Opening Position Disclosure setting out the details required to be disclosed by it under Rule 8.1(a) of the Takeover Code on 12 July 2018. As noted in the Opening Position Disclosure, AGH has granted a call option over 4,763,719.52 Action Hotels Shares to Blakeney Funds pursuant to the Blakeney Option Deed and as described in the Admission Document.

As at the close of business on 2 August 2018 (being the last practicable date prior to the date of this Announcement), save in respect of the irrevocable undertakings referred to in paragraph 6 and as disclosed below, none of AGH, Action Real Estate, or the Family Concert Party or any of their directors, or, so far as AGH or Action Real Estate are aware, any person acting in concert (within the meaning of the Takeover Code) with it has: (i) any interest in or right to subscribe for any relevant securities of Action Hotels; nor (ii) any short positions in respect of relevant Action Hotels Shares (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery; nor (iii) borrowed or lent any relevant Action Hotels Shares (including, for these purposes, any financial collateral arrangements of the kind referred to in Note 4 on Rule 4.6 of the Takeover Code), save for any borrowed shares which had been either

on-lent or sold; nor (iv) entered into any dealing arrangement of the kind referred to in Note 11 of the definition of 'acting in concert' in the Takeover Code in relation to relevant securities of Action Hotels.

 
 Name                  Nature of interest    Number of relevant   Short position 
                                              securities held      in respect of 
                                              in Action Hotels     relevant securities 
                                                                   held in Action 
                                                                   Hotels 
 Sheikh Mubarak A      Action Hotels 
  M Al Sabah            Shares                        1,724,968 
                      --------------------  -------------------  --------------------- 
                       Action Hotels 
 Rawaf I. Bourisli      Shares                        1,043,384 
                      --------------------  -------------------  --------------------- 
 H E Dr Souad M S      Action Hotels 
  Al Sabah              Shares                          870,011 
                      --------------------  -------------------  --------------------- 
 Action Real Estate 
  together with its 
  parent company,      Action Hotels 
  AGH                   Shares                      105,301,111           4,763,719.52 
                      --------------------  -------------------  ---------------------

'Interests in securities' for these purposes arise, in summary, when a person has long economic exposure, whether absolute or conditional, to changes in the price of securities (and a person who only has a short position in securities is not treated as interested in those securities). In particular, a person will be treated as having an 'interest' by virtue of the ownership, voting rights or control of securities, or by virtue of any agreement to purchase, option in respect of, or derivative referenced to, securities.

   17.             General

The Offer will be made subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Scheme Document. The bases and sources of certain financial information contained in this Announcement are set out in Appendix II to this Announcement. A summary of the irrevocable undertakings is contained in Appendix III to this Announcement.

finnCap Ltd and WH Ireland Limited have each given and not withdrawn their consent to the publication of this Announcement with the inclusion herein of the references to their names in the form and context in which they appear.

   18.             Documents available on website

The Scheme Document, which will contain further information about the Offer together with the explanatory statement required pursuant to Article 126 of the Jersey Company Law and the notices convening the Court Meeting and the General Meeting. The Scheme Document will also contain the expected timetable for the Offer and will specify the necessary actions to be taken by the Action Hotels Shareholders. The Scheme Document will be published in due course (and, in any event, within 28 days of this Announcement, subject to the availability of the Court to approve the Scheme Document for posting) and will be made available by AGH on its website at www.actionkuwait.com and by Action Hotels on its website at www.actionhotels.com.

A copy of this Announcement will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on AGH's website at www.actionkuwait.com and Action Hotels' website at www.actionhotels.com by no later than 12 noon (London time) on the Business Day following this Announcement. The contents of those websites are not incorporated and do not form part of this Announcement.

Copies of the following documents will be made available on AGH's and Action Hotels' websites at www.actionkuwait.com and www.actionhotels.com respectively until the end of the Offer:

   (a)          the irrevocable undertakings referred to in paragraph 6; and

(b) the written consents of each of finnCap Ltd and WH Ireland Limited referred to in paragraph 17.

For more information contact:

Action Hotels plc Tel: +44 (0) 20 7907 9663

Andrew Lindley, Chief Financial Officer

Katie Shelton, Director of Corporate Affairs

WH Ireland Limited (Financial Adviser to Action Hotels) Tel: +44 (0) 20 7220 1666

Adrian Hadden

Jessica Cave

Alex Bond

Action Real Estate Co KSCC c/o finnCap: as below

Vikas Arora, Chief Financial Officer

finnCap Ltd (Financial Adviser to AGH and Action Real Estate) Tel: +44 (0) 20 7220 0500

Henrik Persson

Simon Hicks

Max Bullen-Smith

Travers Smith LLP and Carey Olsen are retained legal advisers to AGH and Action Real Estate. K&L Gates LLP and Ogier are retained as legal advisers as to Action Hotels.

Disclaimers

IMPORTANT NOTICE

Overseas jurisdictions

Forward-looking statements

No profit forecasts or estimates

Dealing disclosure requirements of the Takeover Code

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Publication of this Announcement on website

Electronic communications

Right to receive documents in hard copy form

Rounding

Rule 2.9

APPIX I

CONDITIONS AND CERTAIN FURTHER TERMS OF THE OFFER

PART A: CONDITIONS OF THE SCHEME

1. The Offer is conditional upon the Scheme becoming unconditional (with all other conditions being fulfilled or, if capable of waiver, waived) and being Effective, subject to the Takeover Code, by no later than the Long Stop Date or such later date as may be agreed by Action Real Estate and Action Hotels and the Panel (if required) and the Court may allow.

   2.               The Scheme will be subject to the following conditions:

2.1 its approval by a majority in number representing not less than 3/4ths of the voting rights of Scheme Shareholders (other than the Excluded Shareholders) who are on the register of members of Action Hotels at the Voting Record Time, present and voting, whether in person or by proxy, at the Court Meeting and any separate class meeting which may be required (or any adjournments thereof);

2.2 such Court Meeting being held on or before the 22(nd) day after the expected date of the Court Meeting to be set out in the Scheme Document in due course (or such later date as may be agreed by Action Real Estate and Action Hotels and the Court may allow);

2.3 the resolutions required to implement the Scheme as set out in the notice convening the Action Hotels General Meeting being duly passed by the requisite majority of Action Hotels Shareholders required to pass such resolutions at the Action Hotels General Meeting;

2.4 the Action Hotels General Meeting being held on or before the 22(nd) day after the expected date of the Action Hotels General Meeting as set out in the Scheme Document in due course (or such later date as may be agreed by Action Real Estate and Action Hotels and the Court may allow);

2.5 the sanction of the Scheme by the Court (with or without modification but subject to any modification being on terms acceptable to Action Hotels and Action Real Estate) and the delivery of the Scheme Court Order for registration to the Registrar of Companies; and

2.6 the Court hearing to sanction the Scheme being held on or before the 22(nd) day after the expected date of the Court sanction hearing as set out in the Scheme Document in due course (or such later date as may be agreed by Action Real Estate and Action Hotels and the Court may allow).

3. In addition, Action Real Estate and Action Hotels have agreed that, subject as stated in Part B below, and to the requirements of the Takeover Code, the Offer will be conditional upon the following conditions and, accordingly, the Scheme Court Order will not be delivered to the Registrar of Companies unless such Conditions (as amended if appropriate) have been satisfied or, where capable of waiver, waived:

Notifications, waiting periods and Authorisations

3.1 all material notifications, filings or applications which are necessary or considered appropriate or desirable by Action Real Estate (acting reasonably) having been made in connection with the Offer and all necessary waiting periods (including any extensions thereof) under any applicable legislation or regulation of any jurisdiction having expired, lapsed or been terminated (as appropriate) and all statutory and regulatory obligations in any jurisdiction having been complied with in each case in respect of the Offer and its implementation and all Authorisations necessary or appropriate for or in respect of the Offer having been obtained in terms and in a form reasonably satisfactory to Action Real Estate from all appropriate Third Parties or (without prejudice to the generality of the foregoing) from any person or bodies with whom any member of the Wider Action Hotels Group or the Wider AGH Group has entered into contractual arrangements and all such Authorisations necessary, appropriate or desirable to carry on the business of any member of the Wider Action Hotels Group in any jurisdiction having been obtained and all such Authorisations remaining in full force and effect at the time at which the Offer becomes otherwise wholly unconditional and there being no notice or intimation of an intention to revoke, suspend, restrict, modify or not to renew such Authorisations;

General antitrust and regulatory

3.2 no antitrust regulator or Third Party having given notice of a decision to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference (and in each case, not having withdrawn the same), or having required any action to be taken or otherwise having done anything, or having enacted, made or proposed any statute, regulation, decision, order or change to published practice (and in each case, not having withdrawn the same) and there not continuing to be outstanding any statute, regulation, decision or order which would or might reasonably be expected to:

3.2.1 require, prevent or materially delay the divestiture or materially alter the terms envisaged for such divestiture by any member of the Wider AGH Group or by any member of the Wider Action Hotels Group of all or any material part of its businesses, assets or property or impose any limitation on the ability of all or any of them to conduct their businesses (or any part thereof) or to own, control or manage any of their assets or properties (or any part thereof);

3.2.2 require any member of the Wider AGH Group or the Wider Action Hotels Group to acquire or offer to acquire any shares, other securities (or the equivalent) or interest in any member of the Wider Action Hotels Group or any asset owned by any Third Party (other than in the implementation of the Offer);

3.2.3 impose any material limitation on, or result in a delay in, the ability of any member of the Wider AGH Group directly or indirectly to acquire, hold or to exercise effectively all or any rights of ownership in respect of shares or other securities in Action Hotels or on the ability of any member of the Wider Action Hotels Group or any member of the Wider AGH Group directly or indirectly to hold or exercise effectively all or any rights of ownership in respect of shares or other securities (or the equivalent) in, or to exercise voting or management control over, any member of the Wider Action Hotels Group to an extent which is material in the context of the Wider Action Hotels Group taken as a whole or the Wider AGH Group taken as a whole or material in the context of the Offer (as the case may be);

3.2.4 otherwise materially adversely affect any or all of the business, assets, profits or prospects of any member of the Wider Action Hotels Group or any member of the Wider AGH Group;

3.2.5 result in any member of the Wider Action Hotels Group or any member of the Wider AGH Group ceasing to be able to carry on business under any name under which it presently carries on business to an extent which is material in the context of the Wider Action Hotels Group taken as a whole or the Wider AGH Group taken as a whole or material in the context of the Offer (as the case may be);

3.2.6 make the Offer, its implementation or the offer or proposed offer of any shares or other securities in, or control or management of, Action Hotels by any member of the Wider AGH Group void, unenforceable and/or illegal under the laws of any relevant jurisdiction, or otherwise, directly or indirectly prevent or prohibit, restrict, restrain, or delay or otherwise materially interfere with the implementation of, or impose additional materially adverse conditions or obligations with respect to, or otherwise challenge, impede, interfere or require material amendment of the Offer or the offer or proposed offer of any shares or other securities in, or control or management of, Action Hotels by any member of the Wider AGH Group;

3.2.7 require, prevent or materially delay a divestiture by any member of the Wider AGH Group of any shares or other securities (or the equivalent) in any member of the Wider Action Hotels Group or any member of the Wider AGH Group; or

3.2.8 impose any limitation on the ability of any member of the Wider AGH Group or any member of the Wider Action Hotels Group to conduct, integrate or co-ordinate all or any part of its business with all or any part of the business of any other member of the Wider AGH Group and/or the Wider Action Hotels Group in a manner which is materially adverse to the Wider AGH Group taken as a whole or the Wider Action Hotels Group taken as a whole or material in the context of the Offer (as the case may be),

3.3 and all applicable waiting and other time periods (including any extensions thereof) during which any such antitrust regulator or Third Party could decide to take, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference or take any other step under the laws of any jurisdiction in respect of the Offer or the offer or proposed offer of any Action Hotels Shares or otherwise intervene having expired, lapsed or been terminated;

Certain matters arising as a result of any arrangement, agreement, etc.

3.4 except as Disclosed, there being no provision of any arrangement, agreement, lease, licence, franchise, permit or other instrument to which any member of the Wider Action Hotels Group is a party or by or to which any such member or any of its assets is or may be bound, entitled or subject to or any event or circumstance which, as a consequence of the Offer or the offer or the proposed offer by any member of the Wider AGH Group of any shares or other securities (or the equivalent) in Action Hotels or because of a change in the control or management of any member of the Wider Action Hotels Group or otherwise, would or might reasonably be expect to result in:

3.4.1 any monies borrowed by, or any other indebtedness, actual or contingent, of, or any grant available to, any member of the Wider Action Hotels Group being or becoming repayable, or capable of being declared repayable, immediately or prior to its or their stated maturity date or repayment date, or the ability of any such member to borrow monies or incur any indebtedness being withdrawn or inhibited or being capable of becoming or being withdrawn or inhibited;

3.4.2 the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of any member of the Wider Action Hotels Group or any such mortgage, charge or other security interest (whenever created, arising or having arisen) being enforced or becoming enforceable;

3.4.3 any such arrangement, agreement, lease, licence, franchise, permit or other instrument being terminated or becoming capable of being terminated or adversely modified or the rights, liabilities, obligations or interests of any member of the Wider Action Hotels Group being adversely modified or adversely affected or any obligation or liability arising or any adverse action being taken or arising thereunder;

3.4.4 any liability of any member of the Wider Action Hotels Group to make any severance, termination, bonus or other payment to any of its directors, or other officers;

3.4.5 the rights, liabilities, obligations, interests or business of any member of the Wider Action Hotels Group or any member of the Wider AGH Group under any such arrangement, agreement, licence, permit, lease or instrument or the interests or business of any member of the Wider Action Hotels Group or any member of the Wider AGH Group in or with any other person or body or firm or company (or any arrangement or arrangement relating to any such interests or business) being or becoming capable of being terminated, or adversely modified or affected or any onerous obligation or liability arising or any adverse action being taken thereunder;

3.4.6 any member of the Wider Action Hotels Group ceasing to be able to carry on business under any name under which it presently carries on business;

3.4.7 the value of, or the financial or trading position or prospects of, any member of the Wider Action Hotels Group being prejudiced or adversely affected; or

3.4.8 the creation or acceleration of any liability (actual or contingent) by any member of the Wider Action Hotels Group,

which in each case is or would be material in the context of the Wider Action Hotels Group taken as a whole or material in the context of the Offer, and no event having occurred which, under any provision of any arrangement, agreement, licence, permit, franchise, lease or other instrument to which any member of the Wider Action Hotels Group is a party or by or to which any such member or any of its assets are bound, entitled or subject, would or might result in any of the events or circumstances as are referred to in Conditions 3.4.1 to 3.4.8;

Action Hotels Shareholder resolution

3.5 except as Disclosed, no resolution of Action Hotels Shareholders in relation to any offer or disposal of assets or shares (or the equivalent thereof) in any undertaking or undertakings (or in relation to any merger, demerger, reconstruction, amalgamation or scheme) being passed at a meeting of Action Hotels Shareholders;

Certain events occurring since 31 December 2017

3.6 except as Disclosed, no member of the Wider Action Hotels Group having since 31 December 2017:

3.6.1 issued or agreed to issue or authorised or proposed or announced its intention to authorise or propose the issue, of additional shares of any class, or securities or securities convertible into, or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares, securities or convertible securities or transferred or sold or agreed to transfer or sell or authorised or proposed the transfer or sale of Action Hotels Shares out of treasury (except, where relevant, as between Action Hotels and wholly-owned subsidiaries of Action Hotels or between the wholly-owned subsidiaries of Action Hotels and except for the issue or transfer out of treasury of Action Hotels Shares on the exercise of employee share options or vesting of employee share awards in the ordinary course under the Action Hotels Employee Share Plans);

3.6.2 recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus, dividend or other distribution (whether payable in cash or otherwise) other than dividends (or other distributions whether payable in cash or otherwise) lawfully paid or made by any wholly-owned subsidiary of Action Hotels to Action Hotels or any of its wholly-owned subsidiaries;

3.6.3 other than pursuant to the Offer (and except for transactions between Action Hotels and its wholly-owned subsidiaries or between the wholly-owned subsidiaries of Action Hotels and transactions in the ordinary course of business) implemented, effected, authorised or proposed or announced its intention to implement, effect, authorise or propose any merger, demerger, reconstruction, amalgamation, scheme, commitment or offer or disposal of assets or shares or loan capital (or the equivalent thereof);

3.6.4 except for transactions between Action Hotels and its wholly-owned subsidiaries or between the wholly-owned subsidiaries of Action Hotels and except for transactions in the ordinary course of business disposed of, or transferred, mortgaged or created any security interest over any material asset or any right, title or interest in any asset or authorised, proposed or announced any intention to do so;

3.6.5 (except for transactions between Action Hotels and its wholly-owned subsidiaries or between the wholly-owned subsidiaries of Action Hotels) issued, authorised or proposed or announced an intention to authorise or propose, the issue of or made any change in or to the terms of any debentures or become subject to any contingent liability or incurred or increased any indebtedness, which is material in the context of the Wider Action Hotels Group taken as a whole or is material in the context of the Offer;

3.6.6 entered into or varied or authorised, proposed or announced its intention to enter into or vary any contract, arrangement, agreement, transaction or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, unusual or onerous nature or magnitude or which is or which involves or could involve an obligation of a nature or magnitude which is reasonably likely to be restrictive on the business of any member of the Wider Action Hotels Group;

3.6.7 entered into or varied the terms of, or made any offer (which remains open for acceptance) to enter into or vary the terms of any contract, service agreement, commitment or arrangement with any director or, except for salary increases, bonuses or variations of terms in the ordinary course, senior executive of any member of the Wider Action Hotels Group;

3.6.8 proposed, agreed to provide or modified the terms of any share option scheme, incentive scheme or other benefit relating to the employment or termination of employment of any employee of the Wider Action Hotels Group;

3.6.9 purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares or other securities or reduced or, except in respect of the matters mentioned in Condition 3.6.1, made any other change to any part of its share capital;

3.6.10 except in the ordinary course of business, waived, compromised or settled any claim;

3.6.11 terminated or varied the terms of any agreement or arrangement between any member of the Wider Action Hotels Group and any other person in a manner which would or might reasonably be expected to have a material adverse effect on the financial position of the Wider Action Hotels Group taken as a whole;

3.6.12 made any alteration to its memorandum or articles of association or other incorporation documents;

3.6.13 except in relation to changes made or agreed as a result of, or arising from, changes to legislation, made or agreed or consented to any change to:

(a) the terms of the trust deeds and rules constituting the pension scheme(s) established by any member of the Wider Action Hotels Group for its directors, employees or their dependants;

(b) the contributions payable to any such scheme(s) or to the benefits which accrue, or to the pensions which are payable, thereunder;

(c) the basis on which qualification for, or accrual or entitlement to, such benefits or pensions are calculated or determined; or

(d) the basis upon which the liabilities (including pensions) of such pension schemes are funded, valued, made, agreed or consented to;

3.6.14 been unable, or admitted in writing that it is unable, to pay its debts or commenced negotiations with one or more of its creditors with a view to rescheduling or restructuring any of its indebtedness, 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;

3.6.15 taken or proposed any steps, corporate action or had any legal proceedings instituted or threatened against it in relation to the suspension of payments, a moratorium of any indebtedness, its winding-up (voluntary or otherwise), dissolution, reorganisation or for the appointment of a receiver, administrator, manager, administrative receiver, trustee or similar officer of all or any of its assets or revenues or any analogous or equivalent steps or proceedings in any jurisdiction or appointed any analogous person in any jurisdiction or had any such person appointed;

3.6.16 (except for transactions between Action Hotels and its wholly-owned subsidiaries or between the wholly-owned subsidiaries), made, authorised, proposed or announced an intention to propose any change in its loan capital;

3.6.17 entered into, implemented or authorised the entry into, any joint venture, asset or profit sharing arrangement, partnership or merger of business or corporate entities; or

3.6.18 entered into any agreement, arrangement, commitment or contract or passed any resolution or made any offer (which remains open for acceptance) with respect to or announced an intention to, or to propose to, effect any of the transactions, matters or events referred to in this Condition 3.6;

No adverse change, litigation, regulatory enquiry or similar

   3.7             except as Disclosed, since 31 December 2017 there having been:

3.7.1 no adverse change and no circumstance having arisen which would or might be expected to result in any adverse change in, the business, assets, financial or trading position or profits or prospects or operational performance of any member of the Wider Action Hotels Group which is material in the context of the Wider Action Hotels Group taken as a whole or is material in the context of the Offer;

3.7.2 no litigation, arbitration proceedings, prosecution or other legal proceedings having been threatened, announced or instituted by or against or remaining outstanding against or in respect of, any member of the Wider Action Hotels Group or to which any member of the Wider Action Hotels Group is or may become a party (whether as claimant, defendant or otherwise) having been threatened, announced, instituted or remaining outstanding by, against or in respect of, any member of the Wider Action Hotels Group, in each case which is or might reasonably be expected to be material in the context of the Wider Action Hotels Group taken as a whole or is material in the context of the Offer;

3.7.3 no enquiry, review or investigation by, or complaint or reference to, any Third Party against or in respect of any member of the Wider Action Hotels Group having been threatened, announced or instituted or remaining outstanding by, against or in respect of any member of the Wider Action Hotels Group, in each case which might reasonably be expected to have a material adverse effect on the Wider Action Hotels Group taken as a whole or is material in the context of the Offer;

3.7.4 no contingent or other liability having arisen or become apparent to Action Real Estate or increased which is reasonably likely to affect adversely the business, assets, financial or trading position or profits or prospects of any member of the Wider Action Hotels Group to an extent which is material in the context of the Wider Action Hotels Group taken as a whole or is material in the context of the Offer; and

3.7.5 no steps having been taken and no omissions having been made which are reasonably likely to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the Wider Action Hotels Group which is necessary for the proper carrying on of its business and the withdrawal, cancellation, termination or modification of which might reasonably be expected to have a material adverse effect on the Wider Action Hotels Group taken as a whole or is material in the context of the Offer;

No discovery of certain matters regarding information, liabilities and environmental issues

   3.8             except as Disclosed, Action Real Estate not having discovered:

3.8.1 that any financial, business or other information concerning the Wider Action Hotels Group publicly announced prior to the date of the Announcement or disclosed at any time to any member of the Wider AGH Group by or on behalf of any member of the Wider Action Hotels Group prior to the date of the Announcement is misleading, contains a material misrepresentation of any fact, or omits to state a fact necessary to make that information not misleading;

3.8.2 that any member of the Wider Action Hotels Group or any partnership, company or other entity in which any member of the Wider Action Hotels Group has a significant economic interest and which is not a subsidiary undertaking of Action Hotels is subject to any liability, contingent or otherwise which is material in the context of the Wider Action Hotels Group taken as a whole or material in the context of the Offer;

3.8.3 that any past or present member of the Wider Action Hotels Group has not complied with all applicable legislation, regulations or other requirements of any jurisdiction or any Authorisations relating to the use, treatment, storage, carriage, disposal, discharge, spillage, release, leak or emission of any waste or hazardous substance or any substance likely to impair the environment (including property) or harm human or animal health or otherwise relating to environmental matters or the health and safety of humans, which non-compliance would be likely to give rise to any material liability including any penalty for non-compliance (whether actual or contingent) on the part of any member of the Wider Action Hotels Group, in each case to an extent which is material in the context of the Wider Action Hotels Group taken as a whole or material in the context of the Offer;

3.8.4 that there has been a disposal, discharge, spillage, accumulation, release, leak, emission or the migration, production, supply, treatment, storage, transport or use of any waste or hazardous substance or any substance likely to impair the environment (including any property) or harm human or animal health which (whether or not giving rise to non-compliance with any law or regulation), would be likely to give rise to any material liability (whether actual or contingent) on the part of any member of the Wider Action Hotels Group, in each case to an extent which is material in the context of the Wider Action Hotels Group taken as a whole or material in the context of the Offer;

3.8.5 that there is or is reasonably likely to be any obligation or liability (whether actual or contingent) or requirement to make good, remediate, repair, reinstate or clean up any property, asset or any controlled waters currently or previously owned, occupied, operated or made use of or controlled by any past or present member of the Wider Action Hotels Group (or on its behalf), or in which any such member may have or previously have had or be deemed to have had an interest, under any environmental legislation, common law, regulation, notice, circular, Authorisation or order of any Third Party in any jurisdiction or to contribute to the cost thereof or associated therewith or indemnify any person in relation thereto; or

3.8.6 that circumstances exist (whether as a result of making the Offer or otherwise) which would be reasonably likely to lead to any Third Party instituting (or whereby any member of the Wider Action Hotels Group would be likely to be required to institute), an environmental audit or take any steps which would in any such case be reasonably likely to result in any actual or contingent liability to improve or install new plant or equipment or to make good, repair, reinstate or clean up any property of any description or any asset now or previously owned, occupied or made use of by any past or present member of the Wider Action Hotels Group (or on its behalf) or by any person for which a member of the Wider Action Hotels Group is or has been responsible, or in which any such member may have or previously have had or be deemed to have had an interest, which is material in the context of the Wider Action Hotels Group taken as a whole or material in the context of the Offer;

Anti-corruption and criminal property

3.9 any member of the Wider Action Hotels Group or any person that performs or has performed services for or on behalf of any such company is or has engaged in any activity, practice or conduct which would constitute an offence under the Bribery Act 2010 and/or the US Foreign Corrupt Practices Act of 1977, as amended or any other applicable anti-corruption legislation; or

3.10 any past or present member of the Wider Action Hotels Group has engaged in any activity or business with, or made any investments in, or made any payments to any government, entity or individual covered by any of the economic sanctions administered by the United Nations or the European Union (or any of their respective member states) or the United States Office of Foreign Assets Control or any other governments or supranational body or authority in any jurisdiction;

No criminal property

3.11 any asset of any member of the Wider Action Hotels Group constitutes criminal property as defined by section 340(3) of the Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that definition).

PART B: CERTAIN FURTHER TERMS OF THE OFFER

1. Subject to the requirements of the Panel, Action Real Estate reserves the right to waive:

1.1 any of the Conditions set out in Condition 2 of Part A of this Appendix I for the timing of the Court Meeting, General Meeting, the Court hearing to sanction the Scheme and the effectiveness of the Scheme. If any such deadline is not met, Action Real Estate will make an announcement by 8.00 am on the Business Day following such deadline confirming whether it has invoked or waived the relevant Condition or agreed with Action Hotels to extend the deadline in relation to the relevant Condition; and

1.2 in whole or in part, all or any of Conditions 3.1 to 3.11 (inclusive) of Part A of this Appendix I.

2. If Action Real Estate is required by the Panel to make an offer for Action Hotels Shares under the provisions of Rule 9 of the Takeover Code, Action Real Estate may make such alterations to any of the above Conditions and terms of the Offer as are necessary to comply with the provisions of that Rule.

   3.               The Offer will lapse if (unless otherwise agreed with the Panel):

3.1 insofar as the Offer or any matter arising from or relating to the Offer constitutes a concentration with a Community dimension within the scope of the EU Merger Regulation, the European Commission either initiates proceedings under Article 6(1)(c) of the EU Merger Regulation or makes a referral to a competent authority in the United Kingdom under Article 4 or Article 9 of the EU Merger Regulation and there is then a CMA Phase 2 Reference in respect of the Offer;

3.2 in so far as the Offer or any matter arising from the Offer does not constitute a concentration with a Community dimension within the scope of the EU Merger Regulation, the European Commission decides to examine the Offer or any matter arising from it pursuant to Article 22(3) of the EU Merger Regulation and the European Commission initiates proceedings under Article 6(1)(c) of the EU Merger Regulation in respect of the Offer; or

3.3 the Competition and Markets Authority launches a merger inquiry and makes a CMA Phase 2 Reference in respect of the Offer,

in each case, before the date of the Court Meeting.

4. Under Rule 13.5 of the Takeover Code, Action Real Estate may not invoke a condition of the Scheme so as to cause the Offer not to proceed, to lapse or to be withdrawn unless the circumstances which give rise to the right to invoke the condition are of material significance to AGH in the context of the Offer. Whether or not such condition can be invoked would be determined by the Panel. The conditions contained in Conditions 1 and 2 of Part A of this Appendix I are not subject to this provision of the Takeover Code.

5. Action Real Estate will be under no obligation to waive (if capable of waiver), to determine, to be or remain satisfied or to treat as fulfilled any of Conditions 3.1 to 3.11 (inclusive) of Part A of this Appendix I by a date earlier than the latest date for the fulfilment of that Condition notwithstanding that the other Conditions of the Offer may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such Conditions may not be capable of fulfilment.

6. The Action Hotels Shares acquired under the Offer will be acquired fully paid and free from all liens, equities, charges, encumbrances, options, rights of pre-emption and any other third party rights and interests of any nature and together with all rights now or hereafter attaching or accruing to them, 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, or any other return of capital (whether by reduction of share capital or share premium account or otherwise) made, on or after 29 June 2018 (being the date of the announcement regarding a possible offer by AGH or an associate entity of AGH).

7. If, after 29 June 2018 (being the date of the announcement regarding a possible offer by AGH or an associate entity of AGH) but prior to the Effective Date any dividend or other distribution is declared, paid or made or becomes payable by Action Hotels, Action Real Estate reserves the right (without prejudice to any right of Action Real Estate, with the consent of the Panel, to invoke Condition 3.6.2 of Part A of this Appendix I) to reduce the consideration payable under the Offer by the aggregate amount of such dividend or distribution or excess, and accordingly reduce the Offer Price (excluding associated tax credit) as long as the Action Hotels Shareholders remain entitled to retain that dividend or other distribution. Furthermore, Action Real Estate reserves the right to reduce the consideration payable under the Offer in respect of a Action Hotels Share in such circumstances as are, and by such amount as is, permitted by the Panel.

8. If any such dividend or distribution occurs, any reference in this Announcement to the consideration payable or the Offer Price will be deemed to be a reference to the consideration or Offer Price as so reduced. If such reduction occurs, notwithstanding the terms on which the Action Hotels Shares are expressed to be acquired by Action Real Estate pursuant to the Offer, the Action Hotels Shares will be acquired by or on behalf of Action Real Estate pursuant to the Offer together with all rights now and hereafter attaching to such shares 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, or any other return of capital (whether by reduction of share capital or share premium account or otherwise) made, on or after 29 June 2018 (being the date of the announcement regarding a possible offer by AGH or an associate entity of AGH).

9. To the extent that such a dividend or distribution has been declared, paid, made or is payable is or will be: (i) transferred pursuant to the Offer on a basis which entitles Action Real Estate to receive the dividend or distribution and to retain it; or (ii) cancelled, the consideration payable and the Offer Price will not be subject to change in accordance with paragraphs 7 to 10.

10. Any exercise by Action Real Estate of its rights referred to in paragraphs 7 to 9 will be the subject of an announcement and, for the avoidance of doubt, will not be regarded as constituting any revision or variation of the Offer.

11. Action Real Estate reserves the right to elect (with the consent of the Panel) to implement the Offer by way of a takeover offer that constitutes a "takeover offer" as defined in Article 116(1) of the Jersey Companies Law, as it may determine in its absolute discretion. In such event, the takeover offer will be implemented on substantially the same terms subject to appropriate amendments, including (without limitation) an acceptance condition set at 90 per cent. (or such less percentage, being more than 50 per cent., as Action Real Estate may decide) of the shares to which such offer relates, so far as applicable, as those which would apply to the Scheme.

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

13. The Offer is not being made, directly or indirectly, in, into or from, or by use of the mails of, or by any means of instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of, any jurisdiction where to do so would violate the laws of that jurisdiction.

14. The Offer is governed by Jersey law and is subject to the jurisdiction of the Court and to the Conditions and further terms set out in this Appendix I. The Offer will be subject to the applicable requirements of the Takeover Code, the Panel, the London Stock Exchange, the Financial Conduct Authority and the UKLA.

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

APPIX II

SOURCES OF INFORMATION AND BASES OF CALCULATION

i. Unless otherwise stated, the financial information relating to Action Hotels is extracted from the audited consolidated financial statements of Action Hotels for the financial year ended 31 December 2017, prepared in accordance with International Financial Reporting Standards.

ii. The value placed by the Offer on the existing issued share capital of Action Hotels is based on 147,637,195 Action Hotels Shares in issue on 2 August 2018, being the last dealing day prior to the date of this Announcement.

iii. Average closing prices are derived from the closing middle market quotations derived from the Daily AIM List.

iv. Volume-weighted average prices have been derived from Bloomberg and have been rounded to the nearest single decimal place.

v. All share prices expressed in pence or pounds Sterling have been rounded to the nearest tenth of a penny and all percentages have been rounded to the nearest single decimal place.

APPIX III

DIRECTOR IRREVOCABLE UNDERTAKINGS

The following Action Hotels Directors have given irrevocable undertakings in respect of their own beneficial holdings (or those Action Hotels Shares over which they have control) of Action Hotels Shares:

 
 Name of Director         Number of Action Hotels   Percentage of 
                           Shares in respect of      existing issued 
                           which undertaking is      share capital 
                           given                     of Action Hotels 
 Stefan Allesch-Taylor                    144,925                 0.1 
                         ------------------------  ------------------ 
 Alain Debare                             430,374                 0.3 
                         ------------------------  ------------------ 
                  TOTAL                   575,659                 0.4 
                         ------------------------  ------------------

On 3 August 2018, each of the Action Hotels Directors listed above agreed by deed poll that their irrevocable undertaking will apply to the Offer by Action Real Estate.

The irrevocable undertakings include undertakings:

(a) to vote, or procure the vote, in favour (or to submit, or procure the submission of, Forms of Proxy voting in favour) of the Scheme at the Court Meeting and the resolutions to be proposed at the General Meeting necessary to implement the Scheme; and

(b) if Action Real Estate exercises its right to structure the Offer as a takeover offer that constitutes a "takeover offer" as defined in Article 116(1) of the Jersey Companies Law, to accept, or procure the acceptance of the takeover offer.

The irrevocable undertakings will lapse if:

(a) the Scheme Document in respect of the Scheme or offer document in respect of a takeover offer has not been posted within the period prescribed by the Takeover Code or such later date as may be agreed by the Panel; or

(b) where this Announcement indicates that the Offer is to be made by way of a Scheme, the Scheme lapses or is withdrawn or has not become Effective by 5.00 pm London time on the Long Stop Date and at or before the time of such lapse or withdrawal or within 1 Business Day thereafter, Action Real Estate has not publicly confirmed that it intends to implement a takeover offer; or

(c) where this Announcement indicates that the Offer is to be made by way of a takeover offer, the takeover offer lapses or is withdrawn without having become unconditional in all respects and at or before the time of such lapse or withdrawal or within 1 Business Day thereafter, Action Real Estate has not publicly confirmed that it intends to implement a Scheme; or

(d) the Offer has not been completed, either by the Scheme becoming Effective, or by the takeover offer having become or declared unconditional in all respects, by 5.00 pm London time on the date which is 180 days from the Announcement Date; or

(e) after the release of this Announcement, the Panel consents to Action Real Estate not proceeding with the Offer and Action Real Estate subsequently withdraws the Offer.

APPIX IV

DEFINITIONS

In this Announcement the following words and expressions have the following meanings unless the context requires otherwise:

   "Action Hotels"                                                              Action Hotels plc 
   "Action Hotels Directors"                                           the directors of Action Hotels

"Action Hotels General Meeting" the general meeting of Action Hotels Shareholders (including any adjournment thereof) to be convened in connection with the Scheme

"Action Hotels Equity Incentives" together (i) the option granted by Action Hotels to Alain Debare to acquire 4,429,116 Action Hotels Shares at an exercise price of 64 pence per Action Hotels Share, (ii) the option granted by Action Hotels to Katie Shelton to acquire 750,000 Action Hotels Shares at an exercise price of 74 pence per Action Hotels Share and (iii) the warrant issued by Action Hotels to Omada Investment Management Limited to subscribe for 3,690,930 Action Hotels Shares at an exercise price of 64 pence per Action Hotels Share

"Action Hotels Shareholders" the holders of Action Hotels Shares other than the Excluded Shareholders and Rawaf I. Bourisli

"Action Hotels Shares" the existing unconditionally allotted or issued and fully paid ordinary shares of 10 pence each in the capital of Action Hotels and any further such ordinary shares which are unconditionally allotted or issued before the Scheme becomes Effective

   "Action Real Estate"                                                     Action Real Estate Co KSCC

"AGH" Action Group Holdings Co KSCC

"Admission" the admission of the issued share capital of Action Hotels to trading on AIM on 23 December 2013

"Admission Document" the admission document issued in respect of the Admission and dated 17 December 2013

"AIM" the AIM Market of the London Stock Exchange

   "Announcement"                                                          this announcement 
   "Announcement Date"                                               the date of this Announcement

"Authorisations" regulatory authorisations, orders, recognitions, grants, consents, clearances, confirmations, certificates, licences, permissions or approvals

"Blakeney Option Deed" the call option deed between the Blakeney Funds and AGH dated 12 December 2013

"Business Day" a day (other than Saturdays, Sundays and public holidays in the UK) on which banks are open for business in the City of London and Jersey

"CMA Phase 2 Reference" a reference of the Offer to the chair of the Competition and Markets Authority for the constitution of a group under Schedule 4 to the Enterprise and Regulatory Reform Act 2013

"Companies Act" the Companies Act 2006, as amended

"Competition and Markets Authority" a UK statutory body established under the Enterprise and Regulatory Reform Act 2013

"Conditions" the conditions to the implementation of the Offer, as set out in Appendix I to this Announcement and to be set out in the Scheme Document

"Court" the Royal Court of Jersey

"Court Meeting" the meeting of Action Hotels Shareholders (other than the Excluded Shareholders and Rawaf I. Bourisli) to be convened pursuant to an order of the Court under Article 125(1) of the Jersey Companies Law for the purpose of considering and, if thought fit, approving the Scheme, including any adjournment thereof

"Court Order" the order of the Court sanctioning the Scheme under Article 125(2) of the Jersey Companies Law

"CREST" the system for the paperless settlement of trades in securities and the holding of uncertificated securities operated by Euroclear

"Dealing Disclosure" has the same meaning as in Rule 8 of the Takeover Code

"Disclosed" the information fairly disclosed by, or on behalf of Action Hotels, (i) in the annual report and accounts of Action Hotels for the financial year ended 31 December 2017 as announced on 29 June 2018; (ii) in any other announcement to a Regulatory Information Service by, or on behalf of Action Hotels prior to the publication of this Announcement; (iii) in any of the documents, papers or written information provided by Action Hotels or its advisers

"Effective" in the context of the Offer (i) if the Offer is implemented by way of a Scheme, the Scheme having become effective in accordance with its terms, upon the delivery of the Court Order to the Registrar of Companies for registration; or (ii) if the Offer is implemented by way of a takeover offer that constitutes a "takeover offer" as defined in Article 116(1) of the Jersey Companies Law, the takeover offer having been declared or become unconditional in all respects in accordance with the requirements of the Takeover Code

"Effective Date" the date on which the Offer becomes Effective

   "Excluded Shareholders"                                           holders of Excluded Shares

"Excluded Shares" any Action Hotels Shares of which any of:

   (i)             Action Real Estate; 
   (ii)           AGH; or 
   (iii)          the Family Concert Party,

are the holders or are beneficially interested

"EU Merger Regulation" Council Regulation 139/2004/EC of 20 January 2004 on the control of concentrations between undertakings

"Euroclear" Euroclear UK and Ireland Limited

"Family Concert Party" Sheikh Mubarak A M Al Sabah and H E Dr Souad M S Al Sabah

"FCA" or "Financial Conduct Authority" the Financial Conduct Authority acting in its capacity as the competent authority for the purposes of Part VI of the UK Financial Services and Markets Act 2000

"Forms of Proxy" the forms of proxy in connection with each of the Court Meeting and the Action Hotels General Meeting which will accompany the Scheme Document

"Independent Action Hotels Directors" each of the following Action Hotels Directors Stefan Allesch-Taylor, Raymond Chigot, Alain Debare, John Johnston and Andrew Lindley

"Jersey Companies Law" the Companies (Jersey) Law 1991, as amended from time to time

   "London Stock Exchange"                                          London Stock Exchange plc

"Long Stop Date" 9 November 2018 or such later date (if any) as Action Real Estate and Action Hotels may, agree and (if required) the Panel and the Court may allow

"Meetings" the Action Hotels General Meeting and the Court Meeting

"Offer" the recommended cash offer to be made by Action Real Estate to acquire the entire issued and to be issued ordinary share capital of Action Hotels other than the Excluded Shares to be effected by means of the Scheme and, where the context requires, any subsequent revision, variation, extension or renewal thereof

"Offer Period" the offer period (as defined by the Takeover Code) relating to Action Hotels, which commenced on 29 June 2018

"Offer Price" the consideration offered by Action Hotels under the terms of the Offer in for the form of 24 pence in cash for each Action Hotels Share (other than the Excluded Shares)

"Opening Position Disclosure" has the same meaning as in Rule 8 of the Takeover Code

"Overseas Shareholders" Action Hotels Shareholders (or nominees of, or custodians or trustees for Action Hotels Shareholders) not resident in, or nationals or citizens of the United Kingdom or Jersey

"Panel" the Panel on Takeovers and Mergers

   "Recommending Independent Directors"          each of the following Action Hotels Directors Stefan Allesch-Taylor, Raymond Chigot, Alain Debare and Andrew Lindley

"Registrar of Companies" the Registrar of Companies in Jersey

"Regulatory Information Service" any of the services set out on the FCA's list of regulated information services (as set out on the FCA's website) from time to time

"Restricted Jurisdiction" any jurisdiction into which, or from which, making the Offer or this Announcement available would violate the laws of that jurisdiction

"Scheme" the proposed scheme of arrangement under Article 125 of the Jersey Companies Law between Action Hotels and the Action Hotels Shareholders in connection with the Offer, with or subject to any modification, addition or condition approved or imposed by the Court and agreed by Action Hotels and Action Real Estate

"Scheme Document" the document to be sent to Action Hotels Shareholders containing, amongst other things, the Scheme and the notices convening the Court Meeting and the Action Hotels General Meeting

"Scheme Shares" (i) the Action Hotels Shares in issue at the date of this Announcement (including for the avoidance of doubt the Action Hotels Shares held by Rawaf I. Bourisli);

(ii) any Action Hotels Shares issued after the date of this Announcement and before the Voting Record Time; and

(iii) any Action Hotels Shares issued at or after the Voting Record Time and before the Scheme Record Time in respect of which the original or any subsequent holders thereof are, or shall have agreed in writing to be, bound by the Scheme,

in each case other than any Excluded Shares

"Scheme Record Time" the date and time specified in the Scheme Document by reference to which entitlement to vote at the Court Meeting will be determined, expected to be 6.00pm on the day which is two days before the Court Meeting or, if the Court Meeting is adjourned, 6.00pm on the day which is two days before the date of such adjourned Court Meeting

"Significant Interest" in relation to an undertaking, a direct or indirect interest of 20 per cent. or more of the total voting rights conferred by the equity share capital of such undertaking

"Takeover Code" the City Code on Takeovers and Mergers

"takeover offer" as defined in Article 116(1) of the Jersey Companies Law

"Third Party" each of a central bank, government or governmental, quasi--governmental, supranational, statutory, regulatory, environmental, administrative, fiscal or investigative body, court, trade agency, association, institution, environmental body, employee representative body or bodies responsible for the review and/or approval of mergers, acquisitions, concentrations, joint ventures or any other similar manner or any other body or person whatsoever in any jurisdiction

"UKLA" the UK Listing Authority, being the Financial Conduct Authority acting in its capacity as the competent authority for the purposes of Part VI of the Financial Services and Markets Act 2000

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

"United States" or "US" the United States of America, its territories and possessions, any state of the United States of America, the District of Columbia and all other areas subject to its jurisdiction and any political sub-division thereof

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

"Wider AGH Group" AGH and its subsidiaries, subsidiary undertakings, associated undertakings and any other body corporate, partnership, joint venture or person in which AGH, Action Real Estate and/or such subsidiaries or undertakings (aggregating their interests) have a Significant Interest

"Wider Action Hotels Group" Action Hotels and its subsidiaries, subsidiary undertakings, associated undertakings and any other body corporate, partnership, joint venture or person in which Action Hotels and/or such subsidiaries or undertakings (aggregating their interests) have a Significant Interest

For the purposes of this Announcement, "subsidiary", "subsidiary undertaking", "undertaking" and "associated undertaking" have the respective meanings given thereto by the Companies Act.

All references to "pounds", "pounds Sterling", "Sterling", "GBP", "pence", "penny" and "p" are to the lawful currency of the United Kingdom.

References to the singular include the plural and vice versa.

Any reference to any provision of legislation shall include any amendment, modification, re--enactment or extension thereof.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

OFBMMGGRGFZGRZM

(END) Dow Jones Newswires

August 03, 2018 06:18 ET (10:18 GMT)

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