FSF Foresight Sustainable Forestry Company Plc

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

FOR IMMEDIATE RELEASE

25 June 2024

RECOMMENDED ACQUISITION 

of

FORESIGHT SUSTAINABLE FORESTRY COMPANY PLC

by

ARIZONA BIDCO LIMITED

(a newly formed vehicle, wholly-owned, indirectly, by Averon Park Limited)

(to be implemented by way of a scheme of arrangement

under Part 26 of the Companies Act 2006)

PUBLICATION OF THE SCHEME DOCUMENT

On 29 May 2024, the Boards of Foresight Sustainable Forestry Company plc ("FSFC") and Averon Park Limited ("Averon Park") announced that they had reached agreement on the terms of a recommended acquisition, pursuant to which Arizona Bidco Limited ("Bidco"), a wholly-owned indirect subsidiary of Averon Park, will acquire the entire issued and to be issued ordinary share capital of FSFC that the Averon Park Group does not already own (the "Acquisition").

It is intended that the Acquisition will be effected by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006 (the "Scheme").

Publication of Scheme Document

FSFC is pleased to announce that it has today published a shareholder circular in relation to the Scheme (the "Scheme Document"), setting out, amongst other things, a letter from the Non-executive Chairman of FSFC, the full terms and conditions of the Scheme, an explanatory statement, an expected timetable of principal events, notices of the required Court Meeting and General Meeting (together, the "Meetings") and details of the action to be taken by shareholders of FSFC, which will be published on FSFC's website at https://fsfc.foresightgroup.eu/offer-fsfc.

Subject to any restrictions relating to persons resident in Restricted Jurisdictions, hard copies of the Scheme Document, the Forms of Proxy for the Meetings and (in the case of shareholders of FSFC whose shares are held in certificated form) a Form of Election for use in connection with the Alternative Offer are being posted to shareholders of FSFC today and, for information purposes only, being made available to other persons with information rights.

Capitalised terms used in this announcement (the "Announcement") shall, unless otherwise defined herein, have the same meanings as set out in the Scheme Document. All references to times in this Announcement are to London, United Kingdom times unless stated otherwise.

Summary of the terms of the Acquisition

The Acquisition will be implemented by the acquisition of the Scheme Shares by Bidco pursuant to a scheme of arrangement between FSFC and the Scheme Shareholders under Part 26 of the Companies Act.

Under the terms of the Acquisition, which is subject to the Conditions and further terms set out in the Scheme Document, each Scheme Shareholder at the Scheme Record Time will be entitled to receive:

for each Scheme Share: 97 pence in cash (the "Offer Price")

(the "Cash Offer")

The Offer Price represents:

·          a premium of approximately 32.88 per cent. to the Closing Price of 73.0 pence per FSFC Share on 28 May 2024 (being the last Business Day before the commencement of the Offer Period);

·          a premium of approximately 43.28 per cent. to the volume weighted average price of 67.7 pence per FSFC Share for the three-month period ended 28 May 2024 (being the last Business Day before the commencement of the Offer Period); 

·          a premium of approximately 44.24 per cent. to the volume weighted average price of 67.3 pence per FSFC Share for the six-month period ended 28 May 2024 (being the last Business Day before the commencement of the Offer Period); and

·          a discount of approximately 5.09 per cent. to the 31 March 2024 NAV per FSFC Share of 102.2 pence.

The Cash Offer values the entire issued ordinary share capital of FSFC at approximately £167 million.

The Scheme Shares will be acquired by Bidco pursuant to the Acquisition fully paid and free from all liens, equitable interests, charges, encumbrances, options, rights of pre-emption and any other third party rights or interests of any nature whatsoever and together with all rights or interests of any nature attaching or accruing thereto, including (without limitation) voting rights and the right to receive and retain, in full, all dividends and other distributions (if any) or any other return of capital or value (whether by way of reduction of share capital or share premium account or otherwise) declared, made or paid in respect of the Scheme Shares by reference to a record date falling on or after the Effective Date.

Alternative Offer

As an alternative to the Cash Offer, Scheme Shareholders (other than Restricted Shareholders) may elect (in respect of all, but not part only, of their holding of Scheme Shares) to receive, in lieu of the Cash Offer to which they would otherwise be entitled:

for each Scheme Share: one unlisted B ordinary share in the capital of Bidco (a "Rollover Share")

(the "Alternative Offer"),

subject to the terms and conditions of the Alternative Offer.

The maximum number of Rollover Shares available to be issued to eligible Scheme Shareholders under the Alternative Offer will be limited to, in aggregate, the equivalent of 24.99 per cent. of the Bidco Offer Shares (the "Alternative Offer Maximum"), and the availability of the Alternative Offer is conditional upon valid elections being made for such number of Rollover Shares which represent, in aggregate, at least 5 per cent. of the Bidco Offer Shares (the "Alternative Offer Minimum Threshold"), failing which it will lapse. In these circumstances, no Rollover Shares will be issued and the consideration payable in respect of each Scheme Share will be settled in cash in accordance with the terms of the Cash Offer.

Upon the Scheme becoming Effective, Scheme Shareholders who have not validly elected for the Alternative Offer will automatically receive the Cash Offer in respect of their entire holding of Scheme Shares.

Further details of the Alternative Offer and the Rollover Shares, and how to make an Alternative Offer Election, are set out in the Scheme Document.

Right to switch to Takeover Offer

Bidco reserves the right to elect to implement the Acquisition by way of a Takeover Offer as an alternative to the Scheme (subject to the Panel's consent).

Background to, and reasons for the FSFC Directors' recommendation of the Cash Offer

FSFC is the first and only UK listed investment trust investing in a diversified portfolio of UK forestry and afforestation assets, targeting attractive risk-adjusted total returns of CPI + 5 per cent. per annum through a combination of land appreciation, sustainable timber and carbon credit sales. FSFC's diverse portfolio encompassed 12,654 hectares of land and comprised 69 forestry and afforestation assets in the UK as at 31 March 2024. On 10 May 2024, FSFC announced a NAV per Share of 102.2 pence as at 31 March 2024.  In addition, FSFC announced that between 31 March 2024 and 10 May 2024, FSFC planted an additional c.650,000 trees at four afforestation properties, which is expected to result in a further £2.1 million (or 1.2 pence per FSFC Share) of net portfolio value gains.

In arriving at their recommendation, the FSFC Directors have factored in, and remain confident that, FSFC's high-quality portfolio, investment management platform and pipeline provide a foundation for continued growth and sustainable risk-adjusted returns. However, the FSFC Directors believe that neither these attributes nor the attractive underlying sector dynamics, have been reflected in the current FSFC Share price, with a significant de-rating experienced over the last year exacerbated by the inflationary and higher interest rate environment. As a consequence of the FSFC Shares trading at a material and persistent discount to the NAV per Share over the past 12 months, FSFC has not been able to issue new FSFC Shares in order to achieve more meaningful scale and greater liquidity due to the material NAV per Share dilution that would result from issuing shares at a discount to the NAV per Share. As a result, access to capital to pursue more accretive and more environmentally transformative afforestation activities has been severely constrained. FSFC is restricted in undertaking these activities and in its ability to make new acquisitions, and is, therefore, reliant on its revolving credit facility of £30 million, of which £18.3 million was drawn as at 31 March 2024.  

Furthermore, the subscale nature of FSFC within the alternatives UK investment trust universe has resulted in a lack of buyers in the secondary market whose demand could, otherwise, re-rate the FSFC Shares and provide trading liquidity.

The FSFC Directors do not foresee FSFC's discount to the NAV per Share narrowing within a reasonable time frame, given the following countervailing factors:

·          the wider market situation in which the vast majority of the UK investment trust sector is trading at a discount to NAV;

·          the reluctance of investors to make new capital allocations (across the board but particularly to subscale funds investing in alternative assets);

·          the wealth of opportunities available for total returns and/or capital gains from competing funds, including private funds, and asset classes; and

·          the uncertain macroeconomic outlook.

Consequently, whilst the FSFC Directors remain confident in the standalone prospects for FSFC, it was against this background that the FSFC Directors received an unsolicited offer from Averon Park on 20 February 2024 which the FSFC Directors initially rejected. Following a period of negotiations, the FSFC Directors believe the Cash Offer provides an opportunity for all Scheme Shareholders to realise the entirety of their Scheme Shares in cash, and at a significant premium to the FSFC share price as at the last Business Day before the commencement of the Offer Period. In addition, the FSFC Directors believe that the certainty of execution and acceleration of value crystallisation, whilst eliminating the associated uncertainties, is beneficial to Scheme Shareholders and is in excess of the reasonable medium-term prospects for FSFC on a standalone basis.

In considering the merits of the Cash Offer, the FSFC Directors have taken into account that the Offer Price of 97 pence represents a significant premium of approximately:

·          32.88 per cent. to the Closing Price of 73.0 pence per FSFC Share on 28 May 2024 (being the last Business Day before the commencement of the Offer Period);

·          43.28 per cent. to the volume weighted average price of 67.7 pence per FSFC Share for the three-month period ended 28 May 2024 (being the last Business Day before the commencement of the Offer Period); and

·          44.24 per cent. to the volume weighted average price of 67.3 pence per FSFC Share for the six-month period ended 28 May 2024 (being the last Business Day before the commencement of the Offer Period).

In addition, the FSFC Directors have given due consideration to Averon Park's strategic rationale for the Acquisition and intentions with regard to the business of FSFC as set out in the Scheme Document. 

Recommendation

The FSFC Directors, who have been so advised by Stifel as to the financial terms of the Cash Offer, consider the terms of the Cash Offer to be fair and reasonable. In providing its advice to the FSFC Directors, Stifel has taken into account the commercial assessments of the FSFC Directors. Stifel is providing independent financial advice to the FSFC Directors for the purposes of Rule 3 of the Code.

In considering the terms of the Alternative Offer, Stifel and the FSFC Directors have considered the details of the Alternative Offer and the Rollover Shares (including the disadvantages and advantages of the Alternative Offer) set out in the Scheme Document.

Stifel is unable to advise the FSFC Directors as to whether or not the financial terms of the Alternative Offer are fair and reasonable. This is because Stifel has not had any involvement in the development and validation of any financial projections for Bidco. As a result, Stifel is unable to assess any plans Bidco may have for the development of FSFC to the degree necessary to form an assessment of the value of the Alternative Offer. Stifel also notes the significant and variable impact that the disadvantages and advantages of the Alternative Offer may have for individual eligible Scheme Shareholders.

Accordingly, the FSFC Directors are unable to form an opinion as to whether or not the terms of the Alternative Offer are fair and reasonable and are not making any recommendation to eligible Scheme Shareholders as to whether or not they should elect for the Alternative Offer. Eligible Scheme Shareholders are encouraged to take into account the key disadvantages and advantages in relation to the Alternative Offer and the risk factors and other investment considerations in relation to the Alternative Offer outlined in the Scheme Document when deciding whether or not to elect for the Alternative Offer (subject to satisfying the eligibility criteria set out in the Scheme Document). 

The FSFC Directors believe that the Acquisition (including the Scheme) is in the best interests of FSFC Shareholders as a whole and unanimously recommend that the Scheme Voting Shareholders vote in favour of the Scheme at the Court Meeting and FSFC Shareholders vote in favour of the Special Resolution at the General Meeting (or, in the event that the Acquisition is implemented by way of a Takeover Offer, to accept or procure acceptance of the Takeover Offer), as they have irrevocably undertaken to do in respect of their own beneficial holdings of, in aggregate, 244,000 FSFC Shares (representing, in aggregate, approximately 0.14 per cent. of the issued ordinary share capital of FSFC and approximately 0.20 per cent. of the Scheme Voting Shares (being those Scheme Shares eligible to vote at the Court Meeting), in each case as at the Latest Practicable Date).

None of the FSFC Directors intend to elect for the Alternative Offer in respect of their own holdings of FSFC Shares.

The FSFC Directors consider that, in deciding whether or not to elect for the Alternative Offer, eligible Scheme Shareholders should take their own independent advice and consider carefully the disadvantages and advantages of electing for the Alternative Offer and the risk factors and other investment considerations in relation to the Alternative Offer (including, but not limited to, those set out in the Scheme Document) in the light of their own financial circumstances and investment objectives.

Scheme Shareholders should also ascertain whether acquiring or holding Rollover Shares is affected by the laws of the relevant jurisdiction in which they reside and consider whether Rollover Shares are a suitable investment in the light of their own personal circumstances. Scheme Shareholders are, therefore, strongly recommended to seek their own independent financial, tax and legal advice in the light of their own particular circumstances and investment objectives before deciding whether to elect for the Alternative Offer. Any decision to elect for the Alternative Offer should be based on independent financial, tax and legal advice and full consideration of the information in the Scheme Document.

Notices of the Court Meeting and General Meeting and action to be taken

As described in the Scheme Document, in order to become Effective the Scheme will require, among other things, that the requisite majority of: (i) eligible Scheme Voting Shareholders vote in favour of the Scheme at the Court Meeting; and (ii) eligible FSFC Shareholders vote in favour of the Special Resolution at the General Meeting. The Scheme is also subject to the satisfaction or waiver of the other Conditions and further terms as described more fully in the Scheme Document.

The Court Meeting and the General Meeting to approve the Scheme (and the steps contemplated by the Scheme) are scheduled to be held at 10.00 a.m. and 10.15 a.m. (or as soon thereafter as the Court Meeting is concluded or adjourned) respectively, each on 16 July 2024 at the offices of Stifel Nicolaus Europe Limited, 4^th Floor, 150 Cheapside, London EC2V 6ET.

Subject to approval at the Meetings, the Court's sanctioning of the Scheme and the satisfaction or waiver of the other Conditions set out in further detail in the Scheme Document, the Scheme is expected to become Effective on or around 30 July 2024.

Scheme Voting Shareholders are asked to submit proxy appointments and instructions for the Court Meeting and FSFC Shareholders are asked to submit proxy appointments and instructions for the General Meeting as soon as possible, using any of the methods described in the Scheme Document (by post, online at www.investorcentre.co.uk/eproxy, electronically through CREST or (for institutional investors) via the Proxymity platform). Scheme Voting Shareholders and FSFC Shareholders are also strongly encouraged to appoint "the Chair of the Meeting" as their proxy.

It is important that, for the Court Meeting in particular, as many votes as possible are cast so that the Court may be satisfied that there is a fair representation of Scheme Voting Shareholder opinion. Therefore, Scheme Voting Shareholders and FSFC Shareholders are strongly encouraged to either sign and return their Forms of Proxy by post or transmit a proxy appointment electronically online at www.investorcentre.co.uk/eproxy, through CREST or (for institutional investors) via the Proxymity platform as soon as possible.

Any changes to the arrangements for the Meetings will be communicated to Scheme Voting Shareholders and FSFC Shareholders before the Meetings through FSFC's website at https://fsfc.foresightgroup.eu/offer-fsfc and, where appropriate, by announcement through a Regulatory Information Service.

Timetable

The Scheme Document contains an expected timetable of principal events relating to the Scheme, which is also set out in the Appendix to this Announcement. Subject to obtaining the approval of the requisite majority of eligible Scheme Voting Shareholders at the Court Meeting, the requisite majority of FSFC Shareholders at the General Meeting and the satisfaction or waiver of the other Conditions set out in the Scheme Document, including the sanctioning of the Scheme by the Court, it is currently expected that the Effective Date will be 30 July 2024.

Cancellation of listing of FSFC Shares

The last day of dealings in FSFC Shares for normal settlement on the London Stock Exchange's main market for listed securities is expected to be the Business Day immediately prior to the Court Sanction Hearing, and the last day for registration of transfers of FSFC Shares (other than the registration of the transfer of the Scheme Shares to Bidco pursuant to the Scheme) is expected to be the Business Day immediately prior to the Effective Date, following which all FSFC Shares will be suspended from the Official List and from trading on the London Stock Exchange's main market for listed securities.

Prior to the Scheme becoming Effective, FSFC will apply for the cancellation of the admission to trading of the FSFC Shares on the London Stock Exchange's main market for listed securities, and for the cancellation of the listing of the FSFC Shares on the Official List. It is expected that such delisting and cancellation of admission to trading will take effect on the first Business Day after the Effective Date or shortly thereafter.

Information for FSFC Shareholders

In accordance with Rule 26.1 of the Code, copies of this Announcement and the Scheme Document will be available on FSFC's website at https://fsfc.foresightgroup.eu/offer-fsfc and on Bidco's website at https://communications.singercm.com/p/4UWI-F5D/arizona-bidco by no later than 12 noon on the Business Day following this Announcement, up to and including the Effective Date. For the avoidance of doubt, the contents of these websites is not incorporated by reference and does not form part of this Announcement.

For information purposes only, the Scheme Document will also be sent, or made available to, persons with information rights.

A copy of the Scheme Document will also be submitted to the National Storage Mechanism, where it will be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

Shareholder Helpline

If FSFC Shareholders have any questions about this Announcement, the Scheme Document, the Court Meeting or the General Meeting, or are in any doubt as to how to submit proxies electronically online at www.investorcentre.co.uk/exproxy, through CREST or (for institutional investors) via the Proxymity platform or to complete the Forms of Proxy or Form of Election or to submit a TTE Instruction, please call FSFC's registrar, Computershare, on +44 (0) 370 707 1231. Lines are open from 8.30 a.m. to 5.30 p.m., Monday to Friday (excluding public holidays in England and Wales). Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Please note that Computershare cannot provide any financial, legal or tax advice, or provide advice on the merits of the Acquisition or the Scheme, and calls may be recorded and monitored for security and training purposes.

Enquiries:

Gowling WLG (UK) LLP is acting as legal adviser to FSFC.

Dickson Minto LLP is acting as legal adviser to Bidco, Blackmead and Averon Park.  

Important notices relating to financial advisers

Stifel Nicolaus Europe Limited ("Stifel"), which is authorised and regulated in the United Kingdom by the FCA, is acting as Financial Adviser exclusively to FSFC and no one else in connection with the matters described in this Announcement and will not regard any other person as its client in respect thereof or be responsible to anyone other than FSFC for providing the protections afforded to clients of Stifel or its affiliates nor for providing advice in connection with any matter referred to in this Announcement. Neither Stifel nor any of its affiliates (nor their respective directors, officers, employees or agents) owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Stifel or its affiliates in connection with this Announcement, any statement contained herein, the Acquisition or otherwise. No representation or warranty, express or implied, is made by Stifel as to the contents of this Announcement.

Singer Capital Markets Advisory LLP ("Singer Capital Markets"), which is authorised and regulated in the United Kingdom by the FCA, is acting as Financial Adviser exclusively to Bidco, Blackmead and Averon Park and no one else in connection with the matters described in this Announcement and will not regard any other person as its client in respect thereof or be responsible to anyone other than Bidco, Blackmead or Averon Park or their respective affiliates for providing the protections afforded to clients of Singer Capital Markets or its affiliates nor for providing advice in connection with any matter referred to in this Announcement. Neither Singer Capital Markets nor any of its affiliates (nor their respective directors, officers, employees or agents) owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Singer Capital Markets or its affiliates in connection with this Announcement, any statement contained herein, the Acquisition or otherwise. No representation or warranty, express or implied, is made by Singer Capital Markets as to the contents of this Announcement.

In accordance with the Code and normal United Kingdom market practice, Singer Capital Markets or its affiliates will continue to act as exempt principal traders in FSFC securities on the London Stock Exchange. These purchases and activities by exempt principal traders which are required to be made public in the United Kingdom pursuant to the Code will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website at www.londonstockexchange.com. 

Further information

This announcement is for information purposes only. It is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities in FSFC in any jurisdiction in contravention of applicable law. The Acquisition will be made solely through the Scheme Document (or, in the event that the Acquisition is to be implemented by means of a Takeover Offer, the Offer Document), which contains (or will contain) the full terms and conditions of the Acquisition, including details of how to vote in respect of the Scheme. Any voting decision or response in relation to the Acquisition should be made solely on the basis of the Scheme Document (or, in the event that the Acquisition is to be implemented by means of a Takeover Offer, the Offer Document). FSFC and Bidco urge FSFC Shareholders to read the Scheme Document carefully because it contains important information relating to the Acquisition.

The statements contained in this Announcement are made as at the date of this Announcement, unless some other time is specified in relation to them, and the release of this Announcement shall not give rise to any implication that there has been no change in the facts set out in this Announcement since such date. This Announcement is an advertisement and does not constitute a prospectus or a prospectus equivalent document.

No person should construe the contents of this Announcement as legal, financial or tax advice. If you are in any doubt about the contents of this Announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant, or independent financial adviser duly authorised under FSMA if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

Overseas Shareholders

This announcement has been prepared in accordance with, and for the purpose of complying with, English law, the Code, the Market Abuse Regulation and the Disclosure Guidance and Transparency Rules, and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside England.

The release, publication or distribution of this Announcement in, into or from jurisdictions other than the United Kingdom may be restricted by law and/or regulation and therefore any persons who are not resident in the United Kingdom or who are subject to the laws of any jurisdiction other than the United Kingdom (including Restricted Jurisdictions) should inform themselves about, and observe, any applicable legal or regulatory requirements. In particular, the ability of persons who are not resident in the United Kingdom or who are subject to the laws of any jurisdiction other than the United Kingdom to participate in the Acquisition or to vote their Scheme Voting Shares or FSFC Shares (as applicable) in respect of the Scheme at the Court Meeting or the Special Resolution at the General Meeting, or to appoint another person as proxy to vote at the Court Meeting or the General Meeting on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located or to which they are subject. Any failure to comply with applicable legal or regulatory requirements of any jurisdiction may constitute a violation of securities laws in that jurisdiction. To the fullest extent permitted by applicable law, the companies, advisers and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person.

Unless otherwise determined by Bidco or required by the Code, and permitted by applicable law and regulation, the Acquisition (including the Alternative Offer) shall not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws or regulations in that jurisdiction and no person may vote in favour of the Acquisition by use of the mails or any other means or instrumentality (including, without limitation, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or any facility of a national, state or other securities exchange of, any Restricted Jurisdiction or from within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction.

Copies of this Announcement and any formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction or any other jurisdiction where to do so would constitute a violation of the laws or regulations of such jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in, into or from any Restricted Jurisdiction. Doing so may render invalid any related purported vote in respect of, or acceptance of, the Acquisition.

If the Acquisition is implemented by way of a Takeover Offer (unless otherwise permitted by applicable law or regulation), the Takeover Offer may not be made, directly or indirectly, in or into, or by use of the mails or any other means or instrumentality (including, without limitation, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or any facility of a national, state or other securities exchange of, any Restricted Jurisdiction and the Takeover Offer will not be capable of acceptance by any such use, means, instrumentality or facility or from within any Restricted Jurisdiction.

The availability of the Acquisition to Scheme Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdiction in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements.

The availability of the Rollover Shares to persons who are not resident in the United Kingdom may be affected by the laws and/or regulations of the relevant jurisdiction in which they are located. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements.

Where Bidco believes that an election for the Alternative Offer by any Scheme Shareholder may infringe applicable legal or regulatory requirements, or may result in a requirement for a registration under the securities laws of any Restricted Jurisdiction, Bidco will have the right to deem that such Scheme Shareholder has not validly elected for the Alternative Offer and such Scheme Shareholder will instead receive the Cash Offer in respect of the Scheme Shares which were subject to such an election in accordance with the terms of the Acquisition.

Further details in relation to Overseas Shareholders is contained in the Scheme Document.

The Acquisition will be subject to the applicable requirements of English law, the Court, the Code, the Panel and the London Stock Exchange.

Additional information for US investors

The Acquisition relates to the shares of an English company and is being made by means of a scheme of arrangement provided for under the laws of England. A transaction effected by means of a scheme of arrangement is not subject to the tender offer or proxy solicitation rules under the US Exchange Act. Accordingly, the Acquisition is subject to the disclosure and procedural requirements and practices applicable in the United Kingdom to schemes of arrangement which differ from the disclosure requirements of the US tender offer and proxy solicitation rules.

The financial information included in this Announcement and in the Scheme Document has been prepared in accordance with UK IFRS and thus may not be comparable to the financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States, which differ in certain significant respects from UK IFRS.

If, in the future, Bidco exercises its right to implement the Acquisition by means of a Takeover Offer which is to be made into the United States, such a Takeover Offer would be made in compliance with all applicable US laws and regulations, including any applicable exemptions under the US Exchange Act. Such a Takeover Offer would be made in the United States by Bidco and no one else.

In accordance with normal United Kingdom practice and pursuant to Rule 14e-5(b) of the US Exchange Act (to the extent applicable), Bidco or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, FSFC Shares or other securities of FSFC outside of the US, other than pursuant to the Acquisition, until the date on which the Acquisition and/or Scheme and/or Takeover Offer (as relevant) becomes effective, lapses or is otherwise withdrawn. If such purchases or arrangements to purchase were to be made, they would be made outside of the United States and would be in accordance with applicable law, including the US Exchange Act and the Code. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases or arrangements to purchase will be disclosed as required in the United Kingdom, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website at www.londonstockexchange.com.

Neither the SEC nor any US state securities commission nor any other US regulatory authority has approved or disapproved of the Alternative Offer nor the securities to which it relates or determined if this Announcement or the Scheme Document is accurate or complete or adequate. Any representation to the contrary is a criminal offence in the United States.

The Rollover Shares that may be issued under the Alternative Offer have not been and will not be registered under the US Securities Act or under the relevant securities laws of any state or territory or other jurisdiction of the United States and will not be listed on any stock exchange. Accordingly, the Rollover Shares may not be offered or sold in the United States, except in a transaction not subject to, or in reliance on an applicable exemption from, the registration requirements of the US Securities Act and any applicable state securities laws. Bidco expects to issue the Rollover Shares in reliance upon the exemption from the registration requirements of the US Securities Act provided by section 3(a)(10) thereof ("Section 3(a)(10)"). Section 3(a)(10) exempts securities issued in specified exchange transactions from the registration requirement under the US Securities Act where, among other things, the fairness of the terms and conditions of the issuance and exchange of such securities have been approved by a court or governmental authority expressly authorised by law to grant such approval, after a hearing upon the fairness of the terms and conditions of the exchange at which all persons to whom the Rollover Shares are proposed to be issued have the right to appear and receive adequate and timely notice thereof. If Bidco exercises its right to implement the acquisition of the Scheme Shares by way of a Takeover Offer, the Rollover Shares will not be offered in the United States except pursuant to an exemption from or in a transaction not subject to registration under the US Securities Act.

US holders who are or will be affiliates of the Bidco Group or FSFC prior to, or of Bidco Group after, the Effective Date will be subject to certain US transfer restrictions relating to any Rollover Shares received pursuant to the Scheme.

For the purposes of qualifying for the exemption from the registration requirements of the US Securities Act in respect of the Rollover Shares issued pursuant to the Alternative Offer afforded by Section 3(a)(10), Bidco will advise the Court that its sanctioning of the Scheme will be relied upon by Bidco as an approval of the Scheme following a hearing on its fairness to Scheme Shareholders.

The receipt of cash by a US holder as consideration for the transfer of its Scheme Shares pursuant to the Scheme may have tax consequences in the US and such consequences, if any, are not described in this Announcement or in the Scheme Document. Each FSFC Shareholder is urged to consult their independent professional adviser immediately regarding the tax consequences of the Acquisition applicable to them, including under applicable United States state and local, as well as overseas and other, tax laws.

FSFC and Bidco are each incorporated under the laws of England. Some or all of the officers and directors of Bidco and FSFC, respectively, are residents of countries other than the United States. In addition, some or all of the assets of Bidco and FSFC are located outside the United States. As a result, it may be difficult for US holders of FSFC Shares to enforce their rights and any claim arising out of the US federal laws or to enforce against them a judgment of a US court predicated upon the securities laws of the United Kingdom. US holders of FSFC Shares may not be able to sue a non-US company or its officers or directors in a non-US court for violations of US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgment.

Further details in relation to US investors in FSFC are contained in the Scheme Document.

Forward-looking statements

This Announcement and the Scheme Document contain statements which are, or may be deemed to be, "forward-looking statements". Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Bidco, Averon Park and FSFC about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements.

The forward-looking statements contained in this Announcement and the Scheme Document include statements relating to the expected effects of the Acquisition on Bidco, the Bidco Group, FSFC and the FSFC Group (including their future prospects, developments and strategies), the expected timing and scope of the Acquisition and other statements other than historical facts. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as, without limitation, "anticipate", "target", "expect", "estimate", "intend", "plan", "forecast", "project", "goal", "believe", "aim", "will", "may", "hope", "continue", "would", "could" or "should" or other words of similar meaning or the negative thereof. Forward-looking statements may include, but are not limited to, statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Bidco's, FSFC's, any member of the Bidco Group's or any member of the FSFC Group's operations and potential synergies resulting from the Acquisition; and (iii) the effects of global economic conditions and governmental regulation on Bidco's, FSFC's, any member of the Bidco Group's or any member of the FSFC Group's business.

Although Bidco, Averon Park and FSFC believe that the expectations reflected in such forward-looking statements are reasonable, none of Bidco, Averon Park or FSFC can give any assurance that such expectations will prove to be correct. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future.

There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to: the ability to complete the Acquisition; the ability to obtain requisite regulatory and shareholder approvals and the satisfaction of other Conditions on the proposed terms and timetable; changes in the global and domestic political, economic, business and competitive environments and in market and regulatory forces, circumstances or conditions; changes in future exchange and interest rates; changes in tax law or rates; future business combinations or disposals; and any epidemic, pandemic or disease outbreak. Other unknown or unpredictable factors could cause actual results to differ materially from those expected, estimated or projected in the forward-looking statements. If any one or more of these risks or uncertainties materialises or if any one or more of the assumptions proves incorrect, actual results may differ materially from those expected, estimated or projected. Such forward-looking statements should therefore be construed in the light of such factors.

Neither Bidco, Averon Park nor FSFC, nor any of their respective associates or directors, officers, managers, partners or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement or the Scheme Document will actually occur. You are cautioned not to place any reliance on these forward-looking statements. The forward-looking statements speak only at the date of this Announcement and the Scheme Document. All subsequent oral or written forward-looking statements attributable to Bidco or any member of the Wider Bidco Group or FSFC or any member of the Wider FSFC Group, or any of their respective associates, directors, officers, employees or advisers, are expressly qualified in their entirely by the cautionary statement above.

Other than in accordance with their legal or regulatory obligations, none of Bidco, Averon Park or FSFC is under any obligation, and Bidco, Averon Park and FSFC expressly disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

No profit forecasts or estimates or quantified financial benefit statements

No statement in this Announcement or the Scheme Document is intended to constitute a profit forecast, profit estimate or quantified financial benefits statement for any period and no statement in this Announcement or the Scheme Document should be interpreted to mean that earnings or earnings per share for FSFC or Bidco, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for FSFC or Bidco, as appropriate.

Publication on websites

A copy of this Announcement, the Scheme Document and the documents required to be published pursuant to Rule 26.1 and Rule 26.2 of the Code will be made available (subject to certain restrictions relating to persons resident in Restricted Jurisdictions), free of charge, on on FSFC's website at https://fsfc.foresightgroup.eu/offer-fsfc and on Bidco's website at https://communications.singercm.com/p/4UWI-F5D/arizona-bidco by no later than 12 noon on the Business Day following the date of this Announcement.

Neither the content of these websites nor the content of any other website accessible from hyperlinks on such websites is incorporated into, or forms part of, this Announcement or the Scheme Document.

Requesting hard copy documents

In accordance with Rule 30.3 of the Code, a person so entitled may request a copy of this Announcement in hard copy form free of charge. A person may also request that all future documents, announcements and information sent to that person in relation to the Acquisition should be in hard copy form. For persons who have received a copy of this Announcement in electronic form or via a website notification, a hard copy of this Announcement will not be sent to you unless you have previously notified FSFC's registrar, Computershare Investor Services PLC, that you wish to receive all documents in hard copy form or unless requested in accordance with the procedure set out below.

If you would like to request a hard copy of this Announcement please contact Computershare during business hours on + 44 (0) 370 707 1231 (lines are open from 8.30 a.m. to 5.30 p.m., Monday to Friday (excluding public holidays in England and Wales)) or by submitting a request in writing to Computershare at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZZ, United Kingdom. Please note that Computershare cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes. 

Information relating to FSFC Shareholders

Please be aware that addresses, electronic addresses and certain other information provided by FSFC Shareholders, persons with information rights and other relevant persons for the receipt of communications from FSFC may be provided to Bidco during the Offer Period as required under section 4 of Appendix 4 to the Code.

Rounding

Certain figures included in this Announcement and the Scheme Document 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 exact arithmetic aggregation of the figures that precede them.

Disclosure requirements of the Code

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

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in one per cent. 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 disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (London time) on the business day following the date of the relevant dealing.

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

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

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

Right to switch to a Takeover Offer

Bidco reserves the right to elect, with the consent of the Panel, to implement the Acquisition by way of a Takeover Offer as an alternative to the Scheme. If the Acquisition is effected by way of a Takeover Offer, and such offer becomes or is declared unconditional and sufficient acceptances are received, Bidco intends to exercise its rights to apply the provisions of Chapter 3 of Part 28 of the Companies Act so as to acquire compulsorily the remaining FSFC Shares in respect of which the Takeover Offer has not been accepted.

General

If you are in any doubt about the contents of this Announcement or the Scheme Document or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or independent financial adviser duly authorised under FSMA if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.