Quercus

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

COMMENCEMENT OF FORMAL SALE PROCESS

Further to the Company‚Äôs interim trading statement, released on 17 January 2014, the Board of Quercus has decided that it would be in the best interests of the Company’s shareholders to seek potential offerors by means of a formal sale process. In accordance with Note 2 to Rule 2.6 of the City Code on Takeovers and Mergers (“Takeover Code”), the Board of Quercus therefore announces that it is conducting a formal sale process. The Board continues to have constructive dialogue with its bankers, Barclays.

The Takeover Panel has granted a dispensation from the requirements of Rules 2.4(a), 2.4(b) and 2.6(a) of the Takeover Code such that any interested party participating in the formal sale process will not be required to be publicly identified as a result of this announcement (subject to Note 3 on Rule 2.2 of the Takeover Code) and will not be subject to the 28 day deadline referred to in Rule 2.6(a) for so long as it is participating in the formal sale process. Interested parties should note Rule 21.2 of the Takeover Code, which will prohibit the Company from entering into any form of inducement fee or other offer related arrangement, and that the Company has not requested any dispensation from this prohibition at this stage.

The Company is to conduct the formal sale process through its adviser, Livingstone Partners LLP (“Livingstone”). Interested parties will be required to enter into a non-disclosure agreement with the Company on reasonable terms satisfactory to the Board before being permitted to participate in the process. The Company then intends to provide participants who have entered into such non-disclosure agreements with access to information with which to evaluate whether to make, and the terms of, any offer. Potential offerors for the entire issued and to be issued share capital of the Company should contact Livingstone (contact details below) without delay.

The Board reserves the right to alter any aspect of the sale process or to terminate it at any time and in such cases will make an announcement as appropriate.

The Board reserves the right to reject any approach or terminate discussions with any interested party or participant at any time. This formal sale process is at an early stage and the Board wishes to stress that there can be no certainty that any transaction will be concluded.
This announcement is not an announcement of a firm intention to make an offer under Rule 2.7 of the Takeover Code and there can be no certainty that an offer will be made, nor as to the terms on which any offer will be made.

As a consequence of this announcement, an “Offer Period” has commenced in respect of the Company in accordance with the rules of the Takeover Code. Further announcements will be made as appropriate.
The Directors of Quercus are responsible for the contents of this announcement.

Enquiries to:

QUERCUS PUBLISHING PLC Tel: 020 7291 7200
Mark Smith, Chief Executive
Colin Adams, Chief Financial Officer and Chief Operating Officer

LIVINGSTONE PARTNERS Tel: 020 7484 4700
Richard Fetterman
Richard Barlow

PETERHOUSE CORPORATE FINANCE LIMITED Tel: 020 7220 9796
Mark Anwyl
Duncan Vasey
Media Enquiries:
ATTILA CONSULTANTS Tel: 020 7776 8825
Charles Cook Mobile: 07710 910 563

Further Information

This announcement 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 this announcement or otherwise. Any offer will be made solely by certain offer documentation which, if published, will contain the full terms and conditions of any offer, including details of how it may be accepted.

This announcement has been prepared in accordance with English law and the Takeover Code and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England.

This announcement will be available on the Company’s website at www.quercusbooks.co.uk as soon as possible and in any event by no later than 12 noon on 23 January 2014
Livingstone Partners LLP, which is authorised and regulated by the FCA, is acting exclusively as financial advisor to Quercus and for no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Quercus for providing the protections afforded to clients of Livingstone Partners LLP nor for providing advice in relation to the matters referred to in this announcement.
Rule 2.10 disclosure

In accordance with Rule 2.10 of the Takeover Code, the Company confirms that it has 20,545,620 ordinary shares of 0.8p each in issue and admitted to trading on ISDX under the UK ISIN GB00B1G17S00
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.

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, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a 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.