Ludgate Environmental Fund Limited Offer by Headway Investment Partners III LP (5187S)

TIDMLEF TIDMTTM

RNS Number : 5187S

Ludgate Environmental Fund Limited

21 December 2016

The following is the text of the announcement released by Headway Investment Partners III LLP at 07.00 this morning

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

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 OF SUCH JURISDICTION

21 December 2016

RECOMMED CASH OFFER

for

Ludgate Environmental Fund Limited ("Ludgate" or the "Company")

Headway Investment Partners III L.P. ("Headway")

Summary

-- The general partner of Headway and the board of Ludgate are pleased to announce that they have reached agreement regarding the terms of a recommended cash offer to be made by Headway for the entire issued ordinary share capital of Ludgate (the "Offer"). The Offer is to be effected by means of a takeover offer within the meaning of Article 116 of the Jersey Companies Law.

   --     Under the terms of the Offer, Ludgate Shareholders shall be entitled to receive: 
   for each Ordinary Share                     16 pence in cash

-- The Offer Price values the entire issued ordinary share capital of Ludgate at approximately GBP8.5 million and represents:

o a discount of approximately 8.6 per cent. to the Closing Price of 17.5 pence on 20 December 2016 (being the last Business Day prior to this announcement);

o a premium of approximately 6.7 per cent. to the closing "bid" price for an Ordinary Share of 15.0 pence on 20 December 2016 (being the last Business Day prior to this announcement); and

o a discount of approximately 22.7 per cent. to Ludgate's last published NAV per Ordinary Share of 20.7 pence as at 30 September 2016.

-- Headway is a Scottish limited partnership whose primary objective is to acquire interests in private equity investments through secondary market transactions, principally in Western Europe and North America.

-- Headway believes that the financial burden of managing and operating Ludgate as an AIM company has been disproportionate to the value of the Ludgate Assets. It further believes that very low liquidity in the Ordinary Shares will present significant difficulties for Ludgate Shareholders who seek to realise their investment in Ludgate at the market price. Headway believes the Offer provides Ludgate Shareholders with a certain value, together with an opportunity to realise their investment for cash with no transaction commissions or fees and to mitigate the inherent risk of potential further diminution in value of the Ludgate Assets.

-- Headway Capital (on behalf of Headway and in the interests of those Ludgate Shareholders who choose to retain Ordinary Shares once the Offer becomes, or is declared, unconditional in all respects) has entered into a non-binding term sheet with Ludgate Investments, the investment advisor to Ludgate, with regard to proposed changes to be made to the contractual arrangements between Ludgate Investments and Ludgate should the Offer become or be declared unconditional in all respects (the "Proposed Amendments"). Pursuant to Rule 16 of the Code, the Proposed Amendments are subject to the approval of Independent Shareholders representing a majority of the votes cast on a poll (either in person or by proxy) at the Independent Shareholders Meeting and such approval is a Condition to the Offer. Ludgate Investments and its connected parties are not considered to be Independent Shareholders and will therefore not be entitled to vote on the resolution.

-- Headway considers that the Proposed Amendments are key to more effectively aligning the interests of Ludgate Investments with continuing Ludgate Shareholders with regard to optimising the disposal of the Ludgate Assets and creating shareholder value. Therefore, if Independent Shareholders do not pass the relevant resolution at the Independent Shareholders Meeting approving the Proposed Amendments and thus the Condition is not met, Headway may seek to lapse the Offer.

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

-- Accordingly, the Ludgate Directors intend unanimously to recommend that Ludgate Shareholders accept the Offer. In addition, by virtue of the fact that the Offer is conditional, inter alia, upon the approval of the Proposed Amendments by Independent Shareholders and in light of the Ludgate Directors intention unanimously to recommend that Ludgate Shareholders accept the Offer, the Ludgate Directors also intend unanimously to recommend that Independent Shareholders vote in favour of the resolution to be proposed at the Independent Shareholders Meeting to approve the Proposed Amendments.

-- The recommendation of the Offer by the Ludgate Directors has been made on the basis of the factors set out in the paragraph 7 of this announcement, outlining the background to and reasons for their recommendation, which are viewed by the Ludgate Directors as being material to the making of their recommendation.

-- The Ludgate Director who holds Ordinary Shares has irrevocably undertaken to accept the Offer and to vote in favour of the resolution to be proposed at the Independent Shareholders Meeting in respect of his own beneficial holding of 115,445 Ordinary Shares, representing approximately 0.22 per cent. of the Ordinary Shares in issue on 20 December 2016 (being the last Business Day prior to this announcement).

-- Headway has also received irrevocable undertakings from certain other Ludgate Shareholders to accept the Offer in respect of 16,337,579 Ordinary Shares in aggregate, representing approximately 30.63 per cent. of the Ordinary Shares in issue on 20 December 2016 (being the last Business Day prior to this announcement) and to vote in favour of the resolution to be proposed at the Independent Shareholders Meeting to approve the Proposed Amendments, in respect of 25,797,961 Ordinary Shares in aggregate, representing approximately 48.36 per cent. of the Ordinary Shares in issue on 20 December 2016 (being the last Business Day prior to this announcement).

-- In addition, Headway has received a letter of intent from a Ludgate Shareholder to accept the Offer and vote in favour of the resolution to be proposed at the Independent Shareholder Meeting in respect of 2,159,000 Ordinary Shares, representing approximately 4.05 per cent. of the Ordinary Shares in issue on 20 December 2016 (being the last Business Day prior to this announcement).

-- Headway has therefore received irrevocable undertakings or a letter of intent to accept the Offer in respect of 18,612,024 Ordinary Shares in aggregate, representing approximately 34.89 per cent. of the Ordinary Shares in issue on 20 December 2016 (being the last Business Day prior to this announcement) and to vote in favour of the resolution to be proposed at the Independent Shareholder Meeting in respect of 28,072,406 Ordinary Shares in aggregate, representing approximately 52.62 per cent. of the Ordinary Shares in issue on 20 December 2016 (being the last Business Day prior to this announcement). Further details of these irrevocable undertakings are set out in Appendix III to this announcement.

   --     The Offer will be conditional upon, inter alia:

o Headway receiving valid acceptances (which have not been withdrawn) in respect of the Ordinary Shares which represent more than 50 per cent. of the Ordinary Shares to which the Offer relates and of the voting rights attaching to those Ordinary Shares;

o the approval, by an ordinary resolution on a poll of Independent Shareholders at the Independent Shareholders Meeting, of the Proposed Amendments; and

o the Conditions and further terms not otherwise identified above to which the Offer is subject, as set out in Appendix I to this announcement, either being satisfied or (with the exception of certain conditions which are not capable of waiver) waived.

-- If the Offer becomes or is declared unconditional in all respects and Headway has received valid acceptances in respect of Ordinary Shares which represent more than 50 per cent. but not more than 74.99 per cent. of the voting rights attaching to the Ordinary Shares, the Ludgate Directors (subject to Ludgate obtaining the necessary regulatory approvals) intend to convene a general meeting of Ludgate, in accordance with Rule 41 of the AIM Rules, at which a special resolution (the "Cancellation Resolution") seeking the consent of Ludgate Shareholders to the Cancellation will be proposed. To be passed, the Cancellation Resolution will require not less than 75 per cent. of votes cast by Ludgate Shareholders on a poll (either in person or by proxy) to be in favour of the Cancellation Resolution.

-- In these circumstances, Headway will vote the Ordinary Shares it becomes interested in as a result of the Offer in favour of the Cancellation Resolution and has received irrevocable undertakings from certain other Ludgate Shareholders, including Ludgate Investments and Ocean Capital Holdings II B.V. (the investment vehicle of Gijs and Jeroen Voskamp who are both directors of Ludgate Investments), to vote in favour of the Cancellation Resolution in respect of 15,964,180 Ordinary Shares in aggregate, representing approximately 29.93 per cent. of the Ordinary Shares in issue on 20 December 2016 (being the last Business Day prior to this announcement). Further details of these irrevocable undertakings are set out in Appendix III to this announcement.

-- Alternatively, if the Offer becomes, or is declared, unconditional in all respects and Headway receives valid acceptances in respect of Ordinary Shares which represent not less than 75 per cent. of the voting rights attaching to the Ordinary Shares, Headway intends to procure that the Ludgate Directors (subject to Ludgate having obtained the necessary regulatory approvals) will make an application for Cancellation.

-- Ludgate is currently regulated by the JFSC as a Listed Fund pursuant to the CIF Law. The approval of the JFSC is not required for the Offer to become or be declared unconditional in all respects. However, in advance of the Cancellation, Ludgate will be required to make an application to the JFSC to seek and obtain its consent to the Cancellation and to clarify Ludgate's regulatory status with the JFSC post Cancellation. By way of illustration, such status could be as an unclassified collective investment fund regulated under the CIF Law, in which case the level of regulation to which Ludgate will be subject may increase, or that status may be as an unregulated holding company, which would be not be subject to the various protections prescribed pursuant to the CIF Law and would therefore reduce the level of regulation to which Ludgate would be subject. Details of the JFSC's determination with regards to Ludgate's regulatory status and any associated timeframes are expected to be provided in conjunction with the Cancellation Resolution in due course.

-- The Offer Document and the Form of Acceptance containing further information about the Offer will be published as soon as practicable and, in any event, within 28 days of the date of this announcement, unless Headway and Ludgate otherwise agree, and the Panel consents, to a later date.

This summary should be read in conjunction with, and is subject to, the full text of this announcement and its appendices. The Offer shall be subject to the Conditions and further terms that are set out in Appendix I to this announcement and to the full terms and conditions which shall be set out in the Offer Document and (for Ordinary Shares in certificated form) the Form of Acceptance. Appendix II to this announcement contains the sources of information and bases of calculations set out in this announcement. Appendix III to this announcement contains further details of the irrevocable undertakings and letter of intent received in relation to the Offer and the Cancellation. Appendix IV to this announcement contains definitions of certain terms used in this summary and in this announcement. The appendices form part of this announcement.

 
 Enquiries: 
 Headway Capital (Investment          Tel: +44 (0) 
  Adviser to Headway)                  20 7518 8878 
 Christiaan de Lint 
 GCA Altium (Financial Adviser        Tel: +44 (0) 
  to Headway)                          20 7484 4040 
 Tim Richardson / Declan O'Connor 
 Ludgate Environmental Fund Limited   Tel: +44 (0) 
                                       1534 609034 
 John Shakeshaft (Chairman) 
 Panmure Gordon (Rule 3 Adviser       Tel: +44 (0) 
  to Ludgate)                          20 7886 2500 
 Paul Fincham / Jonathan Becher

IMPORTANT NOTICES

Disclaimers

GCA Altium, which is authorised and regulated in the UK by the Financial Conduct Authority, is acting for Headway and no one else in connection with the matters set out in this announcement. In connection with such matters, GCA Altium will not regard any other person as its client, nor will it be responsible to any other person for providing the protections afforded to clients of GCA Altium or for providing advice in relation to the contents of this announcement or any other matter referred to herein. Neither GCA Altium nor any of its affiliates 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 other than Headway in connection with this announcement, any statement contained herein or otherwise.

Panmure Gordon, which is authorised and regulated in the UK by the Financial Conduct Authority is acting exclusively for Ludgate and no one else in connection with the matters set out in this announcement. In connection with such matters, Panmure Gordon will not regard any other person as its client, nor will it be responsible to any other person for providing the protections afforded to clients of Panmure Gordon or for providing advice in relation any matter referred to herein. Panmure Gordon does not accept any responsibility whatsoever to any person other than Ludgate for the contents of this announcement or for any statement made or purported to be made by it or on its behalf in connection with the Offer. Panmure Gordon accordingly disclaims all and any liability whether arising in tort, contract or otherwise which it might otherwise have in respect of this announcement or any such statement.

This announcement is for information purposes only and is not intended to, and does not constitute, or form part of any offer, invitation, inducement or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of or exercise rights in respect of any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Offer or otherwise. The Offer will be made solely through the Offer Document (together with, in the case of Ordinary Shares in certificated form, the Form of Acceptance) which will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted. Any decision in respect of, or other response to, the Offer should be made only on the basis of the information contained in the Offer Document and, in the case of Ordinary Shares in certificated form, the Form of Acceptance. Each Ludgate Shareholder is urged to consult its independent professional advisers immediately regarding the tax consequences of the Offer applicable to them.

This announcement does not constitute a prospectus or prospectus equivalent document.

In accordance with normal practice in the United Kingdom, Headway or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, Ordinary Shares, other than pursuant to the Offer, until the date on which the Offer becomes or is declared wholly unconditional, lapses or is otherwise withdrawn. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases 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.

Overseas Shareholders

The ability of Overseas Shareholders to participate in the Offer and the distribution of this announcement in, into or from jurisdictions other than the United Kingdom or Jersey may be restricted by the laws of those jurisdictions and therefore persons into whose possession this announcement comes should inform themselves of, and observe, any such restrictions. Any person (including without limitation, nominees, trustees and custodians) who would, or otherwise intends to, forward this announcement, the Offer Document, the Forms of Acceptance or any accompanying document to any jurisdiction outside the United Kingdom or Jersey should refrain from doing so and seek appropriate professional advice before taking any action. If any Overseas Shareholder remains in any doubt, it should consult an appropriate independent professional adviser in its relevant jurisdiction without delay. In particular, the ability of persons who are not resident in the United Kingdom or Jersey to execute and deliver Forms of Acceptance may be affected by the laws of the relevant jurisdiction in which they are located.

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. This announcement has been prepared for the purposes of complying with the laws of England and Jersey and the Takeover Code and the information disclosed may not be the same as that which would have been disclosed if this document and the accompanying documents had been prepared in accordance with the laws of jurisdictions outside of England and Jersey.

This announcement is not intended to, and does not, constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval pursuant to the Offer or otherwise, in any jurisdiction in which such offer, invitation or solicitation is unlawful.

Notice to US Investors

The Offer will be made for securities in a Jersey company and Ludgate Shareholders in the United States should be aware that this announcement, the Offer Document and any other documents relating to the Offer have been, or will be, prepared in accordance with the Takeover Code and UK disclosure requirements, format and style, all of which may differ from those in the United States. All financial information that is included in this announcement or that may be included or referred to in the Offer Document or any other documents relating to the Offer, have been, or will be, prepared in accordance with International Financial Reporting Standards adopted by the European Union and therefore may not be comparable to financial statements of US companies or companies whose financial statements are prepared in accordance with US GAAP.

The Offer, if required to be made, will be made in the United States pursuant to applicable exemptions under the US tender offer rules and securities laws and otherwise in accordance with the requirements of the Takeover Code, the Panel and the London Stock Exchange. Accordingly, the Offer will be subject to disclosure and other procedural requirements, including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments that are different from those applicable under US domestic tender offer procedures and law. In the United States, the Offer will be made solely by Headway and not by its financial adviser.

Ludgate is a company incorporated under the laws of Jersey and Headway is a limited partnership established under the laws of Scotland. It may not be possible for Ludgate Shareholders in the United States to effect service of process within the United States upon Ludgate or Headway or their respective officers or directors or to enforce against any of them judgments of the United States predicated upon the civil liability provisions of the federal securities laws of the United States. It may not be possible to sue Ludgate or Headway or their respective officers or directors in a non-US court for violations of the US securities laws. There is also doubt as to enforceability in the United Kingdom in original actions, or in actions for the enforcement of judgments of US courts, based on civil liability provisions of US federal securities laws.

Neither the United States Securities and Exchange Commission nor any other US federal or state securities commission or regulatory authority has reviewed, approved or disapproved this announcement or any of the proposals described in this announcement or passed an opinion on the accuracy or the adequacy of this announcement. Any representation to the contrary is a criminal offence in the United States.

Forward-Looking Statements

This announcement contains statements about Headway and Ludgate that are or may be forward-looking statements which are prospective in nature. All statements other than statements of historical facts may be forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "targets", "plans", "believes", "expects", "aims", "intends", "will", "should", "could", "would", "may", "anticipates", "estimates", "synergy", "cost-saving", "projects", "goal" or "strategy" or, words or terms of similar substance or the negative thereof. Forward-looking statements may include 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 Headway's or Ludgate's operations and potential synergies resulting from the Offer; and (iii) the effects of government regulation on Headway's or Ludgate's business.

These forward-looking statements are not guarantees of future performance. Such forward-looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward-looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this announcement. All subsequent oral or written forward-looking statements attributable to Headway or Ludgate or any of their respective members, directors, officers or employees or any persons acting on their behalf are expressly qualified in their entirety by the cautionary statement above. Headway and Ludgate disclaim any obligation to update any forward-looking or other statements contained in this announcement, except as required by applicable law or regulation.

No Profit Forecasts or Estimates

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

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) of the Code 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 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 of the Code. A Dealing Disclosure by a person to whom Rule 8.3(b) of the Code applies must be made by no later than 3.30 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 of the Code.

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 of the Code).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the 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.

Information relating to Ludgate Shareholders

Please be aware that addresses, electronic addresses and certain information provided by Ludgate Shareholders, persons with information rights and other relevant persons for the receipt of communications from Ludgate may be provided to Headway during the offer period as required under Section 4 of Appendix 4 of the Code to comply with Rule 2.11(c) of the Code.

Publication on Website and Availability of Hard Copies

A copy of this announcement will be available free of charge (subject to any applicable restrictions with respect to persons resident in Restricted Jurisdictions) on Ludgate's website www.ludgateenvironmental.com by no later than 12 noon on 22 December 2016.

Neither the contents of this website nor the content of any other website accessible from hyperlinks on such website is incorporated into, or forms part of, this announcement.

You may request a hard copy of this announcement (and any information incorporated by reference in this announcement), free of charge, by contacting Panmure Gordon during business hours on +44 (0) 20 7886 2500 or by submitting a request in writing to Panmure Gordon at One New Change, London EC4M 9AF. 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. Lines will be open between 9.00 am to 5.00 pm, Monday to Friday excluding public holidays in England and Wales. Unless you make such a request, a hard copy of this announcement and any such information incorporated by reference in it will not be sent to you. You may also request that all future documents, announcements and information to be sent to you in relation to the Offer be in hard copy form.

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 Disclosure

In accordance with Rule 2.9 of the Code, Ludgate confirms that at the date of this announcement it has 53,345,782 Ordinary Shares in issue and admitted to trading on AIM. The International Securities Identification Number of the Ordinary Shares is JE00B1YW3102.

Consents

GCA Altium and Panmure Gordon have given and not withdrawn their respective written consent to the publication of this announcement with the inclusion herein of the references to their respective names in the form and context in which they appear.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

21 December 2016

RECOMMED CASH OFFER

for

Ludgate Environmental Fund Limited ("Ludgate" or the "Company")

Headway Investment Partners III L.P. ("Headway")

   1.         Introduction

The general partner of Headway and the board of Ludgate are pleased to announce that they have reached agreement regarding the terms of a recommended cash offer to be made by Headway for the entire issued ordinary share capital of Ludgate (the "Offer"). The Offer is to be effected by means of a takeover offer within the meaning of Article 116 of the Jersey Companies Law.

   2.         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 Offer Document and, in respect of Ordinary Shares held in certificated form, the Form of Acceptance, Ludgate Shareholders will be entitled to receive:

   for each Ordinary Share                     16 pence in cash

The Offer Price values the entire issued ordinary share capital of Ludgate at approximately GBP8.5 million and represents:

-- a discount of approximately 8.6 per cent. to the Closing Price of 17.5 pence on 20 December 2016 (being the last Business Day prior to this announcement);

-- a premium of approximately 6.7 per cent. to the closing "bid" price of an Ordinary Share of 15.0 pence on 20 December 2016 (being the last Business Day prior to this announcement); and

-- a discount of approximately 22.7 per cent. to Ludgate's last published NAV per Ordinary Share of 20.7 pence as at 30 September 2016.

The Ordinary Shares will be acquired pursuant to the Offer fully paid and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and any other rights and interests of any nature whatsoever and together with all rights now and hereafter attaching thereto, including voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid on or after the date of this announcement.

If any dividend or other distribution or return of value is proposed, declared, made, paid or becomes payable by Ludgate in respect of the Ordinary Shares on or after the date of this announcement and prior to the Offer becoming or being declared unconditional in all respects, Headway will have the right to reduce the value of the consideration payable for each Ordinary Share by up to the amount per Ordinary Share of such dividend, distribution or return of value. If any such dividend, distribution or return of value is paid or made after the date of this announcement and Headway exercises its rights described above, any reference in this announcement to the consideration payable under the Offer shall be deemed to be a reference to the consideration as so reduced. Any exercise by Headway of its rights referred to in this paragraph shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the terms of the Offer.

   3.         Background to and reasons for the Offer

Headway (advised by Headway Capital) specialises in acquiring positions in funds with portfolios of private equity investments. Headway Capital has noted that the stated policy of the Ludgate Directors is to effect the systematic winding down of the Company's activities and the orderly disposal of the Ludgate Assets and that they are actively exploring ways of realising liquidity and value for Ludgate Shareholders. Headway Capital has also noted the material reduction in NAV per Ordinary Share since 30 June 2016. Headway Capital advised Headway to evaluate Ludgate as an investment opportunity as it believed that Headway could positively influence the run-off of the Ludgate Assets once it became a major Ludgate Shareholder.

Headway believes that the financial burden of managing and operating Ludgate as an AIM company has been disproportionate to the value of the Ludgate Assets. It further believes that very low liquidity in the Ordinary Shares will present significant difficulties for Ludgate Shareholders who seek to realise their investment in Ludgate at market prices. Headway further believes the Offer provides Ludgate Shareholders with a certain value, an opportunity to realise all (or part of) their investment for cash (with no transaction commissions or fees) and to mitigate the inherent risk of potential further diminution in value of the Ludgate Assets.

   4.         Proposed arrangements with Ludgate Investments

If the Offer becomes, or is declared, unconditional in all respects and, as a result, Headway becomes a majority shareholder in Ludgate, Ludgate will implement certain changes to the arrangements currently in place between Ludgate and Ludgate Investments under the Investment Advisory Agreement (the "Proposed Amendments").

Headway Capital (on behalf of Headway and in the interests of all Ludgate Shareholders (including Headway) who choose to retain Ordinary Shares once the Offer becomes, or is declared, unconditional in all respects "Continuing Ludgate Shareholders") has negotiated and entered into a non-binding term sheet with Ludgate Investments (the "Term Sheet"). It is intended that the Term Sheet will form the basis of the Proposed Amendments which will be documented in a new investment management agreement between Ludgate and Ludgate Investments (the "New IMA") which will, Headway believes, more effectively align the interests of Ludgate Investments with the Continuing Ludgate Shareholders with regard to optimising the disposal proceeds of the Ludgate Assets and creating shareholder value than does the current Investment Advisory Agreement.

The material elements of the Term Sheet (and, it is intended, the New IMA) are set out below:

-- The New IMA will be for a fixed three-year term, with the potential for two one-year extensions if approved by an advisory board to Ludgate which will be appointed by a majority of Continuing Ludgate Shareholders (the "Term"). The current Investment Advisory Agreement contains certain termination provisions including that it can be terminated by either party at 12 months' notice and shall automatically terminate on 30 June 2018, unless otherwise agreed by the parties;

-- The New IMA will entitle Continuing Ludgate Shareholders to receive audited annual accounts within 60 business days of the end of each annual accounting period and unaudited quarterly reports (containing details of the Ludgate Assets, including valuations) within 30 business days of each quarter end;

-- Fees payable to Ludgate Investments during the Term, which will include fees for certain portfolio duties (e.g. the preparation of quarterly investment reports) not currently undertaken by Ludgate Investments (the "Management Fees"), will consist of the following:

o a fixed base fee of GBP75,000 per annum; plus

o a supplement of GBP10,000 per annum per Ludgate Asset, provided such Ludgate Asset has not been realised or written-off, except that the amount for each of Rapid Action Packaging Limited ("RAP") and STX Services B.V. ("STX") (which together, as at 30 September 2016, accounted for a substantial majority of the NAV of Ludgate) shall be GBP75,000 per annum.

-- If the current portfolio of Ludgate Assets remains static, the annual Management Fees following the implementation of the New IMA are expected to be GBP275,000.

o In addition, Ludgate Investments will be entitled to continue to receive and retain up to GBP50,000 per annum from each of RAP and STX for the board / consulting services it provides to them.

-- Pursuant to the current Investment Advisory Agreement, Ludgate Investments receives advisory fees calculated at 2.0 per cent. of Ludgate's adjusted NAV, payable quarterly. In the year ended 30 June 2016, Ludgate Investments received advisory fees of GBP507,664 (2015: GBP670,290). For the three months ended 30 September 2016 (based on the adjusted NAV as at 30 June 2016), Ludgate Investments received advisory fees of GBP74,417 and for the three months ending 31 December 2016 (based on the adjusted NAV at 30 September 2016) Ludgate Investments received advisory fees of GBP55,213.

-- Ludgate will bear all of its own operating fees and expenses incurred during the remaining life of Ludgate. Ludgate Investments will be responsible for all of its own normal overhead and administrative costs including salaries and benefits, rent and office furniture, and shall not be entitled to recover such costs from Continuing Ludgate Shareholders or Ludgate.

-- Under the current Investment Advisory Agreement, Ludgate Investments is entitled, subject to certain conditions and a retention agreement, to an annual performance fee of 20 per cent. of the amount by which Ludgate's adjusted NAV exceeds performance hurdles over the course of each annual performance period. In the year ended 30 June 2016, Ludgate Investments received a performance fee of GBPnil (2015: GBPnil). Based on an assessment of the application of the performance fee arrangements in the Investment Advisory Agreement, the Ludgate Directors have estimated that in order for Ludgate Investments to be entitled to a performance fee under the Investment Advisory Agreement, distributions to Ludgate Shareholders would have to reach approximately 83.8 pence per Ordinary Share by 30 June 2017. The Ludgate Directors do not, therefore, anticipate that any performance fee will be payable to Ludgate Investments under the Investment Advisory Agreement.

-- It is proposed that the performance fee potentially payable to Ludgate Investments pursuant to the New IMA will be reset and tiered with the objective of providing a more effective incentive for Ludgate Investments to optimise value for Continuing Ludgate Shareholders during the Term (the "Carried Interest").

-- No Carried Interest shall become payable until such time as Continuing Ludgate Shareholders have received distributions from Ludgate equivalent to the Cost Base (as defined below) plus an 8.0 per cent. compounded annual return (the "Hurdle").

-- Distributions made by Ludgate thereafter shall be initially be paid as to 100 per cent. to Ludgate Investments until such time as the amount paid to Ludgate Investments stands in the relevant proportion (as described below) to the aggregate amounts previously distributed to Continuing Ludgate Shareholders (the "Catch Up"), following which any amounts distributed by Ludgate shall be split between Continuing Ludgate Shareholders and Ludgate Investments in the relevant proportion. More specifically, where subsequent distributions would deliver a return which results in a change in the relevant proportion, at the point of such change, the Catch Up will apply again until such time as the amount paid to Ludgate Investments stands in the relevant proportion to which it is then entitled.

   --     The relevant proportion shall be:

-- 90 per cent. to Continuing Ludgate Shareholders / 10 per cent. to Ludgate Investments whenever the aggregate amount distributed to Continuing Ludgate Shareholders is between the Cost Base plus the Hurdle and 1.5x the Cost Base;

-- 85 per cent. to Continuing Ludgate Shareholders / 15 per cent. to Ludgate Investments whenever the aggregate amount distributed to Continuing Ludgate Shareholders is between the Cost Base plus the Hurdle or 1.5x the Cost Base (whichever is the higher) and 2.0x the Cost Base;

-- 80 per cent. to Continuing Ludgate Shareholders / 20 per cent. to Ludgate Investments once the aggregate amount distributed to Continuing Ludgate Shareholders exceeds the Cost Base plus the Hurdle or 2.0x the Cost Base (whichever is the higher).

-- The Cost Base shall be the sum of: (i) the product of the Offer Price and the number of Ordinary Shares in issue at the date of this announcement; (ii) any transaction costs incurred by Ludgate in relation to the Offer and the Cancellation not already covered by Ludgate's cash balance; and (iii) the costs of Headway and Headway Capital in relation to the Offer and the Cancellation.

-- A key persons provision is proposed such that at least one of Gijs Voskamp or Ekaterina Sharashidze, both currently directors of Ludgate Investments, must remain active with regards Ludgate and the Ludgate Assets for the remaining life of Ludgate.

Full details of the Proposed Amendments and the New IMA will be published with the Offer Document.

Pursuant to Rule 16 of the Code, the Proposed Amendments require the approval on a poll by an ordinary resolution of Independent Shareholders at a general meeting of Ludgate. The Offer is therefore conditional, amongst other things, upon such approval being obtained. Accordingly, at the Independent Shareholders Meeting a resolution will be proposed to approve the Proposed Amendments. Voting on this resolution will be on a poll. Subject to the approval of the Proposed Amendments by Independent Shareholders and the necessary regulatory approvals being obtained following the Offer having become or being declared unconditional in all respects, it is intended that the New IMA will be entered into by Ludgate and Ludgate Investments following the Cancellation.

Panmure Gordon has advised the Ludgate Directors that the terms of the Proposed Amendments are fair and reasonable for the purposes of Rule 16 of the Code. In providing advice to the Ludgate Directors, Panmure Gordon has taken into account the commercial assessments of the Ludgate Directors. Accordingly, by virtue of the fact that the Offer is conditional on the approval of the Proposed Amendments by Independent Shareholders and in light of the Ludgate Directors intention to recommend unanimously that Ludgate Shareholders accept the Offer, the Ludgate Directors also intend unanimously to recommend that Independent Shareholders vote in favour of the resolution to be proposed at the Independent Shareholders Meeting.

The Ludgate Director who holds Ordinary Shares has irrevocably undertaken to accept the Offer and to vote in favour of the resolution to be proposed at the Independent Shareholders Meeting in respect of his own beneficial holding of 115,445 Ordinary Shares, representing approximately 0.22 per cent. of the Ordinary Shares in issue on 20 December 2016 (being the last Business Day prior to this announcement).

Headway considers that the Proposed Amendments are key to more effectively aligning the interests of Ludgate Investments with Continuing Ludgate Shareholders with regard to optimising the disposal of the Ludgate Assets and creating shareholder value. Therefore, if Independent Shareholders do not pass the relevant resolution at the Independent Shareholders Meeting approving the Proposed Amendments and thus that Condition is not met, Headway may seek to lapse the Offer.

Ludgate Investments directly holds 664,000 Ordinary Shares representing approximately 1.24 per cent. of the Ordinary Shares in issue on 20 December 2016 (being the last Business Day prior to this announcement). Ludgate Investments is a wholly owned subsidiary of Ludgate Capital Limited ("LCL"). Gijs Voskamp, CEO of Ludgate Investments, is interested in LCL through an 80 per cent. shareholding in Ocean Capital Investments BV ("OCI"), which holds 74.87 per cent. of LCL. The other 20 per cent of OCI is held by Jeroen Voskamp, who is also a director of Ludgate Investments. Jeroen Voskamp also has a 5.98 per cent shareholding in LCL through J.H.J Voskamp Beheer B.V. Three individuals who are all minority shareholders of LCL hold, in aggregate, 115,000 Ordinary Shares representing approximately 0.22 per cent. of the Ordinary Shares in issue on 20 December 2016 (being the last Business Day prior to this announcement). In addition, Ocean Capital Holdings II B.V. ("Ocean"), an investment vehicle owned by Gijs and Jeroen Voskamp holds 5,839,798 Ordinary Shares representing approximately 10.95 per cent. of the Ordinary Shares in issue on 20 December 2016 (being the last Business Day prior to this announcement). None of the above are considered to be Independent Shareholders for the purposes of the resolution to be proposed at the Independent Shareholders Meeting and, therefore, will not be entitled to vote on such resolution.

Both Ludgate Investments and Ocean have irrevocably undertaken to Headway: (i) not to accept the Offer; and (ii) to vote in favour of the Cancellation Resolution. Further details of these irrevocable undertakings are set out in Appendix III to this announcement.

Headway and Ludgate Investments have both confirmed to Ludgate that there are no other arrangements between them in relation to the Offer other than those summarised on this announcement.

   5.         Headway's additional plans for Ludgate

Headway notes that, as a collective investment fund pursuant to the CIF Law, Ludgate has no employees or locations of business. The governance of Ludgate is the responsibility of its board of directors and its day-to-day management and administration is delegated, by the Ludgate Directors, to a number of external parties.

If the Offer is declared or becomes unconditional in all respects, Headway would seek the appointment of a Headway representative to the board of directors of Ludgate and would also look to optimise the ongoing cost base and administration of Ludgate. In particular, on the assumption that the Cancellation occurs (as per the procedures set out in paragraph 15 below) and that Ludgate is operated and regulated as an unlisted entity, Headway believes that, excluding the Management Fee and any Carried Interest payable under the New IMA, cost savings may be able to be achieved over the current cost base of Ludgate which will help to minimise the cash expense drag on the value of the Ludgate Assets.

Each of the current Ludgate Directors has agreed to resign from the board of Ludgate upon, or following an appropriate period of transition from, the Cancellation. Headway intends that the board of Ludgate following the Cancellation will reflect the ongoing regulatory requirements imposed by the JFSC for the administration of Ludgate and that it will remain independent of Ludgate Investments.

   6.         Recommendation of the Ludgate Directors regarding the Offer

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

Accordingly, the Ludgate Directors intend unanimously to recommend that Ludgate Shareholders accept the Offer, as the Ludgate Director who holds Ordinary Shares has irrevocably undertaken to do so in respect of his 115,445 Ordinary Shares, representing approximately 0.22 per cent. of the Ordinary Shares in issue on 20 December 2016 (being the last Business Day prior to this announcement).

The recommendation of the Offer by the Ludgate Directors has been made on the basis of the factors set out in paragraph 7 below, outlining the background to and reasons for their recommendation, which are viewed by the Ludgate Directors as being material to the making of their recommendation.

   7.         Background to and reasons for the Ludgate Directors' recommendations

Since the revision to its investment policy approved by Ludgate Shareholders in 2014, Ludgate has been managing its portfolio in order to achieve a realisation of assets and to distribute the net proceeds to Ludgate Shareholders by the wind up date of Ludgate on 30 June 2018.

Various factors have led to a deterioration in the NAV of Ludgate over this period. The costs of running Ludgate have become relatively high in comparison to the value of the remaining Ludgate Assets. The Ordinary Shares have also traded at a wide discount to NAV, further eroding Ludgate Shareholder value. There has also been very limited liquidity, even at the discounted market price.

Whilst the Offer Price represents a discount of approximately 22.7 per cent. to the last published unaudited NAV per Ordinary Share of 20.7 pence (as at 30 September 2016), in making their recommendation, the Ludgate Directors have taken account of the following factors:

-- the Ordinary Shares have consistently traded at a significant discount to NAV per Ordinary Share;

-- it is understood by the Ludgate Directors that a majority of Ludgate Shareholders wish to realise their investment in Ordinary Shares;

-- liquidity in the Ordinary Shares is so low that there is little prospect of Ludgate Shareholders being able to sell their Ordinary Shares through the market at or near to the market price;

-- the Ludgate Assets are themselves illiquid and there is uncertainty as to how long it would take Ludgate to effect their orderly disposal;

-- the ascribed valuations of the Ludgate Assets, from which the NAV per Ordinary Share is derived, are subjective. The actual prices eventually realised for the Ludgate Assets may differ from the Ludgate Directors' assumed valuations and may be lower;

-- until individual Ludgate Assets are realised there is residual risk that both their value will decline further and the discount to NAV in respect of the price per Ordinary Share will increase; and

-- the latest published NAV per Ordinary Share takes no account of the future costs of running Ludgate, nor the costs of the disposals of individual Ludgate Assets, nor the cost of distributing cash to Ludgate Shareholders and winding up Ludgate.

In making their recommendation of the Offer, the Ludgate Directors have also taken into consideration the expressed intentions of Headway relating to Ludgate as detailed in paragraph 5 above. In considering whether or not to accept the Offer, Ludgate Shareholders should note in particular that:

-- if the Offer becomes or is declared unconditional in all respects Headway will become the majority (controlling) Ludgate Shareholder and will be able to influence the future of Ludgate largely as it sees fit;

-- it is intended that the admission to trading of the Ordinary Shares on AIM will be cancelled, thus removing a layer of protection of the interests of minority Ludgate Shareholders afforded by the AIM Rules;

-- whilst under Jersey law and regulation Ludgate may (depending on the JFSC's determination of its regulatory status in anticipation of the Cancellation) still be subject to disclosure obligations, these may be less demanding on Ludgate than the level of disclosure required under the AIM Rules; and

-- there will be no secondary market in the Ordinary Shares and no price for Ordinary Shares will be quoted by any market maker.

In making their recommendation to Independent Shareholders to approve the Proposed Amendments at the Independent Shareholders Meeting, the Ludgate Directors have taken into consideration the following factors:

-- the majority of Ludgate Shareholders are expected to accept the Offer and the Offer is conditional, inter alia, on the Proposed Amendments being agreed;

-- all Ludgate Shareholders who wish to exit their investment in Ludgate have the ability to do so pursuant to the Offer, albeit that the Offer Price is at a significant discount to the Ludgate's most recently published NAV per Ordinary Share; and

-- Headway, which will become the majority controlling shareholder of Ludgate if the Offer becomes or is declared unconditional in all respects, has confirmed to the Ludgate Directors that it considers all of the Proposed Amendments to be appropriate in aligning the interests of Continuing Ludgate Shareholders with those of Ludgate Investments.

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

In addition to the irrevocable undertaking received from the Ludgate Director who holds Ordinary Shares, referred to in paragraph 6 above, Headway has received irrevocable undertakings from certain other Ludgate Shareholders to accept the Offer in respect of 16,337,579 Ordinary Shares in aggregate, representing approximately 30.63 per cent. of the Ordinary Shares in issue on 20 December 2016 (being the last Business Day prior to this announcement) and to vote in favour of the resolution to be proposed at the Independent Shareholder Meeting, in respect of a total of 25,797,961 Ordinary Shares, representing approximately 48.36 per cent. of the Ordinary Shares in issue on 20 December 2016 (being the last Business Day prior to this announcement).

In addition, Headway has received a letter of intent from a Ludgate Shareholder to accept the Offer and vote in favour of the resolution to be proposed at the Independent Shareholder Meeting, in respect of 2,159,000 Ordinary Shares, representing approximately 4.05 per cent. of the Ordinary Shares in issue on 20 December 2016 (being the last Business Day prior to this announcement).

Headway has therefore received irrevocable undertakings or a letter of intent to accept the Offer in respect of 18,612,024 Ordinary Shares in aggregate, representing approximately 34.89 per cent. of the Ordinary Shares in issue on 20 December 2016 (being the last Business Day prior to this announcement) and to vote in favour of the resolution to be proposed at the Independent Shareholder Meeting in respect of 28,072,406 Ordinary Shares in aggregate, representing approximately 52.62 per cent. of the Ordinary Shares in issue on 20 December 2016 (being the last Business Day prior to this announcement).

Further details of these irrevocable undertakings and letter of intent are set out in Appendix III to this announcement.

   9.         Information on Headway and Headway Capital

Headway is structured as a Scottish limited partnership where the day to day management and control is the responsibility of its general partner. Headway's limited partners consist of institutional investors and family offices from Europe, the United States and elsewhere. Headway is currently investing from a fund which closed in November 2013 with total commitments of EUR175 million and which was approximately 71 per cent. drawn as at 20 December 2016 (the last Business Day prior to this announcement). Headway is a successor fund to three secondary funds advised by Headway Capital and its primary objective is to acquire interests in private equity investments through secondary market transactions, principally in Western Europe and North America. Headway seeks to build a diversified portfolio of private equity partnership interests, portfolios of direct investments in private companies and structured secondary transactions. Headway invests across all industry sectors and geographies and can commit up to EUR30 million to a single portfolio transaction.

Headway has executed a wide range of complex secondary transactions including: (i) the purchase of a portfolio of UK and US assets from an investment trust previously traded on AIM for a total purchase price of approximately GBP10.5 million; (ii) the restructuring of an end-of-life European buyout fund which provided final liquidity for selling investors and re-aligned management and governance terms for investors who opted to roll over; and (iii) the acquisition of the assets of a small-cap Dutch buyout fund which provided required liquidity to investors while assuring continuity of support for the portfolio companies.

Headway is advised by Headway Capital, an independent private equity secondary firm which is authorised and regulated by the FCA. Headway Capital evaluates secondary investment opportunities for its advisory client base and currently advises four funds (including Headway) with in excess of EUR400 million of combined commitments. Headway Capital evaluates opportunities on a global basis but focuses on Western Europe and the United States. Headway Capital's three partners have worked together for over 15 years, including previously at Coller Capital before spinning out together to form Headway Capital in 2004.

   10.       Information on Ludgate and the Ludgate Assets

Ludgate is a Jersey domiciled, closed-ended investment company which was incorporated on 7 June 2007 and is regulated by the JFSC pursuant to the CIF Law. The Ordinary Shares are admitted to trading on AIM.

During its investment period between June 2007 and June 2012, Ludgate invested in a broad portfolio of private and listed growth companies in the resource efficiency space including energy efficient, renewable energy generation, storage, recycling, industrial efficiencies and emission reduction technologies.

On 1 September 2014, Ludgate Shareholders approved the recommendation of the Ludgate Directors to extend the life of Ludgate to 30 June 2018. Ludgate Shareholders also approved a revised investment policy to effect the systematic winding down of the activities of Ludgate and the disposal of the Ludgate Assets in such a way as to seek to achieve the maximum possible value for Ludgate Shareholders. In order to effect such a winding down, Ludgate's key strategy is to dispose of its portfolio of investments and any other assets and to exercise all legal rights of Ludgate over time in such a way as to maximise Ludgate Shareholder value and to take any such other action so as to enable it to realise its assets.

Ludgate maintains a concentrated portfolio consisting of investments in two listed and three private companies. The existing investments are monitored by Ludgate's investment adviser; Ludgate Investments, with a view to achieving liquidity to make periodic returns of capital to Ludgate Shareholders. The NAV of the remaining Ludgate Assets is materially lower than the NAV of the original portfolio of Ludgate Assets.

Ludgate's audited NAV as at 30 June 2016 was GBP14.09 million (2015: GBP32.3 million), equivalent to 26.4 pence per Ordinary Share (2015: 60.6 pence per Ordinary Share). On 20 October 2016, Ludgate announced unaudited NAV per Ordinary Share as at 30 September 2016 of 20.7 pence.

Two of the Ludgate Assets, Rapid Action Packaging Limited ("RAP") and STX Services B.V. ("STX"), both private companies, make up a substantial majority of the total NAV of Ludgate.

RAP

RAP designs, manufactures and supplies innovative, cost effective and environmentally responsible packaging systems particularly for the "food on the move" market.

In its financial year ended 30 September 2015 (as per Ludgate's audited annual report and financial statements for the year ended 30 June 2016), RAP recorded a 3.7 per cent. decrease in revenues to GBP19.9 million (2014: GBP20.7 million). Following the Brexit vote in June 2016, RAP was impacted by the depreciation of sterling as its costs of production are in euros and the majority of its revenues are received in sterling. RAP has commissioned an automation project with the intention of improving efficiency and reducing cost. The implementation of this project has been delayed beyond the date contemplated by Ludgate's audited report and financial statements for the year ended 30 June 2016. RAP has invested in additional production capacity, expected to become operational in Q1 2017, which should expand its total capacity by circa 65 per cent.

STX

STX is an Amsterdam-based brokerage company specialising in environmental financial products with a particular focus on the carbon markets. STX has mostly been active in EU Emission Allowances, Certified Emission Reductions, biofuel tickets, green certificates and other environmental trading certificates and physical commodities, including waste across European markets.

The performance of STX in the previous and current year has been below expectations. As a result, it has been agreed in principle between the shareholders of STX to offer to executive management a restructuring of the existing short term incentive based system which predominantly consists of bonuses, towards a long-term incentive based structure where executive management acquires a larger equity exposure in STX. If implemented, this will result in the dilution of the holdings of the other shareholders of STX (including Ludgate), which will be partially offset by reduced operational costs and, as a result, higher potential profit margins. This restructuring, which is subject to regulatory consent, has not yet been recorded in definitive documents and, as at the date of this announcement, it is therefore not known when the restructuring will take effect (if at all). With the overall environmental commodity market in decline, STX is actively looking to diversify into other products and markets.

   11.       Financing the Offer

The cash consideration payable to Ludgate Shareholders under the terms of the Offer will be financed from the internal cash resources of Headway.

GCA Altium, financial adviser to Headway, is satisfied that sufficient resources are available to Headway to satisfy in full the aggregate cash consideration payable to Ludgate Shareholders in the event of full acceptance of the Offer.

   12.       Offer-related arrangements

On 23 November 2016, Headway Capital (on behalf of Headway) and Ludgate entered into a confidentiality agreement in relation to the Offer, pursuant to which they each undertook, subject to certain exceptions, to keep information relating to one another confidential and to not disclose it to third parties. Unless terminated earlier, the confidentiality obligations will remain in force for 24 months from the date of the agreement. A similar confidentiality agreement was also entered into between Headway Capital and Ludgate Investments on 4 April 2016.

   13.       Conditions to the Offer

The Offer will be effected by means of a takeover offer within the meaning of Article 116 of the Jersey Companies Law.

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 Offer Document and, in respect of Ordinary Shares held in certificated form, the Form of Acceptance.

The Offer will be conditional, inter alia, upon:

-- Headway receiving valid acceptances (which have not been withdrawn) in respect of the Ordinary Shares which represent more than 50 per cent. of the Ordinary Shares to which the Offer relates and of the voting rights attaching to those Ordinary Shares;

-- the approval by an ordinary resolution on a poll of Independent Shareholders at the Independent Shareholders Meeting of the Proposed Amendments; and

-- the other Conditions and further terms not otherwise identified above to which the Offer is subject as set out in Appendix 1 to this announcement and to be set out in the Offer Document either being satisfied or (with the exception of certain conditions which are not capable of waiver) waived.

The Offer is not subject to JFSC approval.

The Offer Document (together with, for those Ordinary Shares in certificated form, the Form of Acceptance) will contain the full terms and conditions of the Offer.

   14.       Disclosure of interests in Ludgate

As at the close of business on 20 December 2016, being the last Business Day prior to the date of this announcement, save for the irrevocable undertakings and letter of intent referred to in paragraph 8 above, none of Headway or, so far as Headway is aware, any person acting, or deemed to be acting, in concert with Headway:

   --     had an interest in, or right to subscribe for, relevant securities of Ludgate;

-- had any short position in (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 of, relevant securities of Ludgate;

-- had procured an irrevocable commitment or letter of intent to accept the terms of the Offer in respect of relevant securities of Ludgate; or

-- had borrowed or lent (including, for these purposes, entering into any financial collateral arrangements of the kind referred to in Note 4 on Rule 4.6 of the Code) any relevant securities of Ludgate save for any borrowed relevant securities of Ludgate which have been either on-lent or sold.

Furthermore, save for the irrevocable undertakings and letter of intent described in paragraph 8 above, no arrangement exists between Headway or Ludgate or a person acting in concert with Headway or Ludgate in relation to Ordinary Shares. For these purposes, an "arrangement" includes any indemnity or option arrangement, any agreement or any understanding, formal or informal, of whatever nature, relating to Ordinary Shares which may be an inducement to deal or refrain from dealing in such securities.

In this paragraph 14, "relevant securities of Ludgate" means Ordinary Shares and securities convertible into, or rights to subscribe for, options (including traded options) in respect thereof and derivatives referenced thereto.

   15.       Cancellation of admission to trading on AIM and ongoing JFSC regulation

If the Offer becomes, or is declared, unconditional in all respects and Headway receives valid acceptances in respect of Ordinary Shares which, represent more than 50 per cent. but not more than 74.99 per cent. of the voting rights attaching to the Ordinary Shares, the Ludgate Directors (subject to Ludgate obtaining the necessary regulatory approval) intend to convene a general meeting of Ludgate, in accordance with Rule 41 of the AIM Rules, at which a special resolution (the "Cancellation Resolution") seeking the consent of Ludgate Shareholders to cancel the admission to trading on AIM of the Ordinary Shares will be proposed. To be passed, the Cancellation Resolution will require not less than 75 per cent. of votes cast by Ludgate Shareholders on a poll (either in person or by proxy) to be in favour of the Cancellation Resolution.

Headway will vote the Ordinary Shares it becomes interested in as a result of the Offer in favour of the Cancellation Resolution and has received irrevocable undertakings from certain other Ludgate Shareholders, including Ludgate Investments and Ocean Capital Holdings II B.V. (the investment vehicle of Gijs and Jeroen Voskamp who are both directors of Ludgate Investments), to vote in favour of the Cancellation Resolution in respect of 15,964,180 Ordinary Shares in aggregate, representing approximately 29.93 per cent. of the Ordinary Shares in issue on 20 December 2016 (being the last Business Day prior to this announcement). Further details of these irrevocable undertakings are set out in Appendix III to this announcement.

If the Offer becomes, or is declared, unconditional in all respects and Headway receives valid acceptances in respect of Ordinary Shares which represent not less than 75 per cent. of the voting rights attaching to the Ordinary Shares, Headway intends to procure that the Ludgate Directors (subject to Ludgate obtaining the necessary regulatory approval) will make an application for Cancellation.

The Company is presently regulated by the JFSC as a Listed Fund pursuant to the JFSC's Listed Fund Guide and related legislation, regulation and guidance. One consequence of the passing of the Cancellation Resolution is that the Company will no longer meet the criteria to be so regulated because it will no longer have securities admitted to trading on a stock exchange and therefore its regulatory status will need to change accordingly.

Prior to the Cancellation, Ludgate will be required to make an application to the JFSC to seek its consent in respect of the Cancellation and to change its regulatory status. If such an application to the JFSC is made then a general meeting of Ludgate to propose the Cancellation Resolution shall be called or an application by Ludgate Directors in respect of the Cancellation shall be made (as the case may be) once the JFSC has provided its consent for the Cancellation and has confirmed Ludgate's revised regulatory status in the event of a Cancellation. Further information in respect of this is and any associated timeframes are expected to be provided in conjunction with the Cancellation Resolution. Any associated approvals required to extend the life of Ludgate and / or effect changes to Ludgate's existing investment policy will be sought from Ludgate Shareholders at the time of the Cancellation.

Cancellation is likely to reduce significantly the liquidity and marketability of any Ordinary Shares in respect of which the Offer has not at such time been accepted.

The regulatory status in Jersey of Ludgate following Cancellation will be subject to prior agreement with the JFSC and based on the composition of the shareholder register of Ludgate following completion of the Offer. That status could be as an unclassified collective investment fund regulated under the CIF Law, in which case the level of regulation to which Ludgate is subject may increase, or that status may be as an unregulated holding company, which would not be subject to the various protections prescribed pursuant to the CIF Law and could reduce the level of regulation to which Ludgate would be subject. In any event, Headway believes that it can reduce Ludgate's annual administration expenditure in Jersey as a result of the reduced regulation and/or any reallocation of the Company's administrative services. In addition, depending on the options available, and the anticipated impact on the cash expense drag on the value of the Ludgate Assets, consideration may be given to a corporate restructuring which could involve the restructuring or re-domicile of Ludgate.

If the Offer becomes, or is declared, unconditional in all respects and Headway receives acceptances of the Offer in respect of, not less than 90 per cent. in number of the Ordinary Shares to which the Offer relates, Headway may exercise its rights pursuant to Article 117 to 118 of the Jersey Companies Law to acquire compulsorily, on the same terms as the Offer, the remaining Ordinary Shares in respect of which the Offer has not at such time been accepted.

   16.       Overseas Shareholders

The release, publication or distribution of this announcement and the availability of the Offer to persons not resident in the United Kingdom may be affected by the laws of the jurisdiction in which they are resident. Persons who are resident in any jurisdiction or territory other than the United Kingdom should obtain professional advice and observe any applicable legal or regulatory requirements. Further details in relation to overseas Shareholders will be contained in the Offer Document. If you are in any doubt, you should consult your professional adviser in the relevant jurisdiction without delay.

   17.       Documents available on website

Copies of the following documents will be made available on Ludgate's website at www.ludgateenvironmental.com by no later than 12 noon on 22 December 2016 until the end of the Offer Period:

   --     this announcement; 
   --     the irrevocable undertakings and letter of intent referred to in paragraphs 8 and 15 above; 
   --     the signed Term Sheet referred to in paragraph 4 above; and 
   --     the confidentiality agreements referred to in paragraph 12 above.

Neither the contents of Ludgate's website, nor the content of any other website accessible from hyperlinks on such website, is incorporated into or forms part of, this announcement.

 
 Enquiries: 
 Headway Capital (Investment          Tel: +44 (0) 
  Adviser to Headway)                  20 7518 8878 
 Christiaan de Lint 
 GCA Altium (Financial Adviser        Tel: +44 (0) 
  to Headway)                          20 7484 4040 
 Tim Richardson / Declan O'Connor 
 Ludgate Environmental Fund Limited   Tel: +44 (0) 
                                       1534 609034 
 John Shakeshaft (Chairman) 
 Panmure Gordon (Rule 3 Adviser       Tel: +44 (0) 
  to Ludgate)                          20 7886 2500 
 Paul Fincham / Jonathan Becher

IMPORTANT NOTICES

Disclaimers

This announcement does not constitute a prospectus or prospectus equivalent document.

In accordance with normal practice in the United Kingdom and Jersey, Headway or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, Ordinary Shares, other than pursuant to the Offer, until the date on which the Offer becomes or is declared wholly unconditional, lapses or is otherwise withdrawn. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases 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.

Overseas Shareholders

Notice to US Investors

Forward-Looking Statements

No Profit Forecasts or Estimates

Disclosure Requirements of the Code

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the 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.

Information relating to Ludgate Shareholders

Publication on Website and Availability of Hard Copies

Neither the contents of this website nor the content of any other website accessible from hyperlinks on such website is incorporated into, or forms part of, this announcement.

You may request a hard copy of this announcement (and any information incorporated by reference in this announcement), free of charge, by contacting Panmure Gordon during business hours on +44 (0) 20 7886 2500or by submitting a request in writing to Panmure Gordon at One New Change, London EC4M 9AF . 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. Lines will be open between 9.00 am to 5.00 pm, Monday to Friday excluding public holidays in England and Wales. Unless you make such a request, a hard copy of this announcement and any such information incorporated by reference in it will not be sent to you. You may also request that all future documents, announcements and information to be sent to you in relation to the Offer be in hard copy form.

Rounding

Rule 2.9 Disclosure

In accordance with Rule 2.9 of the Code, Ludgate confirms that at the date of this announcement it has 53,345,782 Ordinary Shares in issue. The International Securities Identification Number of the Ordinary Shares is JE00B1YW3102.

Consents

GCA Altium and Panmure Gordon have each given and not withdrawn their respective written consent to the publication of this announcement with the inclusion herein of the references to their respective names in the form and context in which they appear.

APPIX I

THE CONDITIONS AND CERTAIN FURTHER TERMS OF THE OFFER

Part A: The Conditions

Subject to the provisions of Part B of this Appendix I and the requirements of the Panel, the Offer will be conditional upon the satisfaction or, where relevant, waiver of the following Conditions:

Acceptance Condition

(a) valid acceptances of the Offer being received (and not, where permitted, withdrawn) by no later than 1.00 p.m. (London time) on the First Closing Date (or such later time(s) and/or date(s) as Headway may, in accordance with the City Code or with the consent of the Panel, decide) in respect of more than 50 per cent. of the Ordinary Shares to which the Offer relates and of the voting rights attached to those shares, including for this purpose (except to the extent otherwise agreed by the Panel) any such voting rights attaching to Ordinary Shares that are unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances whether pursuant to the exercise of any outstanding subscription or conversion rights or otherwise.

For the purposes of this condition:

(i) Ordinary Shares which have been unconditionally allotted but not issued shall be deemed to carry the voting rights they will carry upon being entered into the register of members of Ludgate;

(ii) Ordinary Shares that cease to be held in treasury are Ordinary Shares to which the Offer relates; and

(iii) the expression "Ordinary Shares to which the Offer relates" shall be construed in accordance with Article 116 of the Jersey Companies Law;

Independent Shareholder approval

(b) the passing at the Independent Shareholders Meeting (or any adjournment thereof) of an ordinary resolution on a poll of Independent Shareholders to approve the Proposed Amendments;

Regulatory

(c) other than any approval of the JFSC required in relation to the Offer, all necessary notifications, filings and applications ("Regulatory Approvals") having been made and all applicable waiting and other time periods (including any extensions thereof) having expired, lapsed or been terminated in each case under any applicable legislation and any regulations in any jurisdiction and all statutory or regulatory obligations in any jurisdiction having been complied with in each case in connection with the Offer or its implementation or the acquisition or proposed acquisition of any shares or other securities in, or control or management of, Ludgate or any other member of the Wider Ludgate Group by Headway or any other member of the Headway Group or the carrying on by any member of the Wider Ludgate Group of its business where the absence of such Regulatory Approvals would have a material adverse effect on the Headway Group or the Ludgate Group, in either case taken as a whole or in the context of the Offer;

Other third party clearances

(d) no government or governmental, quasi-governmental, supranational, statutory, administrative or regulatory body or association, institution or agency (including any trade agency) or any court or other body (including any professional or environmental body) or person in any jurisdiction (each a "Relevant Authority") having decided to take, institute or threaten any action, proceeding, suit, investigation, enquiry or reference or enacted, made or proposed and there not continuing to be outstanding any statute, regulation, order or decision that would or might reasonably be expected to (in any case which is material in the context of the Offer):

(i) make the acquisition or the proposed acquisition of Ordinary Shares, or control or management of Ludgate by Headway or any member of the Headway Group void, unenforceable or illegal in any jurisdiction or directly or indirectly prohibit or otherwise restrict, delay or interfere with the implementation of, or impose additional conditions or obligations with respect to, or otherwise challenge or require amendment to the terms of, the Offer or the proposed acquisition of any Ordinary Shares, or control or management of Ludgate by Headway or any member of the Headway Group to an extent which is material in the context of the Headway Group or the Wider Ludgate Group taken as a whole;

(ii) require, prevent or delay the divestiture (or alter the terms of any proposed divestiture) by the Headway Group or the Wider Ludgate Group of all or any part of their respective businesses, assets or properties or impose any limitation on their ability to conduct all or any part of their respective businesses and to own, control or manage any of their respective assets or properties to an extent which is, in any such case, material in the context of the Headway Group or the Wider Ludgate Group taken as a whole;

(iii) impose any limitation on, or result in any delay in, the ability of any member of the Headway Group to acquire or hold or to exercise effectively, directly or indirectly, all or any rights of ownership of shares or other securities (or the equivalent) in, or to exercise management control over, any member of the Wider Ludgate Group or on the ability of the Wider Ludgate Group to hold or exercise effectively, directly or indirectly, all or any rights of ownership of shares or other securities (or the equivalent) in, or to exercise management control over, any other member of the Wider Ludgate Group to an extent which is material in the context of the Headway Group or the Wider Ludgate Group taken as a whole;

(iv) require any member of the Headway Group or of the Wider Ludgate Group to acquire or offer to acquire any shares or other securities (or the equivalent) or interest in any member of the Wider Ludgate Group or any member of the Headway Group owned by a third party (other than in the implementation of the Offer) where such acquisition would be material in the context of the Headway Group or the Wider Ludgate Group taken as a whole;

(v) require the divestiture by any member of the Headway Group of any shares, securities or other interests in any member of the Wider Ludgate Group to an extent which is material in the context of the Headway Group or the Wider Ludgate Group taken as a whole;

(vi) impose any limitation on, or result in any delay in, the ability of any member of the Headway Group or the Wider Ludgate Group to integrate or co-ordinate its business, or any part of it, with the businesses or any part of the businesses of any other member of the Headway Group and/or the Wider Ludgate Group in a manner which is material and adverse in the context of the Headway Group or the Wider Ludgate Group taken as a whole;

(vii) result in any member of the Headway Group or the Wider Ludgate Group ceasing to be able to carry on business under any name under which it presently does so in a manner which is material and adverse in the context of the Headway Group or the Wider Ludgate Group taken as a whole; or

(viii) otherwise adversely affect the business, assets, financial or trading position or profits or prospects of any member of the Headway Group or the Wider Ludgate Group in each case in a manner which is material in the context of the Headway Group or the Wider Ludgate Group taken as a whole,

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

(e) other than in relation to the regulatory approvals referred to in paragraphs (c) and (d) above, all material filings, applications and/or notifications ("Filings") which are necessary or reasonably considered appropriate by Headway having been made and all relevant waiting periods and other time periods (including any extensions thereof) under any applicable legislation or regulation of any jurisdiction having expired, lapsed or been terminated and all applicable statutory or regulatory obligations in any jurisdiction having been complied with in each case in respect of the Offer and the acquisition or the proposed acquisition of any shares or other securities in, or control or management of, Ludgate or any member of the Wider Ludgate Group by any member of the Headway Group or the carrying on by any member of the Wider Ludgate Group of its business where the absence of such Filings would have a material adverse effect on the Headway Group or the Ludgate Group, in either case taken as a whole, or in the context of the Offer;

(f) other than in relation to the regulatory approvals referred to in paragraphs (b) and (c) above, all material authorisations, orders, grants, recognitions, confirmations, licences, consents, clearances, permissions and approvals ("Authorisations") which are necessary or reasonably considered appropriate by Headway in any jurisdiction for or in respect of the Offer and the proposed acquisition of Ordinary Shares, or control of Ludgate, by Headway or any member of the Headway Group being obtained on terms and in a form reasonably satisfactory to Headway from appropriate Relevant Authorities, or from any persons or bodies with whom any member of the or the Wider Ludgate Group has entered into contractual arrangements or other material business relationships where the absence of such Authorisations would have a material adverse effect on the Headway Group or the Ludgate Group, in either case taken as a whole, or in the context of the Offer, and all, and such authorisations, orders, grants, recognitions, confirmations, licences, consents, clearances, permissions and approvals, together with all authorisations, orders, grants, recognitions, confirmations, licences, consents, clearances, permissions and approvals necessary for any member of the Wider Ludgate Group to carry on its business, remaining in full force and effect at the time at which the Offer becomes unconditional and no notice or indication of any intention to revoke, suspend, restrict or modify or not to renew any of the same having been received and all necessary statutory or regulatory obligations in any jurisdiction having been complied with in connection with the Offer or the acquisition by the Headway Group of any Ordinary Shares in, or control of, Ludgate;

Confirmation of absence of adverse circumstances

(g) except as Disclosed, there being no provision of any agreement, arrangement, licence or other instrument to which any member of the Wider Ludgate 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 which, as a result of the implementation of the Offer or the acquisition or proposed acquisition by Headway or any member of the Headway Group of any Ordinary Shares, or change in the control or management of Ludgate or otherwise, would or might reasonably be expected to result in (in each case to an extent which is material in the context of the Wider Ludgate Group taken as a whole):

(i) any monies borrowed by or any other indebtedness (actual or contingent) of, or any grant available to, any member of the Wider Ludgate Group becoming repayable, or capable of being declared repayable, immediately or earlier than the stated repayment date or the ability of such member to borrow monies or incur any indebtedness being withdrawn or inhibited;

(ii) the creation or enforcement of any mortgage, charge or other security interest over the whole or any material part of the business, property or assets of any member of the Wider Ludgate Group or any such mortgage, charge or other security interest (whenever arising or having arisen) becoming enforceable;

(iii) any assets or interest of the Wider Ludgate Group being or falling to be disposed of or ceasing to be available to any member of the Wider Ludgate Group or any right arising under which any such asset or interest could be required to be disposed of or could cease to be available to any member of the Wider Ludgate Group other than, in any case, in the ordinary course of business;

(iv) the interest or business of any member of the Wider Ludgate Group in or with any other person, firm or company (or any agreements or arrangements relating to such interest or business) being terminated or adversely modified or affected;

(v) any member of the Wider Ludgate Group ceasing to be able to carry on business under any name under which it presently does so;

(vi) the value of any member of the Wider Ludgate Group or its financial or trading position or prospects being prejudiced or adversely affected;

(vii) any such agreement, arrangement, licence or other instrument being terminated or adversely modified or any onerous obligation arising or any adverse action being taken or arising thereunder;

(viii) the creation of any material liabilities (actual or contingent) by any member of the Wider Ludgate Group; or

(ix) any requirement on any member of the Wider Ludgate Group to acquire, subscribe, pay up or repay any shares or other securities (or the equivalent);

and no event having occurred which, under any provision of any agreement, arrangement, licence or other instrument to which any member of the Wider Ludgate Group is a party or by or to which any such member or any of its assets may be bound or be subject, will result in any events or circumstances as are referred to in this paragraph (g);

No material transactions, claims or changes in the conduct of the business of Ludgate:

   (h)        except as Disclosed, no member of the Wider Ludgate Group has:

(i) issued or agreed to issue or authorised or proposed the issue of additional shares of any class, or securities convertible into, or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares or convertible or exchangeable securities or transferred or sold (or agreed to transfer or sell) any shares out of treasury (except, where relevant, as between Ludgate and its wholly owned subsidiaries or between its wholly owned subsidiaries);

(ii) recommended, declared, paid or made or resolved to recommend, declare, pay or make any bonus, dividend or other distribution, whether payable in cash or otherwise, other than a distribution by a wholly-owned subsidiary of Ludgate;

(iii) other than pursuant to the Offer, implemented or authorised any merger or demerger or (except for transactions between Ludgate and its wholly-owned subsidiaries, or between its wholly-owned subsidiaries or transactions in the ordinary course of business) acquired or disposed of or transferred, mortgaged or charged, or created any other security interest over, any asset or any right, title or interest in any asset (in each case to an extent which is material in the context of the Wider Ludgate Group or in the context of the Offer);

(iv) (except for transactions between Ludgate and its wholly-owned subsidiaries, or between its wholly-owned subsidiaries or transactions in the ordinary course of business) entered into, or authorised the entry into, any joint venture, asset or profit sharing arrangement, partnership or merger of businesses or corporate entities (in each case to an extent which is material in the context of the Wider Ludgate Group taken as a whole or in the context of the Offer);

(v) (except for transactions between Ludgate and its wholly-owned subsidiaries, or between its wholly-owned subsidiaries or transactions in the ordinary course of business) other than pursuant to the Offer, implemented or authorised any reconstruction, amalgamation, scheme or other transaction or arrangement with a substantially equivalent effect (in each case to an extent which is material in the context of the Wider Ludgate Group taken as a whole or in the context of the Offer);

(vi) (except for transactions between Ludgate and its wholly-owned subsidiaries, or between its wholly-owned subsidiaries or transactions in the ordinary course of business) purchased, redeemed or repaid any of its own shares or other securities or reduced or made or authorised any other change in its share capital;

(vii) (except for transactions between Ludgate and its wholly owned subsidiaries or between its wholly owned subsidiaries) made or authorised any change in its loan capital or issued or authorised the issue of any debentures or incurred or increased any indebtedness or contingent liability (in each case to an extent which is material in the context of the Wider Ludgate Group taken as a whole or in the context of the Offer) in each case which is material in the context of the Wider Ludgate Group taken as a whole or on the context of the Offer;

(viii) entered into, varied or terminated, or authorised the entry into, variation or termination of, any contract, commitment or arrangement (whether in respect of capital expenditure, real estate or otherwise) which is outside the ordinary course of business or which is of a long term, onerous or unusual nature or magnitude or which involves, or might reasonably be expected to involve, an obligation of a nature or magnitude which is restrictive on the business of any member of the Wider Ludgate Group (in each case to an extent which is material in the context of the Wider Ludgate Group taken as a whole or in the context of the Offer);

(ix) been unable or deemed unable, or admitted in writing that it is unable, to pay its debts as they fall due 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;

(x) commenced negotiations with any of its creditors or taken any step with a view to rescheduling or restructuring any of its indebtedness or entered into a composition, compromise, assignment or arrangement with any of its creditors whether by way of a voluntary arrangement, scheme of arrangement, deed of compromise or otherwise;

(xi) (other than in respect of a subsidiary of Ludgate which is dormant and solvent at the relevant time) taken any corporate action or had any legal proceedings started, served or threatened against it or any documents filed or faxed in court for its winding-up (voluntary or otherwise), dissolution or reorganisation (or for any analogous proceedings or steps in any jurisdiction) or for the appointment of a liquidator, provisional liquidator, receiver, administrator, administrative receiver, trustee or similar officer (or for the appointment of any analogous person in any jurisdiction) of all or any of its assets and revenues or had notice given of the intention to appoint any of the foregoing to it (in each case to an extent which is material in the context of the Wider Ludgate Group taken as a whole or in the context of the Offer);

(xii) except in the ordinary course of business, waived, compromised, settled, abandoned or admitted any dispute, claim or counter-claim whether made or potential and whether by or against any member of the Ludgate Group (in each case other than in the ordinary course of business and to an extent which is material in the context of the Ludgate Group taken as a whole or in the context of the Offer);

   (xiii)      made any material alteration to its constitutional documents;

(xiv) entered into, or materially varied the terms of, or terminated or given notice of termination of, any service agreement or arrangement with any director or senior executive of the Wider Ludgate Group;

(xv) proposed, agreed to provide, or agreed to modify the terms of, any share option scheme, incentive scheme or other benefit relating to the employment or termination of employment of any person employed by the Wider Ludgate Group, other than in accordance with the terms of the Offer;

(xvi) made or consented to any material change to the terms of the trust deeds constituting the pension schemes established for its directors and/or employees and/or their dependants or to the benefits which accrue, or to the pensions which are payable thereunder, or to the basis on which qualification for or accrual or entitlement to such benefits or pensions are calculated or determined, or to the basis upon which the liabilities (including pensions) of such pension schemes are funded or made, or agreed or consented to, any change to the trustees, other than in accordance with applicable law;

(xvii) save as between Ludgate and its wholly-owned subsidiaries, granted any lease in respect of any of the leasehold or freehold property owned or occupied by it or transferred or otherwise disposed of any such property (in each case to an extent which is material in the context of the Ludgate Group taken as a whole or in the context of the Offer); or

(xviii) entered into any contract, commitment or arrangement or passed any resolution or made any offer (which remains open for acceptance) with respect to, or proposed or announced any intention to effect or propose, any of the transactions, matters or events referred to in this paragraph (h) (in each case to an extent which is material in the context of the Wider Ludgate Group taken as a whole or in the context of the Offer);

   (i)         except as Disclosed:

(i) no adverse change having occurred, and no circumstances having arisen which would or might reasonably be expected to result in any adverse change in the business, assets, financial or trading position or profits or prospects of any member of the Wider Ludgate Group (in each case to an extent which is material in the context of the Wider Ludgate Group taken as a whole or in the context of the Offer); and

(ii) no litigation, arbitration proceedings, prosecution or other legal proceedings in any jurisdiction having been threatened, announced, instituted or remaining outstanding by, against or in respect of any member of the Wider Ludgate Group or to which any member of the Wider Ludgate Group is a party (whether as claimant or defendant or otherwise) and no investigation by any Relevant Authority or other investigative body against or in respect of any member of the Wider Ludgate Group having been threatened, announced, instituted or remaining outstanding by, against or in respect of any member of the Wider Ludgate Group (in each case to an extent which is material in the context of the Wider Ludgate Group taken as a whole or in the context of the Offer);

(j) save as Disclosed, no contingent or other liability having arisen outside the ordinary course of business which would or might reasonably be expected to adversely affect Ludgate (in each case to an extent which is material in the context of the Wider Ludgate Group taken as a whole or in the context of the Offer);

   (k)        save as Disclosed, Headway not having discovered that:

(i) any financial, business or other information concerning any member of the Wider Ludgate Group publicly disclosed prior to the date of this announcement at any time by any member of the Wider Ludgate Group is misleading, contains a misrepresentation of fact or omits to state a fact necessary to make the information contained therein not misleading and which was not subsequently corrected before the date of this announcement by disclosure by, or on behalf of, the Wider Ludgate Group through the publication of an announcement via a Regulatory Information Service (in each case to an extent which is material in the context of the Wider Ludgate Group taken as a whole or in the context of the Offer); or

(ii) any member of the Wider Ludgate Group is subject to any liability, contingent or otherwise, other than in the ordinary course of business (in each case to an extent which is material in the context of the Wider Ludgate Group taken as a whole or in the context of the Offer);

Anti-corruption and sanctions

   (l)         except as Disclosed, Headway not having discovered that:

(i) any past or present member of the Wider Ludgate Group is or has at any time engaged in any activity, practice or conduct (or omitted to take any action) in contravention of Corruption (Jersey) Law 2006, the UK Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977, as amended or any other applicable anti-corruption legislation; and

(ii) any past or present member of the Wider Ludgate 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 governmental or supranational body or authority in any jurisdiction; and

No criminal property

(m) except as Disclosed, Headway not having discovered that any asset of any member of the Ludgate Group constitutes criminal property as defined by section 340(3) of the Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that definition) or Article 29 of the Proceeds of Crime (Jersey) Law 1999.

Part B: Certain Further Terms of the Offer

1.1. Subject to the requirements of the Panel, Headway reserves the right in its sole discretion to waive (if capable of waiver) in whole or in part all or any of the conditions set out in paragraphs (c) to (m) inclusive of Part A of this Appendix I.

1.2. If Headway is required by the Panel to make an offer for Ordinary Shares under the provisions of Rule 9 of the Code, Headway may make such alterations to the terms and conditions of the Offer as are necessary to comply with the provisions of that Rule.

1.3. In relation to the Offer, the conditions set out in paragraphs (b) to (m) inclusive of Part A of this Appendix I must be satisfied as at, or (if capable of waiver) waived on or before, midnight on the 21st calendar day after the later of the First Closing Date of the Offer and the date on which the condition set out in paragraph (a) of Part A of this Appendix I is fulfilled (or, in each case, such later date as the Panel may agree), failing which the Offer will lapse. Headway shall be under no obligation to waive (if capable of waiver) or determine to be, or treat as, satisfied, any of the conditions set out in paragraph (b) to (m) inclusive of Part A of this Appendix I by a date earlier than the latest date specified above for the satisfaction thereof notwithstanding that the other conditions of the Offer may at such earlier date have been waived or satisfied and that there are, at such earlier date, no circumstances indicating that any of such conditions may not be capable of satisfaction. In any event, all of the Conditions must be satisfied as at, or (if capable of waiver) waived on or before, midnight on the 81st day following the date on which the Offer Document is published or such other date as may be agreed with the Panel.

1.4. The Offer will lapse if, before the First Closing Date or the date on which the Offer becomes, or is declared, unconditional as to acceptances (whichever is later), the European Commission initiates proceedings under Article 6(1)(c) of the Council Regulation (EC) 139/2004 or there is a Phase 2 CMA Reference following a referral to a competent authority of the United Kingdom under Articles 9(1) and 9(3)(b) of that Regulation or there is a Phase 2 CMA Reference with respect to any matter arising from or relating to the Offer. If the Offer does so lapse, not only will the Offer cease to be capable of further acceptance but also Ludgate Shareholders and Headway will thereafter cease to be bound by prior acceptances.

1.5. If the Offer lapses, the Offer will cease to be capable of further acceptance and both Headway and Ludgate shall immediately cease to be bound by acceptances delivered on or before the date on which the Offer lapses. Ludgate Shareholders who have accepted the Offer and Headway shall then cease to be bound by acceptances delivered on or before the date on which the Offer lapses.

1.6. Headway reserves the right to elect with the consent of the Panel (where necessary) to implement the Offer by way of a court approved scheme of arrangement in accordance with Article 125 of the Jersey Companies Law. In such event, the acquisition will be implemented on substantially the same terms, subject to appropriate amendments, as those which would apply to the Offer.

1.7. Ordinary Shares will be acquired by Headway pursuant to the Offer fully paid with full title guarantee and free from all liens, charges, encumbrances, equitable interests, pre-emption rights and other interests and rights of whatsoever nature and together with all rights now or hereafter attaching thereto, including the right to receive and retain in full all dividends and other distributions (if any) declared, paid or made after the date of this announcement.

1.8. In deciding whether or not to accept the Offer in respect of their Ordinary Shares, Ludgate Shareholders should rely on the information contained in, and follow the procedures described in, the Offer Document and (if they hold their Ordinary Shares in certificated form) the Form of Acceptance which will be posted to Ludgate Shareholders in due course (other than to any Ludgate Shareholders with addresses in any Restricted Jurisdiction).

1.9. Save to the extent provided in this announcement, Headway will have the right to reduce the consideration payable to Ludgate Shareholders under the terms of the Offer by the amount of any dividend (or other distribution) payable by Ludgate to Ludgate Shareholders In such circumstances, the Ludgate Shareholders will be entitled to receive and retain that dividend (or other distribution).

1.10. The Offer will be made on the terms and will be subject to the Conditions and terms which are set out in this Appendix I, those terms which will be set out in the Offer Document and Form of Acceptance and such further terms as may be required to comply with the Code and applicable law.

1.11. The Offer will comply with the AIM Rules, the other applicable rules and regulations of the London Stock Exchange and the Code. The Offer and any acceptances thereunder will be governed by English law and will be subject to the jurisdiction of the English Courts. In addition, the Offer will be subject to the CIF Laws and the Jersey Companies Law.

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

1.13. The Offer will not be made, directly or indirectly, in or into, or by use of the mails of, or by any means or instrumentality (including, without limitation, facsimile transmission, telex, telephone, internet or e-mail) of interstate or foreign commerce of, or of any facility of a national securities exchange of, any Restricted Jurisdiction and the Offer will not be capable of acceptance by any such use, means, instrumentality or facility or from within, any Restricted Jurisdiction.

1.14. Under Rule 13.5 of the Code, Headway may only invoke a Condition to the Offer so as to cause the Offer not to proceed, to lapse or to be withdrawn where the circumstances which give rise to the right to invoke the Condition are of material significance to Headway in the context of the Offer. The Condition contained in paragraph (a) of Part A of this Appendix 1 is not subject to this provision of the Code.

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

APPIX II

SOURCES OF INFORMATION AND BASES OF CALCULATION

The value of Ludgate as implied by the Offer Price is based on the issued ordinary share capital of Ludgate as at 20 December 2016 (the last Business Day prior to this announcement) of 53,345,782 Ordinary Shares (as per the confirmation by Ludgate pursuant to Rule 2.9 of the Takeover Code set out in this announcement).

Further sources of information regarding data reported in this announcement are as follows:

-- the Closing Price of 17.5 pence on 20 December 2016 (being the last Business Day prior to this announcement) is the closing middle market price of an Ordinary Share derived from the AIM Appendix to the Daily Official List of the London Stock Exchange.

-- the closing "bid price" of 15.0 pence is the closing bid price of an Ordinary Share on 20 December 2016 (being the last Business Day prior to this announcement)as stated on the London Stock Exchange website at www.londonstockexchange.com

-- Unless otherwise stated, the financial information relating to Ludgate is extracted from the audited consolidated financial statements of Ludgate for the financial year ended 30 June 2016.

-- All information relating to Headway has been provided by persons duly authorised by the general partner of Headway.

-- All information relating to Ludgate has been provided by persons duly authorised by the Ludgate Directors.

APPIX III

IRREVOCABLE UNDERTAKINGS AND LETTER OF INTENT

IRREVOCABLE UNDERTAKINGS

A To accept the Offer and vote in favour of the resolution to be proposed at the Independent Shareholder Meeting

The following holders or controllers of Ordinary Shares have, on the basis set out below, given irrevocable undertakings to Headway to accept the Offer and to vote in favour of the resolution to be proposed at the Independent Shareholders Meeting:

Ludgate Director undertaking

 
 Name                Number of Ordinary Shares   % of Ordinary Shares in issue 
 John Shakeshaft                       115,445                           0.22%

The undertaking listed above shall cease to be binding only if: (i) the Offer Document and the circular containing notice of the Independent Shareholders Meeting is not posted to Ludgate Shareholders by 28 January 2017; or (ii) the Offer is cancelled or withdrawn; or (iii) the Offer has not become fully and unconditionally effective and implemented by 31 March 2017; or (iv) the Offer lapses in accordance with its terms. This irrevocable undertaking remains binding in the event of a competing offer.

Ludgate Shareholder undertakings

 
 Name                                     Number of Ordinary Shares   % of Ordinary Shares in issue 
 GML Limited                                              8,769,271                          16.44% 
 Royal London Asset Management Limited                    7,568,308                          14.19% 
 TOTAL                                                   16,337,579                          30.63%

B To vote in favour of the resolution to be proposed at the Independent Shareholder Meeting and the Cancellation Resolution

The following holders or controllers of Ordinary Shares have, on the basis set out below, given irrevocable undertakings to Headway to vote in favour of the Cancellation Resolution:

 
 Name                                  Number of Ordinary Shares   % of Ordinary Shares in issue 
 Flintshire County Council                             5,791,288                          10.86% 
 South Yorkshire Pensions Authority                    3,669,094                           6.88% 
 TOTAL                                                 9,460,382                          17.73%

The undertakings listed above shall cease to be binding only if: (i) the Offer Document and the circular containing notice of the Independent Shareholders Meeting is not posted to Ludgate Shareholders by 28 January 2017; or (ii) the Offer is cancelled or withdrawn; or (iii) the Offer lapses in accordance with its terms; or (iv) the circular containing notice of a general meeting at which the Cancellation Resolution will be proposed is not posted to Ludgate Shareholders by 30 June 2017; or (v) either Ludgate Shareholder, who has entered into an irrevocable undertaking to vote in favour of the Cancellation Resolution, has accepted the Offer in respect of all of the shares listed against such Ludgate Shareholder in the table above, the Offer becomes fully and unconditionally effective and all of shares listed against that Ludgate Shareholder in the table above have been transferred to Headway, in which case the undertaking entered into by that Ludgate Shareholder shall cease to be binding on that Ludgate Shareholder only.

   C         Not to accept the Offer and to vote in favour of the Cancellation Resolution

The following holders or controllers of Ordinary Shares have, on the basis set out below, given irrevocable undertakings to Headway not to accept the Offer and to vote in favour of the Cancellation Resolution:

 
 Name                              Number of Ordinary Shares   % of Ordinary Shares in issue 
 Ludgate Investments Limited                         664,000                           1.24% 
 Ocean Capital Holdings II B.V.                    5,839,798                          10.95% 
 TOTAL                                             6,503,798                          12.19%

The undertakings listed above shall cease to be binding only if: (i) the Offer Document is not posted to Ludgate Shareholders by 31 January 2017; or (ii) the Offer is cancelled or withdrawn; or (iii) the Offer lapses in accordance with its terms; or (iv) the circular containing notice of a general meeting at which the Cancellation Resolution will be proposed is not posted to Ludgate Shareholders by 30 June 2017.

LETTER OF INTENT

The following holder or controller of Ordinary Shares has given a non-binding letter of intent to Headway to accept the Offer and to vote in favour of the resolution to be proposed at the Independent Shareholders Meeting:

 
 Name                                   Number of Ordinary Shares   % of Ordinary Shares in issue 
 Henderson Global Investors Limited                     2,159,000                           4.05%

APPIX IV

DEFINITIONS

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

 
 "GBP", or "pence"            the lawful currency of the 
                               United Kingdom; 
 "AIM"                        the market of that name operated 
                               by the London Stock Exchange; 
 "AIM Rules"                  the AIM Rules for Companies 
                               published by the London Stock 
                               Exchange, as amended from 
                               time to time; 
 "Authorisations"             regulatory authorisations, 
                               orders, recognitions, grants, 
                               determinations, consents, 
                               clearances, confirmations, 
                               certificates, licences, permissions, 
                               exemptions or approvals; 
 "Business Day"               a day (other than Saturdays, 
                               Sundays and public holidays) 
                               on which banks are open for 
                               business in London and Jersey; 
 "CIF Law"                    the Collective Investment 
                               Funds (Jersey) Law 1988, as 
                               amended from time to time; 
 "Cancellation"               the cancellation of the admission 
                               to trading on AIM of the Ordinary 
                               Shares; 
 "Cancellation Resolution"    a special resolution proposed 
                               pursuant to Rule 41 of the 
                               AIM Rules with regards the 
                               Cancellation; 
 "Closing Price"              the middle market price of 
                               an Ordinary Share at the close 
                               of business on the day to 
                               which such price relates, 
                               as derived from the AIM Appendix 
                               to the Daily Official List 
                               of the London Stock Exchange 
                               for that day; 
 "Companies Act"              the Companies Act 2006, as 
                               amended from time to time; 
 "Conditions"                 the conditions to the Offer, 
                               as set out in Appendix I of 
                               this announcement and to be 
                               set out in the Offer Document; 
 "CREST"                      a relevant system (as defined 
                               in the Regulations) in respect 
                               of which Euroclear UK & Ireland 
                               Limited is the Operator (as 
                               defined in the Regulations); 
 "Dealing Disclosure"         has the meaning given by Rule 
                               8 of the Takeover Code; 
 "Disclosed"                  the information disclosed 
                               prior to the date hereof in: 
                               (a) the Ludgate annual report 
                               and accounts in respect of 
                               the financial year ended 30 
                               June 2016; or 
                               (b) any documents delivered 
                               to Headway, Headway Capital 
                               or to any of Headway's professional 
                               advisers engaged in connection 
                               with the Offer on or before 
                               5.00 p.m. on the Business 
                               Day prior to the date of this 
                               announcement (including, but 
                               not limited to, in minutes 
                               of any disclosure meetings 
                               that are so delivered or any 
                               information fairly disclosed 
                               in electronic form to Headway, 
                               Headway Capital or any of 
                               Headway's professional advisers); 
                               or 
                               (c) any public announcement 
                               by Ludgate to a Regulatory 
                               Information Service on or 
                               before 5.00 p.m. on the Business 
                               Day prior the date of this 
                               announcement; 
 "EC Regulation"              Regulation Council Regulation 
                               (EC) No 139/2004; 
 "euros"                      the lawful currency of the 
                               members of the European Union 
                               that have adopted and retained 
                               a single currency through 
                               monetary union in accordance 
                               with European Union treaty 
                               law from time to time; 
 "FCA" or "Financial          the UK Financial Conduct Authority 
  Conduct Authority"           or its successor from time 
                               to time; 
 "FSMA"                       the Financial Services and 
                               Markets Act 2000; 
 "First Closing Date"         the date which falls 21 days 
                               after the posting of the Offer 
                               Document; 
 "Forms of Acceptance"        the form of acceptance and 
                               authority relating to the 
                               Offer to be dispatched to 
                               Ordinary Shareholders with 
                               the Offer Document; 
 "GCA Altium"                 GCA Altium Limited, financial 
                               adviser to Headway; 
 "Headway"                    Headway Investment Partners 
                               III L.P., a limited partnership 
                               registered under the laws 
                               in Scotland with registered 
                               number SL9054, whose principal 
                               place of business is at 1 
                               Royal Plaza, Royal Avenue, 
                               St Peter Port, Guernsey GY1 
                               2HL. Headway is a closed-ended 
                               collective investment scheme, 
                               authorised under the Protection 
                               of Investors (Bailiwick of 
                               Guernsey) Law, 1987, as amended, 
                               and the Authorised Closed-ended 
                               Investment Scheme Rules 2008. 
                               Headway is a Qualifying Investor 
                               Fund for the purposes of the 
                               Guernsey Financial Services 
                               Commission and as defined 
                               in the guidance document issued 
                               by the Guernsey Financial 
                               Services Commission dated 
                               May 2007; 
 "Headway Capital"            Headway Capital Partners LLP, 
                               a limited liability partnership 
                               registered in England & Wales

                               with registered number OC306661 
                               and whose registered address 
                               is 25 Maddox Street, London 
                               W1S 2QN, the investment adviser 
                               to Headway; 
 "Headway Group"              Headway, any parent undertaking 
                               of Headway, and any undertaking 
                               which is a subsidiary undertaking 
                               of Headway or of any such 
                               parent undertaking; 
 "Independent Shareholders"   the Ludgate Shareholders other 
                               than: (a) Ludgate Investments; 
                               and (b) any other Ludgate 
                               Shareholders who are connected 
                               to Ludgate Investments; 
 "Independent Shareholders    the general meeting of Ludgate 
  Meeting"                     Shareholders to be convened 
                               to consider and if thought 
                               fit pass a resolution by way 
                               of a poll vote of Independent 
                               Shareholders to approve the 
                               proposed amendments to be 
                               made to the Investment Advisory 
                               Agreement; 
 "Investment Advisory         the restated investment advisory 
  Agreement"                   agreement dated 21 December 
                               2012 (as supplemented on 11 
                               August 2014) between Ludgate 
                               and Ludgate Investments; 
 "Jersey Companies            the Companies (Jersey) Law 
  Law"                         1991, as amended from time 
                               to time; 
 "JFSC"                       the Jersey Financial Services 
                               Commission and any successor 
                               regulatory authority thereto; 
 "London Stock Exchange"      London Stock Exchange plc, 
                               a public company incorporated 
                               in England and Wales under 
                               number 2075721; 
 "Ludgate" or the             Ludgate Environmental Fund 
  "Company"                    Limited, a closed end investment 
                               company incorporated under 
                               the laws of Jersey with registered 
                               number 97690 and whose registered 
                               address is Lime Grove House, 
                               Green Street, St Helier, Jersey 
                               JE1 2ST; 
 "Ludgate Assets"             the portfolio of investment 
                               assets held by Ludgate; 
 "Ludgate Directors"          the directors of Ludgate as 
                               at the date of this announcement; 
 "Ludgate Investments"        Ludgate Investments Limited, 
                               a company incorporated under 
                               the laws of England and Wales 
                               with registered number 4043908 
                               and whose registered address 
                               is 52 Jermyn Street, London 
                               SW1Y 6LX, the investment adviser 
                               to Ludgate; 
 "Ludgate Shareholders"       the holders of Ordinary Shares; 
 "NAV"                        net asset value; 
 "Offer"                      the offer to be made by Headway 
                               to acquire the issued ordinary 
                               share capital of Ludgate at 
                               the Offer Price in cash, on 
                               the terms to be set out in 
                               the Offer Document and (in 
                               the case of Ordinary Shares 
                               held in certificated form) 
                               the Form of Acceptance, including, 
                               where the context so requires, 
                               any subsequent revision, variation, 
                               extension or renewal of such 
                               offer; 
 "Offer Document"             the document to be dispatched 
                               on behalf of Headway containing 
                               the terms and conditions of 
                               the Offer and, where appropriate, 
                               any other document(s) containing 
                               terms and conditions of the 
                               Offer constituting the full 
                               terms and conditions of the 
                               Offer; 
 "Offer Period"               the offer period (as defined 
                               by the Takeover Code) relating 
                               to Ludgate, which commenced 
                               on the date of this announcement; 
 "Offer Price"                16 pence per Ordinary Share; 
 "Opening Position            has the meaning given by Rule 
  Disclosure"                  8 of the Takeover Code; 
 "Ordinary Shares"            the ordinary shares of no 
                               par value in the capital of 
                               Ludgate; 
 "Panel"                      the Panel on Takeovers and 
                               Mergers; 
 "Phase 2 CMA 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; 
 "Panmure Gordon"             Panmure Gordon (UK) Limited, 
                               Rule 3 Adviser to Ludgate; 
 "Regulations"                the Uncertificated Securities 
                               Regulations 2001 (SI2001 No. 
                               3755), as amended from time 
                               to time and the Companies 
                               (Uncertified Securities) (Jersey) 
                               Order 1999, as amended from 
                               time to time; 
 "Regulatory Information      any of the services authorised 
  Service"                     from time to time by the FCA 
                               for the purposes of disseminating 
                               regulatory announcements; 
 "Restricted Jurisdiction"    any jurisdiction where the 
                               making of the Offer would: 
                               (a) constitute a violation 
                               of the relevant laws and regulations 
                               of such jurisdiction; or 
                               (b) result in a requirement 
                               to comply with any governmental 
                               or other consent or any registration, 
                               filing or other formality 
                               which Headway or Ludgate regards 
                               as unduly onerous; 
 "Substantial 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 
                               (as defined in Section 548 
                               of the Companies Act) of such 
                               undertaking; 
 "Takeover Code"              the City Code on Takeovers 
  or "Code"                    and Mergers; 
 "Term Sheet"                 the non-binding agreement 
                               between Headway Capital (on 
                               behalf of Headway and Ludgate 
                               Investments with regards proposed 
                               changes to the arrangements 
                               currently set out in the Investment 
                               Advisory Agreement; 
 "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, or any other body or 
                               person whatsoever in any jurisdiction; 
 "United Kingdom"             the United Kingdom of Great 
  or "UK"                      Britain and Northern Ireland; 
 "United States"              the United States of America 
  or "US"                      (including the states of the 
                               United States and the District 
                               of Columbia), its possessions 
                               and territories and all other 
                               areas subject to its jurisdiction; 
 "Wider Headway Group"        Headway, its parent undertakings, 
                               its subsidiary undertakings, 
                               associated undertakings and 
                               any other undertakings in 
                               which that company and such 
                               undertakings (aggregating 
                               their interests) have a Substantial 
                               Interest; and 
 "Wider Ludgate Group"        Ludgate, its subsidiary undertakings, 
                               associated undertakings and

                               any other undertakings in 
                               which that company and such 
                               undertakings (aggregating 
                               their interests) have a Substantial 
                               Interest.

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

References to an enactment include references to that enactment as amended, replaced, consolidated or re-enacted by or under any other enactment before or after the date of this document.

All the times referred to in this announcement are London times unless otherwise stated.

References to the singular include the plural and vice versa.

This information is provided by RNS

The company news service from the London Stock Exchange

END

OFBFEWFIFFMSEFE

(END) Dow Jones Newswires

December 21, 2016 10:46 ET (15:46 GMT)

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