FSD Group - Offer for Field Systems Designs Holdings plc

Announcement provided by

Field Systems Designs Holdings plc · FSD

06/05/2025 13:10

RNS Number : 5323H

FSD Group

06 May 2025

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

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

6 MAY 2025

RECOMMENDED ACQUISITION

FIELD SYSTEMS DESIGNS HOLDINGS PLC ("FSD")

FSD GROUP LIMITED ("BIDCO")

to be effected by means of a Scheme of Arrangement under Part 26 of the Companies Act 2006

Summary

· The Board of Bidco and the FSD Independent Directors are pleased to announce that they have reached agreement on the terms of a recommended acquisition by Bidco of the entire issued and to be issued share capital of FSD (the "Acquisition").

· Under the terms of the Acquisition, the FSD Shareholders will be entitled to receive for each FSD Share:

40 pence in cash ("Cash Consideration"); and

a principal amount of 15 pence in Bidco Loan Notes ("Loan Note Consideration")

· The Cash Consideration, which will be coming from the existing cash resources of the FSD Group, and the Loan Note Consideration, together the Total FSD Shareholder Proceeds, aggregate to 55 pence per FSD Share which represents a premium of:

· 22.2 per cent. to the Closing Price of an FSD Share of 45 pence on 2 May 2025, being the Last Practicable Date;

· 29.4 per cent. to the Closing Price of an FSD Share for the entire period from 1 March 2019 to 27 February 2025 (inclusive) of 42.5 pence; and

· 26.7 per cent. to the average price of an FSD Share of 43.4 pence for the six-month period ended on the Last Practicable Date.

· The Total FSD Shareholder Proceeds values the entire issued share capital of FSD at approximately £3.1 million.

· It is intended that the Acquisition be implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act. Bidco reserves the right to elect, with the consent of the Panel, to implement the Acquisition by way of a Takeover Offer as an alternative to the Scheme.

· If any dividend, other distribution or return of capital is announced, declared, made or paid or becomes payable in respect of FSD Shares on or after the date of this Announcement and before the Effective Date, Bidco reserves the right to reduce the consideration payable in respect of each FSD Share by the amount of all or part of any such dividend, other distribution or return of capital. If Bidco exercises this right, FSD Shareholders will be entitled to receive and retain any such dividend, other distribution or other return of capital.

Background and reasons for the Acquisition

· FSD has been listed on the Aquis Stock Exchange since 2012. FSD is the holding company of a trading group that engages in the design, project management, supply, installation, servicing and maintenance of mechanical and electrical projects in the UK. It primarily services the water utilities sector.

· Following discussions on the future of FSD, the FSD Independent Directors and the Bidco Directors believe that in order for FSD to achieve its full potential it would be better suited to a private company environment where management would be in a stronger position to deliver its longer-term business plan.

· The FSD Independent Directors believe that FSD's listing no longer represents good value for FSD and its shareholders, providing limited share price growth and access to equity capital while incurring material costs and carrying a regulatory burden. The FSD Independent Directors believe that the Company's share price seems to be more a reflection of the limited dealing in the Company's shares rather than the underlying performance of the Company. For the entire period from 1 March 2019 to 27 February 2025 inclusive, the Closing Price for an FSD Share remained unchanged at 42.5 pence per FSD Share, despite the Company releasing interim financial statements and annual reports. During this period, turnover varied significantly, peaking at £21.8 million for the year ending 31 May 2019 and dropping to £8.1 million for the year ending 31 May 2022. Profit before tax also fluctuated, from £0.5 million in 2019 to a loss before tax of £1.9 million in 2022. Yet, these substantial changes in trading did not impact the share price.

· In addition, the FSD Independent Directors believe that the lack of liquidity in the FSD Shares, and the perceived desire of many FSD Shareholders to seek an exit from their investment has acted as a restriction to both FSD's share price potential and its ability to raise funding by the issue of new shares to support new opportunities for growth.

· The FSD Independent Directors see the acquisition of FSD by Bidco as an opportunity to allow the management to invest to support the FSD Group's growth potential as a private company, combined with providing an attractive cash return to FSD Shareholders.

· The FSD Group has returned to a normalised period of trading, no longer impacted by the disruption caused by COVID-19. The improved FSD Group financial results for the year ended 30 May 2024 supported management's decision to retain a core skilled resource base across the FSD Group. However, past performance has been unpredictable and it is the FSD Independent Directors' belief that there is no certainty that the improved performance will continue. The Cash Consideration will be coming from the existing cash resources of the FSD Group. Taking this into account along with the repayment of the Bidco Loan Notes, existing items of a debt-like nature within the FSD Group, ongoing working capital requirements of the Enlarged Group and the challenges within the water industry, future business prospects of the FSD Group may be impacted. However, as Bidco consists of the existing management of FSD, it is the FSD Independent Directors' belief that they possess the expertise to take the business forward.

· Since COVID-19, FSD's senior management team has been strengthened with the addition of three new directors: Alan Lloyd, Garry Hall and Nigel Smith. Together with Nigel Billings and Ross Hunter, they now form the future senior management team of FSD. The proposed new structure by way of the Acquisition aims to provide key management with an incentive to drive the FSD Group's business forward.

· The FSD Independent Directors have also consulted with certain of FSD's significant shareholders who have demonstrated their support for the Acquisition. This is evidenced by their provision of irrevocable undertakings to support the Acquisition in respect of, in aggregate (when added to those irrevocable undertakings given by the FSD Independent Directors themselves and the Bidco Directors), 4,995,000 FSD Shares representing approximately 87.7 per cent. of the FSD Shares in issue as at the Last Practicable Date.

· Having given due consideration to Bidco's intentions in relation to FSD's employees, the FSD Independent Directors also believe that the FSD Group's workforce will benefit from enhanced future employment opportunities within the Enlarged Group. The FSD Independent Directors note and agree with the strategic plans of Bidco and welcome Bidco's statements that it does not intend to make any changes to the location of FSD's places of business following the Scheme becoming Effective, and that, following the Effective Date, the existing contractual and statutory employment rights, including pensions rights, of all management and employees of the FSD Group will be fully safeguarded, and that Bidco does not intend to make any material change in their conditions of employment.

· The FSD Independent Directors note and agree with Bidco's other stated intentions in respect of the business, management, employees, pension schemes and other stakeholders of FSD. In considering the financial terms of the Acquisition and determining whether they value the FSD Group and its prospects appropriately, the FSD Independent Board has taken into account a number of factors, including but not limited to, the following:

· while the FSD Independent Directors remain confident in the ongoing execution of the FSD Group's strategy and the prospects for the business, they believe that the Acquisition reflects an attractive valuation which will provide FSD Shareholders with the opportunity to obtain liquidity for their investment and to crystalise the value of their shareholdings with certainty now against an uncertain backdrop;

· Bidco is using cash from within the FSD Group for the Cash Consideration. However, the Enlarged Group has items of a debt-like nature and must also manage ongoing working capital requirements and repay the Loan Note Consideration with interest

· FSD has not paid a dividend for a number of years and is unlikely to do so in the short to medium term;

· the Acquisition provides a solution to the problem of the illiquidity of FSD Shares and the relatively small size of FSD as a quoted entity, both of which limit attractiveness of the stock to institutional investors, despite the attractions of the underlying business. Since the start of 2020 to the Last Practicable Date, there have only been nine share trades, involving a total of 38,001 FSD Shares, approximately 0.7 per cent. of the Company's issued share capital;

· the lack of liquidity in FSD's Shares means there can be no guarantee that FSD Shareholders will be able to sell their entire shareholdings in FSD in the market should they wish to do so at a price of 55 pence or better in the short to medium term;

· the Acquisition represents an opportunity for all FSD Shareholders to realise their investment (without dealing costs) at a premium to the current share price and the historical share price, once the aggregate consideration of 55 pence per FSD Share has been received in full. The FSD Independent Directors note that the Company's share price has not been greater than the aggregate consideration of 55 pence per FSD Share since 2012;

· the alternatives, such as moving to a new trading platform such as AIM, do not on their own solve this underlying mismatch of scale, illiquidity and public company status and would involve considerable cost;

· the Total FSD Shareholder Proceeds of 55 pence per FSD Share represents a premium of 29.4 per cent. to the Closing Price of 42.5 pence per FSD Share for the entire period from 1 March 2019 to 27 February 2025 (inclusive);

· the FSD Independent Directors believe that the FSD Group's improving financial and operational performance, outlook and prospects have not been and are unlikely to be reflected in FSD's share price;

· the FSD Independent Directors note that the Cash Consideration will provide FSD Shareholders with the opportunity to receive a considerable portion of their investment in FSD Shares in cash. The amount of Cash Consideration payable to FSD Shareholders is limited due to the amount of distributable reserves available to the FSD Group. In addition, the FSD Independent Directors believe that the Loan Notes, with an aggregate principal amount of 15 pence per FSD Share and with interest accruing at an annual rate of 5 per cent. will provide FSD Shareholders with an appropriate return for the proportion of the Total FSD Shareholder Proceeds they represent;

· a significant number of FSD's shareholders, representing 87.7 per cent. of FSD's issued share capital, have publicly expressed their support for the Acquisition, including the FSD Independent Directors, by providing irrevocable undertakings as detailed in this Announcement; and

· the FSD Directors have explored the possibility of generating viable alternatives to the Acquisition that would realise value for FSD Shareholders. However, no viable alternatives have been identified.

· Following careful consideration of both the financial terms of the Acquisition and Bidco's plans for the FSD business under Bidco's ownership and intentions in relation to FSD's employees, the FSD Independent Directors has determined that the Acquisition is in the best interests of FSD and FSD Shareholders as a whole.

· The FSD Independent Directors have considered the Acquisition and the effect of the Acquisition on the employees and business of the FSD Group. Having taken advice from BDO, they unanimously recommend FSD Shareholders to accept the Acquisition because it offers them an opportunity to dispose of all of their holdings at a premium to the current share price and is, in the opinion of the FSD Independent Directors, fair and reasonable in the context of the FSD Group's financial position and performance. In providing its advice to the FSD Independent Directors, BDO has taken into account the commercial assessments of the FSD Independent Directors.

· None of the Bidco Directors have participated in the appraisal of the Acquisition by the FSD Independent Directors or the decision of the FSD Independent Directors to recommend the Acquisition to the FSD Shareholders.

· Following completion of the Acquisition, it is the intention of the Bidco Board to continue to operate the FSD Group's business in the same manner and with the same objectives and strategy as at present.

Information on Bidco

· Bidco is a private company limited by shares, incorporated on 13 January 2020 under the laws of England and Wales. Bidco has not traded since the date of its incorporation and has not entered into any obligations other than in connection with the Acquisition and the funding of the Acquisition. The directors and shareholders of Bidco are Nigel Billings, Ross Hunter, Alan Lloyd, Nigel Smith and Garry Hall.

Information relating to the FSD Group

· FSD is the holding company of a trading group that engages in the design, project management, supply, installation, servicing and maintenance of mechanical and electrical projects in the UK. It primarily services the water utilities sector.

· FSD was incorporated in England and Wales on 3 September 1998 as a public company limited by shares with registered number 3626335 and admitted to trading on the PLUS trading platform in December 1998, following the management buy-out of the Field Service Division of Bristol Babcock Limited by its subsidiary, Field Systems Designs Limited. FSD has been listed on the Aquis Stock Exchange since 2012.

· FSD has the following subsidiaries:

· Field Systems Designs Limited

· FSD Electrical Services Limited (dormant)

· FSD Mech Limited

· The directors of FSD are Derek Bird, Bruce Smith, Faith Lower, Daniel Engler, Nigel Billings, Ross Hunter, Alan Lloyd, Nigel Smith and Garry Hall.

Unanimous Recommendation of the FSD Independent Directors

· The FSD Independent Directors, who have been so advised by BDO as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the FSD Independent Directors, BDO has taken into account the commercial assessments of the FSD Independent Directors. BDO is providing independent financial advice to the FSD Independent Directors for the purposes of Rule 3 of the Takeover Code.

· Accordingly, the FSD Independent Directors intend to recommend unanimously that FSD Shareholders vote in favour of the Scheme at the Court Meeting and vote in favour of the Resolution to be proposed at the General Meeting (or, in the event that the Acquisition is implemented by way of an Offer, to accept the Offer) as the FSD Independent Directors who hold FSD Shares at the date of this Announcement have irrevocably undertaken to do (or procure to be done) in respect of their own beneficial holdings of a total of 1,576,668 FSD Shares, representing, in aggregate, approximately 27.7 per cent. of FSD's issued share capital as at the Last Practicable Date.

Irrevocable Undertakings

· Bidco has received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the Resolution at the General Meeting from the two FSD Independent Directors who are interested in FSD Shares, namely Bruce Smith and Faith Lower, in respect of a total of 1,576,668 FSD Shares, representing approximately 27.7 per cent. of the issued share capital of FSD as at the Last Practicable Date.

· Bidco has received irrevocable undertakings to vote in favour of the Resolution at the General Meeting from two of the Bidco Directors who are interested in FSD Shares, namely Nigel Billings and Ross Hunter, in respect of a total of 100,000 FSD Shares, representing approximately 1.8 per cent. of the issued share capital of FSD. These Bidco Directors have undertaken to not exercise their voting rights to vote at the Court Meeting.

· Bidco has received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the Resolution at the General Meeting, from other FSD Shareholders in respect of a total of 3,318,332 FSD Shares, representing approximately 58.3 per cent. of the issued share capital of FSD as at the Last Practicable Date.

· Further details of the irrevocable undertakings received by Bidco are set out in Appendix 3 to this Announcement.

Timetable and Conditions

· The Acquisition is conditional on, among other things, the approvals of the relevant FSD Shareholders and the sanction of the Scheme by the Court. The Acquisition is also subject to the other terms and Conditions set out in Appendix 1 to this Announcement, and to the full terms and conditions to be set out in the Scheme Document.

· The Acquisition will be put to FSD Shareholders at the Court Meeting and at the General Meeting. Completion of the Acquisition will be conditional, among other things, on the following matters:

· the approval of the Scheme by a majority in number of the Scheme Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the FSD Shares voted;

· the passing by the FSD Shareholders (representing at least 75 per cent. of votes cast on that resolution) of the Resolution at the General Meeting; and

· the Scheme being sanctioned by the Court (without modification, or with modification on terms agreed by Bidco and FSD) and a copy of the Court Order being delivered to the Registrar of Companies.

This summary should be read in conjunction with, and is subject to, the full text of this Announcement and its Appendices.

The Acquisition will be subject to the Conditions and certain further terms set out in Appendix 1 to this Announcement and to the full terms and conditions to be set out in the Scheme Document. The bases and sources for certain financial information contained in this Announcement are set out in Appendix 2 to this Announcement. Details of the irrevocable undertakings received by Bidco are set out in Appendix 3 to this Announcement. The defined terms used in this Announcement are set out in Appendix 4 to this Announcement.

Enquiries:

FSD and Bidco

Nigel Billings Tel: +44 (0)1306 880 800

BDO (Financial Adviser)

John Stephan Tel :+44(0) 207 486 5888

Susan Jarram Tel: +44(0) 207 486 5888

Gateley Legal is acting as legal adviser to FSD.

IMPORTANT NOTICES

Disclaimer

BDO LLP ("BDO"), which is authorised and regulated by the FCA in the United Kingdom, is acting exclusively for FSD in connection with the Acquisition and for Bidco in connection with the Financing for the Acquisition statement made in paragraph 12 of this Announcement, and for no one else in connection with the Acquisition and/or any other matter referred to in this Announcement and will not be responsible to anyone other than FSD for providing the protections afforded to its clients or for providing advice in relation to the Acquisition, the contents of this Announcement, or any other matters referred to in this Announcement. Neither BDO nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct, indirect, consequential, whether in contract, in tort, under statute or otherwise) to any person who is not a client of BDO in connection with this Announcement, any statement contained herein or other matter or arrangement referred to herein or otherwise.

Further information

This Announcement is for information purposes only and is not intended to, and does not, constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, exchange, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise. The Acquisition will be made solely through the Scheme Document (and the accompanying Forms of Proxy), which will contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the Acquisition. Any decision in respect of the Acquisition should be made only on the basis of the information in the Scheme Document (or, if the Acquisition is implemented by way of a Takeover Offer, the Takeover Offer document).

This Announcement does not constitute a prospectus or a prospectus exempted document.

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

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

Overseas Shareholders

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

Unless otherwise determined by Bidco or required by the Code, and permitted by applicable law and regulation, the Acquisition shall not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Acquisition by any such use, means, instrumentality or form within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction.

The Acquisition will be subject to the applicable requirements of English law, the Code, the Panel, the Aquis Rules and the FCA.

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

Further details in relation to FSD Shareholders in overseas jurisdictions will be contained in the Scheme Document.

Additional information for U.S. investors

U.S. shareholders should note that the Acquisition relates to an offer for the shares of a UK company and is being made by means of a scheme of arrangement provided for under English company law. The Acquisition, implemented by way of a scheme of arrangement, is not subject to the tender offer rules or the proxy solicitation rules under the U.S. Exchange Act, as amended. Accordingly, the Acquisition is subject to the requirements and practices applicable to a scheme of arrangement involving a target company in the UK listed on Aquis, which differ from the requirements of the U.S. tender offer and proxy solicitation rules. The financial information with respect to the FSD Group included in this Announcement and the Scheme Document has been or will have been prepared in accordance with IFRS and thus may not be comparable to the financial information of U.S. companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the U.S. If, in the future, Bidco exercises its right to implement the Acquisition by way of a Takeover Offer and determines to extend the Takeover Offer into the U.S., the Acquisition will be made in compliance with applicable U.S. tender offer rules.

It may be difficult for U.S. shareholders to enforce their rights and any claims they may have arising under the U.S. federal securities laws in connection with the Acquisition, since FSD and Bidco are each located in a country other than the United States, and some or all of their respective officers and directors may be residents of countries other than the United States. U.S. shareholders may not be able to sue FSD, Bidco or their respective officers or directors in a non-U.S. court for violations of the U.S. securities laws. Further, it may be difficult to compel FSD or Bidco and their respective affiliates to subject themselves to the jurisdiction or judgment of a U.S. court for violations of the U.S. securities laws.

Neither the SEC nor any U.S. state securities commission has approved, disproved or passed judgment upon the fairness or the merits of the Acquisition or determined if this Announcement is adequate, accurate or complete. Any representation to the contrary is a criminal offence in the U.S.

In accordance with normal UK practice and pursuant to Rule 4e-5(b) of the U.S. Exchange Act, Bidco, certain of its affiliated companies and their nominees or brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, shares or other securities of FSD outside of the U.S., other than pursuant to the Acquisition, until the date on which the Acquisition and/or Scheme becomes effective, lapses or is otherwise withdrawn. If such purchases or arrangements to purchase were to be made, they would occur either in the open market at prevailing prices or in private transactions at negotiated prices and would comply with applicable law, including the U.S. Exchange Act. Any information about such purchases or arrangements to purchase will be disclosed as required in the UK, will be reported to a Regulatory Information Service and will be available on the Aquis website at www.aquis.eu.

Forward-looking statements

This Announcement (including information incorporated by reference in this Announcement), oral statements made regarding the Acquisition, and other information published by Bidco or FSD contain statements which are, or may be deemed to be, "forward-looking statements". All statements, other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are prospective in nature and are not based on historical facts, but rather on assumptions, expectations, valuations, targets, estimates, forecasts and projections of Bidco and FSD about future events and are therefore subject to risks and uncertainties which could cause actual results, performance or events to differ materially from those expressed or implied by the forward-looking statements. The forward-looking statements contained in this Announcement include statements relating to the expected effects of the Acquisition on Bidco, the Wider Bidco Group, the Wider FSD Group and the Enlarged Group, the expected timing and scope of the Acquisition and other statements other than historical facts. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects", "budget", "targets", "aims", "scheduled", "estimates", "forecast", "intends", "anticipates", "seeks", "prospects", "potential", "possible", "assume" or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Bidco and FSD give no assurance that such expectations will prove to be correct. By their nature, forward-looking statements involve risks (known and unknown) and uncertainties (and other factors that are in many cases beyond the control of Bidco and/or FSD) because they relate to events and depend on circumstances that may or may not occur in the future.

There are a number of factors that could affect the future operations of the Wider Bidco Group, the Wider FSD Group and/or the Enlarged Group and that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include the satisfaction (or, where permitted, waiver) of the Conditions, as well as additional factors, such as: domestic and global business and economic conditions; the impact of pandemics, asset prices; market‑related risks such as fluctuations in interest rates and exchange rates, industry trends, competition, changes in government and regulation, changes in the policies and actions of governments and/or regulatory authorities (including changes related to capital and tax), changes in political and economic stability (including exposures to terrorist activities, the UK's exit from the European Union, Eurozone instability, the Russia-Ukraine conflict, the ongoing conflict in the Middle East, disruption in business operations due to reorganisation activities, interest rate, inflation, deflation and currency fluctuations), the timing impact and other uncertainties of future or planned acquisitions or disposals or offers, the Enlarged Group incurring and/or experiencing unanticipated costs and/or delays (including IT system failures, cyber-crime, fraud and pension scheme liabilities) or difficulties relating to the Acquisition when the Acquisition is implemented. Other unknown or unpredictable factors could affect future operations and/or cause actual results to differ materially from those in the forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors.

Each forward-looking statement speaks only as of the date of this Announcement. Neither the Bidco Group, the FSD Group, nor any of their respective associates or directors, officers or advisers, provides any representation, warranty, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur. Forward-looking statements involve inherent risks and uncertainties. All forward-looking statements contained in this Announcement are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers are cautioned not to place undue reliance on these forward-looking statements. Other than in accordance with their legal or regulatory obligations (including under the Code, the UK Market Abuse Regulation, the Aquis Rules and the DTRs), neither the Wider Bidco Group nor the Wider FSD Group is under or undertakes any obligation, and each of the foregoing expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

No profit forecasts or estimates

Nothing in this Announcement is intended, or is to be construed, as a profit forecast, profit estimate or quantified financial benefits statement for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share for Bidco or FSD for the current or future financial years will necessarily match or exceed the historical published earnings or earnings per share for Bidco or FSD, as appropriate.

Disclosure requirements of the Code

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

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

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

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

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

Rule 2.9 Disclosure

In accordance with Rule 2.9 of the Code, FSD confirms that, as at the close of business on 2 May 2025 (being the last Business Day prior to the date of this Announcement), it had in issue 5,692,500 FSD Shares, which are in issue and admitted to trading on the AQSE Growth Market. The International Securities Identification Number (ISIN) of the FSD Shares is GB0004510409.

Electronic communications

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

Publication on a website and availability of hard copies

This Announcement and the documents required to be published pursuant to Rule 26 of the Code will be available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on FSD's website at www.fsdl.co.uk by no later than 12 noon (London time) on the Business Day following the publication of this Announcement. Neither the content of the websites referred to in this Announcement nor the content of any website accessible from hyperlinks in this Announcement is incorporated into, or forms part of, this Announcement.

FSD Shareholders may, subject to applicable securities laws, request a hard copy of this Announcement (and any information incorporated into it by reference to another source) by contacting FSD's registrars, Share Registrars, between 9.00 a.m. and 5.00 p.m. (London time) Monday to Friday (excluding public holidays in England and Wales) on +44 (0)1252 821 390, or by submitting a request in writing to Share Registrars at 3 The Millennium Centre, Crosby Way, Farnham, Surrey GU9 7XX, with an address to which the hard copy may be sent. Calls are charged at the standard geographic rate and will vary by provider. For persons who receive a copy of this Announcement in electronic form or via a website notification, a hard copy of this Announcement will not be sent unless so requested. FSD Shareholders may, subject to applicable securities laws, also request that all future documents, announcements and information to be sent in relation to the Acquisition should 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.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

6 MAY 2025

RECOMMENDED ACQUISITION

FIELD SYSTEMS DESIGNS HOLDINGS PLC ("FSD")

FSD GROUP LIMITED ("BIDCO")

to be effected by means of a Scheme of Arrangement under Part 26 of the Companies Act 2006

1. Introduction

The Board of Bidco and the FSD Independent Directors are pleased to announce that they have reached agreement on the terms of a recommended acquisition by Bidco of the entire issued and to be issued share capital of FSD (the "Acquisition").

It is intended that the Acquisition be implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act. Bidco reserves the right to elect, with the consent of the Panel, to implement the Acquisition by way of a Takeover Offer as an alternative to the Scheme.

2. The Acquisition

Under the terms of the Acquisition, which will be subject to the Conditions and further terms set out below and in Appendix 1 to this Announcement, and to be set out in the Scheme Document, FSD Shareholders will be entitled to receive for each FSD Share:

40 pence in cash ("Cash Consideration"); and

a principal amount of 15 pence in Bidco Loan Notes ("Loan Note Consideration")

The Cash Consideration, which will be coming from the existing cash resources of the FSD Group, and the Loan Note Consideration, together the Total FSD Shareholder Proceeds, aggregate to 55 pence per FSD Share which represents a premium of:

· 22.2 per cent. to the Closing Price of an FSD Share of 45 pence on 2 May 2025, being the Last Practicable Date;

· 29.4 per cent. to the Closing Price of an FSD Share for the entire period from 1 March 2019 to 27 February 2025 (inclusive) of 42.5 pence; and

· 26.7 per cent. to the average price of an FSD Share of 43.4 pence for the six-month period ended on the Last Practicable Date.

The Total FSD Shareholder Proceeds values the entire issued share capital of FSD at approximately £3.1 million.

An overview of the terms of the Bidco Loan Notes is set out in paragraph 14 of this Announcement. A detailed summary of the terms of the Loan Notes will be included in the Scheme Document.

The FSD Shares to be acquired pursuant to the Acquisition shall be acquired fully paid and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and other rights and interests of any nature whatsoever and together with all rights now or 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 distribution or other return of value is authorised, declared, proposed, made or paid or becomes payable by FSD in respect of the FSD Shares on or after the date of this Announcement and prior to the Effective Date, Bidco reserves the right to reduce the Cash Consideration by an amount up to the amount per FSD Share of any such dividend, distribution or return of value, except where the Scheme Shares are or will be acquired pursuant to the Scheme on a basis which entitles Bidco to receive the dividend, distribution or return of value and to retain it.

If any such dividend, distribution or return of value is paid after the date of this Announcement and Bidco exercises its right described above, any reference in this Announcement to consideration payable in respect of the Acquisition will thereafter be taken to be a reference to the Cash Consideration as reduced by such exercise. Any exercise by Bidco of such right 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 Acquisition.

The Acquisition will be subject to the Conditions and certain further terms set out in Appendix 1 to this Announcement, including, among other things: (a) the approval of Scheme Shareholders at the Court Meeting and the passing of the Resolution to be proposed at the General Meeting; (b) the sanction of the Scheme by the Court; and (c) the Scheme becoming Effective no later than the Long Stop Date. In order to become Effective, the Scheme must be approved by a majority in number of Scheme Shareholders present and voting (and entitled to vote), either in person or by proxy, at the Court Meeting representing at least 75 per cent. in value of the Scheme Shares voted by such holders.

The Scheme Document will include full details of the Scheme, together with an explanatory statement providing details of the Acquisition, and the notices convening the Court Meeting and the General Meeting. The Scheme Document will also contain the expected timetable of the Acquisition and will specify the necessary actions to be taken by FSD Shareholders. The Scheme Document will be sent to FSD Shareholders within 28 days of the date of this Announcement (or such later date as FSD, Bidco and the Panel agree).

3. Independent FSD Directors

The FSD Independent Directors are Derek Bird, Bruce Smith, Faith Lower and Daniel Engler.

FSD's other directors, Nigel Billings, Ross Hunter, Alan Lloyd, Nigel Smith and Garry Hall are directors of Bidco and are therefore not independent and have not participated in the decision to recommend the Acquisition.

4. Unanimous Recommendation of the FSD Independent Directors

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

Accordingly, the FSD Independent Directors intend to recommend unanimously that FSD Shareholders vote in favour of the Scheme at the Court Meeting and vote in favour of the Resolution to be proposed at the General Meeting (or, in the event that the Acquisition is implemented by way of an Offer, to accept the Offer) as the FSD Independent Directors who hold FSD Shares at the date of this Announcement have irrevocably undertaken to do (or procure to be done) in respect of their own beneficial holdings of a total of 1,576,668 FSD Shares, representing, in aggregate, approximately 27.7 per cent. of FSD's issued share capital as at the Last Practicable Date.

5. Background to and reasons for recommending the Acquisition

FSD has been listed on the Aquis Stock Exchange since 2012. FSD is the holding company of a trading group that engages in the design, project management, supply, installation, servicing and maintenance of mechanical and electrical projects in the UK. It primarily services the water utilities sector.

Following discussions on the future of FSD, the FSD Independent Directors and the Bidco Directors believe that in order for FSD to achieve its full potential it would be better suited to a private company environment where management would be in a stronger position to deliver its longer-term business plan.

The FSD Independent Directors believe that FSD's listing no longer represents good value for FSD and its shareholders, providing limited share price growth and access to equity capital while incurring material costs and carrying a regulatory burden. The FSD Independent Directors believe that the Company's share price seems to be more a reflection of the limited dealing in the Company's shares rather than the underlying performance of the Company. For the entire period from 1 March 2019 to 27 February 2025 (inclusive), the Closing Price for an FSD Share remained unchanged at 42.5 pence per FSD Share, despite the Company releasing interim financial statements and annual reports. During this period, turnover varied significantly, peaking at £21.8 million for the year ending 31 May 2019 and dropping to £8.1 million for the year ending 31 May 2022. Profit before tax also fluctuated, from £0.5 million in 2019 to a loss before tax of £1.9 million in 2022. Yet, these substantial changes in trading did not impact the share price.

In addition, the FSD Independent Directors believe that the lack of liquidity in the FSD Shares, and the perceived desire of many FSD Shareholders to seek an exit from their investment has acted as a restriction to both FSD's share price potential and its ability to raise funding by the issue of new shares to support new opportunities for growth.

The FSD Independent Directors see the acquisition of FSD by Bidco as an opportunity to allow the management to invest to support the FSD Group's growth potential as a private company, combined with providing an attractive cash return to FSD Shareholders.

The FSD Group has now returned to a normalised period of trading, no longer impacted by the disruption caused by COVID-19. The improved FSD Group financial results for the year ended 30 May 2024 supported management's decision to retain a core skilled resource base across the FSD Group. However past performance has been unpredictable and it is the FSD Independent Directors' belief that there is no certainty that the improved performance will continue. The Cash Consideration will be coming from the existing cash resources of the FSD Group. Taking this into account along with the repayment of the Bidco Loan Notes, existing items of a debt-like nature within the FSD Group, ongoing working capital requirements of the Enlarged Group and the challenges within the water industry, future business prospects of the FSD Group may be impacted. However, as Bidco consists of the existing management of FSD, it is the FSD Independent Directors' belief that they possess the expertise to take the business forward.

Since COVID-19 FSD's senior management team has been strengthened with the addition of three new directors Alan Lloyd, Garry Hall and Nigel Smith. Together with Nigel Billings and Ross Hunter, they now form the future senior management team of FSD. The proposed new structure by way of the Acquisition aims to provide key management with an incentive to drive the FSD Group's business forward.

The FSD Independent Directors have also consulted with certain of FSD's significant shareholders who have demonstrated their support for the Acquisition. This is evidenced by their provision of irrevocable undertakings to support the Acquisition in respect of, in aggregate (when added to those irrevocable undertakings given by the FSD Independent Directors themselves and the Bidco Directors), 4,995,000 FSD Shares representing approximately 87.7 per cent. of the FSD Shares in issue as at the Last Practicable Date.

Having given due consideration to Bidco's intentions in relation to FSD's employees, the FSD Independent Directors also believe that the FSD Group's workforce will benefit from enhanced future employment opportunities within the Enlarged Group. The FSD Independent Directors note and agree with the strategic plans of Bidco and welcome Bidco's statements that it does not intend to make any changes to the location of FSD's places of business, following the Scheme becoming Effective, and that, following the Effective Date, the existing contractual and statutory employment rights, including pensions rights, of all management and employees of the FSD Group will be fully safeguarded, and that Bidco does not intend to make any material change in their conditions of employment.

The FSD Independent Directors note and agree with Bidco's other stated intentions in respect of the business, management, employees, pension schemes and other stakeholders of FSD. In considering the financial terms of the Acquisition and determining whether they value the FSD Group and its prospects appropriately, the FSD Independent Board has taken into account a number of factors, including but not limited to, the following:

· FSD has not paid a dividend for a number of years and is unlikely to do so in the short to medium term;

· the Acquisition provides a solution to the problem of the illiquidity of FSD Shares and the relatively small size of FSD as a quoted entity, both of which limit attractiveness of the stock to institutional investors, despite the attractions of the underlying business. Since the start of 2020 to the Last Practicable Date there have only been nine share trades, involving a total of 38,001 FSD Shares, approximately 0.7 per cent. of the Company's issued share capital;

· the FSD Independent Directors believe the FSD Group's improving financial and operational performance, outlook and prospects have not been and are unlikely to be reflected in FSD's share price;

· a significant number of FSD's shareholders representing 87.7 per cent. of FSD's issued share capital have publicly expressed their support for the Acquisition, including the FSD Independent Directors by providing irrevocable undertakings as detailed in this Announcement; and

Following careful consideration of both the financial terms of the Acquisition and Bidco's plans for the FSD business under Bidco's ownership and intentions in relation to FSD's employees, the FSD Independent Directors has determined that the Acquisition is in the best interests of FSD and FSD Shareholders as a whole.

The FSD Independent Directors have considered the Acquisition and the effect of the Acquisition on the employees and business of the FSD Group. Having taken advice from BDO, they unanimously recommend FSD Shareholders to accept the Acquisition because it offers them an opportunity to dispose of all of their holdings at a premium to the current share price and is, in the opinion of the FSD Independent Directors, fair and reasonable in the context of the FSD Group's financial position and performance. In providing its advice to the FSD Independent Directors, BDO has taken into account the commercial assessments of the FSD Independent Directors.

None of the Bidco Directors have participated in the appraisal of the Acquisition by the FSD Independent Directors or the decision of the FSD Independent Directors to recommend the Acquisition to the FSD Shareholders.

Following completion of the Acquisition, it is the intention of the Bidco Board to continue to operate the FSD Group's business in the same manner and with the same objectives and strategy, as at present.

6. Information on Bidco

Bidco is a private company limited by shares, incorporated on 13 January 2020 under the laws of England and Wales.

The Bidco Directors are Nigel Billings, Ross Hunter, Alan Lloyd, Nigel Smith and Garry Hall.

Bidco has an issued share capital of 4,500 ordinary shares of 10 pence each which are held by the Bidco Directors. Bidco was incorporated with each of Nigel Billings and Ross Hunter holding one subscriber share each. 4,498 ordinary shares of 10 pence each were allotted on 22 April 2025 for a subscription price of 10 pence per share. Details of the shareholdings of Bidco are set out in the table below.

Bidco Director	Number of Bidco Shares held	Percentage of entire issued share capital of Bidco (%) rounded to one decimal place
Nigel Billings	1,125	25
Ross Hunter	1,125	25
Alan Lloyd	750	16.7
Nigel Smith	750	16.7
Garry Hall	750	16.7

Bidco has not traded since the date of its incorporation and has not entered into any obligations other than in connection with the Acquisition and the funding of the Acquisition.

7. Information relating to the FSD Group

FSD is the holding company of a trading group that engages in the design, project management, supply, installation, servicing and maintenance of mechanical and electrical projects in the UK. It primarily services the water utilities sector.

FSD was incorporated in England and Wales on 3 September 1998 as a public company limited by shares with registered number 3626335 and admitted to trading on the PLUS trading platform in December 1998, following the management buy-out of the Field Service Division of Bristol Babcock Limited by its subsidiary. Field Systems Designs Limited. FSD has been listed on the Aquis Stock Exchange since 2012.

FSD has the following subsidiaries:

· Field Systems Designs Limited

· FSD Electrical Services Limited (dormant)

· FSD Mech Limited

The FSD Directors and their respective positions are:

Name	Position
Derek Bird	Non-executive chair*
Nigel Billings	Managing Director
Ross Hunter	Field Operations Director
Alan Lloyd	Projects Director
Garry Hall	Engineering Director
Nigel Smith	FSD Mechanical Director
Bruce Smith	Executive director*
Faith Lower	Non-executive director*
Daniel Engler	Non-executive director*

* independent for the purpose of the Acquisition

8. FSD trading and outlook

The FSD Group continues to trade in line with its budget for the financial year ending 31 May 2025.

For the year ended 31 May 2024, the FSD Group reported a turnover of £17.8 million which was a 29.5 per cent. improvement on the financial year ended 31 May 2023. Trading conditions continued to improve in the financial year ended 31 May 2024 with growth in turnover and order intake. However disrupted site activity impacted the continuity of working programmes for site staff which resulted in underlying gross margins dipping slightly in the financial year to 9.0 per cent. in comparison to 9.5 per cent. from the previous financial year. These margins are expected to improve as site progress becomes more efficient.

The FSD Group made a gross profit of £1.61 million for the financial year ended 31 May 2024 compared to £1.31 million in the previous financial year, with operating profit improving to £0.45 million compared to £0.26 million in the previous financial year.

FSD published its unaudited interim results for the six months to 30 November 2024 on 27 February 2025. These results showed continued improved performance. The Water Industry's seventh Asset Management Programme (AMP7) commenced in April 2020, when framework plans by water utilities were rolled out for the 2020 to 2025 period. The impact of COVID-19 and Ofwat (The Water Services Regulation Authority) challenging the water utilities' 2020-2025 expenditure budgets caused many new orders expected by FSD under AMP7 to be delayed for three years. However, now in the final period of AMP7, order intake and consequential turnover have been improving rapidly contributing to this improved performance. FSD reported turnover of £13.1 million (H1 2023: £8.8 million) with operating profit of £1.0 million (H1 2023: £0.08 million) in its 2024 Interim Financial Statements.

There has been much recent negative media publicity regarding the performance of the water industry and their failure to maintain their infrastructure. Government agencies are increasing their pressure on solving residual environmental problems and consequently water companies accelerated their final expenditures under AMP7 for the remainder of the cycle until April 2025 (when AMP8 commences). FSD has been a benefactor of this growth in spend and order intake has been gaining momentum as new AMP7 projects were finally released.

The trading conditions ahead look promising for the FSD Group, however there is cautious optimism amongst the FSD Directors for the second half of the year with AMP8 commencing, as historically the water industry has suffered a downturn at the beginning and the end of each AMP cycle. FSD mitigated the predicted slow start of AMP8 by seeking and securing work in Scotland (where the asset management periods are different to that of England and Wales) and by targeting legacy AMP7 works rolling into AMP8 period.

FSD's cash at 30 November 2024 was £4.4 million.

9. Strategic plans and intentions with regard to management, employees and places of business

Strategic plans for FSD

Bidco is fully supportive of FSD's strategy of working with the water industry as AMP8 commences and is committed to continuing that strategy without any material changes. Bidco recognises the skills and experience of the existing management and employees of the FSD Group. Bidco intends to work closely with them to build on the strengths of the business and expects them to play an important role in the ongoing development of the business. Bidco has no intention of making any changes to the operations of the business of the FSD Group, nor any material change in the balance of skills and functions of employees and management in the FSD Group. Bidco intends to grow the business using the existing experience and industry knowledge of the employees of FSD.

Intentions for employees and management

Bidco has confirmed to the FSD Independent Directors that it does not intend to make any material reduction to the headcount of FSD Group's management or workforce, that all employment rights (including pension rights) will be fully safeguarded in accordance with applicable law and that there are no planned material changes to the conditions of employment of the management or employees of FSD or in the balance of the skills and functions of the management and employees.

Existing rights and pension schemes

Bidco confirms that it intends that the employer's defined benefit pension scheme will be maintained in accordance with contractual and statutory requirements. As previously announced this pension scheme has secured a buy-in where the assets of the scheme have been sold to secure its members benefits with Legal & General a reputable insurance company. The buy-out process is ongoing and the Acquisition is not expected to impact it.

In addition, FSD operates a defined contribution pension scheme. Bidco confirms that it does not intend to make any changes to the eligibility rules or contribution rates that currently apply under the FSD defined contribution pension plan. Bidco confirms that it will comply with all applicable laws in connection with the provision of retirement benefits.

Incentive arrangements

Bidco has not entered into, nor is it in discussions on any proposals to enter into, any form of incentivisation arrangements with any members of FSD management who are interested in FSD Shares and has no plans so to do, beyond current contractual entitlements. No proposals have been made on the terms of any incentive arrangements for relevant management.

Intentions for headquarters, locations, fixed assets and research & development

The FSD Group is involved in research and development in promoting and developing new ideas designed to improve the efficiency and effectiveness of the business. Bidco recognises the importance of research and development to FSD's ability to provide sector-specific services to its customers. Bidco has no intention of materially reducing FSD's level of expenditure on research and development. Bidco understands the importance of continued innovation in the business and intends to continue to invest in and develop FSD's research and development capabilities as part of the Enlarged Group.

Bidco confirms that it has no plans to change the FSD Group's current strategic direction and consequently there will be no material impact on either employment or on the locations of FSD Group's places of businesses (including its headquarters and headquarters' functions).

Bidco confirms that it has no intention of disposing of or redeploying any material fixed assets of any member of the FSD Group as a consequence of the Acquisition.

Trading facilities

FSD Shares are currently traded on the AQSE Growth Market and, as set out in paragraph 17 of this Announcement, a request has been made to Aquis to withdraw the admission to trading of the FSD Shares on the AQSE Growth Market, to take effect from or shortly after the date of the General Meeting.

No statements in this section are "post-offer undertakings" for the purposes of Rule 19.5 of the Code.

10. Irrevocable undertakings

Bidco has received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the Resolution at the General Meeting from the two FSD Independent Directors who are interested in FSD Shares, namely Bruce Smith and Faith Lower, in respect of a total of 1,576,668 FSD Shares, representing approximately 27.7 per cent. of the issued share capital of FSD on the Last Practicable Date.

Bidco has received irrevocable undertakings to vote in favour of the Resolution at the General Meeting from the two Bidco Directors who are interested in FSD Shares, namely Nigel Billings and Ross Hunter, in respect of a total of 100,000 FSD Shares, representing approximately 1.8 per cent. of the issued share capital of FSD on the Last Practicable Date. These Bidco Directors have undertaken to not exercise their voting rights to vote at the Court Meeting.

Bidco has received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the Resolution at the General Meeting, from other FSD Shareholders in respect of a total of 3,318,332 FSD Shares, representing approximately 58.3 per cent. of the issued share capital of FSD on the Last Practicable Date.

Accordingly, Bidco has received irrevocable undertakings in respect of a total of 4,995,000 FSD Shares, representing, in aggregate, approximately 87.7 per cent. of the issued share capital of FSD on the Last Practicable Date.

Further details of these irrevocable undertakings, including the circumstances in which they cease to be binding, are set out in Appendix 3 to this Announcement.

11. FSD share options

FSD historically used to offer options over shares in the capital of FSD to employees under a share option scheme. All such options over shares have since expired and there are no employees (or otherwise) entitled to exercise any options over any shares in the capital of FSD.

12. Financing for the Acquisition

The Cash Consideration, being £2,277,000, will be satisfied in full through cash resources provided by way of a loan to Bidco by FSD. Bidco and FSD have each undertaken to the other, conditional upon the Scheme becoming Effective and FSD being re-registered as a private limited company (which is expected to be before the Scheme becomes Effective), that they will procure the entry into the Loan Agreement for an amount of £2.3 million immediately after the Scheme is made Effective or, if later, the day that FSD is re-registered as a private limited company.

As required by the Code, BDO is satisfied that sufficient cash resources are available to Bidco to enable it to satisfy in full the Cash Consideration payable to FSD Shareholders under the terms of the Acquisition.

13. Acquisition‑related arrangements

As set out in more detail at paragraph 112 above, conditional on the Scheme becoming Effective and FSD being re-registered as a private limited company, Bidco and FSD will enter into the Loan Agreement immediately after the Scheme becomes Effective or, if later, the day that FSD is re-registered as a private limited company.

Bidco and FSD have each undertaken to the other that, conditional upon the Scheme becoming Effective and FSD being re-registered as a private limited company, they will procure the entry into the Loan Agreement immediately after the Scheme becomes Effective or, if later, the day that FSD is re-registered as a private limited company.

14. Summary of the terms of the Bidco Loan Notes

An overview of the Bidco Loan Notes is provided below. A copy of the Bidco Loan Note Instrument will be made available on FSD's website at www.fsdl.co.uk following posting of the Scheme Document.

The Bidco Loan Notes:

· will be unsecured;

· will be governed by English law;

· will be issued by Bidco, credited as fully paid in integral multiples of £0.15 in principal amount;

· will be redeemable over the course of three years following the Scheme becoming Effective, with a third of any amount outstanding being redeemable on each of the first, second and third anniversary of the date of issue;

· will not be redeemable within the first six months of issue;

· will attract a commercial rate of interest of approximately 5 per cent. per annum;

· will attract a default interest rate of 2.5 per cent. per month on any amount that is due and payable but unpaid on a due date; and

· will be transferable.

15. Employee Benefit Trust

The Acquisition will also extend to FSD Shares held by the Field System Design Employee Benefit Trust ("EBT"). Smith & Williamson Nominees Limited is the registered holder of such FSD Shares for and on behalf of the EBT. There are no holders of entitlements to FSD Shares (being options over FSD Shares or otherwise) under the EBT.

The EBT owns 297,500 FSD Shares, representing approximately 5.23 per cent. of the entire issued share capital of FSD on the Last Practicable Date.

16. Structure of and conditions to the Acquisition

It is intended that the Acquisition will be effected by means of a Court-sanctioned scheme of arrangement between FSD and the Scheme Shareholders under Part 26 of the Companies Act, although Bidco reserves the right to elect (with the consent of the Panel) to implement the Acquisition by way of a Takeover Offer as an alternative to the Scheme.

The effect of the Scheme is to provide for Bidco to become the holder of the entire issued and to be issued ordinary share capital of FSD. This is to be achieved by the transfer of the Scheme Shares to Bidco, in consideration for which the Scheme Shareholders will receive the Cash Consideration and Loan Note Consideration payable under the Scheme.

To become Effective, the Scheme must be approved at the Court Meeting by a majority in number of Scheme Shareholders present and voting (and entitled to vote), either in person or by proxy, at the Court Meeting and who represent 75 per cent. or more in value of the Scheme Shares voted by those Scheme Shareholders. In respect of the approval of the Scheme, Scheme Shareholders will be entitled to cast one vote for each Scheme Share held. The Scheme also requires the Resolution to be approved by the requisite majority of FSD Shareholders at the General Meeting. It is expected that the General Meeting will be held immediately after the Court Meeting. In respect of the Resolution to be proposed at the General Meeting, FSD Shareholders will be entitled to cast one vote for each FSD Share held.

Once the necessary approvals have been obtained at the Court Meeting and the General Meeting, and the other Conditions (except for Conditions 1 (Long Stop Date), 2.1.1, 2.2.1 and 2.3.1 (Scheme approval), set out in Part A of Appendix 1) have been satisfied or, if applicable, waived, the Scheme must be sanctioned by the Court (with or without modification but subject to any modification being on terms reasonably acceptable to Bidco and FSD). The Scheme will only become Effective once a copy of the Scheme Court Order is delivered to the Registrar of Companies for registration.

As a result of their interest in the Acquisition and/or their relationships with Bidco, Nigel Billings and Ross Hunter (being Bidco Directors) have undertaken that they will not exercise their voting rights to vote at the Court Meeting to consider and if thought fit approve the Scheme. Their relevant holdings of FSD Shares comprise of approximately 1.8 per cent. of the issued share capital of FSD on the Last Practicable Date. Each is however entitled to vote at the General Meeting.

In order that the Court can be satisfied that the votes cast constitute a fair representation of the views of FSD Shareholders, it is important that as many votes as possible are cast in person or by proxy at the Court Meeting.

The Acquisition is subject to the Conditions and further terms set out in Appendix 1 to this Announcement and to the full terms and conditions that will be set out in the Scheme Document, including, among other things:

(a) the Scheme becoming Effective by 11.59 p.m. (London time) on the Long Stop Date;

(b) the approval of the Scheme by a majority in number of Scheme Shareholders present and voting (and entitled to vote), either in person or by proxy, at the Court Meeting and who represent at least 75 per cent. in value of the Scheme Shares voted by such holders;

(d) the sanction of the Scheme by the Court (without modification or with modification on terms acceptable to Bidco and FSD); and

(e) a copy of the Scheme Court Order is delivered to the Registrar of Companies.

The Scheme Document will include full details of the Scheme, together with notices of the Court Meeting, the General Meeting (and the associated Forms of Proxy) and the expected timetable. It will also specify the action to be taken by Scheme Shareholders.

Subject to the satisfaction of the Conditions, the Scheme is expected to become effective during the second quarter of 2025.

Upon the Scheme becoming Effective, it will be binding on all Scheme Shareholders, irrespective of whether or not they attended or voted at the Court Meeting or the General Meeting (and if they attended and voted, whether or not they voted in favour) and the Cash Consideration payable and the Bidco Loan Note Certificates under the Scheme will be issued and despatched to Scheme Shareholders no later than 14 days after the Effective Date. Share certificates in respect of FSD Shares will cease to be valid and entitlements to FSD Shares held within the CREST system will be cancelled.

Any FSD Shares issued before the Scheme Record Time will be subject to the terms of the Scheme. The Resolution to be proposed at the General Meeting will, among other matters, provide that the FSD Articles be amended to incorporate provisions requiring any FSD Shares issued after the Scheme Record Time to be automatically transferred to Bidco on the same terms as the Acquisition (other than terms as to timings and formalities). The provisions of the FSD Articles (as amended) will avoid any person holding FSD Shares after the Effective Date.

If the Scheme does not become Effective on or before the Long Stop Date, it will lapse and the Acquisition will not proceed (unless the Panel otherwise consents). The deadlines for the timing of the Court Meeting, the General Meeting and the Court hearing to approve the Scheme may be waived by Bidco, and the Long Stop Date may be extended by agreement between Bidco and FSD.

The Scheme will be governed by English law and will be subject to the jurisdiction of the Court and the applicable requirements of the Code, the Panel, the Aquis Rules and the FCA.

17. Withdrawal of admission to trading on Aquis and re-registration as a private company

An application has been made to Aquis to withdraw the admission to trading of FSD Shares on the AQSE Growth Market, subject to FSD Shareholder approval, with effect from the date immediately after the date of the General Meeting.

Pursuant to Rule 5.3 of the Aquis Rules, FSD is required to give at least 20 clear Business Days' notice of the withdrawal of admission to trading of its shares. It is currently expected that the withdrawal will be on or around 10 June 2025.

The last day of dealing in FSD Shares on the AQSE Growth Market is currently expected to be the Business Day of the General Meeting and it is currently intended that no transfers will be registered after 6.00 p.m. on that date.

On the first Business Day after the General Meeting, entitlements to FSD Shares held within the CREST system will be cancelled and share certificates in respect of FSD Shares will cease to be valid.

It is also intended that, following the General Meeting and the withdrawal of the admission to trading of the FSD Shares on the AQSE Growth Market, FSD will be re-registered as a private limited company.

The withdrawal of admission to trading on the AQSE Growth Market and re-registration as a private company are not conditional on the Scheme becoming effective but are required in order that the Scheme can become Effective.

18. Interests in FSD Shares

As at close of business on the Last Practicable Date, save for: (i) the irrevocable undertakings referred to in paragraph 10 above, (ii) 50,000 FSD Shares held by Nigel Billings and (iii) the 50,000 FSD Shares held by Ross Hunter; neither Bidco, nor any of the Bidco Directors, nor any member of the Bidco Group, nor, so far as the Bidco Directors are aware, any person acting in concert with Bidco for the purposes of the Acquisition:

(a) had any interest in, or right to subscribe for, any relevant securities of FSD;

(b) 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, any relevant securities of FSD;

(c) had procured an irrevocable commitment to accept the terms of the Acquisition in respect of relevant securities of FSD;

(d) had borrowed or lent, or entered into any financial collateral arrangements or dealing arrangements in respect of, any relevant securities of FSD; or

(e) is party to any Dealing Arrangement in relation to relevant securities of FSD.

In the interests of secrecy before this Announcement, Bidco has not made any enquiries in respect of the matters referred to in this paragraph 18 of certain parties who may be deemed by the Panel to be acting in concert with Bidco for the purposes of the Acquisition. Enquiries of such parties will be made as soon as practicable following the date of this Announcement. Therefore, if Bidco becomes aware, following the making of such enquiries, that any of its concert parties have any such interests in relevant securities of FSD, all relevant details in respect of Bidco's concert parties will be included in Bidco's Opening Position Disclosure in accordance with Rule 8.1(a) and Note 2(a)(i) on Rule 8 of the Code.

19. Overseas Shareholders

The availability of the Acquisition and the distribution of this Announcement to FSD Shareholders who are not resident in the United Kingdom may be affected by the laws and regulations of the relevant jurisdiction in which they are located. Such persons should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction. Any FSD Shareholders who are in any doubt regarding such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.

This Announcement does not constitute an offer for sale of any securities or an offer or an invitation to purchase any securities. FSD Shareholders are advised to read carefully the Scheme Document and related Forms of Proxy once these have been despatched.

20. Documents available on website

Copies of the following documents will be available promptly on FSD's website at www.fsdl.co.uk by no later than 12 noon on the Business Day following the date of this Announcement, subject to certain restrictions relating to persons residing in Restricted Jurisdictions until the end of the Offer Period:

(a) this Announcement;

(b) the irrevocable undertakings described in Appendix 3 to this Announcement;

(d) the documents relating to the financing of the Acquisition; and

(e) the consent letter from BDO, referred to in paragraph 22 below.

None of the content of any of the websites referred to in this Announcement nor the content of any website accessible from hyperlinks is incorporated into, or forms part of, this Announcement.

21. Reserving the right to proceed by way of a Takeover Offer

Subject to obtaining the consent of the Panel, Bidco reserves the right to elect to implement the Acquisition by way of a Takeover Offer as an alternative to the Scheme.

In such event, the Takeover Offer will be implemented on the same terms and conditions, so far as applicable, as those which would apply to the Scheme subject to appropriate amendments to reflect the change in method of effecting the Acquisition, including (without limitation) the inclusion of an acceptance condition set at 90 per cent. of FSD Shares to which the Takeover Offer relates (or such lesser percentage as may be determined after consultation with the Panel (if necessary)), being in any case more than 50 per cent. of the voting rights normally exercisable at a general meeting of FSD, including, for this purpose, any such voting rights attaching to FSD Shares that are issued before the Takeover Offer becomes or is declared unconditional, whether pursuant to the exercise of any outstanding subscription or conversion rights or otherwise.

22. General

The Acquisition will be subject to the Conditions and other terms set out in Appendix 1 to this Announcement and to the full terms and conditions which will be set out in the Scheme Document. The Scheme Document will be despatched to FSD Shareholders as soon as is practicable.

In deciding whether or not to vote or procure votes to approve the Scheme at the Court Meeting or to vote or procure votes in favour of the Resolution at the General Meeting in respect of their FSD Shares, FSD Shareholders should rely on the information contained, and follow the procedures described, in the Scheme Document.

The FSD Directors are responsible for arranging this Announcement on behalf of FSD. The LEI of FSD is 213800KRQ4J2O1QTW970.

BDO has given and not withdrawn its consent to the publication of this Announcement with the inclusion therein of the references to its name in the form and context in which it appears.

The bases and sources for certain financial information contained in this Announcement are set out in Appendix 2 to this Announcement. Details of the irrevocable undertakings received by Bidco and given by certain FSD Directors and certain FSD Shareholders are set out in Appendix 3 to this Announcement. The defined terms used in this Announcement are set out in Appendix 4 to this Announcement.

Enquiries:

FSD and Bidco

Nigel Billings Tel: +44 (0)1306 880 800

BDO (Financial Adviser)

John Stephan Tel :+44(0) 207 486 5888

Susan Jarram Tel: +44(0) 207 486 5888

IMPORTANT NOTICES

Disclaimer

Further information

This Announcement does not constitute a prospectus or a prospectus exempted document.

Overseas Shareholders

The Acquisition will be subject to the applicable requirements of English law, the Code, the Panel, the Aquis Rules and the FCA.

Further details in relation to FSD Shareholders in overseas jurisdictions will be contained in the Scheme Document.

Additional information for U.S. investors

Forward-looking statements

There are a number of factors that could affect the future operations of the Wider Bidco Group, the Wider FSD Group and/or the Enlarged Group and that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include the satisfaction (or, where permitted, waiver) of the Conditions, as well as additional factors, such as: domestic and global business and economic conditions; the impact of pandemics, asset prices; market‑related risks such as fluctuations in interest rates and exchange rates, industry trends, competition, changes in government and regulation, changes in the policies and actions of governments and/or regulatory authorities (including changes related to capital and tax), changes in political and economic stability (including exposures to terrorist activities, the UK's exit from the European Union, Eurozone instability, the Russia-Ukraine conflict, the ongoing conflict in the Middle East, disruption in business operations due to reorganisation activities, interest rate, inflation, deflation and currency fluctuations), the timing impact and other uncertainties of future or planned acquisitions or disposals or offers,, the Enlarged Group incurring and/or experiencing unanticipated costs and/or delays (including IT system failures, cyber-crime, fraud and pension scheme liabilities) or difficulties relating to the Acquisition when the Acquisition is implemented. Other unknown or unpredictable factors could affect future operations and/or cause actual results to differ materially from those in the forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors.

Each forward-looking statement speaks only as of the date of this Announcement. Neither the Bidco Group, the FSD Group nor any of their respective associates or directors, officers or advisers, provides any representation, warranty, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur. Forward-looking statements involve inherent risks and uncertainties. All forward-looking statements contained in this Announcement are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers are cautioned not to place undue reliance on these forward-looking statements. Other than in accordance with their legal or regulatory obligations (including under the Code, the UK Market Abuse Regulation, the Aquis Rules and the DTRs), neither the Wider Bidco Group nor the Wider FSD Group is under or undertakes any obligation, and each of the foregoing expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

No profit forecasts or estimates

Disclosure requirements of the Code

Rule 2.9 Disclosure

Electronic communications

Publication on a website and availability of hard copies

Rounding

appendix 1

CONDITIONS TO AND CERTAIN FURTHER TERMS OF THE ACQUISITION

The Acquisition will be subject to the terms and conditions set out in this Appendix and in the Scheme Document.

PART A

1. Long Stop Date

The Acquisition is conditional on the Scheme becoming unconditional and effective, subject to the Code, by no later than 11.59 p.m. (London Time) on the Long Stop Date.

2. Scheme approval

The Scheme will be subject to the following conditions:

2.1 Court Meeting

2.1.1 its approval by a majority in number representing not less than 75 per cent. in value of the Scheme Shareholders, in each case present, entitled to vote and voting, either in person or by proxy, at the Court Meeting or at any separate class meeting which may be required by the Court (as applicable) or at any adjournment of any such meeting; and

2.1.2 such Court Meeting and any separate class meeting which may be required by the Court being held on or before the 22nd day after the expected date of the Court Meeting to be set out in the Scheme Document in due course (or such later date as: (a) Bidco and FSD may agree; or (b) (in a competitive situation) as may be specified by Bidco with the consent of the Panel, and in each case that, if so required, the Court may allow);

2.2 General Meeting

2.2.1 the Resolution being duly passed by the requisite majority at the General Meeting or at any adjournment thereof; and

2.2.2 the General Meeting being held on or before the 22nd day after the expected date of the General Meeting to be set out in the Scheme Document in due course (or such later date as: (a) Bidco and FSD may agree or (b) (in a competitive situation) as may be specified by Bidco with the consent of the Panel, and in each case that, if so required, the Court may allow); and

2.3 Sanction of the Scheme

2.3.1 the sanction of the Scheme by the Court with or without modification (but subject to any such modification being acceptable to Bidco and FSD) and the delivery of a copy of the Court Order to the Registrar of Companies (the "Court Sanction"); and

2.3.2 the Sanction Hearing being held on or before the 22nd day after the expected date of the Sanction Hearing to be set out in the Scheme Document in due course (or such later date as: (a) Bidco and FSD may agree; or (b) (in a competitive situation) as may be specified by Bidco with the consent of the Panel, and in each case that, if so required, the Court may allow).

3. GENERAL CONDITIONS

In addition, Bidco and FSD have agreed that, subject to Part B below and to the requirements of the Panel, the Acquisition will be conditional on the following Conditions and, accordingly, the necessary actions to make the Scheme Effective will not be taken unless the following Conditions (as amended, if appropriate) have been satisfied or, where relevant, waived:

3.1 Antitrust

United Kingdom

either:

3.1.1 as at the date on which all other Conditions (with the exception of the Conditions set out in paragraphs 1 and 2.3.1 of Part A of this Appendix 1) are satisfied or waived, the CMA not having:

(a) requested submission of a merger notice in relation to the Acquisition;

(b) given notice to either party that it intends to carry out an investigation to determine whether to make a reference within the meaning of section 33 of the Enterprise Act 2002 (the "EA") (a "Phase 1 Investigation") in relation to the Acquisition;

(c) indicated that the statutory review period in which the CMA has to decide whether to make a reference in relation to the Acquisition under section 34ZA of the EA has begun; or

(d) requested documents, information or attendance by witnesses (including under section 109 of the EA) which may indicate that it is considering whether to commence the aforementioned statutory review period in respect of the Acquisition;

3.1.2 if the CMA opens a Phase 1 Investigation into the Acquisition, confirmation that the Acquisition will not be subject to a reference under section 33 or section 45 of the EA (a "Phase 2 CMA Reference"); or

3.1.3 in the event that a Phase 2 CMA Reference is made in relation to the Acquisition, confirmation from the CMA (or as the case may be, the Secretary of State) either:

(a) that the Acquisition may proceed without any undertakings or conditions; or

(b) the Acquisition and any matter arising from or relating to the Acquisition may proceed on terms reasonably satisfactory to Bidco;

3.2 Foreign direct investment, national security and foreign subsidies

National Security and Investment Act 2021

if:

3.2.1 the Acquisition is a notifiable acquisition under the NSIA, the requisite notification having been made and the Secretary of State confirming that no further action will be taken under the NSIA in relation to the Acquisition or making a final order under the NSIA in respect of the Acquisition, the provisions of which allow the Acquisition to proceed on terms reasonably satisfactory to Bidco; or

3.2.2 prior to the date on which all other Conditions are satisfied or waived, the Secretary of State issues a call-in notice within the meaning of the NSIA in relation to the Acquisition, the Secretary of State: (A) confirming that no further action will be taken under the NSIA in relation to the Acquisition; or (B) making a final order under the NSIA in respect of the Acquisition, the provisions of which allow the Acquisition to proceed on terms reasonably satisfactory to Bidco;

3.3 Notifications, waiting periods and authorisations

other than in respect of or in connection with the Conditions set out in paragraphs 3.1 and 3.2 above,

3.3.1 all:

(a) material notifications, filings or applications in any jurisdiction which are necessary or considered appropriate by Bidco (acting reasonably) having been made;

(b) waiting periods (including any extensions thereof) under any applicable legislation or regulation of any jurisdiction which are necessary or considered appropriate by Bidco (acting reasonably) having expired, lapsed or been terminated (as appropriate); and

in each case in connection with the Acquisition including, without limitation, its implementation and financing or the proposed direct or indirect acquisition of any shares or other securities in, or control of, FSD or any member of the Wider FSD Group by any member of the Bidco Group;

3.3.2 all Authorisations which are necessary or considered appropriate by Bidco (acting reasonably) in any jurisdiction in connection with the Acquisition which are material in the context of the Wider Bidco Group or the Wider FSD Group as a whole or for or in respect of the Acquisition, including, without limitation, its implementation and financing or the proposed direct or indirect acquisition of any shares or other securities in, or control of, FSD or any member of the Wider FSD Group by any member of the Bidco Group (other than pursuant to Chapter 3 of Part 28 of the Companies Act) having been obtained in terms and in a form reasonably satisfactory to Bidco from all appropriate Third Parties or persons with whom any member of the Wider FSD Group has entered into contractual arrangements; and

3.3.3 all Authorisations which are necessary or considered appropriate by Bidco (acting reasonably) to carry on the business of any member of the Wider FSD Group in any jurisdiction which are material in the context of the Wider Bidco Group or the Wider FSD Group as a whole or for or in respect of the Acquisition having been obtained and remaining in full force and effect and all filings necessary for such purpose having been made and there being no notice or intimation of any intention to revoke, suspend, restrict, modify or not to renew any of the same;

3.4 General antitrust and regulatory

other than in respect of or in connection with the Conditions set out in paragraphs 3.1 and 3.2 above, no Third Party having given notice of a decision to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference (and, in each case, not having withdrawn the same), or having required any action to be taken or otherwise having done anything, or having enacted, made or proposed any statute, regulation, decision, order or change to published practice (and, in each case, not having withdrawn the same) or having taken any other steps, and there not continuing to be outstanding any statute, regulation, decision or order, which in each case is or might reasonably be expected to:

3.4.1 require, prevent or materially delay the divestiture, or materially alter the terms envisaged for any proposed divestiture by any member of the Wider Bidco Group or any member of the Wider FSD Group of all or any material portion of their respective businesses, assets or property or impose any material limitation on the ability of any of them to conduct their respective businesses (or any part of them) or to own, control or manage any of their respective assets or properties or any part thereof which, in any such case, is material in the context of the Wider Bidco Group or the Wider FSD Group in either case taken as a whole or in the context of the Acquisition;

3.4.2 require, prevent or materially delay, or alter the terms envisaged for, any proposed divestiture by any member of the Wider Bidco Group of any shares or other securities in any member of the Wider FSD Group or any member of the Wider Bidco Group;

3.4.3 impose any material limitation on, or result in a material delay in, the ability of any member of the Wider Bidco Group to acquire or to hold or to exercise effectively, in each case directly or indirectly, all or any rights of ownership in respect of shares or loans or securities convertible into shares or any other securities (or the equivalent) in any member of the Wider FSD Group or to exercise voting or management control over any such member;

3.4.4 otherwise adversely affect any or all of the business, assets, profits or prospects of any member of the Wider Bidco Group or of any member of the Wider FSD Group to an extent which is material in the context of the Wider Bidco Group or the Wider FSD Group in either case taken as a whole or in the context of the Acquisition;

3.4.5 make the Acquisition or its implementation or the acquisition or proposed acquisition by Bidco or any member of the Wider Bidco Group of any shares or other securities in, or control or management of, FSD void, illegal and/or unenforceable under the laws of any relevant jurisdiction, or otherwise, directly or indirectly, materially restrain, restrict, prohibit or materially delay the same, or impose additional material conditions or obligations with respect thereto, or otherwise challenge, impede or interfere or require material amendment of the Acquisition or any part thereof;

3.4.6 require (save as envisaged in the terms of the Acquisition or sections 974 to 991 (inclusive) of the Companies Act) any member of the Wider Bidco Group or the Wider FSD Group to offer to acquire any shares or other securities (or the equivalent) or interest in any member of the Wider FSD Group or any asset owned by any Third Party;

3.4.7 impose any limitation on or result in any delay in the ability of any member of the Wider Bidco Group to conduct, integrate or coordinate its business, or any part of it, with the businesses or any part of the businesses of any other member of the Wider FSD Group which is adverse to and material in the context of the Wider FSD Group taken as a whole or in the context of the Acquisition; or

3.4.8 result in any member of the Wider FSD Group or any member of the Wider Bidco Group ceasing to be able to carry on business under any name under which it presently does so and such cessation would be material in the context of the Bidco Group or the FSD Group in either case taken as a whole,

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

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

save as Disclosed, there being no provision of any agreement, arrangement, licence, permit, lease, franchise or other instrument to which any member of the Wider FSD 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, or any event or circumstance which, in each case as a consequence of the Acquisition or the proposed acquisition of any shares or other securities (or equivalent) in FSD or because of a change in the control or management of any member of the Wider FSD Group or otherwise, could or would reasonably be expected to result in (in each case to an extent which is or would be material and adverse in the context of the Wider FSD Group taken as a whole or in the context of the Acquisition):

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

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

3.5.3 any assets or interests of any such member being or failing to be disposed of or charged or ceasing to be available to any member of the Wider FSD Group or any right arising under which any such asset or interest could be required to be disposed of or charged or could cease to be available to any such member other than in the ordinary course of business;

3.5.4 other than in the ordinary course of business, the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property, assets or interest of any member of the Wider FSD Group or any such mortgage, charge or other security interest (whenever arising or having arisen) becoming enforceable;

3.5.5 the rights, liabilities, obligations or interests of any member of the Wider FSD Group under any agreement, arrangement, licence, permit, lease, franchise or other interest in, or the business or interests of any such member with, any person, firm, company or body (or any arrangement or arrangements relating to any such interest or business) being or being capable of becoming terminated, adversely modified or affected;

3.5.6 the value or the financial or trading position or prospects of any member of the Wider FSD Group being prejudiced or adversely affected;

3.5.7 any member of the Wider FSD Group ceasing to be able to carry on business under any name under which it presently does so;

3.5.8 any liability of any member of the Wider FSD Group to make any severance, termination, bonus or other payment to any of its directors or other officers, save in the ordinary course of business;

3.5.9 the creation or acceleration of any liability, actual or contingent, by any member of the Wider FSD Group (including any tax liability or any obligation to obtain or acquire any Authorisation from any Third Party or any person) other than trade creditors or other liabilities incurred in the ordinary course of business; or

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

and, save as Disclosed, no event having occurred which, under any provision of any agreement, arrangement, licence, permit, lease, franchise or other instrument to which any member of the Wider FSD Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, would or might reasonably be expected to result in any of the events or circumstances as are referred to in paragraphs 3.5.1 to 3.5.10 of this Condition;

3.6 Certain events occurring since Last Accounts Date

save as Disclosed, no member of the Wider FSD Group having, since the Last Accounts Date:

3.6.1 issued or agreed to issue, authorised or proposed or announced its intention to authorise or propose, the issue of additional shares of any class or transferred or sold or agreed to transfer or sell or authorised or proposed the transfer or sale of any shares out of treasury, save as between FSD and wholly-owned subsidiaries of FSD;

3.6.2 issued, or agreed to issue, authorised or proposed or announced its intention to authorise or propose the issue of securities convertible into shares of any class or rights, warrants or options to subscribe for, or acquire, any such shares or convertible securities, save as between FSD and wholly-owned subsidiaries of FSD;

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

3.6.4 save for the Acquisition and any transactions between FSD and its wholly-owned subsidiaries or between such wholly-owned subsidiaries, authorised, implemented or announced any merger, demerger, reconstruction, amalgamation or scheme or acquired or disposed of or transferred, mortgaged, charged or created any security interest over any assets or any right, title or interest in any asset (including shares and trade investments or the equivalent thereof) or authorised or proposed or announced any intention to propose any merger, demerger, reconstruction, amalgamation, scheme, acquisition, disposal, transfer, mortgage, charge or security interest, in each case, other than in the ordinary course of business and in each case, to the extent which is material in the context of the Wider FSD Group taken as a whole or in the context of the Acquisition;

3.6.5 save for transactions between FSD and its wholly-owned subsidiaries or between such wholly-owned subsidiaries, made or authorised or proposed or announced an intention to propose any material change in its loan capital (or the equivalent thereof), in each case, to the extent material in the context of the Wider FSD Group taken as a whole or in the context of the Acquisition;

3.6.6 issued, authorised or proposed the issue of, or made any change in or to, any debentures or (save for transactions between FSD and its wholly-owned subsidiaries or between such wholly-owned subsidiaries or in the ordinary course of business), incurred or increased any indebtedness or become subject to or increased any liability (actual or contingent);

3.6.7 purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares or other securities or reduced or, save in respect to the matters mentioned in paragraph 3.6.1 or 3.6.2 above, made any other change to any part of its share capital;

3.6.8 entered into or varied or authorised, proposed or announced its intention to enter into or vary any material contract, arrangement, agreement, transaction or commitment (whether in respect of capital expenditure or otherwise) which is of a long-term, onerous or unusual nature or magnitude or which is or is reasonably likely to be restrictive on the businesses of any member of the Wider FSD Group or the Wider Bidco Group and which, in any such case, is material in the context of the Wider FSD Group taken as a whole or in the context of the Acquisition;

3.6.9 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;

3.6.10 other than in respect of a member of the Wider FSD Group which is dormant and was solvent at the relevant time, taken or proposed any corporate action or steps or had any legal proceedings started or threatened against it in relation to the suspension of payments, a moratorium of any indebtedness, its winding-up (voluntary or otherwise), dissolution or reorganisation or for the appointment of a receiver, administrative receiver, administrator, manager, trustee or similar officer of all or any of its assets or revenues or any analogous or equivalent steps or proceedings in any jurisdiction or appointed any analogous or equivalent person in any jurisdiction or had any such person appointed;

3.6.11 commenced negotiations with any of its creditors or taken any step, in each case in connection with financial difficulties of the Wider FSD Group, 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, or entered into any agreement with any of its creditors to refinance, reschedule or restructure any of its indebtedness;

3.6.12 other than in respect of claims between FSD and wholly-owned subsidiaries of FSD or between such wholly-owned subsidiaries, waived, settled or compromised any claim (otherwise than in the ordinary course of business), which is material in the context of the Wider FSD Group taken as a whole or in the context of the Acquisition;

3.6.13 made any alteration to its constitutional or other governing or incorporation documents (other than in connection with the Scheme);

3.6.14 except in relation to changes made or agreed as a result of, or arising from, law or changes to applicable law, made or agreed or consented to any change to:

(a) the terms of the trust deeds, scheme rules or other documentation constituting the pension scheme(s) established by any member of the Wider FSD Group for its directors, employees or their dependents;

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

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

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

in each case, which has or is reasonably likely to have a material adverse effect on the Wider FSD Group taken as a whole or in the context of the Acquisition;

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

3.6.16 entered into, implemented or authorised the entry into, any joint venture, asset or profit sharing arrangement, partnership or merger of business or corporate entities which is material in the context of the Wider FSD Group taken as a whole;

3.6.17 on or after the date of this Announcement, and other than with the consent of Bidco, taken (or agreed or proposed to take) any action which requires, or would require, the consent of the Panel or the approval of FSD Shareholders in a general meeting in accordance with, or as contemplated by, Rule 21.1 of the Code; or

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

3.7 No adverse change, litigation or regulatory enquiry

save as Disclosed, since the Last Accounts Date:

3.7.1 no adverse change or deterioration having occurred and no circumstances having arisen which would or might reasonably be expected to result in any adverse change or deterioration in the business, assets, financial or trading position, profits, prospects or operational performance of any member of the Wider FSD Group which, in any such case, is material in the context of the Wider FSD Group taken as a whole or in the context of the Acquisition;

3.7.2 no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Wider FSD Group is or may become a party (whether as a claimant, defendant or otherwise) and no enquiry, review or investigation by, or complaint or reference to, any Third Party or other investigative body against or in respect of any member of the Wider FSD Group, having been instituted, announced, implemented or threatened by or against or remaining outstanding in respect of any member of the Wider FSD Group which in any such case has had or might reasonably be expected to have a material adverse effect on the Wider FSD Group taken as a whole or in the context of the Acquisition;

3.7.3 no contingent or other liability of any member of the Wider FSD Group having arisen or become apparent to Bidco or increased other than in the ordinary course of business which has had or might reasonably be expected to affect the business, assets, financial or trading position, profits or prospects of any member of the Wider FSD Group to an extent which is material in the context of the Wider FSD Group taken as a whole or in the context of the Acquisition;

3.7.4 no member of the Wider FSD Group having conducted its business in breach of any applicable laws and regulations which in any case is material in the context of the FSD Group taken as a whole or in the context of the Acquisition; and

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

3.8 No discovery of certain matters

3.8.1 save as Disclosed, Bidco not having discovered that, in each case to an extent which is material in the context of the Wider FSD Group taken as a whole or in the context of the Acquisition:

(a) any financial, business or other information concerning the Wider FSD Group publicly disclosed at any time by or on behalf of any member of the Wider FSD Group prior to the date of this Announcement is misleading, contains a misrepresentation of fact or omits to state a fact necessary to make that information not misleading; or

(b) any member of the Wider FSD Group is subject to any liability (actual or contingent);

3.8.2 save as Disclosed, Bidco not having discovered that, in each case to an extent which is material in the context of the FSD Group taken as a whole or in the context of the Acquisition:

(a) any past or present member of the Wider FSD Group has failed to comply with any and/or all applicable legislation, regulation or other requirement, of any jurisdiction or any Authorisations with regard to the use, treatment, handling, storage, carriage, disposal, spillage, release, discharge, leak or emission of any waste or hazardous substance or any substance likely to impair the environment (including property) or harm human health or animal health or otherwise relating to environmental matters or the health and safety of humans, or that there has otherwise been any such use, treatment, handling, storage, carriage, disposal, spillage, release, discharge, leak or emission (whether or not the same constituted a non-compliance by any person with any such legislation or regulations or other requirement, and wherever the same may have taken place) any of which storage, carriage, disposal, spillage, release, discharge, leak or emission would be likely to give rise to any liability (actual or contingent) or cost on the part of any member of the Wider FSD Group;

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

(c) circumstances exist (whether as a result of the making of the Acquisition or otherwise) which would be reasonably likely to lead to any Third Party instituting, or whereby any member of the Wider Bidco Group or any present or past member of the Wider FSD Group would be likely to be required to institute, an environmental audit or take any other steps which would in any such case be reasonably likely to result in any liability (whether actual or contingent) to improve, modify existing or install new plant, machinery or equipment or carry out changes in the processes currently carried out or make good, remediate, repair, re-instate or clean up any land or other asset or property of any description currently or previously owned, occupied or made use of by any past or present member of the Wider FSD Group (or on its behalf) or by any person for which a member of the Wider FSD Group is or has been responsible, or in which any such member may have or previously have had or be deemed to have had an interest; or

(d) circumstances exist whereby a person or class of persons would be likely to have any claim or claims in respect of any product or process of manufacture or materials used therein currently or previously manufactured, sold or carried out by any past or present member of the Wider FSD Group;

3.9 Anti-corruption, economic sanctions, criminal property and money laundering

save as Disclosed, Bidco not having discovered that:

3.9.1 any past or present member, director, officer or employee of the Wider FSD Group or any person that performs or has performed services for or on behalf of the Wider FSD Group is or has at any time engaged in any activity, practice or conduct which would constitute an offence under the Bribery Act 2010, the U.S. Foreign Corrupt Practices Act of 1977 or any other applicable anti-corruption or anti-bribery law, rule or regulation or any other applicable law, rule or regulation concerning improper payments or kickbacks;

3.9.2 any asset of any member of the Wider FSD 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 proceeds of crime under any other applicable law, rule or regulation concerning money laundering or proceeds of crime or any member of the Wider FSD Group is found to have engaged in activities constituting money laundering under the Proceeds of Crime Act 2002 or any other applicable law, rule or regulation concerning money laundering;

3.9.3 a member of the Wider FSD Group has engaged in any transaction or conduct which would cause any member of the Wider FSD Group to be in breach of (or would cause Bidco or any member of the Wider Bidco Group to be in breach of or to be reasonably likely to become the subject of sanctions under, following completion of the Acquisition) applicable economic sanctions of the UK, the United Nations, the U.S., the European Union or any of its member states or any other Relevant Authority including those administered by the United States Office of Foreign Assets Control or HM Treasury, save that this shall not apply if and to the extent that it is or would be unenforceable by reason of breach of any applicable Blocking Law; or (ii) any past or present member, director, officer or employee of the Wider FSD Group or any other person for whom any such person may be liable or responsible, has dealt with, made any investments in, made any funds or assets available to or received any funds or assets from: (A) any government, entity or individual in respect of which U.S., UK or European Union persons, or persons operating in those territories, are prohibited from engaging in activities or doing business, or from receiving or making available funds or economic resources, by U.S., UK or European Union or its members' laws or regulations, including the economic sanctions administered by the United States Office of Foreign Assets Control, or HM Treasury; or (B) any government, entity or individual targeted by any of the economic sanctions of the United Nations, the U.S., the UK, the European Union or any of its member states, which, in each case, would cause any member of the Wider FSD Group to be in breach of (or would cause Bidco or any member of the Wider Bidco Group to be in breach of or to be reasonably likely to become the subject of sanctions under, following completion of the Acquisition) any economic sanctions laws applicable to the Wider FSD Group save that this shall not apply if and to the extent that it is or would be unenforceable by reason of breach of any applicable Blocking Law; or

3.9.4 any past or present member of the Wider FSD Group or any past or present director, officer or employee of the Wider FSD Group, or any other person for whom any such person may be liable or responsible:

(a) has engaged in conduct which would violate any relevant anti-terrorism laws, rules, or regulations including, but not limited to the U.S. Anti-Terrorism Act;

(b) has engaged in conduct which would violate any relevant anti-boycott law, rule or regulation or any applicable export controls, including but not limited to the Export Administration Regulations administered and enforced by the U.S. Department of Commerce or the International Traffic in Arms Regulations administered and enforced by the U.S. Department of State;

(c) has engaged in conduct which would violate any relevant laws, rules, or regulations concerning human rights, including but not limited to any law, rule or regulation concerning false imprisonment, torture or other cruel and unusual punishment, or child labour; or

(d) is debarred or otherwise rendered ineligible to bid for or to perform contracts for or with any government, governmental instrumentality or international organisation or found to have violated any applicable law, rule or regulation concerning government contracting or public procurement.

PART B
Waiver and invocation of the Conditions

1. Subject to the requirements of the Panel in accordance with the Code, Bidco reserves the right in its sole discretion to waive, in whole or in part, all or any of the Conditions in Part A of this Appendix 1, except for Conditions 1 (Long Stop Date), 2.1.1, 2.2.1 and 2.3.1 (Scheme approval), which cannot be waived. If any of Conditions 1 (Long Stop Date), 2.1.1, 2.2.1 and 2.3.1 (Scheme approval) are not satisfied by the relevant deadline specified in the relevant Condition (or such later date, if any as: (a) Bidco and FSD may agree; or (b) (in a competitive situation) as may be specified by Bidco with the consent of the Panel, and in each case that, if so required, the Court may allow), Bidco shall make an announcement by 8.00 a.m. on the Business Day following such deadline confirming whether, subject to paragraph 3 below, it has invoked the relevant Condition, waived the relevant deadline or extended the relevant deadline.

2. Bidco shall be under no obligation to waive (if capable of waiver), to determine to be or remain satisfied or to treat as satisfied any of Conditions 3.1 to 3.9 (inclusive) in Part A of Appendix 1 above by a date or time earlier than the latest date and time for the fulfilment of the relevant Condition notwithstanding that the other Conditions to the Acquisition may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such Conditions may not be capable of fulfilment.

3. Subject to paragraph 4 below, under Rule 13.5(a) of the Code, Bidco may only invoke a Condition so as to cause the Acquisition not to proceed, to lapse or to be withdrawn with the consent of the Panel. The Panel will normally only give its consent if the circumstances which give rise to the right to invoke the Condition are of material significance to Bidco in the context of the Acquisition. This will be judged by reference to the facts of each case at the time that the relevant circumstances arise.

4. Each of Conditions 1 (Long Stop Date), 2.1, 2.2 and 2.3 (Scheme approval) in Part A of Appendix 1 above (and any acceptance condition if the Acquisition is implemented by means of a Takeover Offer) are not subject to Rule 13.5(a) of the Code.

5. Any Condition that is subject to Rule 13.5(a) of the Code may be waived by Bidco.

6. The Acquisition will not become Effective unless the Conditions have been fulfilled or (to the extent capable of waiver) waived or, where appropriate, have been determined by Bidco to be or remain satisfied by no later than 11.59 p.m. (London Time) on the Long Stop Date.

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

8. There is no agreement to which Bidco is a party which relates to the circumstances in which it may, or may not, invoke a condition to the Scheme.

PART C
Implementation by way of Takeover Offer

1. Subject to obtaining the consent of the Panel, Bidco reserves the right to elect to implement the Acquisition by way of a Takeover Offer as an alternative to the Scheme. In such event, such Takeover Offer will be implemented on the same terms and conditions, so far as applicable, as those which would apply to the Scheme subject to appropriate amendments to reflect the change in method of effecting the Acquisition, including (without limitation), the inclusion of an acceptance condition set at a level permitted by the Panel, being in any case more than 50 per cent. of the voting rights normally exercisable at a general meeting of FSD.

2. In accordance with normal United Kingdom practice and pursuant to Rule 14e-5(b) of the U.S. Exchange Act, Bidco, its nominees or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, shares or other securities of FSD outside of the U.S., other than pursuant to the Acquisition, until the date on which the Acquisition and/or Scheme becomes effective, 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 or arrangements to purchase shall be disclosed as required in the UK, shall be reported to a Regulatory Information Service and shall be available on the Aquis website at www.aquis.eu.

PART D
Certain further terms of the Acquisition

1. If Bidco is required by the Panel to make a mandatory offer for FSD Shares under Rule 9 of the Code, Bidco may make such alterations to the above Conditions and terms of the Acquisition as are necessary to comply with Rule 9 of the Code.

2. The Acquisition is not being made, directly or indirectly, in, into or from, or by use of the mails of, or by any means of instrumentality (including but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or any facility of a national, state or other securities exchange of, any jurisdiction where to do so would violate the laws of that jurisdiction. Consequently, the availability of the Acquisition to persons not resident in the UK may be affected by the laws of the relevant jurisdiction. Persons who are not resident in the UK should inform themselves about, and observe, any applicable requirements. FSD Shareholders who are in any doubt about such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay and observe any applicable requirements. Further details in relation to Overseas Shareholders will be contained in the Scheme Document.

3. FSD Shares will be acquired by Bidco fully paid and free from all liens, equitable interests, charges, encumbrances, rights of pre-emption and any other third-party rights or interests whatsoever and together with all rights existing at the date of this Announcement or thereafter attaching or accruing to them, including (without limitation) the right to receive and retain, in full, all dividends and other distributions (if any) declared, made or paid or any other return of capital (whether by way of reduction of share capital or share premium account, repurchase or redemption or otherwise) made on or after the Effective Date in respect of FSD Shares.

4. If any dividend, other distribution or return of capital is announced, declared, made, paid or becomes payable in respect of FSD Shares on or after the date of this Announcement and before the Effective Date, Bidco reserves the right (without prejudice to the right of Bidco to invoke, with the consent of the Panel, Condition 3.6 of Appendix 1 above) to reduce the consideration payable in respect of each FSD Share by the amount of all or part of any such dividend, other distribution or return of capital, in which case any reference in this Announcement to the consideration payable under the terms of the Acquisition will be deemed to be a reference to the consideration as so reduced. If Bidco exercises this right or makes such a reduction in respect of a dividend, other distribution or return of capital, FSD Shareholders will be entitled to receive and retain that dividend, other distribution or return of capital. Bidco also reserves the right to reduce the consideration payable under the Acquisition in such circumstances as are, and by such amount as is, permitted by the Panel. Any exercise by Bidco of its rights referred to in this paragraph 4 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 Acquisition.

5. This Announcement and any rights or liabilities arising hereunder, the Acquisition, the Scheme and the Forms of Proxy will be governed by the laws of England and Wales and be subject to the jurisdiction of the courts of England and Wales. The Acquisition will also be subject to the Conditions and further terms set out in this Announcement and to be set out in the Scheme Document and such further terms as may be required to comply with the Aquis Rules and the provisions of the Code. The Acquisition and the Scheme will comply with the applicable requirements of the FCA, the Aquis Rules and the Court, as well as with the Panel and the Code. This Announcement does not constitute, or form part of, an offer or invitation to purchase FSD Shares or any other securities.

appendix 2

SOURCES AND BASES OF INFORMATION

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

1. any reference to the entire issued and to be issued share capital of FSD is based on 5,692,500 FSD Shares in issue on the Last Practicable Date and references to the issued share capital on the Last Practicable Date are therefore to 5,692,500 FSD Shares;

2. a value of approximately £3.1 million for the entire issued and to be issued share capital of FSD is based on:

2.1 the Total FSD Shareholder Proceeds of 55 pence per FSD Share; and

2.2 FSD's fully diluted issued ordinary share capital, as set out in paragraph 1 above;

3. unless otherwise stated, all prices for FSD Shares have been derived from the website of Aquis and represent the Closing Prices on the relevant date(s) and rounded to the nearest decimal place if applicable;

4. unless otherwise stated, the financial information relating to FSD is extracted or derived from FSD's audited annual report and consolidated financial statements for the years ended 31 May 2023 and 31 May 2024 and the unaudited interim statements contained in the interim results of FSD for the six-month periods ended 30 November 2023 and 30 November 2024;

5. the trading volume data and Closing Price movements are derived from the website of Aquis;

6. certain figures included in this Announcement have been subject to rounding adjustments;

7. references to a percentage of issued FSD Shares are based on the number of FSD Shares in issue as set out in paragraph 1 above; and

8. the number of FSD Shares eligible to vote at the Court Meeting is 5,592,500.

appendix 3

DETAILS OF IRREVOCABLE UNDERTAKINGS

1. Irrevocable undertakings from FSD Independent Directors

The following FSD Independent Directors have given irrevocable undertakings in respect of their own beneficial holdings of FSD Shares (or those FSD Shares over which they have control) to give instructions to procure a vote in favour of the Scheme at the Court Meeting and vote in favour of the Resolution to be proposed at the General Meeting or, in the event that the Acquisition is implemented by way of a Takeover Offer, to give instructions to procure the acceptance of such Takeover Offer:

Name	Total Number of FSD Shares	Percentage of issued share capital (%)
Dorothy Faith Lower	873,332	15.3
Bruce David Smith	703,336	12.4

The obligations of the FSD Independent Directors under the irrevocable undertakings given by them shall lapse and cease to have effect on and from the earlier of the following occurrences:

1.1 Bidco publicly announces, with the consent of the Panel, that it does not intend to proceed with the Acquisition and no new, revised or replacement scheme or Takeover Offer, as applicable, is announced by Bidco in accordance with Rule 2.7 of the Code; or

1.2 the Acquisition lapses, is withdrawn or otherwise terminates in accordance with its terms (save where the Acquisition is withdrawn or lapses as a result of Bidco exercising its right to implement the Acquisition by way of a Takeover Offer in accordance with the Code rather than by way of the Scheme, or vice versa).

2. Irrevocable undertakings from FSD Directors

The following FSD Directors have given irrevocable undertakings in respect of their own beneficial holdings of FSD Shares (or those FSD Shares over which they have control) to give instructions to procure a vote in favour of the Resolution at the General Meeting or, in the event that the Acquisition is implemented by way of a Takeover Offer, to give instructions to procure the acceptance of such Takeover Offer:

Name	Total Number of FSD Shares	Percentage of issued share capital (%)
Nigel Billings	50,000	0.9
Ross Hunter	50,000	0.9

The abovementioned FSD Directors are also Bidco Directors and have undertaken to not exercise their voting rights to vote at the Court Meeting. They have further undertaken that they will not vote at the Court Meeting under their irrevocable undertakings in any event.

The obligations of the FSD Directors under the irrevocable undertakings given by them shall lapse and cease to have effect on and from the earlier of the following occurrences:

2.1 Bidco publicly announces, with the consent of the Panel, that it does not intend to proceed with the Acquisition and no new, revised or replacement scheme or Takeover Offer, as applicable, is announced by Bidco in accordance with Rule 2.7 of the Code; or

2.2 the Acquisition lapses, is withdrawn or otherwise terminates in accordance with its terms (save where the Acquisition is withdrawn or lapses as a result of Bidco exercising its right to implement the Acquisition by way of a Takeover Offer in accordance with the Code rather than by way of the Scheme, or vice versa).

3. Irrevocable undertakings from FSD Shareholders

The following FSD Shareholders have given irrevocable undertakings to vote (or to procure a vote) in favour of the Scheme at the Court Meeting and vote in favour of the Resolution to be proposed at the General Meeting in respect of their registered holdings of FSD Shares or, in the event that the Acquisition is implemented by way of a Takeover Offer, to accept (or procure the acceptance of) such Takeover Offer:

Name	Total Number of FSD Shares	Percentage of issued share capital (%)
Andrew Haines	436,666	7.7
Matthew Haines	436,666	7.7
Field System Design Employee Benefit Trust*	297,500	5.2
Max Engler**	174,900	3.1
Bernhard Meier**	98,300	1.7
Bintari Overseas Ltd.**	1,379,300	24.2
Cupspring Invest Corp.***	495,000	8.7

* Smith & Williamson Nominees Limited is the registered holder of these FSD Shares for and on behalf of the FSD Shareholder

** Aurora Nominees Limited is the registered holder of these FSD Shares for and on behalf of the FSD Shareholder

*** Lynchwood Nominees Limited is the registered holder of these FSD Shares for and on behalf of the FSD Shareholder

The obligations of each of the abovenamed FSD Shareholders under the irrevocable undertakings given by them shall lapse and cease to have effect on and from the earlier of the following occurrences:

3.1 Bidco publicly announces (with the consent of the Panel if required) that it does not intend to proceed with the Acquisition and no new, revised or replacement Scheme or Offer, as applicable, is announced by Bidco in accordance with Rule 2.7 of the Code within three days of such announcement;

3.2 the Acquisition lapses, is withdrawn or otherwise terminates in accordance with its terms (save where the Acquisition is withdrawn or lapses as a result of Bidco exercising its right to implement the Acquisition by way of an Offer in accordance with the Code rather than by way of the Scheme, or vice versa); or

3.3 a third party other than Bidco announces a firm intention to make an offer for FSD under Rule 2.7 of the Code under which the value of the consideration payable exceeds 20 per cent. in the value of the consideration offered under the terms of the Scheme, provided that Bidco does not, within 14 days of the announcement of such higher offer, increase the consideration offered under the Acquisition to an amount per FSD Share which is equal to or exceeds the value of the third party offer.

appendix 4

DEFINITIONS

The following definitions apply throughout this Announcement unless the context otherwise requires:

£, GBP or pence

the lawful currency of the United Kingdom from time to time

2024 Interim Financial Statements

the unaudited interim financial statements of FSD for the six months ended 30 November 2024, published on 27 February 2025

Acquisition

the proposed acquisition by Bidco of the entire issued and to be issued share capital of FSD by means of the Scheme, or should Bidco so elect (with the consent of the Panel), by means of a Takeover Offer and, where the context admits, any subsequent revision, variation, extension or renewal thereof;

AQSE Growth Market

the multilateral trading facility operated by Aquis that is registered as an SME Growth Market in accordance with article 33 of MiFID

Aquis

Aquis Stock Exchange Limited, a recognised investment exchange under section 290 of FSMA

Aquis Rules

the AQSE Growth Market Access Rulebook, which sets out the admission requirements and continuing obligations of companies seeking admission to, and whose shares are admitted to trading on, the Access Segment of the AQSE Growth Market

Announcement

this announcement

Authorisations

authorisations, agreements, orders, notices, waivers recognitions, grants, consents, determinations, clearances, confirmations, concessions, certificates, exemptions, licences, permissions, permits or approvals

BDO

BDO LLP, a limited liability partnership registered in England and Wales with registered number OC305127 and registered address 55 Baker Street, London W1U 7EU

Bidco

FSD Group Limited, a company incorporated in England and Wales with registered number 12400846

Bidco Directors or Bidco Board

the directors of Bidco as at the date of this Announcement or, where the context so requires, the directors of Bidco from time to time

Bidco Loan Note Instrument

the loan note instrument constituting 5 per cent. loan notes due 2028 to be entered into by Bidco on or around the date of the Scheme Document

Bidco Loan Note Certificates

the certificates representing the Bidco Loan Notes

Bidco Loan Notes

the 5 per cent. loan notes due 2028 to be issued by Bidco pursuant to the Bidco Loan Note Instrument on or around the Effective Date

Bidco Shares

ordinary shares of 10 pence in the capital of Bidco

Blocking Law

(i) any provision of Council Regulation (EC) No 2271/1996 of 22 November 1996 (or any law or regulation implementing such Regulation in any member state of the European Union); or (ii) any provision of Council Regulation (EC) No 2271/1996 of 22 November 1996, as it forms part of domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018

Business Day

a day, not being a public holiday, Saturday or Sunday, on which banks in London are open for normal business

Cash Consideration

40 pence per FSD Share

Closing Price

the closing middle market quotation for an FSD Share at the close of business on the day to which such price relates, derived from the website of Aquis

Code or Takeover Code

the City Code on Takeovers and Mergers issued by the Panel, as amended from time to time

Companies Act

the Companies Act 2006, as amended from time to time

Condition(s)

the conditions of the Acquisition, as set out in Part A of Appendix 1 to this Announcement and to be set out in the Scheme Document

Court

the High Court of Justice of England and Wales

Court Meeting

the meeting of FSD Shareholders (or of any class or classes thereof) to be convened by an order of the Court pursuant to section 896 of the Companies Act, notice of which will be set out in the Scheme Document, for the purposes of considering, and if thought fit, approving the Scheme (with or without amendment) including any adjournment, postponement or reconvening thereof

Court Order

the order of the Court sanctioning the Scheme under section 899 of the Companies Act

Court Sanction

has the meaning given in Condition 2(c)(i) (Scheme approval) in Part A of Appendix 1 to this Announcement

CREST

the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755) (including as it forms part of domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018), as amended from time to time

Dealing Arrangement

an arrangement of the kind referred to in Note 11(a) in the definition of acting in concert in the Code

Dealing Disclosure

an announcement pursuant to Rule 8 of the Code containing details of dealings in relevant securities of a party to an offer

Disclosed

the information which has been disclosed by or on behalf of FSD:

(a) in the annual report and financial statements of FSD for the year ending 31 May 2024;

(b) in the unaudited interim report of FSD for the six months ending 30 November 2024;

(d) as otherwise fairly disclosed to Bidco (or its officers, employees, agents or advisers in each case in their capacity as such) before the date of this Scheme Document

DTRs

the Disclosure Guidance and Transparency Rules made by the FCA under FSMA and forming part of the FCA's handbook, as amended from time to time

Effective

in the context of the Acquisition:

(a) if the Acquisition is implemented by way of the Scheme, the Scheme having become effective pursuant to its terms; or

(b) if the Acquisition is implemented by way of a Takeover Offer, such Takeover Offer having been declared or having become unconditional in accordance with the requirements of the Code

Effective Date

the date on which the Acquisition becomes Effective

Enlarged Group

the enlarged group following completion of the Acquisition comprising Bidco and the FSD Group

Eurozone

the Member States of the European Union that have adopted the euro as their common currency and sole legal tender

Excluded Shares

any FSD Shares registered in the name of, or beneficially owned by, Bidco or any other member of the Wider Bidco Group or their respective nominees

FCA

the UK Financial Conduct Authority or its successor from time to time

Forms of Proxy

the forms of proxy in connection with each of the Court Meeting and the General Meeting

FSD or Company

Field Systems Designs Holdings plc, a company incorporated in England and Wales with registered number 03626335

FSD Articles

the articles of association of FSD from time to time

FSD Directors or FSD Board

the directors of FSD as at the date of this Announcement or, where the context so requires, the directors of FSD from time to time

FSD Group

FSD and its subsidiary undertakings from time to time

FSD Independent Directors

Derek Bird, Bruce Smith, Faith Lower and Daniel Engler

FSD Meetings

the Court Meeting and the General Meeting

FSD Shareholders

holders of FSD Shares

FSD Shares

the ordinary shares of 10 pence each in the capital of FSD

FSMA

the Financial Services and Markets Act 2000, as amended from time to time

General Meeting

the general meeting of FSD Shareholders to be convened in connection with the Acquisition for the purpose of considering and, if thought fit, approving, the Resolution (with or without amendment), notice of which shall be contained in the Scheme Document, including any adjournment, postponement or reconvening thereof

Last Accounts Date

31 May 2024

Last Practicable Date

2 May 2025, being the last practicable date prior to the date of this Announcement

Loan Agreement

the loan agreement between Bidco and FSD to be entered into immediately after the Scheme becomes Effective or, if later, the day that FSD is re-registered as a private limited company

Loan Note Consideration

15 pence in principal amount of Bidco Loan Notes

Long Stop Date

30 September 2025 or such later date, if any as (i) Bidco and FSD may agree; or (ii) (in a competitive situation) as may be specified by Bidco with the consent of the Panel, and in each case that, if so required, the Court may allow

NSIA

the National Security and Investment Act 2021 as amended from time to time

Offer Period

the offer period (as defined by the Code) relating to FSD, which commenced on the date of this Announcement

Opening Position Disclosure

an announcement pursuant to Rule 8 of the Code containing details on interests or short positions in, or rights to subscribe for, any relevant securities of a party to the Acquisition

Overseas Shareholders

FSD Shareholders (or nominees of, or custodians or trustees for, FSD Shareholders) who are resident in, ordinarily resident in, or nationals or citizens of, jurisdictions outside the United Kingdom

Panel

the Panel on Takeovers and Mergers

Regulatory Information Service

any information service authorised from time to time by the FCA for the purposes of disseminating regulatory announcements

Relevant Authority

any central bank, ministry, governmental, quasi-governmental, supranational (including the European Union), statutory, regulatory or investigative body, authority or tribunal (including any national or supranational antitrust, competition or merger control authority (including the European Commission and the UK Competition and Markets Authority), any sectoral ministry or regulator and any foreign investment review body), national, state, municipal or local government (including any subdivision, court, tribunal, administrative agency or commission or other authority thereof), any entity owned or controlled by them, any private body exercising any regulatory, taxing, importing or other authority, any trade agency, association, institution or professional or environmental body in any jurisdiction

relevant securities

shall be construed in accordance with the Code

Resolution

the special resolution proposed at the General Meeting in connection with the implementation of the Scheme

Restricted Jurisdiction(s)

any jurisdiction where local laws or regulations may result in a significant risk of civil, regulatory or criminal exposure if information concerning the Acquisition is sent or made available to FSD Shareholders in that jurisdiction or would result in a requirement to comply with any governmental or other consent or any registration, filing or other formality which Bidco regards as unduly onerous

Sanction Hearing

the hearing of the Court at which FSD will seek an order sanctioning the Scheme pursuant to Part 26 of the Companies Act

Scheme

the proposed scheme of arrangement under Part 26 of the Companies Act between FSD and the Scheme Shareholders in connection with the Acquisition, with or subject to any modification, addition or condition approved or imposed by the Court and agreed by FSD and Bidco

Scheme Document

the document to be sent to FSD Shareholders and persons with information rights containing, among other things, the Scheme, the full terms and conditions of the Scheme and containing the notices convening the Court Meeting and General Meeting

Scheme Record Time

the time and date to be specified in the Scheme Document, expected to be 6 p.m. on 25 June 2025, being the Business Day immediately preceding the Sanction Hearing (or such other date as Bidco and FSD may agree)

Scheme Shareholders

holders of Scheme Shares at any relevant date or time

Scheme Shares

FSD Shares:

(a) in issue as at the date of the Scheme Document;

(b) (if any) issued after the date of the Scheme Document and before the Scheme Voting Record Time; and/or

(c) (if any) issued on or after the Scheme Voting Record Time and before the Scheme Record Time, either on terms that the original or any subsequent holders thereof shall be bound by the Scheme or in respect of which the holders thereof shall have agreed in writing to be bound by the Scheme, in each case, and where the context requires, which remain in issue at the Scheme Record Time,

but excluding any Excluded Shares

Scheme Voting Record Time

the time and date to be specified in the Scheme Document by reference to which entitlement to vote on the Scheme will be determined

SEC

the United States Securities and Exchange Commission

Significant Interest

in relation to an undertaking, a direct or indirect interest of 20 per cent. or more of: (i) the total voting rights conferred by the equity share capital (as defined in section 548 of the Companies Act) of such undertaking; or (ii) the relevant partnership interest

Takeover Offer

if (with the consent of the Panel), Bidco elects to effect the Acquisition by way of a takeover offer (as defined in Chapter 3 of Part 28 of the Companies Act), the offer to be made by or on behalf of Bidco to acquire the entire issued and to be issued ordinary share capital of FSD on the terms and subject to the conditions to be set out in the related offer document and, where the context permits, any subsequent revision, variation, extension or renewal of such takeover offer

Third Party

any Relevant Authority or any other body or person whatsoever in any jurisdiction

Total FSD Shareholder Proceeds

The Cash Consideration and the Loan Note Consideration

UK or United Kingdom

the United Kingdom of Great Britain and Northern Ireland

UK Market Abuse Regulation

Regulation (EU) No. 597/2014 of the European Parliament and the Council of 16 April 2014 on market abuse as it forms part of retained EU law as defined in the European Union (Withdrawal) Act 2018, as amended from time to time

U.S. or United States

the United States of America, its territories and possessions, any state of the United States and the District of Columbia

U.S. Exchange Act

the U.S. Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations promulgated thereunder

Wider Bidco Group

Bidco and its parent undertakings and such parent undertakings' subsidiary undertakings and any other body corporate, partnership, joint venture or person in which Bidco and all such undertakings (aggregating their interests) having a Significant Interest

Wider FSD Group

the members of the FSD Group and their respective associated undertakings and any other body corporate, partnership, joint venture or person in which FSD and all such undertakings (aggregating their interests) have a Significant Interest

In this Announcement: (i) "subsidiary", "subsidiary undertaking", "undertaking" and "associated undertaking" have the respective meanings given to them in the Companies Act; (ii) all times are London times, unless otherwise stated; and (iii) references to the singular include the plural and vice versa.

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

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

OFFSSLFEMEISESI]]>

FSD announcements All announcements