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

FOR IMMEDIATE RELEASE

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY MEP TO CONSTITUTE INSIDE INFORMATION AS STIPULATED BY THE MARKET ABUSE REGULATION (EU) NO.596/2014, AS IT FORMS PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 AS AMENDED BY THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THE INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

20 January 2023

RECOMMENDED CASH OFFER

for

SERAPHINE GROUP PLC

by

PURPLE BIDCO LIMITED

which is a wholly-owned indirect subsidiary of funds managed by
Mayfair Equity Partners LLP (collectively, "Mayfair")

1.         Introduction

The board of directors of Purple Bidco Limited ("Bidco") and the Seraphine Independent Directors are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Bidco, a wholly-owned indirect subsidiary of funds managed by Mayfair Equity Partners LLP ("MEP"), for the entire issued, and to be issued, share capital of Seraphine Group PLC (the "Company") (excluding 21,742,685 Seraphine Shares, representing approximately 42.71 per cent. of the voting rights in Seraphine, currently held by Mayfair).

2.         The Offer

Under the terms of the Offer, which will be subject to the Conditions and further terms set out in Appendix 1 to this Announcement and to the full terms and Conditions to be set out in the Offer Document and, in respect of Seraphine Shares held in certificated form, the Form of Acceptance, Seraphine Shareholders (other than Mayfair) shall be entitled to receive:

30 pence in cash for each Seraphine Share

The Offer values the entire issued and to be issued share capital of Seraphine (including 21,742,685 Seraphine Shares, representing approximately 42.71 per cent. of the voting rights in Seraphine, currently held by Mayfair) at approximately £15.3 million, and represents a premium of approximately:

·      206 per cent. to the Closing Price per Seraphine Share of 9.8 pence on 19 January 2023 (being the Last Practicable Date);

·      178 per cent. to the three-month volume weighted average Closing Price of 10.8 pence per Seraphine Share to 19 January 2023 (being the Last Practicable Date); and

·      80 per cent. to the six-month volume weighted average Closing Price of 16.7 pence per Seraphine Share to 19 January 2023 (being the Last Practicable Date).

Seraphine Shares will be acquired pursuant to the Offer fully paid and free from all liens, charges, equities, encumbrances, rights of pre-emption and any other third party rights or interest of any nature whatsoever and together with all rights attaching thereto, including without limitation voting rights and the rights to receive and retain in full all dividends and distributions (if any) announced, declared, made or paid with a record date on or after the date of this Announcement.

If, on or after the date of this Announcement, any dividend and/or other distribution and/or other return of capital is declared, made or paid or becomes payable in respect of Seraphine Shares, Bidco reserves the right to reduce the consideration payable under the terms of the Offer by an amount up to the amount of such dividend and/or distribution and/or return of capital, in which case any reference in this Announcement to the consideration payable under the Offer will be deemed to be a reference to the consideration as so reduced. Any exercise by Bidco of its rights referred to in this paragraph shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the terms of the Offer. In such circumstances, Seraphine Shareholders would be entitled to retain any such dividend, distribution or other return of capital declared, made or paid or which becomes payable.

It is intended that the Offer will be implemented by way of a takeover offer within the meaning of Part 28 of the Companies Act. The Offer will be subject to valid acceptances of the Offer being received (and not validly withdrawn in accordance with the rules and requirements of the Takeover Code and the terms of the Offer) by no later than 1.00 p.m. (London time) on the Unconditional Date (or such other time(s) and/or date(s) as Bidco may, in accordance with the Takeover Code or with the consent of the Panel, decide) in respect of not less than 90 per cent. (or, subject to the Code, such lower percentage as Bidco may decide) in value of the Seraphine Shares to which the Offer relates and of the voting rights attached to those shares, provided that this condition will not be satisfied unless Bidco, Mayfair or any wholly-owned subsidiary of Mayfair holds, shall have acquired or have agreed to acquire (whether pursuant to the Offer or otherwise), Seraphine Shares carrying in aggregate more than 50 per cent. of the voting rights then normally exercisable at a general meeting of Seraphine including, to the extent (if any) required by the Panel, any voting rights attaching to any Seraphine Shares which are unconditionally allotted or issued before the Acceptance Condition is satisfied pursuant to the exercise of any outstanding conversion or subscription rights or otherwise.

The Offer will extend to all Seraphine Shares which are in issue as at the date of the Announcement and any Seraphine Shares which may be unconditionally allotted and/or issued and fully paid (or credited as fully paid) before the Offer closes (other than the Seraphine Shares held by Mayfair). This will include any Seraphine Shares arising pursuant to the exercise of options under the Seraphine Share Plan.

Sharon Flood, Chair of Seraphine said:

"Seraphine has faced an extraordinary convergence of challenges since listing in 2021 including the global supply chain crisis, the cost of living crisis and substantial inflation in online marketing costs.

"Whilst the whole retail sector has been affected by these issues, Seraphine, a relatively smaller company new to the London Stock Exchange with a large reliance on e-commerce, has, we believe, been disproportionately challenged.

"Despite the huge efforts of our people and management, who have managed to improve gross product margin, achieve higher basket sizes and expand into several new markets, the business continues to operate in a very uncertain and challenging market. Whilst we are cautiously confident in our ability to restore profitable growth in the future, additional capital now would enable us to make investments to accelerate our growth strategy. Seeking this capital on-market would likely be highly dilutive, and the restoration of value would take time.

"The Seraphine Board, therefore, believes that this transaction would remove the substantial costs associated with being listed and afford management the time and space to give their full attention to a return to profitable growth. The Seraphine Board also welcomes the further capital which has been committed by Mayfair, to accelerate growth and reinforce the Company's balance sheet, as well as Mayfair's stated support of the management team and employees.

"The Seraphine Independent Directors believe the offer from Mayfair, which follows a period of intensive negotiation and which represents a premium of approximately 200 per cent. to the current share price is a fair and reasonable offer that we recommend to our shareholders."

Bertie Aykroyd, partner of MEP said:

"As a major shareholder in the Company, Mayfair remains supportive of management and their strategy. However, Mayfair believes that the Company's share price is negatively impacting Seraphine's ability to deliver on its strategy and attract and retain talent. We believe that it would be beneficial for Seraphine, its employees, and its other stakeholders to continue its growth and development as a private company. This would allow Seraphine to operate without the material level of costs of maintaining a public listing, supporting the Company during this period of macro-instability. As part of this transaction, we are also providing additional capital that will strengthen Seraphine's balance sheet and support our intention to safeguard the business.

"Anticipating that current pressures on the Company and market are to persist for the near-term, our objective is also to provide liquidity to certain shareholders to realise their investment for cash at a significant premium to the current market value."

Enquiries

Goodwin Procter (UK) LLP is providing legal advice to Bidco and MEP. Pinsent Masons LLP is providing legal advice to Seraphine.

3.         Background to and reasons for the Offer

Mayfair made its initial investment in Seraphine in December 2020, with the goal of supporting the Company's expansion into new and existing markets, and to facilitate further investment in product development and new digital channels. As part of the Company's IPO in July 2021, Mayfair retained a substantial shareholding in the Company, attracted by the management team's track record of delivering profitable growth in new markets. Mayfair remains the Company's largest shareholder and currently holds Seraphine Shares representing approximately 42.71 per cent. of the voting rights exercisable at a general meeting of Seraphine. Mayfair remains supportive of Seraphine, its management and strategy and believes in the Company's future prospects.

As set out in the Company's prospectus dated 13 July 2021 published in connection with its IPO, a reason for the Company's listing was to further improve the ability of the Seraphine Group to attract and retain high quality talent, provide the Company with access to a wider range of capital-raising options, and create a liquid market in the Seraphine Shares. Mayfair believes that the Company's current share price (which has fallen from an offering price of 295 pence per Seraphine Share to 9.8 pence per Seraphine Share on 19 January 2023, being the Last Practicable Date) is negatively impacting the Company's ability to deliver on these goals, as well as its ability to raise new capital, thus removing the potential benefits of a public listing for the Company.

Accordingly, Mayfair considers that a public listing is no longer in the best interests of the Company or its wider stakeholders. Mayfair also believes that it would be beneficial for the Company to continue to execute its growth strategy without the distractions and the material costs of maintaining a public listing, and with a single supportive institutional shareholder capable of supporting the Company's strategic goals and financial needs. Mayfair is, therefore, offering those Seraphine Shareholders who no longer wish to remain shareholders in the Company and are unable to exit due to liquidity constraints, an opportunity to realise their investment for cash at a significant premium to the current market price of a Seraphine Share.

In addition, Mayfair considers that it would be beneficial for the Company to secure significant new capital investment to support and accelerate the Company's growth strategy. Mayfair is willing and intends to provide this financial support to Seraphine but, for the reasons set out above, believes this would be most appropriately delivered to Seraphine as a private company. Accordingly, following completion of the Offer, Mayfair intends to initially invest up to £5 million in the Company as primary capital.

Mayfair remains fully supportive of the Company's management and strategy, and is eager to work with the Company in a private context. Mayfair, therefore, intends to procure that the Company makes applications to cancel the listing of all Seraphine Shares on the Official List and to cancel trading in all Seraphine Shares on the Main Market as soon as possible in accordance with applicable laws.

4.         Irrevocable undertakings and letters of intent

Bidco has received irrevocable undertakings to accept the Offer from the Seraphine Independent Directors that hold Seraphine Shares (and persons connected with them) in respect of 4,035,102 Seraphine Shares, representing in aggregate approximately 7.9 per cent. of the existing issued ordinary share capital of Seraphine (excluding treasury shares) as at the Last Practicable Date. The irrevocable undertakings include an undertaking to vote in favour of resolutions to assist with the implementation of the Offer. These irrevocable undertakings cease to be binding, inter alia, on the earlier of the Long-Stop Date and the time and date on which the Offer is withdrawn, lapses or otherwise terminates in accordance with its terms, or Bidco announces, with the consent of the Panel, that it does not intend to proceed with the Offer.

In addition, Bidco has obtained non-binding letters of intent to accept or procure the acceptance of the Offer in respect of 9,035,882 Seraphine Shares, including from:

·      Harwood Capital LLP, in respect of 3,975,000 Seraphine Shares;

·      Canaccord Genuity Asset Management, in respect of 2,487,000 Seraphine Shares; and

·      Lombard Odier Asset Management (Europe) Limited in respect of 2,573,882 Seraphine Shares,

representing in aggregate approximately 17.8 per cent. of the existing issued share capital of Seraphine (excluding treasure shares) as at the Last Practicable Date.

Bidco has, therefore, received irrevocable undertakings or letters of intent in respect of 13,070,984 Seraphine Shares (representing, in aggregate, approximately 25.7 per cent. of the existing issued ordinary share capital of Seraphine (excluding treasury shares) as at the Last Practicable Date).

Further details of these irrevocable undertakings (including the circumstances in which they cease to be binding) and non-binding letters of intent are set out in Appendix 3 to this Announcement.

5.         Information on MEP and Bidco

Founded in 2014 and based in London, MEP provides buyout and growth capital to dynamic businesses in the Technology and Consumer sectors. MEP's primary focus is on building strong partnerships with management teams to create value through organic growth and value accretive M&A. MEP is authorised and regulated by the FCA, and manages in excess of £1.0 billion in commitments.

MEP backed the management buyout of Seraphine in 2020, supporting the continuation of the Company's existing growth strategy at the time of the buyout. MEP worked closely with Seraphine management in a number of ways including supporting the rebranding of Seraphine's business, developing and implementing the Company's ESG strategy, expanding the senior leadership team with several new hires, and supporting on various warehousing and logistics projects.

Mayfair retained a substantial shareholding in the Company following the Company's IPO in July 2021 and remains the Company's current largest shareholder. Seraphine continues to deliver top line growth, as evidenced by the Company growing revenue by a third in its first year as a public company.

Bidco is a wholly-owned indirect subsidiary of funds managed by MEP, which was incorporated for the purposes of implementing the Offer. Bidco is a limited company registered in England and Wales and incorporated on 11 January 2023. Bidco has not traded since its date of incorporation, nor has it entered into any obligations other than in connection with the Offer. Further details in relation to Bidco will be contained in the Offer Document.

6.         Information on Seraphine

Seraphine is an international digitally-led maternity and nursing wear brand with a diverse range of innovative maternity and nursing products serving a global market.

Seraphine was founded in 2002 with the vision of creating desirable clothes which women would want to wear even if they were not pregnant, and this ethos remains true to this day. The Seraphine Group has over 19 years' experience designing and developing maternity and nursing wear for women from first trimester to post-partum and nursing products.

The Seraphine Group has achieved global brand recognition through its rapidly growing digital platform, which in the financial year ended 3 April 2022, contributed to approximately 84 per cent. of revenue. The Seraphine Group currently exports products to customers in over 120 countries globally, with the Seraphine Group's largest markets being Western Europe, North America and the UK.

The Seraphine Shares are listed on the premium segment of the Official List and are admitted to trading on the Main Market.

7.         Intentions of Bidco

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

Bidco does not envisage a redeployment of Seraphine's fixed asset base. Following completion of the Offer, Bidco may identify areas of the Seraphine Group where investment can be increased, or specific business units that can be prioritised. However, based on diligence performed to date, Bidco does not expect the Offer to have a material impact on the operations or places of business of Seraphine.

Following completion of the Offer, Bidco intends to maintain Seraphine's London headquarter.

Seraphine does not currently have a research and development function. Bidco has no plans to change this.

Intentions for employees and management

Mayfair continues to be fully supportive of the Company's senior management team and also recognises the skills and expertise of its employees. Mayfair views the Company's senior management team and employees as a key attribute in driving future growth in the business. Bidco does not intend to implement any material headcount reduction as a result of the Offer and confirms that, following completion of the Offer, the existing contractual and statutory rights and terms and conditions of employment, including pension obligations, of the management and employees of the Seraphine Group will be safeguarded in accordance with applicable law. Bidco has no intention to make any material change to the conditions of employment of Seraphine employees or, other than in relation to the non-executive Seraphine Directors as described below, in the balance of the skills and functions of the employees and management of Seraphine.

Following completion of the Offer, Mayfair intends to procure that the Company makes applications to cancel the listing of all Seraphine Shares on the Official List and to cancel trading in all Seraphine Shares on the Main Market. Following such cancellation, it is also intended that Seraphine will be re-registered as a private limited company. As a result of the cancellations of the listing and the trading and the re-registration, certain costs associated with being a publicly listed company may no longer be required. Bidco does not currently expect any headcount reductions but in the event any such headcount reductions are required, any individuals affected will be treated in a manner consistent with the high standards, culture and practices of Seraphine.

Intentions for Seraphine Board

As is customary in such circumstances, Bidco expects that the non-executive Seraphine Directors (except for Bertie Aykroyd) will resign from the Seraphine Board upon completion of the Offer and the anticipated cancellation of the listing of Seraphine Shares on the Official List and cancellation of trading in Seraphine Shares on the Main Market.

Pension schemes

Bidco intends to safeguard the existing employment rights of the management and employees of Seraphine, including in relation to pensions, in accordance with applicable law and does not envisage any material change in the conditions of employment of the management and employees of Seraphine (including as regards any employer contributions to Seraphine's existing defined contribution pension scheme).

Incentivisation arrangements

Bidco has not entered into, and has not had discussions on proposals to enter into, incentivisation arrangements with any member of Seraphine's management or with any Seraphine employee, nor will it enter into any such discussions prior to completion of the Offer. Following completion of the Offer, Bidco intends to put in place incentivisation arrangements for managers and employees of Seraphine.

Share schemes

Bidco will make appropriate proposals to the participants of the Seraphine Share Plan in accordance with Rule 15 of the Code. Further details of these arrangements will be communicated to participants in the Seraphine Share Plan in due course. Details of the impact of the Offer on the Seraphine Share Plan and the proposals will be set out in the Offer Document.

Trading facilities

Seraphine Shares are currently listed on the premium listing segment of the Official List maintained by the FCA and admitted to trading on the Main Market of the London Stock Exchange.

As set out in paragraph 13 below, Bidco intends to procure that the Company makes applications  for the cancellation of the listing of Seraphine Shares on the Official List and the cancellation of trading of the Seraphine Shares on the Main Market. Following cancellation, it is intended that the Company will be re-registered as a private company limited by shares.

Post-offer undertakings

No statements in this paragraph 7 are "post-offer undertakings" for the purposes of Rule 19.5 of the Code.

8.         Recommendation

Bertie Aykroyd is a Mayfair nominee to the Seraphine Board pursuant to the Relationship Agreement.  As such, Bertie Aykroyd is not independent for the purposes of considering the Offer.

The Seraphine Independent Directors, who have been so advised by finnCap as to the financial terms of the Offer, consider the terms of the Offer to be fair and reasonable. In providing advice to the Seraphine Independent Directors, finnCap has taken into account the commercial assessments of the Seraphine Independent Directors.

The Seraphine Independent Directors also note the intention of Bidco to delist the Company following completion of the Offer. Any remaining Seraphine Shareholders would become minority shareholders in a majority controlled private limited company and may, therefore, be unable to sell their Seraphine Shares. There can be no certainty that Seraphine would pay any further dividends or other distributions or that such minority Seraphine Shareholders would again be offered an opportunity to sell their Seraphine Shares on terms which are equivalent to or no less advantageous than those under the Offer.

Accordingly, the Seraphine Independent Directors, who have been so advised by finnCap, unanimously intend to recommend that the Seraphine Shareholders accept the Offer (or in the event that the Offer is implemented by way of a Scheme, to vote or procure voting in favour of such Scheme at the court meeting and the resolutions relating to the Offer at any Seraphine general meeting). finnCap is providing independent financial advice to the Seraphine Independent Directors for the purposes of Rule 3 of the Takeover Code.

9.         Background to and reasons for the Recommendation

Overview

Seraphine completed its IPO in the summer of 2021 with the ambition of supporting the Seraphine Group's growth plans by increasing the Seraphine Group's public profile and brand awareness, further improving the ability of the Seraphine Group to attract and retain high quality talent, providing the Company with access to a wider range of capital raising options and creating a liquid market in the Seraphine Shares for existing and future shareholders.

Almost immediately following its IPO, however, Seraphine's operating environment deteriorated markedly, with a number of challenges emerging which adversely affected the retail sector. The global supply chain crisis of summer 2021 caused significant stock management issues for the Group.  Furthermore, Seraphine has suffered from unforeseen marketing cost inflation, with companies such as Meta significantly raising the costs of advertising on their platforms, which has had a material impact on Seraphine as a digitally led business.

The adverse economic environment caused by the Russian invasion of Ukraine is severely impacting consumer confidence in 2022, especially in Seraphine's European and UK markets. The ensuing cost-of-living crisis and energy price increases is having a damaging effect on consumer activity across all of Seraphine's largest markets. 

Whilst many UK-listed retail companies have reported being affected by these challenges, the Seraphine Independent Directors believe that Seraphine, with its relatively smaller balance sheet, shorter history on the stock market, and proportionately high reliance on e-commerce, has suffered a disproportionate deterioration in investor sentiment since its IPO. The Seraphine Independent Directors are grateful to the Seraphine employees for their continuing efforts and dedication to strengthening and building the business in the face of the extraordinary and widely publicised challenging market conditions for consumer-facing companies since its IPO.

In addition, as previously announced, Seraphine has faced a number of margin and cost challenges in the period, and its marketing spend has at times been less effective than planned, resulting in an increase in customer acquisition costs. Management has taken a number of steps to mitigate the impact of these headwinds, and has made significant investment in its team to best position the Company to operate in this challenging operating environment. Furthermore, management has made a number of improvements to Seraphine's operating processes having identified some issues with its internal management systems in early 2022, with such improvements having had a positive impact on the business.

The Seraphine Independent Directors consider that, notwithstanding the headwinds which are challenging the retail sector, the Company has continued to demonstrate the fundamentals of its business model as a provider of affordable luxury, innovative and sustainable maternity and nursing wear.  At the same time, however, the Seraphine Independent Directors have concluded that additional capital would be highly beneficial to the Company at this time and be in the best interests of the Company's stakeholders, insofar that it would provide additional liquidity for the business to enable investment thereby allowing the Company to accelerate its growth strategy, while also strengthening its balance sheet. The Seraphine Independent Directors believe that the Company would be unable to execute this accelerated growth strategy without new capital.

Seraphine received an initial indicative proposal from Mayfair in December 2022, including a commitment to provide additional capital investment in the Company to accelerate Seraphine's growth strategy. Following further discussions and negotiations regarding the terms of such proposal with Mayfair, the Seraphine Independent Directors indicated to Mayfair that its materially revised proposal was at a level at which the Seraphine Independent Directors were minded to recommend the Offer.

The Seraphine Independent Directors have assessed the merits of the Offer against: (i) the financial performance, prospects and position of Seraphine; (ii) the fact that Seraphine would benefit from additional capital investment to accelerate its growth strategy and that Mayfair has expressed its willingness to provide this support; and (iii) the backdrop of the costs, difficulties and risks of remaining an independent listed business in the current economic environment.

Terms of the Offer

The Seraphine Independent Directors believe that the Offer presents an opportunity for Seraphine Shareholders to realise the value of their holdings in cash with certainty at an immediate and very significant premium to the price at which Seraphine Shares have traded recently and also note that the Offer price per share represents a substantially material increase on Mayfair's initial proposal to the Seraphine Independent Directors.

The Seraphine Independent Directors also recognise that in the context of the prevailing highly challenging environment for listed consumer-facing companies in general, and in particular for those retail businesses with a high proportion of e-commerce sales, the Offer price per share is considerably higher than the share price that is likely to be organically achievable in the short to medium term (even before any new capital investment, as discussed below).

The Seraphine Independent Directors are mindful that there is a very low level of trading liquidity in Seraphine Shares and that the Offer provides a liquidity opportunity that Seraphine Shareholders may not otherwise receive, especially in the circumstances where Mayfair has expressed an intention to procure a cancellation of the Company's listing following completion of the Offer.

The Seraphine Independent Directors have also considered that Mayfair is already the Company's largest shareholder and owns or has procured irrevocable undertakings to accept or procure acceptance of the Offer in respect of a majority of the Seraphine Shares in issue. It is, therefore, highly likely that the Offer will become unconditional.

Strategy and future growth

As detailed above, Seraphine has been exposed to particularly challenging and unpredictable market conditions, digital marketing cost inflation and declining consumer confidence.

The Company has undertaken a number of actions to address these challenges, and has recently reported encouraging evidence of commercial and operational progress underpinning the Seraphine Independent Directors' confidence in the Company's prospects and resilience for the current financial year as a standalone entity.  Nevertheless, the Seraphine Independent Directors are very aware that trading conditions across its markets have not yet stabilised and the challenging trading conditions seen through 2022 are expected to prevail into 2023. There is also still a large degree of uncertainty as to what future external pressures might emerge, and the extent of the Company's financial resilience in potential downside scenarios. For Seraphine Shareholders who accept the Offer, the Offer eliminates the future risk to Seraphine Shareholders of these broader market factors.

The Seraphine Independent Directors consider that additional capital would be highly beneficial to the Company and be in the best interests of the Company's stakeholders, insofar that it would provide additional liquidity for the business to enable investment thereby allowing the Company to accelerate its growth strategy with the secondary benefit of strengthening its balance sheet.  The Seraphine Independent Directors believe that the Company would be unable to execute this accelerated growth strategy without new capital and that new financing is unlikely to be available on-market on terms that would not lead to considerable equity and/or earnings dilution to Seraphine Shareholders.  Furthermore, Seraphine is restricted by UK law and regulation in raising new equity capital which would represent 20 per cent. or more of the issued share capital of the Company without the publication of a prospectus relating to such an equity issue, with the associated considerable time and cost constraints.  At Seraphine's current market capitalisation, and assuming such an equity fundraising was completed at the closing mid-market price of a Seraphine Share of 9.8 pence, the gross proceeds of such an equity fundraising for up to 19.9 per cent. of the issued share capital of the Company would be limited to £1 million.

The Seraphine Independent Directors further note that as a private company Seraphine would benefit from the significant reduction in professional and legal fees necessitated by listing requirements in addition to the freeing up of executive management's time to focus efforts on returning the Seraphine Group to profitable growth.

The Seraphine Independent Directors welcome the supportive statements from Mayfair with regard to having continuing faith in the Company's senior management team and the skill and expertise of the Company's employees. The Seraphine Independent Directors also welcome Mayfair's statement that it is not planning any material headcount reductions or other adverse changes to the terms of employment of Seraphine's employees or to its places of business as a result of the Offer.

Conclusion

Following careful consideration of the financial terms of the Offer, the economic and trading conditions expected over the short to medium term, and Mayfair's plans for Seraphine under Mayfair's ownership, the Seraphine Independent Directors intend to recommend unanimously the Offer to Seraphine Shareholders.

10.        Financing of the Offer and cash confirmation

The cash consideration payable by Bidco pursuant to the Offer will be financed by existing cash resources available to funds advised by Mayfair which have been transferred to Bidco.

Investec, the financial adviser to Bidco, confirms that it is satisfied that sufficient resources are available to Bidco to enable it to satisfy in full the cash consideration payable to Seraphine Shareholders in the event of full acceptance of the Offer.

11.        Offer-related arrangements

Confidentiality Agreement

MEP and Seraphine entered into a confidentiality agreement on 5 January 2023 pursuant to which MEP has undertaken, among other things, to: (i) keep information relating to Seraphine and the Offer confidential and not disclose it to third parties (other than to certain permitted disclosees) except as required by applicable law or regulation; and (ii) use the confidential information for the sole purpose of evaluating and considering the Offer. These confidentiality obligations will remain in force for two years from the date of the Confidentiality Agreement.

12.        Disclosure of interests in relevant securities

As at the close of business on 19 January 2023 (being the Last Practicable Date), Bidco, its directors and any persons acting in concert (within the meaning of the Takeover Code) with Bidco hold 21,742,685 Seraphine Shares, representing approximately 42.71 per cent. of the voting rights in Seraphine.

As at the close of business on 19 January 2023 (being the Last Practicable Date), save as disclosed in this Announcement, neither Bidco, nor any of its directors, nor, so far as Bidco is aware, any person acting in concert (within the meaning of the Takeover Code) with Bidco, had:

(i)        any interest in or right to subscribe for any relevant securities of Seraphine; nor

(ii)    any short positions in respect of relevant securities of Seraphine (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery; nor

(iii)       borrowed or lent any relevant securities of Seraphine (including, for these purposes, any financial collateral arrangements of the kind referred to in Note 4 on Rule 4.6 of the Takeover Code); nor

(iv)       entered into any dealing arrangement of the kind referred to in Note 11 on the definition of acting in concert in the Takeover Code in relation to relevant securities of Seraphine.

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

"relevant securities of Seraphine" are Seraphine Shares or securities convertible or exchangeable into Seraphine Shares.

It has not been practicable for Bidco to make enquiries of all of its concert parties in advance of the release 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 Seraphine, 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 Takeover Code which must be made on or before 12 noon on the 10^th Business Day following the date of this Announcement.

13.        Cancellation of listing and trading, compulsory acquisition and re-registration

The Seraphine Shares are currently listed on the premium listing segment of the Official List and admitted to trading on the Main Market. Bidco intends that, subject to compliance with applicable requirements of the Listing Rules, and subject to the Bidco Group holding or having acquired or agreed to acquire Seraphine Shares carrying 75 per cent. of the voting rights of the Company (by virtue of the Bidco Group's shareholdings and acceptances of the Offer) or on the first date of issue of compulsory acquisition notices under section 979 of the Companies Act, an application will be made to the FCA to cancel the listing of all the Seraphine Shares on the Official List and to the London Stock Exchange to cancel trading in all the Seraphine Shares on the Main Market. A notice period of no less than 20 business days shall apply to such cancellation and, in accordance with LR 5.2.10A R, such notice period shall begin only when Bidco has announced that it holds or has acquired or agreed to acquire Seraphine Shares representing 75 per cent. of the Company's voting rights.

Any cancellation of trading of Seraphine Shares on the Main Market would significantly reduce the liquidity and marketability of any Seraphine Shares in respect of which the Offer has not been accepted at that time and the value of any such Seraphine Shares may be adversely affected as a consequence.

If Bidco receives acceptances under the Offer in respect of and/or otherwise acquires or contracts to acquire, 90 per cent. or more by number of the Seraphine Shares to which the Offer relates, assuming that the Conditions have been satisfied, Bidco intends to exercise its rights in accordance with Part 28 of the Companies Act to acquire compulsorily the remaining Seraphine Shares on the same terms as the Offer.

Bidco also intends that, following and assuming the cancellation of the listing and trading of Seraphine Shares on the Main Market, Seraphine will be re-registered as a private limited company.

14.        Overseas Shareholders

The availability of the Offer to Seraphine Shareholders who are not resident in the UK may be affected by the laws and/or regulations of their relevant jurisdiction. Therefore, such persons should inform themselves about and observe any applicable legal or regulatory requirements in their jurisdiction. Further details in relation to overseas Seraphine Shareholders will be set out in the Offer Document. If you are in any doubt regarding such matters, you should consult your professional adviser in the relevant jurisdiction without delay.

This Announcement is not intended to, and does not, constitute or form part of an offer for sale for any securities or an offer or an invitation to purchase any securities.

15.        Consents

Each of Investec and finnCap has given and not withdrawn its consent to the publication of this Announcement with the inclusion herein of the references to its name in the form and context in which such references appear.

16.        Documents on display

Copies of the following documents will be made available on Seraphine's website at  www.seraphinegroupplc.com/offer by no later than 12 noon on the Business Day following the date of this Announcement until the end of the Offer Period:

·      a copy of this Announcement;

·      the Confidentiality Agreement;

·      the irrevocable undertakings and letters of intent referred to in paragraph 4 above; and

·      the consents of Investec and finnCap referred to in paragraph 15.

Copies of further announcements and other documents in connection with the Offer will, subject to certain restrictions relating to persons resident in any Restricted Jurisdictions, be made available on Seraphine's website by no later than 12 noon on the Business Day following the date of the relevant announcement or document, pursuant to Rule 26.1 of the Takeover Code.

The contents of the websites referred to in this Announcement are not incorporated into, and do not form part of, this Announcement.

17.        Requesting hard copy documents

Pursuant to Rule 30.3 of the Takeover Code, a person so entitled may request a copy of this Announcement in hard copy form by contacting the Company's registrars, Link Group during business hours on 0371 664 0300  (or if calling from outside the UK +44 371 664 0300) or by submitting a request in writing to Link Group, 10th Floor, Central Square, 29 Wellington Street, Leeds LS1 4DL. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9.00am and 5.30pm, Monday to Friday, excluding public holidays in England and Wales. A person may also request that all future documents, announcements and information to be sent to that person in relation to the Offer should be in hard copy form. 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.

Seraphine Shareholders may also request that all future documents, announcements and information to be sent to them in relation to the Offer should be in hard copy form. If a Seraphine Shareholder has received this Announcement in electronic form, hard copies of this Announcement and any document or information incorporated by reference into this Announcement will not be provided unless such a request is made.

Please note that the Registrar cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

18.        Disclosure requirements of the Takeover Code

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

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1 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 pm (London time) on the Business Day following the date of the relevant dealing.

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

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

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

19.        Rule 2.9 Disclosure

In accordance with Rule 2.9 of the Code, as at the close of business on the Last Practicable Date (being the Business Day prior to the date of this Announcement), Seraphine confirms that it had in issue 50,902,011  Seraphine Shares of £0.01 each. The International Securities Identification Number (ISIN) of the Seraphine Shares is GB00BNXGTY25.

20.        Publication on website and hard copies

This Announcement and the documents required to be published pursuant to Rule 26.1 of the Code will be available free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Seraphine's website at  www.seraphinegroupplc.com/offer by no later than 12.00 noon on the Business Day following this Announcement. Neither the content of any website referred to in this Announcement nor the content of any website accessible from hyperlinks is incorporated into, or forms part of, this Announcement.

21.        General

It is intended that the Offer will be implemented by way of a takeover offer within the meaning of the Companies Act. However, Bidco reserves the right to elect to implement the Offer by way of a Scheme as an alternative to the Offer (subject to the consent of the Panel). In such event, the Scheme will be implemented on substantially the same terms, so far as applicable, as those which would apply to the Offer, subject to appropriate amendments.

Bidco will make the Offer through the despatch of the Offer Document and Form of Acceptance, both of which will be posted to Seraphine Shareholders (or made available electronically in accordance with the Takeover Code) no later than 28 days after the date of this Announcement (unless agreed otherwise with the Panel). The Offer Document will contain the formal terms of, and Conditions applicable to, the Offer.

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

Your attention is drawn to the further information contained in the Appendices, which form part of, and should be read in conjunction with, this Announcement. The bases and sources of certain financial information contained in this Announcement are set out in Appendix 2. Certain terms used in this Announcement are defined in Appendix 4.

Important notices

Investec Bank plc, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, is acting exclusively for Bidco and no-one else in connection with the Offer and will not be responsible to anyone other than Bidco for providing the protections afforded to clients of Investec or for providing advice in relation to the Offer or any other matters referred to in this Announcement.  Neither Investec nor any of its affiliates (nor any of their respective directors, officers, employees or agents), owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Investec in connection with this Announcement, any statement contained herein or otherwise.

finnCap, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as financial adviser and corporate broker exclusively for Seraphine and no one else in connection with the matters set out in this Announcement and will not be responsible to anyone other than Seraphine for providing the protections afforded to clients of finnCap, nor for providing advice in relation to any matter referred to herein. Neither finnCap, nor any of its affiliates (nor any of their respective directors, officers, employees or agents), owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of finnCap in connection with this Announcement, any statement contained herein or otherwise.

No offer or solicitation

This Announcement is not intended to and does not constitute, or form part of, any offer or invitation or the solicitation of any offer to sell or purchase any securities or the solicitation of any offer to otherwise acquire, subscribe for, sell or otherwise dispose of any security pursuant to the Offer or otherwise.

Further information

This Announcement is for information purposes only and does not constitute a prospectus or prospectus equivalent document. The Offer will be made solely by the Offer Document (or, if the Offer is implemented by way of a Scheme, the Scheme Document) (together with, in the case of Seraphine Shares in certificated form, the Form of Acceptance), which will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted. Seraphine Shareholders should carefully read the Offer Document (and, if they hold their Seraphine Shares in certificated form, the Form of Acceptance) in its entirety (or, if the Offer is implemented by way of a Scheme, the Scheme Document) before making a decision with respect to the Offer. Any decision in respect of, or other response to, the Offer should be made only on the basis of the information in the Offer Document and Form of Acceptance as applicable (or, if the Offer is implemented by way of a Scheme, the Scheme Document).

The full terms and conditions of the Offer (including details of how the Offer may be accepted) will be set out in the Offer Document and, in the case of certificated Seraphine Shares, the related Form of Acceptance. The Offer will be made solely through the Offer Document and, in the case of certificated Seraphine Shares, the Form of Acceptance, and any acceptance of the Offer should be made only on the basis of the information contained in the Offer Document and, in the case of certificated Seraphine Shares, the Form of Acceptance.

Seraphine Shareholders are advised to read the Offer Document and the Form of Acceptance carefully when they become available because they will contain important information relating to the Offer.

Overseas jurisdictions

The availability of the Offer and the release and/or distribution of this Announcement in or into jurisdictions other than the United Kingdom may be restricted by the laws and regulations of those jurisdictions and, therefore, persons who are not resident in the United Kingdom into whose possession this Announcement comes should inform themselves about and observe any such restrictions. Failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction. Seraphine Shareholders who are in any doubt regarding such matters should consult an appropriate independent financial adviser in their relevant jurisdiction without delay.

Copies of this Announcement are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction, and persons receiving this Announcement (including custodians, nominees and trustees) must not, directly or indirectly, mail or otherwise distribute or send it in, into or from such Restricted Jurisdictions as doing so may violate the securities laws of such jurisdictions and invalidate any purported acceptance of the Offer.

This Announcement has been prepared in compliance with English law and regulation (including the Takeover 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 and regulations of jurisdictions outside England.

This Announcement is not an offer of securities for sale in any jurisdiction (including any Restricted Jurisdiction).

Further details in relation to Seraphine Shareholders in overseas jurisdictions will be contained in the Offer Document.

Notice to US shareholders

The Offer relates to the shares of an English company and is subject to UK procedural and disclosure requirements, which differ from those of the United States. The Offer is extended into the United States in reliance on the "Tier I" exemption pursuant to Rule 14d-1(c) under the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"), from the requirements of the Exchange Act and the rules and regulations promulgated thereunder. Accordingly, the Offer will be subject to procedural and disclosure requirements, including with respect to withdrawal rights, notices of extensions, announcements of results, settlement procedures and waivers of conditions, which differ in various respects from the requirements and customary practices followed in US domestic tender offers.

The financial information included or referred to herein has been or will be prepared in accordance with accounting standards applicable in the United Kingdom and, accordingly, may not be comparable to financial information of US companies or other companies whose financial statements are prepared in accordance with US generally accepted accounting principles ("US GAAP"). US GAAP differs in certain significant respects from accounting standards applicable in the United Kingdom. None of the financial information included or referred to herein has been audited in accordance with auditing standards generally accepted in the United States or the auditing standards of the Public Company Accounting Oversight Board (United States).

The Offer is being made to US shareholders on the same terms and conditions as those made to all other Seraphine Shareholders to whom the Offer is made. All information documents disseminated by Bidco regarding the Offer will be disseminated to US Seraphine shareholders on a basis comparable to the method pursuant to which those documents are provided to all other Seraphine Shareholders.

The receipt of cash pursuant to the Offer by a US shareholder as consideration for the transfer of its Seraphine Shares pursuant to the Offer will likely be a taxable transaction for United States federal income tax purposes and under applicable United States state and local, as well as foreign and other, tax laws. Each Seraphine Shareholder is urged to consult its independent professional adviser immediately regarding the tax consequences of acceptance of the Offer.

Neither the Offer nor this announcement has been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any other US regulatory authority, nor have such authorities passed upon or determined the adequacy or accuracy of the information contained in this Announcement or the merits of the Offer. Any representation to the contrary is a criminal offence in the United States.

Forward-looking statements

This Announcement, including any information incorporated by reference in this Announcement, contains certain forward-looking statements. The forward-looking statements contained herein include statements about the expected effects of the Offer on Bidco and the Seraphine Group, strategic options, the expected timing and scope of the Offer, and all other statements in this Announcement other than historical facts. These statements are based on the current expectations and are naturally subject to uncertainty and changes in circumstances. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "budget", "schedule", "forecast", "project", "goal", "believe", "hope", "aims", "continue", "will", "may", "should", "would", "could", "subject to", or other words of similar meaning. By their nature, forward-looking statements involve known and unknown risks and uncertainties, because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results, outcomes and developments to differ materially from those expressed in, or implied by, such forward-looking statements and such statements are, therefore, qualified in their entirety by the risks and uncertainties surrounding these future expectations. Many of these risks and uncertainties relate to factors that are beyond those making the forward-looking statements ability to control or estimate precisely, such as, but not limited to, general business and market conditions both globally and locally, political, economic and regulatory forces, industry trends and competition, future exchange and interest rates, changes in government and regulation including in relation to health and safety, the environment, labour relations and tax rates and future business combinations or dispositions. Although Bidco believes that the expectations reflected in such forward-looking statements are reasonable, Bidco cannot give any assurance, representation or guarantee that such expectations will prove to have been correct and such forward-looking statements should be construed in light of such factors and you are, therefore, cautioned not to place reliance on these forward-looking statements which speak only as at the date of this Announcement. Bidco assumes no obligation to update or correct the information contained in this Announcement (whether as a result of new information, future events or otherwise),except as required by applicable law or regulation.

No profit forecasts, estimates or quantified financial benefits statements

No statement in this Announcement is intended 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 or dividends or dividends per share for Seraphine for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share or dividends or dividends per share for Seraphine.

Purchases outside the Offer

Bidco or its nominees or brokers (acting as agents) may purchase Seraphine Shares otherwise than under the Offer (or, in the event the Offer is implemented by way of a Scheme, the Scheme), such as in the open market or through privately negotiated purchases. Such purchases shall comply with the Takeover Code, the Listing Rules and the rules of the London Stock Exchange.

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.

General

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 or independent financial adviser duly authorised under FSMA if you are resident in the United Kingdom or, if not, from another appropriate authorised independent financial adviser.