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8 September 2015

Conviviality Retail Plc

(“Conviviality”, the “Company” or the “Group”)

£200 million Acquisition of Matthew Clark and £130 million Placing

Conviviality Retail Plc (AIM:CVR) is pleased to announce that, further to the

announcements on 9 July 2015, 14 August 2015 and 4 September 2015, it has agreed to

acquire Matthew Clark (Holdings) Limited (“Matthew Clark”) for an enterprise value of £200

million (the “Acquisition”).

Highlights

• The Acquisition will create a major UK drinks wholesaler with combined annual

sales of over £1.1 billion

• The enlarged business would be independent of major drinks brands, enabling it to

supply an unrestricted selection of products to customers who value breadth of

range

• The combined group will offer a compelling route to market for suppliers to access

both on and off trade retailers

• In the year to 28 February 2015, Matthew Clark generated revenue of £811.2 million

and adjusted EBITDA of £25.3 million

• The Acquisition is expected to be earnings enhancing from the first full year of

ownership

• Conviviality’s Directors believe that potential exists for significant synergies to be

realised from the combination of the two businesses, with potential synergies from

buying, distribution, organisational efficiencies and additional revenue generation

• The Acquisition and associated expenses will be financed by a Placing raising gross

proceeds of £130 million, and by £80 million to be drawn down under new debt

facilities (the “New Facilities”)

• The Placing comprises the issue of 86,666,667 new Ordinary Shares at a price of

150 pence per share, a 3.2 per cent. discount to the closing middle market price of

155 pence per share on 8 July 2015, the last business day before trading in the

shares was suspended pending an announcement regarding a reverse takeover

• The Acquisition constitutes a reverse takeover under the AIM Rules and is therefore

conditional on obtaining shareholder approval at the General Meeting scheduled for

24 September 2015. At the General Meeting a number of other resolutions will be

proposed, which will include, inter alia, resolutions to authorise the issue of the

Placing Shares and the change of the Company’s name to “Conviviality Plc”.

• Conviviality has secured irrevocable commitments to vote in favour of the

resolutions to effect the Acquisition and the Placing to be proposed at the General

Meeting in respect of 36,483,115 Ordinary Shares, representing 54.5 per cent. of

the Existing Ordinary Share capital. A further statement of intent to vote in favour of

such Resolutions has been received in respect of 6,083,333 Ordinary Shares,

representing approximately 9.1 per cent. of the Existing Ordinary Share capital.

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Diana Hunter, Chief Executive Officer of Conviviality, said:

“We are pleased to have reached agreement on the acquisition of Matthew Clark as this will

accelerate our strategy of expanding our wholesaling expertise into new markets and

channels. Matthew Clark has a leading position in the independent on-trade market,

complementing Conviviality's position in the off-trade, and the team bring significant on-trade

wholesaling expertise and an unrivalled portfolio of high quality and loyal customers.

“By operating a delivered wholesale model we can serve a diverse range of customers and

build our wine and spirit volumes further while simultaneously strengthening our retail

channel. The acquisition will create a major player in the UK drinks wholesale market, and

we believe that combining the two businesses will give rise to significant potential synergies,

which will drive increased returns for Conviviality's shareholders.”

Placing Statistics

Placing Price per Placing Share 150 pence

Market capitalisation on Admission (approximately) (1)(2) £232.4 million Number of New Ordinary Shares being issued pursuant to the Placing 86,666,667 Number of Existing Ordinary Shares in issue immediately prior to Admission 66,942,357 Number of Ordinary Shares in issue on Admission (2) 154,943,024 Percentage of the Enlarged Ordinary Share Capital being placed pursuant to the

Placing (3)

55.93 per cent. Estimated gross proceeds of the Placing of the Placing Shares £130 million Estimated net proceeds of the Placing of the Placing Shares receivable by the

Company

£122.5 million

(1) Market capitalisation calculated on the basis of the Placing Price

(2) Number of Ordinary Shares in issue on Admission takes account of the 1,334,000 Ordinary Shares to be issued before Admission following the exercise of the Warrant

(3) Excludes deferred shares of £0.0002 each in the capital of the Company, which have no equity value

Enquiries:

Conviviality Retail Plc Tel: 01270 614 700

Diana Hunter, Chief Executive Officer Andrew Humphreys, Chief Financial Officer

Zeus Capital (Nominated Adviser and Joint Broker)

Nick Cowles / Andrew Jones / Jamie Peel Tel: 0161 831 1512

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Investec (Joint Broker) Tel: 020 7597 4000

Garry Levin / David Flin

FTI Tel: 020 3727 1000

Jonathan Brill Alex Beagley

IMPORTANT INFORMATION

The distribution of this announcement and the Placing of the Placing Shares as referred to in this announcement in certain jurisdictions may be restricted by law. No action has been taken that would permit an offering of such shares or possession or distribution of this announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required to inform themselves about, and to observe, such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

Zeus Capital Limited ("Zeus Capital"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority and Investec Bank plc ("Investec"), which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Prudential Regulation Authority and the Financial Conduct Authority (together the "Joint Brokers"), are acting for Conviviality Retail Plc and for no-one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Conviviality Retail Plc for providing the protections afforded to clients of the Joint Brokers, or for providing advice in relation to the contents of this announcement or any matters referred to herein. The Joint Brokers are not responsible for the contents of this announcement.

This announcement has been prepared for the purposes of complying with the applicable law and regulations of the United Kingdom 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 any jurisdiction outside of the United Kingdom.

Non-IFRS financial information

This announcement contains certain financial measures that are not defined or recognised under IFRS, including adjusted EBITDA (being earnings before interest, tax, depreciation, amortisation). information regarding these measures are sometimes used by investors to evaluate the efficiency of a company’s operations and its ability to employ its earnings toward repayment of debt, capital expenditures and working capital requirements. There are no generally accepted principles governing the calculation of these measures and the criteria upon which these measures are based can vary from company to company. These measures, by themselves, do not provide a sufficient basis to compare the Company’s performance with that of other companies and should not be considered in isolation or as a substitute for operating profit or any other measure as an indicator of operating performance, or as an alternative to cash generated from operating activities as a measure of liquidity.

Note regarding forward-looking statements:

This announcement includes statements that are, or may be deemed to be, forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms anticipates, believes, estimates, expects, intends, may, plans, projects, should or will, or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include, but are not limited to, statements regarding the Group's and/or the Conviviality directors' ("Directors") intentions, beliefs or current

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expectations concerning, amongst other things, the Group's results of operations, financial position, prospects, growth, strategies and expectations.

Any forward-looking statements in this announcement reflect the Group's (or, as the case may be, the Directors') current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Group's operations, results of operations and growth strategy. Investors should specifically consider the factors identified in this announcement which could cause actual results to differ before making an investment decision. Subject to the requirements of the AIM Rules for Companies, none of the Group, the Directors, Zeus Capital and Investec undertake any obligation publicly to release the result of any revisions to any forward-looking statements in this announcement that may occur due to any change in the Group's expectations or to reflect events or circumstances after the date of this announcement, save to the extent required by law. Past performance of the Group is not necessarily indicative of future performance.

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£200 million Acquisition of Matthew Clark and £130 million Placing

1. Introduction

Conviviality today announces that it has entered into an agreement to acquire Matthew Clark and its subsidiaries from Hertford Cellars Limited (part of the Accolade Wines group) and Punch Taverns Plc, for expected total cash consideration of £198.4 million (being an amount of £192.7 million plus a daily profit adjustment for the period 1 July 2015 until the day before completion of the Acquisition, which is currently anticipated to take place on 2 October 2015), representing an enterprise value of £200.0 million. The Acquisition is conditional, inter alia, on its approval by Conviviality’s shareholders at a General Meeting to be convened and held on 24 September 2015, and Admission taking place by no later than 30 October 2015.

Matthew Clark is a UK-based alcohol and soft drinks wholesaler which primarily serves the non-tied on-trade market via a nationwide distribution network. In the year to 28 February 2015, Matthew Clark delivered to approximately 17,000 on-trade premises (pubs, bars, hotels, restaurants etc) and generated revenues of £811.2 million and adjusted earnings before interest, tax, depreciation and amortisation (“EBITDA”) of £25.3 million.

The Acquisition is being funded via a £130.0 million Placing and £80.0 million to be drawn under the New Facilities. Appropriate working capital facilities of up to £92.5 million will be in place for the Enlarged Group to cover seasonal and intra-month fluctuations in working capital.

The Company also proposes to alter its name to “Conviviality Plc” to ensure it reflects the Enlarged Group.

The Acquisition, if completed, is of sufficient size to constitute a reverse takeover under the AIM Rules, and is therefore subject to the publication of an AIM admission document (which is being published today, 8 September 2015, the “AIM Admission Document”), the passing of Resolutions by shareholders to approve the Acquisition and to grant authorities to effect the Placing, at a General Meeting which is to be held on 24 September 2015, and admission of the Enlarged Share Capital to trading on AIM. Admission is expected to occur at 8.00 a.m. on 29 September 2015, and the Acquisition is expected to complete on 2 October 2015. Drawdown of the New Facilities is conditional on the conditions for completion of the Acquisition being satisfied. Punch Taverns plc also requires shareholder approval to the sale of Matthew Clark. Punch Taverns plc’s general meeting is expected to take place on or around 28 September 2015.

2. Background to and rationale for the Acquisition

Conviviality has an established position in the UK drinks wholesaling market with strong supplier relationships, an efficient supply chain and significant expertise in wholesaling to its Franchisees. In accordance with the strategy outlined at IPO, Conviviality has built a number of distinctive and differentiated retail brands, strengthened its relationship with Franchisees and made a number of complementary acquisitions and strategic partnerships to extend its geographic reach and, with the acquisition of Wine Rack, expanded into new channels and markets.

The acquisition of Matthew Clark represents a continuation of the strategy to leverage Conviviality’s key strengths to enter new markets by providing significant scale in the non-tied, on-trade drinks market, delivering to approximately 17,000 on-trade outlets annually. The on-trade market includes pubs, restaurants and hotels; night venues (e.g. night clubs and casinos); destination leisure venues (e.g. holiday parks and theme parks); and other premises licensed to sell alcoholic drinks for consumption in situ.

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Completion of the Acquisition would create a major UK-based on-trade and off-trade drinks wholesaler with combined sales of over £1.1 billion for the financial years ended April 2015 (Conviviality) and February 2015 (Matthew Clark). The enlarged business would be independent of major drinks brands, enabling it to supply an unrestricted selection of products to customers who value breadth of range, and offer a compelling route for suppliers to access both on and off-trade retailers.

The Directors believe that the increased scale of the enlarged business will increase its buying power, enabling buying synergies to be achieved. In addition, combining the two businesses has the potential to realise distribution, operational and revenue synergies (e.g. through sale of Matthew Clark exclusive products and delisted stock lines via Conviviality’s store network).

The Acquisition is expected to be earnings enhancing from the first full year of ownership. This statement does not constitute a profit forecast.

3. Overview of Conviviality

Conviviality Retail owns one of the UK’s largest franchised off-licence and convenience chains with 624 stores as at 26 April 2015. The Directors consider that Conviviality has a distinctive retail proposition, offering a destination range of licensed products (alcohol and tobacco) and a convenient non-licensed assortment (soft drinks, confectionery, impulse and grocery) at competitive prices. In the 52 weeks ended 26 April 2015 Conviviality reported revenues of £364.1 million, an increase of 2.4 per cent. from £355.7 million reported in 2014. The Company reported group profit before tax and exceptional items of £9.7 million in the 52 weeks ended 26 April 2015, an increase of 4.4 per cent from £9.3 million reported in 2014.

Following its successful flotation in July 2013, Conviviality has increased profits through the refocusing of its Franchisee base, ensuring that motivated and engaged Franchisees improve profits for themselves and in turn also for Conviviality. Conviviality has also executed and integrated strategic acquisitions and increased the strength and depth of the Company’s board of directors.

Alongside these strategic developments, the Company has consistently delivered results in-line with market expectations and has seen its share price grow from 100 pence on admission to 155 pence as at July 2015, the last business day before trading in the Ordinary Shares was suspended pending an announcement regarding the proposed Acquisition. Conviviality has also since IPO paid total dividends to investors of £6.6 million.

4. Overview of Matthew Clark

Matthew Clark is the largest independent distributor to the UK on-trade drinks sector, generating more annual revenue than the aggregate of its seven largest independent drinks wholesaling competitors, and delivering to approximately 17,000 on-trade premises each year. Matthew Clark delivered over 48 million bottles of wine, 22 million bottles of spirits, 171 million pints of beer and 16 million bottles of cider in the year to February 2015.

For the year ended 28 February 2015, Matthew Clark generated revenues of £811.2 million and adjusted EBITDA of £25.3 million.

Matthew Clark’s core business is drinks wholesale. The drinks wholesale business generated 94 per cent. of its total revenues (£763 million) in the year ended 28 February 2015, and offers a range of over 4,000 products, including beers, wines, spirits, cider and soft drinks, sourced from in excess of

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300 suppliers. Matthew Clark has a number of exclusive distribution agreements for third party products (mainly wines) into the UK market and also has a limited range of own brand wines, which are sourced from Accolade Wines.

In addition to its broad product range, a key aspect of Matthew Clark’s competitive advantage is the ability of its sales force to assist customers with sourcing exclusive wines and provide advice on ranging, enabling the development of bespoke offerings. The sales force have up-to-date information on industry sales trends, new product information and pricing and are able to recommend new or popular products to customers as well as help them make decisions in relation to optimising the breadth of products offered.

The direct interaction with customers and involvement in ranging decisions is also valuable to suppliers, who use Matthew Clark to sell newly developed products into the on-trade market, which is where most consumers try a new product for the first time.

Matthew Clark’s nationwide distribution network of 14 depots allow it to offer its customers a nationwide next day delivery service and timed delivery slots, which further embeds its relationship with customers.

Suppliers include a mix of global and niche product manufacturers and brand owners, including some of the largest names in the drinks industry, with some exclusive agency agreements in place with Catalyst in addition to standard supply terms.

Accolade Wines, which is one of the Sellers, is a key supplier to Matthew Clark, with over £55 million of products purchased from them in the year ended 28 February 2015. Accolade Wines will enter into a new supplier contract with effect from completion of the Acquisition Agreement.

Matthew Clark has a highly experienced management team in place, who are expected to remain with the business post Acquisition. As the integration of Conviviality and Matthew Clark progresses, certain members of the Matthew Clark management team may assume roles and/or responsibilities at Group level, including potentially a member of Matthew Clark’s management being appointed to the Company’s board of directors.

Matthew Clark Strategy

The Matthew Clark vision is to “influence every drinking occasion through passion, insight and experience”.

Matthew Clark’s current strategic focus is:

Core Wholesale: continue to focus on best in class sales force with the best insights and technology, availability of product and collaborative supplier relationships.

Service Extensions:

• Extended range: Further penetrate existing customers, and win new customers, through offering and increased range of products. Influence customer ranges with a relevant and current offering. Enhance the Matthew Clark supply chain to support the extended range model with a next day delivery service.

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Consolidation: target a growth opportunity to supply a significant number of managed retailers that are not currently served.

5. Enlarged Group Strategy, Synergy and Post-Acquisition Plan Strategy

Post Acquisition, Conviviality will create a unique model in the UK connecting the on-trade and off-trade that enables it to optimise revenue and profit from brands and exclusive labels by maximising their distribution potential across all drinking occasions.

By building greater scale and combining Conviviality and Matthew Clark, the Enlarged Group has the potential to realise lower costs through buying and distribution synergies, improve organisational efficiency, and increase revenues by using Conviviality’s franchised and owned store estate to sell Matthew Clark’s exclusive products and delisted stock lines.

Synergies

A key part of the integration plan is to conduct a detailed evaluation, building on the initial analysis already undertaken, immediately post acquisition of potential synergies that could be generated from the two businesses and developing a detailed plan to deliver the benefits of these.

Buying Synergies

Initial analysis demonstrates a significant overlap in suppliers and products, and price differentials between Matthew Clark and Conviviality. Conviviality will work with suppliers to leverage the efficiencies of supplying a larger group and accessing both the on and off trade through the Group. Working with the Enlarged Group, lower cost prices may be achieved by leveraging these price differentials and the increased scale of the Enlarged Group.

Distribution Synergies

Conviviality and Matthew Clark have nationwide distribution networks with the Enlarged Group operating 16 warehouses and a fleet of more than 260 delivery trucks at a total annual cost of £49 million. A detailed review of both businesses’ supply chains and product ranges will be undertaken to identify potential opportunities to reduce transport costs by increasing regional densities and to improve warehouse efficiency.

Organisational Synergies

It is the Directors intention that Matthew Clark and Conviviality will operate as standalone divisions with their existing management structures whilst developing a more detailed understanding of how the two businesses operate together. Thereafter, Conviviality will seek opportunities to improve efficiencies by leveraging the strengths of both business and combining areas of skills and expertise. Incremental revenue generation

Offering a wide product range, containing many recently launched products, coupled with next day nationwide delivery, is a key part of Matthew Clark’s customer proposition. This necessitates high stock levels and can result in holding stock in de-listed lines. The Conviviality store estate provides an opportunity to sell these batches of stock by running short term promotional activity in the off-trade

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market thus increasing overall revenues and Franchisee engagement and releasing warehouse capacity.

Post-Acquisition Plan

Conviviality has a comprehensive plan to ensure the success of the Acquisition and the engagement of both businesses in delivering their respective goals and targets, as well as the opportunities to leverage the best of both.

This plan will continue to be refined after the Acquisition is completed ensuring that all areas of synergy opportunity are well planned, resourced and benefits realised.

6. Principal terms of the Acquisition

Conviviality Brands has agreed, subject to a number of conditions, including the approval of the Acquisition by Shareholders at the General Meeting and subject to Admission, to acquire 100 per cent of Matthew Clark’s ordinary shares for expected total cash consideration, payable on completion in cash, of £198.4 million (being an amount of £192.7 million plus a daily profit adjustment for the period 1 July 2015 until the day before completion of the Acquisition, which is currently anticipated to take place on 2 October 2015), representing an enterprise value of £200.0 million. The Acquisition is also conditional on Punch Taverns plc obtaining shareholder approval to the sale of Matthew Clark, as the sale of 50 per cent. of Matthew Clark by a subsidiary of Punch Taverns plc constitutes a class 1 transaction, pursuant to the London Stock Exchange’s Listing Rules.

This enterprise value represents a multiple of approximately 8x Matthew Clark’s adjusted EBITDA of £25.3 million for the year ended 28 February 2015.

The Acquisition is conditional only upon Punch Taverns plc obtaining its shareholder consent to the sale of Matthew Clark, the Pension Condition being satisfied, the Software Condition being satisfied or waived, the Company’s Shareholders approving the Acquisition and Admission. Subject to these conditions being satisfied (or waived, if applicable), Conviviality Brands has no right to terminate the Acquisition Agreement save in the event of the Sellers failing to comply with their completion obligations on or before 30 October 2015. The Acquisition Agreement includes title warranties from the Sellers in favour of Conviviality Brands, with each Seller’s liability under the Acquisition Agreement and the Taxation Deed capped at 100 per cent. of the purchase price received by each Seller. Warranties in respect of the Matthew Clark group, its business and trading are also included in the Acquisition Agreement and a tax indemnity included in the Taxation Deed. The Sellers’ liability under the warranties (other than the title warranties) and the tax indemnity is capped at £1. However, Conviviality Brands has procured a warranty and indemnity insurance policy in the aggregate value of £50 million and will be unable to recover in respect of the first £1.93 million of claims (but can seek to claim up to £50 million in aggregate thereafter). Claims under this policy are subject to certain financial limitations and caps and also, in the usual way, to matters fairly disclosed by the Sellers. 7. Summary financial information on Matthew Clark

Year ended Year ended Year ended

£’000 (except percentage figures) 28 February 2013 28 February 2014 28 February 2015

Revenue 731,270 805,465 811,183

Gross Profit 83,659 94,320 100,504

Gross Profit Margin 11.4% 11.7% 12.4%

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Operating Profit 12,394 13,562 18,250

Profit after tax 8,114 9,265 13,440

Operating Profit 12,394 13,562 18,250

Depreciation and amortisation 2,065 2,850 2,641

Adjusting items(1) 247 5,380 4,387

Adjusted EBITDA 14,706 21,792 25,278

(1) Adjusting items relate to the long term incentive plan previously in place within the Matthew Clark Group, fair value gains/losses on financial instruments and other exceptional operating items

8. Financial impact of the Acquisition

The Conviviality Group is financing the Acquisition and associated expenses through a Placing raising gross proceeds of £130 million, £80 million of new term loan debt to be drawn down under the Term Loan Facilities and its own cash resources.

The Acquisition is expected to be earnings enhancing from the first full year of ownership. This statement does not constitute a profit forecast.

The New Facilities entered into by the Group to part fund the Acquisition comprise £80 million term loan facility, a £42.5 million revolving credit facility (of which £12.5 million may be utilised by way of a tobacco guarantee), from the Banks and a £50 million invoice discounting facility from the ID Providers. The £80 million term loan and the £42.5 million RCF both have a term of five years from the date of the Term and RCF facilities. The ID Facility will have a term of five years commencing when it is entered into following completion of the Acquisition. Half the £80 million term loan will amortise on a straight line basis (with semiannual repayments), with the remaining 50 per cent. repaid upon expiry of the term. The applicable interest rate on amounts drawn down under the Term and RCF Agreement is LIBOR plus up to 2.5 per cent. per annum, with provision for the interest rate to reduce in line with decreases in the overall leverage of the Enlarged Group.

The Group estimates that the net debt of the Enlarged Group following completion of the Acquisition will be approximately £80 million, excluding any amounts drawn down under the RCF and ID Facility, which are for working capital purposes only; the undrawn portion of the RCF and ID Facility plus the Group’s cash balances will provide ongoing financial flexibility. The Directors expect leverage on completion of the Acquisition to be approximately 2x net debt/adjusted EBITDA, excluding the impact of any drawdown under the working capital facilities, being the RCF and the ID facility (based on the combined adjusted EBITDA figures of Conviviality and Matthew Clark for the financial years ended 26 April 2015 and 28 February 2015 respectively).

The Directors expect that the leverage ratio will reduce over time. Drawdown under the New Facilities is conditional on the conditions for completion of the Acquisition being satisfied.

The Group will incur advisers’ fees, commissions and expenses of approximately £7.5 million in connection with the Acquisition, the Placing, Admission and the New Facilities.

9. Board Changes

The Company has decided to put in place a new board structure to oversee the Enlarged Group post acquisition and to ensure effective governance going forward.

The membership of the new Conviviality Plc board will be: David Adams (Chairman), Diana Hunter (Chief Executive Officer), Andrew Humphreys (Chief Financial Officer), Steve Wilson (Senior

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Independent Director), Martin Newman (Non- Executive Director) and Ian Jones (Non-Executive Director). As such Kenton Burchell and Amanda Jones have resigned from their respective Plc board positions effective as of 7 September 2015.

Kenton and Amanda will both sit on the Conviviality operating board and continue in their roles as Commercial Director and Chief Operational Officer respectively, continuing to focus on managing Conviviality’s store network and franchisee base.

10. Grant of option

Andrew Humphreys, Conviviality’s Chief Financial Officer, shall, today be granted an option over 149,517 Ordinary Shares. The option has an exercise of 155 pence per Ordinary Share, equal to the last closing price prior to the Company’s shares being suspended, has a three year vesting period and contains certain performance conditions including, inter alia, the achievement of EBITDA targets. 11. Information on the Placing

£130 million (before fees and expenses) is being raised by way of a placing of 86,666,667 Ordinary Shares at a placing price of 150 pence per Ordinary Share. The Placing Shares will represent approximately 55.93 per cent. of the Enlarged Group’s issued share capital immediately following Admission. The Placing Price represents a discount of approximately 3.2 per cent. to the closing middle market price of 155 pence per Ordinary Share on 8 July 2015 (being the last business day before the shares were suspended pending an announcement regarding a reverse takeover). The Placing is not being underwritten.

The Placing Agreement contains certain provisions (including customary market related provisions) entitling Zeus Capital and Investec to terminate the Placing Agreement in certain limited circumstances at any time prior to Admission.

An application will be made to the London Stock Exchange for the Enlarged Share Capital to be admitted to trading on AIM. The Placing Shares will rank pari passu with the Group’s existing issued Ordinary Shares.

The Placing is conditional on the Placing Agreement becoming unconditional (and not being terminated) and the Placing Agreement is conditional, among other things, on the Acquisition Agreement becoming unconditional (other than as regards any condition relating to the Placing Agreement or Admission having taken place) and on Admission becoming effective by no later than 8.00 a.m. on 29 September 2015 (or such later time, not being later than 5.00 p.m. on 30 October 2015, as Conviviality, Zeus Capital and Investec may agree). Admission is expected to become effective, and dealings in the Placing Shares to commence, at 8.00 a.m. on 29 September 2015. The Placing Agreement is not subject to any right of termination after Admission.

Upon Admission, the Enlarged Share Capital will comprise 154,943,024 Ordinary Shares with voting rights. Conviviality does not hold any shares in treasury. This figure of 154,943,024 Ordinary Shares may be used by shareholders in Conviviality following Admission as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of Conviviality under the FCA’s Disclosure and Transparency Rules. 12. Dividend policy

The Directors’ intention is to continue the progressive dividend policy that has been in place since Conviviality’s admission to AIM in July 2013, subject to the discretion of the Board and to the

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Company having sufficient distributable reserves. The Company paid a dividend of 8 pence per Ordinary Share in respect of the financial year ended 27 April 2014 and has proposed to pay a final dividend of 6.3 pence per Ordinary Share in respect of the financial year ended 26 April 2015, in addition to the interim dividend of 2 pence per Ordinary Share already paid in respect of this period. 13. Current trading and prospects

Conviviality announced its final results for the 52 weeks ended 26 April 2015 on 13 July 2015. Since this date, Conviviality has continued to trade in line with management expectations.

Matthew Clark’s latest audited financial statements as set out in Section B of Part III of the Admission Document relate to the period ended 28 February 2015. Since this date, Matthew Clark has continued to trade in line with Matthew Clark’s management expectations.

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The General Meeting of the Company is to be held at 10.30 a.m. on 24 September 2015 at Unit 1, Weston Road, Crewe, Cheshire CW1 6BP to consider and, if thought fit, pass the Resolutions proposed in connection with, inter alia, the Acquisition and the Placing. The Resolutions to be proposed are set out in the notice of General Meeting in Part VI of the Admission Document, and are summarised below:

• an ordinary resolution to approve the Acquisition;

• an ordinary resolution to authorise the Directors to allot:

o 86,666,667 Ordinary Shares pursuant to the Placing; and

o (as a general authority) up to 23,241,453 additional Ordinary Shares (being 15 per cent. of the Enlarged Share Capital);

• a special resolution to authorise the Directors to allot Ordinary Shares for cash on a non pre-emptive basis in limited circumstances, as follows:

o up to 86,666,667 Ordinary Shares pursuant to the Placing; and

o up to 7,747,151 Ordinary Shares for cash (which represents approximately 5 per cent. of the Enlarged Share Capital);

• a special resolution to change the Company’s name to “Conviviality Plc”.

The general authorities referred to above mirror the equivalent general authorities proposed to be passed at the Company’s annual general meeting to be held at 10.00 a.m. on 24 September 2014, save that the number of Ordinary Shares to which the authorities relate take account of the increase in the number of Ordinary Shares that will be in issue immediately following the Placing, on the assumption the warrant is exercised. These authorities are in line with (and in the case of the first general authority to allot, less extensive than) the guidelines issued by The Investment Association and ensure the Company has sufficient flexibility by obtaining authorities that account for the increased share capital of the Company following the Placing. If given, these authorities will expire at the conclusion of the Company’s annual general meeting to be held in 2016, or on 24 December 2016 (whichever is earlier).

There are no present plans to allot shares in the capital of the Company, other than in connection with the Placing and pursuant to the Share Schemes and the Franchisee Incentive Plan adopted by the Company.

15. Recommendation and Irrevocable Undertakings

The Directors unanimously recommend that Shareholders vote in favour of the Resolutions, as they have irrevocably undertaken to do in respect of their own aggregate holdings of 51,263 Ordinary Shares, representing 0.07 per cent. of the issued share capital as at the latest practicable date before publication of this announcement.

In addition, irrevocable undertakings to vote in favour of the Resolutions required to effect the Acquisition and the Placing at the General Meeting have been secured from Shareholders holding in aggregate 36,483,115 Ordinary Shares, representing 54.5 per cent. of the Existing Ordinary Share capital. A further statement of intent to vote in favour of such Resolutions has been received in

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respect of a further 6,083,333 Ordinary Shares, representing approximately 9.1 per cent. of the Existing Ordinary Share capital.

Definitions

Capitalised words used in this announcement have the following meanings:

“Acquisition Agreement” the share sale and purchase agreement dated 7 September 2015 between (1) Hertford Cellars Limited (2) Punch Taverns (Finco) Limited (3) Conviviality Brands (4) the Company (5) Accolade Wines Europe No. 2 Limited, (6) Punch Taverns (PGE) Limited and (7) Punch Taverns plc pursuant to which, conditional on, inter alia, the passing of Resolution numbered 1 and Admission becoming effective, the Company shall acquire the entire issued share capital of Matthew Clark;

“Admission” the admission of the Enlarged Share Capital to trading on AIM becoming effective in accordance with the AIM Rules;

"Banks” each of The Royal Bank of Scotland plc, Barclays Bank PLC and HSBC Bank plc;

“Catalyst” Catalyst Brands, a division of Matthew Clark providing brand management and incubation to brand owners;

“Conviviality Brands” Conviviality Brands Limited, a wholly owned subsidiary of the Company, registered in England and Wales with company number 9750710, whose registered office is at Weston Road, Crewe, Cheshire CW1 6BP;

“Enlarged Group” means the Group and the Matthew Clark group, following completion of the Acquisition;

“Enlarged Share Capital” the issued Ordinary Shares following the Placing comprising the Existing Ordinary Shares, the Placing Shares and the shares to be issued before Admission following the anticipated exercise of the Warrant;

“Existing Ordinary Shares” the 66,942,357 Ordinary Shares in issue as at the date of this announcement;

“Franchisee” owners or operators of stores granted franchises by the Group to operate a business under one of the Group’s fascias;

“ID Facility” the invoice discounting facility of up to £50 million to be made available pursuant to an invoice discount facility agreement; “Ordinary Shares” ordinary shares of £0.0002 each in the capital of the Company; “Placing” the conditional placing of the Placing Shares pursuant to the Placing

Agreement;

(15)

Company, the Directors, Zeus Capital and Investec relating to the Placing;

“Placing Price” 150 pence per Placing Share;

“Placing Shares” the 86,666,667 new Ordinary Shares to be issued by the Company pursuant to the Placing;

“RCF” a working capital revolving credit facility of up to £42.5 million, which is to be available to the Enlarged Group following completion of the Acquisition, of which £12.5 million may be utilised as a guarantee in respect of the obligations of the Group to its tobacco suppliers; “Resolutions” the resolutions contained in the notice of the General Meeting set out

in the Admission Document;

“Sellers” Herford Cellars Limited and Punch Taverns (Finco) Limited; “Software Condition” transfer of software licences used by the Matthew Clark Group, to

the Matthew Clark Group where such licences have been granted to the Accolade Wines group;

“Taxation Deed” the taxation deed to be entered into on completion of the Acquisition Agreement between (1) Conviviality Brands (2) Hertford Cellars Limited and Punch Taverns (Finco) Limited;

“Term and RCF Agreement” the facility agreement dated 7 September 2015 pursuant to which the Banks will make available the Term Loan Facilities, as well as the RCF, details of which are set out the Admission Document; “Term Loan Facilities” senior term loan facilities of £80 million to be used to part-fund the

Acquisition, details of which are set out in the Admission Document; and

“Warrant” the right granted by the Company in July 2013 to Zeus Capital to subscribe for 1,334,000 Ordinary Shares at a price of £1 per Ordinary Share.

References

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