4 April RECOMMENDED CASH OFFER for CAVANAGH GROUP PLC. Summary

Transcription

1 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION 4 April 2011 Summary RECOMMENDED CASH OFFER for CAVANAGH GROUP PLC The Boards of Close Brothers Group plc ("Close Brothers") and Cavanagh Group plc ("Cavanagh") announce that they have agreed the terms of a recommended cash offer to be made by Close Asset Management Holdings Limited ("CAMHL"), a subsidiary of Close Brothers, for the entire issued and to be issued share capital of Cavanagh. Cavanagh is an AIM quoted independent financial adviser ("IFA") with eight offices nationwide and approximately 60 advisers. Cavanagh has private client and corporate assets in excess of 2 billion, and CAMHL's assessment is that approximately 1.5 billion of these are revenue-generating. The Offer is 220 pence in cash for each Cavanagh Share and values the entire issued and to be issued share capital of Cavanagh at approximately 26.2 million, net of expected share option proceeds, which equates to approximately 1.7 per cent. of Cavanagh's revenue-generating client assets. Close Brothers is a UK-based financial services group listed on the London Stock Exchange, with a market capitalisation of approximately 1.2 billion. It operates through three divisions: Banking, Securities and Asset Management. Close Brothers' Asset Management division ("Close Asset Management") provides advice and wealth and asset management services to private and institutional clients. The proposed acquisition of Cavanagh is in line with Close Asset Management's strategy to create a high growth wealth and asset management business in the UK. It follows the acquisition of Chartwell Group Limited, a Bristol based IFA, in September 2010, and Allenbridge Group plc in February 2011, and is intended: to increase significantly the number of financial advisers within Close Asset Management, add further scale to its personal financial planning service and further enhance the depth of management experience; to accelerate further Close Asset Management's growth through the acquisition of additional clients and private client assets; to enhance Close Asset Management's network of regional offices across the UK, providing it with a strong presence in Scotland and the South East; to enable Close Brothers to leverage its asset management proposition to deliver highquality investment management services and advice to Cavanagh clients; and to build a strong corporate channel business leveraging the experience and relationships both firms have in this sector.

2 The proposed transaction is not expected to have a material impact on Close Brothers' earnings in the 2011 or 2012 financial years. CAMHL has received irrevocable undertakings to accept, or procure the acceptance of, the Offer in respect of: 4,169,893 Cavanagh Shares in aggregate in which the Cavanagh Directors have a beneficial interest, representing approximately 36.0 per cent. of the issued share capital of Cavanagh; and 1,627,595 Cavanagh Shares in aggregate in which certain other Shareholders have a beneficial interest, representing approximately 14.0 per cent. of the issued share capital of Cavanagh. In addition, the Cavanagh Management Team of Andrew Fay, Simon Redgrove, Neill Millard and Charles Gillespie have each agreed, together with certain other employees, to exchange 50 per cent. of the consideration to which they are entitled under the terms of the Offer, net of tax (in the case of certain individuals) and certain other financial commitments, for Close Brothers Shares. This results in an aggregate number of Cavanagh Shares to be exchanged pursuant to the Management Arrangements of 3,142,601, representing approximately 27.1 per cent. of the issued share capital of Cavanagh. Based on the Closing Price of Close Brothers on 31 March 2011 of 845 pence per share, the value per Cavanagh Share exchanged in this manner is 220 pence, being equivalent to the Offer price. Accordingly, the aggregate number of Cavanagh Shares in respect of which either irrevocable undertakings have been received or which are to be exchanged pursuant to the Management Arrangements is, in aggregate, 8,940,089, representing approximately 77.1 per cent. of the issued share capital of Cavanagh. The Offer is conditional, among other things, upon the passing of the Resolution to approve the Management Arrangements at a General Meeting of Cavanagh and regulatory approval from the FSA. The Independent Directors of Cavanagh, who have been so advised by Brewin Dolphin, consider the terms of the Offer to be fair and reasonable. Accordingly, the Independent Directors intend unanimously to recommend that Shareholders accept the Offer and that Independent Shareholders vote in favour of the Resolution at the General Meeting. Commenting on the Offer, Preben Prebensen, Chief Executive of Close Brothers, said: "This acquisition represents a further step in the execution of our strategy to build a high quality private client offering and to become a leader in UK wealth and asset management. It will significantly extend our asset base and client reach and our capabilities in servicing advice-seeking clients. We look forward to welcoming the Cavanagh team into the group." Commenting on the Offer, Paul Sinnett, Chairman of Cavanagh said: The price offered by Close reflects the value created over the past 15 years through the dedication of the staff and management team. The acquisition of Cavanagh by Close represents the logical next step in the continued development of the Cavanagh business and will benefit both our clients and employees. The management team look forward to working with their Close Asset Management colleagues in continuing to grow the business in the future.

3 Enquiries CAMHL and Close Brothers Sophie Ameln Gillingham Investor Relations Close Brothers Debbie Sager Investor Relations Close Brothers Robert Morgan Corporate Communications Close Brothers Anthony Silverman Media Relations Maitland Gleacher Shacklock (financial adviser to CAMHL and Close Brothers) Angus Russell Gleacher Shacklock Keith Lawrence Gleacher Shacklock Cavanagh Andrew Fay, Chief Executive Officer Cavanagh Brewin Dolphin (nominated adviser and financial adviser to Cavanagh) Mark Brady Brewin Dolphin Sean Wyndham-Quin Brewin Dolphin This summary should be read in conjunction with, and is subject to, the full text of the following announcement, including the Appendices. The conditions to and further terms of the Offer are set out in Appendix 1. Additional information is set out in Appendix 2, including the sources and bases of certain information contained in this announcement (Part A) and details of the irrevocable undertakings received by CAMHL in relation to the Offer (Part B). Definitions and terms used in this announcement are set out in Appendix 3. Gleacher Shacklock LLP, which is authorised and regulated in the United Kingdom by the Financial Services Authority for investment business activities, is acting exclusively as financial adviser to CAMHL and Close Brothers and no one else in connection with the Offer and will not be responsible to anyone other than CAMHL and Close Brothers for providing the protections afforded to clients of Gleacher Shacklock LLP or for providing advice in relation to the Offer or any other matters referred to in this announcement. Brewin Dolphin Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority for investment business activities, is acting exclusively as nominated adviser and financial adviser to Cavanagh and no one else in connection with the Offer and will not be responsible to anyone other than Cavanagh for providing the protections afforded to clients of Brewin Dolphin Limited or for providing advice in relation to the Offer or any other matters referred to in this announcement. Overseas jurisdictions The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore persons 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. In particular, this announcement is not for publication or distribution, directly or indirectly, to US

4 persons or into the United States (including its territories and possessions, any state of the United States and the District of Colombia), Canada, Australia or Japan. This announcement has been prepared in accordance with English Law and the Code and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England. This announcement is not intended to, and does not, constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Offer or otherwise. The Offer will be made solely through the Offer Document, which will contain the full terms and conditions of the Offer, including details of how to accept the Offer and vote at the General Meeting. Any voting decision, acceptance or other response to the Offer should be made only on the basis of information in the Offer Document. The Offer is not and will not be made, directly or indirectly, in or into, or by use of the mails, or by any means or instrumentality (including, without limitation, by means of telephone, facsimile, telex, internet or other forms of electronic communication) of interstate or foreign commerce of, or any facilities of a securities exchange of, the United States, Canada, Australia or Japan, and the Offer will not be capable of acceptance by any such use, means, instrumentality or facility or from within the United States, Canada, Australia or Japan. Accordingly, unless otherwise determined by CAMHL, copies of this announcement and any other document relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise distributed or sent in or into the United States, Canada, Australia or Japan and persons receiving such documents (including custodians, nominees and trustees) must not distribute or send them in, into or from such jurisdictions as doing so may make invalid any purported acceptance of the Offer by persons in any such jurisdiction. Cautionary note regarding forward-looking statements This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Cavanagh Group and Close Brothers Group and certain plans and objectives of the boards of directors of Cavanagh, CAMHL and Close Brothers. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words of similar meaning. These statements are based on assumptions and assessments made by the boards of directors of Cavanagh, CAMHL and Close Brothers in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe appropriate. By their nature, forward-looking statements involve risk and uncertainty, and the factors described in the context of such forward-looking statements in this document could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements. Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this document. None of Cavanagh, CAMHL and Close Brothers assume any obligation to update or correct the information contained in this document, whether as a result of new information, future events or otherwise, except to the extent legally required. The statements contained in this announcement are made as at the date of this announcement, unless some other time is specified in relation to them, and service of this announcement shall not give rise to any implication that there has been no change in the facts set out in this announcement since such date. Nothing contained in this announcement shall be deemed to be a forecast, projection or estimate of the future financial performance of the Cavanagh Group or Close Brothers Group except where expressly stated.

5 Dealing disclosure requirements Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any paper 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 paper 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 paper 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 paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure. Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper 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 paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3. Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4). Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0) Publication on Close Brothers website A copy of this announcement will be available free of charge, subject to certain restrictions relating to persons resident in restricted jurisdictions, for inspection on the Close Brothers website at Neither the contents of Close Brothers' website nor the contents of any website accessible from hyperlinks on such website (or any other website) is incorporated into, or forms part of, this announcement nor, unless previously published by means of a recognised information service, should any such content be relied upon in reaching a decision regarding the matters referred to in this document.

6 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION 4 April Introduction RECOMMENDED CASH OFFER for CAVANAGH GROUP PLC The Boards of Close Brothers Group plc ("Close Brothers") and Cavanagh Group plc ("Cavanagh") announce that they have agreed the terms of a recommended cash offer to be made by Close Asset Management Holdings Limited ("CAMHL"), a subsidiary of Close Brothers, for the entire issued and to be issued share capital of Cavanagh, an AIM quoted independent financial adviser ("IFA") with private client and corporate assets in excess of 2 billion. 2. The Offer The Offer, which will be made on and subject to the terms and conditions set out in Appendix 1 to this announcement and the further terms and conditions to be set out in the Offer Document and the Form of Acceptance, will be made by CAMHL on the following basis: for each Cavanagh Share 220 pence in cash The Offer values the entire issued and to be issued share capital of Cavanagh at approximately 26.2 million, net of expected share option proceeds, which equates to approximately 1.7 per cent. of Cavanagh's revenue-generating client assets, which CAMHL assesses to be approximately 1.5 billion. 3. Irrevocable undertakings to accept the Offer CAMHL has received irrevocable undertakings to accept, or procure the acceptance of, the Offer in respect of: (a) (b) 4,169,893 Cavanagh Shares in aggregate in which the Cavanagh Directors have a beneficial interest, representing approximately 36.0 per cent. of the issued share capital of Cavanagh; and 1,627,595 Cavanagh Shares in aggregate in which certain other Shareholders have a beneficial interest, representing approximately 14.0 per cent. of the issued share capital of Cavanagh. In addition, the Management Team of Andrew Fay, Simon Redgrove, Neill Millard and Charles Gillespie have each agreed, together with certain other employees, to exchange 50 per cent. of the consideration to which they are entitled under the terms of the Offer, net of tax (in the case of certain individuals) and certain other financial commitments, for Close Brothers Shares. The aggregate number of Cavanagh Shares to be exchanged pursuant to the Management Arrangements is 3,142,601, representing approximately 27.1 per cent. of the issued share capital of Cavanagh. Based on the Closing Price of Close Brothers Shares on 31 March 2011 of 845 pence per share, the value per Cavanagh Share exchanged in this manner is 220 pence, being equivalent to the Offer price. Accordingly, the aggregate number of Cavanagh Shares in respect of which either irrevocable

7 undertakings have been received or which are to be exchanged pursuant to the Management Arrangements is, in aggregate, 8,940,089, representing approximately 77.1 per cent. of the issued share capital of Cavanagh. Further details of the irrevocable undertakings are contained in Part B of Appendix 2 to this announcement. Further details of the Management Arrangements are set out in paragraph 14 below. 4. Recommendation In light of their interests pursuant to the Management Arrangements, Andrew Fay, Simon Redgrove and Charles Gillespie have absented themselves from all deliberations of the Cavanagh Board in connection with the Offer, and a committee of the Board, comprising the Independent Directors, has been established for the purpose of considering and making the recommendation in relation to the Offer. The Independent Directors of Cavanagh, who have been so advised by Brewin Dolphin, consider the terms of the Offer to be fair and reasonable, and intend unanimously to recommend that Shareholders accept the Offer and that Independent Shareholders vote in favour of the Resolution at the General Meeting. The Cavanagh Directors have, in respect of their respective entire interests in Cavanagh Shares, either irrevocably undertaken to accept the Offer or agreed to exchange such shares for Close Brothers Shares pursuant to the Management Arrangements. Such shares represent in aggregate 6,105,952 Cavanagh Shares and approximately 52.7 per cent. of the issued share capital of Cavanagh. 5. Background to and reasons for the Offer CAMHL believes that the acquisition of Cavanagh is consistent with Close Asset Management's strategy to create a high growth wealth and asset management business in the UK. It follows the acquisition of Chartwell Group Limited, a Bristol based IFA, in September 2010, and Allenbridge Group plc in February In particular, the acquisition of Cavanagh is intended: (a) (b) (c) (d) (e) to increase significantly the number of financial advisers within Close Asset Management, add further scale to its personal financial planning service and further enhance the depth of management experience; to accelerate further Close Asset Management's growth through the acquisition of additional clients and private client assets; to enhance Close Asset Management's network of regional offices across the UK, providing it with a strong presence in Scotland and the South East; to enable Close Brothers to leverage its asset management proposition to deliver highquality investment management services and advice to Cavanagh clients; and to build a strong corporate channel business leveraging the experience and relationships both firms have in this sector. 6. Background to and reasons for the Independent Directors recommending the Offer Background to the Offer Cavanagh was founded in 1996 by Andrew Fay, Simon Redgrove and Neill Millard as a firm of Independent Financial Advisers based in the South East and initially focused on providing independent financial planning solutions to the legal sector. In October 2001, Cavanagh's ordinary shares were admitted to trading on the AIM. In 2003, Cavanagh acquired Ernst & Young Financial

8 Management Limited. Due to its size, this acquisition was classed under the AIM Rules as a reverse takeover which meant that it was required to be approved by shareholders and that an application had to be made to re-list Cavanagh's shares on AIM. Cavanagh now has a national network of eight offices and approximately 60 advisers and provides independent advice and investment management services to both private clients and businesses. The Cavanagh Directors believe that, in the context of ongoing regulatory change, including the impact of the FSA's Retail Distribution Review and the expected continued increase in the regulatory burden, the most successful IFAs in the future will be those who have sufficient scale and resources to be able to offer high quality and cost-efficient advisory services that are supported by a robust, scaleable operating platform. Reasons for recommending the Offer The Independent Directors believe that the Offer is strategically the appropriate next step for Cavanagh and will benefit both its clients and employees. Cavanagh's Directors believe there is a strong fit between Cavanagh and Close Asset Management, both in terms of their strategies and product offerings, and that Cavanagh will benefit from the additional distribution channels available to it as part of the Close Brothers Group. The Cavanagh Directors also believe that the support and backing from a financial institution of Close Brothers' size and strength will mean that Cavanagh is better placed to continue to grow its client base, with the ability to offer its clients a high quality and cost effective advisory proposition and a superior investment management proposition. Cavanagh's Directors also expect the acquisition to give rise to additional attractive career prospects for Cavanagh employees as a result of being part of a larger, more profitable group. The Independent Directors believe that the terms of the Offer, entitling Shareholders to receive 220 pence in cash for each Cavanagh Share, are attractive. The Independent Directors believe that the Offer represents significant value for all Cavanagh Shareholders and, given the limited liquidity in Cavanagh shares, provides an opportunity for Shareholders fully to monetise their shareholdings at an attractive price. 7. Information relating to Close Brothers and CAMHL Information relating to Close Brothers Close Brothers is a UK based financial services group listed on the London Stock Exchange, with a market capitalisation of approximately 1.2 billion. It operates through three divisions: Banking, Securities and Asset Management. For the year ended 31 July 2010, Close Brothers reported operating income from continuing operations of million (2009: million) and profit before tax from continuing operations of 99.3 million (2009: 88.3 million). Net assets at 31 July 2010 were million (2009: million). Information relating to Close Asset Management Close Brothers' Asset Management division provides advice and wealth and asset management services to private and institutional clients and had total Funds under Management of 8.3 billion at 31 January For the year ended 31 July 2010, Close Asset Management reported operating income from continuing operations of 97.0 million (2009: 95.0 million), a loss before tax from continuing operations of 3.2 million (2009: 11.4 million) and an adjusted operating profit from continuing operations before impairment losses on goodwill and exceptional expenses of 3.3 million (2009: 12.0 million). Net assets at 31 July 2010 were million (2009: million).

9 8. Cavanagh current trading and prospects In the year ended 31 December 2009, Cavanagh reported profit before tax of 0.8 million on revenues of 16.1 million. Cavanagh's net assets at 31 December 2009 were 3.5 million. On 20 September 2010, Cavanagh announced its unaudited half year results for the six months ended 30 June In that announcement, Cavanagh reported profit before tax of 0.2 million on revenues of 7.7 million. Cavanagh's net assets at 30 June 2010 were 3.6 million. In that announcement Cavanagh stated that: These results should be considered against the continued uncertainties in global financial markets and the fragile improvement in the UK economy together with the Board's commitment to develop Cavanagh's proposition to be RDR compliant well in advance of the 2012 deadline. Indeed, we have made a concerted effort to accelerate our business model to be less dependent on up-front commission as now over 65 per cent. of the Group's revenues are being generated from fees and recurring income. The reduction in both revenue and margins is largely a result of increased investment in our long term proposition and longer lead in periods for corporate work, which is a reflection of the distraction caused by the state of the current economic landscape. The Board considers that we are in a period which requires Cavanagh to balance the need for development against profit and we have accepted that to achieve our objectives in the new RDR world we may have to sacrifice some short term profitability as our priority is to continue to improve the model so that we can provide the range of services which we believe our clients require. The Cavanagh Directors believe that this statement continues to be true. 9. Further details of the Offer The Cavanagh Shares to be acquired under the Offer will be acquired fully paid with full title guarantee and free from all liens, equities, charges, encumbrances, options, rights of pre-emption and any other third party rights and interests of any nature whatsoever and together with all rights now or subsequently attaching or accruing to them including, without limitation, voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid after the date of the Offer. The Offer will extend to all Cavanagh Shares unconditionally allotted or issued and fully paid on the date of the Offer and any Cavanagh Shares which are unconditionally allotted or issued fully paid (or credited as fully paid) (including to satisfy the exercise of options or the vesting of awards granted under the Cavanagh Share Incentive Schemes) before the time and date on which the Offer ceases to be open for acceptance or such earlier time and date as CAMHL may, subject to the Code, decide, not being earlier than the date on which the Offer becomes unconditional as to acceptances. 10. Financing the Offer Full implementation of the Offer (assuming the exercise of options in respect of 676,162 Shares in accordance with the Cavanagh Share Incentive Schemes) would result in a maximum payment by CAMHL of approximately 20.1 million in cash. The cash consideration payable to Shareholders pursuant to the Offer will be satisfied out of Close Brothers' existing cash resources. Gleacher Shacklock, financial adviser to CAMHL and Close Brothers, is satisfied that the necessary financial resources are available to CAMHL to enable it to satisfy the cash consideration payable as a result of full acceptance of the Offer.

10 11. Cavanagh Share Incentive Schemes The Offer extends to all Cavanagh Shares unconditionally allotted or issued while the Offer remains open for acceptance (or until such earlier time and date as CAMHL may, subject to the Code, determine), including any Cavanagh Shares which are unconditionally allotted or issued and fully paid (or credited as fully paid) pursuant to the exercise of options or the vesting of awards granted under the Cavanagh Share Incentive Schemes. Participants in the Cavanagh Share Incentive Schemes will be contacted regarding the effect of the Offer on their rights under these schemes and appropriate proposals will be made to them in due course. 12. Non-Solicitation Agreement Cavanagh has undertaken, amongst other things, not to, and to use its best endeavours to procure that no member of the Cavanagh Group nor any related person will, directly or indirectly, solicit any competing proposal from any person. Cavanagh has also undertaken to notify Close Brothers promptly if any approach is made to it regarding any competing proposal with a third party. 13. Employees and locations CAMHL attaches great importance to the skills and experience of the existing management and employees of Cavanagh, and has given assurances to the Cavanagh Directors that, following the offer becoming or being declared unconditional in all respects, the existing employment rights, including accrued pension rights, of all employees will be fully safeguarded. CAMHL believes that, following the transaction, Cavanagh's management and employees will have greater opportunities for new challenges and development as a result of being part of a substantially larger group. CAMHL also expects Cavanagh's management and employees to play an important role in the enlarged business and intends to work with Cavanagh's management and employees following the completion of the Offer to optimise the integration of Cavanagh with CAMHL. CAMHL may need to address possible duplication of certain functions following completion, although it does not envisage any material change in the conditions of employment of Cavanagh employees and has no current intention to change the location of Cavanagh's main places of business. As part of the integration of the businesses, it is expected that Cavanagh employees will be transferred into a CAMHL entity in due course. It is proposed that following completion of the Offer, CAMHL will appoint Andrew Fay as Head of Wealth Management Business Development, Simon Redgrove as Head of Personal Advice and Charles Gillespie as Head of Corporate Advice. Ian Henson, Cavanagh's Finance Director, will remain with Cavanagh for a period to support the integration process. However, it has been mutually agreed that he will leave the business once the handover has been completed. The non-executive directors of Cavanagh, Paul Sinnett and Paul Hogarth, will resign from the Board of Cavanagh following the Offer becoming unconditional in all respects. 14. Arrangements with the Management Team and others Management Arrangements The Cavanagh Management Team of Andrew Fay, Simon Redgrove, Neill Millard and Charles Gillespie have each agreed pursuant to the Share Exchange Agreement, together with certain other

11 employees, to exchange 50 per cent. of the consideration to which they are entitled under the terms of the Offer, net of tax (in the case of certain individuals) and certain other financial commitments, for new Close Brothers Shares. These shares will be issued under Close Brothers' existing share allotment authorities. Under the Management Arrangements, Andrew Fay, Simon Redgrove and Neill Millard have each agreed to hold their Close Brothers Shares for a period of at least three years from the date of issue, while Charles Gillespie, Mark Liley and Gordon Sutherland have agreed to hold their Close Brothers Shares for a period of at least 18 months from the date of issue (in each case subject to customary exceptions). Non-solicitation and non-competition undertakings will apply to the Cavanagh Management team. Further details in respect of the Management Arrangements are set out in Part B of Appendix 2 to this announcement. Brewin Dolphin considers that the terms of the Management Arrangements are fair and reasonable, so far as the Independent Shareholders are concerned. Incentivisation arrangements As mentioned above, it is proposed that, following the completion of the Offer, CAMHL will appoint Andrew Fay as Head of Wealth Management Business Development, Simon Redgrove as Head of Personal Advice and Charles Gillespie as Head of Corporate Advice. Details of their new service agreements will be set out in the Offer Document. In addition, Mark Liley, a self-employed Cavanagh adviser, has agreed to move onto a contract of employment with Cavanagh following completion of the Offer. Brewin Dolphin considers that the terms of the incentivisation arrangements are fair and reasonable, so far as the Independent Shareholders are concerned. 15. General Meeting The Offer will be conditional on, inter alia, approval of the Management Arrangements by Independent Shareholders voting on a poll for the purposes of Rule 16 of the Code. A General Meeting of Cavanagh will be convened at which the Resolution to approve the Management Arrangements will be proposed. The Independent Directors intend unanimously to recommend that Independent Shareholders vote in favour of the Resolution at the General Meeting. 16. Compulsory acquisition, delisting and cancellation of trading in Cavanagh Shares If CAMHL receives acceptances under the Offer in respect of, and/or otherwise acquires, both 90 per cent. or more in value of the Cavanagh Shares to which the Offer relates and 90 per cent. or more of the voting rights carried by those shares and assuming that all of the other conditions of the Offer have been satisfied or waived (if capable of being waived), CAMHL intends to exercise its rights in accordance with sections 974 to 991 of the 2006 Act to acquire compulsorily the remaining Cavanagh Shares on the same terms as the Offer. The Cavanagh Shares which are to be exchanged for Close Brothers Shares pursuant to the Management Arrangements are not shares to which the Offer relates. Following the Offer becoming or being declared unconditional in all respects and subject to any applicable requirements of the AIM Rules, CAMHL intends to procure that Cavanagh applies to the London Stock Exchange for the cancellation of trading in the Cavanagh Shares on AIM. It is anticipated that such cancellation will take effect no earlier than 20 Business Days after the Offer becomes or is declared unconditional in all respects (provided that CAMHL has acquired, or agreed to acquire, issued share capital carrying 75 per cent. of the voting rights of Cavanagh). Delisting and the cancellation of trading of Cavanagh Shares will significantly reduce the liquidity and marketability of any Cavanagh Shares not acquired by CAMHL. It is also intended that, following the Offer becoming or being declared unconditional in all respects,

12 Cavanagh will be re-registered as a private company. 17. Disclosure of interests in Cavanagh Shares CAMHL confirms that it is on the date of this announcement making an Opening Position Disclosure, setting out the details required to be disclosed by it under Rule 8.1(a) of the Code. 18. General The Offer Document will be sent to Cavanagh Shareholders (other than certain Overseas Shareholders) as soon as possible and in any event within 28 days of this announcement (or such longer period as the Panel may permit). The Offer Document will contain a notice convening a General Meeting of Cavanagh at which the Resolution will be put to Shareholders. Enquiries CAMHL and Close Brothers Sophie Ameln Gillingham Investor Relations Close Brothers Debbie Sager Investor Relations Close Brothers Robert Morgan Corporate Communications Close Brothers Anthony Silverman Media Relations Maitland Gleacher Shacklock (financial adviser to CAMHL and Close Brothers) Angus Russell Gleacher Shacklock Keith Lawrence Gleacher Shacklock Cavanagh Andrew Fay, Chief Executive Officer Cavanagh Brewin Dolphin (nominated adviser and financial adviser to Cavanagh) Mark Brady Brewin Dolphin Sean Wyndham-Quin Brewin Dolphin Gleacher Shacklock LLP, which is authorised and regulated in the United Kingdom by the Financial Services Authority for investment business activities, is acting exclusively as financial adviser to CAMHL and Close Brothers and no one else in connection with the Offer and will not be responsible to anyone other than CAMHL and Close Brothers for providing the protections afforded to clients of Gleacher Shacklock LLP or for providing advice in relation to the Offer or any other matters referred to in this announcement. Brewin Dolphin Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority for investment business activities, is acting exclusively as nominated adviser and financial adviser to Cavanagh and no one else in connection with the Offer and will not be responsible to anyone other than Cavanagh for providing the protections afforded to clients of Brewin Dolphin Limited or for providing advice in relation to the Offer or any other matters referred to in this announcement.

13 Overseas jurisdictions The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore persons 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. In particular, this announcement is not for publication or distribution, directly or indirectly, to US persons or into the United States (including its territories and possessions, any state of the United States and the District of Colombia), Canada, Australia or Japan. This announcement has been prepared in accordance with English Law and the Code and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England. This announcement is not intended to, and does not, constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Offer or otherwise. The Offer will be made solely through the Offer Document, which will contain the full terms and conditions of the Offer, including details of how to accept the Offer and vote at the General Meeting. Any voting decision, acceptance or other response to the Offer should be made only on the basis of information in the Offer Document. The Offer is not and will not be made, directly or indirectly, in or into, or by use of the mails, or by any means or instrumentality (including, without limitation, by means of telephone, facsimile, telex, internet or other forms of electronic communication) of interstate or foreign commerce of, or any facilities of a securities exchange of, the United States, Canada, Australia or Japan, and the Offer will not be capable of acceptance by any such use, means, instrumentality or facility or from within the United States, Canada, Australia or Japan. Accordingly, unless otherwise determined by CAMHL, copies of this announcement and any other document relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise distributed or sent in or into the United States, Canada, Australia or Japan and persons receiving such documents (including custodians, nominees and trustees) must not distribute or send them in, into or from such jurisdictions as doing so may make invalid any purported acceptance of the Offer by persons in any such jurisdiction. Cautionary note regarding forward-looking statements This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Cavanagh Group and Close Brothers Group and certain plans and objectives of the boards of directors of Cavanagh, CAMHL and Close Brothers. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words of similar meaning. These statements are based on assumptions and assessments made by the boards of directors of Cavanagh, CAMHL and Close Brothers in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe appropriate. By their nature, forward-looking statements involve risk and uncertainty, and the factors described in the context of such forward-looking statements in this document could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements.

14 Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this document. None of Cavanagh, CAMHL and Close Brothers assume any obligation to update or correct the information contained in this document, whether as a result of new information, future events or otherwise, except to the extent legally required. The statements contained in this announcement are made as at the date of this announcement, unless some other time is specified in relation to them, and service of this announcement shall not give rise to any implication that there has been no change in the facts set out in this announcement since such date. Nothing contained in this announcement shall be deemed to be a forecast, projection or estimate of the future financial performance of the Cavanagh Group or Close Brothers Group except where expressly stated. Dealing disclosure requirements Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any paper 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 paper 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 paper 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 paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure. Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper 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 paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3. Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4). Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel s website at including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel s Market Surveillance Unit on +44 (0)

15 Publication on Close Brothers website A copy of this announcement will be available free of charge, subject to certain restrictions relating to persons resident in restricted jurisdictions, for inspection on the Close Brothers website at Neither the contents of Close Brothers' website nor the contents of any website accessible from hyperlinks on such website (or any other website) is incorporated into, or forms part of, this announcement nor, unless previously published by means of a recognised information service, should any such content be relied upon in reaching a decision regarding the matters referred to in this document.

16 APPENDIX 1 CONDITIONS TO AND CERTAIN FURTHER TERMS OF THE OFFER The Offer will be conditional upon: PART A CONDITIONS TO THE OFFER (a) valid acceptances of the Offer being received (and not, where permitted, withdrawn) by 3.00 p.m. on the first closing date of the Offer (or such later time(s) and/or date(s) as CAMHL may, subject to the rules of the Code, decide) in respect of not less than 90 per cent. (or such lesser percentage as CAMHL may decide) in nominal value of the Cavanagh Shares to which the Offer relates, and not less than 90 per cent. (or such lesser percentage as CAMHL may decide) of the voting rights carried by the Cavanagh Shares to which the Offer relates, provided that this condition will not be satisfied unless CAMHL shall have acquired or agreed to acquire, whether pursuant to the Offer or otherwise, Cavanagh Shares carrying in aggregate more than 50 per cent. of the voting rights then exercisable at a general meeting of Cavanagh including, to the extent (if any) required by the Panel, any voting rights attaching to any Cavanagh Shares which are unconditionally allotted before the Offer becomes or is declared unconditional as to acceptances pursuant to the exercise of any outstanding conversion or subscription rights or otherwise. For the purposes of this condition: (i) (ii) Cavanagh Shares which have been unconditionally allotted shall be deemed to carry the voting rights which they will carry upon issue; and the expressions "Cavanagh Shares to which the Offer relates" and "associates" shall be construed in accordance with sections 974 to 991 of the Companies Act 2006; (b) (c) the passing at the General Meeting of the Resolution; either: (i) (ii) the FSA having notified in writing, to the satisfaction of the Offeror, any required consent in accordance with Part XII of the Financial Services and Markets Act 2000 (and any subordinate legislation made under it, or any applicable successor regulatory regime in the UK) ("FSMA") to the proposed acquisition of each UK authorised person in the wider Cavanagh Group by the Offeror in the manner contemplated by the Offer, such consent being either: (a) unconditional in all respects (save as to the period within which the change of control must occur) or (b) subject to conditions (other than as to timing) which, in the reasonable opinion of the Offeror, do not have and are not likely to have a material adverse effect on the Offeror or any UK authorised person in the wider Cavanagh Group (whether in terms of their actual or prospective financial or regulatory capital position or the manner in which they conduct their operations or in terms of the ownership of the Offeror or otherwise); or the period of 60 Business Days (excluding any interruption periods imposed by the FSA) having elapsed from the date of acknowledgment of receipt of a complete application by the FSA of the proposed acquisition of each UK authorised person in the wider Cavanagh Group by the Offeror without the FSA