Recommended Proposals for the Acquisition of Care UK plc

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Summary

• The board of Warwick Bidco and the Independent Directors of Care UK are pleased to announce the terms of unanimously recommended Proposals for the acquisition of the entire issued and to be issued share capital of Care UK.

• Under the terms of the Proposals, each Care UK Shareholder holding Care UK Shares at the Scheme Record Time will be entitled to receive 450 pence in cash per Care UK Share.

• The Proposals value the entire issued and to be issued share capital of Care UK at approximately £281 million and represent:
  • a premium of 51.3 per cent. to the Closing Price of 297.5 pence per Care UK Share on 29 September 2009 (being the last Business Day prior to the commencement of the Offer Period);
  • a premium of 58.7 per cent. to the Closing Price of 283.5 pence per Care UK Share (being the average volume-weighted Closing Price for the one month ended on 29 September 2009); and
  • a premium of 9.2 per cent. to the Closing Price of 412.25 pence per Care UK Share on 2 March 2010 (being the last Business Day prior to the date of this announcement).

• The Proposals are to be effected by means of a Court sanctioned scheme of arrangement of Care UK, which is expected to become Effective by the end of April 2010.

• Warwick Bidco is a newly incorporated company formed at the direction of Bridgepoint Europe IV Fund for the purpose of implementing the Proposals and forms part of the Warwick Bidco Group.

• In order to become Effective, the Proposals must, amongst other things, be approved by the requisite majorities of Care UK Shareholders present (in person or by proxy) and entitled to vote at the Court Meeting and the Care UK General Meeting.

• Upon the Proposals becoming Effective, the members of the Executive Management Team (being Mike Parish, Paul Humphreys, Doug Umbers and Mark Hunt) will invest approximately £1.8 million in total into the Warwick Bidco Group. Those members of the Executive Management Team who receive consideration pursuant to the Proposals will fund their investment by reinvesting approximately 58 per cent. of their net proceeds.

• Upon the Proposals becoming Effective, John Nash (currently the Chairman of Care UK) will reinvest £3 million of the £20.2 million cash proceeds that he will realise from his current investment in Care UK, into the Warwick Bidco Group. Following the Proposals becoming Effective, John Nash will be engaged by the Warwick Bidco Group on a consultancy basis to provide strategic advice to the business.

• As a result of the proposed Management Team Arrangements, neither the Executive Management Team, nor John Nash, nor Warwick Bidco, nor their connected persons or related trusts will be entitled to vote at the Court Meeting or on the Ordinary Resolutions.

• Warwick Bidco has received irrevocable commitments or letters of intent to vote in favour of the Scheme from the Independent Directors and certain other Care UK Shareholders in respect of Care UK Shares representing approximately 21.6 per cent. of the Care UK Shares entitled to vote at the Court Meeting and further irrevocable undertakings to vote in favour of the Special Resolution from the Management Team representing approximately 8.1 per cent. of Care UK's existing issued share capital.

• The Independent Directors of Care UK, who have been so advised by Investec, consider the Proposals to be fair and reasonable. In providing advice to the Independent Directors, Investec has taken into account the commercial assessments of the Independent Directors.

Accordingly, the Independent Directors intend unanimously to recommend that Care UK Shareholders vote in favour of the resolutions relating to the Proposals at the Court Meeting and the Care UK General Meeting as the Independent Directors have irrevocably undertaken to do in respect of their own beneficial shareholdings (or the shareholdings they control) totalling 21,954 Care UK Shares (representing approximately 0.04 per cent. of the Care UK Shares entitled to vote on the Special Resolution and approximately 0.04 per cent. of the Care UK Shares entitled to vote at the Court Meeting and on the Ordinary Resolutions). Further details of these irrevocable commitments are set out in paragraph 11 below and in Appendix 3.

Commenting on the Proposals, Jamie Wyatt, director responsible for Bridgepoint's UK healthcare investment activity, said:

"Today's offer is a fair one that comes with the unanimous recommendation of the Independent Directors of Care UK to the Care UK Shareholders, and which will allow Care UK to accelerate growth and undertake selective acquisitions in a way that it was unable to as a quoted business."

Commenting on the Proposals, Michael Averill, the Senior Independent Director of Care UK, said:

"The Proposals represent an opportunity for Care UK Shareholders to realise their entire investment in Care UK in cash at a premium to the current Care UK Share price. Moreover, the Proposals fairly reflect Care UK's risk adjusted future growth prospects."