Recommended Cash Acquisition of musicMagpie plc

Musicmagpie

02/10/2024 07:00

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RNS Number : 6210G  AO World plc  02 October 2024

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

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

FOR IMMEDIATE RELEASE

2 October 2024

RECOMMENDED CASH ACQUISITION

OF

MUSICMAGPIE PLC

BY

AO LTD

(a wholly-owned subsidiary of AO World PLC)

(to be implemented by way of a scheme of arrangement under Part 26 of the
Companies Act 2006)

Summary and highlights

·    The boards of directors of AO World PLC ("AO") and musicMagpie PLC
("musicMagpie") are pleased to announce that they have agreed the terms of a
recommended cash acquisition of the entire issued and to be issued share
capital of musicMagpie by AO Ltd ("AO Bidco"), a wholly-owned subsidiary of
AO.

·    It is intended that the Acquisition will be implemented by way of a
Court-sanctioned scheme of arrangement under Part 26 of the Companies Act
(although AO Bidco reserves the right to effect the Acquisition by way of a
Takeover Offer, subject to the consent of the Panel and the terms of the
Co-operation Agreement).

·    Under the terms of the Acquisition, each musicMagpie Shareholder will
be entitled to receive:

for each musicMagpie Share: 9.07 pence in cash (the "Consideration").

·    The Acquisition values the entire issued and to be issued share
capital of musicMagpie at approximately £9,982,105 on a fully diluted basis
and represents a premium of approximately:

o    58 per cent. to the Closing Price of 5.75 pence per musicMagpie Share
on 1 October 2024 (being the last Business Day before this announcement) (the
"Latest Practicable Date");

o    58 per cent. to the volume-weighted average Closing Price of 5.75
pence per musicMagpie Share for the one-month period ended on the Latest
Practicable Date; and

o    48 per cent. to the volume-weighted average Closing Price of 6.12
pence per musicMagpie Share for the three-month period ended on the Latest
Practicable Date.

·    With complementary business models focused online and on customer
service, AO believes the Acquisition will augment its capability and value
capture in the mobile and consumer technology categories.

Recommendation of musicMagpie Directors

·    The musicMagpie Directors, who have been so advised by Shore Capital
as to the financial terms of the Acquisition, consider the terms of the
Acquisition to be fair and reasonable. In providing advice to the musicMagpie
Directors, Shore Capital has taken into account the commercial assessments of
the musicMagpie Directors.

·    Accordingly, the musicMagpie Directors intend to recommend
unanimously that musicMagpie Shareholders vote (or procure votes) in favour of
the Scheme and the Resolutions as the musicMagpie Directors who are interested
in musicMagpie Shares have irrevocably undertaken to do (or procure to be
done) in respect of their interests (and, in the case of one musicMagpie
Director, those of a connected person)  in 13,240,760 musicMagpie Shares
representing, in aggregate, approximately 12.28 per cent. of musicMagpie's
total issued share capital (as at the Latest Practicable Date).

Irrevocable undertakings and letters of intent

·    In addition to the irrevocable undertakings from the musicMagpie
Directors referred to above, AO Bidco has received from Ian Storey, Walter
Gleeson, Stephen Richards, CSC Employee Benefit Trustee (Jersey) Limited in
its capacity as trustee of the Employee Benefit Trust, Northern Venture Trust
PLC, Northern 2 VCT PLC, Northern 3 VCT PLC, NV2 LP and NVM Nominees Limited
irrevocable undertakings to vote in favour of the Scheme and the Resolutions
in respect of 32,172,160 musicMagpie Shares in aggregate, representing
approximately 29.84 per cent. of musicMagpie's total issued share capital (as
at the Latest Practicable Date).

·    Accordingly, taken together, AO Bidco has received irrevocable
undertakings to vote in favour of the Scheme and the Resolutions in respect of
a total of 45,412,920 musicMagpie Shares, representing, in aggregate,
approximately 42.12 per cent. of the total issued share capital of musicMagpie
(as at the Latest Practicable Date).

·    Under the terms of all the irrevocable undertakings received by AO
Bidco, if the Acquisition is implemented by way of a Takeover Offer, the
relevant shareholders have also committed to accept the Takeover Offer.

·    In addition to the irrevocable undertakings given by the persons
named above, AO Bidco has also received a letter of intent to vote in favour
of the Scheme and the Resolutions from Schroder Investment Management Limited,
representing, in aggregate, approximately 11.84 per cent. of the total issued
share capital of musicMagpie (as at the Latest Practicable Date).

·    In aggregate therefore, AO Bidco has received irrevocable
undertakings and letters of intent to vote in favour of the Scheme and the
Resolutions in respect of a total of  58,174,776 musicMagpie Shares
representing approximately 54.0 per cent. of the total issued share capital of
musicMagpie (as at the Latest Practicable Date).

·    Further details of these irrevocable undertakings and letters of
intent, including the terms on which they cease to be binding, are set out in
Appendix 3 to this announcement.

Timetable and Conditions

·    It is intended that the Acquisition will be implemented by way of a
Court-sanctioned scheme of arrangement under Part 26 of the Companies Act
(although AO Bidco reserves the right to effect the Acquisition by way of a
Takeover Offer, subject to the consent of the Panel and the terms of the
Co-operation Agreement).

·    The Acquisition will be subject to the Conditions and terms set out
in Appendix 1 to this announcement, including, amongst other things, approvals
by the requisite majorities of musicMagpie Shareholders of the Scheme and the
Resolutions at the Court Meeting and General Meeting respectively, the receipt
of regulatory approvals from the FCA, the sanction of the Scheme by the Court
and to the full terms and conditions of the Acquisition which will be set out
in the Scheme Document.

·    The Scheme Document containing further information about the
Acquisition, an expected timetable of principal events, steps to be taken by
musicMagpie Shareholders, and the notices of the Meetings, together with the
accompanying Forms of Proxy will be published in due course. It is expected
that the Scheme Document will be published no later than 30 October 2024.

·    It is currently expected that the Acquisition will become Effective
during Q1 2025, subject to the satisfaction or (where applicable) waiver of
the Conditions and certain further terms set out in Appendix 1 to this
announcement.

Non-Executive Chair of AO, Geoff Cooper commented:

"The proposed acquisition of musicMagpie presents a strategic opportunity to
integrate one of the UK's leading mobile recommerce operators into our
portfolio. With highly complementary business models, this acquisition will
enable us to broaden our customer offerings while simultaneously advancing our
sustainability objectives. This alignment positions us to drive growth and
innovation in an increasingly environmentally-conscious market."

Chief Executive Officer of AO, John Roberts commented:

"To achieve our strategic ambition of becoming the destination for
electricals, it is crucial for AO to enhance its consumer tech offering. A
top-tier trade-in service will be essential, and musicMagpie represents a
significant enabler in unlocking value through our reverse supply chain.
Moreover, musicMagpie stands to leverage our existing supply channels, which
could lower its cost of acquisition and allow us to scale refurbished
technology with operational precision. musicMagpie's commitment to customer
satisfaction and its exceptional brand are closely aligned with our values,
and our shared cultures create a strong foundation for collaboration. I am
excited to welcome Steve and the musicMagpie team into the AO family and to
realise the potential that our combined efforts can unlock."

Non-Executive Chair of musicMagpie, Martin Hellawell commented:

"The musicMagpie Board is pleased to recommend AO's cash offer for
musicMagpie. AO's offer is the result of musicMagpie's extensive process to
seek an acquiror for the business and represents an opportunity for
shareholders to realise their holdings in full and in cash at a significant
premium to the prevailing share price. The musicMagpie Board believes
musicMagpie will benefit from being a part of the AO Group that has the scale
and reach to support musicMagpie's future growth and development."

Chief Executive Officer and Co-founder of musicMagpie, Steve Oliver commented:

"AO is a highly trusted consumer brand that shares our commitment to providing
a first-rate service for customers. I am very proud of the musicMagpie
business and the trusted brand that we have created, providing consumers with
a smart, sustainable and trusted way to buy, rent and sell refurbished
consumer technology and physical media products. We welcome the opportunity to
join the AO Group and believe it represents a natural custodian for
musicMagpie as part of the next stage of the business' development."

This summary should be read in conjunction with, and is subject to, the full
text of this announcement and the Appendices. The Acquisition will be subject
to the Conditions and other terms set out in Appendix 1 and to the full terms
and conditions which will be set out in the Scheme Document. Appendix 2
contains the bases of calculation and sources of certain information contained
in this announcement. Details of the irrevocable undertakings and letters of
intent received by AO Bidco in connection with the Acquisition are set out in
Appendix 3. Certain terms used in this announcement are defined in Appendix 4.

Enquiries:

 AO
 Mark Higgins, Chief Financial Officer                                           +44 (0)1204 672400
 Jefferies International Limited (Financial Adviser and Corporate Broker to AO)  +44 (0)20 7029 8000
 ( )Philip Noblet

 Thomas Bective

 Jordan Cameron

 Powerscourt (PR Adviser to AO)                                                  +44(0) 20 7250 1446

 Rob Greening                                                                    ao@powerscourt-group.com

 musicMagpie                                                                     +44 (0)870 479 2705
 Martin Hellawell, Non-Executive Chair

 Steve Oliver, Chief Executive Officer and Co-founder

 Matthew Fowler, Chief Financial Officer

 Shore Capital (Financial Adviser, Rule 3 Adviser, Nominated Adviser and Broker  +44 (0)20 7408 4090
 to musicMagpie)
 Mark Percy (Corporate Advisory)

 Malachy McEntyre (Corporate Broking)

 Daniel Bush (Corporate Advisory)

 Rachel Goldstein (Corporate Advisory)

 

Gibson, Dunn & Crutcher UK LLP is acting as legal adviser to AO and AO
Bidco in connection with the Acquisition.

Addleshaw Goddard LLP is acting as legal adviser to musicMagpie in connection
with the Acquisition.

The person responsible for making this announcement on behalf of AO is Julie
Finnemore (Company Secretary). The person responsible for making this
announcement on behalf of musicMagpie is Matthew Fowler (Company Secretary).

Inside information

This announcement contains inside information for the purposes of the Market
Abuse Regulation.

Further information

This announcement is for information purposes only and is not intended to, and
does not, constitute, or form any part of any offer, invitation or the
solicitation of an offer 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 Acquisition or otherwise, nor
shall there be any sale, issuance or transfer of securities of musicMagpie in
any jurisdiction in contravention of applicable law. The Acquisition will be
made and implemented solely pursuant to the terms of the Scheme Document (or
if the Acquisition is implemented by way of a Takeover Offer, the Offer
Document), which will contain the full terms and conditions of the
Acquisition, including details of how to vote in respect of the Acquisition.
Any vote in respect of, or other response to, the Acquisition should be made
only on the basis of the information contained in the Scheme Document (or if
the Acquisition is implemented by way of a Takeover Offer, the Offer
Document).

musicMagpie and AO Bidco will prepare the Scheme Document (or if the
Acquisition is implemented by way of a Takeover Offer, the Offer Document) to
be distributed to musicMagpie Shareholders. musicMagpie and AO Bidco urge
musicMagpie Shareholders to read the Scheme Document (or if the Acquisition is
implemented by way of a Takeover Offer, the Offer Document) when it becomes
available because it will contain important information relating to the
Acquisition.

This announcement does not constitute a prospectus, prospectus equivalent
document or an exempted document.

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
publication of this announcement shall not give rise to any implication that
there has been no change in the facts set forth in this announcement since
such date.

Disclaimers

This announcement does not constitute or form part of, and should not be
construed as, any public offer under any applicable legislation or an offer to
sell or solicitation of any offer to buy any securities or financial
instruments or any advice or recommendation with respect to such securities or
other financial instruments.

Jefferies International Limited ("Jefferies"), which is authorised and
regulated by the Financial Conduct Authority in the United Kingdom, is acting
exclusively for AO and AO Bidco and no one else in connection with the matters
set out in this announcement and will not regard any other person as its
client in relation to such matters and will not be responsible to anyone other
than AO and AO Bidco for providing the protections afforded to clients of
Jefferies nor for providing advice in relation to the contents of, or any
matter referred to in, this announcement or any transaction or arrangement
referred to herein. Neither Jefferies nor any of its subsidiaries or
affiliates owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of Jefferies in connection with
this announcement, any statement contained herein, any transaction or
arrangement referred to herein, or otherwise.

Shore Capital and Corporate Limited and Shore Capital Stockbrokers Limited
(either individually or collectively "Shore Capital"), which are authorised
and regulated by the Financial Conduct Authority in the United Kingdom, are
acting exclusively for musicMagpie and no one else in connection with the
matters set out to in this announcement and will not regard any other person
as their client in relation to such matters and will not be responsible to
anyone other than musicMagpie for providing the protections afforded to
clients of Shore Capital nor for providing advice in relation to the contents
of, or any matter referred to in, this announcement or any transaction or
arrangement referred to herein. Neither Shore Capital and Corporate Limited
nor Shore Capital Stockbrokers Limited, nor any of their subsidiaries or
affiliates owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of Shore Capital in connection
with this announcement, any statement contained herein, any transaction or
arrangement referred to herein, or otherwise.

Overseas jurisdictions

This announcement has been prepared in accordance with, and for the purposes
of complying with, English law, the Takeover Code, the Market Abuse Regulation
and the AIM Rules and information disclosed may not be the same as that which
would have been disclosed if this announcement had been prepared in accordance
with the laws of jurisdictions outside of England.

The release, publication or distribution of this announcement in, into or from
jurisdictions other than the United Kingdom may be restricted by law and
therefore any persons who are subject to the laws of any jurisdiction other
than the United Kingdom should inform themselves about, and observe any
applicable requirements.

The availability of the Acquisition to musicMagpie Shareholders who are not
resident in and citizens of the United Kingdom may be affected by the laws of
the relevant jurisdictions in which they are located or of which they are
citizens. Persons who are not resident in the United Kingdom should inform
themselves of, and observe, any applicable legal or regulatory requirements of
their jurisdictions. In particular, the ability of persons who are not
resident in the United Kingdom to vote their musicMagpie Shares with respect
to the Scheme at the Meetings, or to execute and deliver Forms of Proxy (or
other proxy instructions) appointing another to vote at the Meetings on their
behalf, may be affected by the laws of the relevant jurisdictions in which
they are located. Any failure to comply with the applicable restrictions may
constitute a violation of the securities laws of any such jurisdiction. To the
fullest extent permitted by applicable law, the companies and persons involved
in the Acquisition disclaim any responsibility or liability for the violation
of such restrictions by any person. Further details in relation to Overseas
Shareholders will be contained in the Scheme Document.

Unless otherwise determined by AO Bidco or required by the Takeover Code, and
permitted by applicable law and regulation, the Acquisition will not be made
available, in whole or in part, directly or indirectly, in, into or from a
Restricted Jurisdiction where to do so would constitute a violation of the
relevant laws or regulations of such jurisdiction and no person may vote in
favour of the Acquisition by any such use, means, instrumentality or from
within a Restricted Jurisdiction or any other jurisdiction if to do so would
constitute a violation of the laws of that jurisdiction. Copies of this
announcement and any formal documentation relating to the Acquisition are not
being, and must not be, directly or indirectly, mailed or otherwise forwarded,
distributed or sent in or into or from any Restricted Jurisdiction and persons
receiving such documents (including custodians, nominees and trustees) must
not mail or otherwise forward, distribute or send such announcement or any
such document in or into or from any Restricted Jurisdiction. Doing so may
render invalid any related purported vote in respect of the Acquisition. If
the Acquisition is implemented by way of a Takeover Offer (unless otherwise
permitted by applicable law and regulation), the Takeover Offer may not be
made directly or indirectly, in or into, or by the use of mails or any means
or instrumentality (including, but not limited to, facsimile, e-mail or other
electronic transmission, telex or telephone) of interstate or foreign commerce
of, or of any facility of a national, state or other securities exchange of
any Restricted Jurisdiction and the Takeover Offer may not be capable of
acceptance by any such use, means, instrumentality or facilities.

The Acquisition will be subject to English law and the jurisdiction of the
Court, and the applicable requirements of the Takeover Code, the Panel, the
FCA, the London Stock Exchange, the AIM Rules and the Registrar of Companies.

Notice to US investors in musicMagpie

The Acquisition relates to the shares of an English company and is being made
by means of a scheme of arrangement provided for under English company law.
A transaction effected by means of a scheme of arrangement is not subject to
the tender offer rules or the proxy solicitation rules under the US Securities
Exchange Act of 1934.  Accordingly, the Acquisition is subject to the
disclosure requirements and practices applicable in the United Kingdom to
schemes of arrangement which differ from the disclosure requirements of United
States tender offer and proxy solicitation rules.  Neither the United States
Securities and Exchange Commission, nor any securities commission of any state
of the United States, has approved, disapproved or passed judgement on the
fairness or the merits of any offer, or passed comment upon the adequacy or
completeness of any of the information contained in this announcement.  Any
representation to the contrary may be a criminal offence in the United States.

If, in the future, AO Bidco exercises the right, with the consent of the Panel
(where necessary), to implement the Acquisition by way of a Takeover Offer and
determines to extend the offer into the United States, the Acquisition will be
made in compliance with applicable United States laws and regulations,
including Section 14(e) of the US Securities Exchange Act 1934 and Regulation
14E thereunder.  Such a takeover would be made in the United States by AO
Bidco and no one else.

Financial information included in this announcement and the Scheme Document
(or, if the Acquisition is implemented by way of a Takeover Offer, the Offer
Document) has been or will have been prepared in accordance with accounting
standards applicable in the United Kingdom that may not be comparable to
financial information of US companies or companies whose financial statements
are prepared in accordance with generally accepted accounting principles in
the United States, which may  differ in certain significant respects from
accounting principles and standards applicable in the United Kingdom.  None
of the financial information in this announcement has been audited in
accordance with auditing standards generally accepted in the United States or
the auditing standards of the Public Company Accounting Oversight Board
(United States).

The receipt of cash pursuant to the Acquisition by a musicMagpie Shareholder
in the US as consideration for the transfer of its Scheme Shares pursuant to
the Scheme may be a taxable transaction for US federal income tax purposes and
under applicable US state and local, as well as foreign and other, tax laws.
Each musicMagpie Shareholder is therefore urged to consult with independent
legal, tax and financial advisers in connection with making a decision
regarding the Acquisition.

It may be difficult for musicMagpie Shareholders in the US to enforce their
rights and any claim arising out of the US federal securities laws in
connection with the Acquisition, since AO, AO Bidco and musicMagpie are
located in, and organised under the laws of, a non-US jurisdiction, and some
or all of their officers and directors may be residents of a non-US
jurisdiction.  musicMagpie Shareholders in the US may not be able to make a
claim against a non-US company or its officers or directors in a non-US court
for violations of the US federal securities laws.  Further, it may be
difficult to compel a non-US company and its affiliates to subject themselves
to a US court's jurisdiction or judgement.

In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US
Securities Exchange Act of 1934, AO Bidco, certain affiliated companies and
their nominees or brokers (acting as agents), may from time to time make
certain purchases of, or arrangements to purchase, musicMagpie Shares outside
of the US, other than pursuant to the Acquisition, until the date on which the
Acquisition and/or Scheme becomes Effective, lapses or is otherwise
withdrawn.  Also, in accordance with Rule 14e-5(b) of the US Securities
Exchange Act of 1934, each of Jefferies and Shore Capital will continue to act
as an exempt principal trader in musicMagpie Shares on the London Stock
Exchange. If such purchases or arrangements to purchase were to be made, they
would occur either in the open market at prevailing prices or in private
transactions at negotiated prices and comply with applicable law, including
the US Securities Exchange Act of 1934.  Any information about such purchases
will be disclosed as required in the UK, will be reported to the Regulatory
News Service of the London Stock Exchange and will be available on the London
Stock Exchange website at www.londonstockexchange.com.

Cautionary note regarding forward-looking statements

This announcement (including any information incorporated by reference into
this announcement), statements made regarding the Acquisition, and other
information to be published by AO, AO Bidco and/or musicMagpie, contain
statements which are, or may be deemed to be, "forward-looking statements".
Forward-looking statements are prospective in nature and not based on
historical facts, but rather on current expectations and projections of the
management of AO, AO Bidco and/or musicMagpie about future events, and are
therefore subject to risks and uncertainties which could cause actual results
to differ materially from the future results expressed or implied by the
forward-looking statements.

The forward-looking statements contained in this announcement include
statements with respect to the financial condition, results of operations and
business of musicMagpie and certain plans and objectives of AO and AO Bidco
with respect thereto and other statements other than historical facts. Often,
but not always, forward-looking statements can be identified by the fact that
they do not relate only to historical or current facts and may use words such
as "anticipate", "target", "expect", "estimate", "forecast", "intend", "plan",
"budget", "scheduled" "goal", "believe", "hope", "aims", "continue", "will",
"may", "should", "would", "could", or other words of similar meaning. These
statements are based on assumptions and assessments made by musicMagpie, AO
Bidco and/or AO in light of their experience and their perception of
historical trends, current conditions, future developments and other factors
they believe appropriate. By their nature, forward-looking statements involve
known and unknown risk and uncertainty and other factors which may cause
actual results, performance or developments to differ materially from those
expressed in or implied by such, because they relate to events and depend on
circumstances that will occur in the future. Although AO, AO Bidco and/or
musicMagpie believe that the expectations reflected in such forward-looking
statements are reasonable, no assurance can be given that such expectations
will prove to have been correct and you are therefore cautioned not to place
reliance on these forward-looking statements which speak only as at the date
of this announcement.

There are a number of factors which could cause actual results and
developments to differ materially from those expressed or implied in
forward-looking statements. The factors that could cause actual results to
differ materially from those described in the forward-looking statements
include, but are not limited to: the ability to proceed with or complete the
Acquisition; the ability to obtain requisite regulatory and shareholder
approvals and the satisfaction of other conditions on the proposed terms;
changes in the global, political, economic, business and competitive
environments and in market and regulatory forces; changes in future inflation,
deflation, exchange and interest rates; changes in tax and national insurance
rates; future business combinations, capital expenditures, acquisitions or
dispositions; changes in general and economic business conditions; changes in
the behaviour of other market participants; the anticipated benefits of the
Acquisition not being realised as a result of changes in general economic and
market conditions in the countries in which AO, AO Bidco and musicMagpie
operate; weak, volatile or illiquid capital and/or credit markets; changes in
the degree of competition in the geographic and business areas in which AO, AO
Bidco and musicMagpie operate; the repercussions of the outbreak of epidemics
(including but not limited to the COVID-19 outbreak); changes to the boards of
directors of AO, AO Bidco and/or musicMagpie and/ or the composition of their
respective workforces; exposures to terrorist activity, IT system failures,
cyber-crime, fraud and pension scheme liabilities; risks relating to
environmental matters such as climate change including AO, AO Bidco and/or
musicMagpie's ability along with the government and other stakeholders to
measure, manage and mitigate the impacts of climate change effectively;
changes to law and/or the policies and practices of the Bank of England, the
FCA and/or other regulatory and governmental bodies; changes in the liquidity,
capital, funding and/ or asset position and/or credit ratings of AO, AO Bidco
and/or musicMagpie; the repercussions of the UK's exit from the EU (including
any change to the UK's currency and the terms of any trade agreements (or lack
thereof) between the UK and the EU), Eurozone instability, Russia's invasion
of Ukraine, conflicts in the Middle East, any referendum on Scottish
independence, and any UK or global cost of living crisis or recession. Other
unknown or unpredictable factors could cause actual results to differ
materially from those expected, estimated or projected in the forward-looking
statements. If any one or more of these risks or uncertainties materialises or
if any one or more of the assumptions proves incorrect, actual results may
differ materially from those expected, estimated or projected. Such
forward-looking statements should therefore be construed in the light of such
factors.

Neither AO nor musicMagpie, nor any of their respective associates or
directors, officers or advisers, provides any representation, assurance or
guarantee that the occurrence of the events expressed or implied in any
forward-looking statements in their announcement will actually occur. Given
the risks and uncertainties, you are cautioned not to place any reliance on
these forward-looking statements.

Other than in accordance with their legal or regulatory obligations, neither
AO, nor AO Bidco, nor musicMagpie is under any obligation, and AO, AO Bidco
and musicMagpie expressly disclaim any intention or obligation, to update or
revise any forward-looking or other statements contained in this announcement,
whether as a result of new information, future events or otherwise.

Dealing and Opening Position Disclosure requirements

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per
cent. or more of any class of relevant securities of an offeree company or of
any securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the Offer Period and, if later, following the announcement in
which any securities exchange offeror is first identified.

An Opening Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant securities
of each of (i) the offeree company and (ii) any securities exchange
offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a)
applies must be made by no later than 3.30 p.m. (London time) on the 10(th)
business day following the commencement of the Offer Period and, if
appropriate, by no later than 3.30 p.m. (London time) on the 10(th) business
day following the announcement in which any securities exchange offeror is
first identified. Relevant persons who deal in the relevant securities of the
offeree company or of a securities exchange offeror prior to the deadline for
making an Opening Position Disclosure must instead make a Dealing Disclosure.

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

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

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

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

Publication on website

In accordance with Rule 26.1 of the Takeover Code, a copy of this announcement
and the documents required to be published under Rule 26 of the Takeover Code,
will be made available free of charge, subject to certain restrictions
relating to persons resident in Restricted Jurisdictions, on AO's website at
www.ao-world.com/investor-centre/offer
(http://www.ao-world.com/investor-centre/offer) and musicMagpie's website at
www.musicmagpieplc.com/investors (http://www.musicmagpieplc.com/investors) by
no later than 12 noon (London time) on the first business day following the
date of this announcement. For the avoidance of doubt, neither the contents of
these websites nor the contents of any websites accessible from any hyperlinks
set out in this announcement are incorporated into or forms part of this
announcement.

No profit forecasts, profit estimates or quantified benefits statements

No statement in this announcement is intended as a profit forecast, profit
estimate or quantified benefits statement for any period and no statement in
this announcement should be interpreted to mean that earnings or earnings per
share for musicMagpie for the current or future financial years would
necessarily match or exceed the historical published earnings or earnings per
share for musicMagpie.

Requesting hard copy documents

In accordance with Rule 30.3 of the Takeover Code, musicMagpie Shareholders,
persons with information rights and participants in the musicMagpie Share
Plans may request a hard copy of this announcement by contacting musicMagpie's
registrars, Equiniti Limited. musicMagpie Shareholders can: (i) submit a
request in writing to Equiniti Limited, Aspect House, Spencer Road, Lancing,
West Sussex, BN99 6DA, United Kingdom; or (ii) call +44 (0) 121 415 7019.
Calls are charged at the standard geographical rate and will vary by provider.
Calls outside the United Kingdom will be charged at the applicable
international rate. Phone lines are open between 8.30 a.m. and 5.30 p.m.
(London time), Monday to Friday (excluding public holidays in England and
Wales).

For persons who receive a copy of this announcement in electronic form or via
a website notification, a hard copy of this announcement will not be sent
unless so requested. Such persons may also request that all future documents,
announcements and information to be sent to them in relation to the
Acquisition should be in hard copy form.

Electronic communications

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

Rounding

Certain figures included in this announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of figures that precede them.

Rule 2.9 disclosure

In accordance with Rule 2.9 of the Takeover Code, musicMagpie confirms that,
as at the Latest Practicable Date, it had in issue 107,808,287 ordinary shares
of £0.01 each. The International Securities Identification Number (ISIN) for
musicMagpie Shares is GB00BKY4XG48.

General

AO Bidco reserves the right to elect, with the consent of the Panel (where
necessary) and subject to the terms and conditions of the Co-operation
Agreement, to implement the Acquisition by way of a Takeover Offer for the
entire issued and to be issued share capital of musicMagpie not already held
by AO Bidco as an alternative to the Scheme. In such an event, a Takeover
Offer will be implemented on substantially the same terms, so far as
applicable, as those which would apply to the Scheme.

In the event that the Acquisition is to be implemented by way of a Takeover
Offer, musicMagpie Shares will be acquired pursuant to the Takeover Offer
fully paid and free from all liens, charges, equitable interests, encumbrances
and rights of pre-emption and any other interests of any nature whatsoever and
together with all rights attaching thereto including the right to receive and
retain all dividends and distributions declared, made or paid by reference to
a record date after the Effective Date.

If the Acquisition is effected by way of a Takeover Offer and such Takeover
Offer becomes or is declared unconditional and sufficient acceptances are
received, AO Bidco intends to: (i) request that the London Stock Exchange
cancels admission of musicMagpie Shares to trading on AIM; and (ii) exercise
its rights (to the extent such rights are available) to apply the provisions
of Chapter 3 of Part 28 of the Companies Act to acquire compulsorily the
remaining musicMagpie Shares in respect of which the Takeover Offer has not
been accepted.

The Acquisition will be subject to the Conditions and other terms set out in
Appendix 1 and to the full terms and conditions which will be set out in the
Scheme Document. Appendix 2 contains the bases of calculation and sources of
certain information contained in this announcement. Details of the irrevocable
undertakings and letters of intent received by AO Bidco in connection with the
Acquisition are set out in Appendix 3. Certain terms used in this announcement
are defined in Appendix 4.

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

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

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

FOR IMMEDIATE RELEASE

2 October 2024

RECOMMENDED CASH ACQUISITION

OF

MUSICMAGPIE PLC

BY

AO LTD

(a wholly-owned subsidiary of AO World PLC)

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

1.         Introduction

The AO Board and the musicMagpie Board are pleased to announce that they have
agreed the terms of a recommended cash acquisition of the entire issued and to
be issued share capital of musicMagpie by AO Bidco, a wholly-owned subsidiary
of AO.

2.         The Acquisition

It is intended that the Acquisition will be implemented by way of a
Court-sanctioned scheme of arrangement under Part 26 of the Companies Act
(although AO Bidco reserves the right to effect the Acquisition by way of a
Takeover Offer, subject to the consent of the Panel and the terms of the
Co-operation Agreement). The purpose of the Scheme is to enable AO Bidco to
acquire the whole of the issued and to be issued share capital of musicMagpie.

Under the terms of the Acquisition, which will be subject to the Conditions
and other terms set out in Appendix 1 to this announcement and to the full
terms and conditions which will be set out in the Scheme Document, musicMagpie
Shareholders will be entitled to receive:

for each musicMagpie Share: 9.07 pence in cash.

The Acquisition values the entire issued and to be issued share capital of
musicMagpie at approximately £9,982,105 on a fully diluted basis and
represents a premium of approximately:

·    58 per cent. to the Closing Price of 5.75 pence per musicMagpie Share
on the Latest Practicable Date;

·    58 per cent. to the volume-weighted average Closing Price of 5.75
pence per musicMagpie Share for the one-month period ended on the Latest
Practicable Date; and

·    48 per cent. to the volume-weighted average Closing Price of 6.12
pence per musicMagpie Share for the three-month period ended on the Latest
Practicable Date.

It is currently expected that the Acquisition will become Effective during Q1
2025, subject to the satisfaction or (where applicable) waiver of the
Conditions and certain further terms set out in Appendix 1 to this
announcement.

3.         Background to and reasons for the Acquisition

AO believes that musicMagpie is a high quality and leading operator in the
consumer electronics recommerce market with well-established operational
platforms, a well-invested refurbishing facility and a strong technology
stack. The musicMagpie brand is held in high regard and offers a trusted
customer proposition with a deep and active customer base; characteristics
which are highly valued by AO. With complementary business models focused
online and on customer service, AO believes the Acquisition will offer highly
attractive opportunities to augment its capability and value capture in the
mobile and consumer tech categories.

The Acquisition will provide AO with opportunity for further vertical
integration of the Wider AO Group's reverse supply chain, giving better
control over costs and will enhance the trade-in options for AO's customers.
musicMagpie's current sourcing channels include its SMARTDrop kiosks, direct
mail and from its US business. The Acquisition will enable musicMagpie to
leverage AO's trade-in volumes, which could lower its cost of acquisition.

AO further believes that adding musicMagpie into its portfolio of operations
will mitigate the risk of a shift of the consumer tech market to
sustainability and repair, with growth in refurbished technology expected to
rise, and at the same time will enhance the Combined Group's ESG credentials.

AO holds the musicMagpie management team in high regard and values their
operational expertise and experience. AO intends to work with the management
team with a view to providing attractive and sustained growth and development
opportunities to the Combined Group.

In relation to musicMagpie's Disc Media and Books business, AO recognises that
it is in long-term decline but is showing some signs of stabilisation and
delivers predictable cashflows, requiring only modest investment to sustain
its performance.

4.         Recommendation of musicMagpie Directors

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

Accordingly, the musicMagpie Directors intend to recommend unanimously that
musicMagpie Shareholders vote (or procure votes) in favour of the Scheme at
the Court Meeting and the Resolutions to be proposed at the General Meeting
(or in the event that the Acquisition is implemented by way of a Takeover
Offer, accept such Takeover Offer) as the musicMagpie Directors who are
interested in musicMagpie Shares have irrevocably undertaken to do (or procure
to be done) in respect of their interests (and, in the case of one musicMagpie
Director, those of a connected person) in 13,240,760 musicMagpie Shares,
representing, in aggregate, approximately 12.28 per cent. of musicMagpie's
total issued share capital (as at the Latest Practicable Date).

5.         Background to and reasons for the recommendation

musicMagpie was admitted to trading on the AIM market of the London Stock
Exchange in April 2021 (the "IPO"). Since the IPO, musicMagpie has made good
progress against its strategy including growing its rental service from 4,400
subscribers at 31 March 2021 to 32,700 at 31 May 2024, as well as partnering
with Asda to give customers the option of using its SMARTDrop kiosks for a
fast and easy way to recycle phones.

 

In the last two years the macro-economic environment has been more
challenging, impacting consumer spending with higher levels of inflation,
energy costs and interest rates all contributing to a cost-of-living crisis
for many households. Whilst these challenges have impacted musicMagpie's
trading, the musicMagpie Directors believe that they have also increased
consumers' willingness to seek value and consider buying pre-owned products
from trusted resellers across a number of categories which has and will
continue to have a positive benefit to the circular economy. In response to
these market dynamics, a number of consumer brands, retailers and online
platforms have introduced, or enhanced their circular economy capability and
offering.

 

To capitalise on this evolving consumer behaviour, and compete effectively,
during 2023 the musicMagpie Board determined that it may be more appropriate
for musicMagpie to partner with an organisation who could provide it with
greater financial strength and, potentially, operational synergies to enable
musicMagpie to continue its progress and drive its growth strategy. A core
facet of musicMagpie's strategy at the time of the IPO was to roll-out its
rental service offering to build subscribers and grow its future revenue and
cash flow stream from this offering. This service has been capital consumptive
to grow, and musicMagpie's ability to invest in this and other areas of
business has been constrained by the availability of capital, reflecting
musicMagpie's current market capitalisation, net debt of approximately £13.8
million as at 31 May 2024, and the increased interest rate environment. To
that end the musicMagpie Board commenced a process to seek a potential partner
with the capability to support and enhance musicMagpie's future growth plans
by bringing the musicMagpie offering to more consumers, and potentially in a
more cost-effective manner. This process has been extensive and has ultimately
resulted in the proposed Acquisition.

 

Whilst the musicMagpie Board has confidence in the business's market leading
circular economy offering, and musicMagpie's ability to return to growth in
the medium to long-term, they are cognisant that those challenges set out
above persist and may do for some time. Therefore, after careful
consideration, the musicMagpie Board believes that the Acquisition provides
musicMagpie Shareholders with an opportunity to realise their investment in
musicMagpie in full for cash at a significant premium to recent trading levels
without the uncertainty associated with the delivery of future value as an
independent public company. It therefore intends to recommend unanimously that
musicMagpie Shareholders vote (or procure votes) in favour of the Scheme at
the Court Meeting and the Resolutions to be proposed at the General Meeting
(or in the event that the Acquisition is implemented by way of a Takeover
Offer, accept such Takeover Offer) as the musicMagpie Directors who are
interested in musicMagpie Shares have irrevocably undertaken to do (or procure
to be done) in respect of their interests (and, in the case of one musicMagpie
Director, those of a connected person).

 

In evaluating the financial terms of the Acquisition, the musicMagpie Board
has considered a number of factors, including:

 

·    the offer price of 9.07 pence per musicMagpie Share represents an
opportunity for musicMagpie Shareholders to realise their shareholdings in
cash and in full at a significant premium to recent trading levels, against a
backdrop of more limited trading liquidity, which represents:

 

o  a premium of 58 per cent. to the Closing Price of a musicMagpie Share on
the Latest Practicable Date;

o  a premium of 58 per cent. to the volume-weighted average Closing Price of
a musicMagpie Share for the one-month period ended on the Latest Practicable
Date; and

o  a premium of 48 per cent. to the volume-weighted average Closing Price of
a musicMagpie Share in the three-month period ended on the Latest Practicable
Date;

 

·    the immediacy and certainty of the cash proceeds of and value derived
from the Consideration weighed against the inherent uncertainty of the
delivery of future value from musicMagpie given the continued challenging
macroeconomic backdrop in the UK, a competitive marketplace in which
musicMagpie operates and the ability to fund future investment to support the
musicMagpie Board's growth ambitions;

 

·    musicMagpie entered an Offer Period on 20 November 2023 and on 27
November 2023 indicated that it continued to seek potential buyers for
musicMagpie. Since then, it has completed a comprehensive exercise to engage
with a range of parties in connection with a possible acquisition of the
business;

 

·    the deliverability of alternative strategic options for the business;

 

·    the potential benefits of a new ownership structure, including the
ability to leverage AO's existing supply channels which could lower
musicMagpie's cost of acquisition of consumer technology products, AO's
trusted positioning with consumers, greater access to capital to pursue
strategic growth opportunities and more resilience for a range of
stakeholders; and

 

·    musicMagpie Shareholders, representing in aggregate approximately
42.12 per cent. of musicMagpie's issued share capital, have indicated their
support for the Acquisition by providing irrevocable undertakings to vote in
favour of the Scheme at the Court Meeting and the Resolutions to be proposed
at the General Meeting (or in the event that the Acquisition is implemented by
way of a Takeover Offer, accept such Takeover Offer).

In considering the Acquisition, the musicMagpie Directors have taken into
account AO's stated intentions for the business and its employees. In
particular, the musicMagpie Directors note that AO Bidco intends to work with
the existing management and employees of musicMagpie with a view to optimising
musicMagpie's operations and supporting growth and development opportunities
for the Combined Group's stakeholders. AO has also confirmed that the existing
contractual and statutory employment rights, including pension rights, of all
musicMagpie management and employees will be fully safeguarded in accordance
with applicable law. As such, the musicMagpie Board believes that the
Acquisition represents an opportunity for stakeholders to benefit, including
customers, employees and shareholders.

 

Accordingly, following careful consideration of the above factors, including
the intentions of AO, the musicMagpie Directors intend to recommend
unanimously that musicMagpie Shareholders vote (or procure votes) in favour of
the Scheme at the Court Meeting and the Resolutions to be proposed at the
General Meeting (or in the event that the Acquisition is implemented by way of
a Takeover Offer, accept such Takeover Offer) to musicMagpie Shareholders on
the terms, and subject to the conditions, set out in this announcement.

 

6.         Irrevocable undertakings and letters of intent

In addition to the irrevocable undertakings from the musicMagpie Directors
referred to above, AO Bidco has received from Ian Storey, Walter Gleeson,
Stephen Richards, CSC Employee Benefit Trustee (Jersey) Limited in its
capacity as trustee of the Employee Benefit Trust, Northern Venture Trust PLC,
Northern 2 VCT PLC, Northern 3 VCT PLC, NV2 LP and NVM Nominees Limited
irrevocable undertakings to vote in favour of the Scheme and the Resolutions
in respect of 32,172,160 musicMagpie Shares in aggregate, representing
approximately 29.84 per cent. of musicMagpie's total issued share capital (as
at the Latest Practicable Date).

Taken together with the irrevocable undertakings received from the musicMagpie
Directors,  AO Bidco has therefore received irrevocable undertakings to vote,
or procure the voting, in favour of the Scheme at the Court Meeting and the
Resolutions to be proposed at the General Meeting (or in the event that the
Acquisition is implemented by way of a Takeover Offer, to accept or procure
the acceptance of such Takeover Offer) in respect of a total of 45,412,920
musicMagpie Shares, representing, in aggregate, approximately 42.12 per cent.
of the total issued share capital of musicMagpie (as at the Latest Practicable
Date).

In addition, AO Bidco has received a letter of intent to vote, or procure the
voting, in favour of the Scheme at the Court Meeting and the Resolutions to be
proposed at the General Meeting (or in the event that the Acquisition is
implemented by way of a Takeover Offer, to accept or procure the acceptance of
such Takeover Offer) from Schroder Investment Management Limited,
representing, in aggregate, approximately 11.84 per cent. of the total issued
share capital of musicMagpie (as at the Latest Practicable Date).

Therefore, as at the date of this announcement, AO Bidco has received
irrevocable undertakings and letters of intent to vote, or procure the voting,
in favour of the Scheme at the Court Meeting and the Resolutions to be
proposed at the General Meeting (or in the event that the Acquisition is
implemented by way of a Takeover Offer, to accept or procure the acceptance of
such Takeover Offer) in respect of a total of 58,174,776 musicMagpie Shares,
representing, in aggregate, approximately 54.0 per cent. of the total issued
share capital of musicMagpie (as at the Latest Practicable Date).

Further details of these irrevocable undertakings and letters of intent are
set out in Appendix 3 to this announcement.

7.         AO's intentions for the musicMagpie business and the
Combined Group

AO's strategic plans for musicMagpie

AO believes that musicMagpie is a high quality and leading operator in the
consumer technology recommerce market.  With complementary business models
focused online, and aligned cultures centred on customer service, AO believes
the Acquisition will augment its capability and value capture in the mobile
and consumer tech categories.

AO holds the musicMagpie management team in high regard and values their
expertise and experience. AO intends to work with the existing management and
employees of musicMagpie with a view to optimising musicMagpie's operations
and supporting growth and development opportunities for the Combined Group's
stakeholders.

Prior to this announcement, consistent with market practice, AO has been
granted access to musicMagpie's senior management for the purposes of
confirmatory due diligence. Following completion of the Acquisition, AO
intends to work with musicMagpie's management team to undertake an evaluation
of musicMagpie's operations in order to improve its financial performance. The
scope of the evaluation is likely to include a review of: (i) strategic
opportunities for musicMagpie's US operation; (ii) musicMagpie's arrangements
with overlapping suppliers; (iii) the roles and responsibilities of
musicMagpie's management and employees; and (iv) musicMagpie's management
incentivisation arrangements (the "Evaluation"). It is not expected that the
Evaluation will result in any material reduction in headcount.

AO expects that the Evaluation will be completed within a period of
approximately six months from the Effective Date.

Employees and management

AO attaches great importance to the skill and experience of musicMagpie's
management and employees and recognises that the employees and management of
musicMagpie have been and will continue to be key to the continued success of
the Combined Group.

It is intended that, with effect from the Effective Date, each of the
non-executive Directors of musicMagpie shall resign from office. Once
musicMagpie ceases to be a listed company, some central management, corporate
and support functions, including listed company-related functions, will be
reduced in scope, which is likely to result in a limited reduction of
headcount in these areas. Any such headcount reduction shall be carried out in
accordance with applicable law.

AO does not intend to make any material reduction to the headcount (excluding
any headcount reduction programmes initiated by musicMagpie prior to the
Effective Date), or any material change to the conditions of employment or to
the balance of skills and functions, of the musicMagpie Group's employees or
management.

musicMagpie is currently in the process of reviewing costs and headcount in
its UK head office in consultation with its employees. It is expected that the
total head count of the UK head office function will reduce by approximately
30 people. This process is ongoing and is expected to be formally completed by
the end of October 2024 with employees leaving in a phased timetable
thereafter.

AO does not intend that the Acquisition will reduce its own headcount or
change its terms and conditions of employment or the balance of skills and
functions of its employees or management.

Existing employment rights

AO confirms that, following the Acquisition becoming Effective, the existing
contractual and statutory employment rights, including pension rights, of all
musicMagpie management and employees will be fully safeguarded in accordance
with applicable law.

Management incentive arrangements

Following the Acquisition becoming Effective, AO intends to review the
management incentive structure of musicMagpie. AO has not entered into, and
has not had discussions on proposals to enter into, any form of
incentivisation arrangements with members of musicMagpie's management, but may
enter into such discussions with certain members of the musicMagpie management
team following the Effective Date.

Headquarters, locations, fixed assets and research and development

AO does not intend to change the locations of musicMagpie's places of business
(including musicMagpie's headquarters in Stockport, and the operational
facilities in Stockport and Macclesfield in the UK and Atlanta in the US), nor
the locations of AO's places of business. AO does not intend to make any
material disposal of musicMagpie's fixed assets or material change to any of
musicMagpie's research and development functions.

Trading facilities

The musicMagpie Shares are currently admitted to trading on AIM. As described
in paragraph 16 below, prior to the Effective Date, it is intended that an
application will be made to the London Stock Exchange for admission of the
musicMagpie Shares to trading on AIM to be cancelled with effect from or
shortly following the Effective Date. It is also intended that musicMagpie
will be re-registered as a private limited company and for this to take effect
as soon as practicable following the Effective Date.

No post-offer undertakings

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

8.         Information on musicMagpie

musicMagpie is a market leader in the re-commerce of consumer technology, disc
media (including CDs, DVDs and games) and books in the UK, with operations in
the US, with sustainability running to the very heart of its operations.

Operating through two trusted brands - musicMagpie in the UK and decluttr in
the US - with a core strategy of providing consumers with a smart, sustainable
and trusted way to buy, rent and sell refurbished consumer technology,
physical media products and clothing items. Founded in 2007, the musicMagpie
Group has an established presence in the UK, with operations in Stockport,
Greater Manchester, and in the US in Atlanta, Georgia.

musicMagpie has a strong environmental and social focus, as demonstrated by
its trademarked 'smart for you, smart for the planet' ethos. Nearly 400,000
consumer technology products were resold in the financial year ending 30
November 2023. In addition, the musicMagpie Group re-sells approximately 8.4
million books and disc media each year that could have ended up as waste. The
musicMagpie Group has been given the London Stock Exchange's Green Economy
Mark in recognition of its contribution to the global green economy.

When selling to musicMagpie, the customer is offered a fixed valuation via the
website, provided with free logistics to ship the products and (subject to it
being 'as described') receives payment for their product on the day of arrival
at the musicMagpie Group's warehouse. The musicMagpie Group has partnered with
Asda to give customers the option of using its SMARTDrop Kiosks in store for a
fast and easy way to recycle phones for instant payment. As at 31 May 2024,
musicMagpie SMARTDrop kiosks are installed across approximately 290 Asda
stores in the UK, as well as in a small number of large shopping centres. This
innovative buying tool allows musicMagpie to promote the musicMagpie brand,
buy additional handsets and give consumers the convenience to get paid within
seconds for their smartphones. Customers purchasing from musicMagpie receive
branded refurbished product at a much lower price than buying new.

In 2021, musicMagpie launched a rental model for handsets, enabling consumers
to choose between an outright purchase of a handset, or renting over 12 months
or longer. As at 31 May 2024, musicMagpie had 32,700 active subscribers to
musicMagpie's device rental service.

musicMagpie has the highest number of seller reviews on both Amazon and eBay
and has consistently achieved extremely positive feedback scores. musicMagpie
has a 4.4* rating on UK Trustpilot with over 300,000 reviews and won Best
Refurbished Device Supplier in the Uswitch Telecoms Awards 2024, as well as
Best Online Retailer and Best Secondary Market Provider at the Mobile News
Awards 2023.

9.         Information on AO and AO Bidco

AO, headquartered in Bolton and listed on the London Stock Exchange, is the
UK's most trusted online electrical retailer, with a mission to be the
destination for electricals. AO's strategy is to create value by offering its
customers brilliant customer service and making AO the destination for
everything they need, in the simplest and easiest way, when buying
electricals. AO offers major and small domestic appliances and a growing range
of mobile phones, AV, consumer electricals and laptops. AO also provides
ancillary services such as the installation of new and collection of old
products and offers product protection plans and customer finance. AO Business
serves the B2B market in the UK, providing electricals and installation
services at scale. AO also has a Waste Electrical and Electronic Equipment
processing facility, ensuring customers' electronic waste is dealt with
responsibly.

AO Bidco is a private limited company incorporated in England and Wales, which
is directly wholly-owned by AO.

10.       Financing of the Acquisition

The Consideration necessary to satisfy the Acquisition in full will be funded
from AO's existing cash resources. Jefferies, in its capacity as financial
adviser to AO and AO Bidco, is satisfied that sufficient resources are
available to AO to satisfy in full the Consideration payable by AO Bidco to
musicMagpie Shareholders pursuant to the Acquisition.

11.       musicMagpie Share Plans

Participants in the musicMagpie Share Plans will be contacted regarding the
effect of the Acquisition on their rights under the musicMagpie Share Plans
and provided with further details concerning the proposals which will be made
to them in due course. Details of the proposals will be set out in the Scheme
Document (or, as the case may be, the Offer Document) and in separate letters
to be sent to participants in the musicMagpie Share Plans.

12.       Offer-related arrangements

Confidentiality Agreement between AO and musicMagpie

On 15 December 2023, AO and musicMagpie entered into the Confidentiality
Agreement in connection with the Acquisition, pursuant to which, amongst other
things, the parties gave certain undertakings to: (i) subject to certain
exceptions, keep information relating to the Acquisition and each other
party's group confidential and not to disclose it to third parties; and (ii)
use such confidential information only in connection with the Acquisition.
These confidentiality obligations will remain in force until the earlier of:
(i) if the Acquisition is implemented by way of a Takeover Offer, AO or any
member of the Wider AO Group acquiring 50 per cent. or more of the issued
share capital of musicMagpie; (ii) if the Acquisition is implemented by way of
a Scheme, the Scheme becoming Effective; or (iii) the date occurring 24 months
after the date of the Confidentiality Agreement.

Co-operation Agreement between AO Bidco and musicMagpie

On 2 October 2024, AO Bidco and musicMagpie entered into the Co-operation
Agreement in relation to the Acquisition. Pursuant to the Co-operation
Agreement:

·          AO Bidco has agreed to use all reasonable endeavours to
obtain, and make any necessary filings in relation to, the regulatory
clearances and authorisations necessary or advisable to satisfy the Condition
set out in paragraph 3(A) of Part A of Appendix 1 as soon as reasonably
practicable and in any event by the Long Stop Date, subject to certain
customary carve-outs;

·          the parties have agreed to (i) implement certain
arrangements with respect to the musicMagpie Share Plans and the Employee
Benefit Trust; and (ii) certain provisions if the Acquisition should switch to
a Takeover Offer; and

·          AO Bidco has also agreed to provide musicMagpie with
certain information for the purposes of the Scheme Document and to otherwise
assist with the preparation of the Scheme Document.

The Co-operation Agreement shall terminate, amongst other things:

·          if agreed in writing between AO Bidco and musicMagpie at
any time prior to the Effective Date;

·          upon service of written notice by AO Bidco to musicMagpie
if the musicMagpie Board recommends or announces that it intends to recommend
a competing proposal or a competing proposal completes, becomes effective or
is declared unconditional;

·          if the musicMagpie Board's recommendation in respect of
the Acquisition changes in a manner that is adverse in the context of the
Acquisition; or

·          upon service of written notice by either AO Bidco or
musicMagpie to the other party if (i) prior to the Long Stop Date, a competing
offer completes, becomes effective or is declared or becomes unconditional;
(ii) the Acquisition is withdrawn, terminated or lapses in accordance with its
terms prior to the Long Stop Date; (iii) prior to the Long Stop Date, a
Condition has been invoked by AO Bidco (where the invocation of the relevant
Condition is permitted by the Panel); (iv) unless the Acquisition has switched
to a Takeover Offer: (a) the Scheme is not approved at the Court Meeting
and/or the Resolutions are not approved at the General Meeting or the Court
definitively refuses to sanction the Scheme at the Sanction Hearing; or (b)
the Court Meeting, the General Meeting or the Sanction Hearing is/are not held
on or before the 22nd day after the expected date of such meeting or hearing
as set out in the Scheme Document (or such later date, if any, as AO Bidco and
musicMagpie may agree, or (in a competitive situation) as may be specified by
AO Bidco with the consent of the Panel, and in each case that (if so required)
the Court may allow); or (v) if the Effective Date has not occurred on or
before the Long Stop Date (unless otherwise agreed by the parties in writing,
or required by the Panel).

13.       Scheme process and publication of the Scheme Document

It is intended that the Acquisition will be effected by a Court-sanctioned
scheme of arrangement between musicMagpie and the Scheme Shareholders under
Part 26 of the Companies Act. AO Bidco reserves the right, however, to effect
the Acquisition by way of Takeover Offer, subject to the consent of the Panel
and the terms of the Co-operation Agreement.

The purpose of the Scheme is to provide for AO Bidco to become the owner of
the whole of the issued and to be issued share capital of musicMagpie. Under
the Scheme, the Acquisition is to be achieved by the transfer of the Scheme
Shares held by Scheme Shareholders to AO Bidco in consideration for which
Scheme Shareholders will receive the Consideration on the basis set out in
paragraph 2 of this announcement. The process involves, amongst other things,
an application by musicMagpie to the Court to sanction the Scheme.

The Acquisition will be subject to the Conditions and further terms and
conditions referred to in Appendix 1 to this announcement and to be set out in
the Scheme Document. Subject, amongst other things, to the satisfaction (or,
where applicable, waiver) of the Conditions, the Scheme will only become
Effective if, amongst other things, the following events occur on or before
the Long Stop Date:

·          the approval by a majority in number of Scheme
Shareholders, present and voting (and entitled to vote) at the Court Meeting,
whether in person or by proxy, representing 75 per cent. or more in value of
the Scheme Shares held by those Scheme Shareholders (or the relevant class or
classes thereof) and the passing, at the General Meeting, of the Resolutions
by musicMagpie Shareholders representing 75 per cent. or more of the votes
validly cast on the Resolutions (the General Meeting will be held immediately
after the Court Meeting);

·          certain regulatory approvals as described in Appendix 1
(including approvals from the FCA) are obtained (or waived, as applicable);

·          following the Meetings, the Scheme is sanctioned by the
Court (with or without modification, and, if with modification, on terms
agreed by AO Bidco and musicMagpie); and

·          following such sanction, a copy of the Court Order is
delivered to the Registrar of Companies.

Upon the Scheme becoming Effective, it will be binding on all musicMagpie
Shareholders, irrespective of whether or not they attended or voted at the
Meetings (and if they attended and voted, whether or not they voted in favour)
and the Consideration will be despatched by AO Bidco to Scheme Shareholders no
later than 14 days after the Effective Date. In addition, share certificates
in respect of the musicMagpie Shares will cease to be valid and entitlements
to musicMagpie Shares held within the CREST system will be cancelled.

Any musicMagpie Shares issued before the Scheme Record Time will be subject to
the terms of the Scheme. The Resolutions to be proposed at the General Meeting
will, amongst other matters, provide that the Articles be amended to
incorporate provisions requiring any musicMagpie Shares issued or transferred
on or after the Scheme Record Time (other than to AO Bidco and/or its
nominees) will either be subject to the Scheme or (after the Effective Date)
be automatically and immediately transferred to, or to the order of, AO Bidco
on the same terms as the Acquisition (other than terms as to timings and
formalities). These provisions of the Articles (as amended) will avoid any
person (other than AO Bidco and/or its nominees) holding musicMagpie Shares
after the Effective Date.

The Scheme Document will include full details of the Scheme, together with
notices of the Court Meeting and the General Meeting and the expected
timetable for the implementation of the Scheme. It is expected that the Scheme
Document and the Forms of Proxy accompanying the Scheme Document for use at
the Court Meeting and the General Meeting will be distributed to musicMagpie
Shareholders as soon as reasonably practicable and in any event within 28 days
of the date of this announcement or such later date as AO Bidco, musicMagpie
and the Panel may agree, and that the Court Meeting and the General Meeting
will be held as soon as practicable thereafter.

Subject to, amongst other things, the satisfaction or (where applicable)
waiver of the Conditions and certain further terms set out in Appendix 1 to
this announcement, it is currently expected that the Acquisition will become
Effective during Q1 2025.

The Acquisition will lapse if the Scheme does not become Effective by the Long
Stop Date.

The Scheme will be governed by English law. The Scheme will be subject to the
applicable requirements of the Takeover Code, the Panel, the FCA, the London
Stock Exchange, the AIM Rules and the Registrar of Companies.

14.       Dividends

If, on or after the date of this announcement and before the Effective Date,
any dividend, distribution or other return of capital or value is announced,
declared, made or paid by musicMagpie or becomes payable by musicMagpie in
respect of the musicMagpie Shares, AO Bidco reserves the right to reduce the
Consideration that would be payable for each musicMagpie Share pursuant to the
Acquisition by an amount up to the amount per musicMagpie Share of such
dividend and/or distribution and/or other return of capital or value. In such
circumstances, musicMagpie Shareholders would be entitled to receive and
retain any such dividend and/or other distribution and/ or return of capital
or value to which they are entitled.

15.       Disclosure of interests

Except for the irrevocable undertakings and letters of intent referred to in
paragraph 6 above, as at the date of this announcement neither AO Bidco nor
any of its directors, nor, so far as AO Bidco is aware, any person acting in
concert (within the meaning of the Takeover Code) with AO Bidco:

·    has any interest in, or right to subscribe for, any relevant
securities of musicMagpie; nor

·    has any short position in respect of any relevant securities of
musicMagpie, including any short position under a derivative, any agreement to
sell, any delivery obligation or right to require another person to purchase
or take delivery of relevant securities of musicMagpie; nor

·    has borrowed or lent any relevant securities of musicMagpie or
entered into any financial collateral arrangements relating to relevant
securities of musicMagpie; nor

·    is party to any dealing arrangement of the kind referred to in Note
11 of the definition of acting in concert in the Takeover Code in relation to
relevant securities of musicMagpie.

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

In the interests of secrecy prior to this announcement, it has not been
practicable for AO Bidco to make enquiries of all of its concert parties in
advance of the release of this announcement. Therefore, if AO Bidco becomes
aware, following the making of such enquiries, that any of its concert parties
have any interests in relevant securities of musicMagpie, all relevant details
in respect of AO Bidco's concert parties will be included in AO's Opening
Position Disclosure in accordance with Rule 8.1(a) and Note 2(a)(i) on Rule 8
of the Takeover Code.

16.       Delisting and re-registration

Prior to the Scheme becoming Effective, it is intended that an application
will be made to the London Stock Exchange to, subject to the Acquisition
becoming Effective, cancel admission of musicMagpie Shares to trading on AIM,
with effect from or shortly following the Effective Date.

The last day of dealings in, and registration of transfers of, musicMagpie
Shares on AIM is expected to be the Business Day immediately prior to the
Effective Date and no transfers will be registered after 6:00 p.m. (London
time) on that date.

On the Effective Date, musicMagpie will become a wholly-owned subsidiary of AO
Bidco and share certificates in respect of musicMagpie Shares will cease to be
valid. In addition, entitlements held within the CREST system to the
musicMagpie Shares will be cancelled on the Effective Date.

It is also intended that musicMagpie will be re-registered as a private
limited company and for this to take effect as soon as practicable following
the Effective Date.

Upon the Scheme becoming Effective, AO Bidco will acquire the musicMagpie
Shares fully paid and free from all liens, charges, equitable interests,
encumbrances and rights of pre-emption and any other interests of any nature
whatsoever and together with all rights attaching thereto including the right
to receive and retain all dividends and distributions declared, made or paid
by reference to a record date after the Effective Date.

17.       Consents

Jefferies and Shore Capital have each given, and not withdrawn, their written
consent to the publication of this announcement with the inclusion herein of
the references to their names in the form and content in which they appear.

18.       Documents available for inspection

Copies of this announcement and the following documents will, by no later than
12 noon on the Business Day following the date of this announcement, be
published on AO's website at www.ao-world.com/investor-centre/offer
(http://www.ao-world.com/investor-centre/offer) and musicMagpie's website at
www.musicmagpieplc.com/investors (http://www.musicmagpieplc.com/investors) :

·    this announcement;

·    the irrevocable undertakings and letters of intent referred to in
paragraph 6 above and further described in Appendix 3 to this announcement;

·    the Confidentiality Agreement;

·    the Co-operation Agreement; and

·    the consent letters from each of Jefferies and Shore Capital referred
to in paragraph 17 above.

The contents of any website referred to in this announcement are not
incorporated into and do not form part of this announcement.

19.       General

AO Bidco reserves the right to elect, with the consent of the Panel (where
necessary) and subject to the terms and conditions of the Co-operation
Agreement, to implement the Acquisition by way of a Takeover Offer for the
entire issued and to be issued share capital of musicMagpie not already held
by AO Bidco as an alternative to the Scheme. In such an event, a Takeover
Offer will be implemented on substantially the same terms, so far as
applicable, as those which would apply to the Scheme.

In the event that the Acquisition is to be implemented by way of a Takeover
Offer, musicMagpie Shares will be acquired pursuant to the Takeover Offer
fully paid and free from all liens, charges, equitable interests, encumbrances
and rights of pre-emption and any other interests of any nature whatsoever and
together with all rights attaching thereto including the right to receive and
retain all dividends and distributions declared, made or paid by reference to
a record date after the Effective Date.

If the Acquisition is effected by way of a Takeover Offer and such Takeover
Offer becomes or is declared unconditional and sufficient acceptances are
received, AO Bidco intends to: (i) request that the London Stock Exchange
cancels admission of musicMagpie Shares to trading on AIM; and (ii) exercise
its rights (to the extent such rights are available) to apply the provisions
of Chapter 3 of Part 28 of the Companies Act to acquire compulsorily the
remaining musicMagpie Shares in respect of which the Takeover Offer has not
been accepted.

The Acquisition will be subject to the Conditions and other terms set out in
Appendix 1 and to the full terms and conditions which will be set out in the
Scheme Document. Appendix 2 contains the bases of calculation and sources of
certain information contained in this announcement. Details of the irrevocable
undertakings and letters of intent received by AO Bidco in connection with the
Acquisition are set out in Appendix 3. Certain terms used in this announcement
are defined in Appendix 4.

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

Enquiries:

 AO
 Mark Higgins, Chief Financial Officer                                           +44 (0)1204 672400
 Jefferies International Limited (Financial Adviser and Corporate Broker to AO)  +44 (0)20 7029 8000
 Philip Noblet

 Thomas Bective

 Jordan Cameron
 Powerscourt (PR Adviser to AO)                                                  +44(0) 20 7250 1446

 Rob Greening                                                                    ao@powerscourt-group.com

 musicMagpie                                                                     +44 (0)870 479 2705
 Martin Hellawell, Non-Executive Chair

 Steve Oliver, Chief Executive Officer and Co-founder

 Matthew Fowler, Chief Financial Officer

 Shore Capital (Financial Adviser, Rule 3 Adviser, Nominated Adviser and Broker  +44 (0)20 7408 4090
 to musicMagpie)
 Mark Percy (Corporate Advisory)

 Malachy McEntyre (Corporate Broking)

 Daniel Bush (Corporate Advisory)

 Rachel Goldstein (Corporate Advisory)

 

Gibson, Dunn & Crutcher UK LLP is acting as legal adviser to AO and AO
Bidco in connection with the Acquisition.

Addleshaw Goddard LLP is acting as legal adviser to musicMagpie in connection
with the Acquisition.

The person responsible for making this announcement on behalf of AO is Julie
Finnemore (Company Secretary). The person responsible for making this
announcement on behalf of musicMagpie is Matthew Fowler (Company Secretary).

Inside Information

This announcement contains inside information for the purposes of the Market
Abuse Regulation.

Further information

This announcement is for information purposes only and is not intended to and
does not constitute, or form any part of any offer, invitation or the
solicitation of an offer 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 Acquisition or otherwise, nor
shall there be any sale, issuance or transfer of securities of musicMagpie in
any jurisdiction in contravention of applicable law. The Acquisition will be
made and implemented solely pursuant to the terms of the Scheme Document (or
if the Acquisition is implemented by way of a Takeover Offer, the Offer
Document), which will contain the full terms and conditions of the
Acquisition, including details of how to vote in respect of the Acquisition.
Any vote in respect of, or other response to, the Acquisition should be made
only on the basis of the information contained in the Scheme Document (or if
the Acquisition is implemented by way of a Takeover Offer, the Offer
Document).

musicMagpie and AO Bidco will prepare the Scheme Document (or if the
Acquisition is implemented by way of a Takeover Offer, the Offer Document) to
be distributed to musicMagpie Shareholders. musicMagpie and AO Bidco urge
musicMagpie Shareholders to read the Scheme Document (or if the Acquisition is
implemented by way of a Takeover Offer, the Offer Document) when it becomes
available because it will contain important information relating to the
Acquisition.

This announcement does not constitute a prospectus, prospectus equivalent
document or an exempted document.

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
publication of this announcement shall not give rise to any implication that
there has been no change in the facts set forth in this announcement since
such date.

Disclaimers

This announcement does not constitute or form part of, and should not be
construed as, any public offer under any applicable legislation or an offer to
sell or solicitation of any offer to buy any securities or financial
instruments or any advice or recommendation with respect to such securities or
other financial instruments.

Jefferies International Limited ("Jefferies"), which is authorised and
regulated by the Financial Conduct Authority in the United Kingdom, is acting
exclusively for AO and  AO Bidco and no one else in connection with the
matters set out in this announcement and will not regard any other person as
its client in relation to such matters and will not be responsible to anyone
other than AO and AO Bidco for providing the protections afforded to clients
of Jefferies nor for providing advice in relation to the contents of, or any
matter referred to in, this announcement or any transaction or arrangement
referred to herein. Neither Jefferies nor any of its subsidiaries or
affiliates owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of Jefferies in connection with
this announcement, any statement contained herein, any transaction or
arrangement referred to herein, or otherwise.

Shore Capital and Corporate Limited and Shore Capital Stockbrokers Limited
(either individually or collectively "Shore Capital"), which are authorised
and regulated by the Financial Conduct Authority in the United Kingdom, are
acting exclusively for musicMagpie and no one else in connection with the
matters set out to in this announcement and will not regard any other person
as their client in relation to such matters and will not be responsible to
anyone other than musicMagpie for providing the protections afforded to
clients of Shore Capital nor for providing advice in relation to the contents
of, or any matter referred to in, this announcement or any transaction or
arrangement referred to herein. Neither Shore Capital and Corporate Limited
nor Shore Capital Stockbrokers Limited, nor any of their subsidiaries or
affiliates owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of Shore Capital in connection
with this announcement, any statement contained herein, any transaction or
arrangement referred to herein, or otherwise.

Overseas jurisdictions

This announcement has been prepared in accordance with, and for the purposes
of complying with, English law, the Takeover Code, the Market Abuse Regulation
and the AIM Rules, and information disclosed may not be the same as that which
would have been disclosed if this announcement had been prepared in accordance
with the laws of jurisdictions outside of England.

The release, publication or distribution of this announcement in, into or from
jurisdictions other than the United Kingdom may be restricted by law and
therefore any persons who are subject to the laws of any jurisdiction other
than the United Kingdom should inform themselves about, and observe any
applicable requirements.

The availability of the Acquisition to musicMagpie Shareholders who are not
resident in and citizens of the United Kingdom may be affected by the laws of
the relevant jurisdictions in which they are located or of which they are
citizens. Persons who are not resident in the United Kingdom should inform
themselves of, and observe, any applicable legal or regulatory requirements of
their jurisdictions. In particular, the ability of persons who are not
resident in the United Kingdom to vote their musicMagpie Shares with respect
to the Scheme at the Meetings, or to execute and deliver Forms of Proxy (or
other proxy instructions) appointing another to vote at the Meetings on their
behalf, may be affected by the laws of the relevant jurisdictions in which
they are located. Any failure to comply with the applicable restrictions may
constitute a violation of the securities laws of any such jurisdiction. To the
fullest extent permitted by applicable law, the companies and persons involved
in the Acquisition disclaim any responsibility or liability for the violation
of such restrictions by any person. Further details in relation to Overseas
Shareholders will be contained in the Scheme Document.

Unless otherwise determined by AO Bidco or required by the Takeover Code, and
permitted by applicable law and regulation, the Acquisition will not be made
available, in whole or in part, directly or indirectly, in, into or from a
Restricted Jurisdiction where to do so would constitute a violation of the
relevant laws or regulations of such jurisdiction and no person may vote in
favour of the Acquisition by any such use, means, instrumentality or from
within a Restricted Jurisdiction or any other jurisdiction if to do so would
constitute a violation of the laws of that jurisdiction. Copies of this
announcement and any formal documentation relating to the Acquisition are not
being, and must not be, directly or indirectly, mailed or otherwise forwarded,
distributed or sent in or into or from any Restricted Jurisdiction and persons
receiving such documents (including custodians, nominees and trustees) must
not mail or otherwise forward, distribute or send such announcement or any
such document in or into or from any Restricted Jurisdiction. Doing so may
render invalid any related purported vote in respect of the Acquisition. If
the Acquisition is implemented by way of a Takeover Offer (unless otherwise
permitted by applicable law and regulation), the Takeover Offer may not be
made directly or indirectly, in or into, or by the use of mails or any means
or instrumentality (including, but not limited to, facsimile, e-mail or other
electronic transmission, telex or telephone) of interstate or foreign commerce
of, or of any facility of a national, state or other securities exchange of
any Restricted Jurisdiction and the Takeover Offer may not be capable of
acceptance by any such use, means, instrumentality or facilities.

The Acquisition will be subject to English law and the jurisdiction of the
Court, and the applicable requirements of the Takeover Code, the Panel, the
FCA, the London Stock Exchange, the AIM Rules and the Registrar of Companies.

Notice to US investors in musicMagpie

The Acquisition relates to the shares of an English company and is being made
by means of a scheme of arrangement provided for under English company law.
A transaction effected by means of a scheme of arrangement is not subject to
the tender offer rules or the proxy solicitation rules under the US Securities
Exchange Act of 1934.  Accordingly, the Acquisition is subject to the
disclosure requirements and practices applicable in the United Kingdom to
schemes of arrangement which differ from the disclosure requirements of United
States tender offer and proxy solicitation rules.  Neither the United States
Securities and Exchange Commission, nor any securities commission of any state
of the United States, has approved, disapproved or passed judgement on the
fairness or the merits of any offer, or passed comment upon the adequacy or
completeness of any of the information contained in this announcement.  Any
representation to the contrary may be a criminal offence in the United States.

If, in the future, AO Bidco exercises the right, with the consent of the Panel
(where necessary), to implement the Acquisition by way of a Takeover Offer and
determines to extend the offer into the United States, the Acquisition will be
made in compliance with applicable United States laws and regulations,
including Section 14(e) of the US Securities Exchange Act 1934 and Regulation
14E thereunder.  Such a takeover would be made in the United States by AO
Bidco and no one else.

Financial information included in this announcement and the Scheme Document
(or, if the Acquisition is implemented by way of a Takeover Offer, the Offer
Document) has been or will have been prepared in accordance with accounting
standards applicable in the United Kingdom that may not be comparable to
financial information of US companies or companies whose financial statements
are prepared in accordance with generally accepted accounting principles in
the United States, which may  differ in certain significant respects from
accounting principles and standards applicable in the United Kingdom.  None
of the financial information in this announcement has been audited in
accordance with auditing standards generally accepted in the United States or
the auditing standards of the Public Company Accounting Oversight Board
(United States).

The receipt of cash pursuant to the Acquisition by a musicMagpie Shareholder
in the US as consideration for the transfer of its Scheme Shares pursuant to
the Scheme may be a taxable transaction for US federal income tax purposes and
under applicable US state and local, as well as foreign and other, tax laws.
Each musicMagpie Shareholder is therefore urged to consult with independent
legal, tax and financial advisers in connection with making a decision
regarding the Acquisition.

It may be difficult for musicMagpie Shareholders in the US to enforce their
rights and any claim arising out of the US federal securities laws in
connection with the Acquisition, since AO, AO Bidco and musicMagpie are
located in, and organised under the laws of, a non-US jurisdiction, and some
or all of their officers and directors may be residents of a non-US
jurisdiction.  musicMagpie Shareholders in the US may not be able to make a
claim against a non-US company or its officers or directors in a non-US court
for violations of the US federal securities laws.  Further, it may be
difficult to compel a non-US company and its affiliates to subject themselves
to a US court's jurisdiction or judgement.

In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US
Securities Exchange Act of 1934, AO Bidco, certain affiliated companies and
their nominees or brokers (acting as agents), may from time to time make
certain purchases of, or arrangements to purchase, musicMagpie Shares outside
of the US, other than pursuant to the Acquisition, until the date on which the
Acquisition and/or Scheme becomes Effective, lapses or is otherwise
withdrawn.  Also, in accordance with Rule 14e-5(b) of the US Securities
Exchange Act of 1934, each of Jefferies and Shore Capital will continue to act
as an exempt principal trader in musicMagpie Shares on the London Stock
Exchange.  If such purchases or arrangements to purchase were to be made,
they would occur either in the open market at prevailing prices or in private
transactions at negotiated prices and comply with applicable law, including
the US Securities Exchange Act of 1934.  Any information about such purchases
will be disclosed as required in the UK, will be reported to the Regulatory
News Service of the London Stock Exchange and will be available on the London
Stock Exchange website at www.londonstockexchange.com.

Cautionary note regarding forward-looking statements

This announcement (including any information incorporated by reference into
this announcement), statements made regarding the Acquisition, and other
information to be published by AO, AO Bidco and/or musicMagpie, contain
statements which are, or may be deemed to be, "forward-looking statements".
Forward-looking statements are prospective in nature and not based on
historical facts, but rather on current expectations and projections of the
management of AO, AO Bidco and/or musicMagpie about future events, and are
therefore subject to risks and uncertainties which could cause actual results
to differ materially from the future results expressed or implied by the
forward-looking statements.

The forward-looking statements contained in this announcement include
statements with respect to the financial condition, results of operations and
business of musicMagpie and certain plans and objectives of AO and AO Bidco
with respect thereto and other statements other than historical facts. Often,
but not always, forward-looking statements can be identified by the fact that
they do not relate only to historical or current facts and may use words such
as "anticipate", "target", "expect", "estimate", "forecast", "intend", "plan",
"budget", "scheduled" "goal", "believe", "hope", "aims", "continue", "will",
"may", "should", "would", "could", or other words of similar meaning. These
statements are based on assumptions and assessments made by musicMagpie, AO
and/or AO Bidco in light of their experience and their perception of
historical trends, current conditions, future developments and other factors
they believe appropriate. By their nature, forward-looking statements involve
known and unknown risk and uncertainty and other factors which may cause
actual results, performance or developments to differ materially from those
expressed in or implied by such, because they relate to events and depend on
circumstances that will occur in the future. Although AO, AO Bidco and/or
musicMagpie believe that the expectations reflected in such forward-looking
statements are reasonable, no assurance can be given that such expectations
will prove to have been correct and you are therefore cautioned not to place
undue reliance on these forward-looking statements which speak only as at the
date of this announcement.

There are a number of factors which could cause actual results and
developments to differ materially from those expressed or implied in
forward-looking statements. The factors that could cause actual results to
differ materially from those described in the forward-looking statements
include, but are not limited to: the ability to proceed with or complete the
Acquisition; the ability to obtain requisite regulatory and shareholder
approvals and the satisfaction of other conditions on the proposed terms;
changes in the global, political, economic, business and competitive
environments and in market and regulatory forces; changes in future inflation,
deflation, exchange and interest rates; changes in tax and national insurance
rates; future business combinations, capital expenditures, acquisitions or
dispositions; changes in general and economic business conditions; changes in
the behaviour of other market participants; the anticipated benefits of the
Acquisition not being realised as a result of changes in general economic and
market conditions in the countries in which AO, AO Bidco and musicMagpie
operate; weak, volatile or illiquid capital and/or credit markets; changes in
the degree of competition in the geographic and business areas in which AO, AO
Bidco and musicMagpie operate; the repercussions of the outbreak of epidemics
(including but not limited to the COVID-19 outbreak); changes to the boards of
directors of AO, AO Bidco and/or musicMagpie and/ or the composition of their
respective workforces; exposures to terrorist activity, IT system failures,
cyber-crime, fraud and pension scheme liabilities; risks relating to
environmental matters such as climate change including AO, AO Bidco and/or
musicMagpie's ability along with the government and other stakeholders to
measure, manage and mitigate the impacts of climate change effectively;
changes to law and/or the policies and practices of the Bank of England, the
FCA and/or other regulatory and governmental bodies; changes in the liquidity,
capital, funding and/ or asset position and/or credit ratings of AO, AO Bidco
and/or musicMagpie; the repercussions of the UK's exit from the EU (including
any change to the UK's currency and the terms of any trade agreements (or lack
thereof) between the UK and the EU), Eurozone instability, Russia's invasion
of Ukraine, conflicts in the Middle East, any referendum on Scottish
independence, and any UK or global cost of living crisis or recession. Other
unknown or unpredictable factors could cause actual results to differ
materially from those expected, estimated or projected in the forward-looking
statements. If any one or more of these risks or uncertainties materialises or
if any one or more of the assumptions proves incorrect, actual results may
differ materially from those expected, estimated or projected. Such
forward-looking statements should therefore be construed in the light of such
factors.

Neither AO, nor AO Bidco, nor musicMagpie, nor any of their respective
associates or directors, officers or advisers, provides any representation,
assurance or guarantee that the occurrence of the events expressed or implied
in any forward-looking statements in their announcement will actually occur.
Given the risks and uncertainties, you are cautioned not to place any reliance
on these forward-looking statements.

Other than in accordance with their legal or regulatory obligations, neither
AO, nor AO Bidco, nor musicMagpie is under any obligation, and AO, AO Bidco
and musicMagpie expressly disclaim any intention or obligation, to update or
revise any forward-looking or other statements contained in this announcement,
whether as a result of new information, future events or otherwise.

Dealing and Opening Position Disclosure requirements

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per
cent. or more of any class of relevant securities of an offeree company or of
any securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the Offer Period and, if later, following the announcement in
which any securities exchange offeror is first identified.

An Opening Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant securities
of each of (i) the offeree company and (ii) any securities exchange
offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a)
applies must be made by no later than 3.30 p.m. (London time) on the 10(th)
business day following the commencement of the Offer Period and, if
appropriate, by no later than 3.30 p.m. (London time) on the 10(th) business
day following the announcement in which any securities exchange offeror is
first identified. Relevant persons who deal in the relevant securities of the
offeree company or of a securities exchange offeror prior to the deadline for
making an Opening Position Disclosure must instead make a Dealing Disclosure.

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

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

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

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

Publication on website

In accordance with Rule 26.1 of the Takeover Code, a copy of this announcement
and the documents required to be published under Rule 26 of the Takeover Code,
will be made available free of charge, subject to certain restrictions
relating to persons resident in Restricted Jurisdictions, on AO's website at
www.ao-world.com/investor-centre/offer
(http://www.ao-world.com/investor-centre/offer) and musicMagpie's website at
www.musicmagpieplc.com/investors (http://www.musicmagpieplc.com/investors) by
no later than 12 noon (London time) on the first business day following the
date of this announcement. For the avoidance of doubt, neither the contents of
these websites nor the contents of any websites accessible from any hyperlinks
set out in this announcement are incorporated into or forms part of this
announcement.

No profit forecasts, profit estimates or quantified benefits statements

No statement in this announcement is intended as a profit forecast, profit
estimate or quantified benefits statement for any period and no statement in
this announcement should be interpreted to mean that earnings or earnings per
share for musicMagpie for the current or future financial years would
necessarily match or exceed the historical published earnings or earnings per
share for musicMagpie.

Requesting hard copy documents

In accordance with Rule 30.3 of the Takeover Code, musicMagpie Shareholders,
persons with information rights and participants in the musicMagpie Share
Plans may request a hard copy of this announcement by contacting musicMagpie's
registrars, Equiniti Limited. musicMagpie Shareholders can: (i) submit a
request in writing to Equiniti Limited, Aspect House, Spencer Road, Lancing,
West Sussex, BN99 6DA, United Kingdom; or (ii) call +44 (0) 121 415 7019.
Calls are charged at the standard geographical rate and will vary by provider.
Calls outside the United Kingdom will be charged at the applicable
international rate. Phone lines are open between 8.30 a.m. and 5.30 p.m.
(London time), Monday to Friday (excluding public holidays in England and
Wales).

For persons who receive a copy of this announcement in electronic form or via
a website notification, a hard copy of this announcement will not be sent
unless so requested. Such persons may also request that all future documents,
announcements and information to be sent to them in relation to the
Acquisition should be in hard copy form.

Electronic communications

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

Rule 2.9 disclosure

In accordance with Rule 2.9 of the Takeover Code, musicMagpie confirms that,
as at the Latest Practicable Date, it had in issue 107,808,287 ordinary shares
of £0.01 each. The International Securities Identification Number (ISIN) for
musicMagpie Shares is GB00BKY4XG48.

Rounding

Certain figures included in this announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of figures that precede them.

 

 

APPENDIX 1

CONDITIONS TO AND CERTAIN FURTHER TERMS OF THE ACQUISITION

PART A: CONDITIONS TO THE SCHEME AND THE ACQUISITION

Long Stop Date

1.         The Acquisition will be conditional upon the Scheme
becoming unconditional and becoming Effective, subject to the provisions of
the Takeover Code, by no later than 11.59 p.m. on the Long Stop Date.

Scheme approval condition

2.         The Scheme will be conditional upon:

(A)       (i) its approval by a majority in number representing not less
than 75 per cent. in value of the Scheme Shareholders who are on the register
of members of musicMagpie (or the relevant class or classes thereof, if
applicable) at the Voting Record Time, present and voting (and entitled to
vote), whether in person or by proxy, at the Court Meeting and at any separate
class meeting which may be required by the Court or at any adjournment of any
such meeting; and (ii) such Court Meeting and any such separate class meeting
or any adjournment of any such meeting being held on or before the 22(nd) day
after the expected date of the Court Meeting to be set out in the Scheme
Document in due course (or such later date, if any, (a) as AO Bidco and
musicMagpie may agree, or (b) (in a competitive situation) as may be specified
by AO Bidco with the consent of the Panel, and in each case that (if so
required) the Court may allow);

(B)       (i) the Resolutions being duly passed by the requisite
majority or majorities at the General Meeting or at any adjournment of that
meeting; and (ii) such General Meeting or any adjournment of such meeting
being held on or before the 22(nd) day after the expected date of the General
Meeting to be set out in the Scheme Document in due course (or such later
date, if any, (a) as AO Bidco and musicMagpie may agree, or (b) (in a
competitive situation) as may be specified by AO Bidco with the consent of the
Panel, and in each case that (if so required) the Court may allow); and

(C)       (i) the sanction of the Scheme by the Court with or without
modification (but subject to any such modification being acceptable to AO
Bidco and musicMagpie) and the delivery of a copy of the Court Order to the
Registrar of Companies; and (ii) the Sanction Hearing being held on or before
the 22(nd) day after the expected date of the Sanction Hearing to be set out
in the Scheme Document in due course (or such later date, if any, (a) as AO
and musicMagpie may agree, or (b) (in a competitive situation) as may be
specified by AO Bidco with the consent of the Panel, and in each case that (if
so required) the Court may allow).

General conditions

3.         In addition, subject as stated in Part B of this Appendix 1
and to the requirements of the Panel, AO Bidco and musicMagpie have agreed
that the Acquisition will be conditional upon the following Conditions and,
accordingly, the necessary actions to make the Scheme Effective will not be
taken unless the following Conditions (as amended if appropriate) have been
satisfied, or, where relevant, waived:

Regulatory

(A)       in respect of AO and each other person (if any) required to
give a notice under section 178(1) FSMA in connection with the Acquisition,
the appropriate regulator (as defined in section 178(2A) FSMA) of each UK
authorised person (as defined in section 191G FSMA) with respect to whom the
Acquisition contemplates an acquisition of or increase in control (within the
meaning of Part XII FSMA):

(i)         having given notice for the purposes of section 189(4)(a)
or section 189(7) FSMA that it has determined to approve such acquisition of
or increase in control on terms (if any) which do not impose any conditions,
obligations or restrictions on the Wider AO Group or the Wider musicMagpie
Group, other than those which are reasonably satisfactory to AO Bidco; or

(ii)        being treated, by virtue of section 189(6) FSMA, as having
approved such acquisition of or increase in control,

where references to FSMA are read, where applicable, with the Financial
Services and Markets Act 2000 (Controllers) (Exemption) Order 2009 (as amended
from time to time);

General Third Party clearances

(B)       other than in respect of or in connection with the Condition
set out in paragraph 3(A) above, the waiver (or non-exercise within any
applicable time limits) by any relevant government or governmental,
quasi-governmental, supranational, statutory, regulatory, environmental,
administrative, fiscal or investigative body, court, trade agency,
association, institution, employee representative body, any entity owned or
controlled by any relevant government or state, or any other body or person
whatsoever in any jurisdiction (each a "Third Party") of any termination
right, right of pre-emption, first refusal or similar right (which is material
in the context of the Wider musicMagpie Group taken as a whole or in the
context of the Acquisition) arising as a result of or in connection with the
Scheme or the Acquisition;

(C)       other than in respect of or in connection with the Condition
set out in paragraph 3(A) above, all notifications, filings or applications
which are deemed necessary or appropriate by AO Bidco in any jurisdiction
having been made in connection with the Acquisition and all statutory or
regulatory obligations in any jurisdiction having been complied with in
connection with the Acquisition or the acquisition by any member of the Wider
AO Group of any shares or other securities in, or control of, musicMagpie and
all authorisations, orders, recognitions, grants, determinations,
confirmations, consents, licences, clearances, permissions, exemptions and
approvals deemed necessary or appropriate by AO Bidco for or in respect of the
Acquisition including without limitation, its implementation and financing or
the proposed direct or indirect acquisition of any shares or other securities
in, or control of, musicMagpie or any member of the Wider musicMagpie Group by
any member of the Wider AO Group having been obtained in terms and in a form
reasonably satisfactory to AO Bidco from all appropriate Third Parties or
persons with whom any member of the Wider musicMagpie Group has entered into
contractual arrangements and all such authorisations, orders, grants,
recognitions, determinations, confirmations, consents, licences, clearances,
permissions, exemptions and approvals reasonably considered necessary or
appropriate to carry on the business of any member of the Wider musicMagpie
Group which are material in the context of the Wider AO Group or the Wider
musicMagpie Group in each case taken as a whole or in the context of the
Acquisition including, without limitation, its implementation or financing
remaining in full force and effect and all filings necessary for such purpose
having been made and there being no notice or intimation of any intention to
revoke or not to renew any of the same at the time at which the Acquisition
becomes otherwise unconditional and all necessary statutory or regulatory
obligations in any jurisdiction having been complied with;

(D)       other than in respect of or in connection with the Condition
set out in paragraph 3(A) above, and save as Disclosed, no Third Party having
given notice of a decision to take, institute, implement or threaten any
action, proceeding, suit, investigation, enquiry or reference (and, in each
case, not having withdrawn the same), or having required any action to be
taken, or otherwise having done anything, or having enacted, made or proposed
any statute, regulation, decision or order or change to published practice,
and there not continuing to be outstanding any statute, regulation, decision
or order, or having taken any other action or step which would or might:

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

(ii)        require, prevent or delay the divestiture, or materially
alter the terms envisaged for any proposed divestiture by any member of the
Wider AO Group of any shares or other securities (or the equivalent) in any
member of the Wider musicMagpie Group;

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

(iv)       otherwise adversely affect the business, assets, profits or
prospects of any member of the Wider AO Group or of any member of the Wider
musicMagpie Group in each case to an extent which is material in the context
of the Wider AO Group or the Wider musicMagpie Group in each case taken as a
whole or in the context of the Acquisition;

(v)        make the Scheme or Acquisition or, in each case, its
implementation or the acquisition or proposed acquisition by AO Bidco or any
member of the Wider AO Group of any shares or other securities (or the
equivalent) in, or voting or management control of, any member of the Wider
musicMagpie Group void, illegal, and/or unenforceable under the laws of any
jurisdiction, or otherwise, directly or indirectly, restrain, restrict,
prohibit, delay, challenge or otherwise interfere with the same, or impose
additional conditions or obligations with respect thereto;

(vi)       require any member of the Wider AO Group or the Wider
musicMagpie Group to acquire or offer to acquire any shares or other
securities (or the equivalent) in any member of the Wider musicMagpie Group or
the Wider AO Group owned by any third party;

(vii)      impose any limitation on the ability of any member of the
Wider AO Group or any member of the Wider musicMagpie Group to conduct,
integrate or co-ordinate all or any part of their respective businesses with
all or any part of the business of any other member of the Wider AO Group
and/or the Wider musicMagpie Group in a manner which is adverse to and
material in the context of the Wider AO Group and/or the Wider musicMagpie
Group, in each case taken as a whole, or in the context of the Acquisition; or

(viii)     result in any member of the Wider AO Group or the Wider
musicMagpie Group ceasing to be able to carry on business under any name under
which it presently does so,

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

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

(E)       save as Disclosed, there being no provision of any agreement,
arrangement, licence, permit, lease or other instrument to which any member of
the Wider musicMagpie Group is a party or by or to which any such member or
any of its assets is or may be bound, entitled or subject, or any circumstance
which in consequence of the Acquisition, or the acquisition or proposed
acquisition of any shares or other securities (or equivalent) in musicMagpie
or because of a change in the control or management of musicMagpie or
otherwise, could or might reasonably be expected to result in any of the
following (in each case, to an extent which is material in the context of the
Wider musicMagpie Group as a whole) or in the context of the Acquisition:

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

(ii)        any such agreement, arrangement, licence, permit, lease or
instrument or the rights, liabilities, obligations or interests of any such
member thereunder being terminated or adversely modified or affected or any
obligation or liability arising or any action being taken or arising
thereunder;

(iii)       any asset or interest of any such member being or failing to
be disposed of or charged or ceasing to be available to any such member or any
right arising under which any such asset or interest could be required to be
disposed of or charged or could cease to be available to any such member
otherwise than in the ordinary course of business;

(iv)       the creation or enforcement of any mortgage, charge or other
security interest over the whole or any part of the business, property, assets
or interest of any such member;

(v)        the rights, liabilities, obligations or interests of any
such member, or the business of any such member with, any person, firm,
company or body (or any arrangement or arrangements relating to any such
interest or business) being terminated, adversely modified or affected;

(vi)       the value of any such member or its financial or trading
position, profits or prospects being prejudiced or adversely affected;

(vii)      any such member ceasing to be able to carry on business under
any name under which it presently does so;

(viii)     the creation or acceleration of any liability, actual or
contingent, by any such member (including any material tax liability or any
obligation to obtain or acquire any material authorisation, order, grant,
recognition, determination, confirmation, consent, licence, clearance,
permission, exemption, approval, notice, waiver, concession, agreement or
exemption from any Third Party or any person) other than trade creditors or
other liabilities incurred in the ordinary course of business or in connection
with the Acquisition; or

(ix)       the creation of any liability, actual or contingent, by any
such member to make any severance, termination, bonus or other payment to any
of its directors or other officers,

and no event having occurred which, under any provision of any agreement,
arrangement, licence, permit, lease or other instrument to which any member of
the Wider musicMagpie Group is a party or by or to which any such member or
any of its assets may be bound, entitled or subject, would or might reasonably
be expected to result in any of the events or circumstances as are referred to
in sub-paragraphs (i) to (ix) (inclusive) of this paragraph 3(E);

Certain events occurring since 30 November 2023

(F)       save as Disclosed, no member of the Wider musicMagpie Group,
since 30 November 2023, having:

(i)         save as between musicMagpie and wholly-owned subsidiaries
of musicMagpie or for musicMagpie Shares issued under or pursuant to the
exercise of options and vesting of awards granted in the ordinary course under
the musicMagpie Share Plans, issued, or agreed to issue, authorised or
proposed the issue of additional shares of any class or the sale of
musicMagpie Shares out of treasury;

(ii)        save as between musicMagpie and wholly-owned subsidiaries
of musicMagpie or for the grant of options and awards and other rights granted
under the musicMagpie Share Plans, issued or agreed to issue, authorised or
proposed the issue of securities convertible into shares of any class or
rights, warrants or options to subscribe for, or acquire, any such shares or
convertible securities;

(iii)       other than to another member of the musicMagpie Group, prior
to the Acquisition becoming Effective, recommended, declared, paid or made or
proposed to recommend, declare, pay or make any bonus issue, dividend or other
distribution whether payable in cash or otherwise;

(iv)       save for intra-musicMagpie Group transactions, merged with or
demerged from any body corporate or acquired or disposed of or transferred,
mortgaged or charged or created any security interest over any assets or any
right, title or interest in any asset (including shares and trade investments)
or authorised or proposed or announced any intention to propose any merger,
demerger, acquisition or disposal, transfer, mortgage, charge or security
interest, in each case, other than in the ordinary course of business and, in
each case, to the extent material in the context of the Wider musicMagpie
Group taken as a whole or in the context of the Acquisition;

(v)        save for intra-musicMagpie Group transactions, made or
authorised or proposed or announced an intention to propose any change in its
loan capital in each case, to the extent material in the context of the Wider
musicMagpie Group taken as a whole or in the context of the Acquisition;

(vi)       save for intra-musicMagpie Group transactions, issued,
authorised or proposed the issue of, or made any changes in or to, any
debentures or incurred or increased any indebtedness or become subject to any
contingent liability;

(vii)      save for intra-musicMagpie Group transactions, purchased,
redeemed or repaid or announced any proposal to purchase, redeem or repay any
of its own shares or other securities or reduced or, save in respect to the
matters mentioned in sub-paragraphs (i) or (ii) of paragraph 3(F) above, made
any other change to any part of its share capital in each case, to the extent
material in the context of the Wider musicMagpie Group taken as a whole or in
the context of the Acquisition;

(viii)     save for intra-musicMagpie Group transactions, implemented, or
authorised, proposed or announced its intention to implement, any
reconstruction, merger, demerger, amalgamation, scheme, commitment or other
transaction or arrangement;

(ix)       entered into or varied or authorised, proposed or announced
its intention to enter into or vary any contract, transaction, arrangement or
commitment (whether in respect of capital expenditure or otherwise) which is
of a long term, onerous or unusual nature or magnitude or which involves or
could involve an obligation of such nature or magnitude and is material in the
context of the Wider musicMagpie Group taken as a whole or in the context of
the Acquisition;

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

(xi)       waived, compromised or settled any claim which is material in
the context of the Wider musicMagpie Group taken as a whole or in the context
of the Acquisition;

(xii)      made any material alteration to its memorandum or Articles or
other incorporation documents;

(xiii)     been unable, or admitted in writing that it is unable, to pay
its debts or commenced negotiations with one or more of its creditors with a
view to rescheduling or restructuring any of its indebtedness, or having
stopped or suspended (or threatened to stop or suspend) payment of its debts
generally or ceased or threatened to cease carrying on all or a substantial
part of its business, in each case, to the extent that is material to the
Wider musicMagpie Group taken as a whole or in the context of the Acquisition;

(xiv)     entered into any contract, commitment, arrangement or agreement
or passed any resolution or made any offer (which remains open for acceptance)
with respect to or announced any intention to, or proposed to, effect any of
the transactions, matters or events referred to in this paragraph 3(F);

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

(xvi)     made, agreed, consented or procured any change, to:

(a)        the terms of any trust deeds, rules, policies or other
governing documents, constituting any pension scheme(s) or other retirement or
death benefit arrangement established for the directors, former directors,
employees or former employees of any entity in the Wider musicMagpie Group or
their dependents and established by a member of the Wider musicMagpie Group (a
"Relevant Pension Plan");

(b)        the contributions payable to any Relevant Pension Plan or to
the benefits which accrue or to the pensions which are payable thereunder;

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

(d)        the basis upon which the liabilities (including pensions) of
any Relevant Pension Plan are funded, valued or made,

in each case, to the extent material in the context of the Wider musicMagpie
Group taken as a whole or in the context of the Acquisition;

(xvii)    entered into or established any new Relevant Pension Plan;

(xviii)   save as agreed by the Panel (if required) and AO Bidco, proposed,
agreed to provide or modified the terms of any of the musicMagpie Share Plans
or other benefit relating to the employment or termination of employment of a
material category of persons employed by the Wider musicMagpie Group or which
constitutes a material change to the terms or conditions of employment of any
senior employee of the Wider musicMagpie Group;

(xix)     taken (or agreed or proposed to take) any action which requires,
or would require, the consent of the Panel or the approval of musicMagpie
Shareholders in general meeting in accordance with, or as contemplated by,
Rule 21.1 of the Takeover Code;

(xx)      entered into any licence or other disposal of intellectual
property rights of any member of the Wider musicMagpie Group which is material
in the context of the Wider musicMagpie Group taken as a whole or in the
context of the Acquisition; or

(xxi)     save as agreed by the Panel (if required) and AO Bidco, entered
into or varied (or offered to enter into or vary) the terms of, any contract,
commitment, agreement, arrangement or service agreement with any of the
directors or senior executives of any member of the Wider musicMagpie Group;

No adverse change, litigation or regulatory enquiry since 30 November 2023

(G)       save as Disclosed, since 30 November 2023:

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

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

(iii)       no contingent or other liability of any member of the Wider
musicMagpie Group having arisen or become apparent to AO Bidco or increased
which has or might reasonably be expected to adversely affect any member of
the Wider musicMagpie Group in a way that is material to the Wider musicMagpie
Group taken as a whole or in the context of the Acquisition;

(iv)       no member of the Wider musicMagpie Group having conducted its
business in breach of any applicable law or regulation which is material in
the context of the Wider musicMagpie Group taken as a whole or in the context
of the Acquisition; or

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

No discovery of certain matters

(H)       save as Disclosed, AO Bidco not having discovered:

(i)         that any financial, business or other information
concerning the Wider musicMagpie Group as contained in the information
publicly disclosed at any time by or on behalf of any member of the Wider
musicMagpie Group is materially misleading, contains a material
misrepresentation of fact or omits to state a fact necessary to make that
information not misleading, and which was not subsequently corrected before
the date of this announcement by disclosure either publicly or otherwise to AO
Bidco or its professional advisers, in each case, to the extent material in
the context of the Wider musicMagpie Group taken as a whole or in the context
of the Acquisition;

(ii)        that any member of the Wider musicMagpie Group or
partnership, company or other entity in which any member of the Wider
musicMagpie Group has a significant economic interest and which is not a
subsidiary undertaking of musicMagpie is, otherwise in the ordinary course of
business, subject to any liability (contingent or otherwise), in each case, to
the extent material in the context of the Wider musicMagpie Group taken as a
whole or in the context of the Acquisition; or

(iii)       any information which affects the import of any information
Disclosed at any time by or on behalf of any member of the Wider musicMagpie
Group and which is material in the context of the Wider musicMagpie Group
taken as a whole or in the context of the Acquisition;

Environmental

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

(J)        there is, or is reasonably likely to be, for any reason
whatsoever, any liability (actual or contingent) of any past or present member
of the Wider musicMagpie Group to make good, remediate, repair, reinstate or
clean up any property or any controlled waters now or previously owned,
occupied, operated or made use of or controlled by any such past or present
member of the Wider musicMagpie Group (or on its behalf) or by any person for
which a member of the Wider musicMagpie Group is or has been responsible, or
in which any such member may have or previously have had or be deemed to have
had an interest, under any environmental legislation, regulation, notice,
circular or order of any Third Party and which is material in the context of
the Wider musicMagpie Group taken as a whole or in the context of the
Acquisition;

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

(L)        circumstances exist whereby a person or class of persons
would be likely to have any claim or claims in respect of any product or
process of manufacture or materials used therein currently or previously
manufactured, sold or carried out by any past or present member of the Wider
musicMagpie Group which claim or claims would be likely to affect any member
of the Wider musicMagpie Group and which is material in the context of the
Wider musicMagpie Group taken as a whole or in the context of the Acquisition;

Intellectual Property

(M)      save as Disclosed, AO Bidco not having discovered that any
circumstance has arisen or event has occurred in relation to any intellectual
property owned or used by any member of the Wider musicMagpie Group which
would be reasonably expected to have a material adverse effect on the Wider
musicMagpie Group taken as a whole or is otherwise material in the context of
the Acquisition, including:

(i)         any member of the Wider musicMagpie Group losing its title
to any intellectual property material to its business, or any intellectual
property owned by the Wider musicMagpie Group and material to its business
being revoked, cancelled or declared invalid; or

(ii)        any agreement regarding the use of any intellectual
property licensed to or by any member of the Wider musicMagpie Group being
terminated or varied;

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

(N)       save as Disclosed, AO Bidco not having discovered that:

(i)         any:

(a)        past or present member, director, officer or employee of the
Wider musicMagpie Group, in connection with their position in the Wider
musicMagpie Group, is or has at any time engaged in any activity, practice or
conduct (or omitted action) which would constitute an offence under the
Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977 or any other
applicable anti-corruption or anti-bribery law, rule or regulation or any
other applicable law, rule, or regulation concerning improper payments or
kickbacks; or

(b)        person that performs or has performed services for or on
behalf of any member of the Wider musicMagpie Group is or has at any time
engaged in any activity, practice or conduct (or omitted action) in connection
with the performance of such services which would constitute an offence under
the Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977 or any
other applicable anti-corruption or anti-bribery law, rule or regulation or
any other applicable law, rule, or regulation concerning improper payments or
kickbacks; or

(ii)        any asset of any member of the Wider musicMagpie Group
constitutes criminal property as defined by section 340(3) of the Proceeds of
Crime Act 2002 (but disregarding paragraph (b) of that definition) or proceeds
of crime under any other applicable law, rule, or regulation concerning money
laundering or proceeds of crime or any member of the Wider musicMagpie Group
is found to have engaged in activities constituting money laundering under any
applicable law, rule, or regulation concerning money laundering;

(iii)       any past or present member, director, officer or employee of
the Wider musicMagpie Group, or any other person for whom any such person may
be liable or responsible, is or has engaged in any conduct which would violate
applicable economic sanctions or dealt with, made any investments in, made any
funds or assets available to or received any funds or assets from:

(a)        any government, entity or individual in respect of which US,
UK or EU persons, or persons operating in those territories, are prohibited
from engaging in activities or doing business, or from receiving or making
available funds or economic resources, by US, UK or EU laws or regulations,
including the economic sanctions administered by the United States Office of
Foreign Assets Control or HM Revenue and Customs;

(b)        any government, entity or individual targeted by any of the
economic sanctions of the United Nations, the US, the UK, the EU or any of its
respective member states, save that this shall not apply if and to the extent
that it is or would be unenforceable by reason of breach of any applicable
Blocking Law;

(iv)       any member of the Wider musicMagpie Group has engaged in a
transaction which would cause the Wider AO Group to be in breach of any law or
regulation on completion of the Acquisition, including the economic sanctions
administered by the United States Office of Foreign Assets Control or HM
Treasury and Customs or any government, entity or individual targeted by any
of the economic sanctions of the United Nations, the US or the EU or any of
its respective member states;

(v)        any past or present member, director, officer or employee of
the Wider musicMagpie Group, or any other person for whom any such person may
be liable or responsible:

(a)        has engaged in conduct which would violate any relevant
anti-terrorism laws, rules, or regulations;

(b)        has engaged in conduct which would violate any relevant
anti-boycott law, rule, or regulation or any applicable export controls;

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

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

(vi)       any member of the Wider musicMagpie Group is or has been
engaged in any transaction which would cause AO Bidco or any member of the
Wider AO Group to be in breach of any law or regulation upon its acquisition
of musicMagpie, including but not limited to the economic sanctions of the
United States Office of Foreign Assets Control, or HM Revenue and Customs, or
any other relevant government authority.

 

PART B: FURTHER TERMS OF THE ACQUISITION

1.         Subject to the requirements of the Panel and the Takeover
Code, AO Bidco reserves the right in its sole discretion to waive:

(A)       the deadline set out in paragraph 1 of Part A of this Appendix
1, and any of the deadlines set out in paragraph 2 of Part A of this Appendix
1 for the timing of the Court Meeting, the General Meeting and the Sanction
Hearing. If any such deadline is not met, AO Bidco shall make an announcement
by 8.00 a.m. on the Business Day following such deadline confirming whether it
has invoked or waived the relevant Condition or agreed with musicMagpie (or,
as the case may be, the Panel) to extend the deadline in relation to the
relevant Condition; and

(B)       in whole or in part, all or any of the Conditions set out in
paragraphs 3(A) to 3(N) (inclusive) of Part A of this Appendix 1. For the
avoidance of doubt, AO Bidco may not waive the Conditions set out in
paragraphs 2(A)(i), 2(B)(i) and 2(C)(i) of Part A of this Appendix 1.

2.         Conditions 2(A) and 2(B) (inclusive) must each be satisfied
or (if capable of wavier) be waived by AO Bidco by no later than 11.59 p.m. on
the date immediately preceding the date of the Sanction Hearing. AO Bidco
shall be under no obligation to waive (if capable of waiver), to determine to
be or remain satisfied or to treat as satisfied any of Conditions set out in
paragraphs 3(A) to 3(N) (inclusive) of Part A of this Appendix 1 that it is
entitled (with the consent of the Panel and subject to the requirements of the
Takeover Code) to invoke, by a date earlier than the latest date specified
above for the fulfilment or waiver thereof, notwithstanding that the other
Conditions may at such earlier date have been waived or fulfilled and that
there are at such earlier date no circumstances indicating that any such
Conditions may not be capable of fulfilment.

3.         Under Rule 13.5(a) of the Takeover Code, AO Bidco may not
invoke a Condition so as to cause the Acquisition not to proceed, to lapse or
to be withdrawn unless the circumstances which give rise to the right to
invoke the Condition are of material significance to AO Bidco in the context
of the Acquisition. This will be judged by reference to the facts of each case
at the time that the relevant circumstances arise. Conditions 1, 2(A), 2(B)
and 2(C) of Part A of this Appendix 1, and if applicable, any acceptance
condition if the Acquisition is implemented by means of a Takeover Offer, are
not subject to Rule 13.5(a) of the Takeover Code. AO Bidco may only invoke a
Condition that is subject to Rule 13.5(a) with the consent of the Panel and
any Condition that is subject to Rule 13.5(a) may be waived by AO Bidco.

4.         If AO Bidco is required by the Panel to make an offer for
musicMagpie Shares under the provisions of Rule 9 of the Takeover Code, AO
Bidco may make such alterations to any of the above Conditions and the terms
of the Acquisition as are necessary to comply with the provisions of Rule 9.

5.         AO Bidco reserves the right to elect to implement the
Acquisition by way of a Takeover Offer as an alternative to the Scheme,
subject to the Panel's consent (where necessary) and the terms of the
Co-operation Agreement. In such an event, the Acquisition will be implemented
on the same terms and conditions as those that would apply to the Scheme
(subject to: (i) appropriate amendments including (without limitation) the
inclusion of an acceptance condition set at 90 per cent. of the musicMagpie
Shares to which such Takeover Offer relates (or such lesser percentage as AO
Bidco and musicMagpie may, subject to the rules of the Takeover Code and the
terms of the Co-operation Agreement and with the consent of the Panel, decide,
being in any case more than 50 per cent. of the musicMagpie Shares); (ii) any
amendments required by, or deemed appropriate by, AO Bidco under applicable
law; or (iii) any amendments necessary to reflect the Takeover Offer).
Further, if the Takeover Offer becomes or is declared unconditional and
sufficient acceptances of such Takeover Offer are received and/or sufficient
musicMagpie Shares are otherwise acquired, it is the intention of AO Bidco to
apply the provisions of the Companies Act to acquire compulsorily any
outstanding musicMagpie Shares to which such Takeover Offer relates.

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

7.         musicMagpie Shares which will be acquired pursuant to the
Acquisition will be acquired fully paid 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 hereafter attaching or accruing to them, including voting rights
and the right to receive and retain in full all dividends and other
distributions (if any) declared, made or paid or any other return of capital
or value (whether by reduction of share capital or share premium account or
otherwise) by reference to a record date after the Effective Date.

8.         If, on or after the date of this announcement and prior to
the Acquisition becoming Effective, any dividend, distribution or other return
of capital or value is announced, declared, made or paid by musicMagpie or
becomes payable by musicMagpie in respect of the musicMagpie Shares, AO Bidco
reserves the right (without prejudice to any right of AO Bidco, with the
consent of the Panel, to invoke the Condition set out in paragraph 3(F)(iii)
of Part A to this Appendix 1) to reduce the Consideration that would be
payable under the terms of the Acquisition for the musicMagpie Shares by an
amount up to the aggregate amount of such dividend and/or distribution and/or
other return of capital or value, in which case any reference in this
announcement to the Consideration payable under the terms of the Acquisition
will be deemed to be a reference to the Consideration as so reduced. In such
circumstances, musicMagpie Shareholders would be entitled to receive and
retain any such dividend and/or other distribution and/or return of capital or
value to which they are entitled. Any exercise by AO Bidco of its rights
referred to in this paragraph 8 shall be the subject of an announcement and,
for the avoidance of doubt, shall not be regarded as constituting any revision
or variation of the terms of the Scheme or the Acquisition.

9.         The Acquisition will be governed by the laws of England and
Wales and be subject to the jurisdiction of the English Courts and to the
Conditions and certain further terms which are set out in this Appendix 1 and
to the full terms which will be set out in the Scheme Document. The
Acquisition will be subject to the applicable requirements of the Takeover
Code, the Panel, the FCA, the London Stock Exchange, the AIM Rules and the
Registrar of Companies.

10.       The Acquisition will not be made, directly or indirectly, in
or into, or by use of the mails of, or by any means or instrumentality
(including, without limitation, facsimile transmission, telex, telephone,
internet or e-mail) of interstate or foreign commerce of, or of any facility
of, any Restricted Jurisdiction.

11.       The availability of the Acquisition to persons not resident in
the United Kingdom may be affected by the laws of the relevant jurisdictions.
Any persons who are subject to the laws of any jurisdiction other than the
United Kingdom should inform themselves about and observe any applicable
requirements.

APPENDIX 2

BASES AND SOURCES

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

·    musicMagpie's fully diluted equity value has been calculated on the
basis of a fully diluted issued ordinary share capital of 110,056,287
musicMagpie Shares, calculated as:

 

o  107,808,287 musicMagpie Shares in issue on the Latest Practicable Date;
plus

 

o  10,852,909 musicMagpie Shares to be issued on the expected exercise of
options granted or expected to be granted under the musicMagpie Share Plans
being the expected number of musicMagpie Shares which could be issued on or
after the date of this Announcement on the exercise of options under the
musicMagpie Share Plans; less

 

o  8,604,909 musicMagpie Shares as at the Latest Practicable Date, held by
the Employee Benefit Trust that can be used to satisfy the exercise of options
granted under the musicMagpie Share Plans.

 

·    The premium calculations to the price per musicMagpie Share used in
this announcement have been calculated by reference to:

 

o  the Closing Price on the Latest Practicable Date of 5.75 pence per
musicMagpie Share;

 

o  the one-month volume weighted average Closing Price of 5.75 pence per
musicMagpie Share as at the Latest Practicable Date; and

 

o  the three-month volume weighted average Closing Price of 6.12 pence per
musicMagpie Share as at the Latest Practicable Date 2024.

 

·    The volume-weighted average prices for the musicMagpie Shares
referred to in this announcement have been derived from Bloomberg.

 

·    Certain figures included in this Announcement have been subject to
rounding adjustments.

 

 

·    The financial information concerning musicMagpie has been extracted
from the Annual Report and Accounts of musicMagpie for the year ended 30
November 2023, which were published on 2 April 2024 or extracted from the
Interim Results of musicMagpie for the six months ended 31 May 2024, which
were published on 28 June 2024.

APPENDIX 3

DETAILS OF IRREVOCABLE UNDERTAKINGS AND LETTERS OF INTENT

From musicMagpie Directors as shareholders

The following musicMagpie Directors have each given an irrevocable undertaking
to vote (or procure the voting, as applicable) in favour of the Scheme at the
Court Meeting and the Resolutions at the General Meeting, or to accept, or
procure the acceptance of, the Takeover Offer (if the Acquisition is
implemented as a Takeover Offer), in respect of their interests (and, in the
case of one musicMagpie Director, those of a connected person) in musicMagpie
Shares:

 Name              Number of musicMagpie Shares in respect of which undertaking is given  Percentage of musicMagpie's issued share capital
 Martin Hellawell  947,738                                                                0.88%
 Steve Oliver(1)   12,066,839                                                             11.19%
 Matthew Fowler    175,000                                                                0.16%
 Dave Wilson       51,183                                                                 0.05%
 Total             13,240,760                                                             12.28%

(1) This includes the beneficial holding of his spouse.

The irrevocable undertakings given by musicMagpie Directors will continue to
be binding in the event that a higher competing offer is made for musicMagpie.

The irrevocable undertakings given by the musicMagpie Directors will lapse and
cease to be binding on and from the earlier of the following occurrences:

·    the Scheme Document is not published within 28 days (or such longer
period as the Panel may agree) of the date of this announcement or the Offer
Document (as applicable) not being posted to musicMagpie Shareholders within
28 days of the date of this announcement (or such longer period as the Panel
may agree), provided that if the Acquisition was initially being implemented
by way of a Scheme, and AO Bidco elects to exercise its right to implement the
Acquisition by way of a Takeover Offer (with the consent of the Panel) or vice
versa, the time period shall be extended to refer to within 28 days of the
issue of the press announcement announcing the change in structure (or such
other date for the posting of the Offer Document or Scheme Document (as
applicable) as the Panel may agree or require);

·    the Long Stop Date;

·    AO Bidco announces that it does not intend to proceed with the Offer
and no new, revised or replacement Scheme or Takeover Offer is announced by AO
Bidco in accordance with Rule 2.7 of the Code at the same time;

 

·    the date on which the Offer (whether implemented by way of a Scheme
or a Takeover Offer) is withdrawn or lapses in accordance with its terms, and
no new, revised, or replacement Scheme or Offer has been announced by AO Bidco
in its place or is announced at the same time; or

 

·    any competing offer for the shares of musicMagpie by a third party
not acting in concert with AO Bidco (as defined in the Code) becomes
unconditional (if made by way of a takeover offer) or effective (if proceeding
by way of a scheme of arrangement).

 

From other musicMagpie Shareholders

In addition to the musicMagpie Directors, Ian Storey, Walter Gleeson, Stephen
Richards, CSC Employee Benefit Trustee (Jersey) Limited in its capacity as
trustee of the Employee Benefit Trust, Northern Venture Trust PLC, Northern 2
VCT PLC, Northern 3 VCT PLC, NV2 LP and NVM Nominees Limited have each given
to AO Bidco an irrevocable undertaking to vote in favour (or procure the
voting in favour, as applicable) of the Scheme at the Court Meeting and the
Resolutions to be proposed at the General Meeting (or in the event that the
Acquisition is implemented by way of a Takeover Offer, to accept or procure
the acceptance of such Takeover Offer) in respect of their beneficial holdings
of musicMagpie Shares:

 Name                                                                         Number of musicMagpie Shares in respect of which undertaking is given  Percentage of musicMagpie's issued share capital
 Ian Storey                                                                   2,842,641                                                              2.64%
 Walter Gleeson                                                               5,079,000                                                              4.71%
 Stephen Richards                                                             1,966,607                                                              1.82%
 CSC Employee Benefit Trustee (Jersey) Limited in its capacity as trustee of  8,641,176                                                              8.02%
 the Employee Benefit Trust
 Northern Venture Trust PLC, Northern 2 VCT PLC and Northern 3 VCT PLC        12,345,161                                                             11.45%
 NV2 LP and NVM Nominees Limited                                               1,297,575                                                             1.20%
 Total                                                                          32,172,160                                                           29.84%

The irrevocable undertakings given by Ian Storey, Walter Gleeson, Stephen
Richards, CSC Employee Benefit Trustee (Jersey) Limited in its capacity as
trustee of the Employee Benefit Trust, Northern Venture Trust PLC, Northern 2
VCT PLC, Northern 3 VCT PLC, NV2 LP and NVM Nominees Limited will lapse and
cease to be binding on and from the earlier of the following occurrences:

·    the Scheme Document or the Offer Document (as applicable) has not
been sent to musicMagpie Shareholders within 28 days of the date of this
announcement (or such longer period as the Panel may agree), provided that if
the Acquisition was initially being implemented by way of a Scheme, and AO
Bidco elects to exercise its right to implement the Acquisition by way of a
Takeover Offer or vice versa, the time period shall be extended to refer to
within 28 days of the issue of the press announcement announcing the change in
structure (or such other date for the posting of the Offer Document or Scheme
Document (as applicable) as the Panel may agree or require);

 

·    the Long Stop Date;

 

·    AO Bidco announces that it does not intend to proceed with the Offer
and no new, revised or replacement Scheme or Takeover Offer is announced by AO
Bidco in accordance with Rule 2.7 of the Code at the same time;

 

·    the date on which the Offer (whether implemented by way of a Scheme
or a Takeover Offer) is withdrawn or lapses in accordance with its terms, and
no new, revised, or replacement Scheme or Offer has been announced by AO Bidco
in its place or is announced at the same time; or

 

·    any competing offer for the shares of musicMagpie by a third party
not acting in concert with AO Bidco (as defined in the Code) becomes or is
declared unconditional (if made by way of a takeover offer) or effective (if
proceeding by way of a scheme of arrangement).

In addition to the circumstances noted above, the irrevocable undertaking
given by Northern Venture Trust PLC, Northern 2 VCT PLC and Northern 3 VCT PLC
will also cease to be binding if any person other than AO Bidco or any person
acting in concert (as defined in the Takeover Code) with AO Bidco announces
prior to 11.59 p.m. (London time) on the Long Stop Date (a "Relevant
Announcement") a firm intention (in accordance with Rule 2.7 of the Takeover
Code) to make an offer to acquire all the equity share capital of musicMagpie
(other than that already owned by the person making such offer), at a price or
in exchange for such number of shares (or other securities) that represents an
increase in value when compared to the consideration under the Acquisition of
at least 10 per cent. more than the Consideration and is not subject to any
pre-conditions (a "Qualifying Competing Offer") unless AO Bidco announces a
firm intention to make a revised offer for all of the ordinary shares in
musicMagpie not already owned by it (or by persons acting in concert with it)
which is not subject to any pre-conditions for an equivalent or improved
consideration (in the reasonable opinion of AO Bidco's financial adviser,
Jefferies) to that available under such Qualifying Competing Offer by 5.00
p.m. on the tenth Business Day after the date of the Relevant Announcement or
unless the Qualifying Competing Offer lapses or is withdrawn by 5.00 p.m. on
such date.

 

AO Bidco has received a letter of intent to vote, or procure the voting, in
favour of the Scheme at the Court Meeting and the Resolutions to be proposed
at the General Meeting (or in the event that the Acquisition is implemented by
way of a Takeover Offer, to accept or procure the acceptance of such Takeover
Offer) from Schroder Investment Management Limited, representing, in
aggregate, approximately 11.84 per cent. of the total issued share capital of
musicMagpie (as at the Latest Practicable Date).

APPENDIX 4
DEFINITIONS

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

 "Acquisition"                     the cash acquisition of the entire issued and to be issued share capital of
                                   musicMagpie by AO Bidco, a wholly-owned subsidiary of AO, to be implemented by
                                   way of the Scheme or, should AO Bidco so elect (with the consent of the Panel
                                   and subject to the terms of the Co-operation Agreement) by way of the Takeover
                                   Offer, and, where the context admits, any subsequent revision, variation,
                                   extension or renewal thereof;
 "AIM"                             the market of that name operated by the London Stock Exchange;
 "AIM Rules"                       the AIM Rules for Companies published by the London Stock Exchange from time
                                   to time;
 "AO"                              AO World PLC, a public limited company incorporated in England and Wales
                                   (registered number 05525751) and whose registered office is at Unit 5a The
                                   Parklands, Lostock, Bolton, BL6 4SD;
 "AO Bidco"                        AO Ltd, a private limited company incorporated in England and Wales
                                   (registered number 06861978) and whose registered office is at Unit 5a The
                                   Parklands, Lostock, Bolton, BL6 4SD;
 "AO Board"                        the board of directors of AO;
 "AO Group"                        AO and its subsidiary undertakings for the time being;
 "Articles"                        the articles of association of musicMagpie for the time being;
 "Blocking Law"                    (i) any provision of Council Regulation (EC) No 2271/1996 of 22 November 1996
                                   (or any law or regulation implementing such Regulation in any member state of
                                   the European Union or the United Kingdom); (ii) any provision of Council
                                   Regulation (EC) No 2271/1996 of 22 November 1996, as it forms part of domestic
                                   law of the United Kingdom by virtue of the European Union (Withdrawal) Act
                                   2018; or (iii) any similar blocking or anti-boycott law;
 "Business Day"                    a day (not being a Saturday, Sunday, public or bank holiday) on which banks
                                   are open for general banking business in the City of London;
 "Closing Price"                   the closing middle market quotation for a musicMagpie Share on the day to
                                   which such price relates, derived from Bloomberg;
 "Combined Group"                  the AO Group as enlarged following the Acquisition becoming Effective;
 "Companies Act"                   the Companies Act 2006;
 "Completion"                      the Acquisition becoming Effective in accordance with its terms;
 "Conditions"                      the conditions to which the Acquisition is subject, as set out in Part A of
                                   Appendix 1 to this announcement and to be set out in the Scheme Document;
 "Confidentiality Agreement"       the confidentiality agreement entered into between AO and musicMagpie on 15
                                   December 2023, a summary of which is set out in paragraph 12 of this
                                   announcement;
 "Consideration"                   9.07 pence in cash per musicMagpie Share;
 "Co-operation Agreement"          the co-operation agreement entered into between AO Bidco and musicMagpie on 2
                                   October 2024, a summary of which is set out in paragraph 12 of this
                                   announcement;
 "Court"                           the High Court of Justice in England and Wales;
 "Court Meeting"                   the meeting of Scheme Shareholders to be convened by order of the Court
                                   pursuant to section 899 of the Companies Act for the purpose of considering
                                   and, if thought fit, approving the Scheme (with or without amendment) and any
                                   adjournment thereof;
 "Court Order"                     the order of the Court sanctioning the Scheme under section 899 of the
                                   Companies Act;
 "CREST"                           the relevant system (as defined in the Uncertificated Securities Regulations
                                   2001 (SI 2001/3755)) in respect of which Euroclear UK & International
                                   Limited is the Operator (as defined in such Regulations));
 "Dealing Disclosure"              has the meaning given in Rule 8 of the Takeover Code;
 "Disclosed"                       (a)    disclosed in musicMagpie's annual report and accounts for the year
                                   ended 30 November 2023;

                                   (b)    disclosed in musicMagpie's announcement of its unaudited interim
                                   results for the six months ended 31 May 2024;

                                   (c)    fairly disclosed in writing prior to the date of this announcement
                                   by, or on behalf of, musicMagpie to AO Bidco (or its respective officers,
                                   employees, agents or advisers in their capacity as such), including (without
                                   limitation) via the virtual data room operated on behalf of musicMagpie in
                                   respect of the Acquisition or via email;

                                   (d) as otherwise publicly announced prior to the date of this announcement by
                                   musicMagpie (by delivery of an announcement to a Regulatory Information
                                   Service); or

                                   (e)    disclosed in this announcement;
 "Effective"                       either:
                                   (a)    if the Acquisition is implemented by way of Scheme, the Scheme
                                   having become effective pursuant to its terms; or

                                   (b)    if the Acquisition is implemented by way of Takeover Offer, the
                                   Takeover Offer having been declared or having become unconditional in
                                   accordance with the requirements of the Takeover Code;
 "Effective Date"                  the date on which the Acquisition becomes Effective in accordance with its
                                   terms;
 "Employee Benefit Trust"          the musicMagpie Employee Benefit Trust;
 "EU"                              European Union;
 "Excluded Shares"                 any musicMagpie Shares: (a) registered in the name of, or beneficially owned
                                   by, any member of the AO Group (or any person as nominee for any such member
                                   of the AO Group); or (b) held by musicMagpie in treasury as at the Scheme
                                   Record Time;
 "FCA"                             the Financial Conduct Authority or any successor regulatory authority;
 "Forms of Proxy"                  the forms of proxy for use by musicMagpie Shareholders in connection with each
                                   of the Court Meeting and the General Meeting, which shall accompany the Scheme
                                   Document;
 "FSMA"                            the Financial Services and Markets Act 2000;
 "General Meeting"                 the general meeting of musicMagpie Shareholders to be convened to consider
                                   and, if thought fit, approve the Resolutions (with or without amendment)
                                   including any adjournment, postponement or reconvening thereof;
 "Jefferies"                       Jefferies International Limited;
 "Latest Practicable Date"         the last Business Day before the date of this announcement, being 1 October
                                   2024;
 "London Stock Exchange"           London Stock Exchange plc;
 "Long Stop Date"                  2 April 2025 or such later date, if any, (a) as AO Bidco and musicMagpie may
                                   agree, or (b) (in a competitive situation) as may be specified by AO Bidco
                                   with the consent of the Panel, and in each case that (if so required) the
                                   Court may allow;
 "Market Abuse Regulation"         Regulation (EU) No 596/2014, as it forms part of domestic law of the United
                                   Kingdom by virtue of the European Union (Withdrawal) Act 2018, as amended from
                                   time to time;
 "Meetings"                                                                  the Court Meeting and the General Meeting;
 "musicMagpie"                     musicMagpie PLC, a public limited company incorporated in England and Wales
                                   (registered number 12977343) and whose registered office is at Stockport
                                   Exchange, Railway Road, Stockport, England, SK1 3SW;
 "musicMagpie Board"               the board of directors of musicMagpie;
 "musicMagpie Directors"           the directors of musicMagpie as at the date of this announcement;
 "musicMagpie Group"               musicMagpie and its subsidiary undertakings for the time being;
 "musicMagpie Share Plans"         the Entertainment Magpie Group Limited Unapproved Scheme, the Entertainment
                                   Magpie Group Limited Unapproved G & H Share Scheme 2021, the musicMagpie
                                   Savings Related Share Option Scheme, the musicMagpie International Savings
                                   Related Share Option Scheme, the musicMagpie Long Term Incentive Plan and the
                                   musicMagpie Share Option Plan, each as amended from time to time;
 "musicMagpie Shareholders"        the holders of musicMagpie Shares;
 "musicMagpie Shares"              the ordinary shares of £0.01 each in the capital of musicMagpie;
 "Offer Document"                  should the Acquisition be implemented by means of the Takeover Offer, the
                                   document to be sent to musicMagpie Shareholders which will contain, amongst
                                   other things, the terms and conditions of the Takeover Offer;
 "Offer Period"                    the offer period (as defined in the Takeover Code) relating to musicMagpie
                                   which commenced on 20 November 2023;
 "Opening Position Disclosure"     has the meaning given in Rule 8 of the Takeover Code;
 "Overseas Shareholders"           musicMagpie Shareholders who are resident in, ordinarily resident in, or
                                   citizens of, jurisdictions outside the United Kingdom;
 "Panel"                           the Panel on Takeovers and Mergers in the United Kingdom;
 "Registrar of Companies"          the Registrar of Companies in England and Wales;
 "Regulatory Information Service"  a primary information provider (as defined in the FCA's Handbook of Rules and
                                   Guidance);
 "Relevant Pension Plan"           has the meaning given in paragraph 3(F)(xvi) of Part A of Appendix 1;
 "Resolutions"                     the resolutions to be proposed at the General Meeting in connection with the
                                   implementation of the Acquisition, including, amongst other things, to make
                                   certain amendments to the Articles;
 "Restricted Jurisdiction"         any jurisdiction where local laws or regulations may result in a significant
                                   risk of civil, regulatory or criminal exposure if information concerning the
                                   Acquisition is sent or made available to musicMagpie Shareholders in that
                                   jurisdiction;
 "Sanction Hearing"                the hearing of the Court to sanction the Scheme under section 899 of the
                                   Companies Act;
 "Scheme"                          the proposed scheme of arrangement under Part 26 of the Companies Act between
                                   musicMagpie and Scheme Shareholders to implement the Acquisition to be set out
                                   in the Scheme Document, with or subject to any modification, addition or
                                   condition approved or imposed by the Court and agreed by AO Bidco and
                                   musicMagpie;
 "Scheme Document"                 the document to be dispatched to musicMagpie Shareholders and other persons
                                   with information rights setting out, amongst other things, the details of the
                                   Acquisition, the full terms and conditions of the Scheme and containing
                                   notices convening the Meetings;
 "Scheme Record Time"              the time and date specified as such in the Scheme Document, expected to be
                                   6.00 p.m. on the day of the Sanction Hearing, or such other time as AO Bidco
                                   and musicMagpie may agree;
 "Scheme Shareholder"              a holder of Scheme Shares;
 "Scheme Shares"                   all musicMagpie Shares:
                                   (a)    in issue at the date of the Scheme Document;

                                   (b)    (if any) issued after the date of the Scheme Document and prior to
                                   the Voting Record Time; and

                                   (c)    (if any) issued at or after the Voting Record Time and prior to the
                                   Scheme Record Time in respect of which the original or any subsequent holder
                                   thereof is bound by the Scheme, or shall by such time have agreed in writing
                                   to be bound by the Scheme,

                                   but excluding any Excluded Shares;
 "Shore Capital"                   Shore Capital and Corporate Limited or Shore Capital Stockbrokers Limited, as
                                   the context requires;
 "Takeover Code"                   the City Code on Takeovers and Mergers, as amended from time to time;
 "Takeover Offer"                  should the Acquisition be implemented by way of a takeover offer as defined in
                                   Chapter 3 of Part 28 of the Companies Act, the offer to be made by or on
                                   behalf of AO Bidco to acquire the entire issued and to be issued share capital
                                   of musicMagpie and, where the context admits, any subsequent revision,
                                   variation, extension or renewal of such offer;
 "Third Party"                     has the meaning given to it in paragraph 3(B) of Part A of Appendix 1;
 "UK" or "United Kingdom"          the United Kingdom of Great Britain and Northern Ireland;
 "US" or "United States"           the United States of America, its territories and possessions, any state of
                                   the United States of America and the District of Columbia;
 "Voting Record Time"              the time and date to be specified in the Scheme Document by reference to which
                                   entitlement to vote at the Court Meeting will be determined, expected to be
                                   6.00 p.m. on the day falling two Business Days prior to the Court Meeting or
                                   any adjournment thereof (as the case may be);
 "Wider AO Group"                  AO and its subsidiary undertakings, associated undertakings and any other
                                   undertaking in which AO and/or such undertakings (aggregating their interests)
                                   have a significant interest (in each case, from time to time) but excluding
                                   the Wider musicMagpie Group; and
 "Wider musicMagpie Group"         musicMagpie and its subsidiary undertakings, associated undertakings and any
                                   other undertaking in which musicMagpie and/or such undertakings (aggregating
                                   their interests) have a significant interest (in each case, from time to time)
                                   but excluding the Wider AO Group.

All references to GBP, pence, Sterling, Pounds, Pounds Sterling, p or £ are
to the lawful currency of the United Kingdom.

All references to a statutory provision or law or to any order or regulation
shall be construed as a reference to that provision, law, order or regulation
as extended, modified, amended, replaced or re-enacted from time to time and
all statutory instruments, regulations and orders from time to time made
thereunder or deriving validity therefrom.

All times referred to are London time unless otherwise stated.

References to the singular include the plural and vice versa.

The terms "subsidiary undertaking" and "undertaking" have the meanings given
by the Companies Act. The term "associated undertaking" has the meaning given
by paragraph 19 of Schedule 6 to the Large and Medium-sized Companies and
Groups (Accounts and Reports) Regulations 2008, other than paragraph 19(1)(b)
of Schedule 6 to those regulations which shall be excluded for this purpose.
The term "significant interest" means a direct or indirect interest in 20 per
cent. or more of the total voting rights conferred by the equity share capital
(as defined in section 548 of the Companies Act).

 

 

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