Parallel Media Group plc (Incorporated and registered in England and Wales with registered number ) (ISIN GB00B605QQ41)

Transcription

1 THIS DOCUMENT AND ANY ACCOMPANYING DOCUMENTS ARE IMPORTANT AND REQUIRE YOUR IMMEDIATE ATTENTION. If you are in any doubt about the contents of this document or the action you should take, you should immediately consult your stockbroker, bank manager, solicitor, accountant, or other independent financial adviser duly authorised under the Financial Services and Markets Act 2000 ( FSMA ) who specialises in advising on the acquisition of shares and other securities in the United Kingdom. The whole of this document should be read, but prospective investors should carefully consider the section entitled Risk Factors in Part II of this document before taking any action. All statements regarding the Company s business, financial position, and prospects should be viewed in light of the Risk Factors set out in Part II of this document. If you have sold or otherwise transferred, or you sell or otherwise transfer, all of your holding of Existing Ordinary Shares prior to the Ex-entitlement Date, please send this document, the Form of Proxy and, if you are a Qualifying non-crest Shareholder, the accompanying Application Form at once to the purchaser or transferee or to the stockbroker, bank or other agent through or by whom the sale or transfer was or is effected, for onward delivery to the purchaser or transferee, except that such documentation should not be sent into any Restricted Jurisdiction. If you have sold or otherwise transferred or sell or otherwise transfer all or some of your Existing Ordinary Shares held in an uncertificated form prior to the Ex-entitlement Date, a claim transaction will automatically be generated by Euroclear which on settlement will transfer the appropriate number of Open Offer Entitlements to the purchaser or transferee. If you have sold or transferred part of your holding of Existing Ordinary Shares held in certificated Form prior to the Ex entitlement Date, please contact your stockbroker, bank or other agent through whom the sale or transfer was effected and refer to the instructions regarding split applications set out in the Application Form. The total consideration under the Open Offer is less than 5,000,000 (or an equivalent amount) in aggregate. Therefore, in accordance with section 85 and Schedule 11A of the FSMA, this document is not, and is not required to be, a prospectus for the purposes of the Prospectus Rules and has not been approved by the Financial Conduct Authority or any other authority or regulatory body. This document does not comprise an admission document under the AIM Rules and neither the London Stock Exchange nor the United Kingdom Listing Authority have examined or approved the contents of this document. The rules of AIM are less demanding than those of the Official List. It is emphasised that no application is being made for admission of any of the New Shares to the Official List. The Existing Ordinary Shares are admitted to trading on AIM. Other than in respect of AIM as referred to below, the Open Offer Shares will not be listed dealt on any other recognised investment exchange and no other such application will be made. The Directors and the Company accept responsibility, both collectively and individually, for the information contained in this document, subject to the caveats set out in paragraph 1.1 of Part VI of this document. To the best of the knowledge of the Directors and the Company (who have taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information. AIM is a market designed primarily for emerging or smaller companies to which a higher investment risk tends to be attached than to larger or more established companies. AIM securities are not admitted to the Official List. A prospective investor should be aware of the risks of investing in such companies and should make the decision to invest only after careful consideration and, if appropriate, consultation with an independent financial adviser. This document does not constitute a recommendation regarding securities of the Company. Application has been made for the Enlarged Share Capital to be admitted to trading on AIM, a market operated by the London Stock Exchange ( Admission ). It is anticipated that Admission will become effective and that dealings in the New Ordinary Shares, the Firm Placing Shares and the Open Offer Shares will commence on AIM on 30 December Parallel Media Group plc (Incorporated and registered in England and Wales with registered number ) (ISIN GB00B605QQ41) Firm Placing of up to 641,026 New Shares and Proposed Placing and Open Offer of up to 320,684 New Shares at 156 pence per New Ordinary Share, Capital Reorganisation, Approval of a waiver of the obligations under Rule 9 of the City Code on Takeover and Mergers and Notice of General Meeting Sanlam Securities UK Limited Nominated Adviser and Broker Your attention is drawn to the letter from the Independent Director of the Company which is set out in Part I of this document and which recommends you to vote in favour of the Resolutions to be proposed at the General Meeting referred to below. The distribution of this document, and/or the accompanying documents and/or the transfer of Open Offer Entitlements or otherwise in jurisdictions other than the United Kingdom may be restricted by applicable laws or regulations and this document does not form part of any offer or invitation to sell or issue or the solicitation of any offer to purchase or subscribe for Existing Ordinary Shares or New Ordinary Shares in any jurisdiction where such offer, invitation or solicitation is unlawful. Persons in jurisdictions other than the United Kingdom into whose possession this document comes should inform themselves about and observe any such applicable legal or regulatory requirements in such jurisdiction. Any failure to do so may constitute a violation of the securities laws of any such jurisdiction. This document should not be copied or distributed by recipients and, in particular, should not be distributed, published, including electronic transmission, in, into or from the United States of America, a Restricted Jurisdiction or any other jurisdiction where to do so would be in breach of any applicable law and/or regulation. None of the New Shares, the Open Offer Entitlements, this document or the Application Form has been, or will be, registered under the United States Securities Act of 1933, as amended, or under the securities legislation of any state of the United States or under any applicable securities laws of any other Restricted Jurisdiction. The relevant clearances have not been, and will not be, obtained from the securities commission of any province or territory of Canada. No document in relation to the Fundraising has been, or will be, lodged with, or registered by, the Australian Securities and Investments Commission, or registered under the securities legislation of the Republic of South Africa and no registration statement has been, or will be, filed with the Japanese Ministry of Finance in relation to the Fundraising, this document, the Application Form, the Open Offer Shares or the Open Offer Entitlements. Accordingly, subject to certain exceptions, neither the New Shares nor the Open Offer Entitlements may directly or indirectly be offered, sold, renounced, resold, taken up or delivered in or into the United States or any other Restricted Jurisdiction or offered to, sold to, renounced, taken up or delivered in favour of, or to, a person within the United States or a resident of any other Restricted Jurisdiction. The attention of Overseas Shareholders is drawn to the section headed Overseas Shareholders set out in paragraph 6 of Part IV of this document. The latest time and date for acceptance and payment in full under the Open Offer is a.m. on 24 December The procedure for application and payment is set out in paragraph 4 of Part IV of this document and, for Qualifying non-crest Shareholders only, in the accompanying Application Form. Notice of a General Meeting of Parallel Media Group plc, to be held at the offices of Sanlam Securities UK Limited, 10 King William Street, London EC4N 7TW at a.m. on 27 December 2013 is set out at the end of this document. To be valid the accompanying Form of Proxy for use in connection with the General Meeting should be completed, signed and returned as soon as possible and, in any event, so as to reach Capita Asset Services, PXS, The Registry, 34

2 Beckenham Road, Beckenham, Kent BR3 4TU by not later than 48 hours before the time and date fixed for the General Meeting. Completion and return of a Form of Proxy will not preclude Shareholders from attending and voting at the General Meeting should they so wish. Cautionary note regarding forward-looking statements: This document contains statements about Parallel Media Group plc that are or may be deemed to be forward-looking statements. All statements, other than statements of historical facts, included in this document may be forward-looking statements and are subject to, amongst other things, the Risk Factors described in Part II of this document. Without limitation, any statements preceded or followed by, or that include, the words targets, plans, believes, expects, aims, intends, will, may, should, anticipates, estimate, projects or words or terms of similar substance or the negative thereof, are forward-looking statements. Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects and (ii) business and management strategies and the expansion and growth of the operations of Parallel Media Group plc. These forward-looking statements are not guarantees of future performance and have not been reviewed by the auditors of Parallel Media Group plc. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of any such person, or industry results, to be materially different from any results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are based on numerous assumptions regarding the present and future business strategies of such persons and the environment in which each will operate in the future. Investors should not place undue reliance on such forward-looking statements and, save as is required by law or regulation (including to meet the requirements of the AIM Rules, the City Code (if applicable), the Disclosure and Transparency Rules, the Prospectus Rules and/or the FSMA), Parallel Media Group plc does not undertake any obligation to update publicly or revise any forward-looking statements (including to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based). All subsequent oral or written forward-looking statements attributed to Parallel Media Group plc or any persons acting on their behalf are expressly qualified in their entirety by the cautionary statement above. All forward-looking statements contained in this document are based on information available to the Directors of Parallel Media Group plc at the date of this document, unless some other time is specified in relation to them, and the posting or receipt of this document shall not give rise to any implication that there has been no change in the facts set forth herein since such date. Sanlam Securities UK Limited ( Sanlam Securities ), which is authorised and regulated by the Financial Conduct Authority and is a member of the London Stock Exchange, is acting as nominated adviser and broker to the Company in connection with the Fundraising and is not acting for any other person and will not be responsible to any person other than the Company for providing the protections afforded to clients of Sanlam Securities. Its responsibilities as the Company s nominated adviser under the AIM Rules for Nominated Advisers are owed solely to the London Stock Exchange and are not owed to the Company or to any Director or any other person. No representation or warranty, express or implied, is made by Sanlam Securities as to any of the contents of this document for which the Directors and the Company are responsible (without limiting the statutory rights of any person to whom this document is issued). Sanlam Securities has not authorised the contents of, or any part of, this document, and no liability whatsoever is accepted by Sanlam Securities for the accuracy of information or opinions contained in this document or for the omission of any material information. Sanlam Securities will not be offering advice and will not otherwise be responsible for providing client protections to recipients of this document in respect of the Fundraising or any other arrangements referred to in this document. Qualifying non-crest Shareholders will find an Application Form accompanying this Circular. Qualifying CREST Shareholders (none of whom will receive an Application Form) will receive a credit to their stock accounts in CREST in respect of the Open Offer Entitlements which will be enabled for settlement on 4 December Applications under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim arising out of a sale or transfer of Existing Ordinary Shares prior to the date on which the Existing Ordinary Shares were marked exentitlement by the London Stock Exchange. If the Open Offer Entitlements are for any reason not enabled by 3.00 p.m. on 19 December 2013 or such later date as the Company may decide, an Application Form will be sent to each Qualifying CREST Shareholder in substitution for the Open Offer Entitlements credited to its stock account in CREST. Qualifying CREST Shareholders who are CREST sponsored members should refer to their CREST sponsors regarding the action to be taken in connection with this Circular and the Open Offer. 2

3 Contents Definitions 4 Expected timetable of principal events 12 Fundraising statistics 14 Part I Letter from the Independent Director 15 Page 1. Introduction Background to and reasons for the Fundraising and PCM 16 Agreement 3. Use of the proceeds of the Fundraising Information on the Concert Party City Code on Takeovers and Mergers Conflicts of Interest Capital Reorganisation Terms of the Firm Placing Details of the Placing and Open Offer Related Party transaction Current trading and prospects General Meeting Action to be taken Overseas Shareholders Taxation Risks and additional information Irrevocable undertakings to vote in favour of the Resolutions Recommendation 26 Part II Risk Factors 28 Part III Information on the Concert Party 33 Part IV Terms and conditions of the Open Offer 34 Part V Frequently asked questions and answers about the Firm Placing and Open Offer 50 Part VI Additional Information 56 Notice of the General Meeting 69 3

4 Definitions The following definitions apply throughout this document unless the context requires otherwise: Act Admission AIM AIM Rules Applicant Application Form Articles or Articles of Association Australia business day Canada Capita Asset Services or Capita Capital Reorganisation CCSC the Companies Act 2006 (as amended) the admission of the Enlarged Share Capital to trading on AIM becoming effective in accordance with the AIM Rules the AIM Market operated by the London Stock Exchange the AIM Rules for Companies published by the London Stock Exchange, as amended from time to time a Qualifying Shareholder or a person entitled by virtue of a bona fide market claim who lodges an Application Form or relevant CREST instruction under the Open Offer the personalised application form accompanying this document on which Qualifying non-crest Shareholders (other than certain Overseas Shareholders) may apply for Open Offer Shares under the Open Offer the articles of association of the Company as proposed to be amended at the GM in order to effect the Capital Reorganisation the Commonwealth of Australia, its states, territories and possessions a day (other than a Saturday or Sunday or a public holiday) on which commercial banks are open for general business in London, England Canada, its provinces and territories and all areas subject to its jurisdiction and any political sub-divisions thereof a trading name of Capita Registrars Limited, a private limited company incorporated in England and Wales, with registered number , whose registered office is at The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU the proposed reorganisation to be effected by consolidating every 24 Existing Ordinary Shares into one ordinary share of 52.8p and then dividing each ordinary share of 52.8p each into one New Ordinary Share and one New Deferred Share the CREST Courier and Sorting Service, established by Euroclear to facilitate, amongst other things, the deposit and withdrawal of certificated securities 4

5 Definitions certificated or certificated form Closing Price Code or Takeover Code Concert Party Company or Parallel Media CREST CREST Manual CREST member CREST participant CREST payment CREST Regulations CREST sponsor CREST sponsored member Directors or the Board not in uncertificated form the closing middle market quotation of a share as derived from the AIM Appendix to the Daily Official List of the London Stock Exchange The City Code on Takeovers and Mergers those parties whose names are set out in paragraph 4 of Part I of this document Parallel Media Group plc, a company incorporated and registered in England and Wales with registered number the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the Operator (as defined in the CREST Regulations) which facilitates the transfer of title to shares in the uncertificated form the rules governing the operation of CREST, consisting of the CREST Reference Manual, CREST international Manual. CREST Central Counterparty Service Manual, CREST Rules, Registrars Service Standards, Settlement Discipline Rules. CREST Courier and Sorting Services Manual, Daily Timetable, CREST Application Procedures and CREST Glossary of Terms (all as defined in the CREST Glossary of Terms promulgated by Euroclear on 15 July 1996 and as amended or reissued since) a person who has been admitted by Euroclear as a systemparticipant (as defined in the CREST Regulations) a person who is, in relation to CREST, a system-participant (as defined in the CREST Regulations) shall have the meaning given in the CREST Manual the Uncertificated Securities Regulations 2001 (SI 2001/3755) as amended from time to time; a CREST participant admitted to CREST as a CREST sponsor a CREST member admitted to CREST as a sponsored member (which includes all CREST Personal Members (as defined in the CREST Manual)) the directors of the Company as set out on page 15 of this document 5

6 Definitions Disclosure and Transparency Rules EEA Enlarged Share Capital EU Euroclear the disclosure rules and transparency rules of the FCA as amended from time to time the European Economic Area; enabled for settlement in relation to Open Offer Entitlements, enabled for the limited purpose of settlement of claim transactions and USE transactions the 3,009,233 New Ordinary Shares in issue immediately following completion of the Capital Reorganisation and the Fundraising assuming the Fundraising is fully subscribed the European Union Euroclear UK & Ireland Limited, the operator of CREST Ex-entitlement Date 3 December 2013 Existing Options or Existing Share Options Existing Ordinary Shares Firm Placing Firm Placing Shares Form of Proxy FCA Fundraising the existing options held by David Ciclitira to acquire 44,935 Ordinary Shares, which following the Capital Reorganisation will become options to acquire 1,872 New Ordinary Shares the 49,140,569 ordinary shares of 2.2 pence each in the capital of the Company in issue at the date of this document the conditional placing by Sanlam Securities (as agent of and on behalf of the Company) of the Firm Placing Shares to certain Placees at the Issue Price, as further described in this document and on the terms and subject to the conditions contained in the Placing Agreement up to 641,026 New Ordinary Shares to be issued pursuant to the Firm Placing the form of proxy accompanying this document for use in connection with the General Meeting the Financial Conduct Authority together, the Firm Placing and the Placing and Open Offer FSMA the Financial Services and Markets Act 2000 GM or General Meeting Group the General Meeting of the Company convened for a.m. on 27 December 2013, notice of which is set out at the end of this document the Company and its Subsidiaries and Subsidiary Undertakings 6

7 Definitions Harwood Capital Independent Director Independent Shareholders ISIN Issue Price London Stock Exchange member account ID Money Laundering Regulations New Deferred Shares Harwood Capital LLP, a limited liability partnership registered in England and Wales with registered number OC Ranjit Murugason who is deemed independent for the purposes of the Code the Shareholders, other than the Concert Party, Christopher Mills and Timothy Sturm International Securities Identification Number 156 pence per New Share London Stock Exchange plc the identification code or number attached to any member account in CREST the Money Laundering Regulations 1993 (SI 1993/1933), and the Money Laundering Regulations 2007 (SI 2007/2157) as amended from time to time the new deferred shares of 51.8p each arising from the Capital Reorganisation New Options the options granted to David Ciclitira to acquire up to 320,512 New Ordinary Shares pursuant to the PCM Agreement New Ordinary Shares New Shares Notice of GM Official List Open Offer Open Offer Entitlements the new ordinary shares of 1p each in the capital of the Company following the Capital Reorganisation the Firm Placing Shares and the Open Offer Shares the notice convening the General Meeting set out at the end of this document the Official List of the UK Listing Authority the conditional invitation made by the Company to Qualifying Shareholders to subscribe for the Open Offer Shares at the Issue Price on the terms and conditions set out in this document and, where relevant, in the Application Form the pro rata entitlement of Qualifying Shareholders to apply to subscribe for 13 Open Offer Shares for every 1,992 Existing Ordinary Shares registered in their name as at the Record Date 7

8 Definitions Open Offer Shares Ordinary Shares Oryx Overseas Shareholders Panel or Takeover Panel participant ID PCM PCM Agreement PCM Option Date Placees the 320,684 New Ordinary Shares to be offered to Qualifying Shareholders by the Company pursuant to the Open Offer, 178,412 of which have been conditionally placed (subject to clawback to satisfy valid applications by Qualifying Shareholders under the Open Offer) pursuant to the Placing and 142,272 of which have been placed firm as a result of undertakings having been received from David Ciclitira and his associated parties which form the Concert Party and Christopher Mills not to take up their entitlements under the Open Offer the ordinary shares of 2.2 pence each in the capital of the Company Oryx International Growth Fund Limited, a closed-ended investment company incorporated in Guernsey as a company limited by shares which are admitted to the Official List and to trading on the main market of the London Stock Exchange whose registered office is at BNP Paribas House, 1 St Julian s Avenue, St Peter Port, Guernsey GY1 1WA, with registered number Shareholders with registered addresses outside of the United Kingdom or who are citizens of, incorporated in, registered in or otherwise resident in, countries outside the United Kingdom the Panel on Takeovers and Mergers the identification code or membership number used in CREST to identify a particular CREST member or other CREST participant Parallel Contemporary Music Limited a company incorporated in England and Wales, which is wholly owned by Luna Trading Limited, which is owned and controlled by David Ciclitira and is a member of the Concert Party the conditional agreement dated 3 December 2013 between the Company, PCM, Luna Trading Limited and David Ciclitira, relating to the arrangements between those entities, a summary of which is set out in Paragraph 6 of Part VI of this document the date on which the revenues received by Parallel Media pursuant to the PCM Agreement are equal to or exceed 500,000, or the date the Company elects to exercise the option to acquire the PCM shares under the PCM Agreement, whichever is the earlier investors who are participating in the Firm Placing, and/or the Placing (as the case may be) 8

9 Definitions Placing Placing Agreement PMGA Proposals Prospectus Rules Qualifying CREST Shareholders Qualifying non-crest Shareholders Qualifying Shareholders the conditional placing by Sanlam Securities (as agent of and on behalf of the Company) of the Open Offer Shares to certain Placees at the Issue Price, as further described in this document and on the terms and subject to the conditions contained in the Placing Agreement the conditional agreement dated 3 December 2013 between the Company and Sanlam Securities, relating to the Fundraising, a summary of which is set out in paragraph 6 of Part VI of this document Parallel Media Group Asia Limited a company incorporated in Singapore together the Fundraising, the Capital Reorganisation and the Rule 9 Waiver the rules made by the FCA under Part VI of FSMA in relation to offers of transferable securities to the public and admission of transferable securities to trading on a regulated market Qualifying Shareholders holding Existing Ordinary Shares which, on the register of members of the Company on the Record Date, are in uncertificated form Qualifying Shareholders holding Existing Ordinary Shares which, on the register of members of the Company on the Record Date, are in certificated form holders of Existing Ordinary Shares on the register of members of the Company on the Record Date other than certain Overseas Shareholders Receiving Agent Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU Record Date the record date for the Open Offer, being 6.00 p.m. on 29 November 2013 Regulatory Information Service Resolutions Restricted Jurisdictions any channel recognised as a channel for the dissemination of information as defined in the glossary of terms in the AIM Rules for Companies the resolutions set out in the Notice of GM (and reference to Resolution followed by 1, 2, 3, 4 or 5 shall refer to the numbered Resolutions in the Notice of GM) the United States, Australia, Canada, Japan, the Republic of South Africa and any other jurisdiction where the extension or availability of the Open Offer would breach any applicable law 9

10 Definitions Rule 9 Waiver ROI Sanlam Securities the agreement of the Panel to waive the obligation on the Concert Party, which would otherwise arise upon the issuance of Firm Placing Shares and the grant to and exercise of the New Options by the Concert Party, to make a general offer to all Shareholders pursuant to Rule 9 of the Takeover Code, conditional upon the approval of Resolution 1 at the General Meeting return on investment Sanlam Securities UK Limited, nominated adviser and broker to the Company Securities Act the US Securities Act of 1933 Shareholders stock account Subsidiary Subsidiary Undertaking UK or United Kingdom UKLA or UK Listing Authority uncertificated or uncertificated form Urban Strategic US or United States USE Waiver Proposals a holder of Existing Ordinary Shares an account within a member account in CREST to which a holding of a particular share or other security in CREST is credited a subsidiary of the Company as that term is defined in Section 1159 and schedule 6 of the Act a subsidiary undertaking of the Company as that term is defined in Section 1162 and Schedule 7 of the Act the United Kingdom of Great Britain and Northern Ireland its territories and dependencies the UK Listing Authority, being the FCA acting as the competent authority for the purposes of Part VI of the FSMA recorded on the relevant register or other record of the share or other security concerned as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by way of CREST Urban Strategic Private Limited, a company owned and controlled by Ranjit Murugason and incorporated in Singapore under the number G the United States of America, its territories and possessions, any state of the United States and the District of Columbia unmatched stock event the Concert Party subscribing for 320,513 New Shares pursuant to the Firm Placing and the grant and exercise of the New Options 10

11 In this document, Sterling,, pence or p refer to pounds sterling, the lawful currency of the UK; and or Euro refer to the lawful currency of the member states of the European Union who adopted the Euro in Stage Three of the Treaty establishing Economic and Monetary Union on 1 January Unless otherwise stated, the following illustrative exchange rate is used 1 = , as derived from the spot exchange rate of the Bank of England as at 29 November Any reference to any provision of any legislation in any jurisdiction shall include any amendment, modification, re-enactment or extension of it. Unless otherwise stated, all references to legislation refer to the laws of the United Kingdom. Words importing the singular shall include the plural and vice versa and words importing the masculine gender shall include the feminine or neutral gender. 11

12 Expected timetable of principal events Record Date Announcement of Fundraising Existing Ordinary Shares marked ex-entitlement by the London Stock Exchange Publication and posting of this document, the Application Form (where relevant) and the Form of Proxy Open Offer Entitlements credited to stock accounts in CREST of Qualifying CREST Shareholders Recommended latest time for requesting withdrawal of Open Offer Entitlements from CREST Latest time for depositing Open Offer Entitlements into CREST Latest time and date for splitting of Application Forms (to satisfy bona fide market claims only) Latest time and date for return of Forms of Proxy Latest time and date for receipt of completed Application Forms and payment in full under the Open Offer or settlement of relevant CREST instruction (as appropriate) General Meeting Record date for the Capital Reorganisation and final date of trading for Existing Ordinary Shares Admission and commencement of dealings in Enlarged Share Capital New Ordinary Shares credited to CREST stock accounts in respect of such shares in uncertificated form p.m. on 29 November 7.00 a.m. on 3 December 8.00 a.m. on 3 December 3 December 8.00 a.m. on 4 December 4.30 p.m. on 18 December 3.00 p.m. on 19 December 3.00 p.m. on 20 December a.m. on 23 December a.m. on 24 December a.m. on 27 December 6.00 p.m. on 27 December 8.00 a.m. on 30 December 30 December Despatch of definitive share certificates for New Ordinary Shares in certificated form By 6 January 2014 Notes: (1) References to times in this document are to London, UK time (unless otherwise stated). (2) The timing of the events in the above timetable, the rest of this document and in the Application Form is indicative only. If any of the above times and/or dates are adjusted by the Company (with the agreement of Sanlam Securities), the revised times and/or dates will be notified to the London Stock Exchange by an announcement via an RIS and, where appropriate, to Shareholders. (3) In order to subscribe for Open Offer Shares under the Open Offer, Qualifying Shareholders will need to follow the procedure set out in Part IV of this document and Qualifying non-crest Shareholders will need to complete the accompanying Application Form. If Qualifying Shareholders have any queries on the procedure for application, acceptance and payment under the Open Offer, or (in the case of Qualifying non-crest Shareholders) wish to request another Application Form, they should contact Capita Asset Services, PXS, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, or by telephone on from within the UK or on if calling from outside the UK. Calls to the number cost 10 pence per minute from a BT landline. Other network providers costs may vary. Lines are open 9.00 am to 5.30 pm (London time) Monday to Friday. Calls to the helpline from outside the UK will be charged at the applicable international rate. Different charges may apply to calls from 12

13 mobile telephones and calls may be recorded and randomly monitored for security and training purposes. The helpline cannot provide advice on the merits of the Proposals nor give any financial, legal or tax advice. 13

14 Fundraising statistics Issue Price per New Share 156p Equivalent subscription price per Existing Ordinary Share 6.5p Number of Existing Ordinary Shares 49,140,569 Number of New Ordinary Shares in issue following the Capital Reorganisation but before the issue of the New Shares 2,047,523 Number of Firm Placing Shares (1) 641,026 Basis of the Open Offer 13 Open Offer Shares for every 1,992 Existing Ordinary Shares Number of Open Offer Shares (2) 320,684 First Firm Placing Shares as percentage of the Enlarged Share Capital Open Offer Shares as percentage of the Enlarged Share Capital Estimated maximum proceeds receivable by the Company under the Fundraising (before expenses) per cent per cent 1.50million Enlarged Share Capital (3) 3,009,233 Market capitalisation of the Company on Admission at the Issue Price ISIN of the Open Offer Entitlement ISIN following Admission 4,69 million GB00BGQYSQ97 GB00BGSGT481 Note: (1) Assuming the Firm Placing is fully subscribed. (2) The Open Offer Shares assuming that all of the Open Offer Shares are fully subscribed for, whether under the Open Offer and/or under the Placing. (3) Assuming Admission of all of the Firm Placing Shares and all of the Open Offer Shares and that no other New Ordinary Shares are issued between the date of this document and Admission. 14

15 Part I Letter from the Independent Director Parallel Media Group plc (Incorporated in England and Wales with registered number ) Directors John David Nikolas Ciclitira, Chairman Timothy Sturm, Non-Executive Director Serenella Ciclitira (aka Maria Serena Papi), Non-Executive Director Ranjit Murugason, Non-Executive Director* *Independent Director Registered Office 10 Peterborough Mews London SW6 3BL 3 December 2013 To Shareholders and, for information only, to holders of options over Existing Ordinary Shares Dear Shareholder, Proposed Firm Placing and Placing and Open Offer, Capital Reorganisation, Approval of a waiver of the obligations under Rule 9 of the City Code on Takeover and Mergers and Notice of General Meeting 1. Introduction On 3 December 2013, the Company announced that it had conditionally raised 1.0 million (before expenses) by way of a firm placing to David Ciclitira and Oryx of 641,026 New Shares at 156p per New Share, following the implementation of the Capital Reorganisation, the terms of which are set out below. The Company also announced that it proposes to raise up to a further 0.5 million (before expenses) by way of an Open Offer of 320,684 New Shares, all of which have either been placed firm as a result of undertakings having been received from certain Qualifying Shareholders not to take up their entitlements under the Open Offer or conditionally placed (subject to clawback to satisfy valid applications by Qualifying Shareholders under the Open Offer), in each case placed with Oryx, at the Issue Price per New Share. Neither the Firm Placing nor the Placing and Open Offer are being underwritten by Sanlam Securities. In addition, the Company has announced that it has entered into the PCM Agreement with PCM, a company ultimately controlled by David Ciclitira. Pursuant to the PCM Agreement, the Company will provide the services of David Ciclitira and certain other services to PCM in consideration for the payment by PCM to the Company of most of the revenue which PCM will receive (whether by way of dividends or otherwise) as a result of PCM being a 45 per cent. shareholder in a joint venture company. PCM has entered into a joint venture agreement with a major US media conglomerate, pursuant to which the parties have formed a Hong Kong incorporated company to provide live music based marketing solutions for international and local brands across Asia. The effect of this arrangement with PCM is that the Company will receive PCM s economic benefit of the joint venture arrangement. PCM does not own any assets other than its shareholding in the joint venture company. In consideration for the services which David Ciclitira will be providing to PCM and hence to the joint venture company pursuant to the PCM Agreement, David Ciclitira will be granted options to subscribe for up to 320,512 New Ordinary Shares (New Options) which will have an exercise price of the nominal value of the New Ordinary Shares but which will only vest in proportion to the amount of revenue received by the Company from PCM pursuant to the PCM Agreement, unless the Company elects to exercise its option to acquire the PCM shares early. Further details of the PCM Agreement are set out in Background to and reasons for the Fundraising. 15

16 The Firm Placing and the Placing and Open Offer are conditional, amongst other things, on Shareholders approval to give the required authorities to allot the New Shares and to disapply statutory pre-emption rights in relation to the allotment of the New Shares. The Issue Price represents a premium of approximately per cent. to the price of pence per Existing Ordinary Share, being the Closing Price of an Existing Ordinary Share on 2 December 2013 (the latest practicable date prior to the announcement of the Fundraising) and of approximately per cent. to the price of pence per Existing Ordinary Share, being the average Closing Price for the preceding 20 business days prior to 2 December The New Shares will, when issued, be fully paid and will rank pari passu in all respects with the New Ordinary Shares in issue at the time that the New Shares are issued pursuant to the Firm Placing and Placing and Open Offer, including the right to receive and retain all dividends and other distributions declared, made or paid by reference to a record date following after Admission. Under the proposed Firm Placing, David Ciclitira will subscribe for 320,513 New Shares and the grant of the New Options will result in David Ciclitira being interested in up to 320,512 further New Ordinary Shares. As the Concert Party currently holds, in aggregate, 16,805,571 Existing Ordinary Shares, representing per cent. of the Existing Ordinary Shares and will, following Admission and the implementation of the Capital Reorganisation hold a maximum of 1,343,126 New Ordinary Shares, representing per cent. of the then enlarged share capital (assuming that no other New Ordinary Shares are issued other than the maximum number of New Shares under the Fundraising; and assuming the exercise in full of both the Existing Options and the New Options), the issue of the New Shares and the grant and exercise of the New Options (and the exercise of the Existing Options) might otherwise result in the Concert Party incurring an obligation under Rule 9 of the Takeover Code to make a general offer to all other Shareholders to acquire their shares in the Company. The Panel has agreed, however, to waive the obligation, subject to its approval by Independent Shareholders. Accordingly, a Resolution (which is set out in the Notice to the General Meeting) is being proposed at the General Meeting for this purpose and is required to be taken on a poll. Further information on David Ciclitira and the Concert Party is set out in the section headed Information on the Concert Party of this Part I and in Part III below. The purpose of this document is to provide you with details of, and the background to, the Proposals and to explain why the Directors believe that the Fundraising and the Proposals are in the best interests of the Independent Shareholders and the Shareholders as a whole and to seek your approval of the Resolutions at the forthcoming General Meeting. 2. Background to and reasons for the Fundraising and PCM Agreement Parallel Media, a leading communications agency connecting lifestyle brands to opportunities in its chosen sectors in Asian markets, announced in its half yearly results for the six months ended 30 June 2013 released on 30 September 2013, that the new events which Parallel Media established in the preceding 12 months had been reflected in the Group's turnover which for the six months ended 30 June 2013 had increased by 39 per cent to 7.63 million (2012: 5.48 million) from the same period in the previous year. As a consequence, gross profit increased by 44 per cent to 1.85 million (2012: 1.28 million) and profit before tax increased by 646 per cent to 657,000 (2012: 88,000). In addition, following completion of a fundraising in July and August 2013, the Company has significantly strengthened its balance sheet, capitalising approximately 790,000 of debts owed by the Company. In addition, on 3 December the Company announced the entry into of the PCM Agreement with PCM, a company wholly owned by Luna Trading Limited which is ultimately controlled by David Ciclitira, and whose only assets are the shares which it holds in the joint venture company. Pursuant to the PCM Agreement, the Company will provide, amongst other things, the services of David Ciclitira to 16

17 PCM in consideration for the payment by PCM to Parallel Media of most of the revenue which PCM will receive (whether by way of dividends or otherwise) as a result of PCM being a 45 per cent. shareholder in a joint venture company. PCM has entered into a joint venture agreement with a major US media conglomerate, pursuant to which the parties have formed a Hong Kong incorporated company to provide live music based marketing solutions for international and local brands across Asia. PCM owns 45 per cent. of the shares in the joint venture company and it is anticipated that profits are expected to be paid out as dividends to shareholders pro rata to their shareholdings. In accordance with the PCM Agreement, the Company has agreed to provide, amongst other things, the services of David Ciclitira to PCM. In consideration for receipt of the services provided pursuant to the PCM Agreement, PCM will pay any funds earned by it from the joint venture company, subject to the retention of an annual sum of 25,000 to pay for the running costs of PCM and any tax payable by PCM, to Parallel Media up to a maximum aggregate amount of 500,000. The PCM Agreement is conditional upon the passing of the Resolutions and will be for a term commencing on the date of the passing of the Resolutions to the date of termination of the joint venture unless terminated upon the exercise of the Company s option to acquire the shares in PCM or by reason of default. The PCM Agreement can be terminated by either PCM or the Company in certain circumstances described in paragraph in Part VI of this document. The PCM Agreement does not include a minimum amount to be paid to the Company. In addition, under the PCM Agreement Luna Trading Limited has granted the Company an exclusive option to purchase Luna Trading Limited s entire shareholding in PCM for the nominal sum of 1 at any time commencing on the PCM Option Date and ending on the six month anniversary of that date. In consideration for David Ciclitira providing his services to PCM pursuant to the PCM Agreement he will be granted New Options over up to 320,512 New Ordinary Shares which will have an exercise price of the nominal value of a New Ordinary Share but which will only vest in proportion to the revenues received by the Company from PCM under the PCM Agreement, that is, for every 39 of revenue received by the Company from PCM, options over 25 New Ordinary Shares will vest subject to a maximum of options vesting over 320,512 New Ordinary Shares provided that if the Company elects under the PCM Agreement to exercise its option prior to 500,000 being received by it under the agreement these restrictions shall cease and David Ciclitira will be entitled to exercise any remaining New Options up to the maximum aggregate of 320,512 New Ordinary Shares. For the purposes of Rule 16.2 of the Code, Sanlam Securities considers the terms of the New Options to be fair and reasonable insofar as Shareholders are concerned. For the purposes of Rule 25.2 of the Code, David and Serenella Ciclitira are deemed to have a conflict of interest. Accordingly, they have taken no part in the deliberations of the Board. The PCM joint venture arrangement is an example of the opportunities currently being presented to Parallel Media which the Company is unable to act upon. This is due, in part, to the size of the Company and the fact that it has historically made substantial trading losses. The Board wishes to take further advantage of such opportunities and is therefore proposing to raise up to 1.5 million (before expenses) pursuant to the Firm Placing and Placing and Open Offer. Existing Shareholders in Parallel Media are being offered the opportunity to participate in the Fundraising as described in more detail below. Implementation of the Fundraising is conditional on, among other things, Shareholders passing the Resolutions at the General Meeting. If Shareholders do not pass the Resolutions and the Fundraising does not proceed, the Board will have more restrained cash resources and may not be able to pursue the business opportunities currently available to it. In addition the PCM Agreement would not be ratified and would therefore fall away. 17

18 3. Use of proceeds of the Fundraising The Company intends to use the net proceeds of the Fundraising primarily to reduce its outstanding obligations, to refinance a loan from Lloyds TSB Bank plc totalling approximately 500,000 and to provide working capital to enable the Company to pursue the new opportunities described above. 4. Information on the Concert Party The Concert Party comprises David Ciclitira and related parties, being: (i) (ii) (iii) (iv) Serenella Ciclitira (aka Maria Serena Papi), David Ciclitira s long term partner; Barclays Wealth Trustees (Jersey) Limited, as trustees for the Tokyo Settlement trust (of which David Ciclitira is the sole beneficiary) and the Ciclitira Settlement Trust (of which the beneficiaries are David Ciclitira s family); Luna Trading Limited, a company which is wholly owned by Barclays Wealth Trustees (Jersey) Limited as trustees for the Tokyo Settlement trust. David Ciclitira and Serenella Ciclitira are directors of Luna Trading Limited; and Lynchwood Nominees, which is the nominee for Coutts Zurich through which David Ciclitira holds certain of his shares. The Concert Party currently holds, in aggregate, 16,797,393 Existing Ordinary Shares, representing per cent. of the Existing Ordinary Shares. Further information relating to Mr Ciclitira and the rest of the Concert Party is set out in Part III of this document. 5. City Code on Takeovers and Mergers The issue of the Firm Placing Shares to David Ciclitira and the proposed grant and exercise of the New Options under the PCM Agreement, gives rise to certain considerations under the Code. Brief details of the aspects of the Code and the protections it affords to you as a Shareholder are described below. The Code is issued and administered by the Takeover Panel. The Code governs, inter alia, transactions which may result in a change of control of a company to which the Code applies. The Company is a company to which the Code applies and its Shareholders are entitled to the protections afforded by its provisions. Under Rule 9 of the Code ( Rule 9 ), when a person acquires an interest (as defined in the Code) in shares which, taken together with shares in which he is already interested and in which persons acting in concert with him are interested (as defined in the Code), carry 30 per cent. or more of the voting rights of a company that is subject to the Code, then that person together with persons acting in concert with him are normally required to make a general offer in cash to all the remaining shareholders to acquire their shares. Similarly, where any person who, together with any person or persons acting in concert with him, is interested in shares which in aggregate carry not less than 30 per cent. of the voting rights of such a company, but does not hold shares carrying more than 50 per cent. of such voting rights, a general offer will normally be required if any further interest in shares is acquired by him or by any person acting in concert with him. An offer under Rule 9 must be made in cash at the highest price paid by the person required to make the offer, or any persons acting in concert with him, for any interest in shares in the company during the 12 months prior to the announcement of the offer for the remaining equity share capital of the company. The Concert Party currently holds, in aggregate, 16,805,571 Existing Ordinary Shares, representing per cent. of the Existing Ordinary Shares. Immediately following completion of the Proposals and on Admission, the Concert Party will hold, in aggregate, 1,020,742 New Ordinary Shares, representing per cent. of the Enlarged Share Capital. 18