Hilton Food : Proposed Acquisition of Seachill and Placing

Acquisition Highlights

- Proposed acquisition of Seachill with an enterprise value of £84.0 million

- Strategically and financially compelling transaction for Hilton

- Attractive growth opportunity and entry into the processing and supply of fish in the UK

- Existing customers see opportunities in adjacent categories, such as fish, both in the UK and internationally and the Acquisition therefore broadens Hilton's offering to both the Group's UK and overseas customers

- Chilled seafood market within Great Britain has displayed resilient growth evidenced by a 20 year track record of increasing market value

- Expected to be earnings enhancing in the first full year

The Placing

- Fully underwritten placing of £53.0 million to raise gross proceeds of £55.9 million at the indicative share price

- Numis Securities Limited ('Numis') is acting as Sole Sponsor, Financial Adviser and Joint Bookrunner in respect of the Placing. Panmure Gordon (UK) Limited ('Panmure Gordon') has been appointed as Joint Bookrunner with Numis (together the 'Bookrunners')

- The Placing is being conducted through an accelerated bookbuilding process which will be launched immediately following this announcement

- The Placing will be used to part-fund the Acquisition, with the balance of the Acquisition consideration (plus associated transaction costs) to be funded by a new debt package comprising a new banking facility totalling £34.0 million

- Certain Directors of the Company have indicated their intention to subscribe for Placing Shares. Further details of the Placing and any participation by such Directors will be set out in the announcement to be made on the closing of the Placing which is expected to be made later today

Announcement of the Acquisition

18 October 2017

Publication and posting of the Circular and the Forms of Proxy

18 October 2017

Latest time and date for receipt of Forms of Proxy (or electronic / CREST proxy appointment)

10a.m. on 2 November 2017

General Meeting

10a.m. on 6 November 2017

Expected date of Completion of the Acquisition

7 November 2017

Expected date of Admission and commencement of dealings in the Placing Shares

7 November 2017

Hilton Food Group plc

Tel: 01480 387214

Robert Watson OBE, Group Chief Executive

Nigel Majewski, Chief Financial Officer

Numis

Mark Lander

Luke Bordewich

Andrew Hackney

Tel: 020 7260 1000

Panmure Gordon

Erik Anderson

Andrew Godber

Tom Salvesen

Tel: 020 7886 2500

Citigate Dew Rogerson

Angharad Couch

Ellen Wilton

Tel: 020 7638 9571

Reasons for the Acquisition

As a result, the Board believes that the acquisition of Seachill, the number 2 player in the UK fish market, presents an attractive and relatively low risk entry into the processing and supply of fish in the UK. This is a new category for the Group and it is an attractive growth opportunity for the Group, for the following reasons:

- fish is a growing consumer category where the Group does not currently have a presence;

- the Group's existing customers have shown interest in opportunities in adjacent categories, such as fish, both in the UK and internationally;

- consumer tastes and preferences for healthier lifestyles and menus underpin the attractive market dynamics for fish as a category; and

- the opportunity created by the extension of the Group's proven customer focused strategy to this new category.

The UK chilled seafood market with Great Britain has displayed resilient growth evidenced by a 20 year track record of increasing market value. Customers see it as a key category with 80% of shoppers buying chilled seafood and on average customers making 19 purchases and spending a total £82 per annum.

Following completion of the proposed Acquisition there are a number of opportunities for the Enlarged Group to create value moving forwards. These include:

- investing in the Seachill business to increase capacity and using Hilton's experience in robotics and automated processes to develop state-of-the-art facilities in the assembling, packing and distributing of fish products, which will deliver even higher quality and better value to the consumer;

- expanding into overseas territories using the Seachill management team's expertise in the fish category, following the successful model of its recent overseas expansion alongside key customers in Portugal and Australia;

- developing innovative new products in the fish category in collaboration with its customers, broadening the range of products that the Enlarged Group can offer new and existing customers; and

- expanding the proprietary 'The Saucy Fish Co.' brand into other categories both in the UK and overseas.

Financial effects of the Acquisition

It is anticipated that the acquisition will be EPS accretive in the first full year of the proposed acquisition. The Group believes that Hilton and Seachill management's combined expertise in a number of areas will enable the Enlarged Group to operate more efficiently over the medium term. More importantly, the proposed acquisition will provide the foundations for Hilton to offer Seachill's fish packing expertise strengthened by Hilton's supply chain experience to a number of its leading retailer customers both in the UK and Internationally.

Year ended 31
December 2016

£'000

Year ended 31
December 2015

£'000

Year ended 31
December 2014

£'000

Revenue

266.3

248.4

258.8

Gross profit

39.2

38.6

37.9

Operating profit

3.4

4.0

(1.7)

Net cash generated from operations

15.4

6.2

2.4

Gross assets

101.5

108.2

109.2

The Sale and Purchase Agreement is conditional upon the approval of the Resolutions by Shareholders at the General Meeting, namely:

- the first Resolution approving the Acquisition as a result of the Acquisition constituting a Class 1 transaction; and

- the second and third Resolutions which provide the Directors with the authority to allot the Placing Shares.

The Sale and Purchase Agreement contains representations, warranties, covenants, undertakings and conditions that are customary for a transaction of this size and nature.

Assuming that the Shareholders approve the Resolutions at the General Meeting, Completion is expected to occur on 7 November 2017.

In line with the Group's prudent financing strategy the transaction will be funded as follows:

- an issue of new Ordinary Shares, pursuant to the Placing, raising £53.8 million net of expenses at the indicative share price; and

- a new banking facility totalling £34.0 million.

Additional new banking facilities of £84.7 million together with existing net cash balances, which were £38.9 million at 16 July 2017, provide funds for future capital investment and the Group's working capital requirements.

Persons who are invited to and who choose to participate in the Placing by making an oral or written offer to acquire Placing Shares, including any individuals, funds or others on whose behalf a commitment to acquire Placing Shares is given (the 'Placees'), will be deemed: (i) to have read and understood this Announcement, including this Appendix, in its entirety; and (ii) to be participating and making an offer for Placing Shares on the terms and conditions, and to be providing the representations, warranties, acknowledgements and undertakings, contained in this Appendix.

In particular each such Placee represents, warrants and acknowledges that:

(a) it is a Relevant Person and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;

(b) it is and, at the time the Placing Shares are acquired, will be outside the United Statesand acquiring the Placing Shares in an 'offshore transaction' in accordance with Rule 903 or Rule 904 of Regulation S under the Securities Act ('Regulation S') and is acquiring beneficial interests in the Placing Shares for its own account; if acquiring the Placing Shares for the account of one or more other persons, it has full power and authority to make the representations, warranties, agreements, undertakings, andacknowledgements herein on behalf of each such person; and

(c) if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, any Placing Shares acquired by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of securities to the public other than an offer or resale to Qualified Investors in a member state of the EEA which has implemented the Prospectus Directive, or in circumstances in which the prior consent of the Bookrunners has been given to each such proposed offer or resale.

The Company and Bookrunners will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.

Application for listing and admission to trading

Application will be made to the:

(a) Financial Conduct Authority ('FCA') for admission of the Placing Shares to the premium listing segment of the Official List London Stock Exchange; and

(a) London Stock Exchange for admission of the Placing Shares to trading on the London Stock Exchange's main market for listed securities.

Subject to, amongst other things, the Placing Agreement becoming unconditional and not being terminated in accordance with its terms, it is expected that Admission of the Placing Shares will become effective at or around 8.00 a.m. (London time) on 7 November 2017 and that dealings in the Placing Shares will commence at that time.

Participation in, and principal terms of, the Placing

1. The Bookrunners are arranging the Placing severally, and not jointly, nor jointly and severally, as bookrunners and placing agents of the Company for the purpose of using their respective reasonable endeavours to procure Placees at the Placing Price (as defined below) for the Placing Shares. Each Bookrunner is authorised and regulated in the United Kingdom by the FCA, and is acting exclusively for the Company and no one else in connection with the matters referred to in this Announcement and will not be responsible to anyone other than the Company for providing the protections afforded to the customers of each Bookrunner or for providing advice in relation to the matters described in this Announcement.

2. Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by the Bookrunners. Each Bookrunner may itself agree to be a Placee in respect of all or some of the Placing Shares or may nominate any member of its group to do so.

3. The Bookbuild, if successful, will establish a single price per Placing Share payable to the Bookrunners as agent for the Company by all Placees whose bids are successful (the 'Placing Price'). The Placing Price and the number of Placing Shares will be agreed by the Bookrunners and the Company following completion of the Bookbuild. Any discount to the market price of the Ordinary Shares will be determined in accordance with the Listing Rules as published by the FCA pursuant to Part VI of the FSMA. The Placing Price and the number of Placing Shares to be issued will be announced on a Regulatory Information Service following the completion of the Bookbuild (the 'Placing Results Announcement').

4. The Bookbuild is expected to close later today, but in any event no later than 5.00 p.m. on 18 October 2017, but at the sole discretion of the Bookrunners the timing of the closing of the books, pricing and allocations may be accelerated or delayed. The Bookrunners may, in agreement with the Company, accept bids that are received after the Bookbuild has closed. The Company reserves the right (upon agreement with the Bookrunners) to reduce or seek to increase the amount to be raised pursuant to the Placing in its absolute discretion

5. Any person who wishes to participate in the Bookbuild should communicate their bid by telephone to their usual sales contact at the relevant Bookrunner. Each bid should state the number of Placing Shares which the prospective Placee wishes to acquire at either the Placing Price which is ultimately established by the Company and the Bookrunners or at prices up to a price limit specified in its bid.

6. Each of the Bookrunners reserves the right not to accept bids or to accept bids in part rather than inwhole. The acceptance of the bids shall be at the Bookrunners' absolute discretion. A bid in the Bookbuild will be made on the terms and conditions in this Appendix and will be legally binding on the Placee on behalf of which it is made and, except with the consent of the Bookrunners, will not be capable of variation or revocation after the close of the Bookbuild.

7. Allocations of the Placing Shares will be determined by the Bookrunners after consultation with the Company (the proposed allocations having been supplied by the Bookrunners to the Company in advance of such consultation). Allocations will be confirmed orally by one of the Bookrunners and a trade confirmation or contract note will be despatched as soon as practicable thereafter. A Bookrunner's oral confirmation to such Placee constitutes an irrevocable legally binding commitment upon such person (who will at that point become a Placee), in favour of the Bookrunners and the Company, to acquire the number of Placing Shares allocated to it and to pay the Placing Price in respect of such shares on the terms and conditions set out in this Appendix and in accordance with the Company's articles of association. Except with the Bookrunners' consent, such commitment will not be capable of variation or revocation after the time at which it is submitted.

8. Each Placee's allocation and commitment will be evidenced by a trade confirmation or contract note issued to such Placee by the Bookrunners. The terms of this Appendix will be deemed incorporated in that trade confirmation or contract note.

9. Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made at the same time, on the basis explained below under 'Registration and Settlement'.

10. All obligations of the Bookrunners under the Placing will be subject to fulfilment or (where applicable) waiver of the conditions referred to below under 'Conditions of the Placing' and to the Placing not being terminated on the basis referred to below under 'Right to terminate under the Placing Agreement'.

11. By participating in the Placing, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below under 'Right to terminate under the Placing Agreement' and will not be capable of rescission or termination by the Placee.

12. To the fullest extent permissible by law, neither the Bookrunners, nor the Company, nor any of their respective affiliates, agents, directors, officers or employees shall have any responsibility or liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither the Bookrunners, nor the Company, nor any of their respective affiliates, agents, directors, officers or employees shall have any responsibility or liability (including to the extent permissible by law, any fiduciary duties) in respect of the Bookrunners' conduct of the Placing or of such alternative method of effecting the Placing as the Bookrunners and the Company may determine.

13. Each Placee acknowledges and agrees that that it has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, its participation, and it will provide promptly to the Bookrunners such evidence, if any, as to the identity or location or legal status of any person which the Bookrunners may request from it in connection with the Placing (for the purpose of complying with the Regulations or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by the Bookrunners on the basis that any failure by it to do so may result in the number of Placing Shares that are to be purchased by it or at its direction pursuant to the Placing being reduced to such number, or to nil, as the Bookrunners may decide at their sole discretion;

14. Each Placee acknowledges and agrees that the Company is responsible for the allotment of the Placing Shares to the Placees and the Bookrunners shall have no liability to the Placees for the failure of the Company to fulfil those obligations.

Conditions of the Placing

The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms. The Bookrunners' obligations under the Placing Agreement are conditional on, inter alia:

(a) Admission occurring at or before 8:00 a.m. (London time) on 7 November 2017 (or such later time and/or date, not being later than 8:00 a.m. (London time) on 21 November 2017, as the Company and Numis may otherwise agree) (the 'Closing Date');

(b) the Company having confirmed to the Bookrunners that, prior to the delivery of such confirmation, none of the representations, warranties and agreements of the Company contained in the Placing Agreement was untrue, inaccurate or misleading at the date of the Placing Agreement or will be untrue, inaccurate or misleading immediately prior to Admission when repeated at that time, by reference to the facts and circumstances then subsisting;

(c) the Company having complied with or performed its obligations under the Placing Agreement to the extent that the same fall to be performed prior to Admission, save for any non-compliance which in the good faith opinion of Numis is not material;

(d) the Acquisition Agreement (i) having been duly executed by the parties thereto by or on the date of this Announcement; (ii) remaining in full force and effect and not having been materially modified, or rescinded, lapsed or been terminated (in whole or in part) prior to Admission (save with the consent of Numis); and (iii) having become unconditional in all respects save for any condition relating to Admission occurring and to the Placing Agreement not having been terminated and having become unconditional in all respects;

(e) in the good faith opinion of Numis, between the date of the Placing Agreement and Admission there has been no material adverse change in, or any development involving a prospective material adverse change in, or affecting, the condition (financial, operational, legal or otherwise) or the earnings, management, business affairs, solvency, credit rating or prospects of the Company or of the Group (taken as a whole), whether or not arising in the ordinary course of business; and

(f) in the good faith opinion of Numis, between the date of the Placing Agreement and Admission there has been no material adverse effect on the business, operations, financial condition, assets, liabilities or gross profits of the Target and its subsidiaries, taken as a whole, which results in costs or losses or liability for the Target group of £7,500,000 or more (excluding certain circumstances, such as conditions generally affecting the industries in which the Target and its subsidiaries operate, and matters disclosed to the Company prior to the date of the Placing Agreement).

Numis, at its discretion and upon such terms as its thinks fit, waive compliance by the Company with the whole or any part of any of the Company's obligations in relation to certain conditions in the Placing Agreement save that the above conditions relating, inter alia, to Admission taking place may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

If: (i) any of the conditions contained in the Placing Agreement, including those described above, is not fulfilled or (where permitted) waived by Numis by the relevant time or date specified (or such later time or date as the Company and Numis may agree); or (ii) the Placing Agreement is terminated by Numis in the circumstances specified below, the Placing will lapse and the Placees' rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by it in respect thereof.

Neither the Bookrunners nor any of their respective affiliates, agents, directors, officers or employees shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision Numis may make as to whether or not to waive, or to extend the time and/or date for the satisfaction of, any condition in the Placing Agreement nor in respect of any decision it may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of Numis.

Right to terminate under the Placing Agreement

Numis is entitled, at any time before Admission, to terminate the Placing Agreement in accordance with its terms in certain circumstances, including, inter alia:

(a) if it comes to the knowledge of either Bookrunner that any of the warranties given by the Company in the Placing Agreement was untrue or inaccurate or misleading when made and/or that any of such warranties would be untrue or inaccurate in a material respect or misleading if it were to be repeated at any time prior to Admission by reference to the facts, matters and circumstances then subsisting and, in the opinion of either Bookrunner (acting in good faith), the effect of such is that it would materially prejudice the success of the Placing or the distribution of the Placing Shares;

(b) any material adverse change in, or any development reasonably likely to lead to a material adverse change in, the condition (financial, operational or legal), the assets, or the earnings, results of operations or prospects of the Enlarged Group taken as a whole whether or not arising in the ordinary course of business and, in the opinion of either Bookrunner (acting in good faith), the effect of such is that it would materially prejudice the success of the Placing or the distribution of the Placing Shares;

(c) the occurrence of one or more specified adverse macro-economic changes, suspension or material limitation in the trading on the London Stock Exchange's main market for listed securities of any securities of the Company or a general moratorium on commercial banking activities in London or New York which, in the opinion of either Bookrunner (acting in good faith) would materially prejudice the success of the Placing or the distribution of Placing Shares; or

(d) any of the conditions to the Placing are not fulfilled or waived (as applicable).

The rights and obligations of the Placees shall terminate only in the circumstances described in these terms and conditions and in the Placing Agreement and will not be subject to termination by the Placee or any prospective Placee at any time or in any circumstances. By participating in the Placing, Placees agree that the exercise by Numis of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of Numis and that it need not make any reference to, or consult with, Placees and that it shall have no liability to Placees whatsoever in connection with any such exercise. Placees will have no rights against either Bookrunner, the Company or any of their respective directors or employees under the Placing Agreement pursuant to the Contracts (Rights of Third Parties) Act 1999 (as amended).

Whilst, in the circumstances described above, Panmure Gordon may also have the right to terminate its obligations under the Placing Agreement, such right shall not entitle Panmure Gordon to terminate the Placing Agreement and accordingly (subject to any concurrent right by Numis to terminate the Placing Agreement) such termination by Panmure Gordon shall be without prejudice to the surviving rights and obligations of Numis, the Company and any Placees.

Representations, Warranties and Further Terms

By participating in the Placing each Placee (and any person acting on such Placee's behalf) irrevocably:

1. represents and warrants that it has read and understood the Announcement, including this Appendix, in its entirety and that its acquisition of Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings and other information contained herein and undertakes not to redistribute or duplicate this Announcement;

2. acknowledges that no offering document or prospectus has been or will be prepared in connection with the Placing and represents and warrants that it has not received and will not receive a prospectus or other offering document in connection with the Placing or the Placing Shares;

3. acknowledges that the Placing does not constitute a recommendation or financial product advice and neither Bookrunner has had regard to its particular objectives, financial situation or needs;

4. acknowledges that none of the Bookrunners, the Company, any of their respective affiliates, agents, directors, officers or employees has provided, nor will provide, it with any material regarding the Placing Shares or the Company other than this Announcement; nor has it requested any of the Bookrunners, the Company, any of their respective affiliates or any person acting on behalf of any of them to provide it with any such information;

5. acknowledges that the Ordinary Shares are listed on the Official List and are admitted to trading on the main market of the London Stock Exchange and that the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of the London Stock Exchange and/or the FCA, which includes a description of the Company's business and the Company's financial information, including balance sheets and income statements, and that it is able to obtain or access to such information, or comparable information concerning other publicly traded companies, in each case without undue difficulty;

6. acknowledges that the content of this Announcement is exclusively the responsibility of the Company and that neither of the Bookrunners, nor their respective affiliates or any person acting on behalf of any of them, has or shall have any liability for any information, representation or statement contained in, or omission from, this Announcement or any information previously published by or on behalf of the Company, pursuant to applicable laws, and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement or otherwise;

7. represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to acquire Placing Shares is contained in this Announcement and any information previously published by the Company by notification to a Regulatory Information Service, such information being all that such Placee deems necessary or appropriate and sufficient to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given, or representations, warranties or statements made, by any of the Bookrunners or the Company nor any of their respective affiliates, agents, directors, officers or employees and none of the Bookrunners or the Company or any such affiliate, agent, director, officer or employee will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

8. acknowledges and agrees that it may not rely, and has not relied, on any investigation that either Bookrunner, any of their affiliates or any person acting on their behalf, may have conducted with respect to the Placing Shares or the Company, and none of such persons has made any representation, express or implied, with respect to the Company, the Placing Shares or the accuracy, completeness or adequacy of the information from the London Stock Exchange or any other information; each Placee further acknowledges that it has conducted its own investigation of the Company and the Placing Shares and has received all information it believes necessary or appropriate in connection with its investment in the Placing Shares;

9. acknowledges that it has made its own assessment and has satisfied itself concerning the relevant tax, legal, currency and other economic considerations relevant to its investment in the Placing Shares;

10. acknowledges that none of the Bookrunners, their respective affiliates or any person acting on behalf of any of them has or shall have any liability for any information made publicly available by or in relation to the Company or any representation, warranty or statement relating to the Company or the Group contained therein or otherwise, and that where any such liability nevertheless arises as a matter of law Placees will immediately waive any claim against any of such persons which they may have in respect thereof, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

11. represents and warrants that (i) the Placing Shares have not been, and will not be, registered under the Securities Act; (ii) it is and, at the time the Placing Shares are acquired, will be outside the United States and acquiring the Placing Shares in an 'offshore transaction' in accordance with Rule 903 or Rule 904 of Regulation S; (iii) if acquiring the Shares for the account of one or more other persons, it has full power and authority to make the representations, warranties, agreements, undertakings and acknowledgements herein on behalf of each such person; (iv) it is not acquiring the Placing Shares as a result of any 'directed selling efforts' as defined in Regulation S; and (v) it will not publish, distribute or transmit this Announcement or any other document or information related to the Placing, by any means or media, directly or indirectly, in whole or in part, in or into the United States;

12. acknowledges that in making any decision to acquire Placing Shares it (i) has such knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of subscribing for or purchasing the Placing Shares, (ii) will not look to either Bookrunner for all or part of any loss it may suffer as a result of any such subscription or purchase, (iii) is experienced in investing in securities of this nature in this sector and is aware that it may be required to bear, and is able to bear, the economic risk of an investment in the Placing Shares, (iv) is able to sustain a complete loss of an investment in the Placing Shares and (v) has no need for liquidity with respect to its investment in the Placing Shares;

13. undertakes, unless otherwise specifically agreed with the Bookrunners, that it is not and at the time the Placing Shares are acquired, neither it nor the beneficial owner of the Placing Shares will be, a resident of Australia, Canada, Japan or South Africa and further acknowledges that the Placing Shares have not been and will not be registered under the securities legislation of Australia, Canada, Japan or South Africa and, subject to certain exceptions, may not be offered, sold, transferred, delivered or distributed, directly or indirectly, in or into any of those jurisdictions;

14. acknowledges that the Placing Shares have not been and will not be registered, and that a prospectus will not be cleared in respect of any of the Placing Shares, under the securities laws or legislation of the United States or any state or jurisdiction thereof, Australia, Canada, Japan, or South Africa and, subject to certain exceptions, may not be offered, sold, or delivered or transferred, directly or indirectly, in or into those jurisdictions;

15. represents and warrants that the issue to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services) and that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer Placing Shares into a clearance service;

16. represents and warrants that it has complied with its obligations under the Criminal Justice Act 1993, the EU Market Abuse Regulation (2015/596/EU) ('MAR') and in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering Regulations 2007 and any related or similar rules, regulations or guidelines, issued, administered or enforced by any government agency having jurisdiction in respect thereof (the 'Regulations') and the Money Laundering Sourcebook of the FCA and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;

17. represents and warrants that it is acting as principal only in respect of the Placing or, if it is acting for any other person: (i) it is duly authorised to do so and has full power to make the acknowledgments, warranties, representations, undertakings, and agreements herein on behalf of each such person; and (ii) it is and will remain liable to the Company and/or the Bookrunners for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person);

18. if a financial intermediary, as that term is used in Article 3(2) of the EU Prospectus Directive, represents, warrants and undertakes that the Placing Shares purchased by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a Member State of the EEA which has implemented the Prospectus Directive other than Qualified Investors, or in circumstances in which the prior consent of the Bookrunners has been given to the offer or resale;

19. represents, warrants and undertakes that it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the FSMA;

20. represents, warrants and undertakes that it has not offered or sold and will not, prior to Admission, offer or sell any Placing Shares to persons in the EEA except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public (within the meaning of the Prospectus Directive) in any member state of the EEA;

21. represents, warrants and undertakes that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) relating to the Placing Shares in circumstances in which section 21(1) of the FSMA does not require approval of the communication by an authorised person;

22. represents, warrants and undertakes that it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving the United Kingdom;

23. represents and warrants, if in a Member State of the European Economic Area, unless otherwise specifically agreed with the Bookrunners in writing, that it is a 'Qualified Investor';

24. represents and warrants, if in the United Kingdom, that it is a person (i) having professional experience in matters relating to investments who falls within the definition of 'investment professionals' in Article 19(5) of the Order or (ii) who falls within Article 49(2)(a) to (d) ('High Net Worth Companies, Unincorporated Associations, etc') of the Order, or (iii) to whom this Announcement may otherwise lawfully be communicated;

25. acknowledges and agrees that no action has been or will be taken by either the Company or the Bookrunners or any person acting on behalf of the Company or the Bookrunners that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required;

26. represents and warrants that it and any person acting on its behalf is entitled to acquire the Placing Shares under the laws of all relevant jurisdictions and that it has all necessary capacity, fully observed such laws and obtained all such governmental and other guarantees, permits, authorisations, approvals and consents which may be required thereunder and complied with all necessary formalities to enable it to commit to this participation in the Placing and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this Appendix) and will honour such obligations and that it has not taken any action or omitted to take any action which will or may result in the Bookrunners, the Company or any of their respective directors, officers, agents, employees or advisers acting in breach of the legal or regulatory requirements of any jurisdiction in connection with the Placing;

27. undertakes that it (and any person acting on its behalf) will make payment in respect of the Placing Shares allocated to it in accordance with this Appendix on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other acquirers or sold as the Bookrunners may in their sole discretion determine and without liability to such Placee, who will remain liable and will indemnify the Bookrunners on demand for any amount by which the net proceeds of such sale fall short of the product of the relevant Placing Price and the number of Placing Shares allocated to it and may be required to bear any stamp duty, stamp duty reserve tax or other similar taxes (together with any interest or penalties) which may arise upon such placing or sale of such Placee's Placing Shares;

28. acknowledges that neither of the Bookrunners, nor any of their respective affiliates, agents, directors, officers or employees is making any recommendations to it or advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that its participation in the Placing is on the basis that it is not and will not be a client of either Bookrunner in connection with its participation in the Placing and that neither Bookrunner has any duty nor responsibility to it for providing the protections afforded to its clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

29. acknowledges that each of the Bookrunners does not have any duties or responsibilities to it, or its clients, similar or comparable to the duties of 'best execution' and 'suitability' imposed by the Conduct of Business Sourcebook in the FCA's Handbook of Rules and Guidance and that neither of the Bookrunners is acting for it or its clients and that it will not be responsible for providing protections to it or its clients;

30. undertakes that the person whom it specifies for registration as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. Neither of the Bookrunners nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax or other similar taxes resulting from a failure to observe this requirement ('IndemnifiedTaxes'). Each Placee and any person acting on behalf of such Placee agrees to indemnify the Company and the Bookrunners on an after-tax basis in respect of any Indemnified Taxes;

31. acknowledges that these terms and conditions and any agreements entered into by it pursuant to the terms and conditions set out in this Appendix, and all non-contractual or other obligations arising out of or in connection with them, shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract (including any dispute regarding the existence, validity or termination of such contract or relating to any non-contractual or other obligation arising out of or in connection with such contract), except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by either the Company or either Bookrunner in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;

32. agrees to indemnify on an after tax basis and hold the Company, the Bookrunners and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of its representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing;

33. except as set out in clause 34below, represents and warrants that it has neither received nor relied on any 'inside information' (for the purposes of MAR and section 56 of the Criminal Justice Act 1993) concerning the Company prior to or in connection with accepting the invitation to participate in the Placing and is not purchasing Placing Shares on the basis of material non-public information;

34. if it has received any 'inside information' (for the purposes of MAR and section 56 of the Criminal Justice Act 1993) in relation to the Company and its securities, it confirms that it has received such information within the market soundings regime provided for in article 11 of MAR and associated delegated regulations and it has not: (i) dealt (or attempted to deal) in the securities of the Company; (ii) encouraged, recommended or induced another person to deal in the securities of the Company; or (iii) unlawfully disclosed inside information to any person, prior to the information being made publicly available;

35. if it is a pension fund or investment company, its purchase of Placing Shares is in full compliance with applicable laws and regulations;

36. agrees that the Company, the Bookrunners and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements, agreements, and undertakings which are given to the Bookrunners on their own behalf and on behalf of the Company and are irrevocable and it irrevocably authorises the Company and the Bookrunners to produce this Announcement, pursuant to, in connection with, or as may be required by any applicable law or regulation, administrative or legal proceeding or official inquiry with respect to the matters set forth herein;

37. none of the Company or the Bookrunners owes any fiduciary or other duties to any Placee in respect of any acknowledgments, confirmations, undertakings, representations, warranties or indemnities in the Placing Agreement; and

38. its commitment to take up Placing Shares on the terms set out in this Announcement (including this Appendix) will continue notwithstanding any amendment that may or in the future be made to the terms and conditions of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company or the Bookrunners' conduct of the Placing.

Acquisition

the purchase by the Company of the Target pursuant to the Acquisition Agreement.

Admission

admission of the Placing Shares to the Official List of the FCA and to trading on the London Stock Exchange's main market.

Bookrunners

Numis and Panmure Gordon.

Buyer

Hilton Foods Limited, a wholly owned subsidiary of the Company.

Circular

the circular to shareholders to be published today setting out details of the Acquisition.

Class 1 Transaction

a major transaction, the size of which results in a 25 per cent. threshold being reached under any of the class tests set out in the Listing Rules.

Company or Hilton

Hilton Food Group plc.

Completion

completion of the Acquisition pursuant to the Sale and Purchase Agreement

Enlarged Group

the Group as enlarged following the acquisition of the Target.

FSMA

the Financial Services and Markets Act 2000.

General Meeting

The general meeting of the Company (or any adjournment of it) convened for 10 a.m. on 6 November 2017 for shareholders to approve the Resolutions, notice of which are set out in the Circular.

Group

the Company and its subsidiary undertakings.

Listing Rules

The listing rules made by the UKLA under Part VI of FSMA

London Stock Exchange

London Stock Exchange plc.

Numis

Numis Securities Limited.

Ordinary Shares

ordinary shares of £0.10 each in the capital of the Company.

Panmure Gordon

Panmure Gordon (UK) Limited.

Placing

the underwritten placing of the Placing Shares on the terms and subject to the conditions contained in the Placing Agreement and to the terms and conditions set out in this Announcement.

Placing Agreement

the conditional agreement between the Company and the Bookrunners entered into on the date of this Announcement in connection with the Placing.

Placing Shares

the new Ordinary Shares to be allotted and issued by the Company pursuant to the Placing.

Resolutions

the resolutions in the notice of General Meeting to be set out in the Circular.

Sale and Purchase Agreement

the conditional agreement between (1) the Buyer (2) the Company as the Buyer's guarantor (3) the Seller and (4) the Seller Guarantor dated 18 October 2017 in respect of the Acquisition

Seller

Gadus B.V.

Seller Guarantor

Framtakssjóður Íslands slhf.

Target

Icelandic Group UK Limited.

UKLA

the Financial Conduct Authority exercising its functions under Part VI of FSMA.