Action Hotels : Publication and posting of Scheme Document

Action Hotels plc

('Action Hotels' or the 'Company')

RECOMMENDED CASH OFFER

BY

ACTION REAL ESTATE CO KSCC

(a subsidiary of Action Group Holdings Co KSCC)

FOR

ACTION HOTELS PLC

PUBLICATION AND POSTING OF SCHEME DOCUMENT

On 3 August 2018, the boards of Action Hotels (LSE: AHCG) and Action Real Estate Co KSCC ('Action Real Estate'), a subsidiary of Action Group Holdings Co KSCC ('AGH'), announced that agreement had been reached on the terms of a recommended cash offer pursuant to which Action Real Estate will acquire the entire issued and to be issued ordinary share capital of Action Hotels other than the Excluded Shares (the 'Offer'). The Offer will be implemented by way of a Court-sanctioned scheme of arrangement pursuant to Article 125 of the Jersey Companies Law.

Action Hotels is today publishing a scheme document (the 'Scheme Document') to Scheme Shareholders, together with the associated Forms of Proxy. The Scheme Document contains, amongst other things, a letter from the Deputy Chairman of Action Hotels, an explanatory statement from WH Ireland, the full terms and conditions of the Scheme, notices convening the Court Meeting and the General Meeting, an expected timetable of principal events and details of the actions to be taken by Scheme Shareholders.

Notice of Shareholder Meetings

The Court Meeting and the General Meeting will both be held at the offices of K&L Gates LLP, One New Change, London EC4M 9AF on 24 September 2018. The Court Meeting will start at 11.00 a.m. and the General Meeting will start at 11.15 a.m. (or, if later, as soon as the Court Meeting has been concluded or adjourned).

If Action Hotels Shareholders pass the necessary resolutions at the aforementioned meetings, it is anticipated that the Scheme Court Hearing will be held on or around 18 October 2018 and that the Scheme will become effective on or around 19 October 2018.

Publication of Scheme Document

The Scheme Document will today be made available, subject to certain restrictions, on Action Hotels' website at www.actionhotels.comand Action Real Estate's website at www.actionkuwait.comand will be posted by Action Hotels today to all Action Hotels Shareholders.

A shareholder helpline is available for Action Hotels Shareholders. If you have any questions relating to the Scheme Document or the completion and return of the Forms of Proxy, please call Computershare Investor Services (Jersey) Limited on 0370 707 4040(if calling from within the UK) or on +44(0) 0370 707 4040(if calling from outside the UK). Calls from outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 8.30 a.m. - 5.30 p.m., Monday to Friday, excluding public holidays in England and Wales. Please note that Computershare Investor Services (Jersey) Limited cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

Capitalised terms in this Announcement, unless otherwise defined, have the meaning given to them in the Scheme Document.

Expected Timetable of Principal Events

The expected timetable of principal events is attached as an Appendix to this Announcement.

For more information please contact:

Further information

WH Ireland Limited ('WH Ireland'), which is authorised by the FCA in the United Kingdom, is acting as financial adviser exclusively for Action Hotels and no one else in connection with the Offer and will not be responsible to any person other than Action Hotels for providing the protections afforded to clients of WH Ireland, nor for providing advice in relation to the Offer or any matter referred to herein. Neither WH Ireland nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of WH Ireland in connection with the Offer, any statement contained herein or otherwise.

finnCap Ltd ('finnCap'), which is authorised by the FCA in the United Kingdom, is acting as financial adviser exclusively for AGH and Action Real Estate and no one else in connection with the Offer and will not be responsible to any person other than AGH and Action Real Estate for providing the protections afforded to clients of finnCap, nor for providing advice in relation to the Offer or any matter referred to herein. Neither finnCap nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of finnCap in connection with the Offer, any statement contained herein or otherwise.

This Announcement is provided for informational purposes only and does not constitute an offer to sell, or an invitation to subscribe for, purchase or exchange, any securities or the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance, exchange or transfer of the securities referred to in this Announcement in any jurisdiction in contravention of applicable law. This Announcement does not constitute a prospectus or a prospectus equivalent document.

Any vote by the Scheme Shareholders in respect of the Offer should only be made on the basis of the information contained in the Scheme Document, which contains the full terms and conditions of the Offer (including details of how to vote). Action Hotels Shareholders are advised to read the formal documentation in relation to the Offer carefully once it has been dispatched.

Please be aware that addresses, electronic addresses and certain information provided by Action Hotels Shareholders, persons with information rights and other relevant persons for the receipt of communications from AGH or Action Real Estate may be provided to AGH or Action Real Estate during the Offer Period as requested under Section 4 of Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of the Takeover Code.

Overseas shareholders

The release, publication or distribution of this Announcement (in whole or in part) in, into or from certain jurisdictions may be restricted by law. Persons who are not resident in Jersey or the United Kingdom or who are subject to the laws and/or regulations of other jurisdictions should inform themselves of, and should observe, any applicable requirements. Any failure to comply with these requirements may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Offer disclaim any responsibility or liability for the violation of such requirements by any person.

Unless otherwise determined by Action Real Estate or required by the Takeover Code, and permitted by applicable law and regulation, the Offer will not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and no person may vote in favour of the Offer by any such use, means, instrumentality or form within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this Announcement and all documents relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this Announcement and all documents relating to the Offer (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from any Restricted Jurisdictions where to do so would violate the laws in that jurisdiction. Any person (including, without limitation, any custodian, nominee and trustee) who would, or otherwise intends to, or who may have a contractual or legal obligation to, forward this Announcement and/or any other related document to any jurisdiction other than Jersey or the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction.

If the Offer is implemented by way of a Takeover Offer (unless otherwise permitted by applicable law and regulation), the Takeover Offer may not be made directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, email or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or any facility of a national, state or other securities exchange of any Restricted Jurisdiction, and the Takeover Offer may not be capable of acceptance by any such use, means, instrumentality or facility.

Each Action Hotels Shareholder is urged to consult his or her independent professional adviser immediately regarding the tax consequences of the Offer.

Holders of Action Hotels Shares based in the United States should note that the Offer relates to the shares of a Jersey company with a listing on the AIM Market of the London Stock Exchange, is subject to Jersey disclosure requirements (which are different to those of a US company) and is proposed to be implemented under a scheme of arrangement provided for under Article 125 of the Jersey Companies Law. A transaction effected by means of a scheme of arrangement is not subject to the proxy solicitation or tender offer rules under the US Exchange Act. Accordingly, the Offer will be subject to Jersey procedural and disclosure requirements, rules and practices, which are different from the disclosure requirements of the US tender offer and proxy solicitation rules. The financial information included in this Announcement has been or will have been prepared in accordance with IFRS and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the US. If Action Real Estate exercises its right to implement the acquisition of the Action Hotels Shares by way of a Takeover Offer, such offer will be made in compliance with applicable US tender offer and securities laws and regulations.

Dealing Disclosure requirements

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

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

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

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

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

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

Forward-looking statements

No statement in this Announcement is intended as a profit forecast or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share for AGH, Action Real Estate or Action Hotels, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for AGH, Action Real Estate or Action Hotels, as appropriate.

Publication of this Announcement

A copy of this Announcement (together with any document incorporated by reference) is and will be available, free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions on AGH's website at www.actionkuwait.comand Action Hotels' website at www.actionhotels.comduring the course of the Offer. For the avoidance of doubt, the contents of these websites and any websites accessible from hyperlinks on these websites are not incorporated into and do not form part of this Announcement.

Any person entitled to receive a copy of documents, announcements and information relating to the Offer is entitled to receive such documents in hard copy form. Such person may request that all future documents, announcements and information in relation to the Offer are sent to them in hard copy form.

A hard copy form will not be sent to any person unless requested from Registrar by way of either written request to Computershare Investor Services (Jersey) Limited, c/o The Pavilions, Bridgwater Road, Bristol BS99 6ZY or request by telephone on 0370 707 4040 (when telephoning from inside the UK) or on +44 (0) 370 707 4040 (when telephoning from outside the UK).

APPENDIX

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

The following indicative timetable sets out expected dates for the implementation of the Scheme. All times shown in this document are London times unless otherwise stated. To the extent any of the below expected dates or times change, Action Hotels will give notice of any such changes and details of the revised dates and/or times to Action Hotels Shareholders by issuing an announcement through a Regulatory Information Service.

The following dates and times associated with the Scheme are subject to change and will depend on, among other things, (i) the date on which the Conditions to the Scheme are satisfied or, if capable of waiver, waived, (ii) the date on which the Court sanctions the Scheme and (iii) the date on which the Scheme Court Order is delivered to the Registrar of Companies for registration. Action Hotels will give adequate notice of all of these dates and times, when known, by issuing an announcement through a Regulatory Information Service, with such announcement being made available on Action Hotels' website at www.actionhotels.com. Further updates and changes to these times will, at Action Hotels' discretion, be notified in the same way.

Notes:

The Court Meeting and the General Meeting will both be held at the offices of K&L Gates LLP One New Change, , London EC4M 9AF.

Please see 'Action to be taken' on page 10 of the Scheme Document.

(1) If the BLUE Form of Proxy for the Court Meeting is not received by the Company's registrars, Computershare Investor Services (Jersey) Limited, by 11.00 a.m. on 22 September 2018, it may be handed to the Chairman at the Court Meeting at any time before the taking of the poll and still be valid. However, the YELLOW Form of Proxy for the General Meeting must be received by the Company's registrars, Computershare Investor Services (Jersey) Limited, by 11.15 a.m. on 22 September 2018 in order for it to be valid or, if the General Meeting is adjourned, not later than 48 hours before the time fixed for the holding of the adjourned meeting.

(2) If either the Court Meeting or the General Meeting is adjourned, the Voting Record Time for the adjourned meeting will be a time not later than 48 hours before the time fixed for the holding of the adjourned meeting.

(3) The General Meeting will commence at 11.15 a.m. on 24 September or, if later, as soon thereafter as the Court Meeting has been concluded or adjourned.

(4) This is the latest date by which the Scheme may become Effective unless Action Hotels and Action Real Estate agree, with the consent of the Panel and (if required) the Court, a later date.