Phoenix IT : Potential offer by Daisy Group Limited

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

THIS IS AN ANNOUNCEMENT UNDER RULE 2.4 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE 'CODE') AND IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CODE AND THERE CAN BE NO CERTAINTY THAT AN OFFER WILL BE MADE.

FOR IMMEDIATE RELEASE

Phoenix IT Group plc

('Phoenix' or the 'Company')

Potential Offer by Daisy Group Limited

21 May 2015

The Board of Phoenix today announces that it is in advanced discussions, having received an approach from Daisy Group Limited ('Daisy') and Toscafund Asset Management LLP, regarding a possible recommended cash offer for the entire issued and to be issued share capital of the Company at a price of 160 pence per share (the 'Possible Offer').

The Board of Phoenix has indicated to Daisy that it is willing to recommend the key financial terms of the Possible Offer to Phoenix's shareholders, subject to finalising the other terms and conditions of any offer. Daisy has confirmed to the Board of Phoenix that it has completed its due diligence and is well advanced with the finalisation of the necessary financing arrangements.

In accordance with Rule 2.6(a) of the Code, Daisy must, by 5.00 pm on 18 June 2015, being the 28th day following the date of this announcement, either announce a firm intention to make an offer for Phoenix under Rule 2.7 of the Code or announce that it does not intend to make an offer for Phoenix under Rule 2.8 of the Code, unless the Takeover Panel agrees otherwise in accordance with Rule 2.6(c) of the Code.

There can be no certainty that Daisy will proceed to make an offer for Phoenix. This announcement is being made by Phoenix with the consent of Daisy. A further announcement will be made in due course.

Enquiries:

Phoenix IT Group plcTel: +44 (0)8448 630 000

Peter Bertram, Non-Executive Chairman

Steve Vaughan, Chief Executive Officer

Jane Aikman, Chief Operating Officer & Chief Financial Officer

Investec Bank plcTel: +44 (0)20 7597 5970

(Rule 3 Financial Adviser and Corporate Broker)

Andrew Pinder

Patrick Robb

Sebastian Lawrence

FTI ConsultingTel: +44 (0)20 3727 1000

(PR Adviser to Phoenix)

Matt Dixon

James Melville-Ross

RedleafTel: +44 (0)20 7382 4730

(Media enquiries for Daisy Group Limited)

Emma Kane
Rebecca Sanders-Hewitt

Goldman Sachs InternationalTel: +44 (0)20 7774 1000

(Financial Adviser to Daisy)

Anthony Gutman

Nicholas van den Arend

Chris Emmerson

This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities whether pursuant to this announcement or otherwise.

The distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction.

Investec Bank plc, which is authorised by the Prudential Regulation Authority and regulated by the FCA and the Prudential Regulation Authority in the United Kingdom, is acting for Phoenix and no one else in connection with the contents of this announcement and will not be responsible to anyone other than Phoenix for providing the protections afforded to clients of Investec Bank plc or for providing advice in relation to the contents of this announcement or any other matters referred to in this announcement.

Goldman Sachs International, which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Prudential Regulation Authority and the Financial Conduct Authority is acting as financial adviser exclusively for Daisy and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters referred to in this announcement and will not be responsible to anyone other than Daisy for providing the protections afforded to clients of Goldman Sachs International, nor for providing advice in relation to any matter referred to herein.

Disclosure requirements of the Takeover Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% 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 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (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 Code, any person who is, or becomes, interested in 1% 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, 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 pm (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 Takeover 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.

Rule 2.10 disclosure

In accordance with Rule 2.10 of the Code, Phoenix announces that it has 83,027,284 ordinary shares of £0.01 each in issue. The International Securities Identification Number for Phoenix's ordinary shares is GB00B0315W65.

Publication on Website

A copy of this announcement will be made available at www.phoenix.co.uk and www.daisy.com no later than 12:00 noon (London time) on 22 May 2015 (being the business day following the date of this announcement) in accordance with Rule 26.1(a) of the Code. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.