PPHE Hotel : Supplementary Notice of AGM

Private and confidential

Supplemental to the Notice of Annual General Meeting

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

If you are in any doubt as to the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000. If you have sold or otherwise transferred all your shares in PPHE Hotel Group Limited, please forward this document, together with the accompanying documents, to the purchaser or transferee, or to the person who arranged the sale or transfer so they can pass these

documents to the person who now holds the shares.

Jefferies, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for PPHE Hotel Group Limited and no one else in connection with the Rule 9 Waiver Resolution and will not regard any other person as its client in relation to the Rule 9 Waiver Resolution and will not be responsible to anyone other than PPHE Hotel Group Limited for providing the protections afforded to clients of Jefferies or its affiliates, nor for providing advice in relation to the Rule 9 Waiver Resolution or any other matter or arrangement referred to herein.

Apart from the responsibilities and liabilities, if any, which may be imposed upon Jefferies by FSMA or the regulatory regime established thereunder, Jefferies does not accept any responsibility whatsoever or make any representation or warranty, express or implied, concerning the contents of this document, including its accuracy, completeness or verification, or concerning any other statement made or purported to be made by it, or on its behalf, in connection with PPHE Hotel Group Limited or the Rule 9 Waiver Resolution, and nothing in this

document is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or future. Jefferies accordingly disclaims, to the fullest extent permitted by law, all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to herein) which it might otherwise have in respect of this document or any such statement.

Supplement to the Notice of Annual General Meeting to be held on 17 May 2022 at 12 noon at 1st Floor,

Elizabeth House, Les Ruettes Brayes, St Peter Port, Guernsey GY1 1EW.

You will receive a Form of Proxy for the Annual General Meeting in the post. Instructions on how to appoint a proxy and how to register are detailed in the notes. If you have not received a hard copy form of proxy, are unable

to locate any of the documents on the web page or need any help with voting online, please contact the Link

Group shareholder helpline on 0044 371 664 0300.

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Contents

Part 1 - Letter from the Deputy Chairman ..................................................................................... 3

Part 2 - Additional Information .................................................................................................... 7

Part 3 - Definitions ...................................................................................................................... 13

Part 4 - Supplement to the Notice of AGM ………………………………………………………………… 15

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PART 1

LETTER FROM THE DEPUTY CHAIRMAN PPHE HOTEL GROUP LIMITED

(Incorporated and registered in Guernsey with company registration number 47131)

25 April 2022

Supplemental to the Notice of Annual General Meeting ("AGM") of PPHE Hotel Group Limited (the "Company") dated 28 February 2022

1. Introduction

You will recently have received the Notice of AGM dated 28 February 2022 with details of the AGM to be held on 17 May 2022 at 12 noon at 1st Floor, Elizabeth House, Les Ruettes Brayes, St Peter Port, Guernsey GY1 1EW.

The Notice of AGM included, among others, the Company's annual resolution authorising the Company to purchase up to 10 per cent. of the Ordinary Shares in issue (excluding treasury shares) (the "Share Buy-Back Authority") in line with institutional guidelines and which the Company has included over the last years as part of its AGM resolutions. Given the shareholding of the Concert Party (currently being 43.24 per cent.), if the Share Buy-Back Authority were to be implemented by the Company, this would result in a proportionate increase in the Concert Party's percentage holding (which, were the Share Buy-Back Authority to be exercised in full, would increase to 48.04 per cent.), which would in turn trigger Rule 9 of the Takeover Code (as is further explained below). However, this requirement to make a mandatory offer under Rule 9 of the Takeover Code can be waived by the Takeover Panel, if (amongst other things) the Company's Independent Shareholders approve a waiver of the mandatory offer provisions set out in Rule 9 of the Takeover Code (the "Rule 9 Waiver Resolution"). This document, therefore, gives notice of the Rule 9 Waiver Resolution which is now being proposed along with the other resolutions contained in the AGM Notice and contains a full explanation of the Rule 9 Waiver Resolution as well as the further information required under the Takeover Code.

2. The Rule 9 Waiver Resolution

The Rule 9 Waiver Resolution, which will be proposed as an Ordinary Resolution to be taken on a poll, seeks Independent Shareholder approval of a waiver of the obligation that would arise under Rule 9 of the Takeover Code for the Concert Party to make a general offer for the entire issued share capital of

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the Company as a result of any purchases by the Company of Ordinary Shares from persons other than members of the Concert Party pursuant to the Share Buy-Back Authority set out at Resolution 16 of the Notice of AGM. The Share Buy-Back Authority allows the Company to purchase up to 4,254,077 Ordinary Shares, being, at the date of the Notice of the AGM, an amount equal to approximately 10 per cent. of the Ordinary Shares in issue (excluding treasury shares).

Background

As a Guernsey incorporated company with its shares admitted to listing on the premium-listing segment of the Official List and admitted to trading on the Main Market of the London Stock Exchange, the Company is subject to the Takeover Code. Under Rule 9 of the Takeover Code, when (i) any person acquires, whether by a series of transactions over a period of time or not, an interest (as defined in the Takeover Code) in shares which, taken together with shares in which he or she and persons acting in concert with him or her are interested, carry 30 per cent. or more of the voting rights of a company subject to the Takeover Code, or (ii) any person who, together with persons acting in concert with him or her, is interested in shares which in aggregate carry not less than 30 per cent. of the voting rights of a company, but does not hold shares carrying more than 50 per cent. of such voting rights, and such person, or any person acting in concert with him or her, acquires an interest in any other shares which increases the percentage of the shares carrying voting rights in which he or she is interested, then, in either case, that person is normally required to make a general offer to all other shareholders to acquire their shares. An offer under Rule 9 must be made in cash and at the highest price paid by the person required to make the offer, or any persons acting in concert with him or her, for any interest in shares in the company during the twelve months prior to the announcement of the general offer.

Where parties acting in concert hold more than 50 per cent. of the voting rights in a company, obligations under Rule 9 do not typically arise. Parties acting in concert may accordingly increase their aggregate interests in shares without triggering the obligation under Rule 9, although individual members of the Concert Party acting in concert will not be able to increase their percentage interests in shares through or between a Rule 9 threshold without Takeover Panel consent.

Impact of Rule 37 of the Takeover Code

Under Rule 37 of the Takeover Code, when a company redeems or purchases its own voting shares, any resulting increase in the percentage of shares carrying voting rights in which a person or group of persons acting in concert is interested will be treated as an acquisition for the purposes of Rule 9 of the Takeover Code. There is an exemption to Rule 37 which sets out that, where a person comes to exceed the limits in Rule 9 of the Takeover Code in consequence of a company's redemption or purchase of its own shares, he or she will not normally incur an obligation to make a mandatory offer unless that person is a director, or the relationship of the person with any one or more of the directors is such that the person is, or is presumed to be, acting in concert with any of the directors. Eli Papouchado and Boris Ivesha (who are members of the Concert Party) are Directors, so this exemption does not apply.

The Concert Party currently holds approximately 43.24 per cent. of the issued share capital of the Company (excluding treasury shares). Accordingly, if the Concert Party's aggregate shareholding were to increase as a result of the exercise of the Share Buy-Back Authority, the Concert Party would be required to make a mandatory general offer to the other Shareholders (as set out in the Takeover Code) for the remainder of the issued share capital of the Company.

Panel Waiver - exercise of the Share Buy-Back Authority

The Company has applied to the Takeover Panel for a waiver of Rule 9 of the Takeover Code in order to permit the Share Buy-Back Authority to be exercised by the Board (if such authority is approved by the relevant percentage of Shareholders) without requiring any member of the Concert Party to make a mandatory offer to Shareholders. The Takeover Panel has reviewed the Rule 9 Waiver Resolution and has agreed, subject to the approval of the Independent Shareholders, to waive the requirement for any member of the Concert Party to make a mandatory offer to the other Shareholders (as set out in the Takeover Code) for the remainder of the issued share capital of the Company that would otherwise arise

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as a result of the Share Buy-Back. In the event that the Rule 9 Waiver Resolution is approved by Independent Shareholders, the Concert Party will not be restricted from making a general offer for the Company.

The Rule 9 Waiver Resolution is being proposed and will be taken on a poll, to be passed by more than 50 per cent. of votes cast by Independent Shareholders present in person or by proxy and voting at the AGM.

No members of the Concert Party will be entitled to vote on the Rule 9 Waiver Resolution. Accordingly, Euro Plaza (together with the other companies which hold Ordinary Shares in which Eli Papouchado is interested) and Walford (which holds the Ordinary Shares in which Boris Ivesha is interested) have undertaken not to vote the Ordinary Shares in which they are interested, in respect of the Rule 9 Waiver Resolution.

Outline of the Concert Party

Eli Papouchado, the Non-Executive Chairman of the Company, is interested in 13,760,260 Ordinary Shares (representing approximately 32.34 per cent. of the issued share capital of the Company (excluding treasury shares)) through Euro Plaza and certain other companies. Boris Ivesha, the Company's President and Chief Executive Officer of the Company, is interested in 4,636,974 Ordinary Shares (representing approximately 10.90 per cent. of the issued share capital of the Company (excluding treasury shares)) through Walford.

Euro Plaza, Walford, Eli Papouchado, Boris Ivesha and other parties are a party to a shareholders' agreement dated 14 March 2013 as amended from time to time (the "Shareholders' Agreement"). Pursuant to the Shareholders' Agreement, it has been agreed that for so long as, inter alia, the combined interests of the Ivesha Parties and the Red Sea Parties in the Company are not less than 30 per cent. and the Red Sea Parties' interest in the Company is at least 20 per cent. of the share capital then in issue (excluding, in both cases, shares held in treasury), on any Shareholder resolution, all Ordinary Shares held by the Ivesha Parties shall be voted in a manner which is consistent with the votes cast by, or on behalf of, the Red Sea Parties in respect of that resolution. As a result, the Ivesha Parties are all considered to be acting in concert with the Red Sea Parties for the purposes of the Takeover Code.

Accordingly, the Concert Party holds 18,397,234 Ordinary Shares representing approximately 43.24 per cent. of the issued share capital of the Company (excluding treasury shares).

Intentions of the Concert Party

The Concert Party has confirmed to the Company that no member of the Concert Party has any intention to change the Company's plans with respect to (i) the future business of the Company, (the Company does not have any research and development functions); (ii) the continued employment of the employees and management of the Company and of its subsidiaries, including any material change in conditions of employment or balance of skills and functions of the employees and management; (iii) its strategic plans for the Company, or their likely repercussions on employment and on the locations of the Company's places of business, including on the location of the Company's headquarters and headquarters functions; (iv) employer contributions into the Company's pension scheme(s) (including with regard to current arrangements for the funding of any scheme deficit), the accrual of benefits for existing members, or the admission of new members; (v) the redeployment of the fixed assets of the Company; and/or (vi) the maintenance of the Company's listing on the London Stock Exchange.

No member of the Concert Party is currently intending to purchase any additional Ordinary Shares during the period covered by the Share Buy-Back Authority. If the Rule 9 Waiver Resolution is passed, the Concert Party will continue to be subject to Rule 9 of the Takeover Code in respect of any future purchases of Ordinary Shares.

Intentions of the Directors

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