Phaunos Timber Fund Ltd All-cash offer – 3 July 2018
Disclaimer IMPORTANT: YOU MUST READ THE FOLLOWING BEFORE CONTINUING. THIS PRESENTATION IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION. This presentation has been prepared by or on behalf of Stafford Capital Partners Limited ("Stafford") in connection with the proposed acquisition (the "Proposed Acquisition") of the entire issued and to be issued share capital of Phaunos Timber Fund Limited ("Phaunos") by Mahogany Bidco Limited ("Stafford Bidco"). By receiving this presentation or by reading the presentation slides, you agree to the conditions set out below. This presentation (including any oral briefing and any question-and-answer session in connection with it) is for information only and is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, in connection with the Proposed Acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities by Phaunos in any jurisdiction in any contravention of applicable law. The release, presentation, publication or distribution of this presentation in jurisdictions other than the United Kingdom and Guernsey may be affected by the laws and regulations of those jurisdictions. Persons who are not resident in the United Kingdom or Guernsey, or who are subject to the laws of any jurisdiction other than the United Kingdom or Guernsey, should inform themselves about, and observe any applicable requirements. It is your responsibility to satisfy yourself as to the full observance of any relevant laws and regulatory requirements. Any failure to comply with the applicable legal or regulatory requirements may constitute a violation of the laws and/or regulations of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Proposed Acquisition disclaim any responsibility and liability for the violation of such restrictions by any person. The Proposed Acquisition relates to the shares of a company domiciled in Guernsey and is subject to English law, Guernsey law and the City Code on Takeovers and Mergers (the "Code") and information disclosed may not be the same as that which would have been disclosed in accordance with the laws of jurisdictions outside England and Guernsey. Plane shareholders in the United States should be aware that this presentation have been or will be prepared in accordance with English law, Guernsey law and the Code and applicable disclosure requirements, format and style thereunder, all of which differ from those in the United States. The Proposed Acquisition will be made in the United States pursuant to applicable US tender offer rules, including Regulation 14E under the Exchange Act, and securities laws and otherwise in accordance with the requirements of English law, Guernsey law, the Code, the UK Panel on Takeovers and Mergers, the London Stock Exchange and the Financial Conduct Authority. Accordingly, the Proposed Acquisition will be subject to disclosure and other procedural requirements, including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments that are different from those applicable under United States domestic tender offer procedures and law. The Proposed Acquisition will be made in the United States by Stafford Bidco and no one else. It may be difficult for US holders of Phaunos securities to enforce their rights under and any claim arising out of the US federal securities laws, since Stafford Bidco and Phaunos are located outside the United States, and some or all of their officers and directors may be resident outside the United States. US Phaunos shareholders may not be able to sue a non-US company or its officers or directors in a non- US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement and a US court may lack jurisdiction over such persons. 2
Disclaimer (continued) None of Stafford, its shareholders, subsidiaries, affiliates, associates or their respective directors, officers, partners, employees, representatives and advisers (the "Relevant Parties") makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this presentation, or otherwise made available, nor as to the reasonableness of any assumption contained in such information, and any liability therefor (including in respect of direct, indirect, consequential loss or damage) is expressly disclaimed. No information contained herein or otherwise made available is, or shall be relied upon as, a promise, warranty or representation, whether as to the past or the future and no reliance, in whole or in part, should be placed on the fairness, accuracy, completeness or correctness of such information. None of the Relevant Parties has independently verified the material in this presentation. Nothing in this presentation constitutes a quantified financial benefits statement for the purposes of Rule 28 of the Code and no statement in this presentation is intended as, or should be construed as, a profit forecast or profit estimate. This presentation and other information published by Stafford or Stafford Bidco may contain statements which are, or may be deemed to be, "forward looking statements". Forward looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Stafford or Stafford Bidco (as applicable) about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward looking statements. The forward-looking statements contained in this presentation include, among others, statements relating to the potential exposure of Phaunos to market risks, and statements expressing management's expectations, beliefs, estimates, forecasts, projections and assumptions. Although Stafford and Stafford Bidco believe that the expectations reflected in such forward-looking statements are reasonable, they can give no assurance that such expectations will prove to be correct. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors. All forward-looking statements contained in this presentation are expressly qualified in their entirety by the cautionary notes contained or referred to in this section, and you are cautioned not to place undue reliance on these forward-looking statements. Neither Stafford nor Stafford Bidco nor any of its or their associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this presentation will actually occur. Other than in accordance with their legal or regulatory obligations, neither Stafford nor Stafford Bidco is under any obligation, and both Stafford and Stafford Bidco expressly disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Certain financial data has been rounded. As a result of this rounding, the totals of data presented in this presentation may vary slightly from the actual arithmetic totals of such data. 3
Introduction • Stafford confirm an all-cash offer of US 49 cents/share for the entire issued, and to-be issued, share capital of Phaunos Timber Fund Ltd (Phaunos) 1 . Stafford considers this to be a strong bid based on the following: • • It represents a premium to the Phaunos 31 December 2017 NAV after adjustments are made for FX movements to 30 June 2018 and the compulsory share redemption completed in January 2018; • The acquisition of all of the assets, including GTFF, NTP, and Aurora, which are not part of the current sales process; Being a fully funded bid via Stafford’s SIT VIII fund (which made its final close in April 2018 at USD • 612.5 million); • Stafford’s expected timetable is 3-4 months compared with a 14-20 month timetable estimated by the Phaunos Board, with potential for further extensions. The cost to Phaunos shareholders of this longer process is estimated at US 3-4 cents/share. Stafford’s all-cash offer provides a fair value for the assets, and much greater certainty for shareholders, • relative to a potentially drawn out realisation process. 1 www.rns-pdf.londonstockexchange.com/rns/3473T_12-2018-7-3.pdf?_ga=2.89973597.710942691.1530602488-621228861.1488831067 4
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