Herstal S.A. Offer for Manroy Plc (3999D)

TIDMMAN

RNS Number : 3999D

Herstal S.A.

28 March 2014

PART I

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION (IN WHOLE OR IN PART), DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

EMBARGOED FOR RELEASE AT 7.00 AM

28 March 2014

RECOMMENDED CASH OFFER

FN HERSTAL SA

for

MANROY PLC

-- The Boards of FN Herstal SA ("Herstal") and Manroy Plc ("Manroy") are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Herstal for the entire issued and to be issued share capital of Manroy (the "Offer").

   --              Under the terms of the Offer:

Manroy Shareholders will receive 85 pence in cash per Manroy Share

   --              The Offer represents a premium of:

(i) 51.8 per cent. to the Closing Price of 56 pence per Manroy Share on 25 November 2013 (being the last Business Day prior to the commencement of the Offer Period);

(ii) 61.4 per cent. to the average Closing Price per Manroy Share of approximately 53 pence over the three month period ended 25 November 2013 (being the last Business Day prior to the commencement of the Offer Period); and

(iii) 62.4 per cent. to the average Closing Price per Manroy Share of approximately 52 pence over the twelve month period ended 25 November 2013 (being the last Business Day prior to the commencement of the Offer Period).

-- The Offer values the entire issued and to be issued ordinary share capital of Manroy at approximately GBP16 million.

-- Herstal is part of the Herstal Group, a Belgian based designer, manufacturer and distributor of firearms and related accessories for defence, law enforcement, hunting and marksmanship.

-- The Manroy Directors, who have been so advised by Opus Corporate Finance, consider the terms of the Offer to be fair and reasonable. In providing advice to the Manroy Directors, Opus Corporate Finance has taken into account the commercial assessment of the Manroy Directors.

-- Accordingly, the Manroy Directors intend to recommend unanimously that Manroy Shareholders accept the Offer, as they (and certain of their immediate family members) have irrevocably undertaken to do in respect of their entire beneficial holdings, which, in aggregate, amount to 3,086,013 Manroy Shares, representing approximately 16.2 per cent. of the existing issued share capital of Manroy.

-- Herstal has also received irrevocable undertakings to accept the Offer from certain Manroy Shareholders, namely Caledonian Heritable Limited, John Celaschi, Liopleurodon Capital Limited, Surinder Rajput and Nigel Cobby, in respect of 7,211,859 Manroy Shares representing, in aggregate, approximately 37.9 per cent. of the existing issued share capital of Manroy.

-- Therefore, as at the date of this announcement, Herstal has received irrevocable undertakings to accept the Offer in respect of a total of 10,297,872 Manroy Shares, representing, in aggregate, approximately 54.1 per cent. of Manroy's existing issued share capital. All of these irrevocable undertakings are binding in all circumstances (including in the event of a higher offer).

-- Further, Herstal has received letters of intent to accept the Offer from Schroder Investment Management and Ashcourt Rowan Asset Management in respect of a total of 2,242,141 Manroy Shares, representing, in aggregate, approximately 11.8 per cent. of the existing issued share capital of Manroy.

Commenting on the Offer, Andrew Blurton, Chairman of Manroy said:

"This Offer is a welcome next step in the development of Manroy's business. Being part of a larger platform is expected to secure further growth across all our business areas. The Offer is also attractive to Shareholders and delivers a material premium to the price before Herstal's approach was announced."

Commenting on the Offer, Philippe Claessens, Chief Executive of Herstal said:

"We are pleased to announce the Offer and to see such strong support for the Offer from the outset. The acquisition of Manroy fits well with our strategy and gives us a footprint in a strategically important market."

This summary should be read in conjunction with and is subject to the full text of the following announcement including the Appendices. The Offer will be subject to the Conditions and certain further terms of the Offer set out in Appendix I to this announcement and to the full terms and conditions to be set out in the Offer Document and the Form of Acceptance. Appendix II contains details of the irrevocable undertakings and the letters of intent given to Herstal. Appendix III sets out the sources and bases of certain financial and other information contained in this announcement. Appendix IV contains the definitions of certain terms used in this summary and the full text of this announcement.

In accordance with Rule 30.4 of the City Code on Takeovers and Mergers (the "Takeover Code"), a copy of this announcement will be made available, free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Manroy's website at:

www.manroy.com/investor_information/ProtectedAnnouncements by no later than 12 noon on the first Business Day following this announcement.

Enquiries

 
 FN Herstal SA                             0032 4240 8303 
 Patrick Vogne, Chief Financial Officer 
  Olivier Van Herstraeten, General 
  Counsel 
 Smith Square Partners, financial 
  adviser to Herstal                       020 3696 7260 
 Jonathan Coddington 
  Jade Jack 
 Manroy Plc                                01252 874 177 
 Glyn Bottomley, Chief Executive 
  Paul Carter, Finance Director 
 Opus Corporate Finance, financial 
  adviser to Manroy                        020 7025 3600 
 Malcolm Strang 
  John McElroy 
 Allenby Capital, nomad and broker 
  to Manroy                                020 3328 5656 
 Mark Connelly 
  Alex Price

Further information

This announcement is for information only and is not intended to and does not constitute, or form part of any offer to sell or invitation to purchase or subscribe for any securities, or any solicitation of any vote or approval in any jurisdiction pursuant to the Offer or otherwise. The Offer will be effected solely through the Offer Document, which, together with the Form of Acceptance (in relation to Manroy Shareholders holding shares in certificated form only) will contain the full details, terms and conditions of the Offer, including the details of how to accept the Offer. Any response to the Offer should be made only on the basis of the information contained in the Offer Document.

Please be aware that addresses, electronic addresses and certain other information provided by Manroy Shareholders, persons with information rights and other relevant persons in connection with the receipt of communications from Manroy may be provided to Herstal during the Offer Period (as required under Section 4 of Appendix 4 to the Takeover Code).

Smith Square Partners, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for Herstal and no one else in connection with the Offer and this announcement and will not be responsible to anyone other than Herstal for providing the protections afforded to clients of Smith Square Partners nor for providing advice in connection with the Offer or this announcement or any matter referred to herein.

Opus Corporate Finance, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for Manroy and no one else in connection with the Offer and this announcement and will not be responsible to anyone other than Manroy for providing the protections afforded to clients of Opus Corporate Finance nor for providing advice in connection with the Offer or this announcement or any matter referred to herein.

Allenby Capital Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for Manroy and no one else in connection with the Offer and this announcement and will not be responsible to anyone other than Manroy for providing the protections afforded to clients of Allenby Capital Limited nor for providing advice in connection with the Offer or this announcement or any matter referred to herein.

Overseas shareholders

The ability of Manroy Shareholders who are not resident in and citizens of the United Kingdom to accept the Offer may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions. Further details in relation to overseas Shareholders will be contained in the Offer Document.

The release, publication or distribution of this announcement in jurisdictions other than in the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies involved in the Offer disclaim any responsibility or liability for the violation of such restrictions by any person. This announcement has been prepared for the purposes of complying with English law, the AiM Rules, the rules of the London Stock Exchange and the Takeover Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of any jurisdiction outside the United Kingdom.

Copies of this announcement and formal documentation relating to the Offer will not be and must not be, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction. In particular, the Offer will not be made, directly or indirectly, in or into or by the use of the mails of, or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of, the United States or any area subject to its jurisdiction or any political division thereof, nor is it being made into any other Restricted Jurisdiction and will not be capable of acceptance by any such use, means, instrumentality or otherwise from within the United States or any other Restricted Jurisdiction. Accordingly, copies of this announcement are not being, and must not be, mailed or otherwise distributed or sent in, into or from the United States or any other Restricted Jurisdiction. Persons receiving this announcement (including, without limitation, custodians, nominees and trustees) must not distribute, mail or send it, the Offer Document or any other documentation relating to the Offer in, into or from the United States or any other Restricted Jurisdiction, and so doing may render any purported acceptance of the Offer invalid.

Disclosure requirements of the Takeover Code

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 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 pm (London time) on the 10(th) business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10(th) 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 1 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, 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. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Cautionary note regarding forward-looking statements

This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Manroy Group and certain plans and objectives of the boards of directors of Manroy and Herstal. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words of similar meaning. These statements are based on assumptions and assessments made by the boards of directors of Manroy and Herstal in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe appropriate. By their nature, forward-looking statements involve risk and uncertainty, and the factors described in the context of such forward-looking statements in this announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements. Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this announcement. Manroy and Herstal assume no obligation to update or correct the information contained in this announcement, whether as a result of new information, future events or otherwise, except to the extent legally required.

The statements contained in this announcement are made as at the date of this announcement, unless some other time is specified in relation to them, and service of this announcement shall not give rise to any implication that there has been no change in the facts set out in this announcement since such date. Nothing contained in this announcement shall be deemed to be a forecast, projection or estimate of the future financial performance of Manroy or Herstal except where expressly stated.

No profit forecast

No statement in this announcement is intended as a profit forecast or a profit estimate, and no statement in this announcement should be interpreted to mean that the future earnings per Manroy Share for current or future financial years will necessarily match or exceed the historical or published earnings per Manroy Share.

Publication of this announcement

The Offer is subject to the provisions of the Takeover Code. A copy of this announcement and the documents to be put on display pursuant to Rule 26.1 of the Takeover Code will be made available, free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Manroy's website at:

www.manroy.com/investor_information/ProtectedAnnouncements by no later than 12 noon on the Business Day following the date of this announcement.

For the avoidance of doubt, neither the content of the websites referred to above nor the contents of any website accessible from hyperlinks on any such website (or any other website) is incorporated into, or forms part of, this announcement nor, unless previously published by means of a recognised information service, should any such content be relied upon in reaching a decision regarding the matters referred to in this announcement.

PART II

EMBARGOED FOR RELEASE AT 7.00 AM

28 March 2014

RECOMMENDED CASH OFFER

FN HERSTAL SA

for

MANROY PLC

   1.            Introduction

The Boards of Herstal and Manroy are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Herstal to acquire the entire issued and to be issued ordinary share capital of Manroy.

   2.            The Offer

The Offer, which shall be subject to the Conditions and further terms set out in the Offer Document and, in respect of shares in certificated form, in the accompanying Form of Acceptance, will be made on the following basis:

for each Manroy Share 85 pence in cash

The Offer represents a premium of:

(i) 51.8 per cent. to the Closing Price of 56 pence per Manroy Share on 25 November 2013 (being the last Business Day prior to the commencement of the Offer Period);

The Offer values the entire issued and to be issued ordinary share capital of Manroy at approximately GBP16 million.

The Offer will extend to all Manroy Shares unconditionally allotted or issued and fully paid on the date of the Offer and any Manroy Shares which are unconditionally allotted or issued and fully paid whilst the Offer remains open for acceptance or by such earlier date as Herstal may, subject to the Takeover Code, decide, not being earlier than the date on which the Offer becomes unconditional as to acceptances.

   3.            Recommendation

The Manroy Directors, who have been so advised by Opus Corporate Finance, consider the terms of the Offer to be fair and reasonable. In providing advice to the Manroy Directors, Opus Corporate Finance has taken into account the commercial assessment of the Manroy Directors.

Accordingly, the Manroy Directors intend to recommend unanimously that Manroy Shareholders accept the Offer, as they (and certain of their immediate family members) have irrevocably undertaken to do in respect of their entire beneficial holdings, which, in aggregate, amount to 3,086,013 Manroy Shares, representing approximately 16.2 per cent. of the existing issued share capital of Manroy.

   4.            Background to and reasons for the Offer

The Board of Herstal considers that a combination of the two businesses will provide a number of strategic and operational benefits. In particular, the acquisition of Manroy will provide Herstal with operational capabilities in the UK and a footprint in a strategically important market.

In turn, given its depth of understanding of the business and the dynamics of the sector, Herstal has significant experience and expertise and the financial resources to capitalise on the growth opportunities available to the combined entity.

   5.            Background to and reasons for the recommendation

On 26 November 2013, the Company announced it was in very preliminary talks with each of Herstal, Beretta and U.S. Ordnance, and that these talks may or may not lead to an offer being made for the whole of the issued share capital of the Company. On 28 November 2013, the Company announced that talks with U.S. Ordnance had been terminated. Since that date, talks with Herstal have advanced significantly, leading to today's announcement of the Offer. No proposal has been received from Beretta.

As Manroy Shareholders will be aware, the Manroy Group has experienced challenging trading conditions over the last two years, and, in particular: defence budgets have been reduced in many countries around the world; there has been political and civil unrest in certain countries that the Company had previously considered as potential export markets; and lead times to obtain UK Government export licences have become unpredictable.

The year ended 30 September 2013 was a frustrating one for Manroy, following production delays linked to manufacturing challenges for Manroy's new GPMG product, deferred spend by the UK Ministry of Defence and the withdrawal of export licenses for certain countries by the UK Government in the summer of 2013, after many years of business development in those countries.

Operations at MUSA (the Company's US associated undertaking in which it had a 49 per cent. shareholding) have also suffered significantly, not only in terms of delays in achieving First Articles Acceptance approvals to enable deliveries to commence on its sizeable forward order book, but also in terms of bidding for a major defence Quick Change Barrel contract from the US Department of Defense. MUSA was hopeful of being awarded a meaningful portion of this contract, which would have placed it in a stronger financial position with increased forward orders for delivery over a number of years. Ultimately, this contract was placed as a single source contract with a major competitor. Without the financial underpinning from this expected long term business opportunity, MUSA's expected major future earnings stream was lost. A direct consequence of this has been that MUSA now has substantial short term funding requirements. In light of this, the Company has irrevocably agreed to sell its 49 per cent. investment in MUSA for a nominal value, subject only to the release of this announcement (please see paragraph 7 below for further details).

Manroy's business comprises a relatively small number of large contracts, which, whilst beneficial, make the Company's revenues lumpy and irregular. This, when coupled with the unpredictability of timing associated with the award of export licenses from the UK Government, makes accurate forward projections required in the public markets more difficult. A manifestation of this has been the requirement for the Company to issue a number of trading updates resulting, inter alia, from delays in the timing of expected contracts. In addition, whilst the Board has confidence in the future operations of the UK business and its expanding export market, it is conscious of the small size of the Company in relation to other operators in the sector and the reduced financial capability of Manroy when competing for larger export orders.

The Board of Manroy considers that, as part of the Herstal Group, Manroy will be able to operate more effectively than is the case at present as a stand-alone small company quoted on AiM. Manroy will also benefit from being part of a substantially larger defence company when bidding for new contracts and servicing existing and new customers. Expansion capital has not to date been readily available to Manroy from the London capital markets, thus restricting its planned expansion programme, and increasing its financing facilities is not considered by the Board to be either appropriate or achievable on acceptable terms. The Company's main finance provider, Barclays Bank plc, while being generally supportive, is seeking to reduce its facilities to the Manroy Group.

The Board is conscious of the interests of Shareholders and a desire for performance to be reflected in the Company's share price. Over the last two years the Company's share price has not performed as well as the Board had expected. Following the announcements in November 2013 referred to above, the Board has considered a number of alternative proposals for the Company but believes that the Offer by Herstal is materially better than any other alternatives at the present time.

In addition, the Offer of 85 pence per Manroy Share in cash will enable Shareholders to exit their investment at a 51.8 per cent. premium to the Closing Price of 56 pence per Manroy Share on 25 November 2013 (being the last Business Day prior to the commencement of the Offer Period) and also at a meaningful premium to the Closing Price of 75 pence per Manroy Share on the Business Day immediately prior to this announcement.

   6.            Irrevocable undertakings and letters of intent

Herstal has received binding irrevocable undertakings to accept the Offer in respect of a total of 10,297,872 Manroy Shares, representing, in aggregate, approximately 54.1 per cent. of Manroy's existing issued share capital, comprised as follows:

(a) from each of the Manroy Directors (and certain of their immediate family members) in respect of their entire beneficial holdings. Those holdings amount to 3,086,013 Manroy Shares, representing, in aggregate, approximately 16.2 per cent. of the existing issued share capital of Manroy;

(b) from Caledonian Heritable Limited in respect of its entire holding of 4,394,069 Manroy Shares, representing approximately 23.1 per cent. of the existing issued share capital of Manroy;

(c) from John Celaschi in respect of his entire holding of 1,010,526 Manroy Shares, representing approximately 5.3 per cent. of the existing issued share capital of Manroy;

(d) from Liopleurodon Capital Limited in respect of its entire holding of 740,597 Manroy Shares, representing approximately 3.9 per cent. of the existing issued share capital of Manroy;

(e) from Surinder Rajput in respect of his entire holding of 666,667 Manroy Shares, representing approximately 3.5 per cent. of the existing issued share capital of Manroy; and

(f) from Nigel Cobby in respect of his entire holding of 400,000 Manroy Shares, representing approximately 2.1 per cent. of the existing issued share capital of Manroy.

All of the above irrevocable undertakings will continue to be binding even in the event of a higher offer for Manroy.

In addition, Herstal has received letters of intent to accept the Offer from Schroder Investment Management and Ashcourt Rowan Asset Management in respect of a total of 2,242,141 Manroy Shares, representing, in aggregate, approximately 11.8 per cent. of the existing issued share capital of Manroy.

   7.            The sale of MUSA and the associated repayment of the Maher Advance

MUSA has been loss making for over three years. During this time, MUSA has required significant additional working capital to be injected into the company and the business now requires significant further capital investment.

When making its approach to Manroy, Herstal confirmed to the Board of Manroy that it had no strategic interest in MUSA and that it would only proceed with an offer for Manroy if Manroy had disposed of its 49 per cent. interest in MUSA. Manroy's holding in MUSA was written down to zero in its report and accounts for the year ended 30 September 2013.

In the second half of the calendar year ended 31 December 2013, the Board of Manroy commenced negotiations with a number of different interested parties over the sale of this 49 per cent. interest. None of these negotiations have resulted in an offer for the 49 per cent. interest. This is believed to be for a variety of different reasons, but primarily because of MUSA's requirement for immediate working capital. By late February 2014, the Board concluded that it would be in the best interests of the Company and its Shareholders if its interest in MUSA were to be sold, albeit at a nominal value, in order to allow the Offer to proceed. Therefore, Manroy has irrevocably agreed to sell its interest in MUSA, subject only to the release of this announcement, to a private individual and Director of MUSA, John Buckner.

In December 2012, Maher Limited, an international raw materials supplier to both Manroy and MUSA, provided a $500,000 advance to MUSA. This advance was to be repaid by MUSA from proceeds receivable from the sale of products, but MUSA has not had sufficient capital to repay Maher. In August 2013, Manroy confirmed to Maher that if MUSA did not repay Maher, Manroy Engineering, a wholly owned subsidiary of Manroy, would repay Maher in stage payments. No payments have been made to date. After receiving appropriate legal and financial advice, the Directors of Manroy have concluded that discharging this liability of MUSA in cash, is in the best interests of the Manroy Shareholders. It is anticipated that this liability will be discharged fully on the Offer becoming or being declared unconditional in all respects.

Liopleurodon Capital Limited (holding company for Maher) is a shareholder in Manroy and therefore, under Rule 16 of the City Code, the repayment of the Maher Advance will be the subject of a resolution to be voted on by independent Manroy Shareholders at a General Meeting. Separate notice of this meeting, confirming background details and voting arrangements, will be contained in the Offer Document. Gerry Clark, a non-executive director of Manroy, is also a director of Maher and therefore he, as well as Maher, will be excluded from voting on the Rule 16 resolution. Gerry holds 101,955 Manroy Shares and Maher holds 740,597 Manroy Shares, representing, in aggregate, 4.4 per cent. of Manroy's existing issued share capital.

Herstal has received binding irrevocable undertakings to vote in favour of the Rule 16 resolution in respect of a total of 9,455,320 Manroy Shares (excluding Gerry Clark's and Maher's shareholdings), representing, in aggregate, approximately 51.9 per cent. of Manroy's existing issued share capital (excluding Gerry Clark's and Maher's shareholdings).

   8.            Site consolidation

Since completion of the acquisition of Base Enamellers in February 2013, the Board has carefully reviewed the dual site operations of the Manroy Group. It concluded that locating the enlarged operations at one location would be beneficial. In particular, the arrangement that has existed since that acquisition, whereby the majority of manufacturing was undertaken at the Base Enamellers location at Slade Green (South East London), and assembly was undertaken at Beckley (East Sussex), exposed the Manroy Group to other potential inefficiencies over and above the Company's initial plan. The split facilities also required duplication of certain employee positions to support customer requirements and significant product transport costs between the two locations.

The lease at Beckley was due to expire in September 2013. This was extended for five years with an option to terminate in December 2014. Additional premises within the Slade Green trading estate were available to allow a consolidation of the Manroy Group's operations onto one site. After formulating a site consolidation plan and ensuring that all production could be efficiently undertaken at one location, the Board has decided to relocate its operations at Beckley to Slade Green. Key factors in making this decision included efficiencies to be realised from centralising operations at one location, the lower rent per square foot payable at Slade Green and the greater availability of potential employees with the required skills for Manroy's engineering business in the Slade Green area.

The management team continues to consult with all employees and has undertaken an employee review covering the whole business. This has currently concluded that approximately 60 per cent. of Beckley employees will either choose not to move, or will not be suitable to move to Slade Green due to travelling distances and other factors. All employees' rights have been taken into account in this review and those employees who do not move will be appropriately compensated in accordance with legal requirements and their employment contracts with the Manroy Group.

The Board of Manroy believes that this change will improve production, making the operational core of the business more effective. The site consolidation is expected to be completed in the second half of the year ending 30 September 2014 and should result in improved financial performance from the increased throughput of the enlarged operations for the benefit of Manroy, its employees and its customers.

   9.            Management, employees and locations of business

Herstal has been made aware of Manroy's intention to transfer its production facilities from Beckley to Slade Green; the plan to relocate Manroy's production facilities pre-dates discussions between Herstal and Manroy regarding the Offer. Herstal understands that, as part of the plan, the Beckley facilities will be closed and the Slade Green facilities will be redeveloped and extended. Herstal has also been made aware of the possible impact of the relocation on the employees of Manroy, as set out above. Herstal intends, should the offer become or be declared unconditional in all respects, to keep these plans under review. However, based on the information provided to date, Herstal considers it likely that they will be implemented on the basis proposed by the Board of Manroy.

Herstal attaches great importance to the skills and experience of the existing management and employees of Manroy. Aside from the changes set out above and based on the information provided to date, Herstal's intention is to functionally integrate Manroy's activities and employees into its organisation. Herstal does not intend to make material changes to the conditions of employment of Manroy's employees.

Herstal has given assurances to the Directors of Manroy that the existing employment rights, including pension rights, of all Manroy employees will be safeguarded following the Offer becoming or being declared unconditional in all respects. In addition, and aside from the changes set out above, Herstal's intention is to maintain the location of Manroy's place of business as well as Manroy's material fixed assets.

As is customary, the Manroy Non-Executive Directors have confirmed that it is their intention to resign as directors of Manroy on the Offer becoming or being declared unconditional in all respects.

   10.          Information relating to Herstal

Herstal is part of the Herstal Group, a Belgian based designer, manufacturer and distributor of firearms and related accessories for defence, law enforcement, hunting and marksmanship. The Herstal Group has two main sub-holding entities headed by Herstal SA: FN Herstal SA (the bidding entity), which encompasses the defence and law enforcement activities of the Herstal Group and Browning SA, which encompasses the hunting, shooting and outdoor firearms activities of the Herstal Group under the Browning and Winchester trademarks.

Further information relating to Herstal will be contained in the Offer Document.

   11.          Information relating to Manroy

Manroy is a UK based defence contractor specialising in the supply of weapons systems for land, air and maritime applications. Manroy designs, manufactures, and supplies: 12.7mm HMGs; 7.62mm GPMGs; HMG Quick Change Barrel kits; military rifles; a range of turret products for armoured fighting vehicles; 20mm canons; ammunition; weapon tripods and mounting systems; and undertakes fabrication work for large original equipment manufacturers. Manroy is a long-term approved supplier to the UK Ministry of Defence.

For the year ended 30 September 2013, Manroy generated revenues of GBP8.9 million (2012: GBP7.4 million). The Group delivered adjusted profit after tax of GBP0.2 million during the year (2012: GBP0.1 million), but also incurred a significant impairment charge totalling GBP5.1 million in respect of MUSA. Overall, this resulted in a loss after tax of GBP6.3 million (2012: GBP1.5 million loss after tax). Manroy has today announced its audited financial results for the year ended 30 September 2013 which will be sent to Shareholders shortly.

Further information relating to Manroy will be contained in the Offer Document.

   12.          Financing the Offer

The consideration payable under the Offer will be funded entirely through the existing cash resources of Herstal, with no requirement for any funding from third party providers of finance.

Smith Square Partners, financial adviser to Herstal, is satisfied that sufficient resources are available to satisfy in full the cash consideration payable to Manroy Shareholders under the terms of the Offer.

   13.          Structure of the Offer and Conditions

The Offer is to be effected by means of a takeover offer within the meaning of Part 28 of the 2006 Act. Herstal reserves the right to elect to implement the acquisition of Manroy, with the consent of the Panel, by way of a scheme of arrangement under Part 26 of the 2006 Act which would be implemented on the same terms (subject to appropriate amendment) as the Offer.

References to the Offer and the Offer Document in this announcement shall include, where applicable, such scheme of arrangement.

The Offer will be subject to the Conditions and further terms set out or referred to in Appendix I and in the Offer Document.

   14.          Overseas Shareholders

The availability of the Offer or the distribution of this announcement to Manroy Shareholders who are not resident in the United Kingdom may be affected by the laws of their relevant jurisdiction. Such persons should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction. Manroy Shareholders who are in any doubt regarding such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.

This announcement does not constitute an offer for sale of any securities or an offer or an invitation to purchase any securities. Manroy Shareholders are advised to read carefully the Offer Document and related Forms of Acceptance once these have been dispatched.

   15.          Manroy Share Incentive Scheme

The Offer extends to any Manroy Shares which are unconditionally allotted or issued whilst the Offer remains open for acceptance (or by such earlier time(s) and/or date(s) as Herstal may, subject to the Takeover Code and/or with the consent of the Panel, determine) as a result of the exercise of options or other awards granted under the Manroy Share Incentive Scheme.

The exercise prices in respect of all of the vested and outstanding options under the Manroy Share Incentive Scheme are more than the Offer Price and the Directors of Manroy have confirmed that no further options will vest in connection with the Offer or before such time as the Offer is expected to become or be declared unconditional in all respects. On the basis that all Outstanding Options therefore have no value under the Offer and with the consent of the Panel, Herstal does not intend to make any offer or proposal to participants in Manroy's Share Incentive Scheme in respect of the Outstanding Options.

   16.          Compulsory acquisition, delisting and cancellation of trading in Manroy Shares

If Herstal receives acceptances of the Offer in respect of, and/or otherwise acquires or contracts to acquire, 90 per cent. or more in nominal value of the Manroy Shares to which the Offer relates and of the voting rights carried by those Manroy Shares and assuming that all of the other Conditions have been satisfied or (where applicable) waived, Herstal intends to exercise its rights in accordance with sections 974 to 991 inclusive of the 2006 Act to acquire compulsorily any remaining Manroy Shares to which the Offer relates on the same terms as the Offer.

Following the Offer becoming or being declared unconditional in all respects and if sufficient acceptances are received under the Offer such that Herstal holds not less than 75 per cent. of the voting rights of Manroy, Herstal intends to procure that Manroy applies to the London Stock Exchange for the cancellation of the admission of the Manroy Shares to trading on AiM. It is anticipated that such cancellation will take effect no earlier than 20 Business Days after the Offer becomes or is declared unconditional in all respects, subject to compliance with the applicable requirements of the AiM Rules.

The cancellation of the admission to trading on AiM of the Manroy Shares will significantly reduce the liquidity and marketability of any Manroy Shares not acquired by Herstal.

It is also intended that, following the Offer becoming or being declared unconditional in all respects and, assuming the cancellation of the admission to trading on AiM of the Manroy Shares occurs, Manroy will be re-registered as a private company under the relevant provisions of the 2006 Act.

   17.          Offer related arrangements

Manroy and Herstal have entered into the following agreements:

(a) a confidentiality agreement dated 16 May 2013, which has since been terminated and is no longer in force;

(b) a standstill agreement dated 7 June 2013, which has expired and is no longer in force; and

(c) a confidentiality agreement dated 11 December 2013, pursuant to which Herstal has undertaken, subject to certain exceptions, to keep information relating to Manroy confidential and not disclose it to third parties.

These agreements are available for inspection as referred to in paragraph 19 below.

   18.          Disclosure of interests in relevant securities

Herstal confirms that there are no details required to be disclosed by it under Rule 8.1(a) of the Takeover Code.

   19.          Documentation

Copies of the following documents will be available by not later than 12 noon on the Business Day immediately following the date of this announcement on Manroy's website:

www.manroy.com/investor_information/ProtectedAnnouncements:

   (a)           this announcement;

(b) the irrevocable undertakings and the letters of intent referred to in paragraph 6 above, and summarised in Appendix II; and

   (c)           the agreements referred to in paragraph 17 above.

The Offer Document will be published and sent to Manroy Shareholders and, for information only, to participants in the Manroy Share Incentive Scheme, as soon as reasonably practicable and, in any event, within 28 days of the date of this announcement and will be available on:

www.manroy.com/investor_information/ProtectedAnnouncements upon posting.

   20.          General

The Offer will comply with the applicable rules and regulations of the AiM Rules, the London Stock Exchange and the Takeover Code.

There are no agreements or arrangements to which Herstal is a party which relate to the circumstances in which it may or may not invoke or seek to invoke a Condition.

The Offer will be subject to the Conditions and further terms set out in Appendix I to this announcement and to be set out in the Offer Document and the Form of Acceptance. Appendix II contains details of the irrevocable undertakings and the letters of intent given to Herstal. Appendix III sets out the sources and bases of certain financial and other information contained in this announcement. Appendix IV contains the definitions of certain terms used in this announcement.

Enquiries

 
 FN Herstal SA                             0032 4240 8303 
 Patrick Vogne, Chief Financial Officer 
  Olivier Van Herstraeten, General 
  Counsel 
 Smith Square Partners, financial 
  adviser to Herstal                       020 3696 7260 
 Jonathan Coddington 
  Jade Jack 
 Manroy Plc                                01252 874 177 
 Glyn Bottomley, Chief Executive 
  Paul Carter, Finance Director 
 Opus Corporate Finance, financial 
  adviser to Manroy                        020 7025 3600 
 Malcolm Strang 
  John McElroy 
 Allenby Capital, nomad and broker 
  to Manroy                                020 3328 5656 
 Mark Connelly 
  Alex Price

Further information

Overseas shareholders

Disclosure requirements of the Takeover Code

Cautionary note regarding forward-looking statements

No profit forecast

Publication of this announcement

The Offer is subject to the provisions of the Takeover Code. A copy of this announcement and the documents required to be put on display pursuant to Rule 26.1 of the Takeover Code will be made available, free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Manroy's website at:

www.manroy.com/investor_information/ProtectedAnnouncements by no later than 12 noon on the Business Day following the date of this announcement.

APPENDIX I

CONDITIONS OF THE OFFER AND CERTAIN FURTHER TERMS

   1.            Conditions

The Offer will be conditional upon:

(a) valid acceptances being received (and not, where permitted, withdrawn) by not later than 1.00 pm (London time) on the First Closing Date (or such later time(s) and/or date(s) as Herstal may, subject to the rules of the Takeover Code or with the consent of the Panel, decide) in respect of not less than 90 per cent. (or such lower percentage as Herstal may decide) (1) in nominal value of the Manroy Shares to which the Offer relates; and (2) of the voting rights attached to those shares, provided that this condition will not be satisfied unless Herstal and/or any of its associates shall have acquired or agreed to acquire (whether pursuant to the Offer or otherwise) Manroy Shares carrying in aggregate more than 50 per cent. of the voting rights then normally exercisable at general meetings of Manroy. For the purposes of this condition:

(i) Manroy Shares which have been unconditionally allotted, but not issued, before the Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of any outstanding subscription or conversion rights or otherwise, shall be deemed to carry the voting rights they will carry on being entered into the register of members of Manroy;

(ii) the expression "Manroy Shares to which the Offer relates" and "associates" shall be construed in accordance with sections 974 to 991 of the 2006 Act; and

(iii) valid acceptances shall be deemed to have been received in respect of Manroy Shares which are treated for the purposes of section 979 of the 2006 Act as having been acquired or contracted to be acquired by Herstal by virtue of acceptances of the Offer;

(b) the Competition and Markets Authority indicating in terms satisfactory to Herstal that it does not intend to make a CMA Phase 2 reference of the proposed acquisition of Manroy by Herstal;

(c) no government or governmental, quasi-governmental, supranational, statutory, regulatory or investigative body, authority, court, trade agency, association or institution or professional or environmental body or private body in any jurisdiction (each a "Third Party") having instituted, implemented or threatened or having announced its intention to institute, implement or threaten any action, proceedings, suit, investigation, enquiry or reference or having required any action to be taken or information to be provided or otherwise having done anything or having made, proposed or enacted any statute, regulation, order or decision or having done anything which would or might reasonably be expected to:

(i) make the Offer or its implementation, or the acquisition or the proposed acquisition by Herstal of any shares or other securities in, or control of, Manroy or any of its subsidiaries or subsidiary undertakings void, illegal or unenforceable under the laws of any jurisdiction, or otherwise directly or indirectly restrain, prohibit, restrict, prevent or delay the same or impose additional adverse conditions or financial or other obligations with respect thereto, or otherwise challenge or interfere therewith;

(ii) require, prevent or delay the divestiture or alter the terms envisaged for any proposed divestiture by any member of the Herstal Group or the Manroy Group of all or any portion of their respective businesses, assets or property, or impose any limit on the ability of any of them to conduct their respective businesses (or any of them) or to own or control any of their respective assets or properties or any part thereof;

(iii) impose any limitation on, or result in any delay in, the ability of any member of the Herstal Group or the Manroy Group to acquire, hold or exercise effectively, directly or indirectly, all or any rights of ownership of Manroy Shares or any shares or securities convertible into Manroy Shares or to exercise voting or management control over any member of the Manroy Group;

(iv) require Herstal and/or any member of the Manroy Group to acquire or offer to acquire or repay any shares or other securities in and/or indebtedness of any member of the Manroy Group owned by or owed to any Third Party in circumstances which would impose a liability on Herstal or any member of the Manroy Group;

(v) impose any limitation on, or result in any delay in, the ability of any member of the Herstal Group or the Manroy Group to integrate or coordinate its business, or any part of it, with the business or any part of the businesses of any other member of the Herstal Group and/or the Manroy Group;

(vi) result in any member of the Herstal Group or the Manroy Group ceasing to be able to carry on its business under any name under which it currently does so; or

(vii) otherwise materially adversely affect any or all of the businesses, assets or profits or financial or trading position of any member of the Herstal Group or the Manroy Group,

and all applicable waiting and other time periods during which any Third Party could institute, implement or threaten any such action, proceedings, suit, investigation, enquiry or reference under the laws of any jurisdiction having expired, lapsed or been terminated;

(d) all necessary filings and applications having been made and all necessary waiting and other time periods (including any extensions thereof) under any applicable legislation or regulations of any jurisdiction having expired, lapsed or been terminated and all statutory or regulatory obligations in any jurisdiction having been complied with in each case as may be necessary in connection with the Offer and its implementation or the acquisition or proposed acquisition by Herstal of any shares or other securities in, or control of, Manroy and all authorisations, orders, recognitions, grants, consents, clearances, confirmations, licences, certificates, permissions and approvals in any jurisdiction ("Authorisations") which are necessary for or in respect of the Offer or the acquisition or proposed acquisition by Herstal of any shares or other securities in, or control of, Manroy or the carrying on by any member of the Manroy Group of its business or in relation to the affairs of any member of the Manroy Group having been obtained in terms and in a form reasonably satisfactory to Herstal from all appropriate Third Parties or persons with whom any member of the Manroy Group has entered into contractual arrangements and all such Authorisations remaining in full force and effect and all filings necessary for such purpose having been made and there being no notice or intimation of any intention to revoke, suspend, restrict or amend or not renew the same at the time at which the Offer becomes or is declared wholly unconditional;

(e) except as publicly announced by Manroy prior to 28 March 2014 through a Regulatory Information Service (a "RIS") or disclosed to Herstal or as disclosed in the annual report and accounts of Manroy for the year ended 30 September 2013 there being no provision of any arrangement, agreement, licence or other instrument to which any member of the Manroy Group is a party or by or to which any such member or any of its respective assets is or are or may be bound, entitled or subject or any circumstance which, in consequence of the making or implementation of the Offer or the proposed acquisition of any shares or other securities in, or control of, Manroy by Herstal, or because of a change in the control or management of Manroy or otherwise, could reasonably be expected to result in:

(i) any indebtedness or liabilities actual or contingent of, or any grant available to, any member of the Manroy Group being or becoming repayable or capable of being declared repayable immediately or prior to its stated maturity or the ability of any such member to borrow monies or incur any indebtedness being withdrawn or inhibited or capable of being withdrawn or inhibited;

(ii) the creation or enforcement of any mortgage, charge or other security interest over the whole or any material part of the business, property, assets or interests of any member of the Manroy Group or any such security (whenever created, arising or having arisen) being enforced or becoming enforceable;

(iii) any such arrangement, agreement, licence or instrument or the rights, liabilities, obligations, or interests of any member of the Manroy Group under any such arrangement, agreement, licence or instrument (or any arrangement, agreement, licence or instrument relating to any such right, liability, obligation, interest or business) or the interests or business of any such member in or with any other person, firm, company or body being or becoming capable of being terminated or adversely modified or adversely affected or any adverse action being taken or any onerous obligation or liability arising thereunder;

(iv) any asset or interest of any member of the Manroy Group being or falling to be disposed of or charged (otherwise than in the ordinary course of business) or ceasing to be available to any member of the Manroy Group or any right arising under which any such asset or interest could be required to be disposed of or charged or could cease to be available to any member of the Manroy Group;

(v) Herstal or any member of the Manroy Group being required to acquire or repay any shares in and/or indebtedness of any member of the Manroy Group owned by any Third Party;

(vi) any adverse change in the ownership or use of any intellectual property rights owned or used by any member of the Manroy Group (including, without limitation, any technical data packages); or

(vii) the creation of any liability, actual or contingent, by any such member, and no event having occurred which, under any provision of any such arrangement, agreement, licence or other instrument, might reasonably be expected to result in any of the events referred to in this condition (e);

(f) since 30 September 2013 and except as disclosed in Manroy's annual report and accounts for the year ended 30 September 2013, or as otherwise publicly announced by Manroy on or prior to 28 March 2014 through a RIS or as disclosed to Herstal, no member of the Manroy Group having:

(i) issued or agreed to issue or authorised or proposed the issue of additional shares or securities of any class, or securities convertible into or exchangeable for shares, or rights, warrants or options to subscribe for or acquire any such shares, securities or convertible securities (save for issues between Manroy and any of its wholly-owned subsidiaries or between such wholly-owned subsidiaries and save for options granted under the Manroy Share Incentive Scheme before 28 March 2014 or the issue of any Manroy Shares allotted upon the exercise of options granted before 28 March 2014 under the Manroy Share Incentive Scheme) or redeemed, purchased, repaid or reduced or proposed the redemption, purchase, repayment or reduction of any part of its share capital or any other securities;

(ii) recommended, declared, made or paid or proposed to recommend, declare, make or pay any bonus, dividend or other distribution whether payable in cash or otherwise other than any distribution by any wholly-owned subsidiary within the Manroy Group;

(iii) save as between Manroy and its wholly-owned subsidiaries, or upon the exercise of options granted under the Manroy Share Incentive Scheme, effected, authorised, proposed or announced its intention to propose any change in its share or loan capital;

(iv) save as between Manroy and its wholly-owned subsidiaries and other than pursuant to the Offer, effected, authorised, proposed or announced its intention to propose any merger, demerger, reconstruction, arrangement, amalgamation, commitment or scheme or any acquisition or disposal or transfer of assets or shares (other than in the ordinary course of business) or any right, title or interest in any assets or shares or other transaction or arrangement in respect of itself or another member of the Manroy Group;

(v) acquired or disposed of or transferred (other than in the ordinary course of trading) or mortgaged, charged or encumbered any assets or shares or any right, title or interest in any assets or shares (other than in the ordinary course of trading) or authorised the same or entered into, varied or terminated or authorised, proposed or announced its intention to enter into, vary, terminate or authorise any agreement, arrangement, contract, transaction or commitment (other than in the ordinary course of trading and whether in respect of capital expenditure or otherwise) which is of a long-term (which shall mean for a fixed term in excess of 12 months and/or not terminable by the giving of 12 months' notice or less) or unusual or onerous nature or magnitude, or which involves or could involve an obligation of an unusual or onerous nature or magnitude;

(vi) entered into or varied or proposed or announced its intention to enter into or vary any agreement, contract, transaction, arrangement or commitment (other than in the ordinary course of trading) which is material in the context of the Manroy Group taken as a whole;

(vii) entered into any contract, transaction or arrangement which would be materially restrictive on the business of the Herstal Group or the Manroy Group in each case as it is currently operated;

(viii) issued, authorised or proposed the issue of or made any change in or to any debentures, or (other than in the ordinary course of trading) incurred or increased any indebtedness or liability, actual or contingent, which is material in the context of the Manroy Group taken as a whole;

(ix) been unable or admitted that it is unable to pay its debts or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business or proposed or entered into any composition or voluntary arrangement with its creditors (or any class of them) or the filing at court of documentation in order to obtain a moratorium prior to a voluntary arrangement or, by reason of actual or anticipated financial difficulties, commenced negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness;

(x) made, or announced any proposal to make, any change or addition to any retirement, death or disability benefit or any other employment-related benefit of or in respect of any of its directors, employees, former directors or former employees;

(xi) save as between Manroy and its wholly-owned subsidiaries, granted any lease or third party rights in respect of any of the leasehold or freehold property owned or occupied by it or transferred or otherwise disposed of any such property;

(xii) entered into or varied or made any offer (which remains open for acceptance) to enter into or vary the terms of any service agreement with any director or senior executive of Manroy or any director or senior executive of the Manroy Group;

(xiii) taken or proposed any corporate action or had any proceedings started or threatened in writing against it for its winding-up (voluntary or otherwise), dissolution, striking-off or reorganisation or for the appointment of a receiver, administrator (including the filing of any administration application, notice of intention to appoint an administrator or notice of appointment of an administrator), administrative receiver, trustee or similar officer of all or any part of its assets or revenues or for any analogous proceedings or steps in any jurisdiction or for the appointment of any analogous person in any jurisdiction;

   (xiv)     made any amendment to its articles of association;

(xv) waived or compromised any claim or authorised any such waiver or compromise, save in the ordinary course of business, which is material in the context of the Manroy Group taken as a whole;

(xvi) taken, entered into or had started or threatened against it in writing in a jurisdiction outside England and Wales any form of insolvency proceeding or event similar or analogous to any of the events referred to in condition (f) (ix) or condition (f) (xiii) above;

   (xvii)   made or agreed or consented to:

(A) any significant change to: (aa) the terms of the trust deeds (or any other contractual documentation) constituting the pension scheme(s) established for its directors, employees or their dependants; or (bb) the benefits which accrue or to the pensions which are payable thereunder; or (cc) the basis on which qualification for, or accrual or entitlement to such benefits or pensions are calculated or determined; or (dd) the basis upon which the liabilities (including pensions) or such pension schemes are funded or made; or

   (B)        any change to the trustees including the appointment of a trust corporation;

(xviii) having taken (or agreed or proposed to take) any action which requires, or would require, the consent of the Panel or the approval of Manroy Shareholders in general meeting in accordance with, or as contemplated by, Rule 21.1 of the Takeover Code; or

(xix) agreed to enter into or entered into an agreement or arrangement or commitment or passed any resolution or announced any intention with respect to any of the transactions, matters or events referred to in this condition (f);

(g) except as publicly announced by Manroy prior to 28 March 2014 through a RIS or disclosed to Herstal and save as disclosed in the annual report and accounts of Manroy for the financial year ended 30 September 2013, or the Offer Document, since 30 September 2013:

(i) there having been no material adverse change or deterioration in the business, assets, financial or trading position or profits of the Manroy Group taken as a whole;

(ii) no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Manroy Group or its distributors is or may become a party (whether as claimant or defendant or otherwise), and no enquiry or investigation by or complaint or reference to any Third Party, against or in respect of any member of the Manroy Group, having been threatened in writing, announced or instituted or remaining outstanding by, against or in respect of any member of the Manroy Group in any way;

(iii) no steps having been taken which would or are reasonably likely to result in the withdrawal, cancellation, termination or modification of any material supplier contract or material customer contract to which any member of the Manroy Group is a member; or

(iv) no contingent or other liability having arisen or become apparent or increased which might be reasonably likely in either case to have a material adverse effect on the Manroy Group;

(h) except as publicly announced by Manroy prior to 28 March 2014 through a RIS or disclosed to Herstal and save as disclosed in the annual report and accounts of Manroy for the financial year ended 30 September 2013, or the Offer Document, Herstal not having discovered:

(i) that any financial, business or other information concerning Manroy or the Manroy Group which is contained in the information publicly disclosed at any time by or on behalf of any member of the Manroy Group either publicly or in the context of the Offer contains a material misrepresentation of fact which has not, prior to 28 March 2014, been corrected by public announcement through a RIS or omits to state a fact necessary to make the information contained therein not materially misleading;

(ii) any information which in the context of the Offer materially affects the import of any such information as is mentioned in condition (h) (i) which is material in the context of the Manroy Group taken as a whole; or

(iii) that any member of the Manroy Group is subject to any liability, contingent or otherwise which is material in the context of the Manroy Group taken as a whole; and

   (i)            save as disclosed to Herstal, Herstal not having discovered that:

(i) there has been a disposal, spillage or leakage of waste or hazardous substance or any substance likely to impair the environment or harm human health on, or there has been an emission or discharge of any waste or hazardous substance or any substance likely to impair the environment or harm human health from, any land or other asset now or previously owned, occupied or made use of by any past or present member of the Manroy Group which would be likely to give rise to any liability (whether actual or contingent, civil or criminal) or cost on the part of any member of the Manroy Group which is material in the context of the Manroy Group taken as a whole;

(ii) any past or present member of the Manroy Group has failed to comply in any material respect with any and/or all applicable legislation or regulations of any relevant jurisdiction with regard to the use, treatment, handling, storage, transport, disposal, spillage, release, discharge, leak or emission of any waste or hazardous substance or any substance reasonably likely to impair the environment or harm human health or animal health or otherwise relating to environmental matters, or that there has otherwise been any such use, treatment, handling, storage, transport, disposal, spillage, release, discharge, leak or emission (whether or not the same constituted a non-compliance by any member of the Manroy Group with any such legislation or regulations, and wherever the same may have taken place) any of which use, treatment, handling, storage, transport, disposal, spillage, release, discharge, leak or emission would be likely to give rise to any liability (actual or contingent, civil or criminal) or cost on the part of any member of the Manroy Group which is material in the context of the Manroy Group taken as a whole;

(iii) circumstances exist whereby a person or class of persons would be reasonably likely to have a claim or claims in respect of any product or process of manufacture or materials used therein now or previously manufactured, sold or carried out by any past or present member of the Manroy Group, which claim or claims would be reasonably likely to have a material adverse effect on any member of the Manroy Group to an extent which is material in the context of the Manroy Group taken as a whole;

(iv) any member of the Manroy Group or any person that performs or has performed services for or on behalf of any such company is or has at any time engaged in any activity, practice or conduct which would constitute an offence under the Bribery Act 2010 or any other applicable anti-corruption legislation; or

(v) any member of the Manroy Group is ineligible to be awarded any contract or business under section 23 of the Public Contracts Regulations 2006.

Herstal reserves the right to waive all or any of conditions (b) to (i) inclusive, in whole or in part.

Conditions (b) to (i) inclusive must be satisfied as at, or waived on or before, midnight on the 21st day after the later of the first closing date of the Offer and the date on which condition (a) is fulfilled (or in each such case such later date as Herstal may, with the consent of the Panel, agree), failing which the Offer will lapse provided that Herstal shall be under no obligation to waive or treat as fulfilled any of conditions (b) to (i) inclusive by a date earlier than the latest date specified above for the fulfilment thereof notwithstanding that the other conditions of the Offer may at such earlier date have been fulfilled and that there are at such earlier date no circumstances indicating that any of such conditions may not be capable of fulfilment.

Under Rule 13.5 of the Takeover Code, Herstal may not invoke a condition to the Offer so as to cause the Offer not to proceed, to lapse or to be withdrawn unless the circumstances which give rise to the right to invoke the condition are of material significance to Herstal in the context of the Offer. Conditions (a) and (b) are not subject to this provision of the Takeover Code.

   2.            Certain further terms of the Offer

The Offer will lapse:

(a) if there is a Phase 2 CMA reference of the proposed acquisition of Manroy by Herstal; or

(b) if the European Commission initiates proceedings under Article 6(1)(c) of Council Regulation (EC) 139/2004,

in either case before 1.00 pm on the first closing date of the Offer or the date when the Offer becomes or is declared unconditional as to acceptances, whichever is the later. In such circumstances, the Offer will cease to become capable of further acceptance and accepting Manroy Shareholders and Herstal shall cease to be bound by acceptances delivered on or before the date on which the Offer so lapses.

Herstal reserves the right to make such changes to the above conditions as may be appropriate in the event that the conditions of the Offer are required to be amended to comply with Rule 9 of the Takeover Code.

The Offer will be made on the terms and will be subject to the conditions which are set out in this Appendix I, those terms and conditions which will be set out in the Offer Document and the Form of Acceptance and such further terms as may be required to comply with the provisions of the Takeover Code. This announcement does not constitute an offer or invitation to purchase any securities.

The Manroy Shares will be acquired by Herstal under the Offer fully paid and free from all liens, charges, encumbrances, rights of pre-emption and any other third party rights of any nature whatsoever and together with all rights attaching to them as at the date of this announcement or subsequently attaching or accruing to them, including, without limitation, voting rights and the right to receive and retain, in full, all dividends and other distributions (if any) declared, made or paid, or any other return of capital (whether by way of reduction of share capital or share premium account or otherwise) made on or after the date of this announcement. Accordingly, insofar as a dividend and/or distribution and/or a return of capital is proposed, declared, made, paid or payable by Manroy in respect of a Manroy Share on or after the date of this announcement, Herstal reserves the right to reduce by the amount of the dividend and/or distribution and/or return of capital, the price payable under the Offer in respect of a Manroy Share, except insofar as the Manroy Share is or will be transferred pursuant to the Offer on a basis which entitles Herstal alone to receive the dividend and/or distribution and/or return of capital but if that reduction in price has not been effected, the person to whom the price payable under the Offer is paid in respect of that Manroy Share will be obliged to account to Herstal for the amount of such dividend and/or distribution and/or return of capital.

The Offer will be governed by English law and subject to the jurisdiction of the English courts and to the conditions and further terms set out below and to be set out in the Offer Document and Form of Acceptance.

APPENDIX II

DETAILS OF IRREVOCABLE UNDERTAKINGS AND LETTERS OF INTENT

Herstal has received irrevocable undertakings to accept the Offer at a price of 85 pence per Manroy Share in respect of a total of 10,297,872 Manroy Shares, representing, in aggregate, approximately 54.1 per cent. of Manroy's existing issued share capital, comprised as follows:

Manroy Directors (and certain of their immediate family members)

 
                                       Per cent. of Manroy 
                    Number of Manroy                Shares 
 Name                         Shares              in issue 
-----------------  -----------------  -------------------- 
 Glyn Bottomley            2,081,632                  10.9 
 Andrew Blurton              345,526                   1.8 
 Louise Blurton              100,000                   0.5 
 Brian O'Donnell             231,900                   1.2 
 David Low                   225,000                   1.2 
 Gerald Clark                101,955                   0.5 
 Total                     3,086,013                  16.2

Other Manroy Shareholders

 
                                            Per cent. of Manroy 
                         Number of Manroy                Shares 
 Name                              Shares              in issue 
----------------------  -----------------  -------------------- 
 Caledonian Heritable 
  Limited                       4,394,069                  23.1 
 John Celaschi                  1,010,526                   5.3 
 Liopleurodon Capital 
  Limited                         740,597                   3.9 
 Surinder Rajput                  666,667                   3.5 
 Nigel Cobby                      400,000                   2.1 
 Total                          7,211,859                  37.9

The undertakings referred to above will not lapse in the event that a third party announces a competing offer to acquire the entire issued share capital of Manroy. In addition, all of the irrevocable undertakings include a commitment to vote in favour of the Rule 16 resolution (with the exception of Gerald Clark and Liopleurodon Capital Limited who are both associated with Maher Limited and are therefore not deemed to be independent for the vote).

Further, Herstal has received letters of intent to accept the Offer from Schroder Investment Management and Ashcourt Rowan Asset Management in respect of a total of 2,242,141 Manroy Shares, representing, in aggregate, approximately 11.8 per cent. of the existing issued share capital of Manroy.

APPENDIX III

SOURCES AND BASES

(a) The value attributed to the existing and to be issued share capital of Manroy is based upon the 19,044,202 Manroy Shares in issue as at the date of this announcement.

(b) The value attributed to the ordinary share capital of Manroy is based upon the issued and to be issued share capital of Manroy as set out in (a) above.

(c) Unless otherwise stated, the financial information concerning Manroy has been extracted from the audited annual report and financial statements for Manroy for the periods ended 30 September 2013 and 30 September 2012.

(d) Manroy Share prices and premia have been derived from the Daily Official List and Fidessa and represent the Closing Prices on the relevant date.

(e) References to a percentage of Manroy's issued ordinary share capital are based on the number of Manroy Shares in issue as set out in paragraph (a) above.

APPENDIX IV

DEFINITIONS

The following definitions apply throughout this announcement unless the context requires otherwise.

 
 2006 Act                          the Companies Act 2006 (as amended, 
                                    modified, consolidated, re-enacted 
                                    or replaced from time to time) 
 AiM                               the market of that name, operated 
                                    by the London Stock Exchange 
 AiM Rules                         the AiM Rules for Companies published 
                                    by the London Stock Exchange 
 Australia                         the Commonwealth of Australia, 
                                    its states, territories and possessions 
 Board                             as the context requires, the board 
                                    of directors of Manroy or the board 
                                    of directors of Herstal and the 
                                    terms "Manroy Board" and "Herstal 
                                    Board" shall be construed accordingly 
 Business Day                      any day (other than a public holiday, 
                                    Saturday or Sunday) on which clearing 
                                    banks in London are open for normal 
                                    business 
 Canada                            Canada, its provinces and territories 
                                    and all areas under its jurisdiction 
                                    and political sub-divisions thereof 
 certificates or in certificated   a share or other security which 
  form                              is not in uncertificated form (that 
                                    is, not in CREST) 
 Chairman                          Andrew Blurton 
 Closing Price                     the closing middle market quotation 
                                    of a Manroy Share as derived from 
                                    the Daily Official List 
 CMA Phase 2 reference             a reference of an offer or possible 
                                    offer to the chair of The Competition 
                                    and Markets Authority for the constitution 
                                    of a group under Schedule 4 to 
                                    the Enterprise and Regulatory Reform 
                                    Act 2013 
 Conditions                        the conditions of and terms to 
                                    the Offer, as set out in Appendix 
                                    I of this announcement and to be 
                                    set out in the Offer Document 
 CREST                             the relevant system (as defined 
                                    in the Regulations) in respect 
                                    of which Euroclear UK & Ireland 
                                    Limited is the operator (as defined 
                                    in the Regulations) 
 Daily Official List               the Daily Official List of the 
                                    London Stock Exchange 
 disclosed                         placed (and available for viewing 
                                    by Herstal and its advisers) on 
                                    the electronic data room compiled 
                                    by Manroy containing information 
                                    relating to the Manroy Group by 
                                    no later 12 noon on 27 March 2014 
 First Closing Date                the date which is 21 days after 
                                    the day of posting of the Offer 
                                    Document 
 Form of Acceptance                the form of acceptance and authority 
                                    relating to the Offer accompanying 
                                    the Offer Document, which may only 
                                    be completed by holders of Manroy 
                                    Shares in certificated form 
 Herstal                           FN Herstal SA; a company registered 
                                    in Belgium with company number 
                                    RPM Liège 0441.928.931 and 
                                    whose registered office is at Voie 
                                    de Liege 33, B-4040 Herstal, Belgium 
 Herstal Group                     Herstal SA and its subsidiaries 
                                    and subsidiary undertakings 
 GPMG                              General Purpose Machine Gun 
 HMG                               Heavy Machine Gun 
 Maher                             Maher Limited; a company registered 
                                    in the UK with company number 00508859 
                                    and whose registered office is 
                                    at Dalton House, 60 Windsor Avenue, 
                                    London, SW19 2RR 
 Maher Advance                     the $500,000 advance to MUSA provided 
                                    by Maher 
 Manroy or the Company             Manroy Plc 
 Manroy Directors or Directors     the directors of Manroy at the 
  of Manroy                         date of this announcement 
 Manroy Group                      Manroy and its subsidiaries and 
                                    subsidiary undertakings 
 Manroy Share Incentive            the Manroy Enterprise Management 
  Scheme                            Incentive Scheme adopted by the 
                                    Company on 3 December 2010 over 
                                    a maximum of 10 per cent. of the 
                                    Company's issued share capital 
                                    with performance targets set by 
                                    the remuneration committee of the 
                                    Board 
 Manroy Shareholders or            holders of Manroy Shares 
  Shareholders 
 Manroy Shares or Shares           includes: 
                                   (a) the existing unconditionally 
                                    allotted or issued and fully paid 
                                    ordinary shares of 5 pence each 
                                    in the capital of Manroy; and 
                                   (b) any further ordinary shares 
                                    of 5 pence each in the capital 
                                    of Manroy which are unconditionally 
                                    allotted or issued and fully paid 
                                    before the Offer closes or before 
                                    such earlier date as Herstal (subject 
                                    to the Takeover Code) may determine 
                                    not being earlier than the date 
                                    on which the Offer becomes or is 
                                    declared unconditional as to acceptances 
 MUSA                              Manroy USA LLC; a company registered 
                                    in Alabama with registered number 
                                    434-547 and formed in Jackson County, 
                                    AL (6-5-2009) USA 
 Offer                             the recommended offer to be made 
                                    by Herstal to acquire the entire 
                                    issued and to be issued ordinary 
                                    share capital of Manroy on the 
                                    terms and subject to the conditions 
                                    set out in the Offer Document including, 
                                    where the context so requires, 
                                    any subsequent revision, variation, 
                                    extension, or renewal of such offer 
 Offer Document                    the formal offer document to be 
                                    sent to Manroy Shareholders on 
                                    behalf of Herstal containing the 
                                    terms and conditions of the Offer 
                                    and any subsequent document containing 
                                    the Offer 
 Offer Period                      the period commencing on 26 November 
                                    2013 when Manroy announced that 
                                    it was in talks with Herstal, Beretta 
                                    Holding S.P.A. and U.S. Ordnance, 
                                    Inc. and that an offer period had 
                                    commenced until the latest of (i) 
                                    the First Closing Date, (ii) the 
                                    date on which the Offer lapses 
                                    and (iii) the date on which the 
                                    Offer becomes unconditional 
 Offer Price                       85 pence per Manroy Share 
 Opus Corporate Finance            Opus Corporate Finance LLP 
 Outstanding Options               the outstanding options under the 
                                    Manroy Share Incentive Scheme 
 Regulations                       Uncertificated Securities Regulations 
                                    2001 (SI 2001 No. 3755) (as amended, 
                                    modified, consolidated, re-enacted 
                                    or replaced from time to time) 
 Restricted Jurisdiction           the United States and any jurisdiction 
                                    where local laws or regulations 
                                    may result in a significant risk 
                                    of civil, regulatory or criminal 
                                    exposure if information concerning 
                                    the Offer is sent or made available 
                                    to Manroy Shareholders in that 
                                    jurisdiction 
 Smith Square Partners             Smith Square Partners LLP 
 subsidiary and subsidiary         the meaning given to these terms 
  undertaking                       in the 2006 Act 
 Takeover Code or Code             the City Code on Takeovers and 
                                    Mergers 
 Takeover Panel or Panel           the Panel on Takeovers and Mergers 
 UK or United Kingdom              the United Kingdom of Great Britain 
                                    and Northern Ireland (and its dependent 
                                    territories) 
 uncertificated or in              a Manroy Share which is for the 
  uncertificated form               time being recorded on the relevant 
                                    register of the share or security 
                                    concerned as being held in uncertificated 
                                    form in CREST, and title to which, 
                                    by virtue of the Regulations, may 
                                    be transferred by means of CREST 
 United States or US               the United States of America, its 
                                    territories and possessions, any 
                                    state of the United States of America 
                                    and the District of Columbia

All references to time in this announcement are to London time.

Words importing the singular shall include the plural and vice versa, and words importing the masculine shall include the feminine or neutral gender.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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