Proposed Return of Cash, Proposed Withdrawal from AQSE and Notice of General Meetings

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 announcement contains inside information for the purposes of UK Market Abuse Regulation.

28 December 2023

WESTERN SELECTION PLC

("Western" or the "Company")

Proposed return of cash to Shareholders at 80.5p per Ordinary Share by means of a Capital Reduction and election to retain Ordinary Shares

Withdrawal of admission to trading on the AQSE Growth Market

Notices of General Meetings

1. Introduction

The Board of Western announces that it has, after considerable analysis and consideration, decided that it is in the best interests of Shareholders to cease Western's investment activities and to return surplus capital in the Company to Shareholders by way of a return of capital ("Return of Capital"). It is proposed that the Return of Capital will result in Shareholders receiving 80.5 pence in cash for each Ordinary Share held.

The Company's liquid investments have been sold and, as at 27 December 2023, the Company has cash and deposit balances of approximately £14,555,000.  The Company has illiquid investments in Industrial & Commercial Holdings PLC ("ICH") and City Group PLC ("City Group"), with a combined carrying value of £46,000, that it has not yet, despite endeavouring to do so, managed to realise.  Following completion of the Return of Capital, the Company's strategy will then be to seek to realise the illiquid investments in an orderly manner and return surplus cash to its remaining Shareholders.  The amount that may be realised from the sale of these illiquid investments could be substantially greater than their present carrying value, but the amount and timing of any realisation is uncertain and, particularly for ICH, may be some years in the future.

As an alternative to the cancellation of their Ordinary Shares and receipt of 80.5 pence in cash, Shareholders will be given the option of retaining some or all of their Ordinary Shares in the Company until these illiquid investments have been realised, whereupon it is intended that the Company will be wound up and all remaining surplus cash (if any) distributed to the remaining Shareholders.  

It is proposed that the Return of Capital be effected by means of a Capital Reduction.  The Directors have determined that it will be simpler and less costly to achieve the proposed Capital Reduction if the Admission of the Ordinary Shares to trading on the AQSE Growth Market is cancelled ("Withdrawal") and the Company is re-registered as a private company first.  The Directors are also proposing that the Company should adopt the New Articles upon the Company being re-registered as a private limited company, which they consider to be more suitable for its then status as a private limited company.

Accordingly, the proposed Return of Capital will be implemented in two stages with one general meeting as a public limited company and a second general meeting to be held once the Company has re-registered as a private limited company, in order to approve the Capital Reduction.

The Company's major shareholder, London Finance & Investment Group PLC ("Lonfin"), has conditionally undertaken to vote its holding of 7,860,515 shares in the Company (43.8 per cent. of the Company's issued ordinary share capital) in favour of Resolutions 2, 3 and 4 at the First General Meeting.  Lonfin is not entitled to vote on Resolution 1 at the First General Meeting.  Lonfin has also undertaken to vote its holding in favour of the resolution to approve the Capital Reduction which will be proposed at the Second General Meeting.

The Company is also in receipt of irrevocable undertakings from 5 other significant shareholders holding in aggregate 19.4 per cent. of the Company's issued ordinary share capital to vote their holdings in favour of all the Resolutions at the First General Meeting and the Resolution at the Second General Meeting. 

The first stage in the process is the approval at the First General Meeting of (i) a Rule 9 Waiver of obligations under the Takeover Code, (ii) the Withdrawal, (iii) the re-registration of Western as a private company and (iv) the adoption of the New Articles, to be effected by the approval of the Resolutions. 

The second stage in the process will be the approval of the Capital Reduction itself, to be proposed at the Second General Meeting, to be convened following and conditional on the passing of the Resolutions at the First General Meeting.

Western requires that at least 57,143 shares be retained by Shareholders following the Return of Capital in order to fund the illiquid investments.  Lonfin has conditionally committed by way of an irrevocable undertaking to retain at least 25,029 Ordinary Shares and, depending on the number of Ordinary Shares that other Shareholders wish to retain, intends to retain the minimum number of additional Ordinary Shares so that the number of Ordinary Shares remaining in issue is at least 57,143 and Lonfin's percentage holding does not fall below 43.8 per cent.  Following completion of the Return of Capital, Lonfin will own between 43.8 per cent. and 100 per cent. of the issued Ordinary Share capital of the Company, depending on the number of Ordinary Shares that other Shareholders elect to retain.

Under Rule 9 of the Takeover Code (the "Code"), if any person acquires an interest in shares which (taken together with shares in which the person and any person acting in concert with that person are interested) carry 30 per cent. or more of the voting rights of a company which is subject to the Code, that person is normally required to make a mandatory offer in cash to all Shareholders in the company at the highest price paid by it or any person acting in concert with it for an interest in such shares within the preceding 12 months.

The Panel has agreed to waive this obligation subject to the approval of the Independent Shareholders of the Rule 9 Waiver Resolution.  Accordingly, the Company will be seeking approval by the Independent Shareholders of a Rule 9 Waiver of obligations under the Code for Lonfin to make a Rule 9 offer.  Further details on the Code and the Rule 9 Waiver Resolution are set out in paragraph 4 of this letter.

Should Shareholder approval for the Rule 9 Resolution not be obtained at the General Meeting, the Proposals, including the Return of Capital, will proceed in any event and either Lonfin will not increase its interest in the Company, or Lonfin will make an offer to all Shareholders who have elected to retain their Shares to buy those Shares from the remaining Shareholders at a price of 80.5p each.

A circular (the "Circular") is being sent to Shareholders shortly setting out the background to, and the reasons for, the proposed Return of Capital and the Resolutions to approve the Rule 9 Waiver, the Withdrawal, the re-registration of the Company as a private limited company and the adoption of the New Articles and containing notices of the two general meetings, which will be held at Central Court, 25 Southampton Buildings, London WC2A 1AL at 11.00 a.m. on 25 January 2024 and 31 January 2024.  The Circular also contains details of how Shareholders can vote at the two General Meetings, and how they can elect to retain some or all of their Ordinary Shares if they chose to do so.

Shareholders who hold their Ordinary Shares in certificated form and who wish to retain some or all of their Ordinary Shares should complete and return a Form of Election which is enclosed with the Circular to the Company's receiving agent Neville Registrars in accordance with the instructions thereon, and return it as soon as possible but in any event before 1.00 p.m. on 23 January 2024.  Shareholders who hold Ordinary Shares in uncertificated form (i.e. in CREST) and wish to retain Ordinary Shares must make their election electronically through CREST by no later than 1.00 p.m. on 23 January 2024.

2. Return of Capital

Background to and Reasons for the Return of Capital

The Company has not been consistently fulfilling its objective to generate value for Shareholders over the medium to long term.  The Directors have considered alternative means to achieve the Company's strategic objective but have concluded that in the current regulatory environment the Company is:

• too small to meet the strategic objective,
• unable to raise additional share capital without significantly diluting the interests of Shareholders, and
• not an attractive acquisition target for other companies.

The Directors are therefore proposing to return surplus capital to Shareholders by means of a Capital Reduction.

Structure and Conditions of the proposed Return of Capital

By undertaking the Capital Reduction, the Company will simultaneously return capital to Shareholders and reduce the number of Ordinary Shares in issue. The Company must first determine how many Ordinary Shares are to be cancelled pursuant to the Capital Reduction. A company must, as a matter of company law, treat all members of the same class of shares in the same manner when undertaking a capital reduction.

In order to ensure that all Shareholders are treated the same, it is the view of the Independent Directors that Shareholders should be given the opportunity to elect how many Ordinary Shares they wish to keep, with the default option being that in the event of there being no demonstrable and effective response/election to retain their interests in Ordinary Shares, their Ordinary Shares are cancelled and a cash payment is made to them based on the number of Ordinary Shares held with the Company's share capital being reduced commensurately.

The Capital Reduction is structured as a cancellation and repayment of all Ordinary Shares other than those in respect of which a valid election is made to retain such Ordinary Shares. It is the Company's intention to undertake the Capital Reduction via the solvency statement procedure pursuant to sections 642 to 644 of the Companies Act 2006 (the "Act"). The solvency statement procedure can only be undertaken by a private company limited by shares and can therefore only take place subject to the approval of the Resolutions at the First General Meeting. The solvency statement procedure will require the Directors to give a statement of solvency confirming, amongst other things, that they have each formed the opinion that there is no ground on which the Company could then be found to be unable to pay (or otherwise discharge) its debt.

Once the Company has received the Shareholder elections referred to above, the Capital Reduction will need to be approved by special resolution of the Company's members (i.e. by not less than 75 per cent. of those eligible to vote at a general meeting) at the Second General Meeting.  Further information on the resolution to be proposed at the Second General Meeting is set out in the Circular.

3. Information on the Company

Prior to the announcement of the Proposals, the Company had, as at 30 June 2023, the following net assets:

	30 June 2023
	£000
Non-current Assets:
Investment in Associated companies	46
Investments in Core Holdings	1,501
	1,547
Current Assets
Treasury other financial assets	11,208
Trade and other receivables	30
Cash and cash equivalents	1,856
	13,094
Current Liabilities
Trade and other payables	(120)
Net Current Assets	12,974
Net Assets	14,521

As at 27 December 2023 (the latest practical date prior to the issue of this announcement), the Company had illiquid investments in ICH and City Group with a book value of £36,000 and £10,000 respectively, cash and cash equivalents of approximately £14,555,000 and sundry creditors and accruals of approximately £58,000. 

The Company has 17,949,872 Ordinary Shares in issue and estimated net assets per share of approximately 80.5p.

ICH is a small unquoted PLC in which the Company holds a 29.9 per cent. interest.  ICH owns land with potential for residential planning permission at Milngavie, adjacent to Dougalston golf course, just north east of Glasgow. The land owned was professionally valued at £425,000 on 27 April 2023 factoring in that no planning permission had been granted.  If planning permission is granted, the value of the land would likely be significantly higher. 

The Company also holds 48.6 per cent. and Lonfin holds 51.4 per cent. of City Group which provides head office and company secretarial services to both these and other  companies. 

Further information on ICH and City Group is set out in the Circular.

The Directors have not been able to arrange the disposal of the Company's illiquid investments for a price that in the opinion of the Directors fully reflects their potential value and so Shareholders are being given the opportunity under the Return of Capital to retain Ordinary Shares instead of receiving cash.  Shareholders should be aware that there remains significant uncertainty over the realisable value of the Company's investments in both ICH and City Group and the prospects and timing of any realisation. 

If the Return of Capital is approved, Jane Dumeresque, Andrew Hall and Nick Stagg will resign from the Board and the ongoing Board of Western will comprise two Directors, namely David Marshall and Edward Beale, neither of whom will be considered as independent directors.  Following completion of the proposals, the Board intends to reduce the Company overheads to approximately £30,000 per annum.

The Company's strategy will then be to seek to realise the illiquid investments in an orderly manner and return surplus cash to its remaining Shareholders.  Further information on the illiquid investments, ICH and City Group, is set out in the Circular.

Following completion of the Return of Capital

Following completion of the Return of Capital, the Company is expected to have net assets consisting of: investments in ICH and City Group with a book value of £46,000 and cash balances net of creditors and accruals of approximately £38,000 if 57,143 Ordinary Shares are retained.  If Shareholders elect to retain more than 57,143 Ordinary Shares, cash balances retained will increase by 80.5 pence per additional Ordinary Share retained.

Some Ordinary Shares will need to remain in existence following completion of the Return of Capital so that the Company can continue to operate until it has realised its illiquid investments in ICH and City Group.

Lonfin has conditionally committed by way of an irrevocable undertaking to retain at least 25,029 Ordinary Shares and, depending on the number of Ordinary Shares that other Shareholders wish to retain, will retain the minimum number of additional Ordinary Shares so that the number of Ordinary Shares remaining in issue is at least 57,143 and Lonfin's percentage holding does not fall below 43.8 per cent.  Lonfin has conditionally agreed to make this election and the Company has agreed with Lonfin that Lonfin will submit its Form of Election after the time and date for submission of other Shareholders' Forms of Election has passed, to ensure that Lonfin elects to retain the appropriate number of Ordinary Shares to effect the above.

Loan Facility Agreement

Western has entered into the Loan Facility Agreement, which is subject to the approval of the Capital Reduction, whereby Lonfin has agreed to provide a loan facility from Lonfin's existing cash resources to finance the operating costs of the Company after the distribution of surplus capital under the Return of Capital. 

The main terms of the Loan Facility Agreement are as follows:

1. The Loan Facility, which will be unsecured, will bear interest at a fixed rate of 3 per cent. per annum above the Bank of England base rate payable quarterly, and will be repayable in full by 31 December 2027 (the "Expiry Date").  Interest shall accrue daily and the Company shall pay the accrued interest, on the amount of loan taken, on the interest period dates.
2. The amount that will be available to borrow by the Company under the Loan Facility Agreement will be £200,000, of which £150,000 may be drawn down immediately following the approval of the Capital Reduction, and the balance of £50,000 will be available for draw down by the Company at any time prior to the Expiry Date.

Under Rule 4.6 of the AQSE Rules, the Loan Facility Agreement is considered to be a related party transaction. The Independent Directors consider that, having exercised reasonable care, skill and diligence, the Loan Facility Agreement is fair and reasonable as far as Shareholders are concerned.

4. Takeover Code and Rule 9 Waiver

The Code applies to the Company. Under Rule 9 of the Code, any person who acquires an interest in shares which, taken together with shares in which that person or any person acting in concert with that person is interested, carry 30 per cent. or more of the voting rights of a company which is subject to the Code is normally required to make an offer to all the remaining shareholders to acquire their shares.

Similarly, when any person, together with persons acting in concert with that person, is interested in shares which in the aggregate carry not less than 30 per cent. of the voting rights of such a company but does not hold shares carrying more than 50 per cent. of the voting rights of the company, an offer will normally be required if such person or any person acting in concert with that person acquires a further interest in shares which increases the percentage of shares carrying voting rights in which that person is interested.

An offer under Rule 9 must be made in cash at the highest price paid by the person required to make the offer, or any person acting in concert with such person, for any interest in shares of the company during the 12 months prior to the announcement of the offer.

Under Rule 37.1 of the Code, when a company redeems or purchases its own voting shares, any resulting increase in the percentage of shares carrying voting rights in which a person or group of persons acting in concert is interested will be treated as an acquisition for the purpose of Rule 9.  Subject to prior consultation, the Panel will normally waive any resulting obligation to make an offer under Rule 9 if those Shareholders of the company who are independent of the person who would otherwise be required to make a mandatory offer and any person acting in concert with them and do not have any interest in the transaction which may compromise their independence (the "Independent Shareholders") pass an ordinary resolution on a poll at a general meeting (a "Rule 9 Waiver Resolution") approving such a waiver.

Lonfin is beneficially interested in 7,860,515 Ordinary Shares representing 43.8 per cent. of the Company's issued Ordinary Share capital. The Company has agreed with the Panel that David Marshall and Edward Beale, who are directors of both Lonfin and Western, are considered to be acting in concert with Lonfin and are not Independent Directors.  David Marshall and Edward Beale have no beneficial interest in Ordinary Shares.  

If the Resolutions are approved at the General Meeting and the Return of Capital is approved at the Second General Meeting, the interests of Lonfin in the Company may increase, depending on the extent to which Lonfin and other Shareholders elect to retain Ordinary Shares in the Company under the terms of the Return of Capital.  Following completion of the Return of Capital, Lonfin will own between 43.8 per cent. and 100 per cent. of the issued Ordinary Share capital of the Company, depending on the number of Ordinary Shares that other Shareholders elect to retain.

The table below sets out examples of the resultant holding of Lonfin in the Company in various illustrative cases as determined by the percentage elections to retain Ordinary Shares by Independent Shareholders and Lonfin following completion of the Proposals:

% of Ordinary Shares held by Shareholders other than Lonfin that are retained	% of Ordinary Share held by Lonfin that are retained	Number of Ordinary Shares held by Shareholders other than Lonfin following completion of the Proposals	Number of Ordinary Shares held by Lonfin following completion of the Proposals	Number of Ordinary Shares in issue following completion of the Proposals	% of Ordinary Shares held by Lonfin following completion of the Proposals
10%	10%	1,008,936	786,052	1,794,987	43.8%
5%	5%	504,468	393,026	897,494	43.8%
2%	2%	201,787	157,210	358,997	43.8%
1%	1%	100,894	78,605	179,499	43.8%
0%	0.73%	-	57,143	57,143	100.00%

The Panel has agreed to waive the obligation for the Concert Party to make a general offer to all Shareholders which would otherwise arise under Rule 9 as a result of the Return of Capital, subject to the approval of Independent Shareholders. Accordingly, Resolution 1 is being proposed at the General Meeting of the Company and will be taken on a poll.  None of the members of the Concert Party are considered to be independent and they will not be entitled to vote on this Resolution.

Following completion of the Return of Capital, Lonfin may hold Ordinary Shares carrying more than 50 per cent. of the voting rights of Western and Lonfin would then be free to acquire further Ordinary Shares going forward without incurring any obligation under Rule 9 of the Code to make a mandatory offer, although individual members of the Concert Party will not be able to increase their percentage interests in Ordinary Shares through or between a Rule 9 threshold without Panel consent.

Following completion of the Return of Capital, Lonfin may hold Ordinary Shares carrying more than 30 per cent. of the voting rights of Western but may not hold Ordinary Shares carrying more than 50 per cent. of the voting rights of the Company. Any increase in Lonfin's interest in Ordinary Shares and, for so long as they continue to be acting in concert, any increase in the Concert Party's aggregate interest in Ordinary Shares would then be subject to the provisions of Rule 9.

5. Information on and intentions of the Concert Party

The Concert Party comprises Lonfin, together with David Marshall and Edward Beale, who are directors of both Lonfin and Western.  Further information on the Concert Party is set out in the Circular.

The Concert Party intends to support fully the Company's strategy to seek to cancel the admission of the Ordinary Shares to trading on the AQSE Growth Market, realise the illiquid investments in an orderly manner and return surplus cash to its remaining Shareholders.  Further information on the illiquid investments, ICH and City Group, is set out in the Circular.

The Independent Directors and the members of the Concert Party are of the view that the Proposals will provide Shareholders with the opportunity to receive a full or partial cash return for their investment or to remain as Shareholders in the Company and which the Independent Directors believe are in the best interests of the Company.

In providing their recommendation, the Independent Directors have taken into account the above statements of intentions of the members of the Concert Party with respect to the future operations of the business and the fact that no changes as described above are proposed.

6. Implementation of the Return of Capital

The proposed Return of Capital will be implemented in two stages:

First stage

The First General Meeting will be held to approve the Withdrawal, the re-registration of the Company as a private company, the adoption of the New Articles and to approve the Rule 9 Waiver of obligations under the Code.

If the Withdrawal, the re-registration of the Company as a private company, and the adoption of the New Articles are approved by Shareholders as pre-conditions to the Return of Capital and once the delisting has been completed and the re-registration of the Company as a private company has been registered at Companies House, the second stage of the Proposals can take place.

Second stage

The Second General Meeting will be held after the Company has been re-registered as a private company to approve the return of capital. It has been convened for a date after the Directors believe the Company will have been re-registered as a private limited company but if necessary the Second General Meeting will be adjourned to accommodate any delay in the re-registration process occurring.

7. Withdrawal of Admission to the AQSE Growth Market

In order for the Company to implement the Return of Capital, the Company will need to re-register as a private company and before doing so the Company will need to cancel the admission of its Ordinary Shares to trading on the AQSE Growth Market.

The Company's withdrawal from the AQSE Growth Market is conditional, pursuant to Rule 5.3 (2) of the AQSE Exchange Rules, upon the approval of not less than 75 per cent. of the votes cast by all Shareholders and 50 per cent. of the votes cast by Independent Shareholders (whether present in person or by proxy) at a General Meeting. A resolution to approve the withdrawal will be put to Shareholders at the First General Meeting.

In accordance with Rule 5.3 (3) of the AQSE Exchange Rules, the Company has announced its proposed withdrawal from admission to trading on the AQSE Growth Market and has provided not less than 20 Business Days' notice of its intended withdrawal of securities from admission to trading on the AQSE Growth Market. If the resolution to approve the withdrawal from admission to trading on the AQSE Growth Market is passed at the First General Meeting, it is proposed that the last day of trading in Ordinary Shares on the AQSE Growth Market will occur on 26 January 2024 and that the delisting from the AQSE Growth market will take effect at 8:00 a.m. on 29 January 2024.

If Shareholders wish to buy or sell Ordinary Shares on the AQSE Growth Market they must do so prior to the delisting becoming effective.

If the proposed withdrawal from admission to trading on the AQSE Growth Market is approved by Shareholders at the First General Meeting, there will be no formal market mechanism to trade the Ordinary Shares which may make it more difficult for Shareholders to buy and sell Ordinary Shares should they wish to do so although they may be able to sell their Ordinary Shares by private arrangement.

The Company does not intend to implement any form of share dealing mechanism following the withdrawal from admission to trading on the AQSE Growth Market.

8. Re-registration of the Company as a private company and adoption of the New Articles

In order to implement the Return of Capital effectively and cost efficiently, the Directors have concluded that it is in the best interests of the Company and its Shareholders to re-register the Company as a private limited company and to adopt the New Articles, as they consider that the process for a return of capital is cheaper and more straightforward as a private company than as a public limited company.

The New Articles are more appropriate for a private company whose shares are not admitted to trading on any stock exchange, being in a shorter form than at present.

A summary of the principal provisions of the New Articles is set out in the Circular.

Once the Resolutions to approve the re-registration of the Company and the adoption of the New Articles are passed and the re-registration has been completed, a re-registration certificate will issued by the Registrar of Companies.

9. General Meetings

First General Meeting

The First General Meeting will need to be held to approve the Withdrawal, the re-registration of the Company as a private company, the adoption of the New Articles and the Rule 9 Waiver of obligations under the Takeover Code (see below).  If the Withdrawal and the re-registration of the Company as a private company are approved by Shareholders as pre-conditions to the Return of Capital and once the Withdrawal has been completed and the re-registration of the Company as a private company has been registered at Companies House, the Second General Meeting will be held to approve the Capital Reduction.

The First General Meeting will be held at the offices of City Group at Central Court, 25 Southampton Buildings, London WC2A 1AL on 25 January 2024.  At that meeting Shareholders will be asked to approve the following actions:

1. the waiver of Lonfin's and the Concert Party members obligations under Rule 9 of the Takeover Code;
2. the Withdrawal of the admission of the Ordinary Shares to trading on the AQSE Growth Market;
3. the re-registration of the Company as a private company; and
4. the adoption of the New Articles.

The proposed resolutions to achieve this are as follows:

Resolution 1 will be proposed as an ordinary resolution, which means that to be passed, more than half the votes cast must be cast in favour of the resolution.  Members of the Concert Party are not allowed to vote on Resolution 1, which will be taken on a poll.

Resolutions 2, 3 and 4 will be proposed as special resolutions, which means that to be passed, at least three-quarters of the votes cast must be cast in favour of the resolutions, and, in the case of Resolution 2, at least half of the votes cast by Independent Shareholders.

Resolution 1 - Waiver of obligations under Rule 9 of The Takeover Code

The resolution seeks approval of the Rule 9 Waiver granted by the Panel of the obligations that would otherwise arise on the members of the Concert Party, both individually and collectively, to make a general offer to Shareholders pursuant to Rule 9 of the Takeover Code as a result of the cancellation of Ordinary Shares pursuant to the proposed Return of Capital and the increase in the percentage of the Concert Party's shareholding in the Company. Holders of 19.4 per cent. of Ordinary Shares have undertaken to vote in favour of this resolution.  Please note that only Independent Shareholders may vote on Resolution 1, which will be taken on a poll.

Resolution 2 - Withdrawal of the admission of the Ordinary Shares to trading on the AQSE Growth Market

The resolution is to approve the withdrawal of the Ordinary Shares from admission to trading on the AQSE Growth Market and to cancel the Company's listing. This is a special resolution and will require approval from not less than 75 per cent of the votes cast by all Shareholders and 50 per cent. of the votes cast by Independent Shareholders at the General Meeting in person or by proxy in accordance with Rule 5.3 (3) of the AQSE Exchange Rules  Holders of 63.2 per cent. of Ordinary Shares have undertaken to vote in favour of this resolution.  If this resolution is not passed, the Second General Meeting will be adjourned and the Proposals will not proceed.  Shareholders will not be asked to vote on the remaining resolutions.  The Directors will then consult with Shareholders on the future of the Company.

Resolution 3 - the re-registration of Western as a private company

This resolution to re-register the Company to a private company will only be proposed if Resolution 2 is approved.  This is a Special Resolution and will require approval from more than 75 per cent of those voting at the First General Meeting in person or by proxy.  Holders of 63.2 per cent. of Ordinary Shares have undertaken to vote in favour of this resolution.  If this resolution is not passed, the Second General Meeting will be adjourned and the Proposals will not proceed.  The Directors will then consult with Shareholders on the future of the Company.

Resolution 4 - the adoption of New Articles

This resolution to adopt new Articles of Association will only be proposed if Resolutions 2 and 3 are approved.  This is a Special Resolution and will require approval from more than 75 per cent of those voting at the First General Meeting in person or by proxy.  Holders of 63.2 per cent. of Ordinary Shares have undertaken to vote in favour of this resolution.  If this resolution is not passed, the Second General Meeting will be adjourned and the Proposals will not proceed.  The Directors will then consult with Shareholders on the future of the Company.

Second General Meeting

Return of Capital

The Second General Meeting will be held at the offices of City Group at Central Court, 25 Southampton Buildings, London WC2A 1AL on 31 January 2024.  If re-registration as a private company has not occurred by this date the meeting will be adjourned until a date that is expected to be after the date of re-registration.

The single resolution to be proposed at the Second General Meeting will be to approve the Capital Reduction and will be a Special Resolution and will require approval from more than 75 per cent. of those voting at the Second General Meeting in person or by proxy.  Holders of 63.2 per cent. of Ordinary Shares have undertaken to vote in favour of this resolution.  The notice of the Second General Meeting is set out in the Circular.  The Resolution authorises the reduction of the issued share capital of the Company of £7,179,948.80 to not less than £22,857.20 by the cancellation and extinguishment of up to 17,892,729 of the issued Ordinary Shares, or by cancelling and extinguishing such lesser number of Ordinary Shares as the Directors shall determine following the Company's receipt of valid forms of election in respect of the Return of Capital, that surplus capital of 80.5p per share be repaid to the holders of those shares cancelled.

10. Irrevocable Voting Undertakings

Lonfin has conditionally undertaken to vote its holding of 7,860,515 Ordinary Shares in the Company (representing 43.8 per cent. of the Company's issued ordinary share capital) in favour of Resolutions 2, 3 and 4 at the First General Meeting.  Lonfin is not entitled to vote on Resolution 1 at the First General Meeting.  Lonfin has also undertaken to vote its holding of 7,860,515 shares in the Company (43.8 per cent.) in favour of the resolution to approve the Capital Reduction which will be proposed at the Second General Meeting.

The Company is also in receipt of irrevocable undertakings from 5 other significant Shareholders holding in aggregate 3,483,426Ordinary Shares (representing 19.4 per cent. of the Company's issued ordinary share capital) to vote their holdings in favour of all the Resolutions at the First General Meeting and the Resolution at the Second General Meeting. 

11. Recommendation

The Independent Directors, having been so advised by Cairn on the Proposals, consider the proposed Return of Capital and the Rule 9 Waiver and the effect that the Proposals will have on Independent Shareholders generally, to be fair and reasonable and in the best interests of the Company and the Independent Shareholders as a whole. In providing its advice to the Independent Directors, Cairn has taken account of the Independent Directors' commercial assessments.

The Independent Directors believe that it is in the best interests of Independent Shareholders to accept the cash payment for their Ordinary Shares.  For Independent Shareholders electing to retain their existing Ordinary Shares, it should be noted that there is the possibility of an uplift in the value of ICH in due course.  However, the quantum of the value uplift and the timing of the uplift are uncertain and, in the meantime, Independent Shareholders will be holding shares in an unlisted, private company which will have no Independent Directors on its Board.

Accordingly, the Independent Directors unanimously recommend that Independent Shareholders vote in favour of the Rule 9 Waiver Resolution to be proposed at the First General Meeting, as they intend to do so or procure to be done in respect of their own beneficial shareholdings.  In addition, the Independent Directors unanimously recommend that Shareholders vote in favour of Resolutions 2, 3 and 4 at the First General Meeting and the Resolution at the Second General Meeting, as they intend to do or procure to be done in respect in respect of their own beneficial shareholdings.

David Marshall and Edward Beale, who are directors of Lonfin and therefore considered to be acting in concert with Lonfin, have taken no part in the consideration of the Proposals or the recommendation.  The members of the Concert Party are unable to vote their Ordinary Shares on the Rule 9 Waiver Resolution.

The Independent Directors accept responsibility for the contents of this announcement.

Enquiries:

Western Selection PLC	Tel:  [phone]
Cairn Financial Advisers LLP James Caithie / Sandy Jamieson/James Western	Tel:  [phone]

EXPECTED TIMETABLE OF PRINCIPAL EVENTS:

Date of this announcement	28 December 2023
Latest date for receipt of Forms of Proxy for First General Meeting	11.00 a.m. on 23 January 2024
Latest date for the receipt of Forms of Election	1.00 p.m. on 23 January 2024
Voting Record Date for First General Meeting	6.00 .p.m. on 23 January 2024
First General Meeting	11.00 a.m. on 25 January 2024
Result of First General Meeting announced via RIS	25 January 2024
Last day of dealings in the Company's Ordinary Shares on the AQSE Growth Market	26 January 2024
Withdrawal of trading of the Company's Ordinary Shares on the AQSE Growth Market	8.00 a.m. 29 January 2024
Latest date for receipt of Forms of Proxy for Second General Meeting	11.00 a.m. on 29 January 2024
Capital Reduction Record Date	6.00 p.m. on 29 January 2024
Voting Record date for Second General Meeting	6.00 p.m. on 29 January 2024
Re-registration of the Company as a private company registered at Companies House	30 January 2024
Second General Meeting	11.00 a.m. on 31 January 2024
Result of Second General Meeting announced via RIS	31 January 2024
Effective Date	1 February 2024
Despatch of share certificates to Shareholders who have elected to retain Ordinary Shares	within 14 days of the Effective Date
Distributions made to relevant Shareholders under the Return of Capital	within 14 days of the Effective Date

Notes:

(1)    All of the above timings refer to London time unless otherwise stated.

(2)    The dates and timing of the events in the above timetable and in the rest of this announcement are indicative only and may be subject to change.

(3)    If any of the above times or dates should change, the revised times and/or dates will be notified by an announcement through an RIS.

DEFINITIONS

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

"Admission"	admission of the Ordinary Shares to trading on the AQSE Growth Market
"AQSE"	Aquis Stock Exchange Limited, a UK-based stock market providing primary and secondary markets for equity and debt products and which is permissioned as a Recognised Investment Exchange
"AQSE Corporate Adviser Rules"	the AQSE Corporate Adviser Handbook published by AQSE
"AQSE Exchange Rules"	the AQSE Growth Market Access Rulebook, which set out the admission requirements and continuing obligations of companies seeking admission to, and whose shares are admitted to trading on, the Access segment of the AQSE Growth Market
"AQSE Growth Market"	the Access Segment of the AQSE Growth Market operated by AQSE
"Board" or "Directors"	the board of Directors of the Company
"Withdrawal"	the withdrawal of the Admission in accordance with the AQSE Exchange Rules
"Cairn"	Cairn Financial Advisers LLP, incorporated as a limited liability partnership registered in England with partnership number OC351689, the Company's AQSE Corporate Adviser and authorised and regulated by the FCA
"Capital Reduction"	the proposed reduction in the Company's share capital to simultaneously return capital to Shareholders and reduce the number of Ordinary Shares in issue, to be proposed at the Second General Meeting of the Company
"City Group"	City Group PLC, a company incorporated in England and Wales with registered number 1443918
"Company" or "Western"	Western Selection PLC, a company incorporated in England and Wales with registered number 234871
"Concert Party"	Lonfin, together with David Marshall and Edward Beale, who are directors of both Lonfin and Western
"Effective Date"	the date on which the Capital Reduction becomes effective
"Eligible Shareholders"	those Shareholders on the share register of the Company on the Capital Reduction Record Date
"Existing Ordinary Shares"	the 17,949,872 Ordinary Shares of £0.40 each in issue as at the date of this announcement
"First General Meeting"	the general meeting of the Company to be held at 11:00 a.m. on 25 January 2024 at Central Court, 25 Southampton Buildings, London WC2A 1AL, notice of which is set out in the Circular
"Form of Election"	form of election accompanying the Circular to enable Shareholders to elect to retain some or all of their Ordinary Shares
"ICH"	Industrial & Commercial Holdings PLC, a company incorporated in England and Wales with registered number 4024879
"Independent Directors"	Andrew Hall, Jane Dumeresque and Nick Stagg
"Independent Shareholders"	Shareholders entitled to vote on Resolution 1, being all Shareholders other than members of the Concert Party
"Loan Facility"	the loan facility to be provided by Lonfin to Western pursuant to the terms of the Loan Facility Agreement
"Loan Facility Agreement"	the loan facility agreement entered into by Lonfin and Western on 27 December 2023, subject to the approval of the Capital Reduction
"Lonfin"	London Finance & Investment Group PLC, a company incorporated in England and Wales with registered number 201151
"New Articles"	the proposed new Articles of Association of the Company, subject to the approval of Shareholders at the First General Meeting
"Notice of First General Meeting"	the notice of the First General Meeting set out in the Circular
"Notice of Second General Meeting"	the notice of the Second General Meeting set out in the Circular
"Ordinary Shares"	ordinary shares of £0.40 each in the capital of the Company
"Panel"	the Panel on Takeovers and Mergers
"Proposals"	the proposals to re-register the Company as a private limited company, adopt the New Articles, implement the Withdrawal and the Capital Reduction and enter into the Loan Facility Agreement, to be effected by the approval of the Resolutions at the First General Meeting and at the Second General Meeting
"Resolutions"	the resolutions to approve the Rule 9 Waiver, the Withdrawal, the re-registration of Western as a private company and the adoption of the New Articles, as set out in the Notice of First General Meeting included in the Circular and the resolution to approve the Capital Reduction as set out in the Notice of Second General Meeting included in the Circular
"Return of Capital"	the return of capital to Shareholders at 80.5 pence in cash for each Ordinary Share held to be effected by the Capital Reduction, subject to Shareholders electing to retain some or all of their existing holding of Ordinary Shares
"Rule 9"	Rule 9 of the Takeover Code
"Rule 9 Waiver"	the waiver granted by the Panel, subject to approval of the Independent Shareholders, of the obligation of Rule 9 for the Concert Party to make a general offer for the issued Ordinary Shares of the Company not under its control, which may otherwise arise as a result of the Capital Reduction
"Rule 9 Waiver Resolution"	resolution 1 at the First General Meeting to be voted on by Independent Shareholders in relation to the Rule 9 Waiver by means of a poll
"Second General Meeting "	the second general meeting, to be held at 11:00 a.m. on 31 January 2024 at Central Court, 25 Southampton Buildings, London WC2A 1AL to approve the Capital Reduction, notice of which is set out in the Circular, following the approval of the Resolutions to be proposed at the First General Meeting
"Shareholders"	the holders of Ordinary Shares from time to time
"Takeover Code" or "Code"	the City Code on Takeovers and Mergers issued by the Panel

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