IQE plc : proposed placing of ordinary shares

THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL

IQE plc

PROPOSED PLACING OF ORDINARY SHARES

Cardiff, UK, 10 July 2012: IQE plc (AIM: IQE, "IQE" ,the "Group" or the "Company"), the leading global supplier of advanced semiconductor wafer products and wafer services to the semiconductor industry, has been advised by Dr A W Nelson, Mr P J Rasmussen and Dr H R Williams (the "Selling Directors") of their intention to sell in aggregate up to 11,200,000 Ordinary Shares in the Company via an accelerated bookbuild placing (the "Placing"). This represents in aggregate 1.911 per cent. of the issued share capital of IQE.

The Company has been advised by the Selling Directors that the proceeds of the Placing will be used primarily to satisfy the personal tax liabilities and costs of exercising options by the Selling Directors on 12 June 2012.

Assuming that the maximum number of Ordinary Shares was sold pursuant to the Placing, the Selling Directors interest in the Company would be as follows:

	Options over Ordinary Shares exercised on 12 June 2012	Beneficial interest in Ordinary Shares before Placing	Proposed Sale of Ordinary Shares (maximum)	Beneficial interest in Ordinary Shares after Placing
	No.	No.	No.	No.	%
Dr A W Nelson	10,283,219	37,730,132	7,900,000	29,830,132	5.090%
Mr P J Rasmussen	1,157,822	1,652,822	800,000	852,822	0.145%
Dr H R Williams	3,294,088	3,972,430	2,500,000	1,472,430	0.251%

The Placing will be managed by Espirito Santo Investment Bank and Canaccord Genuity Limited ("Canaccord") acting as joint bookrunners (the "Joint Bookrunners"). The amount of the Placing proceeds, the number of Ordinary Shares in the Placing ("Placing Shares") and the Placing price will be decided at the close of the accelerated bookbuilding period.

The books for the Placing will open with immediate effect. Pricing and allocations are expected to be announced as soon as practicable following the closing of the books. The timing of closing of the books will be at the absolute discretion of the Joint Bookrunners.

The Ordinary Shares referred to above are the ordinary shares of 1 pence each in the Company.

Contacts:

IQE plc	[phone]
Drew Nelson
Phil Rasmussen
Chris Meadows
Espirito Santo Investment Bank	+ 44 (0) 20 7456 9191
Richard Crawley
James Bromhead
Canaccord Genuity	+ 44 (0) 20 7523 8000
Simon Bridges
Cameron Duncan
College Hill	[phone]
Adrian Duffield
Kay Larsen

Each of Execution Noble Limited (which conducts its UK investment banking business as Espirito Santo Investment Bank) ("Espirito Santo Investment Bank" or "BESI") and Canaccord Genuity Limited ("Canaccord") is acting on the Placing and will not be responsible to anyone other than its clients for providing the protections afforded to its clients, nor for providing advice in relation to the Placing, the contents of this announcement, or any transaction or arrangement referred to herein.

This announcement is for information purposes only and does not constitute or form part of an offer or invitation to acquire or dispose of any securities of IQE, or constitute a solicitation of any offer to purchase or subscribe for securities in any jurisdiction, including the United States, Canada, Australia or Japan. IQE's shares have not been, and will not be, registered under the United States Securities Act of 1933, as amended, or under the securities legislation of any state of the United States and may not be offered or sold in the United States absent registration or an exemption from registration.

IQE's shares may not, directly or indirectly, be offered or sold within the United States, Canada, Australia or Japan or offered or sold to a resident of Canada, Australia or Japan. No public offering of securities is being made in the United States.

This announcement is not for publication or distribution to persons in the United States of America, its territories or possessions or to any US person (within the meaning of Regulation S under the US Securities Act of 1933, as amended). Neither this announcement nor any copy of it may be taken or transmitted into Australia, Canada or Japan or to Canadian persons or to any securities analyst or other person in any of those jurisdictions. Any failure to comply with this restriction may constitute a violation of United States, Australian, Canadian or Japanese securities law. The distribution of this announcement in certain other jurisdictions may be restricted by law and persons into whose possession this announcement comes should inform themselves about, and observe, any such restrictions.

This announcement and any offer of securities to which it relates are only addressed to and directed at persons who are (1) qualified investors within the meaning of directive 2003/71/EC and any relevant implementing measures (the prospectus directive) and (2) who have professional experience in matters relating to investments who fall within article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or are persons falling within article 49(2)(a) to (d) ("High Net Worth Companies, Unincorporated Associations, etc") of the Order (all such persons together being referred to as "relevant persons"). The information regarding the Placing set out in this announcement must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this announcement relates is available only to relevant persons and will be engaged in only with relevant persons.

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Source: IQE plc via Thomson Reuters ONE

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