Offer in full: Recommended Cash Offer by Kop Football Limited ("Kop") For The Liverpool Football Club And Athletic Grounds Plc ("Liverpool") Summary and Highlights The Boards of Kop and Liverpool are pleased to announce that they have agreed the terms of a recommended cash offer to be made by Kop to acquire the entire issued share capital of Liverpool. The Offer is £5,000 in cash for each Liverpool Share, valuing the issued share capital of Liverpool at approximately £174.1 million. Together with the £44.8 million of net debt in the Club as at 31 December 2006, this represents an enterprise value for Liverpool of £218.9 million. Kop is an English private limited company, which has been incorporated for the specific purpose of making the Offer and which is ultimately jointly controlled by Mr. George Gillett Jnr. and Mr. Thomas O. Hicks. The Board of Liverpool, which has been so advised by PricewaterhouseCoopers and PKF, considers the terms of the Offer to be fair and reasonable. PKF is acting as the independent financial adviser to Liverpool in relation to Rule 3 of the Code. PricewaterhouseCoopers is acting as financial adviser to Liverpool. The Board of Liverpool unanimously recommends that Liverpool Shareholders accept the Offer. In considering the reasonableness of the Offer, the Liverpool Board has taken the following considerations into account: * Kop has indicated its intention to build, as soon as reasonably practicable, the proposed new 60,000 seat stadium at Stanley Park for which the Club has already received planning permission and to facilitate the financing of its construction; * Kop has indicated that it is committed to an annual budget for player transfers and is able to supplement this should Liverpool's management and Kop agree additional funds are required; and * Kop is supportive of both the current executives and the football team management at Liverpool to provide stability to the Club. All of the Liverpool Directors have irrevocably undertaken to accept the Offer in respect of their own beneficial shareholdings of Liverpool Shares. These holdings amount, in aggregate, to 18,187 Liverpool Shares, representing approximately 52.2 per cent. of the existing issued share capital of Liverpool. In respect of the undertakings given by the Liverpool Directors, these undertakings remain binding even if a higher competing offer is made for Liverpool and will only cease to be binding if the Offer lapses or is withdrawn. In addition, Kop has received an irrevocable undertaking to accept the Offer from ITV Productions Limited in respect of a further 3,482 Liverpool Shares, representing approximately 10.0 per cent. of the existing issued share capital of Liverpool, and this undertaking will cease to be binding if a competing offer is made or announced on or before the fifth Business Day after posting of the Offer Document for Liverpool at or above £5,500 for each Liverpool Share in cash and/or securities, or if the Offer lapses or is withdrawn. In aggregate, therefore, Kop has received irrevocable undertakings to accept the Offer in respect of 21,669 Liverpool Shares, representing approximately 62.2 per cent. of the existing issued share capital of Liverpool. To uphold the traditions of Liverpool, the Board of Kop has undertaken to continue the existing informal shareholder ticketing arrangements such that, subject to the Offer becoming or being declared unconditional in all respects, Liverpool Shareholders who validly accept the Offer in respect of the Liverpool shares which they held as at the Priority Tickets Relevant Time, will receive lifetime priority ticket purchasing rights, giving them priority rights to purchase tickets for home cup matches, cup finals and a season ticket for the new stadium (for those who are not already season ticket holders). Commenting on the Offer, George Gillett Jnr. and Thomas O. Hicks said: "Liverpool is a fantastic club with a remarkable history and a passionate fanbase. We fully acknowledge and appreciate the unique heritage and rich history of Liverpool and intend to respect this heritage in the future. The Hicks family and the Gillett family are extremely excited about continuing the Club's legacy and tradition." David Moores, Chairman of Liverpool, said: "I believe this is a great step forward for Liverpool, its shareholders and its fans. This Club is my passion and forms a huge part of my life. After much careful consideration, I have agreed to sell my shares to assist in securing the investment needed for the new stadium and for the playing squad. I urge all my fellow shareholders to do the same and to support the offer. By doing so, I believe you will be backing the successful future of Liverpool Football Club. I am also delighted to accept the offer from the Hicks and Gillett families to continue my involvement in the Club by becoming Honorary Life President." This summary should be read in conjunction with the full text of the following announcement and the Appendices. Appendix 1 sets out the conditions and principal further terms of the Offer. Appendix 2 contains source notes relating to certain information contained in this announcement. Appendix 3 contains details of the irrevocable undertakings received in relation to the Offer. Certain terms used in this announcement are defined in Appendix 4 to this announcement. Enquiries: Rothschild (Financial Adviser to Kop) +44 (0) 207 280 5000 Majid Ishaq Inner Circle Sports (US Financial Adviser to Kop) +1 212 370 4400 Robert Tilliss Allen & Overy LLP (Legal Adviser to Kop) +44 (0) 203 088 0000 Andrew Ballheimer Gareth Price Ed Barnett Financial Dynamics (PR Adviser to Kop) +44 (0) 207 831 3113 Jonathon Brill Mark Thompson PricewaterhouseCoopers (Financial Adviser to Liverpool) +44 (0) 161 245 2461 Colin Gillespie Richard Pulford DLA Piper UK LLP (Legal Adviser to Liverpool) +44 (0) 870 111 111 Michael Prince Vero Communications (PR Adviser to Liverpool) +44 (0) 207 554 1122 Mike Lee OBE Rothschild, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for Kop in connection with the Offer and no one else and will not be responsible to anyone other than Kop for providing the protections afforded to clients of Rothschild nor for providing advice in relation to the Offer or any matter referred to herein. Inner Circle Sports, which is authorised by NASD in the United States of America as a broker dealer is acting for Kop in connection with the Offer and no one else and will not be responsible to anyone other than Kop for providing the protections afforded to clients of Inner Circle Sports nor for providing advice in relation to the Offer or any matter herein. PricewaterhouseCoopers, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for Liverpool in connection with the Offer and no one else and will not be responsible to anyone other than Liverpool for providing the protections afforded to clients of PricewaterhouseCoopers nor for providing advice in relation to the Offer or any matter referred to herein. PKF, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Liverpool and no one else in connection with the Offer and will not be responsible to anyone other than Liverpool for providing the protections afforded to clients of PKF nor for providing advice in relation to the Offer, the content of this announcement or any other matter referred to herein. This announcement is not intended to and does not constitute or form any part of, an offer to sell or an invitation to purchase or the solicitation of an offer to subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Offer or otherwise. The Offer is being made solely through the Offer Document and the Form of Acceptance, which will together contain the full terms and conditions of the Offer, including details of how to accept the Offer. Any acceptance or other response to the Offer should be made only on the basis of the information contained in the Offer Document and the Form of Acceptance. The distribution of this announcement in jurisdictions other than the UK may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the UK should inform themselves about, and observe, any applicable requirements. This announcement has been prepared for the purpose of complying with English law and the 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 jurisdictions outside England. This announcement, including information included or incorporated by reference in this announcement, may contain "forward-looking statements" concerning Kop and Liverpool. Generally, the words "will", "may", "should", "continue", " believes", "expects", "intends", "anticipates" or similar expressions identify forward-looking statements. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond the companies' abilities to control or estimate precisely, such as future market conditions and behaviours of other market participants, and therefore undue reliance should not be placed on such statements. Kop and Liverpool assume no obligation and do not intend to update these forward-looking statements, except as required pursuant to applicable law. Dealing disclosure requirements Under the provisions of Rule 8.3 of the Code, if any person is, or becomes, ' interested' (directly or indirectly) in 1 per cent. or more of any class of ' relevant securities' of Liverpool, all 'dealings' in any 'relevant securities' of that company (including by means of an option in respect of, or a derivative referenced to, any such 'relevant securities') must be publicly disclosed by no later than 3.30 p.m. (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which the Offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the 'Offer Period' otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an 'interest' in 'relevant securities' of Kop or of Liverpool, they will be deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the Code, all 'dealings' in 'relevant securities' of Liverpool by Kop or Liverpool, or by any of their respective ' associates', must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose 'relevant securities' 'dealings' should be disclosed, and the number of such securities in issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk. 'Interests in securities' arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an 'interest' by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a 'dealing' under Rule 8, please contact an independent financial adviser authorised under the Financial Services and Markets Act 2000, consult the Panel's website at www.thetakeoverpanel.org.uk or contact the Panel. 6 February 2007 Recommended Cash Offer by Kop Football Limited ("Kop") for The Liverpool Football Club And Athletic Grounds Plc ("Liverpool") 1. Introduction The Boards of Kop and Liverpool are pleased to announce that they have agreed the terms of a recommended cash offer to be made by Kop to acquire the entire issued share capital of Liverpool. Kop is an English private limited company which has been incorporated for the specific purpose of making the Offer and is ultimately jointly controlled by Mr. George Gillett Jnr. and Mr. Thomas O. Hicks. The Offer is £5,000 in cash for each Liverpool Share. The Offer values Liverpool's entire issued share capital at approximately £174.1 million. Together with the £44.8 million of net debt in the Club as at 31 December 2006, this represents an enterprise value for Liverpool of £218.9 million. 2. Summary of the Offer Under the Offer, which will be subject to the conditions and further terms set out below and in Appendix 1 to this announcement and the full terms and conditions which will be set out in the Offer Document and the Form of Acceptance, Liverpool Shareholders will receive: £5,000 in cash for each Liverpool Share Liverpool Shares will be acquired fully paid with full title guarantee and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and any other third party rights and interests of any nature whatsoever and together with all rights now and hereafter attaching thereto 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 after the date of this announcement. 3. Intentions for the Club The Gillett and Hicks families are extremely enthusiastic about the possibility of continuing the legacy of such a prestigious and unique club. The families are ambitious and will strive to ensure that the Club is in the best position possible to achieve sustained, on-pitch success and long term stability. The families' ownership of the Club will be a multi-generational family commitment to invest in and develop the Club and the families hope that ultimately and over time, the Gillett and Hicks names become as synonymous with the Club as the Moores' name is today. The families are well aware of the importance of investment in new players to achieve on-pitch success and as such are prepared to commit resources to make appropriate investment in the playing squad. The Gillett family's investment in the Montreal Canadiens demonstrates its belief in investing in teams to generate success. The Gillett family has invested in the Canadiens playing squad to the maximum allowable level as permitted by the National Hockey League. Likewise, Thomas O. Hicks has demonstrated his commitment to winning through his ownership and continual investment in the playing squads of both the Dallas Stars and Texas Rangers. The Gillett and Hicks families have a strong appreciation of the special tradition and heritage of the Club and will do everything in their power to uphold the cherished traditions and continue to enhance the reputation of the Club. Liverpool Football Club is a club of outstanding historical wealth and the Gillett and Hicks families hope that they can be a part of a successful future at the Club, together with the players, manager, coaches, staff members and, most importantly, the fans. Kop understands that to ensure that the Club remains as one of the top clubs in the FA Premier League it needs to move to a new state of the art stadium with an increased capacity from its current home of Anfield. As such, the families have indicated their intention to take forward the Stanley Park development, for which planning permission has already been received, and intend to commence the process of building one of the leading stadia in Europe. Kop recognises the importance of a new stadium to the Club and its objective is to ensure that the Club has the appropriate resources and infrastructure for a football club with the history and stature in the world of football which Liverpool has and in order to continue to compete at the highest level of club football. Contrary to misinformed press reports, at no time has Kop discussed the possibility of a shared stadium with any other football club, nor is there any intention to do so. 4. Formalising the priority ticket purchasing rights The custom and practice of giving Liverpool Shareholders priority rights to purchase certain matchday tickets has never been formalised. The Boards of Liverpool and Kop both recognised that these privileges could be lost by Liverpool Shareholders on selling their Liverpool Shares under the Offer. Accordingly, the Board of Kop wishes to uphold this tradition in recognition of the loyal and valued support of the Liverpool Shareholders. Kop will therefore undertake to ensure that these existing informal ticketing privileges will, subject to the Offer becoming or being declared unconditional in all respects, be formalised into lifetime priority ticket purchasing rights for Liverpool Shareholders who validly accept the Offer in respect of the Liverpool Shares which they held as at the Priority Tickets Relevant Time, giving them priority rights to purchase tickets for home cup matches, cup finals and a season ticket for the new stadium (for those who are not already season ticket holders). Further details of these priority rights will be set out in the Offer Document. 5. Recommendation The Liverpool Directors, who have been so advised by PricewaterhouseCoopers and PKF, consider the terms of the Offer to be fair and reasonable. PKF is acting as the independent financial adviser to Liverpool in relation to Rule 3 of the Code. PricewaterhouseCoopers is acting as financial adviser to Liverpool. However because PricewaterhouseCoopers has a business relationship with certain entities associated with Mr. George Gillett Jnr. and with Mr. Thomas O. Hicks, it is not, as a consequence, with respect to the Offer, an independent adviser for the purposes of the Code. In providing their advice, PricewaterhouseCoopers and PKF have taken into account the commercial assessments of the Liverpool Directors. Accordingly, the Liverpool Directors unanimously recommend that Liverpool Shareholders accept the Offer, as the Liverpool Directors have irrevocably undertaken to do in respect of their own beneficial shareholdings which amount, in aggregate, to 18,187 Liverpool Shares, representing 52.2 per cent. of the existing issued share capital of Liverpool. 6. Irrevocable undertakings Kop has received irrevocable undertakings to accept the Offer in respect of a total of 21,669 Liverpool Shares representing, in aggregate, approximately 62.2 per cent. of the existing issued share capital of Liverpool, comprised as follows: (a) from David Moores, Chairman of Liverpool, in respect of his entire beneficial holding of 17,923 Liverpool Shares representing approximately 51.5 per cent. of the existing issued share capital of Liverpool; (b) from Terence Smith in respect of his entire beneficial holding of 264 Liverpool Shares representing, in aggregate, approximately 0.8 per cent. of the existing issued share capital of Liverpool; and © from ITV Productions Limited in respect of its entire holding of 3,482 Liverpool Shares, representing approximately 10.0 per cent. of the existing issued share capital of Liverpool. In respect of the undertakings given by the Liverpool Directors, these undertakings will cease to be binding only if the Offer lapses or is withdrawn and remain binding in the event that a higher competing offer for Liverpool is made. In respect of the undertaking given by ITV Productions Limited, this undertaking will cease to be binding if a competing offer is made or announced on or before the fifth Business Day after posting of the Offer Document for Liverpool at or above £5,500 for each Liverpool Share in cash and/or in securities, or if the Offer lapses or is withdrawn. Further details of these irrevocable undertakings are set out in Appendix 3. 7. Background to and reasons for the Offer Despite its strong track record, over recent years the Club's Board has actively sought new investment to enable the Club to continue to compete at the highest level, as well as to realise the Club's ambitions of moving to a new stadium located at Stanley Park. As a pre-requisite to any investment, the Board required that any new investor appreciated both the need for continued player funding and to facilitate the building of the new stadium at Stanley Park. It was equally important to the Board of Liverpool that any new investor understood and appreciated Liverpool's unique heritage and tradition built up over so many years. As part of the process of securing new investment in the Club, on 4 December 2006, Liverpool confirmed that it had entered into a period of exclusive negotiations with Dubai International Capital ('DIC') about a possible investment in the Club. Prior to this time, George Gillett Jnr. and his advisers had been in discussions with the Liverpool board regarding a possible offer for the Club. Once the exclusivity period with DIC had ended without resolution, and following a new proposal being received by the Club from George Gillett Jnr. and Thomas O. Hicks, discussions were held between George Gillett Jnr., Thomas O. Hicks and Liverpool with a view to consummating a transaction, which would be in the best interests of the Liverpool Shareholders and be the best transaction for the future stability and success of the Club. These discussions have resulted in the Offer by Kop. The Board of Liverpool believes that the Offer is fair and reasonable and has received assurances that Kop has access to the finance that is required to realise the Club's immediate ambitions and that Kop at the same time truly recognises and appreciates Liverpool's unique history and tradition. Kop shares the wishes and ambitions of the fans for the Club to be playing top quality football in a new stadium, which it believes will take Liverpool to a new level of success in the Barclays Premiership and Europe. It is also recognised that the new stadium is a catalyst for the regeneration of the local area furthering the Club's involvement with the local community in and around Anfield. Kop is fully aware of the current requirements of Liverpool and accordingly, Kop: * intends to build, as soon as reasonably practicable, the proposed new 60,000 seat stadium at Stanley Park for which the Club has already received planning permission and to facilitate the financing of its construction; * is committed to an annual budget for player transfers and is able to supplement this should Liverpool's management and Kop agree additional funds are required; and * is supportive of both the current executives and football team management at Liverpool to provide stability to the Club. Further information with respect to the longer term strategy of the Club and the effect on employee arrangements can be found in paragraph 11 below. 8. Information relating to Kop, George Gillett Jnr. and Thomas O. Hicks Kop, a private limited company incorporated in England and Wales, was formed on 18 December 2006, exclusively for the purpose of making the Offer. The company number is 6032198. Since its incorporation, Kop has not traded. The current directors of Kop are George Gillett Jnr., Foster Gillett, Thomas O. Hicks and Thomas O. Hicks Jnr. George N. Gillett Jnr., 68, is an experienced operator in the sports sector. He was business manager and a partner in the Miami Dolphins in the late 1960s and owner of the Harlem Globetrotters in the 1970s. He and his family are the current majority owners of the Montreal Canadiens, the oldest and one of the most successful ice hockey franchises in the NHL. The Canadiens have won the Stanley Cup Championship 24 times. Although he continues to have a portfolio of investments, George Gillett Jnr. spends a significant amount of time with the Montreal Canadiens. His son, Foster Gillett, is the managing partner. The Gillett family intend to be long-term owners of the Montreal Canadiens, where they have invested heavily in the club to the benefit of the team and the local area. Under the Gillett ownership, the Canadiens have made the play-offs in three out of the last four seasons. The family is committed to sporting success, be it on the ice-hockey rink or on the football pitch. Their objective in sport is to attain the number one position; ultimately winning trophies is their goal. The family's involvement in sports team ownership has demonstrated this commitment to building a successful team and to winning whilst at the same time working to enhance the local community. Thomas O. Hicks, 60, is also an experienced operator in the sports business sector. The Hicks family's interests, amongst others, include ownership of the Stanley Cup-winning NHL team, the Dallas Stars, and Major League Baseball's Texas Rangers as well as Hicks Holdings LLC, a holding company of substantial interests in sports, real estate, oil/gas and other assets and investments. Under Hicks' ownership, the Dallas Stars have won seven division titles, two Western conference championships, two President's Trophies and a Stanley Cup Championship. In 1998 and 1999 the Texas Rangers won the American League West. Mr. Hicks also co-founded and was for many years the Chairman of the leading private equity firm Hicks, Muse, Tate and Furst. 9. Information relating to Liverpool Liverpool is one of the leading football clubs in the world with an international reputation and a broad fan base which embodies the passion and excitement of the world's most popular sport. Historically the most successful football club in England, the Club has had significant success in both English and European football. The Club has won the European Cup five times, most recently in 2005, the European Super Cup three times, and the UEFA Cup three times. Domestically, the Club has been the champions of the Football League eighteen times (more than any other club), won the FA Cup seven times, most recently in 2006, and has won the League Cup (currently named the Carling Cup) seven times. Most of these were won during a period of unprecedented and unrivalled success in the 1970s and 1980s which have created a high profile and worldwide support for Liverpool. Currently, the team is one of the best teams in the Barclays Premiership, having consistently finished in the top five in recent years and having won the UEFA Champions League in May 2005. Liverpool had a successful season in 2005/2006 having achieved third place in the Barclays Premiership (which guaranteed entry to the qualifying round of this season's UEFA Champions League) and having won the FA Cup which further raised its profile following Liverpool's 2005 UEFA Champions League victory. Liverpool also operates a successful and well respected academy, which has produced a significant number of first team players. Last season, Liverpool won the FA Youth Cup for only the second time in its history. 10. Financing of the Offer The cash consideration payable under the Offer will be funded from facilities made available to Kop, which are personally guaranteed by the Gillett and Hicks families. Rothschild, financial adviser to Kop, is satisfied that sufficient resources are available to Kop to satisfy in full the cash consideration payable to Liverpool Shareholders under the terms of the Offer. Further details of the financing will be sent out in the Offer Document. 11. Management and employees Following the Offer becoming or being declared unconditional in all respects Kop will work with the executive management team of Liverpool and expects that Rick Parry and the other existing members of senior management will continue to run the ongoing business of Liverpool. Following the Offer becoming or being declared unconditional in all respects, David Moores has confirmed he will accept the position of Honorary Life President. It is expected that, upon the Offer becoming or being declared wholly unconditional in all respects, the Chairman and all other current non-executives of Liverpool will resign from the Board and, in accordance with Liverpool's traditions, all non-executive directors other than David Moores, will be offered roles as Honorary Life Vice Presidents of the Club. Upon the Offer becoming or being declared wholly unconditional in all respects, George Gillett Jnr. and Thomas O. Hicks will be appointed as Co-Chairmen of the Board of Liverpool and Foster Gillett and Thomas O. Hicks Jnr. will be appointed as directors to the Board of Liverpool. The Board of Kop has given assurances to the Liverpool Directors that, on the Offer becoming or being declared unconditional in all respects, the existing employment rights of all management and employees of the Liverpool Group will be honoured and pensions obligations complied with. Kop does not have any current plans which would impact the current arrangements with employees. Upon the Offer becoming or being declared wholly unconditional in all respects, there will be a full strategic review before there is any substantive change in Club strategy. The Board of Liverpool has no reason to believe that Kop's intentions would prejudice its employees and is comforted that Kop does not have any current plans to alter existing arrangements with employees. 12. Compulsory acquisition and re-registration In the event that Kop receives acceptances under the Offer in respect of, and/or otherwise acquires, 90 per cent. or more by nominal value and voting rights of the Liverpool Shares to which the Offer relates, Kop intends to exercise its rights pursuant to the provisions of the Companies Act to acquire compulsorily the remaining Liverpool Shares. It is further proposed that, following the Offer becoming unconditional in all respects Kop will seek to re-register Liverpool as a private limited company. Once the Offer is declared unconditional in all respects, Liverpool will not support a secondary market in Liverpool Shares, which means that this coupled with Liverpool becoming a private company will make it extremely difficult for Liverpool Shareholders to sell their Liverpool Shares other than to Kop. Kop will have no obligation to purchase any Liverpool Shares once the Offer has been closed. It is unlikely that Liverpool Shareholders who do not accept the Offer will receive dividend payments in respect of their Liverpool Shares in the future. 13. Disclosure of interests in Liverpool Shares As at the date of this announcement, neither Kop nor, so far as the Directors of Kop are aware, any person acting in concert with it, has any interest in or right to subscribe for any relevant securities of Liverpool nor are they party to any short positions (whether conditional or absolute and whether in the money or otherwise) relating to relevant securities of Liverpool, including any short positions under derivatives, agreements to sell or any delivery obligations or rights to require another person to take delivery. Neither Kop nor the directors of Kop nor, so far as Kop is aware, any person acting in concert with Kop, has borrowed or lent any relevant securities of Liverpool. 14. General
