Update on Strategic Review and Formal Sale Process

THIS IS AN ANNOUNCEMENT FALLING UNDER RULE 2.4 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND DOES NOT CONSTITUTE AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE TAKEOVER CODE AND THERE CAN BE NO CERTAINTY THAT ANY FIRM OFFER WILL BE MADE, NOR AS TO THE TERMS ON WHICH ANY OFFER WILL BE MADE

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

PPHE Hotel Group Ltd

("PPHE" or the "Company")

Update on Strategic Review and Formal Sale Process

Following the announcement on 21 November regarding the commencement of the Strategic Review and Formal Sale Process (the "Strategic Review"), the Board of PPHE (the "Board") announces that it has received an indicative proposal from Fattal Hotel Group ("Fattal") regarding a possible cash offer for the Company at a price of £22 per share (the "Proposal").

The Proposal is subject to the satisfaction or waiver by Fattal of customary pre-conditions, including the completion of confirmatory of due diligence.

The Board, together with its Rule 3 adviser, has evaluated the Proposal and determined that the Proposal represents fair value. The Board has formed an independent offer committee ("Independent Committee") which excludes Roni Hirsch, representative Director of Euro Plaza Holdings.

The Board intends to engage with the Company's major shareholders regarding the Proposal in order to assess its deliverability. There can be no certainty that any firm offer will be made or as to the terms of any offer. A further announcement will be made as appropriate.

As previously announced by the Company, the Takeover Panel has granted a dispensation from the requirements of Rule 2.6(a) of the Code in relation to the formal sale process being conducted by the Company such that any interested party participating in the formal sale process will not be subject to the 28 day deadline referred to in Rule 2.6(a) of the Code for so long as it is participating in the formal sale process. Accordingly, for so long as Fattal continues to participate in the formal sale process, Fattal will not be subject to the 28 day deadline referred to in Rule 2.6(a) of the Code.

PPHE shareholders are advised to take no action at this time.

For the purposes of Note 3 on Rule 2.5 of the Code, this announcement has been made with the consent of Fattal.

Fattal has reserved the right:

• to introduce other forms of consideration (such as securities) and/or to vary the composition of the consideration; and
• make the offer on less favourable terms than £22 in cash per PPHE share:
• with the recommendation or consent of the Board;
• if PPHE announces, declares or pays any dividend or any other distribution to shareholders, in which case Fattal will have the right to make an equivalent reduction to the proposed price;
• if a third party announces a firm intention to make an offer for PPHE on less favourable terms than the Proposal; or
• following the announcement by PPHE of a Rule 9 waiver transaction pursuant to the Code.

Notice related to financial adviser

Rule 26.1 disclosure

Additional Information