THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

6 March 2020

easyHotel plc

("easyHotel", "the Group" or "the Company")

Proposed Subscription of 11,578,948 Subscription Shares at 95.0 pence per share by Citrus Holdco

easyHotel plc, the owner, developer, operator and franchisor of super budget branded hotels, today announces a conditional fundraising of £11 million (gross) by way of a subscription and issue of 11,578,948 Subscription Shares (the "Subscription Shares") at a price of 95.0 pence per Subscription Share (the "Subscription Price") (the "Subscription") by Citrus Holdco.

Highlights

·          Gross proceeds of the Subscription of approximately £11 million before expenses.

·          Subscription Price represents a premium of approximately 35.7 per cent. to the closing mid-market price of 70 pence per Existing Ordinary Share on 5 March 2020 (being the latest practicable date prior to the publication of this Announcement).

·          Proceeds of the Subscription will be primarily utilised to fund the Group's owned hotel roll-out strategy.

·          Subscription conditional on, inter alia, the passing of the Resolutions which are to be proposed at a General Meeting of the Company to be held on 25 March 2020 and Admission taking place by no later than 26 March 2020.

Founded in 2004 by Sir Stelios Haji-Ioannou, easyHotel's strategy is to target the super budget segment of the hotel industry by offering great value and "clean, comfortable and safe" hotel rooms to its customers. Citrus Holdco, a company owned by a consortium comprising Cadim Fonds Inc (part of Ivanhoé Cambridge) and ICAMAP Investments S.à.r.l, through its Offer for the ordinary share capital of the Company at a price of 95.0 pence per Ordinary Share that closed on 1 October 2019, acquired approximately 68.8 per cent of the Existing Ordinary Shares. At the time of its Offer, Citrus Holdco shared the Company's strategy and acknowledged at the time of its Offer that significant investment is required to achieve this strategy and to ensure the Group can fulfil its potential as a leading European budget hotel company.

Scott Christie, Interim Chief Executive Officer, commented:

"Our recently announced investment in Spain marks the latest step in our strategy to expand our owned hotel network across centrally located, high quality sites in major European cities. The Group continues to make good progress towards securing sites in its target destinations and we look forward to announcing further developments in due course."

Harm Meijer, Non-executive Chairman, commented:

"Citrus Holdco Limited confirmed at the time of its Offer for easyHotel's shares last year that it was committed to supporting easyHotel to achieve the Board's strategic vision for the business more quickly and effectively.  The proceeds from this proposed subscription will provide the business with the capital it needs to pursue the next stage of its owned hotel roll-out strategy.  We are excited about the development pipeline and, in particular, the potential for accelerating our targeted growth of the brand in Europe"

A circular, extracts of which are set out below, containing a notice of General Meeting of the Company (the "Circular"), convened for 10.00 a.m. on 25 March 2020, will be sent to Shareholders today convening the General Meeting at which the Resolutions will be tabled.  A copy of the Circular will also be made available on the Company's website, http://ir.easyhotel.com. Capitalised terms used in this Announcement but not otherwise defined have the meaning given to those terms in the Circular, unless otherwise indicated.

Enquiries:

Notes to Editors:

www.easyhotel.com http://ir.easyhotel.com

easyHotel is the owner, developer, operator and franchisor of branded hotels. Its strategy is to target the super budget segment of the hotel industry by marketing "clean, comfortable and safe" hotel rooms to its customers. 

Operating hotels

easyHotel has an estate of 40 hotels with 3,759 rooms, comprising 27 franchised hotels (2,332 rooms) and 13 owned hotels (1,427 rooms).

Owned hotels:

United Kingdom: Old Street (London), Glasgow, Croydon, Birmingham, Manchester, Liverpool, Newcastle*, Leeds, Sheffield, Ipswich, Milton Keynes.

Spain: Barcelona

France: Nice

Franchise locations:

United Kingdom: Edinburgh, London Heathrow, Central London, Luton, Reading and Belfast.

Europe: Belgium (Brussels), Bulgaria (Sofia), Germany (Berlin, Frankfurt, Bernkastel-Kues), Hungary (Budapest), The Netherlands (Amsterdam: City, Arena & Zaandam, Amsterdam Schiphol Airport, Rotterdam, The Hague, The Hague Scheveningen Beach, Maastricht), Portugal (Lisbon), Switzerland (Basel, Zurich).

International: UAE (Dubai).

Hotel development pipeline

Owned hotels:

United Kingdom: Chester, Cardiff, Oxford*, Blackpool, Cambridge* and Bristol^#.

Europe: Ireland (Dublin), France (Paris-Charles de Gaulle Airport*), Spain (Madrid)

Franchise hotels:

United Kingdom: Derby

Europe: Spain (Malaga), Switzerland (Zurich: City Centre, Limmatplatz).

International: Israel (Tel Aviv - three locations)

* Hotels under an operating lease.

^# Subject to planning permission.

This Announcement should be read in its entirety. In particular, you should read and understand the information provided in the "Important Notices" section of this Announcement.

IMPORTANT NOTICES

This Announcement may contain and the Company may make verbal statements containing "forward-looking statements" with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition, performance, strategic initiatives, objectives and results. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "seek", "may", "could", "outlook" or other words of similar meaning. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond the control of the Company, including amongst other things, United Kingdom domestic and global economic business conditions, market-related risks such as fluctuations in interest rates and exchange rates, the policies and actions of governmental and regulatory authorities, the effect of competition, inflation, deflation, the timing effect and other uncertainties of future acquisitions or combinations within relevant industries, the effect of tax and other legislation and other regulations in the jurisdictions in which the Company and its respective affiliates operate, the effect of volatility in the equity, capital and credit markets on the Company's profitability and ability to access capital and credit, a decline in the Company's credit ratings; the effect of operational risks; and the loss of key personnel. As a result, the actual future financial condition, performance and results of the Company may differ materially from the plans, goals and expectations set forth in any forward-looking statements. Any forward-looking statements made in this Announcement by or on behalf of the Company speak only as of the date they are made. Except as required by applicable law or regulation, the Company expressly disclaims any obligation or undertaking to publish any updates or revisions to any forward-looking statements contained in this Announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

Investec is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Subscription, and Investec will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Subscription or any other matters referred to in this Announcement.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Investec or by any of its affiliates or agents as to, or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

The distribution of this Announcement in certain jurisdictions may be restricted by law. This Announcement is for information purposes only and does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States, Australia, Canada, Japan or South Africa or in any jurisdiction in which such offer or solicitation would be unlawful and should not be relied upon in connection with any decision, or as any inducement, to subscribe for or acquire any new Ordinary Shares. In particular, this Announcement does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States. No public offer of securities is being made in the United Kingdom or elsewhere.

This Announcement is not an offer of securities for sale or a solicitation of any offer to purchase securities in the United States. Subscription Shares may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended (the "US Securities Act") or an exemption therefrom. The Company has not and does not intend to register any securities under the US Securities Act and does not intend to offer any securities to the public in the United States. No money, securities or other consideration from any person inside the United States is being solicited and, if sent in response to the information contained in this Announcement, will not be accepted. The Subscription Shares have not been and will not be registered with any regulatory authority of any state within the United States.

This Announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 ("MAR"). In addition, market soundings (as defined in MAR) were taken in respect of the Subscription with the result that certain persons became aware of inside information (as defined in MAR), as permitted by MAR. This inside information is set out in this Announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of such inside information relating to the Company and its securities.

Subscription of 11,578,948 Subscription Shares at 95.0 pence per share by Citrus Holdco

1.      Introduction

easyHotel plc ("easyHotel", "the Group" or "the Company") today announces on 6 March 2020 an equity fundraising of approximately £11.0 million (gross) (approximately £10.97 million (net))  by way of a subscription and issue of 11,578,948 Subscription Shares at a price of 95.0 pence per Subscription Share.

The Subscription is conditional upon, amongst other things, Shareholder approval of the Resolutions which will be sought at the forthcoming General Meeting to be held in the Courtyard Meeting Room, Somerset House, The Strand, London WC2R 1LA at 10.00 a.m. on 25 March 2020 and Admission becoming effective.

2.      Background to and reasons for the Subscription

Founded in 2004 by Sir Stelios Haji-Ioannou, easyHotel is the owner, developer, operator and franchisor of branded hotels. Its strategy is to target the super budget segment of the hotel industry by offering great value and "clean, comfortable and safe" hotel rooms to its customers. easyHotel's 13 owned hotels currently comprise 1,427 rooms, and it has a further 27 franchised hotels with 2,332 rooms. easyHotel's committed development pipeline of owned and franchised hotels currently consists of nine owned hotels and seven franchised hotels.

On 20 February 2020 the Company announced the acquisition of a freehold site in Madrid, Spain, where it plans to develop a 230-bedroom easyHotel. The premises will be easyHotel's second owned hotel in Spain. The Company has significantly increased its focus on Europe, where the Directors believe the opportunity to develop the portfolio in key cities is significant. The Group's European development team has been pursuing a number of owned and franchised development opportunities in key primary tourist destinations with an initial focus on France and Spain.

Citrus Holdco, a company owned by a consortium comprising ICAMAP Investments S.à.r.l and Cadim Fonds Inc (part of Ivanhoé Cambridge), through its Offer for the ordinary share capital of the Company at a price of 95.0 pence per Ordinary Share that closed on 1 October 2019, acquired approximately 68.8 per cent. of the Existing Ordinary Shares. At the time of its Offer, Citrus Holdco shared the Company's strategy and acknowledged at the time of its Offer that significant investment is required to achieve this strategy and to ensure the Group can fulfil its potential as a leading European budget hotel company.

In order to continue with its strategy the Directors have identified the Company's need for additional capital to fund the growth in the number of owned and franchised hotels. Citrus Holdco has agreed to subscribe approximately £11.0 million of new equity pursuant to the Subscription at a price of 95.0 pence per Subscription Share, the same price Citrus Holdco offered Shareholders pursuant to its Offer, to support the growth strategy.

3.      Use of Proceeds

The proceeds of the Subscription will be primarily utilised to fund the Group's owned hotel roll-out strategy.

4.      Details of the Subscription

Under the terms of the Subscription, Citrus Holdco has subscribed for 11,578,948 Subscription Shares at the Subscription Price by way of a conditional, non-pre-emptive subscription. The Subscription Price of 95.0 pence per Subscription Share represents a premium of approximately 35.7 per cent. to the closing mid-market price of 70 pence on 5 March 2020, being the latest practicable date prior to publication of this Announcement. The Subscription Shares will represent approximately 7.3 per cent. of the Enlarged Issued Share Capital following Admission. The Subscription Shares will be issued credited as fully paid and will be identical to and rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all future distributions, declared, paid or made in respect of the Ordinary Shares following the date of Admission.

The Board believes that raising equity finance using the flexibility provided by a non-pre-emptive subscription is the most appropriate and optimal structure for the Company at this time.

Application will be made to the London Stock Exchange for the Subscription Shares to be admitted to trading on AIM. It is expected that admission to AIM will become effective in respect of, and that dealings on AIM will commence in, the Subscription Shares, on 26 March 2020.

The Subscription is conditional on, among other things, the Resolutions being duly passed by Shareholders of the Company at the General Meeting to be held in the Courtyard Meeting Room, Somerset House, The Strand, London WC2R 1LA at 10.00 a.m. on 25 March 2020.

Following Admission, the Company will have 157,533,494 Ordinary Shares in issue.

The Subscription Shares are not being made available to the public and are not being offered or sold in any jurisdiction where it would be unlawful to do so.

5.      Related Party Transaction

The Subscription by Citrus Holdco for 11,578,948 Subscription Shares constitutes a related party transaction under the AIM Rules for Companies by virtue of Citrus Holdco being a substantial shareholder in the Company. The Directors (excluding Cadim Fonds Inc and Messrs Meijer and Persello who, as a result their connection to Citrus Holdco and its shareholders, are for these purposes deemed as not being independent of Citrus Holdco) consider, having consulted with Investec, the Company's nominated adviser, that the terms of the transaction are fair and reasonable in so far as Shareholders are concerned.

6.      General Meeting

The Company has no on-going authority to allot Ordinary Shares. In order to be able to issue and allot the Subscription Shares, the Company will seek Shareholder approval at a General Meeting to issue such shares on a non-pre-emptive basis. The Resolutions being proposed are specifically tailored to authorise the issue of the 11,578,948 Subscription Shares proposed to be issued pursuant to the Subscription.

A General Meeting of the Company, notice of which will be set out at the end of the Circular and at which the Resolutions will be proposed, is to be held in the Courtyard Meeting Room, Somerset House, The Strand, London WC2R 1LA on 25 March 2020 at 10.00 a.m. Please note that the summary and explanation set out below is not the full text of the Resolutions and Shareholders should review the full text of the Resolutions set out in the Notice of General Meeting before returning their proxy votes.

The business to be considered at the General Meeting is set out in the Notice of General Meeting together with the explanatory notes to each resolution below.

The Company is proposing that the Shareholders pass the Resolutions in order to:

(1)           grant authority to the Directors under section 551 of the Act, to allot new Ordinary Shares up to a maximum aggregate nominal amount of £115,789.48 being the amount required for the purposes of issuing the Subscription Shares; and

(2)           empower the Directors, pursuant to section 570 of the Act, to allot the Subscription Shares on a non-pre-emptive basis.

These authorities will enable the Directors to effect the Subscription but will expire if Admission does not take place by the Long-Stop Date.

7.      Irrevocable undertakings and Recommendation

Citrus Holdco, the Company's largest shareholder which is interested in 100,483,906 Ordinary Shares, representing approximately 68.8 per cent. of the Existing Ordinary Shares, has irrevocably undertaken to vote in favour of the Resolutions in respect of its entire shareholding.

easyGroup Holdings Limited, the Company's second largest shareholder which is interested in 36,870,784 Ordinary Shares, representing approximately 25.3 per cent. of the Existing Ordinary Shares, has irrevocably undertaken to vote in favour of the Resolutions in respect of its entire shareholding.

The Directors consider the Subscription and the associated Resolutions to be in the best interests of the Company and its Shareholders as a whole and accordingly unanimously recommend that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting.

Expected timetable of principal events

Definitions

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