Offer by Lifeskills Education Limited (1129Z)

TIDMSTA

RNS Number : 1129Z

Stagecoach Theatre Arts PLC

12 March 2012

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY RESTRICTED JURISDICTION (INCLUDING THE UNITED STATES, AUSTRALIA, CANADA AND JAPAN) OR ANY OTHER JURISDICTION WHERETO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

12 MARCH 2012

RECOMMENDED CASH OFFER

LIFESKILLS EDUCATION LIMITED

a direct wholly-owned subsidiary of Lifeskills Education Holdings Limited

for

STAGECOACH THEATRE ARTS PUBLIC LIMITED COMPANY

(other than those shares already contracted to be acquired by Lifeskills Education Limited under the terms of the Acquisition Agreement)

Summary

-- Stagecoach and Lifeskills Education are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Lifeskills Education to acquire the entire issued and to be issued ordinary share capital of Stagecoach, other than those shares already contracted to be acquired by Lifeskills Education under the terms of the Acquisition Agreement.

-- The Offer is being made at a price of 65 pence in cash for each Offer Share and represents a premium of approximately 66.67 per cent. to the Closing Price of 39.00 pence per Offer Share on 8 March 2012, being the latest practicable business day before the commencement of the Offer Period and a premium of approximately 64.18 per cent. to the average Closing Price of 39.59 pence per Offer Share over the last six months to 8 March 2012, being the latest practicable business day prior to the commencement of the Offer Period.

-- The Offer values the entire issued and to be issued share capital of Stagecoach at approximately GBP6.5 million on a fully diluted basis.

-- Lifeskills Education is a direct subsidiary of the Investor, the sole director and shareholder of which is Shirin Gandhi.

-- Lifeskills Education has entered into the Acquisition Agreement with the Management Team who will exchange Management Shares that they (and certain of their Connected Persons) hold, representing in aggregate approximately 17.48 per cent. of the fully diluted share capital of Stagecoach, for 602 M Shares and 1,747 Founder Shares in the share capital of Lifeskills Education, representing in aggregate approximately 23.49 per cent. of the issued share capital of Lifeskills Education and GBP1,134,057 Loan Notes as at the Unconditional Date. The Manager Subscribers will subscribe in aggregate for an additional 1,398 M Shares in Lifeskills Education at a subscription price of GBP1 per M Share in Lifeskills Education, representing approximately 13.98 per cent. of the issued share capital of Lifeskills Education as at the Unconditional Date. In aggregate the Management Team will own approximately 37.47 per cent. of the issued share capital of Lifeskills Education and will hold Loan Notes in the sum of GBP1,134,057.

-- The Acquisition Agreement is conditional upon the Offer becoming or being declared unconditional in all respects. This condition may be waived by Lifeskills Education if, in order to declare the Offer unconditional as to acceptances, the purchase of Stagecoach Shares pursuant to the Acquisition Agreement is required to be counted towards fulfilling any condition of the Offer. As at the Unconditional Date, the Management Team will hold in aggregate approximately 37.47 per cent. of the issued share capital of Lifeskills Education and the remaining Lifeskills Education Shares will be held 57.53 per cent. by the Investor and 5.00 per cent. by Henry Meikle, the proposed new chairman of Lifeskills Education. The Management Team will hold Loan Notes in the sum of GBP1,134,057 and the Investor and Henry Meikle will hold Loan Notes in the sum of GBP3,255,413 and GBP172,458 respectively. The I Shares, the Founder Shares and the M Shares will, save as detailed in paragraph 4 and Appendix IV of this announcement, rank pari passu.

-- The Offer is conditional, amongst other things, upon the Independent Shareholders passing the Ordinary Resolution to approve the Management Arrangements at a general meeting of Stagecoach.

-- Stephanie Manuel and David Sprigg (the Company's founders and Joint Managing Directors) and certain of their Connected Persons together holding, in aggregate, approximately 59.00 per cent. of the Company's issued shares have agreed conditionally to dispose of their entire shareholding in the Company in connection with the proposed acquisition of the Company by Lifeskills Education (either by irrevocable undertaking or pursuant to the Acquisition Agreement).

-- The Independent Directors, who have been so advised by Smith & Williamson, consider the terms of the Offer to be fair and reasonable. Accordingly, the Independent Directors, namely Graham Cole and David Sprigg, recommend that Stagecoach Shareholders accept the Offer. The Independent Directors have irrevocably undertaken to accept the Offer in respect of 2,863,819 Stagecoach Shares which they own in aggregate, representing approximately 28.64 per cent. of the Stagecoach Shares and approximately 42.73 per cent. of the Eligible Voting Shares at the date of this announcement. In providing its advice, Smith & Williamson has taken into account the commercial assessments of the Independent Directors.

-- Following the Offer becoming or being declared unconditional in all respects and subject to any applicable requirements of the AIM Rules, Lifeskills Education intends to procure that Stagecoach applies to the London Stock Exchange for the cancellation of trading in Stagecoach Shares on AIM.

-- Lifeskills Education will dispatch the Offer Document to the Independent Shareholders in Stagecoach as soon as practicable and, in any event, within twenty-eight days of this announcement.

Commenting on the Offer, Shirin Gandhi of Lifeskills Education, said:

"I have been investing in UK companies for many years and recognise Stagecoach's established reputation as an operator of part time theatre arts schools for children. I am looking forward to working with the Management Team to add value to the operations of Stagecoach and believe that if management, without the confines of the public markets, prioritise their opportunities then the prospects for the business will be enhanced. I am further looking forward to assisting management to help Stagecoach develop and deliver a long term strategy for the business. We are pleased to have received the Independent Directors' recommendation for our offer."

Commenting on the Offer, Graham Cole, Chairman of Stagecoach, said:

"The Offer represents an opportunity for Stagecoach Shareholders to achieve an immediate cash exit for their shareholding at a significant premium to the Company's recent share price and has in effect been conditionally accepted by the Company's co-founders and controlling shareholders. Lifeskills Education's plans for the business have the potential to enhance the Company's future growth to the benefit of the employees and business."

This summary should be read in conjunction with, and is subject to, the full text of this announcement and the Appendices. The Offer will be made subject to the conditions which are set out in Appendix I to this announcement and the full conditions and further terms to be set out in the Offer Document and (in respect of Offer Shares held in certificated form) in the Form of Acceptance.

 
 Lifeskills Education                   Telephone: 0207 183 7592 
  Shirin Gandhi 
  Imran Ahmad (Project Manager) 
 Stagecoach                             Telephone: 01932 254 333 
  Graham Cole (Chairman) 
 CV Capital                             Telephone: 020 7509 9000 
  (Financial adviser to Lifeskills 
  Education) 
  Debbie Clarke 
 Smith & Williamson Corporate Finance   Telephone: 020 7131 4000 
  Limited 
  (Financial adviser to Stagecoach) 
  David Jones 
  Siobhan Sergeant 
 Peckwater PR                           Telephone: 07879 458 364 
  (Financial PR to Stagecoach) 
  Tarquin Edwards

Further Information

Appendix I sets out the conditions and further terms of the Offer.

Appendix II sets out the sources and bases of calculation.

Appendix III sets out the irrevocable undertakings and letters of intent.

Appendix IV sets out the Management Arrangements.

Appendix V contains definitions of certain terms used in this summary and the following announcement.

In accordance with Rule 2.10 of the Code, Stagecoach confirms that it has 10,000,000 ordinary shares of 5 pence each in issue and admitted to trading on the London Stock Exchange AIM market (ISIN: GD003187744).

CV Capital, which is authorised and regulated in the UK by the FSA for investment business activities, is acting exclusively as financial adviser to Lifeskills Education and no one else in connection with the Offer and will not be responsible to anyone other than Lifeskills Education for providing the protections afforded to clients of CV Capital or for providing advice in relation to the Offer or any other matters referred to in this announcement.

Smith & Williamson Corporate Finance Limited, which is authorised and regulated in the UK by the FSA, is acting exclusively as financial adviser to Stagecoach and no one else in connection with the Offer and will not be responsible to anyone other than Stagecoach for providing the protections afforded to clients of Smith & Williamson Corporate Finance Limited or for providing advice in relation to the Offer or any other matters referred to in this announcement.

This announcement is not intended to and does not constitute, or form any part of, an offer to sell or an invitation to subscribe for or purchase any securities or the solicitation of an offer to purchase or subscribe for any securities in any jurisdiction pursuant to the Offer or otherwise. The Offer will be made solely through the Offer Document, which will contain the full terms and conditions of the Offer (including details on how to accept the Offer). Any response in relation to the Offer should be made only on the basis of the information contained in the Offer Document and the Form of Acceptance or any other document by which the Offer is made. Stagecoach Shareholders are advised to read carefully the formal documentation in relation to the Offer once it has been dispatched. This announcement does not constitute a prospectus or prospectus equivalent document.

All references to time in this announcement are to London time.

Overseas Shareholders

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 would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the UK. Unless otherwise determined by Lifeskills Education or required by the Code and permitted by applicable law and regulation, the Offer will not be made, directly or indirectly, in or into, or by use of the mails, or by any means or instrumentality (including, without limitation, by means of telephone, facsimile, internet or other forms of electronic communication) of interstate or foreign commerce of, or any facilities of a securities exchange of, any Restricted Jurisdiction, and the Offer will not be capable of acceptance by any such use, means, instrumentality or facility or from within any Restricted Jurisdiction. Accordingly, unless otherwise determined by Lifeskills Education or required by the Code and permitted by applicable law and regulation, copies of this announcement and any other related document are not being, and must not be, directly or indirectly, mailed or otherwise distributed or sent in or into any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not distribute or send them in, into or from such jurisdictions as doing so may make invalid any purported acceptance of the Offer by persons in any such jurisdiction.

The availability of the Offer to persons not resident in the UK may be affected by the laws of the relevant jurisdiction. Persons who are subject to the laws of any jurisdiction other than the UK should obtain professional advice and observe any applicable requirements.

Forward-looking statements

This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and businesses of Lifeskills Education and Stagecoach and certain plans and objectives of the boards of directors of Lifeskills Education and Stagecoach. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words of similar meaning. These statements are based on assumptions and assessments made by the boards of directors of Lifeskills Education and Stagecoach in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe appropriate. By their nature, forward-looking statements involve risk and uncertainty, and the factors described in the context of such forward-looking statements in this announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements.

Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this announcement. Neither Lifeskills Education or Stagecoach nor their respective boards of directors assume any obligation to update or correct the information contained in this announcement, whether as a result of new information, future events or otherwise, except to the extent legally required.

The statements contained in this announcement are made as at the date of this announcement, unless some other time is specified in relation to them, and service of this announcement shall not give rise to any implication that there has been no change in the facts set out in this announcement since such date. Nothing contained in this announcement shall be deemed to be a forecast, projection or estimate of the future financial performance of Lifeskills Education or Stagecoach or any member of the Stagecoach Group or Lifeskills Education Group except where expressly stated.

Dealing disclosure requirements

Under Rule 8.3(a) of the Code, any person who is interested in 1.00 per cent. or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified.

An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the tenth business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the tenth business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1.00 per cent. or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.

FOR IMMEDIATE RELEASE 12 March 2012

RECOMMENDED CASH OFFER

LIFESKILLS EDUCATION LIMITED

a direct wholly-owned subsidiary of Lifeskills Education Holdings Limited

for

STAGECOACH THEATRE ARTS PUBLIC LIMITED COMPANY

(other than those shares already contracted to be acquired by Lifeskills Education Limited under the terms of the Acquisition Agreement)

   1.         Introduction

The Company and Lifeskills Education are pleased to announce that agreement has been reached on the terms of a recommended cash offer by Lifeskills Education for the entire issued and to be issued share capital of Stagecoach, excludingthe Management Shares which are contracted to be acquired by Lifeskills Education under the terms of the Acquisition Agreement. The Offer values the entire issued and to be issued share capital of Stagecoach (including the Management Shares) at approximately GBP6.5 million.

Lifeskills Education is a recently incorporated company established for the purpose of making the Offer. The board of directors of Lifeskills Education currently comprises Shirin Gandhi as the sole director. In view of the Management Arrangements proposed between the Management Team and Lifeskills Education (details of which are set out in paragraph 4 and Appendix IV of this announcement) the Management Team have not participated in the consideration of the Offer or the formulation of the advice given to the Independent Shareholders by the Independent Directors.

    2.        The Offer

The Offer, which will be subject to the terms and conditions which are set out below and in Appendix I to this announcement and to the full terms and conditions to be set out in the Offer Document and, in respect of Offer Shares held in certificated form, in the Form of Acceptance, will be made by Lifeskills Education on the following basis:

   for each Offer Share                          65 pence in cash

The Offer values Stagecoach's entire issued and to be issued share capital at approximately GBP6.5 million on a fully diluted basis and represents:

-- a premium of approximately 66.67 per cent. to the Closing Price of 39.00 pence per Offer Share on 8 March 2012, being the latest practicable business day prior to the commencement of the Offer Period; and

-- a premium of approximately 64.18 per cent. to the average Closing Price of 39.59 pence per Offer Share over the last six months to 8 March 2012, being the latest practicable business day prior to the commencement of the Offer Period.

The Offer Shares will be transferred to Lifeskills Education fully paid with full title guarantee and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and other third party rights or interests and together with all rights attaching to such Offer Shares including, without limitation, the right to receive all dividends and other distributions (if any) announced, declared, made or paid after the Announcement Date.

The Offer will extend to all Offer Shares unconditionally allotted or issued and fully paid on the date of the Offer and any Offer Shares which are unconditionally allotted or issued and fully paid before the date on which the Offer closes to acceptances or such earlier date as Lifeskills Education may announce, subject to the Code and in accordance with the conditions and further terms of the Offer set out in Appendix I to this announcement.

The Offer is conditional on, amongst other things:

(i) valid acceptances being received in respect of not less than 90.00 per cent. of the Offer Shares (or such lower percentage as Lifeskills Education may decide), provided that this condition will not be satisfied unless Lifeskills Education shall have acquired, or agreed to acquire, whether pursuant to the Offer or otherwise, Stagecoach Shares carrying in aggregate more than 50.00 per cent. of the voting rights then normally exercisable at general meetings of Stagecoach; and

(ii) the Independent Shareholders passing the Ordinary Resolution to approve the Management Arrangements at the General Meeting.

Full details of the conditions to which the Offer is subject are set out at Appendix 1 to this announcement.

Full acceptance of the Offer will enable Stagecoach Shareholders to realise their entire investment for cash (without incurring dealing charges) at a price which represents a premium of approximately 66.67 per cent. to the Closing Price of 39.00 pence per Offer Share on 8 March 2012, being the latest practicable business day prior to the date of this announcement.

   3.         Background to and reasons for the Offer

Shirin Gandhi has a track record of investing in UK companies across a wide range of sectors and believes that Stagecoach represents an attractive investment opportunity primarily due to Stagecoach's established reputation as an operator of part time theatre arts schools for children aged between 4 and 18 having developed a global network of theatre arts schools. In addition, the Investor believes that it has the ability to add value to the operations of Stagecoach and believes that if Stagecoach prioritises its growth potential then the prospects for Stagecoach will be enhanced without the need for Stagecoach Shares to be traded on AIM.

Lifeskills Education considers that in order to achieve its full potential, Stagecoach will need to consider further investment in order to facilitate growth particularly overseas. Furthermore, Lifeskills Education believes that the ability of Stagecoach to grow in the future will be enhanced under the Investor's and the Management Team's ownership partly because of their intention to execute a longer term strategy. The cost and resource savings arising if Stagecoach Shares cease to be traded on AIM should contribute significantly to the funds and management time required for the achievement of Stagecoach's growth potential.

   4.         Management Team Arrangements

The continued commitment of the Management Team to the development of Stagecoach has been key to Lifeskills Education's decision to proceed with the Offer. Terms have therefore been agreed for certain members of the Management Team to exchange their Management Shares that they (and certain of their Connected Persons) hold for Lifeskills Education Shares and Loan Notes. Under these proposals the Management Team will continue to provide the day-to-day management of the Stagecoach Group.

Lifeskills Education has entered into the Acquisition Agreement with the Management Team who will exchange Management Shares that they (and certain of their Connected Persons) hold, representing in aggregate approximately 17.48 per cent. of the fully diluted share capital of Stagecoach, for 602 M Shares and 1,747 Founder Shares in the share capital of Lifeskills Education, representing in aggregate approximately 23.49 per cent. of the issued share capital of Lifeskills Education and GBP1,134,057 Loan Notes as at the Unconditional Date. The Manager Subscribers will subscribe in aggregate for an additional 1,398 M Shares in Lifeskills Education at a subscription price of GBP1 per M Share in Lifeskills Education, representing approximately 13.98 per cent. of the issued share capital of Lifeskills Education as at the Unconditional Date. In aggregate the Management Team will own approximately 37.47 per cent. of the issued share capital of Lifeskills Education and will hold Loan Notes in the sum of GBP1,134,057.

The Acquisition Agreement is conditional upon the Offer becoming or being declared unconditional in all respects. This condition may be waived by Lifeskills Education if, in order to declare the Offer unconditional as to acceptances, the purchase of Stagecoach Shares pursuant to the Acquisition Agreement is required to be counted towards fulfilling any condition of the Offer.

As at the Unconditional Date, the Management Team will hold in aggregate approximately 37.47 per cent. of the issued share capital of Lifeskills Education and the remaining Lifeskills Education Shares will be held 57.53 per cent. by the Investor and 5.00 per cent. by Henry Meikle, the proposed new chairman of Lifeskills Education. The Management Team will hold Loan Notes in the sum of GBP1,134,057 and the Investor and Henry Meikle will hold Loan Notes in the sum of GBP3,255,413 and GBP172,458 respectively.

The members of the Management Team have agreed pursuant to the Shareholders' Agreement to enter into the Service Agreements conditional on the Offer becoming or being declared unconditional in all respects. Manzoor Ishani will enter into a new service agreement with Stagecoach to bring him in line with his co-directors.

Manzoor Ishani has agreed to an approximate 20 per cent. reduction in salary so that his new salary will be GBP81,997.95 gross per annum. The new agreement provides him with (i) holiday entitlement of 27 days exclusive of the usual public and bank holidays and the period between Christmas Day and New Year's Day; (ii) the ability to participate in a discretionary bonus scheme, the terms of which shall be determined by the Stagecoach Board in its absolute discretion and will be based upon achievement of corporate and personal targets; (iii) an increase in sick pay entitlement from 2 weeks to 60 days in any 12 month period; and (iv) the introduction of full 12 month restrictive covenants preventing Manzoor from competing with the company or soliciting clients or senior executives following termination.

Richard Dawson will enter into a deed to vary his service agreement with Stagecoach to amend his job title to Joint Managing Director to reduce his salary to GBP99,500 gross per annum, to provide holiday entitlement of 25 days exclusive of the usual public and bank holidays and the period between Christmas Day and New Years Day, to delete the provision relating to automatic retirement at 65 years and to amend the bonus provisions so that he may participate in a discretionary bonus scheme which will be based upon achievement of corporate and personal targets.

Stephanie Manuel will enter into a deed to vary her service agreement with Stagecoach to confirm her salary to be GBP115,065.58 gross per annum; to provide holiday entitlement of 28 days exclusive of the usual public and bank holidays and the period between Christmas Day and New Years Day; delete the provision relating to automatic retirement at 65 years, and to amend the bonus provisions so that she may participate in a discretionary bonus scheme which will be based upon achievement of corporate and personal targets.

No new incentivisation plans are currently proposed for employees of Stagecoach, save as set out in this paragraph 4 and as will be set out in the Offer Document and save that it is agreed that Manzoor Ishani, Stephanie Manuel and Richard Dawson will participate in a discretionary bonus scheme which will be based upon achievement of corporate and personal targets. The details of this proposed bonus scheme have not been finalised.

As at the date of this announcement, the Board of Lifeskills Education consists solely of Shirin Gandhi. Immediately following Completion, Stephanie Manuel, Richard Dawson, Manzoor Ishani and Henry Meikle will be appointed to the Board of Lifeskills Education.

Further information on the terms of the Management Arrangements are set out in Appendix IV.

   5.             Background to and reasons for the recommendation of the Independent Directors

In recent years the Company's revenues and profits have been flat to declining against the backdrop of difficult economic conditions in the Company's core market, that being the UK, and relatively insignificant growth in overseas markets. In addition, the Company's share price performance has been disappointing, with only very limited liquidity in the Stagecoach Shares. The poor liquidity and low Stagecoach Share price have negatively affected the ability of Stagecoach Shareholders to realise their investment in the Company.

The Offer represents an opportunity for Stagecoach Shareholders to achieve an immediate cash exit for their shareholding at a significant premium to the Company's recent share price and at a higher level than the mid-market closing price since October 2008.

Stephanie Manuel and David Sprigg (the Company's founders and Joint Managing Directors) and certain of their Connected Persons together holding, in aggregate, approximately 59.00 per cent. of the Company's issued shares have agreed conditionally to dispose of their entire shareholding in the Company in connection with the proposed acquisition of the Company by Lifeskills Education (either by way of the irrevocable undertakings or pursuant to the Acquisition Agreement).

On the basis of these and such other factors as the Independent Directors considered relevant, we, who have been so advised by Smith & Williamson, have concluded that the terms of the Offer are fair and reasonable and recommend acceptance of the Offer.

6. Irrevocable Undertakings and letters of intent to accept the Offer and vote in favour of the Ordinary Resolution

The following Independent Shareholders have entered into irrevocable undertakings to accept the Offer (or procure acceptance) in respect of the following Offer Shares and to vote (or procure the voting) in favour of the Ordinary Resolution in respect of the following Eligible Voting Shares:

 
                         Number of   Percentage of 
                        Stagecoach    issued share 
 Name of Shareholder        Shares         capital 
 Graham Cole                 5,000           0.05% 
 David Sprigg*           2,858,819          28.59%

* Includes 782,216 Offer Shares held by David Sprigg's self invested personal pension (the nominee of which is Smith & Williamson Nominees Limited) which David Sprigg has irrevocably agreed to procure will accept the Offer and vote in favour of the Ordinary Resolution.

The following Stagecoach Shareholder has entered into an irrevocable undertaking to accept the Offer (or procure acceptance) in respect of the following Offer Shares:

 
                         Number of   Percentage of 
                        Stagecoach    issued share 
 Name of Shareholder        Shares         capital 
 Stephanie Manuel*       1,523,850          15.24%

* Includes 316,442 Offer Shares held by Stephanie Manuel's self invested personal pension and 40,000 Offer Shares held on Stephanie Manuel's behalf by Smith & Williamson Nominees Limited which Stephanie has irrevocably agreed to procure will accept the Offer.

Lifeskills Education has also received non-binding letters of intent from the following institutional shareholders of Stagecoach to accept or procure acceptance of the Offer in respect of the following Offer Shares and to vote or procure the vote in favour of the Ordinary Resolution in respect of the following Eligible Voting Shares which they are able to exercise control over:

 
                                        Number of   Percentage of 
                                       Stagecoach    issued share 
 Name of Shareholder                       Shares         capital 
 Hazell Carr Edwards FURB                 465,000          4.65%* 
 Heritage Capital Management Limited      300,000          3.00%*

* Shareholding as at 8 March 2012, being the latest practicable business day prior to the date of this announcement.

Accordingly, Lifeskills Education has received, in aggregate, letters of intent or irrevocable undertakings in respect of a total of:

(a) 5,152,669 Offer Shares, to accept the Offer representing approximately 51.53 per cent. of the Stagecoach Shares; and

(b) 3,628,819 Eligible Voting Shares to vote in favour of the Ordinary Resolution, representing approximately 54.14 per cent. of the Eligible Voting Shares.

The undertakings by the Independent Directors and the Stagecoach Shareholders require the Independent Directors and the Stagecoach Shareholders to accept the Offer in respect of the Stagecoach Shares which they legally own within eighteen days of posting of the Offer Document (and in respect of the Independent Directors only to vote in favour of the Ordinary Resolution to be proposed at the General Meeting). The undertakings given by the Independent Directors and the Stagecoach Shareholders cease to be binding if the Offer lapses or is withdrawn.

Copies of the irrevocable undertakings will be on display on Stagecoach's website www.stagecoach.co.uk/investor-relations/ from 12 noon on 13 March 2012 until the end of the Offer.

   7.         Information on Lifeskills Education, the Investor and Shirin Gandhi

Lifeskills Education is a newly established limited liability company incorporated in England and Wales for the purpose of making the Offer. Lifeskills Education is controlled by Shirin Gandhi, who is the sole director of Lifeskills Education and the Investor. The sole shareholder of Lifeskills Education is the Investor and the sole shareholder of the Investor is Shirin Gandhi. Neither Lifeskills Education nor the Investor has produced any financial statements since their respective incorporations.

Shirin is a qualified accountant and experienced investment principal having worked in the City of London for over 20 years. He spent the majority of his career as a corporate finance advisor focusing on advising SMEs in a broad range of M&A activities and the raising of venture and development capital, leveraged finance, deal structuring and execution. Also, as a former London Stock Exchange Qualified Executive, he has advised numerous businesses on their flotations on AIM.

Since 2006 Shirin has focused on principal investment activities, building a portfolio of investment assets across a range of sectors for many of which he continues to serve as a director on their respective boards as shown below.

 
 Company Name                                         Company Number 
 Bike Kit Ltd                                         03611743 
 Canada Square Health & Fitness Limited               04968342 
 Canada Square Health And Fitness Holdings Limited    05538574 
 Encore Capital Limited                               07342958 
 Encore Capital X1 Limited                            07734575 
 Encore Capital XII Limited                           07770789 
 Encore Capital XIV Limited                           07906886 
 Encore Private Capital Limited                       07342918 
 Encore Private Equity Limited                        07342916 
 Gordons144 Limited                                   06661943 
 KPRG Business Services Limited                       05800399 
 Mablaw 555 Limited                                   07873243 
 Pro Bike Kit Holdings Limited                        07738634 
 Purepromoter Holdings Limited                        06661954 
 Purepromoter Ltd                                     04266410 
 Radco Limited                                        05999614 
 S S P Hats Limited                                   04483401 
 SSP Hats Holdings Limited                            07770904 
 The Radiator Company Ltd                             03596023

Shirin Gandhi is also a director of Lifeskills Education and the Investor, as well as a member of EI Capital LLP.

Lifeskills Education and the Investor have not traded since their respective incorporations and the only obligations that they have entered into are in connection with implementing the Offer. As at the date of this announcement Lifeskills Education has no assets, earnings or liabilities. As contemplated in paragraph 11 of this announcement, the cash consideration payable under the Offer by Lifeskills Education will be funded by way of an equity subscription into Lifeskills Education by the Investor and Henry Meikle, as well as the Loan Notes and the Facilities.

Assuming full acceptance of the Offer (and not taking into account Management Arrangements), the assets, and liabilities of a consolidated Lifeskills Education Group and Stagecoach Group would therefore be comprised of the cash within Lifeskills Education and the drawn down portion of the Facilities, (to the extent not utilised to pay the Offer Price and the transaction fees pursuant to the Offer), the Stagecoach Shares held by Lifeskills Education and assets, earnings and liabilities of Stagecoach at the Unconditional Date, save that the extent and amount of any fair value adjustments required post acquisition is not yet known.

The earnings of the consolidated Lifeskills Education Group and Stagecoach Group, assuming full acceptance of the Offer, would comprise the earnings of Stagecoach.

   8.         Information on Stagecoach

Stagecoach is a public limited company incorporated in England and Wales with company number 2924719 and whose registered office is at The Courthouse, Elm Grove, Walton-on-Thames, Surrey KT12 1LZ. Stagecoach operates a franchise network for part-time performing arts schools for young people aged between 4 and 19 with over 38,000 students worldwide.

The Company's schools aim to teach children skills for life such as confidence and communication through the performing arts. The schools are mainly run by franchisees and are based in the UK, USA, Australia, Canada, Germany, Gibraltar, Greece, Ireland, Malta, South Africa and Spain. As at 30 November 2011, there were 684 franchise schools operated by 308 franchisees.

Trading highlights from the Company's audited financial statements for the years ended 31 May 2011 and 2010 were as follows:

 
                                                      2011       2010 
                                                   GBP'000    GBP'000 
                                                 (audited)  (audited) 
    Network fees                                    29,304     29,242 
    Revenue                                          5,987      6,219 
    Gross profit                                     2,895      3,154 
    Profit before income tax                           650        727 
    Profit for the year attributable to equity 
     holders of the parent                             482        517

Trading highlights from the Company's unaudited interim financial statements for the 6 months ended 30 November 2011 and 2010 were as follows:

 
                                                          2011         2010 
                                                      6 months     6 months 
                                                       GBP'000      GBP'000 
                                                   (unaudited)  (unaudited) 
    Network fees                                        12,909       13,201 
    Revenue                                              2,819        2,923 
    Gross profit                                           990        1,162 
    (Loss)/profit before income tax                       (66)           72 
    (Loss)/profit for the period attributable to 
     equity holders of the parent                         (44)           58

Network fees, which reflect total school fees earned over the period by Stagecoach's franchisees, decreased slightly compared to the previous period, as did Stagecoach Group revenue, to GBP12.9 million (2010: GBP13.2 million) reflecting the reduction in student numbers over the period. Group revenue decreased slightly to GBP2.8 million (2010: GBP2.9 million) over that period.

The reduction in profit resulted from the fall in revenue, combined with an increase in advertising and marketing spend for future recruitment of new students across the franchise network.

The total number of students attending Stagecoach's schools during the Autumn Term 2011 decreased by 2.40 per cent. to 38,291 students, compared to the Autumn Term 2010 of 39,221 students. However with the sustained investment in advertising and marketing for students, the Company experienced a small increase of 216 students (0.6 per cent.) from the Summer Term 2011 compared to the Autumn Term 2011.

Trading has generally remained level during this difficult economic period, although the Company has felt the effects of recession on schools and student numbers in the UK. However, the Company considers that the outlook for its operations in Germany and North America looks encouraging.

    9.        Management, employees and locations

Lifeskills Education attaches great importance to the skills and experience of the management and employees of Stagecoach and intends that they should play a key role in the development of Stagecoach. Lifeskills Education has given assurances to the Independent Directors that, save as set out in this announcement, on the Offer becoming or being declared unconditional in all respects, the existing employment rights, including any pension rights, of all the Stagecoach Group employees and management will be safeguarded. Lifeskills Education has no current intention to change the location of the Stagecoach Group's place of business or to redeploy any of the Stagecoach Group's fixed assets or, save as set out in paragraph 4 of this announcement, change the conditions of employment. Lifeskills Education attaches great importance to the skills and experience of the management and employees of Stagecoach and intends that they should play a key role in the development of Stagecoach. Lifeskills Education has given assurances to the Independent Directors that, save as set out in this letter, on the Offer becoming or being declared unconditional in all respects, the existing employment rights, including any pension rights, of all the Stagecoach Group employees and management will be safeguarded. Lifeskills Education has no current intention to change the location of the Stagecoach Group's place of business or to redeploy any of the Stagecoach Group's fixed assets or, save as set out in paragraphs 4 and 9 of this announcement and Appendix II of this announcement, change the conditions of employment.

Immediately following Completion, Shirin Gandhi and Henry Meikle will be appointed to the Board of Stagecoach and Graham Cole and David Sprigg will resign as directors of Stagecoach.

Conditional upon the Offer becoming or being declared unconditional in all respects, David Sprigg is resigning as a director of Stagecoach and is entering into a consultancy agreement with Lifeskills Education, which is expected to commence on the Unconditional Date and expire on the date which is 12 months from the Unconditional Date, under which he will promote the interests of Lifeskills Education and provide such services as are reasonably required by Lifeskills Education; he will provide such services on a full-time basis for the first 3 months and thereafter up to 5 days per month; he will not be paid a fee for the first 3 months of the agreement, but will thereafter be paid a fixed fee of GBP500 per month (plus VAT if applicable) and he will be subject to restrictions preventing him from soliciting restricted clients, holding a material interest in a competitive business or soliciting any senior executive either during the appointment or for a period of 12 months following termination. David has entered into a compromise agreement with Stagecoach, conditional upon the Offer becoming or being declared unconditional in all respects pursuant to which he will receive a payment of GBP1 in return for waiving all and any claims he has or may have against Stagecoach.

Graham Cole has entered into a compromise agreement conditional on the Offer becoming or being declared unconditional in all respects, pursuant to which he will be paid GBP20,000 as compensation for his notice period and to waive any claims that he may have against Stagecoach.

   10.      Independent Shareholder approval of the arrangements for the Management Team

Under Rule 16 of the Code, except with the consent of the Panel, an offeror or persons acting in concert with it may not make any arrangements with shareholders and may not deal or enter into arrangements to deal in shares of the offeree company, or enter into arrangements which involve acceptance of an offer, either during an offer period or when one is reasonably in contemplation, if there are favourable conditions attached which are not being extended to all shareholders.

In accordance with Rule 16.2 of the Code, as all members of the Management Team are shareholders in Stagecoach, and as a result of the Management Arrangements, they will become shareholders and loan note holders in Lifeskills Education on a basis that is not being made available to the Independent Shareholders, such Management Arrangements must be approved at the General Meeting before they are able to take effect. The Management Arrangements are therefore subject to the Ordinary Resolution being approved on a poll by a majority of the Independent Shareholders at the General Meeting, as required by Rule 16.2 of the Code. Accordingly the Notice of the General Meeting convening the General Meeting for 10.00 a.m. on 29 March 2012 at which the Ordinary Resolution to approve the Management Arrangements, pursuant to the Code will be proposed will be enclosed with the Offer Document. In accordance with the requirements of the Code, only the Independent Shareholders will be permitted to vote on the Ordinary Resolution, which will be taken on a poll. The Offer will be conditional, inter alia, upon the passing of the Ordinary Resolution.

Smith & Williamson considers that the terms of the incentivisation arrangements with the Management Team are fair and reasonable in so far as the Independent Shareholders are concerned and in their best interests.

   11.          Financing and cash confirmation

The cash consideration of GBP5,363,590.70 payable by Lifeskills Education under the Offer for the Offer Shares will be funded through equity subscription by the Investor and Henry Meikle in Lifeskills Education, debt financing by way of the Loan Notes issued to the Investor and Henry Meikle and the Facilities provided by the Bank. The Investor's funding is provided from Shirin Gandhi.

Lifeskills Education will have GBP3,334,022 (comprising GBP3,434,124 invested by the Investor and Henry Meikle less the Bank Fees) available to it in cash invested by the Investor and Henry Meikle on the Offer becoming or being declared unconditional in all respects. The Loan Notes carry interest at a rate of 8.00 per cent. per annum, payable annually in arrears, save that the Investor has the right to elect to have all the interest payable rolled up until repayment of the capital under such notes. The Loan Notes are repayable on the earlier of a sale of the shares of Lifeskills Education (resulting in a third party obtaining a controlling interest) or the sale of all or substantially all the business of Lifeskills Education, a listing of Lifeskills Education or the seventh anniversary of Completion. Lifeskills Education has entered into the Facilities with the Bank to fund GBP2,429,466 of the Offer Price and the transaction costs not covered by Lifeskills Education's existing cash resources. The Facilities comprise a secured term loan facility of GBP1,500,000 and a secured bridging loan

facility of GBP929,466. It is a condition that the Facilities can only be drawn down if Lifeskills Education has acquired, or agreed to acquire, not less than 75.00 per cent. of the voting rights of the Stagecoach Shares. The Term Facility provides that interest accrues at a rate of 4.50 per cent. over LIBOR and is repayable in 16 equal instalments of GBP93,750. The first repayment instalment shall be paid on 31 August 2012, with subsequent repayment instalments being paid quarterly thereafter until the loan has been repaid in full. The Bridging Facility provides that interest accrues at a rate of 4.50 per cent. per annum above the Bank's base rate, payable quarterly on the penultimate business day of March, June, September and December and on the final repayment date of the loan. All outstanding amounts under the Bridging Facility are repayable on the date falling five business days after the passing of a special shareholder resolution to re-register Stagecoach from a public limited company to a private limited company in accordance with Section 97 of the Companies Act.

In accordance with Rule 24.8 of the Code, CV Capital, financial advisers to Lifeskills Education, has confirmed that it is satisfied that sufficient resources are available to Lifeskills Education to satisfy the full cash consideration payable to Stagecoach Shareholders under the terms of the Offer.

   12.          Structure of the Offer

The Offer is an offer for cash on the basis described in paragraph 2. It is proposed that the Offer is implemented by way of a takeover offer within the meaning of Part 28 of the Companies Act, but Lifeskills Education may, with the agreement of the Independent Director and the Panel, elect to implement the acquisition by way of a court-sanctioned scheme of arrangement under Part 26 of the Companies Act. Any such scheme of arrangement will be implemented on the same terms (subject to appropriate amendments), so far as applicable, as those which would apply to the Offer.

   13.          Share option schemes

Stagecoach has granted the following options to Richard Dawson and Manzoor Ishani to subscribe for new ordinary shares in Stagecoach:

 
                     Stagecoach Non-EMI options  Stagecoach Enterprise 
                           (including Long Term   Management Incentive 
                        Incentive Plan options)                options 
    Richard Dawson                      102,690                172,423 
    Manzoor Ishani                      156,000                215,454

However, both Richard Dawson and Manzoor Ishani have voluntarily surrendered such options, having taken independent legal advice, and have waived their rights under Rule 15 of the Code. Rule 15 of the Code would have required Lifeskills Education to have made an appropriate offer to them to ensure that their interests were safeguarded. Consequently, the Panel has granted Lifeskills Education a dispensation in respect of making an appropriate offer under Rule 15.

   14.      Disclosure of interests in Stagecoach Shares

Save as set out in paragraph 6 above and the Management Shares, neither Lifeskills Education, nor (so far as Lifeskills Education is aware) any person acting, or deemed to be acting, in concert with Lifeskills Education for the purposes of the Offer has:

(i) an interest in, or a right to subscribe for, Stagecoach Shares or in any securities convertible or exchangeable into Stagecoach Shares ("Relevant Stagecoach Securities");

(ii) any short position in Relevant Stagecoach Securities (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery; or

(iii) borrowed or lent any Relevant Stagecoach Securities (except for any borrowed Shares which have been either on-lent or sold) or has any arrangement in relation to Relevant Stagecoach Securities.

For these purposes, "arrangement" includes indemnity or option arrangements and any agreement or understanding, formal or informal, of whatever nature, relating to Relevant Stagecoach Securities which may be an inducement to deal or refrain from dealing in such securities.

   15.      Opening Position Disclosure

Lifeskills Education will make an Opening Position Disclosure, setting out the details required to be disclosed by it under Rule 8.1(a) of the Code.

16. Compulsory acquisition, delisting and cancellation of trading in Stagecoach Shares and re-registration

If Lifeskills Education receives acceptances under the Offer in respect of, and/or otherwise acquires or contracts to acquire, 90.00 per cent. or more in nominal value of the Offer Shares and of the voting rights carried by those Offer Shares and assuming that all of the other conditions of the Offer have been satisfied or waived (if capable of being waived), Lifeskills Education intends to exercise its rights in accordance with sections 974 to 991 (inclusive) of the Companies Act to compulsorily acquire the remaining Offer Shares on the same terms as the Offer.

Following the Offer becoming or being declared unconditional in all respects and subject to any applicable requirements of the AIM Rules, Lifeskills Education intends to procure that Stagecoach applies to the London Stock Exchange for the cancellation of trading in Stagecoach Shares on AIM. It is expected that such cancellation will take effect no earlier than twenty business days after the Offer becomes or is declared unconditional in all respects (provided that Lifeskills Education has acquired, or agreed to acquire, issued ordinary share capital carrying not less than 75.00 per cent. of the voting rights of Stagecoach). The cancellation of admission of Stagecoach Shares to trading on AIM will significantly reduce the liquidity and marketability of any Stagecoach Shares not acquired by Lifeskills Education. There will be no facility to deal in Stagecoach Shares following the delisting. In addition, following the cancellation of admission of Stagecoach Shares to trading on AIM, Lifeskills Education intends to adopt new articles of association containing, amongst other provisions, drag-along rights, which will provide that if there is a change of control of Stagecoach, namely a transfer to a third party of equity voting shares representing 50.00 per cent. or more of Stagecoach, Lifeskills Education can require all other Stagecoach Shareholders to sell their Stagecoach Shares to third parties on the same terms as Lifeskills Education. It is also intended that, following the Offer becoming or being declared unconditional in all respects, Stagecoach will be re-registered as a private company under the relevant provisions of the Companies Act.

   17.      Expected timetable

Lifeskills Education will dispatch the Offer Document to the Independent Shareholders as soon as practicable and, in any event, within twenty-eight days of this announcement.

   18.      General

There are no agreements or arrangements to which Lifeskills Education is a party which relate to the circumstances in which it may or may not invoke or seek to invoke a condition to the Offer.

Neither Lifeskills Education nor any person acting in concert with Lifeskills Education has any arrangement of the kind referred to in Note 6 on Rule 8 of the Code.

Your attention is drawn to the further information contained in the Appendices which forms part of this announcement.

The conditions to the Offer and a summary of further terms in relation to the Offer set out in Appendix I to this announcement form part of, and should be read in conjunction with, this announcement.

Appendix V to this announcement contains definitions of certain terms used in this announcement. The Offer will be subject to the applicable requirements of the Code.

Please note that under Rule 2.12(c) of the Code, all addresses, electronic addresses (if any) and certain other information provided by the Stagecoach Shareholders and other relevant persons for the receipt of communications from Stagecoach will upon request be provided to Lifeskills Education as required under section 4 of Appendix 4 of the Code.

This announcement does not constitute an offer or an invitation to purchase or subscribe for any securities.

Publication on website and availability of hard copies

A copy of this announcement under Rule 2.7 of the Code will be made available free of charge, at www.stagecoach.co.uk/investor-relations/ by no later than 12 noon on 13 March 2012 and will be available during the course of the Offer. You may request a hard copy of this announcement, free of charge, by contacting Richard Dawson, the Group Finance Director of Stagecoach, on +(44) (0)1932 254 333. You may also request that all future documents, announcements and information sent to you in relation to the Offer should be in hard copy form. Unless such a request is made, hard copy information will not be sent to you.

For the avoidance of doubt, the contents of the website referred to above are not incorporated into and do not form part of this announcement.

Further Information

Appendix I sets out the conditions and further terms to the Offer. Appendix II contains the sources and bases of certain information used in this announcement. Appendix III contains definitions of certain terms used in this announcement.

Smith & Williamson, which is authorised and regulated in the UK by the FSA, is acting exclusively as financial adviser to Stagecoach and no one else in connection with the Offer and will not be responsible to anyone other than Stagecoach for providing the protections afforded to clients of Smith & Williamson or for providing advice in relation to the Offer or any other matters referred to in this announcement.

All references to time in this announcement are to be London time.

Overseas Shareholders

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 would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the UK. Unless otherwise determined by Lifeskills Education or required by the Code and permitted by applicable law and regulation, the Offer will not be made, directly or indirectly, in or into, or by use of the mails, or by any means or instrumentality (including, without limitation, by means of telephone, facsimile, telex, internet or other forms of electronic communication) of interstate or foreign commerce of, or any facilities of a securities exchange of, any Restricted Jurisdiction, and the Offer will not be capable of acceptance by any such use, means, instrumentality or facility or from within any Restricted Jurisdiction. Accordingly, unless otherwise determined by Lifeskills Education or required by the Code and permitted by applicable law and regulation, copies of this announcement and any other related document are not being, and must not be, directly or indirectly, mailed or otherwise distributed or sent in or into any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not distribute or send them in, into or from such jurisdictions as doing so may make invalid any purported acceptance of the Offer by persons in any such jurisdiction.

Forward-looking statements

Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary, materially from those described in this announcement. Neither Lifeskills Education or Stagecoach nor their respective boards of directors assume any obligation to update or correct the information contained in this announcement, whether as a result of new information, future events or otherwise, except to the extent legally required.

The statements contained in this announcement are made as at the date of this announcement, unless some other time is specified in relation to them, and service of this announcement shall not give rise to any implication that there has been no change in the facts set out in this announcement since such date. Nothing contained in this announcement shall be deemed to be a forecast, projection or estimate of the future financial performance of Lifeskills Education or Stagecoach or any member of the Lifeskills Education Group or Stagecoach Group except where expressly stated.

Dealing disclosure requirements

Appendix I

Part A: Conditions of the Offer

The Offer is subject to the following conditions:

(a) valid acceptances being received (and not, where permitted, withdrawn) by not later than 1.00 p.m.on 2 April 2012 (or such later time(s) and/or date(s) as Lifeskills Education may, with the consent of the Panel or in accordance with the Code, decide) in respect of not less than 90.00 per cent. (or such lower percentage as Lifeskills Education may decide) in nominal value of the Stagecoach Shares to which the Offer relates, and in respect of not less than 90.00 per cent. (or such lower percentage being greater than 50.00 per cent. as Lifeskills Education may decide) of the voting rights carried by the Stagecoach Shares to which the Offer relates, provided that this condition will not be satisfied unless Lifeskills Education and/or any member of the Lifeskills Education Group shall have acquired, or agreed to acquire, whether pursuant to the Offer or otherwise, Stagecoach Shares carrying in aggregate, more than 50.00 per cent. of the voting rights then normally exercisable at general meetings of Stagecoach. For the purposes of this condition:

(i) Stagecoach Shares which have been unconditionally allotted shall be deemed to carry the voting rights they will carry upon issue; and

(ii) the expression "Stagecoach Shares to which the Offer relates" means (a) ordinary shares of 5 pence each in Stagecoach unconditionally allotted or issued on or before the date on which the Offer is made and (b) ordinary shares of 5 pence each in Stagecoach unconditionally allotted or issued after that date but before the time at which the Offer ceases to be open for acceptance (or such earlier date, not being earlier than 2 April 2012 or, if later, the date on which the Offer becomes unconditional as to acceptances, as Lifeskills Education may, with the consent of the Panel or in accordance with the Code, decide) but excluding any Stagecoach Shares which, on the date the Offer is made, are held or (otherwise than under such a contract as is described in section 975(2) of the Companies Act) contracted to be acquired by Lifeskills Education and/or its Associates (within the meaning of section 988 of the Companies Act);

(b) the passing by the Independent Shareholders at a general meeting of Stagecoach (or at any adjournment thereof) of the Ordinary Resolution to approve the arrangements between Lifeskills Education, the Management Team and Stagecoach or such other resolutions as may be required by the Panel to approve the Management Arrangements;

(c) no government or governmental, quasi governmental, supranational, statutory, regulatory,environmental, administrative, fiscal or investigative body, court, tribunal trade agency, association, institution or any statutory person whatsoever in any jurisdiction in which Stagecoach carries on business (Relevant Jurisdiction) (each a Third Party) having, without the consent of Lifeskills Education, decided to take, institute, implement or threaten in writing (and in each case not having withdrawn the same), any action, proceeding, suit, investigation, enquiry or reference, or having required any action to be taken or otherwise having done anything or having enacted, made or proposed any statute, regulation, decision or order (and in each case not having withdrawn the same) which in each case, would or might reasonably be likely to:

(i) make the Offer, its implementation or the acquisition or proposed acquisition of any shares or other securities in, or control of, Stagecoach by Lifeskills Education void, illegal and/or unenforceable under the laws of any Relevant Jurisdiction, or otherwise directly or indirectly prohibit, or materially restrain, restrict or delay the implementation of, or impose additional conditions or obligations which are materially adverse with respect to, or otherwise materially challenge or require material amendment of the Offer or the acquisition of any such shares or securities in Stagecoach by Lifeskills Education;

(ii) require, prevent or materially delay the divestiture or materially alter the terms envisaged for such divestiture by Lifeskills Education or by any member of the Wider Stagecoach Group of all or a material part of their respective businesses, assets or properties or impose any limitation on the ability of any of them to conduct their businesses (or any material part thereof) or to own any of their assets or properties (or any material part thereof) to an extent which in each case is material in the context of the Wider Stagecoach Group taken as a whole or Lifeskills Education (as the case may be);

(iii) impose any material limitation on, or result in a material delay in, the ability of Lifeskills Education directly or indirectly to acquire or hold or to exercise effectively all or any rights of ownership in respect of shares or loans, or other securities convertible into shares in Stagecoach or on the ability of any member of the Wider Stagecoach Group or Lifeskills Education directly or indirectly to hold or exercise effectively any rights of ownership of shares or other securities convertible into shares in any member of the Wider Stagecoach Group, or to exercise management control over any member of the Wider Stagecoach Group;

(iv) require Lifeskills Education or any member of the Wider Stagecoach Group to acquire or offer to acquire any shares or other securities in any member of the Wider Stagecoach Group or any material asset owned by any third party (other than in the implementation of the Offer and pursuant to chapter 3 of Part 28 of the Companies Act) which is material in the context of the Wider Stagecoach Group taken as a whole;

(v) result in any member of the Wider Stagecoach Group ceasing to be able to carry on business to the extent conducted at the date of this announcement under any name under which it presently carries on business to an extent which is material in the context of the Wider Stagecoach Group taken as a whole;

(vi) impose any limitation that is material in the context of the Wider Stagecoach Group taken as a whole on the ability of Lifeskills Education or any member of the Wider Stagecoach Group to integrate or coordinate all or any part of its business with all or any part of the business of Lifeskills Education and/or the Wider Stagecoach Group; or

(vii) otherwise affect the business, assets, profits or the long term prospects (where such long term prospects do not relate to a change in general economic conditions) of any member of the Wider Stagecoach Group or Lifeskills Education in a manner which is adverse to and material in the context of the Wider Stagecoach Group taken as a whole,

and all applicable waiting and other time periods during which any such Third Party could decide to take, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference or take any other step under the laws of any Relevant Jurisdiction in respect of the Offer or the acquisition or proposed acquisition of any Stagecoach Shares having expired, lapsed, or been terminated;

(d) all necessary filings having been made in connection with the Offer and all statutory or regulatory obligations in any relevant jurisdiction having been complied with in connection with the Offer or the acquisition by any member of the Lifeskills Education Group of any shares or other securities in, or control of, Stagecoach and all necessary waiting periods under any applicable legislation or regulations of any relevant jurisdiction having expired, lapsed or been terminated (as appropriate) and all authorisations, orders, recognitions, grants, consents, licences, confirmations, clearances, permissions and approvals necessary for or in respect of the Offer and the proposed acquisition of any shares or other securities in, or control of, Stagecoach by any member of the Lifeskills Education Group having been obtained in terms and in a form satisfactory to Lifeskills Education (acting reasonably) from all relevant authorities or persons with whom any member of the Wider Stagecoach Group has entered into contractual arrangements and all such authorisations, orders, recognitions, grants, consents, licences, confirmations, clearances, permissions and approvals, together with all authorisations, orders, recognitions, grants, licences, confirmations, clearances, permissions and approvals necessary to carry on the business of any member of the Wider Stagecoach Group, remaining in full force and effect and all filings necessary for such purpose have been made and there being no notice of any intention to revoke or not to renew the same at the time at which the Offer becomes otherwise unconditional (where such revocation or failure to renew would be material in the context of the Wider Stagecoach Group, taken as a whole) and all necessary statutory or regulatory obligations in any relevant jurisdiction having been complied with in all material respects;

(e) save as Disclosed, there being no provisions of any arrangement, agreement, licence, permit or other instrument to which any member of the Wider Stagecoach Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject and which, in consequence of the Offer, or the proposed acquisition of any shares or other securities in Stagecoach or because of a change in the control or management of Stagecoach or otherwise, could or might reasonably be expected to result, to an extent in each case, which would be material in the context of the Wider Stagecoach Group taken as a whole, in:

(i) any monies borrowed by, or any other indebtedness (actual or contingent) of or grant available to, any such member of the Wider Stagecoach Group, being or becoming repayable or capable of being declared repayable immediately or earlier than their or its stated maturity date or repayment date or the ability of such member of the Wider Stagecoach Group to borrow monies or incur any indebtedness being withdrawn or inhibited;

(ii) the creation of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of any such member of the Wider Stagecoach Group or any such security (whenever arising or having arisen) becoming enforceable;

(iii) any such arrangement, agreement, licence, permit or instrument or the rights, liabilities, obligations or interests thereunder of any such member of the Wider Stagecoach Group being terminated or adversely modified or any action being taken or any obligation or liability arising thereunder that is material in the context of the Offer;

(iv) any assets or interests of any such member of the Wider Stagecoach Group being or falling to be disposed of or charged or any right arising under which any such asset or interest could be required to be disposed of or charged;

(v) the rights, liabilities, obligations, interests or business of any such member of the Wider Stagecoach Group in or with any firm or body or, in the case of a business any arrangements relating to such interest or business, being terminated or adversely modified or affected;

(vi) any such member ceasing to be able to carry on business under any name under which it presently does so;

(vii) the financial or trading position or prospects of any member of the Wider Stagecoach Group being prejudiced or adversely affected to an extent which is material in the context of the Offer; or

(viii) the creation of any material liability, actual or contingent, by any such member otherwise than in the ordinary course of business, and no event having occurred which, under any provision of any agreement, arrangement, licence, permit, or other instrument to which any member of the Wider Stagecoach Group is a party or by or to which any such member or any of its assets is bound, entitled or subject, would result in any of the events or circumstances as are referred to in sub-paragraphs (i) to (viii) of this paragraph (e) in any case to an extent which is or would be material in the context of the Wider Stagecoach Group as a whole;

(f) save as Disclosed, no member of the Wider Stagecoach Group having, since 31 May 2011:

(i) (without prejudice to paragraph (c) of this Part A of Appendix 1) issued or agreed to issue or authorised or proposed the issue or grant of additional shares of any class, or securities convertible into, or rights, warrants or options to subscribe for or acquire any such shares or convertible securities (save for options granted, and for any Stagecoach Shares allotted upon exercise of options granted, prior to the date hereof under any Stagecoach share option schemes and any other option agreements and save as between Stagecoach and its wholly owned subsidiaries);

(ii) other than to a wholly-owned member of the Stagecoach Group, recommended, declared, paid, made or proposed to recommend, declare, pay or make any bonus, dividend or other distribution whether payable in cash or otherwise;

(iii) save as between Stagecoach and its wholly owned subsidiaries, issued, authorised or proposed the issue of any debentures, or incurred or increased any indebtedness or become subject to any contingent liability which is material in the context of the Wider Stagecoach Group as a whole;

(iv) entered into or offered to enter into (which remains open for acceptance) any contract, any reconstruction or amalgamation, any transaction or arrangement otherwise than in the ordinary course of business which in any such case is material in the context of the Wider Stagecoach Group as a whole;

(v) entered into or materially varied or made an offer (which remains open for acceptance) to enter into or materially vary, the terms of any service agreement or other contract or agreement with any director, or (other than in the ordinary course of business) with any senior executive of the Stagecoach Group;

(vi) entered into or offered to enter into (which offer remains open for acceptance) any agreement which consents to the restriction of the scope of the business of any member of the Wider Stagecoach Group which is material in the context of the Wider Stagecoach Group or the Lifeskills Education Group as a whole;

(vii) waived or compromised any material claim otherwise than in the ordinary course of business which is material in the context of the Wider Stagecoach Group taken as a whole;

(viii) entered into or varied or authorised, or offered (which offer remains open for acceptance) to enter into or vary any contract, transaction or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, onerous or unusual nature or magnitude or which is restrictive to the businesses of any member of the Wider Stagecoach Group or which involves an obligation of such a nature or magnitude and which is material in the context of the Wider Stagecoach Group as a whole;

(ix) purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares or other securities or reduced, save in respect of the matters mentioned in sub-paragraph (i) above, or made any other material change to any part of its share capital;

(x) (other than in respect of a member of the Wider Stagecoach Group which is dormant and was solvent at the relevant time) taken any corporate action or (to an extent which is material in the context of the Stagecoach Group taken as a whole) had any legal proceedings started or threatened against it for its winding-up, dissolution or reorganisation or for the appointment of a receiver, administrative receiver, administrator, trustee or similar officer of all or any of its assets or revenues or any analogous proceedings in any jurisdiction or had any such person appointed;

(xi) save for transactions between wholly-owned members of the Stagecoach Group, merged with any body corporate or acquired or disposed of or demerged or transferred, mortgaged or charged or created any security interest over any material assets or any right, title or interest in any material asset (including shares in subsidiaries, associates and trade investments) or authorised or proposed or announced any intention to propose any merger, demerger, acquisition or disposal, transfer, mortgage or charge or security interest or change in its loan capital, as aforesaid (other than in the ordinary course of business) which in any such case is material in the context of the Offer;

(xii) entered into an agreement, contract, arrangement or commitment or passed any resolution or made any offer (which remains open for acceptance) with respect to any of the transactions or events referred to in this paragraph (f) which in any such case is material in the context of the Wider Stagecoach Group as a whole;

(xiii) made any material amendment to its memorandum or articles of association;

(xiv) been unable or admitted that it is unable to pay its debts or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business;

   (g)            since 31 May 2011 and save as Disclosed:

(i) there having been no adverse change in the business, assets, financial or trading position or profits of Stagecoach or any other member of the Wider Stagecoach Group in each case which is material in the context of the Wider Stagecoach Group taken as a whole;

(ii) there having been no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Wider Stagecoach Group is or could reasonably be expected to become a party (whether as plaintiff or defendant or otherwise), no such proceedings having been threatened in writing against any member of the Wider Stagecoach Group and no investigation by any relevant authority against or in respect of any member of the Wider Stagecoach Group having been instituted, threatened or announced by or against or remaining outstanding in respect of any member of the Wider Stagecoach Group which in any such case might adversely affect any member of the Wider Stagecoach Group in any way which is material in the context of the Wider Stagecoach Group taken as a whole;

(iii) no contingent or other liability of any member of the Wider Stagecoach Group having arisen which would be reasonably likely materially and adversely to affect the Wider Stagecoach Group taken as a whole; or

(iv) no steps having been taken which are likely to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the Wider Stagecoach Group which is necessary for the proper carrying on of its business and where such withdrawal, cancellation, termination or modification would be material in the context of the Wider Stagecoach Group, taken as a whole;

   (h)              save as Disclosed, Lifeskills Education not having discovered:

(i) that any financial, business or other information concerning the Wider Stagecoach Group that is

material in the context of the Offer as contained in the information publicly disclosed at any time by any member of the Wider Stagecoach Group, is materially misleading, contains a material misrepresentation of fact or omits to state a fact necessary to make the information contained therein not materially misleading which has not been corrected and which is material in the context of the Wider Stagecoach Group taken as a whole; or

(ii) that any member of the Wider Stagecoach Group is subject to any liability (contingent or otherwise) and which is material in the context of the Wider Stagecoach Group taken as a whole; or

(iii) that any past or present member of the Wider Stagecoach Group has not complied with any and all applicable laws and regulations of any relevant jurisdiction relating to an emission, disposal, discharge, deposit, spillage or leak of waste or hazardous or harmful substances on or about or from any land or property of any description or other asset now or previously owned, occupied or made use of by any past or present member of the Wider Stagecoach Group which non--compliance would be reasonably likely to give rise to any liability (whether actual or contingent) on the part of any member of the Wider Stagecoach Group which would be material in the context of the Wider Stagecoach Group taken as a whole; or

(iv) that there is or is likely to be, for that or any other reason whatsoever, any liability (whether actual or contingent) of any past or present member of the Wider Stagecoach Group to or requirement to make good, repair, reinstate or clean-up any property now or previously owned, occupied or made use of by any past or present member of the Wider Stagecoach Group which is material in the context of the Wider Stagecoach Group taken as a whole that; or

(v) any member of the Wider Stagecoach Group does not own or have licensed to it or otherwise possess legally enforceable rights to use all intellectual property that is:

(A) required or reasonably necessary for the conduct of business of the relevant member of the Wider Stagecoach Group as currently conducted; or

   (B)              under development for such business;

and, in either case, the absence of which, individually or in the aggregate, would be material in the context of the Wider Stagecoach Group taken as a whole; or

(vi) any member of the Wider Stagecoach Group has infringed any intellectual property rights of any third party where the consequences of which would be material in the context of the Wider Stagecoach Group taken as a whole; or

   (vii)   any claims have been asserted in writing or threatened in writing by any person:

(A) that the Wider Stagecoach Group infringes any intellectual property of any third party; or

(B) challenging the ownership of any member of the Wider Stagecoach Group of, or the validity or effectiveness of, any of its intellectual property;

and any such claims are material in the context of the Wider Stagecoach Group taken as a whole; or

(viii) any intellectual property held by any member of the Wider Stagecoach Group that is material in the context of the Wider Stagecoach Group taken as a whole is not valid and subsisting; or

(ix) there is material unauthorised use, infringement or misappropriation of any intellectual property of any member of the Wider Stagecoach Group by any third party; or

(x) any persons who are now, or within the last five years have been, employees, consultants or contractors of any member of the Wider Stagecoach Group having failed to execute proprietary information and confidentiality agreements where such failure is material in the context of the Wider Stagecoach Group taken as a whole.

Part B: Certain Further Terms of the Offer

The Offer will lapse unless the conditions set out above (other than condition (a)) are fulfilled or (if capable of waiver) waived or, where appropriate, have been determined by Lifeskills Education in its reasonable opinion to be or to remain satisfied no later than twenty-one days after the later of (i) 2 April 2012 (ii) the date on which the Offer becomes or is declared unconditional as to acceptances, or such later date as the Panel may agree. Lifeskills Education shall be under no obligation to waive (if capable of waiver), to determine to be or remain satisfied, or to treat as fulfilled any of the conditions (c) to (i) inclusive by any date earlier than the latest date specified above for fulfillment of that condition.

Lifeskills Education reserves the right to waive, in whole or in part, all or any of conditions (c) to (i) inclusive of Part A of this Appendix I.

Lifeskills Education shall be under no obligation to waive or treat as satisfied any of conditions (b) to (i) inclusive of Part A of this Appendix I by a date earlier than the latest date specified above for the satisfaction thereof notwithstanding that the other conditions of the Offer may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any such conditions may not be capable of fulfillment. If Lifeskills Education is required by the Panel to make an offer for Stagecoach Shares under the provisions of Rule 9 of the Code, Lifeskills Education may make such alterations to the conditions as are necessary to comply with the provisions of that Rule.

Under Rule 13.5 of the Code, Lifeskills Education may not invoke a condition to the Offer so as to cause the Offer not to proceed, to lapse, or to be withdrawn unless the circumstances which give rise to the right to invoke the condition are of material significance to Lifeskills Education in the context of the Offer. The condition contained in paragraph (a) of Part A of this Appendix I is not subject to this provision of the Code.

The Offer will lapse (unless the Panel otherwise consents) if the Offer or any matter arising from or relating to the Offer is referred to the UK Competition Commission before 1.00 p.m. on 2 April 2012 or the date on which the Offer becomes or is declared unconditional as to acceptances, whichever is the later.

The availability of the Offer to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements.

If the Offer lapses, the Offer will cease to be capable of further acceptances and accepting Independent Shareholders and Lifeskills Education shall cease to be bound by acceptances submitted at or before the time when the Offer so lapses.

Lifeskills Education may, with the agreement of the Independent Directors and the Panel, elect to implement the acquisition by way of a court-sanctioned scheme of arrangement under Part 26 of the Companies Act. Any such scheme of arrangement will be implemented on the same terms (subject to appropriate amendments), so far as applicable, as those which would apply to the Offer.

The Offer Shares will be transferred to Lifeskills Education fully paid and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and other third party rights or interests and together with all rights attaching to such Offer Shares, including without limitation, the right to receive all dividends and other distributions (if any) announced, declared, made or paid on or after 12 March 2012.

This Offer will be governed by English Law and will be subject to the jurisdiction of the English courts and the conditions set out in this announcement and in the Form of Acceptance.

The conditions in Part A of this Appendix I and the further terms set out in the Offer Document and the Form of Acceptance apply to the Offer.

Unless the context otherwise requires, any reference in this announcement and in the Form of Acceptance to acceptances of the Offer shall include deemed acceptances of the Offer.

Appendix II

Sources of information and bases of calculation

The value of Stagecoach as implied by the Offer Price stated in paragraph 2 of this announcement is based on the issued ordinary share capital of 10,000,000 as at 9 March 2012 (the last business day before commencement of the Offer Period).

Further sources of information regarding data reported in this announcement are as follows:

(a) the Closing Price per Stagecoach Share of 39.00 pence on 8 March 2012 (the last practicable business day before

   (b)   commencement of the Offer Period) is the closing middle market price derived from the FT.com;

(i) the six month average Closing Price of 39.59 pence (being the average Closing Price for the six month period ended on 8 March 2012) is derived from the FT.com and taken as the average daily closing price for the period; and

(ii) unless otherwise stated, the financial information relating to Stagecoach is extracted from the audited consolidated financial statements of Stagecoach for the financial year ended 31 May 2011.

Percentages in tables have been rounded and accordingly may not add up to 100.00 per cent. As a result of this rounding, the totals of data presented in this announcement may vary slightly from the actual arithmetic totals of such data.

Appendix III

Irrevocable undertakings and Letters of Intent

The following Independent Shareholders have entered into irrevocable undertakings to accept the Offer (or procure acceptance of the Offer, as the case may be) in respect of the following Offer Shares and to vote (or procure the voting) in favour of the Ordinary Resolution in respect of the following Eligible Voting Shares:

 
                                            Percentage of 
                                Number of    issued share 
 Name of Shareholder    Stagecoach Shares         capital 
 Graham Cole                        5,000           0.05% 
 David Sprigg*                  2,858,819          28.59%

The following Stagecoach Shareholder has entered into an irrevocable undertaking to accept (or procure the acceptance of the Offer as the case may be) the Offer in respect of the following Offer Shares:

 
                                            Percentage of 
                                Number of    issued share 
 Name of Shareholder    Stagecoach Shares         capital 
 Stephanie Manuel*              1,523,850          15.24%

* Includes 316,442 Offer Shares held by Stephanie Manuel's self invested personal pension and 40,000 Offer Shares held on Stephanie Manuel's behalf by Smith & Williamson Nominees Limited which Stephanie Manuel has irrevocably agreed to procure will accept the Offer.

 
                                                   Percentage of 
                                       Number of    issued share 
 Name of Shareholder           Stagecoach Shares         capital 
 Hazell Carr Edwards FURB                465,000          4.65%* 
 Heritage Capital Management             300,000          3.00%* 
  Limited

* Shareholding as at 9 March 2012, being the latest practicable business day prior to the date of this announcement.

Accordingly, Lifeskills Education has received, in aggregate, letters of intent or irrevocable undertakings in respect of a total of:

(a) 5,152,669 Offer Shares, to accept the Offer representing approximately 51.53 per cent. of the Stagecoach Shares; and

(b) 3,628,819 Eligible Voting Shares to vote in favour of the Ordinary Resolution, representing approximately 54.14 per cent. of the Eligible Voting Shares.

Copies of the irrevocable undertakings will be on display on Stagecoach's website www.stagecoach.co.uk/investor-relations/ from 12 noon on 13 March 2012 until the end of the Offer.

Appendix IV

Management Arrangements

   1                                                                  Acquisition Agreement

(a) Lifeskills Education has entered into the Acquisition Agreement with the Management Team who, on Completion, will exchange the Management Shares that they (and certain of their Connected Persons) hold, representing in aggregate approximately 17.48 per cent. of the fully diluted share capital of Stagecoach as at the date of this agreement, in consideration for the issue to them of 2,349 Lifeskills Education Shares (371 M Shares to Richard Dawson, 231 M Shares to Manzoor Ishani and 1,747 Founder Shares to Stephanie Manuel) representing in aggregate approximately 23.49 per cent. of the issued share capital of Lifeskills Education and a total of GBP1,134,057 Loan Notes.

(b) In addition, Manzoor Ishani and Richard Dawson will be issued 879 and 519 M Shares respectively at GBP1 per M Share which shall vest with them over a period of three years from Completion (see paragraph 2(h) below for further details of their vesting).

(c) In aggregate the Management Team will own approximately 37.47 per cent. of the issued share capital of Lifeskills Education as at the Unconditional Date.

(d) The Acquisition Agreement is conditional upon the Offer becoming or being declared unconditional in all respects. This condition may be waived by Lifeskills Education if, in order to declare the Offer unconditional as to acceptances, the purchase of Stagecoach Shares pursuant to the Acquisition Agreement is required to be counted towards fulfilling any condition of the Offer.

2. Shareholders' Agreement and Lifeskills Education Articles

(a) The Investor, Lifeskills Education, the Management Team and Henry Meikle have entered into the Shareholders' Agreement and have adopted the Lifeskills Education Articles to regulate the relationship between the shareholders of Lifeskills Education.

(b) The ordinary share capital of Lifeskills Education is divided into three classes of ordinary share, the I Shares to be held initially by the Investor (the I Shareholder), the Founder Shares to be held by Stephanie Manuel (the Founder Shareholder) and the M Shares to be held by the Management Team (other than Stephanie Manuel) and Henry Meikle (M Shareholders).

(c) The I Shares, the Founder Shares and the M Shares, rank pari passu, save as detailed below, and entitle the holders to attend and vote at general meetings and to receive dividends and other distributions.

(d) Under the Lifeskills Education Articles, the I Shareholder is entitled to appoint and replace such number of directors as would result in it having a majority on the Lifeskills Education Board. Each of the Founder Shareholder and the M Shareholders has the right to be personally appointed to the Board of Lifeskills Education so long as they remain employed by a member of the Lifeskills Education Group, and so long as they each hold no less than 5.00 per cent. of the then issued share capital of Lifeskills Education ("M Director"). If Stephanie Manuel ceases to have the right to be so appointed as an M Director, then, for so long as she holds no less than 5.00 per cent. of the issued share capital of Lifeskills Education, she has the right to appoint herself as a director of Lifeskills Education.

(e) The Lifeskills Education Articles provide for a quorum of two directors at meetings of the Board of Lifeskills Education one of which must be a director appointed by the I Shareholder (subject to some exceptions) and the quorum at general meetings of Lifeskills Education is one member entitled to vote from each class of share, failing which the relevant meeting will be adjourned to a later date. There are provisions dealing with the lack of a proper quorum at any later board meetings and shareholder meetings, to avoid deadlock.

(f) If a M Shareholder ceases to be employed within the Lifeskills Education Group/Stagecoach Group in circumstances where he is a considered a "bad leaver" in accordance with the terms of the Lifeskills Education Articles, or in the case of Richard Dawson, Manzoor Ishani and Henry Meikle he resigns or he is lawfully and summarily dismissed ("Bad Leaver") then the Board may (and must if requested by the Investor) at any time within twelve months of such person becoming a Bad Leaver require him to offer his or her M Shares (save for certain excluded M Shares which will always be valued as if they were "Good Leaver" shares (as defined below) ("Excluded Shares")) for sale at the lower of the issue price (including any premium) and the market value (as determined in accordance with the Lifeskills Education Articles) ("Market Value") in accordance with the pre-emption provisions summarised at paragraph 2(i) below.

(g) If a M Shareholder ceases to be employed within the Lifeskills Education Group/Stagecoach Group, in circumstances where he is considered to be a "good leaver" in accordance with the terms of the Lifeskills Education Articles ("Good Leaver") in respect of Excluded Shares, if Manzoor Ishani, Richard Dawson or Henry Meikle cease to be an employee, director or consultant other than by reason of resigning or by reason of the lawful and summary termination of their employment agreement, service agreement or consultancy agreement (as appropriate) in respect of any Shares held by them, or if the Founder Shareholder is classed as a Good Leaver or Bad Leaver then the Board may (and must if requested by the Investor) at any time within twelve months of such person becoming a leaver require such leaver to offer his or her M Shares or Founder Shares (as appropriate) for sale at the Market Value in accordance with the pre-emption provisions summarised at paragraph 2(i) below.

(h) The Lifeskills Education Articles provide that, if at any time during the three years following Completion, Richard Dawson, Manzoor Ishani and/or Henry Meikle cease for any reason to be an employee, consultant and/or director of any member of the Lifeskills Education Group/Stagecoach Group, then depending on the date on which he/they leave, a number of his/their Lifeskills Education Shares is required to be transferred to the Investor for the nominal value of such Lifeskills Education Shares. The number of Lifeskills Education Shares required to be transferred is calculated as follows:

(i) if Richard Dawson, Manzoor Ishani and/or Henry Meikle leave on or before the first anniversary of Completion, then all of the relevant leaver's Lifeskills Education Shares (other than the Excluded Shares) shall be transferred to the Investor;

(ii) if Richard Dawson, Manzoor Ishani and/or Henry Meikle leave after the first anniversary of Completion but before the second anniversary of Completion then two-thirds of the relevant leavers' shares (other than the Excluded Shares) shall be transferred to the Investor; and

(iii) if Richard Dawson, Manzoor Ishani and/or Henry Meikle leave on or after the second anniversary of Completion but before the third anniversary of Completion, then one-third of the relevant leavers' shares (other than the Excluded Shares) shall be transferred to the Investor.

(i) Transfers of shares are not permitted unless the pre-emption procedures set out in the Lifeskills Education Articles have first been exhausted. Before a Lifeskills Education Shareholder can transfer shares he must first offer such shares to the following person in the following order: (i) the Investor, (ii) Lifeskills Education/an employment benefit trust of Lifeskills Education, and (iii) to the other Lifeskills Education Shareholders. The price the shares will be offered at will be the price agreed or the lower of the price set out in the transferor's notice of transfer and the Market Value (as determined in accordance with the provisions of the Lifeskills Education Articles). These pre-emption provisions will not apply to transfers to certain permitted transferees.

(j) The Lifeskills Education Articles contain rights of pre-emption on further issues of Lifeskills Education Shares, to all of Lifeskills Education Shareholders pro rata to their holdings. To the extent that any Lifeskills Education Shares are not taken up by Lifeskills Education Shareholders, the remaining Lifeskills Education Shares can be applied in satisfying excess demand. If such shares are not taken up by the Lifeskills Education existing shareholders in accordance with such pre-emption provisions they can be offered to a third party.

(k) The Lifeskills Education Articles provide that on a change of control, namely the transfer to a third party of equity voting shares representing 50.00 per cent. or more of Lifeskills Education, the Investor can require the Founder Shareholder and the M Shareholders to sell their Lifeskills Education Shares to the third party on the same terms as the Investor. In addition, if there is proposed a transfer of shares to a third party of equity voting shares representing 50.00 per cent. or more of Lifeskills Education, no such transfer can take place unless the offer is made to all the other Lifeskills Education Shareholders on the same terms.

(l) The Shareholders' Agreement provides that, no dividends or other distribution or return of an income nature can be made without Investor consent.

(m) The Shareholders' Agreement sets out certain matters in relation to which the consent of the Investor is required. These rights of veto relate to, inter alia, the winding up of Lifeskills Education, variations to the rights attaching to any Lifeskills Education Shares, changes to the Lifeskills Education Articles, changes to the Loan Notes, the sale of any assets, and/or a change in the nature of the business.

(n) Any changes to the rights attaching to any class of share require the consent of that class, as well as the consent of the Investor.

(o) The Investor has certain enhanced voting rights (which give the Investor 95.00 per cent. of the voting rights on the holding of a general meeting or on the passing of a written resolution) in the event that, inter alia, Schedule 8 of the Shareholders' Agreement has been breached, or if the Bank demand (and do not waive their right to) immediate repayment of either of the Facilities.

(p) Pursuant to the Shareholders' Agreement, the Management Team agreed to give certain warranties to the Investor, including, inter alia, in respect of information they have supplied in respect of themselves and on the content of the legal and financial due diligence reports, in respect of no share options being outstanding and in respect of material contracts. In addition, the Management Team undertake various corporate governance obligations and agrees to give various restrictive covenants.

(q) The Shareholders' Agreement and the adoption of the Lifeskills Education Articles are conditional upon the Offer becoming or being declared unconditional in all respects.

   3.                                                   Loan Notes

Lifeskills Education will issue Loan Notes to the Investor and Henry Meikle for cash, and will also issue Loan Notes to the members of the Management Team as part of the Management Arrangements on the Unconditional Date. The amount of Loan Notes being issued by Lifeskills Education is as follows:

 
  Noteholder                                     Amount of 
                                                Loan Notes 
  Stephanie Manuel                              GBP372,601 
  Stephanie Manuel's interests in possession    GBP616,153 
   settlement 
  Richard Dawson                                GBP136,589 
  Manzoor Ishani                                  GBP8,714 
  Henry Meikle                                  GBP172,458 
  Investor                                    GBP3,255,413 
                                              ------------ 
  Total                                       GBP4,561,928 
                                              ------------

The Loan Notes carry interest at a rate of 8.00 per cent. per annum, payable annually in arrears save that the Investor has the right to elect to have all the interest payable rolled up until repayment of the capital under such notes. The Loan Notes are repayable on the earlier of a sale of the shares (resulting in a third party obtaining a controlling interest) or the sale of all or substantially all the business of Lifeskills Education, a listing of Lifeskills Education or the seventh anniversary of Completion.

The Loan Notes are subject to the terms of the Intercreditor Deed and rank behind any facilities of the Bank. The Loan Notes are conditional on the Offer becoming or being declared unconditional in all respects.

   4.                                                          Service Agreements

Subject to the Offer becoming or being declared unconditional in all respects the following agreements will be entered into:

(a) Manzoor Ishani shall enter into a new service agreement with Stagecoach. Under the terms of his proposed new service agreement:

   --      His remuneration shall be GBP81,997.95 gross per annum. 
   --      He shall work 4 days per week.

-- The appointment is terminable by Stagecoach giving to him 6 months' notice or by Manzoor Ishani giving to Stagecoach 3 months' notice.

-- He may provide franchising and other advice to any third party provided such activity is not competitive with Stagecoach, does not interfere with his duties and is not carried out during his normal working hours.

-- He may participate in a discretionary bonus scheme which will be based upon achievement of corporate and personal targets.

-- His holiday allowance shall be 27 days per annum exclusive of Bank Holidays and the period between Christmas and New Year.

   --     His sick pay entitlement shall be full pay for up to 60 working days in any 12 month period.

-- He will be reimbursed for the cost of all expenses reasonably and properly incurred by him in the performance of his duties as a director. When traveling long haul flights (in excess of 4 hours) these may be booked as business class, but all other flights must be booked as economy class.

   --     He will have the benefit of private medical insurance for himself and his family.

-- He will be entitled to a company car and payment of running costs (excluding fuel consumed in private use).

-- He will be subject to restrictions preventing him from soliciting restricted clients, holding a material interest in a competitive business or soliciting any senior executive either during the appointment or for a period of 12 months following termination.

   --     He will be subject to express intellectual property duties. 
   --     He will, upon request, be required to undergo a Criminal Records Bureau check.

(b) Richard Dawson will enter into a deed to vary his service agreement with Stagecoach to:

   --      Amend his job title to Joint Managing Director. 
   --      Reduce his salary to GBP99,500 gross per annum. 
   --      Delete the provision relating to automatic retirement at 65 years.

-- Amend the bonus provisions so that he may participate in a discretionary bonus scheme which will be based upon achievement of corporate and personal targets.

-- Amend his holiday entitlement to 25 days per annum exclusive of Bank Holidays and the period between Christmas and New Year.

-- Refer to his entitlement to benefit from private medical insurance for himself and his family and a company car (inclusive of running costs, but excluding private fuel costs).

   --     Provide that he will, upon request, be required to undergo a Criminal Records Bureau check.

-- Amend his existing post-termination restrictions in order to reduce the geographical limit of the non-compete provision.

   --      Confirm her salary to be GBP115,065.58 gross per annum. 
   --      Delete the provision relating to automatic retirement at 65 years.

-- Amend the bonus provisions so that she may participate in a discretionary bonus scheme which will be based upon achievement of corporate and personal targets.

-- Maintain her holiday entitlement at 28 days per annum exclusive of Bank Holidays and the period between Christmas and New Year.

   --     Refer to her entitlement to benefit from private medical insurance for herself. 
   --     Provide that she will, upon request, be required to undergo a Criminal Records Bureau check.

-- Amend her existing post-termination restrictions in order to reduce the geographical limit of the non-compete provision.

Appendix V

Definitions

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

 
 Acquisition Agreement            the acquisition agreement dated 9 March 
                                   2012, pursuant to which Lifeskills Education 
                                   has agreed to acquire the Management 
                                   Shares held by the Management Team (and 
                                   certain of their Connected Persons) conditionally 
                                   upon the Offer becoming or being declared 
                                   unconditional in all respects 
-------------------------------  --------------------------------------------------- 
 AIM                              the AIM market of the London Stock Exchange 
-------------------------------  --------------------------------------------------- 
 AIM Rules                        the AIM Rules for Companies as published 
                                   by the London Stock Exchange (as amended 
                                   from time to time) 
-------------------------------  --------------------------------------------------- 
 Announcement Date                12 March 2012 
-------------------------------  --------------------------------------------------- 
 Associates                       associates within the meaning of section 
                                   988 of the Companies Act 
-------------------------------  --------------------------------------------------- 
 Bank                             National Westminster Bank plc 
-------------------------------  --------------------------------------------------- 
 Bank Fees                        the sum of GBP100,101.20 payable by Lifeskills 
                                   Education on signing the Facility Agreements 
                                   which relates to arrangement fees and 
                                   expenses due to the Bank 
-------------------------------  --------------------------------------------------- 
 Board of Lifeskills Education    the board of directors of Lifeskills 
                                   Education 
-------------------------------  --------------------------------------------------- 
 Board of Stagecoach              the board of directors of Stagecoach 
-------------------------------  --------------------------------------------------- 
 Bridging Facility                the GBP929,466 bridging facility to be 
                                   provided by the Bank to Lifeskills Education 
                                   pursuant to the terms of the Bridging 
                                   Facility Agreement 
-------------------------------  --------------------------------------------------- 
 Bridging Facility Agreement      the facility agreement to be entered 
                                   into between the Bank and Lifeskills 
                                   Education pursuant to which the Bridging 
                                   Facility is to be provided 
-------------------------------  --------------------------------------------------- 
 business day                     any day (not being a public holiday, 
                                   Saturday or Sunday), on which banks are 
                                   normally open for business in the City 
                                   of London 
-------------------------------  --------------------------------------------------- 
 Canada                           Canada, its provinces and territories 
                                   and all areas subject to its jurisdiction 
                                   and any political sub-division thereof 
-------------------------------  --------------------------------------------------- 
 Closing Price                    the closing middle market quotation of 
                                   a Stagecoach Share as derived from FT.com 
-------------------------------  --------------------------------------------------- 
 Code                             the City Code on Takeovers and Mergers 
                                   of the UK 
-------------------------------  --------------------------------------------------- 
 Companies Act                    the Companies Act 2006 (as amended) 
-------------------------------  --------------------------------------------------- 
 Completion                       completion of the Acquisition Agreement, 
                                   the Shareholders' Agreement, the Loan 
                                   Notes and the Service Agreements 
-------------------------------  --------------------------------------------------- 
 conditions                       the conditions and further terms to the 
                                   Offer set out in Part A and Part B of 
                                   Appendix I to this announcement 
-------------------------------  --------------------------------------------------- 
 Connected Persons                close relatives, family members, self 
                                   invested personal pensions, related trusts 
                                   and discretionary fund managers of the 
                                   Management Team 
-------------------------------  --------------------------------------------------- 
 CV Capital                       CV Capital LLP, financial advisor to 
                                   Lifeskills Education 
-------------------------------  --------------------------------------------------- 
 Dealing Disclosure               has the meaning given to it in the Code 
-------------------------------  --------------------------------------------------- 
 Disclosed                        fairly disclosed (i) in the Financial 
                                   Statements, (ii) by way of Public Announcement; 
                                   or (iii) in writing to Lifeskills Education 
                                   or its financial or legal advisers by 
                                   or on behalf of Stagecoach prior to the 
                                   date of this announcement in the context 
                                   of the Offer 
-------------------------------  --------------------------------------------------- 
 Eligible Voting Shares           those Stagecoach Shares that are held 
                                   by the Independent Shareholders and which 
                                   are eligible to vote on the Ordinary 
                                   Resolution at the General Meeting 
-------------------------------  --------------------------------------------------- 
 Facilities                       the Term Facility and the Bridging Facility 
-------------------------------  --------------------------------------------------- 
 Facility Agreements              the Term Facility and the Bridging Facility 
                                   Agreements 
-------------------------------  --------------------------------------------------- 
 Financial Statements             the audited annual consolidated financial 
                                   statements of Stagecoach for the year 
                                   ended 31 May 2011 
-------------------------------  --------------------------------------------------- 
 Form of Acceptance               the form of acceptance, authority and 
                                   election relating to the Offer accompanying 
                                   this announcement 
-------------------------------  --------------------------------------------------- 
 Founder Shares                   the founder shares of GBP1 each in the 
                                   share capital of Lifeskills Education 
-------------------------------  --------------------------------------------------- 
 FSA                              the Financial Services Authority 
-------------------------------  --------------------------------------------------- 
 FT.com                           the online version of the Financial Times 
                                   at www.ft.com 
-------------------------------  --------------------------------------------------- 
 General Meeting                  the general meeting of Stagecoach (or 
                                   any adjournment thereof) to be convened 
                                   pursuant to Rule 16 of the Code at which 
                                   the Ordinary Resolution will be proposed 
                                   (which only the Independent Shareholders 
                                   shall vote on) notice of which will be 
                                   set out in the Notice of General Meeting 
-------------------------------  --------------------------------------------------- 
 I Shares                         the I ordinary shares of GBP1 each in 
                                   the share capital of Lifeskills Education 
-------------------------------  --------------------------------------------------- 
 Independent Directors            the independent directors of Stagecoach, 
                                   being Graham Cole (Non-Executive Chairman) 
                                   and David Sprigg (Joint Managing Director) 
-------------------------------  --------------------------------------------------- 
 Independent Shareholders         the Stagecoach Shareholders excluding 
                                   the Management Team, Rodney Maryan-Green 
                                   and Carol Maryan-Green 
-------------------------------  --------------------------------------------------- 
 Intercreditor Deed               the intercreditor deed to be entered 
                                   into between the Bank, Lifeskills Education, 
                                   the Investor, Henry Meikle and the Management 
                                   Team on or around the date of this announcement 
-------------------------------  --------------------------------------------------- 
 Investor                         Lifeskills Education Holdings Limited, 
                                   a company registered in England and Wales 
                                   with number 07914302 
-------------------------------  --------------------------------------------------- 
 Japan                            Japan, its cities, prefectures, territories 
                                   and possessions 
-------------------------------  --------------------------------------------------- 
 Lifeskills Education             Lifeskills Education Limited a private 
                                   company registered in England and Wales 
                                   with number 7853271 
-------------------------------  --------------------------------------------------- 
 Lifeskills Education             the articles of association adopted by 
  Articles                         Lifeskills Education conditionally upon 
                                   the Offer becoming or being declared 
                                   unconditional in all respects 
-------------------------------  --------------------------------------------------- 
 Lifeskills Education             Lifeskills Education, its subsidiaries 
  Group                            and subsidiary undertakings 
-------------------------------  --------------------------------------------------- 
 Lifeskills Education             the I Shares, M Shares and Founder Shares 
  Shares 
-------------------------------  --------------------------------------------------- 
 Loan Note Documents              the Loan Notes, any certificate or certificates 
                                   evidencing the Loan Notes, the Loan Note 
                                   Instrument, the Company Loan Note Security 
                                   Documents, the Lifeskills Education Loan 
                                   Note Security Documents and any document 
                                   designated as a Loan Note Document from 
                                   time to time 
-------------------------------  --------------------------------------------------- 
 Loan Notes                       the loan notes issued to the Investor, 
                                   Henry Meikle and the Management Team 
                                   (and certain of their Connected Persons) 
                                   pursuant to the Loan Note Instrument 
-------------------------------  --------------------------------------------------- 
 Loan Note Instrument             the Loan Note Instrument pursuant to 
                                   which the Loan Notes are to be constituted 
-------------------------------  --------------------------------------------------- 
 London Stock Exchange            London Stock Exchange plc, together with 
                                   any successors thereto 
-------------------------------  --------------------------------------------------- 
 M Shares                         the M ordinary shares of GBP1 each in 
                                   the share capital of Lifeskills Education 
-------------------------------  --------------------------------------------------- 
 Management Arrangements          the arrangements under which the Management 
                                   Team will subscribe for Lifeskills Education 
                                   Shares and the Loan Notes and all other 
                                   matters relating to the Management Team's 
                                   proposed incentivisation by and relationship 
                                   with Lifeskills Education under the Acquisition 
                                   Agreement, the Shareholders Agreement, 
                                   the Lifeskills Education Articles, the 
                                   Loan Notes and the Service Agreements 
-------------------------------  --------------------------------------------------- 
 Management Shares                the 1,748,322 Stagecoach Shares which 
                                   are held by the Management Team (or certain 
                                   of their Connected Persons) to be sold 
                                   to Lifeskills Education pursuant to the 
                                   terms of the Acquisition Agreement 
-------------------------------  --------------------------------------------------- 
 Manager Subscribers              Richard Dawson and Manzoor Ishani 
-------------------------------  --------------------------------------------------- 
 Management Team                  Stephanie Manuel (Joint Managing Director), 
                                   Richard Dawson (Group Finance Director) 
                                   and Manzoor Ishani (Franchise Development 
                                   Director) 
-------------------------------  --------------------------------------------------- 
 Notice of the General            the notice of General Meeting dated the 
  Meeting                          date of this announcement 
-------------------------------  --------------------------------------------------- 
 Offer                            the recommended cash offer, to acquire 
                                   at the Offer Price all of the Offer Shares, 
                                   made by Lifeskills Education on the terms 
                                   and conditions to be set out in the Offer 
                                   Document and the Form of Acceptance and 
                                   including, where the context permits, 
                                   any subsequent revision, variation, extension 
                                   or renewal of such offer 
-------------------------------  --------------------------------------------------- 
 Offer Document                   the offer document to be published containing 
                                   the Offer and any subsequent document 
                                   containing the Offer 
-------------------------------  --------------------------------------------------- 
 Offer Period                     the period beginning on and including 
                                   12 March 2012 and ending on the latest 
                                   of (i) 1.00 p.m. on 2 April 2012; and 
                                   (ii) the time and date on which the Offer 
                                   becomes unconditional as to acceptances 
                                   or lapses or is withdrawn 
-------------------------------  --------------------------------------------------- 
 Offer Price                      65 pence per Offer Share 
-------------------------------  --------------------------------------------------- 
 Offer Shares                     all of the Stagecoach Shares, but excluding 
                                   the Management Shares contracted to be 
                                   acquired by Lifeskills Education under 
                                   the terms of the Acquisition Agreement 
-------------------------------  --------------------------------------------------- 
 Opening Position Disclosure      an opening position disclosure as contemplated 
                                   in Rule 8.3 (a) of the Code 
-------------------------------  --------------------------------------------------- 
 Ordinary Resolution              the ordinary resolution to be proposed 
                                   to the Independent Shareholders at the 
                                   General Meeting (or any adjournment thereof) 
                                   in accordance with the requirements of 
                                   the Code to approve on a poll the terms 
                                   of the Management Arrangements 
-------------------------------  --------------------------------------------------- 
 Overseas Shareholders            Stagecoach Shareholders who are resident 
                                   in, or nationals or citizens of, jurisdictions 
                                   outside the UK or who are nominees of, 
                                   or custodians, or trustees or guardians 
                                   for Stagecoach Shareholders who are citizens, 
                                   residents or nationals of countries other 
                                   than the UK 
-------------------------------  --------------------------------------------------- 
 Panel                            the Panel on Takeovers and Mergers 
-------------------------------  --------------------------------------------------- 
 Public Announcement              any public announcement by Stagecoach 
                                   to any Regulatory Information Service 
-------------------------------  --------------------------------------------------- 
 Regulatory Information           any of the services set out in Appendix 
  Service                          3 to the Listing Rules published by the 
                                   United Kingdom Listing Authority 
-------------------------------  --------------------------------------------------- 
 Restricted Jurisdiction          the United States, Canada, Australia, 
                                   Japan and South Africa and any other 
                                   jurisdiction where local laws or regulations 
                                   may result in a significant risk of civil, 
                                   regulatory or criminal exposure for Lifeskills 
                                   Education or Stagecoach if information 
                                   or documentation concerning the Offer 
                                   is sent or made available to Shareholders 
                                   in that jurisdiction 
-------------------------------  --------------------------------------------------- 
 Service Agreements               the amended service agreements between 
                                   Stagecoach and each of Stephanie Manuel 
                                   and Richard Dawson, the new service agreement 
                                   between Stagecoach and Manzoor Ishani 
                                   and the new consultancy agreement (and 
                                   the compromise agreement with Stagecoach) 
                                   entered into by David Sprigg and Lifeskills 
                                   Education conditionally upon the Offer 
                                   becoming or being declared unconditional 
                                   in all respects, as further described 
                                   in paragraph 4 and Appendix IV of this 
                                   announcement 
-------------------------------  --------------------------------------------------- 
 Shareholders Agreement           the shareholders agreement dated 9 March 
                                   2012 whereby Lifeskills Education, the 
                                   Investor, the Management Team and Henry 
                                   Meikle have agreed the terms of their 
                                   relationship as shareholders of Lifeskills 
                                   Education conditionally upon the Offer 
                                   becoming or being declared unconditional 
                                   in all respects 
-------------------------------  --------------------------------------------------- 
 Smith & Williamson               Smith & Williamson Corporate Finance 
                                   Limited, financial adviser to Stagecoach 
-------------------------------  --------------------------------------------------- 
 South Africa                     the republic of South Africa 
-------------------------------  --------------------------------------------------- 
 Stagecoach or Company            Stagecoach Theatre Arts Public Limited 
                                   Company a company registered in England 
                                   and Wales with number 2924719 
-------------------------------  --------------------------------------------------- 
 Stagecoach Board or Stagecoach   the board of directors of Stagecoach 
  Directors 
-------------------------------  --------------------------------------------------- 
 Stagecoach Group                 Stagecoach, its subsidiaries and subsidiary 
                                   undertakings 
-------------------------------  --------------------------------------------------- 
 Stagecoach Shareholders          holders of Stagecoach Shares 
-------------------------------  --------------------------------------------------- 
 Stagecoach Shares                the existing unconditionally allotted 
                                   or issued and fully paid ordinary shares 
                                   of 5 pence each in the capital of Stagecoach 
                                   and any such shares which are unconditionally 
                                   allotted or issued whilst the Offer remains 
                                   open for acceptance (or by such earlier 
                                   time and/or date as Stagecoach may, subject 
                                   to the Code and/or with the consent of 
                                   the Panel, determine, but not being earlier 
                                   than the date on which the Offer becomes 
                                   or is declared unconditional as to acceptances) 
-------------------------------  --------------------------------------------------- 
 United Kingdom or UK             the United Kingdom of Great Britain and 
                                   Northern Ireland 
-------------------------------  --------------------------------------------------- 
 United States or USA             the United States of America, its territories 
                                   and possessions, any state of the United 
                                   States of America, the District of Columbia 
                                   and all areas subject to its jurisdiction 
                                   or any political sub-division thereof 
-------------------------------  --------------------------------------------------- 
 Wider Stagecoach Group           Stagecoach and its subsidiaries and the 
                                   subsidiary undertakings of Stagecoach 
                                   and associated undertakings and any other 
                                   undertakings or partnership or joint 
                                   venture in which Stagecoach and/or such 
                                   undertakings (aggregating their interests) 
                                   have a Substantial Interest 
-------------------------------  ---------------------------------------------------

All references to "pounds", "GBP", "p", "pence" or "penny" are to the lawful currency of the United Kingdom.

The singular shall include the plural and vice versa, and words importing the masculine gender shall include the feminine or neutral gender.

All references to legislation are to English legislation, unless the contrary is indicated, and any reference to any provision of any legislation includes any amendment, modification, re-enactment or extension thereof.

For the purposes of this announcement, "subsidiary undertakings" "subsidiary", "associated undertaking" and "undertaking" have the meanings under the Companies Act.

All times referred to in this announcement are to London times unless otherwise specified.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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