HIT Entertainment PLC

HIT Entertainment PLC ("HIT") OFFER for Gullane Entertainment plc ("Gullane") The Offer · The Board of HIT announces the terms of an offer for the whole of the issued and to be issued share capital of Gullane. The Offer will be made by UBS Warburg on behalf of HIT. · The Offer will be made on the basis of 1.5412 new HIT Shares and 860p in cash for every 3 Gullane Shares. Based on the Closing Price of 279p per HIT Share on 24 June 2002, the last business day prior to the date of this announcement, the Offer values each Gullane Share at approximately 430p and Gullane's existing issued share capital (fully diluted assuming the exercise of all outstanding options under the Gullane Option Schemes with exercise prices at or below 430p) at approximately £139 million. · The Offer represents a premium of approximately 4 per cent. over the Closing Price of 413p per Gullane Share on 24 June 2002, the last business day prior to the date of this announcement, and a premium of approximately 13 per cent. over the Closing Price of 380p per Gullane Share on 24 May 2002, the last business day prior to the announcement by Gullane that it had received an approach which may or may not lead to an offer for the Company. · The Offer allows Gullane Shareholders the opportunity to participate in the potential upside of the Enlarged Group. In addition, Gullane Shareholders will be offered a Mix and Match Facility under which accepting Gullane Shareholders will be able, subject to availability, to elect to vary the proportions in which they receive new HIT Shares and cash consideration for their Gullane Shares. · HIT has received irrevocable undertakings, letters of intent to sign irrevocable undertakings and letters of intent to accept the Offer from Britt Allcroft and Angus Wright (co-founders of Gullane) and certain institutional shareholders in respect of a total of 16,322,066 Gullane Shares representing over 50 per cent. of the existing issued share capital of Gullane. Benefits of the Acquisition The Directors of HIT believe that the combination of HIT and Gullane has a strong strategic logic and will further strengthen HIT's position as one of the leading independent young children's entertainment studios in the world. Commenting on the Offer, Peter Orton, Chairman of HIT, said: "I am pleased to announce today our offer for Gullane. The combination of our two businesses represents an exciting opportunity which I believe will deliver significant benefits to the shareholders of the Enlarged Group. "Our offer has already secured support from over 50 per cent. of Gullane's shareholders. This follows discussions with 12 of the top shareholders, 11 of whom have given us their support, a tremendous vote of confidence in our Offer and the Enlarged Group." Britt Allcroft, co-founder of The Britt Allcroft Company plc (the previous name of Gullane) said: "Thomas the Tank Engine has become one of the most beloved characters in the world. I believe that HIT will help ensure the ongoing success of Thomas and the other properties in the Gullane portfolio. I am convinced that together HIT and Gullane can significantly enhance shareholder value and create what will truly be the world's leading independent young children's studio." This summary should be read in conjunction with the full text of the following announcement. Appendix III to the following announcement contains definitions of certain expressions used in this summary and in the following announcement. There will be an analysts' briefing at 2.30pm this afternoon at the offices of UBS Warburg, 1 Finsbury Avenue, London EC2M 2PG. PRESS ENQUIRIES: For further information contact: HIT Entertainment PLC Rob Lawes, Chief Executive Nigel Birrell, Director of Corporate Development and Acquisitions Lucinda Evans, PR Director Phone: 020 7554 2572 UBS Warburg Michael Meade Campbell Stewart Phone: 020 7567 8000 Impact Consultancy Ltd. Simon Forrest Phone: 020 7479 4770 Mobile: 07885 317 746 ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/06/25/20020625BIT00780/wkr0001.doc http://www.waymaker.net/bitonline/2002/06/25/20020625BIT00780/wkr0002.pdf