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Proposed cancellation of Ordinary Shares from the Official List, Admission to trading on AIM and Notice of General Meeting

As previously announced in Harvey Nash Group plc's ("Harvey Nash" or the "Company") preliminary results on 27 April 2017, the Board is proposing to cancel admission of the Company's Ordinary Shares to the premium segment of the Official List and to trading on the London Stock Exchange's Main Market for listed securities ("Cancellation") and apply for the admission of the Company's Ordinary Shares to trading on AIM ("Admission"). A circular to Shareholders (the "Circular") is expected to be posted later today containing details of the proposed Cancellation and Admission.

Under the Listing Rules, the Cancellation requires the prior approval of a resolution (the "Resolution") by Shareholders in General Meeting, passed by not less than 75 per cent. of those Shareholders who vote in person or by proxy. If approved by Shareholders, it is anticipated that the effective date of the Cancellation and Admission will be 28 July 2017, being not less than 20 business days from the passing of the Resolution.

The Circular contains a notice convening a General Meeting of Shareholders to be held at the offices of Travers Smith LLP at 10 Snow Hill, London, EC1A 2AL on 29 June 2017 at 10.00 a.m at which the Resolution will be proposed as special resolution to approve the Cancellation and Admission.

The Circular will be made available shortly on the Company's website at www.harveynash.com/group/investors/ and will be submitted to the National Storage Mechanism where it will shortly be available to view at www.morningstar.co.uk/uk/nsm.

For further information please contact:

Harvey Nash Group plc Tel: 020 7333 2635
Albert Ellis, CEO
Mark Garratt, CFO

Panmure Gordon (UK) Limited Tel: 020 7886 2500
Ben Thorne / Andrew Potts / Peter Steel (Corporate Finance)
Erik Anderson (Corporate Broking)

Hudson Sandler Tel: 020 7796 4133
Hattie O'Reilly
Fern Duncan


Unless otherwise stated, capitalised terms in this announcement have the same meaning as in the Circular.

Appendix 1 - Expected timetable of key events

Publication of this document 5 June 2017
Latest time and date for receipt of Forms of Proxy 10.00 a.m. 27 June 2017
Time and date of General Meeting 10.00 a.m. 29 June 2017
Last day of dealings in the Ordinary Shares on the Main Market 27 July 2017
Cancellation of the listing of the Ordinary Shares from the Official List effective 8.00 a.m. 28 July 2017
Admission of Ordinary Shares to trading on AIM effective 8.00 a.m. 28 July2017

Appendix 2 - Extracts from the Circular

Background to and reasons for Cancellation and Admission

As announced in the Company's preliminary results statement on 27 April 2017, the Executive Directors recently completed a comprehensive long-term strategic review in response to the range of political and economic challenges internationally and the changing information technology landscape as they impact Harvey Nash's main operations, being the provision of executive search, professional recruitment, software development, outsourcing and business process solutions services. This has resulted in a clear plan to develop the business and grow shareholder value by increasing the Company's focus on technology staffing and by investment in selected geographies through both organic and acquisitive means.

The Board believes, in this regard, that AIM will provide an environment more suited to the Group's current size and strategic intent to enhance shareholder value by organic growth and acquisitive activity. The Group's administrative and regulatory requirements will be simplified following Admission and enable the Group to execute strategic acquisitions more efficiently.

The Board believes that a transfer to AIM has the benefit of lower transactional costs, lower ongoing costs and simpler administration and regulatory requirements more appropriate to a company of Harvey Nash's size, which will facilitate implementation of the Company's plans for the next stage of its growth and will enable the strategy to be executed in a more efficient manner.

In particular, the Board believes that a transfer to AIM will offer greater flexibility to supplement organic growth with complementary acquisitions since, as described in further detail in the Circular, larger corporate transactions can be executed more quickly and cost effectively compared with the regulatory requirements of companies with shares listed on the premium segment of the Official List such as Harvey Nash. The Board believes that this is likely to be of benefit to the Company and Shareholders going forward.

AIM, which is operated and regulated by the London Stock Exchange, has an established reputation with investors and analysts and is an internationally recognised market. It was launched in June 1995 as the London Stock Exchange's market specifically designed for smaller companies, with a more flexible regulatory regime.

If the Cancellation is approved by Shareholders, the Board intends to operate the Company's business, including its reporting and governance, in substantially the same manner and with the same objectives as at present. Thus, the Board sees the Company as being attractive to specialist institutional investors while the AIM tax regime, referred to in more detail below, will also make the Company potentially attractive to AIM specific funds as well as to retail investors.

For these reasons, the Board considers that it is in the Company's interests to seek approval to effect the Cancellation. However, Shareholders should note that following the Cancellation becoming effective:

• The regulatory regime which applies solely to companies such as Harvey Nash with shares admitted to the premium segment of the Official List and to trading on the London Stock Exchange's Main Market for listed securities will no longer apply, including the requirement for shareholder approval under the Listing Rules to approve transactions above a certain size not in the ordinary course of business or with related parties. Further details regarding certain aspects of the regulatory regime that would no longer apply to such transactions are provided in the Circular.

• The Cancellation might have either positive or negative taxation consequences for Shareholders. Since 5 August 2013, shares traded on AIM can be held in ISAs and, with effect from 28 April 2014, stamp duty and stamp duty reserve tax (SDRT) on transfers of shares listed on AIM has been abolished. Individuals who hold Ordinary Shares following Admission may, after two years, also be eligible for certain inheritance tax benefits. Further details on taxation consequences are provided in the Circular.

• The Cancellation may have implications for Shareholders holding Ordinary Shares in a Self-Invested Personal Pension (SIPP). For example, shares in unlisted companies may not qualify for certain SIPPs under the terms of that SIPP and, if in any doubt, Shareholders should consult with their SIPP provider immediately. Following Admission, the Company will be categorised as unlisted.

Details of the Cancellation and Admission

Conditional upon the Resolution being approved at the General Meeting, the Company will apply to (i) cancel the listing of the Ordinary Shares on the Official List and their admission to trading on the London Stock Exchange's Main Market for listed securities; and (ii) the London Stock Exchange for the admission of the Ordinary Shares to trading on AIM. It is anticipated that the last day of dealings of the Ordinary Shares on the Main Market will be 27 July 2017. Cancellation of the listing of the Ordinary Shares on the Official List is expected to take effect at 8.00 a.m. on 28 July 2017, being not less than 20 Business Days from the passing of the Resolution.

Admission is expected to take place and dealings in Ordinary Shares are expected to commence on AIM at 8.00 a.m. on 28 July 2017.

As the Company's Ordinary Shares have been listed on the Official List for more than 18 months, the AIM Rules do not require an admission document to be published by the Company in connection with Admission. However, subject to the passing of the Resolution at the General Meeting, the Company will publish an announcement which complies with the requirements of Schedule One to the AIM Rules, comprising information required to be disclosed by companies transferring their securities from the Official List, as an AIM Designated Market, to AIM.

Following Cancellation and Admission, Ordinary Shares that are held in uncertificated form will continue to be held and dealt through CREST. Share certificates representing those Ordinary Shares held in certificated form will continue to be valid and no new Ordinary Share certificates will be issued.

In accordance with the Listing Rules, the Resolution is subject to approval being obtained from not less than 75 per cent. of all Shareholders voting in person or by proxy. If the requisite percentage of Shareholders does not approve the Resolution, the Ordinary Shares will not be admitted to AIM and will continue to be admitted to the premium segment of the Official List and to trading on the Main Market for listed securities of the London Stock Exchange.
Implications of the transfer to AIM
Following Admission, the Company will be subject to the regulatory and disciplinary controls of the AIM Rules. AIM is a market designed primarily for emerging or smaller companies to which a higher investment risk tends to be attached than to larger or more established companies. Shareholders should note that the protections afforded to investors in AIM companies are less rigorous than those afforded to investors in companies such as Harvey Nash listed on the premium segment of the Official List. Under the AIM Rules, a Nominated Adviser and broker is required to be engaged by the Company at all times and a Nominated Adviser has ongoing responsibilities to both the Company and to the London Stock Exchange. Conditional on Admission, the Company has appointed Panmure Gordon as its Nominated Adviser and broker. The obligations of a company whose shares are traded on AIM are broadly similar to those of companies such as Harvey Nash whose shares are listed on the premium segment of the Official List, however there are certain exceptions, including those referred to in the Circular.


Outlook and current trading
The following was included in the Company's final results announcement on 27 April 2017 in relation to outlook and current trading:
"With 80% of the Group's clients, services and skills in the technology and digital sector the Group is now well positioned for growth.
We have a clear strategy to grow the business and our vision is to be Europe's market leading technology and digital talent provider with challenger businesses in the US and Asia.
During the year management took actions to streamline the business, the benefits of which should be realised in the coming year.
Our plan for growing the business and increasing shareholder value is by capitalising on our strong market positions and investing in selected geographies through both organic and acquisitive means.
We have a strong balance sheet, a dedicated and skilled management team and the growth in the use of technology is set to continue. Despite market uncertainties, the Group is well positioned with a clear strategy that underpins future growth. With the benefits from the actions taken, we are confident of driving profitable growth in the year to January 2018, whilst remaining flexible in response to changes in market conditions. The current financial year has started well, with performance marginally ahead of expectations."
For the avoidance of doubt, the statement "confident of driving profitable growth" was made in reference to the Group's strategy to seek to secure further revenues that the Group will target to deliver positive gross profit. This statement should not be considered to be a forecast of an increase in the profit before tax for the year ending 31 January 2018.
Recommendation
The Board considers the terms of the Proposal to be in the best interests of the Company and its Shareholders as a whole. Accordingly, the Board recommends that you vote in favour of the Resolution to be proposed at the General Meeting, as the Directors intend to do in respect of their own beneficial holdings amounting, in aggregate, to 1,113,107 Ordinary Shares and representing approximately 1.5 per cent. of the Company's issued share capital.