Lms Capital Regulatory News (LMS)

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FOR IMMEDIATE RELEASE

17 October 2011

Announcement re LMS Capital plc (the "Company")

Further to its announcement on 10 October, the Concert Party reiterates its firm belief that an orderly realisation strategy is in the best interests of the Company's shareholders as a whole.

Mr Rayne told the board in September that he would step down as chairman once a capital realisation strategy had been put in place. He has every intention of doing this. He intends, however, to remain a director. The Concert Party is convinced that Mr Rayne's continued involvement as a director would be in the interests of all shareholders.

·; Mr. Rayne has a unique knowledge of the Company's assets, built up over his forty year involvement.

·; As was recognised by the board at the time of his appointment as chairman, Mr. Rayne provides invaluable access to the advisory boards of a number of funds in which the Company is invested. These relationships are critical to value maximisation under the new strategy being proposed.

·; Mr Rayne has consistently advocated the new strategy now being proposed by the Company, and is committed to its implementation.

·; The Concert Party owns approximately 37 % of the Company's ordinary shares. The Concert Party's only objective is to maximise value for all shareholders. The Concert Party believes that it should have some limited shareholder representation on the board so that its voice can be heard alongside those non-executives with very little economic interest in the outcome.

The Concert Party has requisitioned a general meeting of the Company so that all shareholders can consider and vote on the detailed aspects of the Concert Party's capital distribution strategy as well as confirm their support for Mr Rayne. The Concert Party notes the Company's own proposal to call a general meeting to propose a change in the Company's investment strategy, but it is concerned to ensure that the correct matters are put to shareholders for consideration.

The Concert Party notes that three of the independent non-executive directors have stated their intention to resign if the objectives outlined in the Company's announcement of 10 October are not achieved. The Concert Party is confident that suitable independent directors can be found as replacements as well as a new chairman.

Commenting, Robert Rayne said:

"The Concert Party owns approximately 37% of LMS. Its only objective is the maximisation of value for all shareholders equally. I have offered to stand down as Chairman so that a suitably qualified independent Chairman may be brought in to oversee the orderly wind down strategy. As a non-executive director, I will be available to help the Board through my longstanding relationships with fund advisers and investee companies. I believe this arrangement will be in the best interests of all shareholders with the aim of maximising value with minimum further disruption."

NOTES

1. The Concert Party's requisition requires that members be asked to vote on whether they agree that the Company should:

(i) distribute surplus cash periodically to shareholders in a tax efficient manner with due regard to shareholders' tax circumstances;

(ii) manage its affairs such that existing capital commitments are ultimately eliminated;

(iii) pursue a policy of asset realisation with a view to returning capital to members over as short a time period as practicable, having due regard to the maximisation of shareholder value;

(iv) refrain from committing capital to any new investments; and

(v) give the board discretion to make additional investments in existing assets in order to protect shareholder value.

In addition, the requisition also requires that members be asked to vote on whether they agree that Mr Rayne should remain on the board as a director of the Company.

2. The Concert Party comprises Withers Trust Corporation, Robert Rayne, the Chairman of the Company, certain members of his family and related trusts and other shareholders of the Company, who together represent approximately 37% of the Company's shares.

ENDS

Enquiries

N.M. Rothschild & Sons Limited ("Rothschild"), which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for the Concert Party and for no one else in connection with the subject matter of this announcement and will not be responsible to anyone other than the Concert Party for providing the protections afforded to its clients or for providing advice in connection with the subject matter of this announcement.