Lms Capital Regulatory News (LMS)

9 May 2014

LMS Capital plc

Third Tender Offer

LMS Capital plc ("LMS Capital" or the "Company") today announces a tender offer to return up to £40 million to Shareholders (the "Tender Offer"). The Tender Offer is the third tender offer made since the approval of the Company's realisation strategy in November 2011 and will, if approved, bring to £115 million the total returned to Shareholders since the commencement of that strategy.

A circular containing details of the Tender Offer and containing the Notice of General Meeting will be sent to Shareholders later today (the "Circular"). Capitalised terms used and not defined in this announcement have the meaning given to them in the Circular.

Tender Offer

The Tender Offer is available to Shareholders (other than certain overseas Shareholders) on the register as at the close of business on 22 May 2014. Shareholders may tender more, equal to or less than their Basic Entitlement, though tenders in excess of a Shareholder's Basic Entitlement will only be accepted to the extent that other Shareholders tender less than their Basic Entitlement and will be satisfied on a pro rata basis (after taking into account any adjustments which may be required to ensure no increase in the Concert Party's aggregate shareholding following implementation of the Tender Offer (as described in more detail below)).

The Tender Offer Price will be calculated on 27 May 2014 based on the published unaudited net asset value of the Company as at 31 March 2014 adjusted, in a manner consistent with the Company's accounting policies, to take into account price movements in quoted investments, changes in foreign currency rates of exchange and purchases and sales of investments between 31 March 2014 and the close of business on 26 May 2014.

The Tender Offer Price will be calculated by dividing this adjusted net asset value by the number of Ordinary Shares in issue at the close of business on 26 May 2014.

Arrangement with WTC

Robert Rayne, a current non-executive director of the Company, together with members of the extended Rayne family and associated trusts constitute a 'Concert Party' for the purposes of the City Code on Takeovers and Mergers (the "Code"). Given the voluntary nature of the Tender Offer, it is possible that the aggregate holding of the Concert Party in the share capital of the Company (currently 35.77%) could increase in the event that not all Shareholders tender their Basic Entitlement. Under Rule 9 of the Code, were the Concert Party's aggregate holding to increase, it would be required to make an offer for all of the ordinary shares in the Company that it does not already own.

As a contingency measure against these circumstances arising, the trustees of a member of the Concert Party ("WTC"), who hold a 12.4% interest in the share capital of the Company, have today irrevocably undertaken to the Company that WTC will tender its Basic Entitlement and, in addition, apply to tender for such number of shares as is necessary so that the aggregate holding of the Concert Party does not increase as a result of the implementation of the Tender Offer.

No fee is payable by the Company to WTC in respect of this arrangement and the arrangement does not affect the entitlement of any other Shareholder to tender its Basic Entitlement under the Tender Offer. If WTC is required to tender shares above its Basic Entitlement, these additional shares will be accepted for tender and repurchase before determining to what extent the excess applications of other Shareholders can be satisfied.

The above arrangement with WTC, which was put in place, on the same terms, for the tender offers made by the Company in November 2012 and July 2013, requires Shareholder approval under the Listing Rules as it is classified as a "related party transaction". On previous occasions, the arrangement was classified as a "smaller related party transaction" and did not, therefore, require Shareholder approval but, due to the reduced overall net asset value and market capitalisation of the Company (reflecting the progression of the Company's realisation strategy), the thresholds prescribed by the Listing Rules for classifying related party transactions have, on this occasion, been exceeded.

General Meeting

A General Meeting will be held at 10.00 a.m. on Tuesday 27 May 2014 at LMS Capital plc, 100 George Street, London W1U 8NU to seek the Shareholder approval for: (1) the repurchase to be carried out by the Company in connection with the Tender Offer; and (2) the arrangement with WTC in connection with the Tender Offer as described above. Resolution 1 will be proposed as a special resolution and Resolution 2 will be proposed as an ordinary resolution.

The implementation of the Tender Offer is conditional on the passing of both of these resolutions. If such approval is obtained at the General Meeting, the Tender Offer is expected to take place on 28 May 2014. Full details of the Tender Offer timetable, mechanics and settlement procedure are set out in the Circular.

The timetable of the Tender Offer is summarised below:

For further information please contact:

LMS Capital plc 020 7935 3555

Nick Friedlos, Executive Director

Tony Sweet, Chief Financial Officer

J.P. Morgan Cazenove 020 7742 4000

Michael Wentworth-Stanley

MHP Communications 020 3128 8100

Tim McCall

Katie Hunt