Stvg Regulatory News (STVG)

6 Nov 2007 07:01

SMG PLC06 November 2007 Embargoed for release at 7.00 a.m. 6 November 2007 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTOAUSTRALIA, CANADA, JAPAN OR THE UNITED STATES. THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS AND INVESTORS SHOULDNOT SUBSCRIBE FOR OR PURCHASE ANY SHARES REFERRED TO IN THIS ANNOUNCEMENT EXCEPTON THE BASIS OF INFORMATION IN THE PROSPECTUS TO BE PUBLISHED BY SMG PLC TODAYIN CONNECTION WITH THE PROPOSED RIGHTS ISSUE. COPIES OF THE PROSPECTUS WILL,FOLLOWING PUBLICATION, BE AVAILABLE FROM THE COMPANY'S REGISTERED OFFICE. SMG PLC PROPOSED RIGHTS ISSUE TO RAISE GROSS PROCEEDS OF £95.1 MILLION The Directors of SMG plc ("SMG" or the "Company") announce that the Companyintends, subject to the approval of certain resolutions by Shareholders, toundertake a fully underwritten Rights Issue of New Shares to raise approximately£95.1 million (before expenses), the proceeds of which will be used to reducethe outstanding debt of the Company. The Rights Issue is expected to result inthe issue of 633,850,240 New Shares (representing 200.0 per cent. of theexisting issued share capital of the Company and 66.7 per cent. of the issuedshare capital of the Company, as enlarged by the Rights Issue), on the basis of: 2 New Shares at 15 pence per New Share for each Existing Share Background • The Board has previously outlined that its immediate priority is to reduce SMG's debt burden. • SMG completed the disposal of Primesight on 30 October 2007, for cash consideration of up to £62.0 million before expenses, £52.0 million of which has been received by the Company. • The Board believes there is a need to reduce further SMG's debt burden. Rights Issue highlights • The Board believes the Rights Issue will create a more robust, appropriate and sustainable capital structure enabling SMG to run its business more efficiently, with significantly lower interest charges. • The Board also believes that the Rights Issue will: • substantially enhance SMG's financial stability through reduced debt and a strengthened capital base; • increase flexibility for SMG to dispose of its non-core assets from a position of strength so as to maximise shareholder value; and • facilitate future investment in SMG's core television businesses in accordance with its stated strategy. • Immediately following the Rights Issue, the Board intends to refinance SMG's remaining debt, expected to be approximately £40.3 million. • Going forward, the Board is committed to maintaining an efficient capital structure. Subject to this objective, the Directors intend that any net cash proceeds from the possible sale of Virgin Radio will be returned to shareholders in as tax efficient manner as possible. • The Rights Issue is expected to be accretive to the Group's earnings. Strategic objectives • The Board continues to believe that the Group's future lies in its television business, associated broadcast and new media opportunities. • The Board expects to deliver a ten per cent. reduction in controllable costs of £2.5 million for 2007 in line with the 100 day strategy plan outlined in June 2007. • The Board has also announced a further ten per cent. planned reduction in costs since then, which would reduce ongoing costs from 2008 by a further £2.5 million. Commenting, Rob Woodward, Chief Executive, SMG plc said: "The Board of SMG believes that the Rights Issue is an important step in thetransformation of the Group's balance sheet. It will significantly reduce debt,substantially decrease interest payments, allow flexibility in timing of disposals and ensure that we can now focus fully on achieving our broadcastingKPIs. Despite difficult market conditions we are on track to deliversubstantial cost savings and have targeted the reduction of our indebtedness as the next stage in transforming the business. With a much strengthened balancesheet and additional financial resources, the Directors believe that SMG willnow be well placed to maximise the opportunities available to the Group." This summary should be read in conjunction with the full text of this announcement. Appendix I sets out the expected timetable of principal events. Appendix II sets out the definitions of terms used in this announcement. Enquiries: SMG plc Tel: 020 7882 1199Rob Woodward, Chief ExecutiveGeorge Watt, Chief Financial OfficerDebbie Johnston, Head of Communications Hoare Govett Limited (Sponsor, financial adviser, corporate broker and underwriter) Tel: 020 7678 8000 Sara HaleStephen BowlerLee Morton Brunswick Group LLP Tel: 020 7404 5959James HoganSimon SporborgAsh Spiegelberg A conference call with analysts and investors will be held at 8.15a.m. (London time) today, 6 November 2007. General This announcement has been issued by, and is the sole responsibility of, SMG plc. Hoare Govett Limited, which is authorised and regulated in the UK by theFinancial Services Authority, is acting as sponsor, underwriter, broker andfinancial adviser exclusively for the Company and no one else in connection withthe Rights Issue and the admission of the New Shares to the Official List and totrading on the London Stock Exchange's main market for listed securities andwill not be responsible to anyone other than the Company for providing theprotections afforded to clients of Hoare Govett Limited or for providing advicein relation to the Rights Issue, the proposed admission to listing or trading,or any other matters referred to in this announcement. The release, publication or distribution of this announcement into certainjurisdictions other than the UK may be restricted by law and therefore personsin such jurisdictions into which this announcement is released, published ordistributed should inform themselves about and observe any such restrictions.Any failure to comply with any such restrictions may constitute a violation ofthe securities laws or regulation of such jurisdictions. A combined circular to Shareholders containing both the Notice of the EGM andthe prospectus relating to the Rights Issue (the "Prospectus") is expected to bedespatched today. The Prospectus gives further details of the Rights Issue andcontains a notice of an Extraordinary General Meeting of the Company to approvethe Rights Issue, expected to be held at 11.00a.m. on 23 November 2007 at theoffices of ABN AMRO at 250 Bishopsgate, London EC2M 4AA. The Prospectus givesfurther details of the New Shares, the Nil Paid Rights and the Fully Paid Rightsto be offered pursuant to the Rights Issue, the Company's business and theindustry in which the Company operates. This announcement is not for release, publication or distribution, directly orindirectly, in whole or in part, in or into Australia, Canada, Japan or theUnited States and does not constitute, or form part of, an offer or thesolicitation of an offer, or inducement, or invitation to subscribe for, buy,underwrite or otherwise acquire, any rights, shares or other securities, nor thesolicitation of any vote or approval in any jurisdiction, nor shall there be anysale, issue or transfer of shares in the Company in any jurisdiction incontravention of applicable law. Any offer, invitation or inducement to acquireshares in the Company will be made solely by means of the Prospectus, as updatedby any supplementary prospectuses, and any decision to keep, buy or sell sharesin the Company should be made solely on the basis of the information containedin such document(s). The securities referred to herein have not been and will not be registered underthe Securities Act and may not be sold or offered in the United States unlessregistered under the Securities Act or an applicable exemption from suchregistration. No public offering of New Shares will be made in Australia,Canada, Japan or the United States. This announcement includes forward-looking statements that are predictions of orindicate future events and future trends. These forward-looking statementsinclude all matters that are not historical facts. Undue reliance should not beplaced on forward-looking statements because they involve known and unknownrisks, uncertainties and other factors that are in many cases beyond theCompany's control. By their nature, forward-looking statements involve risks anduncertainties because they relate to events and depend on circumstances that mayor may not occur in the future. Forward-looking statements are not guarantees offuture performance, and the Company's actual results of operations, financialcondition and liquidity, and the development of the industry in which itoperates may differ materially from those made in or suggested by theforward-looking statements contained in this announcement. The cautionarystatements set forth above should be considered in connection with anysubsequent written or oral forward-looking statements that the Company, orpersons acting on its behalf, may issue. These forward-looking statements aremade as of the date of this announcement and are not intended to give anyassurances as to future results. Save as required by law or regulation, theCompany undertakes no obligation to update these forward-looking statements, andwill not publicly release any revisions it may make to these forward-lookingstatements that may result from events or circumstances arising after the dateof this announcement. No statement in this announcement is intended to be a profit forecast or toimply that the earnings of SMG for the current year or future years willnecessarily match or exceed the historical or published earnings of SMG. Embargoed for release at 7.00 a.m. 6 November 2007 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTOAUSTRALIA, CANADA, JAPAN OR THE UNITED STATES. THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS AND INVESTORS SHOULDNOT SUBSCRIBE FOR OR PURCHASE ANY SHARES REFERRED TO IN THIS ANNOUNCEMENT EXCEPTON THE BASIS OF INFORMATION IN THE PROSPECTUS TO BE PUBLISHED BY SMG PLC TODAYIN CONNECTION WITH THE PROPOSED RIGHTS ISSUE. COPIES OF THE PROSPECTUS WILL,FOLLOWING PUBLICATION, BE AVAILABLE FROM THE COMPANY'S REGISTERED OFFICE. SMG PLC PROPOSED RIGHTS ISSUE TO RAISE GROSS PROCEEDS OF £95.1 MILLION Introduction The Directors of SMG plc ("SMG" or the "Company") announce that the Companyintends, subject to the approval of certain resolutions by Shareholders, toundertake a fully underwritten Rights Issue of New Shares to raise approximately£95.1 million (before expenses), the proceeds of which will be used to reducethe outstanding debt of the Company. The Rights Issue is expected to result inthe issue of 633,850,240 New Shares (representing 200.0 per cent. of theexisting issued share capital of the Company and 66.7 per cent. of the issuedshare capital of the Company, as enlarged by the Rights Issue) on the basis of: 2 New Shares at 15 pence per New Share for each Existing Share The Rights Issue is conditional upon the approval of Shareholders which will besought at an Extraordinary General Meeting of the Company to be held at 11.00a.m. on Friday, 23 November 2007, at the offices of Hoare Govett Limited, 250Bishopsgate, London, EC2M 4AA, notice of which is set out in the Prospectus thathas been sent out to Shareholders today. Background to and reasons for the Rights Issue The Board has previously outlined that its immediate priority is to reduce SMG'sdebt burden. The Group took a significant step towards achieving this objectivewhen it completed the disposal of Primesight on 30 October 2007, forconsideration of up to £62.0 million before expenses. However, the Boardbelieves there is a need to reduce further SMG's debt burden and thus return theGroup to a sustainable capital structure. In particular, the Board believes theRights Issue will create a more robust, appropriate and sustainable capitalstructure, enabling SMG to run its business more efficiently, with significantlylower interest charges. The Board also believes that the Rights Issue will: • substantially enhance SMG's financial stability through reduced debt and a strengthened capital base; • increase flexibility for SMG to dispose of its non-core assets from a position of strength so as to maximise shareholder value; and • facilitate future investment in SMG's core businesses in accordance with its stated strategy. Accordingly, the Board believes that the Rights Issue represents an importantstep in the strengthening of the Group's balance sheet for its medium termrequirements. The Board intends to use all of the proceeds of the Rights Issueto reduce the debt outstanding under the first facility of SMG's facilityagreement. Immediately following the Rights Issue, the Board intends torefinance SMG's remaining debt, expected to be approximately £40.3 million.Going forward, the Board is committed to maintaining an efficient capitalstructure. Subject to this objective, the Directors intend that any net cashproceeds from the possible sale of Virgin Radio will be returned to shareholdersin as tax efficient manner as possible. It is expected that the Rights Issuewill be accretive to the Group's earnings. The Board continues to believe that the Group's future lies in its televisionbusiness, associated broadcast and new media opportunities, and expects todeliver a ten per cent. reduction in controllable costs of £2.5 million from2007 in line with the 100 day strategy outlined in June 2007. The Board has alsoannounced a further ten per cent. planned reduction in costs since then, whichwould reduce ongoing costs from 2008 by a further £2.5 million. Information on SMG plc SMG's current principal activities include the production and broadcasting oftelevision programmes through stv, the production and broadcasting of local andnational radio through Virgin Radio, and the sale of advertising space incinemas through Pearl & Dean, in each case in the UK. In line with the Board'sstrategy announced in June 2007, the Group is focused on stv's televisionbroadcast and production business. Virgin Radio and Pearl & Dean remainnon-core. Information on stv SMG's television division is known as stv. stv operates a broadcasting businesswhich incorporates two ITV licences - one for the north of Scotland and one forcentral Scotland. As well as providing the ITV network programming for itsaudience, the business produces and broadcasts over 15 hours per week ofdedicated Scottish programming to viewers across Scotland, including separateregional news services North Tonight and Scotland Today. stv also broadcasts avariety of non-news programmes across its network including drama, documentariesand sport. Based in Glasgow, stv also has news studios in Aberdeen, Dundee,Edinburgh and Inverness and is supported by the website www.stv.tv. stv alsooperates a television content business through SMG Productions and GingerProductions. stv has produced several peak-time dramas such as Taggart and Rebus, as well as a number of factual and children's programmes for, amongst others,BBC1, ITV, Channel 4, Sky and Virgin Media. stv also owns a "Ventures" divisionwhich offers outside broadcast, studio and post-production services to thirdparties such as Setanta Sports, Channel 4 and Sky, as well as operating stv'snew media activities. The Board is pursuing a growth strategy across all partsof its television business as outlined in the strategic plan announced in June2007. Information on Virgin Radio SMG's radio business operates under the Virgin Radio brand. Virgin Radio is oneof the UK's leading commercial radio businesses based on weekly reach, withapproximately 2.8 million regular listeners across both its analogue and digitalplatforms. Virgin Radio's principal radio station broadcasts on an analoguesignal under an AM licence nationwide and an FM licence in the London area aswell as on a number of digital platforms. In addition, Virgin Radio operatesdigital-only radio stations, including Virgin Radio Classic Rock. The radiostations are available online at www.virginradio.co.uk. Virgin Radio's principalradio station has a particularly strong following within the key advertisingdemographic of 15-44 year olds, for whom it is the leading national commercialstation by both reach (1.8 million) and share of audience (2.3 per cent.).Virgin Radio also accounts for 2.4 per cent. of total radio listening in the25-34 year old demographic. In London, Virgin Radio is the number threecommercial broadcaster in the 25-34 year old male demographic and the numberfive commercial broadcaster overall. Virgin Radio is regarded by the Board as anon-core business. Information on Pearl & Dean SMG's cinema advertising business trades as Pearl & Dean. Pearl & Dean provideson and off screen advertising opportunities to cinemas across the UK, includingVue, Reeltime, Caledonian and Apollo cinemas as well as a number of independentoperators. Pearl & Dean is currently loss-making due to guaranteed revenueobligations within its key contracts, resulting in an onerous contract provisionbeing made in the amount of £11.4 million. Pearl & Dean is regarded by the Boardas a non-core business. Information on Primesight On 30 October 2007, SMG completed the sale of Primesight to Bell Bidco, asubsidiary of funds managed by GMT Communications Partners LLP, forconsideration of up to £62.0 million before expenses, £52.0 million of which hasbeen received by the Company. These proceeds, together with the net proceeds ofthe Rights Issue, will be used to reduce SMG's outstanding debt. Summary Financial Information Year ended Year ended Year ended Six months 31 December 31 December 31 December ended 30 2004 2005 2006 June 2007 (unaudited) (audited) (audited) (unaudited) £ million* £ million £ million £ millionRevenue 201.2 210.0 191.2 88.5Operating profit 28.0 31.2 18.4 9.0Exceptional items - (3.5) (86.7) (39.6)Operating profit/(loss)after exceptional items 28.0 27.7 (68.3) (30.6) *Restated under IFRS The selected historical financial information shown above represents SMG's totalresults comprising continuing and discontinued operations, but excluding shareof associates. The selected historical financial information shown for the six months ended 30June 2007 has been prepared in accordance with the Group's IFRS accountingpolicies and has been extracted without material adjustment from SMG's publishedunaudited accounts for the six months ended 30 June 2007. The selected historical financial information shown for the 12 months ended 31December 2005 and the 12 months ended 31 December 2006 has been prepared inaccordance with the Group's IFRS accounting policies and was extracted withoutmaterial adjustment from SMG's published audited accounts for the 12 monthsended 31 December 2005 and the 12 months ended 31 December 2006, respectively. The selected historical financial information for the 12 months ended 31December 2004 was originally prepared in accordance with UK GAAP. However, theselected historical financial information for the 12 months ended 31 December2004 as shown above has been extracted without material adjustment from SMG'spublished audited accounts for the 12 months ended 31 December 2005 for whichpurposes it was restated in accordance with IFRS. Principal terms of the Rights Issue The Rights Issue is expected to realise cash proceeds of approximately £95.1million before transactional and other costs. 633,850,240 New Shares will be offered by way of rights to QualifyingShareholders on the following basis. 2 New Shares at 15 pence per New Share for each Existing Share held and registered in their name on the Record Date and so in proportion forany other number of Existing Shares then held. The Issue Price of 15 pence per New Share represents a discount of approximately47 per cent. to the mid-market closing price of 28.5 pence per Existing Share on5 November 2007, which was the last business day prior to the date of thisannouncement. The Rights Issue is expected to result in the issue of 633,850,240New Shares (representing 200.0 per cent. of the existing issued share capital ofthe Company and 66.7 per cent. of the issued share capital of the Company, asenlarged by the Rights Issue). The New Shares will, when issued and fully paid,rank equally in all respects with the Existing Shares, including the right toreceive all dividends or distributions made, paid or declared after Admission. The Rights Issue is conditional on, inter alia, the passing of the Resolutionsat the Extraordinary General Meeting without amendment (or such amendments asthe Underwriter may agree) and the Underwriting Agreement becoming unconditionalin all respects and not having been terminated in accordance with its termsprior to Admission. The Rights Issue has been fully underwritten by Hoare Govett and is conditionalupon, amongst other things: (a) the passing of the Resolutions at the EGM;(b) Admission becoming effective by not later than 8.00 a.m. on Monday 26 November 2007 (or such later time and date as the Company and Hoare Govett may agree); and(c) the Underwriting Agreement otherwise having become unconditional in all respects and not having been terminated in accordance with its terms prior to Admission. The allotment and issue of the New Shares will be made upon and subject to theterms and conditions set out in the Prospectus and, in the case of QualifyingNon-CREST Shareholders, the Provisional Allotment Letters which are expected tobe posted on Friday, 23 November 2007 to Qualifying Shareholders (other thanthose whose registered address is in Australia, Canada, Japan or the UnitedStates). Holdings of Existing Shares in certificated and uncertificated formwill be treated as separate holdings for the purpose of calculating entitlementsunder the Rights Issue. Application has been made to the Financial Services Authority and to the LondonStock Exchange for the New Shares (nil and fully paid) to be admitted to theOfficial List and to trading on the London Stock Exchange's main market forlisted securities. It is expected that Admission will become effective onMonday, 26 November 2007 and that dealings in the New Shares will commence, nilpaid, at 8.00 a.m. on that date. The Existing Shares are already admitted to CREST. No further application foradmission to CREST is required for the New Shares and all of the New Shares whenissued and fully paid may be held and transferred through CREST. Applicationshave been made for the Nil Paid Rights and the Fully Paid Rights to be admittedto CREST. Euroclear requires SMG to confirm to it that the New Shares have beenadmitted to the Official List before Euroclear will admit any security to CREST.As soon as practicable after Admission, SMG will confirm this to Euroclear. Current trading and prospects SMG announced its results for the six months ended 30 June 2007 on 28 September2007. Since 30 June 2007, the Company has continued to trade in line withmanagement's expectations. The disposal of Primesight, which was also announcedon 28 September 2007, was approved at an extraordinary general meeting of SMGShareholders on 15 October 2007, and completed on 30 October 2007. SMG hasreceived £52.0 million by way of initial consideration for the disposal. Thesefunds will be used, along with the proceeds from the Rights Issue, to reduce theGroup's outstanding debt. Dividend policy SMG recently suspended the payment of dividends. The Board will only considerrecommencing the payment of dividends when there is evidence of the success ofthe Group's turnaround plan, to the extent that the Company has sufficientdistributable reserves, and where permitted by SMG's banking arrangements. SMG Share Schemes The remuneration committee of the Board has the power to adjust outstandingoptions and awards in accordance with the rules of the SMG Share Schemes andintends to discuss appropriate adjustments to take account of the Rights Issue.Participants will be notified of any proposed adjustments in due course. Furtherinformation will be provided to participants in the SMG Buy! & Match! Share Planabout how they can participate in the Rights Issue in due course. Irrevocable undertakings to vote at the EGM and to take up rights in the RightsIssue All of the Directors of SMG plc who hold shares in the Company have irrevocablyundertaken to vote in favour of the resolutions proposed at the EGM to be heldon Friday, 23 November 2007 and to take up their rights to New Shares in theRights Issue in respect of their entire beneficial holdings, which, at the dateof this announcement, amount to, in aggregate, 0.10 per cent. of the issuedshare capital of SMG. Overseas shareholders In accordance with section 90(5) of the Act, the offer by way of rights toQualifying Shareholders who have no registered address within the UK and whohave not given the Company an address within the UK for the service of noticeswill be made by the Company publishing a notice in the London Gazette on thebusiness day following the date on which the Provisional Allotment Letters aredespatched, stating where copies of the Prospectus and Provisional AllotmentLetters may be inspected or, in certain circumstances, be obtained on personalapplication by or on behalf of such Qualifying Shareholders. Such QualifyingShareholders may be able to participate in the Rights Issue if they satisfythemselves that, and in the case of those Qualifying Shareholders withregistered addresses in, or residents of Australia, Canada, Japan or the UnitedStates, they are able to prove to the Company or its agents that, the receipt,or acceptance, of the offer in such jurisdiction will not breach localsecurities laws. If a Qualifying Shareholder with a registered address in, orresident in, Australia, Canada, Japan or the United States, can prove this tothe satisfaction of the Company, then the Company at its absolute discretion mayarrange for him to be sent a Provisional Allotment Letter whether he is aQualifying non-CREST Shareholder or Qualifying CREST Shareholder. Prospectus, Provisional Allotment Letters and Extraordinary General Meeting A combined circular to Shareholders relating to the EGM and prospectus relatingto the Rights Issue (the "Prospectus") is expected to be despatched today. TheProspectus gives further details of the New Shares, the Nil Paid Rights and theFully Paid Rights to be offered pursuant to the Rights Issue, the Company'sbusiness and the industry in which the Company operates. The Prospectus alsocontains a notice of an Extraordinary General Meeting of the Company to approvethe Rights Issue, expected to be held at 11.00a.m. on Friday, 23 November 2007at the offices of Hoare Govett at 250 Bishopsgate, London EC2M 4AA. Appendix I Expected timetable for the Rights Issue 2007 Announcement of Rights Issue Tuesday, 6 November Publication of Prospectus Tuesday, 6 November Record Date for entitlements under the Rights Issue 5.00 p.m. on Tuesday, 20 November Latest time and date for receipt of Forms of Proxy 11.00 a.m. on Wednesday, 21 November Latest time and date for receipt of electronic proxy appointments 11.00 a.m. on Wednesday, 21 November via the CREST system Extraordinary General Meeting 11.00 a.m. on Friday, 23 November Despatch of Provisional Allotment Letters (to Qualifying non-CREST Friday, 23 NovemberShareholders only) Dealings in New Shares, nil paid, commence on the London Stock 8.00 a.m. on Monday, 26 NovemberExchange Existing Shares marked "ex-rights" by the London Stock Exchange 8.00 a.m. on Monday, 26 November Nil Paid Rights credited to stock accounts in CREST (Qualifying 8.00 a.m. on Monday, 26 NovemberCREST Shareholders only) Recommended latest time for requesting withdrawal of Nil Paid 4.30 p.m. on Monday, 10 DecemberRights or Fully Paid Rights from CREST (i.e. if your Nil Paid Rights or Fully Paid Rights are in CREST and you wish to convert them into certificated form) Latest time and date for depositing renounced Provisional 3.00 p.m. on Thursday, 13 DecemberAllotment Letters, nil paid or fully paid, into CREST or for dematerialising Nil Paid Rights or Fully Paid Rights into a CREST stock account Latest time and date for splitting Provisional Allotment Letters, 3.00 p.m. on Friday, 14 Decembernil paid or fully paid Latest time and date for acceptance and payment in full and 11.00 a.m. on Tuesday, 18 Decemberregistration of renounced Provisional Allotment Letters Dealings in New Shares, fully paid, commence on the London Stock 8.00 a.m. on Wednesday, 19 DecemberExchange and New Shares credited to CREST stock accounts (uncertificated holders only) Despatch of definitive share certificate for New Shares in by Friday, 21 Decembercertificated form (certificated holders only) Notes: (i) Each of the times and dates set out in the above timetable and mentioned in this announcement and the Provisional Allotment Letter is subject to change by the Company (with the agreement of Hoare Govett), in which event details of the new times and dates will be notified to the Financial Services Authority and, where appropriate, to Shareholders. (ii) References to times in this announcement are to London time. (iii) If you have any queries about the Rights Issue or on the procedure for acceptance and payment you should contact Capita Registrars, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, on 0870 162 3121 or, from outside the UK, +44 20 8639 339. The helpline is available between the hours of 9.00 a.m. and 5.00 p.m. Monday to Friday excluding Public Holidays. For legal reasons the shareholder helpline will not be able to provide advice on the merits of the Rights Issue or to provide financial, tax or investment advice. Appendix II The definitions set out below apply throughout this announcement, unless thecontext requires otherwise. "Admission" the admission of the New Shares to the Official List and to trading on the London Stock Exchange's main market for listed securities; "Board" or the board of directors of the Company;"Directors" "certificated" not in uncertificated form;or "incertificatedform" "Company" or SMG plc;"SMG" "CREST" the relevant system (as defined in the Regulations) for the paperless settlement of trades in listed securities in the United Kingdom, of which Euroclear is the operator (as defined in the Regulations); "EGM" or the extraordinary general meeting of SMG to be held at the"Extraordinary offices of Hoare Govett Limited, 250 Bishopsgate, London, EC2MGeneral 4AA at 11.00 a.m. on Friday, 23 November 2007;Meeting" "Euroclear" Euroclear UK and Ireland Limited; "Existing the Ordinary Shares in issue prior to completion of the RightsShares" Issue; "FSMA" the Financial Services and Markets Act 2000, as amended; "Financial the Financial Services Authority of the UK acting in its capacityServices as the competent authority for the purposes of Part VI of theAuthority" or FSMA and in the exercise of its functions in respect of the"FSA" admission to the Official List otherwise than in accordance with Part VI of the FSMA; "Fully Paid rights to subscribe for the New Shares, fully paid;Rights" "Group" SMG plc and its consolidated subsidiaries and subsidiary undertakings from time to time; "IFRS" the International Financial Reporting Standards, as adopted by the European Union; "Issue Price" the price at which each New Share is to be issued under the Rights Issue; "Hoare Govett" Hoare Govett Limited; "London Stock London Stock Exchange plc;Exchange" "New Shares" new Ordinary Shares to be allotted and issued pursuant to the Rights Issue; "Nil Paid rights to subscribe for New Shares, nil paid, provisionallyRights" allotted to Qualifying Shareholders' pursuant to the Rights Issue; "Notice" the notice of the EGM set out at the end of the Prospectus; "Official the Official List of the FSA;List" "Ordinary the ordinary shares of 2.5 pence each in the capital of theShares" Company; "Primesight" SMG's outdoor advertising business, the disposal of which was completed on 30 October 2007; "Prospectus" the combined circular to Shareholders relating to the EGM and prospectus relating to the Rights Issue expected to be despatched today 6 November 2007; "Provisional the renounceable provisional allotment letters representing NilAllotment Paid Rights or Fully Paid Rights to be sent to QualifyingLetters" Non-CREST Shareholders (other than, subject to certain exceptions, Qualifying Shareholders with a registered address in Australia, Canada, Japan or the United States); "Qualifying Qualifying Shareholders holding Existing Shares in uncertificatedCREST form;Shareholders" "Qualifying Qualifying Shareholders holding Existing Shares in certificatednon-CREST form;Shareholders" "Qualifying holders of Existing Shares on the register of members of theShareholders" Company at the close of business on the Record Date; "Record Date" 5.00 p.m. on Tuesday, 20 November 2007; "Regulations" the Uncertificated Securities Regulations 2001 (SI2001/3755), as amended; "Resolutions" the resolutions set out in the Notice; "Rights Issue" the proposed issue by way of rights of 633,850,240 New Shares to Qualifying Shareholders on the terms and subject to the conditions to be set out in the Prospectus and, in the case of Qualifying Non-CREST Shareholders only, in the Provisional Allotment Letters; "Securities the United States Securities Act of 1933, as amended;Act" "Shareholders" the holders of Ordinary Shares in the capital of the Company; "SMG Share the SMG plc 2005 Executive Long Term Incentive Plan, the SMG plcSchemes" Performance Share Plan, the SMG plc Company Share Option Plan, the SMG plc Executive Share Option Scheme, the SMG plc Sharesave Scheme, the SMG plc Buy! & Match! Share Plan and the SMG plc Loyalty and Service Scheme; "Sponsor" Hoare Govett Limited; "United the United Kingdom of Great Britain and Northern Ireland;Kingdom" or"UK" "United the United States of America its territories and possessions, anyStates" or state of the US and the District of Columbia;"US" "UK GAAP" accounting principles generally accepted in the UK; "Underwriter" Hoare Govett Limited; and "Underwriting the underwriting agreement entered into between the Company andAgreement" the Underwriter. This information is provided by RNS The company news service from the London Stock Exchange