LMS Capital : Increase in Tender Offer

27 June 2017

LMS Capital plc (the "Company")

Increase in tender offer from £6 million to £11 million

On 6 June 2017 the Board announced that the Company intended to make a tender offer of £6 million to shareholders, being the first of two further tender offers proposed by the Company in its July 2016 Circular.

On 15 June 2017 the Board announced that the Company had been informed by the general partner of San Francisco Equity Partners ("SFEP"), that it would shortly receive a distribution, in the region of $11 million to $12 million, following the partial realisation by SFEP of its holdings in YesTo.

The Board now announces:

· The Company has received the distribution from SFEP, the final amount of which was $11.6 million;

· In light of this significant increase in liquid resources, the Board considered whether it was able to increase the amount of the tender previously announced on 6 June 2017. The Board determined that the tender should be increased to £11 million, thereby satisfying in full the proposals in the July 2016 Circular to return this amount to shareholders.

It is the Company's intention that the tender offer be launched at the same time as, or shortly after, the Company announces its 30 June 2017 results. In accordance with the July 2016 Circular, the tender offer price will be determined by reference to a 5 per cent discount to the 30 June 2017 net asset value reported in those results.

The tender offer, once completed, will bring to £17 million the amount returned to shareholders since the Company's July 2016 Circular when Gresham House Asset Management was appointed to manage the Company's portfolio. This final tender offer will bring the total amount returned to shareholders to £172 million since the Company commenced its realisation policy in January 2012, at which time the market capitalisation was approximately £153 million.

Future investment

Following changes to the Company's investment policy approved by shareholders in August 2016, LMS focuses predominantly on private equity investment and specialist asset classes.

The Investment Committee will continue to oversee the remaining assets, to determine how best to maximise shareholder value, and at the same time oversee the implementation of the new investment policy. Following completion of the tender offer announced above, the Company will have met in full its proposals to make further returns of cash to shareholders and will be well placed to progress the implementation of its new investment policy. In future, it is the intention of the Company to return to shareholders an amount in the region of 30 per cent of annual realised cash profits from investments made pursuant to the new investment policy and in doing so, to generate a dividend yield over the longer term.

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

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