Disposal of Primesight

SMG PLC
31 August 2007


                                    SMG PLC


FOR IMMEDIATE RELEASE 31 August 2007



                        PROPOSED DISPOSAL OF PRIMESIGHT
             TO GMT COMMUNICATIONS PARTNERS FOR UP TO £62.0 MILLION



                                   Highlights


  • Proposed sale of Primesight Limited ('Primesight') to GMT Communications
    Partners ('GMT'), a leading and long established provider of private equity
    for mid-market European buyouts in the media and telecoms sectors, for a
    total consideration of up to £62.0 million:

-             Total consideration made up of:

        •     £52.0 million payable in cash on Completion; and

        •     a loan note of £5.0 million, payable at the earlier of five
              years from Completion or an exit of the business by GMT; and

        •     a further loan note payable on a pro rata basis of up to £5.0
              million, contingent upon Primesight achieving agreed target 
              profits for the financial year ending 31 December 2007, also 
              payable at the earlier of five years from Completion or an exit of 
              the business by GMT

-             £1.4 million of the cash proceeds to be placed in a retention
              account for use by GMT in relation to certain planning consents 
              currently being sought by Primesight, offset by a £0.8 million 
              payment to SMG at Completion in respect of expected surplus 
              working capital in Primesight

-             Valuation achieved represents a clear uplift on indicative offers
              received prior to suspension of the Primesight disposal process 
              in April

-             Proceeds to be used to reduce Group indebtedness

-             Disposal subject to shareholder approval at an extraordinary
              general meeting to be convened in due course

   • Irrevocable undertakings to vote in favour of the Disposal have been
    received from the Board and Hanover Investors Management LLP, which together
    account for approximately 12.9 per cent. of the voting rights attaching to
    the ordinary share capital of SMG

   • In connection with the Disposal and the associated repayment of some of
    its debt, SMG is in discussions with its banks regarding appropriate debt
    facilities for the Continuing Group

   • SMG confirms that its television and cinema advertising divisions and
    Virgin Radio continue to trade in line with the Board's expectations for the
    current financial year. A further update on current trading will be included
    in SMG's interim results for the six months ended 30 June 2007 to be
    announced on 18 September 2007

Commenting on the proposed disposal, Rob Woodward, Chief Executive of SMG, said:


'This is a good price for the business and clearly ahead of where we were in the
previous sale process. This is a strong example of the new Board delivering on
its promises. The proceeds of the sale will strengthen SMG's balance sheet while
freeing the management team to concentrate on the turnaround of the television
business and the disposal of our other non core businesses.'




Enquiries:

SMG PLC 020 7882 1199
Rob Woodward, Group Chief Executive
George Watt, Group Finance Director
Debbie Johnston, Head of Communications

Hawkpoint Partners Limited 020 7665 4500
Simon Gluckstein
Emily Ashwell

Hoare Govett Limited 020 7678 8000
Sara Hale
Harry Nicholas

Brunswick Group LLP 020 7404 5959
James Hogan
Simon Sporborg
Ash Spiegelberg

Equus Group (for GMT) 020 7223 1100
Piers Hooper
James Sumpster


This summary should be read in conjunction with the full text of the following
announcement.

Hawkpoint Partners Limited, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively for SMG and
for no one else in relation to the Disposal and is not advising any other person
and accordingly will not be responsible to anyone other than SMG for providing
the protections afforded to the customers of Hawkpoint Partners Limited or for
providing advice in relation to the Disposal.


                                    SMG PLC



FOR IMMEDIATE RELEASE 31 August 2007



                        PROPOSED DISPOSAL OF PRIMESIGHT
             TO GMT COMMUNICATIONS PARTNERS FOR UP TO £62.0 MILLION


Introduction

SMG PLC ('SMG') today announces that it has conditionally agreed to sell its
outdoor advertising operations, comprising Primesight Limited ('Primesight') and
its subsidiaries, for a total consideration of up to £62.0 million, subject to
the terms and conditions of the Disposal Agreement, to GMT Communications
Partners ('GMT'), a leading and long established provider of private equity for
mid-market European buyouts in the media and telecoms sectors. The Disposal is
conditional upon approval by SMG Shareholders and a circular containing a notice
convening an extraordinary general meeting, at which a resolution to approve the
Disposal will be proposed, will be sent to Shareholders in due course.

Background to and reasons for the Disposal

SMG's Board firmly believes that the SMG Group's future lies in its television
business. The disposal of non-core assets, including Primesight, will result in
a television business focussed on being the broadcaster of choice in Scotland.

The Board has previously outlined that the immediate objective is to reduce debt
through the sale of its non-core assets. Having reviewed the SMG Group's
businesses, the Board believes that, while Primesight is an excellent
advertising business, it is no longer core to the Group.

The disposal of Primesight had, in April 2007, been suspended as the Board was
of the view that prices being offered at that time were too low. The Board has
been able since then to demonstrate the inherent quality in the Primesight
business to prospective bidders and this has resulted in a higher total
valuation.

The disposal of Primesight will enable SMG both to reduce debt and to focus
further on its television business.

Information on Primesight

Primesight owns and markets a portfolio of outdoor media products across the UK.
Primesight's products include small and large format advertising display panels
on major roads and display panels at locations such as cinemas, health clubs and
retail outlets and on the Glasgow underground network.

Primesight owns approximately 13,500 smaller format 'six sheet' outdoor
advertising panels across the UK and a further 132 large format 'backlight'
panels principally in the London area.

In its audited accounts for the year ended 31 December 2006, SMG reported
segmental information for Primesight with revenues of £23.3 million and EBITA
(earnings before interest, tax and amortisation of intangible assets) of
£4.5 million. As extracted from the consolidation schedules which support the
consolidated audited financial statements of SMG for the year ended 31 December
2006, at 31 December 2006, Primesight had gross assets and net assets of £61.7
million and £40.5 million respectively.

Information on GMT

GMT is Europe's leading and longest established provider of private equity for
mid-market European buyouts in the media and telecoms sectors, with a 15-year
track record of making successful investments and realisations. GMT was
established in 1992, under the name Baring Communications Equity Limited, as
Europe's first media and telecoms dedicated private equity firm.

Over the past 15 years, GMT has invested in 26 companies in 18 countries and
completed over 100 transactions, exclusively in European media/communications,
with a gross enterprise value of €3.2 billion.

Recent GMT deals include:

   • July 2007: acquisition of Melita Cable, the leading provider of
    television, broadband and telephony services in Malta, from Nasdaq listed
    Liberty Global and the Gasan Group of Companies
   • May 2007: acquisition of Springer's construction information division,
    through Docu Group, a GMT portfolio company
   • April 2007: sale of Invitel, Hungary's second largest fixed line
    telecoms operator, to HTCC for €470 million
   • July 2006: acquisition of Suomen Asiakastieto Oy, the leading business
    and credit information company in Finland

Selected past and current GMT investments include YBR Group (European yellow
pages publisher), Redext (the fourth largest Spanish outdoor advertising
operator) and Equipamientos Urbanos ('EUSA', the Spanish outdoor advertising
company).

Principal terms of the Disposal

Under the terms of the Disposal Agreement, which was signed on 30 August 2007,
SMG has conditionally agreed to sell Primesight to GMT. The consideration for
the Disposal shall, subject to adjustments as described below, be:

   • £52.0 million payable in cash on Completion; and
   • £5.0 million of deferred consideration in the form of loan notes in the
    Purchaser's group bearing an annual coupon of 2.5 per cent. to be issued to
    SMG on Completion and redeemable by SMG at the earlier of a future sale of
    Primesight by GMT or the date five years after the date of Completion; and
   • up to a further £5.0 million of additional deferred consideration
    payable on a pro rata basis in the form of loan notes in the Purchaser's
    group bearing an annual coupon of 2.5 per cent. to be issued to SMG
    contingent upon Primesight achieving agreed target profits for the financial
    year ending 31 December 2007 and redeemable by SMG at the earlier of a
    future sale of Primesight by GMT or the date five years after the date of
    Completion.

£1.4 million of the cash proceeds will be placed in a retention account for use
by GMT in relation to certain costs associated with obtaining planning consents
for specific Primesight advertising sites, offset by a £0.8 million payment to
SMG at Completion in respect of expected surplus working capital in Primesight.
Following Completion, the consideration shall be adjusted on a pound-for-pound
basis by the amount, if any, by which the actual working capital of Primesight,
at the date of Completion, is more or less than an agreed position.

Completion of the Disposal is conditional upon approval by SMG Shareholders and
a circular containing a notice convening an extraordinary general meeting, at
which a resolution to approve the Disposal will be proposed, will be sent to
Shareholders in due course.

Irrevocable undertakings to vote in favour of the Disposal have been received
from the Board and from Hanover Investors Management LLP, which together account
for approximately 12.9 per cent. of the voting rights attaching to the ordinary
share capital of SMG.

The current senior management team at Primesight, including Naren Patel,
Primesight's Chief Executive, will be remaining with the business following
completion of the Disposal.

Financial effects of the Disposal and use of disposal proceeds

The estimated net proceeds of £47.5 million (after completion adjustments,
transaction-related costs and taxation) will lead to a pro forma movement in net
assets of £3.0 million to £48.5 million and a pro forma reduction in net debt as
at 31 December 2006 from £157.3 million to £109.8 million. The effect of the
Disposal on the SMG Group profit and loss account for the year ending 31
December 2007 should be to generate an exceptional profit on disposal of
approximately £3.0 million.

The disposal proceeds will be used to reduce the Group's indebtedness and SMG is
currently in discussions with its banks regarding appropriate debt facilities
for the Continuing Group

Current trends in trading and prospects

SMG announced its results for the year ended 31 December 2006 on 12 April 2007,
reporting turnover on continuing operations of £147.3 million (2005: £159.4
million), operating profit before exceptional items of £18.1 million (2005:
£29.0 million) and pre-tax profit before exceptional items of £9.7 million
(2005: £17.8 million).

On 27 June 2007, the Board announced the conclusions of its 100 day business
review and noted that:

'The detailed analysis has confirmed the new management team's initial
impressions that the previous growth initiatives and in particular the New Media
strategy was not delivering. Specifically the contribution from E-Commerce will
be £3.0 million lower than expected; ITV sponsorship and interactive revenue
weakness will result in a decrease of £1.6 million to profit before tax; and
Production Commissions have been impacted by £0.9 million due to some new
commissions not materialising as anticipated.

The shortfall will be largely offset by an additional £1.0 million of cost
savings and a positive IFRS 5 impact on profit before tax of £3.5 million due to
non depreciation of assets held for sale.  Virgin Radio, Primesight and Pearl &
Dean are performing in line with Board expectations and the Board is confident
of achieving our revised performance targets in 2007.'

Following a weaker performance over the summer months as the six sheet market
has slowed, the Board now expects Primesight's operating performance to be
moderately below its expectations.  However, the Board remains confident that
the Group's other divisions are on track to achieve their revised targets as
outlined on 27 June 2007 for the current financial year.

A further update on current trading will be included in SMG's interim results
for the six months ended 30 June 2007 to be announced on 18 September 2007.

Enquiries:

SMG PLC 020 7882 1199
Rob Woodward, Group Chief Executive
George Watt, Group Finance Director
Debbie Johnston, Head of Communications

Hawkpoint Partners Limited 020 7665 4500
Simon Gluckstein
Emily Ashwell

Hoare Govett Limited 020 7678 8000
Sara Hale
Harry Nicholas

Brunswick Group LLP 020 7404 5959
James Hogan
Simon Sporborg
Ash Spiegelberg

Equus Group (for GMT) 020 7223 1100
Piers Hooper
James Sumpster


Hawkpoint Partners Limited, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively for SMG and
for no one else in relation to the Disposal and is not advising any other person
and accordingly will not be responsible to anyone other than SMG for providing
the protections afforded to the customers of Hawkpoint Partners Limited or for
providing advice in relation to the Disposal.

DEFINITIONS

The following definitions apply throughout this announcement unless the context
requires otherwise:

Board or        The board of directors of SMG.
Directors

Completion      The completion of the sale of Primesight in accordance with the
                terms and conditions of the Disposal Agreement.

Continuing      The SMG Group after the Disposal becomes effective.
Group

Disposal        The proposed sale of the entire issued share capital of
                Primesight to the Purchaser.

Disposal        The agreement between SMG and the Purchaser relating to the
Agreement       Disposal.

GMT or          GMT Communications Partners.
Purchaser

Group or SMG    SMG and its group undertakings.
Group

Hawkpoint       Hawkpoint Partners Limited.

Pearl and Dean  Pearl & Dean Limited, a company registered in England with
                registered number 05978466.

pounds sterling The lawful currency of the United Kingdom for the time being.
or £

Primesight or   Primesight Limited, the outdoor advertising company indirectly
Business        owned and operated by SMG, registered in England with registered
                number 01847728.

SMG or the      SMG PLC, a company registered in Scotland with registered number
Company         SC203873, or, where the context requires, SMG and its group
                undertakings.

SMG Shareholder A holder of SMG Shares.
or Shareholder

SMG Shares or   The ordinary shares of two and a half pence each in the capital
Shares          of SMG.

Subsidiaries    Subsidiaries, as interpreted in section 736(1) of the Act.
UK or United    The United Kingdom of Great Britain and Northern Ireland.
Kingdom

Virgin Radio    Virgin Radio Limited, a company registered in England with
                registered number 02674136.




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            The company news service from the London Stock Exchange