NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM THE UNITED STATES OR ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018

FOR IMMEDIATE RELEASE

Capitalised terms in this announcement, unless otherwise defined, have the same meanings given to them in the Circular published today which is available to view on the Company's website at https://www.sportechplc.com

6 August 2021

SPORTECH PLC

("Sportech", the "Group" or the "Company")

Proposed Capital Reduction, Tender Offer and Notice of General Meeting

Sportech (AIM:SPO), an international betting technology business, is pleased to announce today the launch of a proposed Tender Offer to return up to approximately £35.5 million to Shareholders. Sportech is today posting a circular to its Shareholders (the "Circular") containing full details of the proposed Tender Offer and Capital Reduction (required in order to create the distributable reserves necessary to implement the Tender Offer) (the "Proposals") and a notice of General Meeting to be convened for 10.00 a.m. on 23 August 2021.

The Circular provides more information in relation to the Capital Reduction and Tender Offer and sets out the terms and conditions of the Tender Offer and the procedure for participating in the Tender Offer. Due to certain of the dates in the Court timetable to implement the Capital Reduction being unknown at the date of publication of this announcement, the Record Date and the Tender Offer Closing Date cannot be ascertained at this stage. Sportech will announce the date of the Record Date and Tender Offer Closing Date to Shareholders via a Regulatory Information Service as soon as possible after those dates have been ascertained.

The Proposals are conditional upon, amongst other things, the passing of the Resolutions at the General Meeting by the requisite majorities and the confirmation of the Capital Reduction by the Court.

Tender Offer

The key points to the Tender Offer are as follows:

·     The maximum aggregate number of Ordinary Shares to be purchased under the Tender Offer is 88,751,257 Ordinary Shares (representing 47.02 per cent. of the Company's issued Ordinary Share capital as at 5 August 2021 (being the latest practicable date prior to the publication of this document)) (such number of shares being the "Tender Offer Maximum").

·     The Tender Price payable will be 40 pence per Ordinary Share. The maximum aggregate capital being returned to Shareholders by the Tender Offer is approximately £35.5 million.

·      Shareholders are entitled to tender up to their Basic Entitlement, being 47.02 per cent. of the Ordinary Shares they hold as at the Record Date. Shareholders may also tender additional Ordinary Shares, but any excess tenders above the Basic Entitlement will only be satisfied, on a pro rata basis, to the extent that other Shareholders tender less than their aggregate Basic Entitlement.

The Tender Offer will be effected by Peel Hunt LLP ("Peel Hunt") (acting as principal and not as agent, nominee or trustee).  The Company has granted a put option to Peel Hunt pursuant to the Repurchase Agreement under which Peel Hunt may require the Company to purchase at the Tender Price the Ordinary Shares purchased by Peel Hunt pursuant to the Tender Offer.  Ordinary Shares that are purchased from Peel Hunt by the Company will be cancelled.

Capital Reduction

• Approval is being sought to carry out a reduction in the nominal value of the Ordinary Shares from 20 pence per Ordinary Share to one penny per Ordinary Share and to cancel the entire amount standing to the credit of the Company's capital redemption reserve, being £10.3 million as at 5 August 2021 (being the latest practicable date prior to the publication of this document) (together, the "Capital Reduction").                                                                                                 
• The reserves arising as a result of the Capital Reduction, expected to be approximately £46.2 million, will, subject to any arrangements required for the protection of creditors and any direction given by the Court in confirming the Capital Reduction, amount to distributable reserves for the purposes of the Companies Act and these reserves will be available to the Company to distribute to Shareholders via the Tender Offer.

Conditions of the Capital Reduction and Tender Offer

The Capital Reduction and the Tender Offer are conditional upon, amongst other things:

·      the Resolutions being passed at the General Meeting to approve the Capital Reduction and the Tender Offer;

·      the confirmation of the Capital Reduction by the Court at the Court Hearing; and

·      a copy of the Court Order having been delivered to the Registrar of Companies and registered by them.

Background to the proposed Capital Reduction and Tender Offer

Following the completion of the disposal of the Global Tote Business on 17 June 2021, the Bump 50:50 Business on 2 June 2021 and the sale of a freehold property in New Haven, Connecticut (the "Disposals"), the Group was in receipt of net cash proceeds of approximately £36.1 million.

Given the change in size of the Group, the Group now has funds surplus to its current operational requirements and the Board believes that now is an appropriate time to return through the Tender Offer up to approximately £35.5 million of cash to its Shareholders.

In arriving at the level of cash available to be returned to Shareholders, the Board has taken account of the Company's available distributable reserves and the levels of funding in the Group to enable it to meet its working capital requirements. In the absence of the Capital Reduction, the amount available for return to Shareholders would be approximately £11.3 million due to the Companies Act requirement that a company can only make distributions to Shareholders out of profits available for that purpose.

The Company believes its prevailing market share price does not reflect the intrinsic value of the business and that this is due, in part, to market factors including the Company's micro-cap size. The Company has therefore set a Tender Offer price of 40 pence per Ordinary Share as it believes this offers its Shareholders the opportunity to realise some of their investment at a level which better reflects the intrinsic value of the business.

The Board is satisfied that, following the Capital Reduction and the Tender Offer and assuming the Tender Offer is fully subscribed, the Company will remain an attractive size with sufficient liquidity to pursue the strategies of the Venues and Lottery businesses. The Board believes that these proposals are in the interests of all Shareholders.

As stated previously the strategy of the Group is to pursue corporate transactions which deliver shareholder value. The Company is in exclusive discussions to potentially sell its terrestrial lottery supply contract for between US$14 to $15 million. This contract has a current term to March 2025 and generated an EBITDA of US$3.93 million in FY19 (being the last full year in which the Company's trading was not impacted by COVID-19). The exclusivity period granted to the potential buyer is due to expire on 16 September 2021 unless extended by mutual agreement. The Group continues to review all options and there can be no certainty that this transaction will proceed. A further announcement will be made if and when appropriate.

Irrevocable undertakings

Each of Lombard Odier Asset Management (Europe) Limited ("Lombard Odier"), North Atlantic Smaller Companies Investment Trust plc and Oryx International Growth Fund have given an irrevocable undertaking to the Company to vote in favour of the Resolutions at the General Meeting. As at 5 August 2021 (being the latest practicable date prior to the publication of this document) Lombard Odier, North Atlantic Smaller Companies Investment Trust plc and Oryx International Growth Fund have, in aggregate, an interest in 87,435,540 Ordinary Shares representing 46.3 per cent. of the issued share capital of the Company.

In addition, each of Lombard Odier, North Atlantic Smaller Companies Investment Trust plc, Oryx International Growth Fund and Sand Grove Capital Management LLP have irrevocably undertaken to the Company to take the necessary actions such that none of them would be required to make a mandatory offer for the entire issued share capital of the Company pursuant to Rule 9 of the Takeover Code at the completion of the Tender Offer.

General Meeting

Notice of a general meeting of the Company to be held at the offices of Dickson Minto W.S., 16 Charlotte Square, Edinburgh EH2 4DF on 23 August 2021 at 10.00 a.m. is set out at the end of the Circular.

The Board has been closely monitoring public health guidance and legislation issued by the Scottish and UK Governments relating to the COVID-19 pandemic. The safety of our employees, Shareholders and other stakeholders is of paramount importance to us and we will be taking measures to reduce the risks associated with COVID-19. We strongly encourage and request Shareholders to appoint the chairman of the General Meeting as their proxy rather than attend in person due to the COVID-19 associated risks.

If your preference is to attend the General Meeting in person, please note that, while we currently anticipate this will be possible, we are committed to following Government guidance in place as at the date of the General Meeting and will also be asking all attendees to adhere to the safety measures of the venue. If you plan to attend in person we would appreciate prior confirmation, by email to IR@sportechplc.com, to allow us to plan appropriately as numbers may be restricted. We do not anticipate that there will be any circulation of shareholders or Directors before or after the meeting, and refreshments will not be served.

Whilst it remains difficult to predict if Government restrictions or guidance may change, we will ensure any changes to the General Meeting arrangements are published on our website and/or via Regulatory Information Service. Please also check the latest Government guidance before you consider travelling to the venue.

All proxies should be received as soon as possible and, in any event, by no later than 10.00 a.m. on 19 August 2021 (or, if the General Meeting is adjourned, not later than 48 hours (excluding non-working days) before the time fixed for the holding of the adjourned meeting).

- Ends -

Notes to Editors:

About Sportech

Sportech PLC, an international betting technology business, delivers solutions and services for gaming companies and lottery clients in highly regulated markets. Sportech also owns and operates gaming venues and digital betting platforms in Connecticut under exclusive licences.