Acquisition

RNS Number:9611M
First Artist Corporation PLC
30 November 2006

                                                                30 November 2006

                        First Artist Corporation PLC

                         Acquisition of Dewynters Plc,
                          placing, changes to capital
                  board change, new share incentive scheme and
                     alteration  of Articles of Association

The Board of First Artist Corporation plc is delighted to announce the
acquisition of Dewynters Plc and other proposals, the combined effect of which
the Board believes will transform the First Artist Group and enhance its
prospects. The other Proposals include, a Capital Reduction, a Share
Consolidation and Placing of New Ordinary Shares for cash, the establishment of
a savings related share option scheme and an alteration to the Articles of
Association.

Key points:

  * Dewynters is the UK entertainment and theatre industry's leading marketing
    services agency with subsidiary operations in the USA.

  * The Group's strategy has been to acquire businesses with strong organic
    growth prospects which can be enhanced by cross selling opportunities.

  * All First Artist's recently acquired companies have improved their
    performance since joining the Group.

  * The Placing raises #1 million (gross) and increased facilities from AIB
    combine to finance the purchase consideration and provide working capital.

  * A Capital Reduction which will permit dividends to be paid out of future
    profits

  * The share capital is to be consolidated by the issue of one New Ordinary
    Share for every 10 Existing Ordinary Shares

  * The proposals combine to transform the scale and diversity of the Enlarged
    Group's income streams, while paving the way for further cross selling
    opportunities to enhance profitability.


Jon Smith, Chief Executive of First Artist said:

"We have a clear strategy to transform First Artist with synergistic
acquisitions supported by strong organic growth. Dewynters is an icon in the
entertainment and theatre industry representing many of the current hit West End
musicals and plays. It owns a successful media signage business in London and a
flourishing merchandising operation in New York and Las Vegas.  This acquisition
is a quantum leap for the First Artist Group.  The many cross selling
opportunities with other Group companies will continue to create value for
shareholders whilst the Dewynter's acquisition itself will help transform First
Artist into an international media and entertainment organisation, retaining a
potent delivery of entertainment, sport, wealth and event management."

Anthony Pye-Jeary, Managing Director of Dewynters said:

"I am delighted to have found a partner who will help secure our future as
leaders of our industry and enable us to continue growing for many years to
come."


Enquiries:
First Artist Corporation PLC
Jon Smith  Chief Executive
Richard Hughes Group Managing Director   Tel: [phone]

Dawnay, Day Corporate Finance Ltd
Gerald Raingold
David Floyd                              Tel: [phone]

Hudson Sandler Ltd
Michael Sandler
Nick Lyon                                Tel: [phone]

Dewynters Plc
Anthony Pye-Jeary                        Tel: [phone]



                          First Artist Corporation PLC

                          Acquisition of Dewynters Plc
                          placing, changes to capital
                  board change, new share incentive scheme and
                     alteration of Articles of Association

The Board of First Artist Corporation plc is delighted to announce the
acquisition of Dewynters Plc and other proposals, the combined effect of which
the Board believes will transform the First Artist Group and enhance its
prospects. The other Proposals include a Capital Reduction, a Share
Consolidation and Placing of New Ordinary Shares for cash, the establishment of
a savings related share option scheme, and an alteration to the Articles of
Association.  The Proposals are subject to shareholders' approval and an
Extraordinary General Meeting is being convened for 22 December 2006.
Expressions in this announcement have the meanings set out in the Appendix.

Dewynters is larger than the First Artist Group in certain respects, resulting
in the Acquisition being classified as a reverse takeover under the AIM Rules.
This results in a requirement for an Admission Document, containing details of
the Enlarged Group, to be published and for a new application to be made to
London Stock Exchange plc for the admission of the Company's shares to trading
on AIM.

Dawnay Day is acting as Nominated Adviser in relation to the re-admission to
AIM.  Arbuthnot will continue as the Company's broker.

Background and strategy

The Board's strategy for the First Artist Group is to expand the range of
complementary business services it offers, both organically and by acquisition.

Having acquired Team Sports Management, AGB Financial Management Limited
(subsequently renamed Optimal Wealth Management Limited) and The Finishing Touch
(Corporate Events) Limited during 2005, when it also launched First Artist
Entertainment, the scale and profitability of its operations improved.  The
acquisitions continued with the announcement in July 2006 of the purchase of
Proactive Scandinavia A/S and NCI. Management Limited, followed in August 2006
with the acquisition of Sponsorship Consulting Limited.

The purchase of the these compatible businesses increases the range of services
the Group offers to its clients and/or gives rise to cross selling
opportunities.  An example of the latter is the ability to offer Dewynters event
management and new show launch parties services for its theatre clients.

Change of accounting reference date

The Company has changed its accounting reference date to 31 August and has
prepared statutory accounts for the 10 months ended 31 August 2006.

Current trading and prospects

The Group's results for the 10 month period to 31 August 2006 are being
announced today.

Current trading across the group remains strong with opportunities for cross
referral and selling having increased following the three acquisitions in the
Summer of 2006.

In particular opportunities exist for growth in Optimal through its joint
venture arrangement with financial audit group HW Fishers.  Sport should also
benefit from increased activity in the Italian football market following on from
last year's slow trading and the UK should benefit from increased funding into
the football clubs as a result of the increased TV rights monies due to be
received in August 2007.

The Acquisition of Dewynters

Dewynters is the UK entertainment and theatre industry's leading marketing
services agency with subsidiary operations in the USA.  The acquisition of
Dewynters gives rise to a range of opportunities to provide the existing Group's
services to Dewynters' clients and vice versa.

Dewynters was incorporated in 1924. It was a limited company until 1998 when it
re-registered as a public limited company (plc).  As a general agency, Dewynters
was founded over a century ago. It was one of the first advertising agencies in
London and had offices above the Adelphi Hotel on the Strand and handled such
accounts as Schweppes and P&O Shipping Line.

Today the principal activity of Dewynters is that of a creatively led
advertising agency to the entertainment and theatre industry.  The services
provided by the Group are media planning and buying, marketing, design, front of
house display, tourism, sales promotion, new media, print buying, souvenir
programmes, brochures and merchandise.

Dewynters, based in London's Leicester Square, is a full service media and
marketing provider to a range of theatre, tourism, arts and culture clients in
the UK. Dewynters' customers are principally in the London theatre business. Key
long term relationships and customers include productions for Cameron
Mackintosh's "Les Miserables" and "Mary Poppins"; Andrew Lloyd Webber's "Evita"
and "The Sound of Music"; Bill Kenwright's "Blood Brothers" and "Cabaret"; and
Disney's "The Lion King" as well as other major successes "Mamma Mia!", "
Spamalot", "Wicked", "The Phantom of the Opera", "Chicago", "We Will Rock You"
and "Frost/Nixon".

Dewynters' first major success was the global branding of the musical "Cats"
which became one of the longest running shows in musical theatre history.

The Group operates in the USA through its offices based in New York. The
business offers publishing, theatre and wholesale merchandising services for
shows based in Broadway and Las Vegas.

Historically the business has tended to work for clients of shows which have
moved across from London's West End, including "Chicago", "Les Miserables" and "
Phantom of the Opera", which is currently showing in Las Vegas, but increasingly
the business now acts for shows which will be moving in the other direction,
such as "The Color Purple"

The  Directors and owners of Dewynters are Messrs Robert De Wynter and Anthony
Pye-Jeary.  Mr. De Wynter is not closely involved in the day to day running of
the business.  Mr Pye-Jeary has close contacts within the theatre and
entertainment industry and plays a key role in establishing and developing
customer relationships and will be retained as Managing Director on acquisition.

The Company has agreed to acquire the whole of the issued share capital of
Dewynters for up to #15.5 million (subject to adjustment by reference to its net
asset value as at 31 October 2006).  The initial consideration is #9 million in
cash and 100,000 New Ordinary Shares.  If the operating profit before impairment
of goodwill exceeds certain thresholds on each of the three anniversaries of the
completion balance sheet date the following applies:

                       Profit Threshold                      Deferred Consideration

Year 1                 #1.35m - #1.49m                       #1 for every #1 of profit
                       over #1.5m                            #2 for every #1 of profit
Year 2                 #1.45m - #1.64m                       #1 for every #1 of profit
                       over #1.65m                           #2 for every #1 of profit
Year 3                 #1.55m - #1.79m                       #1 for every #1 of profit
                       over #1.8m                            #2 for every #1 of profit

In addition to the above, the A Shareholder (Mr Anthony Pye-Jeary), will receive
1 New Share for every #10 of deferred cash consideration he receives.

The annual deferred cash payments, in respect to any one year, are limited to
#1.5 million with any excess cash consideration due being carried forward to the
ensuing year and then continuing to roll over subject to the maximum annual
payment of #1.5 million.

The acquisition agreement, which is conditional on the passing of the relevant
resolutions at the Extraordinary General Meeting, and the Admission of the
consideration Shares to AIM contains warranties and indemnities in favour of the
Company and non competition covenants by the vendors.

The Capital Reduction

If no action is taken, the Company would only be able to pay dividends or effect
purchases of its own shares once the deficit on its profit and loss account has
been eliminated by the future generation of profits.  The Board therefore
proposes a reduction of capital whereby the deficit on the Company's accumulated
profit and loss account is eliminated by setting it off against the share
premium account.

The Capital Reduction relates to the share premium and reserves of First Artist
Corporation Plc as shown in the Company's accounts (not the consolidated Group
accounts).

The Capital Reduction requires the approval of Shareholders at the Extraordinary
General Meeting and is conditional upon the Court making an order confirming the
reduction.  Accordingly, as soon as practicable after the passing of the
resolutions to be proposed at the Extraordinary General Meeting, the Company
will apply to the Court for an order confirming the reduction.  The Court will
be concerned to protect the interests of creditors in relation to the Capital
Reduction and the Company will give such undertakings to the Court as it may be
advised are appropriate in that regard. Such undertakings may require all
creditors of the Company, as at the date the Capital Reduction becomes
effective, to have either given their consent to the Capital Reduction or to
have been paid before any dividend is paid or shares repurchased. Those
creditors which the Company does not expect to repay prior to the Capital
Reduction taking effect have already given their consent to the Capital
Reduction.

The Capital Reduction will become effective once the order of the Court
confirming the reduction is registered with the Registrar of Companies.
Although it is not possible to say precisely when the Capital Reduction will
become effective, it is hoped that it will be early 2007.

Consolidation of share capital

In the six months prior to the date of this circular, the price of the Existing
Ordinary Shares has been in the range 5 5/8p to 9 5/8p and the bid and
offer prices at close of business on 22 November 2006 were 5 3/4p and 6 3/4p
respectively.  With the share price at this level, a movement of 1/8p
represents a change of up to 2% of its value, making it difficult for the market
to adjust the price by small amounts.  The low share price also makes it
difficult for a narrow spread between the bid and offer prices to be quoted.
The board therefore proposes to consolidate its share capital by issuing one New
Ordinary Share to replace every ten Existing Ordinary Shares.

The nominal value of each Existing Ordinary Share is 0.25p and each New Ordinary
Share will have a nominal value of 2.5p.  Fractions of New Ordinary Shares will
not be allotted.

The record date for the share consolidation is expected to be 27 December 2006.
The CREST accounts of Shareholders who hold their Existing Ordinary Shares in
electronic form will be credited with one New Ordinary Share for every ten
Existing Ordinary Shares held on 28 December 2006.  Certificates or Existing
Ordinary Shares will become invalid following the passing of the relevant
resolution at the Extraordinary General Meeting.  Certificates for New Ordinary
Shares are expected to be despatched by 4 January 2007.  During the interim
period, transfers will be certified against the register.

The Placing

The Board has announced details of the Placing to raise gross proceeds of #1
million to contribute to the costs of the Acquisition, provide additional
working capital for the Enlarged Group and strengthen its balance sheet.  New
Ordinary Shares at the Placing Price of 62.5p per New Ordinary Share is
equivalent to a price of 6.25p per Existing Ordinary Share, which is a discount
of 2% to the closing middle market price of 6.38p per Existing Ordinary Share on
28 November 2006 when the Placing Price was determined.

The Placing Shares, which have been placed by Dawnay Day, will represent the
equivalent of approximately 12.3 per cent. of the enlarged issued share capital
of the Company following the completion of the Acquisition and Placing.

The Placing is conditional, inter alia, upon Admission becoming effective by not
later than 8.00 a.m. on 28 December 2006 (or such later time and/or day, not
being later than 5.00 p.m. on 31 January 2007 as the Company and Dawnay Day
agree).

The New Ordinary Shares subject to the Placing will, when issued and fully paid,
rank pari passu in all respects with the other New Ordinary Shares.  Application
will be made to the London Stock Exchange for the admission of the New Ordinary
Shares to trading on AIM.  It is expected that Admission will become effective
and dealings will commence in the New Ordinary Shares on 28 December 2006.

Placing statistics

Placing Price per New Ordinary Share                                             62.5 p

Number of Existing Ordinary Shares in issue prior to the Placing                 113,258,762

Equivalent number of New Ordinary Shares following the Consolidation             11,325,876

Number of New Placing Shares                                                     1,600,000

Number of Consideration Shares                                                   100,000

Number of Ordinary Shares in issue immediately following Admission               13,025,876

Percentage of enlarged issued ordinary share capital subject to the Placing      12.3%

Gross proceeds of the Placing                                                    #1,000,000

Market capitalisation at the Placing Price immediately following Admission       #8.14m


The Directors have committed to subscribe for 108,800 Placing Shares

Board Change

Vincenzo Morabito who continues to make a significant contribution to the Group,
is stepping down as a Group Board Director to become Group Head of Football,
concentrating his talents and efforts on co-ordinating the development of and
communications between our three main football offices and associated agents
worldwide.

Vincenzo will join the Executive Management Board, which consists of the
Directors of each divisional group company.  This Board has direct
responsibility to promote cross referral opportunities, ensure the quality of
internal communications and promote group management responsibilities.

Establishment of a Savings Related Share Option Scheme

The Board considers that, with the expansion of the business, it is now an
appropriate time to introduce a HMRC-approved Savings Related Share Option
Scheme.  This is a tax-advantaged share option scheme which will enable
employees to participate in the growth of the Company.   Shareholder approval is
required for the establishment of the scheme.  The following is a summary of the
principal terms of the First Artist Corporation PLC Savings Related Share Option
Scheme 2006 (the "SAYE Scheme" or "the Scheme").

An option may not be granted more than ten years after shareholder approval of
the Scheme.  Options are not transferable, except on death and are not
pensionable.

The Scheme may operate over new issue shares, treasury shares or shares
purchased in the market. In any ten calendar-year period, the total number of
unissued Shares which may be placed under option under the SAYE Scheme, when
aggregated with Shares already issued or to be issued pursuant to the SAYE
Scheme and any other employee share scheme adopted by the Company within the
preceding 10 years, shall not exceed 10% of the issued capital of the Company at
the time of the proposed grant of option.   Shares subject to options which have
lapsed, or been released or cancelled, are excluded when calculating this limit.

The shareholder resolution to approve the Scheme will allow the Board, without
further shareholder approval, to establish further plans for overseas
territories, any such plan to be similar to the Scheme, but modified to take
account of local tax, exchange control or securities laws, provided that any
Shares made available under such further plans are treated as counting against
the limits on individual and overall participation in the Scheme.

First Artist Share Option Schemes

The Capital Reduction does not affect options granted under the First Artist
Share Option Schemes but the numbers of shares subject to share options will be
adjusted to reflect the Share Consolidation. At present options to acquire the
equivalent of 835,148 New Ordinary Shares have been granted.  This represents
7.4 per cent of the present issued share capital and would amount to 6.4 per
cent of the issued share capital as enlarged by the issue of New Ordinary Shares
pursuant to the Acquisition and the Placing.

Increase in issued share capital and powers of allotment

Resolutions will be proposed at the Extraordinary General Meeting to increase
the authorised share capital to #625,000 divided into 25,000,000 New Ordinary
Shares of 2.5p each.  This will result in the Company having authorised and
issued share capital after the Placing and the Acquisition as follows

                                    Authorised              Issued and fully paid
                               Nominal    Number of New      Nominal     Number of New
                                 Value  Ordinary Shares        Value   Ordinary Shares
                                     #                             #

At present                     375,000       15,000,000      283,147        11,325,876
Proposed increase              250,000       10,000,000
Consideration Shares                                           2,500           100,000
Placing Shares                                                               1,600,000
Following Admission            625,000       25,000,000      325,647        13,025,876


Resolutions will also be proposed to grant the Board general powers of allotment
in respect of all the authorised but unissued shares and to waive pre-emption
rights in respect of the issue for cash of up to 8,850,000 New Ordinary Shares
of which 7,200 New Ordinary Shares (representing approximately 55% of the
enlarged issued share capital) have not been allocated to any specific purpose.
This is intended to enable the Board to raise funds if suitable opportunities
arise.

Authority to purchase and cancel Shares

The Board is seeking Shareholders' authority for the Company to purchase in the
market and cancel up to 15% of the Company's New Ordinary Shares in issue
following the implementation of the Proposals.  Any such further purchases will
be made out of future distributable profits generated subsequent to the Capital
Reduction becoming effective.

The Board has no present intention to buy in and cancel any New Ordinary Shares
and will only do so if it becomes possible on terms which the Board believes to
be in the best interests of shareholders.

Any purchase of New Ordinary Shares in the market will be at the prevailing
price at the relevant time or at a small premium.  The maximum price will be 105
per cent of the average of the middle market quotations for a New Share as
derived from the AIM appendix to the Daily Official List of the London Stock
Exchange for the five business days prior to the purchase.

The authority to purchase shares will expire 15 months from the date of the
Extraordinary General Meeting (or, if earlier, the conclusion of the 2007 annual
general meeting of the Company).

Recommendation

The Directors, who have been so advised by Dawnay Day, consider Proposals to be
fair and reasonable and in the best interests of First Artist shareholders as a
whole.  Accordingly, the Directors unanimously recommend shareholders to vote in
favour of the resolutions to be proposed at the Extraordinary General Meeting,
as they intend to do in respect of their own beneficial holdings of 20,729,399
Existing Ordinary Shares, representing approximately 18.4% per cent of the total
votes capable of being cast at the Extraordinary General Meeting.

In giving advice to the Company, Dawnay Day has had regard to the Directors'
commercial assessment of the Proposals.

The directors of First Artist accept responsibility for the information
contained in this document.  To the best of the knowledge and belief of the
directors of First Artist (who have taken all reasonable care to ensure that
such is the case), the information contained in this document for which they are
responsible is in accordance with the facts and does not omit anything likely to
affect the import of such information.

Dawnay Day, which is authorised and regulated by the Financial Services
Authority, is acting for First Artist in relation to the proposals described in
this document and is not advising any other person in relation to them.  Dawnay
Day will not be responsible to any person other than First Artist for providing
the protections afforded to its customers or advising any such person on the
proposals.

Dawnay Day has given and has not withdrawn its written consent to the issue of
this document with the inclusion of references to its name in the form and
context in which they appear.

This announcement does not constitute an offer or invitation to subscribe for
securities.

Future dates and times stated in this announcement are expected dates and times
only and may be subject to change, in which case an appropriate announcement
will be made via a Regulatory Information Service.

Appendix

Definitions

When used in this announcement, the following expressions have the following
meanings:

"Acquisition"                     the proposed acquisition of Dewynters PLC

"Act"                             the Companies Act 1985 (as amended)

"Board" or "Directors"            the board of directors of First Artist

"Court"                           the High Court of Justice of England and Wales

"Capital Reduction"               the proposed reduction by the Company of its 
                                  capital as described in this announcement

"Existing Ordinary Shares"        the ordinary shares of 0.25p each in
                                  the capital of the Company prior to the EGM

 "Dawnay Day"                     Dawnay, Day Corporate Finance Limited, 
                                  financial adviser to First Artist

"Extraordinary General Meeting"   the extraordinary general meeting of the
                                  Company convened for "EGM" to approve the 
                                  Proposals

"First Artist" or "the Company"   First Artist Corporation plc

"First Artist Group" or  "Group"  First Artist together with its subsidiary
                                  undertakings

"First Artist Share Option        the First Artist approved executive share
Schemes"                          option scheme and the First Artist 
                                  unapproved executive share option scheme

"HMRC"                            Her Majesty's Revenue & Customs

"London Stock Exchange"           London Stock Exchange plc

"New Ordinary Shares"             the ordinary shares of 2.5p each in
                                  the capital of the Company following the Share 
                                  Consolidation

"Proposals"                       the Acquisition and the proposed reduction of 
                                  capital, share consolidation, increase in 
                                  authorised share capital, granting of powers 
                                  of allotment, waiver of per-emption rights and
                                  powers to buy in and cancel New Ordinary 
                                  Shares

"Share Consolidation"             the proposed consolidation of the
                                  issued share capital of the Company whereby 
                                  one New Share is issued in substitution for 
                                  every ten Existing Ordinary Shares

 "Shares"                         Ordinary shares in the Capital of the Company

"Shareholders"                    the holders of Shares






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