Sdi Group Plc Offer For Sdi Group Plc -6-

The Independent Directors (except for Steve Butler) intend to resign from the SDI Board shortly after the Offer becomes or is declared unconditional in all respects and agree to waive entitlements against SDI except for payments and benefits to which they are entitled under the terms of their letters of appointment. Further details of these arrangements will be set out in the Offer Document. Steve Butler will continue in his current role as Chief Finance Officer of SDI. Further details of the arrangements involving the members of the Management Team are set out in paragraph 7 above. 12. SDI Share Option Scheme Mike Hilton was granted share options over an aggregate of 250,000 SDI Shares on 5 February 2009 and over 250,000 SDI Shares on 14 April 2009 pursuant to the Rules of the SDI Share Option Scheme ("Options"). The Options were to vest, in accordance with the SDI Share Option Scheme Rules, on 5 February 2012 and 14 April 2012, respectively. Pursuant to a deed of release dated 15 July 2010, Mike Hilton has agreed to release any entitlement that he might have had to SDI Shares on the exercise of the Options. No other options are outstanding under the SDI Share Option Scheme. 13. Disclosure of interests in SDI Shares Save as set out in Appendix B, neither FSU Investments, nor (so far as FSU Investments is aware) any person acting, or deemed to be acting, in concert with FSU Investments for the purposes of the Offer has: (i) an interest in, or a right to subscribe for, SDI Shares or in any securities convertible or exchangeable into SDI Shares ('Relevant SDI Securities'); (ii) any short position in Relevant SDI Securities (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery; or (iii) borrowed or lent any Relevant SDI Securities (except for any borrowed SDI Shares which have been either on-lent or sold) or has any arrangement in relation to Relevant SDI Securities. For these purposes, 'arrangement' includes indemnity or option arrangements and any agreement or understanding, formal or informal, of whatever nature, relating to Relevant SDI Securities which may be an inducement to deal or refrain from dealing in such securities. In the interests of secrecy prior to this announcement, FSU Investments has not made any enquiries in this respect of certain parties which are or may be deemed to be acting in concert with it for the purposes of the Offer (including Vollman Brothers). If such enquiries, which are now being made, reveal any relevant additional interests, the same will be discussed with the Panel and, if appropriate, will be disclosed to the SDI Shareholders. 14. Cancellation of admission to trading on AIM Assuming the Offer becomes or is declared unconditional in all respects, FSU Investments intends to procure the making of an application by SDI to AIM for the cancellation of the admission of the SDI Shares to trading on AIM. If this cancellation occurs, it will significantly reduce the liquidity and marketability of SDI Shares held by SDI Shareholders who have not assented to the Offer. It is anticipated that the cancellation of the admission of SDI Shares to trading on AIM will take effect no earlier than the expiry of 20 business days after the Offer becomes or is declared unconditional in all respects. It is further proposed that, following the Offer becoming or being declared unconditional in all respects, and, after the cancellation of admission of SDI Shares to AIM, FSU Investments will seek to re-register SDI as a private limited company. 15. Anticipated timetable FSU Investments anticipates that it will dispatch the Offer Document to SDI Shareholders as soon as possible and in any event within 28 days of the date of this announcement. 16. General There are no agreements or arrangements to which FSU Investments is a party which relate to the circumstances in which it may or may not invoke or seek to invoke a condition to the Offer. Your attention is drawn to the further information contained in the Appendices which form part of this announcement. The conditions to the Offer and a summary of further terms in relation to the Offer set out in Appendix A to this announcement form part of, and should be read in conjunction with, this announcement. Appendices B and C to this announcement set out further information, including the bases and sources of information from which the financial and other calculations used in this announcement have been derived. Appendix D to this announcement contains definitions of certain terms used in this announcement. In accordance with Rule 2.10 of the City Code, SDI confirms that it has 109,273,078 ordinary shares of 1 pence each in issue. The International Securities Identification Number (ISIN) for SDI's ordinary shares is GB00B1YW3F48. The Offer will be subject to the applicable requirements of the City Code. This announcement does not constitute an offer or an invitation to purchase or subscribe for any securities. Enquiries: +----------------------------------------------+----------------+ | FSU Investments Limited | Tel: 01763 | | Gordon Smith | 244299 | +----------------------------------------------+----------------+ | Vollman Brothers (Financial Adviser to FSU | Tel: 0207 898 | | Investments) | 0510 | | Bill Kendall, Mark Woollcott | | +----------------------------------------------+----------------+ | SDI (Independent Directors) | Tel: 01763 | | Mark McMenemy, Richard Arkle, Steve Butler | 244299 | +----------------------------------------------+----------------+ | Cenkos (Rule 3 Adviser, NOMAD and Broker to | Tel: 0207 397 | | SDI) | 8924 | | Stephen Keys, Elizabeth Bowman | | +----------------------------------------------+----------------+ Vollman Brothers, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for FSU Investments and no one else in connection with the Offer and will not be responsible to anyone other than FSU Investments for providing the protections afforded to clients of Vollman Brothers nor for providing advice in relation to the Offer, the contents of this announcement, or any transaction or arrangement referenced herein. Cenkos, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for SDI and no one else in connection with the Offer and will not be responsible to anyone other than SDI for providing the protections afforded to customers of Cenkos nor for providing advice in relation to the Offer, the contents of this announcement, or any transaction or arrangement referenced herein. ALL SDI SHAREHOLDERS ARE ADVISED TO READ THE OFFER DOCUMENT WHEN IT IS AVAILABLE BECAUSE IT CONTAINS IMPORTANT INFORMATION. THE OFFER DOCUMENT AND OTHER PUBLICLY RELEASED DOCUMENTS RELATING TO THE OFFER WILL BE AVAILABLE, FREE OF CHARGE, ON THE SECURITIES EXCHANGE COMMISSION'S WEB SITE AT WWW.SEC.GOV AND DIRECTLY FROM FSU INVESTMENTS LIMITED, ONCE THEY ARE COMPLETE AND READY FOR PUBLIC DISTRIBUTION. REQUESTS FOR SUCH DOCUMENTS FROM FSU INVESTMENTS LIMITED SHOULD BE DIRECTED TO GORDON SMITH ON 01763 244299. This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities pursuant to this announcement or otherwise. The Offer will be made solely by the Offer Document, when issued, which will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted. This announcement has been prepared for the purpose of complying with English law and the City Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the UK. The distribution of this announcement in jurisdictions other than the UK and the availability of the Offer to SDI Shareholders who are not resident in the UK may be affected by the laws of relevant jurisdictions. Therefore any persons who are subject to the laws of any jurisdiction other than the UK or SDI Shareholders who are not resident in the UK will need to inform themselves about, and observe, any applicable requirements. Unless otherwise determined by FSU Investments or required by the City Code and permitted by applicable law and regulation, the Offer is not being, and will not be, made, directly or indirectly, in or into or by the use of the mails of, or by any other means or instrumentality (including, without limitation, electronic mail, facsimile transmission, telex, telephone, internet or other forms of electronic communication) of interstate or foreign commerce of, or any facility of a national state or other securities exchange of Canada, Australia or any other Restricted Jurisdiction and will not be capable of acceptance by any such use, means, instrumentality or facility or from within Canada, Australia or any other Restricted Jurisdiction. Accordingly, unless otherwise determined by FSU Investments or required by the City Code and permitted by applicable law and regulation, copies of this announcement are not being, and must not be, directly or indirectly, mailed, (MORE TO FOLLOW) Dow Jones Newswires July 16, 2010 02:00 ET (06:00 GMT)