RNS Number:7828N
Digital Animations Group PLC
21 July 2003

DIGITAL ANIMATIONS GROUP PLC (the "Company")

Annual General Meeting and Off Market Tender Offer to Repurchase up to
13,809,524 Ordinary Shares at a price of 21 pence in cash per Ordinary Share

The Company announces that it will today send a circular (the "Circular") to
Shareholders giving details of the Company's forthcoming Annual General Meeting,
an Extraordinary General Meeting and details of an off market tender offer
whereby the Company intends, subject to Shareholder approval at the
Extraordinary General Meeting, to repurchase up to 13,809,524 Ordinary Shares
representing approximately 47 per cent of the Company's current issued share
capital at a price of 21 pence in cash per Ordinary Share, thereby returning up
to approximately #3 million of cash to Shareholders.  The Circular is to be
accompanied by the Group's annual report and accounts for the year ended 31
March 2003.

Annual General Meeting

The report and accounts of the Group for the year ended 31 March 2003 will be
presented for approval by Shareholders at the forthcoming Annual General
Meeting..

In accordance with the Company's Articles, Laurie McCulloch will retire from the
Board by rotation at the Annual General Meeting. Cyril Scott was appointed as a
director during the year and his appointment expires at the forthcoming Annual
General Meeting. Being eligible, they offer themselves for election and the
Board recommends their election at the Annual General Meeting.

Ernst & Young have expressed their willingness to continue in office as auditors
to the Company and a resolution proposing their re-appointment will be submitted
at the Annual General Meeting.

At the Annual General Meeting of the Company held on 3 October 2002, a Special
Resolution was passed authorising the Company to purchase its own shares in the
market. This authority will expire at the conclusion of the forthcoming Annual
General Meeting and accordingly a resolution proposing a new authority for
market purchases will be submitted at the Annual General Meeting. The Directors
believe that this authority will give them the necessary flexibility to make
such market purchases in cases where this stands to benefit Shareholders.

Proposed Tender Offer to repurchase Ordinary Shares up to an aggregate value of
#3 million for cash

Introduction

On 17 February 2003, the Board announced that it was proposing to return surplus
cash to Shareholders. By a circular dated 3 March 2003, the Board advised
Shareholders of its proposal to cancel the then existing share premium account
of the Company to create a distributable reserve to effect such return of
surplus cash to Shareholders.

By a special resolution passed at the extraordinary general meeting of the
Company held on 27 March 2003, Shareholders approved and authorised the
cancellation of the Company's then existing share premium account, subject to
the Company obtaining the approval of the competent Court to effect such
cancellation. The Court of Session in Edinburgh, by an order dated 24 June 2003,
has now approved the cancellation of the Company's share premium account and the
Company is therefore in a position to proceed with the return of surplus cash to
Shareholders.

Background to and reasons for the Tender Offer

As at 30 September 2002, the date of the last published financial statements of
the Group, both the Group and the Company had cash reserves of approximately
#9.2 million (as at 31 March 2003, the amount of cash reserves stood at #7.5
million). As stated in the Company's announcement of 17 February 2003, pursuant
to an internal financial review conducted by the Company, #3 million of the
Company's cash resources was considered to be surplus to the requirements of the
Company. This view adopted by the Board was based on an anticipation of cash
generation following the adoption by the Company of a new business strategy and
the perceived absence of a need for cash to finance significant acquisitions in
the immediate future.

The Board believes that an effective way to reduce the cost of capital and to
maximise shareholder value would be to invest part of the Company's cash
resources in the repurchase of Ordinary Shares. Assuming that the tender is
taken up in full, the Company would have approximately #4 million of remaining
net cash reserves.

The provisions of the Companies Act, 1985 require that any such distribution to
shareholders,

regardless of the specific method adopted by the Company to effect the
distribution, be made out of distributable profits of the Company.  Given that
the Company did not have sufficient distributable profits to effect a
distribution at that time, the Board proposed, in the circular dated 3 March
2003 issued to Shareholders, to cancel the then existing share premium account
of the Company to create a potentially distributable reserve.

Following the approval of the Company's proposal to cancel its then existing
share premium account by the Shareholders and the subsequent approval and
authorisation of such cancellation by the Court of Session in Edinburgh, the
Company cancelled its share premium account. This created a distributable
reserve which enables the Board to return up to #3 million to Shareholders.

The Board and the Company's advisers have considered the merits and demerits of
various methods by which the Company could achieve the return of surplus cash to
Shareholders. On balance, the Board believes that an off market Tender Offer
affords Shareholders an exit opportunity whereby they may sell a portion of
their shareholdings in the Company at an attractive price. The Tender Offer also
ensures that this opportunity is available to all Shareholders in proportion to
their shareholdings since each Shareholder's minimum entitlement to tender
Ordinary Shares will extend up to approximately 47 per cent of each tendering
Shareholder's holding of Ordinary Shares.

The Tender Offer

The Board is proposing that the Company should repurchase, by way of the Tender
Offer, up to 13,809,524 Ordinary Shares, representing approximately 47 per cent
of the Company's current issued share capital at a price of 21p per Ordinary
Share. The Tender Offer is conditional upon the passing of the requisite
resolution at  the Extraordinary General Meeting.

The Tender Offer is open to all Shareholders other than the Overseas
Shareholders.  Shareholders may participate in the Tender Offer by tendering all
or any part of their holding of Ordinary Shares.  The Tender Offer is not
conditional upon the Company receiving a minimum number of tenders.

An aggregate of up to 13,809,524 Ordinary Shares is proposed to be repurchased
by the Company under the Tender Offer (representing approximately 47 per cent of
the Company's issued share capital).  In the event tenders made by Shareholders
amount in aggregate to less than this total, all tenders will be satisfied in
full in respect of all the Ordinary Shares each Tendering Shareholder tenders.

In the event that Ordinary Shares exceeding the maximum number of Ordinary
Shares proposed to be repurchased by the Company are tendered, tenders will,
where a Tendering Shareholder has tendered more than 47 per cent of his holding
of Ordinary Shares,  be scaled back pro rata in proportion to the total number
of Ordinary Shares tendered by each such Tendering Shareholder in excess of
their minimum entitlement, as a fraction of the total number of Ordinary Shares
(if any) available to satisfy excess tenders, such that the total number of
Ordinary Shares purchased pursuant to the Tender Offer does not exceed
13,809,524 and such that the tender made by each such Shareholder is satisfied
at least to the extent of such Shareholder's minimum entitlement.

Those Shareholders who tender 47 per cent or less of their holdings of Ordinary
Shares will have their tenders satisfied in respect of all the Ordinary Shares
they tender in any event.

Directors and substantial Shareholders' intentions

The Directors who hold in aggregate 3,201,044 Ordinary Shares (representing
approximately 11 per cent of the Ordinary Shares currently in issue) have
indicated that they will vote in favour of the Resolutions.

The Directors will not tender any of the Ordinary Shares held by them pursuant
to the Tender Offer.  This will allow the Company to satisfy to a greater
extent, tenders exceeding the minimum entitlement of Shareholders.

Extraordinary General Meeting

An Extraordinary General Meeting has been convened for 11.15 am on 20 August
2003 (or as soon thereafter as the Annual General Meeting convened for 11.00 am
on that date has concluded) at the registered office of the Company, to consider
and, if thought fit, pass the Resolutions to effect the Tender Offer.

Repurchase of Deferred Shares

At the Extraordinary General Meeting, the Company also intends to put to vote by
Shareholders, a resolution approving the Deferred Shares Repurchase Contract,
following the passing of which the Company will repurchase and cancel the
Deferred Shares which have been in existence since November 1999. These shares
are not listed and have no substantive rights attached to them under the
Articles.

Change of name of the Company

The Company also intends to put to vote by Shareholders at the forthcoming
Extraordinary General Meeting, a resolution approving the change of name of the
Company to "D A Group plc". This is in line with the re-branding strategy
adopted by the Company which has already resulted in a change of the Group's
trading name to "DA Group".

Recommendation

The Board unanimously recommends that Shareholders vote in favour of the
Resolutions. All The Directors intend to vote in favour of the Resolutions in
respect of their beneficial shareholdings (including those of their associates)
totalling 3,201,044 Ordinary Shares representing approximately 11 per cent of
the issued share capital of the Company.

Further information, including the formal terms of the Tender Offer and notices
of the Resolutions proposed to be passed at the Annual and Extraordinary General
Meetings, is set out in the Circular,  copies of which  and of the Annual Report
and Accounts are now available, free of charge, for a period of one month from
today's date from the Company's registered office at The Lighthouse, 70 Mitchell
Street, Glasgow, G1 3LX.



                                 Expected Timetable of Events
                                                                                           2003

Latest time and date for receipt of Tender Forms                            3.00 pm on 4 August

Record date of the Tender Offer                                                        4 August

Result of Tender Offer announced                                                       5 August

List of parties to Repurchase Contract put on display                                  6 August

CREST accounts credited with any unsold, uncertificated Ordinary                       7 August
Shares

Last time for receipt of Forms of Proxy for AGM                           11.00 am on 18 August

Last time for receipt of Forms of Proxy for EGM                           11.15 am on 18 August

Annual General Meeting                                                    11.00 am on 20 August

Extraordinary General Meeting                                      11.15 am on 20 August (or as
                                                                  soon thereafter as the Annual
                                                                            General Meeting has
                                                                                     concluded)

Payment for Ordinary Shares repurchased pursuant to the Tender                        22 August
Offer

New share certificates despatched                                                     27 August



Enquiries


Paul McCaffrey                                    0141 582 0600

Finance Director


Elizabeth Lambley                                 0131 554 1230

Indigo PR





Definitions



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


"Accepted Shares"                   Ordinary Shares validly tendered by the Shareholders for
                                    repurchase by the Company pursuant to the Tender Offer, and
                                    accepted for such repurchase by the Company as specified in the
                                    public announcement to be made by the Company announcing the
                                    results of the Tender Offer and as set out in the schedule to the
                                    Repurchase Contract;



"Annual General Meeting" or "AGM"   the Annual General Meeting of the Company convened for 11.00 am on
                                    20 August 2003;
"Articles"                          the Articles of Association of the Company;

"Board" or "Directors"              the board of directors of the Company;


"Company" or "DAG"                  Digital Animations Group plc (registered number SC166299);


"Custodian"                         The person appointed by the Company as a custodian for the
                                    Deferred Shares pursuant to the provisions of Article 5.3.1 of the
                                    Articles


"Deferred Shares"                   15,362,557 deferred shares of 15p each in the issued share capital
                                    of the Company


"Deferred Shares Repurchase         The contract proposed to be entered into by the Company in respect
Contract"                           of the repurchase by the Company of the Deferred Shares from the
                                    Custodian


"Extraordinary General Meeting" or  the Extraordinary General Meeting of the Company convened for
"EGM"                               11.15 am on 20 August 2003 (or as soon thereafter as the Annual
                                    General Meeting convened for 11.00 am on that date has concluded);


"Group"                             Digital Animations Group plc and its subsidiaries, referred to
                                    collectively;


"Ordinary Shares"                   ordinary shares of 10p each in the issued share capital of the
                                    Company;


"Repurchase Price"                  21p per Ordinary Share;


"Resolutions"                       the special resolutions authorising and approving, the repurchase
                                    by the Company of each of the Accepted Shares and the Deferred
                                    Shares pursuant to the Repurchase Contract and the Deferred Shares
                                    Repurchase Contract, respectively, and the change of name of the
                                    Company, to be voted on by Shareholders at the Extraordinary
                                    General Meeting;


"Shareholders"                      holders of Ordinary Shares;


"Tendering Shareholders"            holders of Ordinary Shares who have validly tendered their
                                    Ordinary Shares for repurchase by the Company pursuant to the
                                    Tender Offer and whose tender has been accepted by the Company to
                                    the extent set out in the public announcement to be made by the
                                    Company announcing the results of the Tender Offer and in the
                                    schedule to the Repurchase Contract;


"Tender Form"                       the tender form issued by the Company for use by  shareholders in
                                    connection with the Tender Offer and enclosed with the Circular;
                                    and


"Tender Offer"                      the invitation by the Company to Shareholders to tender Ordinary
                                    Shares on the terms and subject to the conditions set out in the
                                    Circular and the Tender Form.




                      This information is provided by RNS
            The company news service from the London Stock Exchange
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