INNOVA's Board Unanimously Recommends that Shareholders Reject Pollard Banknote's Unsolicited Offer

LOS ANGELES, May 4, 2017 /CNW/ - INNOVA Gaming Group Inc. ("INNOVA" or the "Company") (TSX: IGG) today announced that its board of directors (the "Board") has unanimously recommended that INNOVA's shareholders REJECT and NOT TENDER their common shares (the "Common Shares") to the unsolicited offer (the "Pollard Banknote Offer") made by Pollard Banknote Limited ("Pollard Banknote"), through its wholly-owned subsidiary 10188557 Canada Inc., to acquire all of the outstanding Common Shares at a price of $2.10 in cash per Common Share.

"The special committee and the Board have carefully reviewed the Pollard Banknote Offer and Amaya Inc.'s support for the offer ", said Paul van Eyk, a member of the special committee of the Board (the "Special Committee").  "The Board recognizes Amaya's desire to seek liquidity for its investment in INNOVA.  However, it is our view that the Pollard Banknote Offer does not adequately compensate shareholders for their Common Shares.  As a result, INNOVA has undertaken a strategic review process to determine if any financially superior alternatives to the Pollard Banknote Offer are available and has entered into nine confidentiality agreements with interested parties to date." continued Mr. van Eyk.  "The Special Committee and the Board recommend that shareholders not tender their Common Shares to the Pollard Banknote Offer and wait to determine whether the strategic review process will result in an alternative transaction that is financially superior to the Pollard Banknote Offer and in the best interest of INNOVA and all of its shareholders, including Amaya." Mr. van Eyk further continued.

In making its recommendation the Board considered a number of factors including the following:

• The Pollard Banknote Offer undervalues INNOVA and its business and does not adequately compensate shareholders for tendering their Common Shares.
  a)  INNOVA's unique and innovative products can be deployed in non-traditional venues and offer a rich variety of gaming experiences.
  b)  INNOVA has considerable growth opportunities.
  c)  INNOVA has an established customer base of government agencies and regulated operators that provide recurring revenues.
  d)  There are significant barriers to entering INNOVA's business.

• The Pollard Banknote Offer is opportunistic given it is timed to deprive INNOVA's shareholders of the potential near-term upside in the trading price of the Common Shares.
  a)  The Pollard Banknote Offer is below all recent analysts' targets.
  b)  INNOVA's financial and operational results are improving.
  c)  Over 40% of the Pollard Banknote Offer would be financed by INNOVA's strong balance sheet.

• The value of the Pollard Banknote Offer is below implied multiples observed in precedent transactions.
  
  
• The Pollard Banknote Offer is lower than the current market price for the Common Shares and is viewed as inadequate by the analyst community covering INNOVA.
  
  
• Directors and officers of INNOVA and certain other shareholders holding an aggregate of over 30% of the Common Shares (on a fully-diluted basis) have advised INNOVA of their current intention, as of the date hereof, NOT to tender their Common Shares to the Pollard Banknote Offer.
  
  
• The Pollard Banknote Offer does not fairly compensate INNOVA's shareholders for the synergies and strategic benefits that Pollard Banknote is expected to realize if it acquires INNOVA.
  
  
• The Special Committee has undertaken a process of exploring and considering strategic alternatives with a view of identifying any financially superior transactions to the Pollard Banknote Offer that might be available to INNOVA.
   
  
• The Pollard Banknote Offer is the product of an inadequate process.
  
  
• Raymond James Ltd., the financial advisor to the Special Committee, has provided a written opinion to the Special Committee and the Board that, as of the date of such opinion and based on and subject to the assumptions, limitations and qualifications set forth therein, and such other matters as Raymond James Ltd. considered relevant, the cash consideration of $2.10 per Common Share offered under the Pollard Banknote Offer is inadequate, from a financial point of view, to INNOVA's shareholders.
  
  
• The Pollard Banknote Offer is highly conditional.

The Board's recommendation that shareholders REJECT the Pollard Banknote Offer and NOT TENDER their Common Shares thereto, as well as a more detailed discussion of the reasons for rejecting the Pollard Banknote Offer and the inadequacy opinion provided by INNOVA's financial advisor, Raymond James Ltd., are contained in the directors' circular (the "Directors' Circular") that will be mailed to each of INNOVA's shareholders and filed with Canadian securities regulatory authorities.  Shareholders are advised to read the Directors' Circular carefully and in its entirety, as it contains important information regarding INNOVA, Pollard Banknote and the Pollard Banknote Offer.  The Directors' Circular will be available under INNOVA's issuer profile on SEDAR at www.sedar.com.  Shareholders who have questions can contact Kingsdale Advisors at 1-855-682-2023 for additional information.

Raymond James Ltd. is acting as financial advisor to the Special Committee and Davies Ward Phillips & Vineberg LLP is acting as the Special Committee's counsel.  Osler, Hoskin & Harcourt LLP is counsel to INNOVA.  Kingsdale Advisors is INNOVA's strategic shareholder advisor and information agent in connection with the Pollard Banknote Offer.

About the Company

INNOVA develops unique games and products for the global gaming industry, with particular focus on state and provincial lotteries.  Through INNOVA's wholly-owned subsidiary, Diamond Game Enterprises, the Company focuses on enhancing the revenues of government-sponsored lotteries and other regulated operators by offering its unique "extended play" products in traditional and non-traditional gaming venues.  The Company's primary product is its third generation Lucky Tab machine, an instant ticket vending machine that dispenses tickets while simultaneously displaying the results of each ticket on a video monitor in an entertaining fashion. For more information, please visit www.innovagaminggroup.com.

Forward-Looking Statements

Certain statements made and information included in this press release may constitute "forward-looking statements" within the meaning of applicable securities laws.  Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management and the directors of INNOVA at this time, are inherently subject to significant business, economic, regulatory and competitive uncertainties, contingencies and risks that could cause actual results or events to differ materially from those expressed or implied in such statements.  Investors are cautioned not to put undue reliance on forward-looking statements.  The forward-looking statements contained herein reflect INNOVA's current views with respect to future events, and except as required by law, the Company does not intend, and undertakes no obligation, to update any forward-looking statements to reflect, in particular, new information or future events, or otherwise.

SOURCE INNOVA Gaming Group

Jonathan Ross, LodeRock Advisors, INNOVA Investor Relations, [email protected], [phone]; Kingsdale Advisors, [email protected], 1-855-682-2023