Class 1 disposal

Safeland PLC
09 June 2006

Press Announcement



Safeland Plc

9 June 2006



Class 1 disposal



Safeland plc ('Safeland' or the 'Company') holds 6,514,096 ordinary shares of 5p
each in the share capital of Bizspace plc ('Bizspace'), (which constitutes the '
Bizspace Investment') representing 7.85 per cent. of the entire existing issued
share capital of Bizspace.  On 8 June 2006 the boards of Bizspace and Highcross
(Bugatti) Limited ('Highcross') announced a recommended cash offer for the
entire issued and to be issued share capital of Bizspace at 93.5p per share (the
'Offer Price') made by Deloitte Corporate Finance on behalf of Highcross (the '
Offer'). The Offer is being made in accordance with the City Code.



As part of the negotiations which led to Highcross agreeing to make the Offer,
the Company has given Highcross an irrevocable undertaking to accept the Offer
in relation to the Bizspace Investment (the 'Disposal'), but for the reasons
explained below, that undertaking is conditional upon the approval of
Shareholders.



Due to the size of the Bizspace Investment relative to the size of the Company,
the Disposal constitutes a class 1 transaction for the purposes of the Listing
Rules.  Accordingly, the Disposal (and the Company's obligations pursuant to the
irrevocable undertaking which it has given to Highcross) is therefore
conditional upon the approval of shareholders of the Company (as well as the
conditions of the Offer), which will be sought at an Extraordinary General
Meeting to be convened at 10.00 a.m. on 27 June 2006, notice of which is
contained in a circular which has been posted to shareholders today.



Background to and reasons for the Disposal

The Bizspace Group is a specialist provider of managed work space.  It offers a
wide range of flexible accommodation for smaller businesses requiring studio,
workshop, light industrial, office or storage facilities.  The accommodation
comprises units within a managed centre providing a base designed for small
businesses or established companies with temporary overflow needs on short term
renewable licences.  The Bizspace Group's income is primarily derived from a
combination of licence fees and user charges (a form of rent and service
charge).  Two of the directors of the Company, Larry Lipman and Paul Davis, are
also directors of Bizspace.



Bizspace was demerged from the Company in July 2000, when its shares were
admitted to trading to the AIM Market of the London Stock Exchange plc.  At the
time of the Demerger, the Bizspace Group owned three work space centres and had
a market capitalisation of £10,000,000 based on the placing price of 70p on
admission.  As at 28 February 2006, the Bizspace Group operated 60 centres
nationwide and based on the Offer Price, it has a market capitalisation of
approximately £77.6 million.



The Demerger was implemented by the Company distributing, by way of dividend in
specie, 90 per cent. of the entire issued share capital of Bizspace to the
Company's shareholders at the time of the Demerger.  Safeland retained the
remaining 10 per cent. holding in Bizspace.  Shareholders at the time of the
Demerger will therefore have received Bizspace Shares, and the Offer will apply
to any Shareholder who still holds Bizspace Shares on the same terms as it
applies to the Company and every other shareholder in Bizspace.



Safeland acquired its Bizspace Shares pursuant to the Demerger (when it retained
10 per cent.) and through various placings on subsequent occasions.  The total
acquisition cost of the Bizspace Investment, extracted without material
adjustment from the latest published audited financial statements of the Company
for the year ended 31 March 2005 was £2,584,000.  The unaudited interim
financial statements for the six months ended 30 September 2005 were drawn up
under the newly adopted International Financial Reporting Standards and the
Bizspace Investment was therefore included at fair value of £4,101,858 (31 March
2005 (restated): £2,910,996) in accordance with IAS 39. At the Offer Price, the
Bizspace Investment is worth, and the cash consideration receivable would be,
£6,090,680.



Principal terms and conditions of the Offer

The Offer is being made in accordance with the City Code on terms and conditions
which are customary for offers made under the City Code.  The Offer Price will
be paid in cash.  In accordance with the terms of the City Code, Highcross's
advisers, Deloitte & Touche LLP, have stated that it is satisfied that
sufficient cash resources are available to Highcross to satisfy full acceptance
of the Offer in cash.



The board of Bizspace, who have taken advice from Bizspace's financial adviser,
PricewaterhouseCoopers LLP, have recommended the Offer.  The Offer Price of
93.5p represents a premium of 18 per cent. when compared to 79.0p per share,
which was the mid market closing price prevailing on 28 March 2006, the last
business day prior to the announcement that it was in talks which may or may not
lead to an offer. The Offer Price also represents a premium of 11.3 per cent.
when compared to 84.0p per share, which was the mid market closing price
prevailing on 7 June 2006, the day before the announcement of the Offer.  The
Offer is subject to valid acceptances of the Offer in respect of not less than
90 per cent. (or such lesser percentage as Highcross may decide) of the nominal
value of the Bizspace Shares to which it relates being received (and not, where
permitted, withdrawn) by no later than 3.00 p.m. on 29 June 2006.



Effect of the Disposal on the Group

The proceeds of the Disposal will increase the cash held by the Group.  The
Board intends to use those proceeds to finance investment and trading
opportunities which the Board considers appropriate as at the date of receipt of
the proceeds.  To the extent that the proceeds are not so applied they will be
used towards repayment of any of the Group's borrowings still outstanding as at
that date.



Bizspace paid a dividend totalling 0.55p per share in its financial year ended
28 February 2005, amounting to an aggregate of £35,828in respect of the Bizspace
Investment.  No dividend will be paid to the Shareholders of Bizspace in respect
of the financial year ended 28 February 2006 if the Offer becomes or is declared
unconditional in all respects but the Board of Bizspace has indicated its
intention to recommend a dividend of 0.6p per share (which would amount to
£39,085 in respect of the Bizspace Investment) if the Offer does not become
unconditional.



The sale of the Bizspace Investment will of course mean that the Company will
cease to receive dividends from Bizspace but in considering this factor, account
should be taken of the savings in the Group's interest charges (which were
£820,000 in the financial year ended 31 March 2005) which may be made should the
proceeds of the Disposal be used to repay the Group's borrowings.



Current Trading and Prospects

As announced by the Company today, the conditions of those sections of the
property market in which the Company operates remain challenging with relatively
few opportunities for the Company to buy on acceptable terms and this has
resulted in a loss before tax for the year to 31 March 2006, extracted from the
unaudited draft financial statements of the Company, of approximately £1.1
million compared to a profit before tax for the previous year, extracted without
material adjustment from the restated audited financial statements of the
Company, of £1.8 million. The net asset value per share as at 31 March 2006,
extracted from the unaudited draft financial statements of the Company, has
remained relatively stable at 110p compared to 111p as at 30 September 2005, the
date of the unaudited interim financial statements.  The Directors believe that
the cash proceeds of the Disposal will enhance the Group's abilities to pursue
investments and trading opportunities as and when they arise.  Such
opportunities are frequently presented to the Company and the Directors are
always ready to investigate those which look attractive.





Copies of the circular will be available for viewing at the UK Listing
Authority's document viewing facility which is situated at 25 The North
Colonnade, Canary Wharf, London E14 5HS.



Copies of the circular will be available from Safeland plc's registered office
at 94-96 Great North Road, London N2 0NL.







-end-






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