Embargoed release: 07:00hrs Thursday 27 November 2008
CLS Holdings plc
("CLS", the "Company" or the "Group")
Special Tender Offer
As set out in the Interim Management Statement on 18th November 2008, CLS' cash
balances are approximately £200 million compared to its current market
capitalisation of approximately £185 million. The Company distributed £11
million to shareholders in a Tender Offer which completed on 20th November
2008. However, the Board of CLS has considered the capital requirements of the
company for the foreseeable future, particularly in light of falling interest
rates and the importance of cash to shareholders in the current uncertain
economic environment. Consequently it has decided to return a further £48
million of this cash to shareholders by way of a special tender offer share buy
back (the "Special Tender Offer") in January 2009. The Company will still
retain over £130 million in cash following the Special Tender Offer which the
Board believes is more than sufficient to provide capital to take advantage of
acquisition opportunities arising from the current downturn and any additional
security requirement from its lenders following any further decline in the
value of its property portfolio.
Following the sale of Solna Business Park in November 2006, CLS made a similar
special distribution to its shareholders.
Under the Special Tender Offer, the Board now proposes to buy back two shares
in every nine shares at 350 pence per share. If the maximum number of
13,721,215 Ordinary Shares under the Special Tender Offer are acquired this
will result in an amount of £48 million being paid by the Company to
participating shareholders.
It is expected that the circular setting out details of the Special Tender
Offer and incorporating a notice convening a general meeting of the Company
will be posted on 1st December 2008 and that the general meeting will be held
on 18th December 2008, with payment to be despatched to participating
shareholders in early January 2009.
Sten Mortstedt, Executive Chairman of CLS said:
"We are experiencing an exceptionally difficult economic environment and we are
pleased that CLS has a robust financial position. We have considered the
capital needs of CLS carefully and believe that it is in shareholders'
interests that we return some of our free cash to them via a further tender
offer share buy back. Since flotation in 1994, at which time the market
capitalisation was £110m, CLS will have returned £308 million to shareholders
including this new payment, by way of tender offer and market share buy backs
and dividends. I think that the Company has served the shareholders well so far
and I believe that it will do the same in the future."
Enquiries:
Sten Mortstedt, Executive Chairman, CLS Holdings plc +44 (0) 20 7582 7766
Henry Klotz, Chief Executive Officer, CLS Holdings plc +44 (0) 20 7582 7766
Jonathan Gray, NCB Corporate Finance + 44 (0) 20 7071 5200
Adam Reynolds, Hansard Group +44 (0) 20 7245 1100
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