CSE Cross Shr Reg S

RNS No 7972c
THE LONDON STOCK EXCHANGE
30 October 1997


                  CITY SITE ESTATES PLC

A hearing of the Quotations Committee of the London
Stock Exchange ("the Stock Exchange") took place on 20
October 1997 to consider a reference from the Listing
Department under Rule 1.8 of the Listing Rules of the
circumstances of the sale by City Site Estates Plc
("City Site") on 2 July 1997 of Priory Cannon House.


Decision


The Committee's decision is as follows:


(1)  City Site was in breach of Rule 10.37 of the
     Listing Rules in that prior to completing a Super
     Class 1 disposal of Priory Cannon House on 2 July
     1997 it failed to obtain shareholders' approval
     and failed to publish a circular to shareholders
     in relation to that transaction.
     
     
(2)  The Committee censures City Site and considers it
     appropriate in the circumstances that its decision
     and the reason therefor should be made public.
     
     
Reasons


1.   The Quotations Committee was appointed to consider
     a reference from the Listing Department of the
     circumstances of the sale by City Site of Priory
     Cannon House to MEPC on 2 July 1997.  City Site
     completed this sale in the early hours of 2 July,
     the sale price having been proposed and agreed on
     the preceding day, following earlier lengthy
     negotiations between City Site and MEPC which, if
     they had proceeded as had been expected, might
     have led to a completion in October 1997.  The
     Committee took into account that it was a pre-
     condition of the deal that the agreement was
     completed by 2 July.
     
2.   City Site have acknowledged through both Mr Syson
     and Mr Goodman that they were aware of the
     requirements of Rule 10.37 of the Listing Rules
     prior to completion of the sale; City Site have
     also necessarily accepted that their failure to
     issue a circular and to obtain shareholders'
     approval (or to make completion of the sale
     conditional upon it) was a breach of the Rule.
     
3.   City Site have on the other hand sought to convince
     the Committee that their breach should be seen as
     less serious in the light of the circumstances in
     which it occurred; broadly these were the
     directors' concern not to lose a favourable sale
     which would benefit shareholders and the very
     limited time in which they had to react to and
     complete the transaction according to the final
     terms offered at around midday on 1 July.
     
4.   Whilst the Committee has some sympathy with the
     dilemma in which the directors found themselves,
     it remains seriously concerned that no attempt was
     made to contact the Stock Exchange during the
     afternoon of 1 July to explain the position and to
     seek a waiver of Rule 10.37, nor was any such
     contact made on the following day.  Instead the
     Company made an announcement of the sale on Friday
     4 July but only contacted the Listing Department
     of the Stock Exchange through its broker Bell
     Lawrie White to discuss the matter by letter on 16
     July 1997.
     
5.   The Committee has taken into account the admission
     of the breach by City Site, the directors' concern
     to act in the best interests of the Company and
     its shareholders, the shortness of time and the
     fact that, when the transaction was finally put to
     shareholders to vote upon it, it was
     overwhelmingly approved.
     
6.   Nonetheless, the Committee regards Rule 10.37 as
     an important protection for shareholders and takes
     the most serious view of listed companies which
     knowingly disregard it.  The directors of City
     Site proceeded with the sale of Priory Cannon
     House in the knowledge that the Company was
     breaching Rule 10.37; in the Committee's view the
     circumstances upon which City Site have relied do
     not excuse that conduct.
     
END

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