TIDMCLI
RNS Number : 0734W
CLS Holdings PLC
15 August 2022
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
LEI: 213800A357TKB2TD9U78
CLS Holdings plc
("CLS" or the "Company")
Proposed purchase of 1 in every 40 Ordinary Shares of 2.5 pence
each
in the Company ("Ordinary Shares") at 250 pence per share
by way of a tender offer (the "Tender Offer") and Notice of
General Meeting
On 10 August 2022, the Board of CLS announced in its half yearly
results for the period ended 30 June 2022 its intention to purchase
1 in every 40 Ordinary Shares by way of a tender offer at 250 pence
per Ordinary Share.
Today CLS has posted a circular to shareholders in relation to
the Tender Offer (the "Circular") on the terms set out above. If
the maximum number of 10,184,984 Ordinary Shares is acquired under
the Tender Offer, this will result in approximately GBP25.5 million
being paid by the Company to participating shareholders.
Capitalised terms used but not defined in this announcement shall
have the meaning given to them in the Circular.
The Tender Offer is open to all Qualifying Shareholders on the
Company's register at 6.00pm on 9 September 2022, who may
participate by tendering all or a proportion of their holdings of
Ordinary Shares at the above price. No Ordinary Shares will be
purchased in relation to the Tender Offer unless the relevant
special resolution to be proposed at the general meeting of the
Company to be held on 9 September 2022 at 11.00am is passed. The
Tender Offer will be void if less than 0.1 per cent. of the issued
ordinary share capital of the Company (excluding treasury shares)
in aggregate is tendered. The Ordinary Shares purchased under the
Tender Offer will be held as treasury shares.
Background to and reasons for the Tender Offer
During the first six months of the current financial year, the
Board completed two property disposals, realising an aggregate of
GBP10.1 million at prices that were in line with their valuations
as at 31 December 2021.
Furthermore, on 3 August 2022, CLS announced that it had
completed on the sale of two UK properties, Great West House,
Brentford and 62 London Road, Staines and one French property, 96
Rue Nationale, Lille for a total of GBP39.8 million. The three
properties sold for an average of 3.7% above the 31 December 2021
valuations.
The share price of an Ordinary Share has continued to trade at a
significant discount to the net tangible assets ("NTA") value of an
Ordinary Share (last reported NTA per Ordinary Share of 352.8 pence
per Ordinary Share, stated as at 30 June 2022). The Board believes
the share price discount to its NTA is unjustified and it is in the
best interests of all Shareholders to implement the Tender Offer to
reduce this discount.
The Board has determined that the Tender Offer should be made at
an appropriate premium to the price per Ordinary Share and that
this would be the most suitable way of returning capital to
Shareholders in a quick and efficient manner, taking account of the
relative costs, complexity and timeframes of the possible methods,
as well as treating all Shareholders equally.
The Board of Directors of the Company considers the Tender Offer
to be beneficial to the Shareholders as a whole, including, among
other reasons, that:
-- the Tender Offer is available to all Qualifying Shareholders
regardless of the size of their holding;
-- the Tender Price represents a premium over the price of Ordinary Shares, as follows:
o a premium of 22.5% to the average of the Company's Ordinary
Shares closing price of 204.0 pence for the 30 Business Days to the
Latest Practicable Date; and
o a premium of 18.8% to the Company's Ordinary Shares closing
price of 210.5 pence on the Latest Practicable Date.
o a premium of 20.2% to the Company's Ordinary Shares closing
price of 208.0 pence on 9 August 2022 (the day prior to the release
of the Company's half-year results).
-- the Tender Offer provides Qualifying Shareholders who wish to
reduce their holdings of Ordinary Shares with an opportunity to do
so at a market-driven price with a premium;
-- the Tender Offer permits Shareholders who wish to retain
their current investment in the Company and their Ordinary Shares
to do so, as no Shareholder is required to participate in the
Tender Offer, and thus providing Shareholders with flexibility;
and
-- the Tender Offer will reduce the number of Ordinary Shares in
issue, and so should, assuming earnings and net asset values of the
Group's properties stay the same, have a positive impact on the
Group's earnings per share and net asset value per share.
The size of the Tender Offer has been determined to be
appropriate to ensure that the Group's loan-to-value ratio and
liquidity remain within an acceptable level, being below 40% within
a suitable timeframe, and with cash and liquid resources and
available facilities being over GBP100 million, providing the Group
with the flexibility to focus its portfolio on attractive growth
prospects and continue to invest to improve the quality of its
existing portfolio.
2022 Interim Dividend
As the record date for the Tender Offer is the same as the
record date for the 2022 Interim Dividend, Shareholders who
participate in the Tender Offer will continue to receive the 2022
Interim Dividend, being 2.60 pence per Ordinary Share, in respect
of any Ordinary Shares tendered.
Substantial Shareholders
The Sten and Karin Mortstedt Family & Charity Trust which,
through wholly owned subsidiaries of Creative Value Investment
Group, holds 51.46 per cent of the issued Ordinary Share Capital in
the Company, and Bengt Mortstedt, who holds 6.52 per cent of the
issued Ordinary Share Capital in the Company, have indicated to the
Board that they intend to take up their pro rata entitlement under
the Tender Offer.
Expected Timetable of Events
Latest time and date for receipt of 11.00 a.m. on 7 September
proxy appointments 2022
Ex Dividend Date for 2022 Interim Dividend 8 September 2022
--------------------------
Record Date for 2022 Interim Dividend 9 September 2022
--------------------------
General Meeting 11.00 a.m. on 9 September
2022
--------------------------
Latest time and date for receipt of 3.00 p.m. on 9 September
Tender Forms and TTE instructions from 2022
CREST Shareholders
--------------------------
Tender Offer closes 3.00 p.m. on 9 September
2022
--------------------------
Record Date for the Tender Offer 6.00 p.m. on 9 September
2022
--------------------------
Outcome of Tender Offer announced On 12 September 2022
--------------------------
Cheques despatched for certificated By 16 September 2022
Ordinary Shares purchased pursuant to
the Tender Offer and payment through
CREST for uncertificated Ordinary Shares
purchased pursuant to the Tender Offer
--------------------------
CREST accounts credited with uncertificated By 16 September 2022
Ordinary Shares unsuccessfully tendered
and despatch of balance share certificates
for unsold certificated Ordinary Shares
and share certificates for unsuccessful
tenders of certificated Ordinary Shares
--------------------------
2022 Interim Dividend payment date 3 October 2022
--------------------------
Details of the action to be taken to participate in the Tender
Offer and how to vote at the General Meeting are set out in the
Circular. A summary of the taxation consequences of the Tender
Offer for UK resident Shareholders is also set out in the Circular.
However, Shareholders are advised to consult their own professional
advisers regarding their own tax position.
Copies of the Circular, form of proxy and Tender Form have been
submitted to the FCA's National Storage Mechanism and are available
for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
The Circular will also shortly be available on the CLS website
at www.clsholdings.com , in the Investor Relations section under
Shareholder Documents. Copies of the documents may also be obtained
from the Company Secretary.
Enquiries:
David Fuller
Company Secretary
CLS Holdings plc
+44 (0)20 7582 7766
Liberum Capital Limited
Richard Crawley
Jamie Richards
+44 (0)20 3100 2000
Liberum Capital Limited, which is authorised and regulated in
the United Kingdom by the FCA, is advising CLS in relation to the
Tender Offer and no one else and will not be responsible to anyone
other than CLS for providing the protections afforded to the
customers of Liberum Capital Limited nor for providing any advice
in relation to the Tender Offer, the contents of this announcement
or any transaction, arrangement or other matter referred to in this
announcement.
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END
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