RNS No 5349c
THISTLE HOTELS PLC
23rd March 1999


THISTLE HOTELS PLC RE: PROPOSED CAPITAL RETURN

NOT FOR RELEASE INTO THE UNITED STATES OF AMERICA, CANADA,
AUSTRALIA OR JAPAN


THISTLE HOTELS PLC ("THISTLE")


PROPOSED RETURN OF CAPITAL TO SHAREHOLDERS BY WAY OF A SPECIAL
DIVIDEND AND AN EIGHT FOR NINE CAPITAL CONSOLIDATION OF ORDINARY
SHARES (THE "PROPOSALS")

On 9 September 1998, the Board of Thistle announced its intention
to return #185 million to shareholders in two tranches.  The
first tranche of approximately #92.6 million was successfully
returned to shareholders in December 1998 by way of a B Share
issue.

A circular dated today will be sent to shareholders setting out
full details of the proposals for the return of the second
tranche of approximately #92.4 million, which represents
approximately 11 per cent. of Thistle's market capitalisation at
the close of business on 19 March 1999.

BACKGROUND

Thistle is strongly cash generative and produced cash flows from
operating activities of #72.5 million in the 28 week period to 12
July 1998 and #134.6 million in the year ended 27 December 1998.
At 27 December 1998 Thistle had gearing of 31.1 per cent.

Against this background the Board believes that a significant
amount of capital can be returned to shareholders, whilst
maintaining a prudent financial structure and preserving the
group's ability to continue with the future development of the
business and its existing distribution policy.

THE PROPOSALS

In summary, the Proposals are as follows: the payment of a
special dividend of 17.06p("Special Dividend") per existing
ordinary share of 22 4/5p ("Existing Ordinary Shares") as an
interim dividend to be made to Shareholders on the register at
4.30 p.m. on Friday, 16 April 1999 (which will be the Record
Date); and the consolidation of the issued ordinary share capital
on the basis that for every 9 Existing Ordinary Shares held on
the Record Date, shareholders will receive 8 New Ordinary Shares
of 25 13/20p ("New Ordinary Shares").

Assuming that the Proposals are implemented, approximately #92.4
million in cash will be returned to Shareholders, representing
approximately 11 per cent. of the market capitalisation of
Thistle (based on the closing middle market quotation, as derived
from the Official List on 19 March 1999).

In order to reflect the payment of the Special Dividend, the
ordinary share capital of Thistle will be consolidated
simultaneously with the payment of the Special Dividend on the
basis that Shareholders will receive 8 New Ordinary Shares for
every 9 Existing Ordinary Shares, and so on in proportion to
their holding of Existing Ordinary Shares.  This will facilitate
comparability with prior year per share data.  The consolidation
factor has been determined by reference to the closing price of
the Existing Ordinary Shares on 19 March 1999 and adjusted for
the final dividend payment of 3 pence (net) per Existing Ordinary
Share.  Other than in respect of their nominal value and subject
to the amendment to the Articles of Association to be made as
part of the Proposals, the New Ordinary Shares will have the same
rights and attributes as the Existing Ordinary Shares.

The payment of the Special Dividend is conditional upon the
approval of shareholders of the capital consolidation and on
admission of the New Ordinary Shares to the Official List of the
London Stock Exchange.  The circular to shareholders includes a
notice convening an extraordinary general meeting of the company
for Friday, 16 April 1999 at 3 p.m.  If the Proposals are
approved, dealings in Existing Ordinary Shares are expected to
continue until the close of business on Friday, 16 April 1999 and
dealings in the New Ordinary Shares are expected to commence on
Monday, 19 April 1999.

ENQUIRIES:

Hartley Sutcliffe                 0113 243 9111
Thistle Hotels

Jeremy South / Mumtaz Naseem      0171 885 2500
BT Alex. Brown International

END

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