CLI Cls Holdings Plc

RNS No 3162c
CLS HOLDINGS PLC
6th November 1998


The Tender Offer is not being made directly or indirectly in or into the
United States, Canada, Australia, South Africa, the Republic of Ireland or
Japan and this announcement should not be sent in or into the United States,
Canada, Australia, South Africa, the Republic of Ireland or Japan.

Proposed purchase of up to 2,890,966 Ordinary Shares
by way of a Tender Offer

Introduction

The Company announced on 25 September 1998 that the Board had decided, subject
to shareholders' approval, to purchase by way of a Tender Offer at 125p per
share up to 2,890,966 Ordinary Shares, representing approximately 1 Ordinary
Share for every 40 Ordinary Shares in issue.

In addition it is the Board's current intention to purchase up to 11,297,900
Ordinary Shares in accordance with the authority given to the Company at the
Company's last annual general meeting (in addition to the Ordinary Shares to
be re purchased pursuant to the Tender Offer).

The Company is today posting a document, together with a Tender Form, to
shareholders in connection with the Tender Offer.

Background to and reasons for the Tender Offer

The Company's shares are trading at a significant discount to its published
net assets per share of 160.8p as shown in the Company's unaudited interim
statement for the six months ended 30 June 1998.  In addition, the Company has
free cash resources and the Board is of the view that the Tender Offer would
be an appropriate means of effecting a return of value to Shareholders.  The
Board believes that non-participating shareholders will also benefit from the
Company purchasing Ordinary Shares since it expects that the Tender Offer will
enhance the Company's net assets per share.  This should not be interpreted to
mean that net assets per share will necessarily be greater than in any
previous year.

The Tender Offer

The Board is proposing that the Company should make a Tender Offer to purchase
up to 2,890,966 Ordinary Shares, representing approximately 2.5 per cent of
the current issued ordinary share capital of the Company, at 125p per share. 
This compares to the average middle market price of the Ordinary Shares for
the ten business days ending on 5 November 1998 of 105.9 p per share.  In
addition, the interim dividend of 2.4p (net) per Ordinary Share in respect of
the six months ended 30 June 1998 will be paid on 27 November 1998 to
shareholders on the Company's share register at the close of business on 9
October 1998.

The Tender Offer will be open to all holders of Ordinary Shares on the
Company's share register on the Record Date who may participate in the Tender
Offer by tendering either all or a proportion of their registered holdings of
Ordinary Shares.  Each Shareholder will be entitled to sell under the Tender
Offer up to 1 Ordinary Share for every 40 Ordinary Shares registered in his
name on the Record Date, rounded down to the nearest whole number of Ordinary
Shares.  The Tender Offer will also present tendering Shareholders with an
opportunity to sell more than their pro rata entitlement of Ordinary Shares to
the extent that other Shareholders tender less than their pro rata
entitlement.  If the number of Ordinary Shares validly tendered exceeds
2,890,966 and if and to the extent that any Shareholders have tendered less
than their pro rata entitlement under the Tender Offer, surplus tenders will
be accepted in proportion to the number of additional Ordinary Shares tendered
so that the total number of Ordinary Shares purchased pursuant to the Tender
Offer does not exceed 2,890,966.

No Ordinary Shares will be purchased in relation to the Tender Offer unless
the Resolutions to be proposed at the EGM of the Company to be held on 1
December 1998 are passed.  The Tender Offer will be void if less than 1 per
cent of the issued ordinary share capital of the Company in aggregate is
tendered.

Tenders may only be made on Tender Forms which are personal to the
shareholder(s) named on it and may not be assigned or transferred.

A Tender Form once submitted cannot be withdrawn.  To be valid, Tender Forms
must be received by the Receiving Agent no later than 3.00 pm on 27 November
1998.

Directors Intentions

The Directors have indicated their intention to tender 1 Ordinary Share for
every 40 Ordinary Shares in which they are beneficially interested.

Notification of Interests

Under section 198 of the Act, certain substantial Shareholders are required to
notify their interests in Ordinary Shares to the Company.  Following the
Company's purchase of Ordinary Shares in relation to the Tender Offer, the
nominal value of the Ordinary Shares in which a Shareholder is interested when
taken as a percentage of the nominal value of the Company's issued ordinary
share capital may change giving rise to an obligation on the Shareholder to
notify the Company within two days of becoming aware of such change.  

Extraordinary General Meeting

An extraordinary general meeting has been convened to be held at 6 Spring
Gardens, Citadel Place, Tinworth Street, London SE11 5EH on 1 December 1998 at
10.00 am at which the following Resolutions will be proposed:

(a) a special resolution to authorise the Company to purchase Ordinary Shares
pursuant to the Tender Offer;

(b) an ordinary resolution to approve purchases from Directors pursuant to
section 320 of the Act;

(c) an ordinary resolution on which a poll will be taken to approve the waiver
by the Panel of any Rule 9 obligation which may otherwise arise as a result of
such purchases; and

(d) an ordinary resolution on which a poll will be taken to approve the waiver
by the Panel of any Rule 9 obligation which may arise as a result of the
exercise by Glyn Hirsch of his share options.

Due to their interest in the Tender Offer, the Directors and their families
will abstain from voting on the ordinary Resolutions to approve the waivers by
the Panel at the EGM in respect of their combined interests of 53,249,739
Ordinary Shares representing approximately 46 per cent of the Company's issued
ordinary share capital.

Recommendation

The Directors, who have been so advised by HSBC Investment Banking, consider
that the Tender Offer and the other proposals described in the document to
shareholders are in the best interests of the Company and its shareholders as
a whole.  In providing advice to the Directors, HSBC Investment Banking has
taken into account the Directors' commercial assessments.  Accordingly, the
Directors unanimously recommend that shareholders vote in favour of the
Resolutions as they intend to do (other than in relation to the Resolutions to
approve the waivers by the Panel on which, due to their interests, they will
abstain from voting) in respect of their own holdings of 53,249,739 Ordinary
Shares, representing approximately 46 per cent of the issued ordinary share
capital of the Company.

S A Mortstedt
Executive Chairman

For further information, please contact:

Glyn Hirsch, Chief Executive, CLS Holdings plc       0171 582 7766
Brian Basham, Chris Skyrme, Basham and Coyle         0171 253 3300

In connection with the transactions described in this document, HSBC
Investment Banking, a division of HSBC Investment Bank plc which is regulated
by the Securities and Futures Authority Limited, is acting for CLS Holdings
plc and is not acting for anyone else and will not be responsible to anyone
other than CLS Holdings plc for providing protections afforded to customers of
HSBC Investment Banking or for advising them in relation to such transactions.


END


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