Release date: 24 September 2013
Embargoed until: 07:00
CLS Holdings plc
("CLS", the "Company" or the "Group")
Holding in Catena AB
CLS notes that at yesterday's Extraordinary General Meeting ("EGM") of Catena AB ("Catena"), a company listed on the Stockholm Stock Exchange and in which the Group currently owns 29.99% of the issued share capital, a resolution was passed to issue new shares in payment for an acquisition.
The Group considers that the acquisition by Catena for SEK 1.145 billion (approximately £112 million) of a portfolio of 43 logistics and warehouse properties with a total lettable area of 655,000 sq m is in Catena's best interests, as it will provide risk diversification from Catena's current sole development at Haga Norra, Stockholm, increase its capital base and strengthen the platform for its long-term success. The transaction is classed as a reverse takeover in accordance with Swedish Company Law and the rules of the Stockholm Stock Exchange.
Following the issuance of the new shares, the Group's holding in Catena will be reduced to 13.8%. In accordance with IFRS, Catena will cease to be an associate of CLS and will be accounted for as an available-for-sale investment. Consequently, CLS will account for dividends received from Catena, and will revalue its investment to fair value at each balance sheet date by reference to Catena's share price. At yesterday's closing price of Catena's shares, such a revaluation would increase the Group's pro forma net assets by £14.9 million, equating to 35 pence per share.
Sten Mortstedt, Executive Chairman of CLS Holdings plc, commented:
"This transaction is very good news for shareholders of Catena and of CLS as it enables Catena to move forward to maximise the development opportunity at Haga Norra, Stockholm, with a reduced investment risk profile. The 23% rise in the Catena share price following the announcement of the acquisition is evidence of the market's positive view on the transaction."
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For further information, please contact:
CLS Holdings plc +44 (0)20 7582 7766
www.clsholdings.com
Sten Mortstedt, Executive Chairman
Henry Klotz, Executive Vice Chairman
Richard Tice, Chief Executive Officer
Liberum Capital Limited +44 (0)20 3100 2222
Tom Fyson
Charles Stanley Securities +44 (0)20 7149 6000
Mark Taylor
Kinmont Limited +44 (0)20 7087 9100
Jonathan Gray
Smithfield Consultants (Financial PR) +44 (0)20 7903 0669
Alex Simmons
Catena AB +44 (0)20 7582 7766
http://catenafastigheter.se/en/
Henry Klotz, Non-Executive Chairman
