CLS Holdings Regulatory News (CLI)

Release date: 11 May 2022

Embargoed until: 07:00 am

CLS Holdings plc ("CLS" or the "Group")

Updated Dividend Policy, Proposed Tender Offer and Trading Update

CLS, a leading FTSE250 office space specialist with a £2.3 billion portfolio in the UK, Germany and France, today announces an updated dividend policy, a proposed tender offer following the publication of the Group's half yearly financial results on 10 August 2022 and a trading update.

Updated Dividend Policy

Following the conversion of its UK business to a REIT, CLS has updated its dividend policy for the 2022 financial year onwards. The company will maintain a progressive dividend policy, with a dividend cover of 1.2 to 1.6 times EPRA earnings (previously 1.5 to 2.0 times). It is expected that FY2022 dividend cover will be around the middle of the new range.

Proposed Tender Offer

CLS remains committed to its strategy and business model to drive long-term value including its planned 2022 disposals, which to date have been at or above valuations. Nevertheless, the Board of CLS believes the share price discount to its net tangible assets ("NTA") is unjustified and believes that it is in the best interests of all shareholders to take steps to reduce this discount. 

Subject to the completion of a number of property sales by the end of the first half of 2022, and the significant share price discount to NTA persisting, CLS intends to undertake a tender offer of its ordinary shares, the terms of which will be announced following the publication of the Group's half yearly financial results on 10 August 2022. The quantum of any tender offer will be scaled to ensure the Group's loan-to-value is still within an acceptable level by the year-end.

Trading Update

CLS continues to trade in line with market expectations.

Fredrik Widlund, Chief Executive Officer of CLS, commented:

"I am pleased to announce an enhancement to our dividend policy following the conversion of our UK business to a REIT, which will be applied to all future dividends until further notice. 

"The Board is clear that the current share price discount to NTA is unjustified given that we are in the process of disposing of a number of properties at or above 31 December 2021 valuations and the quality of our portfolio is proving resilient in a challenging macro environment. Consequently, CLS intends to undertake a tender offer following the 2022 half yearly financial results."

This announcement contains inside information.

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For further information, please contact:

CLS Holdings plc

(LEI: 213800A357TKB2TD9U78)

www.clsholdings.com

Fredrik Widlund, Chief Executive Officer

Andrew Kirkman, Chief Financial Officer

+44 (0)20 7582 7766

Liberum Capital Richard CrawleyJamie Richards+44 (0)20 3100 2222

Panmure Gordon

Hugh Rich

+44 (0)20 7886 2733

Berenberg

Matthew Armitt

Richard Bootle

+44 (0)20 3207 7800

Edelman Smithfield (Financial PR)Alex Simmons

Hastings Tarrant

+44 (0)20 3047 2000