Filofax Group PLC - Cash Offer - PART 1

RNS No 4118m
FILOFAX GROUP PLC
24th September 1998

PART 1

Not  for  release, publication or distribution in or
into Canada, Australia or Japan

                   Day Runner UK plc
   (a wholly owned subsidiary of Day Runner, Inc.)

                     Cash offer

                         for

                  Filofax Group plc

Summary

The  Board  of Day Runner announces a cash offer to
acquire  the entire issued and to be issued ordinary
share capital of Filofax. The  Offer is being made by
Wasserstein Perella on behalf of  Day Runner UK, a
wholly owned subsidiary of Day Runner.  Cazenove  is
broker to the Offer.

The Offer:

*    is 200 pence in cash for each Filofax Share

*    values  the entire issued ordinary share
capital of Filofax at approximately #47.9 million

*    represents a premium of approximately 42.9 per
cent.  over yesterday's closing middle market price
of 140 pence per Filofax Share

*    is  higher  than  any daily closing price
since  Filofax's profit warning in July 1996

*    represents a multiple of 13.3x Filofax's 1998
earnings  per share, before the loss attributable to
Henry Ling Day  Runner  markets personal organising
products to  broad-based consumer audiences through
retail distribution channels.   It  is the  leading
producer of paper-based personal organisers for  the
US retail market and also supplies a number of
related organising products.  Through a careful
strategy of building its brand,  Day Runner  has seen
sales increase at a compound annual growth  rate of
over 18 per cent. over the last five years to
US$167.8 million for the year ended 30 June 1998.  In
the same period Day Runner's net income increased at
a compound annual growth rate of over  27 per cent.
This performance is attributable almost entirely to
organic growth.

Day Runner has closely followed Filofax and observed
how in recent years Filofax has struggled to find a
way forward, failed to develop the Filofax brand and
failed to deliver value:

*   it has been ex-growth since 1996

*   its share price has underperformed the FTSE All-
Share Index by over 59 per cent. since          1
January  1996

*   its diversification strategy has failed

*   it has had reorganisations and reviews but has
not delivered results

*   its  talks  with third parties earlier this
year  did  not deliver value

*   it  has  itself  recently pointed  towards
reduced  growth expectations

Commenting  on the Offer, Mark Vidovich, Chairman of
Day  Runner, said today:

"We  are  offering a serious price for an
underperforming company that  lacks  direction.
Filofax needs Day  Runner's  skills  to develop the
brand further and take the business forward."

Press Enquiries:

Day Runner            Mark Vidovich         Tel: [phone]
                      Judy Tucker           Tel: [phone]

Wasserstein Perella   Howard Covington      Tel: [phone]
                      Karen Dodd            Tel: [phone]

Cazenove              Julian Cazalet        Tel: [phone]
                      Ed Byers              Tel: [phone]

Brunswick             James Bradley         Tel: [phone]
                      Lucas van Praag       Tel: [phone]

The  Offer is not being made, directly or indirectly,
in or into, or  by  use  of  the mails of, or by any
means or instrumentality (including, without
limitation, telephonically or electronically) of
interstate  or foreign commerce of, or any
facilities  of  a national  securities exchange of,
Canada, Australia or Japan  and the  Offer  will not
be capable of acceptance by  any  such  use, means,
instrumentality  or facilities  or  from  within
Canada, Australia or Japan, except pursuant to any
applicable exemption. The Loan Notes which may be
issued pursuant to the Offer have not been,  and
will not be, registered under the Securities  Act  or
under  any  of the relevant securities laws of any
State  of  the United  States, Canada, Australia or
Japan.  Accordingly,  unless an exemption under the
Securities Act or such relevant securities laws  is
applicable, the Loan Notes may not  be  offered,
sold, resold, delivered or distributed, directly or
indirectly,  in  or into  the United States, Canada,
Australia or Japan and will  not be available to US
Persons.

Wasserstein  Perella,  which  is  regulated  in  the
UK  by  The Securities  and  Futures Authority
Limited,  is  acting  for  Day Runner  and Day Runner
UK and no one else in connection with  the Offer and
will not be responsible to anyone other than Day
Runner and  Day  Runner  UK  for providing the
protections  afforded  to customers  of  Wasserstein
Perella  nor  for  giving  advice  in relation to the
Offer.

This summary should be read in conjunction with the
attached announcement.

Not  for  release, publication or distribution in or
into Canada, Australia or Japan

                        Day Runner UK plc
                         (a wholly owned
                        subsidiary of Day
                          Runner, Inc.)

                           Cash offer

                               for

                        Filofax Group plc

Introduction
The  Board of Day Runner announces the terms of a
cash offer  for Filofax.   The  Offer  is  being made
by Wasserstein  Perella  on behalf of Day Runner UK,
a wholly owned subsidiary of Day Runner, for the
entire issued and to be issued ordinary share capital
of Filofax.  Cazenove is broker to the Offer.

The Offer
The Offer is being made on the following basis:

     For each Filofax Share 200 pence in cash

The  Offer values Filofax's issued share capital at
approximately #47.9 million.
The Offer represents a premium of approximately 42.9
per cent. to yesterday's closing middle market price
of 140 pence per  Filofax Share  and a multiple of
13.3x Filofax's 1998 earnings per share,
before  the loss attributable to Henry Ling.  It is
also a higher price than any daily closing price
since Filofax's profit warning in July 1996
The  Offer will be subject to the conditions and on
the terms set out  in Appendix I and on the further
terms to be set out in  the Offer Document.
Filofax Shares will be acquired pursuant to the Offer
fully  paid and  free  from  all liens, equities,
charges,  encumbrances  and other  interests  and
together with all rights now  or  hereafter attaching
thereto, including, without limitation, the  right
to receive   and   retain  all  dividends  and  other
distributions announced, declared, made or paid after
31 March 1998,  save  for the  final  ordinary
dividend of 2.42 pence  per  Filofax  Share payable
on 30 October 1998.

The  Offer will extend to all existing issued Filofax
Shares  and any  Filofax Shares which are
unconditionally allotted or  issued prior to the date
on which the Offer closes (or such earlier date not
(without  the consent of the Panel) being earlier
than  the date  on which the Offer becomes or is
declared unconditional  as to acceptances or, if
later, the first closing date of the Offer, as  Day
Runner  UK may decide) as a result of  the  exercise
of options under the Filofax Share Schemes or
otherwise.

Background to and reasons for the Offer
Day  Runner  has  closely followed Filofax and
observed  how  in recent  years Filofax has struggled
to find a way forward, failed to develop the Filofax
brand and failed to deliver value:

*   it has been ex-growth since 1996

*   its share price has underperformed the FTSE All-
Share Index by over 59 per cent. since 1 January
1996

*  its diversification strategy has failed

*  it has had reorganisations and reviews but has
not delivered results 

*  its  talks  with third parties
earlier this  year  did  not deliver value 

*  it  has  itself  recently pointed  towards  reduced  growth
expectations

Day  Runner has believed for some time that a
combination of  Day Runner  and  Filofax  would
create a much  stronger  platform  to develop  the
Filofax brand and so create value for both  sets  of
shareholders.    In  many  ways  Day  Runner   is
the logical international  partner for Filofax.  Day
Runner and  Filofax  are complementary  both in
geographical coverage and in  distribution channels.
In  November  1997,  Filofax announced that it  had
initiated  a review  of the strategic opportunities
open to it.  This  led  to talks  with  a  number of
parties regarding strategic  alliances, joint
ventures  and  the  sale of the  group.   Day  Runner
was astounded  that  despite  this apparently  far
reaching  review, Filofax  made no attempt during
this period to develop a dialogue with  Day Runner.
Filofax's talks came to nothing and failed  to
deliver value for Filofax's Shareholders.

Against  this  background,  Day Runner  believes  it
is  in  the interests of the business and its
shareholders for Day Runner  to make a public case
for a combination.  Day Runner is prepared  to offer
a  full  cash  price  for  Filofax  despite  the
current uncertainties in financial markets and the
world economy  and  is confident in its ability to
develop the Filofax brand  in  a  way that current
management has been unable to do.

Information on Day Runner UK

Day  Runner  UK  is  an indirect wholly owned
subsidiary  of  Day Runner, and has been established
in order to implement the Offer. To  date,  Day
Runner UK has engaged in no activities other  than
those  incidental  to its incorporation and  the
making  of  the Offer.

Information on Day Runner
Day  Runner  markets personal organising products to
broad-based consumer audiences through retail
distribution channels.   It  is the  leading producer
of paper-based personal organisers for  the US retail
market and also supplies a number of related
organising products.  Day Runner is headquartered in
Irvine, California. Its shares  are  quoted on The
Nasdaq Stock Market in the US  (ticker symbol "DAYR"), and it
has  a  market   capitalisation of
approximately US$ 229 million (#136 million).

Through a careful strategy of building its brand, Day
Runner  has seen  sales increase at a compound annual
growth rate of over  18 per  cent.  over  the last
five years.  In the  same  period  Day Runner's net
income increased at a compound annual growth rate of
over  27  per  cent.   This  performance is
attributable  almost entirely to organic growth.

In  the  year  ended  30 June 1998, Day Runner
reported  audited consolidated operating profit of
US$25.6 million (# 15.2 million) on  sales of
US$167.8 million (# 99.9 million).  This represented
sales  growth of 31.8 per cent. over the prior year.
At  30  June 1998,  Day  Runner had shareholders'
funds of US$74.5 million  (# 44.4 million).

Day  Runner has established a strong retail
distribution  network in  the  US,  where its
products are carried by more than  20,000 retail
stores.  During its fiscal year ended 30 June  1998,
Day Runner  sold more than 6 million organisers and
approximately  20 million  refills,  which  include
calendars,  other  pages and accessories.

A  key element of Day Runner's strategy has been to
identify  and cultivate  new  sources  of  demand for
organisers  by  creating organisers  and planners
designed to appeal to distinct  consumer segments,
from business and professional people to students
and housewives.    All   of  these  products  have
been internally developed.   Suggested retail prices
for Day Runner's  organisers range  from  US$4  to
$150 (approximately #  2.38  to #89.29).
Organiser lines include:

    Day Runner System, the original Day Runner
time management system

    PRO Business System, designed for business and
professional people

   FactCentreT, aimed at budget-conscious consumers
    4-1-1T Student Planners
    PerennialsT, designed to appeal to young women
    Licensed  products featuring DILBERTT, The
Mickey Unlimited Brand  of  the Walt Disney Co., THE
FAR SIDE and Warner  Bros. Looney TunesT classic
cartoon characters

To  leverage  its brand name and strong retail
distribution,  Day Runner  also  develops,
manufactures and  markets  a  number  of related
organising  products.   Sales  of  related organising
products grew by 221 per cent. in the year ended 30
June 1998 and represented  19.6  per  cent.  of Day
Runner's  total  turnover. Internally  developed
related organising products, virtually  all of which
have  been  introduced  since  March  1995,   include
telephone/address books, appointment books, business
accessories, pocket  calendars, desk calendars and
several lines of organising wallboards, among others.
Day  Runner's student planners have established Day
Runner  as  a supplier  of  back-to-school products.
Day Runner's  success  at building  its  back-to-
school business since 1994  has  been  the primary
factor in reducing the seasonality of Day Runner's
sales by  lessening its dependence on calendar year-
end purchasing  and establishing a second strong
selling season.  Day Runner's  sales in  the  quarter
ended 30 June, the primary quarter for  back-toschool
shipments, have grown from US$14.0 million in  1993,
the year  before  Day  Runner introduced 4-1-1
Student  Planners,  to US$50.9 million in 1998.

Information on Filofax
Filofax  is  a manufacturer and supplier of
stationery  products. Filofax's  core business is the
supply of ring binder  organisers under  the
Filofax, Microfile and Lefax brands.  Other  products
include  time  management systems, business forms
and  telephone message pads and up-market writing
instruments.

In  the year ended 31 March 1998, Filofax's
consolidated turnover was  #42.2 million (#37.7
million for continuing operations)  and operating
profit was #4.3 million (#6.1 million  for
continuing operations).  Net assets at 31 March 1998
were #10.5 million.

The Loan Note Alternative
Instead  of  some  or all of the cash consideration
which  would otherwise  be  receivable  by  them
under  the  Offer,   Filofax Shareholders (other than
persons who are citizens or residents of the  United
States and certain other overseas persons)  accepting
the  Offer will be entitled to elect to receive Loan
Notes on the following basis:
  
  for each #1 of cash consideration under the Offer 
  #1 nominal of Loan Notes

The Loan Notes will be unsecured obligations of Day
Runner UK and will  be  issued, credited as fully
paid, in amounts and integral multiples  of #1
nominal value; all fractional entitlements  will be
disregarded and not paid.  The Loan Notes will bear
interest (from the date of issue to the relevant
holder of Loan Notes)  at a rate of 1.0 per
cent. per annum below LIBOR.  Interest on  the
Loan  Notes  will be payable annually in arrears on
30  September (or, if not a business day in any year,
on the first business day thereafter), commencing 30
September 1999.  The Loan  Notes  will be  redeemable
at  the option of the holders  on  each  interest
payment date from and including 30 September 1999
(or, if  not  a business  day,  on the first business
day thereafter  ).   Unless previously redeemed or
purchased, the Loan Notes will be redeemed on  30
September 2003 or, if not a business day,  on  the
first business day thereafter. The Loan Notes will,
subject to  certain conditions, be transferable but
no application is intended to  be made  for the Loan
Notes to be listed, or dealt in, on any  stock
exchange.  Payment of principal of and interest on
the Loan Notes will  be guaranteed by Day Runner.
The Loan Notes have not been, and will not be,
registered under the Securities Act or under any
other  securities laws and should not be offered,
sold,  resold, delivered or distributed, directly or
indirectly, in or into  the United  States,  Canada,
Australia or  Japan  and  will  not  be available  to
US Persons (except in transactions exempt  from  or
not  subject  to the registration requirements of the
Securities Act  or  the relevant securities laws of
any State of the  United States, Canada, Japan or
Australia).

The  Loan  Note  Alternative will be  conditional  on
the  Offer becoming or being declared unconditional
in all respects and will remain open for so long as
the Offer remains open for acceptance. No  Loan
Notes  will  be issued unless, by the  time  the
Offer becomes or is declared wholly unconditional,
valid elections from accepting Filofax Shareholders
have been received for at least #5 million nominal
value of Loan Notes (or such lesser value as  Day
Runner  UK  may decide).  If insufficient elections
are received, Filofax  Shareholders  who  validly
elect  for  the  Loan   Note Alternative  will
instead receive cash in  accordance  with  the terms
of the Offer.  Details of the principal terms of the
Loan Notes will be contained in the Offer Document.
Financing for the Offer Day  Runner  will  finance the Offer out of  medium
term  credit facilities which it has put in place
both for this purpose and to provide working capital
for the Day Runner Group in future.

Employees
The   Board  of  Day  Runner  has  confirmed  that
the  existing employment rights, including pension
rights, of the employees  of Filofax will be fully
safeguarded.

Filofax Share Schemes

The  Offer extends to any Filofax Shares
unconditionally allotted or  issued prior to the date
on which the Offer closes  (or  such earlier date as
Day Runner UK may determine) as a result  of  the
exercise of options granted under the Filofax Share
Schemes. To
the  extent  that such options are not or cannot be
exercised  in full,  it is intended that appropriate
proposals will be made  to option  holders under the
Filofax Shares Schemes in  due  course, once the
Offer has become unconditional in all respects.

General
Neither Day Runner nor Day Runner UK, nor any of
their respective directors  nor,  so  far as Day
Runner UK is  aware,  any  person acting  in  concert
with Day Runner or Day Runner  UK,  owns  or controls
any  Filofax Shares or has any option  to  acquire
any Filofax Shares, or has entered into any
derivative referenced  to securities of Filofax which
remains outstanding.
The  Offer  Document, setting out details of the
Offer (including the  Loan  Note Alternative) and the
Form of Acceptance  will  be posted to Filofax
Shareholders as soon as practicable.  The Offer
will  be open for at least twenty business days from
the date  of the Offer Document.
The  availability  of  the Offer and any election
thereunder  to persons  outside  the  UK may be
affected  by  the  laws  of  the relevant
jurisdiction.   Such persons should  inform
themselves about and observe any applicable
requirements.

This  announcement does not constitute an offer or an
invitation to purchase any securities.

Certain  terms used in this announcement are defined
in  Appendix II.

Day Runner and PRO Business System are registered
trademarks, and FactCentre,  4-1-1 and Perennials are
trademarks of  Day  Runner, Inc. Disney.   DILBERT
is  a  trademark  of  United Feature
Syndicate,  Inc.   THE  FAR  SIDE is a  registered
trademark  of FarWorks,  Inc. LOONEY TUNES,
characters, names and  all  related indicia  are
trademarks of Warner Bros.   All  other  trademarks
remain the property of their respective companies.

Press Enquiries:

Day Runner            Mark Vidovich         Tel: [phone]
                      Judy Tucker           Tel: [phone]
Wasserstein Perella   Howard Covington      Tel: [phone]
                      Karen Dodd            Tel: [phone]

Cazenove              Julian Cazalet        Tel: [phone]
                      Ed Byers              Tel: [phone]

Brunswick             James Bradley         Tel: [phone]
                      Lucas van Praag       Tel: [phone]

Wasserstein  Perella,  which  is  regulated  in  the
UK  by  The Securities  and  Futures Authority
Limited,  is  acting  for  Day Runner  and Day Runner
UK and no one else in connection with  the Offer and
will not be responsible to anyone other than Day
Runner and  Day  Runner  UK  for providing the
protections  afforded  to customers  of  Wasserstein
Perella  nor  for  giving  advice  in relation to the
Offer.

The  Offer is not being made, directly or indirectly,
in or into, or  by  use  of  the mails of, or by any
means or instrumentality (including, without
limitation, telephonically or electronically) of
interstate  or foreign commerce of, or any
facilities  of  a national  securities exchange of,
Canada, Australia or Japan  and the  Offer  will not
be capable of acceptance by  any  such  use, means,
instrumentality  or facilities  or  from  within
Canada, Australia or Japan except pursuant to any
applicable exemption. The Loan Notes which may be
issued pursuant to the Offer have not been,  and
will not be, registered under the Securities  Act  or
under  any  of the relevant securities laws of any
State  of  the United  States, Canada, Australia or
Japan.  Accordingly,  unless an exemption under the
Securities Act or such relevant securities laws  is
applicable, the Loan Notes may not  be  offered,
sold, resold, delivered or distributed, directly or
indirectly,  in  or into  the United States, Canada,
Australia or Japan and will  not be available to US
Persons.


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