SALOMON Inc is planning to issue 20 million call warrants on Dairy Farm International Holdings. The two-year warrants will be at $2.80 each. and will expire on May 24, 1995. Under the terms of the issue, the warrants convert on a one-to-one basis at an exercise price of $12.90. This represents a premium of 21.7 per cent and a nominal gearing of 4.6 times, in line with previous issue terms. The implied volatility of the issue was not available. Salomon said the manager, Salomon Brothers International, was placing the issue with professional investors and securities dealers. To date there have been two other issues of covered warrants on Dairy Farm, from British-based Robert Fleming and SBC Derivatives. They have been listed on the stock market. Last month these had historic volatilities of 35 per cent and implied volatility ranging from 35 per cent to more than 75 per cent over a three-month period. To date the only major index stock on which no covered warrants have been successfully issued is CITIC Pacific. An issue was placed on the stock of Cheung Kong (Holdings) by Robert Fleming in the spring after Barclays de Zoete Wedd terminated its own plans to undertake such an issue, apparently due to conflict of interest.