TIDMSBI
RNS Number : 2817H
SourceBio International PLC
23 November 2022
SourceBio International plc
( " SourceBio " , the " Company " or the " Group " )
Proposed Cancellation of Admission of Ordinary Shares to Trading
on AIM, Tender Offer,
Re-Registration as a Private Limited Company,
Adoption of New Articles of Association
and
Notice of General Meeting
SourceBio (AIM: SBI) announces the proposed cancellation of
admission of its Ordinary Shares to trading on AIM, pursuant to
Rule 41 of the AIM Rules, a proposed tender offer pursuant to which
up to 11,071,810 Ordinary Shares (representing approximately 14.9
per cent. of the existing share capital of the Company) would be
purchased by the Company at a price of 115 pence per Ordinary
Share, re-registration as a private limited company and the
adoption of new articles of association.
A Circular is being posted to Shareholders setting out the
background to and reasons for the Proposals, along with a form of
proxy and a tender offer form. The Circular will include a notice
of a general meeting of the Company which is being convened for
midday on 20 December 2022 for the purposes of considering and, if
thought fit, approving the requisite Shareholder resolutions to
approve the Cancellation, Tender Offer, Re-registration and New
Articles.
Summary
1) Cancellation of admission of the Ordinary Shares to trading on AIM
2) The Company has received irrevocable undertakings from
certain Shareholders and Directors representing approximately 85.1
per cent. of the existing issued ordinary share capital of the
Company to vote in favour of the Proposals
3) Return of up to approximately GBP12.7 million to Qualifying
Shareholders via the Tender Offer at 115 pence per Ordinary Share,
representing approximately 14.9 per cent. of the Company's issued
share capital
4) The Company has received irrevocable undertakings from
certain Shareholders and Directors, representing approximately 79.2
per cent. of the existing issued ordinary share capital of the
Company, not to tender their Ordinary Shares under the Tender
Offer.
The Board believes that the Proposals would be in the best
interests of the Company and its Shareholders as a whole. Further
information on the Proposals is set out below and in the
Circular.
Terms defined in this Announcement bear the meaning set out in
the Appendix to this Announcement.
The Board has consulted with the Takeover Panel which has agreed
that it will waive any obligation on the Concert Party (as defined
in the appendix to this Announcement) to make a general offer under
Rule 9 and Rule 37 of the Takeover Code as a result of the Tender
Offer, provided that the holders of a majority of the Ordinary
Shares held by Independent Shareholders (as defined in the
Circular), confirm in writing that they would approve a Rule 9
Waiver, if a resolution to approve a Rule 9 Waiver were put to the
Independent Shareholders at the General Meeting. The Company is
pleased to announce that it has now received such written
confirmation.
Jay LeCoque, Executive Chairman, commented:
"We remain confident with progress and growth being delivered
across our core business units. Our key operational focus in
Healthcare remains the continued expansion and scale-up of record
Cellular Pathology and Digital Pathology volumes through the rest
of the year and beyond. Our Genomics business is having a strong
year and will be moving into an expanded new facility in Cambridge
at year end. Our Stability Storage business is delivering its
highest revenue year ever and we are expanding our service
capabilities to a broader customer base. The Board is encouraged
with the prospect of accelerating revenue and earnings growth as a
private company where management can focus more on the core needs
of the business, and for those shareholders not accepting the
tender offer, I look forward updating you as we progress."
The information contained within this Announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as amended by The
Market Abuse (Amendment) (EU Exit) Regulations 2019. Upon the
publication of this Announcement via the Regulatory Information
Service, this inside information is now considered to be in the
public domain.
Contacts:
SourceBio International plc www.sourcebiointernational.com
Jay LeCoque, Executive Chairman Via Walbrook PR
Tony Ratcliffe, Chief Financial Officer
Liberum (Nominated Advisor and Broker) Tel: 020 3100 2000
Richard Lindley / William Hall /
Miquela Bezuidenhoudt
Walbrook PR Limited Tel: 020 7933 8780 or sourcebio@walbrookpr.com
Paul McManus / Sam Allen Mob: 07980 541 893 / 07502
558 258
About SourceBio International plc
www.sourcebiointernational.com
SourceBio is a leading international provider of integrated
state-of-the-art laboratory services with clients in the
pharmaceutical, healthcare, clinical, drug development and life
sciences research industries, with a focus on improving patient
diagnosis, management and care. Group revenues are derived
primarily from three core business units:
-- Healthcare Diagnostics - Histopathology cancer screening, including
Digital Pathology and clinical diagnostic services for the NHS and
private healthcare providers across the UK
-- Genomics - DNA sequencing services and Precision Medicine offering
for pharmaceutical and biotechnology industries, academia, contract
research organisations (CROs) and other research groups in the UK,
Europe and North America
----------------------------------------------------------------------
-- Stability Storage - Controlled environmental storage services and
laboratory equipment validation services for pharmaceutical industry
in the UK, Ireland and North America
----------------------------------------------------------------------
More details on Group operations can be found here:
www.sourcebioscience.com
Expected timetable of events
Announcement of the proposed Cancellation 23 November 2022
and Tender Offer and posting of this
Circular, Form of Proxy and Tender Form
to Shareholders
Tender Offer opens 24 November 2022
Latest time and date for receipt of Forms Midday on 16 December
of Proxy 2022
General Meeting Midday on 20 December
2022
Anticipated date to announce results 20 December 2022
of the General Meeting
Latest time and date for receipt of Tender 1.00 p.m. on 16 December
Forms and share certificates in relation 2022
to the Tender Offer (i.e. close of Tender
Offer)
Latest time and date for receipt of TTE 1.00 p.m. on 16 December
Instructions from CREST Shareholders 2022
(i.e. close of Tender Offer)
Tender Offer Record Date 6 p.m. on 16 December
2022
Announcement of results of the Tender 20 December 2022
Offer
Cancellation of Ordinary Shares purchased 21 December 2022
by the Company pursuant to the Tender
Offer
CREST accounts credited for revised, By 23 December 2022
uncertificated holdings of Ordinary Shares
(or, in the case of unsuccessful tenders,
for entire holdings of Ordinary Shares)
CREST accounts credited in respect of 23 December 2022
Tender Offer proceeds for uncertificated
Ordinary Shares
Last day of dealings in the Ordinary 29 December 2022
Shares on AIM
Cancellation of admission of the Ordinary 30 December 2022
Shares to trading on AIM
Cheques despatched in respect of Tender 4 January 2023
Offer proceeds for certificated Ordinary
Shares
Return of share certificates in respect 4 January 2023
of unsuccessful tenders of certificated
Ordinary Shares
Despatch of balancing share certificates 4 January 2023
(in respect of certificated Ordinary
Shares) for revised, certificated holdings
in the case of partially successful tenders
Expected re-registration of the Company On or around 18 January
as a private limited company 2023
The General Meeting will be broadcast live on the Investor Meet
Company platform. Shareholders can sign up to Investor Meet Company
for free and add the Company via:
https://www.investormeetcompany.com/sourcebio-international-plc/register-investor
Overseas Shareholders should inform themselves about and observe
any applicable or legal regulatory requirements. If you are in any
doubt about your position, you should consult your professional
adviser in the relevant jurisdiction.
A summary of the taxation consequences for UK resident
Shareholders is also set out in the Circular. However, Shareholders
are advised to consult their own professional adviser regarding
their own tax position.
The Circular will also shortly be available on the Company's
website at www.sourcebiointernational.com .
Liberum Capital Limited, which is authorised and regulated in
the United Kingdom by the FCA, is acting exclusively for the
Company and no one else in connection with the Proposals and the
other matters referred to in this Announcement, and will not regard
any other person as a client in relation to the Proposals,
including the Cancellation and the Tender Offer, and will not be
responsible to anyone other than the Company for providing the
protections afforded to its clients, nor for providing advice, in
relation to the proposed Cancellation and Tender Offer, the
contents of this Announcement, the Circular or any other matter
referred to in this Announcement.
Further Information
1 Introduction
The Board announces that the Company intends to seek Shareholder
approval for the cancellation of the admission of the Company's
Ordinary Shares to trading on AIM.
The Board recognises that the effects of the Cancellation are
significant for Shareholders, in particular in terms of the loss of
the protections afforded to Shareholders by the AIM Rules and, in
time, the Takeover Code, and the loss of liquidity provided by the
existing listing arrangements. The Board therefore intends to
provide Qualifying Shareholders with the ability to realise some or
all of their shareholding in the Company through a Tender Offer
under which up to 11,071,810 Ordinary Shares (representing
approximately 14.9 per cent. of the existing issued ordinary share
capital of the Company) held by Qualifying Shareholders would be
purchased at a price of 115 pence per Ordinary Share. If the
maximum number of Ordinary Shares under the Tender Offer is
acquired, this will result in an amount of approximately GBP12.7
million being returned by the Company to Qualifying
Shareholders.
The Circular sets out the background to and reasons for the
Proposals and why the Directors believe the Proposals, including
the Cancellation and the Tender Offer, to be in the best interests
of the Company and its Shareholders as a whole. The Circular also
contains details on the procedure that should be followed by those
Qualifying Shareholders who wish to participate in the Tender
Offer. Shareholders are referred to Part II of the Circular for
further information on the Tender Offer. For the avoidance of
doubt, Shareholders are not obliged to tender their Ordinary Shares
in the Tender Offer.
The Board has consulted with the Panel which has agreed that it
will waive any obligation on the Concert Party to make a general
offer under Rule 9 and Rule 37 of the Takeover Code as a result of
the Tender Offer, provided that a majority of the Independent
Shareholders confirm in writing that they would approve a Rule 9
Waiver, if a resolution to approve a Rule 9 Waiver were put to the
Independent Shareholders at the General Meeting. The Board has
received such written confirmation from 70.5 per cent. of the
Independent Shareholders (as detailed further in paragraph 9
below).
The Company is seeking Shareholders' approval of the Proposals
at a General Meeting to be held by means of electronic facility on
20 December 2022 at midday. The notice of the General Meeting is
set out in Part VI of the Circular. Shareholders should note that
unless all of the Proposals are approved at the General Meeting,
the Tender Offer will not take place and the Cancellation will not
occur as currently proposed.
2 Background to the Cancellation
The Company's Ordinary Shares have been admitted to trading on
AIM since 26 October 2020. The main purpose of listing was to
accelerate the growth of the business, including a rapid scaling-up
of COVID-19 PCR testing capacity in response to exceptionally high
market demand, which was the Group's focus at the time. The net
proceeds of the share placing on Admission were utilised to
eliminate the Company's debt, to simplify the capital structure and
consequently to enable the Board to pursue appropriate
acquisitions.
The Board has conducted a review of the benefits and drawbacks
to the Company retaining its listing on AIM and maintaining its
existing corporate structure. The Board believes that the
Cancellation is in the best interests of the Company and its
Shareholders as a whole. In reaching this conclusion, the Board has
considered the following key factors:
(a) the Directors believe that one of the main benefits of a
company's shares being admitted to trading on AIM is the potential
to issue new shares to raise additional funds for investment or to
issue new shares as consideration for acquisitions. However, the
Directors believe that the Company would be unable to raise money
or issue Ordinary Shares as consideration for potential acquisition
targets at what the Directors believe to be a fair valuation;
(b) the Board believes that the Company's current share price
does not accurately reflect the future potential of the business,
especially given the significant growth opportunities in Cellular
and Digital Pathology. The Board's experience and opinion is that
many smaller publicly traded companies do not attract sufficient
institutional or retail investor attention which often leads to
share price erosion and consequently impacts the ability to use
properly valued shares for acquisitive growth;
(c) the Group has generated significant revenues and earnings
from high levels of COVID-19 PCR testing, and the business is now
focused on investing the cash generated into aggressively growing
the three core business units: Healthcare Diagnostics (Cellular and
Digital Pathology), Genomics and Stability Storage. There may be
corporate development and restructuring that is needed to drive and
develop such growth and expansion and the Directors believe that
this will be capable of being executed faster and more nimbly as a
private company;
(d) the Board believes that, as a private company, the growth
prospects and ability of the Company to command a much higher
valuation for the business on eventual exit would serve in the best
interest of Shareholders, to the extent that they retain their
holdings of Ordinary Shares post the Cancellation;
(e) there is limited trading in the Ordinary Shares. Over the
past 12 months 23,535,113 Ordinary Shares were traded, representing
approximately 31.7 per cent. of the issued share capital and giving
an average daily volume of approximately 93,393 Ordinary
Shares;
(f) the Company estimates that it could save annualised costs of
circa GBP500,000, being incremental costs resulting from the
Company being a public limited company with a listing on AIM - this
includes fees payable to its professional advisers, including the
nominated adviser and broker, and AIM fees as well as incremental
legal, insurance, accounting and auditing fees. There is also
considerable time spent by the Board on dealing with investor
relations and continuing obligations associated with the Company
being listed on the AIM market. These specific annualised costs are
significant, especially in the context of the Company's financial
results, for example: the adjusted EBITDA of approximately GBP2.1
million in the six months ended 30 June 2022. The Board believes
that these funds could be better utilised for the benefit of the
Company and its Shareholders; and
(g) accordingly, the disadvantages associated with maintaining
the AIM quotation are considered by the Directors to be
disproportionately high when compared to the benefits of being
listed on AIM, even though the absolute costs have been, so far as
reasonably possible, controlled and minimised by the Company.
3 Principal effects of the Cancellation
The principal effects of the Cancellation will be that:
(a) Shareholders will no longer be able to buy and sell Ordinary
Shares through a public stock market, and there will be no
alternative trading facility post Cancellation;
(b) the Company will no longer be required to announce material
events or full year or interim results through a regulatory news
service, although the Company may continue to release important
news through its website;
(c) the Company will adopt the New Articles (if approved by the
Shareholders), but will otherwise no longer be required to comply
with many of the corporate governance requirements applicable to
companies whose shares are traded on AIM;
(d) the Company will no longer be subject to the Disclosure
Guidance and Transparency Rules and will therefore no longer be
required to disclose significant shareholdings in the Company;
(e) the Company will no longer be subject to the AIM Rules, with
the consequence that the Shareholders will no longer be afforded
the protections provided by the AIM Rules. Such protections include
a requirement to obtain shareholder approval for reverse takeovers
and fundamental changes in the Company's business and to announce,
inter alia, certain substantial and/or related party transactions;
and
(f) the Cancellation and Tender Offer may have taxation
consequences for Shareholders. Shareholders should review Part III
of the Circular and if they are in any doubt about their tax
position they should consult their own professional independent
adviser immediately.
Further details on the effects of the Re-Registration and the
New Articles are set out in Part V of the Circular.
Shareholders should note that the Takeover Code will continue to
apply to the Company following the Cancellation for a period of ten
years (or such longer period as the Company shall decide). The
Company will also continue to be bound by the Companies Act 2006
(which requires shareholders' approval for certain matters)
following the Cancellation.
4 Cancellation process
Under the AIM Rules, the Cancellation can only be effected by
the Company after securing a special resolution of Shareholders in
a general meeting and the expiry of a period of 20 clear Business
Days from the date on which notice of the Cancellation is given to
the London Stock Exchange. This notice was given today. In
addition, a period of at least five clear Business Days following
Shareholders' approval of the Cancellation is required before the
Cancellation may become effective. The Resolutions seek (amongst
other matters) the approval of Shareholders for the Cancellation.
Assuming that the Resolutions are approved, it is proposed that the
Cancellation will take place by 7.00 a.m. on 30 December 2022.
Following the Cancellation, there will be no market facility for
dealing in the Ordinary Shares, no price will be publicly quoted
for the Ordinary Shares and the transfer of Ordinary Shares will be
subject to the provisions of the New Articles.
Following the Cancellation, the Company proposes to adopt
corporate governance practices and the New Articles which are
suitable for an unlisted company. The proposed revised New Articles
will be available to download from the Company's website
www.sourcebiointernational.com and further details on the New
Articles are set out in Part V of the Circular.
The Board intends to retain the same high levels of corporate
governance for the Company following the Cancellation. As such, it
is the Board's intention for the Company's Audit, Remuneration and
Nomination Committees to remain in place, as well as retaining the
role of the two independent non-executive directors.
5 Tender Offer
The Tender Offer will be open to all Qualifying Shareholders on
the Register on the Tender Offer Record Date, save for those who
are Shareholders subject to the securities laws of a Restricted
Jurisdiction.
The Board is proposing that the Company purchases from
Qualifying Shareholders up to 11,071,810 Ordinary Shares at 115
pence per Ordinary Share.
At the Latest Practicable Date, there are 74,183,038 Ordinary
Shares in issue. Should the maximum number of Ordinary Shares be
validly tendered, up to 11,071,810 Ordinary Shares may be purchased
under the Tender Offer for a maximum aggregate consideration of
GBP12,732,581.50.
The Tender Offer will close at 1.00 p.m. on 16 December 2022 and
tenders received after that time will not be accepted (unless the
Tender Offer is extended).
The Tender Offer is conditional on, among other things, the
passing of the Tender Offer Resolution as set out in the Notice of
General Meeting and on the satisfaction of the other conditions
specified in Part II of the Circular. The Tender Offer is also
conditional on there not arising any material adverse change or
certain other force majeure events prior to the closing of the
Tender Offer. Further details of these conditions are set out in
Part II of the Circular.
Full details of the Tender Offer, including the terms and
conditions on which it is made, are set out in Part II of the
Circular.
6 General Meeting
In order to comply with applicable company law and the AIM
Rules, the Proposals require the approval of Shareholders at a
general meeting of the Company. The Company is convening a general
meeting for midday on 20 December 2022, to be held by means of
electronic facility and at 1 Orchard Place, Nottingham Business
Park, Nottingham, NG8 6PX, to consider and, if thought fit,
pass:
(a) a special resolution to authorise and to approve the terms
under which the Tender Offer will be effected;
(b) a special resolution for the Cancellation;
(c) a special resolution relating to the Re-Registration; and
(d) a special resolution relating to the replacement of the
Company's current articles of association with the New
Articles.
Each of the Resolutions is a special resolution and, to be
passed, requires a majority of not less than 75 per cent. of
Shareholders who vote in person or by proxy at the General Meeting.
The Resolutions are interconditional, meaning that each of the
Resolutions is conditional on each other Resolution being passed.
As at the date of this Announcement, the Company has received
irrevocable undertakings from each of those persons set out in
paragraph 9 below, representing approximately 85.1 per cent. of the
Company's issued share capital, to vote in favour of the
Resolutions.
The Board believes that it is in Shareholders' best interests to
conduct the General Meeting, and, if approved, confirm the results
of the Tender Offer and the Cancellation as soon as possible.
Shareholders will find enclosed with the Circular a Form of
Proxy for use in connection with the General Meeting. Whether or
not you intend to tender any of your Ordinary Shares under the
Tender Offer you are requested to complete and return the Form of
Proxy as soon as possible and, in any event, so as to be received
by the Company's registrar, Equiniti, by post at Equiniti, Aspect
House, Spencer Road, Lancing, West Sussex BN99 6DA or online at
www.sharevote.co.uk , in each case by no later than midday on 16
December 2022.
As with the Company's recent Annual General Meeting,
Shareholders should use the facility to join the General Meeting
either online or telephonically via the Investor Meet Company (IMC)
platform and vote by returning their Form of Proxy to the Company's
registrars, Equiniti, or online (as detailed further in the Notes
to the Notice of General Meeting, which is set out in Part VI of
the Circular). There will be an opportunity for Shareholders to ask
questions on the IMC platform. Voting on the Resolutions at the
General Meeting shall be decided by way of a poll.
7 The Concert Party and the Takeover Code
The Concert Party
The Harwood Funds, the Continental Funds, Jay LeCoque, Marco
Fumagalli and Carlo Sgarbi (together, the Concert Party) are all
considered to be acting in concert with each other in relation to
the Company for the purposes of the Takeover Code. The Concert
Party currently holds 36,188,106 Ordinary Shares, representing in
aggregate 48.8 per cent. of the issued voting share capital of the
Company. Further details on the Concert Party are set out in
paragraph 3 of Part IV of the Circular.
The Takeover Code
The Takeover Code is issued and administered by the Panel. The
Takeover Code and the Panel operate to ensure fair and equal
treatment of shareholders in relation to takeovers, and also to
provide an orderly framework within which takeovers are conducted.
The Takeover Code applies to all takeovers and merger transactions,
where the offeree company is, among others, a listed or unlisted
public company with its registered office in the United Kingdom,
the Channel Islands or the Isle of Man or falls within certain
categories of private limited companies. The Company is such a
company and accordingly its Shareholders are entitled to the
protections afforded by the Takeover Code.
Under Rule 9 of the Takeover Code, where any person acquires,
whether by a series of transactions over a period of time or by one
specific transaction, an interest in shares which (taken together
with shares in which that person or any person acting in concert
with that person is interested) carry 30 per cent. or more of the
voting rights of a company that is subject to the Takeover Code,
that person is normally required by the Panel to make a general
offer to all remaining shareholders of that company to acquire
their shares. Similarly, where any person, together with persons
acting in concert with that person, is interested in shares which
in aggregate carry not less than 30 per cent. of the voting rights
of a company, but does not hold shares carrying more than 50 per
cent. of the voting rights of that company and such person, or any
such person acting in concert with that person, acquires an
interest in any other shares which increases the percentage of
shares carrying voting rights in which that person is interested,
such person (and persons acting in concert with that person) will
normally be required to make a general offer to all remaining
shareholders to acquire their shares. An offer under Rule 9 (a Rule
9 Offer) must be made in cash and at the highest price paid by the
person required to make the offer, or any person acting in concert
with that person, for any interest in shares of the company during
12 months prior to the announcement of the offer.
Rule 37 of the Takeover Code extends the principle of Rule 9
further so that when a company redeems or purchases its own voting
shares, any resulting increase in the percentage of shares carrying
voting rights in which a person or group of persons acting in
concert is interested will be treated as an acquisition for the
purposes of Rule 9 of the Takeover Code.
The Concert Party's interest in Ordinary Shares might, as a
result of the Tender Offer, increase above 50 per cent. of the
voting rights of the Company. The Tender Offer might therefore,
absent a waiver of the obligation to make a general offer under
Rule 9 and Rule 37 of the Takeover Code by the Panel, give rise to
an obligation on the Concert Party to make a general offer for the
entire issued share capital of the Company.
Lombard Odier's position
Lombard Odier currently holds 21,068,802 Ordinary Shares,
representing in aggregate 28.4 per cent. of the issued voting share
capital of the Company. Lombard Odier's interest in Ordinary Shares
might, as a result of the Tender Offer, increase above 30 per cent.
of the voting rights of the Company. The Board has consulted with
the Panel which has agreed that, under Rule 37.1 of the Takeover
Code and the notes to that Rule, Lombard Odier should be treated as
an "innocent bystander" in relation to any increase in its holding
of Ordinary Shares as a result of the Tender Offer and therefore
Lombard Odier will not be required to make an offer under Rule 9
and Rule 37 of the Takeover Code as a result of any such
increase.
Waiver of the obligation to make a general offer under Rule 9
and Rule 37 of the Takeover Code
Under Rule 37 and Note 1 on the Notes on the Dispensations from
Rule 9 of the Takeover Code, the Panel will normally waive the
requirement for a Rule 9 Offer if, inter alia, those shareholders
of the company who are independent of the persons who would
otherwise be required to make an offer and any person acting in
concert with them do not have any interest which may compromise
their independence (the Independent Shareholders) pass an ordinary
resolution on a poll at a general meeting approving such a waiver
(a Waiver Resolution). Under Note 5 on the Notes on the
Dispensations from Rule 9 of the Takeover Code, the Panel may waive
the requirement for a Rule 9 Offer and a Waiver Resolution if
Independent Shareholders holding more than 50 per cent. of the
company's shares capable of being voted on such a Waiver Resolution
confirm in writing that they approve the proposed waiver and would
vote in favour of a Waiver Resolution were one to be put to the
shareholders of the company at a general meeting.
Confirmations and acknowledgements
Independent Shareholders holding more than 50 per cent. of the
Company's Ordinary Shares capable of being voted on a resolution to
approve a Waiver Resolution, being Lombard Odier and Richard
Griffiths and his controlled undertakings, have confirmed the
following:
(a) they are the beneficial owners of 21,068,802 Ordinary Shares
in the issued share capital of the Company representing at the date
hereof 36.1 per cent. of the Company's issued ordinary share
capital carrying voting rights and have absolute discretion over
the manner in which these Ordinary Shares are voted. These Ordinary
Shares are held free of all liens, pledges, charges and
encumbrances;
(b) that (a) save for the fact that they are Shareholders, there
is no connection between any Independent Shareholder and the
Concert Party, (b) they do not have any interest or potential
interest, whether commercial, financial or personal, in the outcome
of the Tender Offer , and (c) they are an Independent Shareholder
of the Company as defined above; and
(c) that, in connection with the Tender Offer: (a) they consent
to the Panel granting a waiver from the obligation for the Concert
Party to make a Rule 9 offer to the Shareholders; (b) they consent
to the Panel dispensing with the requirement that the waiver from
such obligation be conditional on a Waiver Resolution being
approved by Independent Shareholders of the Company at a general
meeting; and (c) they would vote in favour of a Waiver Resolution
to waive the obligation for the Concert Party to make a Rule 9
offer upon completion of the Tender Offer were one to be put to the
Independent Shareholders of the Company at a general meeting.
In giving the confirmations referred to above, the Independent
Shareholders have acknowledged:
(a) that the Panel will approve the waiver from the obligation
for the Concert Party to make a Rule 9 offer without the
requirement for the waiver having to be approved by Independent
Shareholders of the Company at a general meeting;
(b) that if no general meeting is held to approve the Waiver
Resolution to waive the obligation for the Concert Party to make a
Rule 9 offer:
(i) there will not be an opportunity for any other person to
make any alternative proposal to the Company conditional on such
Waiver Resolution not being approved by Independent Shareholders of
the Company;
(ii) there will not be an opportunity for other Shareholders to
make known their views on the Tender Offer; and
(iii) there will be no requirement for the Company either (i) to
obtain and make known to its Shareholders competent independent
advice under Rule 3 of the Takeover Code on the Tender Offer and
the waiver of the obligation for the Concert Party to make a Rule 9
offer, or (ii) to publish a circular to Shareholders of the Company
in compliance with Appendix 1 of the Takeover Code in connection
with this matter.
The Board has consulted with the Panel which has agreed that it
will waive any obligation on the Concert Party to make a general
offer under Rule 9 and Rule 37 of the Takeover Code as a result of
the Tender Offer and, provided that the holders of a majority of
the Ordinary Shares, held by Independent Shareholders, confirm in
writing that they would approve the Rule 9 Waiver, if a resolution
to approve the Rule 9 Waiver were put to the Independent
Shareholders at the General Meeting.
The holders of a majority of Ordinary Shares, held by
Independent Shareholders, have given that written confirmation and
the Board has also now received the Panel's confirmation that the
Panel has granted a waiver of the obligation on the Concert Party
to make a general offer under Rule 9 and Rule 37 of the Takeover
Code to the extent that such obligation would otherwise arise as a
result of the Tender Offer.
8 Re-Registration
Application will be made to the Registrar of Companies for the
Company to be re-registered as a private limited company.
Re-Registration will take effect when the Registrar of Companies
issues a certificate of incorporation on Re-Registration which is
expected to be on or around 18 January 2023. The Registrar of
Companies will not issue the certificate of incorporation on
Re-Registration until the Registrar of Companies is satisfied that
no valid application can be made to cancel the resolution to
re-register as a private limited company. Accordingly, the expected
date of the Re-Registration may be subject to change.
9 Irrevocable undertakings and intentions of the Directors
relating to the Tender Offer
The Company has received an irrevocable undertaking from
Shareholders (excluding the Directors but including the Harwood
Funds which are controlled by Christopher Mills) holding in
aggregate 60,357,976 Ordinary Shares (representing approximately
81.4 per cent. of the existing issued ordinary share capital of the
Company) to vote in favour or the Resolutions. These Shareholders
wish to continue to support the Company's growth strategy as
ongoing Shareholders and therefore do not wish to sell their
current shareholdings. They have therefore irrevocably undertaken
not to tender their Ordinary Shares under the Tender Offer in
respect of 56,006,816 Ordinary Shares (representing approximately
75.5 per cent. of the existing issued ordinary share capital of the
Company).
The Company has received an irrevocable undertaking from each of
the Directors holding in aggregate 2,753,252 Ordinary Shares (being
all shareholdings held by Directors (excluding the shareholdings of
the Harwood Funds) and representing approximately 3.7 per cent. of
the existing issued ordinary share capital of the Company) to vote
in favour or the Resolutions. The Directors are fully supportive of
the Company's growth strategy and intend to continue to support the
Company as Shareholders. They have therefore irrevocably undertaken
not to tender their Ordinary Shares under the Tender Offer.
Further details of these irrevocable undertakings are set out in
paragraph 4 of Part IV of the Circular.
10 Financing of the Tender Offer
If the maximum number of Ordinary Shares are tendered, this will
result in an amount of GBP12,732,581.50 being returned by the
Company to Qualifying Shareholders.
The Company will fund the Tender Offer with the following:
10.1.1 its own cash resources which currently stand at
approximately GBP13,300,000 (although this amount includes
estimated deferred consideration and warranty retention amounts
totalling GBP6,200,000that have been set aside in relation to
deferred consideration obligations following the acquisition of
LDPath Limited in March 2022);
10.1.2 a debt facility with Barclays Bank PLC totalling GBP4,000,000; and
10.1.3 the Harwood Convertible Loan Note of GBP4,000,000.
Further details of the financing are set out in paragraph 5 of
Part IV of the Circular.
11 Related party transaction
The Harwood Convertible Loan Note and the Subscription Agreement
(further details of which are set out in paragraph 6 of Part IV of
the Circular) is considered a related-party transaction for the
purposes of Rule 13 of the AIM Rules. The Directors (with the
exception of Christopher Mills because of his association with
Harwood Capital, North Atlantic Value GP 5 LLP and Harwood Private
Equity V L.P.) consider, having consulted with Liberum, the
Company's Nominated Adviser, that the terms of this financing
transaction are fair and reasonable in so far as Shareholders are
concerned.
Following the Cancellation and the Re-registration, the Harwood
Convertible Loan Note will automatically convert into preference
shares in the Company to be held by NAV 5 (on behalf of (and as
general partner for) HPE V), on the basis of 115 pence per
preference share (Preference Shares).
12 Share schemes
The Company operates the Share Option Schemes and has subsisting
options under both such plans. Neither the Tender Offer nor the
Cancellation will have the effect under the Share Option Schemes of
increasing or accelerating the right to exercise any option or
accelerating their lapse. Share options which remain outstanding
under the Share Option Schemes at the Tender Offer Record Date do
not entitle Optionholders to participate in the Tender Offer. The
Tender Offer will not affect the legal rights of Optionholders. As
Ordinary Shares will no longer be capable of being bought and sold
through a public stock market following the Cancellation,
Optionholders will be contacted in due course in connection with
the practical impact of the Cancellation upon their options .
13 Tax
Shareholders should be aware that there will be tax
considerations that they should take into account when deciding
whether or not to participate in the Tender Offer. Summary details
of certain UK taxation considerations are set out in Part III of
the Circular.
14 Overseas Shareholders
The attention of Shareholders who are not resident in the United
Kingdom is drawn to paragraph 6 of Part II of the Circular.
The making of the Tender Offer in, or to persons who are
citizens or nationals of, or resident in, jurisdictions outside the
United Kingdom or to custodians, nominees or trustees for citizens,
residents or nationals of other countries may be prohibited or
affected by the laws of the relevant jurisdiction. Shareholders who
are not citizens or nationals of, or resident in, the United
Kingdom, or who are custodians, nominees or trustees for citizens,
residents or nationals of countries outside the United Kingdom,
should inform themselves about and observe any applicable legal
requirements. It is the responsibility of any Overseas Shareholder
wishing to take up the Tender Offer to satisfy himself as to the
full observance of the laws of the relevant jurisdiction in
connection therewith, including the obtaining of any governmental
or other consents which may be required, the compliance with other
necessary formalities and the payment of any transfer or other
taxes or other requisite payments due in such jurisdiction. No
steps have been taken to qualify the Tender Offer or to authorise
the extending of the Tender Offer or the distribution of the Tender
Form or the Form of Proxy in any territory outside the United
Kingdom.
15 Action to be taken
General Meeting
Shareholders will find enclosed with the Circular a Form of
Proxy for use at the General Meeting. The Form of Proxy should be
completed and returned in accordance with the instructions printed
on it so as to arrive at the Company's Registrar, Equiniti, Aspect
House, Spencer Road, Lancing, West Sussex BN99 6DA or online at
www.sharevote.co.uk , as soon as possible and, in any event, so as
to be received by no later than midday on 16 December 2022.
Tender Offer
If you are a Qualifying Shareholder and hold your Ordinary
Shares in certificated form and you wish to tender some or all of
your Ordinary Shares, you should complete the Tender Form in
accordance with the instructions printed on it and in Part II of
the Circular and return it by post in the accompanying reply-paid
envelope (for use in the UK only) to Equiniti Aspect House, Spencer
Road, Lancing, West Sussex BN99 6DA, together with your share
certificate(s) in respect of the Ordinary Shares tendered.
If you are a Qualifying Shareholder and hold your Ordinary
Shares in uncertificated form and you wish to tender some or all of
your Ordinary Shares, you should send a TTE Instruction and follow
the procedures set out in Part II of the Circular in respect of
tendering uncertificated Ordinary Shares.
If you have any questions about the procedure for tendering
Ordinary Shares or making a TTE Instruction, you require extra
copies of the Circular or the Tender Form or you want help filling
in the Tender Form, please telephone the Shareholder Helpline on
+44 (0)371 384 2050. Lines are open from 8.30 a.m. to 5.30 p.m.
(London time) Monday to Friday (except public holidays in England
and Wales). Please note that calls to these numbers may be
monitored or recorded for security and training purposes. Please
note that for legal reasons the Shareholder Helpline will only be
able to provide information contained in the Circular and the
accompanying Tender Form and will be unable to give advice on the
merits of the Tender Offer or to provide financial, investment or
taxation advice.
You are advised to read all of the information contained in the
Circular before deciding on the course of action you will take in
respect of the General Meeting and the Tender Offer.
16 Recommendations
The Board believes that the Proposals, including the
Cancellation and the Tender Offer, are in the best interests of the
Company and its Shareholders as a whole, and unanimously recommends
that Shareholders vote in favour of the Resolutions.
Definitions
The following definitions apply throughout this Announcement,
unless stated otherwise:
Admission admission of the entire issued share capital
of the Company to trading on AIM
AIM a market operated by the London Stock Exchange
AIM Rules the rules applicable to companies governing
their admission to AIM, and following admission
their continuing obligations to AIM, as set
out in the AIM Rules for Companies published
by the London Stock Exchange from time to
time
Announcement this announcement
Board the board of the Company comprising the Directors
Business Day any day other than a Saturday, Sunday or public
holiday on which banks are open in the City
of London for the transaction of general commercial
business
Cancellation the cancellation of admission of the Ordinary
Shares to trading on AIM
certificated Ordinary Shares not recorded on the Register
form or certificated as being in uncertificated form in CREST
Circular the circular of the Company in relation to
the Proposals, dated on or around the date
of this Announcement
Companies Act the Companies Act 2006, as amended from time
2006 to time
Company SourceBio International plc a company incorporated
in England and Wales with registered number
10269474, whose registered office is at 1
Orchard Place, Nottingham Business Park, Nottingham,
Nottinghamshire NG8 6PX
Concert Party the Harwood Funds, the Continental Funds,
Jay LeCoque, Marco Fumagalli and Carlo Sgarbi
Continental Continental Investment Partners S.A.
Continental Funds the funds controlled by Continental, being
Protea Capital S.A. and Ottotto Srl
CREST the system of paperless settlement of trades
in securities and the holding of uncertificated
securities operated by Euroclear in accordance
with the CREST Regulations
CREST manual the manual, as amended from time to time,
produced by Euroclear describing the CREST
system and supplied by Euroclear to users
and participants thereof
CREST Regulations the Uncertificated Securities Regulations
2001 (SI 2001 No. 3755), as amended from time
to time
Directors the directors of the Company
Equiniti Equiniti Limited
ESOP the SourceBio International plc Executive
Share Option Plan adopted on 22 September
2021
Euroclear Euroclear UK & International Limited, the
operator of CREST
FCA the Financial Conduct Authority
Form of Proxy the form of proxy accompanying the Circular
to be used in connection with the General
Meeting
General Meeting the general meeting of the Company to be held
by means of electronic facility and at 1 Orchard
Place, Nottingham Business Park, Nottingham,
NG8 6PX on 20 December 2022 at midday, or
any adjournment thereof, notice of which is
set out in Part VI of the Circular
Group means the Company and subsidiary undertakings
from time to time
Harwood Capital Harwood Capital LLP
Harwood Convertible a convertible loan note of GBP4,000,000 issued
Loan Note by the Company and held by North Atlantic
Value GP 5 LLP on behalf of (and as general
partner for) Harwood Private Equity V L.P.
Harwood Funds North Atlantic Smaller Companies Investment
Trust plc, Oryx International Growth Fund
Limited and clients of Harwood Capital
Independent Shareholders Shareholders who do not form part of the Concert
Party
Latest Practicable 22 November 2022, the latest practicable date
Date prior to the publication of the Circular
Lombard Odier Lombard Odier Asset Management (Europe) Limited
Liberum Liberum Capital Limited
London Stock London Stock Exchange plc
Exchange
member account the identification code or number attached
ID to any member account in CREST
New Articles the new articles of association of the Company
to be adopted following the passing of Resolution
number 4 at the General Meeting
Notice of General the notice of the General Meeting which appears
Meeting in Part VI of the Circular
Optionholders persons who hold options to acquire Ordinary
Shares under either of the Share Option Schemes
Ordinary Shares the ordinary shares of GBP0.0015 each in the
capital of the Company
Overseas Shareholders a Shareholder who is a resident in, or a citizen
of, a jurisdiction outside the United Kingdom
Panel the Takeover Panel
Proposals the Tender Offer, the Cancellation, the Re-Registration
and the adoption of the New Articles
Qualifying Shareholder Shareholders who are entitled to participate
in the Tender Offer, being those who are on
the Register on the Tender Offer Record Date
and excluding those with registered addresses
in a Restricted Jurisdiction
Receiving Agent Equiniti
Register the Company's register of members
Re-Registration the re-registration of the Company as a private
limited company and the consequential adoption
of the New Articles
Resolutions the resolutions numbered 1 to 4 to be proposed
at the General Meeting, as set out in the
Notice of General Meeting
Restricted Jurisdiction each of the United States, Australia, Canada,
Japan, New Zealand and South Africa and any
other jurisdiction where the mailing of the
Circular or the accompanying documents into
or inside such jurisdiction would constitute
a violation of the laws of such jurisdiction
Rule 9 Offer has the meaning given in paragraph 7 of this
Announcement
Rule 9 Waiver the waiver granted by the Panel of the obligation
which might otherwise arise under Rule 9 and
Rule 37 requiring the Concert Party to make
an offer for all of the issued share capital
of the Company in connection with the Tender
Offer
SAYE Plan the SourceBio International plc SAYE Plan
adopted on 12 October 2021
Share Option the ESOP and the SAYE Plan
Schemes
Shareholder Helpline the helpline available to Shareholders in
connection with the Tender Offer in respect
of Ordinary Shares
Shareholders the holders of the Ordinary Shares
Subscription a subscription agreement to be entered into
Agreement by the Company and North Atlantic Value GP
5 LLP on behalf of (and as general partner
for) Harwood Private Equity V L.P.
subsidiary a subsidiary as that term is defined in section
1159 of the Companies Act 2006
Takeover Code the City Code on Takeovers and Mergers
Tender Conditions has the meaning given in paragraph 2 of Part
II of the Circular
Tender Form the form enclosed with the Circular for use
by Qualifying Shareholders who hold Ordinary
Shares in certificated form in connection
with the Tender Offer
Tender Offer the invitation to Qualifying Shareholders
to tender Ordinary Shares to the Company on
the terms and conditions set out in the Circular
and also, in the case of certificated Ordinary
Shares only, the Tender Form
Tender Offer 6.00p.m. on 16 December 2022
Record Date
Tender Offer resolution 1 to be proposed at the General
Resolution Meeting
Tender Price 115 pence, being the price per Ordinary Share
at which Ordinary Shares will be purchased
pursuant to the Tender Offer
TFE Instruction a transfer from escrow instruction (as defined
by the CREST manual)
TTE Instruction a transfer to escrow instruction (as defined
by the CREST manual)
uncertificated recorded on the register as being held in
form uncertificated form in CREST and title to
which, by virtue of the Uncertified Securities
Regulations, may be transferred by means of
CREST
United Kingdom the United Kingdom of Great Britain and Northern
or UK Ireland
United States the United States of America, its territories
or US and possessions, any state of the United States
and the District of Columbia
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