TIDMSBS TIDMVDN
RNS Number : 3752J
Source BioScience PLC
16 July 2013
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE
UNITED STATES, CANADA, AUSTRALIA, JAPAN, SOUTH AFRICA OR ANY
JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION.
THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN ANNOUNCEMENT OF A FIRM
INTENTION TO MAKE AN OFFER OR TO PURSUE ANY OTHER TRANSACTION UNDER
RULE 2.7 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "TAKEOVER
CODE"). ACCORDINGLY, VINDON HEALTHCARE SHAREHOLDERS ARE ADVISED
THAT THERE CAN BE NO CERTAINTY THAT A FORMAL OFFER FOR VINDON
HEALTHCARE WILL BE MADE.
Please find reproduced below in full, the regulatory news
announcement from Source BioScience (LSE:SBS) which was released
yesterday, 15 July 2013, at 17.31.
FOR IMMEDIATE RELEASE
15 July 2013
SOURCE BIOSCIENCE PLC ("SOURCE BIOSCIENCE" OR THE "COMPANY")
POSSIBLE OFFER FOR VINDON HEALTHCARE PLC ("VINDON
HEALTHCARE")
The Board of Source BioScience (the "Board") the international
diagnostic and genetic analysis services business, announces that
it is at an advanced stage of discussions with the board of Vindon
Healthcare, a leading provider of controlled environment services
and products to the pharmaceutical and life sciences sectors in the
UK, Ireland, Europe and North America, regarding a possible all
cash offer (the "Possible Offer") for the entire issued and to be
issued share capital of Vindon Healthcare not already owned by
Source BioScience, at a price of 13.7 pence per Vindon Healthcare
share (the "Possible Offer Price"). The Possible Offer would value
the entire issued and to be issued share capital of Vindon
Healthcare at approximately GBP12.2 million.
The Board of Source BioScience believes that an offer at this
price would represent a very compelling 44% premium for Vindon
Healthcare shareholders compared to the closing mid market price on
15 July 2013, being the last trading day before this announcement.
Further information on an offer for the entire issued and to be
issued share capital of Vindon Healthcare (the "Offer"), if made,
would be contained in an offer document to be posted to Vindon
Healthcare shareholders following the subsequent announcement of a
firm intention to make an offer, in accordance with Rule 2.7 of the
Takeover Code.
In anticipation of making the Possible Offer, Source BioScience
has today procured from the director shareholders of Vindon
Healthcare irrevocable undertakings to accept the Possible Offer,
if made at the Possible Offer Price, in respect of their existing
holdings in Vindon Healthcare, amounting in aggregate to 24.68 per
cent. of the existing issued share capital of Vindon Healthcare.
Details of these irrevocable commitments are set out below. The
Board reasonably expects that the Possible Offer would receive a
unanimous recommendation from the Vindon Healthcare directors,
subject to the receipt by them of appropriate independent advice in
accordance with Rule 3 of the Takeover Code. This statement is
being made with the consent of Vindon Healthcare.
The Board believes that Vindon Healthcare represents a
significant opportunity in the context of Source BioScience's
growth and stated acquisition strategy. The Board considers Vindon
Healthcare to be an excellent strategic fit with Source
BioScience's business and believes that completion of the Possible
Offer will provide a number of commercial, operational and
financial benefits which would be expected to create value for
Source BioScience shareholders. The anticipated benefits for Source
BioScience of a completed acquisition of Vindon Healthcare include:
geographic expansion in the United States, the United Kingdom and
Ireland, a broadening of its product and service portfolio,
particularly in relation to its offering to the
pharma/biotechnology industry and Contract Research Organisation
customers, operational benefits from sharing greater
infrastructure, an enlarged customer base and cross selling
opportunities, and financial benefits including potential earnings
accretion and EBITDA(1) margin enhancement for the enlarged
business in the first full year of ownership.(2) Further
information on the merits of the Possible Offer is set out
below.
The making of any offer by Source BioScience remains subject to
completion and certain other pre-conditions, including but not
limited to the unanimous recommendation of such an offer by the
directors of Vindon Healthcare, and the arrangement of suitable
funding which is also addressed below. Source BioScience reserves
the right to waive any of the pre-conditions, including that in
relation to the unanimous recommendation in the event of a
competing offer or proposed offer.
Furthermore, completion of the Offer, if made, would be
conditional upon, amongst other things, Source BioScience
shareholder approval under the Listing Rules and in order to obtain
authority to issue new shares to partially fund it.
This announcement does not constitute an announcement of a firm
intention to make an offer or to pursue any other transaction under
Rule 2.7 of the Takeover Code. Accordingly, Vindon Healthcare
shareholders are advised that there can be no certainty that a
formal offer for Vindon Healthcare will be made, even if the
pre-conditions to the Possible Offer are satisfied or waived.
(1) Earnings before interest, tax, depreciation and amortisation
2 This should not be construed as a profit forecast or
interpreted to mean that the future earnings per share, profits,
margins or cashflows of the Source BioScience group will
necessarily be greater than the historic published figures.
Background to, reasons for and expected benefits of the possible
acquisition
The Board believes that Vindon Healthcare represents a
significant opportunity in the context of Source BioScience's
growth and stated acquisition strategy. It considers Vindon
Healthcare to be an excellent strategic fit with Source BioScience
and believes that completion of the Offer, if made, would provide a
number of commercial, operational and financial benefits which are
expected to create value for Source BioScience shareholders. In
particular:
-- The acquisition of Vindon Healthcare will provide the
enlarged group with US-based facilities and operational
infrastructure allied to an existing commercial network of
customers and partners. This offers Source BioScience the
opportunity to extend its LifeSciences and Healthcare Diagnostic
activities into North America to address a substantial US-based
market for its products and services. The US market is currently
under-exploited by Source BioScience and Vindon Healthcare's
established infrastructure significantly de-risks market entry into
this important territory for Source BioScience. Further, the
current location of the Vindon Healthcare infrastructure on both
the East and West coasts of the US is aligned with the major
centres of life science research activity and the distribution of
potential customers. In particular, Source BioScience anticipates
being able to launch its DNA sequencing services promptly in these
new locations following completion of the acquisition;
-- Vindon Healthcare's environmentally controlled storage
solutions will also allow Source BioScience to further
internationalise its products business, particularly with respect
to clone products. If the acquisition is completed, Source
BioScience envisages operating a network of -80(o) C temperature
storage facilities in key satellite locations worldwide which, when
coupled with the extended reach of Source BioScience's products
business, would reduce the risk of investment in infrastructure
with the potential to increase revenue from environmentally
controlled storage services and Source BioScience's products
business in parallel. Currently the geographic reach of Source
BioScience's clone business is constrained because of the need to
ship these products to customers on dry ice from the UK, which is
both logistically challenging and costly;
-- Source BioScience's service expertise, particularly in
diagnostic testing and genetic analysis services, will add breadth
and depth to Vindon Healthcare's existing services. This will
enable Vindon Healthcare's storage service customers, especially
those pharmaceutical and regenerative medicine customers, access to
Source BioScience's tissue and gene-based analysis testing services
and technologies. Customers' samples stored with Vindon Healthcare
often represent unique and valuable biological resources. Enabling
storage and downstream analysis to be conducted at a single,
accredited facility, will eliminate the need for costly sample
transport and de-risks the process for the customer;
-- Vindon Healthcare's expertise in environmentally controlled
storage will also directly benefit the enlarged group in a number
of ways which the Board believes could be rapidly crystallised.
Source BioScience currently offers a portfolio of more than 20
million cDNA clones which are stored in -80degC freezers at Source
BioScience's facilities in Cambridge with a duplicate archive
maintained in Nottingham. Vindon Healthcare will be able to bring
immediate benefits from its international storage solution
expertise, to the advantage of the enlarged group;
-- Vindon Healthcare's service offering will add breadth and
depth to Source BioScience's existing products and services
portfolio and enhance the combined customer base and geographical
reach of the enlarged group. This would considerably strengthen
Source BioScience's pool of innovative technology and know-how, and
its proposition across the range of specialist products and support
services to the customers and prospective customers of both Source
BioScience and Vindon Healthcare;
-- Significant cross selling opportunities are likely to arise
from each company selling its respective services to the other's
customer base, including into new territories when compared to the
existing geographic market reach of the two businesses;
-- The Board believes that the enlarged group would have greater
potential access to funding and other resources required to pursue
organic and acquisitive growth than either of the separate
companies of Source BioScience and Vindon Healthcare;
-- The combination of Source BioScience and Vindon Healthcare
will provide complementary infrastructure and technology platforms
to further crystallise opportunities for organic growth;
-- The acquisition will potentially provide acceleration of
geographic expansion into other territories holding significant
commercial opportunities for the enlarged group, but where the
prior lack of locally owned infrastructure has previously been an
impediment to realising these opportunities, or where the product
or service offering of each of the standalone businesses was
previously too narrow to be likely to generate a sufficient return
on investment; and
-- Completion of the Possible Offer would be expected to result
in accretion to the enlarged company's earnings per share and
EBITDA(1) margin enhancement in the first full financial year
following completion of the acquisition of Vindon Healthcare and
the firm placing of new shares in Source BioScience to part fund
it.2
(1) Earnings before interest, tax, depreciation and amortisation
2 This should not be construed as a profit forecast or
interpreted to mean that the future earnings per share, profits,
margins or cashflows of the Source BioScience group will
necessarily be greater than the historic published figures.
Funding arrangements
Source BioScience is in the process of finalising funding
arrangements for the Possible Offer, to include a firm placing of
new shares (the "Firm Placing") and drawdown under a new debt
facility under negotiation with its lending bank. Source BioScience
intends to contact existing and prospective new institutional
investors in order to secure firm commitments for the placing
element of the funding. The Board's view is that the Firm Placing
should be conducted at or around the current share price.
Irrespective of whether the Possible Offer is made (or, if made,
whether it completes), Source BioScience intends to launch an open
offer (the "Open Offer") to existing shareholders to provide
additional growth capital for its business, to enable the Company
to capitalise on other organic and selected acquisitive growth
initiatives. Should the Possible Offer proceed to be made as
anticipated, the Open Offer will also provide an opportunity for
existing shareholders to reduce the effects of dilution that would
arise from the firm placing.
Source BioScience is progressing draft legal documentation in
relation to the new debt facility, which the Board believes will be
finalised on appropriate commercial terms having already received
positive indication of commitment from its existing lender.
Assuming completion of the Possible Offer, the new debt facility
would also be expected to provide debt refinancing in respect of
the Company's and Vindon Healthcare's existing indebtedness.
Further information relating to the possible Firm Placing and
the Open Offer is expected to be contained in the prospectus to be
issued in due course to Source BioScience shareholders if the
Possible Offer proceeds as anticipated.
Takeover Code
Source BioScience notes that Rule 2.6(a) of the Takeover Code
requires that Source BioScience, by not later than 5.00 p.m. on
Monday 12 August 2013 (the "relevant deadline"), either announces a
firm intention to make an offer for Vindon Healthcare in accordance
with Rule 2.7 of the Takeover Code or announces that it does not
intend to make an offer, in which case the announcement will be
treated as a statement to which Rule 2.8 of the Takeover Code
applies.
The relevant deadline will cease to apply to Source BioScience
if another offeror announces, prior to the relevant deadline, a
firm intention to make an offer for Vindon Healthcare. In such
circumstances, Source BioScience will be required to clarify its
intentions in accordance with Rule 2.6(d) of the Takeover Code. The
relevant deadline may be extended in certain circumstances with the
consent of the Panel and Vindon Healthcare.
In accordance with Rule 2.10 of the Takeover Code, Source
BioScience announces that as at close of business on 15 July 2013,
the issued share capital of the Company comprised 204,783,266
ordinary shares of 2 pence each ("Ordinary Shares"), with ISIN
number GB0009739649. All of these Ordinary Shares carry voting
rights of one vote per Ordinary Share. Source BioScience holds no
Ordinary Shares in treasury.
Opening Position Disclosure:
In accordance with Rule 8.1, Source BioScience owns 150,000
ordinary shares in Vindon Healthcare, in addition to the
irrevocable rights to acquire shares amounting to 21,923,349
ordinary shares in aggregate described below.
Details of Irrevocable Commitments
The following table sets out the required disclosure in
accordance with Note 3 of Rule 2.11 of the Takeover Code:
No. of Percentage of
Party Ordinary Shares Vindon Healthcare
Issued Share
Capital
Richard Hughes 15,200,349 17.11
Martin Liam Ferguson 4,150,000 4.67
Thomas Patrick Jackson 2,273,000 2.56
Martin Burrill 300,000 0.34
Total 21,923,349 24.68
------------------------ ----------------- -------------------
All of the above irrevocable undertakings anticipate that any
offer will be made at the Possible Offer Price and provided that
the offer is made on terms which, in the reasonable opinion of
Vindon Healthcare's Rule 3 adviser, do not represent a diminution
in value of the proposed terms of the offer set out in the
irrevocable undertakings and will continue to be binding on such
persons.
Each of the above irrevocable undertakings has been entered into
by the relevant director only as a shareholder of Vindon Healthcare
and not in their capacity as a director; nothing contained in the
undertakings requires any of the Vindon Healthcare Directors to
take or not to take any decision or action in their capacity as a
director of Vindon Healthcare.
The above irrevocable undertakings will cease to be binding
if:
-- a firm intention to make an offer or an offer for Vindon
Healthcare is not announced in accordance with Rule 2.7 of the Code
by 11.59 pm on 15 August 2013 (or such later time and/or date as
Source BioScience and Vindon Healthcare may agree but in any event
no later than in any event by 11.59 pm on 30 August 2013); or
-- The offer document relating to the above announced offer is
not posted to Vindon Healthcare shareholders within 28 days of the
date of the above announcement, unless otherwise agreed with the
Takeover Panel (with the consent of Vindon Healthcare); or,
-- The offer, having been announced, lapses or is withdrawn.
For further information, please contact:
Source BioScience plc
Dr Nick Ash, CEO
Tel: +44 (0) 115 973 9010
Email: enquiries@sourcebioscience.com
www.sourcebioscience.com
For investor and media enquiries:
N+1 Singer (Financial Advisor, Sponsor and Broker to Source
BioScience)
Aubrey Powell/Joseph Stroud
Tel: +44 (0)20 7426 3000
www.n1singer.com
College Hill (PR Agency to Source BioScience)
Melanie Toyne-Sewell/Stefanie Bacher/Claire Dickinson
Tel: +44 (0)20 7457 2020
Email: SourceBioScience@collegehill.com
Nplus1 Singer Advisory LLP ("N+1 Singer"), which is authorised
and regulated in the United Kingdom by the Financial Conduct
Authority, is acting as exclusively as financial adviser to Source
BioScience in connection with the contents of this announcement and
the Possible Offer and no one else and will not be responsible to
anyone other than Source BioScience for providing the protections
afforded to clients of N+1 Singer nor for providing advice in
relation to the Possible Offer or any other matter referred to in
this announcement.
This announcement has been prepared in accordance with English
law and the Takeover Code and information disclosed may not be the
same as that which would have been prepared in accordance with the
laws of jurisdictions outside England.
The release, publication or distribution of this announcement in
jurisdictions other than the United Kingdom and the availability of
any future offer to shareholders in Vindon Healthcare who are not
resident in the United Kingdom may be affected by the laws or
regulations of any such jurisdictions. Accordingly, any persons who
are subject to the laws or regulations of any jurisdiction other
than the United Kingdom should inform themselves of, and observe,
any applicable requirements.
Cautionary note regarding forward-looking statements
This announcement contains certain forward-looking statements
with respect to the financial condition, results of operations and
business of Source BioScience and its subsidiaries and certain
plans and objectives of the boards of directors of Source
BioScience and Vindon Healthcare. These forward-looking statements
can be identified by the fact that they do not relate only to
historical or current facts. Forward-looking statements often use
words such as "anticipate", "target", "expect", "estimate",
"intend", "plan", "goal", "believe", "will", "may", "should",
"would", "could" or other words of similar meaning. These
statements are based on assumptions and assessments made by the
Board in light of its experience and perception of historical
trends, current conditions, expected future developments and other
factors it believes appropriate. By their nature, forward-looking
statements involve risk and uncertainty, and the factors described
in the context of such forward-looking statements in this
announcement could cause actual results and developments to
differ
materially from those expressed in or implied by such
forward-looking statements. Should one or more of these risks or
uncertainties materialise, or should underlying assumptions prove
incorrect, actual results may vary materially from those described
in this announcement. Source BioScience and Vindon Healthcare
assume no obligation to update or correct the information contained
in this announcement, whether as a result of new information,
future events or otherwise, except to the extent legally
required.
The statements contained in this announcement are made as at the
date of this announcement, unless some other time is specified in
relation to them, and service of this announcement shall not give
rise to any implication that there has been no change in the facts
set out in this announcement since such date. Nothing contained in
this announcement shall be deemed to be a forecast, projection or
estimate of the future financial performance of Source BioScience
or Vindon Healthcare except where expressly stated.
Publication on Website
In accordance with Rule 30.4 of the Takeover Code, a copy of
this announcement will be available free of charge, subject to
certain restrictions relating to persons resident in restricted
jurisdictions, at www. Source BioScience.com by no later than 12
noon (London time) on 16 July 2013 (being the business day
following the date of this announcement).
About Source BioScience:
Source BioScience plc (LSE: SBS) is an international diagnostics
and genetic analysis business serving the healthcare and research
markets. The LifeSciences division provides core laboratory
research support from conceptualisation to implementation, calling
upon a wide range of innovative technology platforms including an
online catalogue of biomolecular . Source BioScience is a trusted
provider of a complete range of sophisticated microarray, next
generation and conventional sequencing services. GLP, GCP and CPA
accreditations make the sequencing offerings very attractive for
applications in regulatory studies or clinical settings. The
Healthcare operations provide screening and reference laboratory
diagnostic testing for cancer and other diseases and additional
predictive testing for treatment optimisation for clinicians and
patients. Source BioScience has its headquarters in Nottingham, UK.
For more information, see www.sourcebioscience.com.
About Vindon Healthcare:
Vindon Healthcare plc (AIM: VDN) along with its subsidiaries, is
engaged in the manufacture of environmental control products for
the pharmaceutical industry, life sciences and food sectors
together with the provision of related services. The company
provides products and services for the management of temperature,
humidity and light, where controlled storage is required. Its
product range includes controlled environment rooms and storage
chambers, blood bank storage units and plant growth chambers.
Vindon Healthcare also offers controlled environment storage
facilities for its clients at its site in Rochdale. For more
information, see www.vindonhealthcare.com.
Information on this announcement
This announcement is not for release, publication or
distribution in whole or in part, in, into or from the United
States or any jurisdiction where to do so would constitute a
violation of the relevant laws of such jurisdiction.
This announcement is not intended to, and does not, constitute
or form part of any offer, invitation or the solicitation of an
offer to purchase, otherwise acquire, subscribe for, sell or
otherwise dispose of, any securities or the solicitation of an
offer to buy any securitiespursuant to this announcement or to the
Offer, if made, or otherwise. There is no certainty that the
Possible Offer referred to in this announcement will lead to a
binding agreement or transaction between the parties.
If made, the Offer will be made solely by an offer document and
a form of acceptance, which will contain the full terms and
conditions of any offer made by Source BioScience for the entire
issued and to be issued share capital of Vindon Healthcare not
already owned by Source BioScience, including details of how that
offer may be accepted. If the Offer is made, any acceptance or
other response to the Offer will need to be made on the basis of
the information in that Offer document and form of acceptance.
The distribution of this announcement in jurisdictions other
than the United Kingdom may be affected by the laws of relevant
jurisdictions. Therefore any persons who are subject to the laws of
any jurisdiction other than the United Kingdom will need to inform
themselves about, and observe, any applicable requirements.
This is an announcement falling under Rules 2.2(e), 2.4 and 2.5
of the Takeover Code and does not constitute an announcement of a
firm intention to make an offer under Rule 2.7 of the Takeover
Code.
Under Rule 8.3(a) of the Takeover Code, any person who is
interested in 1% or more of any class of relevant securities of an
offeree company or of any paper offeror (being any offeror other
than an offeror in respect of which it has been announced that its
offer is, or is likely to be, solely in cash) must make an Opening
Position Disclosure following the commencement of the offer period
and, if later, following the announcement in which any paper
offeror is first identified. An Opening Position Disclosure must
contain details of the person's interests and short positions in,
and rights to subscribe for, any relevant securities of each of (i)
the offeree company and (ii) any paper offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be
made by no later than 3.30 pm (London time) on the 10th business
day following the commencement of the offer period and, if
appropriate, by no later than 3.30 pm (London time) on the 10th
business day following the announcement in which any paper offeror
is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a paper offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the
offeree company or of any paper offeror must make a Dealing
Disclosure if the person deals in any relevant securities of the
offeree company or of any paper offeror. A Dealing Disclosure must
contain details of the dealing concerned and of the person's
interests and short positions in, and rights to subscribe for, any
relevant securities of each of (i) the offeree company and (ii) any
paper offeror, save to the extent that these details have
previously been disclosed under Rule 8. A Dealing Disclosure by a
person to whom Rule 8.3(b) applies must be made by no later than
3.30 pm (London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a paper
offeror, they will be deemed to be a single person for the purpose
of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0)20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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