TIDMPRX
RNS Number : 2536F
Upsher-Smith Laboratories Inc.
13 June 2012
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT
SECURITIES LAWS OF SUCH JURISDICTION
13 June 2012
RECOMMENDED OFFER
for
PROXIMAGEN GROUP PLC
by
USL Pharma International UK LIMITED a wholly-owned subsidiary of
UPSHER-SMITH LABORATORIES, INC.
to be effected
by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006
Summary
-- The Board of Proximagen and the Board of Upsher-Smith are
pleased to announce that they have reached agreement on the terms
of a unanimously recommended offer by USL, a wholly-owned
subsidiary of Upsher-Smith, for the entire issued and to be issued
share capital of Proximagen (other than shares held by
Upsher-Smith). It is intended that the Acquisition be implemented
by means of a court-sanctioned scheme of arrangement under Part 26
of the Companies Act 2006.
-- Under the terms of the Acquisition, Proximagen Shareholders will be entitled to receive:
for each Proximagen Share: 320 pence in cash; and
up to a further 192 pence in either cash or Loan Notes by way of
a contingent value right (a CVR)
-- The Acquisition excluding the CVRs values Proximagen's fully
diluted share capital at approximately GBP223.0 million ($346.7
million) on the basis of a fully diluted share capital of
69,689,794 Proximagen Shares.
-- The Acquisition including the CVRs potentially values
Proximagen's fully diluted share capital at up to approximately
GBP356.8 million ($554.7 million) on the basis of a fully diluted
share capital of 69,689,794 Proximagen Shares.
-- The Acquisition represents an immediate cash premium, excluding the CVR, of approximately:
-- 16.4 per cent. to 275 pence, being the Closing Price per
Proximagen Share on 12 June 2012 (being the last Business Day prior
to the date of this announcement);
-- 50.5 per cent. to approximately 213 pence, being the three
month average Closing Price per Proximagen Share up to 12 June
2012;
-- 84.6 per cent. to approximately 173 pence, being the six
month average Closing Price per Proximagen Share up to 12 June
2012; and
-- 21.8 per cent. to the enterprise value of Proximagen on 12 June 2012.
-- Pursuant to the terms of the Acquisition, Proximagen
Shareholders will receive one CVR for each Proximagen Share that
they hold. The CVR is intended to enable Proximagen Shareholders to
share in the future success of two existing Proximagen programs,
VAP-1 and PRX00933. Each CVR will entitle Proximagen Shareholders
to receive up to a further 192 pence in either cash or in Loan
Notes (subject to applicable securities laws) at the election of
the Proximagen Shareholder, subject to and in accordance with the
terms and conditions of the CVR.
-- The cash consideration payable by USL under the Acquisition
will be funded from cash on the balance sheet of the Upsher-Smith
Group and new debt facilities arranged by J.P. Morgan Securities
LLC, U.S. Bank National Association and Wells Fargo Securities, LLC
in the form of a $300 million secured credit agreement to be
provided by JPMorgan Chase Bank, N.A., U.S. Bank National
Association and Wells Fargo Bank, National Association to
Upsher-Smith. It is not intended that the payment of any interest
or other charges in respect of such facility will depend on the
business of Proximagen.
-- It is intended that the Acquisition will be implemented by
way of a court-sanctioned scheme of arrangement under Part 26 of
the Companies Act 2006 or, if USL elects, a takeover offer (as that
term is defined under section 974 of the Companies Act 2006) to
Proximagen Shareholders. The purpose of the Scheme is to enable USL
to acquire the whole of the issued and to be issued share capital
of Proximagen that Upsher-Smith does not already own. The Scheme,
which will be subject to the Conditions set out in Appendix I to
this announcement, will require the sanction of the Court.
-- The Board of Proximagen, which has been so advised by WG
Partners, considers the terms of the Acquisition to be fair,
reasonable and in the best interests of Proximagen Shareholders as
a whole. In providing financial advice to the Board of Proximagen,
WG Partners has taken into account the Board's commercial
assessments. WG Partners is providing the independent financial
advice for the purposes of Rule 3 of the City Code and is also
acting as financial adviser to the Board of Proximagen.
Accordingly, the Board of Proximagen unanimously recommends that
Proximagen Shareholders vote in favour of the resolutions relating
to the Acquisition at the Meetings (or in the event that the
Acquisition is implemented by way of an Offer, to accept or procure
acceptance of such Offer).
-- USL has received irrevocable undertakings from those members
of the Board of Proximagen who hold interests in the Proximagen
Shares (in respect of themselves and, where relevant, their spouse,
civil partner, de facto partner or similar) to vote in favour of
the Scheme or to procure that the registered holder votes in favour
of the Scheme (or, in the event that the Acquisition is implemented
by way of an Offer, to accept the Offer or procure acceptance of
the Offer) in respect of their entire beneficial holdings which
total 901,256 Proximagen Shares in aggregate representing
approximately 1.43 per cent. of Proximagen's issued share capital
as at the date of this announcement.
-- In addition, USL has also received irrevocable undertakings
from certain other Proximagen Shareholders, namely Invesco Asset
Management, IP Group plc, King's College London, Lansdowne Partners
and H. Lundbeck A/S, to vote in favour of the Scheme or to procure
that the registered holder votes in favour of the Scheme (or, in
the event that the Acquisition is implemented by way of an Offer,
to accept the Offer or procure acceptance of the Offer) in respect
of their entire beneficial holdings of such shares (or, in the case
of Invesco Asset Management, the Proximagen Shares which it manages
on a discretionary basis for its clients and, in the case of
Lansdowne Partners, as agent for Lansdowne funds) which total
44,552,330Proximagen Shares in aggregate representing approximately
70.58 per cent. of Proximagen's issued share capital as at the date
of this announcement.
-- In aggregate, therefore, USL has received irrevocable
undertakings to vote in favour of the Scheme at the Court Meeting
and the resolutions to be proposed at the Proximagen General
Meeting in respect of a total of 45,453,586 Proximagen Shares,
representing 72.01 per cent. of the share capital of Proximagen in
issue as at the date of this announcement. Further details of these
irrevocable undertakings are set out in Appendix III to this
announcement.
-- The Acquisition will be subject, inter alia, to the
satisfaction or waiver of the Conditions set out in Appendix I to
this announcement and in the Scheme Document. Further details of
the Scheme will be set out in the Scheme Document which will be
posted to Proximagen Shareholders within 28 days of the date of
this announcement.
-- Commenting on the Acquisition, Mark Evenstad, the Chief
Executive Officer of Upsher-Smith said:
"Upsher-Smith is delighted to announce today's transaction,
together with the unanimous recommendation of the Board of
Proximagen. We have been very impressed with the quality and
breadth of Proximagen's portfolio of programs, and the commitment
and expertise of Proximagen's employees. Having worked closely with
Proximagen as both a commercial partner and a strategic shareholder
since 2008, we believe that Proximagen has significant potential
and we are excited about the opportunity of bringing new therapies
to market that will benefit patients."
-- Commenting on the decision by the Board of Proximagen to
recommend the Acquisition, Kenneth Mulvany, the Chief Executive
Officer of Proximagen said:
"I am delighted that the Board of Proximagen has been able to
unanimously recommend the offer made by Upsher-Smith for Proximagen
which potentially values Proximagen at up to GBP356.8 million and
believe that it represents a great opportunity for our
shareholders, our staff and our drug development programs. This
deal demonstrates that the UK biotechnology sector can, with
supportive investors, bring together scientific excellence and
business acumen and generate significant returns for shareholders.
On these terms, the deal returns significant value to our investors
who have continually been committed to Proximagen and believed not
only in Proximagen's business model but also in the UK's ability to
generate commercial returns from great science and innovation.
The strategic fit between Proximagen and Upsher-Smith is
particularly complementary and we believe that the Acquisition
represents a very good opportunity for Proximagen's portfolio of
programs to benefit from the extensive resources of Upsher-Smith
and the consequent progress in their development. Proximagen and
Upsher-Smith have been strategic partners since 2008 and, having
worked closely with Upsher-Smith for more than four years, I am
confident that Proximagen's staff and programs will be in very good
hands and have a very bright future in the Enlarged Group."
This summary should be read in conjunction with the following
full announcement and the Appendices. The Acquisition will be
subject to the Conditions and other terms set out in Appendix I to
this announcement and to the full terms and conditions which will
be set out in the Scheme Document. Appendix II contains bases and
sources of certain information contained in this announcement.
Details of irrevocable undertakings received by Upsher-Smith are
set out in Appendix III to this announcement. Illustrative CVR
payment calculations are set out in Appendix IV to this
announcement. Certain terms used in this summary and the full
announcement are defined in Appendix V to this announcement.
A copy of this announcement will be available, free of charge,
subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, at Proximagen's website at
www.proximagen.com and at Upsher-Smith's website at
www.upsher-smith.com by no later than 12 noon (London time) on the
Business Day following the date of this announcement. Neither the
contents of Proximagen's website, the contents of Upsher-Smith's
website, nor the contents of any other website accessible from
hyperlinks on either Proximagen's or Upsher-Smith's website, is
incorporated into or forms part of, this announcement.
Enquiries:
Upsher-Smith and USL
Mark Evenstad, Chief Executive Officer
Tom Burke, Chief Operating Officer +1 (763) 315 2000
J.P. Morgan Cazenove
(Financial adviser to Upsher-Smith and
USL)
James Mitford
Christopher Dickinson +44 (0) 20 7742 4000
Kovak-Likly Communications
(PR adviser to Upsher-Smith)
Elizabeth Likly, Principal
Bruce Likly, Principal +1 (203) 762 8833
Proximagen
Kenneth Mulvany, Chief Executive Officer
James Hunter, Finance Director +44 (0) 20 7400 7700
WG Partners
(Financial adviser to Proximagen)
David Wilson
Stephen Waterman
Karri Vuori +44 (0) 20 7149 6000
Cenkos Securities plc
(Nominated adviser and broker to Proximagen)
Bobbie Hilliam (NOMAD)
Julian Morse +44 (0) 20 7397 8900
M:Communications (Media enquiries) +44 (0) 20 7920 2330
(PR adviser to Proximagen) proximagen@mcomgroup.com
Mary-Jane Elliott
Sarah Macleod
Hollie Vile
This announcement is not intended to and does not constitute or
form part of any offer to sell or subscribe for or any invitation
to purchase or subscribe for any securities or the solicitation of
any vote or approval in any jurisdiction pursuant to the
Acquisition or otherwise. The Acquisition will be made solely
pursuant to the terms of the Scheme Document (or, if applicable,
the Offer Document), which will contain the full terms and
conditions of the Acquisition or to elect to sell shares in
connection with the Acquisition, as the case may be), including
details of how to vote in respect of the Acquisition. Any decision
in respect of, or other response to, the Acquisition should be made
only on the basis of the information contained in the Scheme
Document.
This announcement has been prepared for the purpose of complying
with English law and the City Code and the information disclosed
may not be the same as that which would have been disclosed if this
announcement had been prepared in accordance with the laws of
jurisdictions outside the United Kingdom.
The release, publication or distribution of this announcement in
jurisdictions other than the United Kingdom and the United States
may be restricted by law and therefore any persons who are subject
to the laws of any jurisdiction other than the United Kingdom and
the United States should inform themselves about, and observe any
applicable requirements. In particular, the ability of persons who
are not resident in the United Kingdom or the United States to vote
with respect to their Proximagen Shares in relation to the Scheme
at the Meetings, to execute and deliver Forms of Proxy appointing
another to vote at the Meetings on their behalf and to execute and
deliver the Form of Election, may be affected by the laws of the
relevant jurisdictions in which they are located.
Copies of this announcement and any formal documentation
relating to the Acquisition are not being, and must not be,
directly or indirectly, mailed or otherwise forwarded, distributed
or sent in or into or from any Restricted Jurisdiction and persons
receiving such documents (including custodians, nominees and
trustees) must not mail or otherwise forward, distribute or send
them in or into or from any Restricted Jurisdiction. If the
Acquisition is implemented by way of an Offer (unless otherwise
permitted by applicable law and regulation), the Offer may not be
made directly or indirectly, in or into, or by the use of mails or
any means or instrumentality (including, but not limited to,
facsimile, e-mail or other electronic transmission, telex or
telephone) of interstate or foreign commerce of, or of any facility
of a national, state or other securities exchange of any Restricted
Jurisdiction and the Offer may not be capable of acceptance by any
such use, means, instrumentality or facilities.
J.P. Morgan Limited, which conducts its UK investment banking
business as J.P. Morgan Cazenove and is authorised and regulated in
the United Kingdom by the Financial Services Authority, is acting
exclusively as financial adviser to Upsher-Smith and USL and for no
one else in connection with the matters set out in this
announcement and will not be responsible to anyone other than
Upsher-Smith and USL for providing the protections afforded to its
clients nor for providing advice in relation to the matters set out
in this announcement.
Charles Stanley & Co Limited, trading as Charles Stanley
Securities and WG Partners, which is authorised and regulated in
the United Kingdom by the Financial Services Authority, is acting
exclusively as financial adviser to Proximagen and no one else in
connection with the matters set out in this announcement and will
not be responsible to anyone other than Proximagen for providing
the protections afforded to its clients nor for providing advice in
relation to the matters set out in this announcement.
Cenkos Securities plc, which is authorised and regulated in the
United Kingdom by the Financial Services Authority, is acting as
nominated adviser and broker to Proximagen and no one else in
connection with the matters set out in this announcement and will
not be responsible to anyone other than Proximagen for providing
the protections afforded to its clients nor for providing advice in
relation to the matters set out in this announcement.
Notice to US investors in Proximagen
The Acquisition relates to the shares of an English company that
is a foreign private issuer (as defined under Rule 3b-4 under the
US Exchange Act) and is being made by means of a scheme of
arrangement provided for under English company law. A transaction
effected by means of a scheme of arrangement is not subject to the
tender offer rules or the proxy solicitation rules under the US
Exchange Act. Accordingly, the Acquisition is subject to the
disclosure requirements and practices applicable in the UK to
schemes of arrangement, including the City Code and the AIM Rules,
which differ from the disclosure requirements of United States
tender offer and proxy solicitation rules. Financial information
included in this announcement and the Scheme Document has been or
will have been prepared in accordance with accounting standards
applicable in the United Kingdom that may not be comparable to
financial information of US companies or companies whose financial
statements are prepared in accordance with generally accepted
accounting principles in the United States. If, in the future, USL
exercises the right to implement the Acquisition by way of a
takeover offer, such offer will be made in compliance with
applicable laws and regulations including US securities laws to the
extent applicable.
No registration statement will be filed with the SEC or any
state securities regulators in the US in connection with the
Acquisition, and the Loan Notes to be issued pursuant to the terms
of the Class I CVRs will not be registered under the US Securities
Act.
Neither the SEC, nor any US state securities commission or any
other regulatory authority, has passed upon, or endorsed the merits
of, or approved or disapproved of the Loan Notes to be issued in
connection with the Acquisition, or determined if this announcement
is accurate or adequate. Any representation to the contrary is a
criminal offence in the US.
Notice to New Hampshire residents
Neither the fact that a registration statement or an application
for a license has been filed under Chapter 421-B of the New
Hampshire Revised Statutes Annotated, 1955, as amended, or "RSA,"
with the state of New Hampshire nor the fact that a security is
effectively registered or a person is licensed in the state of New
Hampshire constitutes a finding by the Secretary of State that any
document filed under RSA 421-B is true, complete and not
misleading. Neither any such fact nor the fact that an exemption or
exception is available for a security or a transaction means that
the Secretary of State has passed in any way upon the merits or
qualifications of, or recommended or given approval to, any person,
security or transaction. It is unlawful to make, or cause to be
made, to any prospective purchaser, customer or client any
representation inconsistent with the provisions of this
paragraph.
Forward-Looking Statements
This announcement contains certain forward-looking statements
with respect to USL, Upsher-Smith and Proximagen. 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, aim, will, may, would, could
or should or other words of similar meaning or the negative
thereof. Forward-looking statements include statements relating to
the following: (i) future capital expenditures, expenses, revenues,
economic performance, financial conditions, dividend policy, losses
and future prospects; (ii) business and management strategies and
the expansion and growth of the operations of the Upsher-Smith
Group or the Proximagen Group; and (iii) the effects of government
regulation on the business of the Upsher-Smith Group or the
Proximagen Group.
These forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of any such person, or
industry results, to be materially different from any results,
performance or achievements expressed or implied by such
forward-looking statements. These forward-looking statements are
based on numerous assumptions regarding the present and future
business strategies of such persons and the environment in which
each will operate in the future. All subsequent oral or written
forward-looking statements attributable to USL, Upsher-Smith or
Proximagen or any persons acting on their behalf are expressly
qualified in their entirety by the cautionary statement above.
Nothing contained herein shall be deemed to be a forecast,
projection or estimate of the future financial performance of
Upsher-Smith, Proximagen or the Enlarged Group following completion
of the Acquisition, unless otherwise stated.
Dealing and Opening Position Disclosure Requirements
Under Rule 8.3(a) of the City Code, any person who is interested
in one per cent. 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 10(th) business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 pm (London time) on the 10(th) 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 City Code, any person who is, or becomes,
interested in one per cent. 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 of
the City Code). 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.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT
SECURITIES LAWS OF SUCH JURISDICTION
13 June 2012
RECOMMENDED OFFER
for
PROXIMAGEN GROUP PLC
by
USL Pharma International UKLIMITED LTD a wholly-owned subsidiary
of UPSHER-SMITH LABORATORIES, INC.
to be effected
by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006
1. Introduction
The Board of Proximagen and the Board of Upsher-Smith are
pleased to announce that they have reached agreement on the terms
of a unanimously recommended offer by USL, a wholly-owned
subsidiary of Upsher-Smith, for the entire issued and to be issued
share capital of Proximagen (other than shares held by
Upsher-Smith). It is intended that the Acquisition be implemented
by means of a court-sanctioned scheme of arrangement under Part 26
of the Companies Act 2006.
2. The Acquisition
Under the terms of the Acquisition, which will be subject to the
Conditions and other terms set out in Appendix I to this
announcement and to be set out in the Scheme Document, Proximagen
Shareholders will be entitled to receive:
for each Proximagen Share: 320 pence in cash; and
up to a further 192 pence in either cash or Loan Notes by way of
a contingent value right (a CVR)
The Acquisition excluding the CVRs values Proximagen's fully
diluted share capital at approximately GBP223.0 million ($346.7
million) on the basis of a fully diluted share capital of
69,689,794 Proximagen Shares.
The Acquisition including the CVRs potentially values
Proximagen's fully diluted share capital at up to approximately
GBP356.8 million ($554.7 million) on the basis of a fully diluted
share capital of 69,689,794 Proximagen Shares.
The Acquisition represents an immediate cash premium, excluding
the CVR, of approximately:
-- 16.4 per cent. to 275 pence, being the Closing Price per
Proximagen Share on 12 June 2012 (being the last Business Day prior
to the date of this announcement);
-- 50.5 per cent. to approximately 213 pence, being the three
month average Closing Price per Proximagen Share up to 12 June
2012;
-- 84.6 per cent. to approximately 173 pence, being the six
month average Closing Price per Proximagen Share up to 12 June
2012; and
-- 21.8 per cent. to the enterprise value of Proximagen on 12 June 2012.
Pursuant to the terms of the Acquisition, Proximagen
Shareholders will receive one CVR for each Proximagen Share that
they hold. The CVR is intended to enable Proximagen Shareholders to
share in the future success of two existing Proximagen programs,
VAP-1 and PRX00933. Each CVR will entitle Proximagen Shareholders
to receive up to a further 192 pence in either cash or in Loan
Notes at the election of the Proximagen Shareholder (subject to
applicable securities laws), subject to and in accordance with the
terms and conditions of the CVR.
It is intended that the Acquisition will be implemented by way
of a court-sanctioned scheme of arrangement under Part 26 of the
Companies Act 2006 or, if USL elects, a takeover offer (as that
term is defined under section 974 of the Companies Act 2006). The
purpose of the Scheme is to enable USL to acquire the whole of the
issued and to be issued share capital of Proximagen that
Upsher-Smith does not already own. The Scheme, which will be
subject to the Conditions set out in this announcement, will
require the sanction of the Court.
In the event that the Acquisition is to be implemented by way of
an Offer, the Proximagen Shares will be acquired pursuant to the
Offer fully paid and free from all liens, charges, equitable
interests, encumbrances and rights of pre-emption and any other
interests of any nature whatsoever and together with all rights
attaching thereto. Any New Proximagen Shares issued to USL pursuant
to the Scheme will be issued on the same basis.
3. CVRs and Loan Notes
CVRs
Pursuant to the terms of the Acquisition, Proximagen
Shareholders will receive one CVR for each Proximagen Share that
they hold. The CVR is intended to enable Proximagen Shareholders to
share in the future success of two existing Proximagen programs,
VAP-1 and PRX00933 (together the CVR Programs). Each CVR will
entitle Proximagen Shareholders to receive up to a further 192
pence (the CVR Cap) in either cash or in Loan Notes at the election
of the Proximagen Shareholder (subject to applicable securities
laws), subject to and in accordance with the terms and conditions
of the CVR.
Proximagen owns the worldwide rights to VAP-1, a small molecule
vascular adhesion protein program for treating inflammation
(amongst other potential indications). The lead compound has
completed the single ascending dose phase of a Phase I study and
the multiple ascending dose phase has recently been initiated. The
Phase I study is due to be completed by the end of 2012. This will
be followed by a Phase II proof of concept study in 2013 and, if
successful, the Enlarged Group would expect to out-licence this CVR
Program at that time.
Proximagen also owns the worldwide rights to PRX00933, an oral
5-HT2c agonist for treating obesity. In Phase II trials, PRX00933
showed a dose-dependent and statistically significant decrease in
body weight and has been shown to be safe and well tolerated and
has been administered to approximately 400 patients. The Enlarged
Group will endeavour to out-licence this CVR Program following the
completion of the Acquisition.
The CVR is a complex instrument and a number of factors will
determine the actual amount paid (if any) to Proximagen
Shareholders by way of the CVRs, details of which will be set out
in the Scheme Document.
The CVRs will provide CVR Holders with a contingent right to
receive Loan Notes (subject to applicable securities laws) or cash
payments over a period of up to 5 years (the CVR Term). The total
amount payable under each CVR is subject to the CVR Cap (being 192
pence) and the amount payable will be a proportion of CVR Net
Revenues (as defined below) received from the commercialisation of
either or both of the CVR Programs determined in accordance with
the following formula:
CVRs entitlement = 57.5% of Net Revenues derived from the VAP-1
CVR Program and 39.5% of Net Revenues from the PRX00933 CVR Program
(the CVR Net Revenues)
For these purposes:
Net Revenues include revenues received from the
commercialisation of the relevant CVR Program (e.g. licensing fees,
milestone payments, royalties and other similar payments) less the
Enlarged Group's Development Costs in respect of that CVR
Program.
Illustrative examples of how the formula would be applied to
determine the amount of payment due (if any) under the CVR, in each
case on the basis of the assumptions described therein, are set out
in Appendix IV of this announcement.
Actual payments will depend entirely upon Net Revenues generated
by the CVR Programs and are capped at a maximum level. The minimum
payment on any payment date, or over the entire period, could be
zero. There will be no interest conferred by a CVR in the economic
activities of the combined business generally.
The CVRs will be an obligation of USL pursuant to the CVR Deed
Poll. USL's obligations under the CVRs will be guaranteed by
Upsher-Smith.
J.P. Morgan Cazenove has not been required to confirm, and has
not confirmed, that resources are available to Upsher-Smith to
satisfy payments under the CVRs or the Loan Notes and shareholders
will be at risk if, for any reason, Upsher-Smith is not in a
position to meet the guarantee of USL's obligations.
The CVR Deed Poll will contain certain provisions relating to
the development of the CVR Programs, as follows:
-- It is proposed that a high level development and
commercialisation plan for the CVR Programs will be agreed in
advance with Upsher-Smith. The CVR representative will be appointed
by USL to (amongst other things) monitor the performance of USL and
Upsher-Smith of their obligations under the CVR Deed Poll. The
parties have invited Peter Allen the current non-executive chairman
of Proximagen, to be the CVR representative. Where a material
departure is proposed to the development and commercialisation
plan, the departure will need to be agreed in advance with, and
will be subject to, the approval of the designated CVR
representative.
-- USL and Upsher-Smith will be obliged to use "diligent
efforts" to develop the CVR Programs in a commercial manner during
the CVR Term. "Diligent efforts" includes using such efforts and
employing such resources normally used by persons in a business of
a nature similar to the Enlarged Group relating to the research,
development or commercialisation of programs of a similar stage in
their development, and includes the obligation to act in good faith
relating to the implementation of the development and
commercialisation plan and any variation of such plan and to not
take any action (or fail to take action) with the direct aim of
avoiding, reducing, delaying or frustrating their obligations in
respect of the CVRs pursuant to the CVR Deed Poll.
-- In the event that the entire share capital of Upsher-Smith is
acquired by a third party during the CVR Term, the CVRs will be
paid out in full up to the limit of the CVR Cap.
Proximagen Shareholders will be entitled to make an election as
to whether they receive either Class I CVRs or Class II CVRs. Each
Class I CVR will entitle the Class I CVR Holder to receive Loan
Notes (subject to applicable securities laws), in an amount up to
the CVR Cap, the principal of which will be redeemable in cash on
the relevant redemption date. Each Class II CVR will entitle the
Class II CVR Holder to receive further cash, in an amount up to the
CVR Cap.
The CVRs will be non-transferable other than to certain
permitted transferees and no application will be made for the CVRs
to be listed or dealt in on any stock exchange. The CVRs will be
governed by English law and will not be represented by any
certificate or other evidence of title. No interest is payable in
respect of the CVRs, and the merger consideration represented by
the CVRs will only be payable in certain circumstances described
herein and in the Scheme Document. The Loan Notes will not be
issued to US Persons or persons located in the United States.
Accordingly, such US investors will only have the option to take
Class II CVRs.
If the laws of any relevant jurisdiction make it illegal for
Proximagen Shareholders to hold CVRs or would require any
qualification of the CVRs under any applicable laws or regulations,
they may not be entitled to the CVRs or the amounts which may be
payable thereon.
Further details on the CVRs will be contained in the Scheme
Document.
Loan Notes
The Loan Notes will be governed by English law and will be
issued, credited as fully paid, in integral multiples of 1 pence
nominal value. The Loan Notes will have the benefit of an unsecured
guarantee from Upsher-Smith in respect of all obligations for the
life of the Loan Notes. The Loan Notes will be non-transferable
other than to certain permitted transferees and no application will
be made for them to be listed or dealt in on any stock exchange.
The Loan Notes will not be qualifying corporate bonds.
The Loan Notes will bear interest from the date of issue to the
relevant holder of the Loan Notes at a rate per annum at the higher
of (i) zero; and (ii) 0.25 per cent. below LIBOR. Interest will be
payable semi-annually on 30 June and 31 December each year (or, if
that day is not a Business Day, on the immediately following
Business Day).
The Loan Notes will be issued in a number of tranches in
accordance with the terms of the Class I CVRs.
The term of each tranche of the Loan Notes will be one year from
the date of issue of that tranche. On the expiry of the term, USL
will redeem the outstanding Loan Notes for cash at par (together
with accrued interest less any tax required by law to be withheld
or deducted therefrom). A holder of the Loan Notes may opt to
redeem his notes in full prior to the expiry of the term, subject
to that holder giving three months' written notice to USL of the
redemption, such notice to expire not less than six months and one
day following the date of issue.
Full details of the Loan Notes will be contained in the Scheme
Document.
Proximagen Shareholders should consider carefully, in light of
their own investment objectives and tax position, whether they wish
to elect for Class I CVRs which will entitle the Class I CVR Holder
to receive Loan Notes and are strongly advised to seek their own
independent financial advice before making any such election.
4. Background to and reasons for the Acquisition
Upsher-Smith and Proximagen have been working closely together
on projects since 2008, including tonabersat, a clinical stage
program, and the PRX1 program which is in pre-clinical development.
Upsher-Smith and Proximagen have built a strong and mutually
respectful relationship through their existing work that has
brought each company's scientific and management teams closer as
they have grown their respective capabilities in a manner that is
complementary to the overall partnership. The Acquisition will
further strengthen this existing relationship between the two
organisations.
The Acquisition provides Upsher-Smith with expanded research and
development capabilities and a platform for future growth in
product development. Proximagen's pipeline contains a number of
programs in various stages of development across a number of
therapeutic classes including central nervous system, inflammation,
oncology and ophthalmology.
Proximagen also provides Upsher-Smith with an expanded
geographical research and development footprint. Upsher-Smith
intends to retain operations in Cambridge and London and integrate
them to form a robust research and development platform for future
growth.
The combination of Upsher-Smith's clinical development and
commercialisation expertise with Proximagen's research and
development platform delivers a vertically integrated
pharmaceutical company with a number of assets from discovery
through commercialisation. Proximagen's high level of scientific
expertise brings a solid R&D engine to Upsher-Smith's strong
product development and commercialisation capabilities. The
Acquisition will blend each company's respective strengths to
deliver deeper and broader capabilities, supporting the
acceleration of Upsher-Smith's vision of becoming a leader in the
central nervous system space.
5. Background to and reasons for the recommendation
As Proximagen announced in its 2011 preliminary results on 5
March 2012, Proximagen has built a diversified and balanced
portfolio of clinical and pre-clinical programs over the past three
years. However, a portfolio of this size requires significant
investment and whilst Proximagen has been successful in attracting
investment into its programs from its partners and investors, the
Board of Proximagen believes that a company such as Upsher-Smith,
which shares a therapeutic focus with Proximagen and generates
significant revenues from its marketed products, is well placed to
fund the further development of the programs. As such, the
Acquisition represents a very good opportunity for Proximagen's
portfolio of programs to benefit from the extensive resources of
Upsher-Smith and the consequent progress in their development.
The Directors of Proximagen believe that the expanded research
and development capabilities of the Enlarged Group will lead to
increased opportunities for the highly regarded Proximagen research
and development team. Integrating Proximagen's existing Cambridge
and London operations into Upsher-Smith's organisation allows
Proximagen employees to continue developing Proximagen's promising
product pipeline with minimal disruption.
The terms of the Acquisition also represent a significant
premium in cash to Proximagen's share price prior to the date of
this announcement and the Directors consider that the terms of the
Acquisition are a fair reflection of the current and potential
value of Proximagen's portfolio of programs whilst allowing
Proximagen Shareholders to maintain an interest in the potential
future success of the CVR Programs up to a potential value of 192
pence per Proximagen Share. Accordingly the directors of Proximagen
unanimously recommend that Proximagen Shareholders vote in favour
of the Scheme.
The recommendation follows an extensive review by Proximagen and
its advisers of the options available to Proximagen. The Directors
of Proximagen believe that the acquisition of Proximagen by
Upsher-Smith represents an excellent opportunity for all Proximagen
Shareholders to realise a significant return on their investment
created through Proximagen's highly successful track record to date
and also to share in the future success of two of Proximagen's
exciting clinical stage assets. The transaction itself is in line
with Proximagen's long-term strategy of maximising returns for
shareholders, whilst looking to mitigate risk.
6. Recommendation
The Board of Proximagen, which has been so advised by WG
Partners, considers the terms of the Acquisition to be fair,
reasonable and in the best interests of Proximagen Shareholders as
a whole. In providing financial advice to the Board of Proximagen,
WG Partners has taken into account the Board's commercial
assessments. WG Partners is providing the independent financial
advice for the purposes of Rule 3 of the City Code.
Accordingly, the Board of Proximagen unanimously recommends that
Proximagen Shareholders vote in favour of the Scheme resolutions
relating to the Acquisition at the Meetings (or in the event that
the Acquisition is implemented by way of an Offer, to accept the
Offer).
7. Irrevocable undertakings
USL has received irrevocable undertakings from those members of
the Board of Proximagen who hold interests in the Proximagen Shares
(in respect of themselves and, where relevant, their spouse, civil
partner, de facto partner or similar) to vote in favour of the
Scheme or to procure that the registered holder votes in favour of
the Scheme (or, in the event that the Acquisition is implemented by
way of an Offer, to accept the Offer or procure acceptance of the
Offer) in respect of their entire beneficial holdings which total
901,256 Proximagen Shares in aggregate representing approximately
1.43 per cent. of Proximagen's issued share capital as at the date
of this announcement.
In addition, USL has also received irrevocable undertakings from
certain other Proximagen Shareholders, namely Invesco Asset
Management, IP Group plc, King's College London, Lansdowne Partners
and H. Lundbeck A/S, to vote in favour of the Scheme or to procure
that the registered holder votes in favour of the Scheme (or, in
the event that the Acquisition is implemented by way of an Offer,
to accept the Offer or procure acceptance of the Offer) in respect
of their entire beneficial holdings of such shares (or, in the case
of Invesco Asset Management, the Proximagen Shares which it manages
on a discretionary basis for its clients and, in the case of
Lansdowne Partners, as agent for Lansdowne funds) which total
44,552,330 Proximagen Shares in aggregate representing
approximately 70.58 per cent. of Proximagen's issued share capital
as at the date of this announcement.
In aggregate, therefore, USL has received irrevocable
undertakings to vote in favour of the Scheme at the Court Meeting
and the resolutions to be proposed at the Proximagen General
Meeting in respect of a total of 45,453,586 Proximagen Shares,
representing 72.01 per cent. of the share capital of Proximagen in
issue as at the date of this announcement.
Further details of these irrevocable undertakings are set out in
Appendix III.
Copies of the irrevocable undertakings will be on display on
Proximagen's and Upsher-Smith's websites (www.proximagen.com and
www.upsher-smith.com respectively) by no later than 12 noon (London
time) on the Business Day following the date of this
announcement.
8. Information relating to Upsher-Smith and USL
Upsher-Smith
Upsher-Smith, founded in 1919, is an independent and
privately-owned specialty pharmaceutical company headquartered in
Maple Grove, Minnesota that focuses on product growth and
innovation for branded, branded-generic and generic
pharmaceuticals. Upsher-Smith has a particular focus on providing
therapies to assist people suffering from central nervous system
diseases (including epilepsy, Parkinson's disease and Alzheimer's
disease) and also produces products relating to cardiology,
dermatology and women's health. In addition to products currently
marketed, Upsher-Smith has an emerging neurology pipeline with
three products in clinical development, two of which are in Phase
III clinical trials.
Upsher-Smith's central nervous system pipeline in clinical
development includes USL255, an investigational extended-release
topiramate for the management of epilepsy in adults, which is being
studied in an ongoing international Phase III clinical trial
(PREVAIL). Upsher-Smith is also developing USL261, an
investigational intranasal midazolam for the rescue treatment of
seizures in patients on stable anti-epileptic drug regimens who
require control of intermittent bouts of increased seizure
activity, frequently referred to as seizure clusters. USL261 has
been granted orphan drug designation for this use by the U.S. Food
and Drug Administration and is currently in Phase III of
development. Another Upsher-Smith development program involves
USL260 (tonabersat), an investigational drug in Phase I of
development that is a potential first-in-class neuronal gap
junction modulator that is also being explored as a potential
treatment for epilepsy.
Upsher-Smith has offices in Plymouth, Minnesota, Denver,
Colorado and Morristown, New Jersey, in the United States, and has
640 employees. Upsher-Smith's executive management team includes
Mark Evenstad, President and Chief Executive Officer, Tom Burke,
Chief Operating Officer, Stephen Robinson, Chief Financial Officer,
Dr. William Pullman, Chief Scientific Officer and Joel Green, Chief
Legal Officer.
Upsher-Smith generated total revenues of $451 million during its
last financial year, ending 1 January 2012, and earnings before
interest, income taxes, deprecation and amortisation of $151
million. As at 1 January 2012, Upsher-Smith had total assets of
$253 million.
Upsher-Smith currently holds approximately 16 per cent. of the
issued share capital of Proximagen, having originally entered the
stock through a co-development partnering agreement in July 2008
and followed on by participating in Proximagen's June 2009
fundraising and making market purchases thereafter.
USL
USL is a newly incorporated English company which is a
wholly-owned subsidiary of Upsher-Smith established to effect the
Acquisition. USL has not traded prior to the date of this
announcement (except for entering into transactions relating to the
Acquisition).
Further details of USL will be contained in the Scheme
Document.
9. Information relating to Proximagen
Proximagen is a European biotechnology company focused on the
development and commercialisation of novel therapeutics for
diseases of the central nervous system and inflammation. Proximagen
is developing potential new best-in-class therapeutics in its core
disease areas including epilepsy, Parkinson's disease and
Alzheimer's disease, as well as in other areas such as
inflammation, oncology and ophthalmology. Proximagen has a number
of existing partnerships with pharmaceutical companies including
Upsher-Smith and H. Lundbeck A/S. Proximagen is currently
developing a broad pipeline of drug candidate programs, with four
programs in the clinical development stage and more than ten
earlier-stage assets being progressed.
Proximagen is incorporated in England and was admitted to
trading on AIM in March 2005. Proximagen is headquartered in London
with research facilities located near Cambridge. Proximagen's
executive management team comprises Kenneth Mulvany, the Chief
Executive Officer and James Hunter, the Finance Director.
Proximagen's senior management team also includes Dr. Bruce
Campbell (non-clinical Development), Michael Brennan (Corporate
Development) and Tim Sparey (Business Development).
Proximagen generated revenues of GBP0.2 million during its last
financial year, ending 30 November 2011 (GBP0.13 million during the
six months ending 31 May 2012), and made a net loss after tax of
GBP6.2 million in the last financial year (GBP3.98 million during
the six months ending 31 May 2012). As at 30 November 2011
Proximagen had net assets of GBP52.6 million and cash and cash
equivalents of approximately GBP51.6 million (GBP48.8 million and
GBP48 million respectively as at 31 May 2012). Proximagen's market
capitalisation prior to the date of this announcement was
approximately GBP173.6 million.
10. Offer Related Arrangements
Confidentiality Agreement
Upsher-Smith and Proximagen entered into the Confidentiality
Agreement pursuant to which each of Upsher-Smith and Proximagen
have agreed to keep confidential information about the other party
and not to disclose to third parties (other than permitted
recipients) confidential information exchanged by them unless
required by law or regulation. These confidentiality obligations
will remain in force until completion of the Acquisition, or for a
period of five years from the date that negotiations in respect of
the Acquisition cease or are terminated.
11. Financing of the Acquisition
The cash consideration payable by USL under the Acquisition will
be funded from cash on the balance sheet of the Upsher-Smith Group
and new debt facilities arranged by J.P. Morgan Securities LLC,
U.S. Bank National Association and Wells Fargo Securities, LLC in
the form of a $300 million secured credit agreement (the Credit
Agreement) to be provided by JPMorgan Chase Bank, N.A., U.S. Bank
National Association and Wells Fargo Bank, National Association to
Upsher-Smith. It is not intended that the payment of any interest
or other charges in respect of such facility will depend on the
business of Proximagen. Upsher-Smith has agreed that it will not
waive, amend or vary any term of the Scheme (or, in the event that
the Acquisition is implemented by way of a takeover offer, the
Offer) in a manner or to an extent that is reasonably likely to be
materially prejudicial to the interests of the Lenders under the
Credit Agreement unless such waiver, amendment or variation (1) is
required by any law or regulation (including the Code), the London
Stock Exchange, the Panel or a court of competent jurisdiction or
(2) is made with the consent of the Administrative Agent and the
Required Lenders (acting on the instructions of the Required
Lenders) (each as defined in the Credit Agreement) (acting
reasonably). J.P. Morgan Cazenove is satisfied that resources are
available to USL sufficient to satisfy in full the immediate cash
consideration payable under the Acquisition.
J.P. Morgan Cazenove has not been required to confirm, and has
not confirmed, that resources are available to Upsher-Smith to
satisfy payments under the CVRs or the Loan Notes and shareholders
will be at risk if, for any reason, Upsher-Smith is not in a
position to meet the guarantee of USL's obligations.
Further information on the debt financing of the Acquisition
will be set out in the Scheme Document.
12. Management, employees and intentions regarding the Proximagen Group
Upsher-Smith has high regard for the skills and experience of
the existing management and employees of Proximagen. Upsher-Smith
confirms their existing rights, including pension rights will be
fully observed.
Upsher-Smith attaches great importance to Proximagen's Cambridge
and London operations, which have contributed to Proximagen's
success to date, and which Upsher-Smith would anticipate playing an
important role in the development of the Enlarged Group.
Accordingly, it is Upsher-Smith's intention to retain operations in
Cambridge and London and Proximagen's existing operating
structure.
13. Proximagen Option Schemes
The Scheme will extend to any Proximagen Shares that are
unconditionally allotted or issued pursuant to the exercise of
options or the vesting of awards under the Proximagen Option
Schemes in each case on or prior to the Scheme Record Time.
Proximagen has outstanding options over a total of 951,530
Proximagen Shares under the EMI Plan and 5,618,663 Proximagen
Shares under the Unapproved Plan. In the event of Proximagen
Shareholders approving the Scheme and the Court sanctioning the
Scheme it is proposed that the Proximagen Option Schemes would be
amended to permit the options to vest and become exercisable in
advance of the change of control in order to preserve potential UK
corporation tax relief under the Corporation Tax Act 2009 and allow
option holders to participate in the Scheme as shareholders of
Proximagen. All options that have not been exercised prior to the
Effective Date shall lapse.
Options will be exercisable on a cashless basis to enable option
holders to exercise their options without the need to pay to
Proximagen upfront the relevant exercise amount with respect to
each option, with such exercise amount deducted from the cash
component of his or her consideration received under the Scheme and
paid to Proximagen. Where there is a liability to employers'
National Insurance Contributions on the exercise of the options,
this will be met by Proximagen.
Further details regarding the proposals for participants in the
Proximagen Option Schemes will be set out in the Scheme Document
and in separate letters to be sent to participants in the
Proximagen Option Schemes within the next 28 days. In the event
that this Acquisition is to be implemented by way of an Offer,
proposals will be put to the holders of options under the
Proximagen Option Schemes to enable them to participate in the
Offer on an equivalent basis in the event that such Offer becomes
wholly unconditional.
14. Expected timetable
Proximagen currently anticipates that:
(a) it will despatch the Scheme Document, together with the
Forms of Proxy and Form of Election, to Proximagen Shareholders
and, for information only, to the holders of options granted under
the Proximagen Option Schemes within the next 28 days (or such
later date as may be agreed with the Panel);
(b) the Court Meeting and Proximagen General Meeting is expected
to take place on or around 20 July 2012; and
(c) subject to the Scheme becoming unconditional and effective
in accordance with its terms, the Acquisition is expected to become
effective on or around 14 August 2012, with the consideration being
issued to Proximagen Shareholders no later than 14 days after the
Effective Date.
The timing of events which relate to the implementation of the
Acquisition is, however, subject to the approval of the Court and
is therefore subject to change. A full anticipated timetable will
be set out in the Scheme Document.
If the Acquisition does not become effective by the Long Stop
Date, the Acquisition will lapse except where the approval of
Proximagen Shareholders at the Court Meeting and Proximagen General
Meeting is obtained before this date, in which case the Long Stop
Date for the Acquisition may be extended to such later date as USL
and Proximagen may agree and, if appropriate, the Court and the
Panel may approve.
15. Disclosure of interests in Proximagen Shares
Upsher-Smith holds 10,015,700 Proximagen Shares (representing
15.9 per cent of Proximagen's issued share capital as at the date
of this announcement) and Mark Evenstad, a director of USL holds
10,000 Proximagen Shares (representing 0.02 per cent of
Proximagen's issued share capital as at the date of this
announcement).
Each of USL and Upsher-Smith confirms that it is making on the
date of this announcement an Opening Position Disclosure, setting
out the details required to be disclosed by it under Rule 8.1(a) of
the City Code. The Opening Position Disclosure does not include all
relevant details in respect of USL's concert parties and USL
confirms that a further disclosure in accordance with Rule 8.1(a)
and Note 2(a)(i) on Rule 8 of the City Code will be made as soon as
possible, if required.
As at the close of business on 12 June 2012, being the last
practicable date prior to the publication of this announcement,
save for: (i) the disclosures in this paragraph 15; and (ii) the
irrevocable undertakings referred to in paragraph 7 above, none of
USL or any of its directors or Upsher-Smith or any of its directors
or, so far as Upsher-Smith and the Board of USL are aware, any
person acting, or deemed to be acting, in concert with USL:
-- had an interest in, or right to subscribe for, relevant securities of Proximagen;
-- had any short position in (whether conditional or absolute
and whether in the money or otherwise), including any short
position under a derivative, any agreement to sell or any delivery
obligation or right to require another person to purchase or take
delivery of, relevant securities of Proximagen;
-- had procured an irrevocable commitment or letter of intent to
accept the terms of the Acquisition in respect of relevant
securities of Proximagen; or
-- had borrowed or lent any Proximagen Shares.
Furthermore, save for the irrevocable undertakings described in
paragraph 7 above, no arrangement exists between USL, Upsher-Smith
or Proximagen or an associate of USL, Upsher-Smith or Proximagen in
relation to Proximagen Shares. For these purposes, an arrangement
includes any indemnity or option arrangement, any agreement or any
understanding, formal or informal, of whatever nature, relating to
Proximagen Shares which may be an inducement to deal or refrain
from dealing in such securities.
16. Scheme of Arrangement
It is intended that the Acquisition will be effected by a court
sanctioned scheme of arrangement between Proximagen and the Scheme
Shareholders under Part 26 of the Companies Act 2006. The purpose
of the Scheme is to provide for USL to become owner of the whole of
the issued and to be issued share capital of Proximagen.
Under the Scheme, the Acquisition is to be principally achieved
by:
-- the cancellation or transfer (as the case may be) of the
Scheme Shares held by Scheme Shareholders in consideration for
which Scheme Shareholders will receive consideration on the basis
set out in paragraph 2 of this announcement;
-- amendments to Proximagen's articles of association to ensure
that any Proximagen Shares issued (other than to USL or any
subsidiaries or nominees of Upsher-Smith) between approval of the
Scheme at the Court Meeting and the Scheme Record Time will be
subject to the Scheme and that any Proximagen Shares issued after
the Scheme Record Time will automatically be acquired by USL;
and
-- the issue of New Proximagen Shares to USL provided for in the Scheme.
The Acquisition will be subject to the Conditions and further
terms and conditions referred to in Appendix I to this announcement
and to be set out in the Scheme Document.
To become effective, the Scheme requires, amongst other things,
the approval of the Proximagen Shareholders by the passing of a
resolution at the Court Meeting. The resolution must be approved by
a majority in number representing not less than three-fourths of
the voting rights of the holders of the Proximagen Shares (or the
relevant class or classes thereof, if applicable) present and
voting, either in person or by proxy, at the Court Meeting. To
become effective, the Scheme also requires the passing of a special
resolution at the Proximagen General Meeting, requiring the
approval of Proximagen Shareholders representing at least
three-fourths of the votes cast at the Proximagen General Meeting
(either in person or by proxy).
Following the Meetings, the Scheme must be sanctioned by the
Court and the associated Capital Reduction must be confirmed by the
Court. The Scheme will become effective in accordance with its
terms on delivery of the Scheme Court Order, the Reduction Court
Order and the Statement of Capital giving details of Proximagen's
share capital, as altered by the Capital Reduction, attached
thereto to the Registrar of Companies, and, in relation to the
Capital Reduction, the Reduction Court Order and attached minute
being filed with and registered by the Registrar of Companies.
The expected timetable for the implementation of the Scheme is
as follows:
Court Meeting to approve the Scheme 20 July 2012 or as soon as
reasonably practicable thereafter
Proximagen General Meeting 20 July 2012 or as soon as reasonably
practicable thereafter
Court hearing to approve the Scheme 9 August 2012 or as soon as
reasonably practicable thereafter
Court hearing to confirm the Capital 13 August 2012 or as soon as reasonably
Reduction practicable thereafter
Effective Date of Scheme 14 August 2012 or the Business Day
following the Court Hearing to confirm the Capital Reduction, if
later
Upon the Scheme becoming effective, it will be binding on all
Proximagen Shareholders, irrespective of whether or not they
attended or voted at the Meetings and the consideration due under
the Acquisition will be despatched by USL to Scheme Shareholders no
later than 14 days after the Effective Date.
The Scheme will contain a provision for USL and Proximagen to
jointly consent, on behalf of all persons concerned, to any
modification of or addition to the Scheme or to any condition that
the Court may approve or impose. Proximagen has been advised that
the Court would be unlikely to approve any modification of, or
addition to, or impose a condition to the Scheme which might be
material to the interests of Scheme Shareholders unless Scheme
Shareholders were informed of such modification, addition or
condition. It would be a matter for the Court to decide, in its
discretion, whether or not a further meeting of the Scheme
Shareholders should be held in these circumstances.
The Scheme Document will include full details of the Scheme,
together with notices of the Court Meeting and the Proximagen
General Meeting and the expected timetable, and will specify the
action to be taken by Scheme Shareholders.
The Scheme will be governed by English law. The Scheme will be
subject to the applicable requirements of the City Code, the Panel
and the AIM Rules. The bases and sources of certain information
contained in this announcement are set out in Appendix II to this
announcement. Illustrative CVR payment calculations are set out in
Appendix IV to this announcement. Certain terms used in this
announcement are defined in Appendix V to this announcement.
17. Delisting and re-registration
Prior to the Scheme becoming effective and subject to any
applicable requirements of the AIM Rules, Upsher-Smith intends to
procure the making of an application by Proximagen for cancellation
of the trading in Proximagen Shares on AIM on the first Business
Day following the Effective Date.
Share certificates in respect of the Proximagen Shares will
cease to be valid and should be destroyed following the Effective
Date.
As soon as practicable after the Effective Date, it is intended
that Proximagen will be re-registered as a private limited company
under the relevant provisions of the Companies Act 2006.
18. Overseas Proximagen Shareholders
The distribution of this announcement to, and the availability
of the Acquisition to, persons who are not resident in the United
Kingdom or the United States may be affected by the laws of their
relevant jurisdiction. Such persons should inform themselves of and
observe any applicable legal or regulatory requirements of their
jurisdiction.
Further details in relation to Overseas Proximagen Shareholders
will be contained in the Scheme Document.
19. Rule 2.10 disclosure
In accordance with Rule 2.10 of the City Code, Proximagen
confirms that as at the close of business on 12 June 2012, being
the last Business Day before this announcement, it had 63,119,601
ordinary shares in issue and admitted to trading on the AIM Market
of the London Stock Exchange under ISIN reference GB00B06FMX57.
20. Documents on display
Copies of the following documents will, by no later than 12 noon
(London time) on the Business Day following the date of this
announcement, be made available on Upsher-Smith's website at
www.upsher-smith.com and Proximagen's website at www.proximagen.com
until the Effective Date:
-- the irrevocable undertakings referred to in paragraph 7 above
and summarised in Appendix III to this announcement;
-- the Confidentiality Agreement;
-- the Credit Agreement;
-- the Intercompany Loan Agreement dated 12 June 2012 between
USL (as borrower) and Upsher-Smith (as lender);
-- the Syndication and Fee Letter dated 12 June 2012 between
Upsher-Smith, J.P. Morgan Securities LLC and JPMorgan Chase Bank,
N.A.;
-- the Guaranty dated 12 June 2012 between USL Pharma, Inc. (as
the subsidiary guarantor) in favour of JPMorgan Chase Bank, N.A.
(as administrative agent for the secured parties);
-- the Pledge and Security Agreement dated 12 June 2012 between
Upsher-Smith and USL Pharma, Inc. (as grantors) and JPMorgan Chase
Bank, N.A. (as administrative agent for the secured parties);
-- the Confirmatory Grant of Security Interest in United States
Trademarks dated 12 June 2012, by Upsher-Smith (as grantor) and
JPMorgan Chase Bank, N.A. (as administrative agent for the secured
parties);
-- the Confirmatory Grant of Security Interest in United States
Patents dated 12 June 2012, by Upsher-Smith (as grantor) and
JPMorgan Chase Bank, N.A. (as administrative agent for the secured
parties);
-- the Wells Fargo Letter dated 12 June 2012 between Wells Fargo
Bank, National Association and Upsher-Smith; and
-- the U.S. Bank Letter dated 12 June 2012 between U.S. Bank
National Association and Upsher-Smith.
With the consent of the Panel, which has been given, under Rule
26.1, from the time of publishing of the Scheme Document, the side
letter relating to market flex provisions applicable to the
financing of the Acquisition will be made available on
Upsher-Smith's website at www.upsher-smith.com until the completion
of the Acquisition.
21. General
Upsher-Smith reserves the right to elect to implement the
Acquisition by way of an Offer for the entire issued and to be
issued share capital of Proximagen not already held by USL or any
subsidiary or nominees of Upsher-Smith as an alternative to the
Scheme. In such an event, an Offer will be implemented on the same
terms (subject to appropriate amendments), so far as applicable, as
those which would apply to the Scheme, but with an acceptance
condition which will be set at 90 per cent. (or such lower
percentage as Upsher-Smith may decide or the Panel may require), as
referred to in Part A of Appendix I to this announcement.
Upsher-Smith has agreed that any such Offer would remain open for
acceptance for at least 60 days after the Offer Document is
published.
The Acquisition will be subject to the Conditions and other
terms set out in this announcement and to the full terms and
conditions which will be set out in the Scheme Document. Appendix I
to this announcement contains a summary of the principal terms and
conditions. Appendix II to this announcement contains bases and
sources of certain information contained in this announcement.
Details of irrevocable undertakings received by USL are set out in
Appendix III to this announcement. Illustrative CVR payment
calculations are set out in Appendix IV to this announcement.
Certain terms used in this announcement are defined in Appendix V
to this announcement.
A copy of this announcement will be available, free of charge,
subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, at Proximagen's website at
www.proximagen.com and at Upsher-Smith's website at
www.upsher-smith.com by no later than 12 noon (London time) on the
Business Day following the date of this announcement. Neither the
contents of Proximagen's website, the contents of Upsher-Smith's
website, nor the content of any other website accessible from
hyperlinks on either Proximagen's or Upsher-Smith's website, is
incorporated into or forms part of, this announcement.
Enquiries:
Upsher-Smith and USL
Mark Evenstad, Chief Executive Officer
Tom Burke, Chief Operating Officer +1 (763) 315 2000
J.P. Morgan Cazenove
(Financial adviser to Upsher-Smith and
USL)
James Mitford +44 (0) 20 7742
Christopher Dickinson 4000
Kovak-Likly Communications
(PR adviser to Upsher-Smith)
Elizabeth Likly, Principal
Bruce Likly, Principal +1 (203) 762 8833
Proximagen
Kenneth Mulvany, Chief Executive Officer +44 (0) 20 7400
James Hunter, Finance Director 7700
WG Partners
(Financial adviser to Proximagen)
David Wilson
Stephen Waterman +44 (0) 20 7149
Karri Vuori 6000
Cenkos Securities plc
(Nominated adviser and broker to Proximagen)
Bobbie Hilliam (NOMAD) +44 (0) 20 7397
Julian Morse 8900
M:Communications (Media enquiries) +44 (0) 20 7920
(PR adviser to Proximagen) 2330
Mary-Jane Elliott proximagen@mcomgroup.com
Sarah Macleod
Hollie Vile
This announcement is not intended to and does not constitute or
form part of any offer to sell or subscribe for or any invitation
to purchase or subscribe for any securities or the solicitation of
any vote or approval in any jurisdiction pursuant to the
Acquisition or otherwise. The Acquisition will be made solely
pursuant to the terms of the Scheme Document (or, if applicable,
the Offer Document), which will contain the full terms and
conditions of the Acquisition or to elect to sell shares in
connection with the Acquisition, as the case may be), including
details of how to vote in respect of the Acquisition. Any decision
in respect of, or other response to, the Acquisition should be made
only on the basis of the information contained in the Scheme
Document.
This announcement has been prepared for the purpose of complying
with English law and the City Code and the information disclosed
may not be the same as that which would have been disclosed if this
announcement had been prepared in accordance with the laws of
jurisdictions outside the United Kingdom.
The release, publication or distribution of this announcement in
jurisdictions other than the United Kingdom and the United States
may be restricted by law and therefore any persons who are subject
to the laws of any jurisdiction other than the United Kingdom and
the United States should inform themselves about, and observe any
applicable requirements. In particular, the ability of persons who
are not resident in the United Kingdom or the United States to vote
with respect to their Proximagen Shares in relation to the Scheme
at the Meetings, to execute and deliver Forms of Proxy appointing
another to vote at the Meetings on their behalf and to execute and
deliver the Form of Election may be affected by the laws of the
relevant jurisdictions in which they are located.
Copies of this announcement and any formal documentation
relating to the Acquisition are not being, and must not be,
directly or indirectly, mailed or otherwise forwarded, distributed
or sent in or into or from any Restricted Jurisdiction and persons
receiving such documents (including custodians, nominees and
trustees) must not mail or otherwise forward, distribute or send
them in or into or from any Restricted Jurisdiction. If the
Acquisition is implemented by way of an Offer (unless otherwise
permitted by applicable law and regulation), the Offer may not be
made directly or indirectly, in or into, or by the use of mails or
any means or instrumentality (including, but not limited to,
facsimile, e-mail or other electronic transmission, telex or
telephone) of interstate or foreign commerce of, or of any facility
of a national, state or other securities exchange of any Restricted
Jurisdiction and the Offer may not be capable of acceptance by any
such use, means, instrumentality or facilities.
J.P. Morgan Limited, which conducts its UK investment banking
business as J.P. Morgan Cazenove and is authorised and regulated in
the United Kingdom by the Financial Services Authority, is acting
exclusively as financial adviser to Upsher-Smith and USL and for no
one else in connection with the matters set out in this
announcement and will not be responsible to anyone other than
Upsher-Smith and USL for providing the protections afforded to its
clients nor for providing advice in relation to the matters set out
in this announcement.
Charles Stanley & Co Limited, trading as Charles Stanley
Securities and WG Partners, which is authorised and regulated in
the United Kingdom by the Financial Services Authority, is acting
exclusively as financial adviser to Proximagen and no one else in
connection with the matters set out in this announcement and will
not be responsible to anyone other than Proximagen for providing
the protections afforded to its clients nor for providing advice in
relation to the matters set out in this announcement.
Cenkos Securities plc, which is authorised and regulated in the
United Kingdom by the Financial Services Authority, is acting as
nominated adviser and broker to Proximagen and no one else in
connection with the matters set out in this announcement and will
not be responsible to anyone other than Proximagen for providing
the protections afforded to its clients nor for providing advice in
relation to the matters set out in this announcement.
Notice to US investors in Proximagen
The Acquisition relates to the shares of an English company that
is a foreign private issuer (as defined under Rule 3b-4 under the
US Exchange Act) and is being made by means of a scheme of
arrangement provided for under English company law. A transaction
effected by means of a scheme of arrangement is not subject to the
tender offer rules or the proxy solicitation rules under the US
Exchange Act. Accordingly, the Acquisition is subject to the
disclosure requirements and practices applicable in the UK to
schemes of arrangement, including the City Code and the AIM Rules,
which differ from the disclosure requirements of United States
tender offer and proxy solicitation rules. Financial information
included in this announcement and the Scheme Document has been or
will have been prepared in accordance with accounting standards
applicable in the United Kingdom that may not be comparable to
financial information of US companies or companies whose financial
statements are prepared in accordance with generally accepted
accounting principles in the United States. If, in the future, USL
exercises the right to implement the Acquisition by way of a
takeover offer, such offer will be made in compliance with
applicable laws and regulations including US securities laws to the
extent applicable.
No registration statement will be filed with the SEC or any
state securities regulators in the US in connection with the
Acquisition, and the Loan Notes to be issued pursuant to the terms
of the Class I CVRs will not be registered under the US Securities
Act.
Neither the SEC, nor any US state securities commission or any
other regulatory authority, has passed upon, or endorsed the merits
of, or approved or disapproved of the Loan Notes to be issued in
connection with the Acquisition, or determined if this announcement
is accurate or adequate. Any representation to the contrary is a
criminal offence in the US.
Notice to New Hampshire residents
Neither the fact that a registration statement or an application
for a license has been filed under Chapter 421-B of the New
Hampshire Revised Statutes Annotated, 1955, as amended, or "RSA,"
with the state of New Hampshire nor the fact that a security is
effectively registered or a person is licensed in the state of New
Hampshire constitutes a finding by the Secretary of State that any
document filed under RSA 421-B is true, complete and not
misleading. Neither any such fact nor the fact that an exemption or
exception is available for a security or a transaction means that
the Secretary of State has passed in any way upon the merits or
qualifications of, or recommended or given approval to, any person,
security or transaction. It is unlawful to make, or cause to be
made, to any prospective purchaser, customer or client any
representation inconsistent with the provisions of this
paragraph.
Forward-Looking Statements
This announcement contains certain forward-looking statements
with respect to USL, Upsher-Smith and Proximagen. 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, aim, will, may, would, could
or should or other words of similar meaning or the negative
thereof. Forward-looking statements include statements relating to
the following: (i) future capital expenditures, expenses, revenues,
economic performance, financial conditions, dividend policy, losses
and future prospects; (ii) business and management strategies and
the expansion and growth of the operations of the Upsher-Smith
Group or the Proximagen Group; and (iii) the effects of government
regulation on the business of the Upsher-Smith Group or the
Proximagen Group.
These forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of any such person, or
industry results, to be materially different from any results,
performance or achievements expressed or implied by such
forward-looking statements. These forward-looking statements are
based on numerous assumptions regarding the present and future
business strategies of such persons and the environment in which
each will operate in the future. All subsequent oral or written
forward-looking statements attributable to USL, Upsher-Smith or
Proximagen or any persons acting on their behalf are expressly
qualified in their entirety by the cautionary statement above.
Nothing contained herein shall be deemed to be a forecast,
projection or estimate of the future financial performance of
Upsher-Smith, Proximagen or the Enlarged Group following completion
of the Acquisition, unless otherwise stated.
Dealing and Opening Position Disclosure Requirements
Under Rule 8.3(a) of the City Code, any person who is interested
in one per cent. 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 10(th) 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 City Code, any person who is, or becomes,
interested in one per cent. 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 of
the City Code). 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.
APPENDIX I
CONDITIONS AND CERTAIN FURTHER TERMS OF THE SCHEME AND THE
ACQUISITION
Part A: Conditions of the Scheme
The Acquisition will be conditional upon the Scheme becoming
unconditional and becoming effective by no later than the Long Stop
Date, or such later date (if any) as USL and Proximagen may (with
the consent of the Panel) agree and, if required, the Court may
allow.
(A) The Scheme will be conditional upon:
(i) its approval by a majority in number representing not less
than three-fourths of the voting rights of the holders of
Proximagen Shares (or the relevant class or classes thereof, if
applicable) present and voting, either in person or by proxy, at
the Court Meeting and at any separate class meeting which may be
required by the Court or at any adjournment of any such
meeting;
(ii) all resolutions necessary to approve and implement the
Scheme being duly passed by the requisite majority or majorities at
the Proximagen General Meeting or at any adjournment of that
meeting; and
(iii) the sanction of the Scheme with or without modification
(but subject to any such modification being acceptable to USL and
Proximagen) and the confirmation of the Capital Reduction by the
Court and the delivery of the Scheme Court Order and the Reduction
Court Order and Statement of Capital to the Registrar of
Companies.
In addition, USL and Proximagen have agreed that the Acquisition
will be conditional upon the following conditions and, accordingly,
the necessary actions to make the Scheme effective will not be
taken unless the following conditions (as amended if appropriate)
have been satisfied (and continue to be satisfied pending the
commencement of the Court Hearing) or, where relevant, waived prior
to the Scheme being sanctioned by the Court:
(B) all necessary notifications, filings and applications having
been made, all regulatory and statutory obligations in any relevant
jurisdiction having been complied with, all appropriate waiting and
other time periods (including any extensions of such waiting and
other time periods) under any applicable legislation or regulations
of any relevant jurisdiction having expired, lapsed or been
terminated in each case in respect of the Acquisition or any aspect
of the Acquisition or its financing, the acquisition or proposed
acquisition of any shares or other securities in, or control of,
Proximagen or any other member of the Wider Proximagen Group by any
member of the Wider Upsher-Smith Group or the carrying on by any
member of the Wider Proximagen Group of its business;
(C) except as Publicly Announced or fairly disclosed in
Disclosed Information, there being no provision of any agreement,
arrangement, licence, permit or other instrument to which any
member of the Wider Proximagen Group is a party or by or to which
any such member or any of its assets is or may be bound, entitled
or subject, which in each case as a consequence of the Acquisition,
the acquisition or proposed acquisition of any shares or other
securities in Proximagen or because of a change in the control or
management of Proximagen, could or might reasonably be expected to
result in (to an extent or in a manner which is material and
adverse in the context of the Acquisition or would have a material
and adverse effect on the Wider Proximagen Group as a whole):
(i) any such agreement, arrangement, licence, permit or
instrument or the rights, liabilities, obligations or interests or
business of any member of the Wider Proximagen Group thereunder, or
interests or business of any such member in or with any other
person, firm, company or body (or any arrangements to which any
such member is a party relating to any such interests or business),
being or becoming capable of being terminated or modified or
adversely affected or any obligation or liability arising or any
action being taken or arising thereunder;
(ii) the rights, liabilities, obligations or interests of any
member of the Wider Proximagen Group under any such agreement,
arrangement, licence, permit or instrument or the interests or
business of any such member in or with, any person, firm, company
or body (or any arrangement or arrangements relating to any such
interests or business) being terminated, adversely modified or
adversely affected or any onerous obligation or liability arising
or any adverse action being taken thereunder;
(iii) any asset owned or used by any member of the Wider
Proximagen Group, or any interest in such asset, being or falling
to be disposed of or charged or ceasing to be available to any
member of the Wider Proximagen Group or any right arising under
which any such asset or interest could be required to be disposed
of or charged or cease to be available to any member of the Wider
Proximagen Group;
(iv) the creation or enforcement of any mortgage, charge or
other security interest over the whole or any part of the business,
property, assets or interest of any member of the Wider Proximagen
Group or any such mortgage, charge or other security (whenever
created, arising or having arisen) becoming enforceable or being
capable of being enforced;
(v) the value of any member of the Wider Proximagen Group or its
financial or trading position or prospects being prejudiced or
adversely affected;
(vi) any member of the Wider Proximagen Group ceasing to be able
to carry on business under any name which it at present uses;
(vii) the creation of any liability (actual or contingent) by
any member of the Wider Proximagen Group;
(viii) any liability of any member of the Wider Proximagen Group
to make any severance, termination, bonus or other payment to any
of its directors or other officers;
(ix) any requirement on any member of the Wider Proximagen Group
to acquire, subscribe, pay up or repay any shares or other
securities; or
(x) any monies borrowed by or any other indebtedness (actual or
contingent) of, or any grant available to any member of the Wider
Proximagen Group, being or becoming repayable or capable of being
declared repayable immediately or prior to its or their stated
maturity date or repayment date, or the ability of such member of
the Wider Proximagen Group to borrow monies or incur any
indebtedness becoming or being withdrawn or inhibited or being
capable of becoming or being withdrawn or inhibited;
and no event having occurred which, under any provision of any
agreement, arrangement, licence, permit or other instrument to
which any member of the Wider Proximagen Group is a party or by or
to which any such member or any of its assets may be bound,
entitled or subject, could reasonably be expected to result in any
of the events or circumstances as are referred to in sub-paragraphs
(i) to (x) of this condition;
(D) no government or governmental, quasi-governmental, supranational, statutory, regulatory, environmental or investigative body, central bank, court, trade agency, association, institution or any other body or person whatsoever in any jurisdiction (each a Third Party) having decided to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference, or enacted, made or proposed any statute, regulation, decision or order, or having taken any other steps, and there not continuing to be outstanding any statute, regulation or order of any Third Party, in each case which would or might reasonably be expected to (to an extent or in a manner which is material and adverse in the context of the Acquisition):
(i) require, prevent or delay the divestiture, or materially
alter the terms of any proposed divestiture by Upsher-Smith or any
other member of the Wider Upsher-Smith Group or by Proximagen or
any other member of the Wider Proximagen Group of all or any
portion of their respective businesses, assets or properties or
impose any limitation on the ability of any of them to conduct
their respective businesses (or any of them) or to own any of their
respective assets or properties or any part thereof;
(ii) require, prevent or delay the divestiture by any member of
the Wider Upsher-Smith Group of any shares or other securities in
Proximagen;
(iii) impose any limitation on, or result in a delay in, the
ability of any member of the Wider Upsher-Smith Group directly or
indirectly to acquire or to hold or to exercise effectively any
rights of ownership in respect of shares or loans or securities
convertible into shares or any other securities (or the equivalent)
in any member of the Wider Proximagen Group or the Wider
Upsher-Smith Group or to exercise voting or management control over
any such member;
(iv) otherwise materially adversely affect any or all of the
business, assets, liabilities, financial or trading position,
profits, operational performance or prospects of any member of the
Wider Upsher-Smith Group or of any member of the Wider Proximagen
Group;
(v) make the Acquisition or its implementation or the
acquisition or proposed acquisition by USL or any member of the
Wider Upsher-Smith Group of any shares or other securities in, or
control or management of Proximagen void, illegal, and/or
unenforceable under the laws of any jurisdiction, or otherwise,
directly or indirectly, restrain, restrict, prohibit, prevent,
delay or otherwise interfere with the implementation thereof, or
impose additional material adverse conditions or obligations with
respect thereto, or otherwise challenge, or interfere with the
Acquisition or its implementation;
(vi) require any member of the Wider Upsher-Smith Group or the
Wider Proximagen Group to acquire, or to offer to acquire, any
shares or other securities (or the equivalent) or interest in any
member of the Wider Proximagen Group or the Wider Upsher-Smith
Group owned by any third party;
(vii) impose any limitation on the ability of any member of the
Wider Upsher-Smith Group or the Wider Proximagen Group to conduct
or integrate or co-ordinate its business, or any part of it, with
the businesses or any part of the businesses of any other member of
the Wider Upsher-Smith Group or the Wider Proximagen Group; or
(viii) require any member of the Wider Proximagen Group to
relinquish, terminate or amend in any way any contract to which any
member of the Wider Proximagen Group is a party; or
(ix) result in any member of the Wider Proximagen Group ceasing
to be able to carry on business under any name under which it
presently does so,
and all applicable waiting and other time periods during which
any such Third Party could institute, implement or threaten any
action, proceeding, suit, investigation, enquiry or reference or
any other step under the laws of any jurisdiction in respect of the
Acquisition or the acquisition or proposed acquisition of any
Proximagen Shares having expired, lapsed or been terminated;
(E) all notifications, notices, filings or applications in
connection with the Acquisition or any aspect of the Acquisition or
its financing that are necessary having been made and all
authorisations, orders, grants, consents, clearances, licences,
confirmations, permissions and approvals which are necessary
(Authorisations), in any jurisdiction, for and in respect of the
Acquisition or any aspect of the Acquisition or its financing, or
the acquisition or proposed acquisition by any member of the Wider
Upsher-Smith Group of any shares or other securities in, or control
of, Proximagen by any member of the Wider Upsher-Smith Group having
been obtained in terms and in a form reasonably satisfactory to USL
from all appropriate Third Parties and persons or bodies with whom
any member of the Wider Proximagen Group has entered into
contractual arrangements, and all such Authorisations together with
all authorisations, orders, grants, consents, clearances, licences,
confirmations, permissions and approvals (Business Authorisations)
necessary or appropriate for any member the Wider Upsher-Smith
Group to carry on its business remaining in full force and effect
(where the absence of such Authorisations or Business
Authorisations would be material and adverse in the context of the
Acquisition) and all filings necessary for such purpose have been
made and there being no notice or intimation of any intention to
revoke or not to renew any of the same at the time at which the
Acquisition becomes otherwise unconditional and all necessary
statutory or regulatory obligations in any jurisdiction having been
complied with;
(F) since 30 November 2011 and except as Publicly Announced or
fairly disclosed in Disclosed Information, no member of the Wider
Proximagen Group having (to an extent or in a manner which is
material in the context of the Acquisition or would have a material
and adverse effect on the Wider Proximagen Group taken as a
whole):
(i) save as between Proximagen and wholly-owned subsidiaries of
Proximagen or for Proximagen Shares issues pursuant to the award of
Proximagen Shares under the Proximagen Option Schemes, issued,
agreed to issue, authorised or proposed the issue of additional
shares of any class, or of securities convertible into or
exchangeable for, or rights, warrants or options to subscribe for
or acquire, any such shares or convertible securities or redeemed,
purchased or repaid any of its own shares or other securities or
reduced or made any other change to any part of its share
capital;
(ii) other than to another member of the Proximagen Group,
recommended, declared, paid or made or proposed to recommend,
declare, pay or make any bonus, dividend or other distribution
whether payable in cash or otherwise;
(iii) save for transactions between members of the Proximagen
Group, merged or demerged with any body corporate or acquired or
disposed of or transferred, mortgaged or charged or created any
security interest over any assets or any right, title or interest
in any asset (including shares and trade investments) or authorised
or proposed or announced any intention to propose any merger,
demerger, acquisition, disposal, transfer, mortgage, charge or
security interest, in each case, other than in the ordinary course
of business;
(iv) save for transactions between members of the Proximagen
Group, made or authorised or proposed or announced an intention to
propose any change in its loan capital;
(v) issued, authorised or proposed the issue of any debentures
or (save in the ordinary course of business or for transactions
between members of the Proximagen Group) incurred or increased any
indebtedness or become subject to any liability (actual or
contingent);
(vi) implemented, or authorised, proposed or announced its
intention to implement, any reconstruction, amalgamation, scheme,
commitment or other transaction or arrangement otherwise than in
the ordinary course of business or in respect of the
Acquisition;
(vii) entered into or varied or authorised, proposed or
announced its intention to enter into or vary any contract,
transaction, arrangement or commitment (whether in respect of
capital expenditure or otherwise) which is of a long term, onerous
or unusual nature or magnitude or which is or could be materially
restrictive on the businesses of any member of the Wider Proximagen
Group or the Wider Upsher-Smith Group or which involves or could
involve an obligation of such a nature or magnitude or which is
other than in the ordinary course of business and which is material
in the context of the Wider Proximagen Group taken as a whole;
(viii) (other than in respect of a member which is dormant and
was solvent at the relevant time) taken any corporate action or had
any legal proceedings instituted or threatened against it or
petition presented or order made for its winding-up (voluntary or
otherwise), dissolution or reorganisation or for the appointment of
a receiver, administrative receiver, administrator, trustee or
similar officer of all or any of its assets or revenues or any
analogous proceedings in any jurisdiction or had any such person
appointed;
(ix) been unable to pay its debts as they fall due or having
stopped or suspended (or threatened to stop or suspend) payment of
its debts generally or ceased or threatened to cease carrying on
all or a substantial part of its business;
(x) entered into any contract, transaction or arrangement which
would be materially restrictive on the business of any member of
the Wider Proximagen Group or the Wider Upsher-Smith Group other
than to a nature and extent which is normal in the context of the
business concerned;
(xi) waived or compromised any material claim otherwise than in
the ordinary course of business;
(xii) entered into any material contract, commitment,
arrangement or agreement otherwise than in the ordinary course of
business or passed any resolution or made any offer (which remains
open for acceptance) with respect to or announced any intention to,
or to propose to, effect any of the transactions, matters or events
referred to in this condition;
(xiii) in respect of the Proximagen Group, made any alteration
to its memorandum or articles of association (in each case, other
than an alteration in connection with the Scheme);
(xiv) proposed, agreed to provide or modified the terms of any
employee share scheme, incentive scheme or other benefit relating
to the employment or termination of employment of any person
employed by the Wider Proximagen Group or entered into or changed
the terms of any contract with any director or senior
executive,
and, for the purposes of this condition, the term Proximagen
Group shall mean Proximagen and its wholly-owned subsidiaries;
(G) since 30 November 2011 and save as Publicly Announced or
fairly disclosed in Disclosed Information, or where not material in
the context of the Wider Proximagen Group taken as a whole:
(i) no material adverse change or deterioration having occurred
(or circumstances having arisen which would or might be expected to
result in any adverse change or deterioration) in the business,
assets, liabilities, financial or trading position or profits,
operational performance or prospects of any member of the Wider
Proximagen Group;
(ii) no litigation, arbitration proceedings, prosecution or
other legal proceedings to which any member of the Wider Proximagen
Group is or may become a party (whether as a plaintiff, defendant
or otherwise) and no investigation by any Third Party against or in
respect of any member of the Wider Proximagen Group having been
instituted, announced, implemented or threatened by or against or
remaining outstanding in respect of any member of the Wider
Proximagen Group;
(iii) no enquiry or investigation by, or complaint or reference
to, any Third Party having been threatened in writing, announced,
implemented or instituted by or against or remaining outstanding
against or in respect of any member of the Wider Proximagen
Group;
(iv) no contingent or other material liability in respect of any
member of the Wider Proximagen Group having arisen or become
apparent or increased that might reasonably be likely to adversely
affect any member of the Wider Proximagen Group that is material in
the context of the Wider Proximagen Group taken as a whole;
(v) no amendment or termination of any joint venture or
partnership to which any member of the Wider Proximagen Group is a
party having been agreed or permitted; and
(vi) no steps having been taken which are likely to result in
the withdrawal, cancellation, termination or modification of any
licence held by any member of the Wider Proximagen Group which is
necessary for the proper carrying on of its business,
in each case, to an extent or in a manner which is material in
the context of the Acquisition and would have a material and
adverse effect on the Wider Proximagen Group, taken as a whole;
(H) except as Publicly Announced or fairly disclosed in
Disclosed Information, USL not having discovered:
(i) that any financial, business or other information concerning
the Wider Proximagen Group as contained in the information publicly
disclosed at any time by or on behalf of any member of the Wider
Proximagen Group, is misleading or contains any misrepresentation
of fact or omits to state a fact necessary to make that information
not misleading;
(ii) that any member of the Wider Proximagen Group is subject to
any liability (actual or contingent) that has not been Publicly
Announced or fairly disclosed in Disclosed Information;
(iii) that any member of the Wider Proximagen Group,
partnership, company or other entity in which any member of the
Wider Proximagen Group has a significant economic interest and
which is not a subsidiary undertaking of Proximagen is subject to
any liability (contingent or otherwise) which is not disclosed in
the annual report and accounts of Proximagen for the year ended 30
November 2011; or
(iv) any information which affects the import of any information
disclosed in writing at any time by or on behalf of any member of
the Wider Proximagen Group,
in each case, to an extent or in a manner which is material in
the context of the Acquisition and would have a material and
adverse effect on the Wider Proximagen Group, taken as a whole;
and
(I) except as Publicly Announced or fairly disclosed in
Disclosed Information, USL not having discovered that:
(i) any past or present member of the Wider Proximagen Group has
failed to comply with any and/or all applicable legislation or
regulation, of any jurisdiction with regard to the disposal,
spillage, release, discharge, leak or emission of any waste or
hazardous substance or any substance likely to impair the
environment or harm human health or animal health or otherwise
relating to environmental matters, or that there has otherwise been
any such disposal, spillage, release, discharge, leak or emission
(whether or not the same constituted a non-compliance by any person
with any such legislation or regulations, and wherever the same may
have taken place) any of which disposal, spillage, release,
discharge, leak or emission would be likely to give rise to any
liability (actual or contingent) on the part of any member of the
Wider Proximagen Group;
(ii) there is, or is likely to be, for that or any other reason
whatsoever, any liability (actual or contingent) of any past or
present member of the Wider Proximagen Group to make good, repair,
reinstate or clean up any property or any controlled waters now or
previously owned, occupied, operated or made use of or controlled
by any such past or present member of the Wider Proximagen Group,
under any environmental legislation, regulation, notice, circular
or order of any Third Party in any jurisdiction;
(iii) any past or present member of the Wider Proximagen Group
has not complied with the OECD Convention on Combating Bribery of
Foreign Public Officials in International Business Transactions and
any laws implementing the same, the UK Bribery Act 2010 and the
U.S. Foreign Corrupt Practices Act of 1977; or
(iv) there is, or is likely to be expected to be, or there has been, any:
(a) claim brought against any member of the Wider Proximagen
Group by a person or class of persons in respect of;
(b) circumstances that exist whereby a person or class of
persons would be likely to have a claim; or
(c) liability (actual or contingent) of any member of the Wider
Proximagen Group as a result of or relating to,
any material, chemical, product or process of manufacture or
materials now or previously held, used, sold, manufactured, carried
out or under development or research by any past or present member
of the Wider Proximagen Group,
in each case, other than under paragraphs (i) and (ii), which is
material in the context of the Wider Proximagen Group, taken as a
whole.
For the purposes of these conditions the Wider Proximagen Group
means Proximagen and its subsidiary undertakings, associated
undertakings and any other undertaking in which Proximagen and/or
such undertakings (aggregating their interests) have a significant
interest and the Wider Upsher-Smith Group means Upsher-Smith and
its subsidiary undertakings, associated undertakings and any other
undertaking in which Upsher-Smith and/or such undertakings
(aggregating their interests) have a significant interest and for
these purposes subsidiary undertaking and undertaking have the
meanings given by the Companies Act 2006, associated undertaking
has the meaning given by paragraph 19 of Schedule 6 to the Large
and Medium-sized Companies and Groups (Accounts and Reports)
Regulations 2008 other than paragraph 19(1)(b) of Schedule 6 to
those Regulations which shall be excluded for this purpose, and
significant interest means a direct or indirect interest in ten per
cent. or more of the equity share capital (as defined in the
Companies Act 2006).
USL reserves the right to waive, in whole or in part, all or any
of conditions (A) to (I) above, except for condition (A).
If Upsher-Smith or USL is required by the Panel to make an offer
for Proximagen Shares under the provisions of Rule 9 of the City
Code, Upsher-Smith or USL may make such alterations to any of the
above conditions as are necessary to comply with the provisions of
that Rule.
Conditions (A) to (I) (inclusive, but excluding Condition
A(iii)) must be fulfilled, or be determined by USL to be or remain
satisfied or (if capable of waiver) be waived prior to the
commencement of the Court Hearing, failing which the Acquisition
will lapse and the Scheme will not proceed. USL shall be under no
obligation to waive (if capable of waiver), to determine to be or
remain satisfied or treat as fulfilled any of the Conditions (A) to
(I) (inclusive) at any time prior to the Long Stop Date,
notwithstanding that the other Conditions (or any of them) may at
an earlier date have been waived (if capable of waiver), satisfied
or fulfilled and that there are, at such earlier date, no
circumstances indicating that any such Condition may not be capable
of satisfaction or fulfilment.
The Acquisition will lapse and the Scheme will not proceed if,
prior to the date of the Court Meeting, the Acquisition, or any
matter arising from the Acquisition, is referred to the Competition
Commission in the United Kingdom.
USL reserves the right to elect (with the consent of the Panel)
to implement the Acquisition by way of a takeover offer (as defined
in section 974 of the Companies Act 2006) as it may determine in
its absolute discretion. In such event, such offer will be
implemented on the same terms, so far as applicable, as those which
would apply to the Scheme, subject to appropriate amendments to
reflect the change in method of effecting the Acquisition, but with
an acceptance condition which will be set by reference to shares
carrying 90 per cent. (or such lower percentage as Upsher-Smith may
decide or the Panel may require) in value of the Proximagen Shares
to which the Offer relates. Upsher-Smith has agreed that any such
Offer would remain open for acceptance for at least 60 days after
the Offer Document is published.
The availability of the Acquisition to persons not resident in
the United Kingdom or the United States may be affected by the laws
of the relevant jurisdictions. Persons who are not resident in the
United Kingdom or the United States should inform themselves about
and observe any applicable requirements. If the laws, rules or
regulation of any jurisdiction (including any state securities or
"blue sky" laws of any state of the United States, the District of
Columbia, Guam, Puerto Rico and the U.S. Virgin Islands) would
require any registration or qualification in connection with the
Acquisition as a consequence of the residence and/or principal
place of business of any Proximagen Shareholder, then such
Proximagen Shareholder may not be entitled to the benefit of the
CVRs.
The Scheme will be governed by English law and be subject to the
jurisdiction of the English courts, to the conditions set out above
and in the formal Scheme Document and related Forms of Proxy and
Form of Election. The Scheme will comply with the applicable rules
and regulations of the FSA and the London Stock Exchange and the
City Code.
Part B: Certain further terms of the Acquisition
Proximagen Shares which will be acquired under the Acquisition
will be acquired with full title guarantee, fully paid and free
from all liens, equities, charges, encumbrances, options, rights of
pre-emption and any other third party rights and interests of any
nature and together with all rights now or hereafter attaching or
accruing to them, including voting rights and the right to receive
and retain in full all dividends and other distributions (if any)
declared, made or paid on or after the date of this
announcement.
APPENDIX II
SOURCES OF INFORMATION AND BASES OF CALCULATION
In this announcement:
1. Unless otherwise stated:
-- financial information relating to the Upsher-Smith Group has
been extracted or derived (without any adjustment) from
Upsher-Smith's audited annual report and accounts for the year
ended 1 January 2012; and
-- financial information relating to the Proximagen Group has
been extracted or derived (without any adjustment) from the audited
annual report and accounts for Proximagen for the year ended 30
November 2011 and the unaudited interim accounts for Proximagen for
the six month period ended 31 May 2012.
2. The value of the Acquisition is calculated:
-- by reference to the price of 275 pence per Proximagen Share,
being the Closing Price on 12 June 2012, the last Business Day
prior to this announcement; and
-- on the basis of the fully diluted number of Proximagen Shares
in issue referred to in paragraph 4 below.
3. As at the close of business on 12 June 2012, being the last
Business Day prior to the date of this announcement, Proximagen had
in issue 63,119,601 Proximagen Shares. The International Securities
Identification Number for Proximagen Shares is GB00B06FMX57.
4. The fully diluted share capital of Proximagen (being
69,689,794 Proximagen Shares) is calculated on the basis of:
-- the number of issued Proximagen Shares referred to in paragraph 3 above; and
-- the maximum number of Proximagen Shares which could be issued
on or after the date of this announcement on the vesting of awards
under the Proximagen Option Schemes, amounting in aggregate to
6,570,193 Proximagen Shares.
5. Unless otherwise stated, all prices and closing prices for
Proximagen Shares are closing middle market quotations derived from
the AIM appendix to the Daily Official List (SEDOL).
6. The premia implied by the Offer Consideration have been
calculated with reference to a price of 275 pence per Proximagen
Share on 12 June 2012, being the last Business Day before this
announcement.
7. Where figures have been displayed in both GBP and $,
conversions have been based on a $/GBP exchange rate of 1.5545
(being the published exchange rate by Bloomberg at 4:00pm (London
time) on 12 June 2012 (being the last Business Day before the date
of this announcement)).
8. The enterprise value premium has been calculated:
-- on the basis of the fully diluted number of Proximagen Shares
in issue referred to in paragraph 4 above; and
-- Proximagen balance sheet cash and cash equivalents of GBP48 million as at 31 May 2012.
APPENDIX III
DETAILS OF IRREVOCABLE UNDERTAKINGS
Directors' Irrevocable Undertakings[1]
USL has received irrevocable commitments from each of the
members of the Board of Proximagen, as listed below, in respect of
their own beneficial holdings of Proximagen Shares and (to the
extent relevant) the beneficial holdings of each Board member's
spouse, civil partner, de factor partner, or similarly-related
person, representing in aggregate approximately 1.43 per cent. of
the existing issued ordinary share capital of Proximagen. These
commitments require each member of the Board of Proximagen to vote
or procure that the registered holder votes in favour of the
resolutions relating to the Acquisition at the Meetings (or, in the
event the Acquisition is implemented by means of the Offer, to
accept, or procure acceptance of, the Offer).
Name of Proximagen Number of Proximagen % of Proximagen
Director Shares issued share capital
Kenneth Mulvany 798,567 1.27%
Peter Allen 20,000 0.03%
Ann Jacqueline Hunter 6,305 0.01%
James Hunter 20,000 0.03%
Michael Ashton 56,384 0.09%
TOTAL 901,256 1.43%
These irrevocable commitments will continue to be binding in the
event that a higher competing offer is made for Proximagen.
These irrevocable commitments will cease to be binding on the
earliest to occur of the following events:
-- If the Acquisition is implemented by way of the Offer and the
Offer lapses or is withdrawn without becoming or being declared
unconditional in all respects;
-- If USL announces, with the consent of any relevant authority
(if required) and before the Scheme Document or Offer Document is
posted, that it does not intend to proceed with the Acquisition;
or
-- If the Scheme does not become effective by 14 December 2012
(or such later date as USL and Proximagen agree in writing and that
the Court approves).
Shareholder Irrevocable Undertakings
USL has received irrevocable commitments from the following
shareholders in Proximagen in respect of their beneficial holdings
of Proximagen Shares (or, in the case of Invesco Asset Management
Limited, the Proximagen Shares which it manages on a discretionary
basis for its clients and, in the case of Lansdowne Partners
Limited, as agent for Lansdowne funds) representing in aggregate
approximately 70.58 per cent. of the existing issued ordinary share
capital of Proximagen. These commitments are subject to certain
limitations and exceptions as described below.
These commitments require each such shareholder to vote or
procure that the registered holder votes in favour of the
resolutions relating to the Acquisition at the Meetings (or, in the
event the Acquisition is implemented by means of the Offer, to
accept, or procure acceptance of, the Offer).
Name of Proximagen Shareholder Number of Proximagen Approximate % of
Shares Proximagen issued
share capital
Invesco Asset Management
Limited 16,956,326 26.86%
Lansdowne Partners Limited 14,849,580 23.53%
H Lundbeck A/S 5,738,100 9.09%
IP Group plc 4,804,000 7.61%
Kings College London 2,204,324 3.49%
TOTAL 44,552,330 70.58%
King's College London
The irrevocable commitments given by King's College London will
continue to be binding in the event that a higher competing offer
is made for Proximagen. The irrevocable commitments given by King's
College London will cease to be binding on the earliest to occur of
the following events:
-- If the Acquisition is implemented by way of the Offer and the
Offer lapses or is withdrawn without becoming or being declared
unconditional in all respects;
-- If USL announces, with the consent of any relevant authority
(if required) and before the Scheme Document or Offer Document is
posted, that it does not intend to proceed with the Acquisition and
no new, revised or replacement Scheme or Offer is announced by USL
in accordance with the City Code at the same time or within 28 days
thereafter; or
-- If the Scheme does not become effective by 31 December 2012
(or such later date as the shareholder giving the commitment agrees
in writing).
Lansdowne Partners Limited
The irrevocable commitment given by Lansdowne Partners Limited
will cease to be binding on the earliest to occur of the following
events:
-- If the Acquisition is implemented by way of the Offer and the
Offer lapses or is withdrawn without becoming or being declared
unconditional in all respects;
-- If USL announces, with the consent of any relevant authority
(if required) and before the Scheme Document or Offer Document is
posted, that it does not intend to proceed with the Acquisition and
no new, revised or replacement Scheme or Offer is announced by USL
in accordance with the City Code at the same time or within 28 days
thereafter; or
-- If the Scheme does not become effective by 31 December 2012
(or such later date as the shareholder giving the commitment agrees
in writing).
-- If:
o a competing offer for all of the issued and to be issued
Proximagen Shares has been announced in accordance with the
requirements of the City Code that includes cash and/or cash
equivalent consideration equal to or exceeding 120 per cent. of the
value of the cash consideration per Proximagen Share available
under the terms of the Acquisition and which the shareholder giving
the commitment determines attributes an overall value to each
Proximagen Share that is more attractive than the overall value
attributable under the Acquisition having regard to the total
amount of the cash and non-cash elements of the Acquisition and the
competing offer;
o USL does not, within ten days of announcement of such
competing offer, announce a revised offer which the shareholder
determines values each Proximagen Share at a price equal to or
greater than the value of the consideration per Proximagen Share
under the relevant competing offer, having regard to the total
amount of the cash and non-cash elements of the revised offer and
such competing offer; and
o the shareholder giving the commitment notifies USL within
three days of the expiry of such ten day period that its
obligations under the irrevocable commitment have ceased to have
effect.
H. LundbeckA/S
The irrevocable commitment given by H Lundbeck A/S will cease to
be binding on the earliest to occur of the following events:
-- If the Scheme Document is not posted within the period permitted by the Panel;
-- If the Scheme lapses and USL does not switch to an Offer;
-- If the Acquisition is implemented by way of the Offer and the
Offer lapses or is withdrawn without becoming or being declared
unconditional in all respects;
-- If USL announces, with the consent of any relevant authority
(if required) and before the Scheme Document or Offer Document is
posted, that it does not intend to proceed with the Acquisition and
no new, revised or replacement Scheme or Offer is announced by USL
in accordance with the City Code at the same time or within 28 days
thereafter; or
-- If the Scheme does not become effective by 31 December 2012
(or such later date as the shareholder giving the commitment agrees
in writing).
-- If:
o a third party has announced a firm intention to make a
competing offer for all of the issued and to be issued Proximagen
Shares in accordance with the requirements of the City Code which
the shareholder giving the commitment reasonably determines values
each Proximagen Share at a price which equals or exceeds 110 per
cent. of the value of the consideration per Proximagen Share
available under the terms of the Acquisition, having regard to the
total amount, cash and non-cash elements of the Acquisition and
such competing offer; and
o USL does not, within ten days of announcement of such
competing offer, announce a revised offer which the shareholder
reasonably determines values each Proximagen Share at a price equal
to or greater than the value of the consideration per Proximagen
Share under the relevant competing offer, having regard to the
total amount, cash and non-cash elements of the revised offer and
such competing offer.
IP Group plc
The irrevocable commitment given by IP2IPO Limited and IP2IPO
Management VI Limited will cease to be binding on the earliest to
occur of the following events:
-- If the Scheme Document is not posted within the period permitted by the Panel;
-- If the Scheme lapses and USL does not switch to an Offer;
-- If the Acquisition is implemented by way of the Offer and the
Offer lapses or is withdrawn without becoming or being declared
unconditional in all respects;
-- If USL announces, with the consent of any relevant authority
(if required) and before the Scheme Document or Offer Document is
posted, that it does not intend to proceed with the
Acquisition;
-- If the Scheme does not become effective by 31 December 2012
(or such later date as the shareholder giving the commitment agrees
in writing); or
-- If:
o a competing offer for all of the issued and to be issued
Proximagen Shares has been announced in accordance with the
requirements of the City Code that includes cash consideration
equal to or exceeding 120 per cent. of the value of the cash
consideration (excluding the consideration attributed to the CVRs)
per Proximagen Share available under the terms of the Acquisition
and which the shareholder giving the commitment determines is more
attractive than the overall value attributable under the
Acquisition having regard to the total amount of the cash and
non-cash elements of the Acquisition and the competing offer;
o USL does not, within ten days of announcement of such
competing offer, announce a revised offer which the shareholder
determines values each Proximagen Share equal to or greater than
the value of the consideration per Proximagen Share under the
relevant competing offer, having regard to the total amount of the
cash and non-cash elements of the revised offer and such competing
offer (with the shareholder having absolute discretion as to what
value (if any) to ascribe such non-cash elements); and
o the shareholder giving the commitment notifies USL within ten
days of the expiry of such ten day period that its obligations
under the irrevocable commitment have ceased to have effect.
Invesco Asset Management Limited
The irrevocable commitment given by Invesco Asset Management
Limited will cease to be binding if, prior to the Effective Date or
the Offer becoming unconditional as to acceptances, any third party
announces a firm intention to make a general offer for all shares
in Proximagen which, in Invesco's reasonable opinion, represents an
improvement to the terms of the Acquisition in its entirety, having
regard to the total amount of the cash and non-cash elements of the
terms of the Acquisition when compared with the third party's
offer.
Invesco Asset Management Limited manages client funds on a
discretionary basis. If an underlying client has terminated
Invesco's professional relationship in circumstances where such
client is not bound to honour the pre-existing obligations or
undertaking in respect of the Proximagen Shares, then the
irrevocable commitment may cease to be binding in respect of the
shares transferred.
APPENDIX IV
Illustrative CVR Payment Calculation
The illustrations and examples contained in this Appendix IV are
being provided for illustrative purposes only and should not be
regarded as any guarantee or indication of likely performance.
Payments under the CVR are calculated on the basis of the
following formula:
CVRs entitlement = 57.5% of Net Revenues derived from the VAP-1
CVR Program and 39.5% of Net Revenues from the PRX00933 CVR Program
(the CVR Net Revenues)
For these purposes:
Net Revenues include revenues received from the
commercialisation of the relevant CVR Program (e.g. licensing fees,
milestone payments, royalties and other similar payments) less the
Enlarged Group's Development Costs in respect of that CVR
Program.
Below are illustrative computations of the CVR Net Revenues in
accordance with the formula described above assuming the total
number of CVRs is 59,674,094 and an exchange rate as set out in
paragraph 7 of Appendix II:
Example 1
Assumptions:
The VAP-1 program has Development Costs totalling $20 million.
This program is out-licensed and Upsher-Smith receives
out-licensing revenue of $200 million. No revenue is received in
respect of the PRX00933 program.
No previous payments have been made on the CVRs.
Computation of CVR Net Revenues:
Step 1 - The $20 million Development Costs are subtracted from
the $200 million revenues received, resulting in $180 million.
Step 2 - $180 million is multiplied by 57.5% producing (for the
purposes of this example) CVR Net Revenues in respect of the VAP-1
program of $103.5 million (GBP66.6 million).
Step 3 - Proximagen shareholders receive approximately 112 pence
per CVR.
Example 2
Assumptions:
The PRX00933 program has Development Costs totalling $20
million. This program is out-licensed and Upsher-Smith receives
out-licensing revenue of $200 million. No revenue is received in
respect of the VAP-1 program.
No previous payments have been made on the CVRs.
Computation of CVR Net Revenues
Step 1 - The $20 million Development Costs for the PRX00933
program are subtracted from the $200 million revenues received,
resulting in $180 million.
Step 2 - $180 million is multiplied by 39.5% producing (for the
purposes of this example) CVR Net Revenues in respect of the
PRX00933 program of $71.1 million (GBP45.7 million).
Step 3 - Proximagen shareholders receive approximately 77 pence
per CVR.
Example 3
Assumptions:
The VAP-1 program has Development Costs totalling $20 million.
This program is out-licensed and Upsher-Smith receives
out-licensing revenue of $210 million.
The PRX00933 program has Development Costs totalling $20
million. This program is out-licensed and Upsher-Smith receives
out-licensing revenue of $210 million.
No previous payments have been made on the CVRs.
Computation of CVR Net Revenues
Step 1 - The $20 million Development Costs for the VAP-1 program
are subtracted from the $210 million revenues received, resulting
in $190 million.
Step 2 - $190 million is multiplied by 57.5% producing (for the
purposes of this example) CVR Net Revenues in respect of the VAP-1
program of $109.3 million (GBP70.3 million).
The $20 million Development Costs for the PRX00933 program is
subtracted from the $210 million revenues received, resulting in
$190 million.
$190 million is multiplied by 39.5% producing (for the purposes
of this example) CVR Net Revenues in respect of the PRX00933
program of $75.1 million (GBP48.3 million).
The total CVR Net Revenues under this example would be GBP118.6
million.
Step 3 - Although this represents approximately 199 pence per
CVR, as Proximagen Shareholders are only entitled to receive an
amount up to the CVR Cap, the Proximagen Shareholders receive
(under this example) 192 pence per CVR.
Actual payments will depend entirely upon Net Revenues generated
by the CVR Programs and are capped at a maximum level. The minimum
payment on any payment date, or over the entire period, could be
zero. There will be no interest conferred by a CVR on the economic
activities of the combined business generally.
The Panel has determined that an estimate of the value of a CVR
in accordance with Rule 24.11 will not be included in the Scheme
Document.
APPENDIX V
DEFINITIONS
Acquisition the proposed acquisition of the
entire issued and to be issued share
capital of Proximagen by USL (other
than the Excluded Shares), to be
effected by the Scheme (or by the
Offer under certain circumstances
described in this announcement)
AIM AIM, being a market operated by
the London Stock Exchange
AIM Rules the rules published by the London
Stock Exchange entitled AIM Rules
for Companies in force from time
to time
Board the board of directors of the relevant
company
Business Day a day, (other than a Saturday, Sunday,
public or bank holiday) on which
banks are generally open for business
in London
Capital Reduction the proposed reduction of share
capital of Proximagen pursuant to
the Scheme
City Code the City Code on Takeovers and Mergers
Class I CVRs the Class I contingent value rights
to be issued by USL
Class I CVR Holder a holder of a Class I CVR
Class II CVRs the Class II contingent value rights
to be issued by USL
Class II CVR Holder a holder of a Class II CVR
Closing Price the closing middle market quotation
of a share derived from (in respect
of Proximagen Shares) the AIM appendix
to the Daily Official List for that
day
Conditions the conditions of the Acquisition
set out in Appendix I to this announcement
Confidentiality Agreement the confidentiality agreement dated
22 May 2012 between Upsher-Smith
and Proximagen
Court the High Court of Justice in England
and Wales
Court Hearing the hearing, following the Meetings,
by the Court of the application
to sanction the Scheme
Court Meeting the meeting of the Proximagen Shareholders
to be convened by order of the Court
pursuant to Part 26 of the Companies
Act 2006 for the purpose of considering
and, if thought fit, approving the
Scheme (with or without amendment)
and any adjournment thereof
Credit Agreement has the meaning given in paragraph
11 of this announcement
CVRs the Class I CVRs and the Class II
CVRs
CVR Cap has the meaning given in paragraph
3 of this announcement
CVR Deed Poll the deed poll constituting the CVRs
CVR Holder a holder of a CVR
CVR Net Revenues has the meaning given in paragraph
3 of this announcement
CVR Programs has the meaning given in paragraph
3 of this announcement
CVR Term has the meaning given in paragraph
3 of this announcement
Daily Official List the Daily Official List published
by the London Stock Exchange
Development Costs development costs of the Enlarged
Group that are attributable to a
CVR Program
Disclosed Information any information which has been (i)
fairly disclosed by or on behalf
of Proximagen or its advisers to
Upsher-Smith or its advisers in
connection with or in contemplation
of (a) the existing co-development
and partnering arrangements between
Proximagen and Upsher-Smith and
(b) the Acquisition prior to the
date of this announcement, whether
by electronic means, physical form
or orally, (ii) disclosed in Proximagen's
report and accounts for the year
ended 30 November 2011 or its interim
accounts for the 6 month period
ended 31 May 2012, or (iii) disclosed
in this announcement
Effective Date the date on which the Scheme becomes
effective in accordance with its
terms
EMI Plan the Proximagen Neuroscience plc
Enterprise Management Incentive
Share Option Plan 2005 (as amended
on 14 October 2005)
Enlarged Group following completion of the Acquisition,
the combined Upsher-Smith Group
and Proximagen Group
Excluded Shares any Proximagen Shares legally or
beneficially held by Upsher-Smith
or any of its Subsidiaries or subsidiary
undertakings
Form of Election a form of election to elect for
either the Class I CVR or Class
II CVR
Forms of Proxy the forms of proxy for use at the
Court Meeting and the Proximagen
General Meeting which will accompany
the Scheme Document
FSA the Financial Services Authority
J.P. Morgan Cazenove J.P. Morgan Limited which conducts
its UK investment banking activities
as J.P. Morgan Cazenove
LIBOR London Inter Bank Offer Rate
Listing Rules the rules and regulations made by
the FSA in its capacity as the UK
Listing Authority under the Financial
Services and Markets Act 2000, and
contained in the UK Listing Authority's
publication of the same name
Loan Notes the loan notes to be issued by USL
at the election of Class I CVR Holders
pursuant to the terms of the Class
I CVRs
London Stock Exchange London Stock Exchange plc
Long Stop Date 31 December 2012, or such later
date as USL and Proximagen may agree
and the Court (if required) may
allow
Meetings the Court Meeting and the Proximagen
General Meeting
Net Revenues has the meaning given in paragraph
3 of this announcement
New Proximagen Shares the new Proximagen Shares to be
issued to USL credited as fully
paid in accordance with the Scheme
Offer should the Acquisition be implemented
by way of a takeover offer, the
takeover offer to be made by or
on behalf of USL to acquire the
entire issued and to be issued share
capital of Proximagen and, where
the context admits, any subsequent
revision, variation, extension or
renewal of such offer
Offer Consideration the consideration payable in connection
with the Acquisition
Offer Document should the Acquisition be implemented
by means of the Offer, the document
to be sent to Proximagen Shareholders
which will contain, inter alia,
the terms and conditions of the
Offer
Opening Position Disclosure has the same meaning as in Rule
8 of the City Code
Overseas Proximagen Shareholders Scheme Shareholders who are resident
in, ordinarily resident in, or citizens
of, jurisdictions outside the United
Kingdom or the United States
Panel the Panel on Takeovers and Mergers
Phase I safety screening studies that are
typically performed in healthy subjects
Phase II preliminary proof of concept studies
performed in patients and in some
cases phase II trials may be designed
as pivotal studies
Phase III pivotal safety and efficacy studies
performed in patients
Proximagen Proximagen Group plc, incorporated
in England and Wales with registered
number 05333020
Proximagen General Meeting the general meeting of Proximagen
Shareholders to be convened to consider
and if thought fit pass, inter alia,
a special resolution in relation
to the Acquisition
Proximagen Group Proximagen and its Subsidiary and
associated undertakings
Proximagen Option Schemes the EMI Plan and the Unapproved
Plan
Proximagen Shareholders the holders of Proximagen Shares
Proximagen Shares the ordinary shares of 1 pence each
in the capital of Proximagen
Publicly Announced announced publicly and delivered
by or on behalf of Proximagen through
a Regulatory Information Service
prior to the date of this announcement
Reduction Court Order the act of Court confirming the
Capital Reduction
Registrar of Companies the Registrar of Companies in England
and Wales
Regulatory Information any of the services set out in Appendix
Service II to the Listing Rules
Restricted Jurisdiction any jurisdiction where local laws
or regulations may result in a significant
risk of civil, regulatory or criminal
exposure if information concerning
the Acquisition is sent or made
available to Proximagen Shareholders
in that jurisdiction
Scheme the proposed scheme of arrangement
under Part 26 of the Companies Act
2006 between Proximagen and Proximagen
Shareholders to implement the Acquisition
Scheme Court Order the act of Court sanctioning the
Scheme
Scheme Document the document to be dispatched to
Proximagen Shareholders in respect
of the Scheme
Scheme Record Time 6.00 p.m. on the last Business Day
before the date of the Court hearing
to confirm the Capital Reduction
Scheme Shareholder holders of Scheme Shares
Scheme Shares 1. the Proximagen Shares in issue
at the date of the Scheme Document;
2. any Proximagen Shares issued
after the date of the Scheme Document
and prior to the Voting Record Time;
and
3. any Proximagen Shares issued
at or after the Voting Record Time
and prior to the Scheme Record Time
in respect of which the original
or any subsequent holder thereof
is bound by the Scheme, or shall
by such time have agreed in writing
to be bound by the Scheme,
other than the Excluded Shares
SEC the Securities and Exchange Commission
Statement of Capital the statement of capital in relation
to the Capital Reduction required
to be sent to the Registrar of Companies
in accordance with section 649 of
the Companies Act 2006
Subsidiary has the meaning given in section
1159 of the Companies Act 2006
UK or United Kingdom the United Kingdom of Great Britain
and Northern Ireland
UK Listing Authority the FSA as the competent authority
for listing in the United Kingdom
Upsher-Smith Upsher-Smith Laboratories, Inc.,
a Minnesota corporation having its
headquarters at 6701 Evenstad Drive,
Maple Grove, MN 55369, USA
Upsher-Smith Group Upsher-Smith and its Subsidiary
and associated undertakings
Unapproved Plan the Proximagen Group plc Unapproved
Share Option Plan (as amended on
1 June 2010)
US or United States the United States of America, its
territories and possessions, any
state of the United States of America
and the District of Columbia
US Exchange Act United States Security Exchange
Act of 1934, as amended
USL USL Pharma International UK Limited,
a company incorporated in England
and Wales with registered number
8098631 (or, if Upsher-Smith elects,
a nominee or wholly-owned subsidiary
of Upsher-Smith notified in writing
to Proximagen prior to posting of
the Scheme Document (or, if applicable,
the Offer Document)
US Persons has the meaning set out in the US
Securities Act
US Securities Act United States Securities Act of
1933, as amended
Voting Record Time the time and date specified in the
Scheme Document by reference to
which entitlement to vote on the
Scheme will be determined, expected
to be 6.00 p.m. on the day which
is two Business Days prior to the
date of the Court Meeting or any
adjournment thereof (as the case
may be)
WG Partners Charles Stanley & Co Limited, trading
under the name of WG Partners, of
25 Luke Street, London EC2A 4AR
$ the lawful currency for the time
being of the United States of America
GBP the lawful currency for the time
being of the United Kingdom
[1] The undertakings and the numbers referred to in this table
refer only to those shares which the relevant director is
beneficially entitled to and any share such director is otherwise
able to control the exercise of in terms of the rights attaching to
such share, including the ability to procure the transfer of such
share. These undertakings and the numbers referred to in this table
exclude any Proximagen Shares that may be issued or allotted to the
Proximagen Directors in future pursuant to any award under the
Proximagen Option Schemes.
This information is provided by RNS
The company news service from the London Stock Exchange
END
OFFFJMTTMBIBMIT
Proximagen Neuroscience (LSE:PRX)
Historical Stock Chart
From Apr 2024 to May 2024
Proximagen Neuroscience (LSE:PRX)
Historical Stock Chart
From May 2023 to May 2024