TIDMTAIH
RNS Number : 1474W
Taihua Plc
06 February 2017
6 February 2017
Taihua plc
("Taihua" or the "Company")
Proposed Tender Offer
Taihua, the China-based pharmaceutical company specialising in
the cultivation of Traditional Chinese Medicine ("TCM") raw
materials, manufacture of TCM and certain Active Pharmaceutical
Ingredients, is pleased to announce the terms of a proposed Tender
Offer.
Under the Tender Offer, each Eligible Shareholder is entitled to
have up to approximately 22.536802 per cent of his or her
shareholding purchased at the Tender Price (3.28 pence per Share)
with the potential to tender a greater number of Shares depending
on the number of Shares tendered by other Shareholders. The Tender
Price represents a premium of 4.96 per cent to the closing
mid-market price of 3.125 pence per Share on 3 February 2017, being
the last practicable date prior to the publication of the Circular.
The Tender Offer is being made available to all Shareholders who
are on the Register at the close of business on 20 February 2017,
with the exception of holders in certain overseas
jurisdictions.
The Company has the authority granted by Shareholders to
purchase up to 8,173,733 Ordinary Shares on 12 August 2016. A
circular which sets out the full details of the Tender Offer is
expected to be posted to Shareholders today (the "Circular"). The
Circular will also be available on the Company's website
(http://www.taihuaplc.com).
The Tender Offer is being made by Daniel Stewart & Company
plc, the Company's corporate broker, as principal on the basis that
all Shares that it buys under the Tender Offer will be purchased
from it by the Company.
Further details of the Tender Offer are set out below.
Capitalised terms used, but not defined in this announcement
shall have the same meaning as set out in the Circular.
EXPECTED TIMETABLE
Announcement of the Tender Offer and 6 February 2017
date of this Circular
Tender Offer open 6 February 2017
Closing Date -- latest time and date 1.00 p.m. on 20 February
for receipt of Tender Forms and settlement 2017
of TTE Instruction(s)
Record Date for the Tender Offer close of business on 20
February 2017
Result of Tender Offer announced 22 February 2017
Completion of purchase of Shares under 22 February 2017
the Tender Offer
Despatch of cheques for Tender Offer 28 February 2017
consideration in respect of certificated
Shares sold under the Tender Offer
and any balance certificates in respect
of any unsold certificated Shares
CREST accounts credited with Tender 28 February 2017
Offer consideration and any unsold
uncertificated Shares
Enquiries:
Nicholas Lyth, Taihua plc 0776 990 6686
Katy Mitchell, WH Ireland Limited +44 161 832 2174
Further details of the Tender Offer
Introduction
The Tender Offer is being made available to all Shareholders who
are on the Register at the close of business on 20 February 2017,
with the exception of holders in certain overseas jurisdictions.
Shareholders can decide whether they want to tender some or all of
their Shares at a price of 3.28 pence per Share, representing a
premium of 4.96% per cent to the closing mid-market price of 3.125
pence per Share on 3 February 2017, being the last practicable date
prior to the publication of the Circular.
The Tender Offer is being made by Daniel Stewart, the Company's
corporate broker, as principal on the basis that all Shares that it
buys under the Tender Offer will be purchased from it by the
Company. The Company has the authority from Shareholders to
purchase the Shares granted by a resolution of the shareholders
dated 12 August 2016. The Board is making no recommendation to
Shareholders in relation to participation in the Tender Offer.
However, Shareholders should note that all of the Directors who
hold Shares except Nicholas Lyth and Mr Tao Ji (the Company's
largest shareholder), have agreed to waive their rights to
participate in the Tender Offer in order to ensure that their
percentage holding in the Company's issued share capital is to a
material extent maintained following the Tender Offer.
Nicholas Lyth, the non-executive chairman of the Company, has
expressed to the Board that he intends to tender some or all of his
Shares at the Tender Price.
Background to the Tender Offer
Open Offer
The Company announced on 16 September 2016 the success of the
Open Offer and the subsequent issue and allotment of 22,911,312
Ordinary Shares at an issue price of 2.63 pence raising
GBP602,567.51.
As explained in the Open Offer Circular, the reason for the Open
Offer was to enable the Company to raise funds in order to conduct
a share buyback programme. The Company took this action following
requests made by shareholders to the Directors.
Use of Tender Offer
Following the successful Open Offer, the Directors commenced
discussions with the Company's advisers in relation to the best
structure to execute the proposed share buyback.
As Shareholders will know, the recent trading volume in Shares
has been very low. If the Company purchases back any significant
number of its Shares by way of market purchases then it would be
necessary for such buyback to follow the trading volume limit as
set by the Market Abuse Regulations. Pursuant to the Market Abuse
Regulations, an issuer must not purchase on any trading day more
than 25% of the average daily volume of its shares traded over a
period of reference.
Given the recent levels of low liquidity, it may take much
longer than expected for the Company to complete the share buyback
by way of market purchases if it fully complies with the aforesaid
trading volume limit as set by the Market Abuse Regulation.
The Directors therefore believe that the Tender Offer is the
most appropriate method by which the Company can offer Shareholders
an opportunity to reduce their holdings of Shares.
The Tender Offer
The Tender Offer is being made by Daniel Stewart to all
Shareholders (other than certain Overseas Shareholders). Full
details of the Tender Offer, including the terms and conditions on
which it is being made, are set out in Part III of the Circular
and, in relation to Shareholders holding Shares in a certificated
form, on the Tender Form to be sent to Shareholders who hold their
Shares in certificated form.
The Tender Offer is conditional on the satisfaction of the
Conditions specified in Part III of the Circular.
The Tender Offer involves the following:
-- The Tender Offer is being made to Shareholders (other than certain Overseas Shareholders) by Daniel Stewart for
the purchase of up to 8,173,733 Shares. Under the Tender Offer, each Shareholder is entitled to have up to
approximately 22.536802 cent of his shareholding (having taken into account of the waiver by certain Directors
and major Shareholders as set out below) purchased by Daniel Stewart at the Tender Price together with
potentially further purchases depending on the of Shares tendered by other Shareholders.
-- The Offer is being made at a premium of 4.96 cent to the closing mid-market price on 3 February 2017.
-- Shareholders (other than certain Overseas Shareholders) will be able to decide to tender none, some or all of
their Shares within the limits the Offer.
-- Tenders in excess of a Shareholders' Basic Entitlement will only be accepted to the extent that other
Shareholders tender less than their Basic Entitlement or do not tender any Shares.
-- The Form to be completed by Shareholders who hold their Shares in certificated form contains a box to enable
those Shareholders who wish to tender their Basic Entitlement to do so (Box 2A). If you hold Shares in
certificated form and tick this box, the Receiving Agent will calculate Basic Entitlement on the Record Date. If
wish to tender a different number of Shares to your Basic Entitlement, insert such of Shares in the alternate box
provided ont he Form (Box2B).
-- Shareholders who hold their Shares in uncertificated form (i.e. in who wish to tender their Basic Entitlement
should send a instruction through CREST to the account set out in paragraph3.3.1of Partofthe Circular.The
Receiving Agent will calculate Basic Entitlement on the Date and return any excess Shares. wish tender a
different number of Shares to your Basic Entitlement, should send a Instruction through CREST to the same member
account specifying such of Shares that wish totender.
-- If the total number of Shares validly tendered by all Shareholders equates to a number greater than
8,173,733Shares,tenderswillbeacceptedinthesetout
-- all Shares validly tendered by any Shareholder up to their Basic Entitlement will be accepted in full; and
-- all Shares validly tendered by Shareholders in excess of their Basic Entitlements will be satisfied
pro-rated to the Basic Entitlement so far as possible taking into account fractions and liquidity at the
discretion of the Board. The number of Shares to be purchased in the Tender Offer will not, in any event,
exceed 8,173,733 Shares.
-- All successfully tendered Shares purchased by Daniel Stewart will be repurchased from Daniel Stewart by the
Company and will be immediately cancelled and will not rank any future dividends.
-- Any rights of Shareholders who choose to tender their Shares will be unaffected.
Taxation
Shareholders who sell Shares pursuant to the Tender Offer
should, subject to the potential application of Chapter 1 of Part
13 ITA 2007 (in respect of individual Shareholders) and Part 15 of
CTA 2010 (in respect of corporate Shareholders), be treated as
having sold their Shares in the normal way. Shareholders may,
depending on their individual circumstances, incur a liability to
taxation on capital gains. UK individual and corporate Shareholders
should be aware that HMRC may seek to treat part or the whole of
the disposal proceeds of their Shares as income under Chapter 1 of
Part 13 ITA 2007 and Part 15 of CTA 2010 respectively. Further
information on the UK taxation consequences of the Tender Offer is
set out in Part IV of the Circular.
Waiver by Certain Directors and Major Shareholders
The following Directors who are the Shareholders have agreed to
waive their rights to participate in the Tender Offer: (1) Mingjian
Yin; (2) Yunwu Liu; and (3) Chun Chai.
Tao Ji, the Company's largest Shareholder, also agreed to waive
his rights to participate in the Tender Offer.
Overseas Shareholders
Shareholders with registered or mailing addresses outside the
UK, or who are citizens or nationals of, or resident in, a
jurisdiction other than the UK, should read paragraph 9 of Part III
of the Circular and the relevant provisions of the Tender Form. It
is the responsibility of all Overseas Shareholders to satisfy
themselves as to the observance of any legal requirements in their
jurisdiction, including, without limitation, any relevant
requirements in relation to the ability of such holders to complete
and return a Tender Form.
Repurchase Agreement
Under the terms of the Repurchase Agreement, the Company will
acquire, through an on-market purchase, all of the Exit Shares at
an aggregate price equal to the amount paid by Daniel Stewart for
the Exit Shares. Further details of the Repurchase Agreement are
set out in paragraph 2 of Part V of the Circular.
The Company will also be liable to pay Daniel Stewart's fees,
costs and expenses under the terms of Daniel Stewart's engagement
letter by the Company in connection with the Tender Offer.
Action to be taken
The procedure for tendering your Shares depends on whether your
Shares are held in certificated form or uncertificated form and is
summarised below.
a. Shares held certificated form
Shareholders who hold Shares in certificated form and who wish
to tender any or all of their existing holding of Shares should
complete the Tender Form in accordance with the instructions
printed thereon and in Part III of the Circular and return it by
post or by hand (during normal business hours only) to the
Receiving Agent, Capita Asset Services, Corporate Actions, The
Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU. A pre-paid
envelope is enclosed for this purpose for holders in the UK only.
Shareholders who hold their Shares in certificated form should also
return their share certificate(s) and/or other document(s) of title
in respect of the Shares tendered. Tender Forms and share
certificate(s) and/or other document(s) of title must be received
as soon as possible but in any event by no later than 1.00 p.m. on
20 February 2017.
b. Shares held uncertificated form
Shareholders who hold their Shares in uncertificated form (i.e.
in CREST) and who wish to tender any or all of their Shares should
tender electronically through CREST so that the TTE instruction
settles by no later than 1.00 p.m. on 20 February 2017. Further
details of the procedures for tendering and settlement are set out
in Part III of the Circular.
Recommendation
The Directors can make no recommendations to Shareholders in
relation to participation in the Tender Offer. Whether or not
Shareholders decide to tender all or any of their Shares will
depend on, among other things, their view of the Company's
prospects and their own individual circumstances, including their
tax position.
All of the Directors who hold Shares except Nicholas Lyth have
agreed to waive their rights to participate in the Tender Offer in
order to ensure that their percentage holding in the Company's
issued share capital is to a material extent maintained following
the Tender Offer.
Nicholas Lyth, the non-executive chairman of the Company, has
expressed his intention to tender some or all of his Shares at the
Tender Price.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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