20th May 2014 16:08
LONDON (Alliance News) - Microgen PLC Tuesday said it remains interested in making an offer for Elektron Technology PLC in whole or in part, even though previous proposals to invest in the business have been rejected.
Under takeover rules, Microgen must make clear whether or not it wants to make an offer and has until June 17 to do so.
Aside from a potential offer for all of Elektron's share capital, Microgen said possibilities include a acquiring just the instrumentation, monitoring and control (IMC) business of Elektron, or making an equity investment while Elektron remains AIM listed.
On May 13, Elektron said it was still in discussions over its possible sale, while other options were also being considered. The news came after the company announced on April 7 that it was considering a fundraising or possible sale of the company, amongst other options, such as a fundraising or sale of non-core assets.
Microgen said that it had made contact with Elektron prior to its April 7 announcement, to ask whether it was open to discussions.
According to Microgen, Elekron's chairman responded with a request for clarification, adding that he and a major shareholder held about 26% of the company's share capital, while Elektron's employee benefit trust holds a further 13%.
According to Microgen, Elektron signalled that it would only consider an offer for the whole of the company.
Microgen said several attempts were made to get clarification, but Elektron refused to provide due diligence information unless Microgen signed to "onerous" and "unacceptable" non-disclosure terms.
The Microgen proposal was that it would make a potential equity investment of between GBP12.0 million and GBP18.0 million, with Elektron remaining listed on AIM. The investment would have been made through instruments convertible into shares.
According to Microgen, Elektron rejected the proposal and said it would only consider proposals for its entire share capital.
Elektron eventually dropped the non-disclosure demands, subject to certain conditions related to UK takeover rules.
"Microgen remains interested in exploring various options with the board of Elektron and its advisers, including the possibility of making an offer for the entire issued share capital of Elektron or providing a funding solution to Elektron or evaluating the acquisition of the IMC business," Microgen said in a statement.
Microgen shares closed down 1.5% at 121.60 pence, while Elektron shares closed down 2.7% at 4.50p.
By Samuel Agini; [email protected]; @samuelagini
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