Acquisition by Olympus

19th Nov 2007 07:02

Gyrus Group PLC19 November 2007 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO THE SAME WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION 19 November 2007 For immediate release RECOMMENDED CASH ACQUISITION OF GYRUS GROUP PLC ("GYRUS") BY OLYMPUS UK ACQUISITIONS LIMITED ("OLYMPUS UK ACQUISITIONS"), a wholly-owned subsidiary of OLYMPUS CORPORATION ("OLYMPUS") SUMMARY • The Boards of Olympus and Gyrus are pleased to announce today that theyhave reached agreement on the terms of a recommended cash acquisition by Olympus(through its wholly-owned subsidiary Olympus UK Acquisitions) of the entireissued and to be issued share capital of Gyrus, to be effected by way of ascheme of arrangement under section 425 of the Companies Act. • Under the terms of the Acquisition, which will be subject to theConditions and further terms set out below and in Appendix I, and to the furtherterms to be set out in the Scheme Document, Gyrus Shareholders will be entitledto receive 630 pence in cash for each Gyrus Share held. The terms of theAcquisition value the existing issued share capital of Gyrus at approximately£935 million and imply an enterprise value for Gyrus of approximately £1,026million. • The consideration of 630 pence in cash for each Gyrus Share representsa premium of approximately: - 58 per cent. to the Closing Price of 400 pence per Gyrus Share on 16November 2007, being the last Business Day before this announcement; and - 43 per cent. to the average Closing Price for the period of six monthsended 16 November 2007, being the last Business Day before this announcement, ofapproximately 440 pence per Gyrus Share. • The Acquisition will be conditional upon the satisfaction or waiver ofthe Conditions set out in Appendix I, including the Regulatory Conditions. • It is intended that the Acquisition will be made by Olympus UKAcquisitions Limited and is proposed to be implemented by way of a scheme ofarrangement under section 425 of the Companies Act. The Scheme will be put toGyrus Shareholders at the Court Meeting and at the Extraordinary GeneralMeeting, which will be convened in due course. It is expected that the SchemeDocument will be posted to Gyrus Shareholders on or around 17 December 2007.Subject to the satisfaction of the Conditions, it is expected that the Schemewill become effective in the first half of 2008. • Olympus UK Acquisitions is a newly incorporated wholly-owned subsidiaryof Olympus, formed for the purpose of making the Acquisition. • Olympus and Gyrus believe that the Acquisition has a clear andcompelling strategic rationale for both Olympus and Gyrus: - merging of highly complementary capabilities to create a true "see andtreat" provider; - well positioned to benefit from the continuing shift towards minimallyinvasive surgical procedures; - significant benefits for medical professionals and patients throughoutthe world; - enhanced geographical footprint; - attractive financial profile; and - significant potential synergies. • The Directors of Gyrus, who have been so advised by Bear Stearns andMorgan Stanley, consider the terms of the Acquisition to be fair and reasonable.In providing their advice to the Directors of Gyrus, Bear Stearns and MorganStanley have taken into account the commercial assessments of Gyrus's Directors. • The Directors of Gyrus intend unanimously to recommend to GyrusShareholders to vote in favour of the resolutions to be proposed at the CourtMeeting and the Extraordinary General Meeting (or, in the event that theAcquisition is implemented by way of a takeover offer, to accept or procureacceptance of such Offer), as they have undertaken to do in respect of their ownbeneficial holdings of 650,071 Gyrus Shares representing (as at the date of thisannouncement), in aggregate, approximately 0.4 per cent. of the Gyrus Sharescurrently in issue. Commenting on the Acquisition, Brian Steer, Chairman of Gyrus, said: "This highly attractive offer presents an outstanding opportunity for ourstakeholders with the certainty of cash at a significant premium for ourinvestors. Gyrus has grown rapidly to become a profitable FTSE 250 companydriven by the excellence of its PK technology and its position in the US. Thetechnology behind our energy based products is robust and our commercialisationstrategies are appropriate. However, the evolution of minimally invasive surgerywill increasingly involve the combination of both energy and visualisation,which Gyrus and Olympus bring to this transaction." Commenting on the Acquisition, Tsuyoshi Kikukawa, President of Olympus, said: "The operations of Gyrus and Olympus's Medical Systems Business are highlycomplementary and I am confident that this planned partnership will generatesignificant synergies and opportunities for both firms. The combination oftechnological capabilities will further enhance product systems which I expectto enable surgeons and their staff to ultimately perform safer and moreeffective surgical procedures with better patient outcomes." This summary should be read in conjunction with the full text of the followingannouncement and the Appendices. Enquiries: Perella Weinberg (financial adviser to Olympus) +44 20 7268 2800Philip YatesGraham Davidson Ogilvy Public Relations Worldwide (PR adviser to Olympus) +44 20 7309 1000Kerrin RobertsBen Lock Gyrus +44 20 7831 3113Brian Steer, ChairmanRoy Davis, Chief Executive OfficerSimon Shaw, Chief Financial Officer Bear Stearns (financial adviser to Gyrus) +44 20 7516 6000Paul AbecassisStuart Rankine Morgan Stanley (financial adviser and corporate broker to Gyrus) +44 20 7425 5000Peter MoorhouseLaura HowardHenry StewartEdward Knight Financial Dynamics (PR adviser to Gyrus) +44 20 7831 3113Ben Atwell The Conditions to the implementation of the Acquisition are set out in AppendixI. The bases and sources of certain financial information contained in this summaryand the following announcement are set out in Appendix II. Certain details relating to the irrevocable undertakings given by GyrusDirectors are set out in Appendix III. Certain definitions and terms used in this summary and the followingannouncement are set out in Appendix IV. This announcement is not intended to and does not constitute an offer to sell orinvitation to purchase or subscribe for any securities or the solicitation ofany vote or approval in any jurisdiction pursuant to the Acquisition orotherwise. The Acquisition will be made solely through the Scheme Document,which will contain the full terms and conditions of the Acquisition, includingdetails of how to vote in respect of the Acquisition. Any acceptance or otherresponse to the Acquisition should be made only on the basis of the informationin the Scheme Document. Gyrus Shareholders are advised to read the formaldocumentation for the Acquisition carefully once it has been despatched. Perella Weinberg Partners UK LLP, which is authorised and regulated in theUnited Kingdom by the Financial Services Authority, is acting exclusively forOlympus and Olympus UK Acquisitions and no-one else in connection with theAcquisition and will not be responsible to anyone other than Olympus and OlympusUK Acquisitions for providing the protections afforded to the clients of PerellaWeinberg or for providing advice in relation to the Acquisition. Bear, Stearns International Limited, which is authorised and regulated in theUnited Kingdom by the Financial Services Authority, is acting solely for Gyrusin connection with the Acquisition and no-one else and will not be responsibleto anyone other than Gyrus for providing the protections afforded to clients ofBear Stearns or for providing advice in relation to the Acquisition or any ofthe matters referred to in this announcement. Morgan Stanley & Co. Limited is acting solely for Gyrus in connection with theAcquisition and no-one else and will not be responsible to anyone other thanGyrus for providing the protections afforded to clients of Morgan Stanley or forproviding advice in relation to the Acquisition or any of the matters referredto in this announcement. The availability of the Acquisition to persons who are not resident in the UK orthe US may be affected by the laws of the relevant jurisdictions in which theyare located. Persons who are not so resident should inform themselves about, andobserve, any applicable requirements. Further details in relation to overseasshareholders will be contained in the Scheme Document. The release, publication or distribution of this announcement in jurisdictionsother than the UK or the US may be restricted by law and therefore any personswho are subject to the laws of any jurisdiction other than the UK or the USshould inform themselves about, and observe, any applicable requirements. Anyfailure to comply with the applicable requirements may constitute a violation ofthe securities laws of any such jurisdiction. This announcement has beenprepared for the purpose of complying with English law and the City Code and theinformation disclosed may not be the same as that which would have beendisclosed if this announcement had been prepared in accordance with the laws ofjurisdictions outside the UK. Any person (including, without limitation, any custodian, nominee and trustee)who would, or otherwise intends to, or who may have a contractual or legalobligation to, forward this announcement and/or the Scheme Document and/or anyother related document to any jurisdiction outside the UK should informthemselves of, and observe, any applicable legal or regulatory requirements oftheir jurisdiction. US Persons should note that the Scheme relates to the shares of a UK companythat is a "foreign private issuer" as defined under Rule 3b-4 under the USExchange Act and will be governed by English law. Accordingly, neither the proxysolicitation nor the tender offer rules under the US Exchange Act will apply tothe Scheme. Moreover, the Scheme will be subject to the disclosure requirementsand practices applicable in the UK to schemes of arrangement which differ fromthe disclosure requirements of the US proxy solicitation rules and tender offerrules. Financial information included in the Scheme Document will have beenprepared in accordance with accounting standards applicable in the UK that maynot be comparable to the accounting standards applicable to financial statementsof US companies. If Olympus UK Acquisitions exercises its right to implement theacquisition of the Gyrus Shares by way of a takeover offer, any public offeringto be made in the US and to US Persons will be made in compliance withapplicable US securities laws and regulations. This announcement, including information included or incorporated by referencein this announcement, may contain "forward-looking statements" concerningOlympus and Gyrus. Generally, the words "will", "may", "should", "continue", "believes", "expects", "intends", "anticipates" or similar expressions identifyforward-looking statements. The forward-looking statements involve risks anduncertainties that could cause actual results to differ materially from thoseexpressed in the forward-looking statements. Many of these risks anduncertainties relate to factors that are beyond the companies' abilities tocontrol or estimate precisely, such as future market conditions and thebehaviours of other market participants, and therefore undue reliance should notbe placed on such statements. Olympus and Gyrus assume no obligation and do notintend to update these forward-looking statements, except as required pursuantto applicable law. DEALING DISCLOSURE REQUIREMENTS Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes,"interested" (directly or indirectly) in 1% or more of any class of "relevantsecurities" of Gyrus, all "dealings" in any "relevant securities" of Gyrus(including by means of an option in respect of, or a derivative referenced to,any such "relevant securities") must be publicly disclosed by no later than 3.30pm (London time) on the London business day following the date of the relevanttransaction. This requirement will continue until the date on which the Schemebecomes effective, lapses or is otherwise withdrawn or on which the "offerperiod" otherwise ends (or, if the Acquisition is implemented by way of anoffer, the date on which the offer becomes, or is declared, unconditional as toacceptances, lapses or is otherwise withdrawn or on which the "offer period"otherwise ends). If two or more persons act together pursuant to an agreement orunderstanding, whether formal or informal, to acquire an "interest" in "relevantsecurities" of Gyrus, they will be deemed to be a single person for the purposeof Rule 8.3 of the City Code. Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevantsecurities" of Gyrus by Olympus or Gyrus, or by any of their respective "associates", must be disclosed by no later than 12.00 noon (London time) on theLondon business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose "relevantsecurities" "dealings" should be disclosed, and the number of such securities inissue, can be found on the Takeover Panel's website atwww.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the City Code, which can also be foundon the Panel's website. If you are in any doubt as to whether or not you arerequired to disclose a "dealing" under Rule 8, you should consult the Panel. NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO THE SAME WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION 19 November 2007 For immediate release RECOMMENDED CASH ACQUISITION OF GYRUS GROUP PLC BY OLYMPUS UK ACQUISITIONS LIMITED ("OLYMPUS UK ACQUISITIONS"), a wholly-owned subsidiary of OLYMPUS CORPORATION ("OLYMPUS") 1. Introduction The Boards of Olympus and Gyrus are pleased to announce today that they havereached agreement on the terms of a recommended cash acquisition by Olympus(through its wholly-owned subsidiary Olympus UK Acquisitions) of the entireissued and to be issued share capital of Gyrus, to be effected by way of ascheme of arrangement under section 425 of the Companies Act. Olympus UK Acquisitions is a newly incorporated wholly-owned subsidiary ofOlympus, formed for the purpose of making the Acquisition. 2. Acquisition terms It is intended that the Acquisition will be implemented by way of acourt-sanctioned scheme of arrangement under section 425 of the Companies Act. Under the terms of the Acquisition, which will be subject to the Conditions andfurther terms set out below and in Appendix I, and to the further terms to beset out in the Scheme Document, Gyrus Shareholders will be entitled to receive: for each Gyrus Share 630 pence in cash The terms of the Acquisition value the entire issued share capital of Gyrus atapproximately £935 million and imply an enterprise value for Gyrus ofapproximately £1,026 million and represent a premium of approximately: • 58 per cent. to the Closing Price of 400 pence per Gyrus Share on 16 November 2007, being the last Business Day before this announcement; and • 43 per cent. to the average Closing Price for the period of six months ended 16 November 2007, being the last Business Day before this announcement, of approximately 440 pence per Gyrus Share. The Acquisition will be conditional upon the satisfaction or waiver of theConditions set out in Appendix I, including the Regulatory Conditions. It is intended that the Acquisition will be made by Olympus UK AcquisitionsLimited and is proposed to be implemented by way of a scheme of arrangementunder section 425 of the Companies Act. The Scheme will be put to GyrusShareholders at the Court Meeting and at the Extraordinary General Meeting,which will be convened in due course. It is expected that the Scheme Documentwill be posted to Gyrus Shareholders on or around 17 December 2007. Subject tothe satisfaction of the Conditions, it is expected that the Scheme will becomeeffective in the first half of 2008. 3. Background to and reasons for the Acquisition The operations of Olympus's Medical Systems Business and Gyrus are highlycomplementary and the combination of their significant technologicalcapabilities will improve the development of enhanced visualisation andinstrumentation to address surgical procedures. The combined group will be wellpositioned to benefit from the continuing shift towards minimally invasivesurgical procedures. The combination of Olympus's Medical Systems Business and Gyrus will give thecombined group an enhanced geographical footprint. This global reach will allowmore medical practitioners to access Olympus and Gyrus products, as well asmaking the combined group more competitive against large industry players.Olympus believes that an expanded position in medical systems will enable thecompany to reinforce its reputation for highly reliable and efficient patientcare technologies. The Acquisition will also create the opportunity to deliver significantsynergies, that Olympus believes will assist it to broaden its line-up in orderto meet growing demand for minimally invasive medical systems as well ascontribute to patient wellbeing. The combined company will focus on continuousimprovement in cost, quality and services through the sharing of best practice,supporting both enhanced growth and margin improvement. 4. Recommendation The Directors of Gyrus, who have been so advised by Bear Stearns and MorganStanley, consider the terms of the Acquisition to be fair and reasonable. Inproviding their advice to the Directors of Gyrus, Bear Stearns and MorganStanley have taken into account the commercial assessments of Gyrus's Directors. The Directors of Gyrus intend unanimously to recommend to Gyrus Shareholders tovote in favour of the resolutions to be proposed at the Court Meeting and theExtraordinary General Meeting (or, in the event that the Acquisition isimplemented by way of a takeover offer, to accept or procure acceptance of suchOffer), as they have undertaken to do in respect of their own beneficialholdings of 650,071 Gyrus Shares representing (as at the date of thisannouncement), in aggregate, approximately 0.4 per cent. of the Gyrus Sharescurrently in issue. 5. Background to and reasons for recommending the Acquisition The Directors of Gyrus believe that the offer price of 630 pence per sharefairly reflects Gyrus's strong future prospects and growth potential andrepresents an opportunity for Gyrus Shareholders to receive an attractive cashpremium today. Accordingly, the Directors of Gyrus intend unanimously torecommend that Gyrus Shareholders vote in favour of the Acquisition. 6. Irrevocable undertakings Olympus UK Acquisitions has received irrevocable undertakings from seven of theDirectors of Gyrus to vote in favour of the Scheme and the Special Resolution inrespect of a total of 650,071 Gyrus Shares, representing, in aggregate,approximately 0.4 per cent. of Gyrus's existing issued share capital. Theseundertakings will cease to have any effect if the Scheme fails or is withdrawn(or if the Acquisition is implemented by way of a takeover offer, the Offerlapses or is withdrawn). Further details of these irrevocable undertakings are set out in Appendix III tothis announcement. 7. Information on Olympus and Olympus UK Acquisitions Olympus manufactures and sells precision machinery and instruments for medicaland healthcare, imaging and information, and industrial applications. Its corecompetency is opto-digital technology, which is a fusion of traditional opticaltechnology with advanced digital and fine processing technologies. For thefinancial year ended 31 March 2007, 39 per cent. of Olympus's revenues werebased in Japan, 26 per cent. in Europe, 22 per cent. in North America, 11 percent. in the rest of Asia and 2 per cent. in other areas. Olympus is engaged in five main business segments: • Imaging Systems (28 per cent. of 2007 revenues) manufactures digital SLR cameras, digital compact cameras and voice recorders; • Medical Systems (29 per cent. of 2007 revenues) develops a wide range of medical equipment, including gastrointestinal endoscopes, minimally invasive surgical endoscopes, endoscope disposal equipment, ultrasonic endoscopes and other endotherapy products; • Life Science (12 per cent. of 2007 revenues) offers several advanced microscope systems and diagnostic systems; • the Information Communication business (25 per cent. of 2007 revenues) invests in diverse businesses including mobile handset sales, mobile solutions, mobile content services, semiconductor related devices and other electronic devices; and • the Other Business (6 per cent. of 2007 revenues) segment engages in the sale of industrial endoscopes, non-destructive inspection equipment, printers and bar code scanners, as well as the development of new systems. Olympus's vision is to create new value in the medical, imaging, life scienceand industrial fields driven by its core competence, opto-digital technology.As a global company with extensive global operations, Olympus continuallypursues innovation to maximise value for all stakeholders. Olympus is listed on the Tokyo Stock Exchange. As at 16 November 2007, Olympushad a market capitalisation of approximately 1,169 billion Yen (approximately£5.2 billion). For the financial year ended 31 March 2007, Olympus generatedrevenues of 1,062 billion Yen (approximately £4.8 billion), net income of 47.8billion Yen (approximately £215.8 million) and had an operating profit margin of9 per cent. As at 30 September 2007, total net assets were 317.4 billion Yen(approximately £1.4 billion). Olympus UK Acquisitions is a newly formed UK incorporated private limitedcompany and a wholly-owned subsidiary of Olympus. Olympus UK Acquisitions wasformed at the direction of Olympus specifically for the purpose of acquiringGyrus. Olympus UK Acquisitions has not traded since its incorporation nor has itentered into any obligation other than in connection with the Acquisition.Further details of Olympus UK Acquisitions will be contained in the SchemeDocument. 8. Information on Gyrus Gyrus is a medical device business dedicated to developing and providingvisualisation and tissue management systems, instruments and services forminimally invasive surgery. For the financial year ended 31 December 2006, 79per cent. of Gyrus's revenues were based in North America, 15 per cent. in theUnited Kingdom and the rest of Europe and 6 per cent. in the rest of the world. Gyrus is organised in four businesses: • Surgical (25 per cent. of 2006 revenues) provides less invasive surgical solutions including advanced tissue management systems for laparoscopic and open procedures; • Endoscopy (formerly known as Urology and Gynaecology) (45 per cent. of 2006 revenues) focuses primarily on endoscopic surgery including cysto-resection (prostate and bladder) and lithotripsy (kidney stones) and associated procedures; • The ENT business (18 per cent. of 2006 revenues) provides complete solutions with a broad portfolio of devices to Ear, Nose and Throat specialists for otology, rhinology and head and neck surgery; and • Partnered Technologies (12 per cent. of 2006 revenues) out-licences the Gyrus Group's proprietary technology in markets where the Gyrus Group has no presence, outside of its core areas of sales and marketing competence. Gyrus was listed on the London Stock Exchange in November 1997. Over the last 10years, the management team has transformed Gyrus from a small loss-makingtechnology company into a profitable FTSE 250 medical device business and has: • grown sales from £6 million for the year ended 30 June 1998 to £213million for the year ended 31 December 2006; • increased its share price from 136 pence per share on 13 November1997 to 400 pence per share (the Closing Price on 16 November 2007, being thelast Business Day before this announcement); and • increased its market capitalisation from £42 million on 13 November1997 to £594 million on 16 November 2007, being the last Business Day beforethis announcement. This has been achieved through the development of Gyrus's advanced PK tissuemanagement technology and both organic growth and acquisitions. Through thesuccessful integration of four major acquisitions (Everest Medical in 2000,Richards (a division of Smith & Nephew) ENT business and Somnus MedicalTechnologies in 2001 and American Cystoscope Makers Inc. in 2005) and thecompletion of a major operations and R&D restructuring programme, Gyrus has beenable to achieve significant margin enhancement. For the financial year ended 31 December 2006, Gyrus generated revenues of£213.3 million, net income of £13.2 million and had an operating profit marginof 9 per cent. As at 30 June 2007, Gyrus's shareholders' equity was £290.3million. 9. Management and Employees Olympus recognises the strong contribution made by Gyrus's management andemployees to the development of Gyrus and views them as being critical to thesuccess of the combined group going forward. The Board of Olympus has given the Gyrus Board assurances that, following theScheme becoming effective, the existing employment rights, including pensionrights, of all management and employees of the Gyrus Group will be fullysafeguarded. Olympus has no plans to materially change the conditions ofemployment of Gyrus's employees and has no plans to change the location ofGyrus's place of business. Olympus will continue to be headquartered in Japan. 10. Gyrus Share Schemes The Acquisition will extend to any Gyrus Shares that are unconditionallyallotted or issued pursuant to the exercise of options and/or vesting of awardsgranted under the Gyrus Share Schemes before the record date for the Scheme. At the same time as, or as soon as practicable following, publication of theScheme Document, Gyrus will write to the holders of outstanding options and/orawards to inform them of the effect of the Acquisition on their rights under theGyrus Share Schemes and to set out any appropriate proposals to be made inrespect of their options and/or awards. Awards granted under the LTIP will vest on the date that awardholders arenotified of the sanction of the Scheme by the Court (the "Early Vesting Date").Awards have been granted under the LTIP subject to performance conditions basedon growth in Gyrus's earnings per share (EPS) over a fixed three-year period,beginning on the first day of the financial year in which the award is granted,with no provision to retest. Given the Acquisition, the Remuneration Committeedoes not consider this EPS performance condition to be appropriate as a measureof performance and has exercised its discretion, with the agreement of OlympusUK Acquisitions, under the LTIP rules, to replace the EPS performance conditionwith a performance condition measured by reference to the total returns toshareholders. The Remuneration Committee has further determined that it expectsthis altered performance condition to be satisfied on the Early Vesting Date andthat it does not intend to apply a time pro rata reduction to determine thenumber of Gyrus Shares subject to vested awards. Accordingly, the RemunerationCommittee expects that awards under the LTIP will vest in full on the EarlyVesting Date. 11. Scheme of Arrangement It is intended that the Acquisition will be implemented by means of acourt-sanctioned scheme of arrangement between Gyrus and the Scheme Shareholdersunder section 425 of the Companies Act. The purpose of the Scheme is to providefor Olympus UK Acquisitions to become owner of the whole of the issued and to beissued share capital of Gyrus. This is to be achieved by the cancellation, inwhole or in part, of the Scheme Shares and the application of the reservearising from such cancellation in paying up in full a number of new Gyrus Shares(which is equal to the number of Scheme Shares cancelled), and issuing the sameto Olympus UK Acquisitions in consideration for which Scheme Shareholders willreceive consideration on the basis set out in paragraph 2 of this announcement. The implementation of the Scheme is subject to the Conditions set out inAppendix I and the full terms and conditions which will be set out in the SchemeDocument. In particular, to become effective the Scheme requires the approvalof a majority in number of the Scheme Shareholders present and voting in personor by proxy at the Court Meeting, representing not less than three-quarters invalue of the Scheme Shares held by such Scheme Shareholders, together with thesanction of the Court and the passing of the resolutions necessary to implementthe Scheme at the EGM. Further, the Scheme will only become effective upon delivery to and, asappropriate, registration by the Registrar of Companies of copies of the CourtOrders. Upon the Scheme becoming effective, it will be binding upon all SchemeShareholders, irrespective of whether or not they attended or voted at the CourtMeeting or the EGM. The Scheme Document will include full details of the Scheme, together withnotices of the Court Meeting and the EGM and the expected timetable. The SchemeDocument will be posted to Gyrus Shareholders and, for information only, toholders of options granted under the Gyrus Share Schemes. Further details of theScheme, including the timetable for its implementation, will be set out in theScheme Document (which is expected to be posted to Gyrus Shareholders on oraround 17 December 2007). An announcement as to the exact posting date will bemade as and when appropriate. If the Scheme has not become effective by 23 September 2008, or such later dateas Olympus UK Acquisitions and Gyrus may agree (with, where applicable, theconsent of the Panel and the Court), it will lapse. Olympus UK Acquisitions reserves the right to elect to implement the Acquisitionby way of a takeover offer. In such event, it is proposed such Offer will beimplemented on the same terms (subject to appropriate amendments), so far asapplicable, as those which would apply to the Scheme. 12. Financing The cash consideration payable by Olympus UK Acquisitions under the terms of theAcquisition will be funded using a combination of Olympus's existing resourcesand loan facilities arranged by SMBC for the purposes of the Acquisition. Perella Weinberg, financial adviser to Olympus and Olympus UK Acquisitions, issatisfied that sufficient resources are available to Olympus UK Acquisitions toenable it to satisfy the full cash consideration payable to Gyrus Shareholdersunder the terms of the Acquisition. 13. Implementation Agreement, break fee and non-solicitation Olympus and Gyrus have entered into an Implementation Agreement which sets out,amongst other things, various matters in relation to the implementation of theAcquisition, anti-trust approvals required in connection with the Acquisition,the conduct of Gyrus's business prior to the Effective Date or the terminationof the agreement, a break fee and a non-solicitation undertaking. Anti-trust approvals Olympus UK Acquisitions and Gyrus have agreed certain steps that they will takein seeking to obtain approvals from the antitrust authorities in the US andcertain other jurisdictions (together, the "Antitrust Conditions"). If itbecomes reasonably apparent that, in order to ensure that satisfaction of theAntitrust Conditions occurs on or before 23 September 2008 it will be necessaryfor Olympus UK Acquisitions (or a member of the Olympus group) to agree to offerremedies to relevant antitrust authorities, then Olympus UK Acquisitions (or amember of the Olympus group) is obliged after 30 June 2008 to offer suchremedies as are necessary, provided that it is not obliged to offer remedieswhich, taken in aggregate, involve the disposal of, or the imposition of anylimitation upon, assets or businesses of Gyrus and/or Olympus generatingrevenues within respectively the financial year of Gyrus ended 31 December 2006and the financial year of Olympus Corporation ended 31 March 2007 of more thanUS$85 million. Break fee arrangements Under the Implementation Agreement, Gyrus will be required to pay to Olympus UKAcquisitions approximately £9.7 million (inclusive of VAT, if applicable, exceptto the extent that such VAT is recoverable by Gyrus) in circumstances where theAcquisition lapses or is withdrawn and: (i) the Directors of Gyrus do not, in the Scheme Document, makean unqualified recommendation to Gyrus Shareholders to vote in favour of theSpecial Resolution or, in the event that Olympus UK Acquisitions elects toimplement the Acquisition by way of a takeover offer, the Directors of Gyrus donot, in the Offer document, make an unqualified recommendation to GyrusShareholders to accept such offer; or (ii) Gyrus announces that the Directors of Gyrus no longer intendto make the recommendation referred to in paragraph (i) above or, once made, theDirectors withdraw, qualify or adversely modify such recommendation; or (iii) a Competing Proposal (or any amendment, variation orrevision of such proposal) is announced prior to 23 September 2008 (whetherpursuant to Rule 2.4 or Rule 2.5 of the City Code or otherwise) and prior to theAcquisition lapsing or being withdrawn and such Competing Proposal becomesunconditional in all respects or is otherwise completed in accordance with itsterms, or prior to the lapse or withdrawal of such Competing Proposal asubsequent Competing Proposal is announced which becomes unconditional in allrespects or is otherwise completed in accordance with its terms, provided that no amount shall be payable under paragraph (i) or (ii) above wherethe lapse or withdrawal is caused directly or indirectly by a breach by OlympusUK Acquisitions of the Implementation Agreement or in the circumstancesdescribed in the next paragraph. Olympus UK Acquisitions will be required to pay to Gyrus £3,500,000 (inclusiveof VAT, if applicable, except to the extent that such VAT is recoverable byOlympus UK Acquisitions) in circumstances where the Acquisition lapses or iswithdrawn by virtue of Olympus UK Acquisitions invoking any of the RegulatoryConditions or if the Acquisition does not become effective by 23 September 2008,save (in each case) in circumstances where the lapse or withdrawal is caused bya breach by Gyrus of the Implementation Agreement or where a fee is payable toOlympus UK Acquisitions as described above. Non-solicitation arrangements Gyrus has agreed that it will not, directly or indirectly, solicit or initiateany Competing Proposal. In the event that Gyrus receives a Competing Proposaland intends to recommend such Competing Proposal to Gyrus Shareholders, Gyrushas agreed to notify Olympus UK Acquisitions of that intention, and the terms(including price and form of consideration) of that Competing Proposal. In thatevent, Gyrus shall procure that the Directors of Gyrus do not agree to give sucha recommendation, or publicly announce such a recommendation or intention tomake such a recommendation, within three Business Days of Olympus UKAcquisitions being so notified. 14. Disclosure of interests in Gyrus Except as disclosed below, and save for the irrevocable undertakings describedin paragraph 6 above, as at the close of business on 16 November 2007, thelatest practicable date prior to the date of this announcement, none of Olympus,Olympus UK Acquisitions, nor any of the Directors of Olympus or Olympus UKAcquisitions nor, so far as Olympus and Olympus UK Acquisitions are aware, anyparty acting in concert with Olympus or Olympus UK Acquisitions (i) has anyinterest in, or right to subscribe for, any Gyrus Shares, nor (ii) has any shortpositions in respect of Gyrus Shares (whether conditional or absolute andwhether in the money, or otherwise), including any short position under aderivative, any agreement to sell or any delivery obligation or right to requireanother person to take delivery, nor (iii) has borrowed or lent any Gyrus Shares(save for any borrowed shares which have been on-lent or sold). 15. Delisting and re-registration It is intended that the London Stock Exchange and the UK Listing Authority willbe requested respectively to cancel trading in Gyrus Shares on the London StockExchange's market for listed securities and to remove the listing of the GyrusShares from the Official List, in each case on the Effective Date. As soon aspossible after the Effective Date, it is intended that Gyrus be re-registered asa private limited company. 16. General In accordance with Rule 2.10 of the City Code, Gyrus confirms that its currentissued share capital comprises 148,470,051 ordinary shares of one penny eachwith voting rights and 2,646,370 deferred redeemable shares of 50 pence eachwithout voting rights. The International Securities Identification Number forGyrus Shares is GB0001701522. The Acquisition is subject to the Conditions set out herein and in Appendix I,and to be set out in the Scheme Document. The Scheme Document is expected to be posted to Gyrus Shareholders and madeavailable, for information only, to participants in the Gyrus Share Schemes onor around 17 December 2007. It is expected that, subject to the satisfaction of the Conditions, the Schemewill become effective in the first half of 2008. Olympus UK Acquisitions reserves the right to elect to implement the acquisitionof the Gyrus Shares by way of a takeover offer as an alternative to the Scheme.Any such takeover offer will be subject to an acceptance condition of 90 percent. of the shares to which the offer relates and will be implemented on thesame terms (subject to appropriate amendments), so far as applicable, as thosewhich would apply to the Scheme and in compliance with applicable laws andregulations. Such terms are set out in further details in Appendix I. The Acquisition will be governed by English law and be subject to the applicablerequirements of the City Code, the Panel, the London Stock Exchange and the UKListing Authority. Enquiries: Perella Weinberg (financial adviser to Olympus) +44 20 7268 2800Philip YatesGraham Davidson Ogilvy Renault Public Relations Worldwide (PR adviser to Olympus) +44 20 7309 1000Kerrin RobertsBen Lock Gyrus +44 20 7831 3113Brian Steer, ChairmanRoy Davis, Chief Executive OfficerSimon Shaw, Chief Financial Officer Bear Stearns (financial adviser to Gyrus) +44 20 7516 6000Paul AbecassisStuart Rankine Morgan Stanley (financial adviser and corporate broker to Gyrus) +44 20 7425 5000Peter MoorhouseLaura HowardHenry StewartEdward Knight Financial Dynamics (PR adviser to Gyrus) +44 20 7831 3113Ben Atwell The Conditions to the implementation of the Acquisition are set out in AppendixI. The bases and sources of certain financial information contained in thisannouncement are set out in Appendix II. Certain details relating to the irrevocable undertakings given by GyrusDirectors are set out in Appendix III. Certain definitions and terms used in this announcement are set out in AppendixIV. This announcement is not intended to and does not constitute an offer to sell orinvitation to purchase or subscribe for any securities or the solicitation ofany vote or approval in any jurisdiction pursuant to the Acquisition orotherwise. The Acquisition will be made solely through the Scheme Document,which will contain the full terms and conditions of the Acquisition, includingdetails of how to vote in respect of the Acquisition. Any acceptance or otherresponse to the Acquisition should be made only on the basis of the informationin the Scheme Document. Gyrus Shareholders are advised to read the formaldocumentation for the Acquisition carefully once it has been despatched. Perella Weinberg Partners UK LLP, which is authorised and regulated in theUnited Kingdom by the Financial Services Authority, is acting exclusively forOlympus and Olympus UK Acquisitions and no-one else in connection with theAcquisition and will not be responsible to anyone other than Olympus and OlympusUK Acquisitions for providing the protections afforded to the clients of PerellaWeinberg or for providing advice in relation to the Acquisition. Bear, Stearns International Limited, which is authorised and regulated in theUnited Kingdom by the Financial Services Authority, is acting solely for Gyrusin connection with the Acquisition and no-one else and will not be responsibleto anyone other than Gyrus for providing the protections afforded to clients ofBear Stearns or for providing advice in relation to the Acquisition or any ofthe matters referred to in this announcement. Morgan Stanley & Co. Limited is acting solely for Gyrus in connection with theAcquisition and no-one else and will not be responsible to anyone other thanGyrus for providing the protections afforded to clients of Morgan Stanley or forproviding advice in relation to the Acquisition or any of the matters referredto in this announcement. The availability of the Acquisition to persons who are not resident in the UK orthe US may be affected by the laws of the relevant jurisdictions in which theyare located. Persons who are not so resident should inform themselves about, andobserve, any applicable requirements. Further details in relation to overseasshareholders will be contained in the Scheme Document. The release, publication or distribution of this announcement in jurisdictionsother than the UK or the US may be restricted by law and therefore any personswho are subject to the laws of any jurisdiction other than the UK or the USshould inform themselves about, and observe, any applicable requirements. Anyfailure to comply with the applicable requirements may constitute a violation ofthe securities laws of any such jurisdiction. This announcement has beenprepared for the purpose of complying with English law and the City Code and theinformation disclosed may not be the same as that which would have beendisclosed if this announcement had been prepared in accordance with the laws ofjurisdictions outside the UK. Any person (including, without limitation, any custodian, nominee and trustee)who would, or otherwise intends to, or who may have a contractual or legalobligation to, forward this announcement and/or the Scheme Document and/or anyother related document to any jurisdiction outside the UK should informthemselves of, and observe, any applicable legal or regulatory requirements oftheir jurisdiction. US Persons should note that the Scheme relates to the shares of a UK companythat is a "foreign private issuer" as defined under Rule 3b-4 under the USExchange Act and will be governed by English law. Accordingly, neither the proxysolicitation nor the tender offer rules under the Exchange Act will apply to theScheme. Moreover, the Scheme will be subject to the disclosure requirements andpractices applicable in the UK to schemes of arrangement which differ from thedisclosure requirements of the US proxy solicitation rules and tender offerrules. Financial information included in the Scheme Document will have beenprepared in accordance with accounting standards applicable in the UK that maynot be comparable to the accounting standards applicable to financial statementsof US companies. If Olympus UK Acquisitions exercises its right to implement theacquisition of the Gyrus Shares by way of a takeover offer, any public offeringto be made in the US and to US Persons will be made in compliance withapplicable US securities laws and regulations. This announcement, including information included or incorporated by referencein this announcement, may contain "forward-looking statements" concerningOlympus and Gyrus. Generally, the words "will", "may", "should", "continue", "believes", "expects", "intends", "anticipates" or similar expressions identifyforward-looking statements. The forward-looking statements involve risks anduncertainties that could cause actual results to differ materially from thoseexpressed in the forward-looking statements. Many of these risks anduncertainties relate to factors that are beyond the companies' abilities tocontrol or estimate precisely, such as future market conditions and thebehaviours of other market participants, and therefore undue reliance should notbe placed on such statements. Olympus and Gyrus assume no obligation and do notintend to update these forward-looking statements, except as required pursuantto applicable law. DEALING DISCLOSURE REQUIREMENTS Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes,"interested" (directly or indirectly) in 1% or more of any class of "relevantsecurities" of Gyrus, all "dealings" in any "relevant securities" of Gyrus(including by means of an option in respect of, or a derivative referenced to,any such "relevant securities") must be publicly disclosed by no later than 3.30pm (London time) on the London business day following the date of the relevanttransaction. This requirement will continue until the date on which the Schemebecomes effective, lapses or is otherwise withdrawn or on which the "offerperiod" otherwise ends (or, if the Acquisition is implemented by way of anoffer, the date on which the offer becomes, or is declared, unconditional as toacceptances, lapses or is otherwise withdrawn or on which the "offer period"otherwise ends). If two or more persons act together pursuant to an agreement orunderstanding, whether formal or informal, to acquire an "interest" in "relevantsecurities" of Gyrus, they will be deemed to be a single person for the purposeof Rule 8.3 of the City Code. Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevantsecurities" of Gyrus by Olympus or Gyrus, or by any of their respective "associates", must be disclosed by no later than 12.00 noon (London time) on theLondon business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose "relevantsecurities" "dealings" should be disclosed, and the number of such securities inissue, can be found on the Takeover Panel's website atwww.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the City Code, which can also be foundon the Panel's website. If you are in any doubt as to whether or not you arerequired to disclose a "dealing" under Rule 8, you should consult the Panel. APPENDIX I CONDITIONS TO THE IMPLEMENTATION OF THE SCHEME AND THE ACQUISITION 1. The Acquisition is conditional upon the Scheme becomingunconditional and becoming effective, subject to the City Code, by not laterthan 23 September 2008 or such later date, if any, as Olympus UK Acquisitionsand Gyrus may agree and the Panel and the Court may allow. The Scheme will beconditional upon: (a) approval of the Scheme by a majority in number representingthree-fourths or more in value of the holders of Scheme Shares (or the relevantclass or classes thereof), present and voting, either in person or by proxy, atthe Court Meeting and at any separate class meeting which may be required by theCourt or at any adjournment of any such meeting; (b) the resolution(s) required to approve and implement the Schemebeing passed by the requisite majority at the Extraordinary General Meeting orany adjournment of that meeting and not subsequently revoked; and (c) the sanction of the Scheme by the Court (with or withoutmodification but subject to any modification being on terms reasonablyacceptable to Gyrus and Olympus UK Acquisitions), and the confirmation of theReduction by the Court, and an office copy of the Court Orders being filed with(and, in the case of the Court Order in respect of the Reduction, registered by)the Registrar of Companies in England and Wales. 2. Gyrus and Olympus UK Acquisitions have agreed that, subjectas stated in paragraph 3 below, the Acquisition will be conditional upon thefollowing matters, and, accordingly, the necessary action to make the Schemeeffective will not be taken unless such Conditions (as amended as appropriate)have been satisfied or waived: (a) all applicable filings having been made and all or anyapplicable waiting periods (including any extensions thereof) under the UnitedStates Hart-Scott Rodino Antitrust Improvements Act of 1976 and the regulationsthereunder having expired, lapsed or been terminated as appropriate, in eachcase in respect of the proposed combination of Gyrus with Olympus and neither ofthe parties being subject to any order or injunction of a court of competentjurisdiction in the United States that prohibits consummation of the Acquisitionas a result of action brought by the US Federal Trade Commission or USDepartment of Justice; (b) no government or governmental, quasi governmental,supranational, statutory, court, regulatory or investigative body or any otherbody or person whatsoever in any jurisdiction (each a "Third Party") havingdecided to take, institute or implement any action, proceeding, suit,investigation, enquiry or reference, or having required any action to be takenor otherwise having done anything or having enacted, made or proposed anystatute, regulation, decision or order and there not continuing to beoutstanding any statute, regulation, decision or order which would or might bereasonably expected to: (i) make the Acquisition, its implementation or the acquisitionof any Gyrus Shares by any member of the Wider Olympus Group void, illegal and/or unenforceable under the laws of any jurisdiction, or otherwise directly orindirectly prohibit, or materially restrain, restrict or delay theimplementation of, or impose material additional conditions or obligations withrespect to, or otherwise materially challenge or require material amendment of,the Acquisition; (ii) require the divestiture by any member of the Wider OlympusGroup or by any member of the Wider Gyrus Group of all or any part of theirrespective businesses, assets or property or impose any limitation on theability of any of them to conduct their respective businesses (or any partthereof) or to own any of their assets or properties (or any part thereof) whichin any such case is material in the context of the Wider Olympus Group or theWider Gyrus Group, in either case taken as a whole; (iii) impose any material limitation on, or result in a materialdelay in, the ability of any member of the Wider Olympus Group directly orindirectly to acquire or hold or to exercise effectively all or any rights ofownership in respect of shares or other securities in Gyrus or on the ability ofany member of the Wider Gyrus Group or any member of the Wider Olympus Groupdirectly or indirectly to hold or exercise effectively any rights of ownershipin respect of shares or other securities (or the equivalent) in, or to exercisemanagement control over, any member of the Wider Gyrus Group which in each caseis material in the context of the Acquisition; (iv) require any member of the Wider Olympus Group or the WiderGyrus Group to acquire or offer to acquire any shares, other securities (or theequivalent) or interest in any member of the Wider Gyrus Group or any assetowned by any third party (other than in the implementation of the Scheme), wheresuch acquisition would be material in the context of the Wider Olympus Grouptaken as a whole or, as the case may be, the Wider Gyrus Group taken as a whole; (v) require, prevent or materially delay a divestiture by anymember of the Wider Olympus Group of any shares or other securities (or theequivalent) in any member of the Gyrus Group which is material in the context ofthe Gyrus Group taken as a whole; (vi) result in any member of the Wider Gyrus Group ceasing to beable to carry on business under any name under which it presently carries onbusiness which in any such case is material in the context of the Wider GyrusGroup taken as a whole; (vii) impose any material limitation on the ability of any member ofthe Wider Gyrus Group to integrate or co-ordinate all or any part of itsbusiness with all or any part of the business of any other member of the WiderGyrus Group or the Wider Olympus Group which is adverse to and material in thecontext of the Wider Gyrus Group or the Wider Olympus Group taken as a whole; or (viii) otherwise affect the business, assets, profits or prospects ofany member of the Wider Gyrus Group or any member of the Wider Olympus Group ina manner which is adverse to and material in the context of the Wider GyrusGroup and Wider Olympus Group taken as a whole or of the obligations of anymembers of the Wider Olympus Group taken as a whole in connection with theAcquisition, and all applicable waiting and other time periods during which anysuch Third Party could decide to take, institute or implement any such action,proceeding, suit, investigation, enquiry or reference or otherwise interveneunder the laws of any jurisdiction in respect of the Scheme or the acquisitionor proposed acquisition of any Gyrus Shares having expired, lapsed or beenterminated; (c) all necessary regulatory approvals, or all waiting periods inwhich such approvals may be granted having expired, been terminated, or lapsedwithout the taking of any action contrary to or inconsistent with suchapprovals, by the merger control authorities in Germany, Austria and Spain, ineach case in relation to the Acquisition; (d) except as publicly announced to a Regulatory InformationService by or on behalf of Gyrus before the date of this announcement or asfairly disclosed in writing by or on behalf of Gyrus to Olympus UK Acquisitionsbefore the date of this announcement, there being no provision of anyarrangement, agreement, authorisation, law, lease or other instrument to whichany member of the Wider Gyrus Group is a party or by or to which any such memberor any of its assets is or may be bound or be subject which, or any event orcircumstance having occurred which under any arrangement, agreement,authorisation, law, lease or other instrument to which any member of the WiderGyrus Group is a party or by or to which any such member or any of its assets isor may be bound or be subject, would result in as a consequence of theAcquisition or the proposed acquisition by any member of the Wider Olympus Groupof any Gyrus Shares or because of a change in the control or management of anymember of the Wider Gyrus Group or otherwise, could or might reasonably beexpected to result in, in each case to an extent which is material in thecontext of the Wider Gyrus Group taken as whole or the Acquisition: (i) any material amount of monies borrowed by, or any othermaterial indebtedness, actual or contingent, of any member of the Wider GyrusGroup being or becoming repayable, or capable of being declared repayable,immediately or prior to its or their stated maturity date or repayment date, orthe ability of any such member to borrow monies or incur any indebtedness beingwithdrawn or inhibited or being capable of becoming or being withdrawn orinhibited; (ii) the rights, liabilities, obligations, interests or businessof any member of the Wider Gyrus Group under any such arrangement, agreement,licence, permit, lease or instrument or the interests or business of any memberof the Wider Gyrus Group in or with any other firm or company or body or person(or any agreement or arrangement relating to any such business or interests)being terminated or adversely modified or affected or any onerous obligation orliability arising or any adverse action being taken thereunder; (iii) any member of the Wider Gyrus Group ceasing to be able tocarry on business under any name under which it presently carries on business; (iv) any assets or interests of, or any asset the use of which isenjoyed by, any member of the Wider Gyrus Group being or falling to be disposedof or charged or any right arising under which any such asset or interest couldbe required to be disposed of or charged or could cease to be available to anymember of the Wider Gyrus Group otherwise than in the ordinary course ofbusiness; (v) the creation or enforcement of any mortgage, charge or othersecurity interest over the whole or any substantial part of the business,property or assets of any member of the Wider Gyrus Group; (vi) the value of, or the financial or trading position orprospects of, any member of the Wider Gyrus Group being prejudiced or materiallyand adversely affected; or (vii) the creation of any material liability (actual or contingent)by any member of the Wider Gyrus Group; (e) except as publicly announced to a Regulatory InformationService by or on behalf of Gyrus before the date of this announcement or asfairly disclosed in writing by Gyrus to Olympus UK Acquisitions prior to thedate of this announcement, no member of the Gyrus Group having since 31 December2006: (i) issued or agreed to issue or authorised or proposed theissue of additional shares of any class, or securities convertible into, orexchangeable for, or rights, warrants or options to subscribe for or acquire,any such shares or convertible capital or transferred or sold or agreed totransfer or sell or proposed the transfer or sale of Gyrus Shares out oftreasury (save, in each case, where relevant, as between Gyrus and wholly-ownedsubsidiaries of Gyrus prior to the date of this announcement and save for theissue of Gyrus Shares or the transfer or sale of Gyrus Shares out of treasury onthe exercise of options granted under the Gyrus Share Schemes in the ordinarycourse prior to the date of this announcement); (ii) recommended, declared, paid or made or proposed torecommend, declare, pay or make any bonus, dividend or other distribution(whether payable in cash or otherwise) other than to Gyrus or one of itswholly-owned subsidiaries; (iii) merged with or demerged from or acquired any body corporate,partnership or business or acquired or disposed of, or transferred, mortgaged orcharged or created any security interest over, any assets or any right, title orinterest in any asset (including shares and trade investments) or authorised,proposed or announced any intention to do so in each case other than in theordinary course of business and provided not material in the context of theWider Gyrus Group taken as a whole and save for transactions as between Gyrusand its wholly-owned subsidiaries or between such wholly-owned subsidiaries; (iv) made, authorised, proposed or announced an intention topropose any change in its loan capital; (v) issued, authorised or proposed the issue of any debentures or(save in the ordinary course of business and save as between Gyrus and itswholly-owned subsidiaries or between such wholly-owned subsidiaries) incurred orincreased any indebtedness or become subject to any contingent liability whichis material in the context of the Wider Gyrus Group taken as a whole; (vi) entered into or varied or announced its intention to enterinto or vary any contract, transaction, arrangement or commitment (whether inrespect of capital expenditure or otherwise), otherwise than in the ordinarycourse of business, which is of a long term, unusual or onerous nature, or whichinvolves or could involve an obligation of a nature or magnitude which is, inany such case, material in the context of the Wider Gyrus Group taken as a wholeor which is or is likely to be restrictive on the business of any member of theGyrus Group or the Olympus Group where such restriction is material in thecontext of the Wider Gyrus Group taken as a whole or of the Acquisition; (vii) entered into or varied the terms of any service agreement withany director or senior executive of the Gyrus Group; (viii) proposed, agreed to provide or modified the terms of any shareoption scheme, incentive scheme, or, other than in the ordinary course ofbusiness, materially altered any other benefit relating to the employment ortermination of employment of any employee of the Gyrus Group; (ix) the trustees of any relevant pension scheme having made oragreed or consented to any significant change to the terms of the trust deedsconstituting the pension schemes established for its directors, employees ortheir dependants or the benefits which accrue, or to the pensions which arepayable, thereunder, or to the basis on which qualification for, or accrual orentitlement to, such benefits or pensions are calculated or determined or to thebasis on which the liabilities (including pensions) of such pension schemes arefunded or valued, or agreed or consented to any change to the trustees ortrustee directors, in each case which is material in the context of the WiderGyrus Group taken as a whole; (x) implemented or effected or announced its intention toimplement or effect, any reconstruction, amalgamation, scheme or othertransaction or arrangement otherwise than in the ordinary course of business; (xi) other than by a wholly-owned subsidiary of Gyrus, purchased,redeemed or repaid or announced any proposal to purchase, redeem or repay any ofits own shares or other securities or reduced or, save in respect of the mattersmentioned in sub paragraph (i) above, made any other change to any part of itsshare capital to an extent which is material in the context of the Wider GyrusGroup taken as a whole; (xii) waived or compromised any claim otherwise than in the ordinarycourse of business which is material in the context of the Wider Gyrus Grouptaken as a whole; (xiii) made any material alteration to its memorandum or articles ofassociation or other incorporation documents which is material in the context ofthe Wider Gyrus Group taken as a whole; (xiv) other than in respect of a body corporate which is dormant andwas solvent at the relevant time, taken or proposed any corporate action or hadany legal proceedings instituted or threatened in writing against it for itswinding up (voluntary or otherwise), dissolution, reorganisation or for theappointment of any administrator, receiver, administrative receiver, trustee orsimilar officer of all or any of its assets or revenues or any analogousproceedings in any jurisdiction or appointed any analogous person in anyjurisdiction or had any such person appointed; (xv) been unable, or admitted in writing that it is unable, to payits debts or commenced negotiations with one or more of its creditors with aview to rescheduling or restructuring any of its indebtedness, or having stoppedor suspended (or threatened to stop or suspend) payment of its debts generallyor ceased or threatened to cease carrying on all or a substantial part of itsbusiness; or (xvi) entered into any contract, commitment, agreement or arrangementotherwise than in the ordinary course of business or passed any resolution ormade any offer (which remains open for acceptance) with respect to, or announcedan intention to, or to propose to, effect any of the Acquisitions, matters orevents referred to in this condition; (f) since 31 December 2006, and except as publicly announced toa Regulatory Information Service by or on behalf of Gyrus or as fairly disclosedin writing by or on behalf of Gyrus to Olympus UK Acquisitions, in each case,before the date of this announcement: (i) there having been no adverse change in the business, assets,financial or trading position or profits or prospects or operational performanceof any member of the Wider Gyrus Group to an extent which is material to theGyrus Group taken as a whole; (ii) no litigation, arbitration proceedings, prosecution or otherlegal proceedings having been threatened, announced or instituted by or againstand remaining outstanding against any member of the Wider Gyrus Group or towhich any member of the Wider Gyrus Group is or may become a party (whether asclaimant or defendant or otherwise) and no enquiry or investigation by, orcomplaint or reference to, any Third Party against or in respect of any memberof the Wider Gyrus Group having been threatened, announced or instituted by andagainst, or remaining outstanding in respect of, any member of the Wider GyrusGroup which, in any such case, might reasonably be expected to materially andadversely affect the Wider Gyrus Group taken as a whole; (iii) no contingent or other liability having arisen or becomeknown to Olympus UK Acquisition which would be reasonably likely to adverselyaffect the business, assets, financial or trading position or profits orprospects of any member of the Wider Gyrus Group to an extent which is materialto the Wider Gyrus Group taken as a whole; and (iv) no steps having been taken and no omissions having been madewhich are likely to result in the withdrawal, cancellation, termination ormodification of any Authorisation held by any member of the Wider Gyrus Group,which is necessary for the proper carrying on of its business and thewithdrawal, cancellation, termination or modification of which is material inthe context of the Wider Gyrus Group taken as a whole; (g) since 31 December 2006, and except as publicly announced to aRegulatory Information Service by or on behalf of Gyrus or as fairly disclosedin writing by or on behalf of Gyrus to Olympus UK Acquisition, in each case,before the date of this announcement, Olympus UK Acquisitions not havingdiscovered: (i) that any financial, business or other information concerningthe Wider Gyrus Group publicly disclosed which is material and adverse to thefinancial or trading position of the Wider Gyrus Group taken as a whole ismisleading to a material extent, or contains a material misrepresentation offact; or (ii) that any member of the Wider Gyrus Group is subject to anyliability, contingent or otherwise and which is material in the context of theWider Gyrus Group taken as a whole; (h) except as publicly announced to a Regulatory InformationService by or on behalf of Gyrus or as fairly disclosed by or on behalf of Gyrusto Olympus UK Acquisition in each case before the date of this announcement, inrelation to any release, emission, accumulation, discharge, disposal or otherfact or circumstance which has impaired or is likely to impair the environment(including property) or harmed or is likely to harm human health, no past orpresent member of the Wider Gyrus Group, in each case in a manner or to anextent which is material in the context of the Wider Gyrus Group taken as awhole, (i) having committed any violation of any applicable laws, statutes,regulations, notices or other requirements of any Third Party and/or (ii) havingincurred any liability (whether actual or contingent) to any Third Party; and/or(iii) being likely to incur any liability (whether actual or contingent), orbeing required, to make good, remediate, repair, re instate or clean up theenvironment (including any property). 3. Olympus UK Acquisitions reserves the right to waive inwhole, or in part, all or any of the Conditions except Condition 1. 4. Save with the consent of the Panel, the proposals will lapseand the Scheme will not proceed if (i) the Office of Fair Trading makes areference to the United Kingdom Competition Commission under section 33 of theEnterprise Act 2002 or (ii) the European Commission initiates proceedings underArticle 6(1)(c) of the Regulation or makes a referral to a competent authorityof the United Kingdom under Article 9(3)(b) of the Regulation and there is asubsequent reference to the United Kingdom Competition Commission, in eithercase before the date on which the resolutions are passed at the Court Meeting(or in the case of a takeover offer under paragraph 6 below before 1.00 p.m. onthe first closing date of the takeover offer or the date on which the takeoveroffer becomes or is declared unconditional as to acceptances, whichever is thelater). 5. If Olympus UK Acquisition is required by the Panel to makean offer for Gyrus Shares under the provisions of Rule 9 of the City Code,Olympus UK Acquisitions may make such alterations to the terms and conditions ofthe offer as are necessary to comply with the provisions of that rule. 6. Olympus UK Acquisitions reserves the right to elect (withthe consent of the Panel (where necessary)) to implement the acquisition of theentire issued and to be issued ordinary share capital of Gyrus by way of atakeover offer (as such term is defined in Part 28 of the Companies Act 2006).In such event, the takeover offer will be implemented on the same terms (subjectto amendments necessary to reflect the change in method of effecting theAcquisition), so far as applicable, as those which would apply to the Scheme.In particular, Condition 1 would not apply, however, the takeover offer would besubject to the following further condition: "valid acceptances being received (and not, where permitted, withdrawn) by notlater than 1.00 p.m. (London time) on the first closing date of the takeoveroffer (or such later time(s) and/or date(s) as Olympus UK Acquisitions may,subject to the rules of the City Code and with the consent of the Panel, decide)in respect of not less than 90 per cent. (or such lower percentage as Olympus UKAcquisitions may decide) (i) of the Gyrus Shares to which the takeover offerrelates; and (ii) of the voting rights attached to those shares, provided thatthis condition will not be satisfied unless Olympus UK Acquisitions (togetherwith its wholly-owned subsidiaries) shall have acquired or agreed to acquire(whether pursuant to the takeover offer or otherwise) Gyrus Shares carrying inaggregate more than 50 per cent. of the voting rights normally exercisable at ageneral meeting of Gyrus, including for this purpose (except to the extentotherwise agreed by the Panel) any such voting rights attaching to Gyrus Sharesthat are unconditionally allotted or issued before the takeover offer becomes oris declared unconditional as to acceptances whether pursuant to the exercise ofany outstanding subscription or conversion rights or otherwise. For thepurposes of this condition: (a) Gyrus Shares which have been unconditionally allotted shallbe deemed to carry the voting rights they will carry upon issue; (b) Gyrus Shares that cease to be held in treasury are GyrusShares to which the offer relates; and (c) the expression "Gyrus Shares to which the offer relates"shall be construed in accordance with Part 28 of the Companies Act 2006. " In addition, the Acquisition will be on the terms of, and subject to, thefurther terms set out in the Scheme Document. The Acquisition and the Scheme will be governed by English law and will besubject to the jurisdiction of the courts of England. The Acquisition willcomply with the applicable rules and regulations of the UK Listing Authority,the London Stock Exchange and the City Code. APPENDIX II BASES AND SOURCES 1. The value placed by the Acquisition on the existing issuedshare capital of Gyrus is based on 148,470,051 Gyrus Shares in issue as at 16November 2007 (being the latest practicable date prior to the date of thisannouncement). 2. The value placed by the Acquisition on the enterprise valueof Gyrus is calculated by reference to the net debt of Gyrus on 30 June 2007 of£91 million. 3. The Closing Price of Gyrus Shares on 16 November 2007, thelast Business Day prior to the date of this announcement, is taken from theDaily Official List. 4. The average closing price of Gyrus Shares for the period of6 months ended 16 November 2007 is derived from Bloomberg. 5. Unless otherwise stated, the financial information relatingto the Gyrus Group is extracted from the audited consolidated financialstatements of the Gyrus Group for the relevant financial year or from theinterim results statement of the Gyrus Group for the six months ended 30 June2007. 6. Unless otherwise stated, the financial information relatingto Olympus is extracted from the audited consolidated financial statements ofOlympus for the relevant financial year or from the interim results statement ofOlympus for the six months ended 30 September 2007. 7. An average exchange rate of 221.5 Yen per Pound Sterling hasbeen used throughout this announcement for Olympus profit and loss financialsfor the year ended 31 March 2007. An exchange rate of 234.3 Yen per PoundSterling has been used for Olympus balance sheet figures as at 30 September2007. 8. The Closing Price of Gyrus Shares on 13 November 1997, thedate of Gyrus's initial public offering, is taken from Bloomberg. 9. The market capitalisation of Gyrus of £42 million on 13November 1997 is calculated based upon the following: • The Closing Price of Gyrus Shares of 136 pence on 13 November 1997; and • 30,975,612 Gyrus Shares in issue as at 13 November 1997 (as sourcedfrom Gyrus's prospectus dated 13 November 1997). 10. The market capitalisation of Gyrus of approximately £594million on 16 November 2007 is calculated based upon the following: • The Closing Price of Gyrus Shares of 400 pence on 16 November 2007; and • 148,470,051 Gyrus Shares in issue as at 16 November 2007. APPENDIX III DETAILS OF IRREVOCABLE UNDERTAKINGS The following Directors of Gyrus have given irrevocable undertakings asdescribed in paragraph 6 of this announcement in respect of the number of GyrusShares set out below (and any further Gyrus Shares acquired by them prior to thecompletion of the Acquisition): Name Number of Gyrus Shares Brian Steer 582,865 Roy Davis 7,896 Simon Shaw 21,800 Michael Garner 20,010 Keith Krzywicki 8,000 Charles Cummings 4,500 John Rennocks 5,000 APPENDIX IV DEFINITIONS The following definitions apply throughout this announcement unless the contextrequires otherwise. "Acquisition" the proposed acquisition of the entire issued and to be issued share capital of Gyrus by Olympus to be effected by means of the Scheme (or should Olympus so elect by means of a takeover offer);"Authorisations" authorisations, orders, grants, recognitions, confirmations, consents, licences, clearances, certificates, permissions or approvals;"Bear Stearns" Bear, Stearns International Limited;"Business Day" any day other than a Saturday or a Sunday when banks generally are open in London for general banking business;"City Code" the City Code on Takeovers and Mergers;"Closing Price" the closing middle market quotation of a Gyrus Share as derived from the Daily Official List or the London Stock Exchange's website;"Companies Act" the Companies Act 1985;"Competing Proposal" (a) an offer or possible offer (in either case whether or not subject to preconditions) put forward by any person other than Olympus UK Acquisitions (or any person treated by the Panel as acting in concert with Olympus UK Acquisitions) in respect of, or for, the issued ordinary share capital of Gyrus; (b) the sale, or possible sale, of the whole or any part of the assets or undertaking of the Gyrus Group which is material in the context of the Gyrus Group; (c) any other proposal which would, if implemented, result in a change of control of Gyrus (within the meaning of the City Code); or (d) any transaction proposed by Gyrus involving a return of capital or non-routine dividend or any other distribution to shareholders of Gyrus, which is material in the context of the Gyrus Group, in each case howsoever it is proposed that such offer, proposal or transaction be implemented (whether, without limitation, by way of scheme of arrangement, merger, business combination, dual listed company structure or otherwise);"Conditions" the conditions to the making of the Acquisition (including the Scheme), which are set out in Appendix I to this announcement;"Court Hearings" the Court hearings of the applications to sanction the Scheme and to confirm the Reduction;"Court Meeting" the meeting (and any adjournment thereof) of holders of Scheme Shares convened by order of the Court under section 425 of the Companies Act to consider and vote on the Scheme;"Court Orders" the orders of the Court, granted at the Court Hearings, sanctioning the Scheme under section 425 of the Companies Act and confirming the Reduction;"Daily Official List" the daily official list of the London Stock Exchange;"Directors" or "Board" the directors or the board of directors of the relevant entity;"Effective Date" the date on which the Scheme becomes effective in accordance with its terms;"Excluded Shares" any Gyrus Shares held in treasury by Gyrus;"Extraordinary General Meeting" the extraordinary general meeting of Gyrus Shareholders (including anyor "EGM" adjournment thereof) to be convened in connection with the Acquisition;"FSA" Financial Services Authority;"Gyrus" Gyrus Group plc;"Gyrus Group" Gyrus, its subsidiaries and subsidiary undertakings;"Gyrus Shareholders" or holders of Gyrus Shares;"Shareholders""Gyrus Shares" ordinary shares of one penny each in the capital of Gyrus;"Gyrus Share Schemes" The 1997 Approved Share Option Plan, The 1997 Unapproved Share Option Plan, The Savings-Related Share Option Scheme, The US Stock Option Plan, The US Employee Stock Purchase Plan, The Qualifying Non-Employee Stock Option Plan and The 2005 Long Term Incentive Plan;"Implementation Agreement" the agreement dated 19 November 2007 between Olympus UK Acquisitions and Gyrus;"Listing Rules" listing rules made by the FSA under section 73A of the Financial Services and Markets Act 2000 as amended from time to time;"London Stock Exchange" London Stock Exchange plc;"LTIP" the 2005 Long Term Incentive Plan of Gyrus;"Meetings" the Court Meeting and the Extraordinary General Meeting;"Morgan Stanley" Morgan Stanley & Co. Limited;"Offer" should Olympus UK Acquisitions elect to effect the Acquisition by way of a takeover offer, the offer to be made by or on behalf of Olympus UK Acquisitions for all of the Gyrus Shares on the terms and subject to the conditions to be set out in the related offer document and form of acceptance including, where the context requires, any subsequent revision, variation, extension or renewal thereof;"Official List" the Official List of the UK Listing Authority;"Olympus" Olympus Corporation;"Olympus UK Acquisitions" Olympus UK Acquisitions Limited, a private limited company incorporated under the laws of England and Wales with registered number 6388810;"Olympus Group" Olympus, its subsidiaries and subsidiary undertakings;"Panel" the Panel on Takeovers and Mergers;"Perella Weinberg" Perella Weinberg Partners UK LLP;"Reduction" the proposed reduction of capital under section 137 of the Companies Act to be provided for by the Scheme;"Regulatory Conditions" the Conditions set out in paragraphs 2(a) and (c) of Appendix I and, in so far as it relates to antitrust, merger control or similar laws, paragraph 2 (b) of Appendix I;"Regulatory Information Service" any of the services set out in Appendix 3 to the Listing Rules from time to time;"Remuneration Committee" the remuneration committee of the Board of Gyrus;"Scheme" or "Scheme of the scheme of arrangement under section 425 of the Companies Act to beArrangement" proposed by Gyrus to the Gyrus Shareholders in connection with the Acquisition, with or subject to any modification, addition or condition approved or imposed by the Court and agreed by Gyrus and Olympus UK Acquisitions;"Scheme Document" the document to be addressed to, amongst others, Gyrus Shareholders containing, among other things, the Scheme, the notices of the Meetings and proxy forms in respect of the Meetings and any other document required to be sent to Gyrus Shareholders in connection with the Acquisition;"Scheme Shareholders" holders of Scheme Shares;"Scheme Shares" the Gyrus Shares: (a) in issue at the date of the Scheme Document; (b) (if any) issued after the date of the Scheme Document and prior to the voting record time in respect of the Court Meeting; and (c) (if any) issued on or after the voting record time in respect of the Court Meeting and at or prior to the confirmation by the Court of the capital reduction involved in the Scheme in respect of which the original or any subsequent holders thereof are bound by the Scheme or in respect of which the original or any subsequent holders thereof shall have agreed in writing to be bound by the Scheme, in each case other than the Excluded Shares (if any) and any Gyrus Shares held by Olympus UK Acquisitions;"Special Resolution" the special resolution to approve, amongst other things, the cancellation of the entire issued share capital of Gyrus, the alteration of Gyrus's articles of association and such other matters as may be necessary to implement the Scheme and the delisting of the Gyrus Shares;"SMBC" Sumitomo Mitsui Banking Corporation;"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland;"US" or "United States" the United States of America, its territories and possessions, any state or political subdivision of the United States of America and the District of Columbia;"US Exchange Act" the US Securities Exchange Act of 1934 as amended;"US Securities Act" the US Securities Act of 1933 as amended;"US Person" US person as defined in Regulation S under the US Securities Act or a person resident in the US, or such persons who appear, at any time, to the Directors of Gyrus to fall within the foregoing definition;"Wider Gyrus Group" the Gyrus Group and associated undertakings of Gyrus and any other body corporate, partnership, joint venture or person in which Gyrus and such undertakings (aggregating their interests) have an interest of more than 20 per cent. of the voting or equity capital or the equivalent; and"Wider Olympus Group" the Olympus Group and associated undertakings of Olympus and any other body corporate, partnership, joint venture or person in which Olympus and such undertakings (aggregating their interests) have an interest of more than 20 per cent. of the voting or equity capital or the equivalent. All references to time in this announcement are to London time unless otherwisestated. This information is provided by RNS The company news service from the London Stock Exchange

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