28th Apr 2005 07:17
Microgen PLC28 April 2005 28 April 2005 Not for release, publication or distribution in, into or from Australia, Canada,Japan or the United States Recommended Offer by UBS Limited on behalf of Microgen plc for AttentiV Systems Group plc Summary * The boards of Microgen plc ("Microgen") and AttentiV Systems Group plc ("AttentiV") announce that they have agreed the terms of a recommended offer forthe entire issued and to be issued share capital of AttentiV. The Offer will bemade by UBS Limited ("UBS") on behalf of Microgen. * Microgen's Offer will be 50.0 pence in cash and 0.3758 New Microgen Shares foreach AttentiV Share, implying a total of 81.0 pence per share (based on theaverage Closing Price of 82.50 pence per Microgen Share over the five businessdays prior to the date of this Announcement). * On this basis, the Offer values the existing issued and to be issued ordinaryshare capital of AttentiV at approximately £53.1 million. The Offer alsocontains a Mix-and-Match Election. * It also represents a premium of approximately 43.4 per cent. over the closingmiddle market price of 56.5 pence per AttentiV Share on 4 April 2005, the lastbusiness day prior to the announcement of an offer to acquire the entire issuedshare capital of AttentiV by TietoEnator and a premium of approximately 47.4 percent. to the average closing middle market price of approximately 54.97 penceper AttentiV Share for the period from 20 January 2005 (being the date on whichAttentiV issued a trading statement) to 4 April 2005, the date immediatelypreceding the date of the TietoEnator offer announcement. * Microgen has received irrevocable undertakings and non-binding letters ofintent to accept the Offer in respect of 30,063,604 AttentiV Shares,representing approximately 49.6 per cent. of AttentiV's existing issued ordinaryshare capital. * David Webber, Chief Executive of AttentiV, will be invited to join theMicrogen board as an Executive Director. Commenting on the Offer, Martyn Ratcliffe, Executive Chairman of Microgen, said: "The combination of Microgen and AttentiV will establish a significant UKsupplier of software and solutions to the financial services sector. Thisincreased scale and broader range of offerings should provide benefit toshareholders, customers and employees of the enlarged Group." Commenting on the Offer, Peter Bertram, Chairman of AttentiV, said: "Microgen has presented a strong case for acquiring our business. This offerputs a materially higher present value on AttentiV than that made by TietoEnatorand accordingly the Board of AttentiV intends to recommend shareholders toaccept it." The conditions to which the Offer will be subject are set out in Appendix I tothis Announcement. Appendix II contains the sources and bases of informationused in this Announcement. Appendix III contains the details of the irrevocableundertakings and non binding letters of intent. Appendix contains definitionsof certain expressions used in this Announcement. This summary should be read in conjunction with and is subject to the full textof the main announcement. In accordance with Rule 2.10 of the City Code on Takeovers and Mergers, Microgenconfirms that, as at close of business on 27 April 2005, it had in issue101,587,277 ordinary shares of 5 pence each ('Microgen Shares'). The International Securities Identification Number for the Microgen Shares isGB0005869531. Enquiries Microgen plc AttentiV Systems Group plc Martyn Ratcliffe, Executive Chairman Peter Bertram, Chairman Mike Phillips, Group Finance Director David Webber, Chief Executive Phone: 01753 847 122 Phone: 01582 845 000 UBS Investment Bank Hawkpoint John Woolland Paul Baines Nick Adams Graham Paton Phone: 020 7567 8000 Phone: 020 7665 4500 Financial Dynamics Giles Sanderson Ben Way Phone: 020 7831 3113 The Offer will not be made, directly or indirectly, in or into, or by the use ofthe mails of, or by any means or instrumentality (including, without limitation,telephonically or electronically) of interstate or foreign commerce of, or anyfacility of a national securities exchange of, the United States, Canada,Australia or Japan. This Announcement does not constitute an offer in or intothe United States, Canada, Australia or Japan and the Offer should not beaccepted by any such use, means, instrumentality or facility or from within theUnited States, Canada, Australia or Japan. Accordingly, this Announcement is notbeing, and must not be, mailed or otherwise distributed or sent in, into or fromthe United States, Canada, Australia or Japan and persons receiving the same(including nominees, trustees or custodians) must not distribute or send thisAnnouncement in, into or from the United States, Canada, Australia or Japan. The availability of the Offer to persons not resident in the United Kingdom maybe affected by the laws of the relevant jurisdictions in which they are locatedor to which they are subject. Persons who are not resident in the UnitedKingdom or who are subject to other jurisdictions should inform themselves of,and observe, all applicable requirements. Any person (including nominees,trustees and custodians) who would, or otherwise intends to, forward thisannouncement, Listing Particulars of Microgen, the Offer Document and the Formof Acceptance or any accompanying document to any jurisdiction outside theUnited Kingdom should refrain from doing so and seek appropriate professionaladvice before taking any action. The Microgen Shares to be issued pursuant to the Offer have not been and willnot be registered under the United States Securities Act of 1933 (as amended) orunder the securities laws of any jurisdiction of the United States, nor has aprospectus in relation to the Microgen Shares been lodged with, or registeredby, the securities commission of any province or territory of Canada or theAustralian Securities and Investments Commission or the Ministry of Japan.Accordingly, the Microgen Shares may not be offered, sold, re-sold or delivered,directly or indirectly, in or into the United States (unless they are registeredor exempt from registration), Canada, Australia or Japan or any otherjurisdiction outside the United Kingdom in which the offer of Microgen Shareswould constitute a violation of relevant laws or require registration thereof.There will be no public offer of the securities in the United States. This Announcement contains certain statements that are or may beforward-looking. These statements typically contain words such as "intends", "expects", "anticipates", "estimates" and words of similar import. By theirnature, forward-looking statements involve risk and uncertainty because theyrelate to events and depend on circumstances that will occur in the future.There are a number of factors that could cause actual results and developmentsto differ materially from those expressed or implied by such forward-lookingstatements. These factors include, but are not limited to, factors identifiedelsewhere in this Announcement as well as the following possibilities: futurerevenues are lower than expected; costs of difficulties relating to theintegration of the businesses of Microgen and AttentiV, or of other futureacquisitions, are greater than expected; expected cost savings from thetransaction or from other future acquisitions are not fully realised or realisedwithin the expected time frame; competitive pressures in the industry increase;general economic conditions or conditions affecting the relevant industries,whether internationally or in the places where Microgen and AttentiV dobusiness, are less favourable than expected; and/or conditions in the securitiesmarket are less favourable than expected. UBS Investment Bank is acting exclusively for Microgen in connection with theOffer and no one else and will not be responsible to anyone other than Microgenfor providing the protections afforded to clients of UBS Investment Bank or forproviding advice in relation to the Offer. Hawkpoint, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting exclusively as financial adviser toAttentiV in connection with the Offer and no one else and will not beresponsible to anyone other than AttentiV for providing the protections affordedto clients of Hawkpoint nor for providing advice in relation to the Offer. Not for release, publication or distribution in, into or from Australia, Canada,Japan or the United States Not for release, publication or distribution in, into or from Australia, Canada,Japan or the United States 28 April 2005 Recommended Offer by UBS Limited on behalf of Microgen plc for AttentiV Systems Group plc 1 Introduction The boards of Microgen and AttentiV announce that they have agreed the terms ofa recommended offer to be made by UBS, on behalf of Microgen for the entireissued and to be issued share capital of AttentiV. The Offer will be 50.0 pence in cash and 0.3758 New Microgen Shares for eachAttentiV Share, implying a total of 81.0 pence per share (based on the averageClosing Price of 82.50 pence per Microgen Share over the five business daysprior to the date of this Announcement) and which values the existing issued andto be issued ordinary share capital of AttentiV at approximately £53.1 million. 2 The Offer The Offer will be made on the following basis:for each AttentiV Share 50.0 pence in cash and 0.3758 New Microgen Shares The Offer values each AttentiV Share at 81.0 pence, based on the average ClosingPrice of 82.50 pence per Microgen Share over the five business days prior to thedate of this Announcement, and values the whole of the existing issued and to beissued ordinary share capital of AttentiV at approximately £53.1 million. The Offer represents a premium of approximately: (i) 14.9 per cent. to the average Closing Price per AttentiV Share overthe five business days prior to this Announcement; (ii) 43.4 per cent. over the closing middle market price of 56.5 penceper AttentiV Share on 4 April 2005, the last business day prior to theannouncement of an offer to acquire the entire issued share capital of AttentiVby TietoEnator; and (iii) 47.4 per cent. to the average closing middle market price ofapproximately 54.97 pence per AttentiV Share for the period from 20 January 2005(being the date on which AttentiV issued a trading statement) to 4 April 2005,the date immediately preceding the date of the TietoEnator offer announcement. Based on the Closing Price of 82.50 pence per Microgen Share on 27 April 2005(the last dealing day prior to the date of this Announcement), the Offer valueseach AttentiV Share at approximately 81.0 pence. In view of AttentiV's size in relation to Microgen, the Offer is conditional,inter alia, on the approval of Microgen's shareholders which is to be sought atan EGM. A circular to Microgen shareholders including notice of EGM, the Offer Documentto AttentiV Shareholders and Listing Particulars of Microgen containing furtherinformation about the Offer and AttentiV will be posted in due course. AttentiV Shareholders who validly accept the Offer may, subject to availability,elect in respect of some or all of their AttentiV Shares, under the Mix andMatch Election, to receive as consideration either: (i) all New Microgen Shares and no cash, on the basis of 0.9820 NewMicrogen Shares for each AttentiV Share in respect of which an election is made;or (ii) all cash and no New Microgen Shares, on the basis of 81.0 pence incash for each AttentiV Share in respect of which an election is made; instead of the combination of New Microgen Shares and cash provided under thebasic terms of the Offer. Under the terms of the Mix and Match Election the total amount of considerationsatisfied in Microgen Shares will not exceed 35,000,000 Microgen Shares at anytime (equivalent to £28.4 million) and, the total amount of considerationsatisfied in cash will not exceed at any time £32.8 million. The Offer will be conditional on, amongst other things, the approval ofMicrogen's shareholders and the Board of Microgen will recommend to itsshareholders to give such approval. It will also be subject to the conditionsand the further terms set out in Appendix I and those to be set out in the OfferDocument and the Form of Acceptance. 3 Recommendation The AttentiV Board, which has been so advised by Hawkpoint, considers the termsof the Offer to be fair and reasonable. In providing advice to the AttentiVBoard, Hawkpoint has taken into account the commercial assessments of theAttentiV Directors. Accordingly, the AttentiV Board unanimously recommends AttentiV Shareholders, inthe absence of a higher offer being made, to accept the Offer. 4 Support of AttentiV Shareholders and Microgen Shareholders Microgen has received irrevocable undertakings to accept (or use all reasonableendeavours to procure the acceptance of) the Offer from certain institutionaland other shareholders in respect of 20,400,129 AttentiV Shares representingapproximately 33.7 per cent. of the issued share capital of AttentiV. In addition to the irrevocable undertakings, Microgen has received non-bindingletters of intent to accept the Offer from certain institutional shareholders inrespect of a total of 9,663,475 AttentiV Shares representing approximately 16.0per cent. of the existing issued AttentiV Shares. In aggregate, therefore, Microgen has received irrevocable undertakings andnon-binding letters of intent to accept the Offer in respect of 30,063,604AttentiV Shares, representing approximately 49.6 per cent. of the existingissued AttentiV Shares. Further details of the irrevocable undertakings and non-binding letters ofintent are set out in Appendix III. The Microgen Board will vote in favour of the resolutions relating to the Offer,details of which are in paragraph 12 below and which are to be proposed atMicrogen's EGM, in respect of their own beneficial holdings of 9,824,066Microgen Shares, representing approximately 16.2 per cent. of the existingissued share capital of Microgen. 5 Finance Full acceptance of the Offer would require a maximum cash payment ofapproximately £32.8 million by Microgen, which will be funded out of Microgen'sexisting cash reserves and from committed bank facilities that will be put inplace for the purposes of the transaction. UBS is satisfied that sufficientfinancial resources are available for Microgen to satisfy the considerationpayable as a result of full acceptance of the Offer. Under the debt facilities agreements, Microgen will be in a position to declarethe Offer unconditional as to acceptances when it has received valid acceptancesof the Offer representing not less than 50.1 per cent. of the AttentiV Shares towhich the Offer relates. 6 Background to and reasons for the Offer Background Microgen has undertaken a series of successful acquisitions in the UK ITsoftware and solutions sector. Microgen's acquisition integration model hasenhanced shareholder value as evidenced by the financial results for the 2004financial year when Microgen reported adjusted earnings per share growth of 45per cent. Over the past three years, the Microgen acquisitions have had anincreasing emphasis on the financial services sector, where the Board considersthat the regulatory environment provides a market driver for potentialinvestment in IT services and solutions. The proposed transaction will provide Microgen with a significantly increasedpresence in the financial services sector and provide an opportunity to marketMicrogen's complementary software and services offerings to the AttentiVcustomer base. The combination of the two businesses will create an attractiveoffering to the UK banking and financial services sector. In addition to the potential medium term revenue benefits from the combination,Microgen anticipates being able to produce cost and efficiency synergies for theEnlarged Group as a result of the combination, including the: o elimination of duplicated PLC and group costs; o increased efficiency in business operations; o increased utilisation of consultancy resources, through cross-trainingand deployment across a broader customer base; and o increased scale of software development and support infrastructure. Prospects for the Enlarged Group The Directors of Microgen believe that the Offer will strengthen Microgen'sposition as an IT services and solutions provider in the financial servicesmarket. The Microgen Directors anticipate that the Enlarged Group will benefitfrom having an increased presence and expanded client base, with a broader rangeof software and service offerings. Benefits are also anticipated to be derivedfrom reductions in cost resulting from the combination. The benefits of the transaction are likely to be reflected in the EnlargedGroup's financial year ending 31 December 2006 and subsequent periods, with anycosts of rationalisation being reported in the second half of 2005. Any statement or inference that the transaction is expected to be earningsenhancing for the Enlarged Group should not be interpreted to mean that theearnings per share in the financial year following the Offer, or in anysubsequent period, will necessarily be greater than those for the relevantpreceding financial period. The financial effect of the AttentiV acquisition onMicrogen's earnings per share is expected to be positive in 2006. This statementshould not be taken to mean that Microgen's earnings per share for 2005 orsubsequent periods will be higher than that of prior periods. Microgen will finance the Offer by using its existing cash reserves andcommitted banking facilities. 7 Information on Microgen Although the general IT market environment in recent years has beenunpredictable, the Microgen Board anticipated this operating climate in itsplanning assumptions and operating practices. As a result, Microgen has reportedan increase in both operating profit margins and adjusted earnings per share ineach of the past four financial years, including a strong operating performancefor the year ended 31 December 2004, when operating margins on continuingoperations increased to 12.6 per cent. and adjusted diluted earnings per shareincreased by 45 per cent. This strong financial and operating performance hasbeen achieved while increasing investment in the group's software productdevelopment by 75 per cent. in 2004, which should underpin the organicdevelopment of Microgen in the future. The 2004 results affirm the effectiveness of Microgen's acquisition integrationmodel as the two transactions completed towards the end of 2003 (MMT Computingplc and Imago QA Limited) were consolidated. The acquisition of AFA Systems plcin September 2004 followed a similar post-acquisition integration model whichwas effective in reducing the cost base while improving software developmentquality and delivery. These acquisitions have provided Microgen with an expandedcustomer base and broader product and service offerings and have progressivelyincreased the proportion of the group's business being derived from thefinancial services sector. Microgen businesses The business activities of Microgen currently include: Financial Services. The Financial Services businesses are software-based, withimplementation requiring consultancy resource which is provided by Microgenstaff or associates. The group's applications include: o Banking - Financial Data Repository, Treasury and Capital MarketsTrading, Rules-based Integration and Reconciliations; o Asset Management - Front, Middle and Back Office, Multi-Manager/PooledPensions Solutions, Customer Management and Performance Measurement; and o Derivatives - Pricing, Risk Management and Back Office solutions. Solutions Division. These businesses are primarily based around consultancyservices in three business sectors: Commercial, Emergency Services andFinancial. Microgen's capabilities extend throughout the project lifecycle fromanalysis, through design and implementation to testing and acceptance andthereafter to ongoing management and support of applications. Billing Pricing and Payment Division. Microgen is a leading provider of BACSpayment software and solutions in the UK and also provides solutions for pricingand registration in the energy supply sector. Microgen also provides amulti-channel outsourced billing service which can deliver traditional andelectronic output requirements from a single billing datastream. Financial information The summary financial information for the three years ended 31 December 2004 isextracted, without material adjustment, from the financial information onMicrogen to be set out in the Listing Particulars of Microgen expected to bepublished shortly. However, AttentiV Shareholders should read the whole of theListing Particulars and should not rely on the summarised information providedhere. Year ended Year ended Year ended 31 December 31 December 31 December 2004 2003 2002 £m £m £mTurnover * 42.4 24.2 25.3Operating profit from continuing 5.1 2.3 2.0operations**Profit before tax** 5.6 2.5 2.2Net assets 62.3 54.1 43.8 * excludes exceptional items ** excluding exceptional items and goodwill amortisation As at 31 December 2004, Microgen had net cash (and cash equivalents) ofapproximately £14.6 million. The market capitalisation of Microgen based on theClosing Price of 82.50 pence per Microgen Share on 27 April 2005 (the lastdealing day prior to this Announcement) was £83.8 million. 8 Information on AttentiV AttentiV provides software solutions and associated services to the financialservices sector. These solutions cover modular software packages andindividually tailored applications, together with the support services necessaryfor successful implementation and on-going support of complete operationalsystems. AttentiV has two main product sets, Summit, which focuses on retailbanking, and Portfolio, which focuses on organisations offering asset-backedfinance products, personal loans and debt management. In addition to the sale ofthese two products, AttentiV derives revenue from the delivery of custom-builtsolutions through its tailored solutions business. Summit is a package-based, modular system, that supports the selling andadministration of mortgages, loans, savings, current accounts and associatedservices within the retail banking sector. Revenue from Summit was £22.0 millionfor the financial year ended 30 September 2004. Portfolio is a suite of softwaresolutions for organisations offering asset-backed finance products, personalloans and debt management. Revenue from Portfolio was £4.6 million for thefinancial year ended 30 September 2004. Tailored solutions are softwareapplications designed and built to perform particular specialised tasks or tooperate in specific environments and revenue for the financial year ended 30September 2004 was £5.5 million. Following a successful placing of approximately £33.3 million worth of shares,AttentiV made its debut on AIM on 31 March 2004. In the year ending 30 September2004 AttentiV's total revenue was £32.1 million and its operating profit was£3.2 million. AttentiV currently has approximately 350 employees. 9 Inducement fees arrangements AttentiV has entered into an agreement with Microgen to pay an inducement fee toMicrogen of up to an aggregate amount of 1 per cent. of the Offer value (on afully diluted basis and taking into account any sums payable under theTietoEnator inducement fee letter) in the following circumstances: a) the Offer lapses or is withdrawn and after the date of this announcementand before the lapse or withdrawal of the Offer a competing offer is announcedby TietoEnator or any subsidiary or person acting in concert with them whichvalues AttentiV at a price which is 75 pence or more per AttentiV share andsubsequently becomes or is declared unconditional in all respects; and b) the Offer lapses or is withdrawn and after the date of this announcementand before the lapse or withdrawal of the Offer a competing offer is announcedby an independent third party (being an entity other than Microgen orTietoEnator or any person acting in concert with them) which values AttentiV ata price which is 75 pence or more per AttentiV share and subsequently becomes oris declared unconditional in all respects. 10 Directors, management and employees Microgen will safeguard the existing contractual and statutory employmentrights, including pension rights, of the directors, management and employees ofAttentiV. AttentiV's employees will be given the opportunity, should they sowish, to transfer onto Microgen's standard terms and conditions in the eventthat the Offer becomes or is declared wholly unconditional. As an integral part of a larger UK-based, fully-listed company, Microgenbelieves that opportunities for AttentiV employees and management will beenhanced by the combination with Microgen. Furthermore the Microgen Boardbelieves in aligning management compensation with shareholder objectives and isto request approval from the Microgen shareholders to allocate new shareoptions specifically for AttentiV employees, below AttentiV Board level, on thembecoming part of the Enlarged Microgen Group. Upon the Offer being declared wholly unconditional David Webber, Chief Executiveof AttentiV, will be invited to join the Microgen board as an Executive Directorwhich he intends to accept. As a result of the addition of the ExecutiveDirector, the Microgen Board will review its composition in due course toobserve appropriate corporate governance. 11 AttentiV Share Option Schemes The Offer will extend to any AttentiV Shares which are unconditionally allottedor issued pursuant to the exercise of existing options under the AttentiV ShareOption Schemes while the Offer remains open for acceptance (or such earlier timeor date as Microgen may, subject to the rules of the Code, decide). If the Offer becomes or is declared unconditional in all respects, Microgenintends to make appropriate proposals in due course to holders of options underthe AttentiV Share Option Schemes (to the extent that such holders' options havenot been exercised or lapsed). 12 Shareholders' approval In view of the relative sizes of the two companies, the Offer is conditional,inter alia, upon the approval of Microgen Shareholders at the EGM to be convenedat 11 Park Street, Windsor, Berkshire SL4 1LU. Resolutions will be proposed inorder to approve and effect the Offer. Accordingly, a circular convening an EGMwill be posted to Microgen shareholders as soon as possible. The Microgen Board will vote in favour of the resolutions relating to the Offerto be proposed at the EGM in respect of their own beneficial holdings of9,824,066 Microgen Shares representing approximately 9.7 per cent. of theexisting issued share capital of Microgen. 13 Compulsory acquisition and cancellation of listing of AttentiV Shares Following the Offer becoming or being declared unconditional in all respects, ifMicrogen receives acceptances under the Offer of at least 90 per cent.,Microgen intends to use the procedures set out in sections 428 to 430F of theAct to acquire compulsorily any outstanding AttentiV Shares to which the Offerrelates. Microgen will also procure the making of an application by AttentiV tothe Alternative Investment Market of the London Stock Exchange for thecancellation of the listing of AttentiV Shares on the Alternative InvestmentMarket and to the London Stock Exchange for the cancellation of the admission totrading of AttentiV Shares. An announcement will be made following either (i) the Offer becoming or beingdeclared unconditional in all respects or (ii) the commencement of thecompulsory acquisition procedures under sections 428 to 430F of the Act inrespect of the AttentiV Shares, stating the anticipated time and date when thelisting and admission to trading will be cancelled being not less than 20business days following such event. The cancellation of the listing of AttentiV Shares will significantly reduce theliquidity and marketability of any AttentiV Shares not assented to the Offer andtheir value may be affected as a consequence. 14 Overseas Shareholders The availability of the Offer to persons not resident in the United Kingdom maybe affected by the laws of their relevant jurisdictions. Any persons who aresubject to the laws of any jurisdiction other than those of the United Kingdomshould inform themselves about and observe any applicable legal and regulatoryrequirements in their jurisdiction. It is the responsibility of any Overseas Shareholder wishing to accept the Offerto satisfy themselves as to the full observance of the laws and regulatoryrequirements of the relevant territory in connection therewith, including theobtaining of any governmental, exchange control or other consents which may berequired or the compliance with other necessary formalities needing to beobserved and the payment of any issue, transfer or other taxes or duties due insuch jurisdiction. The Offer will not be made, directly or indirectly, in or into the UnitedStates, Canada, Australia or Japan. The Microgen Shares to be issued pursuant tothe Offer have not been and will not be registered under the United StatesSecurities Act of 1933 (as amended) or under the securities laws of anyjurisdiction of the United States, nor has a prospectus in relation to theMicrogen Shares been lodged with, or registered by, the Securities Commission ofany province or territory of Canada or the Australian Securities and InvestmentsCommission or the Ministry of Japan. Further details of the bases and sources of the financial information relatingto the Offer are set out in Appendix II. 15 General The New Microgen Shares will be issued credited as fully paid and will rank infull for all dividends and other distributions made, paid or declared after thedate of issue. Such shares will rank pari passu in all respects with theexisting Microgen Shares. The Offer will be subject to the applicable requirements of the Code. The OfferDocument and Listing Particulars and the Form of Acceptance containing the fullterms and conditions of the Offer will be posted to AttentiV Shareholders (otherthan those AttentiV Shareholders to whom the Offer will not be made, describedin Paragraph 14) as soon as practicable. In deciding whether or not to acceptthe Offer in respect of their AttentiV Shares, AttentiV Shareholders should relyon the information contained in, and follow the procedures described in, theOffer Document and Form of Acceptance. Neither Microgen nor any of its directors, nor, so far as Microgen is aware, anyparty acting in concert with it, owns or controls any AttentiV Shares or holdsany options to purchase AttentiV Shares or has entered into any derivativereferenced to securities of AttentiV which remain outstanding. The conditions to and certain further terms which will relate to the Offer areset out in Appendix I. The bases and sources of certain financial information contained in thisAnnouncement are set out in Appendix II and details of the irrevocableundertakings and non binding letters of intent are set out in Appendix III.Definitions of certain expressions used in this Announcement are contained inAppendix IV. This Announcement does not constitute an offer or an invitation to purchase anysecurities. Enquires: For further information contact: Microgen plc AttentiV Systems Group plc Martyn Ratcliffe, Executive Chairman Peter Bertram, Chairman Mike Phillips, Group Finance Director David Webber, Chief Executive Phone: 01753 847 122 Phone: 01582 845 000 UBS Investment Bank Hawkpoint John Woolland Paul Baines Nick Adams Graham Paton Phone: 020 7567 8000 Phone: 020 7665 4500 Financial Dynamics Giles Sanderson Ben Way Phone: 020 7831 3113 The Offer will not be made, directly or indirectly, in or into, or by the use ofthe mails of, or by any means or instrumentality (including, without limitation,telephonically or electronically) of interstate or foreign commerce of, or anyfacility of a national securities exchange of, the United States, Canada,Australia or Japan. This Announcement does not constitute an offer in or intothe United States, Canada, Australia or Japan and the Offer should not beaccepted by any such use, means, instrumentality or facility or from within theUnited States, Canada, Australia or Japan. Accordingly, this Announcement is not being, and must not be, mailed or otherwise distributed or sent in, into orfrom the United States, Canada, Australia or Japan and persons receiving thesame (including nominees, trustees or custodians) must not distribute or sendthis Announcement in, into or from the United States, Canada, Australia orJapan. The Microgen Shares to be issued pursuant to the Offer have not been and willnot be registered under the United States Securities Act of 1933 (as amended) orunder the securities laws of any jurisdiction of the United States, nor has aprospectus in relation to the Microgen Shares been lodged with, or registeredby, the securities commission of any province or territory of Canada or theAustralian Securities and Investments Commission or the Ministry of Japan.Accordingly, the Microgen Shares may not be offered, sold, re-sold or delivered,directly or indirectly, in or into the United States (unless they are registeredor exempt from registration), Canada, Australia or Japan or any otherjurisdiction outside the United Kingdom in which the offer of Microgen Shareswould constitute a violation of relevant laws or require registration thereof.There will be no public offer of the securities in the United States. This Announcement contains certain statements that are or may beforward-looking. These statements typically contain words such as "intends","expects", "anticipates", "estimates" and words of similar import. By theirnature, forward-looking statements involve risk and uncertainty because theyrelate to events and depend on circumstances that will occur in the future.There are a number of factors that could cause actual results and developmentsto differ materially from those expressed or implied by such forward-lookingstatements. These factors include, but are not limited to, factors identifiedelsewhere in this Announcement as well as the following possibilities: futurerevenues are lower than expected; costs of difficulties relating to theintegration of the businesses of Microgen and AttentiV, or of other futureacquisitions, are greater than expected; expected cost savings from thetransaction or from other future acquisitions are not fully realised or realisedwithin the expected time frame; competitive pressures in the industry increase;general economic conditions or conditions affecting the relevant industries,whether internationally or in the places where Microgen and AttentiV dobusiness, are less favourable than expected; and/or conditions in the securitiesmarket are less favourable than expected. UBS Investment Bank is acting exclusively for Microgen in connection with theOffer and no one else and will not be responsible to anyone other than Microgenfor providing the protections afforded to clients of UBS Investment Bank, or forproviding advice in relation to the Offer. Hawkpoint, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting exclusively as financial adviser toAttentiV in connection with the Offer and no one else and will not beresponsible to anyone other than AttentiV for providing the protections affordedto clients of Hawkpoint nor for providing advice in relation to the Offer. Rule 8 Notice Under the provisions of Rule 8.3 of the City Code on Takeovers and Mergers (the'Code'), any person who, alone or acting together with any other person(s)pursuant to any agreement or any understanding (whether formal or informal) toacquire or control securities of Microgen or AttentiV, owns or controls, orbecomes the owner or controller, directly or indirectly, of one per cent. ormore of any class of securities of Microgen or AttentiV is required to notify aRegulatory Information Service (as specified in the Listing Rules of the UKListing Authority) and the Panel on Takeovers and Mergers (the 'Panel'), by nolater than 12.00 noon (London time) on the London business day following thedate of the relevant transaction, of every dealing in such securities of thatcompany (or in any option in respect of, or derivative referenced to, any suchsecurities) from and including today's date until any offer becomes or isdeclared unconditional as to acceptances or lapses or is otherwise withdrawn.Under the provisions of Rule 8.1 of the Code, all dealings in relevantsecurities of Microgen or AttentiV by Microgen or AttentiV, or by any of their'associates' (within the meaning of the Code) must also be disclosed. If you are in any doubt as to the application of Rule 8 to you, please contactan independent financial adviser authorised under the Financial Services andMarkets Act 2000, consult the Panel's website at www.thetakeoverpanel.org.uk orcontact the Panel on telephone number +44 20 7638 0129; fax +44 20 7236 7013. APPENDIX I Conditions to and certain further terms of the Offer Part A: Conditions of the Offer The Offer, which will be made by UBS on behalf of Microgen, will comply with therules and regulations of the Financial Services Authority, the London StockExchange and the City Code. In addition, the Offer will be governed by Englishlaw and will be subject to the jurisdiction of the courts of England and to theterms and conditions set out below, in the Offer Document and in the Form ofAcceptance. The Offer will be subject to the following conditions: (a) valid acceptances of the Offer being received (and not, wherepermitted, withdrawn) by not later than 3.00 p.m. (London time) on the firstclosing date of the Offer (or such later time(s) and/or date(s) as Microgen may,subject to the rules of the City Code or with the consent of the Panel, decide)in respect of not less than 55 per cent. (or such lesser percentage as Microgenmay decide) in nominal value of the AttentiV Shares to which the Offer relates,provided that, unless agreed by the Panel, this condition will not be satisfiedunless Microgen and/or any of its wholly-owned subsidiaries shall have acquiredor agreed to acquire (whether pursuant to the Offer or otherwise) directly orindirectly AttentiV Shares carrying in aggregate more than 50 per cent. of thevoting rights then normally exercisable at a general meeting of AttentiV,including for this purpose (to the extent, if any, required by the Panel) anysuch voting rights attaching to any AttentiV Shares that are unconditionallyallotted or issued before the Offer becomes or is declared unconditional as toacceptances, whether pursuant to the exercise of any outstanding subscription orconversion rights or otherwise and, for the purpose of this condition: (i) the expression "AttentiV Shares to which the Offer relates"shall be construed in accordance with sections 428 to 430F inclusive of the Act; (ii) AttentiV Shares which have been unconditionally allotted butnot issued shall be deemed to carry the voting rights which they will carry uponbeing entered in the register of members of AttentiV; and (iii) valid acceptances shall be deemed to have been received inrespect of AttentiV Shares which are treated for the purposes of section 429(8)of the Act as having been acquired or contracted to be acquired by Microgen byvirtue of acceptances of the Offer; (b) the admission to the Official List of the New Microgen Sharesissued pursuant to the Offer becoming effective in accordance with the ListingRules and the admission of such shares to trading becoming effective inaccordance with the Admission and Disclosure Standards of the London StockExchange or (subject to the consent of the Panel) the UK Listing Authorityagreeing to admit such shares to the Official List and the London Stock Exchangeagreeing to admit such shares to trading subject only to (i) the allotment ofsuch shares and/or (ii) the Offer becoming or being declared unconditional inall respects; (c) the passing at an extraordinary general meeting of Microgenshareholders (or any adjournment thereof) of the resolution necessary for theapproval and implementation of the Offer and a separate resolution required toincrease the authorised share capital of Microgen and to provide the authorityto its directors to allot shares for the purposes of the Offer; (d) insofar as the merger provisions of the Enterprise Act 2002 maybe applicable to any aspect of the proposed acquisition of AttentiV by Microgen,the Office of Fair Trading not indicating that it intends to refer the proposedacquisition of AttentiV by Microgen (its implementation or any matter of mattersarising therefrom) to the Competition Commission; (e) no Third Party having intervened in any way and there notcontinuing to be outstanding any statute, regulation or order of any Third Partyin each case which would or might reasonably be expected (in any case to anextent which is material in the context of the Wider Microgen Group or the WiderAttentiV Group, as the case may be, in each case, taken as a whole) to: (i) make the Offer or the acquisition or proposed acquisition byMicrogen or any other member of the Wider Microgen Group of any shares orcontrol of AttentiV or any other member of the Wider AttentiV Group, void,unenforceable and/or illegal in any relevant jurisdiction or otherwise directlyor indirectly restrain, restrict, prohibit, prevent, delay or otherwiseinterfere with the implementation thereof, or impose material additionalconditions or obligations with respect to the Offer or such acquisition, orotherwise challenge, impede or hinder the Offer or its implementation, orrequire amendment to the terms of the Offer or the acquisition or proposedacquisition of any AttentiV Shares, or the acquisition of control of AttentiV byMicrogen; (ii) require, prevent, or delay the divestiture or alter theterms of any proposed divestiture by Microgen or any other member of the WiderMicrogen Group or by AttentiV or any other member of the Wider AttentiV Group ofall or any material part of their respective businesses, assets or properties orimpose any limitation on the ability of any of them to conduct any of theirrespective businesses or to own or control any of their respective assets orproperties or any material part thereof; (iii) limit or delay the ability of any member of the WiderMicrogen Group to acquire or to hold or to exercise effectively, directly orindirectly, all or any rights of ownership in respect of the AttentiV Shares; (iv) except pursuant to Part XIIIA of the Act, require any member ofthe Wider Microgen Group or of the Wider AttentiV Group to acquire, or to offerto acquire, any shares or other securities (or the equivalent) in any member ofthe Wider AttentiV Group owned by any third party; or (v) limit the ability of any member of the Wider Microgen Group orof the Wider AttentiV Group to integrate or co-ordinate its business, or anypart of it, with the businesses or any part of the businesses of any othermember of the Wider Microgen Group or of the Wider AttentiV Group, and all applicable waiting and other time periods during which any Third Partycould intervene in such a way under the laws of any relevant jurisdiction havingexpired, lapsed or been terminated; (f) all necessary notifications and filings having been made,all regulatory and statutory obligations in any relevant jurisdiction havingbeen complied with, all appropriate waiting and other time periods (includingany extensions of such waiting and other time periods) under any applicablelegislation or regulations of any relevant jurisdiction having expired, lapsedor been terminated in each case in respect of the Offer or the acquisition orproposed acquisition of any AttentiV Shares or control of AttentiV or any othermember of the Wider AttentiV Group by any member of the Wider Microgen Groupexcept where the failure to make any such notification or filing, or comply withany such obligation, or the fact that any such period has not expired, lapsed orbeen terminated, individually or in the aggregate, is not likely to have amaterially adverse effect on the Wider Microgen Group taken as a whole; (g) all authorisations and determinations necessary or appropriatein any relevant jurisdiction for or in respect of the Offer or the acquisitionor proposed acquisition of any AttentiV Shares or control of AttentiV or anyother member of the Wider AttentiV Group by any member of the Wider MicrogenGroup having been obtained, in terms and in a form reasonably satisfactory toMicrogen, from all relevant Third Parties or (without prejudice to thegenerality of the foregoing) from any persons or bodies with whom any member ofthe Wider AttentiV Group has entered into contractual arrangements that arematerial in the context of the Wider AttentiV Group taken as a whole and suchauthorisations and determinations remaining in full force and effect and therebeing no notice of any intention to revoke or not renew or materially suspend,restrict or modify any of the same in any such case insofar as is material inthe context of the Wider Microgen Group or Wider AttentiV Group, as the case maybe, in each case, taken as a whole; (h) except as publicly announced by AttentiV, or as fairlydisclosed to Microgen or its advisers by or on behalf of AttentiV in connectionwith the Offer prior to 28 April 2005, there being no provision of anyagreement, arrangement, licence or other instrument to which any member of theWider AttentiV Group is a party, or by or to which any such member or any of itsassets is or are or may be bound, entitled or subject or any circumstance,which, in each case as a consequence of the Offer or the acquisition or proposedacquisition of any AttentiV Shares or control of AttentiV or any other member ofthe Wider AttentiV Group by any member of the Wider Microgen Group or otherwise,would or might reasonably be expected to result in (in any case to an extentthat is or would be material in the context of the Wider AttentiV Group taken asa whole): (i) any monies borrowed by, or any other indebtedness or liabilities(actual or contingent) of, or any grant available to, any such member being orbecoming repayable or capable of being declared repayable immediately or priorto its stated maturity, or the ability of any such member to borrow moneys orincur any indebtedness being withdrawn or inhibited; (ii) any such agreement, arrangement, licence or other instrumentbeing terminated or materially and adversely modified or affected or any onerousobligation or liability arising or any adverse action being taken or arisingthereunder; (iii) any member of the Wider AttentiV Group ceasing to be able tocarry on its business under any name under which it currently does so; (iv) any asset or interest of any member of the Wider AttentiV Groupbeing or falling to be disposed of, in each case otherwise than in the ordinarycourse of business; (v) the creation or enforcement of any mortgage, charge or othersecurity interest over the whole or any material part of the business, propertyor assets of any such member of the Wider AttentiV Group or any such mortgage,charge or other security interest (whenever created, arising or having arisen)becoming enforceable; (vi) the creation of any liability (actual or contingent) by anymember of the Wider AttentiV Group otherwise than in the ordinary course ofbusiness; or (vii) the financial or trading position of any member of the WiderAttentiV Group being prejudiced or adversely affected; (i) since 30 September 2004, save as publicly announced, or asfairly disclosed to Microgen or its advisers by or on behalf of AttentiV inconnection with the Offer prior to 28 April 2005, no member of the WiderAttentiV Group having: (i) (save as between AttentiV and, on a pre-emptive basis, anymember of the Wider AttentiV Group or upon the exercise of rights to subscribefor AttentiV Shares pursuant to the exercise of options granted under any of theAttentiV Share Option Schemes on or prior to 30 September 2004 or details ofwhich have been disclosed to Microgen or its advisers in connection with theOffer prior to 28 April 2005) issued or agreed to issue or authorised the issueof additional shares of any class, or of securities convertible into, or rights,warrants or options to subscribe for or acquire, any such shares or convertiblesecurities or redeemed, purchased or repaid any of its own shares or othersecurities or reduced or made any other change to any part of its share capital; (ii) recommended, declared, paid or made any bonus, dividend orother distribution whether payable in cash or otherwise (other than to AttentiVor a wholly-owned subsidiary of AttentiV); (iii) save for transactions between members of the AttentiV Group,acquired or disposed of or transferred, mortgaged or charged or created anysecurity interest over (in each case other than in the ordinary course ofbusiness) any assets or any rights, title or interest in any asset (includingshares and trade investments), which, in each case, is material in the contextof the Wider AttentiV Group taken as a whole, or merged with or demerged anybody corporate or authorised or announced any intention to propose any suchmerger, demerger, acquisition, disposal, transfer, mortgage, charge or securityinterest (other than in the ordinary course of business); (iv) made or authorised or announced an intention to propose anymaterial change in its loan capital or issued, authorised or proposed the issueof any material debentures; (v) (save in the ordinary course of business and/or fortransactions between members of the AttentiV Group) incurred or increased anyindebtedness or liability (actual or contingent) which is material in thecontext of the Wider AttentiV Group taken as a whole; (vi) entered into or varied or authorised the entry into orvariation of any agreement, transaction, arrangement or commitment (whether inrespect of capital expenditure or otherwise) which: (A) is of a long-term, onerous or unusual nature or magnitude orwhich involves or could involve an obligation of such a nature or magnitude; or (B) could restrict the business of any member of the Wider AttentiVGroup, and in any such case which is material in the context of the Wider AttentiVGroup taken as a whole; (vii) entered into or varied materially the terms of any contract,agreement or arrangement with any of the Directors of AttentiV or (in a mannerwhich is material in the context of the Wider AttentiV Group taken as a whole)any other director or senior executive of any member of the Wider AttentiVGroup; (viii) waived or compromised any claim other than in the ordinarycourse of business in any case in a manner or on terms that are material in thecontext of the Wider AttentiV Group taken as a whole; (ix) taken any corporate action or had any legal proceedingsinstituted or threatened against it, or petition presented or order (in eachcase which is not discharged within 21 days) made, in each case for itswinding-up (voluntary or otherwise), dissolution or reorganisation or for theappointment of a receiver, administrator, administrative receiver, trustee orsimilar officer of all or any material part of its assets or revenues which inany case is material in the context of the Wider AttentiV Group taken as awhole; (x) been unable, or admitted in writing that it is unable, to payits debts or having stopped or suspended (or threatened to stop or suspend)payment of its debts generally or ceased or threatened to cease carrying on allor a substantial part of its business, in any case which is likely to have amaterial adverse effect on the Wider AttentiV Group taken as a whole; (xi) made any alteration to the memorandum or articles ofassociation of AttentiV; or (xii) entered into any contract, commitment, agreement orarrangement or passed any resolution with respect to, or announced an intentionto effect, any of the transactions, matters or events referred to in thiscondition (i); and for the purpose of this condition "material" shall mean material in thecontext of the Wider AttentiV Group taken as a whole; (j) since 30 September 2004, and save as publicly announced, oras fairly disclosed to Microgen or its advisers by or on behalf of AttentiV inconnection with the Offer prior to 28 April 2005: (i) no adverse change or deterioration having occurred in thebusiness, assets, financial or trading position or profits or prospects ofAttentiV or any other member of the Wider AttentiV Group that is material in thecontext of the Wider AttentiV Group taken as a whole; and (ii) no litigation or arbitration proceedings, prosecution orother legal proceedings having been instituted, announced, implemented orthreatened in writing by or against or remaining outstanding against or inrespect of any member of the Wider AttentiV Group or to which any member of theWider AttentiV Group is a party (whether as claimant, defendant or otherwise)the effect of which is adverse to any member of the Wider AttentiV Group to anextent that in any case is material in the context of the Wider AttentiV Grouptaken as a whole; (k) save as fairly disclosed to Microgen or its advisers by or onbehalf of AttentiV in connection with the Offer prior to 28 April 2005, Microgennot having discovered: (i) that any financial, business or other informationconcerning AttentiV or the Wider AttentiV Group that has been disclosed at anytime by or on behalf of any member of the Wider AttentiV Group whether publicly,or to any member of the Wider Microgen Group, is misleading, contains anymisrepresentation of fact or omits to state a fact necessary to make theinformation contained therein not misleading and which was not subsequentlycorrected before 28 April 2005 by disclosure either publicly or otherwise toMicrogen, which in any case itself or together with other factors is materialand adverse to the financial or trading position of the Wider AttentiV Grouptaken as a whole; or (ii) that any member of the Wider AttentiV Group is subject toany liability (actual or contingent) that has not been disclosed to any memberof the Wider Microgen Group or publicly announced prior to 28 April 2005, andwhich in any case is material in the context of the Wider AttentiV Group takenas a whole; (l) save as publicly announced or as fairly disclosed toMicrogen or its advisers by or on behalf of AttentiV in connection with theOffer prior to 28 April 2005, Microgen not having discovered that: (i) any past or present member of the Wider AttentiV Group hasnot complied with all applicable legislation or regulations of any jurisdictionwith regard to the storage, disposal, discharge, spillage, leakage or emissionof any waste or hazardous substance or any substance likely to impair theenvironment or harm human health, or otherwise relating to environmental mattersor the health and safety of any person, or that there has otherwise been anysuch use, treatment, handling, storage, transport, release, disposal, discharge,spillage, leakage or emission (whether or not this constituted a non-complianceby any person with any legislation or regulations and wherever the same may havetaken place) which, in any case, would be likely to give rise to any liability(whether actual or contingent) or cost on the part of any member of the WiderAttentiV Group which in any case is material in the context of the WiderAttentiV Group taken as a whole; or (ii) there is, or is reasonably likely to be, any liability(whether actual or contingent) to make good, repair, reinstate or clean up anyproperty now or previously owned, occupied or made use of by any past or presentmember of the Wider AttentiV Group, or in which any such member may now orpreviously have had or be deemed to have or have had an interest, or any otherproperty or any controlled waters under any environmental legislation,regulation, notice, circular or order or other lawful requirement of anyrelevant authority or Third Party or otherwise which in any case is material inthe context of the Wider AttentiV Group taken as a whole. For the purposes of these conditions: (a) "Third Party" means any government, government department orRelated Shares:
AptitudeAterian Plc