28th Oct 2005 07:01
Genus PLC28 October 2005 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTOTHE EXCLUDED TERRITORIES FOR IMMEDIATE RELEASE 28 October 2005 Recommended Cash Offer by Bridgewell Securities Limited on behalf of Genus plc to acquire the entire issued and to be issued share capital of Sygen International plc Summary The boards of Sygen and Genus are pleased to announce that they have reachedagreement on the terms of a recommended cash offer to be made by Bridgewell onbehalf of Genus to acquire the Existing and to be Issued Sygen Share Capital for63.2 pence per Sygen Share in cash. The Offer values the Existing Sygen ShareCapital at approximately £187 million. Sygen Shareholders will remain entitled to receive the proposed net finaldividend in respect of the year ended 30 June 2005 of 0.8 pence per Sygen Sharewhich the Sygen Board has recommended and which (subject to the passing of theFinal Dividend Resolution) will be paid on 25 November 2005 to SygenShareholders on the register on 28 October 2005. The Offer is classified by theAIM Rules as a reverse takeover and is therefore conditional upon, amongst otherthings, approval by Genus Shareholders. Under the terms of the Offer, Sygen Shareholders will receive 63.2 pence perSygen Share in cash. In addition, Sygen Shareholders will remain entitled toreceive the 0.8 pence Dividend. The Offer Price, when aggregated with the rightto receive the 0.8 pence Dividend, represents a premium of approximately: • 55.4 per cent. over the average closing price of 41.20 penceper Sygen Share during the twelve months up to and including 11 October 2005,being the last business day prior to the date on which Sygen announced that ithad received an approach in relation to a possible offer; • 36.9 per cent. over the closing price of 46.75 pence per SygenShare on 11 October 2005, being the last business day prior to the date on whichSygen announced that it had received an approach in relation to a possibleoffer; and • if the value of the net cash position of Sygen on a per sharebasis as at 30 June 2005 is excluded, 45.1 per cent. over the closing price(also adjusted for such exclusion) of 38.22 pence per Sygen Share on 11 October2005, being the last business day prior to the date on which Sygen announcedthat it had received an approach in relation to a possible offer. Genus will fund the consideration payable under the Offer through a proposedplacing of 16,923,080 new Genus Shares at 325 pence per share to raiseapproximately £55 million (before expenses) and new bank facilities totalling£180 million provided by Barclays. The Placing has been fully underwritten byBridgewell and Panmure Gordon. Bridgewell is satisfied that sufficientfinancial resources are available to Genus to satisfy the maximum cashconsideration that would be payable on full acceptance of the Offer. The Sygen Directors, who have been so advised by CSFB, consider the terms of theOffer to be fair and reasonable. In providing its advice to the Sygen Directors,CSFB has taken into account the commercial assessments of the Sygen Directors.The Sygen Directors intend unanimously to recommend that Sygen Shareholdersaccept the Offer, as they have irrevocably undertaken to do in respect of theirown beneficial holdings of 2,283,496 Sygen Shares, representing approximately0.77 per cent. of the Existing Sygen Share Capital. In addition, certain Sygen Shareholders have irrevocably undertaken to acceptthe Offer in respect of, in aggregate, 13,268,000 Sygen Shares, representingapproximately 4.5 per cent. of the Existing Sygen Share Capital. Genus has alsoreceived non-binding letters of intention to accept the Offer in respect of, inaggregate, 60,442,841 Sygen Shares, representing approximately 20.5 per cent. ofthe Existing Sygen Share Capital. Sygen is a world leader in applying quantitative genetics and biotechnology toanimal breeding. Sygen's technology, products and services enable pig andshrimp producers and farmers to enhance meat quality and improve efficiency inthe production of meat animals. Sygen applies a combination of quantitativegenetics and biotechnology to animal breeding, which is applicable acrossseveral livestock species, and is currently applied with respect to pigs andshrimps. For the year ended 30 June 2005, Sygen reported revenues of £134.4million, earnings before interest, depreciation and amortisation and exceptionalitems of £15.4 million and an operating profit before exceptional items of £8.9million. Genus is a world leading bovine genetics company. At the heart of Genus'business lies a research and development programme with an annual cost ofapproximately £8 million per year. Laboratory bio-science is used to target andaugment traditional mating and selection programmes, testing 400 new bulls eachyear. Genus applies biotechnology to the natural breeding of beef and dairycattle, creating genetic improvement without the use of genetic modification anddistributes frozen beef and dairy semen for both tropical and temperateagricultures from its six studs located across four continents to farmers inapproximately 70 countries. The Genus Group sells through a network of retailstaff and exclusive agents and distributors. Farmers use the improved geneticspurchased to breed elite progeny and so add value by increasing the output androbustness of their herds. Through organic growth and by acquisition, Genus significantly expanded itsbovine genetics business. The acquisition of ABS Global Inc. in 1999 resultedin the Genus Group achieving a step change in the size of its core geneticsdivision. The Genus Directors believe that a combination of the two businesses will bringeconomies of scale to the Enlarged Group and enable a more efficient researchprogramme, benefiting both customers and the Enlarged Group alike. Furthermore,the Genus Board believes that there is merit in creating a larger core businesswith a global presence in complementary markets. The Genus Directors believe that the acquisition of Sygen represents anopportunity to: • benefit from economies of scale, particularly in the mature bovine andporcine markets, which should impact favourably on costs; • reduce dependency on one breed of animal and mitigate the associated risks; • combine research and development programmes to yield greater growthpotential to be a world leader in animal genetics research and to strengthen thepursuit of a step change in the size of the business brought about through thecommercial application of bio-science; • benefit from Sygen's experience in selling to food processors; and • increase efficiency and improve profitability and cash flow. Commenting on the Offer, John Hawkins, Chairman of Genus, said: "We believe that this acquisition is an exciting opportunity to create a worldleading animal genetics company. Much of the science and technology of Genusand Sygen is complimentary. As the customer bases do not overlap all the saleswill be incremental. In combination, we believe that the Enlarged Group willhave an improved chance of making a technological breakthrough. Also, theincreased diversity will allow commercialisation across more species. Thebenefits of cross-fertilisation between the business operations will add to thecompany's efficiency and competitive edge. We are pleased that the Sygen Board intends unanimously to recommend the Offerand we commend it to the shareholders of both companies." Also commenting on the Offer, Brian Baldock, Chairman of Sygen, said: "We firmly believe that this offer is in the interests of Sygen's shareholders,customers and employees. For several years, Sygen's management has pursued aclear and consistent growth strategy which offers considerable long termpotential. However, this potential, and in particular the implementation of ourmulti-species strategy, is likely to be realised more quickly in conjunctionwith Genus. For our shareholders, this cash offer delivers both certainty and asubstantial premium." Enquiries: Genus 01256 347100John Hawkins, ChairmanRichard Wood, Chief Executive OfficerDavid Timmins, Finance Director Bridgewell (Financial Adviser and Nominated Adviser to Genus) 0207 003 3000Greg AldridgeFred Ward Panmure Gordon (Broker to Genus) 0207 459 3600Edward FarmerMark Lander Buchanan Communications (PR Adviser to Genus) 0207 466 5000Charles RylandSuzanne Brocks Sygen 01865 822 275Brian Baldock, ChairmanPhillip David, Chief ExecutiveJohn Adams, Finance Director CSFB (Exclusive Financial Adviser to Sygen) 0207 888 8888Richard ProbertWilliam Mansfield JPMorgan Cazenove (Corporate Broker to Sygen) 0207 588 2828David ClasenBronson Albery WMC Communications (PR Adviser to Sygen) 0207 930 9030David Wynne-MorganAlex Glover This summary should be read in conjunction with the full text of the followingannouncement. Appendix III to the following announcement contains definitions ofcertain terms used in this summary and the following announcement. Bridgewell, which is authorised and regulated in the United Kingdom by theFinancial Services Authority for investment business activities, is acting asfinancial adviser to Genus in connection with the Offer and other mattersreferred to in the following announcement and no one else and will not beresponsible to anyone other than Genus for providing the protections afforded toclients of Bridgewell nor for providing advice in relation to the Offer, or thecontents of this summary or the following announcement or any arrangementreferred to herein. Panmure Gordon, which is authorised and regulated in the United Kingdom by theFinancial Services Authority for investment business activities, is acting forGenus and no one else and will not be responsible to anyone other than Genus forproviding the protections afforded to customers of Panmure Gordon nor forproviding advice in relation to the Offer, or the contents of this summary orthe following announcement or any arrangement referred to herein. CSFB, which is authorised and regulated in the United Kingdom by the FinancialServices Authority for investment business activities, is acting as financialadviser to Sygen in connection with the Offer and no one else, and will not beresponsible to anyone other than Sygen for providing the protections afforded toclients of CSFB nor for providing advice in relation to the Offer, or thecontents of this summary or the following announcement or any arrangementreferred to herein. JPMorgan Cazenove, which is authorised and regulated in the United Kingdom bythe Financial Services Authority for investment business activities, is actingas exclusive corporate broker to Sygen, and has also provided financial advice,in connection with the Offer and no one else and will not be responsible toanyone other than Sygen for providing the protections afforded to clients ofJPMorgan Cazenove nor for providing advice in relation to the Offer or thecontents of this summary or the following announcement or any arrangementreferred to herein. The release, publication or distribution of this announcement in jurisdictionsother than the United Kingdom may be restricted by law and therefore persons insuch jurisdictions into which this announcement is released, published ordistributed should inform themselves about, and observe, such restrictions. Anyfailure to comply with the restrictions may constitute a violation of thesecurities laws of any such jurisdiction. The Offer is not being made, directly or indirectly, in or into, or by use ofthe mails of, or by any means or instrumentality (including, without limitation,facsimile transmission, internet, email, telex or telephone) of interstate orforeign commerce of, or any facility of a national state or other securitiesexchange of, the Excluded Territories and subject to certain exceptions cannotbe accepted by any such use, means instrumentality or facility or from theExcluded Territories. Neither the Offer nor the Placing constitutes an offer of securities for sale,or the solicitation of an offer to buy, securities in the United States and thePlacing Shares to be issued pursuant to the Placing have not been and will notbe registered under the United States Securities Act of 1933, or under the lawsof any state, district or other jurisdiction of the Excluded Territories and noregulatory clearances in respect of Placing Shares have been or will be, appliedfor in any jurisdiction. Accordingly, unless an exemption under the USSecurities Act of 1933 or other relevant securities laws is applicable, thePlacing Shares are not being, and may not be offered, sold, resold, delivered ordistributed, directly or indirectly, in or into any of the Excluded Territoriesor to, or for the account or benefit of, any person resident in any of theExcluded Territories. This summary and the following announcement contain a number of forward-lookingstatements relating to Genus and Sygen with respect to, among others, thefollowing: financial condition; results of operations; the business of theEnlarged Group; future benefits; and management plans and objectives. Genus andSygen consider any statements that are not historical facts as "forward-lookingstatements". They involve a number of risks and uncertainties that could causeactual results to differ materially from those suggested by the forward-lookingstatements. Important factors that could cause actual results to differmaterially from estimates or forecasts contained in the forward-lookingstatements include, among others, the following possibilities: future revenuesare lower than expected; costs or difficulties relating to the integration ofthe businesses of Genus and Sygen, or of other future acquisitions, are greaterthan expected; expected cost savings from the transaction or from other futureacquisitions are not fully realised or realised within the expected time frame;competitive pressures in the industry increase; general economic conditions orconditions affecting the relevant industries, whether internationally or in theplaces where Genus and Sygen conduct business are less favourable than expected,and/or conditions in the securities market are less favourable than expected. This summary and the following announcement do not constitute an offer to sellor an invitation to purchase any securities or the solicitation of an offer topurchase any securities, pursuant to the Offer or otherwise. The Offer will bemade solely by the Offer Document and, in the case of Sygen Shares incertificated form, the Form of Acceptance accompanying the Offer Document, whichwill contain the full terms and conditions of the Offer, including details ofhow the Offer may be accepted. Sygen Shareholders are advised to read the OfferDocument and accompanying Form of Acceptance when they are sent to them becausethey will contain important information. Under the provisions of Rule 8.3 of the City Code, any person who, alone oracting together with any other person(s) pursuant to an agreement orunderstanding (whether formal or informal) to acquire or control relevantsecurities of Sygen, owns or controls, or becomes the owner or controller of,directly or indirectly, one per cent. or more of any class of securities ofSygen is required to disclose, by not later than 12.00 noon (London time) on theLondon business day following the date of the relevant transaction, dealings insuch securities (or in any option in respect of, or derivative referenced to,any such securities) during the period to the date on which the Offer becomes oris declared unconditional as to acceptances or lapses or is otherwise withdrawn. Under the provisions of Rule 8.1 of the City Code, all dealings in relevantsecurities of Sygen by Genus or Sygen, or by any of their respective"associates" (within the meaning of the City Code), must also be disclosed. With effect from 7 November 2005, the definition of "interest in securities" inRule 8 will in certain circumstances include contracts for differences (andother cash settled derivatives) and will apply to any person who is interestedin 1% or more of any class of relevant securities of Sygen. The timing forpublic disclosure of such interests will be extended to 3.30 p.m. (London time)on the London business day following the date of the relevant transaction. 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. NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTOTHE EXCLUDED TERRITORIES FOR IMMEDIATE RELEASE 28 October 2005 Recommended Cash Offer by Bridgewell Securities Limited on behalf of Genus plc to acquire the entire issued and to be issued share capital of Sygen International plc 1. Introduction The boards of Sygen and Genus are pleased to announce that they have reachedagreement on the terms of a recommended cash offer to be made by Bridgewell onbehalf of Genus to acquire the Existing and to be Issued Sygen Share Capital for63.2 pence per Sygen Share in cash. The Offer values the Existing Sygen ShareCapital at approximately £187 million. Sygen Shareholders will remain entitled to receive the proposed net finaldividend in respect of the year ended 30 June 2005 of 0.8 pence per Sygen Sharewhich the Sygen Board has recommended and which (subject to the passing of theFinal Dividend Resolution) shall be paid on 25 November 2005 to SygenShareholders on the register on 28 October 2005. The Offer is classified by theAIM Rules as a reverse takeover of Genus and is therefore conditional upon,amongst other things, approval by Genus Shareholders. Genus has received irrevocable undertakings to accept the Offer in respect of,in aggregate, 15,551,496 Sygen Shares, representing approximately 5.27 per cent.of the Existing Sygen Share Capital and non-binding letters of intention toaccept the Offer in respect of, in aggregate, 60,442,841 Sygen Shares,representing approximately 20.5 per cent. of the Existing Sygen Share Capital.Further details of such irrevocable undertakings and letters of intention areset out in this announcement and in the Offer Document which is expected to beposted to Sygen Shareholders within the next ten days. 2. The Offer The Offer will be made on and subject to the terms and conditions set out inAppendix I to this announcement and the further terms and conditions set out inthe Offer Document expected to be posted to Sygen Shareholders within the nextten days, and in the case of Sygen Shares held in certificated form, the Form ofAcceptance which will accompany the Offer Document. The Offer is for the Existing and to be Issued Sygen Share Capital and is beingmade on the following basis: for each Sygen Share 63.2 pence in cash Under the terms of the Offer, Sygen Shareholders will receive 63.2 pence perSygen Share in cash. In addition, Sygen Shareholders will remain entitled toreceive the 0.8 pence Dividend. The Offer Price, when aggregated with the rightto receive the 0.8 pence Dividend, represents a premium of approximately: • 55.4 per cent. over the average closingprice of 41.20 pence per Sygen Share during the twelve months up to andincluding 11 October 2005, being the last business day prior to the date onwhich Sygen announced that it had received an approach in relation to a possibleoffer; • 36.9 per cent. over the closing price of46.75 pence per Sygen Share on 11 October 2005, being the last business dayprior to the date on which Sygen announced that it had received an approach inrelation to a possible offer; and • if the value of the net cash position ofSygen on a per share basis as at 30 June 2005 is excluded, 45.1 per cent. overthe closing price (also adjusted for such exclusion) of 38.22 pence per SygenShare on 11 October 2005, being the last business day prior to the date on whichSygen announced that it had received an approach in relation to a possibleoffer. The Offer, which is classified by the AIM Rules as a reverse takeover of Genus,is conditional, amongst other things, on (i) Genus Shareholders resolving toapprove the Offer (and the Genus Board will unanimously recommend GenusShareholders to vote in favour of the resolutions to be proposed at anextraordinary general meeting of Genus which is expected to be convened for lateNovember 2005 (or any adjournment thereof), notice of which meeting will be setout at the end of the Admission Document, and have irrevocably undertaken toSygen to vote in favour of such resolutions in respect of their own beneficialshareholdings which amount to, in aggregate, 114,586 Genus Shares representingapproximately 0.3 per cent. of the Existing Genus Share Capital); (ii) there-admission and admission, respectively, to trading on AIM of the ExistingGenus Share Capital and the Placing Shares in accordance with the AIM Rules; and(iii) valid acceptances being received in respect of not less than 90 per cent.of the Sygen Shares to which the Offer relates (or such lesser percentage as theGenus Board may decide (with the prior approval of Bridgewell, Panmure Gordonand Barclays), subject to the City Code). Application will be made by Genus tothe London Stock Exchange for the Existing Genus Share Capital to be re-admittedand the Placing Shares to be admitted respectively to trading on AIM. In addition, the Offer is made subject to the conditions set out in Appendix Iof this document and the further terms and conditions to be set out in the OfferDocument expected to be posted to Sygen Shareholders within the next ten daysand, in the case of Sygen Shares held in certificated form, in the Form ofAcceptance which will accompany the Offer Document. The Offer extends to any Sygen Shares unconditionally allotted or issued whilstthe Offer remains open for acceptance (or such earlier date as Genus may,subject to the Code, determine, such earlier date not, without the consent ofthe Panel, being earlier than the date on which the Offer becomes unconditionalas to acceptances or, if later, the first closing date of the Offer) as a resultof the exercise of options granted under the Sygen Share Schemes or otherwise. Sygen Shares will be acquired pursuant to the Offer fully paid and free from allliens, charges, encumbrances, rights of pre-emption and other interests andtogether with all rights now or hereafter attaching thereto, save for the 0.8pence Dividend. 3. Background to and reasons for recommending the Offer Sygen became an independent company in 1998 following significant divestituresfrom and a capital reorganisation of its predecessor company, Dalgety plc. Atthat time Sygen was the largest independent global pig breeder but was highlysusceptible to the volatility of the pig cycle given its outright ownership ofpig farms. In addition, there were a number of legacy issues from the formerDalgety period that needed to be addressed. These issues have been addressed by the current management team who have alsodeveloped the business so that it creates value through the innovativeapplication of quantitative genetics and biotechnology to animal breeding. Theyhave achieved this through changing Sygen's business model to a royalty modelbased on outsourcing production and investing in research and development toleverage its quantitative genetic and biotechnology skills across multiplespecies, whilst selling off a number of asset-intensive farms where Sygen wasactively involved in pig breeding. This has led to improvements in Sygen'smargins and returns on capital employed, as well as evolving the business to usethis technology for other species, most notably in SyAqua. The focus on improving the underlying quality of Sygen's business and itsearnings is demonstrated by its financial performance which has seen anoperating loss before exceptional items of £3.3 million for the year to 30 June2000 grow to an operating profit before exceptional items of £8.9 million forthe year to 30 June 2005. Notwithstanding the Sygen Board's confidence in its independent future, itrecognises the value and certainty of a premium cash offer to SygenShareholders. In addition, there has been considerable industry consolidationwithin the breeding sector. Some of this consolidation has involved companieswhich might otherwise have facilitated the implementation of Sygen'smulti-species strategy. The Sygen Board recognises the advantages of scalewithin this marketplace. The Offer (when aggregated with the 0.8 pence Dividend) represents a premium ofapproximately: • 55.4 per cent. over the average closingprice of 41.20 pence per Sygen Share during the twelve months up to andincluding 11 October 2005, being the last business day prior to the date onwhich Sygen announced that it had received an approach in relation to a possibleoffer; • 36.9 per cent. over the closing price of46.75 pence per Sygen Share on 11 October 2005, being the last business dayprior to the date on which Sygen announced that it had received an approach inrelation to a possible offer; and • if the value of the net cash position ofSygen on a per share basis as at 30 June 2005 is excluded, 45.1 per cent. overthe closing price (also adjusted for such exclusion) of 38.22 pence per SygenShare on 11 October 2005, being the last business day prior to the date on whichSygen announced that it had received an approach in relation to a possibleoffer. In addition, the Offer of 63.2 pence per share in cash for the Existing and tobe Issued Sygen Share Capital represents a multiple of: • 30.4 x net income before exceptionalitems for the year ended 30 June 2005; and • 10.6 x operating profit beforedepreciation, amortisation and exceptional items for the year ended 30 June2005. Accordingly, the Sygen Directors have concluded that the Offer provides SygenShareholders with a favourable opportunity to realise their investment at anattractive price. 4. Irrevocable undertakings and existing holdings Genus has received irrevocable undertakings to accept the Offer from each of theSygen Directors who holds Sygen Shares in respect of, in aggregate, 2,283,496Sygen Shares, representing approximately 0.77 per cent. of the Existing SygenShare Capital. Each of these irrevocable undertakings requires the person whohas given it to accept or procure the acceptance of the Offer in respect of thenumber of Sygen Shares which are the subject of the irrevocable undertaking andwill continue to be binding in the event of a competing offer for Sygen. Theseirrevocable undertakings will cease to be binding if: • the Offer Document has not been postedwithin 28 days after the date of this announcement (or within such longer periodas Genus, with the consent of the Panel, determines); or • the Offer lapses or is withdrawn. In addition, certain other Sygen Shareholders have irrevocably undertaken toaccept the Offer in respect of their entire interests in Sygen Shares amountingto, in aggregate, 13,268,000 Sygen Shares, representing approximately 4.5 percent. of the Existing Sygen Share Capital. These irrevocable undertakings willcease to be binding in the event a third party announces their intention to makea general offer for all the shares in Sygen which values Sygen at 5 per cent. ormore higher than the Offer. Genus has also received non-binding letters ofintention to accept the Offer from other Sygen Shareholders in respect of, inaggregate, 60,442,841 Sygen Shares representing approximately 20.5 per cent. ofthe Existing Sygen Share Capital. Accordingly, Genus has received irrevocable undertakings and non-binding lettersof intention to accept the Offer in respect of, in aggregate, 75,994,337 SygenShares, representing approximately 25.7 per cent. of the Existing Sygen ShareCapital. 5. Inducement fees As part of the negotiations between Sygen and Genus, Sygen and Genus have agreedto enter into an inducement fee arrangement. The inducement fee, the amount ofwhich is £1.86 million (inclusive of VAT), which is equal to approximately 1 percent. of the total value of the Offer at the Offer Price, is payable by Sygen toGenus if: • a Competing Offer is announced or proposed, prior to the earliest ofthe Offer lapsing or the Offer being withdrawn, which at any time thereafterbecomes or is declared unconditional in all respects (including as toacceptances) or otherwise becomes effective or is completed; or • the Sygen Directors withdraw or adversely modify the terms of theirapproval or recommendation of the Offer in circumstances where no CompetingOffer has been announced or proposed and they have received no approach from abona fide potential offeror (as such term is used in the City Code) prior to theoccurrence of such event, provided that the inducement fee will not be payablein such circumstances if prior to the occurrence of such event Genus notifiesSygen that it is no longer proceeding with the Offer or the Offer has lapsed. For the purposes of the inducement fee arrangement, "Competing Offer" means anoffer, however effected, including by means of a scheme of arrangement, toacquire more than 50 per cent. of the voting rights attributable to the ordinaryshare capital of Sygen by a person who is not Genus or acting in concert (asdefined in the Code) with Genus. The inducement fee arrangement also provides for the payment by Genus to Sygenof a fee equal to the amount of the inducement fee referred to above in theevent that Genus' ordinary shareholders fail to pass by 16 December 2005 at aduly convened extraordinary general meeting of Genus such resolution(s) as maybe necessary to approve, implement and effect the Offer. Genus is not obliged to pay the above fee to Sygen if the inducement fee payableby Sygen to Genus has previously become payable and Sygen is not obliged to paythe above fee to Genus if the inducement fee payable by Genus to Sygen haspreviously become payable. 6. Background to and reasons for the Offer Genus is a world leading bovine genetics company. Sygen is a world leader inpig and shrimp genetics. The Genus Directors believe that a combination of thetwo businesses will bring economies of scale to the Enlarged Group and enable amore efficient research programme, benefiting both customers and the EnlargedGroup alike. Furthermore, the Genus Board believes that there is merit increating a larger core business with a global presence in complementary markets.The Genus Board believes that the acquisition of Sygen represents an opportunityto: • benefit from economies of scale, particularly in the mature bovine andporcine markets, which should impact favourably on costs; • reduce dependency on one breed of animal and mitigate the associated risks; • combine research and development programmes to yield greater growth potentialto be a world leader in animal genetics research and to strengthen the pursuitof a step change in the size of the business brought about through thecommercial application of bio-science; • benefit from Sygen's experience in selling to food processors; and • increase efficiency and improve profitability and cash flow. Following the Offer becoming or being declared unconditional, Genus intends tocommence integrating the business of the Sygen Group with its existingoperations, which will involve, amongst other things: • the implementation of a new combined organisational structure, to facilitateeffective management of the Enlarged Group; • a review of the research and development work currently undertaken by theGenus Group and the Sygen Group; • a reduction in the regional and corporate operating costs of the combinedbusinesses; and • a combination of the expertise and knowledge within the Sygen Group with thatof Genus to create a strong team to manage the future prospects of the EnlargedGroup. The Genus Directors believe that the implementation of a new organisationalstructure, combined with the further synergies to be achieved through thecombination of the two businesses will present opportunities for the EnlargedGroup to improve operating profit and provide a more robust and effectiveresearch and development programme for the long term development of the EnlargedGroup. The Genus Directors believe that Genus Shareholders will benefit from theefficiencies within the Enlarged Group with estimated annualised pre-tax costsavings of at least £6 million, which the Genus Directors believe will beachievable in the second full year following completion of the acquisition ofSygen. Of the £6 million, the Genus Directors believe £3 million to beachievable in the first full year following completion of the acquisition ofSygen, which is expected to be earnings enhancing in the first full yearfollowing completion of the acquisition of Sygen (this statement should not beinterpreted to mean that earnings per share will necessarily be greater thanthose for the relevant preceding financial period). Genus expects there to beone-off cash costs of approximately £4 million (over two years) in achievingthese synergies. 7. Information on Genus Genus is a world leading bovine genetics company. At the heart of Genus'business lies a research and development programme with an annual cost ofapproximately £8 million per year. Laboratory bio-science is used to target andaugment traditional mating and selection programmes, testing about 400 new bullseach year. Genus applies biotechnology to the natural breeding of beef anddairy cattle, creating genetic improvement without the use of geneticmodification and distributes frozen beef and dairy semen for both tropical andtemperate agricultures from its six studs located across four continents tofarmers in approximately 70 countries. The Genus Group sells through a networkof retail staff and exclusive agents and distributors. Farmers use the improvedgenetics purchased to breed elite progeny and so add value by increasing theoutput and robustness of their herds. Through organic growth and by acquisition, Genus significantly expanded itsbovine breeding business. The acquisition of ABS Global Inc. in 1999 resultedin the Genus Group achieving a step change in the size of its core geneticsdivision. In addition to bovine genetics, Genus operates an animal health business ("Animal Health") and an international consulting business. Animal Health marketslicensed veterinary pharmaceuticals and is a wholesale distributor of veterinaryproducts. Animal Health also offers a range of related business services to itscustomer base. The Genus Group's international consulting business providesprogramme management and consulting services to the UK Government, the EuropeanUnion ("EU") and overseas aid agencies. The majority of its projects for thesecustomers are based in developing countries. Genus has received an approach, which may or may not lead to the sale of one ofits non-core wholesaling businesses. For the period ended 31 March 2005, thisbusiness, which employs 125 staff, generated a turnover of approximately £66million and operating profits of £0.4 million (before central costs). Thebusiness utilises around £6.5 million of net assets, which in Genus' opinion, isits approximate value. For the year ended 31 March 2005, Genus reported an operating profit afteramortisation of goodwill of £9.6 million on turnover of £183.2 million. Thisyielded a profit on ordinary activities before taxation of £8.8 million. Netassets as at 31 March 2005 were £55.1 million. Further information relating to Genus will be set out in the Admission Document. 8. Information on Sygen Sygen is a world leader in applying quantitative genetics and biotechnology toanimal breeding. Sygen's technology, products and services enable pig and shrimpproducers and farmers to enhance meat quality and improve efficiency in theproduction of meat animals. Sygen applies a combination of quantitative geneticsand biotechnology to animal breeding, which is applicable across severallivestock species, and is currently applied with respect to pigs and shrimps.Sygen's products and services, which allow farmers and producers to createhigher quality and healthier non-GMO food products, add value throughout theglobal meat supply chain of farmers, producers, processors, distributors,retailers and consumers. Headquartered in Oxfordshire, UK, the Sygen Groupoperates in 30 countries on six continents, with laboratories located inKentucky, USA, and Cambridge, UK. For the year ended 30 June 2005, Sygen reported revenues of £134.4 million,earnings before interest, depreciation and amortisation and exceptional items of£15.4 million and an operating profit before exceptional items of £8.9 million. Further financial information relating to Sygen will be set out in the AdmissionDocument. 9. Current trading and prospects of Sygen For the current financial year, leading indicators for the pig industry in theUS point to favourable market conditions. PIC Asia's innovative business modelhas been gaining momentum and the Sygen Board is confident that this region willcontinue to offer growth prospects for Sygen. PIC Europe's business is expectedto benefit further from the restructuring measures taken in 2005. Against thisbackdrop, and with continued benefits from biotechnology, the Sygen Boardanticipates some further progress in PIC overall. The operating loss at SyAquaduring the year ended 30 June 2005 was substantially due to external short termfactors which masked good underlying progress, and the Sygen Board expects aprofit from this business in the 2006 financial year. 10. Sygen Share Schemes The Offer extends to any Sygen Shares which are unconditionally allotted orissued whilst the Offer remains open for acceptance, or such earlier date asGenus may, subject to the Code, determine, such earlier date not (without theconsent of the Panel) being earlier than the date on which the Offer becomesunconditional as to acceptances, or if later, the first closing date of theOffer, as a result of the exercise of options granted under the Sygen ShareSchemes or otherwise. In the event that the Offer becomes or is declared unconditional in allrespects, Genus will write to participants in the Sygen Share Schemes to informthem of the effect of the Offer and to make appropriate proposals toparticipants in the Sygen Share Schemes, to the extent that options grantedunder the Sygen Share Schemes have not been exercised. 11. Financing of the Offer The Offer, together with the existing borrowing requirements of the EnlargedGroup, is being financed through £180 million of new bank facilities provided byBarclays pursuant to the Facilities Agreement and through approximately £55million (before expenses) raised under the Placing. The Placing has been fullyunderwritten by Bridgewell and Panmure Gordon. Full acceptance of the Offerwould result in a total cash consideration of approximately £187 million beingpayable to Sygen Shareholders. Bridgewell is satisfied that sufficientfinancial resources are available to Genus to satisfy the maximum cashconsideration that would be payable on full acceptance of the Offer. Further details of the Facilities Agreement and the Placing will be set out inthe Admission Document. 12. Sygen management and employees Genus has confirmed that the existing employment rights, including pensionrights of the executive directors, management and employees of the Sygen Groupwill be fully safeguarded. 13. Compulsory acquisition and cancellation of listing If the Offer becomes or is declared unconditional in all respects, Genus intendsto procure the making of an application by Sygen as soon as it is appropriate todo so to cancel the listing of Sygen Shares on the Official List and fromtrading on the London Stock Exchange. It is anticipated that such cancellationof listing and trading will take effect no earlier than 20 business days afterthe Offer becomes or is declared unconditional in all respects. Suchcancellation would significantly reduce the liquidity and marketability of anySygen Shares not acquired by Genus pursuant to the Offer and their value may beaffected as a consequence. If Genus receives acceptances under the Offer in respect of, and/or otherwiseacquires, 90 per cent. or more of the Sygen Shares to which the Offer relates,Genus intends to exercise its rights pursuant to the provisions of sections 428to 430F (inclusive) of the Companies Act to acquire compulsorily any remainingSygen Shares to which the Offer relates. If the Offer becomes or is declared unconditional in all respects, Sygen will bere-registered as a private company in due course. Enquiries: Genus 01256 347100John Hawkins, ChairmanRichard Wood, Chief Executive OfficerDavid Timmins, Finance Director Bridgewell (Financial Adviser and Nominated Adviser to Genus) 0207 003 3000Greg AldridgeFred Ward Panmure Gordon (Broker to Genus) 0207 459 3600Edward FarmerMark Lander Buchanan Communications (PR Adviser to Genus) 0207 466 5000Charles RylandSuzanne Brocks Sygen 01865 822 275Brian Baldock, ChairmanPhillip David, Chief ExecutiveJohn Adams, Finance Director CSFB (Exclusive Financial Adviser to Sygen) 0207 888 8888Richard ProbertWilliam Mansfield JPMorgan Cazenove (Corporate Broker to Sygen) 0207 588 2828David ClasenBronson Albery WMC Communications (PR Adviser to Sygen) 0207 930 9030David Wynne-MorganAlex Glover Appendix III to this announcement contains definitions of certain terms used inthis announcement. Bridgewell, which is authorised and regulated in the United Kingdom by theFinancial Services Authority for investment business activities, is acting asfinancial adviser to Genus in connection with the Offer and other mattersreferred to in this announcement and no one else and will not be responsible toanyone other than Genus for providing the protections afforded to clients ofBridgewell nor for providing advice in relation to the Offer, or the contents ofthis announcement or any arrangement referred to herein. Panmure Gordon, which is authorised and regulated in the United Kingdom by theFinancial Services Authority for investment business activities, is acting forGenus and no one else and will not be responsible to anyone other than Genus forproviding the protections afforded to customers of Panmure Gordon nor forproviding advice in relation to the Offer, or this announcement or anyarrangement referred to herein. CSFB, which is authorised and regulated in the United Kingdom by the FinancialServices Authority for investment business activities, is acting as financialadviser to Sygen in connection with the Offer and no one else, and will not beresponsible to anyone other than Sygen for providing the protections afforded toclients of CSFB nor for providing advice in relation to the Offer, or thecontents of this announcement or any arrangement referred to herein. JPMorgan Cazenove, which is authorised and regulated in the United Kingdom bythe Financial Services Authority for investment business activities, is actingas exclusive corporate broker to Sygen, and has also provided financial advice,in connection with the Offer and no one else and will not be responsible toanyone other than Sygen for providing the protections afforded to clients ofJPMorgan Cazenove nor for providing advice in relation to the Offer or thecontents of this announcement or any arrangement referred to herein. The release, publication or distribution of this announcement in jurisdictionsother than the United Kingdom may be restricted by law and therefore persons insuch jurisdictions into which this announcement is released, published ordistributed should inform themselves about, and observe, such restrictions. Anyfailure to comply with the restrictions may constitute a violation of thesecurities laws of any such jurisdiction. The Offer is not being made, directly or indirectly, in or into, or by use ofthe mails of, or by any means or instrumentality (including, without limitation,facsimile transmission, internet, email, telex or telephone) of interstate orforeign commerce of, or any facility of a national state or other securitiesexchange of, the Excluded Territories and subject to certain exceptions cannotbe accepted by any such use, means instrumentality or facility or from theExcluded Territories. Neither the Offer nor the Placing constitutes an offer of securities for sale,or the solicitation of an offer to buy, securities in the United States and thePlacing Shares to be issued pursuant to the Placing have not been and will notbe registered under the United States Securities Act of 1933, or under the lawsof any state, district or other jurisdiction of the Excluded Territories and noregulatory clearances in respect of Placing Shares have been or will be, appliedfor in any jurisdiction. Accordingly, unless an exemption under the USSecurities Act of 1933 or other relevant securities laws is applicable, thePlacing Shares are not being, and may not be offered, sold, resold, delivered ordistributed, directly or indirectly, in or into any of the Excluded Territoriesor to, or for the account or benefit of, any person resident in any of theExcluded Territories. This summary and the following announcement contain a number of forward-lookingstatements relating to Genus and Sygen with respect to, among others, thefollowing: financial condition; results of operations; the business of theEnlarged Group; future benefits; and management plans and objectives. Genus andSygen consider any statements that are not historical facts as "forward-lookingstatements". They involve a number of risks and uncertainties that could causeactual results to differ materially from those suggested by the forward-lookingstatements. Important factors that could cause actual results to differmaterially from estimates or forecasts contained in the forward-lookingstatements include, among others, the following possibilities: future revenuesare lower than expected; costs or difficulties relating to the integration ofthe businesses of Genus and Sygen, or of other future acquisitions, are greaterthan expected; expected cost savings from the transaction or from other futureacquisitions are not fully realised or realised within the expected time frame;competitive pressures in the industry increase; general economic conditions orconditions affecting the relevant industries, whether internationally or in theplaces where Genus and Sygen conduct business are less favourable than expected,and/or conditions in the securities market are less favourable than expected. This announcement does not constitute an offer to sell or an invitation topurchase any securities or the solicitation of an offer to purchase anysecurities, pursuant to the Offer or otherwise. The Offer will be made solely bythe Offer Document and, in the case of Sygen Shares in certificated form, theForm of Acceptance accompanying the Offer Document, which will contain the fullterms and conditions of the Offer, including details of how the Offer may beaccepted. Sygen Shareholders are advised to read the Offer Document andaccompanying Form of Acceptance when they are sent to them because they willcontain important information. Under the provisions of Rule 8.3 of the City Code, any person who, alone oracting together with any other person(s) pursuant to an agreement orunderstanding (whether formal or informal) to acquire or control relevantsecurities of Sygen, owns or controls, or becomes the owner or controller of,directly or indirectly, one per cent. or more of any class of securities ofSygen is required to disclose, by not later than 12.00 noon (London time) on theLondon business day following the date of the relevant transaction, dealings insuch securities (or in any option in respect of, or derivative referenced to,any such securities) during the period to the date on which the Offer becomes oris declared unconditional as to acceptances or lapses or is otherwise withdrawn. Under the provisions of Rule 8.1 of the City Code, all dealings in relevantsecurities of Sygen by Genus or Sygen, or by any of their respective"associates" (within the meaning of the City Code), must also be disclosed. With effect from 7 November 2005, the definition of "interest in securities" inRule 8 will in certain circumstances include contracts for differences (andother cash settled derivatives) and will apply to any person who is interestedin 1% or more of any class of relevant securities of Sygen. The timing forpublic disclosure of such interests will be extended to 3.30 p.m. (London time)on the London business day following the date of the relevant transaction. 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 AND FURTHER TERMS OF THE OFFER Conditions of the Offer The Offer will be subject to the following conditions: 1 Acceptances Valid acceptances being received (and not, where permitted, withdrawn) by nolater than 1.00 p.m. on the first closing date of the Offer (or, subject to theCode, such later time(s) and/or dates(s) as Genus may, with the consent of thePanel or in accordance with the Code, decide) in respect of not less than 90 percent. (or such lesser percentage as Genus may decide with the prior approval ofBridgewell and Panmure Gordon (under the Placing Agreement) and Barclays (underthe Facilities Agreement)) of the Sygen Shares to which the Offer relates.However, this condition will not be satisfied unless Genus and/or its whollyowned subsidiaries have acquired or agreed to acquire Sygen Shares carrying, inaggregate, over 50 per cent. of the voting rights then normally exercisable atgeneral meetings of Sygen including, for this purpose, to the extent (if any)required by the Code, the voting rights attaching to any Sygen Shares which maybe unconditionally allotted or issued before the Offer becomes or is declaredunconditional as to acceptances. In this condition: 1.1 the expression "Sygen Shares to which the Offer relates" shall beconstrued in accordance with sections 428 to 430F (inclusive) of the CompaniesAct; 1.2 Sygen Shares which have been unconditionally allotted but notissued shall be deemed to carry the voting rights which they will carry whenthey are issued; and 1.3 valid acceptances shall be treated as having been received inrespect of any Sygen Shares that Genus shall, pursuant to section 429(8) and, ifapplicable, section 430E of the Companies Act, be treated as having acquired orcontracted to acquire by virtue of acceptances of the Offer. 2 Shareholder Approval and Admission of Placing Shares 2.1 The passing at an extraordinary general meeting of Genus (or anyadjournment thereof) of such resolutions as may be necessary to approve,implement and effect the Offer and the acquisition of any Sygen Shares under theOffer or otherwise; and 2.2 the admission of the Placing Shares and re-admission of theExisting Genus Share Capital to trading on AIM becoming effective in accordancewith the AIM Rules. 3 Competition Issues 3.1 Without limitation to condition 4 below, the Office of Fair Tradingnot having indicated that it has decided to refer the Offer or any part of theOffer to the Competition Commission under section 33 of the Enterprise Act 2002regardless of whether or not Genus has offered undertakings in lieu of such areference. 3.2 All filings having been made and all applicable waiting periodsunder the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976 andthe regulations under it having expired or been terminated as appropriate inrespect of the Offer and the proposed acquisition of Sygen by Genus. 4 Authorisations and Filings 4.1 All authorisations, orders, grants, recognitions, determinations,certificates, confirmations, consents, licences, clearances, provisions andapprovals in any jurisdiction necessary for, or in respect of, the Offer, itsimplementation or any acquisition of any shares in, or control of, Sygen or anyother member of the Wider Sygen Group by any member of the Wider Genus Grouphaving been obtained in terms and in a form satisfactory to Genus (actingreasonably) and all such authorisations remaining in full force and effect andthere being no intimation of any intention to revoke or not renew the same. 4.2 All material authorisations necessary to carry on the business ofany member of the Wider Sygen Group which are material in the context of theSygen Group taken as a whole remaining in full force and effect and there beingno intimation of any intention to revoke or not to renew the same. 4.3 All notifications and filings which are necessary having beenmade, all appropriate waiting and other time periods (including any extensionsof such waiting and other time periods) under any applicable legislation orregulation of any relevant jurisdiction having expired, lapsed or beenterminated (as appropriate) and all statutory or regulatory obligations in anyrelevant jurisdiction having been complied with in each case in connection withthe Offer or the acquisition or proposed acquisition of any shares in, orcontrol of, Sygen by Genus. 5 Regulatory Intervention No relevant person having taken, instituted, implemented or threatened any legalproceedings, or having required any action to be taken or otherwise havingenacted, made or proposed any statute, regulation, order or decision and therenot continuing to be outstanding any statute, regulation, order or decision thatwould: 5.1 make the Offer, its implementation or the acquisition or proposedacquisition of any shares in, or control or management of, the Wider Sygen Groupby Genus illegal, void or unenforceable; or 5.2 otherwise directly or indirectly prevent, prohibit or otherwisematerially restrict, restrain, delay or interfere in the implementation of orimpose additional conditions or obligations with respect to or otherwisematerially challenge or require material amendment of the Offer or the proposedacquisition of Sygen by Genus or any acquisition of shares in Sygen by Genus; or 5.3 require, prevent or delay the divestiture by Genus of any sharesin Sygen; or 5.4 impose any limitation on the ability of any member of the WiderGenus Group or any member of the Wider Sygen Group to acquire or hold orexercise effectively, directly or indirectly, any rights of ownership of sharesor other securities or the equivalent in any member of the Wider Sygen Group ormanagement control over any member of the Sygen Group which would be material inthe context of the Offer; or 5.5 require, prevent or delay the disposal by Sygen, or require thedisposal or materially alter the terms of any proposed disposal by any member ofthe Wider Sygen Group, of all or any material part of their respectivebusinesses, assets or properties or impose any limitation on the ability of anyof them to conduct their respective businesses or own their respective assets orproperties which would be material and adverse in the context of the Sygen Grouptaken as a whole; or 5.6 require any member of the Wider Genus Group or of the Sygen Groupto offer to acquire any shares or other securities (or the equivalent) in anymember of the Wider Sygen Group owned by any third party (in each case, otherthan in implementation of the Offer); or 5.7 limit the ability of any member of the Genus Group or Sygen toconduct or integrate or co-ordinate its business, or any part of it, with all orany material part of the businesses of any other member of the Genus Group or ofSygen in a manner which would be material and adverse in the context of theGenus Group taken as a whole; or 5.8 result in any member of the Wider Sygen Group ceasing to be ableto carry on business under any name under which it presently does so. 6 Consequences of the Offer Save as publicly announced or disclosed by Sygen or as otherwise disclosed toGenus in writing prior to the Announcement Date (and "disclosed" for thesepurposes means the provision by or on behalf of Sygen of sufficient informationto enable Genus and/or its advisers to make an informed assessment of thesubject matter of, risks involved with, and impact on the financial position ofthe Wider Sygen Group of, such information) there being no provision of anyagreement, arrangement, licence, permit, franchise or other instrument to whichany member of the Wider Sygen Group is a party, or by or to which any suchmember, or any part of its assets, may be bound, entitled or subject, whichwould or might, in each case as a consequence of the Offer or of the acquisitionor proposed acquisition of all or any part of the issued share capital of, orchange of control or management of, Sygen or any other member of the Sygen Groupresult in (to an extent which would be material and adverse in the context ofthe Sygen Group taken as a whole): 6.1 any assets or interests of any member of the Wider Sygen Groupbeing or falling to be disposed of or charged in any way or ceasing to beavailable to any member of the Wider Sygen Group or any rights arising underwhich any such asset or interest could be required to be disposed of or chargedin any way or could cease to be available to any member of the Wider Sygen Groupotherwise than in the ordinary course of business; or 6.2 any monies borrowed by or other indebtedness (actual orcontingent) of, or any grant available to, any member of the Wider Sygen Groupbeing or becoming repayable or capable of being declared repayable immediatelyor earlier than the repayment date stated in such agreement or the ability ofsuch member of the Wider Sygen Group to incur any such borrowing or indebtednessbecoming or being capable of becoming withdrawn, inhibited or prohibited; or 6.3 any such agreement, arrangement, licence, permit, franchise orother instrument or the rights, liabilities, obligations or interests of anysuch member thereunder being, or becoming capable of being, terminated oradversely modified or affected or any onerous obligation arising or any adverseaction being taken thereunder; or 6.4 the interests or business of any member of the Wider Sygen Groupin or with any third party (or any arrangements relating to any such interestsor business) being terminated or adversely modified or affected; or 6.5 the financial or trading position or prospects or value of anymember of the Wider Sygen Group being materially prejudiced or adverselyaffected; or 6.6 the creation of any mortgage, charge or other security interestover the whole or any part of the business, property or assets of any member ofthe Wider Sygen Group or any such security (whenever arising or having arisen)becoming enforceable or being enforced; or 6.7 the creation of any actual or contingent liabilities by any memberof the Wider Sygen Group, and no event having occurred which, under any provision of anysuch agreement, arrangement, licence, permit, franchise or other instrument towhich any member of the Wider Sygen Group is a party, or by or to which any suchmember, or any of its assets, may be bound, entitled or subject, could result inany of the events or circumstances as are referred to in subparagraphs 6.1 to6.7 above inclusive. 7 No corporate action taken since the Accounting Date Save as publicly announced or disclosed by Sygen, or asotherwise disclosed to Genus in writing prior to the Announcement Date (and "disclosed" for these purposes means the provision by or on behalf of Sygen ofsufficient information to enable Genus and/or its advisers to make an informedassessment of the subject matter of, risks involved with, and impact on thefinancial position of the Wider Sygen Group of, such information) since theAccounting Date, no member of the Wider Sygen Group having: 7.1 issued or agreed to issue, or authorised or proposed the issue orgrant 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 securities (save (i) as between Sygen and anyother member of the Sygen Group (ii) for Sygen Shares issued pursuant to theexercise of options granted under the Sygen Share Schemes or otherwise issuedpursuant to the Sygen Share Schemes (iii) for the grant of options under theSygen Share Schemes); or 7.2 redeemed, purchased, repaid or reduced or proposed the redemption,purchase, repayment or reduction of any part of its share capital or othersecurities or, save in respect of the matters mentioned in condition 7.1 above,made or proposed the making of any other change to its share capital; or 7.3 other than to another member of the Sygen Group, recommended,declared, paid or made or proposed to recommend, declare, pay or make anydividend, bonus issue or other distribution whether payable in cash orotherwise, save for the 0.8 pence Dividend; or 7.4 save for intra-Sygen Group transactions, made or authorised anychange in its loan capital; or 7.5 save for intra-Sygen Group transactions, merged or demerged withor from, or acquired, any body corporate, partnership or business or authorisedor announced any intention to propose any such merger or demerger; or 7.6 save for intra-Sygen Group transactions, acquired or disposed of,transferred, mortgaged or charged, or created or granted any security interestover, any material assets (including shares and trade investments) or authorisedor announced any intention to propose any such acquisition, disposal, transfer,mortgage, charge or creation or grant of any security interest, in each case,other than in the ordinary course of business; or 7.7 save for intra-Sygen Group transactions issued or authorised orproposed the issue of any debentures or incurred or increased any borrowings,indebtedness in the nature of borrowings or become subject to any contingentliability, in each case, other than in the ordinary course of business; or 7.8 entered into or varied, or authorised or proposed the entry intoor variation of, or announced its intention to enter into or vary, anytransaction, arrangement, contract or commitment (whether in respect of capitalexpenditure or otherwise) which is of a long term, onerous or unusual nature ormagnitude or could involve an obligation of such nature or magnitude or which isor could be restrictive to the existing business of any member of the WiderSygen Group or which is other than in the ordinary course of business and whichin any such case is material in the context of the Sygen Group taken as a whole;or 7.9 entered into, implemented, effected, authorised or proposed orannounced its intention to enter into, implement, effect, authorise or proposeany reconstruction, amalgamation, scheme, commitment or other transaction orarrangement otherwise than in the ordinary course of business and which in anysuch case is material in the context of the Sygen Group taken as a whole; or 7.10 waived or compromised any claim otherwise than in the ordinarycourse of business which is material in the context of the Sygen Group taken asa whole; or 7.11 entered into or varied or made any offer (which remains open foracceptance) to enter into or vary the terms of any contract with any of thedirectors or senior executives of Sygen or any of the executives of the SygenGroup who report directly to the board of directors of Sygen; or 7.12 taken or proposed any corporate action or had any legal proceedingsinstituted or threatened against it or petition presented for its winding up(voluntary or otherwise), dissolution or reorganisation or for the appointmentof a receiver, administrator, administrative receiver, trustee or similarofficer of all or any of its assets and revenues or for any analogousproceedings or steps in any jurisdiction or for the appointment of any analogousperson in any jurisdiction and which in any such case is material in the contextof the Sygen Group taken as a whole; or 7.13 been unable, or admitted in writing that it is unable, to pay itsdebts or has stopped or suspended (or threatened to stop or suspend) payment ofits debts generally or ceased or threatened to cease carrying on all or asubstantial part of its business; or 7.14 made any alteration to its memorandum or articles of association,or other incorporation documents; or 7.15 proposed, agreed to provide or modified the terms of any shareoption scheme, incentive scheme or other benefit relating to the employment ortermination of employment of any person employed by Sygen in a manner which ismaterial, save as agreed with Genus in writing; or 7.16 in relation to the pension schemes established for its directorsand/or other employees and/or their dependants, made or consented to any changeto: (i)the terms of the trust deeds constituting such pension schemes or to thebenefits which accrue; (ii) the pensions which are payable, under them; (iii) the basis on which qualifications for oraccrual of or entitlement to such benefits or pensions are calculated ordetermined; (iv) the basis upon which the liabilities (includingpensions) of such pension schemes are funded or made; or (v) or agreed or consented to any change to thetrustees of such pension schemes; or 7.17 entered into any agreement or passed any resolution or made anyoffer (which remains open for acceptance) with respect to or proposed orannounced any intention to effect any of the transactions, matters or eventsreferred to in this condition 7 which is material in the context of the SygenGroup taken as a whole. 8 Other events since the Accounting Date Save as publicly announced or disclosed by Sygen or as otherwise disclosed toGenus in writing prior to the Announcement Date (and "disclosed" for thesepurposes means the provision by or on behalf of Sygen of sufficient informationto enable Genus and/or its advisers to make an informed assessment of thesubject matter of, risks involved with, and impact on the financial position ofthe Wider Sygen Group of, such information) in the period since the AccountingDate: 8.1 no litigation or arbitration proceedings, prosecution,investigation or other legal proceedings having been announced, instituted,threatened or remaining outstanding by, against or in respect of, any member ofthe Wider Sygen Group or to which any member of the Wider Sygen Group is or maybecome a party (whether as claimant, defendant or otherwise) which is expectedadversely to affect the Sygen Group taken as a whole and is material in thecontext of the Sygen Group taken as a whole; or 8.2 no material adverse change or deterioration having occurred in thebusiness or assets or financial or trading position or prospects, assets orprofits of any member of the Wider Sygen Group which is material in the contextof the Sygen Group taken as a whole; or 8.3 no enquiry or investigation by, or complaint or reference to, anyrelevant person against or in respect of any member of the Wider Sygen Grouphaving been threatened, announced, implemented or instituted or remainingoutstanding by, against or in respect of, any member of the Wider Sygen Groupwhich is material in the context of and is expected to adversely affect theSygen Group taken as a whole; or 8.4 no contingent or other liability having arisen or become apparentor increased which would be likely adversely to affect the Sygen Group taken asa whole and is material in the context of the Sygen Group taken as a whole. 9 Environmental and other issues Save as publicly announced or disclosed by Sygen or as otherwise disclosed toGenus in writing prior to the Announcement Date (and "disclosed" for thesepurposes means the provision by or on behalf of Sygen of sufficient informationto enable Genus and/or its professional advisers to make an informed assessmentof the subject matter of, risks involved with, and impact on the financialposition of the Wider Sygen Group of, such information) Genus not havingdiscovered that: Environmental 9.1 any past or present member of the Wider Sygen Group has notcomplied in all material respects with all applicable legislation or regulationsor authorisations of any jurisdiction with regard to the use, handling, storage,transport, production, supply, treatment, keeping, disposal, discharge,spillage, leak or emission of any waste or hazardous substance or any substancelikely to damage or impair the environment or harm human health or otherwiserelating to environmental matters or the health and safety of any person or thatthere has otherwise been any such use, handling, storage, transport, production,supply, treatment, keeping, disposal, discharge, spillage, release, leak oremission (whether or not the same constituted a non-compliance by any personwith any such legislation or regulations or authorisations and wherever the samemay have taken place), which, in any such case, would be likely to give rise toany liability (whether actual or contingent) or cost on the part of any memberof the Wider Sygen Group and which is material in the context of the Wider SygenGroup taken as a whole; or 9.2 there is, or is likely to be any liability (whether actual orcontingent) or cost on the part of any member of the Wider Sygen Group to makegood, repair, reinstate or clean up any relevant asset or any other property orany controlled waters under any environmental legislation, regulation, notice,circular, order or other lawful requirement of any relevant person or thirdparty or otherwise and which is material in the context of the Wider Sygen Grouptaken as a whole; or 9.3 circumstances exist (whether as a result of the making of theOffer or otherwise): (i)which would be likely to lead to any relevant person instituting; or (ii) whereby any past or present member of theWider Sygen Group would be likely to be required to institute an environmental audit or take any steps which would in any such case be likelyto result in any actual or contingent liability to improve or modify existingplant or install new plant, machinery or equipment or carry out any changes inthe processes carried out or make good, repair, reinstate or clean up anyrelevant asset or any other property or any controlled waters which is expectedto adversely affect the Wider Sygen Group and which is material in the contextof the Wider Sygen Group taken as a whole; or Information 9.4 the financial, business or other information publicly disclosed atany time by any member of the Wider Sygen Group or disclosed in the context ofthe Offer (and not subsequently superseded by subsequent disclosures), eithercontained a material misrepresentation of fact or omitted to state a factnecessary to make the information disclosed not misleading in a materialrespect; or Intellectual Property 9.5 any member of the Wider Sygen Group is not the sole (save forco-ownership with any other members of the Wider Sygen Group) unencumbered legaland beneficial owner of or does not have licensed to it (on terms that (i) arenot unusual or onerous; (ii) will not be adversely affected by the acquisitionby Genus of the Wider Sygen Group; (iii) do not require the making of anypayment which is likely to have a material adverse effect on the business of theWider Sygen Group; and (iv) are either perpetual and irrevocable, or terminationwill not be likely to have a material adverse effect on the business of theWider Sygen Group) all intellectual property that is required or reasonablynecessary for the conduct of the business of the Wider Sygen Group in a mannerin all material respects similar to the manner in which it is currentlyconducted; or 9.6 any member of the Wider Sygen Group has (in the 6 years prior tothe Announcement Date) infringed in any material respect, any intellectualproperty of any third party, or is or has been alleged to have done so; or 9.7 there has been (in the 6 years prior to the Announcement Date)material unauthorised use, infringement or misappropriation of any intellectualproperty of any member of the Wider Sygen Group by any third party which wouldbe material and adverse in the context of the Wider Sygen Group taken as awhole; or 9.8 any third party has a licence (whether express or implied, writtenor unwritten) to use any material intellectual property of any member of theWider Sygen Group, and that any third party is entitled as a result ofacquiescence on the part of any member of the Wider Sygen Group to use anymaterial intellectual property (in each case where this would be likely to havea material adverse effect on the business of the Wider Sygen Group) of anymember of the Wider Sygen Group; or 9.9 (in the 6 years prior to the Announcement Date) any third partyhas alleged or suggested that any registered intellectual property, or anymaterial unregistered intellectual property, of the Wider Sygen Group is ormight be invalid or subject to revocation, or is not or might not be owned bythe Wider Sygen Group, and for the purpose of this condition 9, "intellectual property" means copyrightand rights in the nature of copyright, database rights, design rights,inventions, patents, trade marks, domain names, applications for any of theabove, confidential information or any other intellectual or industrial propertyrights, whether or not registered or capable of registration and whethersubsisting in the United Kingdom or any other part of the world; and "registeredintellectual property" means intellectual property which has been registered orin respect of which registration has been applied for. Certain Further Terms of the Offer The conditions are inserted for the benefit of Genus and no Sygen Shareholdershall be entitled to waive any of the conditions without the prior consent ofGenus. Subject to the requirements of the Panel, Genus reserves the right to waive allor any of conditions 2 to 9 (inclusive) in whole or in part. Each of conditions 1 to 9 shall be regarded as a separate condition and shallnot be limited by reference to any other condition. The Offer will lapse if the proposed acquisition of Sygen by Genus is referredto the Competition Commission before 1.00 p.m. (London time) on the firstclosing date or the time and date on which the Offer becomes or is declaredunconditional as to acceptances (whichever is the later). If the Offer lapses, it will cease to be capable of further acceptance andpersons accepting the Offer and Genus shall thereupon cease to be bound byacceptances submitted before the time the Offer lapses. The Offer will lapse unless all of the conditions relating to the Offer havebeen fulfilled or (if capable of waiver) waived by, or, where appropriate, havebeen determined by Genus to be, and remain satisfied by, midnight on the twentyfirst day after the later of: (i)the first closing date; or (ii) the date on which the Offer becomesunconditional as to acceptances or such later date as Genus may, with the consent of the Panel, decide. Genusshall be under no obligation to waive (if capable of waiver) or treat assatisfied any condition by a date earlier than the latest date specified abovefor its satisfaction even though the other conditions of the Offer may, at suchearlier date, have been waived or fulfilled and there are, at such earlier date,no circumstances indicating that any such conditions may not be capable offulfilment. If Genus is required by the Panel to make an offer for Sygen Shares under Rule 9of the Code, Genus may make such alterations to the conditions of the Offer setout above, including condition 1, as are necessary to comply with that Rule. Sygen Shares will be acquired by Genus with full title guarantee and fully paidup, free from all liens, equities, charges, equitable interests, encumbrances,rights of pre-emption and any other third party right and/or interests of anynature whatsoever and together with all rights attaching to them, now or in thefuture, including the right to receive and retain all dividends, interest andother distributions declared, paid or made after the date of the Offer Documentsave for the right to receive the 0.8 pence Dividend. The Offer will not be made, directly or indirectly, in, into or by use of themails of, or by any means or instrumentality (including, without limitation,telephonically or electronically) of interstate or foreign commerce of, or anyfacilities of a national securities exchange of, the Excluded Territories or anyother jurisdiction if to do so would constitute a violation of the relevant lawsof such jurisdiction. The Offer does not constitute an offer in the ExcludedTerritories or any such other jurisdiction and the Offer should not be acceptedby any such use, means, instrumentality or facilities or otherwise from orwithin the Excluded Territories or any such other jurisdiction. Accordingly,copies of this announcement and the Offer Document are not being and must not bemailed, transmitted or otherwise distributed in whole or in part, in, into orfrom the Excluded Territories or any such other jurisdiction and personsreceiving this announcement (including, without limitation, custodians, nomineesand trustees) must not mail or otherwise forward, distribute or send it in, intoor from the Excluded Territories or any such other jurisdiction. Doing so mayrender invalid any purported acceptance of the Offer. The Offer will be governed by English Law and the Code. APPENDIX II SOURCES AND BASES OF INFORMATION 1. General Unless otherwise stated, the financial information relatingto Sygen has been extracted from the audited consolidated financial statementsof Sygen for the year ended 30 June 2005. Unless otherwise stated, thefinancial information relating to Genus has been extracted from the auditedconsolidated financial statements of Genus for the financial period ended 31March 2005. 2. Value of the Acquisition The value placed by the Offer on the Existing Sygen Share Capital is based on295,280,580 Sygen Shares in issue on 27 October 2005 (the last Business Dayprior to the date of this announcement). 3. Share prices The closing price of a Sygen Share on 11 October 2005 is taken from the DailyOfficial List of the London Stock Exchange. The average closing price during thetwelve months up to and including 11 October 2005 is calculated by using theclosing prices during that period, which are derived from Datastream. Theaverage closing price is rounded to the nearest 0.01 pence. 4. Net Cash Position The reported net cash position of Sygen as at 30 June 2005 was £25.2 million.Based upon the number of Sygen Shares in issue on 11 October 2005, the value ofthe net cash position of Sygen on a per share basis as at 30 June 2005 is 8.53pence. The Offer Price, when aggregated with the 0.8 pence Dividend and theclosing price of 46.75 pence per Sygen Share as at 11 October 2005, each asadjusted on a per share basis for the exclusion of the net cash position, are55.47 pence and 38.22 pence respectively, implying a premium of 45.1 per cent. APPENDIX III DEFINITIONS"0.8 pence Dividend" the proposed net final dividend in respect of the year ended 30 June 2005 of 0.8 pence per Sygen Share which the Sygen Board has recommended and which (subject to the passing of the Final Dividend Resolution) should be paid on 25 November 2005 to Sygen Shareholders on the register on 28 October 2005"Accounting Date" 30 June 2005"Acquisition" the proposed purchase by Genus of the entire issued and to be issued share capital of Sygen pursuant to the terms of the Offer"Admission Document" the admission document of Genus being issued on the date of the Offer Document in relation to, inter alia, the Placing and Admission"Admission" the admission and re-admission of the Enlarged Share Capital to trading on AIM as described in the Admission Document"AIM Rules" the rules of AIM published by the London Stock Exchange from time to time"AIM" the AIM market of the London Stock Exchange"Announcement Date" 28 October 2005"Barclays" Barclays Bank PLC"Bridgewell" Bridgewell Securities Limited"certificated" or in "certificated a share or other security, title to which is recorded in theform" relevant register of the share or other security as being held in certificated form (that is, not in CREST)"closing price" the middle market price of a Sygen Share at the close of business on the day to which such price relates as derived from the Daily Official List of the London Stock Exchange"Code" or "City Code" the City Code on Takeover and Mergers"the Companies Act" or "the Act" the Companies Act 1985, as amended"Conditions" the conditions contained in Appendix I to this announcement"CREST Regulations" the Uncertificated Securities Regulations 2001 (SI 2001/3755) (as amended)"CREST" the Relevant System (as defined in the CREST Regulations) in respect of which CRESTCo Limited is the Operator (as defined in the CREST Regulations)"CRESTCo" CRESTCo Limited"CSFB" Credit Suisse First Boston (Europe) Limited"Enlarged Group" Genus, its subsidiaries and subsidiary undertakings following the Acquisition"Enlarged Share Capital" the issued ordinary share capital of Genus immediately following Admission"Excluded Territories" the United States, Canada, Australia, the Republic of South Africa, the Republic of Ireland and Japan"Existing Genus Share Capital" the issued ordinary share capital of Genus at the date of this announcement"Existing and to be Issued Sygen Share the issued ordinary share capital of Sygen at the date of thisCapital" announcement and all Sygen Shares unconditionally allotted or issued whilst the Offer remains open for acceptance as a result of the exercise of the options granted under the Sygen Share Schemes or otherwise"Existing Sygen Share Capital" the issued ordinary share capital of Sygen at the date of this announcement"Facilities Agreement" the term debt and working capital facilities agreements dated 26 October 2005 and made between, inter alia, Genus and Barclays"Final Dividend Resolution" the resolution to be proposed at the Sygen AGM to approve the payment of the 0.8 pence Dividend"first closing date" the date falling 21 days after the date on which the Offer Document is posted"Form of Acceptance" the form of acceptance and authority relating to the Offer which, in the case of Sygen Shares held in certificated form, will accompany the Offer Document"Genus" Genus plc"Genus Board" or "Genus Directors" the directors of Genus for the time being"Genus Group" Genus, its subsidiaries and subsidiary undertakings at the date of the Offer Document"Genus Shareholders" holders of Genus Shares at the date of the Offer Document"Genus Shares" ordinary shares of 10 pence each in Genus"JPMorgan Cazenove" JPMorgan Cazenove Limited"legal proceedings" actions, suits, proceedings, investigations, references or enquiries"London Stock Exchange" London Stock Exchange plc"Offer Document" the document to be sent to Sygen Shareholders containing the Offer and its terms and conditions"Offer Price" 63.2 pence per Sygen Share"Offer" the recommended offer to be made by Bridgewell on behalf of Genus to acquire all of the issued and to be issued Sygen Shares on the terms and subject to the conditions set out in the Offer Document and the Form of Acceptance and, where the context so requires, any subsequent revision, variation, extension or renewal thereof"Official List" the official list of the UK Listing Authority"Panel" the Panel on Takeovers and Mergers"Panmure Gordon" Panmure Gordon (Broking) Limited"PIC Asia" the Sygen Group's pig breeding division based in Asia"PIC Europe" the Sygen Group's pig breeding division based in Europe"Placing" the conditional placing by Panmure Gordon of the Placing Shares at the Placing Price in accordance with an agreement between Genus, Bridgewell and Panmure Gordon"Placing Price" 325 pence per Placing Share"Placing Shares" 16,923,080 new Genus Shares to be issued pursuant to the Placing"Regulatory Information Service" or " as defined in the AIM RulesRIS""relevant asset" land, property or other asset now or previously owned, occupied or made use of by any past or present member of the Wider Sygen Group"relevant persons" Governments, governmental, quasi-governmental, supranational, statutory, investigative, regulatory or administrative bodies or trade agencies, associations, institutions or courts, or professional or environmental bodies, or any other persons or bodies whatsoever in any jurisdiction"Sygen" Sygen International plc whose registered company number is 3215874 and whose registered office is at 2 Kingston Business Park, Kingston Bagpuize, Oxfordshire OX13 5FE"Sygen AGM" the annual general meeting of Sygen to be held on 2 November 2005 or any adjournment thereof"Sygen Board" or "Sygen Directors" the directors of Sygen for the time being"Sygen Group" Sygen, its subsidiaries and subsidiary undertakings at the date of the Offer Document"Sygen Option Holders" holders of options to subscribe for Sygen Shares under the Sygen Share Schemes"Sygen Share Schemes" the Sygen Share Option Plan (as amended), the Dalgety Senior Executive Share Option Scheme (as amended) and the Dalgety Senior Executive Share Option Scheme No. 2 (as amended)"Sygen Shareholders" holders of Sygen Shares"Sygen Shares" the existing unconditionally allotted or issued and fully paid ordinary shares of 10 pence each of Sygen and any further such shares which are unconditionally allotted or issued fully paid, or credited as fully paid, while the Offer remains open for acceptance (or before such earlier date as Genus may, subject to the Code, decide not being earlier than (a) the date on which the Offer becomes or is declared unconditional as to acceptances or (b), if later, the first closing date of the Offer)"substantial interest" a direct or indirect interest in 20 per cent. or more of the equity capital of an undertaking"SyAqua" the Sygen Group's shrimp breeding division"third party" person, firm, company or body"UK Listing Authority" the Financial Services Authority acting in its capacity as the competent authority for the purposes of part VI of the Financial Services and Markets Act 2000"uncertificated" or "in uncertificated in relation to a share or other security, a share or otherform" security, title to which is recorded on the relevant register of Sygen as being held in uncertificated form in CREST and which, by virtue of the CREST Regulations, may be transferred by means of CREST"United States" or "US" the United States of America, its territories and possessions, any state of the United States and the District of Columbia and all other areas subject to its jurisdiction"US Person" a US person as defined in Regulation S under the US Securities Act"US Securities Act" the US Securities Act of 1933, as amended, and the rules and regulations as promulgated there under"Wider Genus Group" Genus and its subsidiaries, subsidiary undertakings, associated undertakings and any other undertakings in which Genus and/or such subsidiaries or undertakings (aggregating their interests) have a substantial interest"Wider Sygen Group" Sygen and its subsidiaries, subsidiary undertakings, associated undertakings and any other undertakings in which Sygen and/or such subsidiaries or undertakings (aggregating their interests) have a substantial interest This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Genus