Publication of Scheme Document

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

FOR IMMEDIATE RELEASE

8 April 2016

Recommended all share merger of

Skyepharma PLC ("Skyepharma" or the "Company") and

Vectura Group plc ("Vectura") 

Publication of Scheme Document

On 16 March 2016, the boards of Skyepharma and Vectura announced that they had reached agreement regarding the terms of a recommended merger (the "Merger"). It is intended that the Merger will be implemented by way of a court sanctioned scheme of arrangement under Part 26 of the Companies Act 2006 (the "Scheme") through which Vectura will acquire the entire issued and to be issued ordinary share capital of Skyepharma.

The Skyepharma Board is pleased to announce that the scheme document, which sets out, amongst other things, the full terms and conditions of the Scheme, an explanatory statement pursuant to section 897 of the Companies Act, an indicative timetable of principal events, notices of the required meetings and details of the action to be taken by Skyepharma Shareholders, is being sent to Skyepharma Shareholders today and has been published on the Skyepharma website at http://www.skyepharma.com (the "Scheme Document").

Together with the Scheme Document, Forms of Proxy for the Court Meeting and the Skyepharma General Meeting and a Form of Election are also being sent to Skyepharma Shareholders today.

Skyepharma Shareholders will be able to inspect a combined circular and prospectus issued by Vectura in relation to the approval of the Merger by Vectura Shareholders and the New Vectura Shares to be allotted and issued to Skyepharma Shareholders pursuant to the Scheme (the "Combined Circular/Prospectus"). The Combined Circular/Prospectus, for which Vectura and the Vectura Directors are responsible, is being made available today on the Vectura website, at http://www.vectura.com and also on the Skyepharma website at http://www.skyepharma.com.

Capitalised terms used but not defined in this announcement have the meanings set out in the Scheme Document.

Notices to the Court and Skyepharma General Meeting

As described in the Scheme Document, to be effective, the Scheme will require, amongst other things, the approval of Scheme Shareholders at the Court Meeting, the passing of a Special Resolution at the Skyepharma General Meeting and the subsequent sanction of the Court. The Merger is also subject to the satisfaction or waiver of the Conditions and certain further terms that are set out in the Scheme Document.

The Court Meeting and the Skyepharma General Meeting are scheduled to be held at 12.00 p.m. and 1.00 p.m. (or as soon thereafter as the Court Meeting has concluded) respectively, on 5 May 2016 at Ashurst LLP, Broadwalk House, 5 Appold Street, London, EC2A 2HA, United Kingdom.

It is important that, for the Court Meeting in particular, as many votes as possible are cast so that the Court may be satisfied that there is a fair and reasonable representation of Scheme Shareholder opinion. Scheme Shareholders are therefore strongly urged to complete, sign and return the Forms of Proxy (once received), or, alternatively, submit your proxy by electronic means, for both the Court Meeting and the Skyepharma General Meeting, as soon as possible.

Subject to approval at the relevant meetings, the satisfaction or waiver of the other Conditions set out in the Scheme Document and the sanction of the Court, the Scheme is expected to become effective on or around 28 June 2016.

Timetable

The Scheme Document contains an expected timetable of principal events relating to the Scheme, which is also attached as an Appendix to this announcement. If any of the key dates set out in the timetable change, Skyepharma will give notice of this change by issuing an announcement via a Regulatory Information Service.

Enquiries:

Important notices relating to financial advisers

Lazard & Co., Limited ("Lazard"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority ("FCA"), is acting exclusively as financial adviser for Skyepharma and no one else in connection with the matters described in this announcement and will not be responsible to anyone other than Skyepharma for providing the protections afforded to clients of Lazard nor for providing advice in relation to the matters referred to in this announcement. Neither Lazard nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Lazard in connection with this announcement, any statement contained herein or otherwise.

J.P. Morgan Limited, which conducts its UK investment banking businesses as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), is authorised and regulated in the United Kingdom by the FCA. J.P. Morgan Cazenove is acting exclusively for Vectura and no one else in connection with the Merger and the contents of this announcement and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than Vectura for providing the protections afforded to clients of J.P. Morgan Cazenove or for providing advice in relation to the Merger, the contents of this announcement or any other matters referred to herein.

N M Rothschild & Sons Limited ("Rothschild"), which is authorised by the Prudential Regulation Authority ("PRA") and regulated in the United Kingdom by the FCA and the PRA, is acting exclusively for Vectura and for no one else in connection with the Merger and the contents of this announcement and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than Vectura for providing the protections afforded to clients of Rothschild, or for providing advice in relation to the Merger, the contents of this announcement or any other matters referred to herein.

Further information

This announcement is for information purposes only and is not intended to, and does not, constitute or form part of any offer, invitation, inducement or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of or exercise rights in respect of any securities, or the solicitation of any vote or approval of an offer to buy securities in any jurisdiction, pursuant to the Merger or otherwise, nor shall there be any sale, issuance or transfer of securities of Skyepharma or Vectura pursuant to the Merger in any jurisdiction in contravention of applicable law. The Merger is to be implemented by way of the Scheme pursuant to the terms of the Scheme Document, which contains the full terms and conditions of the Merger, including details of how to vote in respect of the Scheme. Any decision, vote or other response in respect of the Merger should be made only on the basis of information contained in the Scheme Document. The Combined Circular/Prospectus will be made available by Vectura on its website at www.vectura.com and by Skyepharma on its website at www.skyepharma.com.

Skyepharma urges Skyepharma Shareholders to read the Scheme Document and the Combined Circular/Prospectus because they will contain important information in relation to the Merger, the New Vectura Shares, and the Enlarged Group.

This announcement does not constitute a prospectus or prospectus-equivalent document.

Overseas jurisdictions

The release, publication or distribution of this announcement in, into or from jurisdictions other than the United Kingdom may be restricted by the laws of those jurisdictions and therefore persons into whose possession this announcement comes should inform themselves about, and observe, any applicable restrictions. Any failure to comply with such restrictions may constitute a violation of the securities laws of such jurisdictions.

This announcement is not intended to, and does not, constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval pursuant to the Scheme or otherwise, in any jurisdiction in which such offer, invitation or solicitation is unlawful. Nothing in this announcement should be relied upon for any other purpose.

The implications of the Merger for persons resident in, or citizens of, jurisdictions outside the United Kingdom may be affected by the laws of the relevant jurisdictions. Such Overseas Shareholders should inform themselves about and observe any applicable legal requirements. It is the responsibility of each Overseas Shareholder to satisfy itself as to the full observance of the laws of the relevant jurisdiction in connection therewith, including the obtaining of any governmental, exchange control or other consents which may be required, or the compliance with other necessary formalities which are required to be observed and the payment of any issue, transfer or other taxes due in such jurisdiction.

This announcement has been prepared for the purposes of complying with English law and the Takeover Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom. Overseas Shareholders should consult their own legal and tax advisers with regard to the legal and tax consequences of the Scheme to their particular circumstances.

All Skyepharma Shareholders (including, without limitation, nominees, trustees or custodians) who would, or otherwise intend to, forward this announcement to any jurisdiction outside the United Kingdom, should seek appropriate independent professional advice before taking any action.

The New Vectura Shares have not been and will not be registered under the US Securities Act or under the securities laws of any state or other jurisdiction of the United States and are expected to be issued in reliance upon the exemption from the registration requirements of the US Securities Act provided by Section 3(a)(10) . US persons should note that the Scheme relates to the shares of an English company which are not registered under the US Exchange Act and is being implemented under English company law. Neither the tender offer rules nor the proxy solicitation rules under the US Exchange Act will apply to the Scheme. The Scheme will be subject to the disclosure requirements and practices applicable in the United Kingdom to mergers implemented by schemes of arrangement, which differ from the disclosure requirements of the US proxy solicitation rules and tender offer rules. The financial statements included in the Scheme Document have been prepared in accordance with accounting standards applicable in the United Kingdom and may not be comparable to the financial statements of US companies.

The New Vectura Shares have not been approved or disapproved by the SEC, any state securities commission in the United States or any other US regulatory authority, nor have such authorities passed upon or determined the fairness or merits of the New Vectura Shares or upon the adequacy or accuracy of the information contained in this announcement. Any representation to the contrary is a criminal offence in the United States.

If, in the future, Vectura exercises the right to implement the Merger by way of a takeover offer, the Takeover Offer will be made in compliance with procedural and filing requirements of the US securities laws, including under Section 14(e) of the US Exchange Act and Regulation 14E thereunder.

In addition to any such Takeover Offer, Vectura, certain affiliated companies and the nominees or brokers (acting as agents) may make certain purchases of shares in Skyepharma outside such Takeover Offer during the period in which such Takeover Offer would remain open for acceptance, such as in open market or privately negotiated purchases.

Vectura and Skyepharma are organised under the laws of England. Some or all of the officers and directors of Vectura and Skyepharma are residents of countries other than the United States. The significant majority of the assets of Vectura and Skyepharma are located outside the United States. As a result, it may not be possible to enforce rights and claims US persons may have arising under the US federal securities laws or the laws of any state or territory within the United States. It may not be possible to sue Vectura or Skyepharma or their respective officers or directors in a non-US court for violations of US securities laws. It may be difficult to compel Vectura, Skyepharma and their respective affiliates to subject themselves to the jurisdiction and judgment of a US court.

Dealing and Opening Position Disclosure requirements

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the Offer Period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of: (i) the offeree company; and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. (London time) on the 10th business day following the commencement of the Offer Period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure. Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3. Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the Offer Period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0) 20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication on website and hard copies

A copy of this announcement will be made available, free of charge and subject to certain restrictions relating to persons in Restricted Jurisdictions, on Skyepharma's website at http://www.skyepharma.com/ by no later than 12 noon (London time) on the Business Day following the date of this announcement. For the avoidance of doubt, neither the content of Skyepharma's or Vectura's websites nor any website accessible by hyperlinks to such websites are incorporated into, or form part of, this announcement.  

Skyepharma Shareholders and Vectura Shareholders may request a hard copy of this announcement (and any information incorporated by reference into this announcement) by contacting Asha Tanwar of J.P. Morgan Cazenove at [email protected] or by submitting a request in writing to Asha Tanwar at J.P. Morgan Cazenove, 25 Bank Street, London, E14 5JP or Maxime Menu of Lazard at [email protected] or by submitting a request in writing to Maxime Menu at Lazard, at 50 Stratton Street, London, W1J 8LL. It is important that you note that unless you make such a request, a hard copy of this announcement and any such information incorporated by reference into it will not be sent to you. You may also request that all future documents, announcements and information to be sent to you in relation to the Merger should be in hard copy form.

Each of the Skyepharma Directors accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of each of the Skyepharma Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of that information.

If you are in any doubt about the contents of this announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or from an independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

Appendix

EXPECTED TIMETABLE OF PRINCIPAL EVENTS(1)

(1) These times and dates are indicative only and will depend, among other things, on the date upon which the Court sanctions the Scheme and the date on which the Conditions are satisfied or, if capable of waiver, waived. The timetable is also dependent on when the Court Order sanctioning the Scheme is delivered to the Registrar of Companies. Skyepharma will give notice of the change(s) by issuing an announcement through a Regulatory Information Service and, if required by the Panel, post notice of the change(s) to Skyepharma Shareholders and persons with information rights.

(2) It is requested that blue Forms of Proxy for the Court Meeting be lodged before 12.00 p.m. on 3 May 2016 or, if the Court Meeting is adjourned, not later than 48 hours before the time appointed for the holding of the adjourned meeting. However, blue Forms of Proxy not so lodged may be handed to the Chairman of the Court Meeting before the taking of the poll at the Court Meeting.

(3) White Forms of Proxy for the Skyepharma General Meeting must be lodged before 1.00 p.m. on 3 May 2016 in order for it to be valid or, if the Skyepharma General Meeting is adjourned, not later than 48 hours (excluding any part of a day that is not a working day) before the time appointed for the holding of the adjourned meeting. White Forms of Proxy cannot be handed to the Chairman of the Skyepharma General Meeting at that meeting.

(4) If either of the Skyepharma Shareholder Meetings is adjourned, the Voting Record Time for the relevant adjourned meeting will be 6.00 p.m. on the date two calendar days before the date set for the adjourned meeting.

(5) Or as soon thereafter as the Court Meeting has been concluded or adjourned.

(6) This date may be extended to such date as Skyepharma and Vectura may, with the consent of the Panel, agree and the Court (if required) may allow.

All references in this announcement to times are to times in London (unless otherwise stated).