15th Jun 2007 07:01
Microgen PLC15 June 2007 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTOTHE UNITED STATES OF AMERICA, CANADA, AUSTRALIA OR JAPAN OR ANY JURISDICTIONWHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCHJURISDICTION FOR IMMEDIATE RELEASE 15 June 2007 Recommended Increased Cash Offer for Trace Group plc ("Trace") by Microgen plc ("Microgen") 1. Introduction On 25 May 2007, the Microgen Board and the Trace Independent Directors announcedthe terms of a recommended cash offer of 155 pence per Trace Share, assubsequently made by Microgen in its offer document issued on and dated 1 June2007 (the "Offer Document"), for the entire issued and to be issued ordinaryshare capital of Trace. Since the date of the Offer Document, Microgen hasacquired shares in Trace and as at 14 June 2007, the latest practicable dateprior to this announcement, Microgen owned 3,555,000 Trace Shares, representingapproximately 24.95 per cent. of the Trace Shares. On 13 June 2007, Tulip Holdings Limited ("Tulip") announced its revised offer of156 pence per Trace Share (the "Tulip Revised Offer"). The Microgen Board and the Trace Independent Directors are pleased to announcethat they have agreed the terms of a recommended increased cash offer of 180pence per Trace Share (the "Increased Cash Offer"). Microgen has also received an irrevocable undertaking, dated 14 June 2007, fromHerald Investment Management Limited ("Herald") totalling 1,127,880 TraceShares, representing approximately 7.92 per cent. of the Trace Shares to acceptthe Increased Cash Offer which will fall away in the event of an offer from athird party of not less than 200 pence per Trace Share or if the Increased CashOffer lapses or is withdrawn. Microgen therefore encourages Trace Shareholders to accept the Increased CashOffer from Microgen which represents a premium of approximately 15.4 per cent.to the Tulip Revised Offer of 156 pence per Trace Share. 2. The Increased Cash Offer The Increased Cash Offer will be made on the following basis: For each Trace Share 180 pence in cash The Increased Cash Offer will be on the same terms and subject to the sameconditions as set out in the Offer Document save as regards the price offered byMicrogen for each Trace Share, the formal terms of which will be set out in adocument relating to the Increased Cash Offer (the "Increased Cash OfferDocument") to be posted to shareholders shortly, together with a new form ofacceptance to accept the Increased Cash Offer. In particular, Microgen will onlydeclare the Increased Cash Offer unconditional as to acceptances to the extentit has received valid acceptances or has acquired voting shares representing notless than 51.5 per cent. of the voting share capital of Trace or such lesserpercentage as Microgen may decide provided that such amount is more than 50 percent. of the voting share capital of Trace. The Increased Cash Offer values the existing issued ordinary share capital ofTrace at approximately £25.6 million. The Increased Cash Offer represents: (i) a premium of approximately 101.1 per cent. to the Closing Price of 89.5 pence per Trace Share on 19 April 2007, the date immediately preceding the date of the Tulip Announcement and commencement of the Offer Period; (ii) a premium of approximately 33.3 per cent. to the Tulip Proposal of 135 pence per Trace Share in cash announced on 20 April 2007; (iii) a premium of approximately 15.4 per cent. to the Tulip Revised Offer of 156 pence per Trace Share in cash announced on 13 June 2007; (iv) a premium of approximately 88.5 per cent. to the average daily Closing Price of 95.5 pence per Trace Share during the six months prior to 19 April 2007, the date immediately preceding the date of the Tulip Announcement; (v) a premium of approximately 71.4 per cent to the highest Closing Price of 105pence per Trace Share over the five years prior to 19 April 2007, the date immediately preceding the date of the Tulip Announcement; 3. Finance and bank facilities Full acceptance of the Increased Cash Offer would require a maximum cash paymentof approximately £25.3 million, comprising approximately £5.4 million in respectof the 3,555,000 Trace Shares (representing approximately 24.95 per cent. of theTrace Shares) already acquired by Microgen (as at 14 June 2007) and approximately £19.9 million in respect of the outstanding issued and to be issued Trace Shares not already owned by Microgen, which will be funded out of Microgen's existing cash reserves and from committed bank facilities from LloydsTSB Bank plc that have been put in place for the purposes of the transaction. The bank facilities provide Microgen with a facility of up to £20 million in theform of a 364 day revolving credit loan facility together with additional termloan facilities upon which Microgen may draw as necessary. Utilising these cashreserves and bank facilities, Microgen will be in a position to declare the Increased Cash Offer unconditional as to acceptances when it has received valid acceptances of the Increased Cash Offer or has acquired voting rights representing not less than 51.5 per cent. of the voting share capital of Trace or such lesser percentage as Microgen may decide provided that such amount is more than 50 per cent. of the voting share capital of Trace. Arbuthnot is satisfied that sufficient financial resources are available for Microgen to satisfy the consideration payable as a result of full acceptance of the Increased Cash Offer. 4. Recommendation of the Increased Cash Offer The Trace Independent Directors, who have been so advised by Shore Capital,consider the terms of the Increased Cash Offer to be fair and reasonable. Inproviding advice to the Trace Independent Directors, Shore Capital has takeninto account the Trace Independent Directors' commercial assessments.Accordingly the Trace Independent Directors unanimously recommend that all TraceShareholders accept the Increased Cash Offer. Daniel Chapchal, Chairman of Trace and a Trace Independent Director, hasundertaken to procure the acceptance of the Increased Cash Offer in respect ofthe 10,000 Trace Shares (representing 0.07 per cent. of the Trace Shares) heldin his SIPP. In addition, Colin Clarke, a Trace Independent Director, hasundertaken to accept the Increased Cash Offer in respect of the 1,426,453 TraceShares (representing 10.01 per cent. of the Trace Shares) owned by him and hisconnected parties upon the lapsing of his existing irrevocable commitment to theTulip Revised Offer. Such lapsing will occur in the event that the Tulip RevisedOffer lapses or is withdrawn. The Independent Directors consider it likely that the Tulip Revised Offer willin due course lapse or be withdrawn as a result of their recommendation of theIncreased Cash Offer, which is at a premium of approximately 15.4 per cent. tothe Tulip Revised Offer. 5. Disclosure of interest in Trace Shares Microgen (as at 14 June 2007, the latest practicable date prior to thisannouncement) owned 3,555,000 Trace Shares, representing approximately 24.95 percent. of the voting share capital of Trace. Microgen has also received anirrevocable undertaking from Herald totalling 1,127,880 Trace shares,representing approximately 7.92 per cent. of the Trace Shares to acceptMicrogen's Increased Cash Offer as detailed in paragraph 1 above as well as anundertaking from the Independent Directors to accept the Increased Cash Offer inrespect of, in aggregate, 1,436,453 Trace Shares representing 10.08 per cent. ofthe Trace Shares as described in paragraph 4 above. Save for the interests disclosed above (as at 14 June 2007, the latestpracticable date prior to this announcement), neither Microgen, nor any of theDirectors of Microgen, nor, so far as Microgen is aware, any person acting inconcert with Microgen for the purposes of the Increased Cash Offer has aninterest in or right to subscribe in respect of any relevant securities of Traceor had any short positions in respect of relevant securities of Trace or hadborrowed or lent any relevant securities of Trace. 6. General Save for the increased cash offer price of 180 pence per Trace Share, theIncreased Cash Offer will be made on the same terms and subject to the sameconditions as set out in the Offer Document. The Increased Cash Offer Documentsetting out the formal terms of the Increased Cash Offer will be sent to TraceShareholders shortly, together with a new form of acceptance to accept theIncreased Cash Offer. The Increased Cash Offer Document and the new form ofacceptance will be governed by English law and subject to the applicablerequirements of the Code and will explain how Trace Shareholders can accept theIncreased Cash Offer. This announcement does not constitute, or form any part of, any offer for, orsolicitation of, any offer for securities. Any acceptance or other response tothe Increased Cash Offer should be made only on the basis of the informationcontained in the Offer Document as amended (save only as to the increased cashoffer price) by the Increased Cash Offer Document. Enquiries: Microgen plc Tel: +44 (0) 1252 772 300Martyn RatcliffePhilip Wood Arbuthnot Securities Limited Tel: +44 (0) 20 7012 2000(Financial adviser and broker to Microgen in relation to the Offer)Ian WilliamsRichard DunnRichard Tulloch Financial Dynamics Tel: +44 (0) 20 7831 3113(Public relations adviser to Microgen)Giles Sanderson Trace Group plc Tel: +44 (0) 20 7825 1000Daniel Chapchal Tel: +44 (0) 7836 512 549David Begg Tel: +44 (0) 20 7825 1000Robin Woodall Tel: +44 (0) 7740 928 399 Shore Capital and Corporate Limited Tel: +44 (0) 20 7408 4090(Financial adviser to Trace)Alex BorrelliPascal Keane Terms herein have the same meaning as in the Offer Document dated 1 June 2007,save where the context requires otherwise. Arbuthnot Securities Limited ("Arbuthnot"), which is authorised and regulated inthe United Kingdom by the Financial Services Authority, is acting exclusivelyfor Microgen and no one else in connection with the Increased Cash Offer andwill not be responsible to anyone other than Microgen for providing theprotections afforded to clients of Arbuthnot nor for providing advice inrelation to the Increased Cash Offer, or the contents of this announcement orany matter referred to herein. Arbuthnot has approved this announcement for the purposes of section 21 of theFinancial Services and Markets Act 2000. The principal place of business ofArbuthnot is Arbuthnot House, 20 Ropemaker Street, London EC2Y 9AR. Shore Capital and Corporate Limited ("Shore Capital"), which is authorised andregulated in the United Kingdom by the Financial Services Authority, is actingexclusively for Trace and no one else in connection with the Increased CashOffer and will not be responsible to anyone other than Trace for providing theprotections afforded to clients of Shore Capital nor for providing advice inrelation to the Increased Cash Offer, the content of this announcement or anymatter referred to herein. This announcement is not intended to and does not constitute, or form any partof, an offer or an invitation to purchase or sell any securities or thesolicitation of any vote or approval in any jurisdiction pursuant to theIncreased Cash Offer or otherwise. The Increased Cash Offer is governed by theterms of the Offer Document and Form of Acceptance as amended (in relation onlyto the offer price per Trace Shares) by an Increased Cash Offer Document, and,in relation to certificated Trace Shares, the new form of acceptance. Microgenintends to dispatch such documents to Trace Shareholders (and, for informationonly, to Trace Optionholders) shortly. The Increased Cash Offer Document and thenew form of acceptance will together contain the full terms and conditions ofthe Increased Cash Offer, including details of how to accept the Increased CashOffer. Any acceptance or other response to the Increased Cash Offer should bemade only on the basis of the information contained in the Increased Cash OfferDocument and the new form of acceptance. The Increased Cash Offer will besubject to English Law. The laws of relevant jurisdictions may affect theavailability of the Increased Cash Offer to overseas persons. Overseas persons,or persons who are subject to the laws of any jurisdiction other than the UnitedKingdom, should inform themselves about and observe any applicable legal andregulatory requirements. The Increased Cash Offer Document will be available forpublic inspection in the United Kingdom. Unless otherwise determined by Microgen, the Increased Cash Offer will not bemade, directly or indirectly, in or into the United States or by use of themails of, or by any means or instrumentality (including, without limitation,facsimile, internet, email or other electronic transmission, telex or telephone)of inter-state or foreign commerce of, or any facility of a national, state orother securities exchange of, the United States, nor will it be made directly orindirectly in or into Canada, Australia, Japan or any Restricted Jurisdiction,and the Increased Cash Offer will not be capable of acceptance by any such use,means, instrumentality or facility or from within the United States, Canada,Australia, Japan or any Restricted Jurisdiction. Accordingly, copies of thisannouncement are not being, will not be and must not be, directly or indirectly,mailed or otherwise forwarded, transmitted, distributed or sent in, into or fromthe United States, Canada, Australia, Japan or any Restricted Jurisdiction, andpersons receiving this announcement (including, without limitation, custodians,nominees and trustees) must not mail, forward, distribute or send it in, into orfrom the United States, Canada, Australia, Japan or any Restricted Jurisdiction.Doing so may render invalid any purported acceptance of the Increased CashOffer. Any persons (including custodians, nominees and trustees) who areoverseas persons or who would, or otherwise intend to, mail or otherwiseforward, transmit, distribute or send this announcement, the Increased CashOffer Document, the new form of acceptance or any related document outside theUnited Kingdom or to any overseas person should seek appropriate advice beforedoing so. Further details in relation to Overseas Trace Shareholders will becontained in the Increased Cash Offer Document. Dealing disclosure requirements Under the provisions of Rule 8.3 of the Takeover Code (the "Code"), if anyperson is, or becomes, "interested" (directly or indirectly) in 1% or more ofany class of "relevant securities" of Trace, all "dealings" in any "relevantsecurities" of that company (including by means of an option in respect of, or aderivative referenced to, any such "relevant securities") must be publiclydisclosed by no later than 3.30 pm (London time) on the London business dayfollowing the date of the relevant transaction. This requirement will continueuntil the date on which the Increased Cash Offer becomes, or is declared,unconditional as to acceptance, lapses or is otherwise withdrawn or on which the"offer period" otherwise ends. If two or more persons act together pursuant toan agreement or understanding, whether formal or informal, to acquire an"interest" in "relevant securities" of Trace they will be deemed to be a singleperson for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevantsecurities" of Trace by Microgen or Trace or by any of their respective"associates" must be disclosed by no later than 12.00 noon (London time) on theLondon business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose "relevantsecurities" "dealings" should be disclosed, and the number of such securities inissue, can be found on the Panel's website at www.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative reference to, securities. Terms in quotation marks are defined in the Code, which can also be found on thePanel's website. If you are in any doubt as to whether or not you are requiredto disclose a "dealing" under Rule 8, you should consult the Panel. Appendix Sources of information and bases of calculation (a) The value of the Increased Cash Offer by reference to the existing issued and voting ordinary share capital of Trace is based on the 14,248,815 Trace Shares in issue on 14 June 2007 (the last business day prior to the date of this announcement). (b) The Closing Prices of Trace Shares are derived from the Daily Official List. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Aptitude