REG - Dechra Pharmaceutcls - Scheme of Arrangement becomes Effective

Dechra PharmaceuticalsAnnouncement

16/01/2024 10:30

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RNS Number : 8602Z  Dechra Pharmaceuticals PLC  16 January 2024

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

FOR IMMEDIATE RELEASE

 

16 January 2024

 

RECOMMENDED CASH ACQUISITION

of

Dechra Pharmaceuticals PLC ("Dechra" or the "Company")

by

Freya Bidco Limited ("Bidco")

(a newly formed company to be indirectly owned by (i) EQT X EUR SCSp and EQT X
USD SCSp, each acting through its manager (gérant) EQT Fund Management S.à
r.l., and (ii) Luxinva S.A.)

Scheme of Arrangement becomes Effective

On 2 June 2023, the boards of directors of Dechra and Bidco announced they had
reached agreement on the terms and conditions of a recommended cash
acquisition by Bidco of the entire issued, and to be issued, ordinary share
capital of Dechra (the "Acquisition"). The Acquisition is being implemented by
means of a Court-sanctioned scheme of arrangement under Part 26 of the
Companies Act 2006 (the "2006 Act") (the "Scheme").

 

The circular in relation to the Scheme, including full details of the
Acquisition, was published on 26 June 2023 (the "Scheme Document").
Capitalised terms used but not otherwise defined in this announcement have the
meanings set out in the Scheme Document. All references to times in this
announcement are to London, United Kingdom times, unless otherwise stated.

 

On 20 July 2023, the requisite majority of Scheme Shareholders voted to
approve the Scheme at the Court Meeting and the requisite majority of Dechra
Shareholders voted to pass the Special Resolution to implement the Scheme,
including the amendment of Dechra's articles of association, at the General
Meeting.

 

On 12 January 2024, Dechra announced that the Court had sanctioned the Scheme
at the Sanction Hearing held earlier on the same date.

 

Dechra and Bidco are pleased to announce that, following delivery of a copy of
the Court Order (together with a copy of the Scheme and all documents required
to be annexed thereto) to the Registrar of Companies, the Scheme has today
become Effective in accordance with its terms and, pursuant to the Scheme, the
entire issued share capital of Dechra is now owned by Bidco.

 

Suspension and cancellation of admission to listing and trading of Dechra
Shares

 

The admission of the Dechra Shares to the premium listing segment of the
Financial Conduct Authority's Official List (the "Official List") and the
admission of the Dechra Shares to trading on the London Stock Exchange plc's
main market for listed securities (the "Main Market"), and therefore dealings
in Dechra Shares, were suspended with effect from 7:30 a.m. this morning. As a
result of the Scheme having become Effective, share certificates in respect of
the Scheme Shares have ceased to be valid documents of title and entitlements
to Scheme Shares held in uncertificated form in CREST are being cancelled.

 

Applications have been made to the Financial Conduct Authority and the London
Stock Exchange in relation to the cancellation of the listing of the Dechra
Shares from the Official List and for the cancellation of the admission to
trading of the Dechra Shares on the Main Market, both of which are expected to
take effect by 7.30 a.m. on 17 January 2024.

 

As a result of this announcement, Dechra is no longer in an "Offer Period" as
defined in the Takeover Code and accordingly the dealing disclosure
requirements previously notified to investors no longer apply.

 

Consideration and settlement

 

In accordance with the terms of the Scheme, a Scheme Shareholder on the
register of members of Dechra at the Scheme Record Time, being 6.00 p.m. on 15
January 2024, will be entitled to receive 3,875 pence in cash for each Scheme
Share held. As set out in the Scheme Document, settlement of the consideration
to which any Scheme Shareholder is entitled will be effected by way of
electronic payment or the despatch of cheques or the crediting of CREST
accounts (for Scheme Shareholders holding Scheme Shares in certificated form
and in uncertificated form respectively) as soon as practicable and in any
event not later than 14 days after the Effective Date (being 30 January 2024).

 

Board Changes

 

As the Scheme has now become Effective, Dechra duly announces that, as of
today's date all of the Non-Executive Directors of Dechra have tendered their
resignation and stepped down from the Dechra Board. Ian Page and Paul Sandland
will remain as directors on the Dechra Board.

 

 

Enquiries:

 Dechra                                                                                        +44 16 0681 4730

 Ian Page, Chief Executive Officer

 Paul Sandland, Chief Financial Officer

 Jonny Armstrong, Head of Investor Relations
 Investec Bank plc (Sole Financial Adviser and Corporate Broker to Dechra)                     +44 20 7597 5970

 Chris Treneman

 Bruce Garrow

 David Anderson
 Tooley Street Communication (PR Adviser to Dechra)                                            +44 77 8570 3523

 Fiona Tooley, Director
 EQT                                                                                           +44 77 1534 1608

 Finn McLaughlan
 BofA Securities (Joint Financial Adviser to EQT, Luxinva S.A. and Bidco)                      +44 20 7628 1000

 Laurent Dhome

 Geoff Iles

 Roy Wouters

 Antonia Rowan

 Roman Makovitskiy
 Morgan Stanley (Joint Financial Adviser to EQT, Luxinva S.A. and Bidco)                       +44 20 7425 8000

 Anthony Zammit

 James Talbot

 Tom Perry
 FGS Global (PR Adviser to EQT, Luxinva S.A. and Bidco)                                        +44 20 7251 3801

 Faeth Birch                                                                                     EQT-LON@fgsglobal.com

 Chris
 Ryall

 Sophia Johnston

 

 

DLA Piper UK LLP is acting as legal adviser to Dechra.

 

Kirkland & Ellis International LLP is acting as legal adviser to Bidco
and EQT, and Freshfields Bruckhaus Deringer LLP is acting as legal adviser to
Luxinva S.A. and ADIA.

 

IMPORTANT NOTICES

Merrill Lynch International ("BofA Securities"), which is authorised by the
Prudential Regulation Authority ("PRA") and regulated by the Financial Conduct
Authority ("FCA") and the PRA in the United Kingdom, is acting exclusively for
EQT, Luxinva S.A. and Bidco and for no one else and will not be responsible to
anyone other than EQT, Luxinva S.A. and Bidco for providing the protections
afforded to its clients or for providing advice in connection with the
Acquisition or any matter referred to herein. Neither BofA Securities, 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 BofA Securities in
connection with this Announcement, any statement contained herein or
otherwise.

Morgan Stanley & Co. International plc ("Morgan Stanley"), which is
authorised by the PRA and regulated by the PRA and the FCA in the United
Kingdom, is acting exclusively for EQT, Luxinva S.A. and Bidco and for no one
else in connection with the Acquisition. In connection with such matters,
Morgan Stanley, its affiliates and their respective directors, officers,
employees and agents will not regard any other person as their client, nor
will they be responsible to any other person for providing the protections
afforded to their clients or for providing advice in connection with the
Acquisition, the contents of this Announcement or any other matter referred to
herein.

Investec Bank plc ("Investec"), which is authorised in the United Kingdom by
the PRA and regulated in the UK by the FCA and the PRA, is acting exclusively
for Dechra and no one else in connection with the Acquisition and shall not be
responsible to anyone other than Dechra for providing the protections afforded
to clients of Investec, nor for providing advice in connection with the
Acquisition or any matter referred to herein.

The statements contained in this Announcement are made as at the date of this
Announcement, unless some other time is specified in relation to them, and
service of this Announcement shall not give rise to any implication that there
has been no change in the facts set forth in this Announcement since such
date.

The statements contained in this Announcement are not to be construed as
legal, business, financial or tax advice.

This Announcement is for information purposes only and is not intended to, and
does not, constitute, or form part of, an offer, invitation or the
solicitation of an offer to purchase, otherwise acquire, subscribe for, sell
or otherwise dispose of, any securities or the solicitation of any vote or
approval in any jurisdiction pursuant to the Acquisition or otherwise, nor
shall there be any sale, issuance or transfer of securities of Dechra in any
jurisdiction in contravention of applicable law. The Acquisition will be
implemented solely pursuant to the terms of the Scheme Document (or, if the
Acquisition is implemented by way of an Offer, the offer document), which
contains the full terms and conditions of the Acquisition, including details
of how to vote in respect of the Acquisition. Any vote in respect of the
Scheme or other response in relation to the Acquisition should be made only on
the basis of the information contained in the Scheme Document (or, if the
Acquisition is implemented by way of an Offer, the offer document). This
Announcement does not constitute a prospectus or prospectus-equivalent
document.

The information contained herein does not constitute an offer to sell, nor a
solicitation of an offer to buy, any security, and may not be used or relied
upon in connection with any offer or solicitation. Any offer or solicitation
in respect of EQT and EQT Funds will be made only through a confidential
private placement memorandum and related documents which will be furnished to
qualified investors on a confidential basis in accordance with applicable laws
and regulations. The information contained herein is not for publication or
distribution to persons in the U.S. Any securities referred to herein have not
been and will not be registered under the U.S. Securities Act of 1933, as
amended, and may not be offered or sold without registration thereunder or
pursuant to an available exemption therefrom. Any offering of securities to be
made in the U.S. would have to be made by means of an offering document that
would be obtainable from the issuer or its agents and would contain detailed
information about the issuer of the securities and its management, as well as
financial information. The securities may not be offered or sold in the U.S.
absent registration or an exemption from registration.

The Acquisition will be subject to English law, the jurisdiction of the Court,
and the applicable requirements of the Takeover Code, the Panel, the London
Stock Exchange, the FCA, the Listing Rules and the Registrar of Companies.

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 personal, financial, tax
and legal advice from your stockbroker, bank manager, solicitor, accountant or
other independent professional adviser duly authorised under the Financial
Services and Markets Act 2000 (as amended) if you are in the United Kingdom,
or from another appropriately authorised independent financial adviser if you
are taking advice in a territory outside the United Kingdom.

Overseas Shareholders

The release, publication or distribution of this Announcement in or into
jurisdictions other than the UK may be restricted by law and therefore any
persons who are subject to the law of any jurisdiction other than the UK
should inform themselves of, and observe, any applicable legal or regulatory
requirements. Any failure to comply with such requirements may constitute a
violation of the securities laws of any such jurisdiction. To the fullest
extent permitted by applicable law, the companies and persons involved in the
Acquisition disclaim any responsibility or liability for the violation of such
restrictions by any person. This Announcement has been prepared in accordance
with and for the purpose of complying with English law, the Takeover Code, the
Market Abuse Regulation, the Listing Rules and the Disclosure Guidance and
Transparency Rules and information disclosed may not be the same as that which
would have been prepared in accordance with the laws of jurisdictions outside
England.

The availability of the Acquisition to Dechra Shareholders who are not
resident in and citizens of the UK may be affected by the laws of the relevant
jurisdictions in which they are located or of which they are citizens. Persons
who are not resident in the UK should inform themselves of, and observe, any
applicable legal or regulatory requirements of their jurisdictions. In
particular, the ability of persons who are not resident in the United Kingdom
to vote their Dechra Shares with respect to the Scheme at the Court Meeting,
or to appoint another person as proxy to vote at the Court Meeting on their
behalf, may be affected by the laws of the relevant jurisdictions in which
they are located. Any failure to comply with the applicable restrictions may
constitute a violation of the securities laws of any such jurisdiction. To the
fullest extent permitted by applicable law, the companies and persons involved
in the Acquisition disclaim any responsibility or liability for the violation
of such restrictions by any person.

Unless otherwise determined by Bidco or required by the Takeover Code, and
permitted by applicable law and regulation, the Acquisition will not be made
available, directly or indirectly, in, into or from a Restricted Jurisdiction
or any other jurisdiction where to do so would violate the laws in that
jurisdiction and no person may vote in favour of the Scheme by any such use,
means, instrumentality or form within a Restricted Jurisdiction or any other
jurisdiction if to do so would constitute a violation of the laws of that
jurisdiction. Copies of this Announcement and any formal documentation
relating to the Acquisition are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in or into or
from any Restricted Jurisdiction or any other jurisdiction where to do so
would violate the laws of that jurisdiction and persons receiving such
documents (including, without limitation, agents, custodians, nominees and
trustees) must not mail or otherwise forward, distribute or send them in or
into or from any Restricted Jurisdiction. Doing so may render invalid any
related purported vote in respect of the Acquisition. If the Acquisition is
implemented by way of an Offer (unless otherwise permitted by applicable law
and regulation), the Offer may not be made directly or indirectly, in or into,
or by the use of mails or any means or instrumentality (including, but not
limited to, facsimile, e-mail or other electronic transmission, telex or
telephone) of interstate or foreign commerce of, or of any facility of a
national, state or other securities exchange of any Restricted Jurisdiction
and the Offer may not be capable of acceptance by any such use, means,
instrumentality or facilities.

Further details in relation to overseas shareholders are included in the
Scheme Document (or, if the Acquisition is implemented by way of an Offer,
will be included in the offer document).

Notice to U.S. Dechra Shareholders

The Acquisition relates to the shares of an English company and is being made
by means of a scheme of arrangement provided for under the laws of England and
Wales. A transaction effected by means of a scheme of arrangement is not
subject to the tender offer or proxy solicitation rules under the U.S.
Securities Exchange Act of 1934 (the "U.S. Exchange Act"). Accordingly, the
Acquisition is subject to the disclosure requirements and practices applicable
in the UK to schemes of arrangement which differ from the disclosure
requirements of the U.S. tender offer and proxy solicitation rules. The
financial information included in this Announcement and the Scheme Document
has been prepared in accordance with generally accepted accounting principles
of the United Kingdom and thus may not be comparable to financial information
of U.S. companies or companies whose financial statements are prepared in
accordance with generally accepted accounting principles in the United States.

If, in the future, Bidco exercises its right to implement the Acquisition by
way of an Offer, which is to be made into the United States, such Offer will
be made in compliance with the applicable U.S. laws and regulations.

It may be difficult for U.S. holders of Dechra Shares to enforce their rights
and any claim arising out of the U.S. federal laws, since Bidco and Dechra are
located in a non-U.S. jurisdiction, and some or all of their officers and
directors may be residents of a non-U.S. jurisdiction. U.S. holders of Dechra
Shares may not be able to sue a non-U.S. company or its officers or directors
in a non-U.S. court for violations of the U.S. securities laws. Further, it
may be difficult to compel a non-U.S. company and its affiliates to subject
themselves to a U.S. court's judgement.

In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the
U.S. Exchange Act, EQT, Luxinva S.A., Bidco or their nominees, or their
brokers (acting as agents), may from time to time make certain purchases of,
or arrangements to purchase Dechra Shares outside of the U.S., other than
pursuant to the Acquisition, until the date on which the Acquisition becomes
Effective, lapses or is otherwise withdrawn.  Also, in accordance with Rule
14e-5(b) of the U.S. Exchange Act, BofA Securities and Morgan Stanley will
continue to act as exempt principal traders in Dechra shares on the London
Stock Exchange. These purchases may occur either in the open market at
prevailing prices or in private transactions at negotiated prices.  Any
information about such purchases or arrangements will be disclosed as required
in the United Kingdom, will be reported to a Regulatory Information Service
and will be available on the London Stock Exchange website at
www.londonstockexchange.com (http://www.londonstockexchange.com) .

U.S. Dechra Shareholders also should be aware that the transaction
contemplated herein may have tax consequences in the U.S. and, that such
consequences, if any, are not described herein. U.S. Dechra Shareholders are
urged to consult with legal, tax and financial advisers in connection with
making a decision regarding this transaction.

Forward-looking statements

This Announcement (including information incorporated by reference in this
Announcement), oral statements made regarding the Acquisition, and other
information published by Bidco and Dechra contain statements which are, or may
be deemed to be, "forward-looking statements". Forward-looking statements are
prospective in nature and are not based on historical facts, but rather on
current expectations and projections of the management of Bidco and Dechra
about future events, and are therefore subject to risks and uncertainties
which could cause actual results to differ materially from the future results
expressed or implied by the forward-looking statements.

The forward-looking statements contained in this Announcement include
statements relating to the expected effects of the Acquisition on Bidco and
Dechra (including their future prospects, developments and strategies), the
expected timing and scope of the Acquisition and other statements other than
historical facts. Often, but not always, forward-looking statements can be
identified by the use of forward-looking words such as "prepares", "plans",
"expects" or "does not expect", "is expected", "is subject to", "budget",
"projects", "synergy", "strategy", "scheduled", "goal", "estimates",
"forecasts", "cost-saving", "intends", "anticipates" or "does not anticipate",
or "believes", or variations of such words and phrases or statements that
certain actions, events or results "may", "could", "should", "would", "might"
or "will" be taken, occur or be achieved. Forward looking statements may
include statements relating to the following: (i) future capital expenditures,
expenses, revenues, earnings, synergies, economic performance, indebtedness,
financial condition, dividend policy, losses and future prospects; (ii)
business and management strategies and the expansion and growth of Bidco's,
Dechra's, any member of the Bidco Group's or any member of the Dechra Group's
operations and potential synergies resulting from the Acquisition; and (iii)
the effects of global economic conditions and governmental regulation on
Bidco's, Dechra's, any member of the Bidco Group's or any member of the Dechra
Group's business.

Although Bidco and Dechra believe that the expectations reflected in such
forward-looking statements are reasonable, Bidco and Dechra can give no
assurance that such expectations will prove to be correct. By their nature,
forward-looking statements involve risk and uncertainty because they relate to
events and depend on circumstances that will occur in the future. There are a
number of factors that could cause actual results and developments to differ
materially from those expressed or implied by such forward-looking statements.

These factors include, but are not limited to: the ability to complete the
Acquisition; the ability to obtain requisite regulatory and shareholder
approvals and the satisfaction of other Conditions on the proposed terms and
schedule; changes in the global political, economic, business and competitive
environments and in market and regulatory forces; changes in future exchange
and interest rates; changes in tax rates; future business combinations or
disposals; changes in general economic and business conditions; changes in the
behaviour of other market participants; changes in the anticipated benefits
from the proposed transaction not being realised as a result of changes in
general economic and market conditions in the countries in which Bidco and
Dechra operate, weak, volatile or illiquid capital and/or credit markets,
changes in tax rates, interest rate and currency value fluctuations, the
degree of competition in the geographic and business areas in which Bidco and
Dechra operate and changes in laws or in supervisory expectations or
requirements. Other unknown or unpredictable factors could cause actual
results to differ materially from those expected, estimated or projected in
the forward-looking statements. If any one or more of these risks or
uncertainties materialises or if any one or more of the assumptions proves
incorrect, actual results may differ materially from those expected, estimated
or projected. Such forward-looking statements should therefore be construed in
the light of such factors. Neither Bidco nor Dechra, nor any of their
respective associates or directors, officers or advisers, provides any
representation, assurance or guarantee that the occurrence of the events
expressed or implied in any forward-looking statements in this Announcement
will actually occur. You are cautioned not to place any reliance on these
forward-looking statements.

Specifically, statements of estimated cost savings and synergies related to
future actions and circumstances which, by their nature, involve risks,
uncertainties and contingencies. As a result, the cost savings and synergies
referred to may not be achieved, may be achieved later or sooner than
estimated, or those achieved could be materially different from those
estimated. Due to the scale of the Dechra Group, there may be additional
changes to the Dechra Group's operations. As a result, and given the fact that
the changes relate to the future, the resulting cost synergies may be
materially greater or less than those estimated.

Other than in accordance with their legal or regulatory obligations, neither
Bidco nor Dechra is under any obligation, and Bidco and Dechra expressly
disclaim any intention or obligation, to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.

Profit forecasts, estimates or quantified benefits statements

The Dechra FY23 Profit Forecast is a profit forecast for the purposes of Rule
28 of the Takeover Code. The Dechra FY23 Profit Forecast, the assumptions and
basis of preparation on which it is based and the Dechra Directors'
confirmation and reports, as required by Rule 28 of the Takeover Code, are set
out in Parts A, B and C of Part 12 (Dechra FY23 Profit Forecast) of the
Scheme Document.

Save for the Dechra FY23 Profit Forecast, no statement in this Announcement
(or any information incorporated by reference into this Announcement from
another source) is intended to be or is to be construed as a profit forecast
or estimate for any period and no statement in this Announcement should be
interpreted to mean that earnings or earnings per ordinary share of Dechra for
the current or future financial years would necessarily match or exceed the
historical published earnings or earnings per ordinary share of Dechra.

Information relating to Dechra Shareholders

Please be aware that addresses, electronic addresses and certain information
provided by Dechra Shareholders, persons with information rights and other
relevant persons for the receipt of communications from Dechra may be provided
to Bidco during the Offer Period as required under Section 4 of Appendix 4 of
the Takeover Code to comply with Rule 2.11(c) of the Takeover Code.

Publication on website and availability of hard copies

In accordance with Rule 26.1 of the Takeover Code, a copy of this Announcement
will be made available, subject to any restrictions relating to persons
resident in Restricted Jurisdictions, free of charge, on Dechra's website at
https://www.Dechra.com/investors/cash-offer
(https://www.Dechra.com/investors/cash-offer) by no later than 12 noon on the
Business Day following the date of this Announcement. For the avoidance of
doubt, neither the content of this website nor of any website accessible from
hyperlinks is incorporated by reference or forms part of this Announcement.

In accordance with Rule 30.3 of the Takeover Code, Dechra Shareholders,
persons with information rights in Dechra, participants in Dechra Share Plans
and any other person to whom this Announcement has been sent, may request a
hard copy of this Announcement (and any information incorporated in this
Announcement by reference to another source), free of charge, by: (i)
telephoning Equiniti on +44 (0) 333 207 6537. If calling from outside the UK,
please ensure the country code is used. Lines will be open from 8.30 a.m. to
5.30 p.m., Monday to Friday (excluding public holidays in England and Wales);
or (ii) submitting a request in writing to Equiniti Limited, Aspect House,
Spencer Road, Lancing, West Sussex BN99 6DA, United Kingdom.  For persons who
receive a copy of this Announcement in electronic form or via a website
notification, a hard copy of this Announcement and any such information
incorporated in it by reference to another source will not be sent unless so
requested.  In accordance with Rule 30.3 of the Takeover Code, a person so
entitled may also request that all future documents, announcements and
information to be sent to them in relation to the Acquisition should be in
hard copy form.

 

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