Enteq Technologies - Commencement of Formal Sale Process

Enteq Technologies

20/01/2025 07:00

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RNS Number : 8583T  Enteq Technologies PLC  20 January 2025

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS RESTRICTED AND NOT
FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM
THE UNITED STATES, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR AUSTRALIA OR
ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT
LAWS OR REGULATIONS OF THAT JURISDICTION.

 

THIS ANNOUNCEMENT IS AN ANNOUNCEMENT MADE UNDER RULE 2.4 OF THE CITY CODE ON
TAKEOVERS AND MERGERS (THE "CODE").  IT IS NOT AN ANNOUNCEMENT OF A FIRM
INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CODE AND THERE CAN BE NO
CERTAINTY THAT ANY FIRM OFFER WILL BE MADE NOR AS TO THE TERMS ON WHICH ANY
OFFER MIGHT BE MADE.

THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 596/2014
(WHICH FORMS PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT
2018 (AS AMENDED)). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, SUCH INSIDE
INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

 

Enteq Technologies plc

("Enteq" or the "Company")

 

Commencement of Formal Sale Process

 

Further to an ongoing review by the board of directors of the Company (the
"Board") of the various strategic options available to the Company and the
trading update made by the Company on 10 January 2025, the Board has
unanimously concluded that it would be appropriate to investigate the sale of
the Company and therefore has now decided to commence a "Formal Sale Process"
for the Company (as referred to in Note 2 on Rule 2.6 of the Takeover Code)
(the "Formal Sale Process"). Prior to commencing the Formal Sale Process, the
Company had recently initiated a Private Sale Process and contacted a limited
number of potential counterparties privately to assess whether such parties
could put forward a proposal that would deliver greater value to Enteq's
shareholders than pursuing its current standalone strategy. For clarity, the
Company is currently in discussions with two parties, but is not in receipt of
an approach from, any potential offeror at the date of this announcement. The
two parties will now participate in the Formal Sales Process.

 

The Company's current cash balances as at the date of this announcement total
approximately US$0.95 million and the Company has no debt. The Company
continues to progress a number of near-term opportunities including working
towards commencement of active test drilling operations in Australia, and
pursuing other potential customer opportunities for the SABER tool. The
Company's cashflow model shows positive cash balances until the beginning of
June 2025. The Board are focused on the timing to establish commercial
revenues from operations and are fully aware of the ongoing challenging market
conditions relating to the raising of equity financing.

 

The Board continues to believe in the quality of the SABER technology and the
compelling market opportunity driven by wider market conditions and industry
demand for a low cost to operate rotary steerable system. The Board remains
positive that a solvent solution can be found.

 

 

 

 

 

Formal Sale Process

 

The Takeover Panel has agreed that any discussions with third parties in
relation to an offer for the Company will take place within the context of a
"Formal Sale Process" (as referred to in Note 2 on Rule 2.6 of the Takeover
Code).

 

As part of the formal sale process, the Board invites expressions of interest
from interested parties regarding a potential transaction for the entire
issued and to be issued ordinary share capital of the Company. The formal sale
process is being managed by Gneiss Energy Limited ("Gneiss"), who are also
advising the Board in respect of their obligations under the Takeover Code.

 

The Company intends to conduct a very targeted and strategic process, focused
on those parties that understand and value the full potential of the Company.
Parties interested in participating in the formal sale process should contact
Doug Rycroft at Gneiss through the contact details below to receive further
information. Interested parties will be required to enter into a
non-disclosure agreement and standstill arrangement with the Company on terms
satisfactory to the Board and on the same terms, in all material respects, as
other interested parties before being permitted to participate in the process.
The Company then intends to provide such interested parties with certain
information on its business, following which interested parties shall be
invited to submit their proposals to Gneiss. The Company is commencing the
formal sale process immediately. Further announcements regarding timings for
the formal sale process will be made as appropriate.

 

The Takeover Panel has granted a dispensation from the requirements of Rules
2.4(a), 2.4(b) and 2.6(a) of the Takeover Code such that any interested party
participating in the formal sale process will not be required to be publicly
identified as a result of this announcement and will not be subject to the 28
day deadline referred to in Rule 2.6(a) of the Takeover Code for so long as it
is participating in the formal sale process. Interested parties should note
Rule 21.2 of the Takeover Code, which will prohibit any form of inducement fee
or other offer-related arrangement, and that the Company, although it may do
so in the future, has not at this stage requested any dispensation from this
prohibition under Note 2 of Rule 21.2.

 

The Board reserves the right to alter any aspect of the process as outlined
above or to terminate the process at any time and in such cases will make an
announcement as appropriate. The Board also reserves the right to reject any
approach or terminate discussions with any interested party at any time.

 

Shareholders are advised that this announcement does not represent a firm
intention by any party to make an offer under Rule 2.7 of the Takeover Code
and there can be no certainty that any offers will be made as a result of the
formal sale process, that any sale will be concluded, nor as to the terms on
which any offer may be made. Shareholders are advised to take no action at
this time.

 

As a consequence of this announcement, an 'offer period' has now commenced in
respect of the Company in accordance with the Takeover Code, and the attention
of shareholders is drawn to the disclosure requirements of Rule 8 of the
Takeover Code, which are summarised below in "Disclosure Requirements of the
Takeover Code".

 

Further announcements will be made as appropriate.

 

The person responsible for arranging the release of this announcement on
behalf of Enteq is Andrew Law.

 

 

 For further information please contact:

 Enteq Technologies plc

 Tel: +44 (0)7511402017
 Andrew Law, Chief Executive Officer

 Gneiss Energy (Financial Adviser)

 Tel: +44 20 3983 9263

 Jon Fitzpatrick, Managing Director

 Doug Rycroft, Director

 Cavendish Capital Markets Limited (NOMAD and Corporate Broker)

 Tel: +44 (0) 20 7220 0500

 Ed Frisby, George Lawson (Corporate Finance)

 Andrew Burdis, Jamie Anderson (Corporate Broking)

 

 

Disclosure requirements of the Takeover Code

 

Under Rule 8.3(a) of the Code, any person who is interested in 1% 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
pm (London time) on the 10th business day following the commencement of the
offer period and, if appropriate, by no later than 3.30 pm (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 Code, any person who is, or becomes, interested in 1%
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
pm (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 Takeover Panel's website
at www.thetakeoverpanel.org.uk (http://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.

 

Rule 2.9 disclosure

 

For the purposes of Rule 2.9 of the Takeover Code, the Company confirms that,
as at 17 January 2025, being the last practicable business day prior to the
date of this announcement, it has 104,345,129 ordinary shares of 1
penny each in issue (the "Ordinary Shares"). The International Securities
Identification Number for the Ordinary Shares is GB00B41Q8Q68. The Company
also has 50,000 incentive shares, in issue, it being noted that the incentive
shares do not entitle holders of them to receive notice of, to attend, to
speak or to vote at any general meeting of the Company.

 

Publication on website

 

For the purposes of Rule 26.1 of the Takeover Code, a copy of this
announcement will be made available (subject to certain restrictions relating
to persons resident in restricted jurisdictions) on the Company's website
https://www.enteq.com/ promptly following its publication and in any event no
later than 12 noon (London time) on the business day following the release of
this announcement. The content of the website referred to in this announcement
is not incorporated into and does not form part of this announcement.

 

Important notices

 

Gneiss Energy Limited ("Gneiss"), which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority, is acting exclusively for
Enteq as the financial adviser and no one else in connection with the matters
described in this announcement and will not be responsible to anyone other
than Enteq for providing the protections afforded to clients of Gneiss or for
providing advice in relation to any matter or arrangement referred to in this
announcement.

 

Cavendish Capital Markets Limited ("Cavendish"), which in the United Kingdom
is authorised and regulated by the Financial Conduct Authority, is acting
exclusively as nominated adviser and broker to Enteq and no one else in
connection with the matters described in this announcement and will not be
responsible to anyone other than Enteq for providing the protections afforded
to clients of Cavendish nor for providing advice in relation to any matter or
arrangement referred to in this announcement.

 

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