Recommended Cash Offer
30/08/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230830:nRSd7281Ka&default-theme=true
RNS Number : 7281K Instem plc 30 August 2023
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
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
( )
30 August 2023
RECOMMENDED CASH OFFER
by
ICHOR MANAGEMENT LIMITED
(a newly incorporated company controlled by funds managed by ARCHIMED SAS)
for
INSTEM PLC
to be effected by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006
Summary
· The board of directors of Ichor Management Limited
("Bidco") and the board of directors of Instem plc ("Instem") are pleased to
announce that they have reached agreement on the terms of a recommended cash
offer to be made by Bidco for the entire issued and to be issued ordinary
share capital of Instem (the "Acquisition"). It is intended that the
Acquisition will be implemented by way of a scheme of arrangement under Part
26 of the Companies Act.
· Under the terms of the Acquisition, each Instem
Shareholder will be entitled to receive:
833 pence in cash per Instem Share
· The Acquisition values the entire issued and to be issued
ordinary share capital of Instem at approximately £203 million.
· The Acquisition Price represents a
premium of approximately:
- 41 per cent. to the Closing Price of 590 pence per
Instem Share on 29 August 2023 (being the last Business Day prior to this
Announcement);
- 35 per cent. to the Volume Weighted Average Price per
Instem Share during the three month period ended 29 August 2023 (being the
last Business Day prior to this Announcement); and
- 34 per cent. to the Volume Weighted Average Price per
Instem Share during the six month period ended 29 August 2023 (being the last
Business Day prior to this Announcement).
Background to and reasons for the Acquisition
· Instem is a market leading provider of workflow, data and IT
solutions across the drug development lifecycle to the global life sciences
market and is well positioned to capitalise on the growing R&D market due
to its high-quality product portfolio and development potential. Bidco is
fully aligned with Instem management team's vision for Instem to achieve its
organic and inorganic growth ambitions.
· Bidco believes that Instem can leverage ARCHIMED's deep industry
knowledge and network as a healthcare specialist investor to accelerate
Instem's growth strategy and support Instem's management team in expanding its
product offering and continuing to transition customers from on-premise to
SaaS.
· Bidco believes that the Acquisition has a strong strategic rationale,
representing a highly compelling opportunity to enable Instem to:
- capitalise on operating leverage via its transition of
its market leading Study Management product offering from an on-premise
delivery model to a SaaS based model;
- accelerate organic growth in its growing In Silico &
Translational Science and Clinical Trial Analytics business segments by
leveraging ARCHIMED's network and experience;
- deploy additional capital for accretive and value
enhancing M&A opportunities;
- continue the vision of Instem's highly experienced
management team; and
- augment Instem's position as a market-leader and trusted
partner to the global health and life sciences community.
Recommendation
· The Instem Directors, who have been so advised by Rothschild & Co
and Singer Capital Markets as to the financial terms of the Acquisition,
consider the terms of the Acquisition to be fair and reasonable. In providing
its advice to the Instem Directors, Rothschild & Co and Singer Capital
Markets have taken into account the commercial assessments of the Instem
Directors.
· Accordingly, the Instem Directors intend to recommend unanimously
that the Instem Shareholders vote in favour of (or procure votes in favour of)
the Scheme at the Court Meeting and the Resolution to be proposed at the
General Meeting (or, subject to the terms of the Co-operation Agreement and
with the consent of the Takeover Panel, if Bidco exercises its right to
implement the Acquisition by way of a Takeover Offer, to accept such offer),
as the Instem Directors who have an interest in Instem Shares (in a personal
capacity or through a nominee or related family trust) have irrevocably
undertaken to do (or procure to be done) in respect of their own (and their
connected persons') beneficial holdings of 2,107,579 Instem Shares
(representing, in aggregate, approximately 9.20 per cent. of the Instem Shares
in issue on 29 August 2023 (being the last Business Day prior to this
Announcement)).
· Full details of the irrevocable undertakings received by Bidco are
set out in Appendix III to this Announcement.
Information on Bidco and ARCHIMED
Bidco
Bidco is a newly incorporated company controlled by funds managed by ARCHIMED.
Bidco was formed for the purposes of the Acquisition and has not traded prior
to the date of this Announcement nor has it entered into any obligation other
than in connection with the Acquisition.
ARCHIMED
With offices in Europe, North America and Asia, ARCHIMED is a leading global
investment firm that is exclusively focused on healthcare industries, with
more than €8 billion of assets under management and past and current
investments in 32 healthcare companies that serve customers around the world.
Over the last twenty years, ARCHIMED's leadership team has directly managed
and invested in over eighty small to large size healthcare companies globally,
representing over €30 billion of combined value.
ARCHIMED specialises in investing in operating companies across various
segments of the healthcare industry, including Healthcare IT, Biologic
Services, Biopharma Products, In Vitro Diagnostics, Med Tech, Pharma Services
and Consumer Health. Its mix of operational, medical, scientific and financial
expertise allows ARCHIMED to serve as both a strategic and financial partner
to North American and European healthcare businesses. ARCHIMED's
specialisation in healthcare industries also enables it to develop a deep
understanding of the unique challenges and opportunities for healthcare
businesses and leverage its network of healthcare talents to support its
portfolio companies.
Since inception, ARCHIMED has raised five main funds and made investments
ranging from €10 million to €1 billion. It has been particularly focused
on providing its companies with the strategic, operational and financial
resources required to facilitate the companies' efforts in innovation,
internationalisation, capacity increase, product range expansion and
acquisitions.
Timetable and Conditions
· It is intended that the Acquisition be implemented by way
of a Court-sanctioned scheme of arrangement under Part 26 of the Companies
Act. The purpose of the Scheme is to provide for Bidco to acquire the whole of
the issued and to be issued share capital of Instem. The Scheme will be put to
Instem Shareholders at the Court Meeting and to Instem Shareholders at the
General Meeting. In order to become Effective, the Scheme must be approved by
a majority in number of the Instem Shareholders voting at the Court Meeting,
either in person or by proxy, representing at least 75 per cent. in value of
the Scheme Shares voted. The Resolution must also be approved by Instem
Shareholders at the General Meeting. The General Meeting is expected to be
held immediately after the Court Meeting.
· The Scheme will also need to be sanctioned by the Court.
Finally, a copy of the Court Order must be delivered to the Registrar of
Companies for registration, upon which the Scheme will become Effective.
· The Acquisition will be made in accordance with the Code
and is subject to the Conditions and certain further terms set out in Appendix
I, and to the full terms and conditions which will be set out in the Scheme
Document. The Conditions include the receipt of regulatory approvals as
further described in this Announcement.
· It is expected that the Scheme Document, containing
further information about the Acquisition and notices of the Court Meeting and
the General Meeting, together with the associated Forms of Proxy, will be
posted to Instem Shareholders within 28 days of this Announcement (or such
later time as Instem, Bidco and the Takeover Panel agree) and the Court
Meeting and the General Meeting are each expected to be held as soon as
possible thereafter, giving the required notice for such meetings.
· The Acquisition is currently expected to complete during
the fourth quarter of 2023, subject to the satisfaction or (where applicable)
waiver of the Conditions. An expected timetable of key events relating to the
Acquisition will be provided in the Scheme Document.
Commenting on the Acquisition, David Gare, Chair of Instem, said:
"The Instem Board is pleased with the considerable progress made by the
Company following the successful integration of acquisitions and the
implementation of its strategy to achieve and maintain a growing portfolio of
'world leading life science workflow and data solutions'.
While this strategy, endorsed by the Board, is anticipated to generate
substantial long-term value for shareholders, we also note that the next phase
of development for the business is at an early stage and there is an element
of risk attached to some of our recent initiatives, which will take time to
deliver value.
The offer from Bidco represents an attractive valuation and offers
shareholders the certainty of cash today, while also fairly reflecting the
exceptional quality of the Instem business, its people and its future
prospects. Under Bidco's private ownership, without the costs and regulation
of a listed company, Instem will be able to pursue its organic growth
strategy, while benefiting from the expertise and capital to accelerate its
successful acquisitive growth plan.
Accordingly, those members of the Board who are also Instem Shareholders have
irrevocably undertaken to vote the Instem Shares in which they are interested
in favour of the Acquisition. The Board also intends to recommend unanimously
that Instem Shareholders also vote in favour of the Acquisition."
This summary should be read in conjunction with, and is subject to, the full
text of this Announcement and its Appendices. In particular, the Acquisition
is subject to the Conditions and certain further terms set out in Appendix I
and to the full terms and conditions which will be set out in the Scheme
Document. Appendix II contains details of sources of information and bases of
calculation contained in this Announcement. Appendix III contains certain
details relating to the irrevocable undertakings referred to in this
Announcement. Appendix IV contains definitions of certain terms used in this
Announcement.
Instem
Phil Reason
Via
Walbrook
Nigel Goldsmith
Rothschild & Co (Financial Adviser to Instem)
Alistair
Allen
Tel: +44 (0) 161 827 3800
Julian Hudson
Tom Palmer
Singer Capital Markets Advisory LLP (Nominated Adviser, Joint Financial
Adviser and Joint Broker to Instem)
Peter
Steel
Tel: +44 (0) 20 7496 3000
Alex Bond
Oliver Platts
Stifel Nicolaus Europe Limited (Joint Broker to Instem)
Ben
Maddison
Tel: +44 (0) 20 7710 7600
Richard Short
Walbrook Financial PR (Public Relations Adviser to Instem)
Tom
Cooper
Tel: +44 (0) 20 7933 8780
Nick Rome
Joe Walker
ARCHIMED SAS
Vincent
Guillaumot
Tel: +33 4 81 11 35 33
Brian Sheridan
Sandrine Laporte
Moelis & Company UK LLP (Financial Adviser to ARCHIMED and Bidco)
Philippe Gallone
Tel: +44 (0) 20 7634 3500
Chris Raff
François Saint-Lo
Simon Chaudhuri
Latham & Watkins (London) LLP are retained as legal adviser to ARCHIMED
and Bidco.
Squire Patton Boggs (UK) LLP are retained as legal adviser to Instem.
Disclaimers
Rothschild & Co, which is authorised and regulated by the FCA in the
United Kingdom, is acting exclusively as financial adviser to Instem and for
no one else in connection with the matters set out in this Announcement and
will not be responsible to anyone other than Instem for providing the
protections afforded to clients of Rothschild & Co, nor for providing
advice in relation to the Acquisition or any other matters referred to in this
Announcement. Neither Rothschild & Co nor any of its subsidiaries,
branches or affiliates (nor their respective directors, officers, employees or
agents) 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 Rothschild & Co in
connection with this Announcement, any statement contained in this
Announcement, the Acquisition or otherwise. No representation or warranty,
express or implied, is made by Rothschild & Co as to the contents of this
Announcement.
Singer Capital Markets Advisory LLP, which is authorised and regulated by the
FCA in the United Kingdom, is acting as financial adviser and nominated
adviser exclusively for Instem and no-one else in connection with the subject
matter of this Announcement and will not be responsible to anyone other than
Instem for providing the protections afforded to clients of Singer Capital
Markets nor for providing advice in connection with the subject matter of this
Announcement. Neither Singer Capital Markets nor any of its affiliates (nor
any of their respective directors, partners, officers, employees or agents)
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 Singer Capital Markets in connection with
this Announcement, any statement contained herein, the Acquisition or
otherwise. No representation or warranty, express or implied, is made by
Singer Capital Markets as to the contents of this Announcement.
Moelis & Company UK LLP ("Moelis"), which is regulated by the FCA in the
United Kingdom, is acting exclusively for ARCHIMED and Bidco and no one else
in connection with the Acquisition and other matters set out in this
Announcement and will not be responsible to anyone other than ARCHIMED and
Bidco for providing the protections afforded to clients of Moelis, or for
providing advice in connection with the Acquisition or any matter referred to
herein. Neither Moelis 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 Moelis in connection with this Announcement, any statement contained
herein or otherwise.
Further information
This Announcement is for information purposes only and is not intended to and
does not constitute, or form any part of, an offer to sell or subscribe for or
any invitation to purchase or subscribe for any securities or the solicitation
of any vote or approval in any jurisdiction pursuant to the Acquisition or
otherwise. The Acquisition will be made solely through and on the terms set
out in the Scheme Document (or, in the event that the Acquisition is to be
implemented by means of a Takeover Offer, the Offer Document) and the
accompanying Forms of Proxy, which will contain the full terms and conditions
of the Acquisition, including details of how to vote in respect of the
Acquisition. Any vote, approval, decision or other response to the Acquisition
should be made only on the basis of the information in the Scheme Document
(or, if the Acquisition is implemented by way of a Takeover Offer, the Offer
Document). Scheme Shareholders are strongly advised to read the formal
documentation in relation to the Acquisition once it has been despatched.
This Announcement does not constitute a prospectus or prospectus exempted
document.
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.
Overseas shareholders
This Announcement has been prepared for the purpose of complying with English
law, the AIM Rules and the 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.
The laws of the relevant jurisdictions may affect the availability of the
Acquisition to persons who are not resident in the United Kingdom. Persons who
are not resident in the United Kingdom, or who are subject to laws of any
jurisdiction other than the United Kingdom, should inform themselves about,
and observe any applicable requirements. Any person (including, without
limitation, nominees, trustees and custodians) who would, or otherwise intends
to, forward this Announcement, the Scheme Document or any accompanying
document to any jurisdiction outside the United Kingdom should refrain from
doing so and seek appropriate professional advice before taking any action. In
particular, the ability of persons who are not resident in the United Kingdom
to vote their Instem Shares at the Court Meeting or the General Meeting, or to
execute and deliver Forms of Proxy appointing another to vote their Instem
Shares in respect of the Court Meeting or the General Meeting on their behalf,
may be affected by the laws of the relevant jurisdiction in which they are
located.
Any failure to comply with the applicable legal or regulatory requirements may
constitute a violation of the laws and/or regulations of any such
jurisdiction. To the fullest extent permitted by applicable law, the companies
and persons involved in the Acquisition disclaim any responsibility and
liability for the violation of such restrictions by any person.
The Acquisition will not be made, directly or indirectly, in or into or by use
of the mails or any other means or instrumentality (including, without
limitation, telephonic or electronic) of interstate or foreign commerce of, or
any facility of a national, state or other securities exchange of, a
Restricted Jurisdiction, and the Acquisition will not be capable of acceptance
by any such use, means, instrumentality or facility or from within a
Restricted Jurisdiction. Accordingly, copies of this Announcement and formal
documentation relating to the Acquisition are not being, and must not be,
directly or indirectly, mailed or otherwise forwarded or distributed in, into
or from a Restricted Jurisdiction and persons receiving this Announcement
(including custodians, nominees and trustees) must not distribute or send it
into or from a Restricted Jurisdiction. In the event that the Acquisition is
implemented by way of a Takeover Offer and extended into the US, Bidco will do
so in satisfaction of the procedural and filing requirements of US securities
laws at that time, to the extent applicable thereto. The Acquisition relates
to the shares of a company incorporated in England and it is proposed to be
made by means of a scheme of arrangement provided for under English law. The
Scheme will relate to the shares of a UK company that is a "foreign private
issuer" as defined under Rule 3b-4 under the US Exchange Act. A transaction
effected by means of a scheme of arrangement is not subject to any shareholder
vote, proxy solicitation and tender offer rules under the US Exchange Act.
Accordingly, the Scheme is subject to the disclosure requirements and
practices applicable in the UK to schemes of arrangement, which differ from
the disclosure requirements and practices of US shareholder vote, proxy
solicitation or tender offer rules. Financial information included in the
relevant documentation will have been prepared in accordance with accounting
standards applicable in the UK and may not be comparable to the financial
information of, or the accounting standards applicable to, US companies.
However, if Bidco were to elect to implement the Acquisition by means of a
Takeover Offer, such Takeover Offer shall be made in compliance with all
applicable laws and regulations, including section 14(e) of the US Exchange
Act and Regulation 14E thereunder, if applicable. Such Takeover Offer would be
made in the US by Bidco and no one else. In addition to any such Takeover
Offer, Bidco, certain affiliated companies and the nominees or brokers (acting
as agents) may make certain purchases of, or arrangements to purchase, shares
in Instem outside such Takeover Offer during the period in which such Takeover
Offer would remain open for acceptance. If such purchases or arrangements to
purchase are made they would be made outside the United States in compliance
with applicable law, including the US Exchange Act. It may be difficult for a
US-based investor to enforce his or her rights and any claim he or she may
have arising under US securities laws, since the Scheme relates to the shares
of a company located in the UK, and some or all of its officers and directors
may be residents of non-US jurisdictions. A US-based investor may not be able
to sue a company located in the UK, or its officers or directors, in a foreign
court for alleged violations of US securities laws, and it may be difficult to
compel a foreign company and its affiliates to subject themselves to a US
court's judgment.
Forward-looking statements
This Announcement, oral statements made regarding the Acquisition, and other
information published by Instem, Bidco and ARCHIMED may contain certain
"forward-looking statements" with respect to Instem, Bidco and ARCHIMED. These
forward-looking statements can be identified by the fact that they do not
relate only to historical or current facts. Forward-looking statements often
use words such as "anticipate", "target", "expect", "estimate", "intend",
"plan", "goal", "believe", "will", "may", "should", "would", "could" or other
words or terms of similar meaning or the negative thereof. Forward-looking
statements include, for example, 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 of ARCHIMED and/or
Bidco and the expansion and growth of Instem and potential synergies resulting
from the Acquisition; and (iii) the effects of government regulation on the
business of Instem.
These forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause actual results, performance or
developments to differ materially from those expressed in or implied by such
forward-looking statements. These forward-looking statements are based on
numerous assumptions regarding present and future strategies and environments.
None of ARCHIMED, Bidco or Instem, nor any of their respective associates,
directors, officers, employees 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 undue reliance on such forward-looking
statements, which speak only as of the date hereof. All subsequent oral or
written forward-looking statements attributable to ARCHIMED, Bidco or Instem
or any person acting on their behalf are expressly qualified in their entirety
by the cautionary statement above. Should one or more of these risks or
uncertainties materialise, or should underlying assumptions prove incorrect,
actual results may vary materially from those described in this Announcement.
None of ARCHIMED, Bidco or Instem assume any obligation to update publicly or
revise forward-looking or other statements contained in this Announcement,
whether as a result of new information, future events or otherwise, except to
the extent legally required.
No profit forecasts or estimates
No statement in this Announcement is intended as a profit forecast or estimate
for ARCHIMED, Bidco or Instem in respect of any period and no statement in
this Announcement should be interpreted to mean that earnings or earnings per
Instem Share for the current or future financial years would necessarily match
or exceed the historical published earnings or earnings per Instem Share.
Right to switch to a Takeover Offer
Subject to the terms of the Co-operation Agreement, Bidco reserves the right
to elect, with the consent of the Takeover Panel, to implement the Acquisition
by way of a Takeover Offer for the entire issued and to be issued ordinary
share capital of Instem as an alternative to the Scheme. In such an event, the
Takeover Offer will be made in accordance with the terms and conditions set
out in this Announcement which would apply to the Scheme (with any
modifications or amendments to such terms and conditions as may be required by
the Takeover Panel or which are necessary as a result of Bidco's election to
implement the Acquisition by way of a Takeover Offer), in accordance with the
Co-operation Agreement and subject to the amendment referred to in Appendix I
to this Announcement.
Publication on website
In accordance with Rule 26.1 of the Code, a copy of this Announcement will be
made available (subject to certain restrictions relating to persons resident
in Restricted Jurisdictions), free of charge, on Instem's website at
https://investors.instem.com and on Bidco's website at www.Ichor-offer.com by
no later than 12:00 noon on the Business Day following the date of this
Announcement. Neither the contents of this website nor the content of any
other website accessible from hyperlinks on such websites is incorporated
into, or forms part of, this Announcement.
Requesting hard copies
In accordance with Rule 30.3 of the Code, a person so entitled may request a
hard copy of this Announcement, free of charge, by contacting Instem's
registrar, Computershare Investor Services PLC during business hours (8.30
a.m. to 5.30 p.m.) on +44 (0)370 703 6041 or by submitting a request in
writing to Computershare Investor Services PLC at The Pavilions, Bridgwater
Road, Bristol, BS13 8AE. For persons who receive a copy of this Announcement
in electronic form or via a website notification, a hard copy of this
Announcement will not be sent unless so requested. In accordance with Rule
30.3 of the 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.
Electronic communications - information for Instem Shareholders
Please be aware that addresses, electronic addresses and certain information
provided by Instem Shareholders, persons with information rights and other
relevant persons for the receipt of communications from Instem may be provided
to Bidco during the Offer Period as required under section 4 of Appendix 4 of
the Code to comply with Rule 2.11(c) of the Code.
Rounding
Certain figures included in this Announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of the figures that precede them.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or
more of any class of relevant securities of Instem 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) Instem 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
Instem 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
per cent. or more of any class of relevant securities of Instem or of any
securities exchange offeror must make a Dealing Disclosure if the person deals
in any relevant securities of Instem 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) Instem and (ii) any securities exchange
offeror, 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 Instem 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 Instem and by any offeror,
and Dealing Disclosures must also be made by Instem, 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
Takeover 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 of the Code
For the purposes of Rule 2.9 of the Code, Instem confirms that, as at the date
of this Announcement, it had in issue 22,899,433 ordinary shares of 10 pence
each. No shares are held in treasury. The ISIN for the ordinary shares is
GB00B3TQCK30.
General
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 or
independent financial adviser duly authorised under FSMA if you are resident
in the United Kingdom or, if not, from another appropriate authorised
independent financial adviser.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH
JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
30 August 2023
RECOMMENDED CASH OFFER
by
ICHOR MANAGEMENT LIMITED
(a newly incorporated company controlled by funds managed by ARCHIMED SAS)
for
INSTEM PLC
to be effected by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006
1. Introduction
The board of directors of Ichor Management Limited ("Bidco") and the board of
directors of Instem plc ("Instem") are pleased to announce that they have
reached agreement on the terms of a recommended cash offer to be made by Bidco
for the entire issued and to be issued ordinary share capital of Instem
(the "Acquisition").
It is intended that the Acquisition will be implemented by way of a scheme of
arrangement under Part 26 of the Companies Act.
2. The Acquisition
Under the terms of the Acquisition, which will be subject to the Conditions
and certain further terms set out in Appendix I and to the full terms and
conditions which will be set out in the Scheme Document, each Instem
Shareholder will be entitled to receive:
833 pence in cash per Instem Share
· The Acquisition values the entire issued and to be issued
ordinary share capital of Instem at approximately £203 million.
· The Acquisition Price represents a premium of
approximately:
- 41 per cent. to the Closing Price of 590 pence per
Instem Share on 29 August 2023 (being the last Business Day prior to this
Announcement);
- 35 per cent. to the Volume Weighted Average Price per
Instem Share during the three month period ended 29 August 2023 (being the
last Business Day prior to this Announcement); and
- 34 per cent. to the Volume Weighted Average Price per
Instem Share during the six month period ended 29 August 2023 (being the last
Business Day prior to this Announcement).
The Instem Shares will be acquired by Bidco with full title guarantee, fully
paid and free from all liens, equitable interests, charges, encumbrances,
rights of pre-emption and any other third party rights or interests whatsoever
and together with all rights existing at the date of this Announcement or
thereafter attaching thereto, including (without limitation) the right to
receive and retain, in full, all dividends and other distributions (if any)
declared, made or paid or any other return of capital (whether by way of
reduction of share capital or share premium account or otherwise) made on or
after the Effective Date in respect of the Instem Shares.
If any dividend or other distribution in respect of the Instem Shares is
declared, paid or made on or after the date of this Announcement, Bidco
reserves the right to reduce the consideration payable for each Instem Share
under the terms of the Acquisition by the amount per Instem Share of such
dividend or distribution, in which case any reference in this Announcement to
the consideration payable under the terms of the Acquisition will be deemed to
be a reference to the consideration as so reduced.
3. Recommendation
The Instem Directors, who have been so advised by Rothschild & Co and
Singer Capital Markets as to the financial terms of the Acquisition, consider
the terms of the Acquisition to be fair and reasonable. In providing its
advice to the Instem Directors, Rothschild & Co and Singer Capital Markets
have taken into account the commercial assessments of the Instem Directors.
Accordingly, the Instem Directors intend to recommend unanimously that the
Instem Shareholders vote in favour of (or procure votes in favour of) the
Scheme at the Court Meeting and the Resolution to be proposed at the General
Meeting (or, subject to the terms of the Co-operation Agreement and with the
consent of the Takeover Panel, if Bidco exercises its right to implement the
Acquisition by way of a Takeover Offer, to accept such offer), as the Instem
Directors who have an interest in Instem Shares (in a personal capacity or
through a nominee or related family trust) have irrevocably undertaken to do
in respect of their own (and their connected persons') beneficial holdings of
2,107,579 Instem Shares (representing, in aggregate, approximately 9.20 per
cent. of the Instem Shares in issue on 29 August 2023 (being the last Business
Day prior to this Announcement)).
Further details of these irrevocable undertakings are set out below and in
Appendix III to this Announcement.
4. Background to and reasons for the Acquisition
Instem is a market leading provider of workflow, data and IT solutions across
the drug development lifecycle to the global life sciences market. As global
R&D volume continues to increase, Instem is well-placed to capitalise on
the organic growth in the number of users amongst existing clients as well as
expand its solutions product lines to reach new market users. Bidco is highly
enthused by the quality of Instem's market leading pre-clinical solutions
across its Study Management product modules, and is fully aligned with the
Instem management team's vision for Instem to achieve its growth ambitions
through both organic revenue growth and targeted accretive M&A.
Bidco believes that Instem is better able to achieve its full potential and
continue transitioning customers from an on-premise software delivery model to
a SaaS based model in a private market setting enabled by the acceleration of
investment in technology and growth. Bidco believes it would be able to
leverage ARCHIMED's deep industry knowledge as a healthcare specialist
investor, extensive network of industry specialists and additional financial
resources to accelerate Instem's growth strategy and support Instem's
management team.
Bidco believes that the Acquisition has a strong strategic rationale,
representing a highly compelling opportunity to enable Instem to:
· capitalise on operating leverage via its transition of its market
leading Study Management product offering from an on-premise delivery model to
a SaaS based model;
· accelerate organic growth in its growing In Silico &
Translational Science and Clinical Trial Analytics business segments by
leveraging ARCHIMED's network and industry experience;
· deploy additional capital for accretive and value enhancing M&A
opportunities;
· continue the vision of Instem's highly experienced management team;
and
· augment Instem's position as a market-leader and trusted partner to
the global health and life sciences community across the drug development
lifecycle.
5. Background to and reasons for the recommendation
Since its initial public offering in 2010, Instem has undergone substantial
development across its operations, resulting in significant growth and
expansion of the business. Instem's solutions are in use by over 700 customers
worldwide, including the largest 25 global pharmaceutical companies, enabling
clients to bring life enhancing products to market faster.
In 2010, Instem had revenue of £10.0 million and EBITDA of £2.3 million. The
Instem Board is proud of the incremental revenue and profit growth that has
followed, fuelled by innovation and technology demand, leading to Instem
reporting revenue of £58.9 million and EBITDA of £10.9 million in 2022,
driven by increasing IT demand, innovation, product development, and strategic
integration of several complementary businesses.
Whilst the Instem Directors are highly confident in the long-term prospects of
the business as an independent listed company, the Instem Board notes:
· ARCHIMED's offer of 833 pence per Instem share followed the Instem
Directors having received and rejected a series of unsolicited proposals from
ARCHIMED, with the first approach made in March 2023;
· the Acquisition represents an attractive premium of 41 per cent. to
the Closing Price and 35 per cent. to the volume weighted average price in the
three months to 29 August 2023 (being the last Business Day prior to this
Announcement);
· the Acquisition represents an attractive implied enterprise value
multiple of 18.3x EBITDA of £10.9 million for the year ended 31 December
2022;
· after careful consideration together with its advisers Rothschild
& Co and Singer Capital Markets, the Instem Board believes that the
Acquisition reflects the strength of the Instem business today and its future
prospects; and
· while Instem has a strategy to deliver the next phase of development
for the business, this phase is at an early stage and there is an element of
risk attached to some of our recent initiatives, which will take time to
deliver value. ARCHIMED's offer provides an opportunity for Instem
Shareholders to receive a full price and crystallise, in cash, the value of
their investments.
The Instem Directors also acknowledge the benefits of private ownership,
including greater access to capital to pursue new growth opportunities, in
particular creating the opportunity to build on and accelerate Instem's
successful track record of acquisitive growth.
In considering the Acquisition, the Instem Directors have taken into account
ARCHIMED's stated intentions for the business and its employees. The Instem
Directors believe that the Acquisition represents an opportunity which results
in a positive outcome for all its stakeholders, including customers, employees
and shareholders.
Accordingly, after careful consideration of the above factors, the Instem
Directors are pleased to confirm their intention to recommend unanimously that
Instem Shareholders vote in favour of the Scheme at the Court Meeting (or in
the event that the Acquisition is implemented by way of a Takeover Offer, to
accept or procure acceptance of such Takeover Offer), as the Instem Directors
have committed to do in respect of their Instem Shares (where applicable).
6. Conditions
The Acquisition is conditional, amongst other things, upon:
(a) the approval of the Scheme by a majority in number
representing not less than 75 per cent. in value of the Instem Shareholders
entitled to vote and present and voting, either in person or by proxy, at the
Court Meeting (or at any adjournment, postponement or reconvention of such
meeting) on or before the 22nd day after the expected date of the Court
Meeting to be set out in the Scheme Document in due course (or such later date
as may be agreed between Bidco and Instem and the Court may allow);
(b) the passing of the Resolution by the requisite majority at the
General Meeting to be held on or before the 22nd day after the expected date
of the General Meeting to be set out in the Scheme Document (or such later
date, if any, as Bidco and Instem may agree and the Court may allow); and
(c) satisfaction or waiver of the NSIA Condition.
The attention of Instem Shareholders is drawn to the fact that the Acquisition
is also conditional on other Conditions and certain further terms set out in
Appendix I and to the full terms and conditions which will be set out in the
Scheme Document.
The Scheme Document, along with the notice of the Court Meeting and the
General Meeting and the Forms of Proxy will be despatched to Instem
Shareholders within 28 days of the date of this Announcement, unless Bidco and
Instem otherwise agree, and the Takeover Panel consents, to a later date.
7. Irrevocable undertakings
Bidco has received irrevocable undertakings to vote or procure votes in favour
of the Scheme at the Court Meeting and the Resolution to be proposed at the
General Meeting (or, subject to the terms of the Co-operation Agreement and
with the consent of the Takeover Panel, if Bidco exercises its right to
implement the Acquisition by way of a Takeover Offer, to accept such offer)
from all of the Instem Directors who hold Instem Shares (in a personal
capacity or through a nominee or related family trust) in respect of their
(and their connected persons') entire beneficial holdings of Instem Shares,
amounting, in aggregate, to 2,107,579 Instem Shares (representing, in
aggregate, approximately 9.20 per cent. of the Instem Shares in issue on 29
August 2023 (being the last Business Day prior to this Announcement)).
Further details of these irrevocable undertakings (including details of the
circumstances in which they cease to be binding) are set out in Appendix III
to this Announcement.
8. Information on ARCHIMED and Bidco
Bidco
Bidco is a newly incorporated company controlled by funds managed by ARCHIMED.
Bidco was formed for the purposes of the Acquisition and has not traded prior
to the date of this Announcement nor has it entered into any obligation other
than in connection with the Acquisition.
ARCHIMED
With offices in Europe, North America and Asia, ARCHIMED is a leading global
investment firm that is exclusively focused on healthcare industries, with
more than €8 billion of assets under management and past and current
investments in 32 healthcare companies that serve customers around the world.
Over the last twenty years, ARCHIMED's leadership team has directly managed
and invested in over eighty small to large size healthcare companies globally,
representing over €30 billion of combined value.
ARCHIMED specialises in investing in operating companies across various
segments of the healthcare industry, including Health Tech and Software,
Biologic Services, Biopharma Products, In Vitro Diagnostics, Med Tech, Pharma
Services and Consumer Health. Its mix of operational, medical, scientific and
financial expertise allows ARCHIMED to serve as both a strategic and financial
partner to North American and European healthcare businesses. ARCHIMED's
specialisation in healthcare industries also enables it to develop a deep
understanding of the unique challenges and opportunities for healthcare
businesses and leverage its network of healthcare talents to support its
portfolio companies.
Since inception, ARCHIMED has raised five main funds and made investments
ranging from €10 million to €1 billion. It has been particularly focused
on providing its companies with the strategic, operational and financial
resources required to facilitate the companies' efforts in innovation,
internationalisation, capacity increase, product range expansion and
acquisitions.
9. Information on Instem
Instem is a leading provider of IT solutions and services to the life sciences
market for Study Management, Regulatory Submissions, Clinical Trial Analytics
and Informatics-based Insight Generation. The Instem Group's suite of software
solutions and services enables its clients to accelerate the process of
bringing life-enhancing products to market, delivering increased client
productivity by automating study-related processes whilst at the same time
generating new knowledge through the extraction and harmonisation of
actionable scientific information. Instem's offering has been purposefully
positioned such that it now covers aspects of the entire drug development
value chain, from discovery through to market launch.
Instem has over 700 customer relationships, covering the leading
pharmaceutical, chemical and contract research organisations as well as
academic, government and privately funded research institutions across many
locations worldwide. The Instem Group's recurring customers include the top 25
pharmaceutical and biotech companies globally such as GlaxoSmithKline and
AstraZeneca.
The Instem Group has in recent years grown organically and by acquisition.
Notable recent developments include the acquisitions in 2021 of d-Wise
Technologies, Inc, a US-based provider of clinical trial technology and
consultancy services, The Edge Software Consultancy Ltd, a UK-based provider
of drug discovery software solutions and PDS Pathology Data Systems Ltd, a
Switzerland-based provider of software to the life sciences industry for
non-clinical study management and outsourced services for regulatory
submissions.
In May 2023, Instem announced that it had been granted exclusive rights to
transition the ToxHub Platform (the "Platform") from eTRANSAFE, a consortium
of 13 international life sciences companies. Instem plans to commercialise the
Platform, which has been designed to speed up the development of medicines.
The Platform will be integrated into its Centrus® software suite (previously
branded in silico) which provides data sharing, predictive modelling and
insight generation for the drug discovery and development process. Instem also
announced in May 2023 that it had received its first SaaS subscription order
for the Platform from Bayer AG, a member of the eTRANSAFE consortium.
Instem's European headquarters and registered office is located in
Staffordshire in the UK, with its North American headquarters in Philadelphia
in the USA. Instem also has other offices in the UK, USA as well as a presence
in China, India, Japan, France, Romania and Switzerland. Instem's average
monthly number of employees was 493 in FY22. Instem Limited, the original
Instem business, was founded in 1969 and Instem's ordinary shares were
admitted to trading on AIM in 2010.
Recent financial performance
On 15 August 2023, Instem announced the following trading update for the six
months ended 30 June 2023 ("H1 FY2023"):
"Financial Highlights
Revenue for H1 2023 is expected to be in the region of £29.7m (H1 2022:
£27.0m), an increase of approximately 10.2%, with recurring software revenue
growing by 27%. This excludes Samarind Limited, which was sold on 1 April
2023 and will be classified as a discontinued operation in the H1 2023 results
statement. Annual Recurring Revenue ("ARR") at 1 July 2023 was c.£41m (1 July
2022: £32m). Overall performance was broadly in line with management
expectations.
Closing cash at 30 June 2023 was £8.4m (30 June 2022: £10.3m), after £5.8m
of deferred consideration paid in H1 2023 in relation to certain of the
Company's previous acquisitions. The Group's balance sheet remains strong,
retaining the flexibility to execute on acquisition opportunities as they
arise. The Board is currently appraising a healthy pipeline of opportunities
progressed to various stages.
Operational Highlights
The Company commenced the next phase of its development, positioning itself at
the forefront of the growing Artificial Intelligence ("AI") opportunity with
an increased focus on in silico solutions as part of a blended growth
strategy, building on the relationships and fundamentals of the established
business.
The transfer of the ToxHub Platform (the "Platform") and launch of Centrus®
announced in May 2023 enables existing and new clients to utilise a single
repository from which to unlock new knowledge through the application and
deployment of cutting-edge algorithms.
The Company also renewed its long-standing agreement with the National
Toxicology Program ("NTP"), run by the US National Institute of Environmental
Health Sciences ("NIEHS") during the period - providing further potential for
Instem to broaden its in silico presence. The size and scale of this
extension underpins increased revenue visibility.
Post period end, the Company grew its Provantis footprint further, with
Altasciences signing a three-year subscription order worth $3.1m. This follows
the acquisitions of Calvert Labs and Sinclair Research by Altasciences and the
subsequent decision to standardise on Provantis and to transition from
on-premises deployment to Instem's cloud-based solutions, increasing its
Provantis user licences from 250 to more than 600.
Outlook
The Company remains optimistic about the growth potential having positioned
itself to provide solutions across the entire drug discovery and development
life cycle. The in silico growth opportunity, in particular, is expected to
increase as the Company addresses the pressing market need to reduce the cost
and time of life sciences research and development, leveraging the integration
of "Toxhub" data and technology into its existing Centrus suite.
As in 2022, it is expected that revenue growth will be second half weighted
benefitting from increased software recurring revenue, predominantly from new
business already secured and the reliable renewal of contracts with current
clients.
With an increasing number of customer touch points and cross selling
opportunities management is confident that Instem's performance will be
broadly in line with the Board's expectations for the full year.
Phil Reason, Instem CEO, commented: "We are delighted with the continued
momentum we are seeing, advocating our acquisition strategy and highlighting
our standing across the drug research and development lifecycle. We believe
there is significant potential to continue driving value and look forward to
building on the Company's growing market reach.""
10. Management, employees, pensions, research and development and
locations of the Instem Group
Strategic plans for Instem
As set out in paragraph 4 above, Bidco believes that the Acquisition has a
compelling strategic rationale.
Bidco believes it is well-suited to accelerate Instem's growth as a trusted
solutions provider and partner to healthcare industry customers. Bidco will
provide Instem with the strategic, tactical and financial resources required
to support the management team's efforts in accelerating their efforts in
exploring organic growth opportunities including expanding its existing
product range and improving operating margin.
Bidco plans to assess opportunities to make accretive and value enhancing
acquisitions, with an aim to expand the scope and scale of Instem's service
offering. Bidco intends to assist Instem's management in identifying,
evaluating and financing the acquisitions of complementary companies, as well
as accelerating investment in organic growth prospects to further support
Instem's expansion.
Employees and management
Bidco attaches great value to the skills, experience and commitment of the
existing Instem management and employees and believes that they will be
fundamental in maximising the long term success of Instem. Bidco is committed
to fully support management in continuing to execute their strategic and
growth vision, notably the recently announced re-organisation of Instem into 3
strategic Business Units: Study Management, In Silico & Translational
Science and Clinical Trial Analytics.
Once Instem ceases to be a listed company, a limited number of public
company-related functions may be reduced in scope or become unnecessary. No
proposals have been developed yet as to how any such headcount reductions will
be implemented but Bidco intends to work with Instem's management to identify
after the date of this announcement how individuals in affected roles may be
reassigned to other appropriate roles within Instem prior to or with effect
from the Scheme becoming Effective. Bidco intends to support any steps taken
by Instem management to reassign individuals appropriately, and confirms that
the intention is for any individuals impacted to be treated in a manner
consistent with Instem's high standards and culture and that Bidco will
observe Instem's existing redundancy practices and policies, including
undertaking appropriate consultation with affected employees.
The board of Bidco confirms that, upon the Scheme becoming Effective, the
existing contractual and statutory employment rights, including pension
rights, of all management and employees of the Instem Group will be fully
safeguarded.
Upon the Scheme becoming Effective, the non-executive directors of Instem will
resign and from that point will cease to be directors of Instem.
Existing rights and pension schemes
Bidco confirms that, following completion of the Acquisition, the existing
statutory and contractual rights and terms and conditions of employment of
management and employees of Instem Group, including in relation to pensions,
will be fully safeguarded in accordance with applicable law. Bidco has no
intention to make any material modifications to the conditions of employment
of management or employees of Instem Group or in the balance of their skills
and functions, unless otherwise agreed upon with the respective employees.
Bidco does not intend to make any changes to the funding arrangements in
relation to Instem's legacy defined benefit pension scheme (which is closed to
new members). The defined benefit scheme operated by Instem is closed to
future accrual of benefits. There are no plans to make any changes to any
defined contribution scheme(s) operated by Instem.
Incentivisation and retention arrangements
Bidco believes that the ongoing participation of senior management of the
Instem Group is very important to the future success of the Instem Group. No
discussions in relation to incentivisation arrangements have yet taken place
and no discussions are expected to take place prior to completion of the
Acquisition, but Bidco intends to put in place appropriate arrangements for
selected members of senior management of the Instem Group following completion
of the Acquisition.
Location of business, fixed assets and headquarters; research and development
Bidco has no plans to change the locations of business or the headquarters of
Instem beyond any ordinary course changes planned by the current management of
Instem. Bidco does not intend to redeploy the fixed assets of Instem. Bidco
has no intention to make any changes to Instem's research and development
function.
Trading Facilities
The Instem Shares are admitted to trading on the London Stock Exchange's AIM
market. As set out in paragraph 15, it is intended that an application will be
made for the cancellation of trading of the Instem Shares on the London Stock
Exchange's AIM market to take effect on or shortly after the Effective Date.
It is intended that Instem be re-registered as a private limited company on,
or as soon as practicable following, the Effective Date.
Statements
No statements in this paragraph 10 constitute "post-offer undertakings" for
the purposes of Rule 19.5 of the Code.
11. Financing
The cash consideration payable to the Instem Shareholders under the terms of
the Acquisition is intended to be financed by indirect capital contributions
to Bidco to be invested by (i) MED Platform II S.L.P. and (ii) MED Platform
II B FPCI (in connection with which an equity commitment letter has been
entered into with Bidco).
Moelis, in its capacity as financial adviser to Bidco, is satisfied that
sufficient resources are available to Bidco to enable it to satisfy in full
the cash consideration payable to Instem Shareholders under the terms of the
Acquisition.
Further information on the financing of the Acquisition will be set out in the
Scheme Document.
12. Offer-related arrangements
Confidentiality Agreement
ARCHIMED and Instem entered into a confidentiality agreement dated 7 June 2023
pursuant to which, amongst other things, ARCHIMED has undertaken to: (a)
subject to certain exceptions, keep confidential information relating to
Instem confidential and not to disclose it to third parties; and (b) use such
confidential information only in connection with the Acquisition. The
confidentiality obligations remain in force notwithstanding termination of
discussions relating to the Acquisition. The Confidentiality Agreement further
includes standstill obligations which restricted ARCHIMED from acquiring or
offering to acquire interest in certain securities of Instem; those
restrictions ceased to apply on the making of this Announcement.
Co-operation Agreement
Bidco and Instem entered into a co-operation agreement on or around the date
of this Announcement (the "Co-operation Agreement") in connection with the
Acquisition.
Pursuant to the Co-operation Agreement, each of Bidco and Instem has agreed to
co-operate with each other for the purposes of obtaining all regulatory
approvals and preparing the Scheme Document. The Co-operation Agreement also
contains certain provisions regarding a switch to implement the Acquisition by
way of a Takeover Offer.
The Co-operation Agreement will terminate, amongst other things: (i) if it is
agreed in writing between Bidco and Instem at any time prior to the Effective
Date; (ii) upon service of written notice by Bidco to Instem if (amongst other
things) certain changes have occurred in relation to the Instem Board's
recommendation of the Acquisition; or (iii) upon service of written notice by
Bidco to Instem or Instem to Bidco if (amongst other things) the Acquisition
(whether implemented by way of a Scheme or a Takeover Offer) lapses,
terminates or is withdrawn on or prior to the Long Stop Date (other than in
certain circumstances including a switch to a Takeover Offer agreed between
Bidco and Instem) or, if the Scheme is not approved by the requisite majority
of the holders of the Scheme Shares at the Court Meeting and/or Instem
Shareholders at the General Meeting or the Court refuses to sanction the
Scheme.
The Co-operation Agreement also contains provisions that will apply in respect
of certain employee-related matters and the Instem Share Plans.
Clean Team Agreement
Bidco and Instem entered into a clean team agreement on 24 August 2023 (the
"Clean Team Agreement"). The purpose of the Clean Team Agreement is to
provide for a "clean team" protocol to facilitate the provision by Instem of
confidential information to Bidco's external legal adviser for the purposes of
assessing the regulatory approvals required in connection with the
Acquisition.
13. Structure of the Acquisition
Scheme
It is intended that the Acquisition will be effected by a scheme of
arrangement between Instem and the Scheme Shareholders under Part 26 of the
Companies Act (although Bidco reserves the right to effect the Acquisition by
way of a Takeover Offer, subject to the consent of the Takeover Panel and the
terms of the Co-operation Agreement). The purpose of the Scheme is to provide
for Bidco to acquire the whole of the issued and to be issued share capital of
Instem. Under the Scheme, the Acquisition is to be achieved by the transfer of
the Scheme Shares held by Scheme Shareholders to Bidco in consideration for
which the Scheme Shareholders will receive cash consideration pursuant to the
Scheme.
Approval by Court Meeting and General Meeting
To become Effective, the Scheme requires, amongst other things:
(a) approval of a majority in number of the Instem Shareholders
present and voting (and entitled to vote) at the Court Meeting, either in
person or by proxy, representing not less than 75 per cent. in value of the
Scheme Shares voted by those Instem Shareholders at the Court Meeting; and
(b) approval by the requisite majority of the Resolution at the
General Meeting (to be held directly after the Court Meeting) necessary in
order to implement the Scheme.
Application to Court to sanction the Scheme
Once the approvals have been obtained at the Court Meeting and the General
Meeting and the other Conditions have been satisfied or (where applicable)
waived, the Scheme must be sanctioned by the Court at the Sanction Hearing
before it can become Effective.
The Scheme will become Effective in accordance with its terms on delivery of
the Court Order to the Registrar of Companies. Upon the Scheme becoming
Effective, it will be binding on all Scheme Shareholders, irrespective of
whether or not they attended or voted at the Court Meeting or General Meeting,
or whether they voted in favour of or against the Scheme.
The Scheme will contain a provision for Bidco and Instem jointly to consent,
on behalf of all persons concerned, to any modification of or addition to the
Scheme or to any condition that the Court may approve or impose. Instem has
been advised that the Court would be unlikely to approve any modification of,
or addition to, or impose a condition to the Scheme which might be material to
the interests of Scheme Shareholders unless Scheme Shareholders were informed
of such modification, addition or condition. It would be a matter for the
Court to decide, in its discretion, whether or not a further meeting of the
Instem Shareholders should be held in these circumstances.
Full details of the Scheme to be set out in the Scheme Document
The Scheme Document will include full details of the Scheme, including the
expected timetable and the action to be taken by Scheme Shareholders. The
Scheme will be governed by English law. The Scheme will be subject to the
applicable requirements of the Code, the Takeover Panel, the AIM Rules, the
London Stock Exchange and the FCA.
The Scheme Document, along with the notice of the Court Meeting and the
General Meeting and the Forms of Proxy will be despatched to Instem
Shareholders within 28 days of the date of this Announcement, unless Bidco and
Instem otherwise agree, and the Takeover Panel consents, to a later date.
Subject to certain restrictions relating to persons resident in Restricted
Jurisdictions, the Scheme Document will also be made available on Instem's
website at https://investors.instem.com and on Bidco's website at
www.Ichor-offer.com.
At this stage, subject to the satisfaction or waiver of the Conditions and
certain further terms set out in Appendix I, Bidco and Instem expect the
Acquisition to become Effective during the fourth quarter of 2023.
If the Scheme does not become Effective on or before the Long Stop Date (or
such later date as Bidco and Instem may, with the consent of the Takeover
Panel and, if required, the Court, agree) it will lapse and the Acquisition
will not proceed (unless the Takeover Panel otherwise consents).
Right to switch to a Takeover Offer
Subject to the terms of the Co-operation Agreement, Bidco reserves the right
to elect, with the consent of the Takeover Panel, to implement the Acquisition
by way of a Takeover Offer for the entire issued and to be issued ordinary
share capital of Instem as an alternative to the Scheme. In such an event, the
Takeover Offer will be made in accordance with the terms and conditions set
out in this Announcement which would apply to the Scheme (with any
modifications or amendments to such terms and conditions as may be required by
the Takeover Panel or which are necessary as a result of Bidco's election to
implement the Acquisition by way of a Takeover Offer), in accordance with the
Co-operation Agreement and subject to the amendment referred to in Appendix I
to this Announcement.
14. Instem Share Plans
Participants in the Instem Share Plans will be contacted regarding the effect
of the Acquisition on their rights under the Instem Share Plans and, where
relevant, an appropriate proposal will be made to such participants pursuant
to Rule 15 of the Code in due course. Further details of the impact of the
Acquisition on each of the Instem Share Plans will be set out in the Scheme
Document.
Upon or following the date of this Announcement, Instem intends to make
certain further grants of options under the Instem plc 2018 Long Term
Incentive Plan, over a total of 505,837 Instem Shares.
15. De-listing and re-registration
It is intended that an application will be made to the London Stock Exchange
to cancel trading of the Instem Shares on AIM on or shortly after the
Effective Date. The last day of dealings in, and registration of transfers of,
Instem Shares on AIM is expected to be the Business Day immediately prior to
the Effective Date and no transfers will be registered after 6.00 p.m. on that
date.
Upon the Scheme becoming Effective, share certificates in respect of the
Instem Shares will cease to be valid and should be destroyed. In addition,
entitlements to Instem Shares held within the CREST system will be cancelled
on the Effective Date.
As soon as practicable after the Effective Date, it is intended that Instem
will be re-registered as a private limited company under the relevant
provisions of the Companies Act.
16. Disclosure of interests in Instem
As at the close of business on 29 August 2023, being the last Business Day
prior to this Announcement, save for the irrevocable undertakings referred to
in paragraphs 3 (Recommendation) and 7 (Irrevocable undertakings) above, so
far as Bidco is aware, no person acting, or deemed to be acting, in concert
with Bidco:
(a) had an interest in, or right to subscribe for, relevant
securities of Instem;
(b) had any short position in (whether conditional or absolute and
whether in the money or otherwise), including any short position under a
derivative, any agreement to sell or any delivery obligation or right to
require another person to purchase or take delivery of, relevant securities of
Instem;
(c) had procured an irrevocable commitment or letters of intent
to accept the terms of the Acquisition in respect of relevant securities of
Instem; or
(d) had borrowed or lent any Instem Shares (including, for these
purposes, any financial collateral arrangements of the kind referred to in
Note 4 to Rule 4.6 of the Code).
Furthermore, save for the irrevocable undertakings described in paragraph 7
(Irrevocable undertakings) above, no arrangement exists between Bidco or
Instem or a person acting in concert with Bidco or Instem in relation to
Instem Shares. For these purposes, an "arrangement" includes any indemnity or
option arrangement, any agreement or any understanding, formal or informal, of
whatever nature, relating to Instem Shares which may be an inducement to deal
or refrain from dealing in such securities.
Bidco is not aware of any dealings in Instem Shares that would require a
minimum level, or particular form of consideration that it would be obliged to
offer under Rule 6 or Rule 11 of the Code (as appropriate). However, it has
not been practicable for Bidco to make enquiries of all of its concert parties
in advance of the release of this Announcement. In accordance with Note 4 on
Rule 2.4 of the Code, any such details shall be announced as soon as
practicable and in any event by no later than the time Bidco is required to
make its Opening Position Disclosure pursuant to Rule 8.1 of the Code.
17. Documents on display
Copies of this Announcement and the following documents will, by no later than
12 noon on the Business Day following the date of this Announcement, be made
available on Instem's website at https://investors.instem.com and on Bidco's
website at www.Ichor-offer.com until the end of the Offer Period:
· this Announcement;
· the Confidentiality Agreement;
· the irrevocable undertakings referred to in paragraph 7
above;
· the Co-operation Agreement;
· the Clean Team Agreement;
· the documents entered into in relation to the financing
of the Acquisition referred to in paragraph 11 above; and
· the consent letters from each of Rothschild & Co,
Singer Capital Markets and Moelis.
18. General
The Acquisition will be subject to the Conditions and certain further terms
set out in Appendix I and to the full terms and conditions which will be set
out in the Scheme Document. The Scheme Document, along with the notice of the
Court Meeting and the General Meeting and the Forms of Proxy will be
despatched to Instem Shareholders within 28 days of the date of this
Announcement, (or by such later date as Bidco and Instem may agree, with the
consent of the Takeover Panel).
In deciding whether or not to vote or procure votes in favour of the Scheme at
the Court Meeting and the Resolution to be proposed at the General Meeting,
Instem Shareholders should rely on the information contained, and follow the
procedures described, in the Scheme Document.
Rothschild & Co, Singer Capital Markets and Moelis have each given and not
withdrawn their consent to the inclusion in this Announcement of the
references to their names in the form and context in which they appear.
Appendix II contains details of sources of information and bases of
calculation contained in this Announcement. Appendix III contains certain
details relating to the irrevocable undertakings referred to in this
Announcement. Appendix IV contains definitions of certain terms used in this
Announcement.
Enquiries:
Instem
Phil
Reason
Via Walbrook
Nigel Goldsmith
Rothschild & Co (Financial Adviser to Instem)
Alistair
Allen
Tel: +44 (0) 161 827 3800
Julian Hudson
Tom Palmer
Singer Capital Markets Advisory LLP (Nominated Adviser, Joint Financial
Adviser and Joint Broker to Instem)
Peter
Steel
Tel: +44 (0) 20 7496 3000
Alex Bond
Oliver Platts
Stifel Nicolaus Europe Limited (Joint Broker to Instem)
Ben
Maddison
Tel: +44 (0) 20 7710 7600
Richard Short
Walbrook Financial PR (Public Relations Adviser to Instem)
Tom
Cooper
Tel: +44 (0) 20 7933 8780
Nick Rome
Joe Walker
ARCHIMED SAS
Vincent
Guillaumot
Tel: +33 4 81 11 35 33
Brian Sheridan
Sandrine Laporte
Moelis & Company UK LLP (Financial Adviser to ARCHIMED and Bidco)
Philippe Gallone
Tel: +44 (0) 20 7634 3500
Chris Raff
François Saint-Lo
Simon Chaudhuri
Latham & Watkins (London) LLP are retained as legal adviser to ARCHIMED
and Bidco.
Squire Patton Boggs (UK) LLP are retained as legal adviser to Instem.
Disclaimers
Rothschild & Co, which is authorised and regulated by the FCA in the
United Kingdom, is acting exclusively as financial adviser to Instem and for
no one else in connection with the matters set out in this Announcement and
will not be responsible to anyone other than Instem for providing the
protections afforded to clients of Rothschild & Co, nor for providing
advice in relation to the Acquisition or any other matters referred to in this
Announcement. Neither Rothschild & Co nor any of its subsidiaries,
branches or affiliates (nor their respective directors, officers, employees or
agents) 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 Rothschild & Co in
connection with this Announcement, any statement contained in this
Announcement, the Acquisition or otherwise. No representation or warranty,
express or implied, is made by Rothschild & Co as to the contents of this
Announcement.
Singer Capital Markets Advisory LLP, which is authorised and regulated by the
FCA in the United Kingdom, is acting exclusively for Instem and no-one else in
connection with the subject matter of this Announcement and will not be
responsible to anyone other than Instem for providing the protections afforded
to clients of Singer Capital Markets nor for providing advice in connection
with the subject matter of this Announcement. Neither Singer Capital Markets
nor any of its affiliates (nor any of their respective directors, partners,
officers, employees or agents) 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 Singer
Capital Markets in connection with this Announcement, any statement contained
herein, the Acquisition or otherwise. No representation or warranty, express
or implied, is made by Singer Capital Markets as to the contents of this
Announcement.
Moelis & Company UK LLP ("Moelis"), which is regulated by the FCA in the
United Kingdom, is acting exclusively for ARCHIMED and Bidco and no one else
in connection with the Acquisition and other matters set out in this
Announcement and will not be responsible to anyone other than ARCHIMED and
Bidco for providing the protections afforded to clients of Moelis, or for
providing advice in connection with the Acquisition or any matter referred to
herein. Neither Moelis 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 Moelis in connection with this Announcement, any statement contained
herein or otherwise.
Further information
This Announcement is for information purposes only and is not intended to and
does not constitute, or form any part of, an offer to sell or subscribe for or
any invitation to purchase or subscribe for any securities or the solicitation
of any vote or approval in any jurisdiction pursuant to the Acquisition or
otherwise. The Acquisition will be made solely through and on the terms set
out in the Scheme Document (or, in the event that the Acquisition is to be
implemented by means of a Takeover Offer, the Offer Document) and the
accompanying Forms of Proxy, which will contain the full terms and conditions
of the Acquisition, including details of how to vote in respect of the
Acquisition. Any vote, approval, decision or other response to the Acquisition
should be made only on the basis of the information in the Scheme Document
(or, if the Acquisition is implemented by way of a Takeover Offer, the Offer
Document). Scheme Shareholders are strongly advised to read the formal
documentation in relation to the Acquisition once it has been despatched.
This Announcement does not constitute a prospectus or a prospectus exempted
document.
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.
Overseas shareholders
This Announcement has been prepared for the purpose of complying with English
law, the AIM Rules and the 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.
The laws of the relevant jurisdictions may affect the availability of the
Acquisition to persons who are not resident in the United Kingdom. Persons who
are not resident in the United Kingdom, or who are subject to laws of any
jurisdiction other than the United Kingdom, should inform themselves about,
and observe any applicable requirements. Any person (including, without
limitation, nominees, trustees and custodians) who would, or otherwise intends
to, forward this Announcement, the Scheme Document or any accompanying
document to any jurisdiction outside the United Kingdom should refrain from
doing so and seek appropriate professional advice before taking any action. In
particular, the ability of persons who are not resident in the United Kingdom
to vote their Instem Shares at the Court Meeting or the General Meeting, or to
execute and deliver Forms of Proxy appointing another to vote their Instem
Shares in respect of the Court Meeting or the General Meeting on their behalf,
may be affected by the laws of the relevant jurisdiction in which they are
located.
Any failure to comply with the applicable legal or regulatory requirements may
constitute a violation of the laws and/or regulations of any such
jurisdiction. To the fullest extent permitted by applicable law, the companies
and persons involved in the Acquisition disclaim any responsibility and
liability for the violation of such restrictions by any person.
The Acquisition will not be made, directly or indirectly, in or into or by use
of the mails or any other means or instrumentality (including, without
limitation, telephonic or electronic) of interstate or foreign commerce of, or
any facility of a national, state or other securities exchange of, a
Restricted Jurisdiction, and the Acquisition will not be capable of acceptance
by any such use, means, instrumentality or facility or from within a
Restricted Jurisdiction. Accordingly, copies of this Announcement and formal
documentation relating to the Acquisition are not being, and must not be,
directly or indirectly, mailed or otherwise forwarded or distributed in, into
or from a Restricted Jurisdiction and persons receiving this Announcement
(including custodians, nominees and trustees) must not distribute or send it
into or from a Restricted Jurisdiction. In the event that the Acquisition is
implemented by way of a Takeover Offer and extended into the US, Bidco will do
so in satisfaction of the procedural and filing requirements of US securities
laws at that time, to the extent applicable thereto. The Acquisition relates
to the shares of a company incorporated in England and it is proposed to be
made by means of a scheme of arrangement provided for under English law. The
Scheme will relate to the shares of a UK company that is a "foreign private
issuer" as defined under Rule 3b-4 under the US Exchange Act. A transaction
effected by means of a scheme of arrangement is not subject to any shareholder
vote, proxy solicitation and tender offer rules under the US Exchange Act.
Accordingly, the Scheme is subject to the disclosure requirements and
practices applicable in the UK to schemes of arrangement, which differ from
the disclosure requirements and practices of US shareholder vote, proxy
solicitation or tender offer rules. Financial information included in the
relevant documentation will have been prepared in accordance with accounting
standards applicable in the UK and may not be comparable to the financial
information of, or the accounting standards applicable to, US companies.
However, if Bidco were to elect to implement the Acquisition by means of a
Takeover Offer, such Takeover Offer shall be made in compliance with all
applicable laws and regulations, including section 14(e) of the US Exchange
Act and Regulation 14E thereunder, if applicable. Such Takeover Offer would be
made in the US by Bidco and no one else. In addition to any such Takeover
Offer, Bidco, certain affiliated companies and the nominees or brokers (acting
as agents) may make certain purchases of, or arrangements to purchase, shares
in Instem outside such Takeover Offer during the period in which such Takeover
Offer would remain open for acceptance. If such purchases or arrangements to
purchase are made they would be made outside the United States in compliance
with applicable law, including the US Exchange Act. It may be difficult for a
US-based investor to enforce his or her rights and any claim he or she may
have arising under US securities laws, since the Scheme relates to the shares
of a company located in the UK, and some or all of its officers and directors
may be residents of non-US jurisdictions. A US-based investor may not be able
to sue a company located in the UK, or its officers or directors, in a foreign
court for alleged violations of US securities laws, and it may be difficult to
compel a foreign company and its affiliates to subject themselves to a US
court's judgment.
Forward-looking statements
This Announcement, oral statements made regarding the Acquisition, and other
information published by Instem, Bidco and ARCHIMED may contain certain
"forward-looking statements" with respect to Instem, Bidco and ARCHIMED. These
forward-looking statements can be identified by the fact that they do not
relate only to historical or current facts. Forward-looking statements often
use words such as "anticipate", "target", "expect", "estimate", "intend",
"plan", "goal", "believe", "will", "may", "should", "would", "could" or other
words or terms of similar meaning or the negative thereof. Forward-looking
statements include statements relating to, for example, 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 of ARCHIMED and/or
Bidco and the expansion and growth of Instem and potential synergies resulting
from the Acquisition; and (iii) the effects of government regulation on the
business of Instem.
These forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause actual results, performance or
developments to differ materially from those expressed in or implied by such
forward-looking statements. These forward-looking statements are based on
numerous assumptions regarding present and future strategies and environments.
None of ARCHIMED, Bidco or Instem, nor any of their respective associates,
directors, officers, employees 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 undue reliance on such forward-looking
statements, which speak only as of the date hereof. All subsequent oral or
written forward-looking statements attributable to ARCHIMED, Bidco or Instem
or any person acting on their behalf are expressly qualified in their entirety
by the cautionary statement above. Should one or more of these risks or
uncertainties materialise, or should underlying assumptions prove incorrect,
actual results may vary materially from those described in this Announcement.
None of ARCHIMED, Bidco or Instem assume any obligation to update publicly or
revise forward-looking or other statements contained in this Announcement,
whether as a result of new information, future events or otherwise, except to
the extent legally required.
No profit forecasts or estimates
No statement in this Announcement is intended as a profit forecast or estimate
for ARCHIMED, Bidco or Instem in respect of any period and no statement in
this Announcement should be interpreted to mean that earnings or earnings per
Instem Share for the current or future financial years would necessarily match
or exceed the historical published earnings or earnings per Instem Share.
Right to switch to a Takeover Offer
Subject to the terms of the Co-operation Agreement, Bidco reserves the right
to elect, with the consent of the Takeover Panel, to implement the Acquisition
by way of a Takeover Offer for the entire issued and to be issued ordinary
share capital of Instem as an alternative to the Scheme. In such an event, the
Takeover Offer will be made in accordance with the terms and conditions set
out in this Announcement which would apply to the Scheme (with any
modifications or amendments to such terms and conditions as may be required by
the Takeover Panel or which are necessary as a result of Bidco's election to
implement the Acquisition by way of a Takeover Offer), in accordance with the
Co-operation Agreement and subject to the amendment referred to in Appendix I
to this Announcement.
Publication on website
In accordance with Rule 26.1 of the Code, a copy of this Announcement will be
made available (subject to certain restrictions relating to persons resident
in Restricted Jurisdictions), free of charge, on Instem's website at
https://investors.instem.com and on Bidco's website at www.Ichor-offer.com by
no later than 12:00 noon on the Business Day following this Announcement.
Neither the contents of this website nor the content of any other website
accessible from hyperlinks on such websites is incorporated into, or forms
part of, this Announcement.
Requesting hard copies
In accordance with Rule 30.3 of the Code, a person so entitled may request a
hard copy of this Announcement, free of charge, by contacting Instem's
registrar, Computershare Investor Services PLC during business hours (8.30
a.m. to 5.30 p.m.) on +44 (0)370 703 6041 or by submitting a request in
writing to Computershare Investor Services PLC at The Pavilions, Bridgwater
Road, Bristol, BS13 8AE. For persons who receive a copy of this Announcement
in electronic form or via a website notification, a hard copy of this
Announcement will not be sent unless so requested. In accordance with Rule
30.3 of the 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.
Electronic communications - information for Instem Shareholders
Please be aware that addresses, electronic addresses and certain information
provided by Instem Shareholders, persons with information rights and other
relevant persons for the receipt of communications from Instem may be provided
to Bidco during the Offer Period as required under section 4 of Appendix 4 of
the Code to comply with Rule 2.11(c) of the Code.
Rounding
Certain figures included in this Announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of the figures that precede them.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or
more of any class of relevant securities of Instem 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) Instem 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
Instem 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
per cent. or more of any class of relevant securities of Instem or of any
securities exchange offeror must make a Dealing Disclosure if the person deals
in any relevant securities of Instem 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) Instem and (ii) any securities exchange
offeror, 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 Instem 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 Instem and by any offeror,
and Dealing Disclosures must also be made by Instem, 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
Takeover 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 of the Code
For the purposes of Rule 2.9 of the Code, Instem confirms that, as at the date
of this Announcement, it had in issue 22,899,433 ordinary shares of 10 pence
each. No shares are held in treasury. The ISIN for the ordinary shares is
GB00B3TQCK30.
General
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 or
independent financial adviser duly authorised under FSMA if you are resident
in the United Kingdom or, if not, from another appropriate authorised
independent financial adviser.
APPENDIX I
CONDITIONS OF THE ACQUISITION AND CERTAIN FURTHER TERMS
Part A: Conditions of the Scheme and the Acquisition
1. The Acquisition is conditional upon the Scheme becoming
unconditional and effective, subject to the Code, by not later than 11:59 p.m.
on the Long Stop Date.
2. The Scheme shall be subject to the following conditions:
(a) (i) its approval by a majority in number of the Instem
Shareholders who are on the register of members of Instem at the Voting Record
Time and who are present and vote, whether in person or by proxy, at the Court
Meeting (and at any separate class meeting which may be required by the Court)
and who represent 75 per cent. in value of the Instem Shares voted by those
Instem Shareholders, and (ii) such Court Meeting (and any separate class
meeting which may be required) being held on or before the 22nd day after the
expected date of the Court Meeting to be set out in the Scheme Document (or
such later date, if any, as Bidco and Instem may agree and the Court may
allow);
(b) (i) the passing of the Resolution necessary in order to
implement the Scheme by the requisite majority at the General Meeting (or any
adjournment thereof), and (ii) such General Meeting being held on or before
the 22nd day after the expected date of the General Meeting to be set out in
the Scheme Document (or such later date, if any, as Bidco and Instem may agree
and the Court may allow);
(c) (i) the sanction of the Scheme by the Court (with or without
modification but subject to any modification being on terms acceptable to
Bidco and Instem), and (ii) the Sanction Hearing being held on or before the
22nd day after the expected date of the Sanction Hearing to be set out in the
Scheme Document (or such later date, if any, as Bidco and Instem may agree and
the Court may allow); and
(d) delivery of a copy of the Court Order to the Registrar of
Companies.
3. In addition, subject as stated in Part B below and to the
requirements of the Takeover Panel, the Acquisition shall be conditional upon
the following Conditions and, accordingly, the Court Order shall not be
delivered to the Registrar of Companies unless such Conditions (as amended, if
appropriate) have been satisfied (and continue to be satisfied pending the
commencement of the Sanction Hearing) or, where relevant, waived in writing
prior to the Scheme being sanctioned by the Court:
NSIA Condition
(a) United Kingdom: a notification having been made and accepted
under the UK National Security and Investment Act 2021 (the "NSIA") and one of
the following having occurred:
(i) the Secretary of State confirming before the end of the
review period that no further action will be taken in relation to the
Acquisition;
(ii) if the Secretary of State issues a call-in notice in relation
to the Acquisition, the parties receiving a final notification pursuant to
section 26(1)(b) of the NSIA containing confirmation that the Secretary of
State will take no further action in relation to the call-in notice and the
Acquisition under the NSIA;
(iii) the Secretary of State making a final order pursuant to
Section 26(1)(a) of the NSIA allowing the Acquisition to proceed
unconditionally or on terms satisfactory to Bidco; or
(iv) Bidco having received written notice by or on behalf of the
Secretary of State to the effect that the Acquisition is not a notifiable
acquisition pursuant to the NSIA;
Third Party Regulatory action
(b) no Third Party having decided, threatened or given notice of
a decision to take, institute, implement or threaten any action, proceeding,
suit, investigation, enquiry or reference (and in each case not having
withdrawn the same), or having required any action to be taken or otherwise
having done anything, or having enacted, made or proposed any statute,
regulation, decision, order or change to published practice (and in each case
not having withdrawn the same) and there not continuing to be outstanding any
statute, regulation, decision or order which would or might reasonably be
expected to (in any case to an extent or in a manner which is material in the
context of the Acquisition, the Wider Target Group or the Wider Bidco Group,
as the case may be, in each case, taken as a whole):
(i) require, prevent or materially delay the divestiture or
materially alter the terms envisaged for such divestiture by any member of the
Wider Bidco Group or by any member of the Wider Target Group of all or any
material part of their respective businesses, assets, property or any shares
or other securities (or the equivalent) in any member of the Wider Target
Group or any member of the Wider Bidco Group or impose any material limitation
on the ability of all or any of them to conduct their respective businesses
(or any part thereof) or to own, control or manage any of their respective
assets or properties (or any part thereof);
(ii) except pursuant to Chapter 3 of Part 28 of the Companies Act,
in the event that Bidco elects to implement the Acquisition by way of a
Takeover Offer, require any member of the Wider Bidco Group or the Wider
Target Group to acquire or offer to acquire any shares, other securities (or
the equivalent) or interest in any member of the Wider Target Group or any
asset owned by any Third Party (other than in connection with the
implementation of the Acquisition);
(iii) impose any material limitation on, or result in a material
delay in, the ability of any member of the Wider Bidco Group, directly or
indirectly, to acquire, hold or exercise effectively all or any rights of
ownership in respect of shares or loans or securities convertible into shares
or other securities (or the equivalent) in Instem or on the ability of any
member of the Wider Target Group or any member of the Wider Bidco Group,
directly or indirectly, to hold or exercise effectively all or any rights of
ownership in respect of shares or loans or any other securities (or the
equivalent) in, or to exercise voting or management control over, any other
member of the Wider Target Group;
(iv) except as Disclosed, result in any member of the Wider Target
Group or any member of the Wider Bidco Group ceasing to be able to carry on
business under any names under which it currently carries on business;
(v) make the Acquisition, its implementation or the acquisition or
proposed acquisition of any shares or other securities in, or control or
management of, Instem by any member of the Wider Bidco Group void,
unenforceable and/or illegal under the laws of any relevant jurisdiction, or
otherwise, directly or indirectly, prevent or prohibit, restrict, restrain or
delay or otherwise interfere with the implementation of, or impose additional
conditions or obligations with respect to, or otherwise challenge, impede,
interfere or require material amendment to the terms of the Acquisition or the
acquisition or proposed acquisition of any shares or other securities in, or
control or management of Instem by any member of the Wider Bidco Group;
(vi) impose any material limitation on, or result in material delay
in, the ability of any member of the Wider Bidco Group or any member of the
Wider Target Group to conduct, integrate or co-ordinate all or any part of its
business with all or any part of the business of any other member of the Wider
Bidco Group and/or the Wider Target Group; or
(vii) otherwise materially adversely affect all or any of the
business, value, assets, liabilities, profits, operational performance,
financial or trading position or prospects of any member of the Wider Target
Group or any member of the Wider Bidco Group;
and all applicable waiting and other time periods (including any extensions
thereof) during which any such Third Party could decide to take, institute,
implement or threaten any such action, proceeding, suit, investigation,
enquiry or reference or take any other step under the laws of any jurisdiction
in respect of the Acquisition having expired, lapsed or been terminated;
Other regulatory approvals
(c) each Governmental Entity, which regulates or licences any
member of the Instem Group or any other body corporate in which any member of
the Instem Group has an interest in shares, and whose prior approval, consent
or non-objection to any change in control, or acquisition of (or increase in)
control in respect of that or any other member of the Instem Group is
required, or any Governmental Entity, whose prior approval, consent or
non-objection of the Acquisition is otherwise required, or from whom one or
more material licences or permissions are required in order to complete the
Acquisition, having given its approval, non-objection or legitimate deemed
consent or consent in writing thereto and, as the case may be, having granted
such licences and permissions (in each case where required and on terms
reasonably satisfactory to Bidco), and in each case the impact of which would
materially adversely affect the Wider Target Group or the Wider Bidco Group,
taken as a whole;
Notifications, waiting periods and authorisations
(d) all material notifications, filings or applications which
are necessary or considered appropriate or desirable by Bidco having been made
in connection with the Acquisition and all necessary waiting and other time
periods (including any extensions thereof) under any applicable legislation or
regulation of any jurisdiction having expired, lapsed or been terminated (as
appropriate) and all statutory and regulatory obligations in any jurisdiction
having been complied with, in each case, in respect of the Scheme and the
Acquisition and all Authorisations deemed reasonably necessary or appropriate
by Bidco in any jurisdiction for or in respect of the Acquisition and, except
pursuant to section 160 of the Companies Act and Chapter 3 of Part 28 of the
Companies Act, or control or management of, Instem or any other member of the
Wider Target Group by any member of the Wider Bidco Group having been obtained
in terms and in a form reasonably satisfactory to Bidco from all appropriate
Third Parties or (without prejudice to the generality of the foregoing) from
any person or bodies with whom any member of the Wider Target Group or the
Wider Bidco Group has entered into contractual arrangements and all such
Authorisations necessary, appropriate or desirable to carry on the business of
any member of the Wider Target Group in any jurisdiction having been obtained
and all such Authorisations remaining in full force and effect at the time at
which the Acquisition becomes otherwise wholly unconditional and there being
no notice or intimation of an intention to revoke, suspend, restrict, modify
or not to renew such Authorisations;
Instem Shareholder resolution
(e) except with the consent or the agreement of Bidco, no action
having been taken or proposed by any member of the Instem Group, or having
been approved by a resolution of Instem Shareholders, or consented to by the
Takeover Panel, which falls within or under Rule 21.1 of the Code;
Certain matters arising as a result of any arrangement, agreement, etc.
(f) except as Disclosed, there being no provision of any
arrangement, agreement, lease, licence, franchise, permit or other instrument
to which any member of the Wider Target Group is a party or by or to which any
such member or any of its assets is or may be bound, entitled or subject, or
any event or circumstance which, as a consequence of the Acquisition or
because of a change in the control of any member of the Wider Target Group as
a result of the Acquisition, would or might reasonably be expected to result
in (in each case to an extent or in a manner which is material in the context
of the Wider Target Group taken as a whole):
(i) any monies borrowed by, or any other indebtedness or
liabilities, actual or contingent, of, or any grant available to, any such
member being or becoming repayable, or capable of being declared repayable,
immediately or prior to its or their stated maturity date or repayment date,
or the ability of any such member to borrow monies or incur any indebtedness
being withdrawn or inhibited or being capable of becoming or being withdrawn
or inhibited;
(ii) the creation, save in the ordinary and usual course of
business, or enforcement of any mortgage, charge or other security interest
over the whole or any part of the business, property or assets of such member
or any such mortgage, charge or other security interest (whenever created,
arising or having arisen) becoming enforceable;
(iii) any such arrangement, agreement, lease, licence, franchise,
permit or other instrument or the rights, liabilities, obligations or
interests of any such member in or with any other person (or any arrangement
or arrangements relating to any such interests or business) being adversely
modified or adversely affected or any onerous obligation or liability arising
or any adverse action being terminated, taken or arising thereunder;
(iv) any liability of any such member to make any severance,
termination, bonus or other payment to any of its directors or other officers;
(v) the rights, liabilities, obligations, interests or business of
any such member under any such arrangement, agreement, licence, permit, lease
or instrument or the interests or business of any such member or any member of
the Wider Target Group in or with any other person or body or firm or company
(or any arrangement relating to any such interests or business) being
terminated, or adversely modified or affected or any onerous obligation or
liability arising or any adverse action being taken thereunder;
(vi) any such member ceasing to be able to carry on business under
any name under which it presently carries on business;
(vii) any material assets or material interests of, or any material
asset the use of which is enjoyed by, any such member being or falling to be
disposed of or charged or any right arising under which any such asset or
interest could be required to be disposed of or charged or could cease to be
available to any such member otherwise than in the ordinary course of
business;
(viii) the financial or trading position or prospects of, any such
member being prejudiced or adversely affected; or
(ix) the creation or acceleration of any material liability (actual
or contingent) by any such member other than trade creditors or other
liabilities incurred in the ordinary course of business,
and no event having occurred which, under any provision of any arrangement,
agreement, licence, permit, franchise, lease or other instrument to which any
member of the Wider Target Group is a party or by or to which any such member
or any of its assets are bound, entitled or subject, would or might result in
any of the events or circumstances as are referred to in Conditions 3(f)(i) to
(ix) above, in each case which is or would be material in the context of the
Wider Target Group taken as a whole;
Certain events occurring since 31 December 2022
(g) except as Disclosed, no member of the Wider Target Group
having since 31 December 2022:
(i) issued or agreed to issue or authorised or proposed or
announced its intention to authorise or propose the issue, of additional
shares of any class, or securities or securities convertible into, or
exchangeable for, or rights, warrants or options to subscribe for or acquire,
any such shares, securities or convertible securities or transferred or sold
or agreed to transfer or sell or authorised or proposed the transfer or sale
of Instem Shares out of treasury (except, where relevant, as between Instem
and wholly-owned subsidiaries of Instem or between the wholly-owned
subsidiaries of Instem and except for the issue or transfer of Instem Shares
out of treasury on the vesting of awards or exercise of options in the
ordinary course under the Instem Share Plans);
(ii) recommended, declared, paid or made or proposed to recommend,
declare, pay or make any bonus, dividend or other distribution (whether
payable in cash or otherwise) other than dividends (or other distributions
whether payable in cash or otherwise) lawfully paid or made by any
wholly-owned subsidiary of Instem to Instem or any of its wholly-owned
subsidiaries;
(iii) other than pursuant to the Acquisition (and except for
transactions between Instem and its wholly-owned subsidiaries or between the
wholly-owned subsidiaries of Instem and transactions in the ordinary course of
business) implemented, effected, authorised or proposed or announced its
intention to implement, effect, authorise or propose any merger, demerger,
reconstruction, amalgamation, scheme, commitment or acquisition or disposal of
assets or shares or loan capital (or the equivalent thereof) in any
undertaking or undertakings in any such case to an extent which is material in
the context of the Wider Target Group taken as a whole or in the context of
the Acquisition;
(iv) except for transactions between Instem and its wholly-owned
subsidiaries or between the wholly-owned subsidiaries of Instem and
transactions in the ordinary course of business, disposed of, or transferred,
mortgaged or created any security interest over any material asset or any
right, title or interest in any material asset or authorised, proposed or
announced any intention to do so;
(v) except for transactions between Instem and its wholly-owned
subsidiaries or between the wholly-owned subsidiaries of Instem issued,
authorised or proposed or announced an intention to authorise or propose, the
issue of or made any change in or to the terms of any debentures or become
subject to any contingent liability or incurred or increased any indebtedness
which in any such case is material in the context of the Wider Target Group
taken as a whole or in the context of the Acquisition;
(vi) entered into or varied or authorised, proposed or announced its
intention to enter into or vary any material contract, arrangement, agreement,
transaction or commitment (whether in respect of capital expenditure or
otherwise) which is of a long term, unusual or onerous nature or magnitude or
which is or which involves or could involve an obligation of an onerous nature
or magnitude, otherwise than in the ordinary course of business and in each
case to an extent which is material in the context of the Wider Target Group
taken as a whole;
(vii) entered into, materially varied, authorised or proposed entry
into or variation of, or announced its intention to enter into or materially
vary the terms of, or made any offer (which remains open for acceptance) to
enter into or vary to a material extent the terms of any contract, service
agreement, commitment or arrangement with any director or senior executive of
any member of the Wider Target Group, otherwise than in the ordinary course of
business in each case to an extent which is material in the context of the
Wider Target Group taken as a whole;
(viii) establish any share option scheme, incentive scheme or other
benefit in respect of the Wider Target Group;
(ix) purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities or reduced
or made any other change to any part of its share capital (except, in each
case, where relevant, as between Instem and wholly-owned subsidiaries of
Instem or between the wholly-owned subsidiaries of Instem);
(x) waived, compromised or settled any claim other than in the
ordinary course of business and which is material in the context of the Wider
Target Group as a whole;
(xi) terminated or varied the terms of any agreement or arrangement
between any member of the Wider Target Group and any other person in a manner
which would or might have a material adverse effect on the financial position
of the Wider Target Group taken as a whole;
(xii) save as required in connection with the Acquisition, made any
material alteration to its memorandum, articles of association or other
incorporation documents or any material alteration to the memorandum, articles
of association or other incorporation documents of any other member of the
Wider Target Group which is material in the context of the Scheme or the
Acquisition;
(xiii) establish any pension scheme(s) in respect of the Wider Target
Group;
(xiv) been unable, or admitted in writing that it is unable, to pay its
debts or commenced negotiations with one or more of its creditors with a view
to rescheduling or restructuring any of its indebtedness, or having stopped or
suspended (or threatened to stop or suspend) payment of its debts generally or
ceased or threatened to cease carrying on all or a substantial part of its
business which is material in the context of the Wider Target Group taken as a
whole;
(xv) (other than in respect of a member of the Wider Target Group
which is dormant and was solvent at the relevant time) taken or proposed any
steps, corporate action or had any legal proceedings instituted or threatened
against it in relation to the suspension of payments, a moratorium of any
indebtedness, its winding-up (voluntary or otherwise), dissolution,
reorganisation or for the appointment of a receiver, administrator, manager,
administrative receiver, trustee or similar officer of all or any material
part of its assets or revenues or any analogous or equivalent steps or
proceedings in any jurisdiction or appointed any analogous person in any
jurisdiction or had any such person appointed;
(xvi) (except for transactions between Instem and its wholly-owned
subsidiaries or between the wholly-owned subsidiaries) made, authorised,
proposed or announced an intention to propose any change in its loan capital;
(xvii) entered into, implemented or authorised the entry into, any joint
venture, asset or profit-sharing arrangement, partnership or merger of
business or corporate entities, which in any such case is material in the
context of the Wider Target Group as a whole or in the context of the
Acquisition; or
(xviii) otherwise than in the ordinary course of business, entered into any
agreement, arrangement, commitment or contract or passed any resolution or
made any offer (which remains open for acceptance) with respect to or
announced an intention to, or to propose to, effect any of the transactions,
matters or events referred to in this Condition 3(g) and which is material in
the context of the Wider Target Group taken as a whole;
No adverse change, litigation, regulatory enquiry or similar
(h) except as Disclosed, since 31 December 2022 there having
been:
(i) no adverse change and no circumstance having arisen which
would reasonably be expected to result in any adverse change in, the business,
value, assets, liabilities, shareholders' equity, financial or trading
position or profits, operational performance or prospects of any member of the
Wider Target Group which is material in the context of the Wider Target Group
taken as a whole or in the context of the Acquisition;
(ii) no litigation, arbitration proceedings, prosecution or other
legal proceedings to which any member of the Wider Target Group is or may
become a party (whether as a claimant, defendant or otherwise) having been
threatened, announced, implemented or instituted by or against or remaining
outstanding against or in respect of, any member of the Wider Target Group, in
each case which would reasonably be expected to have a material adverse effect
on the Wider Target Group taken as a whole or in the context of the
Acquisition;
(iii) no enquiry, review or investigation by, or complaint or
reference to, any Third Party against or in respect of any member of the Wider
Target Group (or any person in respect of which any such member has or may
have responsibility or liability) having been threatened, announced,
implemented or instituted or remaining outstanding by, against or in respect
of any member of the Wider Target Group, in each case, which would reasonably
be expected to have a material adverse effect on the Wider Target Group taken
as a whole or in the context of the Acquisition;
(iv) no contingent or other liability having arisen or become
apparent to Bidco or increased other than in the ordinary course of business
which is reasonably likely to affect adversely the business, assets, financial
or trading position, profits or operational performance of any member of the
Wider Target Group to an extent which is material in the context of the Wider
Target Group taken as a whole or in the context of the Acquisition;
(v) no steps having been taken and no omissions having been made
which are likely to result in the withdrawal, cancellation, termination or
modification of any licence held by any member of the Wider Target Group which
is necessary for the proper carrying on of its business and the withdrawal,
cancellation, termination or modification of which would reasonably be
expected to have a material adverse effect on the Wider Target Group taken as
a whole or in the context of the Acquisition; and
(vi) no member of the Wider Target Group having conducted its
business in material breach of any applicable laws and regulations which in
any case is material in the context of the Wider Target Group taken as a
whole;
No discovery of certain matters regarding information and liabilities,
corruption, intellectual property and environmental liabilities
(i) except as Disclosed, Bidco not
having discovered that:
(i) any financial, business or other information concerning the
Wider Target Group announced publicly and delivered by or on behalf of Instem
through a RIS prior to the date of this Announcement is misleading, contains a
material misrepresentation of any fact, or omits to state a fact necessary to
make that information not misleading, in any such case which is material in
the context of the Wider Target Group taken as a whole or in the context of
the Acquisition;
(ii) any member of the Wider Target Group or any partnership,
company or other entity in which any member of the Wider Target Group has a
significant economic interest and which is not a subsidiary undertaking of
Instem, otherwise than in the ordinary course of business, is subject to any
liability, contingent or otherwise, and which is material in the context of
the Wider Target Group taken as a whole or in the context of the Acquisition;
(iii) any past or present member, director, officer or employee of
the Wider Target Group, or any other person for whom any such person may be
liable or responsible, has not complied with the OECD Convention on Combating
Bribery of Foreign Public Officials in International Business Transactions and
any laws implementing the same, the UK Bribery Act 2010 and/or the US Foreign
Corrupt Practices Act of 1977;
(iv) any member of the Wider Target Group is ineligible to be
awarded any contract or business under section 23 of the Public Contracts
Regulations 2006 or section 26 of the Utilities Contracts Regulations 2006
(each as amended);
(v) any director, officer or employee of the Wider Target Group,
or any other person for whom any such person may be liable or responsible, has
engaged in any business with or made any investment in, or made any payments
to: (A) any government, entity or individual with which US or EU persons are
prohibited from engaging in activities or doing business by US or EU laws or
regulations, including the economic sanctions administered by the United
States Office of Foreign Assets Control or HM Treasury & Customs, or (B)
any government, entity or individual targeted by any of the economic sanctions
of the United Nations or the European Union or any of their respective member
states;
(vi) any asset of any member of the Wider Target Group constitutes
criminal property as defined by section 340(3) of the Proceeds of Crime Act
2002 (but disregarding paragraph (b) of that definition);
(vii) no circumstance having arisen or event having occurred in
relation to any intellectual property owned, used or licensed by the Wider
Target Group or to any third parties, including: (A) any member of the Wider
Target Group losing its title to any intellectual property or any intellectual
property owned by the Wider Target Group being revoked, cancelled or declared
invalid, (B) any agreement regarding the use of any intellectual property
licensed to or by any member of the Wider Target Group being terminated or
varied, or (C) any claim being filed suggesting that any member of the Wider
Target Group infringed the intellectual property rights of a third party or
any member of the Wider Target Group being found to have infringed the
intellectual property rights of a third party, in each case which is material
in the context of the Wider Target Group taken as a whole or in the context of
the Acquisition; or
(viii) in relation to any release, emission, accumulation, discharge,
disposal or other similar circumstance which has impaired or is likely to
impair the environment (including property) or harmed or is likely to harm the
health of humans, animals or other living organisms or eco-systems, any past
or present member of the Wider Target Group, in a manner or to an extent which
is material in the context of the Wider Target Group, (i) has committed any
violation of any applicable laws, statutes, regulations, Authorisations,
notices or other requirements of any Third Party giving rise to a material
liability; and/or (ii) has incurred any material liability (whether actual or
contingent) to any Third Party; and/or (iii) is likely to incur any material
liability (whether actual or contingent), or is required, to make good,
remediate, repair, re-instate or clean up the environment (including any
property) in each case of (i), (ii) or (iii) which such liability or
requirement would be material to the Wider Target Group taken as a whole.
Part B: Waiver and invocation of the Conditions
1. Subject to the requirements of the Takeover Panel, Bidco
reserves the right in its sole discretion to waive all or any of the
Conditions set out in Part A of this Appendix I except Conditions 2(a)(i),
2(b)(i), 2(c)(i) and 2(d) which cannot be waived. The deadlines in any of
Conditions 1, 2(a)(ii), 2(b)(ii) and 2(c)(ii) may be extended to such later
date as may be agreed in writing by Bidco and Instem (with the consent of the
Takeover Panel and/or approval of the Court, if such consent and/or approval
is required). If any of the Conditions set out at 1, 2(a)(ii), 2(b)(ii) and
2(c)(ii) is not satisfied by the deadline specified in the relevant Condition,
Bidco shall make an announcement by 8.00 a.m. on the Business Day following
such deadline confirming whether it has invoked the relevant Condition, waived
the relevant deadline or agreed with Instem to extend the relevant deadline.
2. Subject to paragraph 3(g) of Appendix 7 to the Code, Bidco
shall be under no obligation to waive (if capable of waiver), to determine to
be or remain satisfied or treat as fulfilled any of Conditions 3(a) to 3(i) of
Part A of this Appendix I by a date earlier than the Long Stop Date,
notwithstanding that the other Conditions may at such earlier date have been
waived or fulfilled and that there are, at such earlier date, no circumstances
indicating that any Condition may not be capable of fulfilment.
3. Subject to paragraph 4 below, under Rule 13.5(a) of the
Code, Bidco may only invoke a Condition so as to cause the Acquisition not to
proceed, to lapse or to be withdrawn with the consent of the Takeover Panel.
The Takeover Panel will normally only give its consent if the circumstances
which give rise to the right to invoke the Condition are of material
significance to Bidco in the context of the Acquisition. This will be judged
by reference to the facts of each case at the time that the relevant
circumstances arise.
4. Conditions 1 and 2 of Part A of this Appendix I (and any
Takeover Offer acceptance condition adopted on the basis specified in Part C
of this Appendix I) will not be subject to Rule 13.5(a) of the Code.
5. Any Condition that is subject to Rule 13.5(a) of the Code
may be waived by Bidco.
6. The Scheme will not become effective unless the Conditions
have been fulfilled or (to the extent capable of waiver) waived or, where
appropriate, have been determined by Bidco to be or remain satisfied by no
later than the Long Stop Date.
7. If the Takeover Panel requires Bidco to make an offer or
offers for any Instem Shares under the provisions of Rule 9 of the Code, Bidco
may make such alterations to the Conditions as are necessary to comply with
the provisions of that Rule.
8. Each of the Conditions shall be regarded as a separate
Condition and shall not be limited by reference to any other Condition.
Part C: Implementation by way of a Takeover Offer
Bidco reserves the right to elect (with the consent of the Takeover Panel) to
implement the Acquisition by making, directly or indirectly through a
subsidiary or nominee of Bidco, a Takeover Offer as an alternative to the
Scheme. In such event, the Takeover Offer will be implemented on the same
terms or, unless Bidco otherwise determines and subject to the consent of the
Takeover Panel, on such other terms being no less favourable, subject to
appropriate amendments, as far as applicable, as those which would apply to
the Scheme. The acceptance condition would be set at 90 per cent. of the
shares to which such Takeover Offer relates (or such lesser percentage, being
more than 50 per cent., as Bidco may decide with the consent of the Takeover
Panel). Further, if sufficient acceptances to the Takeover Offer are received
and/or sufficient Instem Shares are otherwise acquired, it is the intention of
Bidco to apply the provisions of the Companies Act to compulsorily acquire any
outstanding Instem Shares to which such Takeover Offer relates.
Part D: Certain further terms of the Acquisition
1. Bidco reserves the right to implement the Acquisition
through any other entity owned and/or controlled by ARCHIMED from time to
time.
2. The Instem Shares shall be acquired by Bidco with full
title guarantee, fully paid and free from all liens, equitable interests,
charges, encumbrances, rights of pre-emption and any other third party rights
and interests whatsoever and together with all rights existing at the date of
this Announcement or thereafter attaching thereto, including (without
limitation) the right to receive and retain, in full, all dividends and other
distributions (if any) declared, made or paid or any other return of capital
(whether by way of reduction of share capital or share premium account or
otherwise) made on or after the Effective Date in respect of the Instem
Shares.
3. If, on or after the date of this Announcement and prior to
or on the Effective Date, any dividend, distribution or other return of value
is declared, paid or made or becomes payable by Instem and with a record date
on or prior to the Effective Date, Bidco reserves the right (without prejudice
to any right of Bidco, with the consent of the Takeover Panel, to invoke
Condition 3(g)(ii) of Part A of this Appendix I) to reduce the consideration
payable under the Acquisition to reflect the aggregate amount of such
dividend, distribution or other return of value or excess. If and to the
extent that any such dividend, distribution or other return of value is paid
or made on or prior to the Effective Date and Bidco exercises its rights under
this paragraph to reduce the consideration payable under the Acquisition, any
reference in this Announcement to the consideration payable under the terms of
the Acquisition shall be deemed to be a reference to the consideration as so
reduced. Any exercise by Bidco of its rights referred to in this paragraph 3
shall be the subject of an announcement and, for the avoidance of doubt, shall
not be regarded as constituting any revision or variation of the Acquisition.
4. The availability of the Acquisition to persons not resident
in the United Kingdom may be affected by the laws of relevant jurisdictions.
Therefore any persons who are subject to the laws of any jurisdiction other
than the United Kingdom and any Instem Shareholders who are not resident in
the United Kingdom will need to inform themselves about and observe any
applicable requirements.
5. Unless otherwise determined by Bidco or required by the
Code and permitted by applicable law and regulations, the Acquisition is not
being, and will not be, made, directly or indirectly, in, into or by the use
of the mails of, or by any other means or instrumentality (including, but not
limited to, facsimile, email 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 will not be capable of acceptance by any such use, means, instrumentality
or facility or from within any Restricted Jurisdiction.
6. The Acquisition will be subject, amongst other things, to
the Conditions and certain further terms which are set out in this Appendix I
and those terms which will be set out in the Scheme Document and such further
terms as may be required to comply with the AIM Rules and the provisions of
the Code.
7. This Announcement and any rights or liabilities arising
hereunder, the Acquisition, the Scheme and the Forms of Proxy will be governed
by English law and will be subject to the jurisdiction of the English courts.
The Acquisition shall be subject to the applicable requirements of the Code,
the Takeover Panel, the London Stock Exchange and the FCA.
APPENDIX II
SOURCES OF INFORMATION AND BASES OF CALCULATION
In this Announcement, unless otherwise stated or the context otherwise
requires, the following sources and bases have been used:
(a) The value attributed to the fully diluted share capital of
Instem of £203 million is based on a value of 833 pence per Instem Share and:
(i) 22,899,433 Instem Shares in issue on 29 August 2023 (being
the last Business Day prior to the date of this Announcement); and
(ii) 1,481,686 Instem Shares which as at 29 August 2023 may be
issued on or after the date of this Announcement on the exercise of options or
vesting of awards under the Instem Share Plans (including up to 505,837
options capable of exercise pursuant to options and awards expected to be
granted shortly following this Announcement).
(b) The enterprise value of £198 million is calculated by
reference to the fully diluted equity minus pro forma net cash of £4.8
million as at 31 December 2022, with pro forma net cash comprising the below
from the audited consolidated balance of Instem as of that date and Instem
public filings:
(i) cash and cash equivalents of £14.0 million;
(ii) current financial liabilities of £5.8 million;
(iii) current lease liabilities of £0.8 million;
(iv) pension obligations of £2.0 million;
(v) provision for liabilities and charges of £45,000; and
(vi) non-current lease liabilities of £0.5 million.
(c) The implied enterprise value multiple of approximately 18.3
times, is based on Instem's EBITDA for the 12 months to 31 December 2022 of
£10.9 million.
(d) Financial information relating to Instem has been extracted
from the audited consolidated financial statements of Instem for the financial
year ended 31 December 2022.
(e) Unless otherwise stated, all prices for Instem Shares are
the Closing Price for the relevant date.
(f) The Closing Prices of Instem Shares are taken from the Daily
Official List.
(g) The three month and six-month Volume Weighted Average Price
are derived from Bloomberg data and have been rounded to the nearest one
penny.
(h) Certain figures included in this Announcement have been
subject to rounding adjustments.
APPENDIX III
DETAILS OF IRREVOCABLE UNDERTAKINGS
Bidco has received irrevocable undertakings to vote or procure votes in favour
of the Scheme at the Court Meeting and the Resolution to be proposed at the
General Meeting (or, subject to the terms of the Co-operation Agreement and
with the consent of the Takeover Panel, if Bidco exercises its right to
implement the Acquisition by way of a Takeover Offer, to accept such offer) in
respect of a total of 2,107,579 Instem Shares (representing, in aggregate,
approximately 9.20 per cent. of Instem Shares in issue on 29 August 2023
(being the last Business Day prior to this Announcement)), comprised as
follows:
Instem Directors' (and certain related family trusts' and connected persons)
irrevocable undertakings
Name Number of Instem Shares Per cent. of Instem Shares
in issue
Phil Reason 770,714 3.37%
DG 2008 Discretionary Settlement Trust (of which David Gare and Norma Gare are 538,427 2.35%
Trustees)
Nigel Goldsmith 10,000 0.04%
Deborah Walker 394,219 1.72%
Michael Gare 394,219 1.72%
Total 2,107,579 9.20%
The irrevocable undertakings given by the Instem Directors as set out above
will apply to any Instem Shares acquired as a result of any awards or options
exercised pursuant to the Instem Share Plans.
The irrevocable undertakings from the Instem Directors will only cease to be
binding if:
(a) Bidco announces, with the consent of the Panel and before
the Scheme Document or Offer Document (as applicable) is published, that it
does not intend to proceed with the Acquisition and no new, revised or
replacement scheme or takeover offer to implement the Acquisition is announced
in accordance with Rule 2.7 of the Code within 10 Business Days of such
announcement;
(b) the Scheme or Takeover Offer (as applicable) lapses or is
withdrawn in accordance with its terms and no new, revised or replacement
scheme or takeover offer to implement the Acquisition has been announced in
accordance with Rule 2.7 of the Code within 10 Business Days of such lapse or
withdrawal; or
(c) any competing offer for the issued and to be issued share
capital of Instem is made which becomes or is declared unconditional (if
implemented by way of a Takeover Offer) or otherwise becomes effective (if
implemented by way of a scheme of arrangement).
APPENDIX IV
Definitions
In this Announcement, the following words and expressions have the following
meanings, unless the context requires otherwise:
Acquisition the recommended offer to be made by Bidco to acquire the entire issued and to
be issued share capital of Instem to be effected by means of the Scheme (or,
if Bidco so elects and subject to the Takeover Panel's consent, a Takeover
Offer) on the terms and subject to the conditions set out in the Scheme
Document;
Acquisition Price 833 pence per Scheme Share;
AIM AIM, a market operated by the London Stock Exchange;
AIM Rules the rules of AIM as set out in the "AIM Rules for Companies" issued by the
London Stock Exchange from time to time relating to AIM traded securities and
the operation of AIM;
Announcement this announcement of the Acquisition made in accordance with Rule 2.7 of the
Code;
ARCHIMED ARCHIMED SAS, a simplified joint stock company incorporated and registered in
France and entered in the Lyon trade and companies register under number 795
309 525 and whose registered office is located at Silex, 9 rue des
Cuirassiers, 69003 Lyon, France;
Authorisations authorisations, orders, recognitions, grants, consents, clearances,
confirmations, certificates, licences, permissions, determinations, exemptions
or approvals;
Bidco Ichor Management Limited, a company incorporated in England and Wales with
company number 15079249;
Business Day a day, other than a Saturday, Sunday, public holiday or bank holiday, on which
banks are generally open for normal business in the City of London;
Clean Team Agreement means the clean team agreement between Bidco and Instem dated 24 August 2023;
Closing Price the closing middle market quotation for a Instem Share as derived from the
Daily Official List on that day;
Code the City Code on Takeovers and Mergers;
Companies Act the UK Companies Act 2006, as amended;
Conditions the conditions to the implementation of the Scheme and the Acquisition, which
are set out in Appendix I to this Announcement and to be set out in the Scheme
Document;
Confidentiality Agreement the confidentiality agreement entered into by ARCHIMED and Instem on 7 June
2023;
Co-operation Agreement the co-operation agreement entered into by Bidco and Instem on or around the
date of this Announcement;
Court the High Court of Justice, Chancery Division (Companies Court) in England and
Wales;
Court Meeting the meeting (or any adjournment, postponement or reconvention thereof) of the
Scheme Shareholders (or the relevant class or classes thereof) to be convened
by order of the Court pursuant to section 896 of the Companies Act to consider
and, if thought fit, approve the Scheme (with or without modification);
Court Order the order of the Court sanctioning the Scheme;
CREST the relevant system (as defined in the Regulations) in respect of which
Euroclear UK & International Limited is the Operator (as defined in the
Regulations);
Daily Official List the Daily Official List of the London Stock Exchange;
Dealing Disclosure has the same meaning as in Rule 8 of the Code;
Disclosed (i) matters fairly disclosed in the information made available to Bidco (or
Bidco's advisers) in the data room established by Instem for the purposes of
the Acquisition; (ii) information fairly disclosed in writing by or on behalf
of Instem to Bidco prior to the date of this Announcement in relation to the
Acquisition; (iii) information included in the annual report and accounts of
the Instem Group for the financial year ended 31 December 2022; (iv)
information included in the annual report and accounts of the Instem Group for
the financial year ended 31 December 2021; (v) information disclosed in a
public announcement to a RIS made by Instem prior to the date of this
Announcement; or (vi) disclosed in this Announcement;
Disclosure Table the disclosure table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk (http://www.thetakeoverpanel.org.uk) ;
Effective in the context of the Acquisition: (a) if the Acquisition is implemented by
way of a Scheme, the Scheme having become effective in accordance with its
terms, upon the delivery of the Court Order to the Registrar of Companies; or
(b) if the Acquisition is implemented by way of a Takeover Offer, the Takeover
Offer having been declared or become unconditional in all respects in
accordance with the requirements of the Code;
Effective Date the date upon which: (a) the Scheme becomes Effective; or (b) if Bidco elects
and the Takeover Panel consents to implement the Acquisition by way of a
Takeover Offer, the Takeover Offer becomes Effective;
Excluded Shares (a) any Instem Shares legally or beneficially held by Bidco or any member of
the Wider Bidco Group; or (b) any Treasury Shares;
FCA the UK Financial Conduct Authority or its successor from time to time, acting
in its capacity as the competent authority for the purposes of Part VI of
FSMA;
Forms of Proxy the forms of proxy for use at the Court Meeting and the General Meeting
respectively, which will accompany the Scheme Document;
FSMA the Financial Services and Markets Act 2000, as amended from time to time;
General Meeting the general meeting (or any adjournment, postponement or reconvention thereof)
of Instem Shareholders to be convened in connection with the Scheme;
Governmental Entity any supranational, national, state, municipal, local or foreign government,
any instrumentality, subdivision, court, arbitrator or arbitrator panel,
regulatory or administrative agency or commission, or other authority thereof,
or any regulatory or quasi-regulatory organisation or private body exercising
any regulatory, taxing, importing or other governmental or quasi-governmental
authority;
Instem Instem plc, a company incorporated in England and Wales with company number
07148099;
Instem Board the board of directors of Instem from time to time;
Instem Directors the directors of Instem from time to time;
Instem Group Instem and its subsidiaries and subsidiary undertakings;
Instem Share Plans the Instem plc Long Term Incentive Plan and the Instem plc 2018 Long Term
Incentive Plan;
Instem Shareholders the holders of Instem Shares;
Instem Shares ordinary shares of £0.10 each in the capital of Instem and each a "Instem
Share";
ISIN International Securities Identification Number;
London Stock Exchange London Stock Exchange Plc, a company incorporated in England and Wales with
company number 02075721;
Long Stop Date 29 February 2024 or such later date (if any) as Bidco and Instem may, with the
consent of the Takeover Panel, agree and (if required) the Court may allow;
Moelis Moelis & Company UK LLP, a limited liability partnership registered in
England and Wales with registration number OC340005;
NSIA Condition the Condition set out at paragraph 3(a) of Part A of Appendix I;
Offer Document should the Acquisition be implemented by way of a Takeover Offer, the document
which would be sent to Instem Shareholders containing, amongst other things,
the terms and conditions of the Takeover Offer;
Offer Period the period which commenced on the date of this Announcement and ending on the
date on which the Acquisition becomes Effective, lapses or is withdrawn (or
such other date as the Takeover Panel may decide);
Opening Position Disclosure has the same meaning as in Rule 8 of the Code;
Registrar of Companies Registrar of Companies of England and Wales;
Regulations the Uncertificated Securities Regulations 2001 (SI 2001/3755);
Resolution the resolution to be proposed by Instem at the General Meeting in connection
with the Acquisition;
Restricted Jurisdiction any jurisdiction where local laws or regulations may result in a significant
risk of civil, regulatory or criminal exposure if information concerning the
Acquisition is sent or made available in that jurisdiction;
RIS a service approved by the London Stock Exchange for the distribution to the
public of announcements and included within the list maintained on the London
Stock Exchange's website;
Rothschild & Co N. M. Rothschild & Sons Limited, a company incorporated in England and
Wales with company number 00925279;
Sanction Hearing the hearing by the Court to sanction the Scheme and, if such hearing is
adjourned, references to the commencement of any such hearing shall mean the
commencement of the final adjournment thereof;
Scheme the proposed scheme of arrangement under Part 26 of the Companies Act to
effect the Acquisition between Instem and the Scheme Shareholders (the full
terms of which will be set out in the Scheme Document), with or subject to any
modification, addition or condition which Bidco and Instem may agree, and, if
required, the Court may approve or impose;
Scheme Document the document to be despatched to (amongst others) Instem Shareholders
containing, amongst other things, the terms and conditions of the Scheme, the
notices convening the Court Meeting and the General Meeting;
Scheme Record Time the time and date to be specified in the Scheme Document, expected to be 6:00
p.m. on the Business Day immediately prior to the Effective Date;
Scheme Shareholders holders of Scheme Shares;
Scheme Shares the Instem Shares:
(i) in issue at the date of the Scheme Document;
(ii) (if any) issued after the date of the Scheme Document and
prior to the Voting Record Time; and
(iii) (if any) issued at or after the Voting Record Time but at or
before the Scheme Record Time in respect of which the original or any
subsequent holder thereof is bound by the Scheme or shall by such time have
agreed in writing to be bound by the Scheme;
in each case other than any Excluded Shares;
Singer Capital Markets Singer Capital Markets Advisory LLP, a limited liability partnership
incorporated in England and Wales with registered number OC364131;
Substantial Interest in relation to an undertaking, a direct or indirect interest of 20 per cent.
or more of the total voting rights conferred by the equity share capital (as
defined in section 548 of the Companies Act) of such undertaking;
Takeover Offer should the Acquisition be implemented by way of a takeover offer as defined in
section 974 of the Companies Act 2006, the offer to be made by or on behalf of
Bidco to acquire the entire issued and to be issued ordinary share capital of
Instem and, where the context requires, any subsequent revision, variation,
extension or renewal of such offer;
Takeover Panel the UK Panel on Takeovers and Mergers;
Third Party each of a central bank, government or governmental, quasi-governmental,
supranational, statutory, regulatory, professional or investigative body or
authority (including any antitrust or merger control authority), court, trade
agency, professional association, institution, works council, employee
representative body or any other similar body or person whatsoever in any
jurisdiction;
Treasury Shares any Instem Shares which are held by Instem as treasury shares (within the
meaning of the Companies Act);
United Kingdom or UK the United Kingdom of Great Britain and Northern Ireland;
United States or US the United States of America, its territories and possessions, all areas
subject to its jurisdiction or any subdivision thereof, any state of the
United States of America and the District of Columbia;
US Exchange Act the United States Securities Exchange Act of 1934 and the rules and
regulations promulgated thereunder;
Volume Weighted Average Price the volume weighted average of the per share trading prices of Instem Shares
on the London Stock Exchange as reported through Bloomberg;
Voting Record Time the date and time specified in the Scheme Document by reference to which
entitlements to vote on the Scheme will be determined, expected to be 6.00
p.m. on the day which is two days before the date of the Court Meeting or, if
the Court Meeting is adjourned, 6.00 p.m. on the second day before the date of
such adjourned meeting;
Wider Bidco Group Bidco, funds managed by ARCHIMED and its affiliates and including any funds
managed by affiliates of ARCHIMED or such funds, and their respective
subsidiary undertakings, associated undertakings and any other body corporate
partnership, joint venture or person in which Bidco and/or such undertakings
(aggregating their interests) have a direct or indirect Substantial Interest
or the equivalent (excluding, for the avoidance of doubt, any member of the
Wider Target Group);
Wider Target Group Instem, its subsidiary undertakings, associated undertakings and any other
undertaking, body corporate, partnership, joint venture or person in which
Instem and/or such undertakings (aggregating their interests) have a direct or
indirect Substantial Interest or the equivalent;
£ or pence pounds sterling or pence, the lawful currency of the UK; and
$ or USD or dollars dollars, the lawful currency of the United States of America.
In this Announcement:
(a) all times referred to are to London time unless otherwise
stated;
(b) references to the singular include the plural and vice versa,
unless the context otherwise requires;
(c) "subsidiary", "subsidiary undertaking" and "undertaking"
have the meanings given by the Companies Act and "associated undertaking" has
the meaning given to it by paragraph 19 of Schedule 6 of the Large and
Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008,
other than paragraph 1(b) thereof which shall be excluded for this purpose;
and
(d) all references to statutory provision or law or to any order
or regulation shall be construed as a reference to that provision, law, order
or regulation as extended, modified, replaced or re-enacted from time to time
and all statutory instruments, regulations and orders from time to time made
thereunder or deriving validity therefrom.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END OUPNKCBPBBKBAFB