REG - Malin Corp PLC - Proposed Tender Offer

MalinAnnouncement

16/02/2023 07:00

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RNS Number : 0733Q  Malin Corporation PLC  16 February 2023

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16 February 2023

 

Malin Corporation plc

("Malin" or the "Company")

 

 

Proposed Return of Capital up to €140 million by way of Tender Offer at €9.30 per Ordinary Share
 
and
 

Proposed Renominalisation of Ordinary Shares and related amendments to Malin's
Constitution

 

and

 

Notice of Extraordinary General Meeting

 

·      €140 million capital return by way of a tender offer to
complete in March 2023

·      Tender price is set at €9.30 per Ordinary Share

·      Tender Price represents a premium of 24.7% to Malin's share price
and a discount of 7.6% to Malin's Estimated Intrinsic Equity Value per
Ordinary Share

·      EGM to vote on resolutions required to effect Tender Offer set
for 10 March 2023

 

Commenting on the announcement, Liam Daniel, Chairman of Malin, said: "We are
delighted to continue to deliver on our long-standing commitment to return the
excess capital of the business to our shareholders with this proposed return
of up to €140 million by way of a tender offer. This return of capital
follows the divestment of our entire stake in Immunocore which generated cash
proceeds of approximately €145 million and other inflows from our investee
companies of approximately €21 million during 2022. Our cash balance of
approximately €33 million following the completion of the tender offer will
be used to fund the Company's operations, including possible investments into
Malin's existing assets if strategically or financially attractive investment
opportunities arise."

 
Introduction

 

On 7 December 2022, Malin announced its intention to return approximately
€140 million to Shareholders by way of a tender offer to be launched by the
end of February 2023. The Company is today pleased to announce the launch of
the proposed tender offer and the return of capital up to approximately €140
million to Qualifying Shareholders through the purchase and cancellation of up
to approximately 44.25% of the Issued Share Capital of Malin (the "Tender
Offer") on the terms described further below and in a circular to Shareholders
published by the Company today (the "Circular").

 

Under the Tender Offer, Qualifying Shareholders are invited to tender some or
all of their Ordinary Shares (with an Individual Basic Entitlement to tender
approximately 44.25% of the Ordinary Shares held by them at the Tender Offer
Record Date, rounded down to the nearest whole number) at a price of €9.30
per Ordinary Share (the "Tender Price").

 

Qualifying Shareholders are not required to tender any or all of their
Ordinary Shares if they do not wish to do so.

 

The Tender Price represents a premium of 24.7% to the closing price of €7.46
per Ordinary Share on 14 February 2023 and represents a 7.6% discount to the
Estimated Intrinsic Equity Value per Ordinary Share of €10.07 on 14 February
2023.

 

The Circular, containing the formal terms and conditions of the Tender Offer
and instructions to Qualifying Shareholders on how to tender their Ordinary
Shares should they choose  to do so, has today been posted to Shareholders
and is also available on the Company's website (www.malinplc.com
(http://www.malinplc.com) ).

 

The Tender Offer opens today and will close at 1.00 p.m. on 20 March 2023.

 

In order to implement the Tender Offer, a number of shareholder resolutions
(the "Resolutions"), including to approve the Renominalisation, must be
passed. Pursuant to the Renominalisation, the nominal value of each Ordinary
Share will be increased from €0.001 to €0.01. The Renominalisation is
required in order to ensure that, following completion of the Tender Offer,
the Company continues to comply with certain Irish law capital maintenance
requirements, namely to have issued share capital with a nominal value of at
least €25,000. The Renominalisation will not change Shareholders'
proportionate interest in the Ordinary Shares owned by them. Aside from the
change in nominal value, the rights attaching to Ordinary Shares (including
voting and dividend rights and rights on a return of capital) will remain the
same and the Ordinary Shares will remain listed on Euronext Growth. In
connection with the Renominalisation, certain amendments will be required to
the share capital provisions of the Constitution.

 

The Circular contains a notice of Extraordinary General Meeting ("EGM") to be
held at the Conrad Hotel, Earlsfort Terracе, Dublin 2, D02 V562, Ireland on
10 March 2023 at 10.00 a.m. to consider the Resolutions.

 

An expected timetable of principal events is set out in Appendix I to this
announcement. Capitalised terms used in this announcement, which have not been
defined have the meanings given to them in the Circular, unless the context
provides otherwise.

 

Background to and reasons for the Tender Offer

 

Part of Malin's strategy, which has been outlined in its communications to
investors since the Ordinary Shares were initially admitted to trading in
2015, is to execute returns of capital to Shareholders of the excess capital
of the business following the realisation of value from its investee
companies. Previously, during 2021, Malin returned approximately €95 million
of capital to shareholders, including €80.0 million by way of a tender offer
and €15.1 million through on-market buybacks. The Tender Offer launched by
the Company today further executes on this strategy.

 

On 7 December 2022, Malin announced that it had completed the divestment of
its entire shareholding in its investee company, Immunocore Holdings plc
("Immunocore"), at an average price of approximately US$59 per share,
generating total cash proceeds of approximately €145 million, realising an
approximate 90% gain on its total capital investment in the company.

 

As part of that announcement, Malin also confirmed that in November 2022 it
had received approximately €6 million in connection with the release of its
portion of the escrow payment on the upfront consideration payable to Malin in
connection with the sale of its shareholding in its investee company, Kymab
Group Limited, in 2021; and €13 million as a distribution from Viamet
Phamaceuticals, Inc. ("Viamet") followings its receipt of a milestone payment
from Mycovia Pharmaceuticals, Inc., the successor company to Viamet, in
connection with the approval of its product VIVJOA® (oteseconazole).

 

As a result, as at 7 December 2022, Malin had a cash balance of approximately
€174 million. In line with its stated strategy of returning excess capital,
Malin further announced its intention to complete a capital return to
shareholders of approximately €140 million via a tender offer that would be
launched by the end of February 2023.

 

The Board has concluded that a return of up to €140 million of capital by
way of the Tender Offer is in the best interests of the Company. The Board has
determined that the quantum of the Tender Offer is appropriate and in the best
interests of Company, providing a significant near-term return of excess
capital in the business to Shareholders. Following the return of the proposed
Tender Offer proceeds, the Company estimates that it will have cash of
approximately €33 million, which the Board has determined is sufficient
capital, alongside expected future realisation proceeds, to exploit future
investment opportunities in Malin's existing investee companies if
strategically or financially attractive investment opportunities arise. The
Board remains committed to seeking to maximise value for Shareholders.

 
Benefits of the Tender Offer to Shareholders

 

The benefits of the Tender Offer are that it:

 

·      is available to all Qualifying Shareholders regardless of the
size of their shareholdings (subject to rounding in the case of fractional
entitlements);

 

·      recognises the Estimated Intrinsic Equity Value per Ordinary
Share and the significant discount that the Ordinary Shares trade at compared
to this value;

 

·      means tendering Qualifying Shareholders will receive a premium of
24.7% to the closing price of €7.46 per Ordinary Share on 14 February 2023
(being the Latest Practicable Date);

 

·     represents a discount of 7.6% to the Estimated Intrinsic Equity
Value per Ordinary Share of €10.07 on 14 February 2023;

 

·    provides Qualifying Shareholders who wish to sell Ordinary Shares
the opportunity to do so on an equivalent basis to all Qualifying
Shareholders; and

 

·     enables those Qualifying Shareholders who do not wish to realise
their investment in Ordinary Shares at this time to maintain their current
investment in Malin and increase their relative stake in Malin.

 

How to participate in the Tender Offer

 

Each Qualifying Shareholder is entitled to tender a number of Ordinary Shares
equal to (or less than, if they so choose) their Individual Basic Entitlement.
Qualifying Shareholders will also be entitled to apply to tender Ordinary
Shares in excess of their Individual Basic Entitlement and, to the extent that
other Shareholders do not tender their Individual Basic Entitlement, all such
Ordinary Shares will be scaled back pro rata to the total number of such
Ordinary Shares tendered in excess of the aggregate Individual Basic
Entitlement, such that the total number of Ordinary Shares purchased pursuant
to the Tender Offer does not exceed 15,053,763 and the maximum total cost of
the Ordinary Shares purchased pursuant to the Tender Offer does not exceed
€140 million, in accordance with the terms and conditions of the Tender
Offer set out in the Circular.

 

Pentwater participation in the Tender Offer and EGM voting support

 

Pentwater Capital Management LP and its affiliates ("Pentwater") currently
own, manage or control, in aggregate, 9,603,765 Ordinary Shares, representing
approximately 28.23% of the Issued Ordinary Share Capital of Malin as at the
Latest Practicable Date. Pentwater intends to participate in the Tender Offer,
and has irrevocably undertaken to tender, in aggregate, 4,250,134 Ordinary
Shares (which is equal to its Individual Basic Entitlement) under the Tender
Offer at the Tender Price and to vote in favour of the Resolutions in respect
of its aggregate shareholding. Pentwater is participating in the Tender Offer
in respect of its Individual Basic Entitlement so that an obligation for
Pentwater to make a mandatory offer in cash for the entire issued share
capital of the Company pursuant to Rule 37 of the Irish Takeover Rules is not
triggered as a result of the Tender Offer and in order that the Board can
comply with its obligations under Rule 37 (c) of the Irish Takeover Rules in
connection with the Tender Offer. Further details of this irrevocable
undertaking are set out in the Circular.

 

Full terms and conditions of the Tender Offer

 

The Tender Offer is to be effected by Davy, which is acting as principal and
on the terms and subject to the conditions referred to in the Circular. Davy
and the Company have entered into an Option Agreement pursuant to which Davy
has the right to require the Company to acquire the Ordinary Shares purchased
by it under the Tender Offer at the Tender Price and the Company has the right
to acquire such Ordinary Shares from Davy at the Tender Price. The Ordinary
Shares successfully tendered under the Tender Offer will be subsequently
acquired by Malin from Davy pursuant to the Option Agreement and cancelled.

 

Full details of the Tender Offer, including the terms and conditions on which
it is made, as well as the procedure for tendering and settlement, are
included in the Circular which has today been posted to Shareholders and is
also available on the Company's website (www.malinplc.com
(http://www.malinplc.com/) ).

 

Extraordinary General Meeting

 

Implementation of the Tender Offer requires approval of the Required
Resolutions by Shareholders. The Resolutions will be proposed at an
Extraordinary General Meeting of the Company to be held at the Conrad Dublin
Hotel, Earlsfort Terracе, Dublin 2, D02 V562, Ireland at 10.00 a.m. on 10
March 2023. If the Required Resolutions are not passed by the Shareholders at
the EGM, the Tender Offer will not proceed.

 

Shareholders may listen to the proceedings of the meeting remotely by
teleconference using the dial- in details below:

 

Ireland                                     +353 1 536 9584

United Kingdom (Local)          +44 20 3936 2999

United States (Local)              +1 646 664 1960

All other locations                   +44 20 3936 2999

 

Listen-only Access Code        923533

For further information contact: Malin

 

Gary Curran, Assistant Company Secretary (cosec@malinplc.com
(mailto:cosec@malinplc.com) )

 

Tel: +353 (0)1 901 5700

 

 

Davy (Financial Adviser, Euronext Growth Adviser & Joint Broker)

 

Brian Garrahy / Daragh O'Reilly Tel: +353 (0)1 679 6363

 

Liberum (Joint Broker)

 

Phil Walker / Ben Cryer

 

Tel: +44 (0) 20 3100 2000

 

 

Powerscourt (Media enquiries)

 

Eavan Gannon

 

Tel: +353 83 448 8339

 

malin@powerscourt-group.com (mailto:malin@powerscourt-group.com)

Appendix I

 

Expected Timeline of Principal Events

 

The dates and times set out below are indicative only and are based on the
Company's current expectations and may be subject to change. References to
time in this document are to Dublin, Ireland time unless otherwise stated. If
any of the above times and/or dates change, the revised time(s) and/or date(s)
will be notified to Shareholders by announcement through a Regulatory
Information Service.

 

 Event                                                                         Time/Date
 Launch of Tender Offer / Tender Offer opens for acceptance                    16 February 2023
 Latest time and date for receipt of Forms of Proxy for EGM                    10.00 a.m. on 8 March 2023
 Time and Date of EGM                                                          10.00 a.m. on 10 March 2023
 Latest time and date for receipt of Electronic Instructions from Qualifying   12.00 p.m. on 20 March 2023
 Euroclear Participants
 Latest time and date for receipt of Electronic Instructions from Qualifying   Please refer to corporate actions bulletin for cut-
 CDI Holders

                                                                               off deadline
 Latest time and date for receipt of Tender Forms (Qualifying Certificated     1.00 p.m. on 20 March 2023
 Shareholders only)
 Closing Date for the Tender Offer                                             1.00 p.m. on 20 March 2023
 Tender Offer Record Date                                                      6.30 p.m. on 20 March 2023
 Announcement of results of the Tender Offer                                   7.00 a.m. on 21 March 2023
 Purchase of Ordinary Shares under the Tender Offer                            21 March 2023
 Cheques dispatched and Euroclear Bank accounts credited in respect of Tender  No later than ten Business Days following the
 Offer proceeds

                                                                               Closing Date

 

Note: Different deadlines and procedures for tenders may apply in certain
cases. This is particularly relevant if you hold your interest in Ordinary
Shares in book-entry form (i.e. via the Euroclear Bank system, or in CDIs via
the CREST system). All such persons who are eligible for and wish to
participate in the Tender Offer and/or who wish to exercise voting rights in
connection with the Resolutions proposed for consideration at the EGM are
recommended to consult with their stockbroker, bank manager, solicitor,
accountant or other independent professional adviser at the earliest
opportunity given the possibility that earlier deadlines for actions than
those set out above will be applied by relevant service providers.

 

Important Notices

 

This announcement contains Inside Information.

 

This announcement does not constitute, or form part of, an offer or any
solicitation of an offer, to purchase or repurchase securities in any
jurisdiction or constitute a recommendation or advice in respect of any
securities or other financial instruments or any other matter. Malin
shareholders are advised to read carefully the Circular. Any response to the
Tender Offer should be made only on the basis of the information in the
Circular.

 

Davy, which is regulated in Ireland by the Central Bank, is acting exclusively
for Malin and no-one else in connection with the matters described in this
announcement. Davy will not regard any other person (whether or not a
recipient of this announcement) as its customer or be responsible to any other
person for providing the protections to customers of Davy nor for providing
advice in relation to the transactions and arrangements described in this
announcement. Davy is not making any representation or warranty, express or
implied, as to the contents of this announcement. Davy has not approved the
contents of, or any part of, this announcement and no liability whatsoever is
accepted by Davy for the accuracy of any information or opinions contained in
this announcement or for the omission of any information from this
announcement.

 

Forward-looking Statements

This announcement contains certain forward-looking statements with respect to
the financial condition, results of operations and business of the Group and
certain plans and objectives of the Board, that are subject to risk factors
associated with, amongst other things, the economic and business circumstances
occurring from time to time in the countries, sectors and business segments in
which the Group operates. These factors include, but are not limited to, those
discussed in Part 4 (Risk Factors Related to the Tender Offer) of the
Circular. 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 of similar meaning. These statements are based
on assumptions and assessments made by the Board in light of its experience
and perception of historical trends, current conditions, expected future
developments and other factors it believes appropriate. By their nature,
forward-looking statements involve risk and uncertainty, and the factors
described in the context of such forward-looking statements in this document
could cause actual results or developments to differ materially from those
expressed in or implied by such forward-looking statements.

 

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 document. Malin assumes no obligation to update
or correct the information contained in this document, whether as a result of
new information, future events or otherwise, except to the extent required by
law or the Euronext Growth Rules.

 

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
publication of this document shall not give rise to any implication that there
has been no change in the facts set out in this document since such date.
Nothing contained in this announcement shall be deemed to be a forecast,
projection or estimate of the future financial performance of Malin except
where expressly stated.

 

Notice for UK Shareholders

This announcement and any other documents or materials relating to the Tender
Offer (including the Circular and the Tender Form) are not being made, and
this announcement or such documents and/or materials relating to the Tender
Offer (including the Circular and the Tender Form) have not been approved, by
an authorised person for the purposes of section 21 of the Financial Services
and Markets Act 2000. Accordingly, this announcement and such other documents
and/or materials relating to the Tender Offer (including the Circular and the
Tender Form) are not being distributed to, and must not be passed on to, the
general public in the United Kingdom. The communication of this announcement,
or such other documents and/or materials relating to the Tender Offer
(including the Circular and the Tender Form) as a financial promotion is only
being made to, and may only be acted upon by, those persons in the United
Kingdom falling within the definition of investment professionals (as defined
in Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005, as amended (the "Financial Promotion Order")) or
persons who are within Article 43(2) of the Financial Promotion Order or any
other persons to whom it may otherwise lawfully be made under the Financial
Promotion Order ("Relevant Persons"). Any person who is not a Relevant Person
should not act on or rely on this announcement or any other documents or
materials relating to the Tender Offer (including the Circular and the Tender
Form). This announcement and the documents and materials relating to the
Tender Offer (including the Circular and the Tender Form) and their contents
should not be distributed, published or reproduced (in whole or in part) or
disclosed by recipients to any other person in the United Kingdom.

 

Notice for US Shareholders

The Tender Offer relates to securities in a non-US company and is subject to
the disclosure requirements, rules and practices applicable to companies
listed on the Euronext Growth market, operated by Euronext Dublin, on which
the Ordinary Shares are listed, which differ from those of the United States
in certain material respects. The Circular has been prepared in accordance
with the Irish law, and US Holders should read the entire Circular, including
Part 6 (Tax Aspects of the Tender Offer), which contains important information
about the Company and the Ordinary Shares.

 

The Tender Offer is not subject to the disclosure and other procedural
requirements of Regulation 14D under the US Exchange Act. The Tender Offer
will be made in the United States in accordance with the requirements of
Regulation 14E under the US Exchange Act to the extent applicable, and
otherwise in compliance with the disclosure and procedural requirements of
Irish law. The Tender Offer is made to the US Holders on the same terms and
conditions as those made to all other Shareholders to whom the Tender Offer is
being made. Any information documents, including the Circular, are being
disseminated to US Holders on a basis comparable to the method pursuant to
which such documents are provided to the other Shareholders.

 

All activities of Davy with respect to the Tender Offer in the United States,
if any, will be conducted by its affiliate, Davy Securities. US Holders should
note that the Ordinary Shares are not listed on a US securities exchange and
the Company is not subject to the periodic reporting requirements of the US
Exchange Act and is not required to, and does not, file any reports with the
US Securities and Exchange Commission thereunder. It may be difficult for US
Shareholders to enforce their rights and any claims arising in connection with
the Tender Offer under US federal or state securities laws since the Company
is located outside the United States and most of its officers and directors
may be residents of countries other than the United States. US Holders may not
be able to sue Malin or its officers or directors in a non-US court for
violations of US securities laws. Further, it may be difficult to compel a
non-US company or its affiliates to subject themselves to the jurisdiction or
judgement of a US court.

 

The receipt of cash pursuant to the Tender Offer by a Shareholder who is a US
person will be a taxable transaction for US federal income tax purposes.
Paragraph 3 of Part 6 (Tax Aspects of the Tender Offer) of the Circular sets
out a guide to certain US tax consequences of the Tender Offer for
Shareholders under current US law. However, each such Shareholder should
consult and seek individual advice from an appropriate professional adviser.

 

To the extent permitted by applicable law and in accordance with normal
practice pursuant to Irish law and the Euronext Growth Rules, the Company,
Davy or any of their respective affiliates, may from time to time and during
the pendency of the Tender Offer, and other than pursuant to the Tender Offer,
make certain purchases of, or arrangements to purchase, Ordinary Shares
outside the United States in reliance on applicable exemptions from the
requirements of Regulation 14E, including sales and purchases of Ordinary
Shares effected by Davy acting as market maker in the Ordinary Shares. These
purchases, or other arrangements, may occur either in the open market at
prevailing prices or in private transactions at negotiated prices and
information about such purchases will be disclosed by means of a press release
or other means reasonably calculated to inform the US Holder of such
information, and if required, via any other means required by the Euronext
Growth Rules or any applicable Irish law.

 

While the Tender Offer is being made available to Shareholders in the United
States, the right to tender Ordinary Shares is not being made available in any
jurisdiction in the United States in which the making of the Tender Offer or
the right to tender such Ordinary Shares would not be in compliance with the
laws of such jurisdiction.

 

Neither the US Securities and Exchange Commission nor any US state securities
commission has approved or disapproved the Tender Offer, passed any comments
upon the merits or fairness of the Tender Offer, passed any comment upon the
adequacy or completeness of the Circular or passed any comment on whether the
content in the Circular is correct or complete. Any representation to the
contrary is a criminal offence in the United States.

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