AOP Health Intnl. Shield Therapeutics - AOP Loan Conversion and Mandatory Cash Offer
04/05/2023 14:40
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RNS Number : 4712Y AOP Health International Management 04 May 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.
4 May 2023
AOP LOAN CONVERSION
MANDATORY CASH OFFER
for
SHIELD THERAPEUTICS PLC
("SHIELD")
by
AOP HEALTH INTERNATIONAL MANAGEMENT AG
("AOP")
Summary and highlights
· The boards of AOP, a company incorporated in Liechtenstein and the
holder of approximately 26.99 per cent. of the issued ordinary shares of
Shield, and Shield announce that AOP has requested, pursuant to a conversion
notice dated 3 May 2023, the conversion of USD 9,542,019 of the convertible
shareholder loan facility between Shield and AOP into 127,366,565 ordinary
shares of 1.5 pence each in Shield (the "Conversion Shares") at a price of
6.01 pence per Shield Share, being a 10 per cent. discount to the average
mid-market closing price of a Shield Share over the 20 Business Days prior to
3 May 2023, being the date of the Conversion request.
· Pursuant to the terms of the Shareholder Loan, Shield is not
required to allot Shield Shares to the extent that, following such allotment,
AOP (together with its concert parties) would control 30 per cent. of the
voting rights. Since the issue of the Conversion Shares would cause AOP and
its concert parties to hold in excess of 30 per cent. of the voting rights of
Shield, the Conversion is subject to the consent of the board of Shield. As
explained below, Shield has provided its consent to the Conversion on 4 May
2023.
· Following the Conversion, AOP and its concert parties will hold
interests in Shield Shares representing approximately 41.9 per cent. of the
voting rights in Shield. Consequently, AOP is required to make a mandatory
cash offer for Shield pursuant to Rule 9 of the City Code on Takeovers and
Mergers.
· Accordingly, the board of AOP hereby announces the terms of a
mandatory cash offer to be made by AOP to acquire the entire issued and to be
issued share capital of Shield not already held by AOP or to be held by AOP
pursuant to the Conversion.
· The directors of Shield (excluding Dr. Christian Schweiger) (the
"Recommending Shield Directors") recognise that conversion of the Shareholder
Loan, and receipt of the Conversion Shares and a resulting increase in AOP's
percentage shareholding in Shield, is AOP's primary goal and that the
Mandatory Offer is a consequence of the Conversion.
· Under the terms of the Mandatory Offer, Shield Shareholders (other
than AOP) will be entitled to receive:
for each Shield Share: 6.20 pence in cash
· The Mandatory Offer Price of 6.20 pence per Shield Share is equal to
the highest price at which AOP or its concert parties have acquired Shield
Shares over the 12 months prior to the date of this Announcement.
· The Mandatory Offer values the entire issued and to be issued share
capital of Shield at approximately GBP 46.1 million on a fully diluted basis,
inclusive of the Conversion Shares and taking into account the exercise of all
outstanding options under the Shield Option Plans and any outstanding warrants
issued by Shield.
· The Mandatory Offer Price of 6.20 pence per Shield Share represents a
discount of approximately:
o 13.3 per cent. to the Closing Price of 7.15 pence per Shield Share on 3
May 2023 (being the last Business Day before the date of this Announcement);
and
o 10.0 per cent. to the volume-weighted average price of 6.89 pence per
Shield Share between 13 December 2022 when Shield announced a debt and equity
financing and 3 May 2023 (being the last Business Day before the date of this
Announcement).
· If, on or after the date of this Announcement and on or prior to the
Unconditional Date, any dividend, distribution or other return of value is
announced, declared, made or paid or becomes payable by Shield, AOP reserves
the right to reduce the Consideration accordingly (save to the extent any such
dividend, distribution or other return of value is or is to be received by or
on behalf of AOP). In such circumstances, Shield Shareholders shall be
entitled to retain any such dividend, distribution or other return of value
declared, made or paid.
· The Recommending Shield Directors are recommending Shield
Shareholders do not accept the Mandatory Offer, but do not view the Mandatory
Offer as being hostile. The Recommending Shield Directors are supportive of
the Conversion and have given their consent to it.
· The AOP Board confirms that the terms of the Mandatory Offer,
including the Mandatory Offer Price, are final and will not be increased,
except that AOP reserves the right to amend the financial terms of the
Mandatory Offer: (i) if there is an announcement on or after the date of this
Announcement of a possible offer or of a firm intention to make an offer by a
third party offeror or potential offeror; (ii) with the agreement or consent
of the Panel; or (iii) in wholly exceptional circumstances as provided for by
Rule 32.2(b)(ii) of the Code.
· Irrevocable undertakings not to accept the Mandatory Offer have
been received from Recommending Shield Directors holding 0.97% per cent. of
the issued share capital of Shield.
· Jupiter Asset Management, the holder of 37,146,992 Shield Shares,
representing 6.3% of the issued share capital of Shield (prior to the
Conversion) have issued a letter noting the Recommending Shield Directors'
recommendation not to accept the Mandatory Offer and stating that they believe
the terms of the Mandatory Offer are not in the best interests of their funds'
investors or Shield.
· A copy of this letter will be made available on AOP's website at
https://www.aop-health.com and on Shield's website at
https://www.shieldtherapeutics.com/investors-and-media/results-reports-and-presentations/
(https://www.shieldtherapeutics.com/investors-and-media/results-reports-and-presentations/)
by no later than 12 noon on the Business Day following this Announcement.
· AOP and Shield have entered into the Relationship Agreement pursuant
to which AOP has agreed amongst other things to permit Shield to continue to
be able to operate independently of AOP following the Conversion and the
Mandatory Offer, for so long as: (i) AOP holds at least 20 per cent. of
Shield's issued share capital (irrespective of where such shares are admitted
to trading); (ii) AOP holds less than 75 per cent. of Shield's issued share
capital (irrespective of where such shares are admitted to trading); (iii) if
Shield's shares become admitted to trading on a securities market other than
AIM (the "Other Securities Market"), the mean average daily trading volume
over a period of 4 months of the securities listed and traded on the Other
Securities Market is less than 1.5x the mean average daily trading volume over
the same period of the securities listed and traded on AIM; (iv) the share
capital of Shield remains admitted to trading on AIM; (v) Shield and AOP have
not agreed to terminate the Relationship Agreement; and (vi) if the share
capital of Shield becomes admitted to trading on a securities market other
than AIM, the existence of the Relationship Agreement is permitted by the
rules applicable to that exchange.
· If the Mandatory Offer does become unconditional, AOP intends for
Shield to operate in materially the same way and to ensure that Shield
continues to achieve its broader strategic goals.
Background to and reasons for the Mandatory Offer
· On 1 August 2022, Shield and AOP entered into a convertible loan
agreement providing for the provision of a USD 10 million convertible loan
facility to Shield. Further, on 13 December 2022, Shield and AOP agreed to
extend the Shareholder Loan. Pursuant to such extension, AOP agreed to provide
Shield with a further USD 10 million convertible loan facility. The
Shareholder Loan permits AOP to convert any outstanding loan balances into
Shield Shares, provided that Shield is not required to allot Shield Shares to
the extent that, following such allotment, AOP (together with its concert
parties) would control 30 per cent. or more of the voting rights.
· As permitted by the Shareholder Loan, AOP has requested a conversion
of a further USD 9,542,019 of the Shareholder Loan into 127,366,565 Shield
Shares.
· Shield has consented to the Conversion for the reasons explained
further below.
· AOP recognises that the Mandatory Offer is at a discount to the
price at which Shield Shares could be sold on the market. On this basis, AOP
acknowledges that the Mandatory Offer may not succeed. AOP notes that the
Recommending Shield Directors are not recommending the Mandatory Offer and
that, as detailed further below, the Recommending Shield Directors have
provided irrevocable undertakings not to accept the Mandatory Offer.
Shield consent to the Conversion
· Under the terms of the Shareholder Loan, Shield's consent to the
Conversion was required, which has been provided. In providing this consent,
the Recommending Shield Directors considered the following:
o the fact that the Conversion indicates a high level of belief from AOP in
the value creation potential of Shield's equity;
o the positive impact of the Conversion on Shield's balance sheet debt,
which will be reduced from circa. USD 15 million to circa. USD 5.5 million
immediately following the Conversion and the consequent positive effect on
Shield's interest burden and capital structure;
o the potential increased financing options available to Shield following
the Conversion, including both debt and equity financing;
o the dilutive impact of the Conversion on Shield's existing shareholders;
and
o the potential effects of AOP's increased shareholding, including in
relation to the Mandatory Offer and the attractiveness of Shield to potential
future investors.
Recommendation
· Following careful consideration, the Recommending Shield
Directors are recommending that Shield Shareholders do not accept the
Mandatory Offer for, among others, the following reasons:
o the fact that the Mandatory Offer is a technical consequence of the
Conversion;
o since 2021 Shield has raised approximately GBP 63 million of financing to
progress its commercialisation strategy in the U.S. and in December 2022 it
also entered into the collaborative sales agreement with Viatris Inc. to
accelerate revenue growth of Accrufer® in the U.S., which is estimated to
have a USD 2 billion oral iron market. In Shield's business update issued on
27 April 2023, Shield reported progress in assembling the combined sales team
in the U.S. and expects to have 98 sales representatives promoting Accrufer®
by the middle of May 2023, which is expected to drive a significant increase
in prescriptions going forwards. Further, Shield is also encouraged by recent
growth in total prescription volumes, new prescription volumes and first time
prescribers as also outlined in the recent business update;
o Shield's unaudited cash balances at 31 March 2023 were GBP 19.2 million
which Shield believes is sufficient to support its planned operations to
cashflow break even, expected in Q4 of 2024;
o the Mandatory Offer Price is a 13.3 per cent. discount to the share price
prior to the issue of this Announcement;
o the Recommending Shield Directors consequently believe Shield has the
potential to drive significant value for all Shield Shareholders in the
future.
· The Recommending Shield Directors, who have been so advised by
Peel Hunt LLP ("Peel Hunt") as to the financial terms of the Mandatory Offer,
do not consider the terms of the Mandatory Offer to be fair and reasonable. In
providing its advice, Peel Hunt has taken into account the commercial
assessments of the Recommending Shield Directors.
· Accordingly, the Recommending Shield Directors confirm that they
intend to recommend unanimously that Shield Shareholders do not accept the
Mandatory Offer, as they have irrevocably undertaken not to do (or procure not
to be done) in respect of their own holdings over which they have control,
being, in aggregate, 5,652,767 Shield Shares representing approximately 0.97%
per cent. of the ordinary share capital of Shield in issue as at 3(rd) May
2023 (being the last Business Day before the date of this Announcement).
Irrevocable Undertakings not to accept the Mandatory Offer
· Shield has received irrevocable undertakings from the
Recommending Shield Directors not to accept the Mandatory Offer.
· On 3(rd) May 2023 (being the last Business Day before the date of
this Announcement) these irrevocable undertakings together represented, in
aggregate, 5,652,767 Shield Shares representing 0.97% per cent. of Shield's
current issued share capital (prior to the Conversion).
· Full details of the irrevocable undertakings, including the terms
under which they cease to be binding, are set out in Appendix 3 to this
Announcement.
AOP intentions regarding the Shield business if the Mandatory Offer becomes
unconditional
· AOP is a long-term shareholder of Shield and is supportive of
Shield's current strategy, its Board and management team.
· AOP and Shield entered into the Relationship Agreement on 4 May
2023 to regulate the relationship between Shield and AOP, as Shield's single
largest shareholder. Pursuant to the Relationship Agreement, AOP has, amongst
other things:
o undertaken that it shall exercise all powers and rights which it has as a
shareholder of Shield to procure that all transactions between Shield and AOP
and their respective associates are at arm's length and on normal commercial
terms and in accordance with the related party rules set out in the AIM Rules;
o agreed not to do anything which, at any time, would (i) result in Shield
not being capable of carrying on its business independently of AOP or (ii)
interfere in the day-to-day management of Shield or (iii) prevent the Shield
Directors from managing Shield independently of AOP; and
o agreed not take any steps which would cause the majority of either the
executive Shield Directors or the non-executive Shield Directors to cease to
be independent of AOP.
· If the Mandatory Offer becomes unconditional, AOP intends to
review Shield's business and operations (the "Review"). AOP notes that the
Mandatory Offer has arisen, in accordance with Rule 9 of the Code, solely as a
technical consequence of the Conversion. AOP has not conducted any due
diligence on Shield for the purposes of making the Mandatory Offer. Therefore,
the purpose of the Review would be to understand the operations of Shield and
the best way of maximising value under AOP ownership.
· If the Mandatory Offer becomes unconditional, AOP intends for
Shield to operate in materially the same way and to ensure that Shield
continues to achieve its broader strategic goals.
Timetable and Condition
· The AOP Board announces that the terms of the Mandatory Offer,
including the Mandatory Offer Price, are final and will not be increased,
except that AOP reserves the right to amend the financial terms of the
Mandatory Offer: (i) if there is an announcement on or after the date of this
Announcement of a possible offer or of a firm intention to make an offer by a
third party offeror or potential offeror; (ii) with the agreement or consent
of the Panel; or (iii) in wholly exceptional circumstances as provided for by
Rule 32.2(b)(ii) of the Code.
· It is intended that the Acquisition will be implemented by way of
the Mandatory Offer. The Mandatory Offer is subject to the Acceptance
Condition and further terms set out in Appendix 1 to this Announcement and to
the full terms and the Acceptance Condition which will be set out in the Offer
Document and Form of Acceptance.
· As required by the Code, the Mandatory Offer is conditional only
upon AOP having received acceptances in respect of Shield Shares which,
together with Shield Shares it already holds, when aggregated with the
Conversion Shares, will result in AOP and its concert parties holding Shield
Shares carrying more than 50 per cent. of the voting rights in Shield.
· It is expected that the Offer Document containing further
information about the Mandatory Offer will be published and sent to Shield
Shareholders as soon as practicable and, in any event, within 28 days of the
date of this Announcement (unless otherwise agreed between AOP and Shield,
with the consent of the Panel).
· The Mandatory Offer will remain open for acceptance until 1.00
p.m. (London time) on the Unconditional Date (unless AOP has set aside the
Acceleration Statement in accordance with the Code).
· By specifying an Unconditional Date which is earlier than Day 60
(as defined in the Code), AOP is treated as having made an acceleration
statement to which Rule 31.5 of the Code applies. In accordance with Rule
31.5(e) of the Code, AOP reserves the right to set this Acceleration Statement
aside: (i) with the agreement or consent of the board of Shield; (ii) if a
third party announces an offer for Shield or there is otherwise an
announcement of a possible offer for Shield by a third party or an
announcement which refers to the existence of a new potential offeror for
Shield (whether the potential offeror is identified or not); (iii) if a third
party announces a firm intention to make an offer for Shield; (iv) in the
event of an increased or improved offer for Shield by AOP being recommended by
the board of Shield; and (v) in wholly exceptional circumstances as provided
for by Rule 31.5(e)(ii) of the Code.
· Subject to the satisfaction of the Acceptance Condition and
certain further terms set out in Appendix 1, the Acquisition would become or
be declared unconditional during the second quarter of 2023.
This summary should be read in conjunction with, and is subject to, the full
text of this Announcement (including the Appendices). The Mandatory Offer will
be subject to the Acceptance Condition and other terms set out in Appendix 1
and to the full terms and the Acceptance Condition to be set out in the Offer
Document. Appendix 2 of this Announcement contains the sources and bases of
certain information contained in this summary and this Announcement. Details
of irrevocable undertakings received by Shield are set out in Appendix 3.
Appendix 4 contains details of the Shield Profit Forecast. Certain terms used
in this summary and this Announcement are defined in Appendix 5.
Enquiries:
AOP
Andreas Steiner (Group CEO) Tel: +423 220 2088
Astrid Magnago (Assistant to Group CEO)
Numis (Financial Adviser to AOP)
Stuart Ord Tel: +44 (0) 20 7260 1000
Freddie Barnfield
Euan Brown
Jack McLaren
Shield
Greg Madison (CEO) Tel: +44 (0) 191 511 8500
Hans-Peter Rudolf (CFO)
Peel Hunt (Nominated Adviser, Financial Adviser and Joint Broker to Shield)
James Steel Tel: +44 (0) 20 7418 8900
Miles Cox
Oliver Duckworth
Edward Beazley
finnCap Ltd (Joint Broker to Shield)
Geoff Nash / Fergus Sullivan/ Alice Lane / Nigel Birks / Harriet Ward Tel: +44 (0) 20 7220 0563
Slaughter and May is acting as legal adviser to AOP in connection with the
Mandatory Offer. Taylor Wessing LLP is acting as legal adviser to Shield in
connection with the Mandatory Offer.
Further information
This Announcement is for information purposes only and is not intended to, and
does not, constitute or form part of an offer, invitation or the solicitation
of an offer to purchase or subscribe, otherwise acquire, subscribe for, sell
or otherwise dispose of any securities, or the solicitation of any vote or
approval in any jurisdiction, pursuant to the Mandatory Offer or otherwise,
nor shall there be any sale, issuance or transfer of securities in Shield in
any jurisdiction in contravention of applicable law. The Mandatory Offer will
be made solely pursuant to the terms of the Offer Document, which will contain
the full terms of the Acquisition, including details of how to vote in respect
of the Acquisition. Any vote or other decision in respect of, or other
response to, the Acquisition, should be made only on the basis of information
contained in the Offer Document. This Announcement does not constitute a
prospectus, prospectus equivalent document or an exempted document.
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, accountant
or from an independent financial adviser duly authorised under the Financial
Services and Markets Act 2000 (as amended).
Disclaimers
Numis Securities Limited ("Numis"), which is authorised and regulated in the
UK by the Financial Conduct Authority, is acting as financial adviser to AOP,
and no one else, in connection with the matters set out in this Announcement,
and will not be responsible to anyone other than the board of AOP for
providing the protections afforded to clients of Numis nor for providing
advice in relation to the contents of this Announcement or any other matter or
arrangement referred to herein. Neither Numis 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 Numis in connection with this Announcement, any
matter, arrangement or statement contained or referred to herein or otherwise.
Peel Hunt, which is authorised and regulated in the UK by the Financial
Conduct Authority, is acting as nominated adviser, financial adviser and joint
broker to Shield, and no one else, in connection with the matters set out in
this Announcement, and will not be responsible to anyone other than the board
of Shield for providing the protections afforded to clients of Peel Hunt nor
for providing advice in relation to the contents of this Announcement or any
other matter or arrangement referred to herein. Neither Peel Hunt 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 Peel Hunt in
connection with this Announcement, any matter, arrangement or statement
contained or referred to herein or otherwise.
finnCap, which is authorised and regulated in the UK by the Financial Conduct
Authority, is acting as joint broker to Shield, and no one else, in connection
with the matters set out in this Announcement, and will not be responsible to
anyone other than the board of Shield for providing the protections afforded
to clients of finnCap or for providing advice in relation to the contents of
this Announcement or any other matter or arrangement referred to herein.
Neither finnCap 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
finnCap in connection with this Announcement, any matter, arrangement or
statement contained or referred to herein or otherwise.
No profit forecasts, estimates or qualified benefit statements
Other than the Shield Profit Forecast, no statement in this Announcement, or
incorporated by reference in this Announcement, is intended as a profit
forecast, profit estimate or quantified benefits statement for any period and
no statement in this Announcement should be interpreted to mean that earnings
or earnings per share for Shield for the current or future financial years
would necessarily match or exceed the historical published earnings or
earnings per share for Shield.
Overseas jurisdictions
The release, publication or distribution of this Announcement in jurisdictions
other than the UK may be restricted by law and therefore any persons who are
subject to the laws of any jurisdiction other than the UK should inform
themselves about, and observe, any applicable requirements. Any failure to
comply with the applicable restrictions may constitute a violation of the
securities laws of any such jurisdiction. To the fullest extent permitted by
law, the companies and persons involved in the Mandatory Offer disclaim any
responsibility or liability for the violation of such restrictions by any
person. This Announcement has been prepared for the purposes of complying with
English law 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 of England.
Copies of this Announcement and any formal documentation relating to the
Mandatory Offer are not being, and must not be, directly or indirectly, mailed
or otherwise forwarded, distributed or sent in or into or from any Restricted
Jurisdiction (or any jurisdiction where to do so would violate the laws of
that jurisdiction) and persons receiving such documents (including custodians,
nominees and trustees) must not mail or otherwise forward, distribute or send
it in or into or from any Restricted Jurisdiction. Doing so may render invalid
any related purported vote in respect of the Mandatory Offer. Unless otherwise
permitted by applicable law and regulation, the Mandatory Offer may not be
made directly or indirectly, in or into, or by the use of mails or any means
or instrumentality (including, but not limited to, facsimile, e-mail or other
electronic transmission, telex or telephone) of interstate or foreign commerce
of, or of any facility of a national, state or other securities exchange of
any Restricted Jurisdiction and the Mandatory Offer may not be capable of
acceptance by any such use, means, instrumentality or facilities.
Further details in relation to overseas shareholders will be included in the
Offer Document.
Additional information for US investors
The receipt of cash pursuant to the Mandatory Offer by a US holder of Shield
Shares as consideration for the transfer of its Shield Shares pursuant to the
Mandatory Offer will likely be a taxable transaction for United States federal
income tax purposes and under applicable United States state and local, as
well as foreign and other, tax laws. Shield Shareholders are urged to consult
with legal, tax and financial advisers in connection with making a decision
regarding the Mandatory Offer.
Financial information included in this Announcement and the Offer Document has
been or will have been prepared in accordance with accounting standards
applicable in the UK that may not be comparable to financial information of US
companies or companies whose financial statements are prepared in accordance
with generally accepted accounting principles in the US.
To the extent permitted by applicable law and in accordance with normal UK
market practice, AOP or its nominees, or its brokers (acting as agents) may
from time to time make certain purchases of, or arrangements to purchase,
Shield Shares outside of the US other than pursuant to the Mandatory Offer,
until the date on which the Mandatory Offer becomes unconditional, lapses or
is otherwise withdrawn. These purchases may occur either in the open market at
prevailing prices or in private transactions at negotiated prices. Any
information about such purchases or arrangements to purchase shall be
disclosed as required in the UK, shall be reported to a Regulatory Information
Service and shall be available on the London Stock Exchange website at
www.londonstockexchange.com.
It may be difficult for US holders of Shield Shares to enforce their rights
and any claim arising out of the US federal laws, since AOP and Shield are
located in a non-US jurisdiction, and some or all of their officers and
directors may be residents of a non-US jurisdiction. US holders of Shield
Shares may not be able to sue a non-US company or its officers or directors in
a non-US court for violations of the US securities laws. Further, it may be
difficult to compel a non-US company and its affiliates to subject themselves
to a US court's judgement.
Forward-Looking Statements
This Announcement contains certain forward-looking statements with respect to
the financial condition, results of operations and business of Shield and
certain plans and objectives of AOP and with respect thereto.
These forward-looking statements can be identified by the fact that they do
not relate only to historical or current facts. These statements are based on
assumptions and assessments made by AOP and Shield in light of their
experience and their perception of historical trends, current conditions,
future developments and other factors they believe appropriate, and therefore
are subject to risks and uncertainties which could cause actual results to
differ materially from those expressed or implied by those forward-looking
statements.
The forward-looking statements contained in this Announcement include
statements relating to the expected effects of the Acquisition on AOP and
Shield, the expected timing and scope of the Acquisition and other statements
other than historical facts. Forward-looking statements often use words such
as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal",
"believe", "hope", "aims", "continue", "will", "may", "should", "would",
"could", or other words of similar meaning. By their nature, forward-looking
statements involve risk and uncertainty, because they relate to events and
depend on circumstances that will occur in the future and the factors
described in the context of such forward-looking statements in this document
could cause actual results and developments to differ materially from those
expressed in or implied by such forward-looking statements. Forward-looking
statements may include statements in relation to the following: (i) future
capital expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy, losses and
future prospects; (ii) business and management strategies and the expansion
and growth of AOP or Shield's operations and potential synergies resulting
from the Acquisition; and (iii) the effects of global economic conditions and
governmental regulation on AOP or Shield's business.
Although it is believed that the expectations reflected in such
forward-looking statements are reasonable, neither AOP nor Shield, nor any of
their representatives, associates or directors, officers or advisers provides
any assurance that such expectations will prove to have been correct and you
are therefore cautioned not to place undue reliance on these forward-looking
statements which speak only as at the date of this document. None of Shield,
AOP assumes any obligation to update or correct the information contained in
this document (whether as a result of new information, future events or
otherwise), except as required by applicable law.
Dealing and Opening Position Disclosure requirements
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 an offeree company or of any
securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the Offer Period and, if later, following the Announcement in
which any securities exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no
later than 3.30 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 tenth 10th Business Day following the Announcement
in which any securities exchange offeror is first identified. Relevant persons
who deal in the relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening Position
Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1
per cent. or more of any class of relevant securities of the offeree company
or of any securities exchange offeror must make a Dealing Disclosure if the
person deals in any relevant securities of the offeree company or of any
securities exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions in, and
rights to subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s), save to the extent that
these details have previously been disclosed under Rule 8. A Dealing
Disclosure by a person to whom Rule 8.3(b) applies must be made by no later
than 3.30 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 an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the Offer Period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.
Electronic communications
Please be aware that addresses, electronic addresses and certain information
provided by Shield Shareholders, persons with information rights and other
relevant persons for the receipt of communications from Shield may be provided
to AOP during the Offer Period as requested under Section 4 of Appendix 4 of
the Code to comply with Rule 2.11(c) of the Code.
Publication on website
A copy of this Announcement will be made available, subject to certain
restrictions relating to persons resident in Restricted Jurisdictions, on
AOP's website at https://www.aop-health.com and on Shield's website at
https://www.shieldtherapeutics.com/investors-and-media/results-reports-and-presentations
(https://www.shieldtherapeutics.com/investors-and-media/results-reports-and-presentations)
by no later than 12 noon on the Business Day following this Announcement. For
the avoidance of doubt, the contents of the websites referred to in this
Announcement are not incorporated into and do not form part of this
Announcement.
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, accountant
or independent financial adviser duly authorised under the Financial Services
and Markets Act 2000 (as amended) if you are resident in the United Kingdom
or, if not, from another appropriately authorised independent financial
adviser.
Requesting hard copy documents
In accordance with Rule 30.3 of the Code, Shield Shareholders, persons with
information rights may request a hard copy of this Announcement (and any
information incorporated by reference in this Announcement) by contacting
Shield's registrars, Link Group, between 09.00 - 17.30, Monday to Friday
excluding public holidays in England and Wales on 0371 664 0300 (or if calling
from outside the UK +44 371 664 0300) or by submitting a request in writing
via email at shareholderenquiries@linkgroup.co.uk or at 10(th) Floor, Central
Square, 29 Wellington Street, Leeds LS1 4DL.
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. Such persons may also request that all future documents,
announcements and information be sent to them in relation to the Mandatory
Offer should be in hard copy form.
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.
Rule 2.9 Disclosure
For the purposes of Rule 2.9 of the Code, Shield confirms that, as at the date
of this Announcement, it has in issue 585,669,777 ordinary shares of 1.5 pence
each. The International Securities Identification Number (ISIN) for the shares
is GB00BYV81293.
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.
4 May 2023
AOP LOAN CONVERSION
MANDATORY CASH OFFER
for
SHIELD THERAPEUTICS PLC
("SHIELD")
by
AOP HEALTH INTERNATIONAL MANAGEMENT AG
("AOP")
1. Introduction
The boards of AOP and Shield are pleased to announce that AOP has requested,
pursuant to a conversion notice dated 3 May 2023, the conversion of USD
9,542,019 of the convertible shareholder loan facility between Shield and AOP
into 127,366,565 ordinary shares of 1.5 pence each in Shield at a price of
6.01 pence per Shield Share, being a 10 per cent. discount to the average
mid-market closing price of a Shield Share over the 20 Business Days prior to
3 May 2023, being the date of the Conversion request.
Pursuant to the terms of the Shareholder Loan, Shield is not required to allot
Shield Shares to the extent that, following such allotment, AOP (together with
its concert parties) would control 30 per cent. of the voting rights. Since
the issue of the Conversion Shares would cause AOP and its concert parties to
hold in excess of 30 per cent. of the voting rights of Shield, the Conversion
is subject to the consent of the board of Shield. As explained below, Shield
has provided its consent to the Conversion on 4 May 2023.
Following the Conversion, AOP and its concert parties will hold interests in
Shield Shares of approximately 41.9 per cent. of the voting rights in Shield.
Consequently, AOP is required to make a mandatory cash offer for Shield
pursuant to Rule 9 of the City Code on Takeovers and Mergers.
Accordingly, the board of AOP hereby announces the terms of a mandatory cash
offer to be made by AOP to acquire the entire issued and to be issued share
capital of Shield not already held by AOP or to be held by AOP pursuant to the
Conversion.
The directors of Shield (excluding Dr. Christian Schweiger) (the "Recommending
Shield Directors") recognise that conversion of the Shareholder Loan, and
receipt of the Conversion Shares and a resulting increase in AOP's percentage
shareholding in Shield is AOP's primary goal and that the Mandatory Offer is a
consequence of the Conversion.
The Mandatory Offer is intended to be effected by means of a takeover offer.
2. The Mandatory Offer
Under the terms of the Acquisition, Shield Shareholders (other than AOP) will
be entitled to receive:
for each Shield Share: 6.20 pence in cash
The Mandatory Offer values the entire issued and to be issued share capital of
Shield at approximately GBP 46.1 million a fully diluted basis, inclusive of
the Conversion Shares and taking into account the exercise of all outstanding
options under the Shield Option Plans and any outstanding warrants issued by
Shield.
The Mandatory Offer Price of 6.20 pence per Shield Share represents a discount
of approximately:
· 13.3 per cent. to the Closing Price of 7.15 pence per Shield
Share on 3 May 2023 (being the last Business Day before the date of this
Announcement); and
· 10.0 per cent. to the volume-weighted average price of 6.89 pence
per Shield Share between 13 December 2022 when Shield announced a debt and
equity financing and 3 May 2023 (being the last Business Day before the date
of this Announcement).
Holders of options pursuant to the Shield Option Plans will be contacted
regarding the effect of the Mandatory Offer on their rights under the Shield
Option Plans.
3. Background to and reasons for the Mandatory Offer
This section provides a history of AOP's investment in Shield, and explains
why AOP is required to make the Mandatory Offer pursuant to Rule 9 of the Code
as a result of the Conversion.
In October 2010, AOP introduced its associate IRORPH GmbH to Shield and IRORPH
GmbH agreed to commit an amount of GBP 3.9 million as a strategic investor
into Shield. Shield and IRORPH GmbH also entered into an exclusive
distribution agreement at that time, which was subsequently novated to AOP in
January 2015. AOP first invested in Shield Shares in July 2018 and has
continued to increase its holding since then. In June 2022, AOP was a 13.1 per
cent. shareholder of Shield, and due to the belief in the strategy adopted by
the Shield management team, and it agreed a Shareholder Loan of USD 10 million
with Shield. This Shareholder Loan extended Shield's cash runway until
approximately the end of calendar year 2022.
On 1 August 2022, AOP partially converted the Shareholder Loan into Shield
Shares (at a conversion price of 5.5215p) resulting in a holding of
approximately 27 per cent. of Shield following that conversion. On 13 December
2022, Shield announced a placing and subscription to raise approximately USD
18.5 million and AOP provided an extension of its Shareholder Loan of USD 10
million. As part of this capital raise, AOP subscribed for c. GBP 3.4 million
of Shield Shares at 6.0p per Shield Share.
On 9 January 2023, AOP converted some of its Shareholder Loan (at a conversion
price of 6.0p) into Shield Shares, to return its holding to approximately 27
per cent. of Shield.
Under the terms of the Shareholder Loan, AOP can convert outstanding loan
balances into newly issued shares in Shield at any time at a 10 per cent.
discount to the average closing share price over the preceding twenty Business
Days. AOP has agreed with Shield that it will convert a further USD 9,542,019
of the Shareholder Loan into 127,366,565 Shield Shares. The conversion price
is 6.01 pence per Conversion Share, calculated pursuant to the terms of the
Shareholder Loan. The loan balance converted at this time therefore has a
value of £7,658,424 at the exchange rate of USD 1.25: GBP 1, determined
pursuant to the terms of the Shareholder Loan.
Under the terms of the Conversion, AOP will be allotted and issued the
Conversion Shares representing circa 21.7 per cent. of Shield's current issued
share capital and circa 17.9 per cent of Shield's enlarged share capital
immediately following the Conversion. Upon issue of the Conversion Shares,
AOP's shareholding in Shield is expected to be approximately 40.0 per cent. As
a result of the Conversion, AOP's shareholding in Shield will exceed 30 per
cent. of the voting rights of Shield. Consequently, AOP is required to make a
mandatory offer for Shield pursuant to Rule 9 of the Code.
AOP notes that the Recommending Shield Directors are recommending Shield
Shareholders do not accept the Mandatory Offer, but do not view the Mandatory
Offer as being hostile. The Recommending Shield Directors are supportive of
the Conversion and have given their consent to it. The Recommending Shield
Directors recognise that conversion of the Shareholder Loan, and receipt of
the Conversion Shares and a resulting increase in AOP's percentage
shareholding in Shield is AOP's primary goal and that the Mandatory Offer is a
consequence of the Conversion.
AOP notes that the Recommending Shield Directors have made irrevocable
undertakings to not accept Mandatory Offer, as further described below.
AOP also notes that Jupiter Asset Management, the holder of 37,146,992 Shield
Shares, representing 6.3% of the issued share capital of Shield (prior to the
Conversion) has issued a letter noting the Recommending Shield Directors'
recommendation not to accept the Mandatory Offer. Jupiter Asset Management
state in their letter that they believe the terms of the Mandatory Offer are
not in the best interests of their funds' investors or Shield. A copy of
this letter will be made available on AOP's website at
https://www.aop-health.com and on Shield's website at
https://www.shieldtherapeutics.com/investors-and-media/results-reports-and-presentations/
(https://www.shieldtherapeutics.com/investors-and-media/results-reports-and-presentations/)
by no later than 12 noon on the Business Day following this Announcement.
Pursuant to the Conversion, the price payable for the Conversion Shares is
6.01 pence per Conversion Share.
AOP recognises that the Mandatory Offer is at a discount to the price at which
Shield shares could be sold on the market. On this basis, AOP acknowledges
that the Mandatory Offer may not succeed.
Following the issue and allotment of the Conversion Shares, an application
will be made for the Conversion Shares to be admitted to trading on AIM and
the date of admission is expected to be 9 May 2023 (the "Admission").
Following the Admission, Shield will have 713,036,342 Shield Shares in issue
each with equal voting rights. No Shield Shares are held in treasury.
Following the Admission AOP will continue to have warrants to subscribe for up
to 5,147,754 Shield Shares.
Further details of the Shareholder Loan are set out in the circulars sent to
Shield Shareholders on 8 July 2022 and 16 December 2022.
4. Information relating to AOP
AOP is provider of integrated therapy solutions from its headquarters in
Vienna, its subsidiaries and representative offices throughout Europe and the
Middle East, as well as through partners worldwide. AOP was founded in 1996
and operates in the field of rare and complex diseases.
AOP had revenue of more than €200 million in 2022.
AOP employs more than 500 people across more than 20 countries, including
countries in Europe, the United Arab Emirates and Israel. AOP also has
multiple strategic partnerships through which it operates internationally.
AOP focuses on four areas and develops, produces and markets innovative
solutions in the treatment areas of Haemato-oncology, Cardiology &
Pulmonology, Intensive Care and Neurology & Metabolic Disorders.
5. Information relating to Shield
Shield is a commercial stage pharmaceutical company focused on the
commercialization of Accrufer®/Feraccru® (ferric maltol), a novel oral iron
therapy differentiated from other conventional irons by its efficacy,
well-tolerated formulation.
Shield has launched Accrufer® in the US with an exclusive, multi-year
collaboration agreement with Viatris, Inc. Feraccru® is commercialised in the
UK and European Union by Norgine B.V., who also have the marketing rights in
Australia and New Zealand. Shield also has an exclusive license agreement with
Beijing Aosaikang Pharmaceutical Co., Ltd., for the development and
commercialization of Accrufer® / Feraccru® in China, Hong Kong, Macau and
Taiwan, with Korea Pharma Co., Ltd. for the Republic of Korea, and with KYE
Pharmaceuticals Inc. for Canada.
Accrufer®/Feraccru® has patent coverage until the mid-2030s.
Accrufer®/Feraccru® are registered trademarks of the Shield Group.
Accrufer®/Feraccru® (ferric maltol) is a novel, stable, non-salt based oral
therapy for adults with iron deficiency, with or without anemia.
Accrufer®/Feraccru® has a novel mechanism of absorption compared to other
oral iron therapies and has been shown to be an efficacious and well-tolerated
therapy in a range of clinical trials. More information about
Accrufer®/Feraccru®, including the product label, can be found at:
www.accrufer.com and www.feraccru.com.
On 27 April 2023, Shield announced its unaudited preliminary results for the
year ended 31 December 2022 and also issued a business update covering its
activities in Q1 2023. Shield confirmed strong growth in US Accrufer®
prescriptions, led by increases in March 2023 and confirmed it believes it has
the resources to support its planned operations to cashflow break-even,
expected in Q4 2024.
6. Background to and reasons for the consent and the recommendation not to accept
Under the terms of the Shareholder Loan, since the Conversion causes AOP's
holding to exceed 30 per cent. of the voting rights of Shield, it requires the
approval of Shield. This has been provided, conditional upon execution of the
Relationship Agreement. In providing this consent, the Recommending Shield
Directors considered the following:
· the fact that the Conversion indicates a high level of belief of
AOP in the value creation potential of Shield's equity;
· the positive impact of the Conversion on Shield's balance sheet
debt, which will be reduced from circa. USD 15 million to circa. USD 5.5
million immediately following the Conversion and the consequent positive
effect on Shield's interest burden and capital structure;
· the potential increased financing options available to Shield
following Conversion, including both debt and equity financing;
· the dilutive impact of the Conversion on Shield's existing
shareholders; and
· the potential effects of AOP's increased shareholding, including
in relation to the Mandatory Offer and the attractiveness of Shield to
potential future investors
Following careful consideration, the Recommending Shield Directors are
recommending that Shield Shareholders do not accept the Mandatory Offer for,
among others, the following reasons:
· the fact that the Mandatory Offer is a technical consequence of
the Conversion;
· since 2021 Shield has raised approximately GBP 63 million of
financing to progress its commercialisation strategy in the U.S. and in
December 2022 it also entered into the collaborative sales agreement with
Viatris Inc. to accelerate revenue growth of Accrufer® in the U.S., which is
estimated to have a USD 2 billion oral iron market. In Shield's business
update issued on 27 April 2023, Shield reported progress in assembling the
combined sales team in the U.S. and expects to have 98 sales representatives
promoting Accrufer® by the middle of May 2023, which is expected to drive a
significant increase in prescriptions going forwards. Further, Shield is also
encouraged by recent growth in total prescription volumes, new prescription
volumes and first time prescribers as also outlined in the recent business
update;
· Shield's unaudited cash balances at 31 March 2023 were GBP 19.2
million which Shield believes is sufficient to support its planned operations
to cashflow break even, expected in Q4 of 2024;
· the Mandatory Offer Price is a 13.3 per cent. discount to the
share price prior to the issue of this Announcement and the Recommending
Shield Directors believe Shield has the potential to drive significant value
for all Shield Shareholders in the future.
7. Recommendation
The Recommending Shield Directors, who have been so advised by Peel Hunt as to
the financial terms of the Mandatory Offer, do not consider the terms of the
Mandatory Offer to be fair and reasonable. In providing its advice, Peel Hunt
has taken into account the commercial assessments of the Recommending Shield
Directors.
Accordingly, the Recommending Shield Directors confirm that they intend to
recommend unanimously that Shield Shareholders do not accept the Mandatory
Offer, as they have irrevocably undertaken not to (or procure not to be done)
in respect of their own holdings over which they have control, being, in
aggregate, 5,652,767 Shield Shares representing approximately 0.97 per cent.
of the ordinary share capital of Shield in issue as at 3 May 2023 (being the
last Business Day prior to the date of this Announcement).
8. Irrevocable Undertakings not to accept the Mandatory Offer
Shield has received irrevocable undertakings to not accept the Mandatory Offer
from all of the Recommending Shield Directors who hold Shield Shares in
respect of their own legal and/or beneficial holdings which are under their
control, totalling 5,652,767 Shield Shares (representing approximately 0.97
per cent. of the existing issued ordinary share capital of Shield as at 3 May
2023, being the last Business Day before the date of this Announcement), as
well as any further Shield Shares of which they may become the legal or
beneficial holder.
Further details of these irrevocable undertakings, including the circumstances
in which they cease to be binding, are set out in Appendix 3 to this
Announcement.
9. AOP intentions regarding the Shield business if the Mandatory Offer becomes unconditional
AOP's strategic plans for Shield
AOP is a long-term shareholder of Shield is supportive of Shield's current
strategy and intends to continue developing and implementing the existing
strategy. AOP believes that Accrufer® has significant potential for growth,
particularly in the US, where there is a large and under-served market. AOP
has great confidence in the future for Accrufer®, and was pleased to note in
Shield's full year trading update published on 27 April, 2023, the substantial
progress Shield has made in a number of areas, including:
· entering into an exclusive, multi-year agreement with Viatris,
Inc, a global healthcare company, in December 2022 to co-commercialise
Accrufer®;
· both Shield and Viatris, Inc hiring a team of dedicated sales
professionals to promote Accrufer®; and
· a nearly 12-fold increase in prescriptions in 2022 from 2021 in
the US.
AOP and Shield entered into the Relationship Agreement on 4 May 2023 to
regulate the relationship between Shield and AOP, as Shield's single largest
shareholder. The Relationship Agreement will address, inter alia, a number of
aspects of the relationship between Shield and AOP, as further described in
paragraph 11 below. AOP acknowledges that, with respect to its intentions for
Shield's business, it will comply with the terms of the Relationship
Agreement, for so long as the Relationship Agreement is in full force and
effect.
If the Mandatory Offer becomes unconditional, AOP intends for Shield to
operate in materially the same way and to ensure that Shield's continues to
achieve its broader strategic goals.
If the Mandatory Offer becomes unconditional, AOP intends to review Shield's
business and operations (the "Review"). AOP notes that the Mandatory Offer has
arisen, in accordance with Rule 9 of the Code, solely as a technical
consequence of the Conversion. AOP has not conducted any due diligence on
Shield for the purposes of making the Mandatory Offer. Therefore, the purpose
of the Review would be to understand the operations of Shield and the best way
of maximising value under AOP ownership. As at the date of this
Announcement, the results of the Review are uncertain and no firm decisions
have been made in relation to specific actions which may be taken. AOP expects
that the Review will be completed within approximately six months from the
Effective Date.
Research and development
Shield spent GBP 2.9 million on research and development in 2022. All of this
research development expenditure was related to the ongoing Phase 3 paediatric
study to expand the label and market opportunity for Accrufer® and complete
the fulfilment of all FDA post-marketing commitments. AOP does not intend to
make any changes to Shield's research and development functions.
Employees and management
AOP attaches great importance to the skills and experience of Shield's
management and employees and recognises that the employees and management of
Shield will be key to its future success. AOP is looking forward to working
with Shield's management and employees to support the future development of
Shield and to ensure that the business continues to thrive.
If, as a result of the Mandatory Offer becoming unconditional, Shield ceases
to be a publicly listed company on AIM, it is likely that there will be
limited headcount reductions related to a small number of public
company-related functions. AOP will seek to reassign individuals involved in
these functions where possible. AOP expects that, if the Mandatory Offer
becomes unconditional and the trading in Shield Shares on AIM is cancelled,
each of the non-executive directors on the Shield Board may resign from their
office as a director of Shield.
AOP does not intend to make any other material reductions to the Shield
Group's employee headcount.
The board of directors of AOP also confirms that, if the Mandatory Offer
becomes unconditional, the existing contractual and statutory employment
rights, including pension rights, of all management and employees of Shield
and its subsidiaries will be fully safeguarded, and envisages that there will
be no material change in their terms and conditions of employment or in the
balance of their skills and functions.
In addition, the Review and any headcount reduction would be subject to
applicable informing and consulting requirements and conducted in accordance
with applicable law.
AOP has not entered into, and has not discussed any form of incentivisation
arrangements with members of Shield's management. AOP does not intend to
discuss any form of incentivisation agreement with members of Shield's
management team unless the Mandatory Offer becomes unconditional.
Pension schemes
Shield does not operate or contribute to any defined benefit pension schemes
in respect of its employees. Shield operates a defined contribution pension
scheme, AOP does not intend to make any changes to the defined contribution
pension scheme if the Mandatory Offer becomes unconditional.
Headquarters, locations and fixed assets
There are no plans to change the locations of Shield's places of business,
headquarters and headquarters functions, or to redeploy the fixed assets of
Shield.
Trading facilities
If AOP has received acceptances under the Mandatory Offer such that its
holding of Shield Shares, including the Conversion Shares, exceeds 75 per
cent. of the Shield Shares, AOP may:
· apply to the London Stock Exchange to cancel the trading in
Shield Shares on AIM, to take effect on or shortly after AOP's holding of
Shield Shares exceeding 75%; and subsequently
· cause Shield be re-registered as a private limited company as
soon as practicable on or following such de-listing.
No statement in this paragraph 10 constitutes or is intended to become a
"post-offer undertaking" for the purposes of Rule 19.5 of the Code.
AOP does not plan to make any changes to AOP or any of its subsidiaries if the
Mandatory Offer becomes unconditional.
10. Financing of the Mandatory Offer
The Consideration payable by AOP pursuant to the Mandatory Offer will be fully
funded by existing cash held by AOP.
Numis, in its capacity as financial adviser to AOP, is satisfied that
sufficient resources are available to AOP to satisfy in full the Consideration
payable to the Shield Shareholders pursuant to the Mandatory Offer.
Further information on the financing of the Mandatory Offer will be set out in
the Offer Document.
11. Relationship Agreement
AOP and Shield entered into the Relationship Agreement on 4 May 2023 to
regulate the relationship between Shield and AOP, as Shield's single largest
shareholder.
The key terms of the Relationship Agreement are that AOP:
· undertakes that it shall exercise all powers and rights which it
has as a shareholder of Shield to procure that all transactions between Shield
and AOP and their respective associates are at arm's length and on normal
commercial terms and in accordance with the related party rules set out in the
AIM Rules;
· agrees not to do anything which, at any time, would (i) result in
Shield not being capable of carrying on its business independently of AOP or
(ii) interfere in the day-to-day management of Shield or (iii) prevent the
Shield Directors from managing Shield independently of AOP.
· agrees not take any steps which would cause the majority of
either the executive Shield Directors or the non-executive Shield Directors to
cease to be independent of AOP.
The Relationship Agreement will continue for so long as:
· AOP holds at least 20 per cent. of Shield's issued share capital
(irrespective of where such shares are admitted to trading);
· AOP holds less than 75 per cent. of Shield's issued share capital
(irrespective of where such shares are admitted to trading);
· if Shield's shares become admitted to trading on a securities
market other than AIM (the "Other Securities Market"), the mean average daily
trading volume over a period of 4 months of the securities listed and traded
on the Other Securities Market is less than 1.5x the mean average daily
trading volume over the same period of 4 months of the securities listed and
traded on AIM;
· the share capital of Shield remains admitted to trading on AIM;
· Shield and AOP have not agreed to terminate the Relationship
Agreement; and
· if the share capital of Shield becomes admitted to trading on a
securities market other than AIM, the existence of the Relationship Agreement
is permitted by the rules applicable to that exchange
12. Structure of and Condition to the Mandatory Offer
It is intended that the Acquisition will be implemented by the Mandatory
Offer.
The Acquisition is subject to the Acceptance Condition and further terms set
out in Appendix 1 to this Announcement and to the full terms and Acceptance
Condition which will be set out in the Offer Document and Form of Acceptance.
Subject to the satisfaction of the Acceptance Condition and certain further
terms set out in Appendix 1, it is expected that the Acquisition would become
or be declared unconditional during the second quarter of 2023.
The long-stop date for the Mandatory Offer shall be the Unconditional Date,
meaning the Mandatory Offer lapse and shall not proceed unless the Acceptance
Condition has been fulfilled by the Unconditional Date. The Mandatory Offer
will not be conditional on the admission of the Conversion Shares to trading
on AIM.
If the Mandatory Offer becomes or is declared unconditional, AOP will keep the
Mandatory Offer open for acceptances for at least 14 days following the date
on which the Mandatory Offer becomes or is declared unconditional.
The AOP Board confirms that the terms of the Mandatory Offer, including the
Mandatory Offer Price, are final and will not be increased, except that AOP
reserves the right to amend the financial terms of the Mandatory Offer: (i) if
there is an announcement on or after the date of this Announcement of a
possible offer or of a firm intention to make an offer by a third party
offeror or potential offeror; (ii) with the agreement or consent of the Panel;
or (iii) in wholly exceptional circumstances as provided for by Rule
32.2(b)(ii) of the Code.
13. Acceleration Statement
The Mandatory Offer will remain open for acceptance until 1.00 p.m. (London
time) on the Unconditional Date (unless AOP has set aside the Acceleration
Statement in accordance with the Code).
By specifying an Unconditional Date which is earlier than Day 60 (as defined
in the Code), AOP is treated as having made an acceleration statement to which
Rule 31.5 of the Code applies (the "Acceleration Statement"). In accordance
with Rule 31.5(e) of the Code, AOP reserves the right to set this Acceleration
Statement aside:
(i) with the agreement or consent of the board of Shield;
(ii) if a third party announces an offer for Shield or there is
otherwise an announcement of a possible offer for Shield by a third party or
an announcement which refers to the existence of a new potential offeror for
Shield (whether the potential offeror is identified or not);
(iii) if a third party announces a firm intention to make an offer for
Shield;
(iv) in the event of an increased or improved offer for Shield by AOP
being recommended by the board of Shield; and
(v) in wholly exceptional circumstances as provided for by Rule
31.5(e)(ii) of the Code.
Under Rules 31.5(c) and (d) of the Code, as a result of this Acceleration
Statement being made (and unless the Panel consents otherwise):
· Rule 31.8(a) of the Code is disapplied and there will therefore
be no restriction on the date by which the board of Shield may announce any
material new information; and
· Rules 2.6(d) and (e) of the Code are disapplied and there will
therefore be no requirement for an identified potential competing offeror to
clarify its position by no later than Day 53 (as defined in the Code) of the
timetable for the Offer.
In the event that AOP sets aside the Acceleration Statement in accordance with
the Code, AOP will retain the right to bring forward the date by which the
Acceptance Condition must be satisfied (and therefore shorten the period for
which the Mandatory Offer is open for acceptance) by publishing a Subsequent
Acceleration Statement, in accordance with the requirements of the Code.
AOP also has the right to seek to invoke the Acceptance Condition, so as to
cause the Mandatory Offer to lapse, by publishing a notice of its intention to
do so in accordance with the requirements of Rule 31.6 of the Takeover Code
(an "ACIN"). The ACIN will specify the date on which AOP intends to seek to
invoke the Acceptance Condition so as to cause the Offer to lapse, in
accordance with the requirements of the Code. In such circumstances, AOP
will make an announcement of the new date by which the Form of Acceptance must
be received in order to be taken into account for purposes of determining the
level of acceptances and/or whether the Acceptance Condition has been
satisfied.
14. Disclosure of interests
AOP currently owns 158,070,394 Shield Shares, representing approximately 26.99
per cent. of the issued ordinary share capital of Shield (as at the close of
business on 3 May 2023, being the last Business Day prior to the date of this
Announcement).
Based on information currently held by AOP, AOP and its concert parties are
together interested in approximately 171,597,107 Shield Shares, representing
approximately 29.3 per cent. of the issued ordinary share capital of Shield
(as at the close of business on 3 May 2023, being the last Business Day prior
to the date of this Announcement).
AOP currently holds warrants to subscribe for up to 5,147,754 Shield Shares.
Except for the interests referred to above, as at the close of business on 3
May 2023 (being the last Business Day prior to the date of this Announcement),
AOP:
· does not have any interest in, or right to subscribe for, any
Shield Share;
· does not have any short position in Shield Shares, including any
short position under a derivative, any agreement to sell, any delivery
obligation or right to require another person to purchase or take delivery of
Shield Shares; nor
· has not borrowed or lent any Shield Shares or entered into any
financial collateral arrangements relating to Shield Shares; nor
· is not party to any dealing arrangement of the kind referred to
in Note 11 on the definition of acting in concert in the Code in relation to
relevant securities of Shield.
15. Consent
Numis has given and not withdrawn its consent to the publication of this
Announcement with the inclusion herein of the reference to its name in the
form and context in which it appears.
Peel Hunt has given and not withdrawn its consent to the publication of this
Announcement with the inclusion herein of the reference to its name in the
form and context in which it appears.
16. General
It is expected that the Offer Document, containing further information about
the Mandatory Offer will be published and sent to Shield Shareholders as soon
as practicable and, in any event, within 28 days of this Announcement (unless
otherwise agreed between AOP and Shield with the consent of the Panel).
An expected timetable of key events relating to the Mandatory Offer will be
provided in the Offer Document.
The Acquisition will be subject to the Acceptance Condition and certain
further terms set out in Appendix 1 and to the full terms and Acceptance
Condition to be set out in the Offer Document.
Appendix 2 contains the sources and bases of certain information contained in
Announcement. Appendix 3 contains details of certain irrevocable undertakings
received by Shield. Appendix 4 contains details of the Shield Profit Forecast.
Appendix 5 contains the definitions of certain terms used in this
Announcement.
Enquiries
AOP
Andreas Steiner (Group CEO) Tel: +423 220 2088
Astrid Magnago (Assistant to Group CEO)
Numis (Financial Adviser to AOP)
Stuart Ord Tel: +44 (0) 20 7260 1000
Freddie Barnfield
Euan Brown
Jack McLaren
Shield
Greg Madison (CEO) Tel: +44 (0) 191 511 8500
Hans-Peter Rudolf (CFO)
Peel Hunt (Nominated Adviser, Financial Adviser and Joint Broker to Shield)
James Steel Tel: +44 (0) 20 7418 8900
Miles Cox
Oliver Duckworth
Edward Beazley
finnCap Ltd (Joint Broker to Shield)
Geoff Nash / Fergus Sullivan / Alice Lane / Nigel Birks / Harriet Ward Tel: +44 (0) 20 7220 0563
Slaughter and May is acting as legal adviser to AOP in connection with the
Mandatory Offer. Taylor Wessing LLP is acting as legal adviser to Shield in
connection with the Mandatory Offer.
Further information
This Announcement is for information purposes only and is not intended to, and
does not, constitute or form part of an offer, invitation or the solicitation
of an offer to purchase or subscribe, otherwise acquire, subscribe for, sell
or otherwise dispose of any securities, or the solicitation of any vote or
approval in any jurisdiction, pursuant to the Mandatory Offer or otherwise,
nor shall there be any sale, issuance or transfer of securities in Shield in
any jurisdiction in contravention of applicable law. The Mandatory Offer will
be made solely pursuant to the terms of the Offer Document, which will contain
the full terms and conditions of the Mandatory Offer. Any decision in respect
of, or other response to, the Mandatory Offer, should be made only on the
basis of information contained in the Offer Document. This Announcement does
not constitute a prospectus, prospectus equivalent document or an exempted
document.
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, accountant
or from an independent financial adviser duly authorised under the Financial
Services and Markets Act 2000 (as amended).
Disclaimers
Numis, which is authorised and regulated in the UK by the Financial Conduct
Authority, is acting as financial adviser to AOP, and no one else, in
connection with the matters set out in this Announcement, and will not be
responsible to anyone other than the board of AOP for providing the
protections afforded to clients of Numis nor for providing advice in relation
to the contents of this Announcement or any other matter or arrangement
referred to herein. Neither Numis 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 Numis in connection with this Announcement, any matter,
arrangement or statement contained or referred to herein or otherwise.
Peel Hunt, which is authorised and regulated in the UK by the Financial
Conduct Authority, is acting as nominated adviser, financial adviser and joint
broker to Shield, and no one else, in connection with the matters set out in
this Announcement, and will not be responsible to anyone other than the board
of Shield for providing the protections afforded to clients of Peel Hunt nor
for providing advice in relation to the contents of this Announcement or any
other matter or arrangement referred to herein. Neither Peel Hunt 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 Peel Hunt in
connection with this Announcement, any matter, arrangement or statement
contained or referred to herein or otherwise.
finnCap, which is authorised and regulated in the UK by the Financial Conduct
Authority, is acting as joint broker to Shield, and no one else, in connection
with the matters set out in this Announcement, and will not be responsible to
anyone other than the board of Shield for providing the protections afforded
to clients of finnCap or for providing advice in relation to the contents of
this Announcement or any other matter or arrangement referred to herein.
Neither finnCap 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
finnCap in connection with this Announcement, any matter, arrangement or
statement contained or referred to herein or otherwise.
No profit forecasts, estimates or qualified benefit statements
Other than the Shield Profit Forecast, no statement in this Announcement, or
incorporated by reference in this Announcement, is intended as a profit
forecast, profit estimate or quantified benefits statement for any period and
no statement in this Announcement should be interpreted to mean that earnings
or earnings per share for Shield for the current or future financial years
would necessarily match or exceed the historical published earnings or
earnings per share for Shield.
Overseas jurisdictions
The release, publication or distribution of this Announcement in jurisdictions
other than the UK may be restricted by law and therefore any persons who are
subject to the laws of any jurisdiction other than the UK should inform
themselves about, and observe, any applicable requirements. Any failure to
comply with the applicable restrictions may constitute a violation of the
securities laws of any such jurisdiction. To the fullest extent permitted by
law, the companies and persons involved in the Mandatory Offer disclaim any
responsibility or liability for the violation of such restrictions by any
person. This Announcement has been prepared for the purposes of complying with
English law 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 of England.
Copies of this Announcement and any formal documentation relating to the
Mandatory Offer are not being, and must not be, directly or indirectly, mailed
or otherwise forwarded, distributed or sent in or into or from any Restricted
Jurisdiction (or any jurisdiction where to do so would violate the laws of
that jurisdiction) and persons receiving such documents (including custodians,
nominees and trustees) must not mail or otherwise forward, distribute or send
it in or into or from any Restricted Jurisdiction. Mandatory Offer. Unless
otherwise permitted by applicable law and regulation, the Mandatory Offer may
not be made directly or indirectly, in or into, or by the use of mails or any
means or instrumentality (including, but not limited to, facsimile, e-mail or
other electronic transmission, telex or telephone) of interstate or foreign
commerce of, or of any facility of a national, state or other securities
exchange of any Restricted Jurisdiction and the Mandatory Offer may not be
capable of acceptance by any such use, means, instrumentality or facilities.
Further details in relation to overseas shareholders will be included in the
Offer Document.
Additional information for US investors
The receipt of cash pursuant to the Mandatory Offer by a US holder of Shield
Shares as consideration for the transfer of its Shield Shares pursuant to the
Mandatory Offer will likely be a taxable transaction for United States federal
income tax purposes and under applicable United States state and local, as
well as foreign and other, tax laws. Shield Shareholders are urged to consult
with legal, tax and financial advisers in connection with making a decision
regarding the Mandatory Offer.
Financial information included in this Announcement and the Offer Document has
been or will have been prepared in accordance with accounting standards
applicable in the UK that may not be comparable to financial information of US
companies or companies whose financial statements are prepared in accordance
with generally accepted accounting principles in the US.
To the extent permitted by applicable law and in accordance with normal UK
market practice, AOP or its nominees, or its brokers (acting as agents) may
from time to time make certain purchases of, or arrangements to purchase,
Shield Shares outside of the US other than pursuant to the Mandatory Offer,
until the date on which the Mandatory Offer becomes unconditional, lapses or
is otherwise withdrawn. These purchases may occur either in the open market at
prevailing prices or in private transactions at negotiated prices. Any
information about such purchases or arrangements to purchase shall be
disclosed as required in the UK, shall be reported to a Regulatory Information
Service and shall be available on the London Stock Exchange website at
www.londonstockexchange.com.
It may be difficult for US holders of Shield Shares to enforce their rights
and any claim arising out of the US federal laws, since AOP and Shield are
located in a non-US jurisdiction, and some or all of their officers and
directors may be residents of a non-US jurisdiction. US holders of Shield
Shares may not be able to sue a non-US company or its officers or directors in
a non-US court for violations of the US securities laws. Further, it may be
difficult to compel a non-US company and its affiliates to subject themselves
to a US court's judgement.
Forward-Looking Statements
This Announcement contains certain forward-looking statements with respect to
the financial condition, results of operations and business of Shield and
certain plans and objectives of AOP and with respect thereto.
These forward-looking statements can be identified by the fact that they do
not relate only to historical or current facts. These statements are based on
assumptions and assessments made by AOP and/or Shield in light of their
experience and their perception of historical trends, current conditions,
future developments and other factors they believe appropriate, and therefore
are subject to risks and uncertainties which could cause actual results to
differ materially from those expressed or implied by those forward-looking
statements.
The forward-looking statements contained in this Announcement include
statements relating to the expected effects of the Acquisition on AOP and
Shield, the expected timing and scope of the Acquisition and other statements
other than historical facts. Forward-looking statements often use words such
as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal",
"believe", "hope", "aims", "continue", "will", "may", "should", "would",
"could", or other words of similar meaning. By their nature, forward-looking
statements involve risk and uncertainty, because they relate to events and
depend on circumstances that will occur in the future and the factors
described in the context of such forward-looking statements in this document
could cause actual results and developments to differ materially from those
expressed in or implied by such forward-looking statements. Forward-looking
statements may include statements in relation to the following: (i) future
capital expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy, losses and
future prospects; (ii) business and management strategies and the expansion
and growth of AOP or Shield's operations and potential synergies resulting
from the Acquisition; and (iii) the effects of global economic conditions and
governmental regulation on AOP or Shield's business.
Although it is believed that the expectations reflected in such
forward-looking statements are reasonable, neither AOP nor Shield, nor any of
their representatives, associates or directors, officers or advisers provides
any assurance that such expectations will prove to have been correct and you
are therefore cautioned not to place undue reliance on these forward-looking
statements which speak only as at the date of this document. None of Shield,
AOP assumes any obligation to update or correct the information contained in
this document (whether as a result of new information, future events or
otherwise), except as required by applicable law.
Dealing and Opening Position Disclosure requirements
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 an offeree company or of any
securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the Offer Period and, if later, following the Announcement in
which any securities exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no
later than 3.30 p.m. (London time) on the 10(th) Business Day following the
commencement of the Offer Period and, if appropriate, by no later than 3.30
p.m. (London time) on the tenth 10(th) Business Day following the Announcement
in which any securities exchange offeror is first identified. Relevant persons
who deal in the relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening Position
Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1
per cent. or more of any class of relevant securities of the offeree company
or of any securities exchange offeror must make a Dealing Disclosure if the
person deals in any relevant securities of the offeree company or of any
securities exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions in, and
rights to subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s), save to the extent that
these details have previously been disclosed under Rule 8. A Dealing
Disclosure by a person to whom Rule 8.3(b) applies must be made by no later
than 3.30 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 an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the Offer Period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.
Electronic communications
Please be aware that addresses, electronic addresses and certain information
provided by Shield Shareholders, persons with information rights and other
relevant persons for the receipt of communications from Shield may be provided
to AOP during the Offer Period as requested under Section 4 of Appendix 4 of
the Code to comply with Rule 2.11(c) of the Code.
Publication on website
A copy of this Announcement will be made available, subject to certain
restrictions relating to persons resident in Restricted Jurisdictions, on
AOP's website at https://www.aop-health.com and on Shield's website at
https://www.shieldtherapeutics.com/investors-and-media/results-reports-and-presentations/
(https://www.shieldtherapeutics.com/investors-and-media/results-reports-and-presentations/)
by no later than 12 noon on the Business Day following this Announcement. For
the avoidance of doubt, the contents of the websites referred to in this
Announcement are not incorporated into and do not form part of this
Announcement.
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, accountant
or independent financial adviser duly authorised under the Financial Services
and Markets Act 2000 (as amended) if you are resident in the United Kingdom
or, if not, from another appropriately authorised independent financial
adviser.
Requesting hard copy documents
In accordance with Rule 30.3 of the Code, Shield Shareholders, persons with
information rights may request a hard copy of this Announcement (and any
information incorporated by reference in this Announcement) by contacting
Shield's registrars, Link Group, between 09.00 - 17.30, Monday to Friday
excluding public holidays in England and Wales on 0371 664 0300 (or if calling
from outside the UK +44 371 664 0300) or by submitting a request in writing
via email at shareholderenquiries@linkgroup.co.uk or at 10(th) Floor, Central
Square, 29 Wellington Street, Leeds LS1 4DL.
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. Such persons may also request that all future documents,
announcements and information be sent to them in relation to the Mandatory
Offer should be in hard copy form.
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.
Rule 2.9 Disclosure
For the purposes of Rule 2.9 of the Code, Shield confirms that, as at the date
of this Announcement, it has in issue 585,669,777 ordinary shares of 1.5 pence
each. The International Securities Identification Number (ISIN) for the shares
is GB00BYV81293.
APPENDIX 1
CONDITION TO AND CERTAIN FURTHER TERMS OF THE MANDATORY OFFER
PART A: CONDITIONS TO THE MANDATORY OFFER
The Mandatory Offer will be subject to the following condition (the
"Acceptance Condition"):
1. valid acceptances of the Mandatory Offer being received and
not, where permitted, withdrawn, by no later than 1.00 p.m. (London time) on
the Unconditional Date (or such later time(s) and date(s) as AOP may, subject
to the rules of the Code or with the consent of the Panel, decide) in respect
of Shield Shares, which together with any Shield Shares acquired or agreed to
be acquired by AOP before or during the Mandatory Offer, representing not less
than 50 per cent. of the voting rights attached to Shield Shares.
For the purposes of this Acceptance Condition:
(i) Shield Shares that are unconditionally allotted or issued
before the Mandatory Offer becomes, or is declared, unconditional whether
pursuant to the exercise of any outstanding subscription or conversion rights
or otherwise, shall be deemed to carry the voting rights they will carry upon
issue; and
(ii) all percentage of voting rights and share capital are to be
calculated by reference to the percentage held and in issue excluding any and
all shares held in treasury by Shield from time to time.
PART B: CERTAIN FURTHER TERMS OF THE MANDATORY OFFER
1. The Acceptance Condition cannot be waived. The Mandatory
Offer will be subject to the satisfaction of the Acceptance Condition set out
in this Part A, to the further terms set out in this Appendix 1, and to the
full terms and the Acceptance Condition which will be set out in the Offer
Document and the Form of Acceptance.
2. The Mandatory Offer shall lapse unless the Acceptance
Condition has been fulfilled.
3. Save as may otherwise be required by the Panel, the
Mandatory Offer will not proceed, will lapse or will be withdrawn if by
midnight on the Unconditional Date sufficient acceptances have not been
received so as to enable the Acceptance Condition to be satisfied.
4. The Acquisition will be governed by English law and be
subject to the Acceptance Condition and further terms set out in this Appendix
1 and to be set out in the Offer Document and the Form of Acceptance. The
Acquisition will be subject to the applicable rules, regulations and
requirements of the Financial Conduct Authority, the Panel, the London Stock
Exchange and the Code. This Announcement does not constitute, or form part of,
an offer or invitation to purchase Shield Shares or any other securities.
5. The availability of the Acquisition to persons not resident
in the United Kingdom may be affected by the laws of the relevant
jurisdiction. Any persons who are subject to the laws of any jurisdiction
other than the United Kingdom should inform themselves about and observe any
applicable requirements. Details in relation to Shield Shareholders in
overseas jurisdictions will also be contained in the Offer Document.
6. Any Shield Shares acquired by AOP in connection with the
Acquisition will be acquired fully paid and free from all liens, equitable
interests, charges, encumbrances, options, rights of pre-emption and any other
third party rights and interests of any nature whatsoever and together with
all rights now or hereafter attaching or accruing to them, including voting
rights and the right to receive and retain in full all dividends and other
distributions (if any) declared, made or paid on or after the date of this
Announcement.
7. If, on or after the date of this Announcement and before the
Unconditional Date, any dividend and/or other distribution and/or other return
of capital is declared, made or paid or becomes payable in respect of the
Shield Shares, AOP reserves the right to reduce the consideration payable
under the terms of the Acquisition for the Shield Shares by an amount up to
the amount of such dividend and/or distribution and/or return of capital, in
which case any reference in this Announcement or in the Offer Document to the
consideration payable under the terms of the Acquisition will be deemed to be
a reference to the consideration as so reduced. To the extent that any such
dividend and/or distribution and/or other return of capital is declared, made
or paid or is payable and it is: (i) transferred pursuant to the Mandatory
Offer on a basis which entitles AOP to receive the dividend or distribution
and to retain it; or (ii) cancelled, the consideration payable under the terms
of the Mandatory Offer will not be subject to change in accordance with this
paragraph. Any exercise by AOP of its rights referred to in this paragraph
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 Mandatory
Offer.
APPENDIX 2
SOURCES OF INFORMATION AND BASES OF CALCULATION
Unless otherwise stated in this Announcement:
1. As at 3 May 2023 (being the last Business Day before the
date of this Announcement), there were 585,669,777 Shield Shares in issue. The
International Securities Identification Number (ISIN) for the shares is
GB00BYV81293.
2. The value attributed to the fully diluted issued ordinary
share capital of Shield is based on 585,669,777 Shield Shares in issue,
24,821,557 Shield Shares subject to awards under the Shield Option Plans and
5,147,754 Shield Shares which AOP has warrants to subscribe for, in each case
as at 3(rd) May, 2023 (the last Business Day before the date of this
Announcement).
3. The value of the Acquisition based on the Mandatory Offer
Price of 6.20 pence per Shield Share is calculated on the basis of the issued
and to be issued share capital of Shield (as set out in paragraph (1) above).
4. Unless otherwise stated, all Closing Prices and volume
weighted average prices for Shield Shares referred to in this Announcement
have been derived from Bloomberg.
5. The premia calculations have been calculated by reference
to:
a. The closing share price on 3 May 2023 (the last Business Day before the
date of this Announcement) of 7.15 pence per Shield share
b. The volume weighted average close price between 13 December 2022 and
the last Business Day before the date of this Announcement of 6.89 pence per
Shield share
6. Unless otherwise stated, the financial information relating
to Shield is extracted from the audited consolidated financial statements of
Shield for the financial year to 31 December 2021, prepared in accordance with
IFRS.
7. Unless otherwise stated, the financial information relating
to AOP is extracted from the audited consolidated financial statements of AOP
for the financial year to 2022, prepared in accordance with IFRS.
APPENDIX 3
IRREVOCABLE UNDERTAKINGS
The following Shield Directors have given irrevocable undertakings to not to
accept the Mandatory Offer:
Name Total Number of Shield Shares Percentage of existing issued share capital of Shield
Hans Peter Hasler 3,300,000 0.56%
Greg Madison 1,893,039 0.32%
Peter Llewellyn-Davies 177,842 0.03%
Fabiana Lacerca-Allen 271,886 0.05%
Anders Lundstrom 10,000 -
Total 5,652,767 0.97%
Shield has therefore received irrevocable undertakings not to accept the
Mandatory Offer in respect of a total of 5,652,767 Shield Shares representing,
in aggregate, approximately 0.97% per cent. of Shield's share capital in issue
as at 3 May 2023.
APPENDIX 4
SHIELD PROFIT FORECAST
As part of its 2023 preliminary results statement on 27 April 2023, Shield
provided the following guidance on its financial outlook.
"With the support of the Viatris partnership, management estimates that
Accrufer(®) has the potential to generate combined net product revenues of
c. US$150 million by the year ending 31 December 2025 and it expects the
Group to turn cash flow positive by the end of 2024. Nearer term Shield
expects to deliver strong growth in prescription numbers in 2023, in line with
the 125,000 to 160,000 range provided at the time of the December 2022
financing, with a significant weighting to the second half when the 100-person
sales team will be in situ for the entire period.
Annual operating expenses for Shield are expected to be in the range of
US$40-45 million in the year ending 31 December 2023 and are expected to
remain approximately at this level until the year ending 31 December 2025
assuming Accrufer(®) prescriptions and revenues build as expected. The costs
of servicing interest on the convertible shareholder loan will be around £1.7
million (or US$2.0 million) per annum, however no interest is payable on the
£8.2 million (or US$10 million) extension during 2023."
Within the same announcement, Shield also announced that the prescriptions in
Accrufer(®) had a "net average sales price of approximately $135 per
prescription in 2022, which is expected to increase over the next two years."
In addition, as part of its 13 December 2022 financing announcement, Shield
stated "gross margin on Accrufer(®) net revenues is expected to be around
50%".
Application of Rule 28 to the Shield Profit Forecast
When taken together, the statements with respect to a prescription volume
range noting a lower bound, a sales price that is expected to increase, gross
margin expectation and operating expenses can be used to estimate a minimum
Net Operating Profit for the U.S. business, for a period under 15 months from
the date published. For the purposes of Rule 28.1 this constitutes a profit
forecast (the "Shield Profit Forecast").
Shield Directors' confirmation
The Shield directors confirm that, as at the date of this Announcement, the
Shield Profit Forecast remains valid and it has been properly compiled on the
basis of the assumptions stated below and that the basis of accounting used is
consistent with Shield's accounting policies which are in accordance with
International Financial Reporting Standards and those that Shield applied in
preparing its financial statements for the year ended 31 December 2021.
Further information on the basis of preparation of the Shield Profit Forecast,
including the principal assumptions on which it is based, is set out below.
Basis of preparation and principal assumptions
The Shield Profit Forecast is based on the assumptions listed below.
Factors outside the influence or control of the Shield directors
· There will be no material changes to the existing prevailing
macroeconomic or political conditions in the markets and regions in which
Shield operates.
· There will be no material changes in market conditions in
relation to either customer demand, competitive environment or production
capabilities
· The interest, inflation and tax rates in the markets and regions
Shield operates will remain materially unchanged from the prevailing rates
· There will be no material adverse events that will have a
significant impact on Shield's financial performance.
· There will be no business disruptions that materially affect
Shield or its key customers, including natural disasters, acts of terrorism,
technological issues or supply chain disruptions.
· There will be no material changes to the prevailing foreign
exchange rates that will have a significant impact on Shield's revenue or cost
base.
· There will be no material changes in legislation or regulatory
requirements impacting on Shield's operations or on its accounting policies.
· There will be no material litigation in relation to any of
Shield's operations.
Factors within the influence or control of the Shield directors
· There will be no material change to the present executive
management of Shield.
· There will be no material change in the operational strategy of
Shield.
· There will be no material adverse change in Shield's ability to
maintain customer, sales team and partner relationships
· There will be no material acquisitions or disposals.
· There will be no material strategic investments over and above
those currently planned.
· There will be no material change in the dividend or capital
allocation policies of Shield.
APPENDIX 5
DEFINITIONS
"Acceleration Statement" the statement made by AOP as set out in this Announcement to which Rule 31.5
of the Code applies, which AOP is treated as having made by specifying an
Unconditional Date in this Announcement which is earlier than Day 60 (as
defined in the Code);
"Acceptance Condition" the condition set out in paragraph 1 of Part A of Appendix 1;
"Acquisition" the proposed acquisition by AOP of Shield (excluding Shield Shares held by
AOP) by way of the Mandatory Offer;
"Announcement" this announcement made pursuant to Rule 2.7 of the Code;
"Business Day" any day (excluding any Saturday or Sunday or any public holiday in England) on
which banks in London are generally open for business;
"Closing Price" the closing middle market quotations of a Shield Share on any particular date;
"Code" or the "City Code on Takeovers and Mergers" the UK City Code on Takeovers and Mergers as issued, and as from time to time
amended and interpreted by, the Panel;
"Companies Act" the Companies Act 2006;
"concert parties" persons who are acting in concert as defined in the Code;
"Consideration" the consideration payable by AOP to Shield Shareholders pursuant to the
Acquisition, comprising 6.20 pence in cash for each Shield Share;
"Conversion" the conversion of USD 9,542,019 of the Shareholder Loan into 127,366,565
Shield Shares pursuant to the terms and conditions of the Shareholder Loan;
"Court" the High Court of Justice in England and Wales;
"finnCap" finnCap Limited, registered in England and Wales with company number 06198898
and having its registered office at 1 Bartholomew Close, London, EC1A 7BL,
Shield's joint broker;
"Form of Acceptance" the form of acceptance to accept the Mandatory Offer, which will accompany the
Offer Document;
"GBP" the lawful currency from time to time of the United Kingdom of Great Britain
and Northern Ireland;
"Mandatory Offer" the offer to be made by or on behalf of AOP to acquire the entire issued and
to be issued share capital of Shield (excluding Shield Shares already held by
AOP), and, where the context admits, any subsequent revision, variation,
extension or renewal of such offer;
"Mandatory Offer Price" 6.20 pence per Shield share;
"Offer Document" the document to be sent to Shield Shareholders which will contain, inter alia,
the terms and conditions of the Mandatory Offer;
"Offer Period" the period which commenced on 4 May 2023 and ending on the earlier of the date
on which the Mandatory Offer becomes unconditional and/or the date on which
the Mandatory Offer lapses or is withdrawn (or such other date as the Panel
may decide);
"Opening Position Disclosure" an announcement containing details of interests or short positions in, or
rights to subscribe for, any relevant securities of a party to the offer if
the person concerned has such a position;
"Panel" the UK Panel on Takeovers and Mergers;
"Relationship Agreement" the relationship agreement dated 4 May 2023 between AOP and Shield, which
regulates the relationship between AOP, as Shield's largest shareholder and
Shield;
"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 to Shield Shareholders in that
jurisdiction;
"Shareholder Loan" the convertible shareholder loan facility dated 1 August 2022 as amended on 12
December 2022, between, amongst others, AOP and Shield;
"Shield" Shield Therapeutics plc, a company incorporated in England and Wales with
registered number 09761509 and with its registered address at Northern Design
Centre Studio 6, 3rd Floor, Baltic Business Quarter, Gateshead Quays, England,
NE8 3DF;
"Shield Directors" the directors of Shield, from time to time;
"Shield Option Plans" the share options plans of Shield, including (i) the Shield Company Share
Option Plan; (ii) the Shield Long Term Incentive Plan; (iii) the Shield
Retention Share Plan; and (iv) the Shield Retention and Performance Share
Plan;
"Shield Profit Forecast" the Shield forecast, as set out in Appendix 4 of this announcement;
"Shield Shareholders" the holders of Shield Shares from time to time;
"Shield Shares" the ordinary shares of 1.5 pence each in the capital of Shield;
"Subsequent Acceleration Statement" any further statement made subsequent to the Acceleration Statement being set
aside in which AOP, in accordance with Rule 31.5 of the Code, brings forward
the latest date by which the Acceptance Condition must be satisfied;
"Unconditional Date" the 21(st) calendar day from the date of publication of the Offer Document,
or, if AOP has, where permitted, set aside the Acceleration Statement, such
other date as AOP may specify in the Offer Document or any Subsequent
Acceleration Statement (unless, where permitted, it has set aside such
Subsequent Acceleration Statement); and
"USD" the lawful currency from time to time of the United States of America.
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