Statement re Possible Offer
03/10/2023 13:30
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RNS Number : 5516O TMT Acquisition PLC 03 October 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 THAT JURISDICTION
THIS IS AN ANNOUNCEMENT FALLING UNDER RULE 2.4 OF THE CITY CODE ON TAKEOVERS
AND MERGERS (THE "TAKEOVER CODE") AND DOES NOT CONSTITUTE AN ANNOUNCEMENT OF A
FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE TAKEOVER CODE AND THERE
CAN BE NO CERTAINTY THAT ANY FIRM OFFER WILL BE MADE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK
VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH
LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED. ON
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN
3 October 2023
TMT Acquisition plc
("TMT Acquisition" or the "Company")
Statement regarding possible offer for TMT Acquisition plc
The boards of TMT Acquisition plc ("TMT Acquisition") and Belluscura plc
("Belluscura") are pleased to announce that they have reached agreement on the
key terms of a possible share for share offer for TMT Acquisition by
Belluscura (the "Possible Offer").
The independent director of TMT Acquisition, Paul Tuson (the "Independent
TMT Acquisition Director"), has confirmed to Belluscura that, should a firm
offer be made on the Possible Offer Terms (as defined below), the Independent
TMT Acquisition Director is minded to recommend it to TMT Acquisition
shareholders, subject to the agreement by both Belluscura and TMT Acquisition
of customary terms and conditions as well as the satisfactory completion of
confirmatory due diligence by both Belluscura and TMT Acquisition.
Any announcement by Belluscura of a firm intention to make an offer for TMT
Acquisition remains subject to the satisfaction or waiver (by Belluscura) of a
number of customary pre-conditions, including, inter alia, completion of
confirmatory due diligence, agreement of the detailed terms of the Possible
Offer and a recommendation from the Independent TMT Acquisition Director.
Terms of the Possible Offer
The proposed terms of the Possible Offer comprise the issuance of 15 new
ordinary shares of Belluscura ("Belluscura Shares") in exchange for every 22
ordinary shares of TMT Acquisition ("TMT Acquisition Shares") equalling
18,750,000 Belluscura Shares (the "Exchange Ratio"). The Exchange Ratio would
imply a valuation of 21.82 pence for each TMT Acquisition Share and a 24.7%
premium to the three month volume weighted average price for TMT Acquisition
Shares calculated for the period ending on 2 October 2023, the last
practicable date prior to the announcement of the Possible Offer (the
"Possible Offer Terms").
Accordingly, on the basis of the Exchange Ratio, the Possible Offer will imply
a total valuation of £6.0 million for TMT Acquisition.
A compelling combination which significantly increases Belluscura's ability to
execute on its burgeoning sales pipeline and strategy, creating considerable
value for all stakeholders of both TMT Acquisition and Belluscura
Given the introduction and significant pre-launch demand expressed for the
DISCOV-R product, building on top of the continued sales progress of the
X-PLOR (as outlined below), Belluscura is seeking further growth capital to
fund the increased working capital required to meet these growth
opportunities. The funds available within TMT Acquisition (approximately £4.7
million), will provide the enlarged group with additional working capital, to
help meet the planned growth through to Belluscura becoming cash flow
positive, which the board of Belluscura expect to be by the end of the second
quarter of next year. Following completion, the Belluscura board will remain
in place and the directors of the TMT Acquisition board will step down from
their roles.
Subject to the confirmatory due diligence required by Belluscura's Nominated
Adviser (as is normal for the proposed appointment of any director of an AIM
company), and agreement of terms in respect of the Non-Executive Director
appointment letters, it is Belluscura's intention to invite both Jonathan
Satchell and Paul Tuson, currently Non-Executive Directors of TMT Acquisition,
to join the existing Belluscura board as Non-Executive Directors upon the
Possible Offer becoming or being declared wholly unconditional, as the board
of Belluscura believe each would make a positive contribution to Belluscura's
board given their experience and expertise.
Benefits for TMT Acquisition shareholders
· An attractive valuation, providing the opportunity for all TMT
Acquisition shareholders to participate in the significant future potential
upside of the combination through the ownership of Belluscura Shares; and
· The Possible Offer represents a premium of approximately:
o 28.3% to the closing price of a TMT Acquisition Share on 2 October 2023,
being the last business day before this announcement; and
o 24.7% to the TMT Acquisition three-month volume weighted average price for
the period ending 2 October 2023, being the last business day before this
announcement.
Benefits for Belluscura shareholders
· Adds a significant capital injection for working capital;
· Helps Belluscura to capitalise on its burgeoning opportunity in a
fast-growing global market;
· Enhances Belluscura's ability to leverage its position as a leading
provider of oxygen enrichment technology; and
· The board of Belluscura believes the structure and key terms of the
Possible Offer are extremely attractive for Belluscura shareholders.
Break fee
Belluscura has agreed that, in the event that Belluscura withdraws or
terminates discussions with regard to the Possible Offer or proposes to
materially reduce the Exchange Ratio (a reduction of 5% or more being material
for this purpose) Belluscura shall, subject to certain limited exceptions, no
later than 5 business days from the date of written notice from TMT
Acquisition to Belluscura, pay the sum of £100,000 in cash to TMT
Acquisition.
About TMT Acquisition
TMT Acquisition is a cash shell that was admitted to the standard segment and
to trading on the Main Market of the London Stock Exchange on 11 October 2021.
For the year ended 31 March 2023, TMT Acquisition's unaudited accounts
recorded net assets of £4,717,188 and made a loss before tax of £60,087 for
the year. As at 30 September 2023, TMT Acquisition had unaudited cash of
£4,735,575.
About Belluscura
AIM quoted Belluscura is a leading UK medical device company focused on
developing oxygen enrichment technology spanning broad industries and
therapies for global markets.
Belluscura's current portable oxygen concentrators focus is on improving the
quality of life for millions of people worldwide who suffer from chronic lung
diseases, such as the Chronic Obstructive Pulmonary Disease, respiratory
distress caused by COVID-19, and many other respiratory disorders. The
Portable Oxygen Concentrator Market is predicted1 to grow at a compound annual
growth rate of 14.0% from $1.63 billion in 2022 to $2.76 billion by 2026.
Together with its research partner, Separation Design Group, they have
developed a patented portable oxygen concentrator, the X-PLOR, that can
deliver up to 95% pure oxygen to patients 24 hours a day, 7 days a week. The
X-PLOR is lightweight and highly portable, specifically designed to replace
metal oxygen tanks and heavier portable oxygen concentrator devices. The
X-PLOR portable oxygen concentrator has been granted 510(K) clearance from the
U.S. Food and Drug Administration.
In late March 2023, Belluscura unveiled its second portable oxygen
concentrator, the DISCOV-R, at Medtrade, the largest home health trade show in
the US. Weighing approximately 6.5 lbs, the DISCOV-R generates nearly three
times as much oxygen by weight than other concentrators in its class. The
DISCOV-R was awarded a prestigious Silver in the best new product category at
Medtrade. The full commercial launch of the DISCOV-R is anticipated later this
year.
The DISCOV-R has been met with strong pre-launch demand with over 125 durable
medical equipment providers and internet retailers already requesting access
to this innovative device. The Belluscura directors believe that amounts to
only 2% of the durable equipment companies in the US. With two litres of
continuous flow and eight levels of pulse dose delivery, Belluscura
anticipates the product being covered by both Centres for Medicare &
Medicaid Services codes E1390 and E1392, stationary and portable concentrator,
respectively. To meet this demand, Belluscura has been focusing significant
resources to bring the DISCOV-R to market as soon as possible and to increase
production and manufacturing capacity in the US and China where the product
will be manufactured.
In August 2023, Belluscura announced it had signed a distribution agreement
with McKesson Medical-Surgical, a division of McKesson, the ninth largest
group by revenue in the US. McKesson delivers a third of all pharmaceuticals
used in North America and operates the fourth-largest pharmacy chain in North
America. The X-PLOR portable oxygen concentrator will now be available to
McKesson's customers through their online catalogue.
Belluscura also announced that that it has received purchase orders for over
6,500 DISCOV-R portable oxygen concentrator. This represents approximately $15
million of potential revenue to Belluscura, with initial production of the
DISCOV-R expected to begin by the end of this quarter.
Also in August 2023, Belluscura announced that it has entered into an
Exclusive License, Marketing and Distribution Agreement with its global
manufacturing partner, InnoMax Medical Technology Ltd ("InnoMax"). InnoMax,
headquartered in Shenzhen, China, has acquired the exclusive right to
manufacture and distribute X-PLOR in China, Hong Kong, Macau and Singapore
(together "The Territories"). In addition to the X-PLOR, the agreement will
also include the DISCOV-R, when registration is received in The Territories
for both devices.
Under the terms of the ten-year agreement with InnoMax, effective from 1
October 2023, Belluscura is to receive annually increasing minimum cumulative
royalties over the term of the agreement. In addition to receiving royalties
on licensed products (subject to annually increasing minimum amounts),
Belluscura will receive a share of the net profits on sales of accessories.
The agreement will be exclusive for a minimum of five years, though if minimum
sales quantities are not achieved, Belluscura and InnoMax can mutually agree
to grant InnoMax a non-exclusive license for the remainder of the term.
Minimum cumulative royalties over the term of the Agreement will therefore
range from $27.5 million if the license is converted to non-exclusive from
year 6 and up to $55 million in cumulative royalties if the license remains
exclusive for the entire term.
Finally, in September 2023 Belluscura announced that it has received approval
from the Hong Kong Department of Health - Medical Device Division to
distribute its X-PLOR portable oxygen concentrator.
The Group employs 24 people across two locations in the UK and US.
In its unaudited interim results for the six months ended 30 June 2023 which
it announced on 13 September 2023, Belluscura reported revenue of $0.4
million, an adjusted EBITDA loss of $2.9 million, inventory of $8.8 million
and cash of $3.8 million and that trading since the period end remained in
line with expectations for the full year.
(1) Source(:) https://www.precedenceresearch.com/portable-oxygen-concentrators-market
Important Takeover Code notes
There is no certainty any offer will be made even if the pre-conditions are
satisfied or waived.
This announcement has been made with the consent of Belluscura.
In accordance with Rule 2.6(a) of the Takeover Code, Belluscura is required,
by not later than 5.00 p.m. on 31 October 2023, to either announce a firm
intention to make an offer for TMT Acquisition in accordance with Rule 2.7 of
the Takeover Code or announce that it does not intend to make an offer, in
which case the announcement will be treated as a statement to which Rule 2.8
of the Takeover Code applies. This deadline can be extended with the consent
of the Panel in accordance with Rule 2.6(c) of the Takeover Code.
Belluscura reserves the right to make an offer for TMT Acquisition on less
favourable terms than those set out in this announcement with the agreement or
recommendation of the Independent TMT Acquisition Director. Belluscura
reserves the right to implement the transaction through or together with a
subsidiary of Belluscura or a company which will become a subsidiary of
Belluscura. Belluscura reserves the right to adjust the terms of the Possible
Offer to take account of the value of any dividend or other distribution which
is announced, declared, made or paid by TMT Acquisition after the date of this
announcement.
A further announcement will be made in due course.
The person responsible for arranging the release of this announcement on
behalf of TMT Acquisition is Harry Hyman, Chairman.
For further information please contact:
TMT Acquisition plc via focusIR
Harry Hyman
Belluscura plc via MHP Group
Adam Reynolds
Dowgate Capital Limited - Financial Advisor and Broker to Belluscura +44 (0)20 3903 7715
Russell Cook / Nicholas Chambers
SPARK Advisory Partners Limited - Nominated Advisor to Belluscura +44 (0)20 3368 3554
Neil Baldwin / Jade Bayat
Wyvern Partners Limited - Financial Advisor to TMT Acquisition +44 (0) 7788 414 788
Anthony Gahan
focusIR - Investor Relations (TMT Acquisition) kat.perez@focusir.com
Kat Perez
MHP Group - Financial PR & Investor Relations (Belluscura) Belluscura@mhpgroup.com
Katie Hunt/Matthew Taylor
Sources and bases
In this announcement, unless otherwise stated or the context otherwise
requires, the following bases and sources have been used:
· the closing price of TMT Acquisition Shares on 2 October 2023, the
day before the Possible Offer was announced was 17 pence;
· the TMT Acquisition three month volume weighted average price as at 2
October 2023 is 17.5 pence;
· the trailing Belluscura three-month volume weighted average price for
the period up to 2 October 2023 is 40.12 pence;
· TMT Acquisition's cash balance as at 30 September 2023 was
£4,735,575.
Responsibility
The Independent TMT Acquisition Director accepts responsibility for the
information contained in this announcement relating to TMT Acquisition. The
board of Belluscura accept responsibility for all of the other information
contained in this announcement.
Important notice related to financial advisors
Dowgate Capital Limited ("Dowgate"), which is authorised and regulated by the
Financial Conduct Authority in the United Kingdom, is acting exclusively for
Belluscura and for no one else in connection with the subject matter of this
announcement and will not be responsible to anyone other than Belluscura for
providing the protections afforded to its clients or for providing advice in
connection with the subject matter of this announcement.
SPARK Advisory Partners Limited ("SPARK"), which is authorised and regulated
by the Financial Conduct Authority in the United Kingdom, is acting
exclusively for Belluscura and for no one else in connection with the subject
matter of this announcement and will not be responsible to anyone other than
Belluscura for providing the protections afforded to its clients or for
providing advice in connection with the subject matter of this announcement.
Wyvern Partners Limited ("Wyvern"), which is authorised and regulated by the
Financial Conduct Authority in the United Kingdom, is acting exclusively for
TMT Acquisition and for no one else in connection with the subject matter of
this announcement and will not be responsible to anyone other than TMT
Acquisition for providing the protections afforded to its clients or for
providing advice in connection with the subject matter of this announcement.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% or
more of any class of relevant securities of an offeree company or of any
securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the offer period and, if later, following the announcement in
which any securities exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no
later than 3.30 p.m. (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later than 3.30
p.m. (London time) on the 10th business day following the announcement in
which any securities exchange offeror is first identified. Relevant persons
who deal in the relevant securities of 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 Takeover Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the offeree
company or of any securities exchange offeror must make a Dealing Disclosure
if the person deals in any relevant securities of the offeree company or of
any securities exchange offeror. A Dealing Disclosure must contain details of
the dealing concerned and of the person's interests and short positions in,
and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror, 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 Takeover 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.
Rule 26.1 disclosure
In accordance with Rule 26.1 of the Takeover Code, a copy of this announcement
will be available (subject to certain restrictions relating to persons
resident in restricted jurisdictions) at www.TMT Acquisition.com by no later
than 12 noon (London time) on the business day following the date of this
announcement. The content of the website referred to in this announcement is
not incorporated into and does not form part of this announcement.
In accordance with Rule 26.1 of the Takeover Code, a copy of this announcement
will be available (subject to certain restrictions relating to persons
resident in restricted jurisdictions) at www.Belluscura.com by no later than
12 noon (London time) on the business day following the date of this
announcement. The content of the website referred to in this announcement is
not incorporated into and does not form part of this announcement.
Rule 2.9 information
In accordance with Rule 2.9 of the Takeover Code:
As at the close of business on 2 October 2023 TMT Acquisition's issued share
capital consisted of 27,500,000 ordinary shares of 4 pence each (and TMT
Acquisition does not hold any shares in treasury). The International
Securities Identification Number for TMT Acquisition Shares is GB00BN7DKC44.
As at the close of business on 2 October 2023 Belluscura's issued share
capital consisted of 135,670,067 ordinary shares of 1 penny each (and
Belluscura does not hold any shares in treasury). The International Securities
Identification Number for Belluscura Shares is GB00BD3B8Z11.
Additional Information
This announcement is not intended to, and does not, constitute or form part of
any offer, invitation or the solicitation of an offer to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of, any securities, or the
solicitation of any vote or approval in any jurisdiction, pursuant to this
announcement or otherwise. Any offer, if made, will be made solely by certain
offer documentation which will contain the full terms and conditions of any
offer, including details of how it may be accepted. The distribution of this
announcement in jurisdictions other than the United Kingdom and the
availability of any offer to shareholders of TMT Acquisition who are not
resident in the United Kingdom may be affected by the laws of relevant
jurisdictions. Therefore, any persons who are subject to the laws of any
jurisdiction other than the United Kingdom or shareholders of TMT Acquisition
who are not resident in the United Kingdom will need to inform themselves
about, and observe any applicable requirements.
Forward looking statements
This document contains "forward-looking statements". These statements are
based on the current expectations of the management of Belluscura and/or TMT
Acquisition and are naturally subject to uncertainty and changes in
circumstances. The forward-looking statements contained in this document
include statements relating to the expected effects of the Offer on TMT
Acquisition and/or Belluscura, the expected timing and scope of the Possible
Offer, and other statements other than historical facts. Forward-looking
statements include statements typically containing words such as "will",
"may", "should", "believe", "intends", "expects", "anticipates", "targets",
"estimates" and words of similar import. Although TMT Acquisition and/or
Belluscura believes that the expectations reflected in such forward-looking
statements are reasonable, TMT Acquisition and/or Belluscura can give no
assurance that such expectations will prove to be correct. By their nature,
forward-looking statements involve risk and uncertainty because they relate to
events and depend on circumstances that will occur in the future. There are a
number of factors that could cause actual results and developments to differ
materially from those expressed or implied by such forward looking statements.
These factors include: local and global political, business and economic
conditions, including changes in the financial markets; significant price
discounting by competitors; changes in consumer habits and preferences;
foreign exchange rate fluctuations and interest rate fluctuations (including
those from any potential credit rating decline); legal or regulatory
developments and changes; the outcome of any litigation; the impact of any
acquisitions or similar transactions; competitive product and pricing
pressures; success of business and operating initiatives; changes in the level
of capital investment; market related risks and developments pertaining to the
industry in which TMT Acquisition operates; the impact of external events,
such as pandemics or natural disasters, including the ongoing impact of
COVID-19 and changes to current expectations as to the rate of economic
recovery therefrom; and the impact of a cyber security breach. Other unknown
or unpredictable factors could cause actual results to differ materially from
those in the forward-looking statements. Given these risks and uncertainties,
investors should not place undue reliance on forward-looking statements as a
prediction of actual results. Neither TMT Acquisition and/or Belluscura nor
any of its affiliated companies undertakes any obligation to update or revise
forward-looking statements, whether as a result of new information, future
events or otherwise, except to the extent legally required.
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