Xenova Group Plc announces Offer by Celtic Pharma Part I
Friday June 24, 2:01 am ET
Berks, UK--(MARKET WIRE)--Jun 24, 2005 --
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR
INTO CANADA, AUSTRALIA OR JAPAN
FOR IMMEDIATE RELEASE
24 June 2005
OFFER FOR XENOVA GROUP PLC
Celtic Pharma Development UK Plc
Recommended Proposal to acquire Xenova Group Plc
Summary
The Directors of Xenova and the Board of Celtic Pharma announce that they have reached agreement on the terms of a recommended offer, to be implemented by way of a scheme of arrangement under Section 425 of the Act, under which Celtic Pharma will acquire the entire issued and to be issued share capital of Xenova. The Scheme is expected to become effective in August 2005. Xenova Securityholders (other than certain Restricted Overseas Persons) will be able to elect from one of three choices:
Recommended Proposal Offer Per 10 Xenova Shares or 1
Xenova ADS
Secured Loan Note Offer US$1.10 nominal of Secured Loan
Notes
Cash and Secured Loan Note US$0.50 nominal of Secured Loan
Alternative Notes
and 30 pence in cash
Cash Alternative 45 pence in cash
The table below sets out the value of the recommended Proposal per 10 Xenova Shares or 1 Xenova ADS:
Recommended Proposal Equivalent value in Total current value
pence(1) in pence
Secured Loan Note Offer 60.44 47.14 to 53.19(2)
Cash and Secured Loan Note 57.47 51.43 to 54.18(2)
Alternative
Cash Alternative 45.00 45.00
(1) Equivalent value is based on the nominal value of the Secured Loan Notes and an exchange rate of GBP1/US$1.82. (2) Based on Broadview's valuation of the Secured Loan Notes of between 78 per cent. and 88 per cent. of nominal value.
Based on the nominal value of the Secured Loan Notes and assuming an exchange rate of GBP1/US$1.82:
- The Secured Loan Note Offer values the existing issued share capital of Xenova at approximately GBP26.1 million (US$47.5 million) and each Xenova Share at approximately 6.044 pence (US11 cents, equivalent to US110 cents per ADS) and represents a premium of 56 per cent. to the Closing Price of 3.875 pence per Xenova Share on 23 June 2005, the last trading day immediately prior to this announcement.
- The Cash and Secured Loan Note Alternative values the existing issued share capital of Xenova at approximately GBP24.8 million (US$45.1 million) and each Xenova Share at approximately 5.75 pence (US 10.5 cents, equivalent to US 105 cents per ADS) and represents a premium of 48 per cent. to the Closing Price of 3.875 pence per Xenova Share on 23 June 2005, the last trading day immediately prior to this announcement.
- The Cash Alternative values the existing issued share capital of Xenova at approximately GBP19.4 million (US$35.3 million) and each Xenova Share at 4.5 pence (US 8.2 cents, equivalent to US 82 cents per ADS) and represents a premium of 16 per cent. to the Closing Price of 3.875 pence per Xenova Share on 23 June 2005, the last trading day immediately prior to this announcement.
Xenova and Celtic X Licensee (a member of the Celtic Pharma Group) have also concluded an exclusive worldwide licence agreement in respect of Xenova's nicotine and cocaine vaccines for the treatment of drug addiction, TA-NIC and TA-CD. Separately, Celtic X Licensee has agreed to make available to Xenova a secured loan facility of up to $20 million to provide working capital for Xenova. Neither the Licence Agreement nor the facility is conditional upon the Scheme becoming effective. The Secured Loan Notes will be secured on the Licence Agreement and the rights of Celtic X Licensee under the Licence Agreement.
The Directors, who have been so advised by Lazard, have not taken a position as to the relative merits of the Secured Loan Note Offer, the Cash and Secured Loan Alternative and the Cash Alternative. However, the Directors, who have been so advised by Lazard, do believe the terms of the Cash Alternative to be fair and reasonable. In providing advice to the Directors, Lazard has taken into account the Directors' commercial assessments. Accordingly, the Directors unanimously recommend that Xenova Shareholders vote in favour of the Resolutions as they have irrevocably undertaken to do in respect of their own holdings of Scheme Shares.
The Directors of Xenova who hold Xenova Scheme Shares (being all of the Xenova Directors save for Dr Michael Young) have irrevocably undertaken to vote in favour of the Proposals in respect of their aggregate beneficial holdings of 1,204,230 Scheme Shares, representing approximately 0.279 per cent. of the issued share capital of Xenova. John Jackson, David Oxlade, Daniel Abrams and John Waterfall have informed Celtic Pharma that they will elect to receive either the Secured Loan Note Offer or the Cash and Secured Loan Note Alternative.
The Scheme will require approval of holders of Xenova Shareholders at a Court Meeting and at an Extraordinary General Meeting. The resolution to be proposed at the Extraordinary General Meeting will be to approve the Scheme and other related matters, including, inter alia, the reduction of Xenova's share capital and amendments to the Xenova Articles required to implement the Scheme. If the Scheme becomes effective it will be binding on all holders of Scheme Shares, including any holders who did not vote to approve the Scheme.
Commenting on the Proposal on behalf of the Directors of Xenova, David Oxlade, Chief Executive Officer, said:
"We believe that this offer is in the best interests of our shareholders. It is structured to provide shareholders with a choice between cash or securities with a continued participation in the future commercialisation of Xenova products. Xenova's maturing portfolio of attractive clinical programmes will require significant funding to bring them to commercialisation, which Celtic Pharma is in a position to provide. In the context of the current financing environment for biotechnology companies, this is the right solution for all Xenova stakeholders, including the patients who stand to benefit in the future from our products."... |
