Elektron Technology Share News (EKT)

required to make a mandatory cash offer for the entire issued and to be issued share capital of Hartest at a price of 90 pence per Hartest Share being the highest price paid by the Offeror for Hartest Shares in the previous 12 month period. The Offer is unconditional as to acceptances in all respects. 2. The Placing The Company is pleased to announce that it has placed 15,525,000 new ordinary shares of 5 pence each in Elektron (the "Placing Shares") at 20 pence per share (the "Placing Price") to raise GBP3,105,000 before expenses (the "Placing"). The Placing Shares have been placed by finnCap, as agent to the Company, with a number of institutional investors. The net proceeds of the Placing are being used by Elektron, together with existing cash resources and facilities arranged with the Company's bank, to finance the acquisition of the Hartest Shares that Elektron does not already own, details of which are set out above and below. Application has been made for 15,525,000 new ordinary shares of 5 pence each in Elektron to be admitted to trading on AIM ("Admission"). The new ordinary shares will rank pari passu with the Company's existing ordinary shares and Admission is expected to become effective on 2 August 2010. Certain of the Company's directors are participating in the Placing and will subscribe for Placing Shares worth, in aggregate, GBP500,000. Keith Daley, the Company's chairman, is subscribing for a total of 2,375,000 Placing Shares at a total price of GBP475,000. Christopher Leigh, the Company's finance director, is subscribing through his SIPP for 125,000 Placing Shares at a total price of GBP25,000. Following the Placing the directors named above will hold the following Shares in the Company: +------------+-----------+-----------+-----------+ | Director | Number of | Total | % of | | | Placing | shares | enlarged | | | Shares | held in | issued | | | Acquired | the | share | | | | Company | capital | | | | following | | | | | the | | | | | Placing | | +------------+-----------+-----------+-----------+ | Keith | 2,375,000 | 8,076,088 | 7.8% | | Daley | | | | +------------+-----------+-----------+-----------+ | Christoper | 125,000 | 213,683 | 0.2% | | Leigh* | | | | +------------+-----------+-----------+-----------+ *Christopher Leigh's shares are being acquired by his SIPP for his benefit. Following Admission, the Company will have 103,638,905 Ordinary Shares in issue with each share carrying the right to one vote. There are no shares held in Treasury. The total number of voting rights in Elektron will therefore be 103,638,905. The above figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, Elektron, under the Disclosure and Transparency Rules. 3. Terms of the Offer The Offer, which will be made on the terms set out below, and subject to the further terms and conditions to be set out in the Offer Document and (in the case of Hartest Shares held in certificated form) in the Form of Acceptance, will be made on the following basis: For each Hartest Share - 90 pence in cash The Offer values the existing issued share capital of 8,605,289 Hartest Shares at approximately GBP7.7 million and values the entire issued and to be issued share capital of Hartest at approximately GBP8.2 million. The Offer Price represents: * a premium of approximately 5.3 per cent. to the Closing Price of 85.5 pence per Hartest Share on 29 July 2010 (being the last Business Day prior to the date of this Announcement); and * a premium of approximately 14.2 per cent. to the average Closing Price of 78.8 pence per Hartest Share over the last 60 Business Days up to and including 29 July 2010. The Offer extends to all Hartest Shares not already owned or controlled by the Offeror which are unconditionally allotted or issued and fully paid on the date of the Offer (save for those Hartest Shares held by Overseas Shareholders). The Offer also extends to any Hartest Shares not already owned by the Offeror which are unconditionally allotted or issued and fully paid while the Offer remains open for acceptance. The Hartest Shares will be acquired pursuant to the Offer fully paid free from all liens, charges, equitable interests and encumbrances and together with all rights now and hereafter attaching thereto including voting rights and the right to receive and retain all dividends and other distributions (if any) declared, made or paid hereafter. Elektron reserves the right to acquire Hartest Shares in the market at or below the Offer Price. 4. Background to and reasons for the Offer The Offeror believes that the acquisition of Hartest is likely to complement Elektron's innovation and growth model and the larger combined entity is expected to be more attractive to a wider range of investors. Elektron expects to benefit from Hartest's established presence in India and Hartest's business will benefit from Elektron's existing global presence. As a result of the Acquisition, Elektron now holds a majority of the Hartest Shares and, subject to the passing of any necessary shareholders resolutions by Hartest Shareholders, will seek to appoint a majority of nominees to Hartest's Board and may make other changes at board level. Elektron intends to carry out a strategic review of Hartest's business and operations to be completed as soon as possible, which may result in the consolidation of Hartest's business within Elektron's group. The Offeror will therefore be seeking a dialogue with the Board of Hartest and its advisers at the earliest opportunity to discuss the future structure of the Board of Hartest and to facilitate this strategic review. 5. Information on Hartest Hartest is listed on AIM. For the year ended 31 March 2010, Hartest reported revenue of GBP22.2 million (year ended 31 March 2009 GBP20.7 million) and its profit before taxation was GBP1 million (year ended 31 March 2009: loss before tax of GBP865,000). It reported shareholders' funds of GBP8.7 million (year ended 31 March 2009: GBP8.1 million). Hartest's principal activity is the manufacture, sale, distribution, testing and supply of precision instrumentation and medical equipment. 6. Information on Elektron The Offeror designs and manufactures engineered products for industrial users and the distribution market. It operates worldwide and employs approximately 1,200 people in five countries. The Offeror's group is divided into two divisions formed from nine operating units. The Offeror's strategy focuses on five key areas of acquisitions, expansion, innovation, offshoring, and fostering talent. 7. Management, employees and location The Offeror anticipates that the existing employment rights and terms and conditions of employment, including pension obligations, of all management and employees of the Offeree are likely to be maintained by the Offeror following completion of the Offer, subject to the strategic review described in Paragraph 4. The Offeror will determine whether any changes in the conditions or location of employment of Hartest employees, or any redeployment of any of Hartest's fixed assets, are required following completion of the strategic review described in Paragraph 4. 8. Financing of the Offer The cash consideration payable by the Offeror under the terms of the Offer will be funded from the Placing Proceeds, the Offeror's existing cash resources and from committed debt financing for the Offer to be provided by HSBC Bank Plc pursuant to a Facility Agreement entered into by the Offeror on 29 July 2010. finnCap (in its capacity as the Offeror's financial adviser) has confirmed that it is satisfied that sufficient resources are available to the Offeror to enable it to satisfy full acceptance of the Offer. 9. Hartest Share Schemes The Offer will extend to all Hartest Shares which are unconditionally allotted or issued pursuant to the exercise of options under the Hartest Share Schemes after the date of this Announcement and before the time at which the Offer ceases to be open for acceptance (or before such earlier date as the Offeror may in accordance with the terms and conditions of the Offer and subject to the Code, decide). Appropriate proposals will be made in due course to participants in the Hartest Share Schemes in connection with the Offer. 10. Disclosure of interests in Hartest Following the Acquisition and as at the date of this Announcement, the Offeror is interested in 4,570,031 Hartest Shares representing approximately 53.1 per cent. of the issued share capital of Hartest. Other than for the above interests in Hartest Shares, neither the Offeror nor, so far as the Offeror is aware, any person acting in concert with the Offeror, owns or controls or has any interests in any Hartest Shares (including pursuant to any long exposure, whether conditional or absolute, to changes in the prices of securities) or has any rights to subscribe for or purchase or any option to acquire or any obligation to take delivery of any Hartest Shares or has entered into any derivatives referenced to Hartest Shares or which result in that person holding a long position in securities related to Hartest Shares ("Relevant (MORE TO FOLLOW) Dow Jones Newswires July 30, 2010 03:37 ET (07:37 GMT)