Agronomics Regulatory News (ANIC)

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

19 June 2020

Agronomics Limited

("Agronomics" or the "Company")

Shareholder Consultation regarding a De-Listing from AIM

Potential Tender Offer

The Board of Agronomics confirms today that, having carefully reviewed different funding options, it has initiated a consultation process with shareholders of the Company ("Shareholders") regarding a possible de-listing of the Company from the AIM Market. The Board believes the de-listing from AIM ("De-Listing") together with a tender offer (together the "Proposals"), would be in the best interests of the Company and Shareholders for the following reasons:

a) the Directors believe that in current and foreseeable market conditions, the Company, as an investor in early-stage pre-revenue companies, does not expect to be able to secure the level of funding on public equity markets required to pursue its investment strategy to maximum effect;

b) the nature of the Company's investment policy means that the majority of investee companies will continue to be pre-revenue/loss-making companies which will need additional capital from their Shareholders to realise their plans;

c) if the Company is unable to access significant amounts of capital, it will not have the funds to participate in further investment opportunities which are now available (both for new and for follow-on investments within the existing portfolio) and may, therefore, miss out on the potential returns to Shareholders from its early-mover and market leading position;

d) the Directors believe that the Company, as a private company, will be able to access substantial equity capital from investors specialising in private market investment; and

e) the Board believes Shareholders will support the Proposals and the Board's conclusion that the implementation of the Proposals is the best way to preserve Shareholder value in what continue to be difficult markets.

Under AIM Rule 41 the De-Listing would be conditional on 75% of Shareholders voting to support a resolution to delist. Prior to convening any such general meeting, the Company has initiated a 14-day consultation process to establish the level of Shareholder support for the Proposals (the "Shareholder Consultation").

Tender Offer

The Board believes that it is important, considering that minority Shareholders may not either wish (or indeed be able) to hold shares in a private company, that the Company makes a tender offer (the "Tender Offer") to Shareholders to provide a partial or full cash exit prior to any proposed cancellation of its AIM listing. The intention is that the Tender Offer will be priced at six pence (£0.06) per ordinary share (the "Tender Price"), with the amount of cash available under the Tender Offer to be determined following consultation with Shareholders.

To fund the Tender Offer, the Company intends to raise funds from parties interested in supporting Agronomics as a private company, and in this context has received a non-binding commitment letter from Galloway Limited (a company beneficially owned by Mr Jim Mellon) to invest up to £1.0 million (depending on levels of third party participation) in an equity placing of up to £3.0 million, at a price per ordinary share of six pence (£0.06) (the "Equity Placing") and up to £2.0 million in a nil-interest convertible debt placing with a conversion price of six pence (£0.06) (the "CLN Placing"). The Board anticipate that other parties will also participate in the Equity Placing and/or the CLN Placing such that the Company has sufficient funds with which to execute the Tender Offer and, as such, the total cash resources from which the Company could execute the Tender Offer are not presently known.

The Equity Placing and the CLN Placing, and completion of the Tender Offer, would be conditional on Shareholders approving the De-Listing.

The Equity Placing price and CLN Placing conversion price is at a premium to the current net asset value ("NAV") per share reported by the Company as at 31 March 2020 of 5.53 pence and at a discount to the mid-market price of the Company's shares on AIM as at close of business on 18 June 2020 of 6.75 pence per share.

Shareholder Consultation

The Company's intention is to procure undertakings from certain Shareholders not to accept the Tender Offer, and to consult with other Shareholders on whether they wish to hold shares in Agronomics as a private company, and on the proportion of their shares that they would wish to sell under the Tender Offer. These discussions will be used to assess Shareholder support for the Proposals and, therefore, determine whether to proceed with the De-Listing, and, if so, the size of the Tender Offer.

Following the Shareholder Consultation, if the Company does not have sufficient Shareholder support for the requisite resolutions relating to the Proposals to be passed at a general meeting, or is unable to satisfy the anticipated demand for the Tender Offer such that sufficient shareholder support for the Proposals can be achieved, the Company will not proceed with the Proposals.

The Shareholder Consultation is expected to close on 3 July 2020 and the Company will make a further update regarding the Proposals in the week commencing 6 July 2020.

Participation of Galloway Limited, beneficially owned by Mr Jim Mellon, a Non-Executive Director of the Company and its largest Shareholder (holding 65,142,909 ordinary shares representing approximately 19.64 per cent. of issued shares) with Mr Denham Eke, CFO of the Company and a Director of Galloway Limited, in the Equity Placing and the CLN Placing would constitute a Related Party Transaction under the AIM Rules and this will be considered by the independent Directors at the appropriate time.

Richard Reed, Non-Executive Chairman, Agronomics Limited commented:

"The Board believes a significant majority of shareholders will support the Proposals. It is however aware that, if the Proposed De-Listing goes ahead, it needs to consider the best interests of all shareholders, which is why the tender offer is intended to ensure minority shareholders who do not wish to remain as shareholders in a private investment company would have an opportunity to sell some or all of their shares. The announcement today allows the Company to gauge the position of its shareholder base so that, if it proceeds, the tender offer can be structured accordingly."

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Important Notices

This announcement contains 'forward-looking statements' concerning the Company that are subject to risks and uncertainties. Generally, the words 'will', 'may', 'should', 'continue', 'believes', 'targets', 'plans', 'expects', 'aims', 'intends', 'anticipates' or similar expressions or negatives thereof identify forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond the Company's ability to control or estimate precisely. The Company cannot give any assurance that such forward-looking statements will prove to have been correct. The reader is cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this announcement. The Company does not undertake any obligation to update or revise publicly any of the forward-looking statements set out herein, whether as a result of new information, future events or otherwise, except to the extent legally required.

Nothing contained herein shall be deemed to be a forecast, projection or estimate of the future financial performance of the Company or any other person.

The price of shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares. Past performance is no guide to future performance and persons who require advice should consult an independent financial adviser.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, except pursuant to an exemption from registration. No public offering of securities is being made in the United States.

The distribution of this announcement may be restricted by law. No action has been taken by the Company, Zeus Capital Limited, Peterhouse Corporate Finance Limited or Beaumont Cornish Limited that would permit distribution of this announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by the Company, Zeus Capital Limited, Peterhouse Corporate Finance Limited and Beaumont Cornish Limited to inform themselves about, and to observe, any such restrictions.

This announcement is not for release, publication or distribution, in whole or in part, directly or indirectly, in or into Australia, Canada, Japan or the Republic of South Africa or any jurisdiction into which the publication or distribution would be unlawful. This announcement is for information purposes only and does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire shares in the capital of the Company in the United States, Australia, Canada, the Republic of South Africa or Japan or any jurisdiction in which such offer or solicitation would be unlawful or require preparation of any prospectus or other offer documentation or would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction.

This announcement has been issued by, and is the sole responsibility of, the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Zeus Capital Limited, Peterhouse Corporate Finance Limited or Beaumont Cornish Limited or by any of their respective affiliates or agents as to or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

THE CONTENT OF THIS ANNOUNCEMENT HAS NOT BEEN APPROVED BY AN AUTHORISED PERSON WITHIN THE MEANING OF THE FINANCIAL SERVICES AND MARKETS ACT 2000. RELIANCE ON THIS ANNOUNCEMENT FOR THE PURPOSE OF ENGAGING IN ANY INVESTMENT ACTIVITY MAY EXPOSE AN INDIVIDUAL TO A SIGNIFICANT RISK OF LOSING ALL OF THE PROPERTY OR OTHER ASSETS INVESTED.