Avacta Group Regulatory News (AVCT)

14 Jul 2006 12:00

Readybuy PLC14 July 2006 Readybuy plc Proposed acquisition of Avacta Limited Proposed Placing of 45,000,000 new ordinary shares of 0.1p each in the Company at 2.25p per share Approval of waiver of the obligation to make a mandatory offer under Rule 9 of the City Code on Takeovers and Mergers Admission of the Enlarged Share Capital to trading on AIM Change of name to Avacta Group plc Notice of Extraordinary General Meeting Readybuy plc, announces that it has conditionally agreed to acquire the entireissued share capital of Avacta Limited, a biophysics company which is developingproprietary technologies for the rapid detection and identification ofbiological and chemical hazards aimed at customers in homeland security anddefence. The technologies will also be applied to the biopharmaceutical andclinical diagnostics markets. The consideration for the acquisition is the issue of 500,000,000 new OrdinaryShares. Following completion of the Proposals, the Vendors will holdapproximately 74.88% of the Enlarged Share Capital of the Company. The Company also proposes to raise £1,012,500 (before expenses) by means of aplacing of 45,000,000 new Ordinary Shares at 2.25p per share. These funds willbe used to finance the development of Avacta and provide additional workingcapital for the Enlarged Group. It is proposed that, on Admission, Professor Alastair Smith will be appointed asthe Chief Executive of the Enlarged Group and Daron Lee will resign as aDirector. Dr. Simon Webster (Chief Scientific Officer of Avacta), Dr. KurtBaldwin (Chief Technology Officer of Avacta) and Tim Sykes (Chief FinancialOfficer of Avacta) will join the board as executive directors. Dr. GwynHumphreys will become non-executive Chairman, and Professor Tony Robards andAlan Aubrey will join the Board as non-executive directors. The acquisition of Avacta is classified as a reverse takeover under the AIMRules by virtue of its size and is conditional, inter alia, on the approval ofReadybuy shareholders which is being sought at an Extraordinary General Meetingto be held on 7 August 2006. The Company is seeking shareholder approval at the EGM for a waiver of theobligation under Rule 9 of the City Code which would otherwise require themembers of the New Concert Party (comprising the Vendors) to make a generaloffer to shareholders of the Company. Application will be made for the new Ordinary Shares to be admitted to tradingon AIM. It is expected that trading in the First Admission Shares will commenceon AIM on 8 August 2006 and that trading in the Supplemental ConsiderationShares will commence on AIM on 9 August 2006. An admission document setting out details of the Proposals and including noticeof the EGM will be posted to shareholders today. Further copies will beavailable to the public, free of charge, from the offices of WH Ireland, 11 St.James's Square, Manchester M2 6WH. Professor Alastair Smith, Non Executive Director of Readybuy and Chief Executiveof Avacta Limited, commented: "I am delighted with this new development which breathes new life into Readybuyand presents a substantial opportunity for its shareholders. "Avacta's strength is its ability to harness the versatility and specificity ofbiology using cutting edge physics and technology to provide high valuesolutions to generic problems faced by a number of sectors. "Our focus is on the defence, security and biopharmaceutical markets and we areworking closely with the Government and a large biopharma company. "We anticipate strong newsflow over the coming months and look forward to thenext phase of our corporate evolution." 14 July 2006 Enquiries: Readybuy plc Tel: 0870 835 4367 Prof. Alastair Smith, non-executive director WH Ireland Limited Tel: 0161 832 2174/6644 David Youngman Nexus Financial Ltd 020 7451 7050 Nicholas Nelson Nicholas.nelson@nexusgroup.co.uk Introduction The Company announces that it has agreed, subject, inter alia, to ExistingShareholder approval, to acquire the entire issued and to be issued sharecapital of Avacta in consideration of the issue of 500,000,000 new OrdinaryShares. The Company also proposes to raise £1,012,500 (before expenses) by means of aplacing of 45,000,000 new Ordinary Shares at 2.25p per share. These funds willbe used to finance the development of Avacta and provide additional workingcapital for the Enlarged Group. By reason of the size of Avacta in relation to Readybuy, the Acquisition isclassified as a reverse takeover under the AIM Rules and therefore, requires theapproval of existing shareholders in general meeting. To complete theAcquisition and implement the Placing, it will also be necessary to give theDirectors the required powers and authorities to allot the New Ordinary Shares.In view of the significance of the Acquisition, the Directors also propose tochange the name of the Company to Avacta Group plc. Background to and reasons for the acquisition As previously reported, the Readybuy Group's trading activities were terminatedin July 2005, since which time the directors of Readybuy have been exploring thefuture options available to the Company. On 11 April 2006, the Company announced an issue of new Ordinary Shares to raise£262,500 before expenses and the grant of warrants to subscribe for additionalOrdinary Shares in order to provide additional working capital and to enable theCompany to pursue its investing strategy. This strategy, which was approved atan extraordinary general meeting of the Company held on 5 May 2006, is toacquire a company involved in developing enabling technologies, particularly inthe defence and bio-chemistry sectors. The Board believes that the proposedacquisition of Avacta meets this investment strategy. Information on Avacta Introduction Avacta was spun-out from the University of Leeds in January 2004 by its currentmanagement team as a biophysics company, with the aim of combining thedisciplines of physics and biology to develop innovative technologies to addressneeds in the homeland security, pharmaceutical and clinical diagnostics markets.The goal of Avacta is to integrate the best elements of each discipline intotechnologies suitable to address specific identified needs in the targetedmarkets. In seeking to achieve this goal Avacta intends to combine its in-houseexpertise in laser spectroscopy, nanotechnology and instrumentation engineeringwith its understanding of the versatility and specificity of biology. Avacta has two core activities: • the development of detection technology platforms designed to meet the needs of its target markets • the provision of analytical services relating to the chemical and physical analysis of materials to a range of companies, principally in the pharmaceutical, healthcare and personal care sectors. These activities are complementary; the provision of analytical services toclients in the target markets enables Avacta to identify needs for newtechnological solutions which could be addressed by the technology platformsthat Avacta is developing. In addition, the directors of Avacta believe that therelationships that Avacta develops with its clients through the provision ofanalytical services facilitates the formation of co-development partnerships andshould also result in earlier market acceptance of new technology developed byAvacta. The technology development activities are carried out through Avacta and the.analytical services are carried out by Avacta's wholly-owned subsidiary, AvactaAnalytical. Avacta has been primarily funded through its early stage development by equityinvestment by Techtran and IP Group, income from analytical services and a grantfrom a regional development organisation. In addition, Avacta has receivedresearch and development funding from the MOD as part of a co-developmentproject. Avacta is currently in advanced discussions with the UK governmentwith regard to a co-development project and with UCB's Celltech Antibody Centreof Excellence in relation to a collaboration funded by the Department of Tradeand Industry. Avacta is also in early stage discussions with a number of otherorganisations in respect of the formation of additional co-development projects. Avacta operates from offices and laboratories at the York Biocentre, part of theYork Science Park, and has 10 employees. Detection technology platforms Avacta is currently developing two detection technology platforms. These are: The spectraTECH platform - a set of technologies using laser spectroscopy forchemical and biological analysis/detection. The directors of Avacta haveidentified three potential commercial applications for this technology platform: • Remote hazard detection: this application is being developed toprovide molecular ''fingerprints'' in a moving field of view. The application isintended to be vehicle mounted and is being primarily designed to detectchemicals, including weapons material, at distances of up to 20 metres. Theapplication is in co-development with the MOD and laboratory trials of theproof-of-principle prototype device are currently under way; • Short stand off detection: this application is intended to overcomethe problems of using Raman spectroscopy outside the laboratory in practicalsituations where dirt and background signals often yield this potentiallypowerful detection technique of little use. The objective is to design ahand-held detection system capable of rapid characterisation of suspectedhazardous materials at distances of up to one metre. The application iscurrently being developed internally; and • Biopharmaceutical materials characterisation: the directors of Avactabelieve that the spectraTECH platform could be applied to take measurements ofprotein therapeutics at an early stage of a drug development pipeline in orderto predict their biophysical properties with a view to identifying some of therisks of later stage failure of the candidate drug. Avacta has received an orderfrom the Department of Trade and Industry to carry out a research anddevelopment project in collaboration with UCB's Celltech Antibody Centre ofExcellence. Avacta is preparing two UK patent applications in respect of the spectraTECHplatform. The nanoSCREEN platform - a set of technologies being developed with the aim ofproducing instrumentation and associated consumables that will be capable of usein the rapid detection of pathogens, toxins and biomarkers. The directors ofAvacta have identified two applications that they believe could be developedusing this technology platform: • Multi-analyte detection for homeland security and public healthprotection applications - Avacta is in separate discussions with the Home Officeand a US company to co-develop products for specific applications in this area; • Clinical diagnostics - Avacta is working with clinical scientistsbased at the University of Leeds to develop a rapid, non-invasive diagnosticproduct and is in the early stages of discussions with two private UK companiesregarding clinical applications. Avacta has submitted two patent applications in respect of the nanoSCREENplatform. Avacta's two technology platforms are based upon multiple differenttechnologies for which Avacta is now finding applications in a range of markets.The directors of Avacta therefore believe that Avacta is not reliant on a singletechnology or a single market. Analytical Services Avacta Analytical specialises in the provision of spectroscopy, microscopy,surface analysis and biophysics services. It provides these services to adiverse client base which includes companies in the biopharmaceutical,pharmaceutical and health/personal-care sectors. The directors of Avacta believethat it is possible to expand the client base in all these sectors, especiallythe biopharmaceutical sector. Avacta Analytical has developed a packaged service for the biopharmaceuticalindustry (the ''Biophysical Toolkit'') which can be used to characterise theproperties of protein molecules that are critical to their performance asbiopharmaceuticals. Technology Markets The directors of Avacta have identified the defence and homeland security,biopharmaceutical and clinical diagnostics markets as its principal markets ofopportunity for its detection technologies. Defence, homeland security and public health Following the increasing prevalence of international terrorism in recent years,homeland security has become a high priority to many governments. The potentialthreat posed to public health by diseases such as SARS and pandemic flu is alsoa concern within this market. Avacta is developing technologies to help combatthese threats. Avacta is focusing on the development of innovative technologiesfor the detection and characterisation of biological and chemical threats toindividuals and society arising from terrorist attack or natural in origin. Itis important that any such threats are detected and identified at the earliestopportunity in order that the correct action may be taken to contain andneutralise the threat. The directors of Avacta believe that this requires atechnology that is capable of rapidly detecting multiple different toxins and/orpathogens ideally with low false positive/negative rates, that is rugged andportable, capable of sampling air, liquid or solid surfaces and which may needto be capable of being used at a safe distance. Biopharmaceutical There are a number of challenges facing this sector which the directors ofAvacta believe, with its strong background in biophysics, Avacta is wellqualified to address. By way of example, the directors of Avacta believe that the early stage leadselection techniques employed by most biopharmaceutical companies in drugdevelopment do not adequately predict many aspects of product performance duringmanufacture, storage or delivery. Avacta is seeking to develop a new technologywhich would follow current early stage lead selection and provide a greaterpredictive capability with a view to reducing the failure of proteintherapeutics in their later stages of development. Clinical diagnosis The directors of Avacta believe that there is a current and growing requirementfor rapid analytical/ detection technologies for clinical diagnostic andpersonalised medicine applications. In the longer term the technologies whichAvacta is currently developing should be well suited to meet these requirementsas they are being designed to rapidly detect pathogens, toxins and biomarkers aswell as being portable and robust. Over the short term, Avacta will develop theclinical diagnostics applications of its technologies in a market driven mannerthrough existing collaborations with clinicians in Leeds University and throughcommercial partnerships. The directors of Avacta believe that, although each of the three marketstargeted by Avacta is dominated by a number of large companies, there areopportunities for smaller companies which have proprietary technologies meetingidentified needs in these markets. Summarised financial information The following financial information on Avacta has been extracted withoutmaterial adjustment from the historical financial information on Avacta for theperiod to 31 July 2004, the year ended 31 July 2005 and the eight months ended31 March 2006 set out in the Admission Document. 26 January 2004 to Year ended 1 August 2005 31 July 2004 31 July 2005 to 31 March 2006 £ £ £Turnover 24,427 68,412 158,811 Operating profit/(loss) 19,322 (23,065) (75,005) Profit/(loss) on ordinary activities 19,359 (22,113) (67,995)before tax Strategy The Continuing Directors intend to utilise the net proceeds of the Placing to: • further the development of the detection technology platforms to proof of concept stage; • finance the protection of Avacta's intellectual property; • finance the development of Avacta's analytical services business by funding marketing and promotional activity: • demonstrate the advantages of Avacta's technology to support potential additional fund raising in due course. The Continuing Directors anticipate that additional funding will be required todevelop products for which proof of concept is established to enable them to bebrought to market. Information on Readybuy The Company was incorporated in 2003 and its issued share capital was admittedto trading on AIM in September of that year. As a result of losses suffered inthe Readybuy Group's principal trading activity of the manufacture and sale ofchilled foods, the decision was taken by the directors of Readybuy at the timeto cease trading in July 2005. As was reported in the annual accounts for theyear ended 30 April 2005, the directors of Readybuy have since been exploringthe future options available to the Company and how best to utilise itsremaining cash balances to provide the best return for the holders of ExistingOrdinary Shares. Dividend policy Any cash generated by the Enlarged Group's operations in the short to mediumterm will be devoted to funding the Enlarged Group's planned development.Nevertheless the directors of the Company will continue to review theappropriateness of its dividend policy as the Enlarged Group develops. However,no dividend will be able to be paid until the significant deficit on theCompany's profit and loss account is cleared. Directors, Proposed Directors and employees The directors of Readybuy as at today's date comprise Daron Lee and ProfessorAlastair Smith. It is proposed that, on First Admission, the Proposed Directorswill join the Board, Professor Smith will be appointed as the Chief Executive ofthe Enlarged Group and Daron Lee will resign as a Director. Directors Daron Lee (Aged 39) Daron Lee commenced his career with stockbrokers Ashworth Sons & Barratt in 1987before pursuing other opportunities within the family business. He then returnedto stockbroking with WH Ireland before establishing Proquote Limited (''Proquote''), a business engaged in the provision of on-line stock market dataand company information. Proquote was sold in February 2003 to the London StockExchange and he remained with Proquote as its managing director until the end of 2004. Sincethen Daron Lee has pursued a number of personal business interests and became aDirector on 7 July 2006. Professor Alastair Smith (Aged 39), Non-executive Director and Proposed ChiefExecutive following Admission Professor Smith is the chief executive and is one of the founders of Avacta. Hehas a degree and PhD in Physics from Manchester University and, after working inthe US for a period, took up a position at Leeds University in 1995. He hasspent the last 10 years developing new biophysical technologies and applyingthem to problems in structural molecular biology. At the age of 38 he wasawarded a Chair of Molecular Biophysics for this work and he also holds the Directorship of the Institute ofMolecular Biophysics at Leeds University. He co-founded Avacta in January 2004.He became a Director on 7 July 2006. Proposed Directors Dr Gwyn Humphreys (Aged 60), Non-executive Chairman Dr Humphreys was appointed chairman of Avacta in December 2005 and has extensiveexperience of technology transfer and early-stage technology companies.Originally a biochemist/molecular biologist, he spent 10 years in academicresearch, followed by 10 years at Celltech Limited where, for three years, hewas responsible for creating and managing a joint-venture company (Apcel) withAir Products. In 1995 Dr Humphreys was a founder and Managing Director ofBradford Particle Design plc which was sold in 2001 to Nektar Therapeutics Inc.He is also Chairman of Syntopix Group plc and Bioniqs Limited. Dr Simon Webster (Aged 38), Chief Scientific Officer Dr Webster received his degree in Physics and a PhD in Molecular Physics fromthe University of Leeds. He has worked as a professional consultant to industryand as an expert witness in world-wide pharmaceutical litigation since 1998 andhas carried out commercial and academic projects for multinational corporations,SMEs and government organisations to develop instrumentation and to applyanalytical techniques to solve commercial problems. He co-founded Avacta inJanuary 2004. Dr Kurt Baldwin (Aged 38), Chief Technology Officer Dr Baldwin has been working with optics and optical systems for the majority ofhis professional and academic career. He studied for a degree in Physics andTheoretical Physics at Cambridge University, an MSc in Applied Optics atImperial College, London, and a PhD in spectroscopy at the University of Leeds.He has developed optical technology such as international standards of opticalfibres at British Telecom and novel high power laser drills for the aerospaceindustry. He co-founded Avacta in January 2004. Tim Sykes (Aged 36), Chief Financial Officer Mr Sykes is a qualified Chartered Accountant and a director of Penta FinancialDirection Limited, his own business advisory practice which specialises inproviding services to small businesses. He is Chief Financial Officer ofPROACTIS Holdings PLC and Mountain Warehouse Holdings Limited. Prior to this, MrSykes was an Associate Director within KPMG's Transaction Services Group. He joined Avacta inApril 2006. Professor Tony Robards OBE (Aged 66), Non-executive Director After first and higher degrees in Biology at University College London,Professor Robards came to York in 1966 to pursue an academic career inbiological research. In 1996 he was appointed Pro-Vice-Chancellor for ExternalRelations at the University of York, a post he held for 8 years. In 2001,Professor Robards was appointed the first HSBC Chair of Innovation at theUniversity of York. His commitment to creating links between the University andexternal organisations has led to a wide range of business activities includingPast-President of the York and North Yorkshire Chamber of Commerce, JointExecutive of Science City York, Chair of York Science Park Limited andVenturefest York Limited, as well as being non-executive Chair of YorkTest GroupLimited and LG01 Limited. He was appointed a director of Avacta in December2005. Alan Aubrey (Aged 45), Non-executive Director Mr Aubrey is the Chief Executive Officer of IP Group, a listed company thatspecialises in commercialising intellectual property originating from researchintensive institutions. He is non-executive chairman of PROACTIS Holdings PLCand of Energetix Group Limited, and a non-executive director of Syntopix Groupplc. Previously Mr Aubrey was the founder and CEO of Techtran, a business thatwas sold to IP Group in 2005 and which is a significant shareholder in Avacta.He was also a partner at KPMG where he specialised in providing corporatefinance advice to fast growing technology businesses. He is a fellow of theInstitute of Chartered Accountants, holds a BA in economics from the Universityof Leeds and an MBA from the University of Bradford. Principal terms and conditions of the Acquisition The Company has conditionally agreed to acquire the entire issued and to beissued share capital of Avacta. The consideration is to be satisfied by theallotment and issue by the Company of the Consideration Shares. TheConsideration Shares will, when issued, represent 74.70% of the Enlarged ShareCapital. The Consideration Shares will be issued as fully paid and will rankpari passu in all respects with the Existing Share Capital, including the right to receive, in full, all dividendsand other distributions thereafter declared, made or paid. Initial Acquisition The share capital of Avacta in issue as at the date of this document (''AvactaIssued Shares'') is to be acquired pursuant to the Acquisition Agreement whichis conditional inter alia, upon: (a) the Resolutions being duly passed at the EGM; (b) the Placing Agreement becoming unconditional (save as to any condition relating to First Admission); and (c) First Admission occurring. The consideration for the Avacta Issued Shares is to be satisfied by theallotment and issue by the Company of 475,530,102 of the Consideration Shareswhich, when issued, will represent 71.05% of the Enlarged Share Capital. Supplemental Acquisition The options over the Avacta Option Shares which exist at the date of thisdocument (''Avacta Options'') will become exercisable on a change of control ofAvacta. Such a change of control will occur on completion of the InitialAcquisition. The holders of the Avacta Options have agreed to exercise theirAvacta Options immediately after completion of the Initial Acquisition and theCompany has agreed, conditional upon First Admission and Second Admissionoccurring, to acquire the Avacta Option Shares to be issued upon the exercise ofthe Avacta Options pursuant to the Supplemental Acquisition Agreement. The consideration for the Avacta Option Shares is to be satisfied by theallotment and issue by the Company of 24,469,898 of the Consideration Shareswhich, when issued, will represent 3.66% of the Enlarged Share Capital. It is expected that completion of the acquisition of the Avacta Option Sharesand First Admission will take place on 8 August 2006. It is expected that theexercise of the Avacta Options and the acquisition of the Avacta Option Shareswill occur immediately after First Admission. Details of the Placing The Company is proposing to raise £1,012,500 (before expenses) by the issue of45,000,000 Placing Shares pursuant to the Placing at the Placing Price. ThePlacing Shares will represent 6.72% of the Enlarged Share Capital. The Placing Shares will be issued fully paid and will, on issue, rank pari passuwith the Existing Ordinary Shares, including the right to receive, in full, alldividends and other distributions thereafter declared, made or paid. The Placing is subject, inter alia, to the satisfaction of the followingconditions on or before 8.00 a.m. on 8 August 2006 or such later time and date(being not later than 5.00 p.m. on 31 August 2006) as WH Ireland and the Companymay agree: (a) the passing of the Resolutions at the EGM; (b) the completion of the Initial Acquisition; (c) First Admission having occurred; and (d) WH Ireland not having exercised its rights in certain circumstances to terminate the Placing Further details of the Placing Agreement are set out in the Admission Document. The City Code The terms of the Acquisition give rise to certain considerations under the CityCode. The City Code is issued and administered by the Panel. The Company is subject tothe City Code and therefore its shareholders are entitled to the protectionafforded by the City Code. Under Rule 9 of the City Code, a person who acquires, whether by a series oftransactions over a period of time or not, an interest in shares which (takentogether with shares in which persons acting in concert with him are interested)carry 30% or more of the voting rights of a company which is subject to the CityCode is normally required to make a general offer in cash to all othershareholders of that company to acquire the balance of the shares not held bysuch a person (or group of persons acting in concert). In addition, Rule 9 provides that where any person, together with persons actingin concert with him, is interested in shares in a company which is subject tothe City Code and which in aggregate carry not less than 30% but not more than50% of that company's voting rights, and such person, or any person acting inconcert with him, acquires an interest in any other shares which increases thepercentage of the shares carrying voting rights in that company in which he isinterested, such person is normally required, in the same way, to make a generaloffer to all shareholders. An offer under Rule 9 must be in cash and at the highest price paid within thepreceding 12 months for any shares in the company by the person required to makethe offer or any person acting in concert with him. The Vendors are together deemed to be acting in concert for the purposes of theCity Code. After completion of the Acquisition, the New Concert Party'sinterest in shares carrying voting rights in the Company will represent, inaggregate, approximately 74.88% of the voting rights attaching to the Company'sissued ordinary share capital. The table below shows the interest of the New Concert Party assuming that theProposals are implemented and including any holdings of Existing OrdinaryShares. Name Number of Percentage of Ordinary Shares Enlarged Share Capital Techtran 174,517,228 26.07 University of Leeds 59,952,038 8.96 Professor Alastair Smith 49,217,468 7.35 Dr. Simon Webster 48,624,258 7.26 Dr. Kurt Baldwin 48,624,258 7.26 Alan Brain 36,734,822 5.49 Alan Aubrey 12,173,419 1.82 Dr. Gwyn Humphreys 11,125,836 1.66 Russell Hodgetts 9,847,912 1.47 Professor Tony Robards 8,491,102 1.27 David Norwood 7,522,403 1.12 Alison Fielding 7,522,403 1.12 Alex Stevenson 7,522,403 1.12 Richard Ian Griffiths1 7,144,718 1.07 Rodney Adams 3,253,187 0.49 Tim Sykes 2,918,718 0.44 Stephen Brookes 2,092,011 0.31 Magnus Goodlad 1,691,279 0.25 Inigo Mendieta 444,907 0.07 John Clarkson 444,907 0.07 Sergiu Masca 444,907 0.07 Tara Sabir 444,907 0.07 George Dimitriadis 444,907 0.07 501,200,000 74.88 1Richard Ian Griffiths' shareholding includes 1,200,000 Existing OrdinaryShares. He is also interested in 600,000 Existing Warrants. If the New Concert Party exercised all the share options held by them pursuantto the New Schemes (as set out in paragraph 9 of Part VIII of the AdmissionDocument) and all Existing Warrants, the New Concert Party's interest in sharescarrying voting rights in the Company would represent approximately 75.75% ofthe voting rights attaching to the Company's then enlarged share capital(assuming that only the New Concert Party would exercise their options in fullat the earliest possible date, being on the third anniversary of the date ofgrant and their Existing Warrants). On the same basis, the interests ofProfessor Alastair Smith, Dr. Simon Webster, Dr. Kurt Baldwin, Russell Hodgettsand Richard Ian Griffiths would represent approximately 8.15%, 8.06%, 8.06%,1.68% and 1.16% respectively of the voting rights attaching to the Company'sthen enlarged share capital. The Panel has agreed, subject to the passing of Resolution 1 on a poll at theEGM, to waive the obligation of the New Concert Party to make a general offerunder Rule 9 that would otherwise arise as a result of the Proposals. Shareholders should be aware that, following the Acquisition, the members of theNew Concert Party will together hold more than 50% of the voting rightsattaching to the Company's issued share capital. Accordingly, the New ConcertParty, for so long as the members of the New Concert Party continue to betreated as acting in concert, may be able to increase its aggregate shareholdingwithout incurring any further obligation under Rule 9 to make a general offer.However, individual members of the New Concert Party will not be able toincrease their percentage shareholdings through a Rule 9 threshold without Panelconsent. The members of the Existing Concert Party were deemed to be acting in concertfor the purpose of the City Code when they agreed, pursuant to an agreementdated 11 April 2006, to subscribe for new Ordinary Shares. After completion of the Proposals, the Existing Concert Party's interest inshares carrying voting rights in the Company will represent, in aggregate,approximately 19.84% of the voting rights attaching to the Company's issuedshare capital. If the members of the Existing Concert Party exercised theExisting Warrants to which they are entitled in full, the Existing ConcertParty's interest in shares carrying voting rights in the Company wouldrepresent, in aggregate, approximately 25.62% of the voting rights attaching tothe Company's issued share capital. The New Concert Party The New Concert Party comprises the Vendors. Biographies of Professor AlastairSmith, who is a member of the New Concert Party, and those members of the NewConcert Party who are Proposed Directors, are set out in paragraph 7 of Part Iof the Admission Document. Details relating to the other principal members ofthe New Concert Party are set out below: Techtran The principal activity of Techtran is the development of intellectual propertycreated by UK universities with the potential for commercial development.Techtran is a subsidiary of IP Group. Information on IP Group is set out in thedocument. Information on Techtran is set out in the document. University of Leeds The University of Leeds is both a research intensive institution and one of thelargest teaching universities in the UK. Its turnover for the year to 31 July2005 was £367 million and its asset base was £268 million on an historical costbasis. A significant by-product of the research activity is the generation ofintellectual property, which is commercialised by the University through avariety of methods including spin-off companies. There are 39 spin-off companiesin total, of which the University has a controlling interest in only four. TheUniversity owns between 20% and 50% of 16 of the spin-off companies and lessthan 20% of the balance. Alan Brain (Aged 60) Alan has 30 years' experience working in the healthcare industry particularly inmaterials testing and microscopy, where his expertise lies in developingindustrial applications of new technologies and in providing expert witnessservices. Prior to co-founding Avacta, Alan was an independent consultantspecialising in microscopy and surface analysis. He is currently an HonoraryVisiting Research Fellow in the Department of Physics at the University of York. Richard Ian Griffiths is a member of the New Concert Party and is also anExisting Shareholder and holds Existing Warrants. Intentions of the New Concert Party The Company and Oriental have ceased to trade and therefore currently do nothave any business, employees or fixed assets. Upon completion of the Proposals,it is intended that the Company will become the holding company for Avacta andAvacta Analytical. Proposed Directors' New Service Contracts Particulars of the new service contracts and letters of appointment entered intoby Professor Alastair Smith and the Proposed Directors, conditional uponAdmission, are as follows: Professor Alastair Smith has entered into a service agreement with the Companydated 13 July 2006 for an initial period of 12 months and subject to terminationupon 6 months' notice by either party to expire at the end of the initial periodor at any time thereafter. The agreement requires Professor Smith to work forfour days a week for the Company. The agreement currently provides for an annualsalary of £35,000. Under the terms of a secondment agreement with the Universityof Leeds, Avacta will pay a further £6,955 (plus VAT) per month throughout theperiod 1 August 2006 to 31 July 2007 in respect of the secondment of ProfessorSmith's services to Avacta. The University of Leeds pays 50% of the monthly feeto Professor Smith in respect of the salary paid to him by the University ofLeeds. The remaining 50% of the monthly fee covers the University of Leeds'overheads. Professor Smith's total remuneration in respect of services providedto the Company and Avacta is therefore £76,730 per annum. Dr. Simon Webster has entered into a service agreement with the Company dated 13July 2006 for an initial period of 12 months and subject to termination upon 6months' notice by either party to expire at the end of the initial period or atany time thereafter. The agreement currently provides for an annual salary of£65,000. Dr. Kurt Baldwin has entered into a service agreement with the Company dated 13July 2006 for an initial period of 12 months and subject to termination upon 6months' notice by either party to expire at the end of the initial period or atany time thereafter. The agreement currently provides for an annual salary of£65,000. In addition to the basic salary, Professor Smith, Dr. Webster and Dr. Baldwinare entitled to 25 days' paid holiday and, subject to the discretion of theRemuneration Committee, a bonus. Each of the proposed new service contracts tobe entered into by Professor Smith, Dr. Webster and Dr. Baldwin restricts theindividual from competing with the Company and/or soliciting customers for aperiod of six months from the date of service of notice to terminate employment. The services of Dr. Gwyn Humphreys as Non-executive Director are provided underthe terms of an appointment letter from the Company to him dated 13 July 2006which provides for an initial fee of £20,000 per annum, such appointment beingterminable upon three months' notice. The services of Professor Tony Robards as Non-executive Director are providedunder the terms of an appointment letter from the Company to him dated 13 July2006 which provides for an initial fee of £15,000 per annum, such appointmentbeing terminable upon three months' notice. The services of Alan Aubrey as Non-executive Director are provided under theterms of an appointment letter from the Company to him dated 13 July 2006 whichprovides for an initial fee of £15,000 per annum, such appointment beingterminable upon three months' notice. The services of Tim Sykes, via his company, Penta Financial Direction Limited (''Penta''), are provided to the Company under the terms of a consultancyagreement between the Company and Penta dated 13 July 2006 for a minimum of oneday per week at a rate of £750 per day. The provision of services is for aminimum of 12 months and thereafter can be terminated on 6 months' notice byeither party. In addition the consultancy agreement restricts each of Tim Sykesand Penta from soliciting customers and employees for a period of 12 monthsafter termination of that agreement. Extraordinary General Meeting The Acquisition is classed as a reverse takeover for the purpose of the AIMRules and is therefore conditional upon the approval of the ExistingShareholders. An Extraordinary General Meeting has been convened for 11.00 a.m.on 7 August 2006 to be held at the offices of Eversheds LLP, Eversheds House, 70Great Bridgewater Street, Manchester M1 5ES. Set out at the end of the Admission Document is a notice convening the EGM forthe purpose of considering and if thought fit approving the Resolutions to: 1. approve the waiver by the Panel for any requirement of the New Concert Partyto make a general offer pursuant to Rule 9 of the City Code; 2. approve the change in the name of Readybuy to Avacta Group plc; 3. approve the Initial Acquisition, the Supplemental Acquisition and incompliance with section 320 of the Act the acquisition, pursuant to the terms ofthe Acquisition Agreement, of ordinary shares of 0.1p each in Avacta fromProfessor Alastair Smith; 4. increase the authorised share capital of the Company; 5. authorise the Directors to allot relevant securities up to an aggregatenominal value of £700,000; 6. disapply pre-emption rights; 7. approve the adoption of the Readybuy Enterprise Management Incentive Scheme;and 8. approve the adoption of the Readybuy Unapproved Option Scheme. In accordance with the requirements of the Panel, Resolution 1 will be taken ona poll. Richard Ian Griffiths who is a member of the New Concert Party is alsoa shareholder of Readybuy and has agreed not to vote his 1,200,000 ExistingOrdinary Shares in Readybuy in respect of Resolution 1 to be proposed at theEGM. Expected Timetable of Principal Events Latest time and date for receipt of Forms of Proxy 11.00 a.m. on 5 August 2006in respect of the EGM Extraordinary General Meeting 11.00 a.m. on 7 August 2006 First Admission effective and dealings in the First 8 August 2006Admission Shares commence on AIM Second Admission effective and dealings in the 9 August 2006Supplemental Consideration Shares commence on AIM CREST stock accounts credited in respect of First 8 August 2006Admission Shares CREST stock accounts credited in respect of 9 August 2006Supplemental Consideration Shares Despatch of definitive share certificates in respect 16 August 2006of New Ordinary Shares to be held in certificated form Definitions The following definitions apply throughout this announcement, unless the contextotherwise requires: "Acquisition" the proposed acquisition by the Company of the entire issued share capital of Avacta pursuant to the Acquisition Agreement and the Supplemental Acquisition Agreement "Acquisition Agreement" the agreement dated 13 July 2006 between (1) the Initial Vendors and (2) the Company relating to the Initial Acquisition, which is conditional, inter alia, on the passing of the Resolutions at the EGM, further details of which are set out in paragraph 15 of Part VIII of the Admission Document "Act" the Companies Act 1985, as amended "Admission" the re-admission of the Existing Ordinary Shares to trading on AIM and the admission to trading on AIM of the New Ordinary Shares becoming effective in accordance with Rule 6 of the AIM Rules "Admission Document" the admission document to be issued by the Company in connection with the Proposals dated 13 July 2006 "AIM" a market operated by the London Stock Exchange "AIM Rules" the rules governing the admission to and operation of AIM published by the London Stock Exchange from time to time "Avacta" Avacta Limited 7,755 ordinary shares of 0.1p each in Avacta to be issued upon the exercise of certain options granted by Avacta to the Supplemental "Avacta Option Shares" Vendors and to be immediately sold to Readybuy pursuant to the terms of the Supplemental Acquisition Agreement "Avacta Analytical" Avacta Analytical Limited "Articles" the articles of association of the Company at the date of this document "the Board" or "the Directors" the directors of the Company, as at the date of this document, being Daron Lee and Professor Alastair Smith "Capital Reorganisation" the re-organisation of the share capital of the Company which took place on 5 May 2006, details of which are set out in the Admission Document. "City Code" the City Code on Takeovers and Mergers "Combined Code" the principles of Good Governance and Code of Best Practice maintained by the Financial Reporting Council "Company" or "Readybuy " Readybuy plc "Consideration Shares" the 500,000,000 new Ordinary Shares to be issued in accordance with the terms of the Acquisition Agreement and the Supplemental Acquisition Agreement "Continuing Directors" Professor Alastair Smith and the Proposed Directors "CREST" the relevant system (as defined in the CREST Regulations) in respect of which CRESTCo Limited is the Operator (as defined in the CREST Regulations) in accordance with which securities may be held and transferred in uncertificated form "CREST Regulations" the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755) (as amended) "Daily Official List" the daily official list of the United Kingdom Listing Authority "Deferred Shares" the 19,327,344 Deferred Shares of 0.4p each in the issued share capital of the Company "EGM" or "Extraordinary the extraordinary general meeting of the Company, convened for 11.00 a.m. on 7 August 2006, and any adjournment thereof, notice ofGeneral Meeting" which is set out at the end of the Admission Document "EIS" the Enterprise Investment Scheme as prescribed in Part VII Chapter III of the Income and Corporation Taxes Act 1988 as amended "Enlarged Group" the Company and its subsidiary undertakings immediately following Admission being Oriental, Avacta and Avacta Analytical "Enlarged Share Capital" the issued ordinary share capital of the Company immediately following Admission "Existing Scheme" the Readybuy unapproved share option scheme adopted on 26 August 2003 "Existing Concert Party" the consortium of shareholders comprising Messrs Stephen Leslie, James, Daron Ross Lee, Christopher Atur Potts, Robert Thomas Quested, Sally Claire Cooper, Richard Ian Griffiths, Stephen Twidell, Edward Roland Dawson, Elizabeth Anne Richardson, Stuart Alan Spurling, Leonard John Russell, Harvey Neil Laurence, David Hugh Richardson, Charles Henry Potts, Aubrey Calvin Meredith and Stephen James Richardson "Existing Share Capital" the issued ordinary share capital of the Company at the date of the document "Existing Shareholder" a holder of Existing Ordinary Shares "Existing Ordinary Shares" the 124,327,344 ordinary shares of 0.1p each in the capital of the Company in issue as at the date of the document "Existing Warrant Instrument" the warrant instrument dated 11 April 2006 constituting the Existing Warrants adopted by the Company at an extraordinary general meeting of the Company held on 5 May 2006 and of which further details are set out in the document "Existing Warrants" the warrants to subscribe for up to 52,500,000 Ordinary Shares issued to the Existing Concert Party and WH Ireland pursuant to the terms of the Existing Warrant Instrument "First Admission" the re-admission of the Existing Ordinary Shares to trading on AIM and the admission to trading on AIM of the New Ordinary Shares (other than the Supplemental Consideration Shares) becoming effective in accordance with Rule 6 of the AIM Rules "First Admission Shares" the Existing Ordinary Shares, the Placing Shares and the Initial Consideration Shares "Form of Proxy" the form of proxy enclosed with the Admission Document for use by holders of Existing Ordinary Shares in connection with the EGM "FSMA" the Financial Services and Markets Act 2000 (as amended) "Independent Director" Daron Lee "Independent Shareholders" those shareholders of Readybuy considered to be independent for the purposes of approving the waiver to make a mandatory offer under Rule 9 of the City Code "Initial Acquisition" the proposed acquisition by Readybuy of 150,705 ordinary shares of 0.1p each in the capital of Avacta pursuant to the Acquisition Agreement "Initial Consideration Shares" 475,530,102 new Ordinary Shares to be issued pursuant to the Acquisition Agreement "Initial Vendors" Kurt Justin Baldwin, Alan Arthur Brain, David Alastair MacLaughlin, Smith, Simon Webster, Gwynfor Owen Humphreys, Anthony William Robards, Alan Aubrey, University of Leeds, Techtran Group Limited, David Norwood, Alison Fielding, Alex Stevenson, Timothy Sykes, Stephen Brookes, Magnus Goodlad, Richard Ian Griffiths, Russell Hodgetts and Rodney Adams being the holders of the entire issued share capital of Avacta at the date of this document "Locked in Shares" Ordinary Shares registered in the respective names of or beneficially held by the Vendors immediately following First Admission (in the case of the Initial Vendors) and immediately following Second Admission (in the case of the Supplemental Vendors) and those and any rights acquired by them pursuant to the exercise of an option or warrant to acquire Ordinary Shares or to subscribe for Ordinary Shares which have already or may subsequently be granted to them within the 12 months following Admission "IP Group" IP Group plc "London Stock Exchange" London Stock Exchange plc "New Concert Party" the Initial Vendors and the Supplemental Vendors "New Ordinary Shares" The 545,000,000 new Ordinary Shares to be issued conditionally upon the passing of the Resolutions pursuant to the Placing, the Acquisition Agreement and the Supplemental Acquisition Agreement "New Schemes" the new Readybuy Enterprise Management Incentive Scheme and the new Readybuy Unapproved Option Scheme proposed to be adopted by the Company at the EGM "Notice" the notice of EGM set out at the end of the Admission Document "Official List" the official list of the UKLA "Ordinary Shares" ordinary shares of 0.1p each in the capital of the Company "Oriental" Oriental Fine Foods Limited "Overseas Shareholders" existing shareholders who are resident in, or citizens of, countries other than the UK "Panel" the Panel on Takeovers and Mergers "Permitted Transferees" in the case of a Vendor that is a body corporate (as defined in section 740 of the Act) any body corporate which is a wholly owned subsidiary or holding company (as defined in section 736 of the Act) of such a Vendor or any subsidiary of a holding company of such a Vendor, and in the case of a Vendor who is an individual, his spouse or any of his children or any trustees for himself, his spouse or children "Placing" the conditional placing of the Placing Shares at the Placing Price, pursuant to the Placing Agreement "Placing Agreement" the conditional agreement dated 13 July 2006 between (1) the Company (2) WH Ireland (3) the Directors and the Proposed Directors relating to the Placing and the application for Admission, details of which are set out in paragraph 15 of Part VIII of the Admission Document "Placing Price" 2.25p per Placing Share "Placing Shares" the 45,000,000 New Ordinary Shares proposed to be issued pursuant to the Placing "Proposals" the Acquisition, the Placing and Admission "Proposed Directors" the proposed new directors of the Company with effect from First Admission being Simon Webster, Kurt Justin Baldwin, Gwynfor Owen Humphreys, Anthony Robards, Alan Aubrey and Timothy Sykes "Prospectus Rules" the Prospectus Rules brought into effect on 1 July 2005 pursuant to Commission Regulation (EC) No. 809/2004 "Readybuy Group" the Company and Oriental "Resolutions" the resolutions to be proposed at the EGM, set out in the Notice at the end of the Admission Document "Second Admission" the admission to trading on AIM of the Supplemental Consideration Shares "Shareholder" a holder of Ordinary Shares in the capital of the Company "Supplemental Acquisition" the proposed acquisition by Readybuy of 7,755 ordinary shares of 0.1p each in the capital of Avacta pursuant to the Supplemental Acquisition Agreement "Supplemental Acquisition the agreement dated 13 July 2006 between (1) the Supplemental Vendors and (2) the Company relating to the SupplementalAgreement" Acquisition, which is conditional, inter alia, on the Acquisition Agreement becoming unconditional, further details of which are set out in paragraph 15 of Part VIII of the Admission Document "Supplemental Consideration 24,469,898 new Ordinary Shares to be issued pursuant to theShares" Supplemental Acquisition Agreement "Supplemental Vendors" Russell Hodgetts, Kurt Baldwin, Alan Arthur Brain, Simon Webster, Inigo Rafael Rodriguez Mendieta, John Clarkson, Sergiu Masca, Tara Sabir and George Dimitriadis. "Techtran" Techtran Group Limited "UK" the United Kingdom of Great Britain and Northern Ireland "UKLA" the United Kingdom Listing Authority, being the Financial Services Authority acting in its capacity as the competent authority for the purposes of Part VI of the Financial Services and Markets Act 2000 "Vendors" the Initial Vendors and the Supplemental Vendors "Waiver" the waiver to be granted, subject to the passing of Resolution 1 on a poll of Independent Shareholders at the EGM, by the Panel of the obligation of the New Concert Party (or any member thereof) which would otherwise arise under Rule 9 of the City Code upon completion of the Acquisition to make a mandatory cash offer for the Ordinary Shares not already owned by the New Concert Party (or the relevant member thereof) on or after First Admission, as further described in paragraph 10 of Part I of the Admission Document "WH Ireland" WH Ireland Limited This information is provided by RNS The company news service from the London Stock Exchange