18 May 2015 07:00
Embargoed until 7.00am on 18 May, 2015
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION
18 May, 2015
BIOQUELL PLC ("Bioquell" or the "Company")
AGM statement, trading update, announcement of strategic reviewand commencement of offer period
Bioquell, the provider of specialist microbiological control technologies to the international Healthcare, Life Science and Defence markets, today announces that the Board has decided to carry out a strategic review of the Group's remaining biological contamination control business.
Strategic review
Earlier this year the Board announced the disposal of TRaC Global Limited ("TRaC") for £44.5 million, which represented a substantial premium to the then market capitalisation of the whole of Bioquell. This disposal unlocked substantial value for shareholders and also significantly simplified the Bioquell group structure.
Given this simplified structure, together with increasing investor interest in the bio-pharmaceutical sector and heightened concerns of governments around the world in relation to antibiotic resistance, the Board of Bioquell has decided to carry out a strategic review of the Group's remaining biological contamination control business. The review will be carried out with the assistance of the Group's financial advisers and will investigate whether, among other things, the value in the refocused Group would be enhanced by collaborating with a larger partner with a global reach.
Following a major product development programme which is now substantially complete, Bioquell has a market leading position in contamination control technologies which are used internationally in three sectors: Life Sciences, Healthcare and Defence. These technologies, certain of which incorporate a high degree of patent protection and associated know-how, comprise:
a) the provision of aseptic facilities, often mandated by regulatory bodies, for biologics & biotech customers;
b) products & services to assist hospitals combat hospital acquired infection and antibiotic resistant bacteria; and
c) the supply to manufacturers of military vehicles and fixed installations of environmental control systems, including chemical, biological, radiological and nuclear specialist filtration systems.
The Board believes that the Group's range of products and services present the potential for significant profitable growth internationally. However, the Board recognises that global corporations with substantially greater international sales and marketing resources may be able to capture market share and grow product-related revenues much more quickly than Bioquell is able to do on a standalone basis. Such accelerated revenue growth could be achieved with a partner in a number of ways including co-promotion, distribution, joint ventures or by business combination. In addition, prospective partners may attribute a greater value to the Bioquell Group than is currently afforded by the stock market. This could help the Board realise additional value for Bioquell shareholders and accordingly the Board has appointed Investec to assist it in evaluating the best way to maximise value for Bioquell shareholders. This may, or may not, include the sale of all or part of the Group. The Board believes that Bioquell has a secure future as an independent business and so will only engage with third parties willing to provide value to Bioquell's shareholders by recognising and supporting the Group's significant growth potential.
If the conclusion of the strategic review is to remain an independent business, the Board's intention is still to return a majority of the proceeds from the disposal of TRaC to Bioquell shareholders.
A number of Bioquell's largest shareholders have indicated a preference for the distribution of the cash proceeds arising on the sale of TRaC to be effected by a return of capital rather than by the payment of a special dividend which would be treated as income. The transaction costs associated with distributing the cash in the form of capital are not immaterial. As a result the Board has decided to defer such cash distribution until the strategic review referred to above has been completed.
Trading update
The Group is trading in line with the Board's expectations and at the end of April 2015 had net cash of £4.0 million on its balance sheet, which excludes the £43.9 million of net proceeds from the disposal of TRaC which completed on 7 May, 2015.
Takeover Code Implications
Any discussions in relation to a merger with a third party or a sale of the Company will take place within the context of a "formal sale process" as defined in The Takeover Code (the "Code") in order to enable conversations with parties interested in making such a proposal to take place on a confidential basis.
Parties with a potential interest in making an offer for, or merging with Bioquell should contact Investec Bank (contact details as set out below). Any interested party will be required to enter into a non-disclosure agreement with the Company on terms satisfactory to the Board and on the same terms, in all material respects, as the other interested parties, before being permitted to participate in the process. The Board reserves the right to alter any aspect of the process or to terminate it at any time and will make further announcements as appropriate. The Board reserves the right to reject any approach or terminate discussions with any interested party or participant at any time.
The Takeover Panel has granted a dispensation from the requirements of Rules 2.4(a), 2.4(b) and 2.6(a) of the Code such that any interested party participating in the formal sale process will not be required to be publicly identified as a result of this announcement (subject to note 3 to Rule 2.2 of the Code) and will not be subject to the 28 day deadline referred to in Rule 2.6(a), for so long as it is participating in the formal sale process. Interested parties should note Rule 21.2 of the Code, which will prohibit any form of inducement fee or other offer-related arrangement, and that the Company, although it may do so in the future, has not at this stage requested any dispensation from this prohibition under Note 2 of Rule 21.2.
This announcement is not an announcement of a firm intention to make an offer under Rule 2.7 of the Code and there can be no certainty that an offer will be made, nor as to the terms on which any offer will be made.
Following this announcement, the Company is now considered to be in an "offer period" as defined in the Code, and the dealing disclosure requirements listed below will apply.
Bioquell is today holding its Annual General Meeting at its offices, 52 Royce Close, West Portway, Andover, Hampshire, SP10 3TS. The Meeting will start at 12.00 noon.
Enquiries
Bioquell PLC
Nigel Keen - Chairman
Nick Adams - Chief Executive
Michael Roller - Finance Director
Investec Bank plc
Keith Anderson
Daniel Adams
Citigate DeweRogerson
Malcolm Robertson
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A copy of this announcement will be available at http://www.bioquellplc.com
The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.
Investec Bank plc ("Investec"), which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting exclusively for Bioquell and for no one else in connection with the subject matter of this announcement and will not be responsible to anyone other than Bioquell 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 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 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (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 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 pm (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 2.10 Disclosure
In accordance with Rule 2.10 of the Code, as at the date of this announcement, the Company has 42,579,624 ordinary shares of 10 pence each in issue and admitted to trading on the main market of the London Stock Exchange.
The International Securities Identification Number for Bioquell's ordinary shares is GB0004992003.
Publication on Website
In accordance with Rule 26.1 of the Code, a copy of this announcement will be available on the Company's website at http://www.bioquellplc.com as soon as possible and in any event no later than 12.00 noon on 19 May 2015 (being 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.
Investec Bank plc, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting exclusively for Bioquell and for no one else in connection with the subject matter of this announcement and will not be responsible to anyone other than Bioquell for providing the protections afforded to its clients or for providing advice in connection with the subject matter of this announcement.