COS.L Regulatory News (COS)

Not for release, publication or distribution, in whole or in part, DIRECTLY OR INDIRECTLY in, into or from any jurisdiction (including the united states) where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction. 

this announcement contains inside information FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (EU) No. 596/2014. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

For immediate release

27 August 2020

RECOMMENDED CASH OFFER

for

COLLAGEN SOLUTIONS PLC

by

ROSEN'S DIVERSIFIED, INC.

Summary and Highlights:

· The board of directors of Rosen's Diversified, Inc. ("RDI") and the Independent Directors of Collagen Solutions Plc ("Collagen" or the "Company") are pleased to announce that they have reached agreement on the terms of a recommended cash offer (the "Offer") to be made by RDI for the entire issued and to be issued ordinary share capital of Collagen not already owned by RDI. 

· RDI is a private company founded in the United States in 1946 and incorporated in 1959. RDI is the Company's largest shareholder. It is a multi-billion dollar, family owned and controlled business involved in food production, agrichemicals and distribution. The consideration payable to Collagen Shareholders under the terms of the Offer will be funded from the existing cash resources of RDI.

· Collagen (AIM: COS) is a global supplier, developer and manufacturer of medical grade collagen, tissues and related medical devices and components for use in regenerative medicine, tissue engineering and research. The Company's products are used in a wide variety of applications including orthopaedics, cardiovascular, dental, plastic surgery, wound healing, neurology and urology.

· Under the terms of the Offer, Collagen Shareholders will be entitled to receive 6.5 pence in cash for each Collagen Share held, valuing the entire existing issued and to be issued ordinary share capital of Collagen, including the existing shareholding of RDI, at approximately £30.41 million on a fully diluted basis.

· The Offer Price of 6.5 pence per Collagen Share represents:

(i) a premium of approximately 160.00 per cent. to the Closing Price of 2.50 pence per Collagen Share on 26 August 2020 (being the last Business Day prior to the date of this Announcement);

(ii) a premium of approximately 441.67 per cent. to the Closing Price of 1.20 pence per Collagen Share on 15 April 2020 (being the last Business Day prior to the commencement of the Formal Sale Process and resultant Offer Period);

(iii) a premium of approximately 277.84 per cent. to the volume weighted average price of 1.72 pence per Collagen Share over the three month period ended on and including 15 April 2020 (being the last Business Day prior to the commencement of the Formal Sale Process and resultant Offer Period); and

(iv) a multiple of approximately 7.58 times Collagen's unaudited revenue for the year ended 31 March 2020. 

· If any dividend, other distribution or return of capital is authorised, declared, made or paid or becomes payable in respect of Collagen Shares on or after the date of this Announcement, RDI reserves the right to reduce the Offer Price by the aggregate amount of such dividend, distribution or return of capital.

· At the date of this Announcement, RDI beneficially owns 83,600,000 Collagen Shares representing approximately 18.71 per cent. of Collagen's existing issued ordinary share capital. In addition, RDI has an existing strategic relationship with Collagen pursuant to the Supply Agreement and board representation via Wade Rosen, a non-executive director of Collagen and a director of RDI.

· The Offer is conditional on valid acceptances of the Offer being received in respect of not less than 90 per cent. (or such lower percentage as RDI may decide) in nominal value of Collagen Shares to which the Offer relates and of the voting rights attached to those shares then normally exercisable at general meetings of the Company.

· It is intended that the Offer will be implemented by means of a takeover offer under Part 28 of the Companies Act 2006 (although RDI reserves the right to elect to implement the Offer by means of a Scheme of Arrangement (subject to Panel consent)). 

· Should RDI receive acceptances to its Offer that, when taken together with Collagen Shares already owned by RDI, represent at least 75 per cent. of the Collagen Shares and its Offer becomes, or is declared, wholly unconditional, RDI intends to procure that Collagen makes an application to the appropriate authorities for the cancellation of the admission of Collagen Shares to trading on AIM. Should RDI proceed with the intended cancellation, a notice period of not less than 20 Business Days will be given on or after the date on which the Offer becomes, or is declared, unconditional in all respects. Should RDI not receive sufficient acceptances to proceed with procuring such an application, then RDI intends, following completion of the Offer, to seek the cancellation of the admission of Collagen Shares to trading on AIM under the other provisions set out in Rule 41 of the AIM Rules.

· The Offer is subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Offer Document, which it is expected will be despatched to Collagen Shareholders as soon as reasonably practical and, in any event, within 28 days of this Announcement.

· If Collagen Shareholders wish to accept the Offer, it is important that they follow the instructions to be set out in the Offer Document and the accompanying Form of Acceptance.

· Wade Rosen is a non-executive director of Collagen and a director of RDI, with certain of Mr Rosen's close family members being the majority beneficial owners and controllers of RDI. Mr Rosen is also Executive Vice President of Corporate Development of Scientific Life Solutions, LLC ("SLS"), a subsidiary of RDI. In view of Mr Rosen's directorship of, and his family's interests in and control of, RDI, he is not considered to be independent for the purposes of the Offer. Accordingly, only the Independent Collagen Directors have reviewed and considered the terms of the Offer.

· The Independent Collagen Directors, who have been so advised by Goodbody Stockbrokers UC ("Goodbody"), the Company's Rule 3 adviser and joint financial adviser, as to the financial terms of the Offer, consider the terms of the Offer to be fair and reasonable. In providing its advice to the Independent Collagen Directors, Goodbody has taken into account the commercial assessments of the Independent Collagen Directors. Goodbody is providing independent financial advice to the Independent Collagen Directors for the purposes of Rule 3 of the Code. In addition, the Independent Collagen Directors consider the terms of the Offer to be in the best interests of the Collagen Shareholders as a whole.

· Accordingly, the Independent Collagen Directors have unanimously agreed to recommend that Collagen Shareholders accept the Offer, as the Independent Collagen Directors who currently hold or control Collagen Shares have irrevocably undertaken so to do (or procure to be done) in respect of their own beneficial shareholdings (or the shareholdings they control), amounting, in aggregate, to 14,608,055 Collagen Shares representing approximately 3.27 per cent. of Collagen's existing issued ordinary share capital.

· In addition, RDI has received irrevocable undertakings to accept (or procure the acceptance of) its Offer from certain institutional and other Collagen Shareholders (as set out in Appendix III to this Announcement) in respect of, in aggregate, 176,567,034 Collagen Shares, representing approximately 39.51 per cent. of Collagen's existing issued ordinary share capital.

· Accordingly, RDI has obtained irrevocable undertakings over, in aggregate, 191,175,089 Collagen Shares, representing approximately 42.78 per cent. of Collagen's existing issued ordinary share capital and approximately 52.62 per cent. of the Collagen Shares to which the Offer relates.

· Further details of the abovementioned irrevocable undertakings are set out in section 6 of, and Appendix III to, this Announcement.

· The Collagen Shares already owned by RDI, when taken together with the irrevocable undertakings it has obtained to accept (or procure the acceptance of) its Offer, means that RDI either owns or has received irrevocable undertakings over, in aggregate, 274,775,089 Collagen Shares, representing approximately 61.49 per cent. of Collagen's existing issued ordinary share capital.

Chris Brinsmead CBE, Non-Executive Chairman of Collagen, commented:

"Collagen has built a high-performance team and significant portfolio of customers and projects, well positioning the Company in the exciting regenerative biomaterials and tissue market. The Offer from RDI recognises this strategic value and provides an attractive opportunity for shareholders to realise immediate value at a significant revenue multiple and premium to both the historical and prevailing share price."

Jamal Rushdy, Chief Executive Officer of Collagen, added:

"We believe RDI offers a compelling fit for Collagen, offering expanded opportunities for our employees, and a solid financial backing and broader offering to benefit our customers. We appreciate RDI's recognition of the value of our global workforce and infrastructure as key to the continued success and growth of the Company."

Wade Rosen, Director of RDI, commented:

"RDI's acquisition of Collagen, when integrated with SLS, will create a business of significant scale in the tissue supply and engineering space. With highly complementary offerings and capabilities, the combination will reinforce SLS's already robust position in the North American market, while Collagen's international presence will also provide a strong platform for the enlarged group to extend its supply of porcine and bovine tissue into the EMEA and APAC regions; taken together, we expect this to accelerate future growth and value creation while enhancing opportunities for employees of both entities.

"While we recognise that the Board of Collagen had to undertake the Formal Sale Process in order to maximise shareholder value, we have always felt that we are the best partner for the Company. We are, therefore, looking forward to the Offer completing as soon as practicable, such that we can then fully welcome the Company and its team members into the RDI organisation.

"Our recommended Offer also provides Collagen Shareholders with the certainty of a cash exit, in full, at a substantial and attractive premium over the prevailing value of their Collagen Shares at a time of considerable global macroeconomic uncertainty."

This summary should be read in conjunction with, and is subject to, the full text of this Announcement (including the Appendices). The Offer will be subject to the Conditions and certain further terms set out in Appendix I to this Announcement and to the full terms and conditions which will be set out in the Offer Document. Appendix II to this Announcement contains the sources of information and bases of calculation of certain information contained in this Announcement. Appendix III to this Announcement contains a summary of the irrevocable undertakings in respect of the Offer received by RDI. Appendix IV to this Announcement contains definitions of certain terms used in this summary and the following content of this Announcement.

A copy of this Announcement will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, for inspection on Collagen's website at www.collagensolutions.com, along with certain other documentation required to be posted online pursuant to the Code.

Enquiries:

Important Notice

Strand Hanson Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial adviser to RDI and no-one else in connection with the Offer and other matters described in this Announcement and will not be responsible to anyone other than RDI for providing the protections afforded to clients of Strand Hanson Limited nor for providing advice in relation to the Offer, the contents of this Announcement or any other matter referred to herein. Neither Strand Hanson Limited nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Strand Hanson Limited in connection with this Announcement, any statement contained herein or otherwise.

England & Company LLC, through its wholly owned subsidiary, England Securities, LLC, is acting as joint financial adviser to Collagen and no-one else in connection with the Offer and other matters described in this Announcement and will not be responsible to anyone other than Collagen for providing the protections afforded to clients of England & Company LLC nor for providing advice in relation to the Offer, the contents of this Announcement or any other matter referred to herein. Neither England & Company LLC nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of England & Company LLC in connection with this Announcement, any statement contained herein or otherwise.

Goodbody Stockbrokers UC, trading as Goodbody, which is regulated in Ireland by the Central Bank of Ireland and in the UK by the Financial Conduct Authority, is acting as sole Rule 3 adviser and joint financial adviser to Collagen and no-one else in connection with the Offer and other matters described in this Announcement and will not be responsible to anyone other than Collagen for providing the protections afforded to clients of Goodbody Stockbrokers UC nor for providing advice in relation to the Offer, the contents of this Announcement or any other matter referred to herein. Neither Goodbody Stockbrokers UC nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Goodbody Stockbrokers UC in connection with this Announcement, any statement contained herein or otherwise.

Cenkos Securities plc, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority is acting exclusively as nominated adviser and broker to Collagen and no-one else in connection with the Offer and other matters described in this Announcement and will not be responsible to anyone other than Collagen for providing the protections afforded to clients of Cenkos Securities plc nor for providing advice in relation to the Offer, the contents of this Announcement or any other matter referred to herein. Neither Cenkos Securities plc nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Cenkos Securities plc in connection with this Announcement, any statement contained herein or otherwise.

Further information

THIS ANNOUNCEMENT IS MADE PURSUANT TO RULE 2.7 OF THE CODE AND IS FOR INFORMATION PURPOSES ONLY AND IS NOT INTENDED TO, AND DOES NOT, CONSTITUTE OR FORM ANY PART OF, AN OFFER TO SELL OR AN INVITATION TO SUBSCRIBE FOR OR PURCHASE ANY SECURITIES OR THE SOLICITATION OF ANY VOTE OR APPROVAL IN ANY JURISDICTION PURSUANT TO THE OFFER OR OTHERWISE, NOR SHALL THERE BE ANY SALE, ISSUANCE OR TRANSFER OF THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT IN ANY JURISDICTION IN CONTRAVENTION OF APPLICABLE LAW.

The Offer will be subject to the Conditions and to the further terms and conditions to be set out in the Offer Document and the Form of Acceptance. The Offer is being made solely through the Offer Document (or any other document by which the Offer is made), which will contain the full terms and conditions of the Offer, including details of how to accept the Offer. Any acceptance in relation to the Offer should be made only on the basis of the information contained in the Offer Document. Collagen Shareholders are advised to read the Offer Document carefully, once it has been despatched.

This Announcement does not constitute a prospectus or prospectus equivalent document.

If you are in any doubt about the contents of this Announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

Overseas jurisdictions

The availability of the Offer and the release, publication and distribution of this Announcement in jurisdictions other than the United Kingdom may be restricted by the laws of those jurisdictions and therefore persons who are not resident in the United Kingdom into whose possession this Announcement comes should inform themselves about and observe any such restrictions. Failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction. In particular, the ability of persons who are not resident in the United Kingdom to participate in the Offer may be affected by the laws of the relevant jurisdictions in which they are located.

This Announcement has been prepared for the purposes of complying with English law, the Code and the AIM Rules and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws and regulations of jurisdictions outside the United Kingdom.

The Offer will be implemented in accordance with applicable English law and will be subject to the applicable requirements of the Code, the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority, the Panel and the rules of the London Stock Exchange (including the AIM Rules).

Unless otherwise determined by RDI or required by the Code, and permitted by applicable law and regulation, the Offer will not be made available directly or indirectly, in, into or from a Restricted Jurisdiction or any other jurisdiction where to do so would violate the laws in that jurisdiction and no person may accept the Offer from within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this Announcement, the Offer Document, the Form of Acceptance and all other documents relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction unless otherwise determined by RDI and as permitted by applicable law, and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in, into or from any Restricted Jurisdiction. All persons receiving this Announcement (including, without limitation, custodians, nominees and trustees) should observe these restrictions and any applicable legal or regulatory requirements of their jurisdiction and must not mail or otherwise forward, send or distribute this Announcement in, into or from any Restricted Jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Offer disclaim any responsibility or liability for the violation of such restrictions by any person.

US shareholders

The Offer will be made for securities of an English company and is being made in the United States in compliance with, and in reliance on, Section 14(e) of the United States Securities Exchange Act of 1934 (the "Exchange Act"), Regulation 14E thereunder, and the exemption therefrom provided by Rule 14d-1(d) under the Exchange Act. The Offer will be made in the United States by RDI and no one else. The Offer is subject to disclosure and procedural requirements of the United Kingdom which are different from those in the United States. In addition, the payment and settlement procedures with respect to the Offer will comply with the relevant UK rules, which differ from US payment and settlement procedures. Neither the United States Securities Exchange Commission, nor any securities commission of any state or other jurisdiction of the United States, will approve the Offer or review or comment on the adequacy or completeness of this Announcement.

The receipt of cash pursuant to the Offer may have tax consequences in the United States and under other applicable tax laws and such consequences, if any, are not described herein. US Shareholders are urged to consult with their own legal, tax and financial advisers in connection with making a decision regarding the Offer.

To the extent permitted by applicable law, in accordance with, and to the extent permitted by, the Code and normal UK market practice, RDI or nominees or brokers of RDI (acting as agents) or their respective affiliates may from time to time make certain purchases of, or arrangements to purchase, Collagen Shares or other Collagen securities other than pursuant to the Offer at any time prior to completion of the Offer. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any such purchases, or arrangements to purchase, will comply with all applicable requirements of the Code, the AIM Rules and Regulation 14E under the US Exchange Act including Rule 14e-5, to the extent applicable. To the extent required to be disclosed in accordance with applicable regulatory requirements, information about any such purchases will be disclosed on a next day basis to the Panel and will be available from a Regulatory Information Service.

Canadian shareholders

The enforcement by holders of Collagen Shares in Canada, resident in Canada or with a registered address in Canada, and any custodian, nominee or trustee holding Collagen Shares for persons in Canada or with a registered address in Canada (collectively, "Canadian Shareholders") of civil liabilities under Canadian securities laws, to the extent applicable, may be affected adversely by the fact that each of the Company and RDI is incorporated or organised under the laws of a jurisdiction other than Canada, that some or all of their respective officers and directors are and will be residents of countries other than Canada, and that all or a substantial portion of the assets of the Company, RDI and such persons are and will be located outside Canada. As a result, it may be difficult or impossible for Canadian Shareholders to effect service of process within Canada upon the Company, RDI or their respective officers or directors, or to realise against them, upon judgments of courts of Canada predicated upon liabilities under Canadian securities laws.

Canadian Shareholders should be aware that the Offer described in this Announcement may have tax consequences in Canada and should consult their own tax advisers to determine the particular tax consequences to them of the Offer in light of their particular circumstances, as well as any tax consequences that may arise under the laws of any other relevant foreign, state, local or other taxing jurisdiction. 

Further details in relation to Overseas Shareholders will be contained in the Offer Document.

Cautionary note regarding forward-looking statements

This Announcement (including information incorporated by reference in this Announcement) contains certain statements that are, or may be deemed to be, forward-looking statements with respect to RDI and/or Collagen. These forward-looking statements can be identified by the fact that they do not relate to historical or current facts. Forward-looking statements also often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "hope", "aims", "continue", "will", "may", "should", "would", "could" or other words of similar meaning. Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of RDI's or Collagen's operations and potential synergies resulting from the Offer; and (iii) the effects of government regulation on RDI's or Collagen's business. These statements are based on assumptions and assessments made by RDI and/or Collagen (as applicable) in light of their experience and perception of historical trends, current conditions, future developments and other factors they believe appropriate.

Forward-looking statements are not guarantees of future performance. Such forward-looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward-looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this Announcement. Neither RDI or the RDI Group nor Collagen or the Collagen Group assumes any obligation to update publicly or revise any forward-looking statement or other statements contained in this Announcement as a result of new information, future events or otherwise, except to the extent required by applicable law, the Panel or the Code.

There are several factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are changes in the global, political, economic, business and competitive environments, market and regulatory forces, future exchange and interest rates, changes in tax rates, and future business combinations or dispositions.

No member of the RDI Group or the Collagen Group nor any of their respective associates, directors, officers, employees or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur.

Except as expressly provided in this Announcement, no forward-looking or other statements have been reviewed by the auditors of the RDI Group or the Collagen Group. All subsequent oral or written forward-looking statements attributable to any member of the RDI Group or the Collagen Group, or any of their respective associates, directors, officers, employees or advisers, are expressly qualified in their entirety by the cautionary statement above.

No profit forecasts, quantified financial benefit statements or estimates

No statement in this Announcement is intended, or is to be construed, as a profit forecast, profit estimate or quantified financial benefit statement for any period. No statement in this Announcement should be interpreted to mean that earnings per Collagen Share for the current or future financial years would necessarily match or exceed the historical published earnings per Collagen Share.

Dealing and Opening Position Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in one per cent. or more of any class of relevant securities of Collagen 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) Collagen 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 p.m. (UK time) on the 10th Business Day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (UK 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 Collagen 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 one per cent. or more of any class of relevant securities of Collagen or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of Collagen 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) Collagen and (ii) any securities exchange offeror(s), 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 p.m. (UK 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 Collagen 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 Collagen and by any offeror and Dealing Disclosures must also be made by Collagen, 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 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.

Publication on a website and availability of hard copies

This Announcement and the documents required to be published pursuant to Rule 26 of the Code will be available free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Collagen's website at www.collagensolutions.com by no later than 12.00 noon (UK time) on the Business Day following this Announcement.

Neither the content of any website referred to in this Announcement nor the content of any website accessible from hyperlinks on such website is incorporated into, or forms part of, this Announcement.

A hard copy of this Announcement will be sent to Collagen Shareholders (other than Collagen Shareholders who have elected to receive electronic communications) in the near future. Collagen Shareholders may request a hard copy of this Announcement (and any information incorporated by reference in this Announcement) free of charge by contacting the Receiving Agent, Neville Registrars Limited, on 0121 585 1131 from within the UK or +44 (0) 121 585 1131 if calling from outside the UK between 9.00 a.m. to 5.00 p.m., Monday to Friday (except public holidays in England and Wales) or by submitting a request in writing to the Receiving Agent at Neville House, Steelpark Road, Halesowen, B62 8HD. Collagen Shareholders may also request that all future documents, announcements and information to be sent to them in relation to the Offer should be in hard copy form. If you have received this Announcement in electronic form, hard copies of this Announcement and any document or information incorporated by reference into this Announcement will not be provided unless such a request is made.

Rule 2.9 information

In accordance with Rule 2.9 of the Code, Collagen confirms that, as at the date of this Announcement, it has 446,878,910 ordinary shares of 1 penny each in issue and admitted to trading on AIM, with no shares held in treasury. The International Securities Identification Number of Collagen's ordinary shares is GB00B94T6Y14.

Information relating to Collagen Shareholders

Please be aware that addresses, electronic addresses and certain information provided by Collagen Shareholders, persons with information rights and other relevant persons for the receipt of communications from Collagen may be provided to RDI during the Offer Period as required under Section 4 of Appendix 4 of the Code to comply with Rule 2.11(c) of the Code.

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

Time

All times shown in this Announcement are UK times, unless otherwise stated.

Not for release, publication or distribution, in whole or in part, DIRECTLY OR INDIRECTLY in, into or from any jurisdiction (including the united states) where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction. 

this announcement contains inside information FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (EU) No. 596/2014. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

27 August 2020

RECOMMENDED CASH OFFER

for

COLLAGEN SOLUTIONS PLC

by

ROSEN'S DIVERSIFIED, INC.

1. Introduction

The board of directors of RDI and the Independent Directors of Collagen are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by RDI for the entire issued and to be issued ordinary share capital of Collagen not already owned by RDI. The Offer of 6.5 pence per Collagen Share values the entire existing issued and to be issued ordinary share capital of Collagen, including the existing shareholding of RDI, at approximately £30.41 million on a fully diluted basis.

The Offer, to be made by way of a takeover offer pursuant to Part 28 of the Companies Act 2006, will be conditional on valid acceptances of the Offer being received in respect of not less than 90 per cent. (or such lower percentage as RDI may decide) in nominal value of Collagen Shares to which the Offer relates and of the voting rights attached to those shares then normally exercisable at general meetings of the Company.

RDI is a private company founded in the United States in 1946 and incorporated in 1959. As at the date of this Announcement, RDI is the Company's largest shareholder, holding approximately 18.71 per cent. of Collagen's existing issued ordinary share capital. It is a multi-billion dollar, family owned and controlled business involved in food production, agrichemicals and distribution. In addition, RDI, via its subsidiary, SLS, has an existing strategic relationship with the Collagen Group pursuant to the Supply Agreement. Further information on RDI is set out in section 8 below.

Wade Rosen is a non-executive director of Collagen and a director of RDI, with certain of Mr Rosen's close family members being the majority beneficial owners and controllers of RDI. Mr Rosen is also Executive Vice President of Corporate Development of SLS. In view of Mr Rosen's directorship of, and his family's interests in and control of, RDI, he is not considered to be independent for the purposes of the Offer. Accordingly, only the Independent Collagen Directors have reviewed and considered the terms of the Offer.

The Independent Collagen Directors have unanimously agreed to recommend that Collagen Shareholders accept the Offer, as the Independent Collagen Directors who currently hold or control Collagen Shares have irrevocably undertaken so to do (or procure to be done) in respect of their own beneficial shareholdings (or the shareholdings they control) amounting, in aggregate, to 14,608,055 Collagen Shares representing approximately 3.27 per cent. of the existing issued ordinary share capital of Collagen.

2. The Offer

Under the terms of the Offer, which will be subject to the Conditions and further terms summarised below and in Appendix I to this Announcement and to the full terms and conditions to be set out in the Offer Document, Collagen Shareholders will be entitled to receive:

for each Collagen Share 6.5 pence in cash

The Offer values the entire existing issued and to be issued ordinary share capital of Collagen, including the existing shareholding of RDI, at approximately £30.41 million on a fully diluted basis and the Offer Price represents:

(i) a premium of approximately 160.00 per cent. to the Closing Price of 2.50 pence per Collagen Share on 26 August 2020 (being the last Business Day prior to the date of this Announcement);

(ii) a premium of approximately 441.67 per cent. to the Closing Price of 1.20 pence per Collagen Share on 15 April 2020 (being the last Business Day prior to the commencement of the Formal Sale Process and resultant Offer Period);

(iii) a premium of approximately 277.84 per cent. to the volume weighted average price of 1.72 pence per Collagen Share over the three month period ended on and including 15 April 2020 (being the last Business Day prior to the commencement of the Formal Sale Process and resultant Offer Period); and

(iv) a multiple of approximately 7.58 times Collagen's unaudited revenue for the year ended 31 March 2020. 

If, on or after the date of this Announcement and before the Offer becomes or is declared wholly unconditional, any dividend, other distribution and/or return of capital is authorised, declared, made or paid or becomes payable in respect of the Collagen Shares, RDI reserves the right to reduce the Offer Price by an amount of up to the amount of such dividend, distribution and/or return of capital. To the extent that any such dividend, distribution and/or other return of capital is authorised, declared, made or paid or is payable and it is: (i) transferred pursuant to the Offer on a basis which entitles RDI to receive the dividend, distribution or return of capital and to retain it; or (ii) cancelled, the consideration payable under the terms of the Offer will not be subject to change in accordance with this paragraph. Any exercise by RDI of its rights referred to in this paragraph shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the Offer.

It is expected that the Offer Document will be published as soon as reasonably practicable but, in any event within 28 days of this Announcement (or within such longer period as the Panel and Collagen may agree).

3. Background to and reasons for the Offer

RDI is of the view that the acquisition of Collagen would, when integrated with SLS, create a business of significant scale in the tissue supply and engineering space. RDI views the capabilities and offerings of the Collagen Group as being both complementary and enhancing to its existing SLS business and believes that the distinctive combination of capabilities and shared growth aspirations will enhance opportunities for employees of both entities.

RDI believes that the markets in which Collagen operates are characterised by strong growth outlooks, notwithstanding the impact of the COVID-19 pandemic, driven by favourable long term macro trends, particularly changing demographics. The acquisition of Collagen would, in the view of the RDI Directors, reinforce SLS's already robust position in the North American market, providing diversification through additional capabilities and products.

The RDI Directors consider that successful completion of the Offer would provide a foundation for SLS to become a major tissue provider in North America, leveraging the RDI Group's local porcine and bovine harvest, logistics and distribution capabilities in the United States. Furthermore, RDI believes that Collagen's international presence would also provide a platform for SLS to extend its supply of porcine and bovine tissue into the EMEA and APAC regions.

RDI values its existing relationship with the Collagen Group, as both a substantial shareholder and a strategic partner, through the Supply Agreement, and RDI recognises value in the pipeline of opportunities that has arisen for SLS.

RDI believes that Collagen represents an attractive strategic and cultural fit with SLS and has been impressed by the long-term vision and ethos of the Company, which it has encountered in its capacity as a strategic partner.

RDI also is of the view that, as part of the RDI Group, the Company will be released from the requirement to meet the UK public equity market's shorter term expectations and will operate with a reduced cost base as a result of its private status.

In addition, RDI believes that, as a relatively small and specialist UK quoted company, the Company will find it increasingly difficult to attract and retain sufficient research coverage, stock liquidity and level of market rating that would make retaining its existing trading facility on AIM worthwhile. As such, following successful completion of the Offer, the Company would be able to eliminate the regulatory burden, constraints and numerous expenses associated with maintaining a UK public listing.

4. Recommendation of the Independent Collagen Directors

The Independent Collagen Directors, who have been so advised by Goodbody, the Company's Rule 3 adviser and joint financial adviser, as to the financial terms of the Offer, consider the terms of the Offer to be fair and reasonable. In providing its advice to the Independent Collagen Directors, Goodbody has taken into account the commercial assessments of the Independent Collagen Directors. Goodbody is providing independent financial advice to the Independent Collagen Directors for the purposes of Rule 3 of the Code.  In addition, the Independent Collagen Directors consider the terms of the Offer to be in the best interests of the Collagen Shareholders as a whole.

Accordingly, the Independent Collagen Directors have unanimously agreed to recommend that Collagen Shareholders accept the Offer, as the Independent Collagen Directors who currently hold or control Collagen Shares have irrevocably undertaken so to do (or procure to be done) in respect of their own beneficial shareholdings (or the shareholdings which they control), amounting, in aggregate, to 14,608,055 Collagen Shares representing approximately 3.27 per cent. of the existing issued ordinary share capital of Collagen.

The Offer Document, which it is expected will be despatched to Collagen Shareholders as soon as practicable and, in any event, within 28 days of this Announcement, will contain, inter alia, further details of the Offer and the procedure for acceptance.

5. Background to and reasons for the Independent Collagen Directors' recommendation of the Offer

In agreeing to recommend the Offer to Collagen Shareholders, the Independent Collagen Directors, who have been advised by Goodbody, have considered a number of factors, including those set out below.

Formal Sale Process

On 16 April 2020, the Company announced that, following the receipt of interest in the Company, it had decided to conduct a formal review of the various strategic options available to the Company to maximise value for its shareholders. These options included the potential sale of the Company or the sale of one or more of the Company's assets. To facilitate discussions with interested parties, the Company announced the commencement of a "formal sale process" as set out in the Code. The Company invited indications of interest from interested parties by 15 May 2020.

On 18 May 2020, the Company announced that it had received indications of interest in respect of: (i) a purchase of the Company as a whole; (ii) a purchase or investment in a part of the business of the Company; and (iii) a refinancing of the Company. Following that announcement, the Company has engaged with relevant parties in a constructive and positive manner with a view to optimising value for shareholders, resulting in the Offer, which the Independent Collagen Directors believe is in the best interests of Collagen Shareholders.

Current trading and outlook

The Independent Collagen Directors have considered the Group's "Unaudited Full Year Results" announcement of 31 July 2020 and the current trading and outlook for the Group set out in section 7 of this Announcement.

The Independent Collagen Directors recognise that the financial year ended 31 March 2020 was impacted by two write-downs, capacity constraints in the Glasgow plant and COVID-19 challenges. Despite these challenges, the Independent Collagen Directors recognise that in the first quarter of the current financial year Collagen generated revenue of approximately £0.9 million and, following the signature of two new supply agreements in July 2020, the Group's year to date sales plus its confirmed order book stood in excess of £4 million as at 21 July 2020. Furthermore, the Independent Collagen Directors believe that underlying clinical demand for the Group's products will remain strong in the medium-to-long term, and that the Company is well positioned to service the markets in which it operates. The Independent Collagen Directors remain confident that the Group's existing strategy would deliver future value for Collagen Shareholders.

The Independent Collagen Directors also believe that the terms of the Offer acknowledge the quality of Collagen's business and the strength of its future prospects and that the Offer Price represents an attractive opportunity for Collagen Shareholders to realise an immediate and attractive cash value, at a significant premium to the share price immediately prior to commencement of the Formal Sale Process and to historical share price performance in recent years.

The Independent Collagen Directors consider that the opportunity for Collagen Shareholders to realise an immediate attractive cash value may not be otherwise achievable in the near to medium term, given the lack of liquidity in Collagen Shares and the limited opportunity for Collagen Shareholders otherwise to realise their investments in significant volume through the stock market.

In addition, while the Independent Collagen Directors believe that the Group is well positioned going forward, they are mindful of the nature of the industry challenges it faces, including the risks surrounding product development, the challenges (including pricing and competitive challenges) of securing new business, the requirement for ongoing investment and the need for further economies of scale to compete and drive significant growth.

The consideration

The Offer values the entire issued and to be issued ordinary share capital of Collagen, on a fully diluted basis, at approximately £30.41 million. The Offer represents:

· a premium of approximately 160.00 per cent. to the Closing Price of 2.50 pence per Collagen Share on 26 August 2020 (being the last Business Day prior to the date of this Announcement);

· a premium of approximately 441.67 per cent. to the Closing Price of 1.20 pence per Collagen Share on 15 April 2020 (being the last Business Day prior to the commencement of the Formal Sale Process and resultant Offer Period);

· a premium of approximately 277.84 per cent. to the volume weighted average price of 1.72 pence per Collagen Share over the three month period ended on and including 15 April 2020 (being the last Business Day prior to the commencement of the Formal Sale Process and resultant Offer Period); and

· a multiple of approximately 7.58 times Collagen's unaudited revenue for the year ended 31 March 2020. 

Alternative options

As outlined above, the Independent Collagen Directors, in conjunction with the Company's financial advisers, Goodbody and England & Company, conducted a comprehensive review of the options available to the Company. The review considered, amongst other options, the sale of the Company as a whole, the sale of one or more of the Company's assets and a refinancing of the Company. Taking into account the options available to Collagen, the feasibility and execution risks arising and the likely timeframe to achieve such alternative options the Independent Collagen Directors have concluded that the Offer is in the best interests of Collagen Shareholders.

RDI's stated intentions and assurances

The Independent Collagen Directors have given due consideration to RDI's stated intentions and assurances regarding Collagen contained in section 11 of this Announcement. In particular, the Independent Collagen Directors note RDI's intention to continue to support Collagen's management in continuing to execute and refine their existing business plan and strategy for the development of the Collagen Group and that it does not intend to make any changes to the Group's research and development functions. The Independent Collagen Directors additionally note RDI's expectation that, following successful completion of the Offer, Collagen would operate principally as it does today, but as a direct or indirect subsidiary of RDI. The Independent Collagen Directors also welcome RDI's confirmations that it will fully safeguard the existing employment rights, including pension rights, of the management and employees of Collagen in accordance with contractual and statutory requirements and that it does not intend to make any material changes in the conditions of employment of the employees and management of Collagen.

Additional factors

Additional factors that have also been taken into consideration by the Independent Collagen Directors in agreeing to recommend the Offer include:

· their belief that the Offer provides liquidity at a fair and reasonable price for Collagen Shareholders;

· the number of Collagen Shares in respect of which RDI has obtained irrevocable undertakings to accept the Offer;

· their belief that the Offer provides value certainty for Collagen Shareholders at a significant premium to, inter alia, the share price immediately prior to commencement of the Formal Sale Process and to historical share price performance in recent years, recognising the Company's market position, its future growth prospects and the risks associated with those prospects;

· the Company's current and projected cash position and their belief that the Offer provides the Company with increased access to capital to support growth;

· RDI's approach to Collagen's customers, employees, and existing international operations; and

· their belief that the Offer provides the Company with enhanced financial and operational flexibility as the business seeks to execute its strategy and achieve its long-term targets.

Overview

The foregoing summary of the factors considered by the Independent Collagen Directors is not intended to be exhaustive but does set forth the principal factors considered by the Independent Collagen Directors. The Independent Collagen Directors collectively reached the unanimous conclusion to recommend the Offer in the light of the various factors described above. In view of the wide range of factors considered by the Independent Collagen Directors in connection with their evaluation of the Offer and the complexity of these matters, the Independent Collagen Directors did not consider it practical and did not attempt to quantify, rank or otherwise assign relative weights to the specific factors considered in reaching their decision. Rather, the Independent Collagen Directors agreed to make their recommendation based on the totality of information presented to, and the investigation conducted by, them with the assistance of the Company's advisers.

6. Irrevocable undertakings

RDI has received irrevocable undertakings to accept (or procure the acceptance of) its Offer (or, in the event that the Offer is implemented by way of a Scheme of Arrangement, to vote, or procure the vote, in favour of such Scheme of Arrangement at the Scheme Meetings) from certain institutional and other Collagen Shareholders (who are listed in Appendix III to this Announcement), in respect of, in aggregate, 176,567,034 Collagen Shares, representing approximately 39.51 per cent. of the existing issued ordinary share capital of Collagen. 

The Independent Collagen Directors who beneficially hold or control Collagen Shares as at the date of this Announcement have also irrevocably undertaken to accept (or procure acceptance of) the Offer (or, in the event that the Offer is implemented by way of a Scheme of Arrangement, to vote, or procure the vote, in favour of such Scheme of Arrangement at the Scheme Meetings) in respect of their entire beneficial shareholdings (or shares over which they exercise control), amounting to, in aggregate, 14,608,055 Collagen Shares, representing approximately 3.27 per cent. of the existing issued ordinary share capital of Collagen.

RDI has therefore received irrevocable undertakings to accept (or procure the acceptance of) its Offer (or, in the event that the Offer is implemented by way of a Scheme of Arrangement, to vote, or procure the vote, in favour of such Scheme of Arrangement at the Scheme Meetings) in respect of, in aggregate, 191,175,089 Collagen Shares, representing approximately 42.78 per cent. of the existing issued ordinary share capital of Collagen.

The irrevocable undertakings in respect of the Independent Collagen Directors and Mr David Evans shall lapse and cease to be binding, inter alia, if (i) the Offer Document is not published within 28 days of this Announcement (or within such longer period as the Panel and Collagen may agree); (ii) the Offer lapses or is withdrawn without becoming or being declared unconditional in all respects, unless: (a) this is as a result of RDI exercising its right to implement the Offer by way of a Scheme of Arrangement; or (b) a new, revised or replacement Offer or Scheme of Arrangement is announced by RDI within seven (7) business days of the lapse or withdrawal of the Offer, provided that the terms of such new, revised or replacement Offer or Scheme of Arrangement are no less favourable to all Collagen Shareholders as the terms set out in this Announcement; or (iii) RDI announces, with the consent of the Panel, that it does not intend to proceed with the Offer.

The irrevocable undertakings in respect of Seneca Partners Limited and Calculus Capital Limited shall lapse and cease to be binding, inter alia, if: (i) a competing offer from a third party for the entire issued and to be issued ordinary share capital of Collagen (other than any shares owned by such person or any person acting in concert with it) is made in accordance with Rule 2.7 of the Code (whether by way of a takeover offer or Scheme of Arrangement) within 14 days of posting of the Offer Document provided that the value of that offer as at the date it is made exceeds 7.25 pence (and in respect of non cash offers this determination must be in the reasonable opinion of the Independent Collagen Directors); (ii) if the Offer Document is not published within 28 days of this Announcement (or within such longer period as the Panel and Collagen may agree); (iii) the Offer lapses or is withdrawn without becoming or being declared unconditional in all respects unless: (a) this is as a result of RDI exercising its right to implement the Offer by way of a Scheme of Arrangement; or (b) a new, revised or replacement Offer or Scheme of Arrangement is announced by RDI within seven (7) business days of the lapse or withdrawal of the Offer, provided that the terms of such new, revised or replacement Offer or Scheme of Arrangement are no less favourable to all Collagen Shareholders as the terms set out in this Announcement; or (iv) RDI announces, with the consent of the Panel, that it does not intend to proceed with the Offer.

The irrevocable undertakings in respect of Helium Rising Stars Fund Limited, Rathbone Investment Management Limited, Mr Peter Meyer and 1615915 Alberta Limited shall lapse and cease to be binding, inter alia, if: (i) a competing offer from a third party for the entire issued and to be issued ordinary share capital of Collagen (other than any shares owned by such person or any person acting in concert with it) is made in accordance with Rule 2.7 of the Code (whether by way of a takeover offer or Scheme of Arrangement) within 14 days of posting of the Offer Document provided that: (a) the Independent Collagen Directors recommend that offer; and (b) the value of that offer as at the date it is made exceeds 7.25 pence (and in respect of non cash offers this determination must be in the reasonable opinion of the Independent Collagen Directors); (ii) if the Offer Document is not published within 28 days of this Announcement (or within such longer period as the Panel and Collagen may agree); (iii) the Offer lapses or is withdrawn without becoming or being declared unconditional in all respects unless: (a) this is as a result of RDI exercising its right to implement the Offer by way of a Scheme of Arrangement; or (b) a new, revised or replacement Offer or Scheme of Arrangement is announced by RDI within seven (7) business days of the lapse or withdrawal of the Offer, provided that the terms of such new, revised or replacement Offer or Scheme of Arrangement are no less favourable to all Collagen Shareholders as the terms set out in this Announcement; or (iv) RDI announces, with the consent of the Panel, that it does not intend to proceed with the Offer.

The irrevocable undertaking in respect of Gresham House Asset Management Limited shall lapse and cease to be binding, inter alia, if: (i) a competing offer from a third party (other than a company controlled by RDI) for the entire issued share capital of Collagen is announced at a price which exceeds 7.25 pence per Collagen Share (which may include where such competing offer is not for cash consideration, provided that in respect of such a non cash competing offer this determination is in the reasonable opinion of the board of Collagen); (ii) the Offer Document is not dispatched within 28 days after the date of this Announcement; or (iii) the Offer lapses or is withdrawn.

Further details of the irrevocable undertakings received by RDI (including the circumstances in which the irrevocable undertakings will cease to remain binding) are set out in Appendix III to this Announcement.

Copies of the irrevocable undertakings will be put on display on Collagen's website at: www.collagensolutions.com by no later than 12.00 noon (UK time) on 28 August 2020.

7. Information relating to the Collagen Group

The Collagen Group is a global supplier, developer, and manufacturer of medical grade collagen, tissues, and related medical devices and components for use in regenerative medicine, tissue engineering, and research. The Group's products are used in a wide variety of applications including orthopaedics, cardiovascular, dental, plastic surgery, wound healing, neurology and urology. The Group generates revenue across global markets including North America, Europe, Middle East & Africa and Asia. The Collagen Group has 43 employees.

On 31 July 2020, Collagen announced its unaudited full year results for the year ended 31 March 2020, where it reported Group revenue and other income of £4.6 million (2019: £4.5 million), a loss after taxation of £3.2 million (2019: £1.0 million) and net assets as at 31 March 2020 of £17.9 million (2019: £15.4 million).

Collagen was incorporated in England and Wales on 15 March 2013 and its ordinary shares admitted to trading on AIM on 5 April 2013. Collagen Shares are currently admitted to trading on AIM under the symbol COS and with an ISIN of GB00B94T6Y14.

As at the last Business Day prior to the date of this Announcement, Collagen's issued ordinary share capital comprises 446,878,910 Collagen Shares. Based on the Closing Price of a Collagen Share of 2.50 pence on 26 August 2020 (being the last Business Day prior to the date of this Announcement), this equates to a market capitalisation of approximately £11.17 million.

Current trading and prospects

The Collagen Group continues to trade in line with the Collagen Directors' expectations.

The Collagen Group generated revenue in the first quarter of its 2021 financial year of approximately £0.9 million, helped by a reduction in the impact of COVID-19 experienced by the Collagen Group in the last quarter of its financial year to 31 March 2020. The Group's cash balance was £1.6 million at the end of the quarter to 30 June 2020. Following the signature of two new supply agreements in July 2020, the Group's year to date sales plus its confirmed order book stood in excess of £4 million as at 21 July 2020.

As announced on 6 July 2020, Collagen entered into a deed of variation in relation to its existing Bond Subscription Agreement with Norgine Ventures and the related Bond Instrument. The variation provides for a reduction in the capital payments from 1 July 2020 and delays the date of redemption of the bonds by either three or six months from 30 September 2020 for Tranche A and from 31 January 2021 for Tranche B. The exact timing of the delay to the redemption dates and relevant repayments (three or six months) depends on the delivery of specific commercial milestones, in respect of which the Company has confidence and visibility based on its existing customer base and contracted milestones. As at 30 June 2020, the Company had repaid a total of £1.96 million of the principal against the total £3 million drawn.

Additionally, the Independent Collagen Directors believe that the surgical product end-markets of the Collagen Group's customers' appear to be recovering from the decline in non-emergency or elective procedure volumes, and customer demand for the Collagen Group's services and biomaterials products have not declined. During the COVID-19 pandemic to date, the Group and its markets have been tested but are showing resilience. The Independent Collagen Directors' continue to believe that the underlying clinical demand for the Collagen Group's products will remain strong in the medium-to-long term, and that the Collagen Group is well positioned in these markets. In this context, the Independent Collagen Directors remain confident that the Company's existing strategy would deliver future value for Collagen Shareholders.

Further financial and other information on Collagen will be set out in the Offer Document.

8. Information relating to RDI

8.1 RDI

RDI is a private company founded in the United States in 1946 and incorporated in 1959. It is a multi-billion dollar, family owned and controlled business involved in food production, agrichemicals and distribution.

Headquartered in Bloomington, Minnesota, RDI operates three business segments, namely: i) American Foods Group, LLC, a meat processing company believed by the RDI Directors to be the fifth largest beef packer in the United States and which includes a transportation and logistics division; ii) Rosen's, Inc., a distributor of agricultural chemicals; and iii) SLS, a supplier of critical components to the bioresearch and biomedical fields.

In its 2019 financial year, the RDI Group reported audited total revenue of approximately US$4 billion. The RDI Group sells a broad range of food, agricultural and scientific products into more than 30 countries, across five continents, and has over 4,500 employees.

8.2 Previous Strategic Investment and Supply Agreement

On 20 May 2019, as part of a broader fundraising by Collagen, the Company announced, inter alia, a strategic investment of £4.18 million by RDI, pursuant to a conditional subscription for 83,600,000 new Collagen Shares at a price of 5 pence per share (the "Strategic Investment").

The Strategic Investment, alongside a placing and open offer to raise a further £1.8 million (before expenses) at a price of 5 pence per share, was subsequently approved by Collagen's shareholders at a duly convened general meeting held on 5 June 2019.

RDI's principal rationale for making the Strategic Investment was to provide SLS with accelerated access to animal tissue-related biomedical products and, accordingly, the investment was accompanied by the Supply Agreement between Collagen Solutions NZ Limited, a wholly owned subsidiary of Collagen, and SLS for the supply of such tissue products. In addition, from completion of the Strategic Investment, pursuant to the terms of the subscription agreement, RDI has the right to appoint a director to the Board of Collagen, for so long as it holds 15 per cent. or more of the Company's issued ordinary share capital. Accordingly, on 6 June 2019, the Company announced that Wade Rosen had joined the Collagen Board as a non-executive director and the nominated representative of RDI, which remains the current situation. Mr Rosen is also a director of RDI and Executive Vice President of Corporate Development of SLS.

9. Financing of the Offer

In accordance with Rule 2.7(d) of the Code, Strand Hanson, financial adviser to RDI, is satisfied that sufficient financial resources are available to RDI to enable it to implement the Offer in full. Assuming that the cash consideration is payable to all Collagen Shareholders other than RDI, on a fully diluted basis, full implementation of the Offer would require a maximum cash payment of approximately £24.97 million by RDI which will be funded entirely out of RDI's existing cash resources.

There is no requirement for any funding from third party providers of finance to the RDI Group.

Further information on the financing of the Offer will be set out in the Offer Document.  

10. Collagen Share Schemes

Participants in the Collagen Share Schemes will be contacted regarding the effect of the Offer on their rights under the Collagen Share Schemes. In accordance with Rule 15 of the Code, RDI will make appropriate proposals to such participants in due course and details of such proposals will also be set out in the Offer Document.

11. Collagen's Directors, management, employees, research and development and locations

RDI recognises the significant skills, expertise and operational experience of the existing Collagen executive team and, following completion of the Offer, does not expect to implement material changes to the senior executive management structure and expects that existing management will play an important role in the future development of Collagen.

The RDI Directors intend to support Collagen's management in continuing to execute and refine their existing business plan and strategy for the development of the Collagen Group. However, on completion of the Offer, RDI intends to commence a review of the Collagen Group in order to confirm and potentially identify further cost-savings and refine anticipated synergistic benefits, particularly with the existing activities of SLS. Such review and integration process, which will include due consultation with the appropriate stakeholders within Collagen and RDI, is expected to occur within 12 months following completion of the Offer, and may result in a limited number of cost savings and redundancies where operational efficiencies are identified, likely to be focused on head office, finance and administrative related functions, especially those related to Collagen's current status as a publicly quoted company on AIM.

Save for Wade Rosen, who will remain on the Collagen Board, all of the other non-executive Collagen Directors, being Chris Brinsmead, Geoffrey Bennett and Malcolm Gillies, have agreed to resign with effect from completion of the Offer or, if later, on the date when admission of the Collagen Shares to trading on AIM is cancelled. They will each receive remuneration in line with the termination provisions of their letters of appointment by way of compensation.

In addition, RDI does not plan to make any changes to the research and development functions of the Collagen Group, nor does it have any plans to make any material headcount reductions or other material changes to the terms and conditions of employment or in the balance of the skills and functions of the management and employees of the Collagen Group or the RDI Group, other than as set out above with regard to the non-executive directors of Collagen and anticipated limited number of cost savings and redundancies focused on the areas outlined above.

The RDI Board has given assurances to the Independent Collagen Directors that, following the Offer becoming or being declared wholly unconditional, the existing contractual and statutory employment rights and terms and conditions of employment, including any employer contributions to company pension schemes as applicable, of the management and employees of the Collagen Group will be fully safeguarded. RDI does not intend to make any changes with regards to the Collagen Group's existing pension schemes, including with regard to current arrangements for the funding of any scheme deficit, the accrual of benefits for existing members and the admission of new members to such schemes.

Furthermore, RDI generally expects that, following successful completion of the Offer, Collagen would operate principally as it does today, but as a direct or indirect subsidiary of RDI, and RDI has no intentions to redeploy the fixed assets of the Collagen Group. The RDI Directors also have no intention to change Collagen's headquarters location or headquarters functions in Glasgow. The RDI Directors believe that the Offer, if successfully completed, will provide a stable and well capitalised future for Collagen.

It is intended that the appointments of the executive directors of Collagen will remain unchanged following successful completion of the Offer, however there are no agreements or arrangements between RDI and the directors, management or employees of Collagen in relation to their on-going involvement in the business and the Offer will not be conditional on reaching agreement with such persons. 

In addition, RDI has not entered into, nor is it in discussions on any proposals to enter into, any form of incentivisation arrangements with members of Collagen's management who are interested in Collagen Shares and has no plans so to do. Following completion of the Offer, RDI may put in place incentive arrangements for certain members of the Collagen management team. No proposals have been made on the terms of any incentive arrangements for relevant management.

As set out in section 13 below, RDI intends to seek the cancellation of the admission of the Collagen Shares to trading on AIM shortly following the Offer becoming, or being declared, unconditional in all respects, thereby enabling Collagen's management to be entirely focussed on the growth and development of the business, rather than AIM investor and UK publicly quoted company related matters.

In accordance with Rule 2.11 of the Code, Collagen will make available to its employees a copy of this Announcement and will inform its employees of the rights of any employee representatives under Rule 25.9 of the Code to require that a separate opinion of any employee representatives on the effects of the Offer on employment be appended to the Offer Document. If and to the extent that Collagen is provided with an opinion from the employee representatives after the date of publication of the Offer Document, Collagen will publish that opinion in accordance with Rule 25.9 of the Code.

12. Structure and implementation of the Offer and compulsory acquisition

Process

It is intended that the Offer will be implemented by means of a takeover offer under Part 28 of the Companies Act 2006, the provisions of which will be set out in full in the Offer Document (although RDI reserves the right to elect to implement the Offer by means of a Scheme of Arrangement (subject to Panel consent)). 

The Collagen Shares shall be acquired under the Offer fully paid and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and any other rights and interests of any nature whatsoever and together with all rights now and hereafter attaching thereto, including voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid on or after the date of this Announcement.

The Offer Document and the accompanying Form of Acceptance will be published as soon as reasonably practicable and, in any event, within 28 days of this Announcement (or within such longer period as the Panel and Collagen may agree). Collagen Shareholders are urged to read the Offer Document and the accompanying Form of Acceptance carefully once they have been dispatched.

Conditions

The Offer will lapse unless all the Conditions to the Offer have been fulfilled or (if capable of waiver) waived or, where appropriate, determined by RDI to have been or remain satisfied by midnight (London time) on the date which is 21 days after the later of the First Closing Date and the date on which the Offer becomes, or is declared, unconditional as to acceptances (or such later date (if any) as RDI may, with the consent of the Panel or in accordance with the Code, decide).

Compulsory acquisition

If RDI receives acceptances under the Offer in respect of, and/or otherwise acquires, 90 per cent. or more of the Collagen Shares by nominal value, and the voting rights attaching to such shares, to which the Offer relates and assuming that all of the Conditions have been satisfied or waived (if capable of being waived), RDI intends to exercise its right, pursuant to the provisions of Chapter 3 of Part 28 of the Companies Act 2006, to acquire compulsorily the remaining Collagen Shares in respect of which the Offer has not been accepted on the same terms as the Offer.

Anticipated timetable

It is expected that the Offer Document, together with the Form of Acceptance, will be dispatched to Collagen Shareholders and, for information only, to the holders of options granted under the Collagen Share Schemes as soon as reasonably practicable and, in any event, within 28 days of this Announcement (or within such longer period as the Panel and Collagen may agree).

A full expected timetable of principal events will be set out in the Offer Document.

13. Cancellation of admission to trading on AIM and re‑registration

On completion of the Offer, Collagen will become a subsidiary of RDI. Following the Offer becoming, or being declared, unconditional in all respects and if RDI has by virtue of acceptances of the Offer acquired, or agreed to acquire, Collagen Shares which, together with Collagen Shares already owned by RDI represent at least 75 per cent. of the voting rights attaching to the Collagen Shares, RDI intends to procure that Collagen makes an application to the London Stock Exchange for the cancellation of the admission of the Collagen Shares to trading on AIM. It is anticipated that the intended cancellation would take effect no earlier than 20 Business Days after the date on which the Offer becomes, or is declared, unconditional in all respects. Should RDI not receive sufficient acceptances to the Offer to proceed with procuring such an application, then RDI intends, following completion of the Offer, to seek the cancellation of the admission of Collagen Shares to trading on AIM under the other provisions set out in Rule 41 of the AIM Rules.

The cancellation of the admission of the Collagen Shares to trading on AIM would significantly reduce the liquidity and marketability of any Collagen Shares in respect of which the Offer has not been accepted at that time and the value of any such Collagen Shares may be adversely affected as a consequence.

It is also intended that following the Offer becoming or being declared unconditional in all respects and the admission to trading on AIM of Collagen Shares having been cancelled, RDI will seek to re‑register Collagen as a private limited company under the relevant provisions of the Companies Act 2006.

14. Offer-related arrangements

Confidentiality Agreement

RDI and Collagen entered into a mutual confidentiality agreement on 24 April 2020 (the "Confidentiality Agreement") pursuant to which RDI and Collagen have undertaken to keep confidential information relating to the other party and not disclose it to third parties (other than to permitted persons) unless required by applicable law or regulation. Such confidentiality obligations will remain in force until completion of the Offer or otherwise for a period of 12 months from the date of the Confidentiality Agreement.

The Confidentiality Agreement also contains customary standstill and non-solicitation undertakings from RDI to Collagen in connection with the acquisition of interests in the securities of Collagen and existing Collagen employees.

15. Disclosure of interests in the Collagen Group's relevant securities

RDI confirms that within 10 Business Days of the date of this Announcement, it will make an Opening Position Disclosure, setting out the details required to be disclosed by it under Rule 8.1(a) of the Code.

Save for the 83,600,000 Collagen Shares held by RDI, which represent approximately 18.71 per cent. of Collagen's existing issued ordinary share capital, and the irrevocable undertakings referred to in section 6 above, as at the close of business on 26 August 2020 (being the last Business Day prior to the date of this Announcement), neither RDI nor any of the directors of RDI, nor so far as the directors of RDI are aware, any other person acting, or deemed to be acting, in concert (within the meaning of the Code) with RDI for the purposes of the Offer had:

(a) any interest in, or right to subscribe for, any relevant securities of Collagen;

(b) any short positions in respect of any relevant securities of Collagen (whether conditional or absolute and whether in-the-money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery of, relevant securities of Collagen;

(c) borrowed or lent any relevant securities of Collagen (save for any borrowed shares which have been either on-lent or sold);

(d) procured an irrevocable commitment or letter of intent to accept the Offer or to vote in favour of a Scheme of Arrangement in respect of any relevant securities of Collagen; nor

(e) any arrangement in relation to any relevant securities of Collagen. 

For these purposes, an "arrangement" includes any indemnity or option arrangement, any agreement or any understanding, formal or informal, of whatever nature, relating to the relevant securities of Collagen which is, or may be, an inducement to deal or refrain from dealing in such securities.

16. General

RDI reserves the right to elect, with the consent of the Panel, to implement the Offer by way of a Scheme of Arrangement as an alternative to the Offer. In such event, the Scheme of Arrangement would be made on substantially the same terms as those which would apply to the Offer (subject to appropriate amendments, including the requirement of Collagen Shareholders to vote, or procure the vote, in favour of a Scheme of Arrangement at the Scheme Meetings and the requirement for the sanction, or approval, of the Scheme of Arrangement by the High Court of England and Wales).

The Offer will be subject to the Conditions and certain further terms set out in Appendix I to this Announcement and to the full terms and conditions to be set out in the Offer Document and Form of Acceptance. The sources of information and bases of calculation contained in this Announcement are set out in Appendix II to this Announcement. A summary of the irrevocable undertakings is set out in Appendix III to this Announcement. Certain terms used in this Announcement are defined in Appendix IV to this Announcement.

The Offer Document will include full details of the Offer, together with the expected timetable of principal events, and will be accompanied by the Form of Acceptance. The Offer will be subject to the applicable requirements of the Code, the Panel, the London Stock Exchange, the AIM Rules and the FCA.

This Announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014 ("MAR"). Market soundings, as defined in MAR, were taken in respect of the Offer, with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this Announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to Collagen and its securities.

17. Consents

Strand Hanson has given and not withdrawn its consent to the publication of this Announcement with the inclusion in it of the references to its name and (where applicable) advice in the form and context in which they appear.

Goodbody has given and not withdrawn its consent to the publication of this Announcement with the inclusion in it of the references to its name and (where applicable) advice in the form and context in which they appear.

England & Company has given and not withdrawn its consent to the publication of this Announcement with the inclusion in it of the references to its name and (where applicable) advice in the form and context in which they appear.

18. Documents available on Collagen's website

Copies of the following documents will be made available, subject to certain restrictions relating to persons resident in any Restricted Jurisdiction, on Collagen's website at www.collagensolutions.com by no later than 12.00 noon (UK time) on 28 August 2020 until the end of the Offer Period:

· this Announcement;

· the irrevocable undertakings referred to in section 6 above and summarised in Appendix III to this Announcement;

· the Confidentiality Agreement; and

· the written consents provided by Strand Hanson, Goodbody and England & Company referred to in section 17 of this Announcement.

Neither the content of any website referred to in this Announcement nor the content of any website accessible from hyperlinks on such website is incorporated into, or forms part of, this Announcement.

Enquiries:

Important Notice

Strand Hanson Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial adviser to RDI and no-one else in connection with the Offer and other matters described in this Announcement and will not be responsible to anyone other than RDI for providing the protections afforded to clients of Strand Hanson Limited nor for providing advice in relation to the Offer, the contents of this Announcement or any other matter referred to herein. Neither Strand Hanson Limited nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Strand Hanson Limited in connection with this Announcement, any statement contained herein or otherwise.

England & Company LLC, through its wholly owned subsidiary, England Securities, LLC, is acting as joint financial adviser to Collagen and no-one else in connection with the Offer and other matters described in this Announcement and will not be responsible to anyone other than Collagen for providing the protections afforded to clients of England & Company LLC nor for providing advice in relation to the Offer, the contents of this Announcement or any other matter referred to herein. Neither England & Company LLC nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of England & Company LLC in connection with this Announcement, any statement contained herein or otherwise.

Goodbody Stockbrokers UC, trading as Goodbody, which is regulated in Ireland by the Central Bank of Ireland and in the UK by the Financial Conduct Authority, is acting as sole Rule 3 and joint financial adviser to Collagen and no-one else in connection with the Offer and other matters described in this Announcement and will not be responsible to anyone other than Collagen for providing the protections afforded to clients of Goodbody Stockbrokers UC nor for providing advice in relation to the Offer, the contents of this Announcement or any other matter referred to herein. Neither Goodbody Stockbrokers UC nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Goodbody Stockbrokers UC in connection with this Announcement, any statement contained herein or otherwise.

Cenkos Securities plc, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority is acting exclusively as nominated adviser and broker to Collagen and no-one else in connection with the Offer and other matters described in this Announcement and will not be responsible to anyone other than Collagen for providing the protections afforded to clients of Cenkos Securities plc nor for providing advice in relation to the Offer, the contents of this Announcement or any other matter referred to herein. Neither Cenkos Securities plc nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Cenkos Securities plc in connection with this Announcement, any statement contained herein or otherwise.

Further information

THIS ANNOUNCEMENT IS MADE PURSUANT TO RULE 2.7 OF THE CODE AND IS FOR INFORMATION PURPOSES ONLY AND IS NOT INTENDED TO, AND DOES NOT, CONSTITUTE OR FORM ANY PART OF, AN OFFER TO SELL OR AN INVITATION TO SUBSCRIBE FOR OR PURCHASE ANY SECURITIES OR THE SOLICITATION OF ANY VOTE OR APPROVAL IN ANY JURISDICTION PURSUANT TO THE OFFER OR OTHERWISE, NOR SHALL THERE BE ANY SALE, ISSUANCE OR TRANSFER OF THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT IN ANY JURISDICTION IN CONTRAVENTION OF APPLICABLE LAW.

The Offer will be subject to the Conditions and to the further terms and conditions to be set out in the Offer Document. The Offer is being made solely through the Offer Document (or any other document by which the Offer is made), which will contain the full terms and conditions of the Offer, including details of how to accept the Offer. Any acceptance in relation to the Offer should be made only on the basis of the information contained in the Offer Document and the Form of Acceptance. Collagen Shareholders are advised to read the Offer Document carefully, once it has been despatched.

This Announcement does not constitute a prospectus or prospectus equivalent document.

If you are in any doubt about the contents of this Announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

Overseas jurisdictions

The availability of the Offer and the release, publication and distribution of this Announcement in jurisdictions other than the United Kingdom may be restricted by the laws of those jurisdictions and therefore persons who are not resident in the United Kingdom into whose possession this Announcement comes should inform themselves about and observe any such restrictions. Failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction. In particular, the ability of persons who are not resident in the United Kingdom to participate in the Offer may be affected by the laws of the relevant jurisdictions in which they are located.

This Announcement has been prepared for the purposes of complying with English law, the Code and the AIM Rules and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws and regulations of jurisdictions outside the United Kingdom.

The Offer will be implemented in accordance with applicable English law and will be subject to the applicable requirements of the Code, the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority, the Panel and the rules of the London Stock Exchange (including the AIM Rules).

Unless otherwise determined by RDI or required by the Code, and permitted by applicable law and regulation, the Offer will not be made available directly or indirectly, in, into or from a Restricted Jurisdiction or any other jurisdiction where to do so would violate the laws in that jurisdiction and no person may accept the Offer from within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this Announcement, the Offer Document, the Form of Acceptance and all other documents relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction unless otherwise determined by RDI and as permitted by applicable law, and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in, into or from any Restricted Jurisdiction. All persons receiving this Announcement (including, without limitation, custodians, nominees and trustees) should observe these restrictions and any applicable legal or regulatory requirements of their jurisdiction and must not mail or otherwise forward, send or distribute this Announcement in, into or from any Restricted Jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Offer disclaim any responsibility or liability for the violation of such restrictions by any person. 

US shareholders

The Offer will be made for securities of an English company and is being made in the United States in compliance with, and in reliance on, Section 14(e) of the United States Securities Exchange Act of 1934 (the "Exchange Act"), Regulation 14E thereunder, and the exemption therefrom provided by Rule 14d-1(d) under the Exchange Act. The Offer will be made in the United States by RDI and no one else. The Offer is subject to disclosure and procedural requirements of the United Kingdom which are different from those in the United States. In addition, the payment and settlement procedures with respect to the Offer will comply with the relevant UK rules, which differ from US payment and settlement procedures. Neither the United States Securities Exchange Commission, nor any securities commission of any state or other jurisdiction of the United States, will approve the Offer or review or comment on the adequacy or completeness of this Announcement.

The receipt of cash pursuant to the Offer may have tax consequences in the United States and under other applicable tax laws and such consequences, if any, are not described herein. US Shareholders are urged to consult with their own legal, tax and financial advisers in connection with making a decision regarding the Offer.

To the extent permitted by applicable law, in accordance with, and to the extent permitted by, the Code and normal UK market practice, RDI or nominees or brokers of RDI (acting as agents) or their respective affiliates may from time to time make certain purchases of, or arrangements to purchase, Collagen Shares or other Collagen securities other than pursuant to the Offer at any time prior to completion of the Offer. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any such purchases, or arrangements to purchase, will comply with all applicable requirements of the Code, the AIM Rules and Regulation 14E under the US Exchange Act including Rule 14e-5, to the extent applicable. To the extent required to be disclosed in accordance with applicable regulatory requirements, information about any such purchases will be disclosed on a next day basis to the Panel and will be available from a Regulatory Information Service.

Canadian shareholders

The enforcement by holders of Collagen Shares in Canada, resident in Canada or with a registered address in Canada, and any custodian, nominee or trustee holding Collagen Shares for persons in Canada or with a registered address in Canada (collectively, "Canadian Shareholders") of civil liabilities under Canadian securities laws, to the extent applicable, may be affected adversely by the fact that each of the Company and RDI is incorporated or organised under the laws of a jurisdiction other than Canada, that some or all of their respective officers and directors are and will be residents of countries other than Canada, and that all or a substantial portion of the assets of the Company, RDI and such persons are and will be located outside Canada. As a result, it may be difficult or impossible for Canadian Shareholders to effect service of process within Canada upon the Company, RDI or their respective officers or directors, or to realise against them, upon judgments of courts of Canada predicated upon liabilities under Canadian securities laws.

Canadian Shareholders should be aware that the Offer described in this Announcement may have tax consequences in Canada and should consult their own tax advisers to determine the particular tax consequences to them of the Offer in light of their particular circumstances, as well as any tax consequences that may arise under the laws of any other relevant foreign, state, local or other taxing jurisdiction.

Further details in relation to Overseas Shareholders will be contained in the Offer Document.

Cautionary note regarding forward-looking statements

This Announcement (including information incorporated by reference in this Announcement) contains certain statements that are, or may be deemed to be, forward-looking statements with respect to RDI and/or Collagen. These forward-looking statements can be identified by the fact that they do not relate to historical or current facts. Forward-looking statements also often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "hope", "aims", "continue", "will", "may", "should", "would", "could" or other words of similar meaning. Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of RDI's or Collagen's operations and potential synergies resulting from the Offer; and (iii) the effects of government regulation on RDI's or Collagen's business. These statements are based on assumptions and assessments made by RDI and/or Collagen (as applicable) in light of their experience and perception of historical trends, current conditions, future developments and other factors they believe appropriate.

Forward-looking statements are not guarantees of future performance. Such forward-looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward-looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this Announcement. Neither RDI or the RDI Group nor Collagen or the Collagen Group assumes any obligation to update publicly or revise any forward-looking statement or other statements contained in this Announcement as a result of new information, future events or otherwise, except to the extent required by applicable law, the Panel or the Code.

There are several factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are changes in the global, political, economic, business and competitive environments, market and regulatory forces, future exchange and interest rates, changes in tax rates, and future business combinations or dispositions.

No member of the RDI Group or the Collagen Group nor any of their respective associates, directors, officers, employees or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur.

Except as expressly provided in this Announcement, no forward-looking or other statements have been reviewed by the auditors of the RDI Group or the Collagen Group. All subsequent oral or written forward-looking statements attributable to any member of the RDI Group or the Collagen Group, or any of their respective associates, directors, officers, employees or advisers, are expressly qualified in their entirety by the cautionary statement above.

No profit forecasts, quantified financial benefit statements or estimates

No statement in this Announcement is intended, or is to be construed, as a profit forecast, profit estimate or quantified financial benefit statement for any period. No statement in this Announcement should be interpreted to mean that earnings per Collagen Share for the current or future financial years would necessarily match or exceed the historical published earnings per Collagen Share.

Dealing and Opening Position Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in one per cent. or more of any class of relevant securities of Collagen 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) Collagen 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 p.m. (UK time) on the 10th Business Day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (UK 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 Collagen 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 one per cent. or more of any class of relevant securities of Collagen or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of Collagen 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) Collagen and (ii) any securities exchange offeror(s), 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 p.m. (UK 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 Collagen 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 Collagen and by any offeror and Dealing Disclosures must also be made by Collagen, 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 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.

Publication on a website and availability of hard copies

This Announcement and the documents required to be published pursuant to Rule 26 of the Code will be available free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Collagen's website at www.collagensolutions.com by no later than 12.00 noon (UK time) on the Business Day following this Announcement.

Neither the content of any website referred to in this Announcement nor the content of any website accessible from hyperlinks on such website is incorporated into, or forms part of, this Announcement.

A hard copy of this Announcement will be sent to Collagen Shareholders (other than Collagen Shareholders who have elected to receive electronic communications) in the near future. Collagen Shareholders may request a hard copy of this Announcement (and any information incorporated by reference in this Announcement) free of charge by contacting the Receiving Agent, Neville Registrars Limited, on 0121 585 1131 from within the UK or +44 (0) 121 585 1131 if calling from outside the UK between 9.00 a.m. to 5.00 p.m., Monday to Friday (except public holidays in England and Wales) or by submitting a request in writing to the Receiving Agent at Neville House, Steelpark Road, Halesowen, B62 8HD. Collagen Shareholders may also request that all future documents, announcements and information to be sent to them in relation to the Offer should be in hard copy form. If you have received this Announcement in electronic form, hard copies of this Announcement and any document or information incorporated by reference into this Announcement will not be provided unless such a request is made.

Rule 2.9 information

In accordance with Rule 2.9 of the Code, Collagen confirms that, as at the date of this Announcement, it has 446,878,910 ordinary shares of 1 penny each in issue and admitted to trading on AIM, with no shares held in treasury. The International Securities Identification Number of Collagen's ordinary shares is GB00B94T6Y14.

Information relating to Collagen Shareholders

Please be aware that addresses, electronic addresses and certain information provided by Collagen Shareholders, persons with information rights and other relevant persons for the receipt of communications from Collagen may be provided to RDI during the Offer Period as required under Section 4 of Appendix 4 of the Code to comply with Rule 2.11(c) of the Code.

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

Time

All times shown in this Announcement are UK times, unless otherwise stated.

Appendix I

Conditions and certain further terms of the Offer

Part A: The Conditions

1. The Offer shall be subject to the following Conditions:

(a) valid acceptances of the Offer being received (and not, where permitted, withdrawn) by no later than 1.00 p.m. (London time) on the First Closing Date of the Offer (or such later time(s) and/or dates(s) as RDI may, with the consent of the Panel or in accordance with the Code, decide) in respect of not less than 90 per cent. (or such lower percentage as RDI may decide) (i) in nominal value of Collagen Shares to which the Offer relates, and (ii) of the voting rights attached to those shares, provided that this Acceptance Condition will not be satisfied unless RDI and/or any member of the RDI Group shall have acquired or agreed to acquire (whether pursuant to the Offer or otherwise and including any existing holding of RDI), directly or indirectly, Collagen Shares carrying in aggregate more than 50 per cent. of the voting rights then normally exercisable at a general meeting of Collagen;

and for the purposes of this Acceptance Condition:

(i) Collagen Shares which have been unconditionally allotted but not issued before the Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of any outstanding subscription or conversion rights or otherwise, shall be deemed to carry the voting rights they shall carry upon issue; and

(ii) valid acceptances shall be deemed to have been received in respect of Collagen Shares which are treated for the purposes of Part 28 of the Companies Act 2006 as having been acquired or contracted to be acquired by RDI by virtue of acceptances of the Offer or otherwise;

(b) subject to Part B below and to the requirements of the Panel, the Offer will also be conditional upon the following matters, unless such Conditions (as amended as appropriate) have been satisfied (where capable of satisfaction) and continue to be satisfied or, where relevant, waived:

(i) all notifications and filings which are necessary in connection with the Offer having been made by the relevant party, all necessary waiting periods (including any extension to them) under any applicable legislation or regulations of any jurisdiction having expired, lapsed or been terminated, all necessary statutory or regulatory obligations in any relevant jurisdiction having been complied with and all Authorisations which in each case are necessary for or in respect of the Offer, its implementation or any acquisition of any shares in, or control or management of, Collagen or any other member of the Wider Collagen Group by any member of the Wider RDI Group, in each case where the absence of such notification, filing or application would have a material adverse effect on the Wider RDI Group or the Wider Collagen Group in each case taken as a whole, and all Authorisations necessary in respect thereof having been obtained on terms and in a form reasonably satisfactory to RDI from all Relevant Authorities or persons with whom any member of the Wider Collagen Group has entered into contractual arrangements (other than contractual arrangements which have been Fairly Disclosed) in each case where the direct consequence of a failure to make such notification or filing or to wait for the expiry, lapse or termination of any such waiting period or to comply with such obligation or obtain such Authorisation from such a person would have a material adverse effect on the Wider Collagen Group taken as a whole, and all such Authorisations, together with all Authorisations necessary to carry on the business of any member of the Wider Collagen Group, remaining in full force and effect at the time when the Offer becomes wholly unconditional and there being no intimation of any intention to revoke or not to renew, withdraw, suspend, withhold, modify or amend the same in consequence of the Offer becoming wholly unconditional;

(ii) no Relevant Authority having instituted, implemented or threatened any action, suit, proceedings, investigation, reference or enquiry, or enacted, made or proposed any statute, regulation, order or decision, or having taken any other steps or measures that would or might reasonably be expected to, in any case which would be material in the context of the Wider Collagen Group or the Wider RDI Group, as the case may be, when taken as a whole:

(A) make the Offer, its implementation or the acquisition or proposed acquisition of any shares or other securities in, or control over, Collagen or any member of the Wider Collagen Group by RDI or any member of the Wider RDI Group, illegal, void or unenforceable under the laws of any relevant jurisdiction or otherwise directly or indirectly materially restrict, restrain, prohibit, delay, frustrate or interfere in the implementation of or impose additional material conditions or obligations with respect to or otherwise materially challenge the Offer or such proposed acquisition in any case in a manner which is material in the context of the Wider Collagen Group when taken as a whole (including without limitation, taking any steps which would entitle the Relevant Authority to require any member of the Wider RDI Group to dispose of all or some of its Collagen Shares or restrict the ability of any member of the Wider RDI Group to exercise voting rights in respect of some or all of such Collagen Shares);

(B) require, prevent or materially delay a divestiture by any member of the Wider RDI Group of any shares or other securities in Collagen;

(C) except pursuant to Chapter 3 of Part 28 of the Companies Act 2006, impose any material limitation on, or result in a material delay in, the ability of RDI or Collagen or any member of the Wider RDI Group to acquire or hold or exercise effectively, directly or indirectly, any rights of ownership of shares or other securities in any member of the Wider Collagen Group or voting rights or management control over any member of the Wider Collagen Group;

(D) require, prevent or materially delay a divestiture by any member of the Wider RDI Group or the Wider Collagen Group of all or any material portion of their respective businesses, assets or properties or impose any material limitation on the ability of any of them to conduct their respective businesses or own their respective assets or properties;

(E) result in any member of the Wider Collagen Group or the Wider RDI Group ceasing to be able to carry on their business under any name under which it presently does so to an extent which is material and adverse to the relevant group taken as a whole;

(F) impose any material limitation on the ability of any member of the Wider RDI Group or of the Wider Collagen Group to integrate or co-ordinate its business, or any part of it, with the businesses or any part of the businesses of any other member of the Wider RDI Group or of the Wider Collagen Group in a manner that is materially adverse to the relevant group taken as a whole;

(G) otherwise affect any or all of the businesses, assets, prospects or profits of any member of the Wider RDI Group or any member of the Wider Collagen Group in a manner which is material and adverse to the relevant group taken as a whole; or

(H) other than in the implementation of the Offer pursuant to Chapter 3 of Part 28 of the Companies Act 2006, require the divestiture by any member of the Wider RDI Group of any shares, securities or other interests in any member of the Wider Collagen Group;

and all applicable waiting and other time periods during which any such Relevant Authority could institute, or implement or threaten any proceedings, suit, investigation or enquiry or enact, make or propose any such statute, regulation or order or take any other such step having expired, lapsed or been terminated;

(iii) except as Fairly Disclosed, there being no provision of any Authorisation or other instrument to which any member of the Wider Collagen Group is a party, or by or to which any such member, or any of its assets, is bound or subject, which could or might reasonably be expected, as a consequence of the Offer or of the proposed acquisition by RDI of any shares or other securities (or the equivalent) in Collagen or because of a change in, or control or management of, any member of the Wider Collagen Group, result, in any case to an extent which is material in the context of the Wider Collagen Group taken as a whole, in:

(A) any assets or interests of any member of the Wider Collagen Group being or falling to be disposed of or charged, or any right arising under which any such assets or interests could be required to be disposed of or charged or could cease to be available to any member of the Wider Collagen Group, other than in the ordinary course of business;

(B) any monies borrowed by or other indebtedness or material liabilities (actual or contingent) of, or any grant available to, any member of the Wider Collagen Group becoming repayable or being capable of being declared repayable immediately or earlier than its stated repayment date or the ability of such member of the Wider Collagen Group to incur any indebtedness becoming or being capable of being or becoming withdrawn or prohibited;

(C) any such Authorisation or other instrument being terminated or materially adversely modified, affected, amended or varied or any materially adverse action being taken or any onerous obligation or liability arising thereunder;

(D) the business or interests of any member of the Wider Collagen Group with any firm, body or person (or any arrangements relating to such business or interests) being terminated, modified, affected, amended or varied in any materially adverse manner;

(E) the value of or the financial or trading position or prospects of any member of the Wider Collagen Group being prejudiced or adversely affected;

(F) the creation of any liability (actual or contingent) by any member of the Wider Collagen Group other than in the ordinary course of business;

(G) any liability of any member of the Wider Collagen Group to make any severance, termination, bonus or other payment to any of its directors or other officers;

(H) the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of any member of the Wider Collagen Group or any such mortgage, charge or security (whenever arising or having arisen) becoming enforceable; or

(I) any member of the Wider Collagen Group ceasing to be able to carry on business under any name under which it currently does so,

and, except as Fairly Disclosed, no event having occurred which, under any provision of any Authorisation or other instrument to which any member of the Wider Collagen Group is a party, or by or to which any such member, or any of its assets, is bound, or subject, would reasonably be expected to result, in any case to an extent which is material and adverse in the context of the Wider Collagen Group taken as a whole, in any of the events or circumstances as are referred to in items (i) to (vii) inclusive of this section;

(iv) since 31 March 2020 and except as Fairly Disclosed:

(A) no enquiry or investigation by or complaint or reference to any Relevant Authority against or in respect of any member of the Wider Collagen Group or no criminal proceedings, litigation, arbitration proceedings, mediation proceedings, prosecution or other legal proceedings to which any member of the Wider Collagen Group is or may become a party (whether as claimant, defendant or otherwise) having been instituted or threatened or remaining outstanding against or in respect of any member of the Wider Collagen Group which in any case is material in the context of the Wider Collagen Group taken as a whole;

(B) no adverse change or deterioration having occurred in the business, assets, financial or trading position or profits of any member of the Wider Collagen Group which in any case is material in the context of the Wider Collagen Group taken as a whole;

(C) no contingent or other liability having arisen, become apparent or increased which in any case is material in the context of the Wider Collagen Group taken as a whole; and

(D) no steps having been taken and no omissions having been made which would reasonably be expected to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the Wider Collagen Group, which is material to, and necessary for the proper carrying on of, its business;

(v) since 31 March 2020 and except as Fairly Disclosed, neither Collagen nor any other member of the Wider Collagen Group having:

(A) issued or agreed to issue or authorised or announced its intention to authorise or propose the issue or grant of additional shares of any class, or securities convertible into or exchangeable for, or rights, warrants or options to subscribe for or acquire any such shares or convertible securities or transferred or sold any Collagen Shares out of treasury (save as between Collagen and any member of the Wider Collagen Group or between any members of the Wider Collagen Group and save for the issue of Collagen Shares in connection with the entitlements of participants under the Collagen Share Schemes, including any issue of Collagen Shares to an employee benefit trust);

(B) purchased, redeemed or repaid any of its own shares or other securities or reduced or made any other changes to its share capital, except in respect of the matters mentioned in Condition 1(b)(v)(A) above;

(C) recommended, declared, paid or made or proposed to recommend, declare, pay or make any dividend, bonus or other distribution whether payable in cash or otherwise, other than to Collagen or a wholly-owned subsidiary of Collagen;

(D) save for any transaction between Collagen and any member of the Wider Collagen Group or between any members of the Wider Collagen Group, merged with, demerged or acquired any body corporate, partnership or business or acquired or disposed of or transferred, mortgaged, charged or created any security interest over any assets or any right, title or interest in any assets (including shares in subsidiaries and trade investments) which in any case would be material in the context of the Wider Collagen Group taken as a whole;

(E) save for any transaction between Collagen and any member of the Wider Collagen Group or between any members of the Wider Collagen Group, issued or authorised the issue of any debentures or incurred or increased any indebtedness or liability or become subject to a contingent liability which in any case is material in the context of the Wider Collagen Group taken as a whole;

(F) entered into, varied or authorised any arrangement, transaction, contract or commitment other than in the ordinary course of business (whether in respect of capital expenditure or otherwise) which is of a long-term, onerous or unusual nature or which involves an obligation of a nature and magnitude which is material in the context of the Wider Collagen Group taken as a whole or is likely to materially restrict the scope of the existing business of any member of the Wider Collagen Group other than to a nature and extent which is normal in the context of the business concerned;

(G) save for any transaction between Collagen and any member of the Wider Collagen Group or between any members of the Wider Collagen Group, entered into, implemented, effected or authorised any merger, demerger, reconstruction, amalgamation, scheme, commitment or other transaction or arrangement (other than the Offer) in relation to itself or another member of the Wider Collagen Group otherwise than in the ordinary course of business which in any case is material in the context of the Wider Collagen Group taken as a whole;

(H) otherwise than in the ordinary course of business, waived or compromised any claim which is material in the context of the Wider Collagen Group taken as a whole;

(I) taken any corporate action or had any legal proceedings started or threatened against it for its winding up (whether voluntary or otherwise), dissolution or reorganisation or analogous proceedings in any jurisdiction or for the appointment of a receiver, trustee, administrator, administrative receiver or similar officer in any jurisdiction of all or any of its assets and revenues or had any such person appointed which in any case is material in the context of the Wider Collagen Group taken as a whole;

(J) taken or proposed any steps, corporate action or had any legal proceedings instituted or threatened against it in relation to the suspension of payments or a moratorium of any indebtedness that is material in the context of the Wider Collagen Group taken as a whole;

(K) been unable or admitted in writing that it is unable to pay its debts or having stopped or suspended (or threatened to do so) payments of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business in any case which is material in the context of the Wider Collagen Group taken as a whole;

(L) save for any transaction between Collagen and any member of the Wider Collagen Group or between any members of the Wider Collagen Group made or authorised any change in its loan capital which is material in the context of the Wider Collagen Group taken as a whole;

(M) entered into or varied in any material respect the terms of any letter of appointment or service agreement (as the case may be) with or relating to any of the executive directors, non‑executive directors or senior executives of Collagen or any of the directors or senior executives of any other member of the Wider Collagen Group;

(N) proposed, agreed to provide or modified in any material respect the terms of any share option scheme, incentive scheme or, other than in the ordinary course of business, any other benefit relating to the employment or termination of employment of any person employed by the Wider Collagen Group which in any case is material in the context of the Wider Collagen Group taken as a whole;

(O) save as envisaged in the Offer, made any alteration to its Articles of Association or other incorporation or constitutional documents which is material in the context of the Offer; or

(P) otherwise than in the ordinary course of business entered into any agreement or commitment or passed any resolution or made any offer which remains open for acceptance or proposed or announced any intention with respect to any of the transactions, matters or events referred to in this paragraph (v);

(vi) RDI not having discovered that, except as Fairly Disclosed:

(A) any financial, business or other information concerning the Wider Collagen Group disclosed publicly or disclosed to any member of the Wider RDI Group by any member of the Wider Collagen Group prior to the date of this Announcement is to a material extent misleading, contains a material misrepresentation of fact or omits to state a fact necessary to make the information therein not misleading to a material extent and which was not corrected before the date of this Announcement either by public disclosure through a Regulatory Information Service or by a written disclosure to the Wider RDI Group and which is material in the context of the Wider Collagen Group taken as a whole; or

(B) any information which affects the import of any information disclosed to any member of the Wider RDI Group at any time by or on behalf of any member of the Wider Collagen Group which is material in the context of the Wider Collagen Group taken as a whole; or

(C) any member of the Wider Collagen Group has not complied with any applicable legislation or regulations of any relevant jurisdiction with regard to the use, storage, transport, treatment, handling, disposal, release, discharge, spillage, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or harm human health, or otherwise relating to environmental matters or the health and safety of any person where non-compliance would be likely to give rise to any liability or cost (whether actual or contingent) on the part of any member of the Wider Collagen Group which in any case is material in the context of the Wider Collagen Group taken as a whole; or

(D) there has been an emission, discharge, disposal, spillage or leak of waste or hazardous substance or any substance likely to impair the environment or harm human health which would be likely to give rise to any liability or cost (whether actual or contingent) on the part of any member of the Wider Collagen Group which in any case is material in the context of the Wider Collagen Group taken as a whole; or

(E) there is or is likely to be any liability (whether actual or contingent) to improve or install new plant or equipment or make good, repair, reinstate or clean up any property now or previously owned, occupied or made use of by any past or present member of the Wider Collagen Group under any environmental legislation, regulation, notice, circular or order of any Relevant Authority or any other person or body in any jurisdiction which in any case is material in the context of the Wider Collagen Group taken as a whole; or

(F) circumstances exist whereby a person or class of person would be likely to have any claim or claims in respect of any product or process of manufacture or materials used therein now or previously manufactured, sold or carried out by any past or present member of the Wider Collagen Group which in any case is material in the context of the Wider Collagen Group taken as a whole; and

(vii) except as Fairly Disclosed, no member of the Wider Collagen Group nor the trustees of any relevant pension scheme having, since 31 March 2020 (and in each case to an extent which is material and adverse in the context of the Wider Collagen Group taken as a whole):

(A) made or agreed or consented to any significant change (i) to the terms of any trust deeds constituting the pension schemes established for the directors or employees (or their dependants) of any member of the Wider Collagen Group, (ii) to the benefits which accrue, (iii) to the pensions which are payable thereunder for all members or any category of members, (iv) to the basis on which qualification for, or accrual or entitlement to, such benefits or pensions are calculated or determined for all members or any category of members (including with regard to commutation factors where employer agreement is required to change such factors), or (v) to the basis on which the liabilities (including pensions) of such pension schemes are funded (including putting in place, agreeing or consenting to technical provisions, actuarial valuations, statements of funding principles, schedules of contributions and recovery plans pursuant to Part 3 of the Pensions Act 2004); or

(B) established any new pensions arrangements.

Part B: Waiver of Conditions and further terms of the Offer

1. RDI reserves the right (subject to the requirements of the Code and the Panel) to waive in whole or in part all or any of the above Conditions, other than the Acceptance Condition.

2. If RDI is required by the Panel to make an offer for Collagen Shares under the provisions of Rule 9 of the Code, RDI may make such alterations to the terms and conditions of the Offer (including the Acceptance Condition) as are necessary to comply with the provisions of that Rule, and such offer shall be subject to the terms and conditions as so amended.

3. The Offer will lapse unless all the Conditions to the Offer have been fulfilled or (if capable of waiver) waived or, where appropriate, determined by RDI to have been or remain satisfied by midnight (London time) on the date which is 21 days after the later of the First Closing Date and the date on which the Offer becomes, or is declared, unconditional as to acceptances (or such later date (if any) as RDI may, with the consent of the Panel or in accordance with the Code, decide).

4. RDI shall be under no obligation to waive (if capable of waiver), to determine to be or remain satisfied or to treat as fulfilled any of the Conditions except for the Acceptance Condition by a date earlier than the latest date for the fulfilment of that condition notwithstanding that the other Conditions of the Offer may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such Conditions may not be capable of fulfilment.

5. The Offer will lapse if, before 1.00 p.m. (London time) on the First Closing Date or the date on which the Offer becomes, or is declared, unconditional as to acceptances (whichever is later):

a. in so far as the Offer or any matter arising from or relating to the Offer constitutes a concentration with a Community dimension within the scope of Council Regulation (EC) 139/2004 (the "Regulation"), the European Commission initiates proceedings under Article 6(1)(c) of the Regulation or makes a referral under Article 9(1) of the Regulation to the CMA and the CMA makes a CMA Phase 2 Reference; or

b. in so far as the Offer or any matter arising from or relating to the Offer becomes subject to a CMA Phase 2 Reference. 

6. If the Offer lapses, not only will the Offer cease to be capable of further acceptance but also Collagen Shareholders and RDI will thereafter cease to be bound by prior acceptances.

7. RDI reserves the right to elect (with the consent of the Panel) to implement the Offer by way of a court-sanctioned Scheme of Arrangement. In such event, the Offer will be implemented on substantially the same terms as those which would apply to the Offer, subject to appropriate amendments to reflect the change in method (including statutory voting requirements).

8. The availability of the Offer to persons not resident in the United Kingdom may be affected by the laws of the Restricted Jurisdictions. Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements.

9. Unless otherwise determined by RDI or required by the Code and permitted by applicable law and regulation, the Offer is not being, and will not be, made, directly or indirectly, in or into or by the use of the mails of, or by any other means or instrumentality (including, without limitation, facsimile transmission, telex, telephone, internet or other forms of electronic transmission) of interstate or foreign commerce of, or by any facility of a national, state or other securities exchange of, any Restricted Jurisdiction and will not be capable of acceptance by any such use, means, instrumentality or facility or from within any Restricted Jurisdiction, unless otherwise determined by RDI and as permitted by applicable law.

10. Under Rule 13.5 of the Code, RDI may only invoke a Condition so as to cause the Offer not to proceed, to lapse or to be withdrawn where the circumstances which give rise to the right to invoke the Condition are of material significance to the RDI Group in the context of the Offer. Whether any Condition is capable of being invoked by RDI would be determined by the Panel. The Acceptance Condition is not subject to Rule 13.5 of the Code.

11. Collagen Shares will be acquired pursuant to the Offer fully paid with full title guarantee and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and any third party interests and other rights of any nature whatsoever and together with all rights now or hereafter attaching thereto, including voting rights and the right to receive and retain in full all dividends and other distributions (if any), and any other return of capital (whether by way of reduction of share capital or share premium account or otherwise), declared, made or paid on or after the date of this Announcement.

12. If, on or after the date of this Announcement and before the Offer becomes or is declared wholly unconditional, any dividend, other distribution and/or other return of capital is authorised, declared, made or paid or becomes payable in respect of the Collagen Shares, RDI reserves the right to reduce the consideration payable under the terms of the Offer for the Collagen Shares by an amount of up to the amount of such dividend, distribution and/or return of capital, in which case any reference in this Announcement or in the Offer Document to the consideration payable under the terms of the Offer will be deemed to be a reference to the consideration as so reduced. To the extent that any such dividend, distribution and/or other return of capital is authorised, declared, made or paid or is payable and it is: (i) transferred pursuant to the Offer on a basis which entitles RDI to receive the dividend, distribution or return of capital and to retain it; or (ii) cancelled, the consideration payable under the terms of the Offer will not be subject to change in accordance with this paragraph. Any exercise by RDI of its rights referred to in this paragraph shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the Offer.

13. The Offer and any dispute or claim arising out of, or in connection with, it (whether contractual or non-contractual in nature) will be governed by the laws of England and Wales and be subject to the jurisdiction of the courts of England and Wales. The Offer will also be subject to the applicable requirements of the Code, the Panel, the London Stock Exchange, the FCA and the AIM Rules. In addition, it will be subject to the terms and conditions set out in the Offer Document.

14. Each of the Conditions shall be regarded as a separate Condition and shall not be limited by reference to any other Condition.

Appendix II

SOURCES OF INFORMATION AND BASES OF CALCULATION

In this Announcement, unless otherwise stated, or the context otherwise requires, the following bases and sources have been used:

1. The value attributed to the fully diluted share capital of Collagen is based upon: (i) the Offer Price; (ii) the 446,878,910 Collagen Shares in issue; and (iii) 20,950,764 Collagen Shares subject to outstanding in-the-money options and warrants that are currently anticipated to be satisfied by the issue of new Collagen Shares; in each case as at 26 August 2020 (being the last Business Day prior to the date of this Announcement).

2. The maximum cash consideration payable pursuant to the Offer is based upon: (i) the Offer Price; (ii) the 363,278,910 Collagen Shares to which the Offer relates and not already owned by RDI; and (iii) the 20,950,764 Collagen Shares subject to outstanding in-the-money options and warrants; in each case as at 26 August 2020 (being the last Business Day prior to the date of this Announcement). 

3. Unless otherwise stated, all prices for Collagen Shares are Closing Prices for the particular date(s) concerned.

4. The volume weighted average price of 1.72 pence per Collagen Share over the three month period up to and including 15 April 2020, is derived from Bloomberg's daily volume weighted average price data. 

5. Unless otherwise stated, the financial information relating to the Collagen Group has been extracted or derived (without material adjustment) from Collagen's preliminary unaudited consolidated financial statements for the financial year ended 31 March 2020 and audited consolidated financial statements for the financial year ended 31 March 2019 prepared in accordance with IFRS.

6. All information relating to RDI has been provided by persons duly authorised by the RDI Board.

7. All information relating to Collagen has been extracted from published sources and/or provided by persons duly authorised by Collagen.

8. The multiple of approximately 7.58 times Collagen's unaudited revenue for the year ended 31 March 2020 is calculated as the Offer Price multiplied by the issued and to be issued ordinary share capital of Collagen on a fully diluted basis, as set out in paragraph 1 above, divided by Collagen's unaudited revenue for the year ended 31 March 2020 of £4.01 million.

9. Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

Appendix III

DETAILS OF IRREVOCABLE UNDERTAKINGS

1. Irrevocable undertakings

Collagen Directors

The Independent Collagen Directors have given irrevocable undertakings to accept, or procure the acceptance of, the Offer (or if RDI exercises its right to structure the Offer as a Scheme of Arrangement, to vote in favour of such Scheme of Arrangement at the Scheme Meetings) as follows:

* - the undertakings and the numbers referred to above refer only to those Collagen Shares to which the relevant director is beneficially entitled or any Collagen Share such director is otherwise able to control the exercise of in terms of the rights attaching to such Collagen Share, including the ability to procure the transfer of such Collagen Share. The numbers referred to in this table exclude any award that may be outstanding under the Collagen Share Schemes, however any such Collagen Shares subsequently acquired pursuant to those awards would be included in the scope of the undertakings. The Collagen Directors holding awards under the Collagen Share Schemes also have the ability under the irrevocable undertakings to sell Collagen Shares to satisfy or meet any liability to income tax, national insurance or social security contributions arising from the grant, exercise or vesting of awards under the Collagen Share Schemes in connection with the Offer or the proposals to be made by RDI in respect of the awards.

** - excluding any Collagen Shares to be issued in satisfaction of outstanding in-the-money options and warrants.

The Independent Collagen Directors' irrevocable undertakings shall lapse and cease to become binding, inter alia, if:

(i) the Offer Document is not published within 28 days of this Announcement (or within such longer period as the Panel and Collagen may agree);

(ii) the Offer lapses or is withdrawn without becoming or being declared unconditional in all respects unless: (a) this is as a result of RDI exercising its right to implement the Offer by way of a Scheme of Arrangement; or (b) a new, revised or replacement Offer or Scheme of Arrangement is announced by RDI within seven (7) business days of the lapse or withdrawal of the Offer, provided that the terms of such new, revised or replacement Offer or Scheme of Arrangement are no less favourable to all Collagen Shareholders as the terms set out in this Announcement; or

(iii) RDI announces, with the consent of the Panel, that it does not intend to proceed with the Offer.

Institutional and other Collagen Shareholders

The following Collagen Shareholders have in addition given irrevocable undertakings to accept the Offer (or if RDI exercises its right to structure the Offer as a Scheme of Arrangement, to vote in favour of such Scheme of Arrangement at the Scheme Meetings) as follows:

* - excluding any Collagen Shares to be issued in satisfaction of outstanding in-the-money options and warrants.

The irrevocable undertaking from Mr David Evans shall lapse and cease to be binding, inter alia, if:

(i) the Offer Document is not published within 28 days of this Announcement (or within such longer period as the Panel and Collagen may agree);

(ii) the Offer lapses or is withdrawn without becoming or being declared unconditional in all respects unless: (a) this is as a result of RDI exercising its right to implement the Offer by way of a Scheme of Arrangement; or (b) a new, revised or replacement Offer or Scheme of Arrangement is announced by RDI within seven (7) business days of the lapse or withdrawal of the Offer, provided that the terms of such new, revised or replacement Offer or Scheme of Arrangement are no less favourable to all Collagen Shareholders as the terms set out in this Announcement; or

(iii) RDI announces, with the consent of the Panel, that it does not intend to proceed with the Offer.

The irrevocable undertakings for Seneca Partners Limited and Calculus Capital Limited shall lapse and cease to be binding, inter alia, if:

(i) a competing offer from a third party for the entire issued and to be issued ordinary share capital of Collagen (other than any shares owned by such person or any person acting in concert with it) is made in accordance with Rule 2.7 of the Code (whether by way of a takeover offer or Scheme of Arrangement) within 14 days of posting of the Offer Document provided that the value of that offer as at the date it is made exceeds 7.25 pence (and in respect of non cash offers this determination must be in the reasonable opinion of the Independent Collagen Directors);

(ii) if the Offer Document is not published within 28 days of this Announcement (or within such longer period as the Panel and Collagen may agree);

(iii) the Offer lapses or is withdrawn without becoming or being declared unconditional in all respects unless: (a) this is as a result of RDI exercising its right to implement the Offer by way of a Scheme of Arrangement; or (b) a new, revised or replacement Offer or Scheme of Arrangement is announced by RDI within seven (7) business days of the lapse or withdrawal of the Offer, provided that the terms of such new, revised or replacement Offer or Scheme of Arrangement are no less favourable to all Collagen Shareholders as the terms set out in this Announcement; or

(iv) RDI announces, with the consent of the Panel, that it does not intend to proceed with the Offer.

The irrevocable undertakings for Helium Rising Stars Fund Limited, Rathbone Investment Management Limited, Mr Peter Meyer and 1615915 Alberta Limited shall lapse and cease to be binding, inter alia, if:

(i) a competing offer from a third party for the entire issued and to be issued ordinary share capital of Collagen (other than any shares owned by such person or any person acting in concert with it) is made in accordance with Rule 2.7 of the Code (whether by way of a takeover offer or Scheme of Arrangement) within 14 days of posting of the Offer Document provided that: (a) the Independent Collagen Directors recommend that offer; and (b) the value of that offer as at the date it is made exceeds 7.25 pence (and in respect of non cash offers this determination must be in the reasonable opinion of the Independent Collagen Directors);

(ii) if the Offer Document is not published within 28 days of this Announcement (or within such longer period as the Panel and Collagen may agree);

(iii) the Offer lapses or is withdrawn without becoming or being declared unconditional in all respects unless: (a) this is as a result of RDI exercising its right to implement the Offer by way of a Scheme of Arrangement; or (b) a new, revised or replacement Offer or Scheme of Arrangement is announced by RDI within seven (7) business days of the lapse or withdrawal of the Offer, provided that the terms of such new, revised or replacement Offer or Scheme of Arrangement are no less favourable to all Collagen Shareholders as the terms set out in this Announcement; or

(iv) RDI announces, with the consent of the Panel, that it does not intend to proceed with the Offer.

The irrevocable undertaking for Gresham House Asset Management Limited shall lapse and cease to be binding, inter alia, if:

(i) a competing offer from a third party (other than a company controlled by RDI) for the entire issued share capital of Collagen is announced at a price which exceeds 7.25 pence per ordinary share of Collagen (which may include where such competing offer is not for cash consideration, provided that in respect of such a non cash competing offer this determination is in the reasonable opinion of the board of Collagen);

(ii) the Offer Document is not dispatched within 28 days after the date of this Announcement; or

(iii) the Offer lapses or is withdrawn.

 APPENDIX IV

DEFINITIONS

The following definitions apply throughout this Announcement unless the context requires otherwise:

For the purposes of this Announcement, "subsidiary", "subsidiary undertaking", "parent undertaking", "undertaking" and "associated undertaking" have the respective meanings given thereto by the Companies Act 2006.

All references to "GBP", "pounds", "pounds Sterling", "Sterling", "£", "pence", "penny" and "p" are to the lawful currency of the United Kingdom.

All times referred to in this Announcement are UK times unless otherwise stated.

In this Announcement, references to the singular include the plural and vice versa, unless the context otherwise requires and words importing the masculine gender shall include the feminine or neutral gender.

All references to legislation in this Announcement are to English legislation unless the contrary is stated.

Any references to any provision of any legislation shall include any amendment, modification, re-enactment or extension thereof.

END