Elementis Regulatory News (ELM)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

FOR IMMEDIATE RELEASE

20 April 2021

Elementis plc

Response to Innospec Inc. announcement

The Board of Elementis plc ("Elementis" or the "Company") notes the announcement by Innospec Inc. ("Innospec") and confirms that on 31 March 2021 it received a conditional proposal from Innospec in relation to a potential offer for Elementis of 160p per Elementis share (the "Conditional Proposal"). The Conditional Proposal would have been satisfied in Innospec shares with a partial cash alternative available of up to 50% of the consideration together with a mix and match facility.

The Board, together with its management and advisers, assessed the Conditional Proposal against its rigorous valuation framework comparing it against an assessment of the fundamental value of Elementis as well as the likely value to be created by the continued delivery of its strategy and its medium term performance objectives.

The Board concluded that the Conditional Proposal significantly undervalued Elementis and fell meaningfully short of the value creation potential for Elementis shareholders based on Elementis' existing strategy. In addition, the substantial element of the consideration being in Innospec shares made this Conditional Proposal less attractive for Elementis shareholders. The Board's assessment is supported by the strong momentum in the business and by an encouraging start to 2021.

Accordingly, on 9 April 2021 the Board unanimously rejected the Conditional Proposal.

Andrew Duff, Chairman of Elementis, said:

"The Board firmly believes in the attractive value to be delivered for Elementis shareholders through the execution of our strategy. Against a significantly weaker demand environment in 2020 brought about by the Covid-19 pandemic, management took swift action to reduce costs and position the business for recovery. The business has good momentum and is delivering on its Innovation, Growth and Efficiency strategy with clear medium term objectives that will deliver significant value to Elementis shareholders. This Conditional Proposal does not reflect this value.

The Board of Elementis would always consider the merits of an engagement at a level that offers attractive value to its shareholders and that reflects the nature of its high margin activities with strong underlying growth prospects. However, having reviewed the Conditional Proposal from Innospec carefully, we are confident that the best value for shareholders will be delivered through the independent execution of our strategy and building on the encouraging start to trading in 2021."

Enquiries

Important notices

N.M. Rothschild & Sons Limited ("Rothschild & Co"), which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for Elementis and for no one else in connection with the subject matter of this announcement and will not be responsible to anyone other than Elementis for providing the protections afforded to its clients or for providing advice in connection with the subject matter of this announcement.

J.P. Morgan Securities plc (which conducts its UK investment banking business as J.P. Morgan Cazenove) ("J.P. Morgan Cazenove") which is authorised in the United Kingdom by the PRA and regulated in the United Kingdom by the PRA and the FCA, is acting exclusively for Elementis and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters set out in this announcement and will not be responsible to anyone other than Elementis for providing the protections afforded to clients of J.P. Morgan Cazenove or its affiliates, nor for providing advice in relation to any matter referred to herein.

Numis Securities Limited ("Numis"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as Corporate Broker exclusively for Elementis PLC and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than Elementis PLC for providing the protections afforded to clients of Numis, nor for providing advice in relation to any matter referred to herein.

This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to this announcement or otherwise. Any offer, if made, will be made solely by certain offer documentation which will contain the full terms and conditions of any offer, including details of how it may be accepted. The distribution of this announcement in jurisdictions other than the United Kingdom and the availability of any offer to shareholders of Elementis who are not resident in the United Kingdom may be affected by the laws of relevant jurisdictions. Therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom or shareholders of Elementis who are not resident in the United Kingdom will need to inform themselves about, and observe any applicable requirements