Tekmar Group P. Regulatory News (TGP)

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

THIS IS AN ANNOUNCEMENT FALLING UNDER RULE 2.4 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND DOES NOT CONSTITUTE AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CODE AND THERE CAN BE NO CERTAINTY THAT ANY FIRM OFFER WILL BE MADE, NOR AS TO THE TERMS ON WHICH ANY OFFER WILL BE MADE

THIS ANNOUNCEMENT CONTANS INSIDE INFORMATION FOR IMMEDIATE RELEASE

13 June 2022

Tekmar Group plc ("Tekmar" or the "Company") Commencement of Formal Sale Process

As set out in the Company's interim results published today, the Company and its subsidiaries (together, "the Group") is beginning to emerge from challenging global trading conditions. Under the current management, the Group's overall business strategy has been reviewed and repositioned to take advantage of the significant growth opportunities as the industry recovers from the downturn caused by the pandemic. There are clear signs that the market is recovering and that the Group is now well positioned to benefit from this as recent contract wins have demonstrated.

Over the past year Tekmar has taken steps to improve its financial position, including enhancing its banking facilities, improving the efficiency of its contract tendering systems and more recently raising net proceeds of £3.7 million from a placing and open offer. However, despite all the steps taken, the Group's balance sheet has not been rebuilt and strengthened as much as Tekmar's board of directors ("Board") would have preferred in order to fully execute its growth strategy and address the industry headwinds and uncertainties that still remain.

Whilst the Group is currently operating with sufficient working capital for its present requirements, the combination of sustained trading losses and increased pressure on working capital mean that the Group may not have the necessary cash to make all the required investment to deliver fully the turnaround strategy to return the Group to profitable cash generation within the timescale targeted by the Board.

In light of these matters, the Board considers that the Group's best interests would be served by seeking a strategic partner to support its opportunities for growth and provide additional balance sheet strength. Accordingly, the Board has now determined to undertake a review of the strategic options open to it in order to maximise value for shareholders. These options include, but are not limited to, a sale of the Company which will be conducted under the framework of a "formal sale process" in accordance with the Takeover Code.

The Board has appointed Bamburgh Capital Ltd ("Bamburgh") as its financial adviser to manage the formal sale process. Any interested party should contact Bamburgh, whose contact details are set out below.

Formal sale process:

The Takeover Panel has agreed that any discussions with third parties in relation to an offer for the Company will take place within the context of a "formal sale process" as defined in the Code in order to enable conversations with parties interested in making such a proposal to take place on a confidential basis.

The Company intends to conduct a targeted process, focused on securing a strategic partner who understands and values the full potential of the Company. The first phase of the process is expected to be based on public information only and interested parties will be invited to submit non-binding indicative offers to Bamburgh. It is currently expected that a select number of parties will be invited to participate in a second phase. Those parties will be required, at the appropriate time, to enter into a non-disclosure and standstill agreement with The Company on terms satisfactory to the Board and on the same terms, in all material respects, as other selected parties. Following execution of the non-disclosure agreement, the Company intends to provide interested parties with certain information materials on the Company and the Group. Following receipt of the information materials, interested parties shall be invited to submit final proposals to the Company. Further announcements regarding timings and procedures for the formal sale process will be made as appropriate.

The Takeover Panel has granted a dispensation from the requirements of Rules 2.4(a), 2.4(b) and 2.6(a) of the Code such that any interested party participating in the formal sale process will not be required to be publicly identified (subject to note 3 to Rule 2.2 of the Code) and will not be subject to the 28 day deadline referred to in Rule 2.6(a), for so long as it is participating in the formal sale process.

The Company is not currently in discussions with, nor in receipt of an approach from any potential offeror relating to an acquisition of the issued and to be issued share capital of the Company.

Shareholders are advised that there can be no certainty that any offer(s) will be made, nor as to the terms of any offer, and thus whether any offer will be completed.

The Board reserves the right to alter any aspect of the process or to terminate it at any time and in such cases will make an announcement as appropriate.

The Board also reserves the right to reject any approach or terminate discussions with any interested party or participant at any time.

The person responsible for arranging the release of this announcement on behalf of the Company is Derek Bulmer, Chief Financial Officer.

Enquiries

Tekmar Group plc

Alasdair MacDonald, CEO +44 (0)1325 349 050

Derek Bulmer, CFO

Bamburgh Capital Ltd (Rule 3 Adviser and Joint Financial Adviser)

Murdo Montgomery +44 (0)131 376 0901

Richard Evans +44 (0)161 521 0286

Alex Clarkson +44 (0)161 240 7550

(email addresses: firstname@bamburghcapital.com)

Singer Capital Markets (Nominated Adviser, Joint Financial Adviser and Broker)

Rick Thompson +44 (0)20 7496 3000

Rachel Hayes

Inside Information

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) no. 596/2014 (as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018). On the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

Notice related to financial adviser

Bamburgh Capital Ltd, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for the Company and for no one else in connection with the subject matter of this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in connection with the subject matter of this announcement.

Singer Capital Advisory LLP, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for the Company and for no one else in connection with the subject matter of this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in connection with the subject matter of this announcement.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4). Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Takeover Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Rule 26.1 disclosure

In accordance with Rule 26.1 of the Code, a copy of this announcement will be available (subject to certain restrictions relating to persons resident in restricted jurisdictions) at https://investors.tekmar.co.uk/investors/investor-centre/ by no later than 12 noon (London time) on the business day following the date of this announcement. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

Rule 2.9 information

In accordance with Rule 2.9 of the Code, the Company confirms that as at the close of business on 10 June 2022 its issued share capital consisted of 60,960,234 ordinary shares of 1 pence each. The International Securities Identification Number for the Company's ordinary shares is GB00BDFGGK53.

Additional Information

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 the Company 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 the Company who are not resident in the United Kingdom will need to inform themselves about and observe any applicable requirements.