Therapeutic Antibodi - Proposed Merger with Proteus
May 20 1999 - 3:33AM
UK Regulatory
RNS No 5193a
THERAPEUTIC ANTIBODIES INC
20 May 1999
PROTEUS INTERNATIONAL PLC ("PROTEUS")
THERAPEUTIC ANTIBODIES INC ("THERAPEUTIC ANTIBODIES")
PROPOSED MERGER OF PROTEUS AND THERAPEUTIC ANTIBODIES
20 May 1999
INTRODUCTION
The Boards of Proteus and Therapeutic Antibodies are pleased
to announce that they have agreed a share for share merger
of Proteus and Therapeutic Antibodies (the "Merger")
accompanied by a conditional non pre-emptive placing of
23,325,000 new Proteus Ordinary Shares at 40p per share (the
"Placing Price") to raise approximately #7.0 million net of
expenses (the "Placing") for the enlarged group, which at
the Placing price has a value of #63.1 million. Upon the
Merger becoming effective, Therapeutic Antibodies
shareholders will receive 1.163 Proteus Ordinary Shares for
each Share of Common Stock. The Merger is subject to the
approval of shareholders of both Proteus and Therapeutic
Antibodies. It is expected that shareholders' meetings of
both companies will be held in late August 1999.
Proteus is announcing today its preliminary results for the
year ended 31 March 1999 and an update of its drug
development portfolio. Included in this announcement is the
news that Proteus' Angiotensin Immunotherapeutic anti-
hypertensive drug candidate has recently entered human
clinical trials.
Therapeutic Antibodies announced on 18 May 1999 its
financial results for the quarter ended 31 March 1999 and
gave an update of its drug development portfolio. This
announcement contained news that Therapeutic Antibodies'
Phase IIb study of CytoTAb in sepsis, which was terminated
early last year, has demonstrated statistically significant
clinical results against certain primary endpoints.
David Gration, the Chairman of Proteus, said:
"Proteus and Therapeutic Antibodies have complementary
product portfolios, technology skills and management teams.
The Merger represents an opportunity to create a more
broadly based, more resilient group with a strong product
pipeline."
Stuart Wallis, the Chairman of Therapeutic Antibodies, said:
"Proteus and Therapeutic Antibodies are two well matched
companies whose combination will create a stronger
platform for enhancing shareholder value. There is a
good management fit and the combined portfolios provide
a broader, more balanced pipeline from pre-clinical to
launched products"
Enquiries:
Proteus Therapeutic Antibodies
David Gration Stuart Wallis (0171 553 1483)
Barry Riley Andrew Heath (0171 606 8637)
(01625 500555)
WestLB Panmure British Linen Bank
Christopher Collins Tony Brown
Ronald Openshaw 0171 710 8800
0171 638 4010
Deloitte & Touche Corporate Finance
Robin Binks
Tim Cofman
0171 936 3000
Buchanan Communications The Maitland Consultancy
Tim Andersen William Clutterbuck
Lisa Baderoon Laura Frost
0171 466 5000 0171 379 5151
THE MERGER AND ITS TERMS AND CONDITIONS
Merger ratio
Upon completion of the Merger, each Therapeutic Antibodies
shareholder will receive 1.163 Proteus Ordinary Shares for
each Therapeutic Antibodies Share of Common Stock. The
Merger will involve the issue of up to 60,542,545 new
Proteus Ordinary shares (representing 81.8% of the existing
issued share capital) and will result in existing Proteus
shareholders and Therapeutic Antibodies stockholders holding
55 per cent and 45 per cent respectively of the enlarged
issued share capital of Proteus prior to the Placing.
The Merger values each Therapeutic Antibodies Share of
Common Stock at approximately 45.9p per share and the whole
of the Therapeutic Antibodies at #23.9 million (based on the
mid-market closing price for Proteus shares of 39.5p at 19
May 1999, being the last trading day prior to the
announcement of the Merger).
Board of Directors
It is proposed that Stuart Wallis, Dr Andrew Heath, James
Christie, Martin Brown and Professor Tim Chard, the
existing directors of Therapeutic Antibodies, together with
James Christie, who is currently Operations Director of
Therapeutic Antibodies, will join the board of Proteus.
Stuart Wallis will become non-executive Chairman and David
Gration will become non-executive Deputy Chairman. The
executive board is proposed to become:
Chief Executive Officer Dr. Andrew J. Heath
Chief Operating Officer Dr. Arthur Rushton
Research Director Dr. Allen Miller
Manufacturing Director James Christie
Finance Director Barry Riley
Shareholder approval
The Merger is subject to the approval of shareholders of
both Proteus and Therapeutic Antibodies. It is expected
that shareholders' meetings of both companies will be held
in late August 1999. Subject to such approvals and the
satisfaction of certain other conditions, it is expected
that the Merger will become effective in the third quarter
of 1999. In order to convene the Therapeutic Antibodies
special shareholders' meeting, a Form F-4 Registration
Statement ("Form F-4") must be filed with and declared
effective by the US Securities and Exchange Commission
("SEC"). Proteus will issue listing particulars (the
"Listing Particulars") describing the enlarged group, the
Merger and the Placing. The Listing Particulars will also
comprise a Class 1 circular to seek Proteus shareholders'
approval for the acquisition. Both shareholders' meetings
will be held as soon as practicable following the date on
which the Form F-4 is declared effective by the SEC.
To approve the Merger, the holders of at least a majority of
the outstanding Therapeutic Antibodies Shares of Common
Stock must vote in favour of the Merger.
Principal terms and conditions of the Merger
The Merger Agreement contains certain customary
representations and warranties by both Proteus and
Therapeutic Antibodies concerning their respective financial
and business status, including; (i) organisation and
capital structure; (ii) authority to complete the Merger
without violating agreements or applicable law; (iii) the
status of regulatory filings; (iv) the accuracy of
information supplied to the other party; (v) the compliance
of the parties with applicable law and regulatory
requirements; (vi) the absence of legal proceedings; (vii)
the status of tax filings; (viii) the absence of certain
changes since the parties' most recent financial statements;
(ix) the status of certain employee benefit plans; (x) the
absence of material environmental liabilities; (xi) the
status of the parties' proprietary rights; (xii) the
possession of necessary permits and licences to conduct
business; (xiii) the absence of undisclosed liabilities; and
(xiv) title to properties.
The Merger is conditional on completion of the Placing.
Application will be made to the London Stock Exchange for up
to 60,542,545 Ordinary Shares to be issued in connection
with the Merger and 23,325,000 Ordinary Shares to be issued
in connection with the Placing to be admitted to the
Official List.
In addition to the matters described above, completion of
the Merger is subject to the satisfaction of various
conditions, including the following:
- the continued accuracy of the representations and
warranties made by Proteus and Therapeutic Antibodies
in the Merger Agreement;
- the performance of the covenants of Proteus and
Therapeutic Antibodies set forth in the Merger
Agreement;
- the receipt by Proteus and Therapeutic Antibodies of a
tax opinion to the effect that no gain or loss will be
recognised by Proteus or Therapeutic Antibodies upon
completion of the Merger;
- the receipt by Proteus of a letter from the U.K.
Treasury that it consents to the completion of the
Merger for the purposes of the Income and Corporation
Taxes Act 1988;
- the absence of any event that would have a material
adverse effect on the business or financial condition
of Proteus or Therapeutic Antibodies;
- the receipt of all consents of third parties required
to complete the Merger;
- holders of not more than 2.5% of the outstanding
Therapeutic Antibodies Shares of Common Stock
exercising dissenters' rights under Delaware law; and
- there being no event of default or repayment of
borrowings under certain Therapeutic Antibodies loan
facilities.
Effect On Therapeutic Antibodies Warrants and Options
Warrants
Upon the Merger becoming effective, each outstanding warrant
to purchase Therapeutic Antibodies Shares of Common Stock
will be converted into a warrant to purchase 1.163 Proteus
Ordinary Shares for each Therapeutic Antibodies Share of
Common Stock covered by the warrant, for the same aggregate
purchase price set forth in the Therapeutic Antibodies
warrant.
1990 Stock Incentive Plan
Upon the Merger becoming effective, each outstanding option
to purchase Therapeutic Antibodies Shares of Common Stock
issued under Therapeutic Antibodies' 1990 Stock Incentive
Plan will be converted into an option to purchase 1.163
Proteus Ordinary Shares for each Therapeutic Antibodies
Share of Common Stock covered by the option, for the same
aggregate purchase price set forth in the Therapeutic
Antibodies option.
1997 Stock Option Plan
Upon the Merger becoming effective, all outstanding options
to purchase Therapeutic Antibodies Shares of Common Stock
issued under Therapeutic Antibodies' 1997 Stock Option Plan
will be cancelled as provided in the plan, to the extent not
previously exercised. Holders of options outstanding under
the 1997 Stock Option Plan will be entitled to exercise
their options, if they desire to do so, immediately prior to
the completion of the Merger, whether or not the applicable
option vesting requirements have been satisfied.
Interests of officers and directors in the transactions
As a result of the Merger, the compensation package of Mr
Gration and the arrangements for the supply of Mr Wallis'
services will be altered. Mr Gration will become non-
executive Deputy Chairman of Proteus and his remuneration
will be reduced accordingly. Compensation will be paid that
reflects his contractual arrangements.
Mr Wallis is presently interested in the capital of
Therapeutic Antibodies by an arrangement whereby he may
receive Therapeutic Antibodies Shares of Common Stock
equivalent to 10 per cent of any increase in market value of
Therapeutic Antibodies provided certain conditions are met.
This arrangement is being amended to provide for Mr Wallis
to receive options to acquire Proteus Ordinary Shares
equivalent to 4.5 per cent of the increase in market
capitalisation of Proteus above a share price of 39.5p. Mr
Wallis' present arrangement will lapse upon the Merger
becoming effective. The proposed arrangement is subject to
a special resolution of the Proteus shareholders at the EGM.
Further details of the arrangement will be described in the
Listing Particulars.
THE PLACING
Proteus has entered into a conditional placing agreement to
raise approximately #7.0 million net of expenses by issuing
23,325,000 Ordinary Shares (the "Placing Shares") at 40p per
share, representing 31.5 per cent of the existing issued
share capital and 14.7 per cent of the enlarged share
capital following the Merger. The Placing shares have been
conditionally placed by WestLB Panmure on a non pre-emptive
basis with (non-US) institutional investors. WestLB Panmure
has fully underwritten the Placing.
The Placing is conditional on completion of the Merger by 20
December 1999. The proceeds from the Placing will be used
for working capital following completion of the Merger and
repayment of certain borrowings.
The Placing will be subject to the passing of the necessary
resolutions of shareholders at the EGM of Proteus and has
been arranged on a non pre-emptive basis because it was
considered impracticable to obtain commitments from placees
if pre-emption rights were to be offered to shareholders.
OTHER MATTERS
There will be an analysts' presentation at 11.00 am and a
press presentation at 12.30 p.m. today at the offices of
WestLB Panmure at 35 New Broad Street, London EC2M 1SQ.
This announcement does not constitute an offer or invitation
to purchase any securities. The offering of Proteus Ordinary
Shares in exchange for Therapeutic Antibodies Shares of
Common Stock will be made only by means of a
Prospectus/Proxy Statement which it is anticipated will be
distributed to Therapeutic Antibodies shareholders in August
1999.
The issue of this announcement has been approved by the
directors of Proteus who accept responsibility for the
information contained within it on Proteus and has been
approved by the directors of Therapeutic Antibodies who
accept responsibility for the information contained within
it on Therapeutic Antibodies.
This announcement has been approved for the purposes of
section 57 of the Financial Services Act 1986 by WestLB
Panmure.
WestLB Panmure, which is regulated by The Securities and
Futures Authority Limited, is acting as lead financial
adviser exclusively for Proteus in connection with the
Merger and no-one else and will not be responsible to anyone
other than Proteus for providing the protections afforded to
customers of WestLB Panmure, or for giving advice in
relation to the Merger.
Deloitte & Touche, which is authorised by the Institute of
Chartered Accountants, in England and Wales to carry on
investment business is acting as joint financial adviser
exclusively for Proteus in connection with the Merger and no-
one else and will not be responsible to anyone other than
Proteus for providing the protection afforded to clients of
Deloitte & Touche, or for giving advice in relation to the
Merger.
British Linen Bank, which is regulated by The Securities and
Futures Authority Limited, is acting as financial adviser
exclusively for Therapeutic Antibodies in connection with
the Merger and no-one else and will not be responsible to
anyone other than Therapeutic Antibodies for providing the
protections afforded to customers of British Linen Bank, or
for giving advice in relation to the Merger.
DEFINITIONS
The following definitions apply throughout this announcement
save where the context otherwise requires.
British Linen Bank The British Linen Bank Limited
Official List The official list of the London
Stock Exchange
London Stock London Stock Exchange Limited
Exchange
Merger Agreement The agreement dated 20 May 1999
between Proteus and Therapeutic
Antibodies which sets out the terms
and conditions relating to the
merger of the companies
Proteus Ordinary The ordinary shares of 2p each in
Shares Proteus
Proteus Holder(s) of Proteus Ordinary
shareholder(s) Shares
SEC The Securities and Exchange
Commission in the United States
Therapeutic Share(s) of common stock of
Antibodies Common US$0.001 each in the capital of
Stock Therapeutic Antibodies
Therapeutic Holder(s) of Therapeutic Antibodies
Antibodies Common Stock
shareholder(s)
U.K. United Kingdom
U.S. or United United States of America, each
States state thereof, its territories and
possessions and the District of
Columbia
US$ or $ United States dollars
WestLB Panmure WestLB Panmure Limited
END
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