Recommended Cash Offer for ProStrakan Group (5520B)

TIDMZZZZ TIDMPSK

RNS Number : 5520B

Kyowa Hakko Kirin Co., Ltd

21 February 2011

Not for release, publication or distribution, in whole or in part, in, into or from any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction

21 February 2011

RECOMMENDED CASH ACQUISITION

PROSTRAKAN GROUP PLC

KYOWA HAKKO KIRIN CO., LTD.

Summary of the Acquisition

l The boards of Kyowa Hakko Kirin Co., Ltd. ("KHK") and ProStrakan Group plc ("ProStrakan") are pleased to announce that they have reached agreement on the terms of the recommended cash acquisition by KHK (or by a wholly-owned subsidiary of KHK) of the entire issued and to be issued share capital of ProStrakan (the "Acquisition").

l Under the terms of the Acquisition, ProStrakan Shareholders will be entitled to receive 130 pence in cash for each ProStrakan Share, valuing the entire issued and to be issued ordinary share capital of ProStrakan at approximately GBP292 million (Yen39,420 million).

l The price of 130 pence per ProStrakan Share represents a premium of approximately:

-- 41 per cent. to the closing price of 92.5 pence per ProStrakan Share on 12 November 2010, being the last business day immediately prior to the start of ProStrakan's current offer period; and

-- 100 per cent. to 64.9 pence, being the volume weighted average closing price per ProStrakan Share over the 6 months prior to 12 November 2010, being the last business day immediately prior to the start of ProStrakan's current offer period.

l Based in Galashiels, UK, ProStrakan is a fast-growing specialty pharmaceutical company engaged in the development and commercialisation of prescription medicines for the treatment of unmet therapeutic needs in major markets. ProStrakan's development capabilities are centred in Galashiels and Bedminster, New Jersey, US. Sales and marketing of ProStrakan's portfolio of products are handled by commercial subsidiaries in the UK, US, France, Germany, Spain, Italy and other EU countries.

l The Acquisition would represent a new opportunity for ProStrakan's continued development and could, through the complementary nature of ProStrakan and KHK, in terms of products, geography and infrastructure, allow ProStrakan to grow at a faster pace and to offer to patients and clinicians across Europe and the US, in time, a broader range of medicines.

l KHK, based in Tokyo, Japan was incorporated on 1 July 1949 under the name of Kyowa Hakko Kogyo Co., Ltd. Following its merger with Kirin Pharma Co., Ltd in October 2008, KHK established itself as an R&D-based global specialty pharmaceutical company. KHK is dedicated to the creation of new value in the life sciences, especially in its core business segments of Pharmaceuticals and Bio-Chemicals, and strives to contribute to the health and well-being of people around the world.

l KHK believes that the Acquisition would represent a key strategic milestone in KHK's development and could:

l provide KHK with an established European and US marketing and sales platform, together with a portfolio of proprietary products. ProStrakan's strong management team and talented and motivated sales force would be able to assist with the launch and marketing of KHK's key pipeline products, including therapeutic antibodies, in the European and US markets;

l enhance KHK's existing clinical development capabilities with ProStrakan's solid track record of successful new drug approvals and regulatory expertise in the US and Europe;

l allow KHK to leverage the clinical, regulatory, and marketing expertise of ProStrakan for certain medicines whose regional rights are already partially held by KHK; and

l reinforce KHK's expertise in utilising cutting-edge biotechnologies, based mainly on antibody engineering technology, to create new pharmaceuticals in the core therapeutic areas of oncology, nephrology and immunology/allergy.

l It is intended that the Acquisition will be implemented by way of a Court sanctioned scheme of arrangement under sections 895 to 899 of the Companies Act, further details of which are contained in the full text of this announcement.

l The ProStrakan Directors, who have been so advised by J.P. Morgan Cazenove and Numis, consider the terms of the Acquisition to be fair and reasonable. In providing their advice to the ProStrakan Directors, J.P. Morgan Cazenove and Numis have taken into account the commercial assessments of the ProStrakan Directors. For the purposes of Rule 3 of the Code, J.P. Morgan Cazenove is deemed not to be sufficiently independent of KHK and, accordingly, Numis is providing the independent financial advice to the ProStrakan Directors on the Acquisition for such purposes.

l Accordingly, the ProStrakan Directors unanimously recommend that ProStrakan Shareholders vote in favour of the Scheme, as the ProStrakan Directors have irrevocably undertaken to do in respect of their entire holdings, of, in aggregate, 279,880 ProStrakan Shares, representing as at the Announcement Date approximately 0.14 per cent. of the existing issued share capital of ProStrakan.

l KHK has also received irrevocable undertakings from certain institutional shareholders, Warburg Pincus, Aberforth, LMS Capital and Schroders, to vote or procure the vote in favour of the Scheme in respect of holdings or shares over which they have discretionary voting control (as applicable) representing, in aggregate, approximately 47.57 per cent. of the existing issued share capital of ProStrakan. KHK has therefore received total irrevocable undertakings in respect of ProStrakan Shares representing approximately 47.71 per cent. of the existing issued share capital of ProStrakan, further details of which are set out in Appendix III to this announcement.

l The Acquisition will be put to ProStrakan Shareholders at the Meetings. In order to become effective, the Scheme must be approved by a majority in number of the holders of Scheme Shares present and voting at the Court Meeting, either in person or by proxy, representing not less than 75 per cent. in value of the Scheme Shares held by such ProStrakan Shareholders. In addition, a special resolution implementing the Scheme and approving the related reduction of capital must be passed by ProStrakan Shareholders representing at least 75 per cent. of the votes cast at the ProStrakan General Meeting. A special resolution will also be proposed at the ProStrakan General Meeting to approve related amendments to the articles of association of ProStrakan.

l It is expected that the Scheme Document will be posted to ProStrakan Shareholders in March 2011, that the Meetings will be held in April 2011 and that the Scheme will become effective by early June 2011, subject to the satisfaction of regulatory and all other relevant conditions, including the Conditions as set out in Appendix I to this announcement.

Commenting on today's announcement, Yuzuru Matsuda, President and CEO of KHK, said:

"We are delighted that the board of ProStrakan is today unanimously recommending our offer to its shareholders. The combination of KHK and ProStrakan represents a highly attractive and strategically complementary fit. This transaction provides KHK with ProStrakan's established sales and marketing platform in the US and Europe, strengthening our global business and future growth prospects. We look forward to working with ProStrakan's highly skilled team to contribute to worldwide human health and well-being through innovative drug discovery and global commercialisation."

Commenting on today's announcement, Peter Allen, Chairman and Acting Chief Executive of ProStrakan, said:

"The board of ProStrakan is confident that this offer is in the best interests of ProStrakan's shareholders, our staff and our partners. The fit between ProStrakan and KHK is unmistakeable in terms of products, geography and infrastructure and we believe that the price being offered by KHK fully values ProStrakan's ongoing growth prospects. We are enthused by KHK's plans for the business and, in particular, with its intentions regarding ProStrakan's infrastructure in Europe and the US. As previously announced, ProStrakan has received a number of approaches, with varying levels of conditionality, and has been evaluating these over the past few months. As a result of this process, the ProStrakan Directors consider that the Acquisition proposed by KHK is the one which is in the best interests of shareholders and, as a result, have unanimously recommended it to the ProStrakan Shareholders."

BofA Merrill Lynch is acting as sole financial adviser and corporate broker to KHK. J.P. Morgan Cazenove is acting as lead financial adviser and joint corporate broker to ProStrakan. Numis is acting as Rule 3 adviser and joint corporate broker to ProStrakan.

This summary should be read in conjunction with, and is subject to, the full text of the announcement and the Appendices. The Acquisition will be subject to the conditions and further terms set out in Appendix I to the full announcement. Appendix II to this announcement contains the bases and sources of certain information contained in this announcement. Appendix III to this announcement contains details of the irrevocable undertakings that have been provided to KHK. Appendix IV to this announcement contains a description of the principal terms of the Implementation Agreement. Appendix V contains the definitions of certain terms used in this summary and the full announcement.

Enquiries:

 
KYOWA HAKKO KIRIN CO., LTD.                   Telephone: +81 3 3282 
 Tetsuro Kuga, General Manager, Corporate      0009 
 Communications 
 Yasuhiro Yamamoto, Corporate Communications 
BOFA MERRILL LYNCH                            Telephone: +81 3 6225 
 (Sole Financial Adviser and Corporate         7000 
 Broker to KHK)                                Telephone: +44 20 7996 
 Tokyo                                         1000 
 Akihiko Manaka 
 Isana Endo 
 London 
 Rupert Hill 
 Glenn Rewick 
PROSTRAKAN GROUP PLC                          Telephone: +44 189 666 
 Peter Allen, Chairman and Acting Chief        4000 
 Executive 
 Allan Watson, Chief Financial Officer 
 Callum Spreng, Corporate Communications 
J.P. Morgan Cazenove                          Telephone: +44 20 7742 
 (Lead Financial Adviser and Joint Corporate   4000 
 Broker to ProStrakan) 
 John Muncey 
 Dwayne Lysaght 
 Gina Gibson 
NUMIS                                         Telephone: + 44 20 7260 
 (Rule 3 Adviser and Joint Corporate Broker    1000 
 to ProStrakan) 
 Michael Meade 
 James Black 
BRUNSWICK                                     Telephone: +44 20 7404 
 (Public Relations Adviser to ProStrakan)      5959 
 Jon Coles 
 Justine McIlroy

BofA Merrill Lynch is acting exclusively for KHK and no-one else in connection with the Acquisition and will not be responsible to anyone other than KHK for providing the protections afforded to clients of BofA Merrill Lynch or for providing advice in relation to the Acquisition or any other matter referred to in this announcement.

J.P. Morgan Cazenove, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for ProStrakan and no one else in connection with the Acquisition and will not be responsible to anyone other than ProStrakan for providing the protections afforded to clients of J.P. Morgan Cazenove or for providing advice in connection with the Acquisition or any matter referred to in this announcement.

Numis Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for ProStrakan and no-one else in connection with the Acquisition and will not be responsible to anyone other than ProStrakan for providing the protections afforded to clients of Numis Securities Limited or for providing advice in connection with the Acquisition or any other matter referred to in this announcement.

This announcement is not intended to, and does not, constitute or form part of an offer to sell, or otherwise dispose of, or constitute an invitation or the solicitation of an offer to purchase, subscribe for or otherwise acquire any securities or the solicitation of any vote or approval in any jurisdiction, pursuant to the Acquisition or otherwise nor shall there be any sale, issuance or transfer of securities of ProStrakan in any jurisdiction in contravention of applicable law. The Acquisition will be made solely by means of the Scheme Document, which will contain the full terms and conditions of the Acquisition (including details of how to vote in respect of the Scheme). Any vote in respect of the Scheme or other response to the Acquisition should be made only on the basis of the information contained in the Scheme Document. ProStrakan Shareholders are advised to read the formal documentation in relation to the Acquisition carefully, once it has been dispatched.

Please be aware that addresses, electronic addresses and certain other information provided by ProStrakan Shareholders, persons with information rights and other relevant persons for the receipt of communications from ProStrakan may be provided to KHK during the offer period as required under Section 4 of Appendix 4 of the Code.

This announcement has been prepared for the purpose of complying with English and Scots law, the Listing Rules, the rules of the London Stock Exchange and the Code 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 of jurisdictions outside the United Kingdom. The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and observe, any applicable requirements. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person.

Shareholders in the United States should note that the Scheme relates to the shares of a company incorporated in Scotland and will be governed by Scots law. Neither the proxy solicitation nor the tender offer rules under the US Securities Exchange Act of 1934, as amended, will apply to the Scheme. Moreover, the Scheme will be subject to the disclosure requirements and practices and procedures applicable to schemes of arrangement under Scots Law, which differ from the disclosure and procedural requirements of the US proxy solicitation rules and tender offer rules. Financial information included in this announcement and the Scheme documentation has been or will have been prepared in accordance with IFRS and may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with US GAAP.

The Acquisition will not be made, directly or indirectly, in, into or from any jurisdiction where to do so would violate the laws in that jurisdiction (a "Restricted Jurisdiction"), and the Acquisition will not be capable of acceptance from or within a Restricted Jurisdiction. Accordingly, copies of this announcement and all documents relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded (including, without limitation, by telex, facsimile transmission, telephone, internet or other forms of electronic communication), distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this announcement and all documents relating to the Acquisition (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions as doing so may invalidate any purported acceptance of the Acquisition. The availability of the Acquisition to ProStrakan Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements. Further details in relation to overseas shareholders will be contained in the Scheme Document.

ProStrakan will prepare the Scheme Document to be distributed to ProStrakan Shareholders. ProStrakan and KHK urge ProStrakan Shareholders to read the Scheme Document when it becomes available because it will contain important information relating to the Acquisition.

No listing authority or equivalent has reviewed, approved or disapproved of this announcement or any of the proposals described herein.

Forward Looking Statements

This announcement contains statements about KHK and ProStrakan that are or may be forward looking statements. All statements other than statements of historical facts included in this announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words "targets", "plans" "believes", "expects", "aims"," intends", "will", "may", "anticipates", "estimates", "projects" or, words or terms of similar substance or the negative thereof, are forward looking statements. Forward looking statements include statements relating to the following: statements relating to the expected benefits of the acquisition to KHK, background and reasons for the offer, expectations of the impact of the acquisition on revenue and earnings of KHK, information on the prospects of KHK or ProStrakan future capital expenditures, expenses, revenues, earnings, synergies, economic performance, and future prospects.

Such forward looking statements involve 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, including risks relating to the successful integration of ProStrakan with KHK; higher than anticipated costs relating to the integration of ProStrakan or investment required in ProStrakan to realise expected benefits and facts relating to ProStrakan that may impact the timing or amount of benefit realised from the acquisition that are unknown to KHK. 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 hereof. KHK and ProStrakan disclaim any obligation to update any forward looking or other statements contained herein, except as required by applicable law.

Dealing Disclosure Requirements

Under the provisions of Rule 8.3 of the Code, if any person is, or becomes, "interested" (directly or indirectly) in 1 per cent. or more of any class of "relevant securities" of ProStrakan, all "dealings" in any "relevant securities" of ProStrakan (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 p.m. (London time) on the business day following the date of the relevant transaction. This requirement will continue until the date on which the Scheme becomes effective or lapses or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of ProStrakan, they will be deemed to be a single person for the purpose of Rule 8.3.

Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant securities" of ProStrakan by KHK or ProStrakan, or by any of their respective "associates", must be disclosed by no later than 12.00 noon (London time) on the business day following the date of the relevant transaction.

A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.

"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.

Terms in quotation marks are defined in the Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8, please contact an independent financial adviser authorised under the Financial Services and Markets Act 2000, consult the Panel's website at www.thetakeoverpanel.org.uk or contact the Panel on telephone number +44 (0) 20 7638 0129; fax +44 (0) 20 7236 7013.

Rule 2.10 disclosure

In accordance with Rule 2.10 of the Code, the current issued share capital of ProStrakan comprises 202,311,080 ordinary shares of GBP0.05 each. The ISIN number for the ordinary shares is GB00B09STF21.

Publication on websites

In accordance with Rule 19.11 of the Code, a copy of this announcement will be available on KHK's website (www.kyowa-kirin.co.jp) and ProStrakan's website (www.prostrakan.com) by no later than 12 noon on 22 February 2011.

Not for release, publication or distribution, in whole or in part, in, into or from any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction

21 February 2011

RECOMMENDED CASH ACQUISITION

PROSTRAKAN GROUP PLC

KYOWA HAKKO KIRIN CO., LTD.

1. Introduction

The boards of Kyowa Hakko Kirin Co., Ltd. ("KHK") and ProStrakan Group plc ("ProStrakan") are pleased to announce that they have reached agreement on the terms of the recommended cash acquisition by KHK (or by a wholly-owned subsidiary of KHK) of the entire issued and to be issued share capital of ProStrakan (the "Acquisition").

2. The Acquisition

Under the terms of the Acquisition, ProStrakan Shareholders will be entitled to receive:

for each ProStrakan Share 130 pence in cash

The Acquisition values the entire issued and to be issued ordinary share capital of ProStrakan at approximately GBP292 million (Yen39,420 million).

The Acquisition represents a premium of approximately:

-- 41 per cent. to the closing price of 92.5 pence per ProStrakan Share on 12 November 2010, being the last business day immediately prior to the start of ProStrakan's current offer period; and

It is intended that the Acquisition will be implemented by way of a Court sanctioned scheme of arrangement under sections 895 to 899 of the Companies Act, further details of which are contained in section 10 below.

It is expected that the Scheme Document will be posted in March 2011, that the Meetings will be held in April 2011 and that the Scheme will become effective by early June 2011.

The Acquisition will be subject to the conditions and further terms set out in Appendix I to this announcement and to be set out in the Scheme Document.

3. Background to and reasons for the Acquisition

KHK owns and develops a large and attractive portfolio of pipeline products in various therapeutic areas of unmet medical needs, such as oncology. One of KHK's key strategic objectives is to maximise returns from its late stage pipeline products through the establishment of a direct sales and marketing presence in the US and Europe, two of the world's largest prescription pharmaceutical markets.

KHK's flagship late stage pipeline product is a humanised defucosylated monoclonal antibody, which was discovered in-house and is effective for patients with certain hematologic cancers. In Japan, the antibody has completed necessary clinical trials and is due to be filed this spring with an anticipated launch in Japan in 2012. In the US, phase I/II clinical trials have been completed and the next steps are to be discussed.

The Acquisition will provide KHK with a US platform, where KHK currently has no sales and marketing presence, and will significantly enhance its European offering, where KHK currently has a modest sales and marketing footprint. KHK believes that the acquisition of ProStrakan's scalable sales and marketing platform in oncology related areas will help to fulfil its strategic objective of realising the full benefits from the expected launch of its therapeutic antibody and other forthcoming pipeline products. In addition, KHK believes that ProStrakan's solid track record of successful new drug approvals and regulatory expertise in the US and Europe will enhance KHK's existing clinical development activities.

The Acquisition will provide KHK with additional rights to medicines whose regional rights are already partially held by KHK, including the long-acting anti-emetic transdermal patch (US brand name: Sancuso) for which KHK has rights in Taiwan, Hong Kong, Singapore and Malaysia, and the transmucosal tablet for the management of breakthrough cancer pain (US and European brand name: Abstral) for which KHK is currently conducting phase III clinical trials in Japan. This will enable KHK to leverage ProStrakan's clinical and marketing expertise in these medicines.

Finally, KHK believes that the Acquisition will reinforce KHK's expertise in utilising cutting-edge biotechnologies, based mainly on antibody engineering technology, to create new pharmaceuticals in the core therapeutic areas of oncology, nephrology and immunology/allergy.

KHK expects that the impact of the Acquisition on KHK's cash EPS (earnings per share before amortisation of goodwill) to be neutral in 2011 and accretive in 2012, the first full year following the Acquisition.

4. Recommendation

The ProStrakan Directors, who have been so advised by J.P. Morgan Cazenove and Numis, consider the terms of the Acquisition to be fair and reasonable. In providing their advice to the ProStrakan Directors, J.P. Morgan Cazenove and Numis have taken into account the commercial assessments of the ProStrakan Directors. For the purposes of Rule 3 of the Code, J.P. Morgan Cazenove is deemed not to be sufficiently independent of KHK and, accordingly, Numis is providing the independent financial advice to the ProStrakan Directors on the Acquisition for such purposes.

The ProStrakan Directors consider the terms of the Acquisition to be in the best interests of ProStrakan Shareholders as a whole. Accordingly, the ProStrakan Directors intend unanimously to recommend that ProStrakan Shareholders vote in favour of the Scheme and the ProStrakan Resolutions as the ProStrakan Directors have irrevocably undertaken to do in respect of their entire holdings of, in aggregate, 279,880 ProStrakan Shares, representing as at the Announcement Date, approximately 0.14 per cent. of the existing issued share capital of ProStrakan.

5. Background to and reasons for the recommendation

ProStrakan is a fast-growing, international speciality pharmaceutical company. This has been achieved through the acquisition and/or development of high value medicines that treat unmet therapeutic needs. ProStrakan's initial expansion across Europe came through a combination of organic growth and targeted acquisitions. Following expansion into the US in 2008 with the launch of Sancuso, ProStrakan now has an established infrastructure and sales presence across both Europe and the US, supported by a portfolio of proprietary products. The ProStrakan Directors believe that ProStrakan is in a strong position to continue its growth trajectory, particularly following the launch of Abstral across Europe and the approvals of both Abstral and its partnered product, Fortesta, in the US.

The ProStrakan Directors believe that the Acquisition, at a significant premium to ProStrakan's current and recent share price, fully recognises and values the growth potential of the business through the ongoing pursuit of its current strategy. The ProStrakan Directors also recognise that the businesses of ProStrakan and KHK clearly complement one another, in terms of products, geography and infrastructure, and that this could allow ProStrakan to grow at a faster pace and to offer to patients and clinicians across Europe and the US, in time, a broader range of medicines. Consequently, the ProStrakan Directors believe that the Acquisition is in the best interests of ProStrakan Shareholders as a whole and, as a result, have unanimously recommended that the ProStrakan Shareholders vote in favour of the Scheme and the ProStrakan Resolutions.

The ProStrakan Directors also welcome the comments from KHK regarding the value that it places on the skills and experience of the existing management and employees of ProStrakan and its intentions regarding the use of ProStrakan's infrastructure.

6. Irrevocable undertakings

KHK has received irrevocable undertakings from each of the ProStrakan Directors to vote or procure the vote in favour of the Scheme in respect of their own holdings, representing approximately 0.14 per cent. of the existing issued share capital of ProStrakan.

KHK has also received irrevocable undertakings from certain institutional shareholders, Warburg Pincus, Aberforth, LMS Capital and Schroders, to vote or procure the vote in favour of the Scheme in respect of holdings or shares over which they have discretionary voting control (as applicable), representing approximately 47.57 per cent. of the existing issued share capital of ProStrakan.

KHK has therefore received total irrevocable undertakings in respect of ProStrakan Shares representing approximately 47.71 per cent. of the existing issued share capital of ProStrakan.

Further details of these irrevocable undertakings are set out in Appendix III to this announcement.

7. Information on KHK

KHK, based in Tokyo, Japan was incorporated on 1 July 1949 under the name of Kyowa Hakko Kogyo Co., Ltd. Following its merger with Kirin Pharma Co., Ltd. in October 2008, KHK established itself as an R&D-based global specialty pharmaceutical company. KHK is dedicated to the creation of new value in the life sciences, especially in its core business segments of Pharmaceuticals and Bio-Chemicals, and strives to contribute to the health and well-being of people around the world.

For the financial year ended 31 December 2010 KHK reported net sales of Yen413,738 million (2009*: Yen407,017 million) and net income of Yen22,197 million (2009(*) : Yen10,040 million) and had total assets of Yen695,862 million. KHK is listed on the Tokyo Stock Exchange and as at 18 February 2011 had a market capitalisation of approximately Yen497,505 million. KHK's financial results are reported under Financial Instruments and Exchange Law of Japan and in conformity with generally accepted accounting principles and practices prevailing in Japan which differ from financial reporting standards adopted by the European Union (IFRS).

8. Information on ProStrakan

Based in Galashiels, UK, ProStrakan is a fast-growing specialty pharmaceutical company engaged in the development and commercialisation of prescription medicines for the treatment of unmet therapeutic needs in major markets. The company's development capabilities are centred in Galashiels and Bedminster, New Jersey, US. Sales and marketing of ProStrakan's portfolio of products are handled by commercial subsidiaries in the UK, US, France, Germany, Spain, Italy and other EU countries.

For the year ended 31 December 2009, ProStrakan reported revenues from continuing operations of GBP79.0 million (2008: GBP56.1 million) and net loss of GBP15.8 million (2008: loss of GBP25.1 million) and had total assets as at that date of GBP78.1 million.

9. Current trading and prospects of the ProStrakan Group

On 10 January 2011, ProStrakan released its pre-close trading update for the 12 months ended 31 December 2010. Since 31 December 2010, ProStrakan's trading has proceeded in line with ProStrakan management's expectations.

10. Structure of the Acquisition

It is intended that the Acquisition will be effected by way of a Court sanctioned scheme of arrangement under sections 895 to 899 of the Companies Act. The Scheme is an arrangement between ProStrakan and the Scheme Shareholders and is subject to the approval of the Court.

The purpose of the Scheme is to provide for KHK (or a wholly-owned subsidiary of KHK) to become the owner of the entire issued and to be issued ordinary share capital of ProStrakan. This is to be achieved by the cancellation of the Scheme Shares held by ProStrakan Shareholders and the application of the reserve arising from such cancellation in paying up in full new ProStrakan Shares and issuing them to KHK (or a wholly-owned subsidiary of KHK), in consideration for which Scheme Shareholders will receive cash on the basis set out in section 2 of this announcement.

The Scheme requires the approval of Scheme Shareholders by the passing of a resolution at the Court Meeting, expected to be held in April 2011. The resolution must be approved by a majority in number of the Scheme Shareholders present and voting, either in person or by proxy, representing not less than 75 per cent. in value of the ProStrakan Shares held by such Scheme Shareholders. Implementation of the Scheme will also require the passing of the ProStrakan Resolutions (requiring the approval of ProStrakan Shareholders representing at least 75 per cent. of the votes cast at the ProStrakan General Meeting, which will be held immediately after the Court Meeting). In respect of the ProStrakan Resolutions, the ProStrakan Shareholders will be entitled to cast one vote for each ProStrakan Share held.

Following the Meetings, the Scheme and the related reduction of ProStrakan's share capital must be sanctioned and confirmed respectively by the Court and will only become effective upon delivery to the Registrar of Companies in Scotland of certified copies of the Scheme Court Order (sanctioning the Scheme) and of the Reduction Court Order with the requisite statement of capital attached thereto (confirming the reduction of share capital of ProStrakan forming part of the Scheme) and, if so ordered by the Court, the registration of the Reduction Court Order and statement of capital by the Registrar of Companies in Scotland. Upon the Scheme becoming effective, it will be binding on all ProStrakan Shareholders, irrespective of whether or not they attended or voted at the Court Meeting or the ProStrakan General Meeting (and if they attended and voted, whether or not they voted in favour).

Further details of the Scheme will be contained in the Scheme Document which is expected to be posted to ProStrakan Shareholders in March 2011. It is anticipated that the Scheme will become effective by early June 2011, subject to the satisfaction of regulatory and all other relevant conditions. The Scheme is subject to certain conditions and certain further terms referred to in Appendix I of this announcement and to be set out in the Scheme Document. Further details on the timetable for the implementation of the Scheme will be set out in the Scheme Document.

KHK reserves the right, subject to the prior consent of the Panel, to elect to implement the acquisition of the ProStrakan Shares by way of a takeover offer (as such term is defined in section 974 of the Companies Act). In such event, such takeover offer will be implemented on the same terms (subject to appropriate amendments as described in Part 2 of Appendix I), so far as applicable, as those which would apply to the Scheme. Furthermore, if sufficient acceptances of such offer are received and/or sufficient ProStrakan Shares are otherwise acquired, it is the intention of KHK to apply the provisions of section 979 of the Companies Act to acquire compulsorily any outstanding ProStrakan Shares to which such offer relates.

11. Management and employees

KHK attaches great importance to the skills and experience of the existing management and employees of ProStrakan. KHK intends and has given assurances to the ProStrakan Directors that, upon the Acquisition becoming effective, the existing contractual and statutory employment rights and pension rights of all employees of ProStrakan will be fully safeguarded.

KHK's plans do not involve any material changes to the terms of employment of ProStrakan employees. KHK intends to use ProStrakan's infrastructure to establish a direct sales and marketing presence in the US and Europe. While these plans represent KHK's current intentions, KHK reserves its rights to reorganise the enlarged group as its strategy evolves.

12. ProStrakan Share Plans and ProStrakan Warrants

The Acquisition will extend to any ProStrakan Shares unconditionally allotted or issued before the Scheme Record Time (or until such earlier date as, subject to the Code, KHK may decide), including those allotted or issued as a result of the exercise of options or the vesting of awards under the ProStrakan Share Plans or the exercise of the warrants under the ProStrakan Warrants.

Appropriate proposals will be made, on or shortly after the date of the Scheme Document, to the participants in the ProStrakan Share Plans (including certain compensation proposals for participants with unvested options and awards granted under ProStrakan's Executive Share Option Plan, Performance Share Plan and Sharesave Plans) and the holders of the ProStrakan Warrants.

13. Amendments to Articles of Association

It is proposed to amend the articles of association of ProStrakan at the ProStrakan General Meeting to provide that, if the Scheme becomes effective, any ProStrakan Shares issued on or after the Scheme Effective Date will automatically be transferred to KHK in exchange for the acquisition price of 130 pence per ProStrakan Share in cash on the same basis as under the Scheme. Consequently, participants in the ProStrakan Share Plans or holders of ProStrakan Warrants who exercise any options or warrants after the Scheme becomes effective will receive the same cash consideration as the holders of Scheme Shares who receive the acquisition price of 130 pence per ProStrakan Share under the Scheme.

14. Financing

The cash consideration payable by KHK under the terms of the Acquisition will be funded using KHK's existing cash resources.

BofA Merrill Lynch, financial adviser and corporate broker to KHK, is satisfied that sufficient resources are available to KHK to satisfy the full cash consideration payable under the terms of the Acquisition.

Paladin Labs Inc. has agreed that the debt facility that it provides (through one of its wholly-owned subsidiaries) to ProStrakan can be repaid in full immediately following the Acquisition.

15. Delisting and re-registration

It is intended that dealings in ProStrakan Shares will be suspended at 5.00 p.m. (London time) on the business day prior to the Scheme Effective Date. It is further intended that upon or shortly after the Scheme Effective Date, the London Stock Exchange will be requested to cancel trading in ProStrakan Shares on the London Stock Exchange's market for listed securities and the UK Listing Authority will be requested to cancel the listing of the ProStrakan Shares from the Official List.

On the Scheme Effective Date, share certificates in respect of the ProStrakan Shares will cease to be valid and should be destroyed. In addition, entitlements to ProStrakan Shares held within the CREST system will be cancelled on the Scheme Effective Date.

As soon as possible after the Scheme Effective Date, it is intended that ProStrakan will be re-registered as a private limited company.

16. Implementation Agreement

ProStrakan and KHK have entered into an Implementation Agreement which contains, amongst other things, certain obligations and commitments in relation to implementation of the Acquisition. A brief summary of the provisions relating to the inducement fee arrangement, non-solicitation undertaking and right to match, as contained in the Implementation Agreement, is set out in Appendix IV to this announcement. Further information regarding this agreement will be set out in the Scheme Document. The arrangements relating to the inducement fee have been approved by the Panel.

17. Disclosure of interests in ProStrakan

Except as disclosed below, as at 17 February 2011, the last practicable date before this announcement, and save for the irrevocable undertakings referred to in paragraph 6 above, neither KHK nor any KHK Directors nor, so far as KHK is aware, any party acting in concert with KHK, has any interest in, or right to subscribe for, any ProStrakan Shares or any ProStrakan securities, nor does any such person have any short position (whether conditional or absolute and whether in the money or otherwise) including short positions under derivatives or arrangements in relation to ProStrakan securities. For these purposes, "arrangement" includes any indemnity or option arrangement or any agreement or understanding, formal or informal, of whatever nature, relating to ProStrakan securities which may be an inducement to deal or refrain from dealing in such securities. In the interests of secrecy prior to this announcement, KHK has not made any enquiries in this respect of the matters referred to in this paragraph of certain parties who may be deemed by the Panel to be acting in concert with them for the purposes of the Scheme. Enquiries of such parties will be made as soon as practicable following the date of this announcement and any material disclosure in respect of such parties will be included in the Scheme Document.

 
 Party                  Interest in ProStrakan securities 
 BofA Merrill Lynch          Long                 1,505,681 
        Short                                     1,500,000 
        Net                                           5,681

18. General

The Acquisition will be made on the terms and subject to the conditions and further terms set out herein and in Appendix I to this announcement and to be set out in the Scheme Document. The Scheme Document will include full details of the Scheme, together with notices of the Meetings. The Scheme Document will be dispatched to ProStrakan Shareholders in due course. The Acquisition will be subject to the applicable requirements of the Code, the Panel, the London Stock Exchange and the Financial Services Authority.

Appendix I to this announcement contains the conditions and further terms relating to the Acquisition. Appendix II to this announcement contains the bases and sources of certain information contained in this announcement. Appendix III to this announcement contains details of the irrevocable undertakings that have been provided to KHK. Appendix IV to this announcement contains a description of the principal terms of the Implementation Agreement. Appendix V contains the definitions of certain terms used in this announcement.

Enquiries:

 
 KYOWA HAKKO KIRIN CO., LTD. Tetsuro                    Telephone: +81 3 3282 
 Kuga, General Manager, Corporate                        0009 
 Communications Yasuhiro Yamamoto, 
 Corporate Communications 
 BOFA MERRILL LYNCH                        Telephone: +81 3 6225 
  (Sole Financial Adviser and Corporate     7000 
  Broker to KHK)                            Telephone: +44 20 7996 
  Tokyo                                     1000 
  Akihiko Manaka 
  Isana Endo 
  London 
  Rupert Hill 
  Glenn Rewick 
 PROSTRAKAN GROUP PLC Peter Allen,                      Telephone: +44 189 666 
 Chairman and Acting Chief Executive                     4000 
 Allan Watson, Chief Financial Officer 
 Callum Spreng, Corporate 
 Communications 
 J.P. Morgan Cazenove (Lead Financial      Telephone: +44 20 7742 
 Adviser and Joint Corporate Broker to      4000 
 ProStrakan) John Muncey Dwayne Lysaght 
 Gina Gibson 
 NUMIS (Rule 3 Adviser and Joint           Telephone: +44 20 7260 
 Corporate Broker to ProStrakan) Michael    1000 
 Meade James Black 
 BRUNSWICK (Public Relations Adviser to    Telephone: +44 20 7404 
 ProStrakan) Jon Coles Justine McIlroy      5959

* As stated in KHK's financial statements for the financial year ending 31 December 2010, as a result of the change in KHK's fiscal year end, the figures used for the 1 January 2009 to 31 December 2009 results (for comparison with the 2010 results) are the sum of i) the figures of the three month period from 1 January 2009 to 31 March 2009, obtained by subtracting figures from the nine month period (1 April 2009 to 31 December 2009) from the figures for the twelve month period to 31 March 2009, and ii) the figures from the first quarter of the fiscal year ending 31 December 2009.

Further information

The Acquisition will not be made, directly or indirectly, in, into or from any jurisdiction where to do so would violate the laws in that jurisdiction (a "Restricted Jurisdiction"), and the Acquisition will not be capable of acceptance from or within a Restricted Jurisdiction. Accordingly, copies of this announcement and all documents relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, (including without limitation by telex, facsimile transmission, telephone, internet or other forms of electronic communication) distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this announcement and all documents relating to the Acquisition (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions as doing so may invalidate any purported acceptance of the Acquisition.

The availability of the Acquisition to ProStrakan Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements. Further details in relation to overseas shareholder will be contained in the Scheme Document.

Numis Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Service Authority, is acting exclusively for ProStrakan and no-one else in connection with the Acquisition and will not be responsible to anyone other than ProStrakan for providing the protections afforded to clients of Numis Securities Limited or for providing advice in connection with the Acquisition or any other matter referred to in this announcement.

No listing authority or equivalent has reviewed, approved or disapproved of this announcement or any of the proposals described herein.

Forward Looking Statements

This announcement contains statements about KHK and ProStrakan that are or may be forward looking statements. All statements other than statements of historical facts included in this announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "estimates", "projects" or, words or terms of similar substance or the negative thereof, are forward looking statements. Forward looking statements include statements relating to the following: statements relating to the expected benefits of the acquisition to KHK, background and reasons for the offer, expectations of the impact of the acquisition on revenue and earnings of KHK, information on the prospects of KHK or ProStrakan future capital expenditures, expenses, revenues, earnings, synergies, economic performance, and future prospects.

Dealing Disclosure Requirements

Rule 2.10 disclosure

Publication on websites

APPENDIX I

CONDITIONS AND FURTHER TERMS OF THE SCHEME AND THE ACQUISITION

Part 1

CONDITIONS OF THE ACQUISITION

1. The Acquisition will be conditional upon the Scheme becoming unconditional and becoming effective subject to the Code, by no later than 1 July 2011 or such later date (if any) as KHK and ProStrakan may, with the consent of the Panel, agree and (if required) the Court may approve.

2. The Scheme will be conditional upon:

(a) approval by a majority in number representing not less than 75 per cent. in value of the Scheme Shareholders (or the relevant class or classes thereof, if applicable) present and voting, either in person or by proxy, at the Court Meeting and at any separate class meeting which may be required by the Court or at any adjournment of any such meeting;

(b) all resolutions necessary to approve and implement the Scheme being duly passed by the requisite majority or majorities at the ProStrakan General Meeting or at any adjournment of the ProStrakan General Meeting; and

(c) the sanction of the Scheme with or without modification (but subject to any such modification being acceptable to ProStrakan and KHK) by the Court, the confirmation of the Reduction of Capital by the Court, the delivery of certified copies of the Scheme Court Order and of the Reduction Court Order (with the requisite statement of capital attached thereto) to the Registrar of Companies in Scotland and, if so ordered by the Court in order to take effect, the registration of the Reduction Court Order (and statement of capital) by the Registrar of Companies in Scotland.

3. In addition, KHK and ProStrakan have agreed that the Acquisition will be conditional upon the following Conditions and, accordingly, the necessary actions to make the Scheme effective will not be taken unless the following Conditions (as amended if appropriate) have been satisfied or, where relevant, waived:

(a) no government or governmental, quasi-governmental, supranational, statutory, administrative or regulatory body or association, institution or agency (including any trade agency) or any court or other body (including any professional or environmental body) or person in any jurisdiction (each a "Relevant Authority") having decided to take, instituted or threatened any action, proceeding, suit, investigation, enquiry or reference or enacted, made or proposed and there not continuing to be outstanding any statute, regulation, order or decision that would or might be reasonably expected to:

(i) make the Acquisition or its implementation or the acquisition or the proposed acquisition of any shares in, or control of, ProStrakan by KHK or any member of the Wider KHK Group void, unenforceable or illegal or directly or indirectly prohibit or otherwise materially restrict, delay or interfere with the implementation of, or impose material additional conditions or obligations with respect to, or otherwise challenge, the Acquisition or its implementation or the acquisition or the proposed acquisition of any shares in, or control of, ProStrakan by KHK or any member of the Wider KHK Group;

(ii) require, prevent or materially delay the divestiture (or alter the terms of any proposed divestiture) by any member of the Wider KHK Group or the Wider ProStrakan Group of all or any substantial part of their respective businesses, assets or properties or impose any material limitation on their ability to conduct all or any part of their respective businesses and to own any of their respective assets or properties;

(iii) impose any material limitation on, or result in any material delay in, the ability of any member of the Wider KHK Group to acquire or hold or to exercise effectively, directly or indirectly, all or any rights of ownership of shares or other securities (or the equivalent) in, or to exercise management control over, any member of the Wider ProStrakan Group or on the ability of any member of the Wider ProStrakan Group to hold or exercise effectively, directly or indirectly, all or any rights of ownership of shares or other securities (or the equivalent) in, or to exercise management control over, any other member of the Wider ProStrakan Group;

(iv) except pursuant to sections 974 to 991 of the Companies Act, require any member of the Wider KHK Group or of the Wider ProStrakan Group to acquire or offer to acquire any shares or other securities (or the equivalent) in any member of the Wider ProStrakan Group or any member of the Wider KHK Group;

(v) impose any material limitation on the ability of any member of the Wider KHK Group or the Wider ProStrakan 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 KHK Group and/or the Wider ProStrakan Group; or

(vi) otherwise materially and adversely affect the business, assets, financial or trading position or profits or prospects of any member of the Wider KHK Group or of the Wider ProStrakan Group,

and all applicable waiting and other time periods during which any such Relevant Authority could decide to take, institute or threaten any such action, proceeding, suit, investigation, enquiry or reference having expired, lapsed or been terminated;

(b) all necessary filings having been made and all appropriate waiting periods (including any extensions thereof) under any applicable legislation or regulation of any jurisdiction having expired, lapsed or been terminated in each case in respect of the Acquisition or its implementation or the acquisition or the proposed acquisition of any shares in, or control of, ProStrakan by KHK or any member of the Wider KHK Group and all authorisations, orders, grants, recognitions, confirmations, licences, consents, clearances, permissions and approvals ("authorisations") necessary or appropriate in any jurisdiction for or in respect of the Acquisition or its implementation or the acquisition or the proposed acquisition of any shares in, or control of, ProStrakan by KHK being obtained in terms and in a form reasonably satisfactory to KHK or any member of the Wider KHK Group from appropriate Relevant Authorities or from any persons or bodies with whom any member of the Wider KHK Group or the Wider ProStrakan Group has entered into contractual arrangements (in each case where the absence of such authorisation would have a material adverse effect on the Wider ProStrakan Group taken as a whole) and such authorisations together with all authorisations necessary or appropriate for any member of the Wider ProStrakan Group to carry on its business (where such business is material in the context of the Wider ProStrakan Group taken as a whole) remaining in full force and effect and no intimation of any intention to revoke, suspend, restrict or modify or not to renew any of the same having been made and all necessary statutory or regulatory obligations in any jurisdiction having been materially complied with;

(c) save as fairly disclosed in the Annual Report and Accounts, in ProStrakan's unaudited interim results for the six months ended 30 June 2010 or as publicly announced to a Regulatory Information Service by ProStrakan prior to the Announcement Date or as fairly disclosed to KHK in writing before the Announcement Date, there being no provision of any agreement, arrangement, licence or other instrument to which any member of the Wider ProStrakan Group is a party or by or to which any such member or any of its assets is or may be bound, entitled or subject which, as a result of the Acquisition or its implementation or the acquisition or proposed acquisition by KHK or any member of the Wider KHK Group of any shares in, or change in the control or management of, ProStrakan or otherwise, would or might (to an extent which is materially adverse in the context of the Wider ProStrakan Group taken as a whole) reasonably be expected to result in:

(i) any material amount of monies borrowed by or any other material indebtedness (actual or contingent) of any such member of the Wider ProStrakan Group becoming repayable or capable of being declared repayable immediately or earlier than the stated repayment date or the ability of such member to borrow monies or incur any material indebtedness being withdrawn or inhibited;

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

(iii) any material assets or interest of any such member of the Wider ProStrakan Group being or falling to be disposed of or charged or any right arising under which any such asset or interest could be required to be disposed of or charged, other than in the ordinary course of trading;

(iv) the rights, liabilities, obligations, interests or business of any such member of the Wider ProStrakan Group in or with any other person, firm or company (or any agreements or arrangements relating to such interest or business) being terminated or materially and adversely affected;

(v) any such member of the Wider ProStrakan Group ceasing to be able to carry on business under any name under which it presently does so, where such a result would be material in the context of the Wider ProStrakan Group taken as a whole;

(vi) the value of any such member of the Wider ProStrakan Group or its financial or trading position or prospects being materially prejudiced or materially and adversely affected;

(vii) any such agreement, arrangement, licence or other instrument being terminated or materially and adversely modified or any onerous obligation arising or any material adverse action being taken or arising thereunder; or

(viii) the creation of any material liabilities (actual or contingent) by any such member of the Wider ProStrakan Group other than in the ordinary course of business;

and no event having occurred which, under any provision of any agreement, arrangement, licence or other instrument to which any member of the Wider ProStrakan Group is a party or by or to which any such member or any of its assets may be bound or be subject, would be reasonably likely to result in any events or circumstances as are referred to in subparagraphs (i) to (viii) of this paragraph (c) in any case where such result would be material in the context of the Wider ProStrakan Group taken as a whole;

(d) except as disclosed in the Annual Report and Accounts or as publicly announced to a Regulatory Information Service by or on behalf of ProStrakan or as otherwise fairly disclosed in writing to KHK before the Announcement Date, no member of the Wider ProStrakan Group having since 31 December 2009:

(i) issued or agreed to issue or authorised the issue of additional shares of any class, or securities convertible into, or rights, warrants or options to subscribe for or acquire, any such shares or convertible securities or transferred or sold any shares out of treasury save as between ProStrakan and wholly-owned subsidiaries of ProStrakan prior to the Announcement Date or upon the exercise of rights to subscribe for ProStrakan Shares pursuant to options granted under any ProStrakan Share Plans prior to the Announcement Date;

(ii) recommended, declared, paid or made any bonus, dividend or other distribution, whether payable in cash or otherwise, other than a distribution by any wholly-owned subsidiary of ProStrakan;

(iii) implemented or authorised any merger or demerger or acquired or disposed of or transferred, mortgaged or charged, or created any other security interest over, any asset or any right, title or interest in any asset;

(iv) implemented or authorised any reconstruction, amalgamation, scheme or other similar transaction or arrangement (other than in the ordinary course of business);

(v) purchased, redeemed or repaid any of its own shares or other securities or reduced or made or authorised any other change in its share capital;

(vi) made or authorised any change in its loan capital or issued or authorised the issue of any debentures or (other than in the ordinary course of business and save as between ProStrakan and wholly-owned subsidiaries of ProStrakan) incurred or increased any indebtedness or contingent liability;

(vii) entered into, varied or terminated, or authorised the entry into, variation or termination of, any contract, commitment or arrangement (whether in respect of capital expenditure or otherwise) which is outside the ordinary course of business or which is of a long term, onerous or unusual nature or magnitude or which involves or could involve an obligation of a nature or magnitude which is material;

(viii) entered into any contract, commitment or arrangement which would be materially restrictive on the business of any member of the Wider ProStrakan Group or the Wider KHK Group (other than to a nature and extent which is normal in the context of the business concerned);

(ix) been unable or deemed unable, or admitted in writing that it is unable, to pay its debts as they fall due or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business;

(x) commenced negotiations with any of its creditors or taken any step with a view to rescheduling or restructuring any of its indebtedness or entered into a composition, compromise, assignment or arrangement with any of its creditors whether by way of a voluntary arrangement, scheme of arrangement, deed of compromise or otherwise;

(xi) taken any corporate action or had any legal proceedings started or threatened against it or any documents filed or faxed in court for its winding-up (voluntary or otherwise), dissolution or reorganisation (or for any analogous proceedings or steps in any jurisdiction) or for the appointment of a liquidator, provisional liquidator, receiver, administrator, administrative receiver, trustee or similar officer (or for the appointment of any analogous person in any jurisdiction) of all or any of its assets and revenues or had notice given of the intention to appoint any of the foregoing to it;

(xii) waived, compromised, settled, abandoned or admitted any dispute, claim or counter-claim whether made or potential and whether by or against any member of the Wider ProStrakan Group which together or separately is material;

(xiii) made any alteration to its articles of association;

(xiv) entered into or varied the terms of, or terminated or given notice of termination of, any service agreement or arrangement with any director or senior executive of any member of the Wider ProStrakan Group;

(xv) agreed to provide, or agreed to materially modify the terms of, any share option scheme, incentive scheme or other benefit relating to the employment or termination of employment of any person employed by any member of the Wider ProStrakan Group;

(xvi) entered into any contract, commitment or arrangement or passed any resolution or made any offer (which remains open for acceptance) with respect to, or proposed or announced any intention to effect or propose, any of the transactions, matters or events referred to in this condition; or

(xvii) made or agreed or consented to any material change to:

(i) the terms of any pension scheme arrangement(s) established by any member of the Wider ProStrakan Group for its directors, employees or their dependents, or available to such directors, employees or their dependents;

(ii) the contributions payable to any such arrangement(s) or to the benefits which accrue or to the pensions which are payable thereunder;

(iii) the basis on which qualification for, or accrual or entitlement to, such benefits or pensions are calculated or determined; or

(iv) the basis upon which the liabilities (including pensions) of such pension arrangement(s) are funded, valued or made (including, without limitation, any changes which relate to or result from any purchase of a bulk annuity or longevity or financial hedging instrument in respect of some or all of those liabilities),

and for the purpose of this condition "material" shall mean material in the context of the Wider ProStrakan Group taken as a whole;

(e) since 31 December 2009 and except as disclosed in the Annual Report and Accounts or as publicly announced to a Regulatory Information Service by or on behalf of ProStrakan before the Announcement Date or as fairly disclosed to KHK in writing before the Announcement Date:

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

(ii) no litigation, arbitration proceedings, prosecution or other legal proceedings in any jurisdiction having been threatened, announced, instituted or remaining outstanding by, against or in respect of any member of the Wider ProStrakan Group or to which any member of the Wider ProStrakan Group is a party (whether as claimant or defendant or otherwise) and no investigation by any Relevant Authority or other investigative body against or in respect of any member of the Wider ProStrakan Group having been threatened, announced, instituted or remaining outstanding by, against or in respect of any member of the Wider ProStrakan Group which would or might reasonably be expected materially and adversely to affect the Wider ProStrakan Group taken as a whole; and

(iii) no contingent or other liability having arisen which would or might reasonably be expected materially and adversely to affect any member of the Wider ProStrakan Group taken as a whole;

(f) KHK not having discovered:

(i) that any financial, business or other information disclosed at any time by any member of the Wider ProStrakan Group is misleading, contains a misrepresentation of fact or omits to state a fact necessary to make the information contained therein not misleading which in any case is material and adverse to the financial or trading position of the Wider ProStrakan Group taken as a whole;

(ii) that any member of the Wider ProStrakan Group is subject to any liability, contingent or otherwise, which is not disclosed in the Annual Report and Accounts, or otherwise fairly disclosed to KHK in writing before the Announcement Date and which is material in the context of the Wider ProStrakan Group taken as a whole;

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

(iv) that any past or present member of the Wider ProStrakan Group has failed to comply with any applicable legislation or regulations of any jurisdiction or any notice or requirement of any Relevant Authority with regard to the storage, disposal, discharge, spillage, release, leak or emission of any waste or hazardous or harmful substance or any substance likely to impair the environment or harm human or animal health or otherwise relating to environmental matters or that there has otherwise been any such storage, disposal, discharge, spillage, release, leak or emission (whether or not the same constituted non-compliance by any person with any such legislation or regulation, and whenever the same may have taken place), any of which non--compliance would be likely to give rise to any liability (whether actual or contingent) or cost on the part of any member of the Wider ProStrakan Group and which is material in the context of the Wider ProStrakan Group taken as a whole; or

(v) there is or is likely to be any obligation or liability (whether actual or contingent) to make good, repair, re-instate or clean up any property now or previously owned, occupied, operated or made use of or controlled by any past or present member of the Wider ProStrakan Group under any environmental legislation, regulation, notice, circular or order of any Relevant Authority in any jurisdiction and which is material in the context of the Wider ProStrakan Group taken as a whole:

(g) no circumstance having arisen or event having occurred in relation to any material Intellectual Property Rights owned, used or licensed by the Wider ProStrakan Group, including:

(i) any member of the Wider ProStrakan Group losing its title to any Intellectual Property Rights or any Intellectual Property Rights owned by the Wider ProStrakan Group being revoked, cancelled or declared invalid;

(ii) any agreement regarding the use of any Intellectual Property Rights licensed to or by any member of the Wider ProStrakan Group being terminated or materially varied; or

(iii) any claim being filed alleging that any member of the Wider ProStrakan Group infringed the Intellectual Property Rights of a third party or any member of the Wider ProStrakan Group being found to have infringed the Intellectual Property Rights of a third party, which, in any case, results or could result in the financial, trading position or prospects of the Wider ProStrakan Group being materially prejudiced or adversely affected.

Conditions 3(a) to (g) inclusive must be fulfilled, be determined by KHK to be or remain satisfied or (if capable of waiver) be waived by KHK by 11.59 p.m. on the date immediately preceding the Scheme Court Hearing, failing which the Scheme shall lapse.

To the extent permitted by law and subject to the requirements of the Panel, KHK reserves the right to waive all or any of Conditions 3(a) to (g) inclusive, in whole or in part. KHK shall be under no obligation to waive or treat as fulfilled any of Conditions 3(a) to (g) inclusive by a date earlier than the date specified above in Condition 1 for the fulfilment thereof notwithstanding that the other Conditions of the Acquisition 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.

If KHK is required by the Panel to make an offer or offers for any ProStrakan Shares under Rule 9 of the Code, KHK may make such alterations to the above conditions as are necessary to comply with that Rule.

The Scheme will lapse if, before the Court Meeting or the ProStrakan General Meeting (whichever is the later), the Acquisition or any matter arising from or relating to the Acquisition is referred to the Competition Commission or the European Commission either initiates proceedings under Article 6(1)(c) of the Regulation or, following a referral by the European Commission to a competent authority in the United Kingdom under Article 9(1) of the Regulation, the Acquisition or any matter arising from or relating to the Acquisition is referred to the Competition Commission.

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

Part 2

CERTAIN FURTHER TERMS OF THE ACQUISITION

1. KHK reserves the right to elect (with the consent of the Panel and in accordance with the Implementation Agreement) to implement the Acquisition by way of a takeover offer (as defined in Part 28 of the Companies Act) as it may determine in its absolute discretion. In such event, such offer will be implemented on the same terms, so far as applicable, as those which would apply to the Scheme, subject to appropriate amendments to reflect the change in method of effecting the Acquisition, which may include changing the consideration structure under the terms of the Acquisition and (without limitation and subject to the consent of the Panel) an acceptance condition set at 90 per cent. (or such lesser percentage, being more than 50 per cent., as KHK may decide): (i) in nominal value of the shares to which such offer relates; (ii) of the voting rights attached to those shares; and (iii) of the voting rights normally exercisable at a general meeting of ProStrakan, including, for this purpose, any such voting rights attaching to ProStrakan Shares that are unconditionally allotted or issued before the takeover offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of any outstanding subscription or conversion rights or otherwise.

2. The ProStrakan Shares will be acquired by KHK free from all liens, charges, encumbrances, rights of pre-emption and any other third party rights of any nature whatsoever and together with all rights attaching thereto including the right to receive in full all dividends and other distributions declared, paid or made on or after the date of this announcement.

3. The Acquisition will be governed by Scots law and be subject to the jurisdiction of the Scottish courts and to the conditions set out in this document and in the formal Scheme Document. The Acquisition will comply with the applicable rules and regulations of the Financial Services Authority and the London Stock Exchange and the Code.

APPENDIX II

SOURCES OF INFORMATION AND BASES OF CALCULATION

(i) References to a percentage of ProStrakan Shares are based on 202,311,080 issued shares.

(ii) The value of the entire issued and to be issued ordinary share capital of ProStrakan is based on 224,332,026 fully diluted ProStrakan Shares.

(iii) The closing share price of 92.5 pence on 12 November 2010 is the mid-market price as sourced from Bloomberg. The average volume-weighted closing price of 64.9p over the 6 months prior to 12 November 2010 is calculated based on the mid-market prices and daily trading volumes as sourced from Bloomberg.

(iv) Unless otherwise stated, the financial information relating to ProStrakan is extracted from the audited consolidated financial statements of ProStrakan for the financial year to 31 December 2009, prepared in accordance with IFRS and from the unaudited consolidated financial statements of ProStrakan (from its interim report) for the six months ended 30 June 2010, prepared in accordance with IFRS.

(v) The market capitalisation of KHK is based on the mid-market closing price on 18 February 2011 of Yen863 and 576,483,555 issued shares, as sourced from Bloomberg.

(vi) Unless otherwise stated, the financial information relating to KHK is extracted from the audited consolidated financial statements of KHK (for the financial year to 31 December 2010), prepared in accordance with Financial Instruments and Exchange Law of Japan.

(vii) All Japanese yen figures have been converted to pounds sterling at the rate of GBP1 = Yen135.17 being the exchange rate at 5:00 p.m. in London on 18 February 2011, as sourced from Bloomberg.

(viii) The International Securities Identification Number for ProStrakan Shares is GB00B09STF21.

APPENDIX III

DETAILS OF IRREVOCABLE UNDERTAKINGS

Directors

The ProStrakan Directors have given irrevocable undertakings to vote or procure the vote in favour of the Acquisition as follows:

 
               Number of 
               ProStrakan    % of issued 
 Name            Shares      share capital 
 P Allen           50,000            0.02% 
 A Watson          47,426            0.02% 
 M Asbury          99,654            0.05% 
 P Cawdron         20,000            0.01% 
 F Fildes          58,000            0.03% 
 S Turton           4,800            0.00% 
 Total            279,880            0.14%

KHK has received irrevocable undertakings from the ProStrakan Directors in respect of their entire holdings in ProStrakan Shares, representing approximately 0.14 per cent. of the existing issued share capital of ProStrakan:

l to vote or procure the vote in favour of the Scheme and the ProStrakan Resolutions; and

l if the Acquisition is structured as a takeover offer, to accept or procure the acceptance of such offer by KHK.

The irrevocable undertakings given by the ProStrakan Directors will lapse if:

l the Scheme Document has not been published within 28 days of the date of this announcement (or within such longer period as KHK, with the consent of the Panel, determines); or

l the Scheme terminates or lapses in accordance with its terms or otherwise becomes incapable of ever becoming effective, provided that KHK has not, within seven days of the Scheme having so terminated or lapsed, announced in accordance with Rule 2 of the Code that it intends to implement the Acquisition by way of a takeover offer; or

l in the event that the Acquisition is implemented by way of a takeover offer, the offer lapses or is withdrawn.

Certain Institutional Shareholders

The following institutional shareholders have given irrevocable undertakings to vote or procure the vote in favour of the Scheme as follows:

 
                    Number of 
                    ProStrakan    % of issued 
 Name                 Shares      share capital 
 Warburg Pincus     49,282,291           24.36% 
 Aberforth          18,284,435            9.04% 
 LMS Capital        17,601,737            8.70% 
 Schroders          11,064,656            5.47% 
 Total              96,233,119           47.57%

KHK has received an irrevocable undertaking from Warburg Pincus in respect of 49,282,291 ProStrakan Shares (representing approximately 24.36 per cent. of the existing issued share capital of ProStrakan):

l to vote or procure the vote in favour of the Scheme and the ProStrakan Resolutions; and

l if the Acquisition is structured as a takeover offer, to accept or procure the acceptance of such offer by KHK.

The irrevocable undertakings given by Warburg Pincus will lapse if:

l the Scheme Document has not been published within 28 days of the date of this announcement (or within such longer period to which the Panel consents, not to be longer than 60 days); or

l in the event that the Acquisition is implemented by way of a takeover offer, the offer lapses or is withdrawn;

l a third party announces a firm intention to make an offer for ProStrakan (whether by scheme of arrangement or by way of takeover offer) at a value equal to or exceeding 140 pence per ProStrakan Share or a securities exchange offer the value of which on the day of announcement is equal to or exceeds 140 pence per ProStrakan Share.

KHK has received an irrevocable undertaking from LMS Capital in respect of 17,601,737 ProStrakan Shares (representing approximately 8.70 per cent. of the existing issued share capital of ProStrakan):

l to vote or procure the vote in favour of the Scheme and the ProStrakan Resolutions; and

l if the Acquisition is structured as a takeover offer, to accept or procure the acceptance of such offer by KHK.

The irrevocable undertakings given by LMS Capital will lapse if:

l the Scheme Document has not been published within 28 days of the date of this announcement (or within such longer period as KHK, with the Panel's consent, determines); or

l in the event that the Acquisition is implemented by way of a takeover offer, the offer lapses or is withdrawn; or

KHK has received an irrevocable undertaking from Schroders in respect of 11,064,656 ProStrakan Shares (representing approximately 5.47 per cent. of the existing issued share capital of ProStrakan):

l to procure the vote in favour of the Scheme and the ProStrakan Resolutions; and

l if the Acquisition is structured as a takeover offer, to procure the acceptance of such offer by KHK.

The irrevocable undertaking given by Schroders will lapse if:

l the Scheme Document has not been published within 28 days of the date of this announcement (or within such longer period as KHK, with the consent of the Panel, determines, not to be longer than six weeks from the date of the date of this announcement); or

l in the event that the Acquisition is implemented by way of a takeover offer, the offer lapses or is withdrawn;

l a third party announces a firm intention to make an offer for ProStrakan (howsoever structured) on terms which represent in Schroders' opinion substantially no less than 140 pence per ProStrakan Share as at the date on which such offer is announced and Schroders has an intention to accept such offer; or

l in certain circumstances where Schroders' clients have terminated their relationship or changed their investment mandate in respect of the relevant ProStrakan Shares.

KHK has received an irrevocable undertaking from Aberforth in respect of 18,284,435 ProStrakan Shares over which it has discretionary and voting control (representing approximately 9.04 per cent. of the existing issued share capital of ProStrakan):

l to vote in favour of the Scheme and the ProStrakan Resolutions; and

l if the Acquisition is structured as a takeover offer, to accept such offer by KHK.

The irrevocable undertaking given by Aberforth will lapse if:

l an announcement is made by a third party in accordance with Rule 2.5 of the Code of a higher competing offer in respect of the acquisition of ProStrakan which represents, in Aberforth's opinion at any time, a value of not less than 140 pence per ProStrakan Share, and Aberforth notifies KHK or otherwise makes an announcement or notification that, as a result of such higher competing offer, it no longer intends to vote in favour of the Scheme. In determining the value of any higher competing offer, Aberforth is entitled to take into account such matters, circumstances and factors as it considers, in its sole discretion, appropriate (including, without limitation, any conditions to, or risks associated with the completion or implementation of, such offer and where such offer includes any non-cash consideration, factors other than the then market value, if any, of such consideration);

l the Scheme is withdrawn or does not become effective; or

l the Scheme Document has not been posted within 28 days of the date of this announcement.

APPENDIX IV

IMPLEMENTATION AGREEMENT

Inducement fee

In consideration of KHK making the Acquisition, ProStrakan has agreed to pay to KHK an inducement fee equal to one per cent. of the value of the Acquisition (subject to any adjustment for VAT) if, prior to the date upon which the Acquisition lapses or is withdrawn:

(a) the ProStrakan Directors (or any committee of the ProStrakan Directors) do not unanimously and without qualification recommend the Acquisition, or if they withdraw or adversely modify or qualify the terms of their unanimous recommendation of the Acquisition; or

(b) if the Acquisition is proceeding by way of the Scheme, the Court Meeting and/or the General Meeting is adjourned without the prior written consent of KHK, unless such adjournment is a Permitted Adjournment and subsequently the Acquisition does not become effective (if implemented by way of the Scheme) or does not become or is not declared wholly unconditional (if implemented by way of a takeover offer) in either case on or before 1 July 2011; or

(c) an Alternative Proposal is announced (whether or not on a pre-conditional basis and whether pursuant to Rule 2.4 or Rule 2.5 of the Code) and that Alternative Proposal or any other Alternative Proposal (which is announced pursuant to Rule 2.4 or Rule 2.5 prior to the first Alternative Proposal lapsing or (with the consent of the Panel) being withdrawn) subsequently becomes effective or is declared wholly unconditional or is otherwise completed.

Nothing in the Implementation Agreement shall oblige ProStrakan to pay to KHK any amount which the Panel would not permit it to pay pursuant to Rule 21.2 of the Code or which would otherwise be unlawful.

Non-solicitation

ProStrakan has undertaken that it shall not, and shall procure that each member of the ProStrakan Group and its and their respective directors, management team and advisers shall not actively solicit, initiate or otherwise seek to procure or initiate any approach to, or offer from, any person who is not a concert party of KHK with a view to a transaction taking place which would constitute or may lead to an Alternative Proposal or is reasonably likely to preclude or restrict or delay the Acquisition. KHK has agreed that these restrictions will not prevent ProStrakan from continuing discussions with those third parties it is currently in contact with in relation to a potential offer for the entire issued share capital of ProStrakan.

ProStrakan has agreed to notify KHK in writing as soon as practicable if it or any of its directors, employees or advisers (a) receives an approach in relation to a possible Alternative Proposal; or (b) receives any request for information under Rule 20.2 of the Code.

Right to match

ProStrakan has agreed that if it makes a notification to KHK of an Alternative Proposal (as required under the Implementation Agreement) and such Alternative Proposal is a Superior Proposal (a "Superior Proposal Notice"), ProStrakan shall not: (a) accept, recommend, approve or enter into any agreement to implement such Alternative Proposal; or (b) withhold, withdraw or adversely modify its recommendation in respect of the Acquisition, in each case, until the first to occur of the following: (i) KHK having failed within three Business Days ("Business Day" here meaning any day other than a Saturday or Sunday or a public holiday on which banks are generally open for business in London, Edinburgh and Tokyo) of receipt of the Superior Proposal Notice to announce its firm intention to increase the terms of the Acquisition to a price per share equal to or greater than that provided under the Superior Proposal; or (ii) KHK has confirmed to ProStrakan that it is not willing to increase the terms of the Acquisition to a price per share equal to or greater than that provided under the Superior Proposal.

For these purposes, in the case of a Superior Proposal which includes any non-cash consideration, the "price" represented by such non-cash consideration shall, to the extent practicable, be determined by reference to the middle market closing price of such consideration as at the last trading day prior to the date of the notification or, if such non-cash consideration is not in the form of traded securities, the market value of such consideration as at the date of the notification.

APPENDIX V

DEFINITIONS

The following definitions apply throughout this announcement unless the context requires otherwise.

 
"Aberforth"                   Aberforth Partners LLP; 
"Acquisition"                 the proposed acquisition by KHK (or a wholly 
                              owned subsidiary of KHK) of the entire issued 
                              and to be issued share capital of ProStrakan 
                              (other than ProStrakan Shares already held by 
                              KHK, if any), on the terms and subject to the 
                              conditions set out in this announcement and to 
                              be set out in the Scheme Document (and, where 
                              the context so requires, any subsequent 
                              revision, variation, extension or renewal of 
                              such acquisition); 
"Alternative Proposal"        for the purposes of the Implementation 
                               Agreement, a proposed offer, scheme of 
                               arrangement, merger, acquisition or other 
                               business combination relating to any direct 
                               or indirect acquisition of thirty per cent. 
                               or more of the ProStrakan Shares or all 
                               or any material part (meaning thirty per 
                               cent. or more in value) of the business 
                               or assets of the ProStrakan Group proposed 
                               by any third party which is not a concert 
                               party (as defined in the Code) of KHK; 
"Announcement Date"           21 February 2011; 
"Annual Report and            the annual consolidated audited report 
 Accounts"                     and accounts of ProStrakan for the year 
                               ended 31 December 2009; 
"authorisations"              all authorisations, orders, grants, 
                              recognitions, confirmations, licences, consents, 
                              clearances, permissions and approvals; 
"BofA Merrill Lynch"          Merrill Lynch Japan Securities Co., Ltd., 
                               acting through its affiliate, Merrill Lynch 
                               International, as appropriate; 
"business day"                a day on which the London Stock Exchange 
                               is open for the transaction of business; 
"Code"                        the City Code on Takeovers and Mergers 
                               of the United Kingdom (as amended); 
"Companies Act"               the Companies Act 2006 (as amended); 
"Conditions"                  the conditions to the Acquisition which 
                               are set out in Part 1 of Appendix I to 
                               this announcement and to be set out in 
                               the Scheme Document; 
"Court"                       the Court of Session in Edinburgh, Scotland; 
"Court Meeting"               the meeting of Scheme Shareholders to be 
                               convened pursuant to an order of the Court 
                               pursuant to Part 26 of the Companies Act 
                               for the purpose of considering and, if 
                               thought fit, approving the Scheme (with 
                               or without modification), including any 
                               adjournment thereof; 
"Executive Share              the ProStrakan Group Executive Share Option 
 Option Plan"                  Plan 2005; 
"FSA"                         the United Kingdom Financial Services Authority; 
"FSMA"                        the Financial Services and Markets Act 
                               2000; 
"Implementation               the implementation agreement between KHK 
 Agreement"                    and ProStrakan dated 21 February 2011 in 
                               connection with the implementation of the 
                               Acquisition; 
"Intellectual Property        (i) copyright, patents, database rights and 
 Rights"                      rights in trade marks, designs, know-how and 
                              confidential information (whether registered or 
                              unregistered), (ii) applications for 
                              registration, and rights to apply for 
                              registration, of any of the foregoing rights and 
                              (iii) all other intellectual property rights and 
                              equivalent or similar forms of protection 
                              existing anywhere in the world; 
"J.P. Morgan Cazenove"        J.P. Morgan plc, which operates its investment 
                               banking business in the United Kingdom 
                               under the name J.P. Morgan Cazenove; 
"KHK"                         Kyowa Hakko Kirin Co., Ltd., a company 
                               established in Japan whose head office 
                               is at 1-6-1 Ohtemachi, Chiyoda-ku, Tokyo 
                               100-8185, Japan; 
"KHK Directors"               the board of directors of KHK; 
"KHK Group"                   KHK, its subsidiaries and subsidiary 
                              undertakings; 
"Listing Rules"               the rules and regulations made by the FSA 
                               in its capacity as the UK Listing Authority 
                               under FSMA, and contained in the UK Listing 
                               Authority's publication of the same name; 
"LMS Capital"                 LMS Capital plc; 
"London Stock Exchange"       London Stock Exchange plc; 
"Meetings"                    the Court Meeting and/or the ProStrakan 
                               General Meeting as the case may be; 
"Numis"                       Numis Securities Limited; 
"Official List"               the official list of the London Stock Exchange; 
"Panel"                       the Panel on Takeovers and Mergers; 
"Performance Share            the ProStrakan Group Performance Share 
 Plan"                         Plan 2005; 
"Permitted Adjournment"       for the purposes of the Implementation 
                               Agreement, an adjournment of the Court 
                               Meeting and/or the ProStrakan General Meeting 
                               which is sought by ProStrakan as a result 
                               of (i) a request for such adjournment made 
                               by KHK; (ii) any requirement of the Court 
                               or the Panel; or (iii) events or circumstances 
                               which are beyond the reasonable control 
                               of ProStrakan and which prevent, prohibit 
                               or materially restrict ProStrakan's ability 
                               to convene, hold or transact the relevant 
                               business at the relevant Meeting at the 
                               time and date specified in the Scheme Document; 
"ProStrakan"                  ProStrakan Group plc, a company incorporated 
                               in Scotland (with registered number SC198780) 
                               with its registered office at Galabank 
                               Business Park, Galashiels, TD1 1QH; 
"ProStrakan Directors"        the directors of ProStrakan; 
"ProStrakan General           the general meeting of ProStrakan to be 
 Meeting"                      convened in connection with the Scheme, 
                               and the Reduction of Capital, including 
                               any adjournment thereof; 
"ProStrakan Group"            ProStrakan, its subsidiaries and subsidiary 
                               undertakings; 
"ProStrakan Resolutions"      the special resolutions to approve, amongst 
                               other things, the cancellation of the entire 
                               issued share capital of ProStrakan and 
                               such other matters as may be necessary 
                               to implement the Scheme in the form set 
                               out in the Scheme Document; 
"ProStrakan Shareholders"     the holders of ProStrakan Shares, from 
                               time to time; 
"ProStrakan Shares"           ordinary shares of GBP0.05 each in the 
                               capital of ProStrakan; 
"ProStrakan Share             the ProStrakan Group Executive Share Option 
 Plans"                        Plan 2005, the ProStrakan Group Performance 
                               Share Plan 2005, the ProStrakan Group Sharesave 
                               Plan 2005, the ProStrakan Group Sharesave 
                               Plan 2006, the ProStrakan Group Sharesave 
                               Plan 2008, the ProStrakan Group Sharesave 
                               Plan 2009 and the ProStrakan Group Sharesave 
                               Plan 2010, the ProStrakan Group Share Incentive 
                               Plan, the Strakan Group plc Share Option 
                               Scheme, the Strakan International Limited 
                               Share Option Scheme 1996, the Strakan Executive 
                               Management Incentive Scheme, the options 
                               granted to the former ProSkelia B.V. employees 
                               and the individual option agreements with 
                               selected individuals; 
"ProStrakan Warrants"         the warrants granted in October 2007 over 
                               ProStrakan Shares as part of the strategic 
                               alliance with NovaQuest and the warrants 
                               granted over ProStrakan Shares as part 
                               of a financing arrangement entered into 
                               by ProStrakan in March 2007; 
"Reduction Court              the order of the Court confirming the Reduction 
 Order"                        of Capital under section 648 of the Companies 
                               Act; 
"Reduction of Capital"        the reduction of ProStrakan's share capital 
                               by the cancellation and extinguishing of 
                               the Scheme Shares provided for by the Scheme 
                               pursuant to section 641 of the Companies 
                               Act; 
"Regulation"                  Article 22(1) of Council Regulation (EC) 
                               No. 139/2004; 
"Regulatory Information       any of the services set out in Appendix 
 Service"                      3 to the Listing Rules; 
"Relevant Authority"          government or governmental, quasi-governmental, 
                               supranational, statutory, administrative 
                               or regulatory body or association, institution 
                               or agency (including any trade agency) 
                               or any court or other body (including any 
                               professional or environmental body) or 
                               person in any jurisdiction; 
"Scheme"                      the proposed scheme of arrangement under 
                               Part 26 of the Companies Act between ProStrakan 
                               and Scheme Shareholders, with or subject 
                               to any modification, addition or condition 
                               thereto approved or imposed by the Court 
                               and agreed to by KHK and ProStrakan; 
"Scheme Court Hearing"        the hearing at which the Scheme Court Order 
                               is sought; 
"Scheme Court Order"          the order of the Court sanctioning the 
                               Scheme under Part 26 of the Companies Act; 
"Scheme Document"             the document to be despatched to (amongst 
                               others) ProStrakan Shareholders following 
                               the date of this announcement containing, 
                               amongst other things, the terms and conditions 
                               of the Scheme and the notices of the Meetings; 
"Scheme Effective             the date on which the Scheme becomes effective; 
 Date" 
"Scheme Record Time"          6.00 p.m. on the business day immediately 
                               preceding the Scheme Effective Date; 
"Scheme Shareholders"         the holders of Scheme Shares; 
"Scheme Shares"                           all ProStrakan Shares: (i) in issue 
                                          at the date of the Scheme Document; 
                                          and (ii) (if any) issued after the 
                                          date of the Scheme Document and 
                                          before the Voting Record Time; and 
                                          (iii) (if any) issued at or after 
                                          the Voting Record Time but on or 
                                          before the Scheme Record Time either 
                                          on terms that the original or any 
                                          subsequent holders thereof shall be 
                                          bound by the Scheme or in respect of 
                                          which the holders thereof have 
                                          agreed in writing to be bound by the 
                                          Scheme, but excluding any ProStrakan 
                                          Shares beneficially owned by any 
                                          member of the KHK Group and any 
                                          ProStrakan Shares held by the 
                                          ProStrakan Group's employee benefit 
                                          trust; 
"Schroders"                   Schroder Investment Management Limited; 
"Sharesave Plans"             the ProStrakan Group Sharesave Plan 2005, 
                               the ProStrakan Group Sharesave Plan 2006, 
                               the ProStrakan Group Sharesave Plan 2008, 
                               the ProStrakan Group Sharesave Plan 2009 
                               and the ProStrakan Group Sharesave Plan 
                               2010; 
"Substantial Interest"        a direct or indirect interest of 20 per 
                               cent. or more of the voting equity capital 
                               of an undertaking; 
"Superior Proposal"           for the purposes of the Implementation 
                               Agreement, a bona fide Alternative Proposal 
                               which the ProStrakan Directors consider, 
                               acting reasonably and in good faith and 
                               after consultation with their legal and 
                               financial advisers, is able to be announced 
                               pursuant to Rule 2.5 of the Code within 
                               a reasonable period of time and likely 
                               to be completed on its terms, taking into 
                               account all financial, regulatory and other 
                               aspects of such Alternative Proposal and 
                               which, at the time of announcement, would 
                               be, from a financial perspective for ProStrakan 
                               Shareholders, superior to the terms of 
                               the Acquisition; 
"United Kingdom"              the United Kingdom of Great Britain and 
 or "UK"                       Northern Ireland; 
"United States"               the United States of America, its territories 
 or "US"                      and possessions, any state of the United States 
                              of America, the District of Columbia and all 
                              other areas subject to its jurisdiction; 
"UK Listing Authority"        the Financial Services Authority in its 
                               capacity as the competent authority under 
                               the Financial Services and Markets Act 
                               2000; 
"Voting Record Time"          the time and date specified in the Scheme 
                               Document by reference to which entitlement 
                               to vote on the Scheme will be determined, 
                               expected to be 6.00 p.m. on the day which 
                               is two days before the date of the Court 
                               Meeting or, if the Court Meeting is adjourned, 
                               6.00 p.m. on the day which is two days 
                               before the date of such adjourned Court 
                               Meeting; 
"Warburg Pincus"              together, Warburg Pincus & Co., Warburg Pincus 
                              Partners, LLC, Warburg Pincus Private Equity 
                              VIII L.P., Warburg Pincus Netherlands Private 
                              Equity VIII I, CV, WP-WPVIII Investors L.P., 
                              Warburg Pincus Equity Partners L.P., Warburg 
                              Pincus Netherlands Equity Partners I, C.V., 
                              Warburg Pincus Netherlands Equity Partners III, 
                              C.V., Warburg Pincus International Partners, 
                              L.P., Warburg Pincus Netherlands International 
                              Partners I, CV and WP-WPIP Investors L.P; 
"Wider KHK Group"             KHK and its subsidiary undertakings, associated 
                               undertakings and any other undertakings 
                               in which KHK and such undertakings (aggregating 
                               their interests) have a Substantial Interest; 
"Wider ProStrakan             ProStrakan and its subsidiary undertakings, 
 Group"                       associated undertakings and any other 
                              undertakings in which ProStrakan and such 
                              undertakings (aggregating their interests) have 
                              a Substantial Interest; 
"subsidiary", "subsidiary     have the meanings given by the Companies 
 undertaking", "undertaking"   Act; 
 and "associated 
 undertaking" 
"Yen"                         Japanese Yen; and 
"GBP" and "pence"             pounds and pence sterling, the lawful currency 
                               of the UK.

Words importing the singular shall include the plural and vice versa, and words importing the masculine gender shall include the feminine or neutral gender.

All times referred to in this announcement are London times.

This information is provided by RNS

The company news service from the London Stock Exchange

END

OFFSEESMFFFSEEE

Prostrakan (LSE:PSK)
Historical Stock Chart
From Jul 2024 to Aug 2024

Prostrakan (LSE:PSK)
Historical Stock Chart
From Aug 2023 to Aug 2024

Market Data

News

Trading Tools

Markets

Discover

Hot Features

Follow Feed

Options Flow

Monitor

PSK Prostrakan

Prostrakan News

Your Recent History

Company

Business

Popular

Get The App

Trending Now

Toplists

Market Data

News

Trading Tools

Markets

Discover

Hot Features

Follow Feed

Options Flow

Monitor

PSK Prostrakan

Prostrakan News

Your Recent History

Company

Business

Popular

Get The App