TIDMVER
RNS Number : 3565X
Vernalis PLC
09 August 2018
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION
FOR IMMEDIATE RELEASE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014
9 August 2018
RECOMMED CASH OFFER
for
VERNALIS PLC
by
LIGAND HOLDINGS UK LTD.
(a wholly owned subsidiary of Ligand Pharmaceuticals
Incorporated)
Summary
-- The Boards of Vernalis plc (Vernalis) and Ligand Holdings UK
Ltd. (Ligand UK) are pleased to announce that they have reached
agreement on the terms of a recommended cash offer for Vernalis by
Ligand UK pursuant to which Ligand UK will acquire the entire
issued and to be issued share capital of Vernalis (the
Acquisition).
-- Ligand UK is a wholly owned subsidiary of Ligand
Pharmaceuticals Incorporated (Ligand). Ligand is a NASDAQ listed
biopharmaceutical company focused on developing or acquiring
technologies that help pharmaceutical companies discover and
develop medicines.
-- It is intended that the Acquisition will be effected by means
of a Court-sanctioned scheme of arrangement between Vernalis and
the Vernalis Shareholders under Part 26 of the Companies Act
2006.
-- Under the terms of the Acquisition, Vernalis Shareholders will be entitled to receive:
6.2 pence in cash for each Vernalis Share
which values the entire issued share capital of Vernalis at
approximately GBP32.67 million.
-- Vernalis ADS Holders will receive consideration paid under
the terms of the Acquisition in respect of the Vernalis Shares
underlying their Vernalis ADSs in accordance with the terms of the
Deposit Agreement upon surrender of their Vernalis ADSs. Each
Vernalis ADS represents two Vernalis Shares. Vernalis ADS Holders
will be notified regarding the Acquisition in due course.
-- The price of 6.2 pence per Vernalis Share represents a premium of approximately:
o 45.7 per cent. to the Closing Price of 4.3 pence per Vernalis
Share as at 14 March 2018, being the last Business Day before the
Vernalis Directors announced the commencement of the formal sale
process for Vernalis under the terms of the Code;
o 29.1 per cent. to the volume weighted average price of 4.8
pence per Vernalis Share for the 30 days ended 14 March 2018Íž
and
o 1.7 per cent. to the volume weighted average price of 6.1
pence per Vernalis Share for the three months ended 14 March
2018.
-- The Acquisition follows the Ligand Group's stated strategy to
focus on acquiring technologies that help pharmaceutical companies
discover and develop medicines.
-- The Acquisition will be funded entirely from the Ligand Group's existing cash resources.
-- The Vernalis Directors, who have been so advised by Evercore
as to the financial terms of the Acquisition, consider the terms of
the Acquisition to be fair and reasonable. Evercore is providing
independent financial advice to the Vernalis Directors for the
purposes of Rule 3 of the Code. In providing its financial advice
to the Vernalis Directors, Evercore has taken into account the
commercial assessments of the Vernalis Directors.
-- Accordingly, the Vernalis Directors intend to recommend
unanimously that Vernalis Shareholders vote in favour of the Scheme
at the Court Meeting and the resolutions relating to the
Acquisition at the Vernalis General Meeting (or, in the event that
the Acquisition is implemented by way of a Takeover Offer, to
accept or procure the acceptance of such Takeover Offer). Each of
Dr. Peter Fellner, Ian Garland, David Mackney, Carol Ferguson and
Nigel Sheail have irrevocably undertaken to vote in favour of the
Scheme at the Court Meeting and in favour of the resolutions
relating to the Acquisition at the Vernalis General Meeting in
respect of their own beneficial holdings of Vernalis Shares,
amounting to, in aggregate, 2,447,817 Vernalis Shares representing
approximately 0.464 per cent. of Vernalis' share capital in issue
on 8 August 2018 (being the latest practicable date before the
release of this announcement). Further details are set out in
Appendix 3 to this announcement.
-- In addition to the irrevocable undertakings received from
each of Dr. Peter Fellner, Ian Garland, David Mackney, Carol
Ferguson and Nigel Sheail, Ligand UK has received irrevocable
undertakings from IAML and Woodford Investment Management,
Vernalis' two largest shareholders, representing, in aggregate,
approximately 66.85 per cent. of Vernalis' share capital in issue
on 8 August 2018 (being the latest practicable date before the
release of this announcement) to vote in favour of the Scheme at
the Court Meeting and in favour of the resolutions relating to the
Acquisition at the Vernalis General Meeting, or in the event that
the Acquisition is implemented by way of a Takeover Offer, to
accept or procure the acceptance of such Takeover Offer. Further
details are set out in Appendix 3 to this announcement.
-- The Acquisition is subject to a number of Conditions and
further terms, including the approval of the Scheme by the Vernalis
Shareholders by the requisite majorities and the sanctioning of the
Scheme by the Court. The Conditions are set out in full at Appendix
1 to this announcement.
-- The Scheme Document, containing further information about the
Acquisition and notices of the Court Meeting and the Vernalis
General Meeting, together with the Forms of Proxy, will be
published as soon as practicable and, in any event, within 28 days
of this announcement.
-- Commenting on the Acquisition, Dr. Peter Fellner, Chairman of Vernalis, said:
"On behalf of the Board, following the formal sale process that
the business initiated in March this year, I am pleased to
recommend the acquisition of Vernalis by the Ligand Group to all
Vernalis Shareholders. The Board was pleased with the interest the
Company received as part of the formal sale process and believes
the cash offer from the Ligand Group represents the best value for
all Vernalis shareholders."
-- finnCap and MTS are acting as financial advisers to Ligand UK
in respect of the Acquisition. Latham & Watkins LLP is acting
as legal adviser to Ligand UK.
-- Evercore is acting as financial adviser to Vernalis in
respect of the Acquisition. Canaccord Genuity is acting as
Nominated Adviser and broker to Vernalis in respect of the
Acquisition. Covington & Burling LLP is acting as legal adviser
to Vernalis in respect of the Acquisition.
This summary should be read in conjunction with, and is subject
to, the full text of this announcement (including the Appendices).
The Acquisition will be subject to the Conditions and certain
further terms set out in Appendix 1 to this announcement and to the
full terms and conditions which will be set out in the Scheme
Document. Appendix 2 contains the bases and sources of certain
information used in this summary and this announcement. Appendix 3
contains details of the irrevocable undertakings received in
relation to the Acquisition that are referred to in this
announcement. Appendix 4 contains definitions of certain terms used
in this summary and this announcement.
Market Soundings
Market soundings, as defined in the Market Abuse Regulation,
were taken in respect of the Acquisition with the result that
certain persons became aware of inside information, as permitted by
the Market Abuse Regulation. That inside information is set out in
this announcement. Therefore, those persons that received inside
information in a market sounding are no longer in possession of
inside information relating to Vernalis and Ligand and their
respective securities.
Enquiries
Vernalis plc
Ian Garland, Chief Executive Officer
David Mackney, Chief Financial Officer +44 (0) 118 938 0015
Canaccord Genuity Limited (Nominated Adviser
and broker to Vernalis)
Henry Fitzgerald-O'Connor
Emma Gabriel +44 (0) 20 7523 8000
Evercore (Financial adviser to Vernalis)
Julian Oakley
Alan Beirne +44 (0) 20 7653 6000
Ligand Pharmaceuticals Incorporated
Matthew Korenberg
Todd Pettingill +1 858 550 7500
finnCap Ltd (Financial adviser to Ligand
UK)
Henrik Persson
Giles Rolls
Max Bullen-Smith +44 (0) 20 7220 0500
MTS Securities, LLC (Financial adviser
to Ligand UK)
Mark Menkowski +1 212 887 2100
Important notices relating to financial advisers
Evercore, which is authorised and regulated by the FCA in the
United Kingdom, is acting solely for Vernalis as financial adviser
in relation to the matters referred to in this announcement and for
no one else. Evercore will not be responsible to anyone other than
Vernalis for providing the protections afforded to its clients or
for providing advice in relation to the contents of this
announcement or any arrangement referred to herein. Neither
Evercore, nor any of its affiliates, owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statue or otherwise) to any
person other than Vernalis in connection with this announcement,
any statement contained herein or otherwise. Evercore has given,
and not withdrawn, its consent to the inclusion in this
announcement of the references to its name and the advice it has
given to Vernalis in the form and context in which they appear.
Canaccord Genuity, which is authorised and regulated by the FCA
in the United Kingdom, is acting solely for Vernalis as Nominated
Adviser and broker and for no one else in relation to the
Acquisition, the content of this announcement and other matters
described in this announcement, and will not be responsible to
anyone other than Vernalis for providing the protections afforded
to the clients of Canaccord Genuity or for providing advice to any
other person in relation to the Acquisition, the content of this
announcement or any other matters described in this announcement.
Neither Canaccord Genuity, nor any of its affiliates, owes or
accepts any duty, liability or responsibility whatsoever (whether
direct or indirect, whether in contract, in tort, under statue or
otherwise) to any person other than Vernalis in connection with
this announcement, any statement contained herein or otherwise.
Canaccord Genuity has given, and not withdrawn, its consent to the
inclusion in this announcement of the references to its name in the
form and context in which they appear.
finnCap, which is authorised and regulated by the FCA in the
United Kingdom, is acting exclusively as financial adviser to
Ligand UK and for no one else in connection with the matters
referred to in this announcement and will not be responsible to
anyone other than Ligand UK for providing the protections afforded
to its clients or for providing advice in relation to the matters
referred to in this announcement. Neither finnCap, nor any of its
affiliates, owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client
of finnCap in connection with this announcement, any statement
contained herein or otherwise. finnCap has given, and not
withdrawn, its consent to the inclusion in this announcement of the
references to its name in the form and context in which they
appear.
MTS is acting exclusively as financial adviser to Ligand UK and
for no one else in connection with the matters referred to in this
announcement and will not be responsible to anyone other than
Ligand UK for providing the protections afforded to its clients or
for providing advice in relation to the matters referred to in this
announcement. MTS is a US registered broker dealer and is not
advising Ligand UK for the purposes of the Code. Neither MTS, nor
any of its affiliates, owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, whether in
contract, in tort, under statute or otherwise) to any person who is
not a client of MTS in connection with this announcement, any
statement contained herein or otherwise.
Further information
This announcement is not intended to, and does not, constitute
or form part of any offer, invitation or the solicitation of an
offer to purchase, otherwise acquire, subscribe for, sell or
otherwise dispose of any securities, or the solicitation of any
vote or approval in any jurisdiction, pursuant to the Acquisition
or otherwise. The Acquisition will be implemented solely pursuant
to the terms of the Scheme Document (or, in the event that the
Acquisition is to be implemented by means of a Takeover Offer, the
Offer Document), which will contain the full terms and conditions
of the Acquisition, including details of how to vote in respect of
the Acquisition. Any response to the Acquisition should be made
only on the basis of information contained in the Scheme Document.
Vernalis Shareholders are advised to read the formal documentation
in relation to the Acquisition carefully once it has been
despatched.
Overseas jurisdictions
The release, publication or distribution of this announcement in
or into jurisdictions other than the United Kingdom may be
restricted by law and therefore any persons who are subject to the
laws of any jurisdiction other than the United Kingdom should
inform themselves about, and observe, any applicable legal or
regulatory requirements. In particular, the ability of persons who
are not resident in the United Kingdom to vote their Vernalis
Shares with respect to the Scheme at the Court Meeting, or to
execute and deliver forms of proxy appointing another person to
vote at the Court Meeting on their behalf, may be affected by the
laws of the relevant jurisdictions in which they are located. 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.
This announcement has been prepared for the purpose of complying
with English law, the rules of the London Stock Exchange, the AIM
Rules 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 of England & Wales.
Unless otherwise determined by Ligand UK or required by the
Code, and permitted by applicable law and regulation, the
Acquisition will not be made available, directly or indirectly, in,
into or from a Restricted Jurisdiction where to do so would violate
the laws in that jurisdiction and no person may vote in favour of
the Acquisition by any such use, means, instrumentality or form
within a Restricted Jurisdiction or any other jurisdiction if to do
so would constitute a violation of the laws of that jurisdiction.
Accordingly, copies of this announcement and any formal
documentation relating to the Acquisition are not being, and must
not be, directly or indirectly, mailed, transmitted or otherwise
forwarded, distributed or sent in or into or from any Restricted
Jurisdiction or any other jurisdiction where to do so would
constitute a violation of the laws of that jurisdiction, and
persons receiving such documents (including custodians, nominees
and trustees) must not mail or otherwise forward, distribute or
send such documents in or into or from any Restricted Jurisdiction.
Doing so may render invalid any related purported vote in respect
of the Acquisition. If the Acquisition is implemented by way of a
Takeover Offer (unless otherwise permitted by applicable law and
regulation), the Takeover Offer may not be made directly or
indirectly, in or into, or by the use of mails or any means or
instrumentality (including, but not limited to, facsimile, e-mail
or other electronic transmission or telephone) of interstate or
foreign commerce of, or of any facility of a national, state or
other securities exchange of any Restricted Jurisdiction and the
Takeover Offer may not be capable of acceptance by any such use,
means, instrumentality or facilities or from within any Restricted
Jurisdiction.
Further details in relation to Vernalis Shareholders in overseas
jurisdictions will be contained in the Scheme Document.
Notice to US holders of Vernalis Shares and Vernalis ADSs
The Acquisition relates to the shares of an English company and
is being made by means of a scheme of arrangement provided for
under English company law. A transaction effected by means of a
scheme of arrangement is not subject to the tender offer rules or
the proxy solicitation rules under the US Exchange Act.
Accordingly, the Acquisition is subject to the disclosure
requirements and practices applicable in the United Kingdom to
schemes of arrangement which differ from the disclosure
requirements of United States tender offer and proxy solicitation
rules. If, in the future, Ligand UK exercises the right to
implement the Acquisition by way of a Takeover Offer and determines
to extend such Takeover Offer into the United States, the
Acquisition will be made pursuant to applicable UK tender offer
rules and securities laws and otherwise in accordance with the
requirements of the Code. Accordingly, any such Takeover Offer will
be subject to disclosure and other procedural requirements,
including with respect to withdrawal rights, offer timetable,
settlement procedures and timing of payments, that are different
from those applicable to tender offers made in accordance with US
procedures and law. Financial information included in this
announcement and the Scheme Document has been or will be prepared
in accordance with accounting standards applicable in the United
Kingdom that may not be comparable to financial information of US
companies or companies whose financial statements are prepared in
accordance with generally accepted accounting principles in the
United States.
It may be difficult for US holders of Vernalis Shares (and
Vernalis ADS Holders) to enforce their rights and any claim arising
out of the US federal securities laws, since Vernalis is located in
a non-US jurisdiction, and some or all of their officers and
directors may be residents of a non-US jurisdiction. US holders of
Vernalis Shares and Vernalis ADS Holders may not be able to sue a
non-US company or its officers or directors in a non-US court for
violations of the US securities laws. Further, it may be difficult
to compel a non-US company and its affiliates to subject themselves
to a US court's judgement.
Neither the SEC nor any securities commission of any state of
the United States has approved the Acquisition, passed upon the
fairness of the Acquisition or passed upon the adequacy or accuracy
of this announcement. Any representation to the contrary is a
criminal offence in the United States.
In accordance with normal UK practice and pursuant to Rule
14e-5(b) of the US Exchange Act, Ligand UK or its nominees or
brokers (acting as agents) may from time to time make certain
purchases of, or arrangements to purchase, Vernalis Shares outside
the United States, other than pursuant to the Acquisition, until
the date on which the Takeover Offer and/or Scheme becomes
effective, lapses or is otherwise withdrawn. These purchases may
occur either in the open market at prevailing prices or in private
transactions at negotiated prices. Any information about such
purchases will be disclosed as required in the UK, will be reported
to the Regulatory News Service of the London Stock Exchange and
will be available on the London Stock Exchange website.
Forward-looking statements
This announcement contains statements about the Ligand Group and
the Vernalis Group which are, or may be deemed to be,
"forward-looking statements" and which are prospective in nature.
All statements other than statements of historical fact included in
this announcement may be forward-looking statements. They are based
on current expectations and projections about future events, and
are therefore subject to risks and uncertainties which could cause
actual results to differ materially from the future results
expressed or implied by the forward-looking statements. Often, but
not always, forward-looking statements can be identified by the use
of forward-looking words such as "plans", "expects", "is expected",
"is subject to", "budget", "scheduled", "estimates", "forecasts",
"predicts", "intends", "anticipates", "believes", "targets",
"aims", "projects", "future-proofing" or words or terms of similar
substance or the negative of such words or terms, as well as
variations of such words and phrases or statements that certain
actions, events or results "may", "could", "should", "would",
"might" or "will" be taken, occur or be achieved. Such statements
are qualified in their entirety by the inherent risks and
uncertainties surrounding future expectations. Forward-looking
statements may include statements relating to the following: (i)
future capital expenditures, expenses, revenues, earnings,
synergies, economic performance, indebtedness, financial condition,
dividend policy, losses and future prospects; (ii) business and
management strategies and the expansion and growth of the Ligand
Group's or the Vernalis Group's operations and potential synergies
resulting from the Acquisition; and (iii) the effects of global
economic conditions and governmental regulation on the Ligand
Group's or the Vernalis Group's business.
Such forward-looking statements involve known and unknown risks
and uncertainties that could significantly affect expected results
and are based on certain key assumptions. Many factors may cause
the actual results, performance or achievements of the Ligand Group
or the Vernalis Group to be materially different from any future
results, performance or achievements expressed or implied by the
forward-looking statements. These factors include changes in the
global, political, economic, business, competitive, market and
regulatory forces, future exchange and interest rates, changes in
tax rates and future business combinations or disposals. For a
discussion of important factors which could cause actual results to
differ from forward-looking statements in relation to the Ligand
Group or the Vernalis Group, refer to the annual report and
accounts of the Ligand Group for the financial year ended 31
December 2017 and of the Vernalis Group for the financial year
ended 30 June 2017, respectively. Each of the Ligand Group and the
Vernalis Group, and each of their respective members, directors,
officers, employees, advisers and persons acting on their behalf,
expressly disclaims any intention or obligation to update or revise
any forward-looking or other statements contained in this
announcement, whether as a result of new information, future events
or otherwise, except as required by applicable law.
No member of the Ligand Group, nor the Vernalis Group, nor any
of their respective associates, directors, officers, employees or
advisers, provides any representation, assurance or guarantee that
the occurrence of the events expressed or implied in any
forward-looking statements in this announcement will actually
occur.
Except as expressly provided in this announcement, no
forward-looking or other statements have been reviewed by the
auditors of the Ligand Group or the Vernalis Group. All subsequent
oral or written forward-looking statements attributable to any
member of the Ligand Group or Vernalis Group, or any of their
respective associates, directors, officers, employees or advisers,
are expressly qualified in their entirety by the cautionary
statement above.
No profit forecast and profit estimate
No statement in this announcement is intended as a profit
forecast or estimate for any period and no statement in this
announcement should be interpreted to mean that earnings or
earnings per share for Vernalis for the current or future financial
years would necessarily match or exceed the historical published
earnings or earnings per share for Vernalis.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1
per cent. or more of any class of relevant securities of an offeree
company or of any securities exchange offeror (being any offeror
other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) of the Code applies must be made by no
later than 3.30 pm (London time) on the 10th Business Day following
the commencement of the Offer Period and, if appropriate, by no
later than 3.30 pm (London time) on the 10th Business Day following
the announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of
(i) the offeree company and (ii) any securities exchange offeror,
save to the extent that these details have previously been
disclosed under Rule 8 of the Code. A Dealing Disclosure by a
person to whom Rule 8.3(b) of the Code applies must be made by no
later than 3.30 pm (London time) on the Business Day following the
date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3 of the Code.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of
the Code).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel.org.uk, including
details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified.
You should contact the Panel's Market Surveillance Unit on +44
(0)20 7638 0129 if you are in any doubt as to whether you are
required to make an Opening Position Disclosure or a Dealing
Disclosure.
Rule 2.9 disclosure
In accordance with Rule 2.9 of the Code, Vernalis announces that
its issued share capital consists of 526,986,000 ordinary shares of
one pence each, all of which are admitted to trading on the London
Stock Exchange's AIM market for listed securities. The ISIN for the
Vernalis Shares is GB00B3Y5L754.
Vernalis has an American Depositary Receipts programme for which
BNY Mellon Shareowner Services acts as depositary. One Vernalis ADS
represents two underlying Vernalis Shares. Vernalis ADSs trade on
the over-the-counter (OCT) market in the US. The trading symbol for
these securities is VNLPY and the CUSIP number is 92431M206.
The total number of shares attracting voting rights in Vernalis
is therefore 526,986,000.
Information relating to Vernalis Shareholders
Please be aware that addresses, electronic addresses and certain
other information provided by Vernalis Shareholders and Vernalis
ADS Holders, persons with information rights and other relevant
persons for the receipt of communications from Vernalis may be
provided to Ligand UK during the Offer Period as required under
Section 4 of Appendix 4 to the Code to comply with Rule 2.11(c) of
the Code.
Publication on website
A copy of this announcement will be available, subject to
certain restrictions relating to persons resident in Restricted
Jurisdictions, for inspection on the Ligand Group's website at
www.investor.ligand.com/vernalisoffer and on Vernalis' website at
www.vernalis.com promptly and in any event by no later than 12 noon
(London time) on the Business Day following the date of this
announcement. For the avoidance of doubt the contents of those
websites are not incorporated into, and do not form part of, this
announcement.
Vernalis Shareholders may request a hard copy of this
announcement, free of charge, by contacting Vernalis on +44 (0) 118
938 0015. Vernalis Shareholders may also request that all future
documents, announcements and information to be sent to them in
relation to the Acquisition should be in hard copy form.
Rounding
Certain figures included in this announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION
FOR IMMEDIATE RELEASE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014
9 August 2018
RECOMMED CASH OFFER
for
VERNALIS PLC
by
LIGAND HOLDINGS UK LTD.
(a wholly owned subsidiary of Ligand Pharmaceuticals
Incorporated)
1. Introduction
The Boards of Vernalis plc (Vernalis) and Ligand Holdings UK
Ltd. (Ligand UK) are pleased to announce that they have reached
agreement on the terms of a recommended cash offer for Vernalis by
Ligand pursuant to which Ligand will acquire the entire issued and
to be issued share capital of Vernalis (the Acquisition).
Ligand UK is a wholly owned subsidiary of Ligand Pharmaceuticals
Incorporated (Ligand). Ligand is a NASDAQ listed biopharmaceutical
company focused on developing or acquiring technologies that help
pharmaceutical companies discover and develop medicines.
2. The Acquisition
Under the terms of the Acquisition, Vernalis Shareholders will
be entitled to receive:
6.2 pence in cash for each Vernalis Share
which values the entire issued share capital of Vernalis at
approximately GBP32.67 million.
Vernalis ADS Holders will receive consideration paid under the
terms of the Acquisition in respect of the Vernalis Shares
underlying their Vernalis ADSs in accordance with the terms of the
Deposit Agreement upon surrender of their Vernalis ADSs. Each
Vernalis ADS represents two Vernalis Shares. Vernalis ADS Holders
will be notified regarding the Acquisition in due course.
The price of 6.2 pence per Vernalis Share represents a premium
of approximately:
-- 45.7 per cent. to the Closing Price of 4.3 pence per Vernalis
Share as at 14 March 2018, being the last Business Day before the
Vernalis Directors announced the commencement of the formal sale
process for Vernalis under terms of the Code;
-- 29.1 per cent. to the volume weighted average price of 4.8
pence per Vernalis Share for the 30 days ended 14 March 2018 Íž
and
-- 1.7 per cent. to the volume weighted average price of 6.1
pence per Vernalis Share for the three months ended 14 March
2018.
The Vernalis Shares will be acquired by Ligand UK fully paid and
free from all liens, equitable interests, charges, encumbrances,
rights of pre-emption and any other third party rights or interests
whatsoever and together with all rights existing at the Effective
Date or thereafter attaching thereto, including (without
limitation) the right to receive and retain, in full, all dividends
and other distributions (if any) declared, made or paid or any
other return of capital (whether by way of reduction of share
capital or share premium account or otherwise) made on or after the
Effective Date in respect of the Vernalis Shares.
If any dividend or other distribution in respect of the Vernalis
Shares is declared, paid or made on or after the date of this
Announcement, Ligand UK reserves the right to reduce the
consideration payable for each Vernalis Share under the terms of
the Acquisition by the amount per Vernalis Share of such dividend
or distribution
It is intended that the Acquisition will be implemented by way
of a Court-sanctioned scheme of arrangement between Vernalis and
the Vernalis Shareholders under Part 26 of the Companies Act 2006,
further details of which are contained in this announcement and
will be set out in the Scheme Document.
The Acquisition is conditional upon, amongst other things, the
approval of the Scheme by the Scheme Shareholders and the sanction
of the Scheme by the Court. Appendix 1 to this announcement sets
out the Conditions and further terms to which the Acquisition will
be subject. The Acquisition does not require the approval of Ligand
shareholders.
The Scheme Document, containing further information about the
offer and notices of the Court Meeting and the Vernalis General
Meeting, will be published as soon as practicable and, in any
event, within 28 days of this announcement.
The Acquisition will be financed from the Ligand Group's
existing cash resources.
3. Background to and reasons for the Acquisition
The Ligand Group's strategy is to develop and acquire
technologies that help pharmaceutical companies discover and
develop medicines, and is focussed on maintaining a diversified
portfolio of assets across therapeutic areas and technologies. The
Ligand Group has a long history of identifying promising assets,
making acquisitions, implementing operational improvements and
supporting the development of its assets pursuing this
strategy.
The Acquisition is entirely complimentary to the Ligand Group's
strategy. Vernalis brings to the Ligand Group an attractive suite
of commercial opportunities including partnered programs and
established partner relationships, together with a promising
portfolio of development assets, in each case across a number of
therapeutic areas and technology types, which the Ligand Group
intends to support and enhance.
The Acquisition, being the Ligand Group's first acquisition in
Europe, is an exciting opportunity for the Ligand Group to expand,
in the long term, its footprint into the region by building on
Vernalis' accomplished research and development expertise at its
Cambridge facility with opportunities to derive operational and
financial efficiencies across the business.
4. Recommendation
The Vernalis Directors, who have been so advised by Evercore as
to the financial terms of the Acquisition, consider the terms of
the Acquisition to be fair and reasonable. Evercore is providing
independent financial advice to the Vernalis Directors for the
purposes of Rule 3 of the Code. In providing its financial advice
to the Vernalis Directors, Evercore has taken into account the
commercial assessments of the Vernalis Directors.
Accordingly, the Vernalis Directors intend to recommend
unanimously that Vernalis Shareholders vote in favour of the Scheme
at the Court Meeting and the resolutions relating to the
Acquisition at the Vernalis General Meeting (or, in the event that
the Acquisition is implemented by way of a Takeover Offer, to
accept or procure acceptance of such Takeover Offer). Each of Dr.
Peter Fellner, Ian Garland, David Mackney, Carol Ferguson and Nigel
Sheail have irrevocably undertaken to vote in favour of the Scheme
at the Court Meeting and in favour of the resolutions relating to
the Acquisition at the Vernalis General Meeting in respect of their
own beneficial holdings of Vernalis Shares, amounting to, in
aggregate, 2,447,817 Vernalis Shares representing approximately
0.464 per cent. of Vernalis' share capital in issue on 8 August
2018 (being the last practicable date before the release of this
announcement). Further details are set out in Appendix 3 to this
announcement.
Evercore has given and not withdrawn its consent to the
inclusion in this announcement of references to its advice to the
Vernalis Directors in the form and context in which it appears.
5. Background to and reasons for the recommendation of the Vernalis Directors
On 28 February 2018, Vernalis announced that the total number of
Tuzistra(R) XR prescriptions for the financial year ended 30 June
2018 was expected to be below guidance, progress with its cough
cold pipeline had been slower than it had hoped and that, as a
consequence, it would be conducting a strategic review of the
Company's business. On 15 March 2018, Vernalis announced that it
had undertaken a detailed evaluation of alternative forms of
restructuring and concluded that it was not financially viable to
sustain Vernalis' independent US commercial sales and marketing
operation. Consequently, Vernalis determined to wind down its US
commercial business and to seek offers for the Company by way of a
"formal sale process" as defined by the Code.
On 28 March 2018, Ian Garland, Chief Executive Officer
commented: "The Board deeply regrets having to implement the
wide-reaching restructuring recently announced but given the
Tuzistra(R) XR performance and slower than hoped for progress with
the cough cold pipeline, it is no longer viable to sustain our US
commercial operations or continue to pursue our current strategy...
Alongside the closure of the US commercial operations, our focus in
the next few months will be on exploring alternative ways in which
to realise value for shareholders, including potentially the sale
of the Company as a whole. The Board has set a target date for
concluding this activity of 30 September 2018 and we will provide
updates to the market where possible".
On 14 June 2018, Vernalis confirmed that it had terminated its
development and commercialisation agreement with Tris Pharma, Inc.,
with immediate effect, and that it had received expressions of
interest for the Company as a whole as well as for parts of the
Company. Prior to this, and as announced on 14 June 2018, Vernalis
held discussions with a large number of potential bidders,
including public and private companies, who either had contacted
Vernalis directly or had been contacted by Evercore as part of the
sale process.
Following receipt of these initial expressions of interest,
Vernalis down selected to a smaller number of bidders to conduct
further due diligence based on a range of criteria including
valuation, financial capability and strategic fit. Upon receipt of
updated proposals in June 2018, Vernalis entered into detailed
discussions with a number of parties before requesting final offers
for the Company in mid-July. The final offers included all cash and
all share proposals. Following a period of review, further
discussions with its advisers and a thorough evaluation of the
alternatives available to Vernalis, the Vernalis Board believes
that the cash offer from the Ligand Group represents the most
attractive option for Vernalis Shareholders in terms of value, form
of consideration offered and execution certainty. Accordingly, the
Vernalis Board intends to recommend unanimously the Acquisition to
Vernalis Shareholders as set out in paragraph 4.
The Vernalis Directors note that the price of 6.2 pence per
Vernalis Share represents a premium, in cash, of 45.7 per cent. to
the Closing Price of 4.3 pence per Vernalis Share on 14 March 2018,
being the last Business Day before the Vernalis Board announced the
commencement of the formal sale process for Vernalis under the
terms of the Code.
6. Conditions
The Acquisition is conditional, amongst other things, upon:
-- the approval of the Scheme by a majority in number
representing not less than 75 per cent. in value of the Vernalis
Shareholders entitled to vote and present and voting, either in
person or by proxy, at the Court Meeting (or at any adjournment,
postponement or reconvention of such meeting) on or before the 22nd
day after the expected date of the Court Meeting to be set out in
the Scheme Document in due course (or such later date, if any, as
Ligand UK and Vernalis may agree and the Court may allow);
-- the passing of the resolutions to be proposed at the Vernalis
General Meeting by the requisite majority at the Vernalis General
Meeting to be held on or before the 22nd day after the expected
date of the Vernalis General Meeting to be set out in the Scheme
Document (or such later date, if any, as Ligand UK and Vernalis may
agree and the Court may allow);
-- the sanction of the Scheme by the Court (with or without
modification but subject to any modification being on terms
acceptable to Ligand UK and Vernalis) on or before the 22nd day
after the expected date of the Scheme Court Hearing to be set out
in the Scheme Document (or such later date, if any, as Ligand UK
and Vernalis may agree and the Court may allow); and
-- delivery of a copy of the Scheme Court Order to the Registrar of Companies.
The attention of Vernalis Shareholders is drawn to the fact that
the Acquisition is also conditional on other Conditions and certain
further terms set out in Appendix I and to the full terms and
conditions which will be set out in the Scheme Document.
The Scheme Document, along with the notice of the Court Meeting
and the Vernalis General Meeting and the Forms of Proxy will be
despatched to Vernalis Shareholders within 28 days of the date of
this Announcement, unless Ligand UK and Vernalis otherwise agree,
and the Panel consents, to a later date.
7. Irrevocable undertakings
Ligand UK has received irrevocable undertakings to vote, or
procure a vote, in favour of the Scheme at the Court Meeting and
the resolutions relating to the Acquisition at the Vernalis General
Meeting (or, in the event that the Acquisition is implemented by
way of a Takeover Offer, to accept or procure the acceptance of
such Takeover Offer) from each of the Vernalis Directors who hold
Vernalis Shares in respect of their own shareholdings, amounting
to, in aggregate, 2,447,817 Vernalis Shares representing
approximately 0.464 per cent. of Vernalis' share capital in issue
on 8 August 2018 (being the latest practicable date before the
release of this announcement). The irrevocable undertakings from
the Vernalis Directors remain binding in the event of a competing
offer being made for Vernalis.
Ligand UK has also received irrevocable undertakings to vote, or
procure a vote, in favour of the Scheme at the Court Meeting and
the resolutions relating to the Acquisition at the Vernalis General
Meeting (or, in the event that the Acquisition is implemented by
way of a Takeover Offer, to accept or procure the acceptance of
such Takeover Offer) from each of IAML and Woodford Investment
Management in respect of 194,417,167 and 157,876,138 Vernalis
Shares respectively and representing approximately 36.89 per cent.
and 29.96 per cent. respectively of Vernalis' share capital in
issue on 8 August 2018 (being the latest practicable date before
the release of this announcement).
Ligand UK has therefore received in aggregate irrevocable
undertakings in favour of the Acquisition representing 67.32 per
cent. of the share capital of Vernalis in issue as at 8 August
2018.
Further details of these undertakings are set out in Appendix 3
to this announcement.
8. Information on Vernalis
Vernalis is a revenue generating pharmaceutical company with
significant expertise in drug development. It has eight programmes
in its NCE development pipeline, which are either partnered or
available for partnering, in addition to significant expertise in
fragment and structure based drug discovery which it leverages to
enter into research collaborations with larger pharmaceutical
companies. Vernalis' technologies, capabilities and products have
been endorsed over the last six years by collaborations with
leading pharmaceutical companies, including Asahi Kasei Pharma,
Biogen Idec, Endo, GSK, Genentech, Lundbeck, Menarini, Novartis,
Servier and Tris Pharma, Inc. Vernalis has two approved products:
Moxatag(R) , a once-daily formulation of the antibiotic,
amoxicillin, indicated for the treatment of tonsillitis and/or
pharyngitis secondary to Streptococcus pyogenes in adults and
pediatric patients 12 years and older in the US; and frovatriptan
for the acute treatment of migraine, which it out licenses.
9. Information on the Ligand Group
Ligand UK is a wholly owned subsidiary of Ligand. Ligand is a
biopharmaceutical company focused on developing or acquiring
technologies that help pharmaceutical companies discover and
develop medicines. The Ligand Group's business model creates value
for stockholders by providing a diversified portfolio of biotech
and pharmaceutical product revenue streams that are supported by an
efficient and low corporate cost structure. The Ligand Group's goal
is to offer investors an opportunity to participate in the promise
of the biotech industry in a profitable, diversified and lower-risk
business than a typical biotech company.
The Ligand Group's business model is based on doing what it does
best: drug discovery, early-stage drug development, product
reformulation and partnering. The Ligand Group partners with other
pharmaceutical companies to leverage what they do best (late-stage
development, regulatory management and commercialization) to
ultimately generate revenue. The Ligand Group's Captisol(R)
platform technology is a patent-protected, chemically modified
cyclodextrin with a structure designed to optimize the solubility
and stability of drugs. OmniAb(R) is a patent-protected transgenic
animal platform used in the discovery of fully human mono-and
bispecific therapeutic antibodies. The Ligand Group has established
multiple alliances, licenses and other business relationships with
the world's leading pharmaceutical companies including Novartis,
Amgen, Merck, Pfizer, Celgene, Gilead, Janssen, Baxter
International and Eli Lilly.
10. Management, employees and locations of business
Ligand UK has been impressed by the experience and capabilities
of Vernalis' operational management and employees and attaches
importance to maintaining the current relationships and research
and development capabilities of Vernalis.
Ligand UK believes that the existing operational management and
employees of Vernalis could benefit from enhanced opportunities
from the Acquisition and sees the Acquisition as an opportunity for
the Ligand Group to establish a footprint in Europe. Ligand UK
believes that retaining and incentivising Vernalis employees will
be relevant to maximising the opportunities that the Acquisition
will present.
Following completion of the Acquisition, Ligand UK intends that
Vernalis' facility in Cambridge will become the primary facility of
the Vernalis Group under the leadership of Mike Wood (Vernalis
Research Director). Ligand UK does not intend for the Acquisition
to have a material impact on the existing research and development
activities of either the Ligand Group or the Vernalis Group.
Ligand UK also intends to seek the cancellation of the trading
of Vernalis Shares on AIM on or shortly after the Effective Date,
which would result in cost savings from not having to maintain a
listing of Vernalis and related supporting back office functions.
As a consequence, Vernalis' existing headquarters in Winnersh will
be closed following completion of the Acquisition. It is with
regret that Ligand UK expects all or substantially all of the
management and administrative roles that are based at this site to
become redundant after a period of transition. Ligand UK is
supportive of Vernalis' decision to wind down its US operations and
does not intend to make changes in this regard. Accordingly, for
the avoidance of doubt, Ligand UK intends that the Cambridge
facility will over time become Vernalis' headquarters and sole
place of business. Ligand UK's headquarters will continue to be in
San Diego, USA.
Given the concentrated nature of Vernalis' business, the costs
of the business must be appropriately managed. Ligand UK intends
following the Acquisition to work with the management of Vernalis'
Cambridge facility to review its operations and business, and a
limited number of further headcount reductions across the
development and commercial functions may be deemed necessary.
Ligand UK believes that it is possible that up to 15 Vernalis
employees, across its Winnersh and Cambridge facilities, may be
affected by the above.
Ian Garland and David Mackney will each step down from their
respective roles as CEO and CFO upon completion of the Acquisition.
Consequently, Ligand UK has not entered into, and has not had
discussions on proposals to enter into, any form of incentivisation
arrangements with Ian Garland or David Mackney. Further, upon
completion of the Acquisition, all other directors of Vernalis will
immediately cease to be directors of Vernalis.
Ligand UK currently has no intention to make any other material
changes to the continuing employment of Vernalis Group employees
and management, nor any material changes to their conditions of
employment. Other than as set out above, Ligand UK does not expect
any material change in the balance of skills and functions of
Vernalis employees.
The Ligand Board has confirmed that the existing statutory and
contractual employment rights, including accrued pension rights, of
all Vernalis employees will be fully safeguarded upon and following
completion of the Acquisition. Ligand UK has no intention to make
any reduction to the level of employer contributions into Vernalis'
pension schemes. Vernalis does not maintain any defined benefit
pension schemes and accordingly, Ligand UK has no intentions in
this regard.
Other than as described above, Ligand UK has no intention of
redeploying Vernalis' existing material fixed assets or of
effecting a material change to the strategic plans or operations of
the business.
No plans are in place in respect of any awards for members of
the Vernalis management team other than those set out in paragraph
17 of this announcement.
11. Dividends
No dividend is currently contemplated by Vernalis to be
declared, approved, made or paid from the date of this announcement
and before the Effective Date. If any dividend or other
distribution (including any return of capital) is authorised,
declared, made or paid by Vernalis in respect of a Vernalis Share,
on or after the date of this announcement and before the Effective
Date, Ligand UK reserves the right to reduce the Cash Consideration
by the amount of all or part of any such dividend or
distribution.
If the Acquisition does not become effective by the Long Stop
Date, the Vernalis Directors would not declare a dividend for the
financial year ended 30 June 2018.
12. Current trading
Since the 28 March 2018 publication of its interim financial
results for the six months to 31 December 2017, Vernalis has
substantially completed the closure of its US commercial operations
and remains on track to have completed this by 30 September 2018.
On 14 June 2018, Vernalis announced the termination of its cough
cold deal with Tris and the transfer to Tris of its approved cough
cold product Tuzistra(R)XR. Vernalis' NCE pipeline and
collaboration based research business have continued to perform in
line with expectations. The Vernalis Group's unaudited cash at 30
June 2018 was GBP27.3 million, in line with the market guidance
given at the time of announcing the termination of the Tris cough
cold agreement, and Vernalis continues to have no debt.
13. Financing
The cash consideration payable by Ligand UK to Vernalis
Shareholders under the Acquisition will be financed from the Ligand
Group's existing cash resources.
finnCap, as financial adviser to Ligand UK, is satisfied that
sufficient resources are available to Ligand UK to satisfy, in
full, the cash consideration payable to Vernalis Shareholders under
the terms of the Acquisition.
14. Structure of the Acquisition
14.1 Terms and conditions
The Acquisition is conditional upon, amongst other things, the
approval of the Scheme by the Scheme Shareholders and the sanction
of the Scheme by the Court. Appendix 1 to this announcement sets
out the Conditions and further terms to which the Acquisition will
be subject. The Acquisition does not require the approval of
Ligand's shareholders.
14.2 Scheme of arrangement
It is intended that the Acquisition will be implemented by way
of a Court-sanctioned scheme of arrangement between Vernalis and
the Scheme Shareholders under Part 26 of the Companies Act 2006.
The Scheme is an arrangement between Vernalis and the Scheme
Shareholders. The procedure involves, among other things, an
application by Vernalis to the Court to sanction the Scheme. The
purpose of the Scheme is to enable Ligand UK to become the owner of
the whole of the issued and to be issued share capital of
Vernalis.
Under the Scheme, the Scheme Shares held by Scheme Shareholders
will be transferred to Ligand UK in consideration for which Scheme
Shareholders will receive the Cash Consideration on the basis
described in paragraph 2 above.
The Scheme is subject to the Conditions. To become effective,
the Scheme requires the approval of Scheme Shareholders by the
passing of a resolution at the Court Meeting. The resolution to
approve the Scheme must be approved by a majority in number of the
Scheme Shareholders present and voting (and entitled to vote),
either in person or by proxy, representing not less than 75 per
cent. in value of the Scheme Shares voted by such Scheme
Shareholders. In addition, a special resolution must be passed at
the Vernalis General Meeting to authorise the Vernalis Directors to
give effect to the Scheme and deal with certain ancillary matters,
which requires the approval of Vernalis Shareholders representing
at least 75 per cent. of the votes cast at the Vernalis General
Meeting (either in person or by proxy). The Vernalis General
Meeting will be held immediately after the Court Meeting.
The Vernalis Meetings are to be held no later than the 22nd day
after the expected date of the Vernalis Meetings to be set out in
the Scheme Document in due course (or such later date as may be
agreed between Vernalis and Ligand UK).
Following the Vernalis Meetings, the Scheme must be sanctioned
by the Court (with or without modification but with any such
modification being acceptable to Ligand UK and Vernalis) no later
than the 22nd day after the expected date of the Scheme Court
Hearing to be set out in the Scheme Document in due course (or such
later date as may be agreed between Vernalis and Ligand UK). The
Scheme will only become effective once a copy of the Scheme Court
Order is delivered to the Registrar of Companies.
Upon the Scheme becoming effective, it will be binding on all
Vernalis Shareholders, irrespective of whether or not they attended
or voted at the Vernalis Meetings (and if they attended and voted,
whether or not they voted in favour of the resolutions at such
meetings) and the Cash Consideration will be despatched by Ligand
UK to Scheme Shareholders no later than 14 days after the Effective
Date.
The Scheme shall lapse if the Scheme does not become effective
by the Long Stop Date, provided that the deadline for the Scheme to
become effective may be extended by agreement between Vernalis and
Ligand UK, with the consent of the Court or the Panel, if
required.
The Scheme Document will include full details of the Scheme,
together with notices of the Court Meeting and the Vernalis General
Meeting and the expected timetable, and will specify the action to
be taken by Scheme Shareholders. The Forms of Proxy accompanying
the Scheme Document will also be posted to Scheme Shareholders.
The Scheme will be governed by the laws of England and Wales.
The Scheme will be subject to the applicable requirements of the
Code, the Panel, the London Stock Exchange and the FCA.
14.3 Timetable
The timing of implementation of the Acquisition will be
dependent upon a number of factors including availability of the
Court. However, subject to these factors, it is expected that the
posting of the Scheme Document will occur in September 2018 and
that the Scheme will become effective in October 2018.
14.4 Cancellation of admission to trading and
re-registration
Shortly before the Effective Date, an application will be made
to the London Stock Exchange for admission of the Vernalis Shares
to trading on AIM to be cancelled on the first Business Day
following the Effective Date. The last day of dealings in, and for
registration of transfers of, Vernalis Shares is expected to be at
the close of business on the Business Day before the Effective
Date. No dealings in Vernalis Shares will be registered after this
date.
It is intended that the cancellation of admission of the
Vernalis Shares to trading on AIM will take effect at the opening
of business on the first Business Day following the Effective Date.
In addition, at the opening of business on the first Business Day
following the Effective Date entitlements to Vernalis Shares held
within the CREST system will be cancelled and share certificates in
respect of Scheme Shares will cease to be valid and should, if so
requested by Vernalis, be sent to Vernalis for cancellation.
It is intended that the Vernalis ADS programme will be
terminated as of the Effective Date. It is also intended that as
soon as possible after the Effective Date, Vernalis will be
re-registered as a private limited company under the relevant
provisions of the Companies Act 2006.
14.5 Changes to the Vernalis Board
On completion of the Acquisition, the Vernalis Directors will
resign with immediate effect from their roles as directors of
Vernalis.
15. Opening Position Disclosure and interests in Vernalis Shares
Save in respect of the irrevocable undertakings referred to in
paragraph 7, as at the close of business on 8 August 2018, being
the latest practicable date before the date of this announcement,
neither Ligand UK, nor any of the Ligand Directors, nor, so far as
Ligand UK is aware, any person acting in concert (within the
meaning of the Code) with Ligand UK has:
-- any interest in, or right to subscribe for, any Vernalis
Shares nor does any such person have any short position in Vernalis
Shares, including any short position (whether conditional or
absolute and whether in the money or otherwise), any short position
under a derivative, any agreement to sell, any delivery obligation
or right to require another person to purchase or take delivery of
Vernalis Shares or any dealing arrangement of the kind referred to
in Note 11 of the definition of acting in concert in the Code;
or
-- borrowed or lent any Vernalis Shares or entered into any
financial collateral arrangements relating to Vernalis Shares.
It has not been possible by the date of this announcement to
ascertain the interests in Vernalis Shares (if any) of all of
Ligand UK's concert parties. Further enquiries will be completed
before publication of Ligand UK's Opening Position Disclosure which
will include details of any interests or short positions in, or
rights to subscribe for, any relevant securities of Vernalis held
by all persons acting in concert with Ligand UK.
16. Offer-related arrangements
Confidentiality Agreement
Ligand and Vernalis entered into a confidentiality agreement on
27 April 2018 (the "Confidentiality Agreement") pursuant to which
Ligand has undertaken to keep confidential information relating to
Vernalis and not to disclose it to third parties (other than to
permitted disclosees) unless required by law or regulation.
The Confidentiality Agreement also contains undertakings from
Ligand that for a period of one year from the date of the
Confidentiality Agreement, Ligand shall not, without the prior
written consent of Vernalis and except pursuant to the Acquisition,
acquire or offer to acquire any interest in securities of Vernalis
and that Ligand shall not solicit any employees of Vernalis or
consultants engaged by Vernalis, subject to customary carve-outs.
These confidentiality obligations will cease to have effect on
completion of the Acquisition. If the Acquisition does not
complete, the confidentiality obligations shall remain in force for
a period of 5 years from the date of the Confidentiality
Agreement.
Break Fee Agreement
Vernalis and Ligand UK have entered into the Break Fee Agreement
pursuant to which Vernalis has agreed to pay to Ligand UK a break
fee of an amount in cash equal to one per cent. of the value of any
competing offer which is made for Vernalis, in the event that such
competing offer is declared unconditional in all respects or is
otherwise completed or becomes effective.
Cooperation Agreement
Vernalis and Ligand UK have entered into the Cooperation
Agreement pursuant to which, among other things, they have
agreed:
-- to provide each other with such information as may be
necessary for Vernalis to prepare the Scheme Document;
-- to implement certain proposals with regards to the Vernalis Share Schemes; and
-- to cooperate with each other and to provide such information
as may be necessary to obtain any required regulatory
clearances.
The Cooperation Agreement records the intention of Vernalis and
Ligand UK to implement the Acquisition by way of Scheme, subject to
the ability of Ligand UK to proceed by way of a Takeover Offer in
certain circumstances, subject to the consent of the Panel.
The Cooperation Agreement will terminate in a number of
customary circumstances, including if:
-- the Vernalis Directors withdraw or adversely modify their
recommendation of the Acquisition; or
-- the Scheme Document does not include a unanimous and
unconditional recommendation from the Vernalis Directors that
Vernalis Shareholders vote in favour of the resolutions to be
proposed at the Court Meeting and the Vernalis General Meeting.
17. Vernalis Share Schemes
Participants in the Vernalis Share Schemes will be contacted
separately regarding the effect of the Offer on their rights under
these schemes and appropriate proposals will be made and
communicated directly to such participants in accordance with Rule
15 of the Code as soon as reasonably practicable after the Scheme
Document has been published but before the sanction of the Scheme
by the Court.
18. Documents available on websites
Copies of the following documents will published promptly, and
in any event by no later than 12 noon (London time) on the Business
Day following this announcement on the Ligand Group's website, at
www.investor.ligand.com/vernalisoffer and on Vernalis' website at
www.vernalis.com and will be made available until the end of the
Offer Period:
-- a copy of this announcement;
-- the irrevocable undertakings described in paragraph 7 and set
out in Appendix 3 to this announcement;
-- the Confidentiality Agreement;
-- the Break Fee Agreement;
-- the Cooperation Agreement;
-- the consent letter of finnCap;
-- the consent letter of Evercore; and
-- the consent letter of Canaccord Genuity.
19. General
This announcement does not constitute an offer or an invitation
to purchase or subscribe for any securities.
Your attention is drawn to the further information contained in
the Appendices which form part of, and should be read in
conjunction with, this announcement.
The Acquisition will be subject to the Conditions and further
terms set out in Appendix 1 to this announcement and to the full
terms and conditions which will be set out in the Scheme Document.
Appendix 2 contains the bases and sources of certain information
used in this announcement. Appendix 3 contains details of the
irrevocable undertakings received in relation to the Acquisition
that are referred to in this announcement.
Enquiries
Vernalis plc
Ian Garland, Chief Executive Officer
David Mackney, Chief Financial Officer +44 (0) 118 938 0015
Canaccord Genuity Limited (Nominated Adviser
and Broker)
Henry Fitzgerald-O'Connor
Emma Gabriel +44 (0) 20 7523 8000
Evercore (Financial adviser)
Julian Oakley
Alan Beirne +44 (0) 20 7653 6000
Ligand Pharmaceuticals Incorporated
Matthew Korenberg
Todd Pettingill +1 858 550 7500
finnCap Ltd (Financial adviser to Ligand
UK)
Henrik Persson
Giles Rolls
Max Bullen-Smith +44 (0) 20 7220 0500
MTS Securities, LLC (Financial adviser
to Ligand UK)
Mark Menkowski +1 212 887 2100
Important notices relating to financial advisers
Evercore, which is authorised and regulated by the FCA in the
United Kingdom, is acting solely for Vernalis as financial adviser
in relation to the matters referred to in this announcement and for
no one else. Evercore will not be responsible to anyone other than
Vernalis for providing the protections afforded to its clients or
for providing advice in relation to the contents of this
announcement or any arrangement referred to herein. Neither
Evercore, nor any of its affiliates, owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any
person other than Vernalis in connection with this announcement,
any statement contained herein or otherwise. Evercore has given,
and not withdrawn, its consent to the inclusion in this
announcement of the references to its name and the advice it has
given to Vernalis in the form and context in which they appear.
Canaccord Genuity, which is authorised and regulated by the FCA
in the United Kingdom, is acting solely for Vernalis as Nominated
Adviser and broker and for no one else in relation to the
Acquisition, the content of this announcement and other matters
described in this announcement, and will not be responsible to
anyone other than Vernalis for providing the protections afforded
to the clients of Canaccord Genuity or for providing advice to any
other person in relation to the Acquisition, the content of this
announcement or any other matters described in this announcement.
Neither Canaccord Genuity, nor any of its affiliates, owes or
accepts any duty, liability or responsibility whatsoever (whether
direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person other than Vernalis in connection with
this announcement, any statement contained herein or otherwise.
Canaccord Genuity has given, and not withdrawn, its consent to the
inclusion in this announcement of the references to its name in the
form and context in which they appear.
finnCap, which is authorised and regulated by the FCA in the
United Kingdom, is acting exclusively as financial adviser to
Ligand UK and for no one else in connection with the matters
referred to in this announcement and will not be responsible to
anyone other than Ligand UK for providing the protections afforded
to its clients or for providing advice in relation to the matters
referred to in this announcement. Neither finnCap, nor any of its
affiliates, owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client
of finnCap in connection with this announcement, any statement
contained herein or otherwise. finnCap has given, and not
withdrawn, its consent to the inclusion in this announcement of the
references to its name in the form and context in which they
appear.
MTS is acting exclusively as financial adviser to Ligand UK and
for no one else in connection with the matters referred to in this
announcement and will not be responsible to anyone other than
Ligand UK for providing the protections afforded to its clients or
for providing advice in relation to the matters referred to in this
announcement. MTS is a US registered broker dealer and is not
advising Ligand UK for the purposes of the Code. Neither MTS, nor
any of its affiliates, owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, whether in
contract, in tort, under statute or otherwise) to any person who is
not a client of MTS in connection with this announcement, any
statement contained herein or otherwise.
Further information
This announcement is not intended to, and does not, constitute
or form part of any offer, invitation or the solicitation of an
offer to purchase, otherwise acquire, subscribe for, sell or
otherwise dispose of any securities, or the solicitation of any
vote or approval in any jurisdiction, pursuant to the Acquisition
or otherwise. The Acquisition will be implemented solely pursuant
to the terms of the Scheme Document (or, in the event that the
Acquisition is to be implemented by means of a Takeover Offer, the
Offer Document), which will contain the full terms and conditions
of the Acquisition, including details of how to vote in respect of
the Acquisition. Any response to the Acquisition should be made
only on the basis of information contained in the Scheme Document.
Vernalis Shareholders are advised to read the formal documentation
in relation to the Acquisition carefully once it has been
despatched.
Overseas jurisdictions
The release, publication or distribution of this announcement in
or into jurisdictions other than the United Kingdom may be
restricted by law and therefore any persons who are subject to the
laws of any jurisdiction other than the United Kingdom should
inform themselves about, and observe, any applicable legal or
regulatory requirements. In particular, the ability of persons who
are not resident in the United Kingdom to vote their Vernalis
Shares with respect to the Scheme at the Court Meeting, or to
execute and deliver forms of proxy appointing another person to
vote at the Court Meeting on their behalf, may be affected by the
laws of the relevant jurisdictions in which they are located. 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.
This announcement has been prepared for the purpose of complying
with English law, the rules of the London Stock Exchange, the AIM
Rules 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 of England & Wales.
Unless otherwise determined by Ligand UK or required by the
Code, and permitted by applicable law and regulation, the
Acquisition will not be made available, directly or indirectly, in,
into or from a Restricted Jurisdiction where to do so would violate
the laws in that jurisdiction and no person may vote in favour of
the Acquisition by any such use, means, instrumentality or form
within a Restricted Jurisdiction or any other jurisdiction if to do
so would constitute a violation of the laws of that jurisdiction.
Accordingly, copies of this announcement and any formal
documentation relating to the Acquisition are not being, and must
not be, directly or indirectly, mailed, transmitted or otherwise
forwarded, distributed or sent in or into or from any Restricted
Jurisdiction or any other jurisdiction where to do so would
constitute a violation of the laws of that jurisdiction, and
persons receiving such documents (including custodians, nominees
and trustees) must not mail or otherwise forward, distribute or
send such documents in or into or from any Restricted Jurisdiction.
Doing so may render invalid any related purported vote in respect
of the Acquisition. If the Acquisition is implemented by way of a
Takeover Offer (unless otherwise permitted by applicable law and
regulation), the Takeover Offer may not be made directly or
indirectly, in or into, or by the use of mails or any means or
instrumentality (including, but not limited to, facsimile, e-mail
or other electronic transmission or telephone) of interstate or
foreign commerce of, or of any facility of a national, state or
other securities exchange of any Restricted Jurisdiction and the
Takeover Offer may not be capable of acceptance by any such use,
means, instrumentality or facilities or from within any Restricted
Jurisdiction.
Further details in relation to Vernalis Shareholders in overseas
jurisdictions will be contained in the Scheme Document.
Notice to US holders of Vernalis Shares and Vernalis ADSs
The Acquisition relates to the shares of an English company and
is being made by means of a scheme of arrangement provided for
under English company law. A transaction effected by means of a
scheme of arrangement is not subject to the tender offer rules or
the proxy solicitation rules under the US Exchange Act.
Accordingly, the Acquisition is subject to the disclosure
requirements and practices applicable in the United Kingdom to
schemes of arrangement which differ from the disclosure
requirements of United States tender offer and proxy solicitation
rules. If, in the future, Ligand UK exercises the right to
implement the Acquisition by way of a Takeover Offer and determines
to extend such Takeover Offer into the United States, the
Acquisition will be made pursuant to applicable UK tender offer
rules and securities laws and otherwise in accordance with the
requirements of the Code. Accordingly, any such Takeover Offer will
be subject to disclosure and other procedural requirements,
including with respect to withdrawal rights, offer timetable,
settlement procedures and timing of payments, that are different
from those applicable to tender offers made in accordance with US
procedures and law. Financial information included in this
announcement and the Scheme Document has been or will be prepared
in accordance with accounting standards applicable in the United
Kingdom that may not be comparable to financial information of US
companies or companies whose financial statements are prepared in
accordance with generally accepted accounting principles in the
United States.
It may be difficult for US holders of Vernalis Shares (and
Vernalis ADS Holders) to enforce their rights and any claim arising
out of the US federal securities laws, since Vernalis is located in
a non-US jurisdiction, and some or all of their officers and
directors may be residents of a non-US jurisdiction. US holders of
Vernalis Shares and Vernalis ADS Holders may not be able to sue a
non-US company or its officers or directors in a non-US court for
violations of the US securities laws. Further, it may be difficult
to compel a non-US company and its affiliates to subject themselves
to a US court's judgement.
Neither the SEC nor any securities commission of any state of
the United States has approved the Acquisition, passed upon the
fairness of the Acquisition or passed upon the adequacy or accuracy
of this announcement. Any representation to the contrary is a
criminal offence in the United States.
In accordance with normal UK practice and pursuant to Rule
14e-5(b) of the US Exchange Act, Ligand UK or its nominees or
brokers (acting as agents) may from time to time make certain
purchases of, or arrangements to purchase, Vernalis Shares outside
the United States, other than pursuant to the Acquisition, until
the date on which the Takeover Offer and/or Scheme becomes
effective, lapses or is otherwise withdrawn. These purchases may
occur either in the open market at prevailing prices or in private
transactions at negotiated prices. Any information about such
purchases will be disclosed as required in the UK, will be reported
to the Regulatory News Service of the London Stock Exchange and
will be available on the London Stock Exchange website.
Forward-looking statements
This announcement contains statements about the Ligand Group and
the Vernalis Group which are, or may be deemed to be,
"forward-looking statements" and which are prospective in nature.
All statements other than statements of historical fact included in
this announcement may be forward-looking statements. They are based
on current expectations and projections about future events, and
are therefore subject to risks and uncertainties which could cause
actual results to differ materially from the future results
expressed or implied by the forward-looking statements. Often, but
not always, forward-looking statements can be identified by the use
of forward-looking words such as "plans", "expects", "is expected",
"is subject to", "budget", "scheduled", "estimates", "forecasts",
"predicts", "intends", "anticipates", "believes", "targets",
"aims", "projects", "future-proofing" or words or terms of similar
substance or the negative of such words or terms, as well as
variations of such words and phrases or statements that certain
actions, events or results "may", "could", "should", "would",
"might" or "will" be taken, occur or be achieved. Such statements
are qualified in their entirety by the inherent risks and
uncertainties surrounding future expectations. Forward-looking
statements may include statements relating to the following: (i)
future capital expenditures, expenses, revenues, earnings,
synergies, economic performance, indebtedness, financial condition,
dividend policy, losses and future prospects; (ii) business and
management strategies and the expansion and growth of the Ligand
Group's or the Vernalis Group's operations and potential synergies
resulting from the Acquisition; and (iii) the effects of global
economic conditions and governmental regulation on the Ligand
Group's or the Vernalis Group's business.
Such forward-looking statements involve known and unknown risks
and uncertainties that could significantly affect expected results
and are based on certain key assumptions. Many factors may cause
the actual results, performance or achievements of the Ligand Group
or the Vernalis Group to be materially different from any future
results, performance or achievements expressed or implied by the
forward-looking statements. These factors include changes in the
global, political, economic, business, competitive, market and
regulatory forces, future exchange and interest rates, changes in
tax rates and future business combinations or disposals. For a
discussion of important factors which could cause actual results to
differ from forward-looking statements in relation to the Ligand
Group or the Vernalis Group, refer to the annual report and
accounts of the Ligand Group for the financial year ended 31
December 2017 and of the Vernalis Group for the financial year
ended 30 June 2017, respectively. Each of the Ligand Group and the
Vernalis Group, and each of their respective members, directors,
officers, employees, advisers and persons acting on their behalf,
expressly disclaims any intention or obligation to update or revise
any forward-looking or other statements contained in this
announcement, whether as a result of new information, future events
or otherwise, except as required by applicable law.
No member of the Ligand Group, nor the Vernalis Group, nor any
of their respective associates, directors, officers, employees or
advisers, provides any representation, assurance or guarantee that
the occurrence of the events expressed or implied in any
forward-looking statements in this announcement will actually
occur.
Except as expressly provided in this announcement, no
forward-looking or other statements have been reviewed by the
auditors of the Ligand Group or the Vernalis Group. All subsequent
oral or written forward-looking statements attributable to any
member of the Ligand Group or Vernalis Group, or any of their
respective associates, directors, officers, employees or advisers,
are expressly qualified in their entirety by the cautionary
statement above.
No profit forecast and profit estimate
No statement in this announcement is intended as a profit
forecast or estimate for any period and no statement in this
announcement should be interpreted to mean that earnings or
earnings per share for Vernalis for the current or future financial
years would necessarily match or exceed the historical published
earnings or earnings per share for Vernalis.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1
per cent. or more of any class of relevant securities of an offeree
company or of any securities exchange offeror (being any offeror
other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) of the Code applies must be made by no
later than 3.30 pm (London time) on the 10th Business Day following
the commencement of the Offer Period and, if appropriate, by no
later than 3.30 pm (London time) on the 10th Business Day following
the announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of
(i) the offeree company and (ii) any securities exchange offeror,
save to the extent that these details have previously been
disclosed under Rule 8 of the Code. A Dealing Disclosure by a
person to whom Rule 8.3(b) of the Code applies must be made by no
later than 3.30 pm (London time) on the Business Day following the
date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3 of the Code.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of
the Code).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel.org.uk, including
details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified.
You should contact the Panel's Market Surveillance Unit on +44
(0)20 7638 0129 if you are in any doubt as to whether you are
required to make an Opening Position Disclosure or a Dealing
Disclosure.
Rule 2.9 disclosure
In accordance with Rule 2.9 of the Code, Vernalis announces that
its issued share capital consists of 526,986,000 ordinary shares of
one pence each, all of which are admitted to trading on the London
Stock Exchange's AIM market for listed securities. The ISIN for the
Vernalis Shares is GB00B3Y5L754.
Vernalis has an American Depositary Receipts programme for which
BNY Mellon Shareowner Services acts as depositary. One Vernalis ADS
represents two underlying Vernalis Shares. Vernalis ADSs trade on
the over-the-counter (OTC) market in the US. The trading symbol for
these securities is VNLPY and the CUSIP number is 92431M206.
The total number of shares attracting voting rights in Vernalis
is therefore 526,986,000.
Information relating to Vernalis Shareholders
Please be aware that addresses, electronic addresses and certain
other information provided by Vernalis Shareholders and Vernalis
ADS Holders, persons with information rights and other relevant
persons for the receipt of communications from Vernalis may be
provided to Ligand UK during the Offer Period as required under
Section 4 of Appendix 4 to the Code to comply with Rule 2.11(c) of
the Code.
Publication on website
A copy of this announcement will be available, subject to
certain restrictions relating to persons resident in Restricted
Jurisdictions, for inspection on the Ligand Group's website at
www.investor.ligand.com/vernalisoffer and on Vernalis' website at
www.vernalis.com promptly and in any event by no later than 12 noon
(London time) on the Business Day following the date of this
announcement. For the avoidance of doubt the contents of those
websites are not incorporated into, and do not form part of, this
announcement.
Vernalis Shareholders may request a hard copy of this
announcement, free of charge, by contacting Vernalis on +44 (0) 118
938 0015. Vernalis Shareholders may also request that all future
documents, announcements and information to be sent to them in
relation to the Acquisition should be in hard copy form.
Rounding
Certain figures included in this announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
APPIX 1
Conditions of the Acquisition and certain further terms
Part A: Conditions of the Scheme and the Acquisition
The Acquisition is conditional upon the Scheme becoming
unconditional and effective, subject to the Code, by not later than
the Long Stop Date:
1. The Scheme shall be subject to the following conditions:
(a) its approval by a majority in number of the Vernalis
Shareholders who are on the register of members of Vernalis at the
Voting Record Time and who are present and vote, whether in person
or by proxy, at the Court Meeting (and at any separate class
meeting which may be required by the Court) and who represent 75
per cent. in value of the Vernalis Shares voted by those Vernalis
Shareholders on or before the 22nd day after the expected date of
the Court Meeting to be set out in the Scheme Document (or such
later date, if any, as Ligand UK and Vernalis may agree and the
Court may allow);
(b) the passing of the resolutions to be proposed at the
Vernalis General Meeting by the requisite majority at the Vernalis
General Meeting to be held on or before the 22nd day after the
expected date of the Vernalis General Meeting to be set out in the
Scheme Document (or such later date, if any, as Ligand UK and
Vernalis may agree and the Court may allow);
(c) the sanction of the Scheme by the Court (with or without
modification but subject to any modification being on terms
acceptable to Ligand UK and Vernalis) on or before the 22nd day
after the expected date of the Scheme Court Hearing to be set out
in the Scheme Document (or such later date, if any, as Ligand UK
and Vernalis may agree and the Court may allow); and
(d) delivery of a copy of the Scheme Court Order to the Registrar of Companies.
2. In addition, subject as stated in Part B below and to the
requirements of the Panel, the Acquisition shall be conditional
upon the following Conditions and, accordingly, the Scheme Court
Order shall not be delivered to the Registrar of Companies unless
such Conditions (as amended, if appropriate) have been satisfied
(and continue to be satisfied pending the commencement of the
Scheme Court Hearing) or, where relevant, waived in writing prior
to the Scheme being sanctioned by the Court:
General third party clearances
(a) except as Disclosed, no Third Party having decided,
threatened or given notice of a decision to take, institute,
implement or threaten any action, proceeding, suit, investigation,
enquiry or reference (and in each case, not having withdrawn the
same), or having required any action to be taken or otherwise
having done anything, or having enacted, made or proposed any
statute, regulation, decision, order or change to published
practice (and in each case, not having withdrawn the same) and
there not continuing to be outstanding any statute, regulation,
decision or order which would or might reasonably be expected to
(in any case to an extent or in a manner which is material in the
context of the Acquisition, the Wider Vernalis Group or the Wider
Ligand Group, as the case may be, in each case, taken as a
whole):
(i) require, prevent or materially delay the divestiture or
materially alter the terms envisaged for such divestiture by any
member of the Wider Ligand Group or by any member of the Wider
Vernalis Group of all or any part of their respective businesses,
assets, property or any shares or other securities (or the
equivalent) in any member of the Wider Vernalis Group or any member
of the Wider Ligand Group or impose any limitation on the ability
of all or any of them to conduct their respective businesses (or
any part thereof) or to own, control or manage any of their
respective assets or properties (or any part thereof);
(ii) except pursuant to section 160 of the Companies Act 2006,
in the event that Ligand UK elects to implement the Acquisition by
way of a Takeover Offer, require any member of the Wider Ligand
Group or the Wider Vernalis Group to acquire or offer to acquire
any shares, other securities (or the equivalent) or interest in any
member of the Wider Vernalis Group owned by any Third Party (other
than in connection with the implementation of the Acquisition);
(iii) impose any material limitation on, or result in a material
delay in, the ability of any member of the Wider Ligand Group,
directly or indirectly, to acquire, hold or exercise effectively
all or any rights of ownership in respect of shares or loans or
securities convertible into shares or other securities (or the
equivalent) in Vernalis or on the ability of any member of the
Wider Vernalis Group or any member of the Wider Ligand Group,
directly or indirectly, to hold or exercise effectively all or any
rights of ownership in respect of shares or loans or any other
securities (or the equivalent) in, or to exercise voting or
management control over, any other member of the Wider Vernalis
Group;
(iv) result in any member of the Wider Vernalis Group or any
member of the Wider Ligand Group ceasing to be able to carry on
business under any name under which it currently does so in any
jurisdiction;
(v) make the Acquisition or its implementation void,
unenforceable and/or illegal under the laws of any relevant
jurisdiction, or otherwise, directly or indirectly, prevent or
prohibit, restrict, restrain or delay or otherwise interfere with
the implementation of, or impose additional conditions or
obligations with respect to, or otherwise challenge, impede,
interfere or require material amendment to the terms of the
Acquisition;
(vi) impose any material limitation on, or result in any
material delay in, the ability of any member of the Wider Ligand
Group or any member of the Wider Vernalis Group to conduct,
integrate or co-ordinate all or any part of its business with all
or any part of the business of any other member of the Wider Ligand
Group and/or the Wider Vernalis Group;
(vii) require any member of the Wider Vernalis Group to
terminate or amend in any material way any material contract to
which any member of the Wider Vernalis Group is a party;
(viii) otherwise materially adversely affect all or any of the
business, assets, liabilities, profits, financial or trading
position or prospects of any member of the Wider Vernalis Group or
any member of the Wider Ligand Group; or
and all applicable waiting and other time periods (including any
extensions thereof) during which any such Third Party could
institute, implement or threaten any such action, proceeding, suit,
investigation, enquiry or reference or take any other step under
the laws of any jurisdiction in respect of the Acquisition having
expired, lapsed or been terminated;
Governmental regulatory approvals
(b) each Governmental Entity, which regulates or licences any
member of the Vernalis Group or any other body corporate in which
any member of the Vernalis Group has an interest in shares, and
whose prior approval, consent or non-objection to any change in
control, or acquisition of (or increase in) control in respect of
that or any other member of the Vernalis Group is required, or any
Governmental Entity, whose prior approval, consent or non-objection
of the Acquisition is otherwise required, or from whom one or more
material licences or permissions are required in order to complete
the Acquisition, having given its approval, non-objection or
legitimate deemed consent or consent in writing thereto and, as the
case may be, having granted such licences and permissions (in each
case where required and on terms reasonably satisfactory to Ligand
UK), and in each case the impact of which would materially
adversely affect the Wider Vernalis Group or the Wider Ligand
Group, taken as a whole;
Notifications, waiting periods and authorisations
(c) all notifications, filings or applications which are
necessary or considered appropriate or desirable by Ligand UK
having been made in connection with the Acquisition and all
necessary waiting and other time periods (including any extensions
thereof) under any applicable legislation or regulation of any
jurisdiction having expired, lapsed or been terminated (as
appropriate) and all statutory and regulatory obligations in any
jurisdiction having been complied with, in each case, in respect of
the Scheme and the Acquisition and all Authorisations deemed
reasonably necessary by Ligand UK in any jurisdiction for or in
respect of the Acquisition having been obtained in terms and in a
form reasonably satisfactory to Ligand UK from all appropriate
Third Parties or (without prejudice to the generality of the
foregoing) from any person or bodies with whom any member of the
Wider Vernalis Group or the Wider Ligand Group has entered into
contractual arrangements and all such Authorisations reasonably
necessary to carry on the business of any member of the Wider
Vernalis Group in any jurisdiction having been obtained and all
such Authorisations remaining in full force and effect at the time
at which the Acquisition becomes otherwise wholly unconditional and
there being no notice of an intention to revoke or not to renew
such Authorisations;
Vernalis Shareholder resolution
(d) except with the consent or the agreement of Ligand UK, no
resolution of Vernalis Shareholders in relation to any acquisition
or disposal of assets or shares (or the equivalent thereof) in any
undertaking or undertakings (or in relation to any merger,
demerger, consolidation, reconstruction, amalgamation or scheme)
being passed at a meeting of Vernalis Shareholders other than in
relation to the Acquisition or the Scheme and, other than with the
consent or the agreement of Ligand UK, no member of the Wider
Vernalis Group having taken (or agreed or proposed to take) any
action that requires, or would require, the consent of the Takeover
Panel or the approval of Vernalis Shareholders in accordance with,
or as contemplated by, Rule 21.1 of the Code;
Certain matters arising as a result of any arrangement,
agreement, etc.
(e) except as Disclosed, there being no provision of any
arrangement, agreement, lease, licence, franchise, permit or other
instrument to which any member of the Wider Vernalis 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, or any event or circumstance
which, as a consequence of the Acquisition would or might
reasonably be expected to result in (in each case to an extent or
in a manner which is material in the context of the Wider Vernalis
Group taken as a whole):
(i) any monies borrowed by, or any other indebtedness or
liabilities, actual or contingent, of, or any grant available to,
any such member being or becoming repayable, or capable of being
declared repayable, immediately or prior to its or their stated
maturity date or repayment date, or the ability of any such member
to borrow monies or incur any indebtedness being withdrawn or
inhibited or being capable of becoming or being withdrawn or
inhibited;
(ii) the creation, save in the ordinary and usual course of
business, or enforcement of any mortgage, charge or other security
interest over the whole or any part of the business, property or
assets of such member or any such mortgage, charge or other
security interest (whenever created, arising or having arisen)
becoming enforceable;
(iii) any such arrangement, agreement, lease, licence,
franchise, permit or other instrument or the rights, liabilities,
obligations or interests of any such member in or with any other
person (or any arrangement or arrangements relating to any such
interests or business) being adversely modified or adversely
affected or any obligation or liability arising or any adverse
action being taken or arising thereunder;
(iv) the rights, liabilities, obligations, interests or business
of any such member or any member of the Wider Vernalis Group under
any such arrangement, agreement, licence, permit, lease or
instrument or the interests or business of any such member or any
member of the Wider Vernalis Group in or with any other person or
body or firm or company (or any arrangement relating to any such
interests or business) being terminated, or adversely modified or
adversely affected or any onerous obligation or liability arising
or any adverse action being taken thereunder;
(v) any such member ceasing to be able to carry on business
under any name under which it presently carries on business;
(vi) the financial or trading position or prospects of, any such
member being prejudiced or adversely affected;
(vii) any liability of any such member to make any severance,
termination, bonus or other payment to any of its directors or
other officers; or
(viii) the creation or acceleration of any liability (actual or
contingent) by any such member other than trade creditors or other
liabilities incurred in the ordinary course of business,
and no event having occurred which, under any provision of any
arrangement, agreement, licence, permit, franchise, lease or other
instrument to which any member of the Wider Vernalis Group is a
party or by or to which any such member or any of its assets are
bound, entitled or subject, would or might reasonably be expected
to result in any of the events or circumstances as are referred to
in Conditions (e)(i) to (viii) above;
Certain events occurring since 31 December 2017
(f) except as Disclosed, no member of the Wider Vernalis Group
having since 31 December 2017:
(i) issued or agreed to issue or authorised or proposed or
announced its intention to authorise or propose the issue, of
additional shares of any class, or securities or securities
convertible into, or exchangeable for, or rights, warrants or
options to subscribe for or acquire, any such shares, securities or
convertible securities or transferred or sold or agreed to transfer
or sell or authorised or proposed the transfer or sale of Vernalis
Shares out of treasury (except, where relevant, as between Vernalis
and wholly-owned subsidiaries of Vernalis or between the
wholly-owned subsidiaries of Vernalis and except for the issue of
or transfer out of treasury of Vernalis Shares on the exercise of
employee share options or vesting of employee share awards in the
ordinary course under the Vernalis Share Schemes);
(ii) recommended, declared, paid or made or proposed to
recommend, declare, pay or make any dividend or other distribution
(whether payable in cash or otherwise) other than dividends (or
other distributions whether payable in cash or otherwise) lawfully
paid or made by any wholly-owned subsidiary of Vernalis to Vernalis
or any of its wholly-owned subsidiaries;
(iii) other than pursuant to the Acquisition (and except for
transactions between Vernalis and its wholly-owned subsidiaries or
between the wholly-owned subsidiaries of Vernalis and transactions
in the ordinary course of business) implemented, effected,
authorised or proposed or announced its intention to implement,
effect, authorise or propose any merger, demerger, reconstruction,
amalgamation, scheme, commitment or acquisition or disposal of
assets or shares or loan capital (or the equivalent thereof) in any
undertaking or undertakings in any such case to an extent which is
material in the context of the Wider Vernalis Group taken as a
whole or in the context of the Acquisition;
(iv) except for transactions between Vernalis and its
wholly-owned subsidiaries or between the wholly-owned subsidiaries
of Vernalis and transactions in the ordinary course of business,
disposed of, or transferred, mortgaged or created any security
interest over any material asset or any right, title or interest in
any material asset or authorised, proposed or announced any
intention to do so;
(v) except for transactions between Vernalis and its
wholly-owned subsidiaries or between the wholly-owned subsidiaries
of Vernalis issued, authorised or proposed or announced an
intention to authorise or propose, the issue of or made any change
in or to the terms of any debentures or become subject to any
contingent liability or incurred or increased any indebtedness
which in any such case is material in the context of the Wider
Vernalis Group taken as a whole or in the context of the
Acquisition;
(vi) entered into or varied or authorised, proposed or announced
its intention to enter into or vary any material contract,
arrangement, agreement, transaction or commitment (whether in
respect of capital expenditure or otherwise) except in the ordinary
course of business which is of a long term, unusual or onerous
nature or magnitude or which is or which involves an obligation of
such a nature or magnitude;
(vii) entered into or varied the terms of, or made any offer
(which remains open for acceptance) to enter into or vary to a
material extent the terms of any contract, service agreement,
commitment or arrangement with any director or senior executive of
any member of the Wider Vernalis Group, otherwise than in the
ordinary course of business;
(viii) proposed, agreed to provide or modified the terms of any
share option scheme, incentive scheme or other benefit relating to
the employment or termination of employment of any employee of the
Wider Vernalis Group, otherwise than in the ordinary course of
business;
(ix) purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities
or reduced or made any other change to any part of its share
capital (except, in each case, where relevant, as between Vernalis
and wholly-owned subsidiaries of Vernalis or between the
wholly-owned subsidiaries of Vernalis and except for the issue or
transfer out of treasury of Vernalis Shares on the exercise of
employee share options or vesting of employee share awards under
the Vernalis Share Schemes as Disclosed);
(x) waived, compromised or settled any claim which is material
in the context of the Wider Vernalis Group as a whole or in the
context of the Acquisition;
(xi) terminated or varied the terms of any agreement or
arrangement between any member of the Wider Vernalis Group and any
other person in a manner which would or might have a material
adverse effect on the financial position of the Wider Vernalis
Group taken as a whole;
(xii) save as required in connection with the Acquisition, made
any material alteration to its memorandum, articles of association
or other incorporation documents or any material alteration to the
memorandum, articles of association or other incorporation
documents of any other member of the Wider Vernalis Group;
(xiii) made or agreed or consented to any material change to:
(A) the terms of the trust deeds and rules constituting the
pension scheme(s) established by any member of the Wider Vernalis
Group for its directors, employees or their dependents;
(B) the contributions payable to any such scheme(s) or to the
benefits which accrue, or to the pensions which are payable,
thereunder;
(C) the basis on which qualification for, or accrual or
entitlement to, such benefits or pensions are calculated or
determined; or
(D) the basis upon which the liabilities (including pensions) of
such pension schemes are funded, valued, made, agreed or consented
to,
to an extent which is in any such case material in the context
of the Wider Vernalis Group taken as a whole or in the context of
the Acquisition;
(xiv) been unable, or admitted in writing that it is unable, to
pay its debts or commenced negotiations with one or more of its
creditors with a view to rescheduling or restructuring any of its
indebtedness, 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
which is material in the context of the Wider Vernalis Group taken
as a whole;
(xv) (other than in respect of a member of the Wider Vernalis
Group which is dormant and was solvent at the relevant time) taken
or proposed any steps, corporate action or had any legal
proceedings instituted or threatened against it in relation to the
suspension of payments, a moratorium of any indebtedness, its
winding-up (voluntary or otherwise), dissolution, reorganisation or
for the appointment of a receiver, administrator, manager,
administrative receiver, trustee or similar officer of all or any
material part of its assets or revenues or any analogous or
equivalent steps or proceedings in any jurisdiction or appointed
any analogous person in any jurisdiction or had any such person
appointed;
(xvi) (except for transactions between Vernalis and its
wholly-owned subsidiaries or between the wholly-owned subsidiaries)
made, authorised, proposed or announced an intention to propose any
change in its loan capital;
(xvii) entered into, implemented or authorised the entry into,
any joint venture, asset or profit sharing arrangement, partnership
or merger of business or corporate entities, which in any such case
is material in the context of the Wider Vernalis Group as a whole
or in the context of the Acquisition; or
(xviii) entered into any agreement, arrangement, commitment or
contract or passed any resolution or made any offer (which remains
open for acceptance) with respect to or announced an intention to,
or to propose to, effect any of the transactions, matters or events
referred to in this Condition (f);
No adverse change, litigation, regulatory enquiry or similar
(g) except as Disclosed, since 31 December 2017 there having been:
(i) no adverse change and no circumstance having arisen which
would reasonably be expected to result in any adverse change in,
the business, assets, liabilities, shareholders' equity, financial
or trading position or profits, operational performance or
prospects of any member of the Wider Vernalis Group which is
material in the context of the Wider Vernalis Group taken as a
whole or in the context of the Acquisition;
(ii) no litigation, arbitration proceedings, prosecution or
other legal proceedings to which any member of the Wider Vernalis
Group is or may become a party (whether as a claimant, defendant or
otherwise) having been threatened, announced, implemented or
instituted by or against or remaining outstanding against or in
respect of, any member of the Wider Vernalis Group, in each case
which would reasonably be expected to have a material adverse
effect on the Wider Vernalis Group taken as a whole or in the
context of the Acquisition;
(iii) no enquiry, review or investigation by, or complaint or
reference to, any Third Party against or in respect of any member
of the Wider Vernalis Group (or any person in respect of which any
such member has or may have responsibility or liability) having
been threatened, announced, implemented or instituted or remaining
outstanding by, against or in respect of any member of the Wider
Vernalis Group, in each case, which would reasonably be expected to
have a material adverse effect on the Wider Vernalis Group taken as
a whole or in the context of the Acquisition;
(iv) no contingent or other liability having arisen or become
apparent to Ligand UK or increased other than in the ordinary
course of business which is reasonably likely to affect adversely
the business, assets, financial or trading position or profits of
any member of the Wider Vernalis Group to an extent which is
material in the context of the Wider Vernalis Group taken as a
whole or in the context of the Acquisition; and
(v) no steps having been taken and no omissions having been made
which are likely to result in the withdrawal, cancellation,
termination or modification of any licence held by any member of
the Wider Vernalis Group which is necessary for the proper carrying
on of its business and the withdrawal, cancellation, termination or
modification of which is material and has had or would reasonably
be expected to have a material adverse effect on the Wider Vernalis
Group taken as a whole or in the context of the Acquisition;
No discovery of certain matters regarding information and
liabilities, corruption and intellectual property
(h) except as Disclosed, Ligand UK not having discovered that:
(i) any financial, business or other information concerning the
Wider Vernalis Group announced publicly and delivered by or on
behalf of Vernalis through a RIS prior to the date of this
Announcement or publicly disclosed to any member of the Wider
Ligand Group by or on behalf of any member of the Wider Vernalis
Group prior to the date of this Announcement is misleading,
contains a misrepresentation of any fact, or omits to state a fact
necessary to make that information not misleading, in any such case
which is material in the context of the Wider Vernalis Group taken
as a whole or in the context of the Acquisition;
(ii) any member of the Wider Vernalis Group, otherwise than in
the ordinary course of business, is subject to any liability,
contingent or otherwise, and which is material in the context of
the Wider Vernalis Group taken as a whole or in the context of the
Acquisition;
(iii) any past or present member, director, officer or employee
of the Wider Vernalis Group has not complied with the OECD
Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions and any laws implementing the
same, the UK Bribery Act 2010 and/or the US Foreign Corrupt
Practices Act of 1977;
(iv) any past or present member, director, officer or employee
of the Wider Vernalis Group, or any other person for whom any such
person may be liable or responsible, has engaged in any business
with or made any investment in, or made any payments to: (A) any
government, entity or individual with which US or EU persons are
prohibited from engaging in activities or doing business by US or
EU laws or regulations, including the economic sanctions
administered by the United States Office of Foreign Assets Control,
or (B) any government, entity or individual targeted by any of the
economic sanctions of the United Nations or the European Union or
any of their respective member states;
(v) any material asset of any member of the Wider Vernalis Group
constitutes criminal property as defined by section 340(3) of the
Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that
definition); or
(vi) since 31 December 2017, no circumstance having arisen or
event having occurred in relation to any intellectual property
owned, used or licensed by the Wider Vernalis Group or to any third
parties, including: (A) any member of the Wider Vernalis Group
losing its title to any intellectual property or any intellectual
property owned by the Wider Vernalis Group being revoked, cancelled
or declared invalid, (B) any agreement regarding the use of any
intellectual property licensed to or by any member of the Wider
Vernalis Group being terminated or varied, or (C) any claim being
filed suggesting that any member of the Wider Vernalis Group
infringed the intellectual property rights of a third party or any
member of the Wider Vernalis Group being found to have infringed
the intellectual property rights of a third party, in each case
which is material in the context of the Wider Vernalis Group taken
as a whole or in the context of the Acquisition.
Part B: Certain further terms of the Acquisition
1. Subject to the requirements of the Panel, Ligand UK reserves
the right in its sole discretion to waive (if capable of waiver) in
whole or part all or any of the above Conditions 2(a) (General
third party clearances) to (h) (No discovery of certain matters
regarding information and liabilities, corruption and intellectual
property) of Part A (inclusive).
2. Conditions 2(a) (General third party clearances) to (h) (No
discovery of certain matters regarding information and liabilities,
corruption and intellectual property) of Part A (inclusive) must be
fulfilled or waived by no later than 11:59 p.m. on the date
immediately preceding the date of the Scheme Court Hearing, failing
which the Scheme will lapse or, if the Acquisition is implemented
by way of a Takeover Offer, no later than as permitted by the
Panel. Ligand UK shall be under no obligation to waive or treat as
fulfilled any of the Conditions which are capable of being waived
by a date earlier than the latest date specified above for the
fulfilment or waiver thereof, notwithstanding that any such
Condition or other Conditions of the Scheme and 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.
3. Under Rule 13.5 of the Code, Ligand UK may not invoke a
Condition so as to cause the Scheme not to proceed, or to lapse, or
so as to cause any Takeover Offer to lapse or be withdrawn, unless
the circumstances which give rise to the right to invoke the
Condition are of material significance to Ligand UK in the context
of the Acquisition. Condition 1 of Part A (and, if applicable, any
acceptance condition adopted on the basis specified in paragraph 5
below in relation to any Takeover Offer) are not subject to this
provision of the Code.
4. If Ligand UK is required by the Panel to make an offer for
Vernalis Shares under the provisions of Rule 9 of the Code, Ligand
UK may make such alterations to the Conditions and certain further
terms of the Acquisition as are necessary to comply with the
provisions of that Rule.
5. Ligand UK reserves the right to elect (with the consent of
the Panel) to implement the Acquisition by making, directly or
indirectly through a subsidiary or nominee of Ligand UK, a Takeover
Offer as an alternative to the Scheme. In such event, the Takeover
Offer will be implemented on the same terms or, if Ligand UK so
decides, on such other terms being no less favourable, subject to
appropriate amendments, as far as applicable, as those which would
apply to the Scheme. The acceptance condition would be set at 90
per cent. of the shares to which such Takeover Offer relates (or
such lesser percentage, being more than 50 per cent., as Ligand UK
may decide with the consent of the Panel). Further, if sufficient
acceptances of the Takeover Offer are received and/or sufficient
Vernalis Shares are otherwise acquired, it is the intention of
Ligand UK to apply the provisions of the Companies Act 2006 to
compulsorily acquire any outstanding Vernalis Shares to which such
Takeover Offer relates.
6. The Acquisition will lapse (unless otherwise agreed with the Panel) if:
(i) in so far as the Acquisition or any matter arising from or
relating to the Scheme or Acquisition constitutes a concentration
with a Community dimension within the scope of the Regulation, the
European Commission either initiates proceedings under Article
6(1)(c) of the Regulation or makes a referral to a competent
authority of the United Kingdom under Article 9(1) of the
Regulation and there is then a reference of the Acquisition or
matter arising from or relating to it to the chair of the CMA for
the constitution of a group under schedule 4 to the Enterprise and
Regulatory Reform Act 2013; or
(ii) in so far as the Acquisition or any matter arising from the
Scheme or Acquisition does not constitute a concentration with a
Community dimension within the scope of the Regulation, the Scheme
or Acquisition or any matter arising from or relating to the
Acquisition becomes subject to a reference of the Acquisition or
matter arising from or relating to it to the chair of the CMA for
the constitution of a group under schedule 4 to the Enterprise and
Regulatory Reform Act 2013;
in each case, before the date of the Court Meeting.
7. Ligand UK reserves the right for any other entity directly or
indirectly owned by Ligand from time to time to implement the
Acquisition.
8. The Vernalis Shares shall be acquired by Ligand UK fully paid
and free from all liens, equitable interests, charges,
encumbrances, rights of pre-emption and any other third party
rights and interests whatsoever and together with all rights
existing at the Effective Date or thereafter attaching thereto,
including (without limitation) the right to receive and retain, in
full, all dividends and other distributions (if any) declared, made
or paid or any other return of capital (whether by way of reduction
of share capital or share premium account or otherwise) made on or
after the Effective Date in respect of the Vernalis Shares.
9. The availability of the Acquisition to persons not resident
in the United Kingdom may be affected by the laws of relevant
jurisdictions. Therefore any persons who are subject to the laws of
any jurisdiction other than the United Kingdom and any Vernalis
Shareholders who are not resident in the United Kingdom will need
to inform themselves about and observe any applicable
requirements.
10. Unless otherwise determined by Ligand UK or required by the
Code and permitted by applicable law and regulations, the
Acquisition is not being, and will not be, made, directly or
indirectly, in, into or by the use of the mails of, or by any other
means or instrumentality (including, but not limited to, facsimile,
email or other electronic transmission, telex or telephone) of
interstate or foreign commerce of, or of any facility of a
national, state or other securities exchange of, any Restricted
Jurisdiction and will not be capable of acceptance by any such use,
means, instrumentality or facility or from or within any Restricted
Jurisdiction.
11. Each of the Conditions shall be regarded as a separate
Condition and shall not be limited by reference to any other
Condition.
This Announcement and any rights or liabilities arising
hereunder, the Acquisition, the Scheme and the Forms of Proxy will
be governed by English law and will be subject to the jurisdiction
of the English courts. The Acquisition shall be subject to the
applicable requirements of the Code, the Panel, the AIM Rules, the
London Stock Exchange and the FCA.
APPIX 2
Sources of information and bases of calculation
In this Announcement:
(i) Unless otherwise stated, all prices for Vernalis Shares are
the Closing Price for the relevant date.
(ii) The Closing Prices of Vernalis Shares are taken from the
AIM appendix to the Daily Official List.
(iii) The 30 day and three month volume weighted average price
are derived from Bloomberg data.
(iv) As at 8 August 2018 (being the latest practicable date
prior to the publication of this announcement), Vernalis' fully
diluted share capital comprises 526,986,000 Vernalis Shares in
issue and 10,993,442 Vernalis Shares that may be issued on or after
the date of this announcement on the exercise of outstanding
options or awards under the Vernalis Share Schemes. For the
purposes of this announcement, all outstanding options or awards
under the Vernalis Share Schemes are assumed to (i) be cash settled
(if vested); or (ii) lapse (in the case of unvested options held by
US employees who will leave employment on 30 September 2018) or
(iii) rolled over into new shares in Ligand (if unvested).
Consequently, all references to Vernalis' share capital in this
announcement refers to the existing 526,986,000 Vernalis Shares in
issue with no dilutive effect of options.
APPIX 3
Details of irrevocable undertakings
Ligand UK has received irrevocable undertakings to vote, or
procure a vote, in favour of the Scheme at the Court Meeting and
the resolutions relating to the Acquisition at the Vernalis General
Meeting (or, in the event that the Acquisition is implemented by
way of a Takeover Offer, to accept or procure the acceptance of
such Takeover Offer) in respect of a total of 354,741,122 Vernalis
Shares (representing, in aggregate, approximately 67.32 per cent.
of Vernalis' Shares in issue on 8 August 2018 (being the last
practicable day prior to this Announcement)), comprised as
follows:
Vernalis Directors' irrevocable undertakings
Per cent. of Vernalis
Number of Vernalis Shares
Name Shares in issue
---------------- ------------------- ----------------------
Ian Garland 1,141,167 0.217%
David Mackney 533,600 0.101%
Peter Fellner 270,000 0.051%
Carol Ferguson 156,212 0.030%
Nigel Sheail 346,838 0.066%
Total 2,447,817 0.464%
The irrevocable undertakings from the Vernalis Directors will
only cease to be binding if:
i. the Scheme Document is not dispatched within 28 days of this
Announcement (or within such longer period as Ligand UK and
Vernalis may agree with the consent of the Panel);
ii. the Scheme or a Takeover Offer announced in implementation
of the Acquisition has not become effective or been declared
unconditional in all respects in accordance with the requirements
of the Code (as the case may be) prior to the Long Stop Date;
iii. the Scheme or a Takeover Offer (as the case may be) has
lapsed or been withdrawn and no new, revised or replacement Scheme
or Takeover Offer has been announced by Ligand UK or its affiliates
in accordance with Rule 2.7 of the Code at the same time; or
iv. a competing offer is made for Vernalis and such competing
offer is declared unconditional in all respects or otherwise
becomes effective.
Other Vernalis Shareholders' irrevocable undertakings
Per cent. of Vernalis
Number of Vernalis Shares
Name Shares in issue
--------------------- ------------------- ----------------------
IAML 194,417,167 36.89%
Woodford Investment
Management 157,876,138 29.96%
Total 352,293,305 66.85%
IAML irrevocable undertaking
The irrevocable undertaking from IAML will only cease to be
binding if:
i. the Scheme Document is not dispatched within 28 days of this
Announcement (or within such longer period as Ligand UK and
Vernalis may agree with the consent of the Panel);
ii. the Scheme or a Takeover Offer announced in implementation
of the Acquisition has not become effective or been declared
unconditional in all respects in accordance with the requirements
of the Code (as the case may be) prior to the Long Stop Date;
iii. the Scheme or a Takeover Offer (as the case may be) has
lapsed or been withdrawn and no new, revised or replacement Scheme
or Takeover Offer has been announced by Ligand UK or its affiliates
in accordance with Rule 2.7 of the Code at the same time; or
iv. a competing all cash offer is made for Vernalis at a 20 per
cent. premium to the price per Vernalis Share being offered at that
time by Ligand UK and Ligand UK does not increase its offer price
to an equivalent amount within seven days of the date on which the
competing all cash offer is announced.
Woodford Investment Management irrevocable undertaking
The irrevocable undertaking from Woodford Investment Management
will only cease to be binding if:
i. the Scheme Document is not dispatched within 28 days of this
Announcement (or within such longer period as Ligand UK and
Vernalis may agree with the consent of the Panel);
ii. the Scheme or a Takeover Offer announced in implementation
of the Acquisition has not become effective or been declared
unconditional in all respects in accordance with the requirements
of the Code (as the case may be) prior to the Long Stop Date;
iii. the Scheme or a Takeover Offer (as the case may be) has
lapsed or been withdrawn and no new, revised or replacement Scheme
or Takeover Offer has been announced by Ligand UK or its affiliates
in accordance with Rule 2.7 of the Code at the same time; or
iv. a competing all cash offer is made for Vernalis at a 10 per
cent. premium to the price per Vernalis Share being offered at that
time by Ligand UK and Ligand UK does not increase its offer price
to an equivalent amount within seven days of the date on which the
competing all cash offer is announced.
Woodford Investment Management is able to sell some or all of
the Vernalis Shares subject to its irrevocable undertaking in
certain limited circumstances including:
i. if required by law;
ii. to Ligand UK; or
iii. to any person who has entered into a similar irrevocable
undertaking in favour of Ligand UK to vote, or procure a vote, in
favour of the Scheme at the Court Meeting and the resolutions
relating to the Acquisition at the Vernalis General Meeting (or, in
the event that the Acquisition is implemented by way of a Takeover
Offer, to accept or procure the acceptance of such Takeover
Offer).
APPIX 4
Definitions
The following definitions apply throughout this announcement,
unless the context otherwise requires:
Acquisition the proposed acquisition by Ligand UK
of the entire issued and to be issued
share capital of Vernalis, to be effected
by the Scheme as described in this announcement
(or by a Takeover Offer under certain
circumstances described in this announcement)
ADS American Depositary Share
AIM the AIM market of the London Stock Exchange
AIM Rules the AIM rules for companies published
by the London Stock Exchange
Authorisations authorisations, orders, recognitions,
grants, consents, clearances, confirmations,
certificates, licences, permissions,
determinations, exemptions or approvals
Board as the context requires, the board of
directors of Ligand UK or the board of
directors of Vernalis and the terms Ligand
Board and Vernalis Board shall be construed
accordingly
Break Fee Agreement the break fee agreement entered into
between Ligand UK and Vernalis dated
9 August 2018 relating to the Acquisition
Business Day a day on which banks are generally open
for business in London (apart from Saturdays,
Sundays and bank holidays)
Canaccord Genuity Canaccord Genuity Limited of 88 Wood
Street, London, EC2V 7QR
Cash Consideration the consideration payable to Scheme Shareholders
in connection with the Acquisition, being
6.2 pence per Vernalis Share
Closing Price the closing middle market quotation of
a Vernalis Share derived from the AIM
appendix to the Daily Official List
CMA the UK Competition and Markets Authority
Code the UK City Code on Takeovers and Mergers
Companies Act 2006 the UK Companies Act 2006, as amended
from time to time
Conditions the conditions to the Acquisition as
set out in Part 1 of Appendix 1 and to
be set out in the Scheme Document
Confidentiality Agreement the confidentiality agreement dated 27
April 2018 entered into between Vernalis
and Ligand
Cooperation Agreement the cooperation agreement entered into
between Ligand UK and Vernalis dated
9 August 2018 relating to the Acquisition
Court the High Court of Justice in England
and Wales
Court Meeting the meeting(s) of the Scheme Shareholders
to be convened by order of the Court
pursuant to section 896 of the Companies
Act 2006, notice of which will be set
out in the Scheme Document, for the purpose
of considering, and if thought fit, approving
the Scheme (with or without amendment)
and any adjournment, postponement or
reconvention of such meeting
CREST the relevant system (as defined in the
Uncertificated Securities Regulations
2001 (SI 2001/3755) (the Regulations))
in respect of which Euroclear UK and
Ireland Limited is the Operator (as defined
in the Regulations) in accordance with
which securities may be held and transferred
in uncertificated form
CUSIP the nine-character identification number
assigned by the Committee on Uniform
Securities Identification Procedures
to each class of security approved for
trading in the US to facilitate clearing
and settlement
Daily Official List the daily official list of the London
Dealing Disclosure Stock Exchange
has the same meaning as in Rule 8 of
the Code
Deposit Agreement the deposit agreement among Bank of New
York, as depositary, Vernalis and the
owners and beneficial owners of Vernalis
ADSs from time to time under which the
Vernalis ADSs are issued
Disclosed information which has been fairly disclosed
by or on behalf of Vernalis:
* in the annual report and accounts of the Vernalis
Group for the financial year ended 30 June 2017;
* in Vernalis' announcement dated 28 March 2018 of its
half year results;
* in this announcement;
* in any other public announcement made by, or on
behalf of, Vernalis in accordance with the Market
Abuse Regulation, the AIM Rules or the Disclosure
Guidance and Transparency Rules before the date of
this announcement;
* in writing before the date of this announcement by or
on behalf of Vernalis to Ligand (or its respective
officers, employees, agents or advisers in their
capacity as such); or
* in the virtual data room operated by or on behalf of
Vernalis and which Ligand is able to access in
relation to the Acquisition before the date of this
announcement
Disclosure Guidance the Disclosure Guidance and Transparency
and Transparency Rules Rules of the FCA in its capacity as the
UK Listing Authority under FSMA and contained
in the UK Listing Authority's publication
of the same name (as amended from time
to time)
Effective Date
* the date on which the Scheme becomes effective in
accordance with its terms; or
* if the Acquisition is implemented by way of a
Takeover Offer, the date on which the Takeover Offer
has been declared or become unconditional in all
respects in accordance with the Code or the date on
which a Vernalis Shareholder validly accepts the
Takeover Offer, whichever is later
EU or European Union the European Union
EUMR the EU Merger Regulation (No 139/2004)
Evercore Evercore Partners International LLP
FCA the United Kingdom Financial Conduct
Authority
finnCap finnCap Ltd
Forms of Proxy either or both (as the context demands)
of the form of proxy in relation to the
Court Meeting and the form of proxy in
relation to the Vernalis General Meeting
FSMA Financial Services and Markets Act 2000
(as amended from time to time)
Governmental Entity any supranational, national, state, municipal,
IAML local or foreign government, any instrumentality,
subdivision, court, arbitrator or arbitrator
panel, regulatory or administrative agency
or commission, or other authority thereof,
or any regulatory or quasi-regulatory
organisation or private body exercising
any regulatory, taxing, importing or
other governmental or quasi-governmental
authority
Invesco Asset Management Limited, a wholly-owned
subsidiary of Invesco acting as agent
for and on behalf of its discretionary
managed clients
IFRS international accounting standards and
international financial reporting standards
and interpretations thereof, approved
or published by the International Accounting
Standards Board and adopted by the European
Union
ISIN International Securities Identification
Number
London Stock Exchange London Stock Exchange plc
Long Stop Date 31 December 2018, or such later date
(if any) as Ligand UK and Vernalis may
agree, with the consent of the Panel,
and the Court may allow
Ligand UK Ligand Holdings UK Ltd., a company incorporated
in England and Wales
Ligand Directors the directors of Ligand UK as at the
date of this announcement or, where the
context so requires, the directors of
Ligand UK from time to time
Ligand Group Ligand and its subsidiaries and subsidiary
undertakings from time to time
Ligand Ligand Pharmaceuticals Incorporated,
a company incorporated in Delaware
Market Abuse Regulation the Market Abuse Regulation (2014/596/EU)
MTS MTS Securities, LLC which is an affiliate
of MTS Health Partners L.P.
NCE new chemical entity
Nominated Adviser nominated adviser, as such term is defined
in the AIM Rules
Offer Document should the Acquisition be implemented
by means of a Takeover Offer, the document
to be sent to Vernalis Shareholders and
made available to Vernalis ADS Holders
containing the full terms and conditions
of such Takeover Offer
Offer Period the offer period (as defined in the Code)
relating to Vernalis, which commenced
on 15 March 2018
Opening Position Disclosure an announcement containing details of
interests or short positions in, or rights
to subscribe for, any relevant securities
of a party to the Offer if the person
concerned has such a position
Panel the UK Panel on Takeovers and Mergers
Remco the Remuneration Committee of Vernalis
R&D research and development
Registrar of Companies the registrar of companies in England
and Wales
Restricted Jurisdiction any jurisdiction where local laws or
regulations may result in significant
risk of civil, regulatory or criminal
exposure if information concerning the
Acquisition is sent or made available
to Vernalis Shareholders in that jurisdiction
(in accordance with Rule 30.3 of the
Code)
RIS a service approved by the London Stock
Exchange for the distribution to the
public of announcements and included
within the list maintained on the London
Stock Exchange's website
Scheme the proposed scheme of arrangement under
Part 26 of the Companies Act 2006 between
Vernalis and the Vernalis Shareholders
to implement the Acquisition with or
subject to any modification, addition
or condition approved or imposed by the
Court and agreed to by Vernalis and Ligand
UK
Scheme Court Hearing the hearing of the Court to sanction
the Scheme under section 899 of the Companies
Act 2006
Scheme Court Order the order of the Court sanctioning the
Scheme under section 899 of the Companies
Act 2006
Scheme Document the document to be dispatched to (among
others) Vernalis Shareholders and made
available to Vernalis ADS Holders, containing
and setting out, among other things,
the full terms and conditions of the
Scheme and including the particulars
required by section 897 of the Companies
Act 2006
Scheme Record Time the time and date specified as such in
the Scheme Document, expected to be 6.00
p.m. on the Business Day immediately
before the Effective Date
Scheme Shareholders holders of Scheme Shares
Scheme Shares 1. the Vernalis Shares in issue at the
date of the Scheme Document other than
any Vernalis Shares owned by Ligand UK;
2. any Vernalis Shares issued after the
date of the Scheme Document and before
the Voting Record Time; and
3. any Vernalis Shares issued at or after
the Voting Record Time and before the
Scheme Record Time in respect of which
the original or subsequent holder of
such Vernalis Shares is bound by the
Scheme, or shall by such time have agreed
in writing to be bound by the Scheme
SEC US Securities and Exchange Commission
Significant Interest in relation to an undertaking, a direct
or indirect interest of 20 per cent.
or more of: (i) the total voting rights
conferred by the equity share capital
(as defined in section 548 of the Companies
Act 2006) of such undertaking; or (ii)
the relevant partnership interest
Takeover Offer should the Acquisition be implemented
by way of a takeover offer as defined
in Chapter 3 of Part 28 of the Companies
Act 2006, the offer to be made by or
on behalf of Ligand UK to acquire the
entire issued and to be issued share
capital of Vernalis not already owned
by Ligand UK and, where the context permits,
any subsequent revision, variation, extension
or renewal of such takeover offer
Third Party each of a government or governmental,
quasi-governmental, supranational, statutory,
regulatory, environmental or investigative
body, court, trade agency, association
or any other similar body or person whatsoever
in any jurisdiction
Tris Tris Pharma, Inc.
UK or United Kingdom the United Kingdom of Great Britain and
Northern Ireland
US or United States the United States of America, its territories
and possessions, any state of the United
States and the District of Columbia
US Exchange Act US Securities Exchange Act of 1934, as
amended
US GAAP generally accepted accounting principles
in effect in the United States from time
to time applied on a consistent basis
Vernalis or Company Vernalis plc, a company incorporated
in England and Wales with registered
number 02304992
Vernalis ADS Holders holders of Vernalis ADSs
Vernalis ADSs ADSs, each representing two Vernalis
Shares
Vernalis Directors the directors of Vernalis as at the date
of this announcement or, where the context
so requires, the directors of Vernalis
from time to time
Vernalis General Meeting the general meeting of Vernalis Shareholders
(including any adjournment, postponement
or reconvention of it) to be convened
for the purpose of considering, and if
thought fit, approving the shareholder
resolutions necessary to enable Vernalis
to implement the Acquisition, notice
of which shall be contained in the Scheme
Document
Vernalis Group Vernalis and its subsidiaries and subsidiary
undertakings from time to time
Vernalis Meetings the Court Meeting and the Vernalis General
Meeting
Vernalis Shareholders the holders of Vernalis Shares
Vernalis Shares the ordinary shares of one pence each
in the capital of Vernalis
Vernalis Share Schemes the 2012 Value Builder Plan, the 2015
Sharesave Plan, the 2007 Bonus Long-Term
Incentive Plan and the 2016 Executive
Incentive Plan
Voting Record Time 6.00 p.m. on the day two days before
the date of the Court Meeting or any
adjournment of it (as the case may be),
in each case excluding any day that is
not a Business Day
Wider Ligand Group Ligand and its subsidiaries, subsidiary
undertakings, associated undertakings
and any other body corporate, partnership,
joint venture or person in which Ligand
and all such undertakings (aggregating
their interests) have a Significant Interest
Wider Vernalis Group Vernalis and its subsidiaries, subsidiary
Woodford Investment undertakings, associated undertakings
Management and any other body corporate, partnership,
joint venture or person in which Vernalis
and all such undertakings (aggregating
their interests) have a Significant Interest
Woodford Investment Management Limited
GBP, p, pence, Sterling the lawful currency of the United Kingdom
or GBP from time to time
For the purposes of this announcement, "subsidiary", "subsidiary
undertaking", "undertaking" and "associated undertaking" have
the respective meanings given by the Companies Act 2006.
References to an enactment include references to that enactment
as amended, replaced, consolidated or re-enacted by or under
any other enactment before or after the date of this announcement.
All references to time in this announcement are to London
time unless otherwise stated. References to the singular include
the plural and vice versa.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCUKORRWAAWRAR
(END) Dow Jones Newswires
August 09, 2018 08:00 ET (12:00 GMT)
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