Board Change & Strategic Update

RNS Number : 7290G
AorTech International PLC
03 July 2012
 



This announcement does not constitute an announcement of a firm intention to make an offer under Rule 2.7 of the Takeover Code.  There can be no certainty that an offer will ultimately be made.

 

Aortech International PLC ("Aortech" or "the Company")

Board Changes, Strategic Update and Commencement of Formal Sale Process

 

Board Changes

The Company today announces that Jon Pither has stepped down as Chairman of the Company with immediate effect and Bill Brown, a non executive director of the Company has today taken  over  the role of Chairman. Jon Pither will remain on the Board as a non executive director.

Current Trading

The Company announces that since the release of the interim results in December 2011 the operations of the Company have continued in line with the Board's expectations with the remaining $2 million of license fees  from St Jude Medical having been received in the year ended 31 March 2012 and the costs of the business remaining in line with that previously experienced. As expected for the second half of the year ended 31 March 2012 the Company was cash consumptive and as at 31 March 2012 retained cash of $1.85 million. The Directors recognize that the Company will either need to raise further funds by the end of October 2012  or complete some form of corporate deal.

Strategy

In the interim results the Board set out its strategy for the creation of shareholder value and began to explore a number of options, including the Company's ability to secure large sums of development capital to develop the Company's heart valves and the value of the Group's intellectual property portfolio and its applications to other medical companies. Discussions have been held with two parties regarding the heart valve project and the Company's intellectual property however at this stage no firm proposals have been received.

The Directors believedthat the move of its operations to Minneapolis would heighten awareness of Aortech and its product portfolio and believe that this has now been evidenced by the recent recognition in the medical device industry that Aortech is the sole supplier of the material that St Jude Medical brand as Optim. Optim is reported to be 50 (times) more resistant to abrasion than silicone and the Directors understand that at the end of last year St Jude Medical discontinued offering to customers any ICD leads that were unprotected by Optim. The Directors believe that the Elasteon material has become a key factor in the success of the St Jude ICD lead business and demonstrates the value of utilizing Elasteon/Optim to a major medical company.

The Board believes the strategic value of the Company is based upon the intellectual property it holds in bio stable polymers and the patented device designs it has created. However the business model of manufacturing polymers for other companies' products has not generated the levels of income required to sustain the Company on a long term basis and the Board has concluded that the long term success of the Company and development of the materials and product designs could best be achieved by the Company's technologies individually or the Company becoming part of a larger medical company with the resources and skills required to maximize the value of Aortech's assets.

Commencement of Sales Process

The Board therefore believes that it is in the best interests of shareholders to continue to seek development capital for the heart valve project and the Company but also to extend the strategy to a formal sales process for the Company itself and to open up or progress discussions with a number of parties who might be interested in either the entire Company or certain parts of it. The Company has appointed Piper Jaffray to assist it with this process.  Any interested parties are invited to contact the individuals from Piper Jaffray set out in the contact details below.

The Takeover Panel has granted a dispensation from the requirements of Rules 2.4(a), 2.4(b) and 2.6(a) of the Takeover Code (the "Code") such that any interested party participating in the formal sale process will not be required to be publicly identified as a result of this announcement (subject to note 3 to Rule 2.2 of the Code) and will not be subject to the 28 day deadline referred to in Rule 2.6(a), for so long as it is participating in the formal sale process. Interested parties should note Rule 21.2 of the Code, which will prohibit any form of inducement fee or other offer-related arrangement, and that the Company has not requested any dispensation from this prohibition under Note 2 of Rule 21.2 at this stage.

The Company proposes to conduct the sale process by requiring interested parties to enter into a non-disclosure agreement with the Company on reasonable terms satisfactory to the Board and on the same terms, in all material respects, as the other interested parties, before being permitted to participate in the process. The Company then intends to provide all participants who have entered into such non-disclosure agreements with the Company relevant information with which to evaluate making an offer.

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

The Board reserves the right to reject any approach or terminate discussions with any interested party or participant at any time. There can be no certainty that any offer will be made for the Company, or even proposed, or as to the level of any proposal or offer that may be made.

A copy of this announcement will be available at www.aortech.com. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

For further information please contact:

AorTech International plc

 

Bill Brown Chairman

Eddie McDaid

Frank McGuire

Tel: 001 801 581 0854

 

Piper Jaffray

 

Neil Mackison

Graeme Smethurst

Tel: 020 7796 8400

 

Sarah Price, Media Relations

Tel: + 1 801 649 4163

e-mail sprice@aortech.com

 

Stuart Andrews/Rose Herbert

finnCap as Nominated Adviser

Tel: 020 7220 0500

About AorTech:

AorTech develops and manufactures biostable, implantable polymers, including Elast-Eon(TM) and ECSil(TM), the world's leading long-term implantable co-polymers, as well as proprietary processing methods for various devices, including small part RIM manufacturing. With severalmillion implants and five years of successful clinical use, AorTech polymers are being developed and  used in cardiology, orthopaedic andurological applications, including pacing leads, cardiac cannulae,stents and implantable sensor technology. Devices manufactured from AorTech polymers have numerous US FDA PMA approvals, 510k's, CE Marks, Australian TGA and Japanese Ministry of Health approvals.

Elast-Eon(TM) and ECSil's(TM) biostability is comparable to silicone while exhibiting excellent mechanical, blood contacting and flex-fatigue properties. Our polymers can be processed using conventional thermoplastic extrusion and molding techniques. AorTech provides a range of materials in a variety of application-specific formulations for use in medical devices and components.

Rule 2.10

In accordance with Rule 2.10 of the Code, Aortech confirms that at the date of this Announcement, there are 4,832,778 Aortech ordinary shares in issue and admitted to trading on AIM. The ISIN of the Aortech shares is GB0033360586.

Dealing disclosure requirements

Under Rule 8.3(a) of the Code, any person who is interested in one per cent. or more of any class of relevant securities of an offeree company or of any paper 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 paper 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 paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper 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 one per cent. or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper 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 paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (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 paper 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 Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the 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.

 

 

 


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