Propsd Aqstn & Notice of EGM
Azure Holdings PLC
11 September 2006
Azure Holdings plc
Proposed Capital Reorganisation
Proposed acquisition of ValiRx Limited
Approval of waiver of the obligation to make a mandatory offer under Rule 9 of
the City Code on Takeovers and Mergers
Admission of the Enlarged Share Capital to trading on AIM
Change of name to ValiRx plc
and
Notices of Extraordinary General Meeting and Class Meetings
Azure Holdings plc ('Azure' or the 'Company') announces that is has agreed,
subject, inter alia, to Shareholder approval, to acquire the entire issued share
capital of ValiRx Limited ('ValiRx'), a biopharmaceutical development company
that is looking to exploit opportunities in the future healthcare, life sciences
and biopharmaceutical industries.
Subject to the approval of the Azure shareholders at an extraordinary general
meeting of the Company to be held on 2 October 2006, and subsequent to the
Capital Reorganisation, the initial consideration for the Acquisition will be
satisfied by the issue of 637,500,000 new ordinary shares of 0.2p each ('
Ordinary Shares') and additional consideration may be payable by the issue of a
further 150,000,000 Ordinary Shares.
It is proposed that, on Admission, Barry Gold will step down as Chairman of the
Company. Dr Satu Vainikka (Chief Executive), Dr Jacob Vincent Micallef (Chief
Operating Officer) and Dr George Stephen Morris (Chief Development Officer) will
join the board as executive directors. Anthony Roger Moore will become
Non-Executive Chairman and Kevin John Alexander will be appointed as
Non-Executive Director.
By reason of the size of ValiRx in relation to Azure and the fundamental change
in Azure's business, board and voting control, the Acquisition is classified as
a reverse takeover under the AIM Rules and, therefore, requires the approval of
Shareholders in general meeting.
The Company is also seeking Shareholder approval at the EGM to the waiver of the
obligation of the Vendors to make a general offer for the Company under Rule 9
of the City Code.
Application will be made for the New Ordinary Shares and Consideration Shares to
be admitted to trading on AIM and it is expected that trading will commence on 3
October 2006.
An admission document setting out details of the Proposals and including the
notices of the EGM and Class Meetings (the 'Admission Document') has been posted
to shareholders. Further copies of the document are available to the public,
free of charge, from the offices of WH Ireland Limited, 11 St James's Square,
Manchester M2 6WH.
Enquiries:
Barry Gold, Azure Holdings plc Tel: 07768 948 928
David Youngman, WH Ireland Limited Tel: 0161 832 2174
Toby Hall / Jade Mamarbachi, GTH Media Relations Tel: 0207 153 8039 / 8035
Introduction
The Company has today announced that it has agreed, subject, inter alia, to
Shareholder approval, to acquire the entire issued share capital of ValiRx for
an initial consideration to be satisfied by the issue of the Consideration
Shares and additional consideration, subject to the achievement of certain
milestones, to be satisfied by the issue of the Deferred Consideration Shares.
By reason of the size of ValiRx in relation to Azure and the fundamental change
in Azure's business, board and voting control, the Acquisition is classified as
a reverse takeover under the AIM Rules and, therefore, requires the approval of
Shareholders in general meeting. To complete the Proposals it will also be
necessary to give the directors of the Company the required powers and
authorities to allot the Consideration Shares, Deferred Consideration Shares and
the ValiRx Option Shares.
The purpose of the Admission Document is to give you details of the Proposals
and to ask you to vote in favour of the Resolutions to be proposed at the
Extraordinary General Meeting and the Class Meetings, notices of which are set
out at the end of the Admission Document.
Background to, and reasons for the Acquisition
The Company's trading activities were terminated in January 2003 when its only
remaining subsidiary, Room Service (UK) Limited, went into voluntary
liquidation. Since this date, the Company has been exploring possible targets
with the view of undertaking a reverse takeover under the AIM Rules.
The Directors have identified ValiRx as a target for a reverse takeover. ValiRx
operates within the biotechnology sector and the Directors believe that the
Acquisition offers Shareholders an opportunity to gain exposure to this sector
and that the terms of the Acquisition are fair and reasonable and in the best
interests of the Company and its shareholders.
Information on ValiRx
ValiRx is a biopharmaceutical development company, which was incorporated on 1
June 2006 with the intention of exploiting opportunities in the future
healthcare, life sciences and biopharmaceutical industries. The directors of
ValiRx are Dr Satu Vainikka and Dr George Morris.
ValiRx is looking to acquire the rights to developmental products either in
therapeutics, with a particular focus on developing products in the
biopharmaceutical sector, or closely related diagnostics. ValiRx has made the
following acquisitions that are conditional on Admission:
(a) Cronos: ValiRx will acquire 60.28 per cent. of the ordinary share capital of
Cronos on Admission. The consideration will be satisfied by the allotment and
issue to the shareholders of Cronos of 5,716 ordinary shares of 1p each in
ValiRx. The Company will also hold an option to acquire from the Cronos Minority
Shareholders the balance of 39.72 per cent. of the issued share capital of
Cronos for a consideration of either £2,600,000 or the issue of the ValiRx
Option Shares, at the Company's option.
Cronos is a biopharmaceutical company which owns the world exclusive licences to
two innovative and, in the opinion of the Directors and Proposed Directors,
potentially market-changing technologies:
• GeneICE drugs, which have the potential to halt the development and
growth of cancerous cells. The technology also has major applications in
inflammatory disease and potentially in inherited genetic conditions. GeneICE
compounds work by shutting down the 'harmful' genes that are the root cause of
these diseases; and
• HyperGenomics, a rapid, high-throughput and extremely sensitive
genetic analysis technology that can be used to characterise any particular
cell, disease or differentiation state. It has many potential uses, especially
in the continually growing fields of cancer diagnostics and stem cell quality
control.
Cancer Research Technology Limited, a wholly owned subsidiary of Cancer Research
UK, one of the leading oncology focused technology transfer and development
companies, has partnered with Cronos for the therapeutic development of GeneICE,
demonstrating the potential of these therapeutics. The technologies were
originally developed at Imperial Innovations, which will become a shareholder in
the Company following the completion of the Acquisition.
The GeneICE platform constitutes a completely new class of drugs, which can be
developed for a wide range of therapeutic fields. GeneICE therapeutics offer a
high value opportunity to introduce a revolutionary class of drugs designed to
treat a wide range of diseases by gene silencing. It is intended that Cronos
will create value for shareholders by combining a range of products in oncology,
whilst seeking to license out the technology and potential future lead
compounds. Innovative, targeted therapies are currently driving the cancer
market and it is estimated that the market share for these therapies will grow
by in excess of 30 per cent. annually for a number of years.
The pharmaceutical industry's shift towards developing targeted therapies has
created a huge market potential for new diagnostic technologies. Many of the new
classes of drugs under development (including GeneICE) require knowledge of a
disease's genetic constitution in order to be effective, and this has generated
the need for new low cost, high-throughput, and accurate genetic tests. There
are over 4,000 diseases including cancer, heart disease and risk of strokes
which could, in principle, be identified and profiled using genetic analysis
tools; of these, only 300 can currently be tested for using such tools. Thus
there exists a substantial emerging market for further development of diagnostic
tests based on gene expression analysis. Cronos intends to address this need by
using its proprietary HyperGenomics technology to provide a rapid,
cost-effective and sensitive platform that can be used to characterise a
particular cell, disease or differentiation state.
In addition to opportunities in the field of diagnostics, HyperGenomics has
potential uses in research and drug development. One area where it may be
particularly suitable is in the emerging but rapidly growing field of stem cell
quality control, where it may be used to characterise differentiation states.
(b) Morphogenesis: ValiRx will acquire 7.32 per cent. of the ordinary share
capital of Morphogenesis on Admission. The consideration will be satisfied by
the allotment and issue to vendors of such Morphogenesis shares of 1,657
ordinary shares of 1p each in the capital of ValiRx.
Morphogenesis is an established biotechnology company developing high value
therapy products for the treatment of chronic disorders, where products include:
• a cancer vaccine product, ready to enter clinical studies;
• a cell purification device that is ready for marketing; and
• a potentially strong stem cell development programme.
Stem cell research is based upon the unspecialised development cells being able
to 'renew' through cell division growth. Due to their unspecialised nature,
stem cells can be forced to become specialist cells in the right conditions,
becoming a cluster of nerve tissue, or heart muscle cells. This ability is
helping fuel science's desire to create cell based therapies to cure, treat and
prevent crippling diseases.
(c) Other opportunities have been identified by ValiRx. These opportunities will
be complementary and synergistic to the products and technologies of Cronos and
Morphogenesis.
The management team of ValiRx is experienced in transferring technologies and
products into the commercial arena and in further developing them for successful
commercial exits. The Directors and the Proposed Directors intend that following
completion of the Proposals the Enlarged Group will, through ValiRx, maximise
the value creation by continuing to expand its products and technologies, while
simultaneously seeking to license or sell the relevant product on at the most
advantageous stage (although save as disclosed in the Admission Document, no
firm investment commitments have been made). It is also the intention that
ValiRx will provide business development, finance and other centralised services
in order to create value from the commercialisation of its products and
technologies.
The value for biotech companies which possess novel therapies increases with
passage through preclinical and clinical development. Thus the value achieved on
licensing at early stages of development is a small percentage of the market
potential as the development risk is high. As the therapy gets closer to market,
its value greatly increases. Whilst most of the ValiRx products are at the
relatively early stage, the intention is that they will be balanced by products
at a more mature developmental stage. It is also hoped that there can be cross
fertilisation of ideas and that early stage products of one company can be
actively marketed as tools and solutions within products and technology being
developed by other members of the Enlarged Group, such as Cronos' GeneICE
technology and its HyperGenomics gene mapping technology.
The Directors and Proposed Directors' intention is that the criteria for the
Enlarged Group to become involved in future prospects will include one or more
of the following attributes:
• high growth potential;
• strong intellectual property position;
• inventive and innovative products and technologies;
• attractive market size; and
• exit potential.
Information on Cronos
Cronos is a biopharmaceutical company, established in 2004, to develop and
commercialise novel and groundbreaking classes of therapeutics and technologies
in order to meet a huge market potential. Cronos' products are based on its two
platforms, GeneICE and HyperGenomics which are undergoing rapid and cost
effective development programmes.
Cronos' technologies
DNA is the 'blueprint of life' and like a blueprint, it must be able to be '
read' in order for a product to be made. At any one time around 99 per cent. of
DNA in a cell is tightly packaged into a highly complex structure called
chromatin and cannot be read. The remaining 1 per cent. is unpackaged and open
to be read by the cell's internal machinery. The positioning of these open areas
within the genome is highly dynamic, and changes in order to allow different
genes to become active. Cronos' two proprietary technology platforms seek to
exploit this (epigenetic) property:
• GeneICE is a gene-silencing technology which deactivates genes by
repackaging specific 'open' areas of DNA. DNA repackaging results in
gene deactivation because the repackaged areas can no longer be read by
the cell's internal machinery. Cronos has developed a rapid and
cost-effective development program to bring GeneICE drugs to the
marketplace. Initially, it is intended that the focus will be on
developing anti-cancer drugs (oncology is a field in which Cronos has
considerable core competence) and in addition, licensing or
collaborative opportunities will be sought in other therapeutic areas.
• HyperGenomics is a tool which analyses genetic activity by detecting
the unpackaged (open) areas of the cell's DNA (these occur in areas
where genes are 'active'). It has many potential applications,
particularly in diagnosing and characterising diseases which have a
genetic basis, such as cancer. HyperGenomics is based on Polymerase
Chain Reaction (PCR), a very widely used process, and the nature of PCR
confers it with several key advantages over certain competitors'
technologies in terms of cost, speed of operation, accuracy, and
repeatability.
Unlike 'first generation' post-genomic technologies, GeneICE and HyperGenomics
are used to detect and deactivate genes before they can be expressed. This means
that cells are prevented from reading specific DNA and therefore cannot
manufacture a specific protein, thereby precluding any adverse effects, provided
the system is correctly understood and targeted, a process which is also added
by the use of the hypergenomic approach. As such, they represent a step forward
in the diagnosis and treatment of diseases such as cancer.
Following completion of the Proposals, the Directors and the Proposed Directors
intend that risk will be minimised by developing a pipeline of GeneICE drug
candidates which can be advanced at low cost to in vitro proof of principle.
Once this has been achieved, the best commercial candidates will be selected for
further development. It is intended that Cronos will seek to add additional
value and further reduce risk by adding other complementary technologies to its
product range. This will be achieved by licensing in such opportunities or by
entering into co-development agreements. Cronos has already identified a
potential candidate and has entered into discussions on a possible agreement.
Cronos is looking to implement multiple early stage licensing deals with GeneICE
drugs in the disease areas relevant to each of the licensees. It is intended
that Cronos will also proceed with its own internal therapeutics programme in
the area of oncology for late stage licensing.
Information on Morphogenesis
Morphogenesis is an emerging biotechnology and cell therapy company, founded in
1995, that develops cell therapy products to treat chronic disorders. The
prototype of Morphogenesis' first product is nearing completion and is intended
to be ready for launch shortly. In addition there are several other products in
the pipeline together with some commercially attractive technologies. Many
products and technologies are protected by issued or pending patents and
Morphogenesis is placing a priority on continuing to develop and expand its
intellectual property portfolio.
Morphogenesis has three major product and technology platforms which are
synergistic and closely related, being:
PACS, a device which allows the isolation and purification of adult stem cells.
This system is highly specific and allows differential release of multiple cell
types without altering their function or reducing their viability. The device
will offer features in comparison to currently marketed cell separation systems,
directly correlating into a more patient-friendly and accurate procurement of
stem cells.
ImmunexFx, a cancer vaccine that will be the first of Morphogenesis' products to
enter clinical trials. The ImmunexFx cancer vaccine capitalises on the ability
of bacterial antigens to evoke a strong immune response and the ability of the
patient's immune system to respond to the presence of the bacterial antigens by
directing the force of the immune system specifically to the tumour.
MATCH, an enabling technology designed to facilitate the development of
therapies using stem cells by overcoming the overriding problem of transplant
rejection. The ability to transplant cells, tissues or organs is limited by the
Major Histocompatibility Complex (MHC). By limiting the number of MHC mismatches
and providing some 'self' MHC antigens, the donor and recipient can be 'MATCH
ed'.
Since its incorporation, Morphogenesis has focused the majority of its efforts
on the continued development of its technologies and in the protection of its
intellectual property. In addition to developing its own proprietary technology,
it is intended that Morphogenesis will in-license technologies which enhance,
complement or otherwise facilitate the commercialisation of existing and related
products. It is intended that other ongoing efforts will focus on the progress
of research and development programs, pre-clinical testing, regulatory approvals
and corporate partnerships.
Morphogenesis has developed an extensive collection of proprietary products and
technologies to overcome many major challenges currently facing the cell therapy
industry. Each major platform is currently at a different stage of development
and has different risk and return characteristics for Morphogenesis'
shareholders.
Directors and Proposed Directors
The Board currently comprises Barry Gold and Gerald Desler. It is proposed that,
on Admission, the Proposed Directors will join the Board and Barry Gold will
step down.
Directors
Mr Barry Gold (age 59), Chairman
Barry Gold is a solicitor with experience of acting for and being a director of
fully listed and AIM quoted companies. He was the senior partner of Gold Mann &
Co, a city firm of solicitors, from its founding in 1975 until he retired in
1998, remaining as a consultant for a further 3 years. He is currently a
consultant at Manches LLP, a commercial law firm operating in London. Mr Gold is
an FA licensed football agent, Chairman of Premier Management Holdings plc and a
director of Matisse Holdings plc, both of which are AIM quoted companies.
Mr Gold is standing down from the Board on Admission.
Mr Gerald Desler (age 61), Finance Director and Proposed Finance Director
Gerald Desler is a chartered accountant, who qualified in 1968 with Stanley A
Spofforth & Co., becoming a partner in 1970 and senior partner in 1985. During
his time at Stanley A Spofforth & Co. Mr Desler specialised in consultancy work,
much of it involving funding and venture capital and was involved in one of the
first joint ventures in what was then the People's Republic of China in 1980. He
is currently the finance director of Premier Management Holdings plc, an AIM
quoted company, Babble.net Group plc, an Ofex quoted company and is company
secretary and financial controller of AIM quoted London Asia Capital plc.
Proposed Directors
Mr Anthony Moore (age 60), Proposed Non-Executive Chairman
Anthony Moore is currently co-chairman of the board and co-chief executive
officer of MCC and has held these positions since its founding in July 1999. His
experience covers private banking, asset management, stock broking and
international investment banking.
Prior to co-founding MCC, he was president and CEO of Los Angeles based New
Energy Technologies. He previously served as chairman of corporate finance at
Barclays de Zoete Wedd in London, where he also held the position of CEO of
Global Investment Banking Services and was a member of the Board of Bankers
Trust International. From 1982 to 1991, he held various senior positions with
Goldman Sachs: Head of Investment Banking in Tokyo, Managing Director of Goldman
Sachs Asia in Hong Kong and Executive Director responsible for large corporate
clients in London. Throughout his career, he has built an extensive network of
senior level contacts with governments, financial institutions and companies
around the world.
Dr Satu Vainikka (age 39), Proposed Chief Executive Officer
Satu Vainikka has extensive experience in the biotechnology industry, technology
commercialisation, equity financing and business management. She initially
trained as a PhD molecular biologist, and is a biotechnology entrepreneur with
several years' research experience in oncology with University of Helsinki and
ICRF (now CRUK), before completing an MBA.
Prior to her current role as a CEO of ValiRx, she was a founder, director and
CEO of Cronos. Her previous roles include being the founder and CSO of Gene
Expression Technologies Ltd and consultancy roles in healthcare technology
commercialisation and entrepreneurship. In her past roles, Dr Vainikka has
successfully developed business strategies, negotiated corporate and academic
collaborations and transactions to build high growth portfolios. She has also
been successful in applications for grants and raised several rounds of private
equity funding.
Dr Jacob Micallef (age 50), Proposed Chief Operating Officer
Jacob Micallef originally trained as a physical chemist and has 10 years
experience in leading R&D in diagnostics for the World Health Organisation. He
also initiated, established and managed the manufacture of diagnostics with
Immunometrics Ltd before completing an MBA at Imperial College. His previous
roles include founder and chief operations officer of Gene Expression
Technologies Ltd. In this role, he led the development of a chemical synthesis
for GeneICE molecules and was responsible for various functions within Cronos'
operations.
Dr George Morris (age 50), Proposed Chief Development Officer
George Morris has over 20 years experience in biological and medical research
and financial services. Currently he is a director of several biotech companies
and is an adviser to a financial services company. In the past, he has been a
CEO, an executive, director and founder of several life sciences companies and a
consultant to, inter alia, Close Brothers and Beeson Gregory and built Quartz
Capital Partners' Life Sciences activities.
For the majority of his career he has worked in academic and commercial
scientific research in the fields of biochemistry and biotechnology with a
particular focus on metabolic systems and their manipulation for medical and
other reasons. He is a named author on approximately 50 peer-reviewed papers,
numerous abstracts and short reports and a named inventor on multiple patents.
Mr Kevin Alexander (age 52), Proposed Non-Executive Director
Kevin Alexander is a solicitor and qualified as a member of the New York Bar and
spent over 25 years practising law with major law firms in London and in the
United States. Since leaving full time legal partnership, he has progressed
various business interests, both in the energy sector and in private equity. Mr
Alexander currently works part time for MCC.
Principal terms and conditions of the Acquisition
The Company has conditionally agreed to acquire the entire issued and to be
issued share capital of ValiRx. The consideration is to be satisfied by the
issue and allotment by the Company of the Consideration Shares. The
Consideration Shares will, when issued, represent 72.02 per cent. of the
Enlarged Share Capital. The Consideration Shares will be issued as fully paid
and will rank pari passu in all respects with the New Ordinary Shares, including
the right to receive, in full, all dividends and other distributions thereafter
declared, made or paid.
In addition, the Acquisition Agreement contains provisions whereby up to
150,000,000 Deferred Consideration Shares may be issued to members of the
Concert Party. The Deferred Consideration Shares will be issued as fully paid
and will rank pari passu in all respects with the New Ordinary Shares and
Consideration Shares in issue, including the right to receive, in full, all
dividends and other distributions thereafter declared, made or paid. Assuming no
further issue of shares and that all of the Deferred Consideration Shares are
issued, the Consideration Shares and the Deferred Consideration Shares will,
together, comprise 76.07 per cent. of the then enlarged share capital of the
Company. The entire issued and to be issued share capital of ValiRx is to be
acquired pursuant to the Acquisition Agreement and the October Acquisition
Agreement which are conditional inter alia upon:
• Admission;
• approval by Shareholders of the Capital Reorganisation;
• approval by the Shareholders of the Acquisition for the purposes of rule
14 of the AIM Rules;
• approval by the Shareholders of the waiver of the obligation of the Vendors
to make a general offer for the Company under Rule 9 of the City Code;
• approval by the Shareholders of the increase in the authorised share capital
of the Company;
• the Directors being granted by Shareholders the authority to allot all the
Consideration Shares and generally;
• the disapplication of statutory pre-emption rights upon the issue of
Ordinary Shares for cash;
• the adoption of new articles of association of the Company as anticipated by
paragraph (i) of Resolution 2 set out in the Notice of EGM;
• evidence that the Company will on Admission have cash resources of not less
than £1,1,171,111; and
• receipt by the Company in a form acceptable to the Company and WH Ireland of
an opinion from counsel qualified in the State of Florida that the
agreements transferring the Morphogenesis Shares to ValiRx is effective to
transfer such shares under Florida law ('the US Opinion').
The Capital Reorganisation
Subject to the approval of Shareholders at the EGM, the Directors propose to
reduce the number of issued and unissued ordinary shares of 1p each through the
subdivision of each ordinary share of 1p each into one Reconstruction Share and
one 0.9p Deferred Share. Every two Reconstruction Shares will then be
consolidated into one Ordinary Share.
On the consolidation of Reconstruction Shares, where the number of
Reconstruction Shares held by a Shareholder is not divisible by two, that
Shareholder would become entitled to a half an Ordinary Share, fractional
entitlements will not be able to be issued, so it is proposed that all fractions
of shares resulting from the consolidation of Reconstruction Shares will be
aggregated and consolidated into Ordinary Shares which will then be sold in the
market at the best price reasonably obtainable. It is intended that the proceeds
of such sales to which any Shareholder is entitled are expected to be less than
£3 so the proceeds will be applied for the benefit of the Company rather than
being sent to the Shareholder entitled as is permitted by the new Articles
proposed to be adopted at the EGM.
The City Code
The terms of the Acquisition give rise to certain considerations under the City
Code.
The City Code is issued and administered by the Panel. The Company is subject to
the City Code and therefore its shareholders are entitled to the protections
afforded by the City Code.
Under Rule 9 of the City Code, any person who acquires, whether by a series of
transactions over a period of time or not, an interest in shares which (taken
together with shares in which persons acting in concert with them are
interested) carry 30 per cent. or more of the voting rights of a company which
is subject to the City Code, is normally required to make a general offer in
cash to all other shareholders of that company to acquire the balance of the
shares not held by such a person (or group of persons acting in concert).
In addition, Rule 9 provides that where any person, together with persons acting
in concert with them, is interested in shares in a company which is subject to
the City Code and which in aggregate carry not less than 30 per cent. but not
more than 50 per cent. of that company's voting rights, and such person, or any
person acting in concert with them, acquires an interest in any other shares
which increases the percentage of the shares carrying voting rights in that
company in which they are interested, such person is normally required, in the
same way, to make a general offer to all shareholders.
An offer under Rule 9 must be in cash and at the highest price paid within the
preceding 12 months for any interest in shares in the company by the person
required to make the offer or any person acting in concert with them.
The parties shown in the table below are together deemed to be acting in concert
for the purposes of the City Code.
Consideration Percentage Deferred ValiRx MCC Warrant Shareholding Percentage
Shares holding of Consideration Option Shares after the holding after
the Shares Shares issue of the issue of
Enlarged Deferred Deferred
Share Consideration Consideration
Capital Shares, ValiRx Shares, ValiRx
Option Shares Option Shares
and MCC and MCC
Warrant Shares Warrant Shares
(1) (1)
Rosemount Limited 78,750,000 8.90% 21,000,000 0 0 99,750,000 8.02%
Imperial 70,312,500 7.94% 18,750,000 0 0 89,062,500 7.16%
Innovations
MCC 59,456,250 6.72% 15,855,000 0 0 75,311,250 6.05%
Dr Satu Vainikka 55,912,500 6.32% 14,910,000 59,432,703 0 130,255,203 10.47%
MCC Europe 54,168,750 6.12% 14,445,000 0 13,710,602 82,324,352 6.62%
Dr Jacob Micallef 50,287,500 5.68% 13,410,000 59,432,703 0 123,130,203 9.90%
Dr George Morris 37,125,000 4.19% 9,900,000 0 0 63,726,891 5.12%
Ridgecrest 33,750,000 3.81% 9,000,000 16,701,891 0 42,750,000 3.44%
Dr Cameron 21,375,000 2.41% 5,700,000 0 0 86,507,703 6.95%
Macdonald
Kevin Alexander 16,312,500 1.84% 4,350,000 59,432,703 0 20,662,500 1.66%
James Thorniley 11,812,500 1.33% 3,150,000 0 0 14,962,500 1.20%
Anthony Moore 11,250,000 1.27% 3,000,000 0 0 14,250,000 1.15%
Vernon Sankey 9,843,750 1.11% 2,625,000 0 0 12,468,750 1.00%
Kenneth Denos 8,437,500 0.95% 2,250,000 0 0 10,687,500 0.86%
Sharon Clayton 8,437,500 0.95% 2,250,000 0 0 10,687,500 0.86%
Farshid Zonoozi 7,031,250 0.79% 1,875,000 0 0 8,906,250 0.72%
Faranak Zonoozi 7,031,250 0.79% 1,875,000 0 0 8,906,250 0.72%
Richard Meek 5,625,000 0.64% 1,500,000 0 0 7,125,000 0.57%
Guy Innes 5,625,000 0.64% 1,500,000 0 0 7,125,000 0.57%
John Savin 2,812,500 0.32% 750,000 0 0 3,562,500 0.29%
Paul Rudisill 2,812,500 0.32% 750,000 0 0 3,562,500 0.29%
Nigel Tose 1,406,250 0.16% 375,000 0 0 1,781,250 0.14%
Oliver Bates 1,406,250 0.16% 375,000 0 0 1,781,250 0.14%
Brendan Bates 1,406,250 0.16% 375,000 0 0 1,781,250 0.14%
Steven Eccles 112,500 0.01% 30,000 0 0 142,500 0.01%
Total 562,500,000 63.55% 150,000,000 195,000,000 13,710,602 921,210,602 74.06%
(1) Assuming no other share issues following Admission.
After completion of the Proposals, the Concert Party's interest in shares
carrying voting rights in the Company will represent, in aggregate, 63.55 per
cent. of the voting rights attaching to the Company's issued ordinary share
capital.
The table above shows the interest of the Concert Party assuming that the
Proposals are implemented.
The members of the Concert Party shown in the table above will receive
additional Deferred Consideration Shares when the Company files a patent
application with the UK Patent Office. The Deferred Consideration Shares will be
issued on or before the date 10 business days from the date on which Cronos
files a patent application with the UK Patent Office.
On exercise of the ValiRx Option, either £2,600,000 will be paid, in aggregate,
or 195,000,000 ValiRx Option Shares will be issued to, the Cronos Minority
Shareholders, split between them as shown in the table above.
On exercise of the MCC Warrant, 13,710,602 Ordinary Shares will be issued to MCC
Europe.
Following the issue of Deferred Consideration Shares, ValiRx Option Shares and
MCC Warrant Shares, the Concert Party's interest will increase to 74.06 per
cent. of the voting rights attaching to the Company's then enlarged ordinary
share capital, assuming no other issue of shares by the Company.
The Panel has agreed, however, to waive the obligation to make a general offer
that would otherwise arise as a result of the Acquisition and the issue of
Deferred Consideration Shares, ValiRx Option Shares and MCC Warrant Shares,
subject to the approval of Shareholders. Accordingly, Resolution 2 is being
proposed at the EGM, and will be taken on a poll.
Shareholders should be aware that, following the Acquisition, the members of the
Concert Party will together hold more than 50 per cent. of the voting rights
attaching to the Company's issued share capital. Accordingly, the Concert Party,
for so long as the members of the Concert Party continue to be treated as acting
in concert, may be able to increase its aggregate shareholding without incurring
any further obligation under Rule 9 to make a general offer. However, individual
members of the Concert Party will not be able to increase their percentage
shareholdings through a Rule 9 threshold without Panel consent.
There have been no public takeover bids by third parties in respect of the
Company's equity in the current financial year or the previous financial year.
Save for the City Code, there are no measures in place to ensure that any
control by the Concert Party or any other shareholder having control over the
Company as a result of its shareholding is not abused.
The Concert Party
The Concert Party comprises the parties shown in the table above. Biographies of
Dr Satu Vainikka, Dr Jacob Micallef and Dr George Morris are shown under
Directors and Proposed Directors above. Details relating to the other members of
the Concert Party holding over 3 per cent. of the Enlarged Share Capital
following admission are set out below:
MCC
MCC was established in July 1999 by Anthony Moore and Sharon Clayton. MCC is a
strategic financial advisory firm providing a wide range of financial advisory
services to growing and established companies. It offers expertise and in-depth
knowledge of various industries and financial markets in which it operates. It
also provides strategic contacts to a global network of professionals, financial
intermediaries and companies. MCC has offices and joint ventures in London, the
United States and elsewhere and currently employs approximately 60 people
worldwide.
Turnover for the financial years ending 31 December 2005 and 31 December 2004
was US$10,396,273 and US$7,065,820, respectively. Loss before income tax and
minority interest at 31 December 2005 was US$731,614 with a loss of US$4,260,506
at 31 December 2004. Total assets at 31 December 2005 were US$45,223,907 with
total liabilities of US$37,403,213. The directors of MCC are Anthony Moore,
Sharon Clayton and Kenneth Denos.
MCC's principal place of business is at 10757 River Front Parkway, South Jordan,
UTAH 84095, USA.
MCC Europe is a wholly owned subsidiary of MCC.
The registered office for MCC Europe is: York House, 1 Seagrave Road, London SW6
1RP.
Rosemount Limited
Rosemount Limited is a company incorporated in the Marshall Islands. It is a
dormant company that has fully paid up share capital in issue of $5,000, which
is its only asset, and is the investment vehicle for Gary Wyatt, who is the sole
director.
Gary Wyatt (FCA) is a qualified accountant. On qualification, he worked for Stoy
Hayward where for several years he specialised in taxation. Before launching
Wyatts Chartered Accountants with his wife, Karen Wyatt (FCA), an accountancy
firm based in London that operates within areas of commerce, financial services
and industry, Mr Wyatt spent a number of years working in the private sector as
a finance director for various companies, including a firm of loss adjusters and
later a multi-service public relations company.
The contact address for Rosemount Limited is: Rosemount Limited, c/o York House,
1 Seagrave Road, London SW6 1RP.
Imperial Innovations
Imperial Innovations is one of the UK's leading technology commercialisation
companies. The company was founded in 1986 and is a wholly-owned subsidiary of
Imperial Innovations Group plc, which was admitted to trading on AIM in July
2006. The company's integrated approach encompasses the identification of ideas,
protection of intellectual property, development and licensing of technology and
formation, incubation and investment in spin-out companies. A wide range of
technologies are commercialised within the areas of bioscience and technology
and engineering.
Based at Imperial College London, the company has established equity holdings in
58 spin-out companies and has completed 90 commercial agreements. Imperial
Innovations also commercialises technologies originating from outside Imperial
College through incubation contracts with the Carbon Trust and WRAP and with
major technology based corporations.
Imperial Innovations currently holds shares in three spin-out companies now
quoted on AIM: Ceres Power plc, a fuel cell company, and ParOS plc, a provider
of energy-saving advanced control solutions, as well as Nanoscience plc, a
developer of low power integrated circuits and silicon chips, following its
acquisition of spin-out company Toumaz Technology.
Turnover for the financial years ending 31 July 2005 and 31 July 2004 was
£3,935,000 and £4,005,000, respectively. Loss before taxation at 31 July 2005
was £2,240,000 with a loss of £1,036,000 at 31 July 2004. Net assets at 31 July
2005 were £19,464,000. The directors of Imperial Innovations are Dr Martin
Knight, Susan Searle, Julian Smith, Dr Tidu Maini, Dr Paul Atherton and Mark
Rowan.
The registered office of Imperial Innovations is: Level 12, Department of
Electrical and Electronic Engineering, Imperial College, London SW7 2AZ.
Ridgecrest
Ridgecrest is a publicly traded company in the United States. The company had a
market capitalisation of US$7.5 million at flotation in October 2005 and trades
under the symbol RGHG.PK. Ridgecrest is a healthcare management and service
company providing strategic advisory and other services to healthcare companies.
The directors of Ridgecrest are Stuart Bruck, Phil Dalton and Kenneth Denos.
Ridgecrest was a dormant company on the Pink Sheets Exchange in the US until it
completed a major acquisition at the end of 2005. As a Pink Sheet company,
Ridgecrest was not required to publish financial statements or have an audit
completed. Therefore, no public financial information is currently available on
the company.
The principal place of business for Ridgecest is: 2301 Rosecrans Avenue, Suite
3180, El Segundo CA90245.
Intentions of the Concert Party
The Company's trading activities were terminated in January 2003 when its only
remaining subsidiary went into creditors' voluntary liquidation. Upon completion
of the Proposals, it is intended that the Company will become the holding
company for ValiRx Limited.
Extraordinary General Meeting
The Acquisition is classed as a reverse takeover for the purpose of the AIM
Rules and is therefore conditional upon the approval of the Shareholders. An
Extraordinary General Meeting has been convened for 10.00 a.m. on 2 October 2006
to be held at Halliwells LLP, 1 Threadneedle Street, London, EC2R 8AW.
You will find set out at the end of the Admission Document a notice convening
the EGM for the purpose of considering and if thought fit approving special
resolutions to:
(i) confirm the authorised and issued 0.9p Deferred Share capital and to
ratify the allotment of the 0.9p Deferred Shares;
(ii) approve the Acquisition for the purposes of Rule 14 of the AIM Rules;
(iii) approve the waiver of the obligation by the Concert Party to make a
general offer under Rule 9 of the City Code as described above;
(iv) increase the authorised share capital of the Company;
(v) grant the Directors and Proposed Directors authority to allot Ordinary
Shares pursuant to section 80 of the Act in connection with the
Acquisition and generally;
(vi) disapply statutory pre-emption rights upon the issue of Ordinary Shares
for cash;
(vii) approve Capital Reorganisation;
(viii) change the name of the Company to ValiRx plc; and
(ix) adopt new Articles as the articles of association of the Company.
In addition, you will find at the end of the Admission Document, notices
convening Class Meetings of the holders of Existing Ordinary Shares, 0.9p
Deferred Shares and 99p Deferred Shares to be held at Halliwells LLP, 1
Threadneedle Street, London, EC2R 8AW at 10.30 a.m., 10.45 a.m. and 11.00 a.m.
respectively on 2 October 2006 at which resolutions will be proposed to approve
any variations to the rights of the holders of Existing Ordinary Shares, 0.9p
Deferred Shares and 99p Deferred Shares which arise from the adoption of the new
Articles at the EGM.
Timetable of principal events
Record Date for the Capital Reorganisation 2 October 2006
Publication of the Admission Document 8 September 2006
Latest time and date for receipt of forms of proxy in respect of the EGM
and Class Meetings
Extraordinary General Meeting 10.00 a.m. on 30 September 2006
Class Meeting of holders of Existing Ordinary Shares 10.30 a.m. on 30 September 2006
Class Meeting of holders of 0.9p Deferred Shares 10.45 a.m. on 30 September 2006
Class Meeting of holders of 99p Deferred Shares 11.00 a.m. on 30 September 2006
Date of the EGM and Class Meetings
Extraordinary General Meeting 10.00 a.m. on 2 October 2006
Class Meeting of holders of Existing Ordinary Shares 10.30 a.m. on 2 October 2006
Class Meeting of holders of 0.9p Deferred Shares 10.45 a.m. on 2 October 2006
Class Meeting of holders of 99p Deferred Shares 11.00 a.m. on 2 October 2006
Admission effective and dealings in the New Ordinary Shares and 8.00 a.m. on 3 October 2006
Consideration Shares commence on AIM
CREST stock accounts credited in respect of New Ordinary Shares and 3 October 2006
Consideration Shares
Despatch of definitive share certificates in respect of New Ordinary 10 October 2006
Shares and Consideration Shares to be held in certificated form
Definitions
The following definitions apply throughout this announcement.
'Acquisition' the proposed acquisition by the Company of the entire
issued share capital of ValiRx pursuant to the
Acquisition Agreement and the
October Acquisition Agreement
'Acquisition Agreement' the conditional agreement dated 8 September 2006
between (1) the Concert Party, (2) the Company and
(3) ValiRx, details of which are set out in paragraph
11.14 of Part VII of the Admission Document
'Act' the Companies Act 1985, as amended
'Admission' the admission of the New Ordinary Shares and the
Consideration Shares to trading on AIM becoming
effective in accordance with Rule 6
of the AIM Rules
'Adviser Shares' 3,750,000 Ordinary Shares to be issued to Berkeley
Consultants Limited in lieu of fees, details of which
are set out in paragraph 11.9 of
Part VII of the Admission Document
'AIM' a market operated by the London Stock Exchange
'AIM Rules' the rules governing the admission to and operation of
AIM published by the London Stock Exchange as amended
from time to time
'Articles' the articles of association of the Company, as
amended from time to time
'Azure' or 'the Company' Azure Holdings plc, a company registered in England &
Wales with company number 3916791
'the Board' or 'the Directors' the directors of the Company whose names are set out
on page 8 of the Admission Document
'Call Option Agreement' the call option agreement entered into by (1) the
Company and (2) the Cronos Minority Shareholders in
connection with the ValiRx Option, details of which
are set out in paragraph 11.13 of Part VII of the
Admission Document
'Capital Reorganisation' the reorganisation of the share capital of the
Company, details of which are set out in paragraph 13
of Part I of the Admission Document
'City Code' the City Code on Takeovers and Mergers
'Class Meetings' the separate class meetings of the holders of
Existing Ordinary Shares, 0.9p Deferred Shares and
99p Deferred Shares, notices of which are set out at
the end of the Admission Document
'Combined Code' the principles of Good Governance and Code of Best
Practice maintained by the Financial Reporting
Council
'Completion' completion of the Acquisition
'Concert Party' MCC, MCC Europe, Rosemount Limited, Imperial
Innovations, Dr Satu Vainikka, Dr Jacob Micallef, Dr
George Morris, Ridgecrest,
Dr Cameron Macdonald, Kevin Alexander, Farshid
Zonoozi, Faranak Zonoozi, James Nicholas Thorniley,
Anthony Moore, Vernon Sankey, Kenneth Denos, Sharon
Clayton, Richard Meek, Guy Innes, John Savin, Paul
Rudistill, Nigel Tose, Oliver Bates, Brendan Bates
and Steven Eccles
'Consideration Shares' the 637,500,000 Ordinary Shares to be issued pursuant
to the Acquisition Agreement and the October
Acquisition Agreement, all of which will be created
in accordance with the Act
'Convertible Loan Stock the convertible loan stock instrument entered into by
Instrument 2005' the Company on 9 November 2005, further details of
which are set out in paragraph 11.4 of Part VII of
the Admission Document
'Convertible Loan Stock the convertible loan stock instrument entered into by
Instrument 2008' the Company on 18 July 2006, further details of which
are set out in paragraph 11.5 of Part VII of the
Admission Document
'Convertible Loan Stock Shares' Ordinary Shares issued pursuant to the Convertible
Loan Stock Instrument 2008
'CREST' the relevant system (as defined in the CREST
Regulations) in respect of which CRESTCo Limited is
the Operator (as defined in the CREST Regulations) in
accordance with which securities may be held and
transferred in uncertificated form
'CREST Regulations' the Uncertificated Securities Regulations 2001 (SI
2001 No. 3755) (as amended)
'Cronos' Cronos Therapeutics Limited, a company registered in
England & Wales with company number 05085935
'Cronos Minority Shareholders' Dr Satu Vainikka, Dr Jacob Micallef, Dr George Morris
and Dr Cameron Macdonald
'Current Articles' the articles of association of the Company in effect
at the date of the Admission Document
'Deferred Consideration Shares' 150,000,000 Ordinary Shares which may be issued to
members of the Concert Party pursuant to the
Acquisition Agreement on achievement of certain
milestones, details of which are set-out in paragraph
11.14 of Part VII of the Admission Document
'EGM' or 'Extraordinary General the extraordinary general meeting of the Company,
Meeting' convened for 10.00a.m. on 2 October 2006, notice of
which is set out at the end of the Admission Document
'EMI Scheme' the Enterprise Management Incentive Share Option
Scheme 2001, details of which are set out in
paragraph 14.2 of Part VII of the Admission Document
'Enlarged Group' the Company and, following Admission, ValiRx and
Cronos
'Enlarged Share Capital' the New Ordinary Shares and the Consideration Shares
in issue immediately following the completion of the
Proposals and assuming that there are no further
conversions pursuant to the Convertible Loan Stock
Instrument 2005
'Existing Ordinary Shares' the 127,882,777 ordinary shares of 1p each in the
capital of the Company in issue as at the date of the
Admission Document
'Existing Share Capital' the issued ordinary share capital of the Company at
the date of the Admission Document
'Forms of Proxy' the forms of proxy enclosed with the Admission
Document for use by shareholders of the Company in
connection with the EGM and the Class Meetings
'FSMA' the Financial Services and Markets Act 2000 (as
amended)
'Funding' a total sum of £1,700,000 in cleared funds to be
invested as to £1,200,000 in respect of subscriptions
for Loan Stock 2008 and as to £500,000 in respect of
subscriptions for ValiRx Loan Stock, in respect of
which undertakings to
subscribe have been received, details of which are
set out in paragraphs 11.6 to 11.8 and 11.18 of Part
VII of the Admission Document
'Imperial Innovations' Imperial Innovations Limited
'Loan Stock 2008' loan stock to be issued by the Company pursuant to
the Convertible Loan Stock Instrument 2008
'Locked-In Shareholders' Rosemount Limited, MCC, Dr Satu Vainikka, MCC Europe,
Dr Jacob Micallef, Dr George Morris, Ridgecrest, Dr
Cameron Macdonald, Kevin Alexander, Anthony Moore,
Barry Gold and Gerald Desler
'London Stock Exchange' London Stock Exchange plc
MCC' Moore, Clayton & Co Inc.
'MCC Europe' MCC Europe Limited, a wholly owned subsidiary of MCC
'MCC Warrant Shares' 13,710,602 Ordinary Shares to be issued to MCC Europe
pursuant to the exercise of the MCC Warrants detailed
in paragraph 11.16 of Part VII of the Admission
Document
'Morphogenesis' Morphogenesis Inc., a company incorporated under the
laws of the State of Florida
'Morphogenesis Shares' The shares of common stock to be transferred to the
company pursuant to the agreements described in
paragraphs 11.21 and 11.22 of Part VII of the
Admission Document
'New Ordinary Shares' ordinary shares of 0.2p each in the capital of the
Company in issue following the Capital
Reorganisation, the issue of Convertible Loan
Stock Shares and the issue of Adviser Shares, all of
which are to be created in accordance with the Act
'Nominated Adviser Agreement' the Agreement dated 11 May 2006 between (1) the
Company and (2) WH Ireland, further details of which
are set out in paragraph 11.1 of Part VII of the
Admission Document
'Notices' respectively the notices of EGM and the Class
Meetings set out at the end of the Admission Document
'October Acquisition Agreement' the conditional agreement dated 8 September 2006
between (1) the Company and (2) October Investments
Limited, details of which are set out in paragraph
11.15 of Part VII of the Admission Document
'Official List' the official list of the UKLA
'Ordinary Shares' ordinary shares of 0.2p each in the capital of the
Company
'Panel' the Panel on Takeovers and Mergers
'Proposals' the Capital Reorganisation, the Acquisition and
Admission
'Proposed Directors' the proposed new directors of the Company to be
appointed on Admission whose names appear on page 8
of the Admission Document
'Prospectus Rules' the Prospectus Rules brought into effect on 1 July
2005 pursuant to Commission Regulation (EC) No. 809/
2004
'Reconstruction Share' one ordinary share of 0.1p, following the proposed
sub-division of each ordinary share of 1p each in the
capital of the Company, every two of which are
proposed to be consolidated into one Ordinary Share
'Registrars' Capita Registrars
'Resolutions' the resolutions to be proposed at the EGM and Class
Meetings, set out in the Notices at the end of the
Admission Document
'Restricted Shareholders' Farshid Zonoozi, Faranak Zonoozi, James Thorniley,
Vernon Sankey, Guy Innes, John Savin, Paul Rudisill,
Nigel Tose, Oliver Bates, Brendan Bates, Steven
Eccles, Richard Meek, Sharon Clayton and Kenneth
Denos
'Ridgecrest' Ridgecrest Healthcare Group Inc., a Delaware
corporation whose principal place of business is at
2301 Rosecrans Avenue, Suite 3180,
El Segundo CA90245
'Share Option Schemes' the Unapproved Scheme and the EMI Schemes, further
details of which are set out in paragraph 14 of Part
VII of the Admission Document
'Shareholder' a holder of Existing Ordinary Shares in the capital
of the Company
'UK' the United Kingdom of Great Britain and Northern
Ireland
'UKLA' the United Kingdom Listing Authority, being the
Financial Services Authority acting in its capacity
as the competent authority for the
purposes of Part VI of the Financial Services and
Markets Act 2000
'Unapproved Scheme' the unapproved share option scheme of the Company,
details of which
are set out in paragraph 14 of Part VII of the
Admission Document
'ValiRx' ValiRx Limited, a company registered in England &
Wales with company number 05834378
'ValiRx Loan Stock' loan stock to be issued by ValiRx pursuant to the
ValiRx Loan Stock Instrument
'ValiRx Loan Stock Instrument' the convertible loan stock instrument entered into by
ValiRx on 22 August 2006, further details of which
are set out in paragraph 11.17 of Part VII of the
Admission Document
'ValiRx Option' an option for the Company to acquire the remaining
balance of 39.72 per cent. of Cronos' share capital,
not already held by ValiRx on Admission, pursuant to
the Call Option Agreement
'ValiRx Option Shares' Ordinary Shares proposed to be issued to the Cronos
Minority Shareholders pursuant to the ValiRx Option
'Vendors' MCC, MCC Europe, Rosemount Limited, October
Investments Limited, Imperial Innovations, Dr Satu
Vainikka, Dr Jacob Micallef, Dr George Morris,
Ridgecrest, Dr Cameron Macdonald, Kevin Alexander,
Farshid
Zonoozi, Faranak Zonoozi, James Nicholas Thorniley,
Anthony Moore, Vernon Sankey, Kenneth Denos, Sharon
Clayton, Richard Meek, Guy Innes, John Savin, Paul
Rudisill, Nigel Tose, Oliver Bates, Brendan Bates,
Steven Eccles
'WH Ireland' WH Ireland Limited
'0.9p Deferred Shares' deferred shares of 0.9p each in the capital of the
Company
'99p Deferred Shares' deferred shares of 99p each in the capital of the
Company.
This information is provided by RNS
The company news service from the London Stock Exchange
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