RNS No 2770q
MEDISYS PLC
1st September 1998
MEDISYS PLC
Medisys PLC
("Medisys")
Offer of up to #15,000,000 Convertible Bonds Due 2002 (the "Bonds")
with
15,000 Warrants
Issue Price 100 Per Cent.
Related Acquisition of Lukens Medical Corporation ("Lukens")
On 29th April, 1998 Medisys announced that it had reached agreement to acquire
Lukens (the "Acquisition"), a US manufacturer and marketer of healthcare and
surgical products, for a consideration of approximately US$12.4 million
(approximately #7.4 million).
Medisys announces that it is raising #15 million by way of a placing and open
offer ("Placing and Open Offer"). All holders of ordinary shares of #0.01
each in the share capital of Medisys ("Ordinary Shares") whose names are on
the Medisys register of members on the close of business on the 24th August,
1998, other than certain overseas shareholders ("Qualifying Shareholders")
will be offered Convertible Bonds with Warrants.
Highlights
- The Placing and Open Offer is being managed by Nomura. Of the #15
million principal amount of Bonds available under the Placing and Open
Offer, #10 million has been underwritten by Nomura and #5 million
subscribed to by certain Medisys shareholders.
- Proceeds from the Placing and Open Offer will be used principally to fund
the cash consideration payable for the Acquisition and to provide working
capital for the Medisys Group, as enlarged by the Acquisition.
Terms of the Open Offer
- Under the Open Offer, Qualifying Shareholders are being invited to apply
for Variable Rate Convertible Bonds of #1,000 principal amount (each Bond
with a Warrant which will entitle the holder thereof to subscribe for
4,000 Ordinary Shares) for every 12,000 Ordinary Shares held by them.
- Each Warrant will entitle the holder to subscribe for 4,000 Ordinary
Shares of 1 pence each. The Warrants can be exercised at an initial
exercise price of 15 pence per Ordinary Share on or after 28th September,
1999 up to and including 28th September, 2001.
- All Qualifying Shareholders holding less than 12,000 Ordinary Shares
shall be entitled to apply for one Bond with a Warrant. Application
forms are personal to shareholders and may not be transferred except
to satisfy bona fide market claims.
- The initial Conversion Price of the Bonds, to be fixed on or about 25th
September, 1998 is expected to be between 15 and 35 per cent below the
average of the middle market quotation for an Ordinary Share on the five
dealing days preceding the date on which it is fixed subject to a maximum
of 30 pence per Ordinary Share.
- The Bonds will not bear interest until 28th September, 2000, from which
date they will bear interest at a rate of 5 per cent per annum to 28th
September, 2001 and thereafter at a rate of between 8 and 12 per cent per
annum (such rate to be fixed on or about 25th September, 1998).
Enquiries:
Medisys PLC Today: 0171 457 2345
David Wong, Chief Executive Officer Thereafter: 01394 445914
Kurt Amundson, President &
Chief Operating Officer
Nomura International plc Tel: 0171 521 2000
David Porter, Director
Henry Ansbacher & Co. Limited Tel: 0171 283 2500
Toby Hayward, Director
Gavin Anderson & Company Tel: 0171 457 2345
David Yates / Sophie Pender-Cudlip
About Medisys PLC
Medisys develops, manufactures and markets innovative medical devices and
products serving the point-of-care diagnostic and medical supplies and waste
disposal markets. Medisys has entered into a conditional agreement to acquire
Lukens and, following the Acquisition, Medisys will consist of two core
operating divisions: (i) a diagnostics division; and (ii) a medical supplies
and safety division.
Diagnostics Division
Hypoguard Limited ("Hypoguard") represents Medisys' diagnostic operations,
with responsibility for marketing throughout the world Hypoguard's glucose
strip products and other diagnostic products as they are launched or acquired.
Hypoguard has identified the strongest growth opportunity in exploiting its
strip manufacturing and marketing expertise to develop a series of alternative
point-of-care diagnostic products, while expanding its technology platform to
other technologies such as biosensors.
Medical Supplies & Safety Division
Needle Incinerator Company Limited ("NIC") is a medical systems company,
focusing on developing devices for the on-site disposal of medical
biohazardous waste. The specific market currently being targeted by NIC is
the disposal of hypodermic and other needles through the development and
marketing of a needle disposal system (known as the "NicSafe System") which
has been designed to address the issues of needlestick injury to healthcare
workers and the environmental impact of current methods of needle disposal.
About Lukens
Lukens is engaged in the design, development, manufacturing and marketing of
medical supplies. These include:
- wound closure products for use in the medical industry, such as suture
products and bone wax;
- finger-prick devices, known as lancets, used by diabetics to draw small
amounts of blood;
- infection control kits which contain various items used in medical and
scientific facilities to clean up blood and other bodily fluid spills;
and
- a product line consisting of sharps disposal containers for the safe
disposal of used sharps, such as hypodermic needles, scalpels, blades,
lancets and suture needles.
Reasons for the Acquisition
The Directors believe that the acquisition of Lukens will bring the following
benefits:
- complementary products in the medical supplies and medical waste disposal
and safety markets;
- access to a US operating base with an established infrastructure for
manufacturing, distribution and administration;
- the ability to integrate NIC products into Lukens' operating management
to provide cost savings on the development of infrastructure and enhance
the distribution network;
- the creation of a medical supplies and safety division with a range of
products in medical safety; and
- access to the low cost manufacturing facilities of Lukens in Cochin,
India.
The Board intends that, following completion of the Acquisition, the
operations of Lukens and NIC will be integrated to form the medical supplies
and safety division.
Medisys PLC
("Medisys")
Offer of up to #15,000,000 Convertible Bonds Due 2002 (the "Bonds")
with
15,000 Warrants
Issue Price 100 Per Cent.
Related Acquisition of Lukens Medical Corporation ("Lukens")
Introduction
The Board of Medisys announces today that it is raising #15 million (before
expenses) by way of a placing and open offer ("Placing and Open Offer") to
Qualifying Shareholders of one Variable Rate Convertible Bond of #1,000
principal amount (each Bond with a Warrant which will entitle the holder to
subscribe for 4,000 Ordinary Shares) for every 12,000 Ordinary Shares held by
them.
The money is being raised to provide additional finance for Medisys in order
to:
- fund the cash consideration payable for the acquisition of Lukens (the
"Acquisition"); and
- provide working capital for the Medisys Group as enlarged by the
Acquisition.
The issue of Bonds with Warrants represents an advantageous form of medium
term financing on competitive terms when compared to debt capital or an equity
issue by way of rights. For instance:
- the book-building exercise will provide Medisys with an expanded
institutional shareholder base; and
- the Warrants provide an additional source of funding to Medisys in the
future.
All of the Bonds and Warrants are being offered to Qualifying Shareholders by
way of a Placing and Open Offer being made by the Company. Under the Placing
and Open Offer, Qualifying Shareholders are being invited to apply for one
Variable Rate Convertible Bond of #1,000 principal amount (each Bond with a
Warrant which will entitle the holder to subscribe for 4,000 Ordinary Shares)
for every 12,000 Ordinary Shares held on 24th August, 1998.
Entitlements under the Placing and Open Offer which are not taken up by
Qualifying Shareholders will be offered to institutional investors pursuant to
the Placing.
The Placing and Open Offer
The Company is inviting Qualifying Shareholders, subject to the terms and
conditions set out in the Prospectus and in the Application Form, to apply for
Bonds with Warrants at a price equal to 100 per cent. of the principal amount
of the Bonds, payable in full on application and free of all expenses, on the
following basis:
One Variable Rate Convertible Bond of #1,000 principal amount (each Bond with
a Warrant which will entitle the holder thereof to subscribe for 4,000
Ordinary Shares) for every 12,000 Ordinary Shares
held at the close of business on 24th August, 1998 and so in proportion for
any greater number of Ordinary Shares then held. Qualifying Shareholders'
maximum entitlements will be shown on the Application Form which they will
receive. If the number of Bonds applied for by an applicant exceeds that
applicant's maximum pro rata entitlement, the applicant will be deemed to have
applied for his maximum pro rata entitlement. Applicants will only be entitled
to subscribe for whole numbers of Bonds (in whole multiples of #1,000) and
fractions will not be issued but will be rounded down to the nearest whole
number of Bonds except that any Qualifying Shareholder holding less than
12,000 Ordinary Shares, shall be entitled to apply for one Bond with a
Warrant. Applications and payment must be received by 3.00pm on 23rd
September, 1998.
Qualifying Shareholders should be aware that the Placing and Open Offer is not
a rights issue and that Bonds not applied for under the Placing and Open Offer
will not be sold in the market for the benefit of those who do not apply under
the Placing and Open Offer. Entitlements under the Placing and Open Offer
which are not taken up by Qualifying Shareholders in the Placing and Open
Offer will be offered to institutional investors pursuant to the Placing.
The issue of the Bonds with Warrants has been underwritten by Nomura to the
extent of #10 million principal amount of Bonds and Warrants. Certain
shareholders, including certain directors of Medisys (or companies controlled
by their family trusts) have given irrevocable undertakings to Medisys and
Nomura to subscribe for up to an aggregate of #5 million principal amount of
Bonds with Warrants.
Shareholders should note in relation to the Bonds and the Warrants that:
- the Bonds are in the denomination of #1,000 principal amount each and are
therefore likely to be tradable in relatively large units;
- the Bonds and Warrants will be held in permanent global form for the
convenience of institutional investors who trade through Euroclear and
Cedel;
- Qualifying Shareholders will not be able to hold Bonds or Warrants unless
they have an account with Euroclear or Cedel or access to such accounts.
Qualifying Shareholders should consult their independent financial
adviser or bank manager;
- application has been made for the Bonds and the Warrants to be listed
separately on the Luxembourg Stock Exchange. No application will be made
for the Bonds or the Warrants to be listed on the Official List or
admitted to trading on AIM; and
- the market price of the Bonds and Warrants will not depend solely on the
results of Medisys, but will also be influenced by changes in prevailing
interest rates.
The Placing and Open Offer is conditional on the Underwriting Agreement dated
27th August, 1998 becoming unconditional in all respects by no later than 28th
September, 1998 (or such other date as Medisys and Nomura may agree) and not
having been terminated in accordance with its terms.
The Bonds and Warrants
(a) Terms and Conditions
A summary of terms of the Bonds and the Warrants is set out in Appendix I -
see attached.
(b) Pricing and Book-building
The price at which the Bonds may be converted into Ordinary Shares and the
rate at which Bonds bear interest from 28th September, 2001 have not yet been
fixed. The final terms will be fixed following completion of the book-
building process whereby Nomura will seek from prospective institutional
investors non-binding indications of interest in subscribing for Bonds with
Warrants pursuant to the Placing.
It is expected that the book building process will close on or before 25th
September, 1998. The Conversion Price and the interest rate will be determined
and announced and a supplementary prospectus delivered to those Qualifying
Shareholders who have applied to subscribe for Bonds with Warrants. In
determining the Conversion Price and the interest rate, the Company and Nomura
will have regard to a number of factors, including the prevailing market
conditions, the demand for the Bonds with Warrants from Qualifying
Shareholders and the non-binding indications of interest from potential
institutional investors as well as the need to establish an orderly after-
market in the Bonds and the Warrants.
As the exact Conversion Price and the interest rate from 28th September, 2001
will not be determined until after the Open Offer has closed, Qualifying
Shareholders will not know the exact Conversion Price or such interest rate at
the time that they apply for Bonds with Warrants. A Qualifying Shareholder
who completes and returns an Application Form in accordance with the terms and
conditions of the Open Offer will nevertheless be bound by such application to
accept Bonds that have a Conversion Price and such interest rate fixed in
accordance with the book-building process.
(c) Underwriting
Nomura has agreed, pursuant to an Underwriting Agreement dated 27th August
1998, with Medisys, subject to the satisfaction of certain conditions, to
subscribe and pay for, or to procure subscriptions and payment for, #10
million in aggregate principal amount of the Bonds with a corresponding number
of Warrants less the aggregate principal amount of Bonds with Warrants
subscribed by shareholders in excess of #5 million.
The Underwriting Agreement provides for the Conversion Price for the Bonds and
the interest rate from 28th September, 2001 to 28th September, 2002 to be
fixed by Nomura after consultation with Medisys.
Extraordinary General Meeting
An Extraordinary General Meeting will be held at 10.00am on 24th September,
1998 at which resolutions will be proposed for the implementation of the
Acquisition, the issue of the Bonds with Warrants and in connection with the
second tranche of options granted to Mr. Amundson, one of Medisys' directors.
Recommendation
The directors of Medisys (the "Directors"), who have been advised by Nomura,
consider that the Acquisition, the Placing and Open Offer and the related
proposed increase in Medisys' borrowing powers are in the best interests of
Medisys and its shareholders as a whole. Accordingly, the Directors
unanimously recommend shareholders to vote in favour of the resolutions to be
proposed at the Extraordinary General Meeting. Certain of the Directors and
certain other Shareholders have irrevocably undertaken to vote in favour of
the resolutions to be proposed at the Extraordinary General Meeting in respect
of their own beneficial shareholdings which amount, in aggregate, to
92,805,133 Shares (representing approximately 54.7 per cent of the existing
issued ordinary share capital of the Company.) In providing financial advice
in relation to the terms of the Acquisition and the Placing and Open Offer,
Nomura has taken into account the Directors' commercial assessment of the
proposed transactions.
Expected timetable
Record Date Close of business on 24th
August, 1998
Latest time and date for splitting 3pm on 21st September, 1998
of Application Forms
(to satisfy bona fide market
claims only)
Latest time and date for receipt 3pm on 23rd September, 1998
of completed Application Forms
Extraordinary General Meeting 10am on 24th September, 1998
Announcement of the result on or before 25th September,
of the Open Offer 1998
Announcement of the final on or before 25th September,
terms of the Bonds 1998
Supplementary Prospectus on or before 28th September,
containing the final terms 1998
of the Bonds despatched to
the subscribers for the Bonds
Listing of, and commencement 28th September, 1998
of dealings in, the Bonds and
the Warrants on the
Luxembourg Stock Exchange
Application forms despatched 1st September 1998
Appendix I: The Offer
The Offer
The Bonds and Warrants
Securities offered #15,000,000 aggregate principal amount of
Variable Rate Convertible Bonds due 2002
with 15,000 Warrants, each Warrant entitling
the holder to subscribe for 4,000 Ordinary
Shares.
Issuer Medisys PLC.
Bonds
Form and The Bonds will be in the denomination of
Denomination #1,000 each and will be represented by a
Global Bond in bearer form.
The Bonds will not be issuable in definitive
form except in the limited circumstances set
out in the Prospectus.
Issue Price 100 per cent. of the principal amount of the
Bonds.
Interest The Bonds will not bear interest until 28th
September, 2000, from which date they will
bear interest at the rate of 5 per cent.
per annum to 28th September, 2001
and thereafter at the rate of between 8 and
12 per cent. per annum (to be determined on
or about 25th September,1998), payable
semi-annually in arrear on 28th March
and 28th September in each year.
Maturity Date 28th September, 2002.
Conversion Period On and after 28th September, 1998 and up to
the close of business on 28th September,
2002.
Conversion Price The initial conversion price will be fixed
on or about 25th September, 1998 and is
expected to be between 15 and 35 per cent.
below the average of the middle market
quotation for an Ordinary Share as derived
from the Official List for the five dealing
days preceding the date on which the price
is fixed subject to a maximum f #0.30 per
Ordinary Share. The Conversion Price is
subject to adjustment for, among other
things, subdivision or consolidation of
Ordinary Shares, bonus issues, rights issues
and other dilutive events.
Exercise of Certain restrictions will be applicable on
Conversion Right conversion of the Bonds and will be set out
fully in the Prospectus.
Ranking The Bonds will constitute direct,
unconditional and (subject to the provisions
of "Conditions of the Bonds - Negative
Pledge" set out in the Prospectus)
unsecured obligations of the Company and
(subject as aforesaid) will rank pari passu
with all other unsecured and unsubordinated
obligations of Medisys, present and future,
subject to mandatory provisions of law
relating to creditors' rights generally.
Negative Pledge Medisys will give a negative pledge covenant
in relation to the Bonds relating to itself
and its subsidiaries.
Trustee for the Bankers Trustee Company Limited.
holders of the
Bonds
Principal Paying Bankers Trust Company.
Agent
Redemption at the Medisys may redeem the Bonds, in whole but
Option of the not in part, at their principal amount,
Company plus accrued interest, on or
after 28th September, 2000 provided that the
ratio of the middle market quotation for an
Ordinary Share to the then current Conversion
Price has been the same as or greater than
the ratio of #0.80 to the initial Conversion
Price for a period of 30 consecutive dealing
days, the last of which ends five days before
the date of the notice of redemption.
Medisys may require that any Bonds
converted after publication of such a notice
of redemption be settled by payment of a cash
alternative rather than by physical delivery
of Ordinary Shares.
Tax Redemption In the event of certain tax law changes
requiring the payment of additional amounts
as described in the Prospectus, the Bonds are
redeemable at the option of Medisys in whole
(but not in part) at any time at a redemption
price equal to the sum of 100 per cent. of
the principal amount thereof and accrued
interest, if any, to the date fixed for
redemption.
Governing Law English law.
Warrants
Form The Warrants will be represented by a Global
Warrant in bearer form.
The Warrants will not be issuable in
definitive form except in the limited
circumstances set out under "Provisions
relating to the Warrants while in global
form" in the Prospectus.
Exercise Price The initial exercise price will be #0.15 per
Ordinary Share subject to adjustment for,
among other things, sub-division or
consolidation of Ordinary Shares, bonus
issues, rights issues and other dilutive
events.
Exercise Period The subscription right under the Warrants
will, subject as provided below, be
exercisable on and after 28th September, 1999
up to and including 28th September, 2001.
Warrant Agents Bankers Trust Company and Bankers Trust
Luxembourg S.A.
Termination of the Medisys may on or after 28th September, 2000
Exercise Period at by notice in writing to the holders of the
the Option of the Warrants terminate the exercise period for
Company the Warrants if the ratio of the middle
market quotation for an Ordinary Share to
the then current Exercise Price has been the
same as or greater than the ratio of #0.80
to the initial Exercise Price for a period
of 30 consecutive dealing days, the last of
which ends five days before the notice of
termination. Medisys may require that any
Ordinary Shares issuable on exercise of
Warrants after publication of such notice of
termination be settled by payment of a cash
alternative rather than by physical delivery
of Ordinary Shares.
Governing Law English law
General
Lock-up Medisys has undertaken with Nomura that,
prior to the expiry of nine months following
the Closing Date, it will not, subject to
certain exceptions, authorise the issue of,
or issue or publicly announce any intention
to issue, any shares or any securities which
are convertible into or exchangeable for or
carry rights to acquire any Ordinary Shares
without the prior written consent of Nomura.
Listing and The issued Ordinary Shares are traded on
Trading AIM. Medisys will use its best endeavours
to cause the Ordinary Shares to be issued on
conversion of the Bonds or exercise of the
Warrants to be traded on AIM (or upon
whichever stock exchange the Ordinary Shares
are traded at such time) promptly after the
issue of such Ordinary Shares. Application
has also been made to list the Bonds and the
Warrants on the Luxembourg Stock Exchange.
With effect from the Closing Date the Bonds
and the Warrants may be traded separately.
Use of Proceeds The net proceeds of the issue of the Bonds
with Warrants (approximately #13.7 million)
will be used to fund the cash consideration
payable under the Acquisition and to provide
additional working capital for the Group as
enlarged by the Acquisition.
END
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