Restructure update
12 Maio 2009 - 1:44PM
UK Regulatory
TIDMYRK
RNS Number : 1382S
York Pharma plc
12 May 2009
12 May 2009
York Pharma plc
(YRK.L) ("York" or the "Company")
Restructure update and divestment of French subsidiary
In January 2009, York announced that its newly appointed management team was
conducting a strategic review to investigate options to restructure the
Company's operations.
Following completion of the review, the Board has now decided to simplify the
ownership of its international distribution partnership network. This is being
achieved through the reorganisation of the group's operations in France, Belgium
and Luxembourg (the "Territory"), resulting in the divestment today of its 51%
owned OTC focused subsidiary, ACM Crawford SAS ("ACM"), to ACM's minority
shareholders, Thierry Leveillé and Sebastien Baudinot (the "Minority
Shareholders"). ACM will continue to represent the Company as exclusive
distributor in the Territory focused on the marketing of York's prescription
brands.
Background to divestment
The Company's 51% interest in ACM was acquired as one of the assets of Derms
Development Limited in November 2007. ACM is a sales and marketing business,
which has been engaged in selling the Company's products in the Territory and
which took prime responsibility for managing the Company's international
distributor network. ACM had also developed a range of dermacosmetic products
which it marketed principally in France.
The various rights and management responsibilities of each of the Company and
the Minority Shareholders in relation to ACM were set out in a Shareholders'
Agreement entered into at the time of the establishment of the joint ownership
and subsequently modified by the parties during 2008 (the "SHA"). The SHA
contained provisions creating an obligation on the Company to acquire the
outstanding minority interest in ACM of 49% for a pre-agreed aggregate amount of
EUR6.25m. The SHA provided that any failure by the Company to complete the
acquisition and remit the requisite payments in relation to the minority stake
on time would entitle the Minority Shareholders to trigger a call option,
enabling them to acquire the Company's 51% shareholding in ACM for a nominal sum
of EUR2,550 (representing an amount of EUR10 per share) and to the write off of all
intercompany debts owed by ACM to the Company.
Divestment of ACM
As the next step in implementing the revised corporate strategy, the Company has
negotiated and entered into a separation agreement with ACM, the key terms of
which are as follows:
* An amount of EUR777,000 standing to the balance of an inter-company debt owed by
ACM to the Company has, with effect immediately prior to the conduct of the
separation, been capitalised through the issuance of 10,500 shares in ACM to the
Company;
* The Company's aggregate interest in ACM (comprising its initial 51% shareholding
together with the additional 10,500 new shares in ACM mentioned above) was
acquired as of today by the Minority Shareholders for a total of EUR23,661 in
cash;
* The balance of all and any intercompany debt owed by ACM to the Company,
totalling in aggregate EUR51,795 has been forgiven;
* The Company's existing rights and interest in two non-prescription dermacosmetic
products, Vitix and Viticolor, have been transferred to ACM;
* Any and all interests held by ACM in the prescription product Zindaclin and in
the Company's international network of distributors have been transferred to the
Company;
* The Company has appointed ACM as its exclusive distributor for three years in
the Territory;
* ACM has granted the Company an option to distribute its products in the US
market; and
* ACM will provide support for future product acquisitions on a success fee basis.
As a result of completing the divestment of its interest in ACM, the Company
will be a prescription dermatology and skin care business, selling products
directly in the UK market and through an international network of distributors
covering 70 countries. Whilst the divestment will result in a lower annual rate
of sales for the Company, it is expected to have a minimal impact on the group's
results (after accounting for the minority interest) and will save the Company
from the requirement to fund the previously agreed purchase price for the
minority interest of EUR6.25m.
The Company's last set of published results was for the interim period of six
months ended on 31 March 2008. The unaudited net assets of ACM at 30 September
2008 were GBP78,811 and its unaudited revenues and loss before taxation for the
eleven months ended 30 September 2008 were GBP2,809,189 and GBP191,748
respectively (Source: Company Management Accounts).
After careful deliberation, the Directors consider, having consulted with the
Company's Nominated Adviser, that the terms of the divestment of ACM are fair
and reasonable insofar as its shareholders are concerned.
Update on possible offer
On 30 March 2009, the Company announced that it had entered into an agreement
with Uluru Inc. ("Uluru") under which Uluru has provided the Company with a
secured revolving credit facility and on 6 April 2009 the Company further
announced that it had also signed a non-binding offer letter with Uluru for
Uluru to acquire the Company. Drawdown of the credit facility is required to
allow the Company to continue trading through the period needed to complete any
formal offer for the Company under the Takeover Code.
In accordance with the requirements of the Takeover Panel, Uluru has been
notified of the divestment of ACM and has confirmed that, in accordance with
Rule 21 of the Takeover Code, it does not consider the divestment to constitute
a frustrating action in relation to the current ongoing discussions between the
parties.
The Board stresses that there can be no certainty that the discussions between
the Company and Uluru will lead to an offer being made for the Company. In the
event that no offer is made for the Company, it will need to raise additional
capital to fund its operating activities and to repay indebtedness in due
course. Shareholders should be aware that if the offer is not completed or if
the Company's capital raising efforts are unsuccessful, this will have a
material adverse effect on the Company's financial position and operations. The
Company will provide a further update as and when appropriate.
Richard Anderson, Chief Executive of York said: "We are pleased that following
the conclusion of this restructuring, the Company will continue to work with ACM
in Continental European markets. The settlement which we have negotiated enables
us to move forward and exploit fully our international Zindaclin franchise,
whilst protecting the Company and its shareholders from the uncertainty which
would have arisen as a result of the contractual obligation of the Company to
acquire the minority interest becoming due."
For more information please contact:
+-----------------------------------------+------------------------------+
| York Pharma plc | Tel: +44 (0) 1908 764020 |
| Richard Anderson, Chief Executive | |
| Officer | |
| Ian Miscampbell, Chief Financial | |
| Officer | |
+-----------------------------------------+------------------------------+
| Collins Stewart Europe Limited | Tel: +44 (0) 207 523 8350 |
| Hugh Field / Adam Cowen | |
+-----------------------------------------+------------------------------+
| FinnCap | Tel: +44 (0) 207 600 1658 |
| Geoff Nash | |
+-----------------------------------------+------------------------------+
| Financial Dynamics | Tel: +44 (0) 207 831 3113 |
| Ben Brewerton / Emma Thompson | |
+-----------------------------------------+------------------------------+
Collins Stewart Europe Limited, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting as Nominated Advisor and
broker to York Pharma plc and will not be responsible to anyone other than York
Pharma plc for providing the protections afforded to clients of Collins Stewart
Europe Limited nor for providing advice in connection with any other matter
referred to herein.
About York Pharma PLC
York Pharma is a pharmaceutical Group, established in 2003, which develops,
markets and supplies branded dermatological products to pharmaceutical
wholesalers, hospitals and general practitioners within the field of
dermatology.
=-o--
This information is provided by RNS
The company news service from the London Stock Exchange
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