Takeover offer for Epigenomics AG
Executive and Supervisory Board of Epigenomics fully support the transaction
Epigenomics AG, Cathay Fortune International Company Limited (CFIC) and Blitz F16-83 GmbH (in the future Summit Hero Holding GmbH, Bidder), a subsidiary of CFIC, have entered into a business combination agreement (BCA) regarding the takeover of Epigenomics by the Bidder. Other than by CFIC, the Bidder will also be indirectly owned by the currently largest shareholder of Epigenomics, Biochain, the strategic partner of Epigenomics and a subsidiary of Team Curis Group.
Pursuant to the BCA, the Bidder has agreed to launch a voluntary public takeover offer pursuant to the German Takeover Act (Wertpapiererwerbs- und Übernahmeangebot, “WpÜG”) to acquire all of the outstanding ordinary shares of Epigenomics AG (“Takeover Offer”).
Under the terms of the BCA, Epigenomics shareholders will be offered 7.52 Euros in cash per each ordinary share. The transaction values Epigenomics’ equity, including net cash, at approximately 171 million Euros and reflects a 49.4% premium to the 3-month volume weighted average share price of 5.03 Euros (as published by Bloomberg.com) prior to announcement and a 51.9% premium to yesterday's XETRA-closing price of 4.95 Euros as well as a 32.0% premium to the highest closing price in the last 12 months. The offer shall be subject to certain closing conditions, including regulatory approval and a minimum acceptance threshold of 75% of all of Epigenomics’ outstanding shares.
The Executive Board and the Supervisory Board of Epigenomics support the transaction. “We fully support the transaction as it delivers immediate value to our shareholders while fostering the long-term prospects of Epigenomics,” said Heino von Prondzynski, Chairman of the Supervisory Board of Epigenomics.
“We are convinced that this transaction is in the best interest of Epigenomics and its shareholders,” stated Greg Hamilton, Chief Executive Officer of Epigenomics. “It provides our company with access to the capital resources necessary to successfully commercialize our innovative products on a global scale. In addition, the transaction will allow us to expand our R&D activities in order to unfold the potential of our unique cancer biomarker technology in the future.” Both Epigenomics and CFIC view the transaction as an opportunity to grow and expand the Company and its workforce.
All members of the Executive Board and the Supervisory Board owning Epigenomics shares intend to accept the takeover offer.
CFIC supports Epigenomics’ strategy
The BCA sets out the purpose and the principal terms of the transaction and the future strategy. The Bidder and CFIC intend to support Epigenomics’ strategy going forward and to promote the business growth of the Company and its position within its area of expertise. In this regard and in order to finance the short-term working capital requirements of Epigenomics, the Bidder and CFIC have agreed to invest, upon the request of Epigenomics and subject to certain conditions, a cash amount of up to about 6.46 million Euros in the Company.
The Bidder and CFIC also intend to maintain the locations of the business operations of the Company's Group and its main business activities at significant locations, including the Company's headquarter in Berlin. The current workforce of Epigenomics is not intended to be reduced as a consequence of the transaction.
Management remains in place
In the event the takeover is successful, the Bidder and CFIC intend to keep the current members of the executive board in place, with Greg Hamilton as CEO of Epigenomics and Dr. Uwe Staub as COO. After closing of the transaction, the Bidder and CFIC plan to amend the composition of the Supervisory Board in order to reflect at least their ownership position in Epigenomics.
Transaction structure
The transaction will be implemented through a voluntary public takeover offer of the Bidder for all outstanding ordinary shares of Epigenomics.
The Bidder expects the offer to commence in May 2017 after approval of the offer document by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungs-aufsicht, “BaFin”). The offer will be subject to certain conditions precedent, including regulatory approval and a minimum acceptance threshold of 75% of all of Epigenomics’ issued shares.
Closing is expected in the summer of 2017.
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