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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Goldshield Grp | LSE:GSD | London | Ordinary Share | GB0002893823 | ORD 5P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 486.25 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS No 0370t GOLDSHIELD GROUP PLC 7 July 1999 Proposed Acquisition of Product Licences and Trademarks from SmithKline Beecham p.l.c. Proposed Placing and Open Offer of 4,022,502 New Ordinary Shares at 410p per Share Goldshield Group plc ("Goldshield" or the "Company"), the profitable, marketing-led, emerging British pharmaceutical company, today announces: The Proposed Acquisition * The proposed acquisition (the "Acquisition") of domestic and international pharmaceutical product licences, know-how, goodwill and trademarks from SmithKline Beecham p.l.c. ("SB") for ten products for an aggregate consideration of #17.0 million of which #6.0 million is payable on Completion. The balance of #11.0 million is payable in two equal instalments, payable on the first and second anniversaries of Completion. * The initial instalment of the consideration will be funded by the proceeds of the placing and open offer (described below). The balance of the proceeds will be placed on deposit pending further acquisitions or use within the business. * The Acquisition will provide the Group with: * an increased income and profit inflow both domestically and internationally; * an established presence in international markets; * a platform for the international expansion of Goldshields existing products; and * additional opportunities to develop the infrastructure necessary to expand Goldshields business in international markets. The Placing and Open Offer * Under the Placing and Open Offer 4,022,502 New Ordinary Shares are to be issued at 410p per share to raise #15.6 million (net of expenses). * Qualifying shareholders may apply for New Ordinary Shares on a pro rata entitlement of 1 New Ordinary Share for every 8 Ordinary Shares. Ajit Patel, Chairman and Chief Executive of Goldshield said today: "We are delighted to be able to announce the Acquisition, which represents a major opportunity to expand our business, both domestically and internationally. We are also very pleased with the support we have received from institutional investors for the related Placing and Open Offer." Contact: Goldshield Group plc 0181 649 8500 Ajit Patel, Chairman & Chief Executive Buchanan Communications 0171 466 5000 Andy Yeo/Tom Gadsby West LB Panmure 0171 638 4010 Christopher Collins/Ronald Openshaw SmithKline Beecham p.l.c. 0181 975 2873 Alan Archer Introduction Goldshield announces that it has entered into a conditional agreement with SmithKline Beecham p.l.c. to purchase the product licences and trademarks to certain pharmaceutical products for a consideration of #17.0 million, to be satisfied in cash. In view of the size of the Acquisition in relation to the size of Goldshield, the Acquisition is conditional upon, inter alia, the approval of Shareholders at the EGM. Goldshield also announces that it proposes to raise approximately #15.6 million, net of expenses, through a Placing and Open Offer of 4,022,502 New Ordinary Shares, which is being made at 410p per share. Under the Placing and Open Offer, 2,716,215 New Ordinary Shares are being conditionally placed with institutional investors subject to claw back at the Issue Price by Qualifying Shareholders under an Open Offer on the basis of 1 New Ordinary Share for every 8 Ordinary Shares held on the Record Date. Certain directors have irrevocably agreed not to make application for their entitlement to New Ordinary Shares under the Open Offer (whether in whole or in part) in respect of 1,062,537 New Ordinary Shares and their entitlements to such New Ordinary Shares are being placed firm with institutional investors as part of the Placing. In addition, certain directors of the Company have irrevocably undertaken to take up their entitlements to 243,750 New Ordinary Shares under the Open Offer. The Placing has been fully underwritten by WestLB Panmure Limited ("WestLB Panmure"). The proceeds from the Placing and Open Offer, which is conditional, inter alia, upon completion of the Acquisition, will be partly used to fund the consideration payable on completion of the Acquisition. The directors of the Company (the "Directors") are currently involved in discussions with regard to a number of other potential acquisitions which may or may not reach completion. The Directors consider that having the balance of the proceeds of the Placing and Open Offer in addition to existing cash resources, bank and other facilities, will put the Company in a strong position to take advantage of these acquisition opportunities. The balance of the proceeds of the Placing and Open Offer will be placed on deposit pending further acquisitions or use within the business. Goldshield also announced its preliminary audited financial results for the year ended 31 March 1999 today. Information on the Acquisition Goldshield has agreed, subject to, inter alia, Admission, the Placing and Open Offer and shareholder approval, to purchase the licences, technical know-how, marketing and distribution rights, goodwill and trademarks of 10 pharmaceutical products, from SB for a total consideration of #17.0 million. The consideration will be paid in three instalments, with the first instalment of #6.0 million payable on completion of the acquisition of the first eight products. The balance will be split into two equal instalments payable on the first and second anniversaries thereof. The Acquisition will give Goldshield product licences and marketing and distribution rights in 43 countries, including: Australia, Finland, Israel, the Netherlands, New Zealand, Pakistan, the Republic of Ireland, the Republic of South Africa, Saudi Arabia, Spain and Sweden. The Company already owns the UK rights to distribute and market three of the products for which it is acquiring international rights and will be acquiring the UK rights to three further products. The following table sets out an analysis of sales of the products being acquired (excluding Fenbid and Parnate) by location of customer and location of company manufacturing the product. Analysis of Sales (excluding Fenbid and Parnate) #000 #000 for the year ended 31 December 1998 By Customer By Company* UK 1,187 3,052 Continental 2,328 2,211 Rest of the World 3,876 2,128 7,391 7,391 *Indicates the country in which products are currently manufactured and from which domestic and export markets are sourced. SB has undertaken to support the manufacture and distribution of the products for a period of between two and five years depending on the territory following completion of the acquisition of the relevant product. During this period SB will facilitate the transfer of technical and manufacturing know-how to Goldshield and, under the direction of Goldshield, ensure the assignment of trademarks and licences to Goldshield or to Goldshields nominated assignee. The Directors believe that these products will enhance and complement the Companys existing product portfolio. The products fall into four broad therapeutic areas, namely cardiovascular disease, gastro-intestinal disease (GI), central nervous system disease (CNS), and pain and arthritic disorders. Total Sales of 8 Products for the Year Ended 31 December 1998 Therapeutic Area Product Sales #000 Cardiovascular Dyazide 2,096 Cardiovascular Dibenyline 844 Cardiovascular Dyta-Urese 411 CNS Stelazine 1,344 CNS Stelabid 302 GI Dyspamet 1,022 Pain/Arthritis Ecotrin 156 Pain/Arthritis Ridaura 1,216 Total 7,391 * Sales figures are for the markets in respect of which product licences and marketing rights are due to be acquired under the Acquisition Agreement and are based on SBs average exchange rate for the period in respect of sales in currencies other than pounds sterling. In addition to the eight products detailed in the above table, the Acquisition Agreement provides for the Company to obtain SBs rights to Fenbid and Parnate in certain territories. The Agreement makes provision for a cash adjustment should the combined sales of Fenbid and Parnate in such territories for the year ended 31 December 1998 have fallen short of or exceeded #400,000. Completion of the acquisition of Fenbid and Parnate will take place three months after the acquisition of the eight other products. Dyazide is a diuretic that has a well established place in the treatment of hypertension and fluid retention. Product licences and marketing rights are being acquired principally for the UK, the Republic of Ireland, the Netherlands, Australia and the Republic of South Africa, together with a further 19 territories. The Directors believe this product will complement Goldshields existing range of cardiovascular products. Dyta-Urese has similar indications to Dyazide, but uses a different active drug substance. Product licences and marketing rights are principally being acquired for the Netherlands. Dibenyline is used in the treatment of acute hypertensive episodes. Goldshield currently owns the UK rights for Dibenyline and the Directors believe that the Acquisition will enable the Company to market this product to an extended customer base. Product licences and marketing rights are principally being acquired for Israel, together with a further 17 territories. Stelazine and Stelabid are based on the tranquiliser trifluoperazine which is used in the treatment of a variety of anxiety and psychotic states and also as an anti-emetic. The Company currently markets and distributes Stelazine in the UK and is acquiring product licences and marketing rights to Stelazine in Spain, Saudi Arabia, Australia and the Republic of South Africa, together with a further 20 territories. In the case of Stelabid, product licences and marketing rights are being acquired for Pakistan and a further two territories. Dyspamet is used in the treatment and prevention of peptic ulcers and conditions where reduction of gastric acid secretion is likely to be beneficial. Product licences and marketing rights are being acquired for the UK, Saudi Arabia, United Arab Emirates and Pakistan together with a further 9 territories. Ridaura is a gold salt that is used in the treatment of active, progressive rheumatoid arthritis. Product licences and marketing rights are being acquired for Austria, Finland, Sweden and Australia, together with a further 16 territories. Ecotrin is a brand of Aspirin. Product licences and marketing rights are being acquired for the Republic of South Africa and a further three territories. Fenbid is used in the treatment of pain and arthritis, which is also currently marketed and distributed by Goldshield in the UK. The acquisition of the trademarks for additional territories offers the potential for line extensions with the Companys Fenbid Gel in certain territories. Parnate is an anti-depressant used in treating certain specific types of depression and will complement the Companys existing CNS range. Reasons for the Acquisition The Acquisition will expand the Companys product portfolio. The Directors believe that although product sales have declined over the past two years the Companys marketing skills will improve returns from the acquired products. The Directors believe that the value to the Company justifies the price paid by it. Additionally, these purchases will open up well established overseas marketing and distribution channels to the Groups existing pharmaceutical products. In particular, the Directors believe that the Acquisition will provide the Group with: * an increased income and profit inflow both domestically and internationally; * an established presence in international markets; * a platform for the international expansion of Goldshields existing products; and * additional opportunities to develop the infrastructure necessary to expand Goldshields business in international markets. Finally, the Directors believe that the Acquisition will complement and add value to the existing pharmaceutical portfolio through synergies in marketing and sales and more efficient use of resources. Management of the Acquisition The integration of the Acquisition will be managed in phases. The Companys management has considerable knowledge and experience of several of the international markets for which products are being acquired and this will be further strengthened by new appointments as appropriate. SB has agreed to continue to manage the distribution of the products for periods of 2-5 years depending on the complexity of the market concerned. Sales and marketing of these products in the UK and exports from the UK will be integrated first. This will be followed by integration of the European markets and finally, within 5 years, the more complex territories of Australia, the Republic of South Africa, New Zealand and Pakistan, which will require a local presence. The Directors believe that the structure of the Acquisition is sufficiently flexible and will allow management time for the effective integration of the acquired portfolio. Funding the Acquisition The initial consideration for the Acquisition of #6.0 million is payable upon Completion and will be satisfied by part of the proceeds of the Placing and Open Offer, which will raise #15.6 million (net of expenses). The Directors currently anticipate that the balance of the consideration will be funded through the Groups cash resources, bank and other facilities in existence at the time the instalments become payable. The balance of the consideration of #11.0 million is secured by a guarantee from NatWest, which has agreed to grant the Company further loan facilities. Under the terms of the facility provided by NatWest, Goldshield will be required to execute a counter-indemnity in favour of NatWest in respect of any claims made against NatWest under the guarantee. Principal terms of the Placing and Open Offer Under the Placing and Open Offer 4,022,502 New Ordinary Shares are to be issued at 410p per share to raise #15.6 million. This price represents a discount of 3.8 per cent. to a price of 426p per share, being the middle market closing price of the Ordinary Shares, as derived from the Daily Official List, on 6 July 1999 being the last practicable date before publication of this document. WestLB Panmure has fully underwritten the Placing and Open Offer. Application has now been made to the London Stock Exchange for the admission of the 4,022,502 New Ordinary Shares to the Official List. It is expected that dealings in the New Ordinary Shares will commence on 5 August 1999. In order to give existing shareholders the opportunity to participate in the issue of the New Ordinary Shares, Goldshield has arranged for WestLB Panmure as its agent to invite applications from Qualifying Shareholders to acquire New Ordinary Shares at the Placing Price under the Open Offer. Qualifying Shareholders may apply for as many New Ordinary Shares as they wish up to their maximum pro rata entitlement on the basis of: 1 New Ordinary Share for every 8 existing Ordinary Shares held at the Record Date being 30 June 1999 and so in proportion for any greater number of Ordinary Shares then held. Applications will be disregarded to the extent that they exceed the applicants respective pro rata entitlements and any Qualifying Shareholder so applying will be deemed to have applied only for their maximum entitlement. The New Ordinary Shares will rank pari passu with the existing issued Ordinary Shares, save that they will not rank for the final dividend of 0.92p per share in respect of the year ended 31 March 1999, which is expected to be payable on 6 August 1999 to Shareholders on the register at the close of business on 23 July 1999. Individual entitlements will be rounded down to the nearest whole number of New Ordinary Shares. Fractions of New Ordinary Shares that would otherwise arise will be aggregated and placed with institutional investors for the benefit of the Company. Certain Directors (whether in whole or in part) have irrevocably agreed not to make application for their entitlement to New Ordinary Shares under the Open Offer in respect of an aggregate of 1,062,537 New Ordinary Shares and their entitlements to such New Ordinary Shares are being placed firm by WestLB Panmure with institutional investors as part of the Placing. In addition, certain of the Directors have irrevocably undertaken to take up their entitlements to New Ordinary Shares under the Open Offer. Use of Proceeds of the Placing and Open Offer The Directors propose to raise approximately #15.6 million, net of expenses, by way of the Placing and Open Offer of which #6.0 million will be used to satisfy the initial consideration under the Acquisition. The Directors are currently involved in discussions with regard to a number of other potential acquisitions which may or may not reach completion. The Directors consider that having the balance of the proceeds of the Placing and Open Offer in addition to existing cash resources, bank and other facilities, will put the Company in a strong position to take advantage of these acquisition opportunities. Extraordinary General Meeting & action to be taken The Acquisition is subject to the approval of Shareholders at the EGM. Accordingly a circular to shareholders describing the Acquisition and the Placing and Open Offer and including a notice convening an EGM of the Company to be held at 10.15 a.m. on 30 July 1999 or, if later, immediately after the conclusion of the Annual General Meeting of the Company to be held earlier that day at 22 Tudor Street, London EC4Y OJJ is being sent to shareholders today. Applications in respect of the Open Offer must be received by 3p.m. 28 July 1999. Application forms are personal to shareholders and may not be transferred except to satisfy bona fida market claims. This announcement is based upon a prospectus which is expected to be posted to shareholders later today. This announcement doesnt necessarily contain all pertinent information relevant to an investment decision. All items referred to in this announcement have been used in the same context as those set out in the "definition sections" of the prospectus. For further information please contact the Company or WestLB Panmure, New Broad Street House, 35 New Broad Street, London, EC2M 1SQ. END ACQAILLDDFIDIAA
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