Acquisition

RNS Number:4805U
Maelor PLC
05 April 2007

5 April 2007

                     Maelor plc ("Maelor" or the "Company")

                     Acquisition of Acorus Therapeutics Ltd



The Board of Maelor plc (AIM:MLR), the specialist critical care company, is
pleased to announce the acquisition of specialist pharmaceuticals and devices
company, Acorus Therapeutics Ltd ("Acorus"), for a total consideration of #13
million (subject to adjustment).


The initial cash consideration will be satisfied out of the issue to
institutional investors of 80,000,000 new Ordinary Shares of 10 pence each at 10
pence per share.  A conditional placing will raise #8 million (before estimated
expenses) which was undertaken by Noble & Company Ltd ("Noble"), and was
oversubscribed.  Completion of the acquisition of Acorus is expected to take
place (subject, inter alia, to shareholder approval) on 10 May 2007.


Highlights


*   Maelor has agreed to acquire Acorus, a specialist pharmaceuticals and  
    devices company for a total consideration of #13 million.  The consideration
    comprises #7 million in cash and #1 million of new Ordinary Shares at the
    placing price of 10 pence, together with a #5 million deferred consideration
    payable over five years funded from ongoing cash flow. The deferred 
    component is payable subject to the achievement of minimum sales hurdles


*   Following the completion of a strategic review by Maelor's new management 
    team in mid 2006, the Company has been implementing a strategy of building a 
    hospital specialist medicine business focused on commercialising late stage 
    or launched, and therefore low risk, pharmaceuticals and devices, with a
    focus in critical care and neurology


*   The acquisition of Acorus is in line with the Company's strategy to build a 
    solid platform for further acquisitions and gain additional critical mass to 
    drive shareholder value 


*   Acorus is a successful specialist pharmaceuticals and devices company, which 
    is profitable and growing and which has a portfolio of assets primarily
    focused in critical care and neurology


*   Acorus was established in 2000 and has been built as a virtual company; 
    integration is therefore straightforward and inexpensive


*   The acquisition will create a substantial AIM listed hospital specialist 
    company and will be immediately earnings enhancing.


Commenting on the acquisition Tim Wright CEO said:


"The acquisition of Acorus is a transforming transaction for Maelor, creating a
strong, profitable business with positive cash flow.  The integration risks,
costs and distractions are minimal due to the virtual nature of Acorus and the
combined product portfolios offer a high degree of synergy in terms of customer
base and distribution channels. We now have a product portfolio and pipeline
capable of delivering strong future growth"


Chairman Geoff McMillan said;


"This acquisition is a further demonstration of the commitment of the Board of
Maelor to add shareholder value through the focused strategy communicated last
year and the ability of our new management team to deliver this strategy."


 - Ends -


For further information, call:


Maelor plc

Tim Wright, - 01244 625150


Noble & Company Limited

Matthew Hall - 020 7763 2200


Financial Dynamics

Billy Clegg/Edward Westropp, - 020 7831 3113


5 April 2007


Introduction



Maelor has today announced that it has conditionally agreed to acquire the
entire issued share capital of Acorus. Acorus is a privately owned, UK-based
pharmaceutical company focused on specialist pharmaceuticals and medical
devices. The consideration for the Acquisition is to be satisfied by a cash
payment of #7 million, the issue of 10,000,000 Consideration Shares at a price
of 10 pence per share, and the issue of up to #4.88 million of Loan Notes to the
Vendors. In order to satisfy the cash component of the acquisition price and to
enable it to implement its strategy, the Board is also proposing to raise #8
million (#7.16 million after estimated expenses) by way of the Placing of
80,000,000 new Ordinary Shares at 10 pence per Placing Share.  The Placing has
been arranged by Noble.



The Acquisition constitutes a reverse takeover under the AIM Rules and is
therefore subject to the approval of the shareholders of the Company. Such
approval is being sought at the Extraordinary General Meeting which has been
convened for 4 May 2007.



If the Resolutions are duly passed at the EGM and the other conditions set out
in the Placing Agreement are met, the Enlarged Share Capital will be admitted to
trading on AIM.



Background and reasons for the Acquisition



Following the introduction of a new management team and completion of a
strategic review in 2006, Maelor's Board seeks to transform the Company into a
major player within the specialist pharmaceutical and medical devices market.
The Acquisition is in line with the strategy to build a solid platform for
further acquisitions and to gain additional critical mass to drive shareholder
value.



Acorus is a growing business that to date has been run as a virtual
organisation. The Directors of Acorus believe the Company is approaching a level
that is too large for a virtual business model and consequently, they will be
unable to continue to exploit the upsides of Acorus' product portfolio.



The Directors believe the Acquisition represents a low risk to investors as the
target provides access to a synergistic and profitable product portfolio which
can be easily integrated into Maelor's existing infrastructure. Acorus is cash
generative and with a late stage product portfolio. The Acquisition will enable
cash generation for future growth by means of investment, further acquisitions
and product development.



Information on Maelor



Maelor is a specialist pharmaceuticals and medical devices company, focused in
the critical care market. The Company, which has expertise in developing and
commercialising both pharmaceuticals and medical devices, was admitted to AIM on
21 November 1997.



The new management team is committed to delivering the vision of establishing a
significant business, in hospital specialist medicine initially focused in the
critical care and neurology sectors. This vision will be realised through
aggressive acquisition, development and organic growth of late stage and
launched products, to drive turnover and profit.



The business model is intentionally structured away from expensive and high risk
early stage development to ensure a low risk proposition for Shareholders. In
line with this focus, non-specialist products and early stage technologies in
the portfolio are leveraged through efficient partnerships.



The benefits of focusing on the secondary care market, with an estimated size of
#15 billion within the EU, are the low costs associated with sales and marketing
as well as high value niches, such as critical care. Critical care patients
include those undergoing emergency or elective surgery, who are commonly cared
for in intensive care units and high dependency units and who require support
from a wide range of specialist drugs and devices. Primary customers are
anaesthetists, intensive care specialists and pharmacists, as well as accident &
emergency and neurology physicians.



The new management team took a significant first step in the realisation of its
strategy with the successful re-acquisition and re-launch of Volplex, a product
Maelor originally developed and licensed. The process of re-launching the
product was achieved ahead of schedule and the Company is seeing the benefits of
consistently growing sales in the market. Primarily used in operating theatres
and wards to maintain blood volume, Volplex competes with Gelofusine (B Braun)
the only other succinylated gelatin colloid available in the UK. With
substantial room for market share growth, the management team is confident that
they can continue to win new accounts and grow sales of Volplex.



On completion of the strategic review of the business, the new management team
stated its intention to grow its specialist product portfolio aggressively
through development and acquisition. Recent activities have included
commencement of the development of two new late stage products, ISOplex and
AquiHex as well gaining a licence to sell unlicensed medicines, "specials" and
conclusion of a deal to gain distribution rights for a selection of critical
care fluids.



ISOplex - ISOplex in common with Volplex will be used in situations where an
increase in blood volume is required. ISOplex has been designed to mimic natural
blood plasma, particularly in the balance of electrolytes. The use of these "
isotonic" formulations is an area of significant interest amongst critical care
clinicians. The introduction of ISOplex will support Maelor's strategy of
driving both market share and market size in the gelatin segment of the UK blood
volume replacement market.  Given Maelor's experience and existing data in this
sector it is anticipated that development will be relatively rapid and
inexpensive for a pharmaceutical product. The Company anticipates regulatory
approval by the MHRA for ISOplex by the end of 2008.



Specials - the Company has succeeded in gaining a licence from the MHRA to sell
un- licensed medicines. Generally known as "specials" these products can be
requested by physicians for use in patients where there is a specific
requirement which is presently unmet by any medicine licensed in the UK. In
addition to establishing closer relationships with the critical care community
this strategy will enable Maelor to gauge demand for products and where this
demand is sufficient, progress these products to licence in the UK. The
management team have recently gained distribution rights to a selection of fluid
and volume replacement products from Germany and in addition have recently
developed a new product AquiHex. AquiHex is a topical anti-bacterial product
which will be used in critical care settings.



The management will continue to select strong partners to commercialise the
heritage portfolio of products and technologies that do not fit directly with
the Company's specialist strategy, in particular its catheter flushing solutions
OptiFlo* and Contisol and its proprietary early stage nanotechnology.



The Company's ability to enter into successful partnerships with major
distributors is exemplified by the successful commercialisation of OptiFlo, the
UK brand of the Company's catheter flushing solutions in conjunction with Bard
Limited which has now grown to be the market leading catheter flushing solution
in the UK. ContiSol is the Company's international brand name of this range.



Similarly the management recently licensed part of the Company's proprietary
micelle nanotechnology, which solubilises insoluble active pharmaceuticals, to
Plethora solutions Holdings plc, a specialist urology company. The agreement
involves milestone payments by Plethora during development and royalty payments
on commercialisation. Micelle lidocaine will be developed for interstitial
cystitis, a distressing condition which affects over 2 million women in the US
and the EU.



Maelor is a strong business with a clear, focused strategy and an ambitious,
experienced management team determined to grow rapidly through a strategy of
acquisition, consolidation and organic growth of products and portfolios.



Information on Acorus Therapeutics Limited



Acorus was established in 2000 and commenced trading in 2001, specialising in
acquiring or developing and marketing unique specialist pharmaceuticals and
medical devices. The two founders identified that many important products were
not being developed, and were even discontinued, because the commercial
opportunity is too small for the big pharmaceutical companies. The company has
been run as a virtual organisation, thus making it a straightforward business to
integrate. Acorus's portfolio, which is highly synergistic with Maelor's
portfolio and strategy, is as follows:



Cryogesic - A fast-acting cryo-analgesic that is used in a number of specialist
clinical settings, particularly by anesthetists, a target customer group of
Maelor, to numb the skin before minor procedures. Registered as a medical device
across Europe, the product is available in the UK and Ireland in a range of
presentations and has seen steady growth since introduction, from little
promotion. Recently conducted market research suggests further growth potential
from active promotion and expansion into new specialist niches.



Dermogesic - A non-flammable version of the above product has been developed and
registered across Europe as a medical device.



Haemopressin - A specialist injectable used in critically ill patients suffering
from esophageal varices(uncontrollable bleeding from the oesophagus) and
hepatorenal syndrome, serious conditions affecting critically ill patients with
chronic liver disease. Acorus has distribution rights in the UK and Ireland and
the product is currently progressing through the regulatory process. It has been
successfully launched in Germany.



Mysoline - A long established treatment for epilepsy which sees stable sales in
this segment, as epilepsy sufferers once controlled are unlikely to be changed
to different medications. This is due to the significant physical and life-style
distress that experiencing a fit can cause, for example, the loss of a driving
licence.



Increasing use is being seen in the field of Essential Tremor, a condition
managed by specialist neurologists which affects 1 in 20-25 of over 40 year
olds. Mysoline is one of only two treatments recommended for managing this
chronic condition. No direct promotion is currently undertaken in this area and
market research suggests the potential for further growth. Acorus markets the
brand directly in the UK and Ireland and through a network of distributors in
territories across Europe.



Gentispray - A spray treatment in late stage (phase III) development for the
treatment of outer ear infections. The product combines the most commonly used
formulation of ear drops, in a popular ear spray delivery system to create a new
product.



Specials - Like Maelor, Acorus supplies unlicensed medicines for areas of unmet
need. Products in this portfolio include an antidepressant syrup for patients
that are unable to take tablets, Acoranil, (Which is progressing through the
regulatory system) and 5-FU an oral treatment for cancer. Acorus is a profitable
business, with low overheads. All operational tasks such as research,
development, manufacturing and logistics are contracted out to third party
companies.



Strategy of the Enlarged Group



In the opinion of the Board the acquisition of Acorus by Maelor, is directly
aligned with Maelor's stated strategy of building a focused specialist
pharmaceutical and medical devices business. The Board believes that the
Enlarged Group will provide a platform to build a comprehensive specialist
secondary care portfolio through rapid organic and acquisitive growth.



The growth strategy will therefore be based upon driving sales and developing
further products from the existing portfolio, as has been demonstrated with
Volplex. In parallel, the management team will seek to acquire complementary
product portfolios.



Geographically, the UK is currently the Company's primary market. The
acquisition of Acorus and the already established distributor network will
enable the Company to build its presence in the major European markets, which
together with North America represent the majority of the pharmaceutical and
medical device market. In addition the Enlarged Group will continue its
established relationship in China, where Volplex is currently in the regulatory
process.



Maelor audited results for year ended 31 March 2006



The Company announced its preliminary results for the year ended 31 March 2006
on 1 June 2006. These results showed that during the year ended 31 March 2006,
Maelor reported a turnover of #1.86 million (year ended 31 March 2005: #1.64
million). This revenue generated gross profit of #0.74 million in 2006 (2005:
#0.60 million) and the Company made a loss after tax of #0.66 million (2005:
loss of #0.66 million)



Maelor unaudited results for the six months ended 30 September 2006



The Company announced its unaudited results for the six months ended 30
September 2006 on 2 November 2006. During this period Maelor generated a
turnover of #1.33 million (six months ended 30 September 2005: #0.92 million),
gross profit of #0.62 million (six months ended 30 September 2005: #0.36
million) and the Company made a loss after tax of #0.08 million (six months
ended 30 September 2005: loss of #0.40 million).



Acorus audited results for year ended 30 September 2006



Acorus reported turnover of #3.04 million for the year ended 30 September 2006
(year ended 30 September 2005: #1.59 million). This revenue generated gross
profit of #2.13 million in 2006 (2005: #1.10 million) and made a profit after
tax of #0.62 million (2005: profit of #0.04 million). The majority of the
operating costs in Acorus relate to bought in services in respect of research
and development, administrative expenses and service charges, the majority of
which are currently provided by the existing Maelor infrastructure. Thus a large
majority of Acorus' costs are not anticipated to recur in the Enlarged Group
meaning that a substantial proportion of the gross profit generated in the
future should fall to bottom line.



Current trading and future prospects



Maelor

The Board is confident that Maelor is now delivering against clear objectives,
an achievement which is reinforced by continued positive trading since the
announcement of 2006 interim results, with good progress being made in the
implementation of its new strategy:



The building of a specialist hospital medicine business



In 2006 the management team has focused on growing sales of Volplex. The results
of these efforts have seen a number of new hospitals purchasing Volplex with
in-market sales up 43 per cent. versus H1 2005. There remains substantial room
for market share growth and the management team is confident that, in addition,
the Company can continue to win further new accounts to grow sales of Volplex.



Maelor is intent upon on adding new products to the portfolio either through
in-licensing or development of late stage opportunities, which reinforce the
Company's development and commercial expertise and presence. As a result of
customer research the decision has been taken to develop ISOplex, an isotonic
product designed to mimic natural blood plasma, particularly in the balance of
electrolytes. The introduction of ISOplex will support Maelor's strategy of
driving both market share and market size in the gelatin segment of the UK blood
volume replacement market.



Over the last 12 months Maelor has succeeded in obtaining a licence from the
MHRA to sell unlicensed medicines known as "Specials". Maelor intends these
products to fulfil niche areas of unmet need and to be a support service to
critical care patients and physicians. An agreement has recently been concluded
to offer a portfolio of fluid support products, currently licensed in Germany.
In addition, the Company has recently developed AquiHex, an aqueous solution of
chlorhexidine, an antibacterial product used in critical care settings which
will be sold as a special while UK regulatory approval is sought.



Leverage non-critical care portfolio through efficient partnerships



OptiFlo, the UK brand of catheter flushing solutions distributed by Bard Limited
has continued to perform well, with sales up 10 per cent. in H1 2006 versus H1
2005, and remains the UK market leader with market share of 54 per cent. in H1
2006 versus 49 per cent. in H1 2005 in a market that has itself grown by 5 per
cent. in 2006.



H1 2006 turnover incorporates a licensing milestone for the Company's
proprietary micelle nanotechnology, micelle lidocaine. The agreement with
Plethora, a specialist urology company, is progressing well. Under the terms of
the agreement Plethora is responsible for product development and distribution
and Maelor is entitled to milestone and royalty payments.



Micelle lidocaine is in development for the treatment of interstitial cystitis
and painful bladder syndrome. These conditions are estimated to afflict up to
two million women in the United States and Europe.



As identified in the recent strategic review, a primary activity of recent
months has been to provide clarity and focus to the business. The product
portfolio has been rationalised in line with this plan as has the geographical
focus to prioritise efforts in the UK. While assessment of the opportunity for
ContiSol in the US and regulatory process for Volplex in China continue, these
activities are considered secondary to the focus of building a specialist
hospital medicine business in the UK.



The Directors believe that Maelor is now well positioned to grow its business
and that completion of the Acquisition and the Placing will provide the Enlarged
Group with a stable platform for growth.



Acorus



The Acorus portfolio of products has been steadily developed over a number of
years. Audited sales of the Cryogesic range of fast acting freeze analgaesics
have seen healthy growth and further growth potential remains from active
promotion of the brand and exploitation of new niche markets.



Mysoline was acquired by Acorus in 2004 and is already marketed in a number of
European markets and further launches are planned for 2007.



Market research shows upside potential in promotion of the brand in the area of
Essential Tremor which affects 1 in 20-25 of over 40 year olds. Mysoline is
indicated for Essential Tremor in the UK, while in other territories regulatory
approval will be required. Going forward, the formulation of a strategy to
rapidly grow the product in this sector will be a key activity.



The company has concentrated on progressing Haemopressin through the regulatory
process and gearing up for a launch in 2008. It will additionally be progressing
the late phase III development of Gentispray.



The strategy of commercialising specials and where sufficient opportunity is
identified, making a full licence application will continue, as is the case with
Acoranil anti- depressant syrup.



Enlarged Group

The synergy between the two companies and the lack of integration issues due to
the virtual nature of Acorus will enable the Enlarged Group to rapidly stabilise
and commence driving growth from the enlarged portfolio. The emphasis remains on
focusing on late stage low cost / risk specialist products



The Board believes that the demand for Maelor's specialist pharmaceutical
products into the critical care market will continue to grow and that there will
be ongoing opportunities for the Enlarged Group to cross sell its products to
existing customers.



Increased emphasis will be put on growing Cryogesic through active promotion and
preparing for launch of Haemopressin as the Company interacts with the same
customer group to which it will be promoting Volplex, fluid specials and
ISOplex.



Active promotion of Mysoline for Essential Tremor to specialist neurologists, in
the UK, will commence in parallel with the assessment of potential line
extensions to further develop this substantial market. A detailed review of the
ongoing Gentispray study will be conducted in order to evaluate the most
appropriate route to securing registration. In line with the Company's focus in
the specialist, secondary care market it is likely that a partner will be sought
for this product.



Both Acoranil and 5-FU the oral cancer treatment will be managed within the
existing specials portfolio, which incorporates fluid and volume replacement
products as well as AquiHex.

The Enlarged Group will continue actively to seek additional specialist products
and portfolios to consolidate into the business



Principal terms of the Acquisition



The Company has agreed to acquire the entire issued share capital of Acorus. The
acquisition price is to be satisfied by a cash payment of #7 million, the issue
of 10,000,000 Consideration Shares at a price of 10 pence per share and the
issue of up to #4.88 million of Loan Notes to the Vendors, contingent upon
Acorus achieving certain revenue targets.



The Acquisition Agreement is conditional, inter alia, upon:


a)   First Admission, Second Admission and Third Admission occurring on or
     before 25 May 2007;
     


b)   no fact or circumstance having occurred which would amount to there having 
     been a material adverse change in the business carried on by Acorus; and



c)   successful conclusion of the Placing.



It is expected that completion of the Acquisition and Third Admission will take
place on 10 May 2007.



Board of the Enlarged Group



The Board of Maelor currently consists of Geoff McMillan, Timothy Wright, Nigel
Goldsmith, Ann Hardy, John Gregory and Peter Murray. The Board, following Third
Admission, will continue to consist of the following:-



Geoff McMillan Non-Executive Chairman



Geoff was appointed as Non-Executive Chairman of Maelor in January 2006
following the retirement of his predecessor. Currently Chief Executive Officer
of Speciality European Pharma Limited and non executive director of Galapagos
NV, Geoff has over 25 years' experience within the pharmaceutical and
biotechnology industry. Having worked for Smith and Nephew, Roche, Xenova Group
plc, Elan, and Biofocus plc. Geoff brings a record of deal making, ranging from
product and technology licensing to mergers and acquisitions and collaborative
drug discovery to the Board of Maelor.



Tim Wright Chief Executive Officer



Tim was appointed Chief Executive Officer of Maelor in September 2005. With over
15 years' experience in the pharmaceutical industry, Tim has held senior
commercial positions at Pfizer and SmithKline Beecham both domestically and
internationally. His most recent roles were with Elan Pharmaceuticals where he
was general manager for Ireland and vice president, international marketing.
During his time at Elan, Tim was instrumental in the establishment, significant
growth and ultimate successful divestment of their European business.



Nigel Goldsmith Finance Director and Company Secretary



Nigel joined Maelor in June 2006. He spent over nine years at KPMG, latterly as
senior manager, prior to moving into industry in 1996. He now has ten years
experience working in the pharmaceutical and life sciences sectors, where he has
held senior financial positions at Life Sciences International plc and most
recently at Almedica International Inc where he was chief financial officer for
five years.



Ann Hardy Operations Director



Ann was appointed to Maelor's Board in July 2004. Ann has over 20 years'
experience in the pharmaceutical industry, where she has held senior positions
in operations, quality and technical management for Glaxo Pharmaceuticals, Evans
Medical Limited and Medeva Pharma Limited. Ann holds a BSc with Honours in
Biology and has a Diploma in Company Direction. She has responsibility for both
commercial and technical operations within Maelor.



John Gregory Non-Executive Director



John joined the Maelor Board in June 2000. Currently non-executive chairman of
Noble VCT plc and a non-executive director of The AIM VCT plc, John is also a
non-executive director or chairman of a number of private companies and was,
prior to these appointments, an executive director of Noble Fund Managers.
John's earlier career was in the City of London and included posts as a director
of Singer & Friedlander Holdings and managing director of Henry Ansbacher & Co.
John is currently chairman of the remuneration committee of Maelor.



Peter Murray Non-Executive Director



Peter joined the Maelor Board in April 2003. With over 20 years' experience in
diagnostics and devices, Peter left Napp Laboratories to form Cambridge
Laboratories in 1987, leading it to profitability and ultimately to
international status. In 1996 he formed High Crane Limited, focusing on
management consultancy and in 2000 he co-founded Acorus, to provide niche
hospital orientated pharmaceutical products and medical devices. Peter is
currently chairman of the audit committee of Maelor.



12. Share Option Plans



Maelor currently has two Existing Share Option Plans in place, an Unapproved
Plan and an Enterprise Management Incentive Plan.



In addition, the Company is seeking approval for the adoption of the New EMI and
Unapproved Plan at the EGM on 4 May 2007.



13. Corporate governance



The Directors acknowledge the importance of the principles set out in the
Combined Code. Although the Combined Code is not compulsory for AIM companies,
the Directors intend to apply the principles as far as practicable and
appropriate for a relatively small public company as follows:



Board



After the Acquisition, the Board intends to continue to meet regularly and will
be responsible for strategy, performance, approval of major capital projects and
the framework of internal controls. The Board intends to have a formal schedule
of matters specifically reserved to it for decision. To enable the Board to
discharge its duties, the Directors will receive appropriate and timely
information. It is the intention that briefing papers will be distributed to all
Directors in advance of Board meetings, while all Directors will have access to
the advice and services of the Company Secretary, who is responsible for
ensuring that procedures of the Board are followed and that applicable rules and
regulations are complied with. The articles of association provide that
Directors will be subject to re-election at the first opportunity after their
appointment and each member of the Board will voluntarily submit to re-election
at intervals of three years thereafter.





Audit committee



The audit committee is currently made up of Peter Murray (Chairman), John
Gregory and Geoff McMillan, although following the Acquisition this will be
reviewed. The committee will meet at least twice a year and meetings will be
arranged in conjunction with the publication of the Enlarged Group's financial
statements. The committee will, inter alia, monitor the financial integrity of
the Enlarged Group, review financial information, review accounting policies,
clarity of disclosures, internal controls and risk management systems and the
Enlarged Group's internal audit requirement and oversee the relationship with
external auditors.



Remuneration committee



The remuneration committee is made up of John Gregory (Chairman), Peter Murray
and Geoff McMillan, although following the Acquisition this will be reviewed.
The committee will meet not less than twice a year. Appointments to the
committee will be for a period of up to three years which may be extended for
two further three year periods. The committee will determine and agree with the
Board the framework for the remuneration of the Chairman, the executive
Directors and such members of the executive management team as it is designated
to consider. The remuneration of the non-executive Directors will be a matter
for the executive Directors. The committee will review the appropriateness of
the remuneration policy in the light of all relevant factors and will have
regard to the provisions and recommendations of the Combined Code, the AIM Rules
and associated guidance. The remuneration committee will also be responsible for
administering the Share Option Plans.



Internal controls



The Board will be responsible for establishing and maintaining the Enlarged
Group's system of internal controls and places importance on maintaining a
strong control environment. The key procedures which the Board intends to
establish with a view to providing effective internal controls are expected to
be as follows:



* the Board will be responsible for identifying the major business risks faced
  by the Enlarged Group and for determining the appropriate courses of action
  required to manage those risks;



* the Enlarged Group's organisational structure will have clear lines of
  responsibility and reporting and;



* the Enlarged Group will prepare a comprehensive annual budget that is approved
  by the Board. Monthly results will be reported against the budget and 
  variances will be closely monitored by the Board.


The Directors recognise, however, that such a system of internal controls will
only provide reasonable, not absolute, assurance against material misstatement
or loss. The Board has reviewed the effectiveness of the system of internal
controls as it will be operated by the Enlarged Group.



AIM Compliance Committee



In line with new regulations, the Company intends to establish an AIM compliance
committee in the near future.



Dividend policy



In the short term, the Board does not intend to declare a dividend but will
reconsider this as and when the growth and profitability of the Enlarged Group
allow. The declaration and payment of any future dividends by the Enlarged Group
and the quantum thereof will be dependent upon the Enlarged Group's results,
financial position, cash requirements, future prospects, profits available for
distribution and factors deemed by the Board to be relevant at the time.



Reasons for Placing and use of proceeds



The net proceeds of the Placing receivable by the Company will be approximately
#7.16 million (after estimated expenses). These proceeds will be used to finance
the acquisition of Acorus and to enable it to implement its organic and
acquisitive growth strategy.



The Placing Shares will represent 64.4 per cent. of the Enlarged Share Capital
of the Company immediately following Third Admission. The Placing Price
represents a discount of approximately 21.6 per cent. to 12.75, the closing
mid-market price on 4 April 2007.



The New Ordinary Shares will, on the relevant Admission, rank pari passu in all
respects with the Existing Ordinary Shares and will have the right to receive
all dividends and other distributions thereafter declared, made or paid in
respect of the issued ordinary share capital of the Company.



It is expected that the proceeds of the Placing will be received by the Company
on or around 10 May 2007.



In the event that First Admission becomes effective by 8.00 am on the Long Stop
Date but Second Admission does not, or that First Admission and Second Admission
become effective by 8.00 am on the Long Stop Date but the Acquisition fails to
complete (whether by reason of the Third Admission failing to become effective
or otherwise) by 5.00 pm on the Long Stop Date, the proceeds relating to First
Admission and/or Second Admission, as the case maybe, will be invested on a
short term basis while the Board considers how best to return such proceeds to
the relevant Placees.



Bank facility



Subject to Admission, the Company will enter into a bank facility with HSBC Bank
plc totalling #2.0 million. This facility may be used by the Company for general
working capital purposes and/or towards the funding of future acquisitions.



Admission to AIM and dealings



The Acquisition constitutes a reverse takeover under the AIM Rules and is
therefore dependent upon the approval of Shareholders being given at the
Extraordinary General Meeting. A resolution will be proposed at the EGM, inter
alia, to approve the Acquisition. If the Resolutions are duly passed at the EGM,
and the other conditions set out in the Placing Agreement are met, application
will be made for the Enlarged Share Capital to be re-admitted to trading on AIM.



It is anticipated that First Admission will become effective and that dealings
will commence in the Existing Ordinary Shares and the New VCT/EIS Shares at 8.00
am on 8 May 2007, that Second Admission will become effective and that dealings
will commence in the Protected VCT Shares and the Non-VCT Shares at 8.00 am on 9
May 2007 and that Third Admission will become effective and that dealings will
commence in the Consideration Shares at 8.00 am on 10 May 2007.



If the Acquisition is not completed but First Admission has become effective
(but Second Admission has not), the Existing Ordinary Shares and the New VCT/EIS
Shares will continue to be traded on AIM and the Protected VCT Shares and the
Non-VCT Shares will not be issued or admitted to trading on AIM. If between
Second Admission and the date on which the Acquisition is expected to complete
(being 10 May 2007), the Acquisition terminates, the Protected VCT Shares and
the Non-VCT Shares will also continue to be traded on AIM.



Extraordinary General Meeting



The Extraordinary General Meeting of the Company is to be held at the offices of
Morrison & Foerster MNP, Citypoint, One Ropemaker Street, London EC2Y 9AW at
11.00 am on 4 May 2007.



At the EGM, the following resolutions will be considered by the holders of the
Existing Ordinary Shares and, if thought fit, passed:



 1. an ordinary resolution to approve the acquisition of Acorus by Maelor, in
    accordance with the terms of the Acquisition Agreement;



 2. an ordinary resolution to increase the authorised share capital of the
    Company from #8,000,000 to #20,000,000 by the creation of an additional
    120,000,000 Ordinary Shares, representing an increase of 150 per cent. of
    the current authorised share capital;



 3. an ordinary resolution authorising the Directors, for the purposes of section
    80 of the Companies Act, to allot relevant securities up to an aggregate
    nominal amount of #9,000,000 (90,000,000 New Ordinary Shares) pursuant to
    the Placing and in connection with the Acquisition (representing
    approximately 263 per cent. of the number of Existing Ordinary Shares and
    approximately 72 per cent. of the Enlarged Share Capital immediately after
    Third Admission) and assuming no new Ordinary Shares are issued pursuant to
    the Share Option Plans;



 4. an ordinary resolution to approve an amendment to Rule 6.1(b) of the
    Enterprise Management Incentives Plan (established by the Company in August
    2000) such that the words "five per cent. (5%)" be replaced by the words "
    twelve point five per cent. (12.5%)";



 5. an ordinary resolution approving the adoption of the New EMI and Unapproved
    Plan;



 6. an ordinary resolution to authorise the Directors of the Company, at their
    discretion, to allow employees and Directors who currently hold unexercised
    share options under the Maelor plc Enterprise Management Incentives Plan or
    the Unapproved Plan, under which the exercise price payable on those share
    options is in excess of the market value of the shares which they might
    acquire upon the exercise of them, to agree formally with the Company to the
    cancellation of those options, with a view thereby to permitting further
    grants under the New EMI and Unapproved Plan within the permitted limits
    prescribed by EMI rules; and



 7. a special resolution pursuant to section 95 of the Companies Act, empowering
    the Directors, subject to and with effect from First Admission, to allot
    equity securities (within the meaning of section 94 of the Companies Act)
    for cash as if section 89(1) of the Companies Act did not apply to such
    allotment provided that this authority is limited to the allotment for cash
    of 90,000,000 New Ordinary Shares pursuant to the Placing and in connection
    with the Acquisition (representing approximately 263 per cent. of the number
    of Existing Ordinary Shares and approximately 72 per cent. of the Enlarged
    Share Capital immediately after Third Admission) and assuming no new
    Ordinary Shares are issued pursuant to the Share Option Plans.



The authority and the power described in paragraphs 3 and 7 above will (unless
previously revoked or varied by the Company in general meeting) expire on the
date 15 months from the passing of such resolutions or at the conclusion of the
next annual general meeting of the Company following the passing of the
Resolutions, whichever occurs first. The authority and the power described in
paragraphs 3 and 7 above are in addition to any like authority or power
previously conferred on the Directors.



The ordinary resolutions 1, 2, 3, 4, 5 and 6 will require a simple majority of
those voting in person or on a poll by proxy in favour of the resolutions. The
special resolution 7 will require approval by not less than 75 per cent. of the
votes cast by Shareholders voting in person or on a poll by proxy.



Irrevocable undertakings



The Company has received irrevocable undertakings from Bluehone Investors LLP,
Close Investments Limited and the Directors to vote, or to procure the votes of
Ordinary Shares held, in favour of the Resolutions to be proposed at the EGM in
respect of a total of 8,807,319 Ordinary Shares representing approximately 25.7
per cent. of the Existing Ordinary Shares.



VCT and EIS qualifying investment status



On the basis of the information provided, HM Revenue & Customs has given
provisional confirmation that Maelor will comply with the requirements of
Schedule 28B of the Income and Corporation Taxes Act 1988 and that the Ordinary
Shares will be eligible shares for the purposes of VCTs. The status of the
Ordinary Shares as a qualifying holding for VCT purposes will be conditional,
inter alia, upon the Company and the VCT continuing to satisfy the relevant
requirements.



Furthermore, on the basis of information provided to HM Revenue & Customs, the
Company has received provisional approval that the Placing Shares should be
eligible for EIS purposes, subject to the submission of the relevant claim form
in due course. Such a claim by the Company does not guarantee EIS qualification
for an individual, whose claim for relief will be conditional upon his
circumstances and is subject to holding the Placing Shares throughout the three
year relevant period. In addition, for EIS relief not to be withdrawn, the
Company and the individual must comply with a number of conditions throughout
the qualifying period relating to those shares, and no guarantee can be given
that the Company will so comply.



Related party transaction



Under AIM Rule 13 the Acquisition is considered to be a related party
transaction by reason of the fact that Peter Murray is a non-executive Director
of the Company and a director of Acorus. With the exception of Peter Murray, the
Board considers, having consulted with Noble that the terms of the related party
transaction are fair and reasonable insofar as the Shareholders are concerned.



Action to be taken



Whether or not you intend to be present at the Extraordinary General Meeting, as
a Shareholder you are requested to complete and return the Form of Proxy
accompanying the admission document, in accordance with the instructions printed
thereon, as soon as possible and in any event so as to be received by the Proxy
Processing Centre, Telford Road, Bicester OX26 4LD, or, (during normal business
hours) by hand, to Capita Registrars, The Registry, 34 Beckenham Road,
Beckenham, Kent BR3 4TU not later than 11.00 am on 2 May 2007. Completion and
return of the Form of Proxy will not prevent you, as a Shareholder, from
attending the Extraordinary General Meeting and voting in person should you wish
to do so.



Recommendation



The Directors, who have been so advised by Noble, consider the terms of the
Acquisition to be fair and reasonable so far as Shareholders as a whole are
concerned.



In giving its advice, Noble has taken into account the Directors' commercial
assessments.



Accordingly, the Directors unanimously recommend that Shareholders vote in
favour of the Resolutions to be proposed at the EGM as they have irrevocably
undertaken to do in respect of their own beneficial shareholdings amounting to,
in aggregate, 1,279,211 Ordinary Shares (representing approximately 4 per cent.
of the existing issued share capital of the Company).



DEFINITIONS

In this announcement, where the context permits, the expressions set out below
shall bear the following meanings:



"Acorus"                 Acorus Therapeutics Limited, a company incorporated in England and Wales under registered      
                         number 03976183


"Acquisition"            the proposed acquisition, by the Company, of the entire issued share capital of Acorus


"Acquisition Agreement"  the conditional agreement, dated 5 April 2007, between the Vendors and the Company relating to 
                         the sale and purchase of the entire issued share capital of Acorus,


"Act"                    the Companies Act 1985, as amended



"Admission"              First Admission and/or Second Admission and /or Third Admission, as the context may require or 
                         permit


"AIM"                    AIM, an exchange regulated market operated by the London Stock Exchange


"AIM Rules"              the AIM Rules for Companies published by the London Stock Exchange from time to time           
                         (including, without limitation, any guidance notes or statements of practice) which govern the 
                         rules and responsibilities of companies whose shares are admitted to trading to AIM, as
                         amended from time to time


"Board" or "Directors"   the existing directors of Maelor, being Geoff McMillan, Tim Wright, Nigel Goldsmith, Ann Hardy,
                         John Gregory and Peter Murray, which will continue to be the same immediately after the        
                         Acquisition


"Combined Code"          the combined code on corporate governance issued by the Financial Reporting Council, as amended
                         from time to time


"Company" or "Maelor"    Maelor plc, a company incorporated in England and Wales under registered number 3337415


"Consideration Shares"   the 10,000,000 new Ordinary Shares to be issued to the Vendors as part of the consideration    
                         pursuant to the Acquisition Agreement


"CREST"                  the computerised settlement system used to facilitate the transfer of title of shares in       
                         uncertificated form operated by CRESTCo Limited for UK, Irish and international securities


"CREST Regulations"      the Uncertificated Securities Regulations 2001 (SI 2001/3755), as amended


"EIS"                    the Enterprise Investment Scheme


"EMI Plan" or            the Maelor plc Enterprise Management Incentives Plan,
"Enterprise Management
Incentives Plan"


"Enlarged Group"         the Group, including Acorus, following completion of the Acquisition


"Enlarged Share Capital" ordinary share capital of the Company immediately following Third Admission, as enlarged by the
                         issue of the New Ordinary Shares


"EU"                     the European Union


"Existing Ordinary       the 34,280,833 Ordinary Shares in issue immediately prior to First Admission
Shares"                                  


"Existing Share Option   the Unapproved Plan or the EMI Plan
Plans"


"Extraordinary General   general meeting of the Company to be held the extraordinary at 11.00 am
 Meeting" or "EGM"       on 4 May2007, at the offices of Morrison & Foerster MNP, Citypoint, One Ropemaker Street,      
                         London EC2Y 9AW


"First Admission"        the re-admission of the Existing Ordinary Shares and the admission of the New VCT/EIS Shares to
                         trading on AIM becoming effective in accordance with the AIM Rules


"Form of Proxy"          the form of proxy for use by Shareholders in connection with the EGM


"FSA"                    the Financial Services Authority


"FSMA"                   Financial Services and Markets Act 2000, as amended


"Group"                  Maelor and its subsidiary undertakings at the date of this announcement


"Lewis Charles"          Lewis Charles Securities Limited, which is authorised and regulated by the FSA


"LIBOR"                  the London Inter-Bank Offer Rate


"Listing Rules"          the listing rules issued by the FSA (and amended from time to time) made pursuant to section 74
                         of FSMA


"Loan Notes"             the loan notes to be issued to the Vendors in accordance with the Loan Note Instrument


"Loan Note Instrument"   the instrument dated 5 April 2007 made by the Company pursuant to which the Company has agreed 
                         to issue #4,877,395 of fixed rate unsecured loan notes to the Vendors to satisfy part of the   
                         consideration due under the Acquisition Agreement


"Lock-in Agreement"      the conditional agreement dated 5 April 2007 between Noble, the Company and certain            
                         Shareholders pursuant to which such Shareholders have undertaken, inter alia, not to dispose of
                         their Ordinary Shares for a period of 12 months following First Admission


"London Stock Exchange"  London Stock Exchange plc


"Long Stop Date"         25 May 2007


"New EMI and Unapproved Maelor plc 2007 Enterprise Management Incentive (EMI) and Unapproved Share option plan, to be   
Plan"                   adopted at the EGM


New Ordinary Shares"    the 90,000,000 new Ordinary Shares in aggregate to be issued pursuant to the Placing and in     
                        connection with the Acquisition, being the Placing Shares and the Consideration Shares


"New VCT/EIS Placing"   the proposed placing of New VCT/EIS Shares pursuant to the Placing Agreement


"New VCT/EIS Shares"    the 35,725,000 new Ordinary Shares which are to be placed with certain VCTs (being those which  
                        raised funds on or after 6 April 2006) and/or with certain qualifying investors under the EIS


"Noble"                 Noble & Company Limited, which is authorised and regulated by the FSA


"Nomad Rules"           the AIM Rules for Nominated Advisers published by the London Stock Exchange from time to time   
                        (including, without limitation, any guidance notes or statements of practice) which govern,     
                        inter alia, the eligibility, approval and continuing obligations of Nominated Advisers (as
                        defined in the AIM Rules), as amended from time to time 


"Nominated Adviser      the agreement, dated 5 April 2007, between the Company and Noble relating to the appointment of 
and Broker Agreement"   Noble as nominated adviser and broker to the Company


"Non-VCT Placing"       the proposed placing of Non-VCT Shares pursuant to the Placing Agreement


"Non-VCT Shares"        the 21,375,000 Placing Shares other than the New VCT/EIS Shares and the Protected VCT Shares


"Official List"         the Official List of the FSA


"Ordinary Shares"       ordinary shares of 10 pence each in the capital of the Company


"Panel"                 the Panel on Takeovers and Mergers


"Placees"               the subscribers of Placing Shares pursuant to the Placing


"Placing"               the placing, by Noble on behalf of the Company, of the Placing Shares at the Placing Price      
                        pursuant to the Placing Agreement


"Placing Agreement"     the conditional agreement, dated 5 April 2007, between the Company, the Directors and Noble     
                        relating to the Placing


"Placing Price"         10 pence per Placing Share


"Placing Shares"        the New VCT/EIS Shares, the Protected VCT Shares and the Non-VCT Shares


"Plethora"              Plethora Solutions Holdings plc


"Prospectus Rules"      the Prospectus rules published by the FSA from time to time


"Protected VCT Placing" the proposed placing of Protected VCT Shares pursuant to the Placing Agreement


"Protected VCT Shares"  the 22,900,000 new Ordinary Shares which are to be placed with certain VCTs (being those which  
                        raised funds prior to 6 April 2006)


"Resolutions"           the resolutions set out in the notice of Extraordinary General Meeting



"Second Admission"      the admission of the Protected VCT Shares and the Non-VCT Shares to trading on AIM becoming     
                        effective in accordance with the AIM Rules


"Shareholders"          holders of Ordinary Shares


"Share Option Plans"    the Existing Share Option Plans and the New EMI and Unapproved Plan


"Takeover Code"         the City Code on Takeovers and Mergers (as published by the Panel)


"Third Admission"       the admission of the Consideration Shares to trading on AIM becoming effective in accordance    
                        with the AIM Rules


"Unapproved Plan"       the Maelor plc 2000 Unapproved Share Option Plan,


"VCT"                   venture capital trust


"Vendors"               Peter Murray and Stephen Jones


* OptiFloTM is a trademark of Bard Limited


                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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