Malin Corporation PLC Proposed Tender Offer (0733Q)

TIDM0Y71

RNS Number : 0733Q

Malin Corporation PLC

16 February 2023

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO ANY JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT

16 February 2023

Malin Corporation plc

("Malin" or the "Company")

Proposed Return of Capital up to EUR140 million by way of Tender Offer at EUR9.30 per Ordinary Share

and

Proposed Renominalisation of Ordinary Shares and related amendments to Malin's Constitution

and

Notice of Extraordinary General Meeting

   --      EUR140 million capital return by way of a tender offer to complete in March 2023 
   --      Tender price is set at EUR9.30 per Ordinary Share 

-- Tender Price represents a premium of 24.7% to Malin's share price and a discount of 7.6% to Malin's Estimated Intrinsic Equity Value per Ordinary Share

   --      EGM to vote on resolutions required to effect Tender Offer set for 10 March 2023 

Commenting on the announcement, Liam Daniel, Chairman of Malin, said: "We are delighted to continue to deliver on our long-standing commitment to return the excess capital of the business to our shareholders with this proposed return of up to EUR140 million by way of a tender offer. This return of capital follows the divestment of our entire stake in Immunocore which generated cash proceeds of approximately EUR145 million and other inflows from our investee companies of approximately EUR21 million during 2022. Our cash balance of approximately EUR33 million following the completion of the tender offer will be used to fund the Company's operations, including possible investments into Malin's existing assets if strategically or financially attractive investment opportunities arise."

Introduction

On 7 December 2022, Malin announced its intention to return approximately EUR140 million to Shareholders by way of a tender offer to be launched by the end of February 2023. The Company is today pleased to announce the launch of the proposed tender offer and the return of capital up to approximately EUR140 million to Qualifying Shareholders through the purchase and cancellation of up to approximately 44.25% of the Issued Share Capital of Malin (the "Tender Offer") on the terms described further below and in a circular to Shareholders published by the Company today (the "Circular").

Under the Tender Offer, Qualifying Shareholders are invited to tender some or all of their Ordinary Shares (with an Individual Basic Entitlement to tender approximately 44.25% of the Ordinary Shares held by them at the Tender Offer Record Date, rounded down to the nearest whole number) at a price of EUR9.30 per Ordinary Share (the "Tender Price").

Qualifying Shareholders are not required to tender any or all of their Ordinary Shares if they do not wish to do so.

The Tender Price represents a premium of 24.7% to the closing price of EUR7.46 per Ordinary Share on 14 February 2023 and represents a 7.6% discount to the Estimated Intrinsic Equity Value per Ordinary Share of EUR10.07 on 14 February 2023.

The Circular, containing the formal terms and conditions of the Tender Offer and instructions to Qualifying Shareholders on how to tender their Ordinary Shares should they choose to do so, has today been posted to Shareholders and is also available on the Company's website (www.malinplc.com).

The Tender Offer opens today and will close at 1.00 p.m. on 20 March 2023.

In order to implement the Tender Offer, a number of shareholder resolutions (the "Resolutions"), including to approve the Renominalisation, must be passed. Pursuant to the Renominalisation, the nominal value of each Ordinary Share will be increased from EUR0.001 to EUR0.01. The Renominalisation is required in order to ensure that, following completion of the Tender Offer, the Company continues to comply with certain Irish law capital maintenance requirements, namely to have issued share capital with a nominal value of at least EUR25,000. The Renominalisation will not change Shareholders' proportionate interest in the Ordinary Shares owned by them. Aside from the change in nominal value, the rights attaching to Ordinary Shares (including voting and dividend rights and rights on a return of capital) will remain the same and the Ordinary Shares will remain listed on Euronext Growth. In connection with the Renominalisation, certain amendments will be required to the share capital provisions of the Constitution.

The Circular contains a notice of Extraordinary General Meeting ("EGM") to be held at the Conrad Hotel, Earlsfort Terrac , Dublin 2, D02 V562, Ireland on 10 March 2023 at 10.00 a.m. to consider the Resolutions.

An expected timetable of principal events is set out in Appendix I to this announcement. Capitalised terms used in this announcement, which have not been defined have the meanings given to them in the Circular, unless the context provides otherwise.

Background to and reasons for the Tender Offer

Part of Malin's strategy, which has been outlined in its communications to investors since the Ordinary Shares were initially admitted to trading in 2015, is to execute returns of capital to Shareholders of the excess capital of the business following the realisation of value from its investee companies. Previously, during 2021, Malin returned approximately EUR95 million of capital to shareholders, including EUR80.0 million by way of a tender offer and EUR15.1 million through on-market buybacks. The Tender Offer launched by the Company today further executes on this strategy.

On 7 December 2022, Malin announced that it had completed the divestment of its entire shareholding in its investee company, Immunocore Holdings plc ("Immunocore"), at an average price of approximately US$59 per share, generating total cash proceeds of approximately EUR145 million, realising an approximate 90% gain on its total capital investment in the company.

As part of that announcement, Malin also confirmed that in November 2022 it had received approximately EUR6 million in connection with the release of its portion of the escrow payment on the upfront consideration payable to Malin in connection with the sale of its shareholding in its investee company, Kymab Group Limited, in 2021; and EUR13 million as a distribution from Viamet Phamaceuticals, Inc. ("Viamet") followings its receipt of a milestone payment from Mycovia Pharmaceuticals, Inc., the successor company to Viamet, in connection with the approval of its product VIVJOA(R) (oteseconazole).

As a result, as at 7 December 2022, Malin had a cash balance of approximately EUR174 million. In line with its stated strategy of returning excess capital, Malin further announced its intention to complete a capital return to shareholders of approximately EUR140 million via a tender offer that would be launched by the end of February 2023.

The Board has concluded that a return of up to EUR140 million of capital by way of the Tender Offer is in the best interests of the Company. The Board has determined that the quantum of the Tender Offer is appropriate and in the best interests of Company, providing a significant near-term return of excess capital in the business to Shareholders. Following the return of the proposed Tender Offer proceeds, the Company estimates that it will have cash of approximately EUR33 million, which the Board has determined is sufficient capital, alongside expected future realisation proceeds, to exploit future investment opportunities in Malin's existing investee companies if strategically or financially attractive investment opportunities arise. The Board remains committed to seeking to maximise value for Shareholders.

Benefits of the Tender Offer to Shareholders

The benefits of the Tender Offer are that it:

-- is available to all Qualifying Shareholders regardless of the size of their shareholdings (subject to rounding in the case of fractional entitlements);

-- recognises the Estimated Intrinsic Equity Value per Ordinary Share and the significant discount that the Ordinary Shares trade at compared to this value;

-- means tendering Qualifying Shareholders will receive a premium of 24.7% to the closing price of EUR7.46 per Ordinary Share on 14 February 2023 (being the Latest Practicable Date);

-- represents a discount of 7.6% to the Estimated Intrinsic Equity Value per Ordinary Share of EUR10.07 on 14 February 2023;

-- provides Qualifying Shareholders who wish to sell Ordinary Shares the opportunity to do so on an equivalent basis to all Qualifying Shareholders; and

-- enables those Qualifying Shareholders who do not wish to realise their investment in Ordinary Shares at this time to maintain their current investment in Malin and increase their relative stake in Malin.

How to participate in the Tender Offer

Each Qualifying Shareholder is entitled to tender a number of Ordinary Shares equal to (or less than, if they so choose) their Individual Basic Entitlement. Qualifying Shareholders will also be entitled to apply to tender Ordinary Shares in excess of their Individual Basic Entitlement and, to the extent that other Shareholders do not tender their Individual Basic Entitlement, all such Ordinary Shares will be scaled back pro rata to the total number of such Ordinary Shares tendered in excess of the aggregate Individual Basic Entitlement, such that the total number of Ordinary Shares purchased pursuant to the Tender Offer does not exceed 15,053,763 and the maximum total cost of the Ordinary Shares purchased pursuant to the Tender Offer does not exceed EUR140 million, in accordance with the terms and conditions of the Tender Offer set out in the Circular.

Pentwater participation in the Tender Offer and EGM voting support

Pentwater Capital Management LP and its affiliates ("Pentwater") currently own, manage or control, in aggregate, 9,603,765 Ordinary Shares, representing approximately 28.23% of the Issued Ordinary Share Capital of Malin as at the Latest Practicable Date. Pentwater intends to participate in the Tender Offer, and has irrevocably undertaken to tender, in aggregate, 4,250,134 Ordinary Shares (which is equal to its Individual Basic Entitlement) under the Tender Offer at the Tender Price and to vote in favour of the Resolutions in respect of its aggregate shareholding. Pentwater is participating in the Tender Offer in respect of its Individual Basic Entitlement so that an obligation for Pentwater to make a mandatory offer in cash for the entire issued share capital of the Company pursuant to Rule 37 of the Irish Takeover Rules is not triggered as a result of the Tender Offer and in order that the Board can comply with its obligations under Rule 37 (c) of the Irish Takeover Rules in connection with the Tender Offer. Further details of this irrevocable undertaking are set out in the Circular.

Full terms and conditions of the Tender Offer

The Tender Offer is to be effected by Davy, which is acting as principal and on the terms and subject to the conditions referred to in the Circular. Davy and the Company have entered into an Option Agreement pursuant to which Davy has the right to require the Company to acquire the Ordinary Shares purchased by it under the Tender Offer at the Tender Price and the Company has the right to acquire such Ordinary Shares from Davy at the Tender Price. The Ordinary Shares successfully tendered under the Tender Offer will be subsequently acquired by Malin from Davy pursuant to the Option Agreement and cancelled.

Full details of the Tender Offer, including the terms and conditions on which it is made, as well as the procedure for tendering and settlement, are included in the Circular which has today been posted to Shareholders and is also available on the Company's website ( www.malinplc.com ).

Extraordinary General Meeting

Implementation of the Tender Offer requires approval of the Required Resolutions by Shareholders. The Resolutions will be proposed at an Extraordinary General Meeting of the Company to be held at the Conrad Dublin Hotel, Earlsfort Terrac , Dublin 2, D02 V562, Ireland at 10.00 a.m. on 10 March 2023. If the Required Resolutions are not passed by the Shareholders at the EGM, the Tender Offer will not proceed.

Shareholders may listen to the proceedings of the meeting remotely by teleconference using the dial- in details below:

   Ireland                                     [phone] 
   United Kingdom (Local)          [phone] 
   United States (Local)              [phone] 
   All other locations                   [phone] 
   Listen-only Access Code        923533 

For further information contact: Malin

Gary Curran, Assistant Company Secretary ( [e-mail] )

Tel: [phone]

Davy (Financial Adviser, Euronext Growth Adviser & Joint Broker)

Brian Garrahy / Daragh O'Reilly Tel: [phone]

Liberum (Joint Broker)

Phil Walker / Ben Cryer

Tel: [phone]

Powerscourt (Media enquiries)

Eavan Gannon

Tel: [phone]

[e-mail]

Appendix I

Expected Timeline of Principal Events

The dates and times set out below are indicative only and are based on the Company's current expectations and may be subject to change. References to time in this document are to Dublin, Ireland time unless otherwise stated. If any of the above times and/or dates change, the revised time(s) and/or date(s) will be notified to Shareholders by announcement through a Regulatory Information Service.

 
 Event                                                              Time/Date 
------------------------------------------  --------------------------------- 
 Launch of Tender Offer / Tender                             16 February 2023 
  Offer opens for acceptance 
------------------------------------------  --------------------------------- 
 Latest time and date for receipt                  10.00 a.m. on 8 March 2023 
  of Forms of Proxy for EGM 
------------------------------------------  --------------------------------- 
 Time and Date of EGM                             10.00 a.m. on 10 March 2023 
------------------------------------------  --------------------------------- 
 Latest time and date for receipt                 12.00 p.m. on 20 March 2023 
  of Electronic Instructions from 
  Qualifying Euroclear Participants 
------------------------------------------  --------------------------------- 
 Latest time and date for receipt           Please refer to corporate actions 
  of Electronic Instructions from                           bulletin for cut- 
  Qualifying CDI Holders                                         off deadline 
------------------------------------------  --------------------------------- 
 Latest time and date for receipt                  1.00 p.m. on 20 March 2023 
  of Tender Forms (Qualifying Certificated 
  Shareholders only) 
------------------------------------------  --------------------------------- 
 Closing Date for the Tender Offer                 1.00 p.m. on 20 March 2023 
------------------------------------------  --------------------------------- 
 Tender Offer Record Date                          6.30 p.m. on 20 March 2023 
------------------------------------------  --------------------------------- 
 Announcement of results of the                    7.00 a.m. on 21 March 2023 
  Tender Offer 
------------------------------------------  --------------------------------- 
 Purchase of Ordinary Shares under                              21 March 2023 
  the Tender Offer 
------------------------------------------  --------------------------------- 
 Cheques dispatched and Euroclear             No later than ten Business Days 
  Bank accounts credited in respect                             following the 
  of Tender Offer proceeds                                       Closing Date 
------------------------------------------  --------------------------------- 
 

Note: Different deadlines and procedures for tenders may apply in certain cases. This is particularly relevant if you hold your interest in Ordinary Shares in book-entry form (i.e. via the Euroclear Bank system, or in CDIs via the CREST system). All such persons who are eligible for and wish to participate in the Tender Offer and/or who wish to exercise voting rights in connection with the Resolutions proposed for consideration at the EGM are recommended to consult with their stockbroker, bank manager, solicitor, accountant or other independent professional adviser at the earliest opportunity given the possibility that earlier deadlines for actions than those set out above will be applied by relevant service providers.

Important Notices

This announcement contains Inside Information.

This announcement does not constitute, or form part of, an offer or any solicitation of an offer, to purchase or repurchase securities in any jurisdiction or constitute a recommendation or advice in respect of any securities or other financial instruments or any other matter. Malin shareholders are advised to read carefully the Circular. Any response to the Tender Offer should be made only on the basis of the information in the Circular.

Davy, which is regulated in Ireland by the Central Bank, is acting exclusively for Malin and no-one else in connection with the matters described in this announcement. Davy will not regard any other person (whether or not a recipient of this announcement) as its customer or be responsible to any other person for providing the protections to customers of Davy nor for providing advice in relation to the transactions and arrangements described in this announcement. Davy is not making any representation or warranty, express or implied, as to the contents of this announcement. Davy has not approved the contents of, or any part of, this announcement and no liability whatsoever is accepted by Davy for the accuracy of any information or opinions contained in this announcement or for the omission of any information from this announcement.

Forward-looking Statements

This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Group and certain plans and objectives of the Board, that are subject to risk factors associated with, amongst other things, the economic and business circumstances occurring from time to time in the countries, sectors and business segments in which the Group operates. These factors include, but are not limited to, those discussed in Part 4 (Risk Factors Related to the Tender Offer) of the Circular. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words of similar meaning. These statements are based on assumptions and assessments made by the Board in light of its experience and perception of historical trends, current conditions, expected future developments and other factors it believes appropriate. By their nature, forward-looking statements involve risk and uncertainty, and the factors described in the context of such forward-looking statements in this document could cause actual results or developments to differ materially from those expressed in or implied by such forward-looking statements.

Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this document. Malin assumes no obligation to update or correct the information contained in this document, whether as a result of new information, future events or otherwise, except to the extent required by law or the Euronext Growth Rules.

The statements contained in this announcement are made as at the date of this announcement, unless some other time is specified in relation to them, and publication of this document shall not give rise to any implication that there has been no change in the facts set out in this document since such date. Nothing contained in this announcement shall be deemed to be a forecast, projection or estimate of the future financial performance of Malin except where expressly stated.

Notice for UK Shareholders

This announcement and any other documents or materials relating to the Tender Offer (including the Circular and the Tender Form) are not being made, and this announcement or such documents and/or materials relating to the Tender Offer (including the Circular and the Tender Form) have not been approved, by an authorised person for the purposes of section 21 of the Financial Services and Markets Act 2000. Accordingly, this announcement and such other documents and/or materials relating to the Tender Offer (including the Circular and the Tender Form) are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of this announcement, or such other documents and/or materials relating to the Tender Offer (including the Circular and the Tender Form) as a financial promotion is only being made to, and may only be acted upon by, those persons in the United Kingdom falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Financial Promotion Order")) or persons who are within Article 43(2) of the Financial Promotion Order or any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order ("Relevant Persons"). Any person who is not a Relevant Person should not act on or rely on this announcement or any other documents or materials relating to the Tender Offer (including the Circular and the Tender Form). This announcement and the documents and materials relating to the Tender Offer (including the Circular and the Tender Form) and their contents should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other person in the United Kingdom.

Notice for US Shareholders

The Tender Offer relates to securities in a non-US company and is subject to the disclosure requirements, rules and practices applicable to companies listed on the Euronext Growth market, operated by Euronext Dublin, on which the Ordinary Shares are listed, which differ from those of the United States in certain material respects. The Circular has been prepared in accordance with the Irish law, and US Holders should read the entire Circular, including Part 6 (Tax Aspects of the Tender Offer), which contains important information about the Company and the Ordinary Shares.

The Tender Offer is not subject to the disclosure and other procedural requirements of Regulation 14D under the US Exchange Act. The Tender Offer will be made in the United States in accordance with the requirements of Regulation 14E under the US Exchange Act to the extent applicable, and otherwise in compliance with the disclosure and procedural requirements of Irish law. The Tender Offer is made to the US Holders on the same terms and conditions as those made to all other Shareholders to whom the Tender Offer is being made. Any information documents, including the Circular, are being disseminated to US Holders on a basis comparable to the method pursuant to which such documents are provided to the other Shareholders.

All activities of Davy with respect to the Tender Offer in the United States, if any, will be conducted by its affiliate, Davy Securities. US Holders should note that the Ordinary Shares are not listed on a US securities exchange and the Company is not subject to the periodic reporting requirements of the US Exchange Act and is not required to, and does not, file any reports with the US Securities and Exchange Commission thereunder. It may be difficult for US Shareholders to enforce their rights and any claims arising in connection with the Tender Offer under US federal or state securities laws since the Company is located outside the United States and most of its officers and directors may be residents of countries other than the United States. US Holders may not be able to sue Malin or its officers or directors in a non-US court for violations of US securities laws. Further, it may be difficult to compel a non-US company or its affiliates to subject themselves to the jurisdiction or judgement of a US court.

The receipt of cash pursuant to the Tender Offer by a Shareholder who is a US person will be a taxable transaction for US federal income tax purposes. Paragraph 3 of Part 6 (Tax Aspects of the Tender Offer) of the Circular sets out a guide to certain US tax consequences of the Tender Offer for Shareholders under current US law. However, each such Shareholder should consult and seek individual advice from an appropriate professional adviser.

To the extent permitted by applicable law and in accordance with normal practice pursuant to Irish law and the Euronext Growth Rules, the Company, Davy or any of their respective affiliates, may from time to time and during the pendency of the Tender Offer, and other than pursuant to the Tender Offer, make certain purchases of, or arrangements to purchase, Ordinary Shares outside the United States in reliance on applicable exemptions from the requirements of Regulation 14E, including sales and purchases of Ordinary Shares effected by Davy acting as market maker in the Ordinary Shares. These purchases, or other arrangements, may occur either in the open market at prevailing prices or in private transactions at negotiated prices and information about such purchases will be disclosed by means of a press release or other means reasonably calculated to inform the US Holder of such information, and if required, via any other means required by the Euronext Growth Rules or any applicable Irish law.

While the Tender Offer is being made available to Shareholders in the United States, the right to tender Ordinary Shares is not being made available in any jurisdiction in the United States in which the making of the Tender Offer or the right to tender such Ordinary Shares would not be in compliance with the laws of such jurisdiction.

Neither the US Securities and Exchange Commission nor any US state securities commission has approved or disapproved the Tender Offer, passed any comments upon the merits or fairness of the Tender Offer, passed any comment upon the adequacy or completeness of the Circular or passed any comment on whether the content in the Circular is correct or complete. Any representation to the contrary is a criminal offence in the United States.

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February 16, 2023 02:00 ET (07:00 GMT)