NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

 

THIS ANNOUNCEMENT IS DEEMED BY PI INDUSTRIES LTD AND PLANT HEALTH CARE PLC TO CONTAIN INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION NO 596/2014 (INCORPORATED INTO UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 AS AMENDED BY VIRTUE OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN

 

FOR IMMEDIATE RELEASE

26 June 2024

RECOMMENDED CASH ACQUISITION

of

PLANT HEALTH CARE PLC

by

PI INDUSTRIES LTD.

to be effected by means of a Scheme of Arrangement

under Part 26 of the Companies Act 2006

Summary

·    The board of directors of PI Industries Ltd. ("PI" or, in respect of this Announcement, "Bidco"), and the board of directors of Plant Health Care plc ("PHC") are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Bidco for the entire issued and to be issued share capital of PHC (the "Acquisition").

·      Under the terms of the Acquisition, each PHC Shareholder will be entitled to receive:

o  9.0 pence in cash for each PHC Share held

·     The Acquisition values the entire issued and to be issued ordinary share capital of PHC at approximately £32.8 million and represents a premium of approximately:

o  57.2 per cent. to the Closing Price of 5.7 pence per PHC Share on 25 June 2024 (being the last Business Day prior to the Announcement Date (the "Last Practicable Date"));

o  94.6 per cent. to 4.6 pence, being the three-month Volume Weighted Average Price to the Last Practicable Date; and

o  111.8 per cent. to 4.3 pence, being the six-month Volume Weighted Average Price to the Last Practicable Date.

·     PI intends to incorporate a new company as offeror prior to the publication of the Scheme Document. Any such entity will be a private limited company incorporated in Dubai and will be a wholly owned direct subsidiary of PI. Further details in relation to a new offeror, if incorporated, will be contained in the Scheme Document. PI will guarantee all obligations of any newly incorporated offeror with regards to that offeror's performance of its obligations under the Takeover Code.  

·    The cash consideration payable to the PHC Shareholders under the terms of the Acquisition will be funded from the existing cash resources of the Wider PI Group.

Background to and reasons for the Acquisition

·   PI has held a leading position in the agricultural inputs industry for over 60 years and benefits from its presence across the complete value chain from product innovation to process development, and large-scale manufacturing to distribution. It has a strong legacy of market-leading brands that bring value-added offerings to millions of farmers and retailers in India and has a number of global partnerships in the agricultural inputs market.

·    PHC is a leading peptide company in the agricultural industry, with innovative technology and enhanced manufacturing capabilities. PI acknowledges PHC's expertise in molecular biology, strain engineering, protein and peptide design, engineering optimisation through fermentation, bioactivity assay, and analytical capabilities. The Acquisition of PHC will enable PI to offer a balanced portfolio of chemical and biological solutions.

·   The Board of PI believes the Acquisition represents an attractive opportunity to scale up PHC's existing portfolio of novel biocontrol and biostimulant products and pipeline. It believes that the commercial scale-up of PHC's products can be expedited by leveraging PI's ability to scale the commercialisation process through utilising its complementary technologies, expertise and infrastructure. PI would also be able to provide the required financial investment to alleviate PHC's financial requirements alongside the benefit of its decades of experience to allow PHC's product portfolio to scale and commercialise fully.

·    PI is continuously working on emerging and innovative technologies. The Board of PI believes that its world-class agri-sciences research and manufacturing capabilities, significant market reach in the large agricultural input market, and global partnerships, can be leveraged to enhance PHC's existing business.

·     PHC operates in regions such as Brazil and the USA, which are key growth geographies for PI. PHC's operations will also benefit from PI's existing presence in India, therefore providing a comprehensive geographic footprint to serve global markets better.

·   PI's strategy focuses on delivering innovative, differentiated, proprietary technologies, whilst solving growers' needs for high-performing pest control solutions to enhance farm productivity. The Board of PI believes that the Acquisition will enable it to enhance its proposition as one of the leading agricultural input innovators and providers of integrated solutions to growers.

·    The Acquisition will represent the first step in PI's broader strategy to strengthen its biological portfolio through acquiring early-stage, innovative technology platforms and investing in the integration and scaling of business operations. PI aims to build a robust pipeline of advanced agricultural solutions through continued M&A activities, focusing on complementary bolt-ons that enhance and diversify its offerings.

Recommendation

·    The PHC Directors, who have been so advised by Cavendish as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing advice to the PHC Directors, Cavendish has taken into account the commercial assessments of the PHC Directors. Cavendish is providing independent financial advice to the PHC Directors for the purposes of Rule 3 of the Code.

 

Accordingly, the PHC Directors intend to recommend unanimously that Scheme Shareholders vote (or procure the voting) in favour of the Scheme at the Court Meeting and that PHC Shareholders vote (or procure the voting) in favour of the Resolutions at the General Meeting (or, if Bidco exercises its right to implement the Acquisition by way of a Takeover Offer, to accept, or procure the acceptance of, such Takeover Offer), as each PHC Director holding PHC Shares (in a personal capacity or through members of their immediate families, related trusts or their nominee or nominees) has irrevocably undertaken to do in respect of their own beneficial holdings, amounting, in aggregate, to 9,661,995 PHC Shares (representing, in aggregate, approximately 2.83 per cent. of the PHC Shares in issue as at the close of business on the Last Practicable Date).

 

 

PHC Shareholder support: Irrevocable undertakings and letter of intent

·   In addition to the irrevocable undertakings from the PHC Directors referred to above, Bidco has also received irrevocable undertakings to vote (or procure the voting) in favour of the Scheme at the Court Meeting and Resolutions at the General Meeting (or, if Bidco exercises its right to implement the Acquisition by way of a Takeover Offer, to accept, or procure the acceptance of, such Takeover Offer) from Ospraie Ag Science LLC, Scobie Dickinson Ward and George Matelich in respect of 118,822,667 PHC Shares (representing, in aggregate, approximately 34.79 per cent. of the PHC Shares in issue on the Last Practicable Date).

·   In addition to the irrevocable undertakings from the PHC Directors and the irrevocable undertakings referred to above, Bidco has received a letter of intent to vote (or procure the voting) in favour of the Scheme at the Court Meeting and the Resolution(s) at the General Meeting (or, if Bidco exercises its right to implement the Acquisition by way of Takeover Offer, to accept or procure the acceptance of, such Takeover Offer) from Lombard Odier Asset Management (Europe) Limited, acting in its capacity as discretionary investment manager or sub-adviser for and on behalf of certain funds and accounts managed by it and/or as agent of Lombard Odier Asset Management (USA) Corp acting in its capacity as discretionary investment manager for and on behalf of certain and accounts managed by it, in respect of 13,638,055 PHC Shares (representing, in aggregate, approximately 3.99 per cent. of the PHC Shares in issue on the Last Practicable Date).

·   In total therefore, Bidco has received irrevocable undertakings and a letter of intent with respect to 142,122,717 PHC Shares (representing, in aggregate, approximately 41.61 per cent. of the PHC Shares in issue as at the close of business on the Last Practicable Date).

·      Full details of the irrevocable undertakings and letter of intent received by Bidco are set out in Appendix III to this Announcement.

Information on PHC

·     PHC (AIM: PHC) is a leading provider of novel patent-protected biological products to global agriculture markets, admitted to trading on AIM.

·     PHC's core patented products act as "vaccines for plants" making plants healthier, better able to resist disease and stress, thereby improving crop yield and quality.

·     PHC was founded in 1994 in the United States with the aim to become the leading provider of biological alternatives to synthetic chemical products for plants and soil and has been admitted to trading on AIM since 2004.

·   PHC's products support sustainable food production by using environmentally sustainable products to enable farmers to produce more from less land, whilst protecting soils and biodiversity and reducing reliance on chemical fertilisers.

·    PHC currently offers three products, Harpinαβ, a recombinant protein which acts as a powerful biostimulant promoting the yield and quality of crops, PHC279, a novel harpin derived peptide that amplifies a plant's natural defence against a range of diseases, and PHC949, a novel harpin derived peptide used to control damaging soil nematodes.

·    PHC currently distributes its products through its worldwide partners based in the USA, Brazil, Argentina, Chile, the UK, China, and mainland Europe and Mexico.

Information on PI

·     PI (NSE: PIIND, BSE: 523642) is a leading agrisciences company, manufacturing and distributing a variety of crop inputs and other fine chemicals for a customer base across Asia, the Americas, Africa and Europe.

·     Headquartered in Gurugram, India, PI was founded in 1946 and exports to over 30 countries, operating out of four global offices. It is listed on the National Stock Exchange of India and the Bombay Stock Exchange.

·      PI's business model operates on three core pillars; Research and Development (R&D), Custom Synthesis and Manufacturing, and Marketing & Distribution. It has a track record of identifying emerging and innovative opportunities within the agrichemical space and committing investment into them. PI has also forayed into the pharmaceutical CDMO business through its wholly owned subsidiary by acquisition of two entities in the year 2023.

·    PI offers R&D services such as target discovery, molecule design, library synthesis, lead optimization, biological evaluation and route synthesis. PI's Custom Synthesis and Manufacturing capabilities help develop, scale up and manufacture identified emerging opportunities alongside their Distribution Services which assist companies with evaluation and trials as well as marketing and distribution through their global platform.

·  PI is committed to delivering innovative and integrated solutions to its customers while integrating Environmental, Social and Governance (ESG) practices into the business strategy for sustainable value creation and building a healthier plant.

General

·    If any dividend and/or distribution and/or other return of capital or value is authorised, announced, declared, made or paid or becomes payable in respect of the PHC Shares on or after the Announcement Date and with a record date prior to the Effective Date, Bidco reserves the right to reduce the consideration payable under the Acquisition in respect of each PHC Share by the aggregate amount of all or part of any such dividend and/or other distribution and/or other return of capital or value. If Bidco exercises its right or makes such a reduction in respect of a dividend and/or other distribution and/or other return of capital or value, PHC Shareholders will be entitled to receive and retain such dividend and/or other distribution and/or other return of capital or value.

 

·    It is intended that the Acquisition will be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act (although Bidco reserves the right to effect the Acquisition by way of a Takeover Offer, with the consent of the Takeover Panel). The purpose of the Scheme is to provide for Bidco to become the owner of the whole of the issued and to be issued ordinary share capital of PHC.

·     The Acquisition is subject to the Conditions and certain further terms set out in Appendix I and to the full terms and conditions which will be set out in the Scheme Document. The Conditions include:

o  the approval by a majority in number of Scheme Shareholders present, entitled to vote and voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Scheme Shares voted;

o  the approval of the Resolutions by the requisite majority or majorities of PHC Shareholders at the General Meeting;

o  the sanction of the Scheme by the Court; and

o  the Scheme becoming Effective by no later than the Long Stop Date.

·      It is expected that the Scheme Document, containing further information about the Acquisition and notices of the Court Meeting and General Meeting, together with associated Forms of Proxy, will be published within 28 days of this Announcement (or such later time as may be agreed by the Takeover Panel) and the Court Meeting and the General Meeting are each expected to be held as soon as possible thereafter, giving the required notice for such meetings. The Scheme Document will be made available by PHC at https://www.planthealthcare.com/ , subject to certain restrictions to persons in Restricted Jurisdictions.

·    The Scheme is currently expected to become Effective during Q3 2024, subject to the satisfaction or (where applicable) waiver of the Conditions. An expected timetable of key events relating to the Acquisition will be provided in the Scheme Document.

Commenting on the Acquisition, Mayank Singhal, Vice Chairman and Managing Director of PI, said:

"We are very pleased to join forces with Plant Health Care, whose technology solutions perfectly align with our vision for the future of agriculture. This investment underscores our confidence in their technology platform and by joining forces, we can amplify our collective impact and bring groundbreaking solutions to farmers worldwide."

Commenting on the Acquisition, Rajnish Sarna, Joint Managing Director of PI, said:

"Acquisition of Plant Health Care is a strategic move to expand our portfolio in the agri-tech sector. We believe synergies between our organisations will unlock substantial value and accelerate growth. Together, we will drive significant advancements in sustainable agriculture."

Commenting on the Acquisition, Chris Richards, Chairman of PHC, said:

"In discussion with PI over the last few months, it has become clear that PI has the heft, the capability and the determination to underpin the next phase of growth of Plant Health Care's exciting journey. The offer price represents a significant premium to the current share price and allows Shareholders to realise immediate and attractive value for their shareholding."

Commenting on the Acquisition, Jeff Tweedy, Chief Executive Officer of PHC, said:

"Plant Health Care has exceptional technology and is building a strong commercial capability around the world. The additional investment from PI will enable the company to accelerate the development of the company. The management team looks forward to working with PI to make this a reality."

 

This summary should be read in conjunction with, and is subject to, the full text of this Announcement and its Appendices. In particular, the Acquisition is subject to the Conditions and certain further terms set out in Appendix I and to the full terms and conditions which will be set out in the Scheme Document. Appendix II contains details of sources of information and bases of calculation contained in this Announcement. Appendix III contains certain details relating to the irrevocable undertakings and letter of intent referred to in this Announcement. Appendix IV contains definitions of certain terms used in this Announcement.

Enquiries:

PI Industries Ltd Rajnish Sarna, Joint Managing Director	Tel: +91 124 6790000
Zeus (financial adviser to PI) Nick Cowles James Edis Louisa Waddell	Tel: +44 20 3829 5000
Plant Health Care plc Jeff Tweedy, CEO	Tel: +1 919 926 1600
Cavendish (Rule 3 adviser, financial adviser, nominated adviser and corporate broker to PHC) Neil McDonald Pete Lynch	Tel: +44 131 220 6939

 

Shoosmiths LLP is retained as legal adviser to PI.

DWF Law LLP is retained as legal adviser to PHC.

Important Notices

Zeus Capital Limited ("Zeus"), which is authorised and regulated by the FCA in the United Kingdom, is acting exclusively for PI as financial adviser and no one else in connection with the matters referred to in this Announcement and will not be responsible to anyone other than PI for providing the protections afforded to clients of Zeus, or for providing advice in relation to the matters referred to in this Announcement. Neither Zeus nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Zeus in connection with the matters referred to in this Announcement, any statement contained herein or otherwise.

Cavendish Capital Markets Limited ("Cavendish"), which is authorised and regulated in the United Kingdom by the FCA, is acting as Rule 3 adviser, joint financial adviser, nominated adviser and joint corporate broker to PHC and no one else in connection with the matters referred to in this Announcement and will not regard any other person as its client in relation to such matters referred to in this Announcement and will not be responsible to anyone other than PHC for providing the protections afforded to clients of Cavendish, nor for providing advice in relation to any matter referred to in this Announcement. Neither Cavendish nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Cavendish in connection with the matters referred to in this Announcement, any statement contained herein or otherwise.

Further Information

This Announcement is for information purposes only and is not intended to and does not constitute, or form any part of, an offer to sell or subscribe for or any invitation to purchase or otherwise acquire, subscribe for, sell or otherwise dispose of or exercise rights in respect of, any securities or the solicitation of any vote or approval of an offer to buy securities in any jurisdiction pursuant to the Acquisition or otherwise nor shall there be any sale, issuance or transfer of any securities pursuant to the Acquisition in any jurisdiction in contravention of any applicable laws. The Acquisition will be implemented solely through and on the terms set out in the Scheme Document and the accompanying Forms of Proxy (or, in the event that the Acquisition is to be implemented by means of a Takeover Offer, the Offer Document and acceptance), which will contain the full terms and conditions of the Acquisition and the Scheme, including details of how to vote in respect of, or to accept, the Acquisition and/or the Scheme. Any approval, decision or other response to the Acquisition should be made only on the basis of the information in the Scheme Document (or if the Acquisition is implemented by way of a Takeover Offer, the Offer Document). PHC Shareholders are strongly advised to read the formal documentation in relation to the Acquisition and the Scheme carefully once it has been despatched as it will contain important information relating to the Acquisition and the Scheme.

This Announcement does not constitute a prospectus or a prospectus exempted document.

The statements contained in this Announcement are made as at the Announcement Date, unless some other time is specified in relation to them, and the publication of this Announcement shall not give rise to any implication that there has been no change in the facts set forth in this Announcement since such date.

Overseas Shareholders

This Announcement has been prepared for the purpose of complying with English law, the AIM Rules, the Code and the Market Abuse Regulation and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

The release, publication or distribution of this Announcement in certain jurisdictions other than the United Kingdom may be restricted by law and/or regulations and such laws and/or regulations may affect the availability of the Acquisition to persons who are not resident in the United Kingdom. Persons who are not resident in the United Kingdom, or who are subject to laws of any jurisdiction other than the United Kingdom, should inform themselves about, and observe, any applicable requirements. Any failure to comply with the applicable legal or regulatory requirements may constitute a violation of the laws and/or regulations of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility and liability for the violation of such restrictions by any person.

Any person (including, without limitation, nominees, trustees and custodians) who would, or otherwise intends to, forward this Announcement, the Scheme Document or any accompanying document(s) to any jurisdiction outside the United Kingdom should refrain from doing so and seek appropriate professional advice before taking any action. In particular, the ability of persons who are not resident in the United Kingdom to vote their PHC Shares at the Court Meeting and/or the General Meeting, or to execute and deliver Forms of Proxy appointing another to vote their PHC Shares in respect of the Court Meeting and/or the General Meeting on their behalf, may be affected by the laws of the relevant jurisdiction in which they are located. The Acquisition will be subject to the applicable requirements of the Code, the Takeover Panel, the London Stock Exchange (including the AIM Rules) and the FCA.

Unless otherwise determined by PI or required by the Code, and permitted by applicable law and regulation, the Acquisition will not be made, directly or indirectly, in or into or by use of the mails or any other means or instrumentality (including, without limitation, telephonic or electronic) of interstate or foreign commerce of, or any facility of a national, state or other securities exchange of, a Restricted Jurisdiction where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction, and no person may vote in favour of the Acquisition, and the Acquisition will not be capable of acceptance, by any such use, means, instrumentality or facility or from within a Restricted Jurisdiction. Accordingly, copies of this Announcement and formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded or distributed in, into or from a Restricted Jurisdiction and persons receiving this Announcement (including custodians, nominees and trustees) must not distribute or send it into or from a Restricted Jurisdiction. Doing so may render invalid any related purported vote in respect of the Acquisition. If the Acquisition is implemented by way of a Takeover Offer (unless otherwise permitted by applicable law and regulation), the Takeover Offer may not be made, directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Takeover Offer may not be capable of acceptance by any such use, means, instrumentality or facilities.

In the event that the Acquisition is implemented by way of a Takeover Offer and extended into the US, PI will do so in satisfaction of the procedural and filing requirements of the US securities laws at that time, to the extent applicable thereto. Neither the US Securities and Exchange Commission, nor any securities commission of any state of the US, has approved or disapproved any offer, or passed comment upon the adequacy or completeness of any of the information contained in this Announcement. Any representation to the contrary may be a criminal offence.

The Acquisition relates to the shares of a company incorporated in England and it is proposed to be made by means of a scheme of arrangement provided for under English law. A transaction effected by means of a scheme of arrangement is not subject to the shareholder vote, proxy solicitation and tender offer rules under the US Exchange Act. Accordingly, the Scheme will be subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement, which differ from the disclosure requirements and practices of US shareholder vote, proxy solicitation and tender offer rules.

If PI were to elect to implement the Acquisition by means of a Takeover Offer, such Takeover Offer shall be made in compliance with all applicable laws and regulations, including section 14(e) of the US Exchange Act and Regulation 14E thereunder. Such Takeover Offer would be made in the US by Bidco and no one else.

In addition to any such Takeover Offer, PI, certain affiliated companies and the nominees or brokers (acting as agents) of PI and/or such affiliated companies may make certain purchases of, or arrangements to purchase, PHC Shares outside such Takeover Offer during the period in which such Takeover Offer would remain open for acceptance. If such purchases or arrangements to purchase are made, they would be made outside the United States in compliance with applicable law, including the US Exchange Act.

The receipt of cash consideration by a PHC Shareholder for the transfer of their PHC Shares pursuant to the Scheme will be a taxable transaction for United States federal income tax purposes and under applicable US state and local, as well as overseas and other, tax laws. In certain circumstances, PHC Shareholders that are not US persons and that receive cash consideration pursuant to the Scheme may be subject to US withholding tax. Each PHC Shareholder is urged to consult an independent professional adviser regarding the applicable tax consequences of the Acquisition, including under applicable United States, state and local, as well as overseas and other tax laws.

Financial information relating to PHC included in this Announcement and to be included in the Scheme Document has been or will have been prepared in accordance with accounting standards applicable in the United Kingdom and may not be comparable to the financial statements of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States ("US GAAP"). US GAAP differs in certain significant respects from accounting standards applicable in the United Kingdom.

It may be difficult for a US-based investor to enforce their rights and any claim they may have arising under US securities laws, since the Scheme relates to the shares of a company incorporated under the laws of, and located in, the United Kingdom, and some or all of its officers and directors may be residents of non-US jurisdictions. A US-based investor may not be able to sue a company located in the United Kingdom, or its officers or directors, in a foreign court for alleged violations of US securities laws, and it may be difficult to compel a foreign company and its affiliates to subject themselves to a US court's judgment. In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act, PI, certain affiliated companies and their nominees or brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, PHC Shares outside of the US, other than pursuant to the Acquisition, until the date on which the Acquisition and/or Scheme becomes Effective, lapses or is otherwise withdrawn. Also, in accordance with Rule 14e-5(b) of the US Exchange Act, each of Zeus and Cavendish will continue to act as an exempt principal trader in PHC Shares on the London Stock Exchange. If such purchases or arrangements to purchase were to be made, they would occur either in the open market at prevailing prices or in private transactions at negotiated prices and comply with applicable law, including the US Exchange Act. Any information about such purchases will be disclosed as required in the UK, will be reported to the Regulatory News Service of the London Stock Exchange and will be available on the London Stock Exchange website at www.londonstockexchange.com.

Further details in relation to Overseas Shareholders will be contained in the Scheme Document.

Forward-looking statements

This Announcement may contain certain "forward-looking statements" with respect to PHC and PI. These forward-looking statements can be identified by the fact that they do not relate to historical or current facts. Forward-looking statements are based on current expectations and projections about future events and are therefore subject to known and unknown risks and uncertainties which could cause actual results, performance or events to differ materially from the future results, performance or events expressed or implied by the forward-looking statements. Forward-looking statements often, but not always, use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words or terms of similar meaning or the negative thereof. Forward-looking statements include, but are not limited to, statements relating to the following: (a) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (b) business and management strategies of PI and/or PHC and the expansion and growth of PHC; (c) any potential synergies resulting from the Acquisition; and (d) the expected timing and scope of the Acquisition. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations.

These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance and/or developments to differ materially from those expressed in or implied by such forward-looking statements. These forward-looking statements are based on numerous assumptions regarding present and future strategies and environments. None of PI or PHC, nor any of their respective associates, directors, officers, employees or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur. You are cautioned not to place undue reliance on such forward-looking statements, which speak only as of this Announcement. All subsequent oral or written forward-looking statements attributable to PI or PHC or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above. 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 Announcement. PI and PHC assume no obligation to update publicly or revise forward-looking or other statements contained in this Announcement, whether as a result of new information, future events or otherwise, except to the extent legally required.

There are a number of factors which could cause actual results and developments to differ materially from those expressed or implied in forward-looking statements. The factors that could cause actual results to differ materially from those described in the forward-looking statements include, but are not limited to: the ability to complete the Acquisition; the ability to obtain requisite regulatory and shareholder approvals and the satisfaction of other Conditions on the proposed terms; changes in the global, political, economic, business and competitive environments and in market and regulatory forces; changes in future exchange and interest rates; changes in tax rates; future business combinations or dispositions; changes in general and economic business conditions; changes in the behaviour of other market participants; the anticipated benefits of the Acquisition not being realised as a result of changes in general economic and market conditions in the countries in which PI and PHC operate; weak, volatile or illiquid capital and/or credit markets; changes in the degree of competition in the geographic and business areas in which PI and PHC operate; and changes in laws or in supervisory expectations or requirements. Other unknown or unpredictable factors could cause actual results to differ materially from those expected, estimated or projected in the forward-looking statements. If any one or more of these risks or uncertainties materialises or if any one or more of the assumptions proves incorrect, actual results may differ materially from those expected, estimated or projected. Such forward-looking statements should therefore be construed in the light of such factors.

No forward-looking or other statements have been reviewed by the auditors of PI or any company in the Wider PI Group or the Wider PHC Group. All subsequent oral or written forward-looking statements attributable to PI, any company in the Wider PI Group, PHC, or any company in the Wider PHC Group or to any of their respective associates, directors, officers, employees or advisers or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above.

No profit forecasts or estimates

Save as expressly set out herein, no statement in this Announcement is intended as a profit forecast or profit estimate for PI or PHC in respect of any period and no statement in this Announcement should be interpreted to mean that cash flow from operations, earnings or earnings per PHC Share or income for PHC for the current or future financial years would necessarily match or exceed the historical published cash flow from operations, earnings or earnings per PHC Share or income of PHC.

Publication on website

In accordance with Rule 26.1 and 26.2 of the Code, a copy of this Announcement will be made available (subject to certain restrictions relating to persons resident in Restricted Jurisdictions), free of charge, on PHC's website at https://www.planthealthcare.com/disclaimer by no later than 12:00 noon on the Business Day following the Announcement Date. Neither the contents of this website nor the content of any other website accessible from hyperlinks on such websites is incorporated into, or forms part of, this Announcement.

Requesting hard copies

In accordance with Rule 30.3 of the Code, a person so entitled may request a hard copy of this Announcement, free of charge, by contacting Neville Registrars Limited on 0121 585 1131 (or from outside of the UK, on +44 (0) 121 585 1131) between 9.00 a.m. to 5.00 p.m. Monday to Friday (London time) or by submitting a request in writing to Neville Registrars Limited, Neville House, Steelpark Road, Halesowen, West Midlands, United Kingdom, B62 8HD). For persons who receive a copy of this Announcement in electronic form or via a website notification, a hard copy of this Announcement will not be sent unless so requested. In accordance with Rule 30.3 of the Code, a person so entitled may also request that all future documents, announcements and information to be sent to them in relation to the Acquisition should be in hard copy form.

Electronic communications - information for PHC Shareholders

Please be aware that addresses, electronic addresses (if any) and certain information provided by PHC Shareholders, persons with information rights and other relevant persons for the receipt of communications from PHC may be provided to offerors (including PI) during the Offer Period as required under section 4 of Appendix 4 of the Code to comply with Rule 2.11(c) of the Code.

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different paragraphs and/or tables may vary slightly and figures shown as totals in certain paragraphs and/or tables may not be an arithmetic aggregation of the figures that precede them.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the Offer Period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of: (a) the offeree company; and (b) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) of the Code applies must be made by no later than 3.30 pm on the 10th Business Day (as defined in the Code) following the commencement of the Offer Period and, if appropriate, by no later than 3.30 pm on the 10th Business Day (as defined in the Code) following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of: (a) the offeree company; and (b) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8 of the Code. A Dealing Disclosure by a person to whom Rule 8.3(b) of the Code applies must be made by no later than 3.30 pm on the Business Day (as defined in the Code) following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3 of the Code.

Opening Position Disclosures must also be made by the offeree company and by any offeror, and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of the Code).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the Offer Period commenced and when any offeror was first identified. You should contact the Takeover Panel's Market Surveillance Unit on +44 (0) 20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Rule 2.9 of the Code

For the purposes of Rule 2.9 of the Code, PHC confirms that, as at close of business on the Last Practicable Date, it had in issue, and admitted to trading on the AIM Market of the London Stock Exchange, 341,532,952 PHC Shares. No shares are held in treasury. The ISIN for the PHC Shares is GB00B01JC540.

General

PI reserves the right to elect (with the consent of the Takeover Panel, if required) to implement the Acquisition by way of a Takeover Offer for the entire issued and to be issued ordinary share capital of PHC not already by the Wider PI Group as an alternative to the Scheme. In such an event, a Takeover Offer will be implemented on substantially the same terms, so far as applicable, as those which would apply to the Scheme.

If the Acquisition is effected by way of Takeover Offer, and if sufficient acceptances of the Takeover Offer are received and/ or sufficient PHC Shares are otherwise acquired, PI intends to apply the provisions of the Companies Act so as to compulsorily acquire any outstanding PHC Shares to which the Takeover Offer relates.

If you are in any doubt about the contents of this Announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor or independent financial adviser duly authorised under the FSMA if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

THIS ANNOUNCEMENT IS DEEMED BY PI INDUSTRIED LTDAND PLANT HEALTH CARE PLC TO CONTAIN INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION NO 596/2014 (INCORPORATED INTO UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 AS AMENDED BY VIRTUE OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN

 

FOR IMMEDIATE RELEASE

 

26 June 2024

RECOMMENDED CASH ACQUISITION

of

PLANT HEALTH CARE PLC

by

PI INDUSTRIES LTD

 to be effected by means of a Scheme of Arrangement

under Part 26 of the Companies Act 2006

1.         Introduction

The board of directors of PI Industries Ltd ("PI" or, in respect of this Announcement, "Bidco"), and the board of directors of Plant Health Care plc ("PHC") are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Bidco for the entire issued and to be issued share capital of PHC (the "Acquisition").

It is intended that the Acquisition will be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act (although Bidco reserves the right to effect the Acquisition by way of a Takeover Offer, with the consent of the Takeover Panel) and will be subject to the approval of the Scheme at the Court Meeting and the Resolutions at the General Meeting.

2.         The Acquisition

Under the terms of the Acquisition, which will be subject to the Conditions and certain further terms set out in Appendix I and to the full terms and conditions which will be set out in the Scheme Document, each PHC Shareholder will be entitled to receive:

9.0 pence in cash for each PHC Share held

The Acquisition values the entire issued and to be issued ordinary share capital of PHC at approximately £32.8 million and represents a premium of approximately:

·      57.2 per cent. to the Closing Price of 5.7 pence per PHC Share on 25 June 2024 (being the Last Practicable Date);

·     94.6 per cent. to 4.6 pence, being the three-month Volume Weighted Average Price to the Last Practicable Date; and

·     111.8 per cent. to 4.3 pence, being the six-month Volume Weighted Average Price to the Last Practicable Date.

3.         Dividends

If any dividend and/or distribution and/or other return of capital or value is authorised, announced, declared, made or paid or becomes payable in respect of the PHC Shares on or after the Announcement Date and with a record date prior to the Effective Date, Bidco reserves the right to reduce the consideration payable under the Acquisition in respect of each PHC Share by the aggregate amount of all or part of any such dividend and/or other distribution and/or other return of capital or value. If Bidco exercises its right or makes such a reduction in respect of a dividend and/or other distribution and/or other return of capital or value, PHC Shareholders will be entitled to receive and retain such dividend and/or other distribution and/or other return of capital or value.

4.         Background to and reasons for the Acquisition

PI has held a leading position in the agricultural inputs industry for over 60 years and benefits from its presence across the complete value chain from product innovation to process development, and large-scale manufacturing to distribution. It has a strong legacy of market-leading brands that bring value-added offerings to millions of farmers and retailers in India and has a number of global partnerships in the agricultural inputs market.

PHC is a leading peptide company in the industry, with innovative technology and enhanced manufacturing capabilities. PI acknowledges PHC's expertise in molecular biology, strain engineering, protein and peptide design, engineering optimisation through fermentation, bioactivity assay, and analytical capabilities. The Acquisition of PHC will enable PI to offer a balanced portfolio of chemical and biological solutions.

The Board of PI believes the Acquisition represents an attractive opportunity to scale up PHC's existing portfolio of novel biocontrol and biostimulant products and pipeline. It believes that the commercial scale-up of PHC's products can be expedited by leveraging PI's ability to scale the commercialisation process through utilising its complementary technologies, expertise and infrastructure. PI would also be able to provide the required financial investment to alleviate PHC's financial requirements alongside the benefit of its decades of experience to allow PHC's product portfolio to scale and commercialise fully.

PI is continuously working on emerging and innovative technologies. The Board of PI believes that its world-class agri-sciences research and manufacturing capabilities, significant market reach in the large agricultural input market, and global partnerships, can be leveraged to enhance PHC's existing business scale.

PHC operates in regions such as Brazil and the USA, which are key growth geographies for PI. PHC's operations will also benefit from PI's existing presence in India, therefore providing a comprehensive geographic footprint to serve global markets better.

PI's strategy focuses on delivering innovative, differentiated, proprietary technologies, whilst solving growers' needs for high-performing pest control solutions to enhance farm productivity. The Board of PI believes that the Acquisition will enable it to enhance its proposition as one of the leading agricultural input innovators and providers of integrated solutions to growers.

The Acquisition will represent the first step in PI's broader strategy to strengthen its biological portfolio through acquiring early-stage, innovative technology platforms and investing in the integration and scaling of business operations. PI aims to build a robust pipeline of advanced agricultural solutions through continued M&A activities, focusing on complementary bolt-ons that enhance and diversify its offerings.

5.         Recommendation

The PHC Directors, who have been so advised by Cavendish as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing financial advice to the PHC Directors, Cavendish has taken into account the commercial assessments of the PHC Directors. Cavendish is providing independent financial advice to the PHC Directors for the purposes of Rule 3 of the Code.

 

Accordingly, the PHC Directors intend unanimously to recommend that Scheme Shareholders vote (or procure the voting) in favour of the Scheme at the Court Meeting and that PHC Shareholders vote (or procure the voting) in favour of the Resolutions at the General Meeting (or, if Bidco exercises its right to implement the Acquisition by way of a Takeover Offer, to accept, or procure the acceptance of, such Takeover Offer), as each PHC Director holding PHC Shares (in a personal capacity or through members of their immediate families, related trusts or a nominee or nominees) has irrevocably undertaken to do in respect of their own beneficial holdings, amounting, in aggregate, to 9,661,995 PHC Shares (representing, in aggregate, approximately 2.83 per cent. of the PHC Shares in issue as at the close of business on the Last Practicable Date).

 

 

6.         Background to and reasons for the recommendation

Since its foundation in 1994, PHC has become a leading provider of novel patent-protected biological products to global agriculture markets, with agreements currently in place with six multinational and multiple regional distribution partners in major crops. The development of the PREtec platform has delivered a product pipeline based on an environmentally friendly technology that aims to stimulate crop growth and the ability to withstand a variety of biotic and abiotic stresses, leading to increased crop yields.

PHC has evolved its commercial business which is built on the core sales of Harpinαβ via its global distributors. Notwithstanding the opportunities to accelerate the market penetration of Harpinαβ and accelerate the launch of PREtec products globally, the PHC Directors are conscious of the need to balance the opportunities with the uncertainties and risks that exist for a business at this stage of its development.

PHC is subject to the challenges facing the global agriculture market, most recently by the unprecedented destocking by US distributors. The sector events experienced over the course of the previous 18 months have affected companies of all scales and stages of development and the PHC Directors are cognisant of these risks coupled with the wider economic impact of inflationary pressures on certain input costs of PHC.

When considering the future prospects of PHC and how best to capitalise on the opportunities ahead, the PHC Directors have come to the conclusion that PHC will require capital and resources beyond the scale of the internally generated cash flows that PHC can deliver.

In addition, the PHC Directors appreciate that the market for trading in the PHC Shares has become increasingly illiquid in recent times, removing one of the key benefits of maintaining its admission to AIM. Accordingly, the PHC Directors believe that in the absence of an offer for PHC, there can be no guarantee that PHC Shareholders (especially those with significant shareholdings) will be able to sell their entire shareholding in PHC on the market, should they wish to do so, as a price of 9.0 pence or better, in the short to medium term.

The PHC Directors believe that the offer from PI of 9.0 pence per PHC Share in cash presents an opportunity for PHC Shareholders to accelerate the crystallisation of a certain value from their investment at an attractive premium, de-risks the return of value and allows full liquidity of their investment in PHC. Given the balance of opportunities and risks in front of PHC, the PHC Directors believe that the PI offer represents the best solution for all Shareholders and stakeholders alike.

Coupled with this, the PHC Directors have considered that:

·   The considerable economic turmoil over the past 18 months has had a significant impact on the financial performance of many businesses. Whilst benefitting from strong customer relationships and market position, PHC has been, and continues to be, affected by this instability and resultant sector destocking;

·   The management team and staff of PHC are one of its key assets. The PHC Directors believe that the motivation and incentivisation of those employees is of fundamental importance in driving operational performance and they believe that the PHC Shares do not, and are unlikely to, provide sufficient incentive to key employees;

·      PHC's trading performance and growth potential have not, in the view of the PHC Board, been appropriately reflected in the price and valuation of PHC Shares on AIM. In the current equity market environment, the PHC Directors believe that the terms of the offer by PI represent attractive value relative to the risk of ongoing suppressed capital markets;

·    The risk and uncertainties of the current market environment, including the prevailing geopolitical uncertainty and economic conditions, may increase the execution risk of PHC's strategy as an independent business;

·    In light of the valuation of PHC's Shares on AIM, raising significant capital to enable PHC to fulfil its growth potential would likely be highly dilutive to shareholder value; and

Based on the statements and assurances made by PI regarding its intentions for the business (as set out in paragraph 11 below), PI has the financial capability, know-how and market position to enable PHC to deliver on its opportunities and provide continuity for PHC customers, employees and other stakeholders. Accordingly, following careful consideration of the above factors, the PHC Directors intend to recommend unanimously that PHC Shareholders vote (or procure the voting) in favour of the Scheme at the Court Meeting and the Resolutions at the General Meeting.

 

7.         PHC Shareholder support: Irrevocable undertakings and letter of intent

Bidco has received irrevocable undertakings to vote (or procure the voting) in favour of the Scheme at the Court Meeting and the Resolutions at the General Meeting (or, if Bidco exercises its right to implement the Acquisition by way of a Takeover Offer, to accept, or procure the acceptance of, such Takeover Offer) from each PHC Director holding PHC Shares (in a personal capacity or through members of their immediate families, related trusts or a nominee or nominees) in respect of their entire beneficial holdings (and the beneficial holdings of members of their immediate families or related trusts or their nominee(s)) of PHC Shares, amounting, in aggregate, to 9,661,995 PHC Shares (representing, in aggregate, approximately 2.83 per cent. of the PHC Shares in issue as at the close of business on the Last Practicable Date).

In addition to the irrevocable undertakings from the PHC Directors referred to above, Bidco has also received irrevocable undertakings to vote (or procure the voting) in favour of the Scheme at the Court Meeting and Resolutions at the General Meeting (or, if Bidco exercises its right to implement the Acquisition by way of a Takeover Offer, to accept, or procure the acceptance of, such Takeover Offer) from Ospraie Ag Science LLC, Scobie Dickinson Ward and George Matelich in respect of 118,822,667 PHC Shares (representing, in aggregate, approximately 34.79 per cent. of the PHC Shares in issue as at the close of business on the Last Practicable Date).

In addition to the irrevocable undertakings from the PHC Directors and the irrevocable undertakings referred to above, Bidco has received a letter of intent to vote (or procure the voting) in favour of the Scheme at the Court Meeting and the Resolution(s) at the General Meeting (or, if Bidco exercises its right to implement the Acquisition by way of a Takeover Offer, to accept, or procure the acceptance of, such Takeover Offer) from Lombard Odier Asset Management (Europe) Limited, acting in its capacity as discretionary investment manager or sub-adviser for and on behalf of certain funds and accounts managed by it and/or as agent of Lombard Odier Asset Management (USA) Corp acting in its capacity as discretionary investment manager for and on behalf of certain and accounts managed by it, in respect of 13,638,055 PHC Shares (representing, in aggregate, approximately 3.99 per cent. of the PHC Shares in issue on the Last Practicable Date).

In total therefore, Bidco has received irrevocable undertakings and a letter of intent with respect to 142,122,717 PHC Shares (representing, in aggregate, approximately 41.61 per cent. of the PHC Shares in issue as at the close of business on the Last Practicable Date).

Full details of the irrevocable undertakings received by Bidco are set out in Appendix III to this Announcement.

8.         Information on PI

PI Industries Ltd (NSE: PIIND, BSE: 523642) is a leading agrisciences company, manufacturing and distributing a variety of Agri inputs and other fine chemicals for a customer base across Asia, the Americas, Africa and Europe.

Headquartered in Mumbai, India, PI was founded in 1946 and exports to over 30 countries, operating out of four global offices. It is listed on the National Stock Exchange of India and the Bombay Stock Exchange.

PI's business model operates on three core pillars: Research and Development (R&D), Custom Synthesis and Manufacturing, and Marketing & Distribution. It has a track record of identifying emerging and innovative opportunities within the agrichemical space and committing investment into them. PI has also forayed into the pharmaceutical CDMO business through a wholly owned subsidiary which acquired two entities in 2023.

PI offers R&D services such as target discovery, molecule design, library synthesis, lead optimization, biological evaluation and route synthesis. PI's Custom Synthesis and Manufacturing capabilities help develop, scale up and manufacture identified emerging opportunities alongside their Distribution Services which assist companies with evaluation and trials as well as marketing and distribution through their global platform.

PI is committed to delivering innovative and integrated solutions to its customers while integrating Environmental, Social and Governance (ESG) practices into the business strategy for sustainable value creation and building a healthier plant.

PI intends to incorporate a new company as offeror prior to the publication of the Scheme Document. Any such entity will be a private limited company incorporated in Dubai and will be a wholly owned direct subsidiary of PI. Further details in relation to a new offeror, if incorporated, will be contained in the Scheme Document. PI will guarantee all obligations of any newly incorporated offeror with regards to that offeror's performance of its obligations under the Takeover Code.

9.         Information on PHC

PHC (AIM: PHC) is a leading provider of novel patent-protected biological products to global agriculture markets, admitted to trading on AIM.

PHC's core patented products act as "vaccines for plants" making plants healthier, better able to resist disease and stress, thereby improving crop yield and quality.

PHC was founded in 1994 in the United States with the aim to become the leading provider of biological alternatives to synthetic chemical products for plants and soil and has been admitted to trading on AIM since 2004.

PHC's products support sustainable food production by using environmentally sustainable products to enable farmers to produce more from less land, whilst protecting soils and biodiversity and reducing reliance on chemical fertilisers.

PHC currently offers three products, Harpinαβ, a recombinant protein which acts as a powerful biostimulant promoting the yield and quality of crops, PHC279, a novel harpin derived peptide that amplifies a plant's natural defence against a range of diseases, and PHC949, a novel harpin derived peptide used to control damaging soil nematodes.

PHC currently distributes its products through its worldwide partners based in the USA, Brazil, Argentina, Chile, the UK, China, and mainland Europe and Mexico.

10.       PHC current trading and outlook

As of 12 June 2024, revenue was $6.4 million, up 27% versus the same the period in 2023. Gross margin increased 5% to 67% lead by increased sales of our PREtec and Harpinαβ proprietary products. PREtec revenue increased 28% through 12 June 2024 versus the same period in 2023 due to increased sales into the EMEAA region. Harpinαβ revenues through 15 June 2024 increased 48% versus the same period in 2023 due to the rebound in the USA market and continued organic growth in the EMEAA region. 

PHC's cash balance as at 12 June 2024 was $1.5million.  

11.       Management, employees, research and development and locations of PHC

Strategic plans

As set out in paragraph 4 of this Announcement, Bidco values PHC's technologies, especially its success in developing novel biocontrol and biostimulant products, and believes the Acquisition will enable PI to offer integrated agri-solutions across both chemicals and biologicals. Furthermore, the Acquisition will enhance the offering of the Wider PI Group and will represent the first step in PI's broader strategy to strengthen its biological portfolio through acquiring early-stage, innovative technology platforms and investing in the integration and scaling of business operations.

 

The Acquisition will help PI to establish its presence in certain agri-markets such as the USA, Brazil and Mexico, where PHC is currently operating. Bidco will also provide PHC with greater access to new geographies, by leveraging the Wider PI Group's presence and network of business partners. Such expansion will include, amongst others, India, other Asian countries and other geographies with a significant agricultural industry.

 

Acknowledging the challenges that PHC has faced over the years, PI believes it has the expertise, capabilities, scale, network, and resources to ensure PHC's growth aspirations are realised. It envisions that introducing PHC's portfolio of products into the existing infrastructure of the Wider PI Group will accelerate PHC's growth prospects, allow PHC's business to fully scale and consolidate its position in the global biologicals market.

 

Bidco would also be able to provide the required financial investment to alleviate PHC's capital constraints. Alongside the benefit of PI's decades of experience in the agricultural industry, the investment Bidco intends to make in PHC would allow PHC's management team to execute its growth strategy.

 

Bidco intends that PHC will continue to operate as a wholly-owned group of subsidiaries within the Wider PI Group. After the Effective Date, Bidco intends to undertake a detailed strategic review of the whole PHC business to identify synergies and opportunities to strengthen the development and distribution network of the Wider PHC Group, further investment opportunities in R&D and manufacturing, and strengthening of the support functions to help PHC achieve commercial excellence.

Bidco intends to invest in enhancing capabilities across various functional areas of PHC, predominantly product development, marketing, R&D and support functions. Bidco believes that these investments will help achieve the growth aspirations of the PHC business.

 

Directors, management and employees

Bidco values the skills, knowledge, and expertise of PHC's existing management team and employees, recognising their contribution to the business's achievements. It believes that the management team has been instrumental in developing a novel technology platform that can be leveraged.

Bidco believes that under its ownership, PHC's existing management and employees will benefit from enhanced opportunities provided by the Wider PI Group, given its broader activities and capabilities.

Bidco expects that PHC's senior management and employees will continue to contribute to its success. Bidco will consider further strengthening the management and functional teams to help them deliver PHC's growth plans. Bidco does not intend to initiate a headcount reduction exercise within the current PHC organisation. However, it is intended that each of the four PHC non-executive directors will resign from their office upon the Acquisition becoming Effective.

Bidco also does not intend to make any material changes to the conditions of employment or the balance of skills and functions amongst PHC employees and management.

Existing employment rights and pensions

Bidco intends that, following completion of the Acquisition, the statutory employment rights of all PHC employees, including with respect to pension obligations, will be fully safeguarded in accordance with applicable law.

Management incentivisation arrangements

Neither Bidco nor the Wider PI Group has entered into or discussed any form of incentivisation arrangements with any member of PHC's management and will not have any such discussions before the Effective Date.

Upon the Effective Date, Bidco intends to review PHC's existing incentivisation arrangements and, in due course, will consider putting in place appropriate arrangements, in consultation with PHC's key management team, that align with PHC's overall growth plan.

Research and development

Bidco believes continued research and development are important for PHC's long-term success and intends to increase investment in this area following the Effective Date to strengthen its capabilities and output.

Headquarters and fixed assets

After the Effective Date, Bidco and PHC's management team intend to jointly review the current fixed asset base and the locations of PHC's R&D facility and global headquarters. Once the review is complete, Bidco intends to make the necessary changes to improve the operational efficiencies of the assets, which may result in the relocation or redeployment of the identified assets. Bidco, however, intends to keep PHC's R&D function and global headquarters based in the US and does not intend to relocate any fixed asset outside of its current country of operation. To the extent changes are made, Bidco intends to retain any employees that would be impacted.

Bidco understands that PHC management are also considering developing additional manufacturing and supply sources, including establishing an in-house manufacturing site, to de-risk its current outsourced manufacturing. Bidco intends to review such investment proposals with PHC's management before proceeding with any decision.

Trading Facilities

The PHC Shares are currently admitted to trading on AIM. As set out in paragraph 16, subject to the Scheme becoming Effective, an application will be made to the London Stock Exchange to cancel the admission of the PHC Shares to trading on AIM on or shortly after the Effective Date. As also stated in paragraph 16, dealings in PHC Shares will be suspended on a date shortly prior to the Effective Date.

It is intended that PHC be re-registered as a private limited company on, or as soon as practicable following, the Effective Date.

No statements in this paragraph 11 are "post-offer undertakings" for the purposes of Rule 19.5 of the Code.

Views of the PHC Directors

In addition to the financial terms of the Acquisition, in considering the intention to recommend the Acquisition, the PHC Directors have also given due consideration to the assurances given by Bidco to its intentions with respect to the future operation of the business, including Bidco's intentions to seek to continue growing the business both domestically and internationally, and the importance placed by Bidco on the existing employees of PHC.

 

12.       Financing

The cash consideration payable by Bidco to PHC Shareholders under the terms of the Acquisition will be funded through the existing cash resources of PI.

Zeus, in its capacity as financial adviser to Bidco, is satisfied that sufficient resources are available to Bidco to enable it to satisfy in full the cash consideration payable to PHC Shareholders under the terms of the Acquisition.

Further information on the financing of the Acquisition will be set out in the Scheme Document.

13.       Offer-related arrangements

Confidentiality Agreement

A wholly owned subsidiary of PI, PI Life Sciences Research Limited and PHC entered into a confidentiality agreement dated 13 March 2024 (the "Confidentiality Agreement") pursuant to which, amongst other things, the parties have undertaken to: (a) subject to certain exceptions, keep confidential information relating to PHC confidential and not to disclose it to third parties; and (b) use such confidential information only in connection with the Acquisition. The confidentiality obligations remain in force for a period of between two to five years from the date of the Confidentiality Agreement (or, if earlier, upon the Scheme becoming Effective or, if the Acquisition is implemented by way of a Takeover Offer, the Takeover Offer being declared wholly unconditional). The Confidentiality Agreement also contains restrictions on PI soliciting or employing certain employees of PHC.

The Confidentiality Agreement further includes, amongst other things, standstill obligations which restricts PI from acquiring or offering to acquire interests in certain securities of PHC; those restrictions ceased to apply on the making of this Announcement.

The Confidentiality Agreement supersedes all previous confidentiality agreements between PI and PHC or entities controlled by them. This includes the confidentiality disclosure agreement dated 6 June 2023 between PHC Inc. and PI, which previously governed the provision of confidential information and its use in connection with the exploration of a possible business relationship, and had a three year term.

Retention Agreements

Under the terms of retention agreements dated 10 October 2019 and, in relation to one executive, 19 April 2023, Jeffrey Tweedy (Chief Executive Officer of PHC), Jeffrey Hovey (Chief Financial Officer of PHC) and three other employees shall be entitled to cash bonuses upon the sale of PHC in the amounts of $341,575, $341,575 and (in aggregate) $292,779 respectively. The bonuses will be payable to those individuals within 30 days following the Scheme becoming Effective. The retention agreements provide that if Jeffrey Hovey and/or Jeffrey Tweedy and/or the other employees are not retained by Bidco or PHC following the expiry of any transition period agreed with Bidco and otherwise do not resign or are not terminated without cause during any such transition period, then they will each be paid a bonus equal to three months' of their base salary within 30 days following any such transition period agreed with Bidco. Furthermore the retention agreements provide that if Jeffrey Hovey and/or Jeffrey Tweedy and/or the other employees are (i) terminated without cause or (ii) terminate their employment with cause, in each case, within 24 months of the Scheme becoming Effective, they will be paid a severance amount equal to twelve months of their base salary over a period of 12 months following the date of the cessation of their employment.

Deferral of salary and fees

Certain of the PHC Directors agreed, with effect from 1 January 2024 to defer all, or a portion of, their salary or fee (as applicable) until the earlier of 1 January 2025 or a change of control of PHC. Accordingly, upon the Scheme being Effective, the following payments will be payable:

 

·      Jeffrey Tweedy - $33,700 (to be pro-rated up to the date on which the Scheme becomes Effective, estimated to be $21,420 based on the current transaction timetable);

·      Jeffrey Hovey - $25,400 (to be pro-rated up to the date on which the Scheme becomes Effective, estimated to be $16,145 based on the current transaction timetable);

·      Katherine Jane Coppinger - £32,000 (to be pro-rated up to the date on which the Scheme becomes Effective, estimated to be £25,870 based on the current transaction timetable);

·      Dr Christopher Gareth Joseph Richards - $80,000 (to be pro-rated up to the date on which the Scheme becomes Effective, estimated to be $50,849 based on the current transaction timetable); and

·      William Martin Lewis - £32,000 (to be pro-rated up to the date on which the Scheme becomes Effective, estimated to be £25,870 based on the current transaction timetable).

14.       Structure of the Acquisition

Scheme

It is intended that the Acquisition will be effected by way of a Court-sanctioned scheme of arrangement between PHC and the Scheme Shareholders under Part 26 of the Companies Act. Bidco reserves the right (with the consent of the Takeover Panel, if required) to implement the Acquisition by way of a Takeover Offer.

The purpose of the Scheme is to provide for Bidco to acquire and become the owner of the whole of the issued and to be issued ordinary share capital of PHC. Under the Scheme, the Acquisition is to be achieved by the transfer of the Scheme Shares held by Scheme Shareholders to Bidco in consideration for which the Scheme Shareholders will receive the consideration pursuant to the Scheme on the basis set out in this Announcement and to be set out in the Scheme Document.

Approval by Court Meeting and General Meeting

To become Effective, the Scheme requires, amongst other things, the:

(a)        approval of the Scheme by a majority in number of Scheme Shareholders present and voting (and entitled to vote), either in person or by proxy, representing not less than 75 per cent. in value of the Scheme Shares voted by such holders at the Court Meeting; and

(b)        approval of the Resolutions by the requisite majority or majorities of votes cast at the General Meeting (to be held directly after the Court Meeting) necessary to implement the Scheme, including amendments to PHC's articles of association to ensure that any PHC Shares issued between the approval of the Scheme at the Court Meeting and the Scheme Record Time will be subject to the Scheme so that any PHC Shares issued after the Scheme Record Time will be automatically acquired by Bidco.

Application to Court to sanction the Scheme

Once the requisite approvals have been obtained at the Court Meeting and the General Meeting and the other Conditions have been satisfied or (where applicable) waived, the Scheme must be sanctioned by the Court at the Sanction Hearing before it can become Effective.

The Scheme will become Effective in accordance with its terms on delivery of the Court Order to the Registrar of Companies. Upon the Scheme becoming Effective, it will be binding on all Scheme Shareholders, irrespective of whether or not they attended and/or voted at the Court Meeting or the General Meeting, or whether they voted in favour of or against the Scheme. The consideration will be despatched by Bidco to Scheme Shareholders no later than 14 days after the Effective Date. In addition, share certificates in respect of the PHC Shares will cease to be valid and entitlements to PHC Shares held within the CREST system will be cancelled.

The Scheme will contain a provision for Bidco and PHC to consent jointly, on behalf of all persons concerned, to any modification of or addition to the Scheme or to any condition that the Court may approve or impose. PHC has been advised that the Court would be unlikely to approve any modification of, or addition to, or impose a condition to the Scheme which might be material to the interests of Scheme Shareholders unless Scheme Shareholders were informed of such modification, addition or condition. It would be a matter for the Court to decide, in its discretion, whether or not a further meeting of Scheme Shareholders should be held in these circumstances.

Amended PHC Articles

Any PHC Shares issued at or before the Scheme Record Time will be subject to the terms of the Scheme. Any PHC Shares issued after the Scheme Record Time will be subject to the Amended PHC Articles and will be automatically transferred to Bidco in accordance with the terms of the Amended PHC Articles.

Full details of the Scheme to be set out in the Scheme Document

The Scheme Document will include full details of the Scheme, including the expected timetable and the action to be taken by Scheme Shareholders. The Scheme will be governed by English law. The Scheme will be subject to the applicable requirements of the Code, the Takeover Panel, the AIM Rules, the London Stock Exchange, the Registrar of Companies and the FCA.

The Scheme Document, along with the notice of the Court Meeting and the General Meeting and the Forms of Proxy will be despatched to PHC Shareholders within 28 days of the date of this Announcement or such later date as may be agreed by the Takeover Panel. Subject to certain restrictions relating to persons resident in Restricted Jurisdictions, the Scheme Document will also be made available on PHC's website at https://www.planthealthcare.com/disclaimer. Neither the contents of this website nor the content of any other website accessible from hyperlinks on such website is incorporated into, or forms part of, this Announcement.

Conditions

In addition to the requirements described above, the Acquisition is also conditional on the other Conditions being satisfied or (where applicable) waived.

The Scheme will be conditional on, amongst other things, upon:

(a)        the approval of the Scheme by a majority in number representing not less than 75 per cent. in value of the Scheme Shareholders entitled to vote and present and voting, either in person or by proxy, at the Court Meeting (or at any adjournment, postponement or reconvention of such meeting) to be held on or before the 22^nd day after the expected date of the Court Meeting to be set out in the Scheme Document in due course (or such later date as may be agreed between Bidco and PHC and the Court may allow);

(b)        the passing of the Resolutions by the requisite majority at the General Meeting (or at any adjournment, postponement or reconvention of such meeting); and

(c)        the sanction of the Scheme on or before the 22nd day after the expected date of the Court Hearing to be set out in the Scheme Document in due course (or such later date as may be agreed between Bidco and PHC and the Court may allow) and the delivery of an office copy of the Court Order to the Registrar of Companies.

Scheme timetable / further information

A full anticipated timetable will be set out in the Scheme Document which will be posted to PHC Shareholders and, for information only, to participants in the PHC Share Schemes, along with the notices of the Court Meeting and the General Meeting and the Forms of Proxy, within 28 days of the date of this Announcement (unless Bidco and PHC otherwise agree, and the Takeover Panel consents, to a later date). Subject to certain restrictions relating to persons resident in Restricted Jurisdictions, the Scheme Document will also be made available on PHC's website at https://www.planthealthcare.com/disclaimer.

At this stage, subject to satisfaction or, where applicable, waiver of the Conditions and the approval and availability of the Court (which is subject to change), Bidco and PHC expect the Scheme to become Effective during Q3 2024.

Right to switch to a Takeover Offer

Bidco reserves the right to elect (with the consent of the Takeover Panel, if required) to implement the Acquisition by way of a Takeover Offer for the entire issued and to be issued ordinary share capital of PHC not already owned by the Wider PI Group as an alternative to the Scheme. In such an event, the Takeover Offer will be implemented on the same terms or, if Bidco so decides, on such other terms being no less favourable (subject to appropriate amendments including without limitation, the inclusion of an acceptance condition set at no more than 90 per cent. of PHC Shares to which the Takeover Offer relates (or such lesser percentage, being more than 50 per cent. as may be determined by Bidco with the consent of the Takeover Panel (if necessary))), so far as applicable, as those which would apply to the Scheme and subject to the amendment referred to in Part C of Appendix I to this Announcement. Further, if sufficient acceptances of the Takeover Offer are received and/ or sufficient PHC Shares are otherwise acquired, it is the intention of Bidco to (i) request that the London Stock Exchange cancels trading in PHC Shares on AIM; and (ii) apply the provisions of the Companies Act to compulsorily acquire any outstanding PHC Shares to which the Takeover Offer relates.

15.       PHC Share Plan

Participants in the PHC Share Plan will be contacted regarding the effect of the Acquisition on their rights under the PHC Share Plan and, where relevant, an appropriate proposal will be made to such participants pursuant to Rule 15 of the Code in due course. Further details of the impact of the Acquisition on the PHC Share Awards will be set out in the Scheme Document and separate proposal documentation.

16.       Cancellation of admission to trading on AIM of the PHC Shares and re-registration

It is intended that dealings in PHC Shares will be suspended on or shortly before the Effective Date at a time to be set out in the Scheme Document or as separately announced following the date of this Announcement. It is further intended that an application will be made to the London Stock Exchange for the cancellation of the admission to trading of the PHC Shares on AIM with effect on or shortly after the Effective Date. It is currently expected that the last day of dealings in PHC Shares on AIM will be the Business Day immediately prior to the Effective Date and that no transfers will be registered after 6.00 p.m. on that date.

Upon the Scheme becoming Effective, share certificates in respect of the PHC Shares will cease to be valid and should be destroyed. In addition, entitlements to PHC Shares held within the CREST system will be cancelled on the Effective Date.

As soon as practicable after the Effective Date and after the cancellation of the admission to trading on AIM of the PHC Shares, it is intended that PHC will be re-registered as a private limited company under the relevant provisions of the Companies Act.

17.       Disclosure of interests in PHC

As at the close of business on the Last Practicable Date, save for the irrevocable undertakings and the letter of intent referred to in paragraphs 5 and 7 above, none of Bidco, its directors, nor so far as Bidco is aware, any person acting, or deemed to be acting, in concert with Bidco:

(a)        had an interest in, or right to subscribe for, relevant securities of PHC;

(b)        had any short position in (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery of, relevant securities of PHC;

(c)        had procured an irrevocable commitment or letter of intent to accept the terms of the Acquisition in respect of relevant securities of PHC; or

(d)        had borrowed, lent or entered into any financial collateral arrangements in respect of any PHC Shares.

Furthermore, save for the irrevocable undertakings and letter of intent described in paragraph 7 above, no arrangement exists between Bidco or PHC or a person acting in concert with Bidco or PHC in relation to PHC Shares. For these purposes, an "arrangement" includes any indemnity or option arrangement, any agreement or any understanding, formal or informal, of whatever nature, relating to PHC Shares which may be an inducement to deal or refrain from dealing in such securities.

18.       Documents available for inspection

Copies of this Announcement and the following documents will, by no later than 12 noon on the Business Day following the Announcement Date, be made available on PHC's website at https://www.planthealthcare.com/disclaimer until the end of the Offer Period:

·              this Announcement;

·              the irrevocable undertakings and letter of intent referred to in paragraph 7;

·              the Confidentiality Agreement;

·              the confidentiality disclosure agreement;

·              the retention agreements referred to in paragraph 13; and

·              consent letters from each of Zeus and Cavendish.

The contents of the website referred to in this Announcement nor the contents of any website accessible from hyperlinks is incorporated in, or forms part of, this Announcement.

19.       General

The Acquisition will be subject to the Conditions and certain further terms set out in Appendix I and to the full terms and conditions which will be set out in the Scheme Document. Appendix I to this Announcement contains a summary of the principal terms and conditions. It is expected that the Scheme Document will be posted to PHC Shareholders, and, for information only, to participants in the PHC Share Schemes, along with the notices of the Court Meeting and the General Meeting and the Forms of Proxy, within 28 days of the date of this Announcement, unless Bidco and PHC otherwise agree, and the Takeover Panel consents, to a later date.

In deciding whether or not to vote, or procure the voting, in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting, PHC Shareholders should rely on the information contained, and follow the procedures described, in the Scheme Document.

Zeus and Cavendish have each given and not withdrawn their consent to the publication of this Announcement with the inclusion therein of the references to their names in the form and context in which they appear.

Appendix II contains details of sources of information and bases of calculation contained in this Announcement. Appendix III contains certain details relating to the irrevocable undertakings and letter of intent referred to in this Announcement. Appendix IV contains definitions of certain terms used in this Announcement.

Enquiries:

PI Industries Ltd Rajnish Sarna	Tel: +91 124 6790000
Zeus (financial adviser to PI) Nick Cowles James Edis Louisa Waddell	Tel: +44 20 3829 5000
Plant Health Care plc Jeff Tweedy, CEO	Tel: +1 919 926 1600
Cavendish (Rule 3 adviser, financial adviser, nominated adviser and corporate broker to PHC) Neil McDonald Pete Lynch	Tel: +44 131 220 6939

Shoosmiths LLP is retained as legal adviser to PI.

DWF Law LLP is retained as legal adviser to PHC.

Important Notices

Zeus Capital Limited ("Zeus"), which is authorised and regulated by the FCA in the United Kingdom, is acting exclusively for PI as financial adviser and no one else in connection with the matters referred to in this Announcement and will not be responsible to anyone other than PI for providing the protections afforded to clients of Zeus, or for providing advice in relation to the matters referred to in this Announcement. Neither Zeus nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Zeus in connection with the matters referred to in this Announcement, any statement contained herein or otherwise.

Cavendish Capital Markets Limited ("Cavendish"), which is authorised and regulated in the United Kingdom by the FCA, is acting as Rule 3 adviser, joint financial adviser, nominated adviser and joint corporate broker to PHC and no one else in connection with the matters referred to in this Announcement and will not regard any other person as its client in relation to such matters and will not be responsible to anyone other than PHC for providing the protections afforded to clients of Cavendish, nor for providing advice in relation to any matter referred to in this Announcement. Neither Cavendish nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Cavendish in connection with the matters referred to in this Announcement, any statement contained herein or otherwise.

Further Information

This Announcement is for information purposes only and is not intended to and does not constitute, or form any part of, an offer to sell or subscribe for or any invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise. The Acquisition will be implemented solely through and on the terms set out in the Scheme Document and the accompanying Forms of Proxy (or, in the event that the Acquisition is to be implemented by means of a Takeover Offer, the Offer Document and acceptance), which will contain the full terms and conditions of the Acquisition, including details of how to vote in respect of, or to accept, the Acquisition. Any approval, decision or other response to the Acquisition should be made only on the basis of the information in the Scheme Document (or if the Acquisition is implemented by way of a Takeover Offer, the Offer Document). PHC Shareholders are strongly advised to read the formal documentation in relation to the Acquisition once it has been despatched.

This Announcement does not constitute a prospectus or prospectus exempted document.

The statements contained in this Announcement are made as at the Announcement Date, unless some other time is specified in relation to them, and the publication of this Announcement shall not give rise to any implication that there has been no change in the facts set forth in this Announcement since such date.

Overseas Shareholders

This Announcement has been prepared for the purpose of complying with English law, the AIM Rules, the Code and the Market Abuse Regulation and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

The release, publication or distribution of this Announcement in jurisdictions other than the United Kingdom may be restricted by law and/or regulations and such laws and/or regulations may affect the availability of the Acquisition to persons who are not resident in the United Kingdom. Persons who are not resident in the United Kingdom, or who are subject to laws of any jurisdiction other than the United Kingdom, should inform themselves about, and observe, any applicable requirements. Any failure to comply with the applicable legal or regulatory requirements may constitute a violation of the laws and/or regulations of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility and liability for the violation of such restrictions by any person.

Any person (including, without limitation, nominees, trustees and custodians) who would, or otherwise intends to, forward this Announcement, the Scheme Document or any accompanying document(s) to any jurisdiction outside the United Kingdom should refrain from doing so and seek appropriate professional advice before taking any action. In particular, the ability of persons who are not resident in the United Kingdom to vote their PHC Shares at the Court Meeting or the General Meeting, or to execute and deliver Forms of Proxy appointing another to vote their PHC Shares in respect of the Court Meeting or the General Meeting on their behalf, may be affected by the laws of the relevant jurisdiction in which they are located. The Acquisition will be subject to the applicable requirements of the Code, the Takeover Panel, the London Stock Exchange (including the AIM Rules) and the FCA.

Unless otherwise determined by PI or required by the Code, and permitted by applicable law and regulation, the Acquisition will not be made, directly or indirectly, in or into or by use of the mails or any other means or instrumentality (including, without limitation, telephonic or electronic) of interstate or foreign commerce of, or any facility of a national, state or other securities exchange of, a Restricted Jurisdiction where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction, and no person may vote in favour of the Acquisition, and the Acquisition will not be capable of acceptance, by any such use, means, instrumentality or facility or from within a Restricted Jurisdiction. Accordingly, copies of this Announcement and formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded or distributed in, into or from a Restricted Jurisdiction and persons receiving this Announcement (including custodians, nominees and trustees) must not distribute or send it into or from a Restricted Jurisdiction. Doing so may render invalid any related purported vote in respect of the Acquisition. If the Acquisition is implemented by way of a Takeover Offer (unless otherwise permitted by applicable law and regulation), the Takeover Offer may not be made, directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Takeover Offer may not be capable of acceptance by any such use, means, instrumentality or facilities

In the event that the Acquisition is implemented by way of a Takeover Offer and extended into the US, PI will do so in satisfaction of the procedural and filing requirements of the US securities laws at that time, to the extent applicable thereto.

The Acquisition relates to the shares of a company incorporated in England and it is proposed to be made by means of a scheme of arrangement provided for under English law. A transaction effected by means of a scheme of arrangement is not subject to the shareholder vote, proxy solicitation and tender offer rules under the US Exchange Act. Accordingly, the Scheme is subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement, which differ from the disclosure requirements and practices of US shareholder vote, proxy solicitation and tender offer rules.

If PI were to elect to implement the Acquisition by means of a Takeover Offer, such Takeover Offer shall be made in compliance with all applicable laws and regulations, including section 14(e) of the US Exchange Act and Regulation 14E thereunder. Such Takeover Offer would be made in the US by Bidco and no one else.

In addition to any such Takeover Offer, PI, certain affiliated companies and the nominees or brokers (acting as agents) of PI and/or such affiliated companies may make certain purchases of, or arrangements to purchase, PHC Shares outside such Takeover Offer during the period in which such Takeover Offer would remain open for acceptance. If such purchases or arrangements to purchase are made, they would be made outside the United States in compliance with applicable law, including the US Exchange Act. Neither the US Securities and Exchange Commission, nor any securities commission of any state of the US, has approved or disapproved any offer, or passed comment upon the adequacy or completeness of any of the information contained in this Announcement. Any representation to the contrary may be a criminal offence.

The receipt of cash consideration by an PHC Shareholder for the transfer of their PHC Shares pursuant to the Scheme will be a taxable transaction for United States federal income tax purposes and under applicable US state and local, as well as overseas and other, tax laws. In certain circumstances, PHC Shareholders that are not US persons and that receive cash consideration pursuant to the Scheme may be subject to US withholding tax. Each PHC Shareholder is urged to consult an independent professional adviser regarding the applicable tax consequences of the Acquisition, including under applicable United States, state and local, as well as overseas and other tax laws.

Financial information relating to PHC included in this Announcement and to be included in the Scheme Document has been or will have been prepared in accordance with accounting standards applicable in the United Kingdom and may not be comparable to the financial statements of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States ("US GAAP"). US GAAP differs in certain significant respects from accounting standards applicable in the United Kingdom.

It may be difficult for a US-based investor to enforce their rights and any claim they may have arising under US securities laws, since the Scheme relates to the shares of a company incorporated under the laws of, and located in, the United Kingdom, and some or all of its officers and directors may be residents of non-US jurisdictions. A US-based investor may not be able to sue a company located in the United Kingdom, or its officers or directors, in a foreign court for alleged violations of US securities laws, and it may be difficult to compel a foreign company and its affiliates to subject themselves to a US court's judgment.

In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act, PI, certain affiliated companies and their nominees or brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, PHC Shares outside of the US, other than pursuant to the Acquisition, until the date on which the Acquisition and/or Scheme becomes Effective, lapses or is otherwise withdrawn. Also, in accordance with Rule 14e-5(b) of the US Exchange Act, each of Zeus and Cavendish will continue to act as an exempt principal trader in PHC Shares on the London Stock Exchange. If such purchases or arrangements to purchase were to be made, they would occur either in the open market at prevailing prices or in private transactions at negotiated prices and comply with applicable law, including the US Exchange Act. Any information about such purchases will be disclosed as required in the UK, will be reported to the Regulatory News Service of the London Stock Exchange and will be available on the London Stock Exchange website at www.londonstockexchange.com.

Further details in relation to Overseas Shareholders will be contained in the Scheme Document.

Forward-looking statements

This Announcement may contain certain "forward-looking statements" with respect to PHC and PI. 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 or terms of similar meaning or the negative thereof. Forward-looking statements include, but are not limited to, statements relating to the following: (a) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; and (b) business and management strategies of PI and/or PHC and the expansion and growth of PHC.

These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or developments to differ materially from those expressed in or implied by such forward-looking statements. These forward-looking statements are based on numerous assumptions regarding present and future strategies and environments. None of PI, or PHC, nor any of their respective associates, directors, officers, employees or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur. You are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. All subsequent oral or written forward-looking statements attributable to PI or PHC or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above. 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 Announcement. PI and PHC assume no obligation to update publicly or revise forward-looking or other statements contained in this Announcement, whether as a result of new information, future events or otherwise, except to the extent legally required.

There are a number of factors which could cause actual results and developments to differ materially from those expressed or implied in forward-looking statements. The factors that could cause actual results to differ materially from those described in the forward-looking statements include, but are not limited to: the ability to complete the Acquisition; the ability to obtain requisite regulatory and shareholder approvals and the satisfaction of other Conditions on the proposed terms; changes in the global, political, economic, business and competitive environments and in market and regulatory forces; changes in future exchange and interest rates; changes in tax rates; future business combinations or dispositions; changes in general and economic business conditions; changes in the behaviour of other market participants; the anticipated benefits of the Acquisition not being realised as a result of changes in general economic and market conditions in the countries in which PI and PHC operate; weak, volatile or illiquid capital and/or credit markets; changes in the degree of competition in the geographic and business areas in which PI and PHC operate; and changes in laws or in supervisory expectations or requirements. Other unknown or unpredictable factors could cause actual results to differ materially from those expected, estimated or projected in the forward-looking statements. If any one or more of these risks or uncertainties materialises or if any one or more of the assumptions proves incorrect, actual results may differ materially from those expected, estimated or projected. Such forward-looking statements should therefore be construed in the light of such factors.

No profit forecasts or estimates

No statement in this Announcement is intended as a profit forecast or estimate for PI or PHC in respect of any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per PHC Share for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per PHC Share.

Publication on website

In accordance with Rule 26.1 of the Code, a copy of this Announcement will be made available (subject to certain restrictions relating to persons resident in Restricted Jurisdictions), free of charge, on PHC's website at https://www.planthealthcare.com/disclaimer by no later than 12:00 noon on the Business Day following the Announcement Date. Neither the contents of this website nor the content of any other website accessible from hyperlinks on such website is incorporated into, or forms part of, this Announcement.

Requesting hard copies

In accordance with Rule 30.3 of the Code, a person so entitled may request a hard copy of this Announcement, free of charge, by Neville Registrars Limited on 0121 585 1131 (or from outside of the UK, on +44 (0) 121 585 1131) between 9.00 a.m. to 5.00 p.m. Monday to Friday (London time) or by submitting a request in writing to Neville Registrars Limited, Neville House, Steelpark Road, Halesowen, West Midlands, United Kingdom, B62 8HD. For persons who receive a copy of this Announcement in electronic form or via a website notification, a hard copy of this Announcement will not be sent unless so requested. In accordance with Rule 30.3 of the Code, a person so entitled may also request that all future documents, announcements and information to be sent to them in relation to the Acquisition should be in hard copy form.

Electronic communications - information for PHC Shareholders

Please be aware that addresses, electronic addresses and certain information provided by PHC Shareholders, persons with information rights and other relevant persons for the receipt of communications from PHC may be provided to PI during the Offer Period as required under section 4 of Appendix 4 of the Code.

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different paragraphs and/or tables may vary slightly and figures shown as totals in certain paragraphs and/or tables may not be an arithmetic aggregation of the figures that precede them.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the Offer Period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of: (a) the offeree company; and (b) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) of the Code applies must be made by no later than 3.30 pm on the 10th Business Day (as defined in the Code) following the commencement of the Offer Period and, if appropriate, by no later than 3.30 pm on the 10th Business Day (as defined in the Code) following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of: (a) the offeree company; and (b) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8 of the Code. A Dealing Disclosure by a person to whom Rule 8.3(b) of the Code applies must be made by no later than 3.30 pm on the Business Day (as defined in the Code) following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3 of the Code.

Opening Position Disclosures must also be made by the offeree company and by any offeror, and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of the Code).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the Offer Period commenced and when any offeror was first identified. You should contact the Takeover Panel's Market Surveillance Unit on +44 (0) 20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Rule 2.9 of the Code

For the purposes of Rule 2.9 of the Code, PHC confirms that, as at the Announcement Date, it had in issue 341,532,952 PHC Shares. No shares are held in treasury. The ISIN for the PHC Shares is GB00B01JC540.

General

PI reserves the right to elect (with the consent of the Takeover Panel, if required) to implement the Acquisition by way of a Takeover Offer for the entire issued and to be issued ordinary share capital of PHC not already owned by the Wider PI Group as an alternative to the Scheme. In such an event, a Takeover Offer will be implemented on substantially the same terms, so far as applicable, as those which would apply to the Scheme.

If the Acquisition is effected by way of Takeover Offer, and if sufficient acceptances of the Takeover Offer are received and/or sufficient PHC Shares are otherwise acquired, PI intends to apply the provisions of the Companies Act so as to compulsorily acquire any outstanding PHC Shares to which the Takeover Offer relates.

If you are in any doubt about the contents of this Announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor or independent financial adviser duly authorised under the FSMA if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

 

APPENDIX I

CONDITIONS OF THE ACQUISITION AND CERTAIN FURTHER TERMS

Part A: Conditions of the Scheme and the Acquisition

Long Stop Date

1.         The Acquisition will be conditional upon the Scheme becoming unconditional and Effective subject to the Code, by not later than 11:59 p.m. on the Long Stop Date.

Scheme approval

2.         The Scheme will be subject to the following Conditions:

(a)       

(i)         approval of the Scheme at the Court Meeting (and at any separate class meeting that may be required by the Court) by a majority in number of the Scheme Shareholders representing not less than 75 per cent. in value of the Scheme Shares (or the relevant class or classes thereof, if applicable) who are on the register of members of PHC at the Voting Record Time and who are present, entitled to vote and voting, whether in person or by proxy, at the Court Meeting (or at any adjournment therefore) (and at any separate class meeting which may be required by the Court); and

(ii)         the Court Meeting (and any separate class meeting which may be required by the Court) (or any adjournment thereof) being held on or before the 22^nd day after the expected date of the Court Meeting to be set out in the Scheme Document (or such later date, if any, as Bidco and PHC may agree, with the approval of the Takeover Panel and the Court, if such approval is required);

(b)       

(i)        the passing of the Resolutions by the requisite majority or majorities at the General Meeting (or any adjournment(s) thereof); and

(ii)         the General Meeting (or any adjournment thereof) being held on or before the 22nd day after the expected date of the General Meeting to be set out in the Scheme Document (or such later date, if any, as Bidco and PHC may agree, with the approval of the Takeover Panel and the Court, if such approval is required); and

(c)       

(i)         the sanction of the Scheme by the Court (with or without modification but subject to any modification being on terms acceptable to Bidco) at the Sanction Hearing; and

(ii)         the Sanction Hearing being held on or before the 22nd day after the expected date of the Sanction Hearing to be set out in the Scheme Document (or such later date, if any, as Bidco and PHC may agree, with the approval of the Takeover Panel and the Court, if such approval is required); and

(d)        the delivery of a copy of the Court Order to the Registrar of Companies.

General Conditions

3.         In addition, except as provided in Part B below and subject to the requirements of the Takeover Panel, the Acquisition shall be conditional upon the following Conditions and, accordingly, the necessary actions to make the Scheme Effective shall not be taken unless such Conditions referred to in this paragraph 3 (as amended, if appropriate) have been satisfied or, where relevant, waived prior to the Scheme being sanctioned by the Court:

Antitrust Approvals

(a)        all material notifications, filings or applications which are necessary or considered appropriate or desirable by Bidco having been made in connection with the Acquisition and all necessary waiting periods (including any extensions thereof) under any applicable legislation or regulation of any jurisdiction having expired, lapsed or been terminated (as appropriate) and all statutory and regulatory obligations in any jurisdiction having been complied with in each case in respect of the Acquisition and all Authorisations deemed reasonably necessary or appropriate by Bidco in any jurisdiction for or in respect of the Acquisition and, except pursuant to Chapter 3 of Part 28 of the Companies Act, the acquisition or the proposed acquisition of any shares or other securities in, or control or management of, PHC or any other member of the Wider PHC Group by any member of the Wider PI Group having been obtained in terms and in a form reasonably satisfactory to Bidco from all appropriate Third Parties or (without prejudice to the generality of the foregoing) from any person or bodies with whom any member of the Wider PHC Group or the Wider PI Group has entered into material contractual arrangements and all such Authorisations necessary, appropriate or desirable to carry on the business of any member of the Wider PHC Group in any jurisdiction having been obtained and all such Authorisations remaining in full force and effect at the time at which the Acquisition becomes Effective or otherwise wholly unconditional and there being no notice or intimation of an intention to revoke, suspend, restrict, modify or not to renew such Authorisations;

Third Party Regulatory action

(b)       save as set out in respect of Condition 3(a), no Third Party having given notice of a decision to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference (and, in each case, not having withdrawn the same), or having required any action to be taken or otherwise having done anything, or having enacted, made or proposed any statute, regulation, decision, order or change to published practice and there not continuing to be outstanding any statute, regulation, decision or order (and in each case not having withdrawn the same) which would or might reasonably be expected to (in any case to an extent or in a manner which is materially adverse in the context of the Acquisition or to the Wider PHC Group, taken as a whole):

(i)         require, prevent or materially delay the divestiture or materially alter the terms envisaged for such divestiture by any member of the Wider PI Group or by any member of the Wider PHC Group of all or any material part of their respective businesses, assets, property or any shares or other securities (or the equivalent) in any member of the Wider PHC Group or any member of the Wider PI Group or impose any material limitation on the ability of all or any of them to conduct their respective businesses (or any material part thereof) or to own, control or manage any of their respective material assets or properties (or any material part thereof);

(ii)        except pursuant to Chapter 3 of Part 28 of the Companies Act in the event that Bidco elects to implement the Acquisition by way of a Takeover Offer, require any member of the Wider PI Group or the Wider PHC Group to acquire, or offer to acquire, any shares, other securities (or the equivalent) or interest in, or any material asset owned by, any Third Party (other than in connection with the implementation of the Acquisition);

(iii)        impose any material and adverse limitation on, or result in a material and adverse delay in, the ability of any member of the Wider PI Group, directly or indirectly, to acquire, hold or exercise effectively all or any rights of ownership in respect of shares or loans or securities convertible into shares or other securities (or the equivalent) in PHC or on the ability of any member of the Wider PHC Group or any member of the Wider PI Group, directly or indirectly, to hold or exercise effectively all or any rights of ownership in respect of shares or loans or any other securities (or the equivalent) in, or to exercise voting or management control over, any other member of the Wider PHC Group;

(iv)       result in any member of the Wider PHC Group or any member of the Wider PI Group ceasing to be able to carry on business under any names under which it currently carries on business in any jurisdiction;

(v)        make the Acquisition or its implementation void, unenforceable and/or illegal under the laws of any relevant jurisdiction, or otherwise, directly or indirectly, materially prevent or prohibit, restrict, restrain or delay or otherwise interfere with to a material extent the implementation of, or impose material additional conditions or obligations with respect to, or otherwise materially challenge, impede, interfere or require material and adverse amendment to the terms of the Acquisition;

(vi)       impose any material limitation on, or result in material delay in, the ability of any member of the Wider PI Group or any member of the Wider PHC Group to conduct, integrate or co-ordinate all or any part of its business with all or any part of the business of any other member of the Wider PI Group and/or the Wider PHC Group;

(vii)       require any member of the Wider PHC Group to relinquish, terminate or amend in any material and adverse way any material contract to which any member of the Wider PHC Group or the Wider PI Group is a party;

(viii)      require any member of the Wider PI Group or any member of the Wider PHC Group or any of their respective affiliates to: (A) invest, contribute or loan any capital or assets to; or (B) guarantee or pledge capital assets for the benefit of, any member of the Wider PI Group or any member of the Wider PHC Group; or

(ix)       otherwise materially and adversely affect all or any of the business, operations, assets, liabilities or profits of any member of the Wider PHC Group or any member of the Wider PI Group;

and all applicable waiting and other time periods (including any extensions thereof) during which any such Third Party could decide to take, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference or take any other step under the laws of any relevant jurisdiction in respect of the Acquisition or the acquisition or proposed acquisition of any PHC Shares or other securities in, or control or management of, PHC or otherwise intervene having expired, lapsed or been terminated;

Other regulatory approvals

(c)        each Governmental Entity, which regulates or licences any member of the PHC Group or any other body corporate in which any member of the PHC Group has an interest in shares, and whose prior approval, consent or non-objection to any change in control, or acquisition of (or increase in) control in respect of that or any other member of the PHC Group is required, or any Governmental Entity, whose prior approval of, consent to or non-objection to the Acquisition is otherwise required, or from whom one or more material licences or permissions are required in order to complete the Acquisition, having given its approval, non-objection or legitimate deemed consent or consent in writing thereto and, as the case may be, having granted such licences and permissions (in each case where required and on terms reasonably satisfactory to Bidco), and, in each case, the impact of which would be, or might reasonably be expected to be, materially adverse to the Wider PHC Group, taken as a whole;

Notifications, waiting periods and authorisations

(d)        all material notifications, filings or applications which are necessary having been made in connection with the Acquisition and all necessary waiting and other time periods (including any extensions thereof) under any applicable legislation or regulation of any jurisdiction having expired, lapsed or been terminated or waived (as appropriate) and all statutory and regulatory obligations in any jurisdiction having been complied with, in each case, in respect of the Acquisition and all Authorisations required by applicable law in any jurisdiction for or in respect of the Acquisition and, except pursuant to Chapter 3 of Part 28 of the Companies Act in respect of the Acquisition having been obtained in a form reasonably satisfactory to Bidco from all appropriate Third Parties and all such Authorisations required by applicable law to carry on the business of the Wider PHC Group in any jurisdiction remaining in full force and effect at the time at which the Acquisition becomes Effective or otherwise wholly unconditional and there being no notice or intimation of an intention to revoke, suspend, restrict, modify or not to renew such Authorisations, in each case, in a way that would be material and adverse to the Wider PHC Group, taken as a whole;

Certain matters arising as a result of any arrangement, agreement, etc.

(e)        except as Disclosed, there being no provision of any arrangement, agreement, lease, licence, franchise, permit or other instrument to which any member of the Wider PHC Group is a party, or by or to which any such member or any of its material assets is or may be bound, entitled or subject, or any event or circumstance which, as a consequence of the Acquisition, would or might reasonably be expected to result in (in each case to an extent or in a manner which is material and adverse in the context of the Wider PHC Group, taken as a whole):

(i)         any monies borrowed by, or any other indebtedness or liabilities (actual or contingent) of, or any grant available to, any such member being or becoming repayable, or capable of being declared repayable, immediately or prior to its or their stated maturity date or repayment date, or the ability of any such member to borrow monies or incur any indebtedness being withdrawn or inhibited or being capable of becoming or being withdrawn or inhibited;

(ii)        the creation, save in the ordinary and usual course of business, or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of such member or any such mortgage, charge or other security interest (whenever created, arising or having arisen) becoming enforceable;

(iii)        any such arrangement, agreement, lease, licence, franchise, permit or other instrument or the rights, liabilities, obligations or interests of any such member in or with any other person (or any arrangement or arrangements relating to any such interests or business) being terminated or materially and adversely modified or materially and adversely affected or any onerous obligation or liability arising or any material and adverse action being taken or arising thereunder;

(iv)       any material liability of any such member to make any severance, termination, bonus or other payment to any of its directors or other officers;

(v)        the rights, liabilities, obligations, interests or business of any such member under any such arrangement, agreement, licence, permit, lease or instrument or the interests or business of any such member or any member of the Wider PHC Group in or with any other person or body or firm or company (or any arrangement relating to any such interests or business) being terminated, or materially and adversely modified or affected or any materially onerous obligation or liability arising or any material and adverse action being taken thereunder;

(vi)       any such member ceasing to be able to carry on business under any name under which it presently carries on business;

(vii)       any material assets or interests of, or any material asset the use of which is enjoyed by, any such member of the Wider PHC Group being or falling to be disposed of or charged or any right arising under which any such material asset or interest could be required to be disposed of or charged or could cease to be available to any such member of the Wider PHC Group otherwise than in the ordinary course of business; or

(viii)      the creation or acceleration of any material liability (actual or contingent) by any such member (including any material tax liability or any obligation to obtain or acquire any material authorisation, order, grant, recognition, determination, confirmation, consent, licence, clearance, permission, exemption, approval, notice, waiver concession, agreement or exemption from any Third Party or any person) other than trade creditors or other liabilities incurred in the ordinary course of business or in connection with the Acquisition,

and, except as Disclosed, no event having occurred which, under any provision of any arrangement, agreement, licence, permit, franchise, lease or other instrument to which any member of the Wider PHC Group is a party or by or to which any such member or any of its assets are bound, entitled or subject, would or might reasonably be expected to result in any of the events or circumstances as are referred to in Conditions (e)(i) to (viii) above, in each case, which is or would be materially adverse in the context of the Wider PHC Group, taken as a whole;

Certain events occurring since the Last Accounts Date

(f)         except as Disclosed, no member of the Wider PHC Group having since the Last Accounts Date:

(i)         except for shares issued or transferred out of treasury pursuant to, or in connection with, awards under the PHC Share Plan to the extent such shares have become issuable and have been issued at the relevant date pursuant to, and in accordance with, issued or agreed to issue or authorised or proposed or announced its intention to authorise or propose the issue, of additional shares of any class, or securities or securities convertible into, or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares, securities or convertible securities or transferred or sold or agreed to transfer or sell or authorised or proposed the transfer or sale of PHC Shares out of treasury (except, where relevant, as between PHC and wholly-owned subsidiaries of PHC or between the wholly-owned subsidiaries of PHC);

(ii)        recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus, dividend or other distribution (whether payable in cash or otherwise) other than dividends (or other distributions whether payable in cash or otherwise) lawfully paid or made by any wholly-owned subsidiary of PHC to PHC or any of its wholly-owned subsidiaries;

(iii)        other than pursuant to the Acquisition (and except for transactions between PHC and its wholly-owned subsidiaries or between the wholly-owned subsidiaries of PHC and transactions in the ordinary course of business) implemented, effected, authorised or proposed or announced its intention to implement, effect, authorise or propose any merger, demerger, reconstruction, amalgamation, scheme, commitment or acquisition or disposal of assets or shares or loan capital (or the equivalent thereof) in any undertaking or undertakings in any such case to an extent which is material in the context of the Wider PHC Group, taken as a whole;

(iv)       except for transactions between PHC and its wholly-owned subsidiaries or between the wholly-owned subsidiaries of PHC and transactions in the ordinary course of business, disposed of, or transferred, mortgaged or created any security interest over any material asset or any right, title or interest in any material asset or authorised, proposed or announced any intention to do so;

(v)        except for transactions between PHC and its wholly-owned subsidiaries or between the wholly-owned subsidiaries of PHC issued, authorised or proposed, or announced an intention to authorise or propose the issue of, or made any change in or to the terms of, any debentures or become subject to any contingent liability or incurred or increased any indebtedness which, in any such case, is material in the context of the Wider PHC Group, taken as a whole;

(vi)       entered into or varied any material contract, arrangement, agreement, transaction or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, unusual or onerous nature or magnitude or which involves or could involve an obligation of a materially onerous nature or magnitude, otherwise than in the ordinary course of business and which is reasonably likely to be materially restrictive on the business of any member of the Wider PHC Group and which, taken together with any other such contract, arrangement, agreement, transaction or commitment is material in the context of the Wider PHC Group, taken as a whole;

(vii)       save as agreed with the Takeover Panel, entered into, or materially varied the terms of, or made any offer (which remains open for acceptance) to enter into or vary to a material extent the terms of any contract, service agreement, commitment or arrangement with any director or senior executive of any member of the Wider PHC Group, save for usual annual salary reviews, such entry, variation or authorisation being material in the context of the Wider PHC Group taken as a whole;

(viii)      save as agreed with the Takeover Panel, established any share option scheme, incentive scheme or other benefit relating to the employment or termination of employment of any employee of respect of the Wider PHC Group otherwise than in the ordinary course of business and in accordance with the terms of the Acquisition;

(ix)       purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares or other securities or reduced or made any other change to any part of its share capital (except, in each case, where relevant, as between PHC and wholly-owned subsidiaries of PHC or between the wholly-owned subsidiaries of PHC);

(x)        waived, compromised or settled any claim other than in the ordinary course of business where such waiver, settlement or compromise would have a material and adverse effect on the financial position of the Wider PHC Group, taken as a whole;

(xi)       terminated or varied the terms of any agreement or arrangement between any member of the Wider PHC Group and any other person in a manner which would or might reasonably be expected to have a material and adverse effect on the financial position of the Wider PHC Group, taken as a whole;

(xii)       save as required in connection with the Acquisition and the Scheme, made any material alteration to its memorandum, articles of association or other incorporation documents or any material alteration to the memorandum, articles of association or other incorporation documents of any other member of the Wider PHC Group;

(xiii)      been unable, or admitted in writing that it is unable, to pay its debts or commenced negotiations with one or more of its creditors with a view to rescheduling or restructuring any of its indebtedness, or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business which is material in the context of the Wider PHC Group, taken as a whole;

(xiv)      (other than in respect of a member of the Wider PHC Group which is dormant and was solvent at the relevant time) taken or proposed any steps, corporate action or had any legal proceedings instituted or threatened against it in relation to the suspension of payments, a moratorium of any indebtedness, its winding-up (voluntary or otherwise), dissolution, reorganisation or for the appointment of a receiver, administrator, manager, administrative receiver, trustee or similar officer of all or any material part of its assets or revenues or any analogous or equivalent steps or proceedings in any jurisdiction or appointed any analogous person in any jurisdiction or had any such person appointed;

(xv)      (except for transactions between PHC and its wholly-owned subsidiaries or between the wholly-owned subsidiaries of PHC) made, authorised, proposed or announced an intention to propose any change in its loan capital which is material in the context of the Wider PHC Group, taken as a whole;

(xvi)      entered into, implemented or authorised the entry into, any joint venture, asset or profit sharing arrangement, partnership or merger of business or corporate entities, which, in any such case, is material in the context of the Wider PHC Group, taken as a whole; or

(xvii)     otherwise than in the ordinary course of business, entered into any agreement, arrangement, commitment or contract or passed any resolution or made any offer (which remains open for acceptance) with respect to or announced an intention to, or to propose to, effect any of the transactions, matters or events referred to in this Condition (f),

in each case, which is material and adverse in the context of the Wider PHC Group, taken as a whole or in the context of the Acquisition;

No adverse change, litigation, regulatory enquiry or similar

(g)        except as Disclosed, since the Last Accounts Date there having been:

(i)         no material adverse change and no circumstance having arisen which would or might reasonably be expected to result in any material and adverse change in, the business, assets, liabilities, shareholders' equity, financial or trading position or profits or operational performance of any member of the Wider PHC Group;

(ii)        other than pursuant to the Acquisition and the Scheme, no litigation, arbitration proceedings, prosecution or other legal proceedings having been threatened in writing, implemented or instituted by or against or remaining outstanding against or in respect of, any member of the Wider PHC Group, in each case, which might reasonably be expected to have a material adverse effect on the Wider PHC Group, taken as a whole;

(iii)        no enquiry, review or investigation by any Third Party against or in respect of any member of the Wider PHC Group (or any person in respect of which any such member has responsibility or liability) having been threatened in writing, announced, implemented or instituted or remaining outstanding against or in respect of any member of the Wider PHC Group, in each case, which might reasonably be expected to have a material adverse effect on the Wider PHC Group;

(iv)       no contingent or other liability having arisen or become apparent to Bidco or increased other than in the ordinary course of business which is reasonably likely to affect adversely the business, assets, financial or trading position or profits of any member of the Wider PHC Group to an extent which is material in the context of the Wider PHC Group, taken as a whole;

(v)        no steps having been taken and no omissions having been made which result in or which are reasonably likely to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the Wider PHC Group which is necessary for the proper carrying on of its business and the withdrawal, cancellation, termination or modification of which would reasonably be expected to have a material adverse effect on the Wider PHC Group, taken as a whole; and

(vi)       no member of the Wider PHC Group having conducted its business in material breach of any applicable laws and regulations which, in any case, is material in the context of the Wider PHC Group; and

No discovery of certain matters regarding information and liabilities, corruption, intellectual property and environmental liabilities

(h)                    except as Disclosed, Bidco not having discovered that:

(i)         any financial, business or other information concerning the Wider PHC Group announced publicly and delivered by or on behalf of PHC through a Regulatory Information Service prior to the date of this Announcement is materially misleading, contains a misrepresentation of any fact, or omits to state a fact necessary to make that information not misleading (and which was not subsequently publicly corrected before the date of this Announcement or otherwise to PHC or its professional advisers);, in any such case which is material and adverse in the context of the Wider PHC Group, taken as a whole or in the context of the Acquisition;

(ii)        any member of the Wider PHC Group, otherwise than in the ordinary course of business, is subject to any material liability, contingent or otherwise, and which is material and adverse in the context of the Wider PHC Group, taken as a whole or in the context of the Acquisition;

(iii)        any past or present member, director, officer or employee of the Wider PHC Group, or any other person for whom any such person is legally liable or responsible, has, in a manner that would cause any member of the Wider PHC Group to be liable for such actions, not complied with the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and any laws implementing the same, the UK Bribery Act 2010 and/or the US Foreign Corrupt Practices Act of 1977;

(iv)       any past or present member, director, officer or employee of the Wider PHC Group, or any other person for whom any such person is legally liable or responsible, has, in a manner that would cause any member of the Wider PHC Group to be liable for such actions, engaged in any business with or made any investment in, or made any payments to: (A) any government, entity or individual with which US or EU persons are prohibited from engaging in activities or doing business by US or EU laws or regulations, including the economic sanctions administered by the United States Office of Foreign Assets Control or HM Treasury & Customs, or (B) any government, entity or individual targeted by any of the economic sanctions of the United Nations or the European Union or any of their respective member states;

(v)        any asset of any member of the Wider PHC Group constitutes criminal property as defined by section 340(3) of the Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that definition);

(vi)       no circumstance having arisen or event having occurred in relation to any intellectual property owned, used or licensed by the Wider PHC Group, including: (A) any member of the Wider PHC Group losing its title to any intellectual property or any intellectual property owned by the Wider PHC Group which is material to the operation of the business of the Wider PHC Group being revoked, cancelled or declared invalid, (B) any agreement regarding the use of any intellectual property licensed to or by any member of the Wider PHC Group being terminated or varied, or (C) any claim being filed suggesting that any member of the Wider PHC Group infringed the intellectual property rights of a third party or any member of the Wider PHC Group being found to have infringed the intellectual property rights of a third party, in each case, which is material and adverse in the context of the Wider PHC Group, taken as a whole or in the context of the Acquisition; or

(vii)       in relation to any use, treatment, handling, storage, carriage, release, emission, accumulation, discharge, disposal, spillage, or other similar circumstance which has impaired or is likely to impair the environment (including property) or harmed or is likely to harm the health of humans, animals or other living organisms or eco-systems, any past or present member of the Wider PHC Group, in a manner or to an extent which would or might reasonably be expected to cause any member of the Wider PHC Group to be liable for such actions and is material and adverse in the context of the Wider PHC Group, taken as a whole or in the context of the Acquisition: (A) has committed any violation of any applicable laws, statutes, regulations, Authorisations, notices or other requirements of any Third Party giving rise to a material liability; and/or (B) has incurred any material liability (whether actual or contingent) to any Third Party; and/or (C) is likely to incur any material liability (whether actual or contingent), or is required, to make good, remediate, repair, re-instate or clean up the environment (including any property) in each case of (A), (B) or (C) which such liability or requirement would be material to the Wider PHC Group, taken as a whole or in the context of the Acquisition; or

(viii)      circumstances exist (whether as a result of the making of the Acquisition or otherwise) which would be reasonably likely to lead to any Third Party instituting, or whereby any member of the Wider PHC Group would be likely to be required to institute, an environmental audit or take any other steps which would in any such case be reasonably likely to result in any liability (whether actual or contingent) to improve, modify existing or install new plant, machinery or equipment or carry out changes in the processes currently carried out or make good, remediate, repair, re-instate or clean up any land or other asset currently or previously owned, occupied or made use of by any past or present member of the Wider PHC Group (or on its behalf) or by any person for which a member of the Wider PHC Group is or has been responsible, or in which any such member may have or previously have had or be deemed to have had an interest which is material and adverse in the context of the Wider PHC Group taken as a whole or in the context of the Acquisition.

(i)         Part B: Waiver and invocation of the Conditions

1.         Subject to the requirements of the Takeover Panel, and in accordance with the Code and to the extent permitted by law, Bidco reserves the right in its sole discretion to waive, in whole or in part:

(a)        all or any of the Conditions set out in Part A of this Appendix I except Conditions 1, 2(a)(i), 2(b)(i) and 2(c)(i) which cannot be waived; and

(b)        the deadlines in any of Conditions 2(a)(ii), 2(b)(ii) and 2(c)(ii). If such deadline is not met, Bidco shall make an announcement by 8.00 a.m. on the Business Day following such deadline confirming whether it has invoked or waived the relevant Condition, or agreed with PHC to extend the relevant deadline in relation to the relevant Condition.

 

2.         The Conditions set out in paragraphs 2 and 3 (inclusive) of Part A of this Appendix I must be fulfilled or waived (to the extent capable of waiver) by no later than the appointed time of the Sanction Hearing. The Acquisition will lapse if it does not become Effective by 23:59 p.m. on the Long Stop Date. Bidco shall be under no obligation to waive (if capable of waiver), to determine to be or remain satisfied or treat as fulfilled any of Conditions 3(a) to 3(h) of Part A of this Appendix I by a date earlier than the latest date for the fulfilment or waiver of that Condition specified above, notwithstanding that the other Conditions may at such earlier date have been waived or fulfilled and that there are, at such earlier date, no circumstances indicating that any Condition may not be capable of fulfilment.

3.         Subject to paragraph 4 below, under Rule 13.5(a) of the Code, Bidco may only invoke a Condition so as to cause the Acquisition and/or the Scheme not to proceed, to lapse or so as to cause any Takeover Offer to lapse or be withdrawn to be withdrawn with the consent of the Takeover Panel. The Takeover Panel will normally only give its consent if the circumstances which give rise to the right to invoke the Condition are of material significance to Bidco in the context of the Acquisition. This will be judged by reference to the facts of each case at the time that the relevant circumstances arise.

4.         Conditions 1 and 2 of Part A of this Appendix I (and, if applicable, any Takeover Offer acceptance condition adopted on the basis specified in Part C of this Appendix I) will not be subject to Rule 13.5(a) of the Code.

5.         Each of the Conditions shall be regarded as a separate Condition and shall not be limited by reference to any other Condition.

Part C: Implementation by way of a Takeover Offer

1.         If the Takeover Panel requires Bidco to make a Takeover Offer for any PHC Shares under the provisions of Rule 9 of the Code, Bidco may make such alterations to the Conditions and further terms of the Acquisition as are necessary to comply with the provisions of that Rule.

2.         Bidco reserves the right to elect (with the consent of the Takeover Panel, if required) to implement the Acquisition by way of a Takeover Offer as an alternative to the Scheme. In such event, the Takeover Offer will be implemented on the same terms and conditions, or, if Bidco so decides (with the consent of the Takeover Panel), on such terms being no less favourable,, as those which would apply to the Scheme (subject to appropriate amendments for an acquisition being made by way of a Takeover Offer). The acceptance condition would be set at 90 per cent. of the shares to which such Takeover Offer relates (or such lesser percentage, being more than 50 per cent., as Bidco may decide with the consent of the Takeover Panel). Further, if sufficient acceptances of such Takeover Offer are received and/or sufficient PHC Shares are otherwise acquired, it is the intention of Bidco to apply the provisions of the Companies Act to acquire compulsorily any outstanding PHC Shares to which such offer relates. In the event that the Acquisition is implemented by way of a Takeover Offer, the acceptance condition shall not be capable of being satisfied until all of the other conditions to the Takeover Offer have either been satisfied or (if capable of waiver) waived.

Part D: Certain further terms of the Acquisition

1.         Bidco reserves the right to implement the Acquisition through any other entity owned by PI from time to time.

2.         The PHC Shares shall be acquired by Bidco, pursuant to the Acquisition, fully paid and free from all liens, equitable interests, charges, encumbrances, rights of pre-emption and any other third party rights and interests whatsoever and together with all rights existing at the Announcement Date or thereafter attaching thereto, including (without limitation) the right to receive and retain, in full, all dividends and other distributions (if any) declared, made, paid or payable or any other return of capital or value (whether by way of reduction of share capital or share premium account or otherwise) made in each case by reference to a record date falling on or after the Effective Date.

3.         If, subject to the terms of the Scheme, on or after the Announcement Date and before the Effective Date, any dividend and/or distribution and/or other return of capital or value is authorised, announced, declared, made or paid or becomes payable in respect of the PHC Shares, and with a record date on or prior to the Effective Date, Bidco reserves the right (without prejudice to any right of Bidco, with the consent of the Panel, to invoke the Condition set out in paragraph 3(f)(ii) of Part A to this Appendix 1) to reduce the consideration payable under the Acquisition in respect of each PHC Share by the aggregate amount of all or part of any such dividend and/or other distribution and/or other return of capital or value. If Bidco, acting with the consent of the Takeover Panel, exercises this right or makes such a reduction in respect of a dividend or other distribution, PHC Shareholders will be entitled to receive and retain that dividend or other distribution. Any exercise by Bidco of its rights referred to in this paragraph 3 shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the Acquisition. .

4.         The availability of the Acquisition to persons not resident in the United Kingdom may be affected by the laws of relevant jurisdictions. Therefore, any persons who are subject to the laws of any jurisdiction other than the United Kingdom and any PHC Shareholders who are not resident in the United Kingdom will need to inform themselves about and observe any applicable requirements.

5.         Unless otherwise determined by Bidco or required by the Code and permitted by applicable law and regulations, the Acquisition is not being, and will not be, made, directly or indirectly, in, into or by the use of the mails of, or by any other means or instrumentality (including, but not limited to, facsimile, email or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of, any Restricted Jurisdiction and will not be capable of acceptance by any such use, means, instrumentality or facility or from within any Restricted Jurisdiction.

6.         The Acquisition will be subject, amongst other things, to the Conditions and certain further terms which are set out in this Appendix I and those terms which will be set out in the Scheme Document and will be subject to the applicable requirements of, and such further terms as may be required to comply with, the AIM Rules and the provisions of the Code and any requirement of the Takeover Panel, the London Stock Exchange, the FCA and the Registrar of Companies.

7.         This Announcement and any rights or liabilities arising hereunder, the Acquisition, the Scheme and the Forms of Proxy will be governed by English law and will be subject to the jurisdiction of the English courts.