Oxford Pharmascience Group (AIM:OXP) Announcement of demerger

The Company today announces its intention to demerge certain operating and other assets and the business of the Group to Oxford Pharmascience Limited (“OPL”), following a Board strategic review of the Group’s operations. The Demerger constitutes a fundamental disposal under Rule 15 of the AIM Rules and is subject to Shareholder approval at the General Meeting to be held at 11:00 a.m. on 27 November 2017 at the offices of DWF LLP at 20 Fenchurch Street, London EC3M 3AG.

Rationale for the Demerger

The objective of the Demerger is to maximise value to Existing Shareholders:

·     through ongoing commercialisation of the Group’s existing commercial and development assets and intellectual property in a private vehicle; and

·     by providing a continued investment in a Rule 15 Cash Shell seeking to deploy the Company’s remaining cash assets through the acquisition of an operating business (or operating assets), with such an acquisition constituting a reverse takeover

The Board believes the Demerger to be in the best interests of the Company and Existing Shareholders and further that the Demerger allows:

·     OPL to continue commercialisation efforts of the Group’s OXPzeroTM platform technology as a private company with cash reserves of approximately £1.3 million whilst revenue will continue to be generated from the on-going sales of calcium chew products

·     Existing Shareholders to maintain a continued investment in this business through the receipt of OPL Shares to be distributed to them in the same proportions as their existing holdings in the Company on the Record Date

·     Existing Shareholders to also retain the potential upside from continuing interests in the Company via the investment of its remaining cash resources of approximately £19.3 million as at 31 October 2017 into other opportunities as further described below.

Structure of the Demerger

The Demerger represents a fundamental change of business under Rule 15 of the AIM Rules and therefore requires the approval of Existing Shareholders at the General Meeting described above. Completion of the Demerger will result in the Company becoming a Rule 15 Cash Shell.

In order to give effect to the Demerger, the Company is proposing to reorganise the existing issued share capital and undertake a capital reduction and cancellation of its share premium account, which will also require an amendment to the Company’s Articles of Association. Finally, in order to reflect the revised strategy of the Company going forward (as a Rule 15 Cash Shell) it is proposed that the Company change its name to Abaco Capital plc.

The Demerger will involve the Company’s entire holding of shares in its subsidiary, OPL, which holds substantially all of the Group’s commercial assets, drug development assets and intellectual property, being distributed in specie to Existing Shareholders.

Status and Strategy of Abaco Capital plc as a Rule 15 Cash Shell

Following completion of the Demerger, the Company will become a Rule 15 Cash Shell and will therefore be required to make an acquisition which constitutes a reverse takeover under Rule 14 of the AIM Rules (including seeking re-admission as an investing company (as defined under the AIM Rules) on or before the date falling six months from completion of the Demerger.

In seeking and considering potential acquisitions, the Board of Directors intends to identify opportunities offering the potential to deliver value creation and returns to shareholders over the medium to long-term. The Company will consider investment opportunities in any sectors as they arise, however, the Board of Directors have a combined skill set and experience particular to the pharmaceutical, biotechnology and technology sectors.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Notes:

(1)     Each of the times and dates set out in the above timetable and mentioned in this announcement is subject to change by the Company, in which event details of the new times and dates will be notified by an appropriate announcement.

(2)     References to times are to London times unless otherwise stated.

(3)     All events in the above timetable following the holding of the General Meeting are conditional upon: (i) the passing of the Resolutions; (ii) approval of the Capital Reductions by the High Court; and (iii) registration of the High Court Order confirming the Capital Reductions with the UK Registrar of Companies.

ADDITIONAL INFORMATION

The New Shares will have the same stock identification codes as the Existing Ordinary shares as follows:

ISIN:      GB00B3LXPB43

SEDOL: B3LXPB4

The profits attributable to OPL are a loss before tax of £1.5 million for the twelve months ended 31 December 2016 and a loss before tax of £1.2 million for the six months ended 30 June 2017.

Further information is contained within the Circular posted today to Shareholders, a copy of which can also be found in the Investor Relations section of the Company’s website, www. oxfordpharmascience.com.

Shareholders are strongly advised to read the Circular in its entirety, which contains important information about risk factors associated with their continuing investments in both OPL and the Company, the legal process to give effect to the Demerger and details of the General Meeting.

This announcement is released by Oxford Pharmascience Group plc and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 (“MAR”), encompassing information relating to the proposed Demerger described herein, and is disclosed in accordance with the Company’s obligations under Article 17 of MAR. For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of the Company by Marcelo Bravo and Chris Hill, save for the related party transaction disclosures, which the Independent Directors are making on behalf of the Company.




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