Milano, May 24th, 2020
The Company informs that on May 22nd 2020, as part of the so-called “business combination” transaction with Biogenera S.p.A. (respectively, the “Significant Transaction” and “Biogenera”) referred to in the press releases of February 21 and April 29, 2020, the Boards of Directors of LCC and Biogenera approved the joint plan relating to the merger by incorporation of LCC into Biogenera (respectively, the “Merger” and the “Merger Plan”), together with the report of the Board of Directors on the Merger Plan pursuant to Article 2501-quinquies of the Italian Civil Code.
The Merger (whose approval by the shareholders’ meetings of LCC and Biogenera is expected by June 30, 2020, together with the other resolutions relating to the Significant Transaction to be approved by the general and special shareholders’ meetings of the companies participating in the Merger) will be resolved on the basis of the balance sheets of LCC and Biogenera as at December 31, 2019.
On the basis of the above mentioned accounting documents, for the purposes of the exchange ratio, it has been taken into consideration a net worth of LCC as at 31 December 2019 equal to € 142.3 million and an equity value of Biogenera equal to € 70 million.
For the purposes of the exchange ratio, it is envisaged that the shareholders’ meeting of Biogenera, which will be called, among other things, to approve the Merger, will also resolve a split of the shares constituting its share capital, which will thus increase from the current no. 1,452,100 shares to no. 7,000,000 shares (each with a unit value of Euro 10).
In addition, for the purposes of the exchange ratio, the Boards of Directors of Life Care Capital and Biogenera have also taken into account the fact that the shareholders’ meeting of Life Care Capital that will be called to approve the Significant Transaction will also be called to resolve – in the timing and in the manner better specified in the Merger Plan, in accordance with the By-laws – on the distribution of an extraordinary dividend (to be taken from the available reserves) in favor of its ordinary shareholders who have not exercised their Right of Withdrawal referred to below, for a maximum amount of Euro 30 million (the “Extraordinary Dividend”). In this regard, it is also envisaged that the Life Care Capital’s shareholders’ meeting will also be called upon to approve an amendment to Article 6.4, letter c) of the By-laws, in order to remove the right of special shares to receive any distribution of available reserves and, consequently, of the Extraordinary Dividend. It should be noted that, on the basis of the above, the Boards of Directors of LCC and Biogenera have determined the following exchange ratios:
i. for each LCC ordinary share will be allocated from a minimum of 0.8282 Biogenera ordinary share (in case of payment of the Extraordinary Dividend and without any exercise of the Right of Withdrawal mentioned below) to a maximum of 1.0607 ordinary share of Biogenera (in case of exercise of the Right of Withdrawal involving the redemption or cancellation by the Company of a number of shares equal to 30% minus 1 share and the absence of any payment of the Extraordinary Dividend);
ii. no. 1 Biogenera special share will be allocated for each LCC special share, also due to the fact that it is envisaged that holders of LCC special share will not receive the Extraordinary Dividend mentioned above and that post-Merger Biogenera special share will continue to benefit from the current 1:6 conversion ratio into ordinary shares.
Finally, the Merger Plan envisaged that for each LCC warrant will be allocated n. 1 Biogenera warrant. The joint expert appointed by the Court of Bologna pursuant to Article 2501-sexies of the Italian Civil Code has released his report, confirming the fairness of the exchange ratio of ordinary shares and special shares.
As from the effective date of the Merger, Life Care Capital ordinary shares and Life Care Capital warrants will be withdrawn from trading on AIM Italia.
The ordinary shareholders of Life Care Capital and the holders of Life Care Capital warrants will receive in exchange, respectively, post-Merger Biogenera ordinary shares and post-Merger Biogenera warrants whose admission to trading on AIM Italia will be requested (from the effective date of the Merger).
On the effective date of the Merger and after the conversion of 20% of the Biogenera special shares into Biogenera ordinary shares, based on a conversion ratio of 1:6, the market will hold a stake in the share capital of the company resulting from the Merger itself which will be between approximately 66.3% of the share capital (in the case of the exercise of the Right of Withdrawal involving the redemption or cancellation by the Company of a number of shares equal to 30% minus 1 share and absence of any payment of the Extraordinary Dividend) and 68.7% (in the case of payment of the Extraordinary Dividend and without any exercise of the Right of Withdrawal).
The exact percentage of market ownership in the company resulting from the Merger will therefore depend on the number of ordinary shares of LCC that may be subject to the right of withdrawal pursuant to Article 15 of the By-Laws (the “Right of Withdrawal”) and possible cancellation. In relation to such Right of Withdrawal, LCC Board of Directors will determine the liquidation value of LCC ordinary shares within the terms set forth by the law and in accordance with the provisions of the By-laws in force.
The Merger Plan was filed today with the Companies’ Register of Milan and Bologna.
In addition, the Merger Plan and the board of directors’ reports on the Merger Plan of LCC and Biogenera and the expert’s report on the fairness of the exchange ratio, together with the merger documentation required by the Italian Civil Code, are available to the public at the registered offices of LCC and Biogenera, as well as on the “Investor Relations – Operazione Rilevante” section.
For further information on the Relevant Transaction, please refer to the information document prepared by LCC pursuant to art. 14 of the AIM Italia Issuers’ Regulations and available at the registered office of Life Care Capital in Milan, C.so Italia 22, 20122 and on Investor Relations – Operazione Rilevante.