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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 25, 1999 (May 20, 1999)
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THERAPEUTIC ANTIBODIES INC.
(Exact name of registrant as specified in its charter)
Delaware 0-25978 62-1212485
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification
Number)
1207 17th Avenue South
Suite 103
Nashville, Tennessee 37212
(Address of principal executive offices) (Zip Code)
(615) 327-1027
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On May 20, 1999, Therapeutic Antibodies Inc. (the "Company") announced
that it has entered into an Agreement and Plan of Merger, dated as of May 20,
1999 (the "Merger Agreement"), with Proteus International, plc, a public company
incorporated under the laws of England and Wales ("Proteus"). Pursuant to and
subject to the terms and conditions of the Merger Agreement, the Company will
merge with and into PI Merger Sub, Inc., a Delaware corporation and a
wholly-owned subsidiary of Proteus (the "Merger"), with PI Merger Sub, Inc.
remaining a wholly-owned subsidiary of Proteus. At the effective time of the
Merger, Company shareholders will receive 1.163 Proteus ordinary shares for each
share of Company common stock.
The Board of Directors of the combined company will be comprised of the
existing members of the Company's and Proteus' boards plus James Christie, an
officer of the Company. Stuart M. Wallis, the Company's Chairman, and Andrew J.
Heath, the Company's Chief Executive Officer, will serve as non-executive
chairman and Chief Executive Officer, respectively, of the combined company.
David Gration, Chairman of Proteus, will serve as non-executive Deputy Chairman
of the combined company.
The Merger is subject to approval by the shareholders of both the
Company and Proteus and certain other conditions as described in the Merger
Agreement. The Company anticipates that the Merger will become effective as soon
as practicable following approval by the shareholders of both companies and
satisfaction of all other closing conditions.
Contingent on closing of the Merger, Proteus has obtained commitments
for the placing of 23,325,000 Proteus ordinary shares for aggregate proceeds to
the combined company of U.K. (pound) 7.0 million (the "Financing"). The
Financing is expected to close immediately following the closing of the Merger.
The Company and Proteus have received the opinion of PricewaterhouseCoopers that
proceeds of the Financing, together with revenues from anticipated product
sales, should be sufficient to fund the combined company's operations through
the year 2000.
To provide working capital until the closing of the Merger, the Company
has obtained a short-term secured bridge facility from Barclays Bank Plc
("Barclays") in the amount of U.K. (pound) 3.0 million (U.S. $4.89 million) (the
"Bridge Facility"). The Bridge Facility is to be repaid in full on September 20,
1999, or at such earlier time as Barclays may demand, and bears interest at a
rate of 2.0% per annum over Barclays' base rate (currently 5.25%). The Bridge
Facility is secured by the guarantee of the Company's Therapeutic Antibodies UK
Ltd. subsidiary and a charge over the Company's manufacturing facility in
Wales. It is anticipated that the Bridge Facility will be repaid in full from
the proceeds of the Financing.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
20.1 Copy of joint press release, dated May 20, 1999, relating to the
Merger and the Financing.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THERAPEUTIC ANTIBODIES INC.
By: /s/ Andrew J. Heath
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Andrew J. Heath, M.D., Ph.D.
Chief Executive Officer
Dated: May 25, 1999
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EXHIBIT 20.1
PROTEUS INTERNATIONAL PLC ("PROTEUS")
THERAPEUTIC ANTIBODIES INC ("THERAPEUTIC ANTIBODIES")
PROPOSED MERGER OF PROTEUS AND THERAPEUTIC ANTIBODIES
20 May 1999
INTRODUCTION
The Boards of Proteus and Therapeutic Antibodies are pleased to announce that
they have agreed a share for share merger of Proteus and Therapeutic Antibodies
(the "Merger") accompanied by a conditional non pre-emptive placing of
23,325,000 new Proteus Ordinary Shares at 40p per share (the "Placing Price") to
raise approximately (pound)7.0 million net of expenses (the "Placing") for the
enlarged group, which at the Placing price has a value of (pound)63.1 million.
Upon the Merger becoming effective, Therapeutic Antibodies shareholders will
receive 1.163 Proteus Ordinary Shares for each Share of Common Stock. The Merger
is subject to the approval of shareholders of both Proteus and Therapeutic
Antibodies. It is expected that shareholders' meetings of both companies will be
held in late August 1999.
Proteus is announcing today its preliminary results for the year ended 31 March
1999 and an update of its drug development portfolio. Included in this
announcement is the news that Proteus' Angiotensin Immunotherapeutic
anti-hypertensive drug candidate has recently entered human clinical trials.
Therapeutic Antibodies announced on 18 May 1999 its financial results for the
quarter ended 31 March 1999 and gave an update of its drug development
portfolio. This announcement contained news that Therapeutic Antibodies' Phase
IIb study of CytoTAb in sepsis, which was terminated early last year, has
demonstrated statistically significant clinical results against certain primary
endpoints.
David Gration, the Chairman of Proteus, said:
"Proteus and Therapeutic Antibodies have complementary product portfolios,
technology skills and management teams. The Merger represents an opportunity to
create a more broadly based, more resilient group with a strong product
pipeline."
Stuart Wallis, the Chairman of Therapeutic Antibodies, said:
"Proteus and Therapeutic Antibodies are two well matched companies whose
combination will create a stronger platform for enhancing shareholder value.
There is a good management fit and the combined portfolios provide a broader,
more balanced pipeline from pre-clinical to launched products"
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ENQUIRIES:
PROTEUS THERAPEUTIC ANTIBODIES
David Gration Stuart Wallis (0171 553 1483)
Barry Riley Andrew Heath (0171 606 8637)
(01625 500555)
WESTLB PANMURE BRITISH LINEN BANK
Christopher Collins Tony Brown
Ronald Openshaw 0171 710 8800
0171 638 4010
DELOITTE & TOUCHE CORPORATE FINANCE
Robin Binks
Tim Cofman
0171 936 3000
BUCHANAN COMMUNICATIONS THE MAITLAND CONSULTANCY
Tim Andersen William Clutterbuck
Lisa Baderoon Laura Frost
0171 466 5000 0171 379 5151
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THE MERGER AND ITS TERMS AND CONDITIONS
MERGER RATIO
Upon completion of the Merger, each Therapeutic Antibodies shareholder will
receive 1.163 Proteus Ordinary Shares for each Therapeutic Antibodies Share of
Common Stock. The Merger will involve the issue of up to 60,542,545 new Proteus
Ordinary shares (representing 81.8% of the existing issued share capital) and
will result in existing Proteus shareholders and Therapeutic Antibodies
stockholders holding 55 per cent and 45 per cent respectively of the enlarged
issued share capital of Proteus prior to the Placing.
The Merger values each Therapeutic Antibodies Share of Common Stock at
approximately 45.9p per share and the whole of the Therapeutic Antibodies at
(pound)23.9 million (based on the mid-market closing price for Proteus shares of
39.5p at 19 May 1999, being the last trading day prior to the announcement of
the Merger).
BOARD OF DIRECTORS
It is proposed that Stuart Wallis, Dr Andrew Heath, James Christie, Martin Brown
and Professor Tim Chard, the existing directors of Therapeutic Antibodies,
together with James Christie, who is currently Operations Director of
Therapeutic Antibodies, will join the board of Proteus. Stuart Wallis will
become non-executive Chairman and David Gration will become non-executive Deputy
Chairman. The executive board is proposed to become:
Chief Executive Officer Dr. Andrew J. Heath
Chief Operating Officer Dr. Arthur Rushton
Research Director Dr. Allen Miller
Manufacturing Director James Christie
Finance Director Barry Riley
SHAREHOLDER APPROVAL
The Merger is subject to the approval of shareholders of both Proteus and
Therapeutic Antibodies. It is expected that shareholders' meetings of both
companies will be held in late August 1999. Subject to such approvals and the
satisfaction of certain other conditions, it is expected that the Merger will
become effective in the third quarter of 1999. In order to convene the
Therapeutic Antibodies special shareholders' meeting, a Form F-4 Registration
Statement ("Form F-4") must be filed with and declared effective by the US
Securities and Exchange Commission ("SEC"). Proteus will issue listing
particulars (the "Listing Particulars") describing the enlarged group, the
Merger and the Placing. The Listing Particulars will also comprise a Class 1
circular to seek Proteus shareholders' approval for the acquisition. Both
shareholders'
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meetings will be held as soon as practicable following the date on which the
Form F-4 is declared effective by the SEC.
To approve the Merger, the holders of at least a majority of the outstanding
Therapeutic Antibodies Shares of Common Stock must vote in favour of the Merger.
PRINCIPAL TERMS AND CONDITIONS OF THE MERGER
The Merger Agreement contains certain customary representations and warranties
by both Proteus and Therapeutic Antibodies concerning their respective financial
and business status, including; (i) organisation and capital structure; (ii)
authority to complete the Merger without violating agreements or applicable law;
(iii) the status of regulatory filings; (iv) the accuracy of information
supplied to the other party; (v) the compliance of the parties with applicable
law and regulatory requirements; (vi) the absence of legal proceedings; (vii)
the status of tax filings; (viii) the absence of certain changes since the
parties' most recent financial statements; (ix) the status of certain employee
benefit plans; (x) the absence of material environmental liabilities; (xi) the
status of the parties' proprietary rights; (xii) the possession of necessary
permits and licences to conduct business; (xiii) the absence of undisclosed
liabilities; and (xiv) title to properties.
The Merger is conditional on completion of the Placing. Application will be made
to the London Stock Exchange for up to 60,542,545 Ordinary Shares to be issued
in connection with the Merger and 23,325,000 Ordinary Shares to be issued in
connection with the Placing to be admitted to the Official List.
In addition to the matters described above, completion of the Merger is subject
to the satisfaction of various conditions, including the following:
- the continued accuracy of the representations and warranties made
by Proteus and Therapeutic Antibodies in the Merger Agreement;
- the performance of the covenants of Proteus and Therapeutic
Antibodies set forth in the Merger Agreement;
- the receipt by Proteus and Therapeutic Antibodies of a tax opinion
to the effect that no gain or loss will be recognised by Proteus
or Therapeutic Antibodies upon completion of the Merger;
- the receipt by Proteus of a letter from the U.K. Treasury that it
consents to the completion of the Merger for the purposes of the
Income and Corporation Taxes Act 1988;
- the absence of any event that would have a material adverse effect
on the business or financial condition of Proteus or Therapeutic
Antibodies;
- the receipt of all consents of third parties required to complete
the Merger;
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- holders of not more than 2.5% of the outstanding Therapeutic
Antibodies Shares of Common Stock exercising dissenters' rights
under Delaware law; and
- there being no event of default or repayment of borrowings under
certain Therapeutic Antibodies loan facilities.
EFFECT ON THERAPEUTIC ANTIBODIES WARRANTS AND OPTIONS
WARRANTS
Upon the Merger becoming effective, each outstanding warrant to purchase
Therapeutic Antibodies Shares of Common Stock will be converted into a warrant
to purchase 1.163 Proteus Ordinary Shares for each Therapeutic Antibodies Share
of Common Stock covered by the warrant, for the same aggregate purchase price
set forth in the Therapeutic Antibodies warrant.
1990 STOCK INCENTIVE PLAN
Upon the Merger becoming effective, each outstanding option to purchase
Therapeutic Antibodies Shares of Common Stock issued under Therapeutic
Antibodies' 1990 Stock Incentive Plan will be converted into an option to
purchase 1.163 Proteus Ordinary Shares for each Therapeutic Antibodies Share of
Common Stock covered by the option, for the same aggregate purchase price set
forth in the Therapeutic Antibodies option.
1997 STOCK OPTION PLAN
Upon the Merger becoming effective, all outstanding options to purchase
Therapeutic Antibodies Shares of Common Stock issued under Therapeutic
Antibodies' 1997 Stock Option Plan will be cancelled as provided in the plan, to
the extent not previously exercised. Holders of options outstanding under the
1997 Stock Option Plan will be entitled to exercise their options, if they
desire to do so, immediately prior to the completion of the Merger, whether or
not the applicable option vesting requirements have been satisfied.
INTERESTS OF OFFICERS AND DIRECTORS IN THE TRANSACTIONS
As a result of the Merger, the compensation package of Mr Gration and the
arrangements for the supply of Mr Wallis' services will be altered. Mr Gration
will become non-executive Deputy Chairman of Proteus and his remuneration will
be reduced accordingly. Compensation will be paid that reflects his contractual
arrangements.
Mr Wallis is presently interested in the capital of Therapeutic Antibodies by an
arrangement whereby he may receive Therapeutic Antibodies Shares of Common Stock
equivalent to 10 per cent of any increase in market value of Therapeutic
Antibodies provided certain conditions are met. This arrangement is being
amended to provide for Mr Wallis to receive options to acquire Proteus Ordinary
Shares equivalent to 4.5 per cent of the increase in market capitalisation of
Proteus above a share price of 39.5p. Mr Wallis' present arrangement will lapse
upon the Merger becoming effective. The proposed arrangement is subject to a
special resolution of the
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Proteus shareholders at the EGM. Further details of the arrangement will be
described in the Listing Particulars.
THE PLACING
Proteus has entered into a conditional placing agreement to raise approximately
(pound)7.0 million net of expenses by issuing 23,325,000 Ordinary Shares (the
"Placing Shares") at 40p per share, representing 31.5 per cent of the existing
issued share capital and 14.7 per cent of the enlarged share capital following
the Merger. The Placing shares have been conditionally placed by WestLB Panmure
on a non pre-emptive basis with (non-US) institutional investors. WestLB Panmure
has fully underwritten the Placing.
The Placing is conditional on completion of the Merger by 20 December 1999. The
proceeds from the Placing will be used for working capital following completion
of the Merger and repayment of certain borrowings.
The Placing will be subject to the passing of the necessary resolutions of
shareholders at the EGM of Proteus and has been arranged on a non pre-emptive
basis because it was considered impracticable to obtain commitments from placees
if pre-emption rights were to be offered to shareholders.
OTHER MATTERS
There will be an analysts' presentation at 11.00 am and a press presentation at
12.30 p.m. today at the offices of WestLB Panmure at 35 New Broad Street, London
EC2M 1SQ.
This announcement does not constitute an offer or invitation to purchase any
securities. The offering of Proteus Ordinary Shares in exchange for Therapeutic
Antibodies Shares of Common Stock will be made only by means of a
Prospectus/Proxy Statement which it is anticipated will be distributed to
Therapeutic Antibodies shareholders in August 1999.
The issue of this announcement has been approved by the directors of Proteus who
accept responsibility for the information contained within it on Proteus and has
been approved by the directors of Therapeutic Antibodies who accept
responsibility for the information contained within it on Therapeutic
Antibodies.
This announcement has been approved for the purposes of section 57 of the
Financial Services Act 1986 by WestLB Panmure.
WestLB Panmure, which is regulated by The Securities and Futures Authority
Limited, is acting as lead financial adviser exclusively for Proteus in
connection with the Merger and no-one else and will not be responsible to anyone
other than Proteus for providing the protections afforded to customers of WestLB
Panmure, or for giving advice in relation to the Merger.
Deloitte & Touche, which is authorised by the Institute of Chartered
Accountants, in England and Wales to carry on investment business is acting as
joint financial adviser exclusively for Proteus in connection with the Merger
and no-one else and will not be responsible to anyone
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other than Proteus for providing the protection afforded to clients of Deloitte
& Touche, or for giving advice in relation to the Merger.
British Linen Bank, which is regulated by The Securities and Futures Authority
Limited, is acting as financial adviser exclusively for Therapeutic Antibodies
in connection with the Merger and no-one else and will not be responsible to
anyone other than Therapeutic Antibodies for providing the protections afforded
to customers of British Linen Bank, or for giving advice in relation to the
Merger.
DEFINITIONS
The following definitions apply throughout this announcement save where the
context otherwise requires.
British Linen Bank The British Linen Bank Limited
Official List The official list of the London Stock Exchange
London Stock Exchange London Stock Exchange Limited
Merger Agreement The agreement dated 20 May 1999 between Proteus
and Therapeutic Antibodies which sets out the
terms and conditions relating to the merger of the
companies
Proteus Ordinary Shares The ordinary shares of 2p each in Proteus
Proteus shareholder(s) Holder(s) of Proteus Ordinary Shares
SEC The Securities and Exchange Commission in the
United States
Therapeutic Antibodies Share(s) of common stock of US$0.001 each in the
Common Stock capital of Therapeutic Antibodies
Therapeutic Antibodies Holder(s) of Therapeutic Antibodies Common Stock
shareholder(s)
U.K. United Kingdom
U.S. or United States United States of America, each state thereof, its
territories and possessions and the District of
Columbia
US$ or $ United States dollars
WestLB Panmure WestLB Panmure Limited
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