Proposed Placing, Subscription and Open Offer

RNS Number : 5994F

Plant Health Care PLC

29 July 2016

 

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN, IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, OR REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO.

29 July 2016

PLANT HEALTH CARE PLC

("Plant Health Care", the "Company" or the "Group")

Proposed Placing, Subscription and Open Offer

Plant Health Care plc (AIM: PHC), a leading provider of novel patent-protected biological products to global agriculture markets is pleased to announce a proposed capital raising to raise gross proceeds of approximately £7.6 million, through the issue of new ordinary shares by way of a placing and direct subscription to raise approximately £5.6 million (the "Placing") and an open offer to raise a further £2.0 million (the "Open Offer") (together the "Capital Raising"). The new ordinary shares available under the Open Offer have been conditionally placed subject to clawback to satisfy valid applications by qualifying shareholders under the Open Offer.

The issue price of the Capital Raising is 10 pence, which represents a discount of approximately 40 per cent. to the closing price of each existing ordinary share of the Company of 16.75 pence on 28 July 2016 (being the latest practicable date prior to the publication of this announcement).

Liberum Capital Limited is acting as sole bookrunner. The Capital Raising is conditional upon, inter alia, the approval by shareholders in a General Meeting of the Company and admission of the new ordinary shares pursuant to the Capital Raising to trading on AIM.

The Company will shortly be publishing a circular (the "Circular") in connection with the Capital Raising, which will be available on the Company's website at www.planthealthcare.com. Capitalised terms shall have the same meaning as in the Circular unless the context requires otherwise.

Background to and reasons for the Placing and Open Offer and use of proceeds

Given the promising progress made over the last two years in advancing the Group's PREtec peptides, the Board had approved an increase in research and development expenditure to ensure that the potential of the technology is realised and appropriate intellectual property protected. The Group had a negative cash flow in 2015 of approximately US$8 million largely due to continued investment in research and development in its New Technology business. The Group expects negative cash flow to continue until the combination of income from the Commercial business and out-licence income from the New Technology business exceeds research and development and administrative expenditure. The Group will continue to take steps to minimise its cash burn in 2016/17 through increased focus on cost control.

The Board has considered other fundraising options available to the Company and believe that the Capital Raising is in the best interests of the Company.

The Company expects to use the net proceeds of the Capital Raising of approximately £7.4 million, together with existing cash and investments as follows:

·     advance PREtec, including the development of Innatus 3G, the Group's first platform of peptides developed using PREtec, and other existing and future technologies derived from its New Technology activities;

·     support the growth of its Commercial business; and

·     provide funds for other capital expenditures, working capital, strategic growth opportunities and general corporate purposes.

The Board believes the net proceeds of the Capital Raising, together with existing cash, will provide sufficient working capital for at least 12 months following the Capital Raising.

Current trading and outlook

The Group continues to trade in line with market expectations. The Group's short term aim is to reduce and ultimately eliminate any requirement for cash to fund the Commercial business so as to ensure that the maximum available cash reserves are deployed in supporting the New Technology activities.

As set out in the announcement made by the Company on 7 June 2016, progress continues to be very encouraging in the development of the PREtec peptide technology platforms. Since that date, the Group has signed an amendment to the evaluation agreements for Innatus 3G with two of its partners, to widen the scope of the evaluation. The Group's target remains to achieve a revenue generating event on one of the platforms during 2017 and to commence the first competitive licensing process for Innatus 3G at the end of 2017.

The Company is evaluating the possibility of a US listing. A decision whether to proceed with such listing will be dependent upon the achievement of key operational and financial milestones and subject to market conditions. Costs of approximately US$1.1 million associated with a potential US listing have been incurred and will be accounted for in the first half of 2016.

Details of the Placing and Open Offer

Structure

The Board has given careful consideration as to the structure of the Capital Raising and has concluded that the Placing and Open Offer is the most suitable option available to the Company and its Shareholders at this time.

55,960,810 New Ordinary Shares will be issued through the Firm Placing and Subscription at 10 pence per New Ordinary Share to raise gross proceeds of £5.6 million.

20,006,986 New Ordinary Shares will be issued through the Conditional Placing, subject to clawback to satisfy valid applications under the Open Offer, at 10 pence per Open Offer Share to raise gross proceeds of £2.0 million.

The Issue Price represents a 40 per cent. discount to the Closing Price of 16.75 pence per Ordinary Share on the Latest Practical Date.

Firm Placing and Subscription

In accordance with the terms of the Placing and Open Offer Agreement, Liberum Capital has, as agent for the Company, placed the Firm Placing Shares. The Company has contracted directly with the Subscribers for the Subscription of the Subscription Shares.

The Firm Placing Shares and Subscription Shares, which together raise gross proceeds of £5,596,081 million, are not subject to clawback and are not part of the Open Offer.

Conditional Placing

In accordance with the terms of the Placing and Open Offer Agreement, Liberum Capital has, as agent for the Company, conditionally placed with Richard Griffiths the Conditional Placing Shares. In consideration for agreeing to underwrite the Open Offer through the mechanism of the Conditional Placing, Richard Griffiths will receive a fee of 1 per cent. of the value of the Conditional Placing being a fee of approximately £20,000.

The Conditional Placing Shares are subject to clawback to satisfy valid applications under the Open Offer so as to ensure that, in the event that the Open Offer is not taken up in full, the balance of any New Ordinary Shares not taken up as Open Offer Shares by Qualifying Shareholders will be taken up by the Conditional Placee.

The combined gross proceeds of the Conditional Placing and the Open Offer will be £2,000,698.60.

Principal terms of the Open Offer

The Board considers it important that Qualifying Shareholders have the opportunity to participate in the Capital Raising, and the Board has concluded that the Open Offer is the most suitable option available to the Company and its Shareholders.

The Open Offer provides an opportunity for all Qualifying Shareholders to participate in the Capital Raising (on and subject to the terms and conditions of the Open Offer) by both subscribing for their respective Basic Entitlements and by applying for Excess Shares under the Excess Application Facility, subject to availability.

The Company proposes to adopt the following Allocation Policy:

(i)         subject always to sub-paragraphs (ii), (iii) and (iv) below, the Excess Shares will be allocated at the Board's absolute discretion (following discussions with Liberum);

(ii)         no Excess Shares will be allocated to a Qualifying Shareholder that has undertaken to the Company or Liberum not to take-up its entitlement under the Open Offer;

(iii)        valid applications by Qualifying Shareholders for Excess Shares will be allocated up to such number of Excess Shares (rounded down to the nearest whole number of Excess Shares) as would enable such Qualifying Shareholder to maintain his percentage holding in Ordinary Shares immediately following the Placing and Open Offer at his Current Percentage Holding; and

(iv)        no Qualifying Shareholder shall be entitled to increase his percentage holding in Ordinary Shares to a holding that would, immediately following the Placing and Open Offer, be greater than his Current Percentage Holding.

The aggregate number of Open Offer Shares available for subscription pursuant to the Open Offer will not exceed 20,006,986 New Ordinary Shares.

Since the Firm Placees and Subscribers are participating in the Firm Placing and the Subscription respectively they have each undertaken not to participate in the Open Offer. This will make New Ordinary Shares (the aggregate Basic Entitlements of the Firm Placees and the Subscribers) available to Qualifying Shareholders through the Open Offer in excess of their aggregate Basic Entitlements.

(a)        Basic Entitlement

Qualifying Shareholders have a Basic Entitlement of:

0.27843521 Open Offer Shares for every Existing Ordinary Share

registered in the name of the relevant Qualifying Shareholder on the Record Date rounded down to the nearest whole number of Open Offer Shares. Fractions of Open Offer Shares will be disregarded in calculating Basic Entitlements and will be aggregated and made available to Qualifying Shareholders under the Excess Application Facility.

(b)        Excess Application Facility

Subject to the Allocation Policy set out below and assuming that an individual Qualifying Shareholder has accepted his Basic Entitlement in full, the Excess Application Facility enables that Qualifying Shareholder to apply for any whole number of Excess Shares in addition to his Basic Entitlement.

The Company proposes to adopt the following Allocation Policy:

(i)         subject always to sub-paragraphs (ii), (iii) and (iv) below, the Excess Shares will be allocated at the Board's absolute discretion (following discussions with Liberum);

(ii)         no Excess Shares will be allocated to a Qualifying Shareholder that has undertaken to the Company or Liberum not to take-up its entitlement under the Open Offer;

(iii)        valid applications by Qualifying Shareholders for Excess Shares will be allocated up to such number of Excess Shares (rounded down to the nearest whole number of Excess Shares) as would enable such Qualifying Shareholder to maintain his percentage holding in Ordinary Shares immediately following the Placing and Open Offer at his Current Percentage Holding; and

(iv)        no Qualifying Shareholder shall be entitled to increase his percentage holding in Ordinary Shares to a holding that would, immediately following the Placing and Open Offer, be greater than his Current Percentage Holding.

Save to the extent stated above, no assurance can be given that applications by Qualifying Shareholders under the Excess Application Facility will be met in full, in part or at all.

(c)        New Ordinary Shares not taken up under the Open Offer

In the event that valid acceptances are not received in respect of all of the Open Offer Shares under the Open Offer, unallocated Open Offer Shares will be allotted to the Conditional Placee.

Application procedure under the Open Offer

Qualifying Shareholders may apply for any whole number of Open Offer Shares.

In the case of Qualifying Non-CREST Shareholders, the number of Open Offer Shares in respect of his Basic Entitlement is shown in Box 4 on their Application Form or, in the case of Qualifying CREST Shareholders, is equal to the number of Basic Entitlements standing to the credit of their stock account in CREST.

Qualifying Shareholders with holdings of Existing Ordinary Shares in both certificated and uncertificated form will be treated as having separate holdings for the purpose of calculating their Basic Entitlements.

Qualifying CREST Shareholders will receive a credit to their appropriate stock accounts in CREST in respect of their Basic Entitlements and also in respect of their Excess CREST Entitlement as soon as practicable after 8.00 a.m. on 1 August 2016.

Application will be made for the Basic Entitlements and Excess CREST Entitlements to be admitted to CREST. The Basic Entitlements and Excess CREST Entitlements will also be enabled for settlement in CREST as soon as practicable after 8.00 a.m. on 1 August 2016. Applications through the CREST system may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim.

Qualifying CREST Shareholders should note that, although the Basic Entitlements and Excess CREST Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of entitlements under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim raised by Euroclear's Claims Processing Unit. Qualifying Non-CREST Shareholders should note that their Application Forms are not negotiable documents and cannot be traded.

Further information on the Open Offer and the terms and conditions on which it is made, including the procedure for application and payment, are set out in Part II of the Circular and, where relevant, on the Application Form.

Takeover Code

The terms of the Placing and Open Offer give rise to certain considerations under the Takeover Code. Brief details of the Panel, the Takeover Code and the protection they afford are given below.

a)    Rule 9

The Takeover Code is issued and administered by the Panel. The Company is a company to which the Takeover Code applies and, as such, its Shareholders are entitled to the protections afforded by the Takeover Code. The Takeover Code and the Panel operate principally to ensure that the shareholders of a company are treated fairly and are not denied an opportunity to decide on the merits of a takeover. The Takeover Code also provides an orderly framework in which takeovers are conducted.

Under Rule 9, where any person acquires, whether by a series of transactions over a period of time or not, an interest (as defined in the Takeover Code) in shares which (taken together with shares in which he is already interested and in which persons acting in concert with him are interested) carry 30 per cent. or more of the voting rights of a company which is subject to the Takeover Code, that person, and any person acting in concert with him, is normally required by the Panel to make a general offer in cash to all of the remaining shareholders to acquire the remaining shares in that company not held by him and/or his concert party.

Rule 9 further provides that, where any person, together with any persons acting in concert with him, is interested in shares which, in aggregate, carry not less than 30 per cent. but not more than 50 per cent. of a company's voting rights, a general offer will normally be required if any further interest in shares is acquired by any such person, or any person acting in concert with him.

An offer under Rule 9 must be in cash and at the highest price paid by the person required to make the offer, or any persons acting in concert with him, for any interest in shares in the company during the 12 months preceding the date of the announcement of such offer.

Rule 9 of the Takeover Code further provides, amongst other things, that where any person who, together with persons acting in concert with him, holds over 50 per cent. of the voting rights of a company and acquires an interest in shares which carry additional voting rights, then they will not normally be required to make a general offer to the other shareholders to acquire their shares. However, the Panel may deem an obligation to make an offer to have arisen on the acquisition by a single member of a concert party of an interest in shares sufficient to increase his individual holding to 30 per cent. or more of a company's voting rights or, if he already holds more than 30 per cent. but less than 50 per cent. an acquisition which increases his shareholdings in that company.

Under the Takeover Code, a concert party arises where persons acting together pursuant to an agreement or understanding (whether formal or informal), co-operate to obtain or consolidate control, or to frustrate the successful outcome of an offer for a company, subject to the Takeover Code. Control means an interest, or interests, in shares carrying, in aggregate, 30 per cent. or more of the voting rights of a company, irrespective of whether such interest or interests give de facto control. The members of the Concert Party are deemed to be acting in concert for the purposes of the Takeover Code.

b)    Waiver

Under Note 1 of the Notes on the Dispensations from Rule 9, the Panel may waive the requirement for a general offer to be made in accordance with Rule 9 if, amongst other things, the shareholders of a company who are independent of the person who would otherwise be required to make an offer, and any person acting in concert with him, pass an ordinary resolution on a poll at a general meeting or by way of a written resolution approving such a waiver.

Potential voting rights of the Concert Party

Richard Griffiths has confirmed to the Company that he and certain other Shareholders are acting in concert (as defined in the Takeover Code). As at the Latest Practical Date, the Concert Party is interested in 20,636,498 Existing Ordinary Shares representing 28.72 per cent. of the Existing Issued Share Capital.

On completion of the Placing and Open Offer, assuming that the Open Offer is taken up in full by Qualifying Shareholders, the Concert Party's aggregate interest will increase to 42,333,561 Ordinary Shares as a result of the Concert Party's participation in the Placing as Firm Placees and Fermain's proposed participation in the Open Offer, representing approximately 28.64 per cent. of the Enlarged Share Capital. However, in the event that Qualifying Shareholders do not take up any of their Open Offer Entitlements pursuant to the Open Offer, the Concert Party's interest will increase to a maximum of 62,190,547 Ordinary Shares, as a result of the participation of Richard Griffiths in the Conditional Placing representing approximately 42.07 per cent. of the Enlarged Share Capital.

The relevant interests of the members of the Concert Party in the Company as at the Latest Practical Date, and their respective maximum potential controlling positions following completion of the Placing and Open Offer, are illustrated below:

Member of Concert Party		As at the Latest Practical Date				Following Admission (assuming that the Open Offer is taken up in full by Qualifying Shareholders other than members of the Concert Party (except Fermain))				Following Admission (assuming that the Qualifying Shareholders (other than Fermain) do not take up any of their Open Offer Entitlements)
		Number of Ordinary Shares		Percentage of issued share capital		Number of Ordinary Shares		Percentage of issued share capital		Number of Ordinary Shares		Percentage of issued share capital
Richard Griffiths (1)		15,047,415		20.94%		30,956,086		20.94%		50,813,072		34.37%
Sarossa plc		3,837,304		5.34%		7,894,240		5.34%		7,894,240		5.34%
Quoram plc		844,400		1.18%		1,737,130		1.18%		1,737,130		1.18%
Michael Bretherton		462,268		0.64%		950,994		0.64%		950,994		0.64%
James Ede-Golightly		245,111		0.34%		445,111		0.30%		445,111		0.30%
Fermain Capital Ltd		200,000		0.28%		350,000		0.24%		350,000		0.24%
Total		20,636,498		28.72%		42,333,561		28.64%		62,190,547		42.07%

(1)    Comprising the shares held directly by Richard Griffiths (868,806 Existing Ordinary Shares); the interests of Blake Holdings Limited (9,453,758 Existing Ordinary Shares) and Seren Investment Management Limited (3,724,619 Existing Ordinary Shares) which are both majority owned by Richard Griffiths; Oak Trust (Guernsey) Limited (238,949 Existing Ordinary Shares) which is wholly owned by Richard Griffiths; the shares held on trust for his children (600,000 Existing Ordinary Shares) and the shares held by his wife, Mrs Sally Griffiths (161,283 Existing Ordinary Shares).

Whitewash and Waiver

The terms of the Placing and Open Offer give rise to certain considerations under the Takeover Code as a result of the proposed participation of the Concert Party in the Firm Placing, the Conditional Placing and the Open Offer (for Fermain only in respect of the Open Offer). The participation of the Concert Party will result in the Concert Party's shareholding in the Company increasing to between 28.64 and 42.07 per cent. of the Enlarged Share Capital, depending on the extent to which Open Offer Shares are taken up by Qualifying Shareholders pursuant to the Open Offer.

If, following the Capital Raising, the Concert Party will have acquired in aggregate interests in Ordinary Shares carrying 30 per cent. or more of the Enlarged Share Capital then, without a waiver by the Panel of the obligations under Rule 9, the Concert Party would be obliged to make a general offer to Shareholders under Rule 9. 

Accordingly, the Board has sought the approval of the Panel to waive any obligation of the Concert Party (or any of its members) to make a mandatory general offer to Shareholders under Rule 9 if the shareholding of the Concert Party following completion of the Capital Raising is 30 per cent. or more.

Following confirmation in writing from Independent Shareholders (representing more than 50% of the Existing Issued Share Capital held by Independent Shareholders) (Supporting Independent Shareholders) that they would vote in favour of a Whitewash Resolution were such a resolution to be considered at a General Meeting, the Panel has agreed to waive the obligation of the Concert Party, collectively and/or individually, to make a mandatory offer for the Ordinary Shares not already owned by it or persons connected with it as would otherwise arise as a result of the Concert Party's participation in the Firm Placing, the Conditional Placing and the Open Offer.

The Concert Party will not be restricted from making a subsequent offer in the future for the Company, however, any further increase in the Ordinary Shares held by the Concert Party will be subject to the provisions of Rule 9.

For the avoidance of doubt, the Waiver applies only in respect of increases in shareholdings of the Concert Party resulting from the Placing and Open Offer and not in respect of other increases in its holdings.

Confirmations and Acknowledgments from Supporting Independent Shareholders

Each of the Supporting Independent Shareholders has written to the Panel to confirm that:

(a)         it has absolute discretion over the manner in which its holding of Ordinary Shares are voted and that such Ordinary Shares are held free of all liens, pledges, charges and encumbrances;

(b)         save for the fact that it is a shareholder in the Company, there is no connection between it and the Concert Party;

(c)         other than as a shareholder in the Company, it does not have any interest or potential interest, whether commercial, financial or personal, in the outcome of the Placing and Open Offer;

(d)         it is an Independent Shareholder of the Company; and

(e)         in connection with the Placing and Open Offer:

(i)           it consents to the Panel granting a waiver from the obligation for the Concert Party to make a Rule 9 offer to the shareholders of the Company;

(ii)          subject to Independent Shareholders holding more than 50 per cent. of the Ordinary Shares capable of being voted on a Whitewash Resolution to approve the waiver from the obligation for the Concert Party to make a Rule 9 offer giving confirmations in writing, it consents to the Panel dispensing with the requirement that the waiver from such obligation be conditional on  a Whitewash Resolution being approved by Independent Shareholders at a general meeting of the Company; and

(iii)         it would vote in favour of a Whitewash Resolution to waive the obligation for the Concert Party to make a Rule 9 offer were such a resolution put to the Independent Shareholders of the Company at a general meeting.

In giving the confirmations referred to above, each of the Supporting Independent Shareholders acknowledged that:

(a)         if the Panel receives such confirmation from Independent Shareholders holding more than 50 per cent. of the shares capable of being voted on a Whitewash Resolution, the Panel will approve the waiver from the obligation for the Concert Party to make a Rule 9 offer, without the requirement for the waiver to be approved by Independent Shareholders of the Company at a general meeting;

(b)         if no general meeting is held to approve the Whitewash Resolution to waive the obligation for the Concert Party to make the Rule 9 offer:

(i)           there will not be an opportunity for any other person to make any alternative proposal to the Company conditional on such Whitewash Resolution not being approved by Independent Shareholders of the Company;

(ii)          there would not be an opportunity for other Shareholders to make known their views on the Placing and Open Offer; and

(iii)         there would be no requirement for the Company either: (i) to obtain and make known to its shareholders competent independent advice under Rule 3 of the Code on either the Placing and Open Offer and the waiver of the obligation for the Concert Party to make a Rule 9 offer; or (ii) to publish a circular to shareholders of the Company in compliance with Appendix 1 of the Code in connection with this matter.

The Supporting Independent Shareholders also confirmed that it will not sell, transfer, pledge, charge or grant any option or other right over, or create any encumbrance over, or otherwise dispose of any of its Ordinary Shares until at least the conclusion of the General Meeting to approve the issuance of the shares pursuant to the Placing and Open Offer.

Conditionality

The Placing and Open Offer is conditional, inter alia, upon the following:

i. the passing, without amendment, of resolutions numbered 1 and 3 of the                  Resolutions at the General Meeting;

ii. Admission occurring by no later than 8.00 a.m. on 19 August 2016 (or such later  times and/or dates as may be agreed between the Company and Liberum Capital, being no later than 8.00 a.m. on 2 September 2016); and

iii.the Placing and Open Offer Agreement becoming unconditional in all respects (save for the condition relating to Admission) and not having been terminated in accordance with its terms.

If the conditions set out above are not satisfied or waived (where capable of waiver), the Placing and Open Offer will lapse; and

(a)        the Firm Placing Shares will not be issued and all monies received from Firm Placees in respect of the Firm Placing Shares will be returned to them (at the investors' risk and without interest) as soon as possible thereafter;

(b)        the Conditional Placing Shares will not be issued and all monies received from Conditional Placees in respect of the Conditional Placing Shares will be returned to them (at the investors' risk and without interest) as soon as possible thereafter; and

(c)        any Basic Entitlements and Excess CREST Entitlements admitted to CREST will, after that time and date, be disabled and application monies under the Open Offer will be refunded to the applicants, by cheque (at the applicant's risk) in the case of Qualifying Non-CREST Shareholders and by way of a CREST payment in the case of Qualifying CREST Shareholders, without interest, as soon as practicable thereafter.

Application for Admission

Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. Admission of the New Ordinary Shares is expected to take place, and dealings on AIM are expected to commence, at 8.00 a.m. on 19 August 2016 (or such later times and/or dates as may be agreed between the Company and Liberum Capital). No temporary document of title will be issued.

The New Ordinary Shares will, following Admission, rank pari passu in all respects with the Existing Ordinary Shares in issue at the date of this announcement and will carry the right to receive all dividends and distributions declared, made or paid on or in respect of the Ordinary Shares after Admission.

Important notice

Qualifying Shareholders should note that the Open Offer is not a rights issue. Qualifying Shareholders should be aware that in the Open Offer, unlike with a rights issue, any Open Offer Shares not applied for by Qualifying Shareholders under their Basic Entitlements will not be sold in the market on behalf of, or placed for the benefit of Qualifying Shareholders who do not apply under the Open Offer, but may be allotted to Qualifying Shareholders to meet any valid applications under the Excess Application Facility, with the balance being placed with the Conditional Placee and that the net proceeds will be retained for the benefit of the Company.

The Placing and the Open Offer are separate and distinct transactions involving the issue of New Ordinary Shares.

Qualifying Shareholders are being invited to participate in the Open Offer and (subject to certain exceptions) will have received an Application Form with the Circular. However Qualifying Shareholders are not entitled to participate in the Firm Placing or the Conditional Placing unless expressly invited by the Company and Liberum Capital to do so.

In issuing the Circular and structuring the Placing and Open Offer in this manner, the Company is relying on the exemption from issuing a prospectus in section 85(5) and paragraph 9 of Schedule 11A of FSMA and on paragraphs 43 and 60 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended).

Any Qualifying Shareholder who has sold or transferred all or part of his registered holding(s) of Existing Ordinary Shares prior to the date on which the shares are marked 'ex-entitlement' is advised to consult his stockbroker, bank or other agent through or to whom the sale or transfer was effected as soon as possible since the invitation to apply for Open Offer Shares under the Open Offer may be a benefit which may be claimed from him by the purchasers under the rules of the London Stock Exchange.

Effect of the Placing and Open Offer

Upon completion of the Placing and Open Offer, the New Ordinary Shares will represent approximately 51.4 per cent. of the Enlarged Share Capital.

The Placing and Open Offer Agreement

Pursuant to the terms of the Placing and Open Offer Agreement, Liberum Capital, as agent for the Company, has agreed to use its reasonable endeavours to procure subscribers for the Firm Placing Shares and the Conditional Placing Shares at the Issue Price. The Placing and Open Offer Agreement is conditional upon, among other things, the conditions set out above (please see the section headed Conditionality in paragraph 5.10 of Part I of the Circular) and none of the warranties or undertakings given to Liberum Capital prior to Admission of the New Ordinary Shares being or becoming untrue, inaccurate or misleading.

The Placing and Open Offer Agreement contain customary warranties given by the Company in favour of Liberum Capital in relation to, inter alia, the accuracy of the information in the Circular and other matters relating to the Group and its business. In addition, the Company has agreed to indemnify Liberum Capital (and its affiliates) in relation to certain liabilities which they may incur in respect of the Placing and Open Offer.

Liberum Capital has the right to terminate the Placing and Open Offer Agreement in certain circumstances prior to Admission and in particular in the event of a material breach of the warranties, a material adverse change or if the Placing and Open Offer Agreement does not become unconditional.

General Meeting

The General Meeting of the Company, notice of which is set out at the end of the Circular, is to be held at 10.00 a.m. on 16 August 2016 at the offices of Michelmores LLP, 12^th Floor, 6 New Street Square, London EC4A 3BF. The General Meeting is being held for the purpose of considering and, if thought fit, passing the Resolutions, inter alia, to provide the authority necessary to proceed with the Placing and Open Offer.

A summary and explanation of the Resolutions is set out below. Please note that this is not the full text of the Resolutions and you should read this section in conjunction with the Resolutions contained in the Notice of General Meeting at the end of the Circular.

Resolution 1: Authority to allot shares

This ordinary resolution will grant the Board authority to allot the New Ordinary Shares for the purposes of the Placing and Open Offer. The authority given by this resolution will expire 90 days after it has been passed. This authority will be in addition to that given to the Board pursuant to Resolution 2.

Resolution 2: Authority to allot shares

In substitution for the current authorisation, this ordinary resolution grants authority to the Board to allot Ordinary Shares (or to grant rights to subscribe for or convert any securities into Ordinary Shares) for:

(a)        up to a maximum nominal amount of £492,742.93 which represents approximately one-third of the Enlarged Share Capital; and

(b)        in the case of a rights issue up to a maximum aggregate nominal value of £985,485.87 which represents approximately two-thirds of the Enlarged Share Capital.

The authority given by this resolution will expire at the conclusion of the next annual general meeting of the Company. This authority will be in addition to that given to the Board pursuant to Resolution 1.

Resolution 3: Disapplication of pre-emption rights

This special resolution, conditional on the passing of Resolution 1, disapplies the statutory pre-emption rights in respect of the allotment of the New Ordinary Shares to be allotted pursuant to Resolution 1 in connection with the Placing and Open Offer. The authority given by this resolution will expire 90 days after it has been passed. This authority will be in addition to that given to the Board pursuant to Resolution 4.

Resolution 4: Disapplication of pre-emption rights

In substitution for the current authorisation, this special resolution, conditional on the passing of Resolution 2, grants authority to the Board to allot equity securities pursuant to Resolution 2 otherwise than in accordance with statutory pre-emption rights up to an aggregate nominal value of £147,822.88 which represents approximately 10 per cent. of the Enlarged Share Capital. The authority given by this resolution will expire at the conclusion of the next annual general meeting of the Company. This authority will be in addition to that given to the Board pursuant to Resolution 3.

Action to be taken in relation to the General Meeting

You will find enclosed a Form of Proxy for use at the General Meeting. Whether or not you intend to be present at the General Meeting, you are requested to complete the Form of Proxy in accordance with the instructions printed on it and to return it as soon as possible and in any case so as to be received by the Company's registrars at Neville Registrars Limited, Neville House, 18 Laurel Lane Halesowen, West Midlands B63 3DA no later than 10.00 a.m. on 12 August 2016. If you hold shares in CREST you may appoint a proxy by completing and transmitting a CREST Proxy Instruction to Neville Registrars (CREST Participant ID 7RA11) so that it is received by no later than 10.00 a.m. on 12 August 2016. The return of the Form of Proxy or transmission of a CREST Proxy Instruction will not prevent you from attending the meeting and voting in person if you wish.

Action to be taken in respect of the Open Offer

Qualifying Non-CREST Shareholders (i.e. holders of Existing Ordinary Shares who hold their Existing Ordinary Shares in certificated form)

If you are a Qualifying Non-CREST Shareholder you will receive an Application Form which gives details of your Basic Entitlement under the Open Offer (as shown in Box 4 of the Application Form). If you wish to apply for Open Offer Shares under the Open Offer, you should complete the Application Form in accordance with the procedure for application set out in paragraph 4.1 of Part II of the Circular and on the Application Form itself.

Qualifying Non-CREST Shareholders who wish to subscribe for more than their Basic Entitlements should complete Boxes 6, 7, 8 and 9 on the Application Form. Completed Application Forms, accompanied by full payment in accordance with the instructions in paragraph 4.1 of Part II of the Circular, should be posted using the accompanying reply-paid envelope (if posted from the UK only) or returned by post or by hand (during normal business hours only) to Neville Registrars, Neville House, 18 Laurel Lane Halesowen, West Midlands B63 3DA, in either case, as soon as possible and in any event so as to be received by no later than 11.00 a.m. on 15 August 2016. If you do not wish to apply for any Open Offer Shares under the Open Offer, you should not complete or return the Application Form.

Qualifying CREST Shareholders (i.e. holders of Existing Ordinary Shares who hold their Existing Ordinary Shares in uncertificated form)

If you are a Qualifying CREST Shareholder you will not be sent an Application Form. You will receive a credit to your appropriate stock account in CREST in respect of your Basic Entitlement under the Open Offer and also an Excess CREST Entitlement for use in connection with the Excess Application Facility. You should refer to the procedure for application set out in paragraph 4.2 of Part II of the Circular. The relevant CREST instructions must have settled in accordance with the instructions in paragraph 4.2 of Part II of the Circular by no later than 11.00 a.m. on 15 August 2016.

Qualifying CREST Shareholders who are CREST sponsored members should refer to their CREST sponsors regarding the action to be taken in connection with the Circular and the Open Offer.

If you are in any doubt as to the action you should take, you should immediately seek your own personal financial advice from an appropriately qualified independent professional adviser.

Overseas Shareholders

The attention of Qualifying Shareholders who have registered addresses outside the United Kingdom, or who are citizens or residents of countries other than the United Kingdom, or who are holding Ordinary Shares for the benefit of such persons (including, without limitation, subject to certain exceptions, custodians, nominees, trustees and agents), or who have a contractual or other legal obligation to forward the Circular, the Form of Proxy or (if applicable) an Application Form to such persons, is drawn to the information which appears in paragraph 6 of Part II (Terms and Conditions of the Open Offer) of the Circular.

In particular, Qualifying Shareholders who have registered addresses in or who are resident in, or who are citizens of, countries other than the UK (including, without limitation, the United States or any other Restricted Jurisdiction) should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to take up their entitlements to the Open Offer.

Taxation

Your attention is drawn to the taxation section contained in Part IV of the Circular.

This information is intended only as a general guide to the current UK tax position. Shareholders who are in any doubt as to their tax position, or who are subject to tax in a jurisdiction other than the UK should consult an appropriate professional adviser immediately.

Intentions of the Directors in relation to the Placing and Open Offer

The interests (all of which are beneficial unless stated otherwise) of the Directors and their immediate families and of persons connected with them (within the meaning of Section 252 of the Act) in the Existing Issued Share Capital and the existence of which is known to any Director as at the Latest Practical Date and as they are expected to be upon Admission are set out below.

Other than in respect of Fermain (which intends to apply for up to 150,000 New Ordinary Shares in the Open Offer) the Directors have irrevocably undertaken not to take up their Basic Entitlements under the Open Offer or to apply for Excess Shares under the Excess Application Facility.

Director	Current Shareholding			New Ordinary Shares by Subscription or in the Open Offer		Enlarged Share Capital
James Ede-Golightly (1)	445,111	0.62%		350,000		795,111	0.54%
Paul Schmidt	82,880	0.12%		751,870		834,750	0.56%
Christopher Richards	76,324	0.11%		700,000		776,324	0.53%
Richard Webb	10,000	0.01%		751,870		761,870	0.52%
William Lewis	-	0.00%		187,960		187,960	0.13%
Michael Higgins	-	0.00%		60,000		60,000	0.04%
Total	614,315	0.85%		2,801,700		3,416,015	2.31%

(1)    Includes 200,000 Ordinary Shares at the Latest Practical Date held by Fermain which is 23% owned by James Ede-Golightly. Fermain intends to apply for up to 150,000 New Ordinary Shares in the Open Offer and on Admission Fermain will hold 350,000 Ordinary Shares

Related party transactions

Richard Griffiths and entities or persons controlled by Richard Griffiths or associated with him (being Blake Holdings Limited, Seren Investment Management Limited, Richard Griffiths family trust, Oak Trust (Guernsey) Limited and Mrs Sally Griffiths) by virtue of their aggregate holding of more than 10 per cent. of the Existing Issued Share Capital, are considered related parties of the Company and their participation in the Firm Placing and Conditional Placing are considered 'related party transactions' under the AIM Rules for Companies. The Directors consider, having consulted with the Company's Nominated Adviser, Liberum Capital, that the terms of the Firm Placing and Conditional Placing to Richard Griffiths and entities or persons controlled by Richard Griffiths or associated with him are fair and reasonable in so far as its Shareholders are concerned.

Henderson Global Investors Volantis, by virtue of its holding of funds' interests in more than 10 per cent. of the Existing Issued Share Capital, is considered a related party of the Company and its participation in the Firm Placing is considered a 'related party transaction' under the AIM Rules for Companies. The Directors consider, having consulted with the Company's Nominated Adviser, Liberum Capital, that the terms of the Firm Placing to funds managed by Henderson Global Investors Volantis are fair and reasonable in so far as its Shareholders are concerned.

Boulder River Capital Corporation and its associates, by virtue of their holding of more than 10 per cent. in aggregate of the Existing Issued Share Capital, are together considered a related party of the Company and Boulder River Capital Corporation's participation in the Subscription is considered a 'related party transaction' under the AIM Rules for Companies. The Directors consider, having consulted with the Company's Nominated Adviser, Liberum Capital, that the terms of the Subscription by Boulder River Capital Corporation are fair and reasonable in so far as its Shareholders are concerned.

Recommendation and voting intentions

The Directors consider that the Placing and Open Offer are in the best interests of the Company and Shareholders as a whole.

The Independent Directors (holding in aggregate 169,204 Ordinary Shares, representing approximately 0.24 per cent. of the Existing Ordinary Shares) recommend that Shareholders vote in favour of Resolutions 1 and 3 at the General Meeting.

The Directors (holding in aggregate 614,315 Ordinary Shares, representing approximately 0.85 per cent. of the Existing Ordinary Shares) recommend that Shareholders vote in favour of Resolutions 2 and 4 at the General Meeting.

The Company is in receipt of undertakings from Directors and certain major Shareholders representing not less than 73.66 per cent. of the Existing Issued Share Capital to vote in favour of all the Resolutions.

Expected Timetable of Principal Events

Record Date for entitlement to participate in the Open Offer	5.00 p.m. on 26 July 2016
Announcement of the Firm Placing, the Conditional Placing and the Open Offer and despatch of the Circular, the Form of Proxy and, to certain Qualifying Non-CREST Shareholders, the Application Form	29 July 2016
Expected Ex-Entitlement Date for the Open Offer	8.00 a.m. on 29 July 2016
Basic Entitlements and Excess CREST Open Offer Entitlements credited to CREST stock accounts of Qualifying CREST Shareholders	01 August 2016
Recommended latest time and date for requesting withdrawal of Basic Entitlements and Excess CREST Open Offer Entitlements from CREST	4.30 p.m. on 09 August 2016
Latest time for depositing Basic Entitlements and Excess CREST Open Offer Entitlements into CREST	3.00 p.m. on 10 August 2016
Latest time and date for splitting Application Forms (to satisfy bona fide market claims only)	3.00 p.m. on 11 August 2016
Latest time and date for receipt of Forms of Proxy for the General Meeting	10.00 a.m. on 12 August 2016
Latest time and date for receipt of completed Application Forms and payment in full under the Open Offer or settlement of relevant CREST instruction (as appropriate)	11.00 a.m. on 15 August 2016
General Meeting	10.00 a.m. on 16 August 2016
Result of Open Offer announced through RNS	16 August 2016
Admission of the New Ordinary Shares to trading on AIM	8.00 a.m. on 19 August 2016
New Ordinary Shares in uncertificated form expected to be credited to accounts in CREST (uncertificated holders only)	as soon as practicable after 8.00 a.m. on 19 August 2016
Expected date of despatch of definitive share certificates for the New Ordinary Shares in certificated form (certificated holders only)	by 28 August 2016

The times and dates set out in the table above and mentioned throughout this announcement are indicative only and may be adjusted by the Company (in consultation with Liberum).

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

For further information please contact:

Plant Health Care plc
Paul Schmidt, CEO
Tel: [phone] x100
[e-mail] 

Liberum Capital - Nomad and Broker
Clayton Bush / Chris Clarke
Tel: [phone]

LHA
Ed McGregor/ Jody Burfening
Tel: [phone]

Company website: www.planthealthcare.com

Liberum Capital Limited, which is regulated by the Financial Services Authority, is acting as nominated adviser and broker to the Company in connection with the matters described in this announcement. Persons receiving this announcement should note that Liberum Capital Limited will not be responsible to anyone other than the Company for providing the protections afforded to clients of Liberum Capital Limited or for advising any other person on the arrangements described in this announcement. Liberum Capital Limited has not authorised the contents of, or any part of, this announcement and no liability whatsoever is accepted Liberum Capital Limited for the accuracy of any information or opinions contained in this announcement or for the omission of any information.

The New Ordinary Shares will not be registered under the United States Securities Act of 1933 (as amended) or under the securities laws of any state of the United States or qualify for distribution under any of the relevant securities laws of Canada, Australia or Japan, nor has any prospectus in relation to the New Ordinary Shares been lodged with or registered by the Australian Securities and Investments Commission. Accordingly, subject to certain exceptions, the New Ordinary Shares may not be, directly or indirectly, offered, sold, taken up, delivered or transferred in or into the United States, Canada, Australia or Japan. This announcement is directed and issued only to the shareholders of Plant Health Care plc and their representatives and shall not be distributed to or used by any other person.

Overseas shareholders and any person (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward this announcement to a jurisdiction outside the United Kingdom should seek appropriate advice before taking any action.

 

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