Statement by Vigmed’s bid committee in relation to the extended acceptance period to the public offer by Greiner Bio-One

The independent Vigmed Bid Committee continues to recommend the shareholders to accept the Greiner Bio-One Offer.  

On 27 February 2017, Greiner Bio-One GmbH (“GBO”) announced a public cash offer to the shareholders of Vigmed Holding AB (publ) (“Vigmed”) at the price of SEK 1.00 in cash per share (the “Offer”).

The shares tendered in the Offer at the end of the initial acceptance period on 27 March 2017 amounted to a total of 42,709,627 shares in Vigmed, corresponding to approximately 65 percent of total outstanding shares and votes in Vigmed. In view of the completion of the Offer being conditional upon the Offer being accepted to such extent that GBO will become the owner of more than 90 percent of total shares in Vigmed [1] , GBO announced on March 30 that they will extend the acceptance period to 20 April 2017 at 5 pm CET. The other terms of the Offer remain unchanged.

On 21 March, 2017 the independent bid committee appointed by the Vigmed board (the “Bid Committee”) [2] , took part of a press release announced by Beijing Topraise Medical Technology and its partner (“BTMT”), in which BTMT announced its intent to offer Vigmed a convertible loan of approximately SEK 25 million, without further details of the terms for the loan. In order to evaluate this financing proposal, the Bid Committee has been in contact with representatives of BTMT and their advisers.

Following these contacts, the Bid Committee has been informed that the convertible loan proposed to be offered amounts to SEK 17,487,589, with a proposed conversion rate of SEK 1.00 per share, a proposed yearly interest rate of 2.00 percent and a proposed term of three years (the “Convertible Loan”). In addition to the Convertible Loan, BTMT proposes to subscribe for 27,512,411 new shares in Vigmed through a directed new issue at a subscription price of SEK 1.00 per share (the “Subscription Commitment”) implying a capital injection of SEK 27,512,411.

The Convertible Loan and the Subscription Commitment are conditional upon a due diligence review of Vigmed, the non-completion of the Offer, and the approval of the shareholders meeting of the issue of 27,512,411 new shares as well as the Convertible Loan. BTMT has expressed its intent to provide Vigmed with a SEK 5,000,000 bridge loan until the new issue and the Convertible Loan is executed. The general idea is that the bridge loan would be offset as part of the issue payment in the directed share issue. No other details on the other terms of the bridge loan have been discussed.  

[1] GBO has reserved the right to fully or partially waive this and other conditions to completion of the Offer. For further information regarding the Offer, please refer to GBOs Offer announcement.

[2] The Bid Committee consists of Board Sten Dahlborg (Chairman), Thomas Baier and Axel Sjöblad, which have no conflict of interest in relation to the GBO or Offer.

      
The Bid Committee notes that the proposal, assuming that acceptable terms on all elements of the BTMT financing proposals could be agreed, would cover the immediate liquidity need and provide an opportunity to continue operations, but also notes that BTMT in its Subscription Commitment makes the same assessment of the value of Vigmed that GBO has made in the Offer, and that the proposed funding is insufficient to cover Vigmed’s long-term capital needs and that it does not resolve the current operational challenges of Vigmed in the very competitive syringe market. The Bid Committee further notes there is a risk that the Convertible Loan may have to be refinanced in the event it is not converted by BTMT and that BTMT's proposal does not provide any security for the implementation of the financing proposal. Based on this, the Bid Committee does not find sufficient reasons to change its previously communicated recommendation to the Offer.

As written in the year-end report published 27 February 2017 and the previous statement by the Bid Committee, Vigmed has not succeeded to win contracts to the extent required in order to achieve sufficiently profitable sales to end customers. Given certain assumptions, the development has not been in line with the ambitions of the Board set in 2015 – to reach SEK 150 million in sales and reach breakeven at operating profit level during 2018. Considering the limited market acceptance and sales development of Vigmed’s products there is a clear risk that the size of Vigmed’s organisation and product portfolio relative to major safety syringe suppliers might be too small to achieve a) a reasonable market share and b) a positive cash flow.

For the period 1 January to 31 December 2016, Vigmed’s sales amounted to SEK 3.6 million and EBIT amounted to SEK -38.0 million, while cash flow from operating activities amounted to SEK -38.2 million. The current loss rate of Vigmed, relative to the company’s liquid assets, will result in Vigmed requiring an immediate capital injection, in the event that the Offer is not accepted. In the event that Vigmed does not receive additional capital, there is a clear risk that Vigmed will not be able to meet its payment obligations in the near future .  

Even if a potential capital contribution, in the form of a new issue or a convertible loan, were to be successfully completed, the Bid Committee believes that there is a considerable risk that further, significant, capital injections will be required in order to realise Vigmed’s strategic plans and potential and thereby securing the company value for the benefit of its shareholders.

Subsequent to the strategic review the Board initiated in the fourth quarter of 2016 for the purpose of  ensuring the long-term financing of the Company, including the review of conditions for the continuation of the current equity financing model through existing and new shareholders, the licensing of different Vigmed IP rights, co-operations and joint ventures, the sale of patents and/or other company assets as well as lack of competitive offers on the business, it is still the Bid Committee’s opinion that GBO, with its global organisation, complementary product portfolio and financial and operational strength meets all relevant requirements and is well positioned to realise Vigmed’s business potential as well as securing jobs within the company.

As previously communicated by the Bid Committee, the Offer of SEK 1.00 in cash per share should be viewed relative to the effects that the costs, the dilution and other conditions for one or multiple new issues may have for the shareholders of Vigmed.

Accordingly, the Bid Committee maintains, unanimously, its recommendation that the shareholders of Vigmed accept the Offer from GBO.

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This statement shall in all respects be governed by and construed in accordance with substantive Swedish law. Any dispute arising from this statement shall be exclusively settled by Swedish courts, and the Stockholm District Court (Sw. Stockholms tingsrätt) shall be the court of first instance.
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Helsingborg, 10 April 2017
Vigmed Holding AB (publ)
The Bid Committee

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This information is such that Vigmed Holding AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Takeover Rules. The information was submitted for publication, through the agency of the contact person set out below, at 08.00 am CET on 10 April 2017.

For further information, contact:
Sten Dahlborg, Chairman of the Board of Directors and the Bid Committee,
+46 708-369 419, budkommitte@vigmed.com

Vigmed is a Swedish medical technology company whose mission is to eliminate needlestick injuries and the associated risk of cross infections with blood-borne infectious diseases by offering the market unique needle-protected products. Vigmed is headquartered in Helsingborg, Sweden. Vigmed’s share is traded on NASDAQ OMX First North in Stockholm (ticker VIG) and has approximately  5 500 shareholders. Remium Nordic AB is the Company’s Certified Advisor.  Additional information about the company can be found on Vigmed’s website: www.vigmed.com/investor

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Vigmed is a Swedish medical technology company whose mission is to eliminate needlestick injuries by offering the market unique needle-protected products. Vigmed is headquartered in Helsingborg, Sweden. Vigmed’s share is traded on NASDAQ OMX First North in Stockholm (ticker VIG) and the company has approximately 5 600 shareholders. Remium Nordic AB is the Company’s Certified Advisor. Additional information can be found on Vigmed’s home page: www.vigmed.com

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