Background

CombiGene AB (publ) ("CombiGene") today announces a public offer to the holders of shares ("Shares") and warrants of series TO1 with ISIN code SE0011205343 ("Warrants") in Panion Animal Health AB (publ) ("Panion" or the "Company") to tender all their Shares and Warrants to CombiGene (the "Offer"). The Shares and the Warrants are listed on Spotlight Stock Market ("Spotlight").

•  CombiGene offers 0.5426 shares in CombiGene for each Share (the "Share Purchase Price") and 0.0559 shares in CombiGene for each Warrant (the "Warrant Purchase Price").[1] This corresponds to a value of approximately SEK 0.67 per Share and SEK 0.07 per Warrant and a total value of the Offer of approximately SEK 16.7 million, based on the volume-weighted average price per CombiGene share on Nasdaq First North during a period of 20 consecutive trading days ending on 17 April 2019, which was the last trading day prior to the announcement of the Offer.[2]
•  The Offer represents a premium of:

-       For the Shares: 25.2 per cent compared to the closing price of approximately SEK 0.54 for the Shares on Spotlight on 17 April 2019, which was the last trading day prior to the announcement of the Offer; and 25.2 per cent compared to the volume-weighted average price of approximately SEK 0.54 per Share on Spotlight during a period of 20 consecutive trading days ending on 17 April 2019.

•  Shareholders holding in aggregate approximately 18 per cent of the total number of Shares and voting rights in Panion and approximately 0.2 per cent of the total number of Warrants, have undertaken to accept the Offer.
•  The Offer is conditional upon, inter alia, that CombiGene receives acceptances representing more than 90 per cent of the voting rights of all outstanding Shares (on a fully diluted basis).
•  The acceptance period for the Offer is expected to commence on or around 23 May 2019 and expire on or around 20 June 2019. Settlement is expected to take place on or around 8 July 2019.
•  The Offer is governed by the Takeover Rules for certain trading platforms issued by the Swedish Corporate Governance Board (the "Takeover Rules") including the rules contained in section IV of the Takeover Rules.

Allotted shares in directed new shares issue

Panion's Board of Directors has, with authorization from the annual general meeting, resolved on a directed new shares issue of 456,916 shares, which have been allotted two investigators due to agreements between them and Panion. In the event these shares are registered with the Swedish Companies Registration Office prior to the end of the acceptance period, the Offer will include such shares. The total amount of CombiGene shares that may be issued within the Offer may by consequence thereof increase with a maximum of 247,923 CombiGene shares to a total maximum amount of 13,740,385 CombiGene shares, corresponding to a total aggregated dilution of approximately 21.0 percent for CombiGene's current shareholders.

Other financial instruments in CombiGene

There are, in addition to the Warrants, three outstanding series of warrants and two outstanding series of convertible instruments in Panion. Since they are all owned and held by Panion the Offer does not include the mentioned financial instruments.

CombiGene's shareholding in Panion

Neither CombiGene nor any closely related companies or closely related parties own any Shares or any financial instruments in Panion that give exposure equivalent to holding of the Shares at the time of the announcement of the Offer. Nor has CombiGene acquired or agreed to acquire any Shares or any financial instruments that give a financial exposure to Shares during the six months preceding the announcement of the Offer. (For further information about undertakings by larger holders of Shares and Warrants to accept the Offer, please see "Undertakings to accept the Offer" below.) CombiGene may acquire, or enter into arrangements to acquire, Shares or Warrants outside the Offer. Any purchases made or arranged will be in accordance with Swedish law and the Takeover Rules and will be disclosed in accordance with applicable rules.

Announcement of opinion from the Board of Directors in Panion and fairness opinion 

According to Rule II.19 of the Takeover Rules, the Board of Directors in Panion[3] is obliged, to announce their opinion regarding the Offer no later than two weeks prior to the expiry of the acceptance period. The Board of Directors in Panion is also, according to Rule IV.3 of the Takeover Rules, obliged to obtain and publish a valuation opinion regarding the Shares and Warrants from an independent expert no later than two weeks prior to the expiry of the acceptance period. As the consideration offered is in CombiGene shares, the valuation opinion is to include a valuation of the consideration offered. 

Undertakings to accept the Offer

Undertakings to accept the Offer have been made from the shareholders in Panion presented in the table below.

Shareholders Shares Share of Warrants Share of
capital and Warrants
votes
Lars Thunberg[4]  2,500,000 10.2 % 0 0 %
Patrik 935,000310,000 3.8 %1.3 % 00 0 %0 %
Kazimiersky David
Woldbye
Mikael Jacobson 275,000 1.1 % 0 0 %
Marcus G. Skoog 220,000 0.9 % 10,000 0.2 %
Merab Kokaia 200,000 0.8 % 0 0 %
Total 4,440,000 18.2 % 10,000 0.2 %

The undertakings are conditional upon:

-            CombiGene complying with the provisions of the Takeover Rules and any applicable decisions of the Swedish Securities Council (Sw. Aktiemarknadsnämnden);

-            CombiGene not terminating or withdrawing the Offer; and

-            that, prior to the Offer being declared unconditional, no third party announces a competing public cash offer for all Shares and Warrants corresponding to a per Share and Warrant value in SEK which exceeds the then prevailing per Share and Warrant value of the Offer with at least twenty (20) per cent ("Competing Offer"). However, CombiGene has a right to match the Competing Offer within three business days of such Competing Offer being announced. "The then prevailing per Share and Warrant value of the Offer" shall be calculated as the value of 0.5426 shares of CombiGene (per Share) and 0.0419 shares in CombiGene (per Warrant), based on the volume weighted average price of such shares during a period of five consecutive trading days ending on the last trading day prior to the Competing Offer being announced.

In total, shareholders holding in aggregate approximately 18 per cent of the total number of Shares and voting rights in Panion and approximately 0.2 per cent of the total number of Warrants, have undertaken to accept the Offer.

Conditions to completion of the Offer

Completion of the Offer is conditional on:

(a) the Offer being accepted to such an extent that CombiGene becomes the owner of more than 90 per cent of all outstanding Shares (on a fully diluted basis);

(b) the annual general meeting of CombiGene having given the board mandate to resolve upon a non-cash consideration shares issue in CombiGene and that the annual general meeting also resolves upon the required amendment of the articles of association (the "Required Resolutions"). Arne Ferstad, the owner of approximately 1.94 per cent of the shares and votes of CombiGene, Peter Nilsson, the owner of approximately 1.32 per cent of the shares and votes of CombiGene, and Jan Nilsson, the owner of approximately 0.28 per cent of the shares and votes of CombiGene, intend to vote in favour of the Required Resolutions at the annual general meeting;  

(c)  Panion not having decided upon any securities issue, whether in accordance with the current proposal to the Annual General Meeting 2019 in Panion or otherwise;

(d) there being no circumstances, which CombiGene did not have knowledge of at the time of the announcement of the Offer, having occurred which would have a material adverse effect or could reasonably be expected to have a material adverse effect on Panion's sales, results, liquidity, solidity, equity or assets;

(e) with respect to the Offer and the acquisition, the receipt of all necessary regulatory, governmental or similar clearances, approvals and decisions, in each case, on terms which, in CombiGene's opinion, are acceptable;

(f)  neither the Offer nor the acquisition being rendered wholly or partially impossible or significantly impeded as a result of legislation or other regulation, any decision of court or public authority, or any similar circumstance, which is actual or can reasonably be anticipated, and which CombiGene could not reasonably have foreseen at the time of the announcement of the Offer;

(g) Panion not taking any action that is likely to impair the prerequisites for making or completing the Offer;

(h) no information made public by Panion or disclosed by Panion to CombiGene being materially inaccurate, incomplete or misleading, and Panion having made public all information which should have been made public by it; and

(i)  no other party announcing an offer to acquire Shares or Warrants on terms more favorable to the shareholders in Panion than the Offer. 

CombiGene has reserved the right to withdraw the Offer in the event it becomes clear that either of the above conditions is not satisfied or cannot be satisfied. With regard to conditions (b) - (i), however, such withdrawal will only be made if the non-satisfaction is of material importance to CombiGene's acquisition of Shares and Warrants.

CombiGene has reserved the right to waive, in whole or in part, one or more of the conditions above, including with respect to condition (a) above, to complete the Offer at a lower level of acceptance.

Directors of Panion submitting or participating in the Offer etc.

According to the Takeover Rules an individual who holds the position of board member in both the offeror and the offeree company is considered to participate in the offer. The Chairman of Panion's Board of Directors, Lars Thunberg, is a member in CombiGene's Board of Directors.

As a result of the above and the fact that Lars Thunberg has undertaken to accept the Offer, Lars Thunberg is disqualified from the Board of Directors of Panion in dealing with issues related to the Offer due to conflict of interest.

Another consequence of the above is that the Offer is governed by the rules in Chapter IV of the Takeover Rules, according to which Panion is obliged to obtain and publish a valuation opinion regarding the Shares and Warrants from an independent expert no later than two weeks prior to the expiry of the acceptance period. As the consideration offered consists of CombiGene shares, the valuation opinion is to include a valuation of the consideration offered. Furthermore, the acceptance period must be no less than four weeks.  

Important information regarding NID and LEI

As of 3 January 2018, all legal entities will need a Legal Entity Identifier ("LEI") code to participate in a financial market transaction within the EU according to Directive 2011/61/EU (MiFID II) of the European Parliament and of the Council. A LEI number must be obtained from an authorised LEI issuer which can take some time. Shareholders or Warrant holders who are legal entities are requested to obtain a LEI number well in advance in order to use this in the application form. Natural persons will need a NID number (National ID Number). For a natural person who only have Swedish citizenship, the NID number is "SE" followed by the so-called "personnummer". For more information, please visit www.fi.se.    

Further information about the Offer

For further information about the Offer, please see CombiGene's press release dated 18 April 2019 and CombiGene's Offer document expected to be announced on 22 May 2019. These documents are, or will be, available on Panion's website (www.panion-animalhealth.com) and www.combigene.com.

Advisers

Panion has retained Advokatfirman Lindahl as legal advisers in connection with the Offer.

For further information, please contact:

Anja E Holm (CEO)                                                                                      

Phone: +45 22 94 66 00                                                                                                                                               

E-mail: anja.holm@panion-animalhealth.com     

Panion discloses the information provided herein pursuant to the Takeover Rules and the EU:s Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, on 18 April 2019 at 08.30 a.m. CET.

Brief description of Panion

Panion is a public limited liability company incorporated under the laws of Sweden, with corporate registration number 559018-4171.

Panion's focus is on continuing to develop the method developed by CombiGene into an effective and safe therapy for dogs with epilepsy. The product in development is based on scientific discoveries made at Lund University and the University of Copenhagen. In addition, Panion's aim is to in-license and develop other similar assets for the veterinary market.

Panion is based in Hässleholm, Sweden. The Panion Share and Warrant has been listed on Spotlight since 5 July 2017.

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[1] If Panion pays dividends or makes any other distributions to shareholders, for which the record date occurs prior to the settlement of the Offer, the Share and the Warrant Purchase Price may be reduced accordingly.

[2] Based on 24,399,487 Shares and 4,531,312 Warrants which is the total number of issued shares and warrants of series TO1 in Panion. Panion has issued 456,916 shares in a directed new shares issue. These shares have not been registered with the Swedish Companies Registration Office. See "Allotted shares in directed new shares issue". Panion does not hold any own shares in treasury.

[3] The chairman of the Board of Directors in Panion, Lars Thunberg, also holds the position of board member in CombiGene. He has also undertaken to accept the Offer. As a result thereof, Lars Thunberg, is disqualified from the Board of Directors of Panion in dealing with issues related to the Offer. 

[4] Board member in CombiGene and Chairman of the Board of Directors in Panion.