Special Dividend and Share consolidation
Vectura Group plc
Vectura confirms final resolution of US patent litigation with GSK and proposes Special Dividend and Share Consolidation
Chippenham, UK - 21 April 2021: Vectura Group plc (LSE: VEC) ("Vectura", "the Group", "the Company"), an industry-leading specialist inhalation CDMO, today confirms that GlaxoSmithKline (GSK) has not petitioned the Supreme Court in relation to the US patent litigation concerning the Ellipta® products. This was the final route of appeal available to GSK in this case, and the litigation is now considered to be fully resolved.
To date, Vectura has received £127.6 million from GSK in respect of the US patent litigation which comprises payment for the settlement of damages, associated interest and royalties accrued up to Q3 2020, and a payment for Q4 2020 ongoing royalties. The Board has determined that the Group is in a strong position to execute on its growth plans without the need to utilise these proceeds. Subject to shareholder approval, the Company today announces a proposed Special Dividend of 19 pence per existing ordinary share ("Special Dividend") followed by a share consolidation ("Share Consolidation"). The Special Dividend of 19 pence per share totals approximately £113 million in aggregate.
The Special Dividend is expected to become payable to shareholders on 11 June 2021. Shareholders will have the opportunity to invest the proposed Special Dividend to purchase additional ordinary shares in the Company through the Company's dividend reinvestment plan ("DRIP").
The Company will publish a circular ("Shareholder Circular") on 23 April 2021, setting out the details of the proposed Special Dividend and Share Consolidation and convening a general meeting (the "General Meeting") to be held at 11.00 a.m. BST on Thursday 27 May 2021 (or as soon thereafter as the 2021 annual general meeting of the Company to be held on the same day (the ''2021 AGM'') is concluded or adjourned).
Will Downie, Chief Executive Officer of Vectura, said:
"We are pleased to confirm today our intention to pay a special dividend to shareholders, following the conclusion of the US litigation process with GSK. We remain focused on the execution of our CDMO strategy and with a robust balance sheet, even following this material return to shareholders, we are in a strong position to invest for future growth."
Further details regarding the Special Dividend and Share Consolidation
The proposed Special Dividend of approximately £113 million in aggregate represents 19 pence per Existing Ordinary Share. The Board is proposing to pay the Special Dividend to Shareholders on the Register as at 6.00 p.m. on 28 May 2021.
Subject to the passing of the relevant Resolutions at the General Meeting, the Special Dividend is expected to become payable to Shareholders on 11 June 2021.
The effect of the Share Consolidation will be to reduce the number of Ordinary Shares in issue by approximately the same percentage as the total amount of the Special Dividend bears in relation to the market capitalisation of the Company before the Share Consolidation is carried out.
The Share Consolidation is therefore intended to maintain comparability, as far as possible, of the Company's share price before and after payment of the Special Dividend.
The Share Consolidation will replace every 6 Existing Ordinary Shares with 5 New Ordinary Shares. The nominal value of the Company's ordinary shares will change from £0.000271 per share (each an ''Existing Ordinary Share'') to £0.0003252 per share (each a ''New Ordinary Share'').
Apart from having a different nominal value, each New Ordinary Share will carry the same rights as set out in the Company's articles of association that currently attach to the Existing Ordinary Shares.
As all Existing Ordinary Shares will be consolidated, each Shareholder's percentage holding in the total issued share capital of the Company immediately before and after the implementation of the Share Consolidation will (save in respect of fractional entitlements) remain unchanged.
Fractional entitlements arising from the Share Consolidation will be aggregated and sold in the market on behalf of the relevant Shareholders. The proceeds of the sale (net of expenses) are expected to be sent to relevant Shareholders on 11 June 2021. Due to the cost of postage, proceeds of less than £5 will be retained by the Company and will be donated to a charity of the Company's election.
Dividend Reinvestment Plan
The Board intends to launch a Dividend Reinvestment Plan (the ''DRIP'') which will apply in respect of the Special Dividend only (and not any other future dividends).
The DRIP will be administered by the Registrar and provides you with the opportunity to reinvest your Special Dividend to purchase additional New Ordinary Shares in the Company.
Participation in the DRIP is available to Shareholders resident in the following jurisdictions only: Argentina, Botswana, Brazil, Chile, Gibraltar, Guernsey, Guinea, Hong Kong, Indonesia, Isle of Man, Jersey, Mexico, Namibia, Paraguay, Peru, South Africa, South Korea, Switzerland, Taiwan, and United Kingdom (''Eligible Shareholders''). As the United Kingdom is no longer a member of the European Union it is not possible for residents in the European Economic Area to participate in the DRIP.
Further details, including the associated fees and charges, are contained in the Shareholder Circular and the DRIP Terms and Conditions which will accompany the hard copy DRIP form of election and are available to view on and download from the Company's website at www.vectura.com/investors/meetings-voting and on Computershare's website at www.investorcentre.co.uk. Alternatively, you may request a hard copy of the DRIP Terms and Conditions by contacting Computershare via the shareholder helpline on 0370 707 1387.
If you do not wish to participate in the DRIP you need take no further action.
If you wish to participate in the DRIP, a form of election accompanies the Shareholder Circular together with a hard copy of the DRIP Terms and Conditions. Alternatively you can use the DRIP form election available on the Company's website at www.vectura.com/investors/meetings-voting and insert your shareholder details, including your shareholder reference number. You can also make an election online at www.investorcentre.co.uk, but you must first register if you are not already a member of Investorcentre. If you are a CREST member or sponsored by a CREST member and you wish to participate in the DRIP you must submit your election using the CREST system. You may also request a hard copy DRIP election form by contacting Computershare via the shareholder helpline on 0370 707 1387. Further details are contained in the DRIP Terms and Conditions.
To participate in the DRIP in respect of the Special Dividend, Computershare must receive your completed election form, online application, or election using the CREST system by 5.00 p.m. on 28 May 2021.
If you choose to participate in the DRIP all (not part of) the Ordinary Shares you hold in the Company falling under a single shareholder reference number will be included within the DRIP.
A summary of certain taxation consequences of the Special Dividend and the Share Consolidation and the DRIP, for certain categories of UK-resident Shareholders and certain US Shareholders, is set out in paragraph 6 of Appendix I of the Shareholder Circular. This is intended as a general guide only and is not intended to be, nor should it be considered to be, legal or tax advice to any particular Shareholder, nor should it be relied on.
Shareholders should read paragraph 6 of Appendix I of the Shareholder Circular and, if they are in any doubt as to their tax position, consult their own independent tax advisers.
The Special Dividend and the Share Consolidation are conditional on the approval of Shareholders to be sought at the General Meeting, and also on the admission of the New Ordinary Shares to the premium listing segment of the Official List and to trading on the London Stock Exchange's main market for listed securities occurring by or as soon as practicable after 8.00 a.m. on 1 June 2021 (or such later date or time as the Directors may determine in their absolute discretion) (the ''Admission'').
At the General Meeting, the Company is also seeking Shareholder approval to refresh its general authority to make market purchases of its ordinary shares expected to be granted at the Company's 2021 AGM so that such authority continues to be available in respect of the New Ordinary Shares after the Share Consolidation.
Your Directors consider each Resolution to be in the best interests of the Company and its Shareholders as a whole and unanimously recommend you vote in favour of each of them, as they intend to do in respect of their own beneficial shareholdings.
Expected Timetable of Principal Events
Latest time and date for receipt of Forms of Proxy and CREST proxy instructions for the General Meeting
11.00 a.m. on Tuesday, 25 May
11.00 a.m. on Thursday, 27 May (or as soon thereafter as the 2021 AGM is concluded or adjourned)
Latest time of dealings in Existing Ordinary Shares
4.30 p.m. on Friday, 28 May
Latest time and date for election to participate in the DRIP for the Special Dividend
5.00 p.m. on Friday, 28 May
Record Date for the Special Dividend and for the Share Consolidation
6.00 p.m. on Friday, 28 May
Ordinary Shares marked ex-Special Dividend
Tuesday, 1 June
Commencement of dealings in New Ordinary Shares (after Share Consolidation)
By or as soon as practicable after 8.00 a.m. on Tuesday, 1 June
CREST accounts credited with New Ordinary Shares (after Share Consolidation)
Tuesday, 1 June
Despatch of certificates for New Ordinary Shares (after Share Consolidation)
No later than Friday, 11 June
Special Dividend becomes payable to Shareholders
Friday, 11 June
Purchase of New Ordinary Shares for participants in the DRIP
Commencing from Friday, 11 June
Unless otherwise stated, all references to times in this document are to London, UK time.
These dates and times are given on the basis of the Board's current expectations and are subject to change. If any of the above times and/or dates change, the revised times and/or dates will be notified to Shareholders by announcement through a Regulatory Information Service and will be made available on the Company's website at www.vectura.com/investors/rns-updates.
All events in the timetable following the General Meeting are conditional upon approval of the Resolutions in the Notice of General Meeting in the Shareholder Circular. All events in the timetable from Admission of the New Ordinary Shares are also conditional upon Admission occurring.
If you have any questions about the Special Dividend and Share Consolidation, the DRIP or any of the other matters set out in the Shareholder Circular, please call the Shareholder Helpline on 0370 707 1387 between 8.30 a.m. and 5.30 p.m. Monday to Friday (excluding public holidays in England and Wales). Calls to the Shareholder Helpline from outside the United Kingdom will be charged at the applicable international rates. Different charges may apply to calls from mobile telephones, and calls may be recorded and randomly monitored for security and training purposes. For legal reasons, the Shareholder Helpline will be unable to give advice on the merits of the Special Dividend and Share Consolidation, the DRIP or any of the other matters set out in the Shareholder Circular, or to provide financial, legal, tax or investment advice.
The Shareholder Circular will be posted or otherwise made available to shareholders today. The Shareholder Circular will be available on Vectura's website at www.vectura.com/investors/meetings-voting, and copies of both the Shareholder Circular and the form of proxy for use in connection with the General Meeting will shortly be available for inspection at www.investorcentre.co.uk.
Terms used in this announcement but which are otherwise undefined have the same meanings as set out in the Shareholder
NEITHER THIS DOCUMENT NOR THE SHAREHOLDER CIRCULAR CONSTITUTES AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITY, NOR SHALL THERE BE ANY SALE, ISSUANCE OR TRANSFER OF SECURITIES REFERRED TO IN ANY JURISDICTION IN CONTRAVENTION OF APPLICABLE LAW. Neither this document nor the Shareholder Circular constitutes a prospectus for the purpose of the Prospectus Rules of the UK Financial Conduct Authority (in its capacity as UK Listing Authority or otherwise) pursuant to Sections 85 and 87 of the FSMA, the London Stock Exchange or any other authority or regulatory body, and has not been approved for the purposes of Section 21 of the FSMA.
THIS DOCUMENT INCLUDES FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES, MANY OF WHICH ARE BEYOND VECTURA GROUP PLC'S CONTROL AND ALL OF WHICH ARE BASED ON THE DIRECTORS' CURRENT BELIEFS AND EXPECTATIONS ABOUT FUTURE EVENTS. FORWARD-LOOKING STATEMENTS ARE SOMETIMES IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS "BELIEVE", "EXPECTS", "MAY", "WILL", "COULD", "SHOULD", "SHALL", "RISK", "INTENDS", "ESTIMATES", "AIMS", "PLANS", "PREDICTS", "CONTINUES", "ASSUMES", "POSITIONED", "ANTICIPATES", "CONFIDENT", "REALISATION", "CONSIDER" OR "TARGETS" OR THE NEGATIVE THEREOF, OTHER VARIATIONS THEREON OR COMPARABLE TERMINOLOGY. THESE FORWARD-LOOKING STATEMENTS INCLUDE ALL MATTERS THAT ARE NOT HISTORICAL FACTS. THEY APPEAR IN A NUMBER OF PLACES THROUGHOUT THIS DOCUMENT AND INCLUDE STATEMENTS REGARDING THE INTENTIONS, BELIEFS OR CURRENT EXPECTATIONS OF THE DIRECTORS CONCERNING, AMONGST OTHER THINGS, THE FUTURE RESULTS OF OPERATIONS, FINANCIAL CONDITION, PROSPECTS, GROWTH, STRATEGIES, AND DIVIDEND POLICY OF VECTURA GROUP PLC AND THE INDUSTRY IN WHICH IT OPERATES.
These forward-looking statements and other statements contained in this document regarding matters that are not historical facts involve predictions. No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing Vectura Group plc. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed, or implied in such forward-looking statements. Such forward-looking statements contained in this document speak only as of the date of this document. Vectura Group plc and its Directors expressly disclaim any obligation or undertaking to update these forward-looking statements contained in the document to reflect any change in their expectations or any change in events, conditions, or circumstances on which such statements are based unless required to do so by applicable law, the Listing Rules, the Market Abuse Regulation, the Prospectus Rules or the Disclosure Guidance and Transparency Rules of the FCA.
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For more information, please contact:
Vectura Group plc
John Murphy - Company Secretary +44 (0)207 881 1206
Olivia Manser - Director, Investor Relations +44 (0)7947 758 259
David Ginivan - VP Corporate Communications +44 (0)7471 352 720
Consilium Strategic Communications +44 (0)20 3709 5700
Mary-Jane Elliott / Melissa Gardiner / David Daley
Vectura is a leading specialist inhalation CDMO that provides innovative inhaled drug delivery solutions that enable customers to bring their medicines to patients. With differentiated proprietary technology and pharmaceutical development expertise, Vectura is one of the few companies globally with the device, formulation and development capabilities to deliver a broad range of complex inhaled therapies.
Vectura has twelve key inhaled and eleven non-inhaled products marketed by partners with global royalty streams, and a diverse partnered portfolio of drugs in clinical development. Our partners include Hikma, Novartis, Sandoz (a division of Novartis AG), Mundipharma, Kyorin, GSK, Bayer, Chiesi, Almirall, and Tianjin KingYork.
For further information, please visit Vectura's website at www.vectura.com
This press release contains forward-looking statements, including statements about the commercialisation of products and the successful execution of the Group's strategy to win new customer contracts for development services. Various risks may cause Vectura's actual results to differ materially from those expressed or implied by the forward looking statements, including: failure to develop a strong pipeline of new CDMO opportunities and to successfully convert these opportunities into new revenues with an acceptable margin profile; the requirement for substantial funding to conduct research and development to maintain a competitive service offering; commercial limitations imposed by patents owned or controlled by third parties; dependence upon strategic alliance partners to develop and commercialise products and services; difficulties or delays in obtaining regulatory approvals to market products and services resulting from development efforts; and product initiatives by competitors. As a result of these factors, prospective investors are cautioned not to rely on any forward-looking statements. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.