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Arthro Kinetics plc: Approval of waiver of Rule 9 of the Takeover Code

27 February 2007

Approval of waiver of Rule 9 of the Takeover Code; Subscription of 44,402,685 New Shares (“Subscription”) and Placing of 16,000,000 New Shares (“Placing”) at 10p per share; Issue of Warrants; Grant of new Share Options; Sub-division of Share Capital

Arthro Kinetics plc is an orthopaedics company dedicated to regenerating joint mobility.

  • The Company is raising a total of €9 million (£6.04 million) before expenses through a Subscription for 44,402,685 shares at 10 pence each to, amongst others, funds controlled by Heidelberg Innovation (“Heidelberg”), and the Placing of a further 16,000,000 shares at 10 pence each by Nomura Code Securities Limited with institutional investors.
  • Although the company has cash of approximately €2.8 million (£1.9 million), the proceeds of the Subscription and Placing are essential if the Company is to implement its stated strategy.
  • Each investor subscribing to the Subscription and Placing will receive a warrant carrying the right to subscribe for one share at 20 pence each for every 2 shares subscribed.
  • Following the Subscription and Placing, Heidelberg, and certain investors with whom Heidelberg is acting in concert (the “Concert Party”), will control a total of 56.7 per cent of the enlarged share capital. The Takeover Panel has approved a waiver, in respect of the Concert Party’s shareholding, from the obligation that would otherwise arise under Rule 9 of the Takeover Code. As a result of this waiver the Concert Party will not be required to make a general offer to all shareholders. This waiver is subject to the approval of the Company’s shareholders at the EGM to be held on 22 March 2007.
  • The Subscription and Placing price is below the nominal value of the Company’s shares of 20 pence. Therefore, it is proposed to sub-divide each unissued share into 4 new shares of 5 pence each. Existing shares will be divided into one new share of 5 pence plus a deferred share, which will be worthless, of 15 pence.
  • The Board proposes the appointment of Mr. Berthold Hackl, Managing Partner of Heidelberg innovations, as a Non Executive Director of the Company.
  • An EGM will take place on 22 March 2007 to seek shareholder approval, inter alia, for the Rule 9 Waiver, the Subscription and Placing, and the sub-division of shares.


Contacts:
Arthro Kinetics 
Doug Quinn CFOMobile: +44 (0) 7790 772 758
Nomura Code Securities LimitedTel: +44 (0) 20 7776 1200
Richard Potts 
Clare Terlouw 
Bankside ConsultantsTel: +44 (0) 20 7776 1200
Simon Bloomfield  




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