Prospectus/US Circular
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Frequently Asked Questions
Placing
1) What is a placing?
A placing is an agreement to issue shares to a limited number of people. In the Placing and Open Offer announced on 1 September 2008 the Placing is conditional and subject to clawback (reduction) – the number of shares which have been placed will be reduced by the number of shares validly applied for by Qualifying Shareholders under the Open Offer.
2) How many shares have been placed
1,401,780,736 New Ordinary Shares (subject to the effect of the Share Capital Reorganisation). After the Share Capital Reorganisation which includes a 1 for 100 consolidation this will amount to 14,017,807 Consolidated New Ordinary Shares, subject to a special arrangement with one of the placees, HBM.
The 814,988,800 existing issued Ordinary Shares will be consolidated into 8,149,888 Consolidated Ordinary Shares. After the Placing and Open Offer, the new issued ordinary share capital will be 22,167,695 Consolidated Ordinary Shares, subject to the arrangement with HBM.
3) Who is participating in the placing?
Several parties are participating in the placing including, amongst others, HBM BioVentures (Cayman) Limited and most of the directors of the Company.
4) Can I participate in the placing?
No. The placees have already been agreed and no further placement of shares is possible. However if you are a Qualifying Shareholder then you will be able to participate in the Open Offer.
5) Why not?
The placing is a private conditional sale of shares to selected parties and no further placees are being sought.
6) Who are HBM?
HBM BioVentures (Cayman) Limited is a long term investor in SkyePharma PLC and is currently the largest shareholder with 91,800,000 ordinary shares or 11.26% of the existing issued Ordinary Shares. In order to keep its ordinary shareholding to below 30 per cent of the voting rights, its placing commitment includes the possibility that some of the shares placed with it will be Convertible Non-Voting Shares. To the extent that Convertible Non-Voting Shares are issued, the number of Consolidated Ordinary Shares in issue will be smaller.
Open Offer
7) What is an Open Offer?
An Open Offer (also known as an “entitlement issue”) is an offer to existing shareholders inviting them to buy new shares pro rata to their existing holding at a set price.
8) How many shares are being offered?
The majority of shareholders who were on the register on the Record Date of 27 August 2008 are being offered the opportunity to participate under the open offer, although shareholders in certain countries are excluded due to legal restrictions in those countries. This means that slightly less than 1,401,780,736 New Ordinary Shares are being offered in the Open Offer.
9) Who is participating in the open offer?
All Qualifying Shareholders at the Record Date (27 August 2008) are entitled to participate in the Open Offer provided they have not sold their shares prior to 2 September 2008. In addition, persons who buy shares between 27 August 2008 and the date on which the shares are marked “ex” entitlement (2 September 2008) will be entitled to participate in the Open Offer, provided that they are not citizens or residents of certain prohibited countries.
All Directors of the Company, where they are current shareholders, have signed irrevocable undertakings to take up their entitlements in full in the Open Offer.
10) Who are Qualifying Shareholders?
Qualifying Shareholders are those SkyePharma shareholders on the register of members at the Record Date other than SkyePharma Shareholders who are located in or have registered addresses in the United States, Australia, Canada, Hong Kong, Japan, New Zealand and holders of ADRs (including the ADR depositary and its nominee or custodian).
Please see FAQs 18 and 19 if you have bought or sold your shares since the Record Date.
11) How do I take up my entitlements under the open offer?
Qualifying Shareholders or their brokers or nominees (where held in certificated form) will receive an application form, form of proxy and either a letter informing them that a prospectus has been issued on the Company’s website or a copy of the prospectus itself.
Instructions are printed on the application form itself. Where the form is held by a shareholder’s broker it is up to the broker to contact their client and determine what action to take. If a shareholder believes that they are eligible for the Open Offer and haven’t heard from their broker within a reasonable time before the final acceptance date for the Open Offer (11 am on 24 September 2008) they should contact their broker.
Completed Application Forms along with the remittance must be received by Capita by 11 am on 24 September 2008.
12) When was the record date?
The record date was 27 August 2008.
13) When was/is the ex date?
The ex date is 2 September 2008.
14) My broker has quoted 4 September as the ex date, why?
4 September 2008 is the date that entitlements will be credited to CREST accounts and not the ex date itself (which was 2 September 2008).
15) How does a record date differ from an ex date?
A record date is the date on which a person must be registered as the owner of shares in order to receive the open offer. It allows the Company to deal with practicalities of printing the application forms to go out with the Prospectus. The record date of 27 August was the latest practicable date for making the necessary preparations to be able to meet the print deadline.
The ex date is the date on and after which shares are sold without (or “ex”) the entitlement rights under the open offer. In this instance, the ex date is 2 September 2008. Sales of shares before this date will carry the right to claim the entitlement to participate in the open offer.
16) Can I sell or transfer my entitlements?
The Open Offer applies to Qualifying Shareholders to whom the open offer is made. Shareholders cannot sell or transfer their entitlements, other than to persons who claim the entitlements, having bought shares before the ex date.
17) Can I purchase any additional entitlements over and above my allocation?
No
18) I bought shares after 27 August 2008, do I have any entitlements under the open offer?
If you bought any shares before the ex date (2 September 2008) you will be able to claim an entitlement under the open offer and should contact your broker through whom you bought your shares, who will be able to confirm if you are eligible to participate in the Open Offer.
19) I sold shares after 27 August 2008, do I have any entitlements under the open offer?
If you sold shares before the ex date, the buyer can claim an entitlement under the open offer from you. If you sold only some of your shares and still keep a shareholding, the entitlement under the open offer will need to be split between you and the buyer, as you will keep part of the entitlement.
20) Who can I call for help regarding the application process?
Queries relating to the completion of the Application Form should be referred to the shareholders’ helpline by telephone between 9.00am and 5.00pm (London Time) Monday to Friday (except UK public holidays) on tel: 0871 664 0321, calls cost 10p per minute plus network charges or, if calling from outside the UK, on +44 20 8639 3399).
Please note that Capita Registrars cannot provide any legal, tax or financial advice on the Placing and Open Offer or any of the other matters set out in the Prospectus.
Bonds
21) What terms are changing in relation to the 2024 bonds?
The main changes to the terms and conditions are:
(1) the delay in the earliest put date to 4 Nov 2013 (from May 2009)
(2) the conversion price amendment from 95 pence to 371 pence (following 1 for 100 consolidation) – ie from 95 pence to 3.71 pence, ignoring the effect of the consolidation.
22) What terms are changing in relation to the 2025 bonds?
The main changes to the terms and conditions are:
(1) the delay in the earliest put date to 3 Dec 2014 (from June 2010)
(2) the conversion price amendment from 58 pence to 382 pence (following 1 for 100 consolidation) - ie from 58 pence to 3.82 pence, ignoring the effect of the consolidation.
23) Have these changes been agreed with the bondholders?
Binding undertakings to support the changes to the 2024 bonds were already agreed by 69.9% of 2024 bondholders as at the date of the announcement on 1 September 2008. A meeting of the 2024 bondholders will be held on 25 September 2008 to approve these changes.
Binding undertakings to support the changes to the 2025 bonds have been agreed by 100% of the 2025 bondholders.
24) How many shares are the bondholders entitled to upon conversion?
2024 bonds – 18,758,490 consolidated ordinary shares arising on conversion
2025 bonds – 5,235,602 consolidated ordinary shares arising on conversion
25) How many shares would be in issue if the bondholders all converted immediately on completion of the Transactions?
There will be a total of 22,167,695 Consolidated Ordinary Shares in issue representing existing shares and shares issued under the Placing and Open Offer, subject to the arrangement with HBM.
There would be a further 22,994,092 Consolidated Ordinary Shares issued to the bondholders in settlement of the £89,594,000 debt. This would give a total of 46,167,787 Consolidated Ordinary Shares in issue.
Share Capital Reorganisation
26) Why are you reorganising your share capital?
There are 2 main reasons for the share capital reorganisation:
1) As a matter of UK company law it is not possible for the Company to issue shares at less than their nominal value, and the offer price of 1.5 pence (pre the Share Capital Reorganisation) is less than the current nominal value of 10 pence per share.
2) The post-consolidation share price will be higher and so less vulnerable to volatility on a percentage basis.
27) On what basis are the shares being consolidated?
The 814,988,800 existing issued Ordinary Shares will be consolidated into 8,149,888 Consolidated Ordinary Shares on a 1:100 basis.
Timing
28) When will I receive my application form (if applicable)
The application forms mailed to Qualifying Shareholders (or their brokers or nominees) should be received by 4 September.
29) When is the general meeting taking place?
The shareholder general meeting will take place on 19 September 2008 at 11.00 am.
A separate bondholder meeting will take place on 25 September 2008 at 10.00 am.
30) Where is the general meeting taking place?
Both meetings will take place at the offices of Fasken Martineau Stringer Saul LLP, 17 Hanover Square, London W1S 1HU. A map is provided at the end of the prospectus and on the back of the form of proxy. It is also available on the Company’s website.
31) Can I attend the general meeting?
All Shareholders are entitled to attend the general meeting taking place on 19 September 2008.
Shareholders are entitled to appoint a proxy to attend the meeting on their behalf. Forms of proxy must be returned so that they reach the Registrars by 11.00 am on 17 September 2008.
Corporations should usually appoint a “designated corporate representative”.
A nominated person may have the right to attend the meeting (if those rights have been granted by the shareholder who nominated them).
Other Matters
32) What management changes have taken place?
Frank Condella has stepped down as Chief Executive Officer and will become a Non-Executive Director on 1 November 2008. Dr Ken Cunningham, formerly Chief Operating Officer, is the new Chief Executive Officer.
33) How can I obtain a copy of the prospectus?
The prospectus is available on the Company’s website at www.skyepharma.com or in hard copy form upon request. (Please email ir@skyepharma.co.uk). Please note that the prospectus is not available to residents in certain countries such as the United States.
34) How can I obtain a form of proxy?
Please contact the shareholders’ helpline by telephone between 9.00am and 5.00pm (London Time) Monday to Friday (except UK public holidays) on tel: 0871 664 0321, calls cost 10p per minute plus network charges or, if calling from outside the UK, on +44 20 8639 3399).
35) How can I obtain an application form?
Please contact the shareholders’ helpline by telephone between 9.00am and 5.00pm (London Time) Monday to Friday (except UK public holidays) on tel: 0871 664 0321, calls cost 10p per minute plus network charges or, if calling from outside the UK, on +44 20 8639 3399).
INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY ORDINARY SHARES REFERRED TO IN THESE FAQs EXCEPT ON THE BASIS OF INFORMATION IN THE PROSPECTUS PUBLISHED BY THE COMPANY IN CONNECTION WITH THE PROPOSED PLACING AND OPEN OFFER. THE ANSWERS TO THESE FAQS ARE NOT A SUBSTITUTE FOR READING THE PROSPECTUS IN ITS ENTIRETY.