Following its announcement on January 5th, European biotechnology company Valneva SE (“Valneva”) today announces the launch of a capital increase with preferential subscription rights for holders of ordinary shares for a gross amount of approximately EUR 45 million (the “Rights Issue”). This Rights Issue is part of the financing for the acquisition of Crucell Sweden AB and all assets, licenses and privileges related to Dukoral®(1), a vaccine against cholera and traveler’s diarrhea caused by ETEC (Enterotoxigenic Escherichia coli), as well as a Nordics vaccine distribution business of the seller and its affiliates (the “Acquisition”). The net proceeds of the Rights Issue are estimated to amount to approximately EUR 42 million.
The Company intends to use EUR 30 million of the net proceeds to fund the Acquisition whose total purchase price amounts to EUR 45 million (the “Acquisition Price”). The remaining proceeds, of approximately EUR 12 million, will be used to finance the integration and working capital needs of the assets being acquired, the development of the Company’s clinical stage vaccine products, and to reinforce Valneva’s financial flexibility in order to allow the Company to advance its sustainable, independent and growing activity, as well as for general corporate purposes.
The remainder of the Acquisition Price will be financed through a loan facility put in place with Athyrium Opportunities Fund (A) LP, Athyrium Opportunities Fund (B) LP and / or other investment funds managed or advised by Athyrium Capital Management (or any affiliate), in an amount of EUR 15 million. The completion of the Acquisition is subject to customary closing conditions for a transaction of this type.
Main Terms and Conditions of the Rights Issue
The share capital increase will be carried out with preferential subscription rights of holders of ordinary shares by the issuance of 18,231,466 new ordinary shares at a price of EUR 2.47 per share (comprised of the EUR 0.15 nominal value and issue premium of EUR 2.32 per share), representing a total gross amount of EUR 45,031,721.02 (including issue premium).
Each holder of Valneva ordinary shares will receive one preferential subscription right for each ordinary share registered for accounting purposes in their securities accounts as of the close of trading on January 14th, 2015. 34 preferential subscription rights will entitle the holder to subscribe on an irreducible basis (“à titre irréductible”) to 11 new ordinary shares. Subscriptions subject to reduction (“à titre réductible”) will be accepted.
Based on the closing price of Valneva’s shares on January 12th, 2015 (i.e. EUR 4.02), the theoretical value of each preferential subscription right is EUR 0.38. The subscription price represents a 38.56% discount to the closing price of Valneva’s shares on January 12th, 2015 and a 32.16% discount to the theoretical ex-right price.
The offer will be open to the public in France only.
Subscription commitments and underwriting of the offering
Groupe Grimaud la Corbière (“Groupe Grimaud”), holding 11,843,327 existing ordinary shares representing approximately 21% of the Company’s ordinary share capital on the date hereof, has irrevocably undertaken (i) to sell 4,851,494 and 6,256,884 preferential subscription rights to Athyrium Opportunities II Acquisition LP (“Athyrium”) and Capital Ventures International, respectively, (ii) to exercise the amount of 734,944 of preferential subscription rights not sold, allowing for subscription on an irreducible basis for 237,776 new ordinary shares representing EUR 587,306.72 and (iii) to place an order subject to reduction for 216,907 new ordinary shares representing a maximum amount of EUR 535,760.29 in order to fulfil its commitment to reinvest the total proceeds from the sale of these preferential subscription rights in this Rights Issue.
Athyrium, not yet a shareholder of the Company as of the date hereof, has irrevocably undertaken to subscribe for a maximum amount of EUR 3,876,914.47 in new ordinary shares. In this context, Athyrium has undertaken to acquire from Groupe Grimaud 4,851,494 preferential subscription rights at a price of EUR 0.23 per preferential subscription right and to subscribe for new ordinary shares on an irreducible basis by exercising a total of 4,851,494 preferential subscription rights, for a total number of 1,569,601 new ordinary shares, representing a subscription amount of EUR 3,876,914.47. For a period of five years following the settlement of the Offering and for as long as Athyrium holds 80% of those new shares subscribed to it, Athyrium is entitled to appoint one board observer to the Company’s supervisory board to participate, with consultative voice only, in the meetings of the supervisory board and its committees.
Capital Ventures International, not yet a shareholder of the Company as of the date hereof, has irrevocably undertaken to subscribe for a maximum amount of EUR 5 million in new ordinary shares. In this context, Capital Ventures International has undertaken to acquire from Groupe Grimaud 6,256,884 preferential subscription rights for a total price consideration of EUR 1 and to subscribe for new ordinary shares on an irreducible basis by exercising the total number of 6,256,884 preferential subscription rights thus acquired, for a total number of 2,024,286 new ordinary shares, representing a subscription amount of EUR 4,999,986.42. Furthermore, Capital Ventures International has reserved the right to place an order subject to reduction.
Bpifrance Participations, holding 5,499,863 existing ordinary shares representing approximately 10% of the Company’s ordinary share capital on the date hereof, has irrevocably undertaken to subscribe for a maximum amount of EUR 10 million in new ordinary shares. In particular, Bpifrance Participations has irrevocably undertaken to subscribe on an irreducible basis for 1,779,360 new ordinary shares for EUR 4,395,019.20 and to place an order subject to reduction in the amount of 2,269,222 new ordinary shares for a maximum amount of EUR 5,604,978.34.
In total, the undertakings to subscribe for shares on an irreducible basis and, as applicable, subject to reduction, by Bpifrance Participations, Athyrium, Capital Ventures International and Groupe Grimaud, represent approximately EUR 20 million or 44.4% of the Rights Issue.
The remaining part of the Rights Issue not covered by the subscription commitments of Bpifrance, Athyrium, Capital Ventures International and Groupe Grimaud, represents EUR 25 million and is underwritten by Crédit Agricole Corporate and Investment Bank and Kempen & Co N.V. (together, the “Joint Bookrunners”) who are acting as Joint Bookrunners of the Rights Issue pursuant to an underwriting agreement entered into on January 12th, 2015 between the Joint Bookrunners and the Company.
The members of the management board have also indicated their intent to subscribe new ordinary shares in the Rights Issue by selling a portion of their preferential subscription rights and using the proceeds from that sale to subscribe for the capital increase by exercising the remaining portion of their preferential subscription rights.
Bpifrance Participations, Groupe Grimaud and Athyrium have agreed to a lock-up for a period ending 90 days after the settlement date of the Rights Issue, subject to certain customary exceptions, except that Groupe Grimaud may pledge the shares it holds as well as those acquired in the Rights Issue.
The Company entered into a 180-day lock-up commitment vis-à-vis the Joint Bookrunners, subject to certain customary exceptions.
Indicative timetable of the rights issue
The subscription period for the new shares will run from January 15th, 2015 to the close of trading on January 28th, 2015. During this period, the preferential subscription rights will be listed and traded on the regulated market of Euronext in Paris (“Euronext Paris”) under ISIN code FR0012444842.
Any preferential subscription rights not exercised before the end of the subscription period, i.e. before the close of business on January 28th, 2015, will lapse automatically.
The settlement-delivery and the listing of the new ordinary shares on Euronext Paris and on the Vienna Stock Exchange are expected to occur on or about February 6th, 2015.
The new ordinary shares will carry full rights (“jouissance courante”). They will be immediately fungible with the Company’s existing ordinary shares and will be traded on the same listing line under the same ISIN code FR0004056851.
Information available to the public
The French language prospectus, approved by the Autorité des marchés financiers ("AMF”) under number 15-020 dated January 12th, 2015 consists of the registration document (“document de référence”) (the "Registration Document”) of Valneva filed with the AMF on April 30th, 2014 under number D.14-0444, a securities note (the "Securities Note”), and a summary of the prospectus (included in the Securities Note). Copies of the prospectus filed with the AMF may be obtained free of charge from Valneva’s administrative office (70, Rue Saint-Jean de Dieu, 69007 Lyon) and are also available on Valneva’s website (www.valneva.com) as well as on the AMF’s website (www.amf-france.org). Valneva draws investors’ attention to Chapter 1.1.2 “Risk Factors” described in the Registration Document, as well as in Section 2 of the Securities Note.
(1) About Dukoral®
Dukoral® is used to protect against cholera - a very serious disease caused by Vibrio Cholerae (V. cholerae), which is caught from contaminated food or water and causes severe diarrhea. In some regions, i.e. Canada and Switzerland, Dukoral® is indicated for the prevention of and protection against travelers’ diarrhea caused by ETEC (Enterotoxigenic Escherichia coli) and/or cholera. Dukoral® is used in adults, adolescents and children from two years of age who will be visiting high-risk areas. The vaccine contains four different inactivated strains (types) of the bacterium V. cholerae serotype O1, and part of a toxin from one of these strains as active substances.
About Valneva SE
Formed in 2013 through the merger of Intercell AG and Vivalis SA, Valneva is a biotechnology company developing, manufacturing and commercializing innovative vaccines with a vision to protect people from infectious diseases. The Company seeks financial returns through focused R&D investments in promising product candidates and growing financial contributions from commercial products, striving towards financial self-sustainability.
Valneva´s portfolio includes a commercial vaccine for the prevention of Japanese encephalitis(IXIARO®) and proprietary vaccines in development against Pseudomonas aeruginosa, Clostridium difficile and Lyme Borreliosis. A variety of partnerships with leading pharmaceutical companies complement the company’s value proposition and include vaccines being developed using Valneva´s innovative and validated technology platforms (EB66® vaccine production cell line, IC31® adjuvant). Valneva is headquartered in Lyon, France, listed on Euronext-Paris and the Vienna stock exchange and operates out of France, Austria and Scotland with approximately 270 employees. More information is available at www.valneva.com.