London, June 22, 2020 – Boehringer Ingelheim Invest GmbH (“Boehringer Ingelheim”) has today announced its intention to exit in full its investment in Hikma Pharmaceuticals PLC (“Hikma” or the “Company”). As of today, Boehringer Ingelheim holds 40 million ordinary shares in Hikma, which represents approximately 16.4 per cent. of the issued ordinary share capital and voting rights in the Company.
22 June 2020
Corporate, Inside information, Press Release
Boehringer Ingelheim has commenced an accelerated bookbuild offering (the “Bookbuild”) to sell up to approximately 28 million shares in Hikma (the “Placing Shares”) to institutional investors only (the “Placing”). Concurrently with the Placing, Hikma has committed to buy back from Boehringer Ingelheim such number of ordinary shares (“the Buy Back Shares”) as does not exceed an aggregate value of £295 million (being an amount approximately equal to 4.99% of the aggregate market value of all the Shares of the Company at the close of business on 22nd June 2020, less the value of the commitment fee described below) (the “Buy Back”). The purchase price for each of the Buy Back Shares will be equal to the sale price for each of the Placing Shares (the “Buy Back Price”). The Buy Back Price is subject to the price limit set out below. Hikma has separately today entered into an agreement with Boehringer Ingelheim pursuant to which Hikma will receive a commitment fee of 2 per cent. of the aggregate value of the Buy Back Shares acquired at the Buy Back Price (the “Commitment Fee”). Citigroup Global Markets Limited (“Citi”) will act as riskless principal for the purpose of the Buy Back.
The Buy Back is subject to the satisfaction of a number of conditions, including the successful pricing of the Placing and provided that the price payable by Hikma for the Buy Back Shares does not exceed a per share amount equal to £24.71, which, net of the 2% commitment fee, is equal to approximately £24.22, being the average closing price of the five business days preceding to today’s date. If the Placing Price is within the pricing limits that apply to the Buy Back Price, the Placing cannot proceed unless the Buy Back proceeds.
Hikma will fund the Buy Back from cash and available facilities. Hikma intends to hold the Buy Back Shares in treasury and Hikma will not receive any proceeds from the Placing. Following the successful completion of the Placing and the Buy Back, Boehringer Ingelheim would no longer hold any shares in Hikma.
The shares being sold by Boehringer Ingelheim were issued by Hikma as part of the consideration for the acquisition of Roxane Laboratories in February 2016. The Buy Back demonstrates the Board’s confidence in Hikma’s future prospects. Since its initial public offering (“IPO”) in 2005, Hikma has delivered a total shareholder return of approximately 926%, exceeding the FTSE 100 total shareholder return of approximately 105%.
As at 31 December 2019, Hikma’s net debt to core EBITDA ratio was 0.4x.
Boehringer Ingelheim is a related party of Hikma for the purposes of the Listing Rules by virtue of its approximately 16.4 per cent. shareholding in Hikma. The Buy Back by Hikma and the associated payment of the Commitment Fee by Boehringer Ingelheim constitute a smaller related party transaction falling within LR 11.1.10R(1) and this announcement is therefore made in accordance with LR11.1.10R(2)(c). The aggregate amount of the Buy Back and the commitment fee cannot be higher than approximately £301 million.
Citi and Goldman Sachs International (“Goldman Sachs”) are acting as joint financial advisers to Hikma on the Buy Back.
Commenting, Said Darwazah, Executive Chairman of Hikma, said:
“I would like to thank Boehringer Ingelheim for their support as a major shareholder in Hikma since our acquisition of Roxane in 2016. We are delighted to have the opportunity to welcome new investors into Hikma and at the same time have this unique opportunity to acquire a significant proportion of our share capital. The Buy Back reflects our confidence in the future prospects of the business and we will retain significant financial flexibility to continue to execute our strategy. We remain focused on delivering future growth and value creation for our shareholders.”
The person responsible for the release of this announcement on behalf of Hikma is Peter Speirs (Company Secretary).