Lifeline Scientific has agreed a takeover by Shanghai Genext Medical Technology Co, subject to shareholder approval.
Lifeline Scientific says it has entered into a definitive merger agreement under which SGM's affiliate would acquire all of LSI for an aggregate consideration of up to approximately US$87.8 million in cash.
LSI is incorporated in the state of Delaware in the USA and the acquisition is not subject to the UK City Code on Takeovers and Mergers.
Under the terms of the merger agreement, LSI shareholders would receive the sterling equivalent of US$4.083 in cash for each share.
Based on an exchange rate of 1.310 US dollars to the pound, this would equate to an offer price of approximately 312 pence per share. That would represent a premium of approximately:
- 0.7 per cent. to the mid-market closing price of 309.5 pence per LSI share on 1 September
- 51.3 per cent. to the mid-market closing price of 206 pence per LSI share on 18 September 2015, the last dealing day prior to the date that LSI's board first announced the company would launch a comprehensive review of strategic and financial alternatives to enhance shareholder value
The company also issued a trading update.
It said the prospects continue to remain solid for 2016, with trading in the first half significantly ahead of the corresponding period last year.
The company said it saw strong growth across its North American, South American and European markets and expects to report revenues for transplantation products and revenues for the six month period up 21.1% to US$18.2m (H1 2015: US$15.0m), with sales of proprietary single-use consumables up 24.7% to US$10.6m (H1 2015: US$8.5m).
Operating profit in the first half showed considerable growth, with the Company expecting to report income from operations of US$2.0m, significantly up from the US$0.1m recorded in the same period last year.
Profit before tax is expected to be US$2.0m (H1 2015: US$0.1m).
The company said its cash position remains strong with US$1.6m of cash generated from operations in the first half (H1 2015: US$1.0m), which resulted in cash balances as of 30 June 2016 of US$7.5m (31 December 2015: US$6.9m).
At 8:22am: (LON:LSIC) Lifeline Scientific Inc share price was -42p at 267.5p