The announcement of Applecross-listed and Victoria-based Xceed Biotechnology Ltd's plan to demerge subsidiary PolyNovo Biomaterials Pty Ltd through an initial public offer sent the company's stock up 37 per cent, closing at 24 cents today.
The announcement of Applecross-listed and Victoria-based Xceed Biotechnology Ltd's plan to demerge subsidiary PolyNovo Biomaterials Pty Ltd through an initial public offer sent the company's stock up 37 per cent, closing at 24 cents today.
Xceed plans to distribute its PolyNovo shares in-specie to its shareholders, telling the market today the demerger would optimise the subsidiary's value in light of the recent growth of its business prospects.
PolyNovo, which specialises in the manufacture of biodegradeable polymers, is part-owned by the CSIRO.
The full text of an Xceed announcement is pasted below
Xceed Biotechnology Limited ('Xceed') is pleased to advise that it will seek shareholder approval for the demerger of its 64% owned subsidiary company, PolyNovo Biomaterials Pty Ltd ('PolyNovo'). This is planned to occur in conjunction with an IPO of PolyNovo on ASX.
The demerger would be achieved by Xceed distributing in-specie all of the shares it holds in PolyNovo to Xceed's shareholders. This will be subject to shareholder approval of resolutions to be put to a general meeting of Xceed shareholders, likely to be held in late August or early September 2007.
PolyNovo has commenced preparation of a Prospectus for the issue of fully paid ordinary shares to allow it to carry out the IPO. Details of the capital to be raised under the Prospectus and pricing of the issue will be released as soon as they have been confirmed by PolyNovo. Should PolyNovo shares be offered generally as part of this process, anyone wishing to acquire PolyNovo shares in the IPO will need to complete the application form in the Prospectus, which is expected to be available in early September, 2007.
Subject to (i) approval of the demerger by shareholders at the forthcoming general meeting and (ii) the PolyNovo IPO proceeding, Xceed shareholders at the record date (to be notified in the Notice of Meeting documentation) will receive a free equitable distribution of PolyNovo shares in accordance with their shareholding in Xceed.
The demerger and IPO plan is intended to optimize the value of PolyNovo in the context of the recent significant growth in PolyNovo's future business prospects and facilitate the provision of capital to fund that growth. In addition to the collaborations with its existing licensing partners, Medtronic, Inc. and Biomet, Inc., and those under the NovoSkin joint venture, PolyNovo has numerous other highly prospective options for the commercialization of NovoSorbTM. In order to maximize this potential, the Xceed Board believes that PolyNovo should have direct access to the Australian capital markets.
Xceed will keep shareholders informed of the demerger process with a further release of information likely to be in the next two to three weeks when it is planned to distribute the Notice of Meeting for the abovementioned shareholder meeting.
