vti 12p takeover offer

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    HYDRODEC GROUP PLC (“Hydrodec”)

    Intention to make all share offer for Virotec International plc (“Virotec”)

    Hydrodec announces that on 3 April 2008 it bought 7.75 million Virotec ordinary shares at an average price of 7.85 pence per share. This purchase represented, in aggregate, approximately 2.93 per cent. of the issued share capital of Virotec.

    Additionally, on 4 April 2008, Hydrodec purchased 400,000 shares at 10.0 pence per share, increasing its total interest to 8.15 million Virotec ordinary shares, representing approximately 3.06 per cent. of the issued share capital of Virotec.

    The Board of Hydrodec notes the announcement earlier today by the Board of Virotec and confirms that on 3 April 2008 it approached the Board of Virotec to inform it of yesterday’s purchase of shares in Virotec referred to above and indicated its intention to make an all share offer for Virotec on the basis of one Hydrodec ordinary share for every 3.75 Virotec ordinary shares. On the basis of the share price of Hydrodec at the close of business yesterday, this indicative offer would value each Virotec ordinary share at approximately 12p per share.

    Hydrodec also confirms that it has received indications of support for its indicative offer from shareholders in Virotec representing in aggregate approximately 29.25 per cent. of the issued share capital of Virotec. Accordingly, Hydrodec either owns as a result of its purchases of Virotec ordinary shares, or has indications of support from Virotec shareholders in respect of, in aggregate approximately 32.31 per cent. of the issued share capital of Virotec.

    Virotec holds 54.5 million shares of Hydrodec (approximately 28.1 per cent. of the ordinary share capital). The Board of Hydrodec considers that Virotec shareholders will benefit from the ownership of a direct interest in Hydrodec rather than the indirect interest they currently own. The combined group would further benefit from the cancellation of the Virotec royalty and any payments that may be due under the agreement.

    If the offer becomes unconditional, Hydrodec would seek to cancel the 54.5 million Hydrodec shares owned by Virotec. This would have the effect of reducing the issuance of new Hydrodec shares to less than 5 per cent. of the fully diluted share capital of Hydrodec assuming full take up of the offer.

    The Board of Hydrodec has now approached the Board of Virotec with a view to obtaining a recommendation. A further announcement will be made as soon as possible.
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