Apiam Animal Health Limited (AHX.AX) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to the Apiam Animal Health Scheme meeting. My name is Andrew Vizard, and I am the Non-Executive Chairman of Apiam Board of Directors and the Chair of this meeting. I am pleased to be with you today to chair this important meeting, which relates to the scheme of arrangement under which all of the issued shares in Apiam are proposed to be acquired by Pepper Bidco Proprietary Limited, a wholly owned subsidiary of Pepper Holdco Limited. Pepper Holdco Limited is controlled by Adamantem Capital Fund II, which is managed and advised by Adamantem Capital Management Proprietary Limited. I will refer to Pepper Co. Bidco Proprietary Limited during this meeting as Adamantem. This morning, we are holding a Scheme meeting of Apiam shareholders to consider and vote on the Scheme. As it is now just past 11:00 a.m. Melbourne time, and I'm advised that the necessary quorum is present, I declare the Scheme meeting open. We are conducting this Scheme meeting as a hybrid meeting today, meaning it is being held both physically and virtually. I'm conducting the meeting from the offices of Herbert Smith Freehills Krame in Melbourne, Australia, and shareholders are attending here in-person and also participating online. For those joining via the online meeting platform, it allows shareholders, proxy holders and corporate representatives to participate in the meeting online. Shareholders, proxy holders and corporate representatives will have the ability to ask questions orally or typed and to submit votes in real time. Whilst logged into the meeting platform, you can also access the Notice of Scheme Meeting and Scheme booklet by selecting the documents icon. The Notice of Scheme Meeting and Scheme Booklet, which also contains the independent expert report prepared by Kroll was released to the ASX on the 12th of December 2025 and dispatched to shareholders on the 19th of December. I will take these documents as read. At this meeting, Apiam shareholders are being asked to vote on a proposed scheme of arrangements under which Adamantem would acquire all of the shares in Apiam and Apiam would become wholly owned by Adamantem. I will now introduce the Apiam Board members as well as members of Apiam's senior management team that are here with us today. Seated here with me in Melbourne today is Mr. Bruce Dixon, our Interim Managing Director; Mr. Richard Dennis, a Non-Executive Director. We've got Ms. Natalie Climo, our Company Secretary. We also have Ms. Vita Pepe and Ms. Evonne Collier, both nonexecutive directors, and they are in attendance via audiovisual link. We also have representatives from our legal advisers, Herbert Smith Freehills Kramer and corporate advisers, Luminis Partners in attendance. Today's meeting will commence with an address from me, and we will then proceed to the vote on the Scheme resolution, where there will be an opportunity to ask questions. Before I commence my address, I will set out the details of the meeting and its operation. Firstly, how to vote. As set out in the Notice of Scheme Meeting, voting on today's resolution will be by poll with votes lodged in person and online. On that basis, I now declare the poll open, and we'll keep the poll open so you can vote at any time during the meeting. Following discussion on the resolution, proxy votes, which have been cast on the resolution will be displayed on the screen. Only eligible shareholders or a validly appointed corporate representative or attorney for an eligible shareholder or a proxy for an eligible shareholder are entitled to vote. Any directed proxies that are not voted will automatically default to me as Chair. And I am required to vote these proxies as directed. Any proxies that are open and available Chair of the meeting will be voted in favor of the resolution. Those voting today in-person need to have obtained their voting card available to you when you registered. Shareholders or proxies in the room with green voting cards or blue nonvoting cards are welcome to ask questions. If you are eligible to vote at this meeting and are present in the room, you can mark your voting intention on the reverse side of the voting card and return your completed card to a boardroom representative as you leave the meeting. If you have difficulty completing your voting card, please raise your hand and a representative will help you. If you are participating in the meeting online and have logged into the online platform, a voting icon will soon be displayed on the left-hand side of your device screen if it hasn't already. If it has yet to appear, please refresh your screen. Once you click this voting icon, the resolution will appear on your screen and you can select your voting option. To cast your vote, select one of the options to register your vote. Your selected option will change color. You can submit or change your vote during the meeting up until I declare the poll closed, which will be at the end of question time. Please submit your vote at any time from now until voting closes. Josh Zucchiatti from Boardroom is returning officer for the purposes of conducting and determining the results of the poll, the results of which will be announced to the ASX later today. Now how to ask questions. The notice of the Scheme Meeting, which is attached to the Scheme booklet, provides shareholders with information on how to participate, ask questions and vote at the Scheme Meeting. For those of you attending the meeting here today in person, once we come to question time, you can ask a question by raising your hand, showing your admission card and providing your name and suburb. Only green voting and blue nonvoting card holders can ask questions. For those attending online, questions can be submitted through the online meeting platform at any time from now until the time at which voting on the Scheme resolution is closed. To ask a question, select the messaging icon and type your question into an Ask-a-Question box and press the send button. Select messages to view your submitted messages along with any written responses. Please note that questions may be moderated to avoid repetition and questions, if particularly lengthy, may need to be summarized in the interest of time. Depending on the question asked, I will either answer it myself or ask another of the Apiam directors or members of the senior management or our advisers here today to respond as appropriate. I may take questions on notice if necessary. I ask that shareholders restrict themselves to no more than two questions or comments, and I encourage you to submit your questions as soon as you can. If despite the plans and contingencies you made, we have technology issues during the Scheme and the online meeting platform is not available to operate, I will advise at that time how the meeting will proceed, taking into consideration a number of shareholders that may be impacted and the extent to which participation in the business of the meeting is affected. Turning now to the details of the Scheme. On 18th of August, Apiam announced that following a period of engagement with Adamantem, it had received a nonbinding indicative proposal from Adamantem to acquire 100% of the issued shares in Apiam. On the 22nd of October, Apiam announced that it had entered into a binding Scheme implementation deed with Adamantem, under which Adamantem proposes to acquire 100% of the shares on issue in Apiam. The proposed Scheme of arrangement is outlined in detail in the Scheme booklet, which I referred to earlier. If the Scheme proceeds, each Apiam shareholder is entitled to the Scheme consideration of $0.87 cash for each Apiam's share held by them on the record date for the Scheme as adjusted for any special dividend. As an alternative to the all-cash consideration, eligible shareholders had the option to elect to receive all scrip consideration or a combination of cash and scrip in Pepper Co. Holdco, the holding company of Pepper Bidco. Further details of the scrip alternatives are set out in the Scheme booklet. The record date for the Scheme is currently expected to be 7:00 p.m. on the 18th of February. As set out in the ASX announcement released yesterday, the Apiam directors intend to determine to pay a fully franked special dividend of $0.10 cash per Apiam share, subject to the Scheme being effective and to the Apiam Board considering that franking credits attached to the special dividend will be available to Apiam shareholders. The Scheme booklet sets out various reasons why Apiam shareholders may wish to vote in favor of the Scheme and various reasons why they may wish to vote against the Scheme. These are set out in details in Section 1 of the Scheme booklet. The Scheme booklet contains further information including details regarding the risks associated with the Scheme as well as the risks associated with shareholders' continued investment in Apiam. The Apiam Independent Board Committee appointed Kroll Australia as the independent expert to assess the merits of the Scheme. The independent expert has concluded that on the basis of all of the all-cash consideration only, the Scheme is fair and reasonable and in the best interest of Apiam shareholders in the absence of a superior proposal. The independent expert's full commentary in relation to the Scheme is contained in the independent expert's report, which is included in the Scheme booklet. The Apiam Independent Board Committee unanimously recommend that you vote in favor of the Scheme in the absence of a superior proposal and subject to the independent expert continuing to conclude that the Scheme is in the best interest of Apiam shareholders. Subject to the same qualifications, each of Bruce Dixon and Vita Pepe, the other directors also recommend Apiam shareholders vote in favor of the Scheme. Prior to the Scheme meeting, each Apiam director has instructed that any of the Apiam shares held or controlled by them be voted in favor of the Scheme in the absence of a superior proposal and subject to the independent expert continuing to conclude that the Scheme is in the best interest of Apiam shareholders. The interest of Apiam directors in Apiam shares are set out in Sections 9.1, 9.4 and 9.5 of the Scheme booklet. You should have regard to these interest when considering how to vote on the Scheme. I can also confirm that as at the time of this meeting as of now, no superior proposal has emerged and the Apiam directors are not aware of any superior proposal that is likely to emerge. As announced by Apiam to the ASX, Adamantem received further approval for the transaction on the 12th of January. The implementation of the Scheme remains subject to the following conditions precedent. Firstly, an approval of the Scheme resolution by Apiam shareholders at the Scheme meeting today by the requisite majorities, which will be determined today. And secondly, approval of the Scheme by the Supreme Court of New South Wales at the hearing scheduled for this Friday, 6th of February. The Scheme is also subject to other customary conditions precedent, which are described in detail in the Scheme booklet, noting that the Scheme is not subject to any financing or due diligence considerations. At the time of today's meeting, the Apiam directors are not aware of any circumstances which would cause any of the other outstanding conditions not to be satisfied or waived if applicable. Now if the Scheme is approved by the court of the second court hearing scheduled for this Friday, the effective date and the last trading date in Apiam shares on the ASX is expected to be this Friday, the 6th of February. If the Scheme is approved, it is then expected to be implemented on the 23rd of February. Should the Scheme be approved, Apiam shareholders will receive the Scheme consideration for their Apiam shares. If the outstanding conditions precedent, including shareholder and court approval are not satisfied, the Scheme will not proceed, and Apiam will continue to be listed on the ASX. We will now move to the formal business of the meeting. We have one item of business to be considered today, namely the following resolution as set out in the notice of the Scheme Meeting, including in the Scheme booklet. I better read it out. That, pursuant to and in accordance with the provisions of Section 411 of the Corporations Act, the Scheme of arrangements proposed between Apiam Animal Health Limited and the holders of its ordinary shares other than excluded shareholders, the terms of which are contained in and more particularly described in the Scheme booklet, of which the notice convening this meeting forms part, is agreed to with or without amendments, alterations or conditions made or required by the Supreme Court of New South Wales to which Apiam Animal Health Limited and Pepper Holdco Limited agree in writing. For the Scheme to proceed, votes in favor of the Scheme resolution must be received from the requisite majorities of Apiam shareholders. As explained in the Scheme booklet, the requisite majorities for the Scheme resolution are as follows: firstly, a majority in number that is more than 50% of Apiam shareholders who are present or voting either in proxy or by proxy or in the case of corporate shareholders by corporate representatives. And secondly, at least 75% of the total number of votes cast on the resolution to approve the Scheme by Apiam shareholders who are present and voting either in person or by proxy or in the case of corporate shareholders by corporate representatives. We now move to questions. I will now ask shareholders, proxy holders, representatives whether they have any questions regarding the Scheme resolution. For those who have joined online, you may submit a question online at any time during the meeting until the end of the question-and-answer section of the meeting. I now ask shareholders in the room who may wish to ask a question to raise their hand and the admission card. We will start with questions from the room, then move to online written questions in the order that they are submitted, including questions submitted prior to the Scheme meeting. For those shareholders who have joined via the online meeting platform, you are able to submit your questions now if you haven't already done so. Firstly, are there any questions from the floor? If not, I'm now going to ask our Company Secretary, are there any questions written or otherwise?

Yes. There are two questions from [ Mr. Mayne ] The first question, have or will any of the directors be paid additional exertion payments?

If you can speak up? Sorry.

Yes, sure. Have or will any of the directors be paid additional exertion payments for their hard work on the Scheme? Or will they pay monthly fees as was reported in the last report up until the deal closes?

The answer to that is as described in the Scheme booklet, there were additional exertion fees to directors, which amounted to, I believe, to -- for me as Chair, I think a total of a little under $40,000. And for the other directors who are part of the interim Board -- not the interim Board, the IBC, I think their additional exertion fees were of the order of perhaps $20,000.

$28,000.

Sorry. $28,000.

And that is all disclosed in Section 9.

And that is all disclosed in the Scheme booklet.

Okay. Next question also from Mr. Mayne. Thank you for disclosing the proxies on the ASX. Well done on receiving strong support. And the question is, how many shareholders were eligible to vote? And what sort of solicitation campaign did we run to get out the retail vote?

Well, I'm -- perhaps the Corporate Secretary can tell me how many voters we've got in total. I can't tell you off memory.

Maybe Josh.

137 million.

Voters. I'm not sure how many we've got in total.

And also, are there any voting shareholders in the room today?

Yes, there are. There are quite a few. But the answer to -- what was the second part of the question? We'll just get the answer to that.

How many shareholders were eligible to vote?

Not sure on that. We'll find out.

And what campaign did the company run to get the vote.

We ran a campaign, which was -- we had a group who were employed to phone as many retail. And I think they actually -- and also there was a phone number you could call up as a retail if you wanted explicit questions about it. I know that they -- at least the top 50 shareholders were all individually contacted, but I think they went further than that as well with contacting retail services. And I know they did receive quite a number of questions from the entire shareholding beyond the top 50.

All right. Well, while we're waiting for that information, there is a third question from Mr. Mayne.

I'll take it.

The question is, why is a Bendigo-based company running a Scheme meeting in Melbourne running this Scheme through the New South Wales Supreme Court?

We chose Melbourne to give better access to our shareholders. We've had previously had issues with people saying it's difficult for them as shareholders to come to Bendigo. So we actually purposely chose Melbourne as preferred because it was easier for most shareholders to attend because actually most of them are Melbourne-based. And the New South Wales Court was the under -- just under instruction from our lawyers.

There is still a question on total.

Total shareholders of -- eligible shareholders.

Total eligible shareholders is 1,555 shareholders.

1,155 shareholders, the total number of eligible shareholders. Thank you.

That's all the questions for now.

Thank you. Are there any more questions? If there are no more questions, I will now display the proxies for the resolution received prior to the meeting and as shown on the slide displayed. There were 135,750,114 votes in favor from 181 Apiam shareholders. 2,084,128 votes undirected from 30 Apiam shareholders, noting I will vote undirected votes given to myself as Chair in favor of the resolution and 90,409 votes against from 9 Apiam shareholders. Ladies and gentlemen, that concludes the resolution and the business of the Scheme meeting. I now ask that for those of you in the room here today, if you haven't already completed your voting cards to please do so. Representatives of Boardroom are available in the room to collect your all voting cards. For those who have joined online, please finalize your online votes now. If there is anybody who hasn't yet finalized and submitted their vote, I don't think so. I'll thank everyone, and I will now close the online voting system and formally close voting. The upcoming second court hearing scheduled for this Friday marks a crucial final step for the Scheme process. While the official voting results remain subject to the conduct and conclusion of the poll, it is highly encouraging to close today's meeting with such strong shareholder engagement. I sincerely thank all shareholders for their valuable support. The final poll results will be released to the ASX when they are available, which is expected to be later today. On behalf of all directors and senior management at Apiam, I would like to sincerely thank our shareholders for their support for Apiam over the many years. I now declare the Scheme Meeting of Apiam closed, subject to the conduct and conclusion of the poll. Thank you.