| Tue 30 Nov 2004, 15:13 | | Agreement reached between Afrox, Bidco and Medi-Cl |
|
Afrox Healthcare: Agreement reached between Afrox, Bidco and Medi-Clinic
relating to proposed merger
Afrox Healthcare Limited Business Venture Investments No. 790
(Incorporated in the Republic of (Proprietary) Limited
South Africa) (Incorporated in the Republic of South
(Registration number: Africa)
1985/001313/06) (Registration number: 2003/002733/07)
Share code: AHH (`Bidco`)
ISIN: ZAE000022059
(`Ahealth`)
African Oxygen Limited Medi-Clinic Corporation Limited
(Incorporated in the Republic of (Incorporated in the Republic of South
South Africa) Africa)
(Registration number 1927/000089/06) (Registration number: 1983/010725/06)
JSE Share code: AFX Share code: MDC
NSX Share code: AOX ISIN: ZAE000004370
ISIN: ZAE000030920 (`Medi-Clinic`)
(`Afrox`)
JOINT ANNOUNCEMENT BY AHEALTH, BIDCO, AFROX AND MEDI-CLINIC ON AGREEMENT REACHED
RELATING TO THE PROPOSED MERGER BETWEEN AHEALTH AND BIDCO
Shareholders are referred to the proposed merger between Ahealth and Bidco (a
company jointly controlled by Brimstone Investment Corporation Limited
(`Brimstone`) and Mvelaphanda Strategic Investments (Pty) Ltd (`Mvelaphanda`),
and in which Medi-Clinic holds a 25% shareholding) by way of a scheme of
arrangement in terms of Section 311 of the Companies Act, 1973 (`the scheme`).
Shareholders of Afrox are further referred to the Category 3 announcement of
Afrox to be published simultaneously with the publication of this joint
announcement.
Shareholders are advised that for purposes of facilitating this important black
economic empowerment (`BEE`) transaction in the South African private hospital
industry, Afrox, Brimstone, Mvelaphanda, Bidco and Medi-Clinic have reached
agreement on 30 November 2004 on the manner in which the proposed merger should
proceed (`the agreement`).
Background
Medi-Clinic participated in the formation of Bidco, which intended that
meaningful BEE could be facilitated in the South African private hospital sector
if the sale of Ahealth took place in two separate transactions: the acquisition
of Ahealth by Bidco and the subsequent purchase of some of the Ahealth hospitals
from Bidco by Medi-Clinic, to balance commercial and BEE goals with acceptable
financial risk.
New funding options now being pursued by Bidco, will, if successful, enable
Bidco and its BEE shareholders to acquire Ahealth without the financial backing
of Medi-Clinic. Given the new funding options now being pursued and Medi-
Clinic`s wish to further the cause of BEE, the parties have agreed that Medi-
Clinic will enable the BEE companies in Bidco (Brimstone and Mvelaphanda) to
pursue the acquisition of Ahealth without any Medi-Clinic participation.
Terms of the Agreement
In terms of the agreement -
Medi-Clinic disposed of its 25% shareholding in Bidco to Afrox, with immediate
effect;
the shareholders agreement between Brimstone, Mvelaphanda and Medi-Clinic in
respect of Bidco has been cancelled, with immediate effect, and has been
replaced by a shareholders agreement in respect of Bidco between Brimstone,
Mvelaphanda and Afrox;
the disposal agreement in terms of which Medi-Clinic was to acquire a number of
Ahealth hospitals from Bidco after the implementation of the proposed merger has
been cancelled, with immediate effect;
Medi-Clinic shall on the operative date of the proposed merger be paid an amount
of R50 million in consideration for the cancellation of the aforementioned two
agreements; and
Bidco refunded all of Medi-Clinic`s transaction costs to date.
Afrox, Ahealth and Bidco have further extended the date for fulfilment of the
suspensive condition of the scheme that the Competition Tribunal approves the
proposed merger (`the Competition Condition`) from 31 December 2004 to 23
January 2005. If by 23 January 2005 Afrox, Bidco, Brimstone and Mvelaphanda have
procured the release of Medi-Clinic from its guarantee to ABSA Bank Limited, and
by virtue thereof ABSA Bank Limited has agreed to such extension, the date for
fulfilment of the Competition Condition will automatically be extended to 31
March 2005 in order for the Competition Tribunal hearing to be resumed and
finalised. If by 23 January 2005 the release of Medi-Clinic from its guarantee
to ABSA Bank Limited has not been procured, the scheme shall lapse in terms of
its tenor.
Afrox, Brimstone, Mvelaphanda and Bidco are working towards procuring the
release of Medi-Clinic from its guarantee to ABSA Bank Limited and the
replacement of it with permanent funding for the transaction by 23 January 2005.
Johannesburg
30 November 2004
Sponsor to Afrox Sponsor to Medi-Clinic
Barnard Jacobs Mellet Rand Merchant Bank
Corporate Finance
Sponsor to Ahealth
Nedbank Capital
