ASPEN - DISPOSAL OF LAGAP PHARMACEUTICALS LIMITED

ASPEN HEALTHCARE HOLDINGS LIMITED
(FORMERLY MEDHOLD LIMITED)
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 85/02395/06)
("ASPEN")

DISPOSAL OF LAGAP PHARMACEUTICALS LIMITED ("LAGAP")
1.  INTRODUCTION

FURTHER TO THE CAUTIONARY ANNOUNCEMENT PUBLISHED IN THE PRESS ON 22 SEPTEMBER
1999, INVESTEC BANK LIMITED IS AUTHORISED TO ANNOUNCE THAT AGREEMENT HAS BEEN
FINALISED IN TERMS OF WHICH, SUBJECT TO THE FULFILMENT OF THE CONDITIONS
PRECEDENT SET OUT IN PARAGRAPH 6 BELOW, ASPEN WILL DISPOSE OF S.A. DRUGGISTS
INTERNATIONAL LIMITED, A COMPANY INCORPORATED IN THE UNITED KINGDOM AND WHICH
OWNS 100% OF LAGAP AND CERTAIN OTHER SUBSIDIARIES ("THE DISPOSAL"), TO ADCOCK
INGRAM LIMITED ("ADCOCK").
2.  RATIONALE FOR THE DISPOSAL

AS SET OUT IN THE CIRCULAR TO SHAREHOLDERS DATED 23 APRIL 1999, ASPEN ACQUIRED
THE PHARMACEUTICAL BUSINESS OF SOUTH AFRICAN DRUGGISTS LIMITED WITH EFFECT FROM
1 MARCH 1999 ("THE SAD ACQUISITION"). IN ADDITION, SHAREHOLDERS WERE ADVISED
THAT ASPEN WAS CONSIDERING THE DISPOSAL, IN THE SHORT TERM, OF CERTAIN OF THE
NON-CORE BUSINESSES ACQUIRED IN TERMS OF THE SAD ACQUISITION IN ORDER TO REDUCE
THE AMOUNT OF DEBT USED TO FINANCE THE SAD ACQUISITION. THE DISPOSAL IS
CONSISTENT WITH ASPEN'S STRATEGY OF DISPOSING OF SUCH NON-CORE BUSINESSES.
3.  NATURE OF BUSINESS OF LAGAP

LAGAP IS A MARKETING AND DISTRIBUTION COMPANY OPERATING IN THE GENERIC PRODUCTS
MARKET IN THE UNITED KINGDOM. ALL PRODUCTS SOLD ARE MANUFACTURED BY THIRD
PARTIES OR SUB-CONTRACTED MANUFACTURERS. LAGAP OWNS PRODUCT TRADEMARKS AND
LICENCES AND ALSO SELLS OUTLICENSED PRODUCTS. 53% OF SALES ARE MADE DIRECTLY TO
RETAIL PHARMACIES WHEREAS MOST OTHER GENERIC COMPANIES ONLY SELL THROUGH
WHOLESALERS.
4.  TERMS OF THE DISPOSAL

THE TOTAL CONSIDERATION, PAYABLE IN CASH, IN RESPECT OF THE DISPOSAL IS R310
MILLION ("THE DISPOSAL CONSIDERATION"). THE DISPOSAL CONSIDERATION WILL BE USED
BY THE ASPEN GROUP TO REDUCE THE DEBT WHICH AROSE PURSUANT TO THE SAD
ACQUISITION.

THE EFFECTIVE DATE OF THE DISPOSAL IS 1 OCTOBER 1999.
5.  WARRANTIES AND INDEMNITIES

THE DISPOSAL INCLUDES THE NORMAL WARRANTIES AND INDEMNITIES IN RESPECT OF A
TRANSACTION OF THIS NATURE.
6.  CONDITIONS PRECEDENT

THE DISPOSAL IS CONDITIONAL UPON, INTER ALIA, THE APPROVAL OF THE SOUTH AFRICAN
RESERVE BANK BY NO LATER THAN 31 DECEMBER 1999.
7.  FINANCIAL EFFECTS

THE TABLE BELOW SETS OUT THE PRO FORMA FINANCIAL EFFECTS OF THE DISPOSAL ON THE
EARNINGS AND NET ASSET VALUE PER ASPEN SHARE ON THE FOLLOWING ASSUMPTIONS:
- THE EARNINGS AND NET ASSET VALUE IN THE "BEFORE" COLUMN ARE BASED ON THE
EARNINGS FOR THE YEAR ENDED 30 JUNE 1999 AND NET ASSET VALUE AT 30 JUNE 1999;
- THE EARNINGS IN THE "AFTER" COLUMN ARE BASED ON THE ASSUMPTION THAT THE
DISPOSAL HAD BEEN EFFECTED ON 1 MARCH 1999 AND THAT THE DISPOSAL CONSIDERATION
HAD BEEN USED TO REDUCE DEBT AT AN AVERAGE INTEREST RATE OF 15,5% AND A TAX
RATE OF 30% FOR THE SAME PERIOD; AND

- THE NET ASSET VALUE ASSUMES THAT THE DISPOSAL HAD BEEN CONCLUDED ON 30 JUNE
1999.
                              PRO FORMA
                    BEFORE    AFTER       INCREASE
PER ASPEN SHARE     (CENTS)   (CENTS)     (%)
EARNINGS            19,2      22,0        14,6
HEADLINE EARNINGS   19,5      22,3        14,3
NET ASSET VALUE     50,3      50,3        -
DURBAN
25 OCTOBER 1999
MERCHANT BANK
INVESTEC CORPORATE FINANCE
INVESTEC BANK LIMITED
(REGISTRATION NUMBER 69/04763/06)
ATTORNEYS
WERKSMANS ATTORNEYS
ATTORNEYS TO ADCOCK
RABIN, VAN DEN BERG & PELKOWITZ
MALLINICKS ATTORNEYS
SPONSORING BROKER
INVESTEC SECURITIES LIMITED
MEMBER OF THE JOHANNESBURG STOCK EXCHANGE
REGISTRATION NO. 72/08905/06