NETCARE/CLINICS - ACQUISITION OF THE PRETORIA EAST HOSPITAL GROUP

NETWORK HEALTHCARE HOLDINGS LIMITED
(REGISTRATION NUMBER 96/08242/06)
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
("NETCARE")
CLINIC HOLDINGS LIMITED
(REGISTRATION NUMBER 87/04106/06)
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
("CLINICS")
(COLLECTIVELY "THE NETCARE GROUP")
ACQUISITION OF THE PRETORIA EAST HOSPITAL GROUP
1. INTRODUCTION

RAND MERCHANT BANK LIMITED IS AUTHORISED TO ANNOUNCE THAT THE NETCARE GROUP HAS
ACQUIRED THE ENTIRE ISSUED SHARE CAPITAL OF AND SHAREHOLDERS' CLAIMS AGAINST
THE COMPANIES COMPRISING THE PRETORIA EAST HOSPITAL GROUP ("PRETORIA EAST")
WITH EFFECT FROM 1 APRIL 1998 ("THE ACQUISITION").
2. RATIONALE FOR THE ACQUISITION

THE ACQUISITION OF PRETORIA EAST RESULTS IN THE ENHANCEMENT OF THE NETCARE
GROUP'S PORTFOLIO OF HOSPITALS BY ADDING TO THE PORTFOLIO'S CRITICAL MASS AND
GEOGRAPHIC DIVERSITY. THE ACQUISITION TIES IN WITH THE NETCARE GROUP'S STRATEGY
OF PURSUING INDUSTRY RATIONALISATION IN ORDER TO DELIVER ECONOMIC AND
AFFORDABLE HEALTHCARE AND HOSPITAL SERVICES.

DEMOGRAPHIC CHANGES IN THE PRETORIA REGION HAS RESULTED IN A SHIFT TOWARDS THE
EAST OF PRETORIA AND THE ACQUISITION REPRESENTS AN EXCELLENT AND STRATEGIC
ADDITION OF THE NETCARE GROUP'S HOSPITAL NETWORK IN A PRIME LOCATION.

ADDITIONAL POSITIVE FACTORS ARE THE NATURE OF PRETORIA EAST'S SPECIALISED
FACILITIES AND ITS HIGH OCCUPANCY LEVELS, BUT MORE PARTICULARLY THE EXCEPTIONAL
RANGE OF SUPPORTING MEDICAL SPECIALISTS.
3. SALIENT TERMS OF THE ACQUISITION

THE AGGREGATE PURCHASE CONSIDERATION FOR PRETORIA EAST AMOUNTS TO APPROXIMATELY
R43M, MADE UP AS FOLLOWS:

- A CASH CONSIDERATION OF APPROXIMATELY R23M ("THE CASH CONSIDERATION"); AND
- CLINICS SHARES TO AN APPROXIMATE VALUE OF R20M ("CLINICS CONSIDERATION
SHARES").

THE FINAL VALUE OF SHARES TO BE ISSUED WILL BE INCREASED OR DECREASED ON A
FORMULA BASIS ONCE THE LEVEL OF PROFITS ATTAINED FOR THE YEAR ENDING 31 MARCH
1999 HAS BEEN DETERMINED.
THE ACQUISITION WILL BE EFFECTED AS FOLLOWS:

- CLINICS WILL ACQUIRE PRETORIA EAST IN EXCHANGE FOR THE CASH CONSIDERATION AND
THE ISSUE OF THE CLINICS CONSIDERATION SHARES (ISSUED IN RENOUNCEABLE FORM) AT
AN ISSUE PRICE OF 260 CENTS PER CLINICS SHARES; AND

- THE CLINICS SHARES WILL BE AUTOMATICALLY RENOUNCED IN FAVOUR OF NETCARE IN
CONSIDERATION FOR THE ISSUE, TO THE PRETORIA EAST VENDORS, OF NETCARE SHARES
(THE "NETCARE CONSIDERATION SHARES") AT AN ISSUE PRICE OF 200 CENTS PER NETCARE
SHARE.

APPLICATION TO THE JOHANNESBURG STOCK EXCHANGE FOR A LISTING OF THE RESULTING
CLINICS AND NETCARE CONSIDERATION SHARES WILL BE MADE IN DUE COURSE.
4. WARRANTIES

THE VENDORS OF PRETORIA EAST HAVE PROVIDED WARRANTIES AND INDEMNITIES NORMALLY
ASSOCIATED WITH A TRANSACTION OF THIS NATURE.
5. FINANCIAL EFFECTS

THE ACQUISITION REPRESENTS LESS THAN 5% OF THE MARKET VALUES OF NETCARE AND
CLINICS AND WILL HAVE A POSITIVE BUT NOT MATERIAL IMPACT ON THE EARNINGS AND
NET ASSET VALUE OF SUCH COMPANIES.
SANDTON
1 SEPTEMBER 1998
RAND MERCHANT BANK LIMITED
ATTORNEYS
H R LEVIN
SPONSORING BROKERS
MERRILL LYNCH
SMITH BORKUM HARE
SMITH BORKUM HARE (PTY) LTD
MEMBER OF THE JOHANNESBURG STOCK EXCHANGE
REGISTRATION NUMBER 95/01805/07