Wrap Text
FROM THE JSE SECURITIES EXO
Clinic Holdings Limited
Share code: CLC
ISIN Code : ZAE000001442
Network Healthcare Holdings Limited
Share code : NTC
ISIN Code : ZAE000011953
1. INTRODUCTION
Further to the cautionary announcement issued on 15 August 2001, Investec
Bank Limited ("Investec") is authorised to announce that agreement has been
reached between Netcare and Clinics in terms of which Netcare will extend an
offer, by means of a scheme of arrangement ("the scheme") in terms of
Section 311 of the Companies Act, 1973 (No 61 of 1973), as amended ("the
Act") to the shareholders of Clinics, excluding Netcare and its subsidiary
companies ("the scheme participants"), for the acquisition of all of their
Clinics shares for a consideration amounting to 170 Netcare shares for every
100 Clinics shares held ("the scheme consideration").
If any of the conditions precedent to the scheme as set out in paragraph 7
below ("the conditions precedent") are not fulfilled, the scheme
participants will be entitled to accept a substitute offer in respect of
their Clinics shares for the same consideration as the scheme consideration
("the substitute offer").
Currently, Netcare effectively owns 92,6% of the Clinics shares in issue,
after adjusting for the 3,2 million Clinics shares repurchased by a wholly-
owned subsidiary of Clinics in terms of a general authority.
2. RATIONALE FOR THE SCHEME
In the announcement of the unaudited interim results of Netcare and Clinics
for the six months ended 31 March 2001, published on 23 May 2001, ("the
interim results"), the directors of Netcare and Clinics announced their
intention to restructure Netcare and Clinics into one listed entity, the
effect of which will be to simplify the Netcare group structure.
In terms of the Listings Requirements of the JSE, the present shareholder
spread of Clinics is no longer appropriate for a listed company on the JSE.
Due to the inadequate shareholder spread, trading in Clinics shares on the
JSE has been characterised by poor liquidity. The JSE has given all listed
companies which do not meet the shareholder spread stipulated in the JSE
Listings Requirements, including Clinics, notice that the necessary
shareholder spread requirements must be met before 1 January 2002. Clinics
does not intend to issue further shares and, consequently, has reached
agreement with Netcare in terms of which Netcare will offer the scheme
participants the opportunity to convert their Clinics shares into Netcare
shares pursuant to which Clinics will be delisted from the JSE. Accordingly,
Netcare will propose the scheme to the scheme participants, for the
acquisition of their Clinics shares for the scheme consideration.
In the event that any of the conditions precedent are not fulfilled, the
substitute offer, in terms of which Netcare will acquire Clinics shares from
all those scheme participants who elect to accept the substitute offer, will
become operative.
Should the substitute offer be accepted in respect of 90% or more of the
Clinics shares held by scheme participants, Netcare will exercise its right
to invoke the provisions of Section 440K of the Act and the listing of
Clinics will terminate once the six week period as envisaged by Section 440K
has lapsed. Should the 90% threshold for acceptances of the substitute offer
not be received by and Section 440K not be invoked, it is unlikely that the
JSE will permit the continued listing of Clinics.
3.FINANCIAL EFFECTS
The table below sets out the financial effects of the scheme on a Clinics
shareholder and a Netcare shareholder, based on the published unaudited
interim results of Clinics and Netcare for the six months ended 31 March
2001:
100
Clinics
shares
before
the scheme 170
Netcare
shares
before
the scheme 170
Netcare
shares
after
the scheme Percentage
Change to
Clinics
Shareholder
(%) Percentage
change to
Netcare
shareholder
(%)
Attributable market value:
- 14 August 2001 (cents) (1)
35 000 34 170 - (2,4) -
- 30-day volume weighted average (cents) (2)
32 027 33 121 - 3,4 -
- 60-day volume weighted average (cents) (3)
29 409 31 802 - 8,1 -
- 29 August 2001(cents) (4)
35 000 36 210 - 3,5 -
Headline earnings (cents)
1 870 1 904 1 904 1,8 0.0
Attributable earnings (cents)
1 850 1 887 1 853 0,2 (1,8)
Attributable net asset value (cents)
21 210 21 896 22 709 7,1 3,7
Attributable tangible net asset value (cents)
20 170 21 140 21 150 4,9 0.0
Number of shares in issue before adjusting for relevant treasury shares
(million) 790,4 1 386,8 1 485,3
Number of shares in issue after adjusting for relevant treasury shares
(million)
787,2 1 328,3 1 426,8
Weighted average number of shares (million)
787,2 1 337,5 1 436,0
Notes:
(1) The closing market price of 100 Clinics shares (350 cents for one
Clinics share) and 170 Netcare shares (201 cents for one Netcare share) on
14 August 2001, being the trading day immediately preceding the publication
of the cautionary announcement.
(2) The volume weighted average traded price of 100 Clinics shares and 170
Netcare shares over the 30 trading days up to and including 14 August 2001.
(3) The volume weighted average traded price of 100 Clinics shares and 170
Netcare shares over the 60 trading days up to and including 14 August 2001.
(4) The closing market price of 100 Clinics shares (350 cents for one
Clinics share) and 170 Netcare shares (213 cents for one Netcare share) on
29 August 2001, being the last practicable trading day prior to the
publication of this announcement.
The financial effects have been prepared for illustrative purposes only and
have been based on the exchange ratio of 170 Netcare shares for every 100
Clinics shares held. The financial effects are based on the assumptions set
out below:
For the purpose of calculating attributable earnings and headline
earnings per share "after the scheme" it has been assumed that:
the scheme was in place with effect from 1 October 2000;
the weighted average number of Netcare shares "after the scheme"
has been increased by 98,5 million to reflect the issue of Netcare shares in
exchange for Clinics shares held by the scheme participants;
goodwill of R73,9 million arising from the scheme has been
amortised for the period in accordance with Netcare's stated accounting
policy;
the effects arising from the acquisition by Netcare of Medicross
Healthcare Group (Proprietary) Limited ("Medicross") and the additional 13%
interest in the Ampath Trust with effect from 1 April 2001, are not
considered material and have therefore been excluded; and
the respective portion of the Clinics profit attributable to scheme
participants has accrued to Netcare.
For the purpose of calculating attributable net asset value per
share and attributable net tangible asset value per share "after the scheme"
it has been assumed that:
the scheme was in place with effect from 31 March 2001;
the number of Netcare shares in issue "after the scheme" has been
increased by 98.5 million to reflect the issue of Netcare shares in exchange
for Clinics shares held by the scheme participants;
Netcare's outside shareholders' interest relating to Clinics "after
the scheme" has been reduced by R123,1 million to reflect Netcare's increase
in shareholding in Clinics following the scheme;
net asset values, both before and after the scheme, have been
adjusted for the acquisition by Netcare of Medicross for R128,5 million with
effect from 1 April 2001, using the audited figures of Medicross for the
year ended 31 December 2000;
attributable net asset value has been calculated by adding positive
goodwill to tangible net asset value; and
Netcare shares have been issued to scheme participants at 200 cents
per Netcare share.
4. OPINIONS AND RECOMMENDATIONS
The directors of Clinics have considered the terms of the scheme and are of
the unanimous opinion that they are fair and reasonable to scheme
participants. Accordingly, the board of directors of Clinics supports the
scheme and recommends that scheme participants who are entitled to vote
("scheme members") at the meeting of scheme members to be held to vote on
the scheme ("the scheme meeting"), vote in favour of the scheme. The
directors of Clinics who hold Clinics shares intend to vote in favour of the
scheme at the scheme meeting.
Investec, acting as independent adviser to the scheme participants, has
considered the terms and conditions of the scheme and is of the opinion that
they are fair and reasonable to the scheme participants. Investec has
advised the board of directors of Clinics accordingly.
5. IRREVOCABLE UNDERTAKINGS
Scheme members holding approximately 21 million Clinics shares have
undertaken to vote in favour of the scheme at the scheme meeting or to
accept the substitute offer if the conditions precedent are not fulfilled.
These undertakings represent approximately 36% of the total votes
exercisable by scheme members at the scheme meeting.
6. TERMINATION OF CLINICS LISTING ON THE JSE
Application will be made for the termination of Clinics' listing on the JSE
with effect from the operative date of the scheme. Full details of the
acceptance and surrender procedure of Clinics share certificates and other
documents of title will be contained in the scheme documentation, referred
to in paragraph 9 below.
7. CONDITIONS PRECEDENT
The scheme is conditional upon:
- the approvals, insofar as may be necessary, of the scheme documentation by
the JSE and the Securities Regulation Panel ("SRP");
- the approval of at least 75% of scheme members present or represented and
voting at the scheme meeting;
- the sanction of the scheme by the High Court of South Africa (Transvaal
Provincial Local Division); and
- registration of the Order of Court by the Registrar of Companies.
The above conditions precedent are to be fulfilled by not later than 29
October 2001. If any of the conditions precedent are not fulfilled, the
substitute offer will become operative.
8. STRATE
It was announced in the interim results that both Netcare and Clinics would
convert to the STRATE system on 27 August 2001.
Shareholders are advised that as a result of the scheme and the proposed
delisting of Clinics, Clinics will no longer be converted to the STRATE
system. In addition, the date for the conversion of Netcare to the STRATE
system has been postponed to 29 October 2001.
9. GENERAL
The scheme documentation is in the process of being prepared and will,
subject to the approval of the JSE and SRP, be mailed to Clinics
shareholders within 30 days of the date of this announcement (or, with the
consent of the JSE and the SRP, as soon as possible thereafter).
Further announcements, including the salient dates pertaining to the scheme,
will be published from time to time.
Sandton
31 August 2001
Merchant bank and adviser to Clinics
Investec Bank Limited
(Registration number 1969/004763/06)
Attorneys
HR Levin
Reporting accountants
Fisher Hoffman PKF
Lead sponsor to Netcare and Clinics
Smith Borkum Hare
Merrill Lynch South Africa (Pty) Ltd
Member of the JSE Securities Exchange South Africa
Registration No. 1995/01805/07
Co-sponsor to Clinics
Investec Securities Limited
Member of the JSE Securities Exchange South Africa
(Registration No. 1972/008905/06)
File name: NETCARE6.doc
Listed company name / s (the announcement CLINIC HOLDINGS
will be issued under these relevant JSE LIMITED
codes) REG.NO.1987/004106/06
NETWORK HEALTHCARE
HOLDINGS LIMITED
REG.NO.1996/008242/06
19.4 (a) Name and contact information of the BOBBY FAVISH
person authorised to confirm authenticity of 082 902 0000
the announcement. This person must be
available to clear the release of the
information through SENS (a second person
and their relevant information should also
be stated). The person given here (or their
alternate) will be contacted by the SENS
office upon their receipt of both the cover
page and the announcement/release to which
it relates.
(If the share alpha code of another company
is to be used, a contact name and telephone
number of the company concerned should also
be given to enable us to verify the
information.)
19 (Appen.) Flash headline of not more than PROPOSED SCHEME OF
70 characters (a space is also deemed to be ARRANGEMENT
a character) (this is not to be confused
with the heading that may already appear in
the main body of the announcement / release)
19.4 (d) State whether or not the YES
announcement price sensitive (failure to
complete this section will results in the
information being treated as "price
sensitive")
19.4 (c) Information relating to other SRP Excon Strate
regulatory approvals which are required for N/A N/A N/A
the announcement (where Strate approval is
required kindly ensure that a copy of the
announcement is forwarded to them)
19.4 (b) State whether or not dual listings NONE
are held and where the primary listing is
held and whether this will have an effect on
the timing of the release of the information
Special requests and reason for the special IMMEDIATE RELEASE
time of the release of the information. 30 AUGUST 2001
Where companies require the release of the
information to be held back until the market
has closed for trade, confirmation must be
given that the information will not be
released to any "third party", even under a
time embargo, while the JSE is open for
trade.
State the name of the corporate finance TUMI LETSEBE
officer of the JSE who approved the
announcement or the name and contact
information of the sponsoring broker through
whom approval will be obtained. Where the
information is provided in a press release
and the contents refer to disclosure that is
required in terms of the listings
requirements (formal announcement), the
press release may not be issued until the
formal disclosure has been made.
19.4 (e) Is confirmation of release through YES
SENS required '
Type of release (formal announcement / FORMAL ANNOUNCEMENT
voluntary disclosure / press release).
Company authorised to submit announcement to CITIGATE SOUTH AFRICA
SENS (where the listed company does not (PTY) LTD
supply the information directly to SENS)
CLINIC HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/004106/06)
("Clinics")
(Code: CLC)
(ISIN: ZAE000001442)
NETWORK HEALTHCARE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1996/008242/06)
("Netcare")
(Code: NTC)
(ISIN: ZAE000011953))
Proposed scheme of arrangement pursuant to which Clinics will be delisted
from the JSE Securities Exchange South Africa ("the JSE")
1. INTRODUCTION
Further to the cautionary announcement issued on 15 August 2001, Investec
Bank Limited ("Investec") is authorised to announce that agreement has been
reached between Netcare and Clinics in terms of which Netcare will extend an
offer, by means of a scheme of arrangement ("the scheme") in terms of
Section 311 of the Companies Act, 1973 (No 61 of 1973), as amended ("the
Act") to the shareholders of Clinics, excluding Netcare and its subsidiary
companies ("the scheme participants"), for the acquisition of all of their
Clinics shares for a consideration amounting to 170 Netcare shares for every
100 Clinics shares held ("the scheme consideration").
If any of the conditions precedent to the scheme as set out in paragraph 7
below ("the conditions precedent") are not fulfilled, the scheme
participants will be entitled to accept a substitute offer in respect of
their Clinics shares for the same consideration as the scheme consideration
("the substitute offer").
Currently, Netcare effectively owns 92,6% of the Clinics shares in issue,
after adjusting for the 3,2 million Clinics shares repurchased by a wholly-
owned subsidiary of Clinics in terms of a general authority.
2. RATIONALE FOR THE SCHEME
In the announcement of the unaudited interim results of Netcare and Clinics
for the six months ended 31 March 2001, published on 23 May 2001, ("the
interim results"), the directors of Netcare and Clinics announced their
intention to restructure Netcare and Clinics into one listed entity, the
effect of which will be to simplify the Netcare group structure.
In terms of the Listings Requirements of the JSE, the present shareholder
spread of Clinics is no longer appropriate for a listed company on the JSE.
Due to the inadequate shareholder spread, trading in Clinics shares on the
JSE has been characterised by poor liquidity. The JSE has given all listed
companies which do not meet the shareholder spread stipulated in the JSE
Listings Requirements, including Clinics, notice that the necessary
shareholder spread requirements must be met before 1 January 2002. Clinics
does not intend to issue further shares and, consequently, has reached
agreement with Netcare in terms of which Netcare will offer the scheme
participants the opportunity to convert their Clinics shares into Netcare
shares pursuant to which Clinics will be delisted from the JSE. Accordingly,
Netcare will propose the scheme to the scheme participants, for the
acquisition of their Clinics shares for the scheme consideration.
In the event that any of the conditions precedent are not fulfilled, the
substitute offer, in terms of which Netcare will acquire Clinics shares from
all those scheme participants who elect to accept the substitute offer, will
become operative.
Should the substitute offer be accepted in respect of 90% or more of the
Clinics shares held by scheme participants, Netcare will exercise its right
to invoke the provisions of Section 440K of the Act and the listing of
Clinics will terminate once the six week period as envisaged by Section 440K
has lapsed. Should the 90% threshold for acceptances of the substitute offer
not be received by and Section 440K not be invoked, it is unlikely that the
JSE will permit the continued listing of Clinics.
3.FINANCIAL EFFECTS
The table below sets out the financial effects of the scheme on a Clinics
shareholder and a Netcare shareholder, based on the published unaudited
interim results of Clinics and Netcare for the six months ended 31 March
2001:
100 170 170 Percentage Percentage
Clinics Netcare Netcare Change to change to
shares shares shares Clinics Netcare
before before after Shareholder shareholder
the scheme the scheme the scheme (%) (%)
Attributable
market
value:
14 August 35 000 34 170 - (2,4) -
2001 (cents)
(1)
30-day 32 027 33 121 - 3,4 -
volume
weighted
average
(cents) (2)
60-day 29 409 31 802 - 8,1 -
volume
weighted
average
(cents) (3)
29 August 35 000 36 210 - 3,5 -
2001(cents)
(4)
Headline 1 870 1 904 1 904 1,8 0.0
earnings
(cents)
Attributable 1 850 1 887 1 853 0,2 (1,8)
earnings
(cents)
Attributable 21 210 21 896 22 709 7,1 3,7
net asset
value
(cents)
Attributable 20 170 21 140 21 150 4,9 0.0
tangible net
asset value
(cents)
Number of 790,4 1 386,8 1 485,3
shares in
issue before
adjusting
for relevant
treasury
shares
(million)
Number of 787,2 1 328,3 1 426,8
shares in
issue after
adjusting
for relevant
treasury
shares
(million)
Weighted 787,2 1 337,5 1 436,0
average
number of
shares
(million)
Notes:
The closing market price of 100 Clinics shares (350 cents for one Clinics
share) and 170 Netcare shares (201 cents for one Netcare share) on 14 August
2001, being the trading day immediately preceding the publication of the
cautionary announcement.
The volume weighted average traded price of 100 Clinics shares and 170
Netcare shares over the 30 trading days up to and including 14 August 2001.
The volume weighted average traded price of 100 Clinics shares and 170
Netcare shares over the 60 trading days up to and including 14 August 2001.
The closing market price of 100 Clinics shares (350 cents for one Clinics
share) and 170 Netcare shares (213 cents for one Netcare share) on 29 August
2001, being the last practicable trading day prior to the publication of
this announcement.
The financial effects have been prepared for illustrative purposes only and
have been based on the exchange ratio of 170 Netcare shares for every 100
Clinics shares held. The financial effects are based on the assumptions set
out below:
For the purpose of calculating attributable earnings and headline earnings
per share "after the scheme" it has been assumed that:
the scheme was in place with effect from 1 October 2000;
the weighted average number of Netcare shares "after the scheme" has been
increased by 98,5 million to reflect the issue of Netcare shares in exchange
for Clinics shares held by the scheme participants;
goodwill of R73,9 million arising from the scheme has been amortised for the
period in accordance with Netcare's stated accounting policy;
the effects arising from the acquisition by Netcare of Medicross Healthcare
Group (Proprietary) Limited ("Medicross") and the additional 13% interest in
the Ampath Trust with effect from 1 April 2001, are not considered material
and have therefore been excluded; and
the respective portion of the Clinics profit attributable to scheme
participants has accrued to Netcare.
For the purpose of calculating attributable net asset value per share and
attributable net tangible asset value per share "after the scheme" it has
been assumed that:
the scheme was in place with effect from 31 March 2001;
the number of Netcare shares in issue "after the scheme" has been increased
by 98.5 million to reflect the issue of Netcare shares in exchange for
Clinics shares held by the scheme participants;
Netcare's outside shareholders' interest relating to Clinics "after the
scheme" has been reduced by R123,1 million to reflect Netcare's increase in
shareholding in Clinics following the scheme;
net asset values, both before and after the scheme, have been adjusted for
the acquisition by Netcare of Medicross for R128,5 million with effect from
1 April 2001, using the audited figures of Medicross for the year ended 31
December 2000;
attributable net asset value has been calculated by adding positive goodwill
to tangible net asset value; and
Netcare shares have been issued to scheme participants at 200 cents per
Netcare share.
4. OPINIONS AND RECOMMENDATIONS
The directors of Clinics have considered the terms of the scheme and are of
the unanimous opinion that they are fair and reasonable to scheme
participants. Accordingly, the board of directors of Clinics supports the
scheme and recommends that scheme participants who are entitled to vote
("scheme members") at the meeting of scheme members to be held to vote on
the scheme ("the scheme meeting"), vote in favour of the scheme. The
directors of Clinics who hold Clinics shares intend to vote in favour of the
scheme at the scheme meeting.
Investec, acting as independent adviser to the scheme participants, has
considered the terms and conditions of the scheme and is of the opinion that
they are fair and reasonable to the scheme participants. Investec has
advised the board of directors of Clinics accordingly.
5. IRREVOCABLE UNDERTAKINGS
Scheme members holding approximately 21 million Clinics shares have
undertaken to vote in favour of the scheme at the scheme meeting or to
accept the substitute offer if the conditions precedent are not fulfilled.
These undertakings represent approximately 36% of the total votes
exercisable by scheme members at the scheme meeting.
6. TERMINATION OF CLINICS LISTING ON THE JSE
Application will be made for the termination of Clinics' listing on the JSE
with effect from the operative date of the scheme. Full details of the
acceptance and surrender procedure of Clinics share certificates and other
documents of title will be contained in the scheme documentation, referred
to in paragraph 9 below.
7. CONDITIONS PRECEDENT
The scheme is conditional upon:
- the approvals, insofar as may be necessary, of the scheme documentation by
the JSE and the Securities Regulation Panel ("SRP");
- the approval of at least 75% of scheme members present or represented and
voting at the scheme meeting;
- the sanction of the scheme by the High Court of South Africa (Transvaal
Provincial Local Division); and
- registration of the Order of Court by the Registrar of Companies.
The above conditions precedent are to be fulfilled by not later than 29
October 2001. If any of the conditions precedent are not fulfilled, the
substitute offer will become operative.
8. STRATE
It was announced in the interim results that both Netcare and Clinics would
convert to the STRATE system on 27 August 2001.
Shareholders are advised that as a result of the scheme and the proposed
delisting of Clinics, Clinics will no longer be converted to the STRATE
system. In addition, the date for the conversion of Netcare to the STRATE
system has been postponed to 29 October 2001.
9. GENERAL
The scheme documentation is in the process of being prepared and will,
subject to the approval of the JSE and SRP, be mailed to Clinics
shareholders within 30 days of the date of this announcement (or, with the
consent of the JSE and the SRP, as soon as possible thereafter).
Further announcements, including the salient dates pertaining to the scheme,
will be published from time to time.
Sandton
31 August 2001
Merchant bank and adviser to Clinics
Investec Bank Limited
(Registration number 1969/004763/06)
Attorneys
HR Levin
Reporting accountants
Fisher Hoffman PKF
Lead sponsor to Netcare and Clinics
Smith Borkum Hare
Merrill Lynch South Africa (Pty) Ltd
Member of the JSE Securities Exchange South Africa
Registration No. 1995/01805/07
Co-sponsor to Clinics
Investec Securities Limited
Member of the JSE Securities Exchange South Africa
(Registration No. 1972/008905/06)
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