Wrap Text
Recommended combination of Mediclinic International Limited and Al Noor Hospitals Group plc
Mediclinic International Limited
(Incorporated in the Republic of South Africa)
Registration number 1983/010725/06
Share Code: MDC
ISIN: ZAE000074142
Al Noor Hospitals Group Plc
(Incoporated in England and Wales)
Company Number 8338604
Share Code: ANH
ISIN: GB00B8HX8Z88
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO
ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION.
THE FOLLOWING ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS OR
PROSPECTUS EQUIVALENT DOCUMENT AND INVESTORS SHOULD NOT MAKE ANY
INVESTMENT DECISION IN RELATION TO AL NOOR SHARES EXCEPT ON THE BASIS OF
THE INFORMATION IN THE AL NOOR CIRCULAR AND PROSPECTUSES, AND THE
MEDICLINIC CIRCULAR, THAT ARE PROPOSED TO BE PUBLISHED IN DUE COURSE.
14 October 2015
RECOMMENDED COMBINATION OF
AL NOOR HOSPITALS GROUP PLC
("Al Noor")
and
MEDICLINIC INTERNATIONAL LIMITED
("Mediclinic")
Further to the announcements made by Al Noor and Mediclinic on 5 October 2015 and 6 October 2015
respectively, in relation to their discussions regarding a possible combination of the two
companies, the board of Al Noor and the independent board of Mediclinic are pleased to announce
that they have reached agreement on the terms of a recommended combination of their respective
businesses (the "Combination").
KEY HIGHLIGHTS
- Creation of a leading international private healthcare group with deep operational
expertise and a well-balanced geographic profile in Southern Africa, Switzerland and the
United Arab Emirates ("UAE"), as well as exposure to the UK market through a minority stake in
Spire Healthcare Group plc.
- Al Noor, as enlarged by the acquisition of Mediclinic (the "Enlarged Group"), will on a
revenue basis be the third largest private healthcare provider in South Africa, the largest in
the UAE and the largest private medical network in Switzerland.
The Enlarged Group had pro-forma revenue of USD4 billion for the fiscal period 2014/15,
comprising 46% from Switzerland, 31% from South Africa and 23% from the UAE(1).
- The Enlarged Group will operate 73 hospitals with around 10,200 beds and 35 clinics, and
will have nearly 32,000 employees.
- The Combination is to be implemented by:
- Al Noor acquiring Mediclinic pursuant to a South African scheme of arrangement,
under which Mediclinic shareholders will receive 0.62500 new Al Noor shares for
each Mediclinic share held(2) as well as the Mediclinic interim dividend expected to
be paid in December 2015; and
- Al Noor shareholders:
- receiving a special dividend of GBP3.28 per Al Noor share; and
- having the opportunity to tender their shares to Al Noor for cancellation for a
cash payment of GBP8.32 per Al Noor share (subject to scale back if more
than 74,069,109 Al Noor shares are tendered).
- An existing Al Noor shareholder that tenders its shares (and assuming no scale-back
under the tender offer) will receive cash of GBP11.60 per Al Noor Share, which represents
a premium of approximately 39% to the closing price of GBP8.35 per Al Noor share on 1 October 2015(3).
- The Combination will result in Mediclinic shareholders owning 84% to 93% of the Enlarged
Group, depending on take-up by existing Al Noor shareholders under the tender offer and
before the subscription by Remgro for new Al Noor shares (described below) to part-fund
the tender offer.
- The cash payments to existing Al Noor shareholders in respect of the special dividend and
tender offer will be partly funded through (i) a subscription by Remgro Limited or its wholly-
owned subsidiary for 72,115,384 new Al Noor shares at a fixed price of
GBP8.32 per share, to raise proceeds of GBP600 million; and (ii) a loan facility of up to
GBP400 million.
- Mediclinic expects the Combination to be earnings neutral to Mediclinic shareholders in
the first full year of consolidation and accretive thereafter.(4)
- On completion, Al Noor will be renamed "Mediclinic International plc" and the Enlarged
Group will have a premium listing on the Main Market of the London Stock Exchange, as
well as an inward secondary listing on the Main Board of the Johannesburg Stock
Exchange and, possibly, on the Namibian Stock Exchange.
- The board of the Enlarged Group will comprise a majority of independent non-executive
directors. Two directors from the board of Al Noor, Ian Tyler and Seamus Keating, will be
on the board of the Enlarged Group, which will also include existing directors of Mediclinic.
The Chairman will be Edwin Hertzog (currently Chairman of Mediclinic) and the Senior
Independent Director will be Ian Tyler (currently Chairman of Al Noor). The CEO of the
Enlarged Group will be Danie Meintjes and the CFO will be Craig Tingle.
- Mediclinic and Al Noor have obtained irrevocable undertakings from Sheikh
Mohammed Bin Butti Al Hamed and Dr Kassem Alom (as shareholders of Al Noor), to vote
in favour of the resolutions required to approve and implement the Combination (including
the special dividend and the tender offer). Dr Kassem Alom is also a non-executive
director of Al Noor. These irrevocable undertakings cover 34.3% of Al Noor's outstanding
shares as at 13 October 2015. Irrevocable undertakings have also been obtained from the
directors of Mediclinic who hold Mediclinic shares, and from Remgro, to vote in favour of
the resolutions required to approve and implement the Combination. These irrevocable
undertakings cover 42.6% of Mediclinic's outstanding shares as at 13 October 2015.
These irrevocable undertakings remain binding if a competing proposal is made to either
Al Noor or Mediclinic, but cease to be binding from the date on which the Combination
lapses or is withdrawn in accordance with its terms.
(1) Mediclinic revenue based on fiscal period ended 31 March 2015. Al Noor revenue based on fiscal period ended 31 December 2014.
(2) This ratio has been determined on the basis of the volume-weighted average trading price ("VWAP") of Al Noor Shares
on the LSE and Mediclinic Shares on the JSE for the five trading days ending on and including 1 October 2015. The
volume-weighted average trading prices (in GBP) have been calculated with reference to the volume-
weighted average trading prices as reported by Factset and Capital IQ.
(3) 1 October 2015 is the last day of the period used to calculate the VWAP of Al Noor Shares and Mediclinic Shares,
respectively.
(4) This statement is not intended as a profit forecast or estimate for any period nor should be interpreted to mean
that earnings per share or headline earnings per share for the current or future financial years would necessarily match
or exceed the historical published earnings per share or headline earnings per share.
Commenting on the proposed Combination, Danie Meintjes, CEO of Mediclinic, said:
"We are delighted to announce a combination of Mediclinic and Al Noor to create the leader in the
important growth market of the UAE. Al Noor's strong brand and delivery of high-quality patient
care aligns closely with Mediclinic's premium service offering, and its success is reflected in its
strong financial track record of sustained growth. The combined business represents a unique
platform from which to pursue numerous expansion opportunities in the high-growth UAE and
wider Middle East healthcare market, reinforcing our commitment to providing investment to drive
the delivery of world class healthcare services in the region. The Combination also further
diversifies Mediclinic's geographic profile internationally, gives us additional exposure to USD-
based high-growth earnings, and generates incremental financial and trading benefits through a
listing on the LSE."
Commenting on the proposed Combination, Ronald Lavater, CEO of Al Noor, said:
"The companies make a compelling strategic fit, in terms of complementary geographies and a
shared commitment to providing outstanding patient care. As one of the world's largest acute
hospital operators outside the United States, this will be a platform for further growth and delivery
of world class service, benefiting all our stakeholders, from the communities we serve, to our
talented employees and our investors. In the key growth market of the UAE, the combined
company will be the largest private healthcare provider in the country (by revenue), giving patients
access points in most major urban centres. We have an excellent opportunity to leverage this
strength to expand coverage and service delivery, responding to burgeoning demand for world
class healthcare."
The Combination will be subject to the conditions set out in this announcement (including
its appendices) and to the full terms and conditions that will be set out in the shareholder
circulars to be published by Al Noor and Mediclinic, respectively, in due course. It is
currently expected that, subject to the satisfaction or waiver of the conditions, the
shareholder meetings will be held in December 2015 and the Combination will complete
during the first quarter of 2016.
These highlights should be read in conjunction with, and are subject to, the full text of this
announcement (including its appendices). A copy of this announcement will be available, subject to
certain restrictions relating to persons resident in restricted jurisdictions, at
www.alnoorhospital.com and www.mediclinic.com. The content of these websites is not
incorporated into and does not form part of this announcement.
Analyst and investor presentations
An interview with Ron Lavater, CEO of Al Noor, and Danie Meintjes, CEO of Mediclinic, is available
in video, audio and text format at: www.alnoorhospital.com and www.mediclinic.com and
www.mediclinicalnoor.com.
A live teleconference/webcast of a presentation for analysts and investors will be available on
www.alnoorhospital.com and www.mediclinic.com at 09h00 GMT today. An archived version of the
webcast and slides will also be made available.
UK & International: +44 (0) 1452 560 304
South Africa: 0800 982 995
Conference ID: 60700556
Replay facility
UK & International: +44 (0) 1452 550 000
Conference ID: 60700556
Enquiries
Al Noor
Dr. Sami Alom (CSO): +971 2 406 6992
Mediclinic
Danie Meintjes (CEO) +27 (0)21 809 6500
Craig Tingle (CFO)
Rothschild (lead financial adviser and co-sponsor to Al Noor)
Robert Leitão +44 (0)20 7280 5000
Hedley Goldberg
Chris Hawley
Goldman Sachs International (co-financial adviser and corporate broker to Al Noor)
Ben Thorpe +44 (0)20 7774 1000
Nimesh Khiroya
Rainer Lenhard
Jefferies (corporate broker and co-sponsor to Al Noor)
Paul Nicholls +44 (0)20 7029 8000
Henry Elphick
Morgan Stanley (financial adviser to Mediclinic)
Matthew Jarman +44 (0) 20 7425 8000
Gergely Voros
Risana Zitha
Rand Merchant Bank (financial adviser and sponsor to Mediclinic, financial adviser and
sponsor to Remgro)
Paul Roelofse +27 (0)82 379 9337
Brunswick Group LLP (communications advisers for the Combination)
Jon Coles/Craig Breheny +44 20 7404 5959
(London)
Rupert Young/Dominic Whiting +971 4 446 6270
(UAE)
Nic Bennett/Ammerance Kidson +27 11 502 7300
(South Africa)
Linklaters LLP is advising Al Noor on matters of English law and US law. Webber Wentzel is advising
Al Noor on matters of South African law. Slaughter and May is advising Mediclinic and Remgro on matters
of English law, Cliffe Dekker Hofmeyr is advising Mediclinic and Remgro on matters of South African law
and Cravath, Swaine & Moore LLP is advising Mediclinic and Remgro on matters of US law.
N M Rothschild & Sons Limited ("Rothschild"), which is authorised by the Prudential Regulation
Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority
in the United Kingdom, is acting as co-sponsor and lead financial adviser to Al Noor in connection
with the potential transaction referred to in this announcement. Rothschild is acting exclusively for
Al Noor and no-one else in connection with the potential transaction and save for any
responsibilities and liabilities, if any, which may be imposed on Rothschild, in its capacity as
sponsor by the Financial Services and Markets Act 2000, as amended, Rothschild will not be
responsible to anyone other than Al Noor for providing the protections afforded to clients of
Rothschild or for providing advice in relation to the potential transaction or the contents of this
announcement or any transaction, arrangement or matter referred to herein.
Goldman Sachs International, which is authorised by the Prudential Regulation Authority and
regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United
Kingdom, is acting for Al Noor and no-one else in connection with the potential transaction referred
to in this announcement and will not be responsible to anyone other than Al Noor for providing the
protections afforded to clients of Goldman Sachs International nor for providing advice in relation
to the potential transaction. Neither Goldman Sachs International nor any of its subsidiaries,
branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether
direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a
client of Goldman Sachs International in connection with the potential transaction or the contents
of this announcement or any transaction, arrangement or matter referred to herein.
Jefferies International Limited ("Jefferies"), which is authorised and regulated by the Financial
Conduct Authority in the United Kingdom, is acting as joint sponsor and joint corporate broker and
provided financial advice to Al Noor in connection with the potential transaction referred to in this
announcement. Jefferies is acting exclusively for Al Noor and no-one else in connection with the
potential transaction and save for any responsibilities and liabilities, if any, which may be imposed
on Jefferies, in its capacity as sponsor by the Financial Services and Markets Act 2000, as
amended, Jefferies will not be responsible to anyone other than Al Noor for providing the
protections afforded to clients of Jefferies or for providing advice in relation to the potential
transaction or the contents of this announcement or any transaction, arrangement or matter
referred to herein.
Rand Merchant Bank, a division of FirstRand Bank Limited ("RMB") is acting as co-financial
adviser to Remgro and Mediclinic and no one else in connection with the matters referred to in this
announcement. In connection with such matters, RMB, its affiliates and its and their respective
directors, officers, employees and agents will not regard any other person as their client, nor will
they be responsible to any other person other than Remgro and Mediclinic for providing the
protections afforded to their clients or for providing advice in connection with the contents of this
announcement or any other matter referred to herein.
Morgan Stanley & Co. International plc ("Morgan Stanley"), which is authorised by the Prudential
Regulation Authority and regulated by the Financial Conduct Authority and the Prudential
Regulation Authority in the United Kingdom, is acting as co-financial adviser to Mediclinic and no
one else in connection with the transaction referred to in this announcement. In connection with
such matters, Morgan Stanley, its affiliates (including without limitation Morgan Stanley South
Africa (Proprietary) Limited) and its and their respective directors, officers, employees and agents
will not regard any other person as their client, nor will they be responsible to any other person for
providing the protections afforded to their clients or for providing advice in connection with the
transaction, the contents of this announcement or any other matter referred to herein.
Overseas jurisdictions
The release, publication or distribution of this announcement in jurisdictions other than the United
Kingdom and South Africa may be restricted by law and therefore any persons who are subject to
the laws of any jurisdiction other than the United Kingdom or South Africa should inform
themselves about, and observe, any applicable requirements. In particular, the ability of persons
who are not resident in the United Kingdom or South Africa to vote their Mediclinic Shares with
respect to the Mediclinic Scheme at the general meeting of Mediclinic, or to execute and deliver
forms of proxy appointing another to vote at that meeting on their behalf, may be affected by the
laws of the relevant jurisdictions in which they are located. This announcement has been prepared
for the purpose of complying with law and regulation in the United Kingdom and South Africa and
the information disclosed may not be the same as that which would have been disclosed if this
announcement had been prepared in accordance with the laws of jurisdictions other than the
United Kingdom and South Africa. Unless otherwise determined by Al Noor and Mediclinic, or
required and permitted by applicable law and regulation, the Combination will not be made
available, directly or indirectly, in, into or from any jurisdiction where local laws or regulations may
result in a significant risk of civil, regulatory or criminal exposure if information concerning the
Combination is sent or made available to Mediclinic shareholders in that jurisdiction (a "Restricted
Jurisdiction") and no person may vote in favour of the Combination by any such use, means,
instrumentality or form within a Restricted Jurisdiction. Accordingly, copies of this announcement
and any formal documentation relating to the Combination are not being, and must not be, directly
or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted
Jurisdiction and persons receiving such documents (including custodians, nominees and trustees)
must not mail or otherwise forward, distribute or send them in, into or from any Restricted
Jurisdiction.
The availability of new Al Noor Shares under the Combination to Mediclinic shareholders who are
not resident in the United Kingdom or South Africa may be affected by the laws of the relevant
jurisdictions in which they are resident. Persons who are not resident in the United Kingdom or
South Africa should inform themselves of, and observe, any applicable legal or regulatory
requirements. Further details in relation to Mediclinic shareholders in overseas jurisdictions will be
contained in the circular to be posted to Mediclinic shareholders in due course.
Additional US information
These materials are not for distribution, directly or indirectly, in or into the United States (including
its territories and possessions, any State of the United States and the District of Columbia). These
materials do not constitute or form a part of any offer or solicitation to purchase or subscribe for
securities in the United States or any other jurisdiction where such offer or sale would be unlawful.
The new Al Noor Shares that may be received in the Combination have not been, and will not be,
registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or
with any securities regulatory authority of any state or other jurisdiction in the United States, and
may only be offered or sold in reliance on the exemption from the registration requirements of the
Securities Act provided by Rule 802 or another exemption available under the Securities Act, or
the Combination may be structured in a manner such that it is not subject to the registration
requirements of the Securities Act.
This business combination is made for the securities of Mediclinic, a South African company, by
means of the Combination. Information distributed in connection with the Combination is subject to
disclosure requirements of the United Kingdom and South Africa that are different from those of
the United States. The financial information contained in this announcement has been prepared in
accordance with IFRS that may not be comparable to the financial statements and financial
information of United States companies.
It may be difficult for you to enforce your rights and any claim you may have arising under US
federal securities laws, since Al Noor is located in the United Kingdom, and some of its officers
and directors are residents of countries outside the United States. You may not be able to sue a
UK company or its officers or directors in an English court for violations of US securities laws. It
may be difficult to compel a UK company and its affiliates to subject themselves to a US court's judgement.
You should be aware that Al Noor may purchase securities otherwise than under the Combination,
such as in open market or privately negotiated purchases.
Mediclinic shareholders who are affiliates of Al Noor after the Combination will be subject to timing,
manner of sale and volume restrictions on the sale of new Al Noor Shares received pursuant to the
Combination under Rule 144 under the Securities Act. For the purposes of the Securities Act, an
"affiliate" of a company is any person that directly or indirectly controls, or is controlled by, or is
under common control with, the company. Holders of Mediclinic Shares that constitute "restricted
securities" for purposes of Rule 144 under the Securities Act will receive new Al Noor Shares that
also constitute restricted securities and will not be permitted to offer or resell in the United States
the new Al Noor Shares they receive without registering that offer or sale under the Securities Act
or conducting that offer or resale in reliance on an exemption from registration. The Securities Act
would not generally restrict sale of new Al Noor Shares on the London Stock Exchange, provided
that the sale had not been pre-arranged with a buyer in the United States. Shareholders who
believe they may be affiliates for the purposes of the Securities Act should consult their own legal
advisers.
Cautionary note regarding forward-looking statements
This announcement contains certain forward-looking statements with respect to the financial
condition, results of operations and businesses of Al Noor and Mediclinic and their respective
groups, and certain plans and objectives of Al Noor with respect to the Enlarged Group. All
statements other than statements of historical fact are, or may be deemed to be, forward-looking
statements. Forward-looking statements are statements of future expectations that are based on
management's current expectations and assumptions and involve known and unknown risks and
uncertainties that could cause actual results, performance or events to differ materially from those
expressed or implied in these statements. Forward-looking statements include, among other
things, statements concerning the potential exposure of Al Noor, Mediclinic and the Enlarged
Group to market risks and statements expressing management's expectations, beliefs, estimates,
forecasts, projections and assumptions, including as to future potential cost savings, synergies,
earnings, cash flow, return on average capital employed, production and prospects. These
forward-looking statements are identified by their use of terms and phrases such as "anticipate",
"believe", "could", "estimate", "expect", "goals", "intend", "may", "objectives", "outlook ", "plan",
"probably", "project", "risks", "seek", "should", "target", "will" and similar terms and phrases.
There are a number of factors that could affect the future operations of Al Noor, Mediclinic and the
Enlarged Group and that could cause results to differ materially from those expressed in the
forward-looking statements included in this announcement.
All forward-looking statements contained in this announcement are expressly qualified in their
entirety by the cautionary statements contained or referred to in this section. Readers should not
place undue reliance on forward-looking statements.
For a discussion of important factors which could cause actual results to differ from forward-
looking statements relating to Mediclinic and its group or Al Noor and its group, refer to Mediclinic's
Annual Report and Accounts for the year ended 31 March 2015 or Al Noor's Annual Report and
Accounts for the year ended 31 December 2014, as applicable.
Each forward-looking statement speaks only as of the date of this announcement. Neither Al Noor
nor Mediclinic undertakes any obligation to publicly update or revise any forward-looking statement
as a result of new information, future events or otherwise, except to the extent legally required. In
light of these risks, results could differ materially from those stated, implied or inferred from the
forward-looking statements contained in this announcement.
Rounding
Certain figures included in this announcement have been subjected to rounding adjustments.
Accordingly, figures shown for the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures
that precede them.
No forecasts or estimates
No statement in this announcement is intended as a profit forecast or estimate for any period and
no statement in this announcement should be interpreted to mean that revenue, earnings,
earnings per share, headline earnings per share, net asset value per share or tangible net asset
value per share for Al Noor, Mediclinic or the Enlarged Group, as appropriate, for the current or
future financial years would necessarily match or exceed the historical published revenue,
earnings, earnings per share, headline earnings per share, net asset value per share or tangible
net asset value per share for Al Noor or Mediclinic, as appropriate.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO
ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION.
THE FOLLOWING ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS OR
PROSPECTUS EQUIVALENT DOCUMENT AND INVESTORS SHOULD NOT MAKE ANY
INVESTMENT DECISION IN RELATION TO AL NOOR SHARES EXCEPT ON THE BASIS OF
THE INFORMATION IN THE AL NOOR CIRCULAR AND PROSPECTUSES, AND THE
MEDICLINIC CIRCULAR, THAT ARE PROPOSED TO BE PUBLISHED IN DUE COURSE.
14 October 2015
RECOMMENDED COMBINATION OF
AL NOOR HOSPITALS GROUP PLC
("Al Noor")
and
MEDICLINIC INTERNATIONAL LIMITED
("Mediclinic")
Further to the announcements made by Al Noor and Mediclinic on 5 October 2015 and 6 October
2015, respectively, in relation to their discussions regarding a possible combination of the two
companies, the board of Al Noor ("Al Noor Board") and the independent board of Mediclinic
("Mediclinic Board") are pleased to announce that they have reached agreement on the terms of
a recommended combination of their respective businesses (the "Combination").
1. Principal terms of the Combination
Mediclinic
To effect the Combination, which will be subject to the approval of Al Noor shareholders and
Mediclinic shareholders and to the other conditions summarised below, and to the full terms and
conditions which will be set out in detail in the shareholder circular to be published by Mediclinic in
due course, Al Noor will acquire all of the shares in Mediclinic pursuant to a scheme of
arrangement of Mediclinic under section 114 of the South African Companies Act No. 71 of 2008
(the "SA Companies Act") (the "Mediclinic Scheme").
Under the terms of the Mediclinic Scheme, which will be governed by South African law, Mediclinic
shareholders on the register on the relevant record date will be entitled to receive:
for each Mediclinic Share 0.62500 new Al Noor Shares
This ratio has been determined on the basis of the volume-weighted average trading price of Al
Noor ordinary shares ("Al Noor Shares") on the LSE and Mediclinic shares ("Mediclinic Shares")
on the JSE for the five trading days ending on and including 1 October 2015. The volume-
weighted average trading prices have been calculated with reference to the volume-weighted
average trading prices (in GBP) as reported by Factset and Capital IQ.
Under the terms of the Mediclinic Scheme, participating Mediclinic shareholders will be entitled to
elect either:
- for their Mediclinic Shares to be repurchased, in consideration of which Mediclinic will be
obliged to pay to the shareholder, in respect of each Mediclinic Share repurchased, a sum
equal to the ZAR equivalent value of 0.62500 Al Noor Shares as at the effective date of
the Mediclinic Scheme, on the basis that the Mediclinic shareholder's right to payment will
be ceded to Al Noor in settlement of an obligation assumed by that shareholder under the
Mediclinic Scheme to subscribe for 0.62500 new Al Noor Shares in respect of each
Mediclinic Share repurchased (the "Repurchase Option"); or
- for their Mediclinic Shares to be transferred to Al Noor, in consideration of the allotment
and issue to them of 0.62500 new Al Noor Shares in respect of each Mediclinic Share
transferred (the "Exchange Option").
The Repurchase Option will be the default position for all Mediclinic shareholders who are South
African incorporated companies that do not make an election, while the Exchange Option will be
the default position for all other Mediclinic shareholders that do not make an election.
The record date for determining the entitlement of Mediclinic shareholders to participate in the
Mediclinic Scheme will be determined and announced in due course, but will be shortly before the
Mediclinic Scheme becomes effective, which is expected to be in the first quarter of 2016.
Mediclinic shareholders will retain the interim dividend expected to be paid in December 2015.
Al Noor
Under the terms of the Combination:
- existing Al Noor shareholders will be entitled to receive a special dividend of GBP3.28 per
Al Noor Share held by them on the record date (described below), conditional on
completion of the Mediclinic Scheme (the "Special Dividend"); and
- existing Al Noor shareholders will also be provided with an opportunity to tender their
shares to Al Noor for cancellation, for a cash payment of GBP8.32 per Al Noor Share(the
"Tender Offer"), conditional on completion of the Mediclinic Scheme and on the High
Court of Justice of England and Wales (the "Court") confirming the associated reduction of
capital of Al Noor. To the extent that more than 74,069,109 Al Noor Shares are tendered
(being approximately 63% of Al Noor's outstanding shares as at 13 October 2015), tenders
will be scaled back.
The Special Dividend will be paid on all existing Al Noor Shares, including any that have been
tendered pursuant to the Tender Offer.
The record date for determining the entitlement of existing Al Noor shareholders to receive the
Special Dividend and to participate in the Tender Offer will be shortly before the date on which the
Mediclinic Scheme becomes effective. Accordingly, Mediclinic shareholders will not be entitled to
receive the Special Dividend or to participate in the Tender Offer in respect of any new Al Noor
Shares to be issued to them pursuant to the Mediclinic Scheme.
Therefore, conditional on completion of the Mediclinic Scheme (and, in the case of the Tender
Offer, on the Court confirming the associated reduction of capital), Al Noor shareholders will be
entitled to receive:
for each existing Al Noor Share GBP3.28 by way of the Special Dividend
plus, optionally
GBP8.32 if tendered pursuant to the Tender Offer
(subject to any scale-back)
If an existing Al Noor shareholder tenders its shares (and assuming no scale-back under the
Tender Offer), the cash payment of GBP8.32 per share under the Tender Offer, together with the
Special Dividend of GBP3.28 per share, values Al Noor's shares at GBP11.60 per share,
representing a premium of approximately:
- 39% to the closing price of GBP8.35 per Al Noor Share on 1 October 2015;(5) and
- 102% to the IPO issuance price of GBP5.75 per Al Noor Share on 26 June 2013.
(5) 1 October 2015 is the last day of the period used to calculate the VWAP of Al Noor Shares and Mediclinic Shares,
respectively.
It is a term of the Combination, and shall be a term of the Mediclinic Scheme, that if any dividend,
distribution or return of value has been declared, announced, made or paid at any time by Al Noor
after the date of this announcement (except for the Special Dividend and the Tender Offer),
Al Noor shall be required to reduce the aggregate amount of the Special
Dividend by an amount equal to the aggregate amount of such dividend, distribution or return of
value (if applicable, based on the spot rate of exchange at the time of such declaration,
announcement, making or payment).
Ownership of the Enlarged Group and stock exchange listings
The Combination will result in Mediclinic shareholders (including Remgro in its capacity as an
existing Mediclinic shareholder, but before taking into account the equity subscription referred to in
paragraph 8 below) owning between 84% and 93% of the Enlarged Group, dependent on take-up
by existing Al Noor shareholders under the Tender Offer. After the equity subscription, Remgro's
holding will be between 41% and 45%.
Given the relative sizes of Al Noor and Mediclinic, the Combination will be classified as a reverse
takeover of Al Noor under the Listing Rules of the UK Financial Conduct Authority ("FCA"). The
Enlarged Group will retain its premium listing on the LSE and will have an inward secondary listing
on the JSE and, possibly, the Namibian Stock Exchange. The Enlarged Group is also expected to
qualify for inclusion in the FTSE 100 index. Al Noor is expected to remain tax resident in the UK.
2. Background to and rationale for the Combination
The Boards of Mediclinic and Al Noor recognise the strong strategic merit in the Combination, with
an excellent strategic fit between their operations in the UAE and also through the creation of a
leading international private healthcare operator with a well-balanced geographic profile.
Creation of the leading UAE platform
The Enlarged Group will be the largest private healthcare provider in the UAE (by revenue), with
excellent relationships with key stakeholders. There is a strong strategic fit and the regional
operations of the two businesses are complementary, given Mediclinic's concentration at the high
end of the acuity/quality curve and Al Noor's focus on high-value patients, as well as respective
strengths in the Dubai and Abu Dhabi healthcare markets.
Strong financial track record in the UAE
Al Noor has demonstrated a strong track record of growth in revenue and in earnings before
interest, taxation depreciation and amortisation ("EBITDA"), with FY2010-14 compound annual
growth rates ("CAGRs") of 16.8% and 18.6% respectively, and EBITDA margins consistently
above 20%. This has been driven by the broadening of its service offering, disciplined cost
management and the successful execution of attractive growth opportunities. Al Noor is
continuously pursuing expansion of its capacity and network as evidenced by the launch of a new
hospital, Civic Centre Hospital (40 beds in Al Ain, UAE), and the addition of 28 beds in its existing
Al Ain Hospital, and six new medical centres across the UAE, all expected within Q4 2015 and H1 2016.
Significant growth opportunities to be exploited in the Middle East/Gulf region
Given substantial unmet medical needs in the Middle East, private healthcare delivery remains
one of the fastest growing sectors due to a rapidly ageing demographic, an increasing incidence of
lifestyle-related medical conditions such as diabetes and obesity, service gaps in the current
healthcare market and growth in private health insurance. Given this, there is significant potential
for the Enlarged Group to capitalise on the attractive growth opportunities in the region and deploy
further capital, by way of both organic and inorganic investment.
Significant cost synergy potential
Following preliminary analysis undertaken by Al Noor and Mediclinic, there are opportunities for
potential cost synergies to be exploited for the UAE businesses, given the complementary nature
of the operations and the ability to leverage the scale of the Enlarged Group. Potential synergies
are expected to be achieved primarily from procurement benefits from greater scale, creating a
shared operations team in the UAE, the combination of existing corporate functions and the
transfer of knowledge and best practices across the Enlarged Group.
Further diversification of earnings for the Enlarged Group
The Enlarged Group will be a leading international private healthcare provider with deep
operational expertise and a well-balanced geographic profile in Southern Africa, Switzerland and
the UAE, with exposure to the UK market through a minority stake in Spire Healthcare Group plc
("Spire"). The Combination will enhance the Enlarged Group's geographic diversity and its
positioning towards growth markets, with the UAE representing 23% of the Enlarged Group's pro
forma revenues. The Combination is also expected to provide the Enlarged Group with additional
USD-based, high-growth earnings.
Incremental financial and trading benefits from premium listing on the LSE together with
listing on the JSE
The Enlarged Group would benefit from a premium listing on the Main Market of the LSE and
expected inclusion in the FTSE 100 index, together with an inward secondary listing on the Main
Board of the JSE and, possibly, the Namibian Stock Exchange. The Al Noor Board and the
Mediclinic Board believe that this will provide incremental advantages to the Enlarged Group
through increased liquidity and greater access to a global investor base, and a likely reduction in the
Enlarged Group's cost of capital.
3. Information on Al Noor
Al Noor is the largest private integrated healthcare provider in the Emirate of Abu Dhabi with
growing presence in other Emirates and Oman. Founded in 1985, Al Noor has 30 years of
successful growth reinforcing the Group's leading position in its core market, the Emirate of Abu
Dhabi. It provides services across the broad spectrum of primary and secondary services, and
continues to expand into selective tertiary care.
Al Noor currently operates through a network of three hospitals with 306 operating beds, 21 free-
standing medical centres and an oncology centre (Gulf International Cancer Centre ("GICC"))
serving as a platform for the company-wide oncology service line. Al Noor's network recorded
around 2.0m outpatient visits in 2014. The expansion of Al Noor's network is continuously pursued
as evidenced by the launch of a new hospital, Civic Centre Hospital (40 beds in Al Ain (UAE)), and
the addition of 28 beds in its existing Al Ain Hospital, and six new medical centres across the UAE,
all expected within Q4 2015 and H1 2016. The acquisition of Rochester Wellness (expected to
complete in Q1 2016) also reinforces Al Noor's growing presence in Dubai and Oman, and
broadens its service offering. Al Noor's group employs a highly-skilled workforce of more than
4,000 employees including 684 physicians best suited to cater to Al Noor's core populations (over
75% of the physicians are Arabic speakers, serving mainly Emirati and enhanced-coverage
patients). Al Noor was the first private hospital in Abu Dhabi City to obtain Joint Commission
International accreditation, and today all of its hospitals are accredited and ISO 9001:2008 certified.
Al Noor is listed on the LSE and had a market capitalisation of GBP976 million as of 1 October 2015.
4. Information on Mediclinic
Mediclinic, founded in 1983, is an international private healthcare group with operations in South
Africa, Namibia, Switzerland and the UAE, and an investment in UK private healthcare through a
29.9% interest in LSE-listed Spire Healthcare Group plc. Mediclinic has been listed on
the JSE since 1986. Mediclinic is also listed on the Namibian Stock Exchange. The Group's head
office is in Stellenbosch, South Africa.
Mediclinic focuses on providing acute care, specialist-orientated, multidisciplinary hospital services
and related service offerings. It places science at the heart of its care process by striving to
provide evidence-based care of the highest standard. Patients receive controlled and customised
treatment, orchestrated by a team of medical professionals devoted to delivering the best possible
clinical outcomes in multidisciplinary facilities of a world-class standard. Mediclinic has nearly
9,900 beds worldwide (excluding Spire).
As at 31 March 2015, Mediclinic had consolidated gross assets of ZAR79.179 billion (GBP4.39 million)
and profit for the year then ended (attributable to equity holders of Mediclinic) of ZAR4.297 billion.
5. Irrevocable voting undertakings
Mediclinic and Al Noor have obtained irrevocable undertakings from Sheikh Mohammed Bin Butti
Al Hamed and Dr Kassem Alom (as shareholders of Al Noor), to vote in favour of the resolutions
required to approve and implement the Combination (including the Special Dividend and the
Tender Offer). Dr Kassem Alom is also a non-executive director of Al Noor. None of the other
directors of Al Noor holds Al Noor Shares. These irrevocable undertakings cover 34.3% of Al
Noor's outstanding shares as at 13 October 2015. The Al Noor Shares covered by these
irrevocable undertakings are as follows:
Shareholder Shares
Sheikh Mohammed Bin Butti Al Hamed 33,018,320
Dr Kassem Alom 7,055,946
Total 40,074,266
These irrevocable undertakings remain binding if a competing proposal is made to either Al Noor
or Mediclinic, but cease to be binding from the date on which the Combination lapses or is
withdrawn in accordance with its terms.
Mediclinic and Al Noor have also obtained irrevocable undertakings from the directors of Mediclinic
who hold Mediclinic Shares, and from Remgro Healthcare Holdings (Proprietary) Limited, to vote
in favour of the resolutions required to approve and implement the Combination. These irrevocable
undertakings cover 42.6% of Mediclinic's outstanding shares as at 13 October 2015. The
Mediclinic Shares covered by these irrevocable undertakings are as follows:
Shareholder Shares
Remgro Healthcare Holdings (Pty) Ltd 410,212,007
Edwin Hertzog 6,007,768
Danie Meintjes 337,860
Koert Pretorius 205,492
Craig Tingle 195,320
Ronnie van der Merwe 98,453
Total 417,056,900
These irrevocable undertakings remain binding if a competing proposal is made to either Al Noor
or Mediclinic, but cease to be binding from the date on which the Combination lapses or is
withdrawn in accordance with its terms.
6. Board recommendation
The Al Noor Board and Mediclinic Board believe that the proposed Combination presents a
compelling opportunity for Al Noor and Mediclinic shareholders to create value for both Al Noor
and Mediclinic shareholders.
Al Noor
The Al Noor Board, which has received financial advice from Rothschild and Goldman Sachs
International, considers the terms of the Combination to be in the best interests of Al Noor
shareholders as a whole, and the waiver by the United Kingdom Panel on Takeovers and Mergers
(the "UK Takeover Panel") of the obligation to make a general offer to Al Noor shareholders in accordance
with Rule 9 of the UK City Code on Takeovers and Mergers ("UK Takeover Code") to be in the
best interests of Al Noor shareholders. In providing their advice, Rothschild and Goldman Sachs
International have taken into account the commercial assessments of the Al Noor Board.
Accordingly, the Al Noor Board intends to recommend unanimously that Al Noor shareholders vote
in favour of the resolutions required to approve and implement the Combination (including the
Special Dividend and the Tender Offer), the whitewash resolution in relation to Rule 9 of the UK
Takeover Code, and related matters to be proposed at the Al Noor general meeting.
Background to and reasons for the Al Noor Board recommendation
Al Noor was admitted to listing to the Official List of the UKLA and to trading on the main market of
the London Stock Exchange in June 2013 at an offer price of GBP575. Since then, Al Noor has
delivered a strong track record of growth.
The Board of Al Noor recognizes the strong strategic merit in the Combination through the creation
of a diversified healthcare group with sizable scale and a leading position in the UAE.
In addition, the Board of Al Noor believes that the terms of the Combination are attractive for Al
Noor shareholders given the Special Dividend and the opportunity to participate in the Tender
Offer, which provides a meaningful premium. If an Al Noor shareholder tenders its shares (and assuming no
scale-back under the Tender Offer), it would receive cash of GBP 11.60 representing a premium
of approximately 39% to the closing price of GBP 8.35 per Al Noor Share on 1 October 2015.
In considering its recommendation for the Combination, the Board of Al Noor has given due
consideration to the recent proposal from NMC Health plc ("NMC"). Following the approach by
NMC, the Board has evaluated the value proposition, transaction certainty and consideration
mix under each of the Mediclinic and NMC proposals, and believes Mediclinic's proposal to
be in the best interests of Al Noor shareholders.
Mediclinic
As required under the SA Companies Act and the regulations thereunder (the "SA Takeover
Regulations"), the Mediclinic Board has been constituted as an independent board to consider the
Combination and to make a recommendation to Mediclinic shareholders regarding the
Combination. The Mediclinic Board has, in compliance with section 114 of the SA Companies Act,
appointed Ernst & Young as independent expert ("Independent Expert") to provide an opinion
regarding the Mediclinic Scheme. The Mediclinic Board believes that the Combination and the
terms thereof are in the best interests of Mediclinic shareholders and, subject to receipt and having
taken cognisance of the Independent Expert's opinion, the Mediclinic Board expects to be able to
recommend unanimously that Mediclinic shareholders vote in favour of the Mediclinic Scheme and
the resolutions required to approve and implement the Combination and related matters to be
proposed at the Mediclinic general meeting. The directors of Mediclinic who hold Mediclinic Shares, have
irrevocably undertaken to vote in favour of the Mediclinic Scheme and the resolutions required to
approve and implement the Combination and related matters to be proposed at the Mediclinic
general meeting.
7. Board, executive management and governance
Following completion of the Combination, the Board of the Enlarged Group will comprise a majority
of independent non-executive directors. Two directors from the Board of Al Noor, Ian Tyler and
Seamus Keating, will be on the board of the Enlarged Group, which will also include existing
directors of Mediclinic. The Chairman will be Edwin Hertzog (currently Chairman of Mediclinic) and
the Senior Independent Director will be Ian Tyler (currently Chairman of Al Noor). The CEO of the
Enlarged Group will be Danie Meintjes and the CFO will be Craig Tingle.
Following completion of the Combination, Remgro Limited ("Remgro") is expected to own
between 41% and 45% of the Enlarged Group, such that Remgro will be a "controlling
shareholder" for the purpose of the UK Listing Rules. As required by the UK Listing Rules, Al Noor
and Remgro have agreed the terms of a relationship agreement, which will take effect on
completion of the Combination, to govern the ongoing relationship between Remgro and Al Noor
following completion, the principal purpose of which is to ensure that Al Noor is capable of carrying
out its business independently of Remgro and its associates (the "Relationship Agreement").
Under the terms of the Relationship Agreement:
- Remgro undertakes to conduct all transactions and arrangements with any member of the
Enlarged Group at arm's length and on normal commercial terms; not to take any action
that would have the effect of preventing the Enlarged Group from complying with its
obligations under the UK Listing Rules; not to propose or procure the proposal of a
shareholder resolution which is intended or appears to be intended to circumvent the
proper application of the UK Listing Rules; and to abstain from voting on any shareholder
resolution that is required to be passed under Chapter 11 of the UK Listing Rules in order
to approve a related party transaction involving Remgro or any of its associates (as
defined in the UK Listing Rules), as the related party. Remgro also undertakes to procure,
so far as it is legally able to do so, that its associates comply with such undertakings.
- Remgro undertakes not to solicit senior employees of the Enlarged Group for a period
of two years, and to preserve the confidentiality of the Enlarged Group's information.
- Remgro is entitled to appoint one director (or, at Remgro's election, an observer) for every
10% of the voting rights held by it or its associates, up to a maximum of three directors,
provided that the right to appoint a third director is subject to the requirement that the
Board will, following such appointment, comprise a majority of independent directors.
Remgro is also entitled to representation on each committee of the Board (save that the
Audit and Risk Committee shall comprise solely of independent directors). The
Relationship Agreement requires the presence of a director appointed by Remgro at board
meetings in order to constitute a quorum.
- Al Noor (as parent company of the Enlarged Group) undertakes not to effect any share
repurchase or similar transaction that would give rise to an obligation on the part of
Remgro to make a general offer under Rule 9 of the UK Takeover Code, unless a waiver
from the obligation under Rule 9 of the UK Takeover Code has been granted by the UK
Takeover Panel.
Remgro, through its wholly-owned subsidiary Remgro Healthcare Holdings (Proprietary) Limited,
currently holds 41.9% of the issued share capital of Mediclinic. Remgro is an investment holding
company listed on the JSE, with a market capitalisation equivalent to approximately
GBP6.38 billion as at 1 October 2015. Remgro holds interests in over 30 listed and unlisted
portfolio companies in a diverse range of sectors.
8. Funding arrangements and cash confirmation
The cash payments to existing Al Noor shareholders will be partly funded through a subscription by
Remgro or its wholly-owned subsidiary for 72,115,384 new Al Noor Shares at a fixed price of
GBP8.32 per share, to raise proceeds of GBP600 million. This equity subscription is to be financed
by a GBP600 million (equivalent) loan facility provided to Remgro by RMB and Morgan Stanley.
In addition, affiliates of Morgan Stanley and RMB, as joint mandated lead arrangers and
underwriters, debt advisors and bookrunners, have arranged and entered into a loan facility of up
to GBP400 million with Mediclinic which will be made available to the Enlarged Group on
completion of the Combination on the basis that Al Noor will accede to the loan facility as borrower
(the "Mediclinic Facility Agreement").
As a result of these arrangements, Morgan Stanley & Co. International plc is satisfied that
sufficient resources are available to Al Noor to pay in full the amounts that may become due to Al
Noor shareholders under the Tender Offer (assuming take-up of the maximum number of
74,069,109 Al Noor Shares).
9. Share plans
Participants in the Mediclinic and Al Noor Share plans will be contacted regarding the effect of the
Combination on their rights under the relevant plan, and will be provided with further details
concerning the proposals which will be made to them in due course.
10. Reverse takeover under the UK Listing Rules
As the Combination will constitute a reverse takeover for the purpose of the UK Listing Rules, Al
Noor's listing on the premium segment of the Official List of the FCA will be cancelled on
completion of the combination, and application will be made to the FCA and the LSE for the
existing and new shares of Al Noor to be re-admitted to the premium segment of the Official List
and to trading on the LSE, respectively (together, "UK Admission"). A prospectus in respect of the
Enlarged Group will be published in relation to the application for UK Admission, in due course.
Pursuant to LR 5.6.12G(2) of the UK Listing Rules, Al Noor confirms that Mediclinic has complied
with the disclosure requirements of the JSE applicable to it, that information disclosed pursuant to
those requirements can be obtained at http://www.mediclinic.com and that there are no material
differences between those disclosure requirements and the disclosure requirements under the
Disclosure Rules and Transparency Rules of the FCA.
11. UK Takeover Code and whitewash resolution
On completion of the Combination, and taking into account the new Al Noor Shares to be issued to
Remgro or its subsidiaries, Remgro is expected to hold between 41% and 45% of the shares in
Al Noor, depending on take-up by existing Al Noor shareholders under the Tender Offer.
Under Rule 9 of the UK Takeover Code, a person who (together with persons acting in concert
with it) acquires an interest in shares carrying 30% or more of the voting rights in a company that
is subject to the UK Takeover Code is normally obliged to make an offer to acquire all of the shares.
The UK Takeover Panel has agreed in principle to waive this obligation, subject to its approval of
the shareholder circular to be published by Al Noor in connection with the Combination and to the
independent shareholders of Al Noor passing a separate "whitewash" resolution, to be taken on a
poll, waiving the requirement for Remgro and its concert parties (as defined in the UK Takeover
Code) to make an offer for all of the shares in Al Noor pursuant to Rule 9 of the UK Takeover
Code. Al Noor and Mediclinic have agreed that the "whitewash" resolution will be proposed on the
basis that the combined holdings of Remgro and its concert parties will not exceed 50% of the
shares in Al Noor.
12. Al Noor reductions of capital
Al Noor does not currently have sufficient distributable reserves to enable it to pay the Special
Dividend. Therefore, as part of the resolutions to approve the Combination, a special resolution will
be proposed to Al Noor shareholders at the Al Noor general meeting, for the reduction of Al Noor's
existing share premium account in order to create distributable reserves. In order for this reduction
of Al Noor's share premium account to become effective, the special resolution must be confirmed
by the Court, pursuant to section 648 of the Companies Act of 2006 in the United Kingdom ("UK
Companies Act"). If confirmed by the Court, the effect of this reduction of capital will be to create
sufficient distributable reserves to enable Al Noor to pay the Special Dividend. It will be a condition
to the Mediclinic Scheme that this reduction of Al Noor's existing share premium account is
confirmed by the Court and becomes effective.
The cancellation of the existing Al Noor Shares tendered and accepted for cancellation under the
Tender Offer will also constitute a reduction of capital and, accordingly, a further special resolution
will be proposed to Al Noor shareholders at the general meeting to permit the cancellation of those
shares and the associated reduction of capital. This special resolution must also be confirmed by
the Court pursuant to section 648 of the UK Companies Act. However, this reduction of capital can
only be confirmed by the Court after the Mediclinic Scheme becomes effective and, accordingly,
there is a risk that if the Court does not approve the cancellation of the shares tendered under the
Tender Offer, the Tender Offer would not be able to proceed.
13. Conditions and further terms
Conditions to posting the Mediclinic shareholder circular
The posting of the Mediclinic shareholder circular is subject to:
- the simultaneous publication or posting (as applicable) of the Al Noor shareholder circular,
an FCA-approved prospectus in respect of the Enlarged Group and, as required under the
SA Companies Act, a prospectus in respect of the Al Noor group; and
- any requisite approvals being received from the JSE, the SA Takeover Panel, and the
Financial Surveillance Department of the South African Reserve Bank (to the extent
required) for the posting of the Mediclinic shareholder circular.
Conditions to the Mediclinic Scheme
The Mediclinic Scheme will be subject to the fulfilment or waiver (as applicable) of the conditions
precedent set out in Appendix III to this announcement by no later than the Long Stop Date (as
defined in Appendix III to this announcement). These conditions include conditions relating to:
- the approval, posting and publication of the required shareholder documentation;
- the approval by Al Noor and Mediclinic shareholders of resolutions required to implement
the Combination;
- the UK Takeover Panel waiving the requirement for Remgro to make an offer for Al Noor
under Rule 9 of the UK Takeover Code, and the associated "whitewash" resolution having
being duly passed by the requisite majority of Al Noor shareholders;
- approvals relating to the admission of Al Noor Shares to trading on the LSE and the JSE;
- the receipt of competition authority clearances in South Africa and Namibia and other
required regulatory clearances;
- confirmation by the High Court of Justice of England and Wales of the resolution for the
reduction of Al Noor's existing share premium account in order to create distributable
reserves, and such reduction of capital having become effective;
- the implementation of certain preliminary steps relating to the Mediclinic Scheme;
- the Remgro equity subscription; and
- other customary conditions relating to the businesses of the two groups.
Conditions to the Special Dividend and Tender Offer
The Special Dividend and the Tender Offer are conditional on the Mediclinic Scheme becoming
effective in accordance with its terms. The Tender Offer is, in addition, subject to the further
condition that the Court confirms the cancellation of the shares tendered and the associated
reduction of capital.
The detailed terms and conditions of the Combination (including the Special Dividend and the
Tender Offer) will be set out in full in the shareholder circulars to be published by Al Noor and
Mediclinic, respectively, in due course.
14. Settlement of the consideration under the Mediclinic Scheme
Settlement of the consideration receivable by Mediclinic shareholders pursuant to the Mediclinic
Scheme (the "Scheme Consideration") is subject to the South African Exchange Control Regulations.
The Scheme Consideration will only be made available in dematerialised form (i.e. no individual
share certificates will be issued by Al Noor). Accordingly, certificated scheme participants will be
required to move into a dematerialised environment.
Al Noor confirms that, subject to approval by Al Noor shareholders of the resolutions necessary for
Al Noor to implement the Combination, it will have sufficient authorities to allot and issue the new
Al Noor Shares to all Mediclinic shareholders becoming entitled thereto under the Mediclinic Scheme.
15. Termination of the Mediclinic listing on the JSE and Namibian Stock Exchange
Following the implementation of the Mediclinic Scheme, application will be made to the JSE to
terminate the listing of the Mediclinic Shares on the JSE and the Namibian Stock Exchange.
The secondary listing of the Enlarged Group on the JSE is expected to become effective, and
dealings in new Al Noor Shares on the JSE to commence, as soon as practicable after the
Mediclinic Scheme becomes effective. A listing for the Enlarged Group on the Namibian Stock
Exchange may also be sought, but is not a condition to the implementation of the Combination.
16. SA Takeover Panel Considerations
Al Noor does not hold any direct or indirect beneficial interests in, or any direct or indirect option to
purchase any Mediclinic Shares. Persons "acting in concert" (or presumed to be acting in concert)
with Al Noor (within the meaning of the SA Takeover Regulations), if any, shall not be entitled to
vote on the relevant Mediclinic shareholder resolutions.
The SA Takeover Panel has, in terms of section 119(6) of the SA Companies Act, granted
Mediclinic, Al Noor and Remgro with an exemption from the provisions of section 127(1) of the SA
Companies Act in connection with the GBP600 million equity subscription by Remgro or its wholly-
owned subsidiary to partly fund the cash payments to existing Al Noor shareholders as referred to
in paragraph 8 above.
This announcement constitutes a "firm intention announcement" (as contemplated in the SA
Takeover Regulations) of Al Noor's intention to make an offer to Mediclinic shareholders by way of
the Mediclinic Scheme.
17. Pro forma financial information
As required by the SA Takeover Regulations, an unaudited statement of the pro forma financial
effects of the Combination is set out at Appendix I to assist Mediclinic shareholders to assess the
impact of the Combination on earnings per share, headline earnings per share, normalised
headline earnings per share, net asset value and tangible net asset value per share.
Based on conservative growth assumptions for Al Noor and Mediclinic's existing business plans
(excluding synergies), Mediclinic expects the Combination to be earnings neutral to Mediclinic
shareholders in the first full year of consolidation and accretive thereafter.(6)
(6) This statement is not intended as a profit forecast or estimate for any period nor should be interpreted to mean
that earnings per share, or headline earnings per share, for the current or future financial years would
necessarily match or exceed the historical published earnings per share, or headline earnings per share.
18. Independent expert opinion
The Mediclinic Board has appointed Ernst & Young as Independent Expert to provide an
independent expert opinion regarding the Mediclinic Scheme as required by section 114 of the SA
Companies Act.
19. Bid Conduct Agreement
Al Noor and Mediclinic have today entered into a bid conduct agreement in respect of the
Combination (the "Bid Conduct Agreement"). Under the terms of the Bid Conduct Agreement:
- The parties have agreed to provide information relating to and, where applicable,
co-operate, with respect to the preparation of the necessary regulatory filings,
shareholder circulars and prospectuses.
- Mediclinic has undertaken to take certain steps in relation to the preparation of the Mediclinic
scheme circular.
- The parties have set out their intentions with regards to the treatment of certain existing
share schemes.
- Mediclinic has agreed to pay a break fee of GBP5 million to Al Noor, as Al Noor's exclusive
remedy, if the Bid Conduct Agreement is terminated: (i) as a result of the Mediclinic Board not
making or, once made, withdrawing, modifying or qualifying its recommendation to Mediclinic
shareholders that they vote in favour of the resolutions necessary to implement the Combination;
or (ii) as a result of the failure or inability to satisfy certain of the conditions precedent
to implementation of the Combination set out in Appendix III to this announcement. The break fee
represents approximately 0.09% of Mediclinic's market capitalisation as at the close of trading
on 13 October 2015.
20. Mediclinic responsibility statement
The Mediclinic Board accepts responsibility for the information contained in this announcement to
the extent that it relates to Mediclinic. To the best of their knowledge and belief, the information
contained in this announcement is true and nothing has been omitted which is likely to affect the
importance of the information.
21. Al Noor responsibility statement
The Al Noor Board accepts responsibility for the information contained in this announcement to the
extent that it relates to Al Noor. To the best of their knowledge and belief, the information contained
in this announcement is true and nothing has been omitted which is likely to affect the importance
of the information.
22. Next steps and timing
Al Noor will in due course publish and dispatch a circular to its shareholders containing a notice to
convene a general meeting of Al Noor shareholders, at which meeting the resolutions required to
approve and implement the Combination (including the Special Dividend and Tender Offer), the
whitewash resolution and certain related and consequential matters, will be proposed.
Al Noor will also publish a prospectus in respect of UK Admission, and a prospectus registered
with the Companies and Intellectual Property Commission of South Africa in respect of the offering
of the new Al Noor Shares pursuant to the Mediclinic Scheme.
Mediclinic will in due course publish and dispatch a combined circular to its shareholders
containing full details of the Mediclinic Scheme, together with the expected timetable, and a notice
to convene a general meeting of Mediclinic shareholders, at which meeting the resolutions
required to approve and implement the Mediclinic Scheme, and certain related and consequential
matters, will be proposed.
Subject to the satisfaction or waiver of the conditions, it is currently expected that the shareholder
meetings will be held in December 2015 and that the Combination will complete during the first
quarter of 2016.
Appendix I: Unaudited statement of pro forma financial effects
The unaudited statement of pro forma financial effects set out below has been prepared to assist
Mediclinic shareholders to assess the impact of the proposed Combination on the earnings per
share ("EPS"), headline EPS ("HEPS"), normalised HEPS, net asset value ("NAV") and tangible
NAV ("TNAV") per Mediclinic Share.
These pro forma financial effects are presented for illustrative purposes only and, due to their
nature, may not fairly present the Enlarged Group's financial position or the results of its
operations after the proposed Combination is implemented.
A simple consolidation of the historical financial information does not appropriately reflect the
future prospects of the combined businesses due to, inter alia, the following factors: movements in
the exchange rates, changes in the regulatory environment, ability to successfully integrate the
businesses and attraction and retention of quality healthcare professionals. Consequently,
historical performance is not an appropriate reflection of future prospects. In addition, the
calculations below do not take into account Al Noor's earnings growth since FY2014 or potential
synergies arising from this combination.
The unaudited pro forma financial effects have been prepared in terms of the Guide on Pro Forma
Financial Information issued by the South African Institute of Chartered Accountants. The
statement is the responsibility of the Mediclinic Board and is provided for illustrative purposes only. The
material assumptions are set out in the notes following the table.
Pro forma financial effects for the Before the Pro forma Percentage
year ended 31 March 2015 Combination(1),(2) adjustments(3) After the Combination change
1 Mediclinic 1 Mediclinic 1 Al Noor 0.6250 Al
Share Share Share Noor Shares
cents pence pence pence pence
EPS (cents/pence) 509.5 28.6 1.8(4) 30.4 19.0 (34%)
HEPS (cents/pence) 483.9 27.2 1.4(4) 28.5 17.8 (34%)
Normalised HEPS (cents/pence) 408.2 22.9 10.9(5) 33.8 21.1 (8%)
NAV per share (cents/pence) 3,752.5 207.8 206.8(6) 414.6 259.4 25%
TNAV per share (cents/pence) 2,363.7 130.9 (11.7)(6) 119.2 74.5 (43%)
Weighted average number of shares (millions) 843.4 843.4 (201.4) 642.0 (24%)
Notes and assumptions:
1. Extracted from the audited published results of Mediclinic for the year ended 31 March 2015.
2. The unaudited statement of pro forma financial effects is compiled prior to the acquisition of a
29.9% interest in Spire Healthcare Group plc and the Mediclinic rights issue which closed on 21 August 2015.
3. Al Noor has 116.9 million shares in issue. Mediclinic shareholders receive 0.62500 Al Noor Shares
for every Mediclinic Share held resulting in 534.0 million Al Noor Shares being issued to Mediclinic
shareholders. Remgro subscribes for 72.1 million Al Noor Shares at GBP8.32 per share. Al Noor
shareholders accept the maximum available cash take out under the Tender Offer resulting in
74.1 million Al Noor Shares being cancelled. Total Enlarged Group shares in issue of 648.9 million.
4. For the purposes of calculating EPS and HEPS it was assumed that:
a. the Combination was effected on 1 April 2014;
b. Al Noor's income statement information was extracted from its audited financial statements
for the year ended 31 December 2014;
c. Al Noor's income statement information was converted at USD1.65: GBP1 being the
average rate for the 12 months ended 31 December 2014;
d. transactions costs for the Combination amount to GBP56m with STT of GBP14 million;
e. loan facilities are used for 365 days following which they are refinanced;
f. finance cost amounting to GBP24 million charged in respect of the loan finance; and
g. the adjustments are non-deductible for tax purposes.
5. Normalised HEPS excludes the one-off transaction costs amounting to GBP70 million and more
accurately reflects the position of the Enlarged Group.
6. For the purposes of NAV per share and TNAV per share it was assumed that:
a. the proposed transaction was effected on 31 March 2015
b. Al Noor's statement of financial position information was extracted from its audited financial
statements at 31 December 2014
c. Al Noor's statement of financial position was converted at USD1.56:GBP1 being the spot
rate as at 31 December 2014
d. Mediclinic Share price of GBP5.20 and Al Noor Share price of GBP8.32
e. a special dividend of GBP3.28 per share is paid to Al Noor shareholders
f. the proposed transaction will be accounted for as a reverse acquisition under IFRS. The
consolidated financial information of the Enlarged Group will reflect the acquisition of Al
Noor by applying the IFRS 3 'acquisition method' of accounting on the Al Noor identifiable
assets acquired and liabilities assumed. As the valuation of the Al Noor identifiable assets
and assumed liabilities will only be performed after completion of the Combination, the calculation of goodwill for
the purposes of the above disclosures does not reflect any fair value adjustments that may
be made after completion of the Combination. The purchase consideration in terms of IFRS 3, which includes the
special dividend of GBP383 million, is calculated as GBP1,388 million and goodwill of
GBP1,238 million is provisionally booked.
No statement in this announcement is intended as a profit forecast or estimate for any period and
no statement in this announcement should be interpreted to mean that revenue, earnings,
earnings per share, headline earnings per share, net asset value per share or tangible net asset
value per share for Al Noor, Mediclinic or the Enlarged Group, as appropriate, for the current or
future financial years would necessarily match or exceed the historical published revenue,
earnings, earnings per share, headline earnings per share, net asset value per share or tangible
net asset value per share for Al Noor or Mediclinic, as appropriate.
Appendix II: Sources of information and bases of calculation
In this announcement, unless otherwise stated, or the context otherwise requires, the following
bases and sources have been used:
1. The financial information relating to Mediclinic is extracted
(without adjustment) from the audited consolidated financial statements of Mediclinic for
the relevant years, prepared in accordance with IFRS.
2. The financial information relating to Al Noor is extracted (without
adjustment) from the audited consolidated financial statements of Al Noor for the relevant
years or from the unaudited interim consolidated financial statements of Al Noor for the
relevant half years, prepared in accordance with IFRS.
3. Any references to the existing issued share capital of Mediclinic are based on 979,068,436
Mediclinic Shares in issue as at 13 October 2015 (being the last practicable date prior to
the release of this announcement).
4. Any references to the existing issued share capital of Al Noor are based on 116,866,203
Al Noor Shares in issue as at 13 October 2015 (being the last practicable date prior to the release
of this announcement).
5. All share prices, closing share prices and market capitalisations stated for Mediclinic and Remgro are
based on closing middle market prices derived from the Johannesburg Stock Exchange, and for Al Noor on
the London Stock Exchange Daily Official List.
6. The percentage ownership of the Enlarged Group which would be held by Mediclinic shareholders if
the Combination completes is based on the number of Mediclinic Shares in issue set out in 3 above
and the number of Al Noor Shares in issue set out in 4 above.
Appendix III: Conditions
Part A: Conditions to the Combination
1. The Al Noor Circular, Enlarged Group Prospectus, Al Noor SA Prospectus and Mediclinic Scheme Circular
having been approved for publication or dispatch (as applicable) by the relevant Regulatory Authorities,
and having been published and dispatched within 60 days of the date of this announcement (or such later
date as may be agreed between the parties) and, in each case (save as may be agreed between the parties),
proposing the Combination (including the Special Dividend and the Tender Offer) on the terms set out in this
announcement and the Implementation Steps Plan;
2. Approval for the Combination having been obtained from: (a) the Competition Commission
and Competition Tribunal in South Africa; and (b) the Namibian Competition Commission
by no later than the Long-Stop Date, in each case either unconditionally or subject to
conditions which would not have a material effect on the business of the Mediclinic Group
in the relevant jurisdiction, in the reasonable opinion of Mediclinic and Al Noor.
3. The approval of the Mediclinic Resolutions by the requisite majority of Mediclinic
Shareholders, including approval of the Assets Transfer and the Mediclinic
Scheme as contemplated in section 115(2) of the SA Companies Act, respectively, and: (a)
to the extent required, the approval of the implementation of such resolution(s) by the SA
Court; and (b) if applicable, Mediclinic not treating the aforesaid resolution(s) as a nullity,
as contemplated in section 115(5)(b) of the SA Companies Act;
4. In relation to the Assets Transfer or the Mediclinic Scheme:
(a) there being no Mediclinic Shareholder entitled to issue a demand under section
164(5) of the SA Companies Act; or
(b) if there is a Mediclinic Shareholder entitled to issue a demand under section
164(5) of the SA Companies Act, then, in the period of 30 "business days" (within
the meaning of the SA Companies Act) following the date on which the resolution
to approve the Assets Transfer or Mediclinic Scheme (as applicable) is
actually passed, there either having been no valid demands received by Mediclinic
under that section or there having been valid demands received by Mediclinic
under that section in respect of not more than 3 per cent. of Mediclinic's issued
shares;
5. The receipt of such approvals, consents or waivers from all regulatory bodies,
governmental or quasi-governmental entities (other than those in paragraphs 2, 9, 10 and
11 of this Part A) on terms satisfactory to Al Noor and Mediclinic (acting reasonably), as
are necessary for the implementation the Combination (including the Special Dividend and
the Tender Offer and the financing thereof) on the terms currently envisaged including, but
not limited to, the SA Takeover Panel (in terms of a compliance certificate to be issued in
terms of the SA Companies Act in relation to the Mediclinic Scheme), the Financial
Surveillance Department of the South African Reserve Bank for the requisite exchange
control approvals, and the JSE for the delisting of Mediclinic and such approvals, consents
or waivers becoming unconditional in accordance with their terms (except for any condition
requiring the Mediclinic Scheme to become effective);
6. The Al Noor Resolutions being duly passed at the Al Noor General Meeting (or at any
adjournment thereof), in each case by the requisite majority of Al Noor Shareholders, and
such Al Noor Resolutions not having been revoked or modified, or any resolution of Al
Noor subsequently having been passed that is inconsistent with the Al Noor Resolutions;
7. The UK Takeover Panel waiving the requirement for Remgro to make an offer for Al Noor
under Rule 9 of the UK Takeover Code and the Whitewash Resolution having being duly
passed at the Al Noor General Meeting (or at any adjournment thereof) by the requisite
majority of Al Noor Shareholders, taken on a poll and such waiver and approval remaining
in full force and effect;
8. Confirmation by the High Court of Justice of England and Wales of the First Reduction of
Capital, and such First Reduction of Capital having become effective in accordance with
section 649(3)(b) of the UK Companies Act;
9. The UK Listing Authority having acknowledged to Al Noor or its agent (and such
acknowledgement not having been withdrawn) that the application for the admission of the
new Al Noor Shares to be issued to Mediclinic Shareholders pursuant to the Mediclinic
Scheme and to the Remgro Subscriber pursuant to the Remgro Subscription to listing on
the premium segment of the Official List of the UK Listing Authority has been approved
and (subject to satisfaction of any conditions to which such approval is expressed) will
become effective as soon as a dealing notice has been issued by the UK Listing Authority
and any such listing conditions have been satisfied;
10. The London Stock Exchange having acknowledged to Al Noor or its agent (and such
acknowledgement not having been withdrawn) that the new Al Noor Shares to be issued to
Mediclinic Shareholders pursuant to the Mediclinic Scheme and to the Remgro Subscriber
pursuant to the Remgro Subscription will be admitted to trading on the London Stock
Exchange's main market for listed securities;
11. The JSE having granted an application for listing to Al Noor (and such application for
listing not having been withdrawn) that the application for Al Noor's secondary listing on
the Main Board of the JSE has been approved and (subject to satisfaction of any
conditions to which such approval is expressed) will become effective on the applicable
date required by the JSE Listings Requirements;
12. To the extent applicable having regard to the terms of the Mediclinic Scheme, the
proposed allotment and issue of the new Al Noor Shares pursuant to the Mediclinic
Scheme not having become unlawful by reason of section 580(1) of the UK Companies
Act (shares not to be allotted at a discount);
13. To the extent applicable having regard to the terms of the Mediclinic Scheme, the
requirements of section 593 of the UK Companies Act (valuation of non-cash consideration
for shares) having been complied with in respect of the relevant allotments of new Al Noor
Shares pursuant to the Mediclinic Scheme;
14. No licence which is held by any member of the Al Noor Group which is necessary for the
proper carrying on of its business having been withdrawn, cancelled or terminated where
such withdrawal, cancellation or termination has had, or would reasonably be expected to
have, a material adverse effect on the Al Noor Group taken as a whole and for this
purpose, an adverse effect shall be "material" if it could reasonably be expected to result in
the EBITDA of the Al Noor Group for the years ended 31 December 2015 or 31 December 2016
being more than 10 per cent less than the EBITDA for the year ended 31 December 2014;
15. No licence which is held by any member of the Mediclinic Group which is necessary for
the proper carrying of its business having been withdrawn, cancelled or terminated
where such withdrawal, cancellation or termination has had, or would reasonably be
expected to have, a material adverse effect on the Mediclinic Group taken as a whole and
for this purpose, an adverse effect shall be "material" if it could reasonably be expected to
result in the EBITDA of the Mediclinic Group for the years ended 31 March 2016 or 31
March 2017 being more than 10 per cent less than the EBITDA for the year ended 31 March
2015;
16. Mediclinic not having discovered that any financial, business or other information
concerning the Al Noor Group as contained in the information publicly disclosed as at the
date of this announcement, by or on behalf of any member of the Al Noor Group was
materially misleading, contained a material misrepresentation of fact or omitted to state a
material fact necessary to make that information not misleading, in each case, to the
extent which is material in the context of the Al Noor Group taken as a whole;
17. Al Noor not having discovered that any financial, business or other information concerning
the Mediclinic Group as contained in the information publicly disclosed as at the date of
this announcement, by or on behalf of any member of the Mediclinic Group was materially
misleading, contained a material misrepresentation of fact or omitted to state a material
fact necessary to make that information not misleading, in each case, to the extent which
is material in the context of the Mediclinic Group taken as a whole;
18. No law or regulation and no order or judgment of any court or governmental or regulatory
authority in the United Kingdom or South Africa having been made or issued, and no
consent or approval of any governmental or regulatory authority in the United Kingdom or
South Africa that has been obtained in connection with the Combination (including the
Special Dividend and the Tender Offer) having been withdrawn, cancelled, terminated or
modified, which would in either case have the effect of making unlawful or otherwise
prohibiting the implementation of the Combination (including the Special Dividend and the
Tender Offer);
19. No event or circumstance having occurred in relation to any member of the Al Noor Group
that would, on the accession by Al Noor to the Mediclinic Facility Agreement, prohibit the
drawing of the total commitments under the Mediclinic Facility Agreement (in each case for
the purposes of financing the Special Dividend and Tender Offer) or cause such total
commitments to be cancelled or reduced;
20. None of the actions or events set out in Part B of this Appendix III having occurred in
relation to Mediclinic or any other company in the Mediclinic Group, that has not been
remedied to the reasonable satisfaction of Al Noor;
21. None of the actions or events set out in Part B of this Appendix II (other than in
paragraphs 4, 14 and 16 (as it relates to paragraph 4 or 14) thereof) having occurred
in relation to Al Noor or any other company in the Al Noor Group, that has not been
remedied to the reasonable satisfaction of Mediclinic;
22. None of the following events having occurred in relation to Mediclinic or any other
company in the Mediclinic Group which contributes 10 per cent or more of the EBITDA of
the Mediclinic Group:
(a) it is dissolved or de-registered; or
(b) an order or declaration is made, or a resolution is passed, for the administration,
custodianship, bankruptcy, liquidation, business rescue, winding-up, judicial
management, receivership, supervision, trusteeship, de-registration or dissolution
(and, in each case, whether provisional or final) of it, its assets or its estate or an
order or declaration is made, or a resolution is passed, to authorise the
commencement of any business rescue proceeding in respect of it, its assets or its
estate; or
(c) it convenes any meeting to consider the passing of resolution for the
administration, custodianship, bankruptcy, liquidation, business rescue, winding-
up, judicial management, receivership, supervision, trusteeship, de-registration or
dissolution (and, in each case, whether provisional or final) of it, its assets or its
estate or to authorise the commencement of any business rescue proceeding in
respect of it, its assets or its estate; or
(d) it seeks or requests the appointment of an administrator, liquidator (whether
provisional or final), business rescue practitioner, conservator, receiver, trustee,
judicial manager, judicial receiver, administrative receiver, compulsory manager,
custodian or other similar official for it or for all or substantially all its assets or
estate; or
(e) it has a secured party take possession of all or substantially all its assets or has a
distress, execution, attachment, sequestration or other legal process levied,
enforced or sued on or against all or substantially all its assets and such secured
party maintains possession, or any such process is not dismissed, discharged,
stayed or restrained, in each case within 30 days thereafter; or
(f) it is unable (or admits inability) to pay its debts generally as they fall due or is (or
admits to being) otherwise insolvent (but excluding for this purpose any technical
insolvency) or stops, suspends or threatens to stop or suspend payment of all or a
material part of its indebtedness or proposes or seeks to make or makes a general
assignment or any arrangement, compromise or composition with or for the benefit
of its creditors or any class of its creditors or a moratorium is agreed or declared in
respect of or affecting all or a material part of its indebtedness; or
(g) it takes or proposes to its creditors any proceeding for, or seeks to make or makes,
a general readjustment, rescheduling or deferral of its indebtedness (or any part
thereof which it would otherwise be unable to pay when due); or
(h) any receiver, administrative receiver, judicial receiver, judicial manager,
administrator, compulsory manager, judicial custodian, trustee in bankruptcy,
liquidator (whether provisional or final), business rescue practitioner or the like is
appointed in respect of it, its estate or any material part of its assets; or
(i) it causes or is subject to any event with respect to it which, under the applicable
laws of any jurisdiction, has an analogous effect to any of the events specified in
the above paragraphs;
23. None of the following events having occurred in relation to Al Noor or any other any
company in the Al Noor Group which contributes 10 per cent or more of the EBITDA of the
Al Noor Group:
(a) it is dissolved or de-registered; or
(b) an order or declaration is made, or a resolution is passed, for the administration,
custodianship, bankruptcy, liquidation, business rescue, winding-up, judicial
management, receivership, supervision, trusteeship, de-registration or dissolution
(and, in each case, whether provisional or final) of it, its assets or its estate or an
order or declaration is made, or a resolution is passed, to authorise the
commencement of any business rescue proceeding in respect of it, its assets or its
estate; or
(c) it convenes any meeting to consider the passing of resolution for the
administration, custodianship, bankruptcy, liquidation, business rescue, winding-
up, judicial management, receivership, supervision, trusteeship, de-registration or
dissolution (and, in each case, whether provisional or final) of it, its assets or its
estate or to authorise the commencement of any business rescue proceeding in
respect of it, its assets or its estate; or
(d) it seeks or requests the appointment of an administrator, liquidator (whether
provisional or final), business rescue practitioner, conservator, receiver, trustee,
judicial manager, judicial receiver, administrative receiver, compulsory manager,
custodian or other similar official for it or for all or substantially all its assets or
estate; or
(e) it has a secured party take possession of all or substantially all its assets or has a
distress, execution, attachment, sequestration or other legal process levied,
enforced or sued on or against all or substantially all its assets and such secured
party maintains possession, or any such process is not dismissed, discharged,
stayed or restrained, in each case within 30 days thereafter; or
(f) it is unable (or admits inability) to pay its debts generally as they fall due or is (or
admits to being) otherwise insolvent (but excluding for this purpose any technical
insolvency) or stops, suspends or threatens to stop or suspend payment of all or a
material part of its indebtedness or proposes or seeks to make or makes a general
assignment or any arrangement, compromise or composition with or for the benefit
of its creditors or any class of its creditors or a moratorium is agreed or declared in
respect of or affecting all or a material part of its indebtedness; or
(g) it takes or proposes to its creditors any proceeding for, or seeks to make or makes,
a general readjustment, rescheduling or deferral of its indebtedness (or any part
thereof which it would otherwise be unable to pay when due); or
(h) any receiver, administrative receiver, judicial receiver, judicial manager,
administrator, compulsory manager, judicial custodian, trustee in bankruptcy,
liquidator (whether provisional or final), business rescue practitioner or the like is
appointed in respect of it, its estate or any material part of its assets; or
(i) it causes or is subject to any event with respect to it which, under the applicable
laws of any jurisdiction, has an analogous effect to any of the events specified in
the above paragraphs; and
24. Other than in respect of any condition which by its nature can only be satisfied
immediately before, or at such time as, the Mediclinic Scheme becomes effective, the
Subscription Agreement is unconditional in all respects.
Part B: Matters referred to in paragraphs 20 and 21 of Part A
1. Entering into any binding commitments in connection with any acquisition or disposal of a
material asset, or which encumbers any material asset of the business; or
2. amending or proposing to amend its memorandum of incorporation (or equivalent
constitutional documents), save (a) as may be required to comply with any applicable law
or as contemplated by the Bid Conduct Agreement and/or the Scheme or (b) in a manner
which will not impact adversely on the implementation of the Combination (including the
Special Dividend or the Tender Offer);
3. reorganising, amalgamating or merging any member of their respective Groups with any
other person or entity, or acquiring or agreeing to acquire by amalgamating, merging or
consolidating with, purchasing the shares of or substantially all of the assets of or
otherwise, any business or any corporation, partnership, association or other business
organization or division thereof or disposing or transferring or agreeing to dispose of or
transfer the shares or any of the assets of any member of their respective Groups, which
would in each case be material in the context of the relevant Group (taken as a whole); or
4. save in the case of Mediclinic in respect of the interim dividend payable in December 2015
(which shall not exceed such amount as would be payable by applying the same dividend
payout ratio (being the dividend as a percentage of net profits) as applied in respect of the
interim dividend paid by Mediclinic on 8 December 2014), declaring, setting aside or
paying any dividend or other distribution (whether in cash, shares or other property) in
respect of any share capital, except for the payment of dividends by members of their
respective Groups which are wholly-owned by them or to another wholly-owned member
of such Group or, in the case of the Mediclinic Group, for payment of dividends or other
distributions (in the ordinary course of business in accordance with past practice) in
respect of minority interests in associated or subsidiary undertakings; or
5. (a) splitting, combining or reclassifying any share capital or issuing or authorising the
issuance of any other securities in respect of, in lieu of or in substitution for any share
capital; (b) allotting, issuing, or authorising or proposing the allotment or issue of any share
capital or any securities convertible into share capital, or rights, warrants or options to
subscribe for or acquire any share, or transferring any stock out of treasury, other than the
allotment and issue of shares under the exercise or vesting of options or awards
outstanding under the Share Schemes as at the date of this announcement, or save as
contemplated by the Bid Conduct Agreement; or (c) amending or proposing to amend any
of the terms of any securities which are exercisable for or convertible or exchangeable into
ordinary shares of any member of their respective Groups, save as may be required to
applicable law or regulation; or
6. save as contemplated by the Bid Conduct Agreement or in accordance with the terms of
employee share plans as existing at the date of this announcement, issuing or granting
any options or awards under any employee share plans of their respective Groups or
adopting or amending any employee share plans; or
7. increasing total borrowings or entering into any new loan agreement with any bank or
other financial institution other than as would (on Al Noor's accession to the Mediclinic
Facility Agreement) not be prohibited by the Mediclinic Facility Agreement; or
8. granting or becoming bound by any guarantee, suretyship, indemnity or other security in
respect of any person other than (a) as would (on Al Noor's accession to the Mediclinic
Facility Agreement) not be prohibited by the Mediclinic Facility Agreement or (b) in the
ordinary course of business in a way consistent with past practice; or
9. requesting the delisting or suspension of the listing of any class of its securities from any
stock exchange unless required to do so by applicable law or regulation or the rules of the
relevant stock exchange; or
10. forming or entering into or agree to enter into or form, or acquire a material interest in, any
joint venture, partnership or agreement or other venture for the sharing of profits or assets
other than in the ordinary course of business in a way consistent with past practice; or
11. save as contemplated in the Bid Conduct Agreement, making material changes to the
general terms of employment of its employees or the terms of employment of the directors
of Mediclinic or the Al Noor Directors (as applicable) in any way, or making any
improvements to the emoluments (including bonus arrangements) applicable to such
employee or Director, other than as expressly permitted under the Bid Conduct Agreement
or in the ordinary course of business or under periodic salary or wage reviews in a way
consistent with past practice; or
12. appointing a person as a director of Mediclinic or Al Noor (as applicable) or making any
voluntary change to the board of Mediclinic or Al Noor (as applicable) (except for
termination with just cause or replacement of departing personnel or as required under
any existing relationship agreement with controlling shareholders); or
13. save as contemplated in the Bid Conduct Agreement, adopting or amending in a material
way any employee benefit, pension, bonus or profit sharing scheme (including without
limitation any scheme having share purchase or share option provisions); or
14. in the case of Mediclinic, entering into any arrangements with the trustees of any pension
scheme, in which any member of the Mediclinic Group participate, to pay employer
contributions to such scheme other than those employer contributions agreed with the
trustees at the date of this announcement, save as required by law or regulation or the
rules of any such scheme; or
15. save as contemplated in the Bid Conduct Agreement, entering into any arrangement with
any non-executive Director, whereby any member of their respective Groups is required to
make incentive payments to such non-executive Director upon the successful
implementation of the Combination; or
16. agreeing to do any of the foregoing,
except and to the extent that any of the foregoing is undertaken pursuant to or directly in connection
with: (a) the completion or performance of any obligations undertaken under any contract or arrangement
entered into prior to the date of this announcement (provided details of the same have been fairly disclosed
to the other party prior to the date of this announcement); and/or (b) the completion or performance of any
actions or obligations undertaken in terms of this announcement or required in order to give effect to or
implement the Mediclinic Scheme or the Combination.
Part C: Waiver of Conditions
1. The conditions in paragraphs 15, 17, 20 and 22 of Part A to this Appendix III are for the
benefit of Al Noor and may be waived (in whole or in part) by Al Noor in its sole discretion
by notice in writing to Mediclinic.
2. The conditions in paragraphs 1, 14, 16, 21 and 23 of Part A to this Appendix III are for the
benefit of Mediclinic and may be waived (in whole or in part) by Mediclinic in its sole
discretion by notice in writing to Al Noor.
3. The conditions in paragraph 4 of Part A to this Appendix III may be waived with the
agreement in writing of both Mediclinic and Al Noor (in whole or in part); provided that
Mediclinic may unilaterally waive such condition (in whole or in part) if Al Noor is satisfied
(acting reasonably and having regard to such proposals as Mediclinic may make) that
doing so would not require Al Noor to withdraw, qualify or modify the working capital
statements set out in the Enlarged Group Prospectus or Al Noor Circular in any manner
adverse to the implementation of the Combination (including the Special Dividend and the
Tender Offer).
4. The remainder of the conditions in Part A to this Appendix III cannot be waived by the
parties.
Part D: Definitions
In this Appendix III, the following words shall have the following meanings:
"Al Noor Circular" means the circular to be dispatched to Al Noor Shareholders in
connection with the Combination and containing a notice to convene the Al Noor General
Meeting, and including the form of proxy for use in respect of the Al Noor General Meeting
and any forms of election for use in respect of the Tender Offer;
"Al Noor Directors" means the directors of Al Noor (but shall not include any person who
becomes or who is proposed to become a director of Al Noor on completion of the
Combination);
"Al Noor General Meeting" means the general meeting of Al Noor Shareholders at which
the Al Noor Resolutions will be proposed;
"Al Noor Group" means Al Noor and its subsidiary undertakings;
"Al Noor Reductions" means the proposed reductions of capital of Al Noor under Section
641 of the UK Companies Act in connection with the Combination, being (i) the proposed
reduction of Al Noor's existing share premium account to create sufficient distributable
reserves to enable Al Noor to pay the Special Dividend (the "First Reduction of Capital");
and (ii) the proposed cancellation of Al Noor Shares pursuant to the Tender Offer, the
reduction of Al Noor's share premium account to effect the Tender Offer, and the further
reduction of Al Noor's share premium account to USD1 billion to create distributable reserves;
"Al Noor Resolutions" means the resolutions to be proposed to Al Noor Shareholders for
the purposes of approving:
(a) the acquisition of Mediclinic pursuant to the Mediclinic Scheme for the purpose of
Chapter 10 of the UK Listing Rules;
(b) the issue and allotment of the new Al Noor Shares to be issued pursuant to the
Mediclinic Scheme and to the Remgro Subscriber pursuant to the Remgro
Subscription;
(c) to the extent required, the disapplication of any pre-emption rights with respect to
the allotments referred to in (b) above;
(d) the Al Noor Reductions;
(e) (if required by the UK Takeover Panel) the Combination, this Agreement and any
related arrangement (including the Special Dividend and the Tender Offer) for the
purposes of Rule 21 of the UK Takeover Code;
(f) the change of Al Noor's name to "Mediclinic International plc";
(g) certain changes to Al Noor's articles of association to make provision for a South
African branch register and Al Noor's secondary listing on the JSE;
(h) the waiver of an obligation on the part of Remgro to make an offer for Al Noor
under Rule 9 of the UK Takeover Code (as contemplated by Note 1 of the Notes
on Dispensations from Rule 9) (the "Whitewash Resolution");
(i) the renewal of Al Noor's existing authorities under sections 551 and 571 of the UK
Companies Act so as to be appropriate for Al Noor as the holding company of the
Enlarged Group; and
(j) such other matters as may be agreed between Mediclinic and Al Noor as being
necessary or desirable in connection with the Combination (including the Special
Dividend and Tender Offer);
"Al Noor SA Prospectus" means the prospectus proposed to be published by Al Noor in
terms of section 99 of the SA Companies Act in connection with the Mediclinic Scheme;
"Al Noor Shareholders" means the holders of Al Noor Shares;
"Assets Transfer" means (if applicable) the transfer of certain assets from Mediclinics group
to the Al Noor group, to take effect immediately prior to the Effective Date;
"CIPC" means the South Africa Companies and Intellectual Property Commission,
established in terms of section 185 of the SA Companies Act;
"Enlarged Group Prospectus" means the prospectus required to be published by Al Noor
in connection with the Combination, and any reference in this announcement to the
"Enlarged Group Prospectus" shall be construed also as a reference to any supplementary
prospectus published (or required to be published) by Al Noor in connection with Combination;
"First Reduction of Capital" has the meaning given in the definition of "Al Noor Reductions";
"Group" means, in relation to any person, its subsidiaries, subsidiary undertakings and
holding companies and the subsidiaries and subsidiary undertakings of any such holding
company (but, in relation to Mediclinic and for the avoidance of doubt, does not include any
of the Mpilo trusts that are consolidated into Mediclinic's consolidated financial statements);
"Implementation Steps Plan" means the steps plan in relation to the implementation of
the Combination set out in schedule 5 to the Bid Conduct Agreement;
"JSE Listings Requirements" means the Listings Requirements of the JSE;
"Long Stop Date" means the date that is six months after the date of this announcement
(or such later date as the parties may agree in writing), provided that if (i) any person
entitled to give a notice under section 164(3) of the SA Companies Act has given such
notice within the period allowed therefore; and (ii) that person is able to satisfy the
requirements of section 164(5) of the SA Companies Act; and (iii) the date on which the
resolution of Mediclinic Shareholders to approve the Mediclinic Scheme or (if applicable)
the Assets Transfer is actually passed is fewer than 30 "business days" (within
the meaning of the SA Companies Act) before the Long Stop Date, the Long Stop Date
shall be deferred by such additional number of days as may be required to ensure that it
falls on the 31st "business day" (within the meaning of the SA Companies Act) after the
date on which such resolution was actually passed;
"Mediclinic Facility Agreement" means the credit facility agreement between, among
others, Mediclinic and FirstRand Bank Limited (acting through its Rand Merchant Bank
division) as agent dated on or about the date of this announcement;
"Mediclinic Group" means Mediclinic and its subsidiary undertakings;
"Mediclinic Resolutions" means the resolutions to be proposed to Mediclinic
Shareholders for the purpose of approving:
(a) the Assets Transfer;
(b) the Mediclinic Scheme;
(c) any financial assistance given by Mediclinic or its subsidiary undertakings in
connection with the Combination (including the Special Dividend and/or Tender Offer);
(d) to the extent required by applicable law or regulation or the JSE Listings
Requirements, any matter contemplated in the Implementation Steps Plan; and
(e) such other matters as may be agreed between Mediclinic and Al Noor as being
necessary or desirable in connection with the Combination (including the Special
Dividend and Tender Offer);
"Mediclinic Scheme Circular" means the circular to be posted to Mediclinic Shareholders
in relation to the Mediclinic Scheme and, if applicable, the Assets Transfer, and
including the form of proxy for use in respect of the general meeting of Mediclinic
Shareholders at which the Mediclinic Resolutions will be proposed and any form of
election in respect of the Mediclinic Scheme;
"Mediclinic Shareholders" means the holders of Mediclinic Shares;
"Regulatory Authority" means any court or competition, anti-trust, national, supranational
or supervisory body or other government, governmental, trade or regulatory agency or
body, in each case in any jurisdiction and including, without limitation, the UK Takeover
Panel, the SA Takeover Panel, the South African Reserve Bank, the JSE, the UK Listing
Authority and the CIPC;
"Remgro Subscriber" means Remgro Healthcare Holdings (Proprietary) Limited or, at its
election in accordance with the Subscription Agreement, one of its wholly-owned subsidiaries;
"Remgro Subscription" means the proposed subscription by the Remgro Subscriber for the
Subscription Shares at a fixed price of GBP8.32 per share to raise proceeds of GBP600 million;
"SA Companies Act" means the South African Companies Act, No. 71 of 2008;
"SA Court" means the High Court of South Africa (Western Cape High Court, Cape Town);
"SA Takeover Panel" means the South African Takeover Regulation Panel, established in
terms of section 196 of the SA Companies Act;
"Share Schemes" means the Al Noor Deferred Annual Bonus Plan 2013; the Al Noor Long
Term Incentive Plan 2013;
"Subscription Shares" means the 72,115,384 new Al Noor Shares to be subscribed for by
the Remgro Subscriber pursuant to the Subscription Agreement;
"Subscription Agreement" means the agreement entered into on or about the date of this
Agreement between Remgro Healthcare Holdings (Proprietary) Limited and Al Noor,
pursuant to which Remgro Healthcare Holdings (Proprietary) Limited agrees to subscribe
(or to procure that one of its wholly owned subsidiaries subscribes) for the Subscription
Shares, conditional on (among other things) the Mediclinic Scheme becoming effective in
accordance with its terms;
"UK Companies Act" means the Companies Act 2006 of England and Wales;
"UK Listing Authority" means the Financial Conduct Authority acting in its capacity as the
competent authority for the purposes of Part VI of the Financial Services and Markets Act 2000;
"UK Listing Rules" means the listing rules made by the UK Financial Conduct Authority
pursuant to Part 6 of the Financial Services and Markets Act 2000 and referred to in
section 73A(2) of that Act; and
"Whitewash Resolution" has the meaning given in the definition of "Al Noor Resolutions".
Date: 14/10/2015 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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