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.
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
Ronald Lavater (CEO)
+971 2 406 6992
Dr. Sami Alom (CSO)
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.
Al Noor Hospitals Group Plc
(Incorporated in England and Wales)
Company Number 8338604
Share Code: ANH
ISIN: GB00B8HX8Z88
Mediclinic International Limited
(Incorporated in the Republic of South Africa)
Registration number 1983/010725/06
Share Code: MDC
ISIN: ZAE000074142
© Press Release 2015
