Brookfield proposes to acquire all of your shares in Healthscope by way of a scheme of arrangement and simultaneous takeover offer.
Your Board has conducted an extensive review of the alternatives available to the company to maximise shareholder value.
Your Directors believe that the proposal presented here is very attractive and will realise significant value for all Healthscope shareholders.
Scheme of arrangement
The Brookfield proposal has several components, but the main one is a scheme of arrangement under which you will be entitled to receive $2.465 cash1 for each Healthscope share that you own.
This consideration is in addition to the fully franked interim dividend of $0.035 per share paid on 26 March 2019. The consideration under the scheme of arrangement together with the interim dividend is $2.50 per share.
This amount represents:
- a significant 40% premium to Healthscope's undisturbed closing share price of $1.785 on 22 October 2018;2
- an implied acquisition multiple of approximately 14.6 x Healthscope EBITDA for the 12 months ending 31 December 2018; and
- an implied equity value of $4.4 billion and enterprise value of over $5.7 billion.
The Scheme of Arrangement was approved by Healthscope’s shareholders on 22 May 2019 and the Federal Court of Australia on 24 May 2019. The Scheme of Arrangement became legally effective on 24 May 2019.
Healthscope shareholders on the share register on the scheme record date (being 7:00pm on Thursday, 30 May 2019) will be entitled to receive the scheme cash consideration of $2.465 per share. The cash consideration will be paid on Thursday, 6 June 2019.
Independent Expert's opinion
The Healthscope Directors appointed Grant Samuel & Associates Pty Limited as the independent expert to assess the merits of the transaction. The Independent Expert has concluded that the transaction is fair and reasonable, and therefore the scheme of arrangement is in the best interests of Healthscope shareholders.
A copy of the Independent Expert's Report is included in Annexure A of the Transaction Booklet.
Further information
If you have any questions or require further information in relation to the Transaction Booklet or the transaction generally, you should contact the Healthscope Shareholder Information Line on 1300 375 694 (within Australia) or +61 3 9415 4320 (outside Australia), between 8.30am and 5.00pm (Melbourne time), Monday to Friday.
If you are in any doubt as to what you should do, please consult your legal, financial, tax or other professional adviser without delay.
Notes:
1 A portion of the cash consideration payable under the scheme will be funded by a sale and leaseback by Healthscope of 22 hospital properties and a portion will be funded by way of third party debt financing arrangements. See Section 8.1 of the Transaction Booklet for further information on the sale and leaseback arrangements and Section 9.1(e) of the Transaction Booklet for further information on the third party debt financing arrangements.
2 Being the date prior to the announcement that Healthscope had received an indicative proposal from the BGH-AustralianSuper consortium for the acquisition of all Healthscope shares by way of a scheme of arrangement. The amount also represents a 14 cent per share premium to the BGH-AustralianSuper consortium's indicative proposal (which itself was highly conditional).