In a significant development, Advanced Health Limited has entered into an agreement with Eenhede Konsultante Eiendoms Beperk (“Eenhede Konsultante”) to make an offer for the acquisition of all issued shares of Advanced Health. The offer, set to be executed through a scheme of arrangement, excludes shares held by VC Family Trust, Carl Grillenberger Family Trust, and Pres Medical Witbank Proprietary Limited. The proposed offer consideration stands at 80 cents per Advanced Health share. If successfully implemented, the scheme will result in Advanced Health’s delisting from the Johannesburg Stock Exchange (JSE).
Since its listing on the JSE in 2014, Advanced Health has strived to attract substantial institutional interest, allowing access to institutional investment funding and utilizing shares as acquisition currency. However, the company has faced challenges in achieving these objectives due to regulatory processes and ongoing compliance costs associated with being listed on the JSE. Furthermore, Advanced Health’s capital-raising efforts have been impeded by the lack of investment interest in small, illiquid counters, as well as the shares’ trading below their underlying net asset value, making any market-value capital raise significantly dilutive for existing shareholders. Recognizing these limitations, the board of directors believes that the costs of maintaining a JSE listing outweigh the benefits and that the company’s capital needs will be better served in an unlisted environment in the medium to long term.
In an effort to provide shareholders with the opportunity to realize their investments in Advanced Health at a price significantly higher than recent trading averages, the board has proposed the scheme of arrangement. The offer consideration of 80 cents per share represents an attractive premium. The board of directors also acknowledges that the company’s smaller asset base and the need to reduce overhead costs no longer justify its continued listing on the JSE, given the current lack of investment interest in small, illiquid counters.
To proceed with the scheme, the requisite majority of Advanced Health shareholders must approve the scheme resolution, and potential court approval may be required. Additionally, the scheme’s implementation is contingent upon the issuance of a compliance certificate by the Takeover Regulation Panel (TRP), which will only be granted once the conditions precedent are met or waived.
At present, Eenhede Konsultante and the Excluded Shareholders collectively hold approximately 71.13% of the issued shares of Advanced Health. Moreover, several shareholders, including Bremer Investments Proprietary Limited, John Biccard, Fiona Biccard, and Rendement Proprietary Limited, have expressed their irrevocable undertakings to vote in favor of the scheme and subsequent delisting.
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