OUE Healthcare Limited has made a conditional exit offer to Healthway Medical Corporation’s (HMC) shareholders at 4.8 cents per share, sending its shares up 39.4% to close at 4.6 cents on July 3.
Should the offer go through, HMC will be delisted from SGX’s Catalist board. Under the delisting proposal, Oversea-Chinese Banking Corporation (OCBC), on behalf of OUE LJ3 Healthcare, made the offer to acquire all the issued ordinary shares which it does not own in HMC.
As at July 3, OUE Healthcare holds about 42.28% of the total number of shares in the latter.
Assuming that the offer is fully accepted by HMC’s shareholders, OUE Healthcare will be acquiring 1.38 billion shares, or 30.36% of the total number of shares in the former. At its offer price, this translates to a total consideration of $66.1 million.
According to the joint announcement on July 3, the exit offer is a way for OUE Healthcare to strengthen its regional healthcare ecosystem. Its current regional healthcare ecosystem comprises a respiratory and cardiothoracic specialist group with 11 specialist doctors and two cardiothoracic surgeons in Singapore. The group also has two operating hospitals and one hospital under development in China, three hospitals, two medical towers and three primary care clinics in Myanmar as well as a controlling stake in First Real Estate Investment Trust AW9U .
Furthermore, HMC is a respected medical group that has over 30 years of experience in Singapore healthcare with over 100 clinics and medical centres in its network. As such, the offer complements and is synergistic with OUE Healthcare’s existing healthcare businesses in the region.
“The exit offer is a milestone step for OUE Healthcare in our journey to build an integrated and seamless regional healthcare ecosystem centred on Singapore’s renowned medical excellence,” says OUE Healthcare’s chairman Lee Yi Shyan.
“The exit offer is complementary to and synergistic with OUE Healthcare’s existing healthcare businesses in the region. HMC can leverage on OUE Healthcare’s regional ecosystem for growth opportunities whilst OUE Healthcare can integrate with HMC’s network to tap into the growing Singapore healthcare market,” adds Yet Kum Meng, CEO of OUE Healthcare.
The exit offer and delisting are conditional as HMC needs to obtain the approval of its shareholders. HMC will also need to obtain its shareholders’ approval for certain proposed amendments to its constitution. The approvals will be sought at an extraordinary general meeting (EGM) to be convened.
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HMC’s delisting will also be conditional upon SGX’s approval.
Finally, the exit offer and delisting will require OUE Healthcare to receive valid acceptances of shares that carry over 50% of the voting rights attributable to the total shares outstanding as at the close of the offer.
The offer price proposed represents a 45.5% premium over the volume-weighted average price (VWAP) per share for the one-month period of the shares traded in HMC.
