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HMI heads for privatisation by scheme of arrangement
HEALTH Management International (HMI) on Friday announced a joint bid with PanAsia Health Limited to privatise HMI by way of a scheme of arrangement that values HMI at approximately S$611 million.
PanAsia Health Limited is a special-purpose vehicle incorporated in the Cayman Islands and indirectly controlled by EQT Mid Market Asia III GP B.V. (EQT GP). If the privatisation is successful, HMI will become a wholly-owned subsidiary of PanAsia Health and will be delisted from the Singapore Exchange.
Under the scheme, each HMI shareholder will be entitled to receive for each HMI share either S$0.73 in cash, or one new ordinary share at the same price in PanAsia Health.
One condition for the second option is that no more than 686,218,454 HMI shares can be swapped for PanAsia Health shares.
The offer price represents significant premiums to the volume-weighted average price (VWAP) over the past few months. It is a premium of 29.7 per cent over the six-month VWAP, 27.4 per cent over the three-month VWAP and 24.8 per cent over the one-month VWAP.
HMI added that its closing share price has only exceeded the consideration offered by the scheme on one trading day since the company's listing in 1999.
"We welcome EQT as our partner in HMI," said Chin Wei Jia, HMI's group chief executive officer. "Given their deep experience across the various healthcare ecosystems globally, we believe they will add value to HMI's growth strategy to become one of the leading private healthcare providers in the region."
Said Brian Chang, partner at EQT Singapore and investment adviser to EQT QP: "EQT is excited by the opportunity to invest in a reputable private healthcare provider with a regional South-east Asian presence and high-quality management team.
"As a private equity investor with a demonstrated track record of success in the healthcare sector and in Asia, we are confident that EQT will be an ideal partner for HMI."
The scheme will require approval from a majority of HMI shareholders, representing not less than 75 per cent in value of HMI shares held by the shareholders present and voting either in person or by proxy at a meeting which will be convened to approve the scheme. It will also require sanction by the High Court.
PanAsia Health has received irrevocable undertakings from certain HMI shareholders representing approximately 61.8 per cent of total HMI shares as at July 5, to accept either the cash or securities considerations under the scheme and to vote in favour of it.
The exception among these shareholders is Nam See Investment (Pte) Ltd and its concert parties, who are obliged to and will abstain from voting. They hold approximately 39 per cent of the total HMI shares.
Excluding these parties, the total number of HMI shares eligible to vote at the scheme meeting is approximately 61 per cent of total HMI shares, and the other shareholders who have undertaken to vote in favour of the scheme comprise 22.8 per cent of total HMI shares. They will count towards 37.3 per cent of the eligible votes at the meeting.
HMI will appoint an independent financial adviser to advise its independent dirctors in making a recommendation to HMI shareholders about the scheme. Further details will be sent to shareholders in due course, and HMI expects to convene the scheme meeting by September or October 2019.
Credit Suisse is the sole financial adviser to the offeror.