MISSISSAUGA, ON, Sept. 27 /CNW/ - CML HealthCare Income Fund ("CML HealthCare") (TSX: CLC.UN) today announced it has sent the Board of Trustees of Medisys Health Group Income Fund (TSX: MHG.UN) ("Medisys") a letter indicating CML HealthCare's willingness to make a takeover bid of $9.00 per unit for 100% of Medisys. CML HealthCare's proposed $9.00 per unit takeover bid represents: i) a premium of 42.4% over the $6.32 closing price of Medisys' units on the Toronto Stock Exchange prior to the Elman family, Medisys' controlling securityholder, announcing their proposal to take Medisys private at $7.00 per unit; and ii) a premium of 28.6% over the $7.00 per unit privatization offer from the Elman family.
The proposed takeover bid of $9.00 per unit would be subject to CML HealthCare acquiring not less than 66 2/3% of Medisys' outstanding units on a fully diluted basis, including Dr. Sheldon Elman and any other holders exchanging all of the Class B Holding LP Units of Medisys Holding LP for units of Medisys and tendering such units to the takeover bid. The tender condition of the Elman family holdings is required as a result of Medisys' current structure, which provides that as long as the Elman family holds at least 15% of the Medisys Holding LP, the Elman family will retain control of Medisys and its operating entities indefinitely. As a pre-condition of the takeover bid being made, the holders of Class B Holding LP Units would need to agree to tender to the takeover bid. The takeover bid would also be subject to customary conditions, including due diligence.
Since August 24, 2007, CML HealthCare has conducted good faith discussions with the Elman family to explore a number of potential transactions. These transactions included a non-binding offer for 100% of Medisys and a proposal to acquire certain specified assets of Medisys. On September 24, 2007, CML HealthCare advised Medisys in writing that, despite its desire to explore alternative transactions, it could not engage in any further discussions as a result of certain required terms and conditions.
"We are disappointed that following several weeks of discussions with the Elman family, it became clear to CML HealthCare that a transaction on acceptable terms, including an appropriate and reasonable standstill agreement, was not possible. We have therefore made a proposal directly to the Medisys Board of Trustees. The Elman family tender provision is essential for CML HealthCare to include in its proposal in order to secure operating and corporate governance control," said Paul Bristow, President and CEO of CML HealthCare. "Our takeover bid proposal represents superior value for Medisys unitholders and we believe a combination of our two operations would enhance value for all of CML HealthCare's stakeholders."
Caution concerning forward-looking statements
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Statements made in this news release, other than those concerning historical financial information, may be forward-looking and therefore subject to various risks and uncertainties. Some forward-looking statements may be identified by words like "may", "will", "anticipate", "estimate", "expect", "intend", or "continue" or the negative thereof or similar variations. Readers are cautioned not to place undue reliance on such statements, as actual results may differ materially from those expressed or implied in such statements. Factors that could cause results to vary include, but are not limited to: dependence on government-based revenues; pending and proposed legislative or regulatory developments including the impact of changes in laws, regulations and the enforcement thereof; intensifying competition from established competitors and new entrants in the businesses in which we operate; technological change; interest rate fluctuations and general economic conditions; insurance coverage of sufficient scope to satisfy any liability claims; fluctuations in operating results; dependence on our operating subsidiary to pay its interest obligations; fluctuations in cash distributions and capital investment; management of credit, market, liquidity and funding and operational risks; judicial judgments and legal proceedings; our ability to complete strategic acquisitions and to integrate our acquisitions successfully; changes in accounting policies and methods we use to report our financial condition, including uncertainties associated with critical accounting assumptions and estimates; operational and infrastructure risks including possible equipment failure and performance of information technology systems; fluctuations in total patient referrals; loss of services of key senior management personnel; other factors that may affect future growth and results including, timely development and introduction of new products and services; changes in our estimates relating to reserves and allowances; future sales of units; changes in tax laws; technological changes and obsolescence, natural disasters, the possible impact on our businesses from public health emergencies, international conflicts and other developments including those relating to terrorism; and our success in anticipating and managing the foregoing risks.
We caution that the foregoing list of factors is not exhaustive and that when reviewing our forward-looking statements, investors and others should refer to the "Risk Factors" section of the Fund's Annual Information Form, the "Risks and Uncertainties" and other sections of our Management's Discussion and Analysis of Operating Results and Financial Position and our other periodic filings with Canadian securities regulatory authorities. All forward-looking statements presented herein should be considered in conjunction with such filings. The Fund does not undertake to update any forward-looking statements; such statements speak only as of the date made.
About CML HealthCare Income Fund
CML HealthCare Income Fund is an unincorporated open-ended trust that owns CML HealthCare Inc., one of Canada's largest healthcare services businesses. CML is a leading provider of laboratory testing services in Ontario and the largest private provider of medical imaging services in Canada. CML HealthCare Income Fund is publicly traded on the Toronto Stock Exchange under the symbol "CLC.UN" and has approximately 86.6 million units outstanding. To reach CML HealthCare Income Fund via the worldwide web log on to www.cmlhealthcare.com.
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