Statement re Possible Offer

RNS Number : 0580F

The MedicX Fund Limited

17 May 2013

 



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

THIS IS AN ANNOUNCEMENT FALLING UNDER RULE 2.4 OF THE CITY CODE AND DOES NOT CONSTITUTE AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER OR TO PURSUE ANY OTHER TRANSACTION UNDER RULE 2.7 OF THE CITY CODE ON TAKEOVERS & MERGERS (THE "CODE"). ACCORDINGLY, ASSURA SHAREHOLDERS ARE ADVISED THAT THERE CAN BE NO CERTAINTY THAT A FORMAL OFFER FOR ASSURA WILL BE MADE

FOR IMMEDIATE RELEASE

17 MAY 2013

MEDICX FUND LIMITED ("MEDICX" OR THE "COMPANY")

POSSIBLE OFFER FOR ASSURA GROUP LIMITED ("ASSURA")

The Board of MedicX notes the announcement by Assura.

The Board of MedicX confirms that it has made a proposal to Assura regarding an all-share offer for the entire issued share capital of Assura on the basis of 1 MedicX Share for every 2.05 Assura Shares (the "Possible Offer").  Based on closing mid-market prices on 16 May 2013, the Possible Offer represents a price of 40 pence per Assura Share and a premium of 10.3 per cent.  This ratio is predicated upon Assura neither declaring nor paying any dividends, save for the usual quarterly dividend of up to 0.3025 pence in respect of the period to 30 June 2013.

There can be no certainty that any offer will ultimately be made and MedicX reserves the right to reduce the offer terms with the consent of Assura and to waive any conditions to the making of an offer for Assura.

The Board of MedicX believes that a combination of MedicX and Assura would create substantial value for the shareholders of both companies and offers Assura shareholders the opportunity to benefit from:

·     a premium valuation for their current shareholding;

·     a share of the synergies that the Board of MedicX expect from the combination which it believes will be reflected in enhanced future performance;

·     an increased dividend income stream as a result of maintaining MedicX's dividend policy, benefiting from the strong cash flow and strengthened balance sheet of the enlarged group; and

·     a meaningful holding in a well-capitalised company with a Premium Listing on the Official List, which has significant future growth prospects.

The Board of MedicX believes that the transaction would provide an excellent opportunity for both MedicX and Assura shareholders to participate in a combined business, which will be one of the major players in the medical property industry providing primary care services to approximately five per cent. of the UK population, with good short-term prospects and excellent long-term revenue, profit, dividend and asset value drivers.

The combination has the strong support of Assura's leading shareholders, Somerston and Invesco, who between them hold approximately 48% of Assura's issued share capital.  They have indicated their support in respect of their entire shareholdings in the form of irrevocable undertakings and letters of intent to accept, or procure acceptance of, the Possible Offer, if made, relating to, in total, 29.98% and 18.03% respectively of Assura's issued share capital. Further, for the duration of their irrevocables, they have agreed a standstill including not to accept any other offer.   Somerston has additionally agreed not to dispose of any MedicX shares received as consideration under any offer, except in limited circumstances, for a period of 12 months from completion of such offer. Further details of these commitments are set out in Appendix C to this announcement.

The making of any offer by MedicX remains subject to due diligence and certain other conditions (including recommendation of the offer by the Board of Assura).

There can be no certainty that any offer will ultimately be made and MedicX reserves the right to reduce the offer terms with the consent of Assura and to waive any conditions to the making of an offer for Assura.

This announcement does not amount to a firm intention to make an offer and, accordingly, there can be no certainty that any offer will be made even if the pre-conditions are satisfied or waived.

This announcement has been made without the agreement or approval of Assura. In accordance with Rule 2.6(a) of the Code, MedicX is required, by not later than 5.00 p.m. on 14 June 2013, to either announce a firm intention to make an offer for Assura in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline can be extended with the consent of the Panel in accordance with Rule 2.6(c) of the Code. 

Further announcements will be made as appropriate.

David Staples, Chairman of MedicX, said: 

"The approach to Assura has been made after careful consideration and with the very strong support of Assura's leading shareholders representing over 48% of Assura's shares.  There is a strong natural fit between MedicX and Assura and we believe that the proposed transaction would bring considerable benefits to shareholders in both companies."

Robert Provine, Managing Director of Somerston Capital, representing Assura's largest shareholder, said: 

"This transaction would create a best in class medical property group, well placed to benefit from the evolving demographics in the UK and enhance long-term shareholder value and sustainable income well into the future.  The Somerston Group is pleased to continue to act as a catalyst for consolidation within the UK medical sector through the creation of larger, stronger and more diversified companies.  We fully support the transaction and look forward to continuing as an investor in the enlarged group."

Enquiries:

MedicX Group                                                               

Keith Maddin, Chairman

Mike Adams, Chief Executive Officer

Mark Osmond, Chief Financial Officer

Tel: [phone]

MedicX Fund Limited

David Staples, Chairman

Tel: [phone]

Buchanan Communications

Charles Ryland / Gabriella Clinkard

Tel: [phone]

Canaccord Genuity Limited

Edward Arkus

Tel: [phone]

Andrew Zychowski

Tel: [phone]

A copy of this announcement will be available, subject to certain restrictions, at www.medicxfund.com

Canaccord Genuity Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as financial adviser to MedicX and no-one else and will not be responsible to anyone other than MedicX for providing the protections afforded to clients of Canaccord Genuity Limited or for advising any such person in relation to any matter referred to herein.

Forward looking statements in this announcement should not be interpreted to mean that earnings per share will necessarily be greater than those for the relevant preceding financial period.

Further information

This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase or otherwise acquire any securities, or the solicitation of any vote or approval in any jurisdiction.  Any offer will be made solely by certain offer documentation which will contain the full terms and conditions of any offer, including details of how it may be accepted. 

This announcement has been prepared in accordance with English law and the Code and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England. 

The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom and the availability of any offer to shareholders of Assura who are not resident in the United Kingdom may be affected by the laws or regulations of any such jurisdictions.  Accordingly, any persons who are subject to the laws or regulations of any jurisdiction other than the United Kingdom and any shareholders of Assura who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements. 

This announcement contains a number of "forward-looking statements" relating to Assura and MedicX and the business sectors in which they operate.  Generally the words "will", "may", "should", "continue", "believes", "expects", "intends", "anticipates", "forecast", "plan", "project", "future", "prospects" and "policy" or similar expressions identify forward-looking statements.  Such statements reflect the relevant company's or person's current views with respect to future events and are subject to risks, assumptions and uncertainties that could cause the actual results to differ materially from those expressed or implied in the forward-looking statements.  Many of these risks, assumptions and uncertainties relate to factors that are beyond the relevant company's or person's ability to control or estimate precisely, such as future market conditions, changes in general economic and business conditions, changes in government policy, the introduction of competitors and the behaviour of other market participants.  There can be no assurance that such forward-looking statements will prove to have been correct.  You should not, therefore, place undue reliance on these forward-looking statements, which speak only as at the date of this announcement. 

Appendix A - Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.2.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on [phone] if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Appendix B - Definitions

Assura	Assura Group Limited
Assura Shares	ordinary shares of 10p each in the capital of Assura
Code	City Code on Takeovers and Mergers
Invesco	Invesco Asset Management Limited
MedicX	MedicX Fund Limited
MedicX Shares	ordinary shares of no par value in the capital of MedicX
Panel	the Panel on Takeovers & Mergers
Somerston	Somerston Investments Limited and its concert parties

Appendix C - Irrevocable Undertakings and Letters of Intent

Somerston and Invesco have given irrevocable undertakings and letters of intent to accept, or procure acceptance of, the Possible Offer, if made, in respect of the following Assura Shares:

Irrevocable Undertakings

Name	Number of Assura Shares	Percentage of the issued share capital of Assura
Somerston	79,379,384	14.99%
Invesco	79,400,000	14.99%
Total	158,779,384	29.98%

Letters of intent

Name	Number of Assura Shares	Percentage of the issued share capital of Assura
Somerston	78,120,615	14.75%
Invesco	17,383,097	3.28%
Total	95,503,712	18.03%

The irrevocable undertakings and letters of intent are conditional on, among other things, the following:-

1.1             in the case of Somerston, (i) the offer (if made) being on terms substantially the same as those set out in the approach made to Assura comprising, inter alia, an exchange ratio based on 1 MedicX share for every 2.05 Assura shares predicated upon Assura neither declaring nor paying any dividends save for the usual quarterly dividend of up to 0.3025 pence in respect of the period to 30 June 2013; and (ii) certain changes being made to the investment advisory agreement with MedicX Adviser Limited with effect from completion of any offer (if made).  Somerston also agrees not to dispose of any MedicX shares received as consideration under any offer, except in limited circumstances, for a period of 12 months from completion of such offer; and

1.2             in the case of Invesco, the offer (if made) being (i) at a price of no less than 36 pence per Assura ordinary share calculated by reference to the closing mid-market price per MedicX Share on the trading day immediately preceding any announcement by MedicX of a firm intention to make an offer for Assura under Rule 2.7 of the Code ("2.7 Announcement") and (ii) on terms no less favourable in all material respects than those set out in the approach made to Assura.

The irrevocable undertakings will lapse and have no further effect, inter alia, if:-

1.3             MedicX confirms to Assura and/or to Somerston or Invesco (as the case may be) in writing that it no longer intends to proceed with an offer for Assura or makes an intention not to make an offer statement and/or is regarded by the Panel as being bound by Rule 2.8 of the Code;

1.4             the offer, when made, lapses or is withdrawn;

1.5             in the case of Somerston, a 2.7 Announcement on terms as to consideration and other material terms that reflect those of the approach is not released by 7.30 a.m. on 5 July 2013;

1.6             the offer document (or, as the case may be, a scheme document) is not posted to shareholders of Assura within: (i) in respect of Somerston, 28 days (or such longer period as the Panel may agree being not more than six weeks) after the date of any 2.7 Announcement; or (ii) in respect of Invesco by 25 June 2013 (or such longer period as is agreed in writing);

1.7             in the case of Invesco, any offer has not become unconditional as to acceptances within seven weeks, or any scheme has not become effective within ten weeks, (as the case may be) of the date of any 2.7 Announcement; or

1.8             a third party announces a firm intention to make a general offer for Assura on terms which: (i) in the case of Somerston, represent (in the reasonable opinion of Canaccord Genuity Limited), an improvement of 15 per cent. or more in the value of the consideration offered (unless within 15 business days, the value of the consideration payable by MedicX under its offer is increased to or above the level of such third party offer); and (ii) in the case of Invesco, represent (in Invesco's reasonable opinion), an improvement of 10 per cent. or more in the price per Assura share offered (unless within 5 business days, the value of the consideration payable by MedicX under its offer is announced by MedicX as increased to or above the level of such third party offer).

Appendix D - Notes to Editors

Information on MedicX Fund Limited

MedicX Fund Limited (the "Company", or together with its subsidiaries, the "MedicX Group") is a specialist primary care infrastructure investor in modern, purpose-built primary healthcare properties in the United Kingdom, listed on the London Stock Exchange, with a portfolio comprising 107 properties.

The Investment Adviser to the Company is MedicX Adviser Ltd, which is authorised and regulated by the Financial Conduct Authority and is a subsidiary of the MedicX Group. The MedicX Group is a specialist investor, developer and manager of healthcare properties with 31 people operating across the UK.

The Company's website address is www.MedicXfund.com. Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

Information on Somerston

The Somerston Group is a privately owned investment company focusing on operational real estate businesses including retail, healthcare, hotels and agriculture. The Group is active in the UK, Europe and North America.

Somerston has a long term investment time horizon as evidenced by its track record over the past several decades with hold periods often exceeding 10 years. Somerston is a strategic investor and supporter of consolidation within the UK medical property sector having participated in the founding of Assura in 2003, made a further investment in 2009/2010 taking the Group's interest to 29.9% and facilitating Assura's subsequent merger with AH Medical Properties plc in 2011.

Somerston has been a consistent proponent of the creation of a leading UK medical property investment company with assets of over £1bn. The proposed merger of MedicX and Assura achieves this objective while also delivering a best in class management team, asset portfolio, responsible gearing and quasi-government, inflation-protected income.

 

END

 

 

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