Union Diagnostic’s minority shareholders meet on N493m buyout offer

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Shareholders of Union Diagnostic and Clinical Services Plc are scheduled to meet this month to consider and vote on a proposal by a major shareholder in the healthcare company to buy out minority shareholders.

A healthcare investment firm, Cedar Advisory Partners Limited had launched a N492.75 million bid to acquire all equities stakes held by minority shareholders in Union Diagnostic and Clinical Services Plc.

Cedar, which holds 20.04 per cent equity stake Union Diagnostic, is offering to acquire the entire 39.62 per cent equity stake held by sundry minority retail shareholders. Cedar seeks to increase its shareholdings to 59.66 per cent after the transaction, making it the single largest shareholder in the company.

The Board of Union Diagnostic confirmed that it has received a binding offer from Cedar, seeking to acquire a total of 1.408 billion ordinary shares of 50 kobo each held by all minority shareholders at an offer price of 35 kobo.

Cedar holds 711.92 million ordinary shares of 50 kobo each. The transaction is being proposed through a scheme of arrangement.

At a court-order meeting scheduled for Ikeja, Lagos, shareholders are expected to vote on approval of scheme of arrangement dated Monday, December 7, 2020 and authorise the directors to consent to any modifications of the scheme of arrangement that the Federal High Court or any regulatory authority may deem fit to impose or approve.

For the purpose of giving effect to the scheme in its original form or with or subject to such modification, addition and condition agreed between the company and holders of its ordinary shares and approved or imposed by the court, shareholders are also expected to approve that the scheme shares as defined in the scheme document be transferred to Cedar Advisory Partners Limited and as such the holders of the scheme shares shall be paid a cash consideration as defined in the scheme document by Cedar Advisory Partners Limited for the transfer of the scheme shares.

According to the proposal, as consideration for the transfer of the scheme shares, each holder of the scheme shares shall receive 35 kobo per share.

The meeting is also expected to authorise the Board of Directors of Union Diagnostic to take steps and to consent to any modification of the scheme of arrangement that the Federal High Court shall deem fit to impose or approve.

The offer price of 35 kobo per share represented a premium of 75 per cent on the company’s last closing price on March 16, 2020 and 70.1 per cent on 90-day volume weighted average share price.

Directors of Union Diagnostic have said they had  considered the offer and recommended the offer to shareholders for consideration at the court ordered meeting, subject to the approval by relevant regulatory authorities.

Source: The Nation

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