TORONTO, Jan. 17,
2025 /CNW/ - Medical Facilities Corporation ("Medical
Facilities" or the "Corporation") (TSX: DR), announced today its
intention to commence a substantial issuer bid (the "Offer") to
purchase, for cancellation, a number of common shares of the
Corporation ("Common Shares") for an aggregate purchase price not
exceeding $80,750,000. The
Corporation anticipates that the Offer will commence on or about
January 20, 2025, and will expire at
11:59 p.m. (Toronto time) on February 24, 2025 (the "Expiry Date"), unless
extended, varied or withdrawn by Medical Facilities. All amounts
are expressed in Canadian dollars.
Medical Facilities determined to proceed with the Offer
following the completion of the Corporation's previously announced
sale of Black Hills Surgical Hospital, LLP, one of its specialty
surgical hospitals, a substantial portion of the net proceeds from
which will be distributed to shareholders in the Offer. Medical
Facilities is making the Offer because its Board of Directors
believes, based on a number of factors, including recommendations
from management, that the purchase of Common Shares is in the best
interests of the Corporation and represents an appropriate use of
its available cash on hand in furtherance of the Corporation's
corporate strategy to return capital to shareholders. After
giving effect to the Offer, Medical Facilities will continue to
have sufficient financial resources and working capital to conduct
its ongoing business and operations in accordance with its stated
strategy.
Details of the Offer
Details of the Offer, including instructions for tendering
Common Shares, will be included in the formal offer to purchase and
issuer bid circular, letter of transmittal and the notice of
guaranteed delivery (collectively, the "Offer Documents"). The
Offer Documents will be mailed to shareholders and filed with
applicable Canadian securities regulatory authorities on or about
January 20, 2025, and made available
without charge on SEDAR+ at www.sedarplus.com, as well as posted on
the Corporation's website at www.medicalfacilitiescorp.ca.
Shareholders should carefully read the Offer Documents prior to
making a decision with respect to the Offer.
Auction Process
The Offer will proceed by way of a "modified Dutch auction".
Shareholders who wish to participate in the Offer will be able to
do so through either one of the two following options: (i) auction
tenders, which will allow shareholders who choose to participate in
the Offer to individually select the price, within a range of not
less than $15.50 and not more
than $17.00 per Common Share (in
increments of $0.10 per Common
Share), at which they are willing to sell their Common Shares, or
(ii) purchase price tenders in which participating shareholders
will agree to have a specified number of Common Shares purchased at
a purchase price to be determined pursuant to the auction and have
their Common Shares considered as having been tendered at the
minimum price of $15.50 per
Common Share. Shareholders who validly deposit Common Shares
without specifying the method in which they are tendering such
Common Shares will be deemed to have made a purchase price
tender.
Purchase Price Determination
Upon expiry of the Offer, Medical Facilities will determine the
purchase price of the Common Shares (the "Purchase Price") (which
will not be less than $15.50 per
Common Share and not more than $17.00
per Common Share) that will allow it to purchase the maximum number
of Common Shares properly tendered to the Offer pursuant to the
auction tenders and the purchase price tenders outlined above, with
an aggregate purchase price under the Offer not exceeding
$80,750,000. All Common Shares
purchased by the Corporation pursuant to the Offer (including
Common Shares tendered at prices below the Purchase Price) will be
purchased at the same Purchase Price, subject to the terms and
conditions of the Offer Documents. Common Shares not taken up in
connection with the Offer, including Common Shares deposited
pursuant to auction tenders at prices above the Purchase Price,
will be returned to the shareholders.
As of today's date, Medical Facilities has 22,932,462 Common
Shares issued and outstanding. If the Purchase Price is determined
to be $15.50 per Common Share
(which is the minimum price per Common Share under the Offer), the
maximum number of Common Shares that may be purchased by the
Corporation is 5,209,677 Common Shares or approximately 22.7% of
the total number of Common Shares issued and outstanding. If the
Purchase Price is determined to be $17.00 per Common Share (which is the maximum
price per Common Share under the Offer), the maximum number of
Common Shares that may be purchased by the Corporation is 4,750,000
Common Shares or approximately 20.7% of the total number of Common
Shares issued and outstanding.
No director, officer or insider of the Corporation has advised
the Corporation that he, she or it intends to deposit Common Shares
under the Offer. However, they may decide to deposit Common Shares
to the Offer in the event that the circumstances or decisions of
any such persons change and, subject to applicable securities laws,
such persons may sell their Common Shares through the facilities of
the Toronto Stock Exchange (the "TSX") or otherwise during the
period prior to the Expiry Date.
The Offer is not conditional upon any minimum number of Common
Shares being properly deposited under the Offer. The Offer is,
however, subject to other conditions and Medical Facilities
reserves the right, subject to applicable laws, to withdraw, extend
or vary the Offer if, at any time prior to the payment of any
Common Shares, certain events occur.
The Corporation was authorized by the TSX to purchase up to
2,339,066 Common Shares pursuant to a normal course issuer bid (the
"NCIB") that commenced on December 1,
2024, and expires on November 30,
2025. The Corporation has purchased 459,900 Common Shares
through the NCIB. There will be no further purchases of Common
Shares under the NCIB until after the expiry of the Offer or date
of termination of the Offer.
Medical Facilities has engaged National Bank Financial to act as
financial advisor, Shorecrest Group Ltd. to act as information
agent and Computershare Investor Services Inc. to act as depositary
for the Offer. Any questions or requests for information regarding
the Offer may also be directed to the information agent or
depositary.
This press release is for informational purposes only and does
not constitute an offer to buy or the solicitation of an offer to
sell Medical Facilities' Common Shares. The solicitation and the
offer to buy the Common Shares will only be made pursuant to the
Offer Documents to be filed with the applicable securities
regulatory authorities in Canada.
The Offer will be optional for all shareholders, who will be free
to choose whether to participate, how many Common Shares to tender
and, in the case of auction tenders, at what price to tender within
the specified range. Any shareholder who does not deposit any
Common Shares (or whose Common Shares are not repurchased under the
Offer) will realize a proportionate increase in its percentage
equity interest in Medical Facilities, to the extent that Common
Shares are purchased and cancelled under the Offer. The Offer will
not be made to, nor will tenders be accepted from or on behalf of,
holders of Common Shares in any jurisdiction in which the making or
acceptance of offers to sell Common Shares would not be in
compliance with the laws of that jurisdiction. Medical Facilities'
Board of Directors has approved the Offer. However, none of Medical
Facilities or its Board of Directors, the financial advisor,
information agent or the depositary makes any recommendation to any
shareholder as to whether to deposit or refrain from depositing any
or all Common Shares under the Offer. Shareholders are strongly
urged to review and evaluate carefully all information in the Offer
Documents, to consult their own financial, tax and legal advisors,
and to make their own decisions as to whether to deposit Common
Shares under the Offer. Shareholders should carefully consider the
income tax consequences of accepting the Offer and depositing
Common Shares under the Offer.
About Medical Facilities
Medical Facilities, in partnership with physicians, owns a
portfolio of highly rated, high-quality surgical facilities in
the United States. Medical
Facilities' ownership includes controlling interests in three
specialty surgical hospitals located in Arkansas, Oklahoma, and South
Dakota, and an ambulatory surgery center ("ASC") located in
California. The specialty surgical
hospitals perform scheduled surgical, imaging, diagnostic and other
procedures, including primary and urgent care, and derive their
revenue from the fees charged for the use of their facilities. The
ASC specializes in outpatient surgical procedures, with patient
stays of less than 24 hours. For more information, please visit
www.medicalfacilitiescorp.ca.
Caution concerning forward-looking
statements
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 and include statements about the Offer and the NCIB.
Certain material factors or assumptions are applied in making
forward-looking statements and actual results may differ materially
from those expressed or implied in such statements. Factors that
could cause results to vary include those identified in Medical
Facilities' filings with Canadian securities regulatory authorities
such as legislative or regulatory developments, intensifying
competition, technological change and general economic conditions.
All forward-looking statements presented herein should be
considered in conjunction with such filings. Medical Facilities
does not undertake to update any forward-looking statements; such
statements speak only as of the date made.
SOURCE Medical Facilities Corporation
