Canada Healthcare Acquisition Inc. Abandons Bid Due to Adverse Financial
Change in Northstar Healthcare Inc.

HOUSTON, TX, July 26 /CNW/ - Canada Healthcare Acquisition Inc. ("Canada Healthcare") has notified the Depositary under its May 26, 2010 offer (the "Offer") to acquire all the issued common shares ("Shares") of Northstar Healthcare Inc. ("Northstar") that the Offer has expired without all conditions to the Offer having been satisfied or waived and, as a result, the Offeror has terminated the Offer and will not be taking up any Shares under or extending the Offer. Accordingly, all Shares tendered under the Offer will be returned immediately to depositing shareholders.

The Offeror advised the Depositary today that, while the minimum tender condition was met by virtue of approximately 59% of the issued and outstanding Shares having been tendered, several other conditions to the Offer were not satisfied including the occurrence, subsequent to commencement of the Offer, of a material adverse change in Northstar's financial condition. This adverse change was the result of facts concerning Northstar's current and prospective financial condition that were disclosed to the Offeror by Northstar and which the Offeror has determined constitutes a "material adverse effect" which has reduced the anticipated economic value to the Offeror of the acquisition of Shares under the Offer.

The facts underlying the Offeror's determination to terminate the Offer were disclosed to representatives of the Offeror by representatives of Northstar on Thursday, July 15, 2010 in a telephone conversation and subsequent e-mail correspondence. Prior to that time, as disclosed in the Notice of Change to Directors' Circular dated July 19, 2010 issued by the board of directors of Northstar, representatives of the Offeror had been in discussions with representatives of Northstar with respect to a potential support agreement which, if executed, would have resulted in an increase in the consideration payable for Shares under the Offer and a resolution of certain other business issues between the parties, including a temporary moratorium on the arbitration proceedings, but not a termination of the claims themselves. Late in the day on July 15, 2010, and after all substantive issues under the support agreement had largely been resolved, the Offeror was advised by the Chairman of the board of directors of Northstar that, if the Offer was successful, Northstar's available cash at the corporate level at the end of July would be negative and the deficit would continue to grow through the end of August, with the result that Northstar itself would be unable to satisfy its obligations and would require a significant injection of cash. The Offeror was also advised that Northstar's publicly disclosed cash position at March 31, 2010 was not indicative of cash available to Northstar itself, because the consolidated cash balances included significant amounts of restricted cash at the Palladium and Kirby surgical centres that is not available to fund corporate expenses in Northstar.

Cautionary Note Regarding Forward-Looking Statements

Statements about the intentions of Canada Healthcare and the expected effects, timing and completion of the proposed transactions and all other statements in this release other than historical facts constitute forward-looking statements. The statements are not a guarantee as to future performance and involve risks and uncertainties that are difficult to predict. The statements are based upon Canada Healthcare's current knowledge and beliefs and are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements including, among other things, whether the conditions to the Offer will be satisfied, general economic factors, business and capital market conditions, general industry trends, changes in tax or other requirements and government regulation. There can be no assurance that any transaction will be consummated. Canada Healthcare and its affiliates disclaim any obligation to update or revise information in this news release based on new information or otherwise, unless required by law.

SOURCE CANADA HEALTHCARE ACQUISITION INC.

For further information: For further information: The Depositary for the Offer is: Equity Transfer & Trust Company, 200 University Avenue, Suite 400, Toronto, ON, M5H 4H1, North American Toll Free Phone: 1-866-393-4891; The Dealer Manager for the Offer is: Desjardins Securities Inc., 145 King Street West, Suite 2750, Toronto, ON, M5H 1J8, North American Toll Free Phone: 1-888-847-2164, Local 416-867-6000

Organization Profile

CANADA HEALTHCARE ACQUISITION INC.

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