CML HealthCare Announces Takeover Proposal of $9.00 per Unit for Medisys Health Group Income Fund



    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
    ---------------------------------------------
    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.

    %SEDAR: 00020333E




For further information:

For further information: Barry Hildred or Bruce Wigle, Investor
Relations, The Equicom Group Inc., (416) 815-0700 ext 224 ext 228, (416)
815-0080 fax, Email: bhildred@equicomgroup.com or bwigle@equicomgroup.com; Tom
S. Weber, CA, Chief Financial Officer, CML HealthCare Income Fund, (905)
565-0043, (905) 565-2844 fax, Internet: www.cmlhealthcare.com

Organization Profile

CML HEALTHCARE INC. (FORMERLY CML HEALTHCARE INCOME FUND)

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