AYYAN Investment to acquire 26.43% of Al-Ahsa Medical Services via share swap

Logo of Ayyan Investment 

AYYAN Investment Co. inked a share purchase agreement, on April 15, 2021, with a number of shareholders to buy non-controlling stakes in Al-Ahsa Medical Services Co. via share swap, the company said in a bourse filing.

The agreement was inked with Al-Othman Holding Co., Saad Abdulaziz Al-Hussein and Sons Co., Ibrahim Abdullah Al-Afaleq and Sons Co. and Rashid Saad Al-Rashid to buy their entire stakes in Al-Ahsa, representing 26.43% or 3.96 million shares, in return for issuing new shares.

The share swap ratio will reach 1.741-for-1, the statement added.

Accordingly, AYYAN’s capital will be increased from SAR 737.3 million to SAR 806.36 million by issuing 6.9 million new shares. Thus, its share capital will rise by 9.4% from 73.7 million shares to 80.6 million shares.

Ayyan’s ownership in Al-Ahsa will reach 96.37% after the capital increase, while the direct and indirect ownership of Al-Ahsa selling shareholders will reach 33.41%.

Al-Ahsa Medical Services Co. is valued at SAR 420.01 million, and the total value of the acquisition deal will reach SAR 111.02 million.

The company’s valuation was based on the average daily closing price for the last 60-day period from Sept. 28 to Dec. 20, 2020, preceding the start of the acquisition talks. Therefore, Ayyan’s fair market value stood at SAR 1.19 billion, or SAR 16.08 per share.

After the acquisition is completed, the ownership of current shareholders, excluding direct and indirect ownership of Al-Ahsa selling shareholders, will drop from 72.83% to 66.59%, which will also diminish the voting power of the current shareholders.

Al-Ahsa selling shareholders are entitled to terminate the agreement in case the average closing price of the company's shares drops below SAR 16.08 for five consecutive days, at any time between the signing date and two days before the company’s extraordinary general meeting (EGM).

Related parties include Adel bin Ahmed Al-Saleh (Al-Ahsa board member) and Ahmed bin Abdullah Al-Khayyal, a senior executive in one of Al-Othman Holding Co.’s subsidiaries.

The agreement will be terminated in case its terms are not fulfilled within 180 days from the signing date.

The acquisition deal is subject to regulatory approvals, the statement added.

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