Healthscope Board Unanimously Recommends Cash Offer of $6.26 Per Share From The Carlyle Group and TPG Capital

Melbourne, Australia - Healthscope announces today that it has entered into a Scheme Implementation Agreement (“SIA”) with funds advised by The Carlyle Group and TPG Capital (the “Consortium”) under which it is proposed the Consortium will acquire all of the ordinary shares in Healthscope under a Scheme of Arrangement (“Scheme”).

Under the terms of the Scheme, Healthscope shareholders will receive $6.26 in cash per share, valuing Healthscope at approximately $2.7 billion. The price will be reduced by any future dividends that Healthscope pays to shareholders prior to completion.

The Board of Healthscope unanimously recommends that Healthscope shareholders vote in favour of the Scheme at the Scheme meeting, in the absence of a superior proposal and subject to an independent expert concluding that the Scheme is in the best interests of Healthscope shareholders.

The price of $6.26 per share represents:

• A premium of 39% to the closing price of $4.50 on 13 May 2010, the day prior to the announcement that Healthscope had received an indicative proposal;
• A premium of 43% to the three month volume weighted average price prior to 13 May 2010 of $4.36;
• A premium of 46% to the closing price on 13 May 2010 adjusted for movements in the S&P/ASX 200 between 13 May 2010 and 16 July 2010 of $4.28; and
• A premium of 51% to the three month volume weighted average price prior to 13 May 2010 adjusted for movements in the S&P/ASX 200 between 13 May 2010 and 16 July 2010 of $4.15.

As previously announced on 31 May 2010, following receipt of a number of indicative and non-binding proposals the Board determined that it was in the interests of shareholders that a formal process be conducted to evaluate whether a change of control offer, at a price and on terms that the Board would recommend, could be secured. A comprehensive process was
established including access to due diligence materials for a number of interested parties to enable them to make binding proposals.

Following the receipt of proposals from parties after market close on 16 July 2010, the Board has concluded that the Consortium’s proposal provides the best outcome for Healthscope shareholders, both in terms of value and associated terms and conditions. The Board unanimously recommends the Scheme in the absence of a superior proposal and subject to an independent expert concluding that the Scheme is in the best interests of Healthscope shareholders. Subject to those same qualifications, each Director of Healthscope intends to vote all the Healthscope shares held or controlled by them in favour of the Scheme at the Scheme meeting.

The transaction is subject to certain conditions precedent including Healthscope shareholder and court approval of the Scheme and other regulatory approvals. A copy of the executed SIA entered into by Healthscope and the Consortium is attached to this announcement, which includes the conditions precedent for the Scheme and exclusivity provisions, including
providing for the payment of a break fee to the Consortium and a reverse break fee to Healthscope in certain circumstances. Importantly for Healthscope, under the SIA the Consortium has provided substantial financing certainty and there is limited conditionality for a transaction of this nature.

A Scheme booklet containing information relating to the proposed acquisition, reasons for the Directors’ unanimous recommendation, and details of the Scheme meeting is expected to be sent to Healthscope shareholders in September with a shareholder meeting to vote on the proposed Scheme to be held in early October. Subject to the approval of the Scheme by
shareholders and the court and the timely satisfaction (or waiver) of conditions, Healthscope expects the transaction to be completed by October.

Linda Nicholls, Healthscope Chairman, said: “Following the receipt of a number of approaches in May, the Board determined that it was in shareholders’ best interests that a formal process was undertaken to thoroughly evaluate whether a change of control offer, at a price and on terms that the Board would recommend, could be secured. This process has maximized shareholder value through encouraging competitive tension.

“After careful consideration the Board has unanimously concluded that the Consortium’s offer provides shareholders with an excellent opportunity to realise considerable value from their investment in Healthscope. Whilst the Board is of the strong belief that the Company is well positioned to continue to deliver strong growth for shareholders into the future, the Board
determined that the relative certainty delivered by this cash offer at a substantial premium was in the best interests of Healthscope shareholders.”

The Consortium comprises two of the world’s leading private equity firms, collectively managing over US$135 billion in equity capital. In addition, the members of the Consortium have a longstanding track record of investing in and growing businesses within the healthcare sector both in Asia and globally. We have been informed that that Consortium intends to retain management and support management’s strategy, business plans and growth initiatives for all parts of the business.

Healthscope is being advised by Goldman Sachs JBWere, Lazard and Minter Ellison.

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