Atlanta, Georgia (February 10, 2004) -- SunLink Health Systems, Inc. (AMEX: SSY), announced today that its Board of Directors unanimously adopted a Shareholder Rights Plan in which preferred share purchase rights will be distributed to shareholders of the Company as a dividend at the rate of one Right for each Common Share held as of the close of business on February 10, 2004.
The Shareholder Rights Plan is designed to guard against inadequate or coercive takeovers and other abusive tactics that might be used in an attempt to gain control of the Company without paying all shareholders a fair price for their shares. The Rights Plan will not prevent takeovers, but is designed to deter such coercive takeover tactics and to encourage anyone attempting to acquire the Company to first negotiate with the Board.
Each Right will entitle shareholders to buy one one-hundredth of a Series A Preferred Share of the Company at an exercise price of $25. The Rights will be exercisable only if a person or group acquires beneficial ownership of 20% or more of the Company's outstanding Common Shares or commences a tender or exchange offer which, upon consummation, would result in such person or group being the beneficial owner of 20% or more of the Company's outstanding Common Shares.
If any person becomes the beneficial owner of 20% or more of the Company's Common Shares, or if a holder of 20% or more of the Company's Common Shares engages in certain self dealing transactions or a merger transaction in which the Company is the surviving corporation and its Common Shares remain outstanding, then each Right not owned by such person (or certain related parties) will entitle its holder to purchase, at the Right's then current exercise price, units of the Company's Series A Preferred Shares (or, in certain circumstances, Company Common Shares, cash, property or other securities of the Company) having a market value equal to twice the then current exercise price of the Right. In addition, if SunLink is involved in a merger or other business combination transactions with another person after which its Common Shares do not remain outstanding, or sells 50% or more of its assets or earning power to another person, each Right will entitle its holder to purchase, at the Right's then current exercise price, common shares of the ultimate parent of such other person having a market value equal to twice the then current exercise price of the Right.
SunLink will generally be entitled to redeem the Rights at $.001 per Right at any time until the tenth business day following public announcement that a person or group has acquired 20% or more of the Company's Common Shares.
Certain provisions of the Shareholder Rights Plan are outlined in a letter being mailed to all shareholders. The shareholder letter and shareholder rights plan summary can be found on SunLink's website at http://www.sunlinkhealth.com.
SunLink Health Systems, Inc. currently operates eight community hospitals and related businesses in the Southeast and Midwest. Each SunLink facility is the only hospital in its community. SunLink's operating strategy is to link patients' needs with dedicated physicians and health professionals to deliver quality, efficient medical care in each community it serves.
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, without limitation, statements regarding the Company's business strategy. These forward-looking statements are subject to certain risks, uncertainties and other factors, which could cause actual results, performance and achievements to differ materially from those anticipated. Certain of those risks, uncertainties and other factors are disclosed in more detail in the Company's Annual Report on Form 10-K for the year ended June 30, 2003.
