Hills shares sink after merger delay
Business
Hills Limited shares have slumped more than 20 per cent after the company said it will delay the proposed merger of its health technology arm Hills Health Solutions with international healthcare technology leader, Lincor Solutions to form Lincor Limited.
Hills says market volatility has prompted it to postpone the planned Lincor IPO to raise the necessary capital until 2017, along with the demerger of Hills’ shares in Lincor to its eligible shareholders.
“Hills and Lincor Solutions Inc shareholders, however, remain committed to the merger given the significant synergies available to the combined business,” Hills said in a statement today.
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The proposed merger was announced in September, to an enthusiastic response from the market.
Lincor’s health technology is being installed at the new Royal Adelaide Hospital.
The announcement comes just over a week after the Hills annual general meeting during which chairman Jennifer Hill-Ling and CEO David Lenz gave no indication of the impending delay.
Lenz told the AGM that “the strategic relationship with Lincor continued to drive new business opportunities for Hills in FY16 with the New Royal Adelaide Hospital being a significant win for the relationship”.
“As outlined by Jennifer, Hills announced that subject to shareholder approval, the Hills Health Solutions (“HHS”) business will be merged with Lincor Inc. (“Lincor Solutions”) to form a newly incorporated company, Lincor Limited, which will be listed on the ASX,” he said.
Last week InDaily reported that Hills had sacked most of its Adelaide accounts workforce, with 18 jobs to be sent offshore to India.
– with AAP
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