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Creso Pharma Makes Non-binding Indicative Proposal To Acquire Health House

HEALTH House International Ltd (ASX:HHI) (Health House or the Company), an international pharmaceutical distributor specialising in the distribution of medicinal cannabis products across Australasia, the United Kingdom and Europe, is pleased to announce that it has entered into a non-binding term sheet with Creso Pharma Limited (ASX: CPH) (Creso), under which it is proposed that Creso will acquire 100% of the shares in Health House by way of a scheme of arrangement to be undertaken by Health House (Scheme). The Scheme will be subject to shareholder and Court approval in accordance with the requirements of Part 5.1 of the Corporations Act 2001 (Cth).

The proposed transaction is subject to the Creso completing satisfactory due diligence on Health House’s businesses and the satisfaction of a number of other conditions standard for transactions of this nature.

Under the Scheme, Creso will issue approximately one (1) Creso share for every two (2) Health House shares held (subject to further negotiations and potential adjustments based on Health Houses debt levels) giving Health House shareholders an approximately 7.3% interest in the expanded capital of Creso, valuing Health House at $4,630,388 based on Creso’s current share price and representing a 67% premium to Health House’s market capitalisation based on the closing price of Health House shares prior to Health House’s voluntary suspension.

CPS Capital Group Pty Ltd is acting as Health House’s corporate advisor for the proposed merger. Further details are contained in an announcement by Creso (ASX:CPH) on 29 July 2022.

About Creso

The proposed merger of Health House with Creso will create a global organisation with strong medicinal cannabis production and distribution capabilities. Creso was created to bring pharmaceutical expertise and methodological rigour to the world of cannabis and deliver quality products to people and animals everywhere.

Founded by a team of highly-experienced pharmaceutical executives, Creso set out to leverage cutting edge science and research to develop, register and commercialize innovative cannabis and hemp derived products.

Creso develops cannabis and hemp-derived therapeutic, nutraceutical, animal and cosmetic products with wide patient and consumer reach for human and animal health.

Proposed Timetable

The indicative timetable for the completion of the proposed transaction is as follows:

  • 29 July 2022 Execution of non- binding terms sheet
  • 19 August 2022 Execution of scheme implementation deed
  • 16 September 2022 Draft scheme booklet given to ASIC for review
  • 30 September 2022 ASIC completes review
  • 7 October 2022 First court hearing
  • 7 October 2022 Despatch of scheme booklet to target shareholders
  • 4 November 2022 Scheme meeting of HHI shareholders
  • 11 November 2022 Second court hearing
  • 11 November 2022 Scheme effective date
  • 18 November 2022 Scheme record date
  • 25 November 2022 Scheme implementation date

Due diligence

The Board of Health House has determined that it is in the interests of the Company to grant Creso a period of three weeks to conduct due diligence to establish whether an acceptable binding transaction can be agreed.

Board Intentions

Based on current information, the Board intends to unanimously recommend that Shareholders vote in favour of the Scheme, subject to entry into an acceptable Scheme Implementation Deed, no superior proposal being received and an Independent Expert concluding (and continuing to conclude) that the Scheme is in the best interests of shareholders.

The Board notes that there is no certainty that the Creso proposal will result in a binding offer for Health House. At this time, Shareholders do not need to take any action in response to the Creso’s proposal.

Update on Proposed Capital Raising

Health House is currently in voluntary suspension pending an announcement in relation to a material capital raising. The Company notes the capital raising has been deferred while Health House pursues the proposed Scheme. The Company will remain in voluntary suspension.

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