SunLink Health Systems, Inc. Announces Preliminary Results for Tender Offer

SunLink Health Systems, Inc. (NYSE American: SSY) announced today the preliminary results of its tender offer (the “Offer”) which expired at midnight, New York City Time, on December 21, 2017. In the Offer, SunLink offered to purchase up to $2,500,000 of its common shares at a price of $1.60 per share.

Based on the preliminary count by American Stock Transfer & Trust Company, the depositary for the Offer, approximately 3,725,713 common shares of SunLink were properly tendered and not withdrawn. In accordance with the terms and conditions of the Offer and based on a preliminary count by the Depositary, the Company expects to accept for payment a total of approximately 1,745,751 SunLink common shares at a price of $1.60 per share, for a total cost of approximately $2,793,202, excluding fees and expenses relating to the Offer. These shares represent approximately 19.05% of the Company’s total outstanding common shares as of December 21, 2017. The common shares of SunLink expected to be purchased include the approximately 1,562,500 shares the Company initially offered to purchase and approximately 183,251 additional common shares that the Company has elected to purchase pursuant to its right to purchase up to an additional 2% of its outstanding common shares.

Because the Offer is oversubscribed, the Company expects to purchase only a prorated portion of the shares properly tendered by each tendering stockholder (other than “odd lot” holders whose shares will be purchased on a priority basis) at the $1.60 per share purchase price. Based on the preliminary count, and accounting for the effect of odd lot priority on the proration factor, the Depositary has informed the Company that the preliminary proration factor for the Offer is expected to be approximately 46.8480% of the common shares validly tendered and not validly withdrawn based on the total number of shares reported to be tendered and not withdrawn prior to the expiration of the Offer and accounting for “odd lot” priority. This preliminary proration factor is subject to change based on, among other things, the number of tendered shares which satisfy the guaranteed delivery procedures.

The number of shares expected to be purchased pursuant to the Offer, the aggregate purchase price and the proration factor are preliminary and subject to change. The preliminary information contained in this press release is subject to confirmation by the Depositary and is based on the assumption that all shares tendered through notice of guaranteed delivery will be delivered within the two trading day settlement period. The final number of shares to be purchased pursuant to the Offer, the final aggregate purchase price, and the final proration factor will be announced following the expiration of the guaranteed delivery period and the completion by the Depositary of the confirmation process. Payment for the shares accepted for purchase pursuant to the Offer, and the return of all other shares tendered and not purchased, will occur promptly thereafter.

The Company's Offer was made pursuant to an Offer to Purchase and Letter of Transmittal, each dated November 21, 2017 and as amended December 7, 2017, in which the Company offered to purchase for cash up to $2,500,000 of its common shares at a price per share of $1.60.

Investor questions concerning the Offer may be directed to D.F. King & Co., Inc., the Information Agent for the Offer at 1 (800) 820-2412 or for banks and brokers at (212) 269-5550. Shareholders who tendered shares and who have questions may call American Stock Transfer & Trust Company, the depositary for the Offer, at (718) 921-8317.

As a result of the completion of the Offer, immediately following payment for the tendered shares, the Company expects that it will have approximately 7,416,814 common shares issued and outstanding and held by approximately 340 shareholders of record. The Company believes the number of tenders by record holders in response to the Offer did not result in the Company being in a position to deregister as a public company should its Board of Directors have decided to do so.

Robert M. Thornton, Jr., SunLink’s Chairman and CEO stated, “we are pleased to have been able to provide liquidity for those shareholders who chose to tender shares, and we look forward to continuing to seek increased shareholder value for those shareholders who chose to hold their shares and not tender.”

Additional Information for Shareholders

This press release is provided for informational purposes only and does not constitute an offer to purchase or the solicitation of an offer to sell any common shares of SunLink Health Systems, Inc.

About SunLink

SunLink Health Systems, Inc. (“SunLink” or the “Company”) is the parent company of subsidiaries that own and operate healthcare businesses in the Southeast. Each of the Company’s healthcare businesses is operated locally with a strategy of linking patients’ needs with dedicated physicians and healthcare professionals. For additional information on SunLink Health Systems, Inc., please visit the Company’s website at www.sunlinkhealth.com.

This press release may contain certain statements of a forward-looking nature. The statements contained herein which are not historical facts are considered forward-looking statements under federal securities laws. Such forward-looking statements are based on the beliefs of our management as well as assumptions made by and information currently available to them. The Company has no obligation to update such forward-looking statements except as required by applicable law. Actual results may vary significantly from these forward-looking statements.

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SunLink Health Systems, Inc.
Robert M. Thornton, Jr., 770-933-7004
Chief Executive Officer