Virtus Health : 3rd Supplementary Target's Statement (BGH)

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ASX ANNOUNCEMENT

30 May 2022

VIRTUS HEALTH LIMITED (ASX: VRT)

Virtus' Third Supplementary Target's Statement (BGH Offer)

Virtus Health Limited (ACN 129 643 492) (Virtus) refers to the off-market takeover offer by entities wholly owned by BGH Capital Pty Ltd (BGH).

Virtus' third supplementary target's statement is attached in accordance with section 647(3)(b) of the Corporations Act 2001 (Cth).

A copy of the Third Supplementary Target's Statement will be served on BGH and lodged with the Australian Securities and Investments Commission today.

This announcement is authorised by the Virtus Board.

	-ENDS-
Further information:
Investor Enquiries:	Media Enquiries:
Matt Prior	Peter Brookes
CFO, Virtus Health	Citadel Magnus
[phone]	[phone]
[e-mail]	[e-mail]

Virtus Health Limited (ASX:VRT) brings together leading clinicians, scientists, researchers and support staff to provide the very best in fertility care and related specialised diagnostic and day hospital services. We have developed one of the most successful ARS collaborations in the world. With 126 of the world's leading fertility specialists supported by over 1300 professional staff, we are the largest network and provider of fertility services in Australia, Ireland and Denmark, Singapore and UK.

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Virtus Health Limited

ACN 129 643 492

Third Supplementary Target's Statement - BGH Offer

1 Third Supplementary Target's Statement

This document is a supplementary target's statement under section 644 of the Corporations Act 2001 (Cth) (Act). It is the third supplementary target's statement (Third Supplementary Target's Statement) issued by Virtus Health Limited (ACN 129 643 492) (Virtus) in relation to the off-market takeover bid made by the BGH Bidders for all the Virtus Shares in which the BGH Bidders do not have a Relevant Interest. This Third Supplementary Target's Statement supplements, and should be read together with, Virtus' second supplementary target's statement in relation to the BGH Offer dated 16 May 2022 (Second Supplementary Target's Statement), Virtus' first supplementary target's statement in relation to the BGH Offer dated 11 May 2022 (First Supplementary Target's Statement) and Virtus' target's statement in relation to the BGH Offer dated 3 May 2022 (Original Target's Statement).

2 Update on the BGH Offer

On 24 May 2022, BGH increased the offer price under their takeover offer for Virtus shares to $8.15 per share (Revised BGH Offer).

Due to the price now available under the Revised BGH Offer and taking into account all relevant considerations (including conditionality, certainty and timing) in the interests of Virtus and its shareholders, the Virtus Board has unanimously determined that the Revised BGH Offer is superior to the CapVest Scheme and Takeover on the basis that:

• the cash consideration under the Revised BGH Offer is equivalent to the cash consideration under the CapVest Scheme, and superior to the cash consideration under the CapVest Takeover;
• the Revised BGH Offer is subject only to no prescribed occurrences occurring in relation to Virtus before the end of the offer period, compared to the CapVest Scheme, which is subject to (amongst other things) a scheme approval threshold and a material adverse change condition and in respect of which the independent expert opinion conclusion condition is no longer satisfied, and the CapVest Takeover, which is subject to (amongst other things) a 50.1% minimum acceptance condition, the resolution with respect to the permitted capital return being passed and a no material adverse change condition;
• the Revised BGH Offer of $8.15 represents a c. 60.1% premium to the dividend adjusted undisturbed Virtus Share price of $5.09 as at 13 December 2021;

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• a significantly increased risk that the CapVest Scheme will not be approved by the requisite majority of Virtus Shareholders in light of BGH's increased voting power in
  Virtus Shares which, as at 24 May 2022 was disclosed by BGH as 22.38%1; and
• the Independent Expert has concluded that the CapVest Scheme is not in the best interests of Virtus Shareholders.

Subsequently, on 27 May 2022 Virtus provided notice of termination of the CapVest Implementation Deed to CapVest pursuant to clause 13.2 of the Implementation Deed and must pay a break fee of $7,192,147 by 10 June 2022.

Attached is an ASX release containing an update in relation to the Revised BGH Offer (ASX Release) Also attached is the updated opinion of Deloitte Corporate Finance Pty Limited, the independent expert.

3 Your Directors' recommend you ACCEPT the Revised BGH Offer

For reasons outlined above, the Virtus Directors have changed their recommendation in relation to the Revised BGH Offer, and now unanimously recommend that Virtus Shareholders ACCEPTthe Revised BGH Offer in the absence of a Superior Proposal and subject to the Independent Expert continuing to conclude that the Revised BGH Offer is fair and reasonable.

To validly accept the Revised BGH Offer, your acceptance must be received by 7.00pm (Melbourne time) on 31 May 2022, unless the BGH Offer Period is extended. As a matter of law, the BGH Offer Period will be automatically extended for 14 days if, within the last 7 days of the offer period, its voting power in Virtus increases to more than 50%. BGH has advised that as at 30 May 2022 at 9.30am, its voting power in Virtus shares is currently 26.26%.

As the closing date of the Revised BGH Offer is fast approaching and the BGH Offer Period has not been automatically extended yet, Virtus encourages all shareholders to accept the Revised BGH Offer as soon as possible.

The Virtus Directors are no longer recommending the CapVest Transaction and recommend that you take no action in relation to the CapVest Scheme or the CapVest Takeover.

4 How to accept the Revised BGH Offer

As set out in the ASX Release, BGH has now made it easier for Virtus Shareholders to accept the Revised BGH Offer, including by allowing you to send completed acceptance forms by email and providing blank acceptance forms for those shareholders who no longer have the forms sent by BGH.

1. For Issuer Sponsored Holdings of Shares (Securityholder Reference Number beginning with 'I')

To accept the Revised BGH Offer, complete the acceptance form (which BGH has sent to you) in accordance with the instructions on it and email your signed acceptance form to [e-mail].

You can also return it by mail in the reply paid envelope or in accordance with the instructions on the acceptance form, although Virtus encourages you to send it be email so that it can be received before the offer period ends.

1. For CHESS Holdings of Shares (Holder Identification Number beginning with 'X')

1 BGH has advised that as at 30 May 2022 at 9.30am, its voting power in Virtus shares is currently 26.26%.

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To accept the Revised BGH Offer, either:

1. contact your Controlling Participant (usually your broker) and instruct them to accept the Revised BGH Offer on your behalf (this is the recommended method if your Virtus Shares are in a CHESS holding, as the acceptance can be processed more quickly); or
2. complete the acceptance form in accordance with the instructions on it and return it in the reply paid envelope or in accordance with the instructions on the acceptance form.

Full details of how to accept the BGH offer are set out in section 7.3 of BGH's Bidder's Statement dated 6 April 2022 which you should have already received.

Virtus shareholders should have regard to their individual circumstances and if in any doubt as to what to do, should consult their licensed financial adviser or other suitable professional adviser before making any decision in relation to their Virtus shares.

Replacement acceptance form

You should have received an acceptance form in the post with the original Bidder's Statement dated 6 April 2022 and with the Third Supplementary Bidder's Statement dated 25 May 2022.

If you did not receive or have lost the acceptance form, or if you have any questions about how to accept the BGH offer, you can call the BGH Offer Information Line on 1300 620 418 (toll-free within Australia) or [phone] (from outside Australia) for a replacement copy (which may be emailed to you).

Alternatively, you can complete and return the blank acceptance forms which are attached to this Third Supplementary Target's Statement:

1. print out the blank acceptance form attached to this Third Supplementary Target's Statement;
2. for Issuer Sponsored Holdings of Shares (Securityholder Reference Number (SRN) beginning with 'I'): complete your registration name, address and SRN;
3. for CHESS Holdings of Shares (Holder Identification Number (HIN) beginning with 'X'): complete your registration name, address and HIN; and
4. complete and sign the form and email the signed form to [e-mail].

5 What to do if you have already accepted the CapVest Takeover

If you have accepted the CapVest Takeover, you will not be entitled to accept the Revised BGH Offer unless the CapVest Takeover is withdrawn or it lapses in circumstances where any of the CapVest Takeover Conditions have not been satisfied or waived.

CapVest cannot withdraw the CapVest Takeover unless ASIC consents to the withdrawal. If that occurs, the close of the offer period will be brought forward to the withdrawal date. If any of the CapVest Takeover Conditions are not satisfied or waived at that time, your acceptance into the CapVest Takeover will be void. You would then be free to accept the BGH Offer if it remains open at that time.

If the CapVest Takeover is not withdrawn and any of the CapVest Takeover Conditions are not satisfied or waived before the end of the CapVest Takeover offer period (which is scheduled to close at 7.00pm (Sydney time) on Tuesday, 5 July 2022), the CapVest Takeover will lapse and

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your acceptance into the CapVest Takeover will be void. You would then be free to accept the BGH Offer if it remains open at that time.

If BGH acquires an interest in 90% or more of Virtus Shares as a result of the BGH Offer, it would be entitled to compulsorily acquire the outstanding Virtus Shares in accordance with the Corporations Act (including your Virtus Shares). BGH has stated that it is their intention to proceed to compulsory acquisition of the remaining Virtus Shares if they are entitled to do so,2 in which case you would receive the same consideration for your Virtus Shares as you would get if you accepted the BGH Offer, although you will receive the consideration at a later point in time.

6 General

Unless the context otherwise requires, capitalised terms used but not defined in this Third Supplementary Target's Statement have the same meaning as terms defined in the Original Target's Statement.

This Third Supplementary Target's Statement prevails to the extent of any inconsistency with either the Original Target's Statement, the First Supplementary Target's Statement or the Second Supplementary Target's Statement.

A copy of this Third Supplementary Target's Statement is being lodged with ASIC today. Neither ASIC nor any of its officers take any responsibility for its contents. A copy of this Third Supplementary Target's Statement has also been provided to ASX. Neither ASX nor any of its officers takes any responsibility for the contents of this document.

2 See section 3.3 of BGH's Bidder's Statement.

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