AHG calls for takeover offer as PharmAust mediation adjourned

Advance Healthcare Group Ltd has called for a full takeover bid from PharmAust Ltd as mediation in relation to litigation between the two parties was adjourned.

AHG has stated that it has legal advice that PharmAust, a significant shareholder in AHG, must proceed to a full takeover offer within two months following its merger offer on Friday.

AHG also said it remains confident that the dispute which has led to litigation can be resolved without going to trial.

Below is the full announcement from AHG:

Further to its announcement yesterday AHGL takes the opportunity to further update shareholders in
relation to the above matters.

The mediation conference held yesterday in relation to the Pharmaust litigation has been adjourned.
AHGL remains hopeful that the litigation can be resolved without the time and cost associated with a
Supreme Court trial.

In relation to the Pharmaust announcement made on 5 January 2007 and the articles appearing in WA
Business News that day and the West Australian on 6 January 2007, AHGL advises that it has received
advice from its solicitors that given Pharmaust has publicly proposed to make a takeover bid for AHGL,
Pharmaust is now required pursuant to the Corporations Act to make offers to all shareholders within
two months after the date of its proposal (ie on or before 5 March 2007).

AHGL is, however, concerned that the penultimate sentence of the Pharmaust announcement appears
to contradict the balance of the announcement in stating that 'there is no certainty that merger terms will
be agreed upon or that a formal offer will be made'. AHGL's solicitors have written to Pharmaust's
solicitors to clarify this apparently contradictory statement and will make a further announcement once
this has been clarified.