8 Aug 1969 Founded as Corella Minerals Ltd a minerals exploration company
1970s Purchased Craigmore Wines Pty Ltd becoming an unsuccessful wine making company.
7 Mar 1975 Name changed to Craigmore Wines
1980 Wine making industry sold and resumed oil shale exploration via Greenvale Mining NL and Esperance Minerals.
26 June 1980 Changed its name to Alpha Resources and listed on the ASX.
Apr-Nov 1985 Mineral exploration abandoned. Greenvale and Esperance sold shares to Jonray Holdings and Equiticorp (New Zealand) which came to own 35%. It became an investment company transferring from the Mining to the Industrial Boards.
February 1986 Acqires 10% of Hospitals of Australia (HOA)
Jan 1987 Purchased Insurance Corporation of Ireland.
30 June 1987 Sold Insurance arm because it was under-performing.
24 Nov 1987 Changed name to Alpha
Feb 1988 Taken over by Degor Enterprises which gained 75% of stock. Became involved in health care.
May 1988 Attempted takeover of Hospitals of Australia but sold its holding to Mayne Nickless instead
Dec 1989 Owned 4 hospitals.
Aug 1990 opened/purchased two more hospitals
1992 Established a Management Services Division offering contractual management services to other hospitals.
1 Oct 1992 Changed name to Alpha Healthcare Ltd.
1992/3 established a rehabilitation service integrated with other services.
14 Apr 1993 US Consulate prepares a report on Australian business activity to identify those which provide opportunities for US corporate enterprises. Health care and Alpha Healthcare are both mentioned. That Tenet/NME was at the time being investigated for fraud and misusing patients in the USA and was under a cloud in Australia was not mentioned. Business reports seldom address matters of ethics or morality.
1993/4 "A string of losses" (reported in "Shares" June 1997)
1994 Reduces debt, raises $23.5 million in a public offer and Malaysian business interests including Tan & Tan become involved.
October 1994 US government inquiry into aged care in the USA identifies extensive fraud.
1995 Share price falls. An article in the Bulletin stresses "that microeconomic factors are the crucial variable in many businesses, but especially health-" . It discusses the financial debacle facing Alpha Healthcare and Australian Medical Enterprises (controlled by Tenet/NME).
Jan 1995 Criminal Investigation of US company Sun Healthcare's billing practices in the USA commenced.
Aug 1995 Alpha assumes management of Hunter Valley Private Hospital. Analysts report on increasing Malaysian business involvement in Australia singling out Alpha for comment.
Sept 1995 Construction of Southern
Highlands Private Hospital. The company's profits increase.
Jan 1996 Enters primary health care. Alpha Family Healthcare established to enter primary care market. Purchase of Calrac Medical Centre, Group owners of Auburn, and Marrickville Medical Centres partly funded by a 3.08 share issue.
July 1996 Acquires Primary Care Centre in Liverpool.
Nov 1996 Bought 60% of radiology group Belgrave Diagnostics and renamed it Alpha Imaging group.
1996 Annual report
Alpha is adopting a policy of growth and diversification acquiring Primary Care centres including 24 hour centres in Sydney and Gosford seeing 24,000 patients a month. Has also entered pathology. Commissions St. Margaret and Hunter Valley Private Hospitals. Expects primary Care and Pathology to increase revenue by $10 million annually.
Recognises that General Practitioners have a flow on effect to pathology, radiology, specialists and hospitals. The report commits Alpha to vertical integration, the integrated system, which has been so misused by the big corporations in the USA. Now owns the following small hospitals -- Berkeley Vale, Hunters Hill, Lawrence Hargrave, Mount Wilga, Southern Highlands, St. Edmund's (all in NSW) and Perth Surgicentre (day surgery) in WA.
1996 Major Shareholders
- Tan & Tan Developments Berhad -- 20,590893 shares (a Malaysian property group with multiple interests including Parkway Holdings.)
- Berjaya Group Equity --- 13.001,500 shares ( Malaysian group)
- ANZ Nominees Limited -- 7,354,830
Among the others
- Perpetual Trustee Company Ltd -- 1,070,000
- Chase Manhattan Nominees --- 1,000.000
- National Mutual Trustees Ltd --- 881,000
Chase Manhattan Nominees is a US banking group which invested in Singapore. It became the principle backer of Vista Healthcare in Singapore in 1997. Michael Ford Tenet/NME's international president until 1995 had a relationship with Chase manhattan bank before joining Vista Healthcare.
In addition to US federal and state fraud investigations during 1995 and 1996 Sun Healthcare was the subject of a series of court actions by shareholders in the USA. They alleged a variety of improper practices, in particular that they had been deliberately misinformed by Sun Healthcare in regard to the federal investigations. A number of Sun's directors indicated that Sun's chairman Andrew Turner and others had kept them in the dark. Several of these cases were consolidated and Sun Healthcare settled these for US $24 million in 1996.
Connecticut commences fraud investigation of Sun Healthcare in 1996.
In 1997 a group of insurers in the USA expressed concern that they had been improperly billed by Sun Healthcare.
March 1997 The new Prime Minister John
Howard opens the last of the new works at Hunters Hill Private
Hospital after a $2 million refurbishment. The liberal/national
Australian government had clearly set out its policy
of basing Australia's health system
on a competitive health care marketplace in May 1996.
June 1997 Prior to the purchase of HCC Alpha owned 4 hospitals and managed 3. It had radiology and occupational rehabilitation businesses as well as pathology, family care, occupational health, and hospitals. Until Sun's purchase Berjaya Group Berhad was the major shareholder. (see Shares June 1997)
5 June 1997 PKF Corporate Advisers says that Sun's acquisition was unfair as it should have paid a premium for the "significant" influence a 38% holding would give over Alpha. (AFR 5/6/97)
24 June 1997 Alpha shareholders approve the purchase of HCC
July 1997 US government terminates criminal investigation of Sun Healthcare. Civil investigation continues.
14 July 1997 Alpha consolidates five 20 cent shares into one $1 share
24 July 1997 Victoria's conservative government is interested in contracting out public hospitals to private corporations -- soon to be seen by corporations as a growth opportunity.
31 July 1997
1 Aug 1997 Delay in FIRB approval because FIRB have concerns about the investigation of Sun's billing practices in the USA. FIRB have asked for information and Sun executives have visited Canberra to "smooth things over".
18 Aug 1997 Purchase of HCC goes ahead after FIRB approves Sun's entry. Acquires three hospitals (220 beds - Illawarra, Charles Wentworth, and GreenOaks - in Bankstown), 191 unused bed licenses, and a permit to build the 140 bed co-located Westmead Private Hospital. As part of the deal James Hardie owned 9.4% of Alpha shares and Sun Healthcare 38.2%
25 Aug 1997 Andrew Turner becomes a director of Alpha Healthcare
8 Sep 1997 Alpha announces operating profit up 35%. Gearing increases from 53% to 69%. $13.4 million is a 3 year interest free loan from James Hardie Industries.
29 Sep 1997 Victoria's plans to privatise the Mildura public hospital raise fears of an "American-style health system".
28 Nov 1997 Alpha buys remaining minority shares in Australian Diagnostics Laboratories.
4 Dec 1997 Acquires Diagnostic Pathology in Sydney.
11 Dec 1997
15 Dec 1997 Berjaya Group decreased its 10.34% shareholding by about 75% to own only 2.88% of Alpha.
18 Dec 1997 Dr. Wooldridge, federal minister for health announces plan to reform Australia's health system using "step-down" hospitals - a Sun specialty.
19 Dec 1997 Purchases Southern Pathology in Illawarra aided by the $10 million loan from Sun Healthcare and 1.6M 3 year share options at $1.20 to the vendor. Southern Pathology operates in Illawarra.
22 Dec 1997 Acquires remaining minority interests in Alpha Imaging Group.
1997 Alpha's Annual Report
The report showed increased profits with payment of 5.5 cents per share. Alpha has now established small divisions in several sectors and is focusing on expanding these. They see a need to increase the "critical mass" of the company. Like Columbia/HCA it has developed a "branding" strategy for its facilities in Sydney.
In June 1997 borrowing's were $17.7 million and the gearing levels 53%. Loans increased to 20.3 million and gearing to 69% after the acquisition of HCC. This included a 3 year interest free loan of $13.4 million from James Hardie Industries and $10.5 million from National Bank of Australia as well as the loans from Sun Healthcare. Sun's loan was not included in this assessment so that the true indebtedness is probably even greater.
1997 Major Shareholders
- Sun Healthcare ------------------------16,666,666 shares --- (35.7%)
- Tan & Tan Developments Berhad - - 4,118,179 ------------ (8.83%)
- RCI Pty Ltd -------------------------------4,100,000 ------------ (8.79%)
- Berjaya Group Equity ----------------- 2,600,300 ------------- (5.57%)
- Healthcare Holdings (Cayman) Ltd ---------------------------- (4.09%)
- ANZ Nominees Limited --------------- 990,072 ---------------- (2.12%)
13 of the 1996 20 top investors including Perpetual Trustee Company, Chase Manhattan Nominees, and National Mutual Trustees have sold most or all of their shares and are no longer among the top 20 shareholders in 1997.
Note that Sun Healthcare owns more shares than all the other major shareholders together and four times as many as the next largest shareholder. US and Malaysian groups own 50.1% giving full control of the company to these foreign investors.
Places where Alpha operates
Sydney, Gosford, Wollongong Perth, Bankstown, Illawarra, Auburn, Liverpool, Marrickville, Westmead, Hornsby, Hunters Hill, Darlinghurst, Eastwood, Thirroul, Berkeley Vale, Bowral
Jan 1998 Managing director, Paul Hopper promises further expansion into pathology and radiology.
Objections to licenses for pathology laboratories and for aged care facilities for any Sun controlled facilities lodged with the Health Insurance Commission and the Department of Health and Family Services respectively. Probity issues cited.
Feb 1998 Alpha buys 10% interest in Silver Circle, a provider of home support services operating mainly in Victoria. Alpha promises to buy 25% in 1998/9 as part of a policy to provide a "holistic private health care service".
Shareholders approve the issue of $10 million convertible note to Sun Healthcare. Sun Healthcare and Alpha are both focussed on expansion.
August 5, 1997 letter from Alpha to FIRB promoting the benefits for Australia of Sun's entry was released by FIRB under FOI. This confirmed that Alpha planned to use Sun's expertise in aged care and step down care by expanding into these areas in Australia.
Mar 1998 Alpha announces a profit but is cautious about the future - the first sign that things may not be as rosy as it has indicated in the past.
May 1998 Sun Healthcare expands further in Australia opening Australian divisions of its SunScript and SunChoice subsidiaries. These will provide pharmacy services and medical supplies to affiliated entities Alpha Healthcare and Moran Health Care Group as well as to others. Sun promises further expansion.
Sun Healthcare becomes aware that an investigation in California has found that 3% - 80% of therapy services were medically unnecessary. Sun is a major operator in California but does not know if its facilities were part of that study.
Jun 1998 Alpha's shares take a beating.
July 1998 Sun Healthcare's reports to the US Securities and Exchange Commission (SEC) are cautious about its ability to expand as rapidly as it has in the past.
Aug 1998 Alpha secures approvals and $50 million financing for Westmead Private Hospital. Sun Healthcare contributes $18.4 million and the ANZ banking group $35 million. Hopper talks about further expansion.
30 Oct 1998 Southern Highlands Private Hospital has been unprofitable. The Australian Healthcare Investment Fund which built the hospital in 1995 has wound up Bowral Management and offered the hospital to Alpha for $5 million.
Nov 1998 Increased profits are predicted for Alpha which is seen as a takeover target. One report suggests that Sun Healthcare may take over Alpha. By this time the Berjaya group is no longer a major shareholder and Tan and Tan have halved their holding in Alpha.
10 Nov 1998 Labour opposition in Victoria produces details of the alleged fraud in Connecticut with documentary evidence to support the validity of the action.
11 Nov 1998 Victorian opposition produces evidence of poor care and neglect in Sun Healthcare owned facilities in the USA. It gave details of a large number of instances. The Kennett government retreats and sets up a probity review. No contract will be signed until this is completed. The health Department begins a probity check.
30 Nov 1998
2 Dec 1998 Alpha withdraws its offer to buy the Southern Highlands Private Hospital.
7 Dec 1998 The Victorian opposition reveals that Sun Healthcare has "been banned from running any more nursing homes in California after a series of violations that endangered patients' health". Some facilities have had their licenses revoked and others have paid large fines. A series of lawsuits allege patient abuse and willful misconduct. It is a legislative requirement that hospital owners be "fit and proper" entities.
23 Dec 1998
Sun Healthcare lends Alpha another $4.5 million for capital developments. The 2 year note will be convertible into fully paid shares at 62 cents. Sun would then potentially own 55.4% of Alpha. This would need Foreign Investment Review Board approval.
Alpha Healthcare withdraws from the Mildura tender when Sun withdraws its financial support. They do so with a raft of angry accusations about misinformation, a smear campaign, pressure from anti-privatisation groups, premature conclusions, being victimised, being treated unfairly and judged guilty before proven innocent. The company wanted to maintain its high credibility and denied that it had been banned from running any new nursing homes in California because of poor care. It threatened to re-evaluate whether it would do business in Victoria.
Everyone is blamed -- anything to obscure the possibility that the allegations are valid. One should not assume that Sun was being deliberately dishonest. In the USA it has behaved in exactly this way. It is clear that the directors really believe what they say. They are simply unable to come to terms with their own conduct. Alpha is caught in the middle and takes Sun's position.
To the outside observer the claims that the investigation is still incomplete simply serve to confirm that Sun was advised that it was most unlikely to pass the probity check and decided to back out rather than face the indignity of rejection. Had the investigation been completed then other states would also have been forced to confront the question of Sun's probity and examine existing licenses. Because the investigation was never completed they were able to let sleeping dogs lie and continue their program of privatisation using Alpha.
31 Dec 1998 Alpha announces a loss of
$1.781 million. (The previous year they made a profit of $2.243
million.) This was separate to a $0.944 million loss in the Mildura
project. The pathology division has performed poorly and the whole of
the pathology division was sold to Sonic Healthcare for about $35
million in order to reduce Alpha's large debts. In addition a cost
reduction program has slashed costs by $0.75 million.
Jan 1999 In spite of the federal government's massive diversion of funds to pay citizens for taking out private health stocks are performing poorly. Alpha is listed among those at risk of a takeover. Only Mayne Nickless and Ramsay Healthcare seem safe.
29 Jan 1999 Hopper admits that the decision to withdraw in Victoria " was based on Victorian Government advice that Alpha's major shareholder, Sun Healthcare Group Incorporated, had not satisfied the review process".
26 Feb 1999 Alpha shareholders approve the issue of convertible notes in Sun's favour with their subsequent conversion into shares in Alpha. This would give Sun a majority holding.
March 1999 Sun Healthcare reaches a US $8,4 million fraud settlement in Connecticut and the attorney general is scathing about Sun's conduct. This information and some of the documents used in prosecuting the case are made available to licensing authorities.
6 Apr 1999 Bowral Management Company is resuscitated and a new contract to run the Southern Highlands Private Hospital in NSW is negotiated.
9 Apr 1999
1 July 1999 Alpha lost $837,000 in the first half year and expects the same in the second. Apart from the $4.7 million it must pay Sun within 6 month it must repay James Hardie's interest free loan of $12 million by August 2000. It is not clear where the money will come from.
Sept 1999 Alpha announces the previous year's loss of $21.256 million. It has extensively restructured including saving $1 million in salaries -- meaning it has fired staff. As a result of cost reductions Mr. Compton is confident that Alpha has 'weathered the storm' and is now well positioned to start delivering enhanced value to shareholders. Press reports however indicate that other hospitals are also in trouble and are being squeezed by insurers. Investors have fled from the private hospital sector and do not look like returning for some time. Pathology (which Alpha has sold) and Primary Health care are performing well.
Oct 1999 Alpha sells its radiology division to Mayne Nickless - probably for less than $10 million.
14 Oct 1999 Sun Healthcare files for Chapter 11 voluntary bankruptcy in the USA. Sun and Alpha claim that this will have no impact on Alpha and its debt repayment. Alpha still owes Sun over $27 million and James Hardie $12 million. Hardie is trying to sell its holding in Alpha. At the least Sun will not be lending Alpha any more money.
12 Nov 1999 An unexpected share rise causes speculation that Alpha is a takeover target and that bankrupt Sun may be selling. Sun has been selling assets recently.
23 Nov 1999
23 Nov 1999 AGM reports on the
continuing losses and the sale of pathology, radiology and primary
care assets over the year. Hospital assets have been written down by
$17.627 million. The company will not pay a dividend.
Jan 2000 Alpha has made a small profit in the last 6 months. Its shares are down to 29.5 cents. It is looking forward to profits as soon as Westmead Private Hospital comes on line. Alpha Healthcare is still funding the "Alpha Healthcare Class Six Plate" at the Illawarra races.
5 July 2000 Alpha sells 4 of its hospitals to Australian Unity Healthcare Property Trust for over $30 million and arranges to lease them back for 15 years. This it claims will raise the money to pay its debt to bankers, to James Hardie and to Sun Healthcare and with the exception of the Westmead project make Alpha debt free.
1 Aug 2000 Westmead Hospital construction completed ahead of schedule. Charles Wentworth and Bankstown Private Hospitals will close diverting patients to Westmead.
28 Aug 2000 Australian Healthcare Investment Fund to be wound up with the sale of the Southern Highlands Private Hospital. Bankstown Private Hospital closed as it is losing money.
Sep 2000 Sun Healthcare Group Holdings (Australia) (SHGA) is placed into receivership. Alpha announces a $750,000 profit for the year.
Oct 2000 Alpha is working with Sun's creditors for the sale of its holding in Alpha and to repay Alpha's overdue debt to Sun. The various debts are overdue and there are delays in payment from the Australian Unity transaction.
9 Oct 2000 Westmead Private Hospital opens for business.
Nov 2000 Settlement of sale and lease back of 3 hospitals to Australian Unity completed.
22 Nov 2000 Sudden rise in Alpha's share value to 27 cents sparks an inquiry by the ASX but Alpha does not know why.
24 Nov 2000
1 Dec 2000 Bankstown Private Hospital site sold.
19 Dec 2001 Agreement with Sun's
receiver to pay $7.5 million debt by 31 July 2001. Money will come
from sale of Charles Wentworth Private Hospital or St. Edmund's
Private Hospital, and from the Australian Unity sale and lease back.
The loan from James Hardie has still not been fully repaid.
Feb 2001 Ramsay Healthcare indicates it is looking for takeover targets. Alpha is a possible target. The federal governments large subsidy to private health care membership is paying off in profits to the big companies. Ramsay's profits are up 60%. Mayne Nickless is also cashed up and is looking for acquisitions.
9 Apr 2001
10 Apr 2001
26 Apr 2001
30 Apr 2001
1 May 2001 Alpha claims that Ramsay's statement does not comply with corporations law and they are asking Ramsay to withdraw it and send another.
2 May 2001 Ramsay has increased its holding in Alpha from 19.9% to 37.5% as Sun Healthcare has accepted its offer of 40 cents.
3 May 2001
8 May 2001
15 May 2001 Alpha claims a conflict of interest by Sun's receiver which also acts as Ramsay's auditor.
Alpha's shareholders have lodged a formal complaint about Ramsay's bid with the Australian Securities and Investments Commission. A critical aspect of this complaint is the fact that Sun's receiver failed to give Alpha's remaining shareholders the opportunity to buy the debt under the same or even better terms than those offered by Ramsay. Alpha's prospects were improving and shareholders believe they would have been able to raise more than $11 million to buy the debt.
The shareholders also feel that Mr. Schelling the Sun representative on Alpha's board had a fiduciary duty to all shareholders, not only Sun Healthcare. As such he had a responsibility to protect and inform all shareholders about Ramsay's offer so that they could match it.
The shareholders have pressed Sun's receiver, and Ramsay executives for details about the circumstances surrounding the refusal of Netcare's offer and the acceptance of Ramsay's lower offer. They are not satisfied with the responses received.
22 May 2001
25 May 2001 Alpha's directors accept the inevitable and advise shareholders to accept Ramsay's offer, although some of the directors do not intend to do so themselves. Their main reason for doing so is the substantial risk in not doing so. The primary problem is Ramsay's ownership of Alpha's debt and its ability to call in the full $30 million owed at relatively short notice. It is consequently in a position to destabilise the company. It is extremely unlikely that there will be another bidder.
8 Jun 2001 Alpha has 70.9% of Alpha - extends offer to 22 June.
5 July 2001 Ramsay has acquired 90.4% of Alpha and will proceed with a compulsory takeover of the remainder.
25 September 2001 A number of Alpha shareholders are very disturbed at the way that the takeover was accomplished. They believe that Alpha's shares should have been valued at 82 cents and that they have been unfairly and illegally forced to sell at half this price. They had lodged an objection with ASIC in regard to the conduct of the Sun appointed director to Alpha. He acceded to the behind the scenes deal with Ramsay to buy Alpha's debt and shares without giving Alpha's remaining shareholders the opportunity to bid for Sun's debt themselves. As a director of Alpha he had a fiduciary duty to all of Alpha's shareholders. Ramsay purchased Sun's $31 million debt for only $11 million but had the right to demand early repayment of the full $31 million putting Alpha in a position where it had no option but to accede accepting Ramsay's 40 cents offer.
Alpha shareholders believe this was anticompetitive conduct. Both Sun Healthcare and Alpha's shareholders would have been better served by Alpha buying the debt for more than $11 million and then selling shares to Netcare for a higher figure. Sun's Alpha director had a duty to put Ramsay's offer to Alpha shareholders before accepting it so that they would have the option of making a higher bid. Their complaint was not they claim considered by the takeover panel. The panel only considered the complaint by Alpha's board. Some shareholders have taken to the courts and others have written to the minister asking him to investigate ASIC and the takeover panels omissions with a view to redressing their wrongs. Both Alpha's board and these shareholders were also concerned that Sun's bankruptcy manager, Ernst and Young was also Ramsay's auditor. They considered this a direct conflict of interest.
October 2004 The federal ombudsman sends Alpha shareholders his final review of their complaints. He does not support their position.
CLICK HERE for an assessment of the three year battle.