The Ramsay Health Care Limited share price is rocketing higher today amid a takeover offer.
In morning trade, the private hospital operator’s shares have rocketed 28% higher to $82.50. Ramsay Health Care has received a conditional, non-binding, indicative proposal from a consortium of investors led by KKR to acquire 100% of the company by way of a scheme of arrangement.
Under the indicative proposal, Ramsay Health Care shareholders would be entitled to receive $88.00 cash per share, less any ordinary or special dividends paid to shareholders. This includes the recently paid ordinary dividend of 48.5 cents per share.
The offer of $88.00 per share represents a premium of 36.7% to the latest Ramsay Health Care share price of $64.39. Shareholders also have the option to receive part of the consideration in unlisted scrip in the consortium holding entity.
If the arrangement proceeds, Ramsay Health Care would be permitted to pay a fully franked special dividend to distribute all available franking credits to shareholders. As of 31 December, but prior to its most recent dividend, Ramsay’s franking account balance was $823 million. The release reveals that having reviewed the proposal, the Ramsay Board of Directors has determined it appropriate to provide the KKR Consortium with due diligence on a non-exclusive basis. This is to explore whether it can put forward a binding proposal that is in the best interests of shareholders.
However, Ramsay Health Care notes that the indicative proposal is subject to several conditions. This includes the completion of due diligence, no disposal of any of Ramsay’s subsidiaries or properties, final approval of the Consortium’s investment committee, entry into a scheme implementation deed on customary terms and conditions, regulatory approvals, and shareholder approval.