Regis Healthcare has risen 87% in the last month, after declining its second buyout attempt from Washington H. Soul Pattinson with its partner Ashburn Pty Ltd. An entity controlled by Mr Bryan Dorman, a co-founder and major shareholder of Regis.
The indicative cash price offered under the proposal was $1.85 per share available as full cash consideration. WHSP also proposed a scrip alternative in a newly incorporated company, allowing Regis shareholders to retain an exposure to the company, as a privately operated business.
Following a formal committee review, the proposal was rejected. With the Board citing that it materially undervalues Regis, given its medium to long term prospects and “does not offer fair value to shareholders”.
The proposal followed the rejection by the Regis Board of an earlier proposal from WHSP and Skip Capital in September at $1.65 per share, on the grounds that it also materially undervalued the company future prospects.
This decision was reached having regard to a number of matters including:
- The Aged Care Royal Commission is due to deliver its final report on 26 February 2021, with substantial policy and funding reform expected to be recommended to the Commonwealth Government;
- The Commonwealth Government has committed publicly that it will respond to the recommendations of the Aged Care Royal Commission in the May 2021 Budget and has foreshadowed substantial additional funding for the aged care sector; and
- The easing of the impact of COVID-19 resulting in improving trends in the aged care sector performance.
The Board reiterated that Regis shareholders do not need to take any action in relation to the proposal.
Regis Healthcare is an aged care provider, servicing residential, respite care, ageing and dementia care for residents and home care clients. Currently, Regis operates over 60 facilities with more than 7000 aged care places across all states.