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Takeover offer sends Japara Healthcare soaring

Shares in aged care operator Japara Healthcare soared 26% to $1.01 on Friday after management confirmed it is considering a non-binding takeover offer from not-for-profit healthcare organisation Calvary.

Japara received an unsolicited, indicative, conditional and nonbinding proposal from Little Company of Mary Health Care Ltd (Calvary), an Australian not-for-profit healthcare and aged care provider, to acquire all of the shares in Japara.

The indicative cash price offered to shareholders is currently $1.04 per share. The offer price assumes no further dividends, distributions or reductions in capital would be paid and that there are no material changes to the business from the position disclosed to the ASX.

The proposal is also subject to a number of conditions, including completion of due diligence, negotiation and execution of a binding scheme implementation agreement and a unanimous recommendation by the Japara Board.

Calvary advised that they do not hold either a beneficial or economic interest in Japara.

Commenting on the proposal, “The Japara Board has not yet formed a view on the merits of the Indicative Proposal and is currently considering it in the context of, amongst other things, expected improvements in trading conditions and the Federal Government's upcoming budget and regulatory response to the Royal Commission into Aged Care Quality and Safety recommendations expected in May 2021.”

At this stage, there is no certainty that the proposal will result in a transaction.

Japara, which is backed by investors including David di Pilla’s Aurrum Holdings and Moelis Australia, has had a bumpy year due to coronavirus and uncertainty over regulatory changes after the royal commission into aged care. Although its share price is now up from an all-time low of 35 cents six months ago.

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