Ramsay (ASX:RHC) confirms receiving proposal for Asian JV

Image Source: © Laviana | Megapixl.com

Highlights

  • Ramsay and its Malaysian joint venture partner have received a buyout offer from IHH Healthcare Berhad.
  • However, no agreement has been reached so far regarding the indicative proposal.
  • The stock has dropped 10% in the last three months. 

The shares of ASX listed healthcare firm – Ramsay Health Care Limited (ASX:RHC) are gaining attention today after the company confirmed receiving a proposal for its Asian joint venture (JV). 

RHC shares closed 1.406% higher at AU$64.180 per share today.

In response to media speculation regarding its Asian operations, Ramsay confirmed that Ramsay and Malaysia based JV partner - Sime Darby Holdings Berhad have received a buyout offer from IHH Healthcare.

IHH Healthcare is one of Asia's largest private healthcare groups. 

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The proposal

Both the companies have confirmed receiving a confidential, nonbinding, conditional indicative proposal from IHH Healthcare Berhad to acquire 100% of Ramsay Sime Darby Health Care Sdn. Bhd - their 50:50 joint venture in Asia.

Image source – © Pichetw | Megapixl.com

According to the proposal, Ramsay Sime Darby will have an indicative enterprise value of MYR5,670 million (US$1.35 billion) on a debt-free, cash-free basis.

Meanwhile, the release further notes that the indicative proposal will remain subject to conditions –

  • Negotiation and finalisation of a sale and purchase agreement
  • Completion of satisfactory due diligence

What next?

After reviewing the proposal, both the companies agreed to a period of exclusivity for four weeks when due diligence commences to allow IHH to negotiate a sale and purchase agreement after conducting due diligence.

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However, the discussions between SDH and Ramsay are preliminary. Thus, no agreement has been reached concerning the Indicative Proposal.

The healthcare giant also said there is no guarantee that an agreement will be reached regarding the Indicative Proposal.

Ramsay share price movement 

The stock has dropped 12% on YTD this year and 5.72% in the last 12 months. While it has fallen 10% in the previous three months, the stock gained 1% last week. 


 


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