Healius Limited (ASX: HLS), formerly known as Primary Health Care Ltd, is one of Australia's leading healthcare company which provides world-class facilities and support services to healthcare professionals. On 3 January 2019, Healius Limited made an announcement stating that it has received a proposal from one of the subsidiaries of Jangho Group for the acquisition of all of the shares in Healius that Jangho Group does not already own. Following this news, the share price of Healius Limited increased by 10.246 percent as on 3 January 2019.
Through its subsidiaries, Jangho Group is currently holding 15.93 percent shares of Healius. Jangho Hong Kong Limited which is a subsidiary of Jangho Group has made an unsolicited and highly conditional proposal to buy all the remaining shares of Healius by way of a Scheme of Arrangement.
Under the proposal, Jangho is offering an offer price of $3.25 per each Healius share and the price will be reduced for the value of any dividends proposed, declared or paid. The Board of Healius has already started its assessment of the Proposal and will keep on inform to the market in relation to continuous disclosure obligation.
The proposal is unsolicited, and it is subject to various conditions by Jangho which includes conditions like the completion of confirmatory due diligence to the satisfaction of Jangho, getting the approval from Jangho Board for submitting the binding proposal and offer of debt finance on acceptable terms to Jangho.
To successfully implement the offer Jangho needs to get approval from any required Chinese regulatory, and it also needs to lodge required notification filings including from the National Development and Reform Commission, China Securities Regulatory Commission, the Ministry of Commerce and the State?owned Assets Supervision and Administration Commission.
Healius Limited has appointed UBS as its financial adviser on this matter, and it has also appointed King & Wood Mallesons as its legal adviser. In FY 2018, the revenue of Healius Limited increased by 4.9 percent to $1,740.3 million which includes revenue of $1,090.6 million from its Pathology division, $319.6 million from its Medical Centres division and $368.4 million from its imaging division.
The Pathology division witnessed revenue growth of 5 percent in FY 2018 and reported EBIT of $114.1 million. In FY 2018, the company has made strong strategic progress in its Pathology division, and it is the final stages of negotiating a new Laboratory Information System or LIS which is a long?term project that combines stay?in?business essentials with real transformational growth. It is expected that LIS will provide significantly improved clinical and referrer outcomes and it will also support the continued growth of the Company’s pathology division.
In the Company’s Medical Centres division, the company is having a comprehensive program called Project Leapfrog which is going to change the Medical Centres’ model. Project Leapfrog will transform the company’s value proposition to healthcare professionals and consumers.
Meanwhile, in the last six months, HLS shares decreased by 28.76 percent as on 2 January 2019 and is trading at a PE ratio of 143.53x. HLS’s shares traded at $2.690 with a market capitalization of circa $1.52 billion as on 3 January 2019 (AEST 12:36 PM).
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