Healthscope Limited (ASX:HSO) has released an update on its recently received “takeover offer” from the Brookfield Capital partners. The company has received this takeover offer on November 12, 2018. Under this offered deed the Brookfield Capital Partners Ltd along with its affiliate partners and managed funds offered to have 100% acquisition of Healthscope Limited. Offer value of $2.455 per share has been indicated along with the “Scheme of Arrangement” which will together provide total proposal value to be $2.585 per share under this deed. In line with this proposal the company has provided an update on November 19, 2018 i.e. today.
HSO has also received the proposal from BGH-AustralianSuper in the past. After careful evaluation of the proposed deed, the board of HSO along with its advisers came up to the conclusion of not proceeding with the offered proposal by AustralianSuper. The offered deed was less attractive when compared to the proposal received from Brookfield Capital Partners Ltd.
As per the recent media releases by the company, the company has witnessed a significant growth period and is well in place with its strategies to deliver double digit earning growth in FY19. Company in line with its long-term strategy has kept the focus towards strengthening of the leadership capabilities and has recently opened flagship Northern Beaches Hospital as per panned schedule and budget. In its recent press release made on November 12, 2018, management has expressed his views on the future potential growth of the company keeping its healthy balance sheet and new investments made for the future growth of the company as strong base.
The new takeover proposal is subjected to several conditions which includes: to make an arrangement of a committed debt finance for the acquisition, secure all regulatory approvals including Foreign Investment Review Board and Overseas Investment officials, an approval from the investment committee to submit a binding proposal and due diligence.
HSO will not be able to enter into any new binding arrangements to give effect to any proposed transactions or divestment of any material asset, but it can continue with the previous processes that have been taken prior to this offer in relation to the proposed property transaction. Work fee of approximately $30 million will be paid by HSO to Brookfield under an event where HSO decides not to proceed with the offer received by Brookfield after receiving fully documented, financed and binding offer reflecting the terms of the proposal offer from Brookfield after an agreed date.
As required under the process deed, HSO has provided all necessary due diligence material to Brookfield Capital Partners Limited on November 19, 2018. The exclusivity period under this deed will end on December 21, 2018.
However, there is no certainty that this proposal offer will finally take the shape of takeover bid or scheme of arrangement. Various conditions subjective to the proposal along with the due diligence being successfully done and finally accepted by Brookfield will finally result into the proposal completion and binding agreement between HSO and Brookfield. HSO slightly up from the previous closing level, traded at the levels of $2.35 as at November 19, 2018.