Healthscope Opens With A Gap-Up After Receiving A Proposal From Brookfield

  • Nov 12, 2018 AEDT
  • Team Kalkine
Healthscope Opens With A Gap-Up After Receiving A Proposal From Brookfield

Healthscope Limited (ASX: HSO) received a ‘Takeover Offer’ from Brookfield Capital Partners Ltd, as announced on November 12, 2018. Brookfield Capital Partners Ltd along with its affiliate partners and managed funds presented a proposal to have 100% acquisition of Healthscope. The proposal for the offer was made under ‘Takeover Offer’. Under this proposal the ‘Takeover Offer’ value of $2.455 per share has been indicated with ‘Scheme of Arrangement’ which will together amount to the ‘Brookfield Proposal’ of $2.585 per share. 

On the other hand, Healthscope Board together with the guidance of company advisers has decided not to provide access to due diligence to a consortium of financial investors which include AustralianSuper (the ‘BGH-AustralianSuper Consortium’. Healthscope Board has carefully evaluated the proposal from AustralianSuper and found the offer less attractive as compared to the proposal from Brookfield Capital Partners Ltd. Healthscope’s Chairman, Paula Dwyer, said, assessment for the proposal was done keeping the long-term interests of the Company and its shareholders in consideration. Significant progress achieved by the team over a span of last twelve months along with the outlook for the company was kept into consideration while evaluating the change of control proposals.

As per the management view, Company has noticed significant growth period and is well on track to deliver double digit earnings growth in FY19. Company has remained focused in strengthening the leadership capabilities and has opened their flagship Northern Beaches Hospital, on time and on budget. Extension of the key contracts under New Zealand pathology business, optimization of the hospital network along with the divestment of the Asian pathology business at an attractive value were some of the key achievements in FY18. Healthy balance sheet along shaping up of the investments made for future growth presents a healthy outlook for the company.

Meanwhile, the new proposal is subjected to condition under which Brookfield has to secure acceptances from shareholders representing 50.1% of Healthscope’s total issued capital and the Brookfield Scheme of Arrangement being unsuccessful. The offer will remain for a period of at least two weeks after the date of the scheme meeting which will be held after April 1, 2019.

The proposal is subjective to various conditions:

  • Arrangement of committed debt finance for the acquisition
  • Approval of the investment committee to submit a binding proposal
  • Regulatory approvals including Foreign Investment Review Board and Overseas Investment Office approvals
  • Due Diligence
  • Healthscope cannot enter into any new binding agreement to give effect to proposed property transaction or divest any material asset, however it can continue with the processes already underway in relation to the proposed property transaction
  • Healthscope will have to pay a work fee of $30 million to Brookfield under the condition wherein Brookfield provides a fully documented, financed and binding offer reflecting the terms of the Brookfield Proposal by an agreed date and the Healthscope decides not to proceed with the offer

So far, HSO’s Management finds the Brookfield Proposal to be attractive for shareholders as compared to the BGH-AustralianSuper proposal. The proposal comes with an option for Healthscope shareholders wherein they can retain an equity exposure to an unlisted Healthscope. As is for now the Healthscope board has decided to grant Brookfield exclusive due diligence for a limited period to facilitate a binding offer. With the announcement of the proposal, HSO opened with a gap up in early session and showed a jump of 13.7% from the previous closing levels of $2.08. HSO is currently trading at the levels of $2.365 (as at November 12, 2018, 3 PM AEST).


Disclaimer

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkinemedia.com and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.

 

 

All pictures are copyright to their respective owner(s).Kalkinemedia.com does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.

 

There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

CLICK HERE FOR YOUR FREE REPORT!
   
x
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK