Ramsay’s stock tumbled after the CEO sold 45,000 RHC shares

  • Mar 27, 2019 AEDT
  • Team Kalkine
Ramsay’s stock tumbled after the CEO sold 45,000 RHC shares

Investors belief got shaken after the Chief Executive Officer and Managing Director of Ramsay Health Care Limited (ASX: RHC) sold off $2.9 million worth of shares in the company. The reports claimed that the sale of shares relates to the director’s personal income tax obligation.

On Wednesday, it was reported that Managing Director Mr Craig McNally sold 45,000 RHC ordinary shares on 25 March 2019 via an on-market trade at a consideration of $64.0482 average price per share.

The news immediately got factored in Ramsay’s stock price which led the stock to decline by 0.717% in day-trade on Wednesday, 27 March 2019. It could be seen that cuts were not too deep as the company had a viable reason to explain for the sale of shares.

Ramsay explained that McNally has disposed-off some part of his shareholding due to his personal income tax obligations. These obligations reportedly arose in relation to the shares allocated upon vesting of LTIs ceasing to be subject to dealing restrictions under the respective Income tax legislation, thereby bringing Fiscal 2019 tax liability into a picture.

Mr McNally’s relevant interest in Ramsay Health Care now sits at total 323,834 ordinary shares including 293,834 shares in Direct interest and 30,000 shares in Indirect Interest through L & C McNally Pty Ltd. He also holds 187,635 Performance Rights granted under the terms of the Ramsay Executive Performance Rights Plan but not yet vested, as per the company’s information.

Further, the company hinted that Mr McNally might further dispose-off RHC shares with the view to meet his impending tax obligations.

The Health Care Group, Ramsay, recently informed the market about the right issue announced by its French subsidiary, Ramsay Générale de Santé (RGdS). The RGdS has launched a rights issue to raise EUR625 million through the issue of 37,978,547 new shares at 1:2 exchange ratio.

That means every RGdS shareholders is entitled to participate in the RGdS Rights Issue on a 1 RGdS New Share for every 2 ordinary shares held at a price of EUR16.46 per RGdS New Share, representing a 21.62% discount to the closing price of EUR21.00 as on 20 March 2019.

The right issue is aimed to finance the acquisition of Nasdaq Stockholm listed, a pan-European healthcare company, Capio AB. Ramsay expects the acquisition of Capio to be EPS accretive in the coming two to three years, but due to delay in completion of the acquisition transaction, Capio may be slightly EPS dilutive to the Ramsay Group in Fiscal 2019, as per the company’s information.

The period to subscribe for RGdS new shares has open today, i.e., 27 March 2019 and will continue till 5 April 2019.

RHC last traded at $63.730 on 27 March 2019. It’s price to earnings multiple stood at 32.320 x with a market capitalisation of $12.97 billion.

Over the past 12 months, the stock edged up by 1.81% including a positive momentum of attractive 15.80% recorded in the past three months.

Also Read: Ramsay Healthcare releases first results after Capio acquisition, 1HFY19 revenue up 16.3%


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