Healius Limited (ASX: HLS) jumps over 9% on takeover bid from ACL

Highlights:

• Healius Limited (ASX: HLS) announced receiving an off-market takeover bid from Australian Clinical Labs Limited (ASX: ACL) on Monday.
• As per the proposed offer, every HLS stakeholder would be obtaining 0.74 securities of ACL for every HLS security owned by them.
• The dates for the offer to be open for acceptance are from April 2023 until 29 September this year, 7:00 pm AEDT.

Speciailty diagnostic services provider Healius Limited (ASX: HLS) announced receiving an off-market takeover bid from Australian Clinical Labs Limited (ASX: ACL) on Monday, 20 March 2023. HLS stock reacted positively to the news and surged 9.712% to AU$3.05 at 12:39 pm AEDT.

Let’s learn about the HLS news in detail.

On Monday, Australian Clinical made an off-market takeover offer to buy 100% paid ordinary securities of Healius.

As per the proposed offer, every HLS shareholder would get 0.74 securities of ACL for every HLS security owned by them on the record date. The offer denotes a zero premium merger based on the volume-weighted average price of both HLS and ACL securities on the Australian Securities Exchange between 28 February and 17 March this year.

If Australian Clinical successfully acquires 100% HLS securities on issue, current HLS stakeholders will possess 68%, and the current ACL stakeholders will own 32% of the merged entity, respectively.

The rationale behind ACL’s proposed merger offer

Australian Clinical thinks that the proposed merger offer will prove advantageous to both companies as they have the potential to be worth substantially more together compared to standalone companies. Further, Australian Clinical anticipates the proposed merger to unlock around AU$95 million of expected cost synergies within four years of completion of the merger. ACL’s management team has a proven record of providing excellent financial performance, the company said.  

Also, the merged group is anticipated to be the biggest pathology services provider in Australia and one of the biggest commercial pathology groups worldwide, with nearly AU$2.7 billion in revenue.

Terms and conditions of ACL’s proposed offer

ACL’s proposed merger offer is contingent on various terms and conditions. The offer will need ACCC’s approval, and the procedure is likely to take a minimum of six months.

Additionally, the proposed offer needs the receipt of the Foreign Investment Review Board’s consent. It will also need 90% of the minimum acceptance condition and Australian Clinical stakeholders’ approval. There should be no material unfavourable change taking place regarding HLS.

There are other terms and conditions pertaining to the financial performance of HLS. It comprises HLS not declaring that (or to the effect that) its underlying EBIT, reported EBIT or profit for the year from continuing operations in FY23 will or anticipated to be lesser than certain amounts. Also, no Australian Clinical competing proposal should be made or notified by any third party, etc.

The offer is open for acceptance until 29 September this year 7:00 pm unless it is further extended in line with the Corporations Act.