Ramsay (ASX:RHC) ends talks on IHH's acquisition proposal

3 min read | September 09, 2022 11:01 AM AEST | By Ritwika

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Highlights:

Ramsay has confirmed that IHH Healthcare Berhad wouldn't be acquiring all of Ramsay Sime Darby Health Care Sdn.Bhd.

Ramsay Sime Darby is a joint venture in Asia between Ramsay and Sime Darby Berhad.

Globally acclaimed hospital group Ramsay Health Care Limited (ASX:RHC) shared an update on the conditional, non-binding and indicative proposal from IHH Healthcare Berhad to acquire 100% of Ramsay Sime Darby Health Care Sdn. Bhd.

Ramsay Sime Darby Health Care Sdn. Bhd is a 50:50 joint venture between Ramsay and Sime Darby Berhad in Asia.

As per the update, Ramsay confirmed that it has ended discussions with Sime Darby and IHH regarding the proposed acquisition. The discussions have failed to result in a binding agreement for the sale of Ramsay Sime Darby.

Meanwhile, the shares of Ramsay were spotted trading 0.182% lower at AU$70.930 per share at 10:15 AM AEST on 8 September 2022.

Details of the acquisition proposal:

On 22 March 2022, Ramsay confirmed that it has received a confidential, conditional, non-binding and indicative proposal from IHH Healthcare Berhad. The proposal was regarding the acquisition of 100% of its 50:50 joint venture in Asia, Ramsay Side Darby Health Care Sdn. Bhd.

As per the acquisition proposal, the conditional indicative enterprise value for Ramsay Sime Darby was MYR 5,670 million (or US$1.35 billion at a USD/MYR exchange rate of 4.2) on a cash-free and debt-free basis.

However, Ramsay also mentioned that the indicative proposal was subjected to the following conditions:

The successful completion of due diligence.
The successful negotiation and finalisation of a sale and purchase agreement.

Followed by a thorough review of the indicative proposal, Ramsay and SDH have agreed upon a four weeks period of exclusivity. The due diligence was expected to commence within this period to let IHH to execute due diligence and develop a sale and purchase agreement.

As of 22 March 2022, Ramsay said that its discussions between SDH and IHH were preliminary, and no agreement relating to the indicative proposal was reached by then. Furthermore, Ramsay already mentioned at that time that there was zero assurance of the finalisation of the agreement or any transaction related to the proposal will take place.

Today, Ramsay announced that it had ended its discussion with IHH regarding the indicative proposal. At present, both Ramsay and Sime Darby are optimistic about their business and are focused on delivering their commitment to high-quality care.

Furthermore, Ramsay added that the success of Ramsay Sime Darby Health Care was recently recognised with six Global Health AsiaPacific Healthcare and Hospital Awards, including the Hospital of the Year 2022 award.

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