This ASX healthcare company receives takeover offer from Bain Capital; shares jump

2 min read | March 24, 2023 06:14 PM AEDT | By Neha Simpy

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This ASX healthcare company receives takeover offer from Bain Capital; shares jump — Image source: @truthseeker08/Pixabay

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Highlights:

Estia Health Limited (ASX:EHE) shares extended their rally to the third straight day on Friday.

The company announced it received an indicative non-binding takeover proposal from Bain Capital.

As per the terms of the proposal, EHE's stakeholders would get AU$3 cash for each share they hold in the company.

Shares of Estia Health Limited (ASX: EHE), which creates residential aged care homes, extended their gains to the third straight day on Friday, 24 March 2023. EHE shares today rose 14.10% to close at AU$2.67, extending their three-day rally to 24.76%. The rally in EHE shares got further legs after the company updated it received an indicative non-binding takeover proposal from Bain Capital.

Let’s learn more about Bain’s non-binding proposal for EHE now.

Referring to media speculation around a potential takeover interest and a prospective acquirer purchasing EHE’s securities, the company today said that at the time of this release, EHE did not know the identity of the party or parties who had acquired securities over the previous two days.

On Friday, the company gave its confirmation on being approached by Bain Capital on 23 March post market trading hours, for acquiring 100% of EHE’s securities through a scheme of arrangement (indicative proposal).

Terms and conditions of Bain Capital’s proposal

As per the terms and conditions of the proposal, EHE’s stakeholders would receive AU$3 cash per security if the proposal is accepted. This amount will be adjusted for any distribution paid or payable post the date of this proposal.

This price indicates a premium of 28.20% over EHE’s closing price of AU$2.340 on Thursday.

The company is currently reviewing the proposal to ascertain if it is in the best interest of shareholders.

Estia’s 1HFY23 results

Last month, Estia released its 1HFY23 results for the six months ending on 31 December 2022, wherein it recorded revenue from ordinary activities of AU$359.2 million, representing a growth of 5.1% over AU$342 million in pcp. Loss from ordinary activities after tax stood at AU$25 million, rising 211.8 % from AU$8 million in pcp.

The company paid a 100% franked distribution of 3.70 cps on 17 March 2023 for the first half of the current financial year.

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