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- Healius (HLS) reaffirms its “no action” stance to shareholders in relation to an off-market takeover bid from Australian Clinical Labs (ACL) on March 20
- ACL says the merger, if it comes to fruition, could create Australia’s largest pathology provider
- On Sunday, significant HLS shareholders Perpetual Investment Management and Tanna Capital said the offer was “unattractive” and that it should not go ahead
- For now, HLS says it “remains focussed on running Healius’ business in the best
interests of shareholders” - Shares in HLS closed at $2.97 on Monday afternoon
Last week, Australian Clinical Labs (ACL) made an off-market takeover bid to acquire Healius (HLS), but on Monday, Healius reaffirmed its direction to shareholders to take “no action” in relation to the offer.
Healius, Australia’s second-largest pathology provider, said on Monday that after reviewing the offer to a greater extent with advisers, it held its original stance toward the proposal that held “a number of deficiencies”.
ACL’s proposal to acquire Healius aimed to create the largest pathology provider in Australia by combining pathology and imaging services, which would lead to increased scale and profitability.
Under the proposed deal, Healius would join forces with the third-largest pathology provider in Australia, providing further competition for Sonic Healthcare (SHL) — the nation’s largest pathology provider today.
ACL’s pitch to Healius
Through the proposal, HLS shareholders would receive 0.74 ACL shares for every Healius share they owned.
With ACL using a 10-day volume-weighted average price (VWAP), HLS said the offer represented a discount of 4.2 per cent to its closing price on March 19.
Healius said using other conventional metrics, including VWAPs over one month, three months and six months, the offer represented a discount of 3.3 per cent, 8.3 per cent and 12.8 per cent, respectively, to the value of Healius immediately before the bid was announced
The offer includes 25 conditions, requires unconditional ACCC approval, and a 90 per cent minimum acceptance condition. The bid period lasts six months.
Two of HLS’ largest shareholders, however, weren’t impressed by the bid put forward by ACL.
Recent developments
On Sunday, Healius shareholders Perpetual Investment Management and Tanarra Capital, who hold a combined 21 per cent stake in the company, deliberated on the proposal.
Perpetual, who holds a 12.5 per cent interest in Healius, said the deal was “unattractive”.
“Having considered the ACL proposal, our view is that the ACL proposal is unattractive in terms of its structure, certainty, and terms and in our view could likely result in an inappropriate transfer of value from Healius shareholders to ACL,” the investor said.
John Wylie’s Tannara Capital, which holds an 8.5 per cent interest in HLS, was in a similar position.
He backed up Healius’ stance that the offer was “overly restrictive” and the offer spanned an “unusually long” time.
“It considers both the exchange rate offered by ACL for Healius shares and the offer conditions to be very unattractive. It, therefore, has no intention to accept ACL’s offer,” the company said.
Healius informed its shareholders that it had written to the Takoververs Panel to address the deficiencies in the offer from ACL.
For now, Healius said it “remains focussed on running Healius’ business in the best
interests of shareholders”.
The company said that, at some future time, should a merger proposal be developed that’s in the best interests of Healius’ shareholders, it would be given careful consideration.
Shares in HLS closed at $2.97 on Monday afternoon.
