Partners Group rebuffed in pursuit of Australia's Healius

The board indicated that it would be willing to engage with Partners Group – or any other third party – on the presentation of an improvement to the current bid of A$3.40 per share. Healius shares reached a three-month high of A$3.19 when Partners Group submitted its take-private offer last month. As of early afternoon trading on March 16, they were down 8.8% at A$2.47.

“We recognize the extreme volatility in the share market at present and the pressure our shareholders are under to deliver returns to their clients. However, the board’s response reflects its assessment of the value of each of Healius’ businesses. We are continuing to experience solid growth in our pathology, imaging and day hospitals divisions and we are taking active steps to reduce the group’s cost base,” Rob Hubbard, chairman of the board, said in a statement.

In addition, the company is seeking offers for its medical centers business, which is seen as undervalued at the current share price. An information memorandum has been distributed to interested parties.

Partners Group made its move for Healius after being granted a call option on Chinese conglomerate Jangho Group’s 15.9% stake in the company. Jangho - which saw its A$1.7 billion offer for Healius rejected last year - has agreed to sell its 98.9 million shares to Partners Group at a strike price of A$3.30 for a total consideration of A$326.5 million. There is also an option premium of A$30 million.

Healius is one of Australia’s largest healthcare operators, with interests spanning pathology, medical centers and medical imaging. As of year-end 2019, It had 99 pathology labs and 2,235 approved sample collection centers; 73 medical centers, 13 GP practices, and 14 day hospitals; and imaging facilities in 29 hospitals, 61 community centers, and 55 medical centers.

Pathology accounts for more than half of revenue, but there has been a push into medical centers, dental care, IVF services, and day hospitals. Revenue came to A$1.8 billion in the 2019 financial year, up from A$1.7 billion in 2018, while net profit rose from A$4.1 million to A$55.9 million. For the six months ended December 2019, revenue, EBIT and net profit were A$945.1 million, A$75.7 million, and A$42.1 million, respectively.

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• Topics
• Australasia
• Healthcare
• Buyouts
• Australia
• Partners Group