Shares in rural veterinary group Apiam Animal Health (ASX: AHX) closed almost 45 per cent higher today after private equity group Adamantem Capital Management lobbed a $161.8 million takeover bid for the Bendigo-based company.
The shares closed at 77.5c, up 24c, which was still short of the indicative proposal by Adamantem of 88c per share.
Apiam Animal Health says it has received a non-binding proposal from Adamantem to acquire all of its shares through a scheme of arrangement with the offer price ultimately subject to any dividends or returns of capital made by the company to shareholders ahead of the deal being finalised.
The predominantly cash offer also gives shareholders the option of receiving shares in the unlisted entity that is acquiring the company as part payment for their holdings.
While Apiam says the proposal may not result in a binding takeover offer eventuating for the group, Adamantem has put its foot on a 19.9 per cent stake in the company that is controlled by company founder Dr Chris Richards.
Apiam says Adamantem has secured a call option on the shares held by Richards’ CJOEA Family Company Pty Ltd at an exercise price of 88c per share.
The company says the option is exercisable only upon the emergence of a competing proposal for Apiam.
“If Apiam and Adamantem enter into a SID (scheme implementation deed), the option shares would be subject to customary voting support arrangements in favour of the transaction, subject to any superior proposal,” says the company.
The Adamantem offer remains subject to the Sydney-based private equity group undertaking its due diligence of Apiam.
The company has appointed an independent board committee comprising Professor Andrew Vizard, Evonne Collier and Richard Dennis to determine whether it is the best interests of shareholders to engage further with Adamantem.
The indicative offer price represents a significant premium to Apiam’s share price which has not traded at this level since 2022.
Apiam Animal Health is a specialist operator in the field of veterinary care, growing over the past decade to become the country’s largest rural and regional veterinary group by providing services to the companion animal and livestock industries.
Challenges in the sector have kept a lid on the group’s share market performance in recent years.
Apiam revealed in May that it was implementing cost-cutting measures across its clinic network to offset revenue declines across regions affected by cost-of-living challenges.
However, the company reported “small trend improvements in underlying EBITDA and NPATA” in the second half of FY25 despite the business tracking broadly in line with the first half.
“Intensive animal veterinary services continue to perform strongly in line with H1 revenue growth metrics,” said the company.
“Historically, Q4 is a seasonally higher trading period for this segment and is expected to contribute significantly to FY25.”
The latest takeover interest follows confirmation by Apiam in October last year that it had received a non-binding indicative offer from an undisclosed party.
The company said at the time that it firmly rejected the offer on the grounds that it undervalued the business.
Apiam reported a net loss of $1.5 million in the first half of FY25 with the result impacted by a $4.5 million impairment related to the sale of an underperforming NSW equine business.
Revenue for the half was up 1.7 per cent to $106.2 million while underlying EBITDA dipped 6.5 per cent to $8.6 million.
Shares in Apiam hit a high of 81c today before closing at 77.5c.
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