A consortium led by global investment firm KKR has walked away from its ‘alternative’ bid to take over Australia’s largest private hospital operator today, just weeks after dumping its initial $20 billion tilt to acquire Ramsay Health Care (ASX: RHC).
Citing Ramsay’s FY22 results, KKR told the target it was not in a position to improve the terms of its ‘alternative proposal’, which would have seen the consortium pay shareholders approximately $84.93 per share and do away with the due diligence process.
At the time it was announced, Ramsay claimed the alternative offer to be “materially inferior”.
Today, the KKR consortium says that Ramsay’s FY22 results imply there is meaningful downward pressure on the valuation proposed under the alternative proposal.
Those results disclosed the company’s net profit after tax fell by 25.9 per cent to $370.2 million in FY22, and that EBIT dipped by 21.3 per cent to $891.3 million.
“The latest correspondence received from the consortium refers to its review of Ramsay’s FY22 result announcement and notes that it is not in a position to improve the terms of the alternative proposal,” Ramsay said.
“The correspondence also stated that should the Ramsay board be willing to reset valuation expectations and consider a new proposal, the consortium would move quickly to discuss mutually acceptable terms.
“The Ramsay board is yet to consider the correspondence which was received late yesterday evening and appeared in media reports early this morning, however there is no certainty that any further proposal will be forthcoming or that any proposal would result in a transaction.”
Shares in RHC remain in a trading halt.
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