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Aged care operator Estia Health (ASX: EHE) has opened its books to US private equity firm Bain Capital in the hopes of receiving an improved bid after knocking back the suitor’s initial $775 million proposal.
The $3 per share offer was lobbed to Estia Health less than two weeks ago, and at the time represented a 28.2 per cent premium to the last share price of $2.34 on 23 March.
However, the board said it did not consider the proposal from Bain Capital compelling enough to accept.
“In order to determine if Bain Capital is able to formulate an improved proposal, Estia Health has offered to provide a limited period of access to certain non-public financial and other information on a non-exclusive basis,” Estia Health told shareholders.
“The provision of this information is subject to certain conditions, including the signing of an appropriate confidentiality and standstill agreement."
Estia added that in light of its engagement with Bain Capital, it will not acquire shares under the recently announced on-market buy-back until further notice.
“The engagement between Estia Health and Bain Capital is preliminary in nature,” Estia Health said.
“There is no certainty that the indicative proposal will result in a revised proposal, that any revised proposal will be recommended by the board or result in a transaction being put forward to Estia Health shareholders for consideration.”
Founded in 2005, Estia Health has 70-plus aged care homes across Victoria, South Australia, New South Wales and Queensland that offer short-term respite care, long-term care, dementia care and palliative care.
The offer from Bain Capital came just two weeks after the group announced Anthony Rice would come on as chief financial officer (CFO) in mid-July, following a stint as interim CFO for retirement village operator Levande.
The current CFO, Steve Lemlin, will remain with Estia Health until the end of August to ensure a smooth transition.
Estia Health’s board members include Bilton and Dr Gary Weiss, a corporate raider who became chair at Brisbane-based Cromwell Property Group more than a year ago after ARA Group wrested control of the group and instigated a board spill.
Bain Capital’s buyout attempt comes six years after the firm purchased WA-based aged care company Craigcare, which was reportedly valued at up to $300 million at the time the deal was struck.
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