Australian hospital operator Healius (ASX: HLS) has rejected a $2.02 billion offer from its largest shareholder Jangho Hong Kong Holdings just days after the offer was made.
Describing the offer as "opportunistic" a unanimous Healius board says the proposal from Jangho "fundamentally undervalues Healius".
"Consequently, the Board does not support the proposal and does not intend to pursue it further," says Healius.
The initial proposal made by Jangho, which owns nearly 16 per cent of Healius, was for $3.25 per share. Following the proposal on Thursday shares in Healius shot up by 12 per cent.
Healius also says the rejection is supported by the company's view that the proposal is not on solid ground.
"In particular, the sources of funding are not apparent from the information provided by Jangho and the proposal is conditional on a number of regulatory approvals that are outside the control of Jangho, including the approval of Chinese and Australian regulators," says Healius.
"The status of these approvals is unknown."
Healius goes on to mention that it has already commenced a number of strategic initiatives to improve the operations of the company, its care for patients, and its healthcare professionals.
"As the resulting benefits are delivered, Healius expects that shareholders will have the opportunity to realise value in excess of that outlined in the proposal."
Rob Hubbard the chairman of Healius seconded these sentiments.
"The Board remains very confident in the strategy being implemented by the management team and in the future growth of Healius," says Hubbard.
"We do not believe pursuing the proposal is in the best interests of shareholders other than Jangho and recommend shareholders tke no action in respect of this development."
Shares in Healius are down 4.55 per cent to $2.62 per share at 11.09am AEDT.
Business News Australia
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