The board of fertility multinational Virtus Health (ASX: VRT) has decided not to engage with BGH Capital regarding its revised proposal yesterday to acquire the business for $7.65 per share.
The decision comes after CapVest Partners spiced up the bidding process by increasing its indicative offer to $7.80 per share, valuing the healthcare firm at approximately $667 million, representing $0.20 more per share than its original January offer.
Since last month, Virtus Health has been at the heart of a bidding war between London-based CapVest, a leading European mid-market firm, and Melbourne-based BGH Capital.
BGH Capital opened the bidding process in December 2021, expressing an interest in acquiring 100 per cent of Virtus Health shares at $7.10 per share, having acquired a 9.99 per cent stake in the business.
Entering the fray in January, CapVest made a non-binding proposal to acquire 100 per cent of Virtus Health shares for $7.60, valuing the company at approximately $649 million.
After Virtus Health granted CapVest an exclusivity agreement, BGH brought the Takeovers Panel into the equation following the initial bid in January, successfully arguing a declaration of unacceptable circumstances. BGH also doubled its holding in Virtus Health to 20 per cent.
CapVest’s new offer of $7.80 per share, less the dividend payout, offers a 4.7 per cent premium on yesterday’s closing price of $7.45 per share and comes with an optional alternative structure. Offering a lower cost of $7.70 per share, CapVest is willing to proceed with a minimum 50.1 per cent off-market takeover.
The current share price is significantly higher than the March 2020 low of $1.57 per share.
Having now completed a substantial amount of due diligence, CapVest advised that it expects to be in a position to enter an implementation agreement by 11 March 2022.
Although the board of Virtus Health consider CapVest’s new bid as superior to BGH, this offer will not be put to its shareholders until an implementation agreement is signed.
Virtus is one of the world's top five assisted reproductive services companies with market-leading positions in Australia, Ireland and Denmark and a growing presence in Singapore and the UK.
Shares in VRT are up 5.23 per cent to $7.84 per share at 11.53 am AEDT.
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