The Estia Health Ltd (ASX: EHE) share price has soared 15% after receiving a takeover offer from Bain.
This business is one of the largest aged care operators in Australia.
Takeover offer for Estia
The business said that there has been media speculation about a potential takeover offer and a potential acquirer buying shares of Estia Health. The ASX aged care operator said that it’s not aware of the identity of the party or parties that have been buying shares over the prior two days.
But, Estia Health then confirmed that after the market closed on 23 March 2023, it received a bid from Bain Capital that was a “confidential, non-binding and indicative proposal” to buy all of Estia Health’s shares. This is the ‘indicative proposal’.
Under the terms of the offer, Estia Health shareholders would receive $3 cash per share, adjusted for any dividends paid.
Not a done deal
As is often the case with private equity offers, there are a number of conditions that are attached to the offer that need to be satisfied.
That includes “satisfactory completion of due diligence on an exclusive basis, execution of a binding scheme implementation agreement, unanimous recommendation from the Estia Health Board of Directors and commitment from all directors to vote in favour of the transaction (in the absence of a superior proposal), approval of Bain Capital’s Investment Committee and approval of the Foreign Investment Review Board.”
Estia’s response to the takeover offer
The aged care operator’s board and advisers are considering the proposal and assessing whether it’s in the best interest of the shareholders to engage with Bain Capital.
Estia noted that there is no certainty that the indicative proposal will “result in a binding offer or that any transaction will eventuate.”
The aged care operator also said that shareholders don’t need to take any action and it will keep the market informed.
It’ll be interesting to see what happens next. Investors don’t seem convinced, with there being a sizeable gap between the current Estia Health share price to the $3 per share offer price.
