The Ramsay Health Care Limited (ASX: RHC) share price is pushing higher on Tuesday.
In afternoon trade, the private hospital operator's shares are up 2% to $64.60.
Despite this gain, the Ramsay share price is still down 10% since the start of the year.
Why is the Ramsay share price pushing higher?
Investors have bidding the Ramsay share price higher today after the healthcare giant responded to media speculation relating to its Asian operations.
According to the release, Ramsay and Sime Darby Holdings have received a confidential, conditional, non-binding, indicative proposal from IHH Healthcare Berhad to acquire 100% of their 50:50 joint venture in Asia, Ramsay Sime Darby Health Care Sdn.
The release notes that under the indicative proposal, the conditional indicative enterprise value for Ramsay Sime Darby is MYR5,670 million (or US$1.35 billion) on a cash free, debt free basis.
Though, the indicative proposal remains subject to conditions including the completion of satisfactory due diligence and the negotiation and finalisation of a sale and purchase agreement.
What now?
Ramsay and its joint venture partner appear to have seen value in the offer from IHH Healthcare Berhad.
The release reveals that after reviewing the proposal, both Ramsay and Sime Darby Holdings have agreed to a period of exclusivity for four weeks when due diligence commences to allow IHH Healthcare Berhad to conduct due diligence and negotiate a sale and purchase agreement.
Though, management warns that discussions between Ramsay, Sime Darby Holdings and IHH Healthcare Berhad are preliminary and no agreement has been reached in relation to the indicative proposal. As such, there is no guarantee that an agreement will be reached in respect of the proposal or that a transaction will eventuate.
