The Healius Ltd (ASX: HLS) share price is defying the market weakness and pushing higher on Monday.
At the time of writing, shares in the healthcare company are up 7% to $2.97.
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Why is the Healius share price pushing higher?
Investors have been bidding the Healius share price higher today after the company received a takeover proposal from a smaller rival.
In an incredibly bold move by $700 million Australian Clinical Labs Ltd (ASX: ACL), $1.58 billion Healius has received an all-scrip off-market takeover approach.
According to the release, Australian Clinical Labs is offering 0.74 shares for every Healius share. This represents a nil-premium offer based on the Healius share price on the day of its half-year results release, and the last close price for the Australian Clinical Labs share price.
Is this a terrible offer?
While this offer may look incredibly unattractive at first glance, the value is expected to be unlocked through merger synergies and a valuation uplift.
The release highlights that the potential merged group is forecast to have pro forma FY 2023 EBIT of $361 million, including cost synergies and operational improvement benefits.
Australian Clinical Labs believes that this would deliver a value uplift of approximately $2.1 billion if the merged group trades at the current blended forward EV/EBIT multiple of 17.5x.
This equates to a 90% increase in the value per Healius share implied by the offer consideration. Australian Clinical Labs also believes the merged group could be a candidate for ASX 100 inclusion in time.
Take no action
Healius responded to the offer this morning. It said:
The Board of Healius advises shareholders to take no action in respect of ACL's takeover offer. The Board will evaluate the offer and ACL's bidder's statement and provide shareholders with a recommendation in due course.
Until then, there is no need for shareholders to take any action. Healius will keep its shareholders fully informed of any further developments.
