The Estia Health Ltd (ASX: EHE) share price has jumped 9% in morning trading. The S&P/ASX 300 Index (ASX: XKO) healthcare share has announced that it has agreed a takeover deal with Bain Capital.
Scheme agreed
Estia Health has entered into a scheme implementation agreement with an entity controlled by private equity group Bain Capital, where Bain will buy 100% of the ASX 300 aged care share.
If the takeover is completed, shareholders will receive cash of $3.20 per Estia Health share, which would be reduced by the amount of any (permitted) dividends paid. The ASX 300 healthcare share is permitted to pay fully franked dividends of up to 12 cents per share, which would enable eligible shareholders to receive up to 5 cents per share of franking credits.
Is this a good takeover price? Estia Health noted that the takeover price represents a 50% premium to the closing Estia Health share price of $2.14 on 21 March 2023, which was before Bain Capital's proposal.
Is this a done deal for the ASX 300 share?
The proposed deal has progressed to a signed scheme implementation agreement for the company, but there are a few steps to go.
Estia Health's board of directors have unanimously recommended shareholders vote in favour of the takeover, in the absence of a better proposal and subject to an independent expert concluding that the scheme is in the best interests of Estia Health shareholders.
The takeover is subject to various conditions, including approval by Estia Health shareholders at a scheme meeting, which is expected to be held in November 2023.
It's expected that the takeover will be complete before the end of 2023. The company noted shareholders don't need to do anything at this point.
Leadership comments
The Estia Health chair Dr Gary Weiss said:
We are pleased that Bain Capital has recognised Estia Health's value as a leading Australian aged care operator with a strong reputation for person-centred care. The Estia Health board is confident as to the outlook for the business, however, recognises that the scheme allows shareholders to realise certain cash value now at an attractive premium.
The board considered a range of matters in coming to its unanimous recommendation, including the intrinsic value of Estia Health under a range of scenarios and the price at which its shares may trade over the medium term in the absence of the scheme. We believe the proposed transaction is a good outcome for shareholders and our stakeholders more broadly.
Estia Health share price snapshot
The ASX 300 healthcare share has risen by 46% since the start of 2023, as we can see on the chart below.
