Volpara Health Technologies Ltd (ASX: VHT) stock is booming on Thursday.
In morning trade, the healthcare stock is up 43% to a 52-week high of $1.11.
Why is ASX healthcare stock Volpara rocketing?
Investors have been fighting to get hold of the health imaging technology company's shares this morning after it confirmed that it has received and accepted a takeover offer.
According to the release, Volpara has entered into a scheme implementation agreement with Lunit Inc. under which Lunit will acquire all of Volpara's stock at a price of $1.15 per share in cash.
This represents a sizeable 48% premium to where its shares last traded and values its equity at $295.7 million. Though, shareholders who have been holding onto its shares since 2019 or 2020 might feel a little aggrieved. During those years Volpara's stock was trading as high as $2.00 and $1.70, respectively.
However, management believes the deal will be a win for humanity. It notes that the transaction is expected to accelerate Volpara's ability to serve its purpose of saving families from cancer.
It also highlights that with the support of Lunit's in-house radiologists and complementary technologies, Volpara's repository of more than 100 million images will be strategically augmented by additional AI expertise and solutions.
Offer is in the 'best interests' of shareholders
The Volpara board is unanimous in its view that this transaction is in the "best interests" of Volpara shareholders. Cornerstone shareholders, which hold or control in aggregate 25.92% of Volpara's stock, also intend to vote in favour of the proposed scheme.
Though, it remains subject to approval from shareholders, the courts, and the New Zealand Overseas Investment Office.
Volpara Chair, Paul Reid, explained why the board believes this is a good deal for shareholders. He said:
Volpara's Board has assessed the proposed Scheme as providing compelling, risk-adjusted value and certainty for shareholders and unanimously support the proposed transaction. In considering options for Volpara, including continuing to implement the Company's growth strategy as a publicly listed company, the Board adopted a long-term view of the risks and rewards of various alternatives. The proposed transaction would accelerate the return of capital to shareholders and mitigate the risks that would otherwise be involved in delivering the opportunities from executing Volpara's strategic plan over time.
