ASX 200 healthcare stock Ramsay Health Care Ltd (ASX: RHC) is in the spotlight again as rumours of a potential takeover bid swirl in the market.
Private equity giant Kohlberg Kravis Roberts (KKR) is reportedly considering a fresh attempt to acquire Ramsay, Australia's largest private hospital operator.
KKR was previously willing to pay $88 per share, valuing Ramsay at $20 billion.
Ramsay's share price is now less than half that figure, having slid more than 23% this year to date to fetch $40.37 apiece at the time of writing.
Let's see the latest.
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Refreshed takeover talks?
The buzz around a potential Ramsay Health Care acquisition has intensified. According to The Australian, speculation is mounting that KKR is gathering a management team to take over the business.
KKR has a history with the ASX healthcare stock, having previously tabled a takeover bid. The firm was ready to offer $88 per share, but the deal fell through.
With Ramsay's share price less than half that value, the thinking is KKR might view this as an attractive entry point.
Adding fuel to the fire is the ASX healthcare stock's significant real estate portfolio, worth over $4 billion. This includes around 70 hospitals and day surgery units.
Wesfarmers Ltd (ASX: WES) is another name reportedly floating around the acquisition sphere.
Whilst the rumours are circulating about a takeover, for now, they are just that – rumours. Time will tell if they turn out to be fact or not.
ASX 200 healthcare stock oversold?
Ramsay recently reported its FY24 results, and it was a challenging year. Total revenues were up 9% compared to last year, but pre-tax earnings were down 40 basis points.
This produced a 2% slump in net profit. Despite this, management declared a final dividend of 40 cents per share, fully franked.
This dip in profits and the subsequent share price decline have led some analysts to consider Ramsay as oversold.
Shaw and Partners believes the company is undervalued at its current price.
According to my colleague Bernd, the broker argues the ASX 200 healthcare stock has been well managed and expects an improvement in FY25.
Meanwhile, it is rated a hold from consensus, according to CommSec data.
Foolish takeaway
With takeover rumours gaining traction, investors are closely watching this ASX 200 healthcare stock.
There's no confirmation of an offer or any deal on the table just yet. So we must wait for this response by either KKR or Ramsay, if it is correct.
In the past year, Ramsay shares are down 21%.
