Super Funds Launch $20bn Ramsay Health Care Takeover Bid

An investor consortium has launched a $20-billion bid to take over Australia’s biggest private hospital operator. 

Ramsay Health Care’s share price leaped 25 per cent after it confirmed it had been approached by the KKR consortium of financial investors for a conditional takeover bid of the $14.7-billion company, which operates 72 hospitals and medical facilities across Australia, with significant holdings across Europe and the United Kingdom also. 

The consortium reportedly also included healthcare superannuation fund HESTA and international investors.

Ramsay shareholders would be entitled to $88 per share in the acquisition deal for 100 per cent ownership, but the discussions are in preliminary stages. 

The Ramsay board of directors has provided a non-exclusive due diligence opportunity to the consortium to demonstrate whether they can put forward a binding proposal that is in shareholders’ interests. 

The indicative proposal was subject to a number of conditions which included the completion of due diligence, the retention of Ramsay’s $4.5-billion property and equipment portfolio and subsidiary companies, regulatory approvals including the Foreign Investment Review Board, and shareholder approval. 

There is no guarantee the indicative proposal will move forward after it was revealed the KKR consortium had reserved the right to withdraw its indicative proposal if it became public.

Ramsay has appointed UBS AG, Australia Branch and Herbert Smith Freehills as financial and legal advisors. 

It is still looking to carve off its Malaysian and Indonesian healthcare arm Ramsay Sime Darby Health Care, which was flagged last month. 

Ramsay recently completed the acquisition of UK-based mental health provider Elysium Healthcare for about $1.4 billion.

Ramsay Health Care’s biggest shareholder, the Paul Ramsay Foundation, is reportedly supportive of the takeover bid. It has an 18.8 per cent stake in the ASX-listed company, while American multinational investment platform BlackRock Group is a 5 per cent shareholder. 

According to its 2022 half year results Ramsay Healthcare has more than $4 billion in property and equipment assets. 

It recently announced plans to build a private short-stay hospital in Townsville with an integrated patient care facility.