Is Healthscope about to give up its battle to remain independent?
It yesterday offered exclusive due diligence to Brookfield Capital Partners after the Canadian-led investor group returned to the table with a takeover offer worth up to $4.5 billion.
Brookfield is proposing a scheme of arrangement worth up to $2.55 a share, plus a 3.5 cents a share interim dividend, up from $2.50 a share previously.
If the BGH-AustralianSuper consortium leads a rejection of the scheme with its 19% stake, Brookfield is also offering a $2.42-a-share cash takeover offer, which is conditional on 50.1% acceptance by Healthscope investors, as well as the scheme being rejected.
The new offer saw the Healthscope share price jump sharply yesterday, up 14.4% to $2.38.
That’s one cent a share above the unchanged $2.36 a share offer from the BGH group which was renewed last month.
It is the first time Healthscope has okayed due diligence to its two suitors (the other is the BGH consortium which includes AustralianSuper, Healthscope’s biggest shareholder) since the two groups first appeared on the scene back in May.
Healthscope still won’t provide due diligence to BGH AustralianSuper, claiming its offer “is significantly less attractive than the Brookfield proposal”.
“We consider the Brookfield proposal to be attractive for shareholders,” Healthscope chairman Paula Dwyer said in a statement to the ASX yesterday.
“It is superior to the BGH-AustralianSuper proposal and provides enhanced certainty. It also offers more options for Healthscope shareholders, including an option to retain an equity exposure to an unlisted Healthscope.”
“Healthscope has entered into a Process Deed with Brookfield under which Brookfield will be provided with exclusive access to due diligence for a limited period to facilitate a binding offer.
Even though AustralianSuper is wedded to the BGH group until the end of next March, the Brookfield offer terms offer a way for it to eventually support the higher offer.
The agreement binding AustralianSuper to the inferior BGH consortium offer ends on March 31 next year.
Brookfield has scheduled the scheme meeting for April 1. It has also offered similar terms to its original offer, which was designed to allow AustralianSuper to remain a shareholder in the privatised Healthscope.
In effect, the Brookfield offer proposes to make AustralianSuper more receptive to its higher offer.
Healthscope says it will continue the process of spinning off its property assets, but won’t into a binding agreement. The proposed property spin-off is a deal-breaker for both suitors.
