The battle for IVF operator Virtus Health continues with Australian private equity group BGH upping its offer price as it goes head-to-head with London based rival CapVest.
Virtus briefly entered a trading halt on Monday before telling shareholders it received a revised higher offer from BGH for shares of $7.65 a share.
The stock closed at $7.25 on Friday and post Monday’s BGH announcement, added 2.7% to close at $7.45.
That caution on the part of investors was curious given it was 20 cents and well short of the new offer price and the bid from CapVest.
BGH said its latest offer could also include a cash and scrip deal for major shareholders including fertility doctors within the group who want to maintain their stakes in the business.
BGH first lobbed an unsolicited offer for $7.10 in December but in early February, Virtus announced it was granting exclusive due diligence to CapVest, which had produced a $7.60 share offer.
That upset BGH, which took the process deed that Virtus and CapVest had entered into to the Takeovers Panel, arguing that many of the terms should be struck out.
Last week the panel determined that there were issues with the exclusivity clauses in the CapVest agreement and ordered amendments, including deciding that Virtus and CapVest cannot enter a takeover agreement until March 11.
That gave BGH the space to lift its offer price.
BGH said in Monday’s statement that it intends to fund the acquisition through a combination of equity and debt financing.
“Equity financing will come from BGH Fund I, and BGH advises that they have received highly confident debt financing letters from a number of institutions to support a binding proposal,” BGH said in the statement.
BGH has close to 20% of Virtus’ issued capital and said on Monday that it would be voting all shares it holds against any CapVest offers – perhaps that’s why the shares fell 20 cents short of the new offer price.
The Virtus board says it has yet to review BGH’s revised proposal.
