By Ambar Warrick
Investing.com-- Shares of Australian hospital operator Ramsay Health Care Ltd (ASX:RHC) slumped to an over four-month low on Friday after a KKR&Co-led consortium lowered its offer for the firm. The firm also logged a nearly 40% drop in its annual net profit.
Ramsay’s shares slumped over 3% to 70.69 Australian dollars, touching their weakest level since mid-April. Ramsay had paused the trading of its shares before the announcement.
The firm said in a statement that the KKR-led consortium, which had offered A$88 in cash per share, or roughly $15 billion, was now withdrawing that offer. Shareholders will receive A$88 per share for only their first 5000 shares.
Larger stakeholders will receive $78.20 per Ramsay share and 0.22 shares in Ramsay Sante (EPA:GDSF), the hospital operator’s French unit. The new offer is lower than the $15 billion figure initially offered.
Ramsay called the new offer “meaningfully inferior,” and said its board will not engage with the consortium further over the lowered offer. The hospital operator, however, said it is open to receiving an improved proposal.
The move by the consortium comes after it elected to not take due diligence access to Ramsay Sante. The alternative proposal does not require the consortium to access non-public information regarding Sante.
Ramsay, which also reported a nearly 40% drop in its annual net profit on Friday, saw its shares come close to levels last seen before the firm received a takeover bid from the consortium. But it expects its outlook to improve from the next year, as it increases its capacity.
The group, which is led by KKR (NYSE:KKR), also consists of the Abu Dhabi Investment Authority, and Australian Pension Fund HESTA.
Ramsay said it is still exploring the sale of its Malaysian joint venture, Ramsay Sime Darby Health Care.