Here’s why the Virtus share price is defying Friday’s sell-off

A couple smile as they look at a pregnancy test.A couple smile as they look at a pregnancy test.

The Virtus Health Ltd (ASX: VRT) share price is lifting on Friday despite the broader market’s suffering.

Right now, the S&P/ASX 200 Index (ASX: XJO) has slumped 0.75% while the All Ordinaries Index (ASX: XAO) has dipped 0.93%.

Meanwhile, the Virtus share price is trading at $8.15, 0.25% higher than its previous close.

The S&P/ASX 200 Health Care Index (ASX: XHJ) is also outperforming today, gaining 0.43%.

Could the company’s ongoing takeover be behind its buoyancy today? Let’s take a look.

Why is Virtus’ stock outperforming on Friday?

The Virtus share price is in the green today as shareholders get closer to receiving a potential special dividend worth up to 30 cents.

The last few weeks have been dramatic for Virtus and its suitors. CapVest Partners and BGH Capital were battling to takeover the company earlier this year.

However, CapVest stepped back from the competition last week, conceding defeat when the company’s board shifted its support from CapVest’s $8.10 takeover bid to BGH’s $8.15 bid.

Now, BGH is working to acquire 90% of the company’s voting power. It holds an 84.3% stake as of this morning.

Its offer closes at 7 pm on Monday – a public holiday for NSW and Victoria.

If it has met its target by the close of business on Tuesday, the company will consider paying a fully franked special dividend valued at up to 30 cents per share.

That means shareholders might get both an $8.15 payout as well as the benefits from franking credits. That could bring a tax benefit of 13 cents per share for some shareholders if the dividend is 30 cents per share.

Previously, the company promised to consider a special dividend of up to 44 cents per share. However, that was revised after it was forced to pay around $7.2 million in break fees to CapVest.

Virtus share price snapshot

Today’s gains have helped to boost the Virtus share price even further into the long-term green.

It’s currently trading nearly 21% higher than it was at the start of 2022. It has also gained 24% since this time last year.

The post Here’s why the Virtus share price is defying Friday’s sell-off appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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