The S&P/ASX 200 Index (ASX: XJO) and ASX shares have not had the pleasant start to the trading week that many of us hoped they would. At the time of writing, the ASX 200 has started the week off with some red ink, with the index currently still down by 0.02% at just over 7,328 points.

But one ASX 200 share is doing far worse than the broader market today. That would be funeral services provider InvoCare Limited (ASX: IVC).

InvoCare shares are having a shocker today. The company closed at $12.11 at the end of last week. But the company opened at $10.21 this morning and fell as low as $10.07 a share by mid-morning (down around 15%). At present, the InvoCare share price has recovered a little. But it is still down a meaty 9.33% at $10.98 a share.

So what on earth is going on with this company today that would elicit such a savage reaction from investors?

Why was this ASX 200 share down 15% today?

Well, it seems all of this is related to the takeover offer InvoCare received last month. As we covered at the time, InvoCare shares soared when news that the company had been approached by the Singaporean Blue Eternal, and private equity firm TPG Asia.

Under an indicative proposal, TPG offered to acquire 100% of the InvoCare shares on issue for a price of $12.65 in cash per share.

At the time this was made public, InvoCare shares soared by an impressive 37% to close to the offered pricing.

The company has stayed around that price level ever since. Well, until today.

This morning, just before the market open, InvoCare announced that TPG had withdrawn its proposed offer of $12.65 a share.

Investors clearly ramped up the price they were willing to pay for Incovare shares following the offer. In light of its dissolution, it makes sense that the company would be pulled back to the pricing levels it commanded before the offer was made public.

So this probably explains why the InvoCare share price is having such a disappointing start to the week today.

What’s next for InvoCare shares?

In its announcement this morning, InvoCare stated that “the Board remains willing to consider any proposal that represents fair value in the interests of all shareholders”.

It also revealed that TPG, despite withdrawing its offer, had requested that Genevieve Gregor be nominated to the InvoCare board. The company said it would “consider this request in due course”. 

But regardless, it seems that this chapter in InvoCare’s history has now come to a close. Investors seem disappointed, but who knows what the future may bring?

InvoCare shares have now lost all of the gains they have made in 2023 and are down by 0.36% year to date. At the current share price, Invocare has a trailing dividend yield of 2.23%.

 

The post ASX 200 takeover target dives 15% after its deal is laid to rest appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen 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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