The Healius Ltd (ASX: HLS) share price is defying the market weakness and pushing higher on Monday.
At the time of writing, the healthcare companyâs shares are up 7% to $2.97.
Why is the Healius share price pushing higher?
Investors have been bidding the Healius share price higher today after the company received a takeover proposal from a smaller rival.
In an incredibly bold move by $700 million Australian Clinical Labs Ltd (ASX: ACL), $1.58 billion Healius has received an all-scrip off-market takeover approach.
According to the release, Australian Clinical Labs is offering 0.74 shares for every Healius share. This represents a nil-premium offer based on the Healius share price on the day of its half-year results release and the last close price for the Australian Clinical Labs share price.
Is this a terrible offer?
While this offer may look incredibly unattractive at first glance, the value is expected to be unlocked through merger synergies and a valuation uplift.
The release highlights that the potential merged group is forecast to have pro forma FY 2023 EBIT of $361 million including cost synergies and operational improvement benefits.
Australian Clinical Labs believes that this would deliver a value uplift of approximately $2.1 billion if the merged group trades at the current blended forward EV/EBIT multiple of 17.5x.
This equates to a 90% increase in the value per Healius share implied by the offer consideration. Australian Clinical Labs also believes the merged group could be a candidate for ASX 100 inclusion in time.
Take no action
Healius has responded to the offer this morning. It said:
The Board of Healius advises shareholders to take no action in respect of ACLâs takeover offer. The Board will evaluate the offer and ACLâs bidderâs statement and provide shareholders with a recommendation in due course. Until then, there is no need for shareholders to take any action. Healius will keep its shareholders fully informed of any further developments.
The post Healius share price jumps 7% on takeover approach from smaller rival appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro 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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