No deal: Ramsay Health Care takeover talks crumble

Private equity giant KKR and a consortium of investors have walked away from takeover talks with hospital operator Ramsay Health Care, suggesting the company should rethink its valuation expectations.

Ramsay entered a trading halt on Tuesday morning before releasing an update to investors revealing that the bidders had revealed they could not improve their offer for the company.

The correspondence noted that in light of Ramsay’s financial results, the suitors were not able to increase their offer beyond its current bid, but suggested that if Ramsay reset its expectations around its valuation, it could pick discussions back up.

Ramsay shares surged in April when news of the KKR-led consortium’s bid was announced. The global private equity giant had been watching Ramsay for some time and had been considering a tilt at the business since the start of 2021.

There was speculation at the time that more bidders would emerge for the private hospital giant, but over the subsequent months no others came forward.

KKR and its partners had initially lobbed an $88-a-share bid for the company, valuing it at more than $20 billion, but this changed over the months, with the suitors unable to gain access to Ramsay’s French operations, Ramsay Santé, for due diligence.

In late August the bidders were looking at an alternative bid which would see smaller shareholders still get $88 per share but those with larger stakes receiving $78.20 plus 0.22 shares in the French business.

It’s the second time takeover talks have collapsed at the company this month. Ramsay confirmed on Friday that talks between the company and IHH Healthcare Berhad for IHH to buy out Ramsay’s Asia joint venture, Ramsay Sime Darby, have ended.