Ramsay Health says KKR-led group unwilling to improve $14.5 bln offer

Trading information for KKR & Co is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 23, 2018. REUTERS/Brendan McDermid

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Sept 13 (Reuters) – A KKR-led (KKR.N) consortium has told Australia’s Ramsay Health Care (RHC.AX) it will not improve its near $14.5 billion cash-and-stock offer for the hospital operator, a move that will likely put a deal on ice.

Shares in Ramsay, which has flagged it is unhappy with the terms, slid more than 10% on the news. A deal, if successful, would be one of the country’s largest ever private equity buyouts.

In late August, the consortium, whose members include Australian pension fund HESTA and the Abu Dhabi Investment Authority, took an $88 cash per share off the table.

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Instead the bid was revised so that Ramsay shareholders would be entitled to A$88 per share – as in the all-cash proposal – but only for the first 5,000 shares.

For investors with larger stakes, the offer was split into A$78.20 per share in Ramsay and 0.22 share in French subsidiary Ramsay Generale de Sante (GDSF.PA). Ramsay has described the alternative proposal as ‘meaningfully inferior’.

Ramsay said on Tuesday that the consortium cited the hospital operator’s weak performance in the past business year.

“The Ramsay board is yet to consider the correspondence which was received late yesterday evening … however there is no certainty that any further proposal will be forthcoming or that any proposal would result in a transaction,” it added.

The KKR group would discuss mutually acceptable terms if Ramsay was willing to reset valuation expectations and consider a new proposal, the statement on Tuesday also said.

KKR declined to comment.

Ramsay’s shares were last down 10.6% at A$62.80.

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Reporting by Sameer Manekar in Bengaluru and Scott Murdoch in Hong Kong; Editing by Edwina Gibbs

Our Standards: The Thomson Reuters Trust Principles.

Scott Murdoch

Thomson Reuters

Scott Murdoch has been a journalist for more than two decades working for Thomson Reuters and News Corp in Australia. He has specialised in financial journalism for most of his career and covers equity and debt capital markets across Asia based in Hong Kong.

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