IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>KKR cannot improve the terms of its offer but left the door open by stating that a deal can be quickly closed if the Board is willing to reset expectations.</li>
<li>The transaction is stuck in an impasse as <a href="https://www.smartkarma.com/entities/ramsay-health-care-ltd" target="_blank" data-smartkarma-citation="entities:673:1" rel="noopener">Ramsay Health Care (RHC AU)</a> will not recommend KKR’s offer until it is improved, and KKR says it cannot improve terms.</li>
<li>The peers’ shares have been, on average, flat since the undisturbed date. The shares are trading slightly below the undisturbed price and are attractive on fundamentals.</li>
</ul>


KKR cannot improve the terms of its offer but left the door open by stating that a deal can be quickly closed if the Board is willing to reset expectations.
The transaction is stuck in an impasse as Ramsay Health Care (RHC AU) will not recommend KKR’s offer until it is improved, and KKR says it cannot improve terms.
The peers’ shares have been, on average, flat since the undisturbed date. The shares are trading slightly below the undisturbed price and are attractive on fundamentals.


Ramsay’s Bait-And-Switch KKR Offer Heads for the Exit

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ramsay-health-care-ltd" target="_blank" data-smartkarma-citation="entities:673:1" rel="noopener">Ramsay Health Care (RHC AU)</a> disclosed that the <a href="https://www.smartkarma.com/entities/kkr-co-inc" target="_blank" data-smartkarma-citation="entities:27333:1" rel="noopener">KKR &amp; Co Inc (KKR US)</a> consortium withdrew its indicative proposal but remains committed to the alternative proposal, which the Board earlier rejected. </li>
<li>The alternative proposal, while inferior to the indicative proposal, is still attractive and better than the status quo of no deal. The Board will engage for an improved offer. </li>
<li>The value gap between the parties is not huge, and a deal is possible. The upside (20% to alternative proposal) vs downside (-9% to undisturbed price) is worth a punt. </li>
</ul>



Ramsay Health Care (RHC AU) disclosed that the KKR &amp; Co Inc (KKR US) consortium withdrew its indicative proposal but remains committed to the alternative proposal, which the Board earlier rejected. 
The alternative proposal, while inferior to the indicative proposal, is still attractive and better than the status quo of no deal. The Board will engage for an improved offer. 
The value gap between the parties is not huge, and a deal is possible. The upside (20% to alternative proposal) vs downside (-9% to undisturbed price) is worth a punt. 


<ul>
<li>
<a href="https://www.smartkarma.com/entities/ramsay-health-care-ltd" target="_blank" data-smartkarma-citation="entities:673:1" rel="noopener">Ramsay Health Care (RHC AU)</a> notes that discussions with KKR are ongoing, but the indicative proposal is held up by due diligence access to <a href="https://www.smartkarma.com/entities/ramsay-generale-de-sante" target="_blank" data-smartkarma-citation="entities:21473:1" rel="noopener">Ramsay Generale de Sante (GDS FP)</a>.</li>
<li>KKR proposed an alternative proposal that the Board rejected as “<em>meaningfully inferior.</em>” KKR remains interested, and its shenanigans are likely a move to nudge down the price.</li>
<li>At the last close, the risk/reward profile is favourable as the downside due to a deal break (-3% estimated decline) is lower than the upside (+20%) to the indicative proposal.</li>
</ul>



Ramsay Health Care (RHC AU) notes that discussions with KKR are ongoing, but the indicative proposal is held up by due diligence access to Ramsay Generale de Sante (GDS FP).
KKR proposed an alternative proposal that the Board rejected as “meaningfully inferior.” KKR remains interested, and its shenanigans are likely a move to nudge down the price.
At the last close, the risk/reward profile is favourable as the downside due to a deal break (-3% estimated decline) is lower than the upside (+20%) to the indicative proposal.


Ramsay's Overdue Update on the KKR Proposal

<ul>
<li>The KKR consortium will offer A$88.00 per share less any dividends paid after the date of the indicative proposal. The offer less interim dividend of A$0.485 is A$87.52 per share.</li>
<li>The <a href="https://www.smartkarma.com/entities/ramsay-health-care-ltd" target="_blank" data-smartkarma-citation="entities:673:1" rel="noopener">Ramsay Health Care (RHC AU)</a> Board has provided due diligence access. We think the offer is attractive and represents an all-time share price high. </li>
<li>The largest shareholder is said to be supportive. The gross spread of the offer less the interim dividend of A$87.52 to the last close price of A$80.00 is 9.4%. </li>
</ul>


The KKR consortium will offer A$88.00 per share less any dividends paid after the date of the indicative proposal. The offer less interim dividend of A$0.485 is A$87.52 per share.
The Ramsay Health Care (RHC AU) Board has provided due diligence access. We think the offer is attractive and represents an all-time share price high. 
The largest shareholder is said to be supportive. The gross spread of the offer less the interim dividend of A$87.52 to the last close price of A$80.00 is 9.4%. 


Ramsay’s Indicative Bid from the KKR Consortium

South Africa

Netcare Limited is a South African hospital promotion and management company that owns and operates a number of private hospitals and clinics.

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Netcare Ltd (NTC SJ)

Ramsay’s Bait-And-Switch KKR Offer Heads for the Exit

The peers’ shares have been, on average, flat since the undisturbed date. The shares are below the undisturbed price and are attractive on...

Arun George

Ramsay and KKR’s Game of Cat and Mouse

The value gap between the parties is not huge, and a deal remains possible. The upside (20% to the alternative proposal) vs downside (-9% to...

Arun George

Ramsay's Overdue Update on the KKR Proposal

KKR is interested but is looking to nudge the price down. A potential binding offer's risk/reward profile is favourable due to the limited downside...

Arun George

Ramsay’s Indicative Bid from the KKR Consortium

The KKR consortium will offer A$88.00 less an interim dividend of A$0.485 for a total of A$87.52 per share. The offer is attractive. The gross...

Arun George

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