A $775 million indicative bid from Bain Capital has been knocked back by aged-care homes company Estia Health (ASX: EHE). The company has, however, offered some non-publicinformation to see whether the private equity firm will come up with a higher offer.
Estia announced on 24 March that Bain Capital had made a $3-a-share indicative proposal late the prior day. On 4 April, the company said its board had carefully considered the offer with its advisers and had also spoken to some of its major shareholders. The board had decided the indicative proposal was not compelling “having regard to price and conditionality”.
The company said: “In order to determine if Bain Capital is able to formulate an improved proposal, Estia Health has offered to provide a limited period of access to certain non-public financial and other information on a non-exclusive basis.”
The access was to be subject to conditions including the signing of a confidentiality and standstill agreement.
“In light of the engagement with Bain Capital”, Estia said it would not go ahead with acquiring shares under a recently announced on-market buyback until further notice.
Bain Capital’s bid lifted Estia’s share price 23% from around $2.15 to $2.65 at which price it remained after the 4 April announcement.
Prior to listing, Sydney-based Estia Health was an investee of Quadrant Private Equity in partnership with Mercury Capital.
Quadrant initially invested $90 million from its Quadrant Private Equity 3 fund to acquire a majority stake in Estia in late 2013. The following year Quadrant merged south Australian business Padman Aged Care with Estia in a deal originated by Mercury Capital. Mercury Capital also invested in that deal. Cook Care, which operated aged-care facilities in NSW and Queensland was added to the Estia business during 2014 with the company then floated on the ASX late that year.
Shares were issued at $5.75 in an IPO which raised $728.1 million.
Image: Estia Health’s Maroochydore, Queensland, facility.