- Regis Healthcare (REG) has shot down a $555 million takeover bid from investment giant Washington H. Soul Pattinson (SOL) and major shareholder Ashburn
- Soul Patts and Ashburn offered $1.85 per Regis share for full control of the aged care provider, but Regis said "no deal" today
- What's more, Regis revealed this is the second takeover offer made by Soul Patts in the last two months
- On September 30, Soul Patts teamed up with Skip Capital, billionaire Scott Farquhar's investment company, to offer $1.65 per share for control of Regis
- Regis said both offers undervalue the company given its medium-to-long-term prospects in light of the upcoming Aged Care Royal Commission report and economic recovery from COVID-19
- Shares in Regis have tacked on almost 23 per cent today, worth $1.81 each, while Soul Patts shares are almost 4 per cent lower at $27.79
Regis Healthcare (REG) has shot down a $555 million takeover bid from investment giant Washington H. Soul Pattinson (SOL) and major shareholder Ashburn.
WHSP, also known as Soul Patts, lobbed the bid yesterday, offering a neat $1.85 per Regis share for full control of the aged care provider. Ashburn, who partnered with Soul Patts on the bid, already holds a 27.2 per cent interest in Regis.
The Soul Patts and Ashburn offer represented a 25 per cent premium to Regis' last closing price and a 64 per cent premium to Regis' three-month volume-weighted average price of $1.13.
Nevertheless, Regis has already rejected the offer in its entirety, claiming the $1.85 price undervalues the company. What's more, Regis revealed this is the second takeover attempt from Soul Patts shot down in the last two months.
"No deal" to SOL and Skip Capital
Regis said Soul Patts offered $1.65 per share on September 30 for full control of the company, making the offer in partnership with billionaire tech mogul Scott Farquhar’s investment arm, Skip Capital.
Scott co-founded software developer Atlassian and is currently ranked the sixth richest person in Australia with a net worth of $12.5 billion.
Nevertheless, Regis has shrugged off both the $1.65 offer and the $1.85 offer, claiming the takeover bids do not fairly value the company given its medium-to-long-term prospects.
Before COVID-19 struck, Regis shares had consistently traded for between $2 each and $6 each for more than half a decade. When the virus, hit, Regis shares plummeted to an all-time low of 76 cents but have since staged a gradual recovery.
Looking ahead, it seems Regis is expecting this recovery to continue once the coronavirus pandemic settles down.
Coronavirus recuperation and Commission concerns
Regis said gave three key reasons it expects to grow in value in the medium to long term:
Firstly, Australia's Aged Care Royal Commission is set to deliver its final report on February 26, 2021, which is expected to bring about major policy and funding reform.
Secondly, the Australian Government already told the public it will respond to this Royal Commission in the May 2021 budget, foreshadowing increased funding for the aged care sector.
Finally, as COVID-19 restrictions ease and the virus is pulled under control, market trends across the aged care sector will return to their pre-COVID levels.
As such, Regis wasted no time shutting down the Soul Patts bids.
It seems investors liked both Regis' confidence and the premium takeover bids from Soul Patts and its partners.
Shares in Regis have tacked on 22.71 per cent today, currently worth $1.81 each at 3:21 pm AEDT. Regis has a $544.41 million market cap.
Soul Patts shares are down 3.71 per cent and worth $27.79.