Ramsay ups bid for Capio

Ramsay Health Care has upped its offer to buy pan-European healthcare company Capio AB (Capio) from €661m to €783m.

The Australian healthcare giant previously resisted calls to sweeten its bid. However, the new offer, launched as part of an unsolicited takeover bid for Capio made in July through Ramsay’s 50.9% owned French subsidiary Ramsay Générale de Santé (RGdS), has been increased from SEK48.5 to SEK58.0 cash per share.

Ramsay’s original bid was rejected by Capio’s board on the grounds that it undervalued the group, but Ramsay said in September that it was sticking to its offer – which it said would drive value for shareholders and both businesses.

There had been speculation that RGdS would need to revise its offer following Capio’s announcement of plans to restructure its business focus on the Nordic market with possible divestment of its French and German businesses, and its proposal to sell 22 of its hospital-strong French businesses to Vivalto Santé for €445m.

RGdS plans to fund the offer through a combination of debt and equity, with its value increased by SEK1,341m under the new deal.

The French subsidiary is drawing extra debt under its newly formed incremental debt facility, as well as increasing its total equity commitments by €100m.

Ramsay has increased its irrevocable commitment to subscribe for its pro rata share of the proposed equity raising by €57m to €314m.

Its offer is no longer subject to clearance from competition authorities, having waivered the condition, the Australian healthcare giant said. However, it said its French subsidiary is expecting clearance on the offer from the French Competition Authority by 15 October.

Capio has until 25 October to decide on the offer, although RGdS has the power to extend the acceptance period.

RGdS’ chief executive, Pascal Roché, said: ‘Our revised offer is highly financially compelling for Capio’s shareholders, providing a substantial premium compared to the pre-announcement share price levels and implies an EBITDA multiple of about 11,5x[2] and an EBIT multiple of more than 24×2 for Capio as a whole.’

Capio operates in Sweden, Denmark, Norway, Germany and France, with reported sales of around €1.6bn and EBITDA of €116m in 2017.