Ramsay Health Care chairman Michael Siddle set to be biggest winner in KKR’s tilt thanks to founder’s gift

Ramsay Health Care founder Paul Ramsay was generous in life and death — just ask the company’s chairman Michael Siddle, who may collect $330m.

‘Right hand man’, the late Paul Ramsay, centre, with present company chairman Michael Siddle, far right. Picture: Sara Nixon

Ramsay Health Care’s founder, the late Paul Ramsay, bequeathed the company’s chairman and his long-time “right hand” man Michael Siddle a gift that will be worth $330m if KKR’s takeover bid proceeds – making him one of the deal’s biggest winners.

Ramsay was known for his generous spirit. At the time of his death in May 2014, he was Australia’s ninth richest man via his $3.3bn stake in his eponymous hospital group that he grew into a global health giant.

Single, with no children, he left about $3bn to a foundation that bears his name, supporting a range of community projects – the largest philanthropic donation in Australian history. But the biggest individual beneficiary in his will was Mr Siddle, who joined Ramsay in 1968 and has been on the company’s board since 1975.

Ramsay left Mr Siddle 3.75 million shares under an option – with a value consideration of just $1 – which was exercised in October 2014, following the grant of probate of Ramsay’s will, according to ASX filings at the time.

At the time, the shares had a market value of around $182m. If KKR’s takeover proceeds that holding will be worth $330m.

The Wall Street private equity firm lobbed its bid this week at $88 a share – or $20.14bn.

Ramsay’s bequest makes up the bulk of Mr Siddle’s holding in the company, which totals 3.9 million shares, according to Ramsay’s latest annual report.

Ramsay established Ramsay Health Care in 1964 when he purchased a guesthouse on Sydney’s north shore and converted it into a psychiatric hospital.

He referred to Siddle, who was “integrally involved in Ramsay Health Care’s successful expansion through construction, mergers and acquisitions”, as his “right hand”, and the chairman is widely respected among staff and management.

Ramsay Health Care’s Michael Siddle in 2014, the year he was made chairman. Picture: David Moir / The Australian

Ramsay now owns 72 private hospitals in Australia and also has extensive operations in the UK and Europe. Its global network extends across 10 countries, with over eight million admissions/­patient visits to its facilities in more than 32 locations.

But the company’s shares have largely stagnated for the past five years, and in the past 12 months government-enforced elective surgery bans have cost the group at least $155m.

It also failed to gain support from the majority of Spire Healthcare shareholders in its $3.9bn bid to take over the British health group to become Britain’s top private hospital operator.

It raised $1.4bn in April 2020 to accelerate its out-of-hospital growth strategy and become a fully integrated healthcare company. Following KKR launching its indicative bid this week, its shares surged more than 30 per cent to a record $83.92.

The offer has already gained the support of the Paul Ramsay Foundation, which owns about 19 per cent of the company and KKR says due diligence is “well advanced”.

The foundation – which ­donated $169m to various projects last year – has expressed interest in retaining a holding in the ­company. “PRF notes that the terms of the indicative offer would allow PRF the opportunity to retain an interest in the business built by its founder, Paul Ramsay, by taking some scrip in the bid entity,” the foundation said.

Paul Ramsay, founder of Ramsay Health Care.

“Assessment of any conditional indicative offer is up to the board of RHC. However, should an offer materialise along the lines canvassed in RHC’s ASX announcement, PRF would support such an offer being put to shareholders.”

Other shareholders include BlackRock, which has a 7 per cent stake, and ASX-listed investment funds Argo and Australian Foundation Investment Company, which own more than 0.8 per cent.

The KKR deal has also been endorsed by the NSW Nurses and Midwives Association, with the union taking comfort from the $68bn nurses industry super fund HESTA joining a consortium KKR has assembled to fund the transaction.

HESTA has also had deep ties with Ramsay, with the group’s former Australian hospitals chief executive Danny Sims previously serving as a director as an employer representative.

“We believe this investment has the potential to have a positive impact on patient health and wellbeing in Australia and abroad while helping to generate strong returns for our members,” HESTA CEO Debby Blakey said.

“Ramsay’s care-centred culture is at the heart of its business, driven by dedicated healthcare professionals who deliver outstanding patient outcomes every day. They are vital to the ongoing success of Ramsay and are at the forefront of the consortium’s shared vision for expansion and innovation that can achieve new standards of care and enhanced employee experience.”

Originally published as Ramsay Health Care chairman Michael Siddle set to be biggest winner in KKR’s tilt thanks to founder’s gift