South Korean group Lunit makes $300m takeover move for Volpara Health Technologies

Shares surged to a two-year high after AI-focused Korean group Lunit struck a deal to acquire in Volpara as part of plans to turbocharge its global expansion.

ASX-listed Volpara Health Technologies rocketed by more than 40 per cent after accepting a $300m takeover bid for the breast cancer detection software group from artificial intelligence-focused South Korean group Lunit.

The $1.15 per share offer follows an assessment of different strategic options by Volpara, which it said the agreed deal provided compelling value for shareholders in the absence of a superior proposal.

The takeover deal gives the New Zealand-based group an implied equity value of $295.7m and an implied enterprise value of $285.5m. The offer is a 47.4 per cent premium to Volpara’s last closing share price of 78c per share on Wednesday and a 55.4 per cent premium to its one month volume weighted average price.

Shares as a result soared 41.3 per cent to $1.095 on Thursday — the highest close since November 2021 — after hitting an intraday high of $1.11.

Cornerstone shareholders Harbour Asset Management, non-executive director Roger Allen, and Volpara founder Ralph Highnam — who currently hold or control in aggregate 25.92 per cent of Volpara’s issued capital on the date of the scheme — have said they will back the scheme when it is sent to a vote.

Volpara is behind software that enables early detection of breast cancer.

The transaction is expected to accelerate Volpara’s ability to serve its purpose of saving families from cancer. With the support of Lunit’s in-house radiologists and complementary technologies, Volpara’s repository of more than 100 million images will be strategically augmented by additional AI expertise and solutions.

“The transaction positions Volpara to explore new opportunities in global markets and provides a broader portfolio of products to sell in Volpara’s largest market, the US,” Volpara said in a statement.

Volpara chairman Paul Reid said the scheme provided compelling, risk-adjusted value and certainty for shareholders and unanimously support the proposed transaction.

“In considering options for Volpara, including continuing to implement the company’s growth strategy as a publicly listed company, the board adopted a long-term view of the risks and rewards of various alternatives,” he said.

“The proposed transaction would accelerate the return of capital to shareholders and mitigate the risks that would otherwise be involved in delivering the opportunities from executing Volpara’s strategic plan over time.”

Volpara shareholders will have the opportunity to vote on the proposed scheme at a meeting in the early part of the 2024 second quarter. If all the conditions are satisfied, the proposed scheme is expected to be implemented by the end of that period.