Even if the ACCC approves a merger between Australian Clinical Labs and Healius when it delivers its findings on Thursday, some say share price movements make the deal look less attractive.
Healius shares on Tuesday closed at $2.85, with its market value at $1.62bn, whereas ACL was at $3.19 with its market value at $646m.
When ACL made its offer in March, its shares were trading at about $3.70, while the share price of Healius has remained flat.
When the deal was announced, the market value of the merged group would have been at least $2.4bn, but now it would only be about $2.27bn.
The idea was that ACL would own 32 per cent and there would be $95m of cost synergies.
This implies an offer well below its trading price based on current share prices, and suggests ACL will need to lift its offer materially, despite gaining the same number of shares.
Healius rejected ACL’s merger of equals scrip proposal earlier this year, where ACL offered 0.74 of its shares for every share in Healius, enabling the latter to own 68 per cent of the combined company.
Shareholders Perpetual and Tanarra, the collective owners of 21 per cent of Healius, said they would not support the offer.
ACL has promoted its buyout proposal as delivering $95m in cost savings between the two groups.
Private equity firm Crescent Capital listed ACL in 2021, selling shares at $4 each, with its market value at $809.3m. It holds 30.1 per cent.
ACL is the country’s third-largest pathology network, a roll-up of various businesses purchased by Crescent, including operations from Healthscope and St John of God. The view around the market is that the motivation for the deal is to create an exit opportunity for Crescent from ACL.
As earlier reported by DataRoom, the state of Victoria’s pathology industry will be the key focus for the ACCC. Analysts say that an ACL-Healius merger would create Australia’s largest pathology provider.
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