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Healius shares surge 12pc on heavy trading amid fresh takeover speculation
Healius shares surge on heavy trading amid fresh takeover talk
Unusual trading volumes in the pathology group’s stock have reignited market chatter about potential private equity interest.
Large volumes of stock trading in Healius raised eyebrows in the equities community on Tuesday, as the moves sent its share price almost 12 per cent higher at the close.
Sources said an unusually large amount of the stock — about 10 per cent of its shares — had traded in the $606m business.
The rally over recent days has seen it more than recover the losses from when it reported its result last week and shares crashed 15 per cent.
Several months ago, a private equity firm was known to have been keeping tabs on Healius and considering a bid. But nothing came of it at the time.
Perhaps the share price slump of 15 per cent following its result has revived interest, although some market experts are sceptical it will be subject to a buyout, given its limited cash flow and tough conditions and higher costs in the healthcare industry.
Healius counts Tanarra Capital — run by activist investor John Wylie — as a substantial shareholder, with more than 6 per cent of the stock, and previously courted suitors for businesses in which he invests, drawing on his skills as a former investment banker.
Tuesday’s strong gains came on the same day former suitor Australian Clinical Labs reported a better-than-expected result, sending its share price up to close almost 7 per cent higher.
ACL said in its results it remained interested in strategic pathology acquisitions.
While ACL was earlier thought to be selling out of Healius, this is no longer believed to be the case, though other parties were selling.
Healius has been a perennial takeover target for private equity.
Australian Clinical Labs had aspirations of buying Healius in the past, but came up against fierce opposition from the target.
Healius reported its full-year results this month, with a $151m loss compared to a $646m loss in the previous corresponding year.
ACL’s former private equity owner, Crescent Capital, listed the business in 2021 at $4 per share.
On Tuesday, it reported a 35.5 per cent increase in its statutory net profit to $32.4m for the year ending June 30.
Shares closed up 16.9c to $2.67.
Healius last year sold its diagnostic imaging business to Affinity Equity Partners for $965m, leaving it as a pure play pathology operator.
Mergers have also been attempted in the past when the pathology assets of ACL and Healius were under different ownership, but objections from the ACCC have always stood in the way of any transaction proceeding.
But, many experts believe industry consolidation remains inevitable to sustain strong earnings, and a combination of ACL and Healius makes the most sense.
ACL is the country’s third largest pathology network with a 14 per cent market share and is a roll-up of businesses, including operations from Healthscope and St John of God.
Investors have been placing pressure on ACL and Healius to combine, with cost savings estimated at $95m.
Healius is the second largest player behind Sonic Healthcare, with 25 per cent market share.
Among the groups that have weighed a deal to buy Healius in the past include Morgan Stanley Infrastructure Partners, EQT and Partners Group.
Healius shares surge on heavy trading amid fresh takeover talk
Unusual trading volumes in the pathology group’s stock have reignited market chatter about potential private equity interest.
Large volumes of stock trading in Healius raised eyebrows in the equities community on Tuesday, as the moves sent its share price almost 12 per cent higher at the close.
Sources said an unusually large amount of the stock — about 10 per cent of its shares — had traded in the $606m business.
The rally over recent days has seen it more than recover the losses from when it reported its result last week and shares crashed 15 per cent.
Several months ago, a private equity firm was known to have been keeping tabs on Healius and considering a bid. But nothing came of it at the time.
Perhaps the share price slump of 15 per cent following its result has revived interest, although some market experts are sceptical it will be subject to a buyout, given its limited cash flow and tough conditions and higher costs in the healthcare industry.
Healius counts Tanarra Capital — run by activist investor John Wylie — as a substantial shareholder, with more than 6 per cent of the stock, and previously courted suitors for businesses in which he invests, drawing on his skills as a former investment banker.
Tuesday’s strong gains came on the same day former suitor Australian Clinical Labs reported a better-than-expected result, sending its share price up to close almost 7 per cent higher.
ACL said in its results it remained interested in strategic pathology acquisitions.
While ACL was earlier thought to be selling out of Healius, this is no longer believed to be the case, though other parties were selling.
Healius has been a perennial takeover target for private equity.
Australian Clinical Labs had aspirations of buying Healius in the past, but came up against fierce opposition from the target.
Healius reported its full-year results this month, with a $151m loss compared to a $646m loss in the previous corresponding year.
ACL’s former private equity owner, Crescent Capital, listed the business in 2021 at $4 per share.
On Tuesday, it reported a 35.5 per cent increase in its statutory net profit to $32.4m for the year ending June 30.
Shares closed up 16.9c to $2.67.
Healius last year sold its diagnostic imaging business to Affinity Equity Partners for $965m, leaving it as a pure play pathology operator.
Mergers have also been attempted in the past when the pathology assets of ACL and Healius were under different ownership, but objections from the ACCC have always stood in the way of any transaction proceeding.
But, many experts believe industry consolidation remains inevitable to sustain strong earnings, and a combination of ACL and Healius makes the most sense.
ACL is the country’s third largest pathology network with a 14 per cent market share and is a roll-up of businesses, including operations from Healthscope and St John of God.
Investors have been placing pressure on ACL and Healius to combine, with cost savings estimated at $95m.
Healius is the second largest player behind Sonic Healthcare, with 25 per cent market share.
Among the groups that have weighed a deal to buy Healius in the past include Morgan Stanley Infrastructure Partners, EQT and Partners Group.