Australian health group Healius rejects $1.43b takeover proposal by Jangho Hong Kong

The Jangho Group holds 15.93% of the issued share capital of Healius.

Australian health group Healius, previously known as Primary Health Care, rejected the unsolicited and highly conditional proposal from Chinese construction firm Jangho Hong Kong worth almost $1.43b (A$2b) on the back of it undervaluing Australia’s second largest medical centre operators, an announcement revealed.

The firm said its board “unanimously believes that the proposal is opportunistic and fundamentally undervalues Healius” in a statement. Healius operates an estimated 2400 pathology centres and 70 medical centres, and is partnered with around 1,500 general practitioners, dentists and other healthcare specialists across Australia.

The bid from Jangho to acquire all the shares in Healius, which it already owns an aggregate 15.93% of, landed on 3 January. The proposal was stated to be a preliminary, non-binding indication of interest, with the indicative cash price offered at $2.32 (A$3.25) per share.

Healius had cited in a statement on 3 January that there was no certainty the proposal would result in a transaction. The firm also noted possible regulatory hurdles as of one the likely impediments to the deal.

Jangho has been diversifying out of building materials and into to healthcare, following several investments in Australia such as the purchase of a 20% stake in the Australian Securities Exchange (ASX)-listed Vision Eye Institute from Healius for $24.24m (A$34m) in August 2015. The firm later bought the entire eyecare group for $142.56m in December 2015.