Healthscope share price storms higher on takeover update

The Healthscope Ltd (ASX:HSO) share price has stormed higher on Friday after providing updates on its takeover proposals…

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

In morning trade the Healthscope Ltd (ASX: HSO) share price has been the best performer on the ASX 200.

At the time of writing the private hospital operator's shares are up 5.5% to $2.19.

Why is the Healthscope share price storming higher?

This morning Healthscope provided positive updates on both the Brookfield and BGH-AustralianSuper consortium proposals.

In respect to the BGH-AustralianSuper proposal, management advised that it has received correspondence indicating that it is able to commence due diligence immediately in relation to its revised preliminary, non-binding proposal to all Healthscope shares for $2.36 cash per share.

The Healthscope board will now consider the correspondence and keep the market informed of any material developments.

In addition to this, Brookfield Capital Partners has confirmed that it has received the majority of all due diligence materials and that based on its enquires and financing discussions to date, "has no reason to believe it would not be willing and able to proceed with the proposal for the acquisition of all shares in Healthscope by way of a scheme of arrangement representing total value of $2.585 per share."

Further, it advised that if this fails it believes it would be willing and able to conduct an off-market takeover offer representing total value of $2.455 per share including an interim dividend of up to 3.5 cents per share.

Healthscope has reminded shareholders that there is no certainty that the Brookfield proposal will result in a scheme of arrangement or takeover bid being formally proposed.

What now?

While this is good news for Healthscope shareholders and could potentially be the start of a bidding war, I wouldn't buy shares purely on that basis.

After all, if both proposals were to be withdrawn, its share price would almost certainly crash lower.

Because of this, I would sooner buy healthcare peers CSL Limited (ASX: CSL) and ResMed Inc (ASX: RMD) instead.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ResMed Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Gainers

a man sits back from his laptop computer with both hands behind his head feeling happy to see the Brambles share price moving significantly higher today
Industrials Shares

Up 39% in a year, is there more growth to come for this ASX 200 share?

IML Equity Analyst Josh Freiman shares his views on a major ASX 200 industrial stock.

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Catapult, Flight Centre, Nufarm, and Xero shares are storming higher today

These shares are having a strong session on Thursday. But why? Let's find out.

Read more »

drug capsule opening up to reveal dollar signs signifying rising asx share price
Healthcare Shares

3 ASX healthcare shares going gangbusters on Thursday

Investors are sending these ASX healthcare stocks soaring today. But why?

Read more »

A young man talks tech on his phone while looking at a laptop. A financial graph is superimposed across the image.
Share Gainers

Here are the top 10 ASX 200 shares today

The ASX 200 made it three-for-three losses in a row this Wednesday.

Read more »

A young woman wearing overalls and a yellow t-shirt kicks one leg in the air showing excitement over the latest ASX 200 shares to hit 52-week highs
Share Gainers

Why Brickworks, James Hardie, Megaport, and OFX shares are charging higher today

These shares are having a good time on hump day. But why?

Read more »

Fancy font saying top ten surrounded by gold leaf set against a dark background of glittering stars.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors endured another day of selling this Tuesday.

Read more »

Man pointing at a blue rising share price graph.
Technology Shares

Guess which ASX 300 tech stock is already up 64% in November!

The ASX 300 tech stock is surging higher this month. But why?

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Share Gainers

Why ANZ, Block, Neuren, and Pilbara Minerals shares are pushing higher today

These shares are having a solid session on Tuesday. But why? Let's find out.

Read more »