The Virtus Health Ltd (ASX: VRT) share price is soaring. It's up 30% after the fertility, diagnostic and day hospital business announced it had received a takeover bid.
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Virtus Health share price jumps on takeover approach
The fertility company said it has received an unsolicited, non-binding indication of interest from the private equity group BGH Capital to buy the business.
BGH Capital's proposed cash value is $7.10 per Virtus Health share, which would be reduced by any dividends declared or paid after today's date.
The private equity outfit has been busy accumulating shares in the ASX share. BGH Capital told Virtus that it has already acquired 8.5 million shares, representing a 9.99% interest in Virtus at $7.10 per share.
BGH Capital has also entered into a 'total return swap' with UBS regarding 7.5 million shares, that hasn't yet settled, representing a 10% interest in Virtus. This total return swap provides BGH with an option to "elect physical settlement of that 10.00%" subject to takeover laws and regulations.
What price would other shareholders get?
BGH has stated the Virtus share price offer will be $7.10 per share for all Virtus shareholders entirely in cash and that it also proposes a cash and scrip/share alternative to major fertility specialist shareholders and other certain affiliated shareholders to enable them to continue their investment in Virtus.
The offer is only conditional
Implementing the takeover is subject to a number of conditions including:
- Satisfactory completion of due diligence
- Virtus not selling or agreeing to sell any material assets
- No material changes to Virtus or financial markets
- Finalising debt for a binding proposal
- Approval by BGH's investment committee
- Unanimous recommendation by the Virtus board of directors to vote in favour of the offer (in the absence of a superior proposal and subject to an independent expert concluding that the proposal is in the best interest of Virtus shareholders.)
Virtus board response
The Virtus board said it had commenced an assessment of BGH's proposal.
However, the board noted that shareholders don't need to take any action regarding the proposal at this stage. There is no certainty that the proposal will result in a transaction.
It has appointed Jefferies as financial advisor and Gilbert and Tobin as the legal advisor.
Virtus Health share price snapshot
With the Virtus Health share price reaching $6.76, it's up 24% over the last year.
However, the offer is below where Virtus shares were trading in August 2021.
