The Virtus Health Ltd (ASX: VRT) share price is soaring more than 7% higher on Monday after the release of a company announcement.
Shares in the reproductive health company and day surgery provider had been on ice since Friday pending an announcement on an acquisition offer from CapVest Partners LLP.
As a result of the share price increase today, Virtus also thrust past its 52-week trading high during the session.
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Why is the Virtus health share price charging higher?
The company advised it has signed a transaction implementation deed with an entity controlled by CapVest Partners.
Under the deed, CapVest will acquire 100% of Virtus shares by a scheme of arrangement. The offer values Virtus at $8.25 cash per share, less the value of any dividends or distributions declared or paid after today.
At the time of writing, Virtus shares are trading at $8.25 apiece. They had closed the day flat at $7.70 on Thursday last week prior to being frozen on Friday.
As part of the deed, CapVest will make a simultaneous off-market takeover offer "conditional on the Scheme failing and a 50.1% minimum acceptance condition, offering total value of $8.10 per share less the Permitted Distributions".
According to Virtus' announcement, the company's board unanimously recommends the offer, in the absence of a superior proposal and subject to expert review to gauge if it's in the best interest of shareholders.
The board said it may also elect to pay a fully franked special dividend to 44 cents per share in total dividends before the implementation date.
What now?
Virtus noted that the details laid out within the transaction deed are fully funded and binding.
The deal is subject to "limited conditions, and is not subject to any conditions within the control or discretion of CapVest", the company said.
With respect to the special dividend, there may be tax implications and the amount payable is related to the takeover offer, Virtus said.
"Eligible shareholders may receive the benefit from these franking credits, subject to their marginal tax rate," the company remarked.
"The amount payable by CapVest under the Scheme or Takeover Offer will be reduced respectively by the amount of any such special dividend."
In the last 12 months of trading, the Virtus Health share price has soared 37% and now is up 21% for the year to date, well ahead of the S&P/ASX 200 Index (ASX: XJO)'s return of around 4% in 2022.
