After copping a pretty ordinary financial report in the morning, Ramsay Health Care Limited (ASX: RHC) shareholders have more to worry about Friday afternoon.
The healthcare shares were put in a trading halt in the morning but were released at 1:32pm after the company updated the ASX on KKR & Co consortium's takeover proposal.
The letter received overnight indicated the consortium is withdrawing from the $88 per share offer first floated in April.
At the time of writing, Ramsay shares have fallen 4% to $70.02.
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How do you handle a problem like Ramsay Santé?
The cancellation of the takeover offer comes after the consortium ran into difficulties performing due diligence on Ramsay's European subsidiary Ramsay Generale De Sante SA (EPA: GDS).
Ramsay Health owns about 53% of the shares in the listed company commonly known as Ramsay Santé. Ramsay chief Craig McNally is chair of the European arm.
The trouble is Ramsay Santé did not want to open up its books to KKR & Co, because it owns its French rival Elsan.
The stalemate had gone on for the last four months, but now it seems the consortium has run out of patience.
"The Consortium has advised Ramsay that it has elected to no longer seek due diligence access from Ramsay Santé and has advised the board of Ramsay Santé accordingly," Ramsay stated to the ASX on Friday afternoon.
"Ramsay Santé due diligence was required to progress the indicative proposal and the Consortium has now informed Ramsay that it has withdrawn the indicative proposal."
Could there be a third offer?
Due to the difficulties with Ramsay Santé, the consortium had already put up an alternative offer where the first 5,000 shares for each shareholder would receive $88. Then for each stock above that the investor would receive $78.20 plus 0.22 Ramsay Santé shares.
Perhaps anticipating the consortium's rejection of the original $88 offer, on Thursday night the Ramsay board stated the alternative proposal was not acceptable.
"The Ramsay Board has considered the alternative proposal and is unanimously of the view that it is meaningfully inferior to the consortium's indicative proposal of $88.00 cash per share," the company stated.
"In forming this view, the Ramsay board had regard to both the lower implied value relative to the allcash proposal, as well as structural challenges, execution complexity and the low liquidity of Ramsay Santé shares."
So the original proposal has been killed by the buyer and the alternative offer was ruled out by Ramsay.
This might not be the end of the story though.
The healthcare provider announced on Friday afternoon that it would still keep the door open for a different, third, offer.
"Ramsay is prepared to engage with the consortium to determine whether it can put forward an improved binding proposal that is capable of recommendation by the Ramsay board."
