Estia Health share price jumps 21% on takeover approach

This aged care operator is in the crosshairs of a private equity giant.

| More on:
Two mature-age people, a man and a woman, jump in unison with their arms and legs outstretched on a sunny beach.

Image source: Getty Images

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

Key points

  • Estia Health shares are rocketing higher on Friday morning
  • This follows news that Bain Capital has made a takeover approach
  • It has tabled a non-binding $3.00 cash per share offer

The Estia Health Ltd (ASX: EHE) share price is having a sensational finish to the week.

In early trade, the aged care operator's shares were up as much as 21% to $2.84.

The Estia Health share price has eased back a touch since then but remains up 16% at the time of writing.

Why is the Estia Health share price rocketing higher?

Investors have been scrambling to buy the company's shares on Friday after it revealed the receipt of a takeover approach.

According to the release, the company has received a confidential, non-binding and indicative proposal from Bain Capital to acquire it by way of a scheme of arrangement.

Bain Capital has tabled a $3.00 cash per share offer, which will be adjusted for any dividends paid or payable. This represents a 28% premium to the Estia Health share price at yesterday's close.

Management advised that the indicative proposal is subject to a number of conditions. This includes the satisfactory completion of due diligence on an exclusive basis, the execution of a binding scheme implementation agreement, and an unanimous recommendation from the Estia Health board.

It will also be subject to approval from Bain Capital's Investment Committee and the Foreign Investment Review Board.

Bain Capital appears to be serious about the offer. While it has not yet been confirmed, there was a significant purchase of shares at the market close on Thursday.

For example, yesterday's trading volume saw over 12 million shares change hands. Whereas the day before just 170,000 shares were traded. Given the timing, it seems quite likely that this was Bain.

What now?

Estia Health has advised that together with its financial and legal advisers, it is considering the indicative proposal to assess whether it is in the best interests of shareholders.

It has also warned that there is no certainty that the indicative proposal will result in a binding offer or that any transaction will eventuate. As a result, shareholders do not need to take any action in relation to the proposal.

The company intends to keep the market informed in accordance with its continuous disclosure obligations.

The Estia Health share price is now up 20% over the last 12 months.

Should you invest $1,000 in Austal Limited right now?

Before you buy Austal Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Austal Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Mergers & Acquisitions

Miner looking at a tablet.
Mergers & Acquisitions

Gold Road shares surge 10% on $3.7 billion takeover offer

The ASX 200 gold stock is soaring after finding itself in the acquisition crosshairs.

Read more »

A corporate team or board stands together and looks out the window.
Technology Shares

WiseTech shares charge higher on $3.5b acquisition news

This tech stock is ending the week positively. But why?

Read more »

Two CEOs shaking hands on a deal.
Financial Shares

This ASX 300 stock is jumping on surprise merger news

This stock could be having a very big makeover.

Read more »

A graphic showing three hands holding red paddles with the word BID, indicating a bidding war for an ASX share company
Mergers & Acquisitions

Guess which ASX All Ords stock just received a new takeover offer

Let's see which stock is in the crosshairs of a rival.

Read more »

Man with rocket wings which have flames coming out of them.
Technology Shares

Guess which ASX All Ords stock is rocketing 34% on takeover deal

This stock looks set to leave the ASX boards in the near future after accepting a takeover deal.

Read more »

Two miners standing together.
Gold

Northern Star Resources set to buyout rival De Grey mining

As gold soars, ASX miners continue to mine the acquisition pipeline.

Read more »

Man with rocket wings which have flames coming out of them.
Mergers & Acquisitions

Guess which ASX 300 stock is rocketing 15% on big takeover offer

Not every share is being dragged lower on Monday.

Read more »

Happy woman holding white house model in hand and pointing to it with a pen.
Mergers & Acquisitions

Up 70% this year, Domain share price wobbles on CoStar takeover update

Domain released an update on CoStar’s $2.8 billion takeover bid.

Read more »