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.
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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.
