Aged care group Regis says takeover offers ‘opportunistic’

ASX-listed aged care operator Regis Healthcare has told its shareholders it is open to proposals that deliver “compelling value” after knocking back two recent bids it said were opportunistic.

The first from investment giant Washington H Soul Pattinson (WHSP) and Skip Capital, the investment vehicle of Atlassian co-founder Scott Farquhar, was for a cash price of $1.65 a share. The second, which also involved WHSP and an entity controlled by Regis co-founder Bryan Dorman, was for $1.85 per share.

Regis Aged Care has battled coronavirus outbreaks recently and saw two separate takeover offers prior to the end of year.
Regis Aged Care has battled coronavirus outbreaks recently and saw two separate takeover offers prior to the end of year. Credit:Nine News / Twitter

Shares in the $555 million business were sitting at $1.86 on Friday when Regis chairman Graham Hodges released a letter to shareholders saying the company believed the proposals were “opportunistic” and ignored the positive policy reform that could affect the business in 2021.

“The [aged care] royal commission is due to deliver its final report on February 26, 2021, with substantial policy reform and increased funding expected to be recommended to the commonwealth government, including transitional funding,” Mr Hodges said in the letter.


Mr Hodges said the takeover pitches were opportunistic because they were made in advance of the royal commission findings and possible “policy reform and funding initiatives likely to follow”.

“The board committee is always open to considering proposals which offer compelling value for all Regis shareholders, however, the proposals received to date were inadequate.”

Like other ASX-listed operators Regis has had a tough year including coronavirus outbreaks at its facilities. It declined to provide earnings guidance at its annual general meeting last month.

It joined fellow ASX-listed operators Japara Healthcare and Estia Health in flagging increased costs associated with operating in the tough COVID-19 environment. All three businesses have called on investors to be patient, however, in anticipation of the final report into aged care.

The commission’s report is scheduled for February 2021, with the government to respond by May.

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