KKR-led group walks away from $15 bln all-cash offer for Australia’s Ramsay

Ramsay Health Care Ltd (RHC.AX) said on Friday a group led by private equity giant KKR & Co (KKR.N) pulled the plug on a near $15 billion all-cash buyout offer for the Australian hospital operator, but a cash and stock bid remains on the table.

On Thursday, Ramsay received an alternate proposal from the KKR-led consortium in that its shareholders would be entitled to receive the full A$88 per share offer for the first 5,000 shares.

For investors with larger stakes, the offer would be split into A$78.20 per Ramsay share and 0.22 Ramsay Sante shares, its French health care subsidiary. The new offer is valued at $14.5 billion.

Ramsay rejected that offer, calling it “meaningfully inferior”. The company’s shares fell 4.5% when trade resumed on Friday.

Ramsay said KKR had informed it the all cash offer had been withdrawn.

In a statement, Ramsay said it would not negotiate with KKR and its advisors on the alternative proposal but was willing to engage with the buyout firm.

“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,” it said.

KKR declined to comment.

The decision to walk away from the cash offer was made after KKR and its advisors could not carry out due diligence on Ramsay Sante, according to two sources with direct knowledge of the matter who could not be named as the information was not yet made public.

The alternative proposal was made to Ramsay’s board in mid-June, one of the sources added.

Ramsay did not immediately respond to a request for comment on when the proposal was received.

($1 = 1.4362 Australian dollars)