On the eve of its result this morning RHC finally updated the market on how things were travelling with regard to KKR’s bid for the business, seems a strange time to press the button but it won’t be the last time that a board has made a strange decision – hopefully, they will release a cracker of a result exerting pressure on KKR to pay a nice clean $88. The main takeout’s are:
- Due to Sante not allowing KKR to perform due diligence in France on the Ramsay holding in the group apparently KKR has tried to move the goalposts – no surprise, a suitor wants to know what it’s buying!
- KKR is now said to be proposing a slightly different package which will result in holders of less than 5000 sharers still getting $88 while institutions will get Sante stock + cash, the offer is currently valued at ~$85 – RHC is saying no to this scenario.
- Importantly though, KKR have said they have not identified any matters that would cause them to terminate the $88 share bid.
Overall we regard this as good news considering the stock closed below $73 yesterday, in essence, things are not ideal for KKR as they struggle to access the RHC investment in France but the American-based global investment firm hasn’t walked away and it feels like a deal will occur with price/structure the variable.
MM is long and bullish RHC
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