One of the standout themes of the ASX post-COVID has been major private equity investment firms bidding for companies with quality assets usually their main focus. The latest foray has been this month’s $20bn bid for Ramsay Healthcare (RHC) by US investment behemoth KKR at a 37% premium to the previous days trade strongly implying this is one deal that they want to get done – in this case, RHC owns 48 of their 72 hospitals in Australia which is a clear asset base whose value should be rerated as we emerge from COVID.
Money is no longer free per se but it does remain extraordinarily cheap on a historical basis which lends itself to a takeover environment whether from private equity, large super or more traditional business looking to increase growth through strategic acquisition. Today we have highlighted our top 3 picks for companies that could come under corporate attack while keeping a strong focus on the quality of the underlying business i.e. buying a dog hoping for a takeover is clearly fraught with danger, MM prefers to buy businesses at a decent valuation which we like who have the added spice of being a potential takeover target.
MM believes KKR’s bid for RHC is likely to be successful
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