STOCKHOLM (Reuters) - Swedish healthcare company Capio (CAPIO.ST) on Friday rejected a bid worth 661 million euros ($771 million) from the French subsidiary of Australian hospital group Ramsay Health Care (RHC.AX), saying it undervalued its business.
The takeover offer, which sent Capio’s shares up 24 percent, could help Ramsay Générale de Santé (GDSF.PA) to become a leading private pan-European healthcare services operator.
Ramsay Generale, in which the Australian parent owns 50.9 percent, offered Capio shareholders 48.5 Swedish crowns per share, a premium of 16 percent to Capio’s last close.
Capio’s shares were up 24.4 percent at 52 Swedish crowns by 1051 GMT, signaling expectations for a higher bid.
“Board of directors of Capio unanimously rejects the unsolicited offer ... as it believes it does not adequately reflect the fundamental value of Capio,” the company said in a statement on Friday.
Capio said a possible “repositioning” its business toward the Nordic markets could instead potentially enhance its strategic focus and drive shareholder value.
The company, which has sales of about 1.6 billion euros from its hospitals and clinics across Sweden, Norway, France, Germany and Britain, had said last month it was in talks on a possible divestment of its non-Nordic operations.
Capio also said it saw numerous opportunities to consolidate the fragmented Nordic market.
Ramsay said that the acquisition would bolster its core earnings per share in two to three years and that Ramsay Générale expected pre-tax synergies of about 20 million euros, the majority of which will be over the same period.
The company also said it would fund the deal through a combination of debt and equity and already had an underwritten incremental debt facility with leading financial institutions.
It is also planning a rights issue of about 510 million euros if the offer goes ahead and plans to publish the offer document by early September.
Ramsay Generale de Sante’s shares were up 5.4 percent at 19.6 euros by 1051 GMT.
Its parent Ramsay operates 235 hospitals, day surgery centers, treatment facilities, rehabilitation and psychiatric units and a nursing college across Australia, France, the United Kingdom, Italy, Indonesia and Malaysia, according to its website.
Capio said it had retained PJT Partners as financial adviser to its board of directors.
Reporting by Esha Vaish in Stockholm and Ambar Warrick in Bengaluru; editing by Niklas Pollard and Jane Merriman