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KKR ditches $15B all-cash offer to buy Australia's Ramsay

Erin Brodwin
Aug 26, 2022
Illustration of a red cross being torn in half.
Illustration: Gabriella Turrisi/Axios

KKR walked away from its $14.5 billion all-cash offer to buy Australian hospital operator Ramsay Health Care (ASX: Rhc) after the group rejected an alternative cash-and-stock bid.

Why it matters: The deal could have been KKR's biggest ever acquisition in Asia-Pacific — not to mention a whopping price tag for health care services M&A across the board.

State of play: Following the news, and the company's separate report of a near 40% drop in annual net profit, Ramsay's stock slumped to a four-month low to A$70.69, its lowest since KKR made its first offer in April.

☠️ (Dead) deal details: Under the cash-and-stock offer, Ramsay shareholders would have been entitled to the same A$88 per share as per the A$14.8b all-cash offer — with one catch: Those terms would only apply to the first 5,000 shares.

  • Larger stakeholders would receive A$78.20/share in Ramsay and 0.22/share in Paris-based subsidiary Ramsay Generale de Santé SA.

What they're saying: Ramsay turned away from what it called KKR's "meaningfully inferior" alternative, saying its board would not engage with KKR further over the reduced proposal.

Yes, but: The hospital network said it was still open to an improved offer.

How it works: Ramsay operates health care facilities in 530+ locations across 10 countries.

  • That includes roughly 70 Australian private hospitals and outpatient surgery units.

Meanwhile, the health system operator is still exploring the sale of Malaysian JV Ramsay Sime Darby Health Care.

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