Ann: Update on non-binding indicative proposal, page-15

This thing isn't worth $2...

There are too many beds/places in Australia.. there was a huge building boom in the industry when everyone thought the RADs were free capital, so Sudholz and others were going around saying ROIC on development is infinite....So occupancy unlikely to go up substantially - see slide 19 of JHC's 1H 2021 result presentation for the trend.

Government has twigged that care at home is the best outcome for itself (see increase to Home Care Package funding) and families don't want to fork out the egregious fees in a nursing home.

These facilities residents' average age is 85, average length of stay is just over 2 years... people typically only send a parent to one of these facilities when they become incontinent, or they're immobile. Definitely not a river of gold like these stocks were all billed at their IPOs... it's a commodity real estate play with complicated staffing and regulatory operations.

However... the house price boom should send these companies up another leg in valuation over the next 5 years. RADs, and the land value of the facilities themselves, are all linked to residential real estate prices....

Would think ~A$1.40 ceiling if there's a bidding war... but Calvary is not-for-profit... and the synergies aren't huge, only head office costs and minor savings on procurement, so unlikely to see a huge acquisition premium.