Cannot see how this deal can get through in its current form.
The biggest statement of issue from ACCC which will make it very hard for ACL to overcome is the Coordinated Conduct.
ACL, Healius and Sonic are already on and board represented on the lobbying group Pathology Australia and reducing 3 to 2 big players increases such risk.
Further, based on their respective last close price, the current bid represents a discount of 18.7% to Healius shareholders.
However, one must assume ACL went into this bid knowing fully well that there would be no way ACCC will allow it to go through uncontested. That is they would have a plan B to divest certain states and recut the synergies expected for the combined new entity net of divestments.
ACL's balance sheet is also not well endowed with lots of cash, that is they won't be able to afford significantly upping the offer without getting into alot of debt which in the current environment is problematic and not easy to do.
Overall, confidence level on the ACL bid is low.
Healius delivering a terrible FY23 full year results in late August will help but suspect this is unlikely given what is at stake here.
ACL Price at posting:
$3.12 Sentiment: None Disclosure: Not Held
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