Gresham gets a bait on Healius, rivals scramble for...

Gresham gets a bait on Healius, rivals scramble for mandates

Anthony Macdonald, Sarah Thompson and Kanika Sood
Mar 21, 2023 – 9.35pm

Healius is taking the duck approach to takeover defence, presenting calm on the surface but scrambling like crazy underneath.

Having received a bomb from cheeky rival Australian Clinical Labs to start the week, sources said Healius’ board met on Monday night to determine how to defend against the offer and keep other potential vultures at bay.

Healius’ first problem is to deal with the ambitious Australian Clinical Labs. Bloomberg

It is understood Healius has Gresham Partners on board for advice, and has also gone to some bigger bulge-bracket investment banks for pitches in a bid to help shore up the defences. It’s yet to say anything significant to shareholders.

From the outside, it looks like Healius was terribly under-prepared for the approach. Despite being a sitting duck for months – soft share price, operational underperformance, antsy shareholders, wave of private capital looking for healthcare-related assets, new CEO and an early-stage turnaround plan – it is acting like it was completely surprised and is now scrambling.

Healius’ first problem is to deal with the ambitious Australian Clinical Labs, which lobbed a nil-premium proposal to combine the groups and have its management team run the lot.

The proposal is bold and opportunistic, with Australian Clinical Labs happy to give away 68 per cent of the combined company and potential synergies/upside to Healius investors.

Healius shouldn’t have too much trouble batting the proposal away, but it’s sure to have investors thinking about whether it’s time to search for some other sort of change. Goldman Sachs and G+T-advised Australian Clinical Labs is the sort of company that probably wouldn’t mind getting in a room and trying to bash out a deal.

In the background, there are plenty of private capital types that have run the ruler on Healius in the past five years. It fits neatly between private equity and core-plus infrastructure, and has attracted interest from both sets of buyers in the not-too-distant past.

Bankers have gone running back to their PE and infrastructure manager mates, promising them that Healius is now in play. Australian Clinical Labs has potential synergies in its favour, although it hardly has the funding power or strength to get involved should Healius turn into a cash-bid war.

Morrison & Co, EQT, Partners Group and even superannuation funds including NZ Super have all been in and around local pathology and radiology businesses in recent years.

Interestingly, Monday’s board meeting also saw Healius’ directors ratify the appointment of former McKinsey partner Charlie Taylor as a non-executive director. Taylor joins a boardroom where the bulk of the directors have been in their seats for 2½ years or less.

Healius’ spokeswoman did not return calls on Tuesday.