KKR lobs $20 billion-plus bid for Ramsay, page-9

The minute I saw the announcement a few weeks back that RHC's Aisan JV with Sime Derby was approached with a takeover offer, I suspected strongly that the entire company was in play.

This move on the company by Private Equity has come quicker than I had expected.

As for valuation, that $20bn figure will have to be the Equity Value alone, and not including any debt (i.e., it can't be an Enterprise Value).

Because if $20bn was an Enterprise Value figure, then the Equity Value would be $17bn (based on the $3bn Net Debt).

And $17bn would be a mere 13% premium on the current $15bn Market value of the company, which is waay too skinny a takeover premium.

Even $20bn - a 33% premium on the current valuation - barely passes the minimum change of control premium.

And especially for companies with truly rare, impossible-to-replace assets, such as hospitals.

So I think there is more than even chance of an interloper emerging and a bidding war erupting.

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