This article is from the Australian Property Journal archive
WARREN Ebert’s Sentinel Property Group has set its sights on vulnerable aged care provider Estia Health.
Estia (ASX: EHE) said it has secretly learned that the Sentinel Health Trust has teamed up with an Estia rival to formulate a proposal to acquire 60 of the 68 sites operated by Estia Health for $300 million plus the assumption of specific liabilities.
Whilst the real property for the eight remaining sites has an estimated value of $60 million.
The trust currently holds 13 million shares or 4.988% stake in Estia.
Sentinel’s $300 million bid is below Estia’s current market capitalisation of $820 million.
The offer is a significant discount to the lofty market cap a year ago of $1.50 billion when Estia was at its prime. However, after the company unveiled a poor annual result in August, its share price fell.
The poor performance forced its founder Peter Arvanitis to resign, followed by CFO Joe Genova and chief executive officer Paul Gregersen.
Estia said there have been no contact with Sentinel and no proposal, formal or informal, and no communications have been received.
The aged care provider revealed that Sentinel said in a note, “Sentinel is currently exploring strategic options to further enhance the value of this investment by entering into a binding heads of agreement with a leading aged care facility operator with a view to the operator acquiring the aged care operations of EHE.
“Sentinel is assessing various funding options to enable it to secure a controlling position in EHE and is well advanced in discussions with potential third party financiers.
“For these reasons whilst the proposed transaction is an exciting opportunity it is currently incomplete, conditional and therefore speculative. Sentinel will continue to progress its negotiations and critically assess its investment options in EHE (including any investment funding arrangements) and will update its investors of any material development million shares.” Sentinel said in its note.
Australian Property Journal
