Little Company makes bold $278m bid for Japara

AFTER feeling the full weight of the pandemic in 2020, Japara Healthcare has received a proposal from Little Company to acquire 100% of the shares in the company.

Little Company of Mary Heal Care Ltd has proposed an unsolicited, indicative, conditional and non-binding offer for Japara by way of a scheme of arrangement.

Under the proposal the indicative cash price offered to shareholders of $1.04 per share, assuming no further dividends, distributions or reductions in capital from the date of the proposal.

The proposal values Japara at $278 million.

Additionally, the offer assumes no material changes to Japara from the position disclosed to the ASX.

The conditions of the offer include the completion of due diligence, negotiation and execution of a binding scheme implementation agreement and unanimous recommendation from the board.

In February Japara reported a statutory net loss of $9.5 million, down $14.9 million from the previous corresponding period’s net profit of $5.4 million.

This loss came after Victoria’s second wave outbreak of COVID-19 left occupancy lowered, in addition to $8 million dollars in expenses manage outbreaks and provide appropriate PPE in its facilities.

Japara’s board is currently considering the proposal in light of changing tides in trading conditions as the worst of COVID-19 seems to have past, as well as the imminent government response to the Royal Commission into Aged Care.

Aged care is expected to rebound due to strong fundamentals, with an aging population driving its inevitable longevity.

Japara’s board has retained Macquarie Capital as financial adviser and Herbert Smith Freehills as legal adviser and has advised its shareholders not to take any action.