The Japara Healthcare Ltd (ASX: JHC) share price is rising higher today after the aged care provider revealed a stronger takeover bid.
What has happened to the Japara share price?
A few weeks ago, Japara received a proposal from Little Company of Mary Health Care (Calvary).
On 5 June 2021, Japara received a revised non-binding indicative proposal from Calvary at a cash price of $1.20 per share.
That offer has been submitted on the basis that Japara will give access for confirmatory due diligence. It’s also conditional on getting a unanimous recommendation from the Japara board, as well as a commitment that they will vote in favour of the proposal. It also needs final Calvary board approval.
How has the company responded?
The Japara board has considered this revised offer and has received advice from its financial and legal advisors. The board has decided it’s appropriate to give Calvary due diligence access, subject to agreeing to appropriate conditions and confidentiality arrangements, so that Calvary can develop a binding proposal.
Japara said that shareholders do not need to take any action about this revised proposal and cautioned that there is no certainty the proposal will result in a transaction.
What to make of this
It’s good to see that the offer for Japara is now a lot higher – it has risen from $1.04 to $1.20, which is an increase of 15% in just over a month. Japara shareholders have been suffering for a long time due to the royal commission, COVID-19 impacts, limited funding increases, rising costs and so on.
On paper, Japara should have an attractive future because of the ageing demographics of Australia. There is a tailwind of people that are going to need increasing levels of care, whether that’s at home or in an aged care facility.
I’m not sure if this is the best and final offer for Japara, or whether it could go even higher from here. There might be ASX growth shares that have more growth potential.
