Seems we will go down option 2. Underperformance of the Board...

Seems we will go down option 2. Underperformance of the Board will continue to grate, as will cash alternative that sits on the table waiting.

If Jangho is serious, coming back with another circa 50 cents would seal it and at an additional $300m, should not matter given prospect of control and long term ownership. They also need to pay up more.

Jangho can’t stomach a sit and wait for 2 plus years strategy, doesn’t trust Board will deliver, as they’ve responded below:
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Healius bidder to up pressure after takeover bid rejection
Patrick HatchUpdated7 January 2019 —

Chinese group Jangho will lobby the board of healthcare giant Healius to reconsider its $2 billion takeover bid after the company swiftly dismissed the offer on Monday.

Jangho, which already owns 16 per cent of Healius, said it was "disappointed" the company formerly known as Primary Health had declined to even let it into due diligence, and warned there was no guarantee that the current board and management could turn the company around.

Jangho's indicative and conditional bid of $3.25 made on January 3 represented a 46 per cent premium to the closing price on December 31; and a 30 per cent premium to Healius' $2.50-a-share capital raising in August, but a discount to its 12-month high of $3.95, which it hit in March.

Healius said shareholders would realise more value from their investment by waiting for initiatives in play to improve the company's performance to bear fruit, rather than by taking Jangho's offer now.

"The board remains very confident in the strategy being implemented by the management team and in the future growth of Healius," said Healius chairman Rob Hubbard.

He said Jangho was the only shareholder that would benefit from the takeover.

Jangho shot back in a statement that it was disappointed the board had "so promptly dismissed an offer that represents compelling value for Healius shareholders".

"Jangho has offered to meet with the board and management of Healius to explain why Jangho believes it is in the best interests of Healius shareholders that they be given the opportunity to consider the proposal."

Jangho said that Healius shareholders were exposed to "significant execution risks" in relation to its turnaround plans.

Healus' share price spiked 17.5 per cent, from $2.34 to $2.75, last week off the back of the offer. On Monday, the stock eased only to $2.58 on its rejection - suggesting the market still considers a takeover in play.

Jangho's background is in construction supplies and it is one of the world's biggest manufacturers of curtain walls.

But it has been diversifying into healthcare through several investments in Australia.

In 2015, it bought a 20 per cent stake in the ASX-listed Vision Eye Institute from Healius (then Primary Health), and then bought the entire eyecare group. It is also the fourth-largest investor in Monash IVF with a 4.5 per cent stake.

Healius operates about 2400 pathology centres, 70 medical centres and is partnered with about 1500 general practitioners, dentists and other healthcare specialists Australia-wide.

It is not clear how Jangho's plans to better run Healius.


But one market source said it wanted to use Healius' expertise and resources to then develop a larger health business in China.

Jangho has used technical support and other resources from Vision Eye Institute to grow its Chinese optometry business, Zeming Eye Hospital.

Healius also said that Jangho's takeover proposal was also highly conditional, with funding yet to be secured and approval from Chinese and Australian regulators required, which hardened the board's view to reject the offer.

But Jangho said the conditions attached were standard for a bid of its type from a Chinese company.

Healius has had a difficult few years, which have included a protracted pay dispute with pathology staff and trouble recruiting and retaining GPs to its medical centres.

Its total rate of return over the past five years sits at negative 30 per cent, compared to 43 per cent growth on the ASX200, and positive 127 per cent across ASX200 health companies.

The market expects Healius' earnings per share to improve slowly, from 18¢ in 2018 to 16¢ next year, 18¢ in 2020 and 20¢ in 2021, based on a consensus of analysts.