Some more of the same. This is from The Australian. Can't post a...

Some more of the same. This is from The Australian. Can't post a link, will be behind a paywall. Note the 2nd paragraph.


"The dust has finally settled on Capitol Health’s ambitious but ultimately failed bid for Integral Diagnostics but analysts believe the company is cashed up and hungry to keep growing.

Credit Suisse, the key defence adviser appointed by Integral, lifted its research restrictions yesterday after the deal was declared officially over last month and issued a positive outlook about both companies.

The Capitol bid was made up of 36c cash and 6.9 shares for each share in Integral which valued the takeover target at around $350 million.
But the offer was reliant on a 90 per cent take up rate, and when the acceptances fell short Capitol walked away and left Integral to return to business as usual.

Now, analysts are starting to speculate what happens next, especially for Capitol.

Credit Suisse has placed buy recommendations on both Capitol and Integral in a sign that the bank remains particularly bullish about the Australian healthcare sector’s prospects.
The bank’s analysts yesterday said the deal made sense for Capitol, especially in terms of synergies and broadening the business’s geographic footprint, but a push back by the Integral board and radiologist shareholders would have made a transaction too tough.

Capitol Health had secured support of four funds invested in Integral, which together account for 19.55 per cent of the shares, before the bid was launched. The companies were Adam Smith Asset Management, Microequities Asset Management, Regal Funds Management and Wilson Asset Management.
Credit Suisse said that based on the bank’s earnings and growth forecasts for the next two years Capitol should be well placed to pick up some bolt on acquisitions shortly.

The outlook on Integral is similarly positive, and Credit Suisse said the regulatory environment for the company was expected to remain unchanged. If that’s the case, then Medibank spending on radiology and imaging would be kept at the current levels or possibly increased which would help Integral’s earnings prospects.Capitol share are trading around the 26c mark, which is a 30 per cent discount to the valuations that some analysts have in place. Credit Suisse has a target on the stock of 35c. It’s call on Integral is $2.70 and the company is trading around $2.33."

CREDIT: DATA ROOM EDITED BY BRIDGET CARTER ; SCOTT MURDOCH