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An Increased Offer Is To Be Expected For Healius

Feb. 06, 2019 8:40 AM ETHealius Limited (PHCRF)


  • Jangho Group made a bid for Healius, which was quickly rejected.
  • There is a possibility of Jangho increasing the price.
  • HLS is currently in a turnaround situation, so even if there won't be any sweetened offer, we can expect the share price to rise.

Current price: A$2.9

Rejected offer: A$3.25

Upside: 11%+

This is a quick write up about a potentially interesting situation in Australia.

Australian healthcare company Healius (OTC:PHCRF) (previously - Primary Health Care) has received a takeover offer priced at A$3.25/share from their largest shareholder (holds 16%) Chinese curtain wall maker Jangho Group (601886.SS). In only 4 days it was rejected and called “opportunistic and undervaluing.” The potential play here is that Jangho, which is currently diversifying into the Australian and Chinese healthcare sector, will raise the bid; however, even if that does not happen, Healius is currently in a turnaround situation and the recent + planned investments might lift the share price as well.

The offer is priced at a 33% premium to the last closing price (before the offer announcement) and a 30% premium to the equity raise in August at a price of A$2.5/share; however, as commented by the Healius, it is “highly conditional and uncertain.”

The buyer

Jangho Group is a China-based company (market cap = $1.3bn), whose main business is the construction of curtain walls and interior decoration. Since 2015, the company is diversifying into Chinese and Australian healthcare sectors:

  • In 2015, acquired Australia's largest eye chain hospital Vision Eye for A$200m at a 20% premium to last closing price. It took 5 months to complete the deal.

  • In 2016, became the largest shareholder in Primary Health Care (currently - Healius) by acquiring an 11.7% stake and increased it later on.

  • In November 2016, acquired a controlling stake at Chinese Zeming Eye Hospital Management.

So far, Jangho has used the expertise of Australian Vision to expand and develop their ophthalmology business in China, so most likely the same story will be repeated with HLS.


Until December 2018, the company was called Primary Health Care. It runs 52

This article was written by

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