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Nestor Healthcare knocks back £100m approach from SAGA owner Acromas Holdings

Nestor Healthcare (LON:NSR) has snubbed a 90p per share unsolicited approach for the company from the owners of the AA and SAGA, Acromas Holdings. The social care specialist rejected the offer, which values the company at over £100m, because the board believes it “materially undervalued” the business.

On the London Stock Exchange Nestor shares surged over 10%, reaching 89p per share, just one penny below the rejected offer price.

Only last week, Nestor reported strong interim results with operating profits jumping 35% to £5.9m in the first 6 months of the year.  The company’s Social Care division was particularly strong, contributing revenues of £55.7m (up 7%) and a £6m profit (up 42%) as volumes increased and the group maintained tight control of costs.

In a separate statement, Acromas said the proposed acquisition woul accelerate the company’s strategy “to grow a home healthcare services division within Saga” and build a major national branded business”.

“This is a fragmented market in which there is currently no trusted nationwide brand operating.”

Furthermore, SAGA’s owner made it known that Nestor is not alone as a potential takeover candidate. “Nestor is one of a number of businesses which Acromas has approached and Acromas has a number of live discussions having already made two acquisitions”.

SAGA is a specialist consumer brand which primarily targets the over 50s demographic. The company offers a range of products and services from insurance, consumer good, specialist holidays, and private healthcare services.

Acromas was formed with the merger of the AA (Automobile Association) and SAGA back in 2007.