Regis Chairman Graham Hodges (pictured above) has written to shareholders to explain why his board turned down two takeover bids led by conglomerate Washington H. Soul Pattinson – as speculation builds that Regis may try to block further bids by spinning off its real estate platform.
As we covered here, Soul Patts and Regis co-founder Bryan Dorman – who owns a 27% stake in the company – made a $1.85 a share offer on 19 November, which was rejected the next day for undervaluing the company.
An earlier $1.65 a share offer by Soul Pattinson with Skip Capital, an investment company owned by Atlassian co-founder Scott Farquhar, on 30 September that was not disclosed to the market was also labelled “inadequate”.
Calling the offers “opportunistic” given the Aged Care Royal Commission into Aged Care will likely result in greater Government funding for the sector, Mr Hodges stated: “there are clear pathways to improved profitability for Regis and the other leading operators in the sector”.
The decision to reject the offers would appear to be the right one – Regis’ share price is currently sitting at $1.86, above the two offers.
The Australian’s DataRoom section has reported that Regis may look to spin off its $1.1 billion in real estate assets to deter further takeover offers, but it is understood there are no immediate plans for this to happen.
Regis has 65 aged care homes and around 7,100 beds.