Back in April, we told you about Healthia (ASX:HLA) – a roll-up company of allied healthcare practices. Today, this company got a takeover bid and rose over 75%.
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Healthia (ASX:HLA) gets a takeover bid
Healthia listed in late 2018 at $1 a share and a market capitalisation of $63m, having begun 14 years earlier with just one clinic, reaching 104 by 2018 and over 300 by mid-2023. It’s share price lagged for several months despite good results. Investors feared consumers would cut their spending on the services Healthia provides. Unlike the services provided by other healthcare stocks (such as pathology), services like physiotherapy and speech therapy typically are not fully covered by Medicare.
We thought things would have to turn eventually and they have. Pacific Equity has made a $1.80 per share bid – an 85% premium to yesterday’s closing share price. And the board has unanimously endorsed the offer in absence of a superior proposal.
Why it is bad news
Now, it is good news for Healthia shareholders, don’t get us wrong. No one on the stock market lost money from accepting a takeover offer for sweet cash (unless of course it was a bid lower than what they bought in at).
However, it is one of several companies to have departed the ASX in recent months, willing to sell itself due to poor share price performance regardless of how the companies have actually been performing. The list includes Nitro, Nearmap, Elmo Software, MSL and Pushpay – just to name a few. For al these companies, it was a case of all is well that ends well. But if companies don’t think they can create shareholder value on the ASX, they will avoid listing. And this means fewer options for investors.
We need companies to be staying on the ASX and investors need to judge companies by their performance and not by fears about how the industry is going.
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