HESTA confirms bid for Ramsay Health Care

Industry super fund HESTA has announced it is part of a consortium led by KKR to acquire Ramsay Health Care.

At the time of writing, Ramsay Health Care's share price rose 2.45% following the HESTA announcement.

HESTA chief executive Debby Blakey said the transaction represented an exciting opportunity to invest in the future growth and success of Australia's leading hospital provider.

"We believe this investment has the potential to have a positive impact on patient health and wellbeing in Australia and abroad whilst helping to generate strong returns for our members," she said.

Blakey added that central to the long-term success of the investment was being able to continue to enhance the high-quality patient care that Ramsay is renowned for in Australia and abroad.

"Ramsay's care-centred culture is at the heart of its business, driven by dedicated healthcare professionals who deliver outstanding patient outcomes every day," Blakey said. "They are vital to the ongoing success of Ramsay and are at the forefront of the Consortium's shared vision for expansion and innovation that can achieve new standards of care and an enhanced employee experience."

This latest announcement continues the $68 billion industry fund's strong focus on investing in healthcare, one of the fastest-growing sectors of the Australian economy.

As almost a third of the fund's more than 900,000 members work directly in healthcare and the acquisition would greatly compliment HESTA's existing investments in social infrastructure, early-stage biomedical development and software and digital services providers.

The development comes after Ramsay Health Care released an ASX statement yesterday in response to media speculation over a non-binding indicative proposal.

In its statement, Ramsay Health Care confirmed that under the indicative proposal from a consortium of financial investors led by KKR, 100% of the shares of Ramsay Health Care were to be acquired.

Also, under the proposal, Ramsay shareholders would be entitled to receive $88 per share cash or they could've exercised an option to receive part of the consideration in unlisted scrip in the Consortium holding entity.

However, the statement did also indicate that the proposal was subject to several conditions and discussions were still preliminary in nature.

Following the release, Ramsay Health Care shares rose 24.48%.

Last year, Ramsay Health Care became the first Australian corporate to close a sustainability-linked derivative.

Ramsay Health Care traded an ESG-linked interest rate swap exclusively with NAB, the bank reported. The ESG targets are linked to an existing sustainability linked loan (SLL).

The Ramsay Health Care ESG derivative's KPIs are linked to the same sustainability targets as the healthcare provider's $1.5 billion syndicated sustainability linked loan (SLL), which was announced in July 2021.

The new facility comprises three $500m tranches maturing in three, four and five years respectively to refinance existing debt facilities and is linked to achieving the embedded targets that are aligned with the three pillars of the "Ramsay Cares" sustainability strategy - Caring for People, Caring for Planet and Caring for Community.

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