Healius Board Rejecting AUD 3.40 Bid a Disappointment, Maintain AUD 3.36 FVE

We are disappointed the board of no-moat Healius rejected the nonbinding acquisition proposal at AUD 3.40 per share as the cash offer was comparable with our fundamental fair value estimate for the company. Rejection of the offer comes after the company abandoned targets for the turnaround and seeks a buyer of the medical centres division. Despite evidence of improvement in the margins of the pathology and diagnostic imaging segments in the most recent results, we believe the AUD 3.40 proposal effectively crystallises the benefits of the turnaround and accepting it would have been in shareholders’ best interests.