By Rishav Chatterjee and Nikita Maria Jino (Reuters) -Monash IVF Group’s shares were on track for a record single-day gain on Monday after the Australian fertility chain rejected a takeover bid from a consortium that valued it at A$311.7 million ($201.36 million), on valuation concerns. The consortium of private equity company Genesis Capital and local […]
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Australia’s Monash IVF on pace for strongest day after rejecting $201 million bid
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By Rishav Chatterjee and Nikita Maria Jino
(Reuters) -Monash IVF Group’s shares were on track for a record single-day gain on Monday after the Australian fertility chain rejected a takeover bid from a consortium that valued it at A$311.7 million ($201.36 million), on valuation concerns.
The consortium of private equity company Genesis Capital and local investment firm Washington H. Soul Pattinson had offered A$0.80 for every share in Monash that it does not already own, reflecting a 31.1% premium to the stock’s Friday close. The two companies together hold a 19.6% stake in Monash.
Monash IVF Chairman Richard Davis said the board viewed the bid materially undervalued the firm and was opportunistically timed.
The company said the offer valued Monash IVF at 7.7 times its earnings, lower than recent transactions in the industry. It also raised concerns about the consortium’s proposed financing structure.
Shares of Monash IVF surged about 41% to hit their highest levels since mid-May. The broader benchmark index gained 1.3%.
“Monash IVF’s 39% surge shows the market is swiftly re-pricing the stock, with the rejected bid effectively putting the company back on the radar,” said Hebe Chen, a market analyst at Vantage Markets.
“With consolidation themes strengthening and fundamentals stabilising after a turbulent stretch, investors will be watching whether this early approach develops into a more eye-catching deal.”
Excluding Monday’s moves, Monash IVF shares have fallen more than 40% since early April, when the firm admitted that a woman had given birth to a stranger’s baby after a fertility doctor accidentally implanted the wrong embryo.
Things got worse for Monash IVF in early June, when it reported a new incident related to an embryo transfer, amplifying calls for tighter oversight in a sector that had long operated with limited regulatory scrutiny.
($1 = 1.5480 Australian dollars)
(Reporting by Nikita Maria Jino in Bengaluru; Editing by Subhranshu Sahu)