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Monday, January 17, 2022

Japara board gives nod to Calvary $380m takeover offer

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The first of what could be many consolidations in future in the aged care sector is under way after Japara Healthcare’s board unanimously recommended the $380 million takeover offer by Calvary Healthcare.

The Japara board backed the Calvary proposal to shareholders which, if approved, will see Calvary acquire 100 per cent of the Japara shares, at $1.40 a share, via a Scheme of Arrangement.

The Scheme implies an equity value of approximately $380 million.

It is subject to Japara shareholders’ approval by the requisite majorities at the Scheme Meeting expected to be held in October 2021.

Calvary is a charitable, not-for-profit, Catholic health care organisation, responsible for more than 12,000 staff and volunteers, 14 public and private hospitals, 17 retirement and aged care facilities and 22 community care centres.

It beat rival not-for-profit operator Bolton Clarke Group, which had pitched a $326 million takeover bid.

Japara is one of the top three listed players in the aged care sector and has one of the country’s largest private-sector residential aged care portfolios, with more than 4400 operational resident places across 51 homes in Victoria, NSW, Queensland, South Australia and Tasmania.

Martin Bowles, Calvary National CEO said while there is still a way to go, this is ‘very encouraging and another step to further establish the organisation’s integrated care model across residential, community and hospital services’.

“Calvary is in an exciting phase of growth which includes playing our part in the future delivery of health, aged and community care services across Australia,” Bowles said.

“Serving a larger community has long been an objective for our expansion across Calvary’s 135-year history in Australia.

“Growing our aged care portfolio will enable us to better serve the people for whom we already care, offer support to more people and be present with people in the times when they are most vulnerable.

“We look forward to working with the Japara team to combine the best of both organisations for the ultimate benefit of those in our care.”

Japara Chairman Linda Bardo Nicholls AO said the board had decided that the deal had its backing.

“The Japara Board is pleased to unanimously recommend this proposal to shareholders,” she said in a statement.

“In making this assessment, the board considered a number of alternatives including a competing proposal and standalone value creation from the execution of our existing strategy.

“After careful consideration of the future opportunities for Japara, along with sector and regulatory uncertainty, and execution risks, the board has determined that the scheme delivers compelling value to Japara shareholders.”

Founded in 1885 by the Sisters of the Little Company of Mary, Calvary’s mission is ‘to provide quality, compassionate health care to the most vulnerable, including those reaching the end of their life’.

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