ASX:RHC
Ramsay Health Care Ltd Fully Paid Ord. Shrs
Investment Summary
The fund managers believe Ramsay Health Care Ltd remains a fundamentally strong business with significant long-term value creation potential, despite the setback from the failed takeover bid by the KKR consortium. In their opinion, the termination of discussions around the $88 per share offer in September 2022 was a disappointment, as it represented a near-term opportunity to realise value through a premium acquisition. Nevertheless, the fund managers continue to view Ramsay as a high-quality asset, underpinned by its position as Australia’s largest private hospital operator and its well-established international presence across the UK, France, Nordics, and Southeast Asia. They believe Ramsay still possesses several levers to unlock shareholder value organically, including portfolio simplification, monetisation of its Australian property assets, and improved capital management. In their view, the company's diversified global operations and exposure to long-term healthcare demand trends provide a resilient foundation for future growth. While the failed deal impacted short-term sentiment and share price performance, the fund managers maintain confidence in the strategic optionality available to Ramsay’s board and management team. Overall, they believe Ramsay remains a compelling investment opportunity with multiple pathways to deliver enhanced shareholder returns over time.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Manager
L1 Capital
Date
30 Sept 2022
Price
$57.28
Medium
Monthly Report
Commentary
L1 Capital Long Short Fund continues to hold Ramsay Health Care despite a recent decline in its share price, following the company’s cessation of discussions with the KKR consortium regarding a non-binding proposal. Ramsay remains the largest private hospital operator in Australia, with a strong global footprint in key markets such as the UK, France, and South-East Asia. While the collapse of the takeover offer was disappointing, L1 Capital believes that significant value-unlocking opportunities remain within the business. These include potential portfolio simplification, the monetization of its Australian property holdings, and capital management initiatives. Given Ramsay's dominant position in the healthcare sector and ongoing strategic options to enhance shareholder value, L1 Capital maintains a positive outlook for the company and continues to hold the stock as they await further value realization.
L1 Capital
Date
30 Sept 2022
Price
$57.28
Medium
Monthly Report
Commentary
L1 Capital Long Short Fund has updated its investment thesis on Ramsay Health Care Ltd following the withdrawal of the non-binding takeover proposal from the KKR consortium, which had initially valued the company at $88 per share. The Fund continues to hold its position, despite the near-term disappointment, as it believes the long-term value proposition remains intact. Ramsay, as Australia’s largest private hospital operator with a strong international presence across the UK, France, the Nordics, and South-East Asia, continues to possess a high-quality portfolio and strategic global footprint. While the failed takeover bid represented a potential near-term catalyst for unlocking value—through portfolio simplification, realising value from its Australian property assets, and capital management—L1 Capital Long Short Fund believes there remain multiple avenues for Ramsay’s board and management to pursue shareholder value creation. The Fund sees ongoing strategic optionality and continues to view the company as a significant player in a defensive, long-term growth sector.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.