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The KKR-led consortium first approached Ramsay in April with an A$88 cash per share bid but took it off the table in late August after the company reported a 39% slump in annual profit.
The bid was revised so that Ramsay shareholders would be entitled to A$88 per share as in the all-cash proposal but only for the first 5,000 shares.
For investors with larger stakes, the offer was split into A$78.20 per share in Ramsay and 0.22 share in French subsidiary Ramsay Generale de Sante. Ramsay described the alternative proposal as “meaningfully inferior”.
KKR said previously it would not improve its $14.5 billion cash-and-stock offer, citing the company’s weak performance. Ramsay was told the KKR group would discuss mutually acceptable terms if it was willing to reset valuation expectations and consider a new proposal.
“It has become apparent that the consortium is unable to provide a new proposal at this time,” Ramsay said.
A spokesperson for the KKR-led consortium told Reuters in a statement: “Following recent engagement with the Ramsay Board, we have decided to mutually terminate discussions regarding a potential change of control transaction”.
Ramsay operates healthcare facilities across 10 countries and a successful acquisition of the company would have represented one of Australia’s largest private equity buyouts.
Ramsay’s inability to reach an agreement with the KKR-led group underscores a growing problem of execution risks in Australian mergers and acquisitions in a year marked with share market gyrations and tough scrutiny from competition regulators.
This is in contrast to 2021 which saw a flurry of blockbuster takeovers including those of Sydney Airport and Afterpay.
