The A$3.20 per share proposal represents a 25.5% premium to Estia's stock closing price on June 6, before the offer was first disclosed.

Shares of Estia Health were up 9.9% at A$3.12, as of 0045 GMT, hitting their highest since September 2018.

In June, the company updated the market on its intentions to back Bain Capital's sweetened takeover offer after providing limited access to its books to the suitor in April.

Estia is one of Australia's largest aged care operators, having more than 6,500 places in 70 sites across the country.

"The Board is confident as to the outlook for the business, however, recognises that the scheme allows shareholders to realise certain cash value now at an attractive premium," Estia Chair Gary Weiss said on Monday.

"The improved offer price in June was a good one for Estia shareholders and the effective signing of the scheme shows some private equity deals do go through," said Henry Jennings, senior market analyst at Marcustoday Financial Newsletter.

Bain Capital did not immediately respond to a Reuters request for comment.

Estia's board unanimously recommended its shareholders vote in favor of the proposal, adding that a shareholder vote is set to happen in November.

The company said in a statement that under the deal, it is now permitted to pay fully franked dividends of up to A$0.12 per share.

($1 = 1.5214 Australian dollars)

(Reporting by Rishav Chatterjee in Bengaluru; Editing by Diane Craft, Lisa Shumaker and Sherry Jacob-Phillips)

By Rishav Chatterjee