Washington H. Soul Pattinson and Company Limited (ASX:SOL) (WHSP) and a financial party made a non-binding indicative proposal to acquire Regis Healthcare Limited (ASX:REG) on September 30, 2020. Washington H. Soul Pattinson and Company Limited and Ashburn Pty Limited submitted a revised non-binding, indicative proposal to acquire the remaining 72.76% stake in Regis Healthcare Limited for approximately AUD 410 million on November 19, 2020. Under the revised proposal, consideration comprises of two alternative forms of consideration to Regis shareholders, one being full cash consideration at AUD 1.85 per share or a scrip alternative in a newly incorporated company (HoldCo), allowing Regis shareholders to retain an exposure to Regis as a privately operated business. The transaction represents an equity value of AUD 557 million and an enterprise value of AUD 773 million including a net debt of AUD 216 million. Ashburn Pty Limited already holds 27.23% stake in Regis Healthcare. Washington H. Soul Pattinson and Ashburn Pty Limited have identified a minority private financial investor who may join the consortium prior to announcement of a definitive transaction. The revised proposal is not conditional on their participation. Equity funding for the transaction is expected to be provided by cash, undrawn credit facilities and other liquid financial assets on Washington H. Soul Pattinson's balance sheet totaling approximately AUD 0.7 billion at July 31, 2020.

The transaction is conditional upon entry into a mutually agreed implementation agreement and subject to the satisfactory completion of Washington H. Soul Pattinson's due diligence enquiries, approval from the respective Board and Investment Committees of each of Washington H. Soul Pattinson and Ashburn Pty Limited; and joint bid relief granted by ASIC in respect of arrangements between Washington H. Soul Pattinson. Australian regulatory approvals are not expected to be required for the transaction. The implementation agreement would be conditional on each Director of Regis Healthcare recommending and continuing to recommend, that shareholders of Regis Healthcare vote in favour of the scheme, each Director of Regis Healthcare of the full Board intending to vote any shares that they control in favour of the scheme, subject to no superior proposals and customary fiduciary carve outs, receipt of all necessary regulatory approvals, waivers and consents, if applicable, approval by the requisite majority of shareholders of Regis Healthcare, break-fee of 1% of the equity value of Regis Healthcare of the transaction implied by the proposal price, cancellation of options and performance rights in relation to Regis Healthcare and other customary conditions. On November 19, 2020, Regis established a formal Board Committee, comprising Regis's independent, non-executive Directors and the Managing Director and Chief Executive Officer, to consider the proposal. The proposal was rejected by the Board Committee as it materially undervalues Regis given its medium to long term prospects and does not offer fair value to shareholders. Regis shareholders do not need to take any action in relation to the proposal. Credit Suisse acted as financial advisor and MinterEllison acted as legal advisor to Washington H. Soul Pattinson. Flagstaff Partners Pty Ltd acted as financial advisor and Herbert Smith Freehills acted as legal advisor to Regis.