Australia's Healius jumps on review, CEO change amid shareholder value challenges (updated)

Healius

05/03/2024 24:47

(Recasts paragraph 1, adds comments from analysts in paragraphs
5-6, updates throughout from paragraph 3)
    By Ayushman Ojha
       March 5 (Reuters) - Healius  HLS.AX  shares jumped more
than 14% on Tuesday after the healthcare firm said it would
start a review and engage investment advisers following the
regulator's move to stop a $1 billion takeover by Australian
Clinical Labs  ACL.AX  last year.
    Healius also said Chief Financial Officer Paul Anderson will
transition to the CEO role, replacing Maxine Jaquet.
    The new CEO, "will lead the strategic review, which is aimed
at maximising shareholder value in a changing diagnostics
market," the Australian company said in a statement.
    Healius has assets in imaging and pathology across Australia
with a network of pathology laboratories, and diagnostic imaging
centers.
    "We believe a sale of the imaging division is the most
likely scenario, with a partial sale of pathology also
possible," analysts at Citi wrote.
        "While the sale of imaging would solve the near-term
gearing issue, it wouldn't solve the profitability and
structural challenges faced by the pathology division, which
will take years to resolve."
    The Australian Competition and Consumer Commission last
December had rejected to the takeover by rival Australian
Clinical Labs (ACL), citing deterioration in competition in the
domestic pathology services market.
        ACL had withdrawn the offer, saying it was worried about
the 45% slump in Healius shares ever since the deal was
announced on March 20, 2023.
        Despite that, ACL saw "compelling" benefits from a
merger, and had said it would closely monitor the performance of
Healius in the coming months and remains open to a merger.
        The healthcare firm said the incoming CEO "has been with
Healius for the past year and had a clear understanding of the
opportunities and challenges the business faced to create
shareholder value."
    Shares rose as much 14.2% to A$1.3 in early trade, set for
their best session since June 2020, if gains hold. Healius stock
was the top gainer on the ASX 200 benchmark index  .AXJO .
    Stock has fallen 31.2% so far in 2024.
    
    

 (Reporting by Ayushman Ojha; Editing by Alan Barona and Sherry
Jacob-Phillips)
 ((Ayushman.Ojha@thomsonreuters.com;))