Ramsay Health Care (ASX:RHC) outlined plans to distribute its 52.79% shareholding in Ramsay Santé to Ramsay shareholders through an in-specie distribution, following what management described as a comprehensive strategic review of its European investment.
CEO Natalie Davis, joined by CFO Anthony Neilson, said the review considered “a range of alternatives,” including market testing and assessment of executability, with advice from Goldman Sachs. While the company did not detail the other options considered, Davis said management believes the in-specie distribution is the best path to “simplify the group” and allow each business to pursue “distinct strategic priorities.”
Rationale: Simplification and focus on Australia
Management emphasized the proposal is intended to support Ramsay’s focus on its “core Australian hospital business.” Davis referenced the priorities set at the beginning of her tenure as CEO, noting that the first was transforming the Australian business. She said simplifying the international portfolio would help leadership focus time and attention on that transformation.
When asked about stranded corporate costs or potential dis-synergies, Davis said operational synergies between the international businesses are “very limited” and the company does not expect “any material dis-synergies.” She also said the company is not framing the move as a cost-savings initiative, though it may free up management time.
Proposed structure and timeline
The company said Ramsay shareholders would receive Ramsay Santé shares proportional to their existing Ramsay shareholding. The distribution is expected to be implemented via a scheme of arrangement, meaning it will require Ramsay shareholder approval.
Because Ramsay Santé is already listed on Euronext Paris, Ramsay proposes to assist in establishing arrangements allowing shareholders to hold their interests via CHESS Depositary Interests (CDIs) tradable on the ASX.
If all necessary approvals are obtained, Ramsay expects completion in Q4 of calendar 2026. Davis also said the current timeline envisages a demerger booklet ahead of a shareholder vote in Q4 2026, with relevant information to be included in that booklet.
In the Q&A, Neilson confirmed that a scheme of arrangement would require 75% shareholder approval.
Shareholders’ agreement with Predica to be terminated
As part of the broader strategic review, Ramsay has given notice to terminate the existing shareholders’ agreement with Predica, which holds 39.82% of Ramsay Santé. Davis said the agreement has a six-month termination period and will terminate in accordance with its terms effective October 1, 2026.
In response to questions on whether ending the agreement was necessary to execute the proposed distribution, Davis said there is “no requirement” to obtain approval from the other major shareholder to progress the proposal. She added that the agreement would have needed to be refreshed in early October, and that the termination decision reflected a shift in Ramsay’s strategic posture toward Europe and its Ramsay Santé shareholding.
Approvals, accounting, and tax considerations
Management indicated the approvals required for the proposed scheme would be based in Australia. Davis said a demerger booklet will be prepared, reviewed by ASIC, and a court process followed, culminating in a shareholder vote by Ramsay Health Care shareholders.
On questions regarding consultation with employee bodies in France, Davis said Ramsay Santé would lead that process. She characterized it as a consultation process and said it is not subject to conditions, though consultation is required.
Neilson addressed potential accounting treatment, noting that Ramsay would continue consolidating Ramsay Santé in its accounts given the scheme is subject to a shareholder vote. He said the company would not approach “held for sale type accounting” until closer to the Q4 period nearer the shareholder vote.
On tax, Neilson said Ramsay will work with the Australian Taxation Office and seek a class order related to demerger relief, with details expected to be outlined in the demerger booklet when issued.
Management also said the separation should be relatively straightforward because Ramsay Santé already operates independently, with its own board, management team, balance sheet, and financing arrangements. When asked about transaction costs, Davis said shareholders should expect some costs for transaction fees and preparation of the demerger booklet, with the estimated quantum to be provided later, such as in results disclosures.
Davis closed the call by reiterating that the strategic review was “very detailed” and that management believes distributing Ramsay Santé shares to Ramsay shareholders supports long-term value creation. She said the company would provide further updates to the market as the process progresses and noted Ramsay’s half-year results were scheduled to be released the following week.
About Ramsay Health Care (ASX:RHC)
Ramsay Health Care Limited owns and operates hospitals. The company offers health care services to public and private patients. It operates facilities in approximately 530 locations in the Asia Pacific, the United Kingdom, France, and Nordics. Ramsay Health Care Limited was founded in 1964 and is based in Sydney, Australia.
