Why Generation Healthcare REIT Shares Rose 10% Today

Generation Healthcare REIT Ltd [ASX:GHC] opened up 13.5% this morning, to $2.27 a share.

What happened to Generation Healthcare REIT?

This morning, APN Funds Management, the responsible entity of GHC, announced that it had received an off-market bid. The healthcare property real estate investment company, NWH Australian Asset Co Pty, bid $2.24 for all units in the Generation Healthcare REIT.

APN stated:

Until the Board of the Responsible Entity has issued its formal recommendation regarding the offer, members of the Fund are advised to take no action in response to the proposed takeover offer.

What now for GHC shares?

The offer will remain open for at least a month. In that time, APN will review NWH’s offer.

If you’re looking to get in now, it could be too late. However, if APN knocks back the bid, the share price could climb.

Knocking back the bid would mean APN believes the value of the company is far higher than $2.24 per share. Rejecting the bid could also encourage NWH to make a higher counter-offer.

Of course, the opposite could also happen.

If APN rejects the bid and NWH is not interested in any further bids, the stock could drop. If this does happen, however, it could be a good opportunity to buy the stock.

Right now, I’d suggest you hold out and consider GHC as an investment if the stock drops after APN potentially rejects NWH’s offer.


Härje Ronngard,

Junior Analyst, Money Morning

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