March 20 (Reuters) – Australian Clinical Labs (ACL.AX) on Monday offered to acquire Healius (HLS.AX) through an all-share takeover, valuing the medical center operator at A$1.52 billion ($1.02 billion).

One of the country’s largest pathology providers said it will offer 0.74 share for every Healius share. The offer price represents a discount of about 4.2% to Healius’ last close.

Healius in a separate statement confirmed it received the offer and advised its shareholder not to take any action. The company did not provide further comment.

If the deal is successful, Healius’ shareholder will own 68% of the merged entity, the company said in a statement.

The deal is subject to Australian Competition and Consumer Commission (ACCC) and Foreign Investment Review Board approval.

“The proposed merger will enable acceleration of investments to enhance and expand a range of patient and doctor services, including developing and bringing new tests into Australia,” ACL chief executive officer, Melinda McGrath, said in statement.

In 2020, Healius rejected a $1.3 billion buyout offer from Partners Group, saying at the time it undervalued the medical center operator.

Shares of ACL rose 3.1% to A$3.7, while Healius jumped 6.8% to A$2.97, hitting the highest levels in a month.

“We are wary of the ACCC approving this transaction in the current form,” Craig Wong-Pan, market analyst at RBC Capital Markets said in a note.

“We expect asset divestment to be required to obtain ACCC approval, which could reduce the amount of synergies from the merger.”

The potential merged group would have a fiscal 2023 earnings before interest and taxes (EBIT) of A$361 million. Without the merger, ACL expects EBIT of A$68 million to A$74 million in 2023, down from A$266.6 million in fiscal 2022.

($1 = 1.4896 Australian dollars)

Reporting by Navya Mittal in Bengaluru; additional reporting by Echa Jain; Editing by Lisa Shumaker and Sherry Jacob-Phillips

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