The beauty treatment company SILK Laser Australia (ASX: SLA) has found itself at the center of a bidding war as it contemplates the offers from two interested parties—EC Healthcare and Australian Pharmaceutical Industries (API). As if in an episode of the Bachelor, it must now decide: who gets the rose?

SILK Laser Australia has received a non-binding and indicative proposal from EC Healthcare, a Hong Kong-based non-hospital medical service provider, expressing interest in acquiring 100% of SILK’s shares. EC Healthcare’s offer stands at an indicative price of $3.35 cash per share, surpassing the $3.15 per share offer from Wesframers’ healthcare’s subsidiary, Australian Pharmaceutical Industries (API).

As a publicly-listed company on the Hong Kong stock exchange, EC Healthcare’s proposal presents an enticing opportunity for SILK. The offer also includes the provision for SILK to distribute a fully franked dividend of up to 10 cents per share, referred to as the “Permitted Dividend”. If the dividend is paid out, the cash component of the offer will be reduced accordingly.

With the EC Proposal offering a 6.3% premium over API’s bid, the decision now lies in the hands of SILK Laser Australia’s board. However, the EC Proposal is contingent upon various conditions, including the completion of confirmatory due diligence, a unanimous recommendation from the SILK board, and the execution of a Scheme Implementation Agreement encompassing key provisions such as break fees, exclusivity clauses, and standard market conditions.

SILK’s board, following careful consideration and consultation with financial and legal advisors, has deemed the EC Proposal to be a Superior Proposal in accordance with the Process Deed signed between SILK and API on April 19, 2023. As per the terms of the Process Deed, SILK has officially notified API of the EC Proposal’s superior status. API now has a window of five business days, until Tuesday, May 30, 2023, to submit a counterproposal in response to SILK’s notification.

Of course, this doesn’t mean the end of the road for API. The Company will objectively evaluate any proposal put forward by API during the specified period, seeing if it matches or surpasses the terms of the EC Proposal. The Company assured shareholders that no action is required on their part at present. 

Despite the ongoing engagement between SILK and EC Healthcare, there’s no saying for sure that this will lead to a change of control transaction or an offer that SILK shareholders can accept. 

To navigate this process, SILK has gotten Highbury Partnership on board as its financial advisor, while legal matters are being handled by Kain Lawyers. Wilsons Corporate Finance Limited is serving as a co-advisor in the proceedings.

As the bidding war unfolds, industry observers eagerly await the final outcome, wondering which bidder will ultimately win the favor of SILK Laser Australia and secure the coveted acquisition.