Healthscope Back In Private Equity Crosshairs
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A first bid try on from a group of private investors trying to snatch Healthscope on the cheap?
Healthscope confirmed yesterday it received a buyout offer from a private equity consortium for $4.11 billion, or $2.36 cash per share.
The company’s shares jumped more than 14% to $2.33, indicating investors do not see a counter bid, but also believe a higher offer price will have to be forthcoming to win over the board (and perhaps any final dividends).
The takeover offer price is at a 16% premium to Healthscope’s closing price on Tuesday.
"The Healthscope board has commenced an assessment of the proposal," the company said in a statement.
The indicative price of the offer would be reduced if dividends or other distributions were paid, it added, so really it is the usual cheapskate offer from private equity based bidders.
The bidding group includes Australia and New Zealand focused private equity firm BGH Capital Fund, Australian pension fund AustralianSuper, a unit of Singaporean sovereign wealth fund GIC and Canada Pension Plan Investment Board, among others.
Healthscope is the country’s second biggest private hospital operator.
It was relisted in 2014 after being owned by private equity groups TPG and Carlyle for a number of years from 2010.
The listing price was $2.10 valuing the company at $3.6 billion and the shares soon topped $3 by March 2015 and topped out at $3.11 in April 2016.
Since then earnings downgrades starting in October 2016 and worries about its performance have seen the shares drift south to bottom out around $1.60 in August of 2017.
If this group is successful in buying control of Healthscope, nothing much will change - to cash out they will have to float the shares in a few years time.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.