Three months after using debt to buy a UK private healthcare group for just over $1 billion, Ramsay Healthcare has been made a $1.8 billion offer for its Asian hospital joint venture that, if accepted, will offer to replenish those reserves and give it the option of also making a capital return to shareholders.
Ramsay bought Elysium Healthcare Ltd, Britain’s largest private group of mental healthcare hospitals after losing a larger, $1.7 billion bid for a large private hospital operator called Spire. Spire shareholders effectively rejected the offer after failing to approve it by the required margin.
Ramsay completed the Elysium deal in early February and said it would be “funded from Ramsay’s existing debt facilities.”
Now the non-binding offer for the Asian businesses offers Ramsay a chance to reset its debt and do some sort of capital return.
Ramsay Sime Darby is a 50/50 joint venture with Malaysia’s Sime Darby Holdings and operates hospitals in Malaysia, Indonesia and Hong Kong.
Ramsay told the ASX on Tuesday that it had received a non-binding offer for the business from Malaysian private hospital operator IHH Healthcare that values the company at $US1.3 billion ($1.8 billion).
“Having reviewed the indicative proposal, Ramsay and Sime Darby Holdings have agreed to a period of exclusivity for four weeks when due diligence commences,” the company said in a statement.
“The discussions between Ramsay, SDH and IHH are preliminary and no agreement has been reached in relation to the Indicative Proposal. There is no guarantee that an agreement will be reached in respect of the Indicative Proposal or that a transaction will eventuate,” Ramsay said in Tuesday’s statement.
Ramsay Sime Darby contributed $135 million in earnings to the company’s earnings in the six months to December 2021.
Ramsay shares jumped 1.2% to $64.10.
