There’s a takeover battle for private hospital operator Healthscope which yesterday received its second takeover in a couple of weeks, this time from a Canadian investment group.
Healthscope said it received a $4.35 billion proposal from Canada’s Brookfield Asset Management, $240 million more than a bid from private equity firm, BGH and AustralianSuper (Healthscope’s biggest shareholder) offered it in April.
That isn’t a firm offer, merely one of those tentative indicative offers designed to feel out the situation and try and get due diligence.
The $2.50-a-share offer is at a 1.2% premium to Healthscope’s last close on Friday, and a 23.2% premium to its closing price before it received the $4.11 billion offer from the BGH led group.
Healthscope shares jumped more than 4% to close at $4.58 yesterday. That small premium to the latest offer price indicates the market reckons BGH or someone else might lodge a higher offer.
But BGH and its backers, which include AustralianSuper, will be able to frustrate Brookfield’s ambitions with a 14.5% stake last month to become Healthscope’s largest shareholder.
Healthscope says Brookfield has asked for a “level playing field” condition under which BGH would confirm it won’t vote against a superior proposal unanimously recommended by the Healthscope board.
"Brookfield also requires that any other potential acquirer is not granted access to due diligence on terms which are materially superior to those granted to Brookfield," a statement by Healthscope said.
Media reports claim BGH will “reject, vote down and not accept” the Brookfield proposal.
Canadian real estate trust, Canadian landlord NorthWest Healthcare Properties last week took a strategic investment in Healthscope as part of a plan to buy its real estate i the wake of the BGH offer.
NorthWest said had bought an interest in Healthscope through a derivative transaction. The $A416 million deal gives it 10.1% of the voting rights at the Australian company.
That would make NorthWest the second-biggest voting block at Healthscope, behind AustralianSuper, which is part of the BGH bid. What happens now that brookfield, another Canadian group, has launched its play remains to be seen.
Healthscope’s $1.68 billion debt at December 31 is also a burden for the moment while it spends heavily to complete a big new private/public hospital in Sydney’s northern suburbs. The NSW government is expected to shortly pay around $650 million to Healthscope for the public part of the facility.. Healthscope said it is not certain that either proposal would result in a transaction and says shareholders should take no action.
The company said Brookfield has indicated it plans to provide existing Healthscope shareholders with an opportunity to invest alongside Brookfield in a privatised Healthscope, which may result in existing shareholders holding a significant minority position.
Brookfield is a global alternative asset manager with around $US285 billion in real estate, private equity, infrastructure and renewable power assets. Brookfield has interests in rail, ports, coal transport, building and construction in Australia.
