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Healthscope is the focus of a possible bidding war
Posted on Monday, 14 May 2018 12:52
Brookfield Asset Management is upping the ante on bids for Healthscope by trumping an earlier proposal for the Australian private hospital operator with an AUD 4.35 billion offer (USD 3.28 billion).

The unsolicited, non-binding indicative approach has sent the rumour mill into overdrive with speculation the potential entry by the Canadian investor could spark a battle.

It comes just weeks after a consortium led by pension fund Australian Super and BGH, a private equity group created by Ben Gray, Robin Bishop and Simon Harle last year, made an offer valued at AUD 3.51 billion.

This group also includes heavyweights like Canada Pension Plan Investment Board, Ontario Teachers’ Pension Plan Board, and the Singapore sovereign wealth fund, GIC.

Cited by Reuters, Morningstar healthcare analyst Chris Kallos said: “The entry of Brookfield adds to bidding tension and (I) expect the BGH-AustralianSuper consortium will most likely increase its offer bid.”

The recent pretender to the Healthscope throne has offered AUD 2.50 apiece, being a premium of 23.0 per cent to the hospital operator’s unaffected closing price on 24th April.

Brookfield, in an attempt to circumvent the fact AustralianSuper is already a significant shareholder with a 14.5 per cent stake and is likely to reject a rival proposal, has set a “level playing field condition”.

The stipulation requires that Healthscope does not grant any possible acquiror, including the BGH consortium, access to due diligence unless said party confirms it is not under any agreement or understanding to vote any shares already owned or controlled against a superior proposal unanimously recommended by the company’s board.

Brookfield has tried to sweeten the pill by providing existing stockholders with an opportunity to invest and receive a “significant minority position” in the privatised company.

Regardless, a takeover by either consortium would represent the largest acquisition of an Australian hospital operator on record, according to Zephyr, the M&A database published by Bureau van Dijk.

© Zephus Ltd