Healthscope Ltd. received two additional takeover offers that value Australia’s second-biggest hospital owner at A$1.84 billion ($1.6 billion) and top a bid by Blackstone Group LP (BX) and its partners.
The new proposals, both of A$5.80 a share, are 11 percent above Healthscope’s May 28 closing price. The board considers the offers to be at least equal to an earlier A$5.75-a-share bid, the Melbourne-based company said in a statement today. Last week, Blackstone joined TPG Capital and Carlyle Group in bidding for Healthscope, according to a person familiar with the matter.
Healthscope, where profit has grown an average of 36 percent over the past nine years, said it’s allowing the new bidders to review its financial accounts. Selling the pathology business and putting its hospitals in a real estate fund could value the shares at as much as A$7 each, UBS AG said.
“A breakup makes most sense,” said Andrew Goodsall, a health-care analyst at UBS in Sydney, in a phone interview today. Healthscope’s managers “are solid operators,” he said. “If there’s earnings upside to be had, they would have had it.”
Healthscope shares advanced 5 percent to A$5.49 in Australian trading, a two-year high. The S&P/ASX 200 Index slipped 0.6 percent.
The stock has climbed 22 percent on the Australian stock exchange since a takeover approach was announced on May 14. Concern among investors that the deal may not proceed is preventing the shares rising further, said John Hester, a health-care analyst at Linwar Securities Ltd. in Sydney.
“These are non-binding offers,” Hester said in a phone interview today. “There’s potential for these bids to all fall over. If I was a significant holder, I’d certainly be looking to reduce my position.” Hester rates the stock “market perform.”
Kohlberg Kravis Roberts & Co. may make a bid for Healthscope tomorrow, the Australian Financial Review said today, without saying where it got the information. KKR may bid with another firm and offer about A$6 a share, the newspaper said.
Healthscope, being advised by Goldman Sachs JBWere Pty and Lazard Ltd., hasn’t given the names of any of its bidders. One may be a U.S.-based private hospital operator being advised by Citigroup Inc., the Australian Financial Review said in a separate report today, without identifying the company or saying where it got the information.
Private hospital groups in Australia, including Healthscope’s larger rival Ramsay Health Care Ltd. (RHC), are benefiting from increasing demand from an aging population and government measures aimed at boosting private coverage. Uptake of health insurance reached a 27-year high in March and one in two Australians have hospital policies, Health Minister Nicola Roxon said this month.
Healthscope owns or operates 43 hospitals in Australia, including the Prince of Wales Private Hospital in Sydney’s eastern suburbs and Melbourne Private Hospital on the fringe of the city’s central business district. It also runs the Gribbles pathology chain in Australia, New Zealand, Malaysia, Singapore and Mauritius.
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