IHH Healthcare Bhd., Asia’s biggest hospital operator, dropped plans to bid as much as A$5 billion ($4.6 billion) for Australian health-care provider Healthscope Ltd., said people familiar with the matter.
IHH’s interest waned as Healthscope’s owners, TPG Capital and Carlyle Group LP, veered toward an initial public offering that may raise as much as A$4 billion, said the people, asking not to be identified as the details are private. The buyout firms are in talks with sovereign wealth funds and other buyers to act as so-called cornerstone investors in the share sale, which may take place as early as July, one of the people said.
TPG and Carlyle are studying sale options for Australia’s second-largest private hospital operator, including an IPO or trade sale and splitting off the company’s property assets to sell them separately, people familiar with the matter said March 11. The owners haven’t made a final decision yet on whether to pursue an IPO and could still weigh offers for the business, the person said today.
IHH, 44 percent owned by Malaysia’s sovereign wealth fund Khazanah Nasional Bhd., has been expanding through acquisitions to benefit from rising demand for medical services in emerging markets. It bought Singapore’s Parkway Holdings Ltd. in 2010 and completed the purchase of a 60 percent stake in Acibadem Saglik Hizmetleri & Ticaret AS, Turkey’s largest hospital group, in 2012, according to data compiled by Bloomberg.
A spokeswoman for TPG and Carlyle declined to comment. IHH said in an e-mailed statement it doesn’t comment on specific transactions.
IHH runs 33 hospitals as well as medical centers, clinics and other health-care businesses across nine countries including Vietnam, India and China, its website shows. The company’s shares have rallied 35 percent since its July 2012 IPO in Kuala Lumpur.
Healthscope operates 44 hospitals including the Prince of Wales Private Hospital in Sydney and Melbourne Private Hospital, according to its website. It also runs pathology centers in Australia, New Zealand, Malaysia and Singapore.
The two U.S. private equity firms bought Healthscope for A$2.7 billion in 2010, beating KKR & Co. to what was then was Australia’s biggest buyout in eight years. Ramsay Health Care Ltd. is the country’s largest private hospital operator.