Brookfield may launch rival Healthscope bid

A bidding war could soon begin for Healthscope, with speculation mounting that the Canadian private equity firm Brookfield could be mulling a rival offer for the country’s second-largest private hospital operator.

Already on the table is a $2.36 per share bid from Ben Gray’s BGH Capital, which values the company at $4.1 billion.

But it is now understood that investment bankers are trying to drum up a rival offer behind the scenes.

Property groups are understood to be eager to partner with an operator to bid for the company but fear they may not have enough time to pull a consortium together. Brookfield is understood to have been eager to enter the healthcare space for some time and would be more than capable of dealing with the property assets, given that it is a major owner of high-profile real estate assets in Australia.

Shares yesterday closed at $2.43, which suggests that the market is betting that another offer will eventuate.

Alternatively, BGH Capital and its superannuation fund backers may have to sweeten the deal.

The challenge for any rival bidder is that Australian Super has already committed to back the BGH Capital offer, which it is part of. BGH Capital is the fund founded by former TPG Capital Australian managing director Ben Gray and his offsider Simon Harle, along with the former head of investment banking at Macquarie, Robin Bishop.

The latest bid is subject to several conditions, including that the Healthscope board unanimously recommend that shareholders back the deal, and the understanding is that the board could be taking its time with respect to offering a recommendation.

The board may be waiting until next week when the group is likely to update the market on its April results.