Investment banks queue for Ramsay contract

Ramsay’s largest shareholder is The Paul Ramsay Foundation, which owns 19 per cent.

The contest is believed to be on among investment bankers to assist Ramsay Health Care in exploring ways it can boost shareholder returns, as expectations mount that it will sell its $3bn European operation.

So far, the names being connected to it are Goldman Sachs, Macquarie Capital and UBS, although the understanding is that Ramsay Health Care is yet to formally appoint an investment bank for the work.

Yet sources say the company has recently established that buyers are interested buyers in its French hospital operator, Ramsay Sante.

If the business is not sold for the right price, Ramsay may consider an in-specie distribution for the European arm.

At the same time, sources say that some work is being undertaken by the company to assess upside opportunities of surplus land at its hospital sites in Australia.

Sources say that Ramsay would likely engage a real estate agent for such work.

A number of private equity firms are currently active in the healthcare space in Europe, with Advent International and The Carlyle Group said to be looking at German medical centre operator Sanecum Group, which is owned by Adiuva Capital and reportedly for sale through JPMorgan.

Some analysts believe there is the potential for a private equity firm to build a pan-European hospital operator through a series of acquisitions, including that of Ramsay Sante.

Although with different healthcare regimes across the countries, it may be too complex.

Previously, it was thought that Ramsay could extract a price of about €1.8bn for the Ramsay Sante business.

Shares in Ramsay rallied last month when it said it would continue to review the business in the context of shareholder returns and it was actively assessing a range of strategies to unlock value and drive improved performance.

DataRoom reported in September that investors were lobbying the board, now led by David Thodey, for a restructure after suitor Kohlberg Kravis Roberts walked away from an initial proposal to buy the business in 2022 for $88 a share – or $20bn.

Ramsay’s largest shareholder is The Paul Ramsay Foundation, which owns 19 per cent.

Ramsay first purchased hospitals in France in 2010.

It owns 52.3 per cent of Ramsay Sante, the second largest private care provider in Europe and based in France.

Ramsay Sante has 443 hospitals, clinics, primary care and imaging centres across Europe.

Major equity holders of Ramsay Sante, listed on Euronext Paris, are Predica with almost 40 per cent, and Credit Agricole group’s personal insurance subsidiary.

Long term, Ramsay’s prospects are strong, with a growing ageing population.

However, in the short term, healthcare providers are facing cost pressures with staff shortages.

Ramsay reported a 286 per cent increase in its net profit for the six months to December to $758.5m.

During the period it received $938.4m in gross proceeds from the sale of its Sime Darby asset in Asia which were used to pay down debt.

Ramsay said earnings before interest and tax of $512.3m, down 4.7 per cent, reflected an improved result from Australia and strong growth in the UK region, offset by a decline in earnings from Ramsay Sante.