Three left in the running for day hospital operator Cura Group

The field for the contest to buy day hospital company Cura Group has been narrowed down to three.

Three parties are now understood to have been shortlisted in the second round of the contest to buy day hospital company Cura Group.

Two of the parties are believed to be Intermediate Capital Group and Partners Group, both competing strongly for the business.

Out of the race are believed to be Ramsay Health Care and Morgan Stanley Infrastructure Partners, it is thought Pacific Equity Partners was also unlikely to have gone through.

Other unknowns are groups such as QIC and Medibank.

Binding offers are due in to adviser Citi early next month.

Cura, owned by Fresenius, is understood to generate about $42m of annual earnings before interest, tax, depreciation and amortisation from its 19 assets and has been identified as non-core.

The German company purchased a 70 per cent stake in the nation’s largest day hospital owner in 2017 from Intermediate Capital for a price believed to value it at more than $400m.

The departure of the sale process by Ramsay comes as it nears a deal to sell the Ramsay Sime Darby Health Care venture in Malaysia to either a TPG Capital-led or Affinity Equity Partners-led consortium, both of which are shortlisted bidders.

TPG Capital controls hospital operator Columbia Asia and the understanding is that Ramsay could announce the outcome of the sale at its annual general meeting on November 28.

Ramsay owns the Sime Darby Health Care business in a 50-50 joint venture with Malaysia multinational conglomerate Sime Darby.

It includes four hospitals in Malaysia and three in Indonesia.

Analysts are valuing Ramsay Health Care’s stake at $750m-$800m after tax.

Working for Sime Darby is investment bank JPMorgan.

In March last year, the joint venture received an offer from IHH Healthcare to buy the business for $US1.33bn, but a deal never eventuated.

Working on the sale are Bank of America and Deutsche Bank.

The business made about $426m of revenue and $98m of earnings before interest, tax, depreciation and amortisation in the year to June, up 16 per cent on the previous corresponding period, with higher volumes and lower Covid-19-related expenses including staff absenteeism.

The equity accounted contribution from the joint venture increased 30.1 per cent on the previous corresponding period to $19.9m.