Healthscope gets revised $4.5bn offer from Brookfield
Canadian giant Brookfield has launched a revised $4.5bn offer for private hospital operator Healthscope, trumping a rival bid.
Healthscope has opened its books to Canada’s Brookfield after the private equity giant made a revised, $4.5 billion play for the private hospital operator, trumping a rival offer already on the table.
Healthscope (HSO) says Brookfield’s new offer beats one it had rejected earlier this year, and is worth as much as $2.585 per share — more than the $2.36 offered last month by private equity firm BGH Capital and AustralianSuper.
Brookfield’s two-pronged bid aims to secure at least 50.1 per cent of Healthscope scrip with an off-market bid at $2.455 a share, including a 3.5c-a-share Healthscope dividend.
But Brookfield has added a 13c-a-share sweetener - worth $240 million in total - taking the total price to $2.585 a share, if the owners approve a scheme of arrangement that would give Brookfield 100 per cent of the company.
At 11.10am (AEDT), Healthscope shares were up 10.6 per cent at $2.30.
It comes after Healthscope said it had decided not to grant due diligence access to the consortium of BGH and Healthscope’s biggest shareholder AustralianSuper, which resubmitted its bid at the end of October, offering $2.36 a share.
Brookfield originally offered $2.50 a share in May but was blocked by the refusal of AustralianSuper to break its agreement with BGH, the new private equity fund led by former TPG Australia head Ben Gray.
Both bids are conditional on Healthscope not completing a plan to spin off its property assets, which was conceived by management in response to the original, rejected bids earlier this year.
“We consider the Brookfield proposal to be attractive for shareholders,” Healthscope chairman Paula Dwyer said in a statement today.
“It is superior to the BGH-AustralianSuper proposal and provides enhanced certainty.”
AustralianSuper, with 19.9 per cent of the company, has previously said it would not support a superior, rival proposal because it wanted to retain a direct ownership stake in a privately-held Healthscope, as would occur under the BGH proposal.
Brookfield’s offer includes an option for shareholders to retain a direct equity stake in an unlisted Healthscope, but only if it secures outright control through the scheme of arrangement, which requires approval by 75 per cent of shareholders voting.
Brookfield will have access to due diligence through to Christmas with a scheme meeting expected to be scheduled for April 1.
The date is one day after the exclusive bidding partnership between BGH and AustraliaSuper is due to expire.
Healthscope operates a portfolio of more than 40 hospitals in Australia and 24 pathology laboratories in New Zealand. In May, it closed two hospitals in southern Australia and in July it sold its Asian pathology division for $279 million.
Founded in 1985 and initially listed on the Australian Securities Exchange in 1994, Healthscope was bought in late 2010 by a consortium managed by TPG and the Carlyle Group. It was again listed on the ASX in mid-2014.
with AAP, Dow Jones
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