New $4.1b move on hospital giant

SHARES in Healthscope soared almost 20 per cent after the nation’s biggest super fund teamed up with a private equity in a $4.11 billion takeover bid for the private hospital giant.

Healthscope rejected a similar bid by the same suitors, AustralianSuper and private equity company BGH Capital, only five months ago.

In revealing the bid, the hospital company — which operates the Hobart Private and St Helen’s Hospital in Hobart — said the “proposal is substantially the same as the proposal” that was rejected on May 22.

Also in May, Healthscope rejected an offer from Canada’s Brookfield Asset Management.

The private hospitals operator said both bids undervalued the company despite facing headwinds which saw the closure of some hospitals.

Healthscope yesterday said it would again look at AustralianSuper-BGH offer.

“The Healthscope board will assess the proposal and will keep the market informed of any material developments in accordance with its continuous disclosure requirements,” the board said.

“There is no certainty that the proposal will result in a transaction.”

The Healthscope board is chaired by Paula Dwyer, who is also chairman of Tabcorp, and a director of ANZ.

Like the previous proposal, the price offered for each share is $2.36, though the Healthscope share price has fallen since the first offer was made in April.

When the offer was first made on April 24, it was a 16 per cent premium to the share price. Based on Monday’s close of $1.78, the offer yesterday reflected a 30 per cent premium.

The share price rocketed 19.33 per cent yesterday, to close at $2.13.

The leap in the share price added $600 million to Healthscope’s market value, meaning it is now valued at $3.7 billion.

Another development in the bid is Ellerston Capital’s support for the board to further explore the offer.

Ellerston — which is chaired by longtime Kerry Packer confidant Ashok Jacob — owns 9.38 per cent of Healthscope shares.