Healthscope directors back takeover bid from Canada
PRIVATE hospital operator Healthscope has swung its support behind a $4.5 billion takeover offer from Canadian investment firm Brookfield.
Directors at Healthscope have backed the Brookfield bid despite rival bidders suggesting they could increase their offer.
Healthscope, Australia’s second biggest private hospital group, announced yesterday it had struck a deal with Brookfield, agreeing to a takeover through a scheme of arrangeproduct ment at $2.50 a share.
The also company noted rival suitors BGH Capital and AustralianSuper said they were willing to improve on last year’s rejected takeover bid at $2.36 a share if they were allowed to scrutinise Healthscope’s books.
Healthscope did not reveal whether the BGH-AustralianSuper consortium had indicated how much it would offer.
Brookfield also owns the Dalrymple Bay Coal Terminal in Queensland and Australian property developer Thakral.
The Brookfield offer is at a 40 per cent premium to the $1.785 price Healthscope shares were trading at before BGH and AustralianSuper made their approach last October. It is not subject to financing or due diligence.
In a statement, Healthscope chair Paula Dwyer said that “having fully considered a range of alternatives, the board unanimously concluded that the Brookfield transaction is in the best interests of our shareholders”. “It is our view that the Brookfield transaction is attractive and will realise significant value for our shareholders,” Ms Dwyer said
The company in August reported a 50 per cent drop in full-year net profit to $75.8 million, hit by an onerous lease provision for the Frankston Private Hospital, as well as an impairment charge and hospital closure costs. Its shares had been trading above $3 in 2016.
The deal — subject to the backing of shareholders and court and regulatory approvals — is expected to be wrapped up next quarter.