Australia’s second-largest private hospital operator is at the centre of a bidding war after Canada’s Brookfield Asset Management joined the contest for Healthscope with a $4.35 billion offer.
Brookfield Asset Management’s bid is larger than the $4.11 billion on the table from a consortium comprised of private equity firm BGH Capital and superannuation funds.
But BGH and its backers, which include AustralianSuper, could frustrate Brookfield’s ambitions after buying a 14.5 per cent stake last month to become Healthscope’s largest shareholder.
Brookfield’s indicative proposal is worth $2.50 per share, which represents a 23 per cent premium to the share price prior to the BGH Capital-AustralianSuper bid of $2.36 per share.
Healthscope says Brookfield has asked for a “level playing field” condition under which BGH would confirm it won’t vote against a superior proposal unanimously recommended by the Healthscope board.
“Brookfield also requires that any other potential acquirer is not granted access to due diligence on terms which are materially superior to those granted to Brookfield,” a statement by Healthscope said.
The Australian newspaper has reported that BGH as saying it will “reject, vote down and not accept” the Brookfield proposal.
Comment has been sought from BGH.
Any buyer would also take on Healthscope’s debt, which stood at $1.68 billion at December 31.
Healthscope said it is not certain that either proposal would result in a transaction and has advised shareholders to take no action.
Shares in Healthscope were up 10 cents, or 4.1 per cent, at $2.58 at 1525 AEST.
The company said Brookfield has indicated it plans to provide existing Healthscope shareholders with an opportunity to invest alongside Brookfield in a privatised Healthscope, which may result in existing shareholders holding a significant minority position.
Brookfield is a global alternative asset manager with around $US285 billion in real estate, private equity, infrastructure and renewable power assets.
It is already involved in the construction and management of hospitals in Australia through its Multiplex and Global Integrated Solutions businesses.