01/02/2019 - 09:38

Healthscope agrees $4.5bn Brookfield buyout

01/02/2019 - 09:38

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Healthscope has agreed to a $4.5 billion takeover by Canadian investment firm Brookfield, despite rival bidders suggesting they could increase their offer.

Healthscope agrees $4.5bn Brookfield buyout
Healthscope owns Mount Hospital near Perth's CBD.

Healthscope has agreed to a $4.5 billion takeover by Canadian investment firm Brookfield, despite rival bidders suggesting they could increase their offer. 

Australia's second largest private hospital operator announced on Friday it had entered an implementation deed with Brookfield by way of a scheme of arrangement for $2.50 per share, a deal unanimously backed by the Healthscope board. 

The company also noted rival suitor BGH Capital said it was willing to improve on last year's rejected takeover bid of $2.36 per share, if it were provided access to due diligence.

Healthscope did not say whether BGH had said by how much it would have raised its bid, but confirmed its deal with Brookfield, which also owns the Dalrymple Bay Coal Terminal in Queensland and Australian real estate company Thakral Group. 

The Brookfield offer, which represents a 40 per cent premium to the $1.785 price prior to its announcement, is not subject to financing or due diligence.

"It is our view that the Brookfield transaction is attractive and will realise significant value for our shareholders," Healthscope chairman Paula Dwyer said.

Healthscope's sole, major Western Australian asset is the Mount Hospital, which is located near the Perth CBD.

With 224 patient-beds, Mount is one of the largest private hospitals in Perth.

In 2015, Healthscope sold its Australian pathology division to Crescent Capital Partners.

Two years later, Healthscope sold its medical centres portfolio to Singapore-based Fullerton Healthcare.

Healthscope shares edged another 3 per cent higher to $2.43 in early trade on Friday.

The company in August posted a 50 per cent drop in FY18 net profit to $75.8 million, hit by an onerous lease provision for a private hospital in Victoria, as well as an impairment charge and hospital closure costs.

Its shares were trading above $3 in 2016.

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