DataRoom AM: Healthscope scope-out

Several offshore suitors look to be interested in acquiring Healthscope, while BG Group gears up for a major infrastructure sell-off.

The private equity owners of Healthscope are expected to receive substantial offers for the hospital operator amid a dual-track sales process ahead of an early May deadline. But given the success of new healthcare listings on the ASX, a float may still be the best exit option.

Elsewhere, BG Group readies for a major infrastructure sell-off, the Queensland government looks to raise cash without travelling the privatisation route and Pepper Australia raises $500 million in unconventional fashion.

The Carlyle Group and TPG are edging closer to a decision on plans to divest local hospital and pathology giant Healthscope, with bids for the firm’s operating and property assets due on May 5. Several offshore companies are believed to have flagged interest in Healthscope as a whole as well as just the property assets. UBS is running the sale of property assets, while Macquarie Capital heads the process for divesting the operating side of the business.

One name commonly mentioned is US-based HCA Holdings, though the Wall Street Journal reports that bids close to $5 billion are also tipped to be forthcoming from Malaysian and Chinese interests.

With Healthscope’s owners looking to cover all possible options for an exit, a float remains on the table should trade offers fall short of expectations. The prospects for an IPO received a boost last week with Japara Holdings the latest healthcare company to rise sharply upon listing.

In resources, BG Group has kicked off negotiations with potential suitors in $4bn worth of gas pipelines, according to The Australian Financial Review. A formal sales process for infrastructure related to the Curtis Island LNG project is expected to begin in earnest later this month.

The list of possible buyers includes APA Group, a consortium led by Industry Funds Management and a team of investors headed by Hastings Funds Management. The full catalogue of interested parties will crystallise upon completion of the hotly contested sale of Queensland Motorways.

The strong interest in Queensland Motorways has greatly pleased the state government, with Queensland Premier Campbell Newman believed to be pressing ahead with plans to auction debt in the state’s electricity networks as a result. The offer will be made to private investors of the ilk chasing Queensland Motorways, the AFR said.

Non-bank lender Pepper Australia has successfully raised $500m via the issuance of non-conforming residential mortgage-backed securities. It is the largest such deal in Australia since the GFC and was backed by 14 local and seven offshore investors. Commonwealth Bank and National Australia Bank served as joint lead managers.

Also raising money is private equity firm Pacific Equity Partners, which has secured $1.1 billion from overseas partners as it readies to again go on the acquisition trail. According to the AFR, PEP has also put the wheels in motion on a listing of cinema operator Hoyts, with a divestment tipped for early 2015.

Finally, fund manager PM Capital is seeking up to $200m for a new listed investment company, its second in just five months.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles