HCA Holdings leads Healthscope race

America's largest healthcare company in pole position with $5bn bid for hospital owner.

America's largest healthcare company, HCA Holdings, has emerged as the frontrunner in the trade sale of Healthscope with a $5 billion bid for the hospital operator and owner.

Executives in HCA are rumoured to have been in self-congratulatory mode in recent days after apparently learning they had beaten out rival bidders for Healthscope, including Kosun from China and IHH out of Malaysia.

HCA, or Hospital Corporation of America, is the largest hospital operator in the world. The $23bn company owns and operates about 165 hospitals and 115 freestanding surgery centres in the US and Britain.

Representatives from HCA’s head office in Nashville did not respond to inquires ahead of deadline as rumours swirled that its executives were already in Australia working on the final stages of the deal.

But sources said the US group should “hold on to their horses” as Healthscope’s owners, TPG and The Carlyle Group, were still considering whether they could rake in more money from an IPO of the hospital operator and owner.

A well-placed source said a deal would not be announced until the end of the month, perhaps even early June.

HCA’s interest comes as TPG and Carlyle, which bought into Healthscope in 2010 for $2.7bn, consider a range of options to exit the business.

The private equity owners were considering several alternatives to the sale including selling the operating business, which has an estimated value of $3bn, and the company’s $1.2bn property portfolio separately.

The sale process of Healthscope has attracted a host of domestic bidders, too. Names bandied around include Wesfarmers, which is rumoured to be weighing up a $3bn offer for the operating business.

On the property side, Lend Lease, GPT and IHH affiliate Parkway Life REIT are believed to have made offers for the portfolio of hospitals and healthcare clinics.

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