Healthscope lifts on debut

The private hospital operator, Australia’s biggest IPO in four years, gains a healthy 2 per cent.

Healthscope, Australia’s biggest IPO in four years, rose 2% on its first day of trading on Monday

In the opening minutes of trade,  Healthscope shares briefly dipped to $2.09 from an issue price of $2.10 but by 1251 AEST was up 4 cents at $2.14, outperforming a flat broader market.

The IPO raised almost $2.26 billion from the sale of 1.07 billion of shares with a final price set at the higher end of the price range of $1.76 and $2.29, nearly 22 times forward earnings which represents a slight discount to larger rival Ramsay Healthcare.

Healthscope has been seeking to raise as much as $2.6bn, but even at $2.26bn this is the biggest float to hit the ASX since the $4bn listing of rail freight company Aurizon – then called QR National -- in 2010.

Vendors TPG and Carlyle decided to retain a 38 per cent stake in the company, a big chunk “reflecting their strong support for the company and its prospects,” Healthscope said. Cornerstone investors, including Blackrock and AMP Capital and a Malaysian fund, have been allocated at least half of the $1.7 billion of demand following a well-covered book build, while retail investors get about $800 million.

Healthscope is Australia’s second-largest private hospital operator with 40 hospitals nationally and has a market capitalisation of about $3.64bn.

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