SYDNEY — Healthscope Ltd., Australia’s second-largest private hospital operator, yesterday said its board has unanimously recommended a $1.72 billion takeover offer from US private equity firms Carlyle Group and TPG Capital.
Healthscope operates 44 private hospitals and has pathology facilities in Australia, New Zealand, Singapore, and Malaysia. Carlyle and TPG have offered $5.42 a share for Healthscope, which the Melbourne-based company said represents a 39 percent premium to its $3.90 share price of May 13 — the day before the company said it had received a proposal.
Based on the company’s 317 million shares outstanding, the purchase price would total about $1.72 billion. Including debt, the company values the deal at $2.3 billion.
On Monday, Healthscope shares rose 10 percent to $5.15.
“Whilst the board is of the strong belief that the company is well positioned to continue to deliver strong growth for shareholders into the future, the board determined that the relative certainty delivered by this cash offer at a substantial premium was in the best interests of Healthscope shareholders,’’ Healthscope chairwoman Linda Nicholls said.
Healthscope said the offer price would be reduced by any future dividends it pays to shareholders before the deal is complete. The transaction still requires Healthscope shareholder, court, and regulatory approvals.
The agreement ends a bidding process that had included multiple companies.
Healthscope said May 14 that a private equity consortium had offered $4.74 a share for the company, and days later that bid was raised to $4.98 per share. By the end of the month, Healthscope had received two additional offers, each totaling $5.02 per share.
Media reports have identified one of the bidders as the US private equity firm Kohlberg Kravis Roberts & Co. US hospital operator Tenet Healthcare Corp. in June dropped out of the bidding after it said information about its discussions with Healthscope were made public prematurely.