Healthscope receives two takeover bids worth A$1.84bn

Both the new proposals are of A$5.80 per share, 10.9 percent more than the Healthscope's closing price on Friday.

Headquartered at Melbourne, Healthscope is the second largest hospital in Australia and runs 44 private hospitals with large pathology business in Australia, New Zealand, Singapore and Malaysia and increasing medical centres all over the country.

Bids received by Healthscope
On May 14, the company had received an indicative and non-binding proposal of A$5.50 per share from the consortium.

On May 24, Healthscope again received a revised, indicative and non-binding proposal of A$5.75 from the consortium. The company granted due diligence by consortium.

Since the May 28 bid, the company has refused to unveil the names of the bidding companies but said that the bid was superior or equal to the consortium offer received.

“The Board considers that at this time the interests of shareholders will be best served by a formal process to thoroughly evaluate whether a change of control offer, at a price and on terms that the Board would recommend, can be secured,” --- Healthscope.

Potential bidders for the Australian based company
Though the company abstained to name the bidders for the takeover but The Australian Financial Review said that Kohlberg Kravis Roberts (KKR), the U.S. based private equity firm, may bid for the offer at A$6 per share.

According a source acquainted with the matter, the consortium bidding for takeover on Healthscope includes U.S. based Blackstone Group LP, TPG Capital (Texas Pacific Group) and Carlyle Group.

Healthscope said, “The Healthscope Board, together with its advisers, has considered these proposals using the same criteria as it used to assess the Consortium’s proposal and has formed the view that each is equal to or superior to the Consortium’s proposal.

“The Board has therefore concluded that these parties will, subject to negotiation of appropriate confidentiality agreements, also be granted the opportunity to conduct due diligence."

Healthscope's strong growth
Since the takeover announcement on May 14, the stocks of the company have surged 22 percent on the Australian Stock Exchange.

As per Reuters, three analysts have valued Healthscope's between A$5.80 and A$ 6.70 if the company breaks its hospitals and pathology arms.

The company said, “The Board considers that at this time the interests of shareholders will be best served by a formal process to thoroughly evaluate whether a change of control offer, at a price and on terms that the Board would recommend, can be secured.

“In order to ensure that any process operates as quickly and effectively as possible the Board does not intend to make any further announcements unless and until a recommended offer is secured, or unless there is a development which it judges should be disclosed immediately."

“This process will take several weeks."

If the bid is successful, then it will be the largest private equity bid in Australia, since 2008.

“If it does not, the Board believes that Healthscope has a very attractive independent future and that the Company is well positioned to continue to deliver strong growth,” the company added.