By Robb M. Stewart
MELBOURNE, Australia--Brookfield Asset Management is set to acquire Healthscope Ltd. (HSO.AU) after the Australian private-hospital operator's board agreed to support a takeover bid valuing the company at 4.38 billion (US$3.18 billion).
The offer will include a special dividend paid by the healthcare company after it struck a deal to sell a portfolio of hospitals to investors including NorthWest Healthcare Properties REIT (NWH.UN.T), which last year considered its own bid for Healthscope's real estate.
In a statement Friday, Healthscope Chairman Paula Dwyer said the board concluded a deal with Brookfield was in the best interests of shareholders and it would recommend investors accept an offer of A$2.50 a share, including a dividend payout, or an alternative off-market bid at A$2.40 a share.
The unanimous backing of Healthscope's directors would see the Canadian wealth manager beat out a rival cash offer from consortium led by BGH Capital, though the private equity firm has written to the healthcare company to say it could improve the terms of its bid if it were allowed due diligence access to Healthscope's books.
Suitors have been vying for one of Australia's biggest operators of private hospitals and its property portfolio since BGH and partners including pension-savings fund AustralianSuper teamed up to lob a nonbinding offer last April.
Healthscope operates 43 hospitals, runs a pathology business in New Zealand and has a team of more than 18,000 employees. In May, it closed two hospitals in southern Australia and in July it sold its Asian pathology division for A$279 million.
On Friday, Healthscope said it had agreed to sell 22 properties for about A$2.5 billion and would lease them back. Proceeds from the sale would help fund the special dividend, with the bulk of the takeover offer coming from Brookfield. Shareholders will have the option of cash worth A$2.50 a share or an equity interest in a new unlisted company that would be controlled by Brookfield.
Half of the hospitals will be picked up by Medical Properties Trust and the rest by NorthWest, which last year picked up a 10% stake in Healthscope and has agreed to vote in favor of Brookfield's offer.
The deal remains subject support from at least 50.1% of Healthscope's shareholders.
Founded in 1985 and initially listed on the Australian Securities Exchange in 1994, Healthscope was bought in late 2010 by a consortium managed by TPG and the Carlyle Group. It was again listed on the ASX in mid-2014.
The company's shares briefly spiked above A$2.50 after it was approached by BGH and then Brookfield, but traded under A$2.40 since late May. They rallied 3.4% to A$2.44 in early trading Friday.
Write to Robb M. Stewart at email@example.com