Healthscope Ltd., Australia's second-largest private hospital operator, said Monday its board has unanimously recommended a 2 billion Australian dollar ($1.72 billion) takeover offer from U.S. private equity firms Carlyle Group and TPG Capital.
Carlyle and TPG have offered AU$6.26 a share for Healthscope, which the Melbourne-based company said represents a 39 percent premium to its AU$4.50 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 1.98 billion Australian dollars ($1.72 billion). Including debt, the company values the deal at 2.7 billion Australian dollars ($2.3 billion).
Healthscope said the offer price would be reduced by any future dividends it pays to shareholders before the deal is complete.
"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 Chairman Linda Nicholls said in a statement.
The deal still requires Healthscope shareholder, court and other regulatory approvals.
Healthscope operates 44 private hospitals and has pathology facilities in Australia, New Zealand, Singapore and Malaysia.
The agreement ends a bidding process that had included multiple companies.
Healthscope said May 14 that a private-equity consortium had offered A$5.50 per share for the company, and days later that bid was upped to A$5.75 per share. By the end of the month, Healthscope had received two additional offers, each totaling A$5.80 per share.
Media reports have identified one of the offers as having been from U.S. private equity firm Kohlberg Kravis Roberts & Co. U.S. hospital operator Tenet Healthcare Corp. in June dropped out of the bidding after it said information about its discussions with Healthscope was made public prematurely and caused its share price to tumble.