Board members for the Australian hospital corporation Healthscope have recommended that shareholders accept a $2.3 billion takeover bid from a U.S.-based private-equity consortium made up of the Carlyle Group and TPG Capital.
Healthscope board backs Carlyle-TPG deal
The recommendation ends two months of speculation over which of the initial three purchase offers Healthscope—which owns 44 private hospitals and pathology labs in Australia, Malaysia, New Zealand and Singapore—would accept. “The board has concluded that the consortium's proposal provides the best outcome for Healthscope shareholders, both in terms of value and associated terms and conditions,” according to a company news release.
In mid-May, Healthscope acknowledged that it was reviewing buyout offers, but did not reveal the names of the potential buyers. News reports, however, identified the potential buyers as Tenet Healthcare Corp.; a consortium consisting of the private-equity firms Kohlberg Kravis Roberts & Co. and CVC Capital Partners; and a consortium consisting of the Blackstone Group, the Carlyle Group and TPG Capital. Under shareholder pressure, Tenet quickly withdrew its bid. Later, news reports said that CVC and Blackstone also withdrew as members of their competing consortiums.
The cash and debt offer from Carlyle and TPG represents a 39% premium over Healthscope's May 13 closing share price—a day prior to the announced offers. The deal is subject to Healthscope shareholder approval and customary regulatory review.
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