- IHH Healthcare is weighing a bid for Healthscope Ltd, which could be worth at least AUD$5 billion (RM14.8bil), according to a Bloomberg report.

- Healthscope is Australia’s second-largest private health-care provider owned by US private-equity owners, TPG Capital and Carlyle Group LP.

- TPG and Carlyle have put on hold plans for an initial share sale of Healthscope and will start taking bids in April.

- Healthscope’s operating company without its hospital properties could be valued at AUD$4 billion, as quoted by Bloomberg.

- TPG and Carlyle bought Healthscope for AUD$2.7bil in 2010.

- Healthscope operates over 4,500 in-patient beds across 33 hospitals, 4 dedicated mental health hospitals and 4 rehabilitation facilities in Australia.

- Healthscope also manages 3 hospitals on behalf of the ACHA Group in South Australia and runs pathology centres in Australia, New Zealand, Malaysia and Singapore.

- Currently, Ramsay Health Care Ltd is Australia’s largest private healthcare operator.

- Should this deal materialises, IHH would then penetrate into new mature markets, namely Australia and New Zealand. This would also intensify its average revenue per in-patient admission.

- IHH has sufficient debt-room given a net gearing of 13% as at end-FY13.

- Our EPS estimates remain unchanged at this juncture.

- We are maintaining our HOLD recommendation on IHH with an unchanged fair value of RM3.60/share, based on a sum-of-parts valuation. 

Source: AmeSecurities