State investor Temasek Holdings from Singapore and buyout firm KKR KKR.N are among the suitors who have advanced to the second round of an auction to buy into Metro Pacific Investments Corp’s hospital unit < MPI.PS >, sources informed Reuters.
The unit, which runs 14 hospitals, many of which are among the Philippines ‘ biggest and most modern, attracted interest from over a dozen investors.
Investors regard Southeast Asia – home to a big amount of fast-growing businesses – as an appealing Last month, Metro Pacific announced plans to sell up to $2.5 billion (2.02 billion pounds) of a minority stake in its unit, which could make it the largest healthcare deal in the country. prospect owing to powerful healthcare expenditure.
Buyout company CVC and strategic investors are among the bidders, the sources said, who are familiar with the issue.
Bidders value the hospital unit up to $2 billion, pegging its valuation to the projected key profit of just over 20 times next year as they seek a majority financial stake in it, the sources added on condition of anonymity as the talks are private.
Sources said the main strategy of the Philippine conglomerate is to take external institutional investors into the hospital chain despite last week’s IPO implementation.
The source further said that the Metro Pacific expects a transaction to be completed before the end of the year and an M&A remains the fundamental assumption. If the bid is not up to the expectation, then IPO gives the company a second chance.
The group possesses about 85.6% stake in the hospital unit, shares that the funds will help minimize the debt and support the hospital groups ‘expansion.
Sources expect international bidders to partner with local businesses.
Singapore’s sovereign wealth fund GIC, which purchased a 14.4% stake in the hospital unit in 2014 and has the choice of boosting its holding through an exchangeable bond, is open to parking its stake, sources said. Commentary declined by GIC.