Brookfield's $3.3 Billion Healthscope Bid Aims to Outgun BGH

(Bloomberg) -- Brookfield Asset Management Inc. offered A$4.35 billion ($3.3 billion) for Australian hospital operator Healthscope Ltd., topping a bid from private equity firm BGH Capital.

The Canadian asset manager offered A$2.50 a share in cash, Healthscope said Monday. That’s 23 percent more than the stock price on April 24, before BGH’s offer was disclosed. Healthscope said it will assess both bids.

Click here for a breakdown of the offer

Healthscope on Monday jumped above the level of Brookfield’s offer, suggesting investors expect a bidding war. New York-listed Brookfield, with $285 billion of assets, is attempting to outgun Australian buyout firm BGH, which was set up only last year by former Macquarie Group Ltd. and TPG Capital executives.

BGH and investors including AustralianSuper have offered A$2.36 a share in cash. BGH’s combination with Australia’s biggest pension fund gave it a toehold in Healthscope: AustralianSuper owns about 14 percent of the hospital operator and has agreed not to sell any of its shares to a rival bidder or vote in favor of a competing proposal.

Barring Condition

Brookfield aims to neutralize the advantages of that tieup. As a condition of its offer, Brookfield wants rival suitors barred from due diligence if they’ve agreed to use their Healthscope shares to vote against any superior offer unanimously backed by Healthscope’s board.

Shares of Healthscope climbed 3.9 percent to A$2.57 at 11:07 a.m. in Sydney.

Brookfield's $3.3 Billion Healthscope Bid Aims to Outgun BGH

Before suitors emerged, Healthscope shares had tumbled 35 percent from a September 2016 high of A$3.14. The company runs 45 hospitals in Australia, and has pathology operations across New Zealand, Malaysia, Singapore and Vietnam, according to its website.

According to Healthscope, Brookfield has also indicated it plans to give existing Healthscope shareholders the chance to invest in a privatized Healthscope and own a “significant minority position” in the company.

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