PETALING JAYA: Private healthcare provider IHH Healthcare Bhd is one of four parties eyeing a stake in India’s CARE Hospitals Group, sources said.
The interested parties are believed to have been in talks in the past month with CARE Hospitals’ present stakeholder, United States-based private equity firm Advent International.
“The talks have touched on the pricing of the deal and given that the potential new shareholders have buying power, they also want to exercise their bargaining power in some sense,” a source said.
“Bargaining could intensify moving forward, given that such assets command a premium today. How much of a premium that is willing to be paid will be the factor that will sway the deal in either direction,” another source added.
Reuters reported that US-based Carlyle Group may also consider buying Advent International’s 72% stake in CARE Hospitals for US$250mil-US$300mil (RM889.67mil-RM1.07bil).
Sources also told the wire agency that the deal was expected to be concluded in the next few months.
In a reply to StarBiz, an IHH spokesperson said that it was not appropriate for it to comment on any specific transaction, and that it will update the market should there be any material developments moving forward.
“IHH is always looking at various value-accretive opportunities to add to the company’s portfolio,” the spokesperson said.
Should IHH eventually acquire a part or the entire stake, it would be the third inorganic entry into the world’s second-most populous country after it had bought 51% in India-based Continental Hospitals Ltd for RM166.73mil last month.
IHH also has a 10.85% interest in India-based Apollo Hospitals Enterprise Ltd.
The company was earlier said to also have been interested in acquiring a stake in Thailand-based Bangkok Dusit Medical Services Pcl and Malaysia-based Mahkota Medical Centre.
Dealers say that recent acquisitions by IHH into other healthcare companies have sparked interest in the stock and its resilience is seen despite a somewhat weak market sentiment.
Some analysts have, however, maintained a cautiously optimistic stance on such deals, as the market seems to be aware that these deals are being transacted on premium valuations.
“There could be a little cautious approach among some companies towards pricier deals nowadays, as healthcare valuations are at the upper range at present.
“But there seems to be appetite for IHH’s stock and value-adding deals are usually welcomed by the market even though the market may seem tired at times,” a healthcare analyst said.
CARE Hospitals, which was founded in 1997, operates 16 hospitals in nine Indian cities today.
IHH’s shares bucked the weak market sentiment to close two sen higher at RM6 yesterday, with 9.3 million shares changing hands.
source:The star