(Reuters) – Private equity firm CVC Asia-Pacific is in talks with Kohlberg Kravis Roberts & Co [KKR.UL] about joining KKR’s $1.5 billion bid for Healthscope (HSP.AX), two sources familiar with the situation said
“At this stage they are not together, but it is highly likely they will be,” a source, speaking on condition of anonymity due to the confidential nature of the subject, told Reuters on Tuesday.
A second source said CVC had indicated it would join KKR, which is doing due diligence on Healthscope, Australia’s second-largest hospital owner/
A private equity bidding war for Healthscope erupted on Monday when KKR and another unnamed firm — reported by Australian media as U.S-based Tenet Healthcare Corp (THC.N) — made two separate offers, both valuing Healthscope at A$1.84 billion ($1.54 billion).
The Monday offers topped a May 14, A$1.74 billion offer from a private equity consortium of Blackstone Group LP (BX.N), TPG and Carlyle Group.
Healthscope has not named the bidders.
Spokespeople for Healthscope and private equity firm KKR declined to comment. A spokesman for CVC did not return a call seeking comment.
CVC already owns Australia’s largest private diagnostic imaging business, which it bought as DCA Group in 2006 and has renamed I-MED.
Healthscope has an in-hospital radiology business, which analysts said could offer synergies with I-MED.
Australia’s ageing population and a government push to increase private health insurance are benefiting healthcare firms in the country, and the interest in Healthscope from four of the world’s biggest private-equity groups highlights the attractiveness of the business.
At 0556 GMT, Healthscope shares traded 1.5 percent higher at A$5.57, while the broader market .AXJO was down 0.6 percent.
KKR is being advised by Morgan Stanley.
Macquarie MQG.AX) and Credit Suisse <CSGN.VX are advising the TPG and Carlyle consortium, while Blackstone is being advised by UBS (UBSN.VX).
Healthscope is being advised by Goldman Sachs JBWere and Lazard. (Additional reporting by Michael Smith) (Reporting by Victoria Thieberger; editing by by Balazs Koranyi)