KKR Bidding Alone for Australia’s Healthscope

MELBOURNE (Reuters) – Private equity firm Kohlberg Kravis Roberts & Co [KKR.UL] said on Friday that CVC Asia-Pacific has decided not to join KKR’s $1.5 billion bid for Healthscope (HSP.AX), which is Australia’s biggest private equity bid since 2008.

CVC had been in discussions with KKR about joining the offer for Healthscope, Australia’s second-largest hospital owner with 43 hospitals representing 15 percent of the private hospital market. It also has the country’s third-largest pathology business.

“KKR maintains a strong interest in Healthscope and continues through the process. We are bidding alone,” a spokesman for the private equity group told Reuters by telephone.

Healthscope is the subject of a bidding war from private equity firms, having received an earlier May 14 offer from a consortium of Blackstone Group LP (BX.N), TPG [TPG.UL] and Carlyle [CYL.UL]. 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.

Both bidders are conducting due diligence on Healthscope, which is due to be completed in mid-July.

But U.S. hospital operator Tenet Healthcare Corp (THC.N) earlier this month pulled out the bidding, citing the premature disclosure of non-public information on its interest that had sent its shares down 17 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.

(Reporting by Victoria Thieberger; Editing by Ed Davies)