Healthscope’s takeover suitor Brookfields is looking to cut a deal with fellow Canadian property company NorthWest Healthcare Properties Real Estate Investment Trust, according to the Australian Financial Review.

According to Healthscope’s latest statement on the matter, Brookfields was supposed to have a fully-funded and binding offer for Healthscope on the table by today when its due diligence period ends, but no announcement has been forthcoming as yet.

Brookfields is hoping to get the support of Healthscope’s board to take that company over via a scheme of arrangement, which would need the support of 75 percent of Healthscope shareholders voting on the matter to succeed.

Brookfields has suggested a A$2.585 per share price if its offer is via a scheme of arrangement or, if that fails, a A$2.455 per share takeover offer which would need at least 90 percent of Healthscope shareholders to accept to succeed.

Its offer is dependent on it securing debt finance and jittery markets before Christmas led to speculation that might not be possible.

NorthWest owns the manager of the New Zealand-listed Vital Healthcare Property Trust from which it has borrowed A$81 million to buy 13.4 percent of ASX-listed Healthscope, making it the second largest shareholder.

Another would-be Healthscope suitor, a consortium led by AustralianSuper, which owns just over 19 percent of Healthscope, said late last year that it’s able to commence due diligence immediately on its own non-binding offer to acquire Healthscope for A$2.36 per share.

Incidentally, AustralianSuper has its own Canadian connection because it has two Canadian pension plans in its consortium.

That’s the effective price NorthWest and Vital paid for their stake via derivative arrangements so Vital investors will no doubt be pleased to know that Healthscope shares are currently trading at A$2.38, well off their low at A$2.02 on Dec. 19 after the NorthWest purchase.

The AFR says if Brookfields can ink a deal with NorthWest, likely to buy some of NorthWest’s properties, that could be a way of lowering its funding requirements.

NorthWest has made no secret of its desire to buy some of Healthscope’s properties in concert with Vital, although Vital’s unitholders made their displeasure at NorthWest’s plans plain at the Dec. 20 AGM.

Leave a comment