Malaysia - Khazanah Said to Bid $900 Million for Turkish Hospital Stake

Khazanah Nasional Bhd., Malaysia’s state investment company, offered more than $900 million for a majority of Turkey’s largest hospital chain, Acibadem Saglik Hizmetleri & Ticaret AS (ACIBD), according to two people with knowledge of the offer.

Integrated Healthcare Holdings Sdn, controlled by Khazanah, will buy 60 percent of Acibadem from Abraaj Capital Ltd., and Khazanah will buy another 15 percent, the people said, asking not to be identified ahead of an agreement, which may be signed today.

Khazanah has spent $3.7 billion on acquisitions of health- care services providers since 2005, according to Bloomberg data. In July 2010, Khazanah offered S$3.5 billion ($2.7 billion) for the 76.1 percent of Singapore’s Parkway Holdings Ltd. it didn’t already own, beating New Delhi-based Fortis Healthcare Ltd. to Asia’s biggest hospital operator.

Khazanah Managing Director Azman Mokhtar couldn’t be immediately reached for comment when phoned at his office in Kuala Lumpur today. Dubai-based Abraaj couldn’t be reached outside of normal business hours.

Mehmet Ali Aydinlar, chairman of Acibadem Saglik Yatirimlari Holding AS, also known as Almond Holding AS, which controls 92 percent of Acibadem Saglik Hizmetleri & Ticaret AS, couldn’t be reached by telephone. His office in Istanbul said he is traveling.

Market Value

Acibadem shares fell 0.4 percent to 23.70 lira, giving the company a market value of 2.37 billion lira ($1.26 billion). A 75 percent stake is valued at $945 million, based on yesterday’s closing price. Khazanah didn’t offer a significant premium because the Turkish company’s shares have surged 88 percent this year, one person said.

Integrated Healthcare and Acibadem on Sept. 30 entered into a non-binding agreement to explore a joint partnership with the intention of creating an international partnership, according to a statement at the time. Three people with knowledge of the talks said last month that Khazanah may buy a stake in Acibadem.

Integrated Healthcare may raise as much as $2 billion in an initial public offering next year, according to people with knowledge of its plans. Its Parkway Pantai Ltd. (PWAY) unit runs 16 hospitals in Singapore, Malaysia, India and Brunei, and Integrated Healthcare also owns a stake in India’s Apollo Hospitals Enterprise Ltd. (APHS)

Abraaj’s Stake

Abraaj, the biggest private equity firm in the Middle East and North Africa, bought the Acibadem stake for about $606 million in 2007 and 2008. Abraaj has a 46 percent stake in Almond Holding, according to data compiled by Bloomberg.

Turkey’s growing health-care industry has attracted international investors including Carlyle Group, the world’s second-largest private-equity firm, which bought 40 percent of hospital operator Medical Park Saglik Grubu AS for $150 million in 2009. Asia Debt Management Capital of Hong Kong, PGGM NV and the World Bank’s International Finance Corp. agreed to buy a 26 percent stake in Turkish hospital chain Universal Saglik Yatirimlari Holding AS for $140 million in May.

The Khazanah offer was earlier reported by the Nikkei newspaper, which said the value of the transaction is around $650 million. Mitsui & Co. (8031), Japan’s second-biggest trading company, owns 30 percent of Integrated Healthcare.

Joyce Koh, Barry Porter and Elffie Chew

Bloomberg

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