IHH
Healthcare Bhd. (IHH), Asia’s biggest hospital operator, raised 6.3 billion
ringgit ($2 billion) in the world’s third-largest initial public offering this
year, three people with knowledge of the matter said.
IHH sold shares at 2.80 ringgit
apiece in the Kuala Lumpur and Singapore IPO, said the people, who asked not to
be identified as the pricing isn’t public. The company had marketed the stock
at 2.67 ringgit to 2.85 ringgit. Institutional investors sought more than 100
times the stock available to them, two people said.
With IHH’s sale overtaking Banco
BTG Pactual SA’s April IPO,Malaysia accounts
for two of this year’s three largest first-time offerings, data compiled by
Bloomberg show. Felda Global Ventures Holdings Bhd. (FGV), the Malaysian
palm oil producer whose IPO raised $3.3 billion last month, has risen 24
percent from its offer price, helping spur enthusiasm for IHH’s sale.
“Malaysia probably lacks this
sort of new quality name coming to the market, so obviously there’s quite a bit
of clamoring when they do arrive,” said Abdul Jalil Abdul Rasheed, who oversees
$3 billion as chief executive officer of Aberdeen Islamic Asset Management Sdn.
in Kuala Lumpur.
“In a market where other IPOs are pulling out, this is a massive success.”
Facebook Inc.’s IPO was this
year’s biggest deal at $16 billion. Shares in the owner of the world’s largest
social- networking service dropped 19 percent since the listing, drawing
criticism of lead IPO manager Morgan Stanley.
Most Expensive
IHH, controlled Malaysia’s state
investment company Khazanah Nasional Bhd., reserved 62 percent of its offering
for 22 so-called cornerstone investors. They include Malaysian and Singapore
state-linked funds as well as companies such as Blackrock Inc.
(BLK) and AIA Group Ltd., according to the IPO prospectus. Cornerstone
investors agree to hold the stock for a minimum time period in return for
guaranteed allocation.
The group has more than 4,900
beds in hospitals in Asia and Turkey under brands
including Gleneagles and Parkway, with 3,330 more beds planned over the next
five years, according to the sales document. IHH is poised to benefit from
increased medical tourism to the region, aging populations and rising wealth in Southeast Asia, the
company says.
The fair value of IHH’s shares is
2.98 ringgit with “limited upside,” Public Investment Bank Bhd. said in a
report on July 6. At the top end of its indicative range, the company’s
price-to-earnings ratio would have been about 67 times estimated 2012 profit,
making it one of the most expensive health care stocks in the world, the
brokerage said.
Joining Benchmark
U.S. hospital operator HCA Holdings
Inc. (GCA) trades at 7.8 times projected 2012 earnings, while South Africa’s Life Healthcare
Group Holdings Ltd. (LHC) is valued at 21 times, according to data
compiled by Bloomberg.
With an initial market
capitalization of as much as 23 billion ringgit, IHH is expected to join the
benchmark FTSE Bursa Malaysia KLCI Index on August 1, a week after its July 25
trading debut, FTSE International Ltd. said last week. Felda is also expected
to join the index in its next reshuffle.
The gauge closed at an all-time
high yesterday, buoyed by resilient domestic demand and development spending in
Southeast Asia’s third-biggest economy,
including construction of a subway in Kuala Lumpur.
Joyce Koh and Elffie Chew
Business & Investment Opportunities
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