TPG, Carlyle Group Said to Lead KKR in Takeover Bidding for Healthscope

A group including Carlyle Group andTPG Capital will be named the preferred private-equity bidderfor Healthscope Ltd., the Australian hospital operator thatreceived takeover offers of A$1.8 billion ($1.56 billion) inMay, three people familiar with the matter said.

Healthscope plans to make a statement to the Sydney stockexchange today, the people said, declining to be identifiedbecause the details are private. The company is also consideringa rival offer from KKR & Co., which was bidding alone, two ofthe people said.

Buying Healthscope would grant the winner access to theexpanding Australian market for private health care.Healthscope, whose profit growth has averaged 36 percent in thepast nine years, is spending more than A$240 million adding 583hospital beds and 24 operating theaters in the country.

The company, Australia’s second-biggest hospital owner,last month gave bidders access to its accounts after receivingcompeting proposals. It asked for final bids by July 16.

Kate Inverarity, an external spokeswoman for Healthscope,declined to comment. Sue Cato, head of Cato Counsel, whichrepresents the Carlyle and TPG consortium, declined to comment.Ian Smith, a spokesman for KKR in Adelaide, also declined tocomment.

Carlyle’s group in May offered A$5.75 for each Healthscopeshare, valuing the company at A$1.82 billion, people familiarwith the matter have said. KKR was behind a A$5.80-per-shareapproach later that month, another person familiar with thematter said. Blackstone LP pulled out of the Carlyle biddinggroup last week because it couldn’t agree on pricing, Reutersreported on July 15.

Hospital Revenue

Healthscope fell 0.2 percent to A$5.40 in Sydneytrading on Friday. On May 14, the shares surged 17 percent, itsbiggest one-day gain in almost a decade, after Healthscope saidit received a buyout offer.

Goldman Sachs JBWere Pty and Lazard are advisingHealthscope.

Private hospital revenue in Australia climbed an averageof 7.9 percent annually to A$8.98 billion in the five yearsended June 2009, the Australian Institute of Health and Welfaresaid June 17.

One in two Australians have hospital policies, and healthinsurance coverage in the country reached a 27-year high inMarch, Health Minister Nicola Roxon said in May.

Healthscope owns or operates 44 hospitals in Australia,including the Prince of Wales Private Hospital in the easternsuburbs of Sydney and Melbourne Private Hospital on the fringeof the city’s central business district, according to itswebsite. It also runs a pathology chain in Australia, NewZealand, Malaysia and Singapore.