The Motley Fool

Healthscope Ltd shares rise on takeover speculation

One of the best performers on the local share market today has been the Healthscope Ltd (ASX: HSO) share price.

At lunch the private hospital operator’s shares have defied the market decline and pushed higher by 3% to $1.95.

Why are Healthscope’s shares on the rise?

With no news out of the company, today’s share price rise is likely to be attributable to renewed speculation that the company is a takeover target.

According to The Australian, private equity firms BGH Capital and Bain Capital are believed to be interested in launching a takeover of Healthscope.

Whilst these are just rumours, I wouldn’t be surprised if BGH Capital, which was founded by former TPG Australia head Ben Gray and Simon Harle, was interested in Healthscope.

After all, Mr Gray and Mr Harle jointly led TPG’s previous investment in the private hospital operator and made a healthy profit on the deal.

TPG, along with the Carlyle Group, paid $2.7 billion for Healthscope in 2010 before offloading it through an IPO valued at $3.6 billion four years later.

But these two private equity firms may not be the only potential bidders. Wesfarmers Ltd (ASX: WES) has previously been touted as a potential buyer of Healthscope. Considering the sizeable war chest that the Coles demerger will provide the conglomerate with, I wouldn’t be too surprised if it was keeping a close eye on developments.

Should you buy Healthscope shares?

Healthscope has been a potential takeover target numerous times over the last couple of years and nothing has ever materialised, so I wouldn’t necessarily expect anything this time around.

Because of this, I would suggest investors continue to avoid the private hospital operator until its performance improves.

Until then, healthcare shares such as Cochlear Limited (ASX: COH) and ResMed Inc. (ASX: RMD) could be far better options.

Alternatively, these high-flying growth shares could be even better investment options.

3 Growth Shares You Need To Watch in April

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2018."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended Cochlear Ltd. and ResMed Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

NEW. Five Cheap and Good Stocks to Buy in 2019…

Our Motley Fool experts have just released a brand new FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.8% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.