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Why Healthscope Ltd shares are storming higher today

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

At the time of writing the private hospital operator’s shares are up approximately 4% to $2.50.

Why are Healthscope’s shares on the rise?

This morning Healthscope revealed that NorthWest Healthcare Properties REIT (NWH) has acquired a 10% interest in the company.

According to the release, NWH acquired the interest at a price of $2.39 per share by way of a derivative with Deutsche Bank.

This is 3 cents per share above the unsolicited and conditional acquisition proposal the company received from the BGH Consortium last month.

Today’s release goes on to explain that: “An acquisition of Healthscope’s underlying hospital related real estate is of interest to NWH and Vital Healthcare Property Trust (Vital) in line with their long term strategy to invest in healthcare real estate assets in the Australasian market. NWH and Vital currently intend to pursue any potential Healthscope real estate acquisition jointly, with scope to introduce other capital partners as appropriate.”

What is NorthWest Healthcare Properties REIT?

NorthWest Healthcare Properties is a Canadian listed real estate investment trust with a focus on high quality healthcare real estate assets.

Its diversified portfolio of 149 income-producing properties and 10.1 million square feet of gross leasable area are found across the world.

According to the AFR, the REIT is expected to tell both Healthscope and the BGH Consortium that it is willing to work with either party to invest in Healthscope’s property portfolio.

What now?

This certainly throws a spanner into the works but could ultimately be a big positive for shareholders that held on during the takeover talks.

It also appears to have given the Ramsay Health Care Limited (ASX: RHC) share price a lift as well today. Its shares are up over 1% in morning trade.

I would suggest investors keep their powder dry and wait for the situation to develop further.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care Limited. 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.

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