Healthscope Ltd share price up 4% after receiving a bigger takeover offer

The Healthscope Ltd (ASX: HSO) share price could get a boost today after the private hospital operator received a higher offer.

A couple of weeks ago Healthscope received an offer from a consortium led by AustralianSuper and BGH. That offer was for $2.36 cash per share.

Today, Healthscope announced that it has received an unsolicited, non-binding indicative proposal from Brookfield Asset Management Inc. Brookfield is a global asset manager with around US$285 billion of assets, it’s listed in Toronto, New York and Amsterdam.

The offer is $2.50 per share, which represents a premium of 23% to Healthscope’s closing share price of $2.03 on 24 April 2018.

One of the main discussion points with the first offer was that AustralianSuper, which is already a large shareholder, said that it would vote down any other offers – even if there were bigger offers. The Brookfield offer is bigger, at around 5.9% higher than the first offer.

Interestingly, Brookfield has indicated that it intends to provide existing Healthscope shareholders with an opportunity to invest alongside Brookfield in a privatised Healthscope, which could allow existing shareholders to hold a “significant minority position”.

The Brookfield proposal is also subject to a number of conditions. However, one of the conditions is the satisfaction of a “level playing field condition”. This condition essentially requires that Brookfield and its offer will be treated as equal to any other offers and bidders.

Foolish takeaway

The Healthscope Board is now assessing both offers. Healthscope said that shareholders don’t need to take any action, but I’d bet all Healthscope shareholders are hoping this bidding war continues.

A 23% increase in the share price in a few weeks is good, so it could be worth considering selling shares at this point.

If you do sell your shares then you should consider one of these top stocks which could grow strongly over the coming years.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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