Rumours are swirling that a major healthcare provider will soon be going to auction, with ASX big-wig Wesfarmers Ltd (ASX: WES) mentioned as a potential buyer.
The Wesfarmers share price has fallen slightly on the news. At the time of writing, Wesfarmers shares are $57.79 – 0.56% lower than their closing price yesterday.
The broader market isn’t fairing much better today. Currently, the S&P/ASX 200 Index (ASX: XJO) is down 0.24%.
Let’s take a look at the rumours surrounding the diversified conglomerate today.
Rumours of a major acquisition
According to The Australian, investment banks claim Wesfarmers is in the running to purchase Australia’s largest cancer care provider, Icon Group.
If it were to go ahead, Wesfarmers’ acquisition of Icon Group would be its first foray into the healthcare sector.
In a recent research report, Goldman Sachs noted Wesfarmers has been eyeing new acquisitions.
According to The Australian, Icon Group will likely sell for more than $2 billion.
Headquartered in Brisbane, Icon Group has expanded its business from Australia to Singapore, Hong Kong, China, and New Zealand.
The group was formed in 2015. It was purchased by a consortium including Goldman Sachs Principal Investment Area, Queensland Investment Corporation, and Pagoda Investments in 2017. The purchase reportedly cost the consortium $1.2 billion.
Last night, The Australian reported global buyout fund Brookfield, unnamed Canadian pension funds, and New Zealand’s infrastructure investor Morrison & Co are also in the running for the acquisition. Previously, the publication has claimed Ramsay Health Care Limited (ASX: RHC) is a contender for the purchase.
Goldman Sachs and Jefferies Australia are said to be heading the sale which will reportedly go ahead in July or August.
Wesfarmers share price snapshot
The Wesfarmers share price has been performing well on the ASX lately.
Currently, shares in Wesfarmers are about 12% higher than they were at the start of this year. They have also gained almost 32% since this time last year.
The ASX giant has a market capitalisation of around $65.9 billion, with approximately 1.1 billion shares outstanding.