Malaysia's IHH eyes stake in Bangkok Dusit Medical Services
Malaysia-based IHH Healthcare is believed to be looking at acquiring an 11.5-per-cent associate stake in Bangkok Dusit Medical Services (BDMS), the largest hospital operator listed on the Stock Exchange of Thailand, to gain a foothold in Thailand, sources
It is understood that the acquisition could be funded by a combination of cash and the issuance of new shares.
The 11.5-per-cent stake in BDMS has a market value of Bt30.64 billion based on the last closing price of the company’s shares at Bt17.20.
IHH has a market capitalisation of 39.26 billion ringgit (Bt366.2 billion) on Bursa Malaysia, while it is valued at 15 billion Singapore dollars (Bt371 billion) on the Singapore Exchange.
The acquisition will be funded internally and externally, the quantum of which will be determined later by the company.
“IHH has been wanting to gain an entry into Thailand, and this move would give it an instantaneous exposure to the country. Acquisition of an entire stake can take longer and will be more tedious in regulatory terms,” the source said.
“The IHH brand name is well recognised, especially since its successful IPO [initial public offering], and this acquisition will help it solidify its presence in Asia,” he added.
Analysts said the acquisition made sense as the baht had been strengthening in the past year against the ringgit and Singapore dollar.
“The healthcare sector excels on both fronts of being defensive in nature as earnings are backed by a growing exposure to insurance-based clients, and they can be viewed as growth companies as well,” said MIDF Research healthcare analyst Ahmad Annuar Rahman.
The purchase of the Thai asset could be a catalyst for the stock moving forward, he added.
BDMS share price gained 4.65 per cent yesterday on reports that Malaysia's hospital group IHH Healthcare is acquiring an 11 per cent stake in the Thai listed firm.
At the close, the company's share price gained Bt0.80 to Bt18. The number of shares changing hands skyrocketed to 42 million, the highest since December 15 when 53 million shares changed hands.
