Australia's Healthscope Ltd on Monday recommended a $1.73 billion takeover offer from private equity firms TPG and Carlyle following a bidding war for the nation's second-largest hospital owner.
TPG and Carlyle's offered A$6.26 a share, worth A$1.99 billion ($1.73 billion), a 16 percent premium to Healthscope's close on Friday and 39 percent above the share price in May, before Healthscope first said it had been approached.
The higher-than-expected offer trumped a rival bid from Kohlberg Kravis Roberts & Co which also submitted a final offer for Healthscope on Friday.
After careful consideration, the Board has unanimously concluded that the consortium's offer provides shareholders with an excellent opportunity to realize considerable value from their investment in Healthscope, Chairman Linda Nicholls said in a statement.
The deal is conditional on shareholder, court and Foreign Investment Review Board approval.
The buyout is the biggest private equity deal in Australia since 2007, before the global financial crisis and surge in funding costs stifled activity.
KKR in May lodged an indicative bid at A$5.80 a share, while TPG and Carlyle lifted an earlier bid to A$5.75 a share in May.
Healthscope said the bid, including debt, valued the company at A$2.7 billion.
The health care sector is hotly sought after for growth in Australia, where the population in expanding and aging, and the government is pushing patients to use private healthcare.
A separate $573 million offer is pending for rival Sigma Pharmaceuticals .
In Asia, bidders are also fighting over Singapore hospital operator Parkway , which has attracted competing offers from Malaysian state investor Khazanah and India's Fortis Healthcare .
Healthscope owns 43 hospitals, representing 15 percent of Australia's private hospital market, and is the country's third-largest pathology business.
Goldman Sachs JBWere and Lazard advised Healthscope on the deal.
(Reporting by Michael Smith; editing by Balazs Koranyi)