Tuesday, June 12, 2012

IHH Healthcare locks in cornerstones for IPO

On the IHH IPO, it seems that I may be wrong based on the news by Reuters below. However, notice that no price indication is mentioned but it did say 2.2 billion shares are on offer representing 25% of its enlarged capital with 80% new shares. Am I seeing it being valued at RM20 billion? Is it really possible? As a comparison KPJ is at RM3.66 billion.

As I said, I prefer to be wrong in this one than being right.
(Reuters) - Blackrock Inc, Capital Group and Och-Ziff Capital Management Group have emerged as cornerstone investors in the $2 billion listing of Malaysia's IHH Healthcare Bhd, according to two sources with direct knowledge of the flotation.

The other cornerstone investors are Singapore sovereign wealth fund Government of Singapore Investment Corporation, Fullerton Fund Management, AIA Group and Hwang Investment Management, the sources said.

The dual listing of IHH, slated to debut on the Malaysian and Singapore bourses by the end of July, comes at a time when a string of initial public offerings have been delayed or scrapped because of investor worries about Europe's debt crisis and China's slowing economy.

"The profile of the cornerstone investors will give the IPO some boost in confidence," said one of the sources, who declined to be identified as the talks were confidential. "In good or bad times, it (the IPO) will still do well. It (IHH) operates in a defensive sector."

IHH is the healthcare arm of Malaysia's state investor Khazanah Nasional Bhd. Its assets include Turkish hospital group Acibadem AS, Singapore's Parkway Holdings, India's Apollo Hospitals Enterprise Ltd and Malaysia-based Pantai Hospitals and International Medical University.

It is offering 2.2 billion shares, out of which 80 percent will be new shares while the remaining secondary. The sale amounts to some 25 percent of its enlarged capital. "The cornerstones will take 1.3 billion out of the 2.2 billion shares available," said the second source, declining to elaborate.

IHH officials were not immediately available for comment.

The dual listing would be the fourth-biggest IPO in Singapore's history and Malaysia's second-largest this year after the planned listing of Malaysian plantation group Felda Global Venture Holdings Bhd. International Financial Corp, a member of the World Bank Group, has said it plans to take part in the IHH listing in a move to help validate IHH's emerging markets strategy. Reuters reported earlier that IHH was also in talks with Kuwait's sovereign wealth fund on becoming a cornerstone investor.

Malaysia's pension fund and Prudential Plc's Eastspring Investments have committed to invest in the IPO.
State-owned fund manager Permodalan Nasional Bhd and the Haj Pilgrims fund are also investors, according to the sources.

Malaysia has bucked the IPO trend in other markets such as Singapore, where motor racing firm Formula One decided to postpone its near $3 billion offering due to volatile markets.

Shares of Gas Malaysia Bhd closed 10 percent higher on their debut on Monday after a $230 million listing, overcoming the negative sentiment surrounding a slump in global market flotations.

CIMB, Bank of America Merrill Lynch and Deutsche Bank are joint lead co-ordinators, while Credit Suisse, DBS, Goldman Sachs and Maybank  are joint bookrunners. Nomura, OCBC and UBS are co-lead managers.

Other article on IHH IPO.

IHH IPO: Where's the beef?

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