IHH Healthcare raises over RM5b
WORLD'S THIRD LARGEST IPO: Healthcare operator prices shares at RM2.80 apiece
IHH Healthcare Bhd, the largest hospital operator in Asia, has raised over RM5 billion after the company priced its shares at RM2.80 apiece.
IHH, via filings to Bursa Malaysia Bhd, said it had fixed the cornerstone, institutional and final retail price for its concurrent listing on Malaysia and Singapore bourses at RM2.80, which is at the upper end of the indicative range of RM2.67-2.85 per share. This was done after the completion of the bookbuilding process.
"We are delighted with the response that the IHH IPO has received. We believe it underscores the strength and quality of our offering, as well as the depth of investor interest in the opportunities we present. We would also like to thank all our investors for their support," managing director Dr Lim Cheok Peng said in a statement issued yesterday.
At RM2.80 per share, IHH will have a market capitalisation of RM22.5 billion. This will make IHH the second largest listed healthcare provider after HCA Holdings Inc, a US-based hospital operator. HCA has a market capitalisation of about US$12.25 billion (RM39 billion).
The RM6.25 billion initial public offer (IPO) exercise will involve the offer for sale of 434.65 million existing shares and public issue of 1.8 billion new shares. It is also the world's third largest IPO this year, after Facebook and Felda Global Ventures Holdings Bhd.
IHH will raise RM5.03 billion from the IPO and is expected to use about 90.9 per cent, or about RM4.6 billion, of the gross proceeds to repay bank borrowings within 12 months of listing. The remaining will be used for working capital, general corporate purposes, as well as listing expenses.
Earlier, Dr Lim said that IHH will also use part of the proceeds to raise hospital beds by another 3,300 within the next three years and expand the number of hospitals by another 17. IHH is expected to be listed on July 25.
Khazanah Nasional Bhd has a 62 per cent stake in IHH. Post-listing, its stake will be reduced to 47.78 per cent.
With the listing, IHH will join KPJ Healthcare Bhd, Raffles Medical Group, Bangkok Dusit Medical Services and India's Fortis Healthcare to be among major listed Asian healthcare providers. Public Investment Research has placed a fair value of RM2.98 on IHH shares.
"We used a sum-of-parts (SOP) approach, assigning individual growth rates and EV/Ebitda multiples to each country. We believe SOP valuation is justified as we do not foresee major synergies to be achieved across the group, with the bulk of operational costs being incurred in the respective countries," Public Investment Research said in its recent report.
Meanwhile, in a separate statement, it was announced that CIMB Investment Bank Bhd, as the stabilising manager, has over-allocated 169.43 million shares and may effect transactions that may stabilise or maintain the market price of the shares at levels that might not otherwise prevail in the open market.
"Such transactions consist of bids or purchases to peg, fix or maintain the price of the IHH shares," said CIMB.
IHH Healthcare Bhd, the largest hospital operator in Asia, has raised over RM5 billion after the company priced its shares at RM2.80 apiece.
IHH, via filings to Bursa Malaysia Bhd, said it had fixed the cornerstone, institutional and final retail price for its concurrent listing on Malaysia and Singapore bourses at RM2.80, which is at the upper end of the indicative range of RM2.67-2.85 per share. This was done after the completion of the bookbuilding process.
"We are delighted with the response that the IHH IPO has received. We believe it underscores the strength and quality of our offering, as well as the depth of investor interest in the opportunities we present. We would also like to thank all our investors for their support," managing director Dr Lim Cheok Peng said in a statement issued yesterday.
At RM2.80 per share, IHH will have a market capitalisation of RM22.5 billion. This will make IHH the second largest listed healthcare provider after HCA Holdings Inc, a US-based hospital operator. HCA has a market capitalisation of about US$12.25 billion (RM39 billion).
IHH will raise RM5.03 billion from the IPO and is expected to use about 90.9 per cent, or about RM4.6 billion, of the gross proceeds to repay bank borrowings within 12 months of listing. The remaining will be used for working capital, general corporate purposes, as well as listing expenses.
Earlier, Dr Lim said that IHH will also use part of the proceeds to raise hospital beds by another 3,300 within the next three years and expand the number of hospitals by another 17. IHH is expected to be listed on July 25.
Khazanah Nasional Bhd has a 62 per cent stake in IHH. Post-listing, its stake will be reduced to 47.78 per cent.
With the listing, IHH will join KPJ Healthcare Bhd, Raffles Medical Group, Bangkok Dusit Medical Services and India's Fortis Healthcare to be among major listed Asian healthcare providers. Public Investment Research has placed a fair value of RM2.98 on IHH shares.
"We used a sum-of-parts (SOP) approach, assigning individual growth rates and EV/Ebitda multiples to each country. We believe SOP valuation is justified as we do not foresee major synergies to be achieved across the group, with the bulk of operational costs being incurred in the respective countries," Public Investment Research said in its recent report.
Meanwhile, in a separate statement, it was announced that CIMB Investment Bank Bhd, as the stabilising manager, has over-allocated 169.43 million shares and may effect transactions that may stabilise or maintain the market price of the shares at levels that might not otherwise prevail in the open market.
"Such transactions consist of bids or purchases to peg, fix or maintain the price of the IHH shares," said CIMB.
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