PETALING JAYA: Sime Darby Holdings Bhd has confirmed that the company and Ramsay Health Care Ltd have received a confidential, conditional and non-binding proposal from IHH Healthcare to acquire 100% of their 50:50 joint venture (JV) Ramsay Sime Darby Health Care Sdn Bhd (RSDHC).
In a filing with Bursa Malaysia, Sime Darby said the conditional indicative enterprise value for the JV was RM5.67bil or US$1.35bil on a cash-free, debt-free basis.
“Having reviewed the indicative proposal, Sime Darby and RSDHC have agreed to a period of exclusivity for four weeks when due diligence commences to allow IHH to conduct due diligence and negotiate a sale and purchase agreement.
The discussions between Sime Darby, Ramsay and IHH are preliminary and no agreement has been reached in relation to the indicative proposal.
“There is no guarantee that an agreement will be reached in respect of the indicative proposal or that a transaction will eventuate,” it said.
Sime Darby announced last month it decided to shelve its initial public offering (IPO) plan for RSDHC.
Sime Ramsay hosp
It was reported earlier that the group is eyeing to list its healthcare arm on the main market of Bursa Malaysia valued at US$300mil (RM1.25bil).
Sime Darby chief executive officer Datuk Jeffri Salim Davidson said the group has decided to put the IPO plan on hold.
“We are looking at various opportunities to grow our healthcare business,” he told reporters after the group’s second quarter financial year 2022 (FY22) results briefing in February 2022.
RSDHC was founded in 2013 when Sime Darby and Ramsay combined several hospitals in South-East Asia.
RSDHC runs six premium hospitals in Malaysia, including the Subang Jaya Medical Centre, and Indonesia, as well as a day surgery facility in Hong Kong.
For its financial year ended Dec 31, 2021, IHH’s net profit jumped to RM1.86bil from RM288.88mil in the previous corresponding period, while revenue improved to RM17.13bil from RM13.40bil a year earlier.
RHB Research in a recent note said IHH’s recovery trajectory remained on track, complemented by its appetite to acquire strategic assets and develop its high-margin diagnostics business.
The brokerage kept a “buy” call on the stock with a sum-of-part-derived target price of RM7.35.
CGS-CIMB Research, which continued to like IHH for its diversified geographical exposure, expected Covid-19 revenue contribution to likely decline in 2022.
This could be offset by the return of foreign patients and domestic demand.
But the research firm added that as a diversified healthcare provider, IHH could see a lower impact from the decline in Covid-19 revenue versus its peers.