A consortium led by US private equity group KKR has offered to buy Australia’s largest private hospital operator for A$20.1bn ($14.9bn), in what would be one of the biggest leverage buyouts in the country’s history.

The offer for Ramsay Health Care valued the company at a 37 per cent premium on the Australian business’s closing share price on Tuesday of A$64.39, and was the latest in a string of take-private deals in the country. Ramsay’s share price soared 27 per cent when markets opened on Wednesday.

Shareholders would receive A$88 per share in cash, with the option of taking part of that in unlisted shares in the company.

The acquisition would be the latest in a string of mergers and acquisitions in Australia, where A$308bn of deals were made in 2021, compared with a 10-year annual average of A$100bn, according to data from Refinitiv.

Many of those deals have been big public-to-private transactions led by consortiums of overseas private equity managers and Australian and international pension funds. They include Canadian investment group Brookfield Asset Management’s bid to buy Uniti, the telecoms company, for $2.7bn and US private equity firm Blackstone’s acquisition of casino operator Crown for $6.4bn this year.

The value of KKR’s offer eclipses those deals, bringing it closer in size to Global Infrastructure Partners and IFM Investors’ acquisition of Sydney Airport for $23.8bn, the biggest all-cash takeover in the country’s history, which was completed this year.

But unlike that deal, about 50 per cent of KKR’s offer could be financed with debt.

The other members of the consortium were not disclosed but people familiar with the deal said they were a mix of Australian and international pension and sovereign wealth funds.

The Ramsay Foundation, Ramsay’s biggest shareholder with about 19 per cent of the company, was provisionally in favour of the deal, one person familiar with the negotiations said.

KKR, which has assets under management of $471bn, has become an increasingly active dealmaker in Australia. The firm acquired energy infrastructure company Spark Infrastructure for $3.7bn in December as part of a consortium that included Canadian pension funds.

KKR also took a majority stake in wealth management firm Colonial First State, a former division of Commonwealth Bank of Australia, in the same month.

Shane Storey, a healthcare analyst with Wilsons, a financial services company, said the offer was “attractive” and he expected it to succeed in the absence of a higher bid.

He said such an offer would be unlikely from a listed healthcare company. “The competition they [KKR] would be worried about would be from other private equity groups,” he said.

Ramsay has granted due diligence to the consortium on a non-exclusive basis, the company said in a filing to the Australian Securities Exchange. It stressed talks were at a preliminary stage and neither party had reached a final decision.

Ramsay has more than 500 hospitals worldwide, including 34 in the UK. It also operates in the EU, Malaysia, Indonesia and Hong Kong. The company recently acquired UK mental healthcare hospital operator Elysium, which owns 72 sites with 2,000 beds.

In Australia, it has a network of 72 hospitals and 90 pharmacies.

Investment bank UBS and law firm Herbert Smith Freehills are advising Ramsay on the deal, while Barrenjoey and Credit Suisse are advising KKR.

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