Thursday June 7, 2012

IHH, Kuwait fund in talks on IPOs

SINGAPORE: Integrated Healthcare Holdings (IHH), which operates hospitals in Asia, is trying to rope in Kuwait's sovereign wealth fund as a cornerstone investor in its US$2bil (RM6.35bil) dual listing in Kuala Lumpur and Singapore, sources said.

The Middle Eastern investor would be part of more than 10 cornerstones that IHH hoped to finalise by next week who would take up over 40% of the US$2bil offering, sources with direct knowledge of the deal told Reuters yesterday.

This is the second major initial public offering (IPO) in Malaysia this year after palm oil giant Felda Global's US$3.4bil deal, which is set to become Asia's largest initial public offering so far in 2012.

Abu Dhabi Investment Authority, which sources had told was also tapped by investment banks for the deal, was no longer in talks with IHH, a source with knowledge of the discussions said.

Kuwait Investment Authority, which manages US$280bil in assets, invests in big-ticket IPOs, according to a banker with knowledge of its strategy.

The fund could not be immediately reached for comment.

Malaysia's IPO market has defied a trend in other financial markets such as Singapore, where motor racing firm Formula One decided to posptone its near US$3bil deal due to volatile markets.

The Malaysian equity market is dominated by local investors and a large domestic pension fund system that partially insulates IPOs from global volatility.

IHH, which is 62.1% owned by state investor Khazanah, is trying to unlock value through the listing after acquisitions of hospital operators in Singapore and Turkey.

Japan's Mitsui & Co owns a 26.6% stake in IHH, Dubai-based Abraaj Capital holds 7.1% and Turkish hospital group Acibadem chief Mehmet Ali Aydinlar 4.2%.

Eastspring Investments, the asset management arm owned by Prudential PLC, and Malaysian pension funds had already committed to invest in the offering, they said. “It's a good balance between local and international parties,” one of the sources told.

The sources declined to be identified because the talks were not public. The lead managers on the deal are Bank of America-Merrill Lynch, Deutsche Bank and CIMB. Credit Suisse, DBS, Goldman Sachs and Malayan Banking are joint bookrunners.

Nomura, OCBC and UBS are co-lead managers. IHH and the banks involved in the deal declined to comment. - Reuters

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