Three’s a crowd: Medibank in final furlong for $500m-plus Cura

afr.com:

Medibank Private is the $9.6 billion gorilla giving London-listed buyout giant Intermediate Capital Group and Switzerland’s Partners Group a major headache in their quest to acquire Cura Day Hospitals.

Street Talk can reveal Macquarie Capital-advised Medibank is in the final round of the auction, alongside Intermediate Capital Group, tended to by Rothschild and Miles Advisory, and Partners Infrastructure. Binding offers are due to be submitted to sell-side adviser Citi in the first week of December.

Cura runs a string of day surgeries around the country. 

Cura makes $40 million a year at the earnings line and is slated to spell a $500 million-plus payday for its owner. At least 20 parties took sale documents in the early stages of the process, attracted by its sizeable foothold in a fragmented industry and the lower operational costs incurred at day surgery businesses compared with hospital owners.

One thing to watch will be the reaction from both Cura’s investor base and rival insurers. Cura’s doctor-shareholders may have some concerns that Medibank could go down the route that similar firms have taken in the United States, into managed care. Equally, other health insurers may baulk at renegotiating health fund contracts with Cura should Medibank succeed in buying the business.

A Medibank spokesperson declined to comment.

But various executives have been clear about the company’s strategy. “To expand in health, we will pursue opportunities in targeted high-growth markets,” the company said at a recent Macquarie conference. “Our focus over the medium term will be to expand and connect our investments in health to our customers, continue to bring benefits back to our core health insurance business and help transform the