By Anshuman Daga
SINGAPORE (Reuters) - Buyout firms KKR <KKR.N>, Blackstone <BX.N> and CVC are among bidders competing for a stake in the hospital unit of Philippines' Metro Pacific Investments Corp <MPI.PS>, people with knowledge of the matter told Reuters.
Metro Pacific Investments, which has interests in power, water and other sectors, has said it plans to sell a 40% stake in Metro Pacific Hospitals at a valuation of $2-$2.5 billion, marking the country's biggest healthcare deal.
The bidders are, however, valuing the hospital unit at about $1.5-$2 billion, pegging the valuation at 15 to 20 times next year's estimated core profit of the unit, the people said.
The stake in the unit, the operator of 14 hospitals, many of which are among the country's largest and most modern, has also attracted interest from other financial and strategic investors, the people said, declining to be named as the talks are private.
The interest in the subsidiary underscores a strong appetite for healthcare deals in emerging markets, which are benefiting from rising spending by a rapidly growing consumer class.
"There's no asset of this sort in the Philippines. So, if you are looking to get exposure to local healthcare, this is a good play," one private-equity executive said.
Metro Pacific Investments, which owns an 85.6% stake in the hospital unit and has said it plans to use the funds from the sale to expand this business, declined to comment.
More than half a dozen investors have submitted first-round indicative bids and could team up with other parties for their final offers, the sources said.
Singapore state investor Temasek Holdings is among those interested in the hospital unit, one person said.
KKR, CVC, Blackstone and Temasek declined to comment.
One of Temasek's portfolio firms is Sheares Healthcare Group, which invests and provides healthcare services in Asia, focusing on China, India, the Philippines, Indonesia and others.
Metro Pacific Investments is a unit of First Pacific Co Ltd <0142.HK>, that is owned by Indonesian tycoon Anthoni Salim.
HEALTHCARE ASSETS IN PLAY
Sources said while majority control was not being offered in Metro Pacific Hospitals, some bidders were keen to take a bigger stake by setting up different shareholding structures at a later stage. The Philippines' 40% cap on foreign ownership will apply as the unit owns real estate.
Besides running hospitals, Metro Pacific Investments' hospital subsidiary operates a network of primary care clinics and cancer centers.