HMC Capital’s David Di Pilla rules out equity bid for...

HMC Capital’s David Di Pilla rules out equity bid for Healthscope

HMC Capital’s David Di Pilla has ruled out putting equity into any deal to buy out troubled private hospital operator Healthscope, saying an existing hospital operator is best placed to extract value from any purchase.Brookfield-owned Healthscope, the country’s second-largest hospital operator, has been gauging interest in a sale after reaching an agreement, due to expire next week, with the majority of its lenders to halt interest payments.

The company said on Tuesday it was on a “more positive pathway” after receiving “considerable interest” from a number of parties, along with the government’s pre-election commitment to support private hospitals. It has requested lenders provide further time to consider a sale or recapitalisation of the group.

HMC and the listed HealthCo Healthcare & Wellness REIT is the landlord for 11 of Healthscope’s 38 national hospitals.“What we’ve seen there from an investment point of view, is we think if there is a whole-of-company solution there, it’s going to need an existing operator to take synergies out of the operating structure,” Di Pilla told the Macquarie Australia Conference.

HMC said previously it would consider pulling together a syndicate to buy out the hospital group, prompting concern about how the group would manage conflicts if it were forced to renegotiate with Healthscope’s landlords.“Please judge HMC and our group on our actions, not what other people say. Never have we put ourselves in a position where we had a conflict of interest, or where we’ve ever worked against the interests of our underlying investors.”Di Pilla said HMC was committed to keeping the hospitals – which it values at $1.5 billion and purchased for $1.2 billion – and had started to build “a shadow book of alternative operators across the portfolio”.

Well that rules out any future possibility of a conflict of interest.