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Blackstone nears 2x Vanguard Health return after huge Tenet offer

25 Jun 2013

medical_lrgGlobal alternative asset investor Blackstone could reportedly double its initial investment in hospital operator Vanguard Health Systems after rival Tenet Healthcare offered to buy its shares at a 70 per cent premium.

Vanguard is valued at $1.8bn by Tenet’s $21-per-share offer, well up on the company’s June 21 closing price of $12.37, the FT reported.

The deal will be welcome news for Blackstone, which saw its portfolio company perform below expectations in its 2011 IPO by raising $450m.

Vanguard had initially filed to sell 25 million shares for between $21 and $23 each, but cut that back to $18 per share.

Blackstone beat rivals KKR and Thomas H Lee Partners to buy a majority stake in Vanguard from Morgan Stanley Capital Partners for about $1.75bn in 2004.

The Tenessee-based business has since grown from operating 16 hospitals to 28. Tenet already runs 51 hospitals in complementary locations, the FT said.

It added that Vanguard currently has about $2.5bn of debt.

Last week Blackstone became the second private equity firm to hire a former four-star general in a month after bringing former NATO supreme allied commander in Europe Wesley Clark on board.

Clark joined the board of directors of portfolio company Fisterra Energy, which develops large-scale independent power projects in Latin America, Europe and the Middle East.

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