MVP hospital group going international

Prospects seem healthy for the Philippine healthcare sector especially with medical tourism being hailed as the next sunrise industry. Aside from well-trained doctors and medical staff with excellent English communication skills, the competitive cost of healthcare services are very attractive compared to neighboring countries like Japan, South Korea, Australia. No surprise therefore that one of the largest asset management firms, the Government of Singapore Investment Corp. (GIC), has entered into a strategic partnership with the hospital unit of the MVP-led Metro Pacific Investments Corp.

GIC is investing P3.7 billion for an initial 14.4 percent stake in a wholly owned MPIC subsidiary in charge of hospital investments, while another P6.5 billion has been advanced through an exchangeable bond convertible to a 25.5 percent stake in the hospital subsidiary for a total of P10.2 billion. No doubt GIC’s entry will boost MPIC’s position as the biggest hospital group in the country with Makati Med, Asian Hospital, Cardinal Santos, Lourdes Hospital and major hospitals in Davao, Bacolod and Tarlac acquired by the group of Manny Pangilinan in recent years.

MVP noted the excellent potential offered by the Philippines as far as the healthcare industry is concerned, with priorities focused on turning the hospitals into health centers of excellence with state-of-the-art facilities and equipment, well-trained medical staff and of course, best management practices to make sure the establishment remains financially healthy.

Apparently, the MVP group finds the pace for public private partnership projects a bit too slow, which is why investments are being explored in other countries like Australia and New Zealand. A couple of days ago, the First Pacific group where MVP sits as CEO successfully acquired Goldman Fielder, Australia’s biggest publicly listed food manufacturer. First Pacific partnered with Singapore-based Wilmar International to acquire Goldman Fielder through an all-cash offer of $1.179 billion (at A$0.65 per share) which the company initially rejected.

The food manufacturer has seen its profits dwindling in the last few years, and no amount of cost cutting has been able to stem the financial hemorrhage. Analysts saw the initial buyout offer as the best the company will get, but executives turned it down. Undaunted, the group of MVP and Wilmar submitted a revised proposal offering A$0.70 per share plus a one cent dividend, but gave the board a deadline of 8 p.m. on the same day the offer was made.

Major shareholders decided to accept the sweetened offer, admitting that they were afraid First Pacific and Wilmar would walk away – leaving them with nothing to look forward to except impending job cuts and more profit downgrades. The new acquisition will place MVP and the First Pacific group in an excellent position to create a leading agriculture and food staples company in the Asia Pacific region. –Babe G. Romualdez (The Philippine Star)