Hospital selloff

By Sarah Schwager
NOBLE Park’s South Eastern Private Hospital and its sister hospital The Valley in Mulgrave look set to be sold off, ending months of uncertainty.
Healthscope has already expressed interest in the pair after it agreed to buy 14 hospitals for $490 million from Ramsay Health Care on Monday.
The deal came after the Australian Competition and Consumer Commission (ACCC) recommended last week that Ramsay Health Care sell 19 of its hospitals to meet competition standards. This would mean the hospitals must be sold off.
Both have been in limbo since early May, as reported in the Star, and plans to revamp the Valley into the Churchill Hospital had also been put on hold due to the ACCC inquiry.
Ramsay Health Care managing director Pat Grier said Healthscope had been given an exclusive twoweek period from Monday to decide if it wanted to buy the other five hospitals, of which South Eastern Private and The Valley were a part.
“At the moment (Healthscope) are extremely interested and having a look at (the hospitals) now,” Mr Grier said.
He said after that period, they would open up the market to other interested parties.
South Eastern Private Hospital and The Valley hospital chief executive Ian Maytom said the hospitals’ uncertain future now looked more promising.
“The ACCC recommendations were a week and a half ago. We informed everyone that we would be taking part in a divestiture, meaning we would be selling the hospitals,” Mr Maytom said.
He said that, while Healthscope’s announcement had changed the hospitals’ fate, both of the acquisitions were still subject to ACCC recommendations. “We expect it will be resolved quicker this time,” he said.
The first ACCC ruling was postponed three times, leaving nearby medical practitioners nervous about the hospitals’ uncertain future. The investigation into Ramsay Health was conducted by ACCC after its acquisition of Affinity Health’s private hospital network in April.
If approved, Healthscope’s share of the private hospital market will rise from 10 per cent to 17 per cent. Ramsay will account for 26 per cent of the market after the sale.
Mr Grier said when Ramsay bought the Affinity hospitals, it was negotiating to divest the hospitals back to a company called CVC/Ironbridge Consortium. “We knew we had to sell because of the ACCC concerns and so we didn’t go into debt,” he said.
But just two weeks ago, CVC/Ironbridge lost its management.
“We had virtually got to the point of signing when it happened,” Mr Grier said. “It was only then that the phones rang hot.”
Mr Grier said they had originally looked at selling for about $400 million and so the deal had been a big bonus for the company.
“It’s a winwin situation.”
He said the deal benefited Healthscope, put Ramsay out of trouble with the ACCC, and meant the hospitals did not have to divest.
Healthscope managing director Bruce Dixon said the company was pleased with its purchase of the 14 hospitals, including the arrangement to the possible acquisition of the other five hospitals.