Source: Radio New Zealand
Green Cross Health says it will continue to keep shareholders informed in accordance with its continuous disclosure obligations. 123RF
Listed healthcare provider Green Cross Health has confirmed it is in discussions with third parties about a potential transaction involving its medical division, but says there is no certainty those talks will result in a sale.
It follows reporting by the Australian Financial Review, which said three private equity firms, including Sydney‑based Adamantem Capital, were competing to acquire Green Cross Health’s medical division.
“Green Cross Health confirms that it is engaging with parties regarding a potential transaction involving the Medical division,” the company said in a statement to the stock exchange.
“There is no certainty that this engagement will lead to any transaction.”
Green Cross Health said it would continue to keep shareholders informed in accordance with its continuous disclosure obligations.
The medical division operates 65 medical centres under The Doctors and Local Doctors brands, with around 415,000 enrolled patients across the country.
The wider group also owns pharmacy brands Unichem and Life Pharmacy, with more than 300 stores operating throughout New Zealand.
Craigs Investment Partners investment director Mark Lister said private equity firms were increasingly looking at smaller companies on the New Zealand share market, after years of relative under performance left some listed companies trading at attractive valuations.
“The smaller end of town doesn’t get the same sort of attention – it’s not in the same spotlight – and that can mean mispricing opportunities,” Lister said.
He said private equity firms loved to “turn over rocks and uncover opportunities” they might profit from by buying at low prices and adding value.
“Private equity investors love to take a slightly longer‑term and more contrarian view than fickle sharemarket investors, who can be very short‑term at times,” he said.
Lister said that, beyond pricing, the healthcare sector was appealing because of New Zealand’s ageing population, although it was not without risk.
The company did not comment on the size or structure of any potential transaction, nor whether it would involve a full or partial sale of the medical division.
Shares in Green Cross Health rose 18.5 percent to $1.47 following the announcement.
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
