Pangilinan’s plan to hike stake in hospital chain stalled

Billionaire Manuel V. Pangilinan’s plan to hike interest in Metro Pacific Health Corp. (MPH), the country’s largest private hospital chain, remains in limbo amid an acquisition pricing mismatch.

“For now, what we’re hearing is that they’re not going to sell unless their target price is met,” he said at a recent briefing of the Metro Pacific Investments Corp. (MPIC).

He was asked by reporters about updates on MPIC’s talks with US private equity firm KKR & Co. on the possible acquisition of additional interest in the hospital group.

The MPIC chair said he would meet with the KKR group this week.

“The market is open, but they’re not listening … If the market says it’s only x, you cannot tell the market I want y, right?” Pangilinan said.

To recall, KKR & Co. and Singapore sovereign wealth fund GIC—which had bought a combined 80 percent stake in 2019 when MPH operated only 14 hospitals—expressed their desire to let go of majority share.

MPIC, meanwhile, holds the remaining 20 percent.

Out of the 80 percent held by KKR and GIC, Pangilinan wants to buy back 30 percent of MPH, which currently has a network of 27 hospitals.

“For them to obtain the kind of target price that they want to sell the hospitals, that 80 percent together with GIC, then I would like to think they will ramp up that acquisition program,” Pangilinan said.

Missed opportunity

The tycoon said MPH had been “pretty quiet” during the COVID-19 pandemic, which he considered a missed opportunity.

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“For me, [it] is sad, because that was the right time to buy it, because it’s going to be cheap, right? Now they’re back on track, buying two hospitals more or less each year, which is fine, and so forth,” he said.

Aside from an interest in the hospital network, MPIC covers power, toll roads and water.

In the first nine months, the group’s core profit growth held steady despite market hurdles. MPIC’s consolidated core net income grew 14 percent to P23.6 billion from P20.8 billion.

Its reported income, however, fell 7 percent due to the absence of a one-time gain booked a year ago.

The power business still provided the biggest contribution at P17.6 billion, or 65 percent of the net operating income. Water and toll roads pitched in P5.8 billion and P4.4 billion, respectively.