Khazanah selling RM8.42b stake in IHH Healthcare to Mitsui in portfolio revamp

[KUALA LUMPUR] Malaysia's Khazanah Nasional Bhd is selling a 16 per cent stake in Singapore-listed IHH Healthcare Bhd to Mitsui & Co Ltd for about RM8.42 billion (S$2.76 billion) in cash, kicking off a restructuring of the sovereign wealth fund's portfolio under a new government.

In separate statements on Thursday, Khazanah and Mitsui said the Japanese firm is paying that amount to raise its stake in IHH to 32.9 per cent and become the biggest shareholder of one of Asia's largest private hospital groups. Khazanah's stake will be cut to about 26 per cent.

"The divestment is part of Khazanah's strategy to grow the businesses that we are invested in and to find the appropriate times and value to create liquidity for our future capital and investment needs," said Khazanah's managing director Shahril Ridza Ridzuan.

Citing sources, Reuters had reported in August that Khazanah will likely cut stakes in some top-linked firms as the new government of Prime Minister Mahathir Mohamad overhauls the sovereign wealth fund's investment strategy, and that it could also review its stake in IHH Healthcare.

Bankers say IHH remains one of the top performing investments of Khazanah, but the fund will face challenges to sell down stakes in its other Malaysian-focused portfolio companies.

The deal is subject to the healthcare group completing a previously announced acquisition of a 30 per cent additional equity stake in a Turkey-based healthcare group Acibadem Saglik Yatirimlari Holding A.S.

Shares in IHH jumped 8.2 per cent in early trade on Thursday to S$1.85 after the deal's announcement, from Wednesday's close of S$1.71. The counter was trading up 5.3 per cent at S$1.80 at 9:55am.

REUTERS