Wakefield part of Stewarts' health plan

ALAN WOOD
Last updated 05:00 11/08/2012

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Canterbury rich-lister Mark Stewart says his part in a joint-venture bid for private hospital operator Acurity Health, formerly Wakefield Health, has been driven by timing and his long-term interest in the health sector.

In part the bid was driven by being cashed up from the Stewart family's exit from another health sector player, Ebos Group.

The Stewarts made a healthy profit from their investment in medical equipment supplier Ebos, selling a 10.18 per cent stake in Ebos to institutional investors in March after holding the stake for nearly five years.

Last month the Stewart family-owned Medusa, in a joint venture with registered charity the Royston Hospital Trust Board, said they were looking to acquire 50.01 per cent of Acurity-Wakefield at $6 a share.

The offer is seen as a certainty given that Medusa and Royston each hold a 19.99 per cent stake in Wakefield, plus a commitment from shareholder AMP Capital to sell some of its stake. The offer would close on September 6.

The Stewart family had long been investors in the Acurity assets, including hospitals in Wellington, the Hawke's Bay and Tauranga, as well as clinical practices in Auckland, Stewart said.

He saw further growth in the private sector and that was part of the reason for a company that needed "a whole lot more cash . . . that's why we feel that now is a good time to make an offer".

In terms of potential further acquisitions, "Auckland is an area of great interest too just given the population size.

"If you look at it in the wider sense, the sector (health) is a growing sector, the population is getting older and for us it's a long term position. We see health as something that, over the next 20 years, a lot more of it is going to go into the private space."

The joint venture would likely have deeper pockets for necessary spend within the Acurity group, he said. The hospital operator recently announced it will spend up to $25m on earthquake strengthening of three buildings at its Wakefield Hospital in Newtown, Wellington.

"That's a substantial amount of money, and it's important that shareholders are of a common view as to what is the best way to execute that . . . we want to be an active participate in that."

The Stewart family "had a good run in Ebos for a number of years, we made some dollars out of that . . . we see there are just as many other lucrative opportunities in the healthcare space."

Institutional investors had knocked on his door at an opportune time in terms of an exit.

Royston Hospital Trust Board chairperson Jacqui Gray said the trust grew out of a Hastings hospital operation that started in the 1920s. The trust wanted to keep on a growth path that that seen the operation and ownership evolve over time.

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