UPDATE 1-Khazanah adds three more banks for $1.5 bln IPO-sources

Fri Dec 2, 2011 12:27am EST

Related Topics

* Goldman, DBS, Credit Suisse added as bookrunners-sources

* Company may consider dual listing in Singapore-sources (Adds detail on banks, Asia IPO market)

By Daniel Stanton and Saeed Azhar

SINGAPORE, Dec 2 (Reuters) - Malaysian state investor Khazanah has hired six banks to manage the listing of its healthcare unit next year in a deal that could be around $1.5 billion and potentially the country's fourth-biggest initial public offering ever.

Goldman Sachs, DBS and Credit Suisse were added as joint bookrunners for the IPO, two sources with knowledge of the deal said on Friday.

The banks join Bank of America-Merrill Lynch, Deutsche and CIMB, who were appointed as joint global coordinators and bookrunners for the deal, sources said. .

"There are six banks on the deal," a source with knowledge of the matter told Reuters.

The IPO is set to be the second major deal in Kuala Lumpur in 2012, when Malaysian plantation company Felda Global Group will seek a $2 billion listing.

The Khazanah unit is looking at a potential dual listing in Singapore, the sources said. The sources declined to be named because the IPO details are not public.

Khazanah's healthcare business is currently clubbed under Integrated Healthcare Holdings, in which Japan's Mitsui & Co owns a 30 percent stake.

The unit to be listed would have assets of Singapore's Parkway Holdings, which is owned by Khazanah, as well as Khazanah's stakes in Malaysia-based Pantai Hospitals and the International Medical University.

It may include potential hospital assets in Turkey, where the Malaysian investor's unit is nearing a deal to buy hospital group Acibadem, sources told Reuters.

"It should be a good solid company, but given the current market conditions, investors will be very picky, not just with the company to invest in but also the amount of investment they want to put in," Roger Tan, CEO of SIAS Research, said about the Khazanah unit.

"The company would have to explain a convincing strategy to investors and what kind of returns they will get."

CHOPPY MARKETS

The listing plans come as equity capital-raising activities in Asia remain hostage to choppy markets.

Equity capital market issuance in Asia-Pacific that had plunged 87 percent in the fourth quarter through early November has ticked higher in recent weeks, with a $1.2 billion IPO in Hong Kong by PCCW Ltd's telecom business spinoff, HKT Trust, large follow on deals in Shanghai and smaller offerings in Indonesia and Malaysia.

Other large deals are also in the works, with almost $8 billion in IPOs planned in Greater China for the coming two weeks alone, but lingering concerns over Europe's debt troubles could weigh on investors' appetite for new issues and pressure prices, analysts and investors have said.

The planned IPO of Japan's Nikko Asset Management has been shelved due to weak market conditions and an escalation in the European sovereign debt crisis, its main shareholder, Sumitomo Mitsui Trust Holdings, said on Friday.

The Malaysian IPO market has, however weathered the market storm relatively better compared to Singapore, where a number of deals, such as Manchester United's listing, were delayed.

Malaysia's Pavilion Real Estate Investment Trust, partly owned by the Qatar Investment Authority, last month completed its $223.5 million, the fourth-biggest this year in the country.

Officials with DBS, Goldman Sachs and Credit Suisse declined to comment. Neither Khazanah nor Integrated Healthcare officials could be immediately reached. (Additional reporting by Elzio Barreto in Hong Kong and Charmian Kok in Singapore; Editing by Muralikumar Anantharaman)

FILED UNDER: