Pamplona ends talks to buy Turkish hospital chain: sources

ISTANBUL/DUBAI Mon Jul 1, 2013 9:02am EDT

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ISTANBUL/DUBAI (Reuters) - London-based private equity firm Pamplona Capital Management has dropped out of talks to buy a controlling stake in Turkish hospitals group Medical Park, five banking and industry sources aware of the matter told Reuters on Monday.

Medical Park, one of the largest hospital chains in Turkey, was put up for sale by U.S. private equity firm Carlyle (CG.O) and its two individual shareholders last year, with investment banks Goldman Sachs Inc (GS.N) and Credit Suisse (CSGN.VX) managing the process.

Talks have dragged on, however, with differences over the valuation of the business and its ownership structure complicating any potential sale, the sources said, speaking on condition of anonymity as the matter is not public.

Pamplona entered into exclusive talks for the business earlier this year after discussions with other private equity firms such as Texas Pacific Group (TPG) TPG.UL did not result in a deal.

Two other sources said TPG was back at the negotiating table.

Carlyle acquired a 40 percent stake in Medical Park in 2009 for an undisclosed sum alongside businessmen Muharrem Usta and Haydar Sancak, who own 30 percent each.

Pamplona declined to comment. Carlyle and TPG were not immediately available for comment, while Usta and Sancak could not immediately be reached for comment.

Medical Park's chairman said in December a stake sale could be completed in the first half of 2013.

Pamplona is backed by Russian billionaire Mikhail Fridman's Alfa Group, which was a cornerstone investor of the private equity fund when it was established in 2005.

Healthcare and private hospitals are popular among private equity houses in Turkey, as they look to benefit from the country's growing population and rising living standards.

Last year, Khazanah Nasional Berhad, Malaysia's state investment company, bought a 75 percent stake in Turkish group Acibadem Hospital ACIBD.IS and affiliated companies from Dubai-based Abraaj and Turkey's Aydinlar family.

Medical Park runs 19 hospitals and medical centers across Turkey and has around 9,000 employees, according to its website.

(Additional reporting by Anjuli Davies in London; Editing by Mark Potter)

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