(Adds context, details on pricing, IPO process)
By Byron Kaye
SYDNEY, July 24 (Reuters) - Private equity giants TPG Capital Management Ltd and Carlyle Group LP will price shares in Australian hospital company Healthscope Ltd at A$2.10 ($1.98) each, the upper end of the target range, a person familiar with the sale told Reuters.
The pricing means the private equity funds would gain A$2.25 billion ($2.12 billion) by selling down their stake in Healthscope Ltd via an initial public offering, a premium to the A$1.99 billion they paid in 2010 to take the company private.
Healthscope is Australia’s second largest private hospital operator.
The target range for the shares was set at A$1.76 to A$2.29 per share. The bookbuild, which closed Thursday, supported the top of the target range but the sellers decided to price the stock slightly lower to ensure the stock has a strong debut when it lists on July 31, the person said.
The source declined to be named as they were not authorised to speak to the media. The relevant officials at TPG and Carlyle were not immediately available to comment.
The source said the buyout firms will retain 38 percent of Healthscope, at the upper end of their target of holding between 25 percent and 40 percent of the company, because they want to maximise their exposure to the stock after its listing.
The funds will give offshore cornerstone investors preferential treatment during the IPO process, while other investors will get between 10 percent and 15 percent of the stock they wanted, the source added.
With shares priced at A$2.1 each, Healthscope will have a market capitalisation of A$3.65 billion. ($1 = 1.0586 Australian Dollars) (Reporting by Byron Kaye; Editing by Miral Fahmy)