Proxy-advisory firm Institutional Investor Advisory Services (IiAS) has recommended the PTL shareholders to vote against the resolution selling its hospital business, ?as the offer price is very low and does not reflect the valuations of the healthcare business?. The resolution will be presented at the September 22 annual general meeting.
Leto Healthcare (LHPL) offer is lower than PTL’s investment in establishing the hospitals business. LHPL has offered to buy Artemis Health Sciences (AHSL) and Artemis Medicare Services (AMSL), the hospital business of PTL for Rs 94 and Rs 86 per share, respectively, valuing the deal at Rs 181 crore. PTL’s investment stands at Rs 200 crore.
IiAS referred to recent deals in the sector to highlight the huge gap in valuations. Max India announced a stake sale in its hospital business to a South African healthcare major for a valuation of Rs 2.4 crore per bed. Based on this, the valuation of PTL Enterprises should be around Rs 830 crore, IiAS said. Similarly, US-based private equity fund Carlyle acquired 24% in Medanta Medicity for Rs 950 crore, taking the valuation to Rs 3.2 crore per bed. The hospital is located in Gurgaon. Based on this calculation, the valuation of PTL Enterprises? two hospitals should be around Rs 1,215 crore.
Last week, Apollo Hospitals announced setting up 12 hospitals with 2,175 beds at an investment of Rs 2,033 crore. The investment for Apollo Hospital averages at Rs 93 lakh per bed. If the new 347-bed hospital was to be set up, it would entail an investment of Rs 324 crore.
