Krungdhon Hospital Pcl (KDH), Thailand's second-smallest publicly traded hospital operator, surged to a record high in Bangkok trading on Friday after its largest shareholder announced a buyout plan.
Krungdhon jumped 13% to 63.50 baht as of the 12.30pm trading break, heading for the highest close since it started trading in Jan 1990. The stock earlier rallied by the 30% daily limit and was the biggest gainer in the 497-member SET Index (SET), which advanced 0.4%.
Bangkok Dusit Medical Services Pcl (BGH), the country's biggest private-hospital operator, will offer to buy the remaining shares in Krungdhon after agreeing to boost its stake to 45% from 20%, the companies said in separate regulatory filings Friday. Krungdhon will benefit from Bangkok Dusit's larger shareholding through upgraded facilities, according to Bualuang Securities Pcl.
"The acquisition price is not expensive," Narumon Ekasamut, a Bualuang analyst, wrote in a report on Friday. "The key benefit is geographical diversification."
Bangkok Dusit agreed to buy 3.74 million shares, or a 25% stake, of Krungdhon at 55 baht each from existing major shareholders, it said in its statement to the stock exchange. The company will make the tender offer to other shareholders at the same price, according to the statement.
Bangkok Dusit's offer price for Krungdhon, while 1.8% lower than Thursday's close, was 20% higher than the average closing level in the past three months, according to data compiled by Bloomberg. Krungdhon, which has a market value of 953 million baht (US$32 million), is the second smallest hospital stock in the 14-member SET Health Care Service Index (SETHELTH).
Bangkok Dusit will benefit from a broadening of its customer base within its hospital business, it said. Bangkok Dusit fell 0.4% to 128.50 baht in Bangkok.