Bangkok Dusit Medical Services Plc (BGH), the country's largest hospital group, is aiming to expand in the Northeast after announcing the acquisition of Krungdhon Hospital Plc (KDH) yesterday.
"Our particular acquisition focus from now on will be on Isan," said board director Pongsak Viddayakorn.
"We have recently opened Bangkok Hospital Udon Thani and established a new subsidiary, Bangkok Hospital Khon Kaen, with registered capital of 600 million baht to operate a private hospital in Khon Kaen.
"We are actively looking for new potential acquisition deals in other provinces in the Northeast, mainly with existing hospitals."
Bangkok Hospital also operates in Nakhon Ratchasima's Muang and Pak Chong districts.
BGH, which operates Bangkok, Samitivej, BNH, Phyathai and Paolo Memorial hospitals among others, has steadily pursued acquisitions and expansion in recent years.
It yesterday agreed to boost its stake in KDH to 45% from 20%.
According to a statement to the Stock Exchange of Thailand, BGH agreed to buy 3.74 million shares, or a 25% stake, of KDH at 55 baht each from major shareholders. The company will make a tender offer to other shareholders at the same price.
KDH, which has a market value of 953 million baht, is the second-smallest hospital stock in the 14-member SET Health Care Service subindex.
BGH will benefit from the broadening of its customer base within its hospital business, it said.
Dr Pongsak said that although Krungdhon Hospital in Thon Buri district is not strong financially, Bangkok's expansion and development is proliferating in that area.
"Lots of things still need to be done with KDH," he said. "We estimate we will invest about 200 million baht in the hospital's renovations and service improvement."
KDH will benefit from BGH's larger shareholding through upgraded facilities, said Bualuang Securities Plc.
"The acquisition price is not expensive," Narumon Ekasamut, a Bualuang Securities analyst, wrote in a report yesterday. The key benefit is geographical diversification.
Dr Pongsak earlier said the company plans to expand its hospital network to at least 35 by 2015 from 31 now, including KDH, to prepare for stiff competition under the Asean Economic Community from 2016.
BGH shares closed yesterday on the SET at 129 baht, unchanged, in trade worth 312 million baht, while KDH shares surged to a record 62.75 baht on the buyout, up 6.75 baht, in trade worth 57.4 million baht.
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