Bangkok Dusit Medical Services (BDMS) has announced it will sell all its ordinary shares in Bumrungrad Hospital (BH), totalling around 180.7 million shares that represent 22.71% ownership, in a 18.6-billion-baht deal, following an earlier decision not to take over BH.
The name of the buyer was not unveiled. The selling price is set at 103 baht per share.
Chai Sophonpanich, who holds a 1.29% stake in BH as of Aug 20, was reported on Tuesday to have denied purchasing BH shares from BDMS.
Up to 90.5 million shares will be sold through a high-volume transaction, also known as trade report-big lot, on the Stock Exchange of Thailand (SET) by tomorrow after BDMS "has received a confirmation from the purchaser as to the funding availability," said Narumol Noi-am, BDMS' senior executive vice-president and chief financial officer, in a letter submitted to SET president on Tuesday. This transaction is valued at 9.3 billion baht.
Ms Narumol expects the sale of the remaining 90.2 million ordinary shares (11.34% ownership) will be made within Dec 31.
"The transaction is still uncertain and subject to the availability of the purchaser's funding," she said.
BDMS executives on Tuesday declined to offer further comment on the share sales.
Suwat Wattanapraporn, an analyst from Asia Plus Securities (ASP), said the drop in share price might show that BDMS's investment in BH was not as rewarding as expected, given pressure from new competitors who are also targeting the international medical tourist segment.
Mr Suwat said BDMS will earn a special profit from the sale of this investment of about 1.1 billion baht in the fourth quarter. The hospital chain can use these funds in a variety of ways, such as repaying debt and investing in other assets.
ASP predicts the target price for BH will be 94 baht per share in 2021. The target price for BDMS is being revised and has the potential to be lifted up to 24 baht from 20.5 baht.
This is pending review of new assumptions, as previous prices were based on a slower than actual recovery and tallied local patients going to hospitals without accounting for the impact of the Covid-19 vaccines.
"Local patient numbers in the country are recovering faster than expected," he said.
"Only 30% of foreign patients are expected to be recovered and next year this is likely to improve to 50% of pre-pandemic levels."
BH shares closed at 115 baht, down 8.50 baht or 6.88%, in trade worth 1.15 billion baht. BDMS shares closed at 22.50 baht, falling 0.50 baht or 2.17%, in trade worth 1.59 billion baht.
The SET Index on Tuesday fell 18.80 points or -1.32% to close at 1,401.63 points in trade worth 102.84 billion baht.
BDMS's new investment plan was announced five months after BDMS founder and owner Prasert Prasarttong-osoth said in late June a plan to take over BH was scrapped.
The global economic recession in the wake of the pandemic and its impact on BH stock prices were cited as the rationale for aborting the deal.
Dr Prasert stressed BDMS had no plans to buy shares from BH in the future.
He said the company wanted to focus on other investment projects.
In February 2019, BDMS announced its company's board directors approved a conditional voluntary tender offer for all of BH's securities, based on confidence in the hospital's strong growth potential.
The deal raised concerns from analysts and regulators about forming a monopoly in the sector. BDMS planned to make a tender offer price of 125 baht per share.