SA hospital group may list

London/Johannesburg - The owners of Life Healthcare, one of South Africa's biggest private hospital operators, are considering pitches from investment banks to take the company public, people familiar with the matter said.

No banks have yet been selected to lead the Johannesburg listing, the sources said, but the so-called "beauty parade" comes as many financial investors in Europe and the United States are also looking to take strong portfolio companies public.

Any initial public offering (IPO) is likely to involve a majority of existing shares and is unlikely to take place until May 2010 or later, one of the people said.

Black-owned and controlled investment companies Brimstone Investment Corp Ltd and Mvelaphanda Group Ltd each own about 22% of Life Healthcare. Management owns the rest.

At end-June, Mvela gave its stake an "intrinsic net asset value" of $1.626bn, up 14% from a year earlier. Using the same technique would imply a value for the whole company of about $1bn.

In that year, Mvela said Life Healthcare had boosted paid patient days by 4.3% and earnings before interest, tax, depreciation and amortisation (Ebitda) in continuing businesses by 14.4%.

Mvela has said it was talking to other shareholders about "unlocking value in the most efficient manner" from the hospital company.

Life Healthcare competes with listed rivals Medi-Clinic and Netcare Ltd but comparisons are made harder because they have more international operations.

Life Healthcare operates solely in South Africa and Botswana, but Netcare has a major presence in Britain via a half-stake in General Healthcare Group, while Medi-Clinic operates in Namibia, Switzerland and the United Arab Emirates.

Demand for private healthcare has increased in Africa's biggest economy in recent years as a fast-growing middle class signs up for health insurance.

Life Healthcare and Mvela declined to comment. Brimstone was not immediately available to comment.

- Reuters