Health firm bids for rival Universal Group

ISTANBUL - Hürriyet

Azmi Ofluoğlu, the founder of Turkey’s Universal Group, poses for a photo at the entrance of Universal Hospital Tirana, Albania in this file photo.

Memorial Group, one of Turkey’s hospital chains has set its eye on the rival Universal Group, according to a top executive of the latter.

Over the last four months Memorial and Universal have been negotiating a deal for over 51 percent of shares of Universal with the result of acquisitions expected to be finalized Feb. 13, said Universal Group Chairman Esat Erkuş.

The group, comprised of German hospitals, has been caught in a downswing with the delays of salary payments and the resignation of high executives. The group hasn’t paid employees their last two months salaries due to the postponement of the capital increase to February, according to Erkuş.

A foreign consortium composed of ADM Capital, PGGM and IFC - a member of World Bank Group - owns 26 percent of shares in Universal.

“They don’t want to sell their shares so in case of an acquisition there will be a three partner structure,” the chairman said.

“Universal’s internal structure has some complexities and we don’t know what we’re going encounter. We have some conditions and the agreement seems like a long shot for now,” said Turgut Aydın, the CEO of Memorial Hospitals, confirming the on-going negotiations.

If the acquisition is completed, the newly formed structure will be the largest health group in the sector with 20 hospitals and three medical centers. The negotiating groups Universal and Memorial own 11 and nine hospitals respectively, so the potential acquisition will elevate them to top.

Other groups

Currently, Medical Park is the leader in the sector with 16 hospitals and two medical centers, followed by Acıbadem Hospitals, which owns 16 hospitals but a fewer total number of beds.

Both groups’ controlling stakes are held by foreign investors.

Integrated Healthcare Holding (IHH) and Bagan Lalang Ventures possess 60 and 15 percent stakes in Acıbadem respectively. U.S.-based investment fund the Carryle Group holds a 40 percent stake in Medical Park. The private hospitals sector has been growing rapidly at around 6.5 percent per year.

Currently, it constitutes 34 percent of hospitals in Turkey, while 25 percent of patients are seeking treatment in these hospitals.