Thomson Medical Centre

[FFNow]

Wondering how come the management hasn't issued any statement about Peter Lim's offer yet.. Dr Cheng should be back from his holidays already.. Hmmmm...

[FFNow]

Anyone has subscribed to ST online? Today's ST has report on TMC and why the founders decided to sell their stakes. If someone has access to the online version, can he copy and paste the whole article here for everyone's benefit?

[Musicwhiz]

Hi Taka666,

Pasted below as per your request.

Nov 28, 2010
Why the Chengs sold Thomson Medical
The recent sale of Thomson Medical Centre to billionaire investor Peter Lim took many by surprise. Robin Chan talks to people close to the deal to find out why the Cheng family sold the hospital they had built from scratch.

One by one, the suitors came knocking on the door, only to be turned away.

Thomson Medical Centre was not for sale.

For years, the centre's owners, led by founder and chairman Cheng Wei Chen, 79, and his son, deputy chairman Cheng Li Chang, 50, had spurned the advances of the health-care giants who wooed with their millions of dollars. The two doctors wanted to focus on growing their baby, a business that the family started from scratch.

But in early September, it all changed.

The health-care market was red hot and buyers were upping the ante to get their hands on a piece of the coveted pie.

Singapore was growing as a destination for medical tourism, and Singapore medical companies were shining stars in South-east Asia.

Malaysian sovereign wealth fund Khazanah Nasional had just completed an audacious deal for Parkway Holdings, snatching it from under the noses of India's Fortis Healthcare in a bidding war that saw the price of Parkway shares leap from $3.02 to $3.95 over the two-month-long battle that began on May 26.

With only a handful of well-established private-sector hospitals around, Thomson had become a prized asset.

But within the family, something else was also changing.

Sources said that the family found it increasingly challenging to juggle its medical practice and the running of the business.

There was a growing feeling among the Chengs that, perhaps, they had taken Thomson as far as they could, and that they did not have the capital and resources to match the bigger boys.

More importantly, there was a sense that the doctors wanted to focus on their true passion - their medical practice and patients.

With the market sizzling, there was perhaps no better time to let another owner take Thomson further.

Thomson had grown from a small business founded in 1979 with a $10 million investment by Dr Cheng Wei Chen, a respected gynaecologist who is popularly known as Dr W.C. Cheng, to a money spinner: It generated $82 million in revenue last year.

It quickly established itself as a premier hospital for obstetrics and gynaecology (O&G), listing in 2005, moving to the mainboard two years later, and now a dominant player in baby deliveries, with 23 per cent of the market.

It has had difficulties expanding physically, confined within a small plot of land at the junction of Thomson Road and Whitley Road. Its hospital is also operating at almost full capacity.

Overseas, the hospital secured two projects in Vietnam's Binh Duong province, but there has been little else, analysts said.

The Chengs had plans for the hospital, but while they had not been actively looking to sell, 'the noise level of the interested parties became incessant', said one source who had known about the deal.

'It was very difficult because Thomson is their baby. It was an agonising decision process,' he said.

It is believed that Fortis, fresh from its defeat over Parkway, had shown the strongest interest in acquiring Thomson.

This could have forced the Chengs to seriously consider selling.

When the Chengs decided to consider their options, they brought in veteran mergers and acquisitions (M&A) banker Johnson Tan from IB Partners.

Sources said that there was a list of potential buyers - a small but important group of five or six A-listers in the health-care sector.

These were bidders who had the money, knew the health-care space and Thomson's operations, and had a plan to grow the business.

Bankers told The Sunday Times the list is likely to have included Fortis Healthcare, Raffles Medical Group and even Thailand's Bumrungrad International Hospital.

Aside from the big health-care players, a few 'out-of-the-box' buyers emerged, including billionaire investor Peter Lim.

While the appearance of Mr Lim may have caught outsiders by surprise, people who have worked with him said he was very keen on the health-care sector.

The savvy investor, who made his billions on the stock market, had already made several forays into the sector, becoming the largest stakeholder in Malaysia's TMC Life Sciences, and also owning a substantial stake in Healthway Medical Corp, which he later sold.

Mr Lim, estimated to be worth more than US$2 billion (S$2.6 billion), had also been secretly trying to seal a deal for Britain's Liverpool Football Club at that time.

Compared with the more than £300 million (S$617 million) he was prepared to pay for the football club, Thomson's purchase was chump change.

Over the next month or so, the Cheng family's representatives met the bidders.

Everyone was keen to avoid the same public attention that the Parkway tussle had attracted.

Discussions were kept tightly under wraps - often taking place late at night, with meetings held in different locations to avoid those involved from being spotted.

No one set foot on the Thomson premises to avoid arousing any suspicion, said a source who knew about the deal.

The teams that were studying the various bids even met outside Singapore, like in Thailand.

Few people were told of the plans; the deal was shrouded in such secrecy that even Mr Bertie Cheng, the founder's cousin and a Thomson board member, had been kept in the dark.

As one banker later described it: 'This is how M&A should be done - quiet, silent.'

As the weeks progressed, the bidders were shortlisted to just 'two or three'.

But Mr Lim appeared to have emerged as a front runner not only because of his cash clout, but because he had been firm in his intent.

It is not clear how close the other bidders came, or how much they had bid.

A person with knowledge of the deal had only this to say: 'Peter saw the value, he was decisive and went with it.'

On Oct 26, the company announced its full-year results.

The next day, lawyers were engaged to go through the legalese, as a deal was shaping up, although the family still had not decided who to go with.

The next 48 hours moved quickly, but were perhaps the most difficult for the family, described one observer of the process.

'It was like a father walking his daughter down the aisle to give her away.'

On Oct 28, the decision was finally made to go with Mr Lim's offer of $1.75 a share, valuing the family's stake at a cool $202 million.

From then on, the execution of the deal was swift. By 6pm on Oct 29, the Chengs - both father and son, and their wives - and Mr Lim had signed the papers for the transfer of shares, and a few hours later, it was made public.

After 31 years, Thomson Medical Centre was no longer part of the Cheng family.

For Mr Lim, it seemed all had gone as planned, as he prepared to mount a general offer for all the remaining shares in the company. He may have lost out on Liverpool, but has received much more than just a consolation prize in Thomson Medical Centre.

But just five days later, news broke of Thomson's in-vitro fertilisation mix-up, adding a twist to the surprise sale.

It is still not clear whether Mr Lim had knowledge of the case when he made his bid.

But that has not deterred him from continuing to accumulate shares in the company, which is valued at $513 million.

By last Friday, he had amassed an 87.05 per cent stake, including 17.4 per cent worth of shares in the firm from board member Hari Naroomal Harilela of the Harilela Group in Hong Kong. The general offer closes on Dec 10.

Although Mr Lim is known to be a hands-off investor, he may have bigger plans for Thomson.

He is expected to replace the board members and senior management in the hospital, according to a source who has been informed of the decision.

That means non-executive directors Mohinder Singh Kalra, Bertie Cheng and Dr Harilela, independent directors Mr Quek Shi Kui, Phua Wee Thuan and Chin Sek Peng, as well as chief executive Allan Yeo, will step down, said the source.

But while Dr W.C. Cheng will no longer be chairman, it is believed that his son, Li Chang, could still be invited to stay on the board, in a move that may help to reassure the hospital's many experienced doctors of continuity.

As for the Chengs, they have assured their patients that they will continue to practise at the hospital, where they run their own O&G clinic, W.C. Cheng and Associates.

'There's absolutely no question, the practice stays,' said one source close to the family. 'They will continue, nothing changes there.

'They are first and foremost doctors, and to the last moment, they will be doctors.'

But as far as the future of Thomson is concerned, as a family friend described it: 'It's Peter's show now.'

chanckr@sph.com.sg

[FFNow]

Thanks MW!! I can always count on you for this. It's a good read btw. Can learn lots of stuff from the article about M&As and how they are carried out and many more.

[brattzz]

apparently, Mr Peter Lim has tied up with the sultan of Johore to develop a hospital in the Iskandar zone.

Step 2 kicks in place for Ah lim!!

[FFNow]

Wonder what Peter Lim's next major buy in the SGX will be?

[zz...]

bought over and delisted for 513m in 2010, now planning for listing again at 5b market capitalisation

http://www.businesstimes.com.sg/companie...ear-term-0

[brattzz]

bought over and delisted for 513m in 2010, now planning for listing again at 5b market capitalisation

http://www.businesstimes.com.sg/companie...ear-term-0

Of cos!

Boss Peter Lim is shrewd biz-man and Thomson is a reputable brand, so why not 10x, heck, even 20x more!!

Huat huat har!!

[brattzz]

ok Thomson medical group is back again!! RTO - Rowsley! now is owned by Peter Lim liao!!

https://www.straitstimes.com/business/co...s-for-s16b

very different animal though! buyers open ur eyes big!

[dydx]

Can Peter Lim grow the previous Thomson Medical's business properly like its original founder Dr Cheng? Unlikely!

It looks like Peter Lim needs to cash out a bit from Thomson Medical or from Rowsley. It looks like Peter Lim doesn't wish to fund Thomson's expansion plans from his own pocket. Changing Rowsley's name to Thomson Medical doesn't make its existing lousy businesses or Thomson Medical business better..