Bangkok Dusit Medical Services Public Company Limited (BDMS) on November 24, 2020 appeared to surprisingly announce the disposition of investment in Bumrungrad Hospital Public Company Limited (BH), totaling 180,715,806 ordinary shares, representing 22.71% of the total issued and paid-up shares of BH at the price of THB 103 per share.
This was an unexpected transaction as earlier this year BDMS had just announced a Tender Offer of BH at the price of THB 125 per share. Sadly, the path to taking over BH was not in line with the plan as BH’s major shareholders, led by “Sophonpanich Family”, said that they would not hand over their stakes to BDMS.
But why did BDMS decide to dispose of all shares in BH..? Or because BDMS can not buy BH…then it’s better to sell…?
As BDMS is unable to merge 2 companies, the synergy between BDMS and BH is probably unnecessary. Moreover, the major shareholders of both parties always disagree with each other. Maybe this is the reason behind the disposition.
More importantly, the businesses of Prasarttong-Osoth including hospitals, airlines and media are having a difficult time amid Covid-19 pandemic…the sale of BH at least could increase liquidity to BDMS.
Recently, Bangkok Airways Public Company Limited (BA) has issued an early-retirement program, who participate in the program would receive severance checks equivalent to maximum 20 months of pay. In 3Q20, BA recorded a net loss of THB 1,569 million, plunging from a profit of THB 58 million a year ago, driving a nine-month performance to record a loss of THB 4,882 million.
A decline in profit also happened to hospital and media businesses.
Even though having a positive factor coronavirus vaccine, the overall outlook is still cloudy, pressuring BDMS to seek more liquidity in order to continuously run the business and subsidies.
It was expected that BDMS would gain a profit as much as THB 2,430 million from this disposal.