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Malaysia govt doesn't object to Sime hospital buy



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KUALA LUMPUR, Dec 18 (Reuters) - Malaysia's government will not object to plantations-to-automotive conglomerate Sime Darby (SIME.KL) buying a stake in the country's top heart hospital, the country's deputy premier said on Thursday.


Sime, which already owns a private hospital and a nurse training business, wants to buy IJN Holdings, the operator of the national heart hospital in a move to diversify its earnings and move into the profitable sector, analysts said.

"We are in the process of finalising the matter with the Ministry of Health although in principle we have no objection to the proposal," said Najib Razak, who is finance minister as well as deputy prime minister, according to state news agency Bernama.

Najib's ministry owns the hospital operator and some health officials had expressed concerns over provision of care to the poor if it were privatised, Malaysian newspapers have reported.

Najib said he was not aware of any other bidders for the hospital and said that there would be a requirement for any new owner to ensure services were provided to all.


"Whatever the position of IJN, it is important for the social programme to be given high priority," he said.

TA Securities said that expanding healthcare in Malaysia and China was a long-term aim of Sime Darby, although it warned that the IJN purchase may not be particularly profitable as the government would likely impose tough regulations.

"Rising affluent and health consciousness in Malaysia, and China makes healthcare a rather attractive business to venture into, in our view," TA Securities analyst James Ratnam wrote in a report published on Thursday.

He said that IJN was regarded as being the top heart specialists in the region but warned that the purchase may come with some restrictions such as a national interest consideration.

"Therefore, despite all the lure of owning one of highly rated medical centers in the country, it may not necessarily be attractively profitable," he noted.

Sime stock was up 1.82 percent by 0557 GMT at 5.60 ringgit. It outperformed the wider Bursa Malaysia index .KLSE which gained 1.12 percent, but lagged the palm plantations sector where IOI Corp (IOIB.KL) led gainers with a 5.5 percent rally to 3.48 ringgit due to a weaker dollar helping earnings. [ID:nKLR385876]




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UPDATE 1-Malaysia's Sime gets govt nod for hospital deal







KUALA LUMPUR, Dec 18 (Reuters) - Malaysian conglomerate Sime Darby (SIME.KL) on Thursday said it had received government approval for its proposed acquisition of a majority stake in the country's top heart hospital.


The plantations-to-automotive group's statement came after Malaysia's deputy premier said earlier in the day the government will not object to Sime buying a stake in IJN Holdings, which operates the national heart hospital.

"Sime Darby... received approval-in-principle from the Government of Malaysia on the proposed acquisition of a 51 percent equity stake in IJN," the company said in a statement issued late on Thursday.

Sime, which already owns a private hospital and a nurse training business, wants to buy IJN in a move to diversify its earnings and move into the profitable sector, analysts said.

"We are in the process of finalising the matter with the Ministry of Health although in principle we have no objection to the proposal," said Najib Razak, who is finance minister as well as deputy prime minister, according to state news agency Bernama.

The deal was criticised by a member of Malaysia's ethnic Chinese party, Malaysian Chinese Association (MCA), who said a potential fee increase would burden low-income groups, Bernama reported.

"We hope the IJN will not be privatised. This is not about the money. This is about the government's obligation to provide an affordable health service," said MCA's Chua Soi Lek. MCA is a key party in Malaysia's ruling coalition.

Finance Minister Najib, whose ministry owns the hospital operator, said he was not aware of any other bidders for the hospital and said that there would be a requirement for any new owner to ensure services were provided to all.

"Whatever the position of IJN, it is important for the social programme to be given high priority," he said.

Brokerage TA Securities said expanding healthcare in Malaysia and China was a long-term aim for Sime, but warned the IJN purchase may not be particularly profitable as the government would likely impose tough regulations.

"Rising affluence and health consciousness in Malaysia, and China makes healthcare a rather attractive business to venture into, in our view," TA Securities analyst James Ratnam wrote in a report published on Thursday.

He said that IJN was regarded as one of the top heart specialists in the region but said the purchase may come with some restrictions such as a national interest consideration.

"Therefore, despite all the lure of owning one of (the most) highly rated medical centers in the country, it may not necessarily be attractively profitable," he noted.

Sime's shares closed 2.73 percent higher on Thursday at 5.65 ringgit. (Reporting by David Chance and Varsha Tickoo; Editing by Julie Goh and Jon Loades-Carter)





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