(Bloomberg) -- Fidelidade-Companhia de Seguros SA, an insurer controlled by Fosun International Ltd. of China, is evaluating a possible new attempt at doing an initial public offering of its Portuguese hospital operator unit Luz Saude.
“We’re now assessing market conditions to see if it makes sense to, in a few months, go back to the market with a potential IPO,” Fidelidade Chief Executive Officer Rogerio Campos Henriques said in an interview in Lisbon. “We’re talking frequently to banks, to advisers that come to us and basically give us their perspective of what they think is best.”
Fidelidade suspended a plan to carry out the IPO of the Luz Saude unit in April, citing instability in capital markets. The offering would have been Portugal’s first IPO in three years, and the Lisbon exchange is still waiting for a new stock listing.
In April, Fidelidade was seeking a valuation of at least €1 billion ($1.1 billion) for Luz Saude.
“The major issue why we didn’t move forward with the IPO was clearly valuation,” Henriques said. “During that week we heard things like discounts of over 30%. Luz Saude is a trophy asset. So it deserves a proper valuation.”
The CEO said a decision on a possible IPO of Luz Saude is unlikely to take place before 2025. He also didn’t rule out a possible direct sale of a minority stake in the unit, whose 29 hospitals, clinics and nursing homes make it one of Portugal’s biggest private health-care providers.
“It’s not completely off the table to consider a private sale, but it would have to be with a very good valuation,” said Henriques, 52. “We would always prefer an IPO because it provides more visibility to the asset.”
Fidelidade IPO
Luz Saude was delisted from the Euronext Lisbon exchange in 2018 after China’s Fosun bought most of the shares, through Fidelidade.
In April, Portugal’s biggest insurer said it was also planning an IPO of Fidelidade shares.
“We believe there will be lots of interested investors in Fidelidade and we’re preparing the company for this challenge,” Henriques said. “There is no date. It will be in the next few years for sure.”
Fosun holds an 85% stake in Lisbon-based Fidelidade while Portuguese state-owned bank Caixa Geral de Depositos SA owns the remaining 15%.
In Portugal, Fosun also holds a 20% stake in Banco Comercial Portugues SA, the country’s biggest publicly-traded lender. The Chinese company has been carrying out some asset sales and in January sold a 5.6% holding in that bank.
New Markets
Since Fosun took control of Fidelidade in 2014, the insurer increased its market share in Portugal to about 30%. Fidelidade also expanded in Latin America by setting up new operations in Chile and acquiring an insurance company in Peru.
Fidelidade, which is present in 13 countries worldwide, is currently looking for acquisition opportunities in Mexico, Colombia and Panama, Henriques said.
The CEO declined to give details about the timing and size of possible acquisitions in Latin America. The region accounted for 60% of Fidelidade’s international business in 2023, according to the company’s website.
“The objective is to continue growing on the international front,” said Henriques, adding that Fidelidade is like a “big fish in a small pond” in Portugal. “Our priority right now is Latin America.”
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