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Exclusive-Fidelidade plans IPO of private hospital unit Luz Saude –sources

By Andres Gonzalez, Pablo Mayo Cerqueiro and Sergio Goncalves

LONDON/LISBON (Reuters) - Portuguese insurer Fidelidade is exploring a potential stock market listing of its private healthcare subsidiary Luz Saude, six people familiar with the matter told Reuters.

Fidelidade, majority-owned by China's Fosun International, is set to name investment banks to arrange an initial public offering (IPO) after recently inviting pitches, three of the people, who spoke on condition of anonymity, said.

The insurance group hopes to secure a valuation of more than 1 billion euros ($1.1 billion) for Luz Saude, which runs close to 30 hospitals and clinics across Portugal, by offering a minority stake, one of the people said.

Luz Saude reported operating income of 599 million euros in 2022, a 10.6% jump from the year before, driven by growth in private healthcare services. Earnings before interest, tax, amortisation and depreciation (EBITDA) grew 26.9% to 82 million euros.

Deliberations are preliminary, and a transaction might not materialise, the people cautioned. They come after Fidelidade acquired the remaining 49% of Luz Saude it did not already own from parent Fosun in September.

Luz Saude referred comment to Fidelidade, which declined to comment. Fosun did not reply to a request for comment.

An IPO would mark a return of Luz Saude to the stock market after the healthcare group stopped trading on Euronext Lisbon in 2018.

It could also awaken Europe's IPO market, after activity levels plunged last year on the back of soaring interest rates and economic uncertainty.

While dealmaking has slowed across the board amid inflation and macroeconomic fears, healthcare remains one of the most active corners of the market, with $131 billion worth of mergers and acquisitions globally in the first four months of the year, according to Refinitiv Deals Intelligence.

($1 = 0.9084 euros)

(Reporting by Andres Gonzalez and Pablo Mayo Cerqueiro in London and Sergio Goncalves in Lisbon; editing by Elisa Martinuzzi and Louise Heavens)