UPDATE 1-Temasek, KKR competing to buy stake in Philippine hospitals group-sources

* Shortlisted bidders include Temasek, KKR and CVC-sources
* Healthcare sector fancied by global investors
* M&A is preferred option for hospital unit - sources
* Sale could rank as biggest healthcare deal in country
* IPO is seen as back-up plan - sources

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By Anshuman Daga
SINGAPORE, Sept 11 (Reuters) - Singapore state investor
Temasek Holdings TEM.UL and buyout firm KKR KKR.N are among
the suitors who have advanced to the second round of an auction
to buy into the hospital unit of Metro Pacific Investments Corp
MPI.PS , sources told Reuters.
The unit, which operates 14 hospitals, many of which are
among the largest and most modern in the Philippines, had
attracted interest from more than a dozen investors. The sale comes as global investors scout for targets after
raising billions of dollars in the last few years.
Southeast Asia - home to a large number of fast-growing
companies - is viewed by investors as an attractive prospect,
due to strong healthcare spending.
Last month, Metro Pacific announced plans to sell a minority
stake in its unit at a valuation of up to $2.5 billion, which
could make it the country's biggest healthcare deal.
Buyout firm CVC and strategic investors figure among the
bidders, said the sources, who have knowledge of the matter.
The bidders are valuing the hospital unit at up to $2
billion, pegging its valuation at just over 20 times next year's
estimated core profit, as they seek a majority economic stake in
it, the sources added on condition of anonymity as the talks are
private.
Sources said the Philippine conglomerate's primary plan is
to bring external institutional investors into the hospital
chain despite an IPO application filed last week. "Metro Pacific wants to get a transaction done before the
end of the year and a M&A remains the basic assumption," said
one source. "If the bids don't come in as expected, the IPO
gives the company a second option," the source said.
The group, which owns an 85.6% stake in the hospital unit,
says the funds will be used to cut debt and support the hospital
group's expansion.
Sources expect the foreign bidders to team up with local
companies.
CVC, KKR and Temasek TEM.UL declined comment, while Metro
Pacific did not immediately respond to requests for comment.
Singapore sovereign wealth fund GIC GIC.UL , which bought a
14.4% stake in the hospital unit in 2014, and has an option to
boost its holding via an exchangeable bond, is open to paring
its stake, the sources said. GIC declined comment.
Metro Pacific Investments is a unit of First Pacific Co Ltd
0142.HK , that is owned by Indonesian tycoon Anthoni Salim.