The many extracts on these pages are from copyright material. They are owned by the reference given or its owner. They are reproduced here for educational purposes and to stimulate public debate about the provision of health and aged care. I consider this to be "fair use" in the common interest. They should not be reproduced for commercial purposes. The material is selective and I have not included denials and explanations. I am not claiming that all of the allegations are true. The intention is to show the general thrust of corporate practices as well as the nature and extent of any allegations made.

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Hospitals of Australia Trust was floated in 1986 and Mayne Nickless bought a 29% interest. Mayne increased its interest, took over management and in 1992 bought out other share holders forming HCoA. HOA had prospered and grown.

Australian section     

Hospitals of Australia (HOA)
(1986 to 1991)


Hospitals of Australia Trust was formed by two entrepreneurs. They sold their holding into a trust which was listed on the sharemarket in 1986. By this time Mayne Nickless had become interested in health care. It became a dominant 29% share holder. Alpha Pacific, later to become Alpha Healthcare was also a large shareholder with 10%. The float received strong institutional support and initially the trust performed well.

1991 Review of HOA

Mr Leonard and Mr Hinds started the business in what was Hospitals of Australia Trust, restructured in 1988 to divide ownership and management of the trust's hospitals between an investment fund and the company.

The two hospital entrepreneurs sold six hospitals into the original trust when it floated in 1986, in exchange for a big shareholding in the trust.
MAYNE IN 95C BID TO WRAP UP HOA SHARES Australian Financial Review February 13, 1991

1986 The float

Plans are well advanced for the $41 million float of a trust which operates a string of private hospitals and medical centres and in which Mayne Nickless Ltd could have a large investment interest. The trust is known as Hospitals of Australia. Its manager, Oceanic Funds Management (Vic) Ltd, until recently, was part of Mr Mark Hohnen's Oceanic Equity group and is now owned by the listed APA Holdings Ltd. Oceanic Equity Ltd now has a 19 per cent interest in APA.
The ownership structure of the trust will be public investors holding about 48 per cent, Mayne Nickless with a possible holding of 29 per cent and vendors of private hospitals to be acquired with 23 per cent.
Hospitals Trust To Be Floated Australian Financial Review January 10, 1986

1986 Successful float

The Hospitals of Australia trust took only a day to raise the $31 million it wanted in public subscriptions before the promoter, Oceanic Funds Management Ltd, closed off applications.

Oceanic was embarrassed by the demand for units, though there was little in it for the smaller investor after Mayne Nickless Ltd took a hefty 29 per cent stake through a prearranged $12 million investment.
GPT Does Well But How About Markalinga? Australian Financial Review February 24, 1986

1986 Initial performance

So far Hospitals of Australia has done well for its investors. It came on the boards in March at $1.15 and is now trading at $1.55, a little below the year's high of $1.60.
Shares In SA Health Group Snapped Up Australian Financial Review July 10, 1986

The financially successful US model of health care was the ultimate goal. Mayne’s early interest in this is reflected in press reports. Nearly 10 years later it aligned itself with the insurer AXA and the minister for health, Dr Wooldridge in an attempt to drive doctors into managed care.

1986 Interest in managed care

The visit to Australia recently of Dr Fred Wasserman, chairman of one of the biggest health maintenance organisations in the US, Maxicare, illustrates the growing interest of private hospital operators in Australia in maintenance organisations. Health maintenance organisations provide a form of pre-paid health care, where members are not charged for individual services as long as they use particular doctors and hospitals. Wasserman's visit was sponsored by Hospitals of Australia Trust, which has six private hospitals in NSW and plans to go national. Hospitals of Australia is managed by Oceanic Trusts, in turn controlled by entrepreneur Garry Carter.
Healthy Interest In Pre-paid Care Business Review Weekly October 10, 1986

Hospitals of Australia continued to grow steadily and did well financially. A deal to buy the controversial Dr Ian McGldrick’s 22 hospital empire, Consolidated Health Care Group, fell through at the last minute. At this time the public system was under-funded and overloaded, particularly so in NSW. The NSW government was eager to move private patients out of public hospitals into the private system. Contracts to build private hospitals adjacent to public hospitals were offered and enthusiastically embraced.

At that time in the not-for-profit dominated health system there was still a value system which promoted a genuine humanitarian role and social responsibility. This is a luxury in a truly competitive system but this had not yet arrived.

1987 The public interest

HOA also plans to establish the Hospitals of Australia Research Foundation, to participate in health research and policy analysis.

"We believe that, while making good profits for our unit holders, we can use some of our profits in the public interest," Mr Smith said.
HOA To Become Largest Private Hospital Group Australian Financial Review January 30, 1987

1987 Interest in Royal North Shore colocation

Hospitals of Australia recently put in a proposal to build a $50 million private hospital within the Royal North Shore complex. "We are confident it will be built," said Mr Grant Smith, general manager of APA Oceanic Funds Management Ltd.

"It is a sign of things to come where the Government will involve private health care within the precincts of public hospitals."

Mr Smith says the APA group is looking to provide good quality medical care at a reasonable cost for middle-class Australians - which means those with private insurance.
TYCOONS FIND GOLD IN HOSPITAL QUEUES Sydney Morning Herald February 17, 1987

1987 McGoldrick ditches HOA for HLC

The investment trust, APA Oceanic Funds Management Ltd, which manages Hospitals of Australia, had announced in January that it would become Australia's biggest private hospital group with the acquisition of Dr McGoldrick's hospitals.

But yesterday Dr McGoldrick said his family company, Consolidated Health Care Group, had sold the hospitals to an Adelaide hospital chain, Health and Life Care Ltd.
DOCTOR SELLS OFF HIS CHAIN OF 21 HOSPITALS Sydney Morning Herald March 24, 1987

1987 Growth

Hospitals of Australia has announced the purchase of two more private hospitals in Sydney as part of its objective of building the group total to 2,000 beds by 1990.
HOA Buys Two More Hospitals Australian Financial Review June 10, 1987

1987 Growth

BLE Capital and the Norton group jointly redeveloped the Hoscare, 100-bed private hospital at Strathfield, in Sydney's west, at a cost of $15 million. The property has since been sold to the Hospitals of Australia group.
Berida Manor's $12m Upgrade Australian Financial Review June 26, 1987

HOA went through a bad spell in late 1987. The ultimate owner of the manager of the trust fund was involved in some sort of financial scandal. Several staff resigned and formed a new management company. Mayne Nickless led a successful move to force the resignation of the manager and transfer management to the new group.

1987 Problems with manager of the trust

Hospitals of Australia is on the road to recovery after a number of events have resulted in the trust's units being severely marked down by the market. Uncertainty surrounding the future of the Oceanic Funds Management business, part of the APA group, which manages the trust, together with the aborted acquisition of the Consolidated Health Care group, has prompted investors to mark the units down from a high of $2.40 in January to $1.60 this week.
Hospitals Of Australia Back On The Road To Recovery Australian Financial Review June 12, 1987

1987 A new manager

Oceanic Funds Management Ltd has quit as manager of the Hospitals of Australia Trust and nominated Mr Grant Smith's Global Funds Management Ltd as its replacement.
Global Nominated To Manage Hospitals Trust Australian Financial Review August 17, 1987

Alpha Pacific attempted a takeover of the trust but when Mayne refused to sell it sold its holding to Mayne instead giving Mayne a controlling holding.

1988 Mayne buys Alpha's holding in HOA

Hospitals of Australia also headed top turnover lists as health care company Alpha Pacific sold its 10.5 per cent stake, or 5.65 million shares, in a single special sale at $1.82. This was 14c above the market price of $1.68, with major shareholder Mayne Nickless snaring the parcel to raise its stake in the company to 50 per cent. Mayne Nickless fell 12c to $5.56.

1988 Minority shareholders disadvantaged

Mayne Nickless' purchase of 13.3 per cent of the Hospitals of Australia Trust in one crossing after the close of trading last night demonstrates the vulnerability of trusts as long as they lie outside the protection of the Acquisition of Shares Code.

Equally, it illustrates yet again that minority unitholders can be denied the opportunity to share in a price well above the recent market in a deal in which control has passed.
TRUSTS IN DIRE NEED OF PROTECTIVE CODE Sydney Morning Herald May 10, 1988

1988 Alpha's failed takeover

Alpha Pacific, which confirmed it had sold its 10.5% stake in Hospitals of Australia this week after failing to agree on a takeover price with Hospitals' controlling share-holder, Mayne Nickless, says it is looking for other opportunities.
Hot Spots Business Review Weekly May 13, 1988

When the tax laws were changed HOA split into two. One company owned the hospitals and paid no tax. The other operated them and paid taxes. Mayne took on a greater role in managing the business.

1988 Changing the structure

At present, the day-to-day running of the hospitals and the asset management of their property portfolios are conducted by Hospitals of Australia Trust manager Global Funds Management Australia Ltd.
Mayne Nickless directors - including managing director Mr Ian Webber, vice-chairman Mr Robert Rose and Mr Lindsay Jarman - will join the Hospital of Australia board.
HOSPITALS TRUST IN MAJOR SHAKEDOWN Australian Financial Review October 4, 1988

1988 Changing the structure

The trust has a history of strong profit performances and now owns 11 hospitals, most of which are in New South Wales.

Last week, unitholders of HOA approved the restructuring of the trust into two separate entities. The HOA Investment Fund will retain ownership of the hospital properties.

It will lease these properties to Hospitals of Australia Limited which will manage the hospitals. The changes were made because of the Government's intention to tax trading trusts.
SICKNESS CAN PAY WELL Sydney Morning Herald October 5, 1988

1988 HOA's credibility

In an industry which at least in its public face seems to have more than its share of controversial entrepreneurs, Hospitals of Australia has been the successful exception so far. Nevertheless, it does seem an odd fit in a company which publicly states it is staying with the businesses that it knows
MAYNE NICKLESS FIND ITS GROOVE Australian Financial Review October 12, 1988

1988 HOA's credibility

The two most highly regarded listed private hospital operators, Hospitals of Australia Trust and Markalinga Trust, have both been on the boards for between two and three years, and have established track records. The other three stocks - of which only two could be considered at this stage - have much less of a record and appear to be much more entrepreneurially based.
PROS AND CONS OF HOSPITAL STOCKS Australian Financial Review December 12, 1988

In 1991 Mayne Nickless finally bought Hospital Corp of Australia from Hospital Corp of America. Soon after it moved to take over HOA Ltd the management company for the trust hospitals. Not long after that it acquired the investment section so that the whole operation was Mayne owned.

At this time Dr Barry Catchlove joined HOA. Mayne was now the largest operator of hospitals in Australia.

1991 Buying HCA

Mayne Nickless Ltd is to pay $106.3 million for Hospital Corporation Australia Ltd (HCA), continuing its diversification drive and making it the nation's largest private hospital operator.
MAYNE BUYS HOSPITAL GROUP Sydney Morning Herald February 2, 1991

1991 Buying all of HOA

Mayne Nickless Ltd has bought out the two big minority shareholders (Leonard and Hinds) in its private hospital subsidiary, Hospitals of Australia Ltd, and bid 95c a share for the remaining 17.6 per cent of shares on issue, valuing HOA at $42.7 million.
Mayne Nickless, which has had control of HOA for several years, replaced Mr Leonard with hospital administrator Mr Barry Catchlove at the beginning of January.
MAYNE IN 95C BID TO WRAP UP HOA SHARES Australian Financial Review February 13, 1991

1991 Forming HCoA

Mayne Nickless formed the basis of HCOA earlier this year with the purchase of Hospital Corporation of Australia Pty Ltd for $79 million net of cash, and by mopping up the minorities in Hospitals of Australia Ltd in a takeover valuing the group at $42.7 million.
MAYNE NICKLESS BUYS MELBOURNE HOSPITAL Australian Financial Review December 17, 1991

1992 Forming HCoA

MAYNE Nickless Ltd has changed its mind about selling its 53 per cent stake in the listed HOA Investment Fund and instead has offered to buy the balance of the fund for about $41 million.

The move is intended to simplify the group's health care division by bringing about $96 million of property and equipment at hospitals now managed by the Mayne Nickless unit, Hospitals of Australia Ltd, into the group corporate structure.
MAYNE IN $41M BID FOR FUND Australian Financial Review December 18, 1992

The stage was set for Mayne to adopt the diversification model espoused by Health Corp of America and switch the main thrust of its operations from transport to a diversified health operation embracing multiple health care strands, hospitals, radiology, laboratories, medical practices and eventually pharmacy. Barry catchlove was an enthusiastic convert.

The scandal following the exposure and conviction for collusive practices in Mayne’s transport operations in 1994 left a vacuum. Transport was no longer profitable. When Blythway was forced out as CEO Dr Barry Catchlove seized the opportunity. He persuaded the new CEO Bob Dalziel to shift the entire focus of the company from transport to health to fill this vacuum.

These developments are described on the Mayne web pages.

Click Here to go to the Mayne pages

1998 Focus switches to health

It is not hard to see why Mayne Nickless would move to the health care index (on the share market). Its involvement in healthcare, which began with a small investment in Hospitals of Australia in 1986, has grown to the point where - post-Optus - HCoA will generate about 40 per cent of Mayne's revenue, contribute half of profit and account for about 70 per cent of the company's funds employed.
Mayne Nickless Life After Optus Shares Magazine November 1, 1998

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Michael Wynne