The additional sweetener for KKR lies in Ramsay’s extensive property portfolio, given most hospitals are owned rather than leased. Liberating this property would give KKR the opportunity for selling the land into a trust and having the hospitals run by an operating company.

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This model labelled “opco/propco” is particularly fashionable in private equity circles.

Thus healthcare and infrastructure are the “new black” sectors for investors, as buyers scramble for the kind of quality companies with predictable cash flow that make financing the acquisition easier.

It is also no coincidence that the cash sloshing around in the system looking for somewhere to invest has bolstered acquisition activity as private capital chases quality assets.

And healthcare is especially hot.

There is a particularly aggressive takeover battle being run between two private equity firms for IVF healthcare group Virtus Health. And CSL last year bid $16.4 billion for Vifor Pharma.

Ramsay itself has not been flatfooted in growing its global fleet of hospitals, having unsuccessfully bid for UK hospital operator Spire last year, but successfully completed the purchase of British mental health care operator Elysium, which it closed in February.

Investors will be hoping that the cautious welcoming of KKR will flush others into an auction process.

The proposal from KKR is confirmed but is not yet a formal offer. However, Ramsay has given this suitor due diligence which suggests the $88 per share offer is in the ballpark.

It represents a 37 per cent increase on Ramsay’s closing price on Tuesday, which is a little smaller than the usual takeover premium. The stock was trading at a high of around $80 in February 2020 before COVID hit.

While the offer is attractive enough to warrant the Ramsay board allowing KKR to take a closer look at the books, some investors will question whether it has hit the sweet spot.

KKR will need to have the approval of the board to get any deal over the line. It will also need to have the support of Ramsay’s largest shareholder, the Paul Ramsay Foundation.

Investors will be hoping that the cautious welcoming of KKR will flush others into an auction process.

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