Spire Healthcare rejects takeover offer from Mediclinic

Mediclinic warned in February that profits would be impacted by cuts to health benefits in the United Arab Emirates

Private healthcare provider Mediclinic (LON:MDCM) was the biggest faller on the FTSE 100, down 1.4%, as mid-cap Spire Healthcare (LON:SPI) rejected a takeover bid from its 30% shareholder.

However, Spire's board, excluding Chief Executive Officer Danie Meintjes rejected the offer, claiming that it "significantly undervalues Spire and its prospects".

Mediclinic, which already owns 29.9 per cent of Spire, last Wednesday submitted an offer valued at 298.6 pence per share.

Just previous year Mediclinic took over Abu Dhabi's Al Noor Hospital Group, leaving analysts wondering whether the company was in the best position to acquire another big asset so soon.

Spire's shares jumped 6% on Friday to 261.3p amid escalating rumours that a deal could be in the pipeline.

"Shareholders are strongly advised to take no action in relation to the proposal". In contrast in London, shares of Mediclinic dropped 0.4 percent to 638 pence.

However, the bid by Mediclinic has revived interest in the firm, with the latter given until 20 November to make a renewed offer to Spire.

South Africa's Mediclinic, which owns nearly 30% of Spire, approached the company last week with an offer that valued its shares at 298.6 pence each, Spire said in a statement on Monday.

Spire, formed from the sale of Bupa Hospitals to Cinven in 2007, made its stock market debut in 2014.

Mediclinic bought its Spire stake for about 430 million pounds ($567 million) from private equity firm Cinven in 2015. Monday's rise carried the shares to their highest since before September 14, when a 75 percent slump in first-half profit and lower than anticipated revenues in July and August sent the stock down as much as 25 percent.

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