South Africa's Mediclinic to buy Al Noor Hospitals

* Mediclinic to buy Al Noor for around 1.4 bln stg

* Mediclinic to take on Al Noor's London listing

* NMC Health (LSE: NMC.L - news) has also shown interest in tie up with Al Noor (Adds analyst comment, deal value, Mediclinic share price)

By Paul Sandle

LONDON, Oct (HKSE: 3366-OL.HK - news) 14 (Reuters) - South Africa's Mediclinic Intl has agreed to buy United Arab Emirates' Al Noor Hospitals Group for around 1.4 billion pounds ($2.2 billion), gaining the upper hand on rival NMC Health in a tussle for expansion in the fast growing Gulf region.

The deal will double the South African group's presence in the UAE, further diversifying out of its slow growing home market after a Swiss acquisition in 2007 and the stake it bought in Britain's Spire Healthcare (LSE: SPI.L - news) in June.

But NMC Health, already a major player in the UAE, vowed to fight on, saying on Wednesday it remained committed to a tie-up with London-listed Al Noor.

Shares (Berlin: DI6.BE - news) in Al Noor jumped 19 percent to 1,185 pence -- above the 1,160 pence cash offered in one of the alternatives proposed by Mediclinic -- and valuing the company's equity at 1.38 billion pounds ($2.12 billion), as investors anticipated a battle for the group.

The deal is structured as a so-called reverse takeover, with Mediclinic set to take on Al Noor's London listing as its primary listing. Mediclinic shareholders will receive 0.625 shares in the new company for each of their shares.

If Al Noor shareholders opt for an alternative offer to receive shares in the new company, the value of the deal including a special dividend of 328 pence a share, is about 1,228 pence a share, based on Mediclinic's closing price on Tuesday, pushing the deal's value above 1.4 billion pounds at Wednesday's prices and pound exchange rate.

Mediclinic's Chief Executive Danie Meintjes, who will remain CEO after the deal, said the combined group would be the largest private healthcare provider by revenue in the "highly attractive growth market of the UAE".

The deal will create a group with a turnover exceeding $4 billion operating 73 hospitals and 35 clinics.

NMC Health, which is also listed in London, said it had made an informal cash-and-shares offer to buy Al Noor on Oct. 9, days after Al Noor and Mediclinic said they were in talks.

Al Noor Chief Executive Ronald Lavater said there was a "compelling strategic fit" with Mediclinic, and together they could expand coverage and service delivery in the Gulf region.

He said the board had considered the NMC Health proposal and had concluded it was "inferior both on the value and on the deal certainty".

The tie-up with Mediclinic is backed by the two major shareholders in Al Noor, Sheikh Mohammed Bin Butti Al Hamed and Kassem Alom, who combined hold 34.3 percent, the companies said.

"Mediclinic and Al Noor are a good fit. I don't think NMC has the same complementary portfolio," said Anchor Capital's chief investment officer Sean Ashton.

NMC (Other OTC: NMCX - news) , however, was undeterred. "This confirms our belief in the competitiveness of our initial possible offer and that the combination of NMC and Al Noor has the strongest strategic and financial rationale for all stakeholders," it said.

Mediclinic shares were down 3.25 percent at 113.41 rand by 1440 GMT.

($1 = 0.6487 pounds) (Additional reporting by Tom Arnold in Dubai and TJ Strydom in Johannesburg; Editing by Keith Weir and Mark Potter)