Spire Healthcare, one of the biggest private hospital companies in the UK, today agreed to a £2.1 billion takeover by Australian plc Ramsay Health Care in a deal that could trigger rival bids.
The deal values heavily indebted Spire’s shares at just under £1 billion with the rest of the deal value made up of its debt.
Priced at 240p a share, it comes three years after Spire rejected an offer from its biggest shareholder, South Africa’s Mediclinic at 300p.
Spire has 39 hospitals and clinics across the UK and treated 750,000 patients last year.
Ramsay is a £9 billion company on the Australian stock exchange with 37 facilities in the UK, including a significant business with the NHS.
Like other private hospital groups, Spire suffered from the lack of non-Covid treatments being carried over the last year, although it did win around £1.6 million in Government contracts for the pandemic.
The takeover represents a 24.4% premium to Spire’s pre-deal share price or 48% higher than its average value over the previous 180 days.
Mediclinic’s bid in 2018 was all funded in shares, which have fallen sharply since. Today’s deal is in cash, which Spire sources said brought more certainty to shareholders. Mediclinic retains a near-30% stake in the company and said it would vote in favour of Ramsay’s offer.
Other big investors include FIL, Aberforth Partners and Toscafund which are yet to declare their hand.
Shares in Spire fell sharply since 2016 amid disappointment in the amount of work it was contracted for by the NHS. That decline hastened during the pandemic. Today, the stock jumped 24%, or 47p to 240p.
Analyst Charles Weston at RBC said the deal price was “no knockout”.
He suggested that the high numbers of NHS patients awaiting elective surgeries delayed during the pandemic meant the shares could have reached the offer price without a bid.
HCA was mooted as a potential counterbidder, although private equity firms could also come in offering more money.
Mediclinic shares jumped 9% in London. Its share of the bid spoils will be £287 million.