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With so many on the NHS waiting lists, Spire Healthcare takeover looks a bargain

·1-min read
Hospital staff check on patients with Covid-19 (PA Wire)
Hospital staff check on patients with Covid-19 (PA Wire)

Everyone knows someone on an NHS waiting list.

Your auntie’s hip, your neighbour’s sinuses. We’re a nation of walking, or hobbling, wounded.

There are something like five million people in a holding pattern now the NHS has been so sideswiped by Covid.

Without a doubt, the NHS cannot cope on its own with this huge backlog. It must contract out a large chunk of those waiting to private hospitals or the political backlash will be huge.

Surely, then, perhaps more than ever, private healthcare is a great business to be in.

Ramsay Healthcare of Australia clearly thinks so. That’s why it’s just bid £2 billion to buy Britain’s Spire. But the markets have not been fans.

Spire shares were pushing 400p in 2016. Ramsay is offering 240p a share to take it out today.

One reason for the decline over the past five years is the lumpy revenues from the NHS, where trusts have handed over less work to private providers than expected. But surely Covid changes all that. And surely the takeover price for Spire should be higher than a mere 24% premium to last night’s share price.

Brokers at RBC suggest the shares would have got up to the bid price on their own fairly soon as the market woke up to the post-Covid bonanza. They raised the prospect of bids from HCA or private equity.

So far, the City think RBC’s wrong. Spire shares today rose to the offer price and no higher.

Its 30% shareholder has accepted the bid, meaning much of Ramsay’s work is done. A pity; Spire’s prospects are worth more.

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