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Well its on the rise again, is there another bid on the way?
Today's RNS relates to purchases made on Thursday. The way the SP has ticked up since then, I suspect they're still buying. We'll find out shortly what they hold now, & maybe why. Another bid in the pipeline?
Don't know about Tosca, but I know today for the 1st time since sale objected i'm in the blue :)
Tosca building their stake even further. Now up to 15.4%
Well, they will get a sniff of any unoficial chats over lunch regarding possible offers well before we will as PIs.
All we need is another bidder, then the fireworks will start.
We may well have a decent lump of debt, but we have a decently performing business. 250p was a bit of a punt by Ramsay - they know that.
Interesting that ToscaFund (who rejected the bid) is up to 14% of Spire now.
At the start of the bid process back in May, they held 5.4% I believe
Well it didn't fall like I expected it to. It looks like Ramsay are still around or most are now anticipating the improvement in operational and financial performance and realise this is worth around the bid price and likely some more on top. Positive. Alternately the hedgies are biding their time before dumping. Get on with it, I would like some cheap stock please.
From yesterday:
PEEL HUNT RAISES SPIRE HEALTHCARE TO 'ADD' ('HOLD') - TARGET 233 (240) PENCE
In no way do I blame Mr Ash for the current situation. Personally I’m happy we have him as our CEO. The main issue with Spire is as a result of the financial transactions carried out during Cinven’s ownership period. They sold the 12 “best” and most sellable freehold hospitals in 2013 to property investors for £704million on long leases with annually increasing rents. They did this as the hospitals weren’t performing as well as expected and they wanted to generate cash for their PE investment returns. They also floated the business with a significant amount of bank debt. Personally I would question why the Cinven representative is still a director. I suspect the former chairman was heavily involved in discussions with Mediclinic & Ramsay. I would give the new chairman plenty of time to steady the ship and look for new growth opportunities along with the Exec team.
I agree they have had a number of 'Corporate' incidents. That is unfortunate. I always saw Ash as a very capable COO type individual - he has proven himself in this area. This is what is key in terms of running the hospital empire - no big scandals, improved CQCs etc. They have done very well in this area. He isn't a big deal making CEO - and in all honesty we don't need that. The Chairman should have taken care of this in reality with the CEO assisting in making things happen. The Board got this wrong under the direction of the Chair. New Chair required - CEO may decide to go, but I don't think he needs to as such.
IMO there needs to be a change at the top of Spire. Ash and Co have had a number of catastrophic incidents during their tenure.
Time for them to do the decent thing and move on.
If I were Ramsay - I would separately negotiate the purchase of Mediclinic's stake and bide my time. They know Mediclinics price - they would likely get it for 240p given they require the cash and were in the first instance willing to sell for this amount. Maybe this will happen maybe it won't - I suspect not. I think Ramsay knew they were getting a good deal - my view - this is worth around 300p. I think they would have got the deal across the line at that level. This was however too rich for Ramsay who wanted this on the cheap and who can blame them. Spire is a good business operationally and improving all the time. It doesn't have the large premium London hospitals but not everyone wants to travel into London if they require surgery, especially at present. I think the regional model Spire have in place is very valuable indeed. Ramsay needed this deal and won't just walk away empty handed.
Spire now face the problem of selling the Mediclinic 29.9% stake. It was clear that Mediclinic needed the cash and the proper thing for them to do would have been to place their stake with a few Institutional investors in London. However they Board chose to try and sell the co quickly to Ramsay, that failed and now they are back to square one.
There’s a good business here imo and a market with infinite demand for the Spire specialist healthcare and medical services.
Hopefully the Board can take advantage of these opportunities and improve their financial results accordingly. Glah.
It may not even go lower as people like tosca know the real value so will be unlikely to sell at a massive loss now. It could fluctuate for a week or so but then I believe there will be a steady uptrend. I have worked for them for over 10 years and we have never know the place be so busy. Its mental!!
sorry just seen the news,
When do you think we'll hear the result, surely we should be informed as shareholders.
Give it a couple of days to bottom out and then fill ya boots I say. Clearly worth north of 3+ pounds per share!!
Not long to wait for the voting result!
I’m still astounded by the negative contents of the Board’s 5th July RNS. That RNS has guaranteed that if there is a “no” vote it will crush the share price tomorrow and in the short term. This is the same Board who turned down the Mediclinic bid price of c300p per share in 2017.
I have a strong suspicion that the vote did not accept the bid. I could be wrong but I just can't see it going through. I think you are right - some temporary carnage. The Board need to go after this - this will be the second costly error they have made if the bid doesn't go through. Yes the arbitrage funds will disappear and the share price will likely fall 20%-40% in the short run. In my opinion this will be a buying opportunity. The hospitals are still there and we have one of the biggest NHS waiting lists in history. This business has value - to extract this value will require a management team with the belief, motivation and appetite - I'm not sure that our management team have this. If the bid is declined this will (again) become a more significant part of my portfolio. It might go through but I think it unlikely - we will find out on Monday morning presumably.
I have no idea how the vote went yesterday. I sure hope the shareholders voted to accept the 250p bid because if they didn’t and Ramsay walk away, there is going to be carnage. I can’t see how the new chairman can stay, or how the Board can explain spending large amounts on advisor fees and distracting senior mgt at this critical time in the pandemic. Also the share register will now be full of arbitrage funds who bought for the price diff between sp and the bid price, can’t see them sticking around. So yes I hope the bid gets voted through even although I still believe the price is too low and the Mediclinic wish to sell should have been handled through a share placing and not a bid.
Anyone heard how it went? I know it was moved to yesterday, hopefully one way or another we'll know on Monday.
Would anyone like to hazard a guess as to why the shares are trading @ 2.35, when the Ramsay deal on the table is £2.50?
I would assume that most Investors believe that this Offer will be rejected.
Agreed they need new management and a new Board that will fulfil the potential of their business not one that cuts and runs at the first opportunity.
Too much going cheap of the market these days.
I wasn't aware of this but if this is indeed the case then there is no way this deal is going through. This is just my take personally - I think the next 3/4 years will be good for Spire. I don't think we will return to the margins of old just yet, but I think there are good profits to be had. People are more willing to access private treatment than ever before at present - often out of necessity. I think the takeover bid is cynically low in all honesty. I would prefer to have a chance to see where the business can take itself. I do however think that management's position is now untenable - they turned down a higher offer (315p) 4 years or so ago, now accepted one at 240p which they managed to increase to 250p. We are in a significantly stronger position than we were then. Everything looks positive. Let's remain independent and see how things go.
Looks like a dead duck deal unless Ramsay increase their bid price above their “final” offer price. Personally I think Ramsay will increase their offer as their options for acquiring hospital chains are very limited and I’m sure the Spire board know that. What surprised me was the negative tone of the 5 July RNS from the Spire Board. Costs increasing, capex required, lack of NHS referrals etc. Aren’t sellers meant to talk up their business prospects? Also giving en EV/ebitda ratio based on 2019 figures is worthless. Surely looking to 2022 and 2023 forecast ebitda is more relevant for shareholder’s decisions?