(Alliance News) - Spire Healthcare Group PLC on Wednesday said it has agreed to a GBP1 billion takeover offer from clinical practices operator Ramsay Health Care Ltd.
The offer of 240 pence per share in cash is 24% above Spire's closing price on Tuesday of 193.00p. The offer values Spire's entire share capital at GBP999.6 million and gives the hospital operator an enterprise value, including debt, of GBP2.06 billion.
Spire shares jumped 25% to 240.53p each in London on Wednesday morning. Mediclinic shares were trading 8.0% higher in Johannesburg at ZAR65.26 each. In London, the stock was up 8.4% at 334.40p a share.
"The proposed combination builds a broader platform to take advantage of the opportunity for sustained growth in the GBP5.8 billion UK private hospital sector, with the aim of delivering best-in-class healthcare to all patients," said Ramsay Chief Executive & Managing Director Craig McNally.
Spire directors, advised by Goldman Sachs International and JP Morgan Cazenove, consider it to be fair and reasonable, and they unanimously recommend that Spire shareholders vote in favour of the transaction.
Mediclinic International PLC, a 29.9% shareholder, said it has agreed to the takeover offer for its holding. The offer values this at GBP287.8 million, it noted. Mediclinic said it has provided Ramsay with an irrevocable undertaking to vote in favour of the offer.
Mediclinic - a private healthcare provider - said the funds received from the sale of its shareholding in Spire will reduce leverage, providing additional financial flexibility to pursue growth opportunities.
Separately, Mediclinic said it adapted swiftly to the pandemic with strong rebound in patient activity as Covid-19 restrictions eased, delivering solid second-half financial performance.
For the financial year that ended March 31, the company reported a 3% fall in revenue to GBP3.00 billion. On a constant currency basis, revenue was 1% lower on the year prior, hurt by Covid-19-related lockdown measures and non-urgent elective procedure restrictions in the first half of its financial year.
Mediclinic noted that it had experienced stronger demand in the second half of the year, which delivered revenue growth of 1%.
The company swung to pretax profit of GBP104 million from a GBP275 million loss posted the year before. This is after impairment of intangible assets was reduced to just GBP1 million from GBP482 million.
The company said dividend remains suspended as part of its broad response to maintaining its liquidity position. A year ago, Mediclinic paid a 3.20p per share payout.
Going forward, Mediclinic said it is positioned for growth as restrictions ease and patient demand increases, but remained cautious given the ongoing pandemic.
"We are confident in our ability to continue executing on our strategy and we are well positioned to deliver revenue and earnings before interest, tax, depreciation and amortization growth across all three divisions in FY22, despite our expectations that there are likely to be further waves of the pandemic in the coming months," said Chief Executive Ronnie van der Merwe.
Mediclinic said Alan Grieve and Trevor Petersen, both independent non-executive directors, will retire at the end of their second three-year term on February 14, 2022.
The FTSE 250-listed company said it is in the process of actively recruiting two new independent non-executive directors and it will make further announcements when it is in a position to confirm the appointments.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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Spire Healthcare (SPI)