Spire Healthcare rejects £1.2bn Mediclinic takeover bid

Spire Healthcare rejects £1.2bn Mediclinic takeover bid”

Britain's Spire Healthcare has rejected a full takeover offer from South African private hospitals operator Mediclinic International (MDCM.L), which already owns almost 30 percent of its stock, sending its shares up 12 percent.

Mediclinic, which already owns 29.9 per cent of Spire, last Wednesday submitted an offer valued at 298.6 pence per share.

Spire shares were up 13.1 percent at 295.6 pence by 0807 GMT, on track for their biggest-ever daily gain and only a slight discount to the value of Mediclinic's terms.

Mediclinic said in a trading statement on October 17 that Spire made a provision amounting to £27.6m for the potential cost of a settlement relating to civil litigation over surgeon Ian Paterson, which is before taking account of any potential further recoveries from insurers. Monday's rise carried the shares to their highest since before September 14, when a 75 percent slump in first-half profit and lower than anticipated revenues in July and August sent the stock down as much as 25 percent. Its share price lost over 5% in the last month and over 10% in the year-to-date.

Spire runs 39 hospitals across England, Wales and Scotland. Spire shares closed at 261.3p on Friday.

The group said in a stock market announcement that the cash and shares deal tabled by Mediclinic "significantly undervalues Spire and its prospects". That may provide an opportunity for companies like Johannesburg-listed Netcare and Mediclinic to pick up the slack in offering critical services to the aging British population. The company has until November 20 to announce a firm intention to make another offer or that it will not do so. The takeover offer is its fourth proposed transaction this year, according to Bloomberg data.

Shares of Mediclinic dropped 0.4% to 638 pence in London. Contributions of 200 words or more will be considered for publication.

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