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    MDC   GB00B8HX8Z88

MEDICLINIC INTERNATIONAL PLC

(MDC)
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Australia's Ramsay Health Care to buy UK's Spire for $1.4 billion

05/26/2021 | 04:21am EDT

(Reuters) - Australian hospital operator Ramsay Health Care on Wednesday said it would buy British peer Spire Healthcare Group for 1 billion pounds ($1.42 billion) to strengthen its healthcare business in the country, sending Spire shares up 26%.

The 240 pence per Spire share offer is at a 24.4% premium to the stock's last closing price.

Spire said in a joint statement with Ramsay that the parties had reached an agreement on the terms of the deal, and recommended that shareholders vote in its favour.

London-listed Spire, which has major contracts with Britain's state-backed NHS healthcare network, has been hit by a drop in routine patient visits to hospitals during the COVID-19 pandemic, and had already been suffering from fewer referrals to private hospitals before then.

The group, which operates 39 hospitals in the UK, posted an adjusted pre-tax loss of 231 million pounds ($326.80 million) last year, when it treated almost 750,000 patients, after reporting a profit of 9.6 million pounds in 2019. It had said it expects profit to return to pre-pandemic levels this year.

"Ramsay will work closely with the Department of Health & Social Care to ensure all shared objectives are closely aligned and we stand ready to support the NHS in tackling the significant increase in waiting lists and the return of elective procedures in the UK," said Craig McNally, Ramsey's CEO and Managing Director.

Ramsey added that it would engage with Britain's competition regulator over the deal. The UK Competition and Markets Authority may require it to divest certain hospitals and clinics for the deal to go through.

"This is a good bid and should be acceptable to shareholders. But, there will be competition authority issues and getting the deal over the line will not be straight-forward," Graham Doyle, health equity research analyst at brokerage firm Liberum, said in a note.

The deal will deliver high single-digit earnings per share from 2024, Ramsay said, adding that the acquisition will be funded through existing debt facilities.

Mediclinic International, Spire's biggest shareholder with a 29.9% interest, separately said it would vote in favour of the proposal by Ramsay.

($1 = 0.7064 pounds)

(Reporting by Arundhati Dutta and Pushkala Aripaka in Bengaluru; Editing by Jacqueline Wong and Arun Koyyur and Kirsten Donovan)

By Arundhati Dutta


© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
MEDICLINIC INTERNATIONAL PLC -1.35% 278.6 Delayed Quote.-1.21%
RAMSAY HEALTH CARE LIMITED -0.12% 64.14 End-of-day quote.3.15%
SPIRE HEALTHCARE GROUP PLC 0.00% 222 Delayed Quote.42.86%
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Financials
Sales 2022 3 088 M 4 294 M 4 294 M
Net income 2022 152 M 212 M 212 M
Net Debt 2022 1 525 M 2 121 M 2 121 M
P/E ratio 2022 14,7x
Yield 2022 1,62%
Capitalization 2 054 M 2 856 M 2 856 M
EV / Sales 2022 1,16x
EV / Sales 2023 1,21x
Nbr of Employees 30 470
Free-Float 55,3%
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Mean consensus HOLD
Number of Analysts 9
Last Close Price 278,60 GBX
Average target price 336,00 GBX
Spread / Average Target 20,6%
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Managers and Directors
C. A. Ronnie van der Merwe Chief Executive Officer & Executive Director
Petrus Jurgens Myburgh Chief Financial Officer & Executive Director
Inga Kristine Beale Non Executive Chairman
Dirk Le Roux Chief Information Officer
Rene Toua Chief Clinical Officer