Private hospitals chain Spire Healthcare has revealed talks over a possible £1 billion takeover by its second largest shareholder, Toscafund Asset Management. The FTSE 250-listed company is in early stage discussions over a 250p-a-share proposed cash bid, which would value the group at approximately £1.01 billion.
Background of the bid
Toscafund, which already owns 18% of Spire, has made several previous proposals as part of a strategic review launched in September last year. Spire's largest shareholder, Mediclinic, holds nearly 30% of the company. Shares in Spire surged 45% in morning trading on Thursday, reaching nearly 220p each.
Spire's statement
Spire said: "Over multiple years, Spire Healthcare has made significant progress in strengthening care quality, diversifying revenue streams and driving efficiencies. The board remains highly confident in Spire Healthcare's standalone strategy and the value creation opportunity. However, the board has carefully considered the proposal together with its advisers and has concluded that the possible cash offer is at a value that the board would be minded to recommend unanimously to Spire Healthcare shareholders."
The company added: "Accordingly, the board is in discussions with Toscafund in relation to these terms and Toscafund is in the process of undertaking its confirmatory due diligence. These discussions are currently at a relatively early stage."
Spire's operations
Spire runs 38 hospitals and more than 60 clinics across England, Wales and Scotland. It also operates a network of private GPs and provides workplace health services to over 1,400 employers.
Analyst views
Peel Hunt analyst Miles Dixon said Spire has faced a lengthy period of bid speculation. He added: "We see value in excess of 250p at Spire – the UK landscape is only moving in one direction for private care – and a business that is fundamentally improved." However, he noted being "mindful of the parties involved and of fatigue around offers" and would "not be surprised to see this deal go through."
