It would appear that M&A action could be back on the cards for independent hospital group Spire Healthcare. The rumour is that major shareholder Mediclinic International with 29.9% is looking at bidding for the remainder of the company, something which will no doubt delight the other big shareholders, Woodford Investment Management at 14% and our friends at Blackrock at 6.38%.
When the stock was previously being touted on the rumour mill it was allegedly the case that Mediclinic was working with Morgan Stanley to make an offer at a 30% premium to the then share price.
For those who like a bit of detail, Mediclinic is said to have bought its stake off Cinven for 360p. At the time it was suggested that Mediclinic would actually bid for the whole of Spire, and JP Morgan Cazenove said there would be a 35% premium paid for such a deal. The shares peaked at 400p last autumn before fading to present levels, after the bid speculation ceased.
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But as the legendary hedge fund supremo Hugh Hendry’s greatest saying reminds us, it is just as bad to be too early to a party, as too late. The situation now in July 2017 is that clever hedge funds (slight oxymoron) and canny investors are looking at accumulating Spire at current share price levels near 330p, not only because the downside seems to be limited on a fundamental sector basis, but also on the basis that Mediclinic will finally make its move after sorting out recent corporate issues of its own..
Indeed, analysts have also speculated that a large US player could swoop in to buy the whole Spire / Mediclinic shooting match at some.
But to focus on the matter at hand, it is believed that if Mediclinic came back to the table it would have to pay 450p a share given the strategic value of Spire, and a sum of parts valuation of the group.