05 Jul Mediclinic International turns down £3.4bn takeover bid from consortium
In a recent update on the London Stock Exchange, the board of private hospital giant Mediclinic International has revealed that it rejected a £3.4 billion takeover bid from a consortium.
According to a report by business newspaper City A.M, an unsolicited proposal was submitted to the multi-national private healthcare services group on 26th June 2022. It concerned a possible and conditional cash offer to purchase all the remaining issued (and to be issued) share capital in the company. The price proposed was 460p per share, along with the final proposed dividend for 2021/22 of 3p per share.
The offer came from a consortium which includes South African investment firm Remgro, whose chair is billionaire luxury goods tycoon Johann Rupert. The South African entrepreneur also owns a 45% stake in Mediclinic already, and the recent bid was to snap up all remaining share capital and take control of the international healthcare company.
The other party in the consortium is believed to be MSC Mediterranean Shipping Company SA, which is acting through its subsidiary company SAS Shipping Agencies Services Sàrl.
Both Mediclinic and Remgro are based in Stellenbosch, a town in the Western Cape province of South Africa.
The healthcare giant has divisions in South Africa, Namibia, Switzerland and the Middle East, operating around 74 hospitals and a number of outpatient clinics, mental health facilities and subacute hospitals across these regions.
Mediclinic International also owns nearly 30% of Spire Healthcare Group, which is a leading healthcare group operating in the UK and listed on the London Stock Exchange.
According to a recent Financial Times article covering the takeover bid, the company is set for a profitable year ahead. This growth is “buoyed by a “significant” rise in the number of patients and greater demand for services such as elective procedures as Covid-19 recedes.”
Unanimous rejection from Mediclinic board
It took less than five days for the Mediclinic International board of directors to reach a unanimous decision with regard to the £3.4 billion takeover bid. It was rejected wholesale on 31st May, with the board releasing a statement saying:
“The board of Mediclinic (excluding the Remgro representative) considered the proposal, together with its advisers, and concluded that it significantly undervalued Mediclinic and its future prospects.”
The firm also urged shareholders not to take an action in response to the news.
The consortium will now need to decide whether to make a further offer or withdraw any intention to do so. A deadline of Thursday 7th July at 5pm has been set for the decision to be made.
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