Britain’s Largest Private Hospital Operator Sets Deadline for Takeover

Britain’s largest private hospital operator has set a deadline for potential suitors to seek a takeover of the company as shareholder pressure mounts on the company to explore a sale.

Background

The company, Spire Healthcare, operates 38 hospitals and more than 50 clinics, medical centers, and consulting rooms across the UK. It is the largest provider of hip and knee surgeries in the country and also operates a network of private GP practices and provides occupational health services to hundreds of corporate clients.

Shareholder Pressure

Spire’s shares have fallen by more than a quarter in the last year, leaving the company with a market capitalization of just £672 million. The company’s property assets alone were valued at more than £1.4 billion. This has led to pressure from shareholders, including activist trust Achilles, to explore options to maximize shareholder value.

Deadline for Takeover

Spire Healthcare advisers have urged parties, including private equity firms, to register their interest by January 20. The date is not a deadline for formal offers, but underlines the desire of Spire’s board to explore options to maximize shareholder value early this year.

Previous Offer

The healthcare group’s shareholders rejected a £2.50 per share offer from Australia’s Ramsay Healthcare in 2021, saying it undervalued the company. The shares closed at just 167p on New Year’s Eve.

Current Status

Last month, Spire told the stock market that it was “actively evaluating measures that could enhance long-term, sustainable shareholder value.” The company is advised by bankers at Rothschild and has initiated discussions with a number of parties regarding possible options, which may include a possible sale of the company or value capture from the hospital real estate portfolio.