Ramsay Healthcare’s big plunge into the UK private hospital sector has ended after shareholders in its target, Spire Healthcare rejected the deal.
The failure pleased Ramsay shareholders who left the shares alone in the wake of the failed votes in the UK on Tuesday.
Spire shares were trading at 193 pence prior to news of Ramsay’s 240pm initial takeover offer in May, but rallied to hit highs of 253 pence in June.
While Spire shares fell 7.2% to 218 pence on Monday and then another 1.15% on Tuesday to 215.50p in the wake of the bid failure, Ramsay shares enjoyed a better fate from investors on the ASX.
The shares ended at $63.97 on Tuesday (down 0.2% in the market’s sell off) in the wake of the news of the bid being abandoned.
That was slightly higher than the $63.45 on May 26 when the Spire deal was announced, a sign shareholders are content the UK excursion has failed.
Ramsay first revealed its offer for Spire Healthcare back in May in a move that valued Spire at $3.7 billion (including debt) with Ramsay initially offering 240 pence a share for the British hospital operator.
In late June and early July it became clear that the bid was facing significant shareholder opposition, so Ramsay lifted the price to 250p a share and won some support.
But major shareholders Fidelity and Toscafund were not convinced the terms adequately valued the company and led the campaign to sin the deal, which they did – narrowly.
Spire shareholders had to vote at least 75% in favour of the deal at court hearing and a general meeting in order for it to pass. Spire revealed yesterday that only 69.8% of votes were in favour at the general meeting, and 72% at the court meeting, meaning the acquisition had failed
When announcing the offer, Ramsay CEO, Craig McNally said the company had been watching Spire as a potential takeover opportunity for close to a decade, and the “planets had aligned” at last to form an agreement with the Spire board on terms.
Spire operates 39 hospitals across the United Kingdom and the deal could have seen Ramsay become the largest operator of hospitals in the private space in the region, depending on any conditions placed on agreement by the UK competition watchdog.
