Spire Healthcare surges on report of Mediclinic bid

16th Sep 2016 11:24

(ShareCast News) - Private healthcare provider Spire Healthcare surged on Friday following a report that peer Mediclinic was preparing a bid for the remainder of the company.Betaville cited people familiar with the matter as saying that Mediclinic was working with Morgan Stanley and could be weeks away from submitting a formal approach for Spire.The offer was seen to be at a 30% premium to Spire Healthcare's current share price.In June 2015, South Africa's Mediclinic bought a 29.9% stake in Spire from private equity group Cinven for 360p a share.At the time of the announcement, Investec said it would not rule out the possibility of a complete takeover of the company.The brokerage said at the time that the transaction could be the "first step towards a complete takeover at some point in the future".In a note on 23 August, JPMorgan Cazenove said that sterling weakness and the strength of Mediclinic's share price versus Spire's was an opportunity for the SA firm to consolidate its ownership of Spire."We estimate it could pay a 35% premium for Spire and see year one earnings per share increase by 3-4%, rising to 10% in year three assuming a debt-based deal," it said.At 1132 BST, Spire shares were up 9.5% to 395.30p.