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Ramsay Health sweetens offer for Britain's Spire to win over investors

Pushkala Aripaka
Updated ·2 min read

By Pushkala Aripaka

(Reuters) -Australia's Ramsay Health Care has raised its offer to buy British peer Spire Healthcare to about 1.04 billion pounds ($1.44 billion), the hospital operators said on Monday, after reports of some investor opposition to a deal agreed earlier.

Ramsay said its latest offer of 250 pence per share for Spire would be its final one, unless another party made a bid for the London-listed company which has major contracts with Britain's state-backed NHS healthcare network.

The companies had agreed in May to a 1-billion-pound proposal as Ramsay sought to strengthen its business in Britain. Its latest offer is a premium of about 30% to Spire's share price the day before the first bid was made on May 26.

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Spire said that it had spoken to its shareholders, and keeping in mind "views of certain shareholders about the price under the Initial Offer", it had engaged with Ramsay and its advisers on the proposal.

"The Board believes that the increased final offer is in the best interests of Spire shareholders," the British company said, adding that its board was recommending the offer.

In June, Sky News reported that Fidelity International was planning to oppose Ramsay's first offer which it said "materially undervalues" Spire. The investor is Spire's second biggest shareholder with a 8.68% stake, Refinitiv Eikon data showed.

Spire shares fell roughly 2% after it also provided an update on recent trading. While it said sales in the five months to May had returned to pre-pandemic levels, it warned of higher costs in the first half of 2021 due to the pandemic.

Spire also said that contract volumes from the NHS in the second quarter were "materially below" 2019 levels.

The group had been hit by a drop in routine patient visits to hospitals during the health crisis, and was already suffering from fewer referrals to private hospitals before then.

($1 = 0.7222 pounds)

(Reporting by Pushkala Aripaka in Bengaluru; Editing by Andrew Heavens and Emelia Sithole-Matarise)