Mediclinic dispenses R9bn pill

23 June 2015 - 02:01 By Reuters

Mediclinic International is buying almost a third of Britain's Spire Healthcare in a deal worth nearly R9-billion. South Africa's biggest private hospitals group will enter a market it has said is ripe for growth as private players account for a small fraction of the healthcare sector in the UK.The deal continues Mediclinic's diversification abroad. The group already runs hospitals in Switzerland and the Middle East.Shares in the company were up 3.36% at R103 on the JSE yesterday afternoon.Spire shares surged 9.7% to £3.51 on the London Stock Exchange, on course for their biggest daily percentage gain on record.Spire is the second-largest private hospital operator in the UK. Mediclinic will buy a 29.9% stake in the company from its own largest shareholder, South African investment house Remgro.Remgro said earlier yesterday that it was buying the stake from buyout firm Cinven for £431.7-million. It will then sell the stake to Mediclinic, of which it owns about 40%, for R8.6-billion.Remgro's strong balance sheet and relationship with the South African Reserve Bank would help conclude the deal more quickly than had the private hospital group gone it alone, said Mediclinic CEO Danie Meintjes.He said he regarded Britain as a growth opportunity due to an ageing population and the fact that private healthcare accounted for only about 6% of the market.After the deal as much as 70% of Mediclinic's profit would come from outside South Africa, said the Johannesburg-based head of investments at Anchor Capital, Sean Ashton.Mediclinic said it would fund the deal with a R10-billion rights offer in which it plans to sell just over 111million shares at R90 each. ..

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