Toscafund joins opposition to £1bn Spire takeover

Another of Spire Healthcare’s largest shareholders has voiced opposition to a £1bn takeover bid from an Australian rival.

Sky News can reveal that Toscafund Asset Management, which owns 5.4% of Spire’s shares, has urged fellow investors to reject the 240p-a-share bid recommended by the London-listed company’s board last month.

In a statement, a Toscafund spokesman said it was “clear that the Spire share price would trade comfortably over 240p within the next 12 months”.

The asset manager’s opposition comes days after Sky News revealed that Spire’s biggest institutional shareholder, Fidelity International, would vote against the deal.

The stance of two such influential investors which collectively hold more than 14% of Spire will raise the prospect of Ramsay being forced to increase its bid.

“Operating conditions in the private healthcare market are set to be strong for some years to come,” the Toscafund spokesman added.

“Toscafund recommends that shareholders reject the offer and retain the listing, therefore looking forward and not backward.”

City sources pointed out that many of Spire’s board directors and investment banking advisors were the same individuals who in 2017 “unanimously rejected” a cash-and-shares offer which at the time was worth almost 300p-a-share.

That offer was tabled by Mediclinic International, which is Spire’s largest shareholder and has accepted the Ramsay bid.

Fidelity said last week that Ramsay’s proposal “materially undervalues” the business, given an anticipated spike in demand for private hospital services arising from the coronavirus pandemic.

A successful bid would unite Spire’s 39 UK hospitals with Ramsay’s 37 under common ownership, making the combined group bigger than rival BMI Hospitals.

Spire’s board, led by newly appointed chairman Sir Ian Cheshire, sought to justify its recommendation by pointing to a 55.8% premium to its share price on 5 March – the day before Ramsay’s initial approach.

However, several shareholders believe that the company’s freehold property portfolio alone could be worth £1bn.

They are thought to want to push for offers valuing Spire at closer to 400p-a-share – nearly 70% higher than the recommended bid.

Spire’s other leading shareholders include Aberforth and Schroders.

The resistance to the level of Ramsay’s offer comes at a sensitive time owing to the number of FTSE-250 companies being targeted by private equity and overseas bidders.

In recent weeks, John Laing, the infrastructure group, has agreed to be taken over by KKR, the buyout giant, and healthcare provider Vectura recommended an offer from Carlyle.

Equiniti, Sanne and Elementis, all of which are FTSE-250 constituents, have also attracted bid interest.

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