A proposed £1bn takeover of private hospital operator Spire Healthcare has collapsed after failing to secure enough shareholder support.

Sky News had revealed over the past few months a groundswell of opposition among institutional investors to the bid by rival Ramsay Health Care.

Fidelity International and Toscafund Asset Management, which collectively owned 14% of Spire’s shares, had urged rejection of the the 240p-a-share bid – recommended by the London-listed company’s board in May – later raised to a “final” 250p level.

Their core argument against the bid was that it significantly undervalued Spire, which had turned down a previous 300p per share takeover approach in 2017.

Opponents had also said the offer did not reflect an upturn in business expected as a result of the COVID-19 pandemic.

But Spire countered that operating costs had increased due to the coronavirus crisis such as through increased PPE usage, staff and patient testing and staff absenteeism.

The board said too that clinical costs were also expected to rise – balancing the potential for increased patient numbers.

Spire shares were trading almost 10% down on Monday afternoon at 212p after the result of the vote was declared.

Just 69.9% of investors backed the takeover. A figure of 75% was needed if the board was to win the day.

Chairman Sir Ian Cheshire responded: “We respect the decision of our shareholders and will now continue to execute our strategy to deliver growth and create greater value through supporting private patients and the
NHS.

“Throughout our ongoing engagement with shareholders, feedback has been overwhelmingly positive towards the long-term strategy and our strong management team.”

A Toscafund spokesperson said: “We are pleased that a significant number of shareholders agreed with us and have firmly rejected this inadequate offer from Ramsay Healthcare.

“Spire is a successful and highly valuable hospital group and should deserve a higher rating in the future.

“As committed shareholders, we now look forward to discussions with the management and the Board on the optimum course for the business.”

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