Spire Healthcare's shares rocket after it spurns Mediclinic approach

Private hospitals chain Spire Healthcare on Monday threw out a £1.2 billion takeover approach from its biggest shareholder, South Africa-based Mediclinic.

The FTSE 250 firm said Mediclinic’s 298.6p cash and share offer had been “unanimously rejected on the basis that it significantly undervalues Spire and its prospects”.

Spire’s board, which excluded Mediclinic’s chief Danie Meintjes, reviewed the proposal and “strongly advised” its shareholders to take no action.

The bid represents an early challenge for Spire’s newly appointed boss Justin Ash, who joins later this month at a difficult time.

It last month warned there had been an abrupt fall in NHS referrals this summer, and it also put £27 million aside for compensating victims of rogue breast cancer surgeon Ian Paterson, who is serving 20 years in prison.

Mediclinic, which is being advised by Morgan Stanley and owns 29.9% of the business, is considering its position.

Speculation surrounding the swoop for the 39-hospitals group pushed up Spire’s share price last week, with its stock up nearly 6% at 261.3p on Friday. The shares leapt 34.7p, or 13%, to 296p today.

Mediclinic has until November 20 to make a formal offer.

Analysts at Liberum said: “There is still a great deal of uncertainty around the outlook for Spire’s NHS business.”