Spire Healthcare takeover looks far from done deal as Fidelity rejects Ramsay offer

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Spire Healthcare Group PLC’s (LON:SPI) takeover by Australia’s Ramsay group is facing a major hurdle in the shape of Fidelity International.

Fidelity has reportedly decided to vote its 8.7% stake against the 240p per share bid recommended last month by Spire’s directors.

The deal, which would create the UK’s largest private hospitals group, values Spire at £1bn but this is nowhere near enough according to Alex Wright, a portfolio manager at Fidelity Special Situations Fund.

“To put this offer in perspective, the board turned down a previous 300p per share takeover approach in 2017 when the stock had recently traded at 350p,” he told Sky News.

“Spire Healthcare, one of the UK’s largest private hospitals, is well placed in the UK recovery post-COVID-19, which should feed into future earnings growth.

“In our opinion, Spire can return back to a 2015-2017 level of earnings over the next three to five years.”

According to Sky, Fidelity is hoping its move will encourage other objectors.

Spire has 39 hospitals in the UK compared to Ramsay’s 37 and with a backlog of surgery due to the coronavirus pandemic some are predicting a boom in demand for years to come.

The report today said that some shareholders believe 400p per share is nearer the right valuation.

South African group Mediclinic, which has a 29.9% stake has accepted Ramsay’s 240p offer.

Spire shares were trading up 1.9% at 247.5p today or 3% higher than the bid price.

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