Spire Healthcare agrees to be taken private in £1bn takeover deal

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Private hospitals chain Spire Healthcare has agreed to be bought by a group of investment firms in a deal worth £1 billion.

The takeover offer comes from a newly-formed company, named Tulip UK, comprised of funds managed or advised by Toscafund Asset Management, THCP Advisory and Ares Management.

London-listed Spire had been in talks with Toscafund, its second largest shareholder, for several months over a possible takeover.

Under the terms of the deal, Spire shareholders have been offered 250p per share.

This represents a premium of about 66% to Spire’s closing price on May 13, the last day of trading before takeover talks were revealed.

The deal values Spire’s entire share capital at about £1.03 billion on a fully diluted basis.

Spire is a healthcare group operating 38 hospitals and around 55 clinics in England, Wales and Scotland.

It also runs a network of private GPs and provides workplace health services to more than 1,400 employers.

The company has been undergoing a strategic review since last September, and the buyers said they plan to launch a further year-long review after the acquisition which may lead to changes to its primary care businesses.

This could lead to a reduction in the number of people employed by Spire through its private GP network, should they decide to divest parts of the business, according to Tulip UK’s offer.

Spire said the offer comes against a backdrop of cost pressures, particularly inflation, and subdued investor sentiment in the UK public markets.

Bosses believe that being taken off the London stock market and into private ownership would give greater access to investment and capital for growth opportunities, including potential mergers and acquisitions.

Alongside the announcement of the deal, the companies said it had been agreed that Spire’s chief executive Justin Ash will step down and be replaced, on an temporary basis, by Sir David Sloman.

Debbie White, Spire’s chair-designate, said: “The long-term prospects for independent healthcare in the UK are strong, but the trajectory has demonstrated much volatility in recent years and the ongoing cost pressures have been material, including from increases in national insurance contributions and the national minimum wage.

“Having conducted a comprehensive strategic review, the board is satisfied that the Acquisition represents the best available outcome for Spire shareholders.”

Martin Hughes, Toscafund’s chief executive, said: “As a private company, Spire would have the freedom to plan for the long term and the agility to move faster: investing in its hospitals and people, putting the latest technology to work and setting new standards in patient care.”

Spire’s shares were up by about 3% on Monday morning following the announcement.