Mediclinic merger spoilers line up

Despite London-listed healthcare group Al Noor's board recommendation to shareholders to accept Mediclinic International's merger offer there is a potentially new bidder for the Dubai-based hospital operator.

Al Noor said yesterday it had received "a highly preliminary indication of interest from privately held VPS Healthcare", but "no formal proposal or indicative terms were received". VPS joins NMC Health, Al Noor's major competitor in their home market of Abu Dhabi, as possible spoilers of Mediclinic's plans.

Like VPS, NMC has also not been able to produce anything to convince Al Noor that it is a serious contender to compete with Mediclinic's offer. Al Noor CEO Ronald Lavater was quoted last week as saying the offer from NMC was "inferior both on the value and the certainty".

Al Noor said that under UK regulations VPS must "announce a firm intention to make an offer" by November 17, or "announce it does not intend to make an offer". Despite this brush-off from Al Noor, NMC has appealed to its competitor's shareholders to not accept the Mediclinic transaction. It has said only that it would issue a further announcement "in due course".

Should the deal be successful, Mediclinic will reverse list into Al Noor and Mediclinic shareholders will own between 84 percent and 93 percent of the combined company. Investment holding company Remgro will be the largest shareholder in the new company as it already holds 42.5 percent of Stellenbosch-based Mediclinic. The new company, Mediclinic International Plc, will operate 73 hospitals and 35 clinics, with an annual turnover of more than $4bn. Its primary listing will be London with a secondary listing in Johannesburg.

Business Day, 21 October 2015