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A proposed £ 1.4 billion merger between two of Britain’s largest private hospital operators collapsed on Monday after shareholders rejected the deal.
Spire Healthcare management agreed in July to be acquired by Australian rival Ramsay Healthcare in a 250 pence per share deal.
But Speyer shareholders, including London-based investment group Toscafund, argued the offer undervalued the company and rejected the deal at a special meeting on Monday.
Spire Healthcare shares fell 7% to 218p on Monday after 69% of investors backed the takeover, down from the 75% needed to succeed.
Sir Ian Cheshire, Chairman of Spire, said: “We respect the decision of our shareholders and will now continue to execute our strategy to generate growth and create greater value by supporting private patients and the NHS. “
The deal would have merged the 37 Ramsay clinics in the UK with the 47 clinics in Speyer to create the country’s largest hospital provider at a time when the industry is expected to benefit from a surge in patient numbers due to long lists waiting period of the NHS.
Toscafund, which had increased its stake in Spire to block the deal, said: “As committed shareholders, we now look forward to discussions with management and the board of directors on the optimal path for the company. . “
Earlier this month, Toscafund sold its majority stake in Britain’s largest private hospital operator, Circle Health Group, to U.S. healthcare operator Centene for an estimated £ 900million.
Centene faced protests from anti-privatization activists in the UK after purchasing a chain of GP clinics earlier this year.
Justin Ash, Managing Director of Spire, said: “Spire had strong prospects as a stand-alone company prior to Ramsay’s offer and that remains the case today.”
Ash received a bonus of £ 300,000 in March, raising his salary last year to £ 1.2million. Any takeover would have allowed it to cash in long-term stock options granted at the height of the pandemic in April last year, worth an estimated £ 2.3million.
Spire has encountered problems over the past few years. Last year he was forced to pay £ 1.2million in fines to the regulator of the Competition and Markets Authority after one of his private hospitals struck an illegal price-fixing deal on consulting fees for people with eye disorders such as cataracts and glaucoma.
The company has also agreed to pay nearly £ 27million in compensation and related matters after Ian Paterson, one of its consultants, performed unnecessary or inappropriate surgery on around 750 patients. Paterson was jailed for 20 years and the company said it would provide “ongoing support” to its patients.
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