Ramsay’s $3.9bn Spire bid in tatters following shareholder vote

A vote of Spire investors fell short of the minimum level needed for the major hospital buyout to move ahead.

Ramsay Healthcare’s $3.9bn bid to take over British rival Spire Healthcare was in tatters on Monday night when a vote of Spire investors fell short of the minimum threshold needed for the friendly deal to move ahead.

Spire’s chairman Sir Ian Cheshire said the takeover had lapsed and the hospital operator was well positioned for success as it planned to go it alone.

In May Ramsay unleashed a plan to spend more than $3.9bn on acquiring a UK chain of hospitals which would have seen the Australian healthcare company become the UK’s biggest private hospital operator.

At the time Ramsay tabled all cash bid of £2.40 ($4.38) a share to acquire Spire, a near 30 per cent premium to Spire’s previous trading price. Spire’s board immediately backed the deal and recommended investors vote in favour of the scheme of arrangement.

But following growing investor resistance to the deal Ramsay sweetened its offer to £2.50 a share earlier this month and declared the new bid final.

But a Spire shareholder vote in London on Monday fell short of the minium 75 per cent threshold needed. Spire shareholders voted 69.88 per cent at the general meeting and 72.07 per cent at the court meeting.

“Accordingly, the acquisition of Spire by Ramsay has been terminated and the Scheme has lapsed,” Spire said in a statement.

“We respect the decision of our shareholders and will now continue to execute our strategy to deliver growth and create greater value through supporting private patients and the NHS,” Sir Ian said,

“Throughout our ongoing engagement with shareholders, feedback has been overwhelmingly positive towards the long-term strategy and our strong management team. We remain confident in the Company’s long-term fundamentals and are well positioned for success as a standalone business,” he said.

Spire’s shares in London fell 8.7 per cent at £2.14 in early trade on Monday.

Spire operates 39 private hospitals and eight clinics across the UK. Once completed, it will almost double the number of hospitals Ramsay operates in the UK to 75, and lift the number of healthcare facilities it operates worldwide to almost 600.

This month Ramsay CEO Craig McNally said the offer gives Spire shareholders the ability to realise a premium on their investment in the near term at an attractive valuation multiple, “without the execution risks associated with delivery of the Spire stand-alone strategy”.

Ramsay is expected to update investors shortly over its plans following the loss of the shareholder vote. ASX-listed shares in Ramsay on Monday closed up 0.7 per cent at $63.54.