Investors push Ramsay Health Care for Sante spin-off

Ramsay Sante has 443 hospitals, clinics, primary care and imaging centres across Europe. Picture: iStock

Investors in Ramsay Health Care are lobbying the board for a restructure as they turn up the heat on the country’s largest private hospital operator to boost share price performance.

DataRoom understands that investors are approaching directors in the hope of convincing Ramsay into spinning off Ramsay Sante and handing over the shares to investors through an in specie distribution.

The idea is that this could flush out a buyer for the French hospital operator and raise its share price.

Ramsay’s shares on Friday closed at $51.33, with its market value $11.8bn.

It’s a far cry from the $88 per share, or $20bn, that Kohlberg Kravis Roberts offered for the company more than a year ago.

Ramsay has $5.2bn of net debt, and the group is planning asset sales to reduce that.

Before KKR approached Ramsay in April last year, its share price was around $65.

Ramsay first purchased hospitals in France in 2010.

It owns 52.3 per cent of Ramsay Sante, the second largest private care provider in Europe.

Ramsay Sante has 443 hospitals, clinics, primary care and imaging centres across Europe.

KKR withdrew its $88 per share offer a year ago.

The KKR consortium, including super fund backers, came up with an alternative offer that Ramsay rejected, where shareholders would have received $78.20 per share and about 0.22 Ramsay Sante shares.

KKR had difficulties obtaining due diligence material from the Ramsay Sante board.

At the time of KKR’s due diligence, the understanding was that Rothschild & Co was quietly sounding out potential suitors for the Ramsay Sante business.

Fresenius examined an acquisition of Ramsay Sante through its Fresenius Helios subsidiary but could not fund a deal.

Ramsay’s largest shareholder is The Paul Ramsay Foundation, which owns 19 per cent.

Major equity holders of Ramsay Sante, listed on Euronext Paris, are Predica with almost 40 per cent, and Credit Agricole group’s personal insurance subsidiary.

Another possibility being discussed is for Ramsay to list Ramsay Sante and its British hospitals in London, much as NAB did with its Clydesdale bank in 2016.

The company could offer an in specie distribution and raise a small amount of funds to create liquidity.

In recent months, there have also been concerns that the UBS-advised Ramsay may need to raise equity, but now the thinking is that asset sales will work.

A sale of its $750m-odd stake in Asian hospitals joint venture Sime Darby Health Care, comprising four Malaysian hospitals and three in Indonesia, is well under way.

Ramsay Sante is believed to be next on its agenda

Long term, Ramsay’s prospects are strong, with an expanding ageing population.

However, in the short term, healthcare providers are facing cost pressures with staff shortages.