Mediclinic seeks London listing through Al Noor Hospitals tie-up

The deal, if successful, would create the biggest private health-care provider in UAE.

Mediclinic International, in talks with London-traded health-care provider Al Noor Hospitals Group about a tie-up, said the potential deal would take the form of a reverse takeover of the smaller, United Arab Emirates company to gain a listing in the UK capital.

“The combined business would benefit from a premium listing on the London Stock Exchange” as well as on the Johannesburg bourse, Stellenbosch, South Africa-based Mediclinic said in a statement on Tuesday. “The board believes that this will provide incremental benefits to Mediclinic through increased liquidity and a reduction in cost of capital.”

South Africa’s biggest private hospital owner would be the second Johannesburg stock to seek an additional, international listing this year. Steinhoff International Holdings, the furniture chain which gets more than half its sales from Europe, plans to list on the Frankfurt Stock Exchange later this year to increase access to investors on the continent. Al Noor would issue new shares to Mediclinic investors to facilitate the reverse takeover, the South African company said.

Mediclinic shares gained as much as 3% to R120.45 in Johannesburg on Tuesday, the most since May 6, and traded 0.9% higher at R118 at 1:12pm local time. That values the company at about R116 billion ($8.5 billion). Al Noor gained 3.9% in London, valuing the company at 1.1 billion pounds ($1.7 billion). The stock has increased for five consecutive days.

If the deal is completed, it would create the biggest private health-care provider in the UAE, with operations in Dubai and Abu Dhabi, Mediclinic said. That would complement the company’s existing operations in Switzerland, Southern Africa and the UK. Mediclinic is seeking to expand in countries where rising household incomes have led to growing demand for private health care.  

“Abu Dhabi has been on Mediclinic’s radar for some time,” Andre Bekker, an analyst at Avior Capital Markets in Johannesburg, said by phone on Monday. “Al Noor is a good fit both from a geographic footprint and because of the specialised services they offer.”

©2015 Bloomberg News

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