A consortium led by Remgro has reached an agreement with JSE-listed private hospital giant Mediclinic International to buy it out in a cash offer, which represents around a 50% premium to the group’s volume-weighted average share price for the six months to 25 May 2022.
Confirming the deal in a Sens on Thursday morning, the hospital group said the boards of Manta Bidco Limited (Bidco), Remgro Limited, SAS Shipping Agencies Services (SAS) and Mediclinic (excluding the Remgro representative) “are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Bidco to acquire the entire issued and to be issued ordinary share capital of Mediclinic”.
This excludes Mediclinic shares that Remgro subsidiaries already own, which represents a stake of around 44.56%.
Bidco is a newly formed company owned by the joint offerors, Remgro and SAS – which is a wholly owned subsidiary of MSC Mediterranean Shipping Company SA.
“The acquisition values the entire issued and to be issued ordinary share capital of Mediclinic at approximately £3.7 billion (around R75.33 billion at the current rand/British pound exchange rate) and an implied enterprise value of approximately £6.1 billion [R124.2 billion],” Mediclinic noted in its announcement.
“Under the terms of the acquisition, Scheme Shareholders shall be entitled to receive 504 pence in cash for each Mediclinic Share held [acquisition price],” it added.
“[This represents] a premium of approximately 50% to the volume-weighted average price per Mediclinic Share of 337 pence for the 6 months to 25 May 2022 [being the day prior to the date on which the initial proposal was made],” the group said.
It further pointed out that the offer also represents “a premium of approximately 35% to the closing price per Mediclinic share of 373 pence on 25 May 2022 (being the day prior to the date on which the initial proposal was made)” and “a premium of approximately 23% to the closing price per Mediclinic share of 411 pence on 7 June 2022 (being the day prior to the market speculation of an approach).”
In terms of the deal, Mediclinic shareholders will also be entitled to receive the final dividend of 3 pence per Mediclinic share declared by the group on 25 May 2022 and approved at the Mediclinic annual general meeting on 28 July 2022 (the agreed dividend).
Commenting on the deal, Dame Inga Beale, chair of Mediclinic, said: “The recommended offer represents a near-term value realisation for Mediclinic shareholders at an attractive premium.”
“Over 39 years, Mediclinic has developed into the leading international healthcare services group it is today. During this time, Remgro has remained a supportive long-term shareholder,” she noted.
“Together with SAS, the consortium’s resources will put Mediclinic in a strong position to continue to serve patients through our broad range of high-quality healthcare services,” Beale added.
“I am delighted that Remgro is participating in this transaction, which is fully aligned with our strategy of prioritising our ownership of structurally attractive, unlisted assets,” said Remgro CEO Jannie Durand.
“Since its founding, Remgro has been a long-standing and supportive shareholder of Mediclinic. We are proud of what the business has achieved over that period and look forward to continuing our support, alongside our partner SAS, as the business transitions to the next phase of its evolution under stable, long-term ownership.
“Under the stewardship of the consortium, Mediclinic will be well-positioned to execute on its strategy and undertake the investment required to realise the full potential of the business,” added.
Also commenting on the acquisition, Diego Aponte, group president of MSC, said: “We are delighted to be partnering with Remgro on the acquisition of Mediclinic, a business we have great admiration for.”
“MSC is very well placed to provide long-term capital, as well as our insight and experience from operating a global business, in order to support the strategic ambitions of the Mediclinic management team. We believe that, alongside Remgro, our ownership will provide Mediclinic with significant resources to the benefit of all of Mediclinic’s stakeholders, including in particular its patients, employees, doctors and host governments.”
Following the latest announcement, Mediclinic’s share price traded almost 2.5% up around 2pm on Thursday, at R101.07 a share.