Spire Healthcare accepts GBP1 billion private equity takeover offer

(Alliance News) - Spire Healthcare Group PLC on Monday said it has agreed to a more than GBP1 billion private equity takeover offer, which already has been accepted by a majority of shareholders.

Spire's chair and chief executive both stepped down immediately as the private healthcare provider said it is preparing for the transition to new ownership.

Tulip UK Bidco Ltd, a newly formed company owned by funds managed or advised by Toscafund Asset Management LLP, THCP Advisory Ltd and Ares Management Ltd, will pay 250 pence in cash for each Spire share. This is a 66% premium to Spire's undisturbed share price of 150.4p on May 13, the day before Toscafund made a non-binding proposal at the same 250p price.

The offer values Spire's equity at GBP1.03 billion. It gives the London-based company an enterprise value, including debt, of GBP2.31 billion.

Spire shares were up 3.1% to 245.28 pence early Monday in London.

A year ago, Spire had launched a strategic review, which included the potential sale of the entire company, or alternatively its freehold property portfolio. On Monday, Spire said that the group led by Toscafund was the only bidder to to submit a proposal at a level that was attractive.

"Funds managed or advised by Toscafund have been investors in Spire since 2021 and Toscafund has long been supportive of Spire. Toscafund highly regards Spire's culture and commitment to delivering high quality care. Toscafund has a detailed understanding of Spire's business model and of the UK healthcare sector, supported by its previous ownership of a private hospital peer of comparable size to Spire," Toscafund said in a statement on Monday.

"In that context, the Bidco board considers that the underlying quality, freehold property and well-invested asset base of the Spire group are not fully reflected in its public market valuation. The Bidco board believes that taking the Spire group private pursuant to the acquisition would provide strategic and financial flexibility to unlock long-term stakeholder value."

The offer, which will be implemented as a court-sanctioned scheme of arrangement, already has acceptances of just over 53% of Spire ordinary shares and just under 43% of scheme shares.

In additional to the cash offer, Spire shareholders are being offered a partial share alternative. They would receive 2.5 B shares in the acquiring company for each existing share held, limited to 28.0 million Spire shares, or 8.5% of scheme shares.

Spire also on Monday said that Justin Ash will retire as chief executive officer, with the "process of identifying a successor" ongoing. Vice Chair David Sloman will become interim CEO in his place.

As previously announced, Ian Cheshire step down as chair, to be succeeded on an interim basis by Chair-Designate Debbie White. The changes are with effect from Monday.

Spire said the changes come as it "prepares to enter its next stage of growth under the ownership of Tulip UK Bidco".

By Tom Waite, Alliance News editor

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