A three-way takeover tussle could emerge for Al Noor Hospitals, the Abu Dhabi healthcare group quoted on the London Stock Exchange.
Al Noor has agreed terms with the South African-owned Mediclinic group, while NMC Health of the UAE, also quoted on the LSE, is considering a rival offer.
But Ronald Lavater, the chief executive of Al Noor, has revealed a third approach. “We’ve received another expression on interest. I cannot identify the source of the potential bidder, nor say whether or not it will amount to a bid, but it demonstrates what an attractive proposition we are, and what growth there still is in the regional healthcare market.”
• UPDATE: Al Noor reveals third suitor as VPS Healthcare
Mr Lavater, speaking for the first time since last week’s flurry of takeover activity, said that the company was still firmly committed to the Mediclinic offer, which he insisted was “superior in value and certainty” to the proposal tabled by NMC.
The company agreed a deal with Mediclinic valuing the shares at £11.60 each and putting a market capitalisation of more than £2 billion on the company.
Although NMC has not disclosed the price it had suggested in recent talks with the Al Noor board, investment bank analysts said they believed the offer was pitched at around £11.90. An NMC spokesman declined to comment.
Despite having agreed the deal with Mediclinic, Mr Lavater said he would consider a competing proposal. “It depends what comes in. The board has a duty to consider all proposals and make a decision in the best interests of shareholders.”
Mr Lavater said that the Mediclinic deal was the best for Al Noor. “It really is a strategic fit, in terms of clinical split between the two companies, the geographic spread in the UAE and the cultural aspects. Both companies are committed to the communities in which they serve.”
He added that the combined group would be the largest by revenue and by geographical coverage in the UAE private healthcare market. “The cultural fit is perfect, given Al Noor’s commitment to the community and the medical profession,” he said.
Another advantage of the deal was that “the two hospital groups will work together in the knowledge transfer field. There are greater synergies across a bigger group”.
Al Noor has secured the irrevocable commitment of two of its founder shareholders – Sheikh Mohammed bin Butti Al Hamed, and former chief executive Kassem Alom – representing 34 per cent of the share register, for the Mediclinic deal.
The balance of Al Noor shareholders are institutional, with none holding more than 6 per cent of the shares.
However, Mr Lavater said that the terms of the takeover – a complicated “reverse” deal involving the use of Al Noor’s shares to effect the transaction – would require 75 per cent acceptance from both Al Noor and Mediclinic shareholders at special meetings before the planned closure of the deal early next year.
Mediclinic’s biggest shareholder, the South African investment group Remgro, has committed its 42 per cent shareholding to the Al Noor link-up.
Mr Lavater said that the structure of the deal had been approved by the takeover authorities in London and by authorities in the UAE.
“We do not envisage any regulatory hurdles in the UAE,” he said.
Some commentators believe NMC is determined to come back with a formal offer before its deadline of November 6, triggering the first contested takeover among UAE companies, even though both have their shares listed in London.
A briefing note on Al Noor from the US investment bank Citi said: “Mediclinic’s purchasing power is greater than NMC’s on our forecasts given the balance sheet depth in South Africa.” But Citi added: “We view NMC management as having a higher risk tolerance than Mediclinic, and thus the former may be willing to offer Al Noor shareholders a premium on top of that proposed by Mediclinic.”
Al Noor shares rose by nearly 1 per cent in London yesterday, to £11.80.
fkane@thenational.ae
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