Mediclinic accepts Remgro consortium’s £3.7bn offer

4 Aug 2022

After a bit of back and forth flirting via several cash offers, Mediclinic has finally agreed to a £3.7bn takeover by Remgro, acting in a consortium with the Mediterranean Shipping Company.

The sale places an implied enterprise value of about £6.1-billion on the hospital group with legs in southern Africa, the United Arab Emirates and Switzerland.

Under the terms of the sale, shareholders will receive R102.06 per share, which means that if you have 1,000 Mediclinic shares, you will be paid R102,600.

Once the deal is finalised, Mediclinic will be owned 50/50 by diversified investment holding company Remgro and SAS, a subsidiary of global shipping company MSC (Mediterranean Shipping Company).

Mediclinic’s chief financial officer, Gert Hattingh, says the company’s directors consider the terms of the sale to be fair and reasonable.

However, for the sale to take effect, it has to be approved by at least 75% of the shareholders, excluding Remgro, which already owns 328 million shares.

The acquisition is also conditional on approvals under the respective merger control regimes in South Africa, Namibia, Switzerland and Cyprus, and approval by the financial surveillance department of the South African Reserve Bank.

The takeover is expected to take effect in the first quarter of next year, after which Mediclinic will be delisted from the London Stock Exchange, the JSE and the Namibian Stock Exchange.

Dame Inga Beale, chair of Mediclinic, says 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.

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“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.”

Jannie Durand, chief executive of Remgro, says the acquisition is fully aligned with the group’s strategy of prioritising ownership of structurally attractive, unlisted assets.

“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,” says Durand.

Diego Aponte, group president of MSC, adds that the shipping conglomerate is well positioned to provide long-term capital — as well as insight and experience from operating a global business — to support the strategic ambitions of the Mediclinic management team.

Less than a month ago, the hospital group reported that patient numbers are moving back towards pre-pandemic levels. As at March this year, the group comprised 74 hospitals, five subacute hospitals, two mental health facilities, 20 day-case clinics and 22 outpatient clinics.

The Swiss operations included 17 hospitals and four day-case clinics, with around 1,900 inpatient beds; southern Africa operations included 50 hospitals (three of which are in Namibia), five subacute hospitals, two mental health facilities and 14 day-case clinics (four of which are operated by Intercare) across South Africa, and around 8,650 inpatient beds.

The Middle East operations include seven hospitals, two day-case clinics and 22 outpatient clinics, with around 1,000 inpatient beds in the UAE.

In addition, Mediclinic has plans to open a 200-bed hospital in Saudi Arabia next year. BM/DM

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