Abu Dhabi’s Al Noor and Johannesburg-listed Mediclinic have agreed on a potential merger with the South African company getting a majority stake.
Mediclinic, which has presence in South Africa, Switzerland and the UAE as well as in the United Kingdom through Spire Healthcare, would own 84 per cent to 93 per cent of the group depending on take-up by existing Al Noor shareholders.
After the merger, London-listed Al Noor would be rebranded as Mediclinic International. The merged company would have a premium listing on the London Stock Exchange besides a secondary listing on the Johannesburg Stock Exchange and, possibly, the Namibian Stock Exchange.
Last week, NMC Health made a counter offer to Al Noor.
“The board took a look at the proposal [of NMC] and it was inferior to the offer from Mediclinic,” said Ronald Lavater, chief executive of Al Noor, during an analyst call on Wednesday.
“We did an assessment and it was inferior on value and the deal certainty.”
International players such as Mediclinic and Singapore’s ParkwayHealth, regional providers such as Saudi German Hospital Group and local players such as NMC Health, Al Noor, Aster DM Healthcare and Al Masah Capital have been growing their presence in the UAE, with expansion plans of existing players and growing interest from private equity players. The likes of NMC and Al Noor have been growing their network of clinics, hospitals, pharmacies and diagnostic facilities over the past couple of years.
“Given this growth and the competitive intensity, one way for leading providers to grow and increase market share would be through the acquisition or mergers route especially when there are providers in the market with a similar focus on certain cities, patient populations or specialties, and coming together would help ensure that the combined entity takes a stronger position within the evolving health sector,” said Ahmed Faiyaz, the healthcare analyst with consultancy EY.
The merged Al Noor-Mediclinic group would be the third largest private healthcare provider in South Africa, the largest in the UAE and the largest private medical network in Switzerland in terms of revenue. The pro-forma revenues of the merged group was US$4 billion for the financial period ending March 31. Of these revenues, 46 per cent comes from Switzerland, 31 per cent from South Africa and 23 per cent from the UAE.
It would operate 73 hospitals with around 10,200 beds and 35 clinics, and employ 32,000 people.
For the first half of this year, Al Noor’s revenue grew 8.5 per cent to $244m from the same period last year. It runs three hospitals and 17 medical centres in the UAE, with 216 beds and 684 physicians as of June 30.
With the merger, Mediclinic shareholders will receive 0.62500 new Al Noor shares for each Mediclinic share held.
An existing Al Noor shareholder who tenders the shares will receive cash of £11.60 (Dh65.12) per Al Noor share, which is a premium of approximately 39 per cent to the closing price of £8.35 per Al Noor share on October 1. The share prices can be scaled back if more than 74.06 million Al Noor shares are tendered.
Two directors from the board of Al Noor will be on the board of the merged company, which will also include existing directors of Mediclinic. The chairman will be Edwin Hertzog, who is currently chairman of Mediclinic, while the chief executive would be Danie Meintjes, the chief executive of Mediclinic.
London-listed Al Noor shares closed at £9.94, down 0.05 per cent, yesterday. Its shares touched £10 on October 6 when Mediclinic confirmed news that talks are on about the merger.
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