|TAP Special by K Raveendran| The UAE healthcare sector was the scene of high drama as the Al Noor Hospitals Group, being pursued by leading sectoral player NMC Group to form the country’s biggest private healthcare provider, apparently broke off and announced it has reached an agreement for a merger with South Africa’s Mediclinic International Ltd. Al Noor will also be renamed Mediclinic International.
Al Noor said it will acquire Mediclinic in an arrangement under which Mediclinic shareholders will receive 0.62500 new Al Noor shares for each Mediclinic share held, as well as the Mediclinic interim dividend payable in December.
Al Noor shareholders will receive a special dividend of 3.28 pounds per Al Noor share and will also have the opportunity to tender their shares to Al Noor for cancellation for a cash payment of 8.32 pounds per share. This would mean a premium of approximately 39% to the closing price of 8.35 pounds per Al Noor share on October 1.
The combination will result in Mediclinic shareholders owning 84% to 93% of the enlarged group.
Mediclinic Chairman Edwin Hertzong will be chairman of the enlarged group, while Al Noor Chairman Ian Tyler will be senior independent director. Mediclinic Chief Executive Danie Meintjes will assume the same role of the enlarged group, while Mediclinic Chief Financial Officer Craig Tingle will remain in his position.
The merger will create an international private healthcare group in Southern Africa, Switzerland and the UAE, as well as having exposure to the UK market through its minority stake in Spire Healthcare Group PLC.
NMC quickly reacted to the development and issued a statement saying that a combination of its own operations with Al Noor offered a stronger “strategic and financial rationale for all stakeholders.” The company plans to continue its pursuit “despite the lack of meaningful engagement from the board of Al Noor,” and urged investors not to make a decision on the Mediclinic deal.
But Ronald Lavater, chief executive officer of Al Noor, said in a conference call with that the NMC proposal “was inferior both on the value and the certainty.”
NMC Chief Financial Officer Suresh Krishnamoorthy told the Arabian Post that the company had a number of options on the table, but said he was not in a position to divulge more details at this point of time. NMC said it would make a new announcement in ‘due course of time’.
The Board of Al Noor Hospitals had last week issued a statement referring to the recent media speculation in relation about the approach from NMC and said the company had time till November 6 to take a decision.
Referring to the new development, the Al Noor CEO said “the companies make a compelling strategic fit, in terms of complementary geographies and a shared commitment to providing outstanding patient care. As one of the world’s largest acute hospital operators outside the United States, this will be a platform for further growth and delivery of world class service, benefiting all our stakeholders, from the communities we serve, to our talented employees and our investors”
“In the key growth market of the UAE, the combined company will be the largest private healthcare provider in the country (by revenue), giving patients access points in most major urban centres. We have an excellent opportunity to leverage this strength to expand coverage and service delivery, responding to burgeoning demand for world class healthcare,” he added.