UAE's Al Noor agrees to deal with Mediclinic of South Africa

Two rivals are bidding for Al Noor, the Abu Dhabi-based hospitals operator. According to the FTSE 250-listed firm, it had agreed to a deal with Mediclinic of South Africa to create a private healthcare business spanning the UAE, South Africa and Switzerland.

It would also have exposure to the UK through Spire Healthcare, which is owned around 30 per cent by Mediclinic's largest shareholder, Remgro.

Mediclinic, whose market value on the Johannesburg Stock Exchange was over £5 billion, as against Al Noor's £1.35 billion, is looking to use Al Noor's UK listing to tap into London-based institutional investors.

The enlarged group would enter the FTSE 100, but the battle was yet to be won as rival suitor NMC said it had no plans to give up the fight.

Al Noor's shares were up 166.5p, or 17 per cent, to 1,161p, over twice the price at which it floated just only two years ago. Spire was up 9.1p to 379p.

Mediclinic is South Africa's third-biggest private hospital group by revenue with operations in South Africa, Switzerland, the UK and Dubai, while LSE-listed Al Noor is the dominant player in Abu Dhabi.

According to commentators, the proposed transaction offered greater stock liquidity as also improved access to the global investor community, and an opportunity to expand the business in the high-growth UAE market, according to Mediclinic CEO Danie Meintjes.

Al Noor CEO Ronald Lavater said in a call with investment analysts that the two companies had a complementary and strategic fit across the two UAE territories in which they operated.

Mediclinic investors would get 0.625 Al Noor shares for each of their existing shares and interim dividend expected in December, while Al Noor shareholders could opt to get a special dividend of £3.28 a share or tender their stock for £11.60 each, a 39 per cent premium on the closing share price of £8.35 on 1 October.

"In principle, it's a fantastic acquisition, as the combination of these two businesses is very strong," said Sasfin securities analyst Alec Abraham, bdlive.co.za reported. "The Middle East has been a very strong growth area for Mediclinic, but they've reached capacity.