Middle East-based private hospitals operator NMC Health (NMC) has confirmed media speculation that it had received takeover approaches from private equity houses.
Described the company as ‘highly preliminary’ the approaches came from Kohlberg Kravis Roberts and GK Investment.
‘No proposal has been made by either potential offeror and there have been no discussions as to the terms of any possible offer,’ the company said.
NMC added the usual caveats that there is ‘no certainty’ that a firm offer will result, or of any terms of a possible deal.
Unsurprisingly, the announcement was enough to draw share buyers to the stock, sending the share price soaring more than 12% to 786p, heading the FTSE 100 leader board on Monday and valuing the business at £1.64bn.
BEAR RAID
NMC shares have recently been pressured by a critical report by US short seller Muddy Waters about the health of its balance sheet, which the company has rebuffed. That saw NMC’s share price collapse from more than £25 levels in December.
Despite the attack, only 2.3% of NMC’s shares are in the hands of shorters, according to data from the ShortTracker website. Even so, it would appear that many of those investors, who are betting on the NMC share price falling, will now be having to buy stock to cover their backs.
NMC is also taking a detailed look at it share register to verify the size of the interests of some of its key shareholders, including chairman Bavaguthu Raghuram Shetty. This to confirm if stakes have been incorrectly reported.
The company said it had been informed by Shetty that he and his advisers were in the process of carrying out a legal review in order to verify the interests of himself and associates including family members in NMC shares.
The review also had implications for the holdings and interests of Saeed Mohamed Butti Mohamed Khalfan Al Qebaisi and Khaleefa Butti Omair Yousif Ahmed Al Muhairi, the company said.
The review suggested that their holdings ‘have been incorrectly reported historically to the company and the market,’ it added.
NMC also confirmed that its operations continued to perform ‘strongly’ and that it expected to report full year 2019 results in-line with it expectations. Consensus forecasts for 2019 stand at $323.7m of pre-tax profit on $2.55bn of revenue. Earnings per share are estimated at $1.48.
