The Mediclinic hospital group has rejected a cash offer by a Remgro consortium to buy it out. The board said the offer “significantly undervalued Mediclinic and its future prospects”.
Three weeks ago, Remgro Limited, an investment holding company which owns a 45% share of Mediclinic already, and the Mediterranean Shipping Company, acting as a 50-50 consortium, presented a cash offer to Mediclinic of 463 pence a share, roughly £3.4bn (or R66bn).
While Mediclinic turned down the offer, according to Simply Wall St, the hospital group is currently 27.4% undervalued, trading at £4.25 rather than Simply Wall St’s fair value estimate of £5.85.
Mediclinic’s earnings are forecast to grow 14% year on year, and it posted group revenue of £3.2bn for the year to March 2022.
The hospital group operates in Switzerland (47% of revenue), southern Africa (28% of revenue) and the United Arab Emirates (25% of revenue).
Anthony Clark, an analyst at Smalltalkdaily Research, said he would not be surprised to see Remgro returning with a higher offer to Mediclinic. “If they do acquire Mediclinic, that would take a significant proportion of their cash resources."
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