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Shareholders sink £1.4bn Spire Healthcare takeover

Spire has been the centre of a battle between two parties
Spire has been the centre of a battle between two parties

Shareholders have rejected a £1.4bn takeover bid for Spire which would have created Britain's biggest private healthcare operator, in a humiliating blow for the company's board.

Only 70pc of investors backed Spire's sale to rival Ramsay Health Care in a vote on Monday, below the 75pc threshold needed to push the deal through.

The defeat is an embarrassment for Spire's board, led by chairman Sir Ian Cheshire, after it urged shareholders to back the takeover - and a coup for Toscafund and Fidelity, two of the company's biggest investors, which opposed the 250p a share bid.

A spokesman for Toscafund said: "We are pleased that a significant number of shareholders agreed with us and have firmly rejected this inadequate offer from Ramsay Healthcare.

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"Spire is a successful and highly valuable hospital group and should deserve a higher rating in the future. As committed shareholders, we now look forward to discussions with the management and the board on the optimum course for the business."

Sir Ian, a City grandee who is former chairman of Debenhams and also chairs the UK retail bank at Barclays, said that while most shareholders supported the takeover, the result was clear.

He added: "As a board, we are committed to representing the interests of our shareholders and have fulfilled our duty to present the proposed transaction for their consideration, given its value and structure."

Toscafund, an investment fund founded and run by Martin Hughes, nicknamed "the Rottweiler", nearly doubled its stake in Spire over the past couple of weeks to 10.3pc. Along with Fidelity's 8.6pc stake, it had enough clout to swing the vote against Ramsay.

Ramsay had already secured backing from Spire's biggest shareholder, Mediclinic International, which had agreed to sell its 29.9pc stake if the deal went ahead.

In June, Mr Hughes wrote to Sir Ian urging him to reject the bid and "consider the facts, the future and the potential" of Spire.

Ramsay is one of the biggest private healthcare companies in the UK alongisde Spire. A deal would have created the largest private hospital group in Britain.

Craig McNally, Ramsay chief executive, hinted that the company would look out for other deals.

Mr McNally said: “Our strong balance sheet and cashflows position us well to deliver on our long-term strategy. We will continue to look for opportunities to invest and modernise our facilities and footprint in all regions and to leverage the scale of our world class hospital network. We have a significant pipeline of brownfield and greenfield projects in Australia and will continue to investigate adjacencies in all our market.”

Justin Ash, Spire's chief executive, said the company has "strong prospects as a standalone business before the offer from Ramsay and that remains the case. Our strategy has, and will continue to, prioritise investment in patient safety and quality of care in order to deliver sustainable long-term growth."

Shares in Spire slumped by as much as 10pc and closed 7.2pc lower at 216p.