Private hospitals chain Spire Healthcare has revealed talks over a possible £1 billion takeover by its second largest shareholder.
Spire is in early stage discussions with Toscafund Asset Management over a 250p-a-share proposed cash bid, which would value the hospitals group at £1.01 billion.
Toscafund already owns 18% of Spire, while its largest shareholder, Mediclinic, owns nearly 30%.
Shares in FTSE 250-listed Spire surged 45% in morning trading on Thursday, taking its shares to nearly 220p each.
Spire said the talks over the approach follow a number of previous proposals from Toscafund as it has led a strategic review of the hospitals firm, which was launched in September last year.
Spire said: “Over multiple years, Spire Healthcare has made significant progress in strengthening care quality, diversifying revenue streams and driving efficiencies.
“The board remains highly confident in Spire Healthcare’s standalone strategy and the value creation opportunity.
“However, the board has carefully considered the proposal together with its advisers and has concluded that the possible cash offer is at a value that the board would be minded to recommend unanimously to Spire Healthcare shareholders.”
It added: “Accordingly, the board is in discussions with Toscafund in relation to these terms and Toscafund is in the process of undertaking its confirmatory due diligence.
“These discussions are currently at a relatively early stage.”
Spire runs 38 hospitals and more than 60 clinics across England, Wales and Scotland.
It also runs a network of private GPs and provides workplace health services to more than 1,400 employers.
Peel Hunt expert Miles Dixon said Spire has faced a lengthy period of bid speculation swirling around the group.
He added: “We see value in excess of 250p at Spire – the UK landscape is only moving in one direction for private care – and a business that is fundamentally improved.”
But he said they were “mindful of the parties involved and of fatigue around offers” and would therefore “not be surprised to see this deal go through”.
