Spire Healthcare Explores Sale Options Under Shareholder Pressure

Spire Healthcare has announced it is considering various options for the business, including a potential sale, in response to increasing pressure from major shareholders. The private hospital group clarified that no decisions have been made, nor has it received any sale proposals or engaged in active discussions regarding such a move. In an official statement to the London Stock Exchange, Spire revealed that it has appointed Rothschild & Co as its lead financial adviser to assist in the review process, which aims to enhance long-term shareholder value.

The announcement follows reports indicating that prominent investors, including Toscafund and Harwood Capital, have urged Spire to consider a sale at a valuation of at least £3.40 per share. As of the close on Thursday, Spire’s market capitalisation was approximately £872 million, with a potential deal valuing the company at over £1.4 billion.

Demand for Private Healthcare Surges

Spire operates 38 hospitals and over 50 clinics throughout the UK. The company has seen increased demand as patients seek alternatives to the overstretched National Health Service (NHS). The number of individuals waiting for NHS procedures reached a record 7.4 million in July 2023, marking the second consecutive month of increase. Additionally, attendances at accident and emergency departments hit unprecedented levels over the summer, further driving patients towards private healthcare options.

Analysts attribute this growing demand to the challenges faced by the NHS. Spire has also been expanding its partnerships with the NHS, which now contribute to more than 30 percent of its revenues. The prices associated with these contracts rose by 3.9 percent in 2024.

Sector experts have noted an uptick in international interest in private hospital groups. Michelle Tempest of consultancy Candesic remarked, “There is a lot of US appetite for UK hospitals at the moment as private providers in the US are under pressure from Medicaid cutbacks, whereas in the UK there are opportunities to expand.”

Past Bids and Shareholder Sentiment

In 2021, Spire rejected a bid of £2.50 per share from Ramsay Healthcare of Australia, with shareholders, including Toscafund, asserting that the offer did not reflect the true value of the business. Some investors are now eager to realise gains following Spire’s operational turnaround.

The company has indicated that the current review is still in its early stages and may not lead to any transaction. As Spire navigates this process, its ability to adapt to the evolving healthcare landscape will be critical in meeting shareholder expectations and enhancing operational performance.