Spire mulls possible sale, shares surge

(Sharecast News) - Shares in Spire Healthcare Group surged on Friday, after the FTSE 250 company confirmed it was exploring a possible sale. The private healthcare group, which runs around 90 hospitals and other medical centres, said it was pleased with the progress it had made so far in implementing various strategic and efficiency initiatives.

But it acknowledged that those measures, along with its property portfolio, are "not yet reflected by the market in full".

As a result, Spire said it was working "actively" with Rothschild & Co, and had started "a process to hold discussions with a number of parties in relation to a range of potential options, which include - but is not limited to - a potential sale of the company".

As at 1045 BST, shares in Spire were up 16% at 251p.

Spire has come under increasing pressure from larger investors in recent months, over frustrations about the firm's valuation.

On Thursday, Harwood Capital Management - which holds a stake of around 5% - said: "We believe Spire's current share price fails to reflect the company's value, most notably its unencumbered hospital portfolio worth in excess of £1.4bn and occupational health business."

According to media reports, other shareholders are understood to share Harwood's concerns, including hedge fund Toscafund

Spire currently has a market capitalisation of around £1bn.

As well as hospitals and clinics, the healthcare specialist operates a network of private GPs and provides occupational health services to around 800 corporate clients.

It has benefited from lengthy NHS waiting lists, which have seen frustrated patients opt to pay for treatment instead. Last year it posted adjusted profits of £260m on revenues of £1.5bn.

But its share price has increased by just 6% over the last year.

It has also been hit by rising costs, including energy prices and higher employer National Insurance contributions.

Spire said: "There can been no certainty either that any offer will be made for the company, nor to the terms of any offer, if made. The company is not in receipt of any approaches, and is not in discussions with any parties in respect of a potential sale."