Circle Holdings receives 30p a share takeover offer; FY losses narrow

Circle Holdings shares jumped on Wednesday after the healthcare group said it has recommended a 30p per share takeover offer from private company DMWSL 849.

The offer values the share capital of Circle excluding the shares held by the Tosca Investors at approximately £55.3m and at around £75.2m including the shares held by Tosca.

The offer represents a premium of around 25% to the closing price of 24p on Tuesday and 35% to the average closing price in the three months to 28 March.

Non-executive chairman Michael Kirkwood said: "Your board believes this offer represents fair value for the current stage of Circle's development. While much progress has been made on many fronts, the need to scale the business to achieve sustainable free cash flow and profitability is presently impacted by capital constraints.

"Under the single ownership of a well-resourced bidder, and without the costs and distractions of a public listing, the management team will have greater flexibility to accelerate the growth opportunities that exist and, importantly, maintain the company's primary goal of outstanding patient care and outcomes."

In a separate statement, Circle said revenue in the year to the end of December rose to £133.6m from £127.8m and the pre-tax loss narrowed to £8.1m from £11.7m the year before.

Meanwhile, patient volumes were up 2% to 346,905, with the group attributing the rise to an increase in NHS volumes, with patients requiring both in patient and day case procedures selecting Circle as their healthcare provider of choice.

Kirkwood said: "Last year was a busy year for Circle. While our financial results were not as strong as we would have liked, it was a very important year in terms of positioning the group for the future. As I mentioned in last year's report, we concluded an extensive review of our business.

"Consequently, the past year resulted in some of the identified opportunities coming to fruition, with the group adopting an increasing emphasis towards more capital-efficient activities, including service provision and rehabilitation."

At 0930 BST, the shares were up 22.4% to 29.38p.