Al Noor and Mediclinic boards agree to merger terms

The boards of Al Noor and Mediclinic have reached an agreement on the terms of a possible merger.

Under the proposed deal announced on Wednesday, Al Noor will acquire Mediclinic, with shareholders receiving 0.625 new shares for each Mediclinic share held.

Al Noor shareholders will also receive a special dividend of £3.28 per share and the opportunity to tender their shares for a cash payment

The proposed deal will result in Mediclinic shareholders owning 84% to 93% of the enlarged group.

The groups said the merger will create a “leading international private healthcare group with deep operational expertise and a well-balanced geographic profile in Southern Africa, Switzerland and the United Arab Emirates”.

It will also have exposure to the UK market through a minority stake in Spire Healthcare Group.

Al Noor chief executive Ronald Lavater said the companies make a compelling strategic fit in terms of complementary geographies and a shared commitment to providing outstanding patient care.

“As one of the world's largest acute hospital operators outside the United States, this will be a platform for further growth and delivery of world class service, benefiting all our stakeholders, from the communities we serve, to our talented employees and our investors,” he said.

“We have an excellent opportunity to leverage this strength to expand coverage and service delivery, responding to burgeoning demand for world class healthcare."

The merger is expected to be completed in the first quarter of 2016, with shareholder meetings to be held in December 2015.

However NMC Health, another company interested in merging with Al Noor, isn't giving up so easily.

It released a statement after the announcement saying it confirms its belief in the competitiveness of the possible initial offer.

"The combination of NMC and Al Noor has the strongest strategic and financial rationale for all stakeholders.

"We reiterate our commitment to this opportunity despite the lack of meaningful engagement from the board of Al Noor."

Investec noted that if the Al Noor and Mediclinic merger goes ahead, NMC won't be affected by it.

"The company has a greater number of private beds and has been creating speciality niches in much needed areas such as IVF and long-term care.

"NMC is also ahead of Al Noor and MDC in preparing for the roll out of mandatory health insurance in Sharjah."

At 1240 BST, Al Noor shares were up 184.5p to 1,179p.