Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

Woodford-backed Spire rejects bid approach

Woodford-backed Spire rejects bid approach

Shares in Neil Woodford-backed Spire Healthcare (SPI) shot up 12% today after the private hospital operator rejected a £1.2 billion bid approach from South African rival Mediclinic International (MDCM).

Mediclinic’s preliminary offer of cash and shares values Spire at 298.6p per share but has been deemed insufficient by Spire’s board.

Spire shares jumped 31.8p to 293.1p, just short of the indicative bid as Mediclinic, down 10.5p at 630p, considered its position.

The spike is a bit of good news for Woodford, the country’s leading equity income fund manager whose performance has suffered as a result of a number of stock disappointments in the past year.

Woodford Investment Management is Spire’s second biggest shareholder after Mediclinic with a 15% stake. Other leading investors include BlackRock, Capital Research and Norges Bank, according to Thomson Reuters data.

However, the rally only undoes some of the damage wrought last month when Spire shocked investors with a 75% slump in half-year profits caused by legal settlement charges. Since joining the stock market three years ago after being spun off by Bupa, the private health insurer, the shares have risen nearly 39%.

News of the bid approach made Spire the biggest riser on the UK stock market, although the FTSE All-Share index was off a point at 4,126.
The day’s big fallers were smaller companies Dialight and Pendgragon, both hit by profits warnings.

Dialight (DIAL), an industrial lighting products manufacturer spun off from Dutch electronics giant Philips, plunged 15% to 691p after cutting full-year profits because of short-term production problems.

Car dealership Pendragon (PDG) tumbled 17% to 24p after warning that full-year profits would fall to around £60 million, down from £75.4 million last year and lower than analyst forecasts of £75.2 million. It blamed a fall in demand for new cars for hitting the price of second-hand vehicles. Data this month showed new British car registrations fell 9.3% in September with sales on course for their first annual fall in six years.

The FTSE 100 was virtually unchanged at a point up at 7,524 as the political crisis in Catalonia weighed on European markets with the FTSEurofirst 300 index edging two points higher at 1,536.

GKN (GKN) was the fastest rising blue chip, gaining 3.3% to 313p, after the Sunday Times reported the engineering group was considering splitting its aerospace and auto component divisions into two separately quoted companies.

The shares are still recovering from a profits warning this month caused by disappointing trading in aerospace and a £15 million charge against its inventory and receivables balances. Liberum upgraded the stock to ‘hold’ from ‘sell’ today.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
CIO Tapes 2: two warnings and a lot of optimism

CIO Tapes 2: two warnings and a lot of optimism

Our group of leading asset management CIOs see a lot of opportunities – and overseas investors are buying UK too

Play Wealth Manager Retreat 2017: size isn't everything

Wealth Manager Retreat 2017: size isn't everything

We asked our delegates at the Wealth Manager Retreat what they think about the recent wave of consolidation in the industry.

1 Comment Play CIO Tapes - part 3: 'passive funds are anti-capitalist'

CIO Tapes - part 3: 'passive funds are anti-capitalist'

Citywire recently gathered three of the UK's leading fund investment heads to discuss their hopes, fears and the issues that their jobs throw at them daily.

Read More
Your Business: Cover Star Club

Profile: Thomas Miller explains its post-restructure plans

Profile: Thomas Miller explains its post-restructure plans

Thomas Miller Investment’s (TMI) head of wealth Matt Phillips has strong opinions about many things

Wealth Manager on Twitter