Struggling hospital group NMC Health confirms interest for possible takeover

FTSE 100-listed hospital group NMC Health is holding discussions with one of the world’s most powerful private equity firms, the company has confirmed.

KKR held talks with bosses at NMC Health, which operates 19 private hospitals from its Abu Dhabi base, about a potential £2 billion takeover.

Swiss-based GK Investment is also in discussions about a possible bid.

The confirmation comes following reports in the Mail On Sunday that a sticking point remains over the asking price, with shares becoming extremely volatile in recent months.

Shares fell 36% in the past week alone, following a sustained attack by short-sellers, who accused the business of potential fraudulent activity.

In a report published in December, short-seller Muddy Waters published a report that accused NMC of misusing funds.

It said: “At the worst of times, the company has invested in large assets at costs that we find too high to be plausible – including from parties we believe are de facto under common control. This behaviour gives rise to concerns about fraudulent asset values and theft of company assets.”

KKR has already invested heavily into healthcare in the US – having previously owned Boots in the UK – and paid 2.8 billion dollars (£2.2 billion) in 2017 for WebMD – a health information business.

It also paid a further 10 billion dollars (£7.8 billion) for US hospital group Envision Healthcare in 2018.

But NMC has been struggling recently and was hit when two UAE-based billionaires, Saeed and Khalifa Bin Butti, were forced to sell some of their investment in the business by their lenders, Deutsche Bank and Credit Suisse.

In a short statement, NMC said it “has received highly preliminary approaches from Kohlberg Kravis Roberts & Co LP (“KKR”) and GK Investment Holding Group SA (“GKI”) regarding possible offers for the Company.

“No proposal has been made by either potential offeror and there have been no discussions as to the terms of any possible offer.

“There can be no certainty that any offer will be made for the company, nor as to the terms on which any offer might be made.”

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