Spire Healthcare has rejected a takeover offer from FTSE 100 private hospital group Mediclinic, saying it "significantly undervalues" the firm.
Shares in the UK private hospital firm shot up by more than 11 per cent at the time of writing to reach a high of 295.07p.
Mediclinic, which already owns 29.9 per cent of Spire, last Wednesday submitted an offer it said valued Spire at 300p per share, a 30 per cent premium on the price before press reports of a possible bid first surfaced.
However, the board – excluding Mediclinic chief executive Danie Meintjes – "unanimously" rejected the offer, with shareholders advised to leave it, FTSE 250 constituent Spire announced today.
Mediclinic said it was "considering its position"
Speculation surrounding the potential takeover pushed up Spire's share price last week, with its stock up nearly six per cent at 261.3p on Friday.
The firm had struggled in September after announcing a hefty compensation fund for misdiagnoses in one of its hospitals in its results.
First-half profits fell by almost 75 per cent, with investors worried about the prospects for referrals from NHS GPs, as well as exposure to Brexit uncertainties.
However, the bid by Mediclinic has revived interest in the firm, with the latter given until 20 November to make a renewed offer to Spire.
Spire runs 38 private hospitals and 13 clinics in England, Wales and Scotland, with users including those who are privately insured, self pay patients and NHS referred patients.
The takeover approach from Mediclinic, which runs private hospitals in South Africa, Namibia, Switzerland and the United Arab Emirates, will represent an early challenge for newly appointed chief executive Justin Ash.
Ash was appointed at the end of September, but is not set to take up the role for another week. He recently left Oasis Healthcare, where he was chief executive for nine years. Spire's current interim chief executive, Simon Gordon, will move back to chief financial officer when Ash begins work.