Shares in Mediclinic International dropped this morning after doubts emerged over whether the company would reach an agreement on its planned takeover of Spire Healthcare.
The FTSE 100 private hospitals chain, which was created by a merger between South Africa's Mediclinic and Abu-Dhabi-based Al Noor, said talks between the companies had continued but that "no agreement has yet been reached on any of the key terms of an offer", causing shares to fall as much as 6.5 per cent in morning trading.
Spire rejected Mediclinic's £1.2bn takeover offer in October, saying it "significantly" undervalued the firm. Mediclinic already owns nearly 30 per cent of the UK healthcare company.
Liberum analyst Graham Doyle said: "The decline of the Mediclinic share price since then means this bid is now worth £2.88 per share. This is 2.5 per cent below Spire’s close price last night. Mediclinic has noted that any further offer it makes will need to be in the best interest of its shareholders and 'accordingly considers it appropriate to take into account the movement in its share price since' the initial proposal."
Mediclinic must announce its intention to make a bid or confirm it will not by 20 November, but Doyle added that it looked as if Mediclinic was hoping for an extension to be requested by Spire.
The private hospitals chain also today revealed it made a loss before tax of £10m for the first six months of the year compared with a profit of £148m the previous year.
The company's underlying earnings fell 11 per cent on the previous year, largely due to poor performance in the Middle East and at its Swiss-based firm Hirslanden.
Chief executive Danie Meintjes said the company had made a good start to the second half of the financial year, with trading across all divisions in line with expectations.
Shares in the firm were down 2.1 per cent at 582p in afternoon trading.