RBC Capital lowers Spire Healthcare to 'sector perform' following Toscafund bid

(Sharecast News) - Analysts at RBC Capital Markets cut their rating on Spire Healthcare to 'sector perform' from 'outperform' on Tuesday and lowered their price target on the stock from 300p to 250p, saying the recommended take‑private offer from a Toscafund‑led consortium effectively caps the upside for shareholders. RBC Capital stated the 250p cash bid, announced last week, followed an extended strategic review and represented a 66% premium to Spire's pre‑announcement share price. It noted that the offer equates to around 8.6x FY25 adjusted underlying earnings and was likely to be accepted given the commercial challenges facing the group, including volatile NHS demand and persistent inflationary pressures that have led to repeated financial disappointments.

The Canadian bank highlighted that the Rule 2.7 announcement values Spire's equity at roughly £1bn and implies an enterprise value of about £2.3bn. Shareholders can alternatively opt for unlisted rollover securities, capped at 28m shares. The scheme requires approval from 75% of voting shareholders, with around 42.7% already committed through irrevocable undertakings from major investors and the board.

RBC Capital said the review involved discussions with more than 60 potential buyers, but Toscafund's consortium was the only party to submit a proposal the board deemed attractive.

It added that the board's rationale centred on the gap between Spire's public valuation and underlying asset value, execution risks in the standalone plan, and the greater flexibility offered by private ownership.





Reporting by Iain Gilbert at Sharecast.com