Spire Healthcare Group Plc (LSE:SPI), the UK independent hospital group, saw its shares jump 38% to 207.5p after confirming it had received a non-binding cash offer valuing the business at £1 billion from Toscafund Asset Management, its second-largest shareholder.
The board said it would be minded to recommend the proposal unanimously to shareholders, should Toscafund proceed with a firm offer on the same financial terms.
The 250p price represents a significant premium to the undisturbed share price and values the entire issued share capital of the company at a level that the board considers reflects Spire's progress in recent years.
The proposal includes an option for shareholders to elect for an unlisted rollover equity alternative in respect of some or all of their holding.
Toscafund has submitted a number of earlier proposals during a strategic review that Spire first disclosed in March, when it said it was in discussions regarding a potential sale.
The latest approach remains subject to customary pre-conditions, including completion of confirmatory due diligence and agreement of definitive transaction documentation, and the board said discussions were at a relatively early stage.
Under takeover code rules, Toscafund has until 11 June to either announce a firm intention to make an offer or walk away.
The board said it remained highly confident in Spire's standalone strategy, pointing to adjusted free cash flow growth at a compound annual rate of 32% and a return on capital employed rising from 6.2% to 8.0% between 2022 and 2025.
The company said it would continue to execute its existing strategy in the meantime, with a focus on growing private payor revenues, maintaining capital discipline and driving further cost efficiencies.
There can be no certainty that a firm offer will be made.