Rumours that two groups have made rival bids to buy a 40% stake in NMC Health plc (LON:NMC) put a rocket under the Middle East-focused hospital operator’s shares on Thursday.
A Reuters report, citing four sources, said two groups, including one backed by Chinese conglomerate, Fosun, had submitted offers to buy the stake, which is jointly owned by two UAE-based businessmen, Khalifa Butti Bin Omeir and Saeed Bin Butti Al Qebasi.
READ: NMC delivers record annual profits
The two men bought the shares back in 2011 for US$1bn, meaning they stand to net a tidy profit on their investment should they sell up.
NMC’s single biggest shareholder, its founder B R Shetty, is not planning to sell his stake, the report said.
According to Reuters’s sources, the two interested parties are looking to pay a premium to the current share price, which had tanked by a third so far this year until before Thursday’s reports.
NMC shares were up 29% to 2,490p in morning trading.
Profits rise in first half
The bid speculation came as NMC reported a 33% jump in revenue to US$1.24bn in the six months ended 30 June (H1 18: US$0.93bn).
Excluding the impact of new accounting regulations, underlying earnings rose by a fifth to US$276.3mln (H1 18: US$225.5mln).
Earnings per share jumped to US$0.72, from a US$0.56 last time around.
As the largest healthcare operator in the Middle East, NMC said it had benefited from tighter regulations in the region as well as consolidation.
“NMC Health again achieved strong performance in the first six months of the year, as we continue to deliver on our growth strategy in our attractive target markets,” said chief executive Prasanth Manghat.
“All key financial and operational metrics of our healthcare and distribution businesses performed in line with our guidance. We also made good progress on increasing free cashflow during the period and we see room for further improvement in H2 2019, as has been the trend in previous years.”