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Italian group mulls offer for NMC

Issac John/Dubai
Filed on February 11, 2020 | Last updated on February 11, 2020 at 05.01 pm
NMC, BR Shetty, KKR, NMC Health, hospital in UAE

NMC has been hit by turbulence since US short-seller Muddy Waters queried its financial statements two months ago.

GKSD Investment Holding of Italy confirmed on Tuesday that it was "in the preliminary stages of considering" an offer for NMC as shares of the embattled healthcare group extended losses to touch session lows.

However, private equity firm Kohlberg Kravis Roberts & Co LP (KKR), which NMC named on Monday as a prospective bidder, denied any intention to make an offer, triggering a further nosedive in shares on Tuesday.

NMC shares were down 16 per cent on the London Stock Exchange by 1030 GMT on Tuesday, and are set to lose half the gains made when company disclosed the buyout approaches on Monday.

While NMC officials could not be immediately reached for comment on KKR's statement, the healthcare group's founder BR Shetty's spokesperson declined to comment on the developments when Khaleej Times contacted him.

In a statement, the Italian company GKSD confirmed that its Middle East and Africa-focused firm GK Investment Holding Group (GKI) is acting as its adviser on the buyout and made the approach on its behalf and that GKSD is in the preliminary stages of considering an offer for NMC. Rothschild & Co and Goldman Sachs are also acting as advisers for GKSD.

However, the statement added that the "announcement does not amount to a firm intention to make an offer and accordingly there can be no certainty that an offer will made, nor as to the terms on which any offer will be made".

NMC has been hit by turbulence since US short-seller Muddy Waters queried its financial statements two months ago, sending its shares spiralling two-thirds lower.

While disclosing preliminary buyout approaches from KKR and GK Investment on Monday, NMC said its co-chair and founder BR Shetty had stepped back from its board after he informed NMC of potentially inaccurate reporting of his holdings.

NMC, which listed in London in 2012 and was promoted to the blue-chip FTSE 100 index in 2017, operates clinics and hospitals, specialized maternity and fertility clinics, and long-term care homes hospitals across 19 countries.

GKSD, an investment vehicle backed by sponsors of Italy's private hospital chain Gruppo San Donato (GSD), was founded in 1957, and operates research hospitals, general hospitals and clinics in 44 locations across Italy and calls itself the country's largest private hospital group.

GKSD is being advised by GK Investment, which made the approach to NMC on its behalf, the firm said.

The UAE-headquartered healthcare group was reported last year as the target of another group backed by China's Fosun, looking to buy a 40 per cent stake.

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