Hospital groups falter as hopes for takeover fade

THE clock was ticking for Spire Healthcare and Mediclinic International yesterday after shares in the companies dived on predictions that an awaited takeover was likely to fall through.

In an update, Mediclinic, South Africa’s largest private hospital group, said no deal had been reached to take over UK-based Spire, an independent hospital group. Mediclinic must make a firm offer by 5pm on Monday or the deal will collapse.

Liberum analysts treated the update with pessimism, noting that it hinted no deal was possible, while analysts at Jefferies said that the company was striking a more cautious note.

Spire was hit particularly hard, tumbling 8.6pc, or 25.5p, to 271.1p. Mediclinic fell to 578.5p, a decline of 2.7pc, or 16p.

Investors in funeral services provider Dignity choked again as Berenberg issued a downgrade on its stock.

The troubled firm, which saw shares plunge last week after releasing a gloomy outlook for the market, had its rating cut from a ‘buy’ to ‘hold’, with its price target slashed from 2950p to 2350p.

Berenberg said ‘building competition’ meant its rating had been downgraded. Shares in Dignity plunged to 1965p, down 9.2pc, or 200p, as the markets closed.

Another broker note from Berenberg, but this time an upgrade. The bank has increased its price target on Marshalls to 510p and now holds a ‘buy’ rating on stock, up from ‘hold’, sending Marshalls up by 1.6pc, or 7.1p, to 460p.

The manufacturing company, which specialises in concrete and natural stone products, has benefited from its acquisition of fellow manufacturer CPM, Berenberg said, which would help expansion into flood defence management.

Berenberg also believes further acquisitions are likely.

Following the announcement of its ‘ super-budget’ hotel in Newcastle, Easyhotel will open two hotels in the Netherlands, which is the firm’s second-biggest market. Both are scheduled to open in the second half of 2018, taking the group’s portfolio in the country to seven.

Easyhotel’s stock price was up 0.4pc, or 0.5p, to 120p.

‘ Healthy leasing interest’ boosted investor appetite for property developer British Land, as it traded up 3.7pc, or 22p, at 618.5p. Despite uncertainty due to Brexit, it was still seeing plenty of demand for UK office space.

A more downbeat view on Brexit from Young’s Brewery failed to dishearten shareholders after they toasted the firm’s 6pc rise in revenue in the 26 weeks to October, taking it to £144.1m.

Shares rose 0.4pc, or 5.5p, to 1379.5p, although chief executive Patrick Dardis said: ‘In particular, we remain concerned around the impact that the Brexit negotiations are having on the pub industry, especially in relation to attracting and retaining the best people in our pubs.’

Self-storage company Safestore said it has entered its new financial year in a ‘strong position’ after like-for-like revenue rose 2.8pc in the fourth quarter, to £31.2m.

Earlier this year, Safestore snapped up Alligator Self Storage, the trading name of Stork Self Storage, in a deal worth £56m. Chief executive Frederic Vecchioli said integration of the firm had given it ‘substantial growth potential’. Shares in Safestore closed broadly flat at 470.8p.

Consumer publisher Dods Group closed up 0.9pc, or 0.12p, at 13.75p, after it acquired a 30pc stake in social media monitoring firm Social360 for £1.65m. Dods said it would be launching a new brand, Dods Social Intelligence.

The FTSE 100 was up slightly, by 14.33 points, to finish on 7386.94.