NMC Health share price soars after takeover interest

NMC Health saw its shares rise by as much 21% on Monday after it confirmed that it had received ‘highly preliminary approaches’ in relation to potential takeover offers from private equity firm KKR and GK Investment.

However, the healthcare group said that despite receiving takeover bids, no formal discussions over the terms of either offer have taken place.

‘There can be no certainty that any offer will be made for the company, nor as to the terms on which any offer might be made,’ NMC Health said.

NMC Health is trading at £8.48p as of 15:55 (GMT).

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NMC Health launches legal review to discern shareholders holdings

Before the healthcare operator can accept any takeover offer, however, the company must first determine the precise shareholdings of three of its largest shareholders.

On Monday, the company admitted that it may have misreported the shareholdings of its billionaire founder Bavaguthu Raghuram Shetty, as well as two other controlling shareholders, Saeed Mohamed al-Qebaisi and Khalifa Butti al-Muhair.

The trio reportedly control around 47% between them, however, the company is launching a legal review to determine the size of the three shareholders stakes in the business.

NMC Health will need to have the legal review completed soon to be able to accept an offer from KKR or GK Investment, with the Takeover Panel setting a deadline of 9 March.

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NMC Health: Technical analysis

NMC shares have been hit hard over the past 17 months, with the stock losing 83% of its value since the August 2018 peak of £43.39, with 2019 a year to forget for shareholders, according to Josh Mahony, senior market analyst at IG.

Unfortunately, those declines have shown little sign of letting up, with the stock losing 46% last week alone. This has taken us into mid-2015 low territory of £6.83, with the price starting to consolidate around that level. This is unlikely to mark the end of the declines, with a downtrend clearly in play here.

The ability to break through £10.96 would bring about a signal that things could start looking more optimistic over the short-term. However, even such a rise would point towards a retracement of the decline from £18.25 rather than an overall reversal, Mahony said.

'With that in mind, short-term declines look likely unless the price rises through the £10.96 level,' he added. 'Only with a break through the £18.25 level would we start looking towards a wider recovery in this stock.'