Mediclinic Drops After $296 Million Stock Sale to Fund Purchases

Mediclinic International Ltd. (MDC), South Africa’s largest private-hospital owner, fell the most in six months after raising 3.18 billion rand ($296 million) in a share sale to finance acquisitions abroad.

Mediclinic dropped as much as 4.7 percent to 78.75 rand, the steepest intraday decline since Dec. 12, and was trading down 1.2 percent at 81.71 rand as of 10:25 a.m. in Johannesburg.

The company sold 41 million shares to institutional investors at 77.50 rand apiece, Stellenbosch-based Mediclinic said in a statement today. That represents a 1.7 percent discount to the 30-day volume-weighted average price of 78.86 rand, the hospital operator said.

Mediclinic has “identified a number of attractive acquisition and investment opportunities in Switzerland, the United Arab Emirates and selected African opportunities,” it said yesterday. The company has already entered into binding agreements to buy an acute-care, multidisciplinary hospital in Switzerland and is in talks to acquire outpatient facilities in the country.

“When Mediclinic does deals, it’s very considered and where it knows it can add value,” Mathew Menezes, an analyst at Avior Research in Johannesburg, said by phone. “Ideally these would be done with debt, but the balance sheet is stretched and it would be silly to turn down an acquisition opportunity just to avoid selling shares.”

The company has 22.7 billion rand in debt due in 2017, according to data complied by Bloomberg.

The stock sale represents about 5 percent of equity capital and buyers will be entitled to a final dividend of 68 cents a share to be paid June 23, the company said. Trading of the new securities is scheduled to start on June 20.

To contact the reporters on this story: John Bowker in Johannesburg at jbowker2@bloomberg.net; Janice Kew in Johannesburg at jkew4@bloomberg.net

To contact the editors responsible for this story: David Risser at drisser@bloomberg.net; Phil Serafino at pserafino@bloomberg.net Tom Lavell, Ana Monteiro

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