Rhoen Pares Gain After Investor Challenges Threshold Vote

Rhoen-Klinikum AG pared gains in Frankfurt trading after saying shareholder B. Braun Holding GmbH is legally challenging an annual meeting vote to abolish an investor-approval threshold on mergers and other key decisions.

Rhoen-Klinikum closed up 6.7 percent at 17.73 euros at 5:30 p.m. in Frankfurt, the highest price since Aug. 31, after jumping as much as 14 percent earlier today. The German hospital operator said yesterday that shareholders at the meeting had abolished a requirement that major decisions receive the backing of investors holding at least 90 percent of the voting rights

Braun’s vote wasn’t accepted because the medical-supply company’s representative wasn’t “duly legitimated,” Rhoen-Klinikum Chairman Eugen Muench said in an e-mailed statement today. Rhoen-Klinikum said separately that Melsungen, Germany-based Braun and other shareholders or representatives told it they plan to go to court to challenge the resolutions.

The 90 percent-approval requirement played a role in derailing a takeover last year of Bad Neustadt An Der Saale-based Rhoen-Klinikum by Fresenius SE, another hospital operator. Braun, a competitor to Fresenius’s Kabi intravenous-therapies division, bought a stake of at least 5 percent in Rhoen-Klinikum following the failed combination.

Any shareholder has a month to object to the vote, which received backing of investors owning 90.5 percent of the capital, and the decision won’t become final until it’s entered into the German corporate register, according to Rhoen-Klinikum.

Offer Amount

Fresenius offered 22.50 euros a share, or a total 3.1 billion euros ($4.1 billion), for Rhoen-Klinikum before abandoning the bid in September after competitor Asklepios Kliniken GmbH bought a stake to block the takeover. A successful deal would have created the biggest German hospital-operating network.

Closely held Asklepios, based in Hamburg, and Fresenius, which has its headquarters in the Frankfurt suburb of Bad Homburg, each hold 5 percent of Rhoen-Klinikum, equaling the stock held by Braun, according to data compiled by Bloomberg. Muench and his family own the biggest stake at 12.5 percent.

“It’s very difficult to judge what the outcome will be,” Igor Kim, an analyst with Close Brothers Seydler Research AG, said by phone.

Alecta’s Push

Swedish pension fund Alecta, the second-biggest shareholder at 9.9 percent, pushed for the elimination of the 90 percent voting threshold to improve the hospital-management company’s flexibility.

Muench gave a speech at the meeting in support of dropping the threshold, citing operating challenges in the hospital-management industry that would encourage consolidation. The chairman said he preferred the Fresenius tie-up because a combination with Asklepios would bring about fewer revenue gains and cost savings.

Rhoen-Klinikum said on June 10 that it’s in fresh talks with Fresenius on a clinic partnership that would allow patients to buy insurance for in-network services such as single-bed hospital rooms and treatment by top doctors. The partnership as envisioned wouldn’t be exclusive, it said.

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