Asklepios Can Lift Rhoen Stake, Cartel Office Rules

Asklepios Kliniken GmbH can buy more than 10 percent of rival German hospital operator Rhoen-Klinikum AG, with some conditions, Germany’s Federal Cartel Office ruled.

Rhoen-Klinikum shares fell after the decision, which leaves an obstacle to Fresenius SE renewing its effort to acquire Rhoen-Klinikum. Fresenius ended its 3.1-billion-euro ($4 billion) bid last year after Asklepios acquired enough Rhoen-Klinikum shares to foil the takeover.

Asklepios can buy as much as 10.1 percent of Rhoen-Klinikum as long as it divests the Harzklinik hospital and an outpatient facility, the Bonn-based antitrust agency said in an e-mailed statement today. The stake in Rhoen-Klinikum would lead to market dominance in the German city of Goslar, the office said.

“It doesn’t really change anything,” Ingeborg Oie, an analyst with Jefferies International Ltd., said in a phone interview after the ruling. “I don’t think Asklepios will start divesting hospitals just to increase its stake slightly.” Asklepios already has built a blocking stake in Rhoen-Klinikum, she said.

Under the cartel office decision, Asklepios has to wait a year before increasing its stake, Rudi Schmidt, a spokesman for the Koenigstein, Germany-based company, said in a telephone interview. Asklepios now has clarity, and has a year to consider its next step, he said.

Shareholder Approval

Rhoen-Klinikum fell 1.4 percent to close at 16.54 euros in Frankfurt trading. Fresenius last year offered 22.50 euros a share.

Rhoen-Klinikum had readied a “war room” to prepare for the decision, Chief Financial Officer Jens-Peter Neumann said in a March 7 interview in London. The Bad Neustadt an der Saale-based company will start negotiations with shareholders after the ruling, he said at the time.

The foiled Fresenius bid left Rhoen-Klinikum with suppliers and competitors as major stakeholders: Asklepios, Fresenius, medical-products maker B. Braun Holding GmbH and the investors in another hospital operator, Sana Kliniken AG. Any potential partner would face the same hurdle that blocked Fresenius -- a 90 percent threshold of shareholder approval for a deal.

If Fresenius wanted to make another bid there’s “really no way around all of these companies that own stakes,” said Oie.

“Nothing has changed,” for Fresenius, Matthias Link, a company spokesman said in a phone interview. “We put a concrete offer on the table last year. It received positive feedback and we think the concept is the right one. Of course we can’t comment on the motivation of other Rhoen shareholders.”

Reviewing Implications

Rhoen-Klinikum will review the “economic and legal implications” of the ruling, which “changes nothing immediately,” the company said in statement on its website.

The decision may backfire, Eugen Muench, the chairman of Rhoen-Klinikum’s supervisory board, said in an e-mailed statement. It’s unclear if Asklepios is in a position to increase its holdings, or if it will do so, he said. Muench, the company’s founder, and his family own 12.5 percent of Rhoen-Klinikum’s shares. They supported Fresenius’s bid.

The cartel office said in December it was concerned the Asklepios plan would endanger competition and patient choice, especially around Goslar. Asklepios has a stake of about 5 percent in its rival, according to data compiled by Bloomberg.

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