Private equity firm to raise UDG Healthcare offer after shareholder intervention

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Private equity firm Clayton, Dubilier & Rice is set to increase its offer for London-listed healthcare provider UDG Healthcare after opposition to the initial bid from some of the company’s largest shareholders.

The group said on Friday that “following discussions with certain UDG shareholders” it was considering an improved offer of £10.80 a share, which would value the healthcare provider’s equity at £2.7bn, 6 per cent more than the original price.

UDG’s board last month agreed to an offer of £10.23 a share with the private equity group. But M&G and Allianz Global Investors, two of the top five shareholders, criticised the deal, with M&G saying it “fails to offer fair value to ordinary shareholders”.

It is the second time in two days that a private equity group has increased an already agreed bid for a listed company. On Thursday, Blackstone increased its offer for St Modwen Properties by 3 per cent after shareholders said that the original price was too low.

Merger & acquisition activity in the UK pharmaceuticals and healthcare sector has been growing. Last month Ramsay Health Care said it would buy Spire Healthcare to create the UK’s largest private hospital group, while private equity’s Carlyle snapped up London-listed inhaler specialist Vectura.

The sector is considered resilient to downturns and well placed to benefit from demographic changes such as ageing populations.

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