Jim Armitage: Mediclinic wants Spire more than its offer says

After inventing the gall bladder, Dr Samuel Gall made his fortune as “a specialist, specialising in diseases of the rich”. If you believe the comic Tom Lehrer, that is.

Many a private healthcare company has attempted to follow the mythical Dr Gall and coin it by treating the desperate wealthy. Fewer have succeeded. The high costs of health insurance have meant 500,000 fewer Brits have cover now than in 2008.

Spire Healthcare had been mitigating this drop-off by selling its spare capacity to the NHS, but austerity means the state can’t afford it so much these days. The cure for Spire has stopped working.

So, seeking to heal itself, Spire has gone back down the traditional route — selling to the public on a fixed-price basis, pay-per-op. A hip job, madam? £11,401.

The new model may work, but will take years before it makes up for the shortfall in NHS income.

Those fundamentals, and the one-off horror of having a “butcher” surgeon on the books in Ian Paterson, hammered the share price in September, making a lowball bid from Mediclinic all but inevitable.

But for all the negatives around Spire, Mediclinic’s opening offer of 298.6p grossly undervalues the thing.

While it’s true Spire fell to 223p after the Paterson profit warning, it had recovered to 250p, and would have gained further as the dust settled — particularly as its new Manchester and Nottingham hospitals have only just opened for business.

Mediclinic knows this: after all, it paid 360p-a-share for its 30% stake in June 2015.

For my money, that stake makes a rival bid from HCA look unlikely. Mediclinic would hardly walk away from its investment with no deal and a loss. Instead, it will return with an eventually acceptable offer — 340p would be nice.

By Christmas, Mediclinic will be trying its luck at playing Dr Gall with Britain’s wealthy.

Competition at last

With its boring phone and telly masts, Arqiva sounds like a pretty dull utility.

But in fact, if you believe its boss Simon Beresford-Wylie, it is actually the next British tech superstar. How so? Because at present it is trialling technology that would break BT’s Openreach monopoly on delivering broadband.

The plan is to install mini-5G transmitters in lampposts across town which would beam a broadband signal to your home.