Toscafund Asset Management is on the verge of completing a £1 billion (€1.16 billion) takeover of Spire Healthcare, Britain's biggest private hospitals group, with plans to install Paolo Pieri, formerly of Circle Health, as executive chairman.

Toscafund has been in talks over the deal for several months, with Spire's board having already recommended the firm's 250p-a-share offer.

Mr Pieri previously helped build Circle Health into one of the UK's largest private healthcare providers in partnership with Toscafund, its then owner. He would take over a company comprising 38 hospitals and more than 60 clinics, which treated close to 1.4 million inpatients, outpatients, day case patients and workplace health clients last year, and is Britain's largest provider by volume of hip and knee operations.

Spire is currently led by chief executive Justin Ash, formerly of dentistry chain Oasis, while chairman Sir Ian Cheshire has said he will step down regardless of whether the takeover completes.

Financing for the deal is understood to be provided by a syndicate comprising Song Capital, Ares Management and Three Hills Capital Partners. Song Capital, which previously helped finance deals involving Circle and Nuffield Health, is reported to have committed roughly £500 million (€581 million) in long-term property financing secured against the majority of Spire's freehold hospitals.

The structural driver behind the deal is continued private equity consolidation of UK independent hospital capacity, with financing structured around freehold property assets rather than operating cash flow alone, reflecting investor appetite for hard healthcare infrastructure over pure operating risk.

Discussions around financing arrangements have prompted a series of deadline extensions from the Takeover Panel, with the two sides said to be working toward finalising terms ahead of a Thursday deadline, though a further short extension remains possible.

For the sector, the deal would confirm that private equity continues to see scale UK hospital groups as attractive platforms for operational turnaround under experienced sector leadership.

Source: uk.finance.yahoo.com