NMC Health share price: what now after KKR walks away?

The beleaguered healthcare group continues to see its share price tumble as the crisis over the company’s finances deepens, prompting private equity firm KKR to rule out a bid for the business.

Private equity firm KKR ruled out its bid for NMC Health last week, leaving the beleaguered healthcare group with GKSD Investment as the only interested party mulling a takeover bid for the business.

‘KKR confirms that it has not made a proposal nor discussed with NMC the terms of any possible offer, and that it does not intend to make an offer for NMC,’ the private equity firm said in a statement.

The news helped send NMC Health’s share price falling even further, with the stock down more than 50% since the beginning of January.

GKSD Investment confirmed that it is weighing up a possible offer for NMC Health earlier this month, though under takeover rules it only has until 9 March to make up its mind.

NMC Health is trading at £8.56 as of 16:15 (GMT) on Monday.

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Jefferies slashes price target for NMC Health

On Monday, analysts at Jefferies reiterated their ‘underperform’ rating for the stock and slashed their target price by more than half from £13 to £5.

Based on the NMC Health trading at £8.56, analysts at the US-based investment bank believe that the stock has a potential downside of 41.6%.

‘We await the results of the independent investigation,’ James Vane-Tempest, an analyst at Jefferies.

‘If any of [Muddy Waters] accounting allegations are proved true, an analysis of precedent situations suggests that it would not be improbable to see a restructuring of the current board, paving the way for further corporate change.’

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The healthcare provider has seen its share nosedive since short seller Muddy Waters published a report on 17 December that cast doubts about the company’s finances and asset valuations.

‘The Committee chose Freeh Group to provide a completely independent, unbiased, comprehensive and transparent report that will address all of these allegations,’ said Jonathan Bomford, Chairman of the Independent Review Committee.

The Committee intends to publish findings of the review into all primary allegations made, particularly all those of a financial nature, in advance of the release of the company’s 2019 financial results.

NMC Health is expected to deliver its full-year results on 5 March.


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