ALLIANCE MEDICAL DEAL
Acquisition set to hurt Life Healthcare earnings
Life Healthcare shareholders could expect lower earnings per share because of the purchase of Alliance Medical and one-off items related to investments in Poland, the group said in a trading statement on Wednesday. Life Healthcare paid between R240m and R260m in the deal, resulting in a decrease in earnings per share and headline earnings per share of 22.7c to 24.6c. Interest will reduce the two line items by about 35.1c and 37c a share, respectively. BPI Africa analyst Kate Turner-Smith said it looked scarier than it was, as one-off items represented the cost of growth. The hospital group expected to raise about R9bn with a rights offer to shareholders. Life Healthcare strategy and investor relations executive Adam Pyle said it was too early to determine the degree of subscription to the offer, but 83% of shareholders voted in favour of the offer at its general meeting in January. Pyle said the group would use the funds to pay debt raised in 2016 to finance the acquisition of Allia...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.