Wellington-based private hospital operator Wakefield Health Ltd is merging with Hawke's Bay's Royston Hospital.
The merger follows a swoop by Royston Hospital and the family of Sir Selwyn Cushing on Wakefield in May, when the pair snared a 9 per cent stake after a stand in the market at $4.23
a share.
The Cushings already held 7.8 per cent, giving the two groups about 16 per cent of Wakefield -- the single biggest block of shares.
Wakefield, as a listed company, will be the vehicle for the merger deal, with Royston Hospital's owners taking a 39 per cent stake.
Royston is 50-per cent owned by the doctors who use the hospital, and the other half is owned by a charitable trust.
The combined business will have an annual turnover of $60 million.
The deal cements Wakefield's position as one of the country's biggest private surgical hospital businesses -- second only to Southern Cross.
The combined group will have assets of $90m, including the Wakefield and Bowen Hospitals in Wellington, and Royston in Hastings. It will have a total of 130 beds and 12 operating theatres.
The deal needs Commerce Commission and shareholder approval to go ahead.
Shareholders will meet in November, and the merger is expected to occur in December.
Wakefield chairman John Calder said the companies had similar operational and strategic objectives.
News of the deal came after the sharemarket closed yesterday. Wakefield shares closed at $5.50, against a year high of $6.00 and a low of $2.85.
New Zealand has about 38 private hospitals, 10 wholly and three jointly owned by the biggest operator, Southern Cross.
- NZPA
