Spire Healthcare has accepted an improved takeover offer from an Australian rival, valuing the UK private hospital business at more than £1bn. The board of Spire said shareholders should accept the 250p-a-share cash deal, which will create the UK’s largest private hospital group, after “extensive negotiations” between the two companies. Last month Ramsay Health Care, which operates 37 private hospitals in the UK, made an initial 240p-a-share offer for Spire, which runs 47 hospitals nationwide. “Since announcement of the initial offer, the board has engaged extensively with shareholders about the price,” said Spire. “The board has engaged with Ramsay and its advisers on the offer price. The board believes the increased final offer is in the best interests of Spire shareholders as a whole, and accordingly unanimously recommends that shareholders vote in favour.” The deal, which shareholders will vote on at a general meeting on 12 July, will see the new combined company overtake BMI/Circle as Britain’s biggest private hospital group. BMI and Circle merged in 2019. Justin Ash, the chief executive of Spire, received a £300,000 bonus in March, on top of his £1.2m pay package, as the business benefited from an NHS contract worth £360m during the Covid-19 pandemic. Spire is paid 30% of its revenues from the NHS, the remainder comes from private health insurance schemes and patients paying themselves. The NHS agreed a deal with Spire and other private hospital providers to take over their clinics at cost. The unprecedented partnership helped ease the pressures on the NHS during the worst of the pandemic. On Monday, the company said that it still expects the NHS will need to increase contracting with the independent sector in the second half of this year, “although it awaits clarity on the NHS’s intentions in this regard”. Spire also said that in the first five months to 31 May revenues were higher than in the same period in 2019, before the pandemic. Spire’s takeover is the latest in a flurry of deals involving foreign buyers snapping up UK healthcare and pharmaceutical companies. Last month, US investorClayton, Dubilier & Rice increased its offer for Dublin-based, London-listed UDG Healthcare to £2.7bn. CD&R is also considering raising its £5.5bn offer for Morrisons, after the supermarket group’s board recommended shareholders accept a £6.3bn counter bid from the US investment fund Fortress, which also owns Majestic Wines. In June, private equity group Carlyle acquired the London-listed inhaler specialist Ventura in a £958bn deal.