Business Reporter
ST Anne’s Hospital, a subsidiary of pharmaceutical group Caps Holdings, could become a subject of a hostile takeover bid by “a suitor” said to be linked to its former landlord following the expiry of its lease agreement last month, The Herald Business has learnt. The 15-year lease agreement between St Anne’s, one of the top private hospitals in Harare, and Little Company of Mary expired on February 28 but the latter has no intention to renew it. Instead, the LCM said it would look for a new tenant willing to take over hospital operations.
This is despite the claims by Caps executive chairman Mr Fred Mtanda that the lease agreement had a clause which allowed it to be extended by another five years.
“No one has the right to remove us because the 15-year lease agreement that we signed with LCM in 2004 allows us to extend it with another five years,” said Mr Mtanda.
He said in terms of the lease agreement, Caps had the first right of refusal.
St Anne’s Hospital, originally run by the Little Company of Mary, an order of Roman Catholic nuns, was acquired in 2004 by Caps Holdings for about US$8 million.
Caps Holdings also owns QV Pharmacies, which is under provisional judicial management and Caps Pharmaceuticals which has since closed.
In a letter to the Ministry of Health and Child Welfare dated February 24, Integrated Properties, a managing agent for the hospital premises said “the landlord has already advised St Anne’s Hospital of their intention not to renew the lease”.
“As the appointed managing agent for the hospital premises we have seen it fit to notify your respectable office of these developments and to assure you that the landlord and ourselves will do everything to ensure that there will be no disruptions to normal operations,” said Integrated Properties.
It said it fully understood the significance of the facility and “will ensure a smooth takeover by the new tenant”.
The situation could result in a crisis with the possibility of collapse of the hospital as the “approval” of the sitting tenant would be required for takeover by the new tenant.
Mr Mtanda, however, insisted that the move was tantamount to a “hostile takeover”.
He said Caps Holdings was already implementing its short term strategy under the assumption that the lease agreement would be extended for another five years.
“We have already acquired equipment worth US$3 million that started coming in October last year knowing that the agreement we have with LCM would be extended. No one will just move in because everything (hospital equipment) is virtually ours,” he said.
Mr Mtanda said the hostility with the landlord escalated following the appointment of Integrated Properties “who unreasonably hiked rentals from US$22 000 in 2012 to US$60 000“.
“He also stopped us from carrying out some developments at the property although that was part of the lease agreement with LCM.”
No comment could be obtained from the IP managing consultancy Mr Juru as he was said to be out of office until Monday.
St Anne’s Hospital is a leading private hospital in the provision of high quality health care services in Zimbabwe. It is situated in Avondale, a northern suburb in the capital. The hospital has 164 beds set on a three-storey building.