By Ludwig Burger and Jonathan Gould
FRANKFURT (Reuters) - Germany's Rhoen-Klinikum is to sell most of its hospitals to rival Fresenius SE for 3.07 billion euros ($4.1 billion), in an attempt by Rhoen's founder, Eugen Muench, to outflank opponents to an outright sale of the company.
The sale comes exactly 12 months after Fresenius dropped plans to buy all of Rhoen for 3.1 billion euros after an industry rival and service supplier bought blocking stakes in Rhoen.
The 43 hospitals and 15 outpatient facilities now being sold account for about two thirds of Rhoen's revenues, with mainly specialized clinics and university teaching hospitals remaining with Rhoen.
Rhoen and Fresenius have long wanted to merge to create a countrywide network of private hospitals, extensive enough to enable Fresenius to start offering its own medical insurance.
The transaction, which according to Rhoen does not require a shareholder vote, would make Fresenius's German hospitals unit Helios Europe's largest private hospital operator, Fresenius said in a statement.
Shares in Rhoen were up 11 percent at 19.4 euros by 0950 GMT, while those of Fresenius were up 4.4 percent at 91.0 euros.
Konrad Lieder, an analyst with Equinet Bank, said the add-on insurance offering should improve Fresenius's pricing power in the mid-term but warned of legal uncertainties.
"We see two major sources of risk: anti-trust and a legal appeal against the transaction by minority shareholders."
Fresenius's chief executive Ulf Schneider, who last year refrained from reviving the failed bid for Rhoen, told Reuters that the purchase of Rhoen's assets was soundly structured to withstand any legal challenges.
"We're a company driven by opportunities, not by fear. That's why we've done our deals in the past," he added.
Apart from last year's setback, Fresenius has a history of successful takeovers. Recent deals include the 850 million-euro takeover of U.S. blood transfusion equipment maker Fenwal and the 2008 purchase of APP Pharmaceuticals for $3.7 billion to boost its infusion drug business in the U.S.
Rhoen's founder and chairman Muench last year initiated the proposed sale of the entire group, in which he and his wife hold 12.5 percent, to Fresenius for 22.40 euros a share in cash.
But rival German hospitals operator Asklepios and a medical supplies maker B. Braun weighed in with the purchase of enough shares to fend off the suitor.
Muench has continued to campaign for a sale and he and his detractors have been locked in legal action.
Sources familiar with the company have said B. Braun fears a deal will jeopardize its business where it competes with Fresenius as a service supplier to Rhoen, while Asklepios doesn't want its two main rivals to merge.
B. Braun and Asklepios declined to comment on Friday.
Last year Helios had sales of 3.2 billion euros and Asklepios had sales of 3 billion while Rhoen turned over 2.9 billion euros.
The acquisition would boost Helios's sales by about 2 billion euros and earnings before interest, tax, depreciation and amortization (EBITDA) by about 250 million, Fresenius said.
Fresenius said the purchase price would be entirely debt financed and it would not assume any of Rhoen's debt.
The ratio of the Fresenius group's net debt to core earnings would temporarily rise above 3 this year but remain below 3.5 before returning to the 2.5-3.0 target range next year, the company added.
Rhoen said it planned to pay out a special dividend of up to 1.9 billion euros, or 13.8 euros per share, as a result of the sale, on top of its regular dividend.
Some proceeds would also go towards repaying debt, with a further 200 million euros slated for investments, it said. ($1=0.7514 euros)
(Editing by Jane Merriman and Greg Mahlich)